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2024-03-19 Agenda Packet
IN-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 Wednesday at 10:00 a.m. and Thursday at 6:00 p.m.); live and archived meetings for on-demand viewing accessed from https://huntingtonbeach.legistar.com/calendar , https://bit.ly/SurfCityTV, or the City's YouTube Channel at https://www.youtube.com/cityofhb , 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 in the City Council Chambers by completing a Request to Speak form delivered to the City Clerk. Sign-ups to Request to Speak will begin in person 30 minutes prior to the start of Study Session, Closed Session, or Regular City Council Meeting, whichever comes first. Sign-ups will be accepted until the commencement of the public comment period. SUPPLEMENTAL COMMUNICATION: 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 to the Council via email at SupplementalComm@Surfcity-hb.org . Supplemental Communications are public record, and if received by 9:00 AM 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 after the 9:00 AM deadline will be incorporated into the administrative record. Members of the public are also welcome to communicate with the City Council (and staff supporting Council) at City.Council@surfcity-hb.org . 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 Tuesday, March 19, 2024 3:30 PM Study/Closed Session 6:00 PM Regular Meeting Council Chambers 2000 Main Street Huntington Beach, CA 92648 MAYOR AND CITY COUNCIL GRACEY VAN DER MARK, Mayor PAT BURNS, Mayor Pro Tem RHONDA BOLTON, Councilmember DAN KALMICK, Councilmember CASEY McKEON, Councilmember NATALIE MOSER, Councilmember TONY STRICKLAND, Councilmember STAFF ERIC G. PARRA, Interim City Manager MICHAEL E. GATES, City Attorney ROBIN ESTANISLAU, City Clerk ALISA BACKSTROM, City Treasurer 1 AGENDA March 19, 2024City Council/Public Financing Authority 3:30 PM - COUNCIL CHAMBERS CALL TO ORDER ROLL CALL Moser, Bolton, Burns, Van Der Mark, Strickland, McKeon, Kalmick CITY COUNCIL MEMBER 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 PERTAINING TO STUDY AND/OR CLOSED SESSION ITEMS (Received After Agenda Distribution) PUBLIC COMMENTS PERTAINING TO STUDY AND/OR CLOSED SESSION ITEMS (Received After Agenda Distribution)(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 24-1411.Joint Study Session of the Citizen Participation Advisory Board (CPAB) and City Council to review funding recommendations for the Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) programs for 2024-25 CPAB Roll Call: Chair Jackson, Vice Chair Paris, Secretary Hammel; Board Members Hoskinson, Inouye, and Lachman 24-1852.Short-Term Rental (STR) Program Update RECESS TO CLOSED SESSION Page 1 of 8 2 AGENDA March 19, 2024City Council/Public Financing Authority CLOSED SESSION 24-1993.CONFERENCE WITH REAL PROPERTY NEGOTIATORS Property: 21 & 22 Main Street, Huntington Beach, CA 92648. City Negotiators: Eric Parra, Acting City Manager; Travis Hopkins, Assistant City Manager; Kriss Casanova, Economic Development Manager; Steve Holtz, Deputy Director of Community Development; Jennifer Villasenor, Director of Community Development. Negotiating parties: Persons to be negotiated with: (Not Present) Surf City Partners, LLC. Under negotiation: Price and terms of payment. 24-1794.CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision (d) of Section 54956.9). People of the State of California/Bonta v. City of Huntington Beach/Zelinka; Case No. 30-2023-01312235-CU-WM-CJC. 24-2005.CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision (d) of Section 54956.9). Pacific Airshow, LLC v. City of Huntington Beach and Kim Carr; OCSC Case No. 30-2022-01287749. 24-2016.CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision (d) of Section 54956.9). Clayton-Tarvin (Gina) v. City of Huntington Beach, Michael Gates, et al.; OCSC Case No.: 30-2023-01329927 24-2077.CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision (d) of Section 54956.9). Timothy Emanuel v. City of Huntington; Worker’s Compensation No. COHB-22-0241. 6:00 PM – COUNCIL CHAMBERS RECONVENE CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING ROLL CALL Moser, Bolton, Burns, Van Der Mark, Strickland, McKeon, Kalmick PLEDGE OF ALLEGIANCE Page 2 of 8 3 AGENDA March 19, 2024City Council/Public Financing Authority 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. 24-1968.Huntington Beach Police Chaplain James Pike CLOSED SESSION REPORT BY CITY ATTORNEY AWARDS AND PRESENTATIONS 24-1919.Automobile Club of Southern California (AAA) and California Highway Patrol (CHP) to present Auto Theft Recovery Award to Huntington Beach Police Officer K. Ladjimi 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 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. 24-20410.Approve amendment to Mayor Van Der Mark’s 2024 Council Liaison Page 3 of 8 4 AGENDA March 19, 2024City Council/Public Financing Authority List - March 2024 As recommended by the City Council, Public Financing Authority, Housing Authority, Parking Authority, and Successor Agency: approve amendment to the 2024 Council Liaison List that includes appointments to citizen boards, commissions, committees, and task forces as presented by Mayor Van Der Mark. Recommended Action: 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 CONSENT CALENDAR (Items 11 - 21) City Clerk 24-18211.Approve and Adopt Minutes Approve and adopt the City Council/Public Financing Authority regular meeting minutes of February 20, 2024. Recommended Action: 24-18312.Monthly Update of Activities for Citizen Boards, Commissions, Committees (BCCs) and Regional Agencies - February 2024 Receive and File. Recommended Action: City Manager 24-18013.Consider position on legislation pending before the State Legislature, as recommended by the Intergovernmental Relations Committee (IRC) A) SUPPORT AB 1999 (Irwin) Electricity: fixed charges, and send a letter of support. Recommended Action: Page 4 of 8 5 AGENDA March 19, 2024City Council/Public Financing Authority B) Receive and file letters of support for AB 1773 (Dixon) e-bikes and AB 1174 (Dixon) e-bikes. Community and Library Services 24-18814.Approve and execute a three-year Professional Services Contract between the City of Huntington Beach and PSQ Productions for production and management service of the annual Independence Day Celebration Approve and authorize the Mayor and City Clerk to execute “Professional Services Contract Between the City of Huntington Beach and PSQ Productions for Production and Management Service of the Annual Independence Day Parade.” Recommended Action: 24-19415.Adopt Resolution No. 2024-08 revising and restating Resolution No. 2016-01 related to implementing Charter Section 805 and Municipal Code Chapter 5.90 regarding the number of permits issued for Safe and Sane Fireworks from fifteen (15) to sixteen (16) Adopt Resolution No. 2024-08, “A Resolution of the City Council of the City of Huntington Beach revising and restating Resolution No. 2016-01 related to implementing Charter Section 805 and Municipal Code Chapter 5.90 regarding safe and sane fireworks.” Recommended Action: Human Resources 24-16016.Approve a Professional Services Contract with Carl Warren & Company for Liability Claims Administration Services Approve and authorize the Mayor and City Clerk to execute the agreement, “Professional Services Contract between the City of Huntington Beach and Carl Warren & Company Liability Claim Investigation and Processing” in the amount of $750,000 for three (3) years, and delegate authority to the City Manager to execute any extensions thereto. Recommended Action: Police 24-19217.Approve Amendment No. 2 authorizing a one-year contract extension with Universal Protection Services, LP, DBA Allied Universal Security Services (UASS) for street sweeping parking enforcement services Approve and authorize “Amendment No. 2 to Service Agreement between the City of Huntington Beach and Universal Protection Services, LP DBA Allied Universal Security Recommended Action: Page 5 of 8 6 AGENDA March 19, 2024City Council/Public Financing Authority Services (UASS) for Street Sweeping Enforcement Services” not to exceed $411,269.45 for the next calendar year; and authorize the Mayor and City Clerk to execute the attached contract. Public Works 24-11118.Approve and authorize execution of a Cooperative Agreement with Orange County Transportation Authority (OCTA) for Alternative Signal Communication Demonstration Project Approve and authorize the Mayor and City Clerk to execute “Cooperative Agreement No. C-3-3058 Between Orange County Transportation Authority and Cities of Huntington Beach, La Habra, Lake Forest, Newport Beach, Rancho Santa Margarita, Seal Beach, and Yorba Linda for Alternative Signal Communication Demonstration Project”. Recommended Action: 24-12919.Approve and Accept the Public Improvements, Release the Securities for, and Accept a Guarantee and Warranty Bond for Tract 18105 A) Accept the improvements constructed and dedicated for public use with Tract 18105, and instruct the City Clerk to record the Notice of Acceptance of Public Improvements (Attachment 2) with the Orange County Recorder; and, B) Accept Guarantee and Warranty Bond No. 30190069 (Attachment 3); the security furnished for guarantee and warranty of public improvements, and instruct the City Clerk to file the bond with the City Treasurer; and, C) Instruct the City Clerk to notify the developer, Meritage Homes of California, of this action, and the City Treasurer to notify the Surety, Arch Insurance Company (Faithful Performance, Labor & Materials, Monument) and The Continental Insurance Company (Guarantee & Warranty), of this action. Recommended Action: 24-13420.Approve and Accept the Public Improvements, Release the Securities for, and Accept a Guarantee and Warranty Bond for Tract 18106 A) Accept the improvements constructed and dedicated for public use with Tract 18106, and instruct the City Clerk to record the Notice of Acceptance of Public Improvements (Attachment 2) with the Orange County Recorder; and, B) Accept Guarantee and Warranty Bond No. 30190068 (Attachment 3); the security furnished for guarantee and warranty of public improvements, and instruct the City Clerk to file the bond with the City Treasurer; and, Recommended Action: Page 6 of 8 7 AGENDA March 19, 2024City Council/Public Financing Authority C) Instruct the City Clerk to notify the developer, Meritage Homes of California, of this action, and the City Treasurer to notify the Surety, Arch Insurance Company (Faithful Performance, Labor & Materials, Monument) and The Continental Insurance Company (Guarantee & Warranty), of this action. 24-13621.Approve the West Orange County Water Board (WOCWB) FY 2024-25 Budget in the amount of $5,365,300 Approve the WOCWB proposed FY 2024 -25 Budget and the City of Huntington Beach proportional share of $1,047,465. Recommended Action: ADMINISTRATIVE ITEMS 24-19722.Request authorization to issue a Request for Proposals for Managed Library Services for the Huntington Beach Public Library system A) Authorize staff to issue a Request for Proposals for Managed Library Services for the Huntington Beach Public Library system and return to City Council with an agreement for consideration; and B) Direct staff to begin a meet and confer process with affected labor associations to discuss this potential opportunity. Recommended Action: 24-19523.Year-End Audit Results for the FY 2022/23 Annual Comprehensive Financial Report (ACFR), Fiscal Year 2023/24 Budget Update, and Fiscal Year 2023/24 Mid-Year Budget Adjustments A) Receive and File the FY 2022/23 Annual Comprehensive Financial Report and other auditor-issued reports; and, B) Approve mid-year budget adjustments to the FY 2023/24 Revised Budget in the funds and by the amounts contained in Attachment 3. Recommended Action: ORDINANCES FOR INTRODUCTION 24-20924.Approve for introduction Ordinance No. 4318 adding Chapter 2.66 to the Huntington Beach Municipal Code Relating to the Community-Parent Guardian Review Board for Review of Procurement of Children’s Library Material Approve for introduction Ordinance No. 4318, “An Ordinance of the City Council of the City Recommended Action: Page 7 of 8 8 AGENDA March 19, 2024City Council/Public Financing Authority of Huntington Beach amending the Huntington Beach Municipal Code by adding new chapter 2.66 Entitled “Community Parent-Guardian Review Board for Procurement of Children’s Library Materials.”” COUNCIL MEMBER ITEMS 24-20825.Item Submitted by Council Member McKeon - Withdrawal from the League of California Cities Request the City Manager to direct staff to negotiate with the League of California Cities for the reimbursement of 2024 dues and withdraw membership for 2024. Recommended Action: ADJOURNMENT The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is Tuesday, April 2, 2024, in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov Page 8 of 8 9 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-141 MEETING DATE:3/19/2024 Joint Study Session of the Citizen Participation Advisory Board (CPAB) and City Council to review funding recommendations for the Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) programs for 2024-25 CPAB Roll Call: Chair Jackson, Vice Chair Paris, Secretary Hammel; Board Members Hoskinson, Inouye, and Lachman City of Huntington Beach Printed on 3/13/2024Page 1 of 1 powered by Legistar™10 Joint Study Session of the City Council and Citizen Participation Advisory Board Review 2024-25 CDBG & HOME Funding Recommendations March 19, 2024 11 c::(]Bb COMMUNITY DEVELOPMENT BLOCK GRANT Background The U.S. Department of Housing and Urban Development (HUD) provides annual entitlement grants to the City: • Community Development Block Grant (CDBG) • HOME Investment Partnerships (HOME) 12 COMMUNITY DEVELOPMENT BLOCK GRANT 2024-25 Estimated Funding Levels CDBG HOME TOTAL Public Services $175,750 N/A $175,750 Capital & Housing Preservation Projects $856,175 $1,168,894 $2,025,069 Administration $234,334 $66,837 $301,171 Total $1,266,259 $1,235,731 $2,501,990 13 COMMUNITY DEVELOPMENT BLOCK GRANT Schedule October NOFA for CDBG Public Services Applications released to the public December CDBG Public Services Applications due; staff reviews all applications for eligibility February CPAB reviews applications, hears presentations from applicants, determines funding recommendations for the City Council March Joint City Council / CPAB study session to review funding recommendations May City Council approves Action Plan with funding allocations Mid-May Action Plan due to HUD July New Program Year begins 14 COMMUNITY DEVELOPMENT BLOCK GRANT Public Participation • HUD requires public participation in funding allocation process • City issues Notice of Funding Availability (NOFA) • Citizen Participation Advisory Board (CPAB) conducts three public meetings to review CDBG public services applications and make funding recommendations to the City Council • City Council and CPAB hold a joint study session to review funding recommendations • City Council holds a public hearing to approve funding allocations 15 COMMUNITY DEVELOPMENT BLOCK GRANT CDBG Objectives The purpose of the CDBG program is to: • Create and maintain decent housing • Create and maintain suitable living environments • Expand economic opportunities All CDBG activities are required to meet one of three national objectives: • Benefit low and moderate-income residents • Aid in the prevention or elimination of slums or blight • Address an urgent unforeseen emergency 16 COMMUNITY DEVELOPMENT BLOCK GRANT CDBG Local Priority Objectives All CDBG activities must address a local priority objective: • Housing • Homelessness • Special Needs (seniors, veterans, mental illness, substance abuse, illiterate persons) • Youth and family services • Community and public facilities • Infrastructure improvements 17 COMMUNITY DEVELOPMENT BLOCK GRANT CDBG Allocations 15% Public Services 20% Administration 65% Capital & Housing Preservation Projects 18 COMMUNITY DEVELOPMENT BLOCK GRANT CDBG Public Services $175,750 Available to Allocate Requested Funding Funding Recommendation Boys & Girls Club (Children’s Bureau)$85,000 $65,250 Project Hope Alliance $50,000 $37,500 Robyne’s Nest $75,000 $50,000 StandUp for Kids OC $35,337 $23,000 TOTAL $245,337 $175,750 Remaining Funds to Allocate = $0 19 COMMUNITY DEVELOPMENT BLOCK GRANT CDBG Administration $234,334 Available to Allocate Requested Funding Funding Recommendation CDBG Administration $234,334 $234,334 TOTAL $234,334 $234,334 Remaining Funds to Allocate = $0 20 COMMUNITY DEVELOPMENT BLOCK GRANT CDBG CAPITAL & HOUSING PRESERVATION PROJECTS $856,175 Available to Allocate Requested Funding Funding Recommendation TBRA Program Administration $211,656 $211,656 Special Code Enforcement $232,519 $232,519 Housing Rehabilitation Loan Program $287,000 $287,000 ADA Curb Cuts/Ramps – Zone 4 $125,000 $125,000 TOTAL $856,175 $856,175 Remaining Funds to Allocate = $0 21 COMMUNITY DEVELOPMENT BLOCK GRANT HOME Program Objectives Eligible Activities: • Housing Rehabilitation • Homebuyer Assistance • Rental Housing Assistance • Tenant Based Rental Assistance (TBRA) 22 COMMUNITY DEVELOPMENT BLOCK GRANT HOME Local Priority Objectives All HOME activities must address a local priority objective: • Preserve existing affordable housing • Create new affordable housing • Tenant Based Rental Assistance (TBRA) 23 COMMUNITY DEVELOPMENT BLOCK GRANT HOME Allocations 15% CHDO Projects 10% Administration 75% Capital & Housing Preservation Projects 24 COMMUNITY DEVELOPMENT BLOCK GRANT $1,235,731 Available to Allocate Requested Funding Funding Recommendation Families Forward TBRA $200,000 $200,000 Mercy House TBRA $200,000 $200,000 Senior Mobile Home TBRA $466,901 $466,901 CHDO Reserve $301,993 $301,993 HOME Administration $66,837 $66,837 TOTAL $1,235,731 $1,235,731 Remaining Funds to Allocate = $0 HOME Allocations 25 COMMUNITY DEVELOPMENT BLOCK GRANT $172,193 Available to Allocate Requested Funding Funding Recommendation Salaries $60,000 $60,000 Fair Housing Foundation $35,000 $35,000 2025-29 Consolidated Plan $60,000 $60,000 2025-29 AI to Fair Housing $17,193 $17,193 TOTAL $172,193 $172,193 Remaining Funds to Allocate = $0 Available HOME Admin 26 COMMUNITY DEVELOPMENT BLOCK GRANT Mobile Home TBRA Update • Program Approved by City Council in November 2022 • Interest List Opened in January 2023 (131 Applicants) • 52 Active Participants (Goal was 30 Participants) • Currently Allocated $937,931 in Federal HOME Funds or $692 Average Monthly Rental Assistance Per Household • Approximately 30 Applicants Remaining on Waiting List • Estimated $466,903 Proposed for FY 2024-25 (HOME Funds) • May Re-Open Interest List in Summer 2024 27 COMMUNITY DEVELOPMENT BLOCK GRANT City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-185 MEETING DATE:3/19/2024 Short-Term Rental (STR) Program Update City of Huntington Beach Printed on 3/13/2024Page 1 of 1 powered by Legistar™28 Short Term Rental Program Update Study Session March 19, 2024 29 Background •September 3, 2019 – City Council Study Session on short-term rentals (STRs) • Four coastal cities studied (Carlsbad, Carpinteria, Newport Beach, and Pismo Beach), as well as the range of approaches in regulating short-term rentals in the coastal zone • Council expressed a desire for a high threshold type of regulation •December 21, 2020 – City Council approved ordinance to permit “hosted STRs” citywide and “hosted and unhosted STRs” in Sunset Beach only 30 Background (cont.) •February 19, 2021 - Ordinance No. 4224 regulating STRs went into effect • Sunset Beach operators given 6 months from permit fee adoption to apply for an STR permit and secure their “unhosted” rights. • One STR permit allowed per operator • Regulatory framework includes permit application requirements, STR operational requirements and enforcement provisions •Summer 2021 – City Council Ad Hoc Committee created to gather additional community input on STRs. •December 2, 2021 – Ordinance No. 4238 approved, extending time to allow Sunset Beach owners to obtain an Unhosted STR Permit by March 1, 2022. •After March 1, 2022, all new STR Permits required to be hosted. 31 Roles & Responsibilities •Community Development • Permit Center reviews STR applications; issues STR Permits •Code Enforcement inspects each property to ensure compliance with STR ordinance •Finance • Issues Business License for Operators after an STR Permit is issued •City Treasurer’s Office • Collects and reports Transient Occupancy Taxes (TOT) and Tourism Business Improvement Di strict (TBID) Assessments gathered from Operators. 32 Hosted & Unhosted STR Permits (by calendar year) 45 120 150 23 54 54 0 50 100 150 200 250 2021 2022 2023 Hosted Unhosted 68 Total 174 Total 204 Total 33 ■ ■ Permitted Short-Term Rentals •Approx. 38% are located within the Coastal Zone •Approx. 58% are located within Coastal Zone and adjacent RMH-A (Old Town/Town Lot) areas 34 0 Permitted Short Term Rental s City of Hunting ton Beach STR Revenue UNHOSTED Revenue HOSTED Revenue Total Revenue TBID Assessment 4% (to VHB) $253,313 $484,330 $737,644 TOT Tax 10% (to General Fund) $649,526 $1,251,427 $1,900,953 Total STR Revenue $902,839 $1,735,757 $2,638,596 TBID & TOT Received from STR Operators April 2021 – December 2023 35 City STR TOT Revenue By Calendar Year Apr - Dec 36 $720,000 $620,000 $520,000 $420,000 $320,000 $220,000 $UO,OOO $20,000 $36,827 $63,640 2021 $698,344 $516,256 $287,570 2022 2023 ■ Hosted ■ Unhosted Unpermitted STRs 343 476 286 195 139 192 177 265 152 219 175 135 0 50 100 150 200 250 300 350 400 450 500 Number of Properties without STR Permits in 2022 & 2023 January 2022 to December 2023 City contracts with 3rd party vendor GovOS to obtain unpermitted STR data 37 STR Complaints Against Permit Holders 140 40 98 25 0 20 40 60 80 100 120 140 160 Hosted Unhosted 2022 2023 38 ■ ■ Complaint Categories Citywide Complaints HOSTED Confirmed Violations/ Addresses* UNHOSTED Confirmed Violations/ Addresses* Total Confirmed Violations/ Addresses % of Total Permits No Owner On-Site 105 49 (36 Addresses)N/A 49 (36 Addresses)24% Noise 92 30 (19 Addresses) 19 (3 Addresses) 49 (22 Addresses)24% Maintenance 28 14 (12 Addresses) 2 (2 Addresses) 16 (14 Addresses)8% Occupancy 16 4 (4 Addresses) 2 (2 Addresses) 6 (6 Addresses)3% Construction 29 6 (6 Addresses) 4 (3 Addresses) 10 (9 Addresses)5% Parking 31 11 (10 Addresses) 2 (2 Addresses) 13 (12 Addresses)6% Trash 13 4 (4 Addresses)0 4 (4 Addresses)2% Other 46 8 (8 Addresses) 1 (1 Address) 9 (9 Addresses)4% STR Data 4/1/2021 - 12/31/2023 Complaint Detail *Multiple Violations at Same Address 39 Total of $125,000 in Administrative Citations issued for violations Hosted: -11 properties cited for No Owner On-Site - 2 properties cited for Not Responding Within 1 Hour - 2 Properties cited for Causing Disturbance Unhosted: No citations issued 27 Permits cancelled by owner 1 Permit for HOSTED was revoked by the City STR violations can be reported 24/7 at 714-375-5155, option “3” Enforcement 40 STR permits are issued Citywide with higher concentration in Sunset Beach and near Downtown 204 STR permits (December ‘23) Both hosted and unhosted STRs are generating revenue to City ($985,914 TOT collected in 2023) Unpermitted STRs have declined from 867 (in 2020) to 135 (in 2023) Complaints related to noise and no owner on site generate highest number of complaints Complaints have declined from 180 (in 2022) to 123 (in 2023) Summary 41 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-199 MEETING DATE:3/19/2024 CONFERENCE WITH REAL PROPERTY NEGOTIATORS Property: 21 & 22 Main Street, Huntington Beach, CA 92648. City Negotiators: Eric Parra, Acting City Manager; Travis Hopkins, Assistant City Manager; Kriss Casanova, Economic Development Manager; Steve Holtz, Deputy Director of Community Development; Jennifer Villasenor, Director of Community Development. Negotiating parties: Persons to be negotiated with: (Not Present) Surf City Partners, LLC. Under negotiation: Price and terms of payment. City of Huntington Beach Printed on 3/13/2024Page 1 of 1 powered by Legistar™42 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-179 MEETING DATE:3/19/2024 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision (d) of Section 54956.9). People of the State of California/Bonta v. City of Huntington Beach/Zelinka; Case No. 30-2023-01312235-CU-WM-CJC. City of Huntington Beach Printed on 3/13/2024Page 1 of 1 powered by Legistar™43 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-200 MEETING DATE:3/19/2024 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision (d) of Section 54956.9). Pacific Airshow, LLC v. City of Huntington Beach and Kim Carr; OCSC Case No. 30-2022-01287749. City of Huntington Beach Printed on 3/13/2024Page 1 of 1 powered by Legistar™44 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-201 MEETING DATE:3/19/2024 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision (d) of Section 54956.9). Clayton-Tarvin (Gina) v. City of Huntington Beach, Michael Gates, et al.; OCSC Case No.: 30-2023-01329927 City of Huntington Beach Printed on 3/13/2024Page 1 of 1 powered by Legistar™45 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-207 MEETING DATE:3/19/2024 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision (d) of Section 54956.9). Timothy Emanuel v. City of Huntington; Worker’s Compensation No. COHB-22-0241. City of Huntington Beach Printed on 3/13/2024Page 1 of 1 powered by Legistar™46 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-196 MEETING DATE:3/19/2024 Huntington Beach Police Chaplain James Pike City of Huntington Beach Printed on 3/13/2024Page 1 of 1 powered by Legistar™47 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-191 MEETING DATE:3/19/2024 Automobile Club of Southern California (AAA) and California Highway Patrol (CHP) to present Auto Theft Recovery Award to Huntington Beach Police Officer K. Ladjimi City of Huntington Beach Printed on 3/13/2024Page 1 of 1 powered by Legistar™48 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-204 MEETING DATE:3/19/2024 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 amendment to Mayor Van Der Mark’s 2024 Council Liaison List - March 2024 Statement of Issue: The City Council is being asked to approve Mayor Van Der Mark’s proposed amendment to the 2024 Council Liaison List. Financial Impact: Not Applicable Recommended Action: As recommended by the City Council, Public Financing Authority, Housing Authority, Parking Authority, and Successor Agency: approve amendment to the 2024 Council Liaison List that includes appointments to citizen boards, commissions, committees, and task forces as presented by Mayor Van Der Mark. Alternative Action(s): Do not approve the recommended action, and direct staff accordingly. Analysis: Proposed amendment to the 2024 Council Liaison List includes: 1. Page 1 - Addition of the newly formed City Celebration Committee 2. Reappointment of Council Member McKeon to Southern California Association of Government’s (SCAG) Regional Council (RC) District 64. The term of office shall be after the adjournment of the SCAG General Assembly from May 2, 2024 through the May 7, 2026 SCAG General Assembly. Environmental Status: Not Applicable. Strategic Plan Goal: City of Huntington Beach Printed on 3/13/2024Page 1 of 2 powered by Legistar™49 File #:24-204 MEETING DATE:3/19/2024 Non-Applicable - Administrative Item Attachment(s): 1. 2024 Council Liaison List - Revised March 2024 City of Huntington Beach Printed on 3/13/2024Page 2 of 2 powered by Legistar™50 CITY OF HUNTINGTON BEACH 2024 Council Liaison List Updated March 2024 Page 1 of 6 CITIZEN BOARDS, COMMISSIONS AND COMMITTEES (Appointed by City Council to Four-Year Terms) Citizen-led Legislative Bodies Council Liaisons Meeting Date/Place* Staffing Department 1. City Celebration Committee McKeon, Strickland TBD City Manager 2. Design Review Board (DRB) Van Der Mark, Burns 2nd Thurs. Monthly, 3:30 PM Civic Center, Lower Level, B-8 Community Development 3. Harbor Commission Van Der Mark, Burns 4th Thurs. Monthly, 5:00 PM Civic Center, Lower Level B-8 Fire 4. Historic Resources Board Van Der Mark, Burns 3rd Wed. Monthly, 5:00 PM Civic Center, Lower Level B-7 Community & Library Services 5. Personnel Commission** Van Der Mark, Burns 3rd Wed. Quarterly, 5:30 PM (Jan., April, July, Oct.) Civic Center, Lower Level B-8 Human Resources 6. Independence Day Board Van Der Mark, McKeon 1st Wed. Monthly, 6:00 PM Civic Center, Lower Level B-8 Community & Library Services 7. Citizen Infrastructure Advisory Board / Public Works Commission Individual Appointments 3rd Wed. Monthly, 5:00 PM Utilities Yard, 19021 Huntington St Public Works 8. Citizen Participation Advisory Board (CPAB) Individual Appointments 1st Thurs. Monthly from Jan.- June and as needed, 6:00 PM Civic Center, Lower Level B-8 Community Development 9. Community & Library Services Commission Individual Appointments 2nd Wed. Monthly, 6:00 PM Civic Center Council Chambers Community & Library Services 10. Finance Commission Individual Appointments 4th Wed. Monthly, 5:00 PM Civic Center, Council Chambers Finance 11. Investment Advisory Board Individual Appointments 3rd Thur. Quarterly (Jan., April, July, Oct.), 6:00 PM Civic Center, B7/B8 City Treasurer 51 City of Huntington Beach 2024 Council Liaison List – Updated 03/12/2024 Page 2 of 6 12. Planning Commission Individual Appointments 2nd & 4th Tues. Monthly, 6:00 PM Civic Center, Council Chambers Community Development 13. Sunset Beach Local Coastal Program Review Board*** N/A 2nd Tues. Monthly, 7:30 PM Nobles Family Community Center Community Development 14. ╫ Supplemental Employee Retirement Plan and Trust Board City Manager, Director of Finance/CFO, and City Treasurer Quarterly or as needed City Treasurer 15. ╫ Zoning Administrator Senior-level or higher City staff planner appointed by Director of Community Development 1st and 3rd Wednesday of every month, 1:30PM Community Development ╫ Staff only; Council Liaisons not assigned COUNCIL COMMITTEES (STANDING) (Created by City Council Action, consisting of three Council members; subject to the Brown Act) Council Committee Committee Members Meeting Date/Place* Staffing Department 1. Communications Committee Strickland, Van Der Mark, Burns 4th Tues. Monthly, 3:30 PM, Civic Center, 4th Floor, CR #2 City Manager’s Office 2. Economic Development Committee (EDC) Van Der Mark, Burns, Strickland (Mayor, Mayor Pro Tem, Immediate Past Mayor – prescribed) 2nd Wed. Every Other Month, 3:30 PM Civic Center, Lower Level B-8 Community Development 3. Intergovernmental Relations Committee (IRC) Van Der Mark, Burns, Strickland 3rd Wed. Monthly, 4:00 PM Civic Center, 4th Floor, CR #2 City Manager’s Office 4. Southeast Area Committee Van Der Mark, McKeon, Strickland 4th Wed. Every two month (Jan. March, May, July, September, Nov.), 4:30 PM Civic Center, Lower Level Room B-8 City Manager’s Office 5. Sunset Beach Area Committee Strickland, Van Der Mark, Burns As needed Civic Center, Lower Level Room B-8 Community Development 6. Specific Events Executive Committee Strickland, Van Der Mark, Burns As needed Civic Center, 4th Floor, CR #2 Community & Library Services *Meeting Date/Place is subject to change. ** 2-year term ***The primary structure of the Sunset Beach Local Coastal Program Review Board remains the same after the annexation. The Board is comprised of seven members initially appointed by the OC Board of Supervisors and subsequent members elected by the Review Board itself. 52 City of Huntington Beach 2024 Council Liaison List – Updated 03/12/2024 Page 3 of 6 COUNCIL COMMITTEES (AD-HOC) (Created by City Council Action; not subject to the Brown Act) Council Committee Committee Members Meeting Date/Place* Staffing Department 1. Downtown and Beach Front Ad-hoc Council Committee Strickland, Van Der Mark As Needed Community Development OTHER CITY AND CITIZEN COMMITTEES (Community/Stakeholders Meetings w/ Roundtable format hosted by the City; not subject to the Brown Act) Citizen Group Council Liaisons Meeting Date/Place* Staffing Department 1. Homeless Task Force Van Der Mark, Burns, McKeon 3rd Wed. Monthly, 3:00 p.m. Civic Center, Lower Level B-7 Police Department 2. Huntington Central Park Collaborative Bolton, Moser Last Tuesday of the Month, 2:00 PM Civic Center, Lower Level B-8 Community & Library Services 3. Oak View Community Meetings Van Der Mark, Burns, McKeon As needed Oak View Elementary School Community & Library Services 4. School District / City Van Der Mark, Burns 3rd Mon. Quarterly, 3:30 PM Civic Center, Lower Level B-8 City Manager’s Office 53 I I City of Huntington Beach 2024 Council Liaison List – Updated 03/12/2024 Page 4 of 6 COMMUNITY GROUPS/ INDEPENDENT CITY-AFFILIATED BOARDS (Community groups both local and regional requiring participation by one or two Council Members; Citizen Members are not appointees) Citizen Group Council Liaisons Meeting Date/Place* Staffing Department 1. Huntington Beach Council on Aging Bolton, Moser 1st Thurs. Monthly, 9:00 AM Senior Center (EMG, Room 1) Community & Library Services 2. Huntington Beach Downtown Business Improvement District (Downtown BID)† Strickland, Van Der Mark 2nd Thurs. Monthly, 9:00 AM Huntington Beach Art Center Community Development 3. Neighborhood Watch Van Der Mark, Burns 2nd Tues. Monthly, 6:00 PM (No meeting in July, Aug, Dec) Police Dept, 1st Fl. Conf. Room Police Department 4. Sister City Association Van Der Mark, Burns 2nd Wed. Monthly, 6:00 PM Central Library (Room TBA) Community & Library Services 5. West O.C. Water Board (WOCWB)† $100 per quarterly meeting Burns, Van Der Mark McKeon (Alternate) 3rd Wed. Quarterly, 4:00 PM (January, April, July and October) Utilities Operations Building 19001 Huntington St. Public Works † Brown Act Applicable COMMUNITY & REGIONAL AGENCIES AND COMMITTEES (Appointed by Mayor) Name of Agency/Committee Appointee Meeting Date/ Place* 1. Association of California Cities – Orange County (ACCOC) Van Der Mark As needed. 2. California Coastal Coalition (CalCoast) Board Van Der Mark, Burns 2-3 meetings/year, location varies 3. Huntington Beach Chamber of Commerce Government Affairs Committee Strickland, Van Der Mark Quarterly, meeting time varies Golden West College 15744 Golden West St. Admin Bldg. 4-Room137 4. O.C. Council of Governments (OCCOG) McKeon (Burns as alternate) 4th Thurs. Monthly, 10:30 AM Irvine Civic Center, City Council Chambers 1 Civic Center Plaza, Irvine 5. Orange County Mosquito and Vector Control District $100 per monthly meeting Term: Two (2) years Burns 3rd Thurs., Monthly, 3:00 PM OC Mosquito and Vector Control District Headquarter 13001 Garden Grove Blvd., Garden Grove, CA 92843 54 City of Huntington Beach 2024 Council Liaison List – Updated 03/12/2024 Page 5 of 6 6. Orange County Power Authority (OCPA) Term: Four (4) years $212.50 per meeting (limited to a maximum of 6 meetings per month) McKeon; Strickland (Alternate) 2nd Tues. Monthly, 10:00 AM, Virtual Meeting via Zoom 7. O.C. Sanitation District (OCSAN) Board of Directors (Plus Committee assigned by Chair) $212.50 per meeting Burns; Van Der Mark (Alternate) 4th Wed. Monthly, 6:00 PM Virtual Meeting via Zoom / OCSD Administrative Office, 10844 Ellis Ave., Fountain Valley, CA 8. Santa Ana River Flood Protection Agency (SARFPA) Burns; Van Der Mark (Alternate) Executive Committee Meetings: 4th Thurs, 4:00 PM January, March, May, July, September Full Agency Meetings: June, November Via Zoom 9. Southern California Association of Governments (SCAG) Regional Council District 64 Delegate Term: Two (2) years /$150 per meeting McKeon (Burns as alternate) 1st Thurs. Monthly, 9:00 AM – 2:00 PM Virtual Meeting / SCAG Office, Downtown L.A. 10. Visit Huntington Beach Advocacy Committee Strickland; Van Der Mark (Alternate) Monthly, usually Tuesday at 3:30 PM but varies. VHB Office / Zoom 155 Fifth Street, Suite 111, Huntington Beach APPOINTMENTS BY STATE & REGIONAL AGENCIES (For informational purposes only) Name of Agency/Committee Appointments 1. ACCOC - 1st District Representative Van Der Mark 2. ACCOC – Legislative–Regulatory Committee Bolton 3. City Selection Committee-- Held with League of Cities O.C. Division Meeting Mayor or Council Member designee (prescribed) 4. League of California Cities –Orange County Division Executive Board Member Moser 5. League of California Cities – Community Services Policy Committee, Member Moser 6. Orange County Housing Finance Trust (OCHTF) Board of Directors, Director Moser 7. Orange County Human Relations Commission, First District Commissioner Moser 8. O.C. Medical Care Committee Kalmick 55 City of Huntington Beach 2024 Council Liaison List – Updated 03/12/2024 Page 6 of 6 9. OCTA Citizen Advisory Committee Kalmick 10. SCAG - Energy and Environmental Policy Committee Kalmick Huntington Beach Housing Authority Public Financing Authority Chairperson: Gracey Van Der Mark Chairperson: Gracey Van Der Mark Vice Chairperson: Pat Burns Vice Chairperson: Pat Burns Commissioners: Rhonda Bolton, Dan Kalmick, Casey McKeon, Natalie Moser, Tony Strickland Commissioners: Rhonda Bolton, Dan Kalmick, Casey McKeon, Natalie Moser, Tony Strickland Executive Officer: Eric G. Parra Executive Officer: Eric G. Parra Authority Treasurer: Alisa Backstrom Authority Treasurer: Alisa Backstrom Authority Clerk: Robin Estanislau Authority Clerk: Robin Estanislau Authority Attorney: Michael E. Gates Authority Attorney: Michael E. Gates Parking Authority Successor Agency to the Former Redevelopment Agency of the City of Huntington Beach Chairperson: Gracey Van Der Mark Chairperson: Gracey Van Der Mark Vice Chairperson: Pat Burns Vice Chairperson: Pat Burns Commissioners: Rhonda Bolton, Dan Kalmick, Casey McKeon, Natalie Moser, Tony Strickland Commissioners: Rhonda Bolton, Dan Kalmick, Casey McKeon, Natalie Moser, Tony Strickland Executive Officer: Eric G. Parra Executive Officer: Eric G. Parra Authority Treasurer: Alisa Backstrom Agency Treasurer: Alisa Backstrom Authority Clerk: Robin Estanislau Agency Clerk: Robin Estanislau Authority Attorney: Michael E. Gates Agency Attorney: Michael E. Gates NOTE: The Oversight Board had a 4-year term designated by California State Governor Jerry Brown that expired in 2016. The duties have since been transferred to the County of Orange who will oversee the Redevelopment projects/obligations until termination. Please refer to the Orange Countywide Oversight Board (OCOB). Auditor Controller’s Office website for detailed information at https://ocauditor.com/ob/. 56 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-182 MEETING DATE:3/19/2024 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 minutes dated February 20, 2024, require review and approval. Financial Impact: None. Recommended Action: Approve and adopt the City Council/Public Financing Authority regular meeting minutes of February 20, 2024. 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. CC/PFA regular meeting minutes of February 20, 2024 City of Huntington Beach Printed on 3/13/2024Page 1 of 1 powered by Legistar™57 Minutes City Council/Public Financing Authority City of Huntington Beach Tuesday, February 20, 2024 5:00 PM — Council Chambers 6:00 PM — Council Chambers Civic Center, 2000 Main Street Huntington Beach, California 92648 A video recording of the 5:00 PM and 6:00 PM portions of this meeting is on file in the Office of the City Clerk, and archived at www.surfcity-hb.org/government/agendas/ 5:00 PM — COUNCIL CHAMBERS CALLED TO ORDER — 5:01 PM ROLL CALL Present: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick Absent: McKeon Councilmember McKeon requested and was granted permission to be absent pursuant to Resolution No. 2001-54. CITY COUNCIL MEMBER COMMENTS (3-Minute Time Limit) Councilmember Bolton announced that World Teen Mental Health Day is observed annually on March 2 to raise awareness of resources and to decrease stigma. She noted that the Love Like Ali Wellness Center will host a community fun run on Saturday, March 2, at Huntington Beach High School football stadium. All details can be found at www.lovelikealiwellnesscenter.org. Councilmember Moser asked staff to publicly post the Love Like Ali event flyer. ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS PERTAINING TO CLOSED SESSION ITEMS (Received After Agenda Distribution) — None PUBLIC COMMENTS PERTAINING TO CLOSED SESSION ITEMS (3-Minute Time Limit) — None A motion was made by Strickland with a second by Burns to recess to Closed Session for items 1 and 2. RECESSED TO CLOSED SESSION — 5:05 PM CLOSED SESSION 1. 24-121 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision (d) of Section 54956.9). Page v. City of Huntington Beach, et al.; OCSC Case No.: 30-2022-01280954. 58 Council/PFA Regular Minutes February 20, 2024 Page 2 of 17 2. 24-122 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision (d) of Section 54956.9). Clayton-Tarvin (Gina) v. City of Huntington Beach, Michael Gates, et al.; OCSC Case No.: 30-2023-01329927. 6:00 PM - COUNCIL CHAMBERS RECONVENED CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING — 6:01 PM ROLL CALL Present: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick Absent: McKeon Councilmember McKeon requested and was granted permission to be absent pursuant to Resolution No. 2001-54. PLEDGE OF ALLEGIANCE — Led by Mayor Pro Tem Burns 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. 3. 24-139 Huntington Beach Fire and Police Chaplain Roger Wing CLOSED SESSION REPORT BY CITY ATTORNEY — None 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 which were all uploaded to the City's website and Councilmember iPads. Consent Calendar Items #9 (1 email communication), #12 (1 email communication), #13 (1 email communication), and #18 (1 staff memorandum); Councilmember Items #24 (63 email communications). PUBLIC COMMENTS (2-Minute Time Limit due to the number of speakers) — 76 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. J. Darrin Godin, Vice President, Marketing and Communications, City of Hope Orange County, was called to speak and described the expansion of City of Hope in Orange County. He added that City of Hope staff and specialists are dedicated to researching, treating and ending cancer. (00:15:30) Andy Einhorn, Huntington Beach resident, was called to speak and stated his opinion that the elections held by the Orange County Registrar of Voters are fair and honest, and stated his opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (00:17:43) Shammy Dingus was called to speak and stated her opinion that the elections held by the Orange County Registrar of Voters are fair and honest, and stated her opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (00:19:52) 59 Council/PFA Regular Minutes February 20, 2024 Page 3 of 17 Shirley Dettloff, Huntington Beach resident since 1964 and former Mayor, was called to speak and stated her opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (00:22:11) Barbara Shapiro was called to speak and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (00:24:29) Brenda Glim was called to speak and acknowledged Black History Month. (00:26:44) Urson Russell was called to speak and stated his support for Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (00:28:59) Unnamed Speaker was called to speak and stated opposition to the March 5, 2024, Statewide Primary ballot statement by Councilmembers Bolton, Kalmick and Moser that ballot box surveillance is voter intimidation. (00:31:10) Patti Pappas was called to speak and stated her support for requiring voter identification for election transparency and accountability. (00:33:03) Jeanne Paris, 28-year Huntington Beach resident, was called to speak and stated her support for Measure A on the March 5, 2024, Statewide Primary ballot. (00:34:41) Ann Palmer, long-time Huntington Beach resident, was called to speak and stated her appreciation for the efforts of Councilmembers, City Attorney Michael Gates and staff to regain local control of zoning and planning, and asked for the creation of a local resolution in opposition to SB 951 which if passed would de-commission the California Coastal Commission. Ms. Palmer also stated her support for requiring voter identification to ensure continued election transparency and accountability. (00:36:42) Barbara Goldberg, speaking on behalf of Benji Blum, was called to speak and stated opposition to the statement by Councilmembers Bolton, Kalmick and Moser that requiring Americans with Disabilities Act (ADA) standards at all polling places is redundant. Ms. Goldberg noted that prior to the passage of the 2016 Voter Choice Act Huntington Beach offered over 60 local polling locations, however now there are just 13 polling locations and she believes this makes voting for the disabled very challenging. (00:38:48) Ben Goldberg was called to speak and stated support for Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (00:41:18) Carol Daus, long-time Huntington Beach resident and Friends of the Library member and volunteer, was called to speak and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility. (00:43:38) Connie Boardman, former Mayor, was called to speak and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility. Ms. Boardman also stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (00:45:43) Pat Goodman was called to speak and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (00:47:40) 60 Council/PFA Regular Minutes February 20, 2024 Page 4 of 17 Cathy Ryder, Huntington Beach resident and voter since 1985, was called to speak and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot; acknowledged February as Black History Month; and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility. (00:49:53) Unnamed Speaker was called to speak and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (00:51:37) Unnamed Speaker was called to speak and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (00:53:47) Joe Shapiro was called to speak and shared a video clip of Bob Page, Registrar of Voters, explaining the safe and secure Orange County voter elections. (00:56:01) Unnamed Speaker was called to speak and announced a ProtectHB-sponsored tour of the Orange County Registrar of Voters on February 24, 2024, and shared her opinion that Orange County provides for safe and secure elections. (00:58:10) Kay Goddard was called to speak and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility. (01:00:18) Paula Schaeffer, Huntington Beach resident and voter since the early 1990s, was called to speak and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (01:02:59) Ann Borren, Huntington Beach resident, was called to speak and shared her opposition to statements made by Councilmembers Bolton, Kalmick and Moser related to issues on the March 5, 2024, Statewide Primary ballot. (01:05:18) Unnamed Speaker, Huntington Beach resident and homeowner for 35 years, was called to speak and shared her support for Measure A on the March 5, 2024, Statewide Primary ballot. (01:07:30) Butch Twining, Planning Commissioner, Candidate for City Council in November 2024 and 58-year Huntington Beach resident, was called to speak and stated support for Measure A on the March 5, 2024, Statewide Primary ballot. (01:09:44) Don Kennedy, Candidate for City Council in November 2024, was called to speak and stated support for Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (01:11:55) Valentina Bankhead was called to speak and stated support for Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (01:14:07) Janet Jacobs, a 40-year Huntington Beach resident, was called to speak and stated support for Measure A on the March 5, 2024, Statewide Primary ballot. (01:17:00) Linda Diaz, Huntington Beach resident for over 30 years, was called to speak and thanked Councilmembers for ensuring sexually explicit material is not available in the children's section of the library and stated support for Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (01:19:09) 61 Council/PFA Regular Minutes February 20, 2024 Page 5 of 17 Becky Ettinger, Huntington Beach resident, was called to speak and stated support for Measure A on the March 5, 2024, Statewide Primary ballot. (01:21:23) Barbara Richardson, 51-year Huntington Beach resident, was called to speak and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (01:23:39) Unnamed Guest was called to speak and stated support for Measure A on the March 5, 2024, Statewide Primary ballot. (01:25:26) Ken Inouye, 50-year Huntington Beach resident, was called to speak and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (01:27:42) Chad Williams, Candidate for City Council in November 2024, was called to speak and stated support for Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (01:29:47) Unnamed Speaker was called to speak and stated opposition to Measure A on the March 5, 2024, Statewide Primary ballot. (01:32:11) Barbara Van Dine, 27-year Huntington Beach resident, was called to speak and stated support for transparency regarding library material accessibility. (01:35:26) Lisa Ferraro,35-year Huntington Beach resident, was called to speak and stated support for Measure A on the March 5, 2024, Statewide Primary ballot. (01:37:35) Darcy Lucero was called to speak and stated support for Measure A on the March 5, 2024, Statewide Primary ballot. (01:39:42) Nora Pederson, 37-year Huntington Beach homeowner, was called to speak and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility. (01:42:01) Jacqueline Brodt, Huntington Beach resident, Huntington Beach Wetlands Conservancy Board Member and Friends of the Library former board member, was called to speak, stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility. (01:43:58) Larry Schiel, 35-year Huntington Beach resident, was called to speak and stated support for Measure A on the March 5, 2024, Statewide Primary ballot. (01:45:19) Russ Neal, Huntington Beach resident, was called to speak and suggested a substitute action for Councilmember Items #24 by Councilmember Moser that would address the issue of protecting our children in the library in a more concise and rational manner. (01:47:09) Unnamed Speaker was called to speak and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023- 41 regarding library material accessibility. (01:49:52) Tory Johnson, 13-year Huntington Beach resident, was called to speak, shared his opinions on the City's changing human dignity policies and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (01:51:30) 62 Council/PFA Regular Minutes February 20, 2024 Page 6 of 17 Bethany Webb, 40+-year Huntington Beach resident, was called to speak, stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility. (01:53:34) Cecilia Pham was called to speak and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility. (01:55:20) Kaitlin Riley, Huntington Beach Library teen employee, was called to speak and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility. (01:57:24) Joclyn Rabbit-Sire, Huntington Beach resident since 1999, was called to speak, stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility and encouraged everyone to vote. (01:59:15) Cheryl Browning was called to speak and shared her opinions regarding Measures A and B on the March 5, 2024 ballot. (02:00:43) Mary Kyle was called to speak and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility, and noted the violation of the City's flag-flying policy at a beach event on February 19, 2024. (02:02:56) Amory Hanson was called to speak and expressed his appreciation for the efforts of City Council and City Attorney Michael Gates to assure a reasonable housing allocation number as evidenced in Consent Calendar Item #8 regarding the 2023 Housing Element Annual Progress Report. (02:04:56) Alan Ray, Planning Commissioner, was called to speak and shared his opinion that the water fountains at Central Library need to be repaired and refilled prior to the 50th Anniversary celebration in 2025. (02:05:55) Briana Lee was called to speak, stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (02:07:54) Tim Geddes, a trained poll worker for the March 5, 2024, Election, was called to speak and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (02:10:54) Derek Jenkins, Huntington Beach High School graduate and homeowner, was called to speak, and provided examples of how his mother and family have supported Huntington Beach for many years. He noted his mother’s name is on a purported "bullies" list of old ladies that care about their community, and who are not afraid to speak their minds and take direct action. He asked what the purpose of this list is, and suggested people could learn a thing or two from his mother, a real local. (02:12:59) Sarah Huffman, an Orange County Roller Derby (OCRD) Coach and Team Manager, was called to speak and suggested Huntington Beach invest in roller derby facilities to be used for training and playing. 63 Council/PFA Regular Minutes February 20, 2024 Page 7 of 17 She stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (02:15:11) Heather Blake was called to speak and shared her and her daughter's personal positive experiences in the roller derby world and stated support for a covered roller derby rink in Huntington Beach. (02:17:26) Jessica Rockwell, born and raised in Huntington Beach, was called to speak and stated support for a covered roller derby rink in Huntington Beach to increase year-round sport diversity. (02:19:44) Joyce Noelani, Orange County Roller Derby (OCRD) Member, was called to speak and stated support for a covered roller derby rink in Huntington Beach for a sport built on collaboration, support and respect. (02:22:03) Wendy Rincon, 50-year Huntington Beach resident, was called to speak and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (02:24:20) Tom McGrath, Independent Candidate, U. S. House of Representatives, was called to speak and shared his opinions on causes and solutions for the U. S. migrant situation, and suggested Huntington Beach Councilmembers could be more productive sending a statement of solutions to Congress rather than a statement of solidarity to Texas Governor Abbott. (02:26:26) Mark Tonkavich was called to speak and thanked the Councilmembers who supported the statement of solidarity to Texas Governor Abbott. He stated support for Measure A on the March 5, 2024, Statewide Primary ballot. (02:28:32) Tony Bisson, Huntington Beach Southeast resident representing 6 neighbors near LeBard Park, was called to speak and asked that the tennis court lights be programmed to go off at 9 PM rather than 10 PM to greatly improve their quality of life. He also noted that pickle ball creates much greater noise pollution than tennis does and requested pickle ball be added to the list of prohibited activities for that tennis court. (02:31:17) Zachary Stevens was called to speak and stated his support for Measure A, and opposition to Measures B and C on the March 5, 2024, Statewide Primary ballot. He also stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility. (02:33:28) Unnamed Speaker was called to speak and shared his opinions on the housing shortage and encouraged Councilmembers to support much more locally controlled building before the state implements the chaotic builder's remedy solution. (02:35:34) Amberlyn Riecken, a Roller Derby player, was called to speak and stated support for this all-inclusive sport that can improve the lives of individuals and make them more productive community members. (02:37:33) James Gilbert, a Roller Derby Coach and player, was called to speak and asked that Huntington Beach bring back roller skating for players, facilitators and spectators. (02:39:11) 64 Council/PFA Regular Minutes February 20, 2024 Page 8 of 17 Linda Freedlein, a Roller Derby player, was called to speak and shared a brief history of Orange County Roller Derby as a skater operated and owned effort that has broken down inclusivity barriers through a sport which welcomes skaters of all levels and backgrounds. (02:40:26) Vic Cerby, Huntington Beach High School student and Long Beach Roller Derby team captain, was called to speak and shared support for having roller skate facilities back in Huntington Beach. (02:42:09) Elle Rogers, a Roller Derby community member, was called to speak and shared her support for having roller skate facilities back in Huntington Beach. (02:43:36) Unnamed Speaker was called to speak and stated support for Measures A, B and C on the March 5, 2024 ballot. (02:45:37) Jenn Cohen, Feminist Uprising Co-Founder, concerned parent and former Huntington Beach resident, was called to speak and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility. (02:47:56) Unnamed Speaker, representing Pride at the Pier, was called to speak and stated support for Councilmember Items #24 by Councilmember Moser regarding transparency and reporting on the implementation of Resolution 2023-41 regarding library material accessibility. (02:49:44) Roger Noor, a Huntington Beach resident for over 27 years, was called to speak and shared his opposition to Consent Calendar Item #12 regarding the formal naming of parkland located at 17281 Eucalyptus Lane as "Vella Park." (02:50:59) Debbie Cook, a former Mayor, was called to speak and stated opposition to Measures A, B and C on the March 5, 2024, Statewide Primary ballot. (02:53:02) COUNCIL COMMITTEE APPOINTMENT ANNOUNCEMENTS — None AB 1234 REPORTING — None OPENNESS IN NEGOTIATION DISCLOSURES — None CITY CLERK’S REPORT 4. 24-140 Presentation on the Safe and Sane Fireworks Stand Application and Lottery Process for 2024 City Clerk Robin Estanislau presented a PowerPoint communication titled 2024 Safe and Sane Fireworks Stand Application and Lottery Process with slides entitled Application Period: March 1 through March 29; Civic Organizations (5); High School (5); High School (Private); Youth Sports (5); Application Process - 2; and Questions? City Clerk Estanislau noted that Consent Calendar Item #14 regarding a change in the number of permits issued for Safe and Sane Firework does not impact the Fireworks Stand Application and Lottery Process. CITY MANAGER’S REPORT Assistant City Manager Travis Hopkins announced the withdrawal of Consent Calendar Items #10 regarding a 5-year joint use agreement between the City of Huntington Beach and the Westminster 65 Council/PFA Regular Minutes February 20, 2024 Page 9 of 17 School District and #13 regarding a 5-year professional services contract between the City of Huntington Beach and PSQ Productions. 5. 24-145 Caltrans Pacific Coast Highway Construction Update Interim City Manager Eric Parra introduced Assistant City Manager Travis Hopkins who introduced Caltrans District 12 Representative Marc Talevera and Office Chief for Project Management Bassem Barsoum, as well as City Transportation Engineer Bob Stachelski and Public Works Director Chau Vu who were available for questions. Mr. Talevera presented a PowerPoint communication titled Purpose and Scope with slides entitled Project Benefits; Project Location; Schedule; Traffic Impacts; Public Information Opportunities; and Questions? Councilmember Kalmick and Caltrans Representative Barsoum discussed several topics: the objective of the next Caltrans 2025/26 project for basically the same area; considerations of sea level rise; the "fix-it- first" focus for the current project; coordination with partners such as Orange County Transportation Authority (OCTA); and the time it takes to properly plan implementation of approved projects and also secure the funding. Councilmember Moser and Caltrans Representative Barsoum discussed the method Caltrans uses to determine appropriate speed limits which includes consideration of federal and state mandates. Councilmember Moser asked, on behalf of Sunset Beach residents, for more dialogue between City and Caltrans staff to consider ways the speed limit might be lowered on Pacific Coast Highway through Sunset Beach. Mayor Pro Tem Burns confirmed with Caltrans Representative Barsoum that they do their best to coordinate their projects around scheduled major Huntington Beach events. CONSENT CALENDAR (Items 6-23) Councilmember Moser pulled Item #8 and Councilmember Kalmick pulled Item #14 for further discussion. City Clerk Robin Estanislau confirmed for the record that Consent Calendar Items #10 and #13 were withdrawn from consideration by Administration, and Item #18 was withdrawn from consideration by the Police Department. City Clerk 6. 24-138 Approved and Adopted Minutes A motion was made by Strickland, second Burns to approve and adopt the City Council/Public Financing Authority regular meeting minutes of February 6, 2024. The motion carried by the following roll call vote: AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon City Treasurer 66 Council/PFA Regular Minutes February 20, 2024 Page 10 of 17 7. 24-084 Received and Filed the City Treasurer’s Quarterly Investment Report for December 2023 A motion was made by Strickland, second Burns to receive and file the City Treasurer's Quarterly Investment Report for December 2023, pursuant to Section 18.0 of the Investment Policy of the City of Huntington Beach. The motion carried by the following roll call vote: AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon Community Development 8. 24-113 Directed staff to forward the Amended 2023 Housing Element Annual Progress Report to the California Department of Housing and Community Development and the Governor’s Office of Planning and Research Councilmember Moser pulled this item to publicly review Table D, specifically the total number of Huntington Beach households receiving Section 8 and Tenant-Based Rental Assistance (TBRA). She asked for an upcoming opportunity to look more closely at what is planned for the Mobile Home TBRA program moving ahead. Councilmember Moser noted that the Mobile Home Advisory Board, referenced in the report, has been disbanded and confirmed with staff that fact will be noted in the report before it is submitted. Councilmember Moser also noted that as presented the report makes it appear as if Homeless services are only provided through or managed by the Police Department when in fact the City Manager's Office is also involved. She suggested that clarity on that might impact future funding opportunities. A motion was made by Strickland, second Moser to approve the 2023 Housing Element Annual Progress Report, and direct staff to submit the 2023 Housing Element APR to the California Department of Housing and Community Development and Governor's Office of Planning and Research, as amended to note the disbandment of the Mobile Home Advisory Board and adding the City Manager's Office as also providing/managing services for the Homeless. The amended motion carried by the following roll call vote: AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon 9. 24-076 Approved Final Tract Map No. 19118, accepted bonds and authorized execution of a Subdivision Agreement for the Holly Triangle Townhomes subdivision by Bonanni Development Company IV, LLC at 19070 Holly Lane A motion was made by Strickland, second Burns to approve Final Tract Map No. 19118 and accept the offer of easements pursuant to findings and requirements (Attachment No.1); and, approve and authorize the Mayor and City Clerk to execute the Subdivision Agreement by and between the City of Huntington Beach and Bonanni Development Company IV, LLC (Attachment No. 6); and, accept Faithful 67 Council/PFA Regular Minutes February 20, 2024 Page 11 of 17 Performance Bond No. 4470394, Labor and Material Bond No. 4470394, and Monument Bond No. 4470395 as sureties (Attachment No. 7) for the installation of the subdivision's required public improvements and survey monumentation; and, instruct the City Clerk to file the respective bonds with the City Treasurer and notify the Surety, SureTec Insurance Company, of this action. The motion carried by the following roll call vote: AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon Community and Library Services 10. 24-119 ITEM WITHDRAWN FROM CONSIDERATION Approve and execute a 5-year Joint Use Agreement between the City of Huntington Beach and the Westminster School District for Clegg-Stacey Park on 6161 Larchwood Drive 11. 24-120 Approved and executed a 5-year Recreation Facility Use Agreement between the City of Huntington Beach and the Huntington Beach City School District for joint use of school recreation facilities A motion was made by Strickland, second Burns to authorize the Mayor and City Clerk to execute and approve a Recreation Use Agreement between the City of Huntington Beach and Huntington Beach City School District for joint use of school recreation facilities. The motion carried by the following roll call vote: AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon 12. 24-137 Approved the formal naming of parkland located at 17281 Eucalyptus Lane as "Vella Park," as recommended by the Community & Library Services Commission A motion was made by Strickland, second Burns to approve the naming of parkland located at 17281 Eucalyptus Lane, "Vella Park," in honor of fallen Police Officer Nicholas Vella, as recommended by the Community & Library Services Commission. The motion carried by the following roll call vote: AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon 13. 24-144 ITEM WITHDRAWN FROM CONSIDERATION Approve and execute a five-year Professional Services Contract between the City of Huntington Beach and PSQ Productions for production and management service of the annual Independence Day Celebration 14. 24-154 TABLED TO A DATE UNCERTAIN request to adopt Resolution No 2024-08 revising and restating Resolution No. 2016-01 related to implementing Charter Section 805 68 Council/PFA Regular Minutes February 20, 2024 Page 12 of 17 and Municipal Code Chapter 5.90 regarding the number of permits issued for Safe and Sane Fireworks from fifteen (15) to sixteen (16) Councilmember Kalmick pulled this item to share his opinion that increasing a revenue stream should be an Administrative Item and not considered as a Consent Item. He also shared staff's explanation that since the 4th of July celebration costs are increasing this is a way to increase revenue to offset those costs. He also noted there is a missing definition for the term "foundation". A motion was made by Kalmick, second Bolton to table to a date uncertain request to adopt Resolution No 2024-08, "A Resolution of the City Council of the City of Huntington Beach revising and restating Resolution No. 2016-01 related to implementing Charter Section 805 and Municipal Code Chapter 5.90 regarding safe and sane fireworks," to allow time for staff to include a definition for "foundation". The amended motion carried by the following roll call vote: AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon Fire 15. 23-1050 Approved and authorized execution of three (3) contracts: Oil Well Abandonment, Civic Center Lease Closure, and Miley Keck Tank Farm Lease Closure and approve an appropriation of $1,236,763 in HB Recovery Funds for the Project A motion was made by Strickland, second Burns to approve and authorize the Mayor and City Clerk to execute a $1,099,770 "Agreement between the City of Huntington Beach and Excalibur Well Services Corp. for Oil Well Abandonment;" and, approve and authorize the Mayor and City Clerk to execute a $405,514 "Service Agreement between the City of Huntington Beach and O.C. Vacuum, Inc. for Civic Center Lease Closure;" and, approve and authorize the Mayor and City Clerk to execute a $189,932 "Service Agreement between the City of Huntington Beach and American Integrated Services, Inc. for Miley Keck Tank Farm Lease Closure". Authorize the appropriation and transfer of $1,236,763 in HB Recovery Reserves to Business Unit 31465001 (Oil Well Abandonment) to fund the unbudgeted portion of the project. The motion carried by the following roll call vote: AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon 16. 24-123 Approved and authorized execution of a "Health Plan-Provider Agreement — Intergovernmental Transfer Rate Range Program Agreement" between CalOptima Health and the City of Huntington Beach A motion was made by Strickland, second Burns to approve and authorize execution of a "Health Plan- Provider Agreement - Intergovernmental Transfer Rate Range Program Agreement" between CalOptima Health and the City of Huntington Beach. The motion carried by the following roll call vote: 69 --- Council/PFA Regular Minutes February 20, 2024 Page 13 of 17 AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon Police 17. 24-087 Approved and authorized a six-month extension to a Service Agreement with the City of Newport Beach for Public Safety Helicopter Services A motion was made by Strickland, second Burns to approve and authorize the Mayor and City Clerk to execute "Amendment No. 1 to Services Agreement for Public Safety Helicopter Support Between the City of Huntington Beach and the City of Newport Beach." The motion carried by the following roll call vote: AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon 18. 24-103 ITEM WITHDRAWN FROM CONSIDERATION Approve and authorize a one-year contract extension with Universal Protection Services, LP, DBA Allied Universal Security Services (UASS) for street sweeping parking enforcement services 19. 24-083 Approved and accepted the California Office of Emergency Services (Cal OES) Violence Against Women Act Grant (LE23 07 6860); authorized the Chief of Police to execute documents; approved appropriations and contract Amendment No. 3 with Waymakers in the amount of $116,032 for continued management of the Victim and Witness Assistance Services Program A motion was made by Strickland, 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; assign authority to the Chief of Police as the official to execute and sign for the award and to approve amendments and extensions; approve the appropriation and expenditure of $270,857 of which $203,143 is to be fully reimbursed by the grant from Cal OES. The remaining $67,714 will be funded from appropriations in the Police Department's budget; and approve and authorize "Amendment No. 3 to 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: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon Public Works 20. 24-079 Accepted the lowest responsive and responsible bid and authorized execution of a construction contract with R.J. Noble Company in the amount of $4,044,900 for the Residential Zone 1 Street Maintenance Project, CC-1743 70 Council/PFA Regular Minutes February 20, 2024 Page 14 of 17 A motion was made by Strickland, second Burns to accept the lowest responsive and responsible bid submitted by R.J. Noble Company in the amount of $4,044,900; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. The motion carried by the following roll call vote: AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon 21. 24-094 Accepted the lowest responsive and responsible bid and authorized execution of a construction contract with Nobest, Inc. in the amount of $315,000 for the Residential Zone 1 Curb Ramp Project, CC-1742 A motion was made by Strickland, second Burns to accept the lowest responsive and responsible bid submitted by Nobest Inc. in the amount of $315,000; and, authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. The motion carried by the following roll call vote: AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon 22. 24-124 Adopted Resolution No. 2024-07 approving the submittal of two applications to the Orange County Transportation Authority (OCTA) for grant funding for Special Event Shuttle Services and the HB Circuit Program A motion was made by Strickland, second Burns to adopt Resolution No. 2024-07, "A Resolution of the City Council of the City of Huntington Beach Authorizing the Submittal of Two Project Applications: Special Event Shuttle Service and HB Circuit Rideshare Program to the Orange County Transportation Authority for Funding Under the Project V Community-Based Transit/Circulators Program". The motion carried by the following roll call vote: AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon 23. 24-127 Adopted Resolution No. 2024-05 certifying that the City has the resources to implement the projects to be included in the FY 2024/25 — FY 2029/30 Federal Transportation Improvement Program (FTIP) as required by the Orange County Transportation Authority (OCTA) A motion was made by Strickland, second Burns to adopt Resolution No. 2024-05, "A Resolution of the City Council of the City of Huntington Beach Certifying that the City has the Resources to Fund the Projects in the FY 2024/25 - 2029/30 Transportation Improvement Program and Affirms its Commitment to Implement All Projects in the Program." The motion carried by the following roll call vote: 71 Council/PFA Regular Minutes February 20, 2024 Page 15 of 17 AYES: Moser, Bolton, Burns, Van Der Mark, Strickland, and Kalmick NOES: None ABSENT: McKeon COUNCIL MEMBER ITEMS 24. 24-143 Denied Item Submitted by Council Member Moser — Request for Transparency and Detailed Reporting on the Implementation of Resolution 2023-41 Regarding Library Material Accessibility Councilmember Moser introduced her item by stating she unequivocally disagrees with Resolution 2023- 41 regarding library material accessibility. She proceeded to describe how disturbing it was to see the actions taken by library staff to implement a policy document approved by Councilmembers and noted there was no advanced public notice. Councilmember Moser proceeded to read her memorandum to her fellow Councilmembers regarding this item which provided background, outlined concerns and detailed her requested actions. She noted this item also included concerns expressed by community members and library staff. Councilmember Moser stated her opinion that Resolution 2023-41 does not protect youth and a detailed project plan and framework needs to be provided. She stated the need to be aware that government rhetoric can potentially contribute to an environment that is unwelcoming and intolerant and can result in hate crimes. She encouraged focus on creating inviting and welcoming spaces in the library for youth where they can access information through "windows" to see other ways of living and "mirrors" to view themselves. Councilmember Kalmick shared his concerns about how action on Resolution 2023-41 moved forward and reviewed Municipal Code Section 2.30.030 addressing the power and duties of the Director of Library Services. He specifically referenced the last item "challenging censorship and affirming that all libraries are forums for information and ideas and library resources be provided for the interests, information and enlightenment of the people." He continued that the Library Bill of Rights also states that a person's right to use a library should not be denied or abridged because of origin, age, background or views. He asked how the Director of Community and Library Services could issue a directive to start moving books under Resolution 2023-41, purportedly using Wikipedia's definition of sexual content, when it is in direct violation of Huntington Beach Municipal Code. City Attorney Michael Gates clarified that his office does not give orders, and stated since this is an "H" item he would be happy to return at the next meeting to allow further review of the questions posed. He added that as a matter of law, Resolution 2023-41 is not censorship nor in conflict with the Municipal Code from a legal standpoint. City Attorney Gates noted that Councilmembers have the prerogative to revise any resolution. Councilmember Kalmick acknowledged the legal standpoint and noted that unfortunately Councilmembers were not made aware of any directive to staff regarding implementation. He stated his support for Councilmember Moser's item, especially the requirement to document the movement of what some call objectionable books and materials and asked if staff was provided with an objective process or framework for implementing this policy. Councilmember Bolton asked how staff could begin to move books without any clear criteria or definitions, and added that Wikipedia is not an appropriate basis for any kind of decision. She stated 72 Council/PFA Regular Minutes February 20, 2024 Page 16 of 17 these books belong to the public and staff needs to do a much better job of helping residents understand what they are doing. She asked why this process started last week and under what directive. Interim City Manager Eric Parra responded that staff was making a good faith effort to comply with the direction of City Council. Mayor Pro Tem Burns asked why the expertise of the librarians cannot be relied on. Councilmember Bolton responded that librarians are expected to apply the Library Bill of Rights as stated in the Municipal Code and this action requires clear standards. Councilmember Moser noted that Resolution 2023-41 states the Library Bill of Rights will be followed, and read three sections from the Library Bill of Rights that she felt pertained specifically to this situation: Access to Library Resources and Services for Minors; Access to Library Resources and Services Regardless of Sex, Gender Identity, Gender Expression, or Sexual Orientation; and Restricted Access to Library Materials. Councilmember Moser stated she does not understand how Resolution 2023-41 moved from the City Attorney's Office to being acted upon by library staff since her understanding is the actions taken are illegal per Huntington Beach Municipal Code. Councilmember Strickland confirmed with City Attorney Michael Gates that no part of Resolution 2023-41 breaks any law. Councilmember Strickland shared his opinion that Councilmember Moser didn't like the results of the first vote on October 17, 2023, and this item is an attempt to just rehash the discussion. He stated his "No" vote for this item. Councilmember Moser responded this item is to provide a framework for transparency for the public and the library staff, and added that books should not start moving until the committee has been established. Mayor Van Der Mark stated she believes Councilmember Moser is asking for an audit of a program that hasn't even been implemented, and added she does believe in transparency and all of the great questions raised at this meeting will be answered as the program is being implemented. Councilmember Moser stated there should be a public plan before implementation and noted there is no information or details regarding the supposed expiration date of March 1 for some existing library cards. A motion was made by Moser, second Bolton to request City staff prepare and present a comprehensive report on the various aspects related to the implementation of Resolution 2023-41. This includes criteria for material assessment and relocation; list of relocated materials; newly acquired materials; library access changes; community engagement and feedback process; digital assets; and clarification on youth re-carding process. This report is requested to be prepared and presented at the next available City Council meeting. In the interim, staff is also asked to make (1) the criteria for assessment and re-location; and (2) the list of relocated books and materials available to the public as soon as possible (available at each library location and via the library website) to ensure ongoing transparency and community engagement. The motion failed by the following roll call vote: AYES: Moser, Bolton, and Kalmick NOES: Burns, Van Der Mark, and Strickland 73 Council/PFA Regular Minutes February 20, 2024 Page 17 of 17 ABSENT: McKeon ADJOURNMENT — 10:00 PM A motion was made by Strickland with a second by Burns to adjourn to the next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority on Tuesday, March 5, 2024, 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 of the City of Huntington Beach, California ATTEST: ______________________________________ City Clerk-Secretary ______________________________________ Mayor-Chair 74 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-183 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Robin Estanislau, CMC, City Clerk VIA:Robin Estanislau, CMC, City Clerk Subject: Monthly Update of Activities for Citizen Boards, Commissions, Committees (BCCs) and Regional Agencies - February 2024 Statement of Issue: A monthly reporting structure has been implemented to keep the City Council, City staff and members of the public informed of activities conducted by citizen boards, commissions, committees, and Council committees, including community groups/independent City-affiliated boards and other community, regional or state level committees. Financial Impact: None. Recommended Action: Receive and File. Alternative Action(s): Not applicable. Analysis: The City operates a number of Citizen and Council-led Boards, Commissions and Committees (BCCs) with City Council representatives participating in several Regional Agency meetings to discuss important City topics ranging from infrastructure to development. To ensure that our community is able to stay informed of each BCC’s major discussions and votes, in addition to promoting the highest level of transparency, staff has prepared a high-level report of their activities for the prior month. Furthermore, this high-level report was developed in response to direction received at the December 20, 2022 City Council Meeting to find a manageable way to publicly present a brief written report on all BCC and Regional Agency meeting activities. To obtain greater details, individuals are directed to the meeting minutes, which are linked in the Activity Report. The City Clerk gathers these updates from an internal spreadsheet that is completed by BCC staff liaisons and compiles them into the attached Activity Report that will be routinely agendized for the City of Huntington Beach Printed on 3/13/2024Page 1 of 2 powered by Legistar™75 File #:24-183 MEETING DATE:3/19/2024 first regular Council meeting of each month under “Consent” as an informational item only. Council action is not required. Environmental Status: Not applicable. Strategic Plan Goal: Non Applicable - Administrative Item Attachment(s): 1. Monthly BCC / Regional Agency Activity Report for February 2024 City of Huntington Beach Printed on 3/13/2024Page 2 of 2 powered by Legistar™76 1 FEBRUARY 2024 ACTIVITY REPORT FOR REGIONAL AGENCIES AND CITY BOARDS, COMMITTEES, AND COMMISSIONS (BCC) February 1-9, 2024 Updates / Actions Citizen Participation Advisory Board (CPAB) 1st Thurs., Monthly January - June and as needed, 6:00 PM City Hall Lower Level B8 Department: Community Development Meeting Date: 2/1/24 Link to Meeting Details Summary of Action or Discussion: Update of the 2020-24 Consolidated Plan Goals/Performance Measures and Review of the Annual Community Development Block Grant Public Services Program Applications for the 2024-25 Program Year Received by the Board Members; Conducted Applicant Presentations for Board Members Community & Library Services Commission - Park Naming & Memorials Committee Meets As Needed City Hall Meeting Rooms Department: Community & Library Services Meeting Date: 2/7/24 - NOTE: MEET WAS MOVED FROM 2/14/24 Link to Meeting Details Summary of Action or Discussion: A presentation was provided by April Lammers, Senior Librarian of Technology and Database Services on the Library systems digital resources available to the public. She provided 4 samples, include Libby and The Palace Project, both of which are ebook and audiobook oriented, NewsBank which is geared towards periodicals, and Brainfuse Help Now, which offers on-demand tutoring for children and adults. The Commission took action on the naming of the parkland at 17281 Eucalyptus Lane, approving the name "Vella Park" for recommendation to City Council for final approval. Commissioners asked that any park identification sign note the full name of Nicholas Vella and note that he was an officer. Commission was informed that a sign would be design with the same specifications as the sign at Prince Park, with the name of the park, the fallen officers name, and "end of watch" date. With that, the motion passed, all in favor. Informational Items included CIP updates on Gisler and Seeley Park construction projects, and a calendar of upcoming Jubilee events. Additionally, Commission was informed of the Norma Gibbs Park Restoration Milestones plaque unveiling on Wednesday, March 6, 2024 at 10:00 am As part of the 2024 Jubilee Celebration, the Boy Scout Cabin will turn 100 and offer an open house and food on April 20th; CA Arbor Day Celebration 77 I I 2 FEBRUARY 2024 ACTIVITY REPORT FOR REGIONAL AGENCIES AND CITY BOARDS, COMMITTEES, AND COMMISSIONS (BCC) will take place in Huntington Central Park East with planting of trees on Friday, March 15, 2024; and the Jubilee's main event will take place on Saturday, June 15, at the Senior Center in Central Park. Commissioners were provided with a memo from the City Clerk which noted a word change. Zoning Administrator 1st & 3rd Wed., Monthly, 1:30 PM City Hall Council Chambers Department: Community Development Meeting Date: 2/7/24 Link to Meeting Details Summary of Action or Discussion: Conditional Use Permit No. 23-029 (El Torazo Beer and Wine) REQUEST: To allow the on-site sale, service and consumption of beer and wine (ABC License Type 41) within an existing approximately 2,000 sq. ft. restaurant space. – Approved; Coastal Development Permit No. 23-012 (Price Residence) REQUEST: To permit a 682 sq. ft. second floor addition to an existing 3,410 sq. ft. single family residence at an overall height of 24 ft.