HomeMy WebLinkAbout2023-02-21 Agenda PacketIN-PERSON PUBLIC PARTICIPATION: Members of the public are welcome to attend City Council meetings in
person. Alternate ways to view meetings live or on-demand include: livestreamed on HBTV Channel 3 (replayed on
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accessed from https://huntingtonbeach.legistar.com/calendar; or, from any Roku, Fire TV or Apple device by
downloading the Cablecast Screenweave App and searching for the City of Huntington Beach channel.
PUBLIC COMMENTS: Individuals wishing to provide a comment on agendized or non-agendized items, including
Study Session, Closed Session, and Public Hearing, may do so in person by completing a Request to Speak
form delivered to the City Clerk.
Members of the public unable to personally participate in the meeting 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 the day of the meeting, 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.
Communications received following the 2:00 PM deadline will be incorporated into the administrative record.
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
City Council/Public Financing Authority Regular,
and Special Meeting of the Housing Authority
Tuesday, February 21, 2023
3:30 PM Study Session
6:00 PM Regular Business Meeting
Council Chambers
2000 Main Street
Huntington Beach, CA 92648
MAYOR AND CITY COUNCIL
TONY STRICKLAND, Mayor
GRACEY VAN DER MARK, Mayor Pro Tem
RHONDA BOLTON, Councilmember
PAT BURNS, Councilmember
DAN KALMICK, Councilmember
CASEY McKEON, Councilmember
NATALIE MOSER, Councilmember
STAFF
AL ZELINKA, City Manager
MICHAEL E. GATES, City Attorney
ROBIN ESTANISLAU, City Clerk
ALISA BACKSTROM, City Treasurer
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AGENDA February 21, 2023City Council/Public Financing
Authority
3:30 PM - COUNCIL CHAMBERS
CALL TO ORDER
ROLL CALL
Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, Burns
CITY COUNCILMEMBER COMMENTS (3-Minute Time Limit) - The Mayor will facilitate a
voluntary opportunity for members of the Huntington Beach City Council to individually
make brief comments to the public. Please note that the Brown Act does not allow for
lengthy comments, discussion, or action on topics that are not on the agenda.
ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After
Agenda Distribution)
PUBLIC COMMENTS (3 Minute Time Limit)
At this time, the City Council will receive comments from members of the public regarding any
topic, including items on the Study Session and/or Closed Session agendas. Individuals wishing
to provide a comment on item(s) may do so in person by filling out a Request to Speak form
delivered to the City Clerk. All speakers are encouraged, but not required to identify themselves
by name. Each speaker may have up to 3 minutes unless the volume of speakers warrants
reducing the time allowance.
Please note that the Brown Act does not allow discussion or action on topics that are not on the
agenda. Members of the public who would like to speak directly with a Councilmember on an item
not on the agenda may consider scheduling an appointment by contacting the City Council's
Administrative Assistant at (714) 536-5553 or emailing the entire City Council at
city.council@surfcity-hb.org.
STUDY SESSION
23-1581.City’s Infrastructure Report Card
RECESS TO CLOSED SESSION
CLOSED SESSION
23-1512.CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION.
(Paragraph (1) of subdivision (d) of Section 54956.9). Name of case:
Gapezzani (Gary) v. John Romero, City of Huntington Beach; OCSC
Case No.: 30-2021-01225030.
23-1613.CONFERENCE WITH LABOR NEGOTIATORS (Gov. Code section
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AGENDA February 21, 2023City Council/Public Financing
Authority
54957.6.) Agency designated representatives: Al Zelinka, City
Manager, and Peter Brown, Chief Negotiator; also in attendance:
Jose Rodriguez, Human Resources Manager; Travis Hopkins,
Assistant City Manager; Michael E. Gates, City Attorney; Eric Parra,
Chief of Police; and Sunny Rief, Acting Chief Financial Officer.
Employee Organization: Police Officers’ Association (POA).
23-1704.CONFERENCE WITH LEGAL COUNSEL-LITIGATION (Gov. Code
section 54956.9(d)(4).): Number of Matters: One (1).
6:00 PM – COUNCIL CHAMBERS
RECONVENE CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING AND CALL
TO ORDER THE SPECIAL MEETING OF THE HOUSING AUTHORITY
ROLL CALL
Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, Burns
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.
22-11185.Chaplain Roger Wing with the Huntington Beach Fire Department
CLOSED SESSION REPORT BY CITY ATTORNEY
ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After
Agenda Distribution)
PUBLIC COMMENTS (3 Minute Time Limit)
At this time, the City Council will receive comments from members of the public regarding any
topic, including items on the open session agenda. Individuals wishing to provide a comment
may do so in person by filling out a Request to Speak form delivered to the City Clerk. All
speakers are encouraged, but not required to identify themselves by name. Each speaker may
have up to 3 minutes unless the volume of speakers warrants reducing the time allowance.
Please note that the Brown Act does not allow discussion or action on topics that are not on the
agenda. Members of the public who would like to speak directly with a Councilmember on an item
not on the agenda may consider scheduling an appointment by contacting the City Council's
Administrative Assistant at (714) 536-5553 or emailing the entire City Council at
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AGENDA February 21, 2023City Council/Public Financing
Authority
city.council@surfcity-hb.org.
While the City Council welcomes public involvement and supports and defends free speech, the
City Council rejects comments from anyone that are discriminatory, defamatory or otherwise not
protected free speech. Those comments will not inform nor be considered by the City Council and
may be cause for the Mayor to interrupt the public speaker. Such public comments will not be
consented to or otherwise adopted by the City Council in its discussions and findings for any
matter tonight.
COUNCIL COMMITTEE APPOINTMENT ANNOUNCEMENTS
Councilmembers may make brief announcements on any appointments made to a board,
committee, or commission. Councilmembers may not discuss or take any action on these
announcements. Announcements are limited to 1 minute.
AB 1234 REPORTING
Per AB 1234 (Government Code Section 53232.3(d)) Councilmembers who attend a meeting,
conference, or similar event at the expense of the City must provide a brief report of the meeting,
conference, or similar event during the next regular City Council meeting. Reports are limited to 1
minute.
OPENNESS IN NEGOTIATION DISCLOSURES
Councilmembers must publicly disclose any meetings or communications with City employee
associations, related to the negotiations of labor agreements. Disclosures are limited to 1 minute
and must be made by the next regular City Council Meeting.
CITY MANAGER'S REPORT
23-1746.Main Street Redevelopment Project - Additional Outreach Update
23-1597.Update on the Review of the City’s Membership in the Orange
County Power Authority (OCPA) Joint Power Authority
CITY CLERK'S REPORT
23-1668.Presentation on the Safe and Sane Fireworks Stand Application and
Lottery Process for 2023
CONSENT CALENDAR
Office of City Clerk
23-1469.Approve and Adopt Minutes
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AGENDA February 21, 2023City Council/Public Financing
Authority
Approve and adopt the City Council/Public Financing Authority regular meeting and the
Housing Authority special meeting minutes of February 7, 2023.
Recommended Action:
Office of City Manager
23-15410.City Council to consider positions by Intergovernmental Relations
Committee (IRC)
Consider one or more of the actions on the following issues proposed by the IRC:
1. Submit a Letter of Support for SB 381 (Min) - Electric Bicycles Study; and ,
2. Recommend that staff issue Request for Qualifications for State Legislative
Advocacy Services and Federal Legislative Advocacy Services separately.
Recommended Action:
Community Development Department
23-10411.Approve and authorize execution of Amendment No. 1 to License
Agreement between the City of Huntington Beach and PCH Beach
Resort, LLC, for the beach concession at 21529 Pacific Coast
Highway
A) Approve “Amendment No. 1 to License Agreement Between the City of Huntington
Beach and PCH Beach Resort, LLC” for the Concession Stand at 21529 Pacific Coast
Highway; and,
B) Authorize the Mayor, City Manager, and City Clerk to execute the Amendment and
other related documents.
Recommended Action:
23-14712.Consider for approval Bonanni Development Company IV, LLC
Affordable Housing Agreement for the development of 35 ownership
units at 19070 Holly Lane
A) Approve the “Affordable Housing Agreement for 19070 Holly Lane , Huntington Beach
by and Between the City of Huntington Beach, a California Municipal Corporation and
Bonanni Development Company IV, LLC, a Limited Liability Corporation” for the
development of 35 ownership units at 19070 Holly Lane; and,
B) Authorize the City Manager or their designee to implement and execute the Affordable
Housing Agreement for the Project, including all necessary related documents; and,
C) Authorize the City Manager to execute an amendment to the Affordable Housing
Agreement, as prepared by the City Attorney, should the Developer upon completion of the
Project decide to rent instead of sell the townhomes due to market conditions; and,
Recommended Action:
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AGENDA February 21, 2023City Council/Public Financing
Authority
D) Authorize the Housing Authority Executive Officer or their designee to execute all
necessary implementing agreements and related documents .
Fire Department
22-80713.Authorize execution of an agreement with Toyota for vehicles for
Marine Safety, Beach Parking, and Beach Maintenance and approve
appropriation of funds
Authorize the Mayor and City Clerk to execute “Promotional Agreement Between the City
of Huntington Beach and Southern California Toyota Dealers Advertising Association” to
provide 24 vehicles for Marine Safety, Beach Parking, and Beach Maintenance uses;
approve the appropriation of $216,869 in Equipment Replacement Fund 324 and $22,150
in the General Fund Fleet Maintenance business unit 10085705 to upfit and maintain the
vehicles.
Recommended Action:
23-09914.Adopt Resolution No. 2023-04 authorizing certain City Officials to
execute Grant Applications and Documents
Adopt Resolution No. 2023-04, “A Resolution of the City Council of the City of Huntington
Beach Authorizing Certain City Officials to Execute Grant Applications and Documents.”
Recommended Action:
23-10015.Adopt Resolution No. 2023-05 authorizing certain City Officials to
execute Applications and Documents to Obtain Disaster and
Emergency Relief
Adopt Resolution No. 2023-05, “A Resolution of the City Council of the City of Huntington
Beach Authorizing Certain City Officials to Execute Applications and Documents to Obtain
Disaster and Emergency Relief.”
Recommended Action:
23-13916.Adopt Resolution No. 2023-06 to accept Grant Funds from the
California Department of Fish and Wildlife, Office of Spill Prevention
and Response for Oil Response Equipment
Adopt Resolution No. 2023-06, “A Resolution of the City Council of the City of Huntington
Beach to Accept Grant Funds from the California Department of Fish and Wildlife, Office
of Spill Prevention and Response for Oil Spill Response Equipment.”
Recommended Action:
Police Department
23-14417.Adopt Ordinance No. 4275 to Amend to Huntington Beach Municipal
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AGENDA February 21, 2023City Council/Public Financing
Authority
Code Chapter 13.08.070 Relating to Dogs and Other Animals -
Approved for Introduction February 7, 2023 - Vote: 7-0
Adopt Ordinance No. 4275, “An Ordinance of the City of Huntington Beach Amending
Chapter 13.08 of the Huntington Beach Municipal Code Relating to Dogs and Other
Animals.”
Recommended Action:
Public Works Department
23-05418.Award and authorize the execution of a construction contract with
Mehta Mechanical Company, Incorporated, in the amount of
$10,648,600 for the Heil Avenue Storm Water Pump Station
Replacement Project, CC-1293
A) Accept the lowest responsive and responsible bid submitted by the Mehta Mechanical
Company, Incorporated, in the amount of $10,648,600; and,
B) Authorize the Mayor and the City Clerk to execute a construction contract in a form
approved by the City Attorney .
Recommended Action:
23-12219.Authorize the City Manager to Sign a Letter of Commitment for the
Local Groundwater Supply Improvement Project (“Local SiP”)
Application for Grant Funds from the U.S. Department of the
Interior’s Bureau of Reclamation WaterSMART Program and
Authorize Grant Matching Funds in the Amount of $25,000
Authorize the City Manager to sign and submit the Letter of Commitment (Attachment 1) to
Mesa Water District for the Local SiP application for grant funds from the U.S. Department
of the Interior’s Bureau of Reclamation WaterSMART Program and authorize grant
matching funds in the amount of $25 ,000.
Recommended Action:
ADMINISTRATIVE ITEMS
23-15720.Year-End Audit Results for the FY 2021/22 Annual Comprehensive
Financial Report (ACFR), Fiscal Year 2022/23 Mid-Year Budget
Adjustments, and Fiscal Year 2022/23 Budget Update and Fiscal
Health Report
A) Receive and File the FY 2021/22 Annual Comprehensive Financial Report and other
auditor-issued reports; and
Recommended Action:
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AGENDA February 21, 2023City Council/Public Financing
Authority
B) Receive and file the FY 2022/23 Budget Update and Fiscal Health Report (Attachment
8); and,
B) Approve mid-year budget adjustments to the FY 2022/23 Revised Budget in the funds
and by the amounts contained in Attachment 3; and,
C) Authorize additional Professional Services authority in the Fiscal Year 2022/23
Revised Budget in the departments and by the amounts contained in Attachment 4; and,
D) Approve and authorize the Mayor and City Clerk to execute “Amendment No. 1 to
Agreement between the City of Huntington Beach and CSG Consultants, Inc. for On-Call
Building Division Plan Review Services” (Attachment 5); and,
E) Approve and authorize the Mayor and City Clerk to execute “Amendment No. 1 to
Agreement between the City of Huntington Beach and True North Compliance Services,
Inc. for On-Call Building Division Plan Review Services” (Attachment 6); and,
F) Accept, approve and authorize the City Manager to execute the grant agreement with
the State of California Energy Commission in the amount of $80,000 (Attachment 7).
ORDINANCES FOR INTRODUCTION
23-16221.Approve for Introduction Ordinance No. 4280 Amending Chapter
2.109 of the Huntington Beach Municipal Code Regarding the
Finance Commission
Approve for introduction Ordinance No. 4280, “An Ordinance of the City of Huntington
Beach Amending Chapter 2.109 to the Huntington Beach Municipal Code Regarding
Finance Commission.”
Recommended Action:
23-16322.Approve the Introduction of Ordinance Nos. 4278, 4279, and 4281
Amending Chapters 2.111, 2.64 and 2.100 of the Huntington Beach
Municipal Code Regarding the Citizen Infrastructure Advisory
Board/Public Works Commission, the Community and Library
Services Commission, and Operating Policy for Boards and
Commissions respectively
A) Approve for Introduction Ordinance No. 4278, “An Ordinance of the City of Huntington
Beach Amending Chapter 2.111 to the Huntington Beach Municipal Code Regarding
Citizen Infrastructure Advisory Board/Public Works Commission”; and/or ,
Recommended Action:
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8
AGENDA February 21, 2023City Council/Public Financing
Authority
B) Approve for Introduction Ordinance No. 4279, “An Ordinance of the City of Huntington
Beach Amending Chapter 2.64.040 to the Huntington Beach Municipal Code Regarding
Community and Library Services Commission”; and/or ,
C) Approve for Introduction Ordinance No. 4281, “An Ordinance of the City of Huntington
Beach Amending Chapter 2.100 to the Huntington Beach Municipal Code Regarding
Operating Policy for Boards and Commissions.”
23-16523.Approve for Introduction Ordinance No. 4283 Adding Chapter 13.07
of the Huntington Beach Municipal Code Relating to Government
Flags on City Property
Approve for introduction Ordinance No. 4283, “An Ordinance of the City of Huntington
Beach Amending Title 13 Public Property of the Huntington Beach Municipal Code Adding
Chapter 13.07 Relating to Government Flags on City Property .”
Recommended Action:
23-17624.Approve for Introduction Ordinance No. 4284 Amending Municipal
Code 13.52 Relating to Public Conduct within City-Owned Public
Parking Structures
Staff recommends City Council approve for introduction Ordinance No. 4284, “An
Ordinance of the City of Huntington Beach Amending Huntington Beach Municipal Code
Chapter 13.52 Relating to Public Buildings” regarding public conduct within City-owned
public parking structures.
Recommended Action:
23-17725.Approve for Introduction Ordinance No. 4273 Amending Municipal
Code 13.48 Relating to the Use of Tents and Other Uses Within City
Parks
Staff recommends City Council approve the introduction of Ordinance 4273, “An
Ordinance of the City Council of the City of Huntington Beach Amending Title 13 of the
Huntington Beach Municipal Code Relating to Parking Lot and Camping Regulations in
Public Parks, and Making a Finding of Exemption Under CEQA” relating to the use of
tents and other uses within City parks .
Recommended Action:
COUNCILMEMBER ITEMS
23-17226.Submitted by Councilmember Burns - SB 9 and SB 10 Impacts to
Huntington Beach
Direct the City Attorney to take any legal action necessary to challenge SB 9 and SB 10
and the laws that permit ADU’s. Also, direct the City Manager to cease the processing of
Recommended Action:
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9
AGENDA February 21, 2023City Council/Public Financing
Authority
all applications/permits brought to the City by developers under SB 9, SB 10, or State law
related ADU projects, until the courts have adjudicated the matter(s).
23-18427.Submitted by Mayor Strickland and Mayor Pro Tem Van Der Mark -
Request to prepare a Invocation Policy
Direct the City Manager to work with the City Attorney to return to the City Council with a
Resolution for a City Council policy for the constituting of a list of religious associates or
leaders, maintaining that list, evaluation of religious associates or leaders, and rotation
system for religious leaders at City Council meetings to offer an invocation. The City
Attorney should ensure that whatever policy is returned to Council for a vote is compatible
with Constitutional principles of government involved/restricted speech and exercise of
religion. In doing so, modifications or adjustments to this proposal are welcome from the
City Attorney.
Recommended Action:
ADJOURNMENT
The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing
Authority is Tuesday, March 7, 2023, 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
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-158 MEETING DATE:2/21/2023
City’s Infrastructure Report Card
City of Huntington Beach Printed on 2/16/2023Page 1 of 1
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City of Huntington Beach
INFRASTRUCTURE REPORT CARD
City Council Study Session
February 21, 2023
1
12
WHY DO A REPORT CARD?
2
Purpose of Report Card
• To inform the public of the current conditions of
the City’s infrastructure and to deliver the
information in the concise and easily accessible
format of a school report card.
Report Cards reach policy makers and the public
with a clear message.
Report Cards are highly effective and reinforce
ASCE’s reputation as a credible expert resource
13
ASCE-Like REPORT CARD
• ASCE criteria has been applied at State and Regional agencies but needs to be
modified at the city level to meet conditions in Huntington Beach.
• ASCE Report Card lacks projection regarding the future infrastructure costs, funding
mechanisms, and funding gap. HB report will address finance.
• Study will be funded out of FY22-23 Infrastructure Funds
3
TITLE FUNCTIONS AS
What you need to know about HB’s
Infrastructure Category
Give basic facts about the infrastructure
Issues Facing HB’s Infrastructure Analyze condition, capacity, funding,
future need, O&M, safety, resilience,
innovation
HB’s Success Stories Highlight 2 projects, show what is
possible
Let’s Raise HB’s Grade Make recommendations to fix issues
Find Out More Give sources with dates and website links
14
REVIEW & ANALYZE
DATA, SURVEYS,
REPORTS
DATA
COLLECTION
PREPARE
REPORT CARD
PROPOSED
PROCESS
ASCE CONSULTANT SELECTED to
provide guidance, coordination and
feedback throughout the planning,
development, and release of any HB
Report Card to ensure success.
RELEASE REPORT ESTABLISH
COMMITTEES
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EXECUTIVE COMMITTEE
MAYOR, CITY MANAGER, PW DIRECTOR, ASCE President
5 TECHNICAL
COMMITTEES
CHAIR FOR EACH GROUP
(2-3 members)
BRIDGES NON-ROADS
PAVEMENT
ALLEYS &
PARKING LOTS
BROADBAND
&
TECHNOLOGY
PUBLIC PARKS
LANDSCAPING
COASTAL
SHORELINE
& HARBOR
ROADS &
TRANSIT
DRINKING
WATER
SEWER
FACILITIES &
CITY-OWNED &
LEASED
BUILDINGS
STORMWATER
INLAND
WATERWAYS
COASTAL
WETLANDS
ASCE
CATEGORY
ADDED HB
CITY FOCUSED
CATEGORY
PROPOSED REPORT
CARD COMMITTEE
STRUCTURE OUTREACH &
COMMUNICATIONS
COMMITTEE (PIO + 15
appointees from each CC)
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Questions?
6
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-151 MEETING DATE:2/21/2023
CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision
(d) of Section 54956.9). Name of case: Gapezzani (Gary) v. John Romero, City of Huntington
Beach; OCSC Case No.: 30-2021-01225030.
City of Huntington Beach Printed on 2/16/2023Page 1 of 1
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-161 MEETING DATE:2/21/2023
CONFERENCE WITH LABOR NEGOTIATORS (Gov. Code section 54957.6.) Agency
designated representatives: Al Zelinka, City Manager, and Peter Brown, Chief Negotiator; also
in attendance: Jose Rodriguez, Human Resources Manager; Travis Hopkins, Assistant City
Manager; Michael E. Gates, City Attorney; Eric Parra, Chief of Police; and Sunny Rief, Acting
Chief Financial Officer. Employee Organization: Police Officers’ Association (POA).
City of Huntington Beach Printed on 2/16/2023Page 1 of 1
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-170 MEETING DATE:2/21/2023
CONFERENCE WITH LEGAL COUNSEL-LITIGATION (Gov. Code section 54956.9(d)(4).):
Number of Matters: One (1).
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:22-1118 MEETING DATE:2/21/2023
Chaplain Roger Wing with the Huntington Beach Fire Department
City of Huntington Beach Printed on 2/16/2023Page 1 of 1
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-174 MEETING DATE:2/21/2023
Main Street Redevelopment Project - Additional Outreach Update
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-159 MEETING DATE:2/21/2023
Update on the Review of the City’s Membership in the Orange County Power Authority (OCPA)
Joint Power Authority
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Consideration of Huntington Beach’s
Participation in the Orange County
Power Authority (OCPA)
City Council Meeting
February 21, 2023
24
•Dec. 2020 -City approved documents to join OCPA
•Feb. 2021 -City approved Founding Member participation in OCPA
•Dec. 2021 -County of Orange (unincorporated areas) was added as 5th
member agency
•Apr. 2022 -OCPA launches municipal and commercial service to Huntington
Beach, Buena Park, Fullerton, and Irvine
•Oct. 2022 -OCPA launches residential service to Huntington Beach, Buena
Park, Fullerton, and Irvine
Timeline
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•Dec. 2022 -Huntington Beach City Council requested to change the default rate to
Basic Choice for new and municipal customers. City Council also requested a
return to a study session with the cost options and path to withdraw membership
from OCPA
•Jan. 2023 -Huntington Beach City Council approved changing the default rate for
new Huntington Beach OCPA customer and all municipal accounts to the OCPA
Basic Choice rate.
•Feb. 2023 –Update City Council on the discussion had regarding the process and
impacts of the City withdrawing from OCPA.
Timeline
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OCPA Member Agency Actions
•OCPA JPA includes four founding member agencies: Cities of Huntington Beach,
Buena Park, Fullerton, and Irvine with the County of Orange joining after the
original JPA formation.
•The County of Orange
•In August 2022, Orange County initiated a review of OCPA’s operations and the effectiveness
of their internal controls, policies, procedures, and of any costs incurred by OCPA on behalf of
Orange County.
•In December 2022, the OC Board of Supervisors sent notice to withdraw from OCPA.
•The City of Irvine
•The City of Irvine held at least three City Council meetings between December and February to
consider withdrawing from OCPA. The discussion has been continued to a future meeting
date.
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Huntington Beach Update
•The City Manager’s Office has engaged with OCPA to obtain information on the
cost and process of withdrawing membership.
•OCPA members have the right to withdraw by providing a notice no less that 180
days. The official withdrawal date will become effective at the beginning of
OCPA’s fiscal year -after the notice period.
•By withdrawing, the City will be subject to continuing OCPA liabilities including:
•Costs arising from the resale of capacity, electricity, or any power load attributed to the City.
•Any costs incurred by the Authority which is a result directly related to the withdrawing party,
which may include both short term costs and potential future cost impacts
•Staff is continuing to meet with OCPA to identify the power purchases attributable
to Huntington Beach.
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Consideration of Huntington Beach’s
Participation in the Orange County
Power Authority (OCPA)
City Council Meeting
February 21, 2023
29
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-166 MEETING DATE:2/21/2023
Presentation on the Safe and Sane Fireworks Stand Application and Lottery Process for 2023
City of Huntington Beach Printed on 2/16/2023Page 1 of 1
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2023 Safe and Sane
Fireworks Stand
Application and Lottery Process
February 21, 2023
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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
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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 18 City Council meeting
33
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
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HIGH SCHOOL (Private)
A private high school may submit
an application for the fifth high
school permit
If no private high school applies,
the four public high schools will be
entered into the lottery drawing
for the fifth high school permit
35
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 18 City Council meeting
36
APPLICATION PROCESS
Prior to March 1, applicants
successful in the 2022 application
process will be notified by email of
the 2023 process; and,
A public announcement regarding
the 2023 application process will be
posted to local social media sites
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APPLICATION PROCESS
At the conclusion of the lottery drawing held on
April 18, 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 – 2023
http://www.huntingtonbeachca.gov/fireworks/
HB Municipal Code Chapter 5.90 – Fireworks
38
Questions?
39
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-146 MEETING DATE:2/21/2023
REQUEST FOR CITY 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/Public Financing Authority regular meeting and the Housing Authority special
meeting minutes of February 7, 2023, require review and approval.
Financial Impact: None.
Recommended Action:
Approve and adopt the City Council/Public Financing Authority regular meeting and the Housing
Authority special meeting minutes of February 7, 2023.
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. February 7, 2023 CC/PFA regular meeting / Housing Authority special meeting minutes
City of Huntington Beach Printed on 2/16/2023Page 1 of 1
powered by Legistar™40
Minutes
City Council/Public Financing Authority Regular,
and Special Meetings of the Housing Authority
City of Huntington Beach
Tuesday, February 7, 2023
3:30 PM – Council Chambers
6:00 PM – Council Chambers
Civic Center, 2000 Main Street
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/
3:30 PM — COUNCIL CHAMBERS
CALLED TO ORDER — 3:34 PM
ROLL CALL
Present: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
Absent: None
CITY COUNCILMEMBER COMMENTS (3-Minute Time Limit)
Councilmember Moser reported facts related to the recent stabbing incident at a local establishment.
ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS FOR CLOSED SESSION ITEMS
(Received After Agenda Distribution)
Pursuant to the Brown "Open Meetings" Act, City Clerk Robin Estanislau announced supplemental
communications that were received by her office following distribution of the Council Agenda packet:
Closed Session Announcements
#1 (23-107 Memorandum received from Robin Estanislau, City Clerk, regarding correction to Mayor’s
closed session announcement
PUBLIC COMMENTS — None
RECESSED TO CLOSED SESSION — 3:39 PM
A motion was made by Kalmick, second Burns to recess to Closed Session.
CLOSED SESSION ANNOUNCEMENT(S)
1. 23-107 Mayor Strickland announced: Pursuant to Government Code § 54957.6, the City
Council takes this opportunity to publicly introduce and identify designated labor
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and Housing Authority Special Meetings
February 7, 2023, Page 2 of 20
negotiators, Al Zelinka, City Manager and Peter Brown Chief Negotiator; also in
attendance: Jose Rodriguez, Human Resources Manager, Travis Hopkins, Assistant
City Manager; Michael E. Gates, City Attorney; Eric Parra, Chief of Police; and
Sunny Rief, Assistant Chief Financial Officer, who will be participating in today’s
Closed Session discussions regarding labor negotiations with: Huntington Beach
Police Officers’ Association (HBPOA).
CLOSED SESSION
2. 23-089 CONFERENCE WITH LABOR NEGOTIATORS (Gov. Code section 54957.6.) Agency
designated representatives: Al Zelinka, City Manager, and Peter Brown, Chief
Negotiator; also in attendance: Jose Rodriguez, Human Resources Manager; Travis
Hopkins, Assistant City Manager; Michael E. Gates, City Attorney; Eric Parra, Chief
of Police; and Sunny Rief, Assistant Chief Financial Officer. Employee
Organization: Police Officers’ Association (POA).
3. 23-090 CONFERENCE WITH LEGAL COUNSEL-LITIGATION (Gov. Code section
54956.9(d)(4).): Number of matters: One (1) - Confer with City Attorney regarding a
request by the City of Costa Mesa to provide Amicus support with regard to 9th
Circuit Court of Appeals Decision re Sober Living Homes.
4. 23-101 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of
subdivision (d) of Section 54956.9). Name of case: Pacific Airshow, LLC v. City of
Huntington Beach and Kim Carr; OCSC Case No. 30-2022-01287749.
5. 23-105 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of
subdivision (d) of Section 54956.9). Name of case: Vega (Ruben) v. City of
Huntington Beach, et al.; OCSC Case No.: 30-2021-01184181.
6:00 PM —- COUNCIL CHAMBERS
RECONVENED CITY COUNCIL/PUBLIC FINANCING AUTHORITY REGULAR MEETING AND
SPECIAL MEETING OF THE HOUSING AUTHORITY — 6:02 PM
ROLL CALL
Present: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
Absent: None
PLEDGE OF ALLEGIANCE — Led by Councilmember Moser
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.
6. 22-1117 Mike Michaud of Dance4Joy Ministries and member of the Greater Huntington
Beach Interfaith Council
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and Housing Authority Special Meetings
February 7, 2023, Page 3 of 20
Mayor Strickland asked for a moment of silence in memory of Alyssa "Aly" West, a Huntington Beach
High School student who tragically passed away this last week.
CLOSED SESSION REPORT BY CITY ATTORNEY — None
Mayor Strickland announced that Agenda Items #15, #28, #29 and #31 were removed for consideration
at this meeting.
ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution)
Pursuant to the Brown "Open Meetings" Act, City Clerk Robin Estanislau announced supplemental
communications that were received by her office following distribution of the Council Agenda packet:
Consent Calendar
#11 (23-076) Thirteen (13) emails received regarding Ordinance No. 4276 amending Chapter 2.07 of
the HBMC relating to Campaign Reform.
#12 (23-077) Eleven (11) emails received regarding Ordinance No. 4277 amending Chapter 1.18 of the
HBMC relating to anonymous complaints.
Administrative Items
#25 (23-097) Memorandum to City Council submitted by Chris Slama, Director of Community & Library
Services regarding corrections to the RDG Planning & Design, Inc. Amendment.
Ordinances for Introduction
#27 (23-066) Memorandum received from Robin Estanislau, City Clerk regarding correction to
Ordinance No. 4274 for introduction.
Councilmember Items
#30 (23-109) Letter from Peter S. Levi, Regional Director of the Anti-Defamation League (ADL) received
regarding the request to prepare an Ordinance limiting flag displays at City facilities.
Letter from Stephanie Camacho-Van Dyke, Director of Advocacy and Education at The
LGBTQ Center OC received regarding the request to prepare an Ordinance limiting flag
displays at City facilities.
Two hundred seventy-five (275) email communications received regarding the request to
prepare an Ordinance limiting flag displays at City facilities.
#31 (23-118) Seven (7) email communications received regarding SB9 and SB10 impacts on
Huntington Beach. This item had been pulled from consideration.
#32 (23-119) Twenty-eight (28) email communications received regarding the request to reinstate
remote citizen participation at public meetings.
#33 (23-120) Two (2) email communications received regarding the request to review group home
regulations in the City.
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Council/Public Finance Regular
and Housing Authority Special Meetings
February 7, 2023, Page 4 of 20
#34 (23-123) Two (2) email communications received regarding the request to commence a
Development Impact Fund (DIF) Study.
PUBLIC COMMENTS (3-Minute Time Limit) — 57 In-Person Speakers
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.
Suzan Neil, a resident of Huntington Beach, was called to speak and stated her support for
Councilmember Items #32 regarding request to reinstate remote citizen participation in public meetings.
Ms. Neil also stated her opposition to Consent Calendar Item #12 regarding Ordinance No. 4277 related
to no longer allowing anonymous business complaints for code violations. (00:12:44)
Kelly Jones, representing Senator Dave Min, was called to speak and read a statement in opposition to
Councilmember Items #30 regarding flag displays at City facilities. (00:15:13)
Robin Estanislau, Huntington Beach City Clerk, was called to speak and shared her support for
Councilmember Items #32 regarding request to reinstate remote citizen participation in public meetings.
(00:16:28)
Andrew Einhorn, a long-term resident of Huntington Beach, was called to speak and shared his opinions
related to hateful comments and prejudiced actions. (00:17:51)
Joclyn Rabbitt-Sire, a 23-year resident of Huntington Beach, was called to speak and stated her
opposition to Consent Calendar Item #11 regarding campaign reform; opposition to Councilmember
Items #30 regarding flag displays at City facilities; support for Councilmember Items #32 regarding
request to reinstate remote citizen participation in public meetings; and opposition for any efforts to
eliminate the City's partnership with the Orange County Power Authority (OCPA). (00:20:13)
Margaret Robinson, a resident of Huntington Beach, was called to speak and stated her support for
Councilmember Items #32 regarding request to reinstate remote citizen participation in public meetings,
and her opposition to Councilmember Items #30 regarding flag displays at City facilities. (00:21:58)
Stephanie Camacho-Van Dyke, Director of Advocacy and Education, LGBTQ Center OC, was called to
speak and stated opposition to Councilmember Items #30 regarding flag displays at City facilities.
(00:24:07)
Dollie Bootler, Program Assistant, LGBTQ Center OC, was called to speak and stated opposition to
Councilmember Items #30 regarding flag displays at City facilities. (00:26:15)
Avery Counts, a life-long resident of Huntington Beach, was called to speak and stated opposition to
Councilmember Items #30 regarding flag displays at City facilities. (00:27:04)
Armen Bagdasarian was called to speak and shared his support for keeping Main Street closed to
vehicular traffic and open for outside dining with better regulation. (00:28:35)
Stephen Quinn, a long-time resident of Huntington Beach, was called to speak and stated his support for
Councilmember Items #30 regarding flag displays at City facilities. (00:31:52)
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and Housing Authority Special Meetings
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Shirley Dettloff, a resident of Huntington Beach since 1964, former Mayor and Councilmember who
participated in writing the Human Dignity Statement, was called to speak and stated her opposition to
Councilmember Items #30 regarding flag displays at City facilities. (00:33:04)
Connie Boardman, a former Mayor and Huntington Beach Councilmember, was called to speak and
stated her opposition to Councilmember Items #30 regarding flag displays at City Facilities. (00:36:32)
Arthur Estrada was called to speak and stated his support for Councilmember Items #32 regarding
request to reinstate remote citizen participation in public meetings. (00:39:52)
Karen Jackle, HB Reads One Book Director, was called to speak and announced the book for this year is
Still Sideways, by Devon Raney, who will be in Huntington Beach on March 9 for a free Evening With the
Author and book-signing event, 6:00 PM at Huntington Beach Main Library. The HB Reads fundraiser
will also be at the Huntington Beach Main Library from 4 – 6 PM on March 9. (00:41:15)
Alene Tober Capeci, a resident of Huntington Beach, was called to speak and stated opposition to
Councilmember Items #30 regarding flag displays at City facilities. (00:43:05)
Cathey Ryder, a resident of Huntington Beach since 1985, was called to speak and stated her opposition
to Consent Calendar Item #12 regarding Ordinance No. 4277 related to no longer allowing anonymous
business complaints for code violations. She further stated her support for Councilmember Items #32
regarding request to reinstate remote citizen participation at public meetings. (00:44:43)
Alex Mohajer, Stonewall Democratic Club President, was called to speak and stated his personal
opposition to Councilmember Items #30 regarding flag displays at City facilities. (00:47:13)
Kathy Carrick was called to speak and shared her support for the newly elected Councilmembers, and
stated her support for Councilmember Items #30 regarding flag displays at City facilities. (00:50:30)
Steven Martin, who grew up in Huntington Beach, was called to speak and stated his opposition to
Councilmember Items #30 regarding flag displays at City facilities. (00:52:43)
Zekiah Wright, West Hollywood Commissioner, was called to speak and stated opposition to
Councilmember Items #30 regarding flag displays at City facilities. (00:56:01)
Ben Faiella, a mobile home resident of Huntington Beach for 18 years, was called to speak, shared his
personal experience with rental increases, and asked that Councilmembers support efforts for a Mobile
Home Rent Stabilization Ordinance to protect the City's senior residents. Councilmember Kalmick asked
him to complete a blue card for staff follow-up. (00:59:45)
Kathleen Johnson, a resident of Huntington Beach, was called to speak and stated her opposition to
Councilmember Items #30 regarding flag displays at City facilities. Ms. Johnson also shared her
unsatisfying personal experience recently, related to trying to assist a young disoriented homeless
individual. Councilmember Moser asked her to complete a blue card for staff follow-up. (01:03:12)
Unnamed Guest was called to speak and stated his opposition to Councilmember Items #30 regarding
flag displays at City facilities, and support for Councilmember Items #32 regarding request to reinstate
remote citizen participation in public meetings. (01:06:35)
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Jeanne Farrens was called to speak and stated her opposition to Consent Calendar Item #11 regarding
adopting Ordinance No. 4276 relating to campaign reform. (01:08:10)
Braunwyn Windham Burke, a former resident of Huntington Beach for 45 years and Grand Marshall for
OC Pride this year, was called to speak and stated her opposition to Councilmember Items #30
regarding flag displays at City facilities. (01:10:13)
Lena Osborne was called to speak and stated her opposition to Councilmember Items #30 regarding flag
displays at City facilities. (01:11:57)
Rich Bowman, a 20-year resident of Huntington Beach, was called to speak and stated his support for
Councilmember Items #32 regarding request to reinstate remote citizen participation at public meetings.
(01:13:46)
Ashley Williamson, a resident of Huntington Beach, was called to speak and stated her opposition to
Councilmember Items #30 regarding flag displays at City facilities. (01:16:39)
Unnamed Guest was called to speak and stated her support for Councilmember Items #32 regarding
request to reinstate remote citizen participation at public meetings. She also stated her opposition to
Councilmember Items #30 regarding flag displays at City facilities. (01:20:03)
Rev. Judy Tomlinson, a resident of Huntington Beach, was called to speak and stated her opposition to
Councilmember Items #30 regarding flag displays at City facilities. (01:23:10)
Maureen was called to speak and stated her opposition to Consent Calendar Item #12 regarding
adoption of Ordinance No. 4277 relating to anonymous complaints. (01:24:51)
Roger Noor was called to speak and shared his unsatisfactory experience with the Huntington Beach
Police Department regarding his vehicle. (01:28:08)
Pat Goodman, a resident of Huntington Beach, was called to speak and shared her opinions regarding
financial considerations and housing responsibilities as discussed at the January 17, 2023, Council
meeting regarding City resources used to address homelessness and plan to enforce City and State laws
relating to homelessness. (01:32:24)
Mary Jo Baretich, a 40-year resident of Huntington Beach and Mobile Home Advisory Board Member,
was called to speak and shared her opinions on Consent Calendar Item #11 regarding adoption of
Ordinance No. 4276 relating to campaign reform. (01:35:39)
Bobbi King was called to speak and stated her support for Councilmember Item #32 regarding the
request to reinstate remote citizen participation at public meetings. (01:38:20)
Allie Plum, a mobile home resident of Huntington Beach, was called to speak and shared her support for
a comprehensive mobile home market study as recommended by the Mobile Home Advisory Board at
their January 23, 2023 meeting. Ms. Plum stated her opposition to Councilmember Items #30 regarding
flag displays at City facilities, and support for Councilmember Items #32 regarding the request to
reinstate remote citizen participation at public meetings. (01:40:04)
Doug Von Dollen was called to speak and stated his opposition to Consent Calendar Item #11 regarding
adoption of Ordinance No. 4276 relating to campaign reform. (01:42:53)
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and Housing Authority Special Meetings
February 7, 2023, Page 7 of 20
Kathryn Goddard, a resident of Huntington Beach since the 1980s, was called to speak and stated her
opposition to Consent Calendar Item #11 regarding adoption of Ordinance No. 4276 relating to campaign
reform. (01:45:48)
Cat Navetta, a resident of Huntington Beach, was called to speak and stated her opposition to
Councilmember Items #30 regarding flag displays at City facilities. (01:47:37)
Rylee Emch, a resident of Orange County, was called to speak and shared his opinions regarding the
generally unfair treatment of LGBTQ community members. (01:50:12)
WynDee Swartz, a resident of Huntington Beach, was called to speak and shared her safety concerns
related to the Glen Mar tract frontage fence, especially at Adams Avenue and Bushard Street. She
thanked Public Works Director Sean Crumby for his support, and asked that the new Councilmembers
support his plans for the project to restore the Glen Mar frontage fence. (01:52:52)
Dr. Richard Harrison, a 25-year resident of Huntington Beach and Community and Library Services
Commissioner, was called to speak and stated his opposition to Councilmember Items #30 regarding flag
displays at City facilities. (01:55:56)
Dave Sullivan, Former Mayor and Huntington Beach Councilmember, was called to speak and stated his
support for Councilmember Items #30 regarding flag displays at City facilities. (02:00:04)
Ken Inouye, a 50-year resident of Huntington Beach, was called to speak and stated his opposition for
Councilmember Items #30 regarding flag displays at City facilities. (02:03:13)
JoDee Preston, a resident of Huntington Beach since 1981, was called to speak and stated her support
for Councilmember Items #30 regarding flag displays at City facilities. (02:04:19)
Sean Drexler, a resident of Orange County, was called to speak and stated his opposition to
Councilmember Items #30 regarding flag displays at City facilities. Mr. Drexler also stated his support for
Councilmember Items #32 regarding the request to reinstate remote citizen participation at public
meetings, and asked that Consent Calendar Item #11 regarding adoption of Ordinance No. 4276 be
withdrawn for further consideration. (02:07:20)
Laura Sire, a long-time resident of Huntington Beach, was called to speak and stated her opposition to
Councilmember Items #30 regarding flag displays at City facilities. (02:10:04)
Mike B, a resident of Huntington Beach for 30 years, was called to speak and shared his opinions on the
LGBQT+ student community based upon his experience as a school counselor and teacher. (02:13:25)
Nathan Schneekloth Renè who grew up in Huntington Beach, was called to speak and stated opposition
to Councilmember Items #30 regarding flag displays at City facilities. (02:16:43)
Jackie Steele, Stonewall Democratic Club Chair, City of North Hollywood Public Safety Commissioner,
and Former Chair of the North Hollywood LGBTQ Advisory Board, was called to speak and stated
opposition to Councilmember Items #30 regarding flag displays at City facilities, and support for
Councilmember Items #32 regarding the request to reinstate remote citizen participation at public
meetings. (02:19:10)
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Unnamed Guest was called to speak and stated her support for Councilmember Items #30 regarding flag
displays at City facilities. (02:22:24)
Eva Ayla Rains, a resident of Huntington Beach, was called to speak and stated her opposition to
Councilmember Items #30 regarding flag displays at City facilities. (02:25:59)
J R Owens was called to speak and stated his opposition to Consent Calendar Item #12 regarding
adoption of Ordinance #12 relating to anonymous complaints, and noted his questions regarding
Consent Calendar Item #16 relating to how Waymakers, the City's Victim and Witness Assistance
Services provider, will benefit through approval of the Violence Against Women Act Grant. Mr. Owens
also stated his opposition to Councilmember Items #30 regarding flag displays at City facilities.
(02:27:49)
Jignesh Padhiar was called to speak and asked if Huntington Beach has a policy for dealing with
homeless individuals who come from other communities. Mr. Padhair stated his support for
Councilmember Items #30 regarding flag displays at City facilities. (02:31:13)
S J, a resident of Irvine, was called to speak and stated opposition to Councilmember Items #30
regarding flag displays at City facilities. S J also stated support for Councilmember Items #32 regarding
the request to reinstate remote citizen participation at public meetings. (02:34:05)
John Briscoe was called to speak and called attention to certain comments made by Mayor Pro Tem Van
Der Mark on social media. (02:36:18)
COUNCIL COMMITTEE APPOINTMENT ANNOUNCEMENTS — None
AB 1234 REPORTING
Mayor Strickland, Mayor Pro Tem Van Der Mark, Councilmembers Burns and McKeon each reported
attending the League of California Cities Academy for New Mayors and Councilmembers.
OPENNESS IN NEGOTIATION DISCLOSURES
Councilmember Kalmick reported meeting with the Huntington Beach Police Officers' Association
(HBPOA).
CITY MANAGER’S REPORT
7. 22-696 Welcomed New OneHB Team Members
City Manager Al Zelinka announced that in the month of January seven new OneHB members joined the
City team.
CITY TREASURER’S REPORT
8. 23-036 Presentation of the Investment Advisory Board Annual Report by City Treasurer
Due to lack of a quorum, the special meeting of the Investment Advisory Board was not held, and roll call
was not taken.
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and Housing Authority Special Meetings
February 7, 2023, Page 9 of 20
City Treasurer Alicia Backstrom presented a PowerPoint communication entitled Investment Advisory
Board 2022 Annual Report, Huntington Beach City Council with slides titled: City of Huntington Beach
Investment Advisory Board; 2022 Investment Advisory Board Members; 2022 Annual Report; and
Investment Advisory Board.
A motion was made by McKeon, second Burns to receive and file the Investment Advisory Board's
Annual Report.
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, and Burns
NOES: None
OUT OF ROOM: Bolton
9. 23-111 Received and Filed the City Treasurer’s December 2022 Quarterly Investment
Summary Report
City Treasurer Alisa Backstrom presented a PowerPoint communication entitled Quarterly Investment
Report Quarter Ended: December 30, 2022 with slides titled: Investment Portfolio - Summary at
12/31/22, Investment Portfolio - Investments By Type at 12/31/22, Investment Portfolio - Selected Activity
Quarter End 12/31/22, Investment Portfolio Earnings Month/Quarter End 12/31/22, Interest Rates - US
Constant Maturity Treasury Rates 1/1/2022 - 12/30/22; Selected Investment Policy Compliance
Requirements at 12/31/22; and Summary.
A motion was made by Strickland, second Kalmick to receive and file the City Treasurer's Quarterly
Investment Report for December 2022, pursuant to Section 17.0 of the Investment Policy of the City of
Huntington Beach.
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
CITY CLERK’S REPORT
10. 23-108 City Archivist Kathie Schey announced receipt of a digitization grant award from
California Revealed, an initiative of the California State Library System
Kathie Schey, City Archivist, presented a PowerPoint communication entitled California Revealed! with
slides titled: No Cost to City, Thousands of $ in Value; and Outreach — Thousands of Viewers
Worldwide. Archivist Schey closed her presentation with a 1-minute composite video clip of the last day
of the old Huntington Beach Pier to demonstrate the history that is being preserved through grant funds.
CONSENT CALENDAR
Councilmember Kalmick pulled items #11, and #12; Councilmember Moser pulled item #13 for further
discussion.
Office of City Attorney
49
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and Housing Authority Special Meetings
February 7, 2023, Page 10 of 20
11. 23-076 Adopted Ordinance No. 4276 Amending Chapter 2.07 of the HBMC Relating to
Campaign Reform
Approved for Introduction January 17, 2023;
Vote: 4-3 (Kalmick, Moser, Bolton - No)
A motion was made by Kalmick to Adopt TABLE Ordinance No. 4276,"An Ordinance of the City of
Huntington Beach Amending Chapter 2.07 of the Huntington Beach Municipal Code Relating to
Campaign Reform" for further analysis and consideration. The motion received no second.
A substitute motion was made by Strickland, second Burns to adopt Ordinance No. 4276,"An Ordinance
of the City of Huntington Beach Amending Chapter 2.07 of the Huntington Beach Municipal Code
Relating to Campaign Reform."
The motion carried by the following roll call vote:
AYES: Van Der Mark, Strickland, McKeon, and Burns
NOES: Kalmick, Moser, and Bolton
12. 23-077 Adopted Ordinance No. 4277 Amending Chapter 1.18 of the Huntington Beach
Municipal Code Relating to Anonymous Complaints
Approved for Introduction January 17, 2023;
Vote: 4-3 (Kalmick, Moser, Bolton - No)
Councilmember Kalmick pulled this item to amend the "exemption" section (end of first paragraph)
"businesses operating not in compliance with the Huntington Beach Zoning Code, or land use controls,
are exempt from anonymous reporting to Code Enforcement." Councilmember Kalmick stated his effort
is to allow anonymous complaints for businesses operating illegally to address potential safety concerns,
especially since "business" is not defined within the Municipal Code. He further stated this amendment
would most likely require the item be returned at the next meeting for another reading and final approval.
City Attorney Michael Gates clarified that complaints regarding State law violations, such as ABC
violations or felony or criminal issues, can be reported to Code Enforcement anonymously.
Mayor Strickland stated he supports Councilmember Kalmick's concern regarding a definition for
"business" in the Municipal Code.
A motion was made by Strickland, second Burns to adopt Ordinance No. 4277, "An Ordinance of the City
of Huntington Beach Amending Chapter 1.18 of the Huntington Beach Municipal Code Relating to
Anonymous Complaints."
The motion carried by the following roll call vote:
AYES: Van Der Mark, Strickland, McKeon, and Burns
NOES: Kalmick, Moser, and Bolton
Office of City Clerk
13. 23-078 Approved and Adopted Amended Minutes
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and Housing Authority Special Meetings
February 7, 2023, Page 11 of 20
Councilmember Moser stated her proposed change for the January 17, 2023 City Council/Public
Financing Authority regular meeting minutes, page 14, paragraph 4, line 2. She requested the second
line to read, ". . . and stated Huntington Beach has spent approximately $20M for 162 housed people."
A motion was made by Moser, second Strickland to approve and adopt the City Council/Public Financing
Authority regular meeting and the Successor Agency special meeting minutes of January 17, 2023, as
amended.
The motion as amended carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
Office of City Manager
14. 23-115 Adopted Resolution No. 2023- 07 appointing Theresa St. Peter as Interim Director of
Human Resources and approving the Employment Agreement
A motion was made by Kalmick, second McKeon to adopt Resolution No. 2023-07, " A Resolution of the
City Council of the City of Huntington Beach Appointing Theresa St. Peter as Interim Director of Human
Resources"; and, approve and authorize the City Manager to execute the "Employment Agreement
between the City of Huntington Beach and Theresa St. Peter."
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
Community Development Department
15. 23-014 Bonanni Development Company IV, LLC Affordable Housing Agreement for the
development of 35 ownership units at 19070 Holly Lane
Item Withdrawn by Developer
Police Department
16. 23-074 Approved and accepted the California Office of Emergency Services (Cal OES)
Violence Against Women Act Grant (LE22066860); authorized the Chief of Police to
execute documents; approved appropriations; amended the Professional Services
Listing to include provided domestic violence services; and contract Amendment
No. 2 with Waymakers, in the amount of $116,032, for continued management of the
Victim and Witness Assistance Services Program
A motion was made by Kalmick, second Burns to accept the grant between the State of California,
Governor's Office of Emergency Services (Cal OES) and the City of Huntington Beach; and, assign
authority to the Chief of Police as the official to execute and sign for the award and to approve
amendments and extensions; and, approve the appropriation and expenditure of $203,143, which is fully
reimbursed by the grant from Cal OES. The remaining $67,715 will be funded from existing
appropriations in the Police Department's budget; and, amend the Professional Services Listing to
include provided domestic violence services; and, approve and authorize "Amendment No. 2" to
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Agreement Between the City of Huntington Beach and Waymakers for Victim and Witness Assistance
Services.
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
Public Works Department
17. 22-925 Approved Sole Source Procurement Request with Hadronex Inc., dba SmartCover
Systems, for Sanitary Sewer System Manhole SmartCovers
A motion was made by Kalmick, second Burns to approve Sole Source Procurement Request with
Hadronex Inc., dba SmartCover Systems, for the servicing of SmartCovers.
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
18. 22-926 Approved Sole Source Procurement Request for Aclara for service and
maintenance on Automated Meter Infrastructure (AMI) equipment.
A motion was made by Kalmick, second Burns to approve the Sole Source Procurement Request with
Aclara for service and maintenance on AMI equipment.
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
19. 22-1126 Approved and authorized execution of a three-year Professional Services
Agreement with Sierra Analytical Labs Inc. for Water Quality Analysis and Sampling
Services in the amount of $360,000
A motion was made by Kalmick, second Burns to approve and authorize the Mayor and City Clerk to
execute the "Professional Services Contract between the City of Huntington Beach and Sierra Analytical
Labs, Inc. for Water Quality Analysis and Sampling Services."
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
20. 23-048 Accepted bid and authorized execution of a construction contract with MBC
Enterprises, Inc. in the amount $482,897.59 for the Glen Mar Frontage Road
Improvements Project, CC-1688
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A motion was made by Kalmick, second Burns to accept the lowest responsive and responsible bid
submitted by MBC Enterprises, Inc. in the amount of $438,997.81; and, authorize the Mayor and City
Clerk to execute a construction contract in the form approved by the City Attorney.
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
21. 23-061 Approved Grant of Easement to Southern California Gas Company for new gas
utility line extension at 6900 Brunswick Drive, a location known as North Greer Park
Parcel
A motion was made by Kalmick, second Burns to approve and authorize the Mayor and City Clerk to
execute the Grant of Easement between the City of Huntington Beach and Southern California Gas
Company; and, authorize the City Clerk to record the Grant of Easement with the Orange County
Recorder.
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
22. 23-088 Approved and authorized execution of four (4) Professional Services Contracts for
On-Call Construction Management and Engineering Services with Ardurra Group,
Inc., Berg & Associates, Inc., Dudek, and Psomas
A motion was made by Kalmick, second Burns to approve and authorize the Mayor and City Clerk to
execute a $1,400,000 "Professional Services Contract Between the City of Huntington Beach and
Ardurra Group, Inc. for On-Call Construction Management and Engineering Services;" and, approve and
authorize the Mayor and City Clerk to execute a $1,400,000 "Professional Services Contract Between
the City of Huntington Beach and Berg & Associates, Inc. for On-Call Construction Management and
Engineering Services;" and, approve and authorize the Mayor and City Clerk to execute a $1,400,000
"Professional Services Contract Between the City of Huntington Beach and Dudek for On-Call
Construction Management and Engineering Services;" and, approve and authorize the Mayor and City
Clerk to execute a $1,400,000 "Professional Services Contract Between the City of Huntington Beach
and Psomas for On-Call Construction Management and Engineering Services."
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
23. 23-095 Approved and authorized execution of three (3) Professional Services Contracts for
On-Call Materials Testing and Engineering Services with AESCO, Inc., Leighton
Consulting, Inc., and Ninyo & Moore Geotechnical & Environmental Sciences
Consultants
A motion was made by Kalmick, second Burns to approve and authorize the Mayor and City Clerk to
execute a $600,000 "Professional Services Contract Between the City of Huntington Beach and AESCO,
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Inc. for On-Call Materials Testing and Engineering Services;" and, approve and authorize the Mayor and
City Clerk to execute a $600,000 "Professional Services Contract Between the City of Huntington Beach
and Leighton Consulting, Inc. for On-Call Materials Testing and Engineering Services;" and, approve and
authorize the Mayor and City Clerk to execute a $600,000 "Professional Services Contract Between the
City of Huntington Beach and Ninyo & Moore Geotechnical & Environmental Sciences Consultants for
On-Call Materials Testing and Engineering Services."
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
PUBLIC HEARING
24. 23-027 Public Hearing held and adopted Resolution No. 2023-02 to approve Zoning Text
Amendment (ZTA) No. 22-004 regarding Medical Services in the Beach and Edinger
Corridors Specific Plan (BECSP)
Senior Planner Hayden Beckman presented a PowerPoint communication entitled BECSP Medical
Services Use Restriction Zoning Text Amendment No. 22-004 with slides titled: Request; Neighborhood
Center Segment (2); Analysis; Recommendation; and Questions?
Director of Community Development Ursula Luna-Reynosa noted that this retail site has been in
existence for about five years and has had a high vacancy rate in spite of being located at one of the
highest travelled intersections in Huntington Beach. Director Luna-Reynosa stated the applicants are a
local couple interested in opening a pediatric dentistry and orthodontic office.
No ex parte communications were disclosed.
Mayor Strickland opened the Public Hearing.
City Clerk Robin Estanislau stated there were no Public Speakers for this item.
Mayor Strickland closed the Public Hearing.
A motion was made by McKeon, second Strickland to find that Zoning Text Amendment No. 22-004 is
within the scope of the BECSP Program Environmental Impact Report No. 08-008 certified by the
Planning Commission on December 8, 2009. In accordance with CEQA Guidelines Sections 15162 and
15163, no subsequent or supplement to the EIR need be prepared for this ZTA and no further
environmental review or documentation is required (Attachment No. 1); and, approve Zoning Text
Amendment No. 22-004 with findings (Attachment No. 1) and adopt Resolution No. 2023-02, "A
Resolution of the City Council of the City of Huntington Beach Approving an Amendment to the Beach
and Edinger Corridors Specific Plan (SP14) (Zoning Text Amendment No. 22-004)" (Attachment No. 2).
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
ADMINISTRATIVE ITEMS
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25. 23-097 Approved and authorized Amendment No. 1 to the Professional Services Contract
with RDG Planning & Design Art Studio for the Design, Fabrication and Installation
of the Public Art Work to include a phased acceptance of liability, to increase the
contract compensation by $35,000, and to appropriate $35,000 from the Public Arts
in Parks Fund 236
Chris Slama, Director of Community & Library Services presented a PowerPoint communication entitled
Huntington Central Park Public Art Contract Amendment with slides titled: Project Timeline (3); Location;
"To See Yourself in Nature" Daytime View; "To See Yourself in Nature" Evening View; Contract
Amendment; Funding; Recommended Action; and Questions?
Councilmember McKeon expressed his frustration with this budget overrun and stated he would like to
see better systems and procedures established so this doesn't happen again. He noted that usually
Americans with Disabilities Act (ADA) considerations are addressed up front with projects.
Councilmember Moser confirmed with Director Slama that only asphalt can be used for this project, and
that once the project is completed the City has full liability responsibility.
A motion was made by Moser, second Kalmick to approve and authorize the Mayor and City Clerk to
execute "Amendment No. 1 to Agreement between the City of Huntington Beach and RDG Art Studio for
the Design, Fabrication and Installation of a Public Art Work for Central Park" to approve a phased
acceptance of liability of the structures during the installation process and to increase the contract
compensation by a not-to-exceed amount of $35,000; and, authorize the appropriation of $35,000 from
the Public Art in Parks Fund 236 to account 23645001.82900, as amended by Supplemental
Communication (corrections to Amendment No. 1 to Agreement with the RDG Planning & Design
Art Studio).
The motion as amended carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, McKeon, and Bolton
NOES: None
ABSTAIN: Strickland, and Burns
26. 23-050 Report received and filed on crime statistics involving Huntington Beach
businesses and recommendations to enhance efforts to address and reduce
business-related crimes
Police Chief Parra introduced Police Captain Oscar Garcia who presented a PowerPoint communication
entitled H Item Crime Statistics and Enforcement with slides titled: Shoplifting 2022 Data; Robberies
2022 Data (2); Vandalism 2022 Data; and Enforcement (3).
Councilmember Bolton confirmed with Captain Garcia that metrics would be set up to document the
effectiveness of additional equipment. Captain Garcia noted that additional cameras are expected to
reduce the number of unknown suspects, i.e., suspects who are gone by the time Officers arrive at the
scene.
Councilmember Moser noted there was no context analysis, or year-by-year comparisons in this report,
and requested the item be tabled to allow for presentation of more complete analysis.
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Councilmember Kalmick stated his support for more cameras, as well as approving staff overtime, to
assist in solving more crimes. He also stated his expectation that future reports will contain comparison
analysis to document whether or not these measures are effective.
A motion was made by Burns, second Van Der Mark to receive and file this report; and approve the
proposed enforcement plan for Fiscal Year 2022/23 for additional overtime for proactive patrols and
funding for five (5) public safety cameras, including appropriation from the General Fund to the Police
Department's FY 2022-2023 Personnel and Operating Budget.
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
ORDINANCES FOR INTRODUCTION
27. 23-066 Approved for Introduction Ordinance No. 4275 to Amend to Huntington Beach
Municipal Code Chapter 13.08.070 Relating to Dogs and Other Animals
Police Chief Parra introduced this item by noting that current Municipal Code does not provide any
exemption for Huntington Beach Police Department animals used for special event enforcement actions
at the beach.
A motion was made by Strickland, second Kalmick to, after City Clerk reads by title, approve for
introduction Ordinance No. 4275, "An Ordinance of the City of Huntington Beach Amending Chapter
13.08 of the Huntington Beach Municipal Code Relating to Dogs and Other Animals."
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
28. 23-071 Approved for Introduction Ordinance No. 4280 Amending Chapter 2.109 of the
Huntington Beach Municipal Code Regarding the Finance Commission
Item pulled from consideration
29. 23-072 Approved the Introduction of Ordinance Nos. 4279 and 4278 Amending Chapter
2.64 and Chapter 2.111 of the Huntington Beach Municipal Code Regarding the
Community and Library Services Commission and the Citizen Infrastructure
Advisory Board/Public Works Commission, respectively
Item pulled from consideration
COUNCILMEMBER ITEMS
30. 23-109 Approved as amended item submitted by Councilmember Burns — Request to
prepare an Ordinance that limits Flag Displays at City Facilities to only the
American, POW/MIA, State, City, and as needed, the County Flags
Councilmember Burns introduced this item by stating that all cultures and people are welcome and
appreciated in Huntington Beach and none are to be treated differently or discriminated against. He
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stated the City of Huntington Beach should only fly or display on public property the following flags:
American, POW/MIA, California, Orange County and Huntington Beach City. He amended this item to
include the flags of the six branches of the armed forces when requested by government officials.
Councilmember Kalmick provided some history on this item and noted that if the City wants to fly the
Olympic flag in 2028, or a Sister City flag during an official visit, it would require amending this ordinance.
He suggested that the proper action would be to present an item to remove Council's approval to fly the
Pride flag and follow the established process requiring Council action to approve, or not, the flying of any
special flag.
Councilmember Moser stated her support for Councilmember Kalmick's statements, and confirmed with
City Clerk Estanislau that up until 2 PM, there were approximately 275 total email communications
received on this item with 228 in opposition and 46 in support. Councilmember Moser stated her opinion
that this agenda item will halt inclusive progress.
Councilmember McKeon stated that "inclusion" means everyone equally as an American, a resident of
California, a resident of Orange County, a resident of Huntington Beach, and pays homage to all
veterans, and other flags do not equally represent everyone.
Councilmember Bolton respectfully disagreed with Councilmember McKeon and stated that the Pride flag
does represent everyone because everyone has a member of the LGBTQ community in their family.
She also shared her opinion that group symbols do not exclude other members of the community.
Councilmember Burns stated he considers everyone as equally valued members of the community, and
he believes the City should only be flying government or military flags, because to do otherwise creates
division.
A motion was made by Burns, second McKeon to direct the City Manager to work with the City Attorney
to prepare an ordinance for introduction at the February 21 Council Meeting that the City only fly or
display on City property the American flag, the POW/MIA flag, the State of California flag, the Huntington
Beach City flag, and, as needed, the County of Orange flag, amended to include the six branches of
the armed forces. If the ordinance is adopted, direct the City Manager to update Administrative
Regulation (AR) 705: Citywide Flag Policy, accordingly.
The motion as amended carried by the following roll call vote:
AYES: Van Der Mark, Strickland, McKeon, and Burns
NOES: Kalmick, Moser, and Bolton
31. 23-118 Submitted by Councilmember Burns - SB 9 and SB 10 Impacts on Huntington
Beach Item pulled from consideration
32. 23-119 Denied item submitted by Councilmember Moser — Request to Reinstate Remote
Citizen Participation at Public Meetings
Councilmember Moser introduced this item by noting a decision was made without public discussion, and
stated one of the positive outcomes of the pandemic was utilizing available technology to increase public
participation in government.
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Councilmember McKeon clarified that there are many options for viewing live meetings, and accessing
meeting agendas and minutes. He further added that in order to speak live publicly, individuals need to
fill out a Request to Speak form and are allowed three minutes to speak during the Public Comments
portion of meetings.
Councilmember Kalmick clarified his understanding that Council, by approving there is no longer a need
to follow AB 361, did not also approve discontinuing Zoom meetings. He stated he could not support any
action that doesn't support continuing to use the technological infrastructure that has been developed to
increase public participation in local government.
Councilmember Bolton stated she has not seen any compelling reason to eliminate the opportunity for
remote public comments.
A motion was made by Moser, second Kalmick to request the City Council reinstate the remote public
participation option during meetings of the City Council and all BCCs, in the spirit of increasing public
access, civic discourse, and transparency. If needed, the City Council could reassess the need for
remote options periodically, moving forward.
A substitute motion was made by Strickland, second McKeon to return to pre-COVID standards, with no
Zoom capabilities, during meetings of the City Council and all Boards, Commissions and Committees.
The substitute motion carried by the following roll call vote:
AYES: Van Der Mark, Strickland, McKeon, and Burns
NOES: Kalmick, Moser, and Bolton
33. 23-120 Approved item submitted by Councilmember McKeon — Request to review Group
Home Regulations in the City and recommend amendments and improvements as
needed
Councilmember McKeon introduced this item by stating the effort is to ensure patient safety and proper
processing as well as quality of life for neighboring residents. He added there needs to be a
determination if additional resources are needed to step up enforcement, reduce response times,
identifying and effectively addressing problem group homes.
Councilmembers Kalmick and McKeon discussed the 9-month timeframe for eviction of disabled
occupants. Councilmember Kalmick noted that homes with six or fewer patients do not require a State
license, and asked if they would also be included in this action item.
Councilmember McKeon stated that if this item is approved, the process will include addressing
Councilmember questions and concerns, gathering specific details, and provide opportunities for further
analysis and Council consideration.
Councilmember Kalmick confirmed with Director of Community Development Ursula Luna-Reynosa that
sober living home issues come and go in waves, and staff was not prepared with a specific percentage of
code enforcement calls for sober living homes.
Councilmember Kalmick and City Attorney Michael Gates discussed the issue of insurance fraud
complaints. City Attorney Gates confirmed it would be the District Attorney who decides whether or not
to prosecute, and that the District Attorney relies upon municipal cooperation to gather facts.
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A motion was made by McKeon, second Strickland to direct the City Manager to work with the City
Attorney to return to Council with any recommendations regarding: 1. Possible new ZTA to provide
additional protections for disabled occupants requiring at least 9 months' notice prior to eviction (even
after insurance coverage runs out). This kind of a protection for disabled occupants will help prevent their
sudden turning out onto the street without a home or place to stay. These protections could also include
requiring operators and landlords to relocate the patients/clients back to their original place of origin.
2. Begin investigating complaints of insurance fraud. This may require the City Attorney work with the
District Attorney to identify prosecutorial paths for prosecution. 3. Provide City Council a Quarterly basis
to give status reports on: list of current complaints regarding illicit Group Home operations harming the
disabled, including Group Home locations, nature of complaints, description of complaints, complaints
regarding public nuisance activities like loud noise or trash, whether issues are Code Enforcement or
whether there is criminal activity; Group Home locations should identify State licensed facilities, sober
homes, non-licensed providers, etc. and what efforts have been done DURING that quarter to address
the complaints. A full status report is requested. 4. Recommendation on what resources, or assistance,
Code Enforcement needs from City Council to step up enforcement, reduce response times, effectively
identify problem homes, effectively address the problems of the homes, etc.
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
34. 23-123 Approved item submitted by Councilmember McKeon — Request to Commence a
Development Impact Fund (DIF) Study
Councilmember McKeon introduced this item by describing the impact on the City's level of service as
more development takes place, and defined some of the Development Impact Fund (DIF) fees. He
noted that the last comprehensive DIF and Nexus Report study was completed in 2011, and stated this
item is proposed to evaluate whether or not DIF fees sufficiently cover current level of service impacts.
Councilmember Kalmick shared information regarding AB 8602, which became effective on 1/1/22 and
noted cities have 8 years from 1/1/2022 to complete a Nexus Report. Councilmember Kalmick stated he
fully supports efforts to ensure cost recovery, but wants everyone to be fully aware of potential
unintended consequences of proceeding with new DIF and Nexus reports, and suggested this process
might best be tied to the budget process.
Councilmember McKeon stated he is aware of the concerns shared by Councilmember Kalmick, and he
expects these concerns will be taken into account as the process proceeds. Councilmember McKeon
stated he doesn't think these concerns should preclude moving forward to prepare for a Request for
Proposal (RFP).
Mayor Strickland noted that if this item is approved, it just means staff will proceed to determine the
process required to move towards a DIF study and Nexus Report. This item does not approve a DIF
study and Nexus Report.
City Attorney Michael Gates confirmed that staff would proceed taking into consideration the impacts of
AB 8602.
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A motion was made by McKeon, second Strickland to direct the City Manager to work with the Finance
and Community Development Departments to conduct a Request for Proposals/Qualifications process to
hire a firm that will commence a DIF study and Nexus Report or other appropriate calculations.
The motion carried by the following roll call vote:
AYES: Kalmick, Moser, Van Der Mark, Strickland, McKeon, Bolton, and Burns
NOES: None
ADJOURNMENT — at 10:12 PM, a motion by Strickland, second by Burns, to adjourn in memory of
Alyssa "Aly" West, Freshman at Huntington Beach High School who recently passed away.
The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is
Tuesday, February 21, 2023, 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
_______________________________________
City Clerk and ex-officio Clerk of the City Council
of the City of Huntington Beach and Secretary of
the Public Financing Authority and Housing
Authority of the City of Huntington Beach,
California
ATTEST:
______________________________________
City Clerk-Secretary
______________________________________
Mayor-Chair
60
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-154 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Travis K. Hopkins, Assistant City Manager
PREPARED BY:Shannon Levin, Council Policy Analyst
Subject:
City Council to consider positions by Intergovernmental Relations Committee (IRC)
Statement of Issue:
On February 13, 2023 the Intergovernmental Relations Committee (IRC), comprised of Mayor Tony
Strickland, Mayor Pro Tem Gracey Van Der Mark, and Council Member Pat Burns discussed
legislative items with relevance to Huntington Beach. Following discussion, the IRC took positions on
legislative and policy issues for presentation to the City Council for consideration.
Financial Impact:
Not applicable.
Recommended Action:
Consider one or more of the actions on the following issues proposed by the IRC:
1. Submit a Letter of Support for SB 381 (Min) - Electric Bicycles Study; and ,
2. Recommend that staff issue Request for Qualifications for State Legislative Advocacy
Services and Federal Legislative Advocacy Services separately.
Alternative Action(s):
Do not approve one or more recommended action, and direct staff accordingly.
Analysis:
On February 13, 2023, the IRC reviewed and discussed various legislative, regional issues, and
policy with relevance to Huntington Beach. The following is a summary of the positions taken by the
IRC and presented to City Council for consideration.
SB 381 (Min) - electric bike study, would direct the Mineta Transportation Institute at San Jose
University to conduct a study on electric bicycles to inform efforts to improve the safety of riders and
pedestrians. The bill would require the study to examine or compile, among other things, data on
injuries, accidents, emergency room visits, and deaths related to bicycles and e-bicycles and data on
City of Huntington Beach Printed on 2/16/2023Page 1 of 2
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File #:23-154 MEETING DATE:2/21/2023
best practices for safety of bicycles and e-bikes.
City staff issued two Request for Proposals for State Legislative Advocacy and Federal Legislative
Advocacy. After evaluation of the proposals, the IRC recommended 3-0 to issue Request for
Qualifications for the solicitation of State Legislative Advocacy and Federal Legislative Advocacy
Services respectively.
The IRC reviewed the request for a letter of support to Mesa Water District for the Local SiP
application for grant funds. The estimated cost of the feasibility study is approximately $400,000-
$500,000. The City of Newport Beach will contribute $25,000 in grant match funds. City of Huntington
Beach staff recommends the City contribute $25,000 in grant match funds to secure a stake in the
opportunity. Mesa Water District and Orange County Water District will cover the remaining funds.
This item is presented before City Council tonight as a separate item.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. SB 381 Min - Letter of Support e-bike Study
City of Huntington Beach Printed on 2/16/2023Page 2 of 2
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Manly, Australia TELEPHONE (714) 536-5553 Anjo, Japan FAX (714) 536-5233
City of Huntington Beach
2000 MAIN STREET CALIFORNIA 92648
Tony Strickland
Mayor
February 22, 2023
The Honorable Dave Min
California State Senator, District 37
10th and O St Offices, Ste 6710
Sacramento, CA 95814
RE: SB 381 (Min) Electric Bicycles: Study
City of Huntington Beach – Notice of Support
Dear Senator Min,
On behalf of the City of Huntington Beach, I write in support of your SB 381, which would direct the
Mineta Transportation Institute at San Jose State University to conduct a study on electric bicycles to
inform efforts to improve the safety of riders and pedestrians. Specifically, this bill will look to guide
research of key causes of injuries and fatalities from electric bicycle usage using data collected from
various sources.
The City of Huntington Beach is a coastal community in Southern California of about 200,000. Micro
mobility modes of transportation such as skateboards, bicycles, and electric bicycles are popular in the
City as part of the City’s coveted beach lifestyle. As such, the City has seen a drastic uptick in pedestrian
and bicycle involved injuries largely due to the proliferation of electric bicycles. While the City supports
new modes of transportation that reduce traffic congestion, improve vehicular flow, and improve air
quality, yet public safety and quality of life measures need consideration. The first step toward
addressing these concerns in a thoughtful way that maintains and encourages safe forms of
transportation involves data collection and analysis. SB 381 will provide the missing link to inform
common sense public safety measures to protect residents and promote clean transportation.
For these reasons, the City of Huntington Beach supports SB 381.
Sincerely,
Tony Strickland
Mayor
City of Huntington Beach
cc: Assembly Member Tri Ta
Senator Janet Nguyen
63
SENATE BILL No. 381
Introduced by Senator Min
February 9, 2023
An act to add and repeal Section 21214 of the Vehicle Code, relating
to vehicles.
legislative counsel’s digest
SB 381, as introduced, Min. Electric bicycles: study.
Existing law defines an electric bicycle to mean a bicycle equipped
with fully operable pedals and an electric motor of less than 750 watts,
and subjects a person riding an electric bicycle to provisions of law
governing the operation of a bicycle.
This bill would require the Mineta Transportation Institute at San
Jose State University to, on or before January 1, 2026, conduct a study
on electric bicycles to inform efforts to improve the safety of riders and
pedestrians, and to submit a report of the findings from the study to the
Legislature. The bill would require the study to examine or compile,
among other things, data on injuries, accidents, emergency room visits,
and deaths related to bicycles and electronic bicycles and data on best
practices for safety of regular bicycles versus electric bicycles.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
The people of the State of California do enact as follows:
line 1 SECTION 1. The Legislature finds and declares both of the
line 2 following:
line 3 (a) Electric bicycles not only offer a solution to car dependency
line 4 and transport poverty, but also help reduce our carbon footprint.
line 5 As California moves away from its dependence on fossil fuels, we
99 64
line 1 will see a rise in zero emission modes of transportation, including,
line 2 but limited to, electric bicycles.
line 3 (b) While the uptake in usage of electric bicycles is necessary
line 4 to meet our climate goals, it is important to ensure rider and
line 5 pedestrian safety. Research shows that accidents with an electric
line 6 bicycle have more severe consequences than with a regular bicycle.
line 7 Head trauma is significantly higher, although a helmet is much
line 8 more frequently used. The main culprit behind these results,
line 9 according to the experts, is the much higher speed.
line 10 SEC. 2. Section 21214 is added to the Vehicle Code, to read:
line 11 21214. (a) On or before January 1, 2026, the Mineta
line 12 Transportation Institute at San Jose State University shall conduct
line 13 a study on electric bicycles to inform efforts to improve the safety
line 14 of riders and pedestrians, and submit a report of the findings from
line 15 the study to the Legislature. The study shall examine or compile
line 16 information, including, but not be limited to, all of the following:
line 17 (1) Data on injuries, accidents, emergency room visits, and
line 18 deaths related to bicycles and electronic bicycles.
line 19 (2) Data comparing the injury patterns between bicycles and
line 20 electric bicycles in California.
line 21 (3) Data on best practices for safety of regular bicycles versus
line 22 electric bicycles.
line 23 (4) Review of all laws in the code pertaining to electric bicycles.
line 24 (5) Recommended accessories, including, but not limited to,
line 25 headlights, speedometers, brakes, bells, reflectors, and helmets,
line 26 and how having these accessories help to provide safety.
line 27 (6) Data on the manufacturing of electric bicycles, including,
line 28 but not limited to, the market of electric bicycles, manufacturer
line 29 information, sales patterns, and the number of electric bicycles on
line 30 California roads, including the usage by city and the reasons behind
line 31 the usage.
line 32 (7) Data on other countries with high electric bicycles usage,
line 33 including a review of policy mechanisms those countries use to
line 34 regulate and promote the safe use of electric bicycles and what
line 35 California can learn from them.
line 36 (b) (1) A report to be submitted pursuant to subdivision (a)
line 37 shall be submitted in compliance with Section 9795 of the
line 38 Government Code.
99
— 2 — SB 381 65
line 1 (2) Pursuant to Section 10231.5 of the Government Code, this
line 2 section is repealed on January 1, 2030.
O
99
SB 381 — 3 — 66
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-104 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Ursula Luna-Reynosa, Director of Community Development
PREPARED BY:Kriss Casanova, Economic Development Manager
Subject:
Approve and authorize execution of Amendment No. 1 to License Agreement between the
City of Huntington Beach and PCH Beach Resort, LLC, for the beach concession at 21529
Pacific Coast Highway
Statement of Issue:
The City Council is asked to approve Amendment No. 1 (“Amendment”) to the License Agreement
(“Agreement”) between the City and PCH Beach Resort, LLC ("Licensee") to operate the beach
concession located at 21529 Pacific Coast Highway (“Shor Concession”). The Amendment
outlines all necessary permits and conditions to serve alcohol responsibly on the licensed site and
updates the site plan.
