Agenda packet — Half Moon Bay City Council, December 16, 2024 (part 1 of 2)

CITY COUNCIL AGENDA

SPECIAL MEETING

CITY OF HALF MOON BAY
MONDAY, DECEMBER 16, 2024

HYBRID MEETING (SEE NEXT PAGE)

ADCOCK COMMUNITY CENTER
535 KELLY AVENUE
HALF MOON BAY, CA 94019
Joaquin Jimenez, Mayor
Harvey Rarback, Vice Mayor
Robert Brownstone, Councilmember
Deborah Penrose, Councilmember
Debbie Ruddock, Councilmember
6:00 PM
This agenda contains a brief description of each item to be considered. Those wishing to address the City Council on any matter not listed on the agenda, but within the jurisdiction of the City Council to resolve, may come forward to the podium during the Public Forum portion of the agenda and will have a maximum of three minutes to discuss their item.

Comments on City Manager Updates and Consent Calendar items should be made during the Public Forum section of the agenda. Those wishing to speak on a Business or Public Hearing matter will be called forward at the appropriate time during that item’s consideration.

Please Note: Anyone wishing to present materials to the City Council, please submit seven copies to the City Clerk.

Copies of written documentation relating to each item of business on the agenda are on file in the Office of the City Clerk at City Hall where they are available for public inspection. If requested, the agenda shall be available in appropriate alternative formats to persons with a disability, as required by Section 202 of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132.) Information may be obtained by calling 650-726-8271.

In compliance with the Americans with Disabilities Act, special assistance for participation in this meeting can be obtained by contacting the City Clerk’s Office at 650-726-8271. A 48-hour notification will enable the City to make reasonable accommodations to ensure accessibility to this meeting (28 CFR 35.102-35.104 ADA Title II). http://hmbcity.com/
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1 HYBRID MEETING PARTICIPATION PROTOCOLS
This meeting will be held in-person and via Zoom for public participation. Remote participation is provided as a supplemental way to provide public comment, but this method does not always work. The public is encouraged to attend in person to ensure full participation. Public comments may be made in-person or remotely via Zoom, and interpretation will be available. All Councilmembers and staff will participate in person. During any public comment portions, attendees may use the “raise your hand” feature and will be called upon and unmuted when it is their turn to speak. The meeting will also be streamed on Channel 27, on pacificcoast.tv, and on Facebook at www.facebook.com/cityofhalfmoonbay. Please click to join the webinar: https://us06web.zoom.us/j/87674804231 or join by phone at 669-900-9128, using Webinar ID 876-7480- 4231. If joining by phone, use *9 to raise your hand, *6 to mute and unmute.

ROLL CALL / PLEDGE OF ALLEGIANCE
2024 STATE OF THE CITY PRESENTATION

PUBLIC FORUM

1. CONSENT CALENDAR
1A. WAIVE READING OF RESOLUTIONS AND ORDINANCES
1B. FINAL RESULTS OF THE NOVEMBER 5, 2024 GENERAL MUNICIPAL ELECTION Staff Recommendation: Adopt a resolution declaring the final results of the November 5, 2024 General Municipal Election.

STAFF REPORT

RESOLUTION
1C. WARRANTS FOR THE MONTH OF NOVEMBER 2024
Staff Recommendation: Accept the warrants list for the month of November 2024.

STAFF REPORT

ATTACHMENT
1D. ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR) FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Staff Recommendation: Adopt a resolution receiving the City of Half Moon Bay Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2024.

STAFF REPORT
ATTACHMENT 1
2 ATTACHMENT 2

ACKNOWLEDGEMENT OF OUTGOING COUNCILMEMBERS

REMARKS BY OUTGOING COUNCILMEMBERS

SWEARING IN OF NEW COUNCILMEMBERS

REMARKS BY INCOMING COUNCILMEMBERS
SELECTION OF MAYOR AND VICE MAYOR FOR 2025

REMARKS BY INCOMING MAYOR

2. CONSENT CALENDAR
2A. 2025 CALENDAR OF CITY COUNCIL MEETINGS
Staff Recommendation: By motion, adopt the City Council Calendar for 2025.

STAFF REPORT

ATTACHMENT

3. ORDINANCES AND PUBLIC HEARINGS
3A. RESOLUTION OF PUBLIC INTEREST AND CONVENIENCE APPROVING THE CITY’S SALE OF A PORTION OF 880 STONE PINE ROAD (6.87-ACRE PORTION OF APN: 056-260-180) FOR THE CONSTRUCTION OF A 47-UNIT AFFORDABLE FARMWORKER HOUSING PROJECT Staff Recommendation: Continue the public hearing to a date certain of January 21, 2025, at 7:00 p.m. or as soon thereafter that the matter can be heard at the City Council meeting held at the Ted Adcock Community Center (TACC) 535 Kelly Avenue, Half Moon Bay, CA 94019

STAFF REPORT

ADJOURNMENT

RECEPTION IMMEDIATELY FOLLOWING
3 BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY

AGENDA REPORT
For meeting of: December 16, 2024
TO: Honorable Mayor and City Council
VIA: Matthew Chidester, City Manager
FROM: Jessica Blair, Communications Director / City Clerk TITLE: FINAL RESULTS OF THE NOVEMBER 5, 2024 GENERAL MUNICIPAL ELECTION ______________________________________________________________________________ RECOMMENDATION:

Adopt a resolution declaring the final results of the November 5, 2024 General Municipal Election.

FISCAL IMPACT:

None associated with this action.

STRATEGIC ELEMENT:

This recommendation supports the Inclusive Governance Element.

BACKGROUND:

A General Municipal Election was held in Half Moon Bay on November 5, 2024 for the purpose of electing one councilmember for District 2 and one councilmember for District 3 to four-year terms, and a Transactions and Use Tax Measure (Measure R).

The County of San Mateo Elections Division has canvassed the votes and certified the election results. The City is also required to certify the election results.

ATTACHMENT:

Resolution Declaring the Final Results of the November 4, 2024 General Municipal Election 4 RESOLUTION NO. C-2024-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HALF MOON BAY RECITING THE FACT OF THE GENERAL MUNICIPAL ELECTION HELD ON NOVEMBER 5, 2024,

DECLARING THE RESULT AND SUCH OTHER MATTERS AS PROVIDED BY LAW WHEREAS, a Municipal Election was held and conducted in the City of Half Moon Bay on Tuesday, November 5, 2024, as required by law; and
WHEREAS, notice of the election was given in time, form, and manner as provided by law; voting precincts were properly established; election officers were appointed; and in all respects the election was held and conducted and the votes were cast, received, and canvassed, and the returns made and declared in time, form, and manner as required by the provisions of the Elections Code of the State of California for the holding of elections in General Law Cities; and WHEREAS, the County Elections Department canvassed the returns of the Election and has certified the results, the results are received, and made a part hereof as Exhibit A.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HALF MOON BAY, CALIFORNIA DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. That the whole number of ballots cast in District 2 was 1,114. The whole number of ballots cast in District 3 was 1,407. That the whole number of ballots cast in the city was 6,604.

Section 2. That the names of persons voted for at the election for Members of the City Council are as follows:

Patric Bo Jonnson, District 2
Harvey Rarback, District 2
Joaquin Jimenez, District 3
Paul Nagengast, District 3
That the measures voted upon at the election are as follows:

To help the City of Half Moon Bay maintain financial stability and essential services, such as maintaining 911 emergency response times, sheriff patrols, and disaster/emergency preparedness; keeping public places safe, healthy, and clean; reducing traffic congestion; and maintaining youth and recreation programs, shall a measure establishing a half-cent (0.5%) sales tax, providing approximately $2,000,000 annually for general revenue purposes until ended by voters, with annual audits/locally controlled funding, be adopted?
YES
NO
Section 3. That the number of votes given at each precinct and the number of votes given in the city to each of the persons above named for the respective offices for which the persons were candidates were as listed in Exhibit A.
5 Section 4. That the City Council does declare and determine that:

Patric Bo Jonnson was elected as District 2 Member of the City Council for the full term of four years.

Paul Nagengast was elected as District 3 Member of the City Council for the full term of four years.

As a result of the election, a majority of the voters voting on the measure relating to the transactions and use tax ordinance (Measure R) did vote in favor of it, and that the measure was carried, and shall be deemed adopted and ratified. The ordinance, now considered adopted and in effect, is attached to this resolution for reference.

Section 5. That the City Clerk shall enter on the records of the City Council of the City a statement of the result of the election showing: (1) the whole number of votes (ballots) cast in the city; (2) the names of the persons voted for; (3) the measure voted upon; (4) for what office each person was voted for; and (5) the total number of votes given to each person and for and against each measure.

Section 6. That the City Clerk shall immediately make and deliver to each of the persons so elected a Certificate of Election signed by the City Clerk and authenticated; that the City Clerk shall also administer to each person elected the Oath of Office prescribed in the Constitution of the State of California and shall have them subscribe to it and file it in the office of the City Clerk. Each and all of the persons so elected shall then be inducted into the respective office to which they have been elected.

Section 7. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.
***************************************************************** I, the undersigned, hereby certify that the foregoing resolution was duly passed and adopted on the 16th day of December, 2024 by the City Council of Half Moon Bay by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:

ATTEST: APPROVED:
___________________________ _____________________________ Jessica Blair, City Clerk Joaquin Jimenez, Mayor
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1 ORDINANCE NO. 2024-06

AN ORDINANCE OF THE CITY OF HALF MOON BAY IMPOSING A TRANSACTIONS AND USE (SALES) TAX TO BE ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX AND FEE

ADMINISTRATION
The people of the City of Half Moon Bay do ordain as follows:

Section 1. Half Moon Bay Municipal Code Amended
A new Chapter 3.10 – TRANSACTIONS AND USE TAX is hereby added to Title 3 – REVENUE AND FINANCE of the City of Half Moon Bay Municipal Code and replaces the previous Chapter 3.10 Transactions and Use Tax, which was automatically repealed by its own terms. The new chapter is added as follows:

Section 3.10.010 – Title.

This ordinance shall be known as the City of Half Moon Bay Half-Cent Transactions and Use Tax Ordinance. The city of Half Moon Bay hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City.

Section 3.10.020 – Operative Date.
"Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance, the date of such adoption being as set forth below.

Section 3.10.030 – Purpose.

This ordinance is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes:

A. To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2 which authorizes the City to adopt this tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose.

B. To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code.

C. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by 26 2
the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes.

D. To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance.

Section 3.10.040 – Contract with State.

Prior to the operative date, the City shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract.

Section 3.10.050 – Transactions Tax Rate.

For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of one-half of one percent (0.5%) of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance.

Section 3.10.060 – Place of Sale.

For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination.

The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration.

Section 3.10.070 – Use Tax Rate.

An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of one half of one percent (0.5%) of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.

Section 3.10.080 – Adoption of Provisions of State Law. 27 3
Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.

Section 3.10.090 – Limitations on Adoption of State Law and Collection of Use Taxes.

In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:

A. Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor. However, the substitution shall not be made when:

1. The word "State" is used as a part of the title of the State Controller, State Treasurer, State Treasury, or the Constitution of the State of California;

2. The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the California Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this Ordinance.

3. In those sections, including, but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:
a. Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or; b. Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.

4. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code.

B. The word "City" shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 and in the definition of that phrase in Section 6203.

1. “A retailer engaged in business in the District” shall also include any retailer that, in the preceding calendar year or the current calendar year, has total combined sales of tangible personal property in this state or for delivery in the State by the retailer and all persons related to the retailer that exceeds five hundred thousand dollars ($500,000). For purposes of this section, a person is related to another person if both persons are related to each other pursuant to Section 267(b) of Title 26 of the United States Code and the regulations thereunder.

Section 3.10.100 – Permit Not Required.
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If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this ordinance.

Section 3.10.110 – Exemptions and Exclusions.

A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax.

B. There are exempted from the computation of the amount of transactions tax the gross receipts from:

1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.

2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the City shall be satisfied:
a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and
b. With respect to commercial vehicles, by registration to a place of business outof-City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address.

3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.

4. A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance.

5. For the purposes of subparagraphs (3) and (4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. 29 5
C. There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this City of tangible personal property:

1. The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance.

2. Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California.

3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.

4. If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance.

5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.

6. Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer.

7. "A retailer engaged in business in the City" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City.

D. Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax.
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Section 3.10.120 – Amendments.

All amendments subsequent to the effective date of this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this ordinance.

Section 3.10.130 – Enjoining Collection Forbidden.

No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected.

Section 3.10.140 – Severability.

If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.

Section 3.10.150 – Effective Date.

This ordinance relates to the levying and collecting of the City transactions and use taxes and shall take effect immediately.

Section 3.10.160 – Termination Date.

The authority to levy the tax imposed by this ordinance shall extend until ended by the voters.

Section 2. Expenditure of Revenues
The revenues from the transactions and use (sales) tax imposed by this ordinance shall be spent for unrestricted general revenue purposes of the City. Nothing herein shall bind the City to use the proceeds for any specific purpose or function.

Section 3. Amendment
The tax adopted herein may be extended or increased only by a vote of the people of the City of Half Moon Bay in accordance with California Constitution Article XIIIC, Section 2(b).

Section 4. Fiscal Accountability Provisions
The amount generated by this new general purpose revenue source and how it was used shall be included in the annual audit of the city’s financial operations by an independent certified 31 7
public accountant. The results of the audit related to this ordinance shall be reported to the City Council and made publicly available.

Section 5. Publication
The City Clerk is directed to cause this ordinance to be published in a newspaper of general circulation within 15 days after passage in the manner required by Government Code section 36933.
***************************************************************** This ordinance was approved and adopted by a majority vote of the People of the City of Half Moon Bay at the municipal election consolidated with the November 5, 2024, statewide election.

ATTEST: APPROVED:
________________________________ ______________________________ Jessica Blair, City Clerk Joaquin Jimenez, Mayor
32 BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY

AGENDA REPORT
For meeting of: December 16th, 2024
TO: Honorable Mayor and City Council
VIA: Matthew Chidester, City Manager
From: Lisa Rossi, Administrative Services Director
TITLE: WARRANTS FOR THE MONTH OF NOVEMBER 2024
______________________________________________________________________________ RECOMMENDATION:

Accept the warrants list for the month of November 2024.

STRATEGIC ELEMENT:

This recommendation supports the Fiscal Sustainability and Inclusive Governance Elements of the Strategic Plan.

DISCUSSION:

During this month, the City processed 5 check runs. The table below outlines each check run and their individual totals:

Check Run
Date Amount
November 04 29,377
November 07 343,379
November 13 623,002
November 21 718,210
November 27 110,370
Total 1,824,338
The City processed payments related to 11 capital improvement projects, in a total amount of $633,991. These include Pavement Management / Traffic Program, Highway 1 Safety - North, Poplar Complete Street, Carter Park, LCP Implementation Project, Climate Action and Adaptation, Downtown Streetscape Master Plan, Smith Field Site Assessment, HVAC Repair, Green Infrastructure And Storm, Seymour Ditch Erosion And Coast.

Staff is also including a list of all payments above $30,000 processed during this reporting period, as listed in the table below.
33 OVER $30,000
Check
# Payee Check Date Amount Description
55561 EL CENTRO DE LIBERTAD 11/7/2024

38,482 CARES PROGRAM OPERATOR
55562 FLOCK GROUP, INC 11/7/2024

60,900 AUTOMATIC LICENSE PLATE READERS HARDWARE
55570 MERCY HOUSING CALIFORNIA 110, LP 11/7/2024

141,017 MERCY HOUSING 555 KELLY ARPA DRAW #6
55603 QUALITY STRIPING 11/13/2024

39,832 MINOR CONTRACT FOR 2024 STRIPING PROJECT
55607 SEWER AUTHORITY MID-COASTSIDE 11/13/2024

487,872 SAM OPERATIONS & MAINTENANCE FY 24/25
55614 4LEAF INC. 11/21/2024

32,730 ON-CALL BUILDING OFFICIAL SERVICES
55637 HALF MOON BAY GRADING & PAVING INC. 11/21/2024

315,497 CONSTRUCTION FOR POPLAR STREET TRAFFIC CALMING
55638 HIGH POINT ROOFING SERVICES 11/21/2024

68,860 ROOF REPLACEMENT RELATED TO HVAC EMERGENCY
55648 MOORE IACOFANO GOLTSMAN INC 11/21/2024

38,244 MULTI-FAMILY RESIDENTIAL PLANNING SERVICES
55650 PACIFIC GAS & ELECTRIC 11/21/2024

39,334 CITYWIDE GAS & ELECTRICITY
55654 RENAISSANCE ENTREPRENEURSHIP CENTER 11/21/2024

32,223 OCC - SMALL BUSINESS DEVELOPMENT
55656 SCHAPER CONSTRUCTION 11/21/2024

59,988 REPLACEMENT OF TWO HVAC UNITS AT CITY HALL
ATTACHMENTS:

Check Disbursement List by Check Date
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53 BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY

AGENDA REPORT
For meeting of: December 16, 2024
TO: Honorable Mayor and City Council
VIA: Matthew Chidester, City Manager
FROM: Lisa Rossi, Administrative Services Director
Kenneth Stiles, Finance Manager
TITLE: ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR) FOR THE FISCAL YEAR ENDED JUNE 30, 2024
______________________________________________________________________________ RECOMMENDATION:

Adopt a resolution receiving the City of Half Moon Bay Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2024
FISCAL IMPACT:

There is no fiscal impact associated with the adoption of these resolutions.

STRATEGIC ELEMENT:

This recommendation supports the Fiscal Sustainability and Inclusive Governance Elements of the Strategic Plan.

BACKGROUND:

The City of Half Moon Bay annually conducts an independent audit of financial transactions and issues the Annual Comprehensive Financial Report (ACFR). The ACFR Report has been prepared in conformity with the Governmental Accounting and Financial Reporting Standards.

An independent audit was conducted by the auditing firm Maze & Associates (Maze) in conformity with General Accepted Auditing Standards. The City received a clean audit opinion on the financial statements.

The City’s ACFR presents an easily readable and organized report of the City’s financial transactions and provides users of government financial statements with a wide variety of information needed to help them evaluate the financial condition of the City. The final step in preparing these financial statements is to present them to the City Council for acceptance.

The ACFR document (Attachment 2) is composed of the following parts:
• Introductory Section including letter of transmittal
• Independent Auditors’ Report
54 • Management Discussion and Analysis
• Basic City-wide and fund-level financial statements
• Explanatory notes to financial statements and supplemental schedules • Supplementary information
• Statistical section
The transmittal letter included in the ACFR provides information on the City’s profile, financial planning and budgeting, and the local economy.

DISCUSSION:

The General Fund is the City’s primary operating fund. It receives unrestricted revenues and provides general administrative services, law enforcement and animal control services, and land development-related activities such as planning, building, and engineering. The City’s General Fund balance on June 30, 2024, was $14.3 million, of which $11.1 million was committed for reserves and the balance of $3.2 million was unassigned. The fund balance on June 30, 2024, shows a decrease of $1.8 million, or 11%, from the prior year.

The Management Discussion & Analysis (MD&A) section of the ACFR summarizes the financial results for the fiscal year ended June 30, 2024, and provides additional explanations for changes from the prior fiscal year.

The City of Half Moon Bay was the honored recipient of the “Certificate of Achievement for Excellence in Financial Reporting” award presented by the Government Finance Officers Association (GFOA) of the United States and Canada in recognition for the City’s FY 2022-23 ACFR.

The City believes that this year’s ACFR document continues to conform to the highest standards in government accounting and financial reporting requirements and will qualify for another Certificate of Achievement. Following acceptance by the Council, the document will be submitted to the GFOA for consideration for the award this year.

On December 3, 2024, staff presented the ACFR to the City Council as a business item. Staff addressed questions, and no updates were requested. The final ACFR is now submitted for Council approval.

ATTACHMENTS:

1. Annual Comprehensive Financial Report (ACFR) Fiscal Year Ended June 30, 2024

2. Resolution
55 ANNUAL COMPREHENSIVE
FISCAL YEAR ENDED JUNE 30, 2024
56 57

CITY OF HALF MOON BAY, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
Fiscal Year Ended June 30, 2024
Prepared by
Finance Department
58 59

CITY OF HALF MOON BAY, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2024
Table of Contents
Page
INTRODUCTORY SECTION:

Letter of Transmittal ...................................................................................................................................... i GFOA Certificate of Achievement .............................................................................................................. ix City Limits of Half Moon Bay ...................................................................................................................... x City Council ................................................................................................................................................. xi Executive Team .......................................................................................................................................... xii Organizational Chart .................................................................................................................................. xiii FINANCIAL SECTION:

Independent Auditors’ Report ................................................................................................................... 1 Management’s Discussion and Analysis ................................................................................................... 7 Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position ........................................................................................................... 25 Statement of Activities ............................................................................................................... 26 Fund Financial Statements:

Governmental Funds:

Balance Sheet ......................................................................................................................... 28 Reconciliation of the Governmental Funds-Balance Sheet with the Statement of Net Position ................................................................................................... 30 Statement of Revenues, Expenditures and Changes in Fund Balance .................................... 32 Reconciliation of the Net Change in Fund Balances – Total Governmental Funds with the Statement of Activities.......................................................................................... 34 Proprietary Funds:

Statement of Net Position ....................................................................................................... 35 Statement of Revenues, Expenses and Changes in Fund Net Position ................................... 36 Statement of Cash Flows ........................................................................................................ 37 Notes to the Basic Financial Statements ........................................................................................... 39 60 CITY OF HALF MOON BAY, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2024
Table of Contents
Page
FINANCIAL SECTION (Continued):

Required Supplementary Information:

Cost-Sharing Employer-Defined Pension Plan
Schedule of the Plan’s Proportionate Share of the Net Pension Liability and Related Ratios as of the Measurement Date – Miscellaneous Plan ................................. 81 Schedule of Contributions – Miscellaneous Plan ....................................................................... 81 Schedule of the Plan’s Proportionate Share of the Net Pension Liability and Related Ratios as of the Measurement Date – Safety Plan .............................................. 82 Schedule of Contributions – Safety Plan .................................................................................... 82 Other Post-Employment Benefits Plan (OPEB)
Schedule of Changes in the Net OPEB Liability and Related Ration ........................................ 83 Schedule of Employer Contributions ......................................................................................... 84 Schedule of Revenues and Expenditures and Changes in Fund Balance – Budget and Actual:

General Fund .............................................................................................................................. 85 Streets and Roads Special Revenue Fund .................................................................................. 86 Lot Acquisition and Retirement Special Revenue Fund ............................................................ 87 Affordable Housing Special Revenue Fund ............................................................................... 88 Parks Development Special Revenue Fund ............................................................................... 89 Note to Required Supplementary Information .................................................................................. 90 Supplementary Information:

Capital Projects Fund ................................................................................................................. 92 Non-Major Governmental Funds:

Combining Balance Sheet .................................................................................................... 94 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............. 96 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual:

Special Revenue Funds:

Police Grants .................................................................................................................. 98 Storm Drain Operating .................................................................................................. 99 Traffic Mitigation ........................................................................................................ 100 CZI Grant ..................................................................................................................... 101 Opportunity Center Coastside ...................................................................................... 102 61 CITY OF HALF MOON BAY, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2024
Table of Contents
Page
FINANCIAL SECTION (Continued):

Debt Service Fund:

Judgment Obligations Bonds ....................................................................................... 103 Capital Project Funds:

Library ......................................................................................................................... 104 Public Facilities ........................................................................................................... 105 Storm Drain Improvements ......................................................................................... 106 Internal Service Funds:

Combining Statement of Net Position ...................................................................................... 108 Combining Statement of Revenues, Expenses and Changes in Fund Net Position ................. 109 Combining Statement of Cash Flows ....................................................................................... 110 STATISTICAL SECTION:

Financial Trends:

Net Position by Component ............................................................................................................ 115 Changes in Net Position .................................................................................................................. 116 Fund Balances of Governmental Funds .......................................................................................... 118 Changes in Fund Balances of Governmental Funds ....................................................................... 119 Revenue Capacity:

Transient Occupancy Tax (TOT) Rate............................................................................................ 120 Transient Occupancy Tax (TOT) by Lodging Type (BASE) ......................................................... 121 Transient Occupancy Taxpayers by Type of Establishment ........................................................... 122 Debt Capacity:

Ratios of Outstanding Debt by Type .............................................................................................. 123 Ratio of General Bonded Debt Outstanding ................................................................................... 124 Direct and Overlapping Debt .......................................................................................................... 125 Legal Debt Margin Information. ..................................................................................................... 126 Demographic and Economic Information:

Principal Employers. ....................................................................................................................... 127

62 CITY OF HALF MOON BAY, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2024
Table of Contents
Page
STATISTICAL SECTION (Continued):

Operating Information:

