The City’s management is responsible for the Treasu rer’s Report for the month ended June 30, 2025, the compliance with the Policy and the Code and for selecting that such criteria are appropriate for your purpose.
The City has agreed to and acknowledged that the proced ures performed are appropriate to meet the intended purpose of evaluating the Treasurer’s Report for the month ended June 30, 2025, for compliance with the provision of the Code and with the Policy. This report ma y not be suitable for any other purpose. The procedures performed may not address all the items of interest to a us er of this report and may not meet the needs of all users of this report and, as such, users are responsi ble for determining whether the procedures performed are appropriate for their purposes.
The procedures and the associated findings are as follows:
1. We obtained a copy of the Investment Portfolio Report as of June 30, 2025 and agreed individual investments/deposits to supporting documentation obtained from the City and reconciled such to the Investment Portfolio Report. We traced total investments listed on the Investment Portfolio Report to the City’s general ledger.
Finding: No exceptions were noted as a result of this procedure.
2. We compared investments listed in the Investment Portfolio Report as of June 30, 2025, to the types of investments authorized for the City by the City’s in vestment policy and California Government Code Section 53601.
Finding: No exceptions were noted as a result of this procedure.
3. We compared the market value of the investments listed in the Investment Portfolio Report as of June 30, 2025 to the bank statements and other supporting documentation.
Finding: No exceptions were noted as a result of this procedure.
4. We
read the Investment Portfolio Report to ascertai n that it contained the in formation/data required by California Government Code Section 53646 and met the timing requirements of California Government Code Section 53646, as follows:
a. Included the type of investment, issuer, date of ma turity, par and dollar amount invested on all securities , inve
stments and monies held by the City.
b.
Included those funds under management of contracted parties. 325
To the Hon
orable Mayor and Members of the City Council
City of Orange, California
c.
Included market value (and source) as of the date of the report of all securities held by the City or un der manag
ement of contracted parties.
d.
Stated compliance of the portfolio to the investment policy of the City. e.
Included a statement addressing the ability of the City to meet the pool’s expenditure requirements for the next six months.
Finding: No e xceptions were noted as a result of this procedure.
5. We compared the investments listed in the Investment Portfolio Report as of June 30, 2025, to the prohib ited inve
stments listed in California Government Code Section 53601.6.
Finding: No e xceptions were noted as a result of this procedure.
6. We calculated the totals (cost basis) for the investm ent type s listed in the Investment Portfolio Report as of June 30, 2025 and compared those totals to the limitations imposed by the City’s invest ment policy and California Go
vernment Code Section 53601 for the specific investment types.
Finding: No exceptions were noted as a result of this procedur e.
7. We agreed individual investment maturity dates listed in the Investment Portfolio Report as of Jun
e 30, 2025, to the City’s copies of investment statements to determine if they conformed to the maturity requirements of the City’s investment policy and California Government Code section 53601.
Finding: No exceptions were noted as a result of this procedure.
8. We obtained and read the third-party custodial agreements a nd broker/dealer agreements in effect at the date of the Inve
stment Portfolio Report to determine if the agreements contained a cl ause addressing deliver y of se
curities and that the delivery method conformed to California Government Code section 53601.
Finding: The City does not have a formal agreement or cont ract with the broker/dealer since they are not required to use the broker/dealer for trades an d there are no fees or commissions charged. The City Treasurer authorizes the use of designated brokers and ensures that the City has written documentation with the broker’s signature stati ng that the broker will adhere to the City’s investment policy.
We were engaged by the City to perform this a greed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA. We were not engaged to and did not conduct an examination or review engagement, the obj ective of which would be t he expression of an opinion or conclusion, respectively, on evaluating the Treasurer’s Report for the month ended June 30, 2025, for compliance with the provisions of the Code) and with t he Policy. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet ou r other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement This report is intended solely for the information of the City Council and management of the City of Orange and is not intended to be, and should not be, used by anyone other than these specified parties.
Irvine, California
November 19, 2025
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CITY OF ORANGE, CALIFORNIA
AIR POLLUTION REDUCTION FUND
FOR THE YEAR ENDED JUNE 30, 2025
FINANCIAL STATEMENTS
WITH REPORT ON AUDIT
BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
327
CITY OF ORANGE, CALIFORNIA
AIR POLLUTION REDUCTION FUND
Financial Statements
With Report on Audit
By Independent
Certified Public Accountants
For the Year Ended June 30, 2025
328
CITY OF ORANGE, CALIFORNIA
AIR POLLUTION REDUCTION FUND
Financial Statements
With Report on Audit
By Independent
Certified Public Accountants
For the Year Ended June 30, 2025
Table of Contents
Page
Number
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT ................................................................................................................... 1
BASIC FINANCIAL STATEMENTS
GOVERNMENT - WIDE FINANCIAL STATEMENTS
Statement of Net Position ...................................................................................................................................... 4 Statement of Activities ........................................................................................................................................... 5
FUND FINANCIAL STATEMENTS
Balance Sheet – Governmental Fund ................................................................................................................... 6 Reconciliation of the Balance Sheet - Governmental Fund to the Statement of Net Position .................................................................................................................. 7 Statement Of Revenues, Expenditures and Changes In
Fund Balance – Governmental Fund: .......................................................................................................... 8 Reconciliation of the Statement of Revenues
Expenditures and Changes in Fund Balances of Governmental Fund to the Statement of Activities ....................................................................................................................... 9 Notes to Financial Statements ................................................................................................................................ 10
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule ........................................................................................................................... 1 Note to Required Supplementary Information ................................................................................................... 1
OTHER REPORT
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 ........................................................................................................... 1 329
LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Honorable Members of the City Council
City of Orange, California
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of the governmental activities and the governmental fund of the Air Pollution Reduction Fund (hereafter, the Fund) a special revenue fund of the City of Orange, California (hereafter, the City) as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Fund’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Fund as of June 30, 2025, and the changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter
Fund Reporting
As discussed in Note 1, the financial statements present only the Fund and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2025, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with 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. 330
To the Honorable Members of the City Council
City of Orange, California
Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the 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 historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Management has omitted the 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 statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. 2 331
To the Honorable 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 January 26, 2026, 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 grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the 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
January 26, 2026
3 332
CITY OF ORANGE, CALIFORNIA
AIR POLLUTION REDUCTION FUND
Statement of Net Position
Governmental
Activities
ASSETS
Cash and investments 330,023$
Receivables (net of uncollectibles):
Accrued interest 2,585
Capital assets (net of accumulated depreciation/amortization) 136,985 Total assets 469,593
NET POSITION
Invested in capital assets 136,985
Restricted for air pollution reduction projects 332,608 Total net position 469,593$
June 30, 2025
See Notes to Financial Statements.
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AIR POLLUTION REDUCTION FUND
Statement of Activities
For the Year Ended June 30, 2025
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Functions/Programs:
Primary government:
Governmental activities:
General government 92,207$ -$ 183,306$ -$ 91,099$ Public safety 9,179 -
-
- (9,179)
Total governmental activities 101,386$ -$ 183,306$ -$ 81,920$ General revenues:
General revenues:
Use of money and property 16,120
Total general revenues 16,120
Change in net position 98,040
Net position-beginning 371,553
Net position-ending 469,593$
Program Revenues
Net (Expenses)
Revenues and
Changes in Net
Position
See Notes to Financial Statements.
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CITY OF ORANGE, CALIFORNIA
AIR POLLUTION REDUCTION FUND
Balance Sheet - Governmental Fund
June 30, 2025
ASSETS
Cash and investments 330,023$
Receivables (net of allowance for uncollectible):
Accrued interest 2,585
Total assets 332,608$
FUND BALANCE
Restricted for air pollution remediation projects 332,608$ Total fund balance 332,608$
See Notes to Financial Statements.
