Pinole City Council
January 21, 2025

WASTEWATER CAPACITY CHARGE
City of Pinole Wastewater Capacity Charge
January 2025 Final Draft Report
12 ALTERNATE SCHEDULE FOR NONRESIDENTIAL
The wastewater capacity charge may alternatively be based on the size of new or upsized water meters installed for interior fixtures, which drain only to the wastewater system (i.e. meters which do not serve irrigation or fire suppression systems). Table 10 gives the charge for meters based on the EDU charge of $9,564.19 for a 1-inch meter which is standard for a single-family home. The charge for a meter of given size is the EDU charge multiplied by the equivalency factor for that meter, which is the meter’s factor divided by 2.5, the factor for a 1-inch meter.

Table 10: Alternate Water Meter Charges for Nonresidential Size of Meter Factor
Equivalency
Factor1 Charge per Meter Size
5/8 inch 1 0.4 $3,825.67
1 inch1 2.5 1 $9,564.19
1-1/2" 5 2 $19,128.37
2" 8 3.2 $30,605.40
3" 16 6.4 $61,210.79
4" 25 10 $95,641.87
6" 50 20 $191,283.73
8" 80 32 $306,053.97
10" 115 46 $439,952.59
12" 215 86 $822,520.05
Source: American Water Works Association; Tables 11.4a and 11.4b

COMPLIANCE REQUIREMENTS FOR CAPACITY CHARGES, AUDIT PROVISIONS Capacity charges collected pursuant to Government Code Section 66013 must meet similar accounting, reporting, and public notice requirements as impact fees adopted pursuant to Section 66001 (refer to the annual reporting requirements described in Government Code Section 66006). Legal challenges to capacity charges must be brought pursuant to Section 66022. Pursuant to Section 60023, any person may request an audit to determine whether the capacity charge exceeds the amount reasonably necessary to cover the cost of the public facility for which the charge is imposed. If a person makes that request, the City may retain an independent auditor to conduct an audit to determine whether the charge is reasonable but is not required to conduct the audit if an audit has been performed for the same charge within the previous 12 months. To the extent that the audit determines that the amount of the charge does not meet the requirement that the charge not exceed the amount reasonably necessary to cover the cost of the public facility, the City shall adjust the charge accordingly.

Attachment D
Development Impact Fee Comparisons
Staff conducted research on development impact fees (DIF) in Contra Costa jurisdictions, focusing on cities with straightforward fee structures. To ensure consistent and reliable comparisons, the analysis avoided highly project- or city-specific assumptions. The jurisdictions included in the study were Antioch, Brentwood, Hercules, Lafayette, Moraga, and Richmond.

The research examined:
• Last DIF Updates: When each jurisdiction last updated their fees through a nexus study. • Example Projects: Fees for six sample developments:
o A 2,000 SF single-family home.
o A 33-unit apartment complex (average unit size: 800 SF). o A 2,000 SF food-service commercial building on 0.2 acres. o A 15,000 SF non-food service commercial building on 0.5 acres. o A 20,000 SF office building on 0.5 acres.
o A 50,000 SF industrial building on 3 acres.

The findings were used to compare Pinole’s current and proposed DIF with those of the other jurisdictions. A summary of these comparisons is provided in the graphs below; each jurisdiction’s current DIF follows.

Attachment D
Example Project Comparison Graphs
$5,517 $18,597 $22,594
30,277
$44,417
$47,759 $53,554 $56,287
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Antioch Hercules Pinole
Existing
Pinole
Proposed
Lafayette Richmond Brentwood Moraga
Example: 2,000 SF Single Family Home
Development Impact Fees
Jurisdiction
$115,362
$398,661 $418,613 $448,503
$657,129
$795,588
$1,063,441$1,170,840
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
Antioch Pinole
Existing
Pinole
Proposed
Hercules Richmond Moraga Brentwood Lafayette
Example; 33 Unit Apartment Complex (average unit size
800 sf)
Development Impact Fees
Jurisdiction
$-
$618
$18,763 $21,620
$30,111
$31,040
$59,086 $59,544
$-
$20,000.00
$40,000.00
$60,000.00
$80,000.00
Pinole
Existing
Antioch Brentwood Hercules Richmond Pinole
Proposed
Layfayette Moraga
Example: 2,000 SF Food-Service Commercial Building
on 0.2 acres
Development Impact Fees
Jurisdiction

Attachment D
$4,635 $69,000 $85,865 $87,465
$104,400 $140,726
$162,150
$225,833
$-
$50,000
$100,000
$150,000
$200,000
$250,000
Antioch Pinole
Proposed
Layfayette Moraga Pinole
Existing
Brentwood Hercules Richmond
Example: 15,000 SF Non-Food Service Commercial
building on 0.5 acre
Development Impact Fees
Jurisdiction
$6,200 $32,000 $52,040
$84,450
$127,800
$179,800
$214,075 $226,588
$-
$50,000
$100,000
$150,000
$200,000
$250,000
Antioch Layfayette Moraga Pinole
Existing
Pinole
Proposed
Hercules Richmond Brentwood
Example: 20,000 SF Office building on 0.5 acre
Development Impact Fees
Jurisdiction
$15,500
$105,000
$234,500
$321,618 $365,245
$422,500 $435,500
$-
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
Antioch Layfayette Pinole
Existing
Richmond Brentwood Pinole
Proposed
Hercules Moraga
Example: 50,000 SF Industrial building on 3 acre
Development Impact Fees
Jurisdiction

Attachment D
Selected Contra Costa Jurisdiction’s Development
Impact Fees
Antioch
Population: 117,096 Last DIF Update: 6/24/14

Attachment D
Brentwood
Population: 65,126 Last DIF Update: 2/9/21

Attachment D
Hercules
Population: 26,063 Last DIF Update: Transportation: March 2019; Fire: August 2018; Remainder: 2009

Attachment D

Attachment D
Lafayette
Population: 24,808 Last DIF Update: 7/1/08

Attachment D

Attachment D
Moraga
Population: 16,784 Last DIF Update: Comprehensive DIF
Update: April 2016; Lamorinda Fee: 2015

Attachment D

Attachment D
Richmond
Population: 114,106
Late DIF Update: 7/1/14

Attachment D

Attachment D

Attachment D

Attachment D – Pinole Development Impact Fee Update 2025 Abstracted Summary
The fiscal landscape in California, as it pertains to infrastructure financing, has changed significantly over the past few decades, reducing the ability of local governments to fund infrastructure. Three main trends have contributed to this:

1. Tax Limitation Measures: Starting with Proposition 13 in 1978 and continuing with Proposition 218 in 1996, these measures have limited the ability to raise taxes.

2. Declining Support for Bond Measures: There has been a decrease in public support for using bonds to finance infrastructure.

3. Reductions in Federal and State Assistance: There have been significant cuts in aid from federal and state governments.

As a result, many local governments have shifted the burden of funding infrastructure to new land development through development impact fees. Impact fees are one-time fees charged to the builder when issued an occupancy permit.

These fees, which require only a majority vote of the City Council for adoption, help ensure that new development pays for the infrastructure needed to maintain service levels.

In California, cities and counties use their constitutional police powers to levy impact mitigation fees.

Due to the widespread use of these fees, the state legislature enacted the Mitigation Fee Act in 1987.

This Act sets the rules for imposing and managing impact fee programs. When adopting an impact fee, local governments must:

1. Identify the purpose of the fee.

2. Identify the use of fee revenues.

3. Establish a reasonable relationship between the fee's use and the type of development paying the fee.

4. Establish a reasonable relationship between the need for the fee and the type of development paying the fee.

5. Establish a reasonable relationship between the amount of the fee and the cost of the facility attributable to the development paying the fee.

The Act's core principle is that impact fees should not exceed the actual cost of the public facilities required for the development. Furthermore, impact fees may not be used to build more facilities than is needed for new development to maintain the current level of service. Fee revenues must be used solely for their intended purpose, with specific annual and five-year accounting and reporting requirements. Additionally, the Act prohibits using impact fee revenues for staffing, operations, and/or maintenance of facilities.

Facility Standards “Level of Service” and “Deficiencies” Fees should be structured to gather enough funds to provide public facilities and infrastructure at a specified level of service. The general plan may outline the required size and service level for various types of public infrastructure.

Attachment D – Pinole Development Impact Fee Update 2025 New development should not be made to pay more than its fair share needed to provide the specified level of service. New development cannot be required to address “existing deficiencies” in service levels. Deficiencies are the difference between a desired level of service, or facility standard, and the existing level of service.

While a city cannot make new development pay for existing deficiencies, it can mandate that new development meets an acceptable level of service. When considering new fees, the city should decide if it wants to enhance the current level of service for public facilities. If so, the city must consider that improving the service level for existing development would mean funding from sources other than impact fee revenues. In that way, new development could be required to pay its share for a higher level of service than currently exists. An example where a slight deficiency occurs in Pinole is in Parks and Recreation:

GENERAL PLAN POLICY CS.3.4 states: The City shall strive to provide a minimum of 3 acres of land for a neighborhood or regional park for every 1,000 residents or 5.0 acres of dedicated open space for every 1,000 residents.

The Park Inventory in Chapter 6 of the nexus study shows that Pinole currently has 2.98 acres per 1,000 residential population so there is a very small “deficiency” of 0.02 acres per 1,000 residents. The park impact fee is based on the current standard—not the 3 acres per 1,000, which is the General Plan policy. This is an example of using the current level of service as the standard for calculating the impact fee.

A common scenario is where the General Plan does not have a numeric policy standard. This is the case for all other facility categories. The General Plan specifies operational policies such as the maximum 5-minute response time for police emergency calls and the 5-minute response time for 90 percent of fire calls. However, the General Plan does not specify the number of police stations or fire stations, or fire apparatus per capita needed to meet the operation policy standard. Therefore, the nexus study uses the current level of facilities (square foot area of facility space or dollar value of current assets per capita, depending on the facility) as the “de-facto” standard, which is then combined with the per capita cost of new facilities, which is proportionately assigned to both the new and the current populations. This method assures that new development is not paying more than what the current level of service of the given facility would warrant.

Analysis Based on Existing Standards
Maintaining Standards: This nexus study assumes as a guiding principle that existing facility standards or level of service will be maintained. This principle that existing levels of service will be maintained means that new development shall not compromise the quality of infrastructure and reduce services like fire, police, parks, sewer, water, and flood control. Impact fees need to be adjusted on a regular basis to reflect the costs of maintaining these standards while accommodating new growth.

Attachment D – Pinole Development Impact Fee Update 2025 Residential Impact Fees Based on Floor Area
AB-602 (Grayson 2021) mandates that cities implementing new or increased fees after January 1, 2022, should base impact fees for residential developments on the project’s floor area or justify why this method is unsuitable. Currently, Pinole charges a flat rate per unit for single-family homes and multi-family apartments. One goal of AB 602 is to promote smaller units by imposing higher fees on larger units, thereby encouraging affordable housing.

However, there are challenges. For example, development impacts are measured by the projected service population of the new development, but there isn’t data linking floor area to household occupancy. To address this, some cities are charging fees based on the number of bedrooms instead of floor area, which aligns with the intent of AB-602 to promote smaller units.