Full-Time Equivalent City Employees by Function. ...................................................................... 128 Operating Indicators by Function. .................................................................................................. 129 Capital Asset Statistics by Function. .............................................................................................. 130 Property Tax Information:
2023/24 Use Category Summary .................................................................................................... 131 Property Tax Dollar Breakdown ..................................................................................................... 132 2023/24 Roll Summary ................................................................................................................... 133 Net Taxable Assessed Value History .............................................................................................. 134 Assessed Value of Taxable Property .............................................................................................. 135 2023/24 Top Ten Property Taxpayers ............................................................................................ 136 2014/15 Top Ten Property Taxpayers ............................................................................................ 137 Direct & Overlapping Property Tax Rates ...................................................................................... 138 Demographic and Economic Statistics ........................................................................................... 139 Sales Value History......................................................................................................................... 140 Independent Auditor Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ....................................................................... 141 63 INTRODUCTORY SECTION
64 65
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EĂŵĞĚ^ĂŶĞŶŝƚŽŝŶƚŚĞϭϴϰϬ͛ƐĂŶĚůĂƚĞƌ^ƉĂŶŝƐŚƚŽǁŶ͕,ĂůĨDŽŽŶĂǇƌĞĐĞŝǀĞĚŝƚƐĐƵƌƌĞŶƚŶĂŵĞ ŝŶϭϴϳϰĂŶĚŝƐƚŚĞŽůĚĞƐƚƐĞƚƚůĞŵĞŶƚŝŶ^ĂŶDĂƚĞŽŽƵŶƚǇ͘ŽŶƐŝĚĞƌĞĚĂƌƵƌĂůĐŽĂƐƚĂůĐŽŵŵƵŶŝƚǇ͕ ƚŚĞŝƚǇŝƐŚŽŵĞƚŽĂƉƉƌŽǆŝŵĂƚĞůǇϭϭ͕ϬϬϬƉĞŽƉůĞ͘dŚĞƌĞŝƐĂƌŝĐŚĐƵůƚƵƌĞŽĨĚŝĨĨĞƌĞŶƚƚƌĂĚŝƚŝŽŶƐ ĂŶĚŵƵůƚŝͲŐĞŶĞƌĂƚŝŽŶĂůĨĂŵŝůŝĞƐǁŚŽŚĂǀĞůŝǀĞĚŝŶ,ĂůĨDŽŽŶĂǇĨŽƌǁĞůůŽǀĞƌϭϬϬǇĞĂƌƐ͘/ŶĂŶǇ ŐŝǀĞŶŶĞŝŐŚďŽƌŚŽŽĚǇŽƵǁŝůůĨŝŶĚĨĂƌŵĞƌƐ͕ŚŝŐŚƚĞĐŚĞŶƚƌĞƉƌĞŶĞƵƌƐ͕ĂŶĚĂƌƚŝƐƚƐůŝǀŝŶŐƚŽŐĞƚŚĞƌ͘ƚ ƚŚĞĐƌŽƐƐƌŽĂĚƐŽĨ,ŝŐŚǁĂǇϭĂŶĚ,ŝŐŚǁĂǇϵϮ͕,ĂůĨDŽŽŶĂǇŝƐĂƉƉƌŽǆŝŵĂƚĞůǇϮϱŵŝůĞƐƐŽƵƚŚŽĨ ^ĂŶ&ƌĂŶĐŝƐĐŽĂŶĚĂƚͲŵŽƐƚĂϰϱͲŵŝŶƵƚĞĚƌŝǀĞĨƌŽŵĂůŵŽƐƚĂŶǇǁŚĞƌĞŝŶƚŚĞĂǇƌĞĂ͘ dŚĞŝƚǇĂŶĚŽĂƐƚƐŝĚĞĂƌĞĂƚŚƌŝǀŝŶŐĂŐƌŝĐƵůƚƵƌĂů͕ĨŝƐŚŝŶŐ͕ĂŶĚƚŽƵƌŝƐŵĚĞƐƚŝŶĂƚŝŽŶ͘dŚĞůŽĐĂůĂŶĚ ŐƌŽǁŝŶŐ ŽƌŐĂŶŝĐ ĂŐƌŝĐƵůƚƵƌĂů ĐŽŵŵƵŶŝƚǇ ŚŽƐƚƐ Ă ^ĂƚƵƌĚĂǇ ĨĂƌŵĞƌƐ͛ ŵĂƌŬĞƚ ĂŶĚ ŵĂŶǇ ƌƵƌĂů ƌŽĂĚƐŝĚĞƐƚĂŶĚƐƐĞůůƚŚĞďŽƵŶƚǇŽĨƚŚĞůŽĐĂůĨĂƌŵƐĂŶĚŶƵƌƐĞƌŝĞƐ͘ďŽƵƚϯ͕ϬϬϬƚŽŶƐŽĨƉƵŵƉŬŝŶƐ ĂƌĞŐƌŽǁŶŽŶƚŚĞŽĂƐƚƐŝĚĞĞǀĞƌǇǇĞĂƌĂŶĚƚŚĞƌŝƉĞŶŝŶŐƉƵŵƉŬŝŶƐĂƌĞĨĞĂƚƵƌĞĚŝŶƚŚĞƌƚĂŶĚ WƵŵƉŬŝŶ&ĞƐƚŝǀĂůŚĞůĚĞĂĐŚKĐƚŽďĞƌŽŶƚŚĞĚŽǁŶƚŽǁŶŚŝƐƚŽƌŝĐDĂŝŶ^ƚƌĞĞƚ͘dŚĞĂŶŶƵĂůĨĞƐƚŝǀĂů ĚƌĂǁƐŵŽƌĞƚŚĂŶϮϬϬ͕ϬϬϬǀŝƐŝƚŽƌƐĨŽƌƚŚĞƚǁŽͲĚĂǇĞǀĞŶƚ͘ Ɛ Ă ƉŽƉƵůĂƌ ƚŽƵƌŝƐƚ ĚĞƐƚŝŶĂƚŝŽŶ͕ ,ĂůĨ DŽŽŶ ĂǇ ŽĨĨĞƌƐ Ă ǁŝĚĞ ǀĂƌŝĞƚǇ ŽĨ ƉƵďůŝĐ ĂŶĚ ƉƌŝǀĂƚĞ ĂƚƚƌĂĐƚŝŽŶƐ͘DĂŝŶ^ƚƌĞĞƚŝƐŚŽŵĞƚŽƐŚŽƉƐ͕ĂƌƚŐĂůůĞƌŝĞƐ͕ĂŶĚĨŝŶĞĚŝŶŝŶŐ͘dŚĞŽĂƐƚĂůdƌĂŝůƉƌŽǀŝĚĞƐ ƌĞĐƌĞĂƚŝŽŶĨŽƌďŝŬŝŶŐ͕ƉĞĚĞƐƚƌŝĂŶ͕ĂŶĚĞƋƵĞƐƚƌŝĂŶƵƐĞƌƐ͘'ŽůĨĐĂŶďĞĞŶũŽǇĞĚĂƚƚǁŽĂĐĐůĂŝŵĞĚŐŽůĨ ĐŽƵƌƐĞƐ͘,ĂůĨDŽŽŶĂǇďŽĂƐƚƐƚƌƵůǇƵŶŝƋƵĞůŽĚŐŝŶŐǁŝƚŚďƌĞĂƚŚƚĂŬŝŶŐŽĐĞĂŶǀŝĞǁƐ͕ǁŽƌůĚͲĐůĂƐƐ ŚŽƚĞůƐ͕ĂŶĚƋƵĂŝŶƚĐŽƚƚĂŐĞƐ͕ĂŶĚƚŚĞĞŶĚƵƌŝŶŐŶĂƚƵƌĂůďĞĂƵƚǇŽĨƚŚĞďĞĂĐŚĞƐŝƐĞŶũŽǇĞĚďǇĂůů͘ dŚĞŝƚǇŽĨ,ĂůĨDŽŽŶĂǇǁĂƐŝŶĐŽƌƉŽƌĂƚĞĚŝŶϭϵϱϵĂŶĚŽƉĞƌĂƚĞƐƵŶĚĞƌĂŽƵŶĐŝůͲDĂŶĂŐĞƌĨŽƌŵ ŽĨŐŽǀĞƌŶŵĞŶƚ͘WŽůŝĐǇͲŵĂŬŝŶŐĂŶĚůĞŐŝƐůĂƚŝǀĞĂƵƚŚŽƌŝƚǇĂƌĞǀĞƐƚĞĚŝŶƚŚĞŐŽǀĞƌŶŝŶŐŝƚǇŽƵŶĐŝů͕ ǁŚŝĐŚĐŽŶƐŝƐƚƐŽĨĨŝǀĞŽƵŶĐŝůŵĞŵďĞƌƐƌĞƉƌĞƐĞŶƚŝŶŐĨŝǀĞĚŝƐƚƌŝĐƚƐ͘ŽƵŶĐŝůŵĞŵďĞƌƐĂƌĞĞůĞĐƚĞĚ ƚŽŽǀĞƌůĂƉƉŝŶŐĨŽƵƌͲǇĞĂƌƚĞƌŵƐĂŶĚ͕ĨƌŽŵĂŵŽŶŐƐƚƚŚĞŵƐĞůǀĞƐ͕ƐĞůĞĐƚĂDĂǇŽƌĂŶĚsŝĐĞDĂǇŽƌ ĞĂĐŚ ĞĐĞŵďĞƌ͘ dŚĞ ŽƵŶĐŝů ŝƐ ƌĞƐƉŽŶƐŝďůĞ ĨŽƌ ƉĂƐƐŝŶŐ ŽƌĚŝŶĂŶĐĞƐ͕ ĂĚŽƉƚŝŶŐ ƚŚĞ ďƵĚŐĞƚ͕ ĂƉƉŽŝŶƚŝŶŐ WůĂŶŶŝŶŐ ŽŵŵŝƐƐŝŽŶ ĂŶĚ sŽůƵŶƚĞĞƌ ŽŵŵŝƚƚĞĞ ŵĞŵďĞƌƐ͕ ĂŶĚ ŚŝƌŝŶŐ ƚŚĞ ŝƚǇ DĂŶĂŐĞƌĂŶĚŝƚǇƚƚŽƌŶĞǇ͘dŚĞŝƚǇDĂŶĂŐĞƌŝƐ ƌĞƐƉŽŶƐŝďůĞ ĨŽƌĐĂƌƌǇŝŶŐŽƵƚ ƚŚĞƉŽůŝĐŝĞƐĂŶĚ ŽƌĚŝŶĂŶĐĞƐŽĨƚŚĞŝƚǇŽƵŶĐŝů͕ƉƌŽǀŝĚŝŶŐůĞĂĚĞƌƐŚŝƉƚŽƚŚĞŝƚǇ͛ƐƉƌŽŐƌĂŵƐ͕ŽǀĞƌƐĞĞŝŶŐƚŚĞĚĂǇͲ ƚŽͲĚĂǇŽƉĞƌĂƚŝŽŶƐŽĨƚŚĞŝƚǇ͕ĂŶĚĂƉƉŽŝŶƚŝŶŐŝƚǇƐƚĂĨĨ͘ ǇŵĞĂŶƐŽĨŝƚƐŽǁŶĞŵƉůŽǇĞĞƐĂŶĚƚŚƌŽƵŐŚŽƚŚĞƌƐŚĂƌĞĚŽƌĐŽŶƚƌĂĐƚƐĞƌǀŝĐĞƐ͕ƚŚĞŝƚǇƉƌŽǀŝĚĞƐĂ ǀĂƌŝĞƚǇŽĨŵƵŶŝĐŝƉĂůƐĞƌǀŝĐĞƐŝŶĐůƵĚŝŶŐůĂǁĞŶĨŽƌĐĞŵĞŶƚ͖ůŝďƌĂƌǇ͖ĚŝƐĂƐƚĞƌƉƌĞƉĂƌĞĚŶĞƐƐ͖ƌĞĐƌĞĂƚŝŽŶ ƉƌŽŐƌĂŵƐ͖ ŵĂŝŶƚĞŶĂŶĐĞ ŽĨ ƐƚƌĞĞƚƐ͕ ƉĂƌŬƐ ĂŶĚ ďƵŝůĚŝŶŐƐ͖ ƐĂŶŝƚĂƌǇ ƐĞǁĞƌ ƵƚŝůŝƚǇ ƚƌĞĂƚŵĞŶƚ͕ ĚŝƐƚƌŝďƵƚŝŽŶĂŶĚŵĂŝŶƚĞŶĂŶĐĞ͖ƉůĂŶŶŝŶŐ͕ǌŽŶŝŶŐĂŶĚďƵŝůĚŝŶŐŝŶƐƉĞĐƚŝŽŶ͖ƐƚŽƌŵĚƌĂŝŶŵĂŝŶƚĞŶĂŶĐĞ͖ ĐŽĚĞĂŶĚƉĂƌŬŝŶŐĞŶĨŽƌĐĞŵĞŶƚ͖ĞŶŐŝŶĞĞƌŝŶŐ͖ĂŶĚŐĞŶĞƌĂůĂĚŵŝŶŝƐƚƌĂƚŝǀĞƐĞƌǀŝĐĞƐ͘&ŝƌĞƉƌŽƚĞĐƚŝŽŶ ii
67 ĂŶĚǁĂƚĞƌŝŶĨƌĂƐƚƌƵĐƚƵƌĞƐĞƌǀŝĐĞƐĂƌĞƉƌŽǀŝĚĞĚďǇƐƉĞĐŝĂůĚŝƐƚƌŝĐƚƐ ƚŚĂƚĂƌĞŶŽƚƉĂƌƚŽĨ ƚŚĞŝƚǇ͛Ɛ ƌĞƉŽƌƚŝŶŐĞŶƚŝƚǇ͘
&/EE/>KW
Zd/KE^
h'
dWZK
^^
dŚĞ ĂŶŶƵĂů ďƵĚŐĞƚ ƐĞƌǀĞƐ ĂƐ ƚŚĞ ĨŽƵŶĚĂƚŝŽŶ ĨŽƌ ƚŚĞ ŝƚǇ͛Ɛ ĨŝŶĂŶĐŝĂů ƉůĂŶŶŝŶŐ ĂŶĚ ĐŽŶƚƌŽů ŽĨ ĞǆƉĞŶĚŝƚƵƌĞƐ͘ dŚĞ ŝƚǇ͛Ɛ ďƵĚŐĞƚ ĚŽĐƵŵĞŶƚ ĂůƐŽ ƌĞĨůĞĐƚƐ ƚŚĞ KŶĞͲzĞĂƌ ĂŶĚ &ŝǀĞͲzĞĂƌ ĂƉŝƚĂů /ŵƉƌŽǀĞŵĞŶƚWƌŽŐƌĂŵĂŶĚƚŚĞ&ŝǀĞͲzĞĂƌ&ŽƌĞĐĂƐƚ͘
dŚĞŝƚǇƉƌĞƉĂƌĞƐĂŶĚĂĚŽƉƚƐŝƚƐďƵĚŐĞƚŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚĂůŝĨŽƌŶŝĂ'ŽǀĞƌŶŵĞŶƚ^ĞĐƚŝŽŶƐϮϵϬϬϬ ĂŶĚϮϵϭϰϯ͘dŚĞŽƵŶĐŝůŚŽůĚƐĂƉƵďůŝĐŚĞĂƌŝŶŐŽŶƚŚĞƉƌŽƉŽƐĞĚďƵĚŐĞƚĂŶĚĂĚŽƉƚƐĂĨŝŶĂůďƵĚŐĞƚ ďǇƚŚĞĞŶĚŽĨ:ƵŶĞ͕ƚŚĞĐůŽƐĞŽĨƚŚĞŝƚǇ͛ƐĨŝƐĐĂůǇĞĂƌ͘ ƉƌŽŐƌĂŵďƵĚŐĞƚŝƐƵƐĞĚ ƚŽƉůĂŶ͕ƉƌŝŽƌŝƚŝǌĞ͕ĂŶĚŐƵŝĚĞŵƵŶŝĐŝƉĂůŽƉĞƌĂƚŝŽŶƐ͘dŚĞŝƚǇƵƐĞƐ ƚŚĞ ŵŽĚŝĨŝĞĚĂĐĐƌƵĂůďĂƐŝƐŽĨĂĐĐŽƵŶƚŝŶŐĨŽƌĂůů'ŽǀĞƌŶŵĞŶƚĂů&ƵŶĚƐĂŶĚƚŚĞĂĐĐƌƵĂůďĂƐŝƐŽĨĂĐĐŽƵŶƚŝŶŐ ĨŽƌWƌŽƉƌŝĞƚǇ&ƵŶĚƐĂŶĚ&ŝĚƵĐŝĂƌǇ&ƵŶĚƐ͘ƵĚŐĞƚĂƌǇĐŽŶƚƌŽůƐĞŶƐƵƌĞĐŽŵƉůŝĂŶĐĞǁŝƚŚƚŚĞĂŶŶƵĂů ĂƉƉƌŽƉƌŝĂƚĞĚďƵĚŐĞƚĂƉƉƌŽǀĞĚďǇƚŚĞŝƚǇŽƵŶĐŝů͘dŚĞŝƚǇŽƵŶĐŝůŵĂǇĂŵĞŶĚƚŚĞĂŶŶƵĂůďƵĚŐĞƚ ďǇƌĞƐŽůƵƚŝŽŶ͘dƌĂŶƐĨĞƌƐŽĨĂƉƉƌŽƉƌŝĂƚŝŽŶƐďĞƚǁĞĞŶĚĞƉĂƌƚŵĞŶƚƐŽƌƉƌŽŐƌĂŵƐǁŝƚŚŝŶƚŚĞƐĂŵĞĨƵŶĚ ĐĂŶďĞĂƉƉƌŽǀĞĚĂĚŵŝŶŝƐƚƌĂƚŝǀĞůǇďǇ ƚŚĞŝƚǇDĂŶĂŐĞƌĂŶĚ&ŝŶĂŶĐĞŝƌĞĐƚŽƌ͘dƌĂŶƐĨĞƌƐďĞƚǁĞĞŶ ĨƵŶĚƐƌĞƋƵŝƌĞƚŚĞĂƉƉƌŽǀĂůŽĨƚŚĞŝƚǇŽƵŶĐŝů͘ĐĐŽƌĚŝŶŐůǇ͕ƚŚĞůŽǁĞƐƚůĞǀĞůŽĨďƵĚŐĞƚĂƌǇĐŽŶƚƌŽů ĞƐƚĂďůŝƐŚĞĚďǇƚŚĞŝƚǇŽƵŶĐŝůŝƐĂƚƚŚĞĚĞƉĂƌƚŵĞŶƚůĞǀĞů͘ ƵĚŐĞƚͲƚŽͲĂĐƚƵĂůĐŽŵƉĂƌŝƐŽŶƐĂƌĞƉƌĞƐĞŶƚĞĚŝŶƚŚĞƐƵƉƉůĞŵĞŶƚĂƌǇƐĞĐƚŝŽŶŽĨ ƚŚĞĂĐĐŽŵƉĂŶǇŝŶŐ ĨŝŶĂŶĐŝĂů ƐƚĂƚĞŵĞŶƚƐ ĨŽƌ ĞĂĐŚ ŝŶĚŝǀŝĚƵĂů ŐŽǀĞƌŶŵĞŶƚĂů ĨƵŶĚ ĨŽƌ ǁŚŝĐŚ ĂŶ ĂƉƉƌŽƉƌŝĂƚĞĚ ĂŶŶƵĂů ďƵĚŐĞƚŚĂƐďĞĞŶĂĚŽƉƚĞĚ͘
&/EE/>KEdZK>
dŚĞĚŵŝŶŝƐƚƌĂƚŝǀĞ^ĞƌǀŝĐĞƐĞƉĂƌƚŵĞŶƚŽĨƚŚĞŝƚǇŝƐƌĞƐƉŽŶƐŝďůĞĨŽƌĞƐƚĂďůŝƐŚŝŶŐĂŶĚŵĂŝŶƚĂŝŶŝŶŐ ĂŶĂƉƉƌŽƉƌŝĂƚĞŝŶƚĞƌŶĂůĐŽŶƚƌŽůƐƚƌƵĐƚƵƌĞ͘dŚĞŝŶƚĞƌŶĂůĐŽŶƚƌŽůƐǇƐƚĞŵŝƐĚĞƐŝŐŶĞĚƚŽĞŶƐƵƌĞƚŚĂƚ ƚŚĞ ĂƐƐĞƚƐ ŽĨ ƚŚĞ ŝƚǇ ĂƌĞ ƉƌŽƚĞĐƚĞĚ ĨƌŽŵ ůŽƐƐ͕ ƚŚĞĨƚ͕ Žƌ ŵŝƐƵƐĞ ĂŶĚ ƚŽ ĞŶƐƵƌĞ ƚŚĂƚ ĂĚĞƋƵĂƚĞ ĂĐĐŽƵŶƚŝŶŐĚĂƚĂŝƐĐŽŵƉŝůĞĚƚŽĂůůŽǁĨŽƌƚŚĞƉƌĞƉĂƌĂƚŝŽŶŽĨĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐŝŶĐŽŶĨŽƌŵŝƚǇǁŝƚŚ 'W͘dŚĞŝŶƚĞƌŶĂůĐŽŶƚƌŽůƐƚƌƵĐƚƵƌĞŝƐĚĞƐŝŐŶĞĚƚŽƉƌŽǀŝĚĞƌĞĂƐŽŶĂďůĞ͕ďƵƚŶŽƚĂďƐŽůƵƚĞ͕ĂƐƐƵƌĂŶĐĞ ƚŚĂƚƚŚĞƐĞŽďũĞĐƚŝǀĞƐĂƌĞŵĞƚ͘dŚĞĐŽŶĐĞƉƚŽĨƌĞĂƐŽŶĂďůĞĂƐƐƵƌĂŶĐĞƌĞĐŽŐŶŝǌĞƐƚŚĂƚ͗;ϭͿƚŚĞĐŽƐƚŽĨ ĂĐŽŶƚƌŽůƐŚŽƵůĚŶŽƚĞǆĐĞĞĚƚŚĞďĞŶĞĨŝƚƐůŝŬĞůǇƚŽďĞĚĞƌŝǀĞĚ͖ĂŶĚ ;ϮͿƚŚĞǀĂůƵĂƚŝŽŶŽĨĐŽƐƚƐĂŶĚ ďĞŶĞĨŝƚƐ ƌĞƋƵŝƌĞƐ ĞƐƚŝŵĂƚĞƐ ĂŶĚ ũƵĚŐŵĞŶƚƐ ďǇ ŵĂŶĂŐĞŵĞŶƚ͘ tĞ ďĞůŝĞǀĞ ƚŚĞ ŝƚǇ͛Ɛ ƐǇƐƚĞŵƐ ŽĨ ŝŶƚĞƌŶĂůĂĐĐŽƵŶƚŝŶŐĐŽŶƚƌŽůƐĂĚĞƋƵĂƚĞůǇƐĂĨĞŐƵĂƌĚĂƐƐĞƚƐĂŶĚƉƌŽǀŝĚĞƌĞĂƐŽŶĂďůĞĂƐƐƵƌĂŶĐĞƚŚĂƚ ĨŝŶĂŶĐŝĂůƚƌĂŶƐĂĐƚŝŽŶƐĂƌĞƉƌŽƉĞƌůǇƌĞĐŽƌĚĞĚ͘
dŚĞŝƚǇ͛ƐZĞƐĞƌǀĞWŽůŝĐǇƉĞƌZĞƐŽůƵƚŝŽŶͲϮϬϮϬͲϲϬƐƚĂƚĞƐƚŚĂƚĂƌĞƐĞƌǀĞĞƋƵĂůƚŽϱϬйŽĨ'ĞŶĞƌĂů &ƵŶĚĂŶŶƵĂůŽƉĞƌĂƚŝŶŐĞǆƉĞŶĚŝƚƵƌĞƐŝƐƚŽďĞƐĞƚĂƐŝĚĞƚŽ͗ƌĞĚƵĐĞƚŚĞƌŝƐŬŽĨĨŝŶĂŶĐŝĂůŝŵƉĂĐƚƐĨƌŽŵ ĐĂƚĂƐƚƌŽƉŚŝĐ ĚŝƐĂƐƚĞƌƐ͖ ƌĞƐƉŽŶĚ ƚŽ ƚŚĞ ĐŚĂůůĞŶŐĞƐŽĨ ĐŚĂŶŐŝŶŐĞĐŽŶŽŵŝĐĞŶǀŝƌŽŶŵĞŶƚ͕ ŝŶĐůƵĚŝŶŐ ƉƌŽůŽŶŐĞĚ ĚŽǁŶƚƵƌŶƐ ŝŶ ƚŚĞ ůŽĐĂů͕ ƐƚĂƚĞ͕ ĂŶĚ ŶĂƚŝŽŶĂů ĞĐŽŶŽŵǇ͖ ĂŶĚ ĚĞŵŽŶƐƚƌĂƚĞ ĐŽŶƚŝŶƵĞĚ ƉƌƵĚĞŶƚĨŝƐĐĂůŵĂŶĂŐĞŵĞŶƚĂŶĚĐƌĞĚŝƚǁŽƌƚŚŝŶĞƐƐ͘
iii
68 D:KZ/E/d/d/s
^EKDW>/^,D
Ed^
^ĞǀĞƌĂůŝŵƉŽƌƚĂŶƚŝŶŝƚŝĂƚŝǀĞƐǁĞƌĞĚĞůŝǀĞƌĞĚŝŶƚŚĞƉĂƐƚǇĞĂƌ͘dŚĞƐĞƉƌŽũĞĐƚƐŝŶĐůƵĚĞĚŝŶĐƌĞĂƐĞĚ ĞŶŐĂŐĞŵĞŶƚǁŝƚŚƚŚĞĐŽŵŵƵŶŝƚǇ͕ĐŽŶƚŝŶƵĞĚǁŽƌŬŽŶĂĨĨŽƌĚĂďůĞŚŽƵƐŝŶŐ͕ĂŶĚŝŵƉƌŽǀĞŵĞŶƚŽĨ ŝŶĨƌĂƐƚƌƵĐƚƵƌĞ͘ĐĐŽŵƉůŝƐŚŵĞŶƚƐŝŶĐůƵĚĞ͗
ϭ͘ ŝƚǇKƉĞƌĂƚŝŽŶƐ͗
x EĞŐŽƚŝĂƚĞĚĂDĞŵŽƌĂŶĚƵŵŽĨhŶĚĞƌƐƚĂŶĚŝŶŐ;DKhͿǁŝƚŚ^ĂŶDĂƚĞŽŽƵŶƚǇ͕ŚĞůƉĞĚ ƚŽ ƐĞĐƵƌĞ ĂŶ
ŵĞƌŐĞŶĐǇ ŽĂƐƚĂů ĞǀĞůŽƉŵĞŶƚ WĞƌŵŝƚ ;WͿ͕ ĂŶĚ ĨĂĐŝůŝƚĂƚĞĚ ĐŽŵŵĞŶĐĞŵĞŶƚ ŽĨ ĐŽŶƐƚƌƵĐƚŝŽŶ ŽĨ ϰϳ ĂĨĨŽƌĚĂďůĞ ŵĂŶƵĨĂĐƚƵƌĞĚ ŚŽŵĞƐ ĨŽƌ ĨĂƌŵǁŽƌŬĞƌƐĂƚƚŚĞŶĞǁ^ƚŽŶĞWŝŶĞŽǀĞŶĞŝŐŚďŽƌŚŽŽĚ͘
x >ĂƵŶĐŚĞĚ ƚŚĞ KƉƉŽƌƚƵŶŝƚǇ ĞŶƚĞƌ ŽĨ ƚŚĞ ŽĂƐƚƐŝĚĞ ƚŽ ƐƵƉƉŽƌƚ ƐŵĂůů ďƵƐŝŶĞƐƐĞƐ͕ ĞŶƚƌĞƉƌĞŶĞƵƌƐ͕ ũŽď ƐĞĞŬĞƌƐ͕ ĂŶĚ ũŽď ŐƌŽǁƚŚ͖ ůĂƵŶĐŚĞĚ Ă ŶĞǁ ďƵƐŝŶĞƐƐ ŝŶĐƵďĂƚŽƌ͕ ŽĂƐƚƐŝĚĞsĞŶƚƵƌĞ^ƚƵĚŝŽ͕ǁŝƚŚĂĨŽĐƵƐŽŶƌĞƐŝůŝĞŶĐǇƚĞĐŚ͘ x ŽŵƉůĞƚĞĚĂŽǁŶƚŽǁŶ^ƚƌĞĞƚƐĐĂƉĞDĂƐƚĞƌWůĂŶǁŚŝĐŚǁŝůůƐĞƌǀĞĂƐĂƌŽĂĚŵĂƉĨŽƌ ĚŽǁŶƚŽǁŶƌĞǀŝƚĂůŝǌĂƚŝŽŶĞĨĨŽƌƚƐĂŶĚĂƐƐŝƐƚŝŶĂƉƉůǇŝŶŐĨŽƌĨƵŶĚŝŶŐ͘ x ŽŵƉůĞƚĞĚ ƚŚĞ ƐĞĐŽŶĚ WƵďůŝĐ ZĞǀŝĞǁ ƌĂĨƚ ŽĨ ƚŚĞ ǇĐůĞ ϲ ,ŽƵƐŝŶŐ ůĞŵĞŶƚ͖
ĐĞƌƚŝĨŝĐĂƚŝŽŶĨƌŽŵƚŚĞĂůŝĨŽƌŶŝĂĞƉĂƌƚŵĞŶƚŽĨ,ŽƵƐŝŶŐĂŶĚŽŵŵƵŶŝƚǇĞǀĞůŽƉŵĞŶƚ ;,ͿŝƐĞǆƉĞĐƚĞĚĨĂůůŽĨϮϬϮϰ͘
x ŽŶǀĞŶĞĚ Ă ŶĞǁ &ĂƌŵǁŽƌŬĞƌ DĞŵŽƌŝĂů ĂŶĚ ZĞŵĞŵďƌĂŶĐĞ ĚǀŝƐŽƌǇ ŽŵŵŝƚƚĞĞ ;&DZͿĂŶĚŚĞůĚĂŽŶĞͲǇĞĂƌ ƌĞŵĞŵďƌĂŶĐĞĐĞƌĞŵŽŶǇ ƚŽĐĞůĞďƌĂƚĞ ƚŚĞƐĞǀĞŶůŝǀĞƐ ůŽƐƚĨƌŽŵƚŚĞ:ĂŶƵĂƌǇϮϬϮϯŵĂƐƐƐŚŽŽƚŝŶŐ͘ƚƚĞŶĚĞĚďǇϮϱϬнĐŽŵŵƵŶŝƚǇŵĞŵďĞƌƐ͘ x ^ĞĐƵƌĞĚ Ψϳϴϱ͕ϬϬϬ ŝŶ ƉƌŝǀĂƚĞ͕ ƉƵďůŝĐ͕ ĂŶĚ ƉŚŝůĂŶƚŚƌŽƉŝĐ ĚŽŶĂƚŝŽŶƐ ĨŽƌ ƐŚŽƌƚͲƚĞƌŵ ŚŽƵƐŝŶŐĨŽƌĨŽƌƚǇŝŶĚŝǀŝĚƵĂůƐĚŝƐƉůĂĐĞĚĨƌŽŵƚŚĞ:ĂŶƵĂƌǇϮϬϮϯŵĂƐƐƐŚŽŽƚŝŶŐ͘ x ,ŽƐƚĞĚĂŚŝƐƚŽƌŝĐǀŝƐŝƚŽĨƚŚĞDĞǆŝĐĂŶŽŶƐƵůĂƚĞƚŚĂƚƐĞƌǀĞĚϮϬϬŽĂƐƚƐŝĚĞƌĞƐŝĚĞŶƚƐͬ DĞǆŝĐĂŶEĂƚŝŽŶĂůƐ͘
x ŽŵƉůĞƚĞĚ ǁŽƌŬ ŽŶ ŶĞǁ ZĞŶƚĂů ZĞŐŝƐƚƌǇ WƌŽŐƌĂŵ͕ ZĞŶƚ ^ƚĂďŝůŝǌĂƚŝŽŶ WƌŽŐƌĂŵ͕ĂŶĚ ĞŶŚĂŶĐĞĚdĞŶĂŶƚWƌŽƚĞĐƚŝŽŶƐƉƌŽǀŝƐŝŽŶƐ͘
x WůĂŶŶĞĚĂŶĚĞǆĞĐƵƚĞĚƚŚĞĨŽƵƌƚŚĂŶŶƵĂů^ƵŵŵĞƌ͛Ɛ
ŶĚDƵƐŝĐ&ĞƐƚŝǀĂů
ǀĞŶƚ͘
x ŽŶƚŝŶƵĞĚƚŽƐƵƉƉŽƌƚƚŚĞDĂŬĞ/ƚDĂŝŶ^ƚƌĞĞƚĨŝƌƐƚdŚƵƌƐĚĂǇĞǀĞŶƚƐŝŶĚŽǁŶƚŽǁŶ,ĂůĨ DŽŽŶĂǇ͕ďƌŝŶŐŝŶŐŽĂƐƚƐŝĚĞĂƌƚŝƐƚƐ͕ĐƌĞĂƚŽƌƐ͕ĂŶĚŵĂŬĞƌƐƚŽŐĞƚŚĞƌǁŝƚŚŶŽŶͲƉƌŽĨŝƚƐ ĂŶĚ ĐŽŵŵƵŶŝƚǇ ƚŽ ĐŽŶŶĞĐƚ͕ ĞǆĐŚĂŶŐĞ͕ ĂŶĚ ƐŚĂƌĞ ǁŚŝůĞ ƐƚŝŵƵůĂƚŝŶŐ ƚŚĞ ĚŽǁŶƚŽǁŶ ĞĐŽŶŽŵǇŽŶĂŵŽŶƚŚůǇďĂƐŝƐĨƌŽŵ^ƉƌŝŶŐƚŚƌŽƵŐŚ&ĂůůŽĨĞĂĐŚǇĞĂƌ͘ x /ŵƉůĞŵĞŶƚĞĚƚŚĞ^ŚŽƌƚͲdĞƌŵZĞŶƚĂůĂŶĚ,ŽŵĞKĐĐƵƉĂƚŝŽŶKƌĚŝŶĂŶĐĞĨŽůůŽǁŝŶŐƚŚĞ :ƵŶĞϮϬϮϯŝƚǇŽƵŶĐŝůĂĚŽƉƚŝŽŶ͘
x ŽŵƉůĞƚĞĚŶƵŵĞƌŽƵƐďƵŝůĚŝŶŐƉĞƌŵŝƚŝŶƐƉĞĐƚŝŽŶƐƚŽŚĞůƉĨĂĐŝůŝƚĂƚĞƚŚĞDĂŝŶĂŶĚ<ĞůůǇ DŝǆĞĚͲhƐĞWƌŽũĞĐƚĐƵƌƌĞŶƚůǇƵŶĚĞƌĐŽŶƐƚƌƵĐƚŝŽŶǁŝƚŚĞǆƉĞĐƚĞĚĐŽŵƉůĞƚŝŽŶĨĂůůϮϬϮϰ͘ x ŽŶĚƵĐƚĞĚďŽƚŚƚŚĞE͘
͘dĂŶĚ&>ĐŝǀŝĐƐĂŶĚůĞĂĚĞƌƐŚŝƉĂĐĂĚĞŵŝĞƐĨŽƌĂĚƵůƚƐĂŶĚ ǇŽƵƚŚ͘
x ZĞĐĞŝǀĞĚ ŝƐƚŝŶŐƵŝƐŚĞĚ ƵĚŐĞƚ WƌĞƐĞŶƚĂƚŝŽŶ ǁĂƌĚ ĨƌŽŵ ƚŚĞ 'ŽǀĞƌŶŵĞŶƚ &ŝŶĂŶĐĞ KĨĨŝĐĞƌƐ ƐƐŽĐŝĂƚŝŽŶ ;'&KͿ ĨŽƌ ƚŚĞ &z ϮϮͲϮϯ KƉĞƌĂƚŝŶŐ ĂŶĚ ĂƉŝƚĂů ƵĚŐĞƚ ĚŽĐƵŵĞŶƚƐ͕ƌĞƉƌĞƐĞŶƚŝŶŐĐŽŵƉůŝĂŶĐĞǁŝƚŚďĞƐƚƉƌĂĐƚŝĐĞƐŝŶďƵĚŐĞƚŝŶŐ͘ x ZĞŵŽĚĞůĞĚDĂĐƵƚƌĂZĞƐƚƌŽŽŵƐ͘
x /ŵƉůĞŵĞŶƚĞĚƚŚĞŽƵŶƚǇ͛ƐĨŝƌƐƚĚŝƐƉŽƐĂďůĞĨŽŽĚǁĂƌĞŽƌĚŝŶĂŶĐĞ͘ iv
69 x ,ŽƐƚĞĚƚǁŽĐŽŵŵƵŶŝƚǇƌĞĐǇĐůŝŶŐĚĂǇƐŽĨĨĞƌŝŶŐĨƌĞĞƉĂƉĞƌƐŚƌĞĚĚŝŶŐ͕ĐŽŵƉŽƐƚƉŝĐŬͲ ƵƉ͕ĂŶĚĞͲǁĂƐƚĞƌĞĐǇĐůŝŶŐ͘
x ĚŽƉƚĞĚ ƚŚĞ ŝƚǇ͛Ɛ &ĂƚƐ͕ KŝůƐ͕ ĂŶĚ 'ƌĞĂƐĞ ;&K'Ϳ ŽƌĚŝŶĂŶĐĞ ĂŶĚ ŝŵƉůĞŵĞŶƚĞĚ ƚŚĞ ŝŶĂƵŐƵƌĂůƉƌŽŐƌĂŵ͘
x WŝůŽƚĞĚƚŚĞƵƐĞŽĨƵƚŽŵĂƚĞĚ>ŝĐĞŶƐĞWůĂƚĞZĞĂĚĞƌ;>WZͿƚĞĐŚŶŽůŽŐǇŝŶƚŚĞWŝůĂƌĐŝƚŽƐ ;KĂŬ ǀĞŶƵĞ WĂƌŬͿ ŶĞŝŐŚďŽƌŚŽŽĚ ŝŶ ƌĞƐƉŽŶƐĞ ƚŽ ĐŽŵŵƵŶŝƚǇ ƌĞƋƵĞƐƚƐ ĨŽůůŽǁŝŶŐ ƐĞǀĞƌĂůŚŝŐŚͲƉƌŽĨŝůĞĐƌŝŵĞƐ͘
x /ŶŝƚŝĂƚĞĚ DŽƵŶƚĞĚ WĂƚƌŽů ĂŶĚ ĂĚĚŝƚŝŽŶĂů ^ŚĞƌŝĨĨ ďĞĂĐŚ ƉĂƚƌŽůƐ ŽŶ WŽƉůĂƌ ĞĂĐŚ ƚŽ ĞŶĨŽƌĐĞĚŽŐƐŽŶůĞĂƐŚĞǀĞƌǇǁĞĞŬĞŶĚĚĂǇƚŝŵĞĨŽƌƚŚĞǁŚŽůĞƐƵŵŵĞƌ͘ Ϯ͘ DĂũŽƌĂƉŝƚĂůWƌŽũĞĐƚƐŝŶWƌŽŐƌĞƐƐ͗
x ĂƌƚĞƌWĂƌŬ
x ,ŝŐŚǁĂǇϭ^ĂĨĞƚǇʹEŽƌƚŚ
x WŽƉůĂƌ^ƚƌĞĞƚdƌĂĨĨŝĐĂůŵŝŶŐĂŶĚ^ĂĨĞƚǇWƌŽũĞĐƚʹWŚĂƐĞϭ x
ĂƐƚƐŝĚĞWĂƌĂůůĞůdƌĂŝůEŽƌƚŚʹ^ĞŐŵĞŶƚϰ
x WŝůĂƌĐŝƚŽƐƌĞĞŬZĞƐƚŽƌĂƚŝŽŶĂŶĚZĞŵĞĚŝĂƚŝŽŶWƌŽũĞĐƚ DƵĐŚŽĨƚŚĞǁŽƌŬĨŽĐƵƐĞƐŽŶĞŶŚĂŶĐŝŶŐĂŶĚŝŵƉƌŽǀŝŶŐŝŶĨƌĂƐƚƌƵĐƚƵƌĞ͕ĂƐǁĞůůĂƐĐƌĞĂƚŝŶŐ ƉƌŽĐĞƐƐĞƐĂŶĚŽƌŐĂŶŝǌĂƚŝŽŶĂůŝŵƉƌŽǀĞŵĞŶƚƐǁŚŝĐŚĂůůŽǁ^ƚĂĨĨƚŽďĞƚƚĞƌĐĂƌƌǇŽƵƚƚŚĞŝƌĐŽƌĞ ĨƵŶĐƚŝŽŶƐŝŶƐĞƌǀŝŶŐƚŚĞƉƵďůŝĐ͘dŚĞϮϬϮϯͲϮϰƚŚƌŽƵŐŚϮϬϮϳͲϮϴ&ŝǀĞͲzĞĂƌĂƉŝƚĂů/ŵƉƌŽǀĞŵĞŶƚ WƌŽŐƌĂŵ;/WͿƉƌŽǀŝĚĞƐŝŶĚĞƉƚŚƉƌŽũĞĐƚͲďǇͲƉƌŽũĞĐƚŝŶĨŽƌŵĂƚŝŽŶĂŶĚŚŽǁŝƚĂůŝŐŶƐǁŝƚŚƚŚĞŝƚǇ͛Ɛ ^ƚƌĂƚĞŐŝĐWůĂŶ͘
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dŚĞŝŶĨŽƌŵĂƚŝŽŶŝŶ ƚŚĞ ĨŝŶĂŶĐŝĂů ƐƚĂƚĞŵĞŶƚƐŝƐ ďĞƐƚ ƵŶĚĞƌƐƚŽŽĚǁŝƚŚŝŶ ƚŚĞ ĐŽŶƚĞǆƚ ŽĨ ƚŚĞ ŝƚǇ͛Ɛ ŽƉĞƌĂƚŝŶŐ ĞŶǀŝƌŽŶŵĞŶƚ͘ ƵƌŝŶŐ &ŝƐĐĂů zĞĂƌ ϮϬϮϯͲϮϰ͕ ƚŚĞ ŝƚǇ ĨĂĐĞĚ Ă ƐŚŽƌƚĨĂůů ŝŶ ĞĐŽŶŽŵŝĐĂůůǇ ƐĞŶƐŝƚŝǀĞƌĞǀĞŶƵĞƐ͕ŝŶĐůƵĚŝŶŐdƌĂŶƐŝĞŶƚKĐĐƵƉĂŶĐǇdĂǆĂŶĚ^ĂůĞƐdĂǆ͘tŚŝůĞĨƵůůǇĨƵŶĚĞĚƌĞƐĞƌǀĞƐ ŽĨĨĞƌ ƚĞŵƉŽƌĂƌǇ ƐƚĂďŝůŝƚǇ͕ ƚŚĞ ŝƚǇ ĂŶƚŝĐŝƉĂƚĞƐ Ă ƐƚƌƵĐƚƵƌĂů ĚĞĨŝĐŝƚ ŝŶ ĨƵƚƵƌĞ ĨŝƐĐĂů ǇĞĂƌƐ͕ ĂƐ ĞǆƉĞŶĚŝƚƵƌĞƐĐƵƌƌĞŶƚůǇĞǆĐĞĞĚƌĞǀĞŶƵĞƐ͘
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ŵƉůŽǇŵĞŶƚŝŶ,ĂůĨDŽŽŶĂǇŝƐĐŽŶĐĞŶƚƌĂƚĞĚŝŶƚŚƌĞĞŵĂũŽƌƐĞĐƚŽƌƐ͗ƉƌŽĨĞƐƐŝŽŶĂůƐĞƌǀŝĐĞƐ͖ĨĂƌŵ ĂŶĚĂŐƌŝĐƵůƚƵƌĞ͖ĂŶĚƌĞƚĂŝůͬĨŽŽĚƐĞƌǀŝĐĞƐ͘dŚĞϮϬϮϯĂǀĞƌĂŐĞƵŶĞŵƉůŽǇŵĞŶƚƌĂƚĞĨŽƌĂůŝĨŽƌŶŝĂǁĂƐ ϰ͘ϴй͕^ĂŶDĂƚĞŽŽƵŶƚǇǁĂƐϯй͕ĂŶĚ,ĂůĨDŽŽŶĂǇǁĂƐϭ͘Ϯй͘ƵĞƚŽƚŚĞKs/ͲϭϵƉĂŶĚĞŵŝĐ͕ ƚŚĞƵŶĞŵƉůŽǇŵĞŶƚƌĂƚĞƉĞĂŬĞĚĂƐŚŝŐŚĂƐϭϭ͘ϰйĨŽƌ^ĂŶDĂƚĞŽŽƵŶƚǇĚƵƌŝŶŐƚŚĞŵŽŶƚŚŽĨƉƌŝů ϮϬϮϬ͘^ŝŶĐĞƚŚĞŶ͕ƚŚĞƵŶĞŵƉůŽǇŵĞŶƚƌĂƚĞŚĂƐĚĞĐƌĞĂƐĞĚƚŽƉƌĞͲƉĂŶĚĞŵŝĐůĞǀĞůƐŽĨϭ͘ϲйĨŽƌ,ĂůĨ DŽŽŶĂǇ͘
ƐŝŐŶŝĨŝĐĂŶƚĚƌŝǀĞƌŽĨƚŚĞĞĐŽŶŽŵǇŚĂƐĐŽŶƚŝŶƵĞĚƚŽďĞƚŚĞůŽĐĂůƌĞĂůĞƐƚĂƚĞŵĂƌŬĞƚ͕ǁŚŝĐŚƐĂǁ ĂŶŽƚŚĞƌǇĞĂƌͲŽǀĞƌͲǇĞĂƌŝŶĐƌĞĂƐĞŝŶĂƐƐĞƐƐĞĚǀĂůƵĞ͘,ĂůĨDŽŽŶĂǇ͛ƐƚŽƚĂůĂƐƐĞƐƐĞĚǀĂůƵĞĨŽƌϮϬϮϯͲ ϮϰŝƐΨϯ͘ϵďŝůůŝŽŶ͕ǁŚŝĐŚŝƐĂϰ͘ϵйŝŶĐƌĞĂƐĞŽǀĞƌϮϬϮϯͲϮϰ͘ůƚŚŽƵŐŚŚŽƵƐŝŶŐƉƌŝĐĞƐĐŽŶƚŝŶƵĞ ƚŽ ƌĞŵĂŝŶƐƚƌŽŶŐ͕ƚŚĞĞĐŽŶŽŵǇĂƉƉĞĂƌƐƚŽďĞƐƚĂŐŶĂƚŝŶŐ͘
v
70 dŚĞŝƚǇĨĂĐĞƐƚǁŽŵĂũŽƌĐŚĂůůĞŶŐĞƐ͗ŚĞĂǀǇƌĞůŝĂŶĐĞŽŶdƌĂŶƐŝĞŶƚKĐĐƵƉĂŶĐǇdĂǆ;dKdͿƌĞǀĞŶƵĞƐ ĂŶĚ ƌŝƐŝŶŐ ĐŽƐƚƐ ŽĨ ĞǆŝƐƚŝŶŐ ƐĞƌǀŝĐĞƐ͘ &Žƌ ƚŚĞ ĨŝƐĐĂů ǇĞĂƌ ĞŶĚŝŶŐ :ƵŶĞ ϯϬ͕ ϮϬϮϰ͕ dKd ƌĞǀĞŶƵĞƐ ĂĐĐŽƵŶƚĞĚĨŽƌϰϬйŽĨĂůů'ĞŶĞƌĂů&ƵŶĚƌĞǀĞŶƵĞƐ͘tŚŝůĞdKdŝƐƚŚĞŝƚǇΖƐůĂƌŐĞƐƚƌĞǀĞŶƵĞƐŽƵƌĐĞ͕ŝƚ ŝƐĂůƐŽŚŝŐŚůǇǀƵůŶĞƌĂďůĞĚƵƌŝŶŐĚŽǁŶƚƵƌŶƐŝŶƚŽƵƌŝƐŵ͕ĂƐƐŚŽǁŶďǇĂŶϴйǇĞĂƌͲŽǀĞƌͲǇĞĂƌĚĞĐůŝŶĞ͘ dŚĞŝƚǇĂůƐŽƐĂǁĂƐŚĂƌƉŝŶĐƌĞĂƐĞŝŶĐŽƐƚƐĨŽƌĞǆŝƐƚŝŶŐƐĞƌǀŝĐĞƐ͕ƌĞƐƵůƚŝŶŐŝŶĞǆƉĞŶĚŝƚƵƌĞƐƐƵƌƉĂƐƐŝŶŐ ƌĞǀĞŶƵĞƐĂŶĚĐƌĞĂƚŝŶŐĂƐƚƌƵĐƚƵƌĂůĚĞĨŝĐŝƚ͘KŶŐŽŝŶŐŽƉĞƌĂƚŝŶŐĐŽƐƚƐƌŽƐĞďǇΨϮ͘ϳŵŝůůŝŽŶ͕Žƌϭϰй͕ ƉƌŝŵĂƌŝůǇĚƵĞ ƚŽƉƵďůŝĐ ƐĂĨĞƚǇĂŶĚůĞŐĂůĞǆƉĞŶƐĞƐ͘ŽŶƐĞƋƵĞŶƚůǇ͕ ƚŚĞ ŝƚǇĂŶƚŝĐŝƉĂƚĞƐĐŽŶƚŝŶƵĞĚ ĚĞĨŝĐŝƚƐŝŶĨƵƚƵƌĞǇĞĂƌƐĂŶĚŝƐĂĐƚŝǀĞůǇůŽŽŬŝŶŐƚŽďŽƚŚĐŽƐƚͲĐŽŶƚĂŝŶŵĞŶƚĂŶĚƌĞǀĞŶƵĞͲĞŶŚĂŶĐĞŵĞŶƚ ƐƚƌĂƚĞŐŝĞƐ͘