6 335
AIR POLLUTION REDUCTION FUND
Reconciliation of the Balance Sheet of Governmental Fund to the Statement of Net Position
June 30, 2025
Amounts reported for governmental activities in the Statement of Net Position are different because:
Total fund balances of governmental fund 332,608$
136,985
Net position of governmental activities 469,593$
CITY OF ORANGE, CALIFORNIA
Capital assets, net of accumulated depreciation, used in governmental activities are not financial resources and, therefore, are not reported in the funds.
See Notes to Financial Statements.
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AIR POLLUTION REDUCTION FUND
Statement of Revenues, Expenditures, and
Changes in Fund Balance - Governmental Fund
For the Year Ended June 30, 2025
REVENUES
Intergovernmental 183,306$
Use of money and property 16,120
Total revenues 199,426
EXPENDITURES
Current:
General government 64,035
Public safety 9,179
Total expenditures 73,214
Net change in fund balances 126,212
Fund balances -beginning 206,396
Fund balances -ending 332,608$
See Notes to Financial Statements.
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AIR POLLUTION REDUCTION FUND
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Fund to the Statement of Activities For the Year Ended June 30, 2025
Amounts reported for governmental activities in the Statement of Activities are different because:
Net change in fund balances - Governmental Fund: 126,212$ Depreciation expense (28,172)
Change in net position of governmental activities 98,040$
CITY OF ORANGE, CALIFORNIA
Governmental funds report capital outlays are expenditures. However, in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation/amortization expense in the current period.
See Notes to Financial Statements.
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AIR POLLUTION REDUCTION FUND
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: GENERAL
The financial statements are intended to reflect the financial position and changes in the financial position attributable to the Air Pollution Reduction Special Revenue Fund (AQMD) of the City of Orange, California (the City). These financial statements are exclusively for AQMD and do not purport to, and do not, present fairly the financial position and changes in the financial position for the City.
Assembly Bill 2766 authorizes the South Coast Air Quality Management District (SCAQMD) to impose an annual vehicle registration fee and to distribute a portion of the collected revenues to all local jurisdictions within the South Coast Air Basin. These revenues are to be used solely to reduce air pollution from motor vehicles by implementing new programs and studies necessary for the implementation of the California Clean Air Act.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Description of the Reporting Entity
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity with a self-balancing set of accounts. Monies received under Assembly Bill 2766 are recorded in a Special Revenue Fund, the Air Pollution Reduction Fund, which is used to account for the proceeds of revenue to be used for the purpose of implementing the California Clean Air Act.
B. Basis of Presentation
The Air Pollution Reduction Fund’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board (GASB) 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 AQMD 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. Direct expenses are those that are clearly identifiable with a specific function or segment.
Program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.
The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
While separate government-wide and fund financial statements are presented, they are interrelated. 10 339
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AIR POLLUTION REDUCTION FUND
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-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. The city uses an availability period of 60 days for all revenues. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
Intergovernmental and interest revenues associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the AQMD.
D. Cash 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 interest income 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 funds for investment purposes, with interest being allocated monthly to various funds based on each fund’s prior month-end cash and investment balance.
E. 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 AQMD 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 inflows of resources, represents an acquisition of net position that applies to a future period and will not be recognized as an inflow of resources (revenue) until that time. The AQMD has items related to the pension and OPEB plans that qualify for reporting in this category. 11 340
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Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Net Position Flow Assumption
Sometimes the AQMD 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 AQMD’s policy to consider restricted net position to have been depleted before unrestricted net position is applied.
G. Fund Balance Flow Assumptions
Sometimes the AQMD 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 AQMD’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.
H. Fund Equity
In the fund financial 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) legally or contractually required to be maintained intact. The Air Pollution Reduction Fund did not have a nonspendable fund balance as of June 30, 2025.
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, 2025.
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, 2025.
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, 2025.
I. Estimates
The preparation 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. 12 341
CITY OF ORANGE, CALIFORNIA
AIR POLLUTION REDUCTION FUND
Notes to the Financial Statements
For the Year Ended June 30, 2025
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.
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AIR POLLUTION REDUCTION FUND
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 4: CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2025 was as follows:
Depreciation for the current year is broken down as follows:
NOTE 5: 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, 2025, are available at the Orange City Hall.
NOTE 6: SUBSEQUENT EVENTS
In preparing these financial statements, the City has evaluated events and transactions for potential recognition or disclosure through January 26, 2025, the date the financial statements were available to be issued.
Balance Balance
June 30, 2024 Additions Deletions Transfers June 30, 2025 Governmental activities:
Capital assets, being depreciated
Vehicles 201,784 $ - $ - $ - $ 2 0 1 , 7 8 4 $ Total capital assets, being depreciated 201,784 - - - 201,784 Less accumulated depreciation
Vehicles 36,627 28,172 - - 64,799
Total accumulated depreciation 36,627 28,172 - - 64,799 Total capital assets, being depreciated, net 165,157 (28,172) - - 136,985 Total governmental activities capital assets 165,157$ (28,172) $ - $ - $ 1 3 6 , 9 8 5 $ General government 28,172 $
Total depreciation expense 28,172 $
14 343
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 181,700$ 181,700 $ 183,306 $ 1,606$ Use of money and property 2,200 2,200 16,120 13,920 Total revenues 183,900 183,900 199,426 15,526
EXPENDITURES
Current:
General government 77,778 77,778 64,035 13,743 Public safety 10,000 10,000 9,179 821 Total expenditures 87,778 87,778 73,214 14,564 Net change in fund balance 96,122 $ 96,122 $ 126,212 30,090 $ Fund balance-beginning 206,396
Fund balance-ending 332,608$
CITY OF ORANGE, CALIFORNIA
AIR POLLUTION REDUCTION FUND
Budgetary Comparison Schedule
For the Year Ended June 30, 2025
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CITY OF ORANGE, CALIFORNIA
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Notes To Required Supplementary Information
For the Year Ended June 30, 2025
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.
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LSLCPAS.COM
INDEPENDENT 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 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 Air Pollution Reduction special revenue fund (hereafter, the Fund) of the City of Orange, California (hereafter, the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated January 26, 2026.
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. 346
To the Honorable 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 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
January 26, 2026
18 347
LSLCPAS.COM
INDEPENDENT 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 Members of the City Council
City of Orange, California
We have audited, in accordance with the auditing standards gene rally 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 i nformation of the City of Orange, California (hereafter, the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated January 26, 2026.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statement s, 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 allo w 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 b asis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less s evere 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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified a certain deficiency in internal control, described in the accompanying schedule of findings and responses as item 2025-001 that we consider to be a material weakness.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and ma terial effect on the financial statements.
However, providing an opinion on compliance with those provisio ns 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.
348
To the Honorable Members of the City Council
City of Orange, California
City of Orange, California’s Response to Finding
Government Auditing Standards requires the auditor to perform limited procedures on the City ’s response to the finding identified in our audit and described in the accompanyi ng schedule of findings and responses. The City’s response was not subjected to the other auditing procedures app lied in the audit of the financial statements and, accordingly, we express no opinion on the response.
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 e ffectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Ac cordingly, this communication is not suitable for any other purpose.
Irvine, California
January 26, 2026
349
To the Honorable Members of the City Council
City of Orange, California
SCHEDULE OF FINDINGS AND RESPONSES
Reference Number: 2025-001
Financial Closing and Reporting
Material Weakness
Condition
During our audit, we noted that the City recorded a substantial number of post–trial balance journal entries to correct errors and adjust account balances after the initial trial balance was prepared. The adjustments prepared staff, after audit has begun, were necessary to ensure the financial stateme nts were presented in accordance with generally accepted accounting principles (GAAP).
