Agenda packet — Orange City Council, March 11, 2025 (part 3 of 3)

H. Fund Equity
In the fund financi
al statements, government funds report the following fund balance classification:

Nonspendable includes amounts that cannot be spent because they are either (a) not in spendable form or (b) le gally or contractually required to be maintained intact. The Air Pollution Reduction Fund did not have a non
spendable fund balance as of June 30, 2024.

Restricted includes amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation.

Committed includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest authority, the City Council. The formal action that is required to be taken to establish, modify or rescind a fund balance commitment is a resolution. The AQMD did not have any committed fund balance as of June 30, 2024.

Assigned includes amounts that are constrained by the government’s intent to be used for specific purposes but are neither restricted nor committed. The AQMD did not have any assigned fund balance as of June 30, 2024.

Unassigned includes the residual amounts that have not been restricted, committed or assigned to specific purposes. The AQMD did not have any unassigned fund balance as of June 30, 2024.

I. Estima
tes
The prepa
ration of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources at the reporting date.

Accordingly, actual results could differ from those estimates. 12 581

CITY OF ORANGE, CALIFORNIA

AIR POLLUTION REDUCTION FUND
Notes to the Financial Statements
For the Year Ended June 30, 2024

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

J. Capital Assets

Capital assets (including infrastructure) are recorded at cost where historical records are available and at an estimated original cost where no historical records exist. Contributed capital assets are valued at their acquisition value at the date of contribution. Generally, capital asset purchases in excess of $10,000 are capitalized if they have an expected useful life of two years or more.

Capital assets include additions to public domain (infrastructure), certain improvements including pavement, curb and gutter, sidewalks, traffic control devices, streetlights, sewers, storm drains, bridges, right-to-use leased assets and right-of-way within the City.

Capital assets used in operations are depreciated/amortized over their estimated useful lives using the straight-line method in the Government-wide Financial Statements and in the Fund Financial Statements of the Enterprise Funds. Depreciation/amortization is charged as an expense against operations and accumulated depreciation is reported on the respective balance sheets. The lives used for depreciation/amortization purposes for each capital asset class are:

Structures and improvements 20-50 years
Infrastructure 30-65 years
Wells, reservoirs and tanks 40 years
Reservoirs and tanks 60 years
Water lines/pipelines 60 years
Pumps & booster pumps 60 years
Vehicles and other equipment 2-25 years

NOTE 3: CASH AND INVESTMENTS

A. Equity in the Cash and Investment Pool of the City of Orange

The AQMD has no separate bank accounts or investments other than its equity in the cash and investment pool managed by the City. The AQMD 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 AQMD has not adopted an investment policy separate from that of the City. The fair value of the AQMD’s investment in this pool is reported in the accompanying financial statements at amounts based upon the AQMD’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 at the estimated fair value.

B. Disclosures Relating to the Investment Policy, Interest Rate Risk, Credit Risk and Custodial Credit Risk

Additional disclosures related to the investment policy, interest rate risk, credit risk and custodial credit risk are available in the City of Orange’s Annual Comprehensive Financial Report.

C. Fair Value Measurements

The AQMD categorizes its fair value measurement within the fair value hierarchy established by accounting principles generally accepted in the United States of America. The hierarchy is based on the relative inputs used to measure the fair value of the investments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The AQMD’s investment in the City investment pool is not subject to the fair value hierarchy. 13 582

CITY OF ORANGE, CALIFORNIA

AIR POLLUTION REDUCTION FUND
Notes to the Financial Statements
For the Year Ended June 30, 2024

NOTE 4: CAPITAL ASSETS

Capital asset activity for the year ended June 30, 2024 was as follows:

Depreciation for the current year is broken down as follows:

NOTE 5: RETIREMENT PLAN

A. Plan Description, Benefits Provided and Employees Covered

The City contributes to the California Public Employees’ Retirement System (CalPERS), an agent multiple-employer public employee defined benefit pension plan (the Plan). CalPERS provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and their beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provision and all other requirements are established by state statute and memoranda of understanding with employee bargaining units. A full description of the pension plan regarding the number of employees covered, benefit provisions, assumptions (for funding, but no accounting purposes) and membership information is listed in the CalPERS June 30, 2022. Valuation Report. Details on the benefits provided can be obtained in Appendix B of the Actuarial Valuation Report. This report and CalPERS’s audited financial statements are publicly available reports that can be obtained at the CalPERS’s website under Employers. Also, for accounting purposes, the GASB 68 Accounting Valuation Report is available for the City of Orange Miscellaneous Plan as of the measurement date June 30, 2023. This report is available from the City.

The plan provides benefits for two membership classifications, Miscellaneous and Safety, and those benefits are tiered based upon the date of CalPERS membership. Safety membership is extended to those in active law enforcement and fire suppression, while all others are classified as Miscellaneous members. Assembly Bill (AB) 340, also known as the Public Employees’ Pension Reform Act (PEPRA), created new benefit formulas and a final compensation period, as well as new contribution requirements for new employees. For the purpose of PEPRA, “new employees” are those hired on or after January 1, 2013 and had never been a member of CalPERS previously.

CalPERS refers to members prior to January 1, 2013 as classic members.

City employees involved with the AQMD program are covered under the City’s Miscellaneous Plan. As such, related pension balances and activities have been allocated proportionately to the AQMD in relation to salaries paid. During the fiscal year ended June 30, 2024, the City stopped allocating salaries to the AQMD program and no longer recognizes the OPEB plans deferred outflows, deferred inflows, and net pension liability.

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

Capital assets, being depreciated
Vehicles 117,566$ 84,218$ -$ -$ 201,784$ Total capital assets, being depreciated 117,566 84,218 - - 201,784 Less accumulated depreciation
Vehicles - 36,627 - - 36,627 Total accumulated depreciation - 36,627 - - 36,627 Total capital assets, being depreciated, net 117,566 47,591 - - 165,157 Total governmental activities capital assets 117,566$ 47,591$ -$ -$ 165,157$ General government 36,627$
Total depreciation expense 36,627$
14 583

CITY OF ORANGE, CALIFORNIA

AIR POLLUTION REDUCTION FUND
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 6: OTHER POST EMPLOYMENT BENEFITS (OPEB)
A.

Plan Description, Benefits Provided
The City adm
inisters an agent multiple-employer defined benefit post-employment healthcare plan for eligible City retirees and their dependents through California Public Employees’ Retirement System (CalPERS). Retirees from the City enrolled in the Public Employees Medical and Hospital Insurance Program (PEMHCA), is an agent multiple-employer postemployment benefits plan through CalPERS, are eligible for these benefits.

These health insurance benefits are authorized through City resolution/memoranda’s of understanding defining health care benefits and contribution levels and through the contractual agreement between the City and CalPERS.

The City currently contributes $158 per month for each retiree and the retiree is responsible for the balance of the premium amount.

City employees involved with the AQMD program are covered under the City’s OPEB plan as such, related OPEB balances and activities have been allocated proportionately to the AQMD in relation to salaries paid. During the fiscal year ended June 30, 2024, the City stopped allocating salaries to the AQMD program and no longer recognizes the OPEB plans deferred outflows, deferred inflows, and total OPEB liability.

NOTE 7: AVAILABILITY OF OTHER INFORMATION
Copies of separate progress reports filed with the SCAQMD Board of Directors, which detail the accomplishments during the fiscal year ended June 30, 2024, are available at the Orange City Hall.

NOTE 8: SUBSEQUENT EVENTS
In preparing these financial statements, the City has evaluated events and transactions for potential recognition or disclosure through February 12, 2025, the date the financial statements were available to be issued. 15 584
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)

REVENUES
Intergovernmental 182,000$ 182,000 $ 186,188 $ 4,188$ Use of money and property 478 478 8,675 8,197 Total revenues 182,478 182,478 194,863 12,385

EXPENDITURES
Current:

General government 64,380 64,380 60,918 3,462 Public safety 10,000 10,000 9,288 712 Capital outlay 86,000 178,860 84,217 94,643 Total expenditures 160,380 253,240 154,423 98,817 Net change in fund balance 22,098$ (70,762)$ 40,440 111,202$ Fund balance-beginning 165,956
Fund balance-ending 206,396$

CITY OF ORANGE, CALIFORNIA

AIR POLLUTION REDUCTION FUND
Budgetary Comparison Schedule
For the Year Ended June 30, 2024
16 585

CITY OF ORANGE, CALIFORNIA

AIR POLLUTION REDUCTION FUND
Note to Required Supplementary Information
For the Year Ended June 30, 2024
NOTE 1: BUDGETARY ACCOUNTING
The budget for the Air Pollution Reduction Special Revenue Fund is formally adopted annually and is prepared in accordance with accounting principles generally accepted in the United States of America. The budget is monitored to ensure compliance with legal provisions embodied in the appropriated budget as approved or amended by the City Council throughout the year. Department heads are responsible for monitoring their department’s appropriated budget. The legal level of budgetary control is at the fund level. The City’s management may transfer resources between operating line items within a department in the same fund as they see appropriate. Encumbrances (e.g., purchase orders, contracts) outstanding at year-end are reported as restriction of fund balance since they do not constitute expenditures or liabilities.
17 586

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over the Fund’s financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Fund’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including the requirements of California Assembly Bill 2766, Chapter 1705 (44220 through 44247), noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

LSLCPAS.COM
587
To the Honorable Mayor and Members of the City Council
City of Orange, California
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Fund’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Fund’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Irvine, California
February 12, 2025
19 588

LSLCPAS.COM

INDEPENDE
NT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Orange, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Orange, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated March 3, 2025 Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statemen ts, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatem ent of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal co ntrol that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

Report on Compliance and Other Matters
As part of obtaining reasonable assur ance about whether City’s financial st atements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a di rect and material effect on the financial statements.