-1 in. – Approved Independence Day Board 1st Wed. Monthly, 6:00 p.m. City Hall Lower Level B-8 Department: Community & Library Services Meeting Date: 2/7/24 Link to Meeting Details Summary of Action or Discussion: City Staff provided an update to Independence Day Board members on the status of the event Contractor, which will be taken to council at the next regularly scheduled meeting. The Board voted on a theme for the 2024 Independence Day event and began the discussion on grand marshals for the parade. Design Review Board (DRB) 2nd Thurs. Monthly, 3:30 p.m., City Hall Lower Level, B-8 Department: Community Development Meeting Date: 2/8/24 Link to Meeting Details Summary of Action or Discussion: Design Review Board No. 23-013 (Water Well 3A Manganese Filters) REQUEST: To review the design, color, and materials of a proposed wall and water filters at the City’s Well 3A site to treat and remove manganese from the City’s drinking water supply. 78 I I 3 FEBRUARY 2024 ACTIVITY REPORT FOR REGIONAL AGENCIES AND CITY BOARDS, COMMITTEES, AND COMMISSIONS (BCC) February 12-16, 2024 Updates / Actions Planning Commission 2nd & 4th Tues., Monthly, 6:00 PM City Hall Council Chambers Department: Community Development Meeting Date: 2/13/24 Link to Meeting Details Summary of Action or Discussion: Study Session review of Zoning Text Amendment No. 23-002. No Action taken. Sunset Beach Local Coastal Program Review Board 2nd Tues., Monthly 7:30 PM Nobles Family Comm. Ctr. Department: Community Development Meeting Date: 2/13/24 Summary of Action or Discussion: Cancelled Economic Development Committee 2nd Wed., Every Other Month, 3:30 p.m., City Hall Lower Level, B-8 Department: Community Development Meeting Date: 2/14/24 Summary of Action or Discussion: Cancelled February 19-23, 2024 Updates / Actions Zoning Administrator 1st & 3rd Wed., Monthly, 1:30 PM City Hall Council Chambers Department: Community Development Meeting Date: 2/21/24 Summary of Action or Discussion: Cancelled Historic Resources Board 3rd Wed. Monthly, 5:00 PM City Hall Lower Level, B-7 Department: Community & Library Services Meeting Date: 2/21/24 Summary of Action or Discussion: Meeting cancelled due to lack of quorum. 79 I I 4 FEBRUARY 2024 ACTIVITY REPORT FOR REGIONAL AGENCIES AND CITY BOARDS, COMMITTEES, AND COMMISSIONS (BCC) Intergovernmental Relations Committee 3rd Wed., Monthly, 4:00 p.m. Department: City Manager's Office Meeting Date: 2/21/24 Link to Meeting Details Summary of Action or Discussion: IRC voted to approve January 2024 minutes. TJ Stapleton, Stapleton & Associates, who is the federal lobbyist updated the committee on the pending FY24 budget. Once the FY25 budget is underway, the City will be able to submit for federal funding for a variety of capital projects and programs. Louie Brown, of Kahn Soares & Conway, who is the state lobbyist, updated the committee on the growing CA deficit. The last date to submit legislative items was on February 16. At this point there are about 2100 bills, 600 of which are placeholder/spot bills. Brown will work with staff to winnow down those bills that the City should monitor. Discussion ensued regarding AB1999 (Irwin) Electricity: fixed charges. This bill is an urgency bill that would overturn AB205 (2021-22) that mandates the CPUC to established fixed-rate, income-based charges. A 2/3 vote is required rather than a simple majority. The next meeting is scheduled for March 20th at 4PM. Citizen Infrastructure Advisory Board / Public Works Commission 3rd Wed., Monthly5:00 PM Utilities Yard Department: Public Works Meeting Date: 2/21/24 Link to Meeting Details Summary of Action or Discussion: CIAB/PWC met to review the Traffic Impact Fee Fund Annual Compliance Report for Fiscal Year 2022/23, Planned Local Drainage Facilities Fund Annual Compliance Report for Fiscal Year 2022/23, and Sanitary Sewer Facilities Fund Annual Compliance Report Fiscal Year 2022/23. Homeless Task Force 3rd Wednesday, 3:00 p.m., City Hall Lower Level, B-7 Meeting Date: 2/21/24 Summary of Action or Discussion: Staff provided an overview 80 I I 5 FEBRUARY 2024 ACTIVITY REPORT FOR REGIONAL AGENCIES AND CITY BOARDS, COMMITTEES, AND COMMISSIONS (BCC) Department: Police of the recent Point in Time Count. Results will not likely be released by the County for several months. Staff presented updated drawings for the future development of the current Navigation Center site, which included a discussion on future funding of homeless services. Harbour Commission 4th Thurs. Monthly, 5:00 PM City Hall Lower Level, B-8 Department: Fire Meeting Date: 2/22/24 Link to Meeting Details Summary of Action or Discussion: The Commission received reports from Vessels and Watercraft, Water Quality, Policy and Infrastructure Ad Hoc Committees. Action was taken to recommend to the City Council to direct staff to review and update the licensing, permitting and contracting requirements for businesses that rent kayaks, paddle boards and/or electric boats (e.g., Duffy Boats) in Huntington Harbour. The Commission also recommended that the City Council adopt and direct the City to implement an optimal water quality improvement plan. Under Member Comments, Commissioners asked to be updated on the trash collection rovers and data pods in the Harbour and to know how much of the $3.5 million in funding from the Monsanto settlement has been spent. Citizen Participation Advisory Board (CPAB) 1st Thurs., Monthly January - June and as needed, 6:00 PM City Hall Lower Level B8 Department: Community Development Meeting Date: 2/22/24 Link to Meeting Details Summary of Action or Discussion: The Board voted unanimously to approve minutes from the Citizen Participation Advisory Board meeting of February 1, 2024. Board Members voted unanimously to provide City Council with a primary and secondary recommendations of CDBG public services funding allocations. In addition, the Board voted unanimously to provide recommendations to the City Council for adjusting program funding levels if the City's final annual CDBG allocation from the U.S. Department of Housing and Urban Development is higher or lower than anticipated. 81 I I 6 FEBRUARY 2024 ACTIVITY REPORT FOR REGIONAL AGENCIES AND CITY BOARDS, COMMITTEES, AND COMMISSIONS (BCC) February 26–29, 2024 Communications Committee 4th Tues., Monthly 3:30 p.m., City Hall, 4th Floor Department: City Manager's Office Meeting Date: 2/27/24 Link to Meeting Details Summary of Action or Discussion: Discussed programing on Channel 3, monthly celebration calendar, social media stats, and upcoming March events. Huntington Central Park Collaborative Last Tuesday of the Month, 4:30-6:40 p.m. City Hall Lower Level, B-8 Department: Community & Library Services Meeting Date: 2/27/24 Summary of Action or Discussion: Cancelled Personnel Commission 3rd Wed., Quarterly, 5:30 PM Meeting Room B-8 Department: Human Resources Special Meeting Date: 2/27/24 Link to Meeting Details Summary of Action or Discussion: Approved revisions to Job Class Specifications of Fire Captain, Water Quality Supervisor and Economic Development Project Manager Planning Commission 2nd & 4th Tues., Monthly, 6:00 PM City Hall Council Chambers Department: Community Development Meeting Date: 2/27/24 Summary of Action or Discussion: Cancelled Supplemental Employee Retirement Plan and Trust Board Quarterly Virtual Meeting, Zoom Department: City Treasurer's Office Meeting Date: 2/28/24 Link to Meeting Details Summary of Action or Discussion: The Board reviewed the Supplemental Employee Retirement Plan Quarterly Investment Portfolio Presentation. 82 I I 7 FEBRUARY 2024 ACTIVITY REPORT FOR REGIONAL AGENCIES AND CITY BOARDS, COMMITTEES, AND COMMISSIONS (BCC) Finance Commission Every 4th Wednesday, Monthly, 5:00 p.m. Council Chambers Department: Finance Meeting Date: 2/28/24 Link to Meeting Details Summary of Action or Discussion: Update provided on the Finance Commission letters to the City Council regarding real estate purchases and procedures, unfunded accrued liabilities, and lease coordination. Discussion of Fire Department Overtime, Vacancy Report and GASB Reporting. 83 I I 8 FEBRUARY 2024 ACTIVITY REPORT FOR REGIONAL AGENCIES AND CITY BOARDS, COMMITTEES, AND COMMISSIONS (BCC) Community & Regional Agencies - Updates Website Association of California Cities (ACCOC) Strickland https://www.accoc.org/ ACCOC Legislative - Regulatory Committee Bolton https://www.accoc.org/legislative-regulatory California Coastal Coalition (CalCoast) Board 2-3 meetings/year, various places www.calcoast.org City Selection Committee (held w/League of Cities OC Division meeting) https://cob.ocgov.com/boards-commissions- committees/city-selection-committee Huntington Beach Chamber of Commerce Government Affairs Committee Quarterly, meeting time varies. Golden West College, 15744 Golden West St. Admin Bldg. 4-Room137 https://hbchamber.com/advocacy League of California Cities - OC Executive Board https://www.calcities.org/get- involved/regional-divisions/orange-county- division 84 I I 9 FEBRUARY 2024 ACTIVITY REPORT FOR REGIONAL AGENCIES AND CITY BOARDS, COMMITTEES, AND COMMISSIONS (BCC) League of California Cities - Environmental Quality Committee https://www.calcities.org/advocacy/policy- areas-and-committees/environmental-quality O.C. Council of Governments (OCCOG) 4th Thurs., Monthly, 10:30 AM Irvine City Hall City Council Chambers 1 Civic Center Plaza, Irvine https://www.occog.com/ O.C. Housing Finance Trust Fund https://ochft.org/ O.C. Mosquito and Vector Control District https://www.ocvector.org/board-meetings O.C Emergency Medical Care Committee https://ochealthinfo.com/providers- partners/emergency-medical- services/committees-groups/emergency- medical-care-committee 85 I I 10 FEBRUARY 2024 ACTIVITY REPORT FOR REGIONAL AGENCIES AND CITY BOARDS, COMMITTEES, AND COMMISSIONS (BCC) O.C. Sanitation District (OCSD) Board of Directors (Plus Committee assigned by Chair) 4th Wed of every month, 6:00 PM, Virtual Meeting via Zoom / OCSD Administrative Office 10844 Ellis Ave., Fountain Valley, CA https://www.ocsan.gov/about-us/board-of- directors Orange County Power Authority (OCPA) Term: Four (4) years 2nd Tues, 10 AM, Monthly Virtual Meeting via Zoom https://www.ocpower.org/ OCTA Citizen Advisory Committee https://www.octa.net/about/about- octa/public-committees/citizens-advisory- committee/overview/ Santa Ana River Flood Protection Agency (SARFPA) Executive Committee Meetings: 4th Thurs, 4:00 PM, January, March, May, July, September Via Zoom Full Agency Meetings: June, November https://ocip.ocpublicworks.com/service- areas/oc-infrastructure-programs/santa- ana-river-project/santa-ana-river-flood- protection-0 Southern California Association of Governments (SCAG) Regional Council District 64 Delegate* 1st Thurs of every month, 9:00 AM – 2:00 PM Virtual Meeting / SCAG Office, Downtown L.A. https://scag.ca.gov/ 86 I I 11 FEBRUARY 2024 ACTIVITY REPORT FOR REGIONAL AGENCIES AND CITY BOARDS, COMMITTEES, AND COMMISSIONS (BCC) SCAG - Emerging Technology Committee https://scag.ca.gov/emerging-technologies- committee Visit Huntington Beach Advocacy Committee Monthly, usually Tuesday at 3:30 PM but varies. Virtual Meeting via Zoom / VHB Office, 155 Fifth Street, Suite 111, Huntington Beach https://www.surfcityusa.com/about- us/transparency-accountability/ 87 I I City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-180 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Eric G. Parra, Interim City Manager VIA:Travis K. Hopkins, Assistant City Manager PREPARED BY:Shannon Levin, Council Policy Analyst Subject: Consider position on legislation pending before the State Legislature, as recommended by the Intergovernmental Relations Committee (IRC) Statement of Issue: On February 21, 2024, the Intergovernmental Relations Committee (IRC) comprised of Mayor Gracey Van Der Mark and Mayor Pro Tem Pat Burns (with Council Member Tony Strickland absent), discussed legislative items with relevance to Huntington Beach. Following discussion, the IRC chose to take positions on various State bills, which are presented to the City Council for consideration. Financial Impact: Not applicable Recommended Action: A) SUPPORT AB 1999 (Irwin) Electricity: fixed charges, and send a letter of support. B) Receive and file letters of support for AB 1773 (Dixon)e-bikes and AB 1174 (Dixon)e-bikes. Alternative Action(s): Do not approve recommend action and direct staff accordingly. Analysis: AB 1999 (Irwin) Electricity: fixed charges This measure would overturn a provision of a state law passed in 2022 (AB 205) requiring the CPUC to authorize a fixed charge for default residential rates of the State’s largest utility providers and requires these fixed charges to be established on an income-graduated basis so that low-income ratepayers have lower average monthly bills without making any changes in usage. The bill would also cap the fixed charge that CPUC may authorize utility providers to charge customers for grid City of Huntington Beach Printed on 3/13/2024Page 1 of 3 powered by Legistar™88 File #:24-180 MEETING DATE:3/19/2024 maintenance. The income graduated fixed rates may perpetuate inequity and does not include proper accountability for energy providers. The income graduated charges may even disincentivize solar and energy conservation by other residential customers,impact overall system costs and efficiency, and likely increase costs for middle- and high-income customers. Costs associated with the fixed rates include climate driven costs such as burying power lines to reduce wildfire risks and building out infrastructure for electrification and reduction of carbon-based electricity generation. AB 1999 would repeal the provisions described in Public Utilities Code Section 739.9. The bill would instead permit the Commission to authorize fixed charges that do not exceed $5 per residential customer account per month for low-income customers enrolled in the California Alternate Rates for Energy (CARE) program and that do not exceed $10 per residential customer account per month for customers not enrolled in the CARE program. AB 1999 would authorize these maximum allowable fixed charges to be adjusted by no more than the annual percentage increase in the Consumer Price Index for the prior calendar year, beginning January 1, 2016. Also, consistent with the 2024 Legislative Platform,two letters of support were issued regarding public safety: Support legislation that clarifies the public safety strategy for e-bikes and e-bike riders. AB 1773 (Dixon) Vehicles: electric bicycles Existing law prohibits the use of a motorized bicycle on a bicycle path or trail, bikeway, bicycle lane, equestrian trial, or hiking or recreational trail, unless the governing body permits the operation. Existing law also authorizes a local public agency to prohibit the use of an electric bicycle on an equestrian trial, hiking,or recreational trail. AB 1773 clarifies that a boardwalk is included in the definition of recreational trail. Additionally, the bill would impose a fine, not to exceed $35, against a person convicted of an infraction for a violation of an ordinance prohibiting or regulating electric bicycles on recreational trails. AB 1774 (Dixon) Vehicles: electric bicycles AB 1774 would prohibit the sale of any device that can modify the speed capability of an e-bike. Environmental Status: This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Strategic Plan Goal: Non Applicable - Administrative Item For details, visit www.huntingtonbeachca.gov/strategicplan <http://www.huntingtonbeachca.gov/strategicplan>. Attachment(s): City of Huntington Beach Printed on 3/13/2024Page 2 of 3 powered by Legistar™89 File #:24-180 MEETING DATE:3/19/2024 1. AB 1999- Draft Letter of Support 2. AB 1773 and AB 1774- Letters of Support City of Huntington Beach Printed on 3/13/2024Page 3 of 3 powered by Legistar™90 CITY OF HUNTINGTON BEACH 2000 MAIN STREET, HUNTINGTON BEACH, CALIFORNIA 92648-2702 GRACEY VAN DER MARK MAYOR Office: 714.536.5553 March 11, 2024 Honorable Cottie Petrie-Norris Assembly Utilities and Energy Committee 1020 O Street, Rm 408A Sacramento, CA 95814 Re: AB 1999 (Irwin)—Support Dear Chair Petrie-Norris: The City of Huntington Beach writes to express support for Assembly Bill 1999, as introduced on January 30, 2024. This measure would overturn a provision of a state law passed in 2022 (AB 205) that orders the California Public Utilities Commission (CPUC) t o study and institute an “income-graduated fixed charge” for customers of the State’s largest utility providers. The bill would also cap the fixed charge that CPUC may authorize utility providers to charge customers for grid maintenance. Based on significant feedback from residents of the City of Huntington Beach, we object to the current income graduated fixed charge which perpetuates inequity and does not include the proper accountability measures for energy providers to their customers in California. Our residents and businesses use energy wisely, invest in alternative energy resources and are attentive to the growing cost of living in the State. Income graduated fixed charges are in addition to the extraordinary rate hikes already approved by the CPUC and imposed on our residents. Repealing the existing income based fixed charges through AB 1999 allows our residents to better respond to the increasing cost of living. It also holds the CPUC and utility providers more accountable to daylighting their costs and efforts to hardening and repairing the electricity grid and responding appropriately and fairly to customers’ needs. For these reasons, the City of Huntington Beach supports AB 1999 and respectfully requests an “aye” vote on the measure. Sincerely, Mayor Gracey Van Der Mark cc: Honorable Assembly member Jacqui Irwin Members, Assembly Energy and Utilities Committee Laura Shybut, Chief Consultant, Assembly Energy and Utilities Committee 91 SHARE THIS:Date Published: 01/30/2024 09:00 PM ASSEMBLY BILL NO. 1999 AB-1999 Electricity: fixed charges.(2023-2024) CORRECTED JANUARY 31, 2024 CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION Introduced by Assembly Members Irwin, Addis, Berman, Connolly, Muratsuchi, Papan, Pellerin, Quirk-Silva, Ting, Ward, and Weber (Principal coauthor: Assembly Member Bauer-Kahan) (Principal coauthor: Senator Wiener) (Coauthors: Assembly Members Boerner, Bonta, Friedman, Lee, Low, and Maienschein) (Coauthor: Senator Blakespear) January 30, 2024 An act to amend Section 739.9 of the Public Utilities Code, relating to electricity. LEGISLATIVE COUNSEL'S DIGEST AB 1999, as introduced, Irwin. Electricity: fixed charges. Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law authorizes the commission to adopt new, or expand existing, fixed charges, as defined, for the purpose of collecting a reasonable portion of the fixed costs of providing electrical service to residential customers. Under existing law, the commission may authorize fixed charges for any rate schedule applicable to a residential customer account. Existing law requires the commission, no later than July 1, 2024, to authorize a fixed charge for default residential rates. Existing law requires these fixed charges to be established on an income-graduated basis, with no fewer than 3 income thresholds, so that low-income ratepayers in each baseline territory would realize a lower average monthly bill without making any changes in usage. This bill would repeal the provisions described in the preceding paragraph. The bill would instead permit the commission to authorize fixed charges that, as of January 1, 2015, do not exceed $5 per residential customer account per month for low-income customers enrolled in the California Alternate Rates for Energy (CARE) program and that do not exceed $10 per residential customer account per month for customers not enrolled in the CARE program. The bill would authorize these maximum allowable fixed charges to be adjusted by no more Home Bill Information California Law Publications Other Resources My Subscriptions My Favorites 92 ~~- #~IVE I FORMATION than the annual percentage increase in the Consumer Price Index for the prior calendar year, beginning January 1, 2016. Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime. Because certain provisions of this bill would be a part of the act and therefore a violation of the bill’s requirements or of a commission action implementing its requirements would be a crime, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Vote: majority Appropriation: no Fiscal Committee: yes Local Program: yes THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 739.9 of the Public Utilities Code is amended to read: 739.9. (a) “Fixed charge” means any fixed customer charge, basic service fee, demand differentiated basic service fee, demand charge, or other charge not based on the volume of electricity consumed. (b) Increases to electrical rates and charges in rate design proceedings, including any reduction in the California Alternate Rates for Energy (CARE) program discount, shall be reasonable and subject to a reasonable phase-in schedule relative to the rates and charges in effect before January 1, 2014. (c) Consistent with the requirements of Section 739, the commission may modify the seasonal definitions and applicable percentage of average consumption for one or more climatic zones. (d) The commission may adopt new, or expand existing, fixed charges for the purpose of collecting a reasonable portion of the fixed costs of providing electrical service to residential customers. The commission shall ensure that any approved charges do all of the following: (1) Reasonably reflect an appropriate portion of the different costs of serving small and large customers. (2) Not unreasonably impair incentives for conservation, energy efficiency, and beneficial electrification and greenhouse gas emissions reduction. (3) Are set at levels that do not overburden low-income customers. (e)(1)For the purposes of this section and Section 739.1, the commission may authorize fixed charges for any rate schedule applicable to a residential customer account. The fixed charge shall be established on an income- graduated basis with no fewer than three income thresholds so that a low-income ratepayer in each baseline territory would realize a lower average monthly bill without making any changes in usage. The commission shall, no later than July 1, 2024, authorize a fixed charge for default residential rates. (2)For purposes of this subdivision, “income-graduated” means that low-income customers pay a smaller fixed charge than high-income customers. (e) For purposes of this section and Section 739.1, the commission may, beginning January 1, 2015, authorize fixed charges that do not exceed ten dollars ($10) per residential customer account per month for customers not enrolled in the CARE program and five dollars ($5) per residential customer account per month for customers enrolled in the CARE program. Beginning January 1, 2016, the maximum allowable fixed charge may be adjusted by no more than the annual percentage increase in the Consumer Price Index for the prior calendar year. This subdivision applies to any default rate schedule, at least one optional tiered rate schedule, and at least one optional time-variant rate schedule. (f) Notwithstanding the requirements of subdivision (d) of Section 739 and Section 739.7, the commission shall not apply the composite tier method to the treatment of any revenues resulting from any fixed charge adopted pursuant to this section. 93 SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution. ___________________ CORRECTIONS: Heading—Lines 4 and 7. ___________________ 94 95 CITY OF HUNTINGTON BEACH 2000 MAIN STREET, HUNTINGTON BEACH, CALI FORNIA 92648-2702 GRACEY VAN DER MARK MAYOR March 8, 2024 The Honorable Lori Wilson Chair, Assembly Transportation Committee California State Assembly 1021 0 Street Sacramento, CA 95814 RE: AB 1773 (Dixon) -SUPPORT Dear Chair Wilson, The City of Huntington Beach writes to express our support of Assembly Bill 1773, by Assembly Member Dixon, Which restores local authority to regulate the use of bicycles and electric bicycles (E-Bikes) on public boardwalks. The public boardwalks in Huntington Beach is one of the attributes that makes our city a destination spot for many tourists, and we take great pride in making them safe. The popularity of E-bikes has created numerous public safety issues, due to the high speed of travel and inexperienced riders. AB 1773 adds public boardwalk to the existing definition of recreational trail which clarifies our City's ability to make our boardwalk safe for those who ride E-bikes and pedestrians. For these reasons, the City of Huntington Beach supports AB 1773 and requests your Aye vote when it comes before your committee. Sincerely, Cc: Members, Assembly Transportation Committee The Honorable Diane Dixon Fax 7 14.536.5233 Page 1 of 1 Offi ce: 7 14 .536.5553 96 CITY OF HUNTINGTON BEACH 2000 MAIN STREET, HUNTINGTON BEACH, CALIFORNIA 92648-2702 GRACEY VAN DER MARK MAYOR March 8, 2024 The Honorable Lori Wilson Chair, Assembly Transportation Committee California State Assembly 1021 0 Street Sacramento, CA 95814 RE: AB 1774 (Dixon) -SUPPORT Dear Chair Willson, The City of Huntington Beach writes to express its support for Assembly Bill 1774, authored by Assembly Member Dixon, which will prohibit the sale of a product or device that modifies the speed ability of an electric bicycle. California law caps the top speed of an electric bike at 28 miles per hour. E-bikes are exempt from driver's licenses and license plate requirements. Unfortunately, modifications that increase the maximum speed of electric bikes are easy to purchase and install. Increasing the maximum speed creates serious safety issues on our local streets, sidewalks and public areas. AB 177 4 is necessary to allow local governments to maintain safety where electric bikes are used. For these reasons, the City of Huntington Beach requests your support for AB 1774 when it comes before your committee . Sincerely, Cc: Members, Assembly Transportation Committee The Honorable Diane Dixon Fax 714 .536 .5233 Page 1 of 1 Office: 7 14.536.5553 SHARE THIS:Date Published: 02/22/2024 09:00 PM ASSEMBLY BILL NO. 1773 AB-1773 Vehicles: electric bicycles.(2023-2024) AMENDED IN ASSEMBLY FEBRUARY 22, 2024 CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION Introduced by Assembly Member Dixon January 03, 2024 An act to amend Section 21100 of the Vehicle Code, relating to vehicles. An act to amend Section 21207.5 of the Vehicle Code, relating to vehicles. LEGISLATIVE COUNSEL'S DIGEST AB 1773, as amended, Dixon. Vehicles: bicycles on boardwalks. Vehicles: electric bicycles. Existing law prohibits the use of a motorized bicycle on a bicycle path or trail, bikeway, bicycle lane, equestrian trial, or hiking or recreational trail, as specified, unless the governing body of a local public agency, which has jurisdiction over the path or trail, permits the operation. Existing law authorizes a governing body of a local public agency, which has jurisdiction over the path or trail, to prohibit the use of an electric bicycle on an equestrian trial, or hiking or recreational trail. A violation of the Vehicle Code is a crime and a person convicted of an infraction for a violation of either the Vehicle Code or a local ordinance adopted pursuant to the code is subject to a specified fine schedule, except as otherwise provided. This bill would clarify that a recreational trail for these purposes includes a boardwalk, as defined, regardless of whether the facility also provides bicycle access. Notwithstanding specified law, the bill would impose a fine, not to exceed $35, against a person convicted of an infraction for a violation of an ordinance prohibiting or regulating electric bicycles on recreational trails. By expanding the scope of a crime, this bill would impose a state- mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Existing law authorizes a local authority to adopt rules and regulations by ordinance or resolution regarding the operation of bicycles on public sidewalks. Home Bill Information California Law Publications Other Resources My Subscriptions My Favorites 97 ~~- #~IVE I FORMATION This bill would additionally authorize a local authority to adopt rules and regulations by ordinance or resolution regarding the operation of bicycles on boardwalks. Vote: majority Appropriation: no Fiscal Committee: noyes Local Program: noyes THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 21207.5 of the Vehicle Code is amended to read: 21207.5. (a) Notwithstanding Sections 21207 and 23127 of this code, or any other law, a motorized bicycle shall not be operated on a bicycle path or trail, bikeway, bicycle lane established pursuant to Section 21207, equestrian trail, or hiking or recreational trail, unless it is within or adjacent to a roadway or unless the local authority or the governing body of a public agency having jurisdiction over the path or trail permits, by ordinance, that operation. (b) The local authority or governing body of a public agency having jurisdiction over an equestrian trail, or hiking or recreational trail, may prohibit, prohibit or regulate, by ordinance, the operation of an electric bicycle or any class of electric bicycle on that trail. (c) The Department of Parks and Recreation may prohibit the operation of an electric bicycle or any class of electric bicycle on any bicycle path or trail within the department’s jurisdiction. (d) (1) For purposes of this section, a “recreational trail” includes a boardwalk, regardless of whether the facility also provides bicycle access. (2) For purposes of this section, a “boardwalk” means a walkway adjacent to an ocean beach that is no more than three miles in length and provides pedestrian access to beach recreational areas. (3) Notwithstanding Section 42001, if a local authority enacts an ordinance pursuant to subdivision (b) that applies specifically to electric bicycles on a boardwalk, and not to bicycles propelled exclusively by human power, a person convicted of an infraction for a violation of that ordinance shall be punished by a fine not exceeding thirty-five dollars ($35). SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution. SECTION 1.Section 21100 of the Vehicle Code is amended to read: 21100.Local authorities may adopt rules and regulations by ordinance or resolution regarding all of the following matters: (a)Regulating or prohibiting a procession or assemblage on the highways. (b)Licensing and regulating the operation of vehicles for hire and drivers of passenger vehicles for hire. (c)Regulating traffic by means of traffic officers. (d)Regulating traffic by means of official traffic control devices meeting the requirements of Section 21400. (e)(1)Regulating traffic by means of a person given temporary or permanent appointment for that duty by the local authority when official traffic control devices are disabled or otherwise inoperable, at the scene of an accident or disaster, or at a location that may require traffic direction for orderly traffic flow. (2)A person shall not be appointed pursuant to this subdivision unless and until the local authority has submitted to the commissioner or to the chief law enforcement officer exercising jurisdiction in the enforcement of traffic laws within the area in which the person is to perform the duty, for review, a proposed program of instruction for the training of a person for that duty and unless and until the commissioner or other chief law enforcement officer approves the proposed program. The commissioner or other chief law enforcement officer shall approve a proposed program if they reasonably determine that the program will provide sufficient training for persons assigned to perform the duty described in this subdivision. (f)Regulating traffic at the site of road or street construction or maintenance by a person authorized for that duty98 by the local authority. (g)(1)Licensing and regulating the operation of tow truck service or tow truck drivers whose principal place of business or employment is within the jurisdiction of the local authority, excepting the operation and operators of any auto dismantlers’ tow vehicle licensed under Section 11505 or any tow truck operated by a repossessing agency licensed under Chapter 11 (commencing with Section 7500) of Division 3 of the Business and Professions Code and its registered employees. (2)The Legislature finds that the safety and welfare of the general public is promoted by permitting local authorities to regulate tow truck service companies and operators by requiring licensure, insurance, and proper training in the safe operation of towing equipment, thereby ensuring against towing mistakes that may lead to violent confrontation, stranding motorists in dangerous situations, impeding the expedited vehicle recovery, and wasting state and local law enforcement’s limited resources. (3)This subdivision does not limit the authority of a city or city and county pursuant to Section 12111. (h)Operation of bicycles and, as specified in Section 21114.5, electric carts by physically disabled persons or persons 50 years of age or older, on public sidewalks and boardwalks. (i)Providing for the appointment of nonstudent school crossing guards for the protection of persons who are crossing a street or highway in the vicinity of a school or while returning thereafter to a place of safety. (j)Regulating the methods of deposit of garbage and refuse in streets and highways for collection by the local authority or by any person authorized by the local authority. (k)Regulating or authorizing the removal by peace officers of vehicles unlawfully parked in a fire lane, as described in Section 22500.1, on private property. A removal pursuant to this subdivision shall be consistent, to the extent possible, with the procedures for removal and storage set forth in Chapter 10 (commencing with Section 22650). (l)Regulating mobile billboard advertising displays, as defined in Section 395.5, including the establishment of penalties, which may include, but are not limited to, removal of the mobile billboard advertising display, civil penalties, and misdemeanor criminal penalties for a violation of the ordinance or resolution. The ordinance or resolution may establish a minimum distance that a mobile billboard advertising display shall be moved after a specified time period. (m)Licensing and regulating the operation of pedicabs for hire, as defined in Section 467.5, and operators of pedicabs for hire, including requiring one or more of the following documents: (1)A valid California driver’s license. (2)Proof of successful completion of a bicycle safety training course certified by the League of American Bicyclists or an equivalent organization as determined by the local authority. (3)A valid California identification card and proof of successful completion of the written portion of the California driver’s license examination administered by the department. The department shall administer, without charging a fee, the original driver’s license written examination on traffic laws and signs to a person who states that they are, or intend to become, a pedicab operator and who holds a valid California identification card or has successfully completed an application for a California identification card. If the person achieves a passing score on the examination, the department shall issue a certificate of successful completion of the examination bearing the person’s name and identification card number. The certificate shall not serve in lieu of successful completion of the required examination administered as part of any subsequent application for a driver’s license. The department is not required to enter the results of the examination into the computerized record of the person’s identification card or otherwise retain a record of the examination or results. (n)(1)This section does not authorize a local authority to enact or enforce an ordinance or resolution that establishes a violation if a violation for the same or similar conduct is provided in this code, nor does it authorize a local authority to enact or enforce an ordinance or resolution that assesses a fine, penalty, assessment, or fee for a violation if a fine, penalty, assessment, or fee for a violation involving the same or similar conduct is provided in this code. (2)This section does not preclude a local authority from enacting parking ordinances pursuant to existing authority in Chapter 9 (commencing with Section 22500) of Division 11. 99 (o)(1)Regulating advertising signs on motor vehicles parked or left standing upon a public street. The ordinance or resolution may establish a minimum distance that the advertising sign shall be moved after a specified time period. (2)Paragraph (1) does not apply to any of the following: (A)Advertising signs that are permanently affixed to the body of, an integral part of, or a fixture of a motor vehicle for permanent decoration, identification, or display and that do not extend beyond the overall length, width, or height of the vehicle. (B)If the license plate frame is installed in compliance with Section 5201, paper advertisements issued by a dealer contained within that license plate frame or any advertisements on that license plate frame. (3)As used in paragraph (2), “permanently affixed” means any of the following: (A)Painted directly on the body of a motor vehicle. (B)Applied as a decal on the body of a motor vehicle. (C)Placed in a location on the body of a motor vehicle that was specifically designed by a vehicle manufacturer, as defined in Section 672, and licensed pursuant to Section 11701, in compliance with both state and federal law or guidelines, for the express purpose of containing an advertising sign. 100 SHARE THIS:Date Published: 01/03/2024 09:00 PM ASSEMBLY BILL NO. 1774 AB-1774 Vehicles: electric bicycles.(2023-2024) CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION Introduced by Assembly Member Dixon January 03, 2024 An act to amend Section 24016 of the Vehicle Code, relating to vehicles. LEGISLATIVE COUNSEL'S DIGEST AB 1774, as introduced, Dixon. Vehicles: electric bicycles. Existing law defines an electric bicycle as a bicycle equipped with fully operable pedals and an electric motor of less than 750 watts, and requires electric bicycles to comply with specified equipment and manufacturing requirements. Existing law prohibits a person from tampering with or modifying an electric bicycle so as to change the speed capability of the bicycle, unless they appropriately replace the label indicating the classification required, as specified. A violation of the Vehicle Code is a crime. This bill would clarify that the exception to this prohibition only applies if the bicycle continues to meet the definition of an electric bicycle. This bill would prohibit a person from selling a product or device that can modify the speed capability of an electric bicycle such that it no longer meets the definition of an electric bicycle. Because the bill would prohibit a person from selling certain products, the violation of which would be a crime, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Vote: majority Appropriation: no Fiscal Committee: yes Local Program: yes THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 24016 of the Vehicle Code is amended to read: 24016. (a) An electric bicycle described in subdivision (a) of Section 312.5 shall meet the following criteria: Home Bill Information California Law Publications Other Resources My Subscriptions My Favorites 101 ~~- #~IVE I FORMATION (1) Comply with the equipment and manufacturing requirements for bicycles adopted by the United States Consumer Product Safety Commission (16 C.F.R. 1512.1, et seq.). (2) Operate in a manner so that the electric motor is disengaged or ceases to function when the brakes are applied, or operate in a manner such that the motor is engaged through a switch or mechanism that, when released or activated, will cause the electric motor to disengage or cease to function. (b) A person operating an electric bicycle is not subject to the provisions of this code relating to financial responsibility, driver’s licenses, registration, and license plate requirements, and an electric bicycle is not a motor vehicle. (c) Every manufacturer of an electric bicycle shall certify that it complies with the equipment and manufacturing requirements for bicycles adopted by the United States Consumer Product Safety Commission (16 C.F.R. 1512.1, et seq.). (d) A person shall not tamper with or modify an electric bicycle described in subdivision (a) of Section 312.5 so as to change the speed capability of the bicycle, unless he or she the bicycle continues to meet the definition of an electric bicycle under subdivision (a) of Section 312.5 and the person appropriately replaces the label indicating the classification required in subdivision (c) of Section 312.5. (e) A person shall not sell a product or device that can modify the speed capability of an electric bicycle such that it no longer meets the definition of an electric bicycle under subdivision (a) of Section 312.5. SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution. 102 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-188 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Eric G. Parra, Interim City Manager VIA:Ashley Wysocki, Director of Community & Library Services PREPARED BY:Molly Uemura, Community & Library Services Manager Subject: Approve and execute a three-year Professional Services Contract between the City of Huntington Beach and PSQ Productions for production and management service of the annual Independence Day Celebration Statement of Issue: In order to facilitate the City’s annual Independence Day celebration, there is a need to approve a professional services contract between the City and PSQ Productions (Contractor), to manage and produce the 2024, 2025, and 2026 Independence Day Celebration events, which include the annual Surf City 5K Run, 4th of July Parade, and Fireworks over the ocean. Financial Impact: Sufficient appropriations are budgeted in the General Fund Fourth of July account 10045302 to cover payments due to PSQ Productions through the end of this fiscal year. Future fiscal years will be budgeted accordingly. Compensation through the three-year life of the contract is set at the following: • $150,000 in 2024 • $160,500 in 2025 • $171,735 in 2026 Recommended Action: Approve and authorize the Mayor and City Clerk to execute “Professional Services Contract Between the City of Huntington Beach and PSQ Productions for Production and Management Service of the Annual Independence Day Parade.” Alternative Action(s): Do not approve the recommended action and direct staff accordingly. Analysis: City of Huntington Beach Printed on 3/13/2024Page 1 of 3 powered by Legistar™103 File #:24-188 MEETING DATE:3/19/2024 The previous contractor’s professional services contract expired September 30, 2023. Per Municipal Code 3.03, all professional services contracts over $30,000 must be competitively bid. Given the scope of services needed for the production and management of the Independence Day Celebration, as well as the direction from Independence Day Board council liaisons, a new Request for Proposal (RFP) was released for contracted services to manage and produce the City’s Celebration, including the annual Surf City 5K Run, 4th of July Parade, and Fireworks over the ocean. On September 7, 2023, the RFP was released. A total of three firms responded by the closing of the qualification process on Friday, October 20, 2023. A review panel was established to evaluate and score each submittal. The review panel, comprised of City staff representing three different City departments, thoroughly reviewed all three proposals based on objective evaluation criteria and established a weighted score for each qualified applicant. Based on the scores, all three firms were invited to present their proposals to the panel via in-person interview, with PSQ being the recommended contractor. Upon approval, the Professional Services Contract (Contract) will have a three-year term and will automatically terminate three (3) years after commencement on September 1, 2026. The Contract may be extended up to two (2) one-year terms upon mutual consent of both parties. The Contract establishes areas of responsibility of the City and PSQ Productions for the production and management service of the annual Independence Day Celebration. A summary of responsibilities for the Independence Day celebration is listed below. A more detailed listing is included in Exhibit B of the Contract (Attachment 1). PSQ Production Responsibilities: a) Planning and execution of the 4th of July Parade, Run, and Fireworks Show . b) Sponsorship procurement and sponsor recognition. c) Merchandise, overall event logistics. d) VIPs, entertainment, and public relations; music and entertainment procurement if applicable. e) Sub-contractor agreements, management, and payment. f) Volunteer development. g) Public/media relations. h) Implement all logistical plans. i) Provide general event production and management. j) Provide research and planning. k) Marketing services. l) Budget development, management, reconciliation, and regular reporting to the City . m) Collaborate with the Independence Day Board for community sponsorships and development of the event theme, logo, and selection of parade participants and grand marshals. City Responsibilities: a) Assign a staff coordinator to work directly with Contractor. b) Provide a contingency allowance of no more than $10,000 to cover variations that may occur in the expected values of elements of cost or schedule. c) Assist with promotion and marketing of the event. City of Huntington Beach Printed on 3/13/2024Page 2 of 3 powered by Legistar™104 File #:24-188 MEETING DATE:3/19/2024 With regard to other event costs, any additional event expenses will be covered through other revenue streams (i.e., parade entry fees, event ticket sales, entry fees, merchandise sales, and sponsorships), which will be coordinated and handled directly by the Contractor. Historically, the increased parking charge collected at the south beach attended lots and the Main Promenade Parking Structure over the three-day period raises between $120,000 and $135,000 (depending on the day of the week that July 4th falls on) and have been used to offset the Contractor’s fee. Within 30 days of the Event, Contractor and City will reconcile all revenues and expenses for the Event. If there is a net positive in the account, the funds will remain in the established Independence Day account to fund the Event in upcoming years. If expenses exceed revenues, the City may be responsible for reimbursing PSQ Productions pending a review by City and Contractor of the Event budget and all approved expenses and revenue opportunities. Environmental Status: This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Strategic Plan Goal: Non Applicable - Administrative Item Attachment(s): 1. Professional Services Contract between the City of Huntington Beach and PSQ Productions for production and management service of the Annual Independence Day Celebration. 2. PSQ Productions PowerPoint. 3. 2/16 Supplemental Communications City of Huntington Beach Printed on 3/13/2024Page 3 of 3 powered by Legistar™105 PROFESSIONAL SERVICES CONTRACT BETWEEN THE CITY OF HUNTINGTON BEACH AND PSQ PRODUCTIONS. FOR PRODUCTION AND MANAGEMENT SERVICE OF THE ANNUAL INDEPENDENCE DAY CELEBRATION THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY", and PSQ Productions, LLC., a corporation, hereinafter referred to as "CONTRACTOR". WHEREAS, CITY desires to engage the services of a CONTRACTOR m producing the 2024, 2025 and 2026, Independence Day Celebration; and Pursuant to documentation on file in the office of the City Clerk, the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with; and CONTRACTOR has been selected to perform these services, NOW, THEREFORE, it is agreed by CITY and CONTRACTOR as follows: 1. SCOPE OF SERVICES CONTRACTOR shall provide all services as described in Exhibit "A", which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the "PROJECT." CONTRACTOR hereby designates Mark Entner, who shall represent it and be its sole contact and agent in all communications with CITY and CONTRACTOR during the performance of this Agreement. 1 106 2. CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONTRACTOR in the performance of this Agreement. 3. TERM; TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of CONTRACTOR are to commence on ______ (the "Commencement Date"). This Agreement shall automatically terminate three (3) years after commencement on September 1, 2026, unless extended or sooner terminated as provided herein. Upon mutual agreement by both Parties, the Agreement may be extended up to two (2) 1-year terms. All tasks specified in Exhibit "A" shall be completed on or before July 4 of each year in 2024, 2025 and 2026. The time for performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit "A". This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONTRACTOR. In the event the Commencement Date precedes the Effective Date, CONTRACTOR shall be bound by all terms and conditions as provided herein. 4. COMPENSATION In consideration of the performance of the services described herein, CITY agrees to pay CONTRACTOR a fixed Fee in quarterly installments as specified in Exhibits "B", which is attached hereto and incorporated by reference into this Agreement. The Fee, including all costs and expenses, not to exceed ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000) in 2024; ONE HUNDRED SIXTY THOUSAND, FIVE HUNDRED DOLLARS ($160,500) in 2025; ONE HUNDRED SEVENTY-ONE 2 107 108 THOUSAND, and SEVEN HUNDRED THIRTY-FIVE DOLLARS ($171,735) in 2026. Compensation for CONTRACTOR and CITY shall also include additional revenue opportunities as specified in Exhibit "B". 5. EXTRA WORK In the event CITY requires additional services not included in Exhibit "A" or changes in the Scope of Services described in Exhibit "A", CONTRACTOR will undertake such work only after receiving written authorization from CITY. Additional compensation for such extra work shall be allowed only if the prior written approval of CITY is obtained. 6. METHOD OF PAYMENTS CONSULT ANT shall be paid pursuant to the terms of Exhibit "B". 7. DISPOSITION OF PLANS, ESTIMATES AND OTHER DOCUMENTS CONTRACTOR agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, site plans, vendor lists, sponsor contracts and agreements, parade entry contact information, timelines, runner and volunteer databases, service provider invoices and contact information, parade scripts, web domains, login and passwords for websites and social media accounts, maps/routes, memoranda, letters, spreadsheets, and other documents, shall belong to CITY, and CONTRACTOR shall turn these materials over to CITY immediately upon request, or upon expiration or termination of this Agreement, or upon completion of PROJECT, whichever shall occur first. These materials may be used by CITY as it sees fit. 3 8. CONTINGENCY ALLOWANCE CITY shall provide a Contingency Allowance of no more than TEN- THOUSAND DOLLARS ($10,000) to cover variations that may occur in the expected values of elements of cost or schedule, however, do not apply to scope or quality. City must preapprove at its sole discretion any Contingency Allowance. 9. HOLD HARMLESS CONTRACTOR 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, judgements, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with CONTRACTOR' s ( or CONTRACTOR's sub-contractors, if any) negligent (or alleged negligent) performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by CONTRACTOR, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONTRACTOR will conduct all defense at its sole cost and expense and CITY shall approve selection of CONTRACTOR'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 CONTRACTOR. 4 109 10. PROFESSIONAL LIABILITY INSURANCE CONTRACTOR shall obtain and furnish to CITIY a professional liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for CONTRACTOR's professional liability in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the aggregate. The above- mentioned insurance shall not contain a self-insured retention, "deductible" or any other similar form of limitation on the required coverage except with the express written consent of CITY. A claims-made policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements). B. CONTRACTOR shall notify CITY of circumstances or incidents that might give rise to future claims. CONTRACTOR will make every effort to maintain similar insurance during the required extended period of coverage following PROJECT completion. If insurance is terminated for any reason, CONTRACTOR agrees to purchase an extended reporting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement. If CONTRACTOR fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with proof that insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY's election, to forthwith terminate this Agreement. Such termination shall not affect 5 110 CONTRACTOR's right to be paid for its time and materials expended prior to notification of termination. CONTRACTOR waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. 11. CERTIFICATE OF INSURANCE Prior to commencing performance of the work hereunder, CONTRACTOR shall furnish to CITY a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement; the certificate shall: A. provide the name and policy number of each carrier and policy; B. state that the policy is currently in force; and C. promise that such policy shall not be suspended, voided or canceled by either party, reduced in coverage or in limits except after thirty (30)days' prior written notice; however, ten (10) days' prior written notice if the event of cancellation for nonpayment of premium. CONTRACTOR shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by City. The requirement for carrying the forgoing insurance coverage shall not derogate from CONTRACTOR's defense, hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. CONTRACTOR shall pay, in a prompt and timely manner, the premiums on the insurance hereinabove required. 6 111 12. INDEPENDENT CONTRACTOR CONTRACTOR 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. CONTRACTOR shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONTRACTOR and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder. 13. TERMINATION OF CONTRACT A. CITY may terminate this Agreement without cause, effective after 30 days' prior written notice to CONTRACTOR ("Notice Period"). In the case of termination without cause: (i)CITY shall release CONTRACTOR from all obligations under this contract, and shall assume full liability for all existing vendor, subcontractor, supplier, sponsor, talent and venue contracts that have been entered into as part of the Event and previously approved by CITY. (ii)CONTRACTOR shall be entitled to payment for the current PROJECT year up until the date of termination and shall be paid the outstanding balance of the fee within seven (7) days of rece1vmg a final mvo1ce detailing work completed. CONTRACTOR shall also be entitled to retain all commissions 7 112 earned through the sales of CITY-approved sponsorships prior to the date of termination, and, in the case of multi-year sponsorship agreements, CONTRACTOR may retain said commissions, however, the City shall not be responsible for the payment thereof. (iii)CONTRACTOR shall deliver an audit report to CITY detailing the status of the PROJECT budget and all accounts payable/receivable and transfer the balance of all funds held on behalf of CITY, less applicable sponsor commissions due to the CONTRACTOR, to CITY's designated fiduciary or account no later than the conclusion of the Notice Period. (iv)CONTRACTOR shall work amicably with CITY to effectively transfer all PROJECT communications, contacts, materials and operations to CITY-designated agents and assignees. 14. ASSIGNMENT AND DELEGATION This Agreement is a personal service contract and the work hereunder shall not be assigned, delegated or subcontracted by CONTRACTOR to any other person or entity without the prior express written consent of CITY. If an assignment, delegation or subcontract is approved, all approved assignees, delegates and sub-contractors must satisfy the insurance requirements as set forth in Section 9 and 10 hereinabove. 8 113 15. COPYRIGHTS/PATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this agreement. 16. CITY EMPLOYEES AND OFFICIALS CONTRACTOR shall employ no CITY official nor any regular CITY EMPLOYEE IN THE WORK PERFORMED PURSUANT TO THIS Agreement. No officer or employee of CITY shall have any financial interest in this Agreement in violation of the applicable provisions of the California Government Code. 17. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONTRACTOR's agent (as designed in Section 1 hereinabove) or to CITY as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. CITY and CONTRACTOR may designate different addresses to which subsequent notices, certificates, electronic correspondence, or other communications will be sent by notifying the other party via personal delivery, or reputable overnight carrier or U.S. certified mail-return receipt requested, or electronic mail system: TO CITY: City of Huntington Beach ATTN: City Manager 2000 Main Street Huntington Beach, CA 92648 9 TO CONTRACTOR: PSQ Productions, LLC. ATTN: Mark Entner 48 Waterworks Way Irvine, CA 92618 114 18. 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 consent/approval to any subsequent occurrence of the same or any other transaction or event. 19. MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 20. 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. 21. 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 10 115 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, or ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. 22. 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 has signed it. 23. IMMIGRATION CONTRACTOR shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 24. LEGAL SERVICES SUB-CONTRACTING PROHIBITED CONTRACTOR 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. CONTRACTOR 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 11 116 expenses incurred by CONTRACTOR. 25. 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. 26. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of the Agreement, shall so survive. 27. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. 28. SIGNATORIES Each undersigned represents and warrants that its signature herein below 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. 29. 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, 12 117 promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on the party's behalf, which are not embodied in this Agreement, and 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. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. 30. EFFECTIVE DATE This agreement shall be effective on the date of its approval by the City Attorney. This Agreement shall expire when terminated as provided herein. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. 13 118 CONSULTANT, PSQ PRODUCTIONS, LLC &;__ i2::/. tE tC . pnnt name ITS: (circle one) Chairm�ice President 1., AND i!ittfu print n ITS: (circle one) Secre Officer/ Asst. Secretary 14 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor City Clerk INITIATED AND APPROVED: REVIEWED AND APPROVED: City Manager APPROVED AS TO FORM: City Attorney 119 mmunity Services CONSULTANT, PSQ PRODUCTIONS, LLC By: _____________ _ print name ITS: (circle one) Chairman/President/Vice President AND By: _____________ _ print name ITS: (circle one) Secretary/Chief Financial Officer/ Asst. Secretary -Treasurer 14 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor City Clerk INITIATED AND APPROVED: mmunity Services REVIEWED AND APPROVED: City Manager APPROVED AS TO FORM: City Attorney 120 -----~ EXHIBIT "A" CONTRACTOR SCOPE OF SERVICES PSQ PRODUCTIONS, LLC A. STATEMENT OF WORK: The CONTRACTOR is required to attend planning meetings with the BOARD and CITY staff as needed. CONTRACTOR shall assume responsibility, with oversight from the CITY and in collaboration with the BOARD when deemed necessary by CITY, for all planning; sponsorship procurement; music and entertainment procurement; sub-contractor management; volunteer development; pre-, day-of, and post-event public / media relations; pre-, day-of, and post-event production and management; and all other facets of event production and management. Of note, deliverables must communicate the CITY's message of "family-friendly" events and activities. B. CONTRACTOR'S DUTIES AND RESPONSIBILITIES: In general, CONTRACTOR will provide or sub-contract the following services. These services are general in nature and are not all-inclusive of the duties and responsibilities of the CONTRACTOR. •Research & Monthly Planning •Legacy review of prior Event years to ascertain and evaluate best practices, budget history and preferred vendor relationships. •Conduct surveys of previous Event partners to solicit feedback and identify key success elements. •Attend and contribute to monthly Independence Day Board meetings. •Marketing & Sponsorship 15 121 •Develop and manage omni-channel online/social, OOH and print marketing campaign concepts and fulfillment. •Review overall Event sponsorship program and recommend strategies and activations to maximize revenue potential. •Solicit, negotiate, and implement/manage all sponsorship contracts. •Coordinate a sponsor recognition package and/or event as well as VIP amenities for CITY dignitaries, as agreed upon in writing by CITY and CONTRACTOR no less than 30 days prior to EVENT. •Financial Planning •Develop a comprehensive Event budget for approval by the CITY. •Manage all Budget and Scope changes as required to deliver the Event within the approved budget. •Manage, collect, and securely hold all sponsorship, booth sales, donations, food, beverage, merchandise cash receipts collected during the Event, and other forms of revenue. •Settlement of all vendors and invoices within the Scope of Services. •Reconciliation of budgets and weekly/monthly financial reporting to the CITY as requested. •Produce a final audit and settlement of all revenues and expenses within 30 days after the completion of the Event. •Parade Planning •Develop/distribute parade qualifications and application. •Once CONTRACTOR has selected final Parade entries, present to BOARD for their knowledge. 16 122 Develop parade site map, including route, staging areas, VIP areas, announcer and media coverage areas, and grandstand seating areas, if applicable. •Conduct appropriate outreach to ensure the parade contains at least 200 entries and to meet budget expectations and timing for television coverage of the Event. •Develop parade regulations and procedures for participants and distribute to all attendees. •Coordinate logistics, security, route closures & equipment needs with City Staff and departments, or other authorized agencies. •Oversee media credentialing and coverage opportunities with media affiliates and approved media outlets in coordination with the City's Office of Communications. •Develop parade scripts for all announcers along the parade route, in addition to media coverage announcers, for consistency. •Oversee parade line-up, staging, and disbanding. •Secure and setup adequate VIP area staging and seating and required AV production elements for parade coverage/announcers. •Fireworks Planning •Oversee RFP process to award fireworks display contract. •Oversee and manage winning bidder for execution of all deliverables. •Coordinate security and logistical planning with CITY Staff and departments. 17 123 • •Obtain required permits from appropriate CITY and County authorities, if applicable. •Develop/approve musical programming and secure all required licensing/ clearances. •Coordinate Pier seating for Fireworks show, including sale of ticket packages, Pier seating layout, rental equipment, and any applicable VIP amenities. •Run Event Planning •Oversee subcontractors and/or provide primary run program management. •Manage t-shirt, runner medals and branded merchandise program. •Coordinate event marketing and oversee/develop runner registration, ensuring participation of over 3,500 runners to meet budget expectations. •Provide professional timing services and runner results. •Coordinate logistics, route planning, safety and street closures with City Staff and departments or other authorized agencies. •Coordinate runner's expo event if so authorized as part of final Event budget/scope. ■Collaborate with other contractors, consultants, and vendors CITY may hire in the course of presenting the event. ■Specific Event Permit -CONTRACTOR shall apply for and obtain a City of Huntington Beach Specific Event Permit in accordance with Municipal Code 13 .54. Specific Event Permit fees to be waived by CITY. C. ADDITIONAL ACTIVATIONS CITY and CONTRACTOR agree that in 2024, the Event shall include the Parade, Run, and Fireworks Events. Should the CONTRACTOR wish to expand the 18 124 activations of the Event in future contract years to include additional festivals, block parties, community parades, or other elements, CONTRACTOR may propose the new elements in writing for approval by CITY. Any new Event activations shall be funded by CONTRACTOR through the Event budget and/or sponsorships and shall not be the financial responsibility of CITY. D. CITY'S DUTIES AND RESPONSIBILITIES: 1. CITY will designate a staff liaison through the Director of Community & Library Services and any change in that person will be noticed in writing. 2. CITY shall provide meeting rooms for meetings, when available, at no cost to CONTRACTOR. 3. CITY will assist with promotion and marketing of the event through social media, SANDS Recreation Guide, placing information on the CITY' s website, and allowing promotional materials to be placed in City Hall and community facilities, such as community centers and libraries, with the approval of the City's Office of Communication. 4. The CITY's staff liaison will work with CONTRACTOR on providing a VIP and dignitary list. D.WORK PROGRAM/PROJECT SCHEDULE: 1.Work shall commence upon execution of the Agreement by both parties and approval by the City Council of the City of Huntington Beach. 2.All tasks specified in Exhibit "A" shall be completed on or before July 4 of each year in 2024, 2025, 2026. 3.This schedule may be amended to benefit the Project if mutually agreed to in writing by CITY and CONTRACTOR. 4.In the event the Commencement Date precedes the Effective Date, CONTRACTOR shall be bound by all terms and conditions as provided herein. 19 125 5. CITY shall apply for and obtain Caltrans street closure permits related to the 4th of July Parade. 20 126 EXHIBIT "B" Payment Schedule (2024 -$150,000; 2025 -$160,500; 2026 -$171,735) 1. CONTRACTOR shall be entitled to three (3) installment payments toward the fixed Fee set forth herein in accordance with the following progress and payment schedules. Upon submission of any invoice, if CITY is satisfied that CONTRACTOR is making satisfactory progress toward completion of tasks in accordance with this Agreement, CITY shall approve and process the appropriate installment payments, within thirty (30) days of receipt of said invoice by CITY. Such approval shall not be unreasonably withheld. If CITY does not approve an invoice, CITY shall notify CONTRACTOR in writing of the reasons for non-approval and the schedule of performance set forth in Exhibit "A" may at the option of CITY be suspended until the parties agree that past performance by CONTRACTOR is in, or has been brought into compliance, or until this Agreement has expired or is terminated as provided herein. Such invoices shall: A) Reference this Agreement; B) Describe the services performed; C) Show the total amount of the payment due; D) Include a certification by a principal member of CONTRACTOR's firm that the work has been performed in accordance with the provisions of this Agreement; and E) For all payments include an estimate of the percentage of work completed. 2. CONTRACTOR shall use the Fee Schedule as included in the City Council approved Master Fee and Charges Schedule, Community Services-Charges, Resolution #2019-87, and any subsequently updated Fee Resolution during the Term of the Agreement: 21 127 3. Any billings for extra work or additional services authorized in advance and in writing by CITY shall be invoiced separately to CITY. Such invoice shall contain all of the information required above, and in addition shall list the hours expended and hourly rate charged for such time. Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate. Such approval shall not be unreasonably withheld. Any dispute between the parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement. 1. BUDGET, FEES & TERMS OF PAYMENT a. CONTRACTOR shall provide the Services described herein for a Fee of ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000) during the first year of the Agreement. For each subsequent year during the Term related to the 2025 and 2026 Events, the Fee shall be increased in accordance with the schedule provided by CONTRACTOR to CITY during negotiations. b. The Fee shall be paid to CONTRACTOR in installments during the first year of the Agreement as follows: (i)50% due upon execution of Agreement; (ii)25% due no later than April 30, 2024; (iii)25% due no later than July 31, 2024; c. The Fee for each subsequent year in the Term, related to the 2025 and 2026 Events and any option years exercised, shall be due with a 50% first installment due by December 31 st of the preceding year and two (2), 25% installments on April 30 111 and July 31 s t of the event year. d. All revenues from the Event shall be accounted for in the following order: (i)Revenues, including but not limited to ticket sales, sponsorships, parade entries, and donations shall offset 22 128 expenses incurred by CONTRACTOR in the production of the Event in accordance with the Event budget. (ii)Ifrevenues exceed the expenditures and there is a net positive in the Event account, CONTRACTOR will be eligible to earn additional compensation on sponsorship and donations as follows: (a) 25% of total revenue generated during the event from new vendors; 10% of revenues from returning 2023 vendors with 25% of new revenues over 2023 revenues. (b) Ticket sales and parade entries will not be eligible for the revenue split and shall be deposited directly into the account to fund the Event. (iii)If Event expenses exceed total revenue, the CITY would be responsible for reimbursement of CONTRACTOR direct Event expenses, pending a review of the mutually approved event budget and the reconciliation of expenditures with invoices or receipts from vendors as agreed upon by both parties no more than 30 days following July 4 each year. (iv) CONTRACTOR may provide subcontractor services required for the Event that are within CONTRACTOR's direct capabilities, provided that CONTRACTOR charge competitive market rates for such services and provide advance disclosure to the CITY of the areas in which it intends to provide the services. e. In consultation with the CITY, CONTRACTOR will develop an initial Budget Estimate for the entire Event to be submitted for adoption by CITY no later than 14 days after completion of the Legacy Review. f. During the Te1n1, CONTRACTOR shall notify the CITY of any anticipated or known material increase to the EVENT Budget, defined as any change 23 129 due to an individual line item or group of related items which change in price for any reason, increase the EVENT Budget by more than $5,000.00 and represent an unfunded budget expense against known revenues. The CITY shall have 72 hours from receipt of notice to approve, modify or cancel the relevant Scope of Work related to the material increase. Failure of the CITY to modify or cancel the relevant scope of work within the notice period shall constitute approval of the material increase and financial obligations associated therewith. g. From time to time, the CITY may request changes to the Scope of Work or Services, which must be submitted to CONTRACTOR in writing, at which time CONTRACTOR shall provide the CITY with a written analysis and financial estimate as soon as is reasonably possible, detailing the costs and feasibility of the CITY request. The CITY request shall not become binding upon CONTRACTOR nor be included in the Services, unless and until the CITY approves the financial estimate and revenue allocation recommended by CONTRACTOR, and CONTRACTOR certifies the request as feasible within the Scope of the Services. h. CONTRACTOR shall operate and maintain a special purpose dedicated checking account for the EVENT, and make all deposits and payments related to the EVENT using the dedicated account. The CITY shall be granted access to the account for reporting/audit purposes and furnished with copies of each monthly statement from the account. 1. CONTRACTOR shall maintain copies of all purchase orders, invoices, contracts, receipts, deposits and expenses paid on behalf of the EVENT and provide CITY with copies of same. J.All payments due to CONTRACTOR are to be made by wire transfer or direct deposit. 24 130 131 _.J .• ,..., •11 ,...'-' I I ACORD® CERTIFICATE OF LIABILITY INSURANCE DATE: (IM,IIDDIYYVY) ~ 12-28-23 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY ANO CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER, THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW, THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER{S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: Jr the certificate holder Is an ADDITIONAL INSURED, the policy(les) must be endorsed. If SUBROGATION IS WAIVED, subject to tho terms and condltlons of the policy, certain 1>ollcles may require an endorsement. A statement on this certificate does not confer rights to the certificate holder In lieu of such endorsament(s). PRODUC!iR CONTACT Thomas Plouffe llAMEe Specially Insurance, LTD. filjgt~fn IMl• 203-931-7095 I r,e~ l/ole 203-931-0682 P.O. Box 16901 ii1m~ss: Cerliricates@specialtyinsuranceltd.com West Haven, CT 06516 IHSURERISIAFFORDING COVERAGE NAIC/1 INSURER A: Penn-Star Insurance Comoanv 10673 lllSUREO INSURER a: Scottsdale Surplus Lines Insurance Company 10672 PSQ Productions, LLC It.SURER c: Emo lovers Prefered Insurance Companv 10346 48 Waterworks Way 1usu11en o: Hiscox Insurance Comoanv 10200 ltvine, CA 92618 11/SURERE: IUSURER F: COVERAGES CERTIFICATE NUMBER: REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WlTH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. IHSR TYPE OF IHSURANCE ADDL SUDR r,~SM&l'Jyy, 1,l:3l-J%~~\ LIMITS LTR IIISD \WO POLICY NUMBER A X CO!,IMERCI/\LGENEf!AL LIABILITY X X CPV0036154 9/26/23 9/26/24 EACH OCCURRENCE s 1,000,000 -~ ClAIMS·MAOE CK] OCCUR rffilnisM?F~~Jr~neel -s 100,000 -MED EXP (MY one person) s 5,000 PERSONAL &ADV INJURY s 1,000,000 - GEH'l AGGREGATE LIMIT APPUES PER: GENERAL AGGREGATE s 2,000,000 ~ □PRO• OLoc PRODUCTS -COMP/OP AGO $ 2,000,000 POLICY JECT OTHER: s AUTOMOBILE LIABILITY P100.691.568.3 D -X X 10/28/23 10/28/24 ~COM~ED1iSINGLE LIMIT Eaa denl s 1,000,000 ANY AUTO BODILY INJURY [Per person) s -All OWNED ~ SCHEDULED -AUTOS I-AUTOS BODILY INJURY (Per socidenl) $ X HIRED AUTOS X NON-OWNEO Ffe?~.!'}tl!,fAMAGE $ -,.--AUTOS $ B UMBRELLA LIAS ' ~OCCUR CX4009111 9/26/23 9/26/24 EACH OCCURRENCE s 5,000,000 -X EXCESSU/\8 CI.AIMS•MAOE AGGREGATE $ 5,000,000 DEO I I RETENTION s $ WORKERS COMPENSATION X l~ftun: I I OTH· C /INI) EMPLOYERS' UAfllLITY EIG 4690776 02 1/14/23 1/14/24 ER Y/N Al:ri PROPRIETOR/PARTNER/EXECUTIVE □ ll/A E.L. EACHACCIDEHT $ 1,000,000 OFFICER/MEJ.lllER EXCLUDED? (Mandalo,y In NH) E.l. DIS EASE -EA EMPLOYEE $ 1,000,000 gisMrtrr8~ ~gPERATIONs be10l'I E.l. DISEASE -POLICY LIMIT $ 1,000,000 A Professional Liability X X CPV0036154 9/26/23 9/26/24 Per Occurence: $1 million Aggregate: $1 million DESCRIPTION OF OPERATIONS t LOCATlO!lS /VEHICLES (ACORD 101, Addlllonal f\omarks Schedule, may be al!ached ff morupace Is required) City of Huntington Beach, its officers, elected or appointed officials, employees, agents ~volunteers are added as an additional insured but only with respect to liability arising out of the operations of the na ,Ralfi& &.fl-filiij fmfttdlicy period. The general liability policy is primary and non-contributory. By: cey 30 day written notice of cancellation and 10 day notice of cancellation for non payment of P"llW~f"lo~~~«vided. C11'V 01: HUNTINGtON Bl:ACI-I CERTIFICATE HOLDER CANCELLATION City of Huntington Beach SHOULD ANY OF THI: ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE 2000 Main Street THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN Huntington Beach, CA 92648-2702 ACCORDANCE WITH THE POLICY PROVISIONS. AUTIIORIZEO REPRE$ENTATIVE __ __, __ ........... •---:::::--~r~ -c? .·t:.~-~~ --...• -=-----· I ACORD 25 (2014/01) © 1968-2014 ACORD CORPORATION. All rights reserved, The ACORD name and logo are registered marks of ACORD 132 POLICY NUMBER: CPV0036154 COMMERCIAL GENERAL LIABILITY CG 20 26 07 04 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED .. DESIGNATED PERSON OR ORGANIZATION This endorsement modifies Insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person(s) Or Ornanization(s) City of Huntington Deach, its officers, elected 01· appointed officials, cm1>loyccs 1 agents and volunteers Information required to complete this Schedule if not shown above, will be shown in the Declarations. Section II. Who Is An Insured is amended to include as an additional insured the person(s) or organization ( s) shown in the Schedule, but only with respect to liability for "bodily injury", "property damage'' or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: A. In the performance of your ongoing operations; or B. In connection with your premises owned by or rented to you. CG 20 26 07 04 © ISO Properties, Inc., 2004 Page 1 of 1 133 Policy Number: CPV0036154 COMMERCIAL GENERALLIABIUTY CG 20 01 0413 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. PRIMARY AND NONCONTRIBUTORY - OTHER INSURANCE CONDITION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART City of Huntington Beach, its officers, elected or appointed officials, employees, agents and volunteers The following is added to the Other Insurance Condition and supersedes any provision to the contrary: Primary And Noncontributory Insurance This insurance is primary to and will not seek contribution from any other insurance available to an additional insured under your policy provided that: The additional insured is a Named Insured under such other insurance; and You have agreed in writing in a contract or agreement that this insurance would be primary and would not seek contribution from any other insurance available to the additional insured. CG 20 01 0413 © Insurance Services Office, Inc., 2012 Page 1 of1 134 POLICY NUMBER: P 100.69 L568.3 (HNO) COMMERCIAL GENERAL LIABILITY CG 20 26 07 04 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED~ DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name Of Additional Insured Person{s) Or Onianlzatlon{s) City of Huntington Beach, its officers, elected or appointed officials, employees, agents and volunteers Information required to complete this Schedule, if not shown above, will be shown in the Declarations. Section II. Who Is An Insured is amended to include as an additional insured the person(s) or organization ( s) shown in the Schedule, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: A. In the performance of your ongoing operations; or 8. In connection with your premises owned by or rented to you. CG 20 26 07 04 © ISO Properties, Inc., 2004 Page 1 of 1 PSQ Productions Professional Services Agreement March 19, 2024 135 Statement of Issue PSQ Productions will manage and produce the 2024, 2025, and 2026 Independence Day Celebration events, which include the annual Surf City 5K Run, 4th of July Parade, and Fireworks over the Ocean. 