ǆŝƐƚŝŶŐ ŽďůŝŐĂƚŝŽŶƐ ƚŚĂƚ ĂƌĞ Ɛƚŝůů ůŝŬĞůǇ ƚŽ ŝŶĐƌĞĂƐĞ ŝŶ ĨƵƚƵƌĞ ǇĞĂƌƐ ŝŶĐůƵĚĞ ƉƵďůŝĐ ƐĂĨĞƚǇ͕ ƐĞǁĞƌ ƚƌĞĂƚŵĞŶƚ͕ ĂŶĚ ƉĞŶƐŝŽŶ ĐŽƐƚƐ͘ dŚĞƐĞ ĐŽƐƚƐ ĐŽƵƉůĞĚ ǁŝƚŚ ŝŶĐƌĞĂƐĞĚ ĚĞŵĂŶĚ ĨŽƌ ĞƐƐĞŶƚŝĂů ŝƚǇ ƐĞƌǀŝĐĞƐĂŶĚĞŶŚĂŶĐĞĚŝŶĨƌĂƐƚƌƵĐƚƵƌĞŝŶǀĞƐƚŵĞŶƚ͕ƚŽŵĂŝŶƚĂŝŶĂŶĚĞŶŚĂŶĐĞŝƚǇĂƐƐĞƚƐ͕ǁŝůůƐƚƌĂŝŶ ŝƚǇĨŝŶĂŶĐĞƐ͘^ƚĂĨĨǁŝůůĐŽŶƚŝŶƵĞƚŽŵŽŶŝƚŽƌƚŚĞƐĞĐŽŶĚŝƚŝŽŶƐŵŽǀŝŶŐĨŽƌǁĂƌĚ͕ĂŶĚŵĂŬĞďƵĚŐĞƚĂƌǇ ĂĚũƵƐƚŵĞŶƚƐĂƐŶĞĐĞƐƐĂƌǇ͕ƚŽĞŶƐƵƌĞƚŚĞŝƚǇĐĂŶƐƵƐƚĂŝŶůŽŶŐͲƚĞƌŵĨŝŶĂŶĐŝĂůŚĞĂůƚŚ͘ >ŽŶŐͲdĞƌŵ&ŝŶĂŶĐŝĂůWůĂŶŶŝŶŐ
dŚĞŝƚǇ͛ƐůŽŶŐͲƚĞƌŵĨŝŶĂŶĐŝĂůƉůĂŶƌĞŵĂŝŶƐĨŽĐƵƐĞĚŽŶĐŽƐƚĐŽŶƚĂŝŶŵĞŶƚ͕ĐŽƐƚƌĞĐŽǀĞƌǇ͕ƌĞǀĞŶƵĞ ĞŶŚĂŶĐĞŵĞŶƚƐ͕ĂŶĚŵĂŝŶƚĂŝŶŝŶŐĂĚĞƋƵĂƚĞƌĞƐĞƌǀĞƐƚŽƐĞĐƵƌĞŝƚƐĨŝŶĂŶĐŝĂůŚĞĂůƚŚ͘dŚĞƐĞƉƌŽĂĐƚŝǀĞ ŵĞĂƐƵƌĞƐ ƌĞĨůĞĐƚ ƚŚĞ ŝƚǇ͛Ɛ ĐŽŵŵŝƚŵĞŶƚ ƚŽ ƌĞƐƉŽŶƐŝďůĞ ĨŝŶĂŶĐŝĂůŵĂŶĂŐĞŵĞŶƚ͘tŚŝůĞ ƚŚĞ ŝƚǇ ĨĂĐĞƐ Ă ƐƚƌƵĐƚƵƌĂů ĚĞĨŝĐŝƚ͕ ƚŚĞƐĞ ƐƚƌĂƚĞŐŝĞƐ ĂƌĞ ĚĞƐŝŐŶĞĚ ƚŽ ŐƵŝĚĞ ƚŚĞ ŝƚǇ ƚŽǁĂƌĚ ĂĐŚŝĞǀŝŶŐ ƐƵƐƚĂŝŶĂďůĞĨŝƐĐĂůďĂůĂŶĐĞ͘
/Ŷ ĚĞǀĞůŽƉŝŶŐ ƚŚĞ ĨŝƐĐĂů ǇĞĂƌ ϮϬϮϰͲϮϱ ďƵĚŐĞƚ͕ ƚŚĞ ŝƚǇ ƌĞǀŝĞǁĞĚ Ăůů ďƵĚŐĞƚ ŝƚĞŵƐ ƚŽ ƌĞĚƵĐĞ ĞǆƉĞŶƐĞƐǁŚĞƌĞǀĞƌƉŽƐƐŝďůĞ͘ŽƐƚĐŽŶƚĂŝŶŵĞŶƚĞĨĨŽƌƚƐŝŶĐůƵĚĞĚĞŶĚŝŶŐĂůĞĂƐĞĚŽĨĨŝĐĞĂŐƌĞĞŵĞŶƚ ĂŶĚĐŽŶƐŽůŝĚĂƚŝŶŐƐƚĂĨĨĂƚŝƚǇ,Ăůů͕ŚŽůĚŝŶŐǀĂĐĂƚĞĚƉŽƐŝƚŝŽŶƐŽƉĞŶƚŽƌĞĂƐƐĞƐƐƐƚĂĨĨŝŶŐŶĞĞĚƐ͕ĂŶĚ ĂŶŽǀĞƌĂůůƌĞĚƵĐƚŝŽŶŝŶĚŝƐĐƌĞƚŝŽŶĂƌǇƐƉĞŶĚŝŶŐ͘dŚĞƐĞƌĞĚƵĐƚŝŽŶƐǁĞƌĞĚĞƐŝŐŶĞĚƚŽĂĚĚƌĞƐƐƚŚĞ ĚĞĨŝĐŝƚǁŚŝůĞƉƌĞƐĞƌǀŝŶŐĞƐƐĞŶƚŝĂůƐĞƌǀŝĐĞƐ͘
dŽĂĚĚƌĞƐƐƌŝƐŝŶŐĐŽƐƚƐĂŶĚƵƐĞŽĨƌĞƐĞƌǀĞƐ͕ǀŽƚĞƌƐƉĂƐƐĞĚDĞĂƐƵƌĞZŝŶEŽǀĞŵďĞƌϮϬϮϰ͘dŚŝƐ ŵĞĂƐƵƌĞǁŝůůŝŶĐƌĞĂƐĞƚŚĞƐĂůĞƐƚĂǆƌĂƚĞďǇϬ͘ϱϬйƚŽĂƚŽƚĂůŽĨϵ͘ϴϳϱй͕ĞĨĨĞĐƚŝǀĞƉƌŝůϭ͕ϮϬϮϱ͘dŚĞ ŝƚǇ ĞǆƉĞĐƚƐ ƚŚŝƐ ĐŚĂŶŐĞ ƚŽ ŐĞŶĞƌĂƚĞ ĂƉƉƌŽǆŝŵĂƚĞůǇ ΨϮ ŵŝůůŝŽŶ ŝŶ ŐĞŶĞƌĂů ĨƵŶĚ ƌĞǀĞŶƵĞ͕ ƐƵƉƉŽƌƚŝŶŐ ƚŚĞ ĐŽŶƚŝŶƵĂƚŝŽŶ ŽĨ ĐƵƌƌĞŶƚ ƐĞƌǀŝĐĞƐ͘ ĚĚŝƚŝŽŶĂůůǇ͕ ƚŚĞ ŝƚǇ ŝƐ ĐŽŶĚƵĐƚŝŶŐ Ă ŽƐƚ ůůŽĐĂƚŝŽŶ ĂŶĚ &ĞĞ ^ƚƵĚǇ ƚŽ ŝĚĞŶƚŝĨǇ ƚŚĞ ƚƌƵĞ ĐŽƐƚ ŽĨ ƐĞƌǀŝĐĞƐ ƉƌŽǀŝĚĞĚ ĂŶĚ ĂůŝŐŶ ĨĞĞƐ ǁŝƚŚ ŽƵŶĐŝů͛ƐĐŽƐƚƌĞĐŽǀĞƌǇƉŽůŝĐŝĞƐ͘
/Ŷ&zϮϬϭϵͲϮϬ͕ƚŚĞŝƚǇŽƵŶĐŝůĐƌĞĂƚĞĚĂŶĞǁƌĞƐĞƌǀĞĨƵŶĚ͕ƚŚĞ ĐŽŶŽŵŝĐhŶĐĞƌƚĂŝŶƚǇZĞƐĞƌǀĞ͕
ƚŽ ƐŵŽŽƚŚ ƚŚĞ ĞĨĨĞĐƚƐ ŽĨ ĚƌĂŵĂƚŝĐ ĚŽǁŶƚƵƌŶƐ ŝŶ ƚŚĞ ĞĐŽŶŽŵǇ ƚŚĂƚ ŵĂǇ ŶĞŐĂƚŝǀĞůǇ ŝŵƉĂĐƚ ƌĞǀĞŶƵĞƐ͘ dŚĞ ŐŽĂů ŽĨ ƚŚŝƐ ŶĞǁ ƌĞƐĞƌǀĞ ŝƐ ƚŽ ƌĞƚĂŝŶ ϮϬй ŽĨ ďƵĚŐĞƚĞĚ ĂŶŶƵĂů ŽƉĞƌĂƚŝŶŐ ĞǆƉĞŶĚŝƚƵƌĞƐ͘tŚŝůĞƚŚĞƵƐĞŽĨƚŚŝƐƌĞƐĞƌǀĞŝƐĂŶƚŝĐŝƉĂƚĞĚŝŶĨƵƚƵƌĞĨŝƐĐĂůǇĞĂƌƐ͕ƚŚĞŝƚǇ͛ƐůŽŶŐͲ ƚĞƌŵŐŽĂůƐŝŶĐůƵĚĞĨƵůůǇĨƵŶĚŝŶŐďŽƚŚƚŚĞ
ĐŽŶŽŵŝĐhŶĐĞƌƚĂŝŶƚǇĂŶĚƚŚĞKƉĞƌĂƚŝŶŐZĞƐĞƌǀĞĨƵŶĚƐ
ƚŽďĞĂƚŽƚĂůŽĨϱϬйŽĨĂŶŶƵĂůŽƉĞƌĂƚŝŶŐĞǆƉĞŶĚŝƚƵƌĞƐ͘KŶ:ƵŶĞϯϬ͕ϮϬϮϰ͕ďŽƚŚƌĞƐĞƌǀĞƐĂƌĞĨƵůůǇ ĨƵŶĚĞĚ͘
vi
71 dŚĞŝƚǇ͛ƐůŽŶŐ ƚĞƌŵ ƐƚƌĂƚĞŐŝĐƉůĂŶ͕ĂĚŽƉƚĞĚŽŶDĂƌĐŚ ϭϱ͕ ϮϬϭϴ͕ĂĚĚƌĞƐƐĞƐ ƚŚĞ ĨŽůůŽǁŝŶŐ ĨŽƵƌ ^ƚƌĂƚĞŐŝĐ
ůĞŵĞŶƚƐ͗
x &ŝƐĐĂů^ƵƐƚĂŝŶĂďŝůŝƚǇ
x ,ĞĂůƚŚǇŽŵŵƵŶŝƚŝĞƐĂŶĚWƵďůŝĐ^ĂĨĞƚǇ
x /ŶĐůƵƐŝǀĞ'ŽǀĞƌŶĂŶĐĞ
x /ŶĨƌĂƐƚƌƵĐƚƵƌĞĂŶĚ
ŶǀŝƌŽŶŵĞŶƚ
ĂƐĞĚŽŶƚŚĞƐĞ^ƚƌĂƚĞŐŝĐ
ůĞŵĞŶƚƐ͕ƚŚĞŝƚǇŽƵŶĐŝůĂŶŶƵĂůůǇĂĚŽƉƚƐƐƚƌĂƚĞŐŝĐŝŶŝƚŝĂƚŝǀĞƐƚŽŐƵŝĚĞ ƚŚĞ ŝƚǇ͛Ɛ ĂĐƚŝŽŶƐ͕ ǁŽƌŬ ƉůĂŶƐ͕ ĂŶĚ ĞĨĨŽƌƚƐ ŽŶ ĂĚĚƌĞƐƐŝŶŐ ƚŚĞ ŝƚǇ͛Ɛ ƉƌŝŽƌŝƚŝĞƐ͘ dŚĞ ŽƵŶĐŝů ĂĚĚƌĞƐƐĞƐ ƚŚĞ ŝƚǇ͛Ɛ ůŽŶŐͲƚĞƌŵ ĨŝƐĐĂů ƐƵƐƚĂŝŶĂďŝůŝƚǇ ďǇ ƌĞƚŝƌŝŶŐ ĚĞďƚ ĞĂƌůǇ͕ ŝŵƉƌŽǀŝŶŐ ƌĞƐĞƌǀĞƐ͕ ŝŶǀĞƐƚŝŶŐŝŶŝŶĨƌĂƐƚƌƵĐƚƵƌĞ͕ĂŶĚŵĂƌŬĞƚŝŶŐƚŚĞŝƚǇ ƚŽǀŝƐŝƚŽƌƐ ƚŽŝŵƉƌŽǀĞŬĞǇƌĞǀĞŶƵĞƐŽƵƌĐĞƐ͕ ƐƵĐŚĂƐdƌĂŶƐŝĞŶƚKĐĐƵƉĂŶĐǇĂŶĚ^ĂůĞƐdĂǆ͘dŚĞŝƚǇĐŽŶƚŝŶƵĞƐ ƚŽŵĂŝŶƚĂŝŶĂďĂůĂŶĐĞďĞƚǁĞĞŶ ŽŶŐŽŝŶŐƌĞǀĞŶƵĞƐĂŶĚŽŶŐŽŝŶŐĐŽƐƚƐĂƐƉĂƌƚŽĨŝƚƐŽǀĞƌĂůůůŽŶŐͲƌĂŶŐĞƐƚƌĂƚĞŐŝĐĨŝŶĂŶĐŝĂůƉůĂŶŶŝŶŐ͘ ZŝƐŬDĂŶĂŐĞŵĞŶƚ
ŽŵƉƌĞŚĞŶƐŝǀĞ ŐĞŶĞƌĂů ůŝĂďŝůŝƚǇ ĐŽǀĞƌĂŐĞ ŝƐ ƉƌŽǀŝĚĞĚ ƚŚƌŽƵŐŚ ƚŚĞ WŽŽůĞĚ >ŝĂďŝůŝƚǇ ƐƐƵƌĂŶĐĞ EĞƚǁŽƌŬ:ŽŝŶƚWŽǁĞƌƐƵƚŚŽƌŝƚǇ;W>E:WͿ͘dŚĞW>EĐŽŶƐŝƐƚƐŽĨĂƐĞůĨͲŝŶƐƵƌĂŶĐĞƉŽŽůŝŶǀŽůǀŝŶŐĂ ŶƵŵďĞƌŽĨĐŝƚŝĞƐŝŶƚŚĞ^ĂŶ&ƌĂŶĐŝƐĐŽͲKĂŬůĂŶĚĂƌĞĂ͘dŚĞĐŝƚŝĞƐĐŽŶƚƌĂĐƚǁŝƚŚƚŚĞW>EƚŚƌŽƵŐŚĂ ůŝĂďŝůŝƚǇĐŽǀĞƌĂŐĞĂŐƌĞĞŵĞŶƚƚŚĂƚŝƐǀĞƌǇƐŝŵŝůĂƌƚŽĂĐŽŵƉƌĞŚĞŶƐŝǀĞŐĞŶĞƌĂůůŝĂďŝůŝƚǇ͕ĐŽŵŵĞƌĐŝĂů ĂƵƚŽ͕ĂŶĚƉƵďůŝĐŽĨĨŝĐŝĂůƐ͛ĞƌƌŽƌƐĂŶĚŽŵŝƐƐŝŽŶƐƉŽůŝĐǇ͘dŚĞŝƚǇ͛ƐůŝŵŝƚŝŶƚŚĞƉŽŽůŝƐΨϱ͕ϬϬϬ͕ϬϬϬǁŝƚŚ ĂΨϱϬ͕ϬϬϬƉĞƌŽĐĐƵƌƌĞŶĐĞĚĞĚƵĐƚŝďůĞĨŽƌǁŚŝĐŚŝƚƐĞůĨͲŝŶƐƵƌĞƐ͘ &ŽƌtŽƌŬĞƌƐΖŽŵƉĞŶƐĂƚŝŽŶĐŽǀĞƌĂŐĞ͕ƚŚĞŝƚǇƉĂƌƚŝĐŝƉĂƚĞƐŝŶƚŚĞŝƚŝĞƐ'ƌŽƵƉ͕ĐƌĞĂƚĞĚďǇĂũŽŝŶƚ ƉŽǁĞƌƐ ĂŐƌĞĞŵĞŶƚ ƚŽ ƉƌŽǀŝĚĞ ǁŽƌŬĞƌƐ ĐŽŵƉĞŶƐĂƚŝŽŶ ĐŽǀĞƌĂŐĞ ŽĨ ƵƉ ƚŽ ΨϭϬ͕ϬϬϬ͕ϬϬϬ ƉĞƌ ŽĐĐƵƌƌĞŶĐĞŝŶĞǆĐĞƐƐŽĨΨϭ͕ϬϬϬ͕ϬϬϬĨŽƌŵŝƐĐĞůůĂŶĞŽƵƐĞŵƉůŽǇĞĞƐ͘dŚĞ'ƌŽƵƉĂĐƚƐĂƐĂĚŵŝŶŝƐƚƌĂƚŽƌ͕ ĐůĂŝŵĂĚũƵƐƚĞƌĂŶĚƉƌŽǀŝĚĞƐŽƚŚĞƌƌŝƐŬŵĂŶĂŐĞŵĞŶƚƐĞƌǀŝĐĞƐĂƐƌĞƋƵŝƌĞĚďǇ^ƚĂƚĞůĂǁ͘ ĂĐŚŵĞŵďĞƌ
ŽĨ ƚŚĞ'ƌŽƵƉƉĂǇƐĂ ƉƌĞŵŝƵŵ ĐŽŵŵĞŶƐƵƌĂƚĞǁŝƚŚ ƚŚĞ ůĞǀĞů ŽĨ ĐŽǀĞƌĂŐĞ ƌĞƋƵĞƐƚĞĚĂŶĚ ƐŚĂƌĞƐ ƐƵƌƉůƵƐĞƐ ĂŶĚ ĚĞĨŝĐŝƚƐ ƉƌŽƉŽƌƚŝŽŶĂƚĞ ƚŽ ŝƚƐ ƉĂƌƚŝĐŝƉĂƚŝŽŶ ŝŶ ƚŚĞ 'ƌŽƵƉ͘ ĚĚŝƚŝŽŶĂů ŝŶĨŽƌŵĂƚŝŽŶ ĐŽŶĐĞƌŶŝŶŐƚŚĞŝƚǇΖƐƉĂƌƚŝĐŝƉĂƚŝŽŶŝŶƌŝƐŬƉŽŽůƐĨŽƌůŝĂďŝůŝƚǇĂŶĚǁŽƌŬĞƌƐΖĐŽŵƉĞŶƐĂƚŝŽŶŝƐƉƌŽǀŝĚĞĚ ŝŶEŽƚĞϭϬƚŽƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͘
dŚĞ ŝƚǇ ĨŽĐƵƐĞƐ ŽŶ ŝĚĞŶƚŝĨŝĐĂƚŝŽŶ ŽĨ ŚĂǌĂƌĚƐ ĂŶĚ ĚĂŶŐĞƌŽƵƐ ĐŽŶĚŝƚŝŽŶƐ ĂŶĚ ƉƌŽǀŝĚĞƐ ŽŶͲŐŽŝŶŐ ƚƌĂŝŶŝŶŐŝŶĂŶĞĨĨŽƌƚƚŽƌĞĚƵĐĞĞǆƉŽƐƵƌĞĂŶĚĞŶƐƵƌĞƉƵďůŝĐƐĂĨĞƚǇĂŶĚǁĞůĨĂƌĞ͘ tZ^E<EKt>
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dŚĞ'ŽǀĞƌŶŵĞŶƚ&ŝŶĂŶĐĞKĨĨŝĐĞƌƐƐƐŽĐŝĂƚŝŽŶŽĨƚŚĞhŶŝƚĞĚ^ƚĂƚĞƐĂŶĚĂŶĂĚĂ;'&KͿĂǁĂƌĚĞĚĂ ĞƌƚŝĨŝĐĂƚĞŽĨĐŚŝĞǀĞŵĞŶƚĨŽƌ
ǆĐĞůůĞŶĐĞŝŶ&ŝŶĂŶĐŝĂůZĞƉŽƌƚŝŶŐƚŽƚŚĞŝƚǇŽĨ,ĂůĨDŽŽŶĂǇĨŽƌŝƚƐ ĂŶŶƵĂůĐŽŵƉƌĞŚĞŶƐŝǀĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚĨŽƌƚŚĞĨŝƐĐĂůǇĞĂƌĞŶĚĞĚ:ƵŶĞϯϬ͕ϮϬϮϯ͘dŽďĞĂǁĂƌĚĞĚĂ ĞƌƚŝĨŝĐĂƚĞŽĨĐŚŝĞǀĞŵĞŶƚ͕ĂŐŽǀĞƌŶŵĞŶƚŵƵƐƚƉƵďůŝƐŚĂŶĞĂƐŝůǇƌĞĂĚĂďůĞĂŶĚĞĨĨŝĐŝĞŶƚůǇŽƌŐĂŶŝǌĞĚ vii
72 ĂŶŶƵĂůĐŽŵƉƌĞŚĞŶƐŝǀĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚ͘dŚŝƐƌĞƉŽƌƚŵƵƐƚƐĂƚŝƐĨǇďŽƚŚŐĞŶĞƌĂůůǇĂĐĐĞƉƚĞĚĂĐĐŽƵŶƚŝŶŐ ƉƌŝŶĐŝƉůĞƐĂŶĚĂƉƉůŝĐĂďůĞůĞŐĂůƌĞƋƵŝƌĞŵĞŶƚƐ͘
ĞƌƚŝĨŝĐĂƚĞŽĨĐŚŝĞǀĞŵĞŶƚŝƐǀĂůŝĚ ĨŽƌĂƉĞƌŝŽĚŽĨŽŶĞǇĞĂƌŽŶůǇ͘tĞďĞůŝĞǀĞ ƚŚĂƚŽƵƌĐƵƌƌĞŶƚ ĂŶŶƵĂůĐŽŵƉƌĞŚĞŶƐŝǀĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚĐŽŶƚŝŶƵĞƐƚŽŵĞĞƚƚŚĞĞƌƚŝĨŝĐĂƚĞŽĨĐŚŝĞǀĞŵĞŶƚWƌŽŐƌĂŵ͛Ɛ ƌĞƋƵŝƌĞŵĞŶƚƐ͕ĂŶĚǁĞĂƌĞƉůĞĂƐĞĚƚŽƐƵďŵŝƚŝƚƚŽƚŚĞ'&KƚŽĚĞƚĞƌŵŝŶĞŝƚƐĞůŝŐŝďŝůŝƚǇ͘ tĞ ǁŽƵůĚ ůŝŬĞ ƚŽ ƚĂŬĞ ƚŚŝƐ ŽƉƉŽƌƚƵŶŝƚǇ ƚŽ ƚŚĂŶŬ ƚŚĞ ĚŵŝŶŝƐƚƌĂƚŝǀĞ ^ĞƌǀŝĐĞƐ ĞƉĂƌƚŵĞŶƚ ƐƚĂĨĨ͘ ^ƉĞĐŝĂů ƚŚĂŶŬƐ ƚŽ <ĞŶŶĞƚŚ ^ƚŝůĞƐ͕ &ŝŶĂŶĐĞ DĂŶĂŐĞƌ͖ ƌǇĂŶ >ŽƉĞǌ͕ ^ĞŶŝŽƌ DĂŶĂŐĞŵĞŶƚ ŶĂůǇƐƚ͖

ƌŶĞƐƚǌĞǀĞĚŽ͕DĂŶĂŐĞŵĞŶƚŶĂůǇƐƚ͖ZĂǇŵŽŶĚƌƵǌ͕WĂǇƌŽůůdĞĐŚŶŝĐŝĂŶ͖DĂƌŐĂƌĞƚ:ĞĂŶŶĞ'ĞŝŐĞƌ͕ ĐĐŽƵŶƚŝŶŐdĞĐŚŶŝĐŝĂŶ͖ĂŶĚtŚŝƚŶĞǇZĞƐĐŝŶŽ͕ĚŵŝŶŝƐƚƌĂƚŝǀĞƐƐŝƐƚĂŶƚĨŽƌƚŚĞŝƌĞĨĨŽƌƚƐĚƵƌŝŶŐƚŚĞ ĂŶŶƵĂů ĂƵĚŝƚ ƉƌŽĐĞƐƐ ĂŶĚ ĐŽŶƚƌŝďƵƚŝŽŶ ƚŽ ƚŚŝƐ ƌĞƉŽƌƚ͘ tĞ ĂůƐŽ ǁŽƵůĚ ůŝŬĞ ƚŽ ĞǆƉƌĞƐƐ ĚĞĞƉ ĂƉƉƌĞĐŝĂƚŝŽŶƚŽƚŚĞĂƵĚŝƚƚĞĂŵĨƌŽŵDĂǌĞĂŶĚƐƐŽĐŝĂƚĞƐĨŽƌƚŚĞŝƌƉƌŽĨĞƐƐŝŽŶĂůǁŽƌŬĂŶĚĂƐƐŝƐƚĂŶĐĞ ĚƵƌŝŶŐƚŚĞĂƵĚŝƚƉƌŽĐĞƐƐĂŶĚƚŚƌŽƵŐŚŽƵƚƚŚĞǇĞĂƌ͘
&ŝŶĂůůǇ͕ǁĞǁŽƵůĚůŝŬĞƚŽĞǆƉƌĞƐƐŽƵƌĂƉƉƌĞĐŝĂƚŝŽŶƚŽƚŚĞŝƚǇŽƵŶĐŝů͕ƚŚĞŽƉĞƌĂƚŝŶŐĚĞƉĂƌƚŵĞŶƚƐ͕ ĂŶĚƚŚĞŽƵŶĐŝů&ŝŶĂŶĐĞŽŵŵŝƚƚĞĞĨŽƌƚŚĞŝƌŝŶƚĞƌĞƐƚĂŶĚƐƵƉƉŽƌƚƚŽǁĂƌĚĐŽŶĚƵĐƚŝŶŐƚŚĞĨŝŶĂŶĐŝĂů ŽƉĞƌĂƚŝŽŶƐŽĨƚŚĞŝƚǇŝŶĂƌĞƐƉŽŶƐŝďůĞŵĂŶŶĞƌǁŝƚŚĞŵƉŚĂƐŝƐŽŶƚƌĂŶƐƉĂƌĞŶĐǇ͕ĞƚŚŝĐƐ͕ĂŶĚĨŝƐĐĂů ƌĞƐƉŽŶƐŝďŝůŝƚǇ͘

ZĞƐƉĞĐƚĨƵůůǇƐƵďŵŝƚƚĞĚ͕
^ŝŐŶĞĚ͗ͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺ ͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺͺ DĂƚƚŚĞǁŚŝĚĞƐƚĞƌ >ŝƐĂZŽƐƐŝ
ŝƚǇDĂŶĂŐĞƌ ĚŵŝŶŝƐƚƌĂƚŝǀĞ^ĞƌǀŝĐĞƐŝƌĞĐƚŽƌ viii
73 Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Half Moon Bay
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
ix
74 Half Moon Bay City Limits
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I W:
• I
1 0
Unincorporated
San Mateo County
City of
Half Moon Bay
Map not 1D Scale
NORTH
Unincorporated
San Mateo County
Unincorporated
San Mateo County
x
75 xi
76 xii
77 Community
City
Council
City
Committees
City
Commissions
City
Attorney
City
Manager
Assistant City
Manager
Public
Safety
Community
Development
Public
Works
Communications
& City Clerk
Administrative
Services
Law
Enforcement
Dispatch
Animal
Control
Planning
Building
Code
Enforcement
Housing
Engineering
Sewer
Capital Projects
Maintenance
Sustainability
Elections
Communications
Legislative
Affairs
Community &
Employee
Engagement
Contracts &
Records
Management
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City of Half Moon Bay Organizational Chart
Economic &
Community
Vitality
xiii
78 79

FINANCIAL SECTION
80 81
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and City Council
City of Half Moon Bay, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Half Moon Bay, California (City), as of and for the year ended June 30, 2024, 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, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining funds information of the City as of June 30, 2024, 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.

We did not audit the financial statements of Sewer Authority Mid-Coastside (SAM) as of and for the year ended June 30, 2023, related to the calculation of the Investment in SAM. The Investment in SAM, represents 51%, 52% and 17%, respectively, of the assets, net position and revenues of the City’s business-type activities. The financial statements of SAM were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the calculation of the Investment in SAM, is based solely on the report of the other auditors.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 requirement 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.

Responsibility of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. 1 82
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 twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

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 generally accepted auditing standards and Government Auditing Standards 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 generally accepted auditing standards and Government Auditing Standards, 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 83
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management’s Discussion and Analysis and other Required Supplementary Information as listed in the Table of Contents 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 accompanying Supplementary Information, as listed in the Table of Contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The 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 Supplementary Information is 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 annual report. The other information comprises the Introductory Section and Statistical Section listed in the Table of Contents, but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic 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 basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic 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.
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Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 3, 2024 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 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 the City’s 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.

Pleasant Hill, California
December 3, 2024
4 85
MANAGEMENT’S DISCUSSION AND ANALYSIS
86 87

CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Half Moon Bay (the City), we offer readers of the City of Half Moon Bay’s financial statements this overview of the financial activities of the City for the fiscal year ended June 30, 2024. We encourage readers to consider the information presented here in conjunction with additional information that we have provided in our letter of transmittal and the City’s basic financial statements.

Financial Highlights
 The City’s government-wide assets and deferred outflows exceed its liabilities and deferred inflows at June 30, 2024, by $161.8 million, which is a 2.4% or $3.8 million increase from the prior year.

Of this amount, $41.7 million may be used to meet the City’s ongoing obligations to citizens and creditors, which is a 10% decrease from the prior year’s unrestricted net position of $46.5 million.  The City’s cash and investments on June 30, 2024, totaled $51.4 million, of which $47.4 million is classified as government activities and $4 million as Business-type activity. The City’s cash and investments increased by $1.4 million, or 2.7% compared to the prior year.  At June 30, 2024, the City had outstanding long-term obligations of $23 million, of which $22.4 million is classified as governmental activities and $564 thousand as business activities.

Obligations have increased by $1 million or 5% compared to the prior year. This increase is primarily due to an increase in net pension liability.
 During the 2014-15 fiscal year, the City implemented the Government Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pension Plans, an amendment of GASB Statement No. 27, which resulted in adjustments to pension expenses and reporting the City’s long-term net pension liability of $14.5 million on the FY 2023-24 Statement of Net Position.

GASB No. 68 is intended to improve accounting and financial reporting by state and local governments that provide pension benefits. The Net Pension Liability increased by $756 thousand from the $13.8 million recorded last year. This increase is due to a decrease in the market value of pension assets held at CalPERS on the measurement date of June 30, 2023.  City-wide revenues were $38.8 million, of which $31.1 million was generated by governmental activities and $7.7 million by Business-type activities. Revenues increased by 15% from the prior year primarily due to an increase in capital grants and contributions.  City-wide expenditures were $34.9 million, of which $28.3 million was incurred by governmental activities and $6.6 million by Business-type activities. Expenditures increased by 35% from the prior year mostly due to increases in public works, public safety and general government expenditures.
 The City’s General Fund balance as of June 30, 2024, was $14.4 million, a decrease of $1.8 million as compared to the prior year’s amount of $16.2 million. This decrease is due to expenditures exceeding revenues from increased costs in existing services.  For the fiscal year ended June 30, 2024, Governmental Funds expenditures exceeded revenues and net transfers by $509 thousand, primarily attributed to increased public safety and capital expenditures. The governmental funds’ combined ending fund balance as of June 30, 2024, is $68 million, a less than 1% decrease from the prior year. 7 88

CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS

OVERVIEW OF THE FINANCIAL STATEMENTS
This management discussion and analysis section is intended to serve as an introduction to the City’s basic financial statements, which 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 a transmittal letter, other required supplementary information, an optional section that presents combining statements for non-major governmental funds and internal service funds, and a statistical section.

Government-wide Financial Statements
The government-wide financial statements include the statement of net position and the statement of activities. Both are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the City’s assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of the City’s financial condition.

The statement of activities presents information showing how the government’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation and sick leave).

These two statements that comprise the government-wide financial statements both distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (Business-type activities). The governmental activities of the City include its general government, public safety, public works and building regulation, parks and recreation, and planning programs. The sole Business-type activity of the City is the City’s sewer utility.

The government-wide financial statements normally include, not only the City of Half Moon Bay itself (known as the primary government), but also a legally separate Community Development Agency of the City of Half Moon Bay for which the City of Half Moon Bay is financially accountable. Although the Agency is an integral part of the primary government, no financial information has been included for this component unit since it has been inactive for over ten years.

Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Half Moon Bay uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. 8 89

CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City of Half Moon Bay maintains sixteen individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, the Streets and Roads Fund, the Lot Acquisition Fund, the Affordable Housing Fund, the Land Assets Fund, and the Capital Projects Fund, all of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the non-major governmental funds is provided in the form of combining statements in the Combining Balance Sheet and Individual Fund Statements of Revenues, Expenditures and Changes in Fund Balances sections of the report.

The City of Half Moon Bay adopts an annual appropriated budget for each of its governmental funds. A budgetary comparison schedule has been provided for each governmental fund to demonstrate compliance with this budget.

The basic governmental fund financial statements can be found on pages 28-34 of this report. The budgetary comparison schedule for the General Fund can be found on page 85.

Proprietary Funds
The City of Half Moon Bay maintains two types of proprietary funds: Internal Service funds and Enterprise (Proprietary) funds.

Internal Service Funds
Internal Service funds are used to accumulate resources and allocate costs internally among the City’s various functions. The City uses internal service funds to account and reserve for the purchase and maintenance of City vehicles and equipment, to account and reserve for risk management activities, and to stabilize for fluctuations in pension costs. Because these services exclusively benefit the governmental functions, they have been included within governmental activities in the government-wide financial statements.

Enterprise Funds
Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises. The intent is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily by user charges. The City uses an enterprise fund to account for the financial activity of the City’s sewer operation. 9 90

CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. The enterprise funds are also combined into a single, aggregated presentation in the proprietary fund financial statements that can be found on pages 35-37 of this report.

Notes to the Basic Financial Statements
The notes provide additional information essential to the 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 39-78 of this report.

Other Information.

In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information including schedule of proportionate share of the net pension liability, contributions, funding progress for the City’s obligation to provide other post-employment benefits to its employees and budgetary comparison schedules for the General Fund and the other funds. Required supplementary information can be found on pages 80-90 of this report.

The combining statements for non-major governmental funds and internal service funds are presented on pages 94-110, and the Statistical Section follows on page 113. 10 91

CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS

GOVERNMENT-WIDE FINANCIAL ANALYSIS
Statement of Net Position
The following table provides a condensed statement of net position as of June 30, 2024, and 2023:

Note: Total assets + deferred outflows – total liabilities – deferred inflows = total net position 2024 2023 2024 2023 2024 2023
Current and other assets 51,986,855 50,091,872 15,482,216 15,252,242 67,469,071 65,344,114 Land held for resale 26,823,920 26,823,920 - - 26,823,920 26,823,920 Capital Assets 82,889,996 78,346,957 6,831,129 6,981,850 89,721,125 85,328,807 Total assets 161,700,771 155,262,749 22,313,345 22,234,092 184,014,116 177,496,841 Related to OPEB 78,302 60,710 5,290 4,634 83,592 65,344 Related to pension 5,308,118 5,593,021 235,072 232,715 5,543,190 5,825,736 Total deferred outflows of
resources 5,386,420 5,653,731 240,362 237,349 5,626,782 5,891,080 Long-term liabilities
outstanding 19,882,281 19,654,785 564,424 541,207 20,446,705 20,195,992 Other liabilities 6,392,443 3,837,847 114,068 134,964 6,506,511 3,972,811 Total liabilities 26,274,724 23,492,632 678,492 676,171 26,953,216 24,168,803 Related to OPEB 99,786 113,746 8,489 9,009 108,275 122,755 Related to pension 684,592 1,043,360 68,596 74,781 753,188 1,118,141 Total deferred inflows of
resources 784,378 1,157,106 77,085 83,790 861,463 1,240,896 Net Position:

Net investment in capital
assets 76,826,570 71,854,949 6,831,129 6,981,850 83,657,699 78,836,799 Restricted 25,081,978 22,502,708 11,397,062 10,092,582 36,479,040 32,595,290 Unrestricted 38,119,541 41,909,085 3,569,939 4,637,048 41,689,480 46,546,133 Total Net Position 140,028,089 136,266,742 21,798,130 21,711,480 161,826,219 157,978,222 Governmental
Activities
Business Type
Activities
Total

CITY OF HALF MOON BAY
Comparative Statement
Statement of Net Position
Year Ended on June 30, 2024
11 92

CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
Net Position reflects the difference between assets and liabilities. Net position may serve over time as a useful indicator of a government’s financial position. In the case of the City of Half Moon Bay, assets exceeded liabilities by $161.8 million on June 30, 2024, with invested capital assets of $83.7 million, $36.5 million restricted and an unrestricted net position of $41.7 million. Portions of the unrestricted net position may by law or contract be used only for specified purposes and may not necessarily be used for any general governmental purpose.

The net investment in capital assets reflecting the investment in capital assets (e.g. land, buildings, facilities, vehicles, equipment, and infrastructure) is $83.7 million and represents 52% percent of the City’s net position. This portion has increased by $4.8 million or 6%. The City uses capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the net investments in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities.

The restricted net position accounts for $36.5 million, or 23% percent, of the City’s total net position. The restricted net position increased by $3.8 million or 12% percent in fiscal year 2023-24. This portion of the net position can only be spent for specific purposes stipulated by external resource providers or legislation.

This increase is from restricted revenues exceeding allowed expenditures in the governmental funds.

Restricted revenues generally include grants, project specific capital contributions and other intergovernmental funding.