However, providing an opinion on compliance with thos e provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 589
To the Hon
orable Mayor and Members of the City Council
City of Orange, California
Purpose of This Report
The p
urpose of this report is solely to describe the sc ope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Irvine, California
March 3, 2025
590

LSLCPAS.COM

INDEPENDE
NT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over the Fund’s financial reporting (internal control) as a basis fo r designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatem ent of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal co ntrol that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

To the Honorable Mayor and Members of the City Council
City of Orange, California

Purpose of This Report

The purpose of this report is solely to describe the sc ope of our testing of internal control and compliance and the results of that testing, and not to pr ovide an opinion on the effectiveness of t he Successor’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Successor’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Irvine, California
March 3, 2025
592
&,7<2)25$1*(+286,1*68&&(6625
25$1*(&$/,)251,$
)257+(<($5(1'('-81(4 ),1$1&,$/67$7(0(176 593

CITY OF ORANGE HOUSING SUCCESSOR

ORANGE, CALIFORNIA

Financial Statements

For the Year Ended June 30, 2024

PREPARED BY: FINANCE DEPARTMENT
594

CITY OF ORANGE HOUSING SUCCESSOR

ORANGE, CALIFORNIA
Financial Statements
For the Year Ended June 30, 2024
Table of Contents
Page

Number

INDEPENDE
NT AUDITORS’ REPORT
Financial Audit ..................................................................................................................................................... 1 Compliance Audit ................................................................................................................................................ 4

BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:

Statement of Net Position .................................................................................................................................. 6 Statement of Activities ......................................................................................................................................... 7 Fund Financial Statements:

Balance Sheet – Governmental Funds ............................................................................................................. 8 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position........................................................................................................................ 9 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Fund ......................................................................................................................... 10 Reconciliation of the Statement of Revenues, Expenses and Changes in Fund Balances of Governmental Funds to the Statement of Activities .......................................................... 11 Notes to the Financial Statements .................................................................................................................... 12

REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual .............................................................................................................................................. 17 Notes to the Required Supplementary Information ........................................................................................... 18

OTHER SUPPLEMENTARY INFORMATION
Computation of Low and Moderate Income Housing Funds Excess/Surplus ................................................... 19 595

LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
City of Orange, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, and the major fund of the Housing Successor special revenue fund (the “Fund”) of the City of Orange, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the 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 financial position of the Fund of the City, as of June 30, 2024, and the changes in its financ ial 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 and the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States. Our responsibilitie s under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical respon sibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter
As discussed in Note 1, the financial statements present on ly the Fund and do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2024, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance wit h accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

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.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted au diting standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
1 596
To the Honorable Mayor and Members of the City Council
City of Orange, California
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
x Exercise professional judgment and maintain pr ofessional skepticism throughout the audit. x Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures respon sive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. x Evaluate the appropriateness of accounting policies us ed and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

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 princ
iples generally accepted in the United States of America requ ire that the budgetary comparison information, as listed on the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or his torical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the informat ion 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.

Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial st atements, is required by t he 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. Our opinion on the basic financial statements is not affected by this missing information.

Supplementary Information
Our audit was conducted for the purpose
of forming opinions on the financial statements that collectively comprise the Fund’s basic financial statements. The accompanying Computation of Excess/Surplus is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and r elates directly to the underlying accounting and other records used to prepare the basic financial statemen ts. The information has been subjected to the auditing procedures applied in the audit of the basic financial st atements and certain additio nal procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards g enerally accepted in the United States of America. In our opinion, the Computation of Excess/Surplus is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
2 597
To the Honorable Mayor and Members of the City Council
City of Orange, California
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 3,2025, on our consideration of the City’s internal control over the Fund’s financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and gr ant 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 pr ovide an opinion on the effectiveness of the City ’s internal control over the Fund’s financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City ’s internal control over the Fund’s financial reporting and compliance.

Irvine, California
March 3, 2025
3 598

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE

AND ON INTERNAL CONTROL OVER COMPLIANCE
To the Honorable Mayor and Members of the City Council
City of Orange, California
Report on Compliance
Opinion
We have audited the City of Orange, California (the “City”)’s compliance with the types of compliance requirements identified as subject to audit in the California Health and Safety Code sections applicable to the California Housing Successor Agencies (the “HSC”) that could have a direct and material effect on the City’s Low-Moderate Income Housing Program (the “Program”) for the year ended June 30, 2024.

In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on the Program for the year ended June 30, 2024.

Basis for Opinion
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of the HSC. Our responsibilities under those standards and the HSC are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with 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 opinion on compliance for the Program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the Program.

Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the HSC will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of the Program as a whole.

LSLCPAS.COM
4 599
To the Honorable Mayor and Members of the City Council
City of Orange, California
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the HSC, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x Identify and assess the risks of material noncompliance, 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 City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. x Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and repo rt on internal control over compliance in accordance with the HSC, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of the Program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of the Program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of the Program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the HSC. Accordingly, this report is not suitable for any other purpose.

Irvine, California
March 3, 2025
5 600

CITY OF ORANGE, CALIFORNIA
Housing Successor
Statement of Net Position
Governmental
Activities
ASSETS
Cash and investments 946,831$
Receivables (net of uncollectibles):

Accounts 2,501
Accrued i
nterest 7,269
N
otes and loans 28,921,145
Total assets 29,877,746

DEFERRED OUTFLOWS OF RESOURCES
Pension-related 113,891
OPEB-related 26,122
Total deferred outflows of resources 140,013

LIABILITIES
Accounts payable 11,906
Noncurrent liabilities:

Due in more than one year:

Net pension liability 89,913
Net OPEB liability 117,182
Total liabilities 219,001

DEFERRED INFLOWS OF RESOURCES
Pension-related 3,642
OPEB-related 53,885
Total deferred inflows of resources 57,527

NET POSITION
Restricted for housing 29,741,231
Total net position 29,741,231$
June 30, 2024
See accompanying notes to the financial statements.
6 601

CITY OF ORANGE, CALIFORNIA

HOUSING SUCCESSOR
Statement of Activities
For the Year Ended June 30, 2024
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Functions/Programs:

Primary government:

Governmental activities:

General government 56,553$ -$ -$ -$ (56,553)$ Community development 228,286 - - - (228,286) Economic development 37,884 - - - (37,884) Total governmental activities 322,723$ -$ -$ -$ (322,723)$ General revenues:

General revenues:

Use of money and property 242,751
Other 12,531,973
Total general revenues 12,774,724
Change in net position 12,452,001
Net position-beginning 17,289,230
Net position-ending 29,741,231$
Program Revenues
Net (Expenses)
Revenues and
Changes in Net
Position
See accompanying notes to the financial statements.
7 602

CITY OF ORANGE, CALIFORNIA

HOUSING SUCCESSOR
Balance Sheet
Governmental Fund
June 30, 2024
ASSETS
Cash and investments 946,831$
Receivables (net of allowance for uncollectible):

Accounts 2,501
Accrued interest 7,269
Notes and loans 28,921,145
Total assets 29,877,746$

LIABILITIES
Accounts payable 11,906$
Total liabilities 11,906

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 1,250,000
Total deferred inflows of resources 1,250,000

FUND BALANCE
Restricted for housing 28,615,840
Total fund balance 28,615,840
Total liabilities, deferred inflows of resources,
and fund balance 29,877,746$
See accompanying notes to financial statements.
8 603

HOUSING SUCCESSOR
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2024
Amounts reported for governmental activities in the Statement of Net Position are different because:

Total fund balances - governmental funds 28,615,840$
Deferred outflows-pension related 113,891
Deferred outflows-OPEB related 26,122
Deferred inflows-pension related (3,642)
Deferred inflows-OPEB related (53,885)
Total deferred outflows and inflows related to postretirement benefits 82,486 Long-term receivables 1,250,000
Total other long-term assets 1,250,000
Net pension liability (89,913)
Net OPEB liability (117,182)
Total long-term liabilities (207,095)
Net position of governmental activities 29,741,231$
Long-term liabilities that are not due and payable in the current period, and therefore, are not reported in the funds.

CITY OF ORANGE, CALIFORNIA
Differences between expected and actual experiences, assumption changes and net differences between projected and actual earnings, and contributions subsequent to the measurement date for the postretirement ben efits (pension and OPEB) are recognized as deferred outflows of resources and deferred inflows of resources on the Statement of Net Position.

Other long-term assets that are not available to pay for current period expenditures and, therefore, are either labeled unavailable or not reported in the funds.

See accompanying notes to the financial statements.
9 604

CITY OF ORANGE, CALIFORNIA

HOUSING SUCCESSOR
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Fund
For the Year Ended June 30, 2024

REVENUES
Use of money and property 242,751$
Miscellaneous 12,531,973
Total revenues 12,774,724

EXPENDITURES
Current:

General government 27,178
Community development 151,415
Economic development 30,051
Total expenditures 208,644
Net change in fund balances 12,566,080
Fund balance-beginning 16,049,760
Fund balance-ending 28,615,840$
See accompanying notes to financial statements.
10 605

HOUSING SUCCESSOR
Reconciliation of the Statement of Revenues, Expenses and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2024
Amounts reported for governmental activities in the Statement of Activities are different because:

Net change in fund balances - total governmental funds: 12,566,080$ Changes in pension liabilities and related deferred outflows and inflows of resources 18,938 Changes in OPEB liabilities and related deferred outflows and inflows of resources (133,017) Total adjustment (114,079)
Change in net position of governmental activities 12,452,001$ Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds.

CITY OF ORANGE, CALIFORNIA
See accompanying notes to the financial statements.
11 606

CITY OF ORANGE HOUSING SUCCESSOR
Notes to Financial Statements
For the Year Ended June 30, 2024
NO
TE 1: SIGNIFICANT ACCOUNTING POLICIES
A.

Financial Reporting Entity
The Orang
e Successor Housing Agency (Housing Successor) was established on February 1, 2012, pursuant to the dissolution of the former Redevelopment Agency. Prior to that, the activities were accounted for in the Redevelopment Agency Housing Fund. The City Council became the governing board of the Housing Successor.

The Housing Successor was formed for purposes of construction and management of quality affordable housing within the City.

The Housing Successor is controlled by the City of Orange (City) and, accordingly, the accompanying fund financial statements are included as a special revenue fund of the basic financial statements prepared by the City.

The accompanying financial statements are intended to reflect the financial position of operations for the Housing Successor Fund only and do not purport to, and do not, present the financial position of the City of Orange, California. Separate financial statements are prepared for the City of Orange, and may be obtained from the City.

Basis of Presentation
The
Housing Successor’s financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the fund. The Housing Successor has no fiduciary activities.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are offset by program revenues. Direc t expenses are those that are clearl y identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

While separate government-wide and fund financial statements are presented, they are interrelated.

Measurement Focus, Basis of Accounting and Financial Statement Presentation The g
overnment-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under the economic resources measurement focus, all (both current and long term) economic resources and obligations are included in the accompanying Statement of Net Position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the current financial resources measurement focus, only current assets and liabilities are generally included on the balance sheet. Under the modified accrual basis of accounting, revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Housing Successor considers revenues relating to grants to be available if they are collected within 120 days of the end of the current fiscal period, and within 60 days for all other revenues.

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

Use of money and property is considered to be measurable and available only when cash is received by the government.
12 607

CITY OF ORANGE HOUSING SUCCESSOR
Notes to Financial Statements
For the Year Ended June 30, 2024
NO
TE 1: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D.

