City of Costa Mesa
REGULAR CITY COUNCIL AND SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY AND HOUSING AUTHORITY
Agenda
City Council Chambers
77 Fair Drive
5:00 PMTuesday, March 8, 2022
Study Session
The City Council meetings are presented in a hybrid format, both in-person at City Hall and virtually via Zoom Webinar. Pursuant to the State of California Assembly Bill 361(Gov. Code §54953(b)(3)) the City Council Members and staff may choose to participate in person or by video conference.
You may participate via the following options:
1. Attending in person: If you are not fully vaccinated you are required to wear a mask while indoors at City Hall or the Council Chambers.
2. Members of the public can view the City Council meetings live on COSTA MESA TV (SPECTRUM CHANNEL 3 AND AT&T U-VERSE CHANNEL 99) or
http://costamesa.granicus.com/player/camera/2?publish_id=10&redirect=true and online at youtube.com/costamesatv.
1 REGULAR CITY COUNCIL AND
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY AND
HOUSING AUTHORITY
Agenda March 8, 2022
3. Zoom Webinar:
Please click the link below to join the webinar:
https://zoom.us/j/98376390419?pwd=dnpFelc5TnU4a3BKWVIyRVZMallZZz09 Or sign into Zoom.com and “Join a Meeting”
Enter Webinar ID: 983 7639 0419/ Password: 905283
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• During the Public Comment Period, use the “raise hand” feature located in the participants’ window and wait for city staff to announce your name and unmute your line when it is your turn to speak. Comments are limited to 3 minutes, or as otherwise directed.
Participate via telephone:
Call: 1 669 900 6833 Enter Webinar ID: 983 7639 0419/ Password: 905283 During the Public Comment Period, press *9 to add yourself to the queue and wait for city staff to announce your name/phone number and press *6 to unmute your line when it is your turn to speak. Comments are limited to 3 minutes, or as otherwise directed.
4. Additionally, members of the public who wish to make a written comment on a specific agenda item, may submit a written comment via email to the City Clerk at [email protected]. Comments received by 12:00 p.m. on the date of the meeting will be provided to the City Council, made available to the public, and will be part of the meeting record.
5. While the City does not expect there to be any changes to the above process for participating in this meeting, if there is a change, the City will post the information as soon as possible to the City’s website.
Note that records submitted by the public will not be redacted in any way and will be posted online as submitted, including any personal contact information. All pictures, PowerPoints, and videos submitted for display at a public meeting must be previously reviewed by staff to verify appropriateness for general audiences. No links to YouTube videos or other streaming services will be accepted, a direct video file will need to be emailed to staff prior to each meeting in order to minimize complications and to play the video without delay. The video must be one of the following formats, .mp4, .mov or .wmv. Only one file may be included per speaker for public comments. Please e-mail to the City Clerk at [email protected] NO LATER THAN 12:00 Noon on the date of the meeting.
2 REGULAR CITY COUNCIL AND
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY AND
HOUSING AUTHORITY
Agenda March 8, 2022
Note regarding agenda-related documents provided to a majority of the City Council after distribution of the City Council agenda packet (GC §54957.5): Any related documents provided to a majority of the City Council after distribution of the City Council Agenda Packets will be made available for public inspection. Such documents will be posted on the city’s website and will be available at the City Clerk's office, 77 Fair Drive, Costa Mesa, CA 92626.
All cell phones and other electronic devices are to be turned off or set to vibrate. Members of the audience are requested to step outside the Council Chambers to conduct a phone conversation.
Free Wi-Fi is available in the Council Chambers during the meetings. The network username available is: CM_Council. The password is: cmcouncil1953.
As a LEED Gold Certified City, Costa Mesa is fully committed to environmental sustainability.
A minimum number of hard copies of the agenda will be available in the Council Chambers.
For your convenience, a binder of the entire agenda packet will be at the table in the foyer of the Council Chambers for viewing.
The City of Costa Mesa aims to comply with the Americans with Disabilities Act (ADA) in all respects. If, as an attendee or a participant at this meeting, you will need special assistance beyond what is currently provided, the Clerks office will attempt to accommodate in a reasonable manner. Please contact the City Clerk’s office 24 hours prior to the meeting to inform us of your particular needs and to determine if accommodation is feasible 714-754-5225 or at [email protected].