The unrestricted net position of $41.7 million, or 25.8% percent of the City’s total net position, decreased by $4.8 million or 10% percent. The increase is primarily from the City completing the fiscal year with expenditures under budget. This portion of the net position may be used to meet the government’s ongoing obligations to residents and creditors, although portions of the unrestricted net position may by law or contract be only used for specified purposes and may not necessarily be used for any general governmental purpose.

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CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
Statement of Activities
The following table provides a condensed statement of activities for the fiscal year ended June 30, 2024, as compared to June 30, 2023:

Variance
2024 2023 2024 2023 2024 2023
Program revenues:

Charges for services 2,505,538 2,882,242 6,207,200 5,994,167 8,712,738 8,876,409 -2% Operating grants and
contributions 1,285,182 3,628,574 - - 1,285,182 3,628,574 -65% Capital grants and
contributions 6,738,537 1,252,880 1,304,480 537,739 8,043,017 1,790,619 349% Subtotal 10,529,257 7,763,696 7,511,680 6,531,906 18,040,937 14,295,602 26% General revenues:

Property taxes 4,283,589 4,129,317 - 4,283,589 - 4,129,317 4% Sales and use taxes 3,665,449 3,740,219 - 3,665,449 - 3,740,219 -2% Transient occupancy taxes 8,167,938 8,852,640 - - 8,167,938 8,852,640 -8% Other taxes 1,343,633 1,276,299 - 1,343,633 - 1,276,299 5% Other general revenues 3,092,976 1,289,743 242,911 129,865 3,335,887 1,419,608 135% Subtotal 20,553,585 19,288,218 242,911 129,865 20,796,496 19,418,083 7% Total revenues 31,082,842 27,051,914 7,754,591 6,661,771 38,837,433 33,713,685 15% Expenses
General government 7,811,794 6,018,989 - - 7,811,794 6,018,989 30% Public safety 6,875,457 5,275,682 - 6,875,457 - 5,275,682 30% Public works 6,255,645 4,129,117 - 6,255,645 - 4,129,117 52% Recreation Services 1,534,752 597,127 - 1,534,752 - 597,127 157% Planning 3,931,872 2,965,787 - 3,931,872 - 2,965,787 33% Community and Economic
Development 1,894,276 843,267 - - 1,894,276 843,267 125% Sewer Utility - 6,685,640 - 5,998,227 6,685,640 5,998,227 11% -
Total expenses 28,303,796 19,829,968 6,685,640 5,998,227 34,989,436 25,828,195 35% Increase (Decrease) in net
position before transfers 2,779,046 7,221,946 1,068,951 663,544 3,847,997 7,885,490 -51% Transfers 982,301 957,438 (982,301) (957,438) - - 0%
Increase (Decrease) in net
position 3,761,347 8,179,384 86,650 (293,894) 3,847,997 7,885,490 -51% Net position - As of July 1 136,266,742 128,087,358 21,711,480 22,005,374 157,978,222 150,092,732 5% Prior Period Adjustment - - - - -
Net position - As of July 1, as
restated 136,266,742 128,087,358 21,711,480 22,005,374 157,978,222 150,092,732 5% Net position - As of June 30 140,028,089 136,266,742 21,798,130 21,711,480 161,826,219 157,978,222 2% Governmental Activities Total Business-type Activities

CITY OF HALF MOON BAY
Comparative Statement
Statement of Activities
Year Ended on June 30, 2024
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CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
Governmental Activities
The City’s Governmental net position increased by $3.7 million or 2.8% in fiscal year 2024, primarily due to revenues exceeding expenses.

Revenues Highlights:
 Total governmental revenues increased by $4 million or 15% from the prior year, primarily due to increases in capital grants and contributions.
o Program revenues increased by $2.7 million or 36%. This increase is primarily from increases in capital grants and contributions. These receipts are generally project specific and/or one-time funds. During the fiscal year, the City was awarded three grants totaling $4.7 million. These funds are designated for affordable housing efforts. o Transient Occupancy Tax (TOT), the City’s largest source of general revenue, decreased by $684 thousand or 8% from the prior year. This is primarily due to a decrease in tourism to the coast.
o Sales Tax, the second largest source of general revenue, decreased by $74 thousand or 2% from the prior year. This is primarily due to a decrease in tourism to the coast and the overall economy.
o Property Tax, the third largest source of general revenue, increased by $154 thousand or 4% from the prior year. This increase is primarily due growth in base property taxes. o Other General Revenues include investment income and other miscellaneous revenues.

The amount from government activities increased by $1.8 million or 140% from the prior year. This is primarily due to increases in interest and unrealized gains on investments.

Expenses for Government Activities increased by $8.4 million from the prior year primarily due to a onetime debt service payment of $3 million along with increases in capital projects, public safety and general government expenditures.

Business-type Activities
The City’s sole Business-type activity is the sewer fund. The City’s total Business-type net position increased by $86 thousand. This is primarily due to the following factors:
• The City is a member of the SAM joint power authority and exercises significant influence over SAM’s operations; therefore, the share of the City’s investment in SAM’s net position is reflected in the City’s financial statements. For the fiscal year 2023-24 the City recognized a gain on this investment of $1.3 million. However, this gain is non-cash transaction, contributing no additional liquidity. As seen on page 37, the sewer fund cash decreased by $1 million, primarily due to rising expenditures.
• Charges for Services revenues increased by $213 thousand or 3.6% from the prior year. This increase is primarily due to the sewer rate changes as adopted by voters in fiscal year 2019-2020.

Rates are scheduled to increase year over year through fiscal year 2024-25. • Expenses from Business-type Activities increased by $687 thousand as compared to fiscal year 2022-23. This is primarily due to increases in sewer treatment and contributions to the SAM joint power authority.
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CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS

FUND FINANCIAL ANALYSIS
As noted above, the City uses fund accounting to ensure and demonstrate compliance with governmental finance-related legal requirements.

Governmental Funds
The Governmental Funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows and balance of resources that are available for spending.

Such information is useful in assessing the City’s financial requirements. In particular, the unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. Consequently, the governmental fund financial statements provide a detailed short-term view that helps the readers determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs.

The following is a schedule of revenues, expenditures, and changes in fund balances for each of the major governmental and aggregate non-major governmental funds recorded on the modified accrual basis of accounting:

As of June 30, 2024, the City’s governmental funds reported combined fund balances of $68 million, a decrease of $508 thousand in comparison with June 30, 2023. This is primarily attributed to expenditures exceeding revenues. The governmental funds expenditures were $32.9 million in fiscal year 2023-24, a $9 million increase from the prior year which is primarily due to capital expenditures and increases in public safety expenditures.
2024 2023 Variance
Revenues $ 30,506,165 $ 26,942,159 13%
Expenditures (32,988,058) (23,706,716) 39%
Other Financing Sources (Uses) 1,972,994 (747,983) -364% Net Change in Fund Balances (508,899) 2,487,460 -120%
Fund balances at beginning of year 68,524,929 66,037,469 4% Fund balances at end of year 68,016,030 68,524,929 -1%
Non-spendable 26,823,920 27,096,226
Restricted 24,590,954 22,258,032 10%
Committed 11,091,587 9,841,012 13%
Assigned 2,233,226 2,942,767 -24%
Unassigned 3,276,343 6,386,892 -49%
Total fund balances 68,016,030 68,524,929 -1%

CITY OF HALF MOON BAY
Comparative Statement
Governmental Funds Statement of Revenues, Expenditures and Fund Balance Year Ended on June 30, 2024
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CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
The governmental funds’ fund balance is comprised of the following:
• Non-spendable is $26.8 million (39.4% of total balance) which represents the value of land held by the City. There has been no change in this amount from the prior year. • Restricted is $24.5 million (36.2% of the total balance), which can only be spent for specific purposes, set by external resource providers, or enabling legislation. The balance is primarily for restricted street funds, development fees, and reserves required by debt covenants. • Committed balance is $11 million (16.3% of the total balance), which can only be spent for specific purposes as determined by formal action of the City Council. This amount is to satisfy the City’s general fund reserve policy, which states that 50 percent of budgeted operating expenditures for the year to be committed for contingencies and economic uncertainty. • Assigned balance is $2.2 million (3.3% of the total balance), which indicates City Council’s intent to use these funds toward capital improvements in the future. This balance represents funds remaining in the capital project funds for future capital expenditures. • Unassigned is $3.2 million (4.8% of the total balance), which is available for any use.

FINANCIAL ANALYSIS OF CITY’S FUNDS
General Fund
The General Fund is the primary operating fund of the City of Half Moon Bay. All unrestricted revenues such as general taxes, fees and other revenues that are not allocated by law or contractual agreement to some other funds are accounted for in this fund. The General Fund provides for the cost of operating City government and includes the services of the City Attorney, City Clerk, City Council, City Manager, Citywide costs (such as debt service), Finance and Risk Management, Human Resources and Information Technology, Recreation, Building and Planning, Public Works, Economic Vitality and Public Safety. In addition, the General Fund expenditures include transfers to fund capital projects and reserve funding.

As of June 30, 2024, the total General Fund balance was $14.3 million, which includes an unassigned portion of $3.2 million. The General Fund fund balance decreased by $1.8 million for the fiscal year ended June 30, 2024.
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CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
The following table compares General Fund revenues and expenditures by category:

General Fund Revenues
General Fund revenues for the year ended June 30, 2024, decreased by $1.6 million or 8%, from the prior year. The preceding chart summarizes revenues into major categories for comparative purposes across two fiscal years.

Total tax revenues decreased by $508 thousand or 3% from the prior year primarily from a decrease in transient occupancy taxes. Net other financing sources/uses decreased by $4.9 million primarily due to a refinancing of a $3 million loan with the County of San Mateo. 2024 2023 Variance
Revenues
Taxes 16,991,811 17,500,650 -3%
License and permits 306,282 452,763 -32%
Fines and forfeitures 81,445 32,232 153%
Charges for services 1,454,141 1,419,473 2%
Impact Fees - -
Rents and Leases 78,135 63,728 23%
Investment Income 804,188 353,945 127%
Intergovernmental revenues 117,400 1,552,805 -92%
Miscellaneous 833,965 970,404 -14%
Total 20,667,367 22,346,000 -8%
Expenditures
General government 3,138,896 2,272,314 38%
General administration 2,134,173 1,977,351 8%
Public safety 6,452,977 4,914,582 31%
Public works 2,174,611 2,176,714 0%
Recreation Services 538,827 524,211 3%
Planning 2,879,532 2,873,331 0%
Community and Economic
Development 1,008,276 843,267 20%
Capital Outlay - -
Debt Service 3,725,598 675,302 452%
Total 22,052,890 16,257,072 36%
Other financing sources (uses) (474,451) (5,446,177) -91% Net Change in Fund Balances (1,859,974) 642,751 -134%
Fund Balances at beginning of year 16,227,904 15,585,153 4% Fund Balances at end of year 14,367,930 $ 16,227,904 -11%

CITY OF HALF MOON BAY
Comparative Statement
General Fund Statement of Revenues, Expenditures and Fund Balance Year Ended on June 30, 2024
17 98

CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
General Fund Expenditures
General Fund expenditures for the 2023-24 fiscal year rose by $5.7 million, or 36%. This increase is primarily attributed to debt service payments related to the refinancing mentioned above, along with higher expenditures in public safety and general government.

General Fund Budgetary Highlights
The final budget for the General Fund planned for a net decrease of fund balance by $4.9 million, however the ending fund balance decreased by $1.8 million. This is primarily due to the City successfully refinancing an existing loan and decreased operational spending than initially anticipated. A portion of these excess funds have been appropriated in the following budget for fiscal year 2024-25.

Other Major Governmental Funds
The following table compares governmental fund balances:

Final Budget Actual Variance
Revenues $ 19,916,944 $ 20,667,367 $ 750,423
Expenditures (20,929,448) (22,052,890) (1,123,442)
Other Financing Sources (Uses) (3,979,451) (474,451) 3,505,000 Net Change in Fund Balance (4,991,955) (1,859,974) 3,131,981 Fund balances at beginning of year 16,227,904 16,227,904 - Fund balances at end of year 11,235,949 14,367,930 3,131,981

CITY OF HALF MOON BAY
Budget to Actual Statement
General Fund Statement of Revenues, Expenditures and Fund Balance Year Ended on June 30, 2024
2024 2023 Variance
Major Governmental Funds:

General Fund 14,367,930 16,227,904 -11%
Streets and Road 7,263,726 6,427,224 13%
Lot Acquisition 1,420,599 1,348,210 5%
Affordable Housing 5,954,709 2,164,621 175%
Parks Development 894,568 2,589,695 -65%
Land Asset 26,823,920 26,823,920 0%
Capital Project Fund 1,784,042 2,788,918 -36%
Non-Major Governmental Funds 9,506,536 10,154,437 -6%
Total Fund Balances 68,016,030 $ 68,524,929 $ -1%

CITY OF HALF MOON BAY
Comparative Statement
Governmental Funds Statement of Revenues, Expenditures and Fund Balance Year Ended on June 30, 2024
18 99

CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
Streets and Roads Funds
The Streets and Roads Special Revenue funds provide for all proceeds of Gas Tax funds, Measure A/W Local Transportation Ordinance Tax funds and other grants. These funds are restricted for the purpose of these taxes and mainly used for streets and road maintenance and improvements. As of June 30, 2024, the Streets and Roads Funds had a fund balance of $7.2 million, a $836 thousand increase from the prior year, primarily due revenues exceeding expenditures.

Lot Acquisition / Retirement Fund
The Lot Acquisition and Retirement fund is a fund used to account for in-lieu fees and expenses within the purpose of acquiring and retiring development rights on existing legal parcels. As of June 30, 2024, the fund had a fund balance of $1.4 million, a $72 thousand increase from the prior year.

Affordable Housing Fund
The Affordable Housing fund accounts for proceeds of construction and development fees, including in lieu fees with the restricted purpose of the development of affordable housing. As of June 30, 2024, the fund balance was $5.9 million, which is a $3.7 million increase from the prior year. This is primarily due to the receipt of affordable housing grants totaling $4.7 million for the fiscal year.

Parks Development
The Parks Development Fund which accounts for development impact fees, Federal, State and County grants, and is restricted for acquisition, development and capital improvements of the City’s parks and trails This fund decreased by $1.6 million, primarily due capital projects and expenditures. As of June 30, 2024, the fund balance was $894 thousand.

Land Asset Fund
This is a restricted fund which was created in Fiscal Year 2014-15 for the purposes of recording land assets held for resale. The fund balance as of June 30, 2024 is $26.8 million, which consists of transfers of land assets for Glencree and Beechwood properties from the General Fund and the Judgment Obligation Bond Funds. The Glencree property was donated to the City. The Beechwood property was acquired by the City as part of the settlement of the Yamagiwa litigation in 2007. With the receipt of the insurance settlement payments, the Beechwood properties are no longer required for the Judgement Obligation Bonds. There was no activity in this fund in fiscal year 2023-24.

Capital Project Funds
Capital Projects Funds accounts for capital projects as detailed in the City’s Capital Improvement Plan. As of June 30, 2024, the fund balance was $1.7 million, a $1 million decrease from the prior year, primarily due to capital expenditures and progress on capital projects. 19 100

CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
Non-Major Funds
Non-Major funds are comprised of Special Revenue, Debt Service and Capital Project funds.

Special Revenue funds include:
• Police Grants Fund that accounts for revenues received and expenditures made for police services, • Storm Drain Operating Fund that accounts for the maintenance of the existing storm drain system, • Traffic Mitigation Fund that provides for all proceeds from traffic mitigation fees imposed on new development and restricted to defray the cost of constructing improvements to mitigate traffic, • CZI Grant Fund accounts for proceeds relating to the CZI Grant. These funds can be used to support learning and evaluation activities for groups currently engaged in the operation and implementation of economic advancement centers.
• Opportunity Center Coastside Fund accounts for proceeds and expenditures as they relate to the operation of the Opportunity Center Coastside. This fund is primarily sourced from American Rescue Plan Act (ARPA) funds.

Debt Service Funds include:
• Judgement Bonds Fund account for debt service on the judgment obligation bonds. The City has no outstanding bonds.

Capital Project Funds:
• Library Fund is used to account for the design, development, and construction of the new library and the maintenance thereafter.
• Public Facilities accounts for expenditures related to public facilities improvements. • Storm Drain Improvements accounts for all proceeds from storm drainage improvement fees assessed against new and remodeled construction and used for drainage improvements.

As of June 30, 2024, the Non-Major Funds had a fund balance of $9.5 million, a $647 thousand decrease from the prior year. This decrease is primarily due capital projects and expenditures relating to the Opportunity Center Coastside.

Proprietary Fund Financial Statement Analysis
As of June 30, 2024, the City’s Proprietary Fund net position was $26.9 million ($7.2 million invested in capital assets; $11.4 million restricted for investment in Sewer Authority; $3 thousand restricted for other post-retirement benefits and $8.3 million in unrestricted net position). Additional information on this investment can be found in Note 6 of the financial statements. Unrestricted net position of $4.7 million in the Internal Service Funds is primarily reserved for vehicle and equipment replacement, risk management and general liability claims, and pension cost stabilization. 20 101

CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS

CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City’s total net investment in capital assets for its Governmental and Business-type activities (net of accumulated depreciation) as of June 30, 2024, was $89.7 million, an increase of $4.3 million as compared to June 30, 2023.

Capital assets include land, buildings, equipment, vehicles and infrastructure. The following table presents summarized information on capital assets net of depreciation for fiscal years 2024 and 2023:

Construction in progress increased by $1.5 million primarily due to the improvements to Carter Park, Seymour Ditch, and other capital projects. Additional information regarding the City’s capital assets can be found in Note 4 in Notes to the Basic Financial Statements.

Long-term Obligations
As of June 30, 2024, the City’s long-term obligations totaled $22.9 million, primarily comprised of net pension liability and loans related to the library and the corporation yard. 2024 2023 2024 2023 2024 2023 Variance
Land $ 4,756,385 $ 4,756,385 $ - $ 4,756,385 - $ $ 4,756,385 0% Rights of Way 6,990,396 6,990,396 - 6,990,396 - 6,990,396 0% Construction in progress 11,212,437 9,669,548 - 11,212,437 - 9,669,548 16% Buildings and improvements 28,935,520 29,731,961 6,801,334 6,950,907 35,736,854 36,682,868 -3% Machinery and equipment 410,966 405,419 29,795 30,943 440,761 436,362 1% Infrastructure 30,584,292 26,793,248 - 30,584,292 - 26,793,248 14% Total $ 82,889,996 $ 78,346,957 $ 6,831,129 $ 6,981,850 $ 89,721,125 $ 85,328,807 5% Activities Activities Total

CITY OF HALF MOON BAY
Comparative Statement
Capital Assets (net of depreciation)
Year Ended on June 30, 2024
Governmental Business Type
2024 2023 2024 2023 2024 2023 Variance
Library Loan 2,863,426 3,436,112 - 2,863,426 - 3,436,112 -17% 880 Stone Pine Loan 3,200,000 3,055,896 - 3,200,000 - 3,055,896 5% Claims liability 1,670,731 1,064,830 - 1,670,731 - 1,064,830 57% Employee compensated
absences 670,764 550,966 - - 670,764 550,966 22%
Net Pension Liability 14,029,383 13,296,353 564,424 541,207 14,593,807 13,837,560 5% Total $ 22,434,304 $ 21,404,157 $ 564,424 $ 541,207 $ 22,998,728 $ 21,945,364 5% Activities Activities Total

CITY OF HALF MOON BAY
Comparative Statement
Long Term Obligations
Year Ended on June 30, 2024
Governmental Business-type
21 102

CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
Library Loan: During the fiscal year ending June 30, 2017, the City entered into a $6 million interest-free loan agreement with the County of San Mateo to ensure completion of the Library Project. The City began repayment in fiscal year 2020. In fiscal year 2021, due to budgetary constraints caused by the Covid-19 pandemic, the loan was amended so the City would not be required to make the two loans payments due in that fiscal year. The City resumed loan repayments in fiscal year 2021-2022, including the additional amount that was deferred. Since then, the City continues to make its an annual scheduled payment of $572 thousand.
880 Stone Pine Loan: Since 2009, the City has leased a 21-acre property for its corporation yard facility. In fiscal year 2020-21, the City entered into a $3.2 million financing agreement to purchase the property. In fiscal year 2023-24, the City refinanced the loan with the County of San Mateo to lift restrictions, allowing affordable housing efforts on unused portions of the site to proceed. Under the new loan terms, no payment was due in fiscal year 2023-24, with debt service payments scheduled to begin in fiscal year 2024-25.

Net Pension Liability: The City participates in one retirement plan through the California Public Employees' Retirement System (CalPERS). The measured net pension liability is measured as a proportionate share of the total net pension liability as reported by the CalPERS Financial Office. As of June 30, 2024, the City’s share of the pension liability was measured to be $14.5 million. This is an increase of $756 thousand or 5%.

This increase in net pension liability is from a decrease in the market value of plan assets held at CalPERS.

Additional information about the City’s pension liability can be found in Note 8 to the Notes to the Basic Financial Statements.

State statutes limit the amount of general obligation debt a governmental entity may issue to 15 percent of its total assessed valuation. The current debt limit for the City is approximately $148 million. At June 30, 2024, the City had no debt applicable to this limit. Additional information about the City’s long-term obligations can be found in Note 5 to the Notes to the Basic Financial Statements.

Currently Known Facts, Conditions, and Decisions
Outlined below is key information expected to significantly impact the City’s financial position and operational outcomes as of this report.

Due to rising costs of existing obligations and declining Transient Occupancy Tax revenues, the City is currently facing a structural deficit. In response, staff has initiated a cost allocation and fee study, is exploring revenue enhancement opportunities, and is reviewing all operating expenditures, capital projects and programs, and staff vacancies to identify short- and long-term savings. Additionally, in November 2024, voters approved Measure R, which will increase the sales tax rate by 0.50%. These combined efforts aim to stabilize the City’s finances and ensure sustainable services.

Fiscal sustainability remains a top priority for Half Moon Bay. To that end, staff will continue monitoring these conditions closely and seeking the most efficient ways to provide public services. Staff looks forward to working with the City Council and community to address financial challenges ahead. In addition, staff will continue identifying operational efficiencies, potential economic development opportunities, and alternative revenue options to maintain high-quality services for residents and visitors of Half Moon Bay. 22 103

CITY OF HALF MOON BAY, CALIFORNIA
MANAGEMENT’S DISCUSSION AND ANALYSIS
Requests for Information
This financial report is designed to provide all those with an interest in the government’s finances with a general overview of the City of Half Moon Bay financial position and to show the City's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to:

City of Half Moon Bay
Finance Department
501 Main Street
Half Moon Bay, CA 94019.

An electronic version of this report is available at the City’s website, found at www.hmbcity.com 23 104
105

CITY OF HALF MOON BAY

STATEMENT OF NET POSITION
Governmental Business-Type
Activities Activities Total
Assets
Cash and investments (Note 2) $47,430,393 $4,011,794 $51,442,187 Accounts receivable, net 3,583,032 17,238 3,600,270
Interest receivable 460,922 45,529 506,451
Prepaids
Loan receivable (Note 1r) 300,000 300,000
Land held for resale (Note 1i) 26,823,920 26,823,920
Investment in Sewer Authority
Mid-Coastside (Note 6) 11,397,062 11,397,062
Net OPEB Asset (Note 9) 212,508 10,593 223,101
Capital assets, not depreciated (Note 4) 22,959,218 22,959,218 Capital assets, depreciated, net (Note 4) 59,930,778 6,831,129 66,761,907 Total assets 161,700,771 22,313,345 184,014,116
Deferred outflows of resources
Related to OPEB (Note 9) 78,302 5,290 83,592
Related to pensions (Note 8) 5,308,118 235,072 5,543,190 Total deferred outflows of resources 5,386,420 240,362 5,626,782 Liabilities
Accounts payable 295,288 114,068 409,356
Accrued liabilities 2,790,803 2,790,803
Deposits payable 679,329 679,329
Unearned revenue 75,000 75,000
Claims liabilities, due within one year (Note 11) 1,670,731 1,670,731 Compensated absences (Note 1j):

Due within one year 33,538 33,538
Due in more than one year 637,226 637,226
Long-term debt (Note 5):

Due within one year 847,754 847,754
Due in more than one year 5,215,672 5,215,672
Net pension liability, due in more than one year (Note 8) 14,029,383 564,424 14,593,807 Total liabilities 26,274,724 678,492 26,953,216
Deferred inflows of resources
Related to OPEB (Note 9) 99,786 8,489 108,275
Related to pensions (Note 8) 684,592 68,596 753,188
Total deferred inflows of resources 784,378 77,085 861,463 Net position (Note 7)
Net investment in capital assets 76,826,570 6,831,129 83,657,699 Restricted for:

Investment in Sewer Authority 11,397,062 11,397,062
Other Post-Employment Benefits 191,024 191,024
Capital Projects 8,619,031 8,619,031
Debt Service 6,425 6,425
Housing and Economic Development 6,495,481 6,495,481
Special Revenues 2,506,291 2,506,291
Streets and Roads 7,263,726 7,263,726
Total restricted net position 25,081,978 11,397,062 36,479,040 Unrestricted 38,119,541 3,569,939 41,689,480
Total net position $140,028,089 $21,798,130 $161,826,219 See accompanying notes to financial statements
JUNE 30, 2024
25 106

CITY OF HALF MOON BAY

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2024
Net (Expense) Revenue and
Changes in Net Position
Operating Capital
Charges for Grants and Contributions Governmental Business-type Functions/Programs Expenses Services Contributions and Grants Activities Activities Total Governmental Activities:

General government $7,811,794 $487,874 $348,890 ($6,975,030) ($6,975,030) Public safety 6,875,457 120,980 186,159 (6,568,318) (6,568,318) Public works 6,255,645 432,066 750,133 $6,738,537 1,665,091 1,665,091 Recreation 1,534,752 1,166,447 (368,305) (368,305)
Planning 3,931,872 298,171 (3,633,701) (3,633,701)
Community and economic development 1,894,276 (1,894,276) (1,894,276) Total governmental activities 28,303,796 2,505,538 1,285,182 6,738,537 (17,774,539) (17,774,539) Business-type Activities:

Sewer 6,685,640 6,207,200 1,304,480 $826,040 826,040
Total $34,989,436 $8,712,738 $1,285,182 $8,043,017 (17,774,539) 826,040 (16,948,499) General revenues:

Taxes:
4,283,589 4,283,589
3,665,449 3,665,449
8,167,938 8,167,938
Franchise 992,685 992,685
350,948 350,948
Investment income 2,439,990 242,911 2,682,901
Miscellaneous 652,986 652,986
Transfers (Note 3) 982,301 (982,301)
Total general revenues and transfers 21,535,886 (739,390) 20,796,496 Change in Net Position 3,761,347 86,650 3,847,997
Net Position at beginning of year 136,266,742 21,711,480 157,978,222 Net Position at end of year $140,028,089 $21,798,130 $161,826,219 See accompanying notes to financial statements
Business license tax
Program Revenues
Property
Sales and use
Transient occupancy
26 107
108

CITY OF HALF MOON BAY

GOVERNMENTAL FUNDS

BALANCE SHEET
JUNE 30, 2024
Special Revenue Funds
General Streets and Lot Acquisition Affordable
Fund Road and Retirement Housing
Assets
Cash and investments (Note 2) $13,376,980 $7,483,296 $1,406,966 $5,914,688 Receivables:

Accounts, net 2,842,998 376,279
Interest 130,524 70,942 13,633 53,277
Loan (Note 1r) 300,000
Land held for resale (Note 1i)
Due from other funds (Note 3a) 33,065
Total assets $16,383,567 $7,930,517 $1,420,599 $6,267,965 Liabilities, Deferred Inflows of
Resources and Fund Balances
Liabilities:
$31,961
$1,336,308 559,830 $13,256
679,329
Due to other funds (Note 3a)
75,000
Total Liabilities 2,015,637 666,791 13,256
Deferred Inflows of Resources:

Unavailable revenue - loan 300,000
Fund Balances (Note 7):

Nonspendable
Restricted 7,263,726 $1,420,599 5,954,709
Committed 11,091,587
Assigned
Unassigned 3,276,343
Total fund balances 14,367,930 7,263,726 1,420,599 5,954,709 Total liabilities, deferred inflows of
resources and fund balances $16,383,567 $7,930,517 $1,420,599 $6,267,965 See accompanying notes to financial statements
Unearned revenue
Deposits payable
Accounts payable
Accrued liabilities
28 109
Special Revenue
Fund Capital Projects Funds Non-major
Parks Capital Projects Governmental
Development Land Asset Fund Funds Total
$1,497,897 $1,890,998 $9,438,998 $41,009,823
94,070 38,195 231,490 3,583,032
19,593 24,570 87,589 400,128
300,000
$26,823,920 26,823,920
33,065
$1,611,560 $26,823,920 $1,953,763 $9,758,077 $72,149,968 $223,780 $255,741
493,212 $169,721 $218,476 2,790,803
679,329
33,065 33,065
75,000
716,992 169,721 251,541 3,833,938
300,000
$26,823,920 26,823,920
894,568 9,057,352 24,590,954
11,091,587
1,784,042 449,184 2,233,226
3,276,343
894,568 26,823,920 1,784,042 9,506,536 68,016,030
$1,611,560 $26,823,920 $1,953,763 $9,758,077 $72,149,968 29 110

CITY OF HALF MOON BAY
Reconciliation of the

GOVERNMENTAL FUNDS - BALANCE SHEET
with the

STATEMENT OF NET POSITION
JUNE 30, 2024
Fund balances of governmental funds $68,016,030
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets have not been included as financial resources in governmental fund activity:

Capital assets, non depreciable 22,959,218
Capital assets, depreciated, net 59,568,265
Revenues which are unavailable on the Fund Balance Sheets because they are not available currently are taken into revenue in the Statement of Activities 300,000 Deferred outflows below are not current assets of financial resources and the deferred inflows are not due and payable in the current period and therefore are not reported in the Governmental Funds.

Deferred outflows of resources 5,385,289
Deferred inflows of resources (783,547)

Long-term notes payable (6,063,426)
Compensated absences (670,764)
Net pension liability (14,029,383)
Net OPEB asset 209,742
5,136,665
Net position of governmental activities $140,028,089
See accompanying notes to financial statements
funds. The assets and liabilities of the internal service funds must be added to the statement of net position.

Long-term assets and liabilities that have not been
included in governmental fund activity
Internal service funds are used by management to charge the costs of certain activities, such as equipment management, to individual 30 111
112

CITY OF HALF MOON BAY

GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2024
Special Revenue Funds
General Streets and Lot Acquisition Affordable
Fund Road and Retirement Housing

REVENUES
Taxes $16,991,811 $583,677
License and permits 306,282
Fines and forfeitures 81,445
Charges for services 1,454,141
Rents and leases 78,135
Investment income 804,188 358,662 $72,389 $225,849
Intergovernmental revenues 117,400 1,055,528 4,750,000
Miscellaneous 833,965
Total revenues 20,667,367 1,997,867 72,389 4,975,849

EXPENDITURES
Current:

General government 3,138,896
General administration 2,134,173
Public safety 6,452,977
Public works 2,174,611 236,775
Recreation services 538,827
Planning 2,879,532 1,185,761
Community and economic development 1,008,276
Capital outlay 957,844
Debt service:

Principal 3,628,582
Interest and fees 97,016
Total expenditures 22,052,890 1,194,619 1,185,761
Excess (deficiency) of revenues
over (under) expenditures (1,385,523) 803,248 72,389 3,790,088 Other financing sources (uses):

Transfers in (Note 3) 537,285 40,000
Transfers (out) (Note 3) (4,211,736) (6,746)
Issuance of debt 3,200,000
Total other financing
sources (uses) (474,451) 33,254
Net change in fund balances (1,859,974) 836,502 72,389 3,790,088 Fund balance at beginning of year, as previously reported 16,227,904 6,427,224 1,348,210 Adjustments:

Changes from major to nonmajor fund
Changes from nonmajor to major fund 2,164,621
Fund balances at beginning of year, as adjusted 16,227,904 6,427,224 1,348,210 2,164,621 Fund balances at end of year $14,367,930 $7,263,726 $1,420,599 $5,954,709 See accompanying notes to financial statements
32 113
Special Revenue Debt Service
Fund Fund Capital Projects Funds
(Formerly Major) (Formerly Major)
Judgment Capital Non-Major
Parks Obligation Projects Governmental
Development Bonds Library Land Asset Fund Funds Total
$17,575,488
306,282
81,445
1,454,141
$13,000 91,135
$86,025 $119,363 473,514 2,139,990
1,446,510 236,632 417,649 8,023,719
833,965
1,532,535 355,995 904,163 30,506,165
87,400 3,226,296
2,134,173
23,451 6,476,428
80,757 2,492,143
538,827
4,065,293
886,000 1,894,276
4,477,662 1,649,258 1,350,260 8,435,024
3,628,582
97,016
4,477,662 1,649,258 2,427,868 32,988,058
(2,945,127) (1,293,263) (1,523,705) (2,481,893)
1,250,000 1,250,000 979,613 4,056,898
(961,613) (103,809) (5,283,904)
3,200,000
1,250,000 288,387 875,804 1,972,994
(1,695,127) (1,004,876) (647,901) (508,899)
$6,268 $426,155 $26,823,920 2,788,918 14,476,330 68,524,929 (6,268) (426,155) 432,423
2,589,695 (4,754,316)
2,589,695 26,823,920 2,788,918 10,154,437 68,524,929
$894,568 $26,823,920 $1,784,042 $9,506,536 $68,016,030
33 114

CITY OF HALF MOON BAY
Reconciliation of the

NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS
with the

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2024
Changes in fund balances of governmental funds ($508,899) Amounts reported for governmental activities in the statement of activities are different because:

When capital assets that are to be used in governmental activities are purchased or constructed, the resources expended for those assets are reported as expenditures in governmental funds. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. As a result, fund balance decreases by the amount of financial resources expenses, whereas net position decrease by the amount of 7,112,143
(2,157,388)
Retirements (332,033)
Assets transferred to Internal Service Funds (53,928)
Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position.

Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position.

Financing lease proceeds (3,200,000)
Repayment of debt principal 3,628,582
The amounts below included in the Statement of Activities do not provide or require the use of current financial resources and therefore are not reported as revenue of expenditures in governmental funds (net change).

OPEB expenses (611)
Compensated absences (119,798)
Pension expenses (659,165)
Internal service funds are used by management to charge the costs of certain activities, such as equipment management, to individual funds. The net revenues (expenses) of the internal services funds is reported with governmental activities. (247,556)
Changes in net position of governmental activities $3,761,347 See accompanying notes to financial statements
depreciation expense charged for the year.

Capital asset additions
Depreciation expense
34 115

CITY OF HALF MOON BAY

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
JUNE 30, 2024
Govermental
ActivitiesSewer Internal
Enterprise Service
Fund Funds
Assets:

Current Assets:

Cash and investments (Note 2) $4,011,794 $6,420,570
Accounts receivable 17,238
Interest receivable 45,529 60,794
Total Current Assets 4,074,561 6,481,364
Noncurrent Assets:

Investment in Sewer Authority Mid-Coastside (Note 6) 11,397,062 Net OPEB Asset (Note 9) 10,593 2,766
Non-depreciable capital assets (Note 4)
Depreciable capital assets, net of accumulated depreciation (Note 4) 6,831,129 362,513 Total Non-Current Assets 18,238,784 365,279
Total Assets 22,313,345 6,846,643
Deferred Outflows of Resources
Related to OPEB (Note 9) 5,290 1,131
Related to pensions (Note 8) 235,072
Total Deferred Outflows of Resources 240,362 1,131
Current Liabilities:

Accounts payable 114,068 39,547
Claims liability (Note 11) 1,670,731
Total Current Liabilities 114,068 1,710,278
Noncurrent liabilities:

Net pension liability (Note 8) 564,424
Total Liabilities 678,492 1,710,278
Deferred Inflows of Resources
Related to OPEB (Note 9) 8,489 831
Related to pensions (Note 8) 68,596
Total Deferred Inflows of Resources 77,085 831
Net Position:

Net investment in capital assets 6,831,129 362,513
Restricted for investment in Sewer Authority 11,397,062 Restricted for other post employment benefits 3,066
Unrestricted 3,569,939 4,771,086
Total Net Position $21,798,130 $5,136,665
See accompanying notes to financial statements
Liabilities:
35 116

CITY OF HALF MOON BAY

PROPRIETARY FUNDS

STATEMENT OF REVENUES, EXPENSES AND CHANGES

IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2024
Governmental
ActivitiesSewer Internal
Enterprise Service
Fund Funds
Operating revenues:

Charges for services $6,207,200
Impact fees
Total operating revenues 6,207,200
Operating expenses:

Salaries and wages 305,205 $729,608
6,067,379 53,832
Supplies 343,372
Repairs and maintenance 162,335 43,599
Insurance 1,079,413
Pensions 457,721
Depreciation 150,721 79,683
Other charges 240
Total operating expenses 6,685,640 2,787,468
Total operating income (loss) (478,440) (2,787,468)
Non-operating revenues:

Gain on investment in Sewer Authority Mid-Coastside (Note 6) 1,304,480 Investment income 242,911 276,677
Total non-operating revenues 1,547,391 276,677
Income before contributions and transfers 1,068,951 (2,510,791) Capital contributions 53,928
Transfers in (Note 3) 2,209,307
Transfers (out) (Note 3) (982,301)
Total transfers (982,301) 2,263,235
Change in net position 86,650 (247,556)
Net position at beginning of year 21,711,480 5,384,221
Net position at end of year $21,798,130 $5,136,665
See accompanying notes to financial statements
Contract services
36 117

CITY OF HALF MOON BAY

PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2024
Governmental
ActivitiesSewer Internal
Enterprise Service
Fund Funds
Cash flows from operating activities:

Cash received from customers $6,209,097
Cash payments to suppliers for goods and services (6,250,610) ($912,679) Cash payments to employee services (290,507) (1,187,324) Net cash provided by operating activities (332,020) (2,100,003) Cash flows from non-capital and related financing activities:

Cash collected from other funds 2,209,307
Cash paid to other funds (982,301)
Net cash (used for) non-capital and related financing activities (982,301) 2,209,307 Cash flows from investing activities:

Interest received on investments 240,683 259,013
Net cash provided by investing activities 240,683 259,013 Net increase in cash and cash equivalents (1,073,638) 368,317 Cash and cash equivalents at beginning of year 5,085,432 6,052,253 Cash and cash equivalents at end of year $4,011,794 $6,420,570 Reconciliation of operating income (loss) to net cash provided by (used for) Provided by (used for) operating activities:

Operating income (loss) ($478,440) ($2,787,468)
Adjustments to reconcile operating income (loss) to net cash provided by operating activities:

Depreciation 150,721 79,683
Change in assets and liabilities:

Accounts receivable 1,897 1,212
Accounts payable (20,896) 664
Deferred outflows of resources (3,013)
Deferred inflows of resources (6,705) 5
Claims liability 605,901
Net OPEB asset 1,199
Net pension liability 23,217
Net cash provided by operating activities ($332,020) ($2,100,003) Non-cash transactions:

Gain on investment in Sewer Authority Mid-Coastside $1,304,480 Capital contributions $53,928
See accompanying notes to financial statements
37 118
119

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

1. Significant Accounting Policies
The City of Half Moon Bay (the City) is located next to the Pacific Ocean in San Mateo County, approximately twenty-five miles south of San Francisco. The City and coast side area is a thriving agricultural, fishing and tourism destination. In addition, about 3,000 tons of pumpkins are grown on the coast side each year and the ripening pumpkin heralds the Annual Arts and Pumpkin Festival held in October on the downtown historic Main Street. The annual festival draws more than 200,000 visitors for the two-day event.