Assets, Liabilities and Net Position or Equity
Ca
sh and Investments
Investments are reported in the accompanying financial statements at fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Changes in fair value that occur during a fiscal year are recognized as use of money and property for that fiscal year. Use of money and property includes interest earnings, changes in fair value (realized/unrealized), gains or losses realized upon the liquidation, maturity, or sale of investments, and rental income.

Cash and investments are pooled with other City of Orange funds for investment purposes, with interest being allocated monthly to various funds based on each fund’s prior month-end cash and investment balance. Interest income for cash and investments excluded from pooled cash is credited directly to the related funds. Investment policies applicable to all the Housing Successor’s funds are those of the City of Orange and are included in the notes to the City’s basic financial statements.

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 and will not be recognized as an outflow of resources (expense/expenditure) until that time. The Housing Successor has items related to the pension and OPEB plans that qualify for reporting in this category.

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 of inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The Housing Successor has items related to the pension and OPEB plans that qualify for reporting in this category.

Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government-wide financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the Housing Successor’s policy to consider restricted net position to have been depleted before unrestricted net position is applied.

Fund Balance Flow Assumptions
Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the Housing Successor’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.
13 608

CITY OF ORANGE HOUSING SUCCESSOR
Notes to Financial Statements
For the Year Ended June 30, 2024
NO
TE 1: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fund Equity
In the fund financial statements, government funds report the following fund balance classification:

Non-spendable include amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.

Restricted include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation.

Committed include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest authority, the City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution. The Housing Successor did not have any committed fund balance as of June 30, 2024.

Assigned include amounts that are constrained by the government’s intent to be used for specific purposes, but are neither restricted nor committed. The Housing Successor did not have any assigned fund balance as of June 30, 2024.

Unassigned include the residual amounts that have not been restricted, committed, or assigned to specific purposes.

Use of Estimates
The preparation of basic financial statements in conformity with accounting principles generally accepted in the United State
s of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and deferred inflow/outflows of resources at the reporting date and revenue and expenses during the reporting period. Actual results could differ from those estimates.

Loans Receivable
Non
-current portions of long-term receivables due are reported on the Governmental and Government-wide financial statements. For loans that have a forgiveness component and/or repayment term greater than that of conventional loans, an allowance is recorded to more accurately present the net present value of these receivables.

NOTE 2: CASH AND INVESTMENTS
As of Jun
e 30, 2024, cash and investments were reported in the accompanying financial statements as follows:

Equity in City Investment pool $ 946,831
Total cash and investments $ 946,831
A.

Equity in the Cash and Investment Pool of the City of Orange The
Housing Successor has no separate bank accounts or investments other than its equity in the cash and investment pool managed by the City of Orange. The Housing Successor 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 of Orange. The Housing Successor has not adopted an investment policy separate from that of the City of Orange. The fair value of the Housing Successor’s investment in the pool is reported in the accompanying financial statements at amounts based upon the Housing Successor’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 at the estimated fair value. 14 609

CITY OF ORANGE HOUSING SUCCESSOR
Notes to Financial Statements
For the Year Ended June 30, 2024
NOT
E 2: CASH AND INVESTMENTS (CONTINUED)
B.

Disclosures Relating to the Investment Policy, Interest Rate Risk and Custodial Credit Risk Additional di
sclosures related to the investment policy, interest rate risk, credit risk and custodial credit risk are available in the City of Orange’s Annual Comprehensive Financial Report.

Fair Value Measurements
The Ho
using Successor categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the relative inputs used to measure the fair value of the investments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The Housing Successor’s investment in the City investment pool is not subject to the fair value hierarchy.

NOTE 3: NOTES AND LOANS RECEIVABLE
With the dissolution of the Redevelopment Agency effective February 1, 2012, the City Council adopted a resolution authorizing the City of Orange to become the Housing Successor and enabling the City to retain housing assets and functions of the Redevelopment Agency. The Housing Successor provides housing loans for the rehabilitation and expansion of housing for low and moderate-income families in the City. Housing rehabilitation loans are for the purpose of rehabilitation and upgrading existing housing due to structural deficiencies. Housing loans also assist in the construction of new multi-family housing projects or rehabilitation of existing multi-family units. The balance of the loan at June 30, 2024, net of allowance for loan forgiveness, is $28,921,145.

Additionally, the former Redevelopment Agency issued several promissory notes, pursuant to and in implementation of the “Affordable Housing Resale Restrictions Option to Designate Eligible Purchaser with Alternative Option to Purchase and Option to Purchase upon Default.” These notes do not actually represent cash paid to the borrowers, but represent the subsidy constructively received by the borrower as a result of borrowers’ purchase of the property at a price below its fair market value. No repayment of these notes is due by the borrower until the Affordable Term of the loan date (45 years commencing from the loan date), or upon default, as described in the note. As of June 30, 2024, the outstanding amount for these loans was $378,668. Due to the length of the deferral and the uncertainty of prepayment on these loans, an allowance has been recorded for the full amount of the loan receivable.

On December 21, 2022, the City entered into Financing Agreements that provided the Developer of the Villa St. Joseph Affordable Housing Project for the acquisition and development of forty-nine (49) affordable rental housing units for Extremely Low Income, Very Low Income, Low Income Senior Citizen Households, and one (1) manager’s unit located at 480 South Batavia Street in the City of Orange, while maintaining compliance with the affordable housing requirements. The Financing Agreements provided for City Loans from various funds, which included $576,000 from the Housing Successor Fund. The loan balance is $458,696 at June 30, 2024. Due to the length of the deferral and the uncertainty of prepayment on these loans, an allowance has been recorded for the full amount of the loan receivable.

On January 23, 2024, the City entered into a Financing Agreement that provided the Developer of 1800 E. La Veta Avenue in the City of Orange for the development and operation of one hundred sixty-four (164) affordable rental housing units for Extremely Low Income and Lower Income Senior Citizen Households, and two (2) ma
nager’s units. The Financing Agreement provided for a City loan from the Housing Successor Fun d in the amount of $2,200,00

0. The loan balance is $1,980,000 at June 30, 2024. Due to the length of the deferral and the uncertaint
y of prepayment on these loans, an allowance has been recorded for the full amount of the loan receivable.
15 610

CITY OF ORANGE HOUSING SUCCESSOR
Notes to Financial Statements
For the Year Ended June 30, 2024
NO
TE 4: RETIREMENT PLAN
A.

Plan Description, Benefits Provided and Employees Covered The City contributes to the California Pu
blic Employees' Retirement System (CalPERS), an agent multiple-employer public employee defined benefit pension plan (the Plan). CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and their beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and memoranda of understanding with employee bargaining units. A full description of the pension plan regarding number of employees covered, benefit provisions, assumptions (for funding, but not accounting purposes), and membership information are listed in the CalPERS June 30, 2016 Annual Actuarial Valuation Report. Details of the benefits provided can be obtained in Appendix B of the actuarial valuation report. This report and CalPERS’ audited financial statements are publicly available reports that can be obtained at CalPERS’ website under Employers. Additional information can be found in the City’s Comprehensive Annual Financial Report for the Year Ended June 30, 2024.

The Plan provides benefits for two membership classifications, Miscellaneous and Safety, and those benefits are tiered based upon date of CalPERS membership. Safety membership is extended to those in active law enforcement and fire suppression, while all others are classified as Miscellaneous members. Assembly Bill (AB) 340, also known as the Public Employees’ Pension Reform Act (PEPRA), created new benefit formulas and a final compensation period as well as new contribution requirements for new employees. For the purpose of PEPRA, “new employees” are those hired on or after January 1, 2013 and had never been a member of CalPERS previously.

CalPERS refers to members prior to January 1, 2013, as Classic members.

Employees of the City of Orange Housing Successor are covered under the Miscellaneous Plan. Further details of the City of Orange Retirement Plans can be found in the City’s Annual Comprehensive Financial Report for the Year Ended June 30, 2024.

The City allocates a percentage of the GASB 68 net pension liability, deferred outflows, deferred inflows, and required supplementary information to the Housing Successor based on its pro rata share of the actual employer pension cost to the City.

NOTE 5: OTHER POST EMPLOYMENT BENEFITS (OPEB)
The City administers an Agent Multiple-Employer defined benefit post-employment healthcare plan for eligible City retirees and their dependents through the California Public Employees' Retirement System (CalPERS). Retirees from the City enrolled in the Public Employees Medical and Hospital Insurance Program (PEMHCA), a single-employer postemployment benefits plan through CalPERS, are eligible for these benefits. These health insurance benefits are authorized through City Resolutions/Memorandas of Understanding defining health care benefits and contribution levels and through the contractual agreement between the City and CalPERS. The City currently contributes $149 per month for each retiree and the retiree is responsible for the balance of the premium amount.

The City allocates a percentage of the GASB 75 OPEB total liability, deferred outflows and inflows, and required supplementary information to the Housing Successor based on its pro rata share determined by an actuarial valuation annually.

NOTE 6: SUBSEQUENT EVENT
In preparing these financial statements, the Housing Successor has evaluated events and transactions for potential recognition or disclosure through March 3, 2025, the date the financial statements were available to be issued. No events or transactions were identified that required recognition or disclosure. 16 611
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)

REVENUES
Use of money and property 85,341$ 85,341 $ 242,751 $ 157,410$ Miscellaneous - - 12,531,973 12,531,973
Total revenues 85,341 85,341 12,774,724 12,689,383

EXPENDITURES
Current:

General government 27,458 27,458 27,178 280 Community development 52,955 181,660 151,415 30,245 Economic development 32,242 2,808,242 30,051 2,778,191 Total expenditures 112,655 3,017,360 208,644 2,808,716 Net change in fund balance (27,314)$ (2,932,019)$ 12,566,080 15,498,099$ Fund balance-beginning 16,049,760
Fund balance-ending 28,615,840$

CITY OF ORANGE, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual For the Year Ended June 30, 2024
17 612

CITY OF ORANGE HOUSING SUCCESSOR
Notes to Required Supplementary Information
For the Year Ended June 30, 2024
Budg
etary Accounting
Annual budgets are adopted by July 1 of each year on a basis consistent with generally accepted accounting principles for all governmental funds. The budget is monitored to ensure compliance with legal provisions embodied in the appropriated budget as approved or amended by the City Council throughout the year. Department heads are responsible for monitoring their department’s appropriated budget.