Overall, AB-602 seeks to standardize and increase transparency in impact fee calculations, which could help stabilize costs and provide more certainty for developers, potentially leading to more affordable housing options.
https://www.weareharris.com/resources/blog/examining-ab-602-impact-fees-and-the-future-ofdevelopment-in-california/ Specific Housing Unit Assumptions
• Residential Unit Mix: Assumes a mix of 375 multi-family units, 30 single-family units, and 30 accessory dwelling units (ADUs), totaling approximately 1,120 occupants by 2030. • Higher Density Development: Emphasizes more multifamily projects, reflecting current trends in Pinole and similar cities.

Population and Housing Growth
• Annual Growth Rate: The study assumes a 1% annual growth rate for population and housing from 2024 to 2030.
• Recent Trends: Despite a reported population decrease of about 1.7% per year between 2020 and 2024, the study anticipates a reversal of this trend due to new residential developments.
• Impact on Fees: The growth rate's effect on development fees is minimal because fees are primarily based on the current level of service provided by existing facilities.

Employment Growth
• Higher Growth Rate: The study assumes a 6.5% annual growth rate for employment, significantly higher than the 1% for residential growth. • Basis for Assumption: This projection is based on the non-residential floor area identified in the Three Corridors Specific Plan.

CITY COUNCIL
REPORT 10.B.

DATE: JANUARY 21, 2025
TO: MAYOR AND COUNCIL MEMBERS
FROM: DAVID HANHAM, PLANNING MANAGER

JUSTIN SHIU, CONSULTANT PLANNER
SUBJECT: FIRST READ OF PINOLE MUNICIPAL CODE AMENDMENTS RELATED TO HOUSING ELEMENT PROGRAMS NO. 4, 5 12 AND 13, FOCUSING ON

ACCESSORY DWELLING UNITS (ADUS), JUNIOR ACCESSORY DWELLING

UNITS (JADUS), AND UNIT AND LOT SPLIT PROJECTS PROPOSED UNDER SENATE BILL 9 (SB 9) AND REGULATORY CONSISTENCY

RECOMMENDATION
Conduct a first read and consider adoption of an ordinance (Attachment A) consisting of the Municipal Code Amendments (Attachment B) related to Housing Element Programs and schedule second read and adoption for February 4, 2025.

BACKGROUND
The City Council previously reviewed the first set of Municipal Code Amendments related to Housing Element Program Implementation on November 19, 2024. The Municipal Code Amendments presented under this item contain the second set of amendments which focus on accessory dwelling units (ADUs), junior accessory dwelling units (JADUs), and unit and lot split projects proposed under Senate Bill 9 (SB 9). A third set of amendments related to parking standards and administrative review processes is anticipated to be heard by the Council on February 4.

The 2023-2031 Housing Element contains programs identifying amendments to the municipal code in order to implement the Housing Element. The Housing Element identifies certain provisions in the existing zoning ordinance that need to be updated to be consistent with current text and regulatory procedures in State law related to housing legislation. Although the City abides by requirements under State and federal law where there are inconsistencies and provides information about current regulations when inquiries are received, proposed revisions to the municipal code and City policy documents would minimize potential confusion and provide greater clarity on requirements. Additionally, the adoption of proposed revisions would further the implementation of the Housing Element programs.

General zoning regulations are found in Title 17, Zoning of the Pinole Municipal Code (i.e., Zoning Code), where most regulations related to land use and zoning standards are contained.

Most revisions identified in the Housing Element programs relate to this portion of the Municipal Code.

ADU and JADU Projects

The Zoning Code sets standards and requirements for ADUs and JADUs under Chapter 17.70.

Local ADU and JADU regulations must comply with California Government Code Sections 66310 to 66342, which establish State standards for these units. Recent State updates have prioritized increasing ADU and JADU production. The proposed amendments to Chapter 17.70 align local ADU requirements with current State law and implement Housing Element Program 4: Facilitate ADU Production.

SB 9 Projects
Senate Bill 9 (SB 9), adopted in 2021 and later amended by SB 450 in 2024, established ministerial approval processes for lot splits and unit development in single-family residential zoning districts. These changes, codified under California Government Code Sections 65852.21 and 66411.7, enable the creation of up to two primary dwelling units on a singlefamily residential parcel and/or the division of one lot into two. State law standards supersede local zoning where conflicts arise, enhancing feasibility for these projects.

Ministerial review limits evaluation to objective standards, excluding subjective guidelines or discretionary decisions. Currently, the City lacks a dedicated Zoning Code chapter for SB 9 projects, relying instead on direct implementation of State law. The proposed amendments will establish a new Zoning Code chapter specifically addressing SB 9 standards and processes, providing greater clarity and consistency for local implementation.

Design Guidelines for Single-Family Residential Development The City of Pinole Residential Design Criteria and Guidelines, adopted in 2007, contains subjective guidelines for evaluating single-family residential development. However, SB 9 projects must be reviewed solely against objective standards, rendering subjective design guidelines inapplicable for these proposals. The proposed amendments ensure alignment with this requirement.

Planning Commission
The Planning Commission held a public hearing on December 9, 2024, to consider the proposed amendments and recommended that the City Council consider the adoption of the amendments (Attachment C).

REVIEW AND ANALYSIS
The proposed revisions in the Zoning Code and Specific Plan are provided in Attachment A, Exhibit A. These revisions address Housing Element Programs 4, 5, 12, and 13, with the relevant program text and portions impacted by the revisions highlighted in Attachment D.

Program text not covered in these proposed revisions was either addressed in the first set of revisions or will be included in future updates, which will be presented to the City Council at a later meeting. The target timeline for completing all revisions is within two years of the Housing Element’s adoption, by April 2025.

Proposed revisions are summarized below:

Chapter 17.70 Accessory Dwelling Units and Junior Accessory Dwelling Units

1. Updates to the existing chapter to align with recent changes in State law.

2. Revisions to incorporate recent State law updates for ADUs and to provide greater clarity.

3. Establishment of an “Operations” section to consolidate requirements for ADU use, previously located in the Declaration of Restrictions section.

4. Clarified details on mandated allowances for separate sales and conveyances of ADUs developed by qualified nonprofit corporation, as permitted under State law. Jurisdictions may adopt a local ordinance allowing separate sales and conveyances more generally through new provisions in Government Code 66342, but this is not a requirement and has not been included as a part of these update.

5. Updates to setback distance requirements to align with standards for accessory structures.

6. Revisions to exterior stair visibility requirements for improved clarity.

7. Replacement of subjective design language with objective standards, specifying colors and materials for attached ADUs.

Chapter 17.71 SB 9 Urban Lot Split and Unit Development

1. Introduction of a new chapter to incorporate SB 9 provisions based on State law.

2. Explanation of the permit process for SB 9 projects.

3. Clarification of “single-family residential zoning” as LDR and R-1 zones in Pinole, referencing their classification under Chapter 17.18.020, allowance for single-family residential in Chapter 17.20.020, and exclusion of multifamily residential.

4. Addition of front and structural setback distance requirements, drawing from existing standards in the Zoning Code for LDR and R-1 zones. A qualifier specifies these standards apply unless they physically preclude the units, consistent with SB 9.

5. Specification of a ministerial-only tree removal permit process for SB 9 projects.

6. Inclusion of references to new objective design standards, proposed for addition to Chapter 17.24.

Section 17.12.150 Comprehensive Design Review

1. Clarification that JADUs, like ADUs, are exempt from Comprehensive Design Review.

2. Removal of square footage text in the addition exception, as Administrative Design Review under 17.12.080 applies to all single-family additions regardless of size (e.g., less than or greater than 500 square feet). This edit reduces ambiguity and enhances consistency within the Zoning Code.

3. Inclusion of references to SB 9 units to ensure alignment with updated standards.

Section 17.24.040 Objective Design Standards for Single Family Districts

1. Incorporation of objective design standards based on existing subjective Residential Design Criteria and Guidelines for single-family residential districts. Since subjective guidelines can no longer be applied to ministerial reviews under SB 9, guidelines that could be converted to objective standards are proposed to maintain the intent of the original guidelines. Objective standards for SB 9 projects must be uniformly applicable to the underlying zoning district. To address this, a section for objective design standards for single-family residential districts was added to Chapter 17.24: Development Standards by Zoning District.

2. Presentation of objective design standards for consideration. While establishing these standards based on Residential Design Criteria and Guidelines is not mandatory, their inclusion would ensure alignment with existing design principles. If these standards are not adopted, SB 9 unit development would rely solely on the objective standards outlined in the new Chapter 17.71 and other applicable sections of the Zoning Code.

FISCAL IMPACT
There is no fiscal impact associated with adopting these municipal code amendments.

ATTACHMENTS
A. Ordinance
B. Exhibit A to Attachment A: Proposed Municipal Code Amendments - Compiled C. PC Resolution 24-09
D. Housing Element Programs Associated with Second Set Revisions

1 ORDINANCE NO. XXXX-XX
AN ORDINANCE OF THE CITY OF PINOLE AMENDING CHAPTERS 17.12, 17.24, AND 17.70 OF THE PINOLE MUNICIPAL CODE AND ADDING CHAPTER 17.71 TO THE PINOLE

MUNICIPAL CODE
WHEREAS, Pinole Municipal Code (“PMC”) Title 17 Zoning Code establishes general regulations on land uses and development standards within the City; and WHEREAS, the City of Pinole 2023-2031 Housing Element contains programs identifying various zoning ordinance amendments; and
WHEREAS, implementation of Housing Element programs requires amendments revising text in the PMC; and
WHEREAS, amendments to the municipal code are required for accessory dwelling unit and junior accessory dwelling unit regulations to reflect current State Law for these units under California Government Code Sections 66310 to 66342; and
WHEREAS, amendments to the municipal code are required to incorporate regulations and procedures for urban lot splits and unit development proposed under Senate Bill 9 (SB9) and reflect the provisions of California Government Code Sections Section 65852.21 and 66411.7; and WHEREAS, the City of Pinole Residential Design Criteria and Guidelines, adopted November 20, 2007, contains subjective guidelines for review of single-family residential development; and WHEREAS, a ministerial review process is required for the review of unit development proposed under SB 9 and subjective guidelines cannot be used to approve projects; and WHEREAS, it is desirable to maintain aspects of the Residential Design Criteria and Guidelines by creating objective design standards based on subjective guidelines where possible; and WHEREAS, objective standards would apply uniformly to the underlying single-family residential districts, which include R-1 and LDR, and thereby would be applicable to SB 9 unit development projects; and
WHEREAS, the proposed revisions to amend the Zoning Code are attached hereto as Exhibit A; and
WHEREAS, the Planning Commission held a duly noticed public hearing related to the proposed Zoning Code amendment on December 9, 2024; and

ATTACHMENT A

2 WHEREAS, the Planning Commission recommended adoption of the proposed amendments; and
WHEREAS, the City Council held a duly noticed public hearing related to the proposed Zoning Code amendment on January 21, 2025; and
WHEREAS, after close of the public hearing, the City Council considered all public comments received both before and during the public hearing, the presentation by city staff, the staff report, and all other pertinent documents regarding the proposed amendments; and NOW THEREFORE, BE IT RESOLVED, pursuant to the findings stated herein, that the City Council of the City of Pinole does ordain as follows:

Section 1. Recitals. The above recitals are true and correct and made a part of this Ordinance.

Section 2. Amendment of Municipal Code and Specific Plan. The Pinole Municipal Code is hereby amended with amendments to Chapters 17.12, 17.24, and 17.70 of the Pinole Municipal Code and addition of Chapter 17.71, as set forth in Exhibit A, attached hereto and incorporated herein.

