HESPERIA CITY COUNCIL
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
HOUSING AUTHORITY
COMMUNITY DEVELOPMENT COMMISSION
WATER DISTRICT
Meeting Agenda
Tuesday, January 21, 2025
Closed Session - 4:30 PM
Regular Meeting - 6:30 PM
City Council Chambers
9700 Seventh Ave., Hesperia CA, 92345
City Clerk's Office: (760) 947-1007
City Council Members
Allison Lee, Mayor
Cameron Gregg, Mayor Pro Tem
Brigit Bennington, Council Member
Chris Ochoa, Council Member
Josh Pullen, Council Member
Rachel Molina, City Manager
Pam K. Lee, City Attorney
NOTE: In compliance with the Americans with Disability Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (760) 947-1007 or (760) 947-1026. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility.
To leave a Public Comment by phone, call and leave a recorded message at (760) 947-1056 up to 5:30 pm on the day of the scheduled meeting. City Council meetings may be viewed live or after the event on the City’s website at www.cityofhesperia.us.
January 21, 2025City Council Meeting Agenda
REGULAR MEETING AGENDA
HESPERIA CITY COUNCIL
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
HESPERIA HOUSING AUTHORITY
HESPERIA COMMUNITY DEVELOPMENT COMMISSION
HESPERIA WATER DISTRICT
9700 7th Avenue, Council Chambers, Hesperia, CA 92345
As a courtesy, please silence your cell phones and other electronic devices while the meeting is in session. Thank you.
Prior to action of the Council, any member of the audience will have the opportunity to address the legislative body on any item listed on the agenda, including those on the Consent Calendar.
Individuals wishing to speak during General Public Comments or on a particular numbered item must submit a speaker slip to the City Clerk with the agenda item noted. Speaker slips should be turned in prior to the public comment portion of the agenda or before an agenda item is discussed. Comments will be limited to three minutes for General Public Comments, Consent Calendar items and New Business items. Comments are limited to five minutes for Public Hearing items.
In compliance with the Brown Act, the City Council may not discuss or take action on non-agenda items or engage in question and answer sessions with the public. The City Council may ask brief questions for clarification; provide a reference to staff or other resources for factual information and direct staff to add an item to a subsequent meeting.
CLOSED SESSION - 4:30 PM
Roll Call
Mayor Allison Lee
Mayor Pro Tem Cameron Gregg
Council Member Brigit Bennington
Council Member Chris Ochoa
Council Member Josh Pullen
Conference with Legal Counsel - Potential Litigation:
Government Code Section 54956.9(d)2
1. Two (2) Cases
Conference with Legal Counsel – Existing Litigation
Government Code Section 54956.9(d)1
1. Sully-Miller Contracting, et al. v. City of Hesperia et al., SBSC Case No.
CIVSB2410614
January 21, 2025City Council Meeting Agenda
CALL TO ORDER - 6:30 PM
A. Invocation
B. Pledge of Allegiance to the Flag
C. Roll Call
Mayor Allison Lee
Mayor Pro Tem Cameron Gregg
Council Member Brigit Bennington
Council Member Chris Ochoa
Council Member Josh Pullen
D. Agenda Revisions and Announcements by City Clerk
E. Closed Session Reports by City Attorney
ANNOUNCEMENTS/PRESENTATIONS
1. Presentation to Hesperia High School's Democrats club for receiving the California Young Democrats' Outstanding High School Chapter of the Year Award.
GENERAL PUBLIC COMMENTS (For items and matters not listed on the agenda) Individuals wishing to speak during General Public Comments or on a particular numbered item are requested to submit a speaker slip to the City Clerk with the agenda item noted. Speaker slips should be turned in prior to the public comment portion of the joint agenda or before an agenda item is discussed. Comments will be limited to three minutes for General Public Comments, Consent Calendar items and New Business items. Comments are limited to five minutes for Public Hearing items.
In compliance with the Brown Act, the City Council may not discuss or take action on non-agenda items or engage in question and answer sessions with the public. The City Council may ask brief questions for clarification; provide a reference to staff or other resources for factual information and direct staff to add an item to a subsequent meeting.
JOINT CONSENT CALENDAR
1. Consideration of the Draft Minutes from the Regular Meeting held Tuesday, December 17, 2024.
Recommended Action:
It
is recommended that the City Council approve the Draft Minutes from the Regular Meeting held Tuesday, December 17, 2024.
Staff Person: Assistant City Clerk Erin Baum
Draft CC Min 2024-12-17Attachments:
January 21, 2025City Council Meeting Agenda
2. Warrant Run Report (City - Successor Agency - Housing Authority - Community Development Commission - Water)
Recommended Action:
It is recommended that the Council/Board ratify the warrant run and payroll report for the City, Successor Agency to the Hesperia Community Redevelopment Agency, Hesperia Housing Authority, Community Development Commission, and Water District.
Staff Person: Assistant City Manager Casey Brooksher
SR Warrant Run 1-21-2025
Attachment 1 - Warrant Run
Attachments:
3. Treasurer’s Cash Report for the unaudited period ended November 30, 2024.
Recommended Action:
It
is recommended that the Council/Board accept the Treasurer’s Cash Report for the City, Successor Agency to the Hesperia Community Redevelopment Agency, Hesperia Housing Authority, Community Development Commission, and Water District.
Staff Person: Assistant City Manager Casey Brooksher
SR Treasurer's Report 1-21-2025
Attachment 1 - Treasurers Report
Attachments:
4. Planning, Licensing, and Land Management System Implementation Recommended Action:
It
is recommended that the City Council authorize the City Manager to enter into a three (3) year agreement in an amount not-to-exceed $1,325,296 with Tyler Technologies for both the implementation and three (3) years of licensing and support for a Planning, Licensing, and Land Management, (PLL) system.
Staff Person: Assistant City Manager Casey Brooksher
SR Tyler Technologies PLL 1-21-2025Attachments:
5. Audited Hesperia Housing Authority Financial Statements for Fiscal Year Ended June 30, 2024, and Housing Successor SB 341 Report
Recommended Action:
It
is recommended that the City Council and the Hesperia Housing Authority (HHA) Board receive and file the audited Hesperia Housing Authority - Component Unit Financial Statements for the Fiscal Year Ended June 30, 2024, and the Housing Successor SB 341 Report.
Staff Person: Assistant City Manager Casey Brooksher
January 21, 2025City Council Meeting Agenda
SR Hesperia Housing Audit - SB 341 Report 1-21-2025
Attachment 1 - Hesperia HHA 23-24 Component Unit Financial Statements Attachment 2 - SB 341 Housing Successor Report
Attachment 3 - Memo to the Board of Directors
Attachments:
6. Badger Meter, Inc. Contract Amendment
Recommended Action:
It
is recommended that the City Council and Board Members of the Hesperia Water District authorize the City Manager to increase the contract with Badger Meter Inc. in the amount of $250,000 for a new not-to-exceed amount of $1,150,000 for the purchase of ¾” and 1” ultrasonic meters.
Staff Person: Director of Public Works/City Engineer Cassandra Sanchez SR Badger Meter, Inc. Contract Amendment 1-21-2025Attachments:
7. Declaration of Assessor Parcel No. 0407-232-07 as Exempt Surplus Property and Approval of Transfer from the Hesperia Housing Authority to the City and placement in the General Fund for Governmental Purposes Recommended Action:
It is recommended that the Housing Authority Board and the City Council jointly:
(1) adopt a resolution declaring property with Assessor Parcel No. (APN) 0407-232-07 as exempt surplus land for future agency use and governmental purposes pursuant to the Surplus Land Act (California Government Code §54206 et seq); (2) approve the transfer of the property with APN 0407-232-07 from the Housing Authority to the City; (3) accept the property with APN 0407-232-07 and place the property in the City’s General Fund at no cost to the General Fund; and (4) authorize the Executive Director and City Manager and/or designee(s) to execute all necessary documents to effectuate the transfer.
Staff Person: Director of Development Services Nathan Freeman SR Exempt Surplus Declaration APN 0407-232-07 1-21-2025 Attachment 1 - Site Map
Resolution HHA 2025-01
Attachments:
PUBLIC HEARING
Individuals wishing to comment on public hearing items must submit a speaker slip to the City Clerk with the numbered agenda item noted. Speaker slips should be turned in prior to an agenda item being taken up.
Comments will be limited to five minutes for Public Hearing items.
WAIVE READING OF ORDINANCES
Approve the reading by title of all ordinances and declare that said titles which appear on the public agenda shall be determined to have been read by title and further reading waived.
8. Consider Adoption of a Resolution of Necessity to Acquire a Portion of the Property
Located at the Southwest Corner of Poplar Court and Highway 395, bearing Assessor Parcel No. 3064-561-07
January 21, 2025City Council Meeting Agenda
Recommended Action:
It
is recommended that the City Council hold a public hearing on the proposed Resolution of Necessity (Resolution No. 2025-01) and adopt the Resolution of Necessity authorizing the commencement of an eminent domain action necessary to acquire a portion of the property located at the southeast corner of Poplar Court and Highway 395, bearing Assessor Parcel No. 3064-561-07 (the “Property”).
Staff Person: Director of Development Services Nathan Freeman SR Resolution of Necessity - Poplar Court 1-21-2025
Resolution 2025-01
Attachment 2 - Legal Description and Plat Map
Attachments:
NEW BUSINESS
9. Consideration of Ad-Hoc Committee for the Recreation and Parks District Recommended Action:
It
is recommended that the City Council Provide staff direction regarding the establishment of an Ad-Hoc Committee consisting of two City Council Members focused on areas of mutual interest with the Hesperia Recreation and Park District (HRPD) as requested by Mayor Pro Tem Gregg at the December 17, 2024 Council Meeting.
Staff Person: Assistant City Clerk Erin Baum
SR Consideration of Ad-Hoc Committee for Parks & Rec District 1-21-2025Attachments:
COUNCIL COMMITTEE REPORTS AND COMMENTS
The Council may report on their activities as appointed representatives of the City on various Boards and Committees and/or may make comments of general interest or report on their activities as a representative of the City.
CITY MANAGER/CITY ATTORNEY/STAFF REPORTS
The City Manager, City Attorney or staff may make announcements or reports concerning items of interest to the Council and the public.
ADJOURNMENT
January 21, 2025City Council Meeting Agenda
I, Erin Baum, Assistant City Clerk of the City of Hesperia, California do hereby certify that I caused to be posted the foregoing agenda on Wednesday, January 15, 2025 at 5:30 p.m. pursuant to California Government Code §54954.2.
_____________________________
Erin Baum,
Assistant City Clerk
Documents produced by the City and distributed less than 72 hours prior to the meeting regarding items on the agenda will be made available in the City Clerk's Office during normal business hours.
C
ity of Hesperia
City of Hesperia
Meeting Minutes – Draft
City Council
Tuesday, December 17, 2024 6:30 PM
RE
GULAR MEETING AGENDA
HESPERIA CITY COUNCIL
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
HESPERIA HOUSING AUTHORITY
HESPERIA COMMUNITY DEVELOPMENT COMMISSION
HESPERIA WATER DISTRICT
CLOSED SESSION - 5:00 PM
R
oll Call
Present: 5 - Mayor Lee, Mayor Pro Tem Gregg, Council Member Bennington, Council Member Ochoa and Council Member Pullen
C
onference with Legal Counsel - P otential Litigation: Government Code Section 54956.9(d)2
1. O
ne (1) Case
C
onference with Legal Counsel – E xisting Litigation Government Code Section 54956.9(d)1
1. A
PEX HM, LLC, et al. v. City of Hesperia, et al. - CIVSB 2208845 CALL TO ORDER - 6:30 PM
A. I
nvocation
B. P
ledge of Allegiance to the Flag
C. R
oll Call
Pre
sent: 5 - Mayor Lee, Mayor Pro Tem Gregg, Council Member Bennington, Council Member Ochoa and Council Member Pullen
D. A
genda Revisions and Announcements by City Clerk
P
resentation by Judith Pina from the California Department of Insurance has been postponed due to emergency.
Assistant City Clerk updated Council on December 3, City Council Meeting video availability.