Legal level of Control – The legal level of budgetary control is at the department level within each fund. Transfers of appropriations between funds, between departments within a fund, and between capital outlay or debt service and another object group classification within a department, require City Council approval. All other transfers of appropriations can be made with City management approval. 18 613

CITY OF ORANGE HOUSING SUCCESSOR
Computation of Low and Moderate Income Housing Funds
Excess/Surplus
Opening Fund Balance 28,615,840$
Less Unavailable Amounts:

Loans receivable (28,921,145)
(28,921,145)
Available Housing Successor Funds (305,305)
Limitation (greater of $1,000,000 or four years deposits) Aggregate amount deposited for last four years:
2023-2024 12,774,724$
2022-2023 650,408
2021-2022 81,742
2020-2021 1,030,623
Total 14,537,497$
Base Limitation 1,000,000$
Greater amount 14,537,497
Computed Excess/Surplus None A
A. No Excess Surplus was developed for fiscal year ended June 30, 2024. According to HSC 34176.1(d) if a housing successor has an excess surplus, the housing successor sha ll encumber the excess surplus for the purposes as described in 34176.1 paragraph (3) of subdivision (a), or transfer these funds pursuant to 3417 6.1 paragraph (2), within three fiscal years, currently by June 30, 2026. If the housing successor fails to comply within this subdivision, the housing successor, within 90 days of the end of the third fiscal year, shall transfer any excess surplus to the Department of Housing and Community Development for expenditure pursuant to the Mu ltifamily Housing Program or the Joe Serna Jr. Farmworker Housing Grant Program.

Low and Moderate
All Project Area
July 1, 2024
Housing Funds
19 614
Agenda Item
City Council
Item #: 7.2. 3/11/2025 File #: 25-0130
TO: Honorable Mayor and Members of the City Council
FROM: Tom Kisela, City Manager

1. SUBJECT
Budget Risk and Economic Opportunities Advisory Services Presentation.

2. SUMMARY
On February 25, 2025, the Orange City Council requested staff to bring back a presentation from Grant Thornton on a potential fiscal strategic plan. Representatives from Grant Thornton prepared a presentation on what they refer to as Budget Risk and Economic Opportunities Advisory Services.

City staff recommend the City Council receive and file Grant Thornton’spresentation and provide direction.

3. RECOMMENDED ACTION
Receive and file a presentation from Grant Thornton LLP on Budget Risk and Economic Opportunities Advisory Services and provide direction to City staff.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability.

6. DISCUSSION AND BACKGROUND
On February 25, 2025, the Orange City Council discussed three separate studies and analyses that will help promote the City’s future fiscal health, including:

1. The Audit Committee reviewing the City’s past annual budgets and annual comprehensive financial reports.

2. The City conducting a Citywide organizational and operational assessment.

3. The City completing a fiscal strategic plan.

With respect to the fiscal strategic plan, the City previously met with representatives from Grant Thornton which is a licensed certified public accountant firm providing multiple financial services across the United States.

At that meeting, the Grant Thornton representatives suggested the City consider developing a fiscal strategic plan. Pursuant to the City Council’sFebruary 25, 2025 direction, representatives from Grant Thornton developed a presentation on what they refer to as Budget Risk and Economic Opportunities Advisory Services for the City Council’s consideration.

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Item #: 7.2. 3/11/2025 File #: 25-0130
At the conclusion of the presentation, it is recommended the City Council provide direction to City staff on next steps.

7. ATTACHMENTS
· None
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Agenda Item
City Council
Item #: 7.2. 3/11/2025 File #: 25-0130
TO: Honorable Mayor and Members of the City Council
FROM: Tom Kisela, City Manager

1. SUBJECT
Budget Risk and Economic Opportunities Advisory Services Presentation.

City staff recommend the City Council receive and file Grant Thornton’spresentation and provide direction.

3. RECOMMENDED ACTION
Receive and file a presentation from Grant Thornton on Budget Risk and Economic Opportunities Advisory Services and provide direction to City staff.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability.

6. DISCUSSION AND BACKGROUND
On February 25, 2025, the Orange City Council discussed three separate studies and analyses that will help promote the City’s future fiscal health, including:

1. The Audit Committee reviewing the City’s past annual budgets and annual comprehensive financial reports.

2. The City conducting a Citywide organizational and operational assessment.

3. The City completing a fiscal strategic plan.

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Item #: 7.2. 3/11/2025 File #: 25-0130
At the conclusion of the presentation, it is recommended the City Council provide direction to City staff on next steps.

7. ATTACHMENTS
· None
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Agenda Item
City Council
Item #: 8.1. 3/11/2025 File #: 25-0025
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Christopher Cash, Public Works Director

1. SUBJECT
Memorandum of Agreement between the City of Orange and the Mabury Ranch Homeowner’s Association for tree maintenance.

2. SUMMARY
The City of Orange and the Mabury Ranch Homeowner’sAssociation recognize the importance of maintaining trees within the Mabury Ranch community public right of way for the safety, aesthetic, and environmental benefits it provides. Staff is recommending the approval of a memorandum of agreement with MRHOA for tree maintenance at an initial cost of $99,000, and an ongoing tree maintenance cost of $5,000 annually.

3. RECOMMENDED ACTION
Approve the Memorandum of Agreement with Mabury Ranch Homeowner’s Association for tree maintenance at an initial cost of $99,000, and an ongoing tree maintenance cost of $5,000 annually.

4. FISCAL IMPACT
Upon approval of the appropriation, the initial expense for this Memorandum of Agreement for $99,000 will utilize one-time salary savings, with an additional ongoing annual cost of $5,000 to be funded through General Fund.

5. STRATEGIC PLAN GOALS
Goal 5: Improve Infrastructure, Mobility, and Technology Objective 5.9: Identify costs and funding associated with maintaining new amenities

6. DISCUSSION AND BACKGROUND
The Mabury Ranch Homeowner Association (MRHOA) tract was built in 1977, and as part of the development and its Covenants, Conditions, and Restrictions (CC&R) the 227 trees within the public right of way must be maintained by the MRHOA. Since the tract’sinception, the MRHOA has been maintaining these public right of way trees.

The MRHOA is requesting that the City assume maintenance of these 227 trees in consistency with our Orange Municipal Code Chapter 12.2 that identifies maintenance responsibilities for trees within the public right of way. The City’sArborist, as part of the assessment of the MRHOA trees, has completed a risk assessment of all 227 trees. As a result of that assessment, over half of the 227 trees do not adhere to the City’sguidelines and International Society of Arboriculture (ISA) standards.

Many of the trees are too close to walls and do not have proper spacing requirements, resulting in City of Orange Printed on 3/6/2025Page 1 of 3
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Many of the trees are too close to walls and do not have proper spacing requirements, resulting in crossing canopies and insufficient soil volume for proper root growth. Other trees are planted in substandard tree wells that are insufficient for the size of the tree. In addition, these trees have not been pruned to the City guidelines, specifications, and ISA standards. Many of these trees are observed to have structural defects, some of which are severe defects. Further, approximately half of the trees tagged for removal are Eucalyptus trees. These trees are known to typically sustain failure without any signs of defect, which can create a safety hazard. As a result, staff is recommending the following removals for 127 trees and an initial trim for the remaining 100 trees to attempt to correct deficient trimming and to establish a maintenance history for the tree.

Location Canary
Island
Pines
Eucalyptus Elms Crape
Myrtle
Liquid
Amber
Braford
Pears
Total
Removal
Total Initial
Pruning
Cannon St. 22 6 28
Serrano Ave. 62 10 13 72 13
Mt.

Mckindley
Blvd.
22 5 22 5
Yellowstone
Blvd.
21 21 2 21 23
Orange Park
Blvd.
5 22 9 5 31
Taft
Extension
7 7
Total 127 100
The removal cost is estimated at $80,000 for the 127 trees. The remaining 100 trees will require a special trim per the City Arborist’sdirection for an estimated cost of $19,000. Due to the existing landscape and surrounding infrastructure, replanting options are limited, however, staff will endeavor to replace trees where suitable within our existing tree planning program.

By approving this agreement, MRHOA agrees to indemnify the City from all liability arising out of and associated with those trees that used to be maintained by MRHOA as identified in the agreement for a period of two years. In addition, MRHOA will reimburse the City not to exceed $16,000 or the cost of the initial pruning of the 100 trees.

MRHOA has an interest in the replanting of trees in and adjacent to the Mabury Ranch community.

MRHOA will reimburse the City up to $5,000 in 2025 and another additional $5,000 in 2026 for replanting. Any trees planted will remain the maintenance obligation of the City.

7. ATTACHMENTS
· Memorandum of Agreement
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Item #: 8.1. 3/11/2025 File #: 25-0025
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Agenda Item
City Council
Item #: 8.1. 3/11/2025 File #: 25-0025
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Christopher Cash, Public Works Director

1. SUBJECT
Memorandum of Agreement between the City of Orange and the Mabury Ranch Homeowner’s Association for tree maintenance.

5. STRATEGIC PLAN GOALS
Goal 5: Improve Infrastructure, Mobility, and Technology Objective 5.9: Identify costs and funding associated with maintaining new amenities

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trees do not adhere to the City’sguidelines and International Society of Arboriculture (ISA) standards.

Many of the trees are too close to walls and do not have proper spacing requirements, resulting in crossing canopies and insufficient soil volume for proper root growth. Other trees are planted in substandard tree wells that are insufficient for the size of the tree. In addition, these trees have not been pruned to the City guidelines, specifications, and ISA standards. Many of these trees are observed to have structural defects, some of which are severe defects. Further, approximately half of the trees tagged for removal are Eucalyptus trees. These trees are known to typically sustain failure without any signs of defect, which can create a safety hazard. As a result, staff is recommending the following removals for 127 trees and an initial trim for the remaining 100 trees to attempt to correct deficient trimming and to establish a maintenance history for the tree.

Location Canary
Island
Pines
Eucalyptus Elms Crape
Myrtle
Liquid
Amber
Braford
Pears
Total
Removal
Total Initial
Pruning
Cannon St. 22 6 28
Serrano Ave. 62 10 13 72 13
Mt.

MRHOA has an interest in the replanting of trees in and adjacent to the Mabury Ranch community.

MRHOA will reimburse the City up to $5,000 in 2025 and another additional $5,000 in 2026 for replanting. Any trees planted will remain the maintenance obligation of the City.

7. ATTACHMENTS
City of Orange Printed on 3/5/2025Page 2 of 3
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· Memorandum of Agreement
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1 MEMORANDUM OF AGREEMENT (MOA) BETWEEN CITY OF ORANGE AND THE MABURY RANCH HOMEOWNER’S ASSOCIATION
[Tree Maintenance]

This Memorandum of Agreement (hereinafter referred to as "MOA") is entered into on this ____ day of March, 2025 ("Effective Date"), by and between the City of Orange, a California municipal corporation ("City"), and The Mabury Ranch Homeowners Association (“MRHOA”), a homeowners association organized and existing under the laws of California.