Section 3. CEQA. Pursuant to Title 14 of the California Administrative Code, the City Council finds that this Ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) for the following reasons under Section 15061 (b)(3), it is not a project which has the potential for causing a significant effect on the environment;
Section 4. Severability. If any section, subsection, sentence, clause or phrase of this ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision will not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance and each of every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.

Section 5. Effective Date and Duration. This ordinance shall take effect thirty (30) days after its final adoption.

Section 6. Publication. The City Clerk is directed to cause this ordinance to be published in a manner required by law.

PASSED AND ADOPTED at a regular meeting of the Pinole City Council held on February 4, 2025, the City Council passed this ordinance by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

3 ABSTAIN: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

IN WITNESS of this action, I sign this document and affix the corporate seal of the City of Pinole on on February 4, 2025.
__________________
Cameron Sasai, Mayor
ATTEST:
______________________________
Heather Bell, City Clerk
APPROVED AS TO FORM:
______________________________
Eric S. Casher, City Attorney

ATTACHMENT B. MUNICIPAL CODE AMENDMENTS

1. Pinole Municipal Code Section 17.12.150 Comprehensive Design Review [Amendment]

2. Pinole Municipal Code Chapter 17.24 Development Standards by Zoning District [Amendment]

3. Pinole Municipal Code Chapter 17.70 Accessory Dwelling Units and Junior Accessory Dwelling Units [Amendment]

4. Pinole Municipal Code Chapter 17.71 SB9 Urban Lot Split and Unit Development [New Chapter]

1. Pinole Municipal Code Section 17.12.150 Comprehensive Design Review [Amendment]
Section 17.12.150 included (excerpt of Chapter 17.12 Entitlements).

Text to be removed shown in strikeout text.

Text to be added shown in bold and underline.

17.12.150 COMPREHENSIVE DESIGN REVIEW.

A. Purpose. The purpose of comprehensive design review is to provide a process for promoting the orderly and harmonious growth of the city, to encourage development in keeping with the desired character of the city, and to ensure physical and functional compatibility between uses. This comprehensive design review is intended to provide a process for consideration of development proposals to ensure that the design and layout of commercial, retail, industrial or institutional uses, or multi-family residential development will constitute suitable development and will not result in a detriment to the City of Pinole or to the environment.

B. Applicability. A comprehensive design review permit is required for the following items:

1. New single-family and multi-family residential development, except for unit development under Government Code section 65852.21, as amended and renumbered from time to time (also known as SB 9);

2. New non-residential development (e.g., commercial, office, industrial, public/quasi-public);

3. Additions to existing multi-family and non-residential structures equal to or greater than 500 square feet; and

4. Any item not listed in Section17.12.150.C, for which the Community Development Director determines that a comprehensive design review permit is required.

C. Exemptions. The following structures and activities are exempt from comprehensive design review. However, such structures may require additional permits, such as a building permit, and plan check to ensure compliance with adopted Building Code and related construction code standards and applicable Zoning Code provisions and public works encroachment permits.

1. Accessory dwelling units and junior accessory dwelling units, regardless of size.

2. Additions to a single-family home of less than 500 square feet when consistent with the City of Pinole Residential Design Criteria and Guidelines.

3. Additions to multi-family and non-residential structures less than five hundred (500) square feet in size.

4. Accessory structures consistent with the provisions of this title.

5. Installation of signs.

6. Repairs and maintenance to the site or existing structures that do not add to, enlarge, or expand the area occupied by the structure or the gross floor area of the structure.

7. Interior alterations that do not increase the gross floor area within the structure or change/expand the permitted use of the structure (e.g., tenant improvements).

8. Construction, alteration, or maintenance by a public utility or public agency of underground or overhead utilities intended to service existing or nearby approved developments (e.g., water, gas, electric or telecommunication supply or disposal systems, including wires, mains, drains, sewers, pipes, conduits, cables, fire-alarm boxes, police call boxes, traffic signals, hydrants, and similar facilities and equipment).

9. Alteration or maintenance of public park and recreation facilities.

10. Unit development under SB 9 (Government Code section 65852.21).

D. Approving Authority. The designated approving authority for comprehensive design review is the Planning Commission. Comprehensive design review approval is required prior to issuance of any ministerial building permits or site improvement plans and prior to or in conjunction with discretionary action of corresponding development applications (e.g., conditional use permit, variance). Comprehensive actions include, but are not limited to, new construction and wholesale redevelopment of existing sites.

E. Application Content. The application for a comprehensive design review shall be on a form prepared as prescribed by the Community Development Director.

F. Public Hearing/Notice. The city shall provide notice and a public hearing for continuation of the approval, modification, revocation or appeal of an application for a comprehensive design review in accordance with Section 17.10.050 (Public Hearing and Public Notice).

G. Approval Findings. A comprehensive design review permit or any modification thereto shall be granted only when the designated approving authority makes all of the following findings:

1. The proposed project is consistent with the objectives of the general plan and complies with applicable zoning regulations, planned development, master plan or specific plan provisions, improvement standards, and other applicable standards and regulations adopted by the city;

2. The proposed project will not create conflicts with vehicular, bicycle, or pedestrian transportation modes of circulation;

3. The site layout (orientation and placement of buildings and parking areas), as well as the landscaping, lighting, and other development features, are compatible with and complement the existing surrounding environment and ultimate character of the area under the general plan and applicable specific plans; and

4. Qualifying single-family residential, multi-family residential, and residential mixed-use projects shall comply with all relevant standards and guidelines in the city's currently adopted design guidelines for residential development.

A. Considerations. In conducting comprehensive design review, the designated approving authority shall consider the following:

1. Considerations relating to site layout, the orientation and location of building, signs, other structures, open spaces, landscaping, and other development features in relation to the physical characteristics, zoning, and land use of the site and surrounding properties.

2. Considerations relating to traffic, safety, and traffic congestion, including the effect of the development plan on traffic conditions on abutting streets, the layout of the site with respect to locations and dimensions of vehicular and pedestrian entrances, exits, driveways, and walkways, the adequacy of off-street parking facilities to prevent traffic congestion, and the circulation patterns within the boundaries of the development.

3. Considerations necessary to ensure that the proposed development is consistent with the general plan and all applicable specific plans or other city plans, including, but not limited to, the density of residential units.

4. Considerations relating to the availability of city services, including, but not limited to, water, sewer, drainage, police and fire, and whether such services are adequate based upon city standards.

B. Conditions/Guarantees. The approving authority may impose conditions and/or require guarantees for comprehensive design review to ensure compliance with this section and other applicable provisions of this title and to prevent adverse or detrimental impact to the surrounding neighborhood.

C. Permit Issuance. The final action on comprehensive design review by the approving authority shall constitute approval of the permit. Such permit shall only become valid after the designated appeal period has been completed, per the provisions as set forth in Section 17.10.080 (Effective Date).

D. Appeals. Appeal of the approving authority's action on the request for a comprehensive design review permit shall be made in accordance with the procedures specified in Section 17.10.070 (Appeals).

E. Expiration. All approved comprehensive design review permits are subject to the provisions set forth in Section

17.10.100 (Permit Time Limits, Extensions and Expiration). (Ord. 2020-01, § 3, 2020: Ord. 2012-07, § 3, 2012: Ord. 2010-02 § 1 (part), 2010)

2. Pinole Municipal Code Chapter 17.24 Development Standards by Zoning District [Amendment]
Full Chapter included.

Text to be removed shown in strikeout text.

Text to be added shown in bold and underline.

CHAPTER 17.24

DEVELOPMENT STANDARDS BY ZONING DISTRICT
Sections:

17.24.010 Purpose.

17.24.020 Development standards.

17.24.030 Additional standards for multi-family zoning districts.

17.24.040 Objective design standards for single family zoning districts.

17.24.010 PURPOSE.

The purpose of this chapter is to establish development standards for lot area, allowed density, building setbacks, height, and lot coverage as appropriate for each of the city's base zoning districts as listed in Table 17.18.020-1 (Zoning Districts).

These standards, along with other development standards (e.g., fences and walls, parking, sign standards) listed in Article III (Site Planning Standards) are intended to assist property owners and project designers in understanding the city's minimum requirements and expectations for high quality development. (Ord. 2010-02 § 1 (part), 2010)

17.24.020 DEVELOPMENT STANDARDS.

Table 17.24.020-1 (Development Standards for City of Pinole Base Zoning Districts) includes lot area, allowed density, building setbacks, height, and lot coverage requirements for each of the city's base zoning districts. Additional site planning requirements (e.g., landscaping, lighting) are listed in Article III (Site Planning Standards). Development within the city is also subject to compliance with all adopted Uniform Building and Fire Codes. Qualifying single family residential, multi-family residential, and residential mixed-use projects shall comply with all relevant standards and guidelines in the city's currently adopted design guidelines. Zoning district names for the zoning district symbols used in the table are as follows:

LDR = Low Density Residential Zoning District
R-1 = Suburban Residential Zoning District
R-2 = Medium Density Zoning District
R-3 = High Density Zoning District
R-4 = Very High Density Zoning District
R = Rural Zoning District
RC = Regional Commercial Zoning District
RMU = Residential Mixed Use Zoning District
CMU = Commercial Mixed Use Zoning District
OPMU = Office Professional Mixed Use Zoning District
OIMU = Office Industrial Mixed Use Zoning District
OS = Open Space Zoning District
PR = Parks and Recreation Zoning District
PQI = Public Quasi-Public Institutional Zoning District SPBCA = San Pablo Bay Conservation Zoning District
TABLE 17.24.020-1:

DEVELOPMENT STANDARDS FOR CITY OF PINOLE BASE ZONING DISTRICTS Development
Standard\Zoning District LDR R-1 R-2 R-3 R-4 R RC RMU CMU OPMU OIMU OS PR PQI SPBCA Lot Area ( minimum square
footage/unit) 43,560 6,000 3,000 1,500 N/A 5 ac.(1) 5,000 N/A N/A N/A N/A N/A N/A N/A N/A Allowed Density (units per acre)
Minimum Density 0.21 1.1 10.1 20.1 35.1 N/A N/A 20.1 20.1 20.1 N/A N/A N/A N/A N/A Maximum Density 1.0 10.0 20.0 35.0 50.0 0.2 N/A 35.0 30.0 30.0 N/A N/A N/A N/A N/A Setback (minimum distance between structure and property line in feet) Front Yard 20 20 0 0 0 30 0 0 0 0 0 0 10 0 10
Side Yard 10 (2) 5 (3) 5 5 5 15 0 0 0 10 10 0 10 10 10
Side Yard for Second
Story 15 12 10 5 5 15 0 0 0 10 10 0 10 10 10

Street Side Yard 15 (4)
10 (4) 10 10 10 20 0 10 10 10 10 0 10 0 10
Rear Yard 20 (4) 20
(4) 15 15(5)
15 (5) 30 0
15 (5)
15 (5) 15 (5) 15 (5) 0 10 10 10
Distance Between Buildings (minimum feet)
For Dwelling Purposes 6 6 6 6 0 6 0 0 0 0 0 N/A N/A N/A N/A Accessory Buildings (6) 6 6 3 3 3 6 6 6 6 6 6 6 6 6 6
Building Height (maximum feet)
Primary Buildings 35 35 35 35 50 35 50 50 50 50 50 35 35 40 35 Accessory Buildings 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 Floor Area Ratio
(maximum ratio of building
to lot square footage)
N/A N/A N/A N/A N/A N/A 0.40 N/A N/A N/A N/A N/A N/A N/A N/A Notes:
(1) The approving authority may approve lots less than five (5) acres in size and reduced setbacks for clustering of units to preserve open space or other resources as part of comprehensive design review. (2) The combined side yard setbacks shall not be less than twenty (20) feet. (3) Within required side yards, at least one (1) side shall provide four (4) feet of unobstructed surface to allow unobstructed access between the front and rear yards.
(4) Listed setback distance or twenty percent (20%) of lot width in side yard and twenty percent (20%) of lot depth in rear yard, whichever is less.
(5) If abutting non-residential property, there is no minimum rear yard setback. (6) See additional development standards for accessory structures in Chapter17.30. (Ord. 2010-02 § 1 (part), 2010)

17.24.030 ADDITIONAL STANDARDS FOR MULTI-FAMILY ZONING DISTRICTS.

In addition to the development standards listed in Table 17.24.020-1, the following development standards apply to multifamily residential development in the Medium Density Residential (R-2), High Density Residential (R-3), Very High Density Residential (R-4), and mixed use zoning districts including residential uses.