City Council Chambers
9700 Seventh Ave.
Hesperia CA, 92345
City of Hesperia
E. Closed Session Reports by City Attorney
ANNOUNCEMENTS/PRESENTATIONS
1. Presentation to residents Jeff and Christina Estep, Pride Enhancement Program Honorees.
2. Presentation to Residential Christmas Decorating Contest Winner.
GENERAL PUBLIC COMMENTS (For items and matters not listed on the agenda)
The following people commented:
Bob Nelson
Robert Davie
Kim Jones
Gina Whelan
Stephanie James
Jonathan Weldy
JOINT CONSENT CALENDAR
Items 1 and 6 were considered independent of the Joint Consent Calendar.
A motion was made by Bennington, seconded by Ochoa, that the Joint Consent Calendar, minus items 1 and 6 be approved. The motion carried by the following vote:
Aye: 5 - Gregg, Bennington, Lee, Ochoa, and Pullen
Nay: 0
1. Consideration of the Draft Minutes from the Regular Meeting held Tuesday, December 3, 2024.
Recommended Action:
It is recommended that the City Council approve the Draft Minutes from the Regular Meeting held Tuesday, December 3, 2024.
S ponsors: Assistant City Clerk Erin Baum
A motion was made by Gregg, seconded by Ochoa, that the Draft Minutes be approved as amended.The motion carried by the following vote:
Aye: 5 - Gregg, Bennington, Lee, Ochoa, and Pullen
Nay: 0
2. Warrant Run Report (City - Successor Agency - Housing Authority - Community Development Commission - Water)
Recommended Action:
It is recommended that the Council/Board ratify the warrant run and payroll report for the City, Successor
City of Hesperia
Agency to the Hesperia Community Redevelopment Agency, Hesperia Housing Authority, Community Development Commission, and Water District.
S ponsors: Assistant City Manager Casey Brooksher
3. Treasurer’s Cash Report for the unaudited period ended October 31, 2024
Recommended Action:
It is recommended that the Council/Board accept the Treasurer’s CashReport for the City, Successor Agency to the Hesperia Community Redevelopment Agency, Hesperia Housing Authority, Community Development Commission, and Water District.
S ponsors: Assistant City Manager Casey Brooksher
4. Fiscal Year 2023-2024 Annual Compliance Report for AB 1600 Development Impact Fees
Recommended Action:
It is recommended that the City Council receive and file the AB 1600 report on development fee activity that occurred during Fiscal Year (FY) 2023-2024.
S ponsors: Assistant City Manager Casey Brooksher
5. Receive and File the Local Agency Special Tax and Bond Accountability Act Reports (SB 165) for the Fiscal Year Ended June 30, 2024
Recommended Action:
It is recommended that the City Council receive and file the Local Agency Special Tax and Bond Accountability Act Reports (SB 165) for Communities Facilities District (CFD) 2005 -1 (Belgate Development Restructuring), CFD 2021-1 (Residential Maintenance & Services), CFD 2022- 1 (Non-Residential Maintenance & Services), and CFD 2023-1 (Silverwood Maintenance & Services) for the Fiscal Year Ended June 30, 2024.
S ponsors: Assistant City Manager Casey Brooksher
Item 6 was considered independent of the Joint Consent Calendar
6. First Amendment to Professional Services Agreement with Willdan Engineering for Building Inspection Services
Recommended Action:
It is recommended that the City Council authorize an amendment to the Professional Services Agreement with Willdan Engineering and to increase the contract amount by $208,000, for a total not -to-exceed amount of $258,000 for an additional year of full- time building inspection services.
S ponsors: Director of Development Services Nathan Freeman
Robert Davie commented.
Jonathan Weldy commented.
A motion was made by Gregg, seconded by Lee, that this item be approved.
The motion carried by the following vote:
Aye: 4 - Gregg, Bennington, Lee, and Pullen
Nay: 1 - Ochoa
City of Hesperia
NEW BUSINESS
7. City Council Appointments to Outside Agencies
Recommended Action:
It is recommended that the City Council follow past practice and appoint liaisons (both primary and alternate) to various outside agencies for a one-year period to commence in January 2025.
S ponsors: Assistant City Clerk Erin Baum
A motion was made by Gregg, seconded by Ochoa, that the following appointments be made. The motion carried by the following vote:
Aye: 5 - Gregg, Bennington, Lee, Ochoa, and Pullen
Nay: 0
Agency/Committee Name Representatives
League of California Cities(LOCC)
Inland Empire & Desert Mountain Division
Primary – Lee Alternate – Ochoa
San Bernardino County Transportation Authority
(SBCTA)
0BPrimary – Pullen
Alternate – Bennington
Metro Committee
Mountain/Desert Policy Committee
San Bernardino County Solid Waste Task Force
Primary – Gregg
Alternate - Staff *Rachel will designate
Victor Valley Economic Development Authority (VVEDA) Primary – Ochoa Alternate – Lee
Victor Valley Transit Authority (VVTA)
Primary – Lee
Alternate – Ochoa
Greater High Desert Chamber of Commerce Liaison
Primary – Lee
Alternate – Gregg
Tri Agency Committee
Primary – Gregg/Bennington
Alternate – Ochoa
City Council Advisory Committee Primary – Ochoa
Alternate – Lee
A motion was made by Bennington, seconded by Ochoa, that that the following appointments be made. The motion carried by the following vote:
Aye: 5 - Gregg, Bennington, Lee, Ochoa, and Pullen
Nay: 0
Victor Valley Wastewater Reclamation Authority (VVWRA) Primary – Gregg Alternate – Bennington
Agency/Committee Name Representatives
Mojave Desert Air Quality Management District (MDAQMD) Primary – Bennington Alternate – Gregg
City of Hesperia
During discussion Mayor Pro Tem Gregg asked that a future agenda item be brought forward on forming an Ad Hoc Committee.
COUNCIL COMMITTEE REPORTS AND COMMENTS
The Mayor, Mayor Pro Tem, and Council Members reported from various events and Committees.
CITY MANAGER/CITY ATTORNEY/STAFF REPORTS
The City Manager and City Attorney commented briefly.
ADJOURNMENT
The meeting was adjourned until January 21, 2025, in honor of Council Member Bennington’s grandson’s and mother’s birthdays, at 8:08 p.m.
_____________________________
Erin Baum,
Assistant City Clerk
THIS PAGE LEFT INTENTIONALLY BLANK
City of Hesperia
STAFF REPORT
DATE: January 21, 2025
TO: Mayor and Council Members
City Council, as Successor Agency to the Hesperia Community Redevelopment Agency
Chair and Commissioners, Hesperia Housing Authority
Chair and Commissioners, Community Development Commission Chair and Board Members, Hesperia Water District
FROM: Rachel Molina, City Manager
BY: Casey Brooksher, Assistant City Manager
Anne Duke, Deputy Finance Director
Verenise Fierros, Accountant
SUBJECT: Warrant Run Report (City – Successor Agency – Housing Authority – Community Development Commission – Water)
RECOMMENDED ACTION
It is recommended that the Council/Board ratify the warrant run and payroll report for the City, Successor Agency to the Hesperia Community Redevelopment Agency, Hesperia Housing Authority, Community Development Commission, and Water District.
BACKGROUND
The Warrant Run totals represented below are for th e period November 16, 2024 through December 13, 2024.
The wire amount total is as follows:
• $10,000.00 to Commonwealth Land Title Company for purchase of APN 0413-031-05. • $97,917.00 to Commonwealth Land Title Company for purchase of APN 0414-202-07. • $286,513.64 to Commonwealth Land Title Company for purchase of APN 0413-031-05.
CITY GOAL SUPPORTED BY THIS ITEM
Financial Health – Maintain a balanced budget and adequate reserves.
ATTACHMENT(S)
1. Warrant Runs
Agency/District Accounts Payable Payroll Wires Totals
City of Hesperia $4,213,862.59 $631,799.21 $394,430.64 $5,240,092.44 Successor Agency 0.00 0.00 0.00 0.00
Housing Authority 5,934.60 718.74 0.00 6,653.34
Community Development Commission 0.00 0.00 0.00 0.00
Water 1,613,929.57 274,776.96 0.00 1,888,706.53
Totals $5,833,726.76 $907,294.91 $394,430.64 $7,135,452.31
YEAR-TO PRIOR FY YTD
W/E W/E W/E W/E WARRANT DATE DATE
FUND # FUND NAME 11/22/2024 11/29/2024 12/6/2024 12/13/2024 TOTALS Wires TOTALS * TOTALS Accounts Payable
100 GENERAL 2,210,866.20 $ 309,152.52 $ 60,482.28$ 207,866.81$ 2,788,367.81$ 296,513.64$ 18,123,180.21$ 16,184,402.97$ 105 PENSION OBLIGATION TRUST -$ -$ -$ -$ -$ -$ -$ -$ 106 OPEB TRUST -$ -$ -$ -$ -$ -$ -$ -$
110 SILVERWOOD 27,253.75$ -$ 3,136.00$ 2,480.00$ 32,869.75$ -$ 44,023.91$ -$ 200 HESPERIA FIRE DISTRICT -$ -$ -$ -$ -$ -$ -$ -$
204 MEASURE I - RENEWAL 636.30$ -$ 1,344.71$ 341.19$ 2,322.20$ -$ 16,009.61$ 436,849.91$ 207 LOCAL TRANSPORT-SB 325 -$ 1.64$ -$ -$ 1.64$ -$ 1.64$ 967,882.81$ 209 GAS TAX-RMRA -$ -$ -$ -$ -$ -$ -$ -$
210 HFPD (PERS) -$ -$ -$ -$ -$ -$ 1,755,819.00$ 907,316.00$ 241 CFD 2021-1 Resid Maint. & Serv -$ -$ -$ -$ -$ -$ 640.00$ -$ 242 CFD 2022-1 Non-Resd Maint & Serv -$ -$ -$ -$ -$ -$ 640.00$ -$ 243 CFD 2023-1 Silverwood Maint -$ -$ -$ -$ -$ -$ 640.00$ -$ 251 CDBG -$ 157,276.94$ 20,409.75$ 10,000.00$ 187,686.69$ -$ 2,856,608.78$ 281,331.85$ 254
AB2766 - TRANSIT -$ -$ -$ -$ -$ -$ -$ -$
255 AB3229 SUPPLEMENTAL LAW -$ -$ -$ -$ -$ -$ -$ -$
256 ENVIRONMENTAL PROGRAMS GRANT -$ 603.57$ -$ 4,260.54$ 4,864.11$ -$ 25,478.62$ 15,913.97$ 262 SB 1383 LOCAL ASSISTANCE GRANT -$ -$ -$ -$ -$ -$ -$ -$ 263 STREETS MAINTENANCE 48,923.00$ 10,807.70$ 43,481.44$ 28,609.15$ 131,821.29$ -$ 883,138.48$ 1,068,278.34$ 300 DEV. IMPACT FEES - STREET -$ -$ -$ -$ -$ -$ 34,379.75$ 3,600.00$ 301 DEV. IMPACT FEES - STORM DRAIN -$ -$ 21,883.79$ -$ 21,883.79$ -$ 126,883.79$ -$ 306 DEV. IMPACT FEES - 2018-STREETS 25,836.60$ 18,825.80$ -$ -$ 44,662.40$ -$ 894,452.85$ 1,466,551.32$ 307 DIF 2018-DRAINAGE FACILITIES 8,951.40$ -$ -$ -$ 8,951.40$ 97,917.00$ 168,008.40$ -$ 313 DIF A-04 DRAINAGE -$ -$ -$ -$ -$ -$ 498.79$ 317,748.35$ 402
WATER RIGHTS ACQUISITION -$ -$ -$ -$ -$ -$ 1,664,308.80$ 1,217,911.69$ 403 2013 REFUNDING LEASE REV BONDS -$ -$ -$ -$ -$ -$ -$ 570,901.39$ 404 2023 REFUNDING LEASE REV BONDS -$ -$ -$ -$ -$ -$ 2,500.00$ -$ 504 CITY WIDE STREETS - CIP 403.58$ -$ 4,797.50$ -$ 5,201.08$ -$ 2,608,933.13$ 6,730,267.51$ 509 CITY FACILITIES CIP -$ -$ -$ -$ -$ -$ -$ -$
800 EMPLOYEE BENEFITS 192,402.38$ 209,651.97$ 55,154.02$ 328,155.17$ 785,363.54$ -$ 4,571,639.60$ 4,174,035.68$ 801 TRUST/AGENCY 147,745.39$ -$ 1,262.00$ 43,859.50$ 192,866.89$ -$ 715,704.90$ 1,094,807.07$ 802 AD 91-1 AGENCY -$ -$ -$ -$ -$ -$ -$ -$
804 TRUST-INTEREST BEARING -$ -$ -$ -$ -$ -$ 41,105.51$ 126,721.70$ 807 CFD 2005-1 -$ 7,000.00$ -$ -$ 7,000.00$ -$ 1,036,920.47$ 986,388.74$ 808