El objetivo de la Ciudad de Costa Mesa es cumplir con la ley de Estadounidenses con Discapacidades (ADA) en todos los aspectos. Si como asistente o participante en esta junta, usted necesita asistencia especial, más allá de lo que actualmente se proporciona, la oficina del Secretario de la Ciudad intentara de complacer en una forma razonable. Favor de comunicarse con la oficina del Secretario de la Ciudad con 24 horas de anticipación para informarnos de sus necesidades y determinar si alojamiento es realizable al 714-754-5225 o [email protected].
3 REGULAR CITY COUNCIL AND
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY AND
HOUSING AUTHORITY
Agenda March 8, 2022
REGULAR STUDY SESSION OF THE CITY COUNCIL
MARCH 8, 2022 – 5:00 P.M.
JOHN STEPHENS
Mayor
MANUEL CHAVEZ ANDREA MARR
Council Member - District 4 Mayor Pro Tem - District 3
JEFFREY HARLAN LOREN GAMEROS
Council Member - District 6 Council Member - District 2
ARLIS REYNOLDS DON HARPER
Council Member - District 5 Council Member - District 1
KIMBERLY HALL BARLOW LORI ANN FARRELL HARRISON
City Attorney City Manager
CALL TO ORDER
PLEDGE OF ALLEGIANCE
ROLL CALL
STUDY SESSION ITEM:
1. FISCAL YEAR 2021-2022 MID-YEAR BUDGET UPDATE 22-604
RECOMMENDATION:
Staff recommends that City Council receive and file the FY 2021-22 mid-year budget update for the current fiscal year that began on July 1, 2021 and ends on June 30, 2022.
1. FY 21-22 General Fund Overview
2. Sales Tax Report
3. CM21-005 Property Tax (December 2021)
Attachments:
ADJOURNMENT
4 City of Costa Mesa
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 22-604 Meeting Date: 3/8/2022
TITLE:
FISCAL YEAR 2021-2022 MID-YEAR BUDGET UPDATE
DEPARTMENT: FINANCE DEPARTMENT
PRESENTED BY: CAROL MOLINA, FINANCE DIRECTOR
CONTACT INFORMATION: CAROL MOLINA, FINANCE DIRECTOR (714) 754-5243 RECOMMENDATION:
Staff recommends that City Council receive and file the FY 2021-22 mid-year budget update for the current fiscal year that began on July 1, 2021 and ends on June 30, 2022.
BACKGROUND:
On June 15, 2021, the Fiscal Year 2021-22 Operating and Capital Improvement Budget was adopted by the City Council. The Adopted General Fund budget totaled $154.4 million and the All Funds (including restricted funds) budget totaled $197.9 million with a total of 651.9 Full Time Equivalents (FTEs) across City departments.
All City Departments continue to exercise fiscal prudence by monitoring their budgets to ensure there are sufficient appropriations for essential programs; expending actual revenue that has been received or awarded in grants or restricted funds; and making minor adjustments to staffing to better address workload demands and Council priorities.
ANALYSIS:
Since the onset of the pandemic, the City has proactively implemented and managed its finances to ensure fiscal sustainability throughout the impacted period and beyond. The pandemic first affected the City’srevenues during the last quarter of Fiscal year 2019-20, from April through June 2020. The City Council approved the temporary suspension of capital projects and reduced spending to emergency-related items only. As a result, the FY 2019-20 General Fund Budget ended with a slight $160,000 increase to the Fund Balance without the need to dip into the City’s reserves.
The following year, Fiscal Year 2020-21 marked the first full year of the pandemic. Expenditure reductions were approved and implemented across all departments including a 5% employee pay furlough, the temporary defunding of numerous vacant positions, and targeted operating reductions in all departments.
The current Fiscal Year 2021-22 budget anticipates a gradual recovery from the fiscal impacts of the
5 File #: 22-604 Meeting Date: 3/8/2022
The current Fiscal Year 2021-22 budget anticipates a gradual recovery from the fiscal impacts of the pandemic. More than halfway through the fiscal year, the City is experiencing a rebound in Sales Tax revenues, higher than budgeted rebound in hotel taxes, and the continued growth of Property Taxes.
Overall, the FY 2021-22 year-to-date financials reflect that revenues and expenditures are generally better than projections made in the Fiscal Year 2021-22 Adopted Budget. As of December 31, 2021, the General Fund recorded 41% of the projected revenues and 51% of budgeted expenditures.
These percentages are generally consistent with what is expected at this time of the fiscal year.