A. Open Space Requirements for Multi-Family Residential.

1. Multi-family, attached dwelling units that are all or partially located at ground level shall have not less than eighty (80) square feet of private open space.

2. Not less than twenty percent (20%) of the total lot area of multiple-family residential projects shall be provided as improved, private or semi-private useable open space and not less than three hundred (300) square feet of improved useable open space per dwelling unit shall be provided in each multi-family development project.

3. Not less than thirty percent (30%) of the total lot area of multiple-family residential projects shall be provided as improved, landscaped open space.

B. Screening and Vegetation for Multi-Family Residential. Projects within multi-family residential zoning districts shall include vegetative screening at the project perimeter to ensure the privacy of existing and future homeowners. The city shall determine the location and extent of vegetative screening required based on site conditions and surrounding existing and planned land uses. Where required, such vegetative screening shall be maintained in a healthy and vigorous condition.

Areas used as vegetative screening shall not be counted as open space. (Ord. 2010-02 § 1 (part), 2010)

17.24.040 OBJECTIVE DESIGN STANDARDS FOR SINGLE FAMILY ZONING DISTRICTS.

In addition to the development standards listed in Table 17.24.020-1, the following objective development standards apply to applicable residential development in single family residential zoning districts.

A. Applicability

1. The project consists of constructing a primary dwelling unit, such as single family residence or a duplex, or modifying an existing structure to create a primary dwelling unit; and

2. The project is located in the Low Density Residential (LDR) or Single Family Residential (R-1) zoning district.

B. Design Standards

1. Units shall be designed with an entry feature or outdoor living area, such as a porch or courtyard, when located on a lot adjacent to the street, and include a path to the sidewalk/street.

2. Projects resulting in the creation of a two-story dwelling shall step back the second floor wall plane at least five (5) feet from the first floor wall plane on at least two sides. On corner lots, the second floor wall plane shall be stepped back at least five (5) feet from the first floor wall plane along street frontages.

3. Two-story designs shall provide visual separation between the two stories by incorporating projections, reliefs, accents, roof forms, decks, balconies, and/or variation in materials between the two stories.

4. Unit design shall minimize the appearance of long blank walls by including design features on each building face at intervals of no less than fifteen (15) feet. Such features may include changes in the wall plane, inclusion of different materials, windows, doors, openings, and/or architectural detailing.

5. Consistent materials and colors shall be applied for each type of architectural detail, including door trim, window trim, window sills, shutters, and fascia, when such architectural details are located in more than one location on the building facade. For example, when white, wood window trim is used at one location on the building, any window trim used at other locations shall be white, wood window trim.

6. Windows shall be offset so that they are not lined up with windows of adjoining structures, or windows shall include non-transparent glazing to obscure direct views into adjoining structures.

3. Pinole Municipal Code Chapter 17.70 Accessory Dwelling Units and Junior Accessory Dwelling Units [Amendment]
Full Chapter included.

Text to be removed shown in strikeout text.

Text to be added shown in bold and underline.

CHAPTER 17.70

ACCESSORY DWELLING UNITS AND JUNIOR ACCESSORY DWELLING UNITS Sections:

17.70.010 Purpose.

17.70.020 Applicability.

17.70.030 Permit requirements.

17.70.040 Performance standards.

17.70.050 Declaration of restrictions

17.70.060 Affordable housing incentive.

17.70.010 PURPOSE.

The purpose of this chapter is to establish procedures for reviewing the placement of accessory dwelling units and junior accessory dwelling units in residential and mixed-use zoning districts, address the state's accessory dwelling unit (ADU) and junior accessory dwelling unit (JADU) requirements, as set forth in California Government Code § 66310 to 6634265852.2 and 65852.22 and implement the general plan policies which encourage more affordable rental housing, while maintaining the quality of existing residential neighborhoods.
(Ord. 2020-04 § 2, 2020; Ord. 2017-08 § 2 (part), 2017; Ord. 2010-02 § 1 (part), 2010)

17.70.020 APPLICABILITY.

The regulations and standards contained in this chapter shall apply to all new accessory dwelling units (ADU) and junior accessory dwelling units (JADU) in the city, including previously unpermitted ADUs that are legalized, and shall be in addition to any other development standards and regulations contained elsewhere within Title 17 Zoning Code that apply to primary dwelling units (e.g., lighting). ADUs are permitted on all lots zoned to allow single-family and multi-family residences that have an existing or proposed single-family or multi-family residence. JADUs are permitted on lots with an existing or proposed single-family residence. For the purposes of this title, ADUs and JADUs are not considered accessory structures as otherwise regulated in Chapter 17.30.
(Ord. 2020-04 § 2, 2020; Ord. 2017-08 § 2 (part), 2017; Ord. 2010-02 § 1 (part), 2010)

17.70.30 PERMIT REQUIREMENTS.

A. Application Review

1. All accessory dwelling units (ADU) and junior accessory dwelling units (JADU) require review and approval through the plan check process, pursuant to the requirements of Section 17.12.030 (Plan Check). a. Applications for ADUs and JADUs shall be ministerially reviewed by the City within sixty (60) days from the date a completed application is received if there is an existing single-family or multifamily dwelling on the lotcomplete application is submitted.
b. If the permit application to create an ADU or JADU is submitted with a permit application to create a new singlefamily dwelling on the lot, the City may delay acting on the application for the ADU or JADU until the City acts on the permit application to create the new single-family dwelling. The application to create the ADU or JADU shall still be considered ministerially without discretionary review or a hearing.

B. All plan check applications for ADUs and JADUs shall include, but are not limited to, the following:

1. A completed building permit application;

2. Proof of ownership of the property or permission from the property owner;

3. SiteA plot plan showing the location of any and all easements, structures, parking for both the primary and accessory dwelling units, other improvements, and trees over four (4) inches in diameter;

4. Floor plan showing the square footage of the structure, the floor area, the lot, and the percentage of the lot area covered by the foundations of the accessory and primary dwelling units;

5. Elevations showing all sides of the ADU or changes being made to the single-family home in order to add an ADU or JADU;

6. Colors and materials board, or aesthetic details noted in plan sets;

7. Such other information which the Community Development Director determines is necessary to evaluate the proposed project.

8. Completed declaration of restrictions, including a notarized property owner signature on the form as

required in Section17.70.050, signed and ready for recordation.

9. Address assignment application for the proposed unit.

10. Permit applications required by the Public Works Department to serve the proposed unit, which may include but is not limited to sewer lateral and encroachment permits. (Ord. 2020-04 § 2, 2020; Ord. 2017-08 § 2 (part), 2017; Ord. 2010-02 § 1 (part), 2010)

17.70.040 PERFORMANCE STANDARDS.

An accessory dwelling unit (ADU) or junior accessory dwelling unit (JADU) shall meet all of the applicable zoning regulations for the specific zoning district in which it is located, except as provided in this chapter. An ADU or JADU that conforms to the requirements of this chapter, and any other applicable development standards and regulations contained in Title 17 Zoning Code, shall not be considered to exceed the allowable density for the lot upon which such unit is proposed to be established and shall be deemed a residential use which is consistent with the existing general plan and zoning designations for the lot. Correction of nonconforming zoning conditions shall not be required as a condition for ministerial approval of a permit application for the creation of an ADU or JADU.:

A. Unit Types and FacilitiesDefinitions.

1. Accessory Dwelling Unit (ADU)
a. An ADU shall consist of complete independent living facilities including permanent facilities for sleeping, living, eating, cooking, and sanitation. The ADU shall include independent heating and cooling controls, its own kitchen and sink and standard built-in or freestanding appliances, its own bathroom with bathtub or shower, and a separate exterior entrance. b. The ADU may either be within an existing structure, attached to the primary dwelling, or detached from the primary dwelling.

2. Junior Accessory Dwelling Unit (JADU). A JADU shall consist of a unit that is no more than five hundred (500) square feet in size and contained entirely within a single-family residence. A JADU may include separate sanitation facilities, or may share sanitation facilities with the existing structure.

B. ADUs and JADUS may not be sold separately from the primary residential dwelling on the lot.

C. Maximum Number of ADUs and JADUs. Any of the following shall be permitted in a residential or mixed-use zone:

1. One (1) ADU and one (1)or JADU per lot with a proposed or existing single-family dwelling.

2. One (1) detached, new construction, ADU that does not exceed four (4) foot side and rear yard setbacks for a lot with a proposed or existing single-family dwelling. The proposal may be combined with a JADU, for one (1) ADU and one (1) JADU on the single-family lot. The ADU shall not exceed eight hundred (800) square feet and sixteen (16) feet high.

23. Within existing multi-family dwelling structures, a number of ADUs based onat least one (1) ADU and not more than twenty-five percent (25%) of the number of existing multi-family dwelling units, with a minimum of one (1) ADU allowed, if all of the following apply:
a. The unit is within the portions of existing multi-family dwelling structures that are not used as livable space, including, but not limited to, storage rooms, boiler rooms, passageways, attics, basements, or garages. b. The unit complies with state building standards for dwellings.

34. Not more than two (2) ADUs Multiple ADUs, not to exceed either of the numbers established below, that are located on a lot that has an existing multi- family dwelling, but are detached from that multi-family dwelling and are subject to a height limits and of sixteen (16) feet and four (4) foot rear and side yard setbacks under this Chapter. a. On a lot with an existing multifamily dwelling, not more than eight detached accessory dwelling units.

However, the number of accessory dwelling units allowable pursuant to this clause shall not exceed the number of existing units on the lot; or
b. On a lot with a proposed multifamily dwelling, not more than two detached accessory dwelling units.

D. Development Standards and Requirements for Accessory Dwelling Units.

1. Maximum floor area for attached or detached ADUs.
a. Fifty percent (50%) of the existing living area of the primary dwelling unit, with a limit of eight hundred fifty (850) square feet for an ADU with one or fewer bedrooms or one thousand (1,000) square feet for an ADU with two (2) or more bedrooms.
b. Where fifty percent (50%) of the existing living area does not allow for an eight hundred (800) square foot ADU, an ADU of up to eight hundred (800) square feet may be allowed;

2. Setbacks.
a. New ADUs shall have a minimum setback of four (4) feet from the side and rear property lines, and setbacks shall be sufficient for fire and safety;
b3. No setback shall be required for an existing legal structure that is converted to an ADU;

c4. Detached ADUs shall not be less than six (6)eight (8) feet from the primary dwelling unit, except if this would prohibit the construction of an eight hundred (800) square foot ADU with four (4) foot rear and side setbacks; d. No setback shall be required for an ADU constructed within an existing legal structure, or in the same location and to the dimensions of an existing legal structure. Such ADUs may include an expansion of not more than one hundred fifty (150) square feet beyond the same physical dimensions as the existing accessory structure.