Criteria
Government Auditing Standards and GAAP require entities to main tain effective internal controls over financial reporting to ensure accurate and timely preparation of financia l statements. An effective financial closing process should minimize the need for extensive post–closing adjustments and ensure that account balances are complete and accurate prior to audit.
Cause
The City lost several key finance personnel during the year, including the Finance Manager, and Senior Accountant, while simultaneously implementing a new ERP system. These facto rs strained the department’s capacity and contributed to weaknesses in the financial closing process, as staff turnover and system changes disrupted established procedures and reduced the availability of experienced personnel to perform timely reconciliations and reviews.
Effect or Potential Effect
The combination of staff turnover and ERP implementation caused delays in the financial closing process, increased the risk of errors, and required significant post-closing adjustments. These issues impacted audit readiness and the timeliness of financial reporti ng, creating inefficiencies and elevating the risk of material misstatements in the financial statements.
Recommendation
We recommend the City fill open positions to take over or alloc ate resources to the procedures that have led to impacts on the timeliness of the financial closing procedures. This will ensure all journal entries and reconciliations are prepared and will be included in the trial balance provided to the auditors at the beginning of the audit, and limit the number of post-trial balance journal entries.
Management’s Response
Management acknowledges and concurs with the finding and recommendation. While the implementation of a new ERP system during Fiscal Year 2024–2025 created significant operational challenges, the turnover in key Finance positions highlights the critical need of allocating adequate staffing to core financial functions.
Management is actively recruiting to fill critical vacancies and is simultaneously exploring opportunities to streamline processes, leverage system capabilities, and implement innovati ve approaches to improve efficiency. With the combination of filling critical vacancies, process improvements, and continued stabilization of the new ERP system, the Finance Department is committed to provide a more timely and accurate trial balance at the start of next year’s audit cycle.
350
&,7<2)25$1*(+286,1*68&&(6625
25$1*(&$/,)251,$
)257+(<($5(1'('-81(5 ),1$1&,$/67$7(0(176 351
CITY OF ORANGE HOUSING SUCCESSOR
ORANGE, CALIFORNIA
Financial Statements
For the Year Ended June 30, 2025
PREPARED BY: FINANCE DEPARTMENT
352
CITY OF ORANGE HOUSING SUCCESSOR
ORANGE, CALIFORNIA
Financial Statements
For the Year Ended June 30, 2025
Table of Contents
Page
Number
INDEPENDENT AUDITORS’ REPORT
Financial Audit ..................................................................................................................................................... 1
Compliance Audit ................................................................................................................................................ 4
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:
Statement of Net Position .................................................................................................................................. 7
Statement of Activities ....................................................................................................................................... 8
Fund Financial Statements:
Balance Sheet – Governmental Funds ............................................................................................................. 9
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position...................................................................................................................... 10
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Fund ......................................................................................................................... 11
Reconciliation of the Statement of Revenues, Expenses and Changes in Fund Balances of Governmental Funds to the Statement of Activities .......................................................... 12
Notes to the Financial Statements .................................................................................................................... 13
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget to Actual .............................................................................................................................................. 18
Notes to the Required Supplementary Information ........................................................................................... 19
OTHER SUPPLEMENTARY INFORMATION
Computation of Low and Moderate Income Housing Funds Excess/Surplus ................................................... 20
353
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 Housing Successor special revenue fund (the “Fund” ) of the City of Orange, Califo rnia, (hereafter, the “City”) as of and for the year ended June 30, 2025, and the related notes to the financial sta tements, which collectively comprise the Fund’s basic financial statements as listed in the table of contents.
In our opinion, the financial st atements referred to above pres ent fairly, in all material respects, the respective financial position of the Fund of the City as of June 30, 2025, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial State ments section of our report. We are required to be independent of the City and to meet our other ethical responsib ilities, 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 only the Fund and do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2025, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with 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.
354
To the Honorable Mayor Members of the City Council
City of Orange, California
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to is sue an auditors’ report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted a uditing standards and Government Auditing Standards will always detect a material m isstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted au diting standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skept icism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to th ose risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of inter nal 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 Fund’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States o f America require 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 operat ional, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assuran ce 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 supplem ent the basic financial statements. Such missing information, although not a part of the basic financial stateme nts, is required by the Governmental Accounting Standards Board who considers it to be an essential part of fin ancial reporting for placing the basic financial statements in an appropriate operational, economic, or historic al context. Our opinion on the basic financial statements is not affected by this missing information.
2 355
To the Honorable Mayor Members of the City Council
City of Orange, California
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 (supplementary information) is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 23, 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 grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of intern al control over financial reporting and compliance and the results of that testing, and not to provide an opinion on t he 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 City’s internal control over the Fund’s financi al reporting and compliance.
Irvine, California
December 23, 2025
3 356
LSLCPAS.COM
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 Or ange, California (hereafter, the “City”)’s compliance with the types of compliance requirements identified as subject to audit in the California H ealth and Safety Code sections applicable to the California Housing Successor Agencies (the HSC) that could have a direct and material effect on each of the City’s Low-Moderate Income Housing Program (the Program) for the year ended June 30, 2025.
In our opinion, the City complied, in all material respects, wi th 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, 2025.
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 in Government 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 Auditors’ Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our o ther 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 complianc e 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 o ver compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the Program.
Auditors’ 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 o r 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, misrepre sentations, 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. 357
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:
• Exercise professional judgment and maintain professional skept icism throughout the audit.
• Identify and assess the risks of material noncompliance, wheth er due to fraud or error, and design and perform audit procedures responsive to those risks. Such proced ures include examining, on a test basis, evidence regarding the City’s compliance with the compliance re quirements referred to above and performing such other procedures as we considered necessary in the circumstances.
• Obtain an understanding of the City’s internal control over co mpliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report 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 complian ce 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 t he limited purpose described in the Auditors’ 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 weaknes ses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we d id 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 o n the requirements of the HSC. Accordingly, this report is not suitable for any other purpose.
Irvine, California
December 23, 2025
5 358
To the Honorable Mayor and Members of the City Council
City of Orange, California
SCHEDULE OF FINDINGS AND RESPONSES
Reference Number: 2025-001
Financial Closing and Reporting
Significant Deficiency
Condition
During our audit, we noted that the City recorded a substantial number of post–trial balance journal entries to correct errors and adjust account balances after the initial trial balance was prepared. The adjustments prepared staff, after audit has begun, were necessary to ensure the financial stateme nts were presented in accordance with generally accepted accounting principles (GAAP).
Criteria
Government Auditing Standards and GAAP require entities to main tain effective internal controls over financial reporting to ensure accurate and timely preparation of financia l statements. An effective financial closing process should minimize the need for extensive post–closing adjustments and ensure that account balances are complete and accurate prior to audit.
Cause
The City lost several key finance personnel during the year, including the Finance Manager, and Senior Accountant, while simultaneously implementing a new ERP system. These factors strained the department’s capacity and contributed to weaknesses in the financial closing process, as staff turnover and system changes disrupted established procedures and reduced the availability of experienced personnel to perform timely reconciliations and reviews.
Effect or Potential Effect
The combination of staff turnover and ERP implementation caused delays in the financial closing process, increased the risk of errors, and required significant post-closing adjustments. These issues impacted audit readiness and the timeliness of financial reporti ng, creating inefficiencies and elevating the risk of material misstatements in the financial statements.
Recommendation
We recommend the City fill open positions to take over or alloc ate resources to the procedures that have led to impacts on the timeliness of the financial closing procedures. This will ensure all journal entries and reconciliations are prepared and will be included in the trial balance provided to the auditors at the beginning of the audit, and limit the number of post-trial balance journal entries.
Management’s Response
Management acknowledges and concurs with the finding and recommendation. While the implementation of a new ERP system during Fiscal Year 2024–2025 created significant operational challenges, the turnover in key Finance positions highlights the critical need of allocating adequate staffing to core financial functions.