Revenues and expenditures do not occur uniformly throughout the year, so at the end of the second quarter we do not expect to see 50% of the annual realized revenue. Further details are included below.
Federal American Rescue Plan Act (ARPA) Funding
By March 2021, the $26.2 million ARPA (American Rescue Plan Act) funding passed Congress and the first half, $13.1 million, was realized in the City’scoffers. Next month, in April 2022, we anticipate receiving the second half of the City’sallocation of ARPA funds. Fiscal relief provided by ARPA allowed the City to reinstate staffing and to end the employee furloughs with full reimbursement to the employees, reinstate the Capital Asset Needs (CAN) funding, increase funding for Information Technology projects, and eliminate the deficit in the Disaster Fund (Fund 150), where the expenditures related to the emergency were booked. With all these strategic adjustments and prudent financial management, the City’s emergency reserves in the General Fund were again untouched.
The City is expecting to receive the second half of its ARPA allocation totaling $13.1 million by next month. We are pleased to report that ARPA funds are much more flexible than prior emergency relief funds such as CARES Act funding. Just recently, new Department of Treasury guidelines were released stating that these funds can also be utilized for: premium pay for essential workers, to restore positions, and restore employment: funding for employees that experienced pay reductions or work furloughs; to maintain compensation levels to prevent layoffs, and for worker retention incentives, including reasonable increases in compensation.
As such, realigning positions, leveraging existing positions, revamping the recruitment process, and reasonably increasing compensation to market levels, are all eligible uses of ARPA funds. City staff recommends the use of ARPA funds to recruit and retain high quality staff as approved by City Council as one of the City Council’sgoals and now within the scope of ARPA’seligibility requirements and guidelines.
REVENUES
The City continually monitors and adjusts its revenue projections based on revenue performance and other developments that impact City revenues. It is important to note that several key revenues are received at different times throughout the fiscal year. Sales Tax represents 40% of the total annual General Fund revenue and is the largest revenue category. Property Tax represents 33% of the total General Fund revenues budget and is primarily received in the December/January and April/May periods. Transient Occupancy Tax (TOT) represents 4% of total General Fund Revenues, and is received monthly. Although TOT receipts have increased since last fiscal year, this revenue stream continues to be impacted by the pandemic and the loss of group business mainly comprised of industry and trade conferences and bookings. Cannabis Gross Receipts Tax represents 1.3% of budgeted General Fund Revenues, but will not materialize at the level budgeted as the retail
6 File #: 22-604 Meeting Date: 3/8/2022
budgeted General Fund Revenues, but will not materialize at the level budgeted as the retail cannabis program’simplementation is still underway. As of today, based on these trends, we are amending the General Fund Year-End projections from $154.4 million (including transfers) to a total of $156.0 million, a projected increase of $1.6 million.
EXPENDITURES
The Fiscal Year 2021-22 expenditures budget was $154.4 million for Citywide services with public safety comprising over 50% of total expenses. As of this writing, General Fund expenditures are expected to come in below budgeted levels by $1.2 million, at $153.2 million, due to greater than anticipated vacancies.
These expenditure savings combined with the increased revenue projections will result in an estimated year end savings in the General Fund budget of approximately $2.8 million.
Fiscal Year 2021-22 Mid-Year Update
Strengthen the Public Safety and Improve the Quality of Life The City Council has implemented a goal to strengthen the public’ssafety and improve the quality of life in Costa Mesa. There are a few critical positions in the safety departments that staff will be requesting at a future Council meeting to further strengthen our public safety response. The experience of the pandemic has only heightened the necessity to identify critical areas of operation that need additional support; hence, a request will be made shortly to add a few new key positions in the Police and Fire and Rescue Departments to strengthen our public safety response.
In addition, throughout the year, the City’spublic safety personnel provides mutual aid support to other jurisdictions. This is a situation that occurs more frequently in the Fire Department, but with the pandemic, we also experienced this in the Police Department. In these situations, Costa Mesa will respond to the call for help and send our personnel and fleet to assist others. After that response, the
7 File #: 22-604 Meeting Date: 3/8/2022
respond to the call for help and send our personnel and fleet to assist others. After that response, the City will receive full reimbursement for the expenses incurred. At a future meeting, Staff will also be requesting that City Council authority be provided to appropriate funds as revenues are received to ensure net neutral impacts to the City’spublic safety departments. Based on our review of the City’s financial performance thus far, these adjustments can be accommodated in this fiscal year.