The City is a general law city operating under the Council-Manager form of government, with a five-member City Council elected for four-year overlapping terms. The City Manager is appointed by the City Council to serve as administrator of the staff and to carry out the Council's policies.

Fire, water, library and certain sewer services are provided by separate districts or authorities which are not controlled by the City.
a) Blended Component Unit
The financial statements of the City include the financial activities of the City, as well as the Community Development Agency of the City of Half Moon Bay (Agency), which is controlled by and dependent on the City. The Agency is a separate government entity created in 1986 whose purpose is to prepare and implement plans for improvement, rehabilitation, and development of certain areas within the City. The Agency has the same governing board as the City, which also performs all accounting and administrative functions for the Agency, and has a financial relationship with the City. The financial activities of the Agency have been aggregated and merged (termed “blending”) with those of the City. The Agency is currently inactive for the fiscal year ended June 30, 2024. b) Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government. The effect of interfund activity has been eliminated from these statements to minimize the double counting of internal activities. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

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. Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Fund financial statements for the primary government's governmental and proprietary funds are presented after the government-wide financial statements. These statements display information about major funds individually and non-major funds in aggregate for governmental and proprietary funds.
39 120

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

1. Significant Accounting Policies, continued
b) Government-wide and Fund Financial Statements, continued The City reports the following major governmental funds:

The General Fund (Fund 101) is the general operating fund of the City. All general tax revenues and other receipts that are not allocated by law or contractual agreement to some other fund are accounted for in this fund. The major revenue sources for this fund are transient occupancy tax, property taxes, sales taxes, unrestricted revenues from the State, and interest income. Expenditures are made for public safety, planning, building, engineering, and other general government services.

The Streets and Roads Special Revenue Fund was established to account for all proceeds of Gas Tax funds (Fund 122), Measure A Local Transportation Ordinance Tax funds (Fund 124), Main Street Bridge fund (Fund 121) and other grants (Fund 123) that are restricted to purposes of these taxes.

The Lot Acquisition and Retirement Special Revenue Fund (Fund 133) is used to account for in-lieu fees and expenses within the purpose of acquiring and retiring development rights on existing legal parcels.

The Affordable Housing Special Revenue Fund (Fund 126) was established to account for proceeds of construction and development fees, including in lieu fees, whose purpose is for the development of affordable housing for very low, low, and moderate income households to rent or buy.

The Parks Development Special Revenue Fund (Fund 125) was established to account for proceeds of construction and development fees, whose purpose is for the acquisition, development, improvement, and expansion of parks and recreational areas, including equipment for recreation purposes and for capital expenditures such as infrastructure construction projects. In addition, this fund also includes the Library Fund (Fund 113) which accounts for the operations of the public library and is funded by contributions from the City and the San Mateo County Library Joint Powers Authority.

The Land Asset Capital Projects Fund (Fund 154) was established to account for the two land parcels held for resale.

The Capital Projects Fund (Fund 151) is used to fund Capital Improvement Program projects, including construction, technology, and other infrastructure improvements.

The City reports the following major enterprise fund:

The Sewer Enterprise Fund is used to account for the financial activity of the City's sewer utility. The costs of providing these services to the general public are financed or recovered primarily through user charges (Fund 201 is Sewer Operating Fund; Fund 202 is Sewer Capital Fund).
40 121

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

1. Significant Accounting Policies, continued
b) Government-wide and Fund Financial Statements, continued The City also reports the following fund types:

Internal Service Funds:

Internal Service Funds are used to account for financing of goods or services provided by one department or agency to other departments or agencies of the City on a costreimbursement basis. The City operates an Equipment and Vehicle Replacement Fund, a Risk Management Fund, and Pension Stabilization Fund.
c) Basis of Accounting and Financial Statement Presentation The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when the liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal year.

Expenditures generally are recorded when a liability is incurred, as under accrual accounting.

However, debt service expenditures, as well as expenditures related to compensated absences, claims and judgments are not recognized until due. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the government's sewer functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.

Property taxes, sales taxes, transient occupancy taxes, and charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government.

Amounts reported as program revenues include: 1) charges to members, customers or applicants for goods, services, or privileges provided; 2) operating grants and contributions; and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from non-operating items.

Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. 41 122

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

1. Significant Accounting Policies, continued
c) Basis of Accounting and Financial Statement Presentation, continued The principal operating revenues of the Sewer Fund and of the government's Internal Service Funds are charges to customers for services. Operating expenses for the Sewer Fund and Internal Service Funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, and then use unrestricted resources as needed. d) Cash and Investments
Investments are reported in the accompanying statement of net position at fair value. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation, maturity, or sale of investments.

The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund's share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income, earned by the pooled investments, is allocated to the various funds based on each fund's average cash and investment balance.

For purposes of the statement of cash flows, the City considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash equivalents. Cash invested in the City's investment pools is also considered to be cash equivalents.
e) Cash and Investments with Fiscal Agents
The City has monies held by trustees or fiscal agents pledged to the payment or security of certain bonds. The California Government Code provides that these monies, in the absence of specific statutory provisions governing the issuance of bonds, may be invested in accordance with the ordinance, resolutions or indentures specifying the types of investments its trustees or fiscal agents may make.
42 123

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

1. Significant Accounting Policies, continued
f) Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs are inputs – other than quoted prices included within level 1 – that are observable for an asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for an asset or liability.

If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement. g) Interfund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to "due to/from other funds" (i.e., the current portion of interfund loans).
h) Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at estimated acquisition value on the date donated. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not capitalized.

In addition, the City does not capitalize the allocation of capital costs related segments of projects maintained by other entities. The City utilizes a capitalization threshold of $5,000.

Depreciation is charged to operations using the straight-line method over the estimated useful lives of the assets as follows:

Building and Improvements 40 years
Sewer Mains and Laterals 60 years
Infrastructure 20 to 50 years
Vehicles 5 to 10 years
Equipment 5 to 20 years
43 124

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

1. Significant Accounting Policies, continued
i) Land Held for Resale
Lands held for resale are recorded in the Land Asset Capital Projects Fund at the lower of acquisition cost or estimated resale value. Fund balances are reserved in amounts equal to the carrying value of land held for resale since such assets are not available to finance the City's current operations.

Land held for resale of $26,823,920 at June 30, 2024 is stated at the lower of historical cost or net realizable value.
j) Compensated Absences
Depending upon length of employment, City employees earn 12 to 27 vacation days a year.

Sick leave is accrued at the rate of 12 days per year. Employees can carry forward two to three years-worth of earned but unused vacation leave benefits to subsequent years depending on employee group. Upon termination, the City is obligated to compensate employees for all earned but unused vacation days. The earned but unused sick leave benefits are payable for some employees, when vested, in the event of employee termination.

In the government-wide financial statements, a liability is accrued for all earned but unused vacation leave benefits, as well as vested amounts of sick leave relating to the operations of the funds. General Fund is typically used to liquidate the liability for compensated absences.

This liability will be liquidated as either additional cash payments in the event of employee termination or as part of budgeted salary expenditures if used by employees as compensated leave time while still employed by the City. In the fund financial statements, governmental funds report compensated absences only if they have matured, i.e. unused reimbursable leave still outstanding at fiscal year-end following an employee's resignation or retirement. Noncurrent amounts will be recorded as fund expenditures in the year in which they are paid or become due on demand to terminated employees.

The changes in compensated absences for the year ended June 30, 2024 is as follows:

Beginning Balance $550,966
Additions 640,588
Payments (520,790)
Ending Balance $670,764
Current Portion $33,538
Non-current Portion $637,226
44 125

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

1. Significant Accounting Policies, continued
k) Long-term Obligations
In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as service expenditures.
l) Claims and Judgments
The City records a liability for litigation, judgments and claims when it is probable that an asset has been impaired, or a liability has been incurred prior to year-end and the probable amount of loss (net of any insurance coverage) can be reasonably estimated. This liability is recorded in the Internal Service Funds, which account for the City's risk management activities.
m) Property Taxes
State of California (State) Constitution Article XIIIA provides that the combined maximum property tax rate on any given property may not exceed 1% of its assessed value ($1 per $100 of assessed value) plus an additional amount for general obligation debt approved by voters.

Assessed value is calculated at 100% of market value as defined by Article XIIIA and may be adjusted by no more than 2% per year unless the property is sold or transferred. The state legislature has determined the method of distribution of receipts from the $1.00 tax levy among the counties, cities, school districts and other districts.

The County of San Mateo assesses properties and bills for and collects property taxes as follows:

Secured Unsecured
Valuation/lien dates January 1 January 1
Levy dates On or before November 1 July 1
Due dates (delinquent after) 50% on November 1 (December 10) July 1 (August 31) 50% on February 1 (April 10)
The term "unsecured" refers to taxes on personal property other than land and buildings.

These "unsecured" taxes are secured by liens on the personal property being taxed. The County of San Mateo distributes to the City the entire amount of each year's levy and in return receives all penalties and interest on delinquent payments. 45 126

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

1. Significant Accounting Policies, continued
n) Estimates
The preparation of basic financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
o) Pensions and OPEB (Other Post-Employment Benefits)
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the OPEB Plan and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis as they are reported in the OPEB Trust Fund. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. p) Leases
As clarified by the Government Accounting Standards Board (GASB) Statement No. 87, a lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. The City recognizes lease receivables or liabilities with an initial, individual value of $200,000 or more, based on the future lease payments remaining at the start of the lease.

The City has no leases subject to GASB #87 for the fiscal year 2024. q) Subscription-Based Information Technology Arrangements (SBITAs) Accounting As clarified by the Government Accounting Standards Board (GASB) Statement No. 96, a Subscription-Based Information Technology Arrangement (SBITA) is a contract that conveys control of the right to use another party’s (a SBITA vendor’s) IT software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction. 46 127

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

1. Significant Accounting Policies, continued
q) Subscription-Based Information Technology Arrangements (SBITAs) Accounting, continued
At the commencement of a SBITA, the City initially measures the subscription liability at the present value of payments expected to be made during the contract term. Subsequently, the subscription liability is reduced by the principal portion of payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for payments made at or before the SBITA commencement date, plus certain initial direct costs.

Subsequently, the subscription asset is amortized on a straight‐line basis over the shorter of the subscription term or the useful life of the underlying IT assets. The City recognizes SBITA liabilities with an initial, individual value of $200,000 or more for all funds, based on the future SBITA payments remaining at the start of the contract.

Key estimates and judgments related to SBITAs include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments as follows:
• The City uses the interest rate charged by the IT vendor as the discount rate. When the interest rate charged by the IT vendor is not provided, the City uses its estimated incremental borrowing rate as the discount rate for subscription liabilities. • The subscription term includes the noncancellable period of the subscription. • Subscription payments included in the measurement of the subscription 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 subscription and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability. Subscription assets are reported with other capital assets and subscription liabilities are reported with liabilities on the statement of net position.

The City has no SBITA subject to GASB #96 for the fiscal year 2024. r) Loan Receivable
In June 2020, the City loaned $300,000 from the Affordable Housing Special Revenue Fund to the Abundant Grace Coastside Worker (AGCW) for the acquisition of property for the development of a workforce Development Center. The loan is secured by a recorded deed of trust on the property, does not bear interest and is due December 31, 2034.

47 128

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

1. Significant Accounting Policies, continued
s) New GASB Pronouncement
Management adopted the provisions of the following Governmental Accounting Standards Board (GASB) Statement, which became effective during the year ended June 30, 2024.

Effect of New Governmental Accounting Standards Board (GASB) Pronouncements GASB 100 – Accounting for Changes and Error Corrections The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability.

This Statement defines accounting changes as changes in accounting principles, changes in accounting estimates, and changes to or within the financial reporting entity and describes the transactions or other events that constitute those changes. As part of those descriptions, for (1) certain changes in accounting principles and (2) certain changes in accounting estimates that result from a change in measurement methodology, a new principle or methodology should be justified on the basis that it is preferable to the principle or methodology used before the change. That preferability should be based on the qualitative characteristics of financial reporting—understandability, reliability, relevance, timeliness, consistency, and comparability. This Statement also addresses corrections of errors in previously issued financial statements.

This Statement prescribes the accounting and financial reporting for (1) each type of accounting change and (2) error corrections. This Statement requires that (a) changes in accounting principles and error corrections be reported retroactively by restating prior periods, (b) changes to or within the financial reporting entity be reported by adjusting beginning balances of the current period, and (c) changes in accounting estimates be reported prospectively by recognizing the change in the current period. The requirements of this Statement for changes in accounting principles apply to the implementation of a new pronouncement in absence of specific transition provisions in the new pronouncement. This Statement also requires that the aggregate amount of adjustments to and restatements of beginning net position, fund balance, or fund net position, as applicable, be displayed by reporting unit in the financial statements.

This Statement requires disclosure in notes to financial statements of descriptive information about accounting changes and error corrections, such as their nature. In addition, information about the quantitative effects on beginning balances of each accounting change and error correction should be disclosed by reporting unit in a tabular format to reconcile beginning balances as previously reported to beginning balances as restated.

Furthermore, this Statement addresses how information that is affected by a change in accounting principle or error correction should be presented in required supplementary information (RSI) and supplementary information (SI). For periods that are earlier than those included in the basic financial statements, information presented in RSI or SI should be restated for error corrections, if practicable, but not for changes in accounting principles.

The requirements of this Statement are effective for reporting periods beginning after June 15, 2023, and all reporting periods thereafter. The City implemented the provisions of the Statement, but it did not have an effect on the fiscal year 2024 financial statements. 48 129

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

1. Significant Accounting Policies, continued
t) Renamed Fund
The ARPA Special Revenue Fund was renamed to the Opportunity Center Coastside Special Revenue Fund.

2. Cash, Cash Equivalents, and Investments
Cash and investments as of June 30, 2024 consist of the following:

Cash on hand $292
Deposits with financial institutions 1,036,632
Investments 50,405,263
Total cash and investments $51,442,187
a) Custodial Credit Risk - Deposits
Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned. The City does not have a policy for custodial credit risk on deposits. As of June 30, 2024, the carrying amount of the City's deposits was $1,036,632 and the bank balance was $3,084,952. The difference between the bank balance and the carrying amount represents outstanding checks and deposits in transit. Of the bank balance, $250,000 was covered by federal depository insurance and the balance was collateralized by the pledging financial institutions as required by Section 53652 of the California Government Code.

Under the California Government Code, a financial institution is required to secure deposits in excess of $250,000 made by state or local governmental units by pledging securities held in the form of an undivided collateral pool. The fair value of the pledged securities in the collateral pool must equal at least 110% 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% of the secured public deposits. Such collateral is considered to be held in the name of the City.
49 130

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

2. Cash, Cash Equivalents, and Investments, continued
b) Investments Authorized by the City's Investment Policy The City maintains a cash and investment pool that is available for use by all funds. 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 that address interest rate risk, credit 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.

Minimum Maximum Maximum
Maximum Credit Percentage Investment
Authorized Investment Type Maturity Quality Allowed In One Issuer U.S. Treasury Obligations 5 Years None None None
U.S. Government Sponsored
Enterprise Obligations 5 Years None None None
Bankers' Acceptances 180 Days None 20% 5%
Commercial Paper 180 Days Highest Rating 15% 2%
Negotiable Certificates of Deposit 2 Years None 30% None Repurchase Agreements 1 year None 10% 5%
California Local Agency Investment Fund None None None $75 million per account San Mateo County Investment Pool None None None None
Time Certificates of Deposit 2 years None 10% None
Medium-Term Corporate Notes 5 Years Highest Rating 10% 10% (A) Money Market Mutual Funds None Highest Rating 20% 5%
(A) Commercial paper holdings are to be included when calculating the 10% limitation. c) 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 bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Minimum Maximum Maximum
Maximum Credit Percentage Investment
Authorized Investment Type Maturity Quality Allowed In One U.S. Treasury Obligations None None No Limit No Limit
U.S. Agency Securities None None No Limit No Limit
State Obligations None AAA No Limit No Limit
Municipal Obligations None AAA No Limit No Limit
Bankers' Acceptances 360 Days A1 No Limit No Limit
Commercial Paper 270 Days A1+ No Limit No Limit
Money Market Mutual Funds None Aam No Limit No Limit
California Local Agency Investment Fund None None No Limit No Limit Repurchase Agreements None None No Limit No Limit
50 131

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

2. Cash, Cash Equivalents, and Investments, continued
d) Fair Value Hierarchy
The City adopted GASB Statement No. 72, Fair Value Measurement and Applications, which required governmental entities to measure investments at fair value. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation input used to measure the fair value of asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

Total
Investments exempt from Fair Value Hierarchy:

San Mateo County Investment Pool $42,234,178
California Local Agency Investment Fund 8,171,085
Total Investments $50,405,263
e) 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 to changes in market interest rates. The City monitors the interest rate risk inherent in its portfolio by measuring the weighted average maturity of its portfolio.

The City has no specific limitations with respect to this metric. 12 Months
Investment Type Or Less Total
Available for Operations
California Local Agency Investment Fund $8,171,085 $8,171,085 San Mateo County Investment Pool 42,234,178 42,234,178
Total Investments $50,405,263 $50,405,263
Remaining Maturity (in Months)
f) Custodial Credit Risk - Investment
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 investments. All of the City’s investments in securities are held in the name of the City. The City’s custody agreement policy prohibits counterparties holding securities not in the City’s name.

51 132

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

2. Cash, Cash Equivalents, and Investments, continued
g) Credit Risk – Investments
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 ratings by nationally recognized statistical rating organization (S&P).

Investment Type AA Not Rated Total
Held by City
California Local Agency Investment Fund $8,171,085 $8,171,085 San Mateo County Investment Pool $42,234,178 42,234,178 Total Investments $42,234,178 $8,171,085 $50,405,263
h) Investments in San Mateo County Investment Pool
The City is also a voluntary participant in the San Mateo County Investment Fund (County Pool) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the County of San Mateo. The City reports its investment in the County Pool at the fair value amount provided by the County. The balance available for withdrawal is based on the accounting records maintained by the County Pool which are recorded on an amortized cost basis. Included in the County Pool's investment portfolio are U.S. Treasury Notes, Obligations issued by agencies of the United States Government, LAIF, Corporate Notes, Commercial Paper, collateralized mortgage obligations, mortgage-backed securities, repurchase agreements, other asset-backed securities, and floating rate securities issued by federal agencies, government-sponsored enterprises, and corporations. At June 30, 2024, these investments matured in an average of 1.64 years.
i) Investments in State Treasurer’s Local Agency Investment Pool The City is also a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code 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. At June 30, 2024, these investments matured in an average of 217 days.

3. Interfund Transactions
a) Current Balances
Current interfund balances arise in the normal course of business and are expected to be repaid shortly after the end of the fiscal year. The purpose of these balances is to eliminate negative cash balances at year end in various funds. At June 30, 2024, the Opportunity Center Coastside Special Revenue Fund owed the General Fund $33,065. 52 133

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

3. Interfund Transactions, continued
b) Transfers
Transfers between funds during the fiscal year ended June 30, 2024, were as follows:

Transfer To Transfer From Amount
General Fund Sewer Enterprise Fund $537,285 (a)
Streets and Road Special Revenue Fund General Fund 40,000 (b) Parks Development Special Revenue Fund General Fund 950,000 (b) Capital Projects Fund 300,000 (b)
Capital Projects Fund General Fund 1,250,000 (b)
Non-Major Governmental Funds General Fund 218,000 (b)
Capital Projects Fund 661,613 (b)
Non-Major Governmental Funds 100,000 (b)
Internal Service Funds General Fund 1,753,736 (c)
Streets and Roads Special Revenue Fund 6,746 (c)
Non-Major Governmental Funds 3,809 (c)
Sewer Enterprise Fund 445,016 (c)
$6,266,205
Interfund transfers were principally used for the following purposes:
(a) Sewer management expenditures
(b) Capital program expenditures
(c) Program expenditures

4. Capital Assets
a) Capital Assets Activity
A Summary of changes in capital assets for the year ended June 30, 2024, is as follows:

Balance Balance
June 30, 2023 Additions Transfers Retirements June 30, 2024 Governmental activities:

Capital assets not being depreciated:

Land $4,756,385 $4,756,385
Rights of way 6,990,396 6,990,396
Construction in progress 9,669,548 $6,269,995 ($4,395,073) ($332,033) 11,212,437 Total capital assets not being depreciated 21,416,329 6,269,995 (4,395,073) (332,033) 22,959,218 Capital assets being depreciated:

Buildings & improvements 38,456,364 112,382 11,241 38,579,987 Machinery & equipment 1,461,878 97,343 1,559,221
Infrastructure 45,419,176 632,423 4,383,832 50,435,431
Total capital assets being depreciated 85,337,418 842,148 4,395,073 90,574,639 Less accumulated depreciation for:

Buildings & improvements 8,724,403 920,064 9,644,467
Machinery & equipment 1,056,459 91,796 1,148,255
Infrastructure 18,625,928 1,225,211 19,851,139
Total accumulated depreciation 28,406,790 2,237,071 30,643,861 Net depreciable assets 56,930,628 (1,394,923) 4,395,073 59,930,778 Governmental activities capital assets, net $78,346,957 $4,875,072 ($332,033) $82,889,996 53 134

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

4. Capital Assets, continued
a) Capital Assets Activity, continued
Balance Balance
June 30, 2023 Additions June 30, 2024
Business-type activities:

Capital assets being depreciated:

Buildings & improvements $9,099,769 $9,099,769
Machinery & equipment 763,646 763,646
Total capital assets being depreciated 9,863,415 9,863,415 Less accumulated depreciation for:

Buildings & improvements 2,148,862 $149,573 2,298,435
Machinery & equipment 732,703 1,148 733,851
Total accumulated depreciation 2,881,565 150,721 3,032,286 Net depreciable assets 6,981,850 (150,721) 6,831,129
Business-type activities capital assets, net $6,981,850 ($150,721) $6,831,129 b) Depreciation
Depreciation expense was charged to governmental functions as follows:

Governmental Activities:

General government $107,227
Recreation 820,003
Public safety 20,288
Public works 1,209,870
Depreciation on capital assets held by the City's
Internal Service Funds is charged to the various
functions based on their usage of the assets 79,683
Total Governmental Activities $2,237,071
Business-Type Activities:

Sewer Fund $150,721

54 135

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

5. Long-Term Debt
The following is a summary of long-term debt transactions for the year ended June 30, 2024:

Original Issue Balance Balance Current
Amount June 30, 2023 Additions Retirements June 30, 2024 Portion Governmental Activity Debt
Direct borrowings:

San Mateo County Advance $5,726,855 $3,436,112 $572,686 $2,863,426 $572,686 iBank Financing Agreement A & B 3,200,000 3,055,896 3,055,896 San Mateo County Loan 3,200,000 $3,200,000 3,200,000 275,068 Total Governmental Activity $6,492,008 $3,200,000 $3,628,582 $6,063,426 $847,754 a) Library Loan – Advance Agreement with the County of San Mateo During the fiscal year ended June 30, 2017, the City entered into a $6 million Interest-free loan agreement with the County of San Mateo to ensure completion of the Library Project.

The Project includes design, environmental review, demolition of existing library, construction, and construction management. The terms of repayment are directly from the property tax apportionments in two installments on December 15 and April 15 per fiscal year for a ten-year period beginning no later than December 15, 2019 and final payment is to be made no later than April 15, 2030. As of June 30, 2024, the City had drawn down $5,726,855. Repayments began in fiscal year 2020.
b) Financed Purchase – Financing Agreement with the California Infrastructure and Economic Development Bank
During fiscal year ended June 30, 2021, the City entered into a $3.2 million financed purchase agreement with the California Infrastructure and Economic Development Bank (iBank) for the 880 Stone Pine Road property purchase and related construction costs. The City plans to upgrade and restore the Corporation yard. This will then be used to store the City’s vehicles, equipment, and supplies. The terms of repayment are directly from the rental income with two interest payments due on August 1 and February 1 every fiscal year with one annual principal payment due on August 1 of each year. The first principal payment is due in August 2022. The City repaid the outstanding balance of the loan during fiscal year 2024 with the proceeds of the new agreement with the County of San Mateo discussed below. 55 136

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

5. Long-Term Debt, continued
c) Financed Purchase Agreement with the County of San Mateo In August 2023, the City entered into a Memorandum of Understanding (MOU) with the County of San Mateo related to an affordable housing development at a portion of 880 Stone Pine Road. Under the terms of the MOU, in September 2023 the City and the County also entered into a lease and sublease agreement under which the County made a one-time upfront lease payment to the City in the amount of $3.2 million that the City used to discharge the iBank Loan discussed above to remove financing restrictions and continue affordable housing efforts at the location. The lease is for property at Correas Street and Purissima Street that will be used for as a library and other recreational functions and simultaneously, the City will sublease the property back from the County with annual rental payments over a lease term of 10 years, at a fixed interest rate of 3.13% per year. The Sublease is secured by secured property taxes collected by the General Fund. While the pledge of repayment is from the secured property taxes, repayment can be made from any source. Under the terms of the sublease, The City is also responsible for paying the County’s costs associated with the property that will be billed periodically and are due within 30 days of receipt of the invoice.

To terminate the Sublease after having fully paid all installment payments through and including the year seven payment, the City may make prepay the sublease at any time with five days’ notice to the County. The sublease bears an interest rate of 3.13%. Interest and principal on the sublease is payable semi-annually December 30 and April 30 through 2033, with the first payment due in December 2024. The County did not bill the City for any additional costs incurred during the year ended June 30, 2024. d) Debt Service
As of June 30, 2024, annual debt service to maturity for the private placements is as follows:

Governmental Activities
Year ending Direct Borrowings
June 30 Principal Interest Total
2025 $847,754 $98,024 $945,778
2026 856,431 89,347 945,778
2027 865,381 80,397 945,778
2028 874,614 71,164 945,778
2029 884,135 61,640 945,775
2030-2033 1,735,111 130,348 1,865,459
Total $6,063,426 $530,920 $6,594,346

56 137

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

6. Investment in Sewer Authority Mid-Coast side
The City, along with the Montara Water and Sanitary District and El Granada Sanitary District, established the Sewer Authority Mid-Coastside (SAM) in 1976 to build and operate a sewage treatment facility for its members. SAM is controlled by a six-member board consisting of two representatives from each member. The board appoints management and employees of SAM and is responsible for SAM's budget, operations and finances. As one of SAM's member agencies, the City makes contributions to SAM in the form of collections assessments and operations and maintenance assessments. The City exercises significant influence over SAM's operations; therefore, the City's share of SAM's net position has been recorded as an investment in the City's financial statements. The City's share of SAM's net position is calculated annually, based on the proportion of SAM's total assessed valuation within the City limits. Complete financial statements for SAM can be obtained from the SAM at 1000 North Cabrillo Highway, Half Moon Bay, California 94019-1466. Based on SAM’s audited financial statements for June 30, 2023, the City recorded its investment in SAM in the amount of $11,397,062 at June 30, 2024.

7. Net Position/Fund Balances
a) Fund Balances
In the fund financial statements, governmental funds report the following fund balance classifications: non-spendable, restricted, committed, assigned, and unassigned. The City Council, as the highest level of decision-making authority for the City, has the ability to commit fund balances through the adoption of a formal resolution. The same action must be taken to modify or rescind the commitment. The City Council has approved a policy (Resolution No. C44-11) authorizing the City Manager to assign fund balances for specific purposes up to $8,000,000. Assignments of amounts over $8,000,000 require the approval of City Council. b) Stabilization Arrangements
City Council adopted a resolution (No. C-44-11) to establish a contingency reserve in the amount of 30% of the following fiscal year’s budgeted operating expenditures. City Council adopted a resolution (No. C-2020-60) that renamed the reserve to the General Fund Reserve and revised the policy to a minimum of 30% of the budgeted annual General Fund operating expenditures with no maximum. Changes to the reserve amount require City Council approval.

Appropriations from the General Fund Reserve commitment can only be made for the following specific circumstances:

1. Meeting cash flow needs during the fiscal year.

2. Closing a projected short-term revenue-expenditure gap.

3. Responding to unexpected expenditure requirements or revenue shortfalls.

4. When an economic downturn results in a short-term budgetary shortfall and where reasonable cuts to expenditures are not adequate to meet revenue without the use of the reserve.

5. Unfunded liabilities such as self-insurance, pensions and retiree health obligations.

6. Institutional changes, such as State budget takeaways and unfunded mandates. 57 138

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

7. Net Position/Fund Balances, continued
b) Stabilization Arrangements, continued
The City Council also established an Economic Uncertainty Reserve in the amount of a minimum of 20% of the budgeted annual General Fund operating expenditures with no maximum. Funds held in the Economic Uncertainty Reserve assignment are held for the following uses:

1. When a fiscal forecast shows an ongoing structural gap due to an economic downturn to providing a strategic bridge to future economic stability.

2. When during a declared emergency, expenditures exceed revenues and where the reserve will meet economic shortfalls due to a related economic downturn.

3. When an economic downturn results in a long-term budgetary shortfall and where reasonable cuts to expenditures are not adequate to meet revenue without the use of the reserve.

4. Where its use will prevent a reduction of required services.

The reserves can only be used in accordance with the policies above and at the direction of the City Council. It is the intent of the City to limit use of the reserves to address unanticipated, non-recurring needs or known, planned future obligations. Reserves shall not normally be applied to recurring annual operating expenditures. The reserves may, however, be used to allow time for the City to restructure its operations in a deliberate manner (such as might be required in the case of a severe economic downturn), but such use will only take place in the context of an adopted long-term plan to reach a sustainable structure.

The General Fund Reserve and Economic Uncertainty Reserve will be funded from excess ongoing and one-time funds when available. If reserve fund balances fall below established thresholds, the City will replenish reserves in the priority of the General Fund Reserve, followed by the Economic Uncertainty Reserve. Where funding of the General Fund Reserve and Economic Uncertainty Reserve exceeds the established thresholds, the City Council may authorize the use of those funds for any budgetary need.

In the event the City Council authorizes use of the reserves, the City Manager is to propose a plan for the replenishment of the reserves to the City Council during City budget hearings. The City will make every reasonable effort to fully replenish the reserves within five years. If, based on the Finance Director’s analysis and forecasting, the target balance is not being met or is likely not going to be met at some point within a five-year period, a plan to meet the target balance will be developed and presented to the City Council for consideration.
58 139

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

7. Net Position/Fund Balances, continued
c) Classifications
As prescribed by GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. As of June 30, 2024, fund balances for government funds are made up of the following:
• Non-spendable Fund Balance – includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The "not in spendable form" criterion includes items that are not expected to be converted to cash, for example:
inventories, prepaid amounts, long-term notes receivable and land. • Restricted Fund Balance – includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation.

Restrictions may effectively be changed or lifted only with the consent of resource providers. • Committed Fund Balance – includes amounts that can only be used for the specific purposes determined by a formal action (resolution) of the City's highest level of decision-making authority, the City Council. Commitments may be changed or lifted only by the City taking the same formal action that imposed the constraint originally. • Assigned Fund Balance – comprises amounts intended to be used by the City for specific purposes that are neither restricted nor committed. Intent is expressed by (a) the City Council or (b) the City Manager. The City Council has delegated the authority for the City Manager to assign amounts of up to $8 million to be used for specific purposes (Resolution C-44-11). • Unassigned Fund Balance – is the residual classification and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. General Fund is the only fund that reports a positive unassigned fund balance. d) Policies
The standard also requires governments to disclose the accounting policies that indicate the order in which restricted, committed, assigned and unassigned amounts are spent.

The City considers restricted amounts to have been spent first when an expenditure is incurred for purposes of which both restricted and unrestricted fund balance is available. Additionally, the City considers committed amounts to have been spent first, assigned amounts to have been spent second, and unassigned amounts to have been spent last when an expenditure is incurred for purposes of which committed, assigned, and unassigned fund balance is available.

In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is generally depleted in the order of restricted, committed, assigned, and unassigned.
59 140

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

7. Net Position/Fund Balances, continued
d) Policies, continued
Fund balances for all the major and non-major governmental funds as of June 30, 2024, were distributed as follows:

Non-major
General Streets and Lot Acquisition Affordable Parks Land Capital Governmental Fund Roads and Retirement Housing Development Asset Projects Funds Total Nonspendable:

Land held for resale $26,823,920 $26,823,920
Total nonspendable 26,823,920 26,823,920
Restricted:

Streets & roads $7,263,726 7,263,726
Community development $1,420,599 1,420,599
Economic/Community Grants $240,772 240,772
Park development improvements $894,568 894,568
Debt service 6,425 6,425
Police grants 1,085,692 1,085,692
Storm drain
maintenance improvements 1,654,713 1,654,713
Traffic mitigation 4,561,540 4,561,540
Affordable housing $5,954,709 5,954,709
Public facilities 1,508,210 1,508,210
Total restricted 7,263,726 1,420,599 5,954,709 894,568 9,057,352 24,590,954 Committed:

General Fund reserve $6,654,952 6,654,952
Economic uncertainty reserve 4,436,635 4,436,635
Total committed 11,091,587 11,091,587
Assigned:

San Mateo County Library 449,184 449,184
Capital projects $1,784,042 1,784,042
Total assigned 1,784,042 449,184 2,233,226
Unassigned: 3,276,343 3,276,343
Total Fund Balances $14,367,930 $7,263,726 $1,420,599 $5,954,709 $894,568 $26,823,920 $1,784,042 $9,506,536 $68,016,030 e) Net Position
Net Position is the excess of all assets and deferred outflows of resources over all liabilities and deferred inflows of resources. Net Position is divided into three categories. These categories apply only to Net Position, which is determined only at the Government-wide level, and are described below:

Net Investment in Capital Assets describes the portion of Net Position which is represented by the current net book value of the City's capital assets, less the outstanding balance of any debt issued to finance these assets.

Restricted describes the portion of Net Position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt service requirements, and successor agency assets.

Unrestricted describes the portion of Net Position which is not restricted as to use.

60 141

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

7. Net Position/Fund Balances, continued
f) Net Investment in Capital Assets
The balances related to Net Investment in Capital Assets are comprised of the following as of June 30, 2024:

Governmental Business-Type
Activities Activities Total
Capital Asset, net of accumulated depreciation: $82,889,996 $6,831,129 $89,721,125 Less: Capital debt: (6,063,426) (6,063,426)
$76,826,570 $6,831,129 $83,657,699

8. Pension Plans
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension 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. 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. a) General Information about the CalPERS Pension Plan
Plan Description – All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety and Miscellaneous Employee Pension Rate Plans.

The City’s Safety and Miscellaneous Rate Plans are part of the public agency cost-sharing multiple-employer defined benefit pension plan (PERF C), which is administered by the California Public Employees’ Retirement System (CalPERS). PERF C consists of a miscellaneous pool and a safety pool (also referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Individual employers may sponsor more than one miscellaneous and safety rate plan. The employer participates in one cost-sharing multiple-employer defined benefit pension plan regardless of the number of rate plans the employer sponsors. The City sponsors three rate plans (two miscellaneous and one safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
61 142

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

8. Pension Plans, continued
a) General Information about the CalPERS Pension Plan, continued Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plan’s provisions and benefits in effect at June 30, 2024, are summarized as follows:

Miscellaneous
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 2% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 - 63 52 - 67
Monthly benefits, as a % of eligible compensation 1.426% to 2.418% 1.000% to 2.500% Required employee contribution rates 7% 8.25%
Required employer contribution rates 13.26% 8.00%
Required UAL Contribution $455,753 $0
Safety
Hire date
Prior to
January 1, 2013
Benefit formula 3% @ 50
Benefit vesting schedule 5 years service
Benefit payments monthly for life
Retirement age 50
Monthly benefits, as a % of eligible compensation 3%
Required employee contribution rates 0%
Required employer contribution rates 0%
Required UAL Contribution $457,721
Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability (UAL). The dollar amounts are billed on a monthly basis or can be paid in a lump sum reduced amount. The City elected to make the lump sum contributions and the required contribution for the unfunded liability was $913,474 in fiscal year 2024, as show in the table above.