An expansion beyond the physical dimensions of the existing accessory structure shall be limited to accommodating ingress and egress.

3. Height
a. Detach ADUs shall not exceed sixteen (16) feet in height, unless the ADU is located within an existing structure. i. The maximum allowable height shall be eighteen (18) feet if the lot is within a half-mile walking distance of a transit stop or high quality transit corridor, as defined in Section 21155 of the Public Resources Code;
ii. The maximum allowable height shall be eighteen (18) feet if the detached ADU is located on a lot with a multistory, multifamily building.
b. Attached ADUs shall not exceed the maximum allowable height of the zoning district;.

4. Exterior Access and Design.
a. The ADU shall have its own exterior access, and no.
b. Any exterior stairs to a second story attached ADU shall be located behind the residence. If location behind the residence is not possible due to site constraints, the project shall include at least one of the following features to obscure visibility shall be visible from the public right-of-way; incorporate screening into the architectural design; addition of trees or landscaping as screening; and/or use of colors on the stairway that match those used on the structure where the stairs are attached to minimize contrasts. c. Attached ADUs shall use exterior colors, materials, and architectural details that match the appearance of existing corresponding features on the residence.
d. No passageway shall be required in conjunction with the construction of an ADU. A passageway means a pathway that is unobstructed clear to the sky and extends from a street to one entrance of the ADU.;

5. Location. Detached ADUs shall be constructed at the rear or side of an existing single-family residence, and otherwise appear secondary in nature, and not be constructed in front of the primary dwelling unit;.

6. The ADU should be compatible with the primary dwelling unit, and should use similar style, materials, and colors;

7. No passageway shall be required in conjunction with the construction of an ADU;

8. If ADUs are rented, rental must be for terms longer than thirty (30) days; and

9. No setback shall be required for an ADU constructed within an existing legal structure, or in the same location and to the dimensions of an existing legal structure. Such ADUs may include an expansion of not more than one hundred fifty (150) square feet beyond the same physical dimensions as the existing accessory structure. An expansion beyond the physical dimensions of the existing accessory structure shall be limited to accommodating ingress and egress.

6. Rentals. Any rental of ADUs must be for terms longer than thirty (30) days.

E. Development Standards and Requirements for Junior Accessory Dwelling Units.

1. The JADU shall be constructed within the walls of the proposed or existing single-family residence and shall not exceed five hundred (500) square feet.

2. The owner shall occupy the primary residence or JADU.

3. The JADU shall include a separate entrance from the main entrance to the proposed or existing single-family residence.

4. The JADU may include separate sanitation facilities or may share sanitation facilities with the existing structure.

5. The JADU shall include an efficiency kitchen, which shall include all of the following:
a. A cooking facility with appliances.
b. A food preparation counter and storage cabinets that are of reasonable size in relation to the size of the junior accessory dwelling unit.

6. Modifications to the exterior of the residence in order accommodate a proposed JADU shall use exterior colors, materials, and architectural details that match the appearance of existing corresponding features on the residence.

F. Parking and Vehicle Access.

1. The ADU shall be provided with one (1) additional off-street parking space per ADU or bedroom, whichever is less.

However, no additional parking spaces shall be required for an ADU which is:

a. Part of the existing or proposed primary residence or an existing accessory structure; b. Located within one-half mile of a public transit stop; c. Located within an architecturally and historically significant historic district; d. Is located within one (1) block of a car share vehicle; or e. In a location where on-street parking permits are required, but not provided to the occupant of the ADU.

2. Replacement parking shall not be required where a garage, carport, or covered parking structure, or uncovered parking space is demolished in conjunction with the construction of an ADU or converted to an ADU. a. A demolition permit for a detached garage that is to be replaced with an ADU shall be reviewed with the application for the ADU and issued at the same time. An applicant shall not be required to post any written notice or placards for demolition of a detached garage that is to be replaced with an ADU, where posting of such written notice or placard may otherwise be required.

3. The parking spaces required for the accessory dwelling unit can be in tandem to the required parking of the primary dwelling unit, as tandem parking on a driveway, may be uncovered, and/or can be located within the front setback if it can be demonstrated that no other option exists. Such parking is allowed unless specific findings that are made that parking in setback areas or tandem parking is not feasible based upon specific site or regional topographical or fire and life safety conditions.

4. The ADU shall utilize the same vehicular access that serves the primary dwelling unit. If the parcel is a through lot, access for both the single-family home and the ADU shall be limited to one (1) point or side of the lot for both dwelling units.

5. No additional parking spaces shall be required for a JADU.

G. Construction, and Utilities, Connections, and Impact Fees.

1.The ADU shall meet all applicable building and construction requirements as adopted by the city that apply to the construction of single-family detached dwellings, as appropriate, including but not limited to sewer and utility services, as appropriate and unless otherwise exempt by State law.

2. An ADU shall be served by public water and sewer and shall have access to an improved street.

3. An ADU is not considered a new residential use for purposes of calculating connection fees or capacity charges for utilities, including water and sewer service, unless the ADU was constructed with a new single-family dwelling.

4. An ADU is not required to provide fire sprinklers if they are not required for the primary residence. The construction of an ADU shall not trigger a requirement for fire sprinklers to be installed in the existing primary dwelling.

5.2a. An ADU within a primary dwelling unit or an existing accessory structure, or a JADU, is not required to install a new or separate utility connection directly between the ADU and the utility or impose a related connection fee or capacity charge, unless the ADU was constructed with a new single-family home or upon separate conveyance of the ADU.
b. For purposes of providing service for water, sewer, or power, including a connection fee, a JADU is not to be considered a separate or new dwelling unit from the single-family residence.

4. The ADU shall be served by public water and sewer and shall have access to an improved street.

6. JADU Regulations Related to the Primary Residence
a. For the purposes of providing service for water, sewer, or power, including a connection fee, a JADU is not considered a separate or new dwelling unit from the single-family residence. Service or connection fees for water, sewer, or power established by ordinances and regulations that uniformly apply to all single-family residences shall apply to a single-family residence that contains a JADU.
b. A JADU is not considered a separate or new dwelling unit for the purposes of fire and life protection ordinances.

Fire and life protection ordinances and regulations that uniformly apply to all single-family residences shall apply to a single-family residence that contains a JADU.
c. A permit to create a JADU shall not be denied due to the correction of nonconforming zoning conditions, building code violations, or unpermitted structures that do not present a threat to public health and safety and that are not affected by the construction of the JADU.

75. Impact fees shall not be charged for ADUs less than seven hundred fifty (750) square feet. Any impact fees charged for an ADU of seven hundred fifty (750) square feet or more shall be charged proportionately in relation to the square footage of the primary dwelling unit.

H. Operations

1. Separate Sales
a. A JADU shall not be sold or conveyed separately from the primary dwelling unit. b. An ADU shall not be sold or conveyed separately from the primary dwelling unit, except:
i. The ADU or the primary dwelling was built or developed by a qualified nonprofit corporation, and the

proposal meets the requirements of Government Code Section 66340 to 66341. ii. As otherwise mandated by the California Government Code, or as otherwise allowed if a local ordinance is adopted to provide for the separate conveyance of the primary dwelling unit and accessory dwelling unit or units as condominiums beyond what is described in subsection (i).

2. Rental Term. An ADU shall only be rented for rental terms longer than thirty (30) days.

3. Occupancy. If a project proposes a JADU, the owner of the property shall live in either the primary residence or JADU.
(Ord. 2020-04 § 2, 2020; Ord. 2017-08 § 2 (part), 2017; Ord. 2010-02 § 1 (part), 2010)

17.70.050 DECLARATION OF RESTRICTION.

Prior to issuance of a building permit final, all property owners of record shall sign and record a Declaration of Restrictions with the County Recorder in a form satisfactory to the Zoning Administrator consenting to the operations and requirements described in this chapter and as otherwise permitted by State lawstating, as applicable, that 1) the ADU or JADU shall not be sold separately from the primary residential unit on the lot, 2) the ADU shall only be rented for rental terms longer than thirty (30) days, and 3) an owner of the property shall live in either the primary residence or JADU, if there is a JADU on the property. The ADU or JADU shall be found to be in non-compliance with the Zoning Code if the City finds the Declaration of Restrictions has been breached.
(Ord. 2020-04 § 2, 2020; Ord. 2017-08 § 2 (part), 2017; Ord. 2010-02 § 1 (part), 2010)

17.70.060 AFFORDABLE HOUSING INCENTIVE.

The city may, subject to the availability of funds and approval of the City Council, allow any applicable city development impact fees for accessory dwelling units to be paid from the city's available affordable housing fund for any new accessory dwelling unit rented to eligible very low and low income households after recording a Housing Affordability Control Agreement, subject to the review and approval of the City Attorney that shall run with the property for fifty five (55) years.

Owners of accessory dwelling units affordable to very low income households shall be eligible for complete reimbursement of city development impact fees upon recordation of the Affordability Control Agreement. Owners of accessory dwelling units affordable to low income households shall be eligible for reimbursement of seventy-five percent (75%) of the city development impact fees based on the available balance of the city's affordable housing fund established by the City Council for this purpose. Maximum annual rents, adjusted for accessory dwelling unit household size, shall be calculated by the City Manager or his/her designee annually based on published Contra Costa County income limits provided by the State Department of Housing and Community Development. Any reimbursement payment shall be repaid, along with five percent (5%) monthly interest charge, as well as the city's housing affordability monitoring expenses if an affordability control agreement is violated during the affordability period.
(Ord. 2020-04 § 2, 2020; Ord. 2017-08 § 2, 2017)

4. Pinole Municipal Code Chapter 17.71 SB9 Urban Lot Split and Unit Development [New Chapter]
Full Chapter included.

All text is new text, shown in bold and underline.

CHAPTER 17.71
SB9 URBAN LOT SPLIT AND UNIT DEVELOPMENT
Sections:

17.71.010 Purpose.

17.71.020 Applicability.

17.71.030 Definitions.

17.71.040 Eligibility.

17.71.050 Application Review Process.

17.71.060 Standards and Requirements for Urban Lot
Splits.

17.71.070 Standards and Requirements for Unit
Development.

17.71.080 Declaration of Restriction.

17.71.010 PURPOSE
The purpose of this chapter is to establish procedures and standards for reviewing urban lot split and unit development projects proposed under the provisions of Senate Bill 9 (SB 9), as set forth in California Government Code § 65852.21 and 66411.7.

17.71.020 APPLICABILITY
The regulations and standards contained in this chapter shall apply to projects proposing to use the provisions of SB 9 to create a unit, urban lot split, or both, and shall be in addition to any other applicable development standards and regulations contained elsewhere within Title 17 Zoning Code. Projects proposed under SB 9 shall meet eligibility criteria established in this Chapter, consistent with California Government Code § 65852.21 and 66411.7. This Chapter does not apply to construction of accessory dwelling units and junior accessory dwelling units under Chapter 17.70.

17.71.030 DEFINITIONS
For the purposes of this Chapter, the following definitions apply to projects proposing an urban lot split or unit development under the provisions of SB 9.