136 History • The previous contract expired on September 30, 2023 • A Request for Proposals (RFP) was released on September 7, 2023 • Three (3) firms responded to the RFP by the closing process on Friday, October 20, 2023, after extending original deadline of Friday, September 29, 2023, to allow for additional submissions. 137 Contractor • PSQ Productions was selected and will manage and produce the 2024, 2025, and 2026 Independence Day Celebration events, which include the annual Surf City 5K Run, 4th of July Parade, and Fireworks over the Ocean. • The Contract will have a three-year term and will automatically terminate three (3) years after commencement on September 1, 2026, or may be extended up to two (2) one-year terms upon mutual consent of the parties. 138 Responsibilities A summary of PSQ Productions responsibilities for the Independence Day celebration: • planning and execution of the 4 th of July Parade, Run, and Fireworks Show • sponsorship procurement and sponsor recognition • merchandise, overall event logistics • VIPs, entertainment and public relations; music and entertainment procurement if applicable • sub-contractor agreements, management and payment • volunteer development • public / media relations 139 Responsibilities • implement all logistical plans • provide general event production and management • provide research and planning • marketing services • budget development, management, reconciliation, and regular reporting to the City • collaborate with the Independence Day Board for community sponsorships and development of the Event theme, logo, and selection of parade participants and grand marshals 140 Responsibilities City responsibilities: • Assign a staff coordinator to work directly with Contractor. • Provide a contingency allowance of no more than $10,000 to cover variations that may occur in the expected values of elements of cost or schedule. • Assist with promotion and marketing of the event. 141 Agreement Term Compensation through the five-year life of the contract is set at the following: One Hundred Fifty Thousand Dollars ($150,000) in 2024; One Hundred Sixty Thousand, Five Hundred Dollars ($160,500) in 2025; and, One Hundred Seventy-One Thousand, Seven Hundred Thirty- Five Dollars ($171,735) in 2026. 142 Mr. Amory Hanson 8102 Ellis Avenue Apartment 121 Huntington Beach CA 92646 February 20, 2024 The Mayoress of Huntington Beach 2000 Main Street Huntington Beach CA 92648 My Dear Madam Mayoress, I would like to express my support for Item XIII. Sincerely Yours, Mr. Amory Hanson CC: The Honorable Patrick Burns CC:The Honorable Rhonda Bolton CC: The Honorable Daniel Kalmick CC: The Honorable Casey McKeon CC: The Honorable Natalie Moser CC: The Honorable Anthony Strickland 2/20/2024 13 (24-144)143 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-194 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Eric G. Parra, Interim City Manager VIA:Ashley Wysocki, Director of Community & Library Services PREPARED BY:Molly Uemura, Community & Library Services Manager Subject: Adopt Resolution No. 2024-08 revising and restating Resolution No. 2016-01 related to implementing Charter Section 805 and Municipal Code Chapter 5.90 regarding the number of permits issued for Safe and Sane Fireworks from fifteen (15) to sixteen (16) Statement of Issue: It is necessary to revise and restate Resolution No. 2016-01 and approve a new resolution that will allow for one additional Safe and Sane Fireworks booth permit to be exclusively issued to a City - related organization or foundation, which is defined as a charitable organization that has been established as a result of a partnership with a specific City department and has the primary purpose of financially supporting city services and operations. Financial Impact: Not applicable. Recommended Action: Adopt Resolution No. 2024-08, “A Resolution of the City Council of the City of Huntington Beach revising and restating Resolution No. 2016-01 related to implementing Charter Section 805 and Municipal Code Chapter 5.90 regarding safe and sane fireworks.” Alternative Action(s): Do not approve the recommended action and direct staff accordingly. Analysis: On February 2, 2015, City Council adopted Resolution No. 2015-04, which approved a maximum of fifteen (15) permits to be issued allowing for the sale of Safe and Sane Fireworks within the City each year to non-profit organizations using a lottery system. Historically, the 15 permits have been issued to applicants in three (3) categories, with a maximum of five (5) permits per category: Youth Sports, High School Education Institutions, and Civic Organizations. Resolution No. 2024-08 would increase City of Huntington Beach Printed on 3/13/2024Page 1 of 2 powered by Legistar™144 File #:24-194 MEETING DATE:3/19/2024 the number of permits from fifteen (15) to sixteen (16). This increase of one permit shall be issued to a City-related organization or foundation defined as a charitable organization that has been established as a result of a partnership with a specific City department and has the primary purpose of financially supporting City services and operations. This charitable organization must have a current Memorandum of Understanding with the City of Huntington Beach. Sixty percent (60%) of the proceeds from this sixteenth (16th) booth will be recouped by the City - related organization or foundation and forty percent (40%) will be recouped by the City of Huntington Beach to help offset the rising costs related to the City’s Independence Day events. The awarded City-related organization or foundation will rotate annually, with a lottery held the first year to establish a list. Any new City-related organization or foundation established after this list is created will be automatically added to the end of the existing list. Applicable organizations or foundations will be eligible to apply for other categories during non-award years. No City-related organization or foundation may be awarded or operate more than one booth in the same year. These organizations will not be entered into the annual lottery that is applicable for the remaining fifteen (15) fireworks booths. Environmental Status: This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Strategic Plan Goal: Goal 2 - Fiscal Stability, Strategy A - Consider new revenue sources and opportunities to support the City's priority initiatives and projects. Attachment(s): 1. Resolution No. 2024-08, “A Resolution of the City Council of the City of Huntington Beach revising and restating Resolution No. 2016-01 related to implementing Charter Section 805 and Municipal Code Chapter 5.90 regarding safe and sane fireworks.” City of Huntington Beach Printed on 3/13/2024Page 2 of 2 powered by Legistar™145 146 RESOLUTION NO. 2024-08 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH REVISING AND RESTATING RESOLUTION NO. 2016-01 RELATED TO IMPLEMENTING CHARTER SECTION 805 AND MUNICIPAL CODE CHAPTER 5.90 REGARDING SAFE AND SANE FIREWORKS WHEREAS, the voters of the City of Huntington Beach approved an amendment to the Huntington Beach Charter adding Section 805 permitting the sale and discharge of Safe and Sane Fireworks s1,1bject to City Council regulations; and The Council finds that orderly distribution and sale of Safe and Sane Fireworks will be accomplished by setting forth rules and procedures via resolution, NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: SECTION 1. The City Manager is hereby authorized to implement this Resolution, Huntington Beach Municipal Code (HBMC) Chapter 5.90 and Chaiier Section 805. SECTION 2. No Permit, as defined by the HBMC, shall be issued to any Qualified Organization that does not satisfy the requirements provided in this Resolution or HBMC Chapter 5. 90. A. The maximum number of Permits that may be issued shall be sixteen (16) Permits during any one calendar year as follows: one (1) Permit issued to a City Foundation and a maximum of five Permits shall be issued to Qualified Organizations in each of the three categories provided below, to which an applicant may apply for only one of the categories: Youth Sports -Youth sports organizations operating within the City whose main purpose is to benefit a valid youth sports activity. Examples include but are not limited to Little League, "A YSO" soccer, youth football, basketball, tennis, or golf. This category does not include individual club or travel sports teams, or high school extracurricular activities/spotis. High School -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. Civic Organizations -Civic 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, shall be allowed to submit one application. This category does not include high school extracurricular activities or youth or adult sports organizations. 147 RESOLUTION NO. 2024-08 B. Each year, one (1) Permit shall be issued to a City related organization or Foundation which is defined as a Charitable Organization that has been established as a res11lt of a partnership with a Specific City Department and has the primary purpose of financially supporting City Services and operations. This Charitable Organization must have a current Memorandum of Understanding with the City of Huntington Beach. Sixty percent of the proceeds from this booth will be given to the Foundation and forty percent will be provided to the City of Huntington Beach to help offset the costs related to the City's Independence Day festivities. In year one (1) a lottery will be held to determine the award for the fireworks booth. To determine order for future years, any Organizations or Foundations added after the lottery will be placed at the bottom of the list. No Foundation may be awarded or operate two booths in the same year. Foundations will not be entered into the annual lottery. C. Applications may be filed with the City Clerk beginning March 151, continuing up to 5:00 p.m. on the last business day in March of the same year, at which time the filing period for that year will be closed. D. The City Clerk shall conduct a lottery to choose fifteen qualified Permittees that may sell fireworks in the City pursuant to HBMC Chapter 5.90. The lottery will be conducted during a City Council meeting with the City Clerk using some means of random selection. E. In addition to the requirements of HBMC Chapter 5.90, Qualified Applicants must be organized primarily for veterans, patriotic, welfare, civic betterment, religious, athletic, educational, youth development or charitable purposes; must have their principal and permanent meeting place within the City; and provide direct and regular community services and benefits to the residents of the City. F. If more than one application is submitted on behalf of any nonprofit organization or affiliated organization, the City may disregard one or all of the applications at its sole discretion. Any attempt to transfer an application shall void that application and may preclude an applicant from participating in the lottery in future years. G. On a form provided by the City, Qualified Organizations shall provide: the proposed location of the fireworks stand; the name, address and 24-hour telephone number of one or more responsible adults who will be in charge of and responsible for the fireworks stand during the period fireworks are sold, displayed or stored at such location; and written permission from the owner of record and/or lessor and/or management company of the property upon which said fireworks stand is proposed to be located; the proof of the applicant's status as a qualified organization; date when the applicant was organized and established; the names and addresses of the officers, if any, of the applicant; the name, address, and California State Fire Marshal's license number of any wholesaler or distributor from whom the Qualified Applicant or retailer proposes to purchase for resale; the applicant's State Board of Equalization sales tax permit number; the manner, method and times regarding how the applicant proposes to sell Safe and Sane Fireworks; a copy of the requisite retail sales permit issued by the Office of the California State Fire 24-14157/331590 2 148 RESOLUTION NO. 2024-08 Marshal; and evidence of a temporary sales tax permit from the California State Board of Equalization. SECTION 3. Permittees shall provide certificates of insurance evidencing the following minimum coverage and limits. Insurance shall be provided by an insurer authorized to do business in California with a current A.M. Best's rating of no less than an A-:VI. A. General Liability: Commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than one million dollars ($1,000,000.00) per occurrence, two million dollars ($2,000,000.00) general aggregate, for bodily injury, personal injury, and property damage without limitation, blanket contractual liability. General liability policies shall provide or be endorsed using Insurance Services Office forms CG 20 26 or equivalent, to provide that City and its officers, elected or appointed officials, employees, agents and volunteers shall be additional insureds under such policies. There shall be no exclusions, included in or added to the policy, for fireworks sales or similar activities allowable under this permit. B. The insurance coverage provided and limits required hereunder are minimum requirements and are not intended to limit Permittee's indemnification obligations under Section 4 below, nor do the indemnity obligations limit the rights of the insured parties to the coverage afforded by their insured status. Requirements of specific coverage features or limits contained in this Section 3 are not intended as a limitation on coverage, limits or other requirements, or a waiver of any coverage normally provided by insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. C. Any deductibles, self-insured retentions or similar forms of coverage limitations or modifications must be declared to and approved by the City. D. Permittee shall include all sub-Permittees or subcontractors, if any, as insureds under its policies or shall furnish separate certificates and endorsements to each sub-Permittee. E. Permittee shall provide to City, certificates of insurance and endorsements, as required, as evidence of the insurance coverage required herein. SECTION 4. Permittees agree, as a condition of receiving a Permit, to protect, defend, indemnify, and hold harmless, the City, the City Council, its officers, elected or appointed officials, employees, agents, and volunteers from and against any and all third party claims, damages, losses, expenses, judgments, demands and defense costs, however caused, resulting from death or injury to Permittee employees, volunteers, customers, and/or any third party, and/or damage to Permittee property, arising directly or indirectly out of the obligations or operations undertaken by Permittee by vhiue of the Permit issuance, caused in whole or in part by any act or omission of the Permittee, any subcontractors, anyone directly or indirectly employed or volunteers or anyone for whose acts any of them may be liable, including but not 24-14157 /331590 3 149 RESOLUTION NO. 2024-08 limited to, concurrent active negligence, except where caused by the sole active negligence, or willful misconduct of the City . In the event of an injl)ry, claim, lawsuit, or any other dispute, the Permittee will conduct all legal defenses to those injuries, claims, lawsuits, or any other disputes, including the defense of the · City if applicable, at its sole cost and expense, and at no cost or expense to the City. The City shall approve selection of Permittee's counsel. This defense and indemnity obligation shall apply to all claims and liability regardless of whether any defenses and insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by Permittee. SECTION 5. Each Permittee shall provide the City with a listing of reported profit from its Firework Stand located in the City. SECTION 6. City Council Resolution No. 2016-01, and all other resolutions in conflict herewith, are hereby repealed. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 19 th day of March, 2024. Mayor REVIEWED AND APPROVED: APPROVED AS TO FORM: City Manager ----C-i-ty-A-tto-1-·n_e_y----~~ INITIATED AND APPROVED: 24 -14157/331590 4 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-160 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Eric G. Parra, Interim City Manager VIA:Danielle Tellez, Interim Director of Human Resources PREPARED BY:DeAnna Soria, Risk Manager Subject: Approve a Professional Services Contract with Carl Warren & Company for Liability Claims Administration Services Statement of Issue: The City of Huntington Beach maintains a program of self-insurance for general liability pursuant to the California Tort Claims Act. The City desires to retain the services of Carl Warren & Company to provide assistance in administering this program for a period of three (3) years. Financial Impact: The proposed contract is for an amount not to exceed $750,000 over a three (3) year period. There is sufficient funding available in Fiscal Year 2023-24 for this agreement in General Liability Insurance Fund account # 55230502.69365. Future year costs will be included in future budgets. Recommended Action: Approve and authorize the Mayor and City Clerk to execute the agreement, “Professional Services Contract between the City of Huntington Beach and Carl Warren & Company Liability Claim Investigation and Processing” in the amount of $750,000 for three (3) years, and delegate authority to the City Manager to execute any extensions thereto. Alternative Action(s): Do not approve the agreement and direct staff accordingly. This will require conducting a second Request for Proposal process to solicit bids from other qualified firms. Analysis: In 2023, the City issued a Request for Proposal (RFP) for a public sector third-party administrator (TPA) for liability claims administration services. Services include but are not limited to the City of Huntington Beach Printed on 3/13/2024Page 1 of 2 powered by Legistar™150 File #:24-160 MEETING DATE:3/19/2024 (TPA) for liability claims administration services. Services include but are not limited to the following activities: program administration, claims administration, investigation services, property recoveries, and litigation management. Carl Warren ranked No.1 out of 2 vendors who submitted proposals (attachment 1) based on their experience and pricing. The City has utilized Carl Warren for many years and has been satisfied with their services. Staff recommends the approval of a three (3) year contract with Carl Warren to administer the City’s general liability self- insurance program. Environmental Status: This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Strategic Plan Goal: Non Applicable - Administrative Item For details, visit www.huntingtonbeachca.gov/strategicplan <http://www.huntingtonbeachca.gov/strategicplan>. Attachment(s): 1. Professional Services Award Analysis 2. Professional Services Contract- Carl Warren & Company City of Huntington Beach Printed on 3/13/2024Page 2 of 2 powered by Legistar™151 152 PROFESSIONAL SERVICE AWARD ANALYSIS SERVICE: General Liability Third Party Administrator SERVICE DESCRIPTION: Provide General Liability Claims Administration VENDOR: CARL WARREN Insurance Services OVERALL RANKING: 1 SUBJECT MATTER EXPERTS/RATERS: 1. City of H.B. Risk Manager, 2). City of Oxnard H.R/Risk Manager, 3). City of Manhattan Beach Risk Manager4). City ofTustin, Sr. Analyst/Risk Management, 5). City of H.B. Principal Finance Analyst. I. MINIMUM QUALIFICATIONS REVIEW • Written Proposal Score: 1315 INTERCARE · -Minimum Qualifications Review • Total Weighted Maximum Criteria Score Compliance with RFP 50 Firm Qualifications 375 Experience & License Requirements 375 Understanding of Project 280 Cost/Price 105 References 130 Total I . 1315 II. DUE DILIGENCE REVIEW • Interview Ranking: 1 CARLWARRE_N -.Summary of Rev.iew • Highest score overall (Proposal//lnterviews combined) • Excellent longstanding claims handling team I • Outstanding expertise in subrogation/property recovery services • 70% of business currently with public entities and over 30 years with the City of HB • Excellent reference checks INTERCARE -Pricing • Most competitive pricing for claims handling with further opportunity to reduce some of the City's endin invento /claim liabilities . Score 75 375 375 300 225 150 1500 153 PROFESSIONAL SERVICES CONTRACT BETWEEN I THE CITY OF HUNTINGTON BEACH AND CARL WARREN AND COMP ANY LIABILITY CLAIM INVESTIGATION AND PROCESSING THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY," and Cal'l Warren, an Arizona Company hereinafter referred to as "CONSULTANT." WHEREAS, CITY desires to engage the services of a consultant to provide liability claim investigation and processing services; and Pursuant to documentation on file in the office of the City Clerk, the provisions of the Huntington Beach Municipal Code, Chapter 3.03, relating to procurement of professional service contracts have been complied with; and CONSULTANT has been selected to perform these services, NOW, THEREFORE, it is agreed by CITY and CONSULTANT as follows: 1. SCOPE OF SERVICES CONSULTANT shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the "PROJECT." CONSULTANT hereby designates Richard McAbee who shall represent it and be its sole contact and agent in all consultations with CITY during the performance of this Agreement. 2. CITY STAFF ASSISTANCE CITY shall assign a staff coordinator to work directly with CONSULTANT in the performance of this Agreement. 24-14162/332358 1 of 11 154 3. TERM; TIME OF PERFORMANCE Time is of the essence of this Agreement. The services of CONSULT ANT are to commence on February 18, 2024 (the "Commencement Date"). This Agreement shall automatically terminate three (3) years from the Commencement Date, unless extended or sooner terminated as provided herein. All tasks specified in Exhibit "A" shall be completed no later than one ( 1) year from the Commencement Date. The time for performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit "A." This schedule may be amended to benefit the PROJECT if mutually agreed to in writing by CITY and CONSULTANT. In the event the Commencement Date precedes the Effective Date, CONSULT ANT shall be bound by all terms and conditions as provided herein. 4. COMPENSATION In consideration of the performance of the services described herein, CITY agrees to pay CONSUL TANT on a time and materials basis at the rates specified in Exhibit "B," which is attached hereto and incorporated by reference into this Agreement, a fee, including all costs and expenses, not to exceed Seven Hundred Fifty Thousand Dollars ($750,000). 5. EXTRA WORK In the event CITY requires additional services not included in Exhibit "A" or changes in the scope of services described in Exhibit "A," CONSULTANT will unde11ake such work only after receiving written authorization from CITY. Additional compensation for such extra work shall be allowed only if the prior written approval of CITY is obtained. 6. METHOD OF PAYMENT CONSULTANT shall be paid pursuant to the terms of Exhibit "B." 24-14162/332358 2 of 11 155 7. DISPOSITION OF PLANS, ESTIMATES AND OTHER DOCUMENTS CONSULTANT agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, data or programs, maps, memoranda, letters and other documents, shall belong to CITY, and CONSULTANT shall turn these materials over to CITY upon expiration or termination of this Agreement or upon PROJECT completion, whichever shall occur first. These materials may be used by CITY as it sees fit. 8. HOLD HARMLESS A. CONSULT ANT 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 of every nature or liability of any kind or nature) arising out of or in connection with CONSULT ANT's ( or CONSULT ANT's subcontractors, if any) negligent ( or alleged negligent) performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by CONSULTANT, its officers, agents or employees except such loss or damage which was caused by the sole negligence or willful misconduct of CITY. CONSULTANT will conduct all defense at its sole cost and expense and CITY shall approve selection of CONSULT ANT'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 CONSULTANT. B. To the extent that CONSULTANT performs "Design Professional Services" within the meaning of Civil Code Section 2782.8, then the following Hold Harmless provision applies in place of subsection A above: 24-14162/332358 3 of 11 156 "CONSULT ANT hereby agrees to protect, defend, indemnify and hold harmless CITY and its officers, elected or appointed officials, employees, agents and volunteers, from and against any and all claims, damages, losses, expenses, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) to the extent that the claims against CONSULT ANT arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULT ANT. In no event shall the cost to defend charged to CONSULTANT exceed CONSULTANT's proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more other defendants to the claims and/or litigation is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, CONSULTANT shall meet and confer with CITY and other defendants regarding unpaid defense costs. The duty to indemnify, including the duty and the cost to defend, is limited as provided in California Civil Code Section 2782 .8. C. Regardless of whether subparagraph A or B applies, CITY shall be reimbursed by CONSULTANT for all costs and attorney's fees incurred by CITY in enforcing this obligation. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by CONSULTANT. 9. PROFESSIONAL LIABILITY INSURANCE CONSULT ANT shall obtain and furnish to CITY a professional liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for CONSULTANT's professional liability in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the aggregate. The above-mentioned insurance shall not contain a self-insured retention without the express written consent of CITY; however an insurance 24-14162/332358 4 of 11 157 policy "deductible" of Ten Thousand Dollars ($10,000.00) or less is permitted, A claims-made policy shall be acceptable if the policy further provides that: A. The policy retroactive date coincides with or precedes the initiation of the scope of work (including subsequent policies purchased as renewals or replacements), B, CONSULTANT shall notify CITY of circumstances or incidents that might give rise to future claims, CONSULTANT will make every effort to maintain similar insurance during the required extended period of covernge following PROJECT completion, If insurance is terminated for any reason, CONSULT ANT agrees to purchase an extended rep01ting provision of at least two (2) years to report claims arising from work performed in connection with this Agreement. If CONSULT ANT fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the CITY with required proof that insurance has been procured and is in force and paid for, the CITY shall have the right, at the CITY 1 s election, to forthwith terminate this Agreernent. Such termination shall not effect ConsultanCs right to be paid for its time and materials expended prior to notification of termination. CONSULT ANT waives the right to receive compensation and agrees to indemnify the CITY for any work performed prior to approval of insurance by the CITY. 10. CERTIFICATE OF INSURANCE Prior to commencing performance of the work hereunder, CONSULT ANT shall furnish to CITY a certificate of insurance subject to approval of the City Attomey evidencing the foregoing insurance coverage as req1.1ired by this Agreement; the certificate shall: 24-14162/332358 A. B. provide the name and policy number of each carrier and policy; state that the policy is currently in force; and 5 of 11 158 C. shall promise that such policy shall not be suspended, voided or canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice; however, ten (10) days' prior written notice in the event of cancellation for nonpayment of premium. CONSULT ANT shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by CITY. The requirement for carrying the foregoing insurance coverage shall not derogate from CONSULT ANT's defense, hold harmless and indemnification obligations as set forth in this Agreement. CITY or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. CONSULTANT shall pay, in a prompt and timely manner, the premiums on the insurance hereinabove required. 11 . INDEPENDENT CONTRACTOR CONSULT ANT 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. CONSULTANT shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONSULT ANT and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services to be performed hereunder. 12. TERMINATION OF AGREEMENT All work required hereunder shall be performed in a good and workmanlike manner. CITY may terminate CONSULT ANT's services hereunder at any time with or without cause, and whether or not the PROJECT is fully complete. Any termination of this Agreement by CITY shall be made in writing, notice of which shall be delivered to CONSULT ANT as provided herein. In the 24-14162/332358 6 of 11 159 event of termination, all finished and unfinished documents , exhibits, report , and evidence shall, at the option of CITY, become its property and shall be promptly delivered to it by CONSULTANT. 13. ASSIGNMENT AND DELEGATION This Agreement is a personal se1vice contract and the work hereunder shall not be assigned, delegated or subcontracted by CONSULT ANT to any other person or entity without the prior express written consent of CITY . If an assignment, delegation or subcontract is approved, all approved assignees, delegates and subconsultants must satisfy the insurance requirements as set forth in Sections 9 and 10 hereinabove. 14. COPYRIGHTS/PATENTS CITY shall own all rights to any patent or copyright on any work, item or material produced as a result of this Agreement. 15. CITY EMPLOYEES AND OFFICIALS CONSULTANT shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any financial interest in this Agreement in violation of the applicable provisions of the California Government Code. 16 . NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to CONSULTANT's agent (as designated in Section 1 hereinabove) or to CITY as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. CITY and CONSULT ANT may designate different addresses to which subsequent notices, certificates or other communications will be sent by notifying the other party via personal delivery, a reputable overnight carder or U . S. certified mail-return receipt requested: 24-14162/332358 7 of 11 160 TO CITY: City of Huntington Beach ATTN: Deanna Soria 2000 Main Street Huntington Beach, CA 92648 17. CONSENT TO CONSULT ANT: Carl Warren and Company 175 N, Riverview Drive, Unite A Anaheim, CA 92808 Attn: Richard McAbee 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. 18, MODIFICATION No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 19. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive plu·ases 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. 20. 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 24-14162/332358 8 of 11 161 neuter gender and singular 01· plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be constrned 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 Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. 21. 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 has signed it. 22. IMMIGRATION CONSULTANT shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 23. LEGAL SERVICES SUBCONTRACTING PROHIBITED CONSULT ANT 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. CONSUL TANT 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 CONSUL TANT. 24-14162/332358 9 of 11 162 24, 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 nonprevailing party, 25. SURVIVAL Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agt·eement, shall so survive. 26, GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. 27. SIGNATORIES 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. 28. ENTIRETY The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, 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 patty 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 24 -14162/332358 10 of 11 163 Agreement. This Agreement, and the attached exhibits, contain the entire agreement between the parties respecting the subject matter of this Agreement, and supersede all prior understandings and agreements whether oral or in writing between the parties respecting the subject matter hereof. 29 . EFFECTIVE DATE This Agreement shall be effective on the date of its approval by the City Council. This Agreement shall expire when terminated as provided herein. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. CONSULT ANT, Carl Warren and Company ITS: (circle on) Chairman/Presid_entNice _Pres~ print nam e,-,,-.:------.,.__ ITS: (circle on e) Secreta1") Chief Financial Officer ~sst. Secretary -Treasurer CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor City Clerk REVIEWED AND APPROVED: City Manager 24-14162 /332358 11 of 11 164 EXHIBIT "A" A. STATEMENT OF WORK: (Narrative of work to be performed) Sec attached Exhibit A. B . CONSULTANT'S DUTIES AND RESPONSIBILITIES: See attached Exhibit A. C. CITY'S DUTIES AND RESPONSIBILITIES: See attached Exhibit A. D. WORK PROGRAM/PROJECT SCHEDULE: See attached Exhibit A. EXHIBIT A 165 EXHIBIT "A" SCOPE OF WORK The Consultant is to provide tlw City with the following services: A. Progl'am Administration: Consultant shall: 1. Provide professional and technical staff to perform General Liability Claims Administration services with the assignment of qualified personnel, including at least one principal claims examiner, to efficiently and effectively meet the scope 9f work listed in this section. Such assignment shall be subject to approval by the City. 2 . Represent the City in all matters related to the set-up, investigation, adjustment, processing, negotiation and resolution of liability claims against the City. 3. Inform the City of changes or proposed changes in statutes, rules and regulations and any other case law affecting its General Liability Program. 4. Provide information and guidance regarding the general liability claims program and specified claims. 5. Provide copies of file correspondence and documentation as reqi.wsted by City. 6. Inform City of problem areas and/or trends, both potential and perceived, and provide recommendations and/or solutions to address problem areas and/or trends. 7. Attend appointments, including but not limited to: meetings, conferences, Court appearances and scene investigations at the request of the City. 8. Provide 24-hour on-call service by providing the City with contact information for key personnel. This may include, but is not limited to, responding to an incident scene and/or conducting investigations. 9. Conduct risk management related seminars for department heads and/or City staff at the request of the City. 1 O. Attempt to settle or recommend denial of claims. 166 11. Prepare necessary reports of claims filed for the City's primary and excess carriers. 12. Establish and maintain a file for each potential claim. 13. Prepare a Monthly Stat\1s Report on all claims including litigated claims. Copies of the report shall be furnished to both the city Attomey and Risk Manager within twenty (20) days of the close of each calendar month. The Monthly Status Report shall include, but is not limited to, the following: i. The details of each claim. This includes a list of all claims segregated by policy year showing the following: policy year, case 111.,unber, claimant's name, cause of loss description, date of loss, type of loss, status, losses paid to date, reserves, and total incurred; the outstanding reserves of each claim and detail of all claim payments during the month; investigative costs; claims opened and closed during the month; and any active litigation. 14. The qualified TPA will follow special requirements to the appropriate carriers for the time the City of Huntington Beach was a member of BIG Independent Cities Excess Pool (BICEP), which dissolved effective July 1, 2019. 15. Provide Quarterly Claim reviews to the City, 16. Provide the City with an annual Stewardship report. 17. Submit and assist with file audits by Carriers or Pools. B. Claims Administration Consultant shall provide administrative services that include, but are not limited to: 1. At the direction of the City, claimants or their attorneys will be contacted promptly and appropriate contact will be maintained until the claim is closed . Claimants or their attorneys will receive a telephone call from Consultant or have a contact letter mailed to them from Consultant within 48 hours of receipt of claim by Consultant. 2. Obtain estimates of automobile damage when appropriate. 3. Review the status of claims and adequacy of reserves on all active cases at least every 90 days. 167 4. Provide first investigative report to Risk Management within thirty (30) days of receipt of claim. 5. Provide narrative reports when recommending rejection or settlement of a claim, when a claim is going to trial, or when any other significant events have occl.UTed or will occur. Reports must be clear and concise. 6, Negotiate and approve claim settlements up to $5,000 and submit notice to the Risk Manager. 7. All files will be diaried at appropriate intervals to allow for timely completion of required activity. 8. Content of all files will be in chronological order with correspondence in the designated section. 9. File will clearly and concisely document action taken on the claim. 1 0. Telephone calls will be retumed within 24 hours, If the staff member called is not available within this timeframe, another designated staff member will return the call. 11. Review all new claims for liability and provide an assessment of liability to the City no later than thirty (30) days from receipt of loss notice to City. 12. Identify and notify possible co-defendants. 13. Tender claims to other potential responsible parties. 14. Complete and send Insufficiency letters, rejection notices, delay letters, mitigation of damages letters and other correspondence and communication as is needed. 15. Process all claims in accordance with City's instructions and policies. 16. Have translators available to assist with non-English speaking claimants and/or witnesses. 17. Maintain a procedure to alert necessary persons of important dates with respect to the claims. 18. If the possibility of subrogation exists, pursue subrogation recovery on behalf of the City for 18% of the net recovery. 19. Report to BICEP (Excess Liability Pool) or PRISM in accordance with policy provisions. 168 20. Comply and meet with any excess carrier claims administration requirements. C. Investigations 1. Within ten (10) days of receipt of claims, unless otherwise requested by t4e Risk Manager, take statements of facts from claimants when not represented by an attorney. Statements will be preserved by recording or taking handwritten signed statements. 2. Further investigate claims where the initial review indicates that it is warranted. Further investigation may include, but is not limited to: on- sight investigation, photographs, interviewing witnesses and taking signed or recorded statements, verification of damage or loss, taking measurements, obtaining maps/diagrams from the City or other sources, obtaining medical releases, police reports, internal operations investigations, paramedic reports, marine safety department reports, building permits, or other records as required. 3. If an attorney is involved, direct all communication to the claimant's attorney regarding the investigation, negotiation, and evaluation of any claims leading to a settlement. 4. Report all bodily injury claims to Index Bureau. Conduct bureau searches for repeat claimants. Conduct additional Index Bureau searches at request of the City. 5. Obtain approval from City before engaging the services of an outside vendor for an investigative assignment. D. Litigation Management Consultant shall provide Litigation Management services that include, but are not limited to: 1. Provide City Attorney's Office with transmittal letter outlining the status of the case, results of investigations, primary issues, requested action, a complete copy of the file and any documentation within fourteen (14) days of receipt of lawsuit with a copy to the Risk Manager. 2. Maintain liaison with the City Attorney's Office and defense counsel and provide such investigation as required during the entire litigation process, including but not limited to: additional investigations for pretrial and trial that may be requested by either the City Attorney's Office or defense counsel. 169 3, Obtain approval from City prior to agreement or settlement. 4. Obtain a fully executed release on all settlements and dismissals. 5. Attend Settlement Conferences, mediation or arbitrations as requested. 6. Assist the City Attomey and defense counsel in preparing and/or answering discovery as requested. 7. Assist City personnel in Small Claims Court actions filed by and against City, including but not limited to: obtaining witness information, evidence, assistance in preparing the case for trial, and appearance at the trial if deemed necessary by the City. E. Subrogation/Property Recovery Services All liability and property investigative matters related to the incident or file are completed by the handling claim adjustor of Carl Warren or the City Risk Management Department. Once the investigation work is complete, the claim damage documents are transmitted to Carl Warren's subrogation team to recover the final damages. Basic information such as a police repo1i, or other means of claimant identification of the responsible party to pursue, enables us to prepare a more accurate and effective demand for reimbursement. Once the damage documentation is complete to evidence the amount of recovery sought, we can bring preparation of the demand. The recovery adjustor will work closely with the City's Risk Management Department to tailor the recovery process to your needs. If subrogation potential has been identified on large loss files, with communication, or subrogation experts can have early involvement and coordinate with a subrogation attorney for site inspections, etc. 170 EXHIBIT "B" Payment Schedule (Hourly Payment) A. Hourly Rate CONSULT ANT'S fees for such services shall be based upon the following hourly rate and cost schedule: Sec attached Exhibit B B. Travel Charges for time during travel are not reimbursable. C. Billing 1. All billing shall be done monthly in fifteen (15) minute increments and matched to an appropriate breakdown of the time that was taken to perform that work and who performed it. 2. Each month 1 s bill should include a total to date. That total should provide, at a glance, the total fees and costs incurred to date for the project. 3, A copy of memoranda, letters, reports, calculations and other documentation prepared by CONSULTANT may be required to be submitted to CITY to demonstrate progress toward completion of tasks. In the event CITY rejects or has comments on any such product, CITY shall identify specific requirements for satisfactory completion. 4. CONSULTANT shall submit to CITY an invoice for each monthly payment due. Such invoice shall: A) Reference this Agreement; B) Describe the services performed; C) Show the total amount of the payment due; D) Include a certification by a principal member of CONSUL TANT's firm that the work has been performed in accordance with the provisions of this Agreement; and E) For all payments include an estimate of the percentage of work completed. Upon submission of any such invoice, if CITY is satisfied that CONSULT ANT is making satisfactory progress toward completion of tasks in accordance with this Agreement, CITY shall approve the invoice, in which event payment shall be made within thirty (30) days of receipt of the invoice by CITY. Such approval shall not be unreasonably withheld. If CITY does not approve an invoice, CITY shall notify CONSULTANT in writing of the reasons for non-approval and the schedule of performance set forth in Exhibit "A" may at the option of CITY be suspended until the parties agree that past performance by CONSULT ANT is in, or has been brought into compliance, or until this Agreement has expired or is terminated as provided herein. 1 Exhibit B 171 5. Any billings for extra work or additional services authorized in advance and in writing by CITY shall be invoiced separately to CITY, Such invoice shall contain all of the information required above, and in addition shall list the hours expended and hourly rate charged for such time . Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate , Such approval shall not be unreasonably withheld. Any dispute between the parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement. 2 Exhibit B 172 AMENDED COST OF SERVICES-2 024: Fixed Annual Pricing -3 YEAR, 2-1 YEAR OPTIONS CLAIMS ADMINISTRATION SERVICES Fixed Annual Rate Incident Report/Record Only Fast Track Claims Handling (Obvious liability, documented damages to $2,500) Copy Work Postage Office Expense Claims Set-Up Fee Data Processing Index Bureau (ISO Claims Search and OF AC) MMSEA Filing Fee (liability claims) Miscellaneous/ Allocated Loss Adjustment Expenses (ALAE) (i.e., police reports, medical records, Field Work Services General Liabilit Ad 'uster Services Outside Investi ations A raisals Surveillance/Fraud Unit Annual Administration Services • Data Management • Account Management • Annual Stewardship uarterl Claims Review • RMIS Training/ Technical Suppott • Set-Up (one-time charge) • Ongoing Access (up to 3 users) Repo1t Programming • Carrier TPA Oversight (Data Extract, Feeds, Audits, Compliance & Re 01tin Additional Users Exit Data Conversion Fee Banking/Trust Account Services Trust Account Monitoring Check Issuance and Reconciliations YEAR 1 $185,000 per year Included Included Included Included Included Included Included Included Included At Cost Included IRS RATE At Cost At Cost At Cost Included Included $250 each er ear Retain earned interest Included YEAR 2 $191,475 per year Included Included Included Included Included Included Included Included Included At Cost Included IRS RATE At Cost At Cost At Cost Included Included $250 each er ear Retain earned interest Included YEAR3 $198,176 per year Included Included Included Included Included Included Included Included Included At Cost Included IRS RATE At Cost At Cost Included Included $250 each er ear Retain earned interest Included OPTION YEAR 1 $205,112 per year Included Included Included Included Included Included Included Included Included At Cost Included IRS RATE At Cost At Cost At Cost Included Included $250 each er ear Retain earned interest Included OPTION YEAR2 $212,280 per year Included Included Included Included Included Included Included Included Included At Cost Included IRS RATE At Cost At Cost At Cost Included Included $250 each er ear $10,000 Retain earned interest Included 173 INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION REQUEST 1. Requested: Risk Management 2. Date: February 7, 2024 3. Name of contractor/permittee: Carl Warren & Company 4. Description of work to be performed: Third Party Administrator for Liability Claims 5. Value and length of contract: 3 years $750,000 6. Waiver/modification request: $350,000 Retention on Professional Liability 7 . Reason for request and why it should be granted: Unable to comply with requirements 8 . Identify the risks to the Cit ·n approving this waiver/modification : Low 1. 2. APPROVALS Approvals must be obtained in the order listed on this form . Two approvals are required fo r a request to be granted . Approval from the City Administrator 's Office is only requ ired if Risk Management and the City Attorney's O ·ce disagree . Risj-Management ~ Approved D Denied City Attorney's Office ,P Approved D Denied Date 3. City Manager's Office D Approved D Deni d Signature Date If approved, the completed waiver/modification request is to be submitted to the City Attorney's Office along with the contract for approval. Once the contract has been approved, this form is to be filed with the Risk Management Division of Human Resources Waiver Form -Vianate 2/7/2024 2 :37 :00 PM 174 ACORD® CERTIFICATE OF LIABILITY INSURANCE I DATE (MM/DD/YYYY) ~ 8/24/2023 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER . THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT Venbrook Insurance Services NAME: Venbrook Insurance Services PHONE 818-598-8900 I f.f;~ Nol: 818-598-8910 6320 Cano~a Avenue, 12th Floor /A/('c PJn l=vl\• E-MAIL Woodland ills, CA 91367 ADDRESS : INSURER(S) AFFORDING COVERAGE NAIC# www.venbrook .com CA Lie No. 0080832 INSURER A : Sentinel Insurance Comoanv. Lid . 11000 INSURED INSURER B: Technoloov Insurance Comoanv. Inc. 42376 Venbrook Holdings, LLC INSURER C : Allied World Surolus Lines Insurance Co 24319 Carl Warren & Company, LLC Carl Warren & Company of Nevada, LLC INSURER D: 6320 Cano~a Avenue, 2th Floor INSURER E: Woodland ills CA 91367 INSURER F : COVERAGES CERTIFICATE NUMBER: 75910565 REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN , THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, E XCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS . INSR ADDL SUBR POLICY EFF POLICY EXP LIMITS LTR TYPE OF INSURANCE ,,.,~n lun,n POLICY NUMBER IMM/DDNYYY\ IMM/DD/YYYY\ A ..:L COMMERCIAL GENERAL LIABILITY ✓ ✓ 72SBAAG9334 8/22/2023 8/22/2024 EACH OCCURRENCE s 1000000 ==i CLAIMS-MADE CL] OCCUR DAMAGE TO RENTED PREMISES /Ea occurrence) S 1000000 -MED EXP (Any one person) s 10 000 PERSONAL & ADV INJURY s 1000000 -GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE s2,ooo ,ooo Fl 0 PRO-OLoc PRODUCTS -COMP/OP AGG S2 000 000 POLI CY JECT OTHER: Deductible so A AUTOMOBILE LIABILITY 72SBAAG9334 8/22/2023 8/22/2024 COMBINED SINGLE LIMIT S 1 000 000 /Ea accid ent) -ANY AUTO BODILY INJURY (Per person) $ --OWNED SCHEDULED BODILY INJURY (Per accident) s -AUTOS ONLY -AUTOS ..:L HIRED _L NON-OWNED PROPERTY DAMAGE s AUTOS ONLY AUTOS ONLY /Per acci dent) Deductible so UMBRELLA LIAB HOCCUR EACH OCCURRENCE s r-- EXCESS LIAB CLAIMS-MADE AGGREGATE $ DED I I RETENTION s $ B WORKERS COMPENSATION TWC4309755 8/22/2023 8/22/2024 ✓ I ~-\%uTE I I OTH- AND EMPLOYERS' LIABILITY ER Y/N ANYPROPRIETOR/PARTNER/EXECUTIVE GJ E.L. EACH ACCIDENT S 1000000 OFFICER/MEMBER EXCLUDED? N/A (Mandatory in NH) E.L. DISEASE -EA EMPLOYEE $ 1 ()()/\ (1(\(\ If yes, describe under DESCRIPTION OF OPERATIONS below E.L. DISEASE -POLICY LIMIT S 1000000 C Errors & Omissions 0312-1299 6/1/2023 6/1/2024 $5,000,000 each claim/agg, $350,000 rel. DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached If more space Is required) Segment: Carl Warren & Company LLC City of Huntington Beach, its Officers, Elected or Appointed Officials, Employees, Ag e nts and Volunteers are included as additional insured as respects General Liability, when required by written contract, per Form SS 00 08 04 05 . General Liability Waiver of Subrogation applies per form SS 00 08 04 05, when required by written contract . CERTIFICATE HOLDER CANCELLATION Cit~ of Huntington Beach SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN 20 0 Main Street ACCORDANCE WITH THE POLICY PROVISIONS. Huntington Beach CA 92648 AUTHORIZED REPRESENTATIVE ~vU~LS!w4 I Pamala Sheridan © 1988-2015 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD 75910565 I 23-24 ALL LINES -CARL l•IARREN I Pamala Sheridan I 8/24/2023 5:23:47 PM (PST) I Page 1 of 7 175 AGENCY CUSTOMER ID: --------------------- LO C #: --------~ ACORD® ~ ADDITIONAL REMARKS SCHEDULE AGENCY NAMED INSURED Venbrook Insurance Services Venbrook Holdings, LLC Carl Warren & Company, LLC POLICY NUMBER Carl Warren & Companr of Nevada, LLC 6320 Cano~a Avenue1 2th Floor Woodland ills CA 9 367 CARRIER I NAIC CODE EFFECTIVE DATE : ADDITIONAL REMARKS THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: 25 FORM TITLE: Certificate of Liability (03/16) HOLDER: City of Huntington Beach ADDRESS: 2000 Main Street Huntington Beach CA 92648 Page Ca rl War r e n & Co mp a n y , LL C ; E &O Re tr o a ct i ve Date : 01 /3 1 /2 01 9 ; Cyb e r Ret r oac ti ve Da t e : 01/3 1 /2 0 19 of Ca r l War r e n & Co mp a n y of Nevada , LL C ; E &O Retroactive Da t e : 01 /3 1 /2 01 9 ; Cyber Re tr oac ti ve Da t e : 0 1/3 1 /2 019 ACORD 101 (2008/01) © 2008 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD ATTACHMENT 75910565 I 23-24 ALL LINES -CARL \•/ARREN I Pamala Sheridan I 8/24/2023 5 :23 :47 PM (PST) I Page 2 of 7 176 72SBAAG93 34 BUSINESS LIABILITY COVERAGE FORM F. OPTIONAL ADDITIONAL INSURED COVERAGES If listed or shown as applicable in the Declarations, one or more of the following Optional Additional Insured Coverages also apply. When any of these Optional Additional Insured Coverages apply, Paragraph 6. (Additional Insureds When Required by Written Contract, Written Agreement or Permit) of Section c., Who Is An Insured, does not apply to the person or organization shown in the Declarations. These coverages are subject to the terms and conditions applicable to Business Liability Coverage in this policy, except as provided below: 1. Additional lnsu red -Designated Person Or ,...._'v/., Organization I ;f'' WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising Injury" caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: a. in the performance of your ongoing operations; or b. In connection with your premises owned by or rented to you. 2. Additional Insured -Managers Or Lessors Of Premises a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organizatlon(s) shown In the Declarations as an Additional Insured - Designated Person Or Organization; but only with respect to liability arising out of the ownership, maintenance or use·of that part of the premises leased to you and shown in the Declarations. b. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply: This insurance does not apply to : (1) Any "occurrence" which takes place after you cease to be a tenant in that premises; or (2) Structural alterations, new construction or demolition operations performed by or on behalf of such person or organization. 8/24/2023 3. Additional Insured -Grantor Of Franchise WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured - Grantor Of Franchise, but only with respect to their liability as grantor of franchise to you. 4. Additional Insured • Lessor Of Leased Equipment I a. WHO IS AN INSURED under Section c. is 1 amended to Include as an additional insured the person(s) or organization(s) shown In the Declarations as an Additional Insured -Lessor of Leased Equipment , but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by your maintenance, operation or use of equipment leased to you by such person(s) or organization(s). b. With respect to the insurance afforded to these additional Insureds, this Insurance does not apply to any "occurrence" which takes place after you cease to lease that equipment. 5. Additional Insured -Owners Or Other Interests From Whom Land Has Been Leased a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organlzation(s) shown in the Declarations as an Additional Insured -Owners Or Other Interests From Who·m Land Has Been Leased, but only with respect to liability arising out of the ownership, maintenance or use of that part of the land leased to you and shown in the Declarations. b. With respect to the insurance afforded to these additional insureds, the following additional exc lusions apply: This insurance does not apply to: (1) Any "occurrence" that takes place after you cease to lease that land; or (2) Structural alterations, new construction or demolition operations pe1formed by or on behalf of such person or organization . 6. Additional Insured -State Or Political Subdivision -Permits a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the state·· or political subdiv ision shown in the Declarations as an Additional Page 18 of 24 Form SS 00 08 04 05 75910565 I 23-24 AL L L INES -CARL l·l J\RREN I Pamala Sheridan I 8/24/2023 5 :23 :47 PM (PST ) I Page 3 of 7 177 C ( Insured -State Or Political Subdivision ~ Permits, but only with respect to operations performed by you or on your behalf for which the state or political subdivision has issued a permit. b. With respect to the Insurance afforded to these additional insureds, the following additional exclusions apply: This insurance does not apply to: (1) "Bodily Injury", "property damage" or "personal and advertising injury" arising out of operations performed for the state or municipality; or (2) "Bodily injury" or "property damage" included in the "product-completed operations" hazard. 7. Additional Insured-Vendors a. WHO IS AN INSURED under Section C. Is amended to Include as an additional insured the person(s) or organization(s) (referred to below as vendor) shown in the Declarations as an Additional Insured - Vendor, but only with respect to "bodily injury " or "property damage" arising out of "your products" which are distributed or sold in the regular course of the vendor's business and only if this Coverage Part provides coverage for "bodily injury" or "property damage" Included within the "products-completed operations hazard". b. The insurance afforded to the vendor is subject to the following additional exclusions: (1) This insurance does not apply to: (a) "Bodily injury" or "property damage" for which the vendor Is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages that the vendor would have in the absence of the contract or agreement; (b) Any express warranty unauthorized by you; (c) Any physical or chemical change in the product made intentionally by the vendor; (d) Repackaging, unless unpacked solely for the .purpose of inspection, demonstration, testing, or the substitution of parts under instructions from the manufacturer, and then repackaged in the original container; BUSINESS LIABIL.ITY COVERAGE FORM (e) Any failure to make such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products; (f) Demonstration , installation, servicing or repair operations, except such operations performed at the vendor's premises in connection with the sale of the product; (g) Products which, after dlstributiOn or sale by you, have been labeled or relabeled or used as a container, part or ingredient of any other thing or substance by or for the vendor; or (h) "Bodily Injury" or "property damage" arisi~g out of the sole negligence of the vendor for its own acts or omissions or those of Its employees or anyone else acting on its behalf. However, this exclusion does not apply to : (i) The exceptions contained in Subparagraphs (d) or (f); or (ii) Such inspections, adjustments, tests or servicing as the vendor has agreed to make or normally undertakes to make in the usual course of business, in connection with the distribution or sale of the products. (2) This insurance dqes not apply to any insured person or organization from whom you have acquired such products, or any ingredient, part or container, entering into, accompanying or containing such products . 8. Additional Insured -Controlling Interest WHO IS AN INSURED under Section C. is amended to Include as an additional Insured the person(s) or organization(s) shown In the Declarations as an Additional Insured - Controlling Interest, but only with respect to their liability arising out of: a. Their financial control of you; or b. Premises they own, maintain or control while you lease or occupy these premises . Form SS 00 08 04 05 Page 19 of 24 7591 0 565 I 23-24 ALL LINES -CAR L l•JARREN I Pama l a Sheri d an I 8/24/2023 5: 23 : 47 PM (PST) I Page 4 ot 7 178 72SBAAG9334 If more than one limit of insurance under this policy and any endorsements attached thereto applies to any claim or "suit", the most we will pay under this policy and the endorsements is the single highest limit of liability of all coverages applicable to such claim or "suit". However, this paragraph does not apply to the Medical Expenses limit set forth in Paragraph 3. above. The Limits of Insurance of this Coverage Part apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an additional period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining the Limits of Insurance. E. LIABILITY AND MEDICAL EXPENSES GENERAL CONDITIONS 1. Bankruptcy Bankruptcy or insolvency of the insured or of the insured's estate will not relieve us of our obligations under this Coverage Part. 2. Duties In The Event Of Occurrence, Offense, Claim Or Suit a. Notice Of Occurrence Or Offense You or any additional insured must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include: (1) How, when and where the "occurrence" or offense took place ; (2) The names and addresses of any injured persons and witnesses; and (3) The nature and location of any injury or damage arising out of the "occurrence" or offense. b. Notice Of Claim If a claim is made or "suit" is brought against any insured, you or any additional insured must: (1) Immediately record the specifics of the claim or "suit" and the date received; and (2) Notify us as soon as practicable . You or any additional insured must see to it that we receive a written notice of the claim or "suit" as soon as practicable. c. Assistance And Cooperation Of The Insured You and any other involved insured must: Form SS 00 08 04 05 08/24/2023 BUSINESS LIABILITY COVERAGE FORM (1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit"; (2) Authorize us to obtain records and other information; (3) Cooperate with us in the investigation, settlement of the claim or defense against the "suit"; and (4) Assist us, upon our request, in the enforcement of any right against any person or organization that may be liable to the insured because of injury or damage to which this insurance may also apply. d. Obligations At The lnsured's Own Cost No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent. e. Additional lnsured's Other Insurance If we cover a claim or "suit" under this Coverage Part that may also be covered by other insurance available to an additional insured, such additional insured must submit such claim or "suit" to the other insurer for defense and indemnity. However, this provision does not apply to the extent that you have agreed in a written contract , written agreement or permit that this insurance is primary and non-contributory with the additional insured's own insurance. f. Knowledge Of An Occurrence, Offense, Claim Or Suit Paragraphs a. and b. apply to you or to any additional insured only when such "occurrence", offense, claim or "suit" is known to: (1) You or any additional insured that is an individual; (2) Any partner, if you or an additional insured is a partnership; (3) Any manager, if you or an additional insured is a limited liability company; (4) Any "executive officer" or insurance manager, if you or an additional insured is a corporation; (5) Any trustee, if you or an additional insured is a trust; or (6) Any elected or appointed official, if you or an additional insured is a political subdivision or public entity. Page 15 of 24 75910565 I 23-24 ALL LINES -CARL l·l ARREN I Pamala Sheridan I 8/24/2023 5 :23 :47 PM (PST) I Page 5 of 7 179 BUSINESS LIABILITY COVERAGE FORM This Paragraph f. applies separately to you and any additional insured. 3. Financial Responsibility Laws a. When this policy is certified as proof of financial responsibility for the future under the provisions of any motor vehicle financial responsibility law, the insurance provided by the policy for "bodily injury" liability and "property damage" liability will comply with the provisions of the law to the extent of the coverage and limits of insurance required by that law. b. With respect to "mobile equipment" to which this insurance applies, we will provide any liability , uninsured motorists, underinsured motorists, no-fault or other coverage required by any motor vehicle law. We will provide the required limits for those coverages. 4. Legal Action Against Us No person or organization has a right under this Coverage Form: a. To join us as a party or otherwise bring us into a "suit" asking for damages from an insured; or b. To sue us on this Coverage Form unless all of its terms have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured; but we will not be liable for damages that are not payable under the terms of this insurance or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant's legal representative. 5. Separation Of Insureds Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this policy to the first Named Insured, this insurance applies: a. As if each Named Insured were the only Named Insured; and b. Separately to each insured against whom a claim is made or "suit" is brought. 6. Representations a. When You Accept This Policy By accepting this policy, you agree: (1) The statements in the Declarations are accurate and complete; (2) Those statements are based upon representations you made to us; and Page 16 of 24 (3) We have issued this policy in reliance upon your representations. b. Unintentional Failure To Disclose Hazards If unintentionally you should fail to disclose all hazards relating to the conduct of your business at the inception date of this Coverage Part, we shall not deny any coverage under this Coverage Part because of such failure . 7. Other Insurance If other valid and collectible insurance is available for a loss we cover under this Coverage Part, our obligations are limited as follows: a. Primary Insurance This insurance is primary except when b. below applies. If other insurance is also primary, we will share with all that other insurance by the method described in c. below . b. Excesslnsurance This insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis: (1) Your Work That is Fire, Extended Coverage, Builder's Risk, Installation Risk or similar coverage for "your work"; (2) Premises Rented To You That is fire, lightning or explosion insurance for premises rented to you or temporarily occupied by you with permission of the owner; (3) Tenant Liability That is insurance purchased by you to cover your liability as a tenant for "property damage" to premises rented to you or temporarily occupied by you with permission of the owner; (4) Aircraft, Auto Or Watercraft If the loss arises out of the maintenance or use of aircraft, "autos" or watercraft to the extent not subject to Exclusion g. of Section A. -Coverages. (5) Property Damage To Borrowed Equipment Or Use Of Elevators If the loss arises out of "property damage" to borrowed equipment or the use of elevato rs to the extent not subject to Exclusion k. of Section A. - Coverages. Form SS 00 08 04 05 75910565 I 23-24 ALL LINES -CARL l•lARREN I Pamala Sheridan I 8/24/2023 5:23:47 PM (PST) I Page 6 of 7 180 (6) When You Are Added As An (7 Additional Insured To Other Insurance That is other insurance available . to you covering liability for damages ans1ng out of the premises or operations, or products and completed operations, for which you have been added as an additional insured by that insurance; or When You Add Others As An Additional Insured To This Insurance That is other insurance available to an additional insured. However, the following provisions apply to other insurance available to any person or organization who is an additional insured under this Coverage Part: (a) Primary Insurance When Required By Contract This insurance is primary if you have agreed in a written contract, written agreement or permit that this insurance be primary. If other insurance is also primary, we will share with all that other insurance by the method described in c. below. (b) Primary And Non-Contributory To Other Insurance When Required By Contract If you have agreed in a written contract, written agreement or permit that this insurance is primary and non-contributory with the additional insured's own insurance, this insurance is primary and we will not seek contribution from that other insurance . Paragraphs (a) and (b) do not apply to other insurance to which the additional insured has been added as an additional insured. When this insurance is excess, we will have no duty under this Coverage Part to defend the insured against any "suit" if any other insurer has a duty to defend the insured against that "suit". If no other insurer defends, we will undertake to do so, but we will be entitled to the insured's rights against all those other insurers. Form SS 00 08 04 05 BUSINESS LIABILITY COVERAGE FORM When this insurance is excess over other insurance , we will pay only our share of the amount of the loss, if any, that exceeds the sum of: (1) The total amount that all such other insurance would pay for the loss in the absence of this insurance ; and (2) The total of all deductible and self- insured amounts under all that other insurance. We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance provision and was not bought specifically to apply in excess of the Limits of Insurance shown in the Declarations of this Coverage Part. c. Method Of Sharing If all the other insurance permits contribution by equal shares, we will follow this method also . Under this approach, each insurer contributes equal amounts until it has paid its applicable limit of insurance or none of the loss remains , whichever comes first. If any of the other insurance does not permit contribution by equal shares, we will contribute by limits. Under this method, each insurer's share is based on the ratio of its applicable limit of insurance to the total applicable limits of insurance of all insurers. 8. Transfer Of Rights Of Recovery Against Others To Us a. Transfer Of Rights Of Recovery If the insured has rights to recover all or part of any payment, including Supplementary Payments, we have made under this Coverage Part, those rights are transferred to us . The insured must do nothing after loss to impair them. At our request , the insured will bring "suit" or transfer those rights to us and help us enforce them. This condition does not apply to Medical Expenses Coverage. b. Waiver Of Rights Of Recovery (Waiver Of Subrogation) If the insured has waived any rights of recovery against any person or organization for all or part of any payment, including Supplementary Payments , we have made under this Coverage Part, we also waive that right, provided the insured waived their rights of recovery against such person or organization in a contract, agreement or permit that was executed prior to the injury or damage. Page 17 of 24 75910565 I 23-24 ALL LINES -CARL WARREN I Pamala Sher i da n I 8/24/2023 5 :23 :47 PM (PST ) I Page 7 of 7 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-192 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Eric G. Parra, Interim City Manager VIA:Eric Parra, Chief of Police PREPARED BY:Lt. Thoby Archer and Ingrid Ono, Executive Assistant Subject: Approve Amendment No. 2 authorizing a one-year contract extension with Universal Protection Services, LP, DBA Allied Universal Security Services (UASS) for street sweeping parking enforcement services Statement of Issue: In 2019, Council approved a three-year contract with Allied Universal Security Services to outsource the City’s street sweeping parking enforcement. This contract was awarded through a competitive bid process. The contract allows for two (2) one-year extensions to continue services, the first of which was exercised in 2023. Based on Allied Universal Security Services’ (Allied) performance, staff recommends approving a contract extension for one additional year through 2024. Financial Impact: The cost of the initial three years of the City’s contract with Allied was $362,000, $373,000, and $384,000 for a total of $1,119,000. The first one-year extension with a CPI adjustment was $399,272.14. The final, proposed one-year contract extension with CPI adjustment will cost $411,269.45. The additional sum shall be added to the current contract amount of $1,518,272.14, for a new total contract amount not to exceed $1,929,541.59. Funding for these services is included in the FY 2023-24 budget, and no additional funding is requested. It should be noted separately that in 2023, Allied contractors wrote over 38,000 citations, resulting in over $1.7 million in fines assessed. Recommended Action: Approve and authorize “Amendment No. 2 to Service Agreement between the City of Huntington Beach and Universal Protection Services, LP DBA Allied Universal Security Services (UASS) for Street Sweeping Enforcement Services” not to exceed $411,269.45 for the next calendar year; and City of Huntington Beach Printed on 3/13/2024Page 1 of 2 powered by Legistar™181 File #:24-192 MEETING DATE:3/19/2024 authorize the Mayor and City Clerk to execute the attached contract. Alternative Action(s): Do not approve and direct staff accordingly. Analysis: The City’s agreement with Allied for street sweeping parking enforcement services has allowed the Police Department to replace five parking control officer positions and decommission three parking control vehicles and maintenance. By contracting for these services, the Police Department was able to realize cost savings while also increasing the reliability of street sweeping enforcement in the City. As such, staff recommends extending the service agreement with Allied for an additional one-year period and increasing the contract amount by $411,269.45. This Amendment No. 2 will extend the agreement through December 31, 2024. Environmental Status: This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Strategic Plan Goal: Non Applicable - Administrative Item Attachment(s): 1. Amendment No. 2 2. Original RCA (19-967) and contract 3. Certificate of Insurance 4. 2/16 Supplemental Communications City of Huntington Beach Printed on 3/13/2024Page 2 of 2 powered by Legistar™182 183 AMENDMENT NO. 2 TO SERVICE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND UNIVERSAL PROTECTION SERVICE, LP OBA ALLIED UNIVERSAL SECURITY SERVICES (AUSS) FOR STREET SWEEPING ENFORCEMENT SERVICES THIS AMENDMENT is made and entered into by and between the CITY OF HUNTINGTON BEACH, a California municipal corporation, hereinafter referred to as"City," and UNIVERSAL PROTECTION SERVICE, LP a California limited pa11nership OBA ALLIED UNIVERSAL SECURITY SERVICES, hereinafter refened to as "Consultant." WHEREAS, City and Consultant are parties to that ce11ain agreement, dated January 1, 2020, entitled "Se1vice Agreement Between the City of Huntington Beach and Universal Protection Service, LP dba Allied Universal Security Services (AUSS)" which agreement shall hereinafter be referred to as the "Original Agreement"; and City and Consultant wish to amend the Original Agreement to increase the amount of compensation to be paid to Consultant, NOW, THEREFORE, it is agreed by City and Consultant as follows: 1. ADDITIONAL COMPENSATION In consideration of the se1vices to be performed under the Original Agreement, City agrees to pay Consultant at the rates specified in Exhibit B which is attached hereto and incorporated by reference into this Agreement. City further agrees to pay Consultant an additional sum not to exceed Four Hundred Eleven Thousand Two Hundred Sixty Nine Dollars and Forty Five Cents ($411,269.45). The additional sum shall be added to the original sum of One Million Five Hundred Eighteen Thousand Two Hundred Seventy Two Dollars and Fom1een Cents ($1,518,272.14), for a new contract 23-13806/324324 184 amount not to exceed One Million Nine Hundred Twenty Nine Thousand rive Hundred Farly One Dollars and Fifty Nine Cents ($1,929,541.59). 2. TERM The term of the Agreement is extended for one additional year until December 31, 2024. 3. REAFFIRMATION Except as specifically modified herein, all other terms and conditions for the Original Agreement shall remain in full force and effect. IN WITNESS WHEREOr, the pa1tics hereto have caused this Agreement lo be executed by and through their authorized officers on __ _ -----' 2024. UNIVERSAL PROTECTION SERVICE, LP DBA ALblED UNIVERSAL SECURITY :RV ~ $teue.. Z:Za -Eh bo . printnflme L ~. ITS: (circle one) Chairma (~en 'f'ice !'resident I ~A . By: __ V/_-#-.,,C~ ..... __ A ..:;._ _____ ~ /J ~Br~t__ print llillllC ITS:~·c/e one) Sec1·c1ar£c hief Financial Oftic ~sst. Secretary -Treasure!' REVIEWED AND APPROVED: City Manager 23-13806/324324 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California Mayor City Clerk .0, IN~;z:o ( Chief of Police 2 185 SECURITY BUDGET City o f Huntington B each 2000 Main street Huntington Beach . CA 92648 • Monday January 1 2024 1. REQUIREMENT: Provide unarmed, uniformed professional security officers who are capable of exercising good judgment, will be highly visible at all times, deter crime, and perform other duties as outlined by the client. 2. SCHEDUlE: 3. BUDGET ESTIMATE: Patrol Su erviso r Sub Total ( Labor ,,.otet; a} &:tra age aod speoals are bi!ed at an agreed upon hourty .e l'IO to be less th , ff1e holiday .T. rale . } As a result of C&frfomia paid sick leave i.aw . B 1522} !hat is eF.active July 1. 2015, al costs associated wittt t~ lawwi1 be billed as ·. rred. '.ied • ive aJ . y bill y costs illcurred as a • of cbarige i ~. stare, or local legi$tlalionor tax . 5. HOLIDAYS: Allied Universal recognizes the following holidays. Security officers working on these days will be paid time and one -half. Client will be billed at the overtime rate/holiday rate for those days . New Years Day President's Day Memorial Day 186 City of Huntington Beach File #: 19-967 '1)q,u/ l) J.)(?IZ..GSZ'jA.JSf<.../ lfl'Pl!Y/61:> r-o As 111-fEM>~ MEETING DATE: 11/18/2019 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Oliver Chi, City Manager PREPARED BY: Robert Handy, Chief of Police Subject: Approve contract for street sweeping enforcement with Universal Protection Services, LP, DBA Allied Universal Security Services Statement of Issue: Street sweeping is helpful in reducing pollution, removing debris, preventing clogs in storm drains, and improving street appearance on our 1,121 miles of mostly residential and commercial streets. It is important that street sweeping and its related enforcement component is efficient and effective. Low staffing levels and other factors have contributed to less than full enforcement. Outsourcing street sweeping enforcement will increase the number of citations written and provide full time employees the opportunity to serve the citizens in other important capacities. In July of 2019, a Request for Proposal (RFP) was advertised for street sweeping enforcement services . Ten companies submitted proposals prior to the August deadline. Proposals were independently reviewed by an Evaluation Committee consisting of City staff from various Departments. The proposals were reviewed using standardized criteria. As a result of this process, four companies were identified as being able to meet the needs of the City. These four companies were invited to participate in an in-person interview to further discuss the proposal. The same Evaluation Committee sat on this panel and evaluated the companies. From this process, the City contacted references provided by the top two ranked companies. Based on the Evaluation Committees' analysis of the RFP proposals, the in-person interviews, and a references check, Allied Universal Security Services was determined to be the most qualified company which met all of the requirements to provide high quality street sweeping enforcement services to the City of Huntington Beach. Allied Universal Security Services is a well-established and professional company who is experienced in street sweeping enforcement. They have performed street sweeping enforcement duties for other Orange County cities and they will bring innovative ideas to the City through the use of technology and data analysis. Financial Impact: City of Huntington Beach Page 1 of 3 Printed on 11 /13 /2019 powerec:!4Q, Leg istar ™ 187 File #: 19-967 MEETING DATE: 11'/18/2019 Over a three-year period, the total amount of this contract is $1,119,000. Annual costs for services is $362,000 for year 1, $373,000 for year 2, and $384,000 for year 3. Sufficient appropriations are budgeted in the current fiscal year in the Police Department. Funds for future years will be budgeted accordingly. With an approved service agreement, the annual cost savings will be approximately $117,000. This savings will be realized with the defunding of five (5) parking enforcement officer positions and decommissioning of three (3) vehicles. Any increase to revenue is unknown at this time. Recommended Action: Approve and authorize the Mayor and City Clerk to execute "Service Agreement Between the City of Huntington Beach and Universal Protection Services, LP OBA Allied Universal Security (UASS) for Street Sweeping Enforcement Services" in an amount not to exceed $1,119,000 over a three-year term; and authorize the City Manager to execute the attached contract. Alternative Action(s): Do not approve and direct staff accordingly. Analysis: It is important that street sweeping enforcement is efficient and effective. Our Parking Control Officer's (PCO) are often pulled from street sweeping enforcement duties due to other priority calls for service and citizen complaints. With increased housing, more community events, homeless issues, recreational vehicle parking complaints, and inconsistent street sweeping enforcement, it becomes even more important that the City find ways to improve the reliability of street sweeping enforcement. By contracting with a private company, the City can redirect existing personnel and resources to handle quality of life issues, citizen complaints, and other community priorities. Based on a thorough evaluation of all proposals, and a review of the cost for services for maintaining in-house street sweeping enforcement, it was determined the proposal submitted by Allied Universal Security Services represents the best value to the City. The initial annual cost for services is $362,000, which represents a significant one-time and annual cost savings when compared to maintaining the services in-house. The annual cost in the two subsequent years is anticipated to be approximately $373,000 and $384,000 respectively. The contracted company will be driving fuel-efficient vehicles which will be branded to match the existing fleet. Allied Universal will use improved technology and analytics to more effectively monitor their employees and street sweeping enforcement efforts. This will lead to positive outcomes for the City and the community by further supporting Department and City strategic goals. The Huntington Beach Police Department has met with Allied Universal Security Services leadership and outlined the street sweeping enforcement route information as well as the expectations of the City to improve street sweeping enforcement services while improving customer service. Allied Universal Security Services has clearly demonstrated their ability and commitment to meet the City's expectations with their written proposal as well as during the interview process. City of Huntington Beach Page 2 of 3 Printed on 11/13/2019 powered4:,1,, Legistarn• 188 File #: 19-967 MEETING DATE: 11/18/2019 No city staff will be laid off as a result of the outsourcing. It is recommended the City Council award a service agreement to Allied Universal Security Services for City-wide street sweeping enforcement services for a not to exceed amount of $1,119,000 for three (3) years. Environmental Status: Not applicable. Strategic Plan Goal: Enhance and modernize public safety service delivery Attachment(s): 1. Proposed Contract with Universal Protection Services, LP, OBA Allied Universal Security Services 2. Proposed Contract Exhibit A 3. Proposed Contract Exhibit B City of Huntington Beach Page 3 of 3 Printed on 11/13/2019 powereci'l;q 189 City Council/ ACTION AGENDA November 18, 2019 Public Financing Authority 14. 