62 143

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

8. Pension Plans, continued
a) General Information about the CalPERS Pension Plan, continued Contributions – Section 20814(c) of the California Public Employees’ Retirement Law 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. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. 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 City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.

For the year ended June 30, 2024, the contributions recognized as part of pension expense for the Plan were as follows:

Miscellaneous Safety Total
Contributions - employer $937,025 $457,721 $1,394,746
b) Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension 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. 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. The governmental activities net pension liability is liquidated primarily by the General Fund.

As of June 30, 2024, the City reported net pension liability for its proportionate share of the net pension liability of the Plan as follows:

Proportionate Share
of Net Pension Liability
Miscellaneous $7,314,381
Safety 7,279,426
Total Net Pension Liability $14,593,807

63 144

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

8. Pension Plans, continued
b) Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions, continued
The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2023, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined.

The City’s proportionate share of the net pension liability for the Plan as of June 30, 2022, and 2023 was as follows:

Miscellaneous Safety Total
Proportion - June 30, 2022 0.14468% 0.10285% 0.24753%
Proportion - June 30, 2023 0.14628% 0.09738% 0.24366%
Change - Increase (Decrease) 0.00160% (0.00547%) (0.00387%) For the year ended June 30, 2024, the City recognized pension expense of $3,542,329 for Miscellaneous Rate Plan and $828,716 for Safety Rate Plan, with a total pension expense of $4,371,045.

At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Safety Total
Deferred Outflows Deferred Inflows Deferred Outflows Deferred Inflows Deferred Outflows Deferred Inflows of Resources of Resources of Resources of Resources of Resources of Resources Pension contributions subsequent to measurement date $937,025 $457,721 $1,394,746 Changes in assumptions 441,602 424,837 866,439
Differences between actual and expected experience 373,658 ($57,963) 534,444 ($45,754) 908,102 ($103,717) Net change in Proportion DIDO and Net Pension Liability 52,367 (154,471) 20,506 (183,644) 72,873 (338,115) Net difference in actual contribution and proportion contributions 83,629 (62,753) 36,950 (248,603) 120,579 (311,356) Net differences between projected and actual earnings on plan investments 1,184,264 996,187 2,180,451
Total $3,072,545 ($275,187) $2,470,645 ($478,001) $5,543,190 ($753,188) $1,394,746 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the following fiscal year. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year Ended
June 30 Miscellaneous Safety Total
2025 $525,464 $420,821 $946,285
2026 367,828 319,321 687,149
2027 933,060 766,976 1,700,036
2028 33,981 27,805 61,786
Total $1,860,333 $1,534,923 $3,395,256
64 145

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

8. Pension Plans, continued
b) Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions, continued
Actuarial Assumptions – For the measurement period ended June 30, 2023, the total pension liability was determined by rolling forward the June 30, 2022 total pension liability. The June 30, 2022 total pension liability was based on the following actuarial methods and assumptions:

Miscellaneous & Safety
Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Projected Salary Increases Varies by Entry Age, Service and Type of Employment Investment Rate of Return 6.90% net of pension plan investment expenses, including inflation
Mortality Derived using CalPERS Membership Data for all Funds (1) Post Retirement Benefit Increase Lessor of the contract COLA up to 2.30% until Purchasing Power applies, 2.30% thereafter
(1) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full 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 2021 experience study report from November 2021 that can be found on the CalPERS website.

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2022 valuation were based on the results of a November 2021 actuarial experience study for the period 2001 to 2019. Further details of the Experience Study can be found on the CalPERS website.

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.

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.

65 146

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

8. Pension Plans, continued
b) Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions, continued
In determining the long-term expected rate of return, CalPERS took into account both shortterm and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 basis points.

The table below reflects the long-term expected real rate of return by asset class.

Asset Class(a)
Assumed
Asset
Allocation Real Return (1), (2)
Global Equity-Cap-Weighted 30.0% 4.54%
Global Equity-Non-Cap-Weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-Backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.0% -0.59%
Total 100%
(1) An expected inflation of 2.30% used for this period. (2) Figures are based on the 2021 Asset Liability Management study. 66 147

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

8. Pension Plans, continued
b) Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions, continued
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - The following presents the City’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Miscellaneous Safety Total
1% Decrease 5.90% 5.90% 5.90%
Net Pension Liability $10,880,761 $10,378,120 $21,258,881 Current Discount Rate 6.90% 6.90% 6.90%
Net Pension Liability $7,314,381 $7,279,426 $14,593,807 1% Increase 7.90% 7.90% 7.90%
Net Pension Liability $4,378,944 $4,746,022 $9,124,966
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. c) Deferred Compensation Plans
City employees may defer a portion of their compensation under two separate, optional City sponsored Deferred Compensation Plans created in accordance with Internal Revenue Code Section 457. Under these Plans, participants are not taxed on the deferred portion of their compensation until distributed to them; distributions may be made only at termination, retirement, death or in an emergency as defined by the Plans.

The Plans are part of public agency agent multiple-employer defined contribution plans that are administered by Mission Square Retirement (formerly ICMA RC) and California Public Employees Retirement System. Benefit provisions under the Plans are established by City resolution. The City has no liability for any losses incurred by the Plans and does not participate in any gains, but does have the duty of due care that would be required of an ordinary prudent investor. The City has contracts with each company to manage and invest the assets of the Plans. The administrators pool the assets of each Plan with those of other participants and do not make separate investments for the City. The assets in each Plan are the sole property of the participants or their beneficiaries. Since the assets held under each Plan are not the City’s property and are not subject to claims by general creditors of the City, they have been excluded from these financial statements. The Plans require investments to be stated at fair value and it requires all gains and losses on Plan investments to accrue directly to participant accounts.
67 148

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

8. Pension Plans, continued
c) Deferred Compensation Plans, continued
Employer contributions to the Plans are based on an employee’s bargaining unit. For employees under the Local 39, Unrepresented Executive Employees, Non-Represented Confidential Employees, and Represented Management Team bargaining units, who have completed one year of service with the City, the City will match 50 cents for every dollar that the employee contributes towards their 457 Plan account, up to an employee contribution of six percent (6.0%) of the employee’s salary. For example, if an employee contributes 6.0% or more of their salary towards their 457 Plan account, they will receive a 3.0% match from the City.

In addition to the employees in the groups listed above, the City Manager receives contributions to the employee’s Plan accounts of $10,000 annually, based on the contract between the City and the individual filling the Council Appointee position.

The City’s required contributions for the year ended June 30, 2023 totaled $101,174.

9. Other Post Employment Healthcare Benefits
a) Post-Employment Benefits Plan
Plan Description: The City provides medical insurance benefits to eligible retirees and their spouses in accordance with various labor agreements through its defined benefit plan. The City pays the minimum amount provided under Government Code Section 22892 of the Public Employees Medical and Hospital Care Act. The City currently pays $115 to $119 per month for any health coverage. the City joined the Public Agencies Post- Retirement Health Care Plan, an agent multiple-employer plan administered by Public Agency Retirement Services (PARS). The City established an irrevocable trust with PARS, managed by an appointed board not under the control of City Council. This trust is not considered a component unit of the City and has been excluded from these financial statements.

Separately issued financial statements for PARS may be obtained from PARS at 4350 Von Karman Ave., Suite 200, Newport Beach, CA 92660.

City's Funding Policy: The contribution requirements of plan members and the City are established and may be amended by City Council. The contributions required to be made are under City Council and labor agreement requirements. When the City established the irrevocable retiree benefit trust with PARS, the City continued with the same funding policy of payment to a full ADC contribution. The long-term portion of governmental activities OPEB liabilities are liquidated primarily by the General Fund. 68 149

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

9. Other Post Employment Healthcare Benefits, continued b) Employees covered by benefit terms
Plan membership varies based on different employee bargaining groups. As of the June 30, 2023 actuarial valuation (the most recent available), membership in the Plan consisted of the following:

Number of
members
Active employees 41
Inactive employees, spouses, or beneficiaries
currently receiving benefit payments 11
Total 52
c) Net OPEB Liability(Asset)
The components of the net OPEB liability of the City at June 30, 2024, were as follows:

Total OPEB Plan Fiduciary Net Net OPEB
Liability Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
$494,032 $750,500 ($256,468)
Changes Recognized for the Measurement Period:

Service Cost 36,231 36,231
Interest 28,516 28,516
Expected investment income
Contributions:

Employer - City's contribution 20,975 (20,975)
Employer - Implicit subsidy 2,602 (2,602)
Net investment income 73,905 (73,905)
Benefit payments (23,577) (23,577)
Actual vs. expected experience
Changes of assumptions 64,176 64,176
Administrative expenses (1,926) 1,926
105,346 71,979 33,367
$599,378 $822,479 ($223,101)
Increase (Decrease)
Net Changes during Fiscal Year 2024
Balance at Fiscal Year Ending 6/30/2024:

Balance at Fiscal Year Ending 6/30/2023:
69 150

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

9. Other Post Employment Healthcare Benefits, continued d) Sensitivity of the Net OPEB Liability(Asset) to Changes in the Discount Rate and Healthcare Cost Trend Rates
The following table presents the net OPEB liability of the Plan as of June 30, 2024, calculated using the discount rate of 6%, as well as what the Plan’s net OPEB liability (asset) would be if it were calculated using a discount rate or healthcare cost trend rate that is 1- percentage-point lower or 1- percentage point higher than the current rate:

Net OPEB Liability/(Asset)
Discount Rate -1% Discount Rate Discount Rate +1%
(5.00%) (6.00%) (7.00%)
($155,281) ($223,101) ($280,525)
Net OPEB Liability/(Asset)
Healthcare Cost
1% Decrease Trend Rates 1% Increase
($297,890) ($223,101) ($130,671)
e) Actuarial Assumptions
The City’s net OPEB liability (asset) was measured as of June 30, 2024 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2023, rolled forward to June 30, 2024, based on the following actuarial methods and assumptions:

Actuarial Assumptions
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Contribution Policy City contributes full ADC
Actuarial Cost Method Entry Age Normal. Level percentage of payroll Actuarial Assumptions:

Discount Rate 6.00%
Long Term Expected Rate 6.00%
Rate of Return on Assets 6.00%
Inflation 2.50%
Payroll Growth 3.00%
Mortality Rate
Based on assumptions for Public Agency Miscellaneous
members published in the 2021 CalPERS Experience
Study.These tables include generational mortality
improvement using 80% of scale MP-2020.

Healthcare Cost Trend Rate 7.6% for FY2024, gradually decreasing over several decades to an ultimate rate of 3.9% in FY2076 and later years.

Healthcare participation for future retirees 45% if covered; 45% if waived PEMHCA Minimum Increases 3.50% annually
70 151

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

9. Other Post Employment Healthcare Benefits, continued f) Changes of Assumptions
Effective with the June 30, 2023 valuation date (2024 measurement date), the following assumption changes were implemented:
• The accounting discount rate was increased from 5.50% to 6.00% based on updated long-term investment return assumptions.
• The percent of future retirees currently electing coverage assumed to elect coverage at retirement changed from 50% to 45% to reflect recent plan experience.
• The percent of future retirees currently waiving coverage assumed to elect coverage at retirement changed from 30% to 45% to reflect recent plan experience.
• The percent of retirees electing spouse coverage changed from 30% to 50% to reflect recent plan experience.
• The percent of future on-Medicare eligible retirees electing each medical plan changed to reflect recent plan experience.
• The payroll growth assumption was changed from 2.75% to 3.00% based on the 2021 CalPERS experience study.
• The CPI Medical Care component was updated from 4.00% to 3.50% based on updated historical analysis and forward-looking market expectations. g) OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB For the fiscal year ended June 30, 2024, the City recognized OPEB expense of $24,216. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between actual and expected experience $2,752 ($87,853) Changes in assumptions 74,886 (20,422)
Net difference between projected and actual earnings
on OPEB plan investments 5,954
Total $83,592 ($108,275)

71 152

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

9. Other Post Employment Healthcare Benefits, continued g) OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB, continued
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year Annual
Ended June 30 Amortization
2025 ($3,497)
2026 15,386
2027 (11,765)
2028 (10,658)
2029 (3,903)
Thereafter (10,246)
Total ($24,683)
Plan Administration
The City is the plan administrator. The Public Agency Retirement Services (PARS) administers the trust for the City’s retiree healthcare benefit plan – a single-employer defined benefit OPEB plan that provides healthcare benefits for eligible general and public safety employees of the City.

Fiscal Year ended
June 30, 2024
Plan Type Agent Multiple Employer
OPEB Trust Yes
Special Funding Situation No
Nonemployer Contributing Entity No
72 153

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

9. Other Post Employment Healthcare Benefits, continued g) OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB, continued
Contribution Information
PARS established rates for each employer based on an actuarially determined rate for each employer. Plan members are not required to contribute to the plan. The City did not make any contribution to the Trust in fiscal year 2024.

Investment Policy
PARS offers different investment portfolios as part of the investment vehicle. The City invests in the “Moderate” portfolio; the primary goal of the Moderate objective is to provide current income and moderate capital appreciation. It is expected that dividend and interest income will comprise a significant portion of total return, although growth through capital appreciation is equally important. Assets are invested in both equity securities and fixed income. The portfolio is constructed to control risk through four layers of diversification – asset classes (cash, fixed income, equity), investment styles (large cap, small cap, international, value, growth), managers and securities. Disciplined mutual fund selection and monitoring process helps to drive return potential while reducing portfolio risk.

The following is the City adopted asset allocation policy as of June 30, 2024:

PARS PARS
Long-Term Long-Term
Target Expected Real Expected Nominal
Asset Class Allocation Rate of Return Rate of Return
U.S. Equity - large cap 26.50% 5.20% 7.70%
U.S. Equity - mid cap 5.00% 5.50% 8.00%
U.S. Equity - small cap 7.50% 6.00% 8.50%
International Equity 6.00% 5.00% 7.50%
Emerging Market Equity 3.25% 5.00% 7.50%
REIT's 1.75% 4.10% 6.60%
Short-Term Bond 10.00% 0.80% 3.30%
Intermediate-Term Bond 33.50% 1.50% 4.00%
High Yield Bond 1.50% 3.20% 5.70%
Cash and Equivalents 5.00% 0.10% 2.60%
Total 100.00% 6.18%
Assumed Long-Term Rate of Inflation 0.00%
Adjusted Total Expected Return 6.18%
Reduction for Assumed Investment Expense -0.25%
Expected Long-Term Net
Rate of Return, Rounded 6.00%

73 154

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

10. Leases
a) Policies
A lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. The City recognizes lease receivable or liabilities with an initial, individual value of $300,000 or more for all funds, based on the future lease payments remaining at the start of the lease.

Lessor
The City is a lessor for noncancellable leases of buildings and facilities. If the lease receivable is over the capitalization threshold, the City will recognize a lease receivable and a deferred inflow of resources in the government‐wide and 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 as follows:
• The City uses bond interest rate as the discount rate for leases. • 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.

Lessee
The City is a lessee for miscellaneous leases. If the lease is over the threshold, the City will recognize a lease liability and an intangible right‐to‐use lease asset (lease asset) in the government‐wide financial statements.

At the commencement of a lease, 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 commencement date, plus certain initial direct costs.

Subsequently, the lease asset is amortized on a straight‐line basis over its useful life. 74 155

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

10. Leases, continued
a) Policies, continued
Key estimates and judgments related to leases include how City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments as follows:
• 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, City generally uses bond interest 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 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 longterm debt on the Statement of Net Position. b) Leases Receivable (City as Lessor) and Leases Payable (City as Lessee) As of June 30, 2024, the City has no leases over the threshold subject to GASB 87 as a lessor or lessee.

11. Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees and others; and natural disasters. The Pooled Liability Assurance Network Joint Powers Authority covers general liability claims in an amount up to $35,000,000. The City has a deductible or uninsured liability of up to $50,000 per claim.

Once the City's deductible is met The Plan becomes responsible for payment of all claims up to the limit. The Cities Group covers workers compensation claims up to $1,000,000 for miscellaneous employees and $1,500,000 for safety employees and has coverage above that limit to a maximum of $10,000,000 per incident in excess. The City has no deductible for these claims.

Through the Sewer Authority Mid-Coastside, the City also belongs to the California Sanitation Risk Management Authority, which insures the City up to $500,000 per property against sewer backup damages. The City is liable for only one claim per property and is not liable for any future damages, as the property owner is then required to install a back flow valve on their line, with the exception of properties in certain low lying areas.

The City provides for the uninsured portion of claims and judgments in the General Fund and Risk Management Internal Service Fund. Claims and judgments, including a provision for claims incurred but not reported, are recorded when a loss is deemed probable of assertion and the amount of the loss is reasonably determinable.

75 156

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

11. Risk Management, continued
Settled claims have not exceeded the City's excess coverage in any of the past three fiscal years.

Claims expenses and liabilities are reported for self-insured deductibles when it is probable that a loss has occurred, the amount of that loss can be reasonably estimated and includes incremental claim expenses. Allocated and unallocated claims adjustment expenses are included in the claims liability balance. These losses include an estimate of claims that have been incurred but not reported. The liability for general liability self-insurance claims is the City's best estimate based on available information.
a) The Cities Group
The City, along with five other governments located within San Mateo County, is a member of The Cities Group, a public entity risk pool and a provider of workers' compensation insurance coverage, claims management, risk management services and legal defense to each participating member. The Cities Group is governed by a Board of Directors, which comprises officials appointed by each participating member. Premiums paid to The Cities Group may be modified by Board decision according to the loss experience of each member.

This loss experience mechanism will operate to ensure that each member returns over a period of time to The Cities Group the funds paid out on its behalf as paid losses. In the opinion of City management, premiums paid represent the best available estimate of the ultimate cost of the City's participation in The Cities Group and, accordingly, the accompanying basic financial statements of the City includes no provisions for possible refunds or additional assessments. For the year ended June 30, 2024, the City paid premiums of $42,193 to The Cities Group. Financial statements may be obtained from The Cities Group at P.O. Box 111, Burlingame, CA 94011-0111.
b) PLAN JPA
Prior to January 2018 the City participated in ABAG Plan Corporation, a non-profit public benefit corporation established to provide liability insurance coverage, claims and risk management, and legal defense to its participating members. On January 16, 2018, ABAG Plan Corporation transitioned to Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA), a self-funded pooled insurance corporation established by a joint powers authority in which the City is one of 28 members. The rights and responsibilities of the member agencies are governed by the bylaws of the PLAN JPA, the risk coverage agreement, and a related memorandum of coverage. Each member chooses its self-insured liability retention at a level between $25,000 and $250,000. Each member has a vote in approving the pool’s self-insured retention level, in setting the coverage limit, in establishing the level of pool reserves, approving the premium allocation methodology for setting premiums for each member, and in approving the methodology for returning disbursable equity to members.

PLAN JPA is responsible for administering the insurance program. PLAN JPA provides claims administration and risk management services to the members. Audited financial information may be obtained from PLAN JPA at 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833.

For the year ended June 30, 2024, the City paid premiums of $413,022 to PLAN JPA.

Financial statements may be obtained from Plan JPA at 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833.
76 157

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

11. Risk Management, continued
c) Liability for Uninsured Claims
The City's liability for uninsured claims was estimated by management based on prior year claims experience as follows:

June 30, 2024 June 30, 2023
Beginning balance of claims payable $1,064,830 $919,647 Increase in estimated liability 1,883,998 445,208
Claims paid (1,278,097) (300,025)
Ending balance of claims payable $1,670,731 $1,064,830

12. Commitments and Contingencies
a) Litigation
The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney there is no pending litigation, which is likely to have a material adverse effect on the financial position of the City.
b) Grant Programs
The City participates in Federal, State and local grant programs. These programs have been audited by the City’s independent accountants in accordance with the provisions of the Federal Single Audit Act as amended and applicable State requirements. No cost disallowances were proposed as a result of these audits; however, these programs are still subject to further examination by the grantors and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial.
c) JobTrain – Conflict of Interest
As part of its commitment to provide relief to individuals and businesses impacted by COVID and to position the coastside economy for long-term resiliency, the City Council sponsored the Coastside Recovery Initiative. That effort resulted in a public report, Building a More Equitable, Vibrant and Resilient Coastside Economy. Substantiated by findings and recommendations from that report, the San Mateo County Board of Supervisors approved a $2,500,000 funding allocation to support the development of the Opportunity Center of the Coastside (OCC) – a first-of-its-kind service center for job seekers, small businesses, and entrepreneurs.

After entering the agreement with the County and securing a space for the OCC, staff onboarded qualified service providers in each of the following areas: rapid employment services and career training (provided by JobTrain), small business development and support services (provided by Renaissance Entrepreneurship Center), and a new business incubator to support startups focused on resiliency tech (provided by American Energy Society).

77 158

CITY OF HALF MOON BAY, CALIFORNIA

NOTES TO THE BASIC FINANCIAL STATEMENTS
FISCAL YEAR ENDED JUNE 30, 2024

12. Commitments and Contingencies, continued
c) JobTrain – Conflict of Interest, continued
On November 7, 2023, the City Council adopted a resolution authorizing the City Manager to execute a professional services agreement with JobTrain, up to $337,000. Under the Agreement, JobTrain would provide Job Seeker workforce development program services via the OCC. That agreement was set to expire on September 30, 2024, unless the contract was amended.

An amendment for the professional services agreement with JobTrain was originally included in the staff recommendation from the Council meeting on September 17. The amendment for the JobTrain contract was excluded from Resolution No. C-2024-72 in order to provide additional time to analyze potential conflicts of interest pertaining to the employment of the Regional Director position at JobTrain which is currently held by an elected Half Moon Bay councilmember. The councilmember was Vice-Mayor and participated in approval of the original contract in 2023, but was not an employee of JobTrain at that time.

The City Attorney prepared a legal opinion that indicates, in summary, under the applicable conflict of interest laws, in particular Government Code section 1090, the Mayor has a conflict of interest in the JobTrain contract by virtue of his financial interest in his employer.

However, the Mayor’s interest is subject to the “remote interest” exception, which applies to officers and employees of nonprofit entities. Therefore, the City may enter into the JobTrain contract so long as the Mayor discloses his interest to the City Council, the interest is noted in the official records, and the Mayor recuses from the decision, including leaving the room during consideration of the contract, pursuant to the Political Reform Act’s recusal requirements.

The City Council voted to amend the professional services agreement with JobTrain with a contract term ending September 30, 2025, and in a contract amount not to exceed $350,372, and the Mayor recused from the vote.
78 159

REQUIRED SUPPLEMENTARY INFORMATION
160

REQUIRED SUPPLEMENTARY INFORMATION
COST-SHARING EMPLOYER DEFINED PENSION PLAN:

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY This schedule reports the proportion (percentage) of the collective net pension liability, the proportionate share (amount) of the collective net pension liability, the employer’s covered employee payroll, the proportionate share (amount of the collective net pension liability as a percentage of the employer’s covered employee payroll and the pension plan’s fiduciary net position as a percentage of the total pension liability.

SCHEDULE OF CONTRIBUTIONS
This schedule reports the cost sharing employer’s contributions to the plan which are actuarially determined, the employer’s actual contributions, the difference between the actual and actuarially determined contributions, and a ratio of the actual contributions divided by covered employee payroll.

SCHEDULE OF FUNDING PROGRESS – OTHER POST-EMPLOYMENT BENEFITS PLAN
This schedule presents trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. 80 161

REQUIRED SUPPLEMENTARY INFORMATION
Miscellaneous Rate Plan
Cost-Sharing Multiple-Employer Defined Pension Plan
Last 10 Years

SCHEDULE OF THE PLAN'S PROPORTIONATE SHARE OF THE

NET PENSION LIABILITY AND RELATED RATIOS AS OF

THE MEASUREMENT DATE
Measurement date: 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Plan's proportion of the Net Pension Liability
(Asset) 0.04792% 0.10917% 0.11869% 0.12281% 0.12663% 0.13120% 0.13584% 0.18148% 0.14468% 0.14628% Plan's proportionate share of the Net Pension
Liability (Asset) $2,981,768 $2,994,972 $4,123,054 $4,841,079 $4,772,172 $5,254,057 $5,729,928 $3,445,863 $6,769,868 $7,314,381 Covered Payroll $1,412,295 $1,986,876 $2,014,025 $2,423,106 $3,177,604 $3,415,448 $3,945,078 $3,974,973 $4,318,701 $4,671,261 Plan's Proportionate Share of the Net Pension
Liability/(Asset) as a Percentage of its
Covered Payroll 211.13% 150.74% 204.72% 199.79% 150.18% 153.83% 145.24% 86.69% 156.76% 156.58% Plan's Proportionate Share of the Fiduciary
Net Position as a Percentage of the Plan's
Total Pension Liability 79.82% 78.40% 74.06% 73.31% 75.26% 75.26% 75.10% 88.29% 76.68% 76.21% Miscellaneous Rate Plan
Cost-Sharing Multiple Employer Defined Pension Plan
As of fiscal year ending June 30,
Last 10 Years

SCHEDULE OF CONTRIBUTIONS
Fiscal year ended June 30: 2016 2017 2018 2019 2020 2021 2022 2023 2024 Actuarially determined contribution $168,511 $344,215 $435,299 $525,289 $649,405 $728,503 $819,301 $905,657 $937,025 Contributions in relation to the actuarially
determined contributions (168,511) (344,215) (435,299) (525,289) (649,405) (728,503) (819,301) (905,657) (937,025) Contribution deficiency (excess) $0 $0 $0 $0 $0 $0 $0 $0 $0 Covered payroll $2,014,025 $2,423,106 $3,177,604 $3,415,448 $3,945,078 $3,974,973 $4,318,701 $4,671,261 $5,144,449 Contributions as a percentage of covered payroll 8.4% 14.2% 13.7% 15.4% 16.5% 18.3% 19.0% 19.4% 18.2% Notes to Schedule
Valuation date: 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 81 162

REQUIRED SUPPLEMENTARY INFORMATION
Safety Rate Plan
Cost-Sharing Multiple-Employer Defined Pension Plan
Last 10 Years

SCHEDULE OF THE PLAN'S PROPORTIONATE SHARE OF THE

NET PENSION LIABILITY AND RELATED RATIOS AS OF

THE MEASUREMENT DATE
Measurement date: 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Plan's proportion of the Net Pension Liability
(Asset) 0.06033% 0.10493% 0.10385% 0.10143% 0.10417% 0.10123% 0.03615% 0.12006% 0.10285% 0.09738% Plan's proportionate share of the Net Pension
Liability (Asset) $3,754,036 $4,323,582 $5,378,768 $6,060,745 $6,112,200 $6,319,361 $6,550,836 $4,213,402 $7,067,692 $7,279,426 Covered Payroll N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Plan's Proportionate Share of the Net Pension
Liability/(Asset) as a Percentage of its
Covered Payroll N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Plan's Proportionate Share of the Fiduciary
Net Position as a Percentage of the Plan's
Total Pension Liability 79.82% 78.40% 74.06% 73.31% 75.26% 75.26% 75.10% 88.29% 76.68% 76.21% Safety Rate Plan
Cost-Sharing Multiple Employer Defined Pension Plan
As of fiscal year ending June 30,
Last 10 Years

SCHEDULE OF CONTRIBUTIONS
Fiscal year ended June 30: 2016 2017 2018 2019 2020 2021 2022 2023 2024 Actuarially determined contribution $414,500 $249,322 $445,240 $551,942 $555,649 $594,797 $612,617 $660,198 $457,721 Contributions in relation to the actuarially
determined contributions (249,322) (414,500) (445,240) (551,942) (555,649) (594,797) (612,617) (660,198) (457,721) Contribution deficiency (excess) $0 $0 $0 $0 $0 $0 $0 $0 $0 Covered payroll N/A N/A N/A N/A N/A N/A N/A N/A N/A
Contributions as a percentage of covered payroll N/A N/A N/A N/A N/A N/A N/A N/A N/A Notes to Schedule
Valuation date: 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 82 163

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF CHANGES

IN THE NET OPEB LIABILITY AND RELATED RATIOS
An Agent Multiple-Employer Defined Benefit OPEB Plan
Last 10 fiscal years*
Measurement Date 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 Total OPEB Liability (1)
Service Cost $25,533 $27,065 $27,877 $28,713 $30,749 $31,671 $35,261 $36,231 Interest 24,624 26,373 28,268 30,256 32,113 32,877 26,723 28,516 Differences between expected and actual experience - - - - - - - - Benefit payments (22,522) (22,553) (22,788) (24,885) (29,523) (33,272) (37,150) (23,577) Actual vs. expected experience - - - 5,947 - (122,083) - - Changes of assumptions - - - (8,808) 30,158 (22,718) - 64,176 Net change in total OPEB liability 27,635 30,885 33,357 31,223 63,497 (113,525) 24,834 105,346 Total OPEB liability - beginning 396,126 423,761 454,646 488,003 519,226 582,723 469,198 494,032 Total OPEB liability - ending (a) $423,761 $454,646 $488,003 $519,226 $582,723 $469,198 $494,032 $599,378 OPEB fiduciary net position
Net investment income $48,425 $32,087 $41,937 $29,170 $136,486 ($91,716) $44,412 $73,905 Contributions:

Employer - City's contribution 22,522 39,261 22,928 26,083 (5,366) 33,410 37,336 20,975 Employer - Implicit subsidy - - - - - - - 2,602
Administrative expense (2,071) (1,552) (1,745) (2,911) (2,934) (2,117) (1,983) (1,926) Actual vs. expected experience - - - - - - - -
Benefit payments (22,522) (22,553) (22,788) (24,885) (29,523) (33,272) (37,150) (23,577) Net change in plan fiduciary net position 46,354 47,243 40,332 27,457 98,663 (93,695) 42,615 71,979 Plan fiduciary net position - beginning 541,531 587,885 635,128 675,460 702,917 801,580 707,885 750,500 Plan fiduciary net position - ending (b) $587,885 $635,128 $675,460 $702,917 $801,580 $707,885 $750,500 $822,479 Net OPEB liability (asset) - ending (a)-(b) ($164,124) ($180,482) ($187,457) ($183,691) ($218,857) ($238,687) ($256,468) ($223,101) Plan fiduciary net position as a percentage of
the total OPEB liability 138.73% 139.70% 138.41% 135.38% 137.56% 150.87% 151.91% 137.22% Covered-employee payroll (A) N/A ** $3,009,829 $4,157,271 $4,976,211 $4,806,006 $5,072,966 $6,658,959 $5,233,729 Total OPEB liability as a percentage of
covered-employee payroll N/A ** -6.00% -4.51% -3.69% -4.55% -4.71% -3.85% -4.26% * Fiscal year 2018 was the first year of implementation of GASB 75 Administrative expenses are included in investment expenses. **Fiscal year 2017 was the first year of GASB 74 implementation. (A) City's contributions to OPEB plan are not based on a measure of pay 83 164

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF CONTRIBUTIONS
An Agent Multiple-Employer Defined Benefit OPEB Plan
Last 10 fiscal years*
Fiscal Year Ended June 30, 2017 2018 2019 2020 2021 2022 2023 2024 Actuarially Determined Contribution (ADC) $16,708 $17,251 $15,539 $16,054 $15,992 $16,392 $3,915 $2,371 Less: Contributions in Relation to the ADC (22,522) (39,261) (22,928) (26,083) (5,366) (20,975) (37,336) (23,577) Contribution deficiency (excess) ($5,814) ($22,010) ($7,389) ($10,029) $10,626 ($4,583) ($33,421) ($21,206) Covered-employee payroll N/A ** $3,009,829 $4,157,271 $4,976,211 $4,806,006 $5,072,966 $6,658,959 $5,233,729 Contributions as a percentage of
Covered-employee payroll N/A ** 1.30% 0.55% 0.52% 0.11% 0.41% 0.56% 0.45% Notes to Schedule:
* Fiscal year 2018 was the first year of implementation.

Valuation Date
Actuarial Cost Method
Amortization Period
Asset Valuation Method
Actuarial Assumptions:

Discount Rate
Inflation
Medical Trend
PEMHCA Minimum 3.50% annually
Mortality
Mortality Improvement
* Fiscal year 2018 was the first year of implementation of GASB 75. **Fiscal year 2017 was the first year of GASB 74 implementation.

7.6% for FY2024, gradually decreasing over several
decades to an ultimate rate of 3.9% in FY2076 and
later years.

The Actuarial Value of Assets is a 5-year smoothed
market value.Gains and losses are recognized over a
five year period and limited to a corridor of 80% to
120% of the market value of assets.

Mortality generational improvement using 80% of
scale MP-2020.

6.00%
June 30, 2023

2.50%
Each year's gain or loss is straightline amortized over 5 years.

Entry Age Normal, level percentage of payroll
Based on assumptions for Public Agency
Miscellaneous members published in the 2021
CalPERS Experience Study.
84 165

CITY OF HALF MOON BAY

GENERAL FUND

SCHEDULE OF REVENUES AND EXPENDITURES

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual Amounts (Negative)
Revenues:

Taxes $18,241,411 $16,984,412 $16,991,811 $7,399
Licenses and permits 208,800 208,800 306,282 97,482
Fines and forfeitures 27,936 27,936 81,445 53,509
1,302,388 1,213,921 1,454,141 240,220
Rents and leases 77,000 77,000 78,135 1,135
242,000 508,662 804,188 295,526
Intergovernmental revenues 5,000 5,000 117,400 112,400
Miscellaneous 617,721 891,213 833,965 (57,248)
Total revenues 20,722,256 19,916,944 20,667,367 750,423 Expenditures:

Current operations:

General government 2,672,440 3,172,440 3,138,896 33,544 General administration 2,204,184 2,204,184 2,134,173 70,011 Public safety 7,164,062 7,164,062 6,452,977 711,085
Public works 2,304,097 2,304,097 2,174,611 129,486
Recreation services 653,730 653,730 538,827 114,903
3,461,099 3,461,099 2,879,532 581,567
Community and economic development 1,233,226 1,233,226 1,008,276 224,950 Debt service:

Principal 650,612 650,612 3,628,582 (2,977,970)
Interest and fiscal charges 85,998 85,998 97,016 (11,018) Total expenditures 20,429,448 20,929,448 22,052,890 (1,123,442) 292,808 (1,012,504) (1,385,523) (373,019)
Other financing sources (uses):

Issuance of debt 3,200,000 3,200,000
Transfers in 537,285 537,285 537,285
Transfers out (4,516,736) (4,516,736) (4,211,736) 305,000 Total Other Financing Sources (Uses) (3,979,451) (3,979,451) (474,451) 3,505,000 Net change in fund balance ($3,686,643) ($4,991,955) (1,859,974) $3,131,981 Fund balance at beginning of year 16,227,904
Fund balance at end of year $14,367,930

AND CHANGES IN FUND BALANCE
Planning
Excess of revenues over
expenditures
Charges for services
Investment income
85 166
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Taxes $729,266 $575,676 $583,677 $8,001
Investment income 98,000 213,669 358,662 144,993
Intergovernmental revenue 5,449,246 5,432,272 1,055,528 (4,376,744) Total revenues 6,276,512 6,221,617 1,997,867 (4,223,750) Expenditures:

Current:

Public works 226,803 226,803 236,775 (9,972)
Capital outlay 6,157,567 6,207,165 957,844 5,249,321
Total expenditures 6,384,370 6,433,968 1,194,619 5,239,349 Excess (deficiency) of revenues
over (under) expenditures (107,858) (212,351) 803,248 1,015,599 40,000 40,000 40,000
Transfer out (6,746) (6,746) (6,746)
sources (uses) 33,254 33,254 33,254
Net change in fund balance ($74,604) ($179,097) 836,502 $1,015,599 Fund balance at beginning of year 6,427,224
Fund balance at end of year $7,263,726
Other financing sources (uses):

Transfer in
Total other financing

CITY OF HALF MOON BAY

STREETS AND ROADS SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
86 167
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Investment income $27,100 $44,891 $72,389 $27,498
Total revenues 27,100 44,891 72,389 27,498
Expenditures:

Current:

General government 400,000 400,000 400,000
Total expenditures 400,000 400,000 400,000
Excess (deficiency) of revenues
over (under) expenditures (372,900) (355,109) 72,389 427,498 Net change in fund balance ($372,900) ($355,109) 72,389 $427,498 Fund balance at beginning of year 1,348,210
Fund balance at end of year $1,420,599

CITY OF HALF MOON BAY

LOT ACQUISITION AND RETIREMENT SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
87 168

CITY OF HALF MOON BAY

AFFORDABLE HOUSING SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Investment income $31,400 $68,740 $225,849 $157,109
Intergovernmental revenues 3,250,000 4,750,000 1,500,000 Total revenues 31,400 3,318,740 4,975,849 1,657,109
Expenditures:

Current:
1,000,000 1,300,000 1,185,761 114,239
Total expenditures 1,000,000 1,300,000 1,185,761 114,239 Excess of revenues over expenditures (968,600) 2,018,740 3,790,088 1,771,348 Other financing sources:

Transfers out (150,000) 150,000
Net change in fund balance ($968,600) $1,868,740 3,790,088 $1,921,348 Fund balance at beginning of year 2,164,621
Fund balance at end of year $5,954,709
88 169

CITY OF HALF MOON BAY

PARKS DEVELOPMENT SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Budgeted Amounts Final Budget
Positive
Original Final Actual (Negative)
Revenues:

Impact fees/recreation fees $147,000 $66,890 ($66,890)
Investment income 40,700 61,778 $86,025 24,247
Intergovernmental revenues 5,564,000 4,589,895 1,446,510 (3,143,385) Total revenues 5,751,700 4,718,563 1,532,535 (3,186,028) Expenditures:

Capital outlay 6,022,117 8,226,080 4,477,662 3,748,418
Total expenditures 6,022,117 8,226,080 4,477,662 3,748,418 Excess of revenues over expenditures (270,417) (3,507,517) (2,945,127) 562,390 Other financing sources:

Transfers in 300,000 1,250,000 1,250,000
Transfers out (175,000) (175,000) 175,000
Total other financing sources 125,000 1,075,000 1,250,000 175,000 Net change in fund balance ($145,417) ($2,432,517) (1,695,127) $737,390 Fund balance at beginning of year 2,589,695
Fund balance at end of year $894,568
89 170

REQUIRED SUPPLEMENTARY INFORMATION
Budget and Budgetary Accounting
The City Council adopts an Annual Budget no later than the second meeting of June of each year for the fiscal year commencing the following July 1. The Annual Budget is adopted on a basis consistent with generally accepted accounting principles. The Capital Projects Funds are budgeted annually, with major capital improvement projects details in a separate Five Year Capital Improvement Program budget document, except that there is no budget adopted for the Land Asset Capital Projects Fund.