HFPD (TRANSITION) -$ -$ -$ -$ -$ -$ 317,435.02$ 347,796.19$ 815 PLAN REVIEW TRUST - FRONTIER -$ -$ -$ -$ -$ -$ -$ -$ CITY 2,663,018.60$ 713,320.14$ 211,951.49$ 625,572.36$ 4,213,862.59$ 394,430.64$ 35,888,951.26$ 36,898,705.49$ 163 REDEVELOP OBLIG RETIREMENT-2018 -$ -$ -$ -$ -$ -$ 7,928,267.73$ 8,085,433.89$ SUCCESSOR AGENCY -$ -$ -$ -$ -$ -$ 7,928,267.73$ 8,085,433.89$ 370 HOUSING AUTHORITY 3,620.90$ 1,692.70$ 621.00$ -$ 5,934.60$ -$ 13,008.41$ 8,999.34$ HOUSING AUTHORITY 3,620.90$ 1,692.70$ 621.00$ -$ 5,934.60$ -$ 13,008.41$ 8,999.34$ 170 COMMUNITY DEVELOPMENT COMMISSION -$ -$ -$ -$ -$ -$ -$ -$ COMMUNITY DEVELOPMENT COMMISSION -$ -$ -$ -$ -$ -$ -$ -$ 700 WATER OPERATING 453,076.11$ 281,975.03$ 431,491.51$ 323,556.19$ 1,490,098.84$ -$ 6,050,214.40$ 5,187,014.09$ 705 WATER PENSION OBLIGATION TRUST -$ -$ -$ -$ -$ -$ 750,000.00$ -$ 701 WATER CAPITAL -$ -$ -$ -$ -$ -$ 16,473.00$ 313,800.00$ 710
SEWER OPERATING 64,849.93$ 2,128.12$ 8,174.02$ 39,415.08$ 114,567.15$ -$ 2,409,588.89$ 2,645,502.57$ 711 SEWER CAPITAL -$ 6,674.98$ -$ -$ 6,674.98$ -$ 1,075,237.42$ 527,975.10$ 720 RECLAIMED WATER OPERATIONS -$ 2,461.02$ -$ 127.58$ 2,588.60$ -$ 32,722.94$ 30,203.01$ WATER 517,926.04$ 293,239.15$ 439,665.53$ 363,098.85$ 1,613,929.57$ -$ 10,334,236.65$ 8,704,494.77$ ACCOUNTS PAYABLE TOTAL 3,184,565.54$ 1,008,251.99$ 652,238.02$ 988,671.21$ 5,833,726.76$ 394,430.64$ 54,164,464.05$ 53,697,633.49$ REG. PAYROLL
City 323,003.09$ -$ 308,796.12$ -$ 631,799.21$ -$ 3,776,661.91$ 3,610,904.22$ Housing Authority 360.64$ -$ 358.10$ -$ 718.74$ -$ 3,109.00$ 2,345.62$ Water 136,834.89$ -$ 137,942.07$ -$ 274,776.96$ -$ 1,784,612.13$ 1,527,978.56$ PAYROLL TOTAL 460,198.62$ -$ 447,096.29$ -$ 907,294.91$ -$ 5,564,383.04$ 5,141,228.40$ City of Hesperia
WARRANT RUNS
11/16/2024-12/13/2024
Attachment 1
City of Hesperia
STAFF REPORT
RECOMMENDED ACTION
It is recommended that the Council/Board accept the Treasurer’s Cash Report for the City, Successor Agency to the Hesperia Community Redevelopment Agency, Hesperia Housing Authority, Community Development Commission, and Water District.
BACKGROUND
This report is presented to the City Council pursuant to Government Code Section 53646 (b) setting forth the City’s investment portfolio.
ISSUES/ANALYSIS
The Treasurer’s Cash Reports are presented on the following pages for each agency.
CITY GOAL SUPPORTED BY THIS ITEM
Financial Health – Maintain a balanced budget and adequate reserves.
FISCAL IMPACT
These reports reflect unaudited cash balances as of November 30, 2024.
ALTERNATIVE(S)
Provide alternative direction to staff.
ATTACHMENT(S)
1. City of Hesperia Investment Report
2. Successor Agency to the Hesperia Community Redevelopment Agency Investment Report
3. Hesperia Housing Authority Investment Report
4. Community Development Commission Investment Report
5. Hesperia Water District Investment Report
DATE: January 21, 2025
TO: Mayor and Council Members
City Council, Serving as Successor Agency to the Hesperia Community Redevelopment Agency
Chair and Commissioners, Hesperia Housing Authority
Chair and Commissioners, Community Development Commission Chair and Board Members, Hesperia Water District
FROM: Rachel Molina, City Manager
BY: Casey Brooksher, Assistant City Manager
Anne Duke, Deputy Finance Director
Jonathan Settle Accountant
SUBJECT: Treasurer’s Cash Report for the unaudited period ended November 30, 2024.
Staff Report to the Mayor and City Council/Board Members Treasurer’s Cash Report
January 21, 2025
FUND VALU E
General Fund (100 & 800) 21,125,498.07
Pension Obligation Trust (105) 80,699.98
OPEB Trust (106) -
Silverwood 1,241.84
HFPD (PERS) (210) 1,081,530.93
CFD 2021-1 Resid Maint & Serv 1,514.41
CFD 2022-1 Non-Resid Maint & Serv 1,514.41
CFD 2023-1 Silverwood Maint 1,744.52
AB27666 - Transit (254) 25,647.41
AB3229 Supplemental Law (255) 435,849.54
AD No. 91-1 (802) 399,644.19
Beverage Recycling Grant (256) 291,370.19
CFD 2005-1 (807) 1,017,446.11
HFPD Transition (808) -
City Wide-Capital Projects (504) (10,352,853.52)
Community Dev Block Grant (251, 252, & 253) 456,190.70
American Rescue Plan Grant (261) 25,049,571.21
S
B 1383 Local Assistance Grant (262) 351,423.32
Development Impact Fund (300-304) 5,231,093.63
Development Impact Fund 2018 (306-312) 25,224,857.24
Development Impact Fund A-04 Drainage (313) 1,727,137.94 Disaster (260) 62,121.96
Gas Tax Fund (205) 2,215,049.85
Gas Tax - RMRA (209) 8,745,193.91
Gas Tax Swap (206) 1,705,721.56
Local Transportation SB325 (207) 1,687,171.48
Measure I - Renewal (204) 13,029,163.78
Public Works Street Maint (263) 865,779.86
Public Art (230) 261,914.97
Trust Fund (801, 803-806, & 815) 687,249.80
2012 Water Rights Acquisition (402) 676,036.38
2013 Refunding Lease Rev Bonds (403) -
2023 Refunding Lease Rev Bonds (404) 1,465,302.78
TOTA L CITY FUNDS 103,551,828.45$
CITY OF HESPERIA
Staff Report to the Mayor and City Council/Board Members Treasurer’s Cash Report
January 21, 2025
FUND VALU E
RORF Retention - (163) 473,904.20$
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
FUND VALU E
Hesperia Housing Authority Fund (370) 4,342,574.01$
VVEDA Housing Authority (371) 1,964,928.18
TOTA L HOUSING A UTHORITY FUNDS 6,307,502.19$
HESPERIA HOUSING A UTHORITY
FUND VALU E
Community Development Commission Fund (170) 3,550,410.65$
COMMUNITY DEVELOPMENT COMMISSION
Staff Report to the Mayor and City Council/Board Members Treasurer’s Cash Report
January 21, 2025
VALU E
Water Operating (700) 16,971,854.61$
Water Capital (701) 4,725,326.78
Water Capital Rehab and Replace (703) 3,641,725.78
Water Contamination Mitigation (704) 2,686,087.37
Water Pension Obilgation Trust (705) 11,007.22
Water OPEB Trust (706) -
Sewer Operating (710) 13,583,701.82
Sewer Capital (711) 1,428,240.39
Sewer Capital Rehab and Replace (713) 828,633.15
Reclaimed Water Operations (720) 339,652.55
TOTA L WA TER FUNDS 44,216,229.67$
WAT ER
FUND
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City of Hesperia
STAFF REPORT
DATE: January 21, 2025
TO: Mayor and Council Members
FROM: Rachel Molina, City Manager
BY: Casey Brooksher, Assistant City Manager
Victor Knight, Deputy Information Technology Director
SUBJECT: Planning, Licensing, and Land Management System Implementation
RECOMMENDED ACTION
It is recommended that the City Council authorize the City Manager to enter into a three (3) year agreement in an amount not-to-exceed $ 1,325,296 with Tyler Technologies for both the implementation and three (3) years of licensing and support for a Planning, Licensing, and Land Management, (PLL) system.
BACKGROUND
In 2011, the City contracted with the vendor CRW Systems to implement the PLL system . The City began using the system for the Community Development, Building and Safety, Planning, and Engineering Divisions. The Code Enforcement Division began using the same system in 2014.
Since the City acquired the current PLL system, the company providing the software has changed ownership twice. Enhancements, updates, and support have ended. Supporting both Staff and customers on the existing product cannot be continued.
Due to the need for a replacement PLL system, in January 2023, the City contracted with a consultant (Woolpert) to identify City needs and requirements, as well as opportunities to improve City processes. The consultant selected was identified through a competitive evaluation.
Prior to selecting software to serve as the supported City PLL system, Woolpert analyzed existing Division operations and interviewed City staff.
ISSUES/ANALYSIS
Following an analysis of City PLL needs and opportunities for improvement, a Request for Proposal (RFP) incorporating the findings was developed to select the software that would replace the City’s existing PLL system. In addition to operational requirements, the specifications ensured that additional technical resources would be minimized, and the selected system would accommodate future City growth.
Eighteen responses to the RFP were received, and after evaluation, six vendors were interviewed.
A panel representing Divisions utilizing the PLL system attended presentations provided by potential vendors and scored responses. After Tyler Technologies was selected , City Staff communicated with two similarly sized municipalities recently implementing Tyler Technologies’ PLL system for reference.
Staff Report to the City Council
Planning, Licensing, and Land Management System Implementation January 21, 2025
CITY GOAL SUPPORTED BY THIS ITEM
Organizational Health – Foster a high performing organization that provides opportunities for professional growth
FISCAL IMPACT
The total cost of the three (3) year agreement for both the implementation ($400,300) and three (3) years of licensing and support ($308,332 per year) for the PLL system is for an amount not - to-exceed $1,325,296.
If approved, the Fiscal Year (FY) 2024 -25 cost of $388,392 will be funded by General Fund reserves, and a budget amendment will be presented at the Mid- Year Budget Review to appropriate the necessary funds.
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
None
City of Hesperia
STAFF REPORT
DATE: January 21, 2025
TO: Mayor and Council Members
Chair and Board Members, Hesperia Housing Authority
FROM: Rachel Molina, City Manager
BY: Casey Brooksher, Assistant City Manager
Eydee Jimenez, Economic Development Supervisor
SUBJECT: Audited Hesperia Housing Authority Financial Statements for Fiscal Year Ended June 30, 2024, and Housing Successor SB 341 Report
RECOMMENDED ACTION
It is recommended that the City Council and the Hesperia Housing Authority (HHA) Board receive and file the audited Hesperia Housing Authority – Component Unit Financial Statements for the Fiscal Year Ended June 30, 2024, and the Housing Successor SB 341 Report.
BACKGROUND
The State of California Health and Safety Code §34176.1(f) and §34327.6 require that the housing successor (HHA) shall conduct, and provide to its governing body, and independent financial audit of the Low and Moderate Income Housing Asset fund within six months after the end of each fiscal year. In addition, the housing successor shall provide to its governing body the SB 341 report, as a component of the HHA audit.
ISSUES/ANALYSIS
The Agency's independent auditor, CliftonLarsonAllen LLP (CLA) performed an audit of the HHA for Fiscal Year 2023- 24. The document that comprises the Financial Statements, commonly referred to as the Audit for the Authority, is the Hesperia Housing Authority - Component Unit Financial Statements – June 30, 2024.