15. 16. Recommended Action: A) Approve an additional appropriation of $150,000 for Fire Prevention inspection , plan check and environmental engineering services as these expenditures are primarily cost-neutral and generally offset by reimbursements from developers and revenues generated from inspection and plan review services; and , B) Increase the Fire Department's professional services authority by $150 ,000 to ensure compliance with Administration Regulation No. 228 . Approved 7-0 19-967 Approved contract for street sweeping enforcement with Universal Protection Services, LP, DBA Allied Universal Security Services Recommended Action: Approve and authorize the Mayor and City Clerk to execute "Service Agreement Between the City of Huntington Beach and Universal Protection Services , LP DBA Allied Universal Security (UASS) for Street Sweeping Enforcement Services" in an amount not to exceed $1 ,119 ,000 over a three-year term ; and authorize the City Manager to execute the attached contract. Approved 7-0 as amended to document defunding of five (5) parking enforcement officer positions; return to Council in six months with an update on enforcement 19-1038 Approved First Amendment to Lease between the City and Kokomo's Surfside Grill, Inc., for a Beach Food Concession at the Marine Safety Education Center and approved Consent to Assignment and Assumption of Lease for Kokomo's Concession Recommended Action: A) Approve and authorize the City Manager to execute the Consent to Assignment and Assumption of Lease Agreement for Kokomo's Concession ; and 8) Approve and authorize the City Manager to execute the First Amendment to Lease dated September 5, 2017 between the City of Huntington Beach and Kokomo 's Surfside Grill , a California Corporation for a Beach Food Concession on the first floor level of the Marine Safety Education Center. Approved 7-0 19-1129 Adopted Resolution 2019-11 approving a summary vacation of an easement over a portion of 13th Street and Crest Avenue; adopted Resolution 2019-77 declaring a strip of City-owned property as surplus property; approved Quitclaim Deed for ownership of easement and the agreement for sale of surplus real property between the City and Dawn and Naomi Shimoda; and, authorized recordation of resolutions and exhibits with the Orange County Page 4 of 8 190 SERVICE AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND UNIVERSAL PROTECTION SERVICES, LP DBA ALLIED UNIVERSAL SECURITY SERVICES (UASS) FOR STREET SWEEPING ENFORCEMENT SERVICES THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter called "City," and Universal Protection Services, LP DBA Allied Universal Security Services (AUSS}, a California corporation, hereinafter referred to as "Contractor." Recitals A. The City desires to retain a Contractor having special skill and knowledge in the field of street sweeping enforcement services. B. Contractor represents that Contractor is able and willing to provide such services to the City. C. In undertaking the performance of this Agreement, Contractor represents that it is knowledgeable in its field and that any services performed by Contractor under this Agreement will be performed in compliance with such standards as may reasonably be expected from a comparable company or firm in the field. Contractor has been selected to perform these services pursuant to Huntington ,Beach Municipal Code Chapter 3.02. NOW, THEREFORE, it is agreed by City and Contractor as follows: 1. Scope of Services Contractor shall provide all services as described in Exhibit "A," which is attached hereto and incorporated into this Agreement by this reference. These services shall sometimes hereinafter be referred to as the "Project." Contractor hereby designates Steve Clayton, Regional President, Southwest Division (UASS), who shall represent it and be its sole contact and agent in all consultations with City during the performance of this Agreement. 2. City Staff Assistance City shall assign a staff coordinator to work directly with Contractor in the performance of this Agreement. 19-8160/217547 1 191 3. Compensation a. City agrees to pay, and Contractor agrees to accept as total payment for its services, the rates and charges identified in Exhibit "B." The total sum to be expended under this Agreement, shall not exceed Three Hundred Sixty Two Thousand Dollars ($362,000) during the first year of the contract, Three Hundred Seventy Three Thousand Dollars ($373,000) during the second year of the contract, and Three Hundred Eighty Four Thousand Dollars ($384,000) during the third year of the contract. During the life of the three (3) year contract, the cost is anticipated to not exceed One Million One Hundred Nineteen Thousand Dollars ($1,119,000). b. Payment by City shall be made within thirty (30) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. c. Contractor shall be paid pursuant to the terms of Exhibit "B." 4. Term Time is of the essence of this Agreement. The services of Contractor are to commence January 1, 2020, or as soon as practicable after the execution of this Agreement by City (the "Commencement Date") and terminate January 1, 2023, unless terminated earlier in accordance with the provisions of this Agreement. Contract may be extended for 2 additional one-year periods if mutually agreed to in writing by both parties. The time for performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit "A." This schedule and Term may be amended to benefit the Project if mutually agreed to in writing by City and Contractor. In the event the Commencement Date precedes the Effective Date, Contractor shall be bound by all terms and conditions as provided herein. 5. Extra Work In the event City requires additional services not included in Exhibit "A" or changes in the scope of services described in Exhibit "A," Contractor will undertake such work only after receiving written authorization from City. Additional compensation for such extra work shall be allowed only if the prior written approval of City is obtained. 6. Disposition of Plans, Estimates and Other Documents Contractor agrees that title to all materials prepared hereunder, including, without limitation, all original drawings, designs, reports, both field and office notices, calculations, computer code, language, date or programs, maps, memoranda, letters and other documents, shall belong to City, and Contractor shall turn these materials over to 19-8160/217547 2 192 City upon expiration or termination of this Agreement or upon Project completion, whichever shall occur first. These materials may be used by City as it sees fit. 7. Hold Harmless Contractor 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, and consequential damage or liability of any kind or nature, however caused, including those resulting from death or injury to Contractor's employees and damage to Contractor's property, arising directly or indirectly out of the obligations or operations herein undertaken by Contractor, caused in whole or in part by any negligent act or omission of the Contractor, any subcontractors, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, including but not limited to concurrent active or passive negligence, except where caused by the active negligence, sole negligence, or willful misconduct of the City. Contractor will conduct all defense at its sole cost and expense and City shall approve selection of Contractor'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 a limitation upon the amount of indemnification to be provided by Contractor. 8. Workers Compensation Insurance Pursuant to California Labor Code Section 1861, Contractor acknowledges awareness of Section 3 700 et seq. of this Code, which requires every employer to be insured against liability for workers' compensation; Contractor covenants that it will comply with such provisions prior to commencing performance of the work hereunder. Contractor shall obtain and furnish to City workers' compensation and employer's liability insurance in an amount of not less than the State statutory limits. Contractor shall require all subcontractors to provide such workers' compensation and employer's liability insurance for all of the subcontractors' employees. Contractor shall furnish to City a certificate of waiver of subrogation under the terms of the workers' compensation and employer's liability insurance and Contractor shall similarly require all subcontractors to waive subrogation. 9. General Liability Insurance In addition to the workers' compensation and employer's liability insurance and .Contractor's covenant to defend, hold harmless and indemnify City, Contractor shall obtain and furnish to City, a policy of general public liability insurance, including motor vehicle coverage covering the Project/Service. This policy shall indemnify Contractor, 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 Project/Service, and shall provide coverage in not less than the following amount: combined single limit bodily 19-8160/217547 3 193 injury and property damage, including products/completed operations liability and blanket contractual liability, of One Million Dollars ($1,000,000) 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) 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) for this Project/Service. 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 Project/Service shall be deemed excess coverage and that Contractor's insurance shall be primary. 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. 10. Automobile Liability Insurance Contractor shall obtain and furnish to City an automotive liability insurance policy covering the work performed by it hereunder. This policy shall provide coverage for Contractor's automotive liability in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and a separate "Additional Insured Endorsement" page listing both the policy number and naming the "City of Huntington Beach, its officers, elected or appointed officials, employees, agents and volunteers" as additional insured on the endorsement. The above-mentioned insurance shall not contain a self-insured retention, "deductible" or any similar form of limitation on the required coverage except with the express written consent of City. 11. Certificate of Insurance Prior to commencing performance of the work hereunder, Contractor shall furnish to City a certificate of insurance subject to approval of the City Attorney evidencing the foregoing insurance coverage as required by this Agreement; the certificate shall: a. provide the name and policy number of each carrier and policy; b. state that the policy is currently in force; and c. promise that such policy shall not be suspended, voided or canceled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice; however, ten (10) days' prior written notice in the event of cancellation for nonpayment of premium. Contractor shall maintain the foregoing insurance coverage in force until the work under this Agreement is fully completed and accepted by City. This requirement for carrying the foregoing insurance coverage shall not derogate from Contractor's defense, hold harmless and indemnification obligations as set forth in 19-8160/217547 4 194 this Agreement. City or its representative shall at all times have the right to demand the original or a copy of the policy of insurance. Contractor shall pay, in a prompt and timely manner, the premiums on the insurance hereinabove required. 12. Independent Contractor Contractor 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. Contractor shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for Contractor and its officers, agents and employees and all business licenses, if any, in connection with the Project and/or the services to be performed hereunder. 13. Conflict of Interest Contractor covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 14. Termination This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Contractor shall be entitled to receive and the City shall pay Contractor compensation for all services performed by Contractor prior to receipt of such notice of termination, subject to the following conditions: a. As a condition of such payment, the Director may require Contractor to deliver to the City all work product completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and Contractor consents the City's use thereof for such purposes as the City deems appropriate. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 15. Exclusivity and Amendment This Agreement represents the complete and exclusive statement between the City and Contractor, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Contractor. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Contractor or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, 19-8160/217547 5 195 orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 16. Assignment Inasmuch as to this Agreement is intended to secure the specialized services of Contractor, Contractor may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other Contractors retained by City. 17. City Employees and Officials Contractor shall employ no City official nor any regular City employee in the work performed pursuant to this Agreement. No officer or employee of City shall have any financial interest in this Agreement in violation of the applicable provisions of the California Government Code. 18. Notices Any notices, certificates, or other communications hereunder shall be given either by personal delivery to Contractor's agent (as designated in Section 1 hereinabove) or to City as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses below, City and Contractor may designate different addresses to which subsequent notices, certificates or other communications will be sent by notifying the other party via personal delivery, a reputable overnight carrier or U.S. certified U.S. certified mail-return receipt requested: To City: City of Huntington Beach Attn: Lieutenant David Dereszynski 2000 Main Street Huntington Beach, CA 92648 19-8 l 60/217547 Contractor: Universal Protection Services, LP DBA Allied Universal Security Services Attn: Steve Clayton 1551 N. Tustin Ave., Suite 650 Santa Ana, CA 92869 6 196 19. 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 transactions or event. 20. Modification No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 21. 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. 22. 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 Agreement which is hereby affected shall be curtailed and limited only to the _extent necessary to bring it within the requirements of the law. 23. 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 has signed it. 19-8160/217547 7 197 24. Immigration Contractor shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 25. Legal Services Subcontracting Prohibited Contractor 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. Contractor 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 Contractor. 26. Confidentiality Contractor recognizes that in the performance of its duties under this Agreement, it must conduct its activities in a manner designed to protect information of a sensitive nature from improper use or disclosure. Contractor warrants that it will use reasonable efforts consistent with practices customary in the facilities management industry in recruiting, training and supervising employees and in otherwise performing its duties hereunder in order to achieve this result. In the furtherance of this, Contractor agrees, at the request of the City, to require its employees to execute written undertakings to comply with the foregoing confidentiality provision. 27. Discrimination Contractor shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Contractor affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 28. Jurisdiction -Venue This Agreement and all questions relating to its validity, interpretation, performance, and enforcement shall be government and construed in accordance with the laws of the State of California. This Agreement has been executed and delivered in the State of California and the validity, interpretation, pe1formance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 19-8160/217547 8 198 29. Professional Licenses Contractor shall, through the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Huntington Beach and all other governmental agencies. Contractor shall notify the City immediately and in writing of her inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 30. 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. 31. Survival Terms and conditions of this Agreement, which by their sense and context survive the expiration or termination of this Agreement, shall so survive. 32. Governing Law This Agreement. shall be governed and construed in accordance with the laws of the State of California, 33. Signatories 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. 34. Entirety (a) The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiation, 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. 19-8160/217547 9 199 (b) All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. 35. Effective Date IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers. This Agreement shall be effective on the date of its approval by the Mayor. This Agreement shall expire when terminated as provided herein. CONTRACTOR Universal Protection Services, LP DBA Allied Universal • Services Print name ITS: ( circle one) Chairm resident/ Vice President '------ AND By: ____________ _ Print name ITS: (circle one) Secretary/Chief Financial Officer/ Asst. Secretary-Treasurer l 9-8160/217547 10 CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California 200 EXHIBIT A 1. SCOPE OF PROJECT I. CONTRACTOR QUALIFICATIONS CONTRACTOR must meet all of the following requirements, which may be waived only at CITY's sole and absolute discretion: Personnel Information The names and resumes of the principal officers, partners, and or officials shall be submitted to the City for review. The names(s) and resume(s) of the individual(s) who will be considered in responsible charge of the City of Huntington Beach street sweeping enforcement contract shall be clearly indicated. Parking Enforcement Officer's (PEO), including the Parking Enforcement Supervisor, must be capable of communicating effectively in English in order to communicate with City staff and residents, if needed. CONTRACTOR's drivers shall maintain safety and driving records in accordance with Federal, State, County, and City regulations. The names and years of experience of each PEO and backup personnel with copies of State of California Department of Motor Vehicles records are also to be submitted. PEO's must have at least three years of driving experience. PEOs' DMV record shall not have 2 or more violation points in a 12-month period. A DUI and Hit & Run each constitute 2 violation points (Vehicle code section 12810). PEOs shall be equipped with cellular phones. Operators shall be required to answer or return any cell phone calls within five minutes. Operators must adhere to California Senate Bill 1613 requiring the use of a hands-free device when using a cell phone while driving. Subcontractors If applicable, the CONTRACTOR must include in their proposal complete identification of all subcontractors, including business address, telephone number, point of contact and work to be performed. For subcontractors performing the work called out in this agreement, the same information requested of CONTRACTOR must also be provided for the subcontractor. Equipment CONTRACTOR shall furnish five (5) primary street sweeping enforcement vehicles. Four (4) shall be for the Parking Enforcement Officers (PEO) and one (1) shall be for the supervising PEO. Each vehicle shall be no more than one-year-old at the time the contract begins and is good working order. It shall be branded in accordance with the agreed upon images, language, and markings. 1 201 EXIDBITA CONTRACTOR must have sufficient back-up vehicles to perform services when primary vehicles are unavailable due to repairs or maintenance. The equipment shall be sufficient to perform the work required herein during the hours specified. In the event a primary street sweeping enforcement v~hicle requires repair or replacement, a back-up vehicle must be available so that the established sweeping schedule does not fall behind. The successful CONTRACTOR shall be responsible for the repair, maintenance, and service of its street sweeping enforcement equipment. Existing Inventory CONTRACTOR must provide a detailed inventory of the CONTRACTOR's equipment and accessories that will be used to fulfill this contract. The inventory of the street sweeping enforcement vehicle equipment shall include the following: • Type, model/brand, year of manufacture, and the date the vehicle was acquired. • Service records for each vehicle with total number of miles and hours (miles only, if vehicle is not equipped with an hour :meter) each vehicle has been in service. • Anticipated remaining useful life as of the date of inventory. • Type and manufacturer of recording device for hour of operation, miles per hour, and Global Positioning System (GPS) tracking system. All initial vehicles used shall not exceed one (1) year in age. Age of vehicle shall be determined and verified by California Department of Motor Vehicle (DMV) registration. All vehicles shall be in "good" condition. A vehicle in good condition, on the whole, must not have any major flaws (no body damage). The interior and exterior must have very few, if any, apparent dings, scratches, or defects, and the paint is still intact. The body of the vehicle should be rust-free or have very little rust. The tires must all match with little wear. Vehicles shall be subject to inspection by the Fleet Supervisor or his designee. The Fleet Supervisor or his designee reserves the right to require any corrections deemed necessary to reflect acceptable service standards. Vehicles must have means to monitor locations, speeds, hours of operation for reporting purposes. **"Refer to Track, Gather, and Provide Real-Time Data in this section." Vehicles shall have the City logo on the front driver and passenger doors, the Allied Universal logo on the rear driverMside and passengerwside doors, and have must include the phrase "Under contract with The City of Huntington Beach" in six-inch (6) letters on both sides of the vehicles. Final approval of signs must be granted by the Traffic/Special Events Unit Commander or his designee prior to use. 2 202 EXHIBIT A Leased Equipment All leased equipment shall be listed separately with the same detailed existing inventory listing from the previous section; the time remaining on each vehicle's lease and options for renewal, where applicable, shall be stated. II. SCOPE OF WORK CONTRACTOR shall use and furnish, at the firm's own expense, all labor, equipment, and materials necessary for the satisfactory performance of the street services set forth herein. The work to be performed under these specifications consist of providing street sweeping enforcement services for the City of Huntington Beach in pre-designated areas of the CITY on CITY determined schedules and at CITY selected hours of each day of the week. Street Sweeping Enforcement Description General -The service provider will provide street sweeping enforcement services to approximately 1,121 miles of mostly residential roadways. There are four (4) daily street sweeping routes, which take place between 8:00 am and 4:00 pm. Some routes have different start times and the CONTRACTOR will be provided with a detailed schedule by the CITY. During periods when there is no scheduled street sweeping (i.e. holidays, fifth weeks of the month), the PEO's will not be needed. The CITY will only be billed for services rendered. If services are not needed, the CITY will make our best efforts to provide 24 hour notice to the CONTRACTOR. In situations where this is not possible, or the CONTRACTOR reports for duty to find a full day of services is not needed, the CITY intends to utilize the PEO's for a minimum of four hours of work. During these periods, the PEO's will be tasked with patrolling on-street and off-street parking areas to enforce fire lane violations, disabled parking violations, scofflaw violations, report signage and markings deficiencies, or perform other mutually agreed upon tasks/enforcement. Pre-designated areas consist of the following: • Various districts of residential local streets. • Various areas posted for one side sweeping per sweeping day within posted time frames. 3 203 EXHIBIT A • Various areas of residential local streets posted for days of the week and at posted time frames, • Arterial Highways, Majors, Primaries, and Secondaries. • Curb and Gutter sides, curb and gutter medians, curb and gutter one side, i.e. perimeters. • Painted medians. • City parking lots. • Commercial/ Industrial areas. Pre-Determined Schedules Residential local streets shall be swept once per week or twice per month as directed, on various days of either 1st, 2nd, 3rd, or 4th week of the month. Posted residential locals have time frames in addition to the daily schedules that must be adhered to. Arterial median, painted median lanes, and intersections shall be swept in conjunction with Route 4, or as directed by the City. III. GENERAL SPECIFICATIONS Holidays CONTRACTOR shall not provide street sweeping enforcement services on any of the following Holidays: New Year's Day, President's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, Friday after Thanksgiving, and Christmas Day. Street sweeping enforcement does still take place on Martin Luther King Day and Veteran's Day. Prior to commencement of contract work, agreement on days of make-up sweeping due to holidays shall be reached by comparing those recognized by the bargaining units of the City, CONfRACTOR's operators, and refuse disposal personnel. Those holidays that are the same in all three groups shall become the official list for this contract and shall be recorded as such by a letter to file. Sweeping Services Management Plan CONTRACTOR shall have a plan for ensuring all street sweeping routes are enforced. The Management Plan must include solutions that consider population growth, parked cars, refuse pickup services, etc. CONTRACTOR is encouraged to use the latest technological advances in their plan to achieve their management plan objectives. In order to give CONTRACTOR a more accurate idea of the scope of work, the approximate annual curb miles are as follows: 4 204 Residential Streets: Arterial Streets: Raised and Painted Medians: EXHIBIT A 30,060 CM 700CM 1,030 CM Delays in Street Sweeping Enforcement In the event of inclement weather, CONTRACTOR shall not be required to perform regular scheduled street sweeping enforcement. CONTRACTOR shall, immediately upon direction from the Public Works Street Department Lead Worker or authorized designee, sweep any streets that become littered with storm debris or become impassable due to collected water. During inclement weather which prevents adherence to the regular sweeping schedule for two (2) or less days in a given week, the sweeping areas so affected by the weather shall be swept within five (5) days of the scheduled sweeping without interruption of the regular sweeping schedule. The Maintenance Operations Manager or authorized designee reserves the right to determine what constitutes inclement weather. CONTRACTOR shall perform all extra work required by such inclement weather without additional charge and shall provide CITY with a schedule of when the makeup sweeping will be completed. Track, Gather, and Provide Real-Time Data The selected vendor must have the ability to track, gather, and provide real-time data with the use of a GPS tracking system, or acceptable alternate system, for each PEO vehicle while performing services for the CITY. Real time access to GPS shall be provided to CITY. CITY will request a report, on an as-needed basis, that includes, but not limited to the following: a. Speed b. Direction c. Location on map d. Address e. Distance traveled The recorded data intervals must not exceed one (1) minute between records (Ping Rate equal to or less than one (1) minute) and the searchable records must be kept for a minimum of six (6) months. Communication CONTRACTOR shall provide equipment for two-way voice or text message communication between the City of Huntington Beach and the individual sweepers. Contractor Response CONTRACTOR shall respond within 24 hours to requests or complaints from the CITY. Speed Limit of Street Sweeper Enforcement Vehicles 5 205 EXIIlBIT A Sweepers shall not operate above posted speed limits. Street Sweeping Enforcement Complaints CONTRACTOR shall investigate any resident complaints that may concern or involve the performance of the PEO and their operation. CONTRACTOR shall report to the Traffic/Special Events Unit Commander or authorized designee on the following working day as to the action or procedure taken with reference to any complaints. Storage of Equipment The CITY shall provide five parking spaces at the Public Works-City Corporation Yard at 17371 Gothard St. for the storage of the CONTRACTOR vehicles during periods of non-use. While these vehicles are in use, the CITY will allow the CONTACTOR's employees to park their personal vehicles in this space. The CITY will provide a location for the CONTRACTOR to retrieve, store, charge, the hand-held ticket writing devices. Courteous Operation CONTRACTOR shall perform street sweeping enforcement operations in a manner that causes a minimum inconvenience to the residents and businesses within the CITY. CONTRACTOR shall ensure that PEO's conduct their activities in a professional and courteous manner. Accident Reports CONTRACTOR shall provide a copy of a detailed written report of any and all accidents involving CONTRACTOR's vehicles, personnel and/or equipment while operating within the City to the designated City representative within twenty-four (24) hours from the date and time of the accident. Said report shall include the date and time of the accident and a copy of any law enforcement reports or reference identification resulting from the accident. CONTRACTOR shall provide the name and contact information of CONTRACTOR's safety officer, including cell phone for emergency contact. Record Keeping CONTRACTOR shall maintain a daily log detailing enforcement areas each day, scheduled areas missed, date and time missed areas, reasons scheduled enforcement was not performed or completed as scheduled, and total citations/warnings written in the City of Huntington Beach. The report shall also specify the number and nature of complaints received, when they were responded to, and how the complaints were resolved. CONTRACTOR shall submit to the City a monthly and an annual report that summarizes curb mileage for residential, arterial, and industrial areas enforced. CONTRACTOR shall meet all Federal, State, or Locai regulations pertaining to street sweeping enforcement equipment operation. 6 206 EXHIBIT A CONTRACTOR shall provide all necessary operational information and data that may be required to complete the reporting requirements of any legally established regulatory agency. Compensation & Invoicing Compensation for all services shall be based on the proposed and awarded fee schedule, per the specifications and details in this Agreement. Invoices submitted by CONTRACTOR shall be paid in accordance with the terms stated on the signed Agreement. The approved pricing shall remain in effect unless modified by mutual written consent of both parties. CITY requires the CONTRACTOR to provide monthly invoices for services. Upon the request of· the City, the CONTRACTOR shall submit the following information per vehicle: • GPS Data • Water usage and meter reads including the date the meter was read • Sweeper CNG usage • Routes completed • Curb miles swept • Complaint log Liquidated Damages Failure of the CONTRACTOR to complete the work in accordance with the specifications will result in damages being sustained by the CONTRACTOR. The following are cause for liquidated damages: a. Missing scheduled sweeping days without providing prior notice to, and acknowledgement by, the Operations Manager, or authorized designee (including inclement weather). b. Poor results. c. Any failure or refusal by CONTRACTOR to perform in accordance with the terms of this contract. Upon the first occurrence of any of the foregoing acts, CONTRACTOR will be notified in writing by the City. CONTRACTOR shall respond within five (5) days with a written plan stating how compliance with the requirements of the agreement must be met. If there is a second occurrence of the same act by CONTRACTOR within a thirty-day (30) period, the City shall have the right to withhold payment of $500.00, Each separate and subsequent occurrence of the same act shall result in a liquidated-damages charge in the amount of $500.00, Additional/ Added Posted Streets In the event of additional posted streets are added in the City of Huntington Beach, the Public Works Street Department Lead Worker or his designee shall place them on the appropriate Sweep Schedule. CITY will provide thirty (30) days, written advance notice of changes to the route or the frequency. 7 207 EXHIBIT A Measurements It is the responsibility of CONTRACTOR to make all measurements to determine his proposal price. The City of Huntington Beach will not be responsible for determining the quantities of materials necessary to complete the work specified. City of Huntington Beach Business License CONTRACTOR and any Subcontractors are required to obtain a City of Huntington Beach Business License prior to award of Contract, and to maintain the license for the entire term of the Agreement. Uniforms The CONTRACTOR will provide uniforms to the PEO's and PEO Supervisor. The uniforms shall consist of: A white military type shirt with shoulder epaulets, two pleated chest pockets with three-point flaps, permanent military creases, reinforced sewn-in badge tab, pleated pockets with pen slot, and three-point scalloped flaps. The shoulders shall be adorned with Allied Universal shouldn't patches, the employee shall wear a badge with identification number clearly visible, and a name plate over the right chest pocket to include the first name initial and last name. Black uniform pants or shorts are authorized to be worn with a duty belt. Employees can wear a black baseball cap with the Allied Universal marking on the front. Black crew or ankle height socks are authorized with black shoes. Term of Agreement The City, at its option and with CONTRACTOR concurrence, may renew this Agreement for two (2) additional one-year (1) periods on the same terms and conditions as provided herein, including a provision for a Consumer Price Index (CPI) adjustment in the cost of the Agreement. This option may be exercised only if the CONTRACTOR demonstrates superior performance in providing services during the prior three-year (3) Agreement term and in each successive one-year (1) term thereafter. If an increase in compensation for service in succeeding option periods is requested, the CONTRACTOR must provide detailed supporting documentation to justify the requested rate increase. The requested increase will be evaluated by the City, and the City reserves the right to negotiate, accept, or reject the CONTRACTOR's requested compensation increase. This Agreement's compensation terms may be adjusted by a mutually agreeable amount based on and no greater than the Consumer Price Index for All Urban Consumers (CPI-U) for Los Angeles•Riverside-Orange County, CA, changes over the previous contract period. Requests for price changes must be made by the CONTRACTOR in writing sixty (60) days before the end of the then-current agreement period and is subject to negotiation or rejection by the City. Compensation increases shall only be considered at the expiration of each two- year (2) contract extension period. 8 208 EXHIBITB Payment Schedule A. Rate All rates and charges per the attached Exhibit A. B. Billing 1. All billing shall be done monthly for services completed the prior month. 2. CONTRACTOR shall submit to CITY an invoice for each monthly payment due. Such invoice shall: A) Reference this Agreement; B) Describe the services performed; C) Show the total amount of the payment due. D) Include number of citations written, complaints received, miles driven, or other mutually agreed upon details. 3. Upon request of CITY, CONTRACTOR shall submit the following: A) GPS Data B) Routes completed C) Complaint log 4. Any billings for extra work or additional services authorized in advance and in writing by CITY shall be invoiced separately to CITY. Such invoice shall contain all of the information required above, and in addition shall list the hours expended and hourly rate charged for such time. Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or additional services requested, and if CITY is satisfied that the statement of hours worked and costs incurred is accurate. Such approval shall not be unreasonably withheld. Any dispute between the parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing performance of the remainder of this Agreement. C. Liquidated Damages Failure of CONTRACTOR to complete work in accordance with the terms and conditions of this contract will result in damages being sustained by CONTRACTOR. The following are cause for liquidated damages: 1. Missing scheduled sweeping days without providing prior notice to, and acknowledgement by, the Maintenance Operations Manager or authorized designee (including inclement weather). C. Liquidated Damages (continued) 4. Poor results. 5. Any failure or refusal by CONTRACTOR to perform in accordance with the terms of this contract. City Wide Street Sweeping: Exhibit B I of2 209 Upon the first occurrence of any of the foregoing acts, Contractor will be notified in writing by the City. Contractor shall respond within five (5) days with a written plan stating how compliance with the requirements of the agreement must be met. If there is a second occurrence of the same act by Contractor within a thirty-day (30) period, the City shall have the right to withhold payment of$500.00. Each separate and subsequent occurrence of the same act shall result in a liquidated damages charge in the amount of $500.00. City Wide Street Sweeping: Exhibit B 2 of2 210 ffi INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION REQUEST 1. 2 . 3. 4 . 5. 6. 7. 8. 1. Requested by: Lieutenant David Dereszynski <;)0 Date: October 31, 2019 Name of contractor/permittee: Allied Universal Security Services Description of work to be performed: Street Sweep ing Enforcement Value and length of contract: $1.119,000 -Three (3) Year Term Waiver/modification request: $1 .75 million SIR on Professional Liability Reason for request and why it should be granted: Unable to comply with requirements, see attached financials. Identify the risks to the City in approving this waiver/modification: N/A Date : APPROVALS Approvals must be obtained in the order listed on this form. Two approvals are required for a request to be granted . Approval from the City Administrator's Office is only required if Risk Management and the City Attorney 's ffice disagree. R!~anagement / ;J P Approved D Denied ~~..J. Date 2. City Attorney's Office p}Approved D Denied Date 3. City Manager's Office D Approved D Denie Signature Date If approved, the completed waiver/modification request is to be submitted to the City Attorney's Office along with the contract for approval. Once the contract has been approved, this form is to be filed with the Risk Management Division of Human Resources 10/31/2019 10 :15:00 AM 211 ACORD• CERTIFICATE OF LIABILITY INSURANCE I DATE (MM/DD/YYYY) ~ 1111412019 ~ THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder Is an ADDITIONAL INSURED, the pollcy(les) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder In lieu of such endorsement(s). PRODUCER CONTACT tJ6UE• MARSH USA INC rA~~N,_t "•"• I FAX 1717 Arch Slreet IA/C Nol : Philadelphia, PA 19103 E-MAIL annDt:<l<l • Attn : Philadelphia .certs@marsh .com I Fax : (212) 948-0360 INSURERIS) AFFORDING COVERAGE NAIC# CN118025105 -ALL-Prof-19-20 INSURER A : Lexinaton Insurance Comoanv 19437 INSURED INSURER B : Greenwich Insurance Comoanv 22322 Allied Universal Topco , LLC 24554 (See Altached for Additional Named Insureds) INSURER c : XL Insurance America 161 Washington Street, Suite 600 INSURER D : Indian Harbor Insurance Comoanv 36940 Conshohocken , PA 19428 37885 INSURER E : XL Specialty Insurance Comoanv INSURERF : COVERAGES CERTIFICATE NUMBER: CLE-006502213-07 REVISION NUMBER: 5 THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED . NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS , EXCLUSIONS AND CONDITIONS OF SUCH POLICIES . LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS . INSR TYPE OF INSURANCE IADDL SUBR POLICY EFF POLICY EXP LTR oucn wvn POLICY NUMBER IMM/DD/YYYYJ lMM/DD/YYYYl LIMITS A X COMMERCIAL GENERAL LIABILITY 082695264 11/01/2019 11/0112020 EACH OCCURRENCE s 10,000,000 -□ CLAIMS-MADE 0 OCCUR UAMA<.>t: TO 'lt:r< I t:U PREMISES lEa occurrence! $ 10,000 ,000 Professional Llabilijy is included -MED EXP (Any one person) $ X SIR $1,750,000 in the General Liability limit. PERSONAL & ADV INJURY $ 10,000,000 - GEN'l AGGREGATE LIMIT APPLIES PER : GENERAL AGGREGATE $ 10,000,000 ~ □PRO• □Loe PRODUCTS • COMP/OP AGG $ 10,000 ,000 POLICY JECT OTHER : $ B AUTOMOBILE LIABILITY RAD9437818-03 11/0112019 11/01/2020 f.,~~~~~l;,~llNGLE LIMIT $ 5,000,000 -X ANY AUTO BODILY INJURY (Per person) $ -OWNED -SCHEDULED X BODILY INJURY (Per accident) s -AUTOS ONLY -AUTOS APPROVED AS TO FORM X HIRED X NON -OWNED f0f!_<;'~~~J!_fi>AMAGE s -AUTOS ONLY -AUTOS ONLY ~-----L !=~£' s u UMBRELLA LIAB MOCCUR tJ --11/01/2019 11/0112020 EACH OCCURRENCE $ 10,000,000 -~g~~GATI:S X EXCESS LIAB CLAIMS-MADE EXC ITY AGGREGATE $ 10,000 ,000 OED I I RETENTION $ CITY OF HUNTINGTON BEACH $ C WORKERS COMPENSATION RWD3001203 -03(AOS) 11/01/201\1 11/01/zuzu X I ~¥fTuTE I I OTH-ER E AND EMPLOYERS' LIABILITY Y/N RWR3001204-03(WI) 11/0112019 11/01/2020 ANYPROPRIETOR/PARTNER/EXECUTIVE 0 E.L. EACH ACCIDENT $ 1,000,000 OFFICER/MEMBEREXCLUDED? N/A (Mandatory In NH) E.L. DISEASE· EA EMPLOYEE $ 1,000,000 glsMrmt~ ~~PERATIONS below E.L. DISEASE · POLICY LIM IT $ 1,000,000 A PROFESSIONAL LIABILITY 082695264 11/01/2019 11/0112020 LIMIT 2,000,000 COMBINED WITH GL LIMIT DESCRIPTION OF OPERATIONS/ LOCATIONS/ VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached If more space Is required) The City of Huntington Beach, its officers, elected or appointed officials, employees, agents, and volunteers are Included as addilional insured where required by wrillen contract with respect to General LlablHty and Aulo Liability. Liabi li ty coverage shell be primary and non-<:ontributory where required by written contract. Waiver of subrogation Is applicable where required by written contract. . CERTIFICATE HOLDER CANCELLATION The City of Huntington Beach SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE Attn: David Dereszynskl THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN 2000 Main Street ACCORDANCE WITH THE POLICY PROVISIONS. Huntington Beach, CA 92648 AUTHORIZED REPRESENTATIVE of Marsh USA Inc. I Manashi Mukherjee ...M.o.'VUIIOIM ~ © 1988-2016 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD 212 ACORD9 CERTIFICATE OF LIABILITY INSURANCE I DATE (MM/DD/YYYY) ~ 10/31/2019 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder Is an ADDITIONAL INSURED, the policy(lea) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policles may requ ire an endorsement. A statement on this certificate does not confer rights to the cert ificate holder In lieu of such endorsemant(s) . PRODUCER .. u .. , .... MARSH USA INC NAME : PHONE I f.O~ .,ft,. 1717 Arch Slreel IAlr Nn. c ... ,. Phil adelphia, PA 19103 ~-MAIL Alln : Ph ~adelphle .cer1s@marsh .com I Fax : (2 12) 948-0360 .nnocas: INSURER(Sl AFFORDING COVERAGE NAIC# CN118025105-XXX-GAWlJ.18-19 INSURER A : Lexinalon Insurance Comoanv 19437 INSURED INSURER B : Greenwich Insu rance COmoanv 22322 Allied Universal T opco , LLC 24 554 (See Allached ror Additional Named Insureds) INSURER C : XL Insurance America 161 Washlnglon Slreel, Suile 600 INSURER D : Llovd's Svndicates -See Acord 101 Conshohocken, PA 19428 37885 INSURER E : XL Soecialtv Insurance Comoanv INSURER F: COVERAGES CERTIFICATE NUMBER: CLE-006502213-01 REVISION NUMBER: 1 THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED . NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS . INSR TYPE OF INSURANCE ADDL SuBR POLICY EFF POLICY EXP LIMITS LTR '"qn wun POLICY NUMBER IMM/DD/YYYYl IMM/DD/YYYYI A X COMMERCIAL GENERAL LIABILITY 082695264 11/01/2018 11m12010 EACH OCCURRENCE s 10,000,000 -=:J CLAIMS-MADE 0 OCCUR ~~C~U9E~~r~encel $ 10,000,000 X CONTRACTUAL LIABILITY MED EXP (Any one peroon) $ r-- 10,000,000 ~ SIR$1,750,000 PERSONAL & ADV INJURY $ GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 10,000,000 ~ □PRO• □LDC PRODUCTS • COMP/OP AGG $ 10,000,000 POLICY JECT OTHER: $ B AUTOMOBII.E LIABILITY RAD9437818-02 11/01 /2018 • 11/01/2019 ~~~:!.~llNGLE LIMIT $ 2,000,000 >-- X ANY AUTO BODILY INJURY (Per person) $ x OWNED -SCHEDULED BOOIL y INJURY (Per accldenl) $ AUTOS ONLY AUTOS X HIRED X NON-OWNED iP~?~c~]~RAMAGE s -AUTOS ONLY -AUTOS ONLY s u X UMBRELLA l.lAB MOCCUR BOWCN1800836 11/01/2018 11/01/2019 EACH OCCURRENCE $ 10,000,000 - EXCESS LIAB CLAIMS-MADE AGGREGAT E $ 10 ,000 ,000 OED I I RETENTION s s C WORKERS COMPENSATION RWOJU01203-02 (AOS) 11/UlllUlO 111/01/201~ X I :t:TUTE I I OTH - ER E AND EMPLOYERS' LIABILITY Y/N RWR3001204 -02 (AK &WI) 11/01/2018 11/01/2019 1,000 ,000 ANYPROPRIETOR/PARTNER/EXECUTIVE 0 E.L. EACH ACCIDENT s OFFICER/MEMBER EXCLUDED? N/A 1,000,000 (Mandatory In NH) E.L. DISEASE· EA EMPI.OYEE $ gi;~~rtfi1J~ 'c:'l~PERATIONS be low E.L. DISEASE -POLICY LIMIT $ 1,000,000 ·--"~ J ~ORM DESCRIPTION OF OPERATIONS/ LOCATIONS/ VEHICLES (ACORD 101 , Additional Remark• Schodulo, may bo allachod II more opaco lo required) "' -~ The Cily o( Huntinglon Beach , ils officers, elecled or appoinled officials , employees, agenls, and volunleers are included as add itional insureds (excepl for workers' compensa re ulred by wrillen contract Llabll ily coverage shan be pri mary and non-conlrlbulory where required by written contract Waiver of subrogation Is applicable where requ ired by wrillen coif!· ,=$ -• •-~AEL, Fl cITYA oN&£ACt1 ctTYOft1U • CERTIFICATE HOLDER CANCELLATION The Ci ly ol Huntinglon Beach SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE Alln: David Dereszynskl THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN 2000 Main Stree t ACCORDANCE WITH THE POLICY PROVISIONS. Huntinglon Beach, CA 92648 AUTHORIZED REPRESENTATIVE of Maroh USA Inc. I Manashi Mukherjee ...M..a,-vuooi..,;. ~~ <Cl 1988-2016 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD 213 ' \ AGENCY CUSTOMER ID: CN118025105 LOC #: "'"'p=-h:-:-:-ila-d..,.e"'"'l,...p-:-h-:-la ________________ _ ADDITIONAL REMARKS SCHEDULE AGENCY NAMED INSURl:O MARSH USA INC Arned Universal Topco, LLC (See Attached for AddiHonal Named Insureds) PO~ICY NUMBER 161 Washington Slreel, Suile 600 Conshohocken, PA 19428 CARRIER I NAICCOOE EFFECTIVE DATE: ADDITIONAL REMARKS THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: 25 FORM TITLE: Certificate of Liability Insurance Universal Protection Service, LLC, doa Allied Universal Risk Advisory and Consulting S$1'/ices Universal Protection Sarvice, LLC, dba Allied Universal Security Services Universal Protection Service, LLC, dba Allied Universal Security Services, LLC Unlversal Protection Service, LP Universal Protection Service, LP, dba Allied Universal Risk Advirory and Consulting Services Universal Protection SelYice, LP, dba Allied Universal Secuilty Services Universal Protection SeNice, LP, dba Allied Universal Security Services, LP Universal Services of America, LP Universal Thrive Technologies, LLC Universal Thrive Technologies, LLC, dba Allied Universal Technology Services Universal Thrive Technologies, LLC, dba Allied Universal Monaoring and Response Center Universal Thrive Technologies, LLC, dba Thrive Intelligence U.S. Security Associates Holding Corp. U.S. Security Associates Ho!dl11gs II Corp. U.S. Security Associates Holdl11gs, Inc. U.S. Security Associates Staffing, Inc. U.S. Security Associates, Inc. U.S. Security Holdings, Inc. Vance Executive Protection, Inc. Vance International Consulting, Inc. Umbrela Liabiity Carriers Lloyds -Apollo Consortium -MIN# AA-1122000 (85%) Lloyds-Hamilton Re, Ltd. -AIIN # AA3191190 (15%) Page 3 of 3 ACORD 101 (2008/01) © 2008 ACORD CORPORATION. All rights reserved, The ACORD name and logo are registered marks of ACORD 214 POLICY NUMBER: RAD943781802 COMMERCIAL AUTO CA04441013 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US (WAIVER OF SUBROGATION) This endorsement modifies insurance provided under the following: AUTO DEALERS COVERAGE FORM BUSINESS AUTO COVERAGE FORM MOTOR CARRIER COVERAGE FORM With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by the endorsement. This endorsement changes the policy effective on the inception date of the policy unless another date is indicated below. Named Insured: ALLIED UNIVERSAL TOPCO, LLC Endorsement Effective Date: November 1, 2018 SCHEDULE Name(s) Of Person(s) Or Organization(s): Any person or organization where waiver of our right to recover is required by written contract with such person or organization provided such contract was executed prior to the date of loss. Information required to complete this Schedule, if not shown above, Will be shown in the Declarations. The Transfer Of Rights Of Recovery Against Others To Us condition does not apply to the person(s) or organization(s) shown in the Schedule, but only to the extent that subrogation is waived prior to the "accident" or the '1oss" under a contract with that person or organization. CA04441013 © Insurance Services Office, Inc., 2011 Page 1 of 1 215 ' f ENDORSEMENT #24 This endorsement, effective 12:01 AM 11-1-18 Forms part of policy number: 082695264 Issued to: AlUEO UNIVERSAL TOPCO, LLC By: LEXINGTON INSURANCE COMPANY WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US This endorsement modifies Insurance provided under the following: SECURITY GUARD GENERAL ANO PROFESSIONAL LIABILITY COVERAGE PART SCHEDULE Name of person or Organization: Where required by written contract. (If no entry appears above, information required lo complete this endorsement will be shown in the Declaratlons as applicable to this endorsement} The TRANSFER OF RECOVERY AGAINST OTHERS TO US Condition {Section IV -CONDITIONS) is amended by the addition of the following: We waive any right of recovery we may have againsl the person or organization shown in the Schedule above because or payments we make for Injury or damage arising out of your ongoing operations or "your work" done under a contract with that person or organization and included in the "products-completed operations hazard." This waived applres only to the person or organization shown ln the Schedule above. All other terms and conditions remain as written. LEXDOC021 LX0404 216 Ocean Vie"W' School District "Equity and Excellence· 17200 Pinehurst Lane, Huntington Beach, CA 92647 Tel: 714 847-2551 Fax: 714 847-1430 Web: www.ovsd.org Superintendent Carol Hansen, Ed. D. SENT VIA ELECTRONIC TRANSMISSION November 18, 2019 Mayor Erik Peterson and Members of the City Council c/o City Clerk, Robin Estanislau CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Board Of Trustees John Briscoe, President Gina Clayton-Tarvin, Vice President Jack Souders, Clerk Patricia Singer, Member Norm Westwell, Member Re: City Council Consent Calendar for 11-18-2019, Item 14 Approve Contract for Street Sweeping Enforcement Dear Mayor Erik Peterson and Members of the City Council : The Ocean View School District supports that the City Council enter into a three-year contract to enforce street sweeping in Huntington Beach . It is our experience, especially at the Oak View schools located adjacent to industrial zoned uses, that non- enforcement of street sweeping negatively impacts our school children and staff who use school playgrounds for mandatory outdoor activities on a daily basis . It is our hope that enforcement of street sweeping will reduce dust and debris buildup on city streets. We request that the city council clarify what code enforcement procedures will apply to the contractor and how should the community request enforcement of street sweeping . Sincerely, OCEAN VIEW SCHOOL DISTRICT Carol Hansen, Ed .D. Superintendent SUPPLEME NTAL COMMUNICATION Meeting Date : !J/1~ //CJ Agenda Item No.: / '/ { ,q_ ?J/JJ z,) 217 City of Huntington Beach 2000 Main Street ~ Huntington Beach, CA 92648 (714) 536-5227 ♦ www.huntingtonbeachca.gov December 3, 2019 Universal Protection Services, LP OBA Allied Universal Security Services Attn: Steve Clayton 1551 N. Tustin Ave., Suite 650 Santa Ana, CA 92869 Dear Mr. Clayton: Office of the City Clerk Robin Estanislau, City Clerk Enclosed is an executed original of the "Service Agreement between the COHB and Universal Protection Services, LP OBA Allied Universal Security Services (UASS) for Street Sweeping Enforcement Services" approved by the Huntington Beach City Council on November 18, 2019. Sincerely, Robin Estanislau, CMC City Clerk RE:ds Enclosure Sister Cities: Anja, Japan ♦ Waitakere, New Zealand 218 1w INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION REQUEST 1. Requested: Risk Management 2. Date: February 1, 2024 3. Name of contractor/permittee: Allied Universal Topco, Llc 4. Description of work to be performed: Street Sweeping Enforcement 5. Value and length of contract: $1,119,000 -(1) Year Term 6 . Waiver/modification request: $1 .75 Million SIR on General Liability 7. Reason for request and why it should be granted : We do not allow SIR. Please see attached financial statement. 8. ing this waiver/modification:Low 1. Department Head Signature Date : APPROVALS Approvals must be obtained in the order listed on this form. Two approvals are required for a request to be granted. Approval from the City Administrator's Office is only required if Risk Management and the City Attorney's Off disagree. Ris'5,,Management fi d or- []i'A pproved D Denied ~ Date 2. City Attorney's Office rp1 Approved Date 3. City Manager's Office D Approved D Denie Signature Date If approved, the complete d waiver/modification request is to be submitted to the City Attorney 's Office along with the contract for approva l. Once the contract has been a pproved, thi s form is to be fil ed with the Ri sk Manage ment Division of Human Resources RISK Mgt,FEB 7"2c'.1AM10:2:3 Wa iver Form -Vianate 2/1/2 024 4 :19:00 PM 219 ACORD® CERTIFICATE OF LIABILITY INSURANCE I DATE (MM/DONYYY) ~ 01/23/2024 ...---, THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy{les) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT Marsh I U.S. Operations MARSH USA LLG NAME: 1717 Arch Street PHONE 866-9664664 I /,6~ Nol: IAIC No E··"• Philadelphia, PA 19103 E-MAIL Philadelphia.Certs@marsh.com Attn: Philadelphia.certs@marsh.com / Fax: (212) 948-0360 ADDRESS: INSURER/SI AFFORDING COVERAGE NAIC# GN118025105-ALL-ST AND-24-25 INSURER A: Indian Harbor Insurance Comoanv 36940 INSURED INSURER e : Greenwich Insurance Comoanv 22322 Allied Universal Topco, LLC (See Attached for Additional Named Insureds) INSURER C : XL Insurance America 24554 161 Washington Street, Suite 6-00 INSURER o : lndemnitv Insurance Comnanv of North America 43575 Conshohocken, PA 19428 INSURER E : XL Snecialtv Insurance Comnanv 37885 INSURERF: COVERAGES CERTIFICATE NUMBER· GLE-000502213•24 REVISION NUMBER· 11 THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR AOOL SUBR POLICY EFF POLICY EXP LTR TYPE OF INSURANCE '""" ' ...... POLICY NUMBER IIMM/0D~ I IMMIDONYYY\ LIMITS A X COMMERCIAL GENERAL LIABILITY RES943799404 01/0112024 01/01/2025 EACH OCCURRENCE s 30,000,000 -- ~·-1 CLAIMS-MADE 0 OCCUR DAMAGE TO RENTED PREMISES /Ea occurrence\ s 30,000,000 X CONTRACTUAL LIABILITY -MED EXP (Any ona l}erSon) s X SIR $1,750,000 PERSONAL & ADV INJURY s 30,000,000 - ~ GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE s 55,000,000 POLICY□ ~r8i 0 LOG PRODUCTS+ COMP/OP AGG s 55,000,000 OTHER: s B AUTOMOBILE LIABILITY RA0943781807 01/01/2024 - 01/01/2025 n:~tl!~d~~ti>INGLE LIMIT s 5,000,000 X ANY AUTO BOO!L Y INJURY (Per person) s -OWNED ~ SCHEDULED AUTOS ONLY AUTOS BODILY INJURY (Per accident) s -HIRED f--NON-OWNED fp~?:~d~RMtAGE AUTOS ONLY AUTOS ONLY s -~ s u UMBRELLA UAB !~OCCUR XSM G72500027 004 01/01/2024 01/01/2025 EACH OCCURRENCE s 10,000,000 - Excess of General liability, X EXCESS LIAB CLA!MS•MADE AGGREGATE s 10,000,000 OED I I RETENTION s Auto Liability, and Workers' Comp s G WORKERS COMPENSATION RWD300120308 (AOS) ' ............ 01/01/2025 X 1 ~ffruTE I I OTH- AND EMPLOYERS' LIABILITY ER G YIN RWR300120408 (WI) 01/0112024 01/0112025 1,000,000 ANYPROPRIETOR/PARTNER/EXECUT!VE 0 E.l. EACH ACCIDENT s E OFFICER/MEMBER EXCLUDED? N/A 01/01/2024 01/01/2025 (Mandatory ln NH) RWE943548208 (GA, OH) E.l. DISEASE -EA EMPLOYEE s 1,000,000 If yes, describe under DESCRIPTION OF OPERATIONS below E.l. DISEASE -POLICY LIMIT s 1,000,000 A Professional Liability RES943799404 01/01/2024 01/01/2025 Claim 2,000,000 SIR: $1,750,000 Aggregate 2,000,000 DESCRIPTION OF OPERATIONS/ LOCATIONS/ VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached Jf more space Is required) The City or Huntington Beach, its officers, elected or appointed officials, employees, agents, and volunteers are included as addiUona! Insured (except workers' compensation and crime) where required by wri11en contract. Liability coverage shall be primary and non-contributory where required by written contract, Waiver of subrogation is applicable where required by written contract. CERTIFICATE HOLDER CANCELLATION The City of Huntington Beach SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE Attn: David Dereszynski THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN 2000 Main Street ACCORDANCE WITH THE POLICY PROVISIONS. Huntington Beach, CA 92648 AUTHORIZED REPRESENTATIVE I ~ =s.-..e.ee ©1988-2016 ACORD CORPORATION. All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD 220 AGENCY CUSTOMER ID: _C~N~11~8~0~2~5_10~5~------------ LOC #: Philadelphia ~ ACORD® ~ ADDITIONAL REMARKS SCHEDULE AGENCY NAMED INSURED MARSH USA LLC Allied Universal Topco, LLC (See Attached for Additional Named Insureds) POLICY NUMBER 161 Washington Street, Suite 600 Conshohocken, PA 19428 CARRIER I NAICCODE EFFECTIVE DATE: ADDITIONAL REMARKS THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER: 25 FORM TITLE: Certificate of Liability Insurance Excess Workers' Compensation Policy No.: RWE943548208 Insurer. XL Specialty Insurance Company Effective Dates: 1/112024-1/112025 Limit: Employers liability Each Accident: $1,000,000 Employers Liability Disease-Policy limit: $1,000,000 Employers Liability Disease-Each Employee: $1,000,000 SIR: $1,000,000 Crime Policy No. 03-824--02-02 Insurer. National Union Fire Insurance Co. Effective Dates: 08/1512023 -0811512024 Limit: Employee Thell or Dishonesty: $2,000,000 Clien!s' Property: $2,000,000 Deductible: $750,000 Contractors Pollution Liability Policy No.: CPO13303734 Insurer: Commerce and Industry Insurance Company Effe<:tiva Dates: 01/0112024-01!0112026 Limit: 5,000,000 Deductible: $250,000 The General Liability and Professional Liability policies evidenced above share in the limits shovm. The limits do not apply separately to the individual coverages Page 2 of 2 ACORD 101 (2008/01) © 2008 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD 221 w7r Procedure To request a waiver, indicate herey3 and provide a brief description ( 1 -2 sentences) of the proposed work/project, its dollar value (if not a specific dollar amount, use an average, annual estimate or non-profit) and projected timeframe (per job or as-needed basis). For substantial dollar deductible/SIR amounts, a financial statement is required (Balance Sheet, Budget Reports, Dun & Bradstreet Report, etc.). Waiver Requested: ___ ..cS~\~R.~--'--1,., __ \~\-4_1..cl ______________ _ Encroachment PermitO Private Property Work PennitO Other: Proposed--· · • -fl:\~'t\i;)I<' ------- ~2fi!2.~ ~ I ~I =-~• Consultant Services□ µc.r-,,. ClIC s-c,,.,1, 4<;; ,-0 P1'-1Tl"-I--f<b);,O..{'. Dollar Value: Projected Timeframe: _ _,__f-4~0~gc'/J=R+---~---_,ft-~---~JD'-';/',"-+/-------~fr~-_,./<'--M~·-,__-_fO~_"l__,__,_P..,M~---- 222 ENDORSEMENT #181 This endorsement, effective on 01/01/2024 at 12:01 A.M. standard time, forms a part of Policy No. RES943799404 of the INDIAN HARBOR INSURANCE COMPANY Issued to ALLIED UNIVERSAL TOPCO , LLC THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED -DESIGNATED PERSON OR ORGANIZATION (Based on CG2026 04/13) This endorsement modifies insurance provided by the following : COMMERCIAL GENERAL LIABILITY COVERAGE FORM SCHEDULE Name of Add itional Insured Person(s) or Organlzatlon(s) City of Huntington Beach, its officers, elected or appointed officials, employees agents and vo lunteers 200 Main Street Huntington Beach, CA 92648 Information required to complete this Schedule, if not shown above, will be shown in the Declarations. A. Section II -Who Is an Insured is amended to include as an additional insured the person(s) or organization(s) shown in the Schedule, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whol e or in part, by your acts or omissions or the acts or omissions of those acting on your behalf: 1. In the performance of your ongoing operations; or 2. In connection with your premises owned by or rented to you. However: 1. The insurance afforded to such additional insured only applies to the extent permitted by law; and 2. If coverage provided to the additional insured is required by a contract or agreement, the in surance afforded to such additional insured will not be broader than that which you are required by the contract or agreement to provide for such additional insured. B. With respect to the insurance afforded to these additional insureds, the following is added to Section Ill -Limits of Insurance: If coverage provided to the addi tional insured is required by a contract or agreement, the most we will pay on behalf of the additional insured is the amount of insurance: MANUS @ 2024 X. l. A merica Inc. All Rights Reserved May not be copied without permlss!on Include s co pyrizhtcd mat e rial of Insurance S"vice s Offtc e, Inc. with its pcrmlssion 223 1. Required by the contract or agreement; or 2. Available under the applicable Limits of Insurance shown in the Declarations; whichever is less. This endorsement shall not increase the applicable Limits of Insurance shown in the Declarations. All other terms and conditions of the policy remain the same. MANUS @ 2024 X. L America Inc, All Rlghts Reserved May not be copied without permission Includes copyrighted material of ln1urance Servkes Office, Inc with Its permission 224 ENDORSEMENT t#OSO This endorsement, effective on 01/01/2024 at 12:01 A.M. standard lime, forms a part of Policy No. RES943799404 of the INDIAN HARBOR INSURANCE COMPANY Issued to ALLIED UNIVERSAL TOPCO, LLC THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED· DESIGNATED PERSON OR ORGANIZATION This endorsement modifies in sura nce provided by the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM A. SECTION II -Who Is an Insured i s amended to include as an additional insured a person(s) or organization(s) who is requi re d to be added by written contract or written agreement which does not require that a specific form number be us ed. B. The insurance provided to add itional insureds applies only to "bodily injury", "property damage", "professional liability" or "personal and advertising injury" caused, in whole or in part, by: 1. Your acts or omissions; or 2. The acts or omissions of those acting on your behalf In the performance of your ongoing operations for the additional insured; or "your work" performed for that additional insured and included in the "products-completed operations hazard" However: 1. The insurance afforded to such additional insured only applies to the exten t permitted by l aw; and 2. If coverage provided to the additional insured is required by a contract or agreement, th e insurance afforded to such additional in sured will not be broader than that which you are required by the contract or agreement t o provide for such additional insured. C. With respect to the in sura nce afforded to these additional insureds, the following i s added to Section Ill -Limits of In surance: If coverage provided to the add itional insured is r equ ired by a contract or agreement, the most we will pay on behalf of the additional insured is the amount of insurance : 1. Requ ired by the contract or agreement; or 2. Available under the appli cable lim i t s of Insurance shown in the Declarations; whichever i s less. This endorsement shall not increa se the applicable limits of Insurance shown in the Declarations. MANUS @ 2024 X. L. America In c. All Rights Reserved May not b e copied without permission Includes copyrighted material of Insurance Services Office, Inc. with I ts permission 225 D. The additional insured must see to it that: 1. We are notified as soon as practicable of an "occurrence" or offense that may result in a claim. 2. We receive written notice of a claim or "suit" as soon as practicable; and 3. A request for defense and indemnity of the claim or "suit" will promptly be brought against any policy issued by another insurer under which the additional insured also has rights an insured or additional insured. E. Thi s in surance i s p r i ma ry t o and wi ll not seek co nt rib utio n fro m any other ins ura nce ava il able to an additional insured under your policy provided that: 1. The additional insured is a Named Insured under such other insurance; and 2. You have agreed in writing in a contract or agreement that this insurance would be primary and would not seek contribution from any other insurance available to the additional insured. All other terms and conditions remain as written. MANUS @ 2024 X. L. America Inc. All Rights Reserved May not be copied without permission Includes copyrighted material of Insurance Services Office, Inc. with its permission 226 ENDORSEMENT #024 This endorsement, effective on 01/01/2024 at 12:01 A.M. standard time, forms a part of Policy No. RES943799404 of the INDIAN HARBOR INSURANCE COMPANY Issued to ALLIED UNIVERSAL TOPCO, LLC THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE FORM SCHEDULE Name of person or Organization: Where required by written contract. (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement) The TRANSFER OF RECOVERY AGAINST OTHERS TO US Condition (Section IV -CONDITIONS) is amended by the addition of the following: We waive any right of recovery we may have against the person or organization shown in the Schedule above because of payments we make for injury or damage arising out of your ongoing operations or "your work" done under a contract with that person or organization and included in the "products-completed operations hazard." This waived applies only to the person or organization shown in the Schedule above. All other terms and conditions remain as written. MANUS @2024 X. L. America Inc. All Rights Reserved May not be copied without permisslOn Includes copyrighted material of Insurance Services Offke, Inc, with its permission 227 WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT WC 00 03 13 (Ed. 4-84) We have the right to recover our payments from anyone liable for an injury covered by this policy. We will not enforce our right against the person or organization named in the Schedule. (This agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us.) This agreement shall not operate directly or indirectly to benefit anyone not named in the Schedule. Schedule Any person or organization where waiver of our right to recover is required by written contract with such person or organization provided such contract was executed prior to the date of loss. This endorsement changes the policy to which it is attached and is effective on the date Issued unless otherwise stated. (The Information below is required only when this endorsement Is Issued subsequent to preparation of the policy.) Endorsement Effective 01-01-2024 Insured Allied Universal Topco, LLC Insurance Company XL Insurance America, Inc. WC 00 0313 (Ed. 4-84) @ 1983 National Council on Compensation Insurance. Policy No. RWD3001203-08 Endorsement No. Countersigned by _________________ _ 228 POLICY NUMBER: RAD943781807 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED This endorsement modifies insurance prm,ided under the following: BUSINESS AUTO COVERAGE FORM MOTOR CARRIER COVERAGE FORM AUTO DEALERS COVERAGE FORM XIC4141013 With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by the endorsement. Schedule Additional lnsured(s) Work Any person or organization you have agreed to All Operations Include as an additional Insured under written contract, provided such contract was executed prior to the date of loss. COVERED AUTOS LIABILITY COVERAGE, Who Is An Insured, is amended to include as an "insured" the person or organization listed In the Schedule abm.e, but only with respect to liablllty for "bodily Injury" or "property damage" otherwise covered under this policy caused, in whole or in part, by the negligent acts or omissions of: 1. You, while using a covered "auto"; or 2. Any other person, except the additional insured or any employee or agent of the additional insured, operating a covered "auto" with your permission; in the performance of your work as described in the Schedule above. In no event shall any person or organization listed in the Schedule become an "insured" pursuant to this Endorsement if such person or organization is solely negligent. IT IS FURlHER AGREED THAT IN NO EVENT SHALL ANY CONTRACT OR AGREEMENT ALTER THE CONDITIONS, COVERAGES OR EXCLUSIONS SET FORTH IN THIS POLICY. All other terms and conditions of this policy remain unchanged. XIC4141013 VHAR 12/02/2019 © 2013 XL. America, Inc. All Rights Reserved. May not be copied without permission. Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 1 of 1 229 POLICY NUMBER: RAD943781807 COMMERCIAL AUTO CA 04441013 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. WAIVER OF TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US (WAIVER OF SUBROGATION) This endorsement modifies insurance provided under the following: AUTO DEALERS COVERAGE FORM BUSINESS AUTO COVERAGE FORM MOTOR CARRIER COVERAGE FORM With respect to co-..,rage provided by this endorsement, the provisions of the Co\erage Form apply unless modified by the endorsement. This endorsement changes the policy effecti\e on the inception date of the policy unless another date is indicated below. Named Insured: ALLIED UNIVERSAL TOPCO, LLC Endorsement Effective Date: January 1, 2024 SCHEDULE Name(s) Of Person(s) Or Organlzation(s): Any person or organization where waiver of our right to recover is required by written contract with such person or organization provided such contract was executed prior to the date of loss. Information reouired to comnlete this Schedule, if not shown abo-..,, will be shown in the Declarations. The Transfer Of Rights Of Recovery Against Others To Us condition does not apply to the person(s) or organization(s) shown In the Schedule, but only to the extent that subrogation is wal\ed prior to the "accident" or the "loss" under a contract with that person or organization. CA04441013 © Insurance Services Office, Inc., 2011 Page 1 2/20/2024 18 (24-103)230 TO: FROM: DATE: SUBJECT: CITY OF HUNTINGTON BEACH POLICE DEPARTMENT COMMUNICATION City Council Bo Svendsbo, Police Captain » February 15, 2024 City Council Agenda 2/20/24 The Police Department requests item #18 (RCA 24-103) be withdrawn from the agenda. This item requires additional work before submitting for approval. We anticipate putting it back on the agenda for the March 5, 2024, council meeting. City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-111 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Eric G. Parra, Interim City Manager VIA:Chau Vu, Director of Public Works PREPARED BY:John Nguyen, Senior Traffic Engineer Subject: Approve and authorize execution of a Cooperative Agreement with Orange County Transportation Authority (OCTA) for Alternative Signal Communication Demonstration Project Statement of Issue: The Orange County Transportation Authority (OCTA) has submitted a cooperative agreement to the City of Huntington Beach to be part of a pilot and demonstration program for identifying, implementing, and evaluating traffic signal timing solutions that are quick to build and low-cost for connecting traffic signal communications back to the traffic management center. This agreement clarifies the roles and responsibilities of OCTA, the County, and participating cities with respect to execution and delivery of the project.The effort is funded by the OCTA Comprehensive Transportation Funding Program with no funding obligation for the City to participate other than in- house resources (staff time) as needed. Financial Impact: The Orange County Transportation Authority will be responsible for all project costs. There is no financial impact to the City. Recommended Action: Approve and authorize the Mayor and City Clerk to execute “Cooperative Agreement No. C-3-3058 Between Orange County Transportation Authority and Cities of Huntington Beach, La Habra, Lake Forest, Newport Beach, Rancho Santa Margarita, Seal Beach, and Yorba Linda for Alternative Signal Communication Demonstration Project”. Alternative Action(s): Deny approval of the project, and forgo participation in the project. Analysis: City of Huntington Beach Printed on 3/13/2024Page 1 of 3 powered by Legistar™231 File #:24-111 MEETING DATE:3/19/2024 Orange County Transportation Authority (OCTA) has been implementing and improving traffic signal coordination and communication across multiple jurisdictions under the Measure M2 Regional Traffic Signal Synchronization Program (Project P). Traffic signal communication infrastructure is a major component in synchronization, operations, and Intelligent Transportation Systems (ITS) capabilities. OCTA is collaborating with the cities of Huntington Beach, La Habra, Lake Forest, Newport Beach, Rancho Santa Margarita, Yorba Linda, and Seal Beach to pilot an Alternative Signal Communication Demonstration Project that will identify traffic signals that are at a disadvantage without underground conduit for fiber optics or copper interconnect and will develop a quick to build low cost traffic signal communication network that will connect back to the city’s traffic management center. The project will evaluate and implement multiple signal communication solutions at twenty-two (22) traffic signals as part of this project, of which eight (8) are within the City of Huntington Beach: 1. Heil Avenue and Bolsa Chica Street 2. Heil Avenue and Del Mar Lane 3. Heil Avenue and Graham Street 4. Heil Avenue and Springdale Street 5. Heil Avenue and Trudy Lane 6. Heil Avenue and Edward Street 7. Heil Avenue and Goldenwest Street 8. Heil Avenue and Gothard Street The eight locations currently do not have communication with the City’s Traffic Management Center, which make them ideal candidates for this project. The project will provide new communication equipment solutions that would allow the City to review and modify traffic signal operation as required. The cooperative agreement describes the duties and responsibilities between OCTA and the City on the project. By entering into the cooperative agreement, the City would be agreeing to support OCTA’s efforts by providing requested existing traffic signal data and plans, committing staff time to review recommended traffic communication plans, and overall participation to implement the project. OCTA will be the lead and implementing agency for the project, and as part of this effort, will be procuring and managing a consultant to collect any traffic equipment necessary and develop network communication parameters. OCTA has secured Congestion Mitigation and Air Quality (CMAQ) funds for the implementation of the project. There is no funding obligation for the City other than in-house resources (staff time) as needed. Public Works Commission Action: None required for this action. Environmental Status: No impact with the approval of the agreement. Any California Environmental Quality Act (CEQA) and environmental analysis will be processed by OCTA. City of Huntington Beach Printed on 3/13/2024Page 2 of 3 powered by Legistar™232 File #:24-111 MEETING DATE:3/19/2024 Strategic Plan Goal: Non Applicable - Administrative Item Attachment(s): 1. Cooperative Agreement No. C-3-3058 Between Orange County Transportation Authority and Cities of Huntington Beach, La Habra, Lake Forest, Newport Beach, Rancho Santa Margarita, Seal Beach, and Yorba Linda for Alternative Signal Communication Demonstration Project 2. PowerPoint City of Huntington Beach Printed on 3/13/2024Page 3 of 3 powered by Legistar™233 234 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 COOPERATIVE AGREEMENT NO. C-3-3058 BETWEEN ORANGE COUNTY TRANSPORTATION AUTHORITY AND CITIES OF HUNTINGTON BEACH, LA HABRA, LAKE FOREST, NEWPORT BEACH, RANCHO SANTA MARGARITA, SEAL BEACH, AND YORBA LINDA FOR ALTERNATIVE SIGNAL COMMUNICATION DEMONSTRATION PROJECT THIS COOPERATIVE AGREEMENT (Agreement), is effective this ___ day of ______ _, 202_ ("Effective Date"), by and between the Orange County Transportation Authority, 550 South Main Street, P.O. Box 14184, Orange California 92863-1584, a public corporation of the State of California (herein referred to as "AUTHORITY") and the cities of Huntington Beach, La Habra, Lake Forest, Newport Beach, Rancho Santa Margarita, Seal Beach, and Yorba Linda (hereinafter referred to as each a "PARTICIPATING AGENCY", collectively as the "PARTICIPATING AGENCIES"), each individually known as "Party" and collectively known as the "Parties". RECITALS: WHEREAS, AUTHORITY and PARTICIPATING AGENCIES agree to evaluate, select, and implement alternative signal communication solutions as a demonstration for the region to evaluate; and WHEREAS, on June 13, 2022, AUTHORITY entered into an agreement with lteris, Inc. (lteris), for a demonstration of alternative signal communication solutions; and WHEREAS, PARTICIPATING AGENCIES have indicated their desire to upgrade or install new communication infrastructure as part of the Alternative Signal Communication Demonstration Project (hereinafter referred to as "PROJECT"); and WHEREAS, the PROJECT will include twenty-two (22) traffic signal communication network infrastructure upgrades, as identified in Attachment A; and I Last Rev: 4/25/2022 Page 1 of 16 235 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 WHEREAS, the PROJECT will include communication network infrastructure upgrades, such as hardware to support the management of each PARTICIPATING AGENCY's traffic network; and WHEREAS, PARTICIPATING AGENCIES will each be responsible for their jurisdictional portion of the operation and maintenance of PROJECT; and WHEREAS, AUTHORITY and PARTICIPATING AGENCIES have previously cooperated, and will continue to cooperate, in carrying out traffic signal synchronization and other Intelligent Transportation Systems (ITS) improvements; and WHEREAS, AUTHORITY and PARTICIPATING AGENCIES acknowledge their mutual desire to enter into this Cooperative Agreement to formalize the terms and conditions and to establish guidelines and responsibilities between AUTHORITY and PARTICIPATING AGENCIES, for mutually agreed upon services for the improvement of the PROJECT. NOW, THEREFORE, it is mutually understood and agreed by AUTHORITY and PARTICIPATING AGENCIES as follows: ARTICLE 1. COMPLETE AGREEMENT A. This Agreement, including any attachments incorporated herein and made applicable by reference, constitutes the complete and exclusive statement of the term(s) and conditions(s) of this Agreement between AUTHORITY and PARTICIPATING AGENCIES and it supersedes all prior representations, understandings, and communications. The invalidity in whole or in part of any term or condition of this Agreement shall not affect the validity of other term(s) or conditions(s) of this Agreement. The above referenced Recitals are true and correct and are incorporated by reference herein. B. AUTHORITYS' failure to insist on any instance(s) of PARTICIPATING AGENCIES performance of any term(s) or condition(s) of this Agreement shall not be construed as a waiver or relinquishment of AUTHORITY's right to such performance or to future performance of such term(s) or condition(s), and PARTICIPATING AGENCIES obligation in respect thereto shall continue in full force and effect. Changes to any portion of this Agreement shall not be binding upon AUTHORITY except when specifically confirmed in writing by an authorized representative of AUTHORITY by way of a written Page 2 of 16 236 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 amendment to this Agreement and issued in accordance with the provisions of this Agreement. C. PARTICIPATING AGENCIES failure to insist on any instance(s) of AUTHORITY's performance of any term(s) or condition(s) of this Agreement shall not be construed as a waiver or relinquishment of PARTICIPATING AGENCIES right to such performance or to future performance of such term(s) or condition(s), and AUTHORITY's obligation in respect thereto shall continue in full force and effect. Changes to any portion of this Agreement shall not be binding upon a PARTICIPATING AGENCY except when specifically confirmed in writing by an authorized representative of that PARTICIPATING AGENCY by way of a written amendment to this Agreement and issued in accordance with the provisions of this Agreement. ARTICLE 2. SCOPE OF AGREEMENT This Agreement specifies the roles and responsibilities of the Parties as they pertain to the subjects and projects addressed herein. Both AUTHORITY and PARTICIPATING AGENCIES agree that each will cooperate and coordinate with the other in all activities covered by this Agreement and any other supplemental agreements that may be required to facilitate purposes thereof. ARTICLE 3. RESPONSIBILITIES OF AUTHORITY AUTHORITY agrees lo the following responsibilities for PROJECT: A. To oversee the procurement, configuration, and installation of ITS devices at PARTICIPATING AGENCY-specified intersections to enable communication from the traffic controllers and the PARTICIPATING AGENCIES' Advanced Traffic Management System (ATMS) at no cost to the PARTICIPATING AGENCIES. B. To accept responsibility for and to maintain in good condition the AUTHORITY installed ITS devices for the duration of the PROJECT. C. To provide instructions, manuals, guidance, and formats to PARTICIPATING AGENCIES to enable PARTICIPATING AGENCIES to comply with the monitoring and reporting requirements for the duration of the PROJECT. I Page 3 of 16 237 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 D. To remove any AUTHORITY installed ITS devices at the conclusion of the PROJECT upon request by a PARTICIPATING AGENCY, at no cost to PARTICIPATING AGENCIES. ARTICLE 4. RESPONSIBILITIES OF PARTICIPATING AGENCIES PARTICIPATING AGENCIES agree to the following responsibilities for PROJECT: A. To designate intersections within PARTICIPATING AGENCY's jurisdiction for AUTHORITY to install ITS devices for the PROJECT. B. To be solely responsible for maintaining the PARTICIPATING AGENCY's traffic signal operation utilized for the PROJECT within PARTICIPATING AGENCY's jurisdiction, except for AUTHORITY installed ITS devices. C. To inform AUTHORITY of new traffic signal installations and any traffic signal modifications, to PARTICIPATING AGENCY's overall traffic signal system, which would materially affect performance of traffic signal communication by AUTHORITY installed ITS devices. D. To continue to be responsible for and to maintain in good condition appropriate traffic signal controllers for PARTICIPATING AGENCY'S traffic signal operation within such PARTICIPATING AGENCY's jurisdiction for the duration of the PROJECT. E. To evaluate and accept all implementation of the PROJECT in PARTICIPATING AGENCY's jurisdiction in accordance with PARTICIPATING AGENCY's requirements. F. To be responsible for monitoring the devices and the communication links between the traffic signal controllers and PARTICIPATING AGENCY's ATMS to ensure they stay operational. G. To accept responsibility for and to maintain in good condition the AUTHORITY installed ITS devices within AGENCY's jurisdiction upon completion of PROJECT; or, at a PARTICIPATING AGENCY's sole discretion, to request that AUTHORITY remove AUTHORITY installed ITS devices at no cost to PARTICIPATING AGENCIES following completion the PROJECT. ARTICLE 5. MUTUAL RESPONSIBILl'riES OF PARTIES AUTHORITY and PARTICIPATING AGENCIES agrees to the following responsibilities for PROJECT: Page 4 of 16 238 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 A. To work together in good faith, using reasonable efforts to resolve any unforeseen issues and disputes arising out of the performance of this Agreement. B. This Agreement shall not be construed as changing the role of a PARTICIPATING AGENCY in upgrading its existing communication infrastructure, within tts jurisdiction. ARTICLE 6. DELEGATED AUTHORITY The actions required to be taken by PARTICIPATING AGENCIES in the implementation of this Agreement are delegated to its City Manager, or City Manager's designee, and the actions required to be taken by AUTHORITY in the implementation of this Agreement are delegated to AUTHORITY's Chief Executive Officer or designee. ARTICLE 7. AUDIT AND INSPECTION AUTHORITY and PARTICIPATING AGENCIES shall maintain a complete set of records in accordance with generally accepted accounting principles. Upon reasonable notice, PARTICIPATING AGENCIES shall permit the authorized representatives of the AUTHORITY to inspect and audit all work, materials, payroll, books, accounts, and other data and records of PARTICIPATING AGENCIES for a period of four (4) years after final payment, or until any on-going audit is completed. For purposes of audit, the date of completion of this Agreement shall be the date of PARTICIPATING AGENCIES payment of AUTHORITY's final billing (so noted on the invoice) under this Agreement. AUTHORITY shall have the right to reproduce any such books, records, and accounts. The above provision with respect to audits shall extend to and/or be included in contracts with PARTICIPATING AGENCIES contractor. ARTICLE 8. INDEMNIFICATION A. To the fullest extent permitted by law, PARTICIPATING AGENCIES shall defend (at PARTICIPATING AGENCIES sole cost and expense with legal counsel reasonably acceptable to AUTHORITY), indemnify, protect, and hold harmless AUTHORITY, its officers, directors, employees, and agents (collectively the "Indemnified Parties"), from and against any and all liabilities, actions, suits, claims, demands, losses, costs, judgments, arbitration awards, settlements, damages, demands, orders, penalties, and expenses including legal costs and attorney fees (collectively "Claims"), including but not Page 5 of 16 239 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 limited to Claims arising from injuries to or death of persons (PARTICIPATING AGENCIES employees included), for damage to property, including property owned by AUTHORITY, or from any violation of any federal, state, or local law or ordinance, by the negligent acts, omissions or willful misconduct of PARTICIPATING AGENCIES, its officers, directors, employees or agents in connection with or arising out of the performance of this Agreement. B. To the fullest extent permitted by law, AUTHORITY shall defend (at AUTHORITY's sole cost and expense with legal counsel reasonably acceptable to PARTICIPATING AGENCIES), indemnify, protect, and hold harmless PARTICIPATING AGENCIES, its officers, directors, employees, and agents ( collectively the "Indemnified Parties"), from and against any and all liabilities, actions, suits, claims, demands, losses, costs, judgments, arbitration awards, settlements, damages, demands, orders, penalties, and expenses including legal costs and attorney fees (collectively "Claims"), including but not limited to Claims arising from injuries to or death of persons (AUTHORITY's employees included), for damage to property, including property owned by PARTICIPATING AGENCIES, or from any violation of any federal, state, or local law or ordinance, by the negligent acts, omissions or willful misconduct of AUTHORITY, its officers, directors, employees or agents in connection with or arising out of the performance of this Agreement. C. The indemnification and defense obligations of this Agreement shall survive its expiration or termination. ARTICLE 9. ADDITIONAL PROVISIONS A. Term of Agreement This Agreement shall be in full force and effect through December 31, 2024. B. Termination: In the event either Party defaults in the performance of their obligations under this Agreement or breaches any of the provisions of this Agreement, the non-defaulting Party shall have the option to terminate this Agreement upon thirty (30) days' prior written notice to the other Party. Page 6 of 16 240 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 C. Termination for Convenience: Either Party may terminate this Agreement for its convenience by providing thirty (30) days' prior written notice of its intent to terminate for convenience to the other Party. D. AUTHORITY and PARTICIPATING AGENCIES shall comply with all applicable federal, state, and local laws, statutes, ordinances and regulations of any governmental authority having jurisdiction over the PROJECT. E. Legal Authority: AUTHORITY and PARTICIPATING AGENCIES hereto consent that they are authorized to execute this Agreement on behalf of said Parties and that, by so executing this Agreement, the Parties hereto are formally bound to the provisions of this Agreement. F. Severability: If any term, provision, covenant or condition of this Agreement is held to be invalid, void or otherwise unenforceable, to any extent, by any court of competent jurisdiction, the remainder of this Agreement shall not be affected thereby, and each term, provision, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law. G. Counterparts of Agreement: This Agreement may be executed and delivered in any number of counterparts, each of which, when executed and delivered shall be deemed an original and all of which together shall constitute the same agreement. Electronic signatures will be permitted. H. Amendments: This Agreement may be amended in writing at any time by the mutual consent of all Parties. No amendment shall have any force or effect unless executed in writing by both Parties. L Force Maieure: Either Party shall be excused from performing its obligations under this Agreement during the time and to the extent that it is prevented from performing by an unforeseeable cause beyond its control, including but not limited to; any incidence of fire, flood; acts of God; commandeering of material, products, plants or facilities by the federal, state or local government; national fuel shortage; or a material act or omission by another Party; when satisfactory evidence of such cause is presented to the other Party, and provided further that such nonperformance is unforeseeable, beyond the control and is not due to the fault or negligence of the Party not performing. I Page 7 of 16 241 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 J. Assignment: Neither this Agreement, nor any of the Parties' rights, obligations, duties, or authority hereunder may be assigned in whole or in part by either Party without the prior written consent of the other Party in its sole and absolute discretion. Any such attempt of assignment shall be deemed void and of no force and effect. Consent to one assignment shall not be deemed consent to any subsequent assignment, nor the waiver of any right to consent to such subsequent assignment. K. Governing Law: The laws of the State of California and applicable local and federal laws, regulations and guidelines shall govern this Agreement. L. Litigation fees: Should any of the Parties commence an action against any of the other Parties, either legal, administrative or otherwise, to enforce or interpret the provisions of this Agreement, the court shall award costs and expenses, including attorney's fees, to the prevailing party. M. Notices: Any notices, requests, or demands made between the Parties pursuant to this Agreement are to be directed as follows: To HUNTINGTON BEACH: To AUTHORITY: 2000 Main Street 550 S. Main Street Huntington Beach, California 92648 P.O. Box 14184 Attention: William F. Janusz Orange, California 92863-1584 Principal Civil Engineer Attention: Megan Bornman Tel: (714) 374-1628 Senior Contract Administrator E-mail: wjanusz@surfcity-hb.org Tel: (714) 560-5064 E-mail: mbornman@octa.net To LA HABRA: CC: Alicia Yang 110 East La Habra Boulevard Project Manager La Habra, California 90631 Tel: (714) 560-5362 Attention: Michael Plotnik E-mail: ayanq@octa.net Traffic Manager Tel: (562) 383-4162 E-mail: mplotnik@lahabraca.gov I I Page 8 of 16 242 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 To LAKE FOREST: 100 Civic Center Drive Lake Forest, California 92630 Attention: Tran Tran Traffic Engineering Manager-Public Works Tel: (949) 461-3485 E-mail: ttran@lakeforestca.gov To NEWPORT BEACH: 100 Civic Center Drive Newport Beach, California 92660 Attention: Brad Sommers City Traffic Engineer Tel: (949) 644-3326 E-mail: bsommers@newQortbeachca.gov To RANCHO SANTA MARGARITA: 22112 El Paseo Rancho Santa Margarita, California 92688 Attention: Wilson Leung Principal Engineer Tel: (949) 635-1800 ext. 6506 E-mail: wleung(ci)cit'Lofrsm.org To SEAL BEACH: 211 8th Street Seal Beach, California 907 40 Attention: Iris Lee Director of Public Works Tel: (562) 431-2527 E-mail: ilee@sealbeachca.gov I I I Page 9 of 16 243 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 To YORBA LINDA : 4845 Casa Loma Avenue Yorba Linda, Ca liforn ia 92886 Attention: Tony L. Wang Traffic Eng ineering Manager Tel: (714) 961-7 175 E-mail: twang@yorbalindaca.gov AGREEMENT NO . C-3-3058 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement No. C-3-3058 to be executed as of the date of the last s ignature below. CITY OF HUNTINGTON BEACH By: _________ _ Gracey Van Der Mark Mayor ATTEST: By: _________ _ Robin Estanislau City Clerk ORANG E COUNTY TRANSPORTATION AUTHORITY By: ____________ _ Lydia Bilynsky Department Manager, Capital Projects APPROVED AS TO FORM : ,]a111es JJoM kh By: JanicsDonich (Dec 29, 2023 13:22 PST) James M. Donich General Counsel Page 10 of 16 244 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement No. C-3-3058 to be executed as of the date of the last signature below. CITY OF LA HABRA By: _________ _ Albert Mendoza City Manager ATTEST: By: _________ _ Laurie Swindell City Clerk Page 11 of 16 245 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement No. C-3-3058 to be executed as of the date of the last signature below. CITY OF LAKE FOREST By: _________ _ Thomas E. Wheeler Director of Public Works ATTEST: By: _________ _ Lisa Berglund City Clerk Page12of16 246 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement No. C-3-3058 to be executed as of the date of the last signature below. CITY OF NEWPORT BEACH By: _________ _ Brad Sommers City Traffic Engineer ATTEST: By:----------- Leilani I. Brown City Clerk Page 13 of 16 247 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement No. C-3-3058 to be executed as of the date of the last signature below. CITY OF RANCHO SANTA MARGARITA By:----------- Wilson Leung Principal Engineer ATTEST: By: _________ _ Amy Diaz City Clerk Page 14 of 16 248 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement No. C-3-3058 to be executed as of the date of the last signature below. CITY OF SEAL BEACH By: _________ _ Iris Le Director of Public Works ATTEST: By: _________ _ Gloria Harper City Clerk Page 15 of 16 249 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 AGREEMENT NO. C-3-3058 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement No. C-3-3058 to be executed as of the date of the last signature below. CITY OF YORBA LINDA By: _________ _ Mark Pulone City Manager ATTEST: By: _________ _ Marcia Brown City Clerk Page16of16 250 No City 1 2 3 4 Huntington 5 Beach 6 7 8 9 La Habra 10 11 12 Lake Forest 13 Newport Beach 14 15 Rancho Santa 16 Margarita 17 18 19 Seal Beach 20 21 Yorba Linda 22 North/South Bolsa Chica Street Del Mar Lane Graham Street Springdale Street Trudy Lane Edward Street Goldenwest Street Gothard Street Euclid Street Euclid Street El Toro Road El Toro Road Bayside Drive Via Arriba Via Regresses Rancho Trabuco Altisima Heather Street Rose Street Tulip Street Lakeview Avenue Lakeview Avenue AGREEMENT NO. C-3-3058 ATTACHMENT A East/West Heil Avenue Heil Avenue Heil Avenue Heil Avenue Heil Avenue Heil Avenue Heil Avenue Heil Avenue Bridenbecker Avenue Lambert Road Pheasant Run Ridgeline Road Pedestrian Signal at Promontory Melinda Road Melinda Road Melinda Road Melinda Road Lampson Avenue Lampson Avenue Lampson Avenue Bastanchury Road Lemon Drive Orange County Transportation Authority Countywide Alternative Signal Communication Project March 19, 2024 251 PROJECT DESCRIPTION Orange County Transportation Authority (OCTA) is piloting and demonstrating an alternative communication project to continue efforts in building a traffic signal communication network countywide. OCTA responsibilities as Lead Agency: • Manage engineering efforts for the entire county network • Fund all projects cost with zero financial impact to the City of Huntington Beach City of Huntington Beach project locations and responsibilities: • Eight traffic signals along Heil Avenue between Bolsa Chica and Gothard Streets • Project will connect into the City’s existing fiber optic traffic signal communication • Huntington Beach Public Works Department will provide traffic data and approval review 252 PROJECT LOCATION MAP 253 t :.~--'-,---'----1---------I Tat!M<'IAve NORTH RECOMMENDED ACTION Recommended Action: • Approve and authorize the Mayor and City Clerk to execute “Cooperative Agreement No. C-3-3058 Between Orange County Transportation Authority and Cities of Huntington Beach, La Habra, Lake Forest, Newport Beach, Rancho Santa Margarita, Seal Beach, and Yorba Linda for Alternative Signal Communication Demonstration Project”. 254 QUESTIONS? 255 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-129 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Eric G. Parra, Interim City Manager VIA:Chau Vu, Director of Public Works PREPARED BY:Jacob Aube, Senior Civil Engineer Subject: Approve and Accept the Public Improvements, Release the Securities for, and Accept a Guarantee and Warranty Bond for Tract 18105 Statement of Issue: Meritage Homes of California, the owner/developer of Tract 18105, has completed construction of all required public improvements and is now eligible to receive a release of securities and bonds, pursuant to the provisions of the Subdivision Map Act. Financial Impact: No funding is required for this action. Recommended Action: A) Accept the improvements constructed and dedicated for public use with Tract 18105, and instruct the City Clerk to record the Notice of Acceptance of Public Improvements (Attachment 2) with the Orange County Recorder; and, B) Accept Guarantee and Warranty Bond No. 30190069 (Attachment 3); the security furnished for guarantee and warranty of public improvements, and instruct the City Clerk to file the bond with the City Treasurer; and, C) Instruct the City Clerk to notify the developer, Meritage Homes of California, of this action, and the City Treasurer to notify the Surety, Arch Insurance Company (Faithful Performance, Labor & Materials, Monument) and The Continental Insurance Company (Guarantee & Warranty), of this action. Alternative Action(s): Deny the recommended actions. Denying the recommended actions may violate the Subdivision Map Act whereby: City of Huntington Beach Printed on 3/13/2024Page 1 of 3 powered by Legistar™256 File #:24-129 MEETING DATE:3/19/2024 1. Section 66499.9 of the State of California Government Code requires the guarantee and warranty of the work for a period of one year following completion and acceptance of the improvement(s), against any defective work, labor, and materials furnished. Denying the acceptance of the Guarantee and Warranty Bond may place undue burden and costs upon the City for correcting any defective work, labor, and material provided by the subdivider. Analysis: On December 12, 2017, the Huntington Beach Planning Commission conditionally approved Conditional Use Permit No. 17-011 and Tentative Tract Map No. 18105, authorizing the construction of Tract 18105, which includes development of a 1.9-acre site to subdivide into 32 attached condominium townhomes, along with onsite/offsite utility upgrades and street improvements along Clay Avenue and Holly Lane. On July 1, 2019, City Council approved execution of the Subdivision Agreement between the City and Meritage Homes of California (owner/developer), and also accepted the project’s required surety bonds as follows: Faithful Performance Bond No. SU 1148545, Labor and Materials Bond No. SU 1148545, Monument Bond No. 1148546. The developer has completed all required public improvements and is now requesting release of the aforementioned securities, pursuant to California Government Code Section 66499.7(a). The constructed improvements include curb, gutter, and sidewalk along Clay Avenue and Holly Lane and a new street light on Holly Lane. The City Engineer has determined that the public improvements have been constructed in substantial compliance with the approved plans and specifications, and recommends acceptance of these improvements. Project Data: Developer: Meritage Homes of California 5 Peters Canyon, Suite 310, Irvine, CA 92606 Engineer:Pasco Laret Suiter & Associates 27127 Calle Arroyo, Suite 1904, San Juan Capistrano, CA 92675 Surveyor:Pasco Laret Suiter & Associates 27127 Calle Arroyo, Suite 1904, San Juan Capistrano, CA 92675 Surety:Arch Insurance Company (Faithful Performance, Labor & Materials, Monument) 2710 Gateway Oaks Drive, Suite 150N, Sacramento, CA 95833 The Continental Insurance Company (Guarantee & Warranty) 330 North Brand Boulevard, Suite 700, Glendale, CA 91203 Location:19200 Holly Lane City of Huntington Beach Printed on 3/13/2024Page 2 of 3 powered by Legistar™257 File #:24-129 MEETING DATE:3/19/2024 Environmental Status: This action is covered by the General Rule that the California Environmental Quality Act (CEQA) applies only to projects that have the potential for causing a significant effect on the environment (Section 15061.b.3 of the State CEQA Guidelines). It can be seen with certainty that there is no possibility that this activity will have a significant effect on the environment. Therefore, this activity is not subject to CEQA. Strategic Plan Goal: Non Applicable - Administrative Item Attachment(s): 1. Location Map 2. Notice of Acceptance of Public Improvements 3. Guarantee and Warranty Bond No. 30190069 4. Final Tract Map 18105 5. PowerPoint Presentation City of Huntington Beach Printed on 3/13/2024Page 3 of 3 powered by Legistar™258 259 1- 1.&J L&J ~ (/) 0 ~ ~ 0 C GARFIE;LO AVEN UE CLAY VICINITY MAP NO SCALE PRO J ECT SITE AVENUE 1-w w ~ (/) z f2 <:> z J::: z ::, :c 260 Recording requested by, and when recorded return to: Robin E stanislau, City Clerk Office of the City Clerk CITY OF HUNTINGTON BEACH P .O. Box 190-2000 Main Street Huntington Beach, Ca. 92648 (Space above this line for Recorder's use only) ACCEPTANCE OF PUBLIC IMPROVEMENTS (Huntington Beach Zoning and Subdivision Ordinance Section 255.22) PLEASE TAKE NOTICE THAT on February 7, 2024 the City Engineer considered the subdivision improvements described below, and found them to have been completed satisfactory and accepted, as limited by Huntington B each Zoning and Subdivision Ordinance Section 255.22(A), the improvements for public use . Further, the public improvements for the subdivision(s) have been dedicated to the City of Huntington Beach, as described on Final Tract Map No. 18105 Public improvements constructed consist of: a. Curb, gutter, paving, sidewalk and all utility connection (i.e. services for sewer, water, fire, etc.) along Holly Lane and Clay Avenue and a new street light on Holly Lane per the Improvement Plans for this Tract and, The Foregoing instrument is the City Clerk's Original Document Reflecting City Council Action Taken at the March 5, 2024 City Council Meeting Submitted for Recordation by the Orange County Recorder. Attest f-d'JniUI;!. ~ , 2024 City Clerk and Ex-officio Clerk of the City ouncil of the City of Huntington Beach, California CITY OF HUNTINGTON BEACH B~ 261 BOND NO.,c30"-1'-"9""0"'06,,,9,..__ __ _ PREMIUM ,,__$1'-"0""0'-"'.o,,_o ___ _ GUARANTEE AND WARRANTY BOND WHEREAS, Meritage Homes of California, Inc., a California Corporation, as a Principal, and The Continental Insurance Company. a corporation organized under the laws of the State of Pennsylvania and duly authorized to do business in the State of California, as Surety, are held and firmly bound unto the City of Huntington Beach, California, as Obligee, in the penal sum of Ten Thousand Eight Hundred Eighty and 30/100 ($10,880.30). representing 10 percent of the contract price entered into between the Principal and Obligee, to which payment well and truly to be made we do bind ourselves, and each of our heirs, executors, administrators, successors and assigns jointly and severally. WHEREAS, the said Principal entered into a contract with said Obligee, dated July 18, 2019 for work described as follows: Regatta (Holly) -Tract No. 18105,-Off-site Improvements and Public Utilities WHEREAS, said contract provides that the Principal will furnish a bond conditioned to guarantee and warrant for the period of one year after completion of the work and acceptance thereof by the Obligee, against all defects in workmanship and materials during said one-year period. WHEREAS, said work has been completed, and accepted by Obligee on ______ _ NOW, THEREFORE, the Principal and Surety, jointly and severally shall indemnify the Obligee for all loss that the Obligee may sustain by reason of any defective materials or workmanship, which become apparent during the period of one year from and after date of completion of work and acceptance thereof by Obligee. 1 262 In witness whereof, this instrument has been duly executed by the principal and surety above named, on May 18, 2023 .. Ii I l,11 11 Printed Name The Continental Insurance Company. as Surety sy ~cul~ J ~s I Moore, Attorney-in-Fact Printed Name 2 263 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) ON------~ BEFORE ME, _______________ _, A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED _____ _ ___________ AND ________________ ~ PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE.___________ MY PRINCIPAL PLACE OF BUSINESS IS NOTARY PUBLIC IN AND FOR SAID STATE IN ________ COUNTY PRINTED NAME MY COMMISSION EXPIRES ____ _ STATE OF ILLINOIS ) ) ss COUNTY OF DUPAGE ) ON May 18. 2023 . BEFORE ME, Lisa Marotta A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED James I Moore. Attorney-in-Fact ___________ AND N/A PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESSMY2 SIGNATURE ~ NOTARY PUBLIC IN AND FOR SAID STATE Lisa Marotta PRINTED NAME MY PRINCIPAL PLACE OF BUSINESS IS IN DuPage COUNTY MY COMMISSION EXPIRES February 7. 2026 3 OFFICIAL SEAL LISA MAROTTA NOTARY PUBLIC, STATE OF ILLINOIS My Commission Expires February 7, 2026 264 POWER OF AITORNEY APPOINTING INDIVIDUAL AITORNEY-IN-FACT Know AU Men By These Presents, That The Continental lnsurance Company, a Pennsy lvania insurance company, is a duly organized and existing insurance company having its principal office in the City of Chicago, and State of IlJinois, and that it does by virtue of the signature and seal herein affixed hereby make, constitute and appoint .James I Moore, Stephen T Kazmer, Dawn L Morgan, Melissa Schmidt, Amy Wickett, Kelly A Gardner, Jennifer J Mc Comb, Tariese M Pisciotto, Diane M Rubright, Martin Moss, Individually of Downers Grove, Il.,, its true and lawfu l Attomey(s)-in-Fact with fu ll power and authority hereby conferred to sign. seal and execute for and on its behalf bonds, undertakings and other obligatory instruments of similar nature -In Unlimited Amounts - and to bind them thereby as fully and to the same extent as if such instruments were signed by a duly authorized officer of the insurance company and all the acts of said Attorney, pursuant to the authority hereby given is hereby ratified and confirmed. This Power of Attorney is made and executed purs uant to and by authority of the By-Law and Resolutions, printed on the reverse hereof, duly adopted, as indicated, by the Board of Directors of the insurance company. In Witness Whereof, The Continental Insurance Company has caused these presents to be s igned by its Vice President and its corporate seal to be hereto affixed on this 20th day of June, 202 1. The Continental Insurance Company State of South Dakota, County ofMinnehal1a, ss: On this 20th day of June, 2021, before me personally came Paul T. Bruflat to me k:nmvn, who, being by me duly sworn, did depose and say: that he resides in the City of Sioux Falls, State of South Dakota; that he is a Vice President of1lle Continental Insurance Company, a Pennsylvania insurance company, described in and w hich executed the above instrument; that he knows the seal of said insurance company: that the seal affixed to the said instrument is such corporate seal; that it was so affixed pursuant to authority given by the Board of Directors of said insurance company and that he signed his name thereto pursuant to like authority, and acknowledges same to be the act and deed of said insurance company . ............. .,.._.. ................................ . : M.BENT : j~NOTARY PUBLIC~: ,~SOUTH DAKOTA~• , , ............................................. .,, ... ♦ My Commission Expires March 2, 2026 M. Bent Notary Publ ic CERTIFICATE I, D. Johnson, Assistant Secretary of The Continental Insurance Company,_ a Pennsylvania insurance company, do hereby certify that the Power of Attorney herein above set forth is still in force, and furthercertify that the By-Law and Resolution of the Board of Directors of the insurance company printed on the reverse hereof is still in force. In testimony whereof I have hereunto subscribed my name and affixed the seal of the said insurance company this 18th day of May, 2023. The Continental Insurance Company D. Johnson Assistant Secretary Form F6850-4/2012 Go to www.cnasurety.com >Owner/ Obligee Services> Validate Bond Coverage, if you want to verify bond authenticity. 265 Authorizing By-Laws and Resolutions ADOPTED BY THE BOARD OF DIRECTORS OF THE CONTINENTAL INSURANCE COMPANY: This Power of Attorney is made and executed pursuant to and by authority of the following By-Law duly adopted by the Board of Directors of the Company at a meeting held on May 10, 1995. "RESOLVED: That any Group Vice President may authori7..e an ofl'icer to sign specific documents, agreements and instruments on behalf of the Company provided that the name of such authorized officer and a description of the documents, agreements or instruments that such officer may sign will be provided in writing by the Group Vice President to the Secretary of the Company prior to such execution becoming effective. This Power of Attorney is signed by Paul T. Bruflat, Vice President, who has been authorized pursuant to the above resolution to execution power of attorneys on behalf of The Continental Insurance Company. TI1is Power of Attorney is signed and sealed by facsimile under and by the authority of the following Resolution adopted by the Board of Directors of the Company by unanimous written consent dated the 25 th day of April, 2012. ""Whereas, the bylaws of the Company or specific resolution of the Board of Directors has authorized variou..<; officers (the "Authorized Officers") lo execute various policies, bonds, undertakings and other obligatory instruments of like nature; and Whereas, from time to time, the signature of the Authorjzed Officers, in addition to being provided in original, hard copy fonnat, may be provided via facsimile or otherwise in an electronic fonnat (collectively, "Electronic Signatures"), Now therefore be it resolved: that the Electronic Signature of any Authorized Officer shall be valid and binding on the Company." 266 ALL-PURPOSE ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the id entity of the individual who signed the document to which this certifica t e is attached, and not the truthfulness, accuracy, or val idity of that document. STATE OF ARIZONA )SS COUNTY OF __ M_A_R_I_C_O_P_A ______ ) On May 25, 2023 before me, Laura Gu nd erson _ , Notary Public, personally appeared _Glen A Tulk , Vice President -NationaLD_e_velopment of MeritaaeJ::lmnes of California, Inc who proved to me on the ba sis of satisfactory evidence to be the person(s) w""hose name(s) is/are subscribed to the w ith in instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their sig nature(s) on the instrument th e person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify un der PENAL TY OF PERJURY under th e laws of the State of Arizona that the foregoing par~g~e h ~ true and correct. nd official seal. :,; No1 1 y Pt1h h., St t , Ari zona ~ L1 F llf .::K~Ot ~~ . M ricer Jr un•v , ] ,.. .. cnr.11 "10,, t 615u55 -:J :,1y Corn, s ron Expires ~/ t!ov>l"lt r O, ?Ot5 Signatu 0-~lffPn This area for official notarial seal. OPTIONAL SECTION -NOT PART OF NOTARY ACKNOWLEDGEMENT CAPACITY CLAIMED BY SIGNER Though statute does not require the Notary to fill in the data below, doing so may prove invaluab le to persons relyi ng on the documents. D INDIVIDUAL D CORPORATE OFFICER(S) illLE(S) D PARTNER(S) □ LIMITED D ATTORNEY-IN -FACT D TRUSTEE(S) D GUARDIAN/CONSERVATOR D OTHER SIGNER IS REPRESENTING: Name of Person or Entity 0 GENERAL Name of Person or Entity OPTIONAL SECTION -NOT PART OF NOTARY ACKNOWLEDGEMENT Though the data requested here is not required by law, it could prevent fraudulent reattachment of this form. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW ITTLE OR 1YPE OF DOCUMENT: NUMBER OF PAGES DATE OF DOCUMENT SIGNER(S) OTHER T HAN NAMED ABOVE Reproduced by Rrst Americ,m TIUe Company 11/2007 267 DUPLICATE SHEET 1 OF 3 TRACT NO. 18105 ACCEPTED AND FILED AT THE REQUEST OF FIRST AMERICAN TITLE COMPANY NUMBER OF LOTS: 1 NUMBERED GROSS AREA: 1.931 ACRES NET AREA: 1.930 ACRES (MINUS CLAY AVENUE, HOLLY LANE DEDICATION) DATE OF SURVEY: AUGUST, 2016 IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE. STATE 0,: CALIFORNIA DATE¥ I~, 1.1)\':1 ALL OF TENTATIVE TRACT NO. 18105 BEING A SU8DIVISION OF LOTS 22, 23 AND 24 OF BLOCK A OF GARFIELD STREET ADDITION TO HUNTINGTO1; BEACH, AS PER MAP FILED IN BOOK 7, PAGES 27 AND 28 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY TIME u:1£1 1\-M FEES$ xs .ov INSTRUMENT No.1J>/1flOC>l'R:ltJ. 1 BOOK~PAGt 12:-14 7'tf/M HUG':{ NGUYEN FOR CONDOMINIUM PURPOSES DATE OF SURVEY: AUGUST, 2016 PASCO LARET SUITER & ASSOCIATES COUNTY-CLERK RECORD~;:: BY frrma ·:t\1.fuJ1 l:.t>Vl JOSEPH C. YuHAS, L.S. 5211 OWNERSHIP CERTIFICATE WE, THE UNDERSIGNED, BEING ALL PARTIEG HAVING ANY RECORD TITLE INTEREST IN THE LAND COVERED BY THIS MAP, DO HEREBY CONSENT TO THE PREPARATION AND RECORDATION OF SAID MAP, AS SHOWN WITHIN THE DISTINCTIVE BORDER LINE. WE HEREBY DEDICATE TO THE CITY OF HUNTINGTON BEACH: 1. AN EASEMENT FOR STREET AND PUBLIC UTILITY PURPOSES: CLAY AVENUE AND HOLLY LANE AS DEDICATED. 2. AN EASEMENT FOR EMERGENCY AND PUBLIC SERVICE VEHICLE INGRESS AND EGRESS PURPOSES AND FOR MONITORING ANO INSPECTING POLLUTANT REMOVAL DEVICES AS DEDICATED. 3. AN EASEMENT FOR WATER PIPELINE PURPOSES AS DEDICATED. WE HEREBY RELEASE AND RELINQUISH TO THE CITY OF HUNT:NGTON BEA1.,H: 4. THE VEHICULAR ACCESS RIGHTS TO CLAY AVENUE AND HOLLY LANE AS RELEASED AND RELINQUISHED. MERITAGEH CALIFORNIA, INC, A CALIFORNIA CORPORATION BY: W..LL~~:::::::~ __ DATE: '/lSl\91 NAME: ---...i=L-.:.~::...:.:.....1.-_____ TITLE: Oivl")(bV\ ~r\--Si6.ui\t BY:_....-=:::~-+--'---------DATE: \J °? 'fu,t\N~ '\)\~i.~s NAME: _....;~~~-1_;;.oa.~i.;:~::;.:_< ___ TITLE: 'i.1~ l,1 NOTARY ACKNOWLEDGMENT A NOTARY PUBLIC OR OTHER OFFICER COMPLETING THIS CERTIFICATE VERIFIES ONLY THE IDENTITY OF THE INDIVIDUAL WHO SIGNED THE DOCUMENT TO WHICH THIS CERTIFICATE IS ATTACHED, AND NOT THE TRUTHFULNESS, ACCURACY, OR VALIDITY OF THAT DOCUMENT. STATE OF CALIFORNIA) )SS COUNTY OF ORANGE ) oN 't-s: - . 201s. BEFORE ME. t(. L. c. ha v (..:z. . A NOTARY PuBuc, PERsONALLYAPPEAREo E\ 1 ,· o t m Ch"' ,.., a L:t !ti."' r u.e.Lt_, wHo PROVED TO ME ON THE BASIS OF SATISFACTORY EVIDENCE TO BE THE PERSON($) WHOSE NAMES(S) IS/ ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGED TO ME THAT HE/ SHE I THEY EXECUTED THE SAME IN HIS I HER/ THEIR AUTHORIZED CAPACITY(IES), ANO THAT BY HIS/ HER/ THEIR SIGNATURE($) ON THE INSTRUMENT THE PERSON($), OR THE ENTITY UPON BEHALF OF WHICH THE PERSON($) ACTED, EXECUTED THE INSTRUMENT. I CERTIFY UNDER PENAL TY OF PERJURY UNDER THE LAWS OF THE STATE OF CALIFORNIA THAT THE FOREGOING PARAGRAPH IS TRUE AND CORRECT. WITNESS MY HANO: SIGNATURE • r, Q;&/ NOTARY PU UC IN AND FOR SAID STAT NAME (PRINTED) /(, L. cJ19 v<. :t.. MY PRINCIPAL PLACE OF BUSINESS IS IN C) I' a "'1 (... COUNTY MY COMMISSION EXPIRES C,-/ /EJ.a, /a., / A NOTA PUBLIC OR OTHER OFFICER COMPLETING THIS CERTIFICATE VERIFIES ONLY THE IDENTITY OF THE INDIVI L WHO SIGNED THE DOCUMENT TO WHICH THIS CERTIFICATE IS ATTACHED, AND NOT THE TRUTHFULNES , CCU RACY, OR VALIDITY OF THAT DOCUMENT. STATE OF CALIFORNIA )$ COUNTY OF ORANGE ) ON ______ . __________ ,, A NOTARY PUBLIC, PERSONALLY APPEARED.-:-:--::--c:"'."'C"-:c..,..,...,.=-=--~c----:----:c----------,--,----WHO PROVED TO ME ON THE BASIS OF SATISFACTOR VIDENCE TO BE THE PERSON($) WHOSE NAMES(S) IS/ ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND KNOWLEDGED TO ME THAT HE/ SHE/ THEY EXECUTED THE SAME IN HIS I HER/ THEIR AUTHORIZED ACITY(IES), AND THAT BY HIS/ HER/ THEIR SIGNATURE{$) ON THE INSTRUMENT THE PERSON(S), ORT PERSON(S) ACTED, EXECUTED THE INSTRUMENT. I CERTIFY UNDER PENAL TY OF PERJURY UNDER THE LAWS OF THE ST OF CALIFORNIA THAT THE FOREGOING PARAGRAPH IS TRUE AND CORRECT. WITNESS MY HANO: SIGNATURE _________ _ MY PRINCIPAL PLACE OF BUSIN NOTARY PUBLIC IN AND FOR SAID STATE IN ______ COUNTY NAME (PRINTED) ________ _ My COMMISSION EXPIRES _____ ___ DEPUTY SURVEYOR'S STATEMENT THIS MAP WAS PREPARED BY ME OR UNDER MY DIRECTION AND IS BASED UPON A FIELD SURVEY IN CONFORMANCE WITH THE REQUIREMENTS OF THE SUBDIVISION MAP ACT AND LC\CAL ORDINANCE AT THE REQUEST OF MLC HOLDINGS, INC., IN AUGUST 2016. I HEREBY STATE THAT ALL MONUMENTS ARE OF THE CHARACTER ANO OCCUPY THE POSITIONS INDICATED, OR THAT THEY WILL BE SET IN SUCH POSITIONS WITHIN NINETY DAYS AFTER ACCEPTANCE OF IMPROVEMENTS tNO THAT SAID MONUMENTS ARE SUFFICIENT TO ENABLE THE SURVEY TO BE REl'RACED. I HEREBY STATE THAT THIS FINAL MAP SUBSTANTIALLY CONFORMS TO THE CONDITIONALLY APPROVED TENTATIVE MAP. s~PH cbuHAs, LS s211 DATE LS 5211 COUNTY SURVEYOR'S STATEMENT I HEREBY STATE THAT I HAVE EXAMINED THIS MAP AND HAVE FOUND THAT ALL MAPPING PROVISIONS OF THE SUBDIVISION MAP ACT HAVE BEEN COMPLIED WITH AND I AM SATISFIED SAID MAP IS TECHNICALLY CORRECT. DATEDTHIS g?N DAYOF__,~,_,,tl.~'i.::_.iV:..._ ___ _..;,2019. KEVIN R. HILLS, COUN LS6617 BY:L PLS CITY ENGINEER'S STATEMENT !LYM. ANDBER S 8402 I HEREBY STATE THAT I HAVE EXAMINED THIS MAP AND HAVE FOUND IT TO BE SUBSTANTIALL VIN CONFORMANCE WITH THE TENTATIVE MAP, AS FILED WITH, AMENDED AND APPROVED BY THE CITY PLANNING COMMISSION; THAT ALL PROVISIONS OF THE SUBDIVISION MAP ACT AND CITY SUBDIVISION REGULATIONS HAVE BEEN COMPLIED WITH. THIS STATEMENT WILL TAKE EFFECT UPON THE DATE IN WHICH THE COUNTY OF ORANGE APPROVES THIS MAP AS TECHNICALLY CORRECT. THO~.HE I ,2019. DATEDTHIS :J. DAYOF lvf/lY -~ /!Ji'-« L) R.C.E. NO. 53300 CITY ENGINEER, CITY OF HUNTINGTON BEACH COUNTY TREASURER• TAX COLLECTOR'S CERTIFICATE STATE OF CALIFORNIA) )SS COUNTY OF ORANGE ) M HERBEL I HEREBY CERTIFY THAT ACCORDING TO THE RECORDS OF MY OFFICE THERE ARE NO LIENS AGAINST THE LAND COVERED BY THIS MAP OR ANY PART THEREOF FOR UNPAID STATE, COUNTY, MUNICIPAL OR LOCAL TAXES OR SPECIAL ASSESSMENTS COLLECTED AS TAXES, EXCEPT TAXES OR SPECIAL ASSESSMENTS COLLECTED AS TAXES NOT YET PAYABLE. AND DO ALSO CERTIFY TO THE RECORDER OF ORANGE COUNTY THAT THE PROVISIONS OF THE SUBDIVISION MAP ACT HAVE BEEN COMPLIED WITH REGARDING DEPOSITS TO SECURE THE PAYMENT OF TAXES OR SPECIAL ASSESSMENTS COLLECTED AS TAXES ON THE LAND COVERED BY THIS MAP. "eJ A DATED THIS 2 DAY OF _ __:___:_::V:c_=:.~.-=:.v...,,(,_r __ , 2019. SHARI L. FREIDENRICH COUNTY TREASURER• TAX COLLECTOR CITY CLERK'S CERTIFICATE STATE OF CALIFORNIA) )SS COUNTY OF ORANGE ) I HEREBY CER11FY THAT THIS MAP WAS PRESENTED FOR APPROVAL TO THE CITY COUNgi. QF THE CITY OF HUNTINGTON BEACH AT A REGULAR MEETING THEREOF HELD ON THE l&f-DAY OF v k/./ , 2019, AND THAT THEREUPON SAID COUNCll DID, BY AN ORDER DULY PASSED ANO ENiEREi:i'APPROVE SAID MAP AND DID ACCEPT ON BEHALF OF THE CITY OF HUNTINGTON BEACH: 1. AN EASEMENT FOR STREET AND PUBLIC UTILITY PURPOSES: CLAY AVENUE AND HOLLY LANE AS DEDICATED. 2. THE EASEMENT FOR EMERGENCY AND PUBLIC SERVICE VEHICLE INGRESS ANO EGRESS PURPOSES AND FOR MONITORING ANO INSPECTING POLLUTANT REMOVAL DEVICES AS DEDICATED. 3. THE EASEMENT FOR WATER PIPELINE PURPOSES AS DEDICATED. 4. THE VEHICULAR ACCESS RIGHTS TO CLAY AVENUE AND HOLLY LANE AS RELEASED AND RELINQUISHED. AND DID ALSO APPROVE SUBJECT MAP PURSUANT TO THE PROVISIONS OF SECTION 66436(a)(3)(A) OF THE SUBDIVISION MAP ACT. DATEDTHIS '}-Iii ROBIN ESTANISLAU CITY CLERK OF THE CITY OF HUNTINGTON BEACH CITY PLANNING COMMISSION CERTIFICATE I, URSULA LUNA-REYNOSA, SECRETARY TO THE PLANNING COMMISSION OF THE CITY OF HUNTINGTON BEACH, CALIFORNIA, DO HEREBY CERTIFY THAT I HAVE EXAMINED THIS MAP AND HAVE FOUND IT TO BE SUBSTANTIALLY THE SAME AS THE TENTATIVE MAP FILED WITH, TOGETHER WITH ANY AMENDMENTS THEREOF AND APPROVED BY THE CITY OF HUNTINGTON BEACH. DATED THIS 2.t\i::h OAYOF APt.l L kw~ Cd:-flv-~c.- URSULA LUNA-FtEV~lQ~ SECRETARY TO THE PLANNING COMMISSION CITY OF HUNTl~1G;ON BEACH ___ ,2019. 268 SHEET 2 OF 3 NUMBER OF LOTS: 1 NUMBERED GROSS AREA: 1.931 ACRES DUPLICATE TRACT NO. 18105 IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA NET AREA: 1.930 ACRES {MINUS CLAY AVENUE, HOLLY LANE DEDICATION) DATE OF SURVEY: AUGUST, 2016 ALL OF TENTATIVE TRACT NO. 18105 BEING A SUBDIVISION OF LOTS 22, 23 AND 24 OF BLOCK A OF GARFIELD STREET ADDITION TO HUNTINGTON BEACH, AS PER MAP FILED IN BOOK 7, PAGES 27 AND 28 OF MISCELLANEOUS MAPS, LEGEND FOUND OCS GPS HORIZONTAL CONTROL • ( ) STATION MONUMENT PER RECORD$ ON FILE IN THE OFFICE OF THE ORANG'= COUNTY SURVEYOR FOUND MONUMENT AS INDICATED RECORD BOUNDARY DATA AS INDICATED ® SET GIN SPIKE AND WASHER LS 5211 El SET LEAD PLUG AND BRASS TAG LS 5211 AT OFFSET NOTED SNF SEARCHED,NOTFOUNO CF CALCULATED FROM (R) RADIAL PROPERTY LINE RIGHT-OF-WAY LINE CENTERLINE ----ADJOINING PROPERTY LINE --------TIE LINE/ REFERENCE LINE ---------------.EASEMENT LINE ·•··~-·-····•·•· .•. ,., .. , ... , ... ,., .•.. ,.,.,.. RELINQUISHMENT OF ACCESS RIGHTS ..... GARFIELD ----- TRACT NO. 16497 MM 860/25-26 .._, I I .._, TRACT NO. 15964 MM 849 /24-26 SNF --------- TRACT NO. 16289 MM 837/44-45 IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY FOR CONDOMINIUM PURPOSES DATE OF SURVEY: AUGUST, 2016 PASCO LARET SUITER & ASSOCIATES JOSEPH C. YUHAS, LS. 5211 BOUNDARY CONTROL MAP MAP REFERENCE LEGEND R1 • GARFIELD STREET ADDITION TO HUNTINGTON BEACH MM 7 / 27-28 R2 -PMB 134 / 38 R3-TRACTNO.10511 MM455/ 13-17 R4 -TRACT NO. 14347 MM 689 / 35-36 RS· PARCEL MAP NO. 2000-207 PMB 325 / 35-37 R6 • TRACT NO. 16287 MM 837 / 46-47 R7 • TRACT NO. 16288 MM 83819-10 RS· TRACT NO. 16289 MM 837144-45 R9 • TRACT NO. 15964 MM 849 / 24-26 R10 -TRACT NO. 16497 MM 860 / 25-26 R11 • TRACT NO. 16740 MM 886 / 30-33 R12 • TRACT NO. 16646 MM 887 / 4-6 R13 • TRACT NO. 12027 MM 529 / 1-4 R14 • CR 2004-0603 30' / / MONUMENT NOTES & ESTABLISHMENT NOTES: 0 FOUND SPtt<E & WASHER LS 3347, FLUSH, PER R8, ACCEPTED AS POINT ON CENTERLINE OF CLAY AVENUE AND "NEW GOTHARDv POINT OF CURVATURE (BC) PER CITY OF H.B. ORDINANCE 3102, PER R8 © FOUND SPIKE & WASHER RCE 19402, FLUSH, PER R13, R14, ACCEPTED AS POINT ON CENTERLINE OF CLAY AVENUE. 0 FOUND SPIKE & WASHER. ILLEGIBLE. FLUSH. ACCEPTED AS NORTHWESTERLY CORNER OF LOT 2 TRACT 12027, MM 529/1-4 TO BE RESET PER LEGEND AND CORNER RECORD FILED. 0 FOUND 1" IRON PIPE LS 7707, FLUSH, PER R11, ACCEPTED AS POINT ON CENTE~LINE OF CLAY AVENUE. 0 FOUND 2" U~ON PIPE LS 3347, DOWN 0.7', PER R10, ACCEPTED AS INTERSECTION OF HOLLY LANE CENTERLINE & MAIN STREET TANGENT LINE. 0 FOUND 2" IRON PIPE W/ TAG, ILLEGIBLE, IN WELL MONUMENT, DOWN 1.2', PER R5, ACCEPTED AS CENTERLINE INTERSECTION OF GARFIELD AVENUE AND HOLLY STREET. 0 FOUND 1" IRON PIPE W/ PLASTIC PLUG LS 4683, DOWN 0.25', PER R3, ACCEPTED AS 2.00' OFFSET TO NORTHEAST CORNER OF TRACT NO. 14347. © FOUND 1" IRON PIPE W/ PLASTIC PLUG LS 4683, DOWN 0.25', PER R3, ACCEPTED AS 2.00' OFFSET TO NORTHEAST CORNER OF TRACT NO. 14347. 0 FOUND LEAD & NAIL, FLUSH. NO REFERENCE, ACCEPTED AS 2.00X 2.00' OFFSET TO NORTHEAST CORNER LOT 22 GARFIELD STREET ADDITION. $ET TAG LS 5211. e FOUND 1-1/Z' IRON PIPE LS 3347, FLUSH, IN LIEU OF 2" IRON PIPE LS 3347 PER R6, HELO FOR EASTERLY LINE LOTS 20•24 GARFIELD STREET ADDITION. TO BE DESTROYED DURING CONSTRUCTION AND REPLACED PER LEGEND. e FOUND 1" IRON PIPE WI PLASTIC PLUG LS 46_, DOWN 0.35', PER R3, ACCEPTED AS 2.00 X 2.00' OFFSET TO NORTHWEST CORNER TRACT NO.14347. @ FOUND CHISELED X ON CONCRETE, NO REFERENCE, N 86"22'08• W 9.08' FROM CORNER AS ESTABLISHED HEREON, NOT ACCEPTED. N s 0 ° N00°17'50ME 2.00' _ ~ss.:.~.:3~ 2ao.19• c2ao~ 2ao.22• Ra, R4) _ _t?:,' 0 SCALE: 1• = 60' i N 00°18'26" E 2.00' ~ 8 2.00' N 89°41'34" W 2.00' TRACT NO. 14347 MM 689/35-36 N 89°41'44" W 6.00' r,:,.. _J ~I 0 ~, ii ~, s1 t:!, ~I NI 120 180 NOTE SEE SHEET 3 FOR CONTROL DIAGRAM, EASEMENTS, BASIS OF BEARINGS AND DATUM STATEMENT. MONUMENT NOTES; 'V N 00•1a·1s· e 2.00· ·!::1ft:!""----N-89-·4_1_•44_•_w_2ao_.2_3•.;.<2_s_o·_R_1._2s_o..,.2.a.·.R .. 4)---~r--ESTABLISHED BY INTERSECTION ALL MONUMENTS SET IN PUBLIC RIGHT-OF-WAY (EXCEPTING LOT EXTENSIONS) SHALL HAVE A CORNER RECORD FILED WITH THE ORANGE COUNTY SURVEYOR'S OFFICE TO PERPETUATE THE POSITION OF THE SUBJECT POINT OF CONTROL WITHIN NINETY DAYS AFTER ACCEPTANCE OF IMPROVEMENTS SNF, ESTABLISHED BY PRORATION, PER R4 2.00' LOT 22 BLOCK A SNF SNF SNF SNF w = g ;:... .... 0 8 z TRACT NO. 10511 MM 455/13-17 ----7 WESTERLY LINE SOUTHERN PACIFIC I RAILROAD, ABANDONED --1 30' 60' MM 7/27-28 LOT 24 I I N 89°41'32" W (R) 6.00' SEE SHEET 3 FOR DEDICATION TRACT NO. 16287 I MM 837 /46-47 I PARCEL MAP PMB 134/38 I I 30' I "NEW GOTHARD" • POINT OF CURVATURE ~-158.43' (158.43' RS) 0 (BC) PER CITY OF H.B. ~i--:.:._ ____ ._-r ORDINANCE 3102, P~: 0 \_ ~ 158.35' 0.08' (0.07' RS, R11) SNF N 00•1a•oo· E (R) 6.00' N 00•17•50• E 6.00' N 00°17•50• E 0.12' · r.;'\ 640.49' (640.50' CF R2, R3 & R4, 640.35 CF R6, 640.54' CF R9} ___ . i j 2 310.29' SNF 330.20' --i-. - CLAY AVENUE N89"42'00"W 798.92' 61t3r(611.34'CFR9) (CLAY STREET R1) ~ 29.12' (29.12' R4, 29.20' R9) L wesTERLY LINE LOT 2 PER R13 I LOT 2 TRACT NO. 12027 MM 529/1-4 269 DUPLICATE SHEET 3 OF 3 TRACT NO. 18105 NOTE NUMBER OF LOTS: 1 NUMBERED GROSS AREA: 1.931 ACRES NET AREA: 1.930ACRES (MINUS CLAY AVENUE, HOLLY LANE DEDICATION} IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA BEING A SUBDIVISION OF LOTS 22, 23 AND 24 OF BLOCK A OF GARFIELD STREET ADDITION TO HUNTINGTON BEACH, AS PER MAP FILED IN BOOK 7, PAGES 27 ANO 28 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY FOR LEGEND, REFERENCES AND MONUMENT NOTES SEE SHEET 2 OF 3. DATE OF SURVEY: AUGUST, 2016 ALL OF TENTATIVE TRACT NO. 18105 PROPOSED EASEMENTS INDICATES A PIPELINE EASEMENT FOR WATER PIPELINE PURPOSES, DEDICATED HEREON TO THE CITY OF HUNTINGTON BEACH. INDICATES AN EASEMENT FOR EMERGENCY AND PUBLIC SERVICE VEHICLE INGRESS AND EGRESS PURPOSES AND FOR MONITORING AND INSPECTING POLLUTANT REMOVAL DEVICES, DEDICATED HEREON TO THE CITY OF HUNTINGTON BEACH. INDICATES AN AN EASEMENT FOR STREET AND PUBLIC UTILITY PURPOSES, DEDICATED HEREON TO THE CITY OF HUNTINGTON BEACH. 0 INDICATES A RELINQUISHMENT OF VEHICULAR ACCESS RIGHTS TO AND FROM HOLLY LANE AND CLAY AVENUE, RELINQlJISHED HEREON TO THE CITY OF HUNTINGTON BEACH. I 60' I 30' 30' FOR CONDOMINIUM PURPOSES DATE OF SURVEY: AUGUST, 2016 PASCO LARET SUITER & ASSOCIATES JOSEPH C. YUHAS, LS. 5211 EASEMENT MAP BASIS OF BEARINGS: THE BEARINGS SHOWN HEREON ARE BASED ON THE BEARING BETWEEN OCS HORIZONTAL CONTROL STATION GPS NO BLSAAND STATION GPS NO TRAK BEING N 45°06'45" W PER RECORDS ON FILE IN THE OFFICE OF THE ORANGE COUNTY SURVEYOR. DATUM STATEMENT: COORDINATES SHOWN ARE BASED ON THE CALIFORNIA COORDINATE SYSTEM (CCS83), ZONE VI, 1983 NAD, (2007.00 EPOCH OCS GPS ADJUSTMENT) ALL DISTANCES SHOWN ARE GROUND UNLESS OTHERWISE NOTED. TO OBTAIN GRID DISTANCES MULTIPLY GROUND DISTANCE BY 0.99996945, (COMBINED SCALE FACTOR SHOWN HEREON AT POINT A, PROJECT SPECIFIC) N s SCALE: 1" = 30' I j 60 90 TRACT NO. 14347 MM 689/35-36 LOT 1 CONTROL DIAGRAM SCALE:NONE CONTINUOUS GPS STATION (BLSA) N: 2239163.45 E: 6021325.68 I I I N 89"41'44" W 310.23' 30.00' --~~-------------~-;.:.;;:;;..:.~28~0;;;.2;3'~-----------------..;.il:--..__ ~ (0 ~C'\J I.!) I ,.._~ -~ 0 0) <~ 1--co ~~ 8:~ ~ ~ w z ::5 ~ ..J 0 :c ~ I I • I I O I ;.. 0) 8 ,.. ... O> ~ .... I ~ !W I It> ! • I N .18 I ;: ..-: ! <:O I ..-1:' I 8 ll>10 • I • 10 o I ~-l R=3.oo· ~ 1 CON•! vz L=4.73' ;: : I D=90°1s·oo· w I z N 90•00·00· e 1 s1.96' ~! ~----------------------------r---------------------1~ <IOI • • 1-.r 00 .... 11 2 8 81co , 'I..- 01 re ~,c z 18 N 89°41'32"W 10.00· J I z /\_. .... -+--------N90~~0;W-89.97;------+-)\ L=4.71.),---7: , ~ ( L=26.62' L=26.80' \ R=S.00' V l _/ ,......~-~0°18'28" E 25.50' f R=17.00' R=17.oo· + 0=90°00'00" ~ ' i, D=s9•42•00· o=so•1a•44• ,' <O.,.· 1 L=16.09' t I I • 1, R=25.00' 1 1 3': I I I D=36°s2·12· , 1 1 to N 37"10'40" E (R) ---.:it. 1 1 1 ,... 1 N 89°41'32" W 44 00' _,( 1 • I :;... I -'C""---+-------------·T_,.,,, \. - . l ~ gi ! , 8 L-26.71 I tci '! ~ (d o_ N a9•41•32• w 10 oo· • R=17 .oo· l co LOT 1 i I z ;: o :;... • • 8 o=eo·oo·28" , w w 11-47.oo• • co '-9 N tci 1 •g 1.931 AC. GROSS ~ g· w N (') <") iti N I 1930AC :'<!'I • I 0 C'1 co J_ I (0 • • NET. co I co ; I g ~-+-------------_ / L=29.84' lb b I ;: ~ l N36°33'44"W(R)--...... \ N89°41'32"W 42.01' ........ , R=19.00' ,o ol > o' W \ 0=89°59'32" I z Z I fo O I L=16.09' \ I I !" Z 30' 60' I 30' ~ R=25.00' I I I :; -t I I o 0=36°52'12" I I i r" I I I 8 I I L=26.61' : z z I t R=17.00'\ t ~ I \ 0=89°41'16" } L=4.71' I 1 ' / R=3.00' 1 )..., N 90°00'00" E 89.95' / _ • • • ---- 1 L=26.79' ./ '~+------1----------------------+-.,. 0-90 0000 I W ~ (l) .... ,.. L=23.56' R=15.00' D=90°00·2s· 61.02' 1 R=17.00' 1 •~ I • :,,.I co I D=90°1a·oo" 8 l:l' cio NI . ml,... g1 ~ Nib i I K L"4.7<r ____ L ___ N 90'00UO" W 151.95' __________________ ] ~ 8 1 I ~ R=3.00' z I i m D=89°42'00" I 'w l-25.00' -lb I 19 I I CO t , .... I '80 I I I IZ I I I I I I 265.28' 179.26' N 89°42'00" W 280.28' I I m .... 0 0 <") lg a, ... i w • :is i-,.. .... • g z TRACT NO. 10511 MM 455/13-17 TRACT NO. 16287 MM 837/46-47 J_ __ I_ I N 89°42'00" W 310.29' ------ i :;j / ::::.I /_ ___ _ CLAY AVENUE LOT 2 TRACT NO. 12027 MM 529/1-4 llf - Tract 18105 Acceptance of Public Improvements and Release of Surety Bonds Department of Public Works 270 .-...::::-__ _ - --------------.-= ------ ~ BACKGROUND •On December 12, 2017, the Huntington Beach Planning Commission conditionally approved Conditional Use Permit No. 17-011 and Tentative Tract Map No. 18105, authorizing the construction of Tract 18105, which includes development of a 1.9-acre site to subdivide into 32 attached condominium townhomes, along with onsite/offsite utility upgrades and street improvements along Clay Avenue and Holly Lane. •On July 1, 2019, City Council approved execution of the Subdivison Agreement between the City and Meritage Homes of California (owner/developer), and also accepted the project’s required surety bonds as follows: Faithful Performance Bond No. SU 1148545, Labor and Materials Bond No. SU 1148545, and Monument Bond No. SU 1148546. 271 LOCATION MAP 272 GARFIE_LD AVENUE CLAY VICINITY MAP NO SCALE PROJECT SITE AVENUE 1- t:J f:: Vl z 0 I- ~ z F z => :i: 273 I I I I I I I 1&,11 sl ►l ::i \ o, J:I I I NEED/WHY/BENEFITS •The developer has completed all required public improvements and is now requesting release of the aforementioned surety bonds, pursuant to California Government Code Section 66499.7(a). •The City Engineer has determined that the public improvements have been constructed in substantial compliance with the approved project plans and specifications and recommends acceptance of these improvements. 274 DETAILS •The constructed public improvements include: •Curb, gutter, and sidewalk along the project’s Holly Lane and Clay Avenue frontages •New street light on Holly Lane •A Guarantee and Warranty Bond has been submitted by the Developer to provide a one-year warranty period to the City for the subject public improvements. 275 RECOMMENDATION A)Accept the improvements constructed and dedicated for public use with Tract 18105, and instruct the City Clerk to record the Notice of Acceptance of Public Improvements with the Orange County Recorder; and, B)Accept Guarantee and Warranty Bond No. 30190069; the security furnished for guarantee and warranty of public improvements, and instruct the City Clerk to file the bond with the City Treasurer; and, C)Instruct the City Clerk to notify the developer, Meritage Homes of California, of this action, and the City Treasurer to notify the Surety, Arch Insurance Company (Faithful Performance, Labor & Materials, Monument) and The Continental Insurance Company (Guarantee & Warranty), of this action. 276 Questions? 277 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-134 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Eric G. Parra, Interim City Manager VIA:Chau Vu, Director of Public Works PREPARED BY:Jacob Aube, Senior Civil Engineer Subject: Approve and Accept the Public Improvements, Release the Securities for, and Accept a Guarantee and Warranty Bond for Tract 18106 Statement of Issue: Meritage Homes of California, the owner/developer of Tract 18106, has completed construction of all required public improvements and is now eligible to receive a release of securities and bonds, pursuant to the provisions of the Subdivision Map Act. Financial Impact: No funding is required for this action. Recommended Action: A) Accept the improvements constructed and dedicated for public use with Tract 18106, and instruct the City Clerk to record the Notice of Acceptance of Public Improvements (Attachment 2) with the Orange County Recorder; and, B) Accept Guarantee and Warranty Bond No. 30190068 (Attachment 3); the security furnished for guarantee and warranty of public improvements, and instruct the City Clerk to file the bond with the City Treasurer; and, C) Instruct the City Clerk to notify the developer, Meritage Homes of California, of this action, and the City Treasurer to notify the Surety, Arch Insurance Company (Faithful Performance, Labor & Materials, Monument) and The Continental Insurance Company (Guarantee & Warranty), of this action. Alternative Action(s): Deny the recommended action. Denying the recommended actions may violate the Subdivision Map Act whereby: 1. Section 66499.9 of the State of California Government Code requires the guarantee City of Huntington Beach Printed on 3/13/2024Page 1 of 3 powered by Legistar™278 File #:24-134 MEETING DATE:3/19/2024 and warranty of the work for a period of one year following completion and acceptance of the improvement(s), against any defective work, labor and materials furnished. Denying the acceptance of the Guarantee and Warranty Bond may place undue burden and costs upon the City for correcting any defective work, labor and material provided by the subdivider. Analysis: On December 12, 2017, the Huntington Beach Planning Commission conditionally approved Conditional Use Permit No. 17-010 and Tentative Tract Map No. 18106, authorizing the construction of Tract 18106, which includes development of a 1.3-acre site to subdivide into 21 attached condominium townhomes, along with onsite/offsite utility upgrades and street improvements along Gothard Street. On July 1, 2019, City Council approved execution of the Subdivison Agreement between the City and Meritage Homes of California (owner/developer), and also accepted the project’s required surety bonds as follows: Faithful Performance Bond No. SU 1148547, Labor and Materials Bond No. SU 1148547, and Monument Bond No. SU 1148548. The developer has completed all required public improvements and is now requesting release of the aforementioned securities, pursuant to California Government Code Section 66499.7(a). The constructed improvements include curb, gutter, and sidewalk along Gothard Street and a new street light on Gothard Street. The City Engineer has determined that the public improvements have been constructed in substantial compliance with the approved plans and specifications, and recommends acceptance of these improvements. Project data Developer: Meritage Homes of California 5 Peters Canyon, Suite 310, Irvine, CA 92606 Engineer: Pasco Laret Suiter & Associates 27127 Calle Arroyo, Suite 1904, San Juan Capistrano, CA 92675 Surveyor: Pasco Laret Suiter & Associates 27127 Calle Arroyo, Suite 1904, San Juan Capistrano, CA 92675 Surety: Arch Insurance Company (Faithful Performance, Labor & Materials, Monument) 2710 Gateway Oaks Drive, Suite 150N, Sacramento, CA 95833 The Continental Insurance Company (Guarantee & Warranty) 330 North Brand Boulevard, Suite 700, Glendale, CA 91203 Location: 19100 Gothard Street City of Huntington Beach Printed on 3/13/2024Page 2 of 3 powered by Legistar™279 File #:24-134 MEETING DATE:3/19/2024 Environmental Status: This action is covered by the General Rule that the California Environmental Quality Act (CEQA) applies only to projects that have the potential for causing a significant effect on the environment (Section 15061.b.3 of the State CEQA Guidelines). It can be seen with certainty that there is no possibility that this activity will have a significant effect on the environment. Therefore, this activity is not subject to CEQA. Strategic Plan Goal: Non Applicable - Administrative Item Attachment(s): 1. Location Map 2. Notice of Acceptance of Public Improvements 3. Guarantee and Warranty Bond No. 30190068 4. Final Tract Map 18106 5. PowerPoint Presentation City of Huntington Beach Printed on 3/13/2024Page 3 of 3 powered by Legistar™280 281 CAR~El.O Al,{NUE SITE 0.AY AVENUE 282 Recording requested by, and when recorded return to: Robin Estanislau, City Clerk Office of the City Clerk CITY OF HUNTINGTON BEACH P.O. Box 190 -2000 Main Street Huntington Beach, Ca. 92648 (Space above this line for Recorder's use only) ACCEPTANCE OF PUBLIC IMPROVEMENTS (Huntington Beach Zoning and Subdivision Ordinance Section 255.22) PLEASE TAKE NOTICE THAT on February 7, 2024 the City Engineer considered the subdivision improvements described below, and found them to have been completed satisfactory and accepted, as limited by Huntington Beach Zoning and Subdivision Ordinance Section 255.22(A), the improvements for public use. Further, the public improvements for the subdivision(s) have been dedicated to the City of Huntington Beach, as described on Final Tract Map No. 18106 Public improvements constructed consist of: a . Curb, gutter, paving, sidewalk and all utility connection (i.e . services for sewer, water, fire, etc.) along Gothard Street and a new street light on Gothard Street per the Improvement Plans for this Tract and, The Foregoing instrument is the City Clerk's Original Document Reflecting City Council Action Taken at the March 5, 2024 City Council Meeting Submitted for Recordation by the Orange County Recorder. Attest :f;,bV)),0 ~ ~ , 2024 City Clerk and Ex-officio Clerk of the City ~uncil of the City of Huntington Beach, California By: -ity Engineer TtlD;nfi<; t-!Ee;JEL 283 BOND NO.,,_30"'-1,.,,9""0""06,,,8'----- PREMIUM "'$.,_.,10=0"-".o"'-o ___ _ GUARANTEE AND WARRANTY BOND WHEREAS, Meritage Homes of California. Inc., a California Corporation, as a Principal, and The Continental Insurance Company. a corporation organized under the laws of the State of Pennsylvania and duly authorized to do business in the State of California, as Surety, are held and firmly bound unto the City of Huntington Beach, California, as Obligee, in the penal sum of Six Thousand Four Hundred Sixty Three and 80/100 ($6,463.80), representing 10 percent of the contract price entered into between the Principal and Obligee, to which payment well and truly to be made we do bind ourselves, and each of our heirs, executors, administrators, successors and assigns jointly and severally. WHEREAS, the said Principal entered into a contract with said Obligee, dated July 18, 2019 for work described as follows: Regatta (Gothard) -Tract No. 18106,-Off-site Improvements and Public Utilities WHEREAS, said contract provides that the Principal will furnish a bond conditioned to guarantee and warrant for the period of one year after completion of the work and acceptance thereof by the Obligee, against all defects in workmanship and materials during said one-year period. WHEREAS, said work has been completed, and accepted by Obligee on ______ _ NOW, THEREFORE, the Principal and Surety, jointly and severally shall indemnify the Obligee for all loss that the Obligee may sustain by reason of any defective materials or workmanship, which become apparent during the period of one year from and after date of completion of work and acceptance thereof by Obligee. I 284 In witness whereof, this instrument has been duly executed by the principal and surety above named, on May 18, 2023. lifomia Inc. a California Cor oration, as Principal The Continental Insurance Company, as Surety By {)cu } flJ.,,..,__,,-- '· James I Moore, Attorney-in-Fact Printed Name 2 APPROVED AS TO FORM C¼ ~ TV ATTORNEY CITY O~I HUNTINGTON BEACH 285 STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) ON _______ _, BEFORE ME,---------------~ A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED _____ _ ___________ AND _______________ ~ PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE __________ _ MY PRINCIPAL PLACE OF BUSINESS IS NOTARY PUBLIC IN AND FOR SAID STATE IN ________ COUNTY PRINTED NAME MY COMMISSION EXPIRES ____ _ STATE OF ILLINOIS ) ss COUNTY OF DUPAGE ) ON May 18. 2023 , BEFORE ME, Lisa Marotta A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED James I Moore. Attorney-in-Fact ___________ AND N/A PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE ~~)i_) - NOTARY PUBICINAND FOR SAID STATE Lisa Marotta PRINTED NAME 3 MY PRINCIPAL PLACE OF BUSINESS IS IN DuPage COUNTY MY COMMISSION EXPIRES February 7. 2026 OFFICIAL SEAL LISA MAROTTA NOTARY PUBLIC, STATE OF ILLINOIS My Commission Expires February 7, 2026 286 POWER OF ATTORNEY APPOINTING INDIVIDUAL ATTORNEY-IN-FACT Know All Men By These Presents, That The Continental Insurance Company, a Pennsylvania insurance company, is a duly organized and existing insurance company having its princ ip al office in the City of Chicago, and State of Illino is, and that it does by virtue of the s ignature and seal herein affixed hereby make, constitute and appoint James I Moore, Stephen T Kazmer, Dawn L Morgan, Melissa Schmidt, Amy Wickett, Kelly A Gardner, Jennifer J Mc Comb, Tariese M Pisciotto, Diane M Rubright, Martin Moss, Individually of Downers Grove, IL, its true and lawful Attomey(s)-in-Fact with full power and a uthority hereby conferred to sign, seal and execute for and on its behalf bonds, unde rtakings and other oblig atory instruments of sim ilar nature -Io Unlimited Amounts - and to bind them thereby as fully and to the same extent as if s uch ins truments we re signed by a duly authorized officer of the insurance company and all the acts of said Attorney, pursuant to the authority he reby given is hereby ratified and confirmed. This Power of Attorney is made and executed purs uant to and by a uthori ty of the By-Law and Resolutions, printed on the reverse hereof, duly adopted, as indicated, by th e Board of Directors of th e insurance company. In Witness Whereof, The Contin e ntal Insurance Company has caused these presents to be signed by its Vice Pres ide nt and its corporate seal to be hereto affixed on thi s 20th day of June, 202 1. The Co ntinental lns urance Company Paul T. Brutlat State of Sout h Dakota, Co unty of Minnehaha, ss: On this 2 0th day of June, 20 2 1, before me personally came Paul T. Bruflat to me known, who, being by me duly sworn, did depose and say: that he res ides in th e C ity of Sioux Falls, State o f South Dakota; that he is a Vi ce President ofThe Continental Insurance Company , a Pennsylvan ia insurance company , described in and which executed tl1e above instrument, that he knows the seal of said insurance company; that the seal affixed to the said instrume nt is s uch corporate seal; that it was so affixed pursuant to authority g iven by the Board of Directors of said insurance company and that he s igned his name thereto purs uant to like authority, and acknowledges same to be the act and deed of said insurance company . • ._ .............................. -... .............. + : M.BENT : j~NOTARY PUBLIC~: ,18{1/USOUTH OAKOTA~, , , ................................. ._ ......... ._ .... + My Co mmiss ion Exp i res Marc h 2, 2 0 26 M. Bent Notary Public CERTIFICATE I, D. Johnson, Assistant Secretary of The Continental lnsurance Company , a Pennsylvania insurance company, do hereby certify that the Power of Attorney herein above set forth is still in for ce, and furthercertify that the By-Law and Resolution of the Board of Directors of the in s urance company printed on the re ve rse he reof is still in force. ln testimony w hereof I have hereunto s ubscribed my name an d affixed the sea l of the said insurance company this 18th day of May, 2023. The Contine nta l Insurance Company D. Johnson Assistant Secretary Form F6850-4/2012 Go to www.cnasurety.com >Owner/ Obligee Services> Validate Bond Coverage, if you want to verify bond authenticity. 287 Authoriziug By-Laws and Resolutions ADOPTED BY THE BOARD OF DIRECTORS OF THE CONTINENT AL INSURANCE COMPANY This Power of Attorney is made and executed pursuant to and by authority of the following By-Law duly adopted by the Board of Directors of the Company at a meeting held on May 10, 1995. "RESOLVED: That any Group Vice President may authorize an officer to sign specific documents, agreements and instruments on behalf of the Company provided that the name of such authorized officer and a description of the documents, agreements or instmments that such officer may sign will be provided in writing by the Group Vice President to the Secretary of the Company prior to such execution becoming effective. This Power of Attorney is signed by Paul T. Bruflat, Vice President, who has been authorized pursuant to the above resolution to execution power of attorneys on behalf of TI1e Continental Insurance Company. This Power of Attorney is signed and sealed by facsimile under and by the authority of the following Resolution adopted by the Board of Directors of the Company by unanimous written consent dated the 25 th day of April, 2012. ''"Whereas, the bylmvs of the Company or specific resolution of the Board of Directors has authorized various officers (the "Authorized Officers") to execute various policies, bonds, undertakings and other obligatory instruments of like nature; and Whereas, from time to time, the signature of the Authorized Officers, in addition to being provided in original, hard copy format, may be provided via facsimile or otherwise in an electronic format ( collectively, "Electronic Signatures"), Now therefore be it resolved: that the Electronic Signature of any Authorized Officer shall be valid and binding on the Company." 288 ALL-PURPOSE ACKNOWLEDGEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF ARIZONA COUNn' OF MARICOPA )SS ) On May 25, 2023 before me, Laura Gu nd erson , Notary Public, personally appeared Glen A Tulk, Vice President -National Devel~.nla.lMer_itaoe Hames of California Inc who proved to me on the basis of satisfactory evidence to be the person(sYwnose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. This area for official notarial seal. OPTIONAL SECTION -NOT PART OF NOTARY ACKNOWLEDGEMENT CAPACITY CLAIMED BY SIGNER Though statute does not require the Notary to fill In the data below, doing so may prove invaluable to persons relying on the documents. D INDIVIDUAL 0 CORPORATE OFACER(S) IDLE(S) D PARTNER(S) □ LIMITED D ATTORNEY-IN-FACT D TRUSTEE(S) D GUARDIAN/CONSERVATOR D OTHER SIGNER IS REPRESENTING: Name of Person or Entity 0 GENERAL Name of Person or Entity OPTIONAL SECTION -NOT PART OF NOTARY ACKNOWLEDGEMENT Though the data requested here is not required by law, it could prevent fraudulent reattachment of this form. THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW IDLE OR TYPE OF DOCUMENT: NUMBER OF PAGES DATE OF DOCUMENT ----------------- SIGNER(S) OTI-IER THAN NAMED ABOVE Reproduced by first American ilUe Company 11/2007 289 DUPLICATE 4{p SHEET 1 OF 3 TRACT NO. 18106 ACCEPTED AND FILED AT THE REQUEST OF FIRST AMERICAN TITLE COMPANY NUMBER OF LOTS: 1 NUMBERED GROSS AREA: 1.286 ACRES DATE OF SURVEY: AUGUST, 2016 ALL OF TENTATIVE TRACT NO. 18106 IN THE CITY OF HUNTINGTON BEACH COUNTY OF ORANGE, STATE OF CALIFORNIA, DATE~ ~1 ']_0\':l BEING A SUBDIVISION OF A PORTION OF LOTS 15 AND 16 OF BLOCK B OF GARFIELD STREET ADDITION TO HUNTINGTON BEACH, AS PER MAP FILED IN BOOK 7, PAGES 27 AND 28 OF MISCELLANEOUS MAPS. TIME ~~~ AM FEES$ &5. 00 INSTRUMENT No2D0DOO~ BOOK ,zi. PAGE 4ur4:~ M/M HUGH NGUYEN ,N THE OFFICE OF THE COUNTY RECORDE'.1 OF ORANGE COUNTY, CALIFORNIA FOR CONDOMINIUM PURPOSES DATE OF SURVEY: AUGUST, 2016 PASCO LARET SUITER & ASSOCIATES COUNTY-CLERK RECORDER JOSEPH C. YUHAS, LS. 5211 BY &ro +N\:U\\@ WE, THE UNDERSIGNED, BEING ALL PARTIES HAVING ANY RECORD TITLE INTEREST IN THE LAND COVERED BY THIS MAP, 00 HEREBY CONSENT TO THE PREPARATION ANl..i RECURDATION OF SAID MAP, AS SHOWN WITHIN THE DISTINCTIVE BORDER LINE. WE HEREBY DEDICATE TO THE CITY OF HUNTINGTON BEACH: 1. THE EASEMENT FOR EMERGENCY AND PUBLIC SERVICE VEHICLE INGRESS ANO EGRESS PURPOSES ANO FOR MONITORING AND INSPECTING POLLUTANT REMOVAL DEVICES AS DEDICATED. 2. THE EASEMENT FOR WATER PIPELINE PURPOSES AS DEDICATED. WE HEREBY RELEASE AND RELINQUISH TO THE CITY OF HUNTINGTON BEACH: 3. THE VEHICULAR ACCESS RIGHTS TO GOTHARD STREET AS REi..EASED AND RELINQUISHED. MERITAGE HO ALIFORNIA, INC, A CALIFORNIA CORPORATION NAME: _l..v.)=-=-_\-ti' __ ~---"---~=-=..._r ___ T1TLE: \JR ~ol\>JCu'& ~n~ NOTARY ACKNOWLEDGMENT A NOTARY PUBLIC OR OTHER OFFICER COMPLETING THIS CERTIFICATE VERIFIES ONLY THE IDENTITY OF THE INDIVIDUAL WHO SIGNED THE DOCUMENT TO WHICH THIS CERTIFICATE IS ATTAC'HED, AND NOT THE TRUTHFULNESS, ACCURACY, OR VALIDITY OF THAT DOCUMENT. STATE OF CALIFORNIA) )SS COUNTY OF ORANGE ) oN P(!r,1 IS: , 2019, BEFORE ME, l(._L. Cha v <,'2.. . A NOTARY PuBuc. PERSONALLY APPEARE:.D '/iill,ot mo,,,, Qltd, L ~sf tt~ ruc..ke.t' WHO PROVED TO ME ON THE BASIS OF SATISFACTORY EVIDENCe TO BE THE PERSON(S) WHOSE NAMES(S) IS/ ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGED TO ME THAT HE/ SHE I THEY EXECUTED THE SAME IN HIS/ HER/ THEIR AUTHORIZED CAPACITY(IES), AND THAT BY HIS I HER/ THEIR SIGNATURE(S) ON THE INSTRUMENT THE PERSON(S), OR THE ENTITY UPON BEHALF OF WHICH THE PERSON(S) ACTED, EXECUTED THE INSTRUMENT. I CERTIFY UNDER PENAL TY OF PERJURY UNDER THE LAWS OF THE STATE OF CALIFORNIA THAT THE FOREGOING PARAGRAPH IS TRUE AND CORRECT. WITNESS MY HANO: SIGNATURE VY1! t.&'Qt./~ NOTARY PU~AND FOR SAID STAT NAME (PRINTED) I<. k • (' be 0..\/ (. -Z... MY PRINCIPAL PLACE OF BUSINESS IS IN Q.J' C.,, Y\ ~ :L COUNTY MY COMMISSION EXPIRES Ow~ I A NOT PUBLIC OR OTHER OFFICER COMPLETING THIS CERTIFICATE VERIFIES ONLY THE IDENTITY OF THE INDIVI WHO SIGNED THE DOCUMENT TO WHICH THIS CERTIFICATE IS ATTACHED, AND NOT THE TRUTHFULNE CCURACY, OR VALIDITY OF THAT DOCUMl::NT. COUNTY OF ORANGE ON _____ _, __________ , A NOTARY PUBLIC, PERSONALLY APPEARED ~-=-=====~:-=:-====~=-=-==-====:-:-:-:c:-:=:-=-:--:-:-:-=:.WHO PROVED TO ME ON THE BASIS OF SATISFACTOR VIDENCE TO BE THE PERSON($) WHOSE NAMES(S} IS/ ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AN KNOWLEDGED TO ME THAT HE/ SHE/ THEY EXECUTED THE SAME IN HIS/ HER/ THEIR AUTHORIZED PACITY(IES), AND THAT BY HIS/ HER/ THEIR SIGNATURE($) ON THE INSTRUMENT THE PERSON(S), ORT NTITY UPON BEHALF OF WHICH THE PERSON(S) ACTED, EXECUTED THE INSTRUMENT. I CERTIFY UNDER PENAL TY OF PERJURY UNDER THE LAWS OF THE ST OF CALIFORNIA THAT THE FOREGOING PARAGRAPH IS TRUE AND CORRECT. WITNESS MY HAND: SIGNATURE NOTARY PUB~L..,.,lC::-cl-,-N-AN~D-FOcc-R~SA-ID-ST_A_T_E __ MY PRINCIPAL PLACE OF BUSI IN ______ COUNTY NAME (PRINTED) ________ _ MY COMMISSION EXPIRES _____ ~ DEPUTY SUf<VEYOR'S STATEMENT THIS MAP WAS PREPARED BY ME OR UNDER MY DIRECTION AND IS BASED UPON A FIELD SURVEY IN CONFORMANCE WITH THE REQUIREMENTS OF THE SUBDIVISION MAP ACT AND LOCAL ORDINANCE AT THE REQUEST OF MLC HOLDINGS, INC., IN AUGUST 2018. I HEREBY STATE THAT ALL MONUMENTS ARE OF THE CHARACTER AND OCCUPY THE POSITIONS INDICATED, OR THAT THEY WILL BE SET }N SUCH POSITIONS WITHIN NINETY DAYS AFTER ACCEPTANCE OF IMPROVEMENTS AND THAT SAID MONUMENTS ARE SUFFICIENT TO ENABLE THE SURVEY TO BE RETRACED. I HEREBY ~TATE THAT THIS FINAL MAP SUBSTANTIALLY CONFORMS TO THE CONDITIONALLY APPROVE:.D TENTATIVE MAP. DATE LS 5211 COUNTY SURVEYOR'S STATEMENT I HEREBY STATE THAT I HAVE EXAMINED THIS MAP AND HAVE FOUND THAT ALL MAPPING PROVISIONS OF THE SUBDIVISION MAP ACT HAVE BEEN COMPLIED WITH AND I AM SATISFIED SAID MAP IS TECHNICALLY CORRECT. DATED THIS gm DAY OF _ _,J."-'//,"'-''J.~y' ___ _,, 2019. KEVIN R. HILLS, COUNTY SURVEY LS 6617 B p CITY ENGINEER'S STATEMENT ILY M. N ANDBER S 8402 I HEREBY STATE THAT I HAVE EXAMINED THIS MAP ANO HAVE FOUND IT TO BE SUBSTANTIALLY IN CONFORMANCE WITH THE TENTATIVE MAP, AS FILED WITH, AMENDED AND APPROVED BY THE CITY PLANNING COMMISSION; THAT ALL PROVISIONS OF THE SUBDIVISION MAP ACT AND CITY SUBDIVISION REGULATIONS HAVE BEEN COMPLIED WITH. THIS STATEMENT WILL TAKE EFFECT UPON THE DATE IN WHICH THE COUNTY OF ORANGE APPROVES THIS MAP AS TECHNICALLY CORRECT. COUNTY TREASURER -TAX COLLECTOR'S CERTIFICATE STATE OF CALIFORNIA) )SS COUNTY OF ORANGE ) I HEREBY CERTIFY THAT ACCORDING TO THE RECORDS OF MY OFFICE THERE ARE NO LIENS AGAINST THE LAND COVERED BY THIS MAP OR ANY PART THEREOF FOR UNPAID STATE, COUNTY, MUNICIPAL OR LOCAL TAXES OR SPECIAL ASSESSMENTS COLLECTED AS TAXES, EXCEPT TAXES OR SPECIAL ASSESSMENTS COLLECTED AS TAXES NOT YET PAYABLE. AND DO ALSO CERTIFY TO THE RECORDER OF ORANGE COUNTY THAT THE PROVISIONS OF THE SUBDIVISION MAP ACT HAVE BEEN COMPLIED WITH REGARDING DEPOSITS TO SECURE THE PAYMENT OF TAXES OR SPECIAL ASSESSMENTS COLLECTED AS TAXES ON THE LAND COVERED BY THIS MAP. DATED THIS 2. "' DAY OF _--4-A_;_;c,:;....;t:,:c...v-=---=ef--~• 2019. SHARI L. FREIDENRICH COUNTY TREASURER· TAX COLLECTOR CITY CLERK'S CERTIFICATE STATE OF CALIFORNIA ) )SS COUNTY OF ORANGE ) BY:~~ T EAREif.:TAX COLLECTOR I HEREBY CERTIFY THAT THIS MAP WAS PRESENTED FOR APPROVAL TO JHE CITY COUNCJL.DF HUNTINGTON BEACH AT A REGULAR MEETING THEREOF HELD ON THE L't:,/-DAY OF_=c,:~J~ IL--=r==--- 2019, ANO THAT THEREUPON SAID COUNCIL DID, av AN ORDER DULY PASSED AND ENTERED, ROVE SAID MAP AND DID ALSO ACCEPT ON BEHALF OF iHE CITY OF HUNTINGTON BEACH: 1. THE EASEMENT FOR EMERGENCY AND PUBLIC SERVICE: VEHICLE INGRESS ANO EGRESS PURPOSES ANO FOR MONITORING AND INSPECTING POLLUTANT REMOVAL DEVICES AS DEDICATED. 2. THE VEHICULAR ACCESS RIGHTS TO GOTHARD STREET AS RELEASED AND RELINQUISHED. 3. THE EASEMENT FOR WATER PIPELINE PURPOSES AS DEDICATED. AND DID ALSO APPROVE SUBJECT MAP PURSUANT TO THE PROVISIONS OF SECTION 66436(a)(3)(A) OF THE SUBDIVISION MAP ACT. DATEDTHIS qA OAYOF \.Jec..{; ROBIN ESTANISLAU CITY CLERK OF THE CITY OF HUNTINGTON BEACt-1 CITY PLANNING COMMISSION CERTIFICATE .2019. ~ ~. ~ BY:~ ~f~ a~- SEPUffC!fj l!&rl< I, URSULA LUNA-REYNOSA, SECRETARY TO THE PLANNING COMMISSION OF THE CITY OF HUNTINGTON BEACH, CALIFORNIA, DO HEREBY CERTIF-Y THAT I HAVE EXAMINED THIS MAP AND HAVE FOUND IT TO BE SUBSTANTIALLY THE SAME AS THE TENTATIVE MAP FILED WITH, TOGETHER WITH ANY AMENDMENTS THEREOF AND APPROVED BY THE CITY OF HUNTINGTON BEACH. C:ATEDTHIS 2..9+h DAYOF_AL.:·· ..... P..1..:F.1:i.L='-___ __,.2019. L1MJ?,_ G2-fl -URSULA LUNA-REYNOSA SECRETARY TO THE PLANNING COMMISSION CIT'f OJ= HUNTINGTON BE:ACH 290 DUPLICATE SHEET 2 OF 3 TRACT NO. 18106 NUMBER OF LOTS: 1 NUMBERED GROSS AREA: 1.286 ACRES DATE OF SURVEY: AUGUST, 2016 IN THE CITY OF HUNTINGTON BEACH COUNTY OF ORANGE, STATE OF CALIFORNIA, ALL OF TENTATIVE TRACT NO. 18106 BEING A $UBOIVISION OF A PORTION OF LOTS 15 AND 16 OF BLOCK B OF GARFIELD STREET ADDITION TO HUNTINGTON BEACH, AS PER MAP FILED IN BOOK 7, PAGES 27 ANO 28 OF MISCELLANEOUS MAPS, N IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA MAP REFERENCE LEGEND FOR CONDOMINIUM PURPOSES R1 • GARFIELD STREET ADDITION TO HUNTINGTON BEACH MM 7127-28 R2 • PARCEL MAP NO. 2000-207 PMB 325 / 35-37 R3-TRACTN0.16288MM83819-10 R4 • TRACT NO. 15964 MM 849 / 24-26 R5 • TRACT NO. 16497 MM 860 / 25-26 R6 • TRACT NO. 16740 MM 886 / 30-33 R7 -TRACT NO. 16846 MM 887 / 4-6 RB· PARCEL MAP NO. 2008-175 PMB 385 I 1-3 5.00' (5.00' R2} DATE OF SURVEY: AUGUST, 2016 PASCO LARET SUITER & ASSOCIATES JOSEPH C. YUHAS, LS. 5211 BOUNDARY CONTROL MAP s SCALE: 1• = 60' -- 0 60 120 180 N 89°43'01 6 W 655.47' {655.46' R2, R3, 655.48' R4, 655.47' R5, R6, R7) 0 LINE TABLE -----------------GARFIELD AVENUE 650 •47' (GARFIELD STREET R1) L 1 • N 89°43'01" W 20.00' L2 = N 00"18'28" E 89.79' (89.85' CR 2014-0636A} N 89°43101· W 600.46' (600' R1, 600.46' CF R3, R5, R6, R7) r 40' I I CENTERLINE GOTHARD STREET PER ClTY OF -'---+--HUNTINGTON BEACH ORDINANCE NO. 3102. 120' 120· co 0, c» i------EASTERL V RIGHT OF WAY GOTHARD STREET PER CITY OF HUNTINGTON BEACH ORDINANCE NO. 3102. IO ' ... 40' ' WESTERLY LINt OF BLOCK "B" R1 OLD CENTERLINE GOTHARD STREET PER R1 - 30.00' 10.00'--t-- ,~ ,g --l s It) I~ le I C') Ii --I ~ I ;.. I ~ TRACT NO. 16846 ""' MM 887 /4-6 ...... I ~ I It:) 0, I - I 0 N89"41'46°W 300.12'(300'R1,300.19'R3,300.17'R7) 280.12' (280.17' R7} -I 8 ~ d u:i GARFIELD STREET ADDITION TO --(I) a:I _ j£ >-~,Ii HUNTINGTON BEACH t; -5 i' ;;? ~ 8 ~. I ~i ~ & ~ LOT 15 ~ C'> io ~ ~ 8 g SFN ~ i ~€'-llti ·-:::------------------~!-t.u &: ~~ ;. g ~ m r ti ~Ii ~ ~ BLOCK 8 :;; V,I ~ ~,~ ~ 8 MM 7 /27-28 LOT 16 ~ C e 81 ~ Z EASTERLY RIGHT OF WAY GOTHARD STREET t co z s------PER FINAL ORDER OF CONDEMNATION z I i I u:i RECORDED 11/09199 IN DOC. 1990780474, O.R. 280.14' TRACT NO. 16288 MM 838/9-10 SFN SFN HELD RECORD ANGLE {90°:2'18" R5) TRACT NO. 16497 MM 860 /25-26 SFN 30' 30' L3 = N 89°39'14" W 30.00' (30.00'R5) L4 = N 00°18'28" E 99.53' (99.53' CF R5} L6 = N 89~36'16" W 26.39' (26.41' RB) CURVE TABLE C1 = L60.97' R290.00' 012°02'46" (L61.07' R290.00' 012°03'58" R6) NOTE SEE SHEET 3 FOR CONTROL DIAGRAM, EASEMENTS, BASIS OF BEARINGS AND DATUM STATEMENT. ~ UJ• 300.14' (300' R1, 300.14' R5, R6, R7) .._, ;; N 89°42'54• W , t:: I 0 300.16' (300' R1, 300.17' R5, R6, R7) ~ 600.30' (600' R1, 600.31' CF R5, CF R6, CF R7) @ ~ S 49• 12'42" E 0.55' /; / r : s ee·1•·,s· w •• 36· / ,~ i TRACT NO. 16740 I ,; l MM 886/30-33 / LEGEND &, I;,.. "' ll i 40• I 4~• 0 20-I 20· I I I I I A FOUND OCS GPS HORIZONTAL CONTROL STATION MONUMENT PER RECORDS ON FILE IN THE OFFICE OF THE ORANGE COUNTY SURVEYOR e FOUND MONUMENT AS INDICATED ( ) RECORD BOUNDARY DATA AS INDICATED © SET 2" X 24" IRON PIPE ANO TAG LS 5211 ON A 2.00' BY 2.00' OFFSET PERPENDICULAR TO PROPERTY LINE ffi SET LEAD PLUG AND BRASS TAG LS 5211 ON A OFFSET AS NOTED I I I PARCEL MAP NO. 2000-207 PMB 325/35-37 SFN CF (R) ----- --------- --------- .I.I.I.I.I.I.I. SEARCHED, FOUND NOTHING CALCULATED FROM RADIAL PROPERTY LINE RIGHT-OF-WAY LINE CENTERLINE ADJOINING PROPERTY LINE TIE LINE / REFERENCE LINE EASEMENT LINE RELINQUISHMENT OF ACCESS RIGHTS / /1 MONUMENT NOTES & ESTABLISHMENT NOTES: 0 FOUND SPIKE & WASHER LS 3347, FLUSH, PER~. ACCEPTED AS POINT OF CURVATURE (BC) OF "NEW' GOTHARD STREET PER CITY OF HB ORDINANCE: NO. 3102 0 FOUND 2" IRON PIPE W/ TAG, NO NUMBER, IN WELL MONUMENT, DOWN 1.3', PER R2, ACCEPTED AS 5.00' OFFSET TO CENTERLINE GOTHARD STREET. 0 FOUND 2" IRON PIPE WI TAG (ILLEGIBLE) IN WELL MONUMENT, DOWN 1.2', PER R2, ACCEPTED AS 0 0 CENTERLINE INTERSECTION OF GARFIELD AVENUE ANO HOLLY STREET. FOUND 2" IRON PIPE LS 3347, DOWN 0.7', PER R3, ACCEPTED AS INTERSECTION OF HOLLY LANE CENTERLINE & MAIN STREET TANGENT LINE. ESTABLISHED CENTERLINE INTERSECTION OF GOTHARD STREET WITH GARFIELD AVENUE AT RECORD DISTANCE OF 6.00' PER R2. 0 FOUND SPIKE & WASHER LS 3347, FLUSH, PER~. ACCEPETEO AS SOUTHWEST CORNER LOT 1 TRACT 0 16740. FOUND LEAD & TACK & TAG LS 7707 IN LIEU OF 2• IRON PIPER & TAG LS 7707 PER R6, ACCEPTED AS NORTHWEST CORNER LOT 1 TRACT 16740. TO SE DESTROYED DURING CONSTRUCTION ANO REPLACED PER LEGEND. 0 FOUND LEAD & TACK & TAG LS 7707 IN LIEU OF 2• tRON PIPE PER R7, ACCEPTED AS SOUTHWEST CORNER LOT 1 TRACT 16846. TO BE DESTROYED DURING CONSTRUCTION AND REPLACED PER LEGEND. 