The City follows these procedures in establishing the budgetary data reflected in the financial statements.

1. The City Manager submits to the City Council a proposed operating budget for the following fiscal year. The operating budget includes proposed revenues and expenditures.

2. After a review by the City Council, a public hearing is conducted and further comment is received from the City Council and the general public.

3. Upon completion of the hearings and modifications, if any, to the proposed budget, it is adopted by the City Council through passage of an appropriate resolution.

4. Generally, the budget is amended in the middle of the year and at the end of the year. All approved additional appropriations are added to the adopted budget and an amended budget is presented to the City Council, which adopts it after due review.

5. The City Manager is authorized to transfer from time to time budget amounts of operational expenditure categories within divisions as deemed necessary in order to meet the City's needs.

6. City Council approval is required for all fund to fund transfers, fund reserve to appropriations transfers, for new revenue sources with offsetting appropriations, and for transfers to/from the capital expenditure category. The legal level of budgetary control of the City Council is at the fund level. This is the level that management cannot overspend the budget without approval of the City Council.

Expenditures in Excess of Budget
The General Fund and the Police Grants Special Revenue Fund incurred expenditures in excess of budget in the amounts of $1,123,442 and $23,451, respectively.

Sufficient resources were available in each fund to fund these excesses. 90 171

SUPPLEMENTARY INFORMATION
172

CITY OF HALF MOON BAY

CAPITAL PROJECTS

SCHEDULE OF REVENUES AND EXPENDITURES

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:
$77,458 $119,363 $41,905
Intergovernmental revenues 595,000 236,632 (358,368)
Total revenues 672,458 355,995 (316,463)
Expenditures:

Capital Outlay 4,981,648 1,649,258 3,332,390
Total expenditures 4,981,648 1,649,258 3,332,390
(4,309,190) (1,293,263) 3,015,927
Other financing sources (uses):

Transfers in 2,680,000 1,250,000 (1,430,000)
Transfers out (1,010,000) (961,613) 48,387
Total other financing sources (uses) 1,670,000 288,387 (1,381,613) Net change in fund balance ($2,639,190) (1,004,876) $1,634,314 Fund balance at beginning of year 2,788,918
Fund balance at end of year $1,784,042

AND CHANGES IN FUND BALANCE
Investment income
Excess of revenues over
expenditures
92 173

CITY OF HALF MOON BAY, CALIFORNIA

NON-MAJOR GOVERNMENTAL FUNDS
FISCAL YEAR ENDED JUNE 30, 2024
Special Revenue Funds
Special Revenue Funds are established to account for revenue derived from specific taxes or other earmarked revenue sources (other than for major capital projects that are restricted by law or administrative action to expenditures for specified purposes).

The Police Grants Fund (Fund 128) was established to account for revenues received and expenditures made for police services. The City receives funds for police services from Federal, State, County and local governmental agencies. These funds are designated for specific police services, activities, and capital equipment.

The Storm Drain Operating Fund (Fund 111) accounts for the maintenance of the existing storm drain system.

The Traffic Mitigation Fund (Fund 112) was established to account for all proceeds from traffic mitigation fees, whose purpose is to defray the actual costs of constructing improvements to mitigate traffic and circulation impacts resulting from proposed new development.

The CZI Grant Fund (Fund 134) was established to account for proceeds relating to the CZI Grant. These funds can be used to support learning and evaluation activities for groups currently engaged in the operation and implementation of economic advancement centers.

The Opportunity Center Coastside Fund (Fund 135) was established to account for proceeds from the American Rescue Plan Act funds where the City is a subrecipient. These funds may only be used to address the negative economic impacts from the COVID-19 public health emergency.

Debt Service Fund
The Judgment Obligation Bonds Fund (Fund 77 Series A; Fund 78 Series B) was established to account for the Judgment Obligation Bond Series 2009A and the Judgment Obligation Bond Series 2009B issued on July 14, 2009.

Capital Projects Funds
Capital Projects Funds are utilized to account for resources used for the acquisition and construction of capital facilities and infrastructure by the City, with the exception of those assets financed by proprietary funds.

The Library Fund (Fund 153) is used to account for the construction and facilities maintenance of the library.

The Public Facilities Fund (Fund 127) accounts for expenditures related to public facilities improvements that are needed - police facilities, the library, the public works yard, etc. The funds are received from various contractual agreements that are one-time in nature and which are not specifically dedicated, as well as grants.

The Storm Drain Improvements Fund (Fund 152) is used to account for all proceeds from storm drainage improvement fees which are assessed against new or remodeled construction and are used for drainage improvements.
93 174

CITY OF HALF MOON BAY

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
JUNE 30, 2024

SPECIAL REVENUE FUNDS
Opportunity
Police Storm Drain Traffic CZI Center
Grants Operating Mitigation Grant Coastside
Assets
Cash and investments $1,075,519 $265,453 $4,518,499 $208,969 Accounts receivable $231,490
Interest receivable 10,173 2,543 43,041 2,094 1,013
$1,085,692 $267,996 $4,561,540 $211,063 $232,503
Accrued expenses
Accrued liabilities $169,729
Due to other funds 33,065
202,794
Restricted $1,085,692 $267,996 $4,561,540 $211,063 29,709 Assigned
1,085,692 267,996 4,561,540 211,063 29,709
$1,085,692 $267,996 $4,561,540 $211,063 $232,503
Total fund balances
Total liabilities and fund balances
Total assets
Total liabilities
Liabilities:

Fund Balances:
94 175

DEBT SERVICE
FUND
Judgement
Obligation Public Storm Drain
Bonds Library Facilities Improvements Total
$6,425 $444,803 $1,517,170 $1,402,160 $9,438,998
231,490
4,381 10,751 13,593 87,589
$6,425 $449,184 $1,527,921 $1,415,753 $9,758,077
$29,036 $29,036
$19,711 189,440
33,065
19,711 29,036 251,541
$6,425 1,508,210 1,386,717 9,057,352
$449,184 449,184
6,425 449,184 1,508,210 1,386,717 9,506,536
$6,425 $449,184 $1,527,921 $1,415,753 $9,758,077

CAPITAL PROJECTS FUNDS
95 176

CITY OF HALF MOON BAY

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2024

SPECIAL REVENUE FUNDS
Opportunity
Police Storm Drain Traffic CZI Center
Grants Operating Mitigation Grant Coastside
Revenues:

Investment income $51,129 $16,519 226,346 $13,061 $19,873 Rents and leases 13,000
Intergovernmental revenues 186,159 231,490
Total Revenues 237,288 16,519 226,346 13,061 264,363
Expenditures:

Current:

General government 87,400
Public safety 23,451
Public works 30,292
Community and economic development 886,000
Capital outlay
Total Expenditures 23,451 30,292 87,400 886,000
Excess (deficiency) of revenues
over (under) expenditures 213,837 16,519 196,054 (74,339) (621,637) Other financing sources:

Transfers in
Transfer (out) (100,000)
Total Other Financing Sources (100,000)
Net change in fund balances 213,837 (83,481) 196,054 (74,339) (621,637) Fund balance at beginning of year,
as previously reported 871,855 351,477 4,365,486 285,402 651,346 Adjustments:

Changes from major to nonmajor fund
Changes from nonmajor to major fund
Fund balances at beginning of year,
as adjusted 871,855 351,477 4,365,486 285,402 651,346
Fund balances at end of year $1,085,692 $267,996 $4,561,540 $211,063 $29,709 96 177

SPECIAL

REVENUE DEBT SERVICE

FUND FUND CAPITAL PROJECTS FUNDS
(Formerly (Formerly Major) (Formerly Major) (Formerly Nonmajor) Nonmajor) Judgement
Affordable Obligation Parks Public Storm Drain
Housing Bonds Library Development Facilities Improvements Total $157 $23,029 $65,700 $57,700 $473,514
13,000
417,649
157 23,029 65,700 57,700 904,163
87,400
23,451
50,465 80,757
886,000
777,060 573,200 1,350,260
777,060 623,665 2,427,868
157 23,029 (711,360) (565,965) (1,523,705)
150,000 829,613 979,613
(3,809) (103,809)
150,000 825,804 875,804
157 23,029 (561,360) 259,839 (647,901)
$2,164,621 2,589,695 2,069,570 1,126,878 14,476,330
6,268 426,155 432,423
(2,164,621) (2,589,695) (4,754,316)
6,268 426,155 2,069,570 1,126,878 10,154,437
$6,425 $449,184 $1,508,210 $1,386,717 $9,506,536
97 178

CITY OF HALF MOON BAY

POLICE GRANTS SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Investment income $28,280 $51,129 $22,849
Intergovernmental 186,408 186,159 (249)
Total revenues 214,688 237,288 22,600
Expenditures:

Current:

Public Safety 23,451 (23,451)
Total expenditures 23,451 (23,451)
Excess (deficiency) of revenues
over ( under) expenditures 214,688 213,837 (851)
Net change in fund balance $214,688 213,837 ($851)
Fund Balance at beginning of year 871,855
Fund balance at end of year $1,085,692
98 179

CITY OF HALF MOON BAY

STORM DRAIN OPERATING SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Investment income $5,100 $16,519 $11,419
Total revenues 5,100 16,519 11,419
Other financing sources:

Transfers out (100,000) (100,000)
Net change in fund balance ($94,900) (83,481) $11,419
Fund balance at beginning of year 351,477
Fund balance at end of year $267,996
99 180

CITY OF HALF MOON BAY

TRAFFIC MITIGATION SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Impact fees/recreation fees $68,000 ($68,000)
Investment income 137,702 $226,346 88,644
Total revenues 205,702 226,346 20,644
Expenditures:

Current:

Public works 37,033 30,292 6,741
Total expenditures 37,033 30,292 6,741
Excess (deficiency) of revenues
over (under) expenditures 168,669 196,054 27,385
Net change in fund balance $168,669 196,054 $27,385
Fund balance at beginning of year 4,365,486
Fund balance at end of year $4,561,540
100
181

CITY OF HALF MOON BAY

CZI GRANT SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Investment income $4,000 $13,061 $9,061
Total revenues 4,000 13,061 9,061
Expenditures:

Current:

General government 289,401 87,400 202,001
Total expenditures 289,401 87,400 202,001
Excess of revenues over expenditures (285,401) (74,339) 211,062 Net change in fund balance ($285,401) (74,339) $211,062 Fund balance at beginning of year 285,402
Fund balance at end of year $211,063
101
182

CITY OF HALF MOON BAY

OPPORTUNITY CENTER COASTSIDE SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Investment income $20,177 $19,873 ($304)
Rents and leases 13,000 13,000
Intergovernmental revenues 3,350,000 231,490 (3,118,510) Total revenues 3,370,177 264,363 (3,105,814)
Expenditures:

Current:

Community and economic development 2,470,000 886,000 1,584,000 Excess of revenues over expenditures 900,177 (621,637) (1,521,814) Other financing sources:

Transfers out (500,000) 500,000
Net change in fund balance $400,177 (621,637) ($1,021,814) Fund balance at beginning of year 651,346
Fund balance at end of year $29,709
102
183

CITY OF HALF MOON BAY

JUDGMENT OBLIGATION BONDS DEBT SERVICE FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Investment income $100 $157 $57
Total revenues 100 157 57
Net change in fund balance $100 157 $57
Fund balance at beginning of year 6,268
Fund balance at end of year $6,425
103
184

CITY OF HALF MOON BAY

LIBRARY CAPITAL PROJECTS FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Investment income $6,400 $23,029 $16,629
Total revenues 6,400 23,029 16,629
Net change in fund balance $6,400 23,029 $16,629
Fund balance at beginning of year 426,155
Fund balance at end of year $449,184
104
185
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Investment income $39,402 $65,700 $26,298
Total revenues 39,402 65,700 26,298
Expenditures:

Capital outlay 1,342,399 777,060 565,339
Total expenditures 1,342,399 777,060 565,339
Excess (deficiency) of revenues
over (under) expenditures (1,302,997) (711,360) 591,637 Other financing sources (uses):

Transfers in 150,000 150,000
Transfers out (400,000) 400,000
Total other financing sources (uses) (250,000) 150,000 400,000 Net change in fund balance ($1,552,997) (561,360) $991,637 Fund balance at beginning of year 2,069,570
Fund balance at end of year $1,508,210

CITY OF HALF MOON BAY

PUBLIC FACILITIES CAPITAL PROJECT FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
105
186

CITY OF HALF MOON BAY

STORM DRAIN IMPROVEMENTS CAPITAL PROJECT FUND

SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Final Positive
Budget Actual (Negative)
Revenues:

Charges for services $7,900 ($7,900)
Investment income 35,918 $57,700 21,782
Total revenues 43,818 57,700 13,882
Expenditures:

Current:

Public works 56,048 50,465 5,583
Capital outlay 1,804,691 573,200 1,231,491
Total expenditures 1,860,739 623,665 1,237,074
Excess of revenues over expenditures (1,816,921) (565,965) 1,250,956 Other financing sources:

Transfers in 878,000 829,613 (48,387)
Transfers out (53,809) (3,809) 50,000
Total other financing sources 824,191 825,804 1,613
Net change in fund balance ($992,730) 259,839 $1,252,569 Fund balance at beginning of year 1,126,878
Fund balance at end of year $1,386,717
106
187

CITY OF HALF MOON BAY, CALIFORNIA

INTERNAL SERVICE FUNDS
FISCAL YEAR ENDED JUNE 30, 2024
Internal Service Funds are used to account for the financing of goods and services provided by one City department or agency to other departments or agencies of the City, or to other government units on a cost- reimbursement basis (including depreciation).

The Equipment (Fund 302) and Vehicle Replacement (Fund 301) Fund is used to account for replacement of furniture, fixtures, equipment, and vehicles. These funds cover the cost of repair, maintenance and replacement of City vehicles and provide for the service, maintenance of the management information systems, leased copiers and leased postage meter. Revenues are derived from charges to user departments (al funds) based on usage.

The Risk Management Fund (Fund 303) administers the City's general insurance and workers compensation programs with the goals of reducing insurance-related costs, maintain appropriate levels of coverage and to build for contingent legal reserves.

The Pension Stabilization Fund (Fund 304) stabilizes major fluctuations in annual pension costs driven by market factors and actuarial changes.
107
188

CITY OF HALF MOON BAY

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF NET POSITION
JUNE 30, 2024
Equipment and
Vehicle Risk Pension
Replacement Management Stabilization Total
Assets
Current Assets:

Cash and investments $1,089,392 $3,835,865 $1,495,313 $6,420,570 Accounts receivable
Interest receivable 9,812 36,755 14,227 60,794
Total Current Assets 1,099,204 3,872,620 1,509,540 6,481,364 Non-current assets:

Net OPEB asset 2,766 2,766
Capital assets, net of
Accumulated depreciation 362,513 362,513
Total Assets 1,461,717 3,875,386 1,509,540 6,846,643
Deferred outflow of resources
Related to OPEB 1,131 1,131
Total Deferred Outflows of Resources 1,131 1,131
Liabilities
Current Liabilities:

Accounts payable 32,537 7,010 39,547
Claims liability 1,670,731 1,670,731
Total Liabilities 32,537 1,677,741 1,710,278
Deferred inflow of resources
Related to OPEB 831 831
Total Deferred Inflows of Resources 831 831
Net Position
Net position:

Invested in capital assets 362,513 362,513
Restricted for OPEB 3,066 3,066
Unrestricted 1,066,667 2,194,879 1,509,540 4,771,086
Total Net Position $1,429,180 $2,197,945 $1,509,540 $5,136,665 108
189

CITY OF HALF MOON BAY

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED JUNE 30, 2024
Equipment and
Vehicle Risk Pension
Replacement Management Stabilization Total
Operating revenues:

Impact fees
Total operating revenues
Operating expenses:

Salaries and wages $105,779 $168,076 $455,753 $729,608
Contract services 48,612 5,220 53,832
Services and supplies 343,372 343,372
Repairs and maintenance 43,599 43,599
Insurance expense 1,079,413 1,079,413
Pension 457,721 457,721
Depreciation 79,683 79,683
Other charges 240 240
Total operating expenses 621,045 1,252,949 913,474 2,787,468 Operating income (loss) (621,045) (1,252,949) (913,474) (2,787,468) Non-operating revenues (expenses):

Investment income 47,202 178,746 50,729 276,677
Total non-operating revenues 47,202 178,746 50,729 276,677 Capital contributions 53,928 53,928
Transfers in 633,402 662,431 913,474 2,209,307
Change in net position 113,487 (411,772) 50,729 (247,556) Net position at beginning of year 1,315,693 2,609,717 1,458,811 5,384,221 Net position at end of year $1,429,180 $2,197,945 $1,509,540 $5,136,665 109
190

CITY OF HALF MOON BAY

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2024
Equipment and
Vehicle Risk Pension
Replacement Management Stabilization Total
Cash flows from operating activities:

Cash received from department users
Cash payments to suppliers of goods and services ($433,331) ($479,348) ($912,679) Cash payments to employees for services (105,779) (168,071) ($913,474) (1,187,324) Net cash provided by (used for) operating activities (539,110) (647,419) (913,474) (2,100,003) Cash flows from non-capital financing activities:

Transfer in 633,402 662,431 913,474 2,209,307
Net cash provided by (used for) non-capital
financing activities 633,402 662,431 913,474 2,209,307
Cash flows from investing activities:

Interest received on investments 43,513 168,576 46,924 259,013 Net cash provided by investing activities 43,513 168,576 46,924 259,013 Net increase (decreased) in cash and cash equivalents 137,805 183,588 46,924 368,317 Cash and cash equivalents at beginning of year 951,587 3,652,277 1,448,389 6,052,253 Cash and cash equivalents at end of year $1,089,392 $3,835,865 $1,495,313 $6,420,570 Reconciliation of operating income to net cash flows
provided by operating activities:

Operating income (loss) ($621,045) ($1,252,949) ($913,474) ($2,787,468) Adjustments to reconcile operating income
to net cash provided by operating activities:

Depreciation 79,683 79,683
(Increase) in accounts receivable 1,212 1,212
Increase (Decreased) in accounts payable 1,040 (376) 664 Increase (Decreased) in employees benefits 5 5
Increase (Decreased) in claims liability 605,901 605,901 Net cash provided by (used for) operating activities ($539,110) ($647,419) ($913,474) ($2,100,003) Non-cash transactions:

Capital contributions $53,928 $53,928
110
191

STATISTICAL SECTION
192
193

CITY OF HALF MOON BAY, CALIFORNIA

STATISTICAL SECTION
FISCAL YEAR ENDED JUNE 30, 2024
This part of the City's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.

Financial Trends
These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.

Debt Capacity
These schedules present information to help the reader assess the affordability of the City's current level of outstanding debt and the ability to issue additional debt in the future.

Revenue Capacity
These schedules contain information to help the reader assess the City's most significant local revenue sources.

Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.

Operating Information
These schedules contain service data to help the reader understand how the information in the City's financial report relates to the services the City's provides and the activities it performs.

Property Tax Information
These schedules contain information to help the reader assess the City's property tax sources and changes.

Note: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant years. 113
194
195
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Governmental activities:

Invested in capital assets,
net of related debt 37,550,877 $ 40,513,950 $ 46,399,149 $ 63,168,981 $ 60,800,162 $ 62,744,013 $ 67,193,002 $ 68,275,626 $ 71,854,949 $ 76,826,570 $ Restricted 18,540,842 19,779,956 22,157,470 25,844,530 27,738,822 16,416,110 19,871,245 21,340,221 22,502,708 25,081,978 Unrestricted 26,042,003 34,369,708 28,173,022 17,010,742 25,475,062 35,553,961 34,061,834 38,471,511 41,909,085 38,119,541 Total governmental activities net position 82,133,722 $ 94,663,614 $ 96,729,641 $ 106,024,253 $ 114,014,046 $ 114,714,084 $ 121,126,081 $ 128,087,358 $ 136,266,742 $ 140,028,089 $ Business-type activities:

Invested in capital assets,
net of related debt 3,970,876 $ 3,871,356 $ 3,816,994 $ 4,490,973 $ 4,566,718 $ 4,587,090 $ 6,199,508 $ 6,948,434 $ 6,981,850 $ 6,831,129 $ Restricted - - 5,946,230 6,385,095 8,692,609 9,377,687 9,554,843 10,092,582 11,397,062 Unrestricted 19,063,158 20,635,855 21,900,766 14,129,580 13,683,606 11,937,949 8,461,534 5,502,097 4,637,048 3,569,939 Total business-type activities net position 23,034,034 $ 24,507,211 $ 25,717,760 $ 24,566,783 $ 24,635,419 $ 25,217,648 $ 24,038,729 $ 22,005,374 $ 21,711,480 $ 21,798,130 $ Primary government:

Invested in capital assets, net of related debt 41,521,753 $ 44,385,306 $ 50,216,143 $ 67,659,954 $ 65,366,880 $ 67,331,103 $ 73,392,510 $ 75,224,060 $ 78,836,799 $ 83,657,699 $ Restricted 18,540,842 19,779,956 22,157,470 31,790,760 34,123,917 25,108,719 29,248,932 30,895,064 32,595,290 36,479,040 Unrestricted 45,105,161 55,005,563 50,073,788 31,140,322 39,158,668 47,491,910 42,523,368 43,973,608 46,546,133 41,689,480 Total primary government net position (1) 105,167,756 $ 119,170,825 $ 122,447,401 $ 130,591,036 $ 138,649,465 $ 139,931,732 $ 145,164,810 $ 150,092,732 $ 157,978,222 $ 161,826,219 $ (1) The $12.5 million increase in primary government net position in FY 2015-16 is primarily attributable to higher tax revenues and a contribution of $6.0 million from the County of San Mf the library construction capital project that is scheduled to commence during fiscal year 2016-17.The $3.5 million increase in primary government net position in FY 2016-17 is primarily attributable to investment in infrastructure and capital projects.The $8.4 million increase in primary government net position in FY 2017-18 is primarily attributable to investment in capital projects. The $8.0 million increase in primary government net position in FY 2018-19 is primarily attributable to higher tax and general revenuesThe $700 thousand increase in primary government net position in FY 2019-20 is primarily attributable to increased investments in capital assetsThe $5.2 million increase in primary government net position in FY 2020-21 is primarily attributable to a higher than expected revenues and lower expenditures budgetedThe $4.9 million increase in primary government net position in FY 2021-22 is primarily attributable to a higher than expected tax revenuesThe $7.8 million increase in primary government net position in FY2022-23 is primarily due to increased operating grants and contributions, other revenues and the sewer charges as approved through the Prop 218 process in fiscal year 2019-20The $3.8 million increase in primary government net position in FY2023-24 is primarily due to increased capital contributions and grants.

CITY OF HALF MOON BAY
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
115
196
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Expenses:

Governmental activities:

General government 2,190,464 $ 3,725,642 $ 3,940,242 $ 5,030,648 $ 4,722,479 $ 4,981,025 $ 5,175,257 $ 6,008,499 $ 6,018,989 $ 7,811,794 $ Public safety 3,901,511 3,449,122 5,183,033 3,878,176 3,975,865 4,631,203 4,743,620 5,017,087 5,275,682 6,875,457 Public works 2,605,015 2,670,228 3,314,879 3,801,624 3,506,195 3,754,258 2,817,305 2,765,717 4,129,117 6,255,645 Recreation services 282,251 337,331 348,604 926,730 1,167,467 1,808,657 1,942,872 2,823,410 597,127 1,534,752 Planning 1,081,255 1,952,892 2,427,687 2,603,389 2,784,468 3,286,029 2,764,254 2,779,608 2,965,787 3,931,872 Community and Economic Development 843,267 1,894,276
Interest and fiscal charges 1,053,237 937,704 937,704 937,704 937,704 468,852 - - - - Total governmental activities expenses 11,113,733 13,072,919 16,152,149 17,178,271 17,094,178 18,930,024 17,443,308 19,394,321 19,829,969 28,303,796 Business-type activities:

Sewer 4,078,003 2,943,013 2,966,613 4,757,056 4,562,513 5,950,383 5,670,214 6,042,199 5,998,227 6,685,640 Total business-type activities expenses 4,078,003 2,943,013 2,966,613 4,757,056 4,562,513 5,950,383 5,670,214 6,042,199 5,998,227 6,685,640 Total primary government expenses 15,191,736 16,015,932 19,118,762 21,935,327 21,656,691 24,880,407 23,113,522 25,436,520 25,828,196 34,989,436 Program revenues:

Governmental activities:

Charges for services:

General government 105,737 $ 98,171 $ 20,738 $ 29,879 $ 97,755 $ 94,986 $ 17,962 $ 646,363 $ 687,941 $ 487,874 $ Public safety 107,738 118,204 95,883 961,407 64,011 159,631 138,299 105,983 79,661 120,980 Public works 423,449 407,342 452,260 672,979 392,876 332,903 383,211 360,649 442,582 432,066 Recreation services 550,144 588,890 624,771 841,581 630,725 494,433 987,511 1,176,088 1,113,689 1,166,447 Planning 457,237 560,073 505,373 213,701 293,316 165,686 314,178 520,110 558,369 298,171 Operating grants and contributions 1,903,151 390,970 1,166,559 932,873 1,390,373 786,552 4,123,613 2,544,520 3,628,574 1,285,182 Capital grants and contributions 596,856 7,915,220 607,526 6,940,211 5,090,594 627,168 3,145,690 1,647,350 1,677,758 6,738,537 Total governmental activities program revenues 4,144,312 10,078,870 3,473,110 10,592,631 7,959,650 2,661,359 9,110,464 7,001,063 8,188,574 10,529,257 Business-type activities:

Charges for services:

Sewer 5,105,502 4,715,919 4,524,358 4,261,126 4,533,846 4,540,020 4,477,159 5,005,399 5,994,167 6,207,200 Operating grants and contributions 45,628 - - - - - - - - Capital grants and contributions - - - - - - - - - 1,304,480 Total business-type activities - - - - - - - - - -
program revenues 5,151,130 4,715,919 4,524,358 4,261,126 4,533,846 4,540,020 4,477,159 5,005,399 5,994,167 7,511,680 Total primary government program revenues 9,295,442 14,794,789 7,997,468 14,853,757 12,493,496 7,201,379 13,587,623 12,006,462 14,182,741 18,040,937 Net revenues (expenses):

Governmental activities (6,969,421) $ (2,994,049) $ (12,679,039) $ (6,585,640) $ (9,134,528) $ (16,268,665) $ (8,332,844) $ (12,393,258) $ (11,641,395) $ (17,774,539) $ Business-type activities 1,073,127 1,772,906 1,557,745 (495,930) (28,667) (1,410,363) (1,193,055) (1,036,800) (4,060) 826,040 Total net revenues (expenses) (2) (5,896,294) (1,221,143) (11,121,294) (7,081,570) (9,163,195) (17,679,028) (9,525,899) (13,430,058) (11,645,455) (16,948,499)

CITY OF HALF MOON BAY
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
116
197
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

CITY OF HALF MOON BAY
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
General revenues and other changes in net position:

Governmental activities:

Taxes:

Property taxes 2,871,413 $ 3,116,710 $ 3,126,884 $ 3,379,657 $ 3,613,782 $ 3,667,867 $ 3,582,161 $ 4,592,317 $ 4,129,317 $ 4,283,589 $ Sales and use taxes 3,862,041 4,068,786 2,514,852 2,836,614 2,804,748 3,042,265 2,929,586 3,358,759 3,315,341 3,665,449 Transient occupancy taxes 5,433,394 5,935,558 6,024,855 6,434,808 6,828,108 5,291,821 4,817,532 9,442,518 8,852,640 8,167,938 Other taxes 832,390 808,224 919,666 1,038,546 1,242,286 1,346,187 1,304,943 1,341,327 1,276,299 1,343,633 Investment income 798,406 811,191 583,497 703,351 1,188,804 2,257,971 (96,482) (702,830) 865,654 2,439,990 Other general revenues 779,392 783,472 1,575,312 1,386,752 1,446,593 1,362,594 2,207,101 1,322,444 1,381,527 652,986 Transfers 982,301
Total governmental activities 14,577,036 15,523,941 14,745,066 15,779,728 17,124,321 16,968,705 14,744,841 19,354,535 19,820,778 21,535,886 Business-type activities:

Investment income 63,696 93,088 135,003 195,743 332,868 382,491 (49,678) (155,664) 129,865 242,911 Miscellaneous (250,000) (392,817) (482,199) (857,213) (235,565) 1,610,101 63,814 (840,891) (419,699) Transfers (982,301)
Total business-type activities (186,304) (299,729) (347,196) (661,470) 97,303 1,992,592 14,136 (996,555) (289,834) (739,390) Total primary government 14,390,732 15,224,212 14,397,870 15,118,258 17,221,624 18,961,297 14,758,977 18,357,980 19,530,944 20,796,496 Changes in net position:

Governmental activities 7,607,615 $ 12,529,892 $ 2,066,027 $ 9,194,088 $ 7,989,793 $ 700,040 $ 6,411,997 $ 6,961,277 $ 8,179,383 $ 3,761,347 $ Business-type activities 886,823 1,473,177 1,210,549 (1,157,400) 68,636 582,229 (1,178,919) (2,033,355) (293,894) 86,650 Total primary government (1) 8,494,438 $ 14,003,069 $ 3,276,576 $ 8,036,688 $ 8,058,429 $ 1,282,269 $ 5,233,078 $ 4,927,922 $ 7,885,489 $ 3,847,997 $ (1) Change in Net Assets in Primary Government:

FY 2014-15 increase in net position of $8.5 million is primarily due to higher tax revenues and timing of sewer-related capital spending.

FY 2015-16 increase in net position of $14 million is primarily due to higher tax revenues and timing of sewer-related capital spending. FY 2016-17 increase in net position of $3.2 million is primarily due to investment in infrastructure and capital projects.FY 2017-18 increase in net position of $8 million is primarily due to investment in capital projects.The $8.0 million increase in primary government net position in FY 2018-19 is primarily attributable to higher tax and general revenuesFY 2020-21 increase in net position of $5.2 million is primarily due to higher revenues from capital and operating grants/contributionsFY 2021-22 increase in net position of $4.9 million is primarily due to higher revenues from transient occupancy taxesFY 2022-23 increase in net position of $7.8 million is primarily due to increased operating grants and contributions, other revenues and the sewer charges as approved through the Prop 218 process in fiscal year 2019-20FY 2023-24 increase in net position of $3.8 million is primarily due to increased capital contributions and grants. (2) Total net expenses in FY 2019-20 increased by $8.5 million primarily for the final $10.9 million payment of the judgement obligation bond 117
198
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
General fund:

Nonspendable - $ - $ - $ - $ - $ - $ - $ - $ - $ - $
Committed 3,012,735 2,909,550 5,070,257 5,070,257 5,146,354 7,300,642 7,271,604 8,999,117 9,841,012 11,091,587 Assigned - - - - - - - - -
Unassigned 6,529,822 7,829,894 5,986,903 4,892,195 5,809,910 3,333,510 3,869,096 6,586,036 6,386,892 3,276,343 Total general fund (1) 9,542,557 $ 10,739,444 $ 11,057,160 $ 9,962,452 $ 10,956,264 $ 10,634,152 $ 11,140,700 $ 15,585,153 $ 16,227,904 $ 14,367,930 $ All other governmental funds:

Nonspendable 26,823,920 $ - $ - $ - $ 26,823,920 $ 26,823,920 $ 26,823,920 $ 26,823,920 $ 26,823,920 $ 26,823,920 $ Restricted 23,288,017 31,602,450 23,288,663 25,844,530 27,738,822 16,416,110 19,871,245 21,340,221 22,258,032 24,590,954Committed - 26,823,920 26,823,920 26,823,920 - - - - - - Assigned - - 5,611,038 2,161,189 1,244,495 2,806,125 3,069,792 2,288,175 3,215,073 2,233,226 Unassigned - - - - 2,364,020 - - - - -
Total all other governmental funds (2) 50,111,937 $ 58,426,370 $ 55,723,621 $ 54,829,639 $ 58,171,257 $ 46,046,155 $ 49,764,957 $ 50,452,316 $ 52,297,025 $ 53,648,100 $ 59,654,494 $ 69,165,814 $
(1) General Fund:

FY 2014-15 Nonspendable fund balance decrease is due to the land held for resale transfer from the General Fund to the newly created Land Asset Fund.FY 2015-16 Unassigned fund balance increase is primarily due to increase in tax revenue.FY 2016-17 Unassigned fund balance decrease is primarily due to increased investment in capital projects.FY 2017-18 Unassigned fund balance decrease is primarily due to investment in capital projects. FY 2018-19 Unassigned fund balance increase is primarily due to in tax and general revenuesFY 2019-20 Unassigned fund balance decrease is primarily due to lower revenues from TOTFY 2020-21 Unassigned fund balance increased primarily due to unexcepted revenue overperformance in TOTFY 2021-22 Unassigned fund balance increased primarily due to unexcepted revenue overperformance in TOT and vehicle in-lieu feesFY 2022-23 Unassigned fund balance decreased primarily due to a shortfall in Transient Occupancy tax revenues and more funds assigned to committed reverses per the City's Reserve PolicyFY 2023-24 Unassigned fund balance decreased primarily due to increases in public safety expenditures and decreases in TOT revenues (2) Other Governmental Funds:

FY 2014-15 Nonspendable fund balance increase is due to the land held for resale transfer from the General Fund to the newly created Land Asset Fund.FY 2015-16 Restricted fund balance increase is primarily due to a contribution of $6.0 million from the County of San Mateo for the library construction project.FY 2016-17 $2.7 million decrease is primarily due to progress on the Library Capital project.FY 2017-18 $890,000 decrease is primarily due to progress on the Library Capital project.

FY 2018-19 $3.0 M increase is primarily due to progress in capital projects FY 2019-20 $12.1 M decrease is primarily due to the final $10.9 million payment of the Judgement Obligation Bond FY 2020-21 $3.7 M increase is primarily due to the receipt of an one-time $2.6 million in-lieu fee FY 2021-22 $1 million increase is primarily due to capital contributions and funding for future capital expenditures FY 2022-23 $1.8 million increase is primarily due to operating grants and funding for future capital expenditures FY 2023-24 $1.3 million increase is primarily due to capital grants and contributions towards affordable housing efforts

CITY OF HALF MOON BAY
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
118
199
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Revenues:

Taxes 12,999,238 $ 13,929,278 $ 12,586,257 $ 13,638,171 $ 14,448,702 $ 13,180,918 $ 12,223,462 $ 18,670,447 $ 17,500,650 $ 17,575,488 Licenses and permits 394,931 379,749 444,388 370,269 377,873 521,121 597,590 543,965 1,062,066 306,282 Fines and forfeitures 83,812 102,202 79,132 171,873 189,415 140,238 108,937 70,383 32,232 81,445 Charges for services 765,457 806,642 701,163 1,255,479 1,165,640 1,173,171 1,306,842 1,552,251 1,432,304 1,454,141 Recreation fees/ Impact fees 625,166 717,469 1,173,275 1,065,005 2,700,943 304,827 2,988,507 188,114 296,256 - Investment income 798,408 772,575 549,489 703,354 1,225,128 1,164,650 (75,704) (722,249) 869,782 2,139,990 Rents and leases - 20,000 10,080 87,536 75,603 - - - 63,728 91,135 Intergovernmental revenues 2,260,890 8,058,785 1,069,157 1,910,615 2,074,855 1,506,209 4,232,648 4,008,756 4,714,737 8,023,719 Administrative fees 65 - - - - - - - - -
Miscellaneous 519,595 400,376 1,089,034 908,337 1,325,476 779,514 1,877,238 1,146,003 970,404 833,965 Total revenues 18,447,562 25,187,076 17,701,975 20,110,639 23,583,635 18,770,648 23,259,520 25,457,670 26,942,159 30,506,165 Expenditures
Current:

General government 2,727,404 3,582,831 3,143,214 3,968,569 3,445,355 3,281,719 3,543,362 3,954,480 4,976,923 5,360,469 Public safety 946,395 1,083,666 3,610,736 3,689,490 3,727,302 4,104,603 4,394,717 4,539,399 4,920,995 6,476,428 Public works 3,089,741 3,208,099 1,639,299 1,768,330 2,147,231 2,301,920 2,110,852 2,077,238 2,449,832 2,492,143 Recreation services 1,987,691 1,347,508 176,497 701,405 896,854 976,977 1,109,425 1,876,093 524,211 538,827 Planning services 142,020 183,328 2,353,980 2,505,066 2,686,651 3,156,081 2,662,112 2,628,557 2,873,331 4,065,293 Community and Economic Development 843,267 1,894,276
Capital outlay 2,745,770 4,437,029 7,766,781 18,996,455 5,027,468 4,088,777 5,955,565 3,038,936 6,442,855 8,435,024 Debt service:

Principal retirement (1) 4,655,000 - - - - 11,487,686 - 1,191,724 620,197 3,628,582 Interest and fiscal charges 1,053,237 937,704 937,704 937,704 937,704 468,852 - 68,277 55,105 97,016 Total expenditures 17,347,258 (2) 14,780,165 19,628,211 32,567,019 18,868,565 29,866,615 19,776,033 19,374,704 23,706,716 32,988,058 Excess (deficiency) of revenues over (under) expenditures 1,100,304 10,406,911 (1,926,236) (12,456,380) 4,715,070 (11,095,967) 3,483,487 6,082,966 3,235,443 (2,481,893) Other financing sources (uses):

Advanced Proceeds from San Mateo County 5,726,855 - - - - - Issuance of debt 2,035,000 421,373 693,387 3,200,000
Capital grants 5,726,855 726,000
Transfers in (2) 35,780,529 5,285,654 5,059,687 5,024,534 3,216,998 7,026,829 2,107,524 5,334,717 5,247,526 4,056,898 Transfers out (2) (36,062,453) (6,181,245) (5,518,484) (6,010,554) (4,322,638) (8,378,076) (3,400,661) (6,707,244) (6,688,896) (5,283,904) Total other financing sources (uses) (281,924) (895,591) (458,797) 10,467,690 (379,640) (1,351,247) 741,863 (951,154) (747,983) 1,972,994 Net change in fund balances (3) 818,380 $ 9,511,320 $ (2,385,033) $ (1,988,690) $ 4,335,430 $ (12,447,214) $ 4,225,350 $ 5,131,812 $ 2,487,460 $ (508,899) $ Debt service as a percentage of noncapital expenditures 39.1% 9.1% 7.9% 6.9% 6.8% 46.4% 0.0% 7.7% 3.9% 15.2% (1) In FY 2014-15 the City elected to completely pay off the 2009A Judgement Obligation Bonds. In FY 2019-20 the city paid off the 2009B Judgement Obligation Bond(2)(3) The net change in fund balance of $2.7 million in FY 2013-14 is higher tax revenues and grants received.