Financial Impact:
The Agreement generates approximately $13,500 annually in base rent revenue to the City in
addition to shared percentage of revenue based on low (5%), middle (10%), and peak (12%)
seasons. Revenue is deposited into the General Fund and is expected to increase with the addition
of alcohol sales.
Recommended Action:
A) Approve “Amendment No. 1 to License Agreement Between the City of Huntington Beach and
PCH Beach Resort, LLC” for the Concession Stand at 21529 Pacific Coast Highway; and ,
B) Authorize the Mayor, City Manager, and City Clerk to execute the Amendment and other related
documents.
Alternative Action(s):
Do not approve the Amendment and direct staff accordingly.
Analysis:
City of Huntington Beach Printed on 2/16/2023Page 1 of 2
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File #:23-104 MEETING DATE:2/21/2023
In 2017, the City and Licensee entered into an Agreement for the Shor Concession affiliated with
the Hyatt Regency Huntington Beach Resort and Spa. The concession provides amenities for
beachgoers and hotel guests including food, ice, sunscreen, and firewood. The Agreement has a
ten-year term with two five-year extension options and includes a monthly base rent with shared
percentage of revenue based on low (5%), middle (10%) and peak (12%) seasons.
The Licensee began remodeling the concession just before COVID-19 and has experienced
numerous delays and challenges completing the project primarily due to supply chain disruptions.
The Licensee purchased new kitchen equipment and also plans to visually upgrade the building
and outdoor seating area and to offer an expanded menu beginning summer 2023. As part of the
expanded menu, the Licensee will serve alcoholic beverages such as beer, wine, and distilled
spirits within a 2,835 square foot, outdoor fenced seating area. The Licensee recently obtained a
Coastal Development Permit (CDP) and a Conditional Use Permit (CUP) in association with an
Alcohol Beverage Control (ABC) license for the sale of alcohol at the concession. The premises are
intended to be open 8 am - 6 pm during peak season (Memorial Day weekend through Labor Day
weekend) and select weekends throughout the year.
Amendment No.1 of the Agreement (Attachment 1) modifies the following provisions:
•Licensee may sell alcoholic beverages to concession customers. While the Agreement
already allows the sale of alcohol with City approval, the Amendment requires that all
necessary permits and licenses have been obtained and outlines all conditions that must
be followed to ensure that the Licensee operates in a responsible manner.
•The exhibit of the premises has been updated with a more detailed, scaled site plan instead
of an aerial with implied measurements. The total concession square footage remains the
same.
Environmental Status:
The actions to approve the amended and restated lease agreement to operate a concession
meets the categorical exemption criteria set forth in the CEQA State Guidelines pursuant to
Section 15301 (Existing Facilities), which exempts the operation, repair, maintenance, permitting,
leasing, licensing.
Strategic Plan Goal:
Economic Development & Housing
Attachment(s):
1. Amendment No. 1 to the License Agreement
2. License Agreement Between the City of Huntington Beach and PCH Beach Resort LLC for
Concession Stand at 21529 PCH
3. PowerPoint Presentation - 21529 PCH (License Agreement Amendment No. 1)
City of Huntington Beach Printed on 2/16/2023Page 2 of 2
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K-4329KINGSTONC_TOILETSVITREOUS CHINA
WH(E) RAMPNO PARKINGNO PARKING(E) TRASHAREA(E) PUBLIC RESTROOM650 SF(E)RAMP TOREMAIN100'-0"60'-0"SHOR(E) HUNTINGTON BEACH BIKE TRAILEXISTING CONCRETE PAVING(E)DRINKINGFOUNTAINEXISTING BUILDING1,933 SFEXISTING CONCRETE PAVING6000PREMISESBOUNDARY(60' X 100')EXHIBIT A-1: PREMISES BOUNDARY76
MEETING DATE:
SUBMITTED TO:
SUBMITTED BY:
PREPARED BY:
Dept. ID ED 17-06 Page 1 of 2
Meeting Date: 2/6/2017
SUBJECT:
CITY OF HUNTINGTON BEACH
REQUEST FOR CITY COUNCIL ACTION
2/6/2017
Honorable Mayor and City Council Members
Fred A. Wilson, City Manager
Ken Domer, Assistant City Manager
Kellee Fritzal, Deputy Director of Business Development
Approve a License Agreement between the City of Huntington Beach and PCH
Beach Resort, LLC., for Operation of the former Beach Hut Beach Concession
Statement of Issue:
The City Council is asked to approve a License Agreement between the City and PCH Beach
Resort, LLC. ("Licensee"), to operate the beach concession located at 21529 Pacific Coast
Highway, Huntington Beach (former "Beach Hut").
Financial Impact:
The License Agreement will generate $12,000 annually in base rent in addition to shared
percentage of revenue based on low (5%), middle (10%), and peak (12%) seasons. Revenues will
be deposited into the General Fund.
Recommended Action:
A) Approve License Agreement between the City of Huntington Beach and PCH Beach Resort,
LLC., for operation of a beach concession located at 21529 Pacific Coast Highway; and
B) Authorize the Mayor, City Manager, and City Clerk to execute the License Agreement and other
related documents.
Alternative Action(s):
Do not approve the License Agreement, and direct staff as necessary.
Analysis:
In 1998, the City, former Redevelopment Agency, and Mayer Financial L.P., ("Developer") entered
into an Amended and Restated Disposition and Development Agreement ("DDA") and a separate
Development Agreement ("DA") for the development of the Waterfront Project. As part of the DDA
and DA, PCH Beach Resorts, LLC, had an option of first refusal to operate the concession stand
upon the expiration of the previous lease.
The License Agreement has been prepared in accordance with the City's standard lease format.
The terms are summarized below:
• 10-year term
• Options: Two (5 year) options at Licensee's option, with City's consent
Item 13. - 1
HR -432-
77
Dept. ID ED 17-06 Page 2 of 2
Meeting Date: 2/6/2017
• Monthly fee: $1,000 with 2% annual increases
• Shared percentage of revenue based on low (5%), middle (10%), and peak (12%) seasons
• Remodel of the concession stand
• Indemnification of the City against claims and damages arising from losses.
• Minimum of 120 days open
The Economic Development Committee (EDC) will have reviewed the License Agreement at their
February 1, 2017 meeting and City Council liaisons from the EDC can provide comments regarding
that discussion as applicable.
Environmental Status:
Not applicable
Strategic Plan Goal:
Strengthen economic and financial sustainability
Attachment(s):
License Agreement between the City of Huntington Beach and PCH Beach Resort, LLC. for
operation of a concession stand located at 21529 Pacific Coast Highway
.FIB -433- Item 13. -2
78
LICENSE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH
AND PCH BEACH RESORT LLC FOR
CONCESSION STAND AT 21529 PACIFIC COAST HIGHWAY
THIS LICENSE AGREEMENT (the "Agreement") is made and entered into effective
C- RuA/2.kj 619 , 2017, by and between the CITY OF HUNTINGTON BEACH, a , -
municipal corporation of the State of California ("City") and PCH BEACH RESORT, LLC, a
California limited liability company ("Licensee").
WHEREAS, City wishes to enter into a license agreement with respect to certain real
property (the "Property"), consisting of a concession stand at 21529 Pacific Coast Highway in
the City of Huntington Beach, California, and other related improvements (collectively referred
to as the "Improvements"). The term "Premises" as used in this Agreement shall mean both the
Property and the Improvements. Licensee desires to license and use the Premises in the manner
set forth below.
NOW, THEREFORE, the parties covenant and agree as follows:
SECTION 1. GRANT OF CONCESSION ON THE PREMISES.
City, pursuant to the terms of this Agreement, grants to Licensee for the purposes stated
herein, the right, privilege and duty to equip, operate and maintain a concession stand open to the
public located on the Premises (hereinafter sometimes referred to as the "Concession").
Licensee shall not use the Premises for any other purpose or business. A map depicting the
Premises is set forth in Exhibit "A", which is attached hereto and incorporated herein by this
reference. This Agreement is not intended to confer third-party beneficiary status to anyone.
SECTION 2. RESERVATIONS. ENCUMBRANCES AND RIGHTS-OF-WAY.
(a) City expressly reserves all natural resources in, on, or two hundred fifty
(250) feet under the Premises, including, without limitation, oil, coal, natural gas and other
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EXHIBIT "A" 79
hydrocarbons, minerals, aggregates, timber and other geothermal resources, as well as the
right to grant Agreements or other contractual arrangements in and over the Premises for the
extraction of such natural resources. However, such leasing or other arrangement shall be
neither inconsistent nor incompatible with the rights or privileges of Licensee under this
Agreement.
(b) City expressly reserves a right to enter upon the Premises with as much
advance written, verbal or electronic notice as possible to Licensee for any reason
associated with public health, safety or welfare, or for the protection of life, limb or
property. In all other cases unless otherwise specifically set forth herein. City reserves
the right for such entry but City shall give Licensee at least twenty-four (24) hours
advance written, verbal or electronic notice. City shall have a right of reasonable access
to the Premises across Licensee owned, controlled or occupied lands adjacent to the
Premises, if any, for any purpose associated with this Agreement.
(c) City expressly reserves the right to convey or encumber City's fee interest
in the Premises, in whole or in part, for any purpose not inconsistent or incompatible with
the rights or privileges of Licensee under this Agreement. In addition. Licensee agrees
to subordinate the Agreement to any existing or future City financing regarding the
Premises or any portion thereof, provided that any financing does not interrupt
Licensee's business or rights under this Agreement. Licensee also agrees to cooperate
and provide any documentation necessary for City to obtain any such financing.
(d) This Agreement is made without warranty by City of the condition of its
title or the condition or fitness of the Premises for Licensee's stated or intended use.
SECTION 3. TIME OF ESSENCE.
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-2- 80
Time shall be of the essence of this Agreement and each and all of its terms, covenants or
conditions in which performance is a factor.
SECTION 4. TERM
This Agreement shall commence at 12:01 a.m. on ,--;e3,4t,04:ey 6, 200, for a ten (10)
year term, which shall end at 11:59 p.m. on Ice-6,41,04,y 6 , 202.1 (herein, the "Term").
Licensee shall have the option to extend the Term of this Agreement for two additional
consecutive five (5) year periods (each, an "Extension Period"), upon mutual written consent by
the City and Licensee, in each case by Licensee delivering to City a written notice of exercise of
Licensee's exercise of the extension option no later than ninety (90) days prior to expiration of
the then-applicable Term.
SECTION 5. CONDITIONS OF PREMISES AS IS.
City represents and warrants that all water, sanitary sewer, electrical, gas, drainage
facilities, and other utilities located outside the Premises and servicing the Premises are in good
condition and adequate and suitable for Licensee's intended use of the Premises; provided that
Licensee shall be responsible for installation of a grease trap or grease interceptor as provided in
Section 24 of this Agreement.
Except as expressly set forth above, the taking of possession of the Premises by Licensee
shall, in itself, constitute acknowledgment that the Premises are in good condition. Upon taking
possession of the Premises, Licensee agrees to accept the Premises in their presently existing
condition, "as is," and agrees that City shall not be obligated to make any alterations, additions
or betterments thereto except as expressly set forth in Sections 6 and 24 of this Agreement.
SECTION 6. PUBLIC FACILITIES.
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-3- 81
During the Term of this Agreement, City shall maintain in good condition and promptly
repair and replace or cause to be maintained, repaired, or replaced, as required, all water, sanitary
sewer, electrical, gas, drainage facilities, and other utilities located off of the Premises and
outside the building on the Premises that are required for Licensee's intended use of the
Premises; provided that Licensee shall be responsible for maintenance, repair, and replacement
of the grease trap or grease interceptor as provided in Section 24 of this Agreement. During the
Term of this Agreement, City shall also be responsible for complying with all ADA access
requirements off of the Premises to the extent the same relates to the Premises. Except as
expressly set forth above, by entering into this Agreement, City makes no stipulation as to the
type, size, location or duration of public facilities, including, without limitation, any City parking
lots to be maintained on property owned, controlled or occupied by City.
SECTION 7. ADDITIONS, ALTERATIONS AND REMOVAL.
(a) City hereby approves Licensee making the improvements and alterations
to the Premises described in Exhibit "D" hereto. No other modifications, alterations or
additions to the Premises, including, without limitation, construction of Improvements or
changes to structural design or exterior furnishings shall be constructed or made by
Licensee without Licensee first obtaining the prior written approval of City, which will
not be unreasonably withheld.
(b) Except as provided under this Agreement, no alteration or removal of
existing Improvements on or natural features of the Premises shall be undertaken without
Licensee first obtaining the prior written approval of City.
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-4- 82
(c) Licensee's obligation to obtain City's prior written approval is separate
and independent of Licensee's obligation to obtain any permits from City, such as,
without limitation, a building permit.
SECTION 8. CITY'S CONTRACT ADMINISTRATOR.
City's Deputy Director of the Office of Business Development, or his or her designee,
shall be City's Contract Administrator for this Agreement with the authority to act on behalf of
City for the purposes of this Agreement, and all City approvals and notices required to be given
herein to City shall be so directed and addressed.
SECTION 9. LICENSE FEE.
Licensee agrees to pay to City a license fee (the "License Fee") for the use and
occupancy of the Premises per Exhibit "B." The License Fee consists of the Base License Fee
and the Percentage License Fee.
Licensee shall pay the monthly Base License Fee beginning on the commencement date
of this Agreement. Licensee shall pay Percentage License Fee beginning on the first anniversary
of the commencement date of this Agreement..
• Monthly Base License Fee
o One thousand ($1,000) per month plus two percent (2%) annual increases,
commencing June 1, 2017.
• Percentage License Fee
o Low Season (January, February, November, December): = 5.0% of Gross
Sales.
o Mid Season (March., April, October): = 10.0% of Gross Sales.
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o Peak Season (May, June, July, August, September): = 12% of Gross
Sales.
Licensee shall pay the License Fee monthly to City at the City Treasurer's Office, P.O.
Box 711, Huntington Beach, California, 92648, or at such other place or places as City may from
time-to- time designate by written notice delivered to Licensee. Licensee shall pay the Base
License Fee monthly, in advance. Licensee shall pay the Percentage License Fee within thirty
(30) calendar days after the end of the month for which the Percentage License Fee is due and
owing, or on the next business day if the thirtieth (30 th ) day falls on a weekend or holiday.
SECTION 10. LATE CHARGE AND PENALTY.
If any installment of the Base License Fee or Percentage License Fee is not received by
the City Treasurer within ten (10) calendar days after the date such payment is due, or the next
business day if the tenth (10 th ) day falls on a weekend or holiday, Licensee shall pay the
following late charge and penalty: (1) a late charge of ten percent (10%) shall be applied to any
outstanding balance after any payment hereunder is due but unpaid; and (2) one and a half
percent (11/2%) penalty per month shall be added for each month the Base License Fee or
Percentage License Fee, as applicable, is due but unpaid. With respect to any other payments
required by Licensee, a one and a half percent (11/2%) penalty per month shall be added for each
month such payment hereunder is due but unpaid.
SECTION 11. GROSS SALES DEFINED.
For the purpose of this Agreement, the term "Gross Sales" shall mean the total price of
all internet sales processed on site, merchandise, or services sold or rendered, or equipment
rented, in, on, or from the Premises by Licensee, or anyone contracting with Licensee, including,
without limitation, its agents or sub-licensees (collectively or individually, "Licensee
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-6- 84
Party(ies)"), whether wholesale or retail, whether for cash or on credit, and if on credit whether
or not paid, and whether in exchange for any other product, commodity, service, commercial
paper or forbearance, and shall include, without limitation, the following:
(a) All revenues, receipts, commissions or proceeds from on-line sales by
Licensee Party(ies), and/or from all public telephones, vending, weighing and all other
machines owned, operated, or leased to or by Licensee Party(ies) in, on, or from the
Premises;
(b) All revenues, receipts, commissions or proceeds from sales based on
orders solicited or taken, in, on, or from the Premises for merchandise, or services to be
delivered or rendered off, or from sources outside, the Premises, including, without
limitation, all orders taken in, on, or from the Premises although the orders may be filled
elsewhere;
(c) All revenues, receipts, commissions or proceeds from the renting of
equipment of any kind in, on, or from the Premises; and
(d) All revenues, receipts, commissions or proceeds generated from offsite
but delivered through the Concession; provided, however, that for purposes of this
Agreement the term "Gross Sales" shall exclude all Hotel Sales. As used herein, the term
"Hotel Sales" shall include all revenues, receipts, commissions, or proceeds generated
from banquets, meetings, and any other group activities and events that are arranged or
booked by or at the Hotel and delivered at the Premises. As used herein, the term "Hotel
Sales" shall exclude any room charges for food, beverages, and services billed to guests
of the Hotel but provided from the Premises (i.e., such sales shall be included in the
definition of "Gross Sales" within the meaning of this Agreement). As used herein, the
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term "Hotel" shall mean the Hyatt Regency Huntington Beach Resort and Spa located at
21500 Pacific Coast Highway, Huntington Beach, California, that is owned and operated
by Licensee.
(e) All revenues, receipts, commissions or proceeds made by Licensee
Party(ies) or their employees or others acting on their behalf for the rendition of services
of any kind whatsoever, made in, on, or from the Premises.
(f) All other revenues, receipts, commissions or proceeds generated by,
arising or derived whatsoever from the use of the Premises or derived whatsoever from
any business conducted in, on, or from the Premises.
(g) All revenues, receipts, commissions or proceeds generated from food
and/or beverage sales made in, on, or from the Premises.
For purposes of computing the Gross Sales figure on which to calculate the Percentage
License Fee, the amount of Gross Sales shall start over at zero dollars on the first day of each
month.
SECTION 12. GROSS SALES EXCLUSIONS.
Gross Sales shall not include the following items, and Licensee may deduct such items
from Gross Sales to the extent they have been included therein or have been included in a prior
computation of Gross Sales on which the Percentage License Fee has been paid under this
Agreement to City:
(a) Any sales, excise or other taxes otherwise includable in Gross Sales and
which become part of the total price of merchandise or services sold or rendered, or
equipment rented, in, on, or from the Premises where Licensee must account for and
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-8- 86
remit the taxes to the government entity or entities which impose them, but only if such
taxes are added to the total price and collected from customers;
(b) Any transfer of trade inventory from the Premises to the manufacturer or
supplier from whom it was obtained by Licensee;
(c) Sales of Trade Fixtures (as defined in Section 49 below);
(d) Sums and credits received in the settlement of claims for loss of or
damage to trade inventory or Trade Fixtures; and
(e) Any sales resulting in a cash or credit refund to a customer in the ordinary
course of business.
(0 Any sales of merchandise to City employees which take place at City
Hall.
(g) Hotel Sales (as defined in Section 11(d) of this Agreement).
SECTION 13. BOOKS AND RECORDS.
Licensee shall keep true and accurate books and records showing all of its business
transactions (excluding Hotel Sales) in separate records of account for the Concession in a
manner acceptable to City, and City and/or its designated representatives shall have the right, at
all reasonable times, to inspect such books and records including, without limitation. State of
California sales or use tax returns or other State return records, and Licensee hereby agrees that
all such records and instruments shall promptly be delivered and made available to City and/or
its designated representatives within thirty (30) days of receiving written request therefor.
Licensee shall famish to City and/or its designated representatives copies of its quarterly
California sales and use tax returns at the time each is filed with the State of California.
The books and records shall show the total amount of Gross Sales made each calendar
month in, on, or from the Premises and any exclusions listed in Section 12 above (with the
exception that Hotel Sales need not be included in said books and records). All hotel guest and
non-guest charges that are processed as cash, credit card, or room charges, at the Concession will
flow through a point of sale system and shall be summarized on financial statements for purposes
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-9- 87
of the City's audit. Furthermore, said sales will broken out as a separate food and beverage
outlet. All summarized financial statements from the Concession shall support the percentage
rent calculations that are remitted to the City."
All sales and charges shall be recorded by means of cash registers which display the
amount of the transaction certifying the amount recorded. The register shall be equipped with
devices which log in daily, sales totals and which shall record on tapes the transaction numbers
and sales details. At the end of each day the tape shall record the total sales for that. day.
Licensee agrees to maintain on the Premises, or another location subject to the prior written
approval of City, all records, books of account and cash register tapes, showing, or in any way
pertaining to the Gross Sales made in, on, or from the Premises during such calendar month,
including, without limitation. State of California sales or use tax returns or other State tax
returns, for a period of five (5) years following the close of each calendar month.
SECTION 14. STATEMENT OF GROSS SALES/AUDIT.
At the time specified in Section 9 of this Agreement for the payment of each installment
of the Percentage License Fee, Licensee shall deliver to City a true and accurate statement signed
by Licensee or by an authorized employee of Licensee showing the total Gross Sales and any
exclusions listed in Section 12 above (again, with the exception that Hotel Sales need not be
included) made during the preceding calendar month and the amount of the Percentage License
Fee then being paid calculated on such Gross Sales pursuant to this Agreement. The acceptance
by City of any monies paid to City by Licensee as the Percentage License Fee, as shown by any
statement furnished by Licensee, shall not be construed as an admission of the accuracy of the
statement, or of the sufficiency of the amount of the Percentage License Fee payment, and City
shall be entitled to review the adequacy of such payment as set forth herein. By the end of each
December, Licensee shall deliver to City a year-end statement showing the total amount of Gross
Sales made in, on, or from the Premises in each month of the preceding year, the total of any
exclusions, the total Percentage License Fee paid to City for each of those months, all with year-
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-10 - 88
end totals. City may at any time within three (3) years after receiving the year-end statement, at
its sole cost and expense, cause all records, books of account and cash register tapes for the year
purportedly covered by the statement, to be audited by City or. an accountant selected by City.
Licensee shall, within thirty (30) days of receiving written notice of City's desire for such an
audit, deliver and make available all such records, books of account and cash register tapes to
City or its designated representative for City's use in the audit and/or for copying. If the audit
discloses that Gross Sales were understated and/or exclusions overstated, Licensee shall
immediately pay the additional Percentage License Fee, together with a penalty thereon from the
date it was due at the penalty rate set forth in Section 11 above. Furthermore, Licensee shall
promptly on demand reimburse City for the cost and expense of the audit should the audit
disclose that the questioned year-end statement understated Gross Sales (including an
overstatement of exclusions) by an amount such that the Percentage License Fee has been
underpaid by an amount greater than Two Hundred Fifty Dollars ($250.00). City further
reserves the right to examine and audit all such records, books of account and cash register tapes
at any time during the three (3) year period following the expiration or termination of this
Agreement. In addition. City shall have the right to enter upon the Premises during business
hours and with two (2) hours advance written, verbal or electronic notice to Licensee to perform
any audit or inspection function with respect to this Agreement.
Licensee, its bookkeeper and/or accountant shall respond to all questions and inquiries of
City with respect to the books, records, statements and other documentation being examined, and
shall promptly provide other further documentation as may be required by City. City is entitled
to take statements by deposition under oath of Licensee, its officers, bookkeepers and/or
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89
accountants or any person who prepared the books, records, statements and other documentation
required to be provided by Licensee under this Agreement.
SECTION 15. SECURITY DEPOSIT.
Upon execution hereof, Licensee shall pay and maintain at all times during the entire
term of this Agreement or any renewals or extensions thereof or during any holdover period, a
security deposit with City in a sum of not less than Five Thousand Dollars ($5,000.00) to
guarantee all of Licensee's obligations, liabilities, duties and responsibilities under the
Agreement, including, without limitation, the repair and maintenance of the Premises as
provided herein. Such deposit shall be in the form of a cash bond or an assignment of certificate
of deposit (the "CD") or savings account to City, and shall be provided to the City Treasurer.
The form of any such security deposit shall be approved by the City Attorney and the City
Treasurer. No interest shall accrue on cash deposits to the benefit of Licensee, but interest shall
accrue on a CD or savings account and shall be paid to Licensee under the terms of the CD or
savings account. Licensee shall send a copy of each renewal of the CD to the City Treasurer to
ensure that City has the records of each active deposit account.
SECTION 16. QUALITY OF SALES. RENTALS AND SERVICES.
Licensee, at its sole cost and expense, shall equip, operate, manage and maintain the
Premises and Concession and shall keep the same equipped and maintained in a manner
acceptable to City during the entire term of this Agreement or any renewals or extensions thereof
or during any holdover period. It is the intent of City that the Concession's services be provided
in a manner to meet the needs of the visiting public, and should City deem the Concession's
hours of operation and/or food, merchandise, services or rentals inadequate to meet such needs,
City may require Licensee to make such changes requested by City. Licensee shall additionally
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have the right, but not the obligation, to utilize the Concession to stage banquets, meetings, and
other group activities and events that are arranged or booked by or at the Hotel and delivered at
the Premises (i.e., Hotel Sales), provided that Hotel Sales shall be excluded when determining
whether Licensee has satisfied its minimum day/hour operational obligations set forth in the next
paragraph below. Licensee shall not use or permit the Premises to be used, in whole or in part,
during the entire term of this Agreement or any renewals or extensions thereof or during any
holdover period for any purpose other than as herein set forth, without the prior written consent
of City.
Licensee shall only sell concessions and related merchandise at the concession stand.
The concession stand shall be in operation for a minimum of one hundred twenty (120) days
during the calendar year and for a minimum of four (4) hours a day, plus any additional days to
accommodate special events. The minimum number of operating days and hours may be
modified due to weather conditions or unforeseen events. Any modification to this minimum
number of days or requests for special events (other than Hotel Sales, which are a permitted use)
must be approved in advance in writing by the Deputy Director of the Office of Business
Development or his or her designee.
Except as permitted in advance in writing by City, all foods and beverages shall be sold
in disposable containers. No pull-top cans or Styrofoam containers are to be vended or
dispensed from the Premises. Licensee, wherever feasible, shall eliminate the use of non-
recyclable containers and plastics. City may from time to time review the items sold and
containers or utensils used or dispensed by Licensee. City reserves the right to prohibit the sale
or use of non-recyclable containers or plastics, and Licensee shall comply with City's
requirement regarding prohibition of non-recyclable items. With the exception of Hotel Sales,
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Licensee shall comply with any City exclusivity agreement the City may have with any food or
beverage sponsor.
With the exception of Hotel Sales, City in its sole discretion reserves the right to prohibit
Licensee's sale, provision or rental of any item or service rendered or performed, which it deems
objectionable or offensive, beyond the scope deemed necessary for proper service to the, public,
inappropriate for sale, provision or rental by the Concession, or of inferior quality.
SECTION 17. INDEMNIFICATION, DEFENSE AND HOLD HARMLESS
AGREEMENT.
Licensee hereby agrees to protect, defend, indemnify-and hold harmless City, its officers,
elected or appointed officials, employees, agents and volunteers from and against any and all
claims, damages, losses, expenses, judgments, demands and defense costs (including, without
limitation, costs and fees of litigation (including arbitration) of every nature or liability of any
kind or nature) arising out of or in connection with (1) the use or occupancy of the Premises by
Licensee, its officers, employees or agents, or (2) the death or injury of any person or the damage
to property caused by a condition of the Premises, or (3) the death or injury of any person or the
damage to property caused by any act or omission of Licensee, its officers, employees or agents,
or (4) any failure by Licensee to keep the Premises in a safe condition, or (5) Licensee's (or
Licensee's agents and/or sub-licensees, if any) performance of this Agreement or its failure to
comply with any of its obligations contained in this Agreement by Licensee, its officers, agents
or employees except such loss or damage which was caused by the sole negligence or willful
misconduct of City. Licensee shall hold all Trade Fixtures, personal property and trade
inventory on the Premises at the sole risk of Licensee and save City harmless from any loss or
damage thereto by any cause whatsoever, except such loss or damage which was caused by the
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sole negligence or willful misconduct of City. Licensee will conduct all defense at its sole cost
and expense and City shall approve selection of Licensee's counsel. This indemnity shall apply
to all claims and liability regardless of whether any insurance policies are applicable. The policy
limits do not act as limitation upon the amount of indemnification to be provided by Licensee.
SECTION 18. WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY
INSURANCE.
Licensee acknowledges awareness of Section 3700 et seq. of the California Labor Code,
which requires every employer to be insured against liability for workers' compensation.
Licensee covenants that it shall comply with such provisions prior to the commencement of this
Agreement. Licensee shall obtain and furnish to City workers' compensation and employers'
liability insurance in amounts not less than the State statutory limits. Licensee shall require all
sub-licensees and contractors to provide such workers' compensation and employers' liability
insurance for all of the sub-licensees' and contractors' employees. Licensee shall furnish to City
a certificate of waiver of subrogation under the terms of the workers' compensation and
employers' liability insurance and Licensee shall similarly require all sub-licensees and
contractors to waive subrogation.
SECTION 19. GENERAL PUBLIC LIABILITY INSURANCE.
In addition to the workers' compensation and employers' liability insurance and
Licensee's covenant to defend, hold harmless and indemnify City, Licensee shall obtain and
furnish to City, a policy of general public liability insurance, including motor vehicle coverage
against any and all claims arising out of or in connection with the Premises. This policy shall
indemnify Licensee, its officers, employees and agents, while acting within the scope of their
duties, against any and all claims arising out of or in connection with the Premises, and shall
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provide coverage in not less than the following amount: combined single limit bodily injury and
property damage, including products/completed operations liability and blanket contractual
liability, of One Million Dollars ($1,000,000.00) per occurrence. If coverage is provided under a
form which includes a designated general aggregate limit, the aggregate limit must be no less-
than One Million Dollars ($1,000,000.00) for the Premises. This policy shall name City, its
officers, elected or appointed officials, employees, agents, and volunteers as Additional Insureds,
and shall specifically provide that any other insurance coverage which may be applicable to the
Agreement shall be deemed excess coverage and that Licensee's insurance shall be primary.
Licensee shall require all sub-licensees to obtain and furnish to City, a policy of general public
liability insurance, including motor vehicle coverage against any and all claims arising out of or
in connection with the Premises in the same amounts required under this section.
Under no circumstances shall said above-mentioned insurance contain a self-insured
retention, or a "deductible" or any other similar form of limitation on the required coverage.
SECTION 20. PROPERTY INSURANCE.
Licensee shall provide before commencement of this Agreement and shall obtain and
furnish to City, at Licensee's sole cost and expense, property, and fire insurance with extended
coverage endorsements thereon, by a company acceptable to City authorized to conduct
insurance business in California, in an amount insuring for the full insurable value of all
Improvements, Trade Fixtures, personal property whether or not owned or leased by Licensee,
and all trade inventory in or on the Premises against damage or destruction by fire, theft or the
elements. This policy shall contain a full replacement cost endorsement naming Licensee as the
insured and shall not contain a coinsurance penalty provision. The policy shall also contain an
endorsement naming City as an Additional Insured. The policy shall contain a special
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endorsement that such proceeds shall be used to repair, rebuild or replace any such
Improvements, Trade Fixtures, personal property whether or not owned or leased by Licensee,
and all trade inventory so damaged or destroyed; and if not so used, such proceeds (excluding
any insurance proceeds for Trade Fixtures, personal property whether or not owned or leased by
Licensee, and trade inventory, but only to the extent the insurance proceeds specifically cover
those items) shall be paid to City. The policy shall also contain a special endorsement that if the
Premises are so destroyed triggering the parties' ability to terminate as set forth in Section 50
(Destruction) below, and either party elects to terminate the Agreement, the entire amount of any
insurance proceeds (excluding such proceeds for Trade Fixtures, personal property whether or
not owned or leased by Licensee and trade inventory, but only to the extent the insurance
proceeds specifically cover those items) shall be paid to City. The proceeds of any such
insurance payable to City may be used, in the sole discretion of City, for rebuilding or repair as
necessary to restore the Premises or for any such other purpose(s) as City sees fit.
This policy shall also contain the following endorsements:
(a) The insurer shall not cancel or reduce the insured's coverage without
(30) days' prior written notice to City;
(b) City shall not be responsible for premiums or assessments on the policy.
A complete and signed certificate of insurance with all endorsements required by this
Section shall be filed with City prior to the execution of this Agreement. At least thirty (30) days
prior to the expiration or termination of any such policy, a signed and complete certificate of
insurance showing that coverage has been renewed shall be filed with City. Licensee shall
require all sub-licensees to obtain and furnish to City, property and fire insurance with extended
coverage endorsements thereon, by a company acceptable to City authorized to conduct
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insurance business in California, in compliance with the requirements and amounts set forth in
this section.
SECTION 21. INCREASE IN AMOUNT OF GENERAL PUBLIC LIABILITY AND
PROPERTY INSURANCE.
Not more frequently than once every two (2) years, if, in the sole opinion of City, the
amount and/or scope of general public liability insurance in Section 19 above and/or property
insurance coverage in Section 20 above at that time is not adequate. Licensee shall increase the
insurance coverage as reasonably required by City.
SECTION 22. CERTIFICATES OF INSURANCE; ADDITIONAL INSURED
ENDORSEMENTS.
Prior to commencement of this Agreement, Licensee shall furnish to City certificates of
insurance subject to approval of the City Attorney evidencing the foregoing insurance coverages
as required by this Agreement; these certificates shall:
(a) provide the name and policy number of each carrier and policy;
(b) shall state that the policy is currently in force; and
(c) shall promise to provide that such policies shall not be canceled or
modified without thirty (30) days' prior written notice of City; however ten (10) days' prior
written notice in the event of cancellation for nonpayment of premium, which 10-day notice
provision shall not apply to property insurance in Section 20 above.
Licensee shall maintain the foregoing insurance coverages in force during the entire term
of the Agreement or any renewals or extensions thereof or during any holdover period.
The requirement for carrying the foregoing insurance coverages shall not derogate from
Licensee's defense, hold harmless and indemnification obligations as set forth in this Agreement.
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City or its representatives shall at all times have the right to demand the original or a copy of any
or all the policies of insurance. Licensee shall pay, in a prompt and timely manner, the
premiums on all insurance hereinabove required.
SECTION 23. INSURANCE HAZARDS.
Licensee shall not commit or permit the commission of any acts on the Premises nor use
or permit the use of the Premises in any manner that will increase the existing rates for, or cause
the cancellation of any liability, property, or other insurance policy for the Premises or required
by this Agreement. Licensee shall, at its sole cost and expense, comply with all requirements of
any insurance carrier providing any insurance policy for the Premises or required by this
Agreement necessary for the continued maintenance of these policies at reasonable rates.
SECTION 24. MAINTENANCE OF PREMISES; IMPROVEMENTS
During the entire Term of this Agreement City shall maintain, repair, and replace the
Public Facilities outside the boundaries of the Premises which are City's responsibility as set
forth in Section 6 of this Agreement. Licensee agrees to maintain the Premises in good order and
repair, at Licensee's sole cost and expense, during the entire term of this Agreement or any
renewals or extensions thereof or during any holdover period, pursuant to the City's maintenance
standards. A copy of the quarterly evaluation summary sheet setting forth the City's
maintenance checklist is attached as Exhibit "C", and incorporated herein by this reference.
Licensee's obligation includes, without limitation, maintaining and operating the
Premises in a clean, safe, wholesome and sanitary condition free of trash, garbage or obstructions
of any kind and in compliance with any and all present and future laws, general rules or
regulations of any governmental authority now, or at any time during the entire term of this
Agreement or any renewals or extensions thereof or during any holdover period, in force,
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relating to sanitation or public health, safety or welfare, or for the protection of life, limb or
property; and Licensee shall at all times faithfully obey and comply with all laws, rules and
regulations applicable thereto. Licensee shall be responsible for maintenance of the mechanical
door unless the failure of the door is caused by environmental factors, the determination of which
is to be made by the Deputy Director of the Office of Business Development or his or her
designee. Licensee, at its sole cost and expense, shall remedy without delay any defective,
dangerous or unsanitary conditions) caused by Licensee or anyone related thereto. Licensee
shall maintain ADA access around the entire building. Licensee shall install and maintain grease
trap(s) or grease interceptor(s) in accordance with the City's requirements set forth in Chapter
14.56 of the Huntington Beach Municipal Code. On a bi-monthly basis. Licensee shall inspect,
service and maintain any outdoor drains to keep them free and clear of sand.
Licensee shall paint, stain or seal the Premises' exterior surfaces a minimum of every
three (3) years, unless City determines in its sole discretion that such work shall be done on a
more frequent basis. All exterior metal surfaces, except the roof, shall be painted with rust
resistant paint no less than once every other year. Any and all graffiti on the Premises shall be
removed by Licensee, at its sole cost and expense, within forty-eight (48) hours of Licensee
receiving notice thereof or of Licensee becoming aware of such graffiti. In addition, with or
without notice from City, Licensee shall, at its sole cost and expense, repair and/or replace any
broken glass within forty-eight (48) hours of its becoming broken, regardless of cause, except by
fault of City. Except as provided above for graffiti and broken glass. Licensee, at its sole cost
and expense and with or without notice from City, shall repair and/or replace all damage or
destruction to the Premises caused by act(s) of vandalism as soon as possible but in no event
later than fourteen days after the date such damage or destruction occurred. Licensee, at its sole
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cost and expense, shall repair and/or replace all other damage or destruction to the Premises,
regardless of cause, except by fault of City.
Licensee shall comply with all written notices served by City with regard to the care and
maintenance of the Premises. Any written notice hereunder shall specify the work to be done
and the period of time deemed to be reasonably necessary for completion of such work. Should
Licensee fail to commence making the necessary repairs within seven (7) days after receiving
such notice, or within twenty-four (24) hours of the glass becoming broken in the case of broken
glass, or fail to diligently proceed to complete the necessary repairs within the period of time
reasonably specified in the City's notice, or within forty-eight (48) hours of the glass becoming
broken in the case of broken glass, or within the forty-eight (48) hour time period for removing
graffiti, or within fourteen (14) days of the date that the vandalism damage or destruction
occurred, City shall proceed to cause the required work to be performed, and Licensee shall
promptly reimburse City for the cost of labor and materials thereof and pay City a penalty on
such costs at the penalty rate set forth in Section 10 above from the date the costs were incurred
by City to the date they are reimbursed to City by Licensee.
Licensee hereby expressly waives the right to make repairs at the expense of City and the
benefit, if any, of the provisions of Sections 1941 and 1942 of the California Civil Code relating
thereto.
Licensee shall complete all proposed and approved improvements referred to in Exhibit
"D" to this Agreement to the satisfaction of City no later than twelve (12) calendar months from
Agreement commencement date.
SECTION 25. LICENSE FEE CREDIT.
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A License Fee credit may be available for some or all of any improvements, repairs, or
maintenance performed by Licensee upon prior written approval by the Deputy Director of the
Office of Business Development or his or her designee. The terms of payment of any License
Fee credit will be determined by the Deputy Director of the Office of Business Development.
City in its sole discretion may decide to give Licensee a License Fee credit if Licensee
undertakes (1) any improvement, repair, or maintenance obligation of City under this
Agreement, or (2) any work City in its sole discretion deems necessary and appropriate. Prior to
Licensee undertaking any such work, City must agree in writing to the amount of and procedures
for the License Fee credit, the work to be done by Licensee, and the cost of such work.
SECTION 26. DAMAGE. DESTRUCTION OR NUISANCE.
Licensee shall not commit or permit the commission by others of any damage or
destruction of, on„ or to the Premises and/or Concession. Licensee shall not maintain, commit or
permit the maintenance or commission of any nuisance as defined in Section 3479 and/or
Section 3480 of the California Civil Code on the Premises; and Licensee shall not use or permit
the use of the Premises for any unlawful purpose.
SECTION 27. TAXES.
This Agreement may create a possessory interest in property, which is subject to taxation.
In the event that such possessory interest is created, Licensee agrees to be subject to the payment
of and to pay taxes levied on such interest, at its sole cost and expense. Licensee also agrees to
pay, at its sole cost and expense, before they become delinquent all other lawful taxes,
assessments or charges, which at any time may be levied by any governmental agency including,
without limitation, the State, County, City or any tax or assessment levying body upon any
interest in this Agreement, or any possessory right which Licensee may have in or to the
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Premises, by reason of Licensee's use or occupancy thereof or otherwise, as well as all taxes,
assessments, and charges on Trade Fixtures, personal property and trade inventory in, on, or
about the Premises. Upon request. Licensee shall promptly furnish to City satisfactory evidence
establishing such payment. Licensee shall comply with all laws, regulations and ordinances
regarding the collection of taxes due a government agency.
SECTION 28. PAYMENT OF OBLIGATIONS.
Licensee shall promptly pay, at its sole cost and expense, before they become delinquent,
any and all bills, debts, liabilities and obligations incurred by Licensee in connection with
Licensee's occupation and use of the Premises and/or operation of the Concession. Upon
request, Licensee shall promptly furnish to City satisfactory evidence establishing such payment.
SECTION 29. UTILITIES AND SERVICES
Licensee shall be responsible for the payment of all utility charges, including, without
limitation, gas, electricity, water, telephone service, cable TV service, and the furnishing of all
necessary refuse and garbage containers and the removal and disposal of all rubbish, refuse and
garbage resulting from the operation of the Premises and/or the Concession. All such rubbish,
refuse and garbage removed shall be disposed of in accordance with applicable laws and local
ordinances. All trash containers and/or trash bins shall be adequately screened and located to the
satisfaction of City. For the purposes of this Section, sewage disposal shall be construed as a
utility. All such charges shall be paid by Licensee directly to the provider of the service and
shall be paid as they become due and payable. Upon request, Licensee shall promptly furnish to
City satisfactory evidence establishing such payment. Licensee shall use good energy practices
as described in the State of California Flex Your Power Best Practice Guide.
SECTION 30. BUSINESS LICENSE.
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Licensee shall maintain a business license from City during the entire term of this
Agreement or any renewals or extensions thereof or during any holdover period.
SECTION 31. SIGNS. ADVERTISING AND APPROVAL OF NAME.
City shall have the right to approve in its sole discretion and at any time require Licensee
to change or remove signs, names, placards, decorations or advertising placed on, or inscribed,
painted or affixed upon the Premises. No outdoor sales are allowed by Licensee unless prior
written approval is obtained from the Deputy Director of the Office of Business Development or
his or her designee. All outdoor displays or banners must first be approved in writing by the
Deputy Director of the Office of Business Development or his or her designee. Should City
approve of any sign, name, placard, decoration or advertising. Licensee shall maintain the same
at all times during the entire term of this Agreement or any renewals or extensions thereof or
during any holdover period in good appearance and repair. All signs, names, placards,
decorations or advertising must comply with all requirements of any governmental authority with
jurisdiction.
SECTION 32. SECTION 32. NO ASSIGNING. SUBLEASING OR
ENCUMBERING.
(a) Prohibition of Assignment. The parties acknowledge that City is entering
into the Agreement in reliance upon the experience and abilities of Licensee and its
principals. Consequently, Licensee shall not voluntarily assign, encumber or otherwise
transfer its interest in the Agreement or in the Premises, or allow any other person or
entity (except Licensee's authorized representatives) to occupy or use all or any part of
the Premises without the prior written consent of City, which consent shall not be
unreasonably withheld. Provided, however, that City's consent shall not relieve Licensee
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from any and all of its obligations, liabilities, duties or responsibilities under this
Agreement. Any assignment, encumbrance, occupation or use, or other transfer without
such consent shall be voidable and, at City's sole discretion, shall constitute a Default of
this Agreement.
(b) Consent to Transfer. City's consent to any assignment, encumbrance,
occupation or use, on other transfer is subject to Licensee providing City with evidence
satisfactory to City that the proposed, assignee, encumbrancer, occupier or user, or other
transferee has suitable financial strength, experience and character for operation and
control of the Premises and the Concession and that the use of the Premises by the
proposed assignee, encumbrancer, occupier or user, or other transferee is consistent with
that specified herein, and is commercially reasonable. Any proposed assignee,
encumbrancer, occupier or user, or other transferee shall agree to abide by the terms and
conditions of the Agreement including, without limitation, all the obligations, liabilities,
duties and responsibilities of Licensee, and other conditions imposed upon it pursuant to
law. An approval by City to one assignment, encumbrance, occupation or use, or other
transfer shall not be deemed to be an approval to any other assignment, encumbrance,
occupation or use, or other transfer.
(c) Voluntary assignment defined. Except as otherwise expressly provided
herein, any dissolution, merger, consolidation or reorganization of Licensee, or the sale
or other transfer resulting in a transfer of a controlling percentage of the capital stock of
Licensee (other than a transfer by will, devise, bequest, intestate succession, a transfer to
or between the family members of Licensee, or a transfer to or between one or more
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trusts for the benefit of Licensee and/or Licensee's family members, where applicable)
shall be deemed a voluntary assignment.
(d) Exceptions. Notwithstanding the foregoing paragraphs or anything to the
contrary contained herein. City's consent shall not be required for an assignment or
subleasing to an Affiliate, Subsidiary or Successor of Licensee (for purposes hereof, an
"Affiliate," a "Subsidiary" and a "Successor" of Licensee are defined as follows: (a) an
"Affiliate" is any corporation which directly or indirectly controls or is controlled or is
under common control with Licensee (for this purpose, "control" shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such corporation, whether through the ownership of voting
securities or by contract or otherwise), (b) a "Subsidiary" shall mean any corporation or
partnership not less than twenty- five percent (25%) of whose outstanding stock shall, at
the time, be owned directly or indirectly by Licensee and which is at least as
creditworthy as Licensee, and (c) a "Successor" shall mean a corporation or partnership
in which or with which Licensee is merged or consolidated, in accordance with
applicable statutory provisions for merger or consolidation of corporations, or a
corporation or partnership acquiring a substantial portion of the property and assets of
Licensee.
SECTION 33. TERMS BINDING ON SUCCESSORS.
All the terms, covenants and conditions of this Agreement shall inure to the benefit of
and be binding upon the parties and their successors, including, without limitation, their
assignees, encumbrancers, occupiers or users, or other transferees. The provisions of this
Section shall not be deemed as a (1) waiver of any of the prohibitions and conditions against
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assignments, encumbrances, occupations or uses, or other transfers hereinbefore set forth, or
(2) City's consent thereto. If more than one Licensee is a party to this Agreement, the
obligations of the Licensees shall be joint and several. Even if City's consent is not required.
Licensee shall immediately provide City with written notice of any, assignment, encumbrance,
occupation or use, or other transfer.
SECTION 34. DEFAULT
The occurrence of any one or more of the following events shall constitute a material
default and breach ("Default") of this Agreement by Licensee:
(a) Licensee's failure to make any payment of the License Fee or other
payment required to be made by Licensee at the time required for payment under this
Agreement.
(b) Licensee's failure to obtain or maintain the insurances and/or the security
deposit as required under this Agreement.
(c) Licensee's vacating or abandonment of the Premises during the entire
term of this Agreement or any renewals or extensions thereof or during any holdover
period, with the understanding that Licensee's failure to operate the Concession for the
minimum periods referred to in Section 16 shall be deemed an abandonment of the
Premises for purposes of this Section 34.
•(d) Licensee's violation of Section 17 (Indemnification, Defense and Hold
Harmless Agreement), Section 32 (No Assigning, Subleasing or Encumbering), Section
45 (Hazardous Substances), Section 46 (Nondiscrimination), Section 47 (Sale of
Alcoholic Beverages and Entertainment Prohibited), Section 60 (Conflict of Interest) or
Section 62 (Compliance with Laws).
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(e) The insolvency of Licensee as evidenced by a receiver being appointed to
take possession of all or substantially all of Licensee's assets located at or on the
Premises or of Licensee's interest in this Agreement, or the making by Licensee of a
general arrangement or assignment for the benefit of creditors, or Licensee's filing a
petition in bankruptcy, whether voluntary or involuntary, or the attachment, execution or
the judicial seizure of substantially all of Licensee's assets located at or on the Premises
or of Licensee's interest in the Agreement.
(0 Licensee's failure to observe or perform any other term, covenant,
obligation, duty, responsibility of condition of this Agreement to be observed or
performed by Licensee when such failure shall continue for a period of thirty (30) days
after City's giving written notice to Licensee, or such earlier period if specifically set
forth in this Agreement; however, if the nature of such failure is such that more than
thirty (30) days are reasonably required for its cure, then Licensee shall not be deemed to
be in Default if Licensee notifies City of the length of the additional time required to cure
and receives City's written approval of the additional time required, which approval will
not be unreasonably withheld, and commences such cure within such thirty (30) day
period and diligently proceeds with such cure to completion during such additional time
period approved by City.
SECTION 35. REMEDIES.
(a) Cumulative Nature of Remedies. In the event of any Default by Licensee,
City shall have the remedies described in this Section in addition to all other rights and
remedies provided by law or equity, to which City may resort cumulatively or in the
alternative:
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(1) Reentry without Termination. City may at City's sole discretion
reenter the Premises, and, without terminating the Agreement, at any time and
from time to time re-let the Premises or any part or parts of them for the account
and in the name of Licensee or otherwise. Any re-letting may be for the
remainder of the term or for a longer or shorter period. City may in City's sole
discretion eject all persons or eject some and not others or eject none. In addition.
City may in its sole discretion remove some or all of the Trade Fixtures, personal
property and trade inventory from the Premises. City may store such removed
Trade Fixtures, personal property and trade inventory in a public warehouse or
other location at the sole cost, expense and risk of Licensee, and for the account
of and in the name of Licensee. City shall apply all rents from re-letting as
follows: first, to the payment of reasonable expenses (including brokers'
commissions) paid or incurred by or on behalf of City in recovering possession,
placing the Premises in good condition, and preparing or altering the Premises for
re-letting; second, to the reasonable expense of securing new subtenants; third, to
the fulfillment of Licensee's covenants to the end of the term. City may execute
any Agreements or subleases made under this provision either in City's name or
in Licensee's name and City shall be entitled to all license fees and rents from the
use, operation or occupancy of the Premises. Licensee shall nevertheless pay to
City on the dates specified in this Agreement the equivalent of all sums required
of Licensee under this Agreement, plus City's expenses, less the proceeds of any
re-letting or attornment.
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(2) Termination. In the event of a Default by Licensee, City may at
City's sole discretion terminate this Agreement by giving Licensee written notice
of termination. In the event City terminates this Agreement, City may recover
possession of the Premises (which Licensee shall immediately surrender and
vacate upon demand) and remove all persons therefrom, and Licensee shall
comply with, without limitation. Sections 54 and 55 below. City also shall be
entitled to recover as damages all of the following:
(A) The worth at the time of the award of any unpaid License
Fees or other charges which have been earned at the time of termination;
(B) The worth at the time of the award of the amount by which
the unpaid License Fees (each month's License Fee would be calculated as
the average License Fee for that same month in the preceding years, or if
Licensee did own/operate the Concession in the preceding years, then each
month's License Fee would be calculated as the average of all months
Licensee owned/operated the Concession) and other charges which would
have been earned after termination until the time of the award exceeds the
amount of the loss of such License Fee and other charges that Licensee
proves could have been reasonably avoided;
(C) The worth at the time of the award of the amount by which
the unpaid License Fee (each month's License Fee would be calculated as
the average License Fee for that same month in the preceding years, or if
Licensee did not own/operate the Concession in the preceding years, then
each month's License Fee would be calculated as the average of all
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months Licensee owned/operated the Concession) and other charges for
the balance of the term after the time of the award exceeds the amount of
the loss of such License Fee and other charges that Licensee proves could
have been reasonably avoided;
(D) Any other amount necessary to compensate City for the ,
detriment proximately caused by Licensee's failure to perform its
obligations, liabilities, duties or responsibilities under this Agreement; and
(E) At City's sole discretion, such other amounts in addition to
or in lieu of the foregoing as may be permitted from time to time by
applicable California law.
As used in Sections 35(a)(2)(A) and (B) above, the "worth at the time of the award" shall
be computed by allowing interest at the rate of twelve percent (12%) per annum. As used in
Section 35(a)(2)(C) above, the "worth at the time of the award" shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of the award, plus one percent (1%). The amount recoverable by City pursuant to
Section 35(a)(2)(D) above shall include, without limitation, any costs or expenses incurred by
City in maintaining or preserving the Premises after such Default.
(3 ) Use of Personal Property. City may at City's sole discretion use
the Trade. Fixtures, personnel property and/or trade inventory located on, about
or appurtenant to the Premises without compensation and without liability for use
or damage, or store them in a public warehouse or other location at the sole cost,
expense and risk of Licensee, and for the account of and in the name of Licensee.
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(b) Election of Remedy. The election of one remedy for any one item shall
not foreclose an election of any other remedy for another item or for the same item at a
later time.
(c) City's Right to Cure Licensee's Default. Upon continuance of any
Default, City may in its sole discretion, but is not obligated to, cure such Default at
Licensee's sole cost and expense. If City at any time, by reason of such Default by
Licensee, pays any sum or does any act, the sum paid by City plus the reasonable cost of
performing such act, together with a penalty thereon at the penalty rate set forth in
Section 10 above from the date the costs were incurred or the act performed by City to
the date they are reimbursed to City by Licensee, shall be due as an additional License
Fee not later than five (5) days after service of a written demand therefor on Licensee,
including reasonably detailed documentation of the amount owed. No such payment or
act shall constitute a waiver of Default or of any remedy for Default or render City liable
for any loss or damage resulting from any such act.
(d) Waiver of Rights. Licensee hereby waives any right of redemption
or relief from forfeiture under California Code of Civil Procedure Sections 1174
or 1179, or under any other present or future law, in the event Licensee is evicted
or City takes possession of the Premises by reason of any Default by Licensee
hereunder.
(e) Other Rights of City. No act of City, including, without limitation. City's
entry on the Premises, efforts to re-let the Premises, or maintenance of the Premises, shall
be construed as an election to terminate this Agreement unless a written notice of such
intention is given to Licensee by City or unless the termination thereof is decreed by a
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court of competent jurisdiction. Notwithstanding if City elects to continue the
Agreement in full force and effect after a Default by Licensee and to re-let the Premises,
City may at any time after such re-letting elect to terminate this Agreement for any such
Default.
SECTION 36. CUMULATIVE REMEDIES.
The remedies given to City in this Agreement shall not be exclusive but shall be
cumulative and in addition to all remedies now or hereafter allowed by law or elsewhere
provided in this Agreement. City shall have the right to exercise any other right or remedy
which City may have at law or in equity including, without limitation,. City's rights under the
unlawful detainer laws, if applicable.
SECTION 37. WAIVER OF DEFAULT.
The waiver by City of any Default by Licensee of any of the provisions of this
Agreement shall not constitute a continuing waiver or a waiver of any subsequent Default by
Licensee either of the same or another provision of this Agreement.
SECTION 38. CITY'S DEFAULTS/LICENSEE'S REMEDY.
In the event City fails to perform any material obligation of City under this Agreement
within sixty (60) days after receiving written notice from Licensee specifying the nature of such
default, or, if the nature of City's obligation is such that more than sixty (60) days are required
for its performance, if City fails to commence such performance within such sixty (60) day
period and thereafter diligently prosecute the same to completion, then City shall be in default of
this obligation. If City's default materially interferes with Licensee's use of the Premises for its
intended purpose, Licensee shall have the option to terminate this Agreement by giving City at
least sixty (60) days' written notice of its intent to terminate. In such a situation. Licensee must
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still comply with all of its obligations, liabilities, duties and responsibilities under this
Agreement, including, without limitation, paying any Rent due up to the time of termination and
surrendering the Premises pursuant to Sections 54 and 55 below.
SECTION 39. CONSENT.
When City's consent/approval is required under this Agreement, its consent/approval for
one transaction or event shall not be deemed to be a consent/approval to any subsequent
occurrence of the same or any other transaction or event.
SECTION 40. HOLDOVER.
Should Licensee hold over and continue in possession of the Premises after expiration or
termination of this Agreement, with or without the express prior written consent of City,
Licensee's continued occupancy of the Premises shall constitute a month-to-month License
Agreement, subject to all the terms and conditions of this Agreement, at a monthly License Fee
of one hundred ten percent (110%) of the previous calendar year's annual License Fee divided
by twelve (12) (or the average monthly License Fee for all months Licensee owned/operated the
Concession if Licensee has owned/operated the Concession for less than one (1) year) or that
month's actual License Fee, whichever is greater, and shall not constitute a renewal or extension
of the Agreement term.
SECTION 41. WAIVER OF CLAIMS.
Licensee hereby waives any claim against City, its officers, elected or appointed officials,
employees, agents or volunteers for damage or loss caused by any suit or proceeding directly or
indirectly attacking the validity of this Agreement, or any part thereof, or caused by any
judgment or award in any suit or proceeding declaring this Agreement null, void or voidable, or
delaying the Agreement or any part thereof from being carried out.
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SECTION 42. INSPECTION OF PREMISES.
Upon at least twenty-four (24) hours advance written, verbal or electronic notice given by
City to Licensee, Licensee shall permit City or City's agents, representatives or employees to
enter the Premises at all reasonable times for the purpose of inspecting, investigating and
surveying the Premises to determine whether Licensee is complying with the terms of this
Agreement and for the purpose of doing other lawful acts that may be necessary to protect City's
interest in the Premises or to perform City's duties under this Agreement. City shall make
quarterly physical inspections of the Premises and may direct that interior maintenance or
outdoor painting repairs are to be performed where such work is necessary to protect the
Premises or to provide a clean, attractive and well-maintained premise. Licensee shall perform
those maintenance and repairs which they are responsible for within thirty (30) calendar days.
City also shall have the right in its sole discretion to do any and all work of any nature necessary
for the preservation, maintenance and operation of property owned, controlled or occupied by
City. Licensee shall be given reasonable notice when such work becomes necessary, and
Licensee shall adjust the operation of the Concession in such a manner that City may proceed
expeditiously.
SECTION 43. RESERVED.
SECTION 44. PHOTOGRAPHY.
Licensee acknowledges and agrees that City may grant permits to third parties engaged in
the production of still and motion pictures and related activities to take photographs or videos of
or on the Premises when such permission shall not interfere with the primary business of
Licensee, all without providing Licensee with notice or requiring consent by Licensee.
SECTION 45. HAZARDOUS SUBSTANCES.
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Licensee represents and warrants that its use or occupation of the Premises shall not
generate any Hazardous Substance (as defined below in this Section), and it shall not store or
dispose on the Premises nor transport to or over the Premises any Hazardous Substance during
the entire Term of this Agreement or any renewals or extensions thereof or during any holdover
period. The foregoing restrictions shall not be deemed to restrict or prohibit the use by Licensee
of ordinary cleaning products as customarily used in Licensee's ordinary course of business at
the Concession, provided that Licensee complies with all provisions of law as to the use, storage
and disposal of such products. Licensee further agrees to clean up and remediate any such
Hazardous Substance on the Premises, and agrees to protect, defend, indemnify and hold
harmless City, its officers, elected or appointed officials, employees, agents and volunteers from
and against any and all claims, damages, losses, expenses, judgments, demands and defense costs
(including, without limitation, costs and fees of litigation (including arbitration) of every nature
or liability of any kind or nature) arising out of or in connection with any such Hazardous
Substance and any damage, loss, or expense or liability resulting from any such Hazardous
Substance including, without limitation, all attorney's fees, costs and penalties incurred as a
result thereof except any release caused by the sole negligence or willful misconduct of City.
Licensee will conduct all defense at its sole cost and expense and City shall approve selection of
Licensee's counsel. This indemnity shall apply to all claims and liability regardless of whether
any insurance policies are applicable. The policy limits do not act as limitation upon the amount
of indemnification to be provided by Licensee. "Hazardous Substance" shall be interpreted
broadly to mean any substance or material defined or designated as a hazardous or toxic waste,
hazardous or toxic material, hazardous or toxic or radioactive substance, or other similar term, by
any Federal, State or local environmental law, regulation or rule presently in effect or
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promulgated in the future, as such law, regulation or rule may be amended from time to time;
and it shall be interpreted to include, without limitation, any substance which after release into
the environment will or may reasonably be anticipated to cause sickness, death or disease.
SECTION 46. NONDISCRIMINATION.
Licensee and its employees shall not discriminate because of race, religion, color,
ancestry, sex, age, national origin or physical handicap against any person by refusing to furnish
such person any accommodation, facility, rental, service or privilege offered to or enjoyed by the
general public. Nor shall Licensee or its employees publicize the accommodation, facilities,
rentals, services or privileges in any manner that would directly or inferentially reflect upon or
question the acceptability of the patronage of any person because of race, religion, color,
ancestry, sex, age, national origin or physical handicap.
In the performance of this Agreement, Licensee shall not discriminate against any
employee or applicant for employment, because of race, religion, color, ancestry, sex, age,
national origin or physical handicap. Licensee shall take affirmative action to ensure that
applicants are employed and that employees are treated during employment, without regard to
their race, religion, color, ancestry, sex, age, national origin or physical handicap. Such action
shall include, without limitation, the following: employment, upgrading, demotion or transfer;
recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of
compensation; and selection for training, including, without limitation, apprenticeship. Licensee
shall post in conspicuous places, available to all employees and applicants for employment,
notices setting forth the provisions of this Section.
Subject to the privacy rights of its employees and applicable provisions of law, Licensee
shall permit access to its records of employment, employment advertisements, application forms,
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and other pertinent data and records by City, the State Fair Employment Practices Commission
or any other agency with jurisdiction over these matters, for the purpose of investigation to
ascertain compliance with this Section.
City may determine a violation of this Section to have occurred upon receipt of a final
judgment having that effect from a court in an action to which Licensee was a party, or upon
receipt of a written notice from the State Fair Employment Practices Commission or other
government agency with jurisdiction over these matters that it has investigated and determined
that Licensee has violated the Fair Employment Practices Act or other applicable discrimination
law and has issued an order which has become final, or obtained an injunction. In the event of
violation of this Section, City shall have the right to terminate this Agreement, and any loss of
revenue sustained by City by reason thereof shall be borne and paid for by Licensee, at its sole
cost and expense.
SECTION 47. SALE OF ALCOHOLIC BEVERAGES AND ENTERTAINMENT
PROHIBITED.
Notwithstanding anything to the contrary, the sale or provision of alcoholic beverages
and/or live entertainment in, on, or from the Premises is expressly forbidden, unless expressly
permitted in writing by City in advance. For any proposed sale or provision of alcoholic
beverages. Licensee must first obtain written City approval prior to submitting any request for
approval to the Alcohol Beverage Commission.
SECTION 48. LIENS.
Licensee shall keep the Premises free and clear from any and all liens, including, without
limitation, mechanics' or materialmens' liens, claims and demands for work performed,
materials famished, or operations conducted on or about the Premises or by reason of any use or
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occupancy by Licensee, or any person claiming under Licensee. When applicable, Licensee
shall cause a notice of non-responsibility to be posted and recorded pursuant to California Civil
Code Section 3094.
SECTION 49. INSTALLATION AND REMOVAL OF TRADE FIXTURES.
Licensee shall have the right during the entire term of this Agreement or any renewals or
extensions thereof, at Licensee's sole cost and expense, to install or affix in, to, or on the
Premises any machinery, equipment and other objects (the "Trade Fixtures"), for use in
Licensee's trade or business as Licensee may deem advisable. Any and all such Trade Fixtures
that can be removed without structural damage to the Premises shall, subject to Section 55
below, remain the property of Licensee and may be removed by Licensee at any time prior to the
expiration or termination of this Agreement, provided Licensee repairs any damage caused by
the removal. Upon execution of this Agreement and every anniversary, Licensee shall provide
City with a list of all Trade Fixtures on the Premises.
SECTION 50. DESTRUCTION.
Should the Premises be partially destroyed, this Agreement shall continue in full force
and effect, and Licensee, at Licensee's sole cost and expense, shall complete the work of
repairing and restoring the Premises to their prior condition providing such work can be
accomplished under all applicable governmental laws and regulations within one hundred eighty
(180) days. Notwithstanding the foregoing, should the damage to the Premises be substantial
enough such that Licensee determines, in its reasonable discretion, that it will be unable to
feasibly and economically repair and restore the Premises and still realize a reasonable return on
its investment over the remaining portion of the Term, Licensee shall have the right, within
ninety (90) days of the occurrence of the casualty loss, to terminate this Agreement by delivery
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of written notice of termination to the City, together with an assignment to City of Licensee's
rights with respect to the disposition and use of any property insurance proceeds (excluding such
proceeds for Trade Fixtures, personal property whether or not owned or leased by Licensee and
trade inventory, but only to the extent that the insurance proceeds specifically cover those items).
In addition, should the Premises be so far destroyed that in City's reasonable judgment they
cannot be repaired or restored to their former condition within one hundred eighty (180) days,
City shall have the right to give Licensee notice of such determination in writing and each party
may, in that party's sole discretion:
(a) Continue this Agreement in full force and effect in which case, subject to
its termination rights set forth above, Licensee shall repair and restore, at Licensee's sole
cost and expense, the Premises to their former condition; or
(b) Terminate this Agreement by giving the other party thirty (30) days'
written notice of such termination within sixty (60) days after the date that City gives
Licensee notice that the Premises cannot be repaired or restored to their former condition
within one hundred eighty (180) days. In the event that either party elects to terminate
this Agreement, the entire amount of any insurance proceeds (excluding such proceeds
for Trade Fixtures, personal property whether or not owned or leased by Licensee and
trade inventory, but only to the extent that the insurance proceeds specifically cover those
items) shall be paid to City. The proceeds of any such insurance payable to City may be
used, in the sole discretion of City, for rebuilding or repair as necessary to restore the
Premises or for any other such purpose(s) as City sees fit. In addition, if Licensee elects
to terminate the Agreement, Licensee must still comply with all of its obligations,
liabilities, duties and responsibilities under the Agreement, including, without limitation,
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paying any Rent due up to the time of termination and surrendering the Premises,
pursuant to Sections 55 and 56 below.
In the event of the damage or destruction of Improvements, Trade Fixtures and/or
personal property located on the Premises not giving rise to a termination of this Agreement,
Licensee shall, at its sole cost and expense, replace and repair the same as soon as reasonably
possible to permit the prompt continuation of Licensee's business at the Premises.
SECTION 51. NO ABATEMENT OF LICENSE FEE DURING REPAIR WORK.
The License Fee shall not be abated for the time Licensee is prevented from using the
whole or a portion of the Premises. In addition. Licensee shall not be excused from the payment
of taxes, insurance or any other obligations for the time Licensee is prevented from using the
whole or a portion of the Premises.
SECTION 52. EMINENT DOMAIN.
If, during the term of this Agreement or any renewals or extensions thereof or during any
holdover period, City's real property (whether held by City in fee simple, an easement interest or
otherwise) and/or the Premises is taken in eminent domain, the entire award (that is, all forms) of
compensation, other than as provided herein, shall belong to and be paid to City. In the event of
condemnation. Licensee shall be entitled to an award of only the following forms of
compensation, if any, from the condemning authority: compensation for loss of business
goodwill; compensation for the value of any of Licensee's Trade Fixtures; compensation for the
value of any of Licensee's personal property; compensation for the value of any of Licensee's
trade inventory; and compensation for relocation benefits as authorized by law. All other forms
of compensation, such as, for example, but not by way of limitation, any bonus value of
Licensee's interest in this Agreement, shall belong to and be paid to City. In the event of
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condemnation, unless Licensee is allowed by the condemning authority to continue its operations
on the Premises, the Agreement shall terminate on the earliest of the following dates: the date the
condemning authority obtains a prejudgment order for possession; the date title to the Premises
vests in the condemning authority; or the date when Licensee is required by the condemning
authority to cease its operations.
SECTION 53. RELOCATION AND ASSISTANCE. BUSINESS GOODWILL AND
BONUS VALUE.
Upon expiration or termination of this Agreement for any reason, but excluding eminent
domain, Licensee shall not be entitled to any relocation rights or benefits, business goodwill or
bonus value attributable to this Agreement, and Licensee expressly waives any claim to the
same.
SECTION 54. QUITCLAIM DEED.
Upon expiration or termination of this Agreement as provided for herein. Licensee shall
execute and deliver to City within thirty (30) days thereof, a good and sufficient quitclaim deed
to the rights and interests of Licensee in the Premises and the Agreement. Should Licensee fail
or refuse to deliver to City this quitclaim deed, City may record in the Orange County Recorder's
Office a written notice reciting the failure of Licensee to execute and deliver this quitclaim deed.
The date of recordation of this notice by City shall be conclusive evidence against Licensee and
all persons claiming under Licensee of the expiration or termination of this Agreement and any
rights or interests of Licensee in the Premises and/or the Agreement. Licensee also agrees to
execute, acknowledge, and deliver to City any other instrument requested by City as necessary to
perfect City's right, title and interest to the Premises.
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SECTION 55. RESTORATION AND SURRENDER OF PREMISES/TITLE TO
IMPROVEMENTS TO THE BUILDING.
On expiration or termination of this Agreement, Licensee shall, without compensation to
Licensee, promptly surrender and deliver the Premises to City in as good condition as such were
at the commencement date of this Agreement, reasonable wear and tear excepted. Licensee also
shall, without compensation to Licensee, surrender all Improvements to the building to City in
good condition and repair, ordinary wear and tear excepted, free and clear of all liens and
encumbrances. Licensee also shall remove all Trade Fixtures, personal property and trade
inventory. City may in its sole discretion accept all or any portion of the Premises, as then
improved with Improvements and no sum whatsoever shall be paid to Licensee or any other
person; or City may require Licensee to remove all or any portion of such Improvements to the
building, at Licensee's own risk and cost and expense; or City may itself remove or have
removed all or any portion of such Improvements to the building, at Licensee's own risk and cost
and expense. If required by City to do so, in removing any such Improvements to the building,
Licensee shall restore the Premises as nearly as possible to the conditions existing prior to their
installation or construction. All such removal and restoration shall be to the satisfaction of City
and shall be completed within thirty (30) days of the expiration or termination of this Agreement;
provided, however, that Licensee shall be considered a holdover occupant (pursuant to
Section 40 above) after expiration or termination of the Agreement until the time Licensee
completes this removal and restoration work, including, without limitation, the removal of any
Trade Fixtures, personal property and trade inventory left on the Premises. In addition, any
Trade Fixtures, personal property or trade inventory left on the Premises after the expiration of
this 30-day period, regardless of cause, shall be deemed abandoned by Licensee. In City's sole
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discretion, it may choose to do one or more of the following: (1) take any or all of such Trade
Fixtures, personal property and trade inventory as City property; (2) store any or all of such
Trade Fixtures, personal property and trade inventory in a public warehouse or other location at
the sole cost, expense and risk of Licensee, and for the account and in the name of Licensee; or
(3) dispose of any or all of such Trade Fixtures, personal property and trade inventory without
any liability to Licensee. In addition, Licensee's indemnification, hold harmless and defense
obligations set forth in this Agreement shall apply to such Trade Fixtures, personal property
and/or trade inventory, and to City's actions with respect thereto.
SECTION 56. FORCE MAJEURE - UNAVOIDABLE DELAYS.
Should the performance of any act required by this Agreement to be performed by either
City or Licensee be prevented or delayed by reason of an act of God, strike, lockout, labor
troubles, inability to secure materials, restrictive governmental laws or regulations, or any other
cause except financial inability not the fault of the party required to perform the act, the time for
performance of the act shall be extended for a period equivalent to the period of delay and
performance of the act during the period of delay shall be excused. Provided, however, that
nothing contained in this Section shall excuse the prompt payment of the License Fee or other
consideration by Licensee as required by this Agreement or the performance of any act rendered
difficult solely because of the financial condition of the party, City or Licensee, required to
perform the act.
SECTION 57. CITY'S OPTION TO CLOSE THE PREMISES.
City may close the Premises without liability to Licensee therefor at any time that City in
its reasonable discretion deems such action necessary for the protection of life, limb or property,
or for imminent and serious public health or safety reasons; provided, that if the reason for such a
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closure is a City default of its obligations under this Agreement nothing in this Section 57 is
intended to release City from liability therefor or constitute a waiver of Licensee's rights with
respect thereto. Except in the event of an unanticipated emergency, City shall the maximum
amount of prior notice to Licensee of any such closure that is reasonably practicable under the
circumstances.
SECTION 58. DELIVERIES OF SUPPLIES.
The Deputy Director of the Office of Business Development of City may establish the
days and times deliveries of supplies may be made and advise Licensee in writing thereof
SECTION 59. EMPLOYEE PARKING.
All employee parking shall comply with Huntington Beach Municipal Code Section
13.08.290(d) and (g). City shall provide up to two (2) annual parking passes to Licensee.
SECTION 60. CONFLICT OF INTEREST.
Licensee warrants and covenants that no official or employee of City, nor any business
entity in which an official or employee of City is interested, (1) has been employed or retained
by Licensee to solicit or aid in the procuring of this Agreement; or (2) shall be employed by
Licensee in the performance of this Agreement without the immediate written divulgence of such
fact to City. In the event City determines that the employment of any such official, employee or
business entity is not compatible with such official's or employee's duties as an official or
employee of City, Licensee, upon request of City, shall terminate such employment immediately.
For breaches or violation of this Section, City shall have the right both to terminate this
Agreement without liability and, in its discretion, recover the Ml amount of any such
compensation paid to such official, employee or business entity. No official or employee of City
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shall have any financial interest in this Agreement in violation of the applicable provisions of the
California Government Code.
SECTION 61. NOTICE.
Unless specifically providing for verbal or electronic notice, all notices, certificates, or
other communications required to be given hereunder shall be in writing and made in the
following manner, and shall be sufficiently given and deemed received when (a) personally
delivered; or (b) three (3) business days after being sent via United States certified mail - return
receipt requested; or
(a) one (1) business day after being sent by reputable overnight courier, in
each, case to the addresses specified below; provided that City and Licensee, by notice
given hereunder, may designate different addresses to which subsequent notices,
certificates or other communications will be sent:
CITY:
City of Huntington Beach
ATTN: Deputy Director of the
Office of Business Development
P.O. Box 190
Huntington Beach, CA 92648
LICENSEE:
PCH Beach Resort LLC
c/o Hyatt Regency Huntington Beach Resort
and Spa
21500 Pacific Coast Highway
Huntington Beach, CA 92648
Attention: General Manager
With a Copy to:
The Mayer Corporation
8951 Research Drive
Irvine, CA 92618
Attention: RJ Mayer, President
SECTION 62. COMPLIANCE WITH LAWS.
Licensee, at its sole cost and expense, shall comply with all statutes, ordinances,
regulations and requirements of all governmental entities, including, without limitation. Federal,
State, county or municipal, relating to Licensee's use and occupancy of the Premises and/or
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operation of the Concession whether such statutes, ordinances, regulations and requirements be
now in force or hereinafter enacted. This Agreement is expressly subject to the laws, regulations
and policies of City. Licensee shall deliver to City a copy of any notice from any governmental
entity received by Licensee regarding any alleged violation of law regarding the Agreement,
Premises or the Concession or from any person allegedly entitled to give notice under any
conditions, covenants, or restrictions binding or affecting the Premises. The final non-appealable
judgment of any court of competent jurisdiction, or the admission by Licensee in a proceeding
brought against Licensee by any government entity, that Licensee has violated any such statute,
ordinance, regulation or requirement shall be conclusive as between City and Licensee and shall
be grounds for termination of this Agreement by City.
SECTION 63. INTERPRETATION OF THIS AGREEMENT.
The language of all parts of this Agreement shall in all cases be construed as a whole,
according to its fair meaning, and not strictly for or against any of the parties. If any provision of
this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable,
void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and
provisions of this Agreement. No covenant or provision shall be deemed dependent upon any
other unless so expressly provided here. As used in this Agreement, the masculine or neuter
gender and singular or plural number shall be deemed to include the other whenever the context
so indicates or requires. Nothing contained herein shall be construed so as to require the
commission of any act contrary to law, and wherever there is any conflict between any provision
contained herein and any present or future statute, law, ordinance or regulation contrary to which
the parties have no right to contract, then the latter shall prevail, and the provision of this
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Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to
bring it within the requirements of the law.
SECTION 64. SURVIVAL.
Terms and conditions of this Agreement, which by their sense and context survive the
expiration or termination of this Agreement, shall so survive.
SECTION 65. MODIFICATION.
No waiver or modification of any language in this Agreement shall be valid unless in
writing and duly executed by both parties.
SECTION 66. SECTION HEADINGS.
The titles, captions, section, paragraph and subject headings, and descriptive phrases at
the beginning of the various sections in this Agreement are merely descriptive and are included
solely for convenience of reference only and are not representative of matters included or
excluded from such provisions, and do not interpret, define, limit or describe, or construe the
intent of the parties or affect the construction or interpretation of any provision of this
Agreement.
SECTION 67. BROKERS.
Each party warrants to and for the benefit of the other that it has had no dealings with any
real estate broker or other agent (attorneys excepted) in connection with the negotiation or
making of this Agreement.
SECTION 68. INDEPENDENT CONTRACTOR.
Licensee is, and shall be, acting at all times in the performance of this Agreement as an
independent contractor herein and not as an employee of City. Licensee shall secure at its own
cost and expense, and be responsible for any and all payment of all taxes, social security, state
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disability insurance compensation, unemployment compensation and other payroll deductions for
Licensee and its officers, agents and employees and all business licenses, if any, in connection
with the Agreement and/or any services to be performed hereunder.
SECTION 69. ATTORNEY'S FEES.
In the event suit is brought by either party to construe, interpret and/or enforce the terms
and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its
own attorney's fees, such that the prevailing party shall not be entitled to recover its attorney's
fees from the non-prevailing party.
SECTION 70. LEGAL SERVICES SUBCONTRACTING PROHIBITED.
Licensee and City agree that City is not liable for payment of any subcontractor work
involving legal services, and that such legal services are expressly outside the scope of services
contemplated hereunder. Licensee understands that pursuant to Huntington Beach City Charter
Section 309, the City Attorney is the exclusive legal counsel for City; and City shall not be liable
for payment of any legal services expenses incurred by Licensee.