Management is actively recruiting to fill critical vacancies and is simultaneously exploring opportunities to streamline processes, leverage system capabilities, and implement innovative approaches to improve efficiency. With the combination of filling critical vacancies, process improvements, and continued stabilization of the new ERP system, the Finance Department is committed to provide a more timely and accurate trial balance at the start of next year’s audit cycle.
6 359
CITY OF ORANGE, CALIFORNIA
HOUSING SUCCESSOR
Statement of Net Position
Governmental
Activities
ASSETS
Cash and investments 118,262$
Receivables (net of uncollectibles):
Accrued interest 850
Notes and loans 29,582,480
Total assets 29,701,592
DEFERRED OUTFLOWS OF RESOURCES
Pension-related 51,150
OPEB-related 18,985
Total deferred outflows of resources 70,135
LIABILITIES
Accounts payable 2,007
Noncurrent liabilities:
Due in more than one year:
Net pension liability 59,224
Net OPEB liability 109,339
Total liabilities 170,570
DEFERRED INFLOWS OF RESOURCES
OPEB-related 44,357
Total deferred inflows of resources 44,357
NET POSITION
Restricted for housing 29,556,800
Total net position 29,556,800$
June 30, 2025
See Notes to Financial Statements.
7 360
CITY OF ORANGE, CALIFORNIA
HOUSING SUCCESSOR
Statement of Activities
For the Year Ended June 30, 2025
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Functions/Programs:
Primary government:
Governmental activities:
General government 31,144$ -$ -$ -$ (31,144)$ Community development 217,590 - - - (217,590) Economic development 47,169 - - - (47,169) Total governmental activities 295,903$ -$ -$ -$ (295,903)$ General revenues:
General revenues:
Use of money and property 111,472
Total general revenues 111,472
Change in net position (184,431)
Net position-beginning 29,741,231
Net position-ending 29,556,800$
Program Revenues
Net (Expenses)
Revenues and
Changes in Net
Position
See Notes to Financial Statements.
8 361
CITY OF ORANGE, CALIFORNIA
HOUSING SUCCESSOR
Balance Sheet
Governmental Fund
June 30, 2025
ASSETS
Cash and investments 118,262$
Receivables (net of allowance for uncollectible):
Accrued interest 850
Notes and loans 29,582,480
Total assets 29,701,592$
LIABILITIES
Accounts payable 2,007$
Total liabilities 2,007
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 1,250,000
Total deferred inflows of resources 1,250,000
FUND BALANCE
Restricted for housing 28,449,585
Total fund balance 28,449,585
Total liabilities, deferred inflows of resources,
and fund balance 29,701,592$
See Notes to Financial Statements.
9 362
HOUSING SUCCESSOR
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2025
Amounts reported for governmental activities in the Statement of Net Position are different because:
Total fund balances - governmental funds 28,449,585$
Deferred outflows-pension related 51,150
Deferred outflows-OPEB related 18,985
Deferred inflows-OPEB related (44,357)
Total deferred outflows and inflows related to postretirement benefits 25,778 Long-term receivables 1,250,000
Net pension liability (59,224)
Net OPEB liability (109,339)
Total long-term liabilities (168,563)
Net position of governmental activities 29,556,800$
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 benefits (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 Notes to Financial Statements.
10 363
CITY OF ORANGE, CALIFORNIA
HOUSING SUCCESSOR
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Fund
For the Year Ended June 30, 2025
REVENUES
Use of money and property 111,472$
Total revenues 111,472
EXPENDITURES
Current:
General government 28,962
Community development 202,739
Economic development 46,026
Total expenditures 277,727
Net change in fund balances (166,255)
Fund balance-beginning 28,615,840
Fund balance-ending 28,449,585$
See Notes to Financial Statements.
11 364
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, 2025
Amounts reported for governmental activities in the Statement of Activities are different because:
Net change in fund balances - total governmental funds: (166,255)$ Changes in pension liabilities and related deferred outflows and inflows of resources (28,410) Changes in OPEB liabilities and related deferred outflows and inflows of resources 10,234 Total adjustment (18,176)
Change in net position of governmental activities (184,431)$ 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 Notes to Financial Statements.
12 365
CITY OF ORANGE HOUSING SUCCESSOR
Notes to Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SIGNIFICANT A CCOUNTING POLICIES
A. Financial Reporting Entity
The Orange Successor Housing Agency (Housing Successor) was est ablished on February 1, 2012, pursuant to the dissolution of the former Redevelopment Agency. Prior to th at, 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 a nd 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. Separate financial statements are prepared for the City, and may be obtained from the City.
B. Basis of Presentation
The Housing Successor’s financial statements are prepared in co nformity with accounting principles generally accepted in the United States o f America. The Government Accoun ting 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. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements o f 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.
C. Measurement Focus, Basis of Accounting and Financial Stateme nt Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Und er the economic resources measu rement 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 expe nses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and simi lar 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 fin ancial 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 Hous ing Successor considers reven ues relating to grants to be available if they are collected within 120 days of the end of the current fiscal peri od, 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.
13 366
CITY OF ORANGE HOUSING SUCCESSOR
Notes to Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities a nd Net Position or Equity
Cash 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 fis cal year are recognized as use of money and property for that fiscal year. Use of money and property includ es 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 funds for inves tment purposes, with interest being allocated monthly to various funds based on each fund’s prior month-end c ash and investment balance. Interest income for cash and investments excluded from pooled cash is credited dire ctly to the related funds. Investment policies applicable to all the Housing Successor’s funds are those of th e City 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 assets that applies to a fut ure period and will not be reco gnized as an outflow of resources (expense/expenditure) until that t ime. The Housing Successor ha s 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 assets 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 calcula te 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 resource s 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.
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CITY OF ORANGE HOUSING SUCCESSOR
Notes to Financial Statements
For the Year Ended June 30, 2025
NOTE 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 r esources 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, 2025.
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, 2025.
Unassigned include the residual amounts that have not been rest ricted, 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 States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities an d 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 compone nt 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 June 30, 2025, cash and investments were reported in the accompanying financial statements as follows:
Equity in City Investment pool $ 118,262 Total cash and investments $ 118,262
A. Equity in the Cash and Investment Pool of the City of Orange
The Housing Successor has no separate bank accounts or investme nts other than its equity in the cash and investment pool managed by the City. The Housing Successor is a voluntary participant in that pool. This pool is governed by and under the regulatory oversight of the Investmen t Policy adopted by the City Council of the City.
The Housing Successor has not adopted an investment policy separate from that of the City. 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.
15 368
CITY OF ORANGE HOUSING SUCCESSOR
Notes to Financial Statements
For the Year Ended June 30, 2025
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
B. Disclosures Relating to the Investment Policy, Interest Rate 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’s Annual Comprehensive Financial Report.
C. Fair Value Measurements
The Housing Successor categorizes its fair value measurement wi thin the fair value hierarchy established by generally accepted accounting principles. The hierarchy is base d 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 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 an d 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, 2025, net of allowance for loan forgiveness, is $29,582,480.
Additionally, the former Redevel opment Agency issued several pr omissory notes, pursuant to and in implementation of the “Affordable Housing Resale Restrictions O ption 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 repres ent 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, 2025, the outstanding amount for these loans was $241,114. 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 Agreement s 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 In come Senior Citizen Households, and one (1) manager’s unit located at 480 South Batavia Street in the City, while maintaining compliance with the affordable housing requirements. The Financing Agreements provided for Ci ty Loans from various funds, which included $576,000 from the Housing Successor Fund. The loan balance is $458,696 at June 30, 2025. 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 Agreemen t that provided the Developer of 1800 E. La Veta Avenue in the City for the development and oper ation of one hundred sixty-four (164) affordable rental housing units for Extremely Low Income and Lower Income Senior Citizen Households, and two (2) manager’s units. The Financing Agreement provided for a City loan from the Housing Successor Fund in the amount of $2,200,000. The loan balance is $1,980,000 at June 30, 2025. 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.