0 e 0 @ @) @ ~ 6 @ FOUND 2ff IRON PIPE LS 3347, FLUSH, PER R3, ACCEPTED AS NORTHEAST CORNER LOT 15. TO BE DESTROYED DURING CONSTRUCTION AND REPLACED PER LEGEND. FOUND LEAD & TACK & TAG LS 7707 IN LIEU OF 2• tRON PIPE LS 7707 PER R5, S 49"12'42• E 0.55' OF SOUTHEAST CORNER OF LOT 16 AS ESTABLISHED HEREON. FOUND LEAD& TACK& TAG LS 7707 IN LIEU OF2• IRON PIPE LS7707PERR5, S 86°15'18*W 6.36'0F SOUTHEAST CORNER OF LOT 16 AS ESTABLISHED HEREON. FOUND GIN SPIKE ANO WASHER LS 7707, FLUSH, PER R5, ACCEPTED AS POINT ON CENTERLINE OF HOLLY AVENUE. ESTABLISHED NORTHEAST CORNER LOT 1 OF TRACT 16947 BY RECORD ANGLE ANO DISTANCE FROM MONUMENT NO. 12 HEREON PER R5. ESTABLISHED AT RECORD DISTANCE OF 99.53' PER RS, FROM ESTABLISHED NO. 13 HEREON. ESTABLISHED AT RECORD DISTANCE OF 300.14' PER R5, FROM MONUMENT NO. 7 HEREON. FOUND 1" IRON PIPE, OPEN, DOWN 0.1', NO REFERENCE, ACCEPTED AS NORTHWEST CORNER OF LOT 1 OF TRACT NO. 16846, SET TAG LS 5211. FOUND LEAD & TACK& TAG LS 7707, FLUSH IN LIEU OF 2" IRON PIPE TAGGED LS 7707 PER RS. 291 DUPLICATE SHEET 3 OF 3 TRACT NO. 18106 NUMBER OF LOTS: 1 NUMBERED GROSS AREA: 1.286 ACRES IN THE CITY OF HUNTINGTON BEACH COUNTY OF ORANGE, STATE OF CALIFORNIA, DATE OF SURVEY: AUGUST, 2016 ALL OF TENTATIVE TRACT NO. 18106 BEING A $UBDIVISION OF A PORTION OF LOTS 15AND 16 OF BLOCK B OF GARFIELD STREET ADDITION TO HUNTINGTON BEACH, AS PER MAP FILED IN BOOK 7, PAGES 27 AND 28 OF MISCELLANEOUS MAPS, NOTE IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA FOR CONDOMINIUM PURPOSES DATE OF SURVEY: AUGUST, 2016 PASCO LARET SUITER & ASSOCIATES JOSEPH C. YUHAS, LS. 5211 EASEMENT MAP FOR LEGEND, REFERENCES AND MONUMENT NOTES SEE SHEET 2 OF 3. EASEMENTS DEDICATED HEREON: BASIS OF BEARINGS: K CONTINUOUS GPS STATION (BLSA) t.i w a:: I- CJ) C a: < :c I- 0 (!) INDICATES AN EASEMENT FOR EMERGENCY AND PUBLIC SERVICE VEHICLE INGRESS AND EGRESS PURPOSES AND FOR MONITORING AND INSPECTING POLLUTANT REMOVAL DEVICES, DEDICATED HEREON TO THE CITY OF HUNTINGTON BEACH. INDICATES A RELINQUISHEMENT OF VEHICULAR ACCESS RIGHTS TO AND FROM GOTHARD STREET, RELINQUISHED HEREON TO THE CITY OF HUNTINGTON BEACH. INDICATES A PIPELINE EASEMENT FOR WATER PIPELINE PURPOSES, DEDICATED HEREON TO THE CITY OF HUNTINGTON BEACH. THE BEARINGS SHOWN HEREON ARE BASED ON THE BEARING BETWEEN OCS HORIZONTAL CONTROL STATION GPS NO BLSA AND STATION GPS NO TRAK BEING N 45°06'45" W PER RECORDS ON FILE IN THE OFFICE OF THE ORANGE COUNTY SURVEYOR. DATUM STATEMENT: COORDINATES SHOWN ARE BASED ON THE CALIFORNIA COORDINATE SYSTEM (CCS83), ZONE VI, 1983 NAO, (2007.00 EPOCH OCS GPS ADJUSTMENT) ALL DISTANCES SHOWN ARE GROUND UNLESS OTHERWISE NOTED. TO OBTAIN GRID DISTANCES MUL TIPLV GROUND DISTANCE BY 0.99996945 (COMBINED SCALE FACTOR SHOWN HEREON AT POINT A, PROJECT SPECIFIC) §' N: 2239163.452 5 \ E: 6021325.681 RI $/ \ P.> ii \-i, I; \~l ~/ \~ ~-, ~-<J'. & I 'P.\ i. v-/ POINT 'A' • ~\ '& ~ N: 2197536.88 \t \t .cb / E: 6029111.71 "\Jl -~· El: 71.71 (NAD83) ti \ IA 0/:? I CSF: 0.99996947 ~ \ \ s ~\t, ~ N 89"41'4E>"W '-\'= VA\~ 1;\ -~ ,t,~B~ \\\ ·.?•~ \~ 6'.te~ \ ~ ·Os>---\ G~0'-.. \ 140o> LOT1 CONTROL DIAGRAM SCALE:NONE ·(¼;,~ \ G~~ o~~ CONTINUOUS GPS STATION (TRAK) ~) ~ c::i ~ w • ~ t'l r-. ... • 8 z SCALE: 1" = 20' .,. ___ I i 0 20 40 60 LINE TABLE L 1 = N 00"17'10" I:: 2.97' L2 = N 89°42'50" W 14.00' L3 = N 89"42'50" W 17.00' L4 = N 89°42'50" W 17.00' L5 = N 89"42'50" W 14.00' L6 = N 00°17'10" E 1.00' L7 • N 89°42'29" W 4.00' L8 -N 00"17'31" E 16.00' L9 - N 89°42'29" W 4.00' N: 2171991.673 E: 6088762.071 N 89°42'29" W N 89°42'50• W 34.00' r -2s.oi" -7 N 00·11·10· e a.oO' j------'"i:"1 ,_ L2 I I I L3.14' --7\ I I N 89°42'50" W 3.00' I R2.oo• I I I D90"00'00" I I I I I I I I I I I l--25.00' --1 I r.r,I C!J IV') ~II ~, ,~ co ~, ,~ :1 ~I I~ ~I ~I li-i ~. I t=1 I~ LOT 1 ool 8 I I 8 1.286 AC. GROSS z I I z 1.286 AC. NET. z '"'"I•----47.00' I I I I I I I I I I I I I I I I I I I I L3.14' I R200' ii D90°00'00" "\.J... ---...II f' L3 I I I I / L21.59', L15.71' I I L15.71' L26.70' t / R25.00 R10.00' \+ +; R10.00' R17 00' / I I , 049°20•10• 059•59•35• 1 , 000°00•25• Da9•5s•56" "\./ I~ I~ '...._ _ + ____ N 89°42'54" W 62.12'_ _ .,, ...._ N 89"42'54" W 85.01' .,,, / --+ +----7----------------+-lw lo ,~ ,r- e 18z ;B I ---+----------------------------------J----------------+ i ,,,......-'\.._ L2 1.58 , J, N89°42'54"W 192.14' -....... , R25.00' r L7 L26.70' /' L3.14' _ll-_ L4 -" D49"27'26" . 7 R17.00' \ R2.00' : \ "' ~ I 090•00•04• \ 090•00•00• 1 g -, 1-,,.,9. ~ ~ 15 t. 47.oo· -I~ l "o<?o. ~ ~ I-J;7 I~ I~ ~ M i---L:.J 0)1~ 1? I ~ e: _J ~11--I,._ I • L9 ~ r' r" 8 (Q I 8 L3.14' I 8 SEE DETAIL 1 0 ... ~~w __ y :z ;;i N 89°42'50" W 3.0~' I z R2.00' ~ 12 N89"42'54"W 280.14' --J4-N00°17'10HE $.00' --------L5 N 89°42'50" W 34.00' L6 DETAIL 1 SCALE: NONE N 89°42'54" W 280.14' w b .... ;... -8 z Tract 18106 Acceptance of Public Improvements and Release of Surety Bonds Department of Public Works 292 .-...::::-__ _ - --------------.-= ------ ~ BACKGROUND •On December 12, 2017, the Huntington Beach Planning Commission conditionally approved Conditional Use Permit No. 17-010 and Tentative Tract Map No. 18106, authorizing the construction of Tract 18106, which includes development of a 1.3-acre site to subdivide into 21 attached condominium townhomes, along with onsite/offsite utility upgrades and street improvements along Gothard Street. •On July 1, 2019, City Council approved execution of the Subdivison Agreement between the City and Meritage Homes of California (owner/developer), and also accepted the project’s required surety bonds as follows: Faithful Performance Bond No. SU 1148547, Labor and Materials Bond No. SU 1148547, and Monument Bond No. SU 1148548. 293 LOCATION MAP 294 GARFICJLD A\IE NUIE SITE CLAY AVENUE VICINITY MAP ! NO SCALE' 295 NEED/WHY/BENEFITS •The developer has completed all required public improvements and is now requesting release of the aforementioned surety bonds, pursuant to California Government Code Section 66499.7(a). •The City Engineer has determined that the public improvements have been constructed in substantial compliance with the approved project plans and specifications and recommends acceptance of these improvements. 296 DETAILS •The constructed public improvements include: •Curb, gutter, and sidewalk along the project’s Gothard Street frontage •New street light on Gothard Street •A Guarantee and Warranty Bond has been submitted by the Developer to provide a one-year warranty period to the City for the subject public improvements. 297 RECOMMENDATION A)Accept the improvements constructed and dedicated for public use with Tract 18106, and instruct the City Clerk to record the Notice of Acceptance of Public Improvements with the Orange County Recorder; and, B)Accept Guarantee and Warranty Bond No. 30190068; the security furnished for guarantee and warranty of public improvements, and instruct the City Clerk to file the bond with the City Treasurer; and, C)Instruct the City Clerk to notify the developer, Meritage Homes of California, of this action, and the City Treasurer to notify the Surety, Arch Insurance Company (Faithful Performance, Labor & Materials, Monument) and The Continental Insurance Company (Guarantee & Warranty), of this action. 298 Questions? 299 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-136 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Eric G. Parra, Interim City Manager VIA:Chau Vu, Director of Public Works PREPARED BY:Chris Davis, Senior Management Analyst Subject: Approve the West Orange County Water Board (WOCWB) FY 2024-25 Budget in the amount of $5,365,300 Statement of Issue: The City is a member of the West Orange County Water Board (WOCWB) Joint Powers Authority. Each WOCWB member agency needs to approve the proposed WOCWB FY 2024-25 Budget via their governing bodies prior to adoption by the Board as a whole. Financial Impact: Huntington Beach’s proportional share of the proposed WOCWB FY 2024-25 Budget is $1,047,465. This amount consists of the Operating Budget ($103,953), Cathodic Protection ($561,000), and the OC-35 Relocation Project Loan Payment ($382,512). The proposed FY 2024-25 operating budget amounts for operations, cathodic protection, and debt service are included in Water Fund business units 50685801, 50790016, and 50785201, respectively. Recommended Action: Approve the WOCWB proposed FY 2024-25 Budget and the City of Huntington Beach proportional share of $1,047,465. Alternative Action(s): Do not approve the proposed WOCWB FY 2024-25 Budget and direct staff accordingly. Analysis: The WOCWB is a Joint Powers Authority comprised of the cities of Garden Grove, Seal Beach, Westminster, and Huntington Beach. The WOCWB was created to operate and maintain large City of Huntington Beach Printed on 3/13/2024Page 1 of 2 powered by Legistar™300 File #:24-136 MEETING DATE:3/19/2024 diameter pipelines shared between the member agencies. Huntington Beach’s proportional share is 56.1% of the system. The WOCWB is governed by five (5) elected officials, one (1) each from the cities of Garden Grove, Seal Beach and Westminster and two (2) from the City of Huntington Beach. Mayor Gracey Van Der Mark and Mayor Pro Tem Pat Burns represent the City of Huntington Beach. The General Manager of the WOCWB (Huntington Beach, Public Works Deputy Director-Utilities) submits a proposed budget to the Board for review at mid-year. Afterward, each WOCWB member agency needs to approve the proposed budget via their governing bodies prior to adoption by the Board as a whole before the new fiscal year. The proposed WOCWB FY 2024-25 Budget is $5,365,300. This includes $185,300 for the operating budget which includes maintenance, electricity and administrative costs (legal, insurance and audit fees); $480,000 in debt service for the OC-35 realignment project reimbursement agreement with OCTA, and the year 4 contribution of $1,000,000 for the Cathodic Protection Program to extend the lifespan of both the OC-9 and OC-35 transmission mains. The FY 2024 -25 budget also authorizes funding in the amount of $3,700,000 for construction of the OC-9 Cathodic Protection program. This amount includes $3,000,000 previously collected from member agencies over the past three (3) years, plus $1,000,000 requested in FY 2023-24. The Board reviewed the proposed budget at the January 17, 2024 regular meeting and moved to recommend that each agency approve their share of the budget. Upon approval by each agency, the Board will consider approval of the budget at their next scheduled meeting on April 17, 2024 . Environmental Status: This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Strategic Plan Goal: Non Applicable - Administrative Item For details, visit www.huntingtonbeachca.gov/strategicplan <http://www.huntingtonbeachca.gov/strategicplan>. Attachment(s): 1. WOCWB Proposed FY 2024-25 Budget 2. WOCWB Proposed FY 2024-25 Budget Member Agency Contributions 3. Cathodic Protection Program Timeline 4. Power Point City of Huntington Beach Printed on 3/13/2024Page 2 of 2 powered by Legistar™301 WEST ORANGE COUNTY WATER BOARD PROPOSED FISCAL YEAR 2024/25 BUDGET FY 23/24 Approved FY 24/25 Proposed ACCOUNT NUMBER ACCOUNT DESCRIPTION OPERATING EXPENSES 50885101.61200 Electricity $4,500 $4,500 50885101.64620 Contracts for Repairs and Maintenance $30,000 $35,000 PLC Design for SCADA $25,000 $70,000 Vault (2) Refurbishment $20,000 $0 50885101.69345 Auditing $5,500 $5,800 50885101.69375 Attorney Fees $2,500 $2,500 50885101.73010 General/Liability Insurance $9,500 $10,000 50885101.75400 Board Stipend Expense $2,500 $5,000 50885101.79100 Contingency $2,500 $2,500 50885101.82100 OC-35 Turnout Rehabilitation Design $0 $50,000 50885101.82100 Cathodic Protection $1,000,000 $1,000,000 OPERATING EXPENSES $1,102,000 $1,185,300 NON OPERATING EXPENDITURES 50885102.88010 Debt Service1 $475,000 $480,000 SUBTOTAL $1,577,000 $1,665,300 50885103.82100 Cathodic Protection Design2 $300,000 50885103.82100 Cathodic Protection Construction $3,700,000 TOTAL $5,365,300 1Cities of Huntington Beach and Seal Beach for OC-35 realignment project loan 2 Cathodic Protection Project Funds will come from funds already collected for the project beginning in FY 2020-21, including the current request, and will not increase the total budget request. January 10, 2024 302 FISCAL YEAR 2024/25 PROPOSED BUDGET AGENCY CONTRIBUTIONS ACCOUNT NUMBER AGENCY OWNERSHIP PERENTAGE FY 24/25 COST 50800508.46610 Huntington Beach 56.1 $664,953 50800508.46620 Garden Grove 4.2 $49,783 50800508.46630 Seal Beach 14.3 $169,498 50800508.46640 Westminster 25.4 $301,066 Totals 100.0 $1,185,300 50800508.46610 Huntington Beach 56.1 $382,512 50800508.46620 Garden Grove*4.2 $0 50800508.46630 Seal Beach 14.3 $97,488 50800508.46640 Westminster*25.4 $0 Totals 100.0 $480,000 50800508.46610 Huntington Beach 56.1 $1,047,465 50800508.46620 Garden Grove*4.2 $49,783 50800508.46630 Seal Beach 14.3 $266,986 50800508.46640 Westminster*25.4 $301,066 Total Budget $1,665,300 Operating Budget (Including Cathodic Protection) Sixth Year OC-35 Relocation Project Loan Payment Total Adopted Budget *Garden Grove and Westminster have paid off their portions of the loan January 10, 2024 303 Cathodic Protection Program Timeline FY 20/21 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY25/26 FY26/27 FY 27/28 Total Total Member Agency Contribution $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $8,000,000 OC-9 Design -$300,000 -$300,000 OC-9 Construction1 -$3,700,000 -$3,700,000 OC-35 Design -$300,000 -$300,000 OC-35 Construction1 -$3,700,000 -$3,700,000 1 Design and Contruction cost estimates were made when the program was proposed in the FY 20/21 budget. Costs are anticipated to increase due to recent inflation. A more accurate estimate will be available after the OC-9 design is complete. 304 Approve West Orange County Water Board Fiscal Year 2024/25 Budget March 19, 2024 305 WOCWB • Joint Powers Authority that owns and operates OC-9 and OC-35 Water Transmission mains • Five (5) member board – Mayor Gracey Van Der Mark and Mayor Pro Tem Pat Burns representing Huntington Beach • Proportional share: • Huntington Beach (56.1%) • Garden Grove (4.2%) • Seal Beach (14.3%) • Westminster (25.4%) • Each Member Agency must approve the budget before the WOCWB as a whole can approve the budget in April 306 WOCWB FY 2024/25 Budget • FY 2024/25 Total WOCWB budget = $5,365,300 • Operating Budget = $185,300 • Debt Service = $480,000 • Cathodic Protection Contribution = $1,000,000 • Cathodic Protection-Construction = $3,700,000 (includes $1,000,000 in FY 23/24 plus $3,000,000 collected each of prior three years • Huntington Beach share = $1,047,465 (56.1%) 307 WOCWB FY 2024/25 Budget • Budget presented at January 17, 2024 meeting • Requested each agency to approve before adoption by the Board at the April 17, 2024 meeting 308 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-197 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Eric G. Parra, Interim City Manager VIA: Travis K. Hopkins, Assistant City Manager PREPARED BY:Catherine Jun, Deputy City Manager Subject: Request authorization to issue a Request for Proposals for Managed Library Services for the Huntington Beach Public Library system Statement of Issue: Consider issuing a Request for Proposals (RFP) to identify a third-party contractor to operate the Huntington Beach Public Library (HBPL) system on behalf of the City. An agreement with any such contractor will be presented to City Council for consideration at a future date. Financial Impact: Not applicable Recommended Action: A) Authorize staff to issue a Request for Proposals for Managed Library Services for the Huntington Beach Public Library system and return to City Council with an agreement for consideration; and B) Direct staff to begin a meet and confer process with affected labor associations to discuss this potential opportunity. Alternative Action(s): Do not approve the recommended action, and direct staff accordingly. Analysis: Earlier this year, the City was approached by a third-party contractor proposing to deliver managed library services for HBPL system. The contractor stated they would provide the same level of services that exists today and at a substantial annual cost savings for the City. City of Huntington Beach Printed on 3/13/2024Page 1 of 2 powered by Legistar™309 File #:24-197 MEETING DATE:3/19/2024 During staff’s preliminary review of the proposal, they learned there may be other contractors that provide similar services. Should the City Council wish to consider outsourcing, staff recommends issuing an RFP to identify a third-party contractor to operate the HBPL system at equal or higher operating levels. Initiating this RFP process does not commit the City Council to outsourcing. Rather, it provides the City Council with a proposed agreement with a third-party contractor for further consideration at a future date. Furthermore, outsourcing library operations will not cede ownership of the HBPL system to the contractor. The City would continue to retain ownership of the HBPL system and facilities, while the contractor oversees day-to-day operations at the City’s direction. The RFP is intended to identify a third-party contractor and negotiate the terms of an agreement. This agreement would then be presented to City Council at a future meeting. If directed to issue an RFP, staff will also begin a meet and confer process with affected labor associations to discuss this potential opportunity. Environmental Status: This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Strategic Plan Goal: Non Applicable - Administrative Item For details, visit www.huntingtonbeachca.gov/strategicplan <http://www.huntingtonbeachca.gov/strategicplan>. City of Huntington Beach Printed on 3/13/2024Page 2 of 2 powered by Legistar™310 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-195 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Eric G. Parra, Interim City Manager VIA:Sunny Han, Chief Financial Officer PREPARED BY:Sunny Han, Chief Financial Officer Subject: Year-End Audit Results for the FY 2022/23 Annual Comprehensive Financial Report (ACFR), Fiscal Year 2023/24 Budget Update, and Fiscal Year 2023/24 Mid-Year Budget Adjustments Statement of Issue: Fiscal Year 2022/23 Year-End Audit Results The City received an Unmodified (Clean) Audit Opinion for the City’s Fiscal Year (FY) 2022/23 Annual Comprehensive Financial Report (ACFR), which is the 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 37th consecutive year. Included as an attachment is the FY 2022/23 ACFR to receive and file. Fiscal Year 2023/24 Budget Update and Mid-Year Adjustments The Finance Department has prepared a mid-year budget review for the fiscal year that began on July 1, 2023. 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: Fiscal Year 2023/24 Mid-Year Adjustments 1. General Fund (100) budget adjustments are requested as follows: a. Community & Library Services Department - funding for contract class instructors ($246,187) offset by additional recreation fee revenues for a net zero impact. b. Fire Department - funding for Fire Strike team reimbursement costs ($480,000) offset with strike team reimbursement revenues for a net zero impact and emergency medical supplies ($117,000) offset with emergency medical services revenue for a net zero impact. City of Huntington Beach Printed on 3/13/2024Page 1 of 4 powered by Legistar™311 File #:24-195 MEETING DATE:3/19/2024 2. The Public Works Department is requesting additional appropriations of $7,350 in the Local Road Safety Plan (LRSP) Grant Fund 1272 offset with additional grant revenue for a net zero impact. There are sufficient revenues, cash, and/or fund balances to support the above referenced adjustments. Recommended Action: A) Receive and File the FY 2022/23 Annual Comprehensive Financial Report and other auditor- issued reports; and, B) Approve mid-year budget adjustments to the FY 2023/24 Revised Budget in the funds and by the amounts contained in Attachment 3. 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 and potential loss of grant funding. Analysis: Fiscal Year 2022/23 Year-End Audit Results Auditing firm Davis Farr LLP (Auditors) audited the City’s financial statements and internal control for the FY 2022/23. The City received an Unmodified (Clean) Audit Opinion for the FY 2022/23 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 2023/24 Budget Update The City ended FY 2022/23 with a $3.7 million General Fund surplus, after year-end transfers of $12.62M to partially fund unfunded liabilities (Workers’ Compensation, General Liability, Retirement Supplemental) and Infrastructure needs. For FY 2023/24, after 29 months of post-pandemic jobs growth in California, employment growth was flat in September 2023 and declined in October 2023. California consumers and businesses are spending less, while also shifting their spending from taxable goods, such as new car sales, to nontaxable items, such as travel, leisure, and entertainment. As a result, FY 2023/24 General Fund sales tax revenues are projected to decline by approximately $1.3 million. Utility tax and franchise fee revenues are also lower than the prior year due to one-time natural gas spikes during FY 2022/23. In City of Huntington Beach Printed on 3/13/2024Page 2 of 4 powered by Legistar™312 File #:24-195 MEETING DATE:3/19/2024 revenues are also lower than the prior year due to one-time natural gas spikes during FY 2022/23. In spite of these challenges, property tax revenues, the City’s largest General Fund revenue source (36.7%), continues to remain strong, with revenue projected to be slightly above the adopted budget due to increased supplemental property taxes. The City is expected to end FY 2023/24 with a $2.0 million surplus, including the mid-year budget items proposed within this report. General Fund Five-Year Financial Forecast: 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, 2023. 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 FY 2022/23 investment return of 6.1 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 three 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, natural disaster losses and growing number of insurers withdrawing from California and from writing public entity liability. Fiscal Year 2023/24 Mid-Year Adjustments The FY 2023/24 Budget was adopted by City Council on June 26, 2023, for the fiscal year beginning July 1, 2023. 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 that will support the requested adjustments in the General Fund. The Other Funds adjustment will be funded by available grant revenue. City of Huntington Beach Printed on 3/13/2024Page 3 of 4 powered by Legistar™313 (in thousands) •1ntmwm111mni11 Revenue (Recurring) 281,337 282,969 287,221 294,366 301,718 309,310 Revenue (One-Time)* 31,380 2,276 Planned Use of Re serves 8,804 Total Sources of Funds 312,717 294,049 287,221 294,366 301,718 309,310 Expenditures le ss UAL 254,720 264,960 269,807 281,813 290,201 297,443 CalPERS UAL 4,891 5,000 5,223 8,981 12,727 16,458 POB Payment 13,663 13,276 13,010 12 ,750 12,537 12,537 One-Time Expenditures 18,721 8,804 Total Expenditures 291,995 292,040 288,040 303,544 315,465 326,438 Restricted Reserves 16,978 Surplus/(Deficit) $3,744 $2,009 ($819) ($9,178) ($13,747) ($17,128) File #:24-195 MEETING DATE:3/19/2024 General Fund The Community & Library Services Department is requesting appropriations to meet increased demand for recreational and Art Center class contract instructors ($246,187). These costs will be offset by additional recreation fee revenues, resulting in a net zero impact to 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 14.57% administrative rate applied to these allowable expenditures. The Fire Department has incurred $480,000 in Strike Team expenditures for FY 2023/24 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 $480,000, 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 $117,000 for emergency medical supplies. Additional emergency medical service revenues are anticipated to offset the added costs. Other Funds Local Road Safety Plan (LRSP) (Fund 1272) The City was awarded $147,000 in State grant funds in September 2021 for development of a Local Road Safety Plan. To date, $139,650 of the total grant award has been appropriated. Staff is requesting appropriation of the remaining grant funds in the amount of $7,350. There are sufficient offsetting grant revenues, resulting in a net zero impact. Environmental Status: Not applicable Strategic Plan Goal: Non Applicable - Administrative Item Attachment(s): 1. FY 2022/23 Annual Comprehensive Financial Report (ACFR) 2. Other Auditor Issued Reports 3. Fiscal Year 2023/24 Recommended Mid-Year Adjustments 4. FY 2023/24 Budget Update and Mid-Year Budget Adjustments Presentation City of Huntington Beach Printed on 3/13/2024Page 4 of 4 powered by Legistar™314 CITY OF HUNTINGTON BEACH California Annual Comprehensive Financial Report For The Fiscal Year Ended June 30, 2023 315 HUNTINGTON HACH CIVIC CENTER CITY OF HUNTINGTON BEACH, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2023 Prepared by the Finance Department 316 THIS PAGE INTENTIONALLY LEFT BLANK 317 INTRODUCTORY SECTION 318 THIS PAGE INTENTIONALLY LEFT BLANK 319 i City of Huntington Beach Annual Comprehensive Financial Report For the Year Ended June 30, 2023 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...................................................................................................................... 1-4 Management’s Discussion and Analysis (Required Supplementary Information) ....................................... 5-21 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 .............................................................................................................. 34-117 Required Supplemental Information: Notes to Required Supplementary Information .................................................................................. 120 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget And Actual – General Fund ............................................................................................................. 121 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget And Actual – Grants Special Revenue Fund ................................................................................... 122 Schedule of Changes in the Net Pension Liability and Related Ratios .............................................. 123-125 Schedule of Changes in the Net OPEB Liability and Related Ratios ................................................. 126 Schedule of Contributions .................................................................................................................. 127-129 Schedule of Money Market Weighted Rate of Return ........................................................................ 129 Schedule of Contributions for the OPEB Plan .................................................................................... 130 320 ii FINANCIAL SECTION (Continued) Supplementary Information: Combining and Individual Fund Statements and Schedules: Combining Balance Sheet – Other Governmental Funds .................................................................. 133-136 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Other Governmental Funds ............................................................................................................ 137-140 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Other Governmental Funds ........................................................................... 141-149 Statement of Net Position – Internal Service Funds ........................................................................... 151 Statement of Revenues, Expenses, and Changes in Fund Net Position Internal Service Funds .................................................................................................................. 152 Statement of Cash Flows – Internal Service Funds ........................................................................... 153 Combining Statement of Fiduciary Fund Assets and Liabilities.......................................................... 155 Combining Statement of Changes in Fiduciary Net Position .............................................................. 155 STATISTICAL SECTION Net Position by Component – Last Ten Fiscal Years .................................................................................. 157-158 Changes in Net Position – Last Ten Fiscal Years ....................................................................................... 159-160 Fund Balances – Governmental Funds – Last Ten Fiscal Years ................................................................ 161 Changes in Fund Balances – Governmental Funds – Last Ten Fiscal Years ............................................. 163-164 Assessed and Actual Valuation of All Taxable Property (Excluding Redevelopment Agency) - Last Ten Fiscal Years .............................................................................................................................. 165 Property Tax Rates – All Direct and Overlapping Government Tax Rate 04-001 Largest Area in City – Last Ten Fiscal Years ........................................................................................... 165 Property Tax Levies and Collections – Last Ten Fiscal Years .................................................................... 166 Top Ten Property Tax Payers – Current Year and Nine Years Ago ............................................................ 167 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ..................................................................... 169-170 Legal Debt Margin – Last Ten Fiscal Years ................................................................................................ 171 Statement of Direct and Overlapping Bonded Debt .................................................................................... 172 Principal Private Employers – Current Year and Nine Years Ago ............................................................... 173 Full-Time Actual and Budgeted City Employees by Function/Program– Last Ten Fiscal Years .................. 174 Operating Indicators by Function/Activity – Last Ten Fiscal Years .............................................................. 175-176 Capital Assets Statistics by Function/Activity .............................................................................................. 177 321 iii CITY OF HUNTINGTON BEACH December 21, 2023 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, 2023. 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 independent auditing firm 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 Single Audit Report 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 ensuring 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 Generally Accepted Accounting Principles (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, 2023. 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. 322 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 194,310 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 #21 for “Best-Run City” in the State of California by WalletHub (June 2023). Huntington Beach was also ranked one of the top ten “Best City for People with Disabilities” by WalletHub (September 2023). The City boasts an annual median household income of $104,728, 52 percent higher than the median household income for the United States, 25 percent higher than the State of California and 4 percent higher than Orange County. In addition, 45 percent of its residents have a college education. There are over 103,000 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 1002 full-time 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, Canadian Forces Snowbirds, 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 over a five-day period that includes a Main Street Block Party with free 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, International Surfing Association (ISA) World Surfing Games, and other events. In November 2023, the inaugural Darker Waves beachfront music festival featuring New Order, Tears for Fears, the B-52s, and others, performed to a sold-out crowd of 30,000. 323 v Economic Condition and Outlook Coming off the heels of the COVID-19 pandemic, there are several reasons to reflect on the measures taken over the past couple years to protect the City’s finances. Through the leadership and support of the City Council, the City implemented significant cost saving measures, including a Citywide Separation Incentive Program and reorganization plan, refinancing the City’s pension debt, and proactive Budget Balancing Plan. Looking ahead, economic indicators point to recession. Although home sales during the pandemic resulted in a $2.9 billion increase in assessed property valuations, supply chain shortages and inflationary pressures on normal business activities set the tone for economic conditions within the next few years. Increases in utility rates such as electricity and gas contribute to a rise in projected Franchise and Utility Users Tax revenues, which help to balance the overall economic impact. The City of Huntington Beach continues to thrive together through the motto “OneHB,” which reflects the City’s commitment to facing the potential upcoming recession created by inflationary conditions and supply chain shortages guided by the following principles: x To stay committed to being One Team: working together to serve the people of Huntington Beach exceptionally to inspire pride in the community. x Work to have One Focus: to stay fanatical about achieving municipal excellence by being active caretakers of our unique, people-centric HB culture. x Continue to pursue One Goal: to ensure that HB continually improves its standing as a premier coastal community as measured through the health of our people, our organization, our infrastructure, and our community. 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 2023/24 assessed property value grew 5.6 percent to $53.1 billion. This solid performance, coupled with steady year-over- year growth, reflects a stable property tax base that can weather steep declines in real estate markets. Over 60 percent of parcels have an assessed valuation (AV) base year prior to 2004, representing a significant amount of untapped AV. For Fiscal Year 2021/22, secured property tax revenue collections totaled $62.9 million. For Fiscal Year 2022/23, secured property taxes totaled $68.5 million, reflecting a 9 percent increase. 324 vi Sales Tax Huntington Beach’s business community is well-diversified with no single industry or business dominating the local economy. Local businesses include aerospace and high technology, petroleum, manufacturing, computer hardware and software, financial and business services, hotel and tourism, automobile services, large-scale retailers, and surf apparel. The City’s diverse sales tax base makes it a stable source of revenue and mitigates the impact of industry- specific downturns as shown below. Autos and Transportation 22% Building and Construction 7% Business and Industry 9% Fuel and Service Stations 8% General Consumer Goods 18% Restaurants and Hotels 15% State and County Pools 16% Other 5% City of Huntington Beach Composition of Sales Tax Revenue Fiscal Year 2022/23 325 City of Huntington Beach Total Assessed Valuation Fiscal Years 2014/15 -2023/24 (in billions) $60.0 $55.0 $53.1 $50.3 $50.0 $46 .1 $47.3 $45.0 $43.8 $41.5 $40.0 $37.5 $39.4 $36.1 $35.0 $34.3 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 2014/15 2015/16 2016/17 2017 /18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 vii *Fiscal Year 2017/18 reflects nine months of data only due to the change in the City’s fiscal year Transient Occupancy Tax (TOT) Transient Occupancy Tax (TOT), a 10 percent tax applied to hotel stays within the City remains strong. The City collected an impressive $17.3M in TOT revenues during FY22/23, reflecting a $1.6M, or 10 percent increase, affirming Huntington Beach’s Status as a premier vacation destination. FY 2022/23 includes the first full fiscal year of TOT revenues from the City’s Short- Term Vacation Rental Program totaling $971k. *Fiscal Year 2017/18 reflects nine months of data only due to the change in the City’s fiscal year. 326 City of Huntington Beach Historical Sales Tax Revenue $55.0 $53.4 $52.6 $50.0 $47.7 $45 .0 $43.9 $40.4 $41.1 $40 .0 $36.1 $35 .0 $31.4 ! $30.0 $29.5 $27.2 ~ 2-$25.0 $20.0 $15 0 $10.0 $5 .0 $0 .0 2013/14 2014/15 2015/16 2016/17 2017/18* 2018/19 2019/20 2020/21 2021/22 2022/23 City of Huntington Beach Transient Occupancy Tax Revenue $20.0 $18.0 $17.3 $16.0 $15.8 $14.0 $14.0 i $12.0 $11.4 0 $10.0 $10.4 ~ $10.0 $8 .4 $9.2 $8.8 $9.6 ~ $8.0 $6.0 $4.0 $2.0 $0.0 2013/14 2014/15 2015/16 2016/17 2017/18' 2018/19 2019/20 2020/21 2021/22 2022/23 viii 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, 2023 was 1.78 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 June 8, 2023, establishing eight goals to achieve over the next four years. The 2023-2027 Strategic Plan, approved by City Council on October 3, 2023, includes the eight Strategic Goals listed below to achieve over the next four years: x Economic Development – greater business retention, investment and job growth in the City. x Fiscal Stability – available funding to support a high-quality level of programs, services and capital investments and to build a structural surplus. x High Performing Organization – an engaged City workforce committed to responsive and exceptional public service for all. x Homelessness – A continuum of care that reduces homelessness and maintains quality of life for the entire community. x Housing – proactive programs to address diverse housing needs within the City’s jurisdiction. x Infrastructure Investment – maintain and upgrade infrastructure that supports the community’s day-to-day needs in accordance with the City’s Infrastructure Report Card. x Public Engagement – a community that has easy access to clear, accurate, and timely City information and expresses increased awareness and involvement in City activities. x Public Safety – Ensure the safety and protection of all community members, both efficiently and effectively. 327 ix 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 Strategic Plan. “One Stop Shop” The City is in the process of developing a “One Stop Shop” to facilitate the permitting process. The new “One Stop Shop” will streamline the permitting process and provide applicants with a comprehensive checklist to complete the necessary steps to obtain permits. The “One Stop Shop” approach aims to make the permitting process more efficient so that businesses and residents experience quicker and easier access to obtain permits for business licenses, short- term rentals, and building permits. Infrastructure Report Card Infrastructure provides essential services and affects quality of life for all Huntington Beach residents; to sustain these critical systems, it is important to routinely assess them. The City is preparing an Infrastructure Report Card (IRC) that will serve as a high-level summary to highlight the current condition of the City’s Infrastructure. This report card will assign grades (A- F) to various infrastructure categories, communicating the status of each and identifying priorities for improvement. The project structure is made up of three separate committees including the Outreach and Communications Committee. The Outreach and Communications Committee is comprised of approximately 100 Huntington Beach residents appointed by the City Council and/or are recognized members of the community who will act as ambassadors of this process through their networks. This will promote resident participation, education, and awareness of the project both during the assessments and after the final report is released. Assessments began in August 2023 and the final report is anticipated to be publicly released in late April 2024. Joint Youth Training Center On November 16, 2023, the City’s Police and Fire Department broke ground on the new Joint Youth Training Center (Training Center) which will replace the existing 50-year old Search & Rescue structure. This state-of-the-art Training Center will be home to the City’s Fire & Police Explorer Program. Opening in late 2024, this facility will provide a much needed space to train the City’s future public safety leaders. In 2021, the Huntington Beach Search and Rescue Explorer (HBSAR) program was reorganized and shifted its focus to provide the proper training in the different disciplines. As a result, the HB Police Explorer and the HB Fire Explorer programs were created to provide the youth with more experience and extensive training. The revamped Explorer programs are vital in teaching the City’s youth not only the technical skills necessary to pursue a career in public safety, but also leadership and character building that will benefit the youth regardless of what career path they choose to pursue. CivicRec Migration On March 7, 2023, the Community & Library Services Department, in collaboration with the Information Services and City Treasurer Departments, successfully launched CivicRec, a new recreation registration software for the City’s programs and activities. Preceeding the launch, a marketing campaign encouraged customers to create CivicRec accounts for spring and summer activity registration. Despite the time-sensitive nature of the project, it was executed 328 x successfully, with $618,956 in transactions received on the first day, exceeding expectations. The number of transactions for instructional classes alone increased by 49% from Spring 2022, and online transactions saw more than a 10% increase, indicating positive user experiences with the user-friendly registration software. 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 37th 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, 2022, 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 Zack Zithisakthanakul, Ian Wuh, Tara Mukund, Ming Zhai, Thuy Vi, and Shari Saraye for their hard work and dedication. Respectfully, Sunny Han Chief Financial Officer 329 xi City of Huntington Beach City Council Gracey Van Der Mark, Mayor Pat Burns, Mayor Pro Tem Rhonda Bolton, Councilmember Casey McKeon, Councilmember Dan Kalmick, Councilmember Natalie Moser, Councilmember Tony Strickland, Councilmember Executive Team Eric Parra, Interim City Manager Travis Hopkins, Assistant City Manager Elected Department Heads Alisa Backstrom, City Treasurer Robin Estanislau, City Clerk Michael Gates, City Attorney Department Directors Sunny Han, Finance Chau Vu, Public Works Chief Scott Haberle, Fire Chief Eric Parra, Police Jennifer Villasenor, Community Development Theresa St. Peter, Interim Human Resources Director Ashley Wysocki, Community & Library Services 330 xii 331 Advisory Litigation Community CITY OF HUNTINGTON BEACH FY 2023-,24 Organizational Chart JHE PEOPLE Of HUNTINGTOM BEA:CH CITY COUNCIL Mayor Mayor Pro -Tempore Ci ty Council Members City Manager CITY TREASURER Investments Revenue Services Prosecution .--1= Assistant City Mana,ger ~---------~----+--1-.---------..--------11 Police Administrartive Operations ~nvesti9atio ns L Patrol _ [ Special Operations Support Servi ces Community Development P annisi,g Permit j Counter Bt1ildi 97 Housing Codie I Enforce1nent Public Works r;:;;ntenance & L Operations Fire Community& Library Svcs I !Profess, onal r acilities & Sta1Drdairds Events I Utllltle0 Em ergency !Programs & • _j R·esponse L Services Marine I Library& Safety Cu t 1ural Svcs fog imi,ee ring Finance Commun icatilorn s &HBTV -City Council Support Hom, '""""'' • ] Behavioral 1Health Services Susta·nabili~ Human Information Resources Services Economic Development Accounting Recruitment & I 1nf ,astrt1cture I 1111 Elected Office·s Appo i r1ted Deparrtments Services !Budget Management Bus ness License Selectlon Benefits& Training labor Relations Risk Management Systems Technology Engageme nt &- Sup l)ort Business App l"cations xiii 332 " Go venunent Finance Officers Association Cert ifi cate o f A cl1i eve1n e11t f or Excelle11 ce i11 F i11 a11 c ial R epo rti11 g Presented to City of Huntington Beach C alifornia For its Annual Co1nprehensi ve Financial Report For th e Fisca l Year Ended June 30, 2022 ~P-~ Executive Director/CEO THIS PAGE INTENTIONALLY LEFT BLANK 333 FINANCIAL SECTION 334 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, 2023, 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, 2023, 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 11 (10) to the financial statements, during the year ended June 30, 2023, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 96, Subscription-Based Information Technology Agreements. Our opinion is not modified with respect to this matter. 1 335 Davis Farr CERTIFIED PUBLIC ACCOUNTANTS Davis Farr LLP 18201 Von Karman Avenue I Suite 1100 I Irvine, CA 92612 Main: 949.474 .2020 I Fax : 949.263.5520 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. 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. 2 336 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 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. 3 337 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2023 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, 2023 4 338 MANAGEMENT DISCUSSION AND ANALYSIS 5 339 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 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, 2023. 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 $836,059,000. Total net position increased by $81,321,000 or 10.8 percent primarily because of the increase in deferred outflows of resources and decrease in deferred inflows of resources. This change is related to GASB 68, Accounting and Financial Reporting for Pension, where the City must recognize adjustments in total pension liability and fiduciary net position. The CalPERS FY 2021/22 -7.5 percent investment loss was recognized in the June 30, 2023 financial statements per GASB 68 requirements, which eliminated the prior year’s net pension asset and created a net pension liability increase of $145,606,000. Long-term obligations increased by $142,296,000 or 31.7 percent. The increase is primarily the result of GASB 68 adjustments. As stated above, the adjustment increased net pension liability by $145,606,000 as a result of actuarial valuation adjustment of the City’s current net pension liability. Deferred outflows of resources increased by $123,704,000 or 400.5 percent while deferred inflow of resources decreased by $125,007,000 primarily due to the differences between projected and actual earnings on Pension Plan investments used to determine the City’s net pension liability. June 30, 2023 June 30, 2022 Amount Increase (Decrease) Percent Increase (Decrease) Assets 1,367,093$ 1,418,959$ (51,866)$ -3.7% Deferred Outflows of Resources 154,594 30,890 123,704 400.5% Liabilities 664,520 548,996 115,524 21.0% Deferred Inflows of Resources 21,108 146,115 (125,007) -85.6% Total Net Position 836,059 754,738 81,321 10.8% Unrestricted Net Position (136,350) (189,318) 52,968 28.0% Long-Term Obligations 590,950 448,654 142,296 31.7% Program Revenues 212,002 154,221 57,781 37.5% Taxes 221,607 205,853 15,754 7.7% Other General Revenues 9,214 107 9,107 8511.2% Expenses 361,502 297,173 64,329 21.6% Total Governmental and Business-Type Activities 6 340 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 Program revenues increased by $57,781,000 or 37.5 percent. Most of this increase is due to the receipt of American Rescue Plan Act grant funding. The American Rescue Plan Act of 2021 provided funding to individuals, businesses, state, and local governments to help mitigate the impacts of the COVID-19 pandemic. The City of Huntington Beach received $29,607,000 which was used for eligible police and fire expenditures. Community Development and Public Works related program revenue also saw an increase of $7,886,000 and $4,134,000 which can be attributed to an increase in permits issued, development fees, and affordable housing in-lieu fees from two new residential development projects, Gisler Residential and Delaware Housing Project. Expenses increased by $64,329,000 or 21.6 percent, largely due to the prior year’s pension expenses being substantially lower than usual due to the 21.3 percent CalPERS investment return which resulted in a Net Pension Asset in FY 2021/22. The -7.5 percent return in the subsequent fiscal year resulted in the creation of a Net Pension Liability and increased pension expense. The City also incurred additional expense for fuel, repairs, natural gas, and other utilities, due to rising costs from inflationary pressures, supply-chain issues, and rate increases. 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). 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 7 341 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 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 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), Pension Liability Debt Service Fund, and Infrastructure Fund, all of which are considered to be major funds. Data from the other 19 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 121-122. Other major governmental funds (LMIHAF Capital Projects Fund, Pension Liability Debt Service Fund and Infrastructure Fund) are presented in the Supplementary Information section on pages 148-149 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. 8 342 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 Proprietary Funds The City maintains two different types of proprietary funds, enterprise and internal service, 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 provide 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 34-117 of this report. 9 343 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 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 120-130 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 133-140 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 $836,059,000. Below is a summary schedule of the City’s net position on June 30, 2023 (in thousands): Governmental Activities June 30, 2023 June 30, 2022 Amount Increase (Decrease) Percent Increase (Decrease) Current and Other Assets 360,136$ 331,062$ 29,074$ 8.8% Non-Current Assets 1,809 106,219 (104,410) -98.3% Capital Assets 772,038 746,371 25,667 3.4% Total Assets 1,133,983 1,183,652 (49,669) -4.2% Deferred Outflows of Resources 144,205 28,739 115,466 401.8% Current and Other Liabilities 61,970 92,861 (30,891) -33.3% Long-Term Obligations 559,315 426,186 133,129 31.2% Total Liabilities 621,285 519,047 102,238 19.7% Deferred Inflows of Resources 20,322 136,033 (115,711) -85.1% Net Position: Net Investment in Capital Assets 727,051 712,289 14,762 2.1% Restricted 82,564 68,460 14,104 20.6% Unrestricted (173,034) (223,438) 50,404 22.6% Total Net Position 636,581$ 557,311$ 79,270$ 14.2% Business-Type Activities June 30, 2023 June 30, 2022 Amount Increase (Decrease) Percent Increase (Decrease) Current and Other Assets 91,312$ 82,651$ 8,661$ 10.5% Non-Current Assets 215 8,658 (8,443) -97.5% Capital Assets 141,583 143,998 (2,415) -1.7% Total Assets 233,110 235,307 (2,197) -0.9% Deferred Outflows of Resources 10,389 2,151 8,238 383.0% Current and Other Liabilities 11,600 7,481 4,119 55.1% Long-Term Obligations 31,635 22,468 9,167 40.8% Total Liabilities 43,235 29,949 13,286 44.4% Deferred Inflows of Resources 786 10,082 (9,296) -92.2% Net Position: Net Investment in Capital Assets 141,581 143,998 (2,417) -1.7% Restricted 21,213 19,309 1,904 9.9% Unrestricted 36,684 34,120 2,564 7.5% Total Net Position 199,478$ 197,427$ 2,051$ 1.0% 10 344 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 Analysis of the City’s Net Position Current and Other Assets: The increase in current and other assets of $29,074,000 for governmental activities is mainly due to the increase in cash balances related to increased property tax, franchise tax, utility users tax, and transient occupancy tax revenues. The overall combined asset decreased by $49,669,000 which is due to a $104,410,000 decrease in Non-current Assets. The increase in current and other assets of $8,661,000 for business-type activities is primarily due to increased cash balance in the Water Master Plan fund from revenue received for new development projects in Fiscal Year 2022/23. Two of the main projects are Gisler Residential which is for 85 single-family residential homes on 13.9 acres and Delaware Housing Project which is a 346-unit, five story residential apartment community. The overall combined asset decreased by $2,197,000 or 0.9 percent. Non-current Assets: Non-current Assets decreased by $104,410,000 in governmental activities and $8,443,000 in business-type activities due to GASB 68 adjustments. Fiscal Year 2022/23 saw an increase in net pension liability due to CalPERS’ 7.5percent investment loss in FY 2021/22 recognized in FY 2022/23, which resulted in a decrease in Net Pension Asset and an increase in Net Pension Liability. Current and Other Liabilities: Current and Other Liabilities for governmental activities decreased by $30,891,000 and increased by $4,119,000 for business-type activities. For governmental activities, most of the decrease is related to $29,607,000 of American Rescue Plan Act (ARPA) funds that were received and recorded as unearned revenue in prior years. These funds were recognized as revenue in Fiscal Year 2022/23 as they were expended on eligible public safety expenditures. The increase in business-type activities is due to normal fluctuations in accounts payable and payroll cycles. Deferred Outflows and Inflows of Resources: The increase in deferred outflows of resources of $115,466,000 and $8,238,000 for governmental activities and business-type activities and decrease of deferred inflows of resources of $115,711,000 and $9,296,000 for governmental activities and business-type activities is the result of 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. See Notes 6, 7, and 8 for additional information. Long-Term Obligations: Long-term obligations increased by $133,129,000 for governmental activities and $9,167,000 for business-type activities primarily due the FY 2021/22 7.5percent CalPERS investment loss recognized in FY 2022/23 which created a net pension liability totaling $151,970,000. 11 345 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 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 $14,762,000 or 2.1 percent, primarily due to street improvements and construction projects such as improvements to Rodger’s Senior Center Repurposing, Central Park Improvements, various fiber expansion projects and replacement of outdated equipment throughout the City. Net position invested in capital assets net of related debt from business-type activities decreased $2,417,000 or 1.7 percent primarily due to depreciation expense and a reduction of sewer and lift station improvement cost. Restricted Net Position: An additional portion of the City’s net position is subject to external (legally imposed or statutory) restrictions ($82,564,000 for governmental activities, and $21,213,000 for business-type activities). These amounts represent 13.0 percent and 10.6 percent of net position for governmental activities and business-type activities, respectively. Restricted net position from governmental activities increased $14,104,000 or 20.6 percent, largely due to the change in restricted net position in the Pension Liability Fund and Infrastructure Fund. The Pension Liability Fund increased due to revenues set aside from the voter-approved property tax override dedicated to the payment of pension costs. The Infrastructure Fund increased due to the City transferring $28,741,000 from the General Fund to cover future Infrastructure cost. Restricted net position from business-type activities increased by $1,904,000 or 9.9 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 $173,034,000 for governmental activities and $36,684,000 for business-type activities) represent negative 27.2 percent and 18.4 percent, respectively, of net position for governmental activities and business-type activities. Unrestricted net position for governmental activities increased $50,404,000 or 22.6 percent. Unrestricted net position for business-type activities increased by $2,564,000 or 7.5 percent. These changes can be attributed to changes in Net Pension Liability and Other Postemployment Benefits. 12 346 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 A condensed summary of governmental activities (in thousands) follows: The cost of all governmental activities this year was $287,068,000. However, as shown in the Statement of Activities, the amount that taxpayers ultimately financed for these activities was $150,157,000, as costs of $82,704,000 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 $43,005,000, and capital grants and contributions of $11,202,000. Overall, the City’s governmental program revenues were $136,911,000. The City paid for the remaining “public benefit” portion of governmental activities with $229,465,000 in taxes and general revenue (some of which may only be used for certain programs) and with other revenues, such as interest and general entitlements. Revenues: June 30, 2023 June 30, 2022 Amount Increase (Decrease) Percent Increase (Decrease) Program Revenues: Charges for Current Services 82,704$ 68,051$ 14,653$ 21.5% Operating Grants and Contributions 43,005 9,301 33,704 362.4% Capital Grants and Contributions 11,202 8,537 2,665 31.2% Total Program Revenues 136,911 85,889 51,022 59.4% General Revenues: Property Taxes 109,467 102,539 6,928 6.8% Sales Taxes 57,164 57,652 (488) -0.8% Utility Taxes 22,558 19,528 3,030 15.5% Franchise Taxes 15,100 10,380 4,720 45.5% Transient Occupancy Tax 17,318 15,754 1,564 9.9% Use of Money and Property (Loss) 5,153 (1,895) 7,048 -371.9% From Other Agencies - Unrestricted 3,225 4,631 (1,406) -30.4% Disposal of Machinery and Equipment (Loss) (520) 1,699 (2,219) -130.6% Total General Revenues 229,465 210,288 19,177 9.1% Total Revenues 366,376 296,177 70,199 23.7% Expenses: City Council 429 382 47 12.3% City Manager 5,780 5,412 368 6.8% City Treasurer 396 259 137 52.9% City Attorney 3,248 2,183 1,065 48.8% City Clerk 1,370 1,060 310 29.2% Finance 6,211 5,581 630 11.3% Community Development 20,550 11,634 8,916 76.6% Fire 71,737 52,808 18,929 35.8% Information Services 8,565 6,469 2,096 32.4% Police 89,430 73,964 15,466 20.9% Community Services 13,389 11,517 1,872 16.3% Library Services 7,225 5,212 2,013 38.6% Public Works 49,151 42,598 6,553 15.4% Interest on Long-Term Debt 9,587 9,548 39 0.4% Total Expenses 287,068 228,627 58,441 25.6% Change in Net Position Before Transfers 79,308 67,550 Transfers (38) (39) Change in Net Position 79,270 67,511 Net Position - Beginning of Year 557,311 489,800 Net Position - End of Year 636,581$ 557,311$ Governmental Activities 13 347 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 Charges for current services increased $14,653,000, or 21.5 percent. The largest increase in Charges for Current Services came from Community Development and Public Works. Community Development saw revenue go up by $7,864,000 while Public Works saw revenues go up by $4,066,000 due to an increase in permit issuance and fees collected for development projects such as the Gisler Residential and Delaware Housing Projects. Operating Grants and Contributions increased by $33,704,000 or 362.4 percent and Capital Grants and Contributions have increased by $2,655,000 or 31.2 percent. The Operating Grants and Contributions increase is due to the $29,607,000 of American Rescue Plan Act (ARPA) funds the City recognized as revenue in the current year. The increase in Capital Grants and Contributions is related to increased traffic impact fee and commercial sanitation fee revenue received related to large development projects within the city. Program expenses increased by $58,441,000, or 25.5 percent. As mentioned earlier, this is largely due to the prior year’s pension expenses being substantially lower than usual due to the 21.3 percent CalPERS investment return which resulted in a Net Pension Asset in FY 2021/22. The -7.5 percent return in the subsequent fiscal year resulted in the creation of a Net Pension Liability and increased pension expense. The City also incurred additional expense for fuel, repairs, natural gas, and other utilities, due to rising costs from inflationary pressures, supply-chain issues, and rate increases. Total resources available during the year to finance governmental operations were $923,687,000 consisting of net position at July 1, 2022 of $557,311,000, program revenues of $136,911,000, and general revenues of $229,465,000. Total expenses for governmental activities during the year were $287,068,000 plus transfers of $38,000. Thus, net position increased by $79,270,000 or 14.2 percent, to $636,581,000. 14 348 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 A condensed summary of business-type activities (in thousands) follows: The City’s net position from business-type activities increased by $2,013,000 before transfers. This is mainly due to unrealized market gains in the City’s investments and increased revenue. The cost of all business-type activities this year was $74,434,000. As shown in the Statement of Activities, charges for current services was $75,091,000 and unrealized market gain was $1,356,000, which was more than enough to cover business-type activities. Beginning net position was $197,427,000 and ending net position was $199,478,000, an increase of $2,051,000, or 1.0 percent. Of the ending net position, $141,581,000, or 71.0 percent, was invested in capital assets, $21,213,000 or 10.6 percent was restricted for expenses for the Water Master Plan, and $36,684,000, or 18.4 percent was unrestricted. Transfers in for business-type activities were $38,000 for the current year. Financial Analysis of the City’s Major Governmental Funds Below is an analysis of the City’s major governmental fund activities for the year (in thousands): June 30, 2023 June 30, 2022 Amount Increase (Decrease) Percent Increase (Decrease) Program Revenues: Charges for Current Services 75,091$ 68,332$ 6,759$ 9.9% Total Program Revenues 75,091 68,332 6,759 9.9% Use of Money and Property (Loss)1,356 (4,328) 5,684 -131.3% Total Revenues 76,447 64,004 12,443 19.4% Expenses: Water Utility 47,974 44,182 3,792 8.6% Sewer Service 11,422 10,390 1,032 9.9% Refuse Collection 14,935 13,738 1,197 8.7% Hazmat Service 103 236 (133) -56.4% Total Expenses 74,434 68,546 5,888 8.6% Increase (Decrease) in Net Position Before Transfers 2,013 (4,542) Transfers 38 39 Total Change In Net Position 2,051 (4,503) Net Position - Beginning of Year 197,427 201,930 Net Position - End of Year 199,478$ 197,427$ Business-Type Activities June 30, 2023 June 30, 2022 Amount Increase (Decrease) Percent Increase (Decrease) Total Fund Balance: General Fund 126,537$ 102,824$ 23,713$ 23.1% Grants Special Revenue Fund 655 (4,311) 4,966 115.2% LMIHAF Capital Projects Fund 4,919 4,856 63 1.3% Pension Liability Fund 24,982 20,729 4,253 20.5% Infrastructure 33,398 20,485 12,913 63.0% Total Fund Balance:190,491$ 144,583$ 45,908$ 31.8% Governmental Funds 15 349 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 The General Fund Balance increased by $23,713,000, primarily due to one-time savings from the use of American Rescue Plan Act funding for public safety expenditures which facilitated the creation of an HB Recovery Reserve totaling $10,886,000. Additionally, the City realized additional revenue primarily due to one-time spikes in natural gas prices during Winter 2022-23 and increased natural gas and electricity rates. Transient Occupancy Tax (TOT) remained strong, mainly due to higher average daily rates and a full fiscal year of TOT from the City’s Short-Term Vacation Rentals. The Grants Special Revenue Fund Balance increased by $4,966,000 primarily due to a payment of $3,549,000 from the Monsanto class-action settlement. The LMIHAF Capital Projects Fund Balance increased by $63,000 primarily due to the interest earned on City investments and loan payments received for developer loans. The Pension Liability Fund increased by $4,253,000, largely due to revenues set aside from the voter-approved property tax override dedicated to the payment of Public Safety pension costs. The Infrastructure Fund increased by $12,913,000 due to the City transferring HB Recovery funds from the General Fund to the Infrastructure fund for projects including: construction of a Joint Youth Training Center for Police and Fire and various mobility, arterial beautification, and sustainability-related capital improvements. Financial Analysis of the City’s Major Proprietary Funds Below is an analysis of the fund net position of the City’s proprietary funds (in thousands): The Water Fund total net position increased by $1,767,000 due to the City receiving one- June 30, 2023 June 30, 2022 Amount Increase (Decrease) Percent Increase (Decrease) Net Position: Water Fund 120,533$ 118,766$ 1,767$ 1.5% Sewer Fund 78,606 78,509 97 0.1% Refuse Fund 35 16 19 118.8% Hazmat Service Fund 304 136 168 123.5% Total Net Position 199,478$ 197,427$ 2,051$ 1.0% Unrestricted Net Position: Water Fund 10,880$ 9,104$ 1,776$ 19.5% Sewer Fund 25,556 24,977 579 2.3% Refuse Fund (56) (97) 41 42.3% Hazmat Service Fund 304 136 168 123.5% Total Unrestricted Net Position 36,684$ 34,120$ 2,564$ 7.5% Enterprise Funds 16 350 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 time revenue from Orange County Water District in FY 2022/23, which caused the unrestricted net position to increase by $1,776,000. All enterprise funds except for the Refuse Fund generated revenue that exceeded expenses due to supplies and operations cost exceeding revenue generated in FY 2022/23. Long-Term Obligations Below is a schedule of the changes to the City’s long-term obligations (in thousands): 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 Statement No. 87 Leases 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 $1,487,000 or 0.3 percent from the prior fiscal year as there were more debt retirements than debt additions during the year. The City continues to maintain strong credit ratings on all of its debt issues. Most notably, on August 27, 2014 Fitch Ratings issued an AAA Implied General Obligation Bond rating to the City of Huntington Beach and that same rating was most recently reaffirmed in February 2022. The following are the ratings as determined by Standard and Poor’s and Fitch Ratings as of June 30, 2023. Governmental Activities:June 30, 2022 Additions Retirements June 30, 2023 Revenue Bonds 27,365$ -$ (2,205)$ 25,160$ Compensated Absences 15,045 3,376 (3,603) 14,818 Claims Payable 56,431 28,002 (17,812) 66,621 Pollution Remediation 2,000 - - 2,000 LED Lighting Phase I 314 - (123) 191 I-Bank CLEEN Loan 1,586 - (303) 1,283 CEC Loan 2,063 - (266) 1,797 Pension Obligation Bonds 330,642 - (12,637) 318,005 Finance Purchase Agreement 11,714 7,742 (2,068) 17,388 Leases Payable 247 398 (189) 456 Subscriptions Payable 3,651 - (1,051) 2,600 Total Long-Term Obligations Governmental Activities 451,058 39,518 (40,257) 450,319 Business-Type Activities: Compensated Absences 1,686 529 (389) 1,826 Pension Obligation Bonds 21,368 - (888) 20,480 Business-Type Activities:23,054 529 (1,277) 22,306 Total Long-Term Obligations 474,112$ 40,047$ (41,534)$ 472,625$ 17 351 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 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. Below is a schedule of the City’s capital assets, net of accumulated depreciation (in thousands): Capital assets from governmental activities increased $22,016,000 or 2.9 percent. This increase is largely due to street replacement infrastructure costs and machinery and equipment replacement throughout the City. Capital assets from business-type activities Debt Instrument S & P Fitch 1999 Tax Allocation Refunding Bonds AA-AA 2002 Tax Allocation Refunding Bonds AA-N/A 2014 Lease Revenue Bonds, Series A AA AA+ 2020(a) Lease Revenue Bonds AA AA+ 2020(b) Lease Revenue Bonds AA AA+ 2021 Pension Obligation Bonds AA+AA+ Governmental Activities: June 30, 2023 June 30, 2022 Amount Increase (Decrease) Percent Increase (Decrease) Land 369,538$ 369,538$ -$ 0.0% Buildings 127,820 127,310 510 0.4% Machinery and Equipment 32,401 19,510 12,891 66.1% Construction in Progress 11,249 12,235 (986) -8.1% Infrastructure 227,641 217,525 10,116 4.7% Right to Use Leased Asset 462 253 209 82.6% Right to Use SBITA Asset 2,927 3,651 (724) -19.8% Total Governmental Activities 772,038 750,022 22,016 2.9% Business-Type Activities: Land 3,907 3,907 - 0.0% Buildings 66,089 68,693 (2,604) -3.8% Machinery and Equipment 6,064 6,863 (799) -11.6% Construction in Progress 839 109 730 669.7% Infrastructure 64,684 64,426 258 0.4% Total Business-Type Activities 141,583 143,998 (2,415) -1.7% Total Capital Assets 913,621$ 894,020$ 19,601$ 2.2% 18 352 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 decreased $2,415,000 or 1.7 percent largely due disposal of outdated machinery and equipment. Information on the City’s capital assets can be found in Note 12 of the financial statements. Furthermore, the newly implemented GASB Statement No. 96, Subscription-Based Information Technology Arrangements (SBITA), requires the City to recognize subscription liability and an intangible right-to-use subscription asset. For FY 2022/23, the City reported $2,927,000 in right-to-use SBITA assets. General Fund Budgetary Highlights Changes to Original Budget Comparing the FY 2022/23 General Fund Original (i.e. Adopted) Budget expenditures amount of $269,971,000 to the final budgeted amount of $298,423,000 shows a net increase of $28,452,000, or 10.5 percent. This overall increase is primarily due to budget carryovers of $5,264,000, increased transfers to the Infrastructure Fund of $4,586,000, Retirement Supplement Fund of $4,620,000, Section 115 Trust of $2,000,000, Self Insurance General Liability Fund of $4,500,000, Self Insurance Worker’s Compensation Fund of $5,800,000, appropriation of donation revenue totaling $986,000, and operating increases of $6,016,000. Final budgeted revenues for the General Fund increased $27,026,000 or 9.5 percent from the original (adopted) budget for the Fiscal Year ended June 30, 2023. 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 greater than the final budget by $1,707,000 for the Fiscal Year ended June 30, 2023. This budget variance is due in large part to actual investment returns outperforming budgeted amounts in the Section 115 Trust. General Fund expenditures were $7,714,000 less than the final budget. The favorable budget variance is due in large part to the following: The Information Services and Police Departments realized a total of $2,478,000 in savings primarily due to higher than average vacancies. Economic Factors and Next Year’s Budget The Adopted FY 2023/24 Budget totals $508.0 million in all funds. This reflects a $24.0 million, or 4.5 percent decrease from the FY 2022/23 Adopted All Funds Budget of $532.0 19 353 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 million. A significant portion of the decrease is due to the one-time redistribution of $29.6 million of American Rescue Plan Act (ARPA) funds to the General Fund in FY 2022/23 for the provision of core governmental services. General Fund Budget expenditures total $285.2 million and are supported by revenues of $283.9 million, plus the one time use of $8.8 million in General Fund Reserves. Use of reserves include the transfer of $3.9 million from the Equipment Replacement Reserve to the Equipment Replacement Fund for the purchase of critical infrastructure and public safety vehicles and equipment. The full balance of the AES Reserve ($4.9 million) is being transferred to a new AES Mitigation Fund to be used for various Capital Improvement Projects (CIP) as outlined in the Memorandum of Understanding between the City and AES Southland Development LLC. The Adopted General Fund Budget 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 51 cents for every dollar spent in the General fund. With more than half of the General Fund Budget committed to the Police and Fire Departments, the City has dedicated the greatest share of its resources, or $145.7 million, to these core services. In the Police Department, the budget includes $2.0 million in equipment funds for the replacement of 22 police vehicles and other front line safety equipment. The Capital Improvement Program (CIP) includes $2,680,000 for relocation and expansion of the Police Department Communications Center, updates to the women’s locker room, and fiber installations at the Bella Terra Police substation. In the Fire Department, the Adopted Budget includes $825,000 for equipment replacement comprising of ten vehicles and the purchase of ambulance equipment and extraction tools. The CIP includes $345,000 for a traffic signal at Murdy Fire Station. Revenue growth, reining in expenditures, strong reserves, and public service excellence are areas of focus for the organization. The City’s commitment to financial sustainability is also demonstrated by its proactive approach to addressing future budget challenges through the Adopted Budget Balancing Plan, which identifies $1.65 million in ongoing new revenues and $5.03 million in ongoing expenditure reductions, including $1.5 million in savings through implementation of a managed hiring program. As part of the process to identify where the City should focus its limited resources, a Quality of Life survey is currently underway to identify the priorities of the City’s residents and other key stakeholders. 20 354 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2023 General Fund Revenue General Fund revenue is projected to be $283.9 million, a $.7 million or 0.3 percent increase from the Fiscal Year 2022/23 Adopted Budget. The largest decrease is in Non- Operating Revenue, which is projected to be $2.8 million, a $27.3 million decrease from the FY 2022/23 Adopted Budget of $30.1 million. This is attributable to the one-time transfer of $29.6 million in ARPA funds for general governmental services that was included in the FY 2022/23 Adopted Budget. This decrease is offset by increases in Property Tax, Franchise and Utility Users Tax, Use of Money & Property, and Charges for Current Services. Property Tax is the largest revenue category for the City and is anticipated to increase by $5.9 million or 6.0 percent to $104.2 million due to gains in assessed property valuations. Franchise and Utility Users Taxes are projected at $33.0 million, a 21.8 percent increase, driven by increases in utility prices including gas and electricity. Use of Money & Property is anticipated to increase by $4.9 million to $21.8 million due to parking rate increases and an expected rise in lease and concession income. Charges for Current Services is projected to increase $7.4 million due to increased demand for services, including medical transports, recreation classes and building and planning services. Contacting the City’s Financial Management Team This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report, separate reports of the City’s component units or need any additional financial information, contact the Finance Department at 2000 Main Street, Huntington Beach, California, 92648-2702, phone (714) 536-5630 or email tvi@surfcity-hb.org. 21 355 BASIC FINANCIAL STATEMENTS 22 356 ASSETS Governmental Activities Business-Type Activities Total Current Assets: Cash and Investments 291,761$ 76,936$ 368,697$ Cash and Investments with Fiscal Agent 12,285 - 12,285 Receivables, Net 41,373 10,532 51,905 Advances to Successor Agency 1,363 - 1,363 Lease Receivable 11,107 - 11,107 Inventories - 1,624 1,624 Prepaids 2,032 - 2,032 Joint Venture 215 2,220 2,435 Total Current Assets 360,136 91,312 451,448 Non-Current Assets: Net Other Postemployment Benefits Asset 1,809 215 2,024 Total Non-Current Assets 1,809 215 2,024 Capital Assets: Non-Depreciable 380,787 4,746 385,533 Depreciable, Net 391,251 136,837 528,088 Total Capital Assets 772,038 141,583 913,621 Total Assets 1,133,983 233,110 1,367,093 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows Related to Pensions 138,290 9,685 147,975 Deferred Outflows Related to Other Postemployment Benefits 5,915 704 6,619 Total Deferred Outflows of Resources 144,205 10,389 154,594 LIABILITIES Current Liabilities: Accounts Payable 12,043 8,258 20,301 Accrued Payroll 1,914 282 2,196 Unearned Revenue 4,087 - 4,087 Accrued Interest Payable 632 22 654 Deposits 2,250 1,649 3,899 Long-Term Obligations Due Within One Year 41,044 1,389 42,433 Total Current Liabilities 61,970 11,600 73,570 Long-Term Obligations: Long-Term Obligations Due in More than One Year 409,275 20,917 430,192 Net Pension Liability 150,040 10,718 160,758 Total Long-Term Obligations 559,315 31,635 590,950 Total Liabilities 621,285 43,235 664,520 DEFERRED INFLOWS OF RESOURCES Deferred Inflows Related to Pensions 3,105 24 3,129 Deferred Inflows Related to Other Postemployment Benefits 6,397 762 7,159 Deferred Inflows Lease Related 10,820 - 10,820 Total Deferred Inflow of Resources 20,322 786 21,108 NET POSITION Net Investment in Capital Assets 727,051 141,581 868,632 Restricted for: Debt Service 4,461 - 4,461 Capital Projects 25,852 21,213 47,065 Public Works and Community Services Projects 52,251 - 52,251 Total Restricted Net Position 82,564 21,213 103,777 Unrestricted (173,034) 36,684 (136,350) Total Net Position 636,581$ 199,478$ 836,059$ CITY OF HUNTINGTON BEACH STATEMENT OF NET POSITION JUNE 30, 2023 (In Thousands) See Notes to the Financial Statements 23 357 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 429$ 167$ -$ -$ (262)$ -$ (262)$ City Manager 5,780 4,976 311 23 (470) - (470) City Treasurer 396 153 - - (243) - (243) City Attorney 3,248 5 - - (3,243) - (3,243) City Clerk 1,370 299 - - (1,071) - (1,071) Finance 6,211 3,125 - - (3,086) - (3,086) Community Development 20,550 18,817 6,373 25 4,665 - 4,665 Fire 71,737 14,166 14,063 - (43,508) - (43,508) Information Services 8,565 623 - - (7,942) - (7,942) Police 89,430 6,139 17,994 - (65,297) - (65,297) Community Services 13,389 22,545 653 294 10,103 - 10,103 Library Services 7,225 388 585 - (6,252) - (6,252) Public Works 49,151 11,301 3,026 10,860 (23,964) - (23,964) Interest on Long-Term Debt 9,587 - - - (9,587) - (9,587) Total Governmental Activities 287,068 82,704 43,005 11,202 (150,157) - (150,157) Business-type Activities: Water Utility 47,974 48,934 - - - 960 960 Sewer Service 11,422 10,982 - - - (440) (440) Refuse Collection 14,935 14,899 - - - (36) (36) Hazmat Service 103 276 - - - 173 173 Total Business-Type Activities 74,434 75,091 - - - 657 657 Total Governmental and Business Type Activities 361,502$ 157,795$ 43,005$ 11,202$ (150,157)$ 657$ (149,500)$ General Revenues: Taxes: Property Taxes 109,467$ -$ 109,467$ Sales Taxes 57,164 - 57,164 Utility Taxes 22,558 - 22,558 Franchise Taxes 15,100 - 15,100 Transient Occupancy Tax 17,318 - 17,318 Total Taxes 221,607 - 221,607 Other: Use of Money and Property 5,153 1,356 6,509 From Other Agencies - Unrestricted 3,225 - 3,225 Disposal of Machinery and Equipment (Loss) (520) - (520) Total General Revenues 229,465 1,356 230,821 Transfers (38) 38 - Total General Revenues and Transfers 229,427 1,394 230,821 Change in Net Position 79,270 2,051 81,321 Net Position - Beginning of Year 557,311 197,427 754,738 Net Position - End of Year 636,581$ 199,478$ 836,059$ Net (Expense) Revenue and Changes in Net Position CITY OF HUNTINGTON BEACH STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2023 (In Thousands) See Notes to the Financial Statements 24 358 CITY OF HUNTINGTON BEACH BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2023 (In Thousands) ASSETS General Fund Grants Special Revenue LMIHAF Capital Projects Pension Liability Infrastructure Other Governmental Funds Total Cash and Investments 115,922$ 3,020$ 3,551$ 24,736$ 34,780$ 63,156$ 245,165$ Cash and Investments with Fiscal Agent - - - - - 12,285 12,285 Taxes Receivable 14,867 - - 148 - 1,308 16,323 Other Receivables, Net 7,599 7,323 8,339 98 196 1,330 24,885 Lease Receivable 11,107 - - - - - 11,107 Advances to Successor Agency - - 1,363 - - - 1,363 Prepaids 51 - - - - - 51 Total Assets 149,546 10,343 13,253 24,982 34,976 78,079 311,179 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accounts Payable 6,701 1,056 10 - 1,478 2,093 11,338 Accrued Payroll 1,777 29 - - 43 57 1,906 Unearned Revenue 1,122 2,965 - - - - 4,087 Deposits Payable 2,250 - - - - - 2,250 Total Liabilities 11,850 4,050 10 - 1,521 2,150 19,581 DEFERRED INFLOWS OF RESOURCES Deferred Inflows Lease Related 10,820 - - - - - 10,820 Unavailable Revenue 339 5,638 8,324 - 57 - 14,358 Total Deferred Inflows of Resources 11,159 5,638 8,324 - 57 - 25,178 FUND BALANCES Nonspendable Prepaids 51 - - - - - 51 Restricted Underground Utilities 364 - - - - - 364 Restitution 296 - - - - - 296 Donations 777 - - - - - 777 Section 115 Trust 18,141 - - - - - 18,141 Pollution Remediation - - - - - 336 336 Debt Service - - - 24,982 - 4,461 29,443 Highways, Streets and Transportation - - - - - 14,257 14,257 Low Income Housing - - 4,919 - - 10,891 15,810 Air Quality - - - - - 1,038 1,038 Other Capital Projects - - - - - 23,695 23,695 Other Purposes - 655 - - - 2,632 3,287 Committed Economic Uncertainties 48,411 - - - - - 48,411 Parks - - - - - 5,316 5,316 Other Capital Projects 1,040 - - - 33,398 3,196 37,634 Other Purposes 1,779 - - - - 3,910 5,689 Assigned Litigation Reserves 3,650 - - - - - 3,650 AES Reserve 4,900 - - - - 4,900 Capital Improvement Reserve 9,086 - - - - 6,197 15,283 Equipment Replacement 8,295 - - - - - 8,295 General Plan Maintenance 1,515 - - - - - 1,515 HB Recovery Fund 10,886 - - - - - 10,886 Oceanview Estates 365 - - - - - 365 General Liability Plan Migration 2,801 - - - - - 2,801 Pension Rate Stabilization 4,160 - - - - - 4,160 Section 115 Trust 2,500 - - - - - 2,500 Other Purposes 7,520 - - - - - 7,520 Total Fund Balances 126,537 655 4,919 24,982 33,398 75,929 266,420 Total Liabilities, Deferred Inflows of Resources and Fund Balances 149,546$ 10,343$ 13,253$ 24,982$ 34,976$ 78,079$ 311,179$ See Notes to the Financial Statements 25 359 Amounts reported for governmental activities in the statement of net position are different because: Total Fund Balances Governmental Funds 266,420$ Net Other Postemployment Benefits Asset is not available to pay in the current period and therefore are not reported in the funds. Net Other Postemployment Benefits Asset 1,799 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 1,163,909 Accumulated Depreciation (404,669) Total Capital Assets 759,240 Joint Venture 215 Right to Use Leased/SBITA Assets used in governmental activities are not current financial resources and, therefore, are not reported in the governmental funds. Right to Use Leased Assets 672 Right to Use SBITA Assets 3,651 Accumulated Amortization (934) Total Right to Use Assets 3,389 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.(10,262) 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.14,358 Deferred Outflows Related to Pensions 137,824 Deferred Outflows Related to Other Postemployment Benefits (OPEB)5,883 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.