WHEREAS, the City and MRHOA recognize the importance of maintaining trees within the Mabury Ranch community for the safety, aesthetic, and environmental benefits it provides;

WHEREAS, the City has in place Ordinance No. 03-18, regarding tree preservation, as well as the Department of Public Works Standard Specifications for Planting, Removal and Maintenance of Street Trees and Shrubs, Orange Municipal Code 12.28.030 (“DPW Tree Specifications”);

WHEREAS, the City has the necessary resources and expertise for the maintenance, including pruning, removal, tree stump removal and replanting, of trees within the MRHOA community;

WHEREAS, the City now accepts responsibility for the tree maintenance of the trees identified in Exhibit A, following the DPW Tree Specifications; and

WHEREAS, this MO A constitutes the entire understanding of the Parties and no representation or agreements, oral or written, made prior to the execution hereof shall vary or modify the terms herein;

NOW, THEREFORE, the City and MRHOA hereby agree as follows:

1. Tree Maintenance Responsibility:

a. The City shall be responsible for the maintenance, including pruning, removal, tree stump removal and replanting, of trees located within the MRHOA community, which trees are identified in the attached Exhibit A, hereby incorporated to this MO A as though fully set forth again herein .

The parties agree that Exhibit “A” serves as a reference for the scope of tree maintenance responsibilities outlined in this MOA and this map supersedes any prior maps or agreements, whether written or oral.

b. Tree maintenance or removal shall be performed under the direction of the City , and in compliance with the DPW Tree Specifications.

c. Upon prior written notice by the City of no less than forty eight (48) hours of maintenance work to be performed, the MRHOA shall use its best efforts to obtain cooperation by its members to permit access to City personnel for the purpose of tree maintenance as required.

d. MHROA shall promptly communicate if concerns about tree safety arise so the City can quickly assess potential risks.

625
2 e. City’s Field Services Manager (“City’s Project Manager”) shall be the person to whom MRHOA will report concerns to.

2. Liability:

a. The City shall not be held liable for any damages or liabilities arising from the trees that MRHOA is responsible for maintaining which are not designated on Exhibit A. However, the City shall remain liable and responsible for all trees for which they have maintenance responsibility.

b. In the event of a claim or liability arising from a City tree as identified in Exhibit A and incorporated by reference herein, MRHOA shall:

i. Notify the City within 60 days of becoming aware of such claim or liability. ii. Provide the City with all relevant information and documentation related to the claim or liability, including but not limited to photographs, incident reports, and witness statements.
iii. Cooperate fully with the City in the investigation and resolution of the claim or liability.

c. MRHOA acknowledges and agrees that it shall maintain adequate liability insurance coverage.

3. Indemnification:

For the first two (2) years from the date of this MOA, MRHOA will include the City, as an Additional Insured and provide Endorsements specifically naming the City on its commercial general insurance for the liability and defense of suits or claims arising out of the maintenance of the trees , as identified in Exhibit A and incorporated by reference herein. MRHOA shall provide the City evidence of insurance including all policies, endorsements and certificates.

Thereafter, the City shall be responsible for the liability and defense of suits arising out of and associated with the maintenance of the trees, as identified in Exhibit A and incorporated by reference herein.

4. Duration:

This MOA shall be effective as of the Effective Date and shall remain in force until both parties provide mutual written notice of termination, with a minimum of 30 days.

5. Cost Sharing:

MRHOA acknowledges and agrees that it shall reimburse the City not to exceed $16,000.00 (SIXTEEN THOUSAND DOLLARS and NO CENTS) for the cost of the initial pruning the trees, as identified in Exhibit A and incorporated by reference herein.

The City acknowledges and agrees that it will be responsible for the costs of the removal and/or maintenance of the trees, as identified in Exhibit A and incorporated herein.

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3 MRHOA has an interest in the replanting of trees as stated in the Recitals above. MRHOA is willing to participate in the replanting of City approved trees, in City selected areas, on Cannon, Serrano Avenue, Mt. McKinley, Yellowstone Blvd., and Orange Park Blvd. ( that are immediately adjacent to the Mabury development), and MRHOA will reimburse the City up to and not to exceed $5,000.00 in 2025 , and MRHOA will reimburse the City up to and not to exceed an additional $5,000.00 in 2026 for such replanting. Any trees planted shall remain the maintenance obligation of the City.

6. Amendments:

This MOA may only be amended in writing executed by both parties.

7. Superseding Clause:

This MOA supersedes any prior agreements, understandings, or representations, ordinances, council meeting agendas, developer correspondence, whether written or oral, between the City and MRHOA relating to tree maintenance and liability within the Mabury Ranch community.

8. Governing Law and Venue:

This Agreement shall be construed in accordance with and governed by the laws of the State of California and parties agree to submit to the jurisdiction of California courts. Venue for any dispute arising under this Agreement shall be in Orange County, California.

9. Integration:

This Agreement constitutes the entire agreement of the parties. No other agreement, oral or written, pertaining to the work to be performed under this Agreement shall be of any force or effect unless it is in writing and signed by both parties. Any work performed which is inconsistent with or in violation of the provisions of this Agreement shall not be compensated.

10. Notice:

Except as otherwise provided herein, all notices required under this Agreement shall be in writing and delivered personally, by e-mail, or by first class mail, postage prepaid, to each party at the address listed below. Either party may change the notice address by notifying the other party in writing. Notices shall be deemed received upon receipt of same or within 3 days of deposit in the U.S. Mail, whichever is earlier. Notices sent by e-mail shall be deemed received on the date of the e-mail transmission.

"THE MABURY RANCH
HOMEOWNER’S ASSOCIATION” “CITY”

Nathan Swanek, President City of Orange
c/o Morgan Bomboy, 300 E. Chapman Avenue
Tritz Professional Management Orange; CA 92866
1525 E. 17th St, Suite “A” Attn: Field Services Manager Santa Ana CA, 92705
Email: [email protected] Email: [email protected] Telephone No.: 714-557-5900 Telephone No.: 714-532-6480 627
4 With a copy to:

Brian D. Moreno, Esq.

BRIAN D. MORENO LAW CORPORATION APC
1100 Town and Country Road, Suite 1250
Orange, CA 92868
[email protected]

11. Counterparts

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures transmitted via facsimile and electronic mail shall have the same effect as original signatures.

IN WITNESS of this Agreement, the parties have entered into this MOA as of the year and day first above written.

“MABURY RANCH “CITY”
HOMEOWNERS ASSOCIATION”
CITY OF ORANGE, a municipal corporation

*By: By:

Nathan Swanek, President Daniel R. Slater, Mayor

ATTEST:

Pamela Coleman, City Clerk

APPROVED AS TO FORM:

Nathalie Adourian,
Senior Assistant City Attorney

√

628

EXHIBIT “A”

SCOPE OF SERVICES AND MAP OF CITY

MAINTAINED TREES

[Beneath this sheet.]

629

SAN RAMON CIR LAVENDER CT

WILDROSE DR

CERRO VILLA DR

BLAIRWOOD LNBLAIRWOOD LN

RUSHMORE ST

NATHAN CIR

MESA DR CANNON STSAN MIGUEL DR

CARVER LNHIDDEN VALLEY CIR

CANYON DR

WISTERIA LNESTATES DRHUNTING CIR

AZALEA DR

CANYON DRLAS FLORES CIR

GOLDENROD LNVILLA ISLE CIRVILLA ISLE DR MESA DR

CANNON ST

KATAWPA CIR

CRESTVIEW CIR

SMOKEY AVE

EVERGLADES CIR

ISLE ROYALE CIR

RIDGEVIEW RD

CRESTVIEW CIR CANYON PARK CIR
CARPENTER CIR BRYCE AVECRATER LAKE AVEMT. McKINLEY BLVD

CRATER LAKE AVECANNON ST

LEATRICE DR

MOUNTAIN AVE MABURY AVELARSON CIR MABURY AVEHILLSIDE AVEMODOC STLAKESIDE AVE

JUANENO AVEBROOKSIDE AVELEXINGTON AVE

YUROK STCHUMASH ST

MODOC STPALA PLSHOSHONE AVE WINDES DR

SERRANO AVE

LAKE MEAD CIR

HIDDEN OAKS LN

WINDES DR

WILLOW WOOD CIR
OAK LN

WATERTON AVE

DRESSAGE STWHITE ALDER CIR

HIGHPOINT RDSYCAMORE GLEN DR

WILLIAMSBURG ST

ZION ST

CARLSBAD ST

LASSEN BLVD

SHENANDOAH AVE

TETON AVE

SYCAMORE CIR

BONITA CT

SAN MARCOS CT

SANTA ISABEL CTBOSCANA CTAPACHE CREEK RDSIERRA VISTA DR

SIERRA VISTA DR

PRESCOTT CT

LAGUNA CT

PALERMO CT

SAN RAFAEL CT

HOLLYOAK RDGABBEYWOOD RD

SPRINGWINDS LN

GOLDENROD LN

EDGEMONT DR

CEDARBROOKS RD

GRANDVIEW RD

TIMBERGROVE RD

GLENBROOK LN

KLAMATH PL

PARKER CIR

GOLDENROD LN

LASSEN BLVDYELLOWSTONE BLVD

MAMMOTH CIR

GLACIER ST

TETON AVE

SERRANO AVE

BRYCE AVE

PLAYANO AVE

STACEY LEE LNSANTIAGO BLVD

GROVEWOOD LN

HIDDEN OAKS LN

VILLANUEVA DR

SERRANO AVE

CREST DE VILLE

APPLEWOOD DR GRANDVIEW RD

TIMBERGROVE RD

SMOKEY AVE ORANGE PARK BLVD

WATERTON AVE

YOSEMITE AVE

JOSHUA TREE AVEBRYCE AVE

SHENANDOAH AVE

FOREST STYELLOWSTONE BLVD

JOSHUA TREE AVEORANGE PARK BLVD

RIVER BIRCH CIRPEPPER WOOD CIRSWEETSHADE CIR

HIGHTREE LN

MOUNTAIN AVE

CREST DE VILLE

PARAGON WAY

FAIRPORT CIR

MONACO PKWY

HORIZON DRHORIZON DRALEXANDRIA ST

CHELSEY

TAFTAVE

SHOSHONE AVE
&
Cannon Street Along
The Front of Block Wall
• 22 Canary Island Pines
(Initial Pruning)
• 6 Eucalyptus
(Initial Pruning)
&
Mt. McKinley Boulevard
• 5 Elms – Median Tree
(Initial Pruning)
• 22 Eucalyptus – Both Sides
Along The Block Walls (Removal)
&
Yellowstone Boulevard
• 21 Elms – Median Tree
(Initial Pruning)
• 2 Liquid Amber – Median Tree
(Initial Pruning)
• 21 Eucalyptus – Both Sides Along
The Block Walls (Removal)
&
Orange Park Boulevard
• 9 Bradford Pears – Median
Tree (Initial Pruning)
• 22 Liquid Amber – Median
Tree (Initial Pruning)
• 5 Eucalyptus – Both Sides
Along The Block Walls (Removal)
&
• Serrano Avenue Between Sidewalk
And Block Wall
• 62 Canary Island Pines (Removal)
• 10 Eucalyptus (Removal)
• 13 Crape Myrtle (Initial Pruning)
&
Taft Extension
• 7 Eucalyptus – North Side
Along The Block Wall (Removal)