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CITY OF ORANGE HOUSING SUCCESSOR
Notes to Financial Statements
For the Year Ended June 30, 2025
NOTE 4: 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). CalPE RS 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 pu blic 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 purpos es), and membership information are listed in the CalPERS June 30, 2016 Annual Actuarial Valuation Report. Detail s of the benefits provided can be obtained in Appendix B of the actuarial valuation report. This report and C alPERS’ 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 Annual Comprehensive Financial Report for the Year Ended June 30, 2025.
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 classifi ed 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 fo r 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, 2025.
The City allocates a percentage of the GASB 68 net pension liability, deferred outflows, deferred inflows, and required supplementary information to the Housing Successor bas ed on its pro rata share of the actual employer pension cost to the City.
NOTE 5: OTHER POST EMPLO YMENT 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 Emp loyees' 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 ag reement between the City and CalPERS. The City currently contributes $149 per month for each retiree and the retiree is responsible for the balance of the premium amount.
The City allocates a percentage of the net OPEB liability, deferred outflows and inflows, and required supplementary information to the Housing Successor based on its pro rata share determined by an actuarial valuation annually.
NOTE 6: SUBSEQUENT EVENTS
In preparing these financial statements, the Housing Successor has evaluated events and transactions for potential recognition or disclosure through December 23, 2025, the date the financial statements were available to be issued.
No events or transactions were identified that required recognition or disclosure.
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HOSUING SUCCESSOR
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property 101,937$ 101,937$ 111,472$ 9,535$ Total revenues 101,937 101,937 111,472 9,535
EXPENDITURES
Current:
General government 36,715 34,715 28,962 5,753 Community development 114,187 131,101 202,739 (71,638) Economic development 47,151 2,823,151 46,026 2,777,125 Total expenditures 198,053 2,988,967 277,727 2,711,240 Net change in fund balances (96,116)$ (2,887,030)$ (166,255) 2,720,775$ Fund balance-beginning 28,615,840
Fund balance-ending 28,449,585$
CITY OF ORANGE, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual For the Year Ended June 30, 2025
18 371
CITY OF ORANGE HOUSING SUCCESSOR
Notes to Required Supplementary Information
For the Year Ended June 30, 2025
NOTE 1: BUDGETARY ACCOUNTING
Annual budgets are adopted by July 1 of each year on a basis co nsistent 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 C ouncil throughout the year. Department heads are responsible for monitoring their department’s appropriated budget.
Legal level of Control – The legal level of budgetary control i s at the department level within each fund. Transfers of appropriations between funds, between departments within a f und, and between capital outlay or debt service and another object group classification within a department, re quire City Council approval. All other transfers of appropriations can be made with City management approval.
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CITY OF ORANGE, CALIFORNIA
HOUSING SUCCESSOR
Computation of Low and Moderate Income Housing Funds
Excess/Surplus
Opening Fund Balance 28,449,585$
Less Unavailable Amounts:
Loans receivable (29,582,480)
(29,582,480)
Available Housing Successor Funds (1,132,895)
Limitation (greater of $1,000,000 or four years deposits) Aggregate amount deposited for last four years:
2024-2025 111,472$
2023-2024 12,774,724
2022-2023 650,408
2021-2022 81,742
Total 13,618,346$
Base Limitation 1,000,000$
Greater amount 13,618,346
Computed Excess/Surplus None A
A. No Excess Surplus was developed for fiscal year ended June 30, 2025. According to HSC 34176.1(d) if a housing successor has an excess surplus, the housing successor shall encumber the excess surplus for the purposes as described in 34176.1 paragraph (3) of subdivision (a), or transfer these funds pursuant to 34176.1 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 Multifamily Housing Program or the Joe Serna Jr. Farmworker Housing Grant Program.
Low and Moderate
All Project Area
July 1, 2025
Housing Funds
20 373
Agenda Item
Orange City Council
Item #: 8.1. 2/24/2026 File #: 26-0063
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Leslie Hardy, Community and Library Services Director
1. SUBJECT
Lottery selection for permits to sell safe and sane fireworks.
2. SUMMARY
On December 9, 2025, the Orange City Council adopted Resolution No. 11648, regarding updated rules and regulations for the number of permits, application process and lottery process to sell safe and sane fireworks pursuant to Orange Municipal Code Chapter 8.13. An eligibility pool has been created from a compiled list of qualified applicant organizations as defined in Resolution No. 11648, and a lottery drawing can now be conducted wherein presumptive permittees are chosen via random selection for continuance in the permit process.
3. RECOMMENDED ACTION
Conduct a lottery via random selection process, record the results, and provide notification to presumptive permittees regarding next steps in the safe and sane fireworks sale permit process.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 3: Enhance Public Communication Strategy and Quality of Life
6. DISCUSSION AND BACKGROUND
On May 14, 2024, the City Council adopted Resolution No. 11542, submitting to the voters a question on whether to permit the sale, possession, and use of Safe and Sane Fireworks. Assigned the letter designation “AA”by the Orange County Registrar of Voters, Measure AA was approved in November 2024. The Council adopted Resolution No. 11597, finalizing the lottery and permit process pertinent to the sale of Safe and Sane Fireworks within the City. Subsequently, on December 9, 2025, the City Council adopted Resolution No. 11648, which rescinded and replaced Resolution 11597 and established updated procedures and changes to the Safe and Sane Fireworks Program (Attachment 1). Changes to the process were primarily related to advancing the annual program schedule, creating a two-year permit process, revising the automatic permittee organizations and updating affiliated organization language.
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Item #: 8.1. 2/24/2026 File #: 26-0063
Staff finalized necessary application forms, created a webpage, and conducted outreach to allow interested groups to participate in the lottery process. The lottery process will determine which organizations will advance to the permit process.
The application process allowed for “Qualified Organizations” as defined in Orange Municipal Code Chapter 8.13 and Resolution No. 11648 to submit an application, which was made available electronically on the City’swebsite in January 2026. At the conclusion of the application period, a total of 27 applications were received and reviewed to determine eligibility for the lottery. Staff considered all requirements outlined in Section 3 of Resolution No. 11648 and determined that a total of 25 qualified organizations should be recommended for inclusion in the lottery process (Attachment 2).
Two of the applications received were determined to not be included in the lottery process. The El Modena Football Booster Club submitted an application but is not included because the organization is affiliated with El Modena High School which is automatically receiving a permit covering all of their school organizations. Two separate applications were received from organizations deemed to be affiliated with each other, one from the Orange Antlers #1475 and the other from the Orange Elks Lodge #1475. Consistent with last year’sprocess and Resolution 11648, these organizations were given the opportunity to combine their applications into a single cooperative entry in-lieu of both applications being disqualified - which was accepted by both organizations.
A maximum number of twelve permits can be issued to Qualified Organizations, nine being issued to Qualified Organizations selected randomly from an eligible pool of lottery entrants and the remaining three permits being designated for El Modena High School, Orange High School, and Richland Continuation High School. Staff coordinated with the administrations of each High School to determine interest in pursuing a permit for the sale of Safe and Sane Fireworks. All of the High Schools indicated they would pursue a permit as allotted. It should be noted that the nine randomly selected organizations will be allotted a permit for the current and following (two-year) program years, then will become ineligible to participate in the process for the following two program years thereafter (two years on, two years off). The next lottery process would therefore be conducted in 2028.