Recruiting and Retaining High Quality Staff
City Council identified and approved a goal to recruit and retain high quality staff at the September 2021 Strategic Plan Retreat. It is imperative that the City enhance its ability to actively recruit and retain talented staff. As a result, staff is proposing to create a new Recruitment Office in the Human Resources Division of the City Manager’s Office with the addition of two key positions and the realignment of other staff to those duties full time. Further, staff will be recommending to bring a second round of positions for market based adjustments to further enhance our recruitment and retention efforts. Phase 1 of the hard-to-fill positions was presented and approved by the City Council in December 2021. The next phase will be presented on March 15, 2022.
FISCAL REVIEW:
There is no fiscal impact to receiving and filing this report. All future proposed staffing changes will be fully costed and presented to the City Council with detail regarding specific funding available and annualized costs when presented to the City Council.
LEGAL REVIEW:
The City Attorney has reviewed and approved this report as to form.
CITY COUNCIL GOALS AND PRIORITIES:
This item supports the following City Council Goals:
· Strengthen the Public’s Safety and Improve the Quality of Life · Achieve Long-term Fiscal Sustainability
· Recruit and Retain High Quality Staff
· Diversify, Stabilize and Increase Housing to Reflect Community Needs · Advance Environmental Sustainability and Climate Resiliency CONCLUSION:
Staff recommends that City Council receive and file the mid-year budget review for Fiscal Year 2021- 22 that began on July 1, 2021.
8 Fiscal Year 2021/2022
General Fund Overview
Property Taxes $49.6 $49.7 $0.1
Sales Tax 61.0 66.1 5.1 TOT (hotel tax) 5.6 6.7 1.1 Cannabis (fees and
permits) 3.3 2.5 (0.8) Other Revenues 25.1 28.0 2.9 Subtotal 144.6 153.0 8.4 Use of Reserves 3.2 0.0 (3.2) Transfer In – Use of ARPA 6.6 3.0 (3.6) Total Funding Sources 154.4 156.0 1.6 -
Expenditures (154.4) (153.2) 1.2 Surplus/(Deficit) $ - $ 2.8 $ 2.8 Category Adopted
FY 21-22
Projected
FY 21-22* Difference
9 CM22-001
CITY OF COSTA MESA
FINANCE DEPARTMENT
INTEROFFICE MEMORANDUM
TO: DISTRIBUTION
FROM: CAROL MOLINA, FINANCE DIRECTOR
DATE: FEBRUARY 8, 2022
SUBJECT: SALES TAX INFORMATION – 3RD QUARTER (JULY 2021 – SEPT. 2021)
Attached are the Third Quarter Sales Tax Receipts Reports (July thru September 2021). Costa Mesa businesses continue to rebound from the fiscal impacts that were brought on by the pandemic. The low interest rate environment and pent up consumer demand has resulted in stronger sales tax returns. The third quarter experienced a healthy sales tax receipts, particularly in the purchases of general consumer goods, such as high-end jewelry, automobiles and appliances. Additionally, higher property values have resulted in an increase in home improvement projects; thereby resulting in a healthy increase of building supplies sales, such as lumber.
As we continue to review all revenues received, it is important to remember that the travel/hotel industry continues to struggle. Business conferences have not yet returned to in-person events; thereby resulting in lower hotel occupancies than experienced before the pandemic. The higher sales tax receipts have helped offset the impacts of the hotel industry.
Staff continues to manage the fiscal year’s budget and work with HDL to obtain further information as it relates to the City’s continued sales tax performance.
Please feel free to reach out to me directly if you have any questions.
_________________________________
Carol Molina
Finance Director
Attachments
Distribution:
City Council Members (7)
Planning Commissioners (5)
Department Directors and Staff
Finance and Pension Advisory Committee (9)
Carla Valenzuela, Chamber of Commerce
Attachment 2
10 www.hdlcompanies.com | 888.861.0220
Q3 2020*
Q3 2021*
Legend
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
SALES TAX BY MAJOR BUSINESS GROUP*Allocation aberrations have been adjusted to reflect sales activity General
Consumer
Goods
Autos
and
Transportation
County
and State
Pools
Restaurants
and
Hotels
Business
and
Industry
Building
and
Construction
Fuel and
Service
Stations
Food
and
Drugs
TOP 25 PRODUCERSCITY OF COSTA MESA HIGHLIGHTS
Published by HdL Companies in Winter 2022
SALES TAX UPDATE
CITY OF COSTA MESA
3Q 2021 (JULY - SEPTEMBER)
Audi Fletcher Jones
Autonation Honda
Best Buy
Bloomingdale’s
Carmax
Cartier
Chanel
Christian Dior
Connell Chevrolet
Eurocar
Ganahl Lumber
Company
Gucci
Hermes
Home Depot
IKEA
Louis Vuitton
Macys
Nordstrom
Pacific Auto Center
Orange Coast Chrysler
Jeep Dodge Ram Fiat
South Coast Toyota
Target
Tesla Motors
Tiffany & Co
Tourneau
Costa Mesa’s receipts from July through
September were 37.6% above the third
sales period in 2020. Excluding reporting
aberrations, actual sales were up 34.8%.