SECTION 71. GOVERNING LAW.
This Agreement shall be governed and construed in accordance with the laws of the State
of California.
SECTION 72. DUPLICATE ORIGINAL.
The original of this Agreement and one or more copies hereto have been prepared and
signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the
date of its execution and delivery, be deemed an original. Each duplicate original shall be
deemed an original instrument as against any party who signed it.
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SECTION 73. ENTIRETY.
The parties acknowledge and agree that they are entering into this Agreement freely and
voluntarily following extensive arm's length negotiations, and that each has had the opportunity
to consult with legal counsel prior to executing this Agreement. The parties also acknowledge
and agree that no representations, inducements, promises, agreements or warranties, oral or
otherwise, have been made by that party, or anyone acting on that party's behalf, which are not
embodied in this Agreement, and that that party has not executed this Agreement in reliance on
any representation, inducement, promise, agreement, warranty, fact or circumstance not
expressly set forth in this Agreement. The Agreement, and the attached exhibits, contain the
entire agreement between the parties respecting the subject matter of this Agreement, the
Premises, the leasing of the Premises to Licensee, or the Agreement term created under this
Agreement and supersede all prior understandings and agreements, whether oral or in writing
between the parties respecting the subject matter hereof.
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-50- 128
By:
ITS: (circle one) Chai
Vice President
_Reputy fkrector of the Office of
Busin-ns4Development
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by and through their authorized officers the day, month and year first above written. Each
undersigned represents and warrants that its signature hereinbelow has the power, authority and
right to bind their respective parties to each of the terms of this Agreement, and shall indemnify
CITY fully for any injuries or damages to CITY in the event that such authority or power is not,
in fact, held by the signatory or is withdrawn.
LICENSEE CITY OF HUNTINGTON BEACH, a
municipal corporation of the
State.of California
AND
By: g5. irtlaYer
(print name)
ITS: (circle one) Secretary/Chief Financial
Officer/Asst. Secretary - Trearsurer
INITIATED AND APPROVED
RLS 7/5/16/16-5331/139358/DO
-5 1- 129
EXHIBIT "A"
DEPICTION OF THE PREMISES
[On following page]
RLS 7/5/16/16-5331/139358/DO
-52- 130
131
EXHIBIT "B"
MONTHLY LICENSE FEE SCHEDULE:
Monthly Base License Fee: Begins at June 1 2017
Description Amount
Monthly Base License Fee* $1,000.00
* Subject to fixed 2% annual increase.
Percentage License Fee: Begins 12 Months from
commencement date of Agreement
Season
Percentage of
Gross Sales
Low Season:
(Jan., Feb., Nov., Dec.) 5%
Mid Season:
(Mar., Apr., Oct.) 10%
Peak Season:
(May, June, July, Aug., Sept.) 12%
MONTHLY LICENSE FEE CALCULATION EXAMPLE:
Assumptions: Minimum Base License Fee of $1,000 per month; Gross Sales of $5,500
Monthly License Fee — Nov. (Low Season)
MONTHLY BASE LICENSE
FEE $ 1,000.00
Percentage License Fee — Nov. (Low Season)
5% x $5,500.00 $ 275.00
PERCENTAGE LICENSE FEE $ 275.00
MONTHLY BASE LICENSE
FEE
PERCENTAGE LICENSE FEE
MONTHLY LICENSE FEE
$ 1,000.00
$ 275.00
$ 1,275.00
112/022064-0004
10085202 3 a01/30/17 EXHIBIT "B" 132
EXHIBIT "C"
QUARTERLY EVALUATION
Month Year
Today's Date
Inspected By:
Area
Doors & Locks
Exterior Walls
Exterior Area
Graffiti Removal
Grease Trap
Hood Grease Filters
Interior Walls
Removal of Bird Droppings
Rest Room
Roof
Rust
Signage
Trash
Trim
Windows
COMMENTS:
ACTION REQUIRED:
AGREED TO:
O.K.
Needs Attention:
112/022064-0004
10085202.3 a01/30/17 EXHIBIT "B" 133
EXHIBIT "D"
DESCRIPTION OF CITY-APPROVED IMPROVEMENTS/ALTERATIONS TO
PREMISES
• Remove and replace all exterior doors and windows
• Repair and paint exterior stucco
• Repair Roof (credit to be provided by City — amount TBD)
• Replace and improve AC/Vent housing area on roof (credit to be provided by
City — amount TBD)
• Replace/ upgrade electrical panel
• Construct a secure exterior storage facility behind existing building
• Remove and replace existing wood countertops with stainless
• Modify existing kitchen cook/prep line and install new equipment
• ADA bathroom modifications
• Remove and replace existing service counters
• Install water heater
• Improve exterior appearance of building, signage and public seating
• Install Grease Trap
112/022064-0004
10085202 3 a01/30/17 -2-
134
Approve Amendment No. 1
to License Agreement
between the City and PCH
Beach Resort, LLC, for the
beach concession at 21529
Pacific Coast Highway
February 21, 2023
135
The Shor Beach Concession
136
Amendment No.1 modifies the following
provisions:
•Licensee may sell alcoholic beverages to
concession customers. While the Agreement
already allows the sale of alcohol with City
approval, the Amendment requires that all
necessary permits and licenses have been
obtained and outlines all conditions that must
be followed to ensure that the Licensee
operates in a responsible manner.
•The exhibit of the premises has been updated
with a more detailed, scaled site plan instead of
an aerial with implied measurements. The total
concession square footage remains the same.
Amendment No. 1
137
Questions?
138
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-147 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL / HOUSING AUTHORITY ACTION
SUBMITTED TO:Honorable Mayor and City Council Members / Honorable Chairman and Board
Members
SUBMITTED BY:Al Zelinka, City Manager / Executive Officer
VIA:Ursula Luna-Reynosa, Director of Community Development
PREPARED BY:Charles Kovac, Housing Manager
Subject:
Consider for approval Bonanni Development Company IV, LLC Affordable Housing Agreement
for the development of 35 ownership units at 19070 Holly Lane
Statement of Issue:
It is recommended that the City Council approve an Affordable Housing Agreement (“Agreement”) by
and between the City of Huntington Beach (“City”) and Bonanni Development Company IV, LLC
(“Developer”) associated with the previously approved development of a 2.11-acre site located at
19070 Holly Lane (“Project”). The Project consists of thirty-five (35) attached townhomes, of which,
this Agreement will restrict five (5) units for moderate-income households for a period of 45 years.
Financial Impact:
There is no fiscal impact to approving this Agreement.
City Council and Housing Authority Recommended Action:
A) Approve the “Affordable Housing Agreement for 19070 Holly Lane, Huntington Beach by and
Between the City of Huntington Beach, a California Municipal Corporation and Bonanni Development
Company IV, LLC, a Limited Liability Corporation” for the development of 35 ownership units at
19070 Holly Lane; and,
B) Authorize the City Manager or their designee to implement and execute the Affordable Housing
Agreement for the Project, including all necessary related documents; and,
C) Authorize the City Manager to execute an amendment to the Affordable Housing Agreement, as
prepared by the City Attorney, should the Developer upon completion of the Project decide to rent
instead of sell the townhomes due to market conditions; and,
D) Authorize the Housing Authority Executive Officer or their designee to execute all necessary
implementing agreements and related documents.
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Alternative Action(s):
The recommended Agreement was prepared by the City Attorney’s Office pursuant to state and local
regulations. The Project complies with Density Bonus Law (Government Code Section 65915) and
Huntington Beach Zoning and Subdivision Ordinance, Chapter 230.14(B)(4), and the Agreement
ensures the Project will comply with applicable requirements. For this reason staff does not
recommend any alternatives.
Analysis:
The approved Project will redevelop a primarily vacant 2.11-acre site located at 19070 Holly Lane at
the southwest corner of Main Street and Garfield Avenue with 35 attached townhomes. All of the
townhomes will range from 1,300 square feet to 1,865 square feet, be three stories in height (under
the maximum permitted height of 40 feet), and will have either two or three bedrooms with attached
two-car garages. The Project is consistent with the Holly-Seacliff Specific Plan and will maintain the
residential character of the area.
On May 24, 2022, the Developer received approval from the Planning Commission for the Project
application (Attachment 2) consisting of the following: 1) General Plan Amendment (GPA) No. 20-003
to change the property General Plan designation from Commercial Neighborhood-Specific Plan
Overlay to Residential Medium Density-Specific Plan Overlay; 2) Zoning Text Amendment (ZTA) No.
20-003 to change the zoning designation from Commercial to Residential Medium Density; 3)
Tentative Tract Map (TTM) No. 19118 to consolidate 12 separate lots into one lot; 4) Conditional Use
Permit (CUP) No. 20-025 to develop 35 three-story attached townhomes; and 5) Environmental
Assessment No. 20-003, consisting of an Addendum No. 1 to the Holly-Seacliff Specific Plan
Environmental Impact Report No. 89-1 (EIR) to analyze the potential environmental impacts of the
proposed Project. On June 21, 2022, the City Council approved the GPA, ZTA, and Environmental
Assessment No. 20-003 to the EIR.
The Developer has requested a ten percent (10%) density bonus for the Project pursuant to
California Government Code Section 65915 (the “Density Bonus Law”). Under Density Bonus Law,
the approved Project will consist of thirty-two (32) base residential units and three (3) density bonus
units, for a total of thirty-five (35) units. In exchange for the increase in allowable density, the
Developer must ensure that, pursuant to the terms of the Agreement, no less than five units will be
affordable for moderate-income households as defined in Health and Safety Code Section 50093.
Pursuant to State Density Bonus Law, developers of housing projects that include specified levels of
affordable housing are entitled to apply for and receive up to four different benefits. These include 1)
an increase in density, 2) concessions, 3) waivers, and 4) reduced parking requirements. A
concession is an exception from an otherwise applicable development standard that results in cost
savings for the project. A waiver is an exception from a development standard that would physically
preclude the project from being built (Government Code Section 65975(e)(1) provides that a city may
not apply a development standard that would have the effect of physically precluding the construction
of the density bonus units at the density permitted under Density Bonus Law).
In exchange for providing five units of the 32 total base units affordable to moderate-income
households, the Developer is eligible to receive up to one concession and unlimited waivers. The
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households, the Developer is eligible to receive up to one concession and unlimited waivers. The
Developer did not request a concession and is utilizing two waivers to existing development
standards: 1) 15-foot front yard setback, as the approved Project consists of a 10-foot yard setback
along Holly Lane; and 2) 20-foot building separation, as the approved project consists of 15-16 feet
separation of the onsite buildings. Imposing these two standards would have physically precluded
the construction of the density bonus units.
As authorized pursuant to Density Bonus Law, the Project is eligible for parking requirements
calculated in accordance with Government Code Section 65915(p); two-bedroom and three-bedroom
units are required to provide one a half onsite parking spaces per unit. The proposed Project
provides 82 parking spaces, which is 18 spaces less than required by the City’s parking standards
but 29 more parking spaces than required by Density Bonus Law.
In order to be eligible for the waivers and parking reduction described above, the Developer must
ensure that five units of the total 32 base units remain affordable to moderate-income households for
45 years. The proposed Agreement memorializes this requirement, and covenants implementing the
Agreement will be recorded on the property title ensuring that five units will be owned and occupied
by moderate- income households, as defined in Health and Safety Code Section 50093, for 45 years.
The Developer will build the Project in a multiple phases and sell individual units to eligible
homebuyers. The maximum moderate-income sales prices for the five units will be set in accordance
with the Agreement. The proposed Agreement included in Attachment 1 was prepared by the City
Attorney’s Office and is consistent with Density Bonus Law and the Holly-Seacliff Specific Plan.
Currently, the Developer anticipates selling the individual units in accordance with the terms and
conditions set forth within the Agreement. However, due to future housing market uncertainties as it
relates to potentially higher interest rates and a softening real estate market that may hinder the
ability for the Developer to sell the units, the Developer has requested the option to rent the units,
including both the market rate and affordable units, until such time that the housing market supports
converting the Project back to home ownership. Should the City Council approve this option, the
Developer may make this request prior to completion of construction and the sale of any units. The
City Attorney would then prepare an amendment to the Agreement incorporating the necessary
provisions for a rental project for execution by the City Manager.
Upon completion of the Project and occupancy of the affordable units, the Housing Authority will
administer and oversee the implementation of the five moderate-income affordable units to ensure
that the affordability covenants remain in place throughout the duration of the 45-year term.
Environmental Status:
The City certified Program Environmental Impact Report (EIR) No. 89-001 for the Holly-Seacliff
Specific Plan in 1990, which evaluated environmental impacts associated with development
approved as part of the Specific Plan. The Holly-Seacliff Specific Plan identified the subject property
as a Commercial (C) land use and the EIR evaluated environmental impacts associated with up to
117,612 square feet of commercial uses on the property. The EIR provides the environmental setting
and analysis to serve as the first-tier California Environmental Quality Act (CEQA) document for the
proposed Project.
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Although the Holly-Seacliff Specific Plan considered the impacts of commercial development on the
subject property, a residential use (such as the proposed Project) would result in a less intense
project than what was evaluated under the EIR, and therefore would not result in new significant
impacts or an increase in the severity of a previously identified impact in the EIR. The Project will
also be required to comply with City standards and existing mitigation measures outlined in the EIR
to ensure that development of the proposed Project and approval of the GPA, ZTA, TTM, and CUP
would not result in an action that requires further evaluation pursuant to CEQA.
Strategic Plan Goal:
Economic Development & Housing
Attachment(s):
1. Affordable Housing Agreement by and between the City of Huntington Beach and Bonanni
Development Company IV, LLC
2. Planning Commission staff report for the May 24, 2022 meeting
3. PowerPoint Presentation
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:22-440 MEETING DATE:5/24/2022
PLANNING COMMISSION STAFF REPORT
TO:Planning Commission
FROM:Ursula Luna-Reynosa, Community Development Director
BY:Alyssa Helper, Associate Planner
SUBJECT:
GENERAL PLAN AMENDMENT (GPA) NO. 20-003/ZONING TEXT AMENDMENT (ZTA) NO. 20-
003/TENTATIVE TRACT MAP (TTM) NO. 19118/CONDITIONAL USE PERMIT
(CUP) NO. 20-025/ENVIRONMENTAL ASSESSMENT NO. 20-003 (HOLLY
TRIANGLE TOWNHOMES) - Continued from May 10, 2022
REQUEST:
GPA:To amend the General Plan designation from Commercial Neighborhood-
Specific Plan Overlay (CN-sp) to Residential Medium Density-Specific Plan
Overlay (RM-sp).ZTA:To amend the existing zoning designation within the Holly
-Seacliff Specific Plan (SP9) from Commercial (C) to Residential Medium Density
(RM).TTM:To consolidate 12 lots into a 1.80 net acre lot for condominium
purposes.CUP:To 1) develop 35 three-story attached townhomes up to 40 feet
tall, and 2) allow 43-inch and 6-foot tall walls in lieu of 42-inch walls in the 10-foot
front yard setback along Holly Lane and 6-foot tall walls in lieu of 42-inch walls in
the 15-foot front yard setback area along Main Street.EA:Preparation of
Addendum No. 1 to the Holly-Seacliff Specific Plan EIR No. 89-1 to analyze the
potential environmental impacts of the proposed project.
LOCATION:
19070 Holly Lane, 92648 (east side of Holly Lane, south of Garfield Avenue)
APPLICANT:
Chris Segesman, Bonanni Development, 5500 Bolsa Avenue, Suite 120,
Huntington Beach CA 92649
PROPERTY
OWNER:
Bonanni Development, 5500 Bolsa Avenue, Suite 120, Huntington Beach CA
92649
BUSINESS
OWNER:
Not applicable
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File #:22-440 MEETING DATE:5/24/2022
STATEMENT OF ISSUE:
1. Are the GPA and ZTA necessary for the changing needs and orderly development of the
community and consistent with other elements of the General Plan?
2. Are the proposed GPA and ZTA designations compatible with the surrounding area?
3. Does the project satisfy all the findings required for approval of a ZTA, TTM, CUP, and an EIR
Addendum?
4. Is Environmental Assessment No. 20-003 (otherwise referred to as Addendum No. 1 to the
Holly-Seacliff Specific Plan EIR No. 89-1) adequate and complete in that it has identified all
significant environmental effects of the project?
5. Was the Addendum No. 1 to the Holly-Seacliff Specific Plan EIR prepared in compliance with
the California Environmental Quality Act (CEQA) Guidelines?
RECOMMENDATION:
That the Planning Commission take the following actions:
A) Recommend approval of Environmental Assessment No. 20-003 (Addendum No. 1 to the
Holly-Seacliff Specific Plan Environmental Impact Report No. 89-1; Attachment No. 7) as
adequate and complete in accordance with CEQA requirements by approving draft City Council
Resolution No. 22-26 and forward to the City Council for adoption (Attachment No. 2);
B) Recommend approval of General Plan Amendment No. 20-003 and forward draft City Council
Resolution No. 2022-19 to the City Council for consideration (Attachment No. 3);
C) Recommend approval of Zoning Text Amendment No. 20-003 and forward draft City Council
Ordinance No. 4256 to the City Council for consideration (Attachment No. 4); and
D) Approve Tentative Tract Map No. 19118 and Conditional Use Permit No. 20-025 with findings
and suggested conditions of approval (Attachment No. 1).
ALTERNATIVE ACTION(S):
That the Planning Commission take alternative actions, such as:
A) Deny Environmental Assessment No. 20-003, General Plan Amendment No. 20-003, Zone
Text Amendment No. 20-003, Tentative Tract Map No. 19118, and Conditional Use Permit No. 20-
005 with findings for denial;
B) Continue Environmental Assessment No. 20-003, General Plan Amendment No. 20-003, Zone
Text Amendment No. 20-003, Tentative Tract Map No. 19118 and Conditional Use Permit No. 20-
005 and direct staff accordingly.
PROJECT PROPOSAL:
The applicant is proposing to redevelop an existing 2.11-gross-acre (1.8-net-acre) site with 35
attached townhome units (Attachment No. 5). In order to undertake the project proposal, Bonnani
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File #:22-440 MEETING DATE:5/24/2022
Development (the “applicant”) requests the following entitlements:
·General Plan Amendment (GPA) No. 20-003 - To amend the land use designation from
Commercial Neighborhood-Specific Plan Overlay (CN-sp) to Residential Medium Density-Specific
Plan Overlay (RM-sp).
·Zoning Text Amendment (ZTA) No. 20-003 - To amend the existing zoning designation within
the Holly-Seacliff Specific Plan (SP9) from Commercial (C) to Residential Medium Density (RM).
·Tentative Tract Map (TTM) No. 19118 - To consolidate 12 existing lots into a 1.8-net-acre
numbered lot for condominium purposes.
·Conditional Use Permit (CUP) No. 20-025 - To: 1) develop 35 three-story attached townhomes
up to 40 feet tall and 2) allow 43-inch and 6-foot tall walls in lieu of 42-inch walls in the 10-foot
front yard setback along Holly Lane and 6-foot tall walls in lieu of 42-inch walls in the 15-foot front
yard setback area along Main Street.
·Environmental Assessment No. 20-003: Preparation of Addendum No. 1 to the Holly-Seacliff
Specific Plan Environmental Impact Report No. 89-1 to analyze the potential environmental
impacts of the proposed project.
Background:
The project site consists of a small commercial building and an undeveloped surface parking lot. In
recent years, the site has been used as a commercial glass shop and a storage lot for a local car
dealership.
Prior to the adoption of the Holly-Seacliff Specific Plan in 1992, the project site was zoned as
Commercial Neighborhood District (C-1) and Medium Density Residential (R2). Following its
adoption, the Holly-Seacliff Specific Plan continued to permit Commercial (C) uses on the site but
removed Medium Density Residential as an allowable use on the property. Although the Specific Plan
removed residential as a permitted use on the subject property, the Specific Plan does allow for a mix
of residential, commercial, and industrial uses within the surrounding area (otherwise referred to as
Planning Area IV in the Specific Plan). Development surrounding the site is reflective of allowable
uses within the Specific Plan and largely consists of residential and commercial uses.
Bonanni Development, a partial owner of the site, approached the City in 2020 with a proposal to
develop the site with 35 attached townhomes, of which 15 percent will be affordable to moderate
income households. In order to develop the site with a residential use, Bonanni is also coordinating
with the City of Huntington Beach to purchase a 0.08-acre City-owned parcel on the project site
(Assessor’s Parcel Number 159-281-04), which was acquired by the City in 1964 to allow the
Standard Oil Company to lay down an oil pipeline. The City-owned parcel is encumbered with a utility
easement to the benefit of the Standard Oil Company or their successors. However, because the City
has no use for this property, the City plans to dispose of this property as a separate process which
would enable the future development of the property and surrounding land.
With the exception of two waivers of development standards and a Conditional Use Permit to allow
walls exceeding 42 inches within the front yard setback areas along Holly Street and Main Street,
development of the project will occur in accordance with the development standards outlined in the
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File #:22-440 MEETING DATE:5/24/2022
development of the project will occur in accordance with the development standards outlined in the
Specific Plan and applicable provisions of the California Density Bonus Law.
ISSUES AND ANALYSIS:
Subject Property And Surrounding General Plan Designations, Zoning And Land Uses:
LOCATION GENERAL PLAN ZONING LAND USE
Subject Property:Commercial
Neighborhood- Specific
Plan Overlay (CN-sp)
Holly Seacliff Specific
Plan (SP 9; Commercial
within SP)
Vacant with the
exception of one
commercial building
North of Subject
Property (across
Garfield Avenue):
Residential Medium
Density-Specific Plan
Overlay (RM-sp)
SP 9; Medium Density
Residential and Medium
High Density Residential
within SP
Single Family
Residences
West of Subject
Property (across
Holly Lane):
RM-sp SP 9; Medium Density
Residential within SP
Multi-Family
Residences
East and South of
Subject Property
(across Main Street):
RM-sp Residential Medium
Density (RM)
Multi-Family
Residences
General Plan Conformance:
The applicant is proposing to amend the General Plan land use designation on the site from CN-sp
(Commercial Neighborhood-Specific Plan Overlay) to RM-sp (Residential Medium Density-Specific
Plan Overlay). The RM-sp designation is an extension of the same designation found on surrounding
properties. It allows for single-family detached, single-family attached, and multi-family residential
units at densities ranging from 7 to 15 dwelling units per acre. The project would develop the property
with townhome units that would be consistent with allowable residential uses in the RM-sp
designation. Development of the property with townhome units is also consistent with other
residential land uses in the vicinity of the project site, including a series of two-story apartment
buildings across Holly Lane to the west, three-story detached homes across Garfield Avenue to the
north, and two-story condominium units across Main Street to the east.
Development of the project site with a 35-unit townhome project would also be consistent with the
following goals and policies in the General Plan:
A. 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-1C - Support infill development, consolidation of parcels, and adaptive reuse of existing
buildings.
Policy LU-1D - Ensure that new development projects are of compatible proportion, scale and
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character to complement adjoining uses.
Policy LU-2D - Maintain and protect residential neighborhoods by avoiding encroachment of
incompatible land uses.
Policy LU-2E - Intensify the use and strengthen the role of public art, architecture, landscaping,
site design, and development patterns to enhance the visual image of Huntington Beach.
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.
Goal LU-7 - Neighborhoods, corridors, and community subareas are well designed, and buildings,
enhanced streets, and public spaces contribute to a strong sense of place.
The project includes a Zone Text Amendment (ZTA) to implement the land use designation proposed
as part of General Plan Amendment No. 20-003 and enable the redevelopment of a primarily
undeveloped site into a residential community consisting of 35 townhomes. The project also includes
Tentative Tract Map (TTM) No. 19118 to consolidate 12 existing lots into a one lot condominium map
for the development of the attached townhome units. Redevelopment of the primarily undeveloped
site with a residential townhome project and approval of the TTM to consolidate the existing onsite
lots into one lot would support the City’s goals and policies aimed at promoting infill residential
development. The project will develop the property with three-story townhomes that will exhibit a
modern coastal architectural style with elements of farmhouse and coastal design that are in keeping
with the proportion, scale, and character of the neighborhood and will add to the range of housing
types available in the community. Approval of the ZTA will ensure that the project is consistent with
the development standards for RM uses as outlined in the Holly-Seacliff Specific Plan and the
Huntington Beach Zoning and Subdivision Ordinance (HBZSO). The project also provides enhanced
landscaping areas along each of the three streets that form the site boundaries to enhance existing
vehicular and pedestrian connections within the project area.
B. Housing Element
Policy 1.1 - Preserve the character, scale and quality of established residential neighborhoods.
Goal 2 - Provide adequate housing sites through appropriate land use, zoning and specific plan
designations to accommodate Huntington Beach’s share of regional housing needs.
Policy 2.1 - Provide site opportunities for development of housing that responds to diverse
community needs in terms of housing types, cost and location, emphasizing locations near
services and transit that promote walkability.
Goal 3 - Enhance housing affordability so that modest income households can remain an integral
part of the Huntington Beach community
Policy 3.1 - Encourage the production of housing that meets all economic segments of the
community, including lower, moderate, and upper income households, to maintain a balanced
community.
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File #:22-440 MEETING DATE:5/24/2022
Policy 3.2 - Utilize the City’s Inclusionary Housing Ordinance as a tool to integrate affordable units
within market rate developments. Continue to prioritize the construction of affordable units on-site,
with provision of units off-site or payment of an in-lieu housing fee as a less preferred alternative.
Policy 3.3 - Facilitate the development of affordable housing through regulatory incentives and
concessions, and/or financial assistance, with funding priority to projects that include extremely
low income units. Proactively seek out new models and approaches in the provision of affordable
housing.
Policy 3.4 - Explore collaborative partnerships with non-profit organizations, developers, the
business community and governmental agencies in the provision of affordable housing.
Policy 4.1 - Regulatory Incentives for Affordable Housing Support the use of density bonuses and
other incentives, such as fee deferrals/waivers and parking reductions, to offset or reduce the
costs of developing affordable housing while ensuring that potential impacts are addressed.
The proposed project will develop a mostly vacant, underutilized site with 35 three-story townhomes
that will be consistent with the scale and nature of residential land uses surrounding the site. The
project would respond to community needs for pedestrian infrastructure adjacent to housing by
developing the subject property, which has an existing bus stop on Main Street, with a residential
project and constructing a new sidewalk along Holly Lane to serve residents on the site and in the
surrounding area. The project will also comply with the Holly-Seacliff Specific Plan’s affordable
housing requirement to provide 15 percent of the proposed dwelling units as affordable units because
the applicant is providing 5 units for families or households of moderate income. Therefore, approval
of the project will accommodate additional housing, including affordable housing, and add to the
City’s overall housing stock.
Due to the provision of affordable housing, the applicant is entitled to a 10 percent density bonus,
one incentive/concession, and an unlimited number of waivers of development standards as
permitted by the California Density Bonus Law. The project includes a 10 percent density bonus to
allow 16.59 units per gross acre instead of the maximum density of 15 units per gross acre
established in the Holly-Seacliff Specific Plan. The project is not requesting any
incentives/concessions, but does include waivers of development standards to allow for a reduced
front yard setback along Holly Lane (from 15 feet to 10 feet) and a reduced building separation
between several of the onsite buildings (from 20 feet to 15- and 16-feet). The density bonus and the
requested waivers included as part of the project will serve as mechanism to accommodate
additional housing. Please refer to the discussion below for a description of project-related
components that are permitted under the California Density Bonus Law.
Zoning Compliance:
Zone Text Amendment:
The ZTA will not affect the overall land use uses or the development standards prescribed for the RM
zoning district established in the Holly-Seacliff Specific Plan. The zoning designation for the subject
site will remain SP9 (Holly-Seacliff Specific Plan); however, the project includes a ZTA to revise the
Holly-Seacliff Specific Plan to allow for Residential Medium Density (RM) uses on the site rather than
Commercial (C) uses. Conservatively, the addition of 35 units on the site has been reflected in the
overall development capacity for the Specific Plan to ensure consistency with the proposed RM
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overall development capacity for the Specific Plan to ensure consistency with the proposed RM
designation on the subject property. However, because residential uses developed under the Specific
Plan have largely been developed at lower densities than what was permitted under the Specific
Plan, the proposed ZTA would be consistent with the overall planned residential development
capacity that was envisioned for the Specific Plan area. The proposed RM land use classification will
also be consistent with the RM designation for other properties surrounding the site.
A community need is demonstrated for the proposed change because it will allow an underutilized
site to be redeveloped into a residential project that is consistent with the character of the area and
will add to the City’s housing stock.
Adoption of the ZTA will also be in conformity with public convenience, general welfare and good
zoning practice because residential uses are a more appropriate land use for the site than
commercial uses. The site is surrounded by residential uses on all sides and development of a
commercial use on the subject property would result in greater impacts to existing residences than
development of the proposed residential project. Furthermore, a residential use is more appropriate
than a commercial use because the site has been zoned for commercial uses since adoption of the
Specific Plan and has yet to be developed with a commercial use outside of the glass shop on the
northwest corner. Therefore, adoption of the ZTA will implement the land use designation proposed
with General Plan Amendment No. 20-003 and the overarching goals and policies in the Specific
Plan, and would result in a land use on the property that is more compatible with the surrounding
neighborhood.
Tract Map/Site Layout/Compatibility
TTM No. 19118 will consolidate 12 existing lots into a one lot condominium map 2.11-gross-acre
(1.80-net-acre) site for development of 35 attached townhome units. Access to the site will be
provided off Holly Lane to reduce the potential for traffic congestion and vehicular conflicts on
Garfield Avenue and Main Street, and to foster a connection with existing residential neighborhoods
across Holly Lane. Emergency access will be provided via Holly Lane and an emergency-vehicle-
access-only access point off of Main Street. The private streets comply with the City’s standard drive
aisle/fire lane width of 24 feet and provide direct access to each unit and its attached garage. The
project will provide 82 parking spaces, including 70 spaces within 2-car attached garages associated
with each unit and 12 off-street guest spaces.
Pedestrian access to the site will be provided by existing sidewalks along Main Street and Garfield
Avenue and a new sidewalk to be constructed along Holly Lane. Landscaping will be provided
between the 43-inch and 6-foot tall walls and sidewalks along the perimeter of the site to enhance
aesthetics and improve pedestrian connections between the site and surrounding areas. The project
will also provide common open space areas for use by onsite residents, including the central village
lawn area located between Buildings B and C and a turf area with common amenities (e.g., a fire bit,
barbeques, and patio furniture) located between Buildings G and E.
The applicant has submitted three residential floor plans, all of which are three stories and under 40
feet in height, in compliance with the maximum permitted height of 40 feet. The proposed townhomes
would range in size from 1,300 to 1,865 square feet with up to 2 and 3 bedrooms and 2-car attached
garages (Attachment No. 5). With the exception of the two waivers of development standards to allow
for a reduced front-yard setback along Holly Lane (from 15 feet to 10 feet) and a reduced building
separation requirement (15 and 16 feet instead of 20 feet) between several of the onsite buildings,
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separation requirement (15 and 16 feet instead of 20 feet) between several of the onsite buildings,
the project will comply with all development standards set forth in the Specific Plan. By complying
with development standards in the Specific Plan, including building height, lot coverage, and
landscaping, the project will be consistent with the overall bulk and scale of existing residential uses
in the project vicinity. Furthermore, the project incorporates façade breaks, a variation in the color
scheme for each elevation, and roof variations into the design of each plan to minimize overall
building mass and scale for each of the proposed units. The proposed units will also be designed in a
modern coastal/farmhouse architectural style and will use of durable high quality building materials to
enhance the project design and ensure its compatibility with the surrounding area.
While residential uses surround the project site on all sides, existing roadways (Main Street, Holly
Lane, and Garfield Avenue) and project setbacks (15 feet on Main Street and Garfield Avenue, 10
feet on Holly Lane) provide a sufficient buffer between the proposed uses and existing residential
uses in the project vicinity.
The design of the subdivision or the proposed improvements will not cause serious health problems
or substantial environmental damage or substantially and avoidably injure fish or wildlife or their
habitat because the site has been previously been disturbed and is void of any wildlife habitat. The
site is mostly vacant with the exception of one small commercial building. However, because of the
history of oil drilling operations previously occurring on the site, the project includes the
reabandonment of two onsite wells and the installation of methane barrier systems under the
proposed residences pursuant to City Specification 422 and 429 to avoid any health hazards
associated with the oil wells onsite. Furthermore, project design features, compliance with regulatory
requirements, and implementation of modified mitigation measures outlined in Environmental
Assessment No. 20- 003 (Addendum No. 1 to the Holly-Seacliff Specific Plan Environmental Impact
Report [(EIR]) will ensure that the subdivision will not cause serious health problems or substantial
environmental damage.
The design of the subdivision or the type of improvements will not conflict with easements, acquired
by the public at large, for access through or use of, property within the proposed subdivision unless
alternative easements, for access or for use, will be provided. The only existing easement on the
property is a private utility easement for the benefit of Standard Oil or its successors and was
originally granted to lay down an oil pipeline on the site. This easement will continue to be in place on
the property following project implementation. The subdivision will provide all necessary streets,
sidewalk, and utility easements to serve the new development.
Conditional Use Permit
The CUP request to allow for the development of 35 three-story attached townhomes on an
approximately 2.11-gross-acre site will improve an existing underutilized site with a residential
development consistent with other uses in the vicinity. The proposed development will convey a high
level of quality and a character that incorporates quality materials and design, consistent with the
Urban Design Guidelines. For example, building volumes are articulated with variation in wall planes
to reduce building massing and building facades incorporate a variety of building materials, including
stucco, siding, and metal railings, and colors to provide visual interest. Development of the site with
the project will result in a significant visual and economic improvement from existing conditions on
the site, which largely consists of an undeveloped dirt lot and a small glass shop, and will assist in
meeting the changing housing needs of the community.
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The project is also requesting a CUP to allow 6-foot high perimeter walls within the 15- foot front yard
setback along Main Street and 43-inch and 6-foot high block walls around the private patios within
the 10-foot front yard setback along Holly Lane. The proposed 43-inch and 6-foot tall perimeter walls
in the front yard setback along Holly Lane and the 6-foot tall perimeter walls along Main Street are
necessary to provide privacy to onsite residents. A 15-foot landscaped planter is provided between
the 6-foot wall and the sidewalk along Main Street and an approximately 2.5-foot landscaped planter
is provided in front of the proposed 43-inch and 6-foot tall walls along Holly Lane. The provision of
perimeter landscaping in areas in front of the proposed 43-inch and 6-foot tall walls will soften the
aesthetic appearance of the walls and enhance the streetscape within the front yard setback areas,
in accordance with the City’s Urban Design Guidelines. In addition, the provision of private patio
areas along Holly Lane will contribute to the sense of community and provide more “eyes” on the
street consistent with principles of Crime Prevention through Environmental Design. With the
exception of the CUP request for wall heights within the front yard setback areas, the only deviations
from applicable development standards established in the base zoning district and other applicable
provisions in the HBZSO are the waivers of development standards, density bonus, and reduced
parking ratio included as part of the project as permitted under the California Density Bonus Law.
California Density Bonus Law
The applicant is seeking to invoke development tools and privileges outlined in the California Density
Bonus Law (found in California Government Code Sections 65915-65918). As stipulated in the
California Density Bonus Law, projects providing 15 percent of the total units as available to
moderate income households are entitled to a 10 percent density bonus. In addition to a density
bonus, local jurisdictions are required to grant other incentives or concessions to housing projects
containing a percentage of affordable units. A concession or incentive is defined as any of the
following: a reduction in site development standards or a modification of zoning code or architectural
design requirements (e.g., a reduction in setback or minimum square footage requirements) approval
of mixed use zoning, other regulatory incentives or concessions which result in identifiable and actual
cost reductions.
The number of required incentives or concessions that are granted to an applicant is based on the
percentage of affordable units included as part the project. Projects that include 15 percent of the
proposed units as affordable to moderate income households (e.g., the proposed project) are entitled
to one incentive/concession. Concessions/incentives are permitted unless the proposed
incentives/concessions do not result in identifiable and actual cost reductions, would cause a public
health or safety problem, would cause an environmental problem, would harm historical property, or
would be contrary to the law.
In addition to granting incentives/concessions, developments qualifying for a density bonus also can
receive an unlimited number of waivers from development standards. As such, the City is not
permitted to apply development standard that would physically prevent the project from being
developed at the permitted density with the granted incentives/concessions. However, the city is not
required to waive or reduce development standards that would cause a public health or safety
problem, cause an environmental problem, harm historical property, or would be contrary to law. A
waiver or reduction of a development standard does not count as an incentive or concession, and
there is no limit on the number of development standard waivers that may be requested or granted.
In addition, the California Density Bonus Law stipulates that the City may not require parking at ratios
beyond what is established in the California Density Bonus Law upon the developer’s request.
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Consistent with the California Density Bonus law, the project includes the following
incentives/concessions, waivers of City standards, and reduction of parking requirements:
Incentives:
The applicant is not requesting an incentive/concession.
Waivers:
The following waivers of development standards are proposed so as not to physically preclude the
applicant from developing the proposed number of units on the site:
1) 15-foot Front Yard Setback:The applicant is proposing a 10-foot front yard setback in lieu of
the required 15-foot front yard setback along Holly Lane, and
2) 20-Foot Building Separation:The application is proposing a reduced building separation
between several of the onsite buildings (15- and 16-feet instead of 20-feet).
Density Bonus:
The project qualifies for a 10 percent density bonus per the California Density Bonus Law due to the
provision of 15 percent of the total units as affordable to moderate income households. As such, the
applicant is entitled to and is requesting a 10 percent density bonus to allow three additional units in
addition to the 32 base units permitted under the Holly-Seacliff Specific Plan.
Reduced Parking Ratio:
Per the California Density Bonus Law, the city or county may not require more than the parking ratios
for a density bonus project (inclusive of parking for persons with disabilities) outlined in the table
below. As illustrated by this table, the proposed project would provide 29 more spaces than what is
required by State law.
Unit Type Type Count Required
Ratio per
City Code
Required
Parking
Spaces per
City Code
Maximum
Parking
Requirements
per State Law
Required
Parking
Spaces per
State Law
Provided
Parking by
the Project
2 Bedroom 11 Units 2 Spaces (1
enclosed) per
Unit
22 1.5 per Unit 17 22
3 Bedroom 24 Units 2.5 Spaces (1
enclosed) per
Unit
60 1.5 per Unit 36 48
0.5 Guest
Space per
Unit
18 0 spaces 0 12
Total 100 -53 82
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Quimby Act and Affordable Housing
The Community Services and Library Department has determined that additional public park area
within the project area is not needed. Therefore, the project will pay park and recreation in lieu fees to
satisfy Quimby Act requirements pursuant to Chapter 254 of the HBZSO.
Pursuant to Chapter III of the Holly-Seacliff Specific Plan, the project is required to comply with
affordable housing requirements and provide 15 percent of the proposed 32 base dwelling units (5
units) as affordable units. The restricted income units must be provided on-site with the new
development in order to qualify for density bonus. In accordance with these requirements, the
applicant is proposing five units restricted for moderate income households for a period of 45 years.
Urban Design Guidelines Conformance:
The project, as modified by suggested conditions, is in substantial conformance with the Urban
Design Guidelines, Chapter 3 (Multi-Family Detached Residential) by providing:
·New residential buildings in an arrangement that is sensitive to the characteristics of the existing
site and surrounding area;
·Ornamental landscaping and enhanced paving at the project entrance;
·Orienting the buildings to promote privacy to the greatest extent possible;
·Courtyards and open space areas throughout the project site;
·The main project entrance off Holly Lane, so as to avoid vehicular conflicts on busier arterials,
such as Garfield Avenue and Main Street;
·Sidewalks along the perimeter and within the interior of the site;
·Landscaping throughout the development that frames, softens, and enhances the quality of
the development;
·Architecture that is compatible with the surrounding buildings and meets or exceeds the
standards of quality, which have been set by surrounding development;
·Architectural elements such as windows, doors, headers, etc. that create a rhythmic
composition;
·Varied building design with significant difference in the massing and composition of each
adjacent house;
·Elevations that are architecturally enhanced;
·Roof designs that complement qualities of the neighboring residential structures such as type,
slope, size, materials, and colors; and
·Open space in close proximity to every dwelling.
Environmental Status:
The City certified Program Environmental Impact Report No. 89-001 for the Holly-Seacliff Specific
Plan in 1990, which evaluated environmental impacts associated with development approved as part
of the Holly-Seacliff Specific Plan. The Holly-Seacliff Specific Plan identified the subject property as a
Commercial (C) land use and the Holly-Seacliff Specific Plan EIR evaluated environmental impacts
associated with up to 117,612 sf of commercial uses on the property. The Holly-Seacliff Specific Plan
EIR provides the environmental setting and analysis to serve as the first-tier CEQA document for the
proposed project.
Although the Holly-Seacliff Specific Plan considered the impacts of commercial development on the
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Although the Holly-Seacliff Specific Plan considered the impacts of commercial development on the
subject property, a residential use (such as the proposed project) would result in a less intense
project than what was evaluated under the Holly-Seacliff Specific Plan EIR, and therefore would not
result in new significant impacts or an increase in the severity of a previously identified impact in the
Holly-Seacliff Specific Plan EIR. In addition, the project includes several project design features and
will be required to comply with City standards and existing mitigation measures outlined in the Holly-
Seacliff Specific Plan EIR to ensure that development of the proposed project and approval of the
GPA, ZTA, TTM, and CUP would not result in an action that requires further evaluation pursuant to
CEQA (Attachment No. 7).
Coastal Status:
Not applicable.
Design Review Board:
The Design Review Board reviewed the design, colors, and materials of the project at their January
13, 2022 regular meeting and recommended approval with modifications. These requested
modifications included adding horizontal bars to upper story windows and painting the upper-story
wood headers grey. These modifications have been incorporated in the TTM and CUP suggested
conditions of approval.
Other Departments Concerns and Requirements:
Public Works, Building, Fire, Police, and Community Services staff reviewed the proposed project
and identified code requirements applicable to the project. The Public Works and Fire Departments
have identified some conditions that have been incorporated into the suggested conditions of
approval (Attachment No. 1)
Public Notification:
Legal notice was published in the Huntington Beach Wave on Thursday, April 28 2022 and notices
were sent to property owners of record within a 500 ft. radius of the subject property,
individuals/organizations requesting notification (Community Development Department’s Notification
Matrix), and applicant.
Application Processing Dates:
DATE OF COMPLETE APPLICATION:MANDATORY PROCESSING DATE(S):
March 16, 2022 Addendum No. 1 to the Holly-Seacliff Specific Plan -
Within 1 Year of complete application
GPA/ZTA/TTM/CUP - None
SUMMARY:
Staff recommends the Planning Commission recommend adoption of Environmental Assessment No.
20-003 (Addendum No.1 to the Holly-Seacliff Specific Plan Environmental Impact Report) and
approval of General Plan Amendment No. 20-003 and Zone Text Amendment No. 20-003 with
findings to the City Council and approve Tentative Tract Map No. 19118 and Conditional Use Permit
No. 20-025 with findings (Attachment No. 1).
This recommendation is based on the following:
¾Environmental Assessment No. 20-003 (Addendum No.1 to the Holly-Seacliff Specific Plan
EIR for the Holly Triangle Townhomes Project) is adequate and complete in that it has identified
all potential environmental impacts associated with the project.
¾Environmental Assessment No. 20-003 (Addendum No.1 to the Holly-Seacliff Specific Plan
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¾Environmental Assessment No. 20-003 (Addendum No.1 to the Holly-Seacliff Specific Plan
EIR for the Holly Triangle Townhomes Project) demonstrates that the project will not have new or
substantially more severe environmental impacts that were not disclosed in the certified Final EIR
for the Holly-Seacliff Specific Plan and will not require new mitigation measures or the preparation
of a Subsequent or Supplemental EIR.
¾Environmental Assessment No. 20-003 (Addendum No.1 to the Holly-Seacliff Specific Plan
EIR for the Holly Triangle Townhomes Project) was prepared in compliance with the CEQA
Guidelines.
¾The GPA, ZTA, TTM, and CUP are consistent with the General Plan and its goals and policies.
¾The GPA, ZTA, TTM, and CUP are consistent with surrounding area.
¾The project meets the requirements of the Subdivision Map Act.
¾The request will allow the development of additional housing on the subject site and will add to
the City’s housing stock.
ATTACHMENTS:
1.Suggested Findings and Conditions of Approval for Environmental Assessment No. 20-003
(Addendum to the certified Final EIR for the Holly-Seacliff Specific Plan), Zoning Text Amendment
No. 20-003; Tentative Tract Map No. 19118; and Conditional Use Permit No. 20- 025
2. Draft City Council Resolution No. 22-26 for Addendum No. 1 to the Holly-Seacliff Specific Plan
Environmental Impact Report No. 89-1
3. Draft City Council Resolution No. 2022-19 for General Plan Amendment No. 20-003
4. Draft City Council Ordinance No. 4256 for Zoning Text Amendment No. 20-003
5. Project Plans dated February 11, 2022
6. Project Narrative dated April 2022
7. Addendum No. 1 to the certified Final EIR for the Holly-Seacliff Specific Plan EIR (available
here: https://www.huntingtonbeachca.gov/government/departments/planning/major/major-projects
-view.cfm?ID=106)
8. Code Requirements Letter (For Informational Purposes Only) dated April 12, 2022
9. Tentative Tract Map No. 19118
10. Existing & Proposed General Plan Land Use Designation Maps
11. Revised Specific Plan/ZTA-20-003 Legislative Draft
12.Vicinity Map
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Affordable Housing
Agreement – 19070
Holly Lane
City Council
February 21, 2023
226
Background
• Bonanni Development Company received entitlements for a 35-unit
ownership project located at 19070 Holly Lane (“Project”).
• The Project is located within the Holly-Seacliff Specific Plan (HSSP).
• Five affordable units:
• 3 two-bedroom units
• 2 three-bedroom units
• All five affordable units will be
available to “moderate income”
households (not to exceed 120%
of area median income).
• 45-year affordability covenant.
227
Background – Density Bonus
• Project is eligible for a 10% density bonus.
• Site will consist of 32 “base” units and three density bonus units for 35
total units, of which, five units will be affordable to moderate income
households.
• Project conforms to the Density Bonus Law, the City’s Inclusionary
Ordinance requirements, and the Holly-Seacliff Specific Plan.
• On May 24, 2022, the Planning Commission approved the entitlement
requests and recommended approval of the EIR, General Plan and
Zoning Text Amendments.
• On June 21, 2022, the City Council certified the EIR and
approved the General Plan and Zoning Text Amendments.
228
Density Bonus Waivers
The developer will provide 10% of the units as affordable and therefore,
per Density Bonus Law, is eligible for one concession, unlimited
waivers, and reduction in parking requirements. The developer did not
request a concession and is utilizing the following two waivers to
development standards and Density Bonus Parking standards:
• Reduction of 5 feet for front yard setback along Holly Lane (15-foot
required and10-foot approved); and
• Reduction of 4 to 5 feet for building separation, (20-foot required
and15-16 feet approved); and
• The project will provide 82 parking spaces (18 spaces less than the
City’s parking standards but 29 spaces more than permitted under
Density Bonus Parking standards).
229
Rent vs Sell Amendment
• The developer anticipates selling the individual units in accordance
with the Affordable Housing Agreement.
• Due to future housing market uncertainties (higher interest rates and
softening real estate market) the developer has requested the option
to temporarily rent the units until the housing market supports home
ownership.
• If the City Council approves this option, the developer can make this
rental request prior to completion of construction.
• The City Attorney would then prepare an amendment to the
Affordable Housing Agreement to incorporate rental provisions
for execution by the City Manager.
230
Recommendations
• Approve the Affordable Housing Agreement for the development of
35 townhomes at 19070 Holly Lane; and,
• Authorize City Manager to execute the Affordable Housing
Agreement, including all necessary related documents; and
• Authorize City Manager to execute an amendment to the Affordable
Housing Agreement, as prepared by the City Attorney, should the
developer decide to rent instead of selling the townhomes due to
market conditions; and
• Authorize Housing Authority Executive Director to execute all
necessary implementing agreements
231
Questions?
232
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:22-807 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Scott M. Haberle, Fire Chief
PREPARED BY:Eric Dieterman, Marine Safety Division Chief
Bonnie To, Principal Administrative Analyst
Subject:
Authorize execution of an agreement with Toyota for vehicles for Marine Safety, Beach
Parking, and Beach Maintenance and approve appropriation of funds
Statement of Issue:
Toyota Motor Sales, U.S.A., Inc. and Southern California Toyota Dealers Advertising Association
(“Toyota”) request to enter into an agreement to be the official Marine Safety vehicle for the City of
Huntington Beach. The agreement states that Toyota would provide a total of 24 new vehicles over
two years at no cost to the City. Vehicles will be utilized by the Marine Safety, Beach Parking, and
Beach Maintenance divisions.
Financial Impact:
If approved, this agreement would save the City $1,200,731 in General Fund dollars that would
otherwise have been spent on directly purchasing the 24 vehicles.
In addition, the total Radio and Equipment Upfitting Costs would be $339,019 for the 24 vehicles (or
$14,126 per vehicle) and include radios, GPS antenna, mounts, lightbars, speakers, brackets, roof
equipment, control center, camper shell, racks, locks, and drawer systems. It should also be noted
that this agreement includes five more vehicles than the previous agreements with Toyota. Increased
maintenance costs for these five vehicles total $22,150 ($4,430 per vehicle); The Fire Department
has $100,000 in existing budget that is requested to be transferred to help pay for the Total Radio
and Equipment Upfitting Costs. Therefore, after transferring the $100,000 from the existing Fire
Department Budget, an additional budget appropriation of $239,019 is requested to cover the
remaining Total Maintenance and Total Radio and Equipment Upfitting Costs.
When accounting for the $1,200,731 value of vehicles minus the $239,019 in total costs, the net cost
savings would be $961,712. Please see the attached cost estimate for details.
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File #:22-807 MEETING DATE:2/21/2023
Recommended Action:
Authorize the Mayor and City Clerk to execute “Promotional Agreement Between the City of
Huntington Beach and Southern California Toyota Dealers Advertising Association” to provide 24
vehicles for Marine Safety, Beach Parking, and Beach Maintenance uses; approve the appropriation
of $216,869 in Equipment Replacement Fund 324 and $22,150 in the General Fund Fleet
Maintenance business unit 10085705 to upfit and maintain the vehicles.
Alternative Action(s):
1) Do not authorize execution of an agreement with Toyota to provide 24 vehicles for Marine
Safety, Beach Parking, and Beach Maintenance uses, and direct staff accordingly. Direction
may include a new budget appropriation to directly purchase 24 vehicles, upfit and maintain
them using City funds.
Analysis:
The agreement states that Toyota would provide a total of 24 new vehicles at no cost to the City of
Huntington Beach for Marine Safety, Beach Parking, and Beach Maintenance. The City of Huntington
Beach has had a promotional agreement with Toyota to provide vehicles for Marine Safety, Beach
Parking and Beach Maintenance uses since 2008. By re-entering into an agreement with Toyota to
provide 24 new vehicles at no cost to the City of Huntington Beach, these vehicles will help the three
divisions to continue providing quality public service and safety to our community and visitors . It
should also be noted that Toyota has similar promotional agreements with the County of Los Angeles
and the City of San Diego.
If approved, the agreement will also provide Grant of Sponsorship Rights to Toyota (see page 3 of
the agreement), which includes sponsorship signage on Lifeguard Towers 3 and 4. Sponsor
Obligations are listed on Page 6 of the agreement. This Agreement would commence on the date of
the Huntington Beach City Council’s execution of the agreement and shall continue for two years; the
agreement may be extended for two additional two-year periods on the same terms and conditions
specified in this Agreement.
Based on analysis by the Finance Department and the Fire Department, the 24 vehicles that Toyota
would provide in this agreement qualify as an exemption to the City’s Bidding Requirement
Exemptions as defined in Municipal Code 3.020.080. Therefore, an RFP was not required for this
agreement.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Financial Sustainability, Public Safety or Other
Attachment(s):
1. Agreement with Toyota for vehicles for Marine Safety, Beach Parking, and Beach Maintenance
2. Cost Estimates
3. PowerPoint Presentation
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239
240
241
242
243
244
245
246
247
248
249
250
251
Jennifer Lin
252
253
254
Example of an Approved Public Safety Message:
255
256
257
Cost Estimates
Attachment: Cost Estimates
Page 1
258
Cost Estimates
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Line B
Line C
Line A
Line B
Line B
Part of
Line B
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Cost Estimates
Please see Toyota cost estimates on the following pages.
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YOUR 2023TACOMAEXTERIOR COLOR:Barcelona Red MetallicINTERIOR COLOR:Black LeatherCity MPG**18Highway MPG22Here's the Tacoma TRD Off-Road 3.5L V6 engine AT 4x4 5-ft. bed Double Cab YOU BUILTStarting MSRP:*Tacoma TRD Off-Road$38,905.00Delivery, Processing and Handling Fee:$1,335.00Tacoma TRD Off-Road 3.5L V6 engineAT 4x4 5-ft. bed Double CabOptions:TRD Premium Off-Road Package (Double Cab A/T)Advanced Technology PackageLED Headlights and Fog Lights50 State Emissions$6,000.00Accessories:All-Weather Floor Liners1Bed Mat<br>2Bed Cleats1Mudguards25-In. Oval Tube Steps - Black<br><br>2TRD Front Skid Plate2Truck Bed D-Rings2$1,681.00Total MSRP:***$47,921.00* MSRP excludes the Delivery, Processing, and Handling Fee of $1,095 for Cars (GR86, Avalon, Avalon HV, Camry, Camry HV, Corolla, Corolla HV, Corolla HB, GR Corolla, Mirai, Prius, Prius Prime, GR Supra, Toyota Crown), $1,335 forSUV/Van/Small Truck (4Runner, bZ4X, C-HR, Corolla Cross, Corolla Cross HEV, Highlander, Highlander HV, RAV4, RAV4 HV, RAV4 Prime, Sienna, Tacoma, Venza), $1,595 for Large SUV (Sequoia), and $1,795 for Large Truck (Tundraand Tundra Hybrid). (Historically, vehicle manufacturers and distributors have charged a separate fee for processing, handling and delivering vehicles to dealerships. Toyota's charge for these services is called the "Delivery,Processing and Handling Fee" and is based on the value of the processing, handling and delivery services Toyota provides as well as Toyota's overall pricing structure and may be subject to change at any time. Toyota may make aprofit on the Delivery, Processing and Handling Fee.) Excludes taxes, license, title and available or regionally required equipment. The Delivery, Processing and Handling Fee in AL, AR, FL, GA, LA, MS, NC, OK, SC and TX will be higher.The published prices do not apply to Puerto Rico and the U.S. Virgin Islands. Actual dealer price will vary. ** EPA-estimated or projected EPA-estimated3 mpg rating. Use for comparison purposes only. Your mileage will vary for manyreasons, including your vehicle's condition and how/where you drive. See www.fueleconomy.gov. *** Manufacturer's Suggested Retail Price, includes the Delivery, Processing and Handling Fee. (Historically, vehicle manufacturers anddistributors have charged a separate fee for processing, handling and delivering vehicles to dealerships. Toyota's charge for these services is called the "Delivery, Processing and Handling Fee" and is based on the value of theprocessing, handling and delivery services Toyota provides as well as Toyota's overall pricing structure. Toyota may make a profit on the Delivery, Processing and Handling Fee.) Excludes taxes, license, title and available or regionallyrequired equipment. The Delivery, Processing and Handling Fee in AL, AR, FL, GA, LA, MS, NC, OK, SC and TX will be higher. The published prices do not apply to Puerto Rico and the U.S. Virgin Islands. Actual dealer price will vary.Page 4261
YOUR TACOMA SPECIFICATIONSMileage EstimatesMileage estimates (MPG city/highway/combined)418/22/20Fuel tank (gal.)21.1PriceStarting msrp5$38,905ToyotaCareNo cost maintenance6$0 (NO COST)24-hour Roadside Assistance6$0 (NO COST)Mechanical/PerformanceEngine3.5-liter V6 direct-injection Atkinson-cycle engine with 278 hp @ 6000 rpm/265 lb.-ft. @ 4600 rpmEngine3.5-liter V6 DOHC 24-valve direct-injection Atkinson-cycle engine with VVT-iW (Variable Valve Timing-intelligent WiderIntake) and VVT-i (Variable Valve Timing-intelligent Exhaust), with 278 hp @ 6000 rpm/265 lb.-ft. @ 4600 rpm (bore xstroke: 94.0 x 83.0 mm.; compression ratio: 11.8)Emission RatingLow Emission Vehicle III (LEV-III)Transmission6-speed Electronically Controlled automatic Transmission with intelligence (ECT-i)Drivetrain4WDemand part-time 4WD with electronically controlled transfer case and Automatic Limited-Slip Differential (AutoLSD)7Off-roadHill Start Assist Control (HAC)8Off-roadElectronically controlled locking rear differentialBody ConstructionOne-piece frame rails with eight cross members and fully boxed front sub-frameSuspensionCoil-spring double-wishbone front suspension and stabilizer bar; leaf spring rear suspension with staggered outboard-mounted gas shock absorbers and stabilizer barSuspensionTRD Off-Road tuned suspension with Bilstein®9 shocksSteeringVariable-assist power rack-and-pinion steeringBrakesPower-assisted ventilated front disc brakes; rear drum brakes with tandem booster and Star Safety System™Off-Highway TechCrawl Control (CRAWL)10 with Multi-Terrain Select (MTS)Off-roadApproach/departure/breakover angle (degrees)32 / 23.5 / 21Ground clearance (in.)9.4SteeringTurning circle diameter, curb-to-curb (ft.)40.6Exterior Dimensions (in.)Overall height70.6Overall width75.2Overall length212.3Wheelbase127.4Bed length60.5Bed height19.1Bed width (between wheelwells)41.5Track (front/rear)63/63.2Interior dimensions (in.) (front/rear-seat)Head room39.7 / 38.3Hip room57.2 / 56.3Leg room42.9 / 32.6Shoulder room58.3 / 58.9EPA passenger volume (cu. ft.) (front/rear)57.5 / 42.6Page 5262
Ratios4x4 transfer case ratio (high/low)1.00:1/2.57:1Differential ratio (automatic transmission)3.909WeightCurb weight (lb.) (@33% options)4445Payload (lb.)111155Body ConstructionGross Combined Weight Rating (GCWR) (lb.)11360CapacitySeating capacity5TowingMaximum towing capacity (lb.)126400Tongue load (lb.)640Weights/CapacitiesTowingClass-IV towing hitch receiver,12 ATF cooler (not available on manual transmission), engine oil cooler, power steeringcooler, 130-amp alternator, 4- and 7-pin connector with converter, and Trailer-Sway Control (TSC)13(V6 only)TiresSpareFull-sizePage 6263
YOUR TACOMA FEATURESS = Standard O = Optional — = Not Available P = Feature is available as part of an option package.EXTERIOR5-ft. Short BedSProjector-beam headlights with LED Daytime Running Lights (DRL) andintegrated wide-angle fog lightsSGray grille with smoked finish, color-keyed heated power outside mirrorswith turn signal indicators, color-keyed door handles, black overfendersand chrome rear bumperSFiber-reinforced Sheet-Molded Composite (SMC) inner bed with steel outerpanels, storage compartments and rail caps, with easy lower, lockable andremovable tailgateSDeck rail system with four adjustable tie-down cleats and four fixed cargobed tie-down pointsS120V/400W14 deck-mounted AC power outletS16-in. machined-contrast alloy wheels with P265/70R16 tiresSVariable intermittent windshield wipers with mist cycleSSkid plate(s): on engine/front suspensionSIntegrated color-keyed tailgate spoilerSINTERIORSmart Key System on driver and front passenger doors with Push ButtonStart (not available on M/T)SAnalog instrumentation with speedometer, tachometer, coolanttemperature and fuel gauges; 4.2-in. color Multi-Information Display (MID)with outside temperature, odometer, tripmeters, average fuel economyand inclinometer with roll/pitch displaysSQi-compatible wireless smartphone and mobile devicecharging.15Compatible smartphone is placed on top of the powertransmission pad.SAuto-dimming day/night rearview mirrorSFabric-trimmed seats; 10-way power-adjustable driver’s seat including 2-way lumbar support; 4-way adjustable front passenger seatSLeather-trimmed tilt/telescopic steering wheel with audio andBluetooth®16hands-free phone controlsSLeather-trimmed shift leverSThree total USB ports: one USB media port, two USB charge ports17SPower sliding rear window with privacy glass (Double Cab V6 only)SFront dual zone automatic climate control with air filter and individualtemperature settings for driver and front passengerSPower windows and door locksSAUDIO MULTIMEDIAAudio—includes 8-in. touchscreen, six speakers, Android Auto™18 & AppleCarPlay®19 & Amazon Alexa20 compatible, hands-free phone capability andmusic streaming16 via Bluetooth®16 wireless technology, SiriusXM®21 with 3-month Platinum Plan trial subscription.22 See toyota.com/audio-multimediafor details.SSAFETY/CONVENIENCEStar Safety System™—includes Vehicle Stability Control (VSC),23 TractionControl (TRAC), Anti-lock Brake System (ABS) with Electronic Brake-forceDistribution (EBD), Brake Assist (BA)24 and Smart Stop Technology® (SST)25SToyota Safety Sense™ P </a>(TSS-P):26 Pre-Collision System w/PedestrianDetection (PCS w/PD),27 Dynamic Radar Cruise Control (DRCC),28 LaneDeparture Alert,29 Automatic High Beams (AHB)30SDriver and front passenger active headrests31SDriver and front passenger Advanced Airbag System32SLATCH (Lower Anchors and Tethers for CHildren) includes lower anchorsfor front passenger seats on Access Cab and outboard rear seats onDouble CabSTire Pressure Monitor System (TPMS)33 with individual tire location alertSClass-IV towing hitch receiver,12 ATF cooler (not available on manualtransmission), engine oil cooler, power steering cooler, 130-amp alternator,4- and 7-pin connector with converter, and Trailer-Sway Control (TSC)13 (V6only)SChild-protector rear door locksSDriver and front passenger seat-mounted side airbags, driver and frontpassenger knee airbags and front and rear Roll-sensing Side CurtainAirbags (RSCA)32SEngine immobilizer34SCONNECTED SERVICESSafety Connect®</a>35 — includes Emergency Assistance button, enhancedRoadside Assistance,36 Automatic Collision Notification and Stolen VehicleLocator.37 Subscription required after trial.38 4G network dependent.—Wi-Fi Connect</a>39 — includes AT&T Wi-Fi hotspot. Subscription requiredafter trial.40 4G network dependent.—Service Connect </a>41 — receive personalized maintenance updates andvehicle health reports. Subscription required after trial.42 4G networkdependent.—Page 7264
YOUR TACOMA FEATURESS = Standard O = Optional — = Not Available P = Feature is available as part of an option package.CONNECTED SERVICES (continued)Remote Connect</a>43 — remotely interact with your vehicle through theToyota app44 via your smartwatch,45 Amazon Alexa-enabled devices,20 andGoogle Assistant™-enabled devices.46 Allowing you to lock/unlock doors,start and stop the vehicle, locate your last parked location, check vehiclestatus and monitor guest drivers. Subscription required after trial.47 4Gnetwork dependent.—Page 8265
YOUR 2023TUNDRAEXTERIOR COLOR:Supersonic Red1INTERIOR COLOR:Black SofTex® 2City MPG**17Highway MPG22Here's the Tundra Limited 4x4 CrewMax 5.5-Ft. Bed YOUBUILTStarting MSRP:*Tundra Limited$54,515.00Exterior Color:Supersonic Red1$425.00Delivery, Processing and Handling Fee:$1,795.00Tundra Limited 4x4 CrewMax 5.5-Ft.BedOptions:TRD Off-Road PackagePVM + BSM Tow Mirrors50 State Emissions$3,340.00Accessories:All-Weather Floor Liners3Dual Step Running Boards - Black3$889.00Total MSRP:***$60,964.00* MSRP excludes the Delivery, Processing, and Handling Fee of $1,095 for Cars (GR86, Avalon, Avalon HV, Camry, Camry HV, Corolla, Corolla HV, Corolla HB, GR Corolla, Mirai, Prius, Prius Prime, GR Supra, Toyota Crown), $1,335 forSUV/Van/Small Truck (4Runner, bZ4X, C-HR, Corolla Cross, Corolla Cross HEV, Highlander, Highlander HV, RAV4, RAV4 HV, RAV4 Prime, Sienna, Tacoma, Venza), $1,595 for Large SUV (Sequoia), and $1,795 for Large Truck (Tundraand Tundra Hybrid). (Historically, vehicle manufacturers and distributors have charged a separate fee for processing, handling and delivering vehicles to dealerships. Toyota's charge for these services is called the "Delivery,Processing and Handling Fee" and is based on the value of the processing, handling and delivery services Toyota provides as well as Toyota's overall pricing structure and may be subject to change at any time. Toyota may make aprofit on the Delivery, Processing and Handling Fee.) Excludes taxes, license, title and available or regionally required equipment. The Delivery, Processing and Handling Fee in AL, AR, FL, GA, LA, MS, NC, OK, SC and TX will be higher.The published prices do not apply to Puerto Rico and the U.S. Virgin Islands. Actual dealer price will vary. ** EPA-estimated or projected EPA-estimated4 mpg rating. Use for comparison purposes only. Your mileage will vary for manyreasons, including your vehicle's condition and how/where you drive. See www.fueleconomy.gov. *** Manufacturer's Suggested Retail Price, includes the Delivery, Processing and Handling Fee. (Historically, vehicle manufacturers anddistributors have charged a separate fee for processing, handling and delivering vehicles to dealerships. Toyota's charge for these services is called the "Delivery, Processing and Handling Fee" and is based on the value of theprocessing, handling and delivery services Toyota provides as well as Toyota's overall pricing structure. Toyota may make a profit on the Delivery, Processing and Handling Fee.) Excludes taxes, license, title and available or regionallyrequired equipment. The Delivery, Processing and Handling Fee in AL, AR, FL, GA, LA, MS, NC, OK, SC and TX will be higher. The published prices do not apply to Puerto Rico and the U.S. Virgin Islands. Actual dealer price will vary.Page 9266
YOUR TUNDRA SPECIFICATIONSPriceStarting MSRP5$54,515Mileage estimatesMileage estimates (mpg city/highway/combined)6717/22/19ToyotaCareNo cost maintenance plan8$0 (No Cost)24-hour Roadside Assistance8$0 (No Cost)TiresType265/60R20 all-season tiresSpareSpare — full-size mounted under bodyMechanical/PerformanceEnginei-FORCE 3.4L Twin-Turbo V6, 389 hp @ 5200 rpm, 479 lb.-ft. @ 2400 rpmValvetrain24-valve DOHC aluminum cylinder heads with Dual Variable Valve Timing with intelligence (VVT-i); 3445 c.c. aluminumengine block, 85.5 x 100 (mm.) bore x stroke, 10.4:1 compression ratioIntakeTwin turbochargers with electric wastegate valve actuators and water-cooled intercoolerFuel SystemD-4ST direct-injection and port-injection fuel systemIgnition SystemStop and Start Engine System (S&S)9Ignition SystemConventional 12V10 starterExhaust systemStainless steel exhaust systemEmission ratingLow Emission Vehicle III (LEV-III)Drive ModesEco, Normal and Sport driving modesTransmission10-speed Electronically Controlled automatic Transmission with intelligence (ECT-i), sequential shift mode, anduphill/downhill shift logicDrivetrain4WDemand part-time 4-Wheel Drive with electronically controlled 2-speed transfer case (high/low range) andAutomatic Limited-Slip Differential (Auto LSD)11SuspensionIndependent double-wishbone front suspension; coil spring multi-link rear suspensionSteeringElectric Power Steering (EPS); power-assisted rack-and-pinionBrakesPower-assisted ventilated 13.9-in. front disc brakes with opposed dual-piston brake calipers; ventilated 13.6-in. rear discbrakes with single-piston calipersBrakesElectronically Controlled Braking (ECB) systemBrakesElectric Parking Brake (EPB)12Body/FrameFully boxed high-strength steel ladder frame with hydraulic cab mountsBody/FrameUltra high-strength steel cabin construction with aluminum hood and front door panelsBody/FrameActive aero front spoilerBody/FrameActive grille shuttersTowingClass-IV towing hitch receiver and wiring harness with 7-pin/4-pin connector13TowingIntegrated Trailer Brake Controller (ITBC)14with Multi-Information Display (MID) screen and trailer brake type, gain andmanual trailer brake output controls13Drive ModesTOW/HAUL driving modes13Off-roadEngine and body undercoversTowingTrailer-Sway Control (TSC)15Ratios1st gear4.922nd gear3.263rd gear2.354th gear1.94Page 10267
5th gear1.536th gear1.197th gear1.008th gear0.809th gear0.6610th gear0.61Reverse4.30Axle ratio3.31SteeringSteering wheel turns, lock-to-lock3.4Turning circle diameter, curb-to-curb (ft.)48.6Off-roadMinimum approach/departure angle (degrees)21.0 / 24.0Minimum ground clearance (in.)9.4Exterior dimensions (in.)Bed depth20.9Bed width (total/between wheelwells)58.7 / 48.7Bed length65.6Wheelbase145.7Overall length233.6Track width (front/rear)68.4 / 68.4Overall width80.2Overall height78.0Interior dimensions, front/rear (in.)Shoulder room65.0 / 62.4Leg room41.2 / 41.6Hip room62.6 / 60.5Head room41.0 / 38.5TowingMaximum towing capacity (lb.)1311,120Weights/CapacitiesMaximum payload (lb.)161,740Gross Vehicle Weight Rating (GVWR) (lb.)7,230Curb Weight (lb.)Base curb weight (lb.)5,490SeatingSeating capacity5Fuel SystemStandard fuel tank (gal.)32.2Page 11268
YOUR TUNDRA FEATURESS = Standard O = Optional — = Not Available P = Feature is available as part of an option package.EXTERIOR20-in. gray-painted and machined-finish alloy wheelsSLED headlights with Daytime Running Lights (DRL), auto on/off feature,and manual leveling adjustmentSLED fog lightsSLED taillightsSGray-painted horizontal-bar grille with satin chrome surroundSWasher-linked variable intermittent windshield wipersSHeated power auto-dimming outside mirror with turn signal and blind spotwarning indicators,17 and power-folding and reverse tilt-down featuresS5.5-ft. Short BedSAluminum-reinforced composite bed constructionSDeck rail system18with four adjustable tie-down cleats and fxed cargo bedtie-down pointsSTailgate release bump switch, located in driver's-side taillightS"TUNDRA" stamped easy lower and lift tailgate with smart switch releaseSLED center high-mount stop light (CHMSL) with integrated cargo lightsSLED Trailer Reverse Assist (TRA) lightSGloss-black-painted A-pillarSBlack roof-mounted shark-fin antennaSChrome "TUNDRA" and "LIMITED" door badges, door handles and windowmolding; color-keyed mirror caps and tailgate spoiler; gray-paintedoverfendersS"4x4" tailgate badgeSFront door handles with touch-sensor lock/unlock featureSINTERIORSmart Key System with Push Button Start; remote keyless entry with lock,unlock, panic and tailgate release functions, and remote illuminated entrySPower vertical rear window with defogger and privacy glassSAcoustic laminated windshieldSPower windows with one-touch auto up/down and jam protectionSFront and rear LED maplightsSIlluminated center console storage bin and glove boxSSoft-touch instrument panel, center console and door surfacesSLeather shift knobSBackup camera19with projected pathSDrive Mode Select (DMS) switch and dialSRear-seat air ventsSFixed center console with gated shift lever, driving controls, four cupholders, and center storage binSFront 12V10 auxiliary power outletSOverhead console with rear window control, sunglasses storage and SafetyConnect®20SFront and rear assist gripsSCombination meter with analog gauges and 4.2-in. color TFT Multi-Information Display (MID) with fuel economy, Driver Assist, vehicle/tripinformation, and warning messagesSThin-bezel auto-dimming rearview mirror with HomeLink®21universaltransceiverSSofTex®-trimmed2 seats; 8-way power-adjustable driver and frontpassenger seats with 2-way power-adjustable lumbar supportSDriver's-seat memory functionSHeated front seatsSHeated and ventilated front seatsS60/40 split, folding rear seat with center armrest and cup holdersSRear under-seat storage compartment with removable and adjustablepartitionsSDual zone automatic climate control with air filtration and individualtemperature settings for driver and front passengerSLeather-trimmed manual tilt/telescopic steering wheel with phone, audio,display/infotainment, and Driver Assist controlsSAUDIO MULTIMEDIA14-in. Toyota Audio Multimedia touchscreen with 9-speaker audio system,wireless Apple CarPlay®22& Android Auto™23 compatible, SiriusXM®24 with3-month Platinum Plan trial subscription.25 See toyota.com/audio-multimedia for details.SPage 12269
YOUR TUNDRA FEATURESS = Standard O = Optional — = Not Available P = Feature is available as part of an option package.SAFETY/CONVENIENCE (continued)Toyota Safety Sense™ 2.5 (TSS 2.5) </strong>26 Pre-Collision System withPedestrian Detection (PCS w/PD),27 Full-Speed Range Dynamic RadarCruise Control (DRCC),28 Lane Departure Alert with Steering Assist (LDAw/SA),29 Lane Tracing Assist (LTA),30 Automatic High Beams (AHB),31 RoadSign Assist (RSA)32SBlind Spot Monitor (BSM)17 with Rear Cross-Traffic Alert (RCTA)33 and TrailerMerge WarningSFront and Rear Parking Assist with Automatic Braking34SEight total airbags, including driver and passenger side, knee and curtainairbags35SLATCH (Lower Anchors and Tethers for CHildren) includes lower anchors onall outboard second-row rear seatsSChild-protector rear door locks and power window lockout controlSSafety Connect®20— includes Emergency Assistance, Stolen VehicleLocator,36 Roadside Assistance37 and Automatic Collision Notification.Available by subscription. Complimentary one-year trial subscription.38(includes roof-mounted shark-fin antenna)SStar Safety System™— includes Vehicle Stability Control (VSC),39 TractionControl (TRAC), Anti-lock Brake System (ABS) with Electronic Brake-forceDistribution (EBD), Brake Assist (BA)40 and Smart Stop Technology® (SST)41SDrive-Start Control (DSC)SHill Start Assist Control (HAC)42S3-point seatbelts for all seating positions; driver-side Emergency LockingRetractor (ELR) and Automatic/Emergency Locking Retractor (ALR/ELR) onall passenger seatbeltsSTire Pressure Monitor System (TPMS)43SDriver and front passenger active headrests44SCONNECTED SERVICESSafety Connect®</a>20 — includes Emergency Assistance button, enhancedRoadside Assistance,37 Automatic Collision Notification and Stolen VehicleLocator.36 Subscription required after trial.45 4G network dependent.—Wi-Fi Connect</a>46 — includes AT&T Wi-Fi hotspot and IntegratedStreaming (Apple Music®47 and Amazon Music™48) compatibility. 1-monthtrial subscription for music services. Subscription required after trial.49 4Gnetwork dependent.—Service Connect </a>50 — receive personalized maintenance updates andvehicle health reports. Subscription required after trial.51 4G networkdependent.—Remote Connect</a>52 — remotely interact with your vehicle through theToyota app53 via your smartwatch,54 Amazon Alexa-enabled devices,55 andGoogle Assistant™-enabled devices.56 Allowing you to lock/unlock doors,start and stop the vehicle, locate your last parked location, check vehiclestatus and monitor guest drivers. Subscription required after trial.57 4Gnetwork dependent.—Drive Connect </strong>58 — includes Cloud Navigation59 with GooglePoints of Interest (POI) data, Intelligent Assistant60 with Hey, Toyota, andDestination Assist.61 Subscription required after trial.62 4G networkdependent.—Page 13270
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YOUR 2023TACOMAEXTERIOR COLOR:Ice CapINTERIOR COLOR:Black with Red AccentStitching FabricCity MPG**19Highway MPG24Here's the Tacoma SR5 3.5L V6 engine AT 4x2 5-ft. bedDouble Cab YOU BUILTStarting MSRP:*Tacoma SR5$34,130.00Delivery, Processing and Handling Fee:$1,335.00Tacoma SR5 3.5L V6 engine AT 4x2 5-ft.bed Double CabOptions:SX Package50 State Emissions$500.00Total MSRP:***$35,965.00* MSRP excludes the Delivery, Processing, and Handling Fee of $1,095 for Cars (GR86, Avalon, Avalon HV, Camry, Camry HV, Corolla, Corolla HV, Corolla HB, GR Corolla, Mirai, Prius, Prius Prime, GR Supra, Toyota Crown), $1,335 forSUV/Van/Small Truck (4Runner, bZ4X, C-HR, Corolla Cross, Corolla Cross HEV, Highlander, Highlander HV, RAV4, RAV4 HV, RAV4 Prime, Sienna, Tacoma, Venza), $1,595 for Large SUV (Sequoia), and $1,795 for Large Truck (Tundraand Tundra Hybrid). (Historically, vehicle manufacturers and distributors have charged a separate fee for processing, handling and delivering vehicles to dealerships. Toyota's charge for these services is called the "Delivery,Processing and Handling Fee" and is based on the value of the processing, handling and delivery services Toyota provides as well as Toyota's overall pricing structure and may be subject to change at any time. Toyota may make aprofit on the Delivery, Processing and Handling Fee.) Excludes taxes, license, title and available or regionally required equipment. The Delivery, Processing and Handling Fee in AL, AR, FL, GA, LA, MS, NC, OK, SC and TX will be higher.The published prices do not apply to Puerto Rico and the U.S. Virgin Islands. Actual dealer price will vary. ** EPA-estimated or projected EPA-estimated1 mpg rating. Use for comparison purposes only. Your mileage will vary for manyreasons, including your vehicle's condition and how/where you drive. See www.fueleconomy.gov. *** Manufacturer's Suggested Retail Price, includes the Delivery, Processing and Handling Fee. (Historically, vehicle manufacturers anddistributors have charged a separate fee for processing, handling and delivering vehicles to dealerships. Toyota's charge for these services is called the "Delivery, Processing and Handling Fee" and is based on the value of theprocessing, handling and delivery services Toyota provides as well as Toyota's overall pricing structure. Toyota may make a profit on the Delivery, Processing and Handling Fee.) Excludes taxes, license, title and available or regionallyrequired equipment. The Delivery, Processing and Handling Fee in AL, AR, FL, GA, LA, MS, NC, OK, SC and TX will be higher. The published prices do not apply to Puerto Rico and the U.S. Virgin Islands. Actual dealer price will vary.Page 15272
YOUR TACOMA SPECIFICATIONSMileage EstimatesMileage estimates (MPG city/highway/combined)219/24/21Fuel tank (gal.)21.1PriceStarting msrp3$34,130ToyotaCareNo cost maintenance4$0 (NO COST)24-hour Roadside Assistance4$0 (NO COST)Mechanical/PerformanceEngine3.5-liter V6 direct-injection Atkinson-cycle engine with 278 hp @ 6000 rpm/265 lb.-ft. @ 4600 rpmEngine3.5-liter V6 DOHC 24-valve direct-injection Atkinson-cycle engine with VVT-iW (Variable Valve Timing-intelligent WiderIntake) and VVT-i (Variable Valve Timing-intelligent Exhaust), with 278 hp @ 6000 rpm/265 lb.-ft. @ 4600 rpm (bore xstroke: 94.0 x 83.0 mm.; compression ratio: 11.8)Emission RatingLow Emission Vehicle III (LEV-III)Transmission6-speed Electronically Controlled automatic Transmission with intelligence (ECT-i)DrivetrainRear-Wheel Drive (RWD) with Automatic Limited-Slip Differential (Auto LSD)5Off-roadHill Start Assist Control (HAC)6Body ConstructionOne-piece frame rails with eight cross members and fully boxed front sub-frameSuspensionCoil-spring double-wishbone front suspension and stabilizer bar; leaf spring rear suspension with staggered outboard-mounted gas shock absorbers and stabilizer barSteeringVariable-assist power rack-and-pinion steeringBrakesPower-assisted ventilated front disc brakes; rear drum brakes with tandem booster and Star Safety System™Off-roadApproach/departure/breakover angle (degrees)29 / 23.5 / 21Ground clearance (in.)9.4SteeringTurning circle diameter, curb-to-curb (ft.)40.6Exterior Dimensions (in.)Overall height70.6Overall width74.4Overall length212.3Wheelbase127.4Bed length60.5Bed height19.1Bed width (between wheelwells)41.5Track (front/rear)63/63.2Interior dimensions (in.) (front/rear-seat)Head room39.7 / 38.3Hip room57.2 / 56.3Leg room42.9 / 32.6Shoulder room58.3 / 58.9EPA passenger volume (cu. ft.) (front/rear)57.5 / 42.6RatiosDifferential ratio (automatic transmission)3.909WeightPage 16273
Curb weight (lb.) (@33% options)4205Gross Vehicle Weight Rating (GVWR) (lb.)5600Payload (lb.)71395Body ConstructionGross Combined Weight Rating (GCWR) (lb.)11360CapacitySeating capacity5TowingMaximum towing capacity (lb.)86700Tongue load (lb.)670Weights/CapacitiesTowingClass-IV towing hitch receiver,8 ATF cooler (not available on manual transmission), engine oil cooler, power steeringcooler, 130-amp alternator, 4- and 7-pin connector with converter, and Trailer-Sway Control (TSC)9(V6 only)TiresSpareFull-sizePage 17274
YOUR TACOMA FEATURESS = Standard O = Optional — = Not Available P = Feature is available as part of an option package.EXTERIOR5-ft. Short BedSProjector-beam headlights with turn Daytime Running Lights (DRL) andintegrated fog lightsSCharcoal grille with chrome surround, color-keyed heated power outsidemirrors, door handles and chrome rear bumper (V6 adds color-keyedoverfenders)SFiber-reinforced Sheet-Molded Composite (SMC) inner bed with steel outerpanels, storage compartments and rail caps, with easy lower, lockable andremovable tailgateSDeck rail system with four adjustable tie-down cleats and four fixed cargobed tie-down pointsS16-in. dark gray alloy wheels with P245/75R16 tiresSVariable intermittent windshield wipers with mist cycleSSkid plate(s): on engine/front suspensionSIntegrated color-keyed tailgate spoilerSINTERIORSmart Key System on driver and front passenger doors with Push ButtonStart (not available on M/T)SAnalog instrumentation with speedometer, tachometer, coolanttemperature and fuel gauges; 4.2-in. color Multi-Information Display (MID)with outside temperature, odometer, tripmeters and average fuel economySAuto-dimming day/night rearview mirrorSFabric-trimmed seats; 10-way power-adjustable driver’s seat including 2-way lumbar support; 4-way adjustable front passenger seatSLeather-trimmed tilt/telescopic steering wheel with audio andBluetooth®10hands-free phone controlsSThree total USB ports: one USB media port, two USB charge ports11SPower sliding rear window with privacy glass (Double Cab V6 only)SFront dual zone automatic climate control with air filter and individualtemperature settings for driver and front passengerSPower windows and door locksSAUDIO MULTIMEDIAAudio—includes 8-in. touchscreen, six speakers, Android Auto™12 & AppleCarPlay®13 & Amazon Alexa14 compatible, hands-free phone capability andmusic streaming10 via Bluetooth®10 wireless technology, SiriusXM®15 with 3-month Platinum Plan trial subscription.16 See toyota.com/audio-multimediafor details.SSAFETY/CONVENIENCEStar Safety System™—includes Vehicle Stability Control (VSC),17 TractionControl (TRAC), Anti-lock Brake System (ABS) with Electronic Brake-forceDistribution (EBD), Brake Assist (BA)18 and Smart Stop Technology® (SST)19SToyota Safety Sense™ P </a>(TSS-P):20 Pre-Collision System w/PedestrianDetection (PCS w/PD),21 Dynamic Radar Cruise Control (DRCC),22 LaneDeparture Alert,23 Automatic High Beams (AHB)24SDriver and front passenger active headrests25SDriver and front passenger Advanced Airbag System26SLATCH (Lower Anchors and Tethers for CHildren) includes lower anchorsfor front passenger seats on Access Cab and outboard rear seats onDouble CabSTire Pressure Monitor System (TPMS)27 with individual tire location alertSClass-IV towing hitch receiver,8 ATF cooler (not available on manualtransmission), engine oil cooler, power steering cooler, 130-amp alternator,4- and 7-pin connector with converter, and Trailer-Sway Control (TSC)9 (V6only)SChild-protector rear door locksSDriver and front passenger seat-mounted side airbags, driver and frontpassenger knee airbags and front and rear Roll-sensing Side CurtainAirbags (RSCA)26SEngine immobilizer28SCONNECTED SERVICESSafety Connect®</a>29 — includes Emergency Assistance button, enhancedRoadside Assistance,30 Automatic Collision Notification and Stolen VehicleLocator.31 Subscription required after trial.32 4G network dependent.—Wi-Fi Connect</a>33 — includes AT&T Wi-Fi hotspot. Subscription requiredafter trial.34 4G network dependent.—Service Connect </a>35 — receive personalized maintenance updates andvehicle health reports. Subscription required after trial.36 4G networkdependent.—Page 18275
YOUR 2023TACOMAEXTERIOR COLOR:Ice CapINTERIOR COLOR:Cement/Black FabricCity MPG**18Highway MPG22Here's the Tacoma TRD Off-Road 3.5L V6 engine AT 4x4 5-ft. bed Double Cab YOU BUILTStarting MSRP:*Tacoma TRD Off-Road$38,905.00Delivery, Processing and Handling Fee:$1,335.00Tacoma TRD Off-Road 3.5L V6 engineAT 4x4 5-ft. bed Double CabOptions:LED Headlights and Fog Lights50 State Emissions$485.00Accessories:All-Weather Floor Liners1$179.00Total MSRP:***$40,904.00* MSRP excludes the Delivery, Processing, and Handling Fee of $1,095 for Cars (GR86, Avalon, Avalon HV, Camry, Camry HV, Corolla, Corolla HV, Corolla HB, GR Corolla, Mirai, Prius, Prius Prime, GR Supra, Toyota Crown), $1,335 forSUV/Van/Small Truck (4Runner, bZ4X, C-HR, Corolla Cross, Corolla Cross HEV, Highlander, Highlander HV, RAV4, RAV4 HV, RAV4 Prime, Sienna, Tacoma, Venza), $1,595 for Large SUV (Sequoia), and $1,795 for Large Truck (Tundraand Tundra Hybrid). (Historically, vehicle manufacturers and distributors have charged a separate fee for processing, handling and delivering vehicles to dealerships. Toyota's charge for these services is called the "Delivery,Processing and Handling Fee" and is based on the value of the processing, handling and delivery services Toyota provides as well as Toyota's overall pricing structure and may be subject to change at any time. Toyota may make aprofit on the Delivery, Processing and Handling Fee.) Excludes taxes, license, title and available or regionally required equipment. The Delivery, Processing and Handling Fee in AL, AR, FL, GA, LA, MS, NC, OK, SC and TX will be higher.The published prices do not apply to Puerto Rico and the U.S. Virgin Islands. Actual dealer price will vary. ** EPA-estimated or projected EPA-estimated2 mpg rating. Use for comparison purposes only. Your mileage will vary for manyreasons, including your vehicle's condition and how/where you drive. See www.fueleconomy.gov. *** Manufacturer's Suggested Retail Price, includes the Delivery, Processing and Handling Fee. (Historically, vehicle manufacturers anddistributors have charged a separate fee for processing, handling and delivering vehicles to dealerships. Toyota's charge for these services is called the "Delivery, Processing and Handling Fee" and is based on the value of theprocessing, handling and delivery services Toyota provides as well as Toyota's overall pricing structure. Toyota may make a profit on the Delivery, Processing and Handling Fee.) Excludes taxes, license, title and available or regionallyrequired equipment. The Delivery, Processing and Handling Fee in AL, AR, FL, GA, LA, MS, NC, OK, SC and TX will be higher. The published prices do not apply to Puerto Rico and the U.S. Virgin Islands. Actual dealer price will vary.Page 19276
YOUR TACOMA SPECIFICATIONSMileage EstimatesMileage estimates (MPG city/highway/combined)318/22/20Fuel tank (gal.)21.1PriceStarting msrp4$38,905ToyotaCareNo cost maintenance5$0 (NO COST)24-hour Roadside Assistance5$0 (NO COST)Mechanical/PerformanceEngine3.5-liter V6 direct-injection Atkinson-cycle engine with 278 hp @ 6000 rpm/265 lb.-ft. @ 4600 rpmEngine3.5-liter V6 DOHC 24-valve direct-injection Atkinson-cycle engine with VVT-iW (Variable Valve Timing-intelligent WiderIntake) and VVT-i (Variable Valve Timing-intelligent Exhaust), with 278 hp @ 6000 rpm/265 lb.-ft. @ 4600 rpm (bore xstroke: 94.0 x 83.0 mm.; compression ratio: 11.8)Emission RatingLow Emission Vehicle III (LEV-III)Transmission6-speed Electronically Controlled automatic Transmission with intelligence (ECT-i)Drivetrain4WDemand part-time 4WD with electronically controlled transfer case and Automatic Limited-Slip Differential (AutoLSD)6Off-roadHill Start Assist Control (HAC)7Off-roadElectronically controlled locking rear differentialBody ConstructionOne-piece frame rails with eight cross members and fully boxed front sub-frameSuspensionCoil-spring double-wishbone front suspension and stabilizer bar; leaf spring rear suspension with staggered outboard-mounted gas shock absorbers and stabilizer barSuspensionTRD Off-Road tuned suspension with Bilstein®8 shocksSteeringVariable-assist power rack-and-pinion steeringBrakesPower-assisted ventilated front disc brakes; rear drum brakes with tandem booster and Star Safety System™Off-Highway TechCrawl Control (CRAWL)9 with Multi-Terrain Select (MTS)Off-roadApproach/departure/breakover angle (degrees)32 / 23.5 / 21Ground clearance (in.)9.4SteeringTurning circle diameter, curb-to-curb (ft.)40.6Exterior Dimensions (in.)Overall height70.6Overall width75.2Overall length212.3Wheelbase127.4Bed length60.5Bed height19.1Bed width (between wheelwells)41.5Track (front/rear)63/63.2Interior dimensions (in.) (front/rear-seat)Head room39.7 / 38.3Hip room57.2 / 56.3Leg room42.9 / 32.6Shoulder room58.3 / 58.9EPA passenger volume (cu. ft.) (front/rear)57.5 / 42.6Page 20277
Ratios4x4 transfer case ratio (high/low)1.00:1/2.57:1Differential ratio (automatic transmission)3.909WeightCurb weight (lb.) (@33% options)4445Payload (lb.)101155Body ConstructionGross Combined Weight Rating (GCWR) (lb.)11360CapacitySeating capacity5TowingMaximum towing capacity (lb.)116400Tongue load (lb.)640Weights/CapacitiesTowingClass-IV towing hitch receiver,11 ATF cooler (not available on manual transmission), engine oil cooler, power steeringcooler, 130-amp alternator, 4- and 7-pin connector with converter, and Trailer-Sway Control (TSC)12(V6 only)TiresSpareFull-sizePage 21278
YOUR TACOMA FEATURESS = Standard O = Optional — = Not Available P = Feature is available as part of an option package.EXTERIOR5-ft. Short BedSProjector-beam headlights with LED Daytime Running Lights (DRL) andintegrated wide-angle fog lightsSGray grille with smoked finish, color-keyed heated power outside mirrorswith turn signal indicators, color-keyed door handles, black overfendersand chrome rear bumperSFiber-reinforced Sheet-Molded Composite (SMC) inner bed with steel outerpanels, storage compartments and rail caps, with easy lower, lockable andremovable tailgateSDeck rail system with four adjustable tie-down cleats and four fixed cargobed tie-down pointsS120V/400W13 deck-mounted AC power outletS16-in. machined-contrast alloy wheels with P265/70R16 tiresSVariable intermittent windshield wipers with mist cycleSSkid plate(s): on engine/front suspensionSIntegrated color-keyed tailgate spoilerSINTERIORSmart Key System on driver and front passenger doors with Push ButtonStart (not available on M/T)SAnalog instrumentation with speedometer, tachometer, coolanttemperature and fuel gauges; 4.2-in. color Multi-Information Display (MID)with outside temperature, odometer, tripmeters, average fuel economyand inclinometer with roll/pitch displaysSQi-compatible wireless smartphone and mobile devicecharging.14Compatible smartphone is placed on top of the powertransmission pad.SAuto-dimming day/night rearview mirrorSFabric-trimmed seats; 10-way power-adjustable driver’s seat including 2-way lumbar support; 4-way adjustable front passenger seatSLeather-trimmed tilt/telescopic steering wheel with audio andBluetooth®15hands-free phone controlsSLeather-trimmed shift leverSThree total USB ports: one USB media port, two USB charge ports16SPower sliding rear window with privacy glass (Double Cab V6 only)SFront dual zone automatic climate control with air filter and individualtemperature settings for driver and front passengerSPower windows and door locksSAUDIO MULTIMEDIAAudio—includes 8-in. touchscreen, six speakers, Android Auto™17 & AppleCarPlay®18 & Amazon Alexa19 compatible, hands-free phone capability andmusic streaming15 via Bluetooth®15 wireless technology, SiriusXM®20 with 3-month Platinum Plan trial subscription.21 See toyota.com/audio-multimediafor details.SSAFETY/CONVENIENCEStar Safety System™—includes Vehicle Stability Control (VSC),22 TractionControl (TRAC), Anti-lock Brake System (ABS) with Electronic Brake-forceDistribution (EBD), Brake Assist (BA)23 and Smart Stop Technology® (SST)24SToyota Safety Sense™ P </a>(TSS-P):25 Pre-Collision System w/PedestrianDetection (PCS w/PD),26 Dynamic Radar Cruise Control (DRCC),27 LaneDeparture Alert,28 Automatic High Beams (AHB)29SDriver and front passenger active headrests30SDriver and front passenger Advanced Airbag System31SLATCH (Lower Anchors and Tethers for CHildren) includes lower anchorsfor front passenger seats on Access Cab and outboard rear seats onDouble CabSTire Pressure Monitor System (TPMS)32 with individual tire location alertSClass-IV towing hitch receiver,11 ATF cooler (not available on manualtransmission), engine oil cooler, power steering cooler, 130-amp alternator,4- and 7-pin connector with converter, and Trailer-Sway Control (TSC)12 (V6only)SChild-protector rear door locksSDriver and front passenger seat-mounted side airbags, driver and frontpassenger knee airbags and front and rear Roll-sensing Side CurtainAirbags (RSCA)31SEngine immobilizer33SCONNECTED SERVICESSafety Connect®</a>34 — includes Emergency Assistance button, enhancedRoadside Assistance,35 Automatic Collision Notification and Stolen VehicleLocator.36 Subscription required after trial.37 4G network dependent.—Wi-Fi Connect</a>38 — includes AT&T Wi-Fi hotspot. Subscription requiredafter trial.39 4G network dependent.—Service Connect </a>40 — receive personalized maintenance updates andvehicle health reports. Subscription required after trial.41 4G networkdependent.—Page 22279
YOUR TACOMA FEATURESS = Standard O = Optional — = Not Available P = Feature is available as part of an option package.CONNECTED SERVICES (continued)Remote Connect</a>42 — remotely interact with your vehicle through theToyota app43 via your smartwatch,44 Amazon Alexa-enabled devices,19 andGoogle Assistant™-enabled devices.45 Allowing you to lock/unlock doors,start and stop the vehicle, locate your last parked location, check vehiclestatus and monitor guest drivers. Subscription required after trial.46 4Gnetwork dependent.—Page 23280
Cost Estimates
Line B Supporting Documentation
Cost History Information from Public Works Dept:
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281
Cost Estimates
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282
Cost Estimates
Page 26
283
Cost Estimates
Page 27
284
Cost Estimates
Page 28
285
Cost Estimates
$33,580.06 for 3 New Vehicle Upfits
$11,193 for 1 New Vehicle Upfits
$268,632 for 24 New Vehicle Upfits
Page 29
286
Authorize Execution of an
Agreement with Toyota for
Vehicles for Marine Safety,
Beach Parking, and
Beach Maintenance
Huntington Beach Fire Department
February 21, 2023
287
Operational History
●2008 -First Contract with Toyota
○Fleet Consisted of:
■10 Tacomas
■3 Tundras
■1 Sequoia
■1 Rav4
■2 Tacomas 2x2 - Parking
■2 Tacomas 4x4 -Beach Maintenance
●2013 -Increased Jurisdiction to include Sunset Beach
○Continued with the Marine Safety fleet of 15 vehicles.