Per Resolution No. 11648, it is recommended that an additional number of applicants be selected randomly to serve as “alternates”in the event that one or more of the initial nine selected applicants fails to obtain a permit. As such, it is recommended that six alternates be selected. These additional applicants shall be considered for a permit in the order they were drawn.
Applicants selected in the lottery will be contacted by the Orange Fire Department to begin the process to secure all necessary approvals to receive their permit for 2026 (Phase II).
7. ATTACHMENTS
· Attachment 1 - Resolution No. 11648
· Attachment 2 - List of Qualified Organizations
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Agenda Item
Orange City Council
Item #: 8.1. 2/24/2026 File #: 26-0063
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Leslie Hardy, Community and Library Services Director
1. SUBJECT
Lottery selection for permits to sell safe and sane fireworks.
2. SUMMARY
On December 9, 2025, the Orange City Council adopted Resolution No. 11648, regarding updated rules and regulations for the number of permits, application process and lottery process to sell safe and sane fireworks pursuant to Orange Municipal Code Chapter 8.13. An eligibility pool has been created from a compiled list of qualified applicant organizations as defined in Resolution No. 11648, and a lottery drawing can now be conducted wherein presumptive permittees are chosen via random selection for continuance in the permit process.
3. RECOMMENDED ACTION
Conduct a lottery via random selection process at this Council Meeting, record the results, and provide notification to presumptive permittees regarding next steps in the Safe and Sane Fireworks sale permit process.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 3: Enhance Public Communication Strategy and Quality of Life
6. DISCUSSION AND BACKGROUND
On May 14, 2024, the City Council adopted Resolution No. 11542, submitting to the voters a question on whether to permit the sale, possession, and use of Safe and Sane Fireworks. Assigned the letter designation “AA”by the Orange County Registrar of Voters, Measure AA was approved in November 2024. The Council adopted Resolution No. 11597, finalizing the lottery and permit process pertinent to the sale of Safe and Sane Fireworks within the City. Subsequently, on December 9, 2025, the City Council adopted Resolution No. 11648, which rescinded and replaced Resolution 11597 and established updated procedures and changes to the Safe and Sane Fireworks Program (Attachment 1). Changes to the process were primarily related to advancing the annual program schedule, creating a two-year permit process, revising the automatic permittee organizations and updating City of Orange Printed on 2/19/2026Page 1 of 2
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Item #: 8.1. 2/24/2026 File #: 26-0063
affiliated organization language.
Staff finalized necessary application forms, created a webpage, and conducted outreach to allow interested groups to participate in the lottery process. The lottery process will determine which organizations will advance to the permit process.
The application process allowed for “Qualified Organizations” as defined in Orange Municipal Code Chapter 8.13 and Resolution No. 11648 to submit an application, which was made available electronically on the City’swebsite in January 2026. At the conclusion of the application period, a total of 27 applications were received and reviewed to determine eligibility for the lottery. Staff considered all requirements outlined in Section 3 of Resolution No. 11648 and determined that a total of 25 qualified organizations should be recommended for inclusion in the lottery process (Attachment 2).
Two of the applications received were determined to not be included in the lottery process. The El Modena Football Booster Club submitted an application but is not included because the organization is affiliated with El Modena High School which is automatically receiving a permit covering all of their school organizations. Two separate applications were received from organizations deemed to be affiliated with each other, one from the Orange Antlers #1475 and the other from the Orange Elks Lodge #1475. Consistent with last year’sprocess and Resolution 11648, these organizations were given the opportunity to combine their applications into a single cooperative entry in-lieu of both applications being disqualified - which was accepted by both organizations.
A maximum number of twelve permits can be issued to Qualified Organizations, nine being issued to Qualified Organizations selected randomly from an eligible pool of lottery entrants and the remaining three permits being designated for El Modena High School, Orange High School, and Richland Continuation High School. Staff coordinated with the administrations of each High School to determine interest in pursuing a permit for the sale of Safe and Sane Fireworks. All of the High Schools indicated they would pursue a permit as allotted. It should be noted that the nine randomly selected organizations will be allotted a permit for the current and following (two-year) program years, then will become ineligible to participate in the process for the following two program years thereafter (two years on, two years off). The next lottery process would therefore be conducted in 2028.
Per Resolution No. 11648, it is recommended that an additional number of applicants be selected randomly to serve as “alternates”in the event that one or more of the initial nine selected applicants fails to obtain a permit. As such, it is recommended that six alternates be selected. These additional applicants shall be considered for a permit in the order they were drawn.
Applicants selected in the lottery will be contacted by the Orange Fire Department to begin the process to secure all necessary approvals to receive their permit for 2026 (Phase II).
7. ATTACHMENTS
· Attachment 1 - Resolution No. 11648
· Attachment 2 - List of Qualified Organizations
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RESOLUTION NO. 11648
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF ORANGE, CALIFORNIA, RESCINDING AND
REPLACING RESOLUTION NO. 11597 REGARDING
THE APPLICATION AND LOTTERY PROCESS TO
SELL" SAFE AND SANE" FIREWORKS PURSUANT TO
ORANGE MUNICIPAL CODE CHAPTER 8. 13.
WHEREAS, City of Orange voters approved Ordinance No. 10-24 allowing for the use, possessionand dischargeof" safe and sane" fireworks; and WHEREAS, Ordinance No. 10-24 repealed and replaced the then-existing Orange Municipal Code Chapter 8. 13; and
WHEREAS, Orange Municipal Code Chapter 8.13, as establishedby Ordinance No. 10- 24, provides that the City shall permit the sale, possession and discharge of " safe and sane" fireworks for private display within the City, in accordancewith rules and regulations adoptedby ordinance or resolution of the City Council, relating to the following: who may sell fireworks, the time periods in which they may be sold anddischarged,the location where they may be discharged and the manner in which they may be discharged, stored, disposedof etc., Permits which may be required relating to fireworks, and similar provisions to protect the public health, safety, and welfare; and
WHEREAS, the City Council desires to adopt this Resolution to rescind and replace Resolution No. 11597 and reestablish rules and regulations to sell Safe and Sane Fireworks.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE,
CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1:
Resolution No. 11597 is hereby rescinded and replaced upon the effective date of this resolution.
SECTION 2:
The City Manager is hereby authorized to implement this resolution pursuant to Orange Municipal Code Chapter 8. 13.
SECTION 3:
The maximum number of Permits issued to Qualified Organizations, shall be 12 Permits per two- year cycle
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A. Permits issued pursuant to Chapter 8.13 of the Orange Municipal Code and this Resolution to sell Safe and SaneFireworks shall be for a term of two-years.
B. Qualified Organizations that receive a Permit through the application and lottery processfurtherdescribedin SubsectionsD throughH of thisSectionshallbeprohibited fromparticipatingin theimmediateapplicationandlotteryprocessaftertheirtwo-year Permit cycle has completed.
C. Three of the maximum number of Permits shall be for Orange High School, El Modena High School, and Richland Continuation High School. The Permit for each high school shall incorporate all of the high school sports teams, affiliated civic groups, student groups, booster clubs, other school organizations, etc. Each high school shall be responsible for how the Permit is administered and utilized. None of the aforementioned high schools are required to complete an application for the lottery since each high school will automatically receive a Permit to sell Safe and Sane Fireworks. In the event that any of the threehigh schools electsto not participate in the sale of Safe and Sane Fireworks, then the Permit will be given to the Community Foundation for a one-year term. If after issuing the Community Foundation a forgone Permit an additional high school elects not to participate in the sale of Safe and Sane Fireworks, then the additional Permit will be included as an additional lottery Permit available to qualified organizations. However, Qualified Organizations receiving the additional Permit shall only be for a term of one-year.
D. All other Qualified Organizations interestedin receiving aPermit must file applications with the City Manager's Office or its designee beginning the first business day of January, continuing up to 5:30 p.m. on the last businessday in January of the same year, at which time the filing period for that year will be closed.