MABURY RANCH

TREE MAINTENANCE AGREEMENT
I
February 12th 2025
J:\GisProjects\Maintenance\AlanTruong\Pro\Maybury_Ranch\Maybury_Ranch.aprx\Maybury Ranch HOA Tree 630
Agenda Item
City Council
Item #: 8.2. 3/11/2025 File #: 25-0104
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Trang Nguyen, Finance Director

1. SUBJECT
Review of the proposed Financial Management Policies.

2. SUMMARY
Proposed Financial Management Policies to provide a framework for the annual budget and planning process.

3. RECOMMENDED ACTION
Provide input and direction regarding the proposed Financial Management Policies.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability Objective 2.9: Create a fiscal sustainability plan

6. DISCUSSION AND BACKGROUND
On November 26, 2024, the City Council adopted a Strategic Plan, outlining the Council’sgoals and objectives for the next five years, which included a goal to create a fiscal sustainability plan. As part of this plan, as well as in response to the Fiscal Year 2024-25 (FY 25) operating budget deficit, staff have drafted a set of Financial Management Policies.

While the City has generally practiced many of the guidelines specified in the policies, it had not been formally outlined through a comprehensive document. In an effort to ensure transparency, consistency, and sustainability of the City’sfinances moving forward, staff have compiled the draft Financial Management Policies (FMPs). These policies provide a framework for the annual budget and planning process, which include guardrails to ensure the financial decisions being proposed will support and maintain fiscal responsibility, accountability, and sustainability into the future. The purpose of the controls outlined in the policy areis to establish consistent and sound financial decision-making that will carry forward year to year. These policies will also provide the public a comprehensive document that will serve as the roadmap for the annual budgetary process and a guideline for meeting fund balance reserves. The FMPs cover key elements of the City’sfinances City of Orange Printed on 3/6/2025Page 1 of 3
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Item #: 8.2. 3/11/2025 File #: 25-0104
including the following:
· Budget Development
o General Fund Budget
o Capital Projects Fund Budget
· Fund Balance
· Reserves
· Budgetary Controls and Accounting Methodology
· Pension, Investment and Debt
Also included in the FMP’s are important definitions, principles, and changes that include:
· Structurally balanced budget
o Recurring expenditure should not be more than recurring revenue o One-time revenue is not used for recurring expenditure · Definition of reserves, components of fund balance, and reporting of fund balance o Non-spendable - amounts that are not in a spendable form such as inventory. o Restricted - amounts constrained to specific purposes by their providers such as grantors and higher levels of government.
o Assigned - amounts identified by the City Council for a specific purpose. o Committed - amounts that have been spent for specific purposes determined by the government’s highest level of decision-making authority. o Unassigned - amounts that are not classified as non-spendable, restricted, assigned, and committed.
· Changes to the reserve policy
o General Fund - going from 16.6% back to 25% of the General Fund expenditure, excluding transfers.
o Internal Service Funds - various levels depending on the fund. ( sSee attachment A for more details).
o Capital Projects Fund - going from 5-year annual average CIP or 50% of the single highest year to an equivalent of 1-year pavement management. · Separating the reserve policy from pension policy
Following the meeting, input and direction from the City Council will be included in the FMPs; and the final document will be finalized and shared with the Audit and Investment Committees. Once reviewed, the FMPs will be brought back to the City Council for adoption at a future meeting. The City of Orange Printed on 3/6/2025Page 2 of 3
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632
Item #: 8.2. 3/11/2025 File #: 25-0104
FMPs will be reviewed annually during budget adoption.

7. ATTACHMENTS
· City of Orange Financial Management Policies
City of Orange Printed on 3/6/2025Page 3 of 3
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633
Agenda Item
City Council
Item #: 8.2. 3/11/2025 File #: 25-0104
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Trang Nguyen, Finance Director

1. SUBJECT
Review of the proposed Financial Management Policies

2. SUMMARY
Proposed Financial Management Policies to provide a framework for the annual budget and planning process.

3. RECOMMENDED ACTION
Provide input and direction regarding the proposed Financial Management Policies.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability Objective 2.9: Create a fiscal sustainability plan

While the City has generally practiced many of the guidelines specified in the policies, it had not been formally outlined through a comprehensive document. In an effort to ensure transparency, consistency, and sustainability of the City’sfinances moving forward, staff have compiled the draft Financial Management Policies (FMPs). These policies provide a framework for the annual budget and planning process, which include guardrails to ensure the financial decisions being proposed will support and maintain fiscal responsibility, accountability, and sustainability into the future. The purpose of the controls outlined in the policy areis to establish consistent and sound financial decision-making that will carry forward year to year. These policies will also provide the public a comprehensive document that will serve as the roadmap for the annual budgetary process and a guideline for meeting fund balance reserves. The FMPs cover key elements of the City’sfinances City of Orange Printed on 3/5/2025Page 1 of 3
powered by Legistar™
634
Item #: 8.2. 3/11/2025 File #: 25-0104
including the following:
· Budget Development
o General Fund Budget
o Capital Projects Fund Budget
· Fund Balance
· Reserves
· Budgetary Controls and Accounting Methodology
· Pension, Investment and Debt
Also included in the FMP’s are important definitions, principles, and changes that include:
· Structurally balanced budget
o Recurring expenditure should not be more than recurring revenue o One-time revenue is not used for recurring expenditure · Definition of reserves, components of fund balance, and reporting of fund balance o Non-spendable - amounts that are not in a spendable form such as inventory. o Restricted - amounts constrained to specific purposes by their providers such as grantors and higher levels of government.
o Assigned - amounts identified by the City Council for a specific purpose. o Committed - amounts that have been spent for specific purposes determined by the government’s highest level of decision-making authority. o Unassigned - amounts that are not classified as non-spendable, restricted, assigned, and committed.
· Changes to the reserve policy
o General Fund - going from 16.6% back to 25% of the General Fund expenditure, excluding transfers.
o Internal Service Funds - various levels depending on the fund. ( sSee attachment A for more details).
o Capital Projects Fund - going from 5-year annual average CIP or 50% of the single highest year to an equivalent of 1-year pavement management. · Separating the reserve policy from pension policy
Following the meeting, input and direction from the City Council will be included in the FMPs; and the final document will be finalized and shared with the Audit and Investment Committees. Once reviewed, the FMPs will be brought back to the City Council for adoption at a future meeting. The City of Orange Printed on 3/5/2025Page 2 of 3
powered by Legistar™
635
Item #: 8.2. 3/11/2025 File #: 25-0104
FMPs will be reviewed annually during budget adoption.

7. ATTACHMENTS
· City of Orange Financial Management Policies
City of Orange Printed on 3/5/2025Page 3 of 3
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CITY OF ORANGE

FINANCIAL MANAGEMENT POLICIES

I. Purpose and Objectives
The City’s Financial Management Policies (FMPs) purpose and objective is ensuring its long-term fiscal stability and establishing controls for sound decision making, for the present and future.

This set of policies is intended to provide a framework to manage the City’s finances in a manner that will support a high level of public safety; maintain the quality of life; and provide excellent service for our residents and business community while maintaining a balanced budget with a healthy reserve to meet known and unknown future obligations.

These FMPs are essential to the fiscal health and contingency plans of the City. They will be reviewed annually during the budget process and, if necessary, recommended changes will be presented to the City Council for consideration at budget adoption.

II. Fiscal Sustainability
The City is committed to fiscal sustainability through its management of expenditures and stewardship of revenue growth through economic development and exploration of other revenue enhancing opportunities.

The City is also committed to maintaining a long -term view of financial planning that anticipates and proactively mitigate risks to preserve public safety, maintain the quality of life of the community, and provide excellence services to residents and businesses as identified and prioritized through community input.

Fiscal sustainability will be accomplished by these guiding principles:
a. Informed decision-making. City staff will identify and evaluate immediate and long-term economic, social, and environmental impacts of challenges, and present them to the City Council for discussion and consideration.
b. Transparency. The City will conduct all business with transparency, pursuant to applicable laws and regulations. The City will continue to improve transparency and make financial information available in an understandable format for the community. c. Managing long -term liabilities . The City will continue to monitor long -term financial liabilities, including unfunded pension obligations, and commits to taking actions to manage these obligations and ensure transparency to the public.

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d. Shared responsibility. The City recognizes a shared responsibility between the employee and employer. The City is committed to appropriately fund employee compensation to attract and retain employees while maintaining a long -term sustainable and balanced budget.
e. Seeking efficiency and effectiveness. Staff is committed to continuously explore ways to operate more efficiently while providing a quality service.

III. Definition
a. Fiscal year – each fiscal year begins on the first day of July and ends on the 30 th day of June.
b. Recurring revenues – revenues that are reasonably expected to continue from year-to-year, with some degree of predictability.
c. One-time revenues – revenues that are one-time in nature or unpredictable. d. Recurring expenditures – expenditures that are reasonably expected to be funded every year to maintain the current level of City services. e. One-time expenditures – expenditures that are unpredictable and are not critical to maintain the current level of services.
f. Surplus - when actual revenue exceed actual expenditure, including transfers. g. Catastrophic reserve – a required, non -discretionary, reserve that the City must maintain as a requirement for the Pension Obligation Bond (POB). h. Restricted reserve – a portion of the fund balance that is set aside for emergencies, economic uncertainty, and fiscal distress.
i. Operating surplus – the excess of total revenues minus the total expenditures within a fiscal year.
j. Unrestricted/excess reserve – a portion of the fund balance that is above the catastrophic and restricted reserve.