●2020 -Increased Operation -Created a need for more response units
○Increased operation w/ actively guarding/patrolling all beaches within
Huntington Harbour.
○Added an additional (1) on-call unit for safety for a total of
(2) on-call units staffed per night. 288
Operational Expansion
●To meet the needs for our current operation, there is a total
increase of 5 vehicles in this proposed agreement.
●Current Fleet: 19 Total
○10 Tacomas
○3 Tundras
○1 Sequoia
○1 Rav4
○2 Tacomas 2x2 - Parking
○2 Tacomas 4x4 -Beach Maintenance
●New Fleet Request: 24 Total
○11 Tacomas
○8 Tundras
○1 Rav4
○2 Tacomas 2x2 - Parking
○2 Tacomas 4x4 -Beach Maintenance
●Total Increase of 5 Vehicles 289
Cost Savings
290
Costs
291
Net Cost Savings
292
Recommended Action:
Authorize execution of an agreement with Toyota for vehicles for
Marine Safety, Beach Parking, and Beach Maintenance (attached).
Alternative Action(s):
1)Do not authorize execution of an agreement with Toyota for vehicles
for Marine Safety, Beach Parking, and Beach Maintenance, and
direct staff to directly purchase 24 vehicles with new budget
appropriations of City funds; or
2) Do not approve the agreement and direct staff accordingly.
293
Questions?
294
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-099 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Scott M. Haberle, Fire Chief
PREPARED BY:Brevyn Mettler, Emergency Management Administrator
Bonnie To, Principal Administrative Analyst
Subject:
Adopt Resolution No. 2023-04 authorizing certain City Officials to execute Grant Applications
and Documents
Statement of Issue:
The City Council is requested to adopt the attached resolution designating specific City officials to
apply for and obtain Emergency Management and Department of Homeland Security Grants,
including but not limited to, Emergency Management Performance Grant, State Homeland Security
Grant, Urban Area Security Initiative, etc. (hereinafter collectively referred to as “Eligible Grants”).
Financial Impact:
There is no financial impact for Eligible Grants that do not have a match requirement or Eligible
Grants that are matched with in-kind administrative expenditures, such as administrative staff time
and other budgeted expenditures. Furthermore, there are no direct costs to the City of Huntington
Beach, and the grants do not obligate the City for any future funding.
For any Eligible Grant that requires direct costs for a match requirement, staff will request for
approval from City Council before accepting these types of Eligible Grants.
Recommended Action:
Adopt Resolution No. 2023-04, “A Resolution of the City Council of the City of Huntington Beach
Authorizing Certain City Officials to Execute Grant Applications and Documents.”
Alternative Action(s):
Do not adopt the resolution and direct staff accordingly.
Analysis:
Over the past several years, the City’s Office of Emergency Management and Homeland Security
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File #:23-099 MEETING DATE:2/21/2023
has obtained many federal and state grants, bringing in funding to improve the Emergency
Management and Homeland Security Program. These grants have been obtained from a number of
federal and state agencies, often with short application and performance timeframes. These grants
include Emergency Management Program (EMPG), Citizen Corps, Hazard Mitigation, AmeriCorps
Plan Writing grants, and Department of Homeland Security grants, such as the Urban Area Security
Initiative (UASI), Metropolitan Medical Response System (MMRS), and other grants. The proposed
resolution (Attachment 1) will allow designated City staff members (City Manager, Chief Financial
Officer, Fire Chief, or the Emergency Management Administrator) to quickly develop and submit
additional applications and execute related documents to obtain grant funding to enhance the
Emergency Management and Homeland Security Program.
These grants allow for enhanced training of emergency response personnel and emergency
managers, creation of training exercises, and purchase of specialized equipment. Resolution No.
2023-04 authorizes certain positions to apply for and obtain Emergency Management and
Department of Homeland Security Grants, including but not limited to, Emergency Management
Performance Grant, State Homeland Security Grant, Urban Area Security Initiative, etc. (hereinafter
collectively referred to as “Eligible Grants”.
There is no financial impact for Eligible Grants that do not have a match requirement. There is no
financial impact for Eligible Grants that are matched with in-kind administrative expenditures, such as
administrative staff time and other budgeted expenditures. There are no direct costs to the City of
Huntington Beach, and the grants do not obligate the City for any future funding.
For any Eligible Grant that requires direct costs for a match requirement, staff will request for
approval from City Council before accepting these types of Eligible Grants.
In 2021, State guidelines were revised to require agencies to adopt this type of resolution every three
(3) years. Previously, it had to be submitted annually. At this time, City staff requests adoption of the
attached resolution authorizing specified City officials to execute grant applications and documents
for Eligible Grants.
It states that these positions are authorized to obtain non-matching grants and matching grants, as
long as they do not require direct costs, but are matched with in-kind administrative expenditures.
Approval of the proposed resolution also facilitates the expeditious spending of these grant funds and
allows the City to maintain consistency with federal and state grant timeframe requirements. In 2021,
State guidelines were revised to require agencies to adopt this type of resolution every three (3)
years. Previously, it had to be submitted annually. At this time, City staff requests adoption of the
attached resolution authorizing specified City officials to execute grant applications and documents.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Financial Sustainability, Public Safety or Other
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File #:23-099 MEETING DATE:2/21/2023
Attachment(s):
1. Resolution No. 2023-04 Authorizing Certain City Officials to Execute Grant Applications and
Documents
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298
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-100 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Scott M. Haberle, Fire Chief
PREPARED BY:Brevyn Mettler, Emergency Management Administrator
Bonnie To, Principal Administrative Analyst
Subject:
Adopt Resolution No. 2023-05 authorizing certain City Officials to execute Applications and
Documents to Obtain Disaster and Emergency Relief
Statement of Issue:
The City Council is requested to adopt the attached resolution designating specific City officials to
apply for and obtain financial assistance for disaster and emergency relief.
Financial Impact:
This resolution would allow the City to apply for and obtain financial assistance for disaster and
emergency relief. There is no financial impact to the General Fund.
Recommended Action:
Adopt Resolution No. 2023-05, “A Resolution of the City Council of the City of Huntington Beach
Authorizing Certain City Officials to Execute Applications and Documents to Obtain Disaster and
Emergency Relief.”
Alternative Action(s):
Do not adopt the resolution and direct staff accordingly.
Analysis:
The attached resolution designates the City Manager, Fire Chief, Police Chief, Chief Financial Officer,
and Emergency Management Administrator as authorized to execute to obtain disaster and
emergency relief. If the attached resolution is approved, the resolution would accompany City claims
for financial reimbursement from the California Office of Emergency Services and the Federal
Emergency Management Agency (FEMA). In conformance with the State of California requirements,
City staff would return to City Council annually to present a similar resolution to obtain the noted
authorizations.
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File #:23-100 MEETING DATE:2/21/2023
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Financial Sustainability, Public Safety or Other
Attachment(s):
1. Resolution No. 2023-05 Authorizing Certain City Officials to Execute Applications and
Documents to Obtain Disaster and Emergency Relief
City of Huntington Beach Printed on 2/16/2023Page 2 of 2
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301
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-139 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Scott M. Haberle, Fire Chief
PREPATED BY:Eric McCoy Deputy Fire Chief
Bonnie To, Principal Administrative Analyst
Subject
Adopt Resolution No. 2023-06 to accept Grant Funds from the California Department of Fish
and Wildlife, Office of Spill Prevention and Response for Oil Response Equipment
Statement of Issue:
The City Council is requested to adopt the attached resolution in order for the City of Huntington
Beach to receive up to $10,000 in oil spill response equipment grant funds.
Financial Impact:
There is no financial impact to the General Fund.
Recommended Action:
Adopt Resolution No. 2023-06, “A Resolution of the City Council of the City of Huntington Beach to
Accept Grant Funds from the California Department of Fish and Wildlife, Office of Spill Prevention
and Response for Oil Spill Response Equipment.”
Alternative Action(s):
Do not adopt the resolution and direct staff accordingly.
Analysis:
The City of Huntington Beach was awarded up to $10,000 for oil spill response equipment. The
grantor requires for the grantee, the City of Huntington Beach, to adopt a resolution to accept grant
funds from the California Department of Fish and Wildlife, Office of Spill Prevention and Response for
Oil Spill Response Equipment. A grant agreement would also need to be signed to accept the grant
for oil spill response equipment in an amount not to exceed $10,000. If Resolution No. 2023-06 is
approved by City Council, then staff will review the agreement with the City Attorney’s Office for City
Attorney review and approval before accepting these grant funds.
The grant would provide an amount not to exceed $10,000 for general operating expenses, which
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File #:23-139 MEETING DATE:2/21/2023
includes for oil spill response equipment staging such as booms for oil response and containment.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Financial Sustainability, Public Safety or Other
Attachment(s):
1. Resolution No. 2023-06 to Accept Grant Funds from the California Department of Fish and
Wildlife, Office of Spill Prevention and Response for Oil Spill Response Equipment
City of Huntington Beach Printed on 2/16/2023Page 2 of 2
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304
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-144 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Eric Parra, Chief of Police
PREPARED BY:Ingrid Ono, Executive Assistant
Subject:
Adopt Ordinance No. 4275 to Amend to Huntington Beach Municipal Code Chapter 13.08.070
Relating to Dogs and Other Animals - Approved for Introduction February 7, 2023 - Vote: 7-0
Statement of Issue:
Huntington Beach Municipal Code (HBMC) Chapter 13.08.070 currently prohibits all animals from
entering the Pier or Beach Area bounded by the Beach Service Road and the Pacific Ocean. There
is an exception for guide dogs, signal dogs, or service dogs; there is also an exception that allows
dogs to enter the beach area commonly known as “Dog Beach,” which extends from 22nd Street to
Seapoint Avenue.
As written, the current code does not provide an exemption for Huntington Beach Police
Department (HBPD) horses, which are regularly used to enhance public safety during special
events and other times as authorized by the Chief of Police. It also does not provide the ability for
an exemption for a special/specific event to include the use of any animals. With an exemption,
and regulated by a specific event permit, such future events could permit dog shows, circus events,
horse rides, carnivals, or other events to enhance tourism and bring additional attention to
Huntington Beach, leading to increased revenue for the City.
Financial Impact:
There is no direct fiscal impact to approve Ordinance No. 4275. However, there is potential for
increased revenue, through fees and tourism, with the permitting of additional specific events where
animals are authorized.
Recommended Action:
Adopt Ordinance No. 4275, “An Ordinance of the City of Huntington Beach Amending Chapter 13.08
of the Huntington Beach Municipal Code Relating to Dogs and Other Animals.”
Alternative Action(s):
Do not approve, and direct staff accordingly.
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File #:23-144 MEETING DATE:2/21/2023
Analysis:
The amended language updates Chapter 13.08 of the Municipal Code to allow the Police
Department’s use of their service animals upon the Pier and Adjacent Beach Areas. It also allows a
specific event permits to be issued to expressly permitted animals on the Pier and Adjacent Beach
Areas, subject to restrictions contained in the specific event permit.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Financial Sustainability, Public Safety or Other
Attachment(s):
1. Ordinance No. 4275
2. Current HBMC 13.08.070
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308
309
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-054 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Sean Crumby, Director of Public Works
PREPARED BY:Andrew Ferrigno, Principal Civil Engineer
Subject:
Award and authorize the execution of a construction contract with Mehta Mechanical
Company, Incorporated, in the amount of $10,648,600 for the Heil Avenue Storm Water Pump
Station Replacement Project, CC-1293
Statement of Issue:
On November 17, 2022, bids were received electronically for the Heil Avenue Storm Water Pump
Station Replacement Project, CC-1293. City Council action is requested to award the construction
contract to Mehta Mechanical Company, Incorporated, which has been identified as the lowest
responsive and responsible bidder.
Financial Impact:
Total funds for the project, including contingency and supplemental expenses, are estimated at
$12,799,000. The City has secured a FEMA Hazard Mitigation Grant for $6,598,950 , which is
budgeted in Account 122288002.82500. The remaining funds required for the project are budgeted
in the Drainage Improvement Fund Account 21188008.82500, ($2,000,000) and in the Infrastructure
Fund Account 31488001.82500 ($4,200,050).
Recommended Action:
A) Accept the lowest responsive and responsible bid submitted by the Mehta Mechanical Company,
Incorporated, in the amount of $10,648,600; and,
B) Authorize the Mayor and the City Clerk to execute a construction contract in a form approved by
the City Attorney.
Alternative Action(s):
Reject all bids. Options for moving forward with the alternate actions include:
·Reject all bids and re-advertise for new construction bids. It is likely that with the current
construction escalation rates, the returning bids will be higher than Mehta’s cost.
·Reject all bids and relinquish grant funds from FEMA and Cal OES. This would result in a loss
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File #:23-054 MEETING DATE:2/21/2023
·Reject all bids and relinquish grant funds from FEMA and Cal OES. This would result in a loss
of $6,598,950 in grant funds and may impact the ability to secure future grants. Additionally,
the City may have to deliver this flood protection project with local City funding.
Analysis:
The existing Heil Avenue Storm Water Pump Station was constructed in the late 1960’s as part of the
original neighborhood development to provide flood protection for the low-lying neighborhood homes.
The existing pumping capacity of the two pumps is deficient for the 100-year storm event. Three
pumps are necessary to provide flood protection and a fourth pump to provide emergency
redundancy in the event of a pump failure or required maintenance. Due to space limitations, it was
not possible to add the additional two pumps at the existing pump station site. Therefore, the new
pump station will be constructed on the opposite side of the flood control channel on a City-owned
parcel. The new pump station will provide flood protection for an 87-acre area.
The project will be constructed so flood protection from the existing pump station will be available
throughout the construction period.
Bids were received electronically on November 17, 2022 with the following results:
Bidding Contractor Bid Amount Submitted
Mehta Mechanical Company, Inc.$10,648,600
GMZ Engineering, Inc.$11,693,500
Pacific Hydrotech, Corporation $12,981,600
Myers and Sons Construction, LLC $13,335,000
Environmental Construction, Inc.$14,821,700
The engineer’s estimate for the project is $11,000,000. Staff recommends awarding a contract to
Mehta Mechanical Company (“Mehta”), Incorporated Company in the amount of $10,648,600.
The City has contracted with Mehta on three sewer lift station projects since 2017. Mehta has
provided reasonable project performance on past projects. The total project cost is estimated to be
$12,714,000, which includes the construction contract, project management, construction
contingency of 10%, and supplemental expenses for soils and materials testing, and electrical
inspection.
Environmental Status:
Initial environmental assessment for Heil Avenue Pump Station Rehabilitation Project was processed
and completed in accordance with the California Environmental Quality Act. It was determined that
this item, would not have any significant environmental effects and that a Conditional Use Permit is
warranted. Conditional Use Permit 2016-0050 is on file at the City of Huntington Beach Planning
Department, 2000 Main Street, and is available for public inspection and comment by contacting the
Planning Department. The Conditional Use Permit 2016-0050 was extended in time, with all
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previous conditions of approval to remain in effect.
Strategic Plan Goal:
Infrastructure & Parks
Attachment(s):
1. Location Map-Heil Storm Water Pump Station Replacement Project, CC1293
2. Power Point Presentation for the Heil Storm Water Pump Station Replacement Project,
CC1293
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314
Heil Storm Water Pump
Station Replacement
Project, CC1290
CC 1290
315
PROJECT NEED
The existing pump station and
culvert are under capacity.
• These photos are from February 21,
2005, from a 10-year storm event.
• The box culvert under Heil Ave. is
under capacity and causes a
backwater condition up-
stream of Heil Ave.
316
PROJECT PURPOSE
Increase the capacity of the Heil Pump Station to convey the 100-year storm
The project will:
• Increase the Heil box culvert capacity by installing a parallel culvert under Heil Ave.
• Increase the pump station capacity by increasing the number of pumps from two to
four. The station will operate with three pumps in service with a fourth pump
reserved for operational redundancy.
• Remove approximately 87 acres from the FEMA 100-year flood zone.
Funding
• FEMA Grant $6,598,950
• Drainage Fund $2,000,000
• Infrastructure Fund $4,200,050
317
Heil Storm Water Pump Station Project,
Project Overview:
318
Questions?
319
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-122 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Sean Crumby, Director of Public Works
PREPARED BY:Alvin Papa, Deputy Director of Public Works-Utilities
Subject:
Authorize the City Manager to Sign a Letter of Commitment for the Local Groundwater Supply
Improvement Project (“Local SiP”) Application for Grant Funds from the U.S. Department of
the Interior’s Bureau of Reclamation WaterSMART Program and Authorize Grant Matching
Funds in the Amount of $25,000
Statement of Issue:
It is requested that the City Council authorize the City Manager to sign and submit a Letter of
Commitment (Attachment 1) to Mesa Water District for the Local SiP application for grant funds from
the U.S. Department of the Interior’s Bureau of Reclamation WaterSMART Program and authorize
grant matching funds in the amount of $25,000.
Financial Impact:
Funding in the amount of $25,000 is included in the Fiscal Year 2022/23 approved budget in Water
Fund Account 50685801.69365. Per the Letter of Commitment, funds should be delivered to Mesa
Water no later than October 31, 2023.
Recommended Action:
Authorize the City Manager to sign and submit the Letter of Commitment (Attachment 1) to Mesa
Water District for the Local SiP application for grant funds from the U.S. Department of the Interior’s
Bureau of Reclamation WaterSMART Program and authorize grant matching funds in the amount of
$25,000.
Alternative Action(s):
Authorize the City Manager to sign and submit a Letter of Support for the Local SiP application for
grant funds from the U.S. Department of the Interior’s Bureau of Reclamation WaterSMART Program.
Please note that submittal of a Letter of Support without an identified matching source of funds
weakens the City’s position as a partner and reduces the potential opportunity to secure additional
water supply; or
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File #:23-122 MEETING DATE:2/21/2023
Do not approve the recommended action. Not supporting the grant application will likely result in the
failure of the application and the loss of an opportunity to secure additional water supply.
Analysis:
The City of Huntington Beach has an annual average water demand of approximately 26,000 acre-
feet (AF). In 2023, approximately 85% of this amount is pumped from groundwater sources and 15%
is purchased import water. California is currently in its third consecutive year of drought, which has
greatly stressed import water supplies. Extended periods of drought makes import water a potentially
unreliable resource in the long-term and it is important that the City investigate alternate water supply
sources. Brackish groundwater present in our region is high in chlorides and is not suitable for
potable water consumption; however, brackish groundwater desalination treatment technologies exist
that can convert brackish water into water suitable for public use.
The Bureau of Reclamation WaterSMART Program leverages Federal and non-federal funding to
work cooperatively with States, Tribes, and local entities to plan and implement actions to increase
water supply sustainability through investments in existing infrastructure. Brackish groundwater
desalination projects can supplement municipal and irrigation water supplies through the treatment of
ocean or brackish water, thereby providing a local supply, providing flexibility during water shortages,
and diversifying the water supply portfolio. Feasibility studies, planning activities, preliminary design
and environmental compliance activities for the development of water recycling and desalination
projects that will supplement existing fresh water supplies are eligible for funding under this program.
Mesa Water District proposes to act as lead agency to submit a joint grant application, with OCWD,
the City of Newport Beach, and the City of Huntington Beach as partners, to develop a feasibility
study that explores the benefits of desalinating brackish groundwater to improve local and regional
water supply reliability within the Orange County Groundwater Basin in our region. It is important to
note that this is not an ocean desalination project or affiliated with any previous proposals. The goal
of this project is to treat brackish groundwater that is currently unusable and increase its quality to
drinking water levels appropriate for daily use and consumption by the public. The Local SiP will
evaluate treatment alternatives for a 5 to 8 million gallons per day (MGD) regional brackish
groundwater desalter, proposed locations for production wells, needed conveyance pipelines, and
cost estimates. The Local SiP will also review potential groundwater and environmental impacts.
Applications for this funding opportunity are due on February 28, 2023 and require 50% matching
funds.
The Intergovernmental Relations Committee (IRC) reviewed this grant opportunity and approved 3-0
to recommend the City Council provide a support letter for the grant and support the City of
Huntington Beach provide $25,000 in grant matching funds.
The estimated cost of the feasibility study is approximately $400,000-$500,000. The City of Newport
Beach will contribute $25,000 in grant match funds. Staff recommends that the City of Huntington
Beach similarly contribute $25,000 in grant match funds to secure a stake in this water supply
opportunity. Mesa Water and OCWD will cover the remaining, grant matching fund balance .
Environmental Status:
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File #:23-122 MEETING DATE:2/21/2023
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project. Should
the feasibility study identify a potential water supply project in Huntington Beach as part of it findings,
the project will be brought forth to the City Council for consideration and an environmental
assessment will be conducted at that time.
Strategic Plan Goal:
Infrastructure & Parks
Attachment(s):
1. Attachment 1 - Letter of Commitment for the Local SiP Application for the U.S. Department of
the Interior’s Bureau of Reclamation WaterSMART Program
2. Powerpoint Presentation
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February 22, 2023
Paul E. Shoenberger, P.E.
General Manager
Mesa Water District
1965 Placentia Avenue
Costa Mesa, CA 92627
RE: Funding Commitment for the Local groundwater Supply Improvement Project
(“Local SiP”)
Dear Mr. Shoenberger,
The City of Huntington Beach (City) has prepared this letter of funding commitment in support of
Mesa Water District’s Local groundwater Supply Improvement Project (“Local SiP”)—to
explore the benefits of desalinating brackish groundwater to improve local and regional water
supply reliability within the Orange County Groundwater Basin, which provides water for over
2.5 million people in North and Central Orange County, including Huntington Beach.
To support execution of the Local SiP, the City will provide $25,000 to Mesa Water District
(Mesa Water®). This funding will be available to Mesa Water no later than October 31, 2023.
Developed through a collaborative process involving the City of Huntington Beach, City of
Newport Beach, Orange County Water District (which manages the Orange County
Groundwater Basin), and Mesa Water, the Local SiP would study a multi-agency undertaking to
secure -- for our current population, including disadvantaged residents and underserved
communities, and future generations -- a new source of water supply that is: abundant,
affordable, environmentally-sensitive, high-quality, local, reliable, sustainable, and resilient to
climate change, drought, and other potential disruptions to water supplies.
With the objective of providing Mesa Water and its partnering agencies with the framework for
selecting a proposed project alternative to move into design and construction, the Local SiP will
evaluate treatment alternatives for a 5 to 8 million gallons per day (MGD) regional brackish
groundwater desalter, proposed locations for production wells, needed conveyance, and cost
estimates. The Local SiP will also review potential groundwater and environmental impacts.
We appreciate the opportunity to partner with Mesa Water on this collaborative project and
understand the important water reliability benefits that this project could provide -- such as
climate change adaption, local water supply diversification, flexibility and improvement, and
alleviation of current and future drought impacts to our City and the region.
Please contact Alvin Papa, Deputy Director of Public Works-Utilities at (714) 536-5503 or
Alvin.Papa@surfcity-hb.org should you have any questions or need additional information.
Sincerely,
Al Zelinka
City Manager, City of Huntington Beach
323
Letter of Commitment for
the Local Groundwater
Supply Improvement
Project (“Local SiP)
City Council
February 21, 2023
324
Local SiP Application for Grant Funds
• Bureau of Reclamation WaterSMART Program
provides funding for alternate water supply projects
• 50/50 match funding, applications due 02/28/2023
• Local SiP Project will investigate feasibility of treating
brackish groundwater to potable water levels
• Provide additional water source for our region
• Estimate is $400,000-$500,000
• MATCH: Newport Beach ($25,000), Huntington
Beach ($25,000), Mesa Water/OCWD (~$200,000)
325
Local SiP Application for Grant Funds
• Recommend approval of $25,000 match funds
• The Intergovernmental Relations Committee (IRC)
reviewed this grant opportunity and approved 3-0 to
recommend the City Council provide a support letter
for the grant and support the City of Huntington Beach
provide $25,000 in grant matching funds.
326
Questions?
327
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-157 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Sunny Rief, Acting Chief Financial Officer
PREPARED BY:Sunny Rief, Acting Chief Financial Officer
Subject:
Year-End Audit Results for the FY 2021/22 Annual Comprehensive Financial Report (ACFR),
Fiscal Year 2022/23 Mid-Year Budget Adjustments, and Fiscal Year 2022/23 Budget Update and
Fiscal Health Report
Statement of Issue:
Fiscal Year 2022/23 Budget Update and Fiscal Health Report
On January 17, 2023, the City Council approved Mayor Pro Tem Van Der Mark’s H-Item request for a
comprehensive report on the state of the City’s budget and financial health, as well as staffing levels,
vacancies, the costs of filling vacancies, and any other aspect of citywide reorganization or planned
increase in fiscal responsibility and economic efficiency. This Request for Council Action provides the
information requested for City Council’s consideration.
Fiscal Year 2021/22 Year-End Audit Results
The City received an Unmodified (Clean) Audit Opinion for the City’s Fiscal Year (FY) 2021/22 Annual
Comprehensive Financial Report (ACFR), which is the best highest audit result attainable. In
addition, the Government Finance Officers Association awarded their Certificate of Achievement for
Excellence in Financial Reporting to the City for the 36
th consecutive year. Included as an
attachment is the FY 2021/22 ACFR to receive and file.
Fiscal Year 2022/23 Mid-Year Adjustments
The Finance Department has also spent time recently performeding a mid-year budget review for the
fiscal year that began on July 1, 2022. In interfacing with operating departments, budgetary requests
have been assessed across all City departments, and certain adjustments are being recommended
based on available resources in the General Fund, through grants and/or restricted funds.
Financial Impact:
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Fiscal Year 2022/23 Mid-Year Adjustments
1. General Fund (100) budget adjustments are requested as follows:
a. Community & Library Services Department - funding for contract class instructors and
increased printing costs for the spring and summer SANDS ($537,000) offset by additional
recreation fee revenues for a net zero impact.
b. Community Development Department - funding for increased building plan check
services ($700,000) offset with plan check revenues for a net zero impact.
c. Finance Department - funding for credit card processing fees arising from credit card
payments made through the City’s Enterprise Land Management System (ELM) ($115,000)
d. Fire Department - funding for Fire Strike team reimbursement costs ($525,000) offset
with strike team reimbursement revenues for a net zero impact and emergency medical
supplies ($175,000) offset with emergency medical services revenue for a net zero impact.
e. Police Department - funding for increased costs related to the County-wide 800MHz
backbone cost sharing agreement ($189,000)
f. Public Works Department - funding for increased fuel costs ($752,000) and increased
vehicle maintenance and accident repair costs ($590,000)
g. Non-Departmental - funding for increased natural gas costs ($250,000); a transfer to
the Equipment Replacement Fund ($500,000 for item 5 below); a transfer to the Workers’
Compensation Fund ($4,300,000 for item 4 below); and a transfer to the Section 115 Trust
Fund ($2,000,000) to further protect the City from future pension cost increases.
2. The Police Department is requesting additional appropriations totaling $810,000, through the
following sources:
a. Narcotics Forfeiture - Federal Fund 212 ($60,000)
b. Supplemental Law Enforcement Services Fund 984 ($750,000)
3. The Public Works Department is requesting additional appropriations of $531,000 in the
Refuse Collection Fund 504 offset with refuse collection revenue for a net zero impact.
4. The Human Resources Department is requesting appropriations of $4,300,000 in the Workers’
Compensation Fund 551 offset with transfers in from the General Fund for a net zero impact.
5. The Non-Departmental Department is requesting appropriations of $500,000 in the Equipment
Replacement Fund 324 offset with transfers in from the General Fund for a net zero impact.
6. The Community Development Department is requesting to approve, accept and authorize
execution of a grant agreement with the State of California Energy Commission and
corresponding appropriations of $80,000 in a new CalAPP Grant Fund offset with grant revenues
for a net zero impact.
7. The Community Development Department is requesting approval to amend a professional
services contract with CSG Consultants, Inc. and corresponding increase in Professional Services
Authority of $200,000 and to amend a professional services contract with True North Compliance
Services, Inc. and corresponding increase in Professional Services Authority of $200,000.
There are sufficient revenues, cash, and/or fund balances to support the above referenced
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File #:23-157 MEETING DATE:2/21/2023
adjustments.
Recommended Action:
A) Receive and File the FY 2021/22 Annual Comprehensive Financial Report and other auditor-
issued reports; and
B) Receive and file the FY 2022/23 Budget Update and Fiscal Health Report (Attachment 8); and,
B) Approve mid-year budget adjustments to the FY 2022/23 Revised Budget in the funds and by the
amounts contained in Attachment 3; and,
C) Authorize additional Professional Services authority in the Fiscal Year 2022/23 Revised Budget in
the departments and by the amounts contained in Attachment 4; and,
D) Approve and authorize the Mayor and City Clerk to execute “Amendment No. 1 to Agreement
between the City of Huntington Beach and CSG Consultants, Inc. for On-Call Building Division Plan
Review Services” (Attachment 5); and,
E) Approve and authorize the Mayor and City Clerk to execute “Amendment No. 1 to Agreement
between the City of Huntington Beach and True North Compliance Services, Inc. for On-Call Building
Division Plan Review Services” (Attachment 6); and,
F) Accept, approve and authorize the City Manager to execute the grant agreement with the State of
California Energy Commission in the amount of $80,000 (Attachment 7).
Alternative Action(s):
Do not approve the recommended action(s) and direct staff accordingly. Denial of Mid-Year budget
adjustment requests would result in insufficient funding for critical areas including Worker’s
Compensation, utilities, and other core services and potential loss of grant funding.
Analysis:
Fiscal Year 2021/22 Year-End Audit Results
Auditing firm Davis Farr LLP (Auditors) audited the City’s financial statements and internal control for
the FY 2021/22. The City received an Unmodified (Clean) Audit Opinion for the FY 2021/22 Annual
Comprehensive Financial Report (ACFR), which is the highest opinion possible (Attachment 1).
In addition, the Auditors issued the following reports (Attachment 2):
·AU-C 260 Letter: Auditor’s Communications with Those Charged with Governance
·Appropriations Limit Agreed-Upon Procedures
·Air Quality Management District (AQMD) Report
Fiscal Year 2022/23 Budget Update and Fiscal Health Report
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File #:23-157 MEETING DATE:2/21/2023
Fiscal Year 2022/23 Budget Update
The City ended FY 2021/22 with a $3.4 million General Fund surplus, primarily due to stronger
recovery in Sales Tax ($5.4M, or 12.1% increase from prior year) and Transient Occupancy Tax
(TOT) ($5.4M, or 51.8% increase from prior year) than originally anticipated.
General Fund revenues for FY 2022/23 remain strong, with Transient Occupancy Tax TOT expected
to increase $1.7M, or 10.8% from the prior year. Additionally, Charges for Services revenues are
also anticipated to increase ($4M, or 14% from prior year), primarily through increases in building and
planning permit activity and demand for emergency medical services. However, inflationary
pressures have impacted expenditures, with costs for construction, utilities, and contracted services
coming in above budget. In spite of this challenge, the City is expected to end FY 2022/23 with a
$3.8M surplus while still funding increased costs for planned expenditures.
General Fund Five-Year Financial Forecast (in thousands):
The Five-Year Financial Forecast above shows the balance of General Fund expenditures for five
fiscal years following the audited fiscal year ended June 30, 2022. The revenue projections include
updated assumptions based on economic trends and the most recent projections by sales tax and
property tax experts. The expenditure projections include the future impacts of the FY 2021/22
CalPERS investment return of -7.5 percent and assume a 6.8 percent rate of return thereafter (the
CalPERS discount rate). As CalPERS investment gains and losses are amortized over 20 years with
a five-year ramp up, only the first two years of the -7.5 percent return are shown in the Five-Year
Forecast. The projections for future fiscal years also include increased expenditures for Worker’s
Compensation based on the increased cost of claims due to rising medical costs and an expanded
list of injuries that are presumed to be work related under California law, as well as the increased cost
for General Liability premiums based on the national trend of rising cyberthreats and natural disaster
losses.
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Historical Staffing Levels and Vacancies
The City’s Adopted Budget includes 815.8 full-time General Fund positions,which is a reduction of
36.4 fewer positions from the compared to the City’s pre-pandemic total of 852.2 positions. Since the
City’s Reorganization Plan was approved by City Council on November 2, 2020, the number of
positions has increased by 19.
The City has had an average annual vacancy count of 60 positions over the past 10 fiscal years.
Currently, the City has 82 vacancies: 25 sworn positions in Police, 9 sworn positions in Fire, and 48
non-sworn positions throughout the City’s departments.
Fiscal Health Report
Financial Health Indicators (FHI) are a proactive approach to monitoring or assisting local
governments in identifying early signs of fiscal stress and can be used to measure the fiscal health of
the City. The report reviews 12 different aspects of the City’s finances to see how Huntington Beach
has been performing over the past five years and how the City compares to other Orange County
cities. The comparative data is derived from the Annual Comprehensive Financial Report (ACFR)
published by each City for the fiscal year ended June 30, 2022. The cities used for comparative
purposes are: Anaheim, Costa Mesa, Fullerton, Garden Grove, Irvine, Newport Beach, Orange, and
Santa Ana. The FHIs are separated into three broad categories that are generally described below:
·Financial Position - Can the City Pay its Bills Now:The City’s financial position is strong if it
has plenty of cash and other liquid resources available. Without those resources, it will have to
borrow money, delay payments, or liquidate some of its other assets, all of which carry
significant financial costs.
·Financial Performance - Can the City’s Revenues Cover its Expenses:The City does not only
need to pay bills now, but it needs to make sure that the money it brings in on an annual basis
is sufficient to cover its annual expenses. Missing this mark can negatively affect service levels
and the City’s credit rating which is important for current loan covenants and any future
potential debt financing.
·Long-Term Solvency - Can the City Pay its Bills in the Future:The City will have bills in the
future and its current financial condition will influence its ability to pay them. For the long-term
future, the City needs to ensure that its revenue sources can cover long-term spending needs
and provide services to a growing and changing population.
Financial Position: Can the City Pay its Bills Now
FHI #1 General Fund Reserve Ratio:This indicator identifies changes (increases or decreases) in
General Fund reserves from the prior year to the current year and is useful in identifying if the City’s
fund balance reserve is deteriorating. A declining fund balance reserve can be a sign of fiscal stress.
This indicator is important in identifying a trend of a deteriorating fund balance reserves as well as
how rapidly it is deteriorating. A higher ratio suggests larger reserves for dealing with unexpected
resource needs in the long run.
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The City’s General Fund balance reserves increased from 33% to 34% of revenues in FY 2020/21,
then decreased slightly to 33% in FY 2021/22. This is attributed in stronger revenue growth in FY
2021/22, which is used to calculate this ratio. The overall General Fund Balance increased by
$3.39M in FY 2021/22.
FHI #2 General Fund Liquidity Ratio:This indicator assesses changes (increases or decreases) in
available cash and is useful in identifying the City’s ability to pay bills on time by measuring readily
available cash, such as unrestricted cash and investments. A declining ratio indicates that the City
does not have sufficient cash available to meet its current obligations as they come due. This
indicator is important in identifying a trend of deteriorating cash as well as how rapidly it is
deteriorating. For this measure, a higher ratio suggests a greater capacity for paying off short-term
obligations.
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The City’s liquidity ratio indicates that the City is able to pay its bills as payments are due by
measuring readily available cash, such as unrestricted cash and investments, compared to the total
liability obligations, such as payables and accrued payroll. The total liability obligations at year end
will vary from year to year based on pay period end dates, timing of projects, and timing of invoices
issued by suppliers.
Financial Performance - Can the City’s Revenues Cover its Expenses
FHI #3 General Government Growth in Net Position Ratio:A growth in net position indicates that the
City can pay its expenses with its revenue and is able to establish appropriate reserves for future
allocation. Revenues from the City’s programs ideally should cover the expenses that the City incurs
for those programs, otherwise reserves may need to be used to meet the needs. A higher ratio
suggests that annual costs are adequately funded, and the financial condition is improving.
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This ratio measures the change in net position compared to the total General Government net
position. When revenues exceed expenses and assets exceed liabilities, an increase in the ratio will
be seen. The City has shown continued growth in net position. The 8.3% increase in FY 2021/22 is
largely attributed to the 21.3% CalPERS investment return, which eliminated the 15% unfunded
pension liability remaining with CalPERS after the FY 2020/21 Pension Obligation Bond refinancing
of 85% of the City’s unfunded pension liability. It is important to note that there will be a new
unfunded pension liability created due to the -7.5% CalPERS investment return in FY 2021/22 which
will be reported on the City’s FY 2022/23 ACFR.
FHI #4 General Government Operating Margin Ratio:The City funds certain programs via grants and
intergovernmental aid from other government agencies (e.g. Federal and State) and also charges for
services that are offered to its residents. This measurement illustrates how much of the City
expenditures are funded by charges, fees, and grants rather than general tax dollars to fund program
expenditures. For this measure, a higher ratio suggests basic government services are more self-
sufficient through charges, fees, and grants and less reliant on general tax dollars to fund program
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expenditures.
This ratio illustrates how much of the City’s expenditures were funded by charges, fees, and grants
(37.6%) rather than general tax dollars (62.4%) to fund program expenditures. The other cities
appear to fund their operations more heavily by charges, fees, and grants. This could be attributed to
the level of cost recovery implemented by each City. While there is no standard we know that most
cities do not implement 100% cost recovery.
FHI #5 General Government Own Source Revenue Ratio:The City receives grants and
intergovernmental aid from other government agencies, such as the state and federal governments.
While the City welcomes grants and aid to support City services, the less reliant the City is on money
from those sources, the more independent the City’s financial condition is. Revenues from grants are
used to support some City functions. Other functions, such as public safety, are mainly funded by
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general tax dollars. This ratio illustrates the extent to which general government revenues were
supported by grants. A lower ratio suggests that the City is not heavily reliant on grants and more
reliant on general tax dollars and charges for services.
This ratio explains how much of our revenues are from grants (6%) compared to general tax dollars
and charges for services (94%). With the addition of the American Rescue Plan Act funding of $29.6
million, this ratio will be higher next year and is not indicative of an ongoing pattern as these funds
are considered one-time funding only.
Long-Term Solvency - Can the City Pay its Bills in the Future
FHI #6 General Government Near-Term Solvency Ratio:The City has both short-term and long-term
obligations that must be paid in the future. The fewer number of years of annual revenue needed to
pay the City’s obligations, the stronger the City’s financial condition. This ratio demonstrates that the
City is able to pay a larger portion of its debts with annual revenues. For this measure, a lower ratio
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indicates a stronger financial condition.
The City has both short-term and long-term obligations that must be paid in the future. The fewer
number of years of annual revenue needed to pay obligations, the stronger the City’s financial
condition. The decrease of the City’s long-term debt in FY 2020/21 is due to the refinancing of 85% of
the City’s pension liability with the issuance of Pension Obligation Bonds, as well as refinancing of
two of the City’s Lease Revenue Bonds (2010A and 2011A) to lower interest rates. The decrease in
FY 2021/22 is largely attributed to the 21.3% CalPERS investment return, which eliminated the 15%
unfunded pension liability remaining with CalPERS after the Pension Obligation Bond refinancing. It
is important to note that there will be a new unfunded pension liability created due to the -7.5%
CalPERS investment return in FY 2021/22 which will be reported on the City’s FY 2022/23 ACFR.
FHI #7 General Government Debt, Pension Liability, and OPEB Burden per Resident Ratio:The City
issues debt for a variety of reasons and pays for employees’ pensions, including other post-
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employment benefits. Having a low debt per capita would put the City in a stronger financial position.
Lower bonded debts, pension liability, and other post-employment benefits (OPEB) per capita result
in a smaller debt burden on taxpayers. For this measure, a lower ratio indicates a stronger financial
condition.
As previously discussed, the sharp decrease in FY 2021/22 is largely attributed to the 21.3%
CalPERS investment return, which eliminated the 15% unfunded pension liability remaining with
CalPERS after the Pension Obligation Bond refinancing. It is important to note that there will be a
new unfunded pension liability created due to the -7.5% CalPERS investment return in FY 2021/22
which will be reported on the City’s FY 2022/23 ACFR.
FHI #8 Governmental Funds Coverage Ratio:If a large portion of the City’s expenses go towards
paying debt principal and interest, it shows that the City is less able to spend money on services and
capital improvements. The City has principal and interest payments on debt. The lower the amount
of these payments compared to all the other expenditures it has, the stronger its financial condition.
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For this measure, a lower ratio indicates a stronger financial condition.
The City has a higher ratio than most of the comparative cities, implying the City has higher principal
and interest payments and more overall long-term debt. The City did have more long-term debt than
the comparative cities, primarily as a result of the issuance of a $363.6 million Pension Obligation
Bond in FY 2021/22 of which $341.5 million was related to general government funds. However, it is
important to note that when aggregating all of the City’s bonded debt, pension, and OPEB liabilities
as shown in FHI #7, Huntington Beach has one of the lowest debt burdens per resident to
comparative cities.
FHI #9 Enterprise Funds Coverage Ratio:This measure compares the interest expense owed on
debts annually to the ongoing, typical operating revenues from which that expense will be paid. This
is similar to a small business owner making sure that the interest payments on the mortgage for her
office aren’t too large compared to the revenues she brings in each year. Just like the City’s
governmental services need to pay their debts (e.g., bonds) in the long-term, the City’s Enterprise
Funds need to do so as well. The City’s Enterprise Funds include Water, Sewer, Refuse, and Hazmat
Service Funds. For this measure, a higher ratio indicates a stronger financial condition.
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Note: No Enterprise Funds in the cities of Costa Mesa and Irvine.
The City only shows two fiscal years of data as its Enterprise funds did not carry long-term debt prior
to FY 2020/21, with the issuance of a $363.6 million Pension Obligation Bond in FY 2021/22 of which
$22.1 million was related to Enterprise funds.
FHI #10 General Government Capital Asset Value Ratio:A negative ratio indicates that the City’s
capital assets decreased in value- that is, the value at the end of the year was less than the value at
the beginning of the year. This indicates that the depreciation of capital assets was greater than the
value of capital assets added, and that some capital assets may need to be renovated or replaced.
Most of the City’s capital assets decrease in value over time due to depreciation. The City needs to
make sure that as capital assets age, it is renovating or replacing them. Capital assets include land,
buildings, vehicles, and public infrastructure. For this measure, a higher ratio indicates a stronger
financial condition.
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The City showed an increase in FY 2020/21 primarily due to the purchase of land which is
temporarily being used as the site for a 174-bed Navigation Center.
FHI #11 Enterprise Funds Capital Asset Age Ratio: This ratio explains the percentage of Enterprise
Funds capital assets that have been depreciated. Depreciable capital assets include buildings,
vehicles, and public infrastructure. Assets are depreciated over their useful life as they age, and their
value is reduced. A lower ratio indicates Enterprise Funds capital assets are newer and may not
require as much replacement and/or maintenance costs compared to older capital assets.
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Note: No Enterprise Funds in the cities of Costa Mesa and Irvine.
This ratio explains the percentage of Enterprise Fund capital assets that have been depreciated. The
City’s Enterprise Funds capital assets have aged over the past five years which is evidenced by the
annual increase in the ratio. While the ratio is higher when compared to a majority of its comparative
cities, the increasing trend in this ratio could be indicative of other issues which require additional
analysis.
Indicator #12 General Fund Public Safety Costs Ratio: This ratio compares the total costs of the
General Fund public safety, which includes police and fire, to the total General Fund expenditures. A
higher ratio indicates more funds are dedicated to public safety.
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The Public Safety costs ratio increased over the four fiscal years prior to FY 2021/22, then declining
primarily due to the refinancing of 85% of the City’s pension liability with the issuance of Pension
Obligation Bonds in FY 2020/21, with cost savings first realized in the prior fiscal year. It is important
to note that the remaining 15% pension liability held with CalPERS may incur increasing annual UAL
payments in the future due to the -7.5% CalPERS investment return in FY 2021/22.
Fiscal Year 2022/23 Mid-Year Adjustments
The FY 2022/23 Budget was adopted by City Council on June 7, 2022, for the fiscal year beginning
July 1, 2022. 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.
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General Fund
The Community & Library Services Department is requesting appropriations to meet increased
demand for recreational and Art Center class contract instructors and increased costs to print the
spring and summer editions of the SANDS ($537,000). These costs will be offset by additional
recreation fee revenues, resulting in a net zero impact to the General Fund.
The City received higher than anticipated requests for development services from multiple large
projects, solar permits, accessory dwelling unit (ADU) permits and commercial construction and
tenant improvements. The Community Development Department is requesting to increase its
professional services appropriation for building plan check services by $700,000, which will be offset
by permit fee revenues and result in a net neutral impact to the General Fund.
The Community Development Department is also requesting to amend professional services
agreements and corresponding professional services authority with CSG Consultants, Inc. and True
North Compliance Services, Inc. for on-call building division plan review services. Each contract will
be increased by $200,000 for a new not to exceed amount of $1,000,000.
The Finance Department is requesting an appropriation of $115,000 to cover credit card fees for
payments made through the City’s ELM system. The City currently does not charge for use of credit
cards, which has resulted in higher credit card fees being absorbed by the General Fund.
The Fire Department participates in the California Fire and Rescue Emergency Mutual Aid System,
and the department has responded to multiple mutual aid requests to assist in major fires over the
past years. The State of California will fully reimburse Huntington Beach for all allowable Strike Team
expenditures and will reimburse an additional 15.94% administrative rate applied to these allowable
expenditures.
The CAL FIRE 2023 Fire Season Outlook states that the weather outlook for January through April
calls for mixed temperature and precipitation anomalies, with some months being a bit wetter while
others on the drier side. The Fire Department has incurred $525,000 in Strike Team expenditures for
FY 22/23 so far. 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 a budget appropriation
of $525,000, which will be fully reimbursed by the State.
To meet the operational demands of increased vendor prices and increased medical calls, the Fire
Department is requesting a budget appropriation of $175,000 for emergency medical supplies.
Additional emergency medical service revenues are anticipated to offset the added costs.
The Police Department is requesting an appropriation of $189,000 to fund the City’s portion of the
800MHz backbone cost sharing agreement that is managed by the Orange County Sheriff’s
Department. A new Joint Agreement, beginning July 1, 2022, has re-allocated each city’s share
based on radio count, removed the County’s 40 percent share, and includes increased operational
costs and capital project funding.
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The Public Works Department is requesting appropriations of $752,000 for increased citywide fuel
costs and $590,000 for increased vehicle maintenance and accident repair costs. Inflationary
pressures have significantly impacted fuel prices and costs for vehicle parts and repairs.
Staff is requesting appropriations totaling $7,050,000 in the Non-Departmental Department to pay for
increased utility bill costs due to the recent spike in natural gas prices ($250,000) and transfers to the
Equipment Replacement Fund ($500,000), Workers’ Compensation Fund ($4,300,000) and the
Section 115 Trust ($2,000,000). Equipment Fund transfers are needed to ensure adequate funding
for essential capital equipment needs and address rising equipment costs. The Workers’
Compensation transfer is requested to pay for the increased cost of claims due to rising medical
costs and an expanded list of injuries that are presumed to be work related under California law.
Transfers to the Section 115 Trust are requested to further protect the City from future pension cost
increases.
Other Funds
Narcotics Forfeiture - Federal (Fund 212)
Federal narcotics forfeiture revenues are equitably shared federal financial assistance, used to
supplement local law enforcement resources. An appropriation of $60,000 is needed in the Narcotics
Forfeiture - Federal Fund for detective overtime costs arising from participation in the Orange County
Regional Narcotics Suppression Program (OC RNSP).
Equipment Replacement (Fund 324)
This fund accounts for citywide vehicle and capital equipment purchases. An additional appropriation
of $500,000 is requested to ensure adequate funding for essential capital equipment needs and
address rising equipment costs. This appropriation is funded by the requested $500,000 transfer
from the General Fund.
Refuse Collection Service (Fund 504)
The residential curbside collection rate increased by $1.92 effective July 1, 2022, based on the
formula adopted in Resolution 2021-05, and is estimated to provide an additional $1,103,000 in
revenues. Part of this increase was included in the FY 2022/23 Adopted Budget. However, due to
higher than anticipated inflation and increased fuel costs, the Public Works Department is requesting
an expenditure appropriation of $531,000 to fund the additional pass-thru costs associated with the
Refuse Collection and Disposal Services contract. Based on current revenue collection amounts,
these adjustments will have a net neutral impact.
Workers’ Compensation (Fund 551)
California Workers’ Compensation Law provides state mandated benefits to employees for work-
related illness or injury. Benefits may include payments for medical treatment, salary continuation,
Total Temporary Disability (TTD) benefits, and permanent disability benefits. The City is self-insured
for its workers’ compensation program and is liable for all costs up to $1 million dollars per claim.
The costs related to claims are paid for by the City as the Employer.
An appropriation of $4,300,000 is needed for increased costs of Workers’ Compensation claims
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driven by rising medical costs and an expanded list of injuries that are presumed to be work related
under California law, including cancer and post-traumatic stress.
Supplemental Law Enforcement Services (Fund 984)
Supplemental Law Enforcement Services Fund (SLESF) revenues are provided by the State of
California to fund front line law enforcement activities. An appropriation of $600,000 is requested for
temporary relocation of the 9-1-1 center to the Central Net facility at Gothard Fire Station. The
current 9-1-1 center will undergo a remodel, expected to begin in the fall of 2023. Relocation of
dispatch services requires the coordination and assistance of several vendors and stakeholders to
move the Computer Aided Dispatch (CAD) and phone monitors, modems, desks and other computer
accessories to Central Net.
An appropriation of $150,000 is requested for the purchase of investigative software offered through
Peregrine. This technology platform provides a single point of access to view and analyze large-
scale and real-time data from various sources, streamlining criminal analysis and utilizing secure
links to quickly share information and reports with other law enforcement agencies. There is
sufficient fund balance in this fund to cover the requested appropriations.
CalAPP Grant (new fund)
The Community Development Department has been approved for a grant from the State of California
Energy Commission for expenses associated with adopting an automated solar permit platform
called SolarAPP+. The platform verifies code compliance and issues permits in real time to a
licensed contractor for a solar energy system. The grant will reimburse software costs, staff time and
other related expenses, up to $80,000.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project.
Not applicable
Strategic Plan Goal:
Economic Development & Housing
Infrastructure and Parks
Fiscal Sustainability, Public Safety and other
Attachment(s):
1. FY 2021/22 Annual Comprehensive Financial Report (ACFR)
2. Other Auditor Issued Reports
3. Fiscal Year 2022/23 Recommended Mid-Year Adjustments
4. Fiscal Year 2022/23 Recommended Mid-Year Professional Services Authority
5. Amendment No. 1 to Agreement between the City of Huntington Beach and CSG Consultants,
Inc. for On-Call Building Division Plan Review Services
6. Amendment No. 1 to Agreement between the City of Huntington Beach and True North
Compliance Services, Inc. for On-Call Building Division Plan Review Services
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7. Grant Agreement with the State of California Energy Commission (Number APP-22-038)
8. City of Huntington Beach Financial Health Indicators Report
9. Financial Update & FY 2022/23 Mid-Year Budget Adjustments Presentation
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CITY OF
HUNTINGTON BEACH
California
Annual Comprehensive
Financial Report
For The Fiscal
Year Ended
June 30, 2022
349
CITY OF HUNTINGTON BEACH, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED
JUNE 30, 2022
Prepared by the Finance Department
350
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351
INTRODUCTORY SECTION
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353
i
City of Huntington Beach
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
TABLE OF CONTENTS
INTRODUCTORY SECTION
Table of Contents ........................................................................................................................................ i-ii
Letter of Transmittal .................................................................................................................................... iii-x
City Officials ................................................................................................................................................ xi
Organizational Chart ................................................................................................................................... xii
Certificate of Achievement in Excellence in Financial Reporting ................................................................. xiii
FINANCIAL SECTION
Independent Auditor’s Report...................................................................................................................... 1-3
Management’s Discussion and Analysis (Required Supplementary Information) ....................................... 4-21
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position .................................................................................................................. 23
Statement of Activities ....................................................................................................................... 24
Fund Financial Statements:
Balance Sheet – Governmental Funds .............................................................................................. 25
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ......... 26
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ...... 27
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
of Governmental Funds to the Statement of Activities ....................................................................... 28
Statement of Net Position – Proprietary Funds .................................................................................. 29
Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds ............ 30
Statement of Cash Flows – Proprietary Funds ................................................................................... 31
Statement of Fiduciary Fund Net Position – Fiduciary Funds ............................................................ 32
Statement of Changes in Fiduciary Fund Net Position – Fiduciary Funds ......................................... 33
Notes to Financial Statements .............................................................................................................. 34-124
Required Supplemental Information:
Notes to Required Supplementary Information .................................................................................. 128
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget
And Actual – General Fund ............................................................................................................. 129
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget
And Actual – Grants Special Revenue Fund ................................................................................... 130
Schedule of Changes in the Net Pension Liability and Related Ratios .............................................. 131-133
Schedule of Changes in the Net OPEB Liability and Related Ratios ................................................. 134
Schedule of Contributions .................................................................................................................. 135-137
Schedule of Money Market Weighted Rate of Return ........................................................................ 137
Schedule of Contributions for the OPEB Plan .................................................................................... 138
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FINANCIAL SECTION (Continued)
Supplementary Information:
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet – Other Governmental Funds .................................................................. 141-144
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Other Governmental Funds ............................................................................................................ 145-148
Schedule of Revenues, Expenditures, and Changes in Fund Balances –
Budget and Actual – Other Governmental Funds ........................................................................... 149-156
Statement of Net Position – Internal Service Funds ........................................................................... 159
Statement of Revenues, Expenses, and Changes in Fund Net Position
Internal Service Funds .................................................................................................................. 160
Statement of Cash Flows – Internal Service Funds ........................................................................... 161
Combining Statement of Fiduciary Fund Assets and Liabilities.......................................................... 165
Combining Statement of Changes in Fiduciary Net Position .............................................................. 165
STATISTICAL SECTION
Net Position by Component – Last Ten Fiscal Years .................................................................................. 169-170
Changes in Net Position – Last Ten Fiscal Years ....................................................................................... 171-172
Fund Balances – Governmental Funds – Last Ten Fiscal Years ................................................................ 173
Changes in Fund Balances – Governmental Funds – Last Ten Fiscal Years ............................................. 175-176
Assessed and Actual Valuation of All Taxable Property (Excluding Redevelopment Agency) -
Last Ten Fiscal Years .............................................................................................................................. 177
Property Tax Rates – All Direct and Overlapping Government Tax Rate 04-001
Largest Area in City – Last Ten Fiscal Years ........................................................................................... 177
Property Tax Levies and Collections – Last Ten Fiscal Years .................................................................... 178
Top Ten Property Tax Payers – Current Year and Nine Years Ago ............................................................ 179
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ..................................................................... 181-182
Legal Debt Margin – Last Ten Fiscal Years ................................................................................................ 183
Statement of Direct and Overlapping Bonded Debt .................................................................................... 184
Principal Private Employers – Current Year and Nine Years Ago ............................................................... 185
Full-Time Actual and Budgeted City Employees by Function/Program– Last Ten Fiscal Years .................. 186
Operating Indicators by Function/Activity – Last Ten Fiscal Years .............................................................. 187-188
Capital Assets Statistics by Function/Activity .............................................................................................. 189
355
iii
CITY OF HUNTINGTON BEACH
December 21, 2022
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 Annual
Comprehensive Financial Report (ACFR) for the year ended June 30, 2022.
As required by the City Charter, and to ensure the reliability of the information contained herein,
the City of Huntington Beach (the City) 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 ACFR 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 assurance 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, 2022. 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.
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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 197,437 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.
As the fourth largest city in Orange County, and the 23rd largest in California by population,
Huntington Beach is recognized as a prime location to live, work and play, ranking #1 in the
nation for “Quality of City Services” and #1 for “Best-Run City” in the State of California by
WalletHub (June 2022). Huntington Beach was also ranked #1 and #18 in the state and country,
respectively, for “Best City for People with Disabilities” by WalletHub (September 2022). The
City boasts an annual median household income of $91,318, 51 percent higher than the median
household income for the United States, 28 percent higher than the State of California and 6
percent higher than Orange County. In addition, more than half of its residents, or 53 percent,
have a college education. There are over 104,300 people employed by public and private
entities in Huntington Beach.
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 980 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.
A thriving beach community, Huntington Beach is home to numerous events, including the Great
Pacific Airshow – the only beachfront airshow on the West Coast featuring the U.S. Air Force
Thunderbirds, U.S. Navy F-35C Demo Team, PACAF F-16 Viper Demo Team, and many
others. This unique airshow, which first premiered in October 2016, has gained tremendous
popularity and attracts visitors from all over the world to view the three-day event.
The City’s century-old traditional Fourth of July Fireworks Show and Parade, known nationally
as “the largest Fourth of July Parade west of the Mississippi,” spans a four-day period that
includes the Pier Plaza Festival with live music, carnival rides, and other family-friendly
activities, Surf City 5K Run, and spectacular fireworks show overlooking the pier.
The City also hosts a variety of other exciting events for families and visitors such as the annual
Concours d’Elegance, Civil War Days, and other events. In September 2022, the City hosted
the International Surfing Association (ISA) World Surfing Games for the first time since 2006.
357
v
Economic Condition and Outlook
After more than two years of contending with the pandemic, the economy is showing continuing
signs of recovery as seen through the major decline in COVID-19 cases and expansion of the
nation’s economy to 93 percent of pre-pandemic levels. While global tensions and supply chain
shortages remain prevalent, the City is experiencing sustained increases to its major revenue
sources, such as Sales Tax and Transient Occupancy Tax, through remarkable improvements
to the local economy. However, continuing volatility in the financial and equity markets, along
with the rapidly changing economic picture and the length and continuing impacts of the COVID-
19 pandemic, add a layer of uncertainty to the City’s financial projections.
The City of Huntington Beach continues to thrive together through the motto “OneHB.” On
November 29th, Al Zelinka presented his “100 Days Report,” which included the City’s
commitment to the following seven key principles:
Reaffimation of the City’s OneHB Mission to stay committed to being One Team,
working together to have One Focus, and continuing to pursue One Goal, through the
City’s core values of humility, exceptionality, social awareness, passion, teamwork, and
integrity.
Accountability to the Huntington Beach community using best practices and placing the
“Triple Bottom Line” approach of sustainability- which includes the City’s environment,
people, and economy- as the authentic and central platform to uphold and advance
Huntington Beach’s sense of community and quality of life.
Dedication to Transparency, striving to continuously expand access to public
information and increasing the visibility of programs, services, Boards, Committees, and
Commissions as opportunities for community participation and public information.
Responsiveness to the needs of the Huntington Beach community, committing to
continuous all-hands training to provide exceptional customer service and diversifying
communication efforts so that the City’s residents can access City information, provide
input, and receive needed services in a timely manner.
Commitment to remaining Effective & Efficient, promoting high performance and
financial responsibility to maximize the value of services provided to HB taxpayers,
residents, and businesses while simultaneously working to streamline and improve the
City’s customer service experience and address problems effectively.