E. In drawing from the pool of Qualified Organizations that submitted completed applications, the City Manager's Office or its designeeshall conduct a lottery during a City Council meeting using some means of random selection. The first 9 applicants to be randomly selected shall be granted a Permit upon completion of all Permit application requirements. An additional number of applicants shall be randomly selected in the event that one or more of the initial 9 applicants fails to obtain a Permit.
Additional applicants shall be consideredfor a Permit in the order they were drawn.
F. In addition to the requirements of Orange Municipal Code Chapter 8.13, Qualified Organizations must be organized primarily for veterans, patriotic, welfare, civic betterment, religious, athletic, educational, youth development or charitable purposes; must have their principal and permanentmeeting place within the City; provide direct and regular community servicesandbenefits to the residentsof the City; and havebona fide memberswho eitherresidein theCity, areemployedin theCity, or areownersor operatorsof a businessor other establishmentlocated in the City. 2 379
G. QualifiedOrganizationsmayonly submitoneapplicationto be includedin the lottery for a Safe and Sane Fireworks Permit. If more than one application is submitted on behalf of any nonprofit organizationor educationalinstitution, including from their respectiveaffiliated organizations,the City shall disregardone or all of the applications at its sole discretion. Any attempt to transfer an application shall void that application and may preclude an applicant from participating in the lottery in future years.
H. On forms andapplications provided by the City, Qualified Organizations shall provide:
a. The proposedlocation of the fireworks stand.
b. The name, address and 24- hour telephone number of one or more responsible adults who will be in chargeof and responsible for the fireworks stand during the period fireworks aresold, displayed, or stored at such location. c. Written permission from the owner of record and/or lessorand/or management company of the property upon which said fireworks stand is proposed to be located.
d. Proof of the applicant' s statusas a Qualified Organization. e. Date when the applicant was organized and established. f. The namesand addressesof the officers, if any, of the applicant. g. The name, address, and California StateFire Marshal's license number of any wholesaler or distributor from whom the Qualified Organization proposes to purchase for resale.
h. The manner, method, and times regarding how the applicant proposes to sell Safe and Sane Fireworks.
i. A copy of the requisite retail salesPermit issuedby the Office of the California State Fire Marshal.
j. Copy of a City of Orangebusinesslicense.
k. Evidence of a temporary sales tax Permit from the California State Board of Equalization.
This shall be not be construed as to limit the City from requesting additional information to effectuate the intent and purposesof this Resolution and OrangeMunicipal Code Chapter 8.13.
SECTION 4:
Permitteesshall provide certificates of insuranceevidencing the following minimum limits with a California admitted carrier with a current A. M. Best's rating of no lessthan anA. 3 380
A. General Liability: $ 1,000,000 per occurrencefor bodily injury, personalinjury, and propertydamage. If CommercialGeneralLiability Insuranceor other form with a generalaggregatelimit is used,eitherthegeneralaggregatelimit shallapplyseparately to this project/location or the general aggregate limit shall be twice the required occurrence limit. The City of Orange its officers, elected or appointed officials, employees, agents and volunteers must be named as certificate holder and as additional insured by separateattachedendorsement.
B. Any deductibles, self-insured retentions, or similar forms of coverage limitations or modifications must be declaredto and approvedby the City.
C. Permitteeshall include all sub-Permitteesor subcontractors,if any, asinsured under its policies or shall furnish separatecertificates and endorsementsfor eachsub-Permittees or subcontractors. All coverage for sub- Permittees shall be subject to all of the requirements stated herein.
SECTION 5:
Permittees agree, as a condition of receiving a Permit, to protect, defend, indemnify, and hold harmless, the City, the City Council, the City's officers, electedor appointedofficials, employees,agents,andvolunteers from and againstany andall claims, damages,losses,expenses, judgments, demands, anddefensecosts, howevercaused, resultingfrom deathor injury and/or damageto property, arising directly or indirectly out of the obligations or operations undertaken by Permitteeby virtue of the Permit issuance, causedin whole or in part by any act or omission of the Permittee, any subcontractors, anyone directly or indirectly employed, volunteers, or anyone for whose acts any of them may be liable, including but not limited to, concurrentactive negligence, except where causedby the sole active negligenceor willful misconduct of the City.
In the event of aninjury, claim, lawsuit, or any other dispute, the Permittee will conduct all legaldefensesto thoseinjuries, claims, lawsuits, or anyotherdisputes, including thedefenseof the City if applicable, at its sole cost and expense, and at no cost or expenseto the City.
The City shall approve selection of Permittee's counsel. This defense and indemnity obligation shall apply to all claims and liability regardlessof whether any defensesand insurance policies are applicable. The policy limits do not act asa limitation upon the indemnification to be provided by Permittee.
SECTION 6:
Pursuantto Section12635.5 of the Health and SafetyCode, the City will requireeach applicant receiving a Permit to pay a feeto the City apro rata portion of the actual and reasonable coststhe City incurred that is related to any of the following:
1) Processingand issuing Permits.
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2) Inspection of fireworks stands.
3) Public education and awarenesscampaignsregarding the safeand responsible use of safe and sanefireworks, and the dangersand risks posed by the use of illegal fireworks.
4) Enforcing the provisions of the code of the City with respectto the sale and useof safe and sane fireworks, including extra personnel time and cleanup of the fireworks trash and debris. " Extra personnel time" meansemployee or contracted employee time that the City would not otherwise incur but for the sale and use of safe and sane fireworks.
5) Fire operation and suppression efforts that are directly related to safe and sane fireworks.
Costs shall be allocated among Permitteesin proportion to gross salesas shown on each Permittee's salesand usetax return for the applicable period.
The pro rata shareof costs shall not exceed7 percent of the gross salesof the fireworks sold in the City during the applicable period. The fee will be calculated annually and due September 2nd.
SECTION 7:
The City Council hereby determinesthat the adoptions of MeasureAA, Resolution 11593, this resolution, and Ordinance No. 01- 25 are exempt from review under the California Environmental Quality Act becauseallowing and regulating safe and sanefireworks salesin the City on the Fourth of July cannot be expectedto have a significant environmental effect because such sales already occur without compliance with law or regulation to ensurethe public health, safety and welfare, and therefore this project regulates existing activity for the protection of the environment and other public values rather than allowing wholly new activity. Therefore, these provisions of the State CEQA Guidelines apply: section 15061( b)( 3) — the " common sense" exception, section 15305— the categorical exemption for minor alterations to land use limitations, and section 15308 — the categorical exemption for actions by regulatory agenciesto protect the environment.
ADOPTED this 9th day of December 2025
Daniel R. Slater, Mayor, City of Orange
ST:
P e a Co eman, City Clerk, City of Orange
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APPROVED AS TO FORM:
Scabe
Nathalie Adouria , ity Attorney, City of Orange
STATE OF CALIFORNIA )
COUNTY OF ORANGE )
CITY OF ORANGE
I, PAMELA COLEMAN, City Clerk of theCity of Orange, California, do herebycertify that the foregoingResolutionwasduly andregularlyadoptedby theCity Councilof theCity of Orangeat a regular meeting thereof held on the 9th day of December, 2025 by the following vote:
AYES: COUNCILMEMBERS: Barrios, Dumitru, Tavoularis, Gutierrez, Gyllenhammer, Slater
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: Bilodeau
PamelaColeman, City Clerk, City of Orange
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Attachment 2
List of Qualified Organizations
List Number
Name of Organization(s)
1 McPherson Education Foundation
2* Orange Antlers #1475/Orange Elks Lodge #1475
3 St. Paul's Lutheran Church and School
4 Rest Ezzz Foundation
5 Santiago Canyon College Foundation
6 Young Life
7 The Hub OC
8 Friendly Center Inc
9 The Church of God of Prophecy Orange
10 Orange Plaza Rotary Club
11 American Legion Post 132
12 Homeless Intervention Services of Orange County
13 North Sunrise Little League
14 Cedar Tree Music and Performance
15 Father JJ Juba Council 4922 Knights of Columbus
16 Orange Lutheran High School
17 House of Mercy
18 Spirit and Truth Worship Center
19 Love Orange
20 L'arche Wavecrest
21 Journey to Hope Ministries
22 Greater Orange Community Arts Theater Foundation (GOCAT) 23 Outreach Warriors
24 Sycamore Elementary
25 La Veta Elementary PTA
*It should also be noted that proposed lottery entrant (s) number 2 above represent s combined applications for organizations that were deemed to be affiliated with the same nonprofit and/or educational institution. These applicants would have been independently considered Qualified Organizations if not for multiple affiliate status and we re therefore given the opportunity to combine their applications in lieu of having their applications disregarded. Each of these applying organizations accepted the offer to have their applications combined.