This strong percentage gain signifies the
continued rebound from the pandemic
impacts of a year ago.
Dramatic rebounds from multiple
retailers including women & family
apparel, department & jewelry stores
were largely responsible for the general
consumer growth. With minimal mask
requirements, available indoor and
outdoor options, continued pent up
demand to dine out, and return of the
County Fair, receipts from all restaurants
surpassed any amounts previously
reported.
Continued strong demand and limited
inventory for vehicles causing elevated
pricing for buyers contributed to
sensational returns from new and used
auto dealers, while an increased number
of commuters bringing about a lack of
supply having upward pressure on gas
prices resulted in stellar growth from
service stations.
Revenue from building-construction
suppliers rose during this summer
period with a solid housing market, still
rather low interest rate environment
and increased cost of lumber having an
impact.
Allocations from the countywide use tax
pools also grew 16%, however this is less
than most recent periods. Sales by online
merchants make up a considerable
portion of the overall activity, and total
purchases compared to the pandemic
shutdown periods are slowing.
TOTAL: $ 18,493,542
34.8% 18.8% 18.2%
COUNTY STATE
COSTA MESA
3Q2021
11 TOP NON-CONFIDENTIAL BUSINESS TYPES
Q3 '21*
Costa Mesa
Business Type Change Change Change
County HdL State
18.7%19.0%24.6% 2,061.7 New Motor Vehicle Dealers
39.2%45.8%70.9% 1,593.3 Family Apparel
16.4%16.8%2.7% 1,095.6 Used Automotive Dealers
52.1%50.4%53.4% 1,092.2 Department Stores
69.0%65.2%78.9% 864.6 Casual Dining
38.0%52.8%63.6% 846.5 Jewelry Stores
11.0%11.9%13.2% 792.1 Home Furnishings
53.3%62.8%52.2% 649.6 Service Stations
67.7%75.5%146.1% 578.8 Women's Apparel
14.4%16.4%48.0% 524.1 Quick-Service Restaurants
*Allocation aberrations have been adjusted to reflect sales activity *In thousands of dollars $0
$4,000
$8,000
$12,000
$16,000
Costa Mesa
Q3
18 Q3
21 Q3
19 Q3
20 County California
SALES PER CAPI TA*
*ADJUSTED FOR
ECONOMIC D
ATA
SALES TAX UPDATECITY OF COSTA MESA3Q 2021
STATEWIDE RESULTS
Local one cent sales and use tax receipts
for sales occurring July through September
were 18% higher than the same quarter
one year ago after adjusting for accounting
anomalies and back payments from
previous quarters. These aberrations had
been much greater than normal in the last
two years as the Governor’s Executive
Orders allowed businesses to defer some
sales tax payments as a supportive measure
during the pandemic. This program has
now expired, and merchant remittances are
more consistent, making cash receipts more
reflective of underlying economic activity.
The prior year comparison quarter was the
start of the pandemic recovery, and the
strong growth enjoyed since continued
with the recent results.
Surprisingly, one of the stronger sectors
has been restaurants and hotels. Originally
forecasted to take an extended amount
of time to recover, statewide sales tax
generated during the summer months
exceeded amounts from pre-pandemic
2019. Even with the availability of indoor
and outdoor dining, pent up demand
resulted in long wait times to enjoy local
culinary experiences. When combined
with increasing restaurant tabs as the
cost of food and staff wages surge, sales
tax remittances are expected to continue
growing. Additionally, while the industry
awaits the return of foreign tourism in
metropolitan areas, strong domestic travel
has helped varied regions around the state
especially Southern California and the
Central Coast.