Fostering a culture which supports Diversity, Equity, & Inclusivity, serving all
residents, visitors, and businesses with an open mind and provide a sense of welcoming
and belonging and respecting the diverse viewpoints within the community which
contribute to our collective strength.
Investment in public Engagement & Consensus Building to provide continuous,
meaningful engagement with the community in order to establish relationships and build
trust by providing a platform that facilities inclusive civic engagement.
Property Tax
The City of Huntington Beach’s assessed valuations are very strong, reflecting both new
development and increased property values. The City’s Fiscal Year 2022/23 assessed property
value grew 6.3 percent to $50.3 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 percent of parcels have an assessed valuation (AV) base year prior to 2004,
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representing a significant amount of untapped AV. For Fiscal Year 2020/21, secured property
tax revenue collections totaled $61.1 million. For Fiscal Year 2021/22, secured property taxes
are estimated at $62.9 million, reflecting a 3 percent increase.
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.
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*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. With a full fiscal year of TOT collections since the lifting of the Shelter-in-Place orders,
the City collected $15.8M in TOT revenues during Fiscal Year 2021/22, with the $5.4M, or 51.8
percent increase, exceeding even pre-pandemic levels.
Autos and
Transportation
21%
Building and
Construction
8%
Business and
Industry
9%
Fuel and Service
Stations
9%
General Consumer
Goods
18%
Restaurants and
Hotels
14%
State and County
Pools
16%
Other
5%
City of Huntington Beach
Composition of Sales Tax Revenue
Fiscal Year 2021/22
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*Fiscal Year 2017/18 reflects nine months of data only due to the change in the City’s fiscal year.
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 or revise
it 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.
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,
2022 was 1.19 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 and Major Initiatives
The Strategic Goals provides the framework for the goals and objectives of the City. The City
Council held a Strategic Planning Workshop on February 4, 2022, affirming four of the five policy
goals set in 2021 (excluding COVID-19 response). The five Strategic Goals for 2022 are listed
below:
Community Engagement
Homelessness Response
Economic Development & Housing
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Infrastructure and Parks
Fiscal Sustainability, Public Safety, Other
The goals drive 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.
Sustainability Master Plan
The City is in the process of developing a comprehensive Sustainability Master Plan (“SMP”)
that not only ties together past, current, and planned City sustainability efforts, but also outlines
a bold, inclusive vision for growth that balances the co-equal values of environment, equity, and
economy. The plan will define an achievable pathway to sustainability that supports the health
and well-being of all residents, responsible stewardship of the natural and built environment,
and long-term economic growth. Focus areas of the plan include, but are not limited to, the
following areas: Water, Energy, Climate, Biodiversity, Land use and Transportation, Resource
Recovery and Waste Management, and Public Health and Well-Being.
Citywide Mobility Plan
The City has adopted policies and built infrastructure to help people shift from driving alone to
walking, biking, utilizing transit, and carpooling. The Mobility Implementation Plan will help us
more aggressively advance these goals and will need to adhere to criteria set forth in the City’s
existing and ongoing plans. The Plan will ensure a diverse set of travel options that meet the
access and mobility needs for people of all ages and abilities, based in transportation justice
and the idea that infrastructure should equally and equitably address the needs of all people.
The Plan will provide clarity and specific, practical direction for strategies that support diverse
transportation options and technological innovations, such as micromobility devices, electric
vehicles, and autonomous vehicles, while ensuring that these changes do not adversely impact
progress towards other City commitments related to safety, equity, vehicular traffic congestion,
and GHG emissions.
Oak View Streetscape Improvements and Community Center and Library Plans
The City is working collaboratively with the Ocean View School District and the general
community to prepare a master plan to redevelop the Community Center and adjacent Oak
View Park, as well as expand and modernize Oak View Library to better meet the needs of this
neighborhood. The City has been awarded a $5 million grant from the California Department
of Transportation to add beautification elements, trees, and art in public spaces, as well as
remove litter and debris to enhance spaces for walking and recreation.
Comprehensive 311 System
The City is in the pre-planning stages of developing and implementing a robust, citywide 311
System to centralize all community requests, inquiries, information resources and engagements
in one platform. This “one-stop-shop” will address non-emergency inquiries and requests for
services. Establishing this one portal has the potential to improve our community’s customer
service experience and improve operational efficiencies, in keeping with the City’s ongoing
commitment to timely and efficient responsiveness.
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x
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 36th consecutive year. Receipt of
the award requires government entities to publish transparent, easily readable and efficiently
organized Annual Comprehensive Financial Reports, conforming to program, accounting, and
legal standards.
The Certificate of Achievement earned for the fiscal year ended June 30, 2021, is valid for one
year only. The City believes that this Annual Comprehensive 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, Zack
Zithisakthanakul, Ian Wuh, Tara Mukund, Ming Zhai, Leslie Zimmer, Michael Dolan, and Thuy
Vi for their hard work and dedication.
Respectfully,
Dahle Bulosan
Chief Financial Officer
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City of Huntington Beach
City Council
Tony Strickland, Mayor
Gracey Van Der Mark, Mayor Pro Tem
Rhonda Bolton, Councilmember
Casey McKeon, Councilmember
Dan Kalmick, Councilmember
Natalie Moser, Councilmember
Pat Burns, Councilmember
Executive Team
Al Zelinka, 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
Chief Eric Parra, Police
Ursula Luna-Reynosa, Community Development
Brittany Mello, Administrative Services
Chris Slama, Community & Library Services
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365
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FINANCIAL SECTION
368
Independent Auditor’s Report
City Council
City of Huntington Beach
Huntington Beach, California
Report on the Audit of the Financial Statements
Opinions
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 (City), as of and for the year June 30, 2022, and the related notes to the
financial statements, which collectively comprise the City’s basic financial statements as
listed in the table of contents.
In our opinion, the accompanying financial statements 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 as of June 30, 2022, 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.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America (GAAS) and the standards applicable to financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United States.
Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are
required to be independent of the City and to meet our other ethical responsibilities, in
accordance with the relevant ethical requirements relating to our audit. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Emphasis of Matter
As described further in Note 14 to the financial statements, during the year ended June 30,
2022, the City implemented Governmental Accounting Standards Board (GASB) Statement
No. 87, Leases. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements
The City’s management is responsible for the preparation and fair presentation of the
financial statements in accordance with accounting principles generally accepted in the
United States of America, and for 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.
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In preparing the financial statements, management is required to evaluate whether there
are conditions or events, considered in the aggregate, that raise substantial doubt about the
City’s ability to continue as a going concern for one year after the date that the financial
statements are issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinions. Reasonable assurance is a high level of
assurance but is not absolute assurance and therefore is not a guarantee that an audit
conducted in accordance with GAAS will always detect a material misstatement when it
exists. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control. Misstatements are considered
material if there is a substantial likelihood that, individually or in the aggregate, they would
influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
Exercise professional judgment and maintain professional skepticism throughout the
audit.
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, and design and perform audit procedures responsive
to those risks. Such procedures include examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit 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 City’s internal control.
Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the
overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the City’s ability to continue as a going
concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among
other matters, the planned scope and timing of the audit, significant audit findings, and
certain internal control–related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis,budgetary comparison information and pension and
other post employment benefit schedules be presented to supplement the basic financial
statements.Such information is the responsibility of management and, 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
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the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements
that collectively comprise the City’s basic financial statements. The combining and individual
nonmajor fund financial statements are presented for purposes of additional analysis and
are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements are the responsibility of
management and were derived from and relate directly to the underlying accounting and
other records used to prepare the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial statements
and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures
in accordance with auditing standards generally accepted in the United States of America. In
our opinion, the combining and individual nonmajor fund financial statements are fairly
stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the Comprehensive Annual
Financial Report. The other information comprises the introductory section and statistical
section but does not include the financial statements and our auditor's report thereon. Our
opinions on the financial statements do not cover the other information, and we do not
express an opinion or any form of assurance thereon. In connection with our audit of the
financial statements, our responsibility is to read the other information and consider
whether a material inconsistency exists between the other information and the financial
statements, or the other information otherwise appears to be materially misstated. If, based
on the work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 21, 2022 on our consideration of the City’s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters. The purpose of that report is solely 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 the effectiveness of internal
control over financial reporting or on compliance.That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the City’s
internal control over financial reporting and compliance.
Irvine, California
December 21, 2022
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MANAGEMENT DISCUSSION
AND
ANALYSIS
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
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, 2022. 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-x 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 $754,738,000. Total net position increased by $63,008,000 or
9.1 percent primarily as a result of the decrease in liabilities related to pension
contributions made with the issuance of Pension Obligation Bonds in prior year,
and the reduction of Net Pension and Other Post-Employment Benefit (OPEB)
Liabilities due to strong investment returns during the fiscal year.
Long-term obligations decreased by $430,308,000 or 47.0 percent. This decrease
is primarily due to prior year’s issuance of Pension Obligation Bonds in the amount
of $363,645,000 to refinance 85 percent of the City’s unfunded pension liability
with CalPERS. The effects of this issuance, along with strong investment returns,
reduced Net Pension Liability by $423,225,000. In addition, the City paid down
$35,342,000 of long-term obligations but added $31,479,000, of which
$24,271,000 is in claims payable.
Deferred outflows of resources decreased by $388,177,000 or 92.6 percent
primarily due to the timing of prior year’s pension contributions made subsequent
to the June 30, 2021 measurement date. This includes the unfunded liability
payment to CalPERS totaling $362,430,000 made from proceeds of the Pension
Obligation Bonds. Deferred inflows of resources increased by $126,798,000 or
656.4 percent primarily due to the differences between projected and actual
June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Assets 1,418,959$ 1,254,251$ 164,708$ 13.1%
Deferred Outflows of Resources 30,890 419,067 (388,177) -92.6%
Liabilities 548,996 962,271 (413,275) -42.9%
Deferred Inflows of Resources 146,115 19,317 126,798 656.4%
Total Net Position 754,738 691,730 63,008 9.1%
Unrestricted Net Position (189,318) (236,030) 46,712 19.8%
Long-Term Obligations 485,613 915,921 (430,308) -47.0%
Program Revenues 154,221 136,519 17,702 13.0%
Taxes 205,853 186,787 19,066 10.2%
Other General Revenues 107 26,660 (26,553) -99.6%
Expenses 297,173 346,399 (49,226) -14.2%
Total Governmental and Business-Type Activities
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
earnings on Pension Plan investments used to determine the City’s net pension
liability.
Program revenues increased by $17,702,000 or 13.0 percent. The increase is
primarily due to easing of COVID-19 restrictions in Fiscal Year 21/22. As of June
15, 2021, the Governor terminated the executive orders that put into place the Stay
at Home Order. With businesses and events permitted to operate at full capacity,
the City saw revenue increases across the board. There was a $5,559,000
increase in Community Services revenues related to concessionaires, recreation
classes, special events, and parking revenue. Parking related fees increased as
of June 2, 2021. Community Development related program revenue saw an
increase of $4,073,000 which can be attributed to increase in permits issued,
development projects, and grant reimbursements primarily related to Navigation
Center operations. Fire saw an increase of $4,572,000 primarily related to an
increase in emergency transport fees as the number of transports rose as hospital
wait times decreased due to a reduction in the number of COVID-19 patients.
Expenses decreased by $49,226,000 or 14.2 percent largely due to prior year’s
$363,645,000 issuance of Pension Obligation Bonds to refinance 85 percent of the
City’s unfunded pension liability with CalPERS. The effects of this issuance
reduced the overall expenses related to the City's CalPERS Unfunded Actuarial
Liabilities.
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.
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).
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
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 23-24 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 24 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, Low and Moderate Income Housing Asset Fund (LMIHAF) and
Pension Liability Debt Service Fund, all of which are considered to be major funds. Data
from the other 20 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.
The City provides an annual appropriated budget for its governmental funds. Budgetary
comparison schedules for the General Fund and Grants Special Revenue Fund are
required to be presented and are included on pages 129-130. Other major governmental
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
funds (LMIHAF Capital Projects Fund and Pension Liability Debt Service Fund) are
presented in the Supplementary Information section on page 156 of this report and
demonstrate compliance with the budget.
The basic governmental fund financial statements can be found on pages 25 and 27 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 29-31 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 32-33 of this report.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the
data provided in the government-wide and fund financial statements. The notes to the
financial statements can be found on pages 35-124 of this report.
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
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 128-138 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 141-148 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 $754,738,000.
Below is a summary schedule of the City’s net position at June 30, 2022 (in thousands):
Governmental Activities June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Current and Other Assets 331,062$ 276,665$ 54,397$ 19.7%
Non-Current Assets 106,219 - 106,219 N/A
Capital Assets 746,371 737,256 9,115 1.2%
Total Assets 1,183,652 1,013,921 63,512 16.7%
Deferred Outflows of Resources 28,739 393,130 (364,391) -92.7%
Current and Other Liabilities 57,250 34,751 22,499 64.7%
Long-Term Obligations 461,797 864,784 (402,987) -46.6%
Total Liabilities 519,047 899,535 (380,488) -42.3%
Deferred Inflows of Resources 136,033 17,716 118,317 667.9%
Net Position:
Net Investment in Capital Assets 712,289 699,204 13,085 1.9%
Restricted 68,460 65,755 2,705 4.1%
Unrestricted (223,438) (275,159) 51,721 18.8%
Total Net Position 557,311$ 489,800$ 67,511$ 13.8%
Business-Type Activities June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Current and Other Assets 82,651$ 97,861$ (15,210)$ -15.5%
Non-Current Assets 8,658 - 8,658 N/A
Capital Assets 143,998 142,469 1,529 1.1%
Total Assets 235,307 240,330 (13,681) -2.1%
Deferred Outflows of Resources 2,151 25,937 (23,786) -91.7%
Current and Other Liabilities 6,133 11,599 (5,466) -47.1%
Long-Term Obligations 23,816 51,137 (27,321) -53.4%
Total Liabilities 29,949 62,736 (32,787) -52.3%
Deferred Inflows of Resources 10,082 1,601 8,481 529.7%
Net Position:
Net Investment in Capital Assets 143,998 142,469 1,529 1.1%
Restricted 19,309 20,332 (1,023) -5.0%
Unrestricted 34,120 39,129 (5,009) -12.8%
Total Net Position 197,427$ 201,930$ (4,503)$ -2.2%
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
Prior year’s issuance of Pension Obligation Bonds in the amount of $363,645,000
to refinance 85 percent of the City’s unfunded pension liability with CalPERS and
strong investment returns resulted in a decrease of Long-Term Obligations in the
amount of $402,987,000 and $27,321,000 for Governmental Activities and
Business Activities, respectively. At the same time, the refinance and strong
investment returns generated a Net Pension Asset for the first time of
$100,849,000 for Governmental Activities and $8,018,000 for Business Activities.
Analysis of the City’s Net Position
Current and Other Assets: The increase in current and other assets of $54,397,000 for
governmental activities is mainly due to the increase in cash and receivables balances
related to increased property, sales tax revenues, and transient occupancy tax. A majority
of the increase is due to the implementation of new GASB Statement No. 87, Leases.
Under this Statement, the lessor of a lease contract is required to recognize a lease
receivable and a deferred inflow of resources. As a result, $12,570,000 in lease
receivable was recognized. The overall combined asset increase by $63,512,000 or 16.7
percent for governmental activities.
The decrease in current and other assets of $15,210,000 for business-type activities is
primarily due to a reduced cash balance in the Water Master Plan fund due to ongoing
large capital project costs in Fiscal Year 2021/22, including water main replacements and
the City’s share of sliplining the OC-44 imported water transmission line. The overall
combined asset decrease by $13,681,000 or 2.1 percent.
Current and Other Liabilities: Current and Other Liabilities for governmental activities
increased by $22,499,000 and decreased by $5,466,000 for business-type activities. For
governmental activities, the majority of the increase is related to the second tranche of
American Rescue Plan Act (ARPA) funds totaling $14,803,463 received in June 2022
recorded as unearned revenue. The decrease in business-type activities is due to normal
fluctuations in accounts payable and payroll cycles.
Deferred Outflows and Inflows of Resources: The decrease in deferred outflows of
resources of $364,391,000 and $23,786,000 for governmental activities and business-
type activities, respectively, is mainly due to deferral of pension contributions made in
prior year subsequent to the measurement date, including the unfunded liability payment
to CalPERS totaling $362,430,000 made from proceeds of the Pension Obligation Bond.
The increase in deferred inflows of resources of $118,317,000 for governmental activities
and $8,481,000 for business-type activities is primarily related to the actuarially
determined amortization 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. The actuarially
determined amortization difference also increased Net Pension Asset and Net Other
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
Postemployment Benefits Asset. See Notes 6, 7, and 8 for additional information. In
addition, the City implemented GASB Statement No. 87, Leases. Under this Statement,
the lessee is required to recognize a lease liability. This increased Governmental Deferred
Inflows of Resources by $12,400,000. See Note 14 for additional information.
Long-Term Obligations: Long-term obligations decreased by $402,987,000 for
governmental activities and $27,321,000 for business-type activities primarily due to the
City issuing a $363,645,000 Pension Obligation Bond in prior year to refinance 85 percent
of its Unfunded Pension Liability with CalPERS. The refinance and strong investment
returns resulted in a decrease in Net Pension Liability of $396,763,000 and $26,462,000
in Governmental Activities and Business-type Activities, respectively.
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
are not available for future spending. Although the City’s investment in its capital assets
are 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 $13,085,000 or 1.9 percent, primarily due to street improvements and
construction projects such as improvements to Bluff Top Trail, Rodger’s Senior Center
Repurposing, Central Park Improvements and Downtown Fiber Expansion. Net position
invested in capital assets net of related debt from business-type activities increased
$1,529,000 or 1.1 percent primarily due to replacement of water and sewer pipelines
throughout the City and improvements to Lift Stations on Slater/Springdale and
Saybrook/Heil.
Restricted Net Position: An additional portion of the City’s net position is subject to
external (legally imposed or statutory) restrictions ($68,460,000 for governmental
activities, and $19,309,000 for business-type activities). These amounts represent 12.3
percent and 9.8 percent of net position for governmental activities and business-type
activities, respectively. Restricted net position from governmental activities increased
$2,705,000 or 4.1 percent, largely due to the change in restricted net position in the
Pension Liability Fund largely due to revenues set aside from the voter-approved property
tax override dedicated to the payment of pension costs. Restricted net position from
business-type activities decreased by $1,023,000 or 5.0 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 $223,438,000 for
governmental activities and $34,120,000 for business-type activities) represent negative
11
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
40.1 percent and 17.3 percent, respectively, of net position for governmental activities
and business-type activities. Unrestricted net position for governmental activities
increased $51,721,000 or 18.8 percent. Unrestricted net position for business-type
activities decreased by $5,009,000 or 12.8 percent during the year due to the City having
Net Pension and Other Postemployment Benefit Assets in Fiscal Year 2021/22.
A condensed summary of governmental activities (in thousands) follows:
Revenues: June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Program Revenues:
Charges for Current Services 68,051$ 53,683$ 14,368$ 26.8%
Operating Grants and Contributions 9,301 6,013 3,288 54.7%
Capital Grants and Contributions 8,537 10,192 (1,655) -16.2%
Total Program Revenues 85,889 69,888 16,001 22.9%
General Revenues:
Property Taxes 102,539 99,958 2,581 2.6%
Sales Taxes 57,652 51,162 6,490 12.7%
Utility Taxes 19,528 18,374 1,154 6.3%
Franchise Taxes 10,380 8,040 2,340 29.1%
Transient Occupancy Tax 15,754 9,253 6,501 70.3%
Use of Money and Property (Loss)(1,895) 4,399 (6,294) -143.1%
From Other Agencies - Unrestricted 4,631 22,000 (17,369) -79.0%
Gain on Sale of Property 1,699 - 1,699 N/A
Total General Revenues 210,288 213,186 (2,898) -1.4%
Total Revenues 296,177 283,074 13,103 4.6%
Expenses:
City Council 382 423 (41) -9.7%
City Manager 5,412 11,163 (5,751) -51.5%
City Treasurer 259 340 (81) -23.8%
City Attorney 2,183 3,140 (957) -30.5%
City Clerk 1,060 1,147 (87) -7.6%
Finance 5,581 6,828 (1,247) -18.3%
Community Development 11,634 19,716 (8,082) -41.0%
Fire 52,808 65,960 (13,152) -19.9%
Information Services 6,469 6,230 239 3.8%
Police 73,964 102,415 (28,451) -27.8%
Community Services 11,517 11,365 152 1.3%
Library Services 5,212 6,181 (969) -15.7%
Public Works 42,598 40,270 2,328 5.8%
Interest on Long-Term Debt 9,548 2,706 6,842 252.8%
Total Expenses 228,627 277,884 (49,257) -17.7%
Change in Net Position Before Transfers 67,550 5,190
Transfers (39) (38)
Change in Net Position 67,511 5,152
Net Position - Beginning of Year 489,800 478,901
Cumulative Effect of Changes in
Accounting Principles - 5,747
Net Position - Beginning of Year as Restated 489,800 484,648
Net Position - End of Year 557,311$ 489,800$
Governmental Activities
12
380
City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
The cost of all governmental activities this year was $228,627,000. However, as shown
in the Statement of Activities, the amount that taxpayers ultimately financed for these
activities was $142,738,000, as costs of $68,051,000 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 $9,301,000, and capital
grants and contributions of $8,537,000. Overall, the City’s governmental program
revenues were $85,889,000. The City paid for the remaining “public benefit” portion of
governmental activities with $210,288,000 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 increased $14,368,000, or 26.8 percent. As noted in the
financial highlights section, the easing of COVID-19 restrictions has allowed the City to
provide services at full capacity. The City saw revenue increases across the board, with
the most significant increase from Community Development, Community Services, and
Fire. There was $5,559,000 increase in Community Services related to concessionaire,
recreational, special events, and facility rental revenues as well as increase in parking
fees rates. Community Development related program revenue saw an increase of
$2,600,000 which can be attributed to increase in permit issuance, fees collected for
development projects such as Main Street Mixed-Use and Gisler Residential, and
reimbursements received for operational cost of the Navigation Center. Fire saw an
increase of $4,524,000 due to increased billable call volume from emergency transport
services.
Operating Grants and Contributions increased by $3,288,000 or 54.7 percent and Capital
Grants and Contributions have decreased by $1,655,000 or 16.2 percent. The increase
in Operating Grant and Contributions primarily due to an increase in grant funds received
by Community Development, Police, and Public Works. Community Development saw an
increase primarily related to reimbursements for Navigation Center operating costs.
Police and Public Works had increases in Office of Traffic Safety grants and Highway
Bridge Replacement and Rehabilitation grants, respectively. The decrease in Capital
Grants and Contributions is related to the completion of the City's federal grant-funded
Highway Safety Improvement project.
Program expenses decreased by $49,257,000, or 17.7 percent primarily due to prior
year’s issuance of Pension Obligation Bonds to refinance the City’s Unfunded CalPERS
Pension Liability. The refinance reduced the City’s required employer contribution by
$26,012,000. Additionally, Police and Fire overtime costs decreased as a result of the
slowdown in COVID-19 related activities.
Total resources available during the year to finance governmental operations were
$785,977,000 consisting of net position at July 1, 2021 of $489,800,000, program
revenues of $85,889,000, and general revenues of $210,288,000. Total expenses for
13
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
governmental activities during the year were $228,627,000 plus transfers of $39,000.
Thus, net position increased by $67,511,000 or 13.8 percent, to $557,311,000.
A condensed summary of business-type activities (in thousands) follows:
The City’s net position from business-type activities decreased by $4,542,000 before
transfers. This is mainly due to unrealized market losses in the City’s investments.
The cost of all business-type activities this year was $68,546,000. As shown in the
Statement of Activities, the amount paid by users of the systems was $68,332,000,
unrealized market losses of $4,328,000, and transfers totaling $39,000. Beginning net
position was $201,930,000 and ending net position was $197,427,000, a decrease of
$4,503,000, or 2.2 percent. Of the ending net position, $143,998,000, or 72.9 percent,
was invested in capital assets, $19,309,000 or 9.8 percent was restricted for expenses
for the Water Master Plan, and $34,120,000, or 17.3 percent was unrestricted.
Transfers in for business-type activities were $39,000 for the current year, similar to prior
year.
June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Program Revenues:
Charges for Current Services 68,332$ 66,631$ 1,701$ 2.6%
Total Program Revenues 68,332 66,631 1,701 2.6%
Use of Money and Property (Loss)(4,328) 261 (4,589) -1758.2%
Total Revenues 64,004 66,892 (2,888) -4.3%
Expenses:
Water Utility 44,182 46,054 (1,872) -4.1%
Sewer Service 10,390 9,284 1,106 11.9%
Refuse Collection 13,738 12,936 802 6.2%
Hazmat Service 236 241 (5) -2.1%
Total Expenses 68,546 68,515 31 0.0%
Increase (Decrease) in Net Position
Before Transfers (4,542) (1,623)
Transfers 39 38
Total Change In Net Position (4,503) (1,585)
Net Position - Beginning of Year 201,930 203,515
Net Position - End of Year 197,427$ 201,930$
Business-Type Activities
14
382
City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
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 $8,215,000 largely due to increases in property
taxes, sales taxes, other taxes revenues and charges for current services. As previously
discussed, the easing of COVID-19 restrictions had an overall positive effect on revenues.
Businesses reopened, which in turn resulted in increased sales tax revenue and other tax
revenue. The City was able to provide services at full capacity. Many of the services and
events that were not permitted during COVID are now being provided.
The Grants Special Revenue Fund Balance decreased by $6,665,000 primarily due to
the increase in COVID-19 related expenditures that are anticipated to be reimbursed with
FEMA Public Assistance Disaster Relief funds, and other capital projects that have not
yet been reimbursed by the granting agencies.
The LMIHAF Capital Projects Fund Balance increased by $1,234,000 primarily due to the
City restructuring their loan with Jamboree Housing Corporation. In Fiscal Year 2021/22,
the City used HOME grant funds to reimburse the LMIHAF Capital Project Fund $900,000
that was lent to Jamboree Housing Corporation.
The Pension Liability Fund increased by $3,786,000, largely due to revenues set aside
from the voter-approved property tax override dedicated to the payment of Public Safety
pension costs.
June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Total Fund Equity:
General Fund 102,824$ 94,609$ 8,215$ 8.7%
Grants Special Revenue Fund (4,311) 2,354 (6,665) -283.1%
LMIHAF Capital Projects Fund 4,856 3,622 1,234 34.1%
Pension Liability Fund 20,729 16,943 3,786 0.0%
Total Fund Equity 124,098$ 117,528$ 6,570$ 5.6%
Governmental Funds
15
383
City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
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 $3,059,000 due to planned capital
expenditures exceeding revenues in Fiscal Year 2021/22, which caused the unrestricted
net position to decline by $1,142,000. The Sewer Fund net position decreased by
$1,444,000 and unrestricted net position decreased by $3,888,000 due to planned sewer
projects during the year. In addition, all enterprise funds with the exception of the Hazmat
Services Fund did not generate revenue that exceeded the expenses incurred for the
current fiscal year. This is primarily a result of the fair market value adjustment to the
City’s investments, which generated unrealized losses in Fiscal Year 2021/22.
Long-Term Obligations
Below is a schedule of the changes to the City’s long-term obligations (in thousands):
Governmental Activities:June 30, 2021 Additions Retirements June 30, 2022
Revenue Bonds 29,545$ -$ (2,180)$ 27,365$
Compensated Absences 13,405 5,243 (3,603) 15,045
Claims Payable 46,779 24,271 (14,619) 56,431
Pollution Remediation 2,000 - - 2,000
LED Lighting Phase I 432 - (118) 314
I-Bank CLEEN Loan 1,882 - (296) 1,586
CEC Loan 2,457 - (394) 2,063
Pension Obligation Bonds 341,501 - (10,859) 330,642
Finance Purchase Agreement 12,753 868 (1,907) 11,714
Leases Payable - 448 (201) 247
Total Long-Term Obligations
Governmental Activities 450,754 30,830 (34,177) 447,407
Business-Type Activities:
Compensated Absences 1,426 649 (389) 1,686
Pension Obligation Bonds 22,144 - (776) 21,368
Business-Type Activities:23,570 649 (1,165) 23,054
Total Long-Term Obligations 474,324$ 31,479$ (35,342)$ 470,461$
June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Net Position:
Water Fund 118,766$ 121,825$ (3,059)$ -2.5%
Sewer Fund 78,509 79,953 (1,444) -1.8%
Refuse Fund 16 48 (32) 66.7%
Hazmat Service Fund 136 104 32 30.8%
Total Net Position 197,427$ 201,930$ (4,503)$ -2.2%
Unrestricted Net Position:
Water Fund 9,104$ 10,246$ (1,142)$ -11.1%
Sewer Fund 24,977 28,865 (3,888) -13.5%
Refuse Fund (97) (86) (11) -12.8%
Hazmat Service Fund 136 104 32 30.8%
Total Unrestricted Net Position 34,120$ 39,129$ (5,009)$ -12.8%
Enterprise Funds
16
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
Additional information on the City’s long-term debt is shown in Note 11 and Note 14 to
the financial statements. Note 14, Leases, provides detail related to GASB 87 related
Lease Payable while Note 11 provides detail related to all other long-term debt. 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 by $3,863,000 or
0.8 percent from the prior fiscal year as the reduction in total debt related to annual debt
service payments was partially offset by new claims payable liabilities and lease
obligations.
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
February 2022.
The following are the ratings as determined by Standard and Poor’s and Fitch Ratings as
of June 30, 2022.
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 S & P Fitch
1999 Tax Allocation Refunding Bonds AA-AA
2002 Tax Allocation Refunding Bonds AA-N/A
2014 Lease Revenue Bonds, Series A AA AA+
2020(a) Lease Revenue Bonds AA AA+
2020(b) Lease Revenue Bonds AA AA+
2021 Pension Obligation Bonds AA+AA+
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
Below is a schedule of the City’s capital assets, net of accumulated depreciation (in
thousands):
Capital assets from governmental activities increased $9,115,000 or 1.2 percent. This
increase is largely due to street replacement infrastructure costs and construction
improvements throughout the City. Capital assets from business-type activities increased
$1,529,000 or 1.1 percent largely due to improvement to lift stations on Slater/Springdale
and Saybrook/Heil. Further information on the City’s capital assets can be found in Note
12 of the financial statements.
Furthermore, the newly implemented GASB Statement No. 87, Leases, requires a lessee
to recognize a lease liability and intangible right-to-use lease asset. As noted above, the
right-to-use lease asset is to be included as a capital asset. For Fiscal Year 2021/22, the
City reported $253,000 in right-to-use lease assets.
General Fund Budgetary Highlights
Changes to Original Budget
Comparing the Fiscal Year 2021/22 General Fund Original (i.e. Adopted) Budget
expenditures amount of $228,540,000 to the final budgeted amount of $257,714,000
shows a net increase of $29,174,000, or 12.8 percent. This overall increase is primarily
due to budget carryovers of $4,000,000, increased transfers to Emergency Operations
Center Fund of $1,000,000, Equipment Fund of $1,037,000, Infrastructure Fund of
$2,550,000, Retiree Insurance Fund of $1,038,000, Retirement Supplement Fund of
$4,576,000, Section 115 Trust of $3,000,000, Self Insurance General Liability Fund of
$1,488,000, Self Insurance Worker’s Compensation Fund of $3,000,000, and personnel
increase of $5,094,000.
Governmental Activities: June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Land 369,538$ 368,795$ 743$ 0.2%
Buildings 127,310 126,122 1,188 0.9%
Machinery and Equipment 19,510 19,583 (73) -0.4%
Construction in Progress 12,235 8,584 3,651 42.5%
Infrastructure 217,525 214,172 3,353 1.6%
Right to Use Leased Asset 253 - 253 N/A
Total Governmental Activities 746,371 737,256 9,115 1.2%
Business-Type Activities:
Land 3,907 3,907 - 0.0%
Buildings 68,693 65,847 2,846 4.3%
Machinery and Equipment 6,863 6,786 77 1.1%
Construction in Progress 109 1,782 (1,673) -93.9%
Infrastructure 64,426 64,147 279 0.4%
Total Business-Type Activities 143,998 142,469 1,529 1.1%
Total Capital Assets 890,369$ 879,725$ 10,644$ 1.2%
18
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
Final budgeted revenues for the General Fund increased $27,232,000 or 11.9 percent
from the original (adopted) budget for the Fiscal Year ended June 30, 2022. The change
from original to final budget occurred primarily as a result of adjustments made to
budgeted property tax, sales tax, utility tax, other taxes, and transfers from other funds.
Variance with Final Budget
General Fund actual revenues were less than the final budget by $269,000 for the Fiscal
Year ended June 30, 2022. This budget variance is due in large part to actual investment
returns underperforming budgeted amounts.
General Fund expenditures were $8,011,000 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 $1,698,000
in savings primarily due to differences in projected versus actual cost of providing
services.
The Public Works and Community Development Departments realized $2,649,000
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 $6,665,000 largely
due to COVID-19 related expenditures that are expected to be reimbursed through FEMA
Public Assistance funds.
LMIHAF Capital Projects Fund
The fund balance in the LMIHAF Capital Projects Fund increased by $1,234,000 due to
the City restructuring their loan with Jamboree Housing Corporation. In Fiscal Year
2021/22, the City transferred HOME grant funds to payback LMIHAF Capital Project Fund
$900,000 that was loanded to Jamboree Housing Corporation.
Pension Liability Debt Service Fund
The fund balance in the Pension Liability Debt Service Fund increased by $3,786,000
due to revenues set-aside from the voter-approved property tax override dedicated to the
payment of Public Safety pension costs.
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387
City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
Economic Factors and Next Year’s Budget
The Adopted Fiscal Year 2022/23 Budget is structurally balanced, totaling $532.0 million
in All Funds. This reflects a $107.6 million, or 25.3 percent, increase from the Fiscal Year
2021/22 Adopted All Funds Budget of $424.4 million. A significant portion of the increase
is due to added investment in essential infrastructure and equipment and the restoration
of COVID-19 temporary cost saving measures, as well as use of the City's ARPA funds
totaling $29.6 million for public safety personnel costs. The larger increases were due to
the following funds: Infrastructure Fund ($25.1 million), Equipment Fund ($11.6 million),
Water Fund ($47.9 million), and Sewer Fund ($19.4 million).
The General Fund budget, which provides the majority of public services to the
community, totals $269.0 million, reflecting a $41.0 million, or 18.0 percent increase from
the Fiscal Year 2021/22 budget of $228.0 million. This increase is a result of the added
Section 115 Trust pension liability set-aside, increased investment in infrastructure and
equipment, and restoration of temporary expenditure reductions made in response to the
COVID-19 pandemic. 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 49 cents for every dollar spent in the
General fund. With approximately half of the General Fund Budget committed to the
Police and Fire Departments, the City has dedicated the greatest share of its resources,
or $132.7 million to these core services.
In the Police Department, the budget includes $1.2 million in equipment funds for the
replacement of 16 police vehicles and other front line safety equipment. The CIP includes
$2,952,000 for relocation and expansion of the Police Department Communications
Center and Traffic Office, Heliport Hangar improvements, updates to the women’s locker
room, fiber installations at the Bella Terra Police substation, and funding for a Joint Youth
Training Center to be shared between the Police and Fire Departments.
In the Fire Department, the Adopted Budget includes $1.1 million for equipment
replacement comprising the replacement of two Ambulances and the purchase of self-
contained breathing apparatus (SCBA) and cardiac monitors/defibrillators. The General
Fund CIP includes $1.3 million for a traffic signal at Heil Fire Station and the Fire
Department’s share of the Joint Youth Training Center.
The Fiscal Year 2022/23 Adopted Budget is a balanced budget. As the economy
continues to bounce back and public health guidelines become less restrictive, revenue
sources such as Sales Tax and Transient Occupancy Tax are anticipated to increase
considerably in the coming year. The Fiscal Year 2022/23 Adopted Budget includes the
continuation of Citywide restructuring measures implemented during Fiscal Year 2020/21,
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City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
restores a number of operating cuts made in response to the COVID-19 pandemic,
includes mandated savings along with the debt service payment for the City’s recently
issued Pension Obligation Bonds, and prioritizes improvements to the City’s facilities,
roads and parks. The Fiscal Year 2022/23 budget remains committed to improving the
quality of life for our residents, businesses, and visitors by increasing funding for core
services such as public safety, community & library service programs, and improving the
City’s infrastructure.
General Fund Revenue
General Fund revenue is projected to be $283.2 million, a $55.2 million or 24.2 percent
increase from the Fiscal Year 2021/22 Adopted Budget resulting from projected positive
economic impacts resulting from widespread COVID-19 vaccinations, loosening public
health orders, and the re-opening of businesses for indoor dining and shopping.
Property Taxes are estimated at $98.3 million, reflecting an increase of 5.5 percent
due to the housing market boom leading to accelerated growth in assessed valuations
and Employee Retirement Override revenues being transferred to the Pension Liability
Fund and no longer being budgeted in the General Fund.
Sales Tax revenues are projected to be $53.3 million, an increase of 19.5 percent
from Fiscal Year 2021/22. Transient Occupancy Taxes are anticipated to increase
$3.8 million, or 35.5 percent. The increases in these two revenue sources is
attributable to the projected positive economic impacts resulting from widespread
COVID-19 vaccinations, loosening public health orders, re-opening of businesses and
an increase in visitors to the City’s beaches and downtown businesses.
Licenses and Permits, estimated at $8.2 million, reflect a 5.1 percent increase, as
economic and development activity are anticipated to increase in the coming year.
Franchise Taxes are anticipated at $8.6 million, a 21.1 percent increase. Use of
Money & Property, which includes parking revenues and lease concessions, is
projected to increase $0.7 million, or 4.3 percent, due to business re-openings and
expected increases in visitors to our beach and downtown areas, especially as
international travel continues to become less restrictive.
Contacting the City’s Financial Management Team
This financial report is designed to provide our citizens, taxpayers, customers, and
investors and creditors with a general overview of the City’s finances and to show the
City’s accountability for the money it receives. If you have questions about this report,
separate reports of the City’s component units or need any additional financial
information, contact the Finance Department at 2000 Main Street, Huntington Beach,
California, 92648-2702, phone (714) 536-5630 or email tvi@surfcity-hb.org.
21
389
BASIC FINANCIAL STATEMENTS
22
390
ASSETS
Governmental
Activities
Business-Type
Activities Total
Current Assets:
Cash and Investments 261,867$ 72,717$ 334,584$
Cash and Investments with Fiscal Agent 9,838 - 9,838
Receivables, Net 43,348 6,674 50,022
Advances to Successor Agency 1,363 - 1,363
Lease Receivable 12,570 - 12,570
Inventories - 1,444 1,444
Prepaids 1,877 - 1,877
Joint Venture 199 1,816 2,015
Total Current Assets 331,062 82,651 413,713
Non-Current Assets:
Net Pension Asset 100,849 8,018 108,867
Net Other Postemployment Benefits Asset 5,370 640 6,010
Total Non-Current Assets 106,219 8,658 114,877
Capital Assets:
Non-Depreciable 381,773 4,016 385,789
Depreciable, Net 364,598 139,982 504,580
Total Capital Assets 746,371 143,998 890,369
Total Assets 1,183,652 235,307 1,418,959
DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows Related to Pensions 24,515 1,647 26,162
Deferred Outflows Related to Other Postemployment Benefits 4,224 504 4,728
Total Deferred Outflows of Resources 28,739 2,151 30,890
LIABILITIES
Current Liabilities:
Accounts Payable 18,309 3,825 22,134
Accrued Payroll 5,702 766 6,468
Unearned Revenue 31,157 - 31,157
Accrued Interest Payable 587 22 609
Deposits 1,495 1,520 3,015
Total Current Liabilities 57,250 6,133 63,383
Long-Term Obligations:
Long-Term Obligations Due Within One Year 35,611 1,348 36,959
Long-Term Obligations Due in More than One Year 411,796 21,706 433,502
Net Pension Liability 14,390 762 15,152
Total Long-Term Obligations 461,797 23,816 485,613
Total Liabilities 519,047 29,949 548,996
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to Pensions 113,840 8,916 122,756
Deferred Inflows Related to Other Postemployment Benefits 9,793 1,166 10,959
Deferred Inflows Lease Related 12,400 - 12,400
Total Deferred Inflow of Resources 136,033 10,082 146,115
NET POSITION
Net Investment in Capital Assets 712,289 143,998 856,287
Restricted for:
Debt Service 4,432 - 4,432
Capital Projects 19,024 19,309 38,333
Public Works and Community Services Projects 45,004 - 45,004
Total Restricted Net Position 68,460 19,309 87,769
Unrestricted (223,438) 34,120 (189,318)
Total Net Position 557,311$ 197,427$ 754,738$
CITY OF HUNTINGTON BEACH
STATEMENT OF NET POSITION
JUNE 30, 2022
(In Thousands)
See Notes to the Financial Statements
23
391
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 382$ 162$ -$ -$ (220)$ -$ (220)$
City Manager 5,412 4,131 56 13 (1,212) - (1,212)
City Treasurer 259 149 - - (110) - (110)
City Attorney 2,183 5 - - (2,178) - (2,178)
City Clerk 1,060 269 - - (791) - (791)
Finance 5,581 3,036 - - (2,545) - (2,545)
Community Development 11,634 10,953 3,993 586 3,898 - 3,898
Fire 52,808 13,401 73 - (39,334) - (39,334)
Information Services 6,469 604 - - (5,865) - (5,865)
Police 73,964 6,687 1,838 - (65,439) - (65,439)
Community Services 11,517 21,117 854 95 10,549 - 10,549
Library Services 5,212 302 492 - (4,418) - (4,418)
Public Works 42,598 7,235 1,995 7,843 (25,525) - (25,525)
Interest on Long-Term Debt 9,548 - - - (9,548) - (9,548)
Total Governmental Activities 228,627 68,051 9,301 8,537 (142,738) - (142,738)
Business-type Activities:
Water Utility 44,182 43,590 - - - (592) (592)
Sewer Service 10,390 10,791 - - - 401 401
Refuse Collection 13,738 13,675 - - - (63) (63)
Hazmat Service 236 276 - - - 40 40
Total Business-Type Activities 68,546 68,332 - - - (214) (214)
Total Governmental and
Business Type Activities 297,173$ 136,383$ 9,301$ 8,537$ (142,738)$ (214)$ (142,952)$
General Revenues:
Taxes:
Property Taxes 102,539$ -$ 102,539$
Sales Taxes 57,652 - 57,652
Utility Taxes 19,528 - 19,528
Franchise Taxes 10,380 - 10,380
Transient Occupancy Tax 15,754 - 15,754
Total Taxes 205,853 - 205,853
Other:
Use of Money and Property (Loss) (1,895) (4,328) (6,223)
From Other Agencies - Unrestricted 4,631 - 4,631
Gain on Sale of Property 1,699 - 1,699
Total General Revenues 210,288 (4,328) 205,960
Transfers (39) 39 -
Total General Revenues and Transfers 210,249 (4,289) 205,960
Change in Net Position 67,511 (4,503) 63,008
Net Position - Beginning of Year 489,800 201,930 691,730
Net Position - End of Year 557,311$ 197,427$ 754,738$
Net (Expense) Revenue and Changes in
Net Position
CITY OF HUNTINGTON BEACH
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
See Notes to the Financial Statements
24
392
CITY OF HUNTINGTON BEACH
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2022
(In Thousands)
ASSETS General Fund
Grants Special
Revenue
LMIHAF
Capital
Projects
Pension
Liability
Other
Governmental
Funds Total
Cash and Investments 99,943$ 26,669$ 3,484$ 20,551$ 73,211$ 223,858$
Cash and Investments with Fiscal Agent - - - - 9,838 9,838
Taxes Receivable 14,026 - - 118 1,942 16,086
Other Receivables, Net 9,833 8,446 8,210 62 609 27,160
Lease Receivable 12,570 - - - - 12,570
Advances to Successor Agency - - 1,363 - - 1,363
Prepaids 82 - - - 1,000 1,082
Total Assets 136,454 35,115 13,057 20,731 86,600 291,957
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
LIABILITIES
Accounts Payable 11,707 1,396 - 2 4,539 17,644
Accrued Payroll 5,380 74 2 - 227 5,683
Unearned Revenue 1,217 29,940 - - - 31,157
Deposits Payable 1,495 - - - - 1,495
Total Liabilities 19,799 31,410 2 2 4,766 55,979
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Lease Related 12,400 - - - - 12,400
Unavailable Revenue 1,431 8,016 8,199 - 65 17,711
Total Deferred Inflows of Resources 13,831 8,016 8,199 - 65 30,111
FUND BALANCES
Nonspendable
Prepaids 82 - - - - 82
Restricted
Underground Utilities 364 - - - - 364
Restitution 296 - - - - 296
Donations 777 - - - - 777
Section 115 Trust 12,427 - - - - 12,427
Pollution Remediation - - - - 355 355
Debt Service - - - 20,729 4,432 25,161
Highways, Streets and Transportation - - - - 13,637 13,637
Low Income Housing - - 4,856 - 5,816 10,672
Air Quality - - - - 1,214 1,214
Other Capital Projects - - - - 22,769 22,769
Other Purposes 759 - - - 1,966 2,725
Committed
Economic Uncertainties 26,114 - - - - 26,114
Parks - - - - 1,257 1,257
Other Capital Projects 551 - - - 23,474 24,025
Other Purposes - - - - 3,828 3,828
Assigned
Litigation Reserves 3,650 - - - - 3,650
AES Reserve 4,900 - - - - 4,900
Capital Improvement Reserve 8,597 - - - 3,021 11,618
Equipment Replacement 8,295 - - - - 8,295
General Plan Maintenance 1,143 - - - - 1,143
General Liability Plan Migration 2,801 - - - - 2,801
Pension Rate Stabilization 2,206 - - - - 2,206
Cityview Replacement 1,028 - - - - 1,028
Section 115 Trust 3,500 - - - - 3,500
Triple Flip 109 - - - - 109
Strategic Initiatives 16,536 - - - - 16,536
Housing Agreement 1,657 - - - - 1,657
Year-End Fair Value 1,983 - - - - 1,983
Other Purposes 5,049 - - - - 5,049
Unassigned - (4,311) - - - (4,311)
Total Fund Balances 102,824 (4,311) 4,856 20,729 81,769 205,867
Total Liabilities, Deferred Inflows
of Resources and Fund Balances 136,454$ 35,115$ 13,057$ 20,731$ 86,600$ 291,957$
See Notes to the Financial Statements
25
393
Amounts reported for governmental activities in the statement of net position are
different because:
Total Fund Balances Governmental Funds 205,867$
Net Pension Asset is not available to pay in the current period and therefore are not reported
in the funds.
Net Pension Asset 100,461
Net Other Postemployment Benefits Asset 5,341 105,802
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 1,132,022
Accumulated Depreciation (392,130)
Total Capital Assets 739,892
Joint Venture 199
Right to Use Leased Assets used in governmental activities are not current financial
resources and, therefore, are not reported in the governmental funds.
Right to Use Assets 448
Accumulated Amortization (195)
Total Right to Use Assets 253
Internal Service 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.(13,052)
Revenues that are measurable but not available are not recognized as revenue in
governmental funds. Such amounts are recorded as Unavailable Revenue under the
modified accrual basis of accounting.17,711
Deferred Outflows Related to Pensions 24,437
Deferred Outflows Related to Other Postemployment Benefits (OPEB)4,201
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.(14,356)
Deferred Inflows Related to Pensions (113,411)
Deferred Inflows Related to Other Postemployment Benefits (OPEB)(9,740)
Other long-term liabilities are not due in the current period and, therefore, are not recorded in
the governmental funds.
Accrued Interest Payable (586)
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 (22,118)
Long-Term Obligations Due in More than One Year (367,788)
Net Position of Governmental Activities 557,311$
(In Thousands)
CITY OF HUNTINGTON BEACH
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2022
See Notes to the Financial Statements
26
394
REVENUES
General
Fund
Grants Special
Revenue
LMIHAF
Capital
Projects
Pension
Liability
Other
Governmental
Funds Total
Property Taxes 94,627$ -$ -$ 7,912$ -$ 102,539$
Sales Taxes 53,362 - - - 4,290 57,652
Utility Taxes 19,528 - - - - 19,528
Other Taxes 26,136 - - - 7,584 33,720
Licenses and Permits 8,666 - - - 930 9,596
Fines and Forfeitures 5,144 - - - - 5,144
Use of Money and Property (Loss)12,215 96 614 192 1,248 14,365
Intergovernmental 5,130 5,682 - - 2,248 13,060
Charges for Current Services 29,364 - - 16,764 3,774 49,902
Other 2,882 - - - 25 2,907
Total Revenues 257,054 5,778 614 24,868 20,099 308,413
EXPENDITURES
Current:
City Council 426 - - - - 426
City Manager 4,616 13 - - 636 5,265
City Treasurer 326 - - - - 326
City Attorney 2,995 - - - - 2,995
City Clerk 1,295 - - - - 1,295
Finance 6,869 359 - 2 29 7,259
Community Development 10,716 2,716 56 - 924 14,412
Fire 60,643 2,164 - - 73 62,880
Information Services 7,389 7 - - 475 7,871
Police 91,970 1,856 - - 150 93,976
Community Services 11,133 714 - - 6,608 18,455
Library Services 6,014 202 - - 84 6,300
Public Works 24,285 2,405 - - 23,468 50,158
Debt Service:
Principal 2,917 - - 10,821 2,180 15,918
Interest 260 - - 10,259 780 11,299
Total Expenditures 231,854 10,436 56 21,082 35,407 298,835
Excess (Deficiency) of Revenues Over
(Under) Expenditures 25,200 (4,658) 558 3,786 (15,308) 9,578
OTHER FINANCING SOURCES (USES)
Transfers In 416 1,104 900 - 19,222 21,642
Lease (as Lessee) 448 - - - - 448
Issuance of Finance Purchase Agreement - - - - 868 868
Transfers Out (17,849) (3,111) (224) - (497) (21,681)
Total Other Financing Sources (Uses) (16,985) (2,007) 676 - 19,593 1,277
Net Change In Fund Balances 8,215 (6,665) 1,234 3,786 4,285 10,855
Fund Balances - Beginning of Year 94,609 2,354 3,622 16,943 77,484 195,012
Fund Balances - End of Year 102,824$ (4,311)$ 4,856$ 20,729$ 81,769$ 205,867$
(In Thousands)
CITY OF HUNTINGTON BEACH
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
See Notes to the Financial Statements
27
395
Amounts reported for governmental activities in the statement of activities
are different because:
Net Changes in Fund Balances - Total Governmental Funds 10,855$
Depreciable Assets Purchased 20,294
Depreciable Assets Disposition (208)
Non-Depreciable Assets Purchased 8,285
Non-Depreciable Assets Disposition (3,891)
Capital Asset Depreciation (16,287)
Joint Venture 14
Current Year Grant and Other Revenue Accrual 7,311
Prior Year Grant and Other Revenue Accrual (3,010)
(1,350)
Pension income reported in the statement of activities includes the change in the
the net pension liability and related changes in pension amounts for deferred outflows
and deferred inflows of resources. 33,027
2,372
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 governmental activities. (4,611)
Internal Service Funds repayment of long-term debt is not reported as governmental
activities. 37
Current Year Interest Accrual (586)
Prior Year Interest Accrual 2,337
15,918
(1,316)
(1,680)
Change in Net Position of Governmental Activities 67,511$
FOR THE YEAR ENDED JUNE 30, 2022
(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.
See Notes to the Financial Statements
28
396
Governmental
Activities
Water
Fund
Sewer Service
Fund
Refuse
Fund
Hazmat
Service Fund Total
Internal Service
Funds
ASSETS
Current Assets:
Cash and Investments 21,744$ 30,957$ 246$ 461$ 53,408$ 38,009$
Restricted Cash and Investments 19,309 - - - 19,309 -
Other Receivables, Net 2,808 579 771 10 4,168 102
Prepaids - - - - - 795
Joint Ventures 1,816 - - - 1,816 -
Inventories 1,444 - - - 1,444 -
Unbilled Receivables 1,562 412 532 - 2,506 -
Total Current Assets 48,683 31,948 1,549 471 82,651 38,906
Non-Current Assets:
Net Pension Asset 5,608 2,098 188 124 8,018 388
Net Other Postemployment Benefits Asset 460 157 16 7 640 29
Total Non-Current Assets 6,068 2,255 204 131 8,658 417
Capital Assets:
Land 3,907 - - - 3,907 -
Buildings and Improvements 57,933 47,690 - - 105,623 -
Machinery and Equipment 17,576 4,597 215 - 22,388 8,598
Infrastructure 106,236 45,432 - - 151,668 -
Construction in Progress - 109 - - 109 -
Less Accumulated Depreciation (95,299) (44,296) (102) - (139,697) (2,372)
Total Capital Assets 90,353 53,532 113 - 143,998 6,226
Total Assets 145,104 87,735 1,866 602 235,307 45,549
DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows Related to Pensions 1,155 432 38 22 1,647 78
Deferred Outflows Related to Other Postemployment Benefits 362 124 13 5 504 23
Total Deferred Outflows of Resources 1,517 556 51 27 2,151 101
Total Assets and Deferred Outflows of Resources 146,621 88,291 1,917 629 237,458 45,650
LIABILITIES
Current Liabilities:
Accounts Payable 2,057 688 1,080 - 3,825 665
Accrued Payroll 519 214 21 12 766 19
Deposits Payable 1,520 - - - 1,520 -
Interest Payable 15 6 1 - 22 1
Current Portion of Claims Payable - - - - - 13,439
Current Portion of Compensated Absences 321 125 11 2 459 11
Total Current Liabilities 4,432 1,033 1,113 14 6,592 14,135
Non-Current Liabilities:
Compensated Absences 857 335 30 5 1,227 30
Long-Term Obligations Due Within One Year 622 233 21 13 889 43
Long-Term Obligations Due in More than One Year 14,330 5,360 481 308 20,479 986
Net Pension Liability 537 200 18 7 762 34
Claims Payable - - - - - 42,992
Total Non-Current Liabilities 16,346 6,128 550 333 23,357 44,085
Total Liabilities 20,778 7,161 1,663 347 29,949 58,220
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to Pensions 6,239 2,334 209 134 8,916 429
Deferred Inflows Related to Other Postemployment Benefits 838 287 29 12 1,166 53
Total Deferred Inflows of Resources 7,077 2,621 238 146 10,082 482
NET POSITION
Investment in Capital Assets 90,353 53,532 113 - 143,998 6,226
Restricted for:
Capital Projects 19,309 - - - 19,309 -
Unrestricted 9,104 24,977 (97) 136 34,120 (19,278)
Total Net Position 118,766 78,509 16 136 197,427 (13,052)
Total Liabilities, Deferred Inflows
of Resources, and Net Position 146,621$ 88,291$ 1,917$ 629$ 237,458$ 45,650$
PROPRIETARY FUNDS
STATEMENT OF NET POSITION
CITY OF HUNTINGTON BEACH
Business-Type Activities - Enterprise Funds
(In Thousands)
June 30, 2022
See Notes to the Financial Statements
29
397
Governmental
Activities
Water
Fund
Sewer Service
Fund
Refuse
Fund
Hazmat
Service Fund Total
Internal Service
Funds
OPERATING REVENUES
Sales 39,245$ -$ -$ -$ 39,245$ -$
Fees and Charges for Service - 10,719 13,606 276 24,601 22,081
Other 4,345 72 69 - 4,486 152
Total Operating Revenues 43,590 10,791 13,675 276 68,332 22,233
OPERATING EXPENSES
Water Purchases 17,291 - - - 17,291 -
Supplies and Operations 8,359 7,904 13,704 228 30,195 3,499
Engineering 1,982 - - - 1,982 -
Production and Distribution 8,744 - - - 8,744 -
Maintenance 564 - - - 564 -
Water Meters 1,757 - - - 1,757 -
Water Quality 809 - - - 809 -
Water Use Efficiency 247 - - - 247 -
Claims and Judgments - - - - - 22,113
Depreciation 4,053 2,345 21 - 6,419 1,012
Total Operating Expenses 43,806 10,249 13,725 228 68,008 26,624
Operating Income (Loss) (216) 542 (50) 48 324 (4,391)
NON-OPERATING REVENUES (EXPENSES)
Investment Income (Loss) (2,468) (1,845) (20) 5 (4,328) (1,890)
Interest Expense (376) (141) (13) (8) (538) (29)
Proceeds from Sale of Equipment - - - - - 1,699
Total Non-Operating Revenues (Expenses) (2,844) (1,986) (33) (3) (4,866) (220)
Income (Loss) Before Transfers (3,060) (1,444) (83) 45 (4,542) (4,611)
TRANSFERS
Transfers In 1 - 51 - 52 -
Transfers Out - - - (13) (13) -
Total Transfers 1 - 51 (13) 39 -
Change in Net Position (3,059) (1,444) (32) 32 (4,503) (4,611)
Net Position - Beginning of Year 121,825 79,953 48 104 201,930 (8,441)
Net Position - End of Year 118,766$ 78,509$ 16$ 136$ 197,427$ (13,052)$
Business-Type Activities - Enterprise Funds
(In Thousands)
FOR THE YEAR ENDED JUNE 30, 2022
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
CITY OF HUNTINGTON BEACH
See Notes to the Financial Statements
30
398
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 43,551$ 10,820$ 13,537$ 275$ 68,183$ 22,227$
Cash Paid to Employees for Services (9,113) (1,585) (149) (93) (10,940) (378)
Cash Paid to Suppliers of Goods and Services (38,443) (7,034) (13,561) (179) (59,217) (15,502)
Net Cash and Investment Provided (Used) by
Operating Activities (4,005) 2,201 (173) 3 (1,974) 6,347
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers In 1 - 51 - 52 -
Transfers Out - - - (13) (13) -
Debt Service (544) (203) (17) (12) (776) (37)
Interest Paid (452) (170) (15) (10) (647) (32)
Net Cash and Investments Provided (Used) by
Noncapital Financing Activities (995) (373) 19 (35) (1,384) (69)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchase of Capital Assets (3,159) (4,789) - - (7,948) (1,934)
Proceeds from Sale of Plant, Property, and Equipment - - - - - 1,699
Net Cash and Investments Provided (Used) by
Capital and Related Financing Activities (3,159) (4,789) - - (7,948) (235)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment Income (Loss) (2,468) (1,845) (20) 5 (4,328) (1,890)
Net Cash and Investments Provided (Used) by
Investing Activities (2,468) (1,845) (20) 5 (4,328) (1,890)
Net Increase (Decrease) in Cash and Investments (10,627) (4,806) (174) (27) (15,634) 4,153
Cash and Investments - Beginning of Year 51,680 35,763 420 488 88,351 33,856
Cash and Investments - End of Year 41,053$ 30,957$ 246$ 461$ 72,717$ 38,009$
RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET CASH AND INVESTMENTS
PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income (Loss) (216)$ 542$ (50)$ 48$ 324$ (4,391)$
Adjustments to Reconcile Operating
Income (Loss) to Net Cash and Investments
Provided (Used) by Operating Activities
Depreciation 4,053 2,345 21 - 6,419 1,012
(Increase) in Other Receivables, Net (233) - (165) (1) (399) (6)
Decrease in Unbilled Receivables 165 29 27 - 221 -
Decrease in Prepaids - - - - - 282
(Increase) in Joint Ventures (244) - - - (244) -
(Increase) in Inventory (2) - - - (2) -
(Increase) in Net Pension Asset (5,608) (2,098) (188) (124) (8,018) (388)
(Increase) in Net Other Postemployment Benefits Asset (460) (157) (16) (7) (640) (29)
Increase (Decrease) in Accounts Payable (5,573) (5) 57 - (5,521) (50)
Increase in Accrued Payroll 86 40 7 2 135 3
Increase in Deposits Payable 29 - - - 29 -
Increase in Claims Payable - - - - - 9,652
Increase (Decrease) in Compensated Absences 173 82 7 (2) 260 (3)
Decrease in Deferred Pension Outflow 16,770 6,273 562 364 23,969 1,156
Increase in Deferred Pension Inflow 5,316 1,989 178 119 7,602 368
(Decrease) in Net Pension Liability (18,516) (6,926) (621) (399) (26,462) (1,275)
(Increase) in Deferred Other Postemployment Benefits Outflow (131) (45) (5) (2) (183) (8)
Increase in Deferred Other Postemployment Benefits Inflow 632 216 22 9 879 40
(Decrease) in Net Other Postemployment Benefits Liability (246) (84) (9) (4) (343) (16)
Net Cash and Investments Provided
by Operating Activities (4,005)$ 2,201$ (173)$ 3$ (1,974)$ 6,347$
NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES
There were no noncash investing, capital, or financing activities during the year ended June 30, 2022.
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
Business-Type Activities - Enterprise Funds
CITY OF HUNTINGTON BEACH
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
See Notes to the Financial Statements
31
399
ASSETS Custodial Funds
Pension Trust Fund -
Retirement
Supplemental Fund
Huntington Beach
Redevelopment
Successor Agency
Private Purpose Trust
Current Assets:
Cash and Investments 4,725$ -$ 6,500$
Cash and Investments with Fiscal Agent 3,268 - 2,587
Mutual Funds - 58,101 -
Money Market Funds - 898 -
Accounts Receivable, Net 760 2 -
Interest Receivable - - 25
Total Assets 8,753 59,001 9,112
LIABILITIES
Current Liabilities:
Accounts Payable 2,070 - 393
Accrued Payroll - - 8
Advances from City of Huntington Beach - - 1,363
Total Current Liabilities 2,070 - 1,764
Long-Term Obligations:
Long-Term Obligations Due Within One Year - - 4,505
Long-Term Obligations Due in More than One Year - - 20,793
Total Long-Term Obligations - - 25,298
Total Liabilities 2,070 - 27,062
NET POSITION
Restricted for Pension Benefits - 59,001 -
Held in Trust For Other Purposes - - (17,950)
Restricted for Individuals and Organizations 6,683 - -
Total Net Position 6,683$ 59,001$ (17,950)$
CITY OF HUNTINGTON BEACH
STATEMENT OF FIDUCIARY FUND NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2022
(In Thousands)
See Notes to the Financial Statements
32
400
ADDITIONS Custodial Funds
Pension Trust Fund -
Retirement
Supplemental Fund
Huntington Beach
Redevelopment
Successor Agency
Private Purpose Trust
Employer Contributions -$ 6,005$ -$
Special Assessments or Special Taxes
Collected from Property Owners 1,542 - 6,008
Business Improvement District Taxes 6,355 - -
Parking Assessments 2,433 - -
Other Income - - 10
Total Additions Before Investment Income 10,330 6,005 6,018
Investment Income:
Investment Income (Loss)19 (11,226) 75
Less: Investment Expense - (136) -
Net Investment Income (Loss) 19 (11,362) 75
Total Additions 10,349 (5,357) 6,093
DEDUCTIONS
Benefits - 5,668 -
Administrative Costs 20 338 -
Payments to Other Organizations 7,022 - -
Economic Development - - 250
Interest and Fiscal Agency Expenses 1,435 - 1,525
Principal 1,715 - -
Total Deductions 10,192 6,006 1,775
Change in Net Position 157 (11,363) 4,318
Net Position - Beginning of Year 6,526 70,364 (22,268)
Net Position - End of Year 6,683$ 59,001$ (17,950)$
STATEMENT OF CHANGES IN FIDUCIARY FUND NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
CITY OF HUNTINGTON BEACH
See Notes to the Financial Statements
33
401
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
Footnote
Number Description Page
1. Summary of Significant Accounting Policies ............................ 39-52
2. Cash and Investments Notes ...................................................... 53-60
3. Other Receivables ......................................................................... 60-61
4. Unearned Revenue ....................................................................... 62
5. Unavailable Revenue ................................................................... 62
6. Retirement Plan – Normal ........................................................... 63-74
7. Retirement Plan – Supplemental ............................................... 74-81
8. Other Post Employment Benefits .............................................. 82-88
9. Risk Management ................................................................ 89-90
10. Interfund Transactions .......................................................................... 91-92
11. Long-Term Obligations ................................................................. 93-103
12. Capital Assets ................................................................................ 104-105
13. Investment in Joint Ventures ....................................................... 106
14. Leases ............................................................................................. 106-112
15. Successor Agency Trust for Assets of the Former
Redevelopment Agency of the City of Huntington Beach ..... 112-118
16. Commitments and Contingencies .............................................. 118-123
17. Other Information ......................................................................... 123-124
34
402
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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.
35
403
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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.
36
404
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 $68,460,000 of governmental
activities restricted net position, of which $40,364,000 is restricted by enabling
legislation. The government-wide Statement of Net Position reports $19,309,000 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.
37
405
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 $223,438,000 of
governmental activities unrestricted net position, which is largely a result of the
issuance of Pension Obligations Bonds to pay down the City’s CalPERS Unfunded
Accrued Liability. The City’s Long-Term Obligations at June 30, 2022 is
$485,613,000, of which, $461,797,000 is payable from Governmental Activities.
The government-wide Statement of Net Position reports $34,120,000 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.
38
406
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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.
39
407
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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, 2022, by major fund (in thousands):
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 $1 million taken by another government entity;
Drop in projected/actual revenue of more than 5% of the General Fund adopted
revenue budget; and,
Should the Economic Uncertainties Reserve be used, and its level falls below
the minimum amount of two months of General Fund expenditures adopted
budget, the goal is to replenish the fund within three fiscal years.
General Fund 5,100$
Grants Special Revenue 3,024
Other Governmental Funds 32,979
Total Encumbrance All Funds 41,103$
40
408
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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.
41
409
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 Custodial and Trust Funds. The City's
fiduciary funds include Custodial and Trust Funds. Custodial Funds report fiduciary
activities that are not held in a trust or equivalent arrangement that meets specific
criteria. The Custodial funds present results of operations and include net position.
Custodial 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.
Pension Liability Debt Service – 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.
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.
42
410
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
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
Custodial Funds – are used to account for debt service activities related to the
Parking Structure – Bella Terra and Community Facilities District conduit debt
issues, in which the City acts as an agent, not as a principal. The Business
Improvement District fund is used to account for taxes received and held until
disbursement.
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.
43
411
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 53.
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.
44
412
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e. Capital Assets
Capital assets are tangible and intangible assets, which include property, plant,
equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar
items), 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. The reported value excludes normal maintenance and repairs, which are
amounts spent in relation to capital assets that do not increase the asset’s capacity
or efficiency or increase its estimated useful life. Donated capital assets are
recorded at acquisition value at the date of donation. Acquisition value is the price
that would be paid to acquire an asset with equivalent service potential on the date
of the donation. Intangible assets follow the same capitalization policies as tangible
capital assets and are reported with tangible assets in the appropriate capital asset
class.
In the government-wide and proprietary funds financial statements, tangible and
intangible property, plant, equipment, the right to use leased assets, and
infrastructure are depreciated/amortized using the straight-line method over the
estimated useful life of the assets as shown below and charged to the respective
activity or fund. Land and construction in progress are not depreciated. 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. Leases
The City is a lessee for a noncancellable lease of equipment and property. The City
recognizes a lease liability and an intangible right-to-use lease asset (lease asset)
in the government-wide financial statements. The City recognizes lease liabilities
with an initial, individual value of $50,000 or more.
At the commencement of a lease, the City initially measures the lease liability at the
present value of payments expected to be made during the lease term.
Subsequently, the lease liability is reduced by the principal portion of lease
payments made. The lease asset is initially measured as the initial amount of the
lease liability, adjusted for lease payments made at or before the lease
45
413
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
commencement date, plus certain initial direct costs. Subsequently, the lease asset
is amortized on a straight-line basis over its useful life.
Key estimates and judgments related to leases include how the City determines (1)
the discount rate it uses to discount the expected lease payments to present value,
(2) lease term, and (3) lease payments.
The City uses the interest rate charged by the lessor as the discount rate.
When the interest rate charged by the lessor is not provided, the City
generally uses its estimated incremental borrowing rate as the discount rate
for leases.
The lease term includes the noncancellable period of the lease. Lease
payments included in the measurement of the lease liability are composed
of fixed payments and purchase option price that the City is reasonably
certain to exercise.
The City monitors changes in circumstances that would require a remeasurement
of its lease and will remeasure the lease asset and liability if certain changes occur
that are expected to significantly affect the amount of the lease liability.
Lease assets are reported with other capital assets and lease liabilities are reported
with long-term debt on the statement of net position.
The City is a lessor for a noncancellable lease of a building, land, and infrastructure.
The City recognizes a lease receivable and a deferred inflow of resources in the
government-wide and governmental fund financial statements.
At the commencement of a lease, the City initially measures the lease receivable at
the present value of payments expected to be received during the lease term.
Subsequently, the lease receivable is reduced by the principal portion of lease
payments received. The deferred inflow of resources is initially measured as the
initial amount of the lease receivable, adjusted for lease payments received at or
before the lease commencement date. Subsequently, the deferred inflow of
resources is recognized as revenue over the life of the lease term.
Key estimates and judgments include how the City determines (1) the discount rate
it uses to discount the expected lease receipts to present value, (2) lease term, and
(3) lease receipts.
The City uses its estimated incremental borrowing rate as the discount rate
for leases.
46
414
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The lease term includes the noncancellable period of the lease. Lease
receipts included in the measurement of the lease receivable is composed
of fixed payments from the lessee.
The City monitors changes in circumstances that would require a remeasurement
of its lease, and will remeasure the lease receivable and deferred inflows of
resources if certain changes occur that are expected to significantly affect the
amount of the lease receivable.
g. 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.
h. 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 assets 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 assets that
applies to 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.
4. Lease related deferrals
47
415
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
i. 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.
j. 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.
k. 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.
l. 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.
48
416
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
m. 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
49
417
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
n. 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
o. 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.
p. Estimates
The accompanying financial statements require management to make estimates
and assumptions that affect certain reported amounts and disclosures. Actual
results could differ from those estimates.
50
418
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
q. 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, 2021 June 30, 2020 June 30, 2021
Measurement Date (MD) June 30, 2022 June 30, 2021 June 30, 2021
Measurement Period (MP) July 1, 2021 to
June 30, 2022
July 1, 2020 to
June 30, 2021
July 1, 2020 to
June 30, 2021
51
419
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
r. 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 inputs 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.
52
420
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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
Supranationals: IBRD, IFC, IDB 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 Up to $75,000,000 None
Joint Powers Authority N/A None / $20,000,000 None
53
421
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 Limi t
54
422
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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% 10%
Money Market 0% 0% 10%
Fixed Income 30% 40% 50%
Intermediate Bond 30% 40% 50%
Short‐Term Bond 0% 0% 10%
Long‐Term Bond 0% 0% 10%
High Yield Bond 0% 0% 10%
Inflation Protected Bond 0% 0% 10%
World Bond 0% 0% 10%
Domestic Equity 17% 27% 37%
Large Cap Equity (Value, Blend, Growth) 8% 18% 28%
Mid Cap Equity (Value, Blend, Growth) 0% 6% 16%
Small Cap Equity (Value, Blend, Growth) 0% 3% 13%
Foreign Equity 11% 21% 31%
Foreign Large Equity (Value, Blend, Growth) 7% 17% 27%
Foreign Sm / Mid Equity (Value, Growth) 0% 0% 10%
Emerging Markets 0% 4% 14%
Real Estate 0% 10% 20%
Real Estate 0% 10% 20%
Commodities 0% 2% 12%
Natural Resources 0% 2% 12%
55
423
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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).
INVESTMENTS: Fair Value
Less than
1 1 to 3 3 to 5
More than
5 Total
US Treasuries 74,943$ 2,975$ 47,848$ 24,120$ -$ 74,943$
US Agency Securities*140,790 35,962 51,389 53,439 - 140,790
Mutual Funds 58,101 58,101 - - - 58,101
Commercial Paper 4,967 4,967 - - - 4,967
Money Market Funds 2,007 2,007 - - - 2,007
Medium Term Notes - IADB 33,552 5,965 13,831 13,756 - 33,552
Corporate Bonds 26,063 7,992 18,071 - - 26,063
Local Agency Investment Fund 28,417 28,417 - - - 28,417
Orange County Investment Pool 10,447 10,447 - - - 10,447
California Asset Mgmt Program 2,776 2,776 - - - 2,776
PARS Pension Rate Stabilization Program 12,427 12,427 - - - 12,427
Total Investments 394,490$ 172,036$ 131,139$ 91,315$ -$ 394,490
Total Deposits 26,011
Total Deposits and Investments 420,501$
* Security is callable, but classified above according to original maturity date
Investment Maturities (In Years)
Primary Government:
Cash and Investments 334,584$
Cash and Investments with Fiscal Agent 9,838
Total Primary Government 344,422
Fiduciary Funds:
Cash and Investments 11,225
Cash and Investments with Fiscal Agent 64,854
Total Fiduciary Funds 76,079
Total Deposits and Investments 420,501$
56
424
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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):
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):
Remaining as of Year End
INVESTMENTS: Minimum
Legal Rating Total AAA AA A BBB+ Not Rated
US Treasuries N/A 74,943$ 74,943$ -$ -$ -$ -$
US Agency Securities*N/A 140,790 140,790 - - - -
Mutual Funds N/A 58,101 - - - - 58,101
Commercial Paper A 4,967 - - 4,967 - -
Money Market Funds AAA 2,007 2,007 - - - -
Medium Term Notes - IADB AA 33,552 33,552 - - - -
Corporate Bonds A 26,063 - 6,992 16,165 2,906 -
Local Agency Investment Fund N/A 28,417 - - - - 28,417
Orange County Investment Pool N/A 10,447 - - - - 10,447
California Asset Mgmt Program N/A 2,776 2,776 - - - -
PARS Pension Rate Stabilization Program N/A
12,427 - - - - 12,427
Total Investments 394,490$ 254,068$ 6,992$ 21,132$ 2,906$ 109,392$
Note: All US Agencies are rated AAA by Moody's and AA by S&P
Fair Value
Issuer Investment Type Amount
Federal Home Loan Bank U.S. Agency Securities 112,472$
Intl Bk Recon & Development Medium Term Notes 18,596$
US Treasury Notes Obligations of the United States Treasury 74,943$
57
425
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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, 2022, 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.
58
426
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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, 2022 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 Annual Comprehensive 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 $1.00.
The Pool invests in obligations of the United States Government and its agencies, high-
quality, short-term debt obligations of U.S. companies and financial institutions. The
Pool is a permitted investment for all local agencies under California Government Code
Section 53601(p). CAMP is rated AAAm by Standard & Poor's.
Investment in Public Agency Retirement Services Pension Rate Stabilization
Program
The City established a Section 115 pension trust account within the Public Agency
Retirement Services Pension Rate Stabilization Program (PARS PRSP) to hold assets
that are legally restricted for use in administering the City’s defined benefit pension
plan. The pension trust fund’s specific cash and investments are managed by a third-
party portfolio manager under guidelines approved by the City.
59
427
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
2. CASH AND INVESTMENTS (Continued)
Fair Value Measurement
The City categorizes its fair value investments within the fair value hierarchy
established by generally accepted accounting principles. The City has the following
recurring fair value measurements as of June 30, 2022 (in thousands):
3. OTHER RECEIVABLES
A summary of Other Receivables as of June 30, 2022 is as follows (in thousands):
INVESTMENTS: Level 1 Level 2 Level 3 Total
U.S. Treasuries -$ 74,943$ -$ $ 74,943
U.S. Agency Securities - 140,790 - 140,790
Commercial Paper - 4,967 - 4,967
Medium Term Notes - IADB - 33,552 - 33,552
Corporate Bonds - 26,063 - 26,063
Total Investments -$ 280,315$ -$ 280,315$
Fair Value Hierarchy
FY2021-22
Description Amount
Developer Loans Receivable 39,316$
Emerald Cove Loan Receivable 6,569
Housing Rehabilitation Loans Receivable 2,201
First Time Homebuyers Receivable 1,630
Emergency Medical Fee Receivable 2,214
CDBG Program Receivable 554
Affordable Housing In-Lieu Receivable 152
Other Grants Receivable 3,347
Other Receivable 10,493
Total Other Receivables 66,476
Allowance for Uncollectible Developer Loans (39,316)
Net Other Receivables on Governmental Fund Financial Statements 27,160$
Other Receivables Reconciliation
Net Receivable on Government-wide Financial Statements 43,348$
Taxes Receivable on Governmental Fund Financial Statements (16,086)
Other Receivables on Internal Service Fund (102)
Net Other Receivables on Governmental Fund Financial Statements 27,160$
60
428
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
3. OTHER RECEIVABLES (Continued)
a. Developer Loans
Loans made to developers to construct or rehabilitate certain facilities under
deferred loan agreements total $39,316,000 at year-end. These loans are allowed
until a future event occurs. Loans to the Low and Moderate Income Housing Asset
Fund total $20,207,000, loans made under the Home Program total $14,167,000
and loans made under the Affordable Housing In-Lieu Program total $4,942,000.
Interest rates on these loans range from 0% to 10%. The allowance for uncollectible
developer loans is $39,316,000 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, 2022 is $6,569,000.
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 $2,201,000 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 $1,630,000 at year-end. These loans are deferred
until a future event occurs.
61
429
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
4. UNEARNED REVENUE
Governmental and enterprise funds defer revenue recognition in connection with
resources that have been received as of year-end, but not yet earned (unearned
revenue). The amounts are as follows (in thousands):
5. UNAVAILABLE REVENUE
Certain revenues in governmental funds are considered unavailable revenue until
received. All revenues including property and sales tax are recognized in the year
earned or levied in the government-wide financial statements, but are recorded as
unavailable revenue in the fund financial statements to the extent they are not collected
within 60 days after year-end. The amounts are as follows (in thousands):
Deferred Loans to developers and qualified individuals for housing rehabilitation and to
first time homebuyers are discussed in Note 3.