CITY OF HALF MOON BAY
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
The net increase in fund balance of $5.1 million in FY 2021-22 is primarily due to higher tax revenuesThe net change in fund balance of $9.5 million in FY 2015-16 is primarily due to higher tax revenues and a contribution of $6.0 million from the County of San Mateo for the library construction capital project that is scheduled to commence during fiscal year 2016-17.

The net change in fund balance of $15.6 million in FY 2012-13 is primarily due to receipt of one time insurance payment ($13.2 million), increase in general taxes, and revenue from the law enforcement services contract amendment that was negotiated in FY 2012-13.

The increase in transfers in FY 2014-15 is primarily due to the creation of and transfers to the Land Asset Capital Project Fund ($26.8 million) and the Library Capital The net decrease in fund balance of $2.4 million in FY 2016-17 is primarily due to progress on the Library Capital project.The net decrease in fund balance of $508 thousand in FY 2023-24 is primarily due to expenditures outpacing revenuesThe net decrease in fund balance of $12.4 million in FY 2019-20 is primarily due to the final $10.9 million payoff the judgement obligation bondThe net increase in fund balance of $4.3 million in FY 2018-19 is primarily due to increase in revenues and decrease in library project expendituresThe net decrease in fund balance of $1.9 million in FY 2017-18 is primarily due to progress on the Library Capital project.The net increase in fund balance of $4.2 million in FY 2020-21 is primarily due to higher revenues than anticipatedThe net increase in fund balance of $2.4 million in FY 2022-23 is primarily due to increased investment income and intergovernmental revenues. 119
200
Fiscal TOT
Year Ended Tax
June 30 Rate
2015 12%
2016 12%
2017 12%
2018 12%
2019 12%
2020 12%
2021 12%
2022 14%
2023 15%
2024 15%
Source: City of Half Moon Bay Finance Department

CITY OF HALF MOON BAY
Transient Occupancy Tax (TOT) Rate
Last Ten Fiscal Years
120
201
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
LODGING TYPEHotels/Motels 5,002,165 $ 5,643,075 $ 5,785,989 $ 6,078,131 $ 6,409,533 $ 4,852,270 $ 4,161,340 $ 8,309,989 $ 7,988,272 $ 7,248,083 $ B&Bs/ Inns / Cottages 101,393 99,062 60,671 68,729 66,079 104,715 105,823 441,900 169,545 181,552 RV Parks/Camps 281,880 148,191 150,019 170,855 159,065 164,658 241,705 233,898 224,713 233,479 Vacation Rentals 45,105 44,230 43,790 115,398 218,561 170,178 308,664 456,731 470,110 504,824 5,430,543 $ 5,934,558 $ 6,040,468 $ 6,433,114 $ 6,853,237 $ 5,291,821 $ 4,817,532 $ 9,442,518 $ 8,852,640 $ 8,167,938 $ (1) TOT information by individual establishment is confidential and therefore is not available to the public. TOT is the City's largest "own-source" revenue, as defined by GASB Statement No. 44.

Source: City of Half Moon Bay Finance Department
Totals

CITY OF HALF MOON BAY
Transient Occupancy Tax (TOT) by Lodging Type (BASE) (1) Last Ten Fiscal Years
As of June 30th
June 30,
121
202
Percent of Percent of
TOT Total TOT TOT Total TOT
TOT Taxpayer Type Collected Revenues Collected Revenues Hotels/Motels/Lodges $7,248,083 88.74% $ 4,583,970 92.09% Bed & Breakfasts and Inns $181,552 2.22% $ 114,610 2.30% RV Parks & Campgrounds $233,479 2.86% $ 243,467 4.89%
Vacation Rentals $504,824 6.18% $ 35,392 0.71%
$ 8,167,938 100.00% $ 4,977,439 100.00%
Source: City of Half Moon Bay Finance Department

CITY OF HALF MOON BAY
2023-24 2013-14
Current Year and Ten Years Prior
Transient Occupancy Taxpayers by Type of Establishment
122
203
Fiscal Year Judgment Total Total Percentage Debt
Ended Lease San Mateo Obligation Governmental Primary of Personal Per June 30 Financing County Advance Bonds Activities (2) Government Income (3) Capita 2015 - $ - $ 10,915,000 $ 10,915,000 $ 10,915,000 $ 22.46% 931 $ 2016 - - 10,915,000 10,915,000 10,915,000 21.33% 9312017 - - 10,915,000 10,915,000 10,915,000 21.35% 871 2018 - - 10,915,000 10,915,000 10,915,000 20.29% 867
2019 - - 10,915,000 10,915,000 10,915,000 17.32% 864
2020 - 5,154,170 - 5,154,170 5,154,170 8.03% 408
2021 2,035,000 5,154,170 - 7,189,170 7,189,170 11.35% 556 2022 2,410,020 4,008,798 - 6,418,818 6,418,818 9.17% 521 2023 3,055,896 3,436,112 - 6,492,008 6,492,008 9.55% 581 2024 3,200,000 2,863,426 - 6,063,426 6,063,426 7.58% 546 (1) Details regarding the City's outstanding debt can be found in the notes to the financial statements.(2) The City has no outstanding debt from Business-Type Activities.(3) Population information was obtained from the United States Census Bureau Governmental Activities

CITY OF HALF MOON BAY
Ratios of Outstanding Debt by Type (1)
Last Ten Fiscal Years
123
204
Fiscal Year Lease Judgment Percent of Debt
Ended Revenue Obligation Assessed Per
June 30 Bonds Bonds Total Value (1) Capita
2015 $ - $ 10,915 $ 10,915 0.0005% $ 931
2016 - 10,915 10,915 0.0004% 931
2017 - 10,915 10,915 0.0004% 871
2018 - 10,915 10,915 0.0004% 867
2019 - 10,915 10,915 0.0004% 864
2020 - - - 0.0000% -
2021 - - - 0.0000% -
2022 - - - 0.0000% -
2023 - - - 0.0000% -
2024 - - - 0.0000% -
General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). (1) Assessed value has been used because the actual value of taxable property is not readily available in the State of California. Percentages less than 0.0000% are not shown.

Outstanding General Bonded Debt

CITY OF HALF MOON BAY
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
(In Thousands, except Per Capita)
124
205
2023-24 Assessed Value $ 3,957,919,060
Percentage Total Debt City's Share of
Applicable (1) 6/30/2024 Debt 06/30/24
Overlapping Tax and Assessment Debt:

San Mateo Community College District 1.285% 682,237,216 $ 8,766,748 $ Cabrillo Unified School District 45.864% 134,615,000 61,739,824 Midpeninsula Regional Open Space District 0.974% 80,700,000 786,018 Total Overlapping Tax and Assessment Debt 897,552,216 $ 71,292,590 $ Ratio to Assessed Valuation:

Total Overlapping Tax and Assessment Debt 1.80%
Direct and Overlapping General Fund Debt:

San Mateo County General Fund Obligations 1.285% $ 565,146,645 $ 7,262,134 San Mateo County Board of Education Certificates of Participation 1.285% 5,735,000 73,695 Midpeninsula Regional Open Space District General Fund Obligations 0.974% 79,795,600 777,209 San Mateo County Mosquito and Vector Control District General Fund O 1.285% 3,404,654 43,750 Direct: City of Half Moon Bay Loan Agreement 100% 2,863,426 2,863,426 Direct: County of San Mateo Financing Agreement (880 Stone Pine) 100% 3,200,000 3,200,000 Total Direct Debt $ 6,063,426
Total Overlapping Debt 79,449,378
Combined Total Debt $ 85,512,804 (2)
(1) 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. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Ratios to 2023-24 Assessed Valuation:

Total Overlapping Tax and Assessment Debt 1.80%
Total Direct Debt ($6,063,426) 0.15%
Combined Total Debt 2.16%
Source: California Municipal Statistics, Inc. (Austin Busch - [email protected])

CITY OF HALF MOON BAY
Direct and Overlapping Debt
June 30, 2024
125
206
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Assessed valuation 2,553,357,622 $ 2,733,242,180 $ 2,755,768,400 $ 2,893,093,932 $ $3,123,075,037 $3,303,922,465 $3,426,640,450 $3,541,390,900 $3,771,479,639 $3,957,919,060 Conversion percentage 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% Adjusted assessed valuation 638,339,406 683,310,545 688,942,100 723,273,483 780,768,759 825,980,616 856,660,113 885,347,725 942,869,910 989,479,765 Debt limit percentage 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% Debt limit 95,750,911 102,496,582 103,341,315 108,491,022 117,115,314 123,897,092 128,499,017 132,802,159 141,430,486 148,421,965 Total net debt applicable to limit:

General obligation bonds 10,915,000 10,915,000 10,915,000 10,915,000 10,915,000 10,915,000 - - - - Legal debt margin 84,835,911 $ 91,581,582 $ 92,426,315 $ 97,576,022 $ 106,200,314 $ 112,982,092 $ 128,499,017 $ 132,802,159 $ 141,430,486 $ 148,421,965 $ Total debt applicable to the limit
as a percentage of debt limit 11.4% 10.6% 10.6% 10.1% 9.3% 8.8% 0.0% 0.0% 0.0% 0.0% Sources: City Finance Department
San Mateo County Tax Assessor Combined Tax Roll 650-363-4777 The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for the parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25 % level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments located within the state.

CITY OF HALF MOON BAY
Legal Debt Margin Information
Last Ten Fiscal Years
June 30
126
207
Percent of Percent of
Number of Total Number of Total
Employer Employees Employment Employees Employment
Ritz Carlton Hotel 275 9.44% 100 2.95%
New Leaf Community Market 105 3.60% 60 1.77%
Sam's Chowder House 98 3.36% 160 4.72%
Safeway Store 94 3.23% 115 3.40%
Rocket Farms Inc. 59 2.03% 131 3.87%
Pasta Moon Inc 49 1.68%
Sea Crest School 49 1.68%
Hassett Hardware 45 1.54%
Mullins Bar and Grill 43 1.48%
Beach House LLC 42 1.44% 44 1.30%
Its Italia Pizzeria 49 1.45%
Half Moon Bay Golf Links 48 1.42%
Damasco & Associates LLP 48
CVS Pharmacy 43 1.27%
SP Plus
San Benito House
McMahon Floral
Subtotal Top Ten Employers 859 29.49% 798 23.56%
Total Employment 2,913 100.00% 3,387 100.00%
Source: Employer information from City of Half Moon Bay HdL Business License System.
2014

CITY OF HALF MOON BAY
Principal Employers
6/30/2024 and Ten Years Prior
2024
"Total Employment" as used above represents the total employment of all employers with business licenses located within City limits.
127
208
Function 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 General Government 17 18 19 19 19 21 17 20 20 21
Public Safety - - - - - - - - - -
Public Works/Maintenance 7 9 10 10 13 16 14 16 16 15
Community/Recreation Services 0 0 2 2 4 5 4 5 6 6
Planning 1 3 5 5 6 7 7 8 8 7
Total 26 31 36 36 42 48 42 48 50 50
Note: General government includes five City Council members as well as Administration and Finance staff.Source: City of Half Moon Bay Finance Department

CITY OF HALF MOON BAY
Full-time Equivalent City Employees By Function
Last Ten Fiscal Years
June 30
128
209
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Police: (1)
Arrests - Part 1 crimes 30 44 38 48 54 71 56 78 33 19
Traffic citations - Moving 436 527 489 921 2,128 2,517 1,664 1,819 636 568 Traffic citations - Parking 1,065 1,598 1,212 3,994 3,465 2,444 1,698 872 553 2,253 Parks and Recreation: (2)
Number of recreation classes 87 88 75 159 105 123 41 112 99 91 Number of facility rentals (3) 42 110 88 324 397 389 200 459 407 552 Building and Code Enforcement: (4)
Number of permits issued (est.) 487 413 460 413 473 450 352 456 441 405 Number of plan checks (est.) 110 105 220 166 205 237 185 157 200 150 Number of inspections (est.) 2,355 2,820 2,216 2,520 2,442 2,057 1,839 1654 1,538 2,138 Planning: (3)
Planning Commission Meetings 20 15 12 20 23 20 23 22 13 18 Number of permits processed 70 111 47 43 102 145 89 94 154 78 (1) The City started contracting with the San Mateo County Sheriff Office in June 2011. Traffic and parking citation counts for FY 2011-12 are from June 2011 to April 2012.(2) In FY 2011-12, the City contracted out Recreation services to the City of San Carlos. In FY 2014-15, it changed to the Boys & Girls Club. All programs are provided directly to the public by the contractors.
(3) In FY 2016-17, the City re-assumed responsibility for the Parks and Recreation program. The facility rentals count for FY 2016-17 is estimated based on rental revenue received.
(4) Information will continue to be added as made available.

Sources: City of Half Moon Bay Departments

CITY OF HALF MOON BAY
Operating Indicators By Function
Last Ten Fiscal Years
June 30
129
210
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Police:

Sheriff Substation/EOC 1 1 1 1 1 1 1 1 1 1
Public Works:

Streets (miles) 35 35 29 29 29 28 28 28 28 28
Parks 9 9 9 9 9 9 9 9 9 9
Community Centers 1 1 1 1 1 1 1 1 1 1 Sewer lines (miles) 37 37 37 37 37 38 38 38 38 38 Library 1 1 1 1 1 1
Facilities/Buildings 6 6 6 6 6 6 6 6 6 6
Bike Trails (miles) 6 7 7 7 7 7 7 7 7 7
Land (acres) 176 176 176 176 176 176 197 199 199 199
Administration:

Facilities/Buildings 1 1 1 1 1 1 1 1 1 1
Source: City of Half Moon Bay Finance Department
June 30

CITY OF HALF MOON BAY
Capital Asset Statistics By Function
Last Ten Fiscal Years
130
211
2023/24 USE CATEGORY SUMMARY

THE CITY OF HALF MOON BAY

BASIC PROPERTY VALUE TABLE
Category Parcels Assessed Value Net Taxable Value
Residential 3,815 $3,284,965,233 (80.6%) $3,228,860,043 (81.6%) Commercial 219 $532,831,023 (13.1%) $519,423,135 (13.1%) Industrial 16 $12,248,260 (0.3%) $12,248,260 (0.3%)
Agricultural 40 $32,491,403 (0.8%) $16,525,146 (0.4%)
Govt. Owned 97 $77,935 (0.0%) $0 (0.0%)
Institutional 20 $19,054,711 (0.5%) $320,500 (0.0%)
Miscellaneous 12 $14,321,066 (0.4%) $14,321,066 (0.4%)
Recreational 24 $36,715,220 (0.9%) $36,361,745 (0.9%)
Vacant 1,774 $88,060,076 (2.2%) $75,850,962 (1.9%)
Unsecured [258] $55,029,359 (1.4%) $54,008,203 (1.4%)
TOTALS 6,017 $4,075,794,286 $3,957,919,060

81.6%
Residential

13.1%
Commercial

5.3%
Others

NET TAXABLE VALUE

80.6%
Residential

13.1%
Commercial

2.2%
Vacant

4.2%
Others

ASSESSED VALUE
This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone
Data Source: San Mateo County Assessor 2023/24 Combined Tax Rolls Prepared On 8/19/2024 By MV 131
212

PROPERTY TAX DOLLAR BREAKDOWN

THE CITY OF HALF MOON BAY
$ 0.00330 County Harbor District
$ 0.00195 Bay Area, Air Pollution
$ 0.00041 Resource Conservation
$ 1.0000
$ 0.3591 Cabrillo Unified General Purpose
$ 0.09733 ERAF Share of San Mateo County
$ 0.1242 San Mateo County
$ 0.1869 Coastside Fire
$ 0.01122 ERAF Share of Half Moon Bay General Fund
$ 0.0553 Half Moon Bay General Fund
$ 0.0634 San Mateo Junior College General Purpose
$ 0.0330 County Education Tax
$ 0.0323 County Library
$ 0.0317 Coastside County Water
ATI (Annual Tax Increment) Ratios for Tax Rate Area 017-005, Excluding Redevelopment Factors & Additional Debt Service This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone Data Source: San Mateo County Assessor 2023/24 Annual Tax Increment Tables Prepared On 8/19/2024 By MV 132
213
2023/24 ROLL SUMMARY

THE CITY OF HALF MOON BAY
Taxable Property Values
Secured Nonunitary Utilities Unsecured
1,918,472,049
2,083,585,181
16,370,342
2,337,355
Aircraft
Fixtures
Personal Property
Improvements
Land
TRAs
Parcels
Values
Total Value $4,020,764,927
0 $54,983,490
0 $0
0 45,869
10,945,331
40,170,442
3,795,688
72,029
7 258
0 0
0 0
6,017 0
8 Total Net Value $3,903,910,857
Total Exemptions* $116,854,070
Homeowners* 15,177,400
Aircraft
Fixtures 39,754
Personal Property 1,061,203
Real Estate 115,753,113
Exemptions
0 $1,021,156
$53,962,334
0 0
$0
0 $0
7,000
0 330,130
413,550
277,476
0 0
Combined Values Total
Total Values $4,075,748,417
Net Total Values
Total Exemptions
$3,957,873,191
$117,875,226
Net Aircraft Values $45,869
* Note: Homeowner Exemptions are not included in Total Exemptions Totals do not Include Aircraft Values or Exemptions
This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone
Data Source: San Mateo County Assessor 2023/24 Combined Tax Rolls Prepared On 8/19/2024 By MV 133
214

NET TAXABLE ASSESSED VALUE HISTORY

THE CITY OF HALF MOON BAY
2014/15 - 2023/24 Taxable Property Values
Lien Year Secured Unsecured SBE Nonunitary Net Total AV % Change 2014/15 $2,454,848,902 $42,658,908 $0 2,497,507,810
2015/16 $2,609,284,214 $53,103,728 $0 2,662,387,942 6.60% 2016/17 $2,716,280,909 $39,462,822 $0 2,755,743,731 3.51% 2017/18 $2,868,900,977 $40,418,385 $0 2,909,319,362 5.57% 2018/19 $3,095,123,190 $44,156,277 $0 3,139,279,467 7.90% 2019/20 $3,261,227,148 $40,695,317 $0 3,301,922,465 5.18% 2020/21 $3,386,815,056 $39,825,394 $0 3,426,640,450 3.78% 2021/22 $3,495,494,766 $45,896,134 $0 3,541,390,900 3.35% 2022/23 $3,722,198,497 $49,344,505 $0 3,771,543,002 6.50% 2023/24 $3,903,910,857 $54,008,203 $0 3,957,919,060 4.94% Annual Growth Rate % 5.25%
$0
$500,000,000
$1,000,000,000
$1,500,000,000
$2,000,000,000
$2,500,000,000
$3,000,000,000
$3,500,000,000
$4,000,000,000
2014/152015/162016/172017/182018/192019/202020/212021/222022/232023/24 SBE Nonunitary Unsecured Secured
* Net AV changes less than two percent are in purple font. Negative Net AV percent changes are in red.

Annual Growth Rate (CAGR) is calculated as the mean annualized growth rate for compounding values over a given time period.

This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone Data Source: San Mateo County Assessor 0/ - 2023/24 Combined Tax Rolls Prepared On 8/19/2024 By MV 134
215

ASSESSED VALUE OF TAXABLE PROPERTY

THE CITY OF HALF MOON BAY
2014/15 - 2023/24 Taxable Property Values
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Residential 1,986,554,631 2,128,750,156 2,238,878,627 2,365,335,848 2,496,961,916 2,652,141,529 2,769,600,677 2,887,213,237 3,075,165,815 3,228,860,043 Commercial 346,707,418 356,041,843 363,813,823 372,002,147 457,418,903 467,790,599 476,253,451 476,165,638 505,408,881 519,423,135 Industrial 6,172,772 6,292,015 6,801,114 7,185,938 8,419,613 9,374,259 9,561,139 9,740,069 10,958,701 12,248,260 Agricultural 17,322,251 16,208,520 15,605,023 15,866,702 16,197,166 16,525,146 Dry Farm 3,496,499 3,786,377 4,241,537 4,358,514
Govt. Owned 0 0 0 0 0 0
Institutional 272,021 277,456 281,685 309,882 315,819 298,922 1,689,318 1,938,117 314,217 320,500 Irrigated 4,862,761 5,333,856 4,324,786 4,411,271
Miscellaneous 22,681,808 23,460,537 14,211,644 17,677,501 16,786,985 15,398,633 16,274,069 13,822,133 14,050,543 14,321,066 Recreational 38,874,879 39,568,823 40,290,547 41,062,725 42,118,338 43,356,325 35,379,201 31,885,243 33,842,367 36,361,745 Vacant 45,226,113 45,773,151 43,437,146 56,557,151 55,779,365 56,658,361 62,452,178 58,863,627 66,260,807 75,850,962 Unsecured 42,658,908 53,103,728 39,462,822 40,418,385 44,156,277 40,695,317 39,825,394 45,896,134 49,344,505 54,008,203 Unknown 0
TOTALS 2,497,507,810 2,662,387,942 2,755,743,731 2,909,319,362 3,139,279,467 3,301,922,465 3,426,640,450 3,541,390,900 3,771,543,002 3,957,919,060 Total Direct Rate 0.05818 0.05818 0.05819 0.05819 0.05821 0.05821 0.05821 0.05819 0.05818 0.05819 Category
Notes:

Exempt values are not included in Total.

In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of 1%, based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.

This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone Prepared On 8/19/2024 By MV Data Source: San Mateo County Assessor 2014/15 - 2023/24 Combined Tax Rolls 135
216
Top Property Owners Based On Net Values

THE CITY OF HALF MOON BAY
2023/24 TOP TEN PROPERTY TAXPAYERS
Owner Secured Unsecured Combined Primary Use &
Primary Agency Parcels Value Value Parcels Value
% of
Net AV
% of
Net AV
% of
Net AV
1) 2 1 $222,669,071 $6,000 $222,675,071
Commercial

5.70% 0.01% 5.63%
Half Moon Bay General Fund

SHC HALF MOON BAY LLC
(Pending Appeals On Parcels)
2) 18 $34,920,332 $34,920,332
Recreational

0.89% 0.88%
Half Moon Bay General Fund

OCEAN COLONY PARTNERS LP
3) 3 $31,715,732 $31,715,732
Commercial

0.81% 0.80%
Half Moon Bay General Fund

HMB MUSICH LLC
4) 1 $23,508,000 $23,508,000
Commercial

0.60% 0.59%
Half Moon Bay General Fund

HALF MOON BAY LODGE LLC
5) 1 $18,157,691 $18,157,691
Unsecured

33.62% 0.46%
Half Moon Bay General Fund

ROCKET FARMS INC
6) 27 1 $17,535,925 $67,807 $17,603,732
Commercial

0.45% 0.13% 0.44%
Half Moon Bay General Fund

KEET NERHAN
7) 9 $15,941,439 $15,941,439
Commercial

0.41% 0.40%
Half Moon Bay General Fund

PROFESSIONAL PENINSULA PROPERTIES LLC
8) 1 $9,807,379 $9,807,379
Commercial

0.25% 0.25%
Half Moon Bay General Fund

LONGS DRUG STORE INC
9) 3 $7,911,679 $7,911,679
Commercial

0.20% 0.20%
Half Moon Bay General Fund

CASTRO PARTNERS LLC
10) 1 $7,305,217 $7,305,217
Commercial

0.19% 0.18%
Half Moon Bay General Fund

ABOLMOLUKI BAHRAM TRUST

33.76% 9.51% $389,546,272 $18,231,498 $371,314,774 3 65 Top Ten Total 9.84% $54,008,203 $3,903,910,857 City Total $3,957,919,060
Top Owners last edited on 8/16/24 by maheav using sales through 06/30/24 (Version r.1) This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone Prepared On 8/19/2024 By MV Data Source: San Mateo County Assessor 2023/24 Combined Tax Rolls and the SBE Non Unitary Tax Roll 136
217
Top Property Owners Based On Net Values

THE CITY OF HALF MOON BAY
2014/15 TOP TEN PROPERTY TAXPAYERS
Owner Secured Unsecured Combined Primary Use &
Primary Agency Parcels Value Value Parcels Value
% of
Net AV
% of
Net AV
% of
Net AV
1) 2 1 $138,617,491 $6,000 $138,623,491
Commercial

5.65% 0.01% 5.55%
Half Moon Bay General Fund

SHC HALF MOON BAY LLC
(Pending Appeals On Parcels)
2) 24 $43,784,059 $43,784,059
Recreational

1.78% 1.75%
Half Moon Bay General Fund

OCEAN COLONY PARTNERS L P
3) 32 2 $22,491,446 $61,200 $22,552,646
Commercial

0.92% 0.14% 0.90%
Half Moon Bay General Fund

KEET NERHAN
4) 3 $14,602,258 $14,602,258
Commercial

0.59% 0.58%
Half Moon Bay General Fund

REGENCY CENTERS LP
5) 3 $12,204,155 $12,204,155
Miscellaneous

0.50% 0.49%
Half Moon Bay General Fund

HMB CAPITAL LLC
6) 1 $10,306,579 $10,306,579
Commercial

0.42% 0.41%
Half Moon Bay General Fund

IWF HALF MOON BAY LLC
7) 1 $8,252,260 $8,252,260
Commercial

0.34% 0.33%
Half Moon Bay General Fund

LONGS DRUG STORE INC
8) 3 $8,243,535 $8,243,535
Commercial

0.34% 0.33%
Half Moon Bay General Fund

CASTRO PARTNERS LLC
9) 2 $8,164,614 $8,164,614
Unsecured

19.14% 0.33%
Half Moon Bay General Fund

COMCAST OF CALIFORNIA
10) 1 $6,506,405 $6,506,405
Commercial

0.27% 0.26%
Half Moon Bay General Fund

NETREIT INC

19.30% 10.80% $273,240,002 $8,231,814 $265,008,188 5 70 Top Ten Total 10.94% $42,658,908 $2,454,848,902 City Total $2,497,507,810
Top Owners last edited on 8/7/15 by maheav using sales through 06/30/15 (Version r.1) This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone Prepared On 8/19/2024 By MV Data Source: San Mateo County Assessor 2014/15 Combined Tax Rolls and the SBE Non Unitary Tax Roll 137
218

DIRECT & OVERLAPPING PROPERTY TAX RATES
(RATE PER $100 OF TAXABLE VALUE)

THE CITY OF HALF MOON BAY
Last 10 Fiscal Years
Agency 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Basic Levy¹ 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 Cabrillo Unified Bond 0.07040 0.07260 0.08320 0.07510 0.07110 0.11510 0.08950 0.07670 0.07910 0.07310 Mid-Penninsula Regional Open Space 0.00000 0.00000 0.00000 0.00000 0.00000 0.00160 0.00150 0.00150 0.00130 0.00120 San Mateo Community College 2005 Series B 0.00000 0.00000 0.00000 0.00000 0.00000 0.00350 0.00370 0.00000 0.00000 0.00000 San Mateo Junior College 0.01900 0.02500 0.02470 0.02350 0.01750 0.02310 0.01760 0.00000 0.00000 0.00000 San Mateo Junior Comm College 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.00000 0.02270 0.01930 0.01900 Total Direct & Overlapping² Tax Rates 1.08940 1.09760 1.10790 1.09860 1.08860 1.14330 1.11230 1.10090 1.09970 1.09330 City's Share of 1% Levy Per Prop 13³ 0.05525 0.05525 0.05525 0.05525 0.05526 0.05526 0.05526 0.05525 0.05525 0.05526 Voter Approved City Debt Rate
Redevelopment Rate⁴
Total Direct Rate⁵ 0.05818 0.05818 0.05819 0.05819 0.05821 0.05821 0.05821 0.05819 0.05818 0.05819 Notes:
¹In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds. ²Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all property owners. ³City's Share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the City. The ERAF portion of the City's Levy has been subtracted where known.
⁴Redevelopment Rate is based on the largest RDA tax rate area and only includes rate(s) from indebtedness adopted prior to 1989 per California State statute. RDA direct and overlapping rates are applied only to the incremental property values. The approval of ABX1 26 eliminated Redevelopment from the State of California for the fiscal year 2012/13 and years thereafter. ⁵Total Direct Rate is the weighted average of all individual direct rates applied by the City/Agency preparing the statistical section information and excludes revenues derived from aircraft. Beginning in 2013/14 the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognized enforceable obligations are assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the City/Agency in the same proportions as general fund revenue.

This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone Data Source: San Mateo County Assessor 2014/15 - 2023/24 Tax Rate Table Prepared On 8/19/2024 By MV 138
219

DEMOGRAPHIC AND ECONOMIC STATISTICS

THE CITY OF HALF MOON BAY
Median Age
% of Pop 25+ with
High School Degree
% of Pop 25+ with
Bachelor's Degree
Personal Income
(In Thousands)
Calendar
Year Population
Unemployment
Rate
Per Capita
Personal Income

44.8 82.4% 45.3% $600,059 2014 11,727 4.1% $51,169

44.7 84.0% 47.3% $640,547 2015 12,528 3.3% $51,129

45.8 83.8% 46.7% $677,251 2016 12,591 2.9% $53,788

47.1 85.8% 48.3% $796,455 2017 12,639 2.3% $63,015

47.3 84.9% 45.5% $810,881 2018 12,631 1.6% $64,197

45.3 87.1% 47.5% $804,495 2019 12,431 1.6% $64,716

46.8 86.2% 50.3% $898,800 2020 12,309 5.6% $73,019

47.8 88.3% 53.3% $881,941 2021 11,308 1.5% $77,992

44.9 87.9% 50.4% $801,565 2022 11,226 1.1% $71,402

48.3 92.1% 54.6% $930,463 2023 11,238 1.4% $82,796
85,000
80,000
75,000
70,000
65,000
60,000
55,000
50,000
6 5
4 3
2 1
0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Per Capita Pers Income Unemployment Rate
Per Capita Personal Income
Unemployment Rate
Personal Income and Unemployment
0 8,000
6,000
4,000
2,000
10,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Less Than High School High School Graduate College Graduate Population
Education Level Attained for Population 25
and Over
Notes and Data Sources:

Population: California State Department of Finance. Unemployment Data: California Employment Development Department 2000-2009 Income, Age, and Education Data: ESRI - Demographic Estimates are based on the last available Census. Projections are developed by incorporating all of the prior census data released to date. Demographic Data is totaled from Census Block Groups that overlap the City's boundaries 2010 and later - Income, Age and Education Data - US Census Bureau, most recent American Community Survey This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone Prepared On 8/19/2024 By MV 139
220

SALES VALUE HISTORY

THE CITY OF HALF MOON BAY
Single Family Residential Full Value Sales 01/01/2022 - 6/30/2024) Year Full Value Sales Average Price Median Price Median % Change 2022 118 $1,717,725 $1,521,500
2023 92 $1,553,372 $1,492,500 -1.91%
2024 40 $1,889,575 $1,750,000 17.25%
$0
$400,000
$800,000
$1,200,000
$1,600,000
$2,000,000
202220232024
Median Price Avg Price
Year
Sales Price
* Multiparcel transfers, quitclaim deeds, trust transfers, timeshares, and partial sales are excluded from this analysis.

This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone
Data Source: San Mateo County Recorder Prepared On 8/19/2024 By MV 140
221

INDEPENDENT AUDITOR REPORT ON

INTERNAL CONTROL OVER FINANCIAL REPORTING

AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN

AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE

WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Members of the City of Council
City of Half Moon Bay, 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 basic financial statements of the City of Half Moon Bay (City), California, as of and for the year ended June 30, 2024, and have issued our report thereon dated December 3, 2024.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’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 City’s internal control.

Accordingly, we do not express an opinion on the effectiveness of the City’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 City’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.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, 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 that are required to be reported under Government Auditing Standards.
141
222
We have also issued a separate Memorandum on Internal Control dated December 3, 2024 which is an integral part of our audit and should be read in conjunction with this report.

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 City’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 City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Pleasant Hill, California
December 3, 2024
142
223
Resolution No. C-2024-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HALF MOON BAY TO ACCEPT THE CITY’S ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR) FOR THE FISCAL YEAR ENDING JUNE 30, 2024
WHEREAS, the City of Half Moon Bay contracted with the audit firm of Maze & Associates to conduct an audit of the City’s financial records in accordance with Governmental Accounting Standards Board (GASB) Statement 34; and
WHEREAS, the financial statements for the Fiscal Year ending June 30, 2024 as prepared by said firm have been completed; and
WHEREAS, it is recommended that the City Council accept the financial statements, known as the Annual Comprehensive Financial Report (ACFR); NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Half Moon Bay hereby adopts a resolution to accept the City’s Annual Comprehensive Financial Report (ACFR) as prepared by Maze & Associates for the Fiscal Year ending June 30, 2024. ***************************************************************** I, the undersigned, hereby certify that the foregoing Resolution was duly passed and adopted on the 16th day of December, 2024 by the City Council of Half Moon Bay by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:

ATTEST: APPROVED:
___________________________ _____________________________ Jessica Blair, City Clerk , Mayor
224

BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY

AGENDA REPORT
For meeting of: December 16, 2024
TO: Honorable Mayor and City Council
VIA: Matthew Chidester, City Manager
FROM: Jessica Blair, Communications Director / City Clerk TITLE: 2025 CALENDAR OF CITY COUNCIL MEETINGS
______________________________________________________________________________ RECOMMENDATION:

By motion, adopt the City Council Calendar for 2025.

FISCAL IMPACT:

There is no fiscal impact associated with this action.

STRATEGIC ELEMENT:

This action supports the Inclusive Governance Element of the Strategic Plan.

DISCUSSION:

The following parameters should be considered when determining meeting dates:
• Hold at least one meeting every month (i.e. do not cancel two meetings in a row) • Continue to hold two meetings in June due to the budget adoption process • Continue to hold two meetings in December due to the customarily high volume of agenda items in December, including the Council reorganization Staff suggests holding the meetings on the first and third Tuesdays of each month with the following exceptions:

Meeting Date Consideration
January 7, 2025 City Holiday Closure affects packet production.

July 8, 2025 The first meeting of July has been cancelled each of the past 12 years.

August 5, 2025 Traditional time many city and civic groups go “dark” and a frequent time for family travel; however, this schedule allows for one meeting to be held in August. Additionally, National Night Out is held the first Tuesday of August, an event which the City participates in and supports.

In addition, please note that Special City Council meetings may be called, and often are during budget preparation.

ATTACHMENT: 2025 Calendar of City Council Meetings
225

CITY OF HALF MOON BAY
2025 CALENDAR OF CITY COUNCIL MEETINGS
January 2025
January 7, 2025 Cancelled
January 21, 2025 Regular Meeting
February 2025
February 4, 2025 Regular Meeting
February 18, 2025 Regular Meeting
March 2025
March 4, 2025 Regular Meeting
March 18, 2025 Regular Meeting
April 2025
April 8, 2025 Regular Meeting
April 22, 2025 Regular Meeting
May 2025
May 6, 2025 Regular Meeting
May 20, 2025 Regular Meeting
June 2025
June 3, 2025 Regular Meeting
June 17, 2025 Regular Meeting
July 2025
July 8, 2025 Cancelled
July 15, 2025 Regular Meeting
August 2025
August 5, 2025 Cancelled
August 19, 2025 Regular Meeting
September 2025
September 2, 2025 Regular Meeting
September 16, 2025 Regular Meeting
October 2025
October 7, 2025 Regular Meeting
October 21, 2025 Regular Meeting
November 2025
November 4, 2025 Regular Meeting
November 18, 2025 Regular Meeting
December 2025
December 2, 2025 Regular Meeting
December 16, 2025 Regular Meeting
226

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Half Moon Bay City CouncilDecember 16, 2024

Half Moon Bay City Council
December 16, 2024