Additionally, the HHA provid es the Board with the audited financial statements and SB 341 Report, which satisfies the legal requirement set forth by the State. These documents are included as Attachments 1 and 2.
The Annual Comprehensive Financial Report, which reflects the Citywide Financial Statements, Component Unit Financial Statements for the Fire Protection District, Community Development Commission, HHA, and Water District, as well as the Single Audit, will b e formally presented to the City Council in April of 2025.
CITY GOAL SUPPORTED BY THIS ITEM
Financial Health – Maintain a balanced budget and adequate reserves.
FISCAL IMPACT
None.
Staff Report to the Mayor and Council Members and Board of Directors of the Hesperia Housing Authority Audited Hesperia Housing Authority Financial Statements for Fiscal Year Ended June 30, 202 4 January 21, 2025
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
1. June 30, 2024 Component Unit Financial Statements for the Hesperia Housing Authority
2. SB 341 Housing Successor Report
3. December 17, 2024 memo to the Board of Directors
HESPERIA HOUSING AUTHORITY
COMPONENT UNIT
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
YEAR ENDED JUNE 30, 2024
Attachment 1
HESPERIA HOUSING AUTHORITY
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2024
INDEPENDENT AUDITORS’ REPORT 1
MANAGEMENT’S DISCUSSION AND ANALYSIS 4
FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 9
STATEMENT OF ACTIVITIES 10
BALANCE SHEET – GOVERNMENTAL FUNDS 11
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION – GOVERNMENTAL FUNDS 12
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS 13
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES TO THE STATEMENT OF
ACTIVITIES – GOVERNMENTAL FUNDS 14
NOTES TO FINANCIAL STATEMENTS 15
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE – HESPERIA HOUSING
AUTHORITY SPECIAL REVENUE FUND 26
BUDGETARY COMPARISON SCHEDULE – VVEDA HOUSING AUTHORITY SPECIAL REVENUE FUND 27
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION 28
CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.
CliftonLarsonAllen LLP
CLAconnect.com
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I
NDEPENDENT AUDITORS’ REPORT
Board of Directors
Hesperia Housing Authority
Hesperia, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and each major fund of the Hesperia Housing Authority (the Authority) (a component unit of the City of Hesperia), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund as of June 30, 2024, and the changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for 12 months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Board of Directors
Hesperia Housing Authority
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Auditors’ 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 auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS 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 GAAS 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 Authority’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 Authority’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison schedules, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, 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.
Board of Directors
Hesperia Housing Authority
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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 16, 2024 on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’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 Authority’s internal control over financial reporting and compliance.
CliftonLarsonAllen LLP
Irvine, California
December 16, 2024
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MANAGEMENT’S DISCUSSION AND ANALYSIS
Our discussion and analysis of the Hesperia Housing Authority’s (Authority) financial performance provides an overview of the Authority’s financial activities for the fiscal year (FY) ending June 30, 2024. Please read it in conjunction with the accompanying basic financial statements.
FINANCIAL HIGHLIGHTS
During FY 2023-24, the Authority net position increased by 3%, or approximately $0.4 million from June 30, 2023. This is primarily due to a $0.4 million increase in revenue, which is comprised of $0.3 million in investment income and $0.1 million in repayments on loans made for low and moderate income housing projects.
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The Statement of Net Position and the Statement of Activities provide information about the activities of the Authority as a whole and present a longer-term view of the Authority’s finances. Fund financial statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the Authority’s operations in more detail than the government-wide statements by providing information about the Authority’s most significant funds.
REPORTING THE AUTHORITY AS A WHOLE
The discussion and analysis provided here are intended to serve as an introduction to the Authority’s basic financial statements. The basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) the notes to financial statements. This report also includes supplementary information intended to furnish additional detail to support the basic financial statements themselves.
Government-Wide Financial Statements
One of the most important questions asked about the Authority’s finances is, “Is the Authority as a whole better off or worse off as a result of this year’s activities?” The Government-Wide Statements – The Statement of Net Position and the Statement of Activities – report information about the Authority as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting method, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid.
The statement of net position presents financial information on all of the Authority’s assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating.
The statement of activities presents information showing how the Authority’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 for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
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REPORTING THE AUTHORITY’S MOST SIGNIFICANT FUNDS
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 Authority, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The Authority uses a governmental fund to account for its operations.
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 assessing 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 the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
Notes to the Financial Statements – The notes provide additional information that is necessary to acquire a full understanding of the data provided in the government-wide and fund financial statements.
THE HESPERIA HOUSING AUTHORITY AS A WHOLE
Our analysis focuses on the Condensed Statement of Net Position (Table 1) and Changes in Net Position (Table 2) of the Authority. As noted earlier, net position over time, may serve as a useful indicator of a government’s financial position.
2023 2024 Amount Percentage
Current and other assets 12,467,590 $ 12,833,265 $ 365,675 $ 3% Total assets 12,467,590 12,833,265 365,675 3% Total deferred outflow of resources 0 0 0 0%
Current liabilities 5 874 869 17380%
Total liabilities 5 874 869 17380% Total deferred inflow of resources 0 0 0 0%
Net Position:
Restricted 12,467,585 12,832,391 364,806 3% Total Net Position 12,467,585 $ 12,832,391 $ 364,806 $ 3% Table 1
Condensed Statement of Net Position
Changes from 2023 to 2024
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The following is a brief explanation for the changes in Table 1 above for the fiscal year ending June 30, 2024:
Current and other assets in the amount of $12.8 million increased by approximately $0.4 million from the year ending June 30, 2023. This is a result of a $0.4 million increase in revenue, which is comprised of $0.3 million in investment income and $0.1 million in repayments on loans made for low and moderate income housing projects.
Current liabilities totaled $874 at June 30, 2024, which is an increase of $869 from the prior fiscal year, and is primarily attributed to the timing of the payment of invoices and payroll for staff time spent on Housing Authority activities.
Total Net Position increased by $364,806 as a result of the changes to assets and liabilities discussed above.
AUTHORITY ACTIVITIES
As shown in Table 2, the Authority’s June 30, 2024 net position increased by approximately $0.4 million. Total June 30, 2024 revenue of $0.4 million exceeds the Authority’s current year expenditures of $62,734, and is lower than the June 30, 2023 revenue by $0.2 million. The year-over-year decrease in revenue is primarily due to interest income from an affordable housing program loan repayment in FY 2022-23. The Fiscal Year 2023-24 expenditures of $62,734 are $90,894 less than the FY2022-23 expenditures of $153,628. The decrease in expenditures is primarily due FY 2022-23 market value loss of $90,000 in land held for resale.
2023 2024 Amount Percentage
Revenues
General revenues:
Income from money and property 486,379 $ 334,194 $ (152,185)$ -31% Other 160,895 93,346 (67,549) -42% Total revenues 647,274 427,540 (219,734) -34% Expenses
Development Services 153,628 62,734 (90,894) -59% Total expenses 153,628 62,734 (90,894) -59% Change in net position 493,646 364,806 (128,840) -26% Net position at July 1 11,973,939 12,467,585 493,646 4% Net position at June 30 12,467,585 $ 12,832,391 $ 364,806 $ 3% Changes from 2023 to 2024
Table 2
Changes in Net Position
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FINANCIAL ANALYSIS OF THE AUTHORITY’S FUNDS
At year-end, the Authority’s governmental funds reported combined fund balances of $12.8 million. The fund balance of the Hesperia Housing Authority Fund is $10.9 million, which is restricted for low and moderate income housing functions. The Fund balance has increased by $0.3 million from June 30, 2023, which is due to an increase of $0.2 million in investment income and an increase of $0.1 million in repayments on loans made for low and moderate income housing projects. The Victor Valley Economic Development Agency (VVEDA) Housing Authority Fund balance is $1.9 million, which increased by $0.1 million from June 30, 2023, due to interest earnings on cash balances. It should be noted that VVEDA funds must be utilized for low and moderate income housing functions in the VVEDA target area.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
In Fiscal Year 2024-25, the Authority’s budget anticipates revenues of $0.2 million, which will be offset by expenditures of approximately $0.1 million to maintain current operations.
CONTACTING THE AUTHORITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and creditors with a general overview of the Authority’s finances and to show the Authority’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Authority’s Finance Department, at the City of Hesperia, 9700 Seventh Avenue, Hesperia, California 92345.
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FINANCIAL STATEMENTS
HESPERIA HOUSING AUTHORITY
STATEMENT OF NET POSITION
JUNE 30, 2024
See accompanying Notes to Financial Statements.
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ASSETS
Current Assets:
Cash and Cash Equivalents 6,126,158$
Receivables:
Accrued Interest 63,208
Due from City of Hesperia 99
Land Held for Resale 6,643,800
Total Current Assets 12,833,265
Noncurrent Assets:
Notes Receivable 22,834,475
Allowance for Notes Receivable (22,834,475)
Total Noncurrent Assets -
Total Assets 12,833,265
LIABILITIES
Current Liabilities:
Accounts Payable and Other Current Liabilities 874
Total Current Liabilities 874
NET POSITION
Restricted for Low Income Housing 12,832,391
Total Net Position 12,832,391$
Governmental
Activities
HESPERIA HOUSING AUTHORITY
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2024
See accompanying Notes to Financial Statements.
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Net (Expense)
Revenue and
Changes in
Net Position
Operating Capital
Charges for Grants and Grants and Governmental
Functions/Programs Expenses Services Contributions Contributions Activities Primary Government:
Governmental Activities:
Development Services 62,734$ -$ -$ -$ (62,734)$ Total Governmental Activities 62,734$ -$ -$ -$ (62,734)
GENERAL REVENUES
Income from Money and Property 334,194
Other 93,346
Total General Revenues 427,540
CHANGE IN NET POSITION 364,806
Net Position - Beginning of Year 12,467,585
NET POSITION - END OF YEAR 12,832,391$
Program Revenues
HESPERIA HOUSING AUTHORITY
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2024
See accompanying Notes to Financial Statements.
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Hesperia VVEDA Total Housing
Housing Housing Authority
Authority Authority Funds
ASSETS
Cash and Cash Equivalents 4,209,295$ 1,916,863$ 6,126,158$ Due from City of Hesperia 99 - 99 Accrued Interest 43,374 19,834 63,208 Notes Receivable 22,834,475 - 22,834,475 Allowance for Notes Receivable (22,834,475) - (22,834,475) Land Held for Resale 6,643,800 - 6,643,800 Total Assets 10,896,568$ 1,936,697$ 12,833,265$
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable and Other Current Liabilities 874$ -$ 874$ Total Liabilities 874 - 874
FUND BALANCES
Restricted:
Low Income Housing 10,895,694 1,936,697 12,832,391 Total Liabilities and Fund Balances 10,896,568$ 1,936,697$ 12,833,265$
HESPERIA HOUSING AUTHORITY
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION
GOVERNMENTAL FUNDS
JUNE 30, 2024
See accompanying Notes to Financial Statements.
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The Authority has no reconciliating items from the Governmental Funds Balance Sheet to the Statement of Net Position.
HESPERIA HOUSING AUTHORITY
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2024
See accompanying Notes to Financial Statements.
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Hesperia VVEDA Total Housing
Housing Housing Authority
Authority Authority Funds
REVENUES
Use of Money and Property 237,790$ 96,404$ 334,194$ Other Revenues 93,346 - 93,346 Total Revenues 331,136 96,404 427,540
EXPENDITURES
Current:
Development Services 62,734 - 62,734 Total Expenditures 62,734 - 62,734
EXCESS OF REVENUES
OVER EXPENDITURES 268,402 96,404 364,806 Fund Balances - Beginning of Year 10,627,292 1,840,293 12,467,585 FUND BALANCES - END OF YEAR 10,895,694$ 1,936,697$ 12,832,391$
HESPERIA HOUSING AUTHORITY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2024
See accompanying Notes to Financial Statements.
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The Authority has no reconciliating items from the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities.
HESPERIA HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2024
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NOTE 1 REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity
The Hesperia Housing Authority (Authority), which is a subsidiary component unit of the City of Hesperia (City), was established on April 5, 2011 by Resolution No. 2011-022 of the City Council. The Hesperia Housing Authority was activated when the dissolution of the former Hesperia Community Redevelopment Agency occurred on February 1, 2012.