Receipts from general consumer goods
marked a steady recovery, led by apparel
retailers, jewelry, electronic/appliance and
specialty outlets. Discount department
stores, especially those selling gas, helped
exemplify the strength of brick-and-mortar
merchants. Gains from the countywide use
tax pools however, slowed to 2% compared
to the high-water mark last year, which
had been boosted by new tax collecting
requirements imposed under AB 147 for
online retailers. All things considered, when
combined with positive economic trends,
these are a welcome sign leading up to the
holiday shopping period.
Although car dealers had expressed
concerns about inventory shortages due
to supply chain disruptions and computer
chip shortages earlier in the year, the sale
of new and used vehicles posted solid gains
regardless. Higher property values and good
weather contributed to strong building
materials and contractor returns. As
commuting workers and travelers returned
to the road with increased gas prices, fuel
and service stations also experienced a
dramatic recovery.
Overall growth is expected to continue
through the end of the 2021 calendar year.
Possible headwinds into 2022 include:
pent up demand for travel and experiences
shifting spending away from taxable goods;
higher prices for fuel, merchandise and
services displacing more of consumer’s
disposable income; and expected interest
rate hikes resulting in more costly financing
for automobiles, homes, and consumer
loans.
12 CM21-005
CITY OF COSTA MESA
FINANCE DEPARTMENT
INTEROFFICE MEMORANDUM
TO: DISTRIBUTION
FROM: CAROL MOLINA, FINANCE DIRECTOR
DATE: DECEMBER 27, 2021
SUBJECT: PROPERTY TAX SUMMARY – FISCAL YEAR 2021/22
Attached is the fiscal year 2021/22 Property Tax Newsletter Report. Home sales growth started in the summer of 2020 that resulted in an increase in property tax values and sales. The City’s median sale price grew from $915,000 to almost $1.1 million, a 15 percent growth year over year. The low interest rate environment has also contributed to increased home values, and a strong housing market. The growth has been partially offset by property tax reductions successfully achieved by hotels due to the continued impact to the hospitality industry.
Property tax revenues continue to increase as a result. Fiscal year 2020/21 ended the year with $47.5 million, a $2.3 million, or five percent increase over the prior year. It is important to remain cautious, as the Federal Reserve looks to increase rates in 2022. Staff will continue to monitor the City’s revenues to ensure fiscal sustainability.
Please feel free to reach out to me directly if you have any questions.
_________________________________
Carol Molina
Finance Director
Attachments
Distribution:
City Council Members (7)
Planning Commissioners (5)
Department Directors and Staff
Finance and Pension Advisory Committee (8)
Carla Valenzuela, Chamber of Commerce
Attachment 3
13 2021/22 PROPERTY TAX SUMMARY
COSTA MESA
714.879.5000 www.hdlcompanies.com
The City of Costa Mesa experienced a net taxable value increase of 2.8% for the 2021/22 tax roll, that was slightly less than the increase experienced countywide at 3.7%. The assessed value increase between 2020/21 and 2021/22 was $620 million.
The change attributed to the 1.036% Proposition 13 inflation adjustment was $201 million. That accounted for 32% of all growth experienced in the City.
The largest assessed value increase was reported on a commercial parcel that is the site of the Tradewinds Mobile Home Park (2191 Harbor Blvd.). The parcel, which was recently purchased in 2020, has been reappraised adding over $18.6 million to the roll. New improvements added to a parcel owned by Harrington Investment Company (Fletcher Jones Audi) added $8.5 million.
The sale of an industrial parcel to NP Pullman LLC (3140 Pullman Street) triggered a reappraisal and a $7.6 million increase in value between tax years.
The largest assessed value decline was reported on a commercial parcel owned by 1640 Newport Blvd. LP (Pacific Medical Plaza). The property was granted an assessment appeal which was partially offset by a decrease in the exemption amount. The total net change was a value decrease of $16.7 million. A commercial parcel this is the site of the Hilton hotel located at 3050 Bristol Street received an appeal reduction of $15.4 million. Similarly, an appeals reduction for the parcel that houses the Residence Inn at 881 Baker Street reduced that value by $8.1 million. Hotel reductions have become very common in the 2021/22 roll year due to hospitality closures in 2020.