General Fund
Grants Special
Revenue LMIHAF
Other
Governmental
Funds
Total
Unavailable
Revenue
Grants -$ 5,815$ -$ -$ 5,815$
Deferred Loans:
Emerald Cove - - 6,569 - 6,569
Housing Rehabilitation - 2,201 - - 2,201
First Time Homebuyers - - 1,630 - 1,630
Other Unavailable Revenue 1,431 - - 65 1,496
Total 1,431$ 8,016$ 8,199$ 65$ 17,711$
General Fund
Grants
Special
Revenue
Total
Unearned
Revenue
Community Services Unearned Revenue (Classes)1,217$ -$ 1,217$
Grants - 29,940 29,940
Total $ 1,217 $ 29,940 $ 31,157
62
430
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
6. RETIREMENT PLAN – NORMAL
a. Summary
Net Pension Liability/(Asset)
Net Pension Liability/(Asset) 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/(Asset)
CalPERS Miscellaneous Plan (51,599)$
CalPERS Safety Plan (57,268)
Supplemental Plan (Note 7)15,152
Total (93,715)$
Change to Net Deferred employer
Difference Between pension contributions
Projected and Actual made after
Investment Earnings measurement date Total
CalPERS Miscellaneous Plan -$ 6,951$ 6,951$
CalPERS Safety Plan - 13,578 13,578
Supplemental Plan (Note 7)5,633 - 5,633
Total 5,633$ 20,529$ 26,162$
Change to Net
Difference Between Differences between
Projected and Actual Expected and
Investment Earnings Actual Experience Total
CalPERS Miscellaneous Plan 52,113$ 1,534$ 53,647$
CalPERS Safety Plan 63,641 5,468 69,109
Total 115,754$ 7,002$ 122,756$
63
431
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
6. RETIREMENT PLAN – NORMAL (Continued)
Pension expenses for the measurement period ending June 30, 2021 (the
measurement date), are included in the accompanying financial statements as
follows:
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.
Net Pension
Expense/(Income)
CalPERS Miscellaneous Plan (7,825)$
CalPERS Safety Plan (2,508)
Supplemental Plan (Note 7)880
Total (9,453)$
64
432
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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.
65
433
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
6. RETIREMENT PLAN – NORMAL (Continued)
The Plans’ provisions and benefits in effect at June 30, 2022 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, 2021 - June 30, 2022 41.790%41.790%
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%11.75%/13.00% (Fire PEPRA)
Required employer contribution rates
July 1, 2021 - June 30, 2022 64.400%64.400%
Miscellaneous Agent Plans
Safety Agent Plans
66
434
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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, 2021, 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.
Fire PEPRA participants are now required to contribute 13%. In addition, the City is
required to make employer contributions at the actuarially determined rates of
41.790% and 64.400% for the miscellaneous and safety plans, respectively, for the
period July 1, 2021 through June 30, 2022.
At June 30, 2020, the valuation date, the following employees were covered by the
benefit terms for each Plan:
Miscellaneous Safety
Active members 600 380
Transferred members 446 72
Terminated members 350 57
Retired members and beneficiaries 1024 622
67
435
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
6. RETIREMENT PLAN – NORMAL (Continued)
d. Net Pension Asset
The City’s net pension asset is measured as the total pension liability, less the
pension plan’s fiduciary net position. The net pension asset of the Plan is measured
as of June 30, 2021, using an annual actuarial valuation as of June 30, 2020 rolled
forward to June 30, 2021 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 liability in the June 30, 2020 actuarial
valuation, rolled forward to June 30, 2021 using standard update procedures, were
determined using the following actuarial assumptions:
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
*The mortality table used was developed based on CalPERS' specific data. The probabilities of mortality are based on the 2017
CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of
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 projected mortality improvement using Review of Actuarial Assumptions report from December 2017 that can be found on
the CalPERS website.
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
68
436
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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
Asset Class1 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 ACFR, 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.
69
437
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
6. RETIREMENT PLAN – NORMAL (Continued)
Discount Rate – The discount rate used to measure the total pension liability at
June 30, 2021 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 – On July 12, 2021, CalPERS reported a preliminary 21.3%
net return on investments for Fiscal Year 2020/21. Based on the thresholds specified
in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a
reduction in investment volatility that corresponds to a reduction in the discount rate
used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in
the final stages of the four-year Asset Liability Management (ALM) cycle, the board
elected to defer any changes to the asset allocation until the ALM process
concluded, and the board could make its final decision on the asset allocation in
November 2021.
On November 17, 2021, the board adopted a new strategic asset allocation. The
new asset allocation along with the new capital market assumptions, economic
assumptions and administrative expense assumption support a discount rate of
6.90% (net of investment expense but without a reduction for administrative
expense) for financial reporting purposes. This includes a reduction in the price
inflation assumption from 2.50% to 2.30% as recommended in the November 2021
CalPERS Experience Study and Review of Actuarial Assumptions. This study also
recommended modifications to retirement rates, termination rates, mortality rates
and rates of salary increases that were adopted by the board. These new
assumptions will be reflected in the GASB 68 accounting valuation reports for the
June 30, 2022, measurement date.
70
438
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
6. RETIREMENT PLAN – NORMAL (Continued)
e. Changes in the Net Pension Liability/(Asset)
The following table shows the changes in net pension liability/(asset) recognized
over the measurement period:
Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability (Asset)
Balance at June 30, 2020 (Valuation Date) 604,027$ 443,586$ 160,441$
Changes in the year:
Service cost 8,005 - 8,005
Interest on the total pension liabilities 42,217 - 42,217
Differences between expected and actual experience (891) - (891)
Benefit payments, including refunds of members contributions (33,392) (33,392) -
Contributions - employer - 150,917 (150,917)
Contributions - employee - 3,450 (3,450)
Net investment income - 107,447 (107,447)
Administrative expenses - (443) 443
Net changes 15,939 227,979 (212,040)
Balance at June 30, 2021 (Measurement Date) 619,966$ 671,565$ (51,599)$
Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability (Asset)
Balance at June 30, 2020 (Valuation Date)804,181$ 532,653$ 271,528$
Changes in the year:
Service cost 13,386 - 13,386
Interest on the total pension liabilities 56,114 - 56,114
Differences between expected and actual experience (3,882) - (3,882)
Benefit payments, including refunds of members contributions (44,362) (44,362) -
Contributions - employer - 257,381 (257,381)
Contributions - employee - 4,395 (4,395)
Net investment income - 133,170 (133,170)
Administrative expenses - (532) 532
Net changes 21,256 350,052 (328,796)
Balance at June 30, 2021 (Measurement Date) 825,437$ 882,705$ (57,268)$
Miscellaneous Plan
Safety Plan
71
439
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
6. RETIREMENT PLAN – NORMAL (Continued)
Sensitivity of the Net Pension Liability/(Asset) 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 Income and Deferred Outflows/Inflows of Resources Related to
Pensions
As of the start of the measurement period (July 1, 2020), the net pension liability
was $160,441,000 for the Miscellaneous Plan and $271,528,000 for the Safety
Plan. For the measurement period ending June 30, 2021 (the measurement date),
the City earned pension income of $7,825,000 and $2,508,000 for the
Miscellaneous and Safety Plans, respectively.
The amortization period differs depending on the source of the gain or loss. The
difference between projected and actual earnings is amortized over 5-years straight
line. All other amounts are amortized straight-line over the average expected
remaining service lives of all members that are provided with benefits (active,
inactive and retired) as of the beginning of the measurement period.
Discount Rate - 1% Current Discount Discount Rate + 1%
(6.15%) Rate (7.15%) (8.15%)
Miscellaneous Plan 26,963$ (51,599)$ (116,560)$
Safety Plan 49,752 (57,268) (145,461)
Aggregate Total 76,715$ (108,867)$ (262,021)$
Plan's Aggregate Net Pension Liability/(Asset)
72
440
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 2020-21
measurement period, the EARSL for each plan is as follows:
At June 30, 2022 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 2.4 3.9
Miscellaneous Plan
Deferred outflows Deferred inflows
of Resources of Resources
Difference between projected and actual earning on
pension plan investments -$ (52,113)$
Difference between expected and actual experience - (1,534)
Contributions made subsequent to the
measurement date 6,951 -
Total 6,951$ (53,647)$
Safety Plan
Deferred outflows Deferred inflows
of Resources of Resources
Difference between projected and actual earning on
pension plan investments -$ (63,641)$
Difference between expected and actual experience - (5,468)
Contributions made subsequent to the
measurement date 13,578 -
Total 13,578$ (69,109)$
73
441
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
6. RETIREMENT PLAN – NORMAL (Continued)
For the Miscellaneous Plan and Safety Plan, $6,951,000 and $13,578,000,
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,
2023. 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 $24,918,000 to an irrevocable trust from the prefunded amounts. The
plan and trust are reported as a pension trust fund in the City’s financial statements
on a full accrual basis.
Measurement Periods
Ended June 30,Miscellaneous Safety
2022 (14,571)$ (18,533)$
2023 (12,266) (16,911)
2024 (12,508) (16,195)
2025 (14,302) (17,470)
(53,647)$ (69,109)$
Deferred Outflows/ (Inflows) of Resources
74
442
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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, 2021, the date
of the Plan’s most recent actuarial valuation, the average monthly benefit received
by inactive plan members and beneficiaries receiving benefits is $626. Effective in
1998 (exact dates are different for various associations), new City employees are
ineligible to participate in the Supplemental Employee Retirement Plan.
Employees Covered: At June 30, 2022, the measurement date, the following
employees were covered by the benefit terms for the Plan:
c. Employer Contributions
The City’s policy is to make required contributions as determined by the
Supplemental Plan’s actuary. The required contributions were determined as part
of the June 30, 2019 actuarial valuation. The City is required to contribute the
actuarially determined rate of 2.9% of total payroll for all permanent employees for
the year ended June 30, 2022. There are no employee contributions required for
the plan. Survivor and termination benefits are not included in the plan.
Administrative costs of this plan are financed through investment earnings.
For the year ended June 30, 2022, the contributions were (in thousands):
Inactive employees receiving benefits 742
Active employees 59
Total 801
Contributions - employer 6,006$
75
443
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 2022 with an effective
date of July 1, 2022. 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, 2022 is listed below:
Quoted market prices have been used to value investments as of June 30, 2022.
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, 2022:
Vanguard Ftse Developed Etf 11.96%
Vanguard Equity Income Fund Admiral Shares 7.97%
Parnassus Core Equity Fund 7.41%
Fidelity US Bond Index 7.16%
Baird Aggregate Bond Fd Instl 7.16%
Doubleline Total Ret Bd I 7.14%
Pgim Return Bond CI R6 7.13%
Tiaa Cref 7.09%
Harbor Capital Appreciation Inst 6.76%
Ishares Core US Reit Etf 5.90%
Federated Inst High Yield Bond Fund 5.04%
Concentration of Investments Equaling or Exceeding 5%
Asset Class Strategic Allocation
Allocation as of
June 30,2022
Long-Term
Expected Rate of
Return
Fixed Income 40.00%40.72%1.55%
Equities 27.00%51.86%5.35%
Real Estate 10.00%5.90%0.00%
Commodities 2.00%0.00%0.00%
Cash and Equivalents 0.00%1.52%0.45%
Total 79.00%100.00%
76
444
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 Fiscal Year ended June 30, 2022, the annual money-weighted rate of return
on the Plan’s investments, net of pension plan investment expenses, was -15.97%.
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, 2022, using an annual actuarial valuation as of June 30,
2021 rolled forward to June 30, 2022 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.
77
445
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
7. RETIREMENT PLAN – SUPPLEMENTAL (Continued)
Actuarial Assumptions – The total pension liabilities in the June 30, 2021 actuarial
valuations for the June 30, 2022 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, 2021 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 5.50%, based on the inflation assumption of 2.50% 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 5.50%
Inflation 2.50%
Salary Increases CalPERS 1997-2015 Experience Study plus 2.75% aggregate increase
Investment Rate of Return 5.50% 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-2021
78
446
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 5.50
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.
79
447
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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, 2021 76,769$ 70,361$ 6,408$
Changes in the year:
Service cost 299 - 299
Interest on the total pension liabilities 3,897 - 3,897
Differences between expected and actual experience 492 - 492
Changes of Assumptions (1,638) - (1,638)
Benefit payments, including refunds of members contributions (5,668) (5,668) -
Contributions - employer - 6,006 (6,006)
Net investment income - (11,362) 11,362
Administrative expenses - (338) 338
Net changes (2,618) (11,362) 8,744
Balance at June 30, 2022 74,151$ 58,999$ 15,152$
Supplemental Plan
Discount Rate -
1% (4.50%)
Current
Discount Rate
(5.50%)
Discount Rate +
1% (6.50%)
22,488$ 15,152$ 8,904$
Plan's Aggregate Net Pension Liability/(Asset)
(in thousands)
80
448
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
7. RETIREMENT PLAN – SUPPLEMENTAL (Continued)
f. Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions
For the year ended June 30, 2022, the City recognized pension expense in the
amount of $880,000 for the Supplemental Plan.
At June 30, 2022, the City reported deferred outflows of resources related to the
supplemental pension plan from the following source (in thousands):
For the Supplemental Plan, $5,633,000 was reported as deferred outflows of
resources related to pensions which will be recognized in pension expense as
follows (in thousands):
Deferred Outflows / (Inflows)
Year Ended June 30,of Resources
2023 1,103$
2024 914
2025 604
2026 3,012
5,633$
Deferred Outflows
of Resources
Difference between projected and actual earnings on
pension plan investments 5,633$
81
449
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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.
82
450
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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, 2021 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 $955,000 for year ended June 30, 2022. 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 ($139 in 2020, $143
in 2021 and $149 in 2022). 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 $81.95 per employee for the Huntington Beach Firefighter’s
Association (HBFA) and $134.10 for all other Safety groups in 2022. 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 308 212
Inactive employees not yet receiving benefits 315 -
Active Plan Members 810 391
Total Plan Participants 1,433 603
83
451
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
8. OTHER POST EMPLOYMENT BENEFITS (Continued)
The City’s net OPEB liability was measured as of June 30, 2021 and the total OPEB
liability used to calculate the net OPEB liability was determined by an actuarial
valuation dated June 30, 2021, based on the following actuarial methods and
assumptions:
Actuarial Cost Method – Entry Age Normal
Discount rate – 5.50%
Projected salary increases for covered employees due to inflation – aggregate
increases of 2.75% per annum
Investment Rate of Return – 5.50%, 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
PEMHCA minimum increases for actives - $149 in 2022, with 4.00% 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 forth 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-21.
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 Annual Rate Calendar Annual Rate
Year Non-Medicare Medicare Year Non-Medicare Medicare
2022 7.00%6.10%2030 4.95% 4.45%
2023 6.50%5.65% 2031-35 4.80% 4.35%
2024 6.25%5.45% 2036-45 4.65% 4.25%
2025 6.00%5.25% 2046-55 4.50% 4.20%
2026 5.75%5.05% 2056-65 4.35% 4.15%
2027 5.55%4.90% 2066-75 4.05% 3.95%
2028 5.35%4.75%2076+ 3.75% 3.75%
2029 5.15%4.60%
84
452
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 5.50 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%4.56%
Fixed Income 43%0.78%
Treasury Inflation-Protected Securities ("TIPS") 5%-0.08%
Commodities 4%1.22%
Real Estate Investment Trusts ("REITS")8%4.06%
Total 100%
* Long-term expected rate of return is 5.50%
CERBT Strategy 2
85
453
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
8. OTHER POST EMPLOYMENT BENEFITS (Continued)
The changes in the net OPEB Liability/(Asset) for the plan are as follows (in thousands):
Sensitivity of the Net OPEB Liability/(Asset) 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, 2021 (in thousands):
Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB Liability
/ (Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2021 33,859$ 30,639$ 3,220$
(Measurement Date June 30, 2020)
Changes recognized for the measurement period:
Service Cost 1,120 - 1,120
Interest 2,119 - 2,119
Actual vs. Expected Experience (6,296) - (6,296)
Assumption Changes 1,603 - 1,603
Contributions - Employer - 1,882 (1,882)
Net Investment Income - 6,025 (6,025)
Benefit Payments (2,129) (2,129) -
Administrative Expenses - (131) 131
Net Changes (3,583) 5,647 (9,230)
Balance at June 30, 2022 30,276$ 36,286$ (6,010)$
(Measurement Date June 30, 2021)
Increase / (Decrease)
1% Decrease Current Discount Rate 1% Increase
(4.50%)(5.50%)(6.50%)
Net OPEB Liability (2,124)$ (6,010)$ (9,197)$
86
454
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
8. OTHER POST EMPLOYMENT BENEFITS (Continued)
Sensitivity of the Net OPEB Liability/(Asset) 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, 2021 (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
(6.25% Non-Medicare /
5.30% Medicare,
decreasing to 3.0%
Non-Medicare /
3.0% Medicare)
(7.25% Non-Medicare /
6.30% Medicare,
decreasing to 4.0%
Non-Medicare /
4.0% Medicare)
(8.25% Non-Medicare /
7.30% Medicare,
decreasing to 5.0%
Non-Medicare /
5.0% Medicare)
Net OPEB Liability (9,234)$ (6,010)$ (1,909)$
5 Years
Net difference between projected and actual
earnings on OPEB plan investments
87
455
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
8. OTHER POST EMPLOYMENT BENEFITS (Continued)
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
As of June 30, 2022, the City recognized OPEB income of $173,000. As of June 30,
2022, the City reported deferred outflows of resources related to OPEB from the
following sources:
The $2,499,000 reported as deferred outflows of resources related to contributions
subsequent to the June 30, 2021 measurement date will be recognized as a reduction
of the net OPEB liability during the Fiscal Year ending June 30, 2023. Other amounts
reported as deferred outflows of resources related to OPEB will be recognized as
expense as follows (in thousands):
Measurement Periods
Ended June 30,
2023 (1,725)$
2024 (1,766)
2025 (1,680)
2026 (1,729)
2027 (718)
Thereafter (1,112)
(8,730)$
Deferred
Outflows/ (Inflows)
of Resources
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB Contributions subsequent to the measurement date 2,499$ -$
Difference between expected and actual experience 832 5,489
Changes in Assumptions 1,397 2,198
Net difference between projected and actual earnings on
OPEB Plan Investments - 3,272
4,728$ 10,959$
88
456
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 three years that exceeded the coverage limit.
Although, there is a claim that exceeds the self-insured retention of $1,000,000 and is
not covered under the City’s liability insurance plan. Refer to note 18b. for further
details.
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.
89
457
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 $26.7 million deficit at
year-end at the 55 percent confidence level. The City has established plans to help
reduce the deficit in this fund. This will be accomplished by additional transfers from
the General Fund, Proprietary funds, and other governmental funds in which
employees are charged over the next nine years.
Claims activity and liabilities relating to the current and prior year are (in thousands):
Workers'
Compensation General Liability Total
Balance June 30, 2020 29,606$ 7,549$ 37,155$
Additions 12,200 11,058 23,258
Reductions (7,012) (6,622) (13,634)
Net Increase (Decrease)5,188 4,436 9,624
Balance June 30, 2021 34,794 11,985 46,779
Additions 16,278 7,993 24,271
Reductions (8,309) (6,310) (14,619)
Net Increase (Decrease)7,969 1,683 9,652
Balance June 30, 2022 42,763$ 13,668$ 56,431$
90
458
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
10. INTERFUND TRANSACTIONS
a. Advances to/from Other Funds
The amounts at year-end were (in thousands):
There is a $1,363,000 advance from the LMIHAF Capital Projects Fund to the
Redevelopment Agency Private Purpose Trust Fund as of June 30, 2022 for Main
Pier property acquisitions prior to the dissolution of the Redevelopment Agency on
February 1, 2012. No set interest rates or fixed repayment terms have been
established.
Redevelopment
Agency Private
Purpose Trust
Advances from (Receivable):
Major Governmental Funds
LMIHAF Capital Projects 1,363$
Advances to
(Payable):
91
459
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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:
$16,787,000 was transferred from the General Fund to Other Governmental
Funds for debt service payments of $2,737,000 and infrastructure related
projects including road repairs and enhancement, equipment and other capital
improvement projects totaling $14,050,000.
$51,000 was transferred from the General Fund to the Refuse Enterprise Fund
to fund the senior citizen rate reduction on refuse charges.
$1,011,000 was transferred from the General Fund to the Grants Special
Revenue Fund to cover payments not reimbursed by the grant program.
$1,005,000 was provided to fund COVID-related expenditures. The remaining
$6,000 was provided to cover HOME program expenditures.
$224,000 was transferred from the LMIHAF Fund to Other Governmental Funds
for debt service payments.
$900,000 was transferred from HOME Fund to LMIHAF Fund to restructure a
developer loan originally issued from the LMIHAF fund.
$13,000 was transferred from the Hazmat Service Enterprise Fund to the
General Fund to cover administrative and overhead expenditures.
$2,207,000 was transferred from Grant Special Revenue Funds to Other
Governmental Funds to reimburse the funds for grant eligible expenditures paid
out of Other Governmental Funds. $1,930,000 of the transfer is related to use
of HOME funds to pay back a developer loan originally issued Affordable
Housing Funds.
Transfers In
General
Fund
Grants
Special
Revenue
LMIHAF
Capital
Projects
Other
Governmental
Funds
Total
Governmental
Funds
Hazmat
Service
Fund
Total
Transfers In
General Fund -$ 3$ -$ 400$ 403$ 13$ 416$
Grants Special Revenue 1,011 - - 93 1,104 - 1,104
LMIHAF - 900 - - 900 - 900
Other Governmental Funds 16,787 2,207 224 4 19,222 - 19,222
Total Governmental Funds 17,798 3,110 224 497 21,629 13 21,642
Water Fund - 1 - - 1 - 1
Refuse Fund 51 - - - 51 - 51
Total Enterprise Funds 51 1 - - 52 - 52
Total Transfers Out 17,849$ 3,111$ 224$ 497$ 21,681$ 13$ 21,694$
Transfers Out
92
460
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
11. LONG-TERM OBLIGATIONS
Below is a schedule of changes in long-term governmental obligations for the year (in
thousands):
Governmental Activities:
June 30,
2021 Additions Retirements
June 30,
2022
Accrued
Interest
Due Within
One Year
Public Financing Authority:
2014(a) Lease Revenue Bonds 11,880$ -$ (665)$ 11,215$ 132$ 685$
2020(a) Lease Revenue Bonds 4,835 - - 4,835 36 -
2020(b) Lease Revenue Bonds 12,830 - (1,515) 11,315 23 1,520
Total Public Financing Authority 29,545 - (2,180) 27,365 191 2,205
Other Long-Term Obligations:
Compensated Absences 13,405 5,243 (3,603) 15,045 - 4,432
Claims Payable 46,779 24,271 (14,619) 56,431 - 13,439
Pollution Remediation 2,000 - - 2,000 - -
LED Lighting Phase I 432 - (118) 314 2 122
I-Bank CLEEN Loan 1,882 - (296) 1,586 15 303
CEC Loan 2,457 - (394) 2,063 - 266
Pension Obligation Bonds 341,501 - (10,859) 330,642 349 12,637
Finance Purchase Agreement 12,753 868 (1,907) 11,714 30 2,068
Leases Payable - 448 (201) 247 - 139
Total Other Long-Term Obligations 421,209 30,830 (31,997) 420,042 396 33,406
Total Long-Term Obligations -
Governmental Activities 450,754$ 30,830$ (34,177)$ 447,407$ 587$ 35,611$
93
461
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
11. LONG-TERM OBLIGATIONS (Continued)
a. Public Financing Authority
(1) 2014(a) Public Financing Authority Lease Revenue Bonds
Year of Issuance 2014
Type of Debt Lease Revenue Bonds
Original Principal Amount $15,295,000
Security Lease with City
Interest Rates 3.0% to 5.0%
Interest Payment Dates March 1st, September 1st
Principal Payment Dates September 1st
Purpose of Debt Finance the construction of a new Senior
Center
Debt service requirements to maturity are (in thousands):
Year Ending
June 30 Principal Interest Total
2023 685$ 384$ 1,069$
2024 720 352 1,072
2025 750 319 1,069
2026 785 289 1,074
2027 810 265 1,075
2028-2032 4,440 931 5,371
2033-2035 3,025 181 3,206
Total 11,215$ 2,721$ 13,936$
94
462
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
11. LONG-TERM OBLIGATIONS (Continued)
(2) 2020(a) Public Financing Authority Lease Revenue Bonds
Year of Issuance 2020
Type of Debt Lease Revenue Bonds
Original Principal Amount $4,835,000
Security Lease with City
Interest Rates 4.0% to 5.0%
Interest Payment Dates May 1st, November 1st
Principal Payment Dates May 1st
Purpose of Debt Defease 2010(a) Lease revenue Bonds
which Defeased 1997 Leasehold
Revenue Bonds (Construct Pier Plaza
and Purchase 800 MHZ system), 2000
Lease Revenue Bonds (Capital
Improvements and defeasance of
Emerald Cove Certificate of Participation)
Debt service requirements to maturity are (in thousands):
Year Ending
June 30 Principal Interest Total
2023 -$ 223$ 223$
2024 - 224 224
2025 - 224 224
2026 - 224 224
2027 - 224 224
2028-2032 4,835 902 5,737
Total 4,835$ 2,021$ 6,856$
95
463
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
11. LONG-TERM OBLIGATIONS (Continued)
(3) 2020(b) Public Financing Authority Lease Revenue Bonds
Year of Issuance 2020
Type of Debt Lease Revenue Bonds
Original Principal Amount $14,440,000
Security Lease with City
Interest Rates 0.329% to 1.831%
Interest Payment Dates May 1st, November 1st
Principal Payment Dates May 1st
Purpose of Debt Defease 2011(a) Lease revenue Bonds
which Defeased 2001(a) Leasehold
Revenue Bonds (Construct Sports
Complex and South Beach Phase II
Improvements) and 2001(b) Lease
Revenue Bonds (Defeased Civic
Improvement Corporation Certificates)
Debt service requirements to maturity are (in thousands):
Year Ending
June 30 Principal Interest Total
2023 1,520$ 138$ 1,658$
2024 1,530 129 1,659
2025 1,545 117 1,662
2026 1,560 103 1,663
2027 1,575 83 1,658
2028-2030 3,585 103 3,688
Total 11,315$ 673$ 11,988$
96
464
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
11. LONG-TERM OBLIGATIONS (Continued)
b. Other Long-Term Obligations
(1) Compensated Absences
There is no repayment schedule to pay the compensated absences amount
of $15,045,000 relating to governmental operations. The General Fund
typically liquidates the vacation and sick leave liability.
(2) Claims Payable
There is no repayment schedule for the claims payable for governmental
activities of $56,431,000 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.
(4) LED Lighting Phase I
Year of Issuance 2014
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 Rate 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
97
465
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
11. LONG-TERM OBLIGATIONS (Continued)
Debt service requirements to maturity are (in thousands):
(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 $3,000,000
Security Edwards Fire Station
Interest Rate 2.32%
Interest Payment Dates February 1st and August 1st
Principal Payment Dates August 1st
Purpose of Debt To purchase and upgrade street
pole lighting to energy efficient
LED light sources
Debt service requirements to maturity are (in thousands):
Year Ending
June 30 Principal Interest Total
2023 303$ 33$ 336$
2024 310 26 336
2025 317 19 336
2026 324 11 335
2027 332 4 336
Total 1,586$ 93$ 1,679$
Year Ending
June 30 Principal Interest Total
2023 123$ 10$ 133$
2024 126 5 131
2025 65 1 66
Total 314$ 16$ 330$
98
466
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 $3,000,000
Security Loan Agreement with CEC
Interest Rate 1.00%
Interest Payment Dates June 22nd and December 22nd
Principal Payment Dates June 22nd and December 22nd
Purpose of Debt To upgrade street pole lighting to
energy efficient LED light sources
Debt service requirements to maturity are (in thousands):
Year Ending
June 30 Principal Interest Total
2023 266$ 20$ 286$
2024 269 17 286
2025 272 13 285
2026 274 12 286
2027 277 9 286
2028-2030 705 11 716
Total 2,063$ 82$ 2,145$
99
467
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
11. LONG-TERM OBLIGATIONS (Continued)
(7) Pension Obligation Bonds
Year of Issuance 2021
Type of Debt Pension Obligation Bonds
Principal Amount Original $341,501,000
Interest Rates 0.221% to 3.376%
Interest Payment Dates June 15th and December 15th
Principal Payment Dates June 15th
Purpose of Debt Pay 85% of CalPERS UAL as of
the June 30, 2019 valuation report.
Debt service requirements to maturity are (in thousands):
Year Ending
June 30 Principal Interest Total
2023 12,637$ 8,511$ 21,148$
2024 12,683 8,463 21,146
2025 12,768 8,385 21,153
2026 12,898 8,248 21,146
2027 13,076 8,074 21,150
2028-2032 69,360 36,379 105,739
2033-2037 78,712 27,020 105,732
2038-2042 91,848 13,896 105,744
2043-2044 26,660 1,357 28,017
Total 330,642$ 120,333$ 450,975$
100
468
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
11. LONG-TERM OBLIGATIONS (Continued)
(8) Finance Purchase Agreement
Year of Issuance 2021
Type of Debt Capital Purchase Agreement
Principal Amount Various
Security Master Lease Agreement
Interest Rates 1.249% and 1.775%
Interest Payment Dates Semi-Annually
Principal Payment Dates Semi-Annually
Purpose of Debt Public Safety Equipment Financing
Debt service requirements to maturity are (in thousands):
(9) Lease Payable
On July 1, 2021, the City of Huntington Beach entered into a 16 month lease
as a lessee for the use of Ricoh copiers. An initial lease liability was recorded
in the amount of $81,195. As of June 30, 2022, the value of the lease liability
is $20,325. The City of Huntington Beach is required to make monthly fixed
payments of $5,084. The lease has an interest rate of 0.308%. The estimated
useful life was 16 months as of the contract commencement. The value of
the right to use asset as of June 30, 2022, was $81,195 with accumulated
amortization of $60,896.
On July 1, 2021, the City of Huntington Beach entered into a 19 month lease
as a Lessee for the use of Ricoh copiers. An initial lease liability was recorded
in the amount of $93,080. As of June 30, 2022, the value of the lease liability
is $34,359. The City of Huntington Beach is required to make monthly fixed
payments of $4,916. The lease has an interest rate of 0.435%. The estimated
useful life was 19 months as of the contract commencement. The value of
the right to use asset as of June 30, 2022, was $93,080 with accumulated
amortization of $57,774.
Year Ending
June 30 Principal Interest Total
2023 2,068$ 195$ 2,263$
2024 2,100 163 2,263
2025 1,441 131 1,572
2026 1,199 108 1,307
2027 1,220 87 1,307
2028-2031 3,686 165 3,851
*Total 11,714$ 849$ 12,563$
101
469
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
11. LONG-TERM OBLIGATIONS (Continued)
On July 1, 2021, the City of Huntington Beach entered into a 39 month lease
as a lessee for the use of land with Tank Farms, LLC as the lessor. An initial
lease liability was recorded in the amount of $273,597. As of June 30, 2022,
the value of the lease liability is $191,965. The City of Huntington Beach is
required to make monthly fixed payments of $6,918. The lease has an
interest rate of 0.648%. The Land estimated useful life was 39 months as of
the contract commencement. The value of the right to use asset as of June
30, 2022, was $273,597 with accumulated amortization of $84,184.
The future principal and interest lease payment as of June 30, 2022, were
as follows:
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
$1,686,000 relating to business-type activities. The balance for the
outstanding business-type compensated absences is predominately related
to the Water and Sewer funds.
June 30,
2021 Additions Retirements
June 30,
2022
Accrued
Interest
Due Within
One Year
Compensated Absences 1,426$ 649$ (389)$ 1,686$ -$ 460$
Pension Obligation Bonds 22,144 - (776) 21,368 22 888
Total Long-Term Obligations -
Business-Type Activities 23,570$ 649$ (1,165)$ 23,054$ 22$ 1,348$
Long-Term Obligations - Business-Type
Activities:
Year Ending
June 30 Principal Interest Total
2023 139$ 1$ 140$
2024 86 - 86
2025 22 - 22
Total 247$ 1$ 248$
102
470
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
11. LONG-TERM OBLIGATIONS (Continued)
(2) Pension Obligation Bond
Year of Issuance 2021
Type of Debt Pension Obligation Bonds
Principal Amount Original $22,144,000
Interest Rates 0.221% to 3.376%
Interest Payment Dates June 15th and December 15th
Principal Payment Dates June 15th
Purpose of Debt Pay 85% of CalPERS UAL as of
the June 30, 2019 valuation report.
Debt service requirements to maturity are (in thousands):
d. Long-Term Conduit Debt Obligations
Below is a schedule of the conduit debt obligations for which the City is not liable in
any manner (in thousands):
June 30,
2021 Additions Retirements
June 30,
2022
Community Facilities District No. 2000-1
2013 Special Tax Refunding Bonds 9,050$ -$ (645)$ 8,405$
Community Facilities District No. 2002-1
Special Assessment Tax Bonds 3,785 - (180) 3,605
Community Facilities District No. 2003-1
2013 Special Tax Refunding Bonds 15,560 - (890) 14,670
Total Community Facilities Districts 28,395 - (1,715) 26,680
Total Obligations Not Recorded in
Financial Statements 28,395$ -$ (1,715)$ 26,680$
Community Facilities Districts:
Year Ending
June 30 Principal Interest Total
2023 888$ 535$ 1,423$
2024 892 531 1,423
2025 897 527 1,424
2026 907 518 1,425
2027 919 504 1,423
2028-2032 4,875 2,241 7,116
2033-2037 5,533 1,583 7,116
2038-2042 6,457 660 7,117
Total 21,368$ 7,099$ 28,467$
103
471
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
12. CAPITAL ASSETS
a. Changes in Capital Assets
Capital asset activity for the year was (in thousands):
Governmental Activities
June 30,
2021 Additions Dispositions
June 30,
2022
Capital Assets, Not Depreciated:
Land 368,795$ 841$ (98)$ 369,538$
Construction in Progress 8,584 7,444 (3,793) 12,235
Total Capital Assets -Not Depreciated 377,379 8,285 (3,891) 381,773
Capital Assets Being Depreciated
Buildings 215,506 6,253 - 221,759
Machinery and Equipment 76,536 4,373 (5,811) 75,098
Infrastructure 451,001 11,494 (505) 461,990
Right to Use Leased Asset - 448 - 448
Total Capital Assets Being Depreciated 743,043 22,568 (6,316) 759,295
Less Accumulated Depreciation:
Buildings (89,384) (5,065) - (94,449)
Machinery and Equipment (56,953) (3,898) 5,263 (55,588)
Infrastructure (236,829) (8,141) 505 (244,465)
Right to Use Leased Asset - (195) - (195)
Total Accumulated Depreciation (383,166) (17,299) 5,768 (394,697)
Total Depreciated - Net 359,877 5,269 (548) 364,598
Total Capital Assets 1,120,422 30,853 (10,207) 1,141,068
Total Accumulated Depreciation (383,166) (17,299) 5,768 (394,697)
Capital Assets of Governmental Activities - Net 737,256$ 13,554$ (4,439)$ 746,371$
104
472
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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):
Depreciation in business-type activities was charged to the following
functions/programs in the Statement of Activities (in thousands):
Business-Type Activities:
June 30,
2021 Additions Dispositions
June 30,
2022
Capital Assets, Not Depreciated:
Land 3,907$ -$ -$ 3,907$
Construction in Progress 1,782 109 (1,782) 109
Total Capital Assets -Not Depreciated 5,689 109 (1,782) 4,016
Capital Assets Being Depreciated
Buildings 100,082 5,541 - 105,623
Machinery and Equipment 21,596 1,331 (539) 22,388
Infrastructure 149,304 2,749 (385) 151,668
Total Capital Assets Being Depreciated 270,982 9,621 (924) 279,679
Less Accumulated Depreciation:
Buildings (34,235) (2,695) - (36,930)
Machinery and Equipment (14,810) (1,254) 539 (15,525)
Infrastructure (85,157) (2,470) 385 (87,242)
Total Accumulated Depreciation (134,202) (6,419) 924 (139,697)
Total Depreciated - Net 136,780 3,202 - 139,982
Total Capital Assets 276,671 9,730 (2,706) 283,695
Total Accumulated Depreciation (134,202) (6,419) 924 (139,697)
Capital Assets of Business Activities - Net 142,469$ 3,311$ (1,782)$ 143,998$
Department:
City Manager 23$
Finance 30
Community Development 123
Fire 268
Information Services 25
Police 120
Community Services 2,605
Library Services 335
Public Works 12,758
Internal Service Fund depreciation charged to functions 1,012
Total 17,299$
Fund:
Water 4,053$
Sewer Service 2,345
Refuse 21
Total 6,419$
105
473
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 percent of CNOA net assets as Joint
Venture Investments.
14. LEASES
For the year ended June 30, 2022, the financial statements include the adoption of
GASB Statement No. 87, Leases. The primary objective of this statement is to
enhance the relevance and consistency of information about governments' leasing
activities. This statement establishes a single model for lease accounting based on
the principle that leases are financings of the right to use an underlying asset. Under
this Statement, a lessee is required to recognize a lease liability and an intangible
right-to-use lease asset, and a lessor is required to recognize a lease receivable and
a deferred inflow of resources. For additional information, refer to the disclosures
below.
On July 1, 2021, the City of Huntington Beach entered into a 67 month lease as a
lessor for the use of a building with Shor (Hyatt) as the lessee. An initial lease
receivable was recorded in the amount of $75,163. As of June 30, 2022, the value of
the lease receivable is $62,670. The lessee is required to make monthly fixed
payments of $1,104 in addition to variable payments based on percentage of
revenue. The percentage of revenue fluctuates based on the months of the year. The
rates are 5% during November-February, 10% during March, April, and October and
12% during May-September. The lease has an interest rate of 1.138%. The value of
the deferred inflow of resources as of June 30, 2022, was $61,735, and the City of
Huntington Beach recognized lease revenue of $12,651 and interest revenue of $778
during the fiscal year. No percentage rent was received in Fiscal Year 2021/22. The
lessee has two extension options, each for 60 months.
On July 1, 2021, the City of Huntington Beach entered into a 187 month lease as a
lessor for the use of land with Huntington Harbour Yacht Club as the lessee. An initial
lease receivable was recorded in the amount of $537,872. As of June 30, 2022, the
value of the lease receivable is $511,095. The lessee is required to make monthly
fixed payments of $3,067 or 10% of gross receipts from facility rental and boat
docking rental and 6% of gross receipts from food, beverage and carting sales,
whichever is greater. The lease has an interest rate of 1.942%. The value of the
deferred inflow of resources as of June 30, 2022, was $503,491, and Huntington
Beach recognized lease revenue of $24,222 and interest revenue of $10,159 during
the fiscal year. The City did not receive revenue related to percentage of gross
receipts in the current fiscal year.
106
474
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
14. LEASES (Continued)
On July 1, 2021, the City of Huntington Beach entered into a 74 month lease as a
Lessor for the use of a building located along the beach with Kokomo's Surfside Grill
as the lessee. An initial lease receivable was recorded in the amount of $74,526. As
of June 30, 2022, the value of the lease receivable is $63,381. The lessee is required
to make monthly fixed payments of $1,648. The lease has an interest rate of 1.138%.
The value of the deferred inflow of resources as of June 30, 2022, was $62,462, and
Huntington Beach recognized lease revenue of $11,288 during the fiscal year and
interest revenue of $776. The lessee has one extension option for 60 months.
On July 1, 2021, the City of Huntington Beach entered into a 96 month lease as a
lessor for the use of a building located in Huntington Central Park with Kathy May's
Lakeview Café as the lessee. An initial lease receivable was recorded in the amount
of $170,485. As of June 30, 2022, the value of the lease receivable is $150,177. The
lessee is required to make monthly fixed payments of $1,875. The lease has an
interest rate of 1.372%. The value of the deferred inflow of resources as of June 30,
2022, was $149,277, and Huntington Beach recognized lease revenue of $19,015
and interest revenue of $2,192 during the fiscal year.
On July 1, 2021, the City of Huntington Beach entered into a 72 month lease as a
lessor for the use of a building with Meadowlark Golf Course as the lessee. An initial
lease receivable was recorded in the amount of $3,160,906. As of June 30, 2022, the
value of the lease receivable is $2,682,427. The lessee is required to make monthly
fixed payments of $44,314 and percentage of gross sales of green fees, cart rentals,
driving range, food and beverages. The lease has an interest rate of 0.308%. The
value of the deferred inflow of resources as of June 30, 2022, was $2,635,305, and
Huntington Beach recognized lease revenue of $516,626 and interest revenue of
$8,975 during the fiscal year. The City received variable payments of $649,993 in the
current fiscal year.
On July 1, 2021, the City of Huntington Beach entered into an 88 month lease as a
lessor for the use of infrastructure located at Warner Fire Station with Verizon as the
lessee. An initial lease receivable was recorded in the amount of $180,802. As of
June 30, 2022, the value of the lease receivable is $156,761. The lessee is required
to make monthly fixed payments of $2,064. The lease has an interest rate of 0.435%.
The value of the deferred inflow of resources as of June 30, 2022, was $156,250, and
Huntington Beach recognized lease revenue of $23,825 and interest revenue of $728
during the fiscal year. The lessee has five extension options, each for 60 months.
On July 1, 2021, the City of Huntington Beach entered into a 25 month lease as a
lessor for the use of infrastructure with Zenith Energy West Coast Terminals LLC as
the lessee. An initial lease receivable was recorded in the amount of $81,023. As of
June 30, 2022, the value of the lease receivable is $54,133. The lessee is required
to make annual fixed payments of $27,135. The lease has an interest rate of 0.435%.
107
475
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
14. LEASES (Continued)
The value of the deferred inflow of resources as of June 30, 2022, was $42,132, and
Huntington Beach recognized lease revenue of $38,647 and interest revenue of $244
during the fiscal year.
On July 1, 2021, the City of Huntington Beach entered into a 78 month lease as a
lessor for the use of a building located at Edwards Fire Station with T-Mobile as the
lessee. An initial lease receivable was recorded in the amount of $268,831. As of
June 30, 2022, the value of the lease receivable is $232,723. The lessee is required
to make monthly fixed payments of $3,039. The lease has an interest rate of 0.435%.
The value of the deferred inflow of resources as of June 30, 2022, was $227,683, and
Huntington Beach recognized lease revenue of $40,065 and interest revenue of
$1,082 during the fiscal year. The lessee has one extension option for 60 months.
On July 1, 2021, the City of Huntington Beach entered into a 58 month lease as lessor
for the use of land located at Central Library with T-Mobile as the lessee. An initial
lease receivable was recorded in the amount of $127,289. As of June 30, 2022, the
value of the lease receivable is $101,001. The lessee is required to make monthly
fixed payments of $2,246. The lease has an interest rate of 0.980%. The value of the
deferred inflow of resources as of June 30, 2022, was $100,954, and Huntington
Beach recognized lease revenue of $25,229 and interest revenue of $1,107 during
the fiscal year.
On July 1, 2021, the City of Huntington Beach entered into a 63 month lease as lessor
for the use of infrastructure at the Civic Center Rooftop with T-Mobile as the lessee.
An initial lease receivable was recorded in the amount of $259,600. As of June 30,
2022, the value of the lease receivable is $214,417. The lessee is required to make
monthly fixed payments of $3,849. The lease has an interest rate of 0.237%.The
value of the deferred inflow of resources as of June 30, 2022, was $210,152, and
Huntington Beach recognized lease revenue of $48,891 and interest revenue of $556
during the fiscal year.
On July 1, 2021, the City of Huntington Beach entered into a 287 month lease as
lessor for the use of land located at Murdy Park with T-Mobile as the lessee. An initial
lease receivable was recorded in the amount of $1,090,068. As of June 30, 2022, the
value of the lease receivable is $1,052,770. The lessee is required to make monthly
fixed payments of $4,180. The lease has an interest rate of 0.814%. The value of the
deferred inflow of resources as of June 30, 2022, was $1,044,585, and Huntington
Beach recognized lease revenue of $36,801 and interest revenue of $8,682 during
the fiscal year. The lessee has four extension options, each for 60 months.
108
476
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
14. LEASES (Continued)
On July 1, 2021, the City of Huntington Beach entered into an 85 month lease as
lessor for the use of land located at Edwards Fire Station with Verizon as the lessee.
An initial lease receivable was recorded in the amount of $395,925. As of June 30,
2022, the value of the lease receivable is $347,702. The lessee is required to make
monthly fixed payments of $4,003. The lease has an interest rate of 0.435%. The
value of the deferred inflow of resources as of June 30, 2022, was $340,421, and
Huntington Beach recognized lease revenue of $53,898 and interest revenue of
$1,606 during the fiscal year. The lessee has three extension options, each for 60
months.
On July 1, 2021, the City of Huntington Beach entered into a 322 month lease as
lessor for the use of land located at Warner Fire Station with American Tower as the
lessee. An initial lease receivable was recorded in the amount of $823,137. As of
June 30, 2022, the value of the lease receivable is $794,239. The lessee is required
to make monthly fixed payments of $2,700. The lease has an interest rate of 0.435%.
The value of the deferred inflow of resources as of June 30, 2022, was $792,534, and
Huntington Beach recognized lease revenue of $27,101 and interest revenue of
$3,501 during the fiscal year. The lessee has five extension options, each for 60
months.
On July 1, 2021, the City of Huntington Beach entered into a 78 month lease as lessor
for the use of land located at Greer Park with T-Mobile as the lessee. An initial lease
receivable was recorded in the amount of $353,458. As of June 30, 2022, the value
of the lease receivable is $304,639. The lessee is required to make monthly fixed
payments of $4,214. The lease has an interest rate of 0.435%. The value of the
deferred inflow of resources as of June 30, 2022, was $299,079, and Huntington
Beach recognized lease revenue of $52,957 and interest revenue of $1,421 during
the fiscal year. The lessee has one extension option for 60 months.
On July 1, 2021, the City of Huntington Beach entered into a 58 month lease as lessor
for the use of infrastructure located at Bushard Fire Station with T-Mobile a the lessee.
An initial lease receivable was recorded in the amount of $159,632. As of June 30,
2022, the value of the lease receivable is $127,252. The lessee is required to make
monthly fixed payments of $2,817. The lease has an interest rate of 0.980%. The
value of the deferred inflow of resources as of June 30, 2022, was $126,604, and
Huntington Beach recognized lease revenue of $31,639 and interest revenue $1,388
during the fiscal year.
109
477
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
14. LEASES (Continued)
On July 1, 2021, the City of Huntington Beach entered into an 87 month lease as
lessor for the use of infrastructure located at Main Street Parking with Verizon as the
lessee. An initial lease receivable was recorded in the amount of $172,296. As of
June 30, 2022, the value of the lease receivable is $149,748. The lessee is required
to make monthly fixed payments of $2,051. The lease has an interest rate of 1.296%.
The value of the deferred inflow of resources as of June 30, 2022, was $148,649, and
Huntington Beach recognized lease revenue of $21,580 and interest revenue of
$2,067 during the fiscal year. The lessee has five extension options, each for 60
months.
On July 1, 2021, the City of Huntington Beach entered into a 360 month lease as
lessor for the use of infrastructure located at Edwards Fire Station with AT&T as the
lessee. An initial lease receivable was recorded in the amount of $1,296,802. As of
June 30, 2022, the value of the lease receivable is $1,296,092. The lessee is required
to make monthly fixed payments of $3,500. The lease has an interest rate of 2.678%.
The value of the deferred inflow of resources as of June 30, 2022, was $1,293,200,
and Huntington Beach recognized lease revenue of $812 and interest revenue of
$2,790 during the fiscal year. The lessee has four extension options, each for 60
months.
On July 1, 2021, the City of Huntington Beach entered into a 61 month lease as a
lessor for the use of a building with Oceanside Properties LLC as a lessee. An initial
lease receivable was recorded in the amount of $223,865. As of June 30, 2022, the
value of the lease receivable is $178,557. The lessee is required to make annual fixed
payments of $48,073. The lease has an interest rate of 1.525%. The value of the
deferred inflow of resources as of June 30, 2022, was $179,826, and Huntington
Beach recognized lease revenue of $41,274 and interest revenue of $2,765 during
the fiscal year.
On July 1, 2021, the City of Huntington Beach entered into a 102 month lease as a
lessor for the use of a building with Chevron USA INC. An initial lease receivable was
recorded in the amount of $312,544. As of June 30, 2022, the value of the lease
receivable is $278,413. The lessee is required to make annual fixed payments of
$35,333. The lease has an interest rate of 0.435%. The value of the deferred inflow
of resources as of June 30, 2022, was $275,774, and Huntington Beach recognized
lease revenue of $35,567 and interest revenue of $1,203 during the fiscal year.
110
478
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
14. LEASES (Continued)
On July 1, 2021, the City of Huntington Beach entered into a 31 month lease as a
lessor for the use of infrastructure with Cardinal Pipeline L.P. as the lessee. An initial
lease receivable was recorded in the amount of $336,607. As of June 30, 2022, the
value of the lease receivable is $225,131. The lessee is required to make annual fixed
payments of $113,294. The lease has an interest rate of 0.648%. The value of the
deferred inflow of resources as of June 30, 2022, was $208,174, and Huntington
Beach recognized lease revenue of $126,686 and interest revenue of $1,818 during
the fiscal year.
On July 1, 2021, the City of Huntington Beach entered into 293 month lease as a
lessor for the use of land with Hyatt as the lessee. An initial lease receivable was
recorded in the amount of $327,310. As of June 30, 2022, the value of the lease
receivable is $314,147. The lessee is required to make annual fixed payments of
$14,146. The lease has an interest rate of 0.308%. The value of the deferred inflow
of resources as of June 30, 2022, was $313,937, and Huntington Beach recognized
lease revenue of $12,390 and interest revenue of $983 during the fiscal year.
On July 1, 2021, the City of Huntington Beach entered into an 86 month lease as a
lessor for the use of infrastructure located at Booster Pump Station with DCOR LLC
as the lessee. An initial lease receivable was recorded in the amount of $63,583. As
of June 30, 2022, the value of the lease receivable is $55,498. The lessee is required
to make annual fixed payments of $8,823. The lease has an interest rate of 1.296%.
The value of the deferred inflow of resources as of June 30, 2022, was $54,766, and
Huntington Beach recognized lease revenue of $8,079 and interest revenue of $738
during the fiscal year. The lessee has one extension option for 60 months.
On July 1, 2021, the City of Huntington Beach entered into a 79 month lease as a
lessor for the use of infrastructure with DCOR LLC as the lessee. An initial lease
receivable was recorded in the amount of $238,884. As of June 30, 2022, the value
of the lease receivable is $205,199. The lessee is required to make annual fixed
payments of $34,647. The lease has an interest rate of 0.435%. The value of the
deferred inflow of resources as of June 30, 2022, was $202,871, and Huntington
Beach recognized lease revenue of $35,050 and interest revenue of $962 during the
fiscal year.
On July 1, 2021, the City of Huntington Beach entered into a 72 month lease as a
lessor for the use of a building with HB Employee Credit Union as the lessee. An
initial lease receivable was recorded in the amount of $215,913. As of June 30, 2022,
the value of the lease receivable is $184,573. The lessee is required to make monthly
fixed payments of $3,020. The lease has an interest rate of 0.237%. The value of the
deferred inflow of resources as of June 30, 2022, was $179,927, and Huntington
Beach recognized lease revenue of $35,521 and interest revenue of $465 during the
fiscal year. The lessee has one extension option for 60 months.
111
479
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
14. LEASES (Continued)
On July 1, 2021, the City of Huntington Beach entered into an 88 month lease as a
lessor for the use of a building with Duke's Surf City Restaurant as the lessee. An
initial lease receivable was recorded in the amount of $1,764,623. As of June 30,
2022, the value of the lease receivable is $1,544,901. The lessee is required to make
monthly fixed payments of $37,265 and variable payments based on a percentage of
gross sales. The percentage rent is on a tiered system. The first 4% is collected on
the first $8 million. Then 5% on all gross sales above $8 million. The lease has an
interest rate of 0.237%. The value of the deferred inflow of resources as of June 30,
2022, was $1,525,262, and Huntington Beach recognized lease revenue of $235,493
and interest revenue of $3,868 during the fiscal year. The lessee has two extension
options, each for 240 months. The City received variable payments of $236,572 in
the current fiscal year.
On July 1, 2021, the City of Huntington Beach entered into a 131 month lease as a
lessor for the use of a building located on Huntington Beach Pier with Ruby’s
Huntington Beach Restaurant, Ltd as the lessee. An initial lease receivable was
recorded in the amount of $1,392,508. As of June 30, 2022, the value of the lease
receivable is $1,282,852. The lessee is required to make monthly fixed payments of
$10,984.47. The lease has an interest rate of 1.594%. The value of the deferred inflow
of resources as of June 30, 2022, was $1,264,950, and the City of Huntington Beach
recognized lease revenue of $106,400 and interest revenue of $21,160 during the
fiscal year.
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 was
previously reported as a Redevelopment Agency within 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.
112
480
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
15. SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued)
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.
b. 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,
2021 Additions Retirements
June 30,
2022
Accrued
Interest
Due Within
One Year
Bonds Payable
1999 Tax Allocation Refunding Bonds 1,570$ -$ (380)$ 1,190$ 25$ 405$
2002 Tax Allocation Bonds 3,415 - (840) 2,575 54 875
Total Bonds Payable 4,985 - (1,220) 3,765 79 1,280
Other Long-Term Obligations
Mayer DDA 1,254 - (628) 626 10 626
Bella Terra OPA (Parking)4,985 - (1,504) 3,481 6 1,504
Bella Terra AHA (Phase II)12,867 - (749) 12,118 12 749
CIM DDA (Parking & Infrastructure)5,279 - (308) 4,971 260 330
CIM DDA (Additional Parking) 351 - (14) 337 25 16
Total Other Long-Term Obligations 24,736 - (3,203) 21,533 313 3,225
Total Long-Term Obligations 29,721$ -$ (4,423)$ 25,298$ 392$ 4,505$
113
481
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 $10,835,000
Security Tax Increment
Interest Rates 3.00% to 5.05%
Interest Payment Dates February 1st and August 1st
Principal Payment Dates August 1st
Purpose of Debt Prepay Agency’s 1992 Loans to
Public Financing Authority
Debt service requirements to maturity are (in thousands):
Year Ending
June 30 Principal Interest Total
2023 405$ 49$ 454$
2024 425 29 454
2025 360 9 369
Total 1,190$ 87$ 1,277$
114
482
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 $4,041,000, principal and interest,
for the outstanding 1999 and 2002 Tax Allocation Refunding Bonds as of
June 30, 2022 from semi-annual Redevelopment Property Tax Trust Fund
(RPTTF) revenue allocations.
The 1999 and 2002 Tax Allocation Refunding Bonds are not a debt of the
City of Huntington Beach, the State of California, nor any of its political
subdivisions, and neither the City, the State nor any of its political subdivision
is liable therefore, not in any event shall the bonds be payable out of funds
or properties other than those of the Redevelopment Agency as set forth in
the bond indenture.
Year Ending
June 30 Principal Interest Total
2023 875$ 107$ 982$
2024 920 62 982
2025 780 20 800
Total 2,575$ 189$ 2,764$
115
483
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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
$626,000. 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 $3,481,000. 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
$12,118,000. 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.
116
484
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 7.00%
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 $4,971,000. 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.
117
485
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
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 10.00%
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 $337,000. 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.
c. 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.
118
486
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
16. COMMITMENTS AND CONTINGENCIES (Continued)
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 2024, 2033, and 2038. Sales tax rebates totaled
$1,414,320 for the year ended June 30, 2022. 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, and McKenna
Subaru Huntington Beach through 2033 with a 45%/55% McKenna/City split with
base sales of $150,800.
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 2016/17. The State Department of Finance (DOF)
has denied the validity of the loans and the City has filed suit against the State. On
April 22, 2022, the Superior Court of California issued a Proposed Judgment stating
that the agreement did not constitute an enforceable obligation and that repayment
was not required. The City has requested a hearing with the Court to appeal this
determination.
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.
119
487
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
16. COMMITMENTS AND CONTINGENCIES (Continued)
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 reauthorized the loans
between the City and former Redevelopment Agency in FY 2016/17. The State
Department of Finance has denied the validity of the loans and the City has filed
suit against the State. On April 22, 2022, the Superior Court of California issued a
Proposed Judgment stating that the majority of the agreements between the City
and the former Redevelopment Agency were not considered enforceable
obligations and that repayment was not required, with the exception of the
$22,400,000 loan for the purchase of the Waterfront property. The DOF denied this
obligation in a follow up letter to the City dated August 24, 2022. The City has
requested a hearing with the Court to appeal this determination.
Below is a schedule of the activity for the year (in thousands):
June 30,
2021 Additions Reductions
June 30,
2022
General Fund
Direct Advances 2,312$ -$ -$ 2,312$
Indirect Advances 6,567 - - 6,567
Land Sales 32,833 - - 32,833
Interest 30,884 279 - 31,163
Total General Fund 72,596 279 - 72,875
Sewer Fund
Direct Advances 300 1 - 301
Deferred Development Fees 187 1 - 188
Total Sewer Fund 487 2 - 489
Drainage Fund
Direct Advances 724 3 - 727
Deferred Development Fees 200 1 - 201
Total Drainage Fund 924 4 - 928
Park Acquisition and Development Fund
Direct Advances 5,960 23 - 5,983
Deferred Development Fees 442 2 - 444
Total Park Acquisition and Development Fund 6,402 25 - 6,427
Water Fund
Direct Advances 4,486 17 - 4,503
Total Water Fund 4,486 17 - 4,503
Total All Funds 84,895$ 327$ -$ 85,222$
120
488
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
16. COMMITMENTS AND CONTINGENCIES (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 was 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). On April 22, 2022, the Superior Court of
California issued a Proposed Judgment stating that this loan is considered an
enforceable obligation to be paid on the FY 2023-24 Recognized Obligation
Payment Schedule (ROPS). Below is a schedule of the activity for the year (in
thousands):
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 $6,500,000. This would not be a City General Fund obligation.
June 30,
2021 Additions Reductions
June 30,
2022
General Fund
Emerald Cove 3,245$ -$ -$ 3,245$
121
489
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
16. COMMITMENTS AND CONTINGENCIES (Continued)
On April 22, 2022, the Superior Court of California issued a Proposed Judgment
stating that the majority of the agreements between the City and the former
Redevelopment Agency were not considered enforceable obligations and that
repayment was not required, with the exception of the $22,400,000 loan for the
purchase of the Waterfront property and the Promissory Note related to the Emerald
Cove Housing Project. The DOF denied this obligation in a follow up letter to the
City dated August 24, 2022. The City has requested a hearing with the Court to
appeal this determination.
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.
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.
g. Orange County Oil Spill Response
On October 2, 2021, the United State Coast Guard notified the City of a possible oil
spill in the area of Huntington Beach, which was classified as a major spill later in
the day. The oil spill was originally estimated to be 5.8 nautical miles long, running
from the Huntington Beach Pier down to Newport Beach. Given the oil spill impacts,
a decision was made by the City and State to close the ocean from the Pier to the
Santa Ana River jetty. Additionally, a decision was made by City leadership to
cancel the third day of the Pacific Airshow on October 3rd. The oil spill was declared
a State emergency by the Governor on October 4th, with a local emergency
declaration following the same day. The oil spill has significantly affected the City,
with substantial ecological impacts occurring at the beach and at the Huntington
Beach Wetlands. In response, Huntington Beach Fire and Marine Safety personnel
were deployed to implement oil containment efforts.
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490
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
16. COMMITMENTS AND CONTINGENCIES (Continued)
The U.S. Coast Guard, acting as the lead agency, formed an Incident Management
Team (comprised of federal, state and regional agencies) to respond to the oil spill
incident and coordinate clean-up efforts. A Unified Command Team that includes
the U.S. Coast Guard, California Department of Fish and Wildlife, and Amplify
Energy Corporation was established to investigate the oil spill incident.
The City has submitted a claim for $653,259 with Amplify for lost revenues and
expenditures incurred for response efforts. The claim is still under review with
Amplify at this time.
h. Kennedy Commission v. Huntington Beach
The Kennedy Commission case arises from an amendment to City’s Beach and
Edinger Corridors Specific Element Plan to limit the development of multifamily
housing. The case, filed by the Kennedy Commission in July 2015 stating that the
amendment was in violation of California’s Housing Element laws, was tried in
Superior Court and ruled in favor of the Plaintiff.
The City appealed the trial court decision and prevailed upon appeal. The Kennedy
Commission then appealed the decision with the Supreme Court, which upheld the
Court of Appeal’s decision in favor of the City. In February 2020, the City adopted
a revised Housing Element to comply with clarifying language in Senate Bill 1333
regarding the applicability of key provisions of state planning and zooming laws to
charter cities which was certified by the California Department of Housing and
Community Development as compliant with Housing Element Law. In response, the
Kennedy Commission requested its remaining claims against the City be dismissed
and filed a motion for attorney’s fees. In July 2021, the Superior Court awarded the
Kennedy Commission $3.5 million in attorney’s fees, which is currently under
appeal.
17. OTHER INFORMATION
Fund and Accumulated Deficits
The following funds have total fund deficits at year-end (in thousands):
Governmental Fund:
Grant Special Revenue 4,311$
Internal Service Fund:
Self Insurance Workers' Comp 26,708$
Self Insurance General Liability 3,807$
123
491
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022
17. OTHER INFORMATION (Continued)
The Grant Special Revenue fund has a deficit due to expenditures incurred in
response to the COVID-19 pandemic that are currently under review for
reimbursement by the Federal Emergency Management Agency (FEMA). The Self
Insurance Workers’ Compensation fund has a deficit due to increases in statutory
benefits related to workers’ compensation claims and rising healthcare costs. The
Self Insurance General Liability fund has a deficit due to increases in claims
judgements, cost of litigation and rising number of lawsuits against the City. As
such, the City has set aside $3,650,000 in litigation reserve for general liability
claims in the General Fund.
The City has established plans to reduce and eliminate the deficits in these funds.
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 deficits in the
Self Insurance Workers’ Compensation and General Liability Internal Service
Funds.
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125
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REQUIRED SUPPLEMENTARY INFORMATION
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127
495
City of Huntington Beach
Notes to Required Supplementary Information
For the Year Ended June 30, 2022
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 Grants 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
Grants Special Revenue Fund’s Revenues, and Expenditures and Changes in Fund Balance (in
thousands).
128
496
REVENUES Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Property Taxes 93,213$ 94,627$ 94,627$ -$
Sales Taxes 44,641 53,362 53,362 -
Utility Taxes 16,884 19,528 19,528 -
Other Taxes 17,813 26,133 26,136 3
Licenses and Permits 7,779 8,668 8,666 (2)
Fines, Forfeitures and Penalties 3,794 5,144 5,144 -
Use of Money and Property 16,282 12,357 12,215 (142)
Intergovernmental 2,427 5,103 5,130 27
Charges for Current Service 24,502 29,533 29,364 (169)
Other 908 2,837 2,882 45
Total Revenues 228,243 257,292 257,054 (238)
EXPENDITURES
Current:
City Council 392 451 426 25
City Manager 3,673 5,423 4,616 807
City Treasurer 260 326 326 -
City Attorney 2,500 3,114 2,995 119
City Clerk 817 1,549 1,295 254
Finance 5,798 7,714 6,869 845
Community Development 9,075 12,702 10,716 1,986
Fire 47,192 60,643 60,643 -
Information Services 6,970 8,881 7,389 1,492
Police 75,659 91,970 91,970 -
Community Services 8,942 12,114 11,133 981
Library Services 4,864 6,731 6,014 717
Public Works 20,348 24,948 24,285 663
Debt Service:
Principal 1,750 2,946 2,917 29
Interest 158 324 260 64
Total Expenditures 188,398 239,836 231,854 7,982
Excess of Revenues Over Expenditures 39,845 17,456 25,200 7,744
OTHER FINANCING SOURCES (USES)
Transfers In 2,264 447 416 (31)
Leases (as Lessee) - - 448 448
Transfers Out (40,142) (17,878) (17,849) 29
Total Other Financing Sources (Uses) (37,878) (17,431) (16,985) 446
Net Change In Fund Balance 1,967 25 8,215 8,190
Fund Balance - Beginning of Year 94,609 94,609 94,609 -
Fund Balance - End of Year 96,576$ 94,634$ 102,824$ 8,190$
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
General Fund
See Accompanying Notes to Required Supplementary Information
129
497
REVENUES Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property -$ -$ 96$ 96$
Intergovernmental 4,540 11,848 5,682 (6,166)
Total Revenues 4,540 11,848 5,778 (6,070)
EXPENDITURES
Current:
City Manager 6 32 13 19
City Clerk - 10 - 10
Finance - 370 359 11
Community Development 3,358 7,237 2,716 4,521
Fire - 2,353 2,164 189
Information Systems - 11 7 4
Police 742 3,242 1,856 1,386
Community Services 427 758 714 44
Library Services 69 294 202 92
Public Works 374 4,853 2,405 2,448
Total Expenditures 4,976 19,160 10,436 8,724
Excess of Revenues Over (Under)
Expenditures (436) (7,312) (4,658) 2,654
OTHER FINANCING USES
Transfers In - 1,966 1,104 (862)
Transfers Out (54) (4,391) (3,111) 1,280
Total Other Financing Sources (Uses) (54) (2,425) (2,007) 418
Net Change In Fund Balance (490) (9,737) (6,665) 3,072
Fund Balance - Beginning of Year 2,354 2,354 2,354 -
Fund Balance - End of Year 1,864$ (7,383)$ (4,311)$ 3,072$
(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, 2022
See Accompanying Notes to Required Supplementary Information
130
498
Measurement Period 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14
Total Pension Liability
Service cost 8,005$ 7,779$ 8,327$ 8,314$ 8,084$ 7,436$ 7,102$ 7,263$
Interest on total pension liability 42,217 41,058 40,150 38,769 37,749 37,194 35,653 34,412
Differences between expected and actual experience (891) (6,087) (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 (33,392) (30,321) (28,508) (26,685) (25,312) (24,316) (23,377) (22,444)
Net change in total pension liability 15,939 12,429 19,786 14,722 42,135 21,386 7,913 19,231
Total pension liability - beginning 604,027 591,598 571,812 557,090 514,955 493,569 485,656 466,425
Total pension liability - ending (a)619,966$ 604,027$ 591,598$ 571,812$ 557,090$ 514,955$ 493,569$ 485,656$
Plan Fiduciary Net Position
Contributions - employer 150,917$ 16,879$ 14,816$ 13,495$ 12,316$ 10,982$ 9,747$ 9,066$
Contributions - employee 3,450 3,630 3,779 3,649 3,869 3,736 3,790 3,909
Investment income 107,447 21,485 27,288 32,963 40,328 1,856 8,230 56,429
Administrative Expense (443) (609) (296) (614) (536) (226) (418) (472)
Benefit payments (33,392) (30,321) (28,508) (26,685) (25,312) (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 227,979 11,064 17,067 21,643 30,665 (7,968) (2,026) 46,488
Plan fiduciary net position - beginning 443,586 432,522 415,455 393,812 363,147 371,115 373,141 326,653
Plan fiduciary net position - ending (b)671,565$ 443,586$ 432,522$ 415,455$ 393,812$ 363,147$ 371,115$ 373,141$
Net pension liability - beginning 160,441 159,076 156,357 163,278 151,808 122,454 112,515 139,771
Net pension liability (asset) - ending (a)-(b)(51,599)$ 160,441$ 159,076$ 156,357$ 163,278$ 151,808$ 122,454$ 112,515$
Plan fiduciary net position as a percentage of the
total pension liability (asset)108.32% 73.44% 73.11% 72.66% 70.69% 70.52% 75.19% 76.83%
Covered payroll 45,740$ 45,952$ 45,419$ 45,431$ 44,848$ 44,365$ 44,233$ 41,142$
Net pension liability as a percentage of covered
payroll N/A 349.15% 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 eight years are shown.
* For covered employee payroll, the measurement period of July 1, 2020 to June 30, 2021 was used.
Benefit changes: the figures above include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date.
However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the
liability impact is deemed to be material by the plan actuary.
Changes in assumptions: None in 2019 or 2021. 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 2015, 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.
City of Huntington Beach
Required Supplementary Information
Schedule of Changes in the Net Pension Liability and Related Ratios During the Measurement Period
(in Thousands)
Last Ten Fiscal Years*
CalPERS City Miscellaneous Plan - 99
131
499
(in Thousands)
Measurement Period 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14
Total Pension Liability
Service cost 13,386$ 13,226$ 13,644$ 13,509$ 13,657$ 12,159$ 11,119$ 11,096$
Interest on total pension liability 56,114 54,597 53,048 51,223 49,350 48,390 46,160 44,246
Differences between expected and actual experience (3,882) (4,721) (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 (44,362) (41,247) (38,958) (37,128) (34,222) (32,116) (30,535) (29,540)
Net change in total pension liability 21,256 21,855 26,514 26,531 58,318 31,111 14,870 25,802
Total pension liability - beginning 804,181 782,326 755,812 729,281 670,963 639,852 624,982 599,180
Total pension liability - ending (a)825,437$ 804,181$ 782,326$ 755,812$ 729,281$ 670,963$ 639,852$ 624,982$
Plan Fiduciary Net Position
Contributions - employer 257,381$ 25,848$ 23,063$ 21,058$ 20,629$ 18,703$ 17,791$ 15,152$
Contributions - employee 4,395 4,355 4,337 4,164 4,570 4,058 4,110 3,850
Investment income 133,170 25,784 32,776 39,336 48,413 2,144 9,661 66,805
Administrative Expense (532) (731) (355) (736) (640) (270) (497) (555)
Benefit payments (44,362) (41,247) (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 350,052 14,009 20,877 25,293 38,750 (7,510) 530 55,712
Plan fiduciary net position - beginning 532,653 518,644 497,767 472,474 433,724 441,234 440,704 384,992
Plan fiduciary net position - ending (b)882,705$ 532,653$ 518,644$ 497,767$ 472,474$ 433,724$ 441,234$ 440,704$
Net pension liability - beginning 271,528 263,682 258,045 256,807 237,239 198,618 184,278 214,188
Net pension liability (asset) - ending (a)-(b)(57,268)$ 271,528$ 263,682$ 258,045$ 256,807$ 237,239$ 198,618$ 184,278$
Plan fiduciary net position as a percentage of the
total pension liability (asset)106.94% 66.24% 66.30% 65.86% 64.79% 64.64% 68.96% 70.51%
Covered payroll 45,665$ 43,783$ 43,684$ 43,371$ 43,283$ 42,619$ 42,252$ 38,397$
Net pension liability as a percentage of covered
payroll N/A 620.17% 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 eight years are shown.
* For covered employee payroll, the measurement period of July 1, 2020 to June 30, 2021 was used.
Changes in assumptions: None in 2019 or 2021. 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 2015, 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 include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. However,
offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless
the liability impact is deemed to be material by the plan actuary.
City of Huntington Beach
Required Supplementary Information (Unaudited)
Schedule of Changes in the Net Pension Liability and Related Ratios During the Measurement Period
Last Ten Fiscal Years*
CalPERS City Safety Plan - 100
132
500
Total Pension Liability 2021-22 2020-21 2019-20 2018-19 2017-18** 2016-17 2015-16 2014-15 2013-14
Service cost 299$ 350$ 338$ 398$ 344$ 487$ 552$ 495$ 544$
Interest on total pension liability 3,897 4,292 3,954 3,990 2,964 3,976 3,945 3,919 3,828
Differences between expected and actual experience 492 - 4,594 - (794) - 982 - -
Changes in assumptions (1,638) 6,547 1,756 - 2,115 1,515 2,928 - -
Benefit payments, including refunds of employee contributions (5,668) (5,494) (5,012) (4,771) (3,388) (4,144) (3,773) (3,588) (3,548)
Net change in total pension liability (2,618) 5,695 5,630 (383) 1,241 1,834 4,634 826 824
Total pension liability - beginning 76,769 71,074 65,444 65,827 64,586 62,752 58,118 57,292 56,468
Total pension liability - ending (a)74,151$ 76,769$ 71,074$ 65,444$ 65,827$ 64,586$ 62,752$ 58,118$ 57,292$
Plan Fiduciary Net Position
Contributions - employer 6,006$ 1,435$ 3,506$ 4,962$ 3,507$ 5,346$ 7,277$ 4,678$ 4,539$
Investment income (11,362) 15,717 2,114 2,582 2,128 6,373 4,282 (1,313) 3,465
Administrative Expense (338) (314) (444) (191) (145) (182) (189) (170) (176)
Benefit payments (5,668) (5,494) (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 (11,362) 11,344 164 2,582 (1,686) 7,393 7,597 2,790 4,538
Plan fiduciary net position - beginning 70,361 59,017 58,853 56,271 57,957 50,564 42,967 40,177 35,639
Plan fiduciary net position - ending (b)58,999$ 70,361$ 59,017$ 58,853$ 56,271$ 57,957$ 50,564$ 42,967$ 40,177$
Net pension liability - beginning 6,408 12,057 6,591 9,556 6,629 12,188 15,151 17,115 20,829
Net pension liability - ending (a)-(b)15,152$ 6,408$ 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 79.57% 91.65% 83.04% 89.93% 85.48% 89.74% 80.58% 73.93% 70.13%
Covered payroll 6,670$ 7,684$ 8,469$ 12,863$ 10,890$ 17,167$ 19,517$ 22,069$ 22,004$
Net pension liability as a percentage of covered payroll 227.17%83.39% 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 nine 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.
City of Huntington Beach
Required Supplementary Information
Schedule of Changes in the Net Pension Liability and Related Ratios During the Measurement Period
(in Thousands)
Last Ten Fiscal Years*
Supplemental Retirement Plan
133
501
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 2021 2020 2019 2018 2017
Total OPEB Liability
Service cost 1,120$ 1,096$ 1,241$ 1,205$ 877$
Interest on the total OPEB liability 2,119 2,064 1,859 1,787 1,293
Actual and expected experience difference (6,296) - 1,411 - -
Changes in assumptions 1,603 (298) (3,358) - -
Benefit payments (2,129) (1,848) (1,742) (1,683) (1,036)
Net change in total OPEB liability (3,583) 1,014 (589) 1,309 1,134
Total OPEB liability - beginning 33,859 32,845 33,434 32,125 30,991
Total OPEB liability - ending (a)30,276$ 33,859$ 32,845$ 33,434$ 32,125$
Plan Fiduciary Net Position
Contribution - employer** 1,882$ 1,959$ 2,270$ 4,191$ 1,036$
Net investment income 6,025 1,580 1,901 1,126 471
Benefit payments (2,129) (1,848) (1,742) (1,683) (1,036)
Administrative expense (131) (245) (61) (131) (9)
Net change in plan fiduciary net position 5,647 1,446 2,368 3,503 462
Plan fiduciary net position - beginning 30,639 29,193 26,825 23,322 22,860
Plan fiduciary net position - ending (b)36,286$ 30,639$ 29,193$ 26,825$ 23,322$
Net OPEB liability (asset) - ending (a)-(b) (6,010)$ 3,220$ 3,652$ 6,609$ 8,803$
Plan fiduciary net position as a percentage of the total OPEB liability (asset) 119.85%90.49% 88.88% 80.23% 72.60%
Covered employee payroll 70,881$ 76,521$ 79,682$ 81,458$ 60,985$
Net OPEB liability as a percentage of covered employee payroll N/A 4.21%4.58%8.11%14.43%
Notes to Schedule:
* Fiscal year 2017/18 was the first year of implementation, therefore only five years of information are shown.
**Contributions to the OPEB plan are not based on employee pay.
Last Ten Fiscal Years*
Other Post Employment Benefits Plan
134
502
2021-22 1 2020-21 1 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 6,951$ 18,086$ 16,878$ 14,819$ 9,734$ 11,921$ 11,238$ 10,510$ 8,685$
Contributions in relation to the actuarially
determined contributions (6,951) (18,086) (16,878) (14,819) (9,734) (11,921) (11,238) (10,510) (8,685)
Contribution deficiency (excess)-$ -$ -$ -$ -$ -$ -$ -$ -$
Covered payroll 46,824$ 45,740$ 45,952$ 45,419$ 33,210$ 45,118$ 44,253$ 46,337$ 43,327$
Contributions as a percentage of covered payroll 14.84% 39.54% 36.73% 32.63% 29.31% 26.42% 25.39% 22.68% 20.05%
Notes to Schedule
Valuation date: 6/30/2012 through 06/30/2019
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period
Asset valuation method
Inflation
Salary increases Varies by entry age and service
Payroll growth
Discount Rate
Retirement age
Mortality
2.75% for 10/1/2013-6/30/2019, 2.50% for 7/1/2019-6/30/2020, and 2.80% for 7/1/2020-6/30/2021.
Note: The CalPERS Board of Administration has adopted a new amortization policy effective with the June 30, 2019 actuarial valuation. The new policy shortens the period over
which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed using a level dollar amount. In addition, the new policy removes the 5-year
ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy removes the 5-year ramp-down on investment
gains/losses. These changes will apply only to new UAL bases established on or after June 30, 2019.
2.75% for 10/1/2013-6/30/2020, and 2.80% for 7/1/2020-6/30/2021.
The prescribed discount rate assumption, adopted by the board on November 17, 2021, is 6.80 percent compounded annually (net
of investment and administrative expenses) as of June 30, 2021.
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 7/1/19-6/30/20, the probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period
from 1997 to 2015.
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. For 7/1/19-6/30/21, the
probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and
Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 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 7/1/15-6/30/21, Fair
Value (for details, see the Funding Valuation Reports for the years ended June 30, 2013-2021).