The Authority develops, manages, and promotes programs and projects that preserve and improve the supply of affordable housing in the City for low and moderate income persons.
B. Basis of Presentation
The accounting policies of the Authority conform to accounting principles generally accepted in the United States of America as they are applicable to governmental units.
The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.
The more significant accounting policies reflected in the financial statements are summarized as follows:
Government-Wide 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 activities of the Hesperia Housing Authority. For the most part, the effect of interfund activity has been removed from these statements. 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 Authority has no business-type activities.
The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges to customers who purchase, use, or directly benefit from goods, services, or privileges provided by a given function and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.
Governmental Fund Financial Statements
The accounting system of the Authority is organized and operated on the basis of two funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, deferred inflows of resources, fund equity, revenues, and expenditures.
Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
HESPERIA HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2024
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NOTE 1 REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Basis of Presentation (Continued)
Governmental Fund Financial Statements (Continued)
Fund financial statements for the Authority’s governmental funds are presented after the government-wide financial statements. These statements display information about major funds individually.
The Authority’s Governmental Fund Balances are comprised of the following component:
The restricted fund balance category includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation.
In the governmental fund statements, when expenditures are incurred, the Authority uses the most restrictive funds first. The Authority would use the appropriate funds in the following order: committed, assigned, and lastly unassigned amounts.
The Authority has two major funds described below:
Hesperia Housing Authority Fund is used to account for Low and Moderate Housing activity. The fund balance is set aside to provide for future low and moderate income housing.
Victor Valley Economic Development Authority (VVEDA) Housing Authority Fund is used to account for Low and Moderate Housing activity within the VVEDA project area that is located within the boundaries of the City.
C. Measurement Focus
Measurement focus is a term used to describe “which” transactions are recorded within the various financial statements.
In the government-wide statement of net position and the statement of activities, activities are presented using the economic resources measurement focus. Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the government are reported.
In the fund financial statements, all governmental funds are accounted for on a spending or “financial flow” measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balances (net current assets) are considered a measure of “available spendable resources”.
Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of available spendable resources during a period.
HESPERIA HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2024
(17)
NOTE 1 REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Measurement Focus (Continued)
Because of their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year that resources were expended, rather than as a fund asset. The proceeds of long-term debt are recorded as other financing sources rather than as a fund liability. Amounts paid to reduce long-term indebtedness are reported as fund expenditures.
In the statement of net position, the net position is classified in the following categories:
Investment in capital assets – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that is attributed to the acquisition, construction or improvement of the assets. The Authority has no capital assets.
Restricted net position – This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments. Unrestricted net position – This amount is the net position that does not meet the definition of “investment in capital assets, net of related debt” or “restricted net position”.
When both restricted and unrestricted resources are combined in a fund, expenses are considered to be paid first from restricted resources, and then from unrestricted resources.
D. Basis of Accounting
Basis of accounting refers to “when” transactions are recorded regardless of the measurement focus applied.
In the government-wide statement of net position and statement of activities, the governmental activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used, regardless of the timing of related cash flows. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place.
HESPERIA HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2024
(18)
NOTE 1 REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Basis of Accounting (Continued)
In the fund financial statements, governmental funds are presented using the modified-accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The Authority considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.
Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as revenues in the period in which the underlying exchange transaction upon which they are based takes place. Imposed nonexchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary nonexchange transactions are recognized as revenues when all applicable eligibility requirements have been met.
E. Cash and Investments
Investments are stated at fair value (quoted market price or best available estimate thereof, see Note 2).
F. Claims and Judgments
When it is probable that a claim liability has been incurred at year-end, and the amount of the loss can be reasonably estimated, the Authority records the estimated loss, net of any insurance coverage under its self-insurance program. At June 30, 2024, in the opinion of the Authority's Attorney, the Authority had no material unrecorded claims that would require loss provision in the financial statements, including losses for claims that are Incurred But Not Reported (IBNR). Small dollar claims and judgments are recorded as expenditures when paid.
The Authority participates in the insurance program of the City of Hesperia. Information relating to the insurance program can be found in the notes to the basic financial statements of the City of Hesperia.
G. Land Held for Resale
Land held for resale is carried at the lower of cost or estimated realizable value.
HESPERIA HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2024
(19)
NOTE 1 REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. Capital Assets
Capital assets, which include equipment, are depreciated and are reported in the government-wide financial statements. Authority policy has set the capitalization threshold for reporting capital assets at $5,000.
Capital assets have an estimated useful life greater than one year and are valued at historical cost or estimated cost if actual historical cost is not available. Donated capital assets are recorded at acquisition value at the date of acquisition. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not capitalized.
Depreciation is charged to operations using the straight-line method based on the estimated useful life of an asset ranging from 5 to 30 years. The Authority has no capital assets.
I. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The Authority does not have any type of these items at June 30, 2024.
In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources . This separate financial statement element, deferred inflows of resources , represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The Authority does not have any type of these items at June 30, 2024.
J. Receivables
All accounts, taxes, and service receivables are shown net of an allowance for uncollectibles.
K. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
HESPERIA HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2024
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NOTE 2 CASH AND INVESTMENTS
A. Equity in Cash and Investment Pool of the City of Hesperia The Authority does not have a separate bank account; however, the Authority’s cash and investments are maintained in an investment pool managed by the City. The Authority is a voluntary participant in that pool. This pool is governed by and under the regulatory oversight of the Investment Policy adopted by the City Council of the City. The Authority has not adopted an investment policy separate from that of the City. The fair value of the Authority’s investment in this pool is reported in the accompanying financial statements at amounts based upon the Authority’s pro-rata share of the fair value calculated by the City for the entire City portfolio. The balance available for withdrawal is based on the accounting records maintained by the City, which are recorded on an original cost basis.
B. Investments Authorized by the California Government Code and the Authority’s Investment Policy
The table below identifies the investment types that are authorized for the Authority by the California Government Code (or the Authority’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the Authority’s investment policy, where more restrictive) that address interest rate risk, and concentration of credit risk.
Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity of Portfolio in One Issuer U.S. Treasury Obligations 5 Years Unlimited None
U.S. State or Local Agency Securities 5 Years Unlimited None Banker's Acceptances 180 Days 25% 5%
Commercial Paper 270 Days 15% 10%
Negotiable Certificates of Deposit 5 Years 25% None
Repurchase Agreements 1 Year 20% None
Local Agency Investment Fund (LAIF) N/A Unlimited None
Medium-Term Notes 5 Years 30% None
Mutual and Money Market Funds N/A 20% 10%
Collateralized Bank Deposits 5 Years 10% None
Investment Pools N/A 30% None
Municipal Bonds 5 Years 10% None
Supranational Obligations 5 Years 30% None
Public Bank Obligations 5 Years 100% None
C. Disclosures Related to Interest Rate Risk, Credit Risk and Custodial Credit Risk, and Fair Value Measurements
The Authority’s cash and cash equivalents are pooled with the City of Hesperia’s cash and investments. Additional disclosures regarding the pooled investments related to interest rate risk, credit risk, custodial credit risk and fair value measurements are available in the City of Hesperia’s Annual Comprehensive Financial Report.
HESPERIA HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2024
(21)
NOTE 3 NOTES RECEIVABLE
Notes receivable, totaling $22.8 million at June 30, 2024 consists of loans provided for low and moderate income housing, with interest between 1% and 3% and maturity of 55 years.
Payments on these notes are based on a percentage of the residual receipts. The Authority does not know the timing of the repayment of the notes, as there is not enough information on the receipt of residual receipts; therefore, the Authority has recorded an allowance for uncollectible for the outstanding balance of $22.8 million.
Notes receivable at June 30, 2024 include the following:
Outstanding Outstanding
June 30, 2023 Additions Deductions June 30, 2024
A. KDF VAH I, L.P. 3,256,098$ 29,080$ (13,908)$ 3,271,270$ B. KDF Hesperia, L.P. 1,962,121 24,524 - 1,986,645 C. KDF Hesperia II, L.P. 2,655,005 28,180 - 2,683,185 D. PDDC San Remo Hesperia, L.P. 4,446,287 39,665 - 4,485,952 E. PDDC San Remo Hesperia II, L.P. 6,009,919 54,945 (108,722) 5,956,142 F. Eagle Hesperia 55, L.P. 4,032,825 76,851 - 4,109,676 G. Homebuyer Assistance Program 341,605 - - 341,605 Totals 22,703,860$ 253,245$ (122,630)$ 22,834,475$
A. KDF VAH I, L.P.
In July 2006, the former Hesperia Community Redevelopment Agency (HCRA) entered into an Owner Participation Agreement (OPA) with KDF VAH I, L.P. (a California limited partnership) for the development, construction and operation of a 68-unit apartment complex of which certain units shall be available to very low income tenants, low income tenants, and moderate income tenants. Under the terms of the OPA, the HCRA loaned $2,900,000 of its low and moderate income housing funds toward the actual cost for the development, construction, and operation of the project. The loan is for a term of not more than 55 years and shall bear interest at a rate of 1%. The agreement is secured by a deed of trust on the property. Due to the dissolution of redevelopment agencies by AB 26x1, the Authority assumed responsibility of the HCRA notes receivable. Accrued interest on the note through June 30, 2024 is $371,270. The balance of the loan outstanding at June 30, 2024 was $3,271,270. Payments on the loan are based on a percentage of the Partnership’s positive cash flow. Any unpaid balance is due and payable at the maturity date.
HESPERIA HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2024
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NOTE 3 NOTES RECEIVABLE (CONTINUED)
B. KDF Hesperia, L.P.
In December 2005, the former HCRA entered into an OPA with KDF Hesperia, L.P. (a California limited partnership) for the development, construction and operation of a 110-unit apartment complex of which certain units shall be available to very low income tenants, low income tenants, and moderate income tenants. Under the terms of the OPA, the HCRA loaned $1,250,000 of its low and moderate income housing funds toward the actual cost for the development, construction, and operation of the project.
The loan is for a term of not more than 55 years and shall bear simple interest at a rate of 1%. The agreement is secured by a deed of trust on the property. Due to the dissolution of redevelopment agencies by AB 26x1, the Authority assumed responsibility of the HCRA notes receivable. On February 1, 2012, the Housing Authority issued a loan of $398,589, with an interest rate of 3%, to assist with converting the construction loan to a permanent loan. Accrued interest on the combined notes through June 30, 2024 is $338,057. The balance of the loan outstanding at June 30, 2024 was $1,986,645.
Payments on the loan are based on a percentage of the Partnership’s positive cash flow.
Any unpaid balance is due and payable at the maturity date.
C. KDF Hesperia II, L.P.
In March 2006, the former HCRA entered into an OPA with KDF Hesperia II, L.P. (a California limited partnership) for the development, construction and operation of a 72-unit apartment complex of which certain units shall be available to very low income tenants, low income tenants, and moderate income tenants. Under the terms of the OPA, the HCRA loaned $2,000,000 of its low and moderate income housing funds toward the actual cost for the development, construction, and operation of the project.
The loan is for a term of not more than 55 years and shall bear interest at a rate of 1%.
The agreement is secured by a deed of trust on the property. Due to the dissolution of redevelopment agencies by AB 26x1, the Authority assumed responsibility of the HCRA notes receivable. On February 1, 2012, the Authority issued a loan of $270,070, with an interest rate of 3%, to assist with converting the construction loan to a permanent loan.
Accrued interest on the combined notes through June 30, 2024 is $413,115. The balance of the loan outstanding at June 30, 2024 was $2,683,185. Payments on the loan are based on a percentage of the Partnership’s positive cash flow. Any unpaid balance is due and payable at the maturity date.
HESPERIA HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2024
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NOTE 3 NOTES RECEIVABLE (CONTINUED)
D. PDDC San Remo Hesperia, L.P.
On November 2007, the former HCRA entered into an OPA with PDDC San Remo Hesperia, L.P. (Palm Desert Development Company, a California limited partnership) for the development, construction, and operation of a 65-unit apartment complex of which certain units shall be available to very low-income tenants and low-income tenants.
Under the terms of the OPA, the HCRA loaned $3,955,711 of its low and moderate income housing funds toward the actual cost for the development, construction, and operation of the project. The loan is for a term of not more than 55 years and shall bear interest at a rate of 1%. The agreement is secured by a deed of trust on the property.