A. Single Family Residential Zoning District. Single family residential zoning districts, for the purposes of this Chapter, include Low Density Residential (LDR) and Suburban Residential (R-1).

B. Unit Development. The development of a primary dwelling unit, subject to the standards and requirements of this Chapter.

C. Urban Lot Split. A subdivision of one parcel located in a single family residential zoning district into two parcels, subject to the standards and requirements of this Chapter.

D. High-quality Transit Corridor. As defined in subdivision (b) of Section 21155 of the Public Resources Code, a high-quality transit corridor means a corridor with fixed route bus service with service intervals no longer than 15 minutes during peak commute hours.

E. Major Transit Stop. As defined in Section 21064.3 of the Public Resources Code, a major transit stop means a site that contains any of the following: (a) An existing rail or bus rapid transit station, (b) A ferry terminal served by either a bus or rail transit service, or (c) The intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods.

F. Specific, Adverse Impact. As defined in Section 65589.5(d)(2), specific, adverse impact means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application was deemed complete. The following shall not constitute a specific, adverse impact upon the public health or safety:

1. Inconsistency with the zoning ordinance or general plan land use designation.

2. The eligibility to claim a welfare exemption under subdivision (g) of Section 214 of the Revenue and Taxation Code.

17.71.040 ELIGIBILITY
A. General Criteria. Projects for a proposed urban lot split or unit development are required to meet the general eligibility criteria provided below:

1. Single Family Residential Zoning District. The parcel must be located in a single family residential zoning district.

2. Not Withdrawn from Rental. The property is not a parcel where the owner had withdrawn accommodations

from rent or lease (as a residential hotel), under Chapter 12.75 (commencing with Section 7060) of Division 7 of Title 1, within the last fifteen (15) years.

3. Not Historic. The property is not listed as a historic property or in a historic district under local or State register of historic resources.

B. Urban Lot Split Criteria. Projects for a proposed urban lot split are required to meet additional eligibility criteria provided below:

1. Previous Urban Lot Split Limitations. An urban lot split may be conducted only where all of the following applies:
a. The parcel has not been established through a prior SB9 urban lot split. b. Neither the owner nor any person acting in concert with the owner has subdivided an adjacent parcel through a prior SB9 urban lot split.

2. Limitations on demolition or alteration of certain existing housing:
a. No demolition or alteration of housing with a recorded affordability restriction. b. No demolition or alteration of housing under rent or price control. c. No demolition or alteration of housing that has been occupied by a tenant in the last three (3) years.

C. Unit Development Criteria. Projects for a proposed unit development are required to meet additional eligibility criteria provided below:

1. Floor Area. Units shall be consistent with maximum unit sizes established under this Chapter.

2. Limitations on demolition or alteration of certain existing housing:
a. No demolition or alteration of housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. b. No demolition or alteration of housing under rent or price control. c. No demolition or alteration of housing that has been occupied by a tenant in the last three (3) years.

D. Locational Limitation Criteria. Projects shall not be located on a site that is any of the following, consistent with California Government Code Section 65913.4(a)(6)(B) to 65913.4(a)(6)(K):

1. Prime Farmland or Farmland of Statewide Importance. Prime farmland or farmland of statewide importance, as defined pursuant to United States Department of Agriculture land inventory and monitoring criteria, as modified for California, and designated on the maps prepared by the Farmland Mapping and Monitoring Program of the Department of Conservation, or land zoned or designated for agricultural protection or preservation by a local ballot measure that was approved by the voters of that jurisdiction.

2. Wetlands. Wetlands, as defined in the United States Fish and Wildlife Service Manual, Part 660 FW 2 (June 21, 1993).

3. Very High Fire Hazard Severity Zone. Within a very high fire hazard severity zone, as determined by the Department of Forestry and Fire Protection pursuant to Section 51178, or within the state responsibility area, as defined in Section 4102 of the Public Resources Code.
a. This does not apply to sites that have adopted fire hazard mitigation measures pursuant to existing building standards or state fire mitigation measures applicable to the development, including, but not limited to, standards established under all of the following or their successor provisions: (i) Section 4291 of the Public Resources Code or Section 51182, as applicable; (ii) Section 4290 of the Public Resources Code; (iii) Chapter 7A of the California Building Code (Title 24 of the California Code of Regulations).

4. Hazardous Waste Site. A hazardous waste site that is listed pursuant to Section 65962.5 or a hazardous waste site designated by the Department of Toxic Substances Control pursuant to Section 25356 of the Health and Safety Code, unless either of the following apply:
a. The site is an underground storage tank site that received a uniform closure letter issued pursuant to subdivision (g) of Section 25296.10 of the Health and Safety Code based on closure criteria established by the State Water Resources Control Board for residential use or residential mixed uses. This section does not alter or change the conditions to remove a site from the list of hazardous waste sites listed pursuant to Section 65962.5. b. The State Department of Public Health, State Water Resources Control Board, Department of Toxic Substances Control, or a local agency making a determination pursuant to subdivision (c) of Section 25296.10 of the Health and Safety Code, has otherwise determined that the site is suitable for residential use or residential mixed uses.

5. Earthquake Fault Zone. Within a delineated earthquake fault zone as determined by the State Geologist in any official maps published by the State Geologist, unless the development complies with applicable seismic protection building code standards adopted by the California Building Standards Commission under the California Building Standards Law (Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code), and by any local building department under Chapter 12.2 (commencing with Section 8875) of Division 1 of Title 2.

6. Flood Hazard Zone. Within a special flood hazard area subject to inundation by the 1 percent annual chance flood (100-year flood) as determined by the Federal Emergency Management Agency in any official maps published by the Federal Emergency Management Agency. If a development proponent is able to satisfy all applicable federal qualifying criteria in order to provide that the site satisfies this subparagraph and is otherwise eligible for streamlined approval under this section, a local government shall not deny the application on the basis that the development proponent did not comply with any additional permit requirement, standard, or action adopted by that local government that is applicable to that site. A development may be located on a site described in this subparagraph if either of the following are met:
a. The site has been subject to a Letter of Map Revision prepared by the Federal Emergency Management Agency and issued to the local jurisdiction.
b. The site meets Federal Emergency Management Agency requirements necessary to meet minimum flood plain management criteria of the National Flood Insurance Program pursuant to Part 59 (commencing with Section

59.1) and Part 60 (commencing with Section 60.1) of Subchapter B of Chapter I of Title 44 of the Code of Federal Regulations.

7. Floodway. Within a regulatory floodway as determined by the Federal Emergency Management Agency in any official maps published by the Federal Emergency Management Agency, unless the development has received a no-rise certification in accordance with Section 60.3(d)(3) of Title 44 of the Code of Federal Regulations. If a development proponent is able to satisfy all applicable federal qualifying criteria in order to provide that the site satisfies this subparagraph and is otherwise eligible for streamlined approval under this section, a local government shall not deny the application on the basis that the development proponent did not comply with any additional permit requirement, standard, or action adopted by that local government that is applicable to that site.

8. Conservation Land. Lands identified for conservation in an adopted natural community conservation plan pursuant to the Natural Community Conservation Planning Act (Chapter 10 (commencing with Section 2800) of Division 3 of the Fish and Game Code), habitat conservation plan pursuant to the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), or other adopted natural resource protection plan.

9. Habitat for Protected Species. Habitat for protected species identified as candidate, sensitive, or species of special status by state or federal agencies, fully protected species, or species protected by the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), the California Endangered Species Act (Chapter 1.5 (commencing with Section 2050) of Division 3 of the Fish and Game Code), or the Native Plant Protection Act (Chapter 10 (commencing with Section 1900) of Division 2 of the Fish and Game Code).

10. Conservation Easement. Lands under a conservation easement.

17.71.050 APPLICATION REVIEW PROCESS
A. Application Approval Consideration.

1. Applications for urban lot splits and unit development meeting the standards and requirements of this Chapter shall be ministerially approved without public hearings or discretionary review.

2. Applications under this Chapter shall be approved or denied within 60 days from the date the Planning Division receives a completed application, consistent with the provisions of California Government Code Section 65852.21 and 66411.7.
a. If an application is denied, the Planning Division shall provide the applicant a full set of written comments with a list of items that are defective or deficient and a description of how the application can be remedied by the applicant.

B. Urban Lot Split Application. The applicant shall submit an application for a proposed urban lot split to the Planning Division for ministerial review to verify consistency with eligibility criteria under SB 9, required application checklist items, and compliance with standards and requirements under this Chapter and the Subdivision Map Act (commencing with Government Code Section 66410). An application that meets the standards and requirements under this Chapter and all applicable objective requirements of the Subdivision Map Act shall be approved ministerially.

Notwithstanding anything in this Code to the contrary, such approval shall be granted by the City Engineer, and shall not require approval from the Planning Commission or City Council.

C. Unit Development Application. The applicant shall submit an application for the design of a proposed unit to the Planning Division for ministerial review to verify consistency with eligibility criteria under SB 9, required application checklist items, and compliance with standards and requirements under this Chapter. An application that meets the standards and requirements under this chapter shall be approved ministerially by the Zoning Administrator.

D. Tree Removal in Conjunction with Applications. The removal of any protected tree in conjunction with construction proposed under the provisions of this Chapter shall require a tree removal permit. Notwithstanding the requirements of Chapter 17.96 Tree Removal, a tree removal permit application shall be processed ministerially at the staff level and concurrently with an application proposed under this Chapter.

17.71.060 STANDARDS AND REQUIREMENTS FOR URBAN LOT SPLITS A. General Development Standards. The project shall be consistent with the standards of the zoning district applicable to the site, except as provided under this Chapter. Except for the standards set forth in this chapter, no development standards shall apply if they would have the effect of physically precluding the construction of two units of at least 800 square feet on the parcel(s).

B. Total Lots. An urban lot split conducted under the provision of this chapter shall result in no more than two (2) lots.

C. Total Units per Lot. No more than two (2) total units, inclusive of primary dwelling units, accessory dwelling units, and junior accessory dwelling units, may be located on each parcel created through the urban lot split.

D. Lot Sizes.

1. Each parcel shall be a minimum of one thousand two hundred (1,200) square feet.

2. A parcel may be no smaller than forty percent (40%) of the original parcel size and no larger than sixty percent (60%) of the original parcel size.

E. Setbacks

1. Each parcel shall allow for minimum side and rear setbacks that are minimum four (4) feet. Parcels with a front lot line shall provide for a front setback that is a minimum of twenty (20) feet, except as otherwise allowed per Chapter 17.56 Yard and Setback Regulations.

2. No setback required for an existing structure or a structure constructed in the same location with the same dimensions.

F. Access to Streets and Services

1. Parcels created through the urban lot split shall have access to, provide access to, or adjoin the public rightof-way. a. Access shall meet objective design standards for circulation, pedestrian and vehicular access, or driveways, as may be applicable.

2. Project may be required to establish easements if required by the City for the provision of public services and facilities, as provided under Government Code Section 66411.7(e).

G. Parking.

1. A minimum of one off-street parking space shall be required per unit, except for the following:
a. The parcel is located within a half mile of a high-quality transit corridor or major transit stop; or b. The parcel is located within one block of a car share vehicle.

2. Parking may be provided in any configuration on the parcel, including in the driveway, provided the project complies with the following requirements:
a. Parking design and dimensions are consistent with the standards under Chapter 17.48 Parking and Loading Requirements.
b. Parking does not obstruct pedestrian or vehicular access to other units and parking spaces.