(149,527) Deferred Inflows Related to Pensions (3,104) Deferred Inflows Related to Other Postemployment Benefits (OPEB)(6,362) Other long-term liabilities are not due in the current period and, therefore, are not recorded in the governmental funds. Accrued Interest Payable (632) 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 (21,944) Long-Term Obligations Due in More than One Year (360,716) Net Position of Governmental Activities 636,581$ (In Thousands) CITY OF HUNTINGTON BEACH RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2023 See Notes to the Financial Statements 26 360 REVENUES General Fund Grants Special Revenue LMIHAF Capital Projects Pension Liability Infrastructure Other Governmental Funds Total Property Taxes 101,036$ -$ -$ 8,431$ -$ -$ 109,467$ Sales Taxes 52,599 - - - - 4,565 57,164 Utility Taxes 22,558 - - - - - 22,558 Other Taxes 32,418 - - - - 8,320 40,738 Licenses and Permits 10,630 - - - - 5,058 15,688 Fines and Forfeitures 3,945 - - - - - 3,945 Use of Money and Property (Loss) 21,401 130 79 447 (1,565) 2,234 22,726 Intergovernmental 4,024 40,872 - - 501 2,029 47,426 Charges for Current Services 32,787 - - 16,111 - 11,112 60,010 Other 2,606 3,741 - - - 6 6,353 Total Revenues 284,004 44,743 79 24,989 (1,064) 33,324 386,075 EXPENDITURES Current: City Council 453 - - - - - 453 City Manager 5,892 300 - - - 309 6,501 City Treasurer 417 - - - - - 417 City Attorney 3,404 - - - - - 3,404 City Clerk 1,441 1 - - - - 1,442 Finance 7,372 37 - - - 11 7,420 Community Development 17,061 3,343 16 - - 1,149 21,569 Fire 65,658 488 - - - 6,353 72,499 Information Services 8,269 - - - - 294 8,563 Police 93,796 2,716 - - - 488 97,000 Community Services 12,500 343 - - 389 3,378 16,610 Library Services 6,951 204 - - - 89 7,244 Public Works 27,785 2,739 - - 14,375 17,262 62,161 Debt Service: Principal 4,000 - - 12,594 - 2,205 18,799 Interest 310 - - 8,486 - 746 9,542 Total Expenditures 255,309 10,171 16 21,080 14,764 32,284 333,624 Excess (Deficiency) of Revenues Over (Under) Expenditures 28,695 34,572 63 3,909 (15,828) 1,040 52,451 OTHER FINANCING SOURCES (USES) Transfers In 30,020 1 - 344 28,741 6,263 65,369 Lease (as Lessee) 398 - - - - - 398 Issuance of Finance Purchase Agreement - - - - - 7,742 7,742 Transfers Out (35,400) (29,607) - - - (400) (65,407) Total Other Financing Sources (Uses)(4,982) (29,606) - 344 28,741 13,605 8,102 Net Change In Fund Balances 23,713 4,966 63 4,253 12,913 14,645 60,553 Fund Balances - Beginning of Year 102,824 (4,311) 4,856 20,729 20,485 61,284 205,867 Fund Balances - End of Year 126,537$ 655$ 4,919$ 24,982$ 33,398$ 75,929$ 266,420$ (In Thousands) CITY OF HUNTINGTON BEACH STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2023 See Notes to the Financial Statements 27 361 Amounts reported for governmental activities in the statement of activities are different because: Net Changes in Fund Balances - Total Governmental Funds 60,553$ Depreciable Assets Purchased 37,934 Depreciable Assets Disposition (87) Non-Depreciable Assets Purchased 3,886 Non-Depreciable Assets Disposition (4,872) Capital Asset Depreciation (18,028) Joint Venture 16 Current Year Grant and Other Revenue Accrual 3,724 Prior Year Grant and Other Revenue Accrual (7,311) 234 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. (11,938) 1,518 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. 2,790 Current Year Interest Accrual (632) Prior Year Interest Accrual 587 18,799 (8,140) 237 Change in Net Position of Governmental Activities 79,270$ FOR THE YEAR ENDED JUNE 30, 2023 (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 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 28 362 Governmental Activities Water Fund Sewer Service Fund Refuse Fund Hazmat Service Fund Total Internal Service Funds ASSETS Current Assets: Cash and Investments 23,384$ 31,240$ 490$ 609$ 55,723$ 46,596$ Restricted Cash and Investments 21,213 - - - 21,213 - Other Receivables, Net 6,350 628 688 18 7,684 165 Prepaids - - - - - 1,981 Joint Ventures 2,220 - - - 2,220 - Inventories 1,624 - - - 1,624 - Unbilled Receivables 1,766 457 625 - 2,848 - Total Current Assets 56,557 32,325 1,803 627 91,312 48,742 Non-Current Assets: Net Other Postemployment Benefits Asset 155 53 5 2 215 10 Total Non-Current Assets 155 53 5 2 215 10 Capital Assets: Land 3,907 - - - 3,907 - Buildings and Improvements 57,933 47,690 - - 105,623 67 Machinery and Equipment 15,463 3,905 215 - 19,583 12,957 Infrastructure 107,936 46,212 - - 154,148 - Construction in Progress - 839 - - 839 - Less Accumulated Depreciation (96,799) (45,595) (123) - (142,517) (3,615) Total Capital Assets 88,440 53,051 92 - 141,583 9,409 Total Assets 145,152 85,429 1,900 629 233,110 58,161 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows Related to Pensions 6,779 2,535 227 144 9,685 466 Deferred Outflows Related to Other Postemployment Benefits 506 173 18 7 704 32 Total Deferred Outflows of Resources 7,285 2,708 245 151 10,389 498 Total Assets and Deferred Outflows of Resources 152,437 88,137 2,145 780 243,499 58,659 LIABILITIES Current Liabilities: Accounts Payable 6,502 607 1,149 - 8,258 705 Accrued Payroll 190 81 8 3 282 8 Deposits Payable 1,493 - 156 - 1,649 - Interest Payable 15 6 1 - 22 - Current Portion of Claims Payable - - - - - 19,043 Current Portion of Compensated Absences 356 130 12 - 498 14 Long-Term Obligations Due Within One Year 624 233 21 13 891 43 Total Current Liabilities 9,180 1,057 1,347 16 11,600 19,813 Non-Current Liabilities: Compensated Absences 949 346 32 1 1,328 38 Long-Term Obligations Due in More than One Year 13,707 5,127 460 295 19,589 943 Net Pension Liability 7,504 2,806 252 156 10,718 513 Claims Payable - - - - - 47,578 Total Non-Current Liabilities 22,160 8,279 744 452 31,635 49,072 Total Liabilities 31,340 9,336 2,091 468 43,235 68,885 DEFERRED INFLOWS OF RESOURCES Deferred Inflows Related to Pensions 17 7 - - 24 1 Deferred Inflows Related to Other Postemployment Benefits 547 188 19 8 762 35 Total Deferred Inflows of Resources 564 195 19 8 786 36 NET POSITION Investment in Capital Assets 88,440 53,050 91 - 141,581 9,409 Restricted for: Capital Projects 21,213 - - - 21,213 - Unrestricted 10,880 25,556 (56) 304 36,684 (19,671) Total Net Position 120,533 78,606 35 304 199,478 (10,262) Total Liabilities, Deferred Inflows of Resources, and Net Position 152,437$ 88,137$ 2,145$ 780$ 243,499$ 58,659$ PROPRIETARY FUNDS STATEMENT OF NET POSITION CITY OF HUNTINGTON BEACH Business-Type Activities - Enterprise Funds (In Thousands) June 30, 2023 See Notes to the Financial Statements 29 363 Governmental Activities Water Fund Sewer Service Fund Refuse Fund Hazmat Service Fund Total Internal Service Funds OPERATING REVENUES Sales 39,620$ -$ -$ -$ 39,620$ -$ Fees and Charges for Service - 10,892 14,812 276 25,980 32,668 Other 9,314 90 87 - 9,491 1,528 Total Operating Revenues 48,934 10,982 14,899 276 75,091 34,196 OPERATING EXPENSES Water Purchases 17,981 - - - 17,981 - Supplies and Operations 11,063 8,944 14,901 95 35,003 3,604 Engineering 2,239 - - - 2,239 - Production and Distribution 9,400 - - - 9,400 - Maintenance 1 - - - 1 - Water Meters 1,824 - - - 1,824 - Water Quality 816 - - - 816 - Water Use Efficiency 298 - - - 298 - Claims and Judgments - - - - - 25,873 Depreciation 3,978 2,338 21 - 6,337 1,453 Total Operating Expenses 47,600 11,282 14,922 95 73,899 30,930 Operating Income (Loss) 1,334 (300) (23) 181 1,192 3,266 NON-OPERATING REVENUES (EXPENSES) Investment Income 807 537 4 8 1,356 69 Interest Expense (374) (140) (13) (8) (535) (25) Disposal of Machinery and Equipment (Loss) - - - - - (520) Total Non-Operating Revenues (Expenses) 433 397 (9) - 821 (476) Income (Loss) Before Transfers 1,767 97 (32) 181 2,013 2,790 TRANSFERS Transfers In - - 51 - 51 - Transfers Out - - - (13) (13) - Total Transfers - - 51 (13) 38 - Change in Net Position 1,767 97 19 168 2,051 2,790 Net Position - Beginning of Year 118,766 78,509 16 136 197,427 (13,052) Net Position - End of Year 120,533$ 78,606$ 35$ 304$ 199,478$ (10,262)$ Business-Type Activities - Enterprise Funds (In Thousands) FOR THE YEAR ENDED JUNE 30, 2023 PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION CITY OF HUNTINGTON BEACH See Notes to the Financial Statements 30 364 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 45,161$ 10,888$ 15,045$ 268$ 71,362$ 34,133$ Cash Paid to Employees for Services (10,178) (4,189) (434) (91) (14,892) (363) Cash Paid to Suppliers of Goods and Services (29,186) (4,723) (14,388) (3) (48,300) (20,027) Other Operating Items Net Cash and Investment Provided (Used) by Operating Activities 5,797 1,976 223 174 8,170 13,743 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers In - - 51 - 51 - Transfers Out - - - (13) (13) - Principal Paid (621) (233) (21) (13) (888) (43) Interest Paid (374) (140) (13) (8) (535) (26) Net Cash and Investments Provided (Used) by Noncapital Financing Activities (995) (373) 17 (34) (1,385) (69) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of Capital Assets (2,065) (1,857) - - (3,922) (5,156) Net Cash and Investments Provided (Used) by Capital and Related Financing Activities (2,065) (1,857) - - (3,922) (5,156) CASH FLOWS FROM INVESTING ACTIVITIES Investment Income 807 537 4 8 1,356 69 Net Cash and Investments Provided (Used) by Investing Activities 807 537 4 8 1,356 69 Net Increase (Decrease) in Cash and Investments 3,544 283 244 148 4,219 8,587 Cash and Investments - Beginning of Year 41,053 30,957 246 461 72,717 38,009 Cash and Investments - End of Year 44,597$ 31,240$ 490$ 609$ 76,936$ 46,596$ RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH AND INVESTMENTS PROVIDED (USED) BY OPERATING ACTIVITIES Operating Income (Loss) 1,334$ (300)$ (23)$ 181$ 1,192$ 3,266$ Adjustments to Reconcile Operating Income (Loss) to Net Cash and Investments Provided (Used) by Operating Activities Depreciation 3,978 2,338 21 - 6,337 1,453 (Increase) Decrease in Other Receivables, Net (3,542) (49) 83 (8) (3,516) (63) (Increase) in Unbilled Receivables (204) (45) (93) - (342) - Decrease in Prepaids - - - - - (1,186) (Increase) in Joint Ventures (404) - - - (404) - (Increase) in Inventory (180) - - - (180) - (Increase) in Net Pension Asset 5,608 2,098 188 124 8,018 388 Decrease in Net Other Postemployment Benefits Asset 305 104 11 5 425 19 Increase (Decrease) in Accounts Payable 4,445 (81) 69 - 4,433 40 (Decrease) in Accrued Payroll (329) (133) (13) (9) (484) (11) (Decrease) in Deposits Payable (27) - 156 - 129 - Increase in Claims Payable - - - - - 10,190 Increase (Decrease) in Compensated Absences 127 16 3 (6) 140 11 (Increase) in Deferred Pension Outflow (5,624) (2,103) (189) (122) (8,038) (388) (Decrease) in Deferred Pension Inflow (6,222) (2,327) (209) (134) (8,892) (428) Increase in Net Pension Liability 6,967 2,606 234 149 9,956 479 (Increase) in Deferred Other Postemployment Benefits Outflow (144) (49) (5) (2) (200) (9) (Decrease) in Deferred Other Postemployment Benefits Inflow (291) (99) (10) (4) (404) (18) Net Cash and Investments Provided by Operating Activities 5,797$ 1,976$ 223$ 174$ 8,170$ 13,743$ NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES There were no noncash investing, capital, or financing activities during the year ended June 30, 2023. Business-Type Activities - Enterprise Funds CITY OF HUNTINGTON BEACH STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (In Thousands) See Notes to the Financial Statements 31 365 ASSETS Custodial Funds Pension Trust Fund - Retirement Supplemental Fund Huntington Beach Redevelopment Successor Agency Private Purpose Trust Cash and Investments 4,102$ 5$ 11,818$ Cash and Investments with Fiscal Agent 3,329 - 2,647 Mutual Funds - 63,268 - Money Market Funds - 554 - Accounts Receivable, Net 895 - - Interest Receivable - - 69 Total Assets 8,326 63,827 14,534 LIABILITIES Current Liabilities: Accounts Payable 1,522 - 319 Accrued Payroll - - 4 Advances from City of Huntington Beach - - 1,363 Long-Term Obligations Due Within One Year - - 4,123 Total Current Liabilities 1,522 - 5,809 Long-Term Obligations: Long-Term Obligations Due in More than One Year - - 16,521 Total Long-Term Obligations - - 16,521 Total Liabilities 1,522 - 22,330 NET POSITION Restricted for Pension Benefits - 63,827 - Restricted for Individuals and Organizations 6,804 - (7,796) Total Net Position 6,804$ 63,827$ (7,796)$ CITY OF HUNTINGTON BEACH STATEMENT OF FIDUCIARY FUND NET POSITION FIDUCIARY FUNDS JUNE 30, 2023 (In Thousands) See Notes to the Financial Statements 32 366 ADDITIONS Custodial Funds Pension Trust Fund - Retirement Supplemental Fund Huntington Beach Redevelopment Successor Agency Private Purpose Trust Employer Contributions -$ 6,049$ -$ Collected from Property Owners 1,552 - 11,434 Business Improvement District Taxes 6,960 - - Parking Assessments 2,446 - - Total Additions Before Investment Income 10,958 6,049 11,434 Investment Income: Investment Income (Loss)127 4,935 217 Less: Investment Expense - (112) - Net Investment Income (Loss) 127 4,823 217 Total Additions 11,085 10,872 11,651 DEDUCTIONS Benefits - 5,712 - Administrative Costs 20 334 - Payments to Other Organizations 7,785 - - Economic Development - - 250 Interest and Fiscal Agency Expenses 1,359 - 1,247 Principal 1,800 - - Total Deductions 10,964 6,046 1,497 Change in Net Position 121 4,826 10,154 Net Position - Beginning of Year 6,683 59,001 (17,950) Net Position - End of Year 6,804$ 63,827$ (7,796)$ STATEMENT OF CHANGES IN FIDUCIARY FUND NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (In Thousands) CITY OF HUNTINGTON BEACH See Notes to the Financial Statements 33 367 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 Footnote Number Description Page 1. Summary of Significant Accounting Policies ............................ 35-52 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 ................................................................. 93-104 12. Capital Assets ................................................................................ 104-105 13. Investment in Joint Ventures ....................................................... 106 14. Leases ............................................................................................. 106 15. Successor Agency Trust for Assets of the Former Redevelopment Agency of the City of Huntington Beach ..... 107-112 16. Commitments and Contingencies .............................................. 112-116 17. Other Information ......................................................................... 117 18. Subsequent Events ...................................................................... 117 34 368 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. 35 369 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. 36 370 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $82,564,000 of governmental activities restricted net position, of which $45,438,000 is restricted by enabling legislation. The government-wide Statement of Net Position reports $21,213,000 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. 37 371 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $173,034,000 of governmental activities unrestricted net position, which is largely a result of the new CalPERS Unfunded Accrued Liability incurred as a result of the -7.5 percent CalPERS investment loss in FY 2021/22 recognized in the current year financial statements. The City’s Long-Term Obligations at June 30, 2023 is $590,950,000, of which, $559,315,000 is payable from Governmental Activities. The government- wide Statement of Net Position reports $36,684,000 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. 38 372 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. 39 373 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 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 committed or assigned fund balance. Encumbrances outstanding as of June 30, 2023, 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 $1 million taken by another government entity; Drop in projected/actual revenue of more than 5% of the General Fund adopted revenue budget; and, Should the Economic Uncertainties Reserve be used, and its level falls below the minimum amount of two months of General Fund expenditures adopted budget, the goal is to replenish the fund within three fiscal years. General Fund 6,826$ Grants Special Revenue 3,024 LMIHAF Capital Projects 2,408 Infrastructure 14,762 Other Governmental Funds 32,010 Total Encumbrance All Funds 59,030$ 40 374 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. 41 375 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. These statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. 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. 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. Infrastructure – accounts for expenditures related to certain designate infrastructure. Proprietary Funds Water Fund – used to account for water sales to customers. 42 376 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Sewer Service Fund – accounts for user fees charged to residents and businesses for sewer service. Refuse Fund – used to account for activities related to refuse collection and disposal. Hazmat Service Fund – accounts for user fees charged for the City’s hazardous waste material program. 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. 43 377 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. e. Prepaid Items Certain payments to vendors and individuals reflect costs applicable to a future accounting period and are recorded as prepaid items in both government-wide and fund financial statements. The cost of prepaid items are recorded as expenditures/expenses during the periods benefited. 44 378 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) f. 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 g. 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 45 379 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. 46 380 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. h. 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. i. 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 47 381 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) j. 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. k. 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. l. 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. m. 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. 48 382 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) n. 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 49 383 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) o. 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 p. 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. q. 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. 50 384 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) r. 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, 2021 June 30, 2021 Measurement Date (MD) June 30, 2023 June 30, 2022 June 30, 2022 Measurement Period (MP) July 1, 2022 to June 30, 2023 July 1, 2021 to June 30, 2022 July 1, 2021 to June 30, 2022 51 385 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) s. 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. 52 386 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 30% "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 / $75,000,000 See 10.0N of IPS 53 387 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 2. CASH AND INVESTMENTS (Continued) Investments Authorized by Debt Agreements Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the investment types that are authorized for investments held by a bond trustee, but bond indentures do allow for other forms of investments if approved in writing by the bond insurer that are not identified below. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk. Authorized Investment Type Maximum Maturity Maximum Percentage of Portfolio Maximum Investment in One Issuer U.S. Treasury Securities 5 Years No Limit No Limit Federal Agency Securities 5 Years No Limit No Limit Bankers' Acceptances 180 Days No Limit No Limit Time CDs 360 Days No Limit No Limit Negotiable CDs 360 Days No Limit No Limit LAIF N/A No Limit No Limit Commercial Paper 270 Days No Limit No Limit Municipal Bonds from Any State Life of Bond No Limit No Limit Money Market Funds N/A No Limit No Limit Investment Agreements Life of Bond No Limit No Limit Corporate Bonds 5 Years No Limit No Limit California Asset Mgmt. Program N/A No Limit No Limit Forward Purchase/Delivery Agreements Life of Bond No Limit No Limit 54 388 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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% 55 389 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 2. CASH AND INVESTMENTS (Continued) At year-end, the City had the following deposits and investments (amounts in thousands): Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value is to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City’s investments, including investments held by bond trustees, to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity (in thousands). Primary Government: Cash and Investments 368,697$ Cash and Investments with Fiscal Agent 12,285 Total Primary Government 380,982 Fiduciary Funds: Cash and Investments 15,925 Cash and Investments with Fiscal Agent 69,798 Total Fiduciary Funds 85,723 Total Deposits and Investments 466,705$ INVESTMENTS: Fair Value Less than 1 1 to 3 3 to 5 Total US Treasuries 79,016$ 26,521$ 37,881$ 14,614$ 79,016$ US Agency Securities*179,931 30,547 107,163 42,221 179,931 Mutual Funds 63,268 63,268 - - 63,268 Money Market Funds 1,691 1,691 - - 1,691 Medium Term Notes - IADB 27,325 8,980 18,345 - 27,325 Corporate Bonds 44,687 9,636 28,668 6,383 44,687 Local Agency Investment Fund 3,090 3,090 - - 3,090 California Asset Mgmt Program 32,548 32,548 - - 32,548 PARS Pension Rate Stabilization Program 18,141 18,141 - - 18,141 Total Investments 449,697$ 194,422$ 192,057$ 63,218$ 449,697 Total Deposits 17,008 Total Deposits and Investments 466,705$ * Security is callable, but classified above according to original maturity date Investment Maturities (In Years) 56 390 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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): Fair Value Issuer Investment Type Amount Federal Home Loan Bank U.S. Government Sponsored Enterprise Securities 129,305$ Federal Farm Credit Bank U.S. Government Sponsored Enterprise Securities 22,587$ Int'l Bank for Recon & Development IBRD 18,345$ U.S. Treasury Notes Obligations of the United States Treasury 79,016$ Remaining as of Year End INVESTMENTS: Minimum Legal Rating Total AAA AA A Not Rated US Treasuries N/A 79,016$ 79,016$ -$ -$ -$ US Agency Securities* N/A 179,931 179,931 - - - Mutual Funds N/A 63,268 - - - 63,268 Money Market Funds AAA 1,691 1,691 - - - Medium Term Notes - IADB AA 27,325 27,325 - - - Corporate Bonds A 44,687 - 8,972 35,715 - Local Agency Investment Fund N/A 3,090 - - - 3,090 California Asset Mgmt Program N/A 32,548 32,548 - - - PARS Pension Rate Stabilization Program N/A 18,141 - - - 18,141 Total Investments 449,697$ 320,511$ 8,972$ 35,715$ 84,499$ Note: All US Agencies are rated AAA by Moody's and AA by S&P 57 391 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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, 2023, 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. 58 392 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 2. CASH AND INVESTMENTS (Continued) 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 $1.00. The Pool invests in obligations of the United States Government and its agencies, high- quality, short-term debt obligations of U.S. companies and financial institutions. The Pool is a permitted investment for all local agencies under California Government Code Section 53601(p). Investment in Public Agency Retirement Services Pension Rate Stabilization Program The City established a Section 115 pension trust account within the Public Agency Retirement Services Pension Rate Stabilization Program (PARS PRSP) to hold assets that are legally restricted for use in administering the City’s defined benefit pension plan. The pension trust fund’s specific cash and investments are managed by a third- party portfolio manager under guidelines approved by the City. 59 393 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 2. CASH AND INVESTMENTS (Continued) Fair Value Measurement The City categorizes its fair value investments within the fair value hierarchy established by generally accepted accounting principles. The City has the following recurring fair value measurements as of June 30, 2023 (in thousands): 3. OTHER RECEIVABLES A summary of Other Receivables as of June 30, 2023 is as follows (in thousands): INVESTMENTS: Level 1 Level 2 Level 3 Total U.S. Treasuries -$ 79,016$ -$ $ 79,016 U.S. Agency Securities - 179,931 - 179,931 Mutual Funds 63,268 - - 63,268 Medium Term Notes - IADB - 27,325 - 27,325 Corporate Bonds - 44,687 - 44,687 Total Investments 63,268$ 330,959$ -$ 394,227$ Fair Value Hierarchy FY2022-23 Description Amount Developer Loans Receivable 39,679$ Emerald Cove Loan Receivable 6,694 Housing Rehabilitation Loans Receivable 2,310 First Time Homebuyers Receivable 1,630 Emergency Medical Fee Receivable 3,301 CDBG Program Receivable 975 Other Grants Receivable 3,321 Other Receivable 6,654 Total Other Receivables 64,564 Allowance for Uncollectible Developer Loans (39,679) Net Other Receivables on Governmental Fund Financial Statements 24,885$ Other Receivables Reconciliation Net Receivable on Government-wide Financial Statements 41,373$ Taxes Receivable on Governmental Fund Financial Statements (16,323) Other Receivables on Internal Service Fund (165) Net Other Receivables on Governmental Fund Financial Statements 24,885$ 60 394 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 3. OTHER RECEIVABLES (Continued) a. Developer Loans Loans made to developers to construct or rehabilitate certain facilities under deferred loan agreements total $39,679,000 at year-end. These loans are allowed until a future event occurs. Loans to the Low and Moderate Income Housing Asset Fund total $20,109,000, loans made under the Home Program total $14,483,000 and loans made under the Affordable Housing In-Lieu Program total $5,087,000. Interest rates on these loans range from 0% to 10%. The allowance for uncollectible developer loans is $36,679,000 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, 2023 is $6,694,000. 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 $2,310,000 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 $1,630,000 at year-end. These loans are deferred until a future event occurs. 61 395 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 4. UNEARNED REVENUE Governmental and enterprise funds defer revenue recognition in connection with resources that have been received as of year-end, but not yet earned (unearned revenue). The amounts are as follows (in thousands): 5. UNAVAILABLE REVENUE Certain revenues in governmental funds are considered unavailable revenue until received. All revenues including property and sales tax are recognized in the year earned or levied in the government-wide financial statements, but are recorded as unavailable revenue in the fund financial statements to the extent they are not collected within 60 days after year-end. The amounts are as follows (in thousands): Deferred Loans to developers and qualified individuals for housing rehabilitation and to first time homebuyers are discussed in Note 3. General Fund Grants Special Revenue Total Unearned Revenue Community Services Unearned Revenue (Classes)1,090$ -$ 1,090$ Public Works - Unearned Revenue 32 -32 Grants -2,965 2,965 Total $ 1,122 $ 2,965 $ 4,087 General Fund Grants Special Revenue LMIHAF Other Governmental Funds Total Unavailable Revenue Grants -$ 2,735$ -$ -$2,735$ Deferred Loans: Emerald Cove - - 6,694 -6,694 Housing Rehabilitation -2,310 - - 2,310 First Time Homebuyers --1,630 -1,630 Other Unavailable Revenue 339 593 -57 989 Total 339$ 5,638$ 8,324$ 57$ 14,358$ 62 396 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 59,878$ CalPERS Safety Plan 92,092 Supplemental Plan (Note 7) 8,788 Total 160,758$ Differences between Expected and Actual Experience Total CalPERS Miscellaneous Plan 148$ 148$ CalPERS Safety Plan 2,981 2,981 Total 3,129$ 3,129$ Change to Net Deferred employer Difference Between Differences between pension contributions Projected and Actual Changes Expected and made after Investment Earnings in assumptions Actual Experience measurement date Total CalPERS Miscellaneous Plan 37,275$ 11,564$ 263$ 7,451$ 56,553$ CalPERS Safety Plan 53,093 21,764 77 13,220 88,154 Supplemental Plan (Note 7)3,268 - - - 3,268 Total 93,636$ 33,328$ 340$ 20,671$ 147,975$ 63 397 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 6. RETIREMENT PLAN – NORMAL (Continued) Pension expenses for the measurement period ending June 30, 2022 (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 15,828$ CalPERS Safety Plan 21,878 Supplemental Plan (Note 7) 2,047 Total 39,753$ 64 398 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. 65 399 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 6. RETIREMENT PLAN – NORMAL (Continued) The Plans’ provisions and benefits in effect at June 30, 2023 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, 2022 - June 30, 2023 15.000% 15.000% 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, 2022 - June 30, 2023 27.590%27.590% Miscellaneous Agent Plans Safety Agent Plans 66 400 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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, 2022, 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 15.000% and 27.590% for the miscellaneous and safety plans, respectively, for the period July 1, 2022 through June 30, 2023. At June 30, 2021, the valuation date, the following employees were covered by the benefit terms for each Plan: Miscellaneous Safety Active members 553 384 Transferred members 476 75 Terminated members 369 65 Retired members and beneficiaries 1097 650 67 401 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 6. RETIREMENT PLAN – NORMAL (Continued) d. Net Pension Liability The City’s net pension liability is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 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 net pension liability is illustrated below: Actuarial Assumptions – The total pension liability in the June 30, 2021 actuarial valuation, rolled forward to June 30, 2022 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 Actuarial Cost Method 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 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website. 6.90% Net of Pension Plan Investment and Administrative Expenses; includes Inflation Derived using CalPERS’ membership data for all funds The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter 6.90% 2.30% Varies by entry age and service 68 402 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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: Assumed asset Asset Class1 Allocation Real Return1,2 Global Equity - Cap-weighted 30.00%4.54% Global Equity - Non-Cap-weighted 12.00%3.84% Private Equity 13.00%7.28% Treasury 5.00%0.27% Mortgage-backed Securities 5.00%0.50% Investment Grade Corporates 10.00%1.56% High Yield 5.00%2.27% Emerging Market Debt 5.00%2.48% Private Debt 5.00%3.57% Real Assets 15.00%3.21% Leverage (5.00)%(0.59)% 1 An expected inflation of 2.30% used for this period. 2 Figures are based on the 2021 Asset Liability Management study. 69 403 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 6. RETIREMENT PLAN – NORMAL (Continued) Discount Rate – The discount rate used to measure the total pension liability was 6.90%. 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 – 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. 70 404 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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, 2021 (Valuation Date)619,966$ 671,565$ (51,599)$ Changes in the year: Service cost 8,174 - 8,174 Interest on the total pension liabilities 43,253 - 43,253 Changes of Assumptions 19,824 - 19,824 Differences between expected and actual experience 451 - 451 Benefit payments, including refunds of members contributions (34,942) (34,942) - Contributions - employer - 6,951 (6,951) Contributions - employee - 3,533 (3,533) Net investment income - (49,840) 49,840 Administrative expenses - (419) 419 Net changes 36,760 (74,717) 111,477 Balance at June 30, 2022 (Measurement Date) 656,726$ 596,848$ 59,878$ Total Pension Liability Plan Fiduciary Net Position Net Pension Liability (Asset) Balance at June 30, 2021 (Valuation Date) 825,437$ 882,705$ (57,268)$ Changes in the year: Service cost 14,683 - 14,683 Interest on the total pension liabilities 57,872 - 57,872 Changes of Assumptions 28,785 - 28,785 Differences between expected and actual experience 102 - 102 Benefit payments, including refunds of members contributions (45,876) (45,876) - Contributions - employer - 13,579 (13,579) Contributions - employee - 4,985 (4,985) Net investment income - (65,933) 65,933 Administrative expenses - (549) 549 Net changes 55,566 (93,794) 149,360 Balance at June 30, 2022 (Measurement Date) 881,003$ 788,911$ 92,092$ Miscellaneous Plan Safety Plan 71 405 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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, 2021), the net pension asset was $51,599,000 for the Miscellaneous Plan and $57,268,000 for the Safety Plan. For the measurement period ending June 30, 2022 (the measurement date), the City incurred a pension expense of $15,828,000 and $21,878,000 for the Miscellaneous and Safety Plans, respectively. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive and retired) as of the beginning of the measurement period. Discount Rate - 1% Current Discount Discount Rate + 1% (5.90%) Rate (6.90%) (7.90%) Miscellaneous Plan 145,638$ 59,878$ (10,540)$ Safety Plan 210,004 92,092 (4,315) Aggregate Total 355,642$ 151,970$ (14,855)$ Plan's Aggregate Net Pension Liability/(Asset) 72 406 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 2021-22 measurement period, the EARSL for each plan is as follows: At June 30, 2023 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 4.1 Deferred outflows Deferred inflows of Resources of Resources Difference between projected and actual earning on pension plan investments 37,275$ -$ Changes in assumptions 11,564 - Difference between expected and actual experience 263 (148) Contributions made subsequent to the measurement date 7,451 - Total 56,553$ (148)$ Deferred outflows Deferred inflows of Resources of Resources Difference between projected and actual earning on pension plan investments 53,093$ -$ Changes in assumptions 21,764 - Difference between expected and actual experience 77 (2,981) Contributions made subsequent to the measurement date 13,220 - Total 88,154$ (2,981)$ Miscellaneous Plan Safety Plan 73 407 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 6. RETIREMENT PLAN – NORMAL (Continued) For the Miscellaneous Plan and Safety Plan, $7,451,000 and $13,220,000, 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, 2024. 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 $24,918,000 to an irrevocable trust from the prefunded amounts. The plan and trust are reported as a pension trust fund in the City’s financial statements on a full accrual basis. Measurement Periods Ended June 30,Miscellaneous Safety 2023 15,232$ 15,306$ 2024 9,922 16,022 2025 4,749 14,747 2026 19,050 25,877 48,953$ 71,952$ Deferred Outflows / (Inflows) of Resources 74 408 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $626. Effective in 1998 (exact dates are different for various associations), new City employees are ineligible to participate in the Supplemental Employee Retirement Plan. Employees Covered: At June 30, 2023, the measurement date, the following employees were covered by the benefit terms for the Plan: c. Employer Contributions The City’s policy is to make required contributions as determined by the Supplemental Plan’s actuary. The required contributions were determined as part of the June 30, 2021 actuarial valuation. The City is required to contribute the actuarially determined rate of 3.5% of total payroll for all permanent employees for the year ended June 30, 2023. There are no employee contributions required for the plan. Survivor and termination benefits are not included in the plan. Administrative costs of this plan are financed through investment earnings. For the year ended June 30, 2023, the contributions were (in thousands): Inactive employees receiving benefits 742 Active employees 49 Total 791 Contributions - employer 6,046$ 75 409 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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, 2023 is listed below: Quoted market prices have been used to value investments as of June 30, 2023. 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, 2023: Asset Class Strategic Allocation Allocation as of June 30,2023 Long-Term Expected Rate of Return Fixed Income 40.00%37.60%1.55% Equities 27.00%55.49%5.35% Real Estate 10.00%6.03%0.00% Commodities 2.00%0.00%0.00% Cash and Equivalents 0.00%0.88%0.45% Total 79.00%100.00% Fidelity 500 Index Fund 25.21% Fidelity US Bond Index 18.79% Vanguard Ftse Developed Etf 17.04% Baird Aggregate Bond Fd Instl 6.93% Doubleline Total Ret Bd I 6.89% Ishares Core US Reit Etf 6.03% Concentration of Investments Equaling or Exceeding 5% 76 410 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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, 2023, the annual money-weighted rate of return on the Plan’s investments, net of pension plan investment expenses, was 8.37%. 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, 2023, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2023 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. 77 411 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 7. RETIREMENT PLAN – SUPPLEMENTAL (Continued) Actuarial Assumptions – The total pension liabilities in the June 30, 2021 actuarial valuations for the June 30, 2023 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 78 412 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. 79 413 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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, 2022 74,151$ 58,999$ 15,152$ Changes in the year: Service cost 237 - 237 Interest on the total pension liabilities 3,934 - 3,934 Differences between expected and actual experience - - - Changes of Assumptions - - - Benefit payments, including refunds of members contributions (5,712) (5,712) - Contributions - employer - 6,046 (6,046) Net investment income - 4,823 (4,823) Administrative expenses - (334) 334 Net changes (1,541) 4,823 (6,364) Balance at June 30, 2023 72,610$ 63,822$ 8,788$ Supplemental Plan Discount Rate - 1% (4.50%) Current Discount Rate (5.50%) Discount Rate + 1% (6.50%) 15,814$ 8,788$ 2,792$ Plan's Aggregate Net Pension Liability/(Asset) (in thousands) 80 414 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 7. RETIREMENT PLAN – SUPPLEMENTAL (Continued) f. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2023, the City recognized pension expense in the amount of $2,047,000 for the Supplemental Plan. At June 30, 2023, the City reported deferred outflows of resources related to the supplemental pension plan from the following source (in thousands): For the Supplemental Plan, $3,268,000 was reported as deferred outflows of resources related to pensions which will be recognized in pension expense as follows (in thousands): Deferred Outflows of Resources Difference between projected and actual earnings on pension plan investments 3,268$ Year Ended June 30, Deferred Outflows/ (Inflows) of Resources 2024 598$ 2025 288 2026 2,696 2027 (314) 3,268$ 81 415 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. 82 416 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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, 2022 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 $904,000 for year ended June 30, 2023. 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 ($143 in 2021, $149 in 2022, and $151 in 2023). 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 $90.60 per employee for the Huntington Beach Firefighter’s Association (HBFA) and $143.45 for all other Safety groups in 2023. 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 307 212 Inactive employees not yet receiving benefits 312 - Active Plan Members 858 391 Total Plan Participants 1,477 603 83 417 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 8. OTHER POST EMPLOYMENT BENEFITS (Continued) The City’s net OPEB liability was measured as of June 30, 2022 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 - $151 in 2023, 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 2023 6.50%5.65%2030 4.95%4.45% 2024 6.25%5.45%2031-35 4.80%4.35% 2025 6.00%5.25%2036-45 4.65%4.25% 2026 5.75%5.05%2046-55 4.50%4.20% 2027 5.55%4.90%2056-65 4.35%4.15% 2028 5.35%4.75%2066-75 4.05%3.95% 2029 5.15%4.60%2076+ 3.75%3.75% 84 418 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 5.75 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 34%4.56% Fixed Income 41%1.56% Treasury Inflation-Protected Securities ("TIPS") 5%-0.08% Commodities 3%1.22% Real Estate Investment Trusts ("REITS")17%4.06% Total 100% * Long-term expected rate of return is 5.75% CERBT Strategy 2 85 419 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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, 2022 (in thousands): 1% Decrease Current Discount Rate 1% Increase (4.75%) (5.75%) (6.75%) Net OPEB Liability 1,828$ (2,024)$ (5,189)$ Total OPEB Liability Plan Fiduciary Net Position Net OPEB Liability / (Asset) (a)(b)(c) = (a) - (b) Balance at June 30, 2022 30,276$ 36,286$ (6,010)$ (Measurement Date June 30, 2021) Changes recognized for the measurement period: Service Cost 1,004 - 1,004 Interest 1,655 - 1,655 Assumption Changes (891) - (891) Contributions - Employer - 2,499 (2,499) Net Investment Income - (4,561) 4,561 Benefit Payments (2,352) (2,352) - Administrative Expenses - (156) 156 Net Changes (584) (4,570) 3,986 Balance at June 30, 2023 29,692$ 31,716$ (2,024)$ (Measurement Date June 30, 2022) Increase / (Decrease) 86 420 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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, 2022 (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 (5.50% Non-Medicare / 4.65% Medicare, decreasing to 2.75% Non-Medicare / 2.75% Medicare) (6.50% Non-Medicare / 5.65% Medicare, decreasing to 3.75% Non-Medicare / 3.75% Medicare) (7.50% Non-Medicare / 6.65% Medicare, decreasing to 4.75% Non-Medicare / 4.75% Medicare) Net OPEB Liability (5,447)$ (2,024)$ 2,335$ 5 Years Net difference between projected and actual earnings on OPEB plan investments 87 421 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 8. OTHER POST EMPLOYMENT BENEFITS (Continued) OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB As of June 30, 2023, the City incurred OPEB expense of $292,000. As of June 30, 2023, the City reported deferred outflows of resources related to OPEB from the following sources: The $1,997,000 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2022 measurement date will be recognized as a reduction of the net OPEB liability during the Fiscal Year ending June 30, 2024. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows (in thousands): Deferred Outflows Deferred Inflows of Resources of Resources OPEB Contributions subsequent to the measurement date 1,997$ -$ Difference between expected and actual experience 639 4,682 Changes in Assumptions 1,191 2,477 Net difference between projected and actual earnings on OPEB Plan Investments 2,792 - 6,619$ 7,159$ Measurement Periods Ended June 30, 2023 (568)$ 2024 (482) 2025 (531) 2026 482 2027 (739) Thereafter (699) (2,537)$ Deferred Outflows/ (Inflows) of Resources 88 422 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 are two claims that exceed the self-insured retention of $1,000,000 and is not covered under the City’s liability insurance plan. Refer to note 18 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. 89 423 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $24.3 million deficit at year-end at the 55 percent confidence level. The City has established plans to help reduce the deficit in this fund. This will be accomplished by additional transfers from the General Fund, Proprietary funds, and other governmental funds in which employees are charged over the next nine years. Claims activity and liabilities relating to the current and prior year are (in thousands): Workers' Compensation General Liability Total Balance June 30, 2021 34,794$ 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 Additions 12,154 15,848 28,002 Reductions (10,830) (6,982) (17,812) Net Increase (Decrease)1,324 8,866 10,190 Balance June 30, 2023 44,087$ 22,534$ 66,621$ 90 424 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 10. INTERFUND TRANSACTIONS a. Advances to/from Other Funds The amounts at year-end were (in thousands): There is a $1,363,000 advance from the LMIHAF Capital Projects Fund to the Redevelopment Agency Private Purpose Trust Fund as of June 30, 2023 for Main Pier property acquisitions prior to the dissolution of the Redevelopment Agency on February 1, 2012. No set interest rates or fixed repayment terms have been established. Redevelopment Agency Private Purpose Trust Advances from (Receivable): Major Governmental Funds LMIHAF Capital Projects 1,363$ Advances to (Payable): 91 425 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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: $29,607,000 was transferred from the Grant Fund to the General Fund to fully expend ARPA funds for eligible police and fire personnel costs. $51,000 was transferred from the General Fund to the Refuse Enterprise Fund to fund the senior citizen rate reduction on refuse charges. $6,263,000 was transferred from the General Fund to Other Governmental Funds for debt service payments of $2,963,000 and technology upgrades within the Police Department totalling $3,300,000. $13,000 was transferred from the Hazmat Service Enterprise Fund to the General Fund to cover administrative and overhead expenditures. $28,741,00 was transferred from the General Fund to the Infrastructure Fund for infrastructure-related projects such as road repairs and enhancement and other capital improvement projects. Transfers In General Fund Grants Special Revenue Other Governmental Funds Total Governmental Funds Hazmat Service Fund Total Transfers In General Fund -$ 29,607$ 400$ 30,007$ 13$ 30,020$ Grants Special Revenue 1 - - 1 - 1 Pension Liability 344 - - 344 - 344 Infrastructure 28,741 - - 28,741 - 28,741 Other Governmental Funds 6,263 - - 6,263 - 6,263 Total Governmental Funds 35,349 29,607 400 65,356 13 65,369 Refuse Fund 51 - - 51 - 51 Total Enterprise Funds 51 - - 51 - 51 Total Transfers Out 35,400$ 29,607$ 400$ 65,407$ 13$ 65,420$ Transfers Out 92 426 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 11. LONG-TERM OBLIGATIONS Below is a schedule of changes in long-term governmental obligations for the year (in thousands): Governmental Activities: June 30, 2022 Additions Retirements June 30, 2023 Accrued Interest Due Within One Year Public Financing Authority: 2014(a) Lease Revenue Bonds 11,215$ -$ (685)$ 10,530$ 121$ 720$ 2020(a) Lease Revenue Bonds 4,835 - - 4,835 36 - 2020(b) Lease Revenue Bonds 11,315 - (1,520) 9,795 21 1,530 Total Public Financing Authority 27,365 - (2,205) 25,160 178 2,250 Other Long-Term Obligations: Compensated Absences 15,045 3,376 (3,603) 14,818 - 2,039 Claims Payable 56,431 28,002 (17,812) 66,621 - 19,043 Pollution Remediation 2,000 - - 2,000 - - LED Lighting Phase I 314 - (123) 191 1 126 I-Bank CLEEN Loan 1,586 - (303) 1,283 12 310 CEC Loan 2,063 - (266) 1,797 - 269 Pension Obligation Bonds 330,642 - (12,637) 318,005 347 12,683 Finance Purchase Agreement 11,714 7,742 (2,068) 17,388 61 3,097 Leases Payable 247 398 (189) 456 - 216 Subscriptions Payable 3,651 - (1,051) 2,600 33 1,011 Total Other Long-Term Obligations 423,693 39,518 (38,052) 425,159 454 38,794 Total Long-Term Obligations - Governmental Activities 451,058$ 39,518$ (40,257)$ 450,319$ 632$ 41,044$ 93 427 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $15,295,000 Security Lease with City Interest Rates 3.0% to 5.0% Interest Payment Dates March 1st, September 1st Principal Payment Dates September 1st Purpose of Debt Finance the construction of a new Senior Center Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2024 720$ 352$ 1,072$ 2025 750 319 1,069 2026 785 289 1,074 2027 810 265 1,075 2028 835 240 1,075 2029-2033 4,580 789 5,369 2034-2035 2,050 83 2,133 Total 10,530$ 2,337$ 12,867$ 94 428 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $4,835,000 Security Lease with City Interest Rates 4.0% to 5.0% Interest Payment Dates May 1st, November 1st Principal Payment Dates May 1st Purpose of Debt Defease 2010(a) Lease revenue Bonds which Defeased 1997 Leasehold Revenue Bonds (Construct Pier Plaza and Purchase 800 MHZ system), 2000 Lease Revenue Bonds (Capital Improvements and defeasance of Emerald Cove Certificate of Participation) Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2024 -$ 224$ 224$ 2025 - 224 224 2026 - 224 224 2027 - 224 224 2028 - 224 224 2029-2032 4,835 679 5,514 Total 4,835$ 1,799$ 6,634$ 95 429 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $14,440,000 Security Lease with City Interest Rates 0.329% to 1.831% Interest Payment Dates May 1st, November 1st Principal Payment Dates May 1st Purpose of Debt Defease 2011(a) Lease revenue Bonds which Defeased 2001(a) Leasehold Revenue Bonds (Construct Sports Complex and South Beach Phase II Improvements) and 2001(b) Lease Revenue Bonds (Defeased Civic Improvement Corporation Certificates) Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2024 1,530$ 129$ 1,659$ 2025 1,545 117 1,662 2026 1,560 103 1,663 2027 1,575 83 1,658 2028 1,600 61 1,661 2029-2030 1,985 41 2,026 Total 9,795$ 534$ 10,329$ 96 430 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $14,818,000 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 $66,621,000 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 97 431 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $3,000,000 Security Edwards Fire Station Interest Rate 2.32% Interest Payment Dates February 1st and August 1st Principal Payment Dates August 1st Purpose of Debt To purchase and upgrade street pole lighting to energy efficient LED light sources Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2024 310$ 26$ 336$ 2025 317 19 336 2026 324 11 335 2027 332 4 336 Total 1,283$ 60$ 1,343$ Year Ending June 30 Principal Interest Total 2024 126$ 5$ 131$ 2025 65 1 66 Total 191$ 6$ 197$ 98 432 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $3,000,000 Security Loan Agreement with CEC Interest Rate 1.00% Interest Payment Dates June 22nd and December 22nd Principal Payment Dates June 22nd and December 22nd Purpose of Debt To upgrade street pole lighting to energy efficient LED light sources Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2024 269$ 17$ 286$ 2025 272 15 287 2026 274 12 286 2027 277 9 286 2028 280 6 286 2029-2030 425 4 429 Total 1,797$ 63$ 1,860$ 99 433 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 11. LONG-TERM OBLIGATIONS (Continued) (7) Pension Obligation Bonds Year of Issuance 2021 Type of Debt Pension Obligation Bonds Principal Amount Original $341,501,000 Interest Rates 0.221% to 3.376% Interest Payment Dates June 15th and December 15th Principal Payment Dates June 15th Purpose of Debt Pay 85% of CalPERS UAL as of the June 30, 2019 valuation report. Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2024 12,683$ 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 13,291 7,855 21,146 2029-2033 70,952 34,789 105,741 2034-2038 81,029 24,703 105,732 2039-2043 87,758 10,848 98,606 2044 13,550 457 14,007 Total 318,005$ 111,822$ 429,827$ 100 434 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 In May 2023, a new purchase agreement was approved by City Council in the amount of $7,742,143 to finance fire equipments, engines and truck. Debt service requirements to maturity are (in thousands): (9) Lease Payable The City of Huntington Beach has entered into three leases as a lessee for the use of land and equipment and is required to make monthly fixed payments ranging from $4,982 to $7,195 over the lease terms. As of June 30, 2023, the value of the lease liability was $456,340. The future principal and interest lease payments as of June 30, 2023, were as follows: Year Ending June 30 Principal Interest Total 2024 216$ 8$ 224$ 2025 155 4 159 2026 85 1 86 Total 456$ 13$ 469$ Year Ending June 30 Principal Interest Total 2024 3,097$ 427$ 3,524$ 2025 2,473 361 2,834 2026 2,266 302 2,568 2027 2,324 245 2,569 2028 2,038 186 2,224 2029-2031 5,190 223 5,413 Total 17,388$ 1,744$ 19,132$ 101 435 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 11. LONG-TERM OBLIGATIONS (Continued) (10) Subscription Payable For the year ended June 30, 2023, the financial statements include the adoption of GASB Statement No. 96, Subscription-Based Information Technology Arrangements. The primary objective of this statement is to enhance the relevance and consistency of information about governments' subscription activities. This statement establishes a single model for subscription accounting based on the principle that subscriptions are financings of the right to use an underlying asset. Under this Statement, an organization is required to recognize a subscription liability and an intangible right-to-use subscription asset. The City of Huntington Beach has entered into six subscription agreements for the use of various IT software and is required to make annual fixed payments ranging from $15,018 to $544,839 over the subscription terms. As of June 30, 2023, the value of the subscription liability was $2,600,000. The future principal and interest subscription payment as of June 30, 2023, were as follows: Year Ending June 30 Principal Interest Total 2024 1,011$ 58$ 1,069$ 2025 963 36 999 2026 441 13 454 2027 91 4 95 2028 94 2 96 Total 2,600$ 113$ 2,713$ 102 436 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 11. LONG-TERM OBLIGATIONS (Continued) c. Long-Term Obligations – Business-Type Activities Below is a schedule of the long-term obligations of business-type activities (in thousands): (1) Compensated Absences There is no repayment schedule for the compensated absences amount of $1,826,000 relating to business-type activities. The balance for the outstanding business-type compensated absences is predominately related to the Water and Sewer funds. (2) Pension Obligation Bond Year of Issuance 2021 Type of Debt Pension Obligation Bonds Principal Amount Original $22,144,000 Interest Rates 0.221% to 3.376% Interest Payment Dates June 15th and December 15th Principal Payment Dates June 15th Purpose of Debt Pay 85% of CalPERS UAL as of the June 30, 2019 valuation report. Debt service requirements to maturity are (in thousands): June 30, 2022 Additions Retirements June 30, 2023 Accrued Interest Due Within One Year Compensated Absences 1,686$ 529$ (389)$ 1,826$ -$ 498$ Pension Obligation Bonds 21,368 - (888) 20,480 22 891 Total Long-Term Obligations - Business-Type Activities 23,054$ 529$ (1,277)$ 22,306$ 22$ 1,389$ Long-Term Obligations - Business-Type Activities: Year Ending June 30 Principal Interest Total 2024 891$ 531$ 1,422$ 2025 897 527 1,424 2026 907 518 1,425 2027 919 504 1,423 2028 934 489 1,423 2029-2033 4,989 2,129 7,118 2034-2038 5,696 1,420 7,116 2039-2042 5,247 446 5,693 Total 20,480$ 6,564$ 27,044$ 103 437 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 Governmental Activities June 30, 2022 Additions Dispositions June 30, 2023 Capital Assets, Not Depreciated: Land 369,538$ -$ -$ 369,538$ Construction in Progress 12,235 3,886 (4,872) 11,249 Total Capital Assets -Not Depreciated 381,773 3,886 (4,872) 380,787 Capital Assets Being Depreciated Buildings 221,759 5,757 (441) 227,075 Machinery and Equipment 75,098 18,451 (3,977) 89,572 Infrastructure 461,990 18,485 (976) 479,499 Right to Use Leased Asset 448 398 (174) 672 Right to Use SBITA Asset 3,651 - - 3,651 Total Capital Assets Being Depreciated 762,946 43,091 (5,568) 800,469 Less Accumulated Depreciation: Buildings (94,449) (5,247) 441 (99,255) Machinery and Equipment (55,588) (5,016) 3,433 (57,171) Infrastructure (244,465) (8,369) 976 (251,858) Right to Use Leased Asset (195) (126) 111 (210) Right to Use SBITA Asset - (724) - (724) Total Accumulated Depreciation (394,697) (19,482) 4,961 (409,218) Total Depreciated - Net 368,249 23,609 (607) 391,251 Total Capital Assets 1,144,719 46,977 (10,440) 1,181,256 Total Accumulated Depreciation (394,697) (19,482) 4,961 (409,218) Capital Assets of Governmental Activities - Net 750,022$ 27,495$ (5,479)$ 772,038$ 11. LONG-TERM OBLIGATIONS (Continued) 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): 12. CAPITAL ASSETS a. Changes in Capital Assets Capital asset activity for the year was (in thousands): June 30, 2022 Additions Retirements June 30, 2023 Community Facilities District No. 2000-1 2013 Special Tax Refunding Bonds 8,405$ -$ (675)$ 7,730$ Community Facilities District No. 2002-1 Special Assessment Tax Bonds 3,605 - (200) 3,405 Community Facilities District No. 2003-1 2013 Special Tax Refunding Bonds 14,670 - (925) 13,745 Total Community Facilities Districts 26,680 - (1,800) 24,880 Total Obligations Not Recorded in Financial Statements 26,680$ -$ (1,800)$ 24,880$ Community Facilities Districts: 104 438 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 Department: City Manager 54$ City Attorney 2 City Clerk 1 Finance 416 Community Development 135 Fire 288 Information Services 444 Police 222 Community Services 3,065 Library Services 358 Public Works 13,043 Internal Service Fund depreciation charged to functions 1,454 Total 19,482$ 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, 2022 Additions Dispositions June 30, 2023 Capital Assets, Not Depreciated: Land 3,907$ -$ -$ 3,907$ Construction in Progress 109 730 - 839 Total Capital Assets -Not Depreciated 4,016 730 - 4,746 Capital Assets Being Depreciated Buildings 105,623 - - 105,623 Machinery and Equipment 22,388 479 (3,284) 19,583 Infrastructure 151,668 2,725 (245) 154,148 Total Capital Assets Being Depreciated 279,679 3,204 (3,529) 279,354 Less Accumulated Depreciation: Buildings (36,930) (2,604) - (39,534) Machinery and Equipment (15,525) (1,266) 3,272 (13,519) Infrastructure (87,242) (2,467) 245 (89,464) Total Accumulated Depreciation (139,697) (6,337) 3,517 (142,517) Total Depreciated - Net 139,982 (3,133) (12) 136,837 Total Capital Assets 283,695 3,934 (3,529) 284,100 Total Accumulated Depreciation (139,697) (6,337) 3,517 (142,517) Capital Assets of Business Activities - Net 143,998$ (2,403)$ (12)$ 141,583$ Fund: Water 3,978$ Sewer Service 2,338 Refuse 21 Total 6,337$ 105 439 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 The City of Huntington Beach has entered into 27 leases as a lessor for the use of City land and infrastructures. The lessees are required to make fixed monthly payments ranging from $322 to $44,314 over the lease terms. The City recognized $1,662,482 in lease revenue and $104,926 in interest revenue during the current fiscal year related to these agreements. As of June 30, 2023, the lease receivable is $11,106,832 and deferred inflow of resources is $10,819,540. The future principal and interest payments as of June 30, 2023, were as follows: Year Ending June 30 Principal Interest Total 2024 1,612$ 105$ 1,717$ 2025 1,491 95 1,586 2026 1,501 87 1,588 2027 1,423 78 1,501 2028 833 70 903 2029-2033 1,590 243 1,833 2034-2038 840 201 1,041 2039-2043 808 139 947 2044-2048 640 79 719 2049-2053 369 22 391 Total 11,107$ 1,119$ 12,226$ 106 440 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. After enactment of the law, effective June 28, 2011, Redevelopment Agencies in the State of California generally cannot enter into new projects, obligations or commitments. Subject to the control of a newly established Oversight Board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). In future fiscal years, Successor Agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior Redevelopment Agency have been paid in full and all assets have been liquidated. ABX1 26 directs the State Controller of the State of California to review the propriety of any transfers of assets between Redevelopment Agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as of successor agency by ABX1 26. 107 441 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 15. SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued) b. Long-Term Debt Below is a schedule of changes in long-term obligations of the Successor Agency for the year (in thousands): (1) 1999 Tax Allocation Refunding Bonds Year of Issuance 1999 Type of Debt Tax Allocation Refunding Bonds Original Principal Amount $10,835,000 Security Tax Increment Interest Rates 3.00% to 5.05% Interest Payment Dates February 1st and August 1st Principal Payment Dates August 1st Purpose of Debt Prepay Agency’s 1992 Loans to Public Financing Authority Debt service requirements to maturity are (in thousands): Successor Agency: June 30, 2022 Additions Retirements June 30, 2023 Accrued Interest Due Within One Year Bonds Payable 1999 Tax Allocation Refunding Bonds 1,190$ -$ (405)$ 785$ 16$ 425$ 2002 Tax Allocation Bonds 2,575 - (875) 1,700 35 920 Total Bonds Payable 3,765 - (1,280) 2,485 51 1,345 Other Long-Term Obligations Mayer DDA 626 - (626) - - - Bella Terra OPA (Parking)3,481 - (1,613) 1,868 - 1,619 Bella Terra AHA (Phase II)12,118 - (789) 11,329 - 789 CIM DDA (Parking & Infrastructure)4,971 - (330) 4,641 243 353 CIM DDA (Additional Parking)337 - (16) 321 24 17 Total Other Long-Term Obligations 21,533 - (3,374) 18,159 267 2,778 Total Long-Term Obligations 25,298$ -$ (4,654)$ 20,644$ 318$ 4,123$ Year Ending June 30 Principal Interest Total 2024 425$ 29$ 454$ 2025 360 9 369 Total 785$ 38$ 823$ 108 442 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $2,605,000, principal and interest, for the outstanding 1999 and 2002 Tax Allocation Refunding Bonds as of June 30, 2022 from semi-annual Redevelopment Property Tax Trust Fund (RPTTF) revenue allocations. The 1999 and 2002 Tax Allocation Refunding Bonds are not a debt of the City of Huntington Beach, the State of California, nor any of its political subdivisions, and neither the City, the State nor any of its political subdivision is liable therefore, not in any event shall the bonds be payable out of funds or properties other than those of the Redevelopment Agency as set forth in the bond indenture. Year Ending June 30 Principal Interest Total 2024 920$ 62$ 982$ 2025 780 20 800 Total 1,700$ 82$ 1,782$ 109 443 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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. 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. As of year-end, the Successor Agency obligation under the agreement was completed. (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 $1,868,000. 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 $11,329,000. 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. 110 444 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $4,641,000. 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. 111 445 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $321,000. 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. 112 446 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $1,245,883 for the year ended June 30, 2023. 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 $1,767,586 (Jeep sales for 2023) 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 requested a hearing with the Court to appeal this determination. On February 17, 2023, the Superior Court of California issued a final ruling stating that the agreement did not constitute an enforceable obligation; thus, repayment was not required. 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. 113 447 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $22,400,000 loan for the purchase of the Waterfront property. The DOF denied this obligation in a follow up letter to the City dated August 24, 2022. The City has requested a hearing with the Court to appeal this determination. On February 17, 2023, the Superior Court of California issued a final ruling confirming the April 22, 2022 determination. Below is a schedule of the activity for the year (in thousands): June 30, 2022 Additions Reductions June 30, 2023 General Fund Direct Advances 2,312$ -$ -$ 2,312$ Indirect Advances 6,567 - - 6,567 Land Sales 32,833 - - 32,833 Interest 31,163 1,696 - 32,859 Total General Fund 72,875 1,696 - 74,571 Sewer Fund Direct Advances 301 7 - 308 Deferred Development Fees 188 4 - 192 Total Sewer Fund 489 11 - 500 Drainage Fund Direct Advances 727 16 - 743 Deferred Development Fees 201 4 - 205 Total Drainage Fund 928 20 - 948 Park Acquisition and Development Fund Direct Advances 5,983 140 - 6,123 Deferred Development Fees 444 10 - 454 Total Park Acquisition and Development Fund 6,427 150 - 6,577 Water Fund Direct Advances 4,503 17 - 4,520 Total Water Fund 4,503 17 - 4,520 Total All Funds 85,222$ 1,894$ -$ 87,116$ 114 448 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 $6,500,000. This would not be a City General Fund obligation. June 30, 2022 Additions Reductions June 30, 2023 General Fund Emerald Cove 3,245$ -$ -$ 3,245$ 115 449 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 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 City has requested a hearing with the Court to appeal this determination. On February 17, 2023, the Superior Court of California issued a final ruling confirming the April 22, 2022 determination. On May 19, 2023, the DOF issued a letter confirming the Court ruling. 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. 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. 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. 116 450 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2023 17. OTHER INFORMATION Fund and Accumulated Deficits The following funds have total fund deficits at year-end (in thousands): 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. 18. SUBSEQUENT EVENTS 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 $3.5 million in attorney’s fees. The City submitted an appeal, which was denied on July 19, 2023. The settlement was paid in full in September 2023. Internal Service Fund: Self Insurance Workers' Comp 24,342$ Self Insurance General Liability 8,420$ 117 451 REQUIRED SUPPLEMENTARY INFORMATION 118 452 THIS PAGE INTENTIONALLY LEFT BLANK 119 453 City of Huntington Beach Notes to Required Supplementary Information For the Year Ended June 30, 2023 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 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). 120 454 REVENUES Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Property Taxes 98,259$ 101,036$ 101,036$ -$ Sales Taxes 53,343 52,599 52,599 - Utility Taxes 18,457 22,558 22,558 - Other Taxes 23,075 32,390 32,418 28 Licenses and Permits 8,201 10,630 10,630 - Fines, Forfeitures and Penalties 4,534 3,945 3,945 - Use of Money and Property 16,997 20,008 21,401 1,393 Intergovernmental 2,729 3,988 4,024 36 Charges for Current Service 26,596 32,596 32,787 191 Other 1,626 2,516 2,606 90 Total Revenues 253,817 282,266 284,004 1,738 EXPENDITURES Current: City Council 403 456 453 3 City Manager 4,743 7,592 5,892 1,700 City Treasurer 275 417 417 - City Attorney 2,752 3,404 3,404 - City Clerk 1,143 1,521 1,441 80 Finance 6,420 8,093 7,372 721 Community Development 15,409 19,309 17,061 2,248 Fire 51,570 65,658 65,658 - Information Services 7,733 9,242 8,269 973 Police 78,443 95,301 93,796 1,505 Community Services 9,762 12,669 12,500 169 Library Services 5,451 7,149 6,951 198 Public Works 21,630 27,785 27,785 - Debt Service: Principal 696 4,000 4,000 - Interest 63 310 310 - Total Expenditures 206,493 262,906 255,309 7,597 Excess of Revenues Over Expenditures 47,324 19,360 28,695 9,335 OTHER FINANCING SOURCES (USES) Transfers In 31,474 30,051 30,020 (31) Leases (as Lessee)- - 398 398 Transfers Out (63,478) (35,517) (35,400) 117 Total Other Financing Sources (Uses) (32,004) (5,466) (4,982) 484 Net Change In Fund Balance 15,320 13,894 23,713 9,819 Fund Balance - Beginning of Year 102,824 102,824 102,824 - Fund Balance - End of Year 118,144$ 116,718$ 126,537$ 9,819$ CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2023 (In Thousands) General Fund See Accompanying Notes to Required Supplementary Information 121 455 REVENUES Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 130$ 130$ Intergovernmental 15,035 27,662 40,872 13,210 Other - - 3,741 3,741 Total Revenues 15,035 27,662 44,743 17,081 EXPENDITURES Current: City Manager 6 2,007 300 1,707 City Clerk - 1 1 - Finance - 37 37 - Community Development 2,947 7,710 3,343 4,367 Fire - 492 488 4 Police 1,016 5,019 2,716 2,303 Community Services 311 370 343 27 Library Services 60 285 204 81 Public Works 12,131 21,661 2,739 18,922 Total Expenditures 16,471 37,582 10,171 27,411 Excess of Revenues Over (Under) Expenditures (1,436) (9,920) 34,572 44,492 OTHER FINANCING USES Transfers In - - 1 1 Transfers Out (29,669) (29,607) (29,607) - Total Other Financing Sources (Uses) (29,669) (29,607) (29,606) 1 Net Change In Fund Balance (31,105) (39,527) 4,966 44,493 Fund Balance - Beginning of Year (4,311) (4,311) (4,311) - Fund Balance - End of Year (35,416)$ (43,838)$ 655$ 44,493$ (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, 2023 See Accompanying Notes to Required Supplementary Information 122 456 Measurement Period 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 Total Pension Liability Service cost 8,174$ 8,005$ 7,779$ 8,327$ 8,314$ 8,084$ 7,436$ 7,102$ 7,263$ Interest on total pension liability 43,253 42,217 41,058 40,150 38,769 37,749 37,194 35,653 34,412 Differences between expected and actual experience 451 (891) (6,087) (183) (2,042) (9,148) 1,072 (2,900) - Changes in assumptions 19,824 - - - (3,634) 30,762 - (8,565) - Benefit payments, including refunds of employee contributions (34,942) (33,392) (30,321) (28,508) (26,685) (25,312) (24,316) (23,377) (22,444) Net change in total pension liability 36,760 15,939 12,429 19,786 14,722 42,135 21,386 7,913 19,231 Total pension liability - beginning 619,966 604,027 591,598 571,812 557,090 514,955 493,569 485,656 466,425 Total pension liability - ending (a)656,726$ 619,966$ 604,027$ 591,598$ 571,812$ 557,090$ 514,955$ 493,569$ 485,656$ Plan Fiduciary Net Position Contributions - employer 6,951$ 150,917$ 16,879$ 14,816$ 13,495$ 12,316$ 10,982$ 9,747$ 9,066$ Contributions - employee 3,533 3,450 3,630 3,779 3,649 3,869 3,736 3,790 3,909 Investment income (49,840) 107,447 21,485 27,288 32,963 40,328 1,856 8,230 56,429 Administrative Expense (419) (443) (609) (296) (614) (536) (226) (418) (472) Benefit payments (34,942) (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 (74,717) 227,979 11,064 17,067 21,643 30,665 (7,968) (2,026) 46,488 Plan fiduciary net position - beginning 671,565 443,586 432,522 415,455 393,812 363,147 371,115 373,141 326,653 Plan fiduciary net position - ending (b)596,848$ 671,565$ 443,586$ 432,522$ 415,455$ 393,812$ 363,147$ 371,115$ 373,141$ Net pension liability - beginning (51,599) 160,441 159,076 156,357 163,278 151,808 122,454 112,515 139,771 Net pension liability (asset) - ending (a)-(b)59,878$ (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)90.88% 108.32% 73.44% 73.11% 72.66% 70.69% 70.52% 75.19% 76.83% Covered payroll 46,824$ 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 127.88% 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 nine years are shown. * For covered employee payroll, the measurement period of July 1, 2021 to June 30, 2022 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: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long- term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014. 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 - 99 123 457 (in Thousands) Measurement Period 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 Total Pension Liability Service cost 14,683$ 13,386$ 13,226$ 13,644$ 13,509$ 13,657$ 12,159$ 11,119$ 11,096$ Interest on total pension liability 57,872 56,114 54,597 53,048 51,223 49,350 48,390 46,160 44,246 Differences between expected and actual experience 102 (3,882) (4,721) (1,220) 2,584 (10,819) 2,678 (820) - Changes in assumptions 28,785 - - - (3,657) 40,352 - (11,054) - Benefit payments, including refunds of employee contributions (45,876) (44,362) (41,247) (38,958) (37,128) (34,222) (32,116) (30,535) (29,540) Net change in total pension liability 55,566 21,256 21,855 26,514 26,531 58,318 31,111 14,870 25,802 Total pension liability - beginning 825,437 804,181 782,326 755,812 729,281 670,963 639,852 624,982 599,180 Total pension liability - ending (a)881,003$ 825,437$ 804,181$ 782,326$ 755,812$ 729,281$ 670,963$ 639,852$ 624,982$ Plan Fiduciary Net Position Contributions - employer 13,579$ 257,381$ 25,848$ 23,063$ 21,058$ 20,629$ 18,703$ 17,791$ 15,152$ Contributions - employee 4,985 4,395 4,355 4,337 4,164 4,570 4,058 4,110 3,850 Investment income (65,933) 133,170 25,784 32,776 39,336 48,413 2,144 9,661 66,805 Administrative Expense (549) (532) (731) (355) (736) (640) (270) (497) (555) Benefit payments (45,876) (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 (93,794) 350,052 14,009 20,877 25,293 38,750 (7,510) 530 55,712 Plan fiduciary net position - beginning 882,705 532,653 518,644 497,767 472,474 433,724 441,234 440,704 384,992 Plan fiduciary net position - ending (b)788,911$ 882,705$ 532,653$ 518,644$ 497,767$ 472,474$ 433,724$ 441,234$ 440,704$ Net pension liability - beginning (57,268) 271,528 263,682 258,045 256,807 237,239 198,618 184,278 214,188 Net pension liability (asset) - ending (a)-(b)92,092$ (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)89.55% 106.94% 66.24% 66.30% 65.86% 64.79% 64.64% 68.96% 70.51% Covered payroll 48,023$ 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 191.77% 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 nine years are shown. * For covered employee payroll, the measurement period of July 1, 2021 to June 30, 2022 was used. Changes in assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long- term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014. 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 - 100 124 458 Total Pension Liability 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18** 2016-17 2015-16 2014-15 2013-14 Service cost 237$ 299$ 350$ 338$ 398$ 344$ 487$ 552$ 495$ 544$ Interest on total pension liability 3,934 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 (5,712) (5,668) (5,494) (5,012) (4,771) (3,388) (4,144) (3,773) (3,588) (3,548) Net change in total pension liability (1,541) (2,618) 5,695 5,630 (383) 1,241 1,834 4,634 826 824 Total pension liability - beginning 74,151 76,769 71,074 65,444 65,827 64,586 62,752 58,118 57,292 56,468 Total pension liability - ending (a)72,610$ 74,151$ 76,769$ 71,074$ 65,444$ 65,827$ 64,586$ 62,752$ 58,118$ 57,292$ Plan Fiduciary Net Position Contributions - employer 6,046$ 6,006$ 1,435$ 3,506$ 4,962$ 3,507$ 5,346$ 7,277$ 0 4,678$ 0 4,539$ Investment income 4,823 (11,362) 15,717 2,114 2,582 2,128 6,373 4,282 (1,313) 3,465 Administrative Expense (334) (338) (314) (444) (191) (145) (182) (189) (170) (176) Benefit payments (5,712) (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 4,823 (11,362) 11,344 164 2,582 (1,686) 7,393 7,597 2,790 4,538 Plan fiduciary net position - beginning 58,999 70,361 59,017 58,853 56,271 57,957 50,564 42,967 40,177 35,639 Plan fiduciary net position - ending (b)63,822$ 58,999$ 70,361$ 59,017$ 58,853$ 56,271$ 57,957$ 50,564$ 42,967$ 40,177$ Net pension liability - beginning 15,152 6,408 12,057 6,591 9,556 6,629 12,188 15,151 17,115 20,829 Net pension liability - ending (a)-(b)8,788$ 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 87.90% 79.57% 91.65% 83.04% 89.93% 85.48% 89.74% 80.58% 73.93% 70.13% Covered payroll 5,497$ 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 159.87% 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 ten 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. Supplemental Retirement Plan (in Thousands) Last Ten Fiscal Years* Schedule of Changes in the Net Pension Liability and Related Ratios During the Measurement Period City of Huntington Beach Required Supplementary Information 125 459 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 2022 2021 2020 2019 2018 2017 Total OPEB Liability Service cost 1,004$ 1,120$ 1,096$ 1,241$ 1,205$ 877$ Interest on the total OPEB liability 1,655 2,119 2,064 1,859 1,787 1,293 Actual and expected experience difference - (6,296) - 1,411 - - Changes in assumptions (891) 1,603 (298) (3,358) - - Benefit payments (2,352) (2,129) (1,848) (1,742) (1,683) (1,036) Net change in total OPEB liability (584) (3,583) 1,014 (589) 1,309 1,134 Total OPEB liability - beginning 30,276 33,859 32,845 33,434 32,125 30,991 Total OPEB liability - ending (a) 29,692$ 30,276$ 33,859$ 32,845$ 33,434$ 32,125$ Plan Fiduciary Net Position Contribution - employer**2,499$ 1,882$ 1,959$ 2,270$ 4,191$ 1,036$ Net investment income (4,561) 6,025 1,580 1,901 1,126 471 Benefit payments (2,352) (2,129) (1,848) (1,742) (1,683) (1,036) Administrative expense (156) (131) (245) (61) (131) (9) Net change in plan fiduciary net position (4,570) 5,647 1,446 2,368 3,503 462 Plan fiduciary net position - beginning 36,286 30,639 29,193 26,825 23,322 22,860 Plan fiduciary net position - ending (b) 31,716$ 36,286$ 30,639$ 29,193$ 26,825$ 23,322$ Net OPEB liability (asset) - ending (a)-(b) (2,024)$ (6,010)$ 3,220$ 3,652$ 6,609$ 8,803$ Plan fiduciary net position as a percentage of the total OPEB liability (asset)106.82% 119.85%90.49%88.88%80.23%72.60% Covered employee payroll 72,524$ 70,881$ 76,521$ 79,682$ 81,458$ 60,985$ Net OPEB liability as a percentage of covered employee payroll N/A 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 six 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 126 460 2022-23 1 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 7,451$ 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 (7,451) (6,951) (18,086) (16,878) (14,819) (9,734) (11,921) (11,238) (10,510) (8,685) Contribution deficiency (excess)-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Covered payroll 51,089$ 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 14.58% 14.84% 39.54% 36.73% 32.63% 29.31% 26.42% 25.39% 22.68% 20.05% Notes to Schedule Valuation date: 6/30/2013 through 06/30/2020 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 Last Ten Fiscal Years* CalPERS City Miscellaneous Plan - 99 Schedule of Contributions For the Year Ended June 30, 2023 (in Thousands) 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. *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 10/1/13-6/30/16, 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 7/1/19-6/30/22, 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. 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- 6/30/22, the probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. 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, 2022. 2.75% for 10/1/2013-6/30/2020, and 2.80% for 7/1/2020-6/30/2022. 2.75% for 10/1/2013-6/30/2019, 2.50% for 7/1/2019-6/30/2020, and 2.80% for 7/1/2020-6/30/2022. For 10/1/14-6/30/15, 15 Year Smoothed Market (for details, see June 30, 2012 Funding Valuation Report). For 7/1/15-6/30/22, Fair Value (for details, see the Funding Valuation Reports for the years ended June 30, 2013-2022). For details, see Miscellaneous Plan of the City of Huntington Beach Annual Valuation Report as of June 30, 2022. 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. 127 461 2022-23 1 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 13,220$ 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 (13,220) (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 48,601$ 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 27.20% 28.28% 60.64% 59.03% 52.79% 47.66% 44.99% 44.90% 43.41% 35.85% Notes to Schedule Valuation date: 6/30/2013 through 06/30/2020 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, 2022. Asset valuation method Inflation Salary increases Varies by entry age and service. Payroll growth Discount Rate Retirement age Mortality For the Year Ended June 30, 2023 Schedule of Contributions Required Supplementary Information City of Huntington Beach 2.75% for 10/1/2013-6/30/2020, and 2.80% for 7/1/2020-6/30/2022. CalPERS City Safety Plan - 100 Last Ten Fiscal Years* 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 7/1/15-6/30/22, Fair Value (for details, see the Funding Valuation Reports for the years ended June 30, 2013-2022). 2.75% for 10/1/2013-6/30/2019, 2.50% for 7/1/2019-6/30/2020, and 2.80% for 7/1/2020-6/30/2022. 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 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 prescribed discount rate assumption, adopted by the board on November 17, 2021, is 6.80% compounded annually (net of invesment and administrative expenses) as of June 30, 2022. (in Thousands) 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 7/1/19-6/30/22, 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 7/1/19-6/30/22, 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. 128 462 2022-23 1 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 1,413$ 889$ 933$ 1,689$ 2,258$ 2,879$ 3,895$ 3,576$ 3,634$ 4,534$ Contributions in relation to the actuarially determined contributions (6,046) (6,006) (1,435) (3,506) (4,962) (3,507) (5,346) (7,277) (4,678) (4,539) Contribution deficiency (excess)(4,633)$ (5,117)$ (502)$ (1,817)$ (2,704)$ (628)$ (1,451)$ (3,701)$ (1,044)$ (5)$ Covered payroll 5,497$ 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 109.99% 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 6/30/2021 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 7/1/2020-6/30/2023. Salary increases Aggregate - 2.75% annually. Merit - CalPERS 1997-2015 Experience Study. Payroll growth Investment rate of return Retirement age Mortality 2023 2022 2021 2020 2019 2018 2 2017 2016 2015 2014 Annual Money Weighted Rate of Return, net of investment expense 8.37% -15.97% 26.88% 3.79% 4.79% 4.04% 12.87% 10.20% -2.82% 9.20% 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. 20-year fixed period for 2022/23. Level dollar amortization. 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, 2023 period. 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. 5.50%, net of pension plan investment and administrative expenses, for the July 1, 2022 - June 30, 2023 measurement period. 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. Mortality projected fully generational with Scale MP-2021 for the July 1, 2022 to June 30, 2023 measurement period. Schedule of Contributions Required Supplementary Information City of Huntington Beach 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. Supplemental Retirement Plan Last Ten Fiscal Years* (in Thousands) For the Year Ended June 30, 2023 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. Schedule of Money Weighted Rate of Return The probabilities of retirement are based on the CalPERS 1997-2015 Experience Study. Investment gains/losses spread over a 3-year rolling period. 