Due to the dissolution of redevelopment agencies by AB 26x1, the Authority assumed responsibility of the HCRA notes receivable. Accrued interest on the note through June 30, 2024 is $530,241. The balance of the loan outstanding at June 30, 2024 was $4,485,952. Payments on the loan are based on a percentage of the Partnership’s positive cash flow. Any unpaid balance is due and payable at the maturity date.
E. PDDC San Remo Hesperia II, L.P.
On October 5, 2010, the former HCRA entered into an OPA with PDDC San Remo Hesperia II, L.P. (Palm Desert Development Company, a California limited partnership) for the development, construction, and operation of a 58-unit apartment complex of which certain units shall be available to very low-income tenants and low-income tenants. Under the terms of the OPA, the HCRA loaned $6,613,620 of its low and moderate income housing funds toward the actual cost for the development, construction, and operation of the project. The loan is for a term of not more than 55 years and shall bear interest at a rate of 1%. The agreement is secured by a deed of trust on the property. Due to the dissolution of redevelopment agencies by AB 26x1, the Authority assumed responsibility of the HCRA notes receivable. Accrued interest on the note through June 30, 2024 is $521,664 and principal and interest payments received are $1,485,865. The balance of the loan outstanding at June 30, 2024 was $5,956,142.
F. Eagle Hesperia 55, L.P.
On February 16, 2016, the former HCRA entered into an OPA with Eagle Hesperia 55 L.P. (a California limited partnership) for the development, construction, and operation of a 96-unit apartment complex of which certain units shall be available to low income senior citizens. Under the terms of the OPA, the Authority loaned $3,831,975 of its low and moderate income housing funds toward the actual cost for the development, construction, and operation of the project. The loan is for a term of 55 years, with the option of extending the term up to 25 years; the option must be exercised between the 53rd year and 54th year. The loan shall bear interest at a rate of 2%. The agreement is secured by a deed of trust on the property. Accrued interest on the note through June 30, 2024 is $277,701. The balance of the loan outstanding at June 30, 2024 was $4,109,676. Any unpaid balance is due and payable at the maturity date.
HESPERIA HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2024
(24)
NOTE 3 NOTES RECEIVABLE (CONTINUED)
G. Homebuyer Assistance Program
On July 17, 2012 the City Council and Housing Authority adopted Joint Resolution No. 2012-061 and HHA 2012-010 approving implementation of the Seller Mortgage Carryback Program (SMCP) that carried back a portion of the sale price of properties as a second mortgage loan and; the SMCP will enable the City and HHA to fund the amount needed to make the purchase price of single family residential properties affordable to households whose income is 50% AMI or below, in the form of a 30-year deferred, zero interest bearing loan for an original amount of $428,554. The SMCP loan is secured by a second deed of trust on the property. Principal payments received to date are $86,949. At June 30, 2024, four of the five loans are outstanding with total balance of $341,605.
NOTE 4 RISK MANAGEMENT
The Authority, through the City of Hesperia, is a member of the Public Entity Risk Management Authority (PERMA), a joint powers authority for the purpose of achieving savings on insurance premiums. Disclosures regarding these policies are available in the City of Hesperia’s Annual Comprehensive Financial Report.
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REQUIRED SUPPLEMENTARY INFORMATION
HESPERIA HOUSING AUTHORITY
BUDGETARY COMPARISON SCHEDULE
HESPERIA HOUSING AUTHORITY SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2024
See accompanying Note to Required Supplementary Information. (26)
Variance with
Original Final Actual Final Budget
FUND BALANCE - BEGINNING OF YEAR 10,627,292$ 10,627,292$ 10,627,292$ -$
RESOURCES (INFLOWS)
Use of Money and Property 50,244 50,244 237,790 187,546 Other Revenues 93,346 93,346 93,346 -
Amount Available for
Appropriations 143,590 143,590 331,136 187,546
CHARGES TO APPROPRIATIONS
(OUTFLOWS)
Current:
Development Services 75,781 75,781 62,734 13,047 Total Charges to Appropriations 75,781 75,781 62,734 13,047
EXCESS OF RESOURCES
OVER CHARGES TO
APPROPRIATIONS 67,809 67,809 268,402 200,593 FUND BALANCE - END OF YEAR 10,695,101$ 10,695,101$ 10,895,694$ 200,593$ Budgeted Amounts
HESPERIA HOUSING AUTHORITY
BUDGETARY COMPARISON SCHEDULE
VVEDA HOUSING AUTHORITY SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2024
See accompanying Note to Required Supplementary Information. (27)
Variance with
Original Final Actual Final Budget
FUND BALANCE - BEGINNING OF YEAR 1,840,293$ 1,840,293$ 1,840,293$ -$
RESOURCES (INFLOWS)
Use of Money and Property 30,000 30,000 96,404 66,404 FUND BALANCE - END OF YEAR 1,870,293$ 1,870,293$ 1,936,697$ 66,404$ Budgeted Amounts
HESPERIA HOUSING AUTHORITY
NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2024
(28)
NOTE 1 BUDGETARY DATA
In conjunction with the City of Hesperia’s budgeting process, the Authority adopts annual operating budgets for the governmental funds each year. The Authority’s Board approves each year's budget submitted by the City Manager prior to the beginning of the new fiscal year. The Board conducts public hearings prior to its adoption. Supplemental appropriations, when required during the period, are also approved by the Board. Increases in annual expenditures require approval by the Board. Interdepartmental budget changes are approved by the City Manager. In most cases, expenditures may not exceed appropriations at the fund level for each fund. At fiscal year-end, all operating budget appropriations lapse.
However, encumbrances at year-end are reported as reservations of fund balance. Budgets for the governmental funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America.
Attachment 2
HOUSING SUCCESSOR ANNUAL REPORT
REGARDING THE
LOW- AND MODERATE-INCOME HOUSING ASSET
FUND FOR FISCAL YEAR 2023-24
PURSUANT TO
CALIFORNIA HEALTH AND SAFETY CODE SECTION 34176.1(f)
FOR THE
HESPERIA HOUSING AUTHORITY
This Housing Successor Annual Report (Report) regarding the Low - and Moderate-Income Housing Asset Fund (LMIHAF) has been prepared pursuant to California Health and Safety Code Section 34176.1(f) and is dated as of December 16, 2024. This Report sets forth certain details of the Hesperia Housing Authority (Housing Successor) activities during Fiscal Year 2023-24 (Fiscal Year). The purpose of this Report is to provide the governing body of the Housing Successor an annual report on the housing assets and activities of the Housing Successor under Part 1.85, Division 24 of the California Health and Safety Code, in particular sections 34176 and 34176.1 (Dissolution Law).
The following Report is based upon information prepared by Housing Successor staff and information contained within the independent financial audit of the Low and Moderate Income Housing Asset Fund for Fiscal Year 20 23-24 (Fiscal Year), as a part of the 202 4 Annual Comprehensive Financial Report, as prepared by Clifton Larson Allen (Audit), which Audit is separate from this annual summary Report; further, this Report conforms with and is organized into sections I. through XI., inclusive, pursuant to Section 34176.1(f) of the Dissolution Law.
I. Amount Deposited into LMIHAF: This section provides the total amount of funds deposited into the LMIHAF during the Fiscal Year. Any amounts deposited for items listed on the Recognized Obligation Payment Schedule (ROPS) must be distinguished from the other amounts deposited.
II. Ending Balance of LMIHAF: This section provides a statement of the balance in the LMIHAF as of the close of the Fiscal Year. Any amounts deposited for items listed on the ROPS must be distinguished from the other amounts deposited.
III. Description of Expenditures from LMIHAF: This section provides a description of the expenditures made from the LMIHAF during the Fiscal Year. The expenditures are to be categorized.
IV. Statutory Value of Assets Owned by Housing Successor: This section provides the statut ory value of real property owned by the Housing Successor, the value of loans and grants receivables, and the sum of these two amounts.
V. Description of Transfers: This section describes transfers, if any, to another Housing Successor agency made in previous Fiscal Year(s), including whether the funds are unencumbered and the status of projects, if any, for which the transferred LMIHAF will be used. The sole purpose of the transfers must be for the development of transit priority projects, permanent supportive housing, housing for agricultural employees or special needs housing.
VI. Project Descriptions: This section describes any project for which the Housing Successor receives or holds property tax revenue pursuant to the ROPS and the status of that project.
2 VII. Status of Compliance with Section 33334.16: This section provides a status update on compliance with Section 33334.16 for interests in real property acquired by the former redevelopment agency prior to February 1, 2012. For interests in real property acquired on or after February 1, 2012, provide a status update on the project.
VIII. Description of Outstanding Obligations under Section 33413: This section describes the outstanding inclusionary and replacement housing obligations, if any, under Section 33413 that remained outstanding prior to dissolution of the former redevelopment agency as of February 1, 2012 along with the Housing Successor’s progress in meeting those prior obligations, if any, of the former redevelopment agency and how the housing Successor’s plans to meet unmet obligations, if any.
IX. Income Test: This section provides the information required by Section 34176.1(a)(3)(B), or a description of expenditures by income restriction for five -year period, with the time period beginning January 1, 2018, and whether the statutory thresholds have been met.
X. Senior Housing Test: This section provides the percentage of units of deed -restricted rental housing restricted to seniors and assisted individually or jointly by the Housing Successor, its former redevelopment Agency, and its host jurisdiction within the previous 10 years in relation to the aggregate number of units of deeds -restricted rental housing assisted individually or jointly by the housing successor, its former Redevelopment Agency and its host jurisdiction within the same time period. For this Re port the ten -year period reviewed is July 1, 2014, to June 30, 2024.
XI. Excess Surplus Test: This section provides the amount of excess surplus in the LMIHAF, if any, and the length of time that the Housing Successor has had excess surplus, and the Housing Successor’s plan for eliminating the excess surplus.
XII. Recent Legislation: SB 7: Streamlines approval for affordable housing projects, reducing delays from environmental reviews. AB 2011: Allows the conversion of commercial properties into affordable housing, offering incentives to developers. Density Bonus Law Update: Expands incentives for higher-density, affordable housing developments. Housing Accountability Act Amendments: Strengthens enforcement for approving housing projects that meet state criteria, limiting local rejection.
This Report and the former redevelopment agency’s pre- dissolution Implementation Plans are to be made available to the public on the City’s website www.cityofhesperia.us I. AMOUNT DEPOSITED INTO LMIHAF
A total of $331,136 was deposited into the LMIHAF during the Fiscal Year. Of the total funds deposited into the LMIHAF, a total of $0 was held for items listed on the ROPS.
II. ENDING BALANCE OF LMIHAF
At the close of the Fiscal Year, the ending balance in the LMIHAF was $10,895,694 of which $0 is held for items listed on the ROPS.
3 III. DESCRIPTION OF EXPENDITURES FROM LMIHAF
The following is a description of expenditures from the LMIHAF by category:
Fiscal Year
Monitoring & Administration Expenditures $ 54,017
Homeless Prevention and Rapid Rehousing
Services Expenditures
0 Housing Development
Expenditures
Expenditures on Low
Income Units
0 Expenditures on Very-Low Income Units 0
Expenditures on Extremely-Low Income Units 0
Total Housing Development Expenditures 54,017
ADDITIONAL EXPENSE:
Loss on land held for resale
8,717
Total LMIHAF Expenditures in Fiscal Year $ 62,734
IV. STATUTORY VALUE OF ASSETS OWNED BY HOUSING SUCCESSOR IN LMIHAF Under the Dissolution Law and for purposes of this Report, the “statutory value of real property” means the value of properties formerly held by the former redevelopment agency as listed on the housing asset transfer schedule approved by the Department of Finance as listed in such schedule under Section 34176(a)(2), the value of the properties transferred to the Housing Successor pursuant to Section 34181(f), and the purchase price of property(ies) purchased by the Housing Successor. Further, the value of loans and grants receivable is included in these reported assets held in the LMIHAF.
The following provides the statutory value of assets owned by the housing Successor.
As of End of
Fiscal Year
Statutory Value of Real Property Owned by Housing Authority $ - Value of Loans and Grants Receivable 22,834,475
Total Value of Housing Successor Assets $22,834,475
V. DESCRIPTION OF TRANSFERS
The Housing Successor did not make any LMIHAF transfers to other Housing Successor(s) under Section 34176.1(c)(2) during the Fiscal Year.