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Agenda Item
Orange City Council
Item #: 8.2. 2/24/2026 File #: 26-0090
TO: Honorable Mayor and Members of the City Council
FROM: Jarad Hildenbrand, City Manager
1. SUBJECT
Review of the Santiago Creek Commission Strategic Plan.
2. SUMMARY
On October 10, 2023, the Orange City Council adopted Ordinance No. 13-23, creating the Santiago Creek Commission. Established as an advisory body to the City Council, the Santiago Creek Commission has been charged with recommending projects in and along the Santiago Creek Area.
To achieve this task, the Santiago Creek Commission has developed a comprehensive strategic plan for the City Council’s consideration.
3. RECOMMENDED ACTION
Adopt the Santiago Creek Strategic Plan.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 3: Enhance Public Communication Strategy and Quality of Life.
Goal 5: Improve Infrastructure, Mobility, and Technology.
6. DISCUSSION AND BACKGROUND
The Santiago Creek Commission (SCC) was established as an advisory body to the City Council with a focus on providing general advice and recommendations on matters that include:
· Implementation of public projects in/along the Santiago Creek Area. · Implementation of the Santiago Creek Plans for the Santiago Creek Area. · Preservation/enhancement of public open space within the Santiago Creek Area. · Acquisition of private property when it becomes available. · Preservation and/or enhancement of the ecological, scenic, historical, and recreational resources of the Santiago Creek (excluding private property and parks). · Developing relationships with volunteer and non-profit organizations and public and private agencies interested in the Santiago Creek Area.
In lieu of providing intermittent recommendations on a as-needed basis, the SCC applied a proactive approach and developed a comprehensive set of recommendations via a strategic plan (Plan).
Understanding that projects for west Orange may be significantly different for projects in east Orange, the SCC separated the Santiago Creek (Creek) into three distinct segments for substantive City of Orange Printed on 2/19/2026Page 1 of 2
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Item #: 8.2. 2/24/2026 File #: 26-0090
Orange, the SCC separated the Santiago Creek (Creek) into three distinct segments for substantive discussions. The three segments include:
· Segment One: East Orange to Villa Park Road
· Segment Two: Villa Park Road to the 55 Freeway
· Segment Three: 55 Freeway to Hart Park
Each segment includes various project recommendations, a map with select projects identified, and an accompanying vision statement that underscores the general themes within the respective segments. Additionally, aside from a general project description, the SCC Plan identifies the following components within each recommendation:
· Priority scores to identify those projects that are critical and feasible and would immediately improve and promote Santiago Creek (1); projects that would improve and promote Santiago Creek but would require additional funding (2); and projects that would improve and promote Santiago Creek, but funding is not readily available (3). · Possible collaborations to identify community partners that can help achieve each project. · Funding strategies so the City may implement the projects and minimize or eliminate any budgetary impacts.
· Community benefits to detail how each project could support the Orange community.
Overall, the Plan represents the collective efforts of the SCC and community members that have participated in SCC meetings since they first began in April 2024. The recommendations reflect the duties and tasks that the Orange City Council have charged the SCC with administering, and pursuant to Orange Municipal Code Section 2.62.100, these recommendations are now being submitted in writing for the Orange City Council’s consideration.
7. ATTACHMENTS
· Draft Santiago Creek Commission Strategic Plan
City of Orange Printed on 2/19/2026Page 2 of 2
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386
Agenda Item
Orange City Council
Item #: 8.2. 2/24/2026 File #: 26-0090
TO: Honorable Mayor and Members of the City Council
FROM: Jarad Hildenbrand, City Manager
1. SUBJECT
Review of the Santiago Creek Commission Strategic Plan.
2. SUMMARY
On October 10, 2023, the Orange City Council adopted Ordinance No. 13-23, creating the Santiago Creek Commission. Established as an advisory body to the City Council, the Santiago Creek Commission has been charged with recommending projects in and along the Santiago Creek Area.
To achieve this task, the Santiago Creek Commission has developed a comprehensive strategic plan for the City Council’s consideration.
3. RECOMMENDED ACTION
Adopt the Santiago Creek Strategic Plan.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOALS
Goal 3: Enhance Public Communication Strategy and Quality of Life.
Goal 5: Improve Infrastructure, Mobility, and Technology.
6. DISCUSSION AND BACKGROUND
The Santiago Creek Commission (SCC) was established as an advisory body to the City Council with a focus on providing general advice and recommendations on matters that include:
· Implementation of public projects in/along the Santiago Creek Area. · Implementation of the Santiago Creek Plans for the Santiago Creek Area. · Preservation/enhancement of public open space within the Santiago Creek Area. · Acquisition of private property when it becomes available. · Preservation and/or enhancement of the ecological, scenic, historical, and recreational resources of the Santiago Creek (excluding private property and parks). · Developing relationships with volunteer and non-profit organizations and public and private agencies interested in the Santiago Creek Area.
In lieu of providing intermittent recommendations on a as-needed basis, the SCC applied a proactive approach and developed a comprehensive set of recommendations via a strategic plan (Plan).
Understanding that projects for west Orange may be significantly different for projects in east Orange, the SCC separated the Santiago Creek (Creek) into three distinct segments for substantive City of Orange Printed on 2/19/2026Page 1 of 2
powered by Legistar™
387
Item #: 8.2. 2/24/2026 File #: 26-0090
Orange, the SCC separated the Santiago Creek (Creek) into three distinct segments for substantive discussions. The three segments include:
· Segment One: East Orange to Villa Park Road
· Segment Two: Villa Park Road to the 55 Freeway
· Segment Three: 55 Freeway to Hart Park
Each segment includes various project recommendations, a map with select projects identified, and an accompanying vision statement that underscores the general themes within the respective segments. Additionally, aside from a general project description, the SCC Plan identifies the following components within each recommendation:
· Priority scores to identify those projects that are critical and feasible and would immediately improve and promote Santiago Creek (1); projects that would improve and promote Santiago Creek but would require additional funding (2); and projects that would improve and promote Santiago Creek, but funding is not readily available (3). · Possible collaborations to identify community partners that can help achieve each project. · Funding strategies so the City may implement the projects and minimize or eliminate any budgetary impacts.
· Community benefits to detail how each project could support the Orange community.
Overall, the Plan represents the collective efforts of the SCC and community members that have participated in SCC meetings since they first began in April 2024. The recommendations reflect the duties and tasks that the Orange City Council have charged the SCC with administering, and pursuant to Orange Municipal Code Section 2.62.100, these recommendations are now being submitted in writing for the Orange City Council’s consideration.
7. ATTACHMENTS
· Draft Santiago Creek Commission Strategic Plan
City of Orange Printed on 2/19/2026Page 2 of 2
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388
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Assistant Library Director
Amy Harpster
2/9/2026
84389