Growth in home sales strengthened in the summer of 2020 and many cities saw an increase in properties for sale. Sales price increases in 2020 were reflected on the 2021/22 tax rolls. North Bay counties saw mild declines in median prices in late 2019 and early 2020 and Southern California counties saw a flattening of prices in many areas. Homes prices increased in the second half of 2020. Sale prices grew due to low inventory and the declining mortgage rates. These conditions have continued to caused prices to rise in 2021. The median sale price of a detached single family residential home in Costa Mesa from January through September was $1,055,000. This represents a $140,000 (15.30%) increase in median sale price from 2020. 2021/22 Tax Shift Summary
ERAF I & II
VLFAA (est.)
$-7,334,894
$13,637,178
% ChangeYear Median PriceD-SFR Sales
7332015 $705,000
667 3.90%2016 $732,500
724 7.17%2017 $785,000
765 7.90%2018 $847,000
709 1.53%2019 $860,000
720 6.40%2020 $915,000
635 15.30%2021 $1,055,000
Top 10 Property Owners
% of TotalNet Taxable ValueOwner Use Type
THE IRVINE COMPANY LLC1. Commercial 2.16%$491,278,516
SOUTH COAST PLAZA2. Commercial 1.51%$344,114,817
PR II MCC SOUTH COAST PROPERTY OWNER LLC3. Commercial 1.17%$266,446,184 UNITED DOMINION REALTY LP4. Residential 0.93%$212,355,195 AUTOMOBILE CLUB OF SOUTHERN CA5. Commercial 0.76%$172,198,648 CASDEN LAKES LP6. Residential 0.61%$139,622,323
SOCO RETAIL FEE OWNER LLC7. Industrial 0.58%$131,369,122 S-TRACT LLC8. Commercial 0.56%$126,384,748
C J SEGERSTROM AND SONS9. Commercial 0.52%$117,922,480
BAKER BLOCK ASSOCIATES LP10. Residential 0.50%$114,531,890 Top Ten Total $2,116,223,923 9.31%
14 Real Estate Trends
714.879.5000 www.hdlcompanies.com
Home Sales
While a reduction in the number of single -family home sales was experienced in many areas and sales price changes reflected modest declines or increases in 2019 and early 2020, these market trends were impacted by COVID -19 beginning in March 2020. The number of home sales plummeted as potential buyers stayed home. After major reductions in the number of sales in April and May, sales of detached SFR rebounded and statewide the number of sales increased by 3.5% over 2019. Statewide, the median sales prices for July 2021 increased by 21.74% over July 2020 and were up by 33.42% over July 2019. The statewide median time on the market for detached SFR was 8 days in July 2021. The 30-year, fixed-mortgage interest rate averaged 2.71% as of September 2, 2021 down from 3.16% in June 2020.
Units Sold
June-2020
Units Sold
June-2021 % Change % Change
Median Price
June-2021
Median Price
June-2020All Homes
Imperial County 143 141 -1.40% 12.00%$250,000 $280,000 Los Angeles County 5,148 8,178 58.86% 22.48%$645,000 $790,000 Orange County 2,616 4,106 56.96% 16.13%$775,000 $900,000 Riverside County 3,912 5,154 31.75% 18.94%$425,000 $505,500 San Bernardino County 2,655 3,534 33.11% 19.73%$367,500 $440,000 San Diego County 3,621 4,816 33.00% 25.00%$600,000 $750,000 Ventura County 797 1,113 39.65% 24.39%$615,000 $765,000 Housing Affordability Remains a Challenge Throughout California The COVID-19 pandemic inhibited property sales in the first quarter of 2020 but for most communities it did not significantly impact 2020-21 assessed value growth from transfers of ownership. The stay -at-home orders, business closures and other economic impacts affected 2021-22 growth by reducing the annual CPI adjustment from the maximum 2% to 1.036%. New construction already underway did not see a decline, however, the shortages of building materials affected new construction starts in the second half of the 2020 and into 2021.
Gains in median housing prices do not suggest that there is any potential for county assessors to apply Proposition 8 value reductions on single family homes. While assessed values on the 2020-21 rolls were not impacted by the pandemic, the effects of the pandemic are reflected in large increases in assessment appeals activity for that fiscal year. The chart below reflects 2019-20 and 2020-21 values under appeal by property owners in select counties as a percentage of total taxable values reported in each year.
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Alameda Contra Costa Los Angeles Orange Riverside Sacramento San Bernardino San Diego San Mateo Santa Clara Solano Ventura % of Value with Appeals
Filed 2019 -20
% of Value with Appeals
Filed 2020 -21
Comparison of Value Under Appeal By County
2019 -20 to 2020 -21 , as a percentage of total taxable value 15