VI. PROJECT DESCRIPTIONS
The Housing Successor does not receive or hold property tax revenue pursuant to the ROPS.
4 VII. STATUS OF COMPLIANCE WITH SECTION 33334.16
Section 34176.1 provides that Section 33334.16 does not apply to interests in real property acquired by the Housing Successor on or after February 1, 2012; however, this Report presents a status update on the project related to such real property.
With respect to interests in real property acquired by the former redevelopment agency prior to February 1, 2012, the time periods described in Section 33334.16 shall be deemed to have commenced on the date that the Department of Finance approved the property as a housing asset in the LMIHAF; thus, as to real property acquired by the former redevelopment agency now held by the Housing Successor in the LMIHAF, the Housing Successor must initiate activities consistent with the development of the real property for the purpose for which it was acquired within five years of the date the DOF approved such property as a housing asset.
In furtherance thereof, the Housing Successor does not have any real property.
VIII. DESCRIPTION OF OUTSTANDING OBLIGATIONS PURSUANT TO SECTION 33413 Replacement Housing: According to the 2010 -2014 Implementation Plan for the former redevelopment agency, no Section 33413(a) replacement housing obligations were transferred to the Housing Successor. The former redevelopment agency’s implementation Plans are posted on the City’s website at www.cityofhesperia.us .
Inclusionary/Production Housing: According to the 2010 -2014 Implementation Plan for the former redevelopment agency, no Section 33413(b) inclusionary/production housing obligations were transferred to the Housing Successor. The former redevelopment agency’s Implementation Plans are posted on the City’s website at www.cityofhesperia.us .
IX. EXTREMELY-LOW INCOME TEST
Section 34176.1(a)(3)(B) requires that the Housing Successor must require at least 30% of the LMIHAF to be expended for development of rental housing affordable to and occupied by households earning 30% or less of the AMI. If the housing Successor fails to comply with the Extremely-Low Income requirement in any five-year report, then the Housing Successor must ensure that at least 50% of the funds remaining in the LMIHAF be expended in each fiscal year following the latest year following the report on households earning 30% or less of the AMI until the Housing Successor demonstrates compliance with the Extremely -Low Income requirement.
For informational purposes, the following provides the Housing Successor’s Extremely -Low Income Housing Test as of FY 2023 – 2024.
Extremely-Low Income Test FY 2023-2024
LMIHAF Spent on Extremely-Low Income Households $0
Total LMIHAF Spent (Five Year Total FY 2020 thru 2024) $2,599,132 Extremely-Low Income Test 0%
5 X. SENIOR HOUSING TEST
The Housing Successor is to calculate the percentage of units of deed restricted rental housing restricted to seniors and assisted by the Housing Successor, the former redevelopment agency and/or the City within the previous 10 years in relation to the aggregate number of units of deed-restricted rental housing assisted by the Housing Successor, the former redevelopment agency and/or City within the same time period. If this percentage exceeds 50%, then the Housing Successor cannot expend future funds in the LMIHAF to assist additional senior housing units until the Housing Successor or City assists and construction has commenced on a number of restricted rental units that is equal to 50% of the total amount of deed-restricted rental units.
The following provides the Housing Successor’s Senior Housing Test for the 10-year period of July 1, 2014, through June 30, 2024.
XI. EXCESS SURPLUS TEST
The LMIHAF has a $0 Excess Surplus. The Housing Successor has three fiscal years to encumber, or transfer, the excess surplus, if any. The Housing Successor has not had an Excess Surplus since February 1, 2012.
Senior Housing Test
July 1, 2014-
June 30, 2024
# of Assisted Senior Rental Units 96
# of Total Assisted Rental Units 474
Senior Housing Percentage 20%
Attachment 3
City of Hesperia
STAFF REPORT
DATE: January 21, 2025
TO: Chair and Board Members, Hesperia Water District
FROM: Rachel Molina, City Manager
BY: Cassandra Sanchez, Director of Public Works/City Engineer Robert Worby, Fleet / Warehouse Supervisor
SUBJECT: Badger Meter, Inc.Contract Amendment
RECOMMENDED ACTION
It is re commended that the City Council and Board Members of the Hesperia Water District authorize the City Manager to increase the contract with Badger Meter Inc. in the amount of $250,000 for a new not-to-exceed amount of $1,150,000 for the purchase of ¾” and 1” ultrasonic meters.
BACKGROUND
The Hesperia Water District has standardized various services and repair products to minimize the need to stock multiple products and simplify installation processes. Badger water products are one of the products the District has standardized, and it is the direct distributor in Southern California for Badger water meters.
ISSUES/ANALYSIS
Badger water meters interface with the cellular endpoints used for remote meter reading and with Badger's Beacon automated metering analytics software. These meters have no moving part s, which provides customers with improved flow rates and allows consumption to be registered down to 0.04 gallons per minute. Additionally, ultrasonic meters capture pressure readings , which is valuable information not only for the City but also for the customer. Another feature of the ultrasonic meter is an easy -to-read, 9-digit LCD, which displays consumption and rate of flow.
The battery for each register comes with a 20-year warranty. These will be installed in new single- family residences , including those within the Silverwood development. The Silverwood development anticipates 300 homes to be built in 2025, 500 in 2026, and 700 each year thereafter.
CITY GOAL SUPPORTED BY THIS ITEM
Financial Health: Maintain a balanced budget and adequate reserves.
FISCAL IMPACT
Sufficient funding has been included in the Fiscal Year 2024-25 Operating Budget.
Chair and Board Members, Hesperia Water District
Badger Meter, Inc. Contract Amendment
January 21, 2025
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
None
01071.0020/1043604.1
City of Hesperia
STAFF REPORT
DATE: January 21, 2025
TO: Housing Authority Board
Mayor and City Council Members
FROM: Rachel Molina, City Manager
BY: Nathan R. Freeman, Director of Development Services SUBJECT: Declaration of Assessor Parcel No. 0407-232-07 as Exempt Surplus Property and Approval of Transfer from the Hesperia Housing Authority to the City and placement in the General Fund for Governmental Purposes
RECOMMENDED ACTION
It is recommended t hat the Housing Authority Board and the City Council jointly: (1) a dopt a resolution declaring property with Assessor Parcel No. (APN) 0407-232-07 as exempt surplus land for future agency use and governmental purposes pursuant to the Surplus Land Act (California Government Code §54206 et seq); (2) approve the transfer of the property with APN 0407-232-07 from the Housing Authority to the City; (3) accept the property with APN 0407-232- 07 and place the property in the City’s General Fund at no cost to the General Fund ; and (4) authorize the Executive Director and City Manager and/or designee(s) to execute all necessary documents to effectuate the transfer.
BACKGROUND
Assessor Parcel No. 0407- 232-07 (the “Property”) is located on the easterly side of 9 th Avenue
between Smoketree and Live Oak Streets. The Property is approximately 3.3 acres and is zoned High Density Residential (HDR) and was originally acquired by the Housing Authority to support housing development and related purposes. However, the Property is no longer needed for housing purposes, as other properties located elsewhere in the city will be served as additional sites for housing purposes, including high density residential development. The Property is not listed on the Long Range Property Management Plan and is not listed on the site inventory for housing purposes. Rather, the Property, being adjacent to or within the vicinity of other City facilities, is better suited to serve as a future governmental-use asset to further the City’s current and future operational needs.
The Surplus Land Act requires public agencies, such as the Hesperia Housing Authority , to declare property as surplus or exempt surplus before disposing of it. Government Code Section 54221(f)(1)(C) defines properties used or planned to be used for public agency use or governmental purposes as exempt surplus land. This designation ensures compliance with state law and aligns with the City’s goals of efficient property management.
After careful review, staff has determined the Property is more suitable for government use (to be determined through separate review/approval of the City Council) than for housing development, and declaring the Property as exempt surplus will streamline its transfer and ensure compliance with the Surplus Land Act.
Staff Report to the Housing Authority Board and Mayor and City Council Members Exempt Surplus Property Declaration
January 21, 2025
Lastly, the declaration and transfer of the Property is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines §15061(b)(3), as it can be seen with certainty that there is no possibility the activity will have a significant impact on the environment.
CITY GOAL SUPPORTED BY THIS ITEM
Future Development- Facilitate balanced growth to ensure cohesive community development and pursue economic development.
FISCAL IMPACT
The transfer of the Property will have no direct fiscal impact on the General Fund, as the Property will be transferred at no cost. Future costs associated with the use or development of the Property will be evaluated and included in the applicable departmental budgets.
ATTACHMENTS
1. Site Map
2. Joint Resolution Declaring the Property as Exempt Surplus
ATTACHMENT 1 – SITE MAP
HHA RESOLUTION NO. 2025-01
A JOINT RESOLUTION OF THE HESPERIA HOUSING AUTHORITY AND CITY
COUNCIL OF THE CITY OF HESPERIA, CALIFORNIA, DECLARING
ASSESSOR PARCEL NO. 0407-232-07 AS EXEMPT SURPLUS LAND OF THE
HESPERIA HOUSING AUTHORITY AND AUTHORIZING THE TRANSFER, AT
NO COST, TO THE CITY OF HESPERIA FOR FUTURE GOVERNMENT USE AND PURPOSE, PURSUANT TO THE SURPLUS LAND ACT, AND THE CITY’S
ACCEPTANCE OF SUCH EXEMPT SURPLUS LAND
WHEREAS, the Hesperia Housing Authority (“Authority”) and the City of Hesperia (“City”) both own, administer and manage various properties throughout the City for public agency purposes, in accordance with state law and local policies; and WHEREAS, Assessor Parcel No. 0407-232-07 (“Property”) is located on the easterly side of 9
th Avenue between Smoketree and Live Oak Streets and is owned by the Authority; and WHEREAS, the Property is no longer necessary for the Authority’s uses or purposes and is better suited to serve as a future government-use asset by the City; and WHEREAS, the Surplus Land Act (California Government Code Section 54220 et seq .) governs the disposition of surplus land by local authorities, including the Authority and the City ; and
WHEREAS, pursuant to California Government Code Section 54221(f)(1)(C), the Property qualifies as “exempt surplus land” , as it is being transferred between government agencies for government uses and purposes and will not be sold for private development; and WHEREAS, the transfer of the Property from the Authority to the City will allow the City to repurpose the land for future government uses (to be determined through separate review and approval by the City Council) and ensures compliance with state law and aligns with the City’s goals of efficient property management; and
WHEREAS, the Authority Board and the City Council have determined that transferring the Property to the City , at no cost and for the City’s future government uses and purposes, is consistent with the Surplus Land Act; and
WHEREAS, the City Council desires to accept the Property for its own governmental use and purposes, and not for commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development.
WHEREAS, the declaration and transfer of the Property is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines §15061(b)(3), as it can be seen with certainty that there is no possibility the activity will have a significant impact on the environment.
NOW THEREFORE, BE IT RESOLVED, that the Hesperia Housing Authority and the City Council hereby does find, determine, and declare based upon evidence presented to it as follows:
2 Section 1. The staff report presented regarding this matter at the January 21, 2025 hearing is incorporated herein by this reference. The facts referenced in this Resolution and the staff report, and specifically the recitals above, are found to be true and are incorporated herein by this reference. The findings made by the City Council herein are supported by substantial evidence contained in the record of this proceeding.
Section 2. The Aut hority Board hereby declares the Property to be exempt surplus land and authorizes and approves the transfer of the Property, at no cost, to the City for future City use and government purposes, in compliance with the Surplus Land Act.
Section 3. The C i ty Council hereby accepts the Property for future City use and government purposes.
Section 4. The E xecutive Director of the Authority and the City Manager and/or designee(s) are hereby authorized and directed to execute any and all documents necessary to complete the transfer of the Property and to take such further actions, as may be necessary, to carry out the intent of this Resolution.
Section 5. This Resolution shall take effect immediately upon its adoption by both the Authority Board and the City Council.
PASSED, APPROVED and ADOPTED a t a regular meeting of the Hesperia Housing Authority Board and the City Council of the City of Hesperia this 21st day of, January 2025.