H. Ongoing Requirements.

1. Residential Use. Primary uses on lots created through an urban lot split under this Chapter are limited to residential uses.

2. Occupancy. The property owner must intend to occupy one of the units as their principal residence for a minimum of three (3) years from the date of urban lot split approval. Except, such occupancy is not required for community land trusts or qualified nonprofit corporations, as provided by Government Code Section 66411.7. a. As part of the application, the owner shall submit a signed affidavit stating that they intend to occupy one of the housing units on the site as their principal residence for a minimum of three (3) years from the date of the approval of the urban lot split.

3. No Short-Term Rentals. Rental of any units created through SB 9 are required to be for terms longer than thirty (30) days.

17.71.070 STANDARDS AND REQUIREMENTS FOR UNIT DEVELOPMENT A. General Development Standards. The project shall be consistent with the standards of the zoning district applicable to the site, except as provided under this Chapter.

B. Total Units.

1. Up to two (2) primary units per parcel may be created through the provisions of this Chapter. Additionally, a project may not result in more than two (2) primary units per parcel.

C. Setbacks.

1. Front setback. On a parcel with a front lot line separating the lot from a street, the front setback shall be a minimum of twenty (20) feet or as otherwise allowed per Chapter 17.56 Yard and Setback Regulations, unless such setbacks would physically preclude the construction of the unit(s) or preclude the unit(s) from being at least eight hundred (800) square feet.

2. Side setback. The side setback shall be a minimum of four (4) feet.

3. Rear setback. The rear setback shall be a minimum of four (4) feet.

4. Setbacks from Other Structures. The minimum distance between structures on the same parcel shall be six (6) feet, unless this would physically preclude the construction of the unit(s) or preclude the unit(s) from being at least eight hundred (800) square feet.

5. Existing Structure Setback Exceptions. No setback shall be required for an existing structure or a structure constructed in the same location and to the same dimensions as an existing structure.

E. Parking.

1. A minimum of one off-street parking space shall be required per unit, except no minimum parking shall be required for the following:
a. The parcel is located within one-half mile walking distance of a high-quality transit corridor or major transit stop; or
b. The parcel is located within one block of a car share vehicle.

2. Parking may be provided in any configuration on the parcel, including in the driveway, provided the project complies with the following requirements:
a. Parking design and dimensions are consistent with the standards under Chapter 17.48 Parking and Loading Requirements.
b. Parking does not obstruct pedestrian or vehicular access to other units and parking spaces.

F. Ongoing Requirements.

1. No Short-Term Rentals. Rental of units created through SB 9 are required to be for terms longer than thirty (30) days.

G. Objective Design Standards. Projects shall be consistent with the development standards of the zoning district applicable to the site, except as provided under this Chapter. Except for the standards set forth in this chapter, no development standards shall apply if they would have the effect of physically precluding the construction of two units of at least 800 square feet on the parcel(s).

17.71.080 DECLARATION OF RESTRICTION
Prior to building permit final, all property owners of record shall sign and record a Declaration of Restrictions with the County Recorder in a form satisfactory to the Zoning Administrator consenting to the operations and requirements described in this chapter and as otherwise permitted by State law. An urban lot split or unit development shall be found to be in non-compliance with the Zoning Code if the City finds the Declaration of Restrictions has been breached.

17.71.090 INTERPRETATION
If any portion of this Chapter conflicts with applicable State law, State law shall supersede this Section. Any ambiguities in this Section shall be interpreted to be consistent with State law

1 PLANNING COMMISSION RESOLUTION 24-09
WITH EXHIBIT A: MUNICIPAL CODE AMENDMENTS

RESOLUTION OF THE CITY OF PINOLE PLANNING COMMISSION RECOMMENDING THAT THE CITY COUNCIL ADOPT AN ORDINANCE AMENDING CHAPTERS 17.12, 17.24, AND 17.70 OF THE PINOLE MUNICIPAL CODE AND ADDING CHAPTER 17.71 TO THE PINOLE MUNICIPAL CODE.

WHEREAS, Pinole Municipal Code (“PMC”) Title 17 Zoning Code establishes general regulations on land uses and development standards within the City; and WHEREAS, the City of Pinole 2023-2031 Housing Element contains programs identifying various zoning ordinance amendments; and
WHEREAS, implementation of Housing Element programs requires amendments revising text in the PMC; and
WHEREAS, amendments to the municipal code are required for accessory dwelling unit and junior accessory dwelling unit regulations to reflect current State Law for these units under California Government Code Sections 66310 to 66342; and
WHEREAS, amendments to the municipal code are required to incorporate regulations and procedures for urban lot splits and unit development proposed under Senate Bill 9 (SB9) and reflect the provisions of California Government Code Sections Section 65852.21 and 66411.7; and WHEREAS, the City of Pinole Residential Design Criteria and Guidelines, adopted November 20, 2007, contains subjective guidelines for review of single family residential development; and WHEREAS, a ministerial review process is required for the review of unit development proposed under SB 9 and subjective guidelines cannot be used to approve projects; and WHEREAS, it is desirable to maintain aspects of the Residential Design Criteria and Guidelines by creating objective design standards based on subjective guidelines where possible; and WHEREAS, objective standards would apply uniformly to the underlying single family residential districts, which include R-1 and LDR, and thereby would be applicable to SB 9 unit development projects; and
WHEREAS, the proposed revisions to amend the Zoning Code are attached hereto as Exhibit A; and

ATTACHMENT C

2 WHEREAS, the Planning Commission held a duly noticed public hearing related to the proposed Zoning Code amendment on December 9, 2024; and WHEREAS, after close of the public hearing, the Planning Commission considered all public comments received both before and during the public hearing, the presentation by city staff, the staff report, and all other pertinent documents regarding the proposed zoning code amendment; and WHEREAS, the proposed ordinance amendments are exempt from the California Environmental Quality Act (CEQA) based on the rule set forth in CEQA Guidelines Section 15061(b)(3) that CEQA applies only to projects which have the potential for causing a significant effect on the environment.

NOW THEREFORE, BE IT RESOLVED, that the above recitals are true and correct and made part of this Resolution.

BE IT FURTHER RESOLVED, that the Planning Commission of the City of Pinole hereby recommends that the City Council adopt an ordinance amending Chapters 17.12, 17.24, and 17.70 of the Pinole Municipal Code and adding Chapter 17.71 to the Pinole Municipal Code, as set forth in Exhibit A, attached hereto and incorporated herein.

PASSED AND ADOPTED by the Planning Commission of the City of Pinole on this 9th day of December, 2024, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
_____________________________
Rafael Menis, Chair, 2024-2025
ATTEST:
_____________________________
David Hanham, Planning Manager

EXHIBIT A. MUNICIPAL CODE AMENDMENTS

1. Pinole Municipal Code Section 17.12.150 Comprehensive Design Review [Amendment]

2. Pinole Municipal Code Chapter 17.24 Development Standards by Zoning District [Amendment]

3. Pinole Municipal Code Chapter 17.70 Accessory Dwelling Units and Junior Accessory Dwelling Units [Amendment]

4. Pinole Municipal Code Chapter 17.71 SB9 Urban Lot Split and Unit Development [New Chapter]

1. Pinole Municipal Code Section 17.12.150 Comprehensive Design Review [Amendment]
Section 17.12.150 included (excerpt of Chapter 17.12 Entitlements).

Text to be removed shown in strikeout text.

Text to be added shown in bold and underline.

17.12.150 COMPREHENSIVE DESIGN REVIEW.

A. Purpose. The purpose of comprehensive design review is to provide a process for promoting the orderly and harmonious growth of the city, to encourage development in keeping with the desired character of the city, and to ensure physical and functional compatibility between uses. This comprehensive design review is intended to provide a process for consideration of development proposals to ensure that the design and layout of commercial, retail, industrial or institutional uses, or multi-family residential development will constitute suitable development and will not result in a detriment to the City of Pinole or to the environment.

B. Applicability. A comprehensive design review permit is required for the following items:

1. New single-family and multi-family residential development, except for unit development under Government Code section 65852.21, as amended and renumbered from time to time (also known as SB 9);

2. New non-residential development (e.g., commercial, office, industrial, public/quasi-public);

3. Additions to existing multi-family and non-residential structures equal to or greater than 500 square feet; and

4. Any item not listed in Section17.12.150.C, for which the Community Development Director determines that a comprehensive design review permit is required.

C. Exemptions. The following structures and activities are exempt from comprehensive design review. However, such structures may require additional permits, such as a building permit, and plan check to ensure compliance with adopted Building Code and related construction code standards and applicable Zoning Code provisions and public works encroachment permits.

1. Accessory dwelling units and junior accessory dwelling units, regardless of size.

2. Additions to a single-family home of less than 500 square feet when consistent with the City of Pinole Residential Design Criteria and Guidelines.

3. Additions to multi-family and non-residential structures less than five hundred (500) square feet in size.

4. Accessory structures consistent with the provisions of this title.

5. Installation of signs.

6. Repairs and maintenance to the site or existing structures that do not add to, enlarge, or expand the area occupied by the structure or the gross floor area of the structure.

7. Interior alterations that do not increase the gross floor area within the structure or change/expand the permitted use of the structure (e.g., tenant improvements).

8. Construction, alteration, or maintenance by a public utility or public agency of underground or overhead utilities intended to service existing or nearby approved developments (e.g., water, gas, electric or telecommunication supply or disposal systems, including wires, mains, drains, sewers, pipes, conduits, cables, fire-alarm boxes, police call boxes, traffic signals, hydrants, and similar facilities and equipment).

9. Alteration or maintenance of public park and recreation facilities.

10. Unit development under SB 9 (Government Code section 65852.21).

D. Approving Authority. The designated approving authority for comprehensive design review is the Planning Commission. Comprehensive design review approval is required prior to issuance of any ministerial building permits or site improvement plans and prior to or in conjunction with discretionary action of corresponding development applications (e.g., conditional use permit, variance). Comprehensive actions include, but are not limited to, new construction and wholesale redevelopment of existing sites.

E. Application Content. The application for a comprehensive design review shall be on a form prepared as prescribed by the Community Development Director.

F. Public Hearing/Notice. The city shall provide notice and a public hearing for continuation of the approval, modification, revocation or appeal of an application for a comprehensive design review in accordance with Section 17.10.050 (Public Hearing and Public Notice).

G. Approval Findings. A comprehensive design review permit or any modification thereto shall be granted only when the designated approving authority makes all of the following findings:

1. The proposed project is consistent with the objectives of the general plan and complies with applicable zoning regulations, planned development, master plan or specific plan provisions, improvement standards, and other applicable standards and regulations adopted by the city;

2. The proposed project will not create conflicts with vehicular, bicycle, or pedestrian transportation modes of circulation;

3. The site layout (orientation and placement of buildings and parking areas), as well as the landscaping, lighting, and other development features, are compatible with and complement the existing surrounding environment and ultimate character of the area under the general plan and applicable specific plans; and

4. Qualifying single-family residential, multi-family residential, and residential mixed-use projects shall comply with all relevant standards and guidelines in the city's currently adopted design guidelines for residential development.

A. Considerations. In conducting comprehensive design review, the designated approving authority shall consider the following:

1. Considerations relating to site layout, the orientation and location of building, signs, other structures, open spaces, landscaping, and other development features in relation to the physical characteristics, zoning, and land use of the site and surrounding properties.