City of Huntington Beach
Required Supplementary Information
Schedule of Contributions
For the Year Ended June 30, 2022
(in Thousands)
Last Ten Fiscal Years*
CalPERS City Miscellaneous Plan - 99
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.
For details, see Miscellaneous Plan of the City of Huntington Beach Annual Valuation Report as of June 30, 2021.
135
503
City of Huntington Beach
Required Supplementary Information
Schedule of Contributions
For the Year Ended June 30, 2022
(in Thousands)
2021-22 1 2020-21 1 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 13,579$ 27,691$ 25,847$ 23,062$ 15,223$ 19,468$ 19,129$ 18,125$ 14,759$
Contributions in relation to the actuarially
determined contributions (13,579) (27,691) (25,847) (23,062) (15,223) (19,468) (19,129) (19,125) (14,759)
Contribution deficiency (excess)-$ -$ -$ -$ -$ -$ -$ (1,000)$ -$
Covered payroll 48,023$ 45,665$ 43,783$ 43,684$ 31,943$ 43,269$ 42,607$ 44,055$ 41,167$
Contributions as a percentage of covered payroll 28.28% 60.64% 59.03% 52.79% 47.66% 44.99% 44.90% 43.41% 35.85%
Notes to Schedule
Valuation date: 6/30/2012 through 06/30/2019
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry Age Normal
Amortization method/period For details, see Safety Plan of the City of Huntington Beach Annual Valuation Report as of June 30, 2021.
Asset valuation method
Inflation
Salary increases Varies by entry age and service.
Payroll growth
Discount Rate
Retirement age
Mortality
Last Ten Fiscal Years*
The prescribed discount rate assumption, adopted by the Board on December 21, 2016, is 7.00 percent compounded
annually (net of investment and administrative expenses) as of June 30, 2021.
*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.
Note: The CalPERS Board of Administration has adopted a new amortization policy effective with the June 30, 2019 actuarial valuation. The new policy shortens the
period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed using a level dollar amount. In addition, the new policy
removes the 5-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy removes the 5-year
ramp-down on investment gains/losses. These changes will apply only to new UAL bases established on or after June 30, 2019.
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 7/1/19-6/30/20, the probabilities of Retirement are based on the 2017 CalPERS
Experience Study for the period from 1997 to 2015.
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. For 7/1/19-6/30/21, the probabilities of mortality are based on the 2017 CalPERS Experience Study
for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality
improvement using 90% of Scale MP-2016 published by the Society of Actuaries.
CalPERS City Safety Plan - 100
1 Historical information is required only for measurement periods for which GASB 68 is applicable.
For 10/1/14-6/30/15, 15 Year Smoothed Market (for details, see June 30, 2012 Funding Valuation Report). For 7/1/15-
6/30/21, Fair Value (for details, see the Funding Valuation Reports for the years ended June 30, 2013-2021).
2.75% for 10/1/2013-6/30/2020, and 2.80% for 7/1/2020-6/30/2021.
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.
2.75% for 10/1/2013-6/30/2019, 2.50% for 7/1/2019-6/30/2020, and 2.80% for 7/1/2020-6/30/2021.
136
504
City of Huntington Beach
Required Supplementary Information
Schedule of Contributions
For the Year Ended June 30, 2022
(in Thousands)
2021-22 1 2020-21 1 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 889$ 933$ 1,689$ 2,258$ 2,879$ 3,895$ 3,576$ 3,634$ 4,534$
Contributions in relation to the actuarially
determined contributions (6,006) (1,435) (3,506) (4,962) (3,507) (5,346) (7,277) (4,678) (4,539)
Contribution deficiency (excess)(5,117)$ (502)$ (1,817)$ (2,704)$ (628)$ (1,451)$ (3,701)$ (1,044)$ (5)$
Covered payroll 6,670$ 7,684$ 8,469$ 12,863$ 10,890$ 17,167$ 19,517$ 22,069$ 22,004$
Contributions as a percentage of covered payroll 90.04% 18.68% 41.40% 38.58% 32.20% 31.14% 37.29% 21.20% 20.63%
Notes to Schedule
Valuation date:6/30/2021 6/30/2019 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% for 10/1/2013-6/30/2020 and 2.50% per annum for 7/1/2020-6/30/2022.
Salary increases Aggregate - 2.75% annually. Merit - CalPERS 1997-2015 Experience Study.
Payroll growth
Investment rate of return
Retirement age
Mortality
2022 2021 2020 2019 2018 2 2017 2016 2015 2014
Annual Money Weighted Rate of Return, net
of investment expense -15.97% 26.88% 3.79% 4.79% 4.04% 12.87% 10.20% -2.82% 9.20%
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 1997-2015 Experience Study. Pre-retirement and Post-retirement mortality rates
include mortality projected fully generational with Scale MP-2019, modified to converge to ultimate improvement rates in 2022 for the
October 1, 2013 to June 30, 2018 measurement period. Mortality projected fully generational with Scale MP-2019 for the July 1, 2021 to
June 30, 2022 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, 2022
measurement period.
The probabilities of retirement are based on the CalPERS 1997-2015 Experience Study.
Investment gains/losses spread over a 5-year rolling period.
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. Merit - CalPERS 1997-2015 Experience Study
plus 2.75% annually increase for the July 1, 2021 - June 30, 2022 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. 19-year closed period for 2021/2022. Level dollar amortization.
137
505
Fiscal Year Ended June 30 2022 2021 2020 2019 2018**
Actuarially Determined Contribution (ADC)1,401$ 1,364$ 1,793$ 1,746$ 2,022$
Contributions in relation to the ADC***(2,499) (1,882) (1,959) (2,270) (4,192)
Contribution deficiency (excess)(1,098)$ (518)$ (166)$ (524)$ (2,170)$
Covered-employee payroll** 72,524$ 70,881$ 76,521$ 79,682$ 59,589$
Contributions as a percentage of covered-employee payroll 3.45% 2.66% 2.56% 2.85% 7.03%
Notes to Schedule:
Valuation date: 6/30/2021 6/30/2019 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 19-year fixed period
Asset Valuation Method Investment gains and losses spread over 5-year rolling period.
Inflation
Payroll Growth 3.00% per annum, in aggregate.
Investment Rate of Return
Healthcare cost-trend rates
Retirement Age
Mortality
*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.
***Contributions to the OPEB plan are not based on employee pay.
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.
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. Tier 1 employees - 2.5% @55 and Tier 2
employees - 2.0% @ 62. The probabilities of retirement are based on the CalPERS 1997-2015 experience Study for
Measurement period as of 6/30/21.
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. Mortality based on CalPERS 1997-2015 Experience Study covering participants in
CalPERS.
For the Year Ended June 30, 2022
3% for 10/1/17-6/30/18 and 2.75% per annum for the measurement period 7/1/2018 to 6/30/2022.
6% for the October 1, 2017 - June 30, 2018 period. 6.25% for the July 1, 2018 - June 30, 2020. 5.50% for the July 1,
2020 - June 30, 2021 period. Assumes investing in California Employers' Retiree Benefit Trust asset allocation
Strategy 3, moving to Strategy 2 beginning March 2019.
Last Ten Fiscal Years*
Other Post Employment Benefits Plan
(in Thousands)
City of Huntington Beach
Required Supplementary Information
Schedule of Contributions
138
506
SUPPLEMENTARY INFORMATION
139
507
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 Strand Parking Structure Fund accounts for the activities of the Strand Parking Structure.
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 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 Sewer Development Fund accounts for fees received from developers to construct and maintain sewer
facilities.
The Technology Fund accounts for technology infrastructure project expenditures.
140
508
ASSETS Air Quality
Development
Impact Fee
Disability
Access Drainage
Strand Parking
Structures Gas Tax
Cash and Investments 1,148$ 10,615$ 342$ 3,476$ 3,970$ 5,964$
Taxes Receivable - - - - - 963
Other Receivables 69 32 1 11 12 18
Prepaids 133 - - - - -
Total Assets 1,350 10,647 343 3,487 3,982 6,945
LIABILITIES
Accounts Payable 71 991 2 1 154 1,300
Accrued Payroll - - - - - 48
Total Liabilities 71 991 2 1 154 1,348
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue 65 - - - - -
Total Deferred Inflows of Resources 65 - - - - -
FUND BALANCES
Restricted
Pollution Remediation - - - - - -
Highways, Streets and Transportation - - - - - 5,597
Low Income Housing - - - - - -
Air Quality 1,214 - - - - -
Other Capital Projects - 9,656 - 3,486 - -
Other Purposes - - 341 - - -
Committed
Parks - - - - - -
Other Purposes - - - - 3,828 -
Total Fund Balances 1,214 9,656 341 3,486 3,828 5,597
1,350$ 10,647$ 343$ 3,487$ 3,982$ 6,945$
Total Liabilities, Deferred Inflows
of Resources and Fund Balances
SPECIAL REVENUE FUNDS
CITY OF HUNTINGTON BEACH
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
June 30, 2022
(In Thousands)
141
509
Housing
Residual Receipt
Park Acquisition
and Development Surf City "3"
ELM Automation
Fund
Traffic
Congestion
Relief
Traffic Impact
Fee Transportation
Total Special
Revenue Funds
1,271$ 1,455$ 1,245$ 274$ 2,246$ 2,651$ 2,692$ 37,349$
- - 131 - 99 - 749 1,942
4 183 4 1 7 8 8 358
- - - - - - - 133
1,275 1,638 1,380 275 2,352 2,659 3,449 39,782
- 26 22 - 175 12 162 2,916
- - - 8 - - 71 127
- 26 22 8 175 12 233 3,043
- - - - - - - 65
- - - - - - - 65
- 355 - - - - - 355
- - - - 2,177 2,647 3,216 13,637
1,275 - - - - - - 1,275
- - - - - - - 1,214
- - - - - - - 13,142
- - 1,358 267 - - - 1,966
- 1,257 - - - - - 1,257
- - - - - - - 3,828
1,275 1,612 1,358 267 2,177 2,647 3,216 36,674
1,275$ 1,638$ 1,380$ 275$ 2,352$ 2,659$ 3,449$ 39,782$
June 30, 2022
(In Thousands)
(continued)
CITY OF HUNTINGTON BEACH
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
142
510
ASSETS
Public Financing
Authority
Total Debt Service
Fund
Affordable Housing
In-Lieu Infrastructure
Cash and Investments 3,347$ 3,347$ 4,376$ 21,524$
Cash and Investments with Fiscal Agent 1,087 1,087 - -
Taxes Receivable - - - -
Other Receivables - - 165 58
Prepaids - - - -
Total Assets 4,434 4,434 4,541 21,582
LIABILITIES
Accounts Payable 2 2 - 997
Accrued Payroll - - - 100
Total Liabilities 2 2 - 1,097
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - - - -
Total Deferred Inflows of Resources - - - -
FUND BALANCES
Restricted
Pollution Remediation - - - -
Debt Service 4,432 4,432 - -
Highways, Streets and Transportation - - - -
Low Income Housing - - 4,541 -
Air Quality - - - -
Other Capital Projects - - - -
Other Purposes - - - -
Committed
Parks - - - -
Other Capital Projects - - - 20,485
Other Purposes - - - -
Assigned
Capital Improvement Reserve - - - -
Total Fund Balances 4,432 4,432 4,541 20,485
4,434$ 4,434$ 4,541$ 21,582$
Total Liabilities, Deferred Inflows
of Resources and Fund Balances
DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS
(continued)
CITY OF HUNTINGTON BEACH
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
June 30, 2022
(In Thousands)
143
511
Lease Capital Project Parking In-Lieu Sewer Development Technology
Total Capital Projects
Funds
Total Other
Governmental Funds
3$ 720$ 2,880$ 3,012$ 32,515$ 73,211$
8,751 - - - 8,751 9,838
- - - - - 1,942
6 3 9 10 251 609
867 - - - 867 1,000
9,627 723 2,889 3,022 42,384 86,600
- 4 619 1 1,621 4,539
- - - - 100 227
- 4 619 1 1,721 4,766
- - - - - 65
- - - - - 65
- - - - - 355
- - - - - 4,432
- - - - - 13,637
- - - - 4,541 5,816
- - - - - 1,214
9,627 - - - 9,627 22,769
- - - - - 1,966
- - - - - 1,257
- 719 2,270 - 23,474 23,474
- - - - - 3,828
- - - 3,021 3,021 3,021
9,627 719 2,270 3,021 40,663 81,769
9,627$ 723$ 2,889$ 3,022$ 42,384$ 86,600$
CAPITAL PROJECT FUNDS
(continued)
CITY OF HUNTINGTON BEACH
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
June 30, 2022
(In Thousands)
144
512
REVENUES Air Quality
Development
Impact Fee
Disability
Access Drainage
Strand
Parking
Structures Gas Tax
Sales Taxes -$ -$ -$ -$ -$ -$
Other Taxes - - - - - 7,066
Licenses and Permits - - 70 - - -
Use of Money and Property (Loss)12 101 2 (198) 1,529 -
Intergovernmental 189 - - - - 46
Charges for Current Service - 733 - 963 - -
Other - - - - - -
Total Revenues 201 834 72 765 1,529 7,112
EXPENDITURES
Current:
City Manager - - - - - -
Community Development - - - - 917 -
Fire - 73 - - - -
Finance - - 22 - - -
Information Systems - - - - - -
Police - 150 - - - -
Community Services - 5,171 - - - -
Library Services - 84 - - - -
Public Works 505 - - 1 - 4,271
Total Expenditures 505 5,478 22 1 917 4,271
Excess Of Revenues Over
(Under) Expenditures (304) (4,644) 50 764 612 2,841
Other Financing Sources (Uses):
Transfers In - - - - - 157
Transfers Out - - - - (400) (70)
Total Other Financing Sources (Uses)- - - - (400) 87
Net Change in Fund Balances (304) (4,644) 50 764 212 2,928
Fund Balances - Beginning of Year 1,518 14,300 291 2,722 3,616 2,669
Fund Balances - End of Year 1,214$ 9,656$ 341$ 3,486$ 3,828$ 5,597$
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
SPECIAL REVENUE FUNDS
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
145
513
Housing
Residual Receipt
Park Acquisition
and Development Surf City "3"
ELM Automation
Fund
Traffic
Congestion
Relief
Traffic Impact
Fee Transportation
Total Special
Revenue Funds
-$ -$ -$ -$ -$ -$ 4,290$ 4,290$
- - 518 - - - - 7,584
- - - - - - - 70
12 (89) 13 (17) 16 19 30 1,430
- - - - 1,557 - - 1,792
- 1,157 - 411 - 143 - 3,407
14 - - - - - - 14
26 1,068 531 394 1,573 162 4,320 18,587
- - 636 - - - - 636
2 - - - - - - 919
- - - - - - - 73
- - - - - - - 22
- - - 394 - - - 394
- - - - - - - 150
- 1,200 - - - - - 6,371
- - - - - - - 84
- - - - 1,447 507 3,928 10,659
2 1,200 636 394 1,447 507 3,928 19,308
24 (132) (105) - 126 (345) 392 (721)
- - 3 - 16 97 7 280
- - - - - (27) - (497)
- - 3 - 16 70 7 (217)
24 (132) (102) - 142 (275) 399 (938)
1,251 1,744 1,460 267 2,035 2,922 2,817 37,612
1,275$ 1,612$ 1,358$ 267$ 2,177$ 2,647$ 3,216$ 36,674$
SPECIAL REVENUE FUNDS
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
(continued)
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
146
514
REVENUES
Public Financing
Authority
Total Debt Service
Funds
Affordable Housing
In-Lieu Infrastructure
Sales Taxes -$ -$ -$ -$
Other Taxes - - - -
Licenses and Permits - - 794 -
Use of Money and Property (Loss)3 3 134 32
Intergovernmental - - 235 209
Charges for Current Service - - - -
Other - - - 11
Total Revenues 3 3 1,163 252
EXPENDITURES
Current:
City Manager - - - -
Community Development - - - -
Fire - - - -
Finance 7 7 - -
Information Systems - - - -
Police - - - -
Community Services - - - 237
Library Services - - - -
Public Works - - - 10,645
Debt Service:
Principal 2,180 2,180 - -
Interest 780 780 - -
Total Expenditures 2,967 2,967 - 10,882
Excess Of Revenues Over
(Under) Expenditures (2,964) (2,964) 1,163 (10,630)
Other Financing Sources (Uses):
Transfers In 2,961 2,961 1,931 14,050
Issuance of Long-Term Debt - - - -
Transfers Out - - - -
Total Other Financing Sources (Uses)2,961 2,961 1,931 14,050
Net Change in Fund Balances (3) (3) 3,094 3,420
Fund Balances - Beginning of Year 4,435 4,435 1,447 17,065
Fund Balances - End of Year 4,432$ 4,432$ 4,541$ 20,485$
DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS
(In Thousands)
(continued)
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
147
515
Lease Capital Project Parking In-Lieu Sewer Development Technology
Total Capital Projects
Funds
Total Other
Governmental Funds
-$ -$ -$ -$ -$ 4,290$
- - - - - 7,584
- 66 - - 860 930
6 - (179) (178) (185) 1,248
- - 12 - 456 2,248
- - 367 - 367 3,774
- - - - 11 25
6 66 200 (178) 1,509 20,099
- - - - - 636
- 5 - - 5 924
- - - - - 73
- - - - - 29
- - - 81 81 475
- - - - - 150
- - - - 237 6,608
- - - - - 84
- - 2,164 - 12,809 23,468
- - - - - 2,180
- - - - - 780
- 5 2,164 81 13,132 35,407
6 61 (1,964) (259) (11,623) (15,308)
- - - - 15,981 19,222
868 - - - 868 868
- - - - - (497)
868 - - - 16,849 19,593
874 61 (1,964) (259) 5,226 4,285
8,753 658 4,234 3,280 35,437 77,484
9,627$ 719$ 2,270$ 3,021$ 40,663$ 81,769$
(In Thousands)
(continued)
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, 2022
148
516
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property -$ -$ 12$ 12$
Intergovernmental 250 250 189 (61)
Total Revenues 250 250 201 (49)
EXPENDITURES:
Current:
Public Works 532 1,099 505 594
Total Expenditures 532 1,099 505 594
Net Change in Fund Balance (282) (849) (304) 545
Fund Balance - Beginning of Year 1,518 1,518 1,518 -
Fund Balance - End of Year 1,236$ 669$ 1,214$ 545$
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property -$ -$ 101$ 101$
Charges for Current Service 356 356 733 377
Total Revenues 356 356 834 478
EXPENDITURES:
Current:
Fire - 900 73 827
Police 1,124 1,607 150 1,457
Community Services 3,782 8,812 5,171 3,641
Library Services 300 422 84 338
Debt Service:
Principal 11 11 - 11
Total Expenditures 5,217 11,752 5,478 6,274
Net Change in Fund Balance (4,861) (11,396) (4,644) 6,752
Fund Balance - Beginning of Year 14,300 14,300 14,300 -
Fund Balance - End of Year 9,439$ 2,904$ 9,656$ 6,752$
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Licenses and Permits 84$ 84$ 70$ (14)$
Use of Money and Property - - 2 2
Total Revenues 84 84 72 (12)
EXPENDITURES:
Current:
Finance 84 84 22 62
Total Expenditures 84 84 22 62
Net Change in Fund Balance - - 50 50
Fund Balance - Beginning of Year 291 291 291 -
Fund Balance - End of Year 291$ 291$ 341$ 50$
(In Thousands)
Air Quality
Development Impact Fee
Disability Access
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, 2022
149
517
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property (Loss) -$ -$ (198)$ (198)$
Charges for Current Service 200 200 963 763
Total Revenues 200 200 765 565
EXPENDITURES:
Current:
Public Works 825 989 1 988
Total Expenditures 825 989 1 988
Net Change in Fund Balance (625) (789) 764 1,553
Fund Balance - Beginning of Year 2,722 2,722 2,722 -
Fund Balance - End of Year 2,097$ 1,933$ 3,486$ 1,553$
Strand Parking Structure
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property 1,450$ 1,450$ 1,529$ 79$
Total Revenues 1,450 1,450 1,529 79
EXPENDITURES:
Current:
Community Development 1,093 1,205 917 288
Total Expenditures 1,093 1,205 917 288
OTHER FINANCING SOURCES (USES):
Transfers Out (400) (400) (400) -
Total Other Financing Sources (Uses) (400) (400) (400) -
Net Change in Fund Balance (43) (155) 212 367
Fund Balance - Beginning of Year 3,616 3,616 3,616 -
Fund Balance - End of Year 3,573$ 3,461$ 3,828$ 367$
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Other Taxes 7,257$ 7,257$ 7,066$ (191)$
Intergovernmental - - 46 46
Total Revenues 7,257 7,257 7,112 (145)
EXPENDITURES:
Current:
Public Works 8,748 9,916 4,271 5,645
Total Expenditures 8,748 9,916 4,271 5,645
OTHER FINANCING SOURCES (USES):
Transfers In - 157 157 -
Transfers Out (128) (70) (70) -
Total Other Financing Sources (Uses) (128) 87 87 -
Net Change in Fund Balance (1,619) (2,572) 2,928 5,500
Fund Balance - Beginning of Year 2,669 2,669 2,669 -
Fund Balance - End of Year 1,050$ 97$ 5,597$ 5,500$
Gas Tax
Drainage
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, 2022
(In Thousands)
150
518
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property -$ -$ 12$ 12$
Other 32 32 14 (18)
Total Revenues 32 32 26 (6)
EXPENDITURES:
Current:
Community Development 32 32 2 30
Total Expenditures 32 32 2 30
Net Change in Fund Balance - - 24 24
Fund Balance - Beginning of Year 1,251 1,251 1,251 -
Fund Balance - End of Year 1,251$ 1,251$ 1,275$ 24$
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property (Loss) -$ -$ (89)$ (89)$
Charges for Current Service 268 268 1,157 889
Total Revenues 268 268 1,068 800
EXPENDITURES:
Current:
Community Services 260 1,626 1,200 426
Total Expenditures 260 1,626 1,200 426
Net Change in Fund Balance 8 (1,358) (132) 1,226
Fund Balance - Beginning of Year 1,744 1,744 1,744 -
Fund Balance - End of Year 1,752$ 386$ 1,612$ 1,226$
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Other Taxes 510$ 510$ 518$ 8$
Use of Money and Property - - 13 13
Total Revenues 510 510 531 21
EXPENDITURES:
Current:
City Manager 501 787 636 151
Total Expenditures 501 787 636 151
OTHER FINANCING SOURCES (USES):
Transfers In - 3 3 -
Total Other Financing Sources (Uses) - 3 3 -
Net Change in Fund Balance 9 (274) (102) 172
Fund Balance - Beginning of Year 1,460 1,460 1,460 -
Fund Balance - End of Year 1,469$ 1,186$ 1,358$ 172$
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES, AND
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
Park Acquisition and Development
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
OTHER GOVERNMENTAL FUNDS
Housing Residual Receipt
Surf City "3"
151
519
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property (Loss) -$ -$ (17)$ (17)$
Charges for Current Service 360 360 411 51
Total Revenues 360 360 394 34
EXPENDITURES:
Current:
Information Systems 410 437 394 43
Total Expenditures 410 437 394 43
OTHER FINANCING SOURCES (USES):
Transfers Out (18) - - -
Total Other Financing Sources (Uses) (18) - - -
Net Change in Fund Balance (68) (77) - 77
Fund Balance - Beginning of Year 267 267 267 -
Fund Balance - End of Year 199$ 190$ 267$ 77$
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property -$ -$ 16$ 16$
Intergovernmental 1,800 1,800 1,557 (243)
Total Revenues 1,800 1,800 1,573 (227)
EXPENDITURES:
Current:
Public Works 1,840 3,465 1,447 2,018
Total Expenditures 1,840 3,465 1,447 2,018
OTHER FINANCING SOURCES (USES):
Transfers In - 16 16 -
Total Other Financing Sources (Uses) - 16 16 -
Net Change in Fund Balance (40) (1,649) 142 1,791
Fund Balance - Beginning of Year 2,035 2,035 2,035 -
Fund Balance - End of Year 1,995$ 386$ 2,177$ 1,791$
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property -$ -$ 19$ 19$
Charges for Current Service 100 100 143 43
Total Revenues 100 100 162 62
EXPENDITURES:
Current:
Public Works 1,690 2,149 507 1,642
Total Expenditures 1,690 2,149 507 1,642
OTHER FINANCING SOURCES (USES):
Transfers In - 97 97 -
Transfers Out - (27) (27) -
Total Other Financing Sources (Uses) - 70 70 -
Net Change in Fund Balance (1,590) (1,979) (275) 1,704
Fund Balance - Beginning of Year 2,922 2,922 2,922 -
Fund Balance - End of Year 1,332$ 943$ 2,647$ 1,704$
SCHEDULE OF REVENUES, EXPENDITURES, AND
Traffic Impact Fee
CITY OF HUNTINGTON BEACH
(In Thousands)
ELM Automation Fund
Traffic Congestion Relief
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
152
520
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Sales Taxes 3,016$ 3,016$ 4,290$ 1,274$
Use of Money and Property - - 30 30
Total Revenues 3,016 3,016 4,320 1,304
EXPENDITURES:
Current:
Public Works 2,128 6,500 3,928 2,572
Total Expenditures 2,128 6,500 3,928 2,572
OTHER FINANCING SOURCES (USES):
Transfers In - 7 7 -
Transfers Out (191) - - -
Total Other Financing Sources (Uses) (191) 7 7 -
Net Change in Fund Balance 697 (3,477) 399 3,876
Fund Balance - Beginning of Year 2,817 2,817 2,817 -
Fund Balance - End of Year 3,514$ (660)$ 3,216$ 3,876$
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property -$ -$ 3$ 3$
Total Revenues - - 3 3
EXPENDITURES:
Current:
Finance 12 12 7 5
Debt Service:
Principal 2,180 2,180 2,180 -
Interest 780 780 780 -
Total Expenditures 2,972 2,972 2,967 5
OTHER FINANCING SOURCES (USES):
Transfers In 3,376 3,376 2,961 (415)
Total Other Financing Sources (Uses) 3,376 3,376 2,961 (415)
Net Change in Fund Balance 404 404 (3) (407)
Fund Balance - Beginning of Year 4,435 4,435 4,435 -
Fund Balance - End of Year 4,839$ 4,839$ 4,432$ (407)$
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Licenses and Permits 873$ 873$ 794$ (79)$
Use of Money and Property - - 134 134
Intergovernmental - - 235 235
Total Revenues 873 873 1,163 290
OTHER FINANCING SOURCES (USES):
Transfers In - 1,931 1,931 -
Total Other Financing Sources (Uses) - 1,931 1,931 -
Net Change in Fund Balance 873 2,804 3,094 290
Fund Balance - Beginning of Year 1,447 1,447 1,447 -
Fund Balance - End of Year 2,320$ 4,251$ 4,541$ 290$
Transportation
Public Financing Authority
Affordable Housing In-Lieu
(In Thousands)
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
OTHER GOVERNMENTAL FUNDS
153
521
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property -$ -$ 32$ 32$
Intergovernmental - - 209 209
Other - - 11 11
Total Revenues - - 252 252
EXPENDITURES:
Current:
Community Services 158 533 237 296
Public Works 17,285 27,420 10,645 16,775
Total Expenditures 17,443 27,953 10,882 17,071
OTHER FINANCING SOURCES (USES):
Transfers In 11,500 14,050 14,050 -
Transfers Out (222) - - -
Total Other Financing Sources (Uses) 11,278 14,050 14,050 -
Net Change in Fund Balance (6,165) (13,903) 3,420 17,323
Fund Balance - Beginning of Year 17,065 17,065 17,065 -
Fund Balance - End of Year 10,900$ 3,162$ 20,485$ 17,323$
EXPENDITURES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property -$ -$ 6$ 6$
Total Revenues - - 6 6
EXPENDITURES:
Current:
Fire - 9,618 - 9,618
Total Expenditures - 9,618 - 9,618
OTHER FINANCING SOURCES (USES):
Issuance of Long-Term Debt - 868 868 -
Total Other Financing Sources (Uses) - 868 868 -
Net Change in Fund Balance - (8,750) 874 9,624
Fund Balance - Beginning of Year 8,753 8,753 8,753 -
Fund Balance - End of Year 8,753$ 3$ 9,627$ 9,624$
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Licenses and Permits 67$ 67$ 66$ (1)$
Total Revenues 67 67 66 (1)
EXPENDITURES:
Current:
Community Development 60 90 5 85
Total Expenditures 60 90 5 85
Net Change in Fund Balance 7 (23) 61 84
Fund Balance - Beginning of Year 658 658 658 -
Fund Balance - End of Year 665$ 635$ 719$ 84$
Lease Capital Project
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
(In Thousands)
Infrastructure
Parking In-Lieu
154
522
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property (Loss) -$-$(179)$(179)$
Intergovernmental 12 12 12 -
Charges for Current Service 88 88 367 279
Total Revenues 100 100 200 100
EXPENDITURES:
Current:
Public Works 700 4,063 2,164 1,899
Total Expenditures 700 4,063 2,164 1,899
Net Change in Fund Balance (600)(3,963) (1,964) 1,999
Fund Balance - Beginning of Year 4,234 4,234 4,234 -
Fund Balance - End of Year 3,634$ 271$ 2,270$ 1,999$
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property (Loss) -$-$ (178)$ (178)$
Total Revenues -- (178) (178)
EXPENDITURES:
Current:
Information Systems - 2,176 81 2,095
Total Expenditures - 2,176 81 2,095
Net Change in Fund Balance -(2,176) (259)1,917
Fund Balance - Beginning of Year 3,280 3,280 3,280 -
Fund Balance - End of Year 3,280$ 1,104$ 3,021$ 1,917$
Technology
Sewer 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, 2022
(In Thousands)
155
523
LMIHAF Capital Projects Fund
REVENUES:Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property 600$ 600$ 614$ 14$
Total Revenues 600 600 614 14
EXPENDITURES:
Current:
Community Development 167 187 56 131
Total Expenditures 167 187 56 131
Excess of Revenues Over (Under) Expenditures 433 413 558 145
OTHER FINANCING SOURCES (USES):
Transfers In -900 900 -
Transfers Out (414) (406) (224) 182
Total Other Financing Sources (Uses) (414) 494 676 182
Net Change in Fund Balance 19 907 1,234 327
Fund Balance - Beginning of Year 3,622 3,622 3,622 -
Fund Balance - End of Year 3,641$ 4,529$ 4,856$ 327$
Pension Liability Debt Service Fund
REVENUES:Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Property Taxes 6,126$ 6,126$ 7,912$ 1,786$
Use of Money and Property --192 192
Charges for Current Service - 16,446 16,764 318
Total Revenues 6,126 22,572 24,868 2,296
EXPENDITURES:
Current:
Finance -2 2 -
Debt Service:
Principal 11,635 11,635 10,821 814
Interest 10,937 10,935 10,259 676
Total Expenditures 22,572 22,572 21,082 1,490
Excess of Revenues Over (Under) Expenditures (16,446) -3,786 3,786
OTHER FINANCING SOURCES (USES):
Transfers In 16,446 ---
Total Other Financing Sources (Uses) 16,446 ---
Net Change in Fund Balance --3,786 3,786
Fund Balance - Beginning of Year 16,943 16,943 16,943 -
Fund Balance - End of Year 16,943$ 16,943$ 20,729$ 3,786$
CITY OF HUNTINGTON BEACH
(In Thousands)
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
156
524
THIS PAGE INTENTIONALLY LEFT BLANK
157
525
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 Fund accounts for the City’s self insurance general liability program.
The Equipment Replacement Fund accounts for the City’s equipment replacement needs.
158
526
Self Insurance
Workers' Comp
Self Insurance
General Liability
Equipment
Replacement
Fund
Internal Service
Fund Total
ASSETS
Current Assets:
Cash and Investments 17,110$ 9,860$ 11,039$ 38,009$
Other Receivables, Net 46 27 29 102
Prepaids 600 - 195 795
Total Current Assets 17,756 9,887 11,263 38,906
Non-Current Assets:
Net Pension Asset 388 - - 388
Net Other Postemployment Benefits Asset 20 9 - 29
Total Non-Current Assets 408 9 - 417
Capital Assets:
Machinery and Equipment - - 8,598 8,598
Less Accumulated Depreciation - - (2,372) (2,372)
Total Capital Assets - - 6,226 6,226
Total Assets 18,164 9,896 17,489 45,549
DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows Related to Pensions 78 - - 78
Deferred Outflows Related to Other Postemployment Benefits 16 7 - 23
Total Deferred Outflows of Resources 94 7 - 101
Total Assets and Deferred Outflows of Resources 18,258 9,903 17,489 45,650
LIABILITIES
Current Liabilities:
Accounts Payable 613 26 26 665
Accrued Payroll 19 - - 19
Interest Payable 1 - - 1
Current Portion of Claims Payable 6,993 6,446 - 13,439
Current Portion of Compensated Absences 11 - - 11
Total Current Liabilities 7,637 6,472 26 14,135
Non-Current Liabilities:
Compensated Absences 30 - - 30
Long-Term Obligations Due Within One Year 43 - - 43
Long-Term Obligations Due in More than One Year 986 - - 986
Net Pension Liability 34 - - 34
Claims Payable 35,770 7,222 - 42,992
Total Non-Current Liabilities 36,863 7,222 - 44,085
Total Liabilities 44,500 13,694 26 58,220
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to Pensions 429 - - 429
Deferred Inflows Related to Other Postemployment Benefits 37 16 - 53
Total Deferred Inflows of Resources 466 16 - 482
NET POSITION
Net Investment in Capital Assets - - 6,226 6,226
Unrestricted (26,708) (3,807) 11,237 (19,278)
Total Net Position (26,708) (3,807) 17,463 (13,052)
Total Liabilities, Deferred Inflows
of Resources, and Net Position 18,258$ 9,903$ 17,489$ 45,650$
Governmental Activities
CITY OF HUNTINGTON BEACH
STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
June 30, 2022
(In Thousands)
159
527
Self Insurance
Workers' Comp
Self Insurance
General Liability
Equipment
Replacement
Fund
Internal Service
Fund Total
OPERATING REVENUES
Fees and Charges for Service 9,806$ 6,238$ 6,037$ 22,081$
Other 26 126 - 152
Total Operating Revenues 9,832 6,364 6,037 22,233
OPERATING EXPENSES
Supplies and Operations 1,528 253 1,718 3,499
Claims and Judgments 14,556 7,557 - 22,113
Depreciation - - 1,012 1,012
Total Operating Expenses 16,084 7,810 2,730 26,624
Operating Income (Loss) (6,252) (1,446) 3,307 (4,391)
NON-OPERATING REVENUES (EXPENSES)
Investment Income (Loss) (843) (527) (520) (1,890)
Interest Expense (29) - - (29)
Proceeds from Sale of Equipment - - 1,699 1,699
Total Non-Operating Revenues (Expenses) (872) (527) 1,179 (220)
Income (Loss) Before Transfers (7,124) (1,973) 4,486 (4,611)
Change in Net Position (7,124) (1,973) 4,486 (4,611)
Net Position - Beginning of Year (19,584) (1,834) 12,977 (8,441)
Net Position - End of Year (26,708)$ (3,807)$ 17,463$ (13,052)$
CITY OF HUNTINGTON BEACH
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
Governmental Activities
160
528
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 9,834$ 6,367$ 6,026$ 22,227$
Cash Paid to Employees for Services (370) (8) - (378)
Cash Paid to Suppliers of Goods and Services (7,639) (6,309) (1,554) (15,502)
Net Cash and Investment Provided (Used) by
Operating Activities 1,825 50 4,472 6,347
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Debt Service (37) - - (37)
Interest Paid (32) - - (32)
Net Cash and Investments Provided (Used) by
Noncapital Financing Activities (69) - - (69)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchase of Capital Assets - - (1,934) (1,934)
Proceeds from Sale of Plant, Property, and Equipment - - 1,699 1,699
Net Cash and Investments Provided (Used) by
Capital and Related Financing Activities - - (235) (235)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment (Loss) (843) (527) (520) (1,890)
Net Cash and Investments Provided (Used) by
Investing Activities (843) (527) (520) (1,890)
Net Increase in Cash and Investments 913 (477) 3,717 4,153
Cash and Investments - Beginning of Year 16,197 10,337 7,322 33,856
Cash and Investments - End of Year 17,110$ 9,860$ 11,039$ 38,009$
RECONCILIATION OF OPERATING
INCOME (LOSS) TO NET CASH AND INVESTMENTS
PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income (Loss) (6,252)$ (1,446)$ 3,307$ (4,391)$
Adjustments to Reconcile Operating
Income (Loss) to Net Cash and Investments
Provided (Used) by Operating Activities
Depreciation - - 1,012 1,012
Decrease (Increase) in Other Receivables, Net 2 3 (11) (6)
Decrease in Prepaids - - 282 282
(Increase) in Net Pension Asset (388) - - (388)
(Increase) in Net Other Postemployment Benefits Asset (20) (9) - (29)
Increase (Decrease) in Accounts Payable 254 (186) (118) (50)
Increase in Accrued Payroll 3 - - 3
Increase in Claims Payable 7,969 1,683 - 9,652
(Decrease) in Compensated Absences (3) - - (3)
Decrease in Deferred Pension Outflow 1,156 - - 1,156
Increase in Deferred Pension Inflow 368 - - 368
(Decrease) in Net Pension Liability (1,275) - - (1,275)
(Increase) in Deferred Other Postemployment Benefits Outflow (6) (2) - (8)
Increase in Deferred Other Postemployment Benefits Inflow 28 12 - 40
(Decrease) in Net Other Postemployment Benefits Liability (11) (5) - (16)
Net Cash and Investments Provided (Used)
by Operating Activities 1,825$ 50$ 4,472$ 6,347$
NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES
There were no noncash investing, capital, or financing activities during the year ended June 30, 2022.
Governmental Activities
CITY OF HUNTINGTON BEACH
STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
161
529
THIS PAGE INTENTIONALLY LEFT BLANK
162
530
THIS PAGE INTENTIONALLY LEFT BLANK
163
531
City of Huntington Beach
Fiduciary Funds
Fiduciary Funds account for assets held by the City as a custodian for other organizations or individuals.
The Community Facilities Districts Funds accounts for the debt service activity of the City’s three community
facilities districts.
The Huntington Beach Business Improvement District Fund accounts for the activities of the City’s
business improvement district.
The Bella Terra Parking Structure Fund accounts for the activities of the Bella Terra Parking Structure.
164
532
Custodial Funds
ASSETS:
Community
Facilities
Districts
Business
Improvement
Districts
Parking
Structure - Bella
Terra
Total Custodial
Funds
Current Assets:
Cash and Investments 1,321$ 1,409$ $ 1,995 $ 4,725
Cash with Fiscal Agent 1,586 - 1,682 3,268
Accounts Receivable, Net 3 751 6 760
Total Assets 2,910 2,160 3,683 8,753
LIABILITIES:
Current Liabilities:
Accounts Payable - 1,849 221 2,070
Total Liabilities - 1,849 221 2,070
NET POSITION
Restricted for:
Restricted for Individuals and Organizations 2,910 311 3,462 6,683
Total Net Position 2,910$ 311$ 3,462$ 6,683$
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Custodial Funds
ADDITIONS
Community
Facilities
Districts
Business
Improvement
Districts
Parking
Structure - Bella
Terra
Total Custodial
Funds
Special Assessments or Special Taxes
Collected from Property Owners 1,542$ -$ -$ 1,542$
Business Improvement District Taxes - 6,355 - 6,355
Parking Assessments - - 2,433 2,433
Interest Income 7 - 12 19
Total Additions 1,549 6,355 2,445 10,349
DEDUCTIONS
Administrative Costs 20 - - 20
Payments to other Organizations - 6,211 811 7,022
Interest and Fiscal Agency Expenses 664 - 771 1,435
Principal 825 - 890 1,715
Total Deductions 1,509 6,211 2,472 10,192
Change in Net Position 40 144 (27) 157
Net Position - Beginning of Year 2,870 167 3,489 6,526
Net Position - End of Year 2,910$ 311$ 3,462$ 6,683$
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF FIDUCIARY FUND ASSETS AND LIABILITIES
FIDUCIARY FUNDS
JUNE 30, 2022
165
533
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166
534
THIS PAGE INTENTIONALLY LEFT BLANK
167
535
City of Huntington Beach
Statistical Section
This part of the City of Huntington Beach’s Annual Comprehensive 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 – contains 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 annual comprehensive
financial reports for the relevant year.
168
536
Governmental Activities 2022 2021 2020 2019 2018***
Net investment in capital assets 712,289$ 699,204$ 673,498$ 664,281$ 650,466$
Restricted 68,460 65,755 79,926 66,089 58,537
Unrestricted (223,438) (275,159) (274,523) (251,022) (254,528)
Total Governmental Activities Net Position 557,311$ 489,800$ 478,901$ 479,348$ 454,475$
Business-Type Activities
Net investment in capital assets 143,998$ 142,469$ 142,785$ 145,696$ 143,954$
Restricted 19,309 20,332 22,248 21,153 25,886
Unrestricted 34,120 39,129 38,482 36,747 27,492
Total Business-Type Activities Net Position 197,427$ 201,930$ 203,515$ 203,596$ 197,332$
Primary Government
Net investment in capital assets 856,287$ 841,673$ 816,283$ 809,977$ 794,420$
Restricted 87,769 86,087 102,174 87,242 84,423
Unrestricted (189,318) (236,030) (236,041) (214,275) (227,036)
Total Primary Government Net Position 754,738$ 691,730$ 682,416$ 682,944$ 651,807$
Expenses:
Governmental Activities: 2022 2021 2020 2019 2018***
City Council 382$ 423$ 405$ 360$ 218$
City Manager 5,412 11,163 3,328 4,501 2,063
City Treasurer 259 340 317 246 101
City Attorney 2,183 3,140 3,136 2,886 1,536
City Clerk 1,060 1,147 949 976 475
Finance 5,581 6,828 6,661 6,245 3,455
Human Resources***** - - - 6,261 4,760
Community Development* 11,634 19,716 15,722 6,144 4,301
Fire 52,808 65,960 62,840 56,494 26,688
Information Services 6,469 6,230 8,643 7,530 4,375
Police 73,964 102,415 97,204 87,355 42,109
Economic Development** - - - - -
Community Services 11,517 11,365 12,539 13,369 6,768
Library Services 5,212 6,181 5,776 5,206 2,890
Public Works 42,598 40,270 45,834 40,803 23,898
Non-Departmental**** - - - - 18,164
Interest on Long-Term Debt 9,548 2,706 1,686 1,823 1,467
Total Governmental Activities 228,627 277,884 265,040 240,199 143,268
Business-Type Activities
Water Utility 44,182 46,054 44,463 43,405 28,414
Sewer Service 10,390 9,284 9,828 9,442 6,127
Refuse Collection 13,738 12,936 12,609 12,051 8,916
Hazmat Service 236 241 235 234 117
Total Business-Type Activities 68,546 68,515 67,135 65,132 43,574
Total Business and Government Type Activities 297,173$ 346,399$ 332,175$ 305,331$ 186,842$
* Planning and Building departments were combined in Fiscal Year ended September 30, 2011. The combined department was later renamed to
Community Development in Fiscal Year ended September 30, 2016.
** Economic Development was combined with Community Development in Fiscal Year ended June 30, 2020. Previously, it was combined with the City
Manager's Office as of Fiscal 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.
CITY OF HUNTINGTON BEACH
CITY OF HUNTINGTON BEACH
Fiscal Year Ended
(In Thousands)
NET POSITION BY COMPONENT - LAST TEN FISCAL YEARS
June 30,
June 30,
CHANGES IN NET POSITION - LAST TEN FISCAL YEARS
(In Thousands)
Fiscal Year Ended
169
537
Governmental Activities 2017 2016 2015 2014 2013
Net investment in capital assets 646,336$ 624,180$ 615,512$ 618,825$ 617,267$
Restricted 41,888 41,555 52,270 34,018 51,867
Unrestricted (262,874) (222,863) (222,787) 89,524 54,076
Total Governmental Activities Net Position 425,350$ 442,872$ 444,995$ 742,367$ 723,210$
Business-Type Activities
Net investment in capital assets 140,478$ 142,566$ 142,616$ 140,770$ 145,886$
Restricted 30,444 32,049 28,096 27,951 27,488
Unrestricted 22,228 21,997 28,476 53,166 65,595
Total Business-Type Activities Net Position 193,150$ 196,612$ 199,188$ 221,887$ 238,969$
Primary Government
Net investment in capital assets 786,814$ 766,746$ 758,128$ 759,595$ 763,153$
Restricted 72,332 73,604 80,366 61,969 79,355
Unrestricted (240,646) (200,866) (194,311) 142,690 119,671
Total Primary Government Net Position 618,500$ 639,484$ 644,183$ 964,254$ 962,179$
Expenses:
Governmental Activities: 2017 2016 2015 2014 2013
City Council 347$ 321$ 270$ 258$ 271$
City Manager 4,691 3,849 3,302 3,878 1,583
City Treasurer 216 208 158 169 132
City Attorney 3,307 2,598 2,284 2,321 2,221
City Clerk 889 806 855 747 797
Finance 6,201 5,765 5,208 5,314 4,825
Human Resources***** 5,693 6,814 5,169 4,616 5,032
Community Development* 7,576 7,208 6,605 7,091 6,155
Fire 52,941 47,965 42,162 43,194 36,323
Information Services 7,047 6,852 6,552 6,456 6,096
Police 84,786 74,943 64,048 66,681 60,466
Economic Development** - - - - 8,395
Community Services 15,558 9,935 13,809 12,509 15,521
Library Services 5,064 4,611 4,246 4,024 3,873
Public Works 35,373 31,791 27,979 31,691 28,500
Non-Departmental**** 29,368 35,240 24,080 21,602 25,563
Interest on Long-Term Debt 2,063 2,119 2,245 1,946 2,289
Total Governmental Activities 261,120 241,025 208,972 212,497 208,042
Business-Type Activities
Water Utility 45,940 41,643 38,614 41,499 38,446
Sewer Service 9,351 8,729 8,192 9,712 7,253
Refuse Collection 10,821 11,277 11,308 11,145 10,882
Hazmat Service 224 244 204 231 220
Total Business-Type Activities 66,336 61,893 58,318 62,587 56,801
Total Business and Government Type Activities 327,456$ 302,918$ 267,290$ 275,084$ 264,843$
**** Beginning with 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 Fiscal Year ended June 30, 2020.
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
170
538
Program Revenues:
Governmental Activities:2022 2021 2020 2019 2018***
Charges for Services
City Council 162$ 162$ 177$ 149$ 91$
City Manager 4,131 4,208 5,315 3,300 2,374
City Treasurer 149 149 163 135 81
City Attorney 5 6 7 7 4
City Clerk 269 30 220 327 229
Finance 3,036 3,055 3,302 2,899 1,746
Human Resources*****- - - 751 373
Community Development*10,953 8,353 10,037 7,459 5,448
Fire 13,401 8,877 10,122 9,831 9,104
Information Services 604 610 636 628 381
Police 6,687 6,477 5,329 6,044 4,703
Economic Development**- - - - -
Community Services 21,117 15,558 17,631 23,530 19,245
Library Services 302 153 266 308 237
Public Works 7,235 6,045 6,614 6,368 4,392
Non-Departmental****- - - - 916
Total Charges for Services 68,051 53,683 59,819 61,736 49,324
Operating Grants 9,301 6,013 8,141 6,644 3,976
Capital Grants 8,537 10,192 14,483 8,361 6,055
Total Governmental Activities Program Revenue 85,889 69,888 82,443 76,741 59,355
Business-Type Activities:
Water Utility 43,590 42,523 40,518 43,958 29,530
Sewer Service 10,791 10,828 10,900 11,868 8,362
Refuse Collection 13,675 13,014 12,573 12,022 8,820
Hazmat Service 276 266 279 276 25
Total Business-Type Activities Program Revenues 68,332 66,631 64,270 68,124 46,737
Total Primary Government Program Revenue 154,221 136,519 146,713 144,865 106,092
Net (Expense) Revenue:
Governmental Activities (142,738) (207,996) (182,597) (163,458) (83,913)
Business-Type Activities (214) (1,884) (2,865) 2,992 3,163
Total Net (Expense) Revenue (142,952) (209,880) (185,462) (160,466) (80,750)
General Revenue and Other Changes in Net Position
Governmental Activities:
Property Taxes 102,539 99,958 94,263 89,124 61,185
Sales Taxes 57,652 51,162 44,616 47,437 33,844
Utility Taxes 19,528 18,374 18,149 18,788 14,014
Other Taxes 26,134 17,293 18,635 20,227 14,883
Use of Money and Property (1,895) 4,399 3,208 8,746 2,158
From Other Agencies 4,631 22,000 3,317 4,046 2,263
Gain on Sale of Property 1,699 - - - -
Other - - - - 2,811
Transfers (39) (38) (38) (37) (332)
Total Governmental Activities General Revenues 210,249 213,148 182,150 188,331 130,826
Business-Type Activities:
Use of Money and Property (4,328) 261 2,746 3,235 279
Transfers 39 38 38 37 332
Total Business-Type Activities General Revenues (4,289) 299 2,784 3,272 611
Total General Revenues and Transfers 205,960 213,447 184,934 191,603 131,437
Extraordinary Gain - - - - -
Changes in Net Position - Governmental Activities 67,511 5,152 (447) 24,873 46,913
Changes in Net Position - Business-Type Activities (4,503) (1,585) (81) 6,264 3,774
Total Changes in Net Position 63,008 3,567 (528) 31,137 50,687
Net Position - Beginning of Year 691,730 682,416 682,944 651,807 618,500
Prior Period Adjustment - Governmental Activities - 5,747 - - (17,788)
Prior Period Adjustment - Business-Type Activities - - - - 408
Net Position - Beginning of Year as restated 691,730 688,163 682,944 651,807 601,120
Net Position - End of Year 754,738$ 691,730$ 682,416$ 682,944$ 651,807$
* Planning and Building departments were combined in the Fiscal Year ended September 30, 2011. The combined department was later renamed to
Community Development in Fiscal Year ended September 30, 2016.
** Economic Development was combined with Community Development in the Fiscal Year ended June 30, 2020. Previously, it was combined with the
City Manager's Office as of Fiscal Year ended September 30, 2014.
Fiscal Year Ended
CHANGES IN NET POSITION - LAST TEN FISCAL YEARS
CITY OF HUNTINGTON BEACH
(In Thousands)
June 30,
171
539
Program Revenues:
Governmental Activities:2017 2016 2015 2014 2013
Charges for Services
City Council 108$ 116$ 71$ 68$ 66$
City Manager 3,515 3,029 2,994 2,835 134
City Treasurer 100 101 639 621 602
City Attorney 5 4 143 139 135
City Clerk 257 201 199 321 248
Finance 2,047 2,277 1,353 1,313 1,275
Human Resources*****654 513 1,263 2,499 1,236
Community Development*7,448 9,252 10,670 9,357 9,411
Fire 10,296 9,894 8,625 8,672 9,482
Information Services 501 521 834 809 786
Police 4,968 5,958 5,512 5,170 4,653
Economic Development**- - - - 2,505
Community Services 21,693 18,853 18,569 18,055 17,832
Library Services 476 408 495 434 634
Public Works 5,392 5,733 6,474 6,367 7,315
Non-Departmental****1,116 1,290 327 318 306
Total Charges for Services 58,576 58,150 58,168 56,978 56,620
Operating Grants 7,329 4,723 7,458 7,958 7,303
Capital Grants 3,408 5,939 9,809 5,486 7,191
Total Governmental Activities Program Revenue 69,313 68,812 75,435 70,422 71,114
Business-Type Activities:
Water Utility 39,938 35,765 35,350 36,944 38,679
Sewer Service 10,854 11,280 11,239 10,665 12,267
Refuse Collection 11,282 11,215 11,221 11,006 10,950
Hazmat Service 287 235 222 183 278
Total Business-Type Activities Program Revenues 62,361 58,495 58,032 58,798 62,174
Total Primary Government Program Revenue 131,674 127,307 133,467 129,220 133,288
Net (Expense) Revenue:
Governmental Activities (191,807) (172,213) (133,537) (142,075) (136,928)
Business-Type Activities (3,975) (3,398) (286) (3,789) 5,373
Total Net (Expense) Revenue (195,782) (175,611) (133,823) (145,864) (131,555)
General Revenue and Other Changes in Net Position
Governmental Activities:
Property Taxes 82,925 87,128 82,615 81,355 74,795
Sales Taxes 43,551 34,289 33,063 29,243 30,276
Utility Taxes 19,303 19,482 20,229 20,621 20,764
Other Taxes 17,991 17,313 16,464 15,601 14,568
Use of Money and Property 3,370 3,618 5,551 3,725 2,816
From Other Agencies 3,896 4,397 5,653 4,279 6,003
Gain on Sale of Property - - - - -
Other 2,438 5,693 4,440 6,903 5,240
Transfers (51) (38) 35 (38) (38)
Total Governmental Activities General Revenues 173,423 171,882 168,050 161,689 154,424
Business-Type Activities:
Use of Money and Property 462 939 1,281 1,015 137
Transfers 51 38 (35) 38 38
Total Business-Type Activities General Revenues 513 977 1,246 1,053 175
Total General Revenues and Transfers 173,936 172,859 169,296 162,742 154,599
Extraordinary Gain - - - - (4,669)
Changes in Net Position - Governmental Activities (18,384) (331) 34,513 19,614 12,827
Changes in Net Position - Business-Type Activities (3,462) (2,421) 960 (2,736) 5,548
Total Changes in Net Position (21,846) (2,752) 35,473 16,878 18,375
Net Position - Beginning of Year 639,484 642,236 964,254 962,179 935,283
Prior Period Adjustment - Governmental Activities 862 - (333,677) (457) 719
Prior Period Adjustment - Business-Type Activities - - (23,814) (14,346) 7,802
Net Position - Beginning of Year as restated 640,346 642,236 606,763 947,376 943,804
Net Position - End of Year 618,500$ 639,484$ 642,236$ 964,254$ 962,179$
*** 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 Fiscal Year ended June 30, 2020.
September 30,
CITY OF HUNTINGTON BEACH
CHANGES IN NET POSITION - LAST TEN FISCAL YEARS
(In Thousands)
Fiscal Year Ended
(continued)
172
540
2022 2021 2020 2019 2018
General Fund:
Nonspendable 82$ 115$ 120$ 23$ 41$
Restricted 14,623 13,561 9,320 8,154 6,384
Committed 26,665 25,565 25,010 25,011 25,011
Assigned 61,454 55,368 45,638 45,825 34,464
Unassigned - - - - 2,734
Total General Fund 102,824$ 94,609$ 80,088$ 79,013$ 68,634$
Other Governmental Funds:
Nonspendable -$ 105$ 50$ 64$ 726$
Restricted 75,774 70,161 71,671 59,213 52,742
Committed 28,559 26,857 21,735 20,308 20,800
Assigned 3,021 3,280 3,527 3,614 2,701
Unassigned (4,311) - - - -
Total Other Governmental Funds 103,043$ 100,403$ 96,983$ 83,199$ 76,969$
2017 2016 2015 2014 2013
General Fund:
Nonspendable -$ -$ 4,479$ 4,378$ 4,040$
Restricted 2,671 2,637 2,871 2,070 1,878
Committed 25,011 25,011 25,011 25,011 24,011
Assigned 33,498 35,199 32,431 29,595 24,578
Total General Fund 61,180$ 62,847$ 64,792$ 61,054$ 54,507$
Other Governmental Funds:
Restricted 40,588$ 40,293$ 45,515$ 27,214$ 27,425$
Committed 17,686 21,368 21,659 16,447 11,098
Assigned 826 838 161 151 316
Unassigned - - - - (210)
Total Other Governmental Funds 59,100$ 62,499$ 67,335$ 43,812$ 38,629$
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,
173
541
THIS PAGE INTENTIONALLY LEFT BLANK
174
542
2022 2021 2020 2019 2018*
REVENUES:
Property Taxes 102,539$ 99,958$ 94,263$ 89,367$ 80,614$
Sales Taxes 57,652 51,162 44,616 47,437 33,844
Utility Taxes 19,528 18,374 18,149 18,788 14,014
Other Taxes 33,720 25,745 24,578 27,196 18,409
Licenses and Permits 9,596 8,213 11,266 8,574 6,293
Fines and Forfeitures 5,144 4,619 3,403 4,300 3,048
From Use of Money and Property 14,365 19,163 27,863 23,276 11,600
From Other Agencies 13,060 29,836 11,309 13,072 10,384
Charges for Current Service/Other Revenue 52,809 27,428 34,772 33,787 30,216
TOTAL REVENUES 308,413 284,498 270,219 265,797 208,422
EXPENDITURES
Current:
City Council 426 1,043 394 369 279
City Manager 5,265 15,976 4,342 6,598 3,143
City Treasurer 326 837 297 248 134
City Attorney 2,995 7,714 2,898 2,874 2,037
City Clerk 1,295 2,810 886 981 602
Finance 7,259 16,173 6,200 6,484 4,376
Human Resources****** - - - 6,362 5,323
Community Development** 14,412 39,212 14,692 8,138 5,554
Fire 62,880 149,726 56,477 54,431 36,347
Information Systems 7,871 19,095 8,473 8,342 5,385
Police 93,976 232,438 87,682 83,546 57,916
Economic Development*** - - - - -
Community Services 18,455 25,064 14,429 11,720 7,958
Library Services 6,300 14,099 5,199 4,944 3,436
Public Works 50,158 88,007 47,655 46,878 30,357
Non-Departmental***** - - - - 22,432
Capital Outlay**** - - - - -
Debt Service:
Principal 15,918 3,983 5,122 5,346 311
Interest 11,299 937 1,748 1,890 965
TOTAL EXPENDITURES 298,835 617,114 256,494 249,151 186,555
EXCESS (DEFICIENCY) OF
REVENUES OVER (UNDER) EXPENDITURES 9,578 (332,616) 13,725 16,646 21,867
OTHER FINANCING SOURCES (USES):
Transfers In 21,642 13,058 10,009 11,190 13,261
Issuance of Long-Term Debt - 372,010 1,172 - -
Issuance Premium - 1,743 - - -
Issuance Discount - (649) - - -
Payments to Escrow - (28,256) - - -
Lease (as Lessee)448 - - - -
Issuance of Finance Purchase Agreement 868 - - - -
Transfers Out (21,681) (13,096) (10,047) (11,227) (13,593)
TOTAL OTHER FINANCING SOURCES (USES)1,277 344,810 1,134 (37) (332)
Extraordinary Item - Dissolution of RDA - - - - -
INCREASE (DECREASE) IN FUND BALANCES 10,855$ 12,194$ 14,859$ 16,609$ 21,535$
DEBT SERVICE AS A PERCENTAGE OF
NON-CAPITAL EXPENDITURES 10.1% 0.9% 3.0% 3.3% 0.7%
* 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 Fiscal Year ended September 30, 2011. The department was later renamed
to Community Development in Fiscal Year ended September 30, 2016.
*** Economic Development was combined with Community Development in Fiscal Year ended June 30, 2020. Previously, it was
combined with the City Manager's Office as of the Fiscal Year ended September 30, 2014.
(Modified Accrual Basis of Accounting)
Fiscal Year Ended
June 30,
CITY OF HUNTINGTON BEACH
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS
(In Thousands)
175
543
(continued)
2017 2016 2015 2014 2013
REVENUES:
Property Taxes 80,826$ 86,382$ 82,472$ 79,460$ 74,442$
Sales Taxes 43,551 39,305 32,234 30,454 29,763
Utility Taxes 19,303 19,482 20,229 20,621 20,764
Other Taxes 17,991 17,313 16,464 15,601 14,568
Licenses and Permits 8,812 9,820 9,270 7,976 9,880
Fines and Forfeitures 3,995 5,144 4,746 4,392 4,058
From Use of Money and Property 17,210 18,055 17,473 16,695 16,046
From Other Agencies 15,293 13,712 18,634 16,804 18,237
Charges for Current Service/Other Revenue 32,351 32,506 35,869 33,886 34,150
TOTAL REVENUES 239,332 241,719 237,391 225,889 221,908
EXPENDITURES
Current:
City Council 333 318 278 258 260
City Manager 4,116 3,092 2,703 3,040 1,574
City Treasurer 201 204 167 169 132
City Attorney 3,052 2,539 2,425 2,321 2,221
City Clerk 830 790 895 747 797
Finance 5,763 5,659 5,452 5,314 4,825
Human Resources****** 5,535 6,776 4,606 4,298 5,661
Community Development** 6,963 7,062 6,954 7,091 6,155
Fire 46,831 46,200 45,008 42,602 35,920
Information Systems 6,603 6,742 6,846 6,456 6,096
Police 75,015 72,612 68,940 66,628 60,460
Economic Development*** - - - - 7,012
Community Services 14,124 10,768 10,223 10,040 13,952
Library Services 4,422 4,247 4,146 3,739 3,588
Public Works 38,635 23,659 23,820 22,872 22,169
Non-Departmental***** 28,396 24,670 20,067 21,033 19,684
Capital Outlay**** - 27,269 14,986 10,729 10,745
Debt Service:
Principal 5,091 5,933 5,454 4,797 9,381
Interest 2,066 2,138 2,226 1,987 2,321
TOTAL EXPENDITURES 247,976 250,678 225,196 214,121 212,953
EXCESS (DEFICIENCY) OF
REVENUES OVER (UNDER) EXPENDITURES (8,644) (8,959) 12,195 11,768 8,955
OTHER FINANCING SOURCES (USES):
Transfers In 6,692 9,034 12,158 9,832 9,501
Issuance of Long-Term Debt 2,767 10,197 -
Issuance Premium - - - - -
Issuance Discount - - - - -
Payments to Escrow - - - - -
Lease (as Lessee)- - - - -
Issuance of Finance Purchase Agreement - - - - -
Transfers Out (6,743) (17,053) (14,238) (9,870) (10,339)
TOTAL OTHER FINANCING SOURCES (USES)2,716 2,178 (2,080) (38) (838)
Extraordinary Item - Dissolution of RDA - - - - (4,669)
INCREASE (DECREASE) IN FUND BALANCES (5,928)$ (6,781)$ 10,115$ 11,730$ 3,448$
DEBT SERVICE AS A PERCENTAGE OF
NON-CAPITAL EXPENDITURES 3.2% 3.6% 3.7% 3.3% 5.8%
**** 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 Fiscal Year ended June 30, 2020.
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)
176
544
Fiscal Year
Common
Property Public Utilities Total Secured Unsecured
Total Assessed
Valuation
Total Direct Tax
Rate
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
2020-2021 39,449,688 518 39,450,206 1,111,018 40,561,224 0.17082
2021-2022 40,789,946 518 40,790,464 1,041,429 41,831,893 0.17082
Source: County of Orange Auditor Controller
Fiscal Year
City Basic Rate
(1), (2) City Other School Districts
Metro Water
District Others
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
2020-2021 0.15582 0.01500 0.07983 0.00350 0.84418 1.09833
2021-2022 0.15582 0.01500 0.07541 0.00350 0.84418 1.09391
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
177
545
Fiscal Year Total Levy Amount
Percentage
of Levy
Delinquent
Tax
Collections Amount
Percentage
of Levy
Delinquent
Taxes
Receivable
Delinquency
Percent
Secured Taxes
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%
2020-2021 69,341 67,887 97.9% 626 68,513 98.8% 926 1.3%
2021-2022 72,014 69,871 97.0% 714 70,585 98.0% 1,510 2.1%
Unsecured Taxes
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%
2020-2021 2,143 1,955 91.2%26 1,981 92.4%82 3.8%
2021-2022 2,267 2,059 90.8%46 2,105 92.9%90 4.0%
Community Facilities Districts
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%
2020-2021 3,949 3,937 99.7%- 3,937 99.7%- 0.0%
2021-2022 3,987 3,975 99.7%- 3,975 99.7%- 0.0%
Note:
The levy and tax year is for July 1st through June 30th and does not include the Redevelopment Agency.
2012/2013 to current fiscal year includes the following:
Unsecured: includes aircraft unsecured tax. Does not include CFDs.
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 Community Facilities District CFDs.
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
178
546
2021-2022
Taxable Assessed Value Percent
(In Thousands)of Total TAV
AES Huntington Beach Energy, LLC 731,070$ 1.75%
Bella Terra Associates LLC 392,816 0.94%
CMFA Special Finance Agency VII 267,496 0.64%
PCH Beach Resort LLC 225,699 0.54%
DCO Pacific City LLC 223,353 0.53%
Huntington Gateway Industrial LLC 160,803 0.38%
The Waterfront Hotel LLC 147,232 0.35%
Monogram Residential Huntington Beach 139,068 0.33%
MC Donnell Douglas/Boeing 137,448 0.33%
One Pacific Plaza Owner LLC 128,867 0.31%
Total Top Ten 2,553,852 6.11%
All Other Property Taxpayers 39,278,041 93.89%
City Total 41,831,893$ 100.00%
2012-2013
Taxable Assessed Value Percent
(In Thousands)of Total TAV
OXY USA Inc 552,425$ 1.97%
The Boeing Company/McDonnell Douglas 350,678 1.25%
Bella Terra Associates LLC 202,718 0.72%
Mayer Financial LP 201,668 0.72%
CIM Huntington LLC 154,351 0.55%
21002 HB LLC 89,155 0.32%
Pacific Sands LLC 84,093 0.30%
United Dominion Realty LP 70,059 0.25%
Harbour Lights LP 66,024 0.24%
Seacliff Village Shopping Center Inc 65,842 0.23%
Total Top Ten 1,837,013 6.55%
All Other Property Taxpayers 26,208,465 93.45%
City Total 28,045,478$ 100.00%
Source: County of Orange Auditor Controller's Office
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
179
547
THIS PAGE INTENTIONALLY LEFT BLANK
180
548
Long-Term Indebtedness 2022 2021 2020 2019 2018***
Governmental Activities:
Judgement Obligation Bonds -$ -$ -$ -$ -$
Public Financing Authority:
2010(a) Lease Revenue Bonds - - 7,410 8,235 9,030
2011(a) Lease Revenue Bonds - - 15,725 17,770 19,735
2014(a) Lease Revenue Bonds 11,215 11,880 12,530 13,145 13,740
2020(a) Lease Revenue Bonds 4,835 4,835 - - -
2020(b) Lease Revenue Bonds 11,315 12,830 - - -
Total Public Financing Authority 27,365 29,545 35,665 39,150 42,505
Other Long-Term Obligations:
Finance Purchase Agreement 11,714 12,753 5,241 5,083 6,079
Leases Payable 247 - - - -
PARS Payable - - - - -
Section 108 Loan City - - - - 430
LED Lighting Phase I 314 432 546 656 762
CEC 2,063 2,457 2,588 2,818 3,000
I-Bank 1,586 1,882 2,171 2,454 2,730
Pension Obligation Bonds 330,642 341,501 - - -
Total Other Long-Term Obligations 346,566 359,025 10,546 11,011 13,001
Total Long-Term Obligations - Governmental Activities 373,931 388,570 46,211 50,161 55,506
Long-Term Obligations - Business-Type Activities:
Pension Obligation Bonds 21,368 22,144 - - -
Total Long-Term Obligations - Business-Type Activities 21,368 22,144 - - -
Total Long Term Obligations - Governmental Activities and
Business-Type Activities 395,299$ 410,714$ 46,211$ 50,161$ 55,506$
2022 2021 2020 2019 2018***
Population 197,437 198,039 200,748 202,265 201,761
Debt Per Capita 2,002$ 2,074$ 230$ 248$ 275$
Total Personal Income (In Thousands)*9,995,248$ 9,659,154$ 9,450,814$ 9,222,677$ 8,849,843$
Per Capita Personal Income*50,625$ 48,774$ 47,078$ 45,597$ 43,863$
Unemployment Rate**2.80% 4.70% 8.60% 2.60%2.70%
Total Employment**104,300 100,700 96,200 107,700 106,900
* 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)
June 30,
181
549
Long-Term Indebtedness 2017 2016 2015 2014 2013
Governmental Activities:
Judgement Obligation Bonds -$ 659$ 1,634$ 2,574$ 3,474$
Public Financing Authority:
2010(a) Lease Revenue Bonds 9,030 9,795 10,525 11,230 11,910
2011(a) Lease Revenue Bonds 19,735 21,650 24,985 28,165 31,195
2014(a) Lease Revenue Bonds 13,740 14,315 14,865 - -
2020(a) Lease Revenue Bonds - - - - -
2020(b) Lease Revenue Bonds - - - - -
Total Public Financing Authority 42,505 45,760 50,375 39,395 43,105
Other Long-Term Obligations:
Finance Purchase Agreement 6,286 4,130 - - -
Leases Payable - - - - -
PARS Payable - - - 29 56
Section 108 Loan City 430 625 805 975 1,135
LED Lighting Phase I 866 966 1,063 - -
CEC 3,000 3,000 - - -
I-Bank 2,730 3,000 - - -
Pension Obligation Bonds - - - - -
Total Other Long-Term Obligations 13,312 11,721 1,868 1,004 1,191
Total Long-Term Obligations - Governmental Activities 55,817 58,140 53,877 42,973 47,770
Long-Term Obligations - Business-Type Activities:
Pension Obligation Bonds - - - - -
Total Long-Term Obligations - Business-Type Activities - - - - -
Total Long Term Obligations - Governmental Activities and
Business-Type Activities 55,817$ 58,140$ 53,877$ 42,973$ 47,770$
2017 2016 2015 2014 2013
Population 202,413 201,919 198,389 195,999 193,616
Debt Per Capita 276$ 288$ 272$ 219$ 247$
Total Personal Income (In Thousands)* 8,878,441$ 8,880,801$ 8,725,545$ 8,278,410$ 7,839,899$
Per Capita Personal Income* 43,863$ 43,982$ 43,982$ 42,237$ 40,492$
Unemployment Rate** 2.80% 3.90% 3.90% 3.60% 3.60%
Total Employment** 103,200 107,200 104,000 120,200 120,200
September 30,
Fiscal Year Ended
CITY OF HUNTINGTON BEACH
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(In Thousands)
182
550
2012-2013 -
2013-2014 -
2014-2015 -
2015-2016 -
2016-2017 -
2017-2018 -
2018-2019 -
2019-2020 -
2020-2021 -
2021-2022 -
4,867,347 4,867,347
37,120,729 4,454,487 4,454,487
38,887,451 4,666,494 4,666,494
40,561,224
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
3,365,457 3,365,457
29,165,729 3,499,887 3,499,887
(In Thousands)
LEGAL DEBT MARGIN
CITY OF HUNTINGTON BEACH
LAST TEN FISCAL YEARS
Assessed
Valuation
Debt Limit - 12% of
Assessed Valuation
Debt Applicable
to Limit
Legal Debt
MarginFiscal Year
5,019,827 5,019,827 41,831,893
28,045,478
183
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2021-22 Assessed Valuation: $45,858,082,541
Debt Repaid with Property Taxes (Tax and Assessment Debt):
Overlapping Tax and Assessment Debt
Percent
Applicable*
Debt Applicable
to City
Metropolitan Water District 1.350% 272,363
Coast Community College District 28.354% 268,171,969
Huntington Beach Union High School District 73.071% 119,584,344
Fountain Valley School District 27.085% 15,740,448
Huntington Beach City School District 99.958% 151,575,274
Ocean View School District 93.573% 121,298,680
Westminster School District 23.889% 29,936,404
Los Alamitos Unified School District Facilities District No. 1 1.163% 2,300,824
City of Huntington Beach Community Facilities Districts (1990-1, 2000-1, 2002-1, 2003-1) 100.000% 26,680,000
Total Overlapping Tax and Assessment Debt 735,560,306$
Direct and Overlapping General Fund Debt
Orange County General Fund Obligations 6.728% 25,349,758
Orange County Pension Obligations 6.728% 35,105,628
Orange County Board of Education Certificates of Participation 6.728% 781,794
North Orange County Regional Occupation Program Certificates of Participation 0.086%7,052
Coast Community College District General Fund Obligations 28.354% 528,802
Coast Community College District Pension Obligation Bonds 28.354% 517,461
Huntington Beach Union High School District Certificates of Participation 73.071% 42,677,914
Los Alamitos Unified School District Certificates of Participation 1.046% 362,251
Huntington Beach School District General Fund Obligations 99.958% 16,285,129
Ocean View School District Certificates of Participation 93.573%15,261,756
Westminster School District General Fund Obligations 23.889% 7,085,477
City of Huntington Beach General Fund Obligations:100.000% 45,298,393
City of Huntington Beach Pension Obligation Bonds 100.000% 352,010,000
Total Direct and Overlapping General Fund Obligation Debt 541,271,415$
Overlapping Tax Increment Debt (Successor Agency)100.000% 3,765,000
Total Direct Debt 397,308,393$
Total Overlapping Debt 883,288,328
Combined Total Debt 1,280,596,721$
(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 ($397,308,393) 0.87%
Combined Total Debt 2.79%
Ratios to Redevelopment Successor Agency Incremental Valuation ($3,810,829,132)
Total Overlapping Tax Increment Debt 0.10%
Source: California Municipal Statistics and City of Huntington Beach Finance Department
STATEMENT OF DIRECT AND
OVERLAPPING BONDED DEBT
JUNE 30, 2022
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.
184
552
2022 % of total
The Boeing Company 3,112 2.98%
Safran Cabin Inc 884 0.85%
Hyatt Regency Huntington Beach 641 0.61%
Boardriders Wholesale LLC 600 0.58%
Cambro Manufacturing 550 0.53%
Huntington Beach Hospital 527 0.51%
Wal-Mart 462 0.44%
Waterfront Hilton Beach Resort 450 0.43%
No Ordinary Moments 440 0.42%
Home Depot USA Inc 436 0.42%
Total of top 10 8,102 7.77%
All others 96,198 92.23%
Total employment (public and private)104,300 100.00%
2013 % of total
Boeing 5,178 4.33%
Cambro MFG Co.1,137 0.95%
Quiksilver 955 0.80%
Ensign United States Drilling 925 0.77%
Hyatt Regency Huntington Beach 641 0.54%
C & D Aerospace 555 0.46%
Huntington Beach Hospital 527 0.44%
Wal-Mart 462 0.39%
Rainbow Disposal 408 0.34%
Huntington Beach Healthcare 381 0.32%
Total of top 10 11,169 9.34%
All others 108,431 90.66%
Total employment (public and private)119,600 100.00%
Source: Finance Department, City of Huntington Beach
CITY OF HUNTINGTON BEACH
PRINCIPAL PRIVATE EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
185
553
General Government:2022 2021 2020 2019 2018*** 2017 2016 2015 2014 2013
City Council 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
City Manager 26.00 20.00 18.00 12.50 12.50 11.50 11.50 11.50 11.50 7.00
City Treasurer 1.50 1.50 1.50 2.00 2.00 2.00 1.50 1.50 1.50 1.50
City Attorney 11.00 11.00 11.00 11.00 11.00 12.00 11.00 11.00 11.00 11.00
City Clerk 5.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00
Finance 34.50 32.50 31.50 33.00 33.00 33.00 32.50 31.50 31.50 29.50
Human Resources **- - - 15.00 15.00 15.00 15.00 15.00 15.00 14.50
Community Development 57.50 57.50 54.00 44.00 44.00 44.00 43.50 44.00 43.00 42.75
Information Systems 26.00 26.00 22.00 30.00 30.00 30.00 30.00 30.00 30.00 29.50
Economic Development *- - - - - - - - - 4.50
Library Services 29.25 29.25 23.25 28.25 28.25 28.25 28.25 28.25 28.25 27.75
Fire 201.00 201.00 200.00 198.00 198.00 198.00 198.00 198.00 196.50 176.50
Police 353.00 357.00 356.00 365.50 364.50 364.50 364.50 361.50 360.50 358.50
Community Services 33.00 33.00 37.00 36.00 36.00 44.00 44.00 43.00 43.00 56.00
Public Works 211.00 207.00 199.00 207.00 207.00 199.00 199.00 198.00 196.00 196.00
989.75 980.75 958.25 987.25 986.25 986.25 983.75 978.25 972.75 960.00
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 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
186
554
Function/Program 2022 2021 2020 2019 2018***
Finance:
Water Bills Processed 637,956 637,920 636,708 639,245 476,290
Active Business Licenses 18,849 19,011 20,910 21,414 21,782
Accounts Receivable Billings Processed 12,437 20,183 25,687 30,217 25,000
City Clerk:
Passports Issued ****5,721 418 4,579 7,024 5,757
Planning:
Entitlements Processed 154 112 162 221 206
Plan Reviews 606 1,955 1,358 1,542 1,466
Field Inspection Complaints 7,403 11,899 11,610 8,183 7,005
Code Violation Cases 5,051 4,473 3,260 4,786 4,219
Building:
Number of Permits Issued 10,292 9,075 8,855 9,807 7,490
Number of Inspections Completed 31,080 26,710 32,859 36,562 30,501
Value of Construction Permits (Thousands of Dollars) 237,945 166,000 169,393 135,910 109,462
Processed Number of Certificate of Occupancies*641 655 515 686 523
Completed Plan Reviews 5,701 4,673 3,469 3,491 2,771
Counter Visits 14,289 115 14,922 21,409 16,498
Fire:
Inspections 7,311 4,008 5,965 6,140 3,963
Responses 22,076 20,428 21,068 20,354 14,490
Ocean Rescues 4,160 4,116 2,487 4,953 3,530
Estimated Beach Visitors 8,345,139 7,910,293 6,712,125 10,577,290 12,522,640
Police:
Physical Arrests 5,585 5,363 5,785 5,979 4,614
Parking Violations 97,299 95,753 59,484 79,069 54,500
Traffic Violations 8,869 10,920 12,105 13,314 11,869
Community Services:
Park/Open Space Acreage 1,072 1,072 1,066 1,066 1,065
Enrollment in Recreation Classes 34,616 15,511 28,952 37,978 27,152
Public Works:
Water Sold (Acre Feet)**26,459 27,731 25,966 26,251 19,777
Gallons of Sewage Pumped Per Day**19 million 19 million 19 million 19 million 19 million
Library:
Items in Collection 290,351 291,444 294,849 293,995 292,037
Items Borrowed 796,882 481,523 779,124 942,821 655,626
* 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.