IV. Policies
City-wide Budget Policy
a. The City Council will adopt an annual budget for all funds, including the Redevelopment Successor Agency, before the start of the fiscal year, July 1st. b. At a minimum, the budget adoption package shall include the following:
i. A schedule of changes in fund balance for all funds. ii. Statement of revenues for all funds.
iii. Statement of expenditures for all funds.
iv. Five-year Capital Improvement Plan.
c. A copy of the budget shall be certified by the City Clerk as adopted by the City Council and filed as a public record in the office of the City Clerk.

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d. The Council will annually adopt a resolution establishing the City’s appropriations limit (Gann Limit), calculated in accordance with Article XIII-B of the Constitution of the State of California.
e. A Financial Model should be reviewed, analyzed, updated, and presented at a City Council meeting as part of the annual City budget process.

General Fund Budget Policy
a. The City will adopt a structurally balanced budget before the start of the fiscal year, July 1st.
i. Recurring revenues supporting recurring expenditures. ii. One-time revenue cannot be used for ongoing expenditures, i.e. salaries and benefits.
b. The City will commit to controlling recurring non-personnel expenditure growth to an average of the last ten years of the Consumer Price Index for All Urban Consumers (CPI -U) for the Los Angeles -Long Beach -Anaheim area which is currently 2.0%.
i. Staff will present in detail the areas where the recurring expenditures growth exceeds the average CPI-U.
ii. City Council will approve or provide direction to staff for each area where the recurring expenditures exceeded the average CPI-U.
c. The City will commit to balance the annual operating budget utilizing the following temporary budget balancing strategies*, if necessary:
i. Freeze vacant positions for one year.
ii. Suspend all overnight training, unless it is grant funded, for one year. iii. Suspend non -essential purchases of supplies, materials, equipment, vehicles, services and capital improvement projects , unless it is grant funded, for one year.
*All temporary budget balancing strategies are subject to review annually. d. The City may borrow* fund balances to balance the annual operating budget for unplanned/unforeseen events such as a recession or natural disaster. a. Borrow available fund balance from Internal Service Funds and/or Capital Project Fund.
b. Borrow from Catastrophic Reserve.
*A plan must be proposed and adopted by the City Council and must be paid back in two years.
e. The City will commit to allocating operating surpluses to:
i. Replenish reserves,
i. Pay down long-term obligations such as pension obligations , other post- employment benefits, and bonds, and
ii. Fund one-time expenses such as deferred maintenance.

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Capital Projects Fund Budget Policy
a. The City will approve a Five -year Capital Improvement Plan during the annual budget development.
ii. The budget for the Five -year Capital Improvement Plan is adopted annually.
b. The City will review and update the Five -year Capital Improvement Plan annually, if needed.
c. Future operating costs associated with the new capital project are to be disclosed.
d. An Inventory of the City’s physical assets, their condition, and remaining useful life will be maintained.
e. The City will maintain all assets at a sufficient level to protect the City’s capital investment.

Fund Balance Policy
a. Fund balance is essentially the difference between the assets and liabilities reported for the governmental fund. The Government Accounting Standards Board Statement No. 54 (GASB 54) identifies five separate components of fund balance, each of which identifies the specific purposes for which amounts can be spent:
i. Non-spendable – amounts that are not in a spendable form such as inventory.
ii. Restricted – amounts constrained to specific purposes by their providers such as grantors and higher levels of government.
iii. Assigned – amounts identified by the City Council for a specific purpose. iv. Committed – amounts that have been spent for specific purposes determined by the government’s highest level of decision -making authority.
v. Unassigned – amounts that are not classified as non -spendable, restricted, assigned, and committed.

Reserve Policies
a. General Fund
i. Maintain reserves equivalent to 25% of annual General Fund expenditure, excluding transfers out, for the respective fiscal year. 1) The City will implement a phase -in approach to achieving the 25% reserve over the next five years.
• FY26 – 18%
• FY27 – 20%
• FY28 – 23%
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• FY29 – 25%
ii. At the end of the fiscal year, the Finance Department reports on the year- end financial results. Any unrestricted/unassigned fund balance in the General Fund, after providing funding necessary to achieve the minimum reserve levels required by this policy, shall be available for allocation as follows, subject to City Council approval:
1) Replenish reserves in Internal Service Funds and/or Capital Projects Fund.
2) One-time funding, non-recurring needs.
3) Loan repayment acceleration.
iii. Upon funding of the above, the decision of remaining unrestricted/unassigned balances shall be recommended to the City Council by the City Manager or designee.

b. Internal Service Funds
i. Vehicle Replacement Fund - maintain reserves equivalent to 25% of the annual replacement value.
ii. Computer and Technology Replacement Fu nd - maintain reserves equivalent to 25 % of the annual replacement value.
iii. General Liability Fund – implement a phased in approach over the next 2 years to eliminate the negative fund balance. Once resolved, maintain a reserve amount equal to the Present Value of Projected Losses provided by the City’s Self-Insured Pool Administrator (CIPA).
• FY26 - Eliminate 50% of the negative fund balance
• FY27 - Eliminate remaining 50% negative fund balance
• FY28 - Fund 25% of the annual unpaid claims as of the end of the fiscal year or actuarial estimate provided by the City’s Self - Insured Pool Administrator (CIPA), whichever is higher. • FY29 - Fund 50% of the annual unpaid claims as of the end of the fiscal year or actuarial estimate provided by the City’s Self - Insured Pool Administrator (CIPA), whichever is higher. • FY30 - Fund 75% of the annual unpaid claims as of the end of the fiscal year or actuarial estimate provided by the City’s Self - Insured Pool Administrator (CIPA), whichever is higher. iv. Workers’ Compensation Fund - Implement a phased in approach over the next 5 years to eliminate the negative fund balance. Once resolved, maintain a reserve amount equal to the Present Value of Projected Losses provided by the City’s Self-Insured Pool Administrator (CIPA).

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1) FY 26-30 - Each year reduce the negative fund balance by at least 20% or more if the General Fund ends the years with excess surplus.
v. Employee Accrued Liabilities Fund - Maintain a reserve equivalent to the compensated absences due within one-year as reported in the prior year Annual Comprehensive Financial Report (ACFR).

c. Capital Projects Fund
i. Maintain a reserve equivalent to 1-year of pavement management or 5% of the total budget for Infrastructure, whichever is higher.

d. Enterprise Funds
i. Water Fund - maintain reserves equivalent to 25% of annual General Fund expenditure, excluding transfers out, for the respective fiscal year. ii. Sanitation Fund - maintain reserves equivalent to 25% of annual General Fund expenditure, excluding transfers out, for the respective fiscal year.

Budget Control City-Wide
a. Staff shall provide the City Council with a status report on the budget, as it compares to the adopted budget, including any recommendation and estimated fund balances, at least once during the fiscal year .
b. Budget revisions are approved as follows:
i. The City Manager and/or designee may approve transfers in the same fund to meet operational needs.
ii. Interfund transfers, transfers between two different funds, and transfers between two different projects must be approved by the City Council. c. Expenditures must be within the appropriation limit or approved budget by the City Council.
d. All non -personnel expenditures must follow the City’s Purchasing Municipal Code.
e. No full-time equivalent positions may be added without authorization and budget appropriation by the City Council.
f. All purchase order carryovers and/or continuing appropriations must be approved by the City Council.

Accounting Methodology City-wide
a. The City uses fund accounting to demonstrate compliance with finance-related legal requirements.
b. The City has an independent financial audit conducted each fiscal year.

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c. Government-wide funds, including General, Special Revenues and Capital Project Funds, are recorded on a modified accrual basis.
i. Revenues are recognized when they are measurable and available. ii. Expenditures are recognized as soon as the liabilities are incurred, except for debt service and capital lease obligations, inventories, and prepaid items.
d. Proprietary funds, which include enterprise and internal service funds, are budgeted on an accrual basis similar to private-sector businesses.

Pension Funding Policy
a. A pension funding policy is a separate policy from the FMP and will be submitted annually to the City Council for review and adoption.
b. This policy was last reviewed and adopted by the City Council per Resolution No. 11528, on February 13, 2024.

Investment Policy
a. An investment policy is a separate policy from the FMP and will be submitted annually to the City Council for review and adoption.
b. This policy was last reviewed and adopted by the City Council per Resolution No. 11563, on June 25, 2024.

Debt Issuance and Management Policy
a. The Debt Issuance and Management Policy is a separate policy from the FMP . This policy was adopted by the City Council and updated per Resolution No. 11245, on June 9, 2020.

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Agenda Item
City Council
Item #: 8.3. 3/11/2025 File #: 25-0127
TO: Honorable Mayor and Members of the City Council
FROM: Tom Kisela, City Manager

1. SUBJECT
Quarterly Update for the Fiscal Year 2024-2025 Economic Development Implementation Plan.

2. SUMMARY
Update of the Economic Development Implementation Plan detailing progress on programs and efforts for Fiscal Year 2024-25.

3. RECOMMENDED ACTION
Receive and file.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability

6. DISCUSSION AND BACKGROUND
Under the direction of the City Council, the City Manager’s Office leads economic development efforts in partnership with the Community Development Department and other City departments. City efforts are augmented through partnerships with the Orange Chamber of Commerce and other economic development stakeholders.

The City of Orange Economic Development Strategy guides City efforts to:
· Foster a positive environment that expands economic opportunities · Ensure a broad revenue base to fund City services
· Create and retain quality jobs in the City
· Provide a wide range of retail, restaurant, and service amenities for residents and visitors · Ensure that housing development supports the needs of residents and businesses The Economic Development Implementation Plan for Fiscal Year 2024-25 details activities that are proposed to be completed during the fiscal year. The plan was created with input from the Economic Development Roundtable, which brings together business owners, property owners, community stakeholders, and the Orange Chamber of Commerce. The Economic Development Roundtable, which meets periodically, was created to develop and review the City’s economic development City of Orange Printed on 3/6/2025Page 1 of 2
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Item #: 8.3. 3/11/2025 File #: 25-0127
strategy and supports and provides guidance in its implementation.

7. ATTACHMENT
· Fiscal Year 2024-25 Implementation Plan
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Agenda Item
City Council
Item #: 8.3. 3/11/2025 File #: 25-0127
TO: Honorable Mayor and Members of the City Council
FROM: Tom Kisela, City Manager

1. SUBJECT
Quarterly Update for the Fiscal Year 2024-25 Economic Development Implementation Plan.

2. SUMMARY
Update of the Economic Development Implementation Plan detailing progress on programs and efforts for Fiscal Year 2024-25.