129 463 Fiscal Year Ended June 30 2023 2022 2021 2020 2019 2018** Actuarially Determined Contribution (ADC)856$ 1,401$ 1,364$ 1,793$ 1,746$ 2,022$ Contributions in relation to the ADC***(1,997) (2,499) (1,882) (1,959) (2,270) (4,192) Contribution deficiency (excess)(1,141)$ (1,098)$ (518)$ (166)$ (524)$ (2,170)$ Covered-employee payroll** 72,558$ 72,524$ 70,881$ 76,521$ 79,682$ 59,589$ Contributions as a percentage of covered-employee payroll 2.75% 3.45% 2.66% 2.56% 2.85% 7.03% Notes to Schedule: Valuation date: 6/30/2021 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 20-year fixed period Asset Valuation Method Investment gains and losses spread over 5-year rolling period. Inflation Payroll Growth 2.75% 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, 2023 3% for 10/1/17-6/30/18 and 2.75% per annum for the measurement period 7/1/2018 to 6/30/2022. 2.50% per annum for the measurement period 7/1/2022 to 6/30/2023. 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. 5.75% for the July 1, 2021 to June 30, 2023 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 130 464 SUPPLEMENTARY INFORMATION 131 465 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 Lease Capital Project Fund records activity for leases 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. 132 466 ASSETS Air Quality Development Impact Fee Disability Access Drainage Strand Parking Structures Gas Tax Cash and Investments 1,032$ 8,379$ 409$ 4,126$ 3,907$ 4,985$ Taxes Receivable - - - - - 297 Other Receivables 71 34 2 18 16 797 Total Assets 1,103 8,413 411 4,144 3,923 6,079 LIABILITIES Accounts Payable 65 187 - 15 13 1,265 Accrued Payroll - 3 - - - 18 Total Liabilities 65 190 - 15 13 1,283 FUND BALANCES Restricted Pollution Remediation - - - - - - Highways, Streets and Transportation - - - - - 4,796 Low Income Housing - - - - - - Air Quality 1,038 - - - - - Other Capital Projects - 8,223 - 4,129 - - Other Purposes - - 411 - - - Committed Parks - - - - - - Other Purposes - - - - 3,910 - Total Fund Balances 1,038 8,223 411 4,129 3,910 4,796 1,103$ 8,413$ 411$ 4,144$ 3,923$ 6,079$ Total Liabilities, Deferred Inflows of Resources and Fund Balances SPECIAL REVENUE FUNDS CITY OF HUNTINGTON BEACH COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2023 (In Thousands) 133 467 Housing Residual Receipt Park Acquisition and Development Surf City "3" ELM Automation Fund Traffic Congestion Relief Traffic Impact Fee Transportation Total Special Revenue Funds 1,296$ 5,486$ 1,482$ 671$ 1,464$ 4,165$ 3,386$ 40,788$ - - 119 - 143 - 749 1,308 5 166 6 3 6 17 14 1,155 1,301 5,652 1,607 674 1,613 4,182 4,149 43,251 - - 37 20 283 1 166 2,052 - - - 3 - - 33 57 - - 37 23 283 1 199 2,109 - 336 - - - - - 336 - - - - 1,330 4,181 3,950 14,257 1,301 - - - - - - 1,301 - - - - - - - 1,038 - - - - - - - 12,352 - - 1,570 651 - - - 2,632 - 5,316 - - - - - 5,316 - - - - - - - 3,910 1,301 5,652 1,570 651 1,330 4,181 3,950 41,142 1,301$ 5,652$ 1,607$ 674$ 1,613$ 4,182$ 4,149$ 43,251$ June 30, 2023 (In Thousands) (continued) SPECIAL REVENUE FUNDS CITY OF HUNTINGTON BEACH COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS 134 468 ASSETS Public Financing Authority Total Debt Service Fund Affordable Housing In-Lieu Lease Capital Project Cash and Investments 3,386$ 3,386$ 9,551$ 39$ Cash and Investments with Fiscal Agent 1,075 1,075 - 11,210 Taxes Receivable - - - - Other Receivables 2 2 39 94 Total Assets 4,463 4,463 9,590 11,343 LIABILITIES Accounts Payable 2 2 - - Accrued Payroll - - - - Total Liabilities 2 2 - - FUND BALANCES Restricted Pollution Remediation - - - - Debt Service 4,461 4,461 - - Highways, Streets and Transportation - - - - Low Income Housing - - 9,590 - Air Quality - - - - Other Capital Projects - - - 11,343 Other Purposes - - - - Committed Parks - - - - Other Capital Projects - - - - Other Purposes - - - - Assigned Capital Improvement Reserve - - - - Total Fund Balances 4,461 4,461 9,590 11,343 4,463$ 4,463$ 9,590$ 11,343$ CITY OF HUNTINGTON BEACH COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2023 (In Thousands) Total Liabilities, Deferred Inflows of Resources and Fund Balances DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS (continued) 135 469 Parking In-Lieu Sewer Development Technology Total Capital Projects Funds Total Other Governmental Funds 767$ 2,454$ 6,171$ 18,982$ 63,156$ - - - 11,210 12,285 - - - - 1,308 3 11 26 173 1,330 770 2,465 6,197 30,365 78,079 1 38 - 39 2,093 - - - - 57 1 38 - 39 2,150 - - - - 336 - - - - 4,461 - - - - 14,257 - - - 9,590 10,891 - - - - 1,038 - - - 11,343 23,695 - - - - 2,632 - - - - 5,316 769 2,427 - 3,196 3,196 - - - - 3,910 - - 6,197 6,197 6,197 769 2,427 6,197 30,326 75,929 770$ 2,465$ 6,197$ 30,365$ 78,079$ (continued) CITY OF HUNTINGTON BEACH COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2023 (In Thousands) CAPITAL PROJECT FUNDS 136 470 REVENUES Air Quality Development Impact Fee Disability Access Drainage Strand Parking Structures Gas Tax Sales Taxes -$ -$ -$ -$ -$ -$ Other Taxes - - - - - 7,822 Licenses and Permits - - 70 - - - Use of Money and Property (Loss)15 140 6 32 1,625 - Intergovernmental 324 - - - - 75 Charges for Current Service - 1,978 - 1,003 - - Other - - - - - - Total Revenues 339 2,118 76 1,035 1,625 7,897 EXPENDITURES Current: City Manager - - - - - - Finance - - 6 - - - Community Development - - - - 1,143 - Fire - 1 - - - - Information Systems - - - - - - Police - 488 - - - - Community Services - 2,973 - - - - Library Services - 89 - - - - Public Works 515 - - 392 - 8,698 Total Expenditures 515 3,551 6 392 1,143 8,698 Excess Of Revenues Over (Under) Expenditures (176) (1,433) 70 643 482 (801) Other Financing Sources (Uses): Transfers Out - - - - (400) - Total Other Financing Sources (Uses)- - - - (400) - Net Change in Fund Balances (176) (1,433) 70 643 82 (801) Fund Balances - Beginning of Year 1,214 9,656 341 3,486 3,828 5,597 Fund Balances - End of Year 1,038$ 8,223$ 411$ 4,129$ 3,910$ 4,796$ OTHER GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (In Thousands) SPECIAL REVENUE FUNDS CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 137 471 Housing Residual Receipt Park Acquisition and Development Surf City "3" ELM Automation Fund Traffic Congestion Relief Traffic Impact Fee Transportation Total Special Revenue Funds -$ -$ -$ -$ -$ -$ 4,565$ 4,565$ - - 498 - - - - 8,320 - - - - - - - 70 20 (169) 23 (13) 31 60 57 1,827 - - - - 1,618 - - 2,017 - 4,614 - 683 - 1,516 - 9,794 6 - - - - - - 6 26 4,445 521 670 1,649 1,576 4,622 26,599 - - 309 - - - - 309 - - - - - - - 6 - - - - - - - 1,143 - - - - - - - 1 - - - 286 - - - 286 - - - - - - - 488 - 405 - - - - - 3,378 - - - - - - - 89 - - - - 2,496 42 3,888 16,031 - 405 309 286 2,496 42 3,888 21,731 26 4,040 212 384 (847) 1,534 734 4,868 - - - - - - - (400) - - - - - - - (400) 26 4,040 212 384 (847) 1,534 734 4,468 1,275 1,612 1,358 267 2,177 2,647 3,216 36,674 1,301$ 5,652$ 1,570$ 651$ 1,330$ 4,181$ 3,950$ 41,142$ SPECIAL REVENUE FUNDS OTHER GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (In Thousands) (continued) CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 138 472 REVENUES Public Financing Authority Total Debt Service Funds Affordable Housing In-Lieu Lease Capital Project Sales Taxes -$ -$ -$ -$ Other Taxes - - - - Licenses and Permits - - 4,932 - Use of Money and Property (Loss)22 22 117 326 Intergovernmental - - - - Charges for Current Service - - - - Other - - - - Total Revenues 22 22 5,049 326 EXPENDITURES Current: City Manager - - - - Finance 5 5 - - Community Development - - - - Fire - - - 6,352 Information Systems - - - - Police - - - - Community Services - - - - Library Services - - - - Public Works - - - - Debt Service: Principal 2,205 2,205 - - Interest 746 746 - - Total Expenditures 2,956 2,956 - 6,352 Excess Of Revenues Over (Under) Expenditures (2,934) (2,934) 5,049 (6,026) Other Financing Sources (Uses): Transfers In 2,963 2,963 - - Issuance of Long-Term Debt - - - 7,742 Transfers Out - - - - Total Other Financing Sources (Uses)2,963 2,963 - 7,742 Net Change in Fund Balances 29 29 5,049 1,716 Fund Balances - Beginning of Year 4,432 4,432 4,541 9,627 Fund Balances - End of Year 4,461$ 4,461$ 9,590$ 11,343$ 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, 2023 139 473 Parking In-Lieu Sewer Development Technology Total Capital Projects Funds Total Other Governmental Funds -$ -$ -$ -$ 4,565$ - - - - 8,320 56 - - 4,988 5,058 - 58 (116) 385 2,234 - 12 - 12 2,029 - 1,318 - 1,318 11,112 - - - - 6 56 1,388 (116) 6,703 33,324 - - - - 309 - - - - 11 6 - - 6 1,149 - - - 6,352 6,353 - - 8 8 294 - - - - 488 - - - - 3,378 - - - - 89 - 1,231 - 1,231 17,262 - - - - 2,205 - - - - 746 6 1,231 8 7,597 32,284 50 157 (124) (894) 1,040 - - 3,300 3,300 6,263 - - - 7,742 7,742 - - - - (400) - - 3,300 11,042 13,605 50 157 3,176 10,148 14,645 719 2,270 3,021 20,178 61,284 769$ 2,427$ 6,197$ 30,326$ 75,929$ (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, 2023 140 474 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 15$ 15$ Intergovernmental 250 250 324 74 Total Revenues 250 250 339 89 EXPENDITURES: Current: Public Works 788 1,508 515 993 Total Expenditures 788 1,508 515 993 Net Change in Fund Balance (538) (1,258) (176) 1,082 Fund Balance - Beginning of Year 1,214 1,214 1,214 - Fund Balance - End of Year 676$ (44)$ 1,038$ 1,082$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 140$ 140$ Charges for Current Service 1,035 1,035 1,978 943 Total Revenues 1,035 1,035 2,118 1,083 EXPENDITURES: Current: Fire - 827 1 826 Police 415 1,529 488 1,041 Community Services 1,636 5,301 2,973 2,328 Library Services 350 388 89 299 Total Expenditures 2,401 8,045 3,551 4,494 Net Change in Fund Balance (1,366) (7,010) (1,433) 5,577 Fund Balance - Beginning of Year 9,656 9,656 9,656 - Fund Balance - End of Year 8,290$ 2,646$ 8,223$ 5,577$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Licenses and Permits 84$ 84$ 70$ (14)$ Use of Money and Property - - 6 6 Total Revenues 84 84 76 (8) EXPENDITURES: Current: Finance 84 84 6 78 Total Expenditures 84 84 6 78 Net Change in Fund Balance - - 70 70 Fund Balance - Beginning of Year 341 341 341 - Fund Balance - End of Year 341$ 341$ 411$ 70$ (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, 2023 141 475 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 32$ 32$ Charges for Current Service 200 200 1,003 803 Total Revenues 200 200 1,035 835 EXPENDITURES: Current: Public Works 2,845 3,830 392 3,438 Total Expenditures 2,845 3,830 392 3,438 Net Change in Fund Balance (2,645) (3,630) 643 4,273 Fund Balance - Beginning of Year 3,486 3,486 3,486 - Fund Balance - End of Year 841$ (144)$ 4,129$ 4,273$ Strand Parking Structure REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property 1,450$ 1,450$ 1,625$ 175$ Total Revenues 1,450 1,450 1,625 175 EXPENDITURES: Current: Community Development 1,147 1,466 1,143 323 Total Expenditures 1,147 1,466 1,143 323 OTHER FINANCING SOURCES (USES): Transfers Out (400) (400) (400) - Total Other Financing Sources (Uses)(400) (400) (400) - Net Change in Fund Balance (97) (416) 82 498 Fund Balance - Beginning of Year 3,828 3,828 3,828 - Fund Balance - End of Year 3,731$ 3,412$ 3,910$ 498$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Other Taxes 8,273$ 8,276$ 7,822$ (454)$ Intergovernmental - - 75 75 Total Revenues 8,273 8,276 7,897 (379) EXPENDITURES: Current: Public Works 8,140 13,436 8,698 4,738 Total Expenditures 8,140 13,436 8,698 4,738 OTHER FINANCING SOURCES (USES): Transfers Out (122) - - - Total Other Financing Sources (Uses)(122) - - - Net Change in Fund Balance 11 (5,160) (801) 4,359 Fund Balance - Beginning of Year 5,597 5,597 5,597 - Fund Balance - End of Year 5,608$ 437$ 4,796$ 4,359$ 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, 2023 (In Thousands) Gas Tax 142 476 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 20$ 20$ Other 32 32 6 (26) Total Revenues 32 32 26 (6) EXPENDITURES: Current: Community Development 32 32 - 32 Total Expenditures 32 32 - 32 Net Change in Fund Balance - - 26 26 Fund Balance - Beginning of Year 1,275 1,275 1,275 - Fund Balance - End of Year 1,275$ 1,275$ 1,301$ 26$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property (Loss) -$ -$ (169)$ (169)$ Charges for Current Service - - 4,614 4,614 Total Revenues - - 4,445 4,445 EXPENDITURES: Current: Community Services - 425 405 20 Total Expenditures - 425 405 20 Net Change in Fund Balance - (425) 4,040 4,465 Fund Balance - Beginning of Year 1,612 1,612 1,612 - Fund Balance - End of Year 1,612$ 1,187$ 5,652$ 4,465$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Other Taxes 500$ 500$ 498$ (2)$ Use of Money and Property - - 23 23 Total Revenues 500 500 521 21 EXPENDITURES: Current: City Manager 623 843 309 534 Total Expenditures 623 843 309 534 Net Change in Fund Balance (123) (343) 212 555 Fund Balance - Beginning of Year 1,358 1,358 1,358 - Fund Balance - End of Year 1,235$ 1,015$ 1,570$ 555$ CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES, AND FOR THE YEAR ENDED JUNE 30, 2023 (In Thousands) Park Acquisition and Development CHANGES IN FUND BALANCES - BUDGET AND ACTUAL OTHER GOVERNMENTAL FUNDS Housing Residual Receipt Surf City "3" 143 477 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property (Loss)-$ -$ (13)$ (13)$ Charges for Current Service 360 360 683 323 Total Revenues 360 360 670 310 EXPENDITURES: Current: Information Systems 422 439 286 153 Total Expenditures 422 439 286 153 OTHER FINANCING SOURCES (USES): Transfers In 118 118 - (118) Transfers Out (18) - - - Total Other Financing Sources (Uses)100 118 - (118) Net Change in Fund Balance 38 39 384 345 Fund Balance - Beginning of Year 267 267 267 - Fund Balance - End of Year 305$ 306$ 651$ 345$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 31$ 31$ Intergovernmental 1,939 1,939 1,618 (321) Total Revenues 1,939 1,939 1,649 (290) EXPENDITURES: Current: Public Works 2,135 3,507 2,496 1,011 Total Expenditures 2,135 3,507 2,496 1,011 Net Change in Fund Balance (196) (1,568) (847) 721 Fund Balance - Beginning of Year 2,177 2,177 2,177 - Fund Balance - End of Year 1,981$ 609$ 1,330$ 721$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 60$ 60$ Charges for Current Service 100 100 1,516 1,416 Total Revenues 100 100 1,576 1,476 EXPENDITURES: Current: Public Works 290 2,150 42 2,108 Total Expenditures 290 2,150 42 2,108 Net Change in Fund Balance (190) (2,050) 1,534 3,584 Fund Balance - Beginning of Year 2,647 2,647 2,647 - Fund Balance - End of Year 2,457$ 597$ 4,181$ 3,584$ 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, 2023 144 478 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Sales Taxes 4,056$ 4,056$ 4,565$ 509$ Use of Money and Property - - 57 57 Total Revenues 4,056 4,056 4,622 566 EXPENDITURES: Current: Public Works 4,171 6,417 3,888 2,529 Total Expenditures 4,171 6,417 3,888 2,529 OTHER FINANCING SOURCES (USES): Transfers Out 208 - - - Total Other Financing Sources (Uses)208 - - - Net Change in Fund Balance 93 (2,361) 734 3,095 Fund Balance - Beginning of Year 3,216 3,216 3,216 - Fund Balance - End of Year 3,309$ 855$ 3,950$ 3,095$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 22$ 22$ Total Revenues - - 22 22 EXPENDITURES: Current: Finance 12 12 5 7 Debt Service: Principal 2,205 2,205 2,205 - Interest 746 746 746 - Total Expenditures 2,963 2,963 2,956 7 OTHER FINANCING SOURCES (USES): Transfers In 2,963 2,963 2,963 - Total Other Financing Sources (Uses)2,963 2,963 2,963 - Net Change in Fund Balance - - 29 29 Fund Balance - Beginning of Year 4,432 4,432 4,432 - Fund Balance - End of Year 4,432$ 4,432$ 4,461$ 29$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Licenses and Permits 747$ 747$ 4,932$ 4,185$ Use of Money and Property - - 117 117 Total Revenues 747 747 5,049 4,302 Net Change in Fund Balance 747 747 5,049 4,302 Fund Balance - Beginning of Year 4,541 4,541 4,541 - Fund Balance - End of Year 5,288$ 5,288$ 9,590$ 4,302$ 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, 2023 OTHER GOVERNMENTAL FUNDS 145 479 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 326$ 326$ Total Revenues - - 326 326 EXPENDITURES: Current: Fire - 17,360 6,352 11,008 Total Expenditures - 17,360 6,352 11,008 OTHER FINANCING SOURCES (USES): Issuance of Long-Term Debt - 7,742 7,742 - Total Other Financing Sources (Uses)- 7,742 7,742 - Net Change in Fund Balance - (9,618) 1,716 11,334 Fund Balance - Beginning of Year 9,627 9,627 9,627 - Fund Balance - End of Year 9,627$ 9$ 11,343$ 11,334$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Licenses and Permits 394$ 394$ 56$ (338)$ Total Revenues 394 394 56 (338) EXPENDITURES: Current: Community Development 100 100 6 94 Total Expenditures 100 100 6 94 Net Change in Fund Balance 294 294 50 (244) Fund Balance - Beginning of Year 719 719 719 - Fund Balance - End of Year 1,013$ 1,013$ 769$ (244)$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 58$ 58$ Intergovernmental 12 12 12 - Charges for Current Service 155 155 1,318 1,163 Total Revenues 167 167 1,388 1,221 EXPENDITURES: Current: Public Works - 1,900 1,231 669 Total Expenditures - 1,900 1,231 669 Net Change in Fund Balance 167 (1,733) 157 1,890 Fund Balance - Beginning of Year 2,270 2,270 2,270 - Fund Balance - End of Year 2,437$ 537$ 2,427$ 1,890$ Sewer Development Parking In-Lieu (In Thousands) Lease Capital Project OTHER GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2023 CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL 146 480 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property (Loss)-$ -$ (116)$ (116)$ Total Revenues - - (116) (116) EXPENDITURES: Current: Information Systems 1,000 3,094 8 3,086 Total Expenditures 1,000 3,094 8 3,086 OTHER FINANCING SOURCES (USES): Transfers In 3,300 3,300 3,300 - Total Other Financing Sources (Uses)3,300 3,300 3,300 - Net Change in Fund Balance 2,300 206 3,176 2,970 Fund Balance - Beginning of Year 3,021 3,021 3,021 - Fund Balance - End of Year 5,321$ 3,227$ 6,197$ 2,970$ Technology 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, 2023 (In Thousands) 147 481 LMIHAF Capital Projects Fund REVENUES:Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property 200$ 200$ 79$ (121)$ Total Revenues 200 200 79 (121) EXPENDITURES: Current: Community Development 25 2,425 16 2,409 Total Expenditures 25 2,425 16 2,409 Net Change in Fund Balance 175 (2,225) 63 2,288 Fund Balance - Beginning of Year 4,856 4,856 4,856 - Fund Balance - End of Year 5,031$ 2,631$ 4,919$ 2,288$ Pension Liability Debt Service Fund REVENUES:Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Property Taxes 6,621$ 6,621$ 8,431$ 1,810$ Use of Money and Property - - 447 447 Charges for Current Service - 15,950 16,111 161 Other - Total Revenues 6,621 22,571 24,989 2,418 EXPENDITURES: Debt Service: Principal 14,525 14,525 12,594 1,931 Interest 9,046 9,046 8,486 560 Total Expenditures 23,571 23,571 21,080 2,491 Excess of Revenues Over (Under) Expenditures (16,950) (1,000) 3,909 4,909 OTHER FINANCING SOURCES (USES): Transfers In 17,325 1,375 344 1,031 Total Other Financing Sources (Uses) 17,325 1,375 344 1,031 Net Change in Fund Balance 375 375 4,253 5,940 Fund Balance - Beginning of Year 20,729 20,729 20,729 - Fund Balance - End of Year 21,104$ 21,104$ 24,982$ 5,940$ CITY OF HUNTINGTON BEACH (In Thousands) SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2023 148 482 REVENUES:Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property (Loss)-$ -$ (1,565)$ (1,565)$ Intergovernmental - 135 501 366 Total Revenues - 135 (1,064) (1,199) EXPENDITURES: Current: Community Services 158 455 389 66 Public Works 24,707 46,698 14,375 32,323 Total Expenditures 24,865 47,153 14,764 32,389 Excess of Revenues Over (Under) Expenditures (24,865) (47,018) (15,828) 31,190 OTHER FINANCING SOURCES (USES): Transfers In 24,355 28,741 28,741 - Transfers Out 218 - - - Total Other Financing Sources (Uses) 24,573 28,741 28,741 - Net Change in Fund Balance (292) (18,277) 12,913 31,190 Fund Balance - Beginning of Year 20,485 20,485 20,485 - Fund Balance - End of Year 20,193$ 2,208$ 33,398$ 31,190$ (In Thousands) Infrastructure CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2023 149 483 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. 150 484 Self Insurance Workers' Comp Self Insurance General Liability Equipment Replacement Fund Internal Service Fund Total ASSETS Current Assets: Cash and Investments 20,503$ 14,184$ 11,909$ 46,596$ Other Receivables, Net 76 40 49 165 Prepaids 600 - 1,381 1,981 Total Current Assets 21,179 14,224 13,339 48,742 Non-Current Assets: Net Other Postemployment Benefits Asset 7 3 - 10 Total Non-Current Assets 7 3 - 10 Capital Assets: Buildings and Improvements - - 67 67 Machinery and Equipment - - 12,957 12,957 Less Accumulated Depreciation - - (3,615) (3,615) Total Capital Assets - - 9,409 9,409 Total Assets 21,186 14,227 22,748 58,161 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows Related to Pensions 466 - - 466 Deferred Outflows Related to Other Postemployment Benefits 22 10 - 32 Total Deferred Outflows of Resources 488 10 - 498 Total Assets and Deferred Outflows of Resources 21,674 14,237 22,748 58,659 LIABILITIES Current Liabilities: Accounts Payable 353 104 248 705 Accrued Payroll 4 4 - 8 Current Portion of Claims Payable 8,604 10,439 - 19,043 Current Portion of Compensated Absences 13 1 - 14 Long-Term Obligations Due Within One Year 43 - - 43 Total Current Liabilities 9,017 10,548 248 19,813 Non-Current Liabilities: Compensated Absences 35 3 - 38 Long-Term Obligations Due in More than One Year 943 - - 943 Net Pension Liability 513 - - 513 Claims Payable 35,483 12,095 - 47,578 Total Non-Current Liabilities 36,974 12,098 - 49,072 Total Liabilities 45,991 22,646 248 68,885 DEFERRED INFLOWS OF RESOURCES Deferred Inflows Related to Pensions 1 - - 1 Deferred Inflows Related to Other Postemployment Benefits 24 11 - 35 Total Deferred Inflows of Resources 25 11 - 36 NET POSITION Net Investment in Capital Assets - - 9,409 9,409 Unrestricted (24,342) (8,420) 13,091 (19,671) Total Net Position (24,342) (8,420) 22,500 (10,262) Total Liabilities, Deferred Inflows of Resources, and Net Position 21,674$ 14,237$ 22,748$ 58,659$ Governmental Activities CITY OF HUNTINGTON BEACH STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS June 30, 2023 (In Thousands) 151 485 Self Insurance Workers' Comp Self Insurance General Liability Equipment Replacement Fund Internal Service Fund Total OPERATING REVENUES Fees and Charges for Service 13,628$ 10,750$ 8,290$ 32,668$ Other 846 442 240 1,528 Total Operating Revenues 14,474 11,192 8,530 34,196 OPERATING EXPENSES Supplies and Operations 1,710 390 1,504 3,604 Claims and Judgments 10,419 15,454 - 25,873 Depreciation - - 1,453 1,453 Total Operating Expenses 12,129 15,844 2,957 30,930 Operating Income (Loss) 2,345 (4,652) 5,573 3,266 NON-OPERATING REVENUES (EXPENSES) Investment Income (Loss) 46 39 (16) 69 Interest Expense (25) - - (25) Disposal of Machinery and Equipment (Loss) - - (520) (520) Total Non-Operating Revenues (Expenses) 21 39 (536) (476) Income (Loss) Before Transfers 2,366 (4,613) 5,037 2,790 Change in Net Position 2,366 (4,613) 5,037 2,790 Net Position - Beginning of Year (26,708) (3,807) 17,463 (13,052) Net Position - End of Year (24,342)$ (8,420)$ 22,500$ (10,262)$ CITY OF HUNTINGTON BEACH STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (In Thousands) Governmental Activities 152 486 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 14,444$ 11,179$ 8,510$ 34,133$ Cash Paid to Employees for Services (180) (183) - (363) Cash Paid to Suppliers of Goods and Services (10,848) (6,711) (2,468) (20,027) Net Cash and Investment Provided (Used) by Operating Activities 3,416 4,285 6,042 13,743 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Debt Service (43) - - (43) Interest Paid (26) - - (26) Net Cash and Investments Provided (Used) by Noncapital Financing Activities (69) - - (69) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of Capital Assets - - (5,156) (5,156) Net Cash and Investments Provided (Used) by Capital and Related Financing Activities - - (5,156) (5,156) CASH FLOWS FROM INVESTING ACTIVITIES Investment (Loss) 46 39 (16) 69 Net Cash and Investments Provided (Used) by Investing Activities 46 39 (16) 69 Net Increase in Cash and Investments 3,393 4,324 870 8,587 Cash and Investments - Beginning of Year 17,110 9,860 11,039 38,009 Cash and Investments - End of Year 20,503$ 14,184$ 11,909$ 46,596$ RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH AND INVESTMENTS PROVIDED (USED) BY OPERATING ACTIVITIES Operating Income (Loss) 2,345$ (4,652)$ 5,573$ 3,266$ Adjustments to Reconcile Operating Income (Loss) to Net Cash and Investments Provided (Used) by Operating Activities Depreciation - - 1,453 1,453 Decrease (Increase) in Other Receivables, Net (30) (13) (20) (63) Decrease in Prepaids - - (1,186) (1,186) (Increase) in Net Pension Asset 388 - - 388 (Increase) in Net Other Postemployment Benefits Asset 13 6 - 19 Increase (Decrease) in Accounts Payable (260) 78 222 40 Increase in Accrued Payroll (15) 4 - (11) Increase in Claims Payable 1,324 8,866 - 10,190 (Decrease) in Compensated Absences 7 4 - 11 Decrease in Deferred Pension Outflow (388) - - (388) Increase in Deferred Pension Inflow (428) - - (428) (Decrease) in Net Pension Liability 479 - - 479 (Increase) in Deferred Other Postemployment Benefits Outflow (6) (3) - (9) Increase in Deferred Other Postemployment Benefits Inflow (13) (5) - (18) Net Cash and Investments Provided (Used) by Operating Activities 3,416$ 4,285$ 6,042$ 13,743$ NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES There were no noncash investing, capital, or financing activities during the year ended June 30, 2023. Governmental Activities CITY OF HUNTINGTON BEACH STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2023 (In Thousands) 153 487 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. 154 488 Custodial Funds ASSETS: Community Facilities Districts Business Improvement Districts Parking Structure - Bella Terra Total Custodial Funds Current Assets: Cash and Investments 1,372$ 695$ $ 2,035 $ 4,102 Cash with Fiscal Agent 1,615 - 1,714 3,329 Accounts Receivable, Net 9 841 45 895 Total Assets 2,996 1,536 3,794 8,326 LIABILITIES: Current Liabilities: Accounts Payable - 1,271 251 1,522 Total Current Liabilities - 1,271 251 1,522 Total Liabilities - 1,271 251 1,522 NET POSITION Restricted for: Restricted for Individuals and Organizations 2,996 265 3,543 6,804 Total Net Position 2,996$ 265$ 3,543$ 6,804$ CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2023 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 1,552$ -$ -$ 1,552$ Business Improvement District Taxes - 6,960 - 6,960 Parking Assessments - - 2,446 2,446 Interest Income 54 - 73 127 Total Additions 1,606 6,960 2,519 11,085 DEDUCTIONS Administrative Costs 20 - - 20 Payments to other Organizations - 7,006 779 7,785 Interest and Fiscal Agency Expenses 625 - 734 1,359 Principal 875 - 925 1,800 Total Deductions 1,520 7,006 2,438 10,964 Change in Net Position 86 (46) 81 121 Net Position - Beginning of Year 2,910 311 3,462 6,683 Net Position - End of Year 2,996$ 265$ 3,543$ 6,804$ CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF FIDUCIARY FUND ASSETS AND LIABILITIES FIDUCIARY FUNDS JUNE 30, 2023 155 489 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. 156 490 Governmental Activities 2023 2022 2021 2020 2019 Net investment in capital assets 727,051$ 712,289$ 699,204$ 673,498$ 664,281$ Restricted 82,564 68,460 65,755 79,926 66,089 Unrestricted (173,034) (223,438) (275,159) (274,523) (251,022) Total Governmental Activities Net Position 636,581$ 557,311$ 489,800$ 478,901$ 479,348$ Business-Type Activities Net investment in capital assets 141,581$ 143,998$ 142,469$ 142,785$ 145,696$ Restricted 21,213 19,309 20,332 22,248 21,153 Unrestricted 36,684 34,120 39,129 38,482 36,747 Total Business-Type Activities Net Position 199,478$ 197,427$ 201,930$ 203,515$ 203,596$ Primary Government Net investment in capital assets 868,632$ 856,287$ 841,673$ 816,283$ 809,977$ Restricted 103,777 87,769 86,087 102,174 87,242 Unrestricted (136,350) (189,318) (236,030) (236,041) (214,275) Total Primary Government Net Position 836,059$ 754,738$ 691,730$ 682,416$ 682,944$ Expenses: Governmental Activities: 2023 2022 2021 2020 2019 City Council 429$ 382$ 423$ 405$ 360$ City Manager 5,780 5,412 11,163 3,328 4,501 City Treasurer 396 259 340 317 246 City Attorney 3,248 2,183 3,140 3,136 2,886 City Clerk 1,370 1,060 1,147 949 976 Finance 6,211 5,581 6,828 6,661 6,245 Human Resources**** - - - - 6,261 Community Development* 20,550 11,634 19,716 15,722 6,144 Fire 71,737 52,808 65,960 62,840 56,494 Information Services 8,565 6,469 6,230 8,643 7,530 Police 89,430 73,964 102,415 97,204 87,355 Community Services 13,389 11,517 11,365 12,539 13,369 Library Services 7,225 5,212 6,181 5,776 5,206 Public Works 49,151 42,598 40,270 45,834 40,803 Non-Departmental*** - - - - - Interest on Long-Term Debt 9,587 9,548 2,706 1,686 1,823 Total Governmental Activities 287,068 228,627 277,884 265,040 240,199 Business-Type Activities Water Utility 47,974 44,182 46,054 44,463 43,405 Sewer Service 11,422 10,390 9,284 9,828 9,442 Refuse Collection 14,935 13,738 12,936 12,609 12,051 Hazmat Service 103 236 241 235 234 Total Business-Type Activities 74,434 68,546 68,515 67,135 65,132 Total Business and Government Type Activities 361,502$ 297,173$ 346,399$ 332,175$ 305,331$ * 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. ** 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. June 30, CHANGES IN NET POSITION - LAST TEN FISCAL YEARS (In Thousands) Fiscal Year Ended CITY OF HUNTINGTON BEACH CITY OF HUNTINGTON BEACH Fiscal Year Ended (In Thousands) NET POSITION BY COMPONENT - LAST TEN FISCAL YEARS June 30, 157 491 June 30, Governmental Activities 2018** 2017 2016 2015 2014 Net investment in capital assets 650,466$ 646,336$ 624,180$ 615,512$ 618,825$ Restricted 58,537 41,888 41,555 52,270 34,018 Unrestricted (254,528) (262,874) (222,863) (222,787) 89,524 Total Governmental Activities Net Position 454,475$ 425,350$ 442,872$ 444,995$ 742,367$ Business-Type Activities Net investment in capital assets 143,954$ 140,478$ 142,566$ 142,616$ 140,770$ Restricted 25,886 30,444 32,049 28,096 27,951 Unrestricted 27,492 22,228 21,997 28,476 53,166 Total Business-Type Activities Net Position 197,332$ 193,150$ 196,612$ 199,188$ 221,887$ Primary Government Net investment in capital assets 794,420$ 786,814$ 766,746$ 758,128$ 759,595$ Restricted 84,423 72,332 73,604 80,366 61,969 Unrestricted (227,036) (240,646) (200,866) (194,311) 142,690 Total Primary Government Net Position 651,807$ 618,500$ 639,484$ 644,183$ 964,254$ Expenses: June 30, Governmental Activities: 2018** 2017 2016 2015 2014 City Council 218$ 347$ 321$ 270$ 258$ City Manager 2,063 4,691 3,849 3,302 3,878 City Treasurer 101 216 208 158 169 City Attorney 1,536 3,307 2,598 2,284 2,321 City Clerk 475 889 806 855 747 Finance 3,455 6,201 5,765 5,208 5,314 Human Resources****4,760 5,693 6,814 5,169 4,616 Community Development*4,301 7,576 7,208 6,605 7,091 Fire 26,688 52,941 47,965 42,162 43,194 Information Services 4,375 7,047 6,852 6,552 6,456 Police 42,109 84,786 74,943 64,048 66,681 Community Services 6,768 15,558 9,935 13,809 12,509 Library Services 2,890 5,064 4,611 4,246 4,024 Public Works 23,898 35,373 31,791 27,979 31,691 Non-Departmental***18,164 29,368 35,240 24,080 21,602 Interest on Long-Term Debt 1,467 2,063 2,119 2,245 1,946 Total Governmental Activities 143,268 261,120 241,025 208,972 212,497 Business-Type Activities Water Utility 28,414 45,940 41,643 38,614 41,499 Sewer Service 6,127 9,351 8,729 8,192 9,712 Refuse Collection 8,916 10,821 11,277 11,308 11,145 Hazmat Service 117 224 244 204 231 Total Business-Type Activities 43,574 66,336 61,893 58,318 62,587 Total Business and Government Type Activities 186,842$ 327,456$ 302,918$ 267,290$ 275,084$ *** 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. CHANGES IN NET POSITION - LAST TEN FISCAL YEARS (In Thousands) (continued) Fiscal Year Ended September 30, CITY OF HUNTINGTON BEACH CITY OF HUNTINGTON BEACH NET POSITION BY COMPONENT - LAST TEN FISCAL YEARS (In Thousands) (continued) Fiscal Year Ended September 30, 158 492 I I Program Revenues: Governmental Activities: 2023 2022 2021 2020 2019 Charges for Services City Council 167$ 162$ 162$ 177$ 149$ City Manager 4,976 4,131 4,208 5,315 3,300 City Treasurer 153 149 149 163 135 City Attorney 5 5 6 7 7 City Clerk 299 269 30 220 327 Finance 3,125 3,036 3,055 3,302 2,899 Human Resources**** - - - - 751 Community Development* 18,817 10,953 8,353 10,037 7,459 Fire 14,166 13,401 8,877 10,122 9,831 Information Services 623 604 610 636 628 Police 6,139 6,687 6,477 5,329 6,044 Community Services 22,545 21,117 15,558 17,631 23,530 Library Services 388 302 153 266 308 Public Works 11,301 7,235 6,045 6,614 6,368 Non-Departmental*** - - - - - Total Charges for Services 82,704 68,051 53,683 59,819 61,736 Operating Grants 43,005 9,301 6,013 8,141 6,644 Capital Grants 11,202 8,537 10,192 14,483 8,361 Total Governmental Activities Program Revenue 136,911 85,889 69,888 82,443 76,741 Business-Type Activities: Water Utility 48,934 43,590 42,523 40,518 43,958 Sewer Service 10,982 10,791 10,828 10,900 11,868 Refuse Collection 14,899 13,675 13,014 12,573 12,022 Hazmat Service 276 276 266 279 276 Total Business-Type Activities Program Revenues 75,091 68,332 66,631 64,270 68,124 Total Primary Government Program Revenue 212,002 154,221 136,519 146,713 144,865 Net (Expense) Revenue: Governmental Activities (150,157) (142,738) (207,996) (182,597) (163,458) Business-Type Activities 657 (214) (1,884) (2,865) 2,992 Total Net (Expense) Revenue (149,500) (142,952) (209,880) (185,462) (160,466) General Revenue and Other Changes in Net Position Governmental Activities: Property Taxes 109,467 102,539 99,958 94,263 89,124 Sales Taxes 57,164 57,652 51,162 44,616 47,437 Utility Taxes 22,558 19,528 18,374 18,149 18,788 Other Taxes 32,418 26,134 17,293 18,635 20,227 Use of Money and Property 5,153 (1,895) 4,399 3,208 8,746 From Other Agencies 3,225 4,631 22,000 3,317 4,046 Gain on Sale of Property (520) 1,699 - - - Other - - - - - Transfers (38) (39) (38) (38) (37) Total Governmental Activities General Revenues 229,427 210,249 213,148 182,150 188,331 Business-Type Activities: Use of Money and Property 1,356 (4,328) 261 2,746 3,235 Transfers 38 39 38 38 37 Total Business-Type Activities General Revenues 1,394 (4,289) 299 2,784 3,272 Total General Revenues and Transfers 230,821 205,960 213,447 184,934 191,603 Extraordinary Gain - - - - - Changes in Net Position - Governmental Activities 79,270 67,511 5,152 (447) 24,873 Changes in Net Position - Business-Type Activities 2,051 (4,503) (1,585) (81) 6,264 Total Changes in Net Position 81,321 63,008 3,567 (528) 31,137 Net Position - Beginning of Year 754,738 691,730 682,416 682,944 651,807 Prior Period Adjustment - Governmental Activities - - 5,747 - - Prior Period Adjustment - Business-Type Activities - - - - - Net Position - Beginning of Year as restated 754,738 691,730 688,163 682,944 651,807 Net Position - End of Year 836,059$ 754,738$ 691,730$ 682,416$ 682,944$ * 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. ** 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 (In Thousands) Fiscal Year Ended CHANGES IN NET POSITION - LAST TEN FISCAL YEARS June 30, 159 493 Program Revenues:June 30, Governmental Activities:2018**2017 2016 2015 2014 Charges for Services City Council 91$ 108$ 116$ 71$ 68$ City Manager 2,374 3,515 3,029 2,994 2,835 City Treasurer 81 100 101 639 621 City Attorney 4 5 4 143 139 City Clerk 229 257 201 199 321 Finance 1,746 2,047 2,277 1,353 1,313 Human Resources****373 654 513 1,263 2,499 Community Development*5,448 7,448 9,252 10,670 9,357 Fire 9,104 10,296 9,894 8,625 8,672 Information Services 381 501 521 834 809 Police 4,703 4,968 5,958 5,512 5,170 Community Services 19,245 21,693 18,853 18,569 18,055 Library Services 237 476 408 495 434 Public Works 4,392 5,392 5,733 6,474 6,367 Non-Departmental***916 1,116 1,290 327 318 Total Charges for Services 49,324 58,576 58,150 58,168 56,978 Operating Grants 3,976 7,329 4,723 7,458 7,958 Capital Grants 6,055 3,408 5,939 9,809 5,486 Total Governmental Activities Program Revenue 59,355 69,313 68,812 75,435 70,422 Business-Type Activities: Water Utility 29,530 39,938 35,765 35,350 36,944 Sewer Service 8,362 10,854 11,280 11,239 10,665 Refuse Collection 8,820 11,282 11,215 11,221 11,006 Hazmat Service 25 287 235 222 183 Total Business-Type Activities Program Revenues 46,737 62,361 58,495 58,032 58,798 Total Primary Government Program Revenue 106,092 131,674 127,307 133,467 129,220 Net (Expense) Revenue: Governmental Activities (83,913) (191,807) (172,213) (133,537) (142,075) Business-Type Activities 3,163 (3,975) (3,398) (286) (3,789) Total Net (Expense) Revenue (80,750) (195,782) (175,611) (133,823) (145,864) General Revenue and Other Changes in Net Position Governmental Activities: Property Taxes 61,185 82,925 87,128 82,615 81,355 Sales Taxes 33,844 43,551 34,289 33,063 29,243 Utility Taxes 14,014 19,303 19,482 20,229 20,621 Other Taxes 14,883 17,991 17,313 16,464 15,601 Use of Money and Property 2,158 3,370 3,618 5,551 3,725 From Other Agencies 2,263 3,896 4,397 5,653 4,279 Gain on Sale of Property - - - - - Other 2,811 2,438 5,693 4,440 6,903 Transfers (332) (51) (38) 35 (38) Total Governmental Activities General Revenues 130,826 173,423 171,882 168,050 161,689 Business-Type Activities: Use of Money and Property 279 462 939 1,281 1,015 Transfers 332 51 38 (35) 38 Total Business-Type Activities General Revenues 611 513 977 1,246 1,053 Total General Revenues and Transfers 131,437 173,936 172,859 169,296 162,742 Extraordinary Gain - - - - - Changes in Net Position - Governmental Activities 46,913 (18,384) (331) 34,513 19,614 Changes in Net Position - Business-Type Activities 3,774 (3,462) (2,421) 960 (2,736) Total Changes in Net Position 50,687 (21,846) (2,752) 35,473 16,878 Net Position - Beginning of Year 618,500 639,484 642,236 964,254 962,179 Prior Period Adjustment - Governmental Activities (17,788) 862 - (333,677) (457) Prior Period Adjustment - Business-Type Activities 408 - - (23,814) (14,346) Net Position - Beginning of Year as restated 601,120 640,346 642,236 606,763 947,376 Net Position - End of Year 651,807$ 618,500$ 639,484$ 642,236$ 964,254$ *** 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. (continued) CHANGES IN NET POSITION - LAST TEN FISCAL YEARS CITY OF HUNTINGTON BEACH (In Thousands) Fiscal Year Ended September 30, 160 494 I 2023 2022 2021 2020 2019 General Fund: Nonspendable 51$ 82$ 115$ 120$ 23$ Restricted 19,578 14,623 13,561 9,320 8,154 Committed 51,230 26,665 25,565 25,010 25,011 Assigned 55,678 61,454 55,368 45,638 45,825 Unassigned - - - - - Total General Fund 126,537$ 102,824$ 94,609$ 80,088$ 79,013$ Other Governmental Funds: Nonspendable -$ -$ 105$ 50$ 64$ Restricted 87,866 75,774 70,161 71,671 59,213 Committed 45,820 28,559 26,857 21,735 20,308 Assigned 6,197 3,021 3,280 3,527 3,614 Unassigned - (4,311) - - - Total Other Governmental Funds 139,883$ 103,043$ 100,403$ 96,983$ 83,199$ Fiscal Year Ended June 30, 2018 2017 2016 2015 2014 General Fund: Nonspendable 41$ -$ -$ 4,479$ 4,378$ Restricted 6,384 2,671 2,637 2,871 2,070 Committed 25,011 25,011 25,011 25,011 25,011 Assigned 34,464 33,498 35,199 32,431 29,595 Unassigned 2,734 - - - - Total General Fund 68,634$ 61,180$ 62,847$ 64,792$ 61,054$ Other Governmental Funds: Nonspendable 726$ -$ -$ -$ -$ Restricted 52,742 40,588 40,293 45,515 27,214 Committed 20,800 17,686 21,368 21,659 16,447 Assigned 2,701 826 838 161 151 Unassigned - - - - - Total Other Governmental Funds 76,969$ 59,100$ 62,499$ 67,335$ 43,812$ 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, 161 495 THIS PAGE INTENTIONALLY LEFT BLANK 162 496 2023 2022 2021 2020 2019 REVENUES: Property Taxes 109,467$ 102,539$ 99,958$ 94,263$ 89,367$ Sales Taxes 57,164 57,652 51,162 44,616 47,437 Utility Taxes 22,558 19,528 18,374 18,149 18,788 Other Taxes 40,738 33,720 25,745 24,578 27,196 Licenses and Permits 15,688 9,596 8,213 11,266 8,574 Fines and Forfeitures 3,945 5,144 4,619 3,403 4,300 From Use of Money and Property 22,726 14,365 19,163 27,863 23,276 From Other Agencies 47,426 13,060 29,836 11,309 13,072 Charges for Current Service/Other Revenue 66,363 52,809 27,428 34,772 33,787 TOTAL REVENUES 386,075 308,413 284,498 270,219 265,797 EXPENDITURES Current: City Council 453 426 1,043 394 369 City Manager 6,501 5,265 15,976 4,342 6,598 City Treasurer 417 326 837 297 248 City Attorney 3,404 2,995 7,714 2,898 2,874 City Clerk 1,442 1,295 2,810 886 981 Finance 7,420 7,259 16,173 6,200 6,484 Human Resources*****- - - - 6,362 Community Development**21,569 14,412 39,212 14,692 8,138 Fire 72,499 62,880 149,726 56,477 54,431 Information Systems 8,563 7,871 19,095 8,473 8,342 Police 97,000 93,976 232,438 87,682 83,546 Community Services 16,610 18,455 25,064 14,429 11,720 Library Services 7,244 6,300 14,099 5,199 4,944 Public Works 62,161 50,158 88,007 47,655 46,878 Non-Departmental****- - - - - Capital Outlay***- - - - - Debt Service: Principal 18,799 15,918 3,983 5,122 5,346 Interest 9,542 11,299 937 1,748 1,890 TOTAL EXPENDITURES 333,624 298,835 617,114 256,494 249,151 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 52,451 9,578 (332,616) 13,725 16,646 OTHER FINANCING SOURCES (USES): Transfers In 65,369 21,642 13,058 10,009 11,190 Issuance of Long-Term Debt - - 372,010 1,172 - Issuance Premium - - 1,743 - - Issuance Discount - - (649) - - Payments to Escrow - - (28,256) - - Lease (as Lessee)398 448 - - - Issuance of Finance Purchase Agreement 7,742 868 - - - Transfers Out (65,407) (21,681) (13,096) (10,047) (11,227) TOTAL OTHER FINANCING SOURCES (USES)8,102 1,277 344,810 1,134 (37) INCREASE (DECREASE) IN FUND BALANCES 60,553$ 10,855$ 12,194$ 14,859$ 16,609$ DEBT SERVICE AS A PERCENTAGE OF NON-CAPITAL EXPENDITURES 9.7% 10.1%0.9%3.0%3.3% * 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. *** 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. CITY OF HUNTINGTON BEACH CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (In Thousands) (Modified Accrual Basis of Accounting) Fiscal Year Ended June 30, 163 497 June 30, 2018* 2017 2016 2015 2014 REVENUES: Property Taxes 80,614$ 80,826$ 86,382$ 82,472$ 79,460$ Sales Taxes 33,844 43,551 39,305 32,234 30,454 Utility Taxes 14,014 19,303 19,482 20,229 20,621 Other Taxes 18,409 17,991 17,313 16,464 15,601 Licenses and Permits 6,293 8,812 9,820 9,270 7,976 Fines and Forfeitures 3,048 3,995 5,144 4,746 4,392 From Use of Money and Property 11,600 17,210 18,055 17,473 16,695 From Other Agencies 10,384 15,293 13,712 18,634 16,804 Charges for Current Service/Other Revenue 30,216 32,351 32,506 35,869 33,886 TOTAL REVENUES 208,422 239,332 241,719 237,391 225,889 EXPENDITURES Current: City Council 279 333 318 278 258 City Manager 3,143 4,116 3,092 2,703 3,040 City Treasurer 134 201 204 167 169 City Attorney 2,037 3,052 2,539 2,425 2,321 City Clerk 602 830 790 895 747 Finance 4,376 5,763 5,659 5,452 5,314 Human Resources***** 5,323 5,535 6,776 4,606 4,298 Community Development** 5,554 6,963 7,062 6,954 7,091 Fire 36,347 46,831 46,200 45,008 42,602 Information Systems 5,385 6,603 6,742 6,846 6,456 Police 57,916 75,015 72,612 68,940 66,628 Community Services 7,958 14,124 10,768 10,223 10,040 Library Services 3,436 4,422 4,247 4,146 3,739 Public Works 30,357 38,635 23,659 23,820 22,872 Non-Departmental***** 22,432 28,396 24,670 20,067 21,033 Capital Outlay**** - - 27,269 14,986 10,729 Debt Service: Principal 311 5,091 5,933 5,454 4,797 Interest 965 2,066 2,138 2,226 1,987 TOTAL EXPENDITURES 186,555 247,976 250,678 225,196 214,121 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 21,867 (8,644) (8,959) 12,195 11,768 OTHER FINANCING SOURCES (USES): Transfers In 13,261 6,692 9,034 12,158 9,832 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 (13,593) (6,743) (17,053) (14,238) (9,870) TOTAL OTHER FINANCING SOURCES (USES)(332) 2,716 2,178 (2,080) (38) INCREASE (DECREASE) IN FUND BALANCES 21,535$ (5,928)$ (6,781)$ 10,115$ 11,730$ DEBT SERVICE AS A PERCENTAGE OF NON-CAPITAL EXPENDITURES 0.7% 3.2% 3.6% 3.7% 3.3% **** 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. CITY OF HUNTINGTON BEACH CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (In Thousands) (Modified Accrual Basis of Accounting) Fiscal Year Ended September 30, (continued) 164 498 I Fiscal Year Common Property Public Utilities Total Secured Unsecured Total Assessed Valuation Total Direct Tax Rate 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 2022-2023 43,432,681 948 43,433,629 1,232,123 44,665,752 0.17082 Source: County of Orange Auditor Controller Fiscal Year City Basic Rate (1), (2) City Other School Districts Metro Water District Others 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 2022-2023 0.15582 0.01500 0.07449 0.00350 0.84418 1.09299 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 165 499 Fiscal Year Total Levy Amount Percentage of Levy Delinquent Tax Collections Amount Percentage of Levy Delinquent Taxes Receivable Delinquency Percent Secured Taxes 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% 2022-2023 78,388 76,256 97.3% 547 76,803 98.0% 1,501 1.9% Unsecured Taxes 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% 2022-2023 2,233 2,102 94.1%42 2,144 96.0%59 2.6% Community Facilities Districts 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% 2022-2023 4,006 3,962 98.9%- 3,962 98.9%31 0.8% Note: The levy and tax year is for July 1st through June 30th and does not include the Redevelopment Agency. 2013/2014 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 166 500 2022-2023 Taxable Assessed Value Percent (In Thousands) of Total TAV AES Huntington Beach Energy, LLC 780,550$ 1.75% Bella Terra Associates LLC 401,138 0.90% Social Holding LLC 278,251 0.62% DCO Pacific City LLC 227,698 0.51% Huntington Gateway Industrial LLC 218,039 0.49% PCH Beach Resort LLC 204,525 0.46% The Boening Company/McDonnell Douglas 150,918 0.34% The Waterfront Hotel LLC 147,891 0.33% Monogram Residential Huntington Beach 141,850 0.32% One Pacific Plaza Owner LLC 131,445 0.29% Total Top Ten 2,682,305 6.01% All Other Property Taxpayers 41,983,447 93.99% City Total 44,665,752$ 100.00% 2013-2014 Taxable Assessed Value Percent (In Thousands)of Total TAV OXY USA Inc 568,551$ 1.95% Boeing/McDonnell Douglas 333,126 1.14% Bella Terra Associates LLC 231,961 0.80% DCOR, LLC 202,939 0.70% Mayer Financial LP 191,542 0.66% United Dominion Realty LP 137,308 0.47% CIM Huntington LLC 104,015 0.36% Pacific Sands LLC 88,516 0.30% Essex Huntington on Edinger LP 84,384 0.29% 21002 HB LLC 67,652 0.23% Total Top Ten 2,009,994 6.90% All Other Property Taxpayers 27,155,735 93.10% City Total 29,165,729$ 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 167 501 THIS PAGE INTENTIONALLY LEFT BLANK 168 502 Long-Term Indebtedness 2023 2022 2021 2020 2019 Governmental Activities: Judgement Obligation Bonds -$ -$ -$ -$ -$ Public Financing Authority: 2010(a) Lease Revenue Bonds - - - 7,410 8,235 2011(a) Lease Revenue Bonds - - - 15,725 17,770 2014(a) Lease Revenue Bonds 10,530 11,215 11,880 12,530 13,145 2020(a) Lease Revenue Bonds 4,835 4,835 4,835 - - 2020(b) Lease Revenue Bonds 9,795 11,315 12,830 - - Total Public Financing Authority 25,160 27,365 29,545 35,665 39,150 Other Long-Term Obligations: Finance Purchase Agreement 17,388 11,714 12,753 5,241 5,083 Leases Payable 456 247 - - - Subscriptions Payable 2,600 - - - - PARS Payable - - - - - Section 108 Loan City - - - - - LED Lighting Phase I 192 314 432 546 656 CEC 1,797 2,063 2,457 2,588 2,818 I-Bank 1,283 1,586 1,882 2,171 2,454 Pension Obligation Bonds 318,005 330,642 341,501 - - Total Other Long-Term Obligations 341,721 346,566 359,025 10,546 11,011 Total Long-Term Obligations - Governmental Activities 366,881 373,931 388,570 46,211 50,161 Long-Term Obligations - Business-Type Activities: Pension Obligation Bonds 20,480 21,368 22,144 - - Total Long-Term Obligations - Business-Type Activities 20,480 21,368 22,144 - - Total Long Term Obligations - Governmental Activities and Business-Type Activities 387,361$ 395,299$ 410,714$ 46,211$ 50,161$ 2023 2022 2021 2020 2019 Population 198,373 197,437 198,039 200,748 202,265 Debt Per Capita 1,953$ 2,002$ 2,074$ 230$ 248$ Total Personal Income (In Thousands)*10,841,878$ 9,995,248$ 9,659,154$ 9,450,814$ 9,222,677$ Per Capita Personal Income*54,654$ 50,625$ 48,774$ 47,078$ 45,597$ Unemployment Rate**3.60% 2.80% 4.70% 8.60%2.60% Total Employment**103,900 104,300 100,700 96,200 107,700 * 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, 169 503 June 30, Long-Term Indebtedness 2018*** 2017 2016 2015 2014 Governmental Activities: Judgement Obligation Bonds -$ -$ 659$ 1,634$ 2,574$ Public Financing Authority: 2010(a) Lease Revenue Bonds 9,030 9,030 9,795 10,525 11,230 2011(a) Lease Revenue Bonds 19,735 19,735 21,650 24,985 28,165 2014(a) Lease Revenue Bonds 13,740 13,740 14,315 14,865 - 2020(a) Lease Revenue Bonds - - - - - 2020(b) Lease Revenue Bonds - - - - - Total Public Financing Authority 42,505 42,505 45,760 50,375 39,395 Other Long-Term Obligations: Finance Purchase Agreement 6,079 6,286 4,130 - - Leases Payable - - - - - Subscriptions Payable - - - - - PARS Payable - - - - 29 Section 108 Loan City 430 430 625 805 975 LED Lighting Phase I 762 866 966 1,063 - CEC 3,000 3,000 3,000 - - I-Bank 2,730 2,730 3,000 - - Pension Obligation Bonds - - - - - Total Other Long-Term Obligations 13,001 13,312 11,721 1,868 1,004 Total Long-Term Obligations - Governmental Activities 55,506 55,817 58,140 53,877 42,973 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 55,506$ 55,817$ 58,140$ 53,877$ 42,973$ 2018*** 2017 2016 2015 2014 Population 201,761 202,413 201,919 198,389 195,999 Debt Per Capita 275$ 276$ 288$ 272$ 219$ Total Personal Income (In Thousands)*8,849,843$ 8,878,441$ 8,880,801$ 8,725,545$ 8,278,410$ Per Capita Personal Income*43,863$ 43,863$ 43,982$ 43,982$ 42,237$ Unemployment Rate**2.70% 2.80% 3.90% 3.90% 3.60% Total Employment**106,900 103,200 107,200 104,000 120,200 Fiscal Year Ended CITY OF HUNTINGTON BEACH RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (In Thousands) September 30, 170 504 2013-2014 - 2014-2015 - 2015-2016 - 2016-2017 - 2017-2018 - 2018-2019 - 2019-2020 - 2020-2021 - 2021-2022 - 2022-2023 - 5,359,890 5,359,890 44,665,752 4,867,347 4,867,347 40,561,224 5,019,827 5,019,827 41,831,893 37,120,729 4,454,487 4,454,487 38,887,451 4,666,494 4,666,494 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 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 171 505 2022-23 Assessed Valuation: $48,837,916,731 Debt Repaid with Property Taxes (Tax and Assessment Debt): Overlapping Tax and Assessment Debt Percent Applicable* Debt Applicable to City Metropolitan Water District 1.341% 257,673 Coast Community College District 28.162% 259,310,369 Huntington Beach Union High School District 73.088% 110,384,805 Fountain Valley School District 27.197% 15,616,517 Huntington Beach School District 99.942% 150,571,580 Ocean View School District 93.690% 118,962,878 Westminster School District 24.002% 32,894,635 Los Alamitos Unified School District Facilities District No. 1 1.146% 2,503,382 City of Huntington Beach Community Facilities Districts (1990-1, 2000-1, 2002-1, 2003-1) 100.000% 24,880,000 Total Overlapping Tax and Assessment Debt 715,381,839$ Direct and Overlapping General Fund Debt Orange County General Fund Obligations 6.738% 30,399,498 Orange County Board of Education General Fund Obligations 6.738% 731,747 North Orange County Regional Occupation Program Certificates of Participation 0.085%6,622 Coast Community College District General Fund Obligations 28.162% 416,798 Coast Community College District Pension Obligation Bonds 28.162% 388,636 Huntington Beach Union High School District Certificates of Participation 73.088% 40,261,321 Los Alamitos Unified School District Certificates of Participation 1.030% 335,494 Huntington Beach School District General Fund Obligations 99.942% 14,916,939 Ocean View School District Certificates of Participation 93.690% 13,636,580 Westminster School District General Fund Obligations 24.002% 6,210,518 City of Huntington Beach General Fund Obligations 100.000% 45,818,885 City of Huntington Beach Pension Obligation Bonds 100.000% 338,485,000 Total Direct and Overlapping General Fund Obligation Debt 491,608,038$ Overlapping Tax Increment Debt (Successor Agency) 100.000% 2,485,000 Total Direct Debt 384,303,885$ Total Overlapping Debt 825,170,992 Combined Total Debt 1,209,474,877$ (1) Percentage of overlapping agency's assessed valuation located within boundaries of the City. (1) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and non-bonded leases obligations. Ratios to Adjusted Assessed Valuations Combined Direct Debt ($384,303,885) 0.79% Combined Total Debt 2.48% Ratios to Redevelopment Successor Agency Incremental Valuation ($3,957,815,683) Total Overlapping Tax Increment Debt 0.06% Source: California Municipal Statistics and City of Huntington Beach Finance Department STATEMENT OF DIRECT AND OVERLAPPING BONDED DEBT JUNE 30, 2023 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. 172 506 2023 % of total The Boeing Company 3,112 3.00% Cambro Manufacturing 650 0.63% Hyatt Regency Huntington Beach 641 0.62% Safran Cabin Inc 633 0.61% Boardriders Wholesale LLC 574 0.55% Huntington Beach Hospital 527 0.51% Wal-Mart 462 0.44% No Ordinary Moments 458 0.44% Waterfront Hilton Beach Resort 450 0.43% Home Depot USA Inc 436 0.42% Total of top 10 7,943 7.65% All others 95,957 92.35% Total employment (public and private)103,900 100.00% 2014 % of total Boeing 5,581 4.64% Quiksilver 1,228 1.02% Cambro MFG Co.951 0.79% Ensign United States Drilling 925 0.77% Hyatt Regency Huntington Beach 641 0.53% C & D Aerospace 555 0.46% Huntington Beach Hospital 527 0.44% Walter Wholesale Electronics 480 0.40% Wal-Mart 462 0.38% Rainbow Disposal 408 0.34% Total of top 10 11,758 9.77% All others 108,431 90.24% Total employment (public and private)120,189 100.00% Source: Finance Department, City of Huntington Beach CITY OF HUNTINGTON BEACH PRINCIPAL PRIVATE EMPLOYERS CURRENT YEAR AND NINE YEARS AGO 173 507 General Government:2023 2022 2021 2020 2019 2018*** 2017 2016 2015 2014 City Council 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 City Manager 30.00 27.00 20.00 18.00 12.50 12.50 11.50 11.50 11.50 11.50 City Treasurer 9.50 9.50 1.50 1.50 2.00 2.00 2.00 1.50 1.50 1.50 City Attorney 15.00 11.00 11.00 11.00 11.00 11.00 12.00 11.00 11.00 11.00 City Clerk 6.00 5.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Finance 28.50 28.50 32.50 31.50 33.00 33.00 33.00 32.50 31.50 31.50 Human Resources ** - - - - 15.00 15.00 15.00 15.00 15.00 15.00 Community Development 60.50 57.50 57.50 54.00 44.00 44.00 44.00 43.50 44.00 43.00 Information Systems 25.00 25.00 26.00 22.00 30.00 30.00 30.00 30.00 30.00 30.00 Library Services 29.25 29.25 29.25 23.25 28.25 28.25 28.25 28.25 28.25 28.25 Fire 201.00 201.00 201.00 200.00 198.00 198.00 198.00 198.00 198.00 196.50 Police 353.00 353.00 357.00 356.00 365.50 364.50 364.50 364.50 361.50 360.50 Community Services 33.00 33.00 33.00 37.00 36.00 36.00 44.00 44.00 43.00 43.00 Public Works 211.00 211.00 207.00 199.00 207.00 207.00 199.00 199.00 198.00 196.00 1,002.75 991.75 980.75 958.25 987.25 986.25 986.25 983.75 978.25 972.75 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 174 508 Function/Program 2023 2022 2021 2020 2019 Finance: Water Bills Processed 638,052 637,956 637,920 636,708 639,245 Active Business Licenses 18,787 18,849 19,011 20,910 21,414 Accounts Receivable Billings Processed 10,649 12,437 20,183 25,687 30,217 City Clerk: Passports Issued ****6,455 5,721 418 4,579 7,024 Planning: Entitlements Processed 143 154 112 162 221 Plan Reviews 442 606 1,955 1,358 1,542 Field Inspection Complaints 15,247 7,403 11,899 11,610 8,183 Code Violation Cases 5,599 5,051 4,473 3,260 4,786 Building: Number of Permits Issued 11,536 10,292 9,075 8,855 9,807 Number of Inspections Completed 33,983 31,080 26,710 32,859 36,562 Value of Construction Permits (Thousands of Dollars) 369,060 237,945 166,000 169,393 135,910 Processed Number of Certificate of Occupancies*521 641 655 515 686 Completed Plan Reviews 6,916 5,701 4,673 3,469 3,491 Counter Visits 6,264 14,289 115 14,922 21,409 Fire: Inspections 7,557 7,311 4,008 5,965 6,140 Responses 21,936 22,076 20,428 21,068 20,354 Ocean Rescues 3,027 4,160 4,116 2,487 4,953 Estimated Beach Visitors 9,101,188 8,345,139 7,910,293 6,712,125 10,577,290 Police: Physical Arrests 5,358 5,585 5,363 5,785 5,979 Parking Violations 75,408 97,299 95,753 59,484 79,069 Traffic Violations 6,544 8,869 10,920 12,105 13,314 Community Services: Park/Open Space Acreage 1,072 1,072 1,072 1,066 1,066 Enrollment in Recreation Classes 35,192 34,616 15,511 28,952 37,978 Public Works: Water Sold (Acre Feet)**23,358 26,459 27,731 25,966 26,251 Gallons of Sewage Pumped Per Day**17 million 19 million 19 million 19 million 19 million Library: Items in Collection 289,299 290,351 291,444 294,849 293,995 Items Borrowed 811,837 796,882 481,523 779,124 942,821 * 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 175 509 Function/Program 2018*** 2017 2016 2015 2014 Finance: Water Bills Processed 476,290 632,997 635,052 536,684 630,240 Active Business Licenses 21,782 22,074 21,420 21,424 20,450 Accounts Receivable Billings Processed 25,000 34,963 30,826 38,594 42,360 City Clerk: Passports Issued 5,757 7,408 5,623 5,121 4,598 Planning: Entitlements Processed 206 216 221 280 204 Plan Reviews 1,466 1,376 1,653 1,595 1,466 Field Inspection Complaints 7,005 8,459 7,951 8,233 7,030 Code Violation Cases 4,219 3,981 4,324 4,710 2,545 Building: Number of Permits Issued 7,490 9,728 10,981 10,670 9,348 Number of Inspections Completed 30,501 38,796 39,380 38,320 36,142 Value of Construction Permits (Thousands of Dollars) 109,462 216,252 283,910 234,946 216,343 Processed Number of Certificate of Occupancies*523 740 n/a n/a n/a Completed Plan Reviews 2,771 4,172 4,172 3,815 3,148 Counter Visits 16,498 21,731 23,492 21,893 21,326 Fire: Inspections 3,963 2,758 5,132 6,499 6,641 Responses 14,490 20,555 20,279 19,562 15,815 Ocean Rescues 3,530 3,639 3,977 5,371 6,426 Estimated Beach Visitors 12,522,640 13,339,518 12,272,030 11,803,943 12,035,134 Police: Physical Arrests 4,614 5,298 5,112 4,854 4,303 Parking Violations 54,500 70,846 90,361 83,453 74,668 Traffic Violations 11,869 19,916 17,639 17,596 16,330 Community Services: Park/Open Space Acreage 1,065 1,065 1,062 1,062 1,062 Enrollment in Recreation Classes 27,152 37,968 34,424 30,228 30,184 Public Works: Water Sold (Acre Feet)**19,777 25,944 24,505 24,763 29,279 Gallons of Sewage Pumped Per Day**19 million 22 million 19 million 19 million 22 million Library: Items in Collection 292,037 288,599 285,814 343,655 332,092 Items Borrowed 655,626 943,642 921,105 908,656 937,533 CITY OF HUNTINGTON BEACH OPERATING INDICATORS BY FUNCTION/ACTIVITY LAST TEN FISCAL YEARS (Continued) 176 510 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 1,072 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, 2023 CAPITAL ASSET STATISTICS BY FUNCTION/ACTIVITY CITY OF HUNTINGTON BEACH 177 511 Honorable Mayor and City Council City of Huntington Beach Huntington Beach, California We have audited the financial statements of the governmental activities, the business- type activities, and the aggregate remaining fund information of the City of Huntington Beach (the “City”) as of and for the year ended June 30, 2023, and have issued our report thereon dated December 21, 2023. 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, 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. 512 + Davis Farr CERTIFIED PUBLIC ACCOUNTANTS Davis Farr LLP 18201 Von Karman Avenue I Suite 1100 I Irvine, CA 92612 Main: 949.474 .2020 I Fax: 949.263.5520 Significant Risks Identified We have identified the following significant risks: Implementation of GASB Statement No. 96 Subscription-Based Information Technology Agreements 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. The City changed accounting policies related to Subscription-Based Information Technology Arrangements by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 96, Subscription-Based Information Technology Agreements, in the fiscal year 2023. 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. 513 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. 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 pensions 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 Difficulties Encountered during the Audit We encountered no 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. 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. Management has corrected all identified misstatements. 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. 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, 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, 2023. 514 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, 2023 515 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, 2023, 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, 2023. Report on 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 or significant deficiencies may exist that have not been identified. 516 + Davis Farr CERTIFIED PUBLIC ACCOUNTANTS Davis Farr LLP 18201 Von Karman Avenue I Suite 1100 I Irvine, CA 92612 Main: 949.474 .2020 I Fax: 949.263.5520 Report on 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, 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, 2023 517 d77 :::J '.~a_ 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, 2023. 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, 2023. 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. 518 Davis Farr CERTIFIED PUBLIC ACCOUNTANTS Davis Farr LLP 18201 Von Karman Avenue I Suite 1100 I Irvine, CA 92612 Main: 949.474.2020 I Fax: 949.263.5520 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, 2023 519 Recommended Adjustments by Fund: APPROPRIATION INCREASE Fund No Fund Name Appropriation Revenue Offset Net Increase Dept 100 General Fund 246,187 246,187 - Community & Library Services 100 General Fund 597,000 597,000 - Fire General Fund Subtotal 843,187 843,187 - 1272 Local Road Safety Plan Grant (LRSP)7,350 7,350 - Public Works Other Funds Subtotal 7,350 7,350 - All Funds Total 850,537 850,537 - ATTACHMENT 3 Fiscal Year 2023/2024 Recommended Mid-Year Budget Adjustments 520 City FY 2023/24 Budget Update & FY 2023/24 Mid-Year Budget Adjustments City Council Meeting March 19, 2024 1 521 Presentation Overview •FY 2023/24 Budget Update •FY 2023/24 Mid-Year Budget Adjustment Requests 2 522 City FY 2023/24 Budget Update 3 523 City Budget and Financial Position – FY 2022/23 The City ended FY 2022/23 with a $3.7 million General Fund surplus, after year-end transfers of $12.62M to partially fund unfunded liabilities (Workers’ Compensation, General Liability, Retirement Supplemental) and Infrastructure needs. • Revenues were available for transfers primarily due to one-time spikes in natural gas prices during Winter 2022-23, as well as increased natural gas and electricity rates, resulting in additional utility tax and franchise fee revenue above the adopted budget. • Additionally, Transient Occupancy Tax (TOT) remained strong, mainly due to higher average daily rates and a full fiscal year of TOT from the City’s Short-Term Vacation Rentals. • Demand for emergency medical services (EMS) continues to increase. 4 524 City Budget and Financial Position – FY 2023/24 After 29 months of post-pandemic jobs growth in California, employment growth was flat in September 2023 and declined in October 2023. California consumers and businesses are spending less, and shifting from taxable goods to nontaxable items. • Property tax revenues, the City’s largest General Fund revenue source (36.7%), remains strong, with revenue projected to be slightly above the adopted budget due to increased supplemental property taxes. • Sales tax revenues, the City’s second largest General Fund revenue source (18.9%), is projected to decline by approximately $1.3M due to a shift in consumer spending from taxable goods, such as new car sales, to nontaxable items, such as travel, leisure, and entertainment. • Utility tax and franchise fee revenues are lower than prior year due to lower gas commodity prices. The City is currently projecting to end FY 2023/24 with a $2M General Fund surplus (subject to change). 5 525 General Fund Long-Term Financial Plan 6.1% CalPERS Return FY22/23 6 * FY 22/23 one‐time revenue consists of $29.6M in American Rescue Plan Act funding and $1.8M in transfers from the Housing Agreement and Triple Flip fund. FY 23/24 one‐time consists of General Fund portion of Emerald Cove settlement. •Current forecast requires use of Section 115 Trust reserves (per UAL Policy) starting in FY 25/26. (in thousands)Actual FY22/23 Projected FY23/24 Projected FY24/25 Projected FY25/26 Projected FY26/27 Projected FY27/28 Revenue (Recurring) 281,337 282,969 287,221 294,366 301,718 309,310 Revenue (One‐Time)* 31,380 2,276 ‐‐‐‐ Planned Use of Reserves ‐8,804 ‐‐‐‐ Total Sources of Funds 312,717 294,049 287,221 294,366 301,718 309,310 Expenditures less UAL 254,720 264,960 269,807 281,813 290,201 297,443 CalPERS UAL 4,891 5,000 5,223 8,981 12,727 16,458 POB Payment 13,663 13,276 13,010 12,750 12,537 12,537 One‐Time Expenditures 18,721 8,804 ‐‐‐‐ Total Expenditures 291,995 292,040 288,040 303,544 315,465 326,438 Restricted Reserves 16,978 ‐‐‐‐‐ Surplus/(Deficit) $3,744 $2,009 ($819) ($9,178) ($13,747) ($17,128) 526 CalPERS Update • CalPERS FY 21/22 return of -7.5% and FY 22/23 return of 6.1% requires escalating UAL payments by the City • June 26 – City Council approved updates to the General Fund Reserve Policy requiring a minimum of 25% of unrestricted one-time revenues to be transferred to the City’s Section 115 Trust to address CalPERS’ unfavorable returns • Section 115 Trust balance as of June 30, 2023: $20.6M 7 Decrease UAL Payments Increase UAL PaymentsCa l P E R S Re t u r n Ca l P E R S Re t u r n • CalPERS’ investment policy focuses on long-term plan returns • POB is financially advantageous as long as CalPERS long-term return is > 2.925%CalPERS Target Return 6.8% 527 Unfunded Liabilities • Insurance premiums are anticipated to increase due to rising medical costs and an expanded list of injuries that are presumed to be work related under California law, such as post-traumatic stress. • General Liability insurance premiums are also expected to increase as additional markets withdraw from California and from writing public entity liability. The City is currently self- insured up to $1 million per claim with $25M in excess coverage per claim/occurrence. • Staff is closely monitoring the City’s unfunded liabilities to identify cost saving opportunities on an ongoing basis. 8 Unfunded Liabilities as of 6/30/2023 Increase/(Decrease) in Unfunded Liabilities Unfunded Liabilities as of 6/30/2022 Description $22.9M($2.1M)$25.0MWorkers’ Compensation $4.7M$4.5M$0.2MGeneral Liability $8.8M($6.4M)$15.2MRetiree Supplemental $190.6M$232.2M($41.6M)CalPERS UAL 528 FY 2023/24 Mid-Year Budget Adjustments 9 529 General Fund Adjustments 10 Community & Library Services Department •$246K – increased demand for contract class instructors offset with recreational and art class revenues for a net zero impact Fire Department •$480K –Fire strike team reimbursement costs offset with strike team reimbursement revenues for a net zero impact •$117K –Medical & safety supplies for City ambulances offset with emergency medical response revenues for a net zero impact Total General Fund Adjustments ‐$843,187, all offset by additional revenues 530 Other Fund Adjustments 11 LRSP Grant (Fund 1272) – Public Works •$7,350 to allocate remaining awarded State grant funds for development of a Local Road Safety Plan (LRSP). A total of $147,000 was awarded, but only $139,650 has been appropriated to date. Staff is requesting appropriation of the remaining grant funds. There are sufficient offsetting grant revenues and expenditures for a net ze ro impact. 531 Summary of Mid-Year Budget Requests • Approve appropriations of $850,537 • Projected General Fund FY 23/24 surplus after appropriation: $2M 12 TotalAmountDescriptionFund $843,187 $246,187Community & Library Services General Fund 597,000Fire Department $7,3507,350LRSP Grant FundOther Funds $850,537Total ($850,537)Less: Offsetting revenues $‐Net Increase 532 Questions? 533 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-209 MEETING DATE:3/19/2024 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Eric G. Parra, Interim City Manager VIA: Ashley Wysocki, Director of Community & Library Services Subject: Approve for introduction Ordinance No. 4318 adding Chapter 2.66 to the Huntington Beach Municipal Code Relating to the Community-Parent Guardian Review Board for Review of Procurement of Children’s Library Material Statement of Issue: There is a need to amend the Municipal Code to add language codifying the Community-Parent Guardian Review Board (Board) for procurement of children’s library materials, per City Council Resolution 2023-41. Financial Impact: The Board and Staff Liaison will make an annual request for City Council approval of funding to purchase new books for Board review that are not in circulation. Recommended Action: Approve for introduction Ordinance No. 4318, “An Ordinance of the City Council of the City of Huntington Beach amending the Huntington Beach Municipal Code by adding new chapter 2.66 Entitled “Community Parent-Guardian Review Board for Procurement of Children’s Library Materials.”” Alternative Action(s): Do not approve the recommended action, and direct staff accordingly. Analysis: On October 17, 2023, City Council approved Resolution 2023-41, establishing a policy for the review and recataloging of library materials containing sexual content. The Huntington Beach Municipal Code must be amended by adding section 2.66 to create the Community Parent- Guardian Review Board (Board) for Procurement of Children’s Library Materials, referenced in Resolution 2023-41. The updated Municipal Code provides the following key information: City of Huntington Beach Printed on 3/13/2024Page 1 of 2 powered by Legistar™534 File #:24-209 MEETING DATE:3/19/2024 ·Definitions of children’s books, sexual content, sexual references, and community standards ·Board purpose and composition ·Minimum meeting frequency ·Appropriate use of City Council annual allocated funding ·Board duties 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. 4318 City of Huntington Beach Printed on 3/13/2024Page 2 of 2 powered by Legistar™535 536 ORDINANCE NO. 4318 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AMENDING THE HUNTINGTON BEACH MUNICIPAL CODE BY ADDING NEW CHAPTER 2.66 ENTITLED "COMMUNITY PARENT-GUARDIAN REVIEW BOARD FOR PROCUREMENT OF CHILDREN'S LIBRARY MATERIALS" WHEREAS, the City ofHuntin1;ston Beach is a Chmier City and municipal corporation duly created and existing under a charter pursuant to which the City has the right and power to make and enforce all laws and regulations in respect to municipal affairs. The City Council of the City of Huntington Beach does hereby ordain as follows: SECTION 1. The Huntington Beach Municipal Code is hereby amended to add new Chapter 2.66 Entitled "Community Parent-Guardian Review Board for Procurement of Children's Library Materials" to read as follows: "Chapter 2.66 COMMUNITY PARENT-GUARDIAN REVIEW BOARD PROCUREMENT FOR CHILDREN'S LIBRARY MATERIALS 2.66.010 Established There is hereby established a new Community Parent-Guardian Review Board for Procurement of Children's Library Materials (hereinafter referred to in this Chapter as the "Board") which shall be a decision-making body pursuant to Huntington Beach Charter Section 405. 2.66.020 Definitions For the purpose of this Chapter, the following definitions apply: "Children" means persons under the age of eighteen (18) years old. "Children's Books" means any book, literary work, or other material, whether in hard copy or electronic, intended for anyone under the age of 18 or intended to be placed in the Children's Section(s) within any of the City Libraries or intended for Children's access. "Community Standards" means the Board's determinations regarding whether books are acceptable for Children's access, including books that may contain Sexual Content or Sexual References. "Sexual Content" is any content of a sexual nature, whether in the form of written text, or in the form of graphic depictions such as photos, drawings, cartoons, images, etc., for example, textual or graphic content including sex, sexual organs, sex acts, relationships of sexual nature, or sexual relations in any form. 537 ORDINANCE NO. 4318 "Sexual Reference" is any reference of a sexual nature, whether in the form of written text, or in the form of graphic depictions such as photos, drawings, cartoons, images, etc., for example, textual or graphic references to sex, sexual organs, sex acts, relationships of sexual nature, or sexual relations in any form. 2.66.030 Purpose The Board shall serve as a decision-making authority to the City to ensure that books that Children have access to in City Libraries meet the City's Community Standards for material acceptable for Children's access, including books that may contain Sexual Content or Sexual References, before such Children's Books are purchased by the City prior to placement in circulation or made accessible to Children without parental consent. Additionally, the Board may nominate Children's Books currently in circulation for review by the Board for determination of whether those Children's Books meet the Community Standards for material acceptable for Children's access, or whether those books require parental consent and are to be placed in the Adult Section of the City's Library. 2.66.040 Composition A. The Board shall consist of up to twenty-one members. Each City Council Member shall appoint up to three members of the Board to serve the same term as the City Council Member until their successors are elected and qualified. B. The service limitation contained in Section 2.100.060, which does not allow a person to serve on more than one Board or Commission at any one time shall not be applied to this Board due to its large membership, possible difficulty recruiting members, and limited scope of duties. Subject to California Government Code Section 1099, no Member may simultaneously hold two incompatible public offices. 2.66.050 Operating Policies Except as otherwise provided in this Chapter, the Board shall conform to the operating policies for Boards and Commissions as set forth in Chapter 2.100 of this Code. 2.66.060 Election and Officers The Board shall elect from its appointed members a Chairperson and Vice Chairperson at the first regular meeting of the calendar year and such officers shall serve for one year and until their successors are elected and qualified. The Chairperson and Vice Chairperson may make and second motions and shall have a voice and vote in all proceedings of the Board. No Chairperson or Vice Chairperson may serve consecutive years in the same role. 2 24-13971/333967 538 ORDINANCENO. 4318 2.66.070 Secretary The Director of Community & Library Services, or his or her designee, shall serve in a non- voting capacity as Secretary to the Board and shall prepare and retain permanent minutes of the Board meetings approved by the Board per the City's Record Retention Policy. 2.66.080 Meetings The Board shall meet at least twice each calendar year, and more if deemed necessary by the Director of Community & Library Services. As a "Brown Act" Board, the Meetings shall be conducted consistent with the provisions of the Brown Act. Roberts' Rules of Order ( current edition) shall govern the procedure of the meetings of the Board unless inconsistent with other provisions of this Chapter. As requires, the City Attorney and or his or her designee shall give legal advice to the Board regarding compliance with laws. 2.66.090 Quorum A. At any meeting of the Board, a simple majority of the current existing membership shall constitute a quorum for the transaction of business. B. In the event there is no quorum at a meeting, the Chair shall adjourn said meeting or shall adjourn to a date certain. 2.66.100 Funding All budget and expenses by the Board shall be managed in a predetermined account( s) by the City, subject to City purchasing and contracting policies and procedures. The Board and their staff liaison may determine and request an annual budget for the purchase of Children's Books to review. After review, all efforts will be made to sell or donate non-approved Children's Books to libraries outside the City of Huntington Beach. 2.66.110 Duties A. Review all Children's Books proposed for procurement by the City to determine by majority vote, in the Board's sole discretion, if such Children's Books meet the Community Standards of acceptance for the City of Huntington Beach to be placed in City Libraries. Make Recommendations for Children's Books that meet the Community Standards of acceptance to be purchased by the City, and/or to be accessible to Children without parental consent. The Board shall be provided a budget and ability to procure advance copies of Children's Books or Children's Books reviews as required for Board review. Any Children's Book may be nominated to be reviewed again after one year has passed from a previous decision by the Board. 3 24-13971/333967 539 ORDINANCENO. 4318 B. The Director of Community & Library Services or his or her designee will submit a list of Children's Books intended for purchase at least 45 days before the date of any Board meeting. Any Board Member may nominate any number of Children's Books from the list for review. If a Children's Book is nominated for review, it shall not be purchased by the City for Library circl!lation unless first approved by the Board. Once nominated, a Children's Book must be reviewed within one year of nomination. If a Children's Book is not nominated for review within 90 days from the submittal of the intended purchase list or reviewed by the Board within one year of nomination, it will be considered approved for purchase by the Board. C. The Board may also recommend that Children's Books currently in circulation at City Libraries be subject to the same Board review process on a case-by case basis. Any Board Member may submit a recommendation form that a Children's Book currently in circulation be reviewed by the Board. Should the Board find that a Children's Book currently in circulation does not meet Community Standards for Children's access without parental notification, it shall be placed in the Adult Section and subject to parental and/or guardian consent before either Children obtain access or the book is checked out by anyone under the age of 18. D. All Board Members present must review the Children's Book(s) before it may be subject to a Board vote. E. The Board must vote whether a Children's Book meets the Community Standards before the Board may vote on procurement/placement. F. If a proposed Children's Book proposed by the Director for procurement and not yet placed in circulation is reviewed and then rejected by the Board, the Board must place findings in the record and complete the Library Materials Review Form, which shall be placed in the minutes by the Secretary in detail as to the reasons the Board determined the proposed Children's Book did not meet the Community Standards or is unfit for placement in the Library. G. All decisions by the Board are final and non-appealable. H. A list of all Children's Books voted on by the Board, including the nomination and voting date, shall be displayed on the City's website on the Board's webpage. 4 24-13971/333967 540 ORDINANCENO. 4318 SECTION 2. This ordinance shall become effective 30 days after its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the ___ day of __________ , 2024. Mayor ATTEST: APPROVED A ~ORM: City Clerk REVIEWED AND APPROVED: INITIATED AND APPROVED: City Manager City Manager 5 24-13971/333967 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:24-208 MEETING DATE:3/19/2024 Item Submitted by Council Member McKeon - Withdrawal from the League of California Cities Request the City Manager to direct staff to negotiate with the League of California Cities for the reimbursement of 2024 dues and withdraw membership for 2024. City of Huntington Beach Printed on 3/13/2024Page 1 of 1 powered by Legistar™541 CITY OF HUNTINGTON BEACH CITY COUNCIL MEETING – COUNCIL MEMBER ITEMS REPORT TO: City Council FROM: Council Member McKeon DATE: March 19, 2024 SUBJECT: Withdrawal from the League of California Cities ISSUE STATEMENT The League of California Cities has repeatedly failed in its mission to advocate for cities, and instead advocates for more and higher taxes and Sacramento’s agenda over our own. They fought hard against the gas tax repeal and they have now supported Proposition 1, knowing that the by-right sober living home requirements in residential neighborhoods will now be supercharged by a multi-billion dollar bond measure. They are also fighting aggressively against the Taxpayer Protection and Government Accountability Act pushed by the Howard Jarvis Taxpayers Association, calling it deceptive and worse. We cann ot be sending our taxpayer dollars to support an organization that would knowingly harm our cities like Prop osition 1 has done and further remove our Local Control. Our neighbor, the City of Newport Beach, voted last week on March 12, 2024 , to not renew their membership in the League of California Cities, and Huntington Beach should follow suit and join our neighbors in sending a message to the League of California Cities that we will no longer support their efforts that damage our community and remove our local control. The City of Huntington Beach membership to the League of California Cities was paid on January 25, 2024. RECOMMENDED ACTION Request the City Manager to direct staff to negotiate with the League of California Cities for the reimbursement of 2024 dues and withdraw membership for 2024. Environmental Status: This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Strategic Plan Goal: Non Applicable - Administrative Item For details, visit www.huntingtonbeachca.gov/strategicplan. 542