**** Passport acceptance was closed to the public from June 2020 through May 2021 due to COVID-19. It was reopened on June 15, 2021.
Source: Various departments of the City of Huntington Beach
CITY OF HUNTINGTON BEACH
OPERATING INDICATORS BY FUNCTION/ACTIVITY
LAST TEN FISCAL YEARS
187
555
Function/Program 2017 2016 2015 2014 2013
Finance:
Water Bills Processed 632,997 635,052 536,684 630,240 628,207
Active Business Licenses 22,074 21,420 21,424 20,450 21,127
Accounts Receivable Billings Processed 34,963 30,826 38,594 42,360 45,422
City Clerk:
Passports Issued 7,408 5,623 5,121 4,598 4,220
Planning:
Entitlements Processed 216 221 280 204 231
Plan Reviews 1,376 1,653 1,595 1,466 1,575
Field Inspection Complaints 8,459 7,951 8,233 7,030 7,301
Code Violation Cases 3,981 4,324 4,710 2,545 2,385
Building:
Number of Permits Issued 9,728 10,981 10,670 9,348 8,970
Number of Inspections Completed 38,796 39,380 38,320 36,142 33,962
Value of Construction Permits (Thousands of Dollars) 216,252 283,910 234,946 216,343 248,246
Processed Number of Certificate of Occupancies*740 n/a n/a n/a 477
Completed Plan Reviews 4,172 4,172 3,815 3,148 n/a
Counter Visits 21,731 23,492 21,893 21,326 20,854
Fire:
Inspections 2,758 5,132 6,499 6,641 5,087
Responses 20,555 20,279 19,562 15,815 15,608
Ocean Rescues 3,639 3,977 5,371 6,426 4,195
Estimated Beach Visitors 13,339,518 12,272,030 11,803,943 12,035,134 11,016,615
Police:
Physical Arrests 5,298 5,112 4,854 4,303 4,237
Parking Violations 70,846 90,361 83,453 74,668 72,347
Traffic Violations 19,916 17,639 17,596 16,330 13,016
Community Services:
Park/Open Space Acreage 1,065 1,062 1,062 1,062 1,062
Enrollment in Recreation Classes 37,968 34,424 30,228 30,184 30,218
Public Works:
Water Sold (Acre Feet)**25,944 24,505 24,763 29,279 28,354
Gallons of Sewage Pumped Per Day**22 million 19 million 19 million 22 million 22 million
Library:
Items in Collection 288,599 285,814 343,655 332,092 385,901
Items Borrowed 943,642 921,105 908,656 937,533 892,543
CITY OF HUNTINGTON BEACH
OPERATING INDICATORS BY FUNCTION/ACTIVITY
LAST TEN FISCAL YEARS
(Continued)
188
556
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 451
Miles of Beach Maintained 4.7
Miles of Storm Drains Maintained 120
Miles of Sewer Maintained 362
Source: Various departments of the City of Huntington Beach
JUNE 30, 2022
CAPITAL ASSET STATISTICS BY FUNCTION/ACTIVITY
CITY OF HUNTINGTON BEACH
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557
Honorable Mayor and City Council
City of Huntington Beach
Huntington Beach, California
We have audited the financial statements of the City of Huntington Beach (City) as of and
for the year ended June 30, 2022, and have issued our report thereon dated December 21,
2022. Professional standards require that we advise you of the following matters relating to
our audit.
Our Responsibility in Relation to the Financial Statement Audit
As communicated in our engagement letter dated June 6, 2022, our responsibility, as
described by professional standards, is to form and express an opinion about whether the
financial statements that have been prepared by management with your oversight are
presented fairly, in all material respects, in accordance with accounting principles generally
accepted in the United States of America. Our audit of the financial statements does not
relieve you or management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit
to obtain reasonable, rather than absolute, assurance about whether the financial
statements are free of material misstatement. An audit of financial statements includes
consideration of internal control over financial reporting as a basis for designing 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 over financial reporting.
Accordingly, as part of our audit, we considered the internal control of the City solely for the
purpose of determining our audit procedures and not to provide any assurance concerning
such internal control.
We are also responsible for communicating significant matters related to the audit that are,
in our professional judgment, relevant to your responsibilities in overseeing the financial
reporting process. However, we are not required to design procedures for the purpose of
identifying other matters to communicate to you.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously
communicated to you.
Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, as appropriate, our firm, and our network firms
have complied with all relevant ethical requirements regarding independence under the
American Institute of Certified Public Accountants (“AICPA”) independence standards,
contained in the Code of Professional Conduct.
558
Significant Risks Identified
We have identified the following significant risks:
Implementation of GASB Statement No. 87 Leases
Compliance with Federal grant requirements
Qualitative Aspects of the Entity’s Significant Accounting Practices
Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A
summary of the significant accounting policies adopted by the City is included in Note 1 to
the financial statements. As described in Note 14 to the financial statements, the City
changed accounting policies related to leases by adopting Statement of Governmental
Accounting Standards (GASB Statement) No. 87, Leases, in the fiscal year 2022. No matters
have come to our attention that would require us, under professional standards, to inform
you about (1) the methods used to account for significant unusual transactions and (2) the
effect of significant accounting policies in controversial or emerging areas for which there is
a lack of authoritative guidance or consensus.
Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by
management and are based on management’s current judgments. Those judgments are
normally based on 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 markedly from management’s current judgments.
The most sensitive accounting estimates affecting the financial statements are:
Judgments involving the estimated useful lives and depreciation methodology
used for capital assets, including certain infrastructure. We evaluated
management’s judgments for reasonableness.
Judgments as to which City capital projects should be capitalized and depreciated
in the government-wide financial statements and proprietary funds. We
evaluated management’s judgments for reasonableness.
Judgments relating to the collectability of accounts and notes receivable. We
evaluated management’s judgments for reasonableness.
Judgments with respect to recording claims payable and remediation obligations.
We evaluated management’s judgments for reasonableness.
Judgments involving calculation of the pension liability. We evaluated the
actuarial valuation report supporting the calculations.
Judgments involving the calculation of the other post-employment benefit
(OPEB) liability. We evaluated the actuarial valuation report supporting the
calculations.
We evaluated the key factors and assumptions used to develop the estimates and
determined that it is reasonable in relation to the financial statements taken as a whole and
in relation to the applicable opinion units.
559
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly
sensitive because of their significance to financial statement users. The most sensitive
disclosures affecting the City’s financial statements were:
The disclosure of p ensions in note 6 to the financial statements.
The disclosure of OPEB in note 8 to the financial statements.
The financial statement disclosures are neutral, consistent, and clear.
Significant Unusual Transactions
For purposes of this communication, professional standards require us to communicate to
you significant unusual transactions identified during our audit. There were no significant
unusual transactions identified as a result of our audit procedures.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the
performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards also require us to accumulate all
known and likely misstatements identified during the audit, other than those that we believe
are trivial, and communicate them to the appropriate level of management. Further,
professional standards require us to also communicate the effect of uncorrected
misstatements related to prior periods on the relevant classes of transactions, account
balances or disclosures, and the financial statements as a whole and each applicable opinion
unit.The following summarizes uncorrected financial statement misstatements whose
effects in the current and prior periods, as determined by management, are immaterial,
both individually and in the aggregate to the financial statements taken as a whole.
Recording of certain lease receivables and related deferred inflows due to the
implementation of GASB Statement No. 87, leases
Uncorrected misstatements or matters underlying those uncorrected misstatements could
potentially cause future-period financial statements to be materially misstated, even though
the uncorrected misstatements are immaterial to the financial statements currently under
audit.
In addition, professional standards require us to communicate to you all material, corrected
misstatements that were brought to the attention of management as a result of our audit
procedures. None of the misstatements identified by us as a result of our audit procedures
and corrected by management were material, either individually or in the aggregate, to the
financial statements taken as a whole or applicable opinion units.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management
as a matter, whether or not resolved to our satisfaction, concerning a financial accounting,
560
reporting, or auditing matter, which could be significant to the City’s financial statements or
the auditor’s report. No such disagreements arose during the course of the audit.
Representations Requested from Management
We have requested certain written representations from management, which are included in
the attached letter dated December 21, 2022.
Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing
and accounting matters. Management informed us that, and to our knowledge, there were
no consultations with other accountants regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a
variety of matters, including the application of accounting principles and auditing standards,
significant events or transactions that occurred during the year, operating and regulatory
conditions affecting the entity, and operational plans and strategies that may affect the risks
of material misstatement. None of the matters discussed resulted in a condition to our
retention as the City’s auditors.
Other Information Included in Annual Comprehensive Financial Report
Pursuant to professional standards, our responsibility as auditors for other information,
whether financial or nonfinancial, included in the City’s annual reports, does not extend
beyond the information identified in the audit report, and we are not required to perform
any procedures to corroborate such other information. However, in accordance with such
standards, we have read the information and considered whether such information, or the
manner of its presentation, was materially inconsistent with its presentation in the financial
statements.
Our responsibility also includes communicating to you any information which we believe is a
material misstatement of fact. Nothing came to our attention that caused us to believe that
such information, or its manner of presentation, is materially inconsistent with the
information, or manner of its presentation, appearing in the financial statements.
This report is intended solely for the information and use of the City Council and
management of the City and is not intended to be and should not be used by anyone other
than these specified parties.
Irvine, California
December 21, 2022
561
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, the Air Quality
Special Revenue Fund of the City of Huntington Beach, California, as of and for the year ended
June 30, 2022, and the related notes to the financial statements, which collectively comprise
the Air Quality Special Revenue Fund of the City of Huntington Beach’s basic financial
statements, and have issued our report thereon dated December 21, 2022.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Air Quality
Special Revenue Fund's internal control over financial reporting (internal control) as a basis
for designing 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 Special Revenue Fund's internal control.
Accordingly, we do not express an opinion on the effectiveness of the Air Quality Special
Revenue 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.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Air Quality Special Revenue
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,
562
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 financial statements. 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 21, 2022
563
INDEPENDENT ACCOUNTANT’S REPORT
The Honorable Mayor and City Council
City of Huntington Beach, California
We have performed the procedures enumerated below on the City of Huntington Beach,
California (City) appropriations limit worksheets for compliance with the requirements of
Section 1.5 of Article XIIIB of the California Constitution for the year ended June 30, 2022.
The City is responsible for compliance with Section 1.5 of Article XIIIB of the California
Constitution.
The City has agreed to and acknowledged that these procedures are appropriate to meet
the intended purpose of evaluating compliance with the requirements of Section 1.5 of
Article XIIIB of the California Constitution and the League of California Cities publication
entitled Article XIIIB Appropriations Limitation Uniform Guidelines for the year ended June
30, 2022. This report may not be suitable for any other purpose. The procedures performed
may not address all the items of interest to a user of this report and may not meet the
needs of all users of this report and, as such, users are responsible for determining whether
the procedures performed are appropriate for their purposes.
The procedures and the associated findings are 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’s
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 agreed it 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.
564
The Honorable Mayor and City Council
City of Huntington Beach, California
Page Two
We were engaged by the City to perform this agreed-upon procedures engagement and
conducted our engagement in accordance with 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.
We are required to be independent of the City and to meet our other ethical responsibilities,
in accordance with the relevant ethical requirements related to our agreed-upon procedures
engagement.
This report is intended solely for the information and use of the Management of the City of
Huntington Beach, California and is not intended to be, and should not be, used by anyone
other than the specified party.
Irvine, California
December 21,2022
565
Recommended Adjustments by Fund:
APPROPRIATION INCREASE
Fund No Fund Name Appropriation Revenue Offset Net Increase Dept
100 General Fund 537,000 537,000 - Community & Library Services
100 General Fund 700,000 700,000 - Community Development
100 General Fund 115,000 - 115,000 Finance
100 General Fund 700,000 700,000 - Fire
100 General Fund 189,000 - 189,000 Police
100 General Fund 1,342,000 - 1,342,000 Public Works
100 General Fund 7,050,000 - 7,050,000 Non-Departmental
General Fund Subtotal 10,633,000 1,937,000 8,696,000
212 Narcotics Forfeiture - Federal 60,000 - 60,000 Police
324 Equipment Replacement 500,000 500,000 - Non-Departmental
504 Refuse Collection Service 531,000 531,000 - Public Works
551 Workers' Compensation 4,300,000 4,300,000 - Human Resources
984 Supplemental Law Enforcement Services 750,000 - 750,000 Police
new CalAPP Grant 80,000 80,000 - Community Development
Other Funds Subtotal 6,221,000 5,411,000 810,000
All Funds Total 16,854,000 7,348,000 9,506,000
ATTACHMENT 3
Fiscal Year 2022/2023 Recommended Mid-Year Budget Adjustments
566
Fund No Fund Name Description Amount Department
100 General Fund On-call building plan review services 400,000 Community Development
400,000
ATTACHMENT 4
Fiscal Year 2022/2023 Recommended Mid-Year Professional Services Authority
567
568
569
570
571
572
573
574
575
576
577
578
579
580
581
582
583
584
City of Huntington Beach
Financial Health Indicators
5-YEAR TREND AND COMPARABLE CITIES
FISCAL YEARS 2017/18 – 2021/22
INFORMATION OBTAINED FROM AUDITED CITY ANNUAL COMPREHENSIVE FINANCIAL REPORTS (ACFR)
585
Huntington Beach Anaheim Costa Mesa Garden Grove Irvine Newport Beach Santa Ana Orange Fullerton Population 197,437 341,245 111,394 170,526 310,250 83,727 308,459 137,676 142,732 Square miles 27 50.27 16.8 17.9 66 23.79 27.3 24 22.4 Business Type Water, Sewer, Refuse and Hazmat Electric, Water, Sanitation, Golf Courses, Convention, Sports & Entertainment Venues, ARTIC Management Internal Service Funds Water Utility, Sewage Collection, Housing Authority Internal Service Funds Water, Wastewater Water, Sewer, Refuse Collections, Sanitation, Parking, Transportation Center, and Federal Clean Water Protection Water, Sanitation Water, Sewer, Airport, Brea Dam Facilities Recreational, Parking, and Compressed Natural Gas Facility Full Service Yes Yes Yes Yes Yes Yes Yes Yes Yes Year Incorporated 1909 1857 1953 1956 1971 1906 1886 1888 1904 Contract out Public Safety No No No Yes, Fire to OC Fire Authority Yes, Fire to OC Fire Authority No Yes, Fire to OC Fire Authority and CARE Ambulance Service No No Sales Tax Rate 7.75% 7.75% 7.75% 8.75% 7.75% 7.75% 9.25% 7.75% 7.75% Comparable Cities FY 2021/22 586
A city has a strong financial position if it has sufficient cash and other liquid resources available. Without
those resources, it will have to borrow money, delay payments, or liquidate some of its other assets, all
of which carry significant financial costs.
FINANCIAL HEALTH INDICATOR #1 – GENERAL FUND RESERVE RATIO
This indicator identifies changes (increases or decreases) in General Fund reserves from the
prior year to the current year and is useful in identifying if the City’s fund balance reserve is
deteriorating. A declining fund balance reserve can be a sign of fiscal stress. This indicator is
important in identifying a trend of a deteriorating fund balance reserve as well as how rapidly
it is deteriorating. A higher ratio suggests larger reserves for dealing with unexpected resource
needs in the long run.
FINANCIAL HEALTH INDICATOR #1 – INSIGHT
The City’s General Fund balance reserves increased from 33% to 34% of revenues in FY 2020/21,
then decreased slightly to 33% in FY 2021/22. This is attributed in stronger revenue growth in FY
2021/22, which is used to calculate this ratio. The overall General Fund Balance increased by
$3.39M in FY 2021/22.
FY 17-18
(9 mos)
35%FY 18-19
31%
FY 19-20
33%
FY 20-21
34%FY 21-22
33%
5-Year General Fund Reserve Ratio
City of Huntington Beach
Fullerton, 21%
Anaheim, 31%
Orange, 32%
Huntington Beach, 33%
Newport Beach, 34%
Costa Mesa, 34%
Santa Ana, 43%
Garden Grove, 80%
Irvine, 95%
FY 21-22 General Fund Reserve Ratio - Comparable Cities
Financial Position
Can the City Pay its Bills Now?
587
FHI #2 General Fund Liquidity Ratio
This indicator assesses changes (increases or decreases) in available cash and is useful in
identifying the City’s ability to pay bills on time by measuring readily available cash, such as
unrestricted cash and investments. A declining ratio indicates that the City does not have
sufficient cash available to meet its current obligations as they come due. This indicator is
important in identifying a trend of deteriorating cash as well as how rapidly it is deteriorating. For
this measure, a higher ratio suggests a greater capacity for paying off short-term obligations.
FINANCIAL HEALTH INDICATOR #2 – INSIGHT
The City’s liquidity ratio indicates that the City is able to pay its bills as payments are due by
measuring readily available cash, such as unrestricted cash and investments, compared to the
total liability obligations, such as payables and accrued payroll. The total liability obligations at
year end will vary from year to year based on pay period end dates, timing of projects, and
timing of invoices issued by suppliers.
FY 17-18
(9 mos)
6.20
FY 18-19
7.14 FY 19-20
6.55
FY 20-21
8.52
FY 21-22
5.38
5-Year General Fund Liquidity Ratio -
City of Huntington Beach
Fullerton, 2.05
Anaheim, 2.43
Orange, 3.29
Costa Mesa, 4.36
Huntington Beach, 5.38
Newport Beach, 5.77
Santa Ana, 7.56
Irvine, 8.25
Garden Grove, 14.07
FY 21-22 General Fund Liquidity Ratio - Comparable Cities
Financial Position (Cont.)
Can the City Pay its Bills Now?
588
A City does not only need to pay bills now, but it needs to make sure that the money it brings in regularly
is enough to cover its annual expenses. Missing this mark can negatively affect service levels and the
City’s credit rating which is important for current loan covenants and any future potential debt
financing.
FHI # 3 General Government Growth in Net Position Ratio
A growth in net position indicates that the City can pay its expenses with its revenue and is able
to establish appropriate reserves for future allocation. Revenues from the City’s programs ideally
should cover the expenses that the City incurs for those programs, otherwise reserves may need
to be used to meet the needs. A higher ratio suggests that annual costs are adequately funded,
and the financial condition is improving.
FINANCIAL HEALTH INDICATOR #3 INSIGHT
This ratio measures the change in net position compared to the total General Government net
position. When revenues exceed expenses and assets exceed liabilities, an increase in the ratio
will be seen. The City has shown continued growth in net position. The 8.3% increase in FY
2021/22 is largely attributed to the 21.3% CalPERS investment return, which eliminated the 15%
unfunded pension liability remaining with CalPERS after the FY 2020/21 Pension Obligation Bond
refinancing of 85% of the City’s unfunded pension liability. It is important to note that there will
be a new unfunded pension liability created due to the -7.5% CalPERS investment return in FY
2021/22 which will be reported on the City’s FY 2022/23 ACFR.
FY 17-18
(9 mos)
5.1%
FY 18-19
4.6%
FY 19-20
0.8%
FY 20-21
0.5%
FY 21-22
8.3%
5-Year General Government Growth in Net Position - City of Huntington Beach
Irvine, 0.1%
Newport Beach, 3.1%
Orange, 5.8%
Garden Grove, 8.3%
Huntington Beach, 8.3%
Anaheim, 12.3%
Santa Ana, 12.4%
Fullerton, 13.4%
Costa Mesa, 28.2%
FY 21-22 General Government Growth in Net Position - Comparable Cities
Financial Position
Can the City’s Revenues Cover Its Expenses?
589
FHI #4 General Government Operating Margin Ratio
The City funds certain programs via grants and intergovernmental aid from other government
agencies (e.g. Federal and State) and also charges for services that are offered to its residents.
This measurement illustrates how much of the City expenditures are funded by charges, fees,
and grants rather than general tax dollars to fund program expenditures. For this measure, a
higher ratio suggests basic government services are more self-sufficient through charges, fees,
and grants and less reliant on general tax dollars to fund program expenditures.
FINANCIAL HEALTH INDICATOR #4 – INSIGHT
This ratio illustrates how much of the City’s expenditures were funded by charges, fees, and
grants (37.6%) rather than general tax dollars (62.4%) to fund program expenditures. The other
cities appear to fund their operations more heavily by charges, fees, and grants. This could be
attributed to the level of cost recovery implemented by each City. While there is no standard
we know that most cities do not implement 100% cost recovery.
FY 17-18
(9 mos)
41%
FY 18-19
32%
FY 19-20
31%FY 20-21
25%
FY 21-22
38%
5-Year General Government Operating Margin Ratio - City of Huntington
Beach
Costa Mesa, 25.0%
Orange, 30.7%
Huntington Beach, 37.6%
Newport Beach, 40.5%
Garden Grove, 44.4%
Santa Ana, 52.2%
Irvine, 53.1%
Fullerton, 54.1%
Anaheim, 65.3%
FY 21-22 General Government Operating Margin Ratio - Comparable Cities
Financial Position (Cont.)
Can the City’s Revenues Cover Its Expenses?
590
FHI #5 General Government Own Source Revenue Ratio
The City receives grants and intergovernmental aid from other government agencies, such as
the state and federal governments. While the City welcomes grants and aid to support City
services, the less reliant the City is on money from those sources, the more independent the
City’s financial condition is. Revenues from grants are used to support some City functions.
Other functions, such as public safety, are mainly funded by general tax dollars. This ratio
illustrates the extent to which general government revenues were supported by grants. A
lower ratio suggests that the City is not heavily reliant on grants and more reliant on general
tax dollars and charges for services.
FINANCIAL HEALTH INDICATOR #5 – INSIGHT
This ratio explains how much of our revenues are from grants (6%) compared to general tax
dollars and charges for services (94%). With the addition of the American Rescue Plan Act
funding of $29.6 million, this ratio will be higher next year and is not indicative of an ongoing
pattern as these funds are considered one-time funding only.
FY 17-18
(9 mos)
5%
FY 18-19
6%
FY 19-20
9%FY 20-21
6%
FY 21-22
6%
5-Year General Government Own Source Revenue
Ratio - City of Huntington Beach
Anaheim, 36.6%
Santa Ana, 28.6%
Irvine, 25.8%
Garden Grove, 25.1%
Fullerton, 17.7%
Orange, 13.9%
Costa Mesa, 10.9%
Newport Beach, 8.5%
Huntington Beach, 6.0%
FY 21-22 General Government Own Source Revenue Ratio - Comparable Cities
Financial Position (Cont.)
Can the City’s Revenues Cover Its Expenses?
591
A city will have bills in the future and its current financial condition will influence its ability to pay them.
For the long-term future, a city needs to ensure that its revenue sources can cover long-term spending
needs and provide services to a growing and changing population.
FHI #6 General Government Near-Term Solvency Ratio
The City has both short-term and long-term obligations that must be paid in the future. The fewer
number of years of annual revenue needed to pay the City’s obligations, the stronger the City’s
financial condition. This ratio demonstrates that the City is able to pay a larger portion of its
debts with annual revenues. For this measure, a lower ratio indicates a stronger financial
condition.
FINANCIAL HEALTH INDICATOR #6 – INSIGHT
The City has both short-term and long-term obligations that must be paid in the future. The fewer
number of years of annual revenue needed to pay obligations, the stronger the City’s financial
condition. The decrease of the City’s long-term debt in FY 2020/21 is due to the refinancing of
85% of the City’s pension liability with the issuance of Pension Obligation Bonds, as well as
refinancing of two of the City’s Lease Revenue Bonds (2010A and 2011A) to lower interest rates.
The decrease in FY 2021/22 is largely attributed to the 21.3% CalPERS investment return, which
eliminated the 15% unfunded pension liability remaining with CalPERS after the Pension
Obligation Bond refinancing. It is important to note that there will be a new unfunded pension
liability created due to the -7.5% CalPERS investment return in FY 2021/22 which will be reported
on the City’s FY 2022/23 ACFR.
FY 17-18
(9 mos)
2.80 FY 18-19
1.93
FY 19-20
1.98
FY 20-21
1.92 FY 21-22
1.65
5-Year General Government Near-Term Solvency Ratio - City of
Huntington Beach
Santa Ana, 2.14
Costa Mesa, 2.01
Orange, 1.91
Anaheim, 1.78
Huntington Beach, 1.65
Garden Grove, 1.57
Fullerton, 1.47
Newport Beach, 1.23
Irvine, 0.49
FY 21-22 General Government Near-Term Solvency Ratio - Comparable Cities
Long-Term Solvency
Can the City Pay Its Bills in the Future?
592
FHI #7 General Government Debt, Pension Liability, & OPEB Burden per Resident Ratio
The City issues debt for a variety of reasons and pays for employees’ pensions, including other
post-employment benefits. Having a low debt per capita would put the City in a stronger
financial position. Lower bonded debts, pension liability, and other post-employment benefits
(OPEB) per capita result in a smaller debt burden on taxpayers. For this measure, a lower ratio
indicates a stronger financial condition.
FINANCIAL HEALTH INDICATOR #7 – INSIGHT
As previously discussed, the sharp decrease in FY 2021/22 is largely attributed to the 21.3%
CalPERS investment return, which eliminated the 15% unfunded pension liability remaining with
CalPERS after the Pension Obligation Bond refinancing. It is important to note that there will be
a new unfunded pension liability created due to the -7.5% CalPERS investment return in FY
2021/22 which will be reported on the City’s FY 2022/23 ACFR.
FY 17-18
(9 mos)
2,305
FY 18-19
2,227
FY 19-20
2,275
FY 20-21
2,328
FY 21-22
1,439
5-Year General Government Bonded Debt, Pension Liability & OPEB Burden
per Resident - City of Huntington Beach
Newport Beach, 3,466
Anaheim, 3,462
Costa Mesa, 2,932
Fullerton, 2,906
Santa Ana, 1,986
Orange, 1,624
Garden Grove, 1,527
Huntington Beach, 1,439
Irvine, 144
FY 21-22 General Government Bonded Debt, Pension Liability & OPEB Burden
per Resident - Comparable Cities
Long-Term Solvency (Cont.)
Can the City Pay Its Bills in the Future?
593
FHI #8 Governmental Funds Coverage Ratio
If a large portion of the City’s expenses go towards paying debt principal and interest, it shows
that the City is less able to spend money on services and capital improvements. The City has
principal and interest payments on debt. The lower the amount of these payments compared
to all the other expenditures it has, the stronger its financial condition. For this measure, a lower
ratio indicates a stronger financial condition.
FINANCIAL HEALTH INDICATOR #8 – INSIGHT
The City has a higher ratio than most of the comparative cities, implying the City has higher
principal and interest payments and more overall long-term debt. The City did have more long-
term debt than the comparative cities, primarily as a result of the issuance of a $363.6 million
Pension Obligation Bond in FY 2021/22 of which $341.5 million was related to general
government funds. However, it is important to note that when aggregating all of the City’s
bonded debt, pension, and OPEB liabilities as shown in FHI #7, Huntington Beach has one of the
lowest debt burdens per resident to comparative cities.
FY 17-18
(9 mos)
0.8%FY 18-19
2.9%
FY 19-20
2.7%FY 20-21
1.8%
FY 21-22
9.1%
5-Year Governmental Funds Coverage Ratio -
City of Huntington Beach
Orange, 11.3%
Huntington Beach, 9.1%
Anaheim, 8.0%
Newport Beach, 4.9%
Santa Ana, 2.5%
Costa Mesa, 2.0%
Garden Grove, 1.0%
Fullerton, 0.2%
Irvine, 0.01%
FY 21-22 Governmental Funds Coverage Ratio - Comparable Cities
Long-Term Solvency (Cont.)
Can the City Pay Its Bills in the Future?
594
FHI #9 Enterprise Funds Coverage Ratio
This measure compares the interest expense owed on debts annually to the ongoing, typical
operating revenues from which that expense will be paid. This is similar to a small business
owner making sure that the interest payments on the mortgage for her office aren’t too large
compared to the revenues she brings in each year. Just like the City’s governmental services
need to pay their debts (e.g., bonds) in the long-term, the City’s Enterprise Funds need to do
so as well. The City’s Enterprise Funds include Water, Sewer, Refuse, and Hazmat Service Funds.
For this measure, a higher ratio indicates a stronger financial condition.
FINANCIAL HEALTH INDICATOR #9 – INSIGHT
The City only shows two fiscal years of data as its Enterprise funds did not carry long-term debt
prior to FY 2020/21, with the issuance of a $363.6 million Pension Obligation Bond in FY 2021/22
of which $22.1 million was related to Enterprise funds.
FY 20-21
509.63
FY 21-22
128.01
5-Year Enterprise Funds Coverage Ratio - City of Huntington Beach
Costa Mesa, 0.00
Irvine, 0.00
Anaheim, 18.17
Garden Grove, 60.74
Orange, 83.38
Santa Ana, 122.38
Huntington Beach, 128.01
Fullerton, 218.92
Newport Beach, 4,631.75
FY 21-22 Enterprise Funds Coverage Ratio - Comparable Cities
Long-Term Solvency (Cont.)
Can the City Pay Its Bills in the Future?
595
FHI #10 General Government Capital Asset Value Ratio
A negative ratio indicates that the City’s capital assets decreased in value— that is, the value
at the end of the year was less than the value at the beginning of the year. This indicates that
the depreciation of capital assets was greater than the value of capital assets added, and that
some capital assets may need to be renovated or replaced. Most of the City’s capital assets
decrease in value over time due to depreciation. The City needs to make sure that as capital
assets age, it is renovating or replacing them. Capital assets include land, buildings, vehicles,
and public infrastructure. For this measure, a higher ratio indicates a stronger financial condition.
FINANCIAL HEALTH INDICATOR #10 – INSIGHT
The City showed an increase in FY 2020/21 primarily due to the purchase of land which is
temporarily being used as the site for a 174-bed Navigation Center.
FY 17-18
(9 mos)
1%
FY 18-19
1%FY 19-20
1%
FY 20-21
3%
FY 21-22
1%
5-Year Governmental Capital Assets Value Ratio - City of Huntington
Beach
Irvine, -1%
Costa Mesa, -1%
Anaheim, 0.4%
Garden Grove, 0.03%
Newport Beach, 0.04%
Huntington Beach, 1%
Santa Ana, 2%
Orange, 3%
Fullerton, 5%
FY 21-22 Governmental Capital Assets Value Ratio - Comparable Cities
Long-Term Solvency (Cont.)
Can the City Pay Its Bills in the Future?
596
FHI #11 Enterprise Funds Capital Asset Value Ratio
This ratio explains the percentage of Enterprise Funds capital assets that have been
depreciated. Depreciable capital assets include buildings, vehicles, and public infrastructure.
Assets are depreciated over their useful life as they age, and their value is reduced. A lower
ratio indicates Enterprise Funds capital assets are newer and may not require as much
replacement and/or maintenance costs compared to older capital assets.
FINANCIAL HEALTH INDICATOR #11 – INSIGHT
This ratio explains the percentage of Enterprise Fund capital assets that have been depreciated.
The City’s Enterprise Funds capital assets have aged over the past five years which is evidenced
by the annual increase in the ratio. While the ratio is higher when compared to a majority of its
comparative cities, the increasing trend in this ratio could be indicative of other issues which
require additional analysis.
FY 17-18
(9 mos)
46%
FY 18-19
47%
FY 19-20
48%
FY 20-21
50%
FY 21-22
50%
5-Year Enterprise Funds Capital Asset Ratio - City of Huntington Beach
Orange, 63%
Santa Ana, 52%
Huntington Beach, 50%
Garden Grove, 45%
Anaheim, 40%
Newport Beach, 38%
Fullerton, 37%
Costa Mesa, 0%
Irvine, 0%
FY 21-22 Enterprise Funds Coverage Ratio - Comparable Cities
Long-Term Solvency (Cont.)
Can the City Pay Its Bills in the Future?
597
FHI #12 General Fund Public Safety Costs Ratio
This ratio compares the total costs of the General Fund public safety, which includes police and
fire, to the total General Fund expenditures. A higher ratio indicates more funds are dedicated
to public safety.
FINANCIAL HEALTH INDICATOR #12 – INSIGHT
The Public Safety costs ratio increased over the four fiscal years prior to FY 2021/22, then
declining primarily due to the refinancing of 85% of the City’s pension liability with the issuance
of Pension Obligation Bonds in FY 2020/21, with cost savings first realized in the prior fiscal year.
It is important to note that the remaining 15% pension liability held with CalPERS may incur
increasing annual UAL payments in the future due to the -7.5% CalPERS investment return in FY
2021/22.
FY 17-18
(9 mos)
52%
FY 18-19
60%
FY 19-20
63%
FY 20-21
65%FY 21-22
61%
5-Year General Fund Public Safety Costs Ratio - City of Huntington Beach
Garden Grove, 70%
Fullerton, 70%
Huntington Beach, 61%
Orange, 61%
Costa Mesa, 55%
Santa Ana, 54%
Anaheim, 49%
Newport Beach, 42%
Irvine, 40%
FY 21-22 General Fund Public Safety Costs Ratio - Comparable Cities
Long-Term Solvency (Cont.)
Can the City Pay Its Bills in the Future?
598
Financial Update & FY 2022/23Mid-Year Budget AdjustmentsCity Council MeetingFebruary 21, 20231599
Presentation Overview•City FY 2022/23 Budget Update•FY 2022/23 Mid-Year Budget Adjustment Requests•Staffing Levels and Vacancies•Financial Health Indicators2600
City FY 2022/23 Budget Update3601
Financial Update• The City ended FY 2021/22 with a $3.4 million surplus primarily due to a stronger recovery in sales tax and transient occupancy tax than originally anticipated• Recent economic indicators in 2022 signal caution• These economic factors are creating headwinds for expansion, investment, and consumer demand• Consumers are saving less, drawing from savings, and increasing credit usage• State unemployment December 2022 is 4.1% after 16.1% COVID peak (May 2020) although ratio of job openings to job seekers is starting to decline4Interest Rates•Fed raised rates 7 times in 2022 to 4.25‐4.50%•Inverted yield curveInflation•9.1% June 2022•8.2% Sept 2022•6.5% Dec 2022GDP• 1Q2022: ‐1.6%• 2Q2022: ‐0.6%• 3Q2022: +3.2%• 4Q2022: +2.9%Market Index• 2022• Bond: ‐12.3%•US Stock: ‐19.4%•Int’l Stock: ‐14.79%602
General Fund Long-Term Financial Plan6.8% CalPERS Return FY22/235(in thousands)Actual FY21/22AdoptedFY22/23Projected FY22/23Projected FY23/24ProjectedFY24/25ProjectedFY25/26ProjectedFY26/27Revenue (Recurring)$256,246$253,552 $273,293 $276,763 $282,097 $287,695 $293,546Revenue (One‐Time)‐29,60729,607‐‐‐ ‐Total Revenues$256,246 $283,159 $302,900 $276,763 $282,097 $287,695 $294,546 Expenditures less UAL234,277 234,415251,031 256,408 262,956 269,158 274,718 CalPERS UAL4,891 4,8914,891 5,000 5,000 8,270 12,380 POB Payment13,688 13,55613,556 13,276 12,989 12,687 12,537 One‐Time Expenditures‐16,13516,135‐‐‐ ‐Total Expenditures252,856 268,997285,613 274,684 280,945 290,115 299,635 HB Recovery Reserves‐(13,472)(13,472)‐‐‐ ‐Surplus/(Deficit)$3,390 $690 $3,815 $2,078 $1,153 ($2,421) ($6,089)•Requires use of Section 115 Trust reserves (per UAL Policy) starting in FY25/26•Insufficient fundsprojected to be available in Section 115 Trust and Pension Stabilization Reserve to structurally balance the budget starting FY28/29603
CalPERS UpdateFY2021/22 CalPERS return of -7.5% (original estimate -6.1%) requiring escalating UAL payments by the CityOctober 18 – City Council approved $3 million to fund the Section 115 Trust to address CalPERS’ unfavorable returnSection 115 Trust balance as of June 30, 2022: $15.4MCalPERS Gains & Losses amortized over 20 years with a 5 year ramp-upProjections assumes CalPERS earns 6.8% in FY23/24 going forward which is CalPERS’ discount rate6YearsCalPERS Plan Return1 Year‐7.5%5 Years* 6.7%10 Years* 7.7%20 Years* 6.9%30 Years* 7.7%Decrease UAL PaymentsIncrease UAL PaymentsCalPERS ReturnCalPERS ReturnCalPERS’ investment policy focuses on long-term plan returnsPOB is financially advantageous as long as CalPERS long-term return is > 2.925%* Based on original est. ‐6.1% return604
CalPERS UAL Payment Projection76 ‐4 9 15 20 25 26 26 26 26 6 ‐4 8 12 16 21 20 20 20 20 6 ‐4 7 10 13 16 15 15 15 15 0510152025306/30/2023 6/30/2024 6/30/2025 6/30/2026 6/30/2027 6/30/2028 6/30/2029 6/30/2030 6/30/2031 6/30/2032 6/30/2033Millions3.4% Return6.8% Return10.2% ReturnCalPERS UAL Payments based on projected FY22/23 CalPERS Returns scenarios, with 6.8% return from FY 2023/24 onward.605
CalPERS UAL Payment Projection8CalPERS UAL Payments based on projected CalPERS 6.8% Return in FY22/23 and moving forward6.18.812.011.310.18.15.13.94.9 ‐5.0 8.3 12.4 16.5 20.5 20.4 20.3 20.2 20.1 20.0 ‐ 5 10 15 20 252022‐23 2023‐24 2024‐25 2025‐26 2026‐27 2027‐28 2028‐29 2029‐30 2030‐31 2031‐32 2032‐33 2033‐34MillionsBaselineAddt'l General FundSection 115 TrustShortfallUAL Payment606
FY 2022/23 Mid-Year Budget Adjustments9607
Mid-Year Budget Adjustment Requests10Mid‐year budget adjustments are requested in 6 separate funds:1. General Fund (100)2. Asset Forfeiture (212)3. Equipment Replacement (324)4. Workers’ Compensation (551)5. Supplemental Law Enforcement Services Fund (SLESF) (984)6. New grant fund (TBD)Adequate funding is available for all requested budget adjustments608
General Fund Adjustments11Community & Library Services Department•$537K– increased demand for contract class instructors and increased printing costs for Spring & Summer SANDS offset with recreational and art class revenues for a net zero impactCommunity Development Department•$700K– increased building plan check services offset with plan check permit revenues for a net zero impactFinance Department•$115K– increase in credit card processing fees for payments made through the City’s Enterprise Land Management (ELM) system609
General Fund Adjustments12Fire Department•$525K–Fire strike team reimbursement costs offset with strike team reimbursement revenues for a net zero impact•$175K–Medical & safety supplies for City ambulances offset with emergency medical response revenues for a net zero impactPolice Department•$189Kincreased payment to County for 800MHz cost sharingPublic Works Department•$752K– increased citywide fuel costs•$590K– increased vehicle maintenance and accident repair costs610
General Fund Adjustments13Non‐Departmental•$250K– increased utility costs for natural gas•$500Ktransfer to the Equipment Fund to ensure adequate funding for essential capital equipment needs and address rising equipment costs•$4.3Mtransfer to the Workers’ Compensation Fund to ensure adequate funding for workers’ compensation claims•$2.0Mtransfer to the Section 115 Trust to protect the City from future pension cost increases611
General Fund Adjustment Summary14DepartmentAppropriation Revenue Offset Net IncreaseCommunity & Library$537,000 $537,000 ‐Community Development700,000 700,000 ‐Finance115,000 ‐115,000 Fire700,000 700,000 ‐Police189,000 ‐189,000 Public Works1,342,000 ‐1,342,000 Non‐Departmental7,050,000 ‐7,050,000 General Fund Total$8,633,000 $1,937,000 $8,696,000 612
Other Fund Adjustments15•Other Fund Adjustments requested in the following funds:•Narcotics Forfeiture ‐Federal (212)•Equipment Replacement (324)•Refuse Collection Service (504)•Workers’ Compensation (551)•Supplemental Law Enforcement Services Fund (SLESF) (984)•CalAPP Grant Fund (new)613
Other Fund Adjustments16Workers’ Compensation (Fund 551) –Human Resources•$4.3M for increased costs of claims due to rising medical costs and an expanded list of injuries that are presumed to be work related under California law, including cancer, post‐traumatic stress, and long‐term impacts of COVID. Appropriation is funded by requested $4.3M transfer in from the General Fund.Supplemental Law Enforcement Services Fund (SLESF) (Fund 984) – Police•$750K appropriation for temporary relocation of the dispatch center to Central Net and for the purchase and implementation of a new software to facilitate efficient real‐time, fact‐based decision making.CalAPP Grant (new Fund) ‐Community Development•$80K CalAPP Grant for solar permit platform. Offsetting grant revenues and expenditures for net zero impact.614
Other Fund Adjustments17Narcotics Forfeiture ‐Federal (Fund 212) – Police•$60K for overtime costs arising from participation in the Orange County Regional Narcotics Suppression Program.Equipment Replacement (Fund 324) –Non‐Departmental•$500K appropriation in the Equipment Replacement Fund to ensure adequate funding for essential capital equipment needs and address rising equipment costs. Appropriation is funded by requested $500K transfer in from the General Fund.Refuse Collection Service (Fund 504) – Public Works•$531K to fund pass‐thru costs associated with the Refuse Collection and Disposal Services contract. Based on current revenue collection amounts, these adjustments will have a net zero impact.615
Other Funds Adjustment Summary18Fund Fund Name Appropriation Revenue Offset Net Increase212 Narcotics Forfeiture ‐Federal$60,000 ‐$60,000 324 Equipment Replacement500,000 500,000 ‐504 Refuse Collection Services531,000 531,000 ‐551 Workers' Compensation4,300,000 4,300,000 ‐984 Supplemental Law Enforcement Services 750,000 ‐750,000 New CalAPP Grant80,000 80,000 ‐Other Funds Total$6,221,000 $5,411,000 $810,000 Sufficient revenues, cash, and/or fund balances are available to support the requested other funds adjustments616
Summary of Mid-Year Budget Requests• Approve appropriations and/or transfers of $16.8M• Projected General Fund FY22/23 surplus after appropriation: $3.8M• Approve professional service contract increases• Approve CalAPP Solar Permit Grant19FundDescriptionAmount TotalGeneral FundDepartment appropriation requests$3,833,000$10,633,000Equipment Transfer500,000Workers’ Compensation Transfer4,300,000Section 115 Trust Transfer2,000,000Other FundsNarcotics Forfeiture ‐Federal60,000$6,221,000Equipment Fund Appropriation500,000Refuse Collection Services531,000Workers' Compensation Appropriation4,300,000Supplemental Law Enforcement750,000CalAPP Grant80,000Total$16,854,000Less: Offsetting revenues($7,348,000)Net Increase$9,506,000617
Staffing Levels and Vacancies20618
FY 2022/23 Full Time Equivalent – General FundPre‐COVID21FY 2022/23 Adopted Budget619
Historical Vacancies – General Fund 22Average Salary + Benefits = Fully BurdenedNon‐Sworn: $90,876 31,405 $122,281Sworn: $139,124 65,649 $204,773620
Financial Health Indicators23621
Financial PositionCan the City Pay Its Bills Now?24•FHI # 1 General Fund Reserve Ratio –Building up reserves which is useful in identifying deteriorating fund balance reserves.•FHI #2 General Fund Liquidity Ratio –Ability to pay expenses which is useful in identifying the City’s ability to pay bills on time.622
FHI #1 General Fund Reserve Ratio25A declining fund balance reserve can be a sign of fiscal stress. This indicator is important in identifying a trend of a deteriorating fund balance reserves as well as how rapidly it is deteriorating. A higher ratiosuggests larger reserves for dealing with unexpected resource needs in the long run.FY 17‐18(9 mos)35%FY 18‐1931%FY 19‐2033%FY 20‐2134%FY 21‐2233%5‐Year General Fund Reserve RatioCity of Huntington BeachFullerton, 21%Anaheim, 31%Orange, 32%Huntington Beach, 33%Newport Beach, 34%Costa Mesa, 34%Santa Ana, 43%Garden Grove, 80%Irvine, 95%FY 21‐22 General Fund Reserve Ratio ‐Comparable Cities623
FHI #2 General Fund Liquidity Ratio26A declining ratio indicates a city does not have sufficient cash available to meet its current obligations as they come due. This indicator is important in identifying a trend of deteriorating cash as well as how rapidly it is deteriorating. Ideally, a higher ratiosuggests a greater capacity for paying off short‐term obligations.FY 17‐18(9 mos)6.20FY 18‐197.14FY 19‐206.55FY 20‐218.52FY 21‐225.385‐Year General Fund Liquidity Ratio ‐City of Huntington BeachFullerton, 2.05Anaheim, 2.43Orange, 3.29Costa Mesa, 4.36Huntington Beach, 5.38Newport Beach, 5.77Santa Ana, 7.56Irvine, 8.25Garden Grove, 14.07FY 21‐22 General Fund Liquidity Ratio ‐Comparable Cities624
Financial PerformanceCan the City’s Revenues Cover Its Expenses?27•FHI # 3 General Government Growth in Net Position Ratio –Change in Net Assets where growth in net position indicates City can pay its expenses with ongoing revenue and establish appropriate reserves for future allocation.•FHI # 4 General Government Operating Margin Ratio –City services are more self‐sufficient through charges, fees, and grants.•FHI #5 General Government Own Source Revenue Ratio –Reliance on tax dollars versus the City's reliance on federal and state grants.625
FHI #3 General Government Growth in Net Position Ratio28Revenues from programs ideally should cover the expenses that are incurred for those programs, otherwise reserves may need to be used to meet the needs. A higher ratio suggests that annual costs are adequately funded, and the financial condition is improving.FY 17‐18(9 mos)5.1%FY 18‐194.6%FY 19‐200.8%FY 20‐210.5%FY 21‐228.3%5‐Year General Government Growth in Net Position ‐City of Huntington BeachIrvine, 0.1%Newport Beach, 3.1%Orange, 5.8%Garden Grove, 8.3%Huntington Beach, 8.3%Anaheim, 12.3%Santa Ana, 12.4%Fullerton, 13.4%Costa Mesa, 28.2%FY 21‐22 General Government Growth in Net Position ‐Comparable Cities626
FHI #4 General Government Operating Margin Ratio29A city charges for services and may receive grants and aid from other governments (e.g., Federal and State). For this ratio, a higher ratiosuggests basic government services are more self‐sufficient through charges, fees, and grants and less reliant on general tax dollars to fund program expenditures.FY 17‐18(9 mos)41%FY 18‐1932%FY 19‐2031%FY 20‐2125%FY 21‐2238%5‐Year General Government Operating Margin Ratio ‐City of Huntington BeachCosta Mesa, 25.0%Orange, 30.7%Huntington Beach, 37.6%Newport Beach, 40.5%Garden Grove, 44.4%Santa Ana, 52.2%Irvine, 53.1%Fullerton, 54.1%Anaheim, 65.3%FY 21‐22 General Government Operating Margin Ratio ‐Comparable Cities627
FHI #5 General Government Own Source Revenue Ratio30Revenues from grants are used to support some City functions. Other functions, such as public safety, are mainly funded by general tax dollars. This ratio illustrates the extent to which government revenues were supported by grants. A lower ratiosuggests that the City is not heavily reliant on grants and more reliant on general tax dollars and charges for services.FY 17‐18(9 mos)5%FY 18‐196%FY 19‐209%FY 20‐216%FY 21‐226%5‐Year General Government Own Source Revenue Ratio ‐City of Huntington BeachAnaheim, 36.6%Santa Ana, 28.6%Irvine, 25.8%Garden Grove, 25.1%Fullerton, 17.7%Orange, 13.9%Costa Mesa, 10.9%Newport Beach, 8.5%Huntington Beach, 6.0%FY 21‐22 General Government Own Source Revenue Ratio ‐Comparable Cities628
Long-Term SolvencyCan the City Pay Its Bills in the Future?31•FHI # 6 General Government Near‐Term Solvency Ratio –Ability to pay obligations with annual revenues where fewer number of years of annual revenue needed to pay City obligations the stronger its financial condition. •FHI # 7 General Government Debt, Pension Liability & Other Post‐Employment Benefits (OPEB) Burden per Resident –Amount of liability per resident where lower liability per capita results in smaller debt, pension, and OPEB burden on taxpayers.•FHI # 8 Governmental Funds Coverage Ratio –A larger portion of expenses used for debt means the City is less able to spend money on services and capital improvements. •FHI # 9 Enterprise Funds Coverage Ratio –Availability of resources for Enterprise Funds to make bond payments. 629
FHI #6 General Government Near-Term Solvency Ratio32This ratio demonstrates a City’s ability to pay a larger portion of its debts with annual revenues. For this measure, a lower ratioindicates a stronger financial condition.FY 17‐18(9 mos)2.80 FY 18‐191.93 FY 19‐201.98 FY 20‐211.92 FY 21‐221.65 5‐Year General Government Near‐Term Solvency Ratio ‐City of Huntington BeachSanta Ana, 2.14Costa Mesa, 2.01Orange, 1.91Anaheim, 1.78Huntington Beach, 1.65Garden Grove, 1.57Fullerton, 1.47Newport Beach, 1.23Irvine, 0.49FY 21‐22 General Government Near‐Term Solvency Ratio ‐Comparable Cities630
FHI #7 General Government Debt, Pension Liability, & OPEB Burden per Resident Ratio33Lower bonded debts, pension liability, and other post‐employment benefits (OPEB) per capita result in a smaller debt burden on taxpayers. For this measure, a lower ratioindicates a stronger financial condition.FY 17‐18(9 mos)2,305 FY 18‐192,227 FY 19‐202,275 FY 20‐212,328 FY 21‐221,439 5‐Year General Government Bonded Debt, Pension Liability & OPEB Burden per Resident ‐City of Huntington BeachNewport Beach, 3,466Anaheim, 3,462Costa Mesa, 2,932Fullerton, 2,906Santa Ana, 1,986Orange, 1,624Garden Grove, 1,527Huntington Beach, 1,439Irvine, 144FY 21‐22 General Government Bonded Debt, Pension Liability & OPEB Burden per Resident ‐Comparable Cities631
FHI #8 Governmental Funds Coverage Ratio34A City has principal and interest payments on debts. The lower the amount of these payments compared to all the other expenditures it has, the stronger its financial condition. For this measure, a lower ratioindicates a stronger financial condition.Orange, 11.3%Huntington Beach, 9.1%Anaheim, 8.0%Newport Beach, 4.9%Santa Ana, 2.5%Costa Mesa, 2.0%Garden Grove, 1.0%Fullerton, 0.2%Irvine, 0.01%FY 21‐22 Governmental Funds Coverage Ratio ‐Comparable CitiesFY 17‐18(9 mos)0.8%FY 18‐192.9%FY 19‐202.7%FY 20‐211.8%FY 21‐229.1%5‐Year Governmental Funds Coverage Ratio ‐City of Huntington Beach632
FHI #9 Enterprise Funds Coverage Ratio35Just like a City’s governmental services need to pay their debts (i.e., bonds) in the long‐term, a city’s enterprise funds need to do so as well. The City’s Enterprise Funds include Electric, Water, Sewer, Refuse, and Hazmat Service Funds. For this measure, a higher ratioindicates a stronger financial condition.FY 20‐21509.63 FY 21‐22128.01 5‐Year Enterprise Funds Coverage Ratio ‐City of Huntington BeachCosta Mesa, 0.00Irvine, 0.00Anaheim, 18.17Garden Grove, 60.74Orange, 83.38Santa Ana, 122.38Huntington Beach, 128.01Fullerton, 218.92Newport Beach, 4,631.75FY 21‐22 Enterprise Funds Coverage Ratio ‐Comparable CitiesNote: No Enterprise Funds in the cities of Costa Mesa and Irvine.633
Long-Term Solvency - ContinuedCan the City Pay Its Bills in the Future?36•FHI # 10 General Government Capital Asset Value Ratio –Change in value of capital assets where if City doesn't replace or renovate its capital assets, value over time decreases. •FHI # 11 Enterprise Funds Capital Asset Age Ratio –Percentage of Enterprise Funds capital assets that have been depreciated.•FHI #12 Public Safety Costs Ratio –Compares and determines the funding level of the General Fund public safety costs.634
FHI #10 General Government Capital Asset Value Ratio37Capital assets include land, buildings, vehicles, and public infrastructure. Most of the City’s capital assets decrease in value over time due to depreciation. A negative ratio means that the overall value of a city’s assets decreased over the year indicating some assets may need to be renovated or replaced. For this measure, a higher ratioindicates a stronger financial condition.FY 17‐18(9 mos)1%FY 18‐191%FY 19‐201%FY 20‐213%FY 21‐221%5‐Year Governmental Capital Assets Value Ratio ‐City of Huntington BeachIrvine, ‐1%Costa Mesa, ‐1%Anaheim, 0.4%Garden Grove, 0.03%Newport Beach, 0.04%Huntington Beach, 1%Santa Ana, 2%Orange, 3%Fullerton, 5%FY 21‐22 Governmental Capital Assets Value Ratio ‐Comparable Cities635
FHI #11 Enterprise Funds Capital Asset Value Ratio38Depreciable capital assets include buildings, vehicles, and public infrastructure. Assets are depreciated over their useful life as they age, and their value is reduced. A lower ratioindicates Enterprise Funds capital assets are newer and may not require as much replacement and/or maintenance costs compared to older capital assets.Note: No Enterprise Funds in the cities of Costa Mesa and Irvine.FY 17‐18(9 mos)46%FY 18‐1947%FY 19‐2048%FY 20‐2150%FY 21‐2250%5‐Year Enterprise Funds Capital Asset Ratio ‐City of Huntington BeachOrange, 63%Santa Ana, 52%Huntington Beach, 50%Garden Grove, 45%Anaheim, 40%Newport Beach, 38%Fullerton, 37%Costa Mesa, 0%Irvine, 0%FY 21‐22 Enterprise Funds Coverage Ratio ‐Comparable Cities636
FHI #12 General Fund Public Safety Costs Ratio39This ratio compares the total costs of the General Fund public safety, which includes police and fire, to the total General Fund expenditures. A higher ratioindicates more funds are dedicated to public safety.FY 17‐18(9 mos)52%FY 18‐1960%FY 19‐2063%FY 20‐2165%FY 21‐2261%5‐Year General Fund Public Safety Costs Ratio ‐City of Huntington BeachGarden Grove, 70%Fullerton, 70%Huntington Beach, 61%Orange, 61%Costa Mesa, 55%Santa Ana, 54%Anaheim, 49%Newport Beach, 42%Irvine, 40%FY 21‐22 General Fund Public Safety Costs Ratio ‐Comparable Cities637
ONGOING CHALLENGES•Inflationary Costs•Increased CalPERS Costs •Increased Workers’ Compensation Costs•Increased General Liability Costs•Increasing General Fund Reserves•Capital and Infrastructure Needs40638
Fiscal Health Summary•Healthy available General Fund reserves and liquidity maintained at very strong levels during the past several years, including during the COVID‐19 pandemic.•General Fund fund balance equivalent to 34% of FY 2021/22 revenues•Property tax base provides a stable revenue source with significant amount of untapped assessed valuation•Diverse sales tax base (no single dominant industry or business)•AAA Fitch rating maintained since first received in 2014•Credit rating could lower if City’s available General Fund reserves are reduced to weaker levels in the future without a plan to restore balance within two fiscal years.•Addressing upcoming challenges proactively will determine the future of the City’s continued financial health.41639
Recommended Actions•Receive and File the FY 2021/22 Annual Comprehensive Financial Report and other auditor issued reports•Receive and File the Fiscal Health Report•Approve mid‐year budget adjustments to the FY 2022/23 Revised Budget•Authorize additional Professional Services authority in the Fiscal Year 2022/23 Revised Budget•Approve and authorize the Mayor and City Clerk to execute “Amendment No. 1 to Agreement between the City of Huntington Beach and CSG Consultants, Inc. for On‐Call Building Division Plan Review Services”•Approve and authorize the Mayor and City Clerk to execute “Amendment No. 1 to Agreement between the City of Huntington Beach and True North Compliance Services, Inc. for On‐Call Building Division Plan Review Services”•Accept, approve and authorize the City Manager to execute the grant agreement with the State of California Energy Commission in the amount of $80,00042640
Questions?641
City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-162 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Travis K. Hopkins, Assistant City Manager
PREPARED BY:Grace Yoon-Taylor, Principal Management Analyst
Subject:
Approve for Introduction Ordinance No. 4280 Amending Chapter 2.109 of the Huntington
Beach Municipal Code Regarding the Finance Commission
Statement of Issue:
At the January 17, 2023 Council meeting, City Council directed staff to return with an Ordinance
amending Chapter 2.109 of the Huntington Beach Municipal Code (HBMC) regarding the Finance
Commission.
Financial Impact:
There is no immediate fiscal impact at this time. However, approval of the Ordinance may potentially
require additional staff time, consultant fees, and services to support the Finance Commission’s
expanded scope of work, which is to be determined.
Recommended Action:
Approve for introduction Ordinance No. 4280, “An Ordinance of the City of Huntington Beach
Amending Chapter 2.109 to the Huntington Beach Municipal Code Regarding Finance Commission.”
Alternative Action(s):
Do not approve for introduction Ordinance No. 4280 amending Chapter 2.109 of the HBMC related to
the Finance Commission, and direct staff accordingly.
Analysis:
As part of the 2021 City Council Strategic Plan, the entire system of the City’s Boards, Commissions,
and Committees (BCCs) was reviewed and streamlined by reformatting, consolidating and/or
dissolving a select number of BCCs.
In the BCC re-organization process, the City’s Finance Commission was restructured to be aligned
with the Finance Department’s fiscal year milestones, which include mid-year and annual budget
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reviews. The meeting frequency of the Commission was also reduced from monthly to bi-monthly
(six times per year) and as needed at the request of the City Council or by Finance Commission
request with the approval of the City Council.
Per the City Council’s direction at the January 17, 2023 Council meeting, staff has prepared
Ordinance No. 4280 (Attachment 1) to amend HBMC Chapter 2.109 and modify the Finance
Commission’s duties, meeting frequency, and other adjustments, for Council’s consideration.
With this amendment, the Finance Commission will meet regularly on a monthly basis and its duties
will expand to its original scope of work related to the City’s financial planning. The Finance
Commission may review and make recommendations to the City Council on its citizen-driven
oversight, deemed necessary.
Additionally, per the City Council’s direction, the Finance Commission will also meet at the Council
Chamber, similar to the Planning Commission and Community & Library Services Commission.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. Ordinance No. 4280 and Legislative Draft
City of Huntington Beach Printed on 2/16/2023Page 2 of 2
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-163 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Travis K. Hopkins, Assistant City Manager
PREPARED BY:Grace Yoon-Taylor, Principal Administrative Analyst
Subject:
Approve the Introduction of Ordinance Nos. 4278, 4279, and 4281 Amending Chapters 2.111,
2.64 and 2.100 of the Huntington Beach Municipal Code Regarding the Citizen Infrastructure
Advisory Board/Public Works Commission, the Community and Library Services
Commission, and Operating Policy for Boards and Commissions respectively
Statement of Issue:
At the January 17, 2023 Council meeting, City Council directed staff to return with necessary
measures to ensure that all individually appointed Boards, Commissions, and Committees (BCCs)
have up to 7 members, with no more than one appointee per Councilmember. This action would
apply to the Community and Library Services Commission (which has a total of 9 members), and the
Citizen Infrastructure Advisory Board/Public Works Commission (which had a total of 8 members but
is currently at 7 following a recent resignation).
Each of these Commissions was a consolidation of multiple BCCs, which took place during a major
BCC restructuring effort in 2021. As such, it led to a temporary increase in membership; those
identified, additional members would exit the Commission following the end of their terms, at which
point the roster for each Commission would return to 7 members.
Tonight’s recommended action would hasten that process and formalize it in the Municipal Code.
Financial Impact:
There is no direct fiscal impact.
Recommended Action:
A) Approve for Introduction Ordinance No. 4278, “An Ordinance of the City of Huntington Beach
Amending Chapter 2.111 to the Huntington Beach Municipal Code Regarding Citizen Infrastructure
Advisory Board/Public Works Commission”; and/or,
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File #:23-163 MEETING DATE:2/21/2023
B) Approve for Introduction Ordinance No. 4279, “An Ordinance of the City of Huntington Beach
Amending Chapter 2.64.040 to the Huntington Beach Municipal Code Regarding Community and
Library Services Commission”; and/or,
C) Approve for Introduction Ordinance No. 4281, “An Ordinance of the City of Huntington Beach
Amending Chapter 2.100 to the Huntington Beach Municipal Code Regarding Operating Policy for
Boards and Commissions.”
Alternative Action(s):
Do not approve for Introduction Ordinance Nos.4278, 4279, and 4281 amending Chapters 2.111,
2.64, and 2.100 of the Huntington Beach Municipal Code (HBMC). The Community and Library
Services Commission will function as what current HBMC states and continue having 9 members
until the terms of two former Library Board members permanently expire.
Analysis:
As part of the 2021 City Council Strategic Plan, the entire system of the City’s Boards, Commissions,
and Committees (BCCs) was reviewed and streamlined by reformatting, consolidating and/or
dissolving a select number of BCCs.
In the BCC re-organization process, the City’s Community Services Commission and the Library
Board of Trustees were consolidated into one - Community and Library Services Commission. This
also reflected the reorganization of the Community and Library Services Department as one
department. It allowed all existing members of the Library Board in good standing to continue to
serve in their current terms until they sunset. This resulted in current membership of 9, instead of 7
direct appointees by individual City Council members.
The Citizen Infrastructure Advisory Board (CIAB), Public Works Commission, and the Beautification,
Landscape, and Trees (BLT) Committee were consolidated into one citizen-led body, CIAB/Public
Works Commission, to incorporate the scope of work for all three bodies and streamline any
duplicating efforts. With recent resignation of the former CIAB member, the CIAB/Public Works
Commission has now 7 members, appointed by each Councilmember. However, this ordinance
allows us to clean up and simplify the Municipal Code accordingly.
Per the City Council’s direction at the January 17, 2023 Council meeting, City staff worked with City
Attorney’s Office and prepared the Ordinance No. 4278 (Attachment 1), the Ordinance No. 4279
(Attachment 2), and the Ordinance No. 4281 (Attachment 3) to amend the HBMC Chapter 2.111,
Chapter 2.64, and Chapter 2.100.
The HBMC Chapter 2.100 establishes general operating policies for Boards and Commissions
including membership and service limitations. The Ordinance No. 4281 also codifies the City
Council’s direction to limit any board or commission with direct Council appointments to seven
members in the future.
With this amendment, the Community and Library Services Commission will solely consist of seven
members individually appointed by City Council, whose term coincides with the term of the
Councilmember making the appointment.
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Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. Ordinance No. 4278 and Legislative Draft
2. Ordinance No. 4279 and Legislative Draft
3. Ordinance No. 4281 and Legislative Draft
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-165 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Travis K. Hopkins, Assistant City Manager
PREPARED BY:Catherine Jun, Assistant to the City Manager
Subject:
Approve for Introduction Ordinance No. 4283 Adding Chapter 13.07 of the Huntington Beach
Municipal Code Relating to Government Flags on City Property
Statement of Issue:
At the February 7, 2023 Council meeting, the City Attorney was directed by City Council to return with
an ordinance adding a chapter in the Huntington Beach Municipal Code relating to government flags
on City property.
Financial Impact:
There is no fiscal impact to adopt this Ordinance.
Recommended Action:
Approve for introduction Ordinance No. 4283, “An Ordinance of the City of Huntington Beach
Amending Title 13 Public Property of the Huntington Beach Municipal Code Adding Chapter 13.07
Relating to Government Flags on City Property.”
Alternative Action(s):
Do not approve for introduction Ordinance No. 4283.
Analysis:
On February 7, 2023, the City Council directed the City Attorney to return with an ordinance related to
the City’s display of government flags on City property. City Council direction included limiting the
City’s display of flags on City property to the following governmental flags: United States, State of
California, City of Huntington Beach, and POW/MIA flags. The City would also be permitted to
display the County of Orange and the six branches of the military flags on City property, as needed
basis.
Proposed Ordinance No. 4283 would accomplish the direction provided above. Furthermore, it
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states that it does not limit the free speech of any individual or business by flying any flag they
choose on private or public property, so long as it is flown in accordance with existing laws.
If approved, a second reading of Ordinance No. 4283 would return to City Council on March 7, 2023
for adoption, and the ordinance would go into effect 30 days thereafter. At that time, the City would
also update Administrative Regulation 705 (Citywide Flag Policy) accordingly.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachment(s):
1. Ordinance No. 4283
2. Presentation Deck
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Government Flags on
City Property
Introduction of Ordinance No. 4283
Adding Chapter 13.07 to HBMC Title 13
February 21, 2023
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Background
At the February 7, 2023 City Council meeting, the City Attorney was
directed by City Council to return with an ordinance relating to the
display of government flags on City property.
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Proposed Ordinance 4283
•Per Council direction, proposed Ordinance No. 4283 would limit the
City’s display of flags on City property to the following governmental
flags: United States, State of California, City of Huntington Beach, and
POW/MIA flags.
•The City would also be permitted to display the flags of the County of
Orange and the six branches of the military on City property, as needed.
•This would not limit individuals or businesses from exercising their free
speech by flying any flag they choose on private or public property, so
long as the flying of the flag is consistent with all other laws.
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Recommendation
•Approve for Introduction Ordinance No. 4283, “An Ordinance of the City of
Huntington Beach Amending Title 13 Public Property of the Huntington
Beach Municipal Code Adding Chapter 13.07 Relating to Government
Flags on City Property.”
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-176 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Eric Parra, Chief of Police
PREPARED BY:Brian Smith, Lieutenant
Subject:
Approve for Introduction Ordinance No. 4284 Amending Municipal Code 13.52 Relating to
Public Conduct within City-Owned Public Parking Structures
Statement of Issue:
Proposed Ordinance No. 4284 to amend Municipal Code Section 13.52 would prohibit certain
conduct within the public parking structure that interfere with its intended use.
Financial Impact:
There is no anticipated financial impact due to the amendment of this Municipal Code.
Recommended Action:
Staff recommends City Council approve for introduction Ordinance No. 4284, “An Ordinance of the
City of Huntington Beach Amending Huntington Beach Municipal Code Chapter 13.52 Relating to
Public Buildings” regarding public conduct within City-owned public parking structures.
Alternative Action(s):
Do not approve, and direct staff accordingly. Please note that if the proposed Ordinance is not
adopted, the Huntington Beach Police Department will be limited in its ability to address quality of life
issues impacting the City's public parking structures.
Analysis:
The Main Promenade Parking Structure is a vital access point for the downtown business district.
However, in past years, the City has received complaints regarding quality of life issues interfering
with the public’s use of the parking structure and impacting local businesses, the adjacent
neighborhood, residents and visitors alike. To help ensure this public facility is utilized for its intended
purpose as public parking and access to public restroom facilities, this proposed Ordinance will
prohibit conduct including smoking, interfering with the use of public restrooms on site, throwing or
dropping items from the structure, speeding in excess of 10 mph, loitering, skateboarding, roller
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skating, riding scooters and bicycles. This Ordinance would also apply regulations that pertain to off-
street City pay parking lots and off-street City parking lots to the parking structure, and establish an
alternative remedy for those who violate the provisions of this.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Financial Sustainability, Public Safety or Other
Attachment(s):
1. Ordinance No. 4284
2. PowerPoint Presentation
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Public Buildings:
Main Promenade Parking Structure
Introduction of Ordinance No. 4284
Amending HBMC Chapter 13.52
February 21, 2023
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Background
The Main Promenade Parking Structure in the downtown business
district has been the site of various quality of life issues interfering with
the use of the parking structure and impacting local businesses, the
adjacent neighborhood, residents and visitors alike.
To help ensure this public facility is utilized only for its intended purpose
(public parking and access to public restroom facilities) a proposed
ordinance is recommended.
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Proposed Ordinance 4284
• Ordinance 4284 proposes amending Municipal Code Section 13.52, to
prohibit smoking, interfering with the use of public restrooms, throwing or
dropping items from the structure, speeding in excess of 10 mph,
loitering within the public parking structure, skateboarding, roller skating,
scooters, and bicycles.
• The Ordinance also applies regulations pertaining to off-street city pay
parking lots and off-street city parking lots to the parking structure and
establishes an alternative remedy for those who violate the provisions of
this chapter.
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Recommendation
• Approve for Introduction Ordinance No. 4284, “An Ordinance of the City of
Huntington Beach Amending Title 13 of Huntington Beach Municipal Code
relating to public buildings.”
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-177 MEETING DATE:2/21/2023
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO:Honorable Mayor and City Council Members
SUBMITTED BY:Al Zelinka, City Manager
VIA:Eric Parra, Chief of Police
PREPARED BY:Brian Smith, Lieutenant
Subject:
Approve for Introduction Ordinance No. 4273 Amending Municipal Code 13.48 Relating to the
Use of Tents and Other Uses Within City Parks
Statement of Issue:
Proposed Ordinance No. 4273 to amend Municipal Code Section 13.48 would prevent persons from
using unpermitted fully enclosed tents within a park, reduce parking lot obstructions and hazards, and
regulate the manner in which fires and barbeques can be maintained within parks.
Financial Impact:
There is no anticipated financial impact due to the amendment of this Municipal Code.
Recommended Action:
Staff recommends City Council approve the introduction of Ordinance 4273, “An Ordinance of the
City Council of the City of Huntington Beach Amending Title 13 of the Huntington Beach Municipal
Code Relating to Parking Lot and Camping Regulations in Public Parks, and Making a Finding of
Exemption Under CEQA” relating to the use of tents and other uses within City parks.
Alternative Action(s):
Do not approve and direct staff accordingly. If this proposed Ordinance is not adopted, it will limit the
Police Department’s ability to address the aforementioned issues in City parks.
Analysis:
Community concerns exist over the use of enclosed tents within parks, as they can conceal
prohibited acts, such as lewd conduct, drinking in public, and narcotics use. In reviewing existing
municipal codes, fully enclosed tents are permitted in parks but prohibited on the Beach and Adjacent
Beach Areas. This amendment would not prevent the public from utilizing canopies and tents to
protect themselves from the elements within our parks; rather, it would make park regulations
consistent with beach regulations by requiring at least two sides of an unpermitted tent to remain
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completely open to public view.
While barbeques and fires are explicitly regulated on our beaches for public safety, current codes do
not sufficiently address hazards created by open flames and heat sources in natural park settings.
The intent of this section is to permit the safe use of portable stoves, barbeques, and installed fire
rings in public parks, while reducing risks of personal injury burns and fire hazards, especially during
periods of extreme fire hazard.
Obstructions in parking lots can prevent the use of parking stalls, impacting access to our public park
facilities. Unless permitted by the Director of Community and Library Services or their designee, this
amendment would require vehicles to park within a single stall in no-fee parking lots, restrict the use
of stalls to only registered vehicles, prohibit personal property from being left unattended in parking
lots, and require head-in parking.
Environmental Status:
Pursuant to CEQA Guidelines Section 15378(b)(5), administrative activities of governments that will
not result in direct or indirect physical changes in the environment do not constitute a project.
Strategic Plan Goal:
Financial Sustainability, Public Safety or Other
Attachment(s):
1. Ordinance No. 4273
2. PowerPoint Presentation
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Park Regulations
Introduction of Ordinance No. 4273
Amending HBMC Chapter 13.48
February 21, 2023
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Background
Community and Library Services and Police Department staff have been
contacted by community members regarding activities impacting our
public parks.
While evaluating these community concerns, staff examined existing
regulations and recommended several changes to enhance public
safety, reduce hazards, protect the environment, and promote a safe
and welcoming parks system.
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Proposed Ordinance 4273
• Makes park regulations consistent with beach regulations requiring all unpermitted tents
to have at least 2 sides remain completely open to public view. This will prevent
prohibited acts (ie. lewd conduct, drinking in public or narcotics use) within parks.
• Permits the safe use of portable stoves, barbeques, and installed fire rings in public
parks, while reducing risks of personal injury burns and fire hazards, especially during
periods of extreme fire hazard. Similar regulations exist for beaches; this ordinance
would make them consistent for parks.
• Unless permitted by the Director of Community and Library services or their designee,
requires vehicles to park within a single stall in no-fee parking lots, prohibits personal
property from being unattended in lots and requires head-in parking to prevent
obstructions that can prevent the use of parking stalls and create hazards, impacting
access to our public park facilities.
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Recommendation
• Approve for Introduction Ordinance No. 4273, “An Ordinance of the City of
Huntington Beach Amending Title 13 of Huntington Beach Municipal Code
relating to parking lot and camping regulations in public parks, and making
a finding of exemption under CEQA.
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-172 MEETING DATE:2/21/2023
Subject:
Submitted by Councilmember Burns - SB 9 and SB 10 Impacts to Huntington Beach
Recommended Action:
Direct the City Attorney to take any legal action necessary to challenge SB 9 and SB 10 and the laws
that permit ADU’s. Also, direct the City Manager to cease the processing of all applications/permits
brought to the City by developers under SB 9, SB 10, or State law related ADU projects, until the
courts have adjudicated the matter(s).
Attachment(s):
1. Memo
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CITY OF HUNTINGTON BEACH
CITY COUNCIL MEETING – COUNCIL MEMBER ITEMS REPORT
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: PAT BURNS, CITY COUNCIL MEMBER
DATE: FEBRUARY 21, 2023
SUBJECT: SB 9 AND SB 10 IMPACTS TO HUNTINGTON BEACH
The State's housing laws in recent years have become incredibly onerous and burdensome to
cities, including fully developed cities like Huntington Beach. In 2021, the State passed SB 9 and
SB 10 and State laws expand the ability for development of ADU’s that circumvent local zoning
controls, all of which produce a proliferation of development and multi-unit housing in already
well-established single-family neighborhoods. The City has a duty to protect the quality and
lifestyle of the neighborhoods that current owners have already bought into and for the future
sustainability of Huntington Beach, the City has a duty to ensure the principles of Euclidean
Zoning, like project/development compatibility, etc., are honored and respected.
SB 9 and SB 10 and the State laws expanding ADU’s are designed to undermine local City zoning
authority (including in Charter Cities like Huntington Beach) by overriding local single family
neighborhood zoning and incentivizing property owners to redevelop their single family
residences into mutli-plex apartment-like developments (including for affordable
housing). Radical redevelopment in already-established residential neighborhoods is not only a
threat to quality and lifestyle, but to the value of the adjacent and neighboring properties. The
City should not be put in a position by the State through SB 9 and SB 10 or those State laws
expanding ADU’s that would allow the diminution of an owner's property value without just
compensation, and Huntington Beach should not have its Charter City zoning rights provided
for by the California Constitution trampled by the State.
RECOMMENDED ACTION
Direct the City Attorney to take any legal action necessary to challenge SB 9 and SB 10 and the
laws that permit ADU’s. Also, direct the City Manager to cease the processing of all
applications/permits brought to the City by developers under SB 9, SB 10, or State law related
ADU projects, until the courts have adjudicated the matter(s).
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City of Huntington Beach
2000 Main Street,
Huntington Beach, CA
92648
File #:23-184 MEETING DATE:2/21/2023
Subject:
Submitted by Mayor Strickland and Mayor Pro Tem Van Der Mark - Request to prepare a
Invocation Policy
Recommended Action:
Direct the City Manager to work with the City Attorney to return to the City Council with a Resolution
for a City Council policy for the constituting of a list of religious associates or leaders, maintaining that
list, evaluation of religious associates or leaders, and rotation system for religious leaders at City
Council meetings to offer an invocation. The City Attorney should ensure that whatever policy is
returned to Council for a vote is compatible with Constitutional principles of government
involved/restricted speech and exercise of religion. In doing so, modifications or adjustments to this
proposal are welcome from the City Attorney.
Attachment(s):
1. Memo
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CITY OF HUNTINGTON BEACH
CITY COUNCIL MEETING – COUNCIL MEMBER ITEMS REPORT
TO: CITY COUNCIL
FROM: TONY STRICKLAND, MAYOR
GRACEY VAN DER MARK, MAYOR PRO TEM
DATE: FEBRUARY 21, 2023
SUBJECT: REQUEST TO PREPARE AN INVOCATION POLICY
The City has nearly always allowed invocations by religious leaders at the beginning of each City
Council Meeting. This is a good and laudable practice and a good reminder to the City Council,
other City leadership, and the community of the important role of government and decision-
making. However, in very recent years, the Greater Huntington Beach Interfaith Council, which
the City has utilized for invocations, has become highly political and invocations at times have
become political soapboxing opportunities. The City should return the invocations to
opportunities for faith-based, and faith-focused speech - which is a specific, limited exercise of
particular speech. In doing so, the City should have an approved policy for the constituting of a
list of religious associates or leaders, maintaining that list, evaluation of religious associates or
leaders, and rotation system for religious leaders at City Council meetings to offer an invocation.
RECOMMENDED ACTION
Direct the City Manager to work with the City Attorney to return to the City Council with a
Resolution for a City Council policy for the constituting of a list of religious associates or leaders,
maintaining that list, evaluation of religious associates or leaders, and rotation system for
religious leaders at City Council meetings to offer an invocation. The City Attorney should ensure
that whatever policy is returned to Council for a vote is compatible with Constitutional principles
of government involved/restricted speech and exercise of religion. In doing so, modifications or
adjustments to this proposal are welcome from the City Attorney.
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