ATTEST:
________________________________
Allison Lee, Chairperson
____________________________
Erin Baum, Authority Secretary
________________________________
Allison Lee, Mayor
____________________________
Erin Baum, Assistant City Clerk
3 STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss.
CITY OF HESPERIA )
I, ERIN BAUM, Hesperia Housing Authority Secretary and City Clerk of the City of Hesperia, California, do hereby certify that Resolution No. _________________________ was adopted by the Hesperia Housing Authority Board and the City Council of the City of Hesperia at a regular meeting held on the __ day of _____, 2025, and that the same was adopted by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
___________________________________
ERIN BAUM
ASSISTANT CITY CLERK
01071.0017/815921.1
City of Hesperia
STAFF REPORT
DATE: January 21, 2025
TO: Mayor and City Council Members
FROM: Rachel Molina, City Manager
BY: Nathan R. Freeman, Director of Development Services SUBJECT: Consider Adoption of a Resolution of Necessity to Acquire a Portion of the Property Located at the Southwest Corner of Poplar Court and Highway 395, bearing Assessor Parcel No. 3064-561-07
RECOMMENDED ACTION
It is recommended that the City Council hold a public hearing on the proposed Resolution of Necessity (Resolution No. 2025- 01) and adopt the Resolution of Necessity authorizing the commencement of an eminent domain action necessary to acquire a portion of the property located at the southeast corner of Poplar Court and Highway 395, bearing Assessor Parcel No. 3064-561-07 (the “Property”).
BACKGROUND
The Property is currently vacant and unimproved, located at the southeast corner of Poplar Court and Highway 395. The City seeks to acquire a 22,682 square foot portion of the Property for a permanent easement and a 31,519 square foot portion of the Property for a temporary construction easement in order to improve Poplar Court and support future development.
Currently, Poplar Court is an unpaved road that presents challenges for accessibility, traffic flow, and public safety. The improvement of Poplar Court, to be funded and constructed by the owner of the property immediately to the north, will enhance traffic safety, reduce dust pollution, and facilitate efficient transportation. Moreover, these upgrades are critical for compliance with regional planning initiatives and will align with the City’s broader infrastructure development goals.
Future development in the immediate area will include industrial and commercial projects.
Improving Poplar Court ensures the infrastructure can support these projects, which benefit the community through job creation, increased property values, and an increased tax base.
The portion of the Property needed to improve Poplar Court was appraised by a professional real estate appraiser . The appraiser, licensed by the California Office of Real Estate Appraisers, determined the fair market value of the portion of the Property needed to improve Poplar Court to be $69,611.85,
which represents the full amount offered by the City to the property owners.
On October 17, 2024, in compliance with Government Code Section 7267.2, the City made a written offer to purchase the P roperty. T he property owners , Jane Hsieh and Debby Hsieh responded, on December 16, 2024, with a counteroffer of $223,674 ( exceeding the appraised value by $154,062).
Under state law, the City must offer just compensation based on the appraised fair market value to ensure an equitable and transparent process. While the City considers counteroffers, it must adhere to the appraised value unless additional evidence justifies a higher amount. This approach
Staff Report to the Mayor and City Council Members
Resolution of Necessity for a Portion of APN 3064-561-07 January 21, 2025
upholds fairness and public accountability. The City cannot meet the counteroffer, as California’s eminent domain laws require compensation to align with the appraised fair market value.
On January 6, 2025, in accordance with California Government Code Section 1245.235, the City gave notice to the Property Owners that the City Council would consider a Resolution of Necessity authorizing the acquisition of a portion of the P roperty by eminent domain. The notice informed the Property Owners of their right to appear at this hearing and be heard on the following issues:
1. W hether the public interest and necessity require the project;
2. W hether the Project is planned or located in the manner that will be most compatible with the greatest public good and the least private injury;
3. W hether the acquisition of the Property is necessary for the project;
4. W hether the offer required by Section 7267.2 of the Government Code has been made to the owner or owners of record, or has not been made because the owner cannot be located with reasonable diligence; and
5. W hether the offer required by Section 7267.2 of the Government Code was made in the form and substance required by law.
While a hearing on a R esolution of N ecessity is often referred to as a public hearing, the only notice required is 15 days’ notice by regular mail to the property owner s. No published notice is required.
The affirmative vote of two-thirds of all the members of the City Council, which in this case is four (4) affirmative votes, is required to adopt the Resolution of Necessity.
FINDINGS REQUIRED IN THE RESOLUTION OF NECESSITY
Public acquisition of a portion of the Property by eminent domain for the improvement of Poplar Court is authorized by Section 19 of Article I of the California Constitution, California Code of Civil Procedure Sections 1240.010 through 1240.050 and Sections 1240.410 through 1240.430, and Government Code Sections 37350, 37350.5, and 40404.
Pursuant to California Government Code Section 1240.030, the power of eminent domain may be exercised to acquire property for a proposed project only if all of the following are established:
1. The public interest and necessity require the project.
2. The project is planned or located in the manner that will be most compatible with the greatest public good and the least private injury.
3. The property sought to be acquired is necessary for the project. Without this property, critical roadway upgrades and future development will be significantly delayed or impaired.
4. The offer required by Government Code Section 7267.2 has been made. On October 17, 2024, the City extended an offer based on the appraised fair market value. The offer was prepared in compliance with applicable laws and standards.
JUSTIFICATION FOR EMINENT DOMAIN
The project is essential to address existing safety concerns, reduce congestion, and support anticipated growth in the area. Improvements to Poplar Court will enable the development of surrounding properties, stimulate local economic growth, and provide long- term benefits to the community.
Staff Report to the Mayor and City Council Members
Resolution of Necessity for a Portion of APN 3064-561-07 January 21, 2025
The property owner s counteroffer exceeds the appraised value by $154,062, which is not supported by the independent appraisal. To ensure a fair and equitable process, the City is legally obligated to rely on the appraised value as the basis for compensation. The eminent domain process ensures that the City can proceed with this critical p roject in a timely manner while providing just compensation to the property owners.
If the Resolution of Necessity is adopted, the City Attorney ’s Office will be instructed to take all steps necessary to commence legal proceedings in a court of competent jurisdiction to acquire a portion of the Property via eminent domain. The City Attorney’s Office will also be directed to seek and obtain an order of prejudgment possession in accordance with the provisions of the eminent domain law so that the City may proceed with the improvements of Poplar Court while the eminent domain proceedings are pending in the court. This ensures that improvements to Poplar Court proceed without delay due to legal disputes, although the property owners retain the right to challenge the offered compensation.
CITY GOAL SUPPORTED BY THIS ITEM
Capital Improvement: Continually evaluate capital improvement priorities.
FISCAL IMPACT
Should the City Council approve the Resolution of Necessity, a budget amendment will be included in the Mid-Year review, presented during the second meeting of February 2025.
ATTACHMENTS
1. Resolution of Necessity for a Portion of APN 3064-561-07
2. Legal Description and Plat Map for Permanent Easement and Temporary Construction Easement
RESOLUTION NO. 2025-01
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HESPERIA,
CALIFORNIA, AUTHORIZING THE ACQUISITION OF A PORTION OF THE PROPERTY IDENTIFIED AS ASSESSOR PARCEL NO. 3064 -561-07 BY
EMINENT DOMAIN
WHEREAS, the City of Hesperia (“City”) has determined that the public interest and necessity require the improvement of Poplar Court to address safety concerns, reduce congestion, and support future industrial and commercial development; and WHEREAS, the property identified as Assessor Parcel No. 3064 -561-07 (“Property”), located at the southeast corner of Poplar Court and Highway 395, is vacant and unimproved, and the City seeks to acquire a 22,682 square foot portion of the Property for a permanent easement and a 31,519 square foot potion of the Property for a temporary construction easement in order to improve Poplar Court and support future development; and WHEREAS, the City has complied with all statutory requirements for the acquisition of a portion of the Property by eminent domain, including (1) obtaining an independent appraisal for the fair market value of the portion of the Property to be obtained; (2) making a written offer to purchase a portion of the Property at its appraised value of $69,611.85 in accordance with Government Code Section 7267.2; and (3) providing written notice to the property owners, Jane Hsieh and Debby Hsieh, of the City Council’s intent to consider the adoption of this Resolution of Necessity at least fifteen days prior to the scheduled hearing; and WHEREAS, the property owners submitted a counteroffer significantly exceeding the appraised value, which the City is unable to accept under California eminent domain law requiring just compensation to align with the appraised fair market value; and WHEREAS, the City Council conducted a public hearing on January 21, 2025, to consider the adoption of this Resolution of Necessity and has provided the property owners the opportunity to be heard on the issues required by law include: (1) whether the public interest and necessity require the Poplar Court improvement project; (2) whether the Poplar Court improvement project is planned or located in a manner that will provide the greatest public good with the least private injury; (3) whether the acquisition of a portion of the Property is necessary for the Poplar Court improvement project; and (4) whether the City’s offer to acquire a portion of the Property complied with Government Code Section 7267.2; and
WHEREAS, the City Council finds as follows: (1) the public interest and necessity require the improvement of Poplar Court to enhance safety, reduce congestion, and support future development consistent with regional planning initiatives and City infrastructure goals; (2) the project is planned and located in a manner that will provide the greatest public good with the least private injury; (3) the acquisition of a portion of the Property is necessary for the project, as the improvements cannot proceed without the required portion of the Property; and (4) the City has made the offer required by Government Code Section 7267.2, and the offer was prepared in compliance with applicable laws and standards; and
WHEREAS, the City Council has determined that it is in the public interest to authorize the commencement of eminent domain proceedings to acquire a portion of the Property; and
2 NOW THEREFORE, BE IT RESOLVED, that the Hesperia Housing Authority and the City Council hereby does find, determine, and declare based upon evidence presented to it as follows:
Section 1. The s taff report presented regarding this matter at the January 21, 2025 , hearing is incorporated herein by this reference. The facts referenced in this Resolution and the staff report, and specifically the recitals above, are found to be true and are incorporated herein by this reference. The findings made by the City Council herein are supported by substantial evidence contained in the record of this proceeding.
Section 2. The Ci
ty Council hereby finds and determines that the public interest and necessity require the improvement of Poplar Court, and the acquisition of a portion of the Property is necessary to accomplish that purpose.
Section 3. The C i ty Council hereby authorizes the acquisition of a portion of the Property, as more particularly described in the attached Legal Description and Plat Map, by eminent domain.
Section 4. The Ci ty Attorney’s Office is hereby directed to take all necessary steps to commence and prosecute eminent domain proceedings to acquire a portion of the Property and to seek and obtain an order for prejudgment possession in accordance with applicable law.
Section 5. This Resolution shall take effect immediately upon its adoption by the City Council.
PASSED, APPROVED and ADOPTED a t a regular meeting of the City Council of the City of Hesperia this 21st day of, January 2025.
ATTEST:
________________________________
Allison Lee, Mayor
____________________________
Erin Baum, Assistant City Clerk
3 STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss.
CITY OF HESPERIA )
I, MELINDA SAYRE, City Clerk of the City of Hesperia, California, do hereby certify that Resolution No. _________________________ was adopted by the City Council of the City of Hesperia at a regular meeting held on the __ day of _____, 2025, and that the same was adopted by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
___________________________________
MELINDA SAYRE
CITY CLERK
4
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POPLAR CT.
HIGHWAY 395
City of Hesperia
STAFF R EP ORT
DATE: January 21, 2025
TO: Mayor and Council Members
FROM: Rachel Molina, City Manager
BY: Melinda Sayre, Deputy City Manager/ City Clerk
Erin Baum, Assistant City Clerk
SUBJECT: Consideration of Ad-Hoc Committee for the Recreation and Parks District
RECOMMENDED ACTION
It is recommended that the City Council Provide staff direction regarding the establishment of an ad-hoc Committee consisting of two City Council Members focused on areas of mutual interest with the Hesperia Recreation and Park District (HRPD) as requested by Mayor Pro Tem Gregg at the December 17, 2024 Council Meeting.
ISSUES/ANALYSIS
An ad -hoc committee is formed to address a specific issue and dissolved once its task is complete. An example would be the formation of a previous ad-hoc committee with HRPD to negotiate the land tr ansfer for Maple Park . The ad-hoc committee would gather and re view relevant information and then presen t their findings to the Council so that they may make an informed decision on the subject matter.
CITY GOAL SUPPORTED BY THIS ITEM
Future Development – Facilitate balanced growth to ensure cohesive community development and pursue economic development.
FISCAL IMPACT
There is no fiscal impact associated with approval of the recommended action.
ALTERNATIVE(S)
1. Provide alternate direction to staff.
ATTACHMENT(S)
None