3. RECOMMENDED ACTION
Receive and file.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability

The City of Orange Economic Development Strategy guides City efforts to:
· Foster a positive environment that expands economic opportunities · Ensure a broad revenue base to fund City services
· Create and retain quality jobs in the City
· Provide a wide range of retail, restaurant, and service amenities for residents and visitors · Ensure that housing development supports the needs of residents and businesses The Economic Development Implementation Plan for Fiscal Year 2024-25 details activities that are proposed to be completed during the fiscal year. The plan was created with input from the Economic Development Roundtable, which brings together business owners, property owners, community stakeholders, and the Orange Chamber of Commerce. The Economic Development Roundtable, which meets periodically, was created to develop and review the City’s economic development City of Orange Printed on 3/6/2025Page 1 of 2
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Item #: 8.3. 3/11/2025 File #: 25-0127
strategy and supports and provides guidance in its implementation.

7. ATTACHMENT
· Fiscal Year 2024-25 Implementation Plan
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Economic Development Implementation Plan - FY 2024-25
Updated March 3, 2025
Lead Partners Description Past Progress Status FY 25 Goal Infrastructure FinancingCMO PW
Enhanced Infrastructure Financing District to fund
infrastructure improvements that support economic
development
Council approved feasibility study on 11/28/23. Study presented at Council on 3/12/24.

Working on possible participation from other agencies
in the proposed district. Finalize proposed district for Council consideration.

West Katella District CMO CDD, PW,
Chamber, EDR
Create a vision, place branding, and place making
for a resort district on West Katella that is
complimentary to OC Vibe and OC Riverwalk.

Council approved agreement with CityThinkers on 1/23/24, Kosmont on 3/12/24, and CivicBrand on 4/23/24. Held interviews with key property owners in April. Held stakeholder workshop on 6/20/24. Held branding focus groups in Aug/Sept.

Finalizing draft framework plan and brand vision
documents. Next step to finalize branding and the vision plan story map and report.

Finalize Vision Plan and place branding and place
making plans for the district. Identify development
feasibility and City policies to encourage desired
development.

Economic Development
Forum CMO Chamber
Convene a stakeholder group to review the
Economic Development Strategy and perform a
SWOT analysis on the economic development
program.

Forum held on 1/17/24.

Incorporated input into Economic Development Strategy
and presented report to City Council. Developing plan
for the next phase in the evolution of this event.

Forum held on February 3, 2025 at The Richland.

Economic Development
Roundtable CMO Chamber
Assemble a group to meet quarterly, review the
Economic Development Strategy, and guide its
implementation.

Group met on 3/4/24, 6/24/24, and 10/14/24 to review Economic Development Strategy and Implementation Plan. Meetings scheduled for 3/10, 6/23, and 10/13 2025.Hold quarterly meetings to review and provide input and support for FY 25 Implementation Plan.

Shop Local Program CMO Chamber, EDRDevelop a program to encourage residents to support local businesses.

Experience Orange logo finalized, and agreement with Bludot approved by Council on 3/12/24 for an app-based incentive program to support small, non-chain businesses. Program was soft launched on 6/14/24 and fully launched on 6/25/24.

Over 1,200 people have signed up for the program and
business feedback has been overwhelmingly positive.

Created a shop local marketing plan to roll out in the
next few months.

Evaluate the effectiveness of Open Rewards and
provide Council with recommendations on the program
going forward.

Tourism Promotion CMO Chamber, EDR
Create a plan to market Orange as a visitor
destination, work with Chamber to revive Visitors
Bureau, and explore the formation of a Tourism
Improvement District (TIP).

Created Orange Toursim Council (OTC) to promote tourism in Orange.

Exploring the formation of a Tourism Improvement District (TID).

Orange Tourism Council (OTC) is exploring the
formation of a Tourism Promotion District (TID) and
better regional integration in promoting tourism.

Work with Orange Tourism Council to create a visitor
destination marketing plan and present a proposed
Tourism Improvement District for Council consideration.

Hotel Development CMO Create incentives to develop high-end hotels in Orange.

Kosmont completed a market analysis, surveyed incentive programs in other cities and created a hotel incentive toolkit.

Completed Council briefings on the hotel incentive
toolkit. Continue to market Orange as a location for
hotel development
Market Orange as a location for hotel development.

Promote filming in OrangeCMO Film LA Update film ordinance and create program to promote filming in Orange.

Met with Film LA and got feedback on updating our ordinance to match industry standards and how to best promote filming.

Preparing a draft film ordinance for presentation to City Council.

Prepare an updated Film Ordinance based on feedback
from Film LA for Council consideration. Create a
program to promote filming in Orange.

Microtransit Service for
Old Towne Chamber CMO, PW Launch a microtransit service through ATN for Old Towne and surrounding areas.

Funding for vehicles is in place and Council approved $100,000 in operational funding on 3/12/24.

This program cannot move forward until we have filled a $300,000 operations funding gap. City/Chamber are
exploring funding options.

Launch microtransit service and evaluate its
effectiveness while identifying possible sources of
funding for a permanent service.

Oversaturation of Uses CDD CMO
Prepare a menu of policy options for City Council
to consider to address the proliferation of certain
uses.

City Council briefings were conducted in October and November 2024 to get direction to move forward with preparing policy options.

Code Enforcement is working with the City Attorney's
Office on ordinances for massage and tobacco/vape
businesses.

Present recommended ordinance updates to City
Council for consideration.

Old Towne Parking
Management PW CMO, DMA
Develop and implement parking management
programs to support economic development in Old
Towne.

Held merchant meetings on 1/11/24, 3/13/24, and 10/23. Council approved the program on 2/25/25.

Public Works is in the process of selecting vendors to
implement the program. Continue to outreach to Old
Towne businesses to ensure successful
implementation.

Development Review
Streamlining CDD CMO, EDR
Provide the City Council with policy options to
streamline the development review process and
create an expedited process for high priority
projects.

Developed memo to detail streamlining program. CDD is working on ordinance updates to streamline the development review process.

Identify ways to streamline the development review
process and create an expedited process for high
priority projects and present policy options for Council consideration.

CMO = City Manager's OfficePW = Public WorksCDD = Community Development Department 648
Agenda Item
City Council
Item #: 9.1. 3/11/2025 File #: 25-0093
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Dan Adams, Interim Chief of Police

1. SUBJECT
Introduction and First Reading of an Ordinance of the City of Orange repealing and replacing Chapter

10.10 of the Orange Municipal Code pertaining to bicycles. Ordinance No. 05-25.

2. SUMMARY
Proposed Ordinance No. 05-25 amends and restates Orange Municipal Code chapters referencing bicycles and establishing regulations of electric bicycles and other motorized conveyances.

3. RECOMMENDED ACTION
Introduce and conduct First Reading of Ordinance No. 05-25. An Ordinance of the City Council of the City of Orange repealing and replacing Chapter 10.10 of the Orange Municipal Code pertaining to bicycles.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 1: Maintain Strong Emergency and Safety Services
Objective1.5: Develop plans, policies, and procedures consistent with national standards

6. DISCUSSION AND BACKGROUND
The Orange County Grand Jury (OCGJ) is a civil grand jury made up of Orange County residents empaneled by the Superior Court of California. The OCGJ routinely conducts investigations related to the operations of the County of Orange. On June 20, 2024, the OCGJ issued a report titled, “E-Bikes:

Friend or Foe”. The OCGJ report includes three findings and recommendations for the City of Orange. The Findings (F1-F3) and Recommendations (R1-R3) are as follows:

F1. The majority of Orange County’s 34 cities do not have ordinances or policies in place, which makes it difficult to address the safe operation and regulation of E- bikes leading to confusion.

R1. Each Orange County city should have specific policies that define the rules of the road for use of E-bikes in their communities by December 1, 2024.

F2. Due to the increasing incidence of E-bike injuries and deaths, there is a need for consistent and accurate tracking by law enforcement and first responders, which does not exist now.

R2. Each Orange County city should have a mechanism in place to report accidents, injuries and deaths involving E-bikes by December 1, 2024.

F3. Training and education on E-bike use and safety varies from city to city causing confusion amongst bike riders.

R3. Each Orange County city should research and develop outreach and education programs regarding the safe operation of E-bikes for their residents by December 1, 2024.

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Item #: 9.1. 3/11/2025 File #: 25-0093
F1. The majority of Orange County’s 34 cities do not have ordinances or policies in place, which makes it difficult to address the safe operation and regulation of E- bikes leading to confusion.

R1. Each Orange County city should have specific policies that define the rules of the road for use of E-bikes in their communities by December 1, 2024.

F2. Due to the increasing incidence of E-bike injuries and deaths, there is a need for consistent and accurate tracking by law enforcement and first responders, which does not exist now.

R2. Each Orange County city should have a mechanism in place to report accidents, injuries and deaths involving E-bikes by December 1, 2024.

F3. Training and education on E-bike use and safety varies from city to city causing confusion amongst bike riders.

R3. Each Orange County city should research and develop outreach and education programs regarding the safe operation of E-bikes for their residents by December 1, 2024.

In response to findings two and three, the Orange Police Department currently reports accidents, injuries, and deaths through the state-controlled system maintained by the California Highway Patrol, utilizing CHP Form 555. Additionally, the Orange Police Department partnered with the Orange Unified School District to implement E-bike training prior to the start of the 2024 school year. Moving forward, semi-annual E-bike training will be conducted through the Citizens’ Academy Program.

To address policy issues identified in finding one, updates to the City of Orange Municipal Code (OMC) are necessary.

The city has seen an increase in various classes and types of electric bicycles “E-bikes”and other motorized conveyances. Often the models of E-bikes and different motorized conveyances do not fit into certain categories defined by existing law and municipal codes. E-bikes have developed beyond the existing definitions, such that current laws can no longer be enforced and there are conflicting opinions on types and classes. This makes enforcement particularly difficult due to the fact laws regulating the operation of different motorized conveyances vary.

A review of the City’scurrent OMC identified outdated provisions related to bicycle enforcement, licensing, and classification. To ensure compliance with the OCGJ’srecommendations and improve regulatory clarity, the Orange Police Department worked with the City Attorney’soffice to propose revisions to the OMC. The proposed Ordinance establishes clear definitions, classifications, and guidelines for bicycles, E-bikes, and motorized conveyances.

Key updates in the proposed Ordinance include clarified regulations, safety standards, designated routes, parking regulations, and enforcement procedures. The revisions would eliminate outdated language, and more importantly would consolidate the unsafe actions of riders into one clear section that encompasses all classes and types of bicycles, E-bikes, and motorized conveyances.

7. ATTACHMENTS
· Ordinance No. 05-25
· OMC Chapter 10.10 to be repealed
City of Orange Printed on 3/5/2025Page 2 of 2
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Agenda Item
City Council
Item #: 9.1. 3/11/2025 File #: 25-0093
TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Dan Adams, Interim Chief of Police