2. Considerations relating to traffic, safety, and traffic congestion, including the effect of the development plan on traffic conditions on abutting streets, the layout of the site with respect to locations and dimensions of vehicular and pedestrian entrances, exits, driveways, and walkways, the adequacy of off-street parking facilities to prevent traffic congestion, and the circulation patterns within the boundaries of the development.

3. Considerations necessary to ensure that the proposed development is consistent with the general plan and all applicable specific plans or other city plans, including, but not limited to, the density of residential units.

4. Considerations relating to the availability of city services, including, but not limited to, water, sewer, drainage, police and fire, and whether such services are adequate based upon city standards.

B. Conditions/Guarantees. The approving authority may impose conditions and/or require guarantees for comprehensive design review to ensure compliance with this section and other applicable provisions of this title and to prevent adverse or detrimental impact to the surrounding neighborhood.

C. Permit Issuance. The final action on comprehensive design review by the approving authority shall constitute approval of the permit. Such permit shall only become valid after the designated appeal period has been completed, per the provisions as set forth in Section 17.10.080 (Effective Date).

D. Appeals. Appeal of the approving authority's action on the request for a comprehensive design review permit shall be made in accordance with the procedures specified in Section 17.10.070 (Appeals).

E. Expiration. All approved comprehensive design review permits are subject to the provisions set forth in Section

17.10.100 (Permit Time Limits, Extensions and Expiration). (Ord. 2020-01, § 3, 2020: Ord. 2012-07, § 3, 2012: Ord. 2010-02 § 1 (part), 2010)

2. Pinole Municipal Code Chapter 17.24 Development Standards by Zoning District [Amendment]
Full Chapter included.

Text to be removed shown in strikeout text.

Text to be added shown in bold and underline.

CHAPTER 17.24

DEVELOPMENT STANDARDS BY ZONING DISTRICT
Sections:

17.24.010 Purpose.

17.24.020 Development standards.

17.24.030 Additional standards for multi-family zoning districts.

17.24.040 Objective design standards for single family zoning districts.

17.24.010 PURPOSE.

The purpose of this chapter is to establish development standards for lot area, allowed density, building setbacks, height, and lot coverage as appropriate for each of the city's base zoning districts as listed in Table 17.18.020-1 (Zoning Districts).

These standards, along with other development standards (e.g., fences and walls, parking, sign standards) listed in Article III (Site Planning Standards) are intended to assist property owners and project designers in understanding the city's minimum requirements and expectations for high quality development. (Ord. 2010-02 § 1 (part), 2010)

17.24.020 DEVELOPMENT STANDARDS.

Table 17.24.020-1 (Development Standards for City of Pinole Base Zoning Districts) includes lot area, allowed density, building setbacks, height, and lot coverage requirements for each of the city's base zoning districts. Additional site planning requirements (e.g., landscaping, lighting) are listed in Article III (Site Planning Standards). Development within the city is also subject to compliance with all adopted Uniform Building and Fire Codes. Qualifying single family residential, multi-family residential, and residential mixed-use projects shall comply with all relevant standards and guidelines in the city's currently adopted design guidelines. Zoning district names for the zoning district symbols used in the table are as follows:

LDR = Low Density Residential Zoning District
R-1 = Suburban Residential Zoning District
R-2 = Medium Density Zoning District
R-3 = High Density Zoning District
R-4 = Very High Density Zoning District
R = Rural Zoning District
RC = Regional Commercial Zoning District
RMU = Residential Mixed Use Zoning District
CMU = Commercial Mixed Use Zoning District
OPMU = Office Professional Mixed Use Zoning District
OIMU = Office Industrial Mixed Use Zoning District
OS = Open Space Zoning District
PR = Parks and Recreation Zoning District
PQI = Public Quasi-Public Institutional Zoning District SPBCA = San Pablo Bay Conservation Zoning District
TABLE 17.24.020-1:

DEVELOPMENT STANDARDS FOR CITY OF PINOLE BASE ZONING DISTRICTS Development
Standard\Zoning District LDR R-1 R-2 R-3 R-4 R RC RMU CMU OPMU OIMU OS PR PQI SPBCA Lot Area ( minimum square
footage/unit) 43,560 6,000 3,000 1,500 N/A 5 ac.(1) 5,000 N/A N/A N/A N/A N/A N/A N/A N/A Allowed Density (units per acre)
Minimum Density 0.21 1.1 10.1 20.1 35.1 N/A N/A 20.1 20.1 20.1 N/A N/A N/A N/A N/A Maximum Density 1.0 10.0 20.0 35.0 50.0 0.2 N/A 35.0 30.0 30.0 N/A N/A N/A N/A N/A Setback (minimum distance between structure and property line in feet) Front Yard 20 20 0 0 0 30 0 0 0 0 0 0 10 0 10
Side Yard 10 (2) 5 (3) 5 5 5 15 0 0 0 10 10 0 10 10 10
Side Yard for Second
Story 15 12 10 5 5 15 0 0 0 10 10 0 10 10 10

Street Side Yard 15 (4)
10 (4) 10 10 10 20 0 10 10 10 10 0 10 0 10
Rear Yard 20 (4) 20
(4) 15 15(5)
15 (5) 30 0
15 (5)
15 (5) 15 (5) 15 (5) 0 10 10 10
Distance Between Buildings (minimum feet)
For Dwelling Purposes 6 6 6 6 0 6 0 0 0 0 0 N/A N/A N/A N/A Accessory Buildings (6) 6 6 3 3 3 6 6 6 6 6 6 6 6 6 6
Building Height (maximum feet)
Primary Buildings 35 35 35 35 50 35 50 50 50 50 50 35 35 40 35 Accessory Buildings 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 Floor Area Ratio
(maximum ratio of building
to lot square footage)
N/A N/A N/A N/A N/A N/A 0.40 N/A N/A N/A N/A N/A N/A N/A N/A Notes:
(1) The approving authority may approve lots less than five (5) acres in size and reduced setbacks for clustering of units to preserve open space or other resources as part of comprehensive design review. (2) The combined side yard setbacks shall not be less than twenty (20) feet. (3) Within required side yards, at least one (1) side shall provide four (4) feet of unobstructed surface to allow unobstructed access between the front and rear yards.
(4) Listed setback distance or twenty percent (20%) of lot width in side yard and twenty percent (20%) of lot depth in rear yard, whichever is less.
(5) If abutting non-residential property, there is no minimum rear yard setback. (6) See additional development standards for accessory structures in Chapter17.30. (Ord. 2010-02 § 1 (part), 2010)

17.24.030 ADDITIONAL STANDARDS FOR MULTI-FAMILY ZONING DISTRICTS.

In addition to the development standards listed in Table 17.24.020-1, the following development standards apply to multifamily residential development in the Medium Density Residential (R-2), High Density Residential (R-3), Very High Density Residential (R-4), and mixed use zoning districts including residential uses.

A. Open Space Requirements for Multi-Family Residential.

1. Multi-family, attached dwelling units that are all or partially located at ground level shall have not less than eighty (80) square feet of private open space.

2. Not less than twenty percent (20%) of the total lot area of multiple-family residential projects shall be provided as improved, private or semi-private useable open space and not less than three hundred (300) square feet of improved useable open space per dwelling unit shall be provided in each multi-family development project.

3. Not less than thirty percent (30%) of the total lot area of multiple-family residential projects shall be provided as improved, landscaped open space.

B. Screening and Vegetation for Multi-Family Residential. Projects within multi-family residential zoning districts shall include vegetative screening at the project perimeter to ensure the privacy of existing and future homeowners. The city shall determine the location and extent of vegetative screening required based on site conditions and surrounding existing and planned land uses. Where required, such vegetative screening shall be maintained in a healthy and vigorous condition.

Areas used as vegetative screening shall not be counted as open space. (Ord. 2010-02 § 1 (part), 2010)

17.24.040 OBJECTIVE DESIGN STANDARDS FOR SINGLE FAMILY ZONING DISTRICTS.

In addition to the development standards listed in Table 17.24.020-1, the following objective development standards apply to applicable residential development in single family residential zoning districts.

A. Applicability

1. The project consists of constructing a primary dwelling unit, such as single family residence or a duplex, or modifying an existing structure to create a primary dwelling unit; and

2. The project is located in the Low Density Residential (LDR) or Single Family Residential (R-1) zoning district.

B. Design Standards

1. Units shall be designed with an entry feature or outdoor living area, such as a porch or courtyard, when located on a lot adjacent to the street, and include a path to the sidewalk/street.

2. Projects resulting in the creation of a two-story dwelling shall step back the second floor wall plane at least five (5) feet from the first floor wall plane on at least two sides. On corner lots, the second floor wall plane shall be stepped back at least five (5) feet from the first floor wall plane along street frontages.

3. Two-story designs shall provide visual separation between the two stories by incorporating projections, reliefs, accents, roof forms, decks, balconies, and/or variation in materials between the two stories.

4. Unit design shall minimize the appearance of long blank walls by including design features on each building face at intervals of no less than fifteen (15) feet. Such features may include changes in the wall plane, inclusion of different materials, windows, doors, openings, and/or architectural detailing.

5. Consistent materials and colors shall be applied for each type of architectural detail, including door trim, window trim, window sills, shutters, and fascia, when such architectural details are located in more than one location on the building facade. For example, when white, wood window trim is used at one location on the building, any window trim used at other locations shall be white, wood window trim.

6. Windows shall be offset so that they are not lined up with windows of adjoining structures, or windows shall include non-transparent glazing to obscure direct views into adjoining structures.

3. Pinole Municipal Code Chapter 17.70 Accessory Dwelling Units and Junior Accessory Dwelling Units [Amendment]
Full Chapter included.

Text to be removed shown in strikeout text.

Text to be added shown in bold and underline.

CHAPTER 17.70

ACCESSORY DWELLING UNITS AND JUNIOR ACCESSORY DWELLING UNITS Sections:

17.70.010 Purpose.

17.70.020 Applicability.

17.70.030 Permit requirements.

17.70.040 Performance standards.

17.70.050 Declaration of restrictions

17.70.060 Affordable housing incentive.

17.70.010 PURPOSE.

The purpose of this chapter is to establish procedures for reviewing the placement of accessory dwelling units and junior accessory dwelling units in residential and mixed-use zoning districts, address the state's accessory dwelling unit (ADU) and junior accessory dwelling unit (JADU) requirements, as set forth in California Government Code § 66310 to 6634265852.2 and 65852.22 and implement the general plan policies which encourage more affordable rental housing, while maintaining the quality of existing residential neighborhoods.
(Ord. 2020-04 § 2, 2020; Ord. 2017-08 § 2 (part), 2017; Ord. 2010-02 § 1 (part), 2010)

17.70.020 APPLICABILITY.

The regulations and standards contained in this chapter shall apply to all new accessory dwelling units (ADU) and junior accessory dwelling units (JADU) in the city, including previously unpermitted ADUs that are legalized, and shall be in addition to any other development standards and regulations contained elsewhere within Title 17 Zoning Code that apply to primary dwelling units (e.g., lighting). ADUs are permitted on all lots zoned to allow single-family and multi-family residences that have an existing or proposed single-family or multi-family residence. JADUs are permitted on lots with an existing or proposed single-family residence. For the purposes of this title, ADUs and JADUs are not considered accessory structures as otherwise regulated in Chapter 17.30.
(Ord. 2020-04 § 2, 2020; Ord. 2017-08 § 2 (part), 2017; Ord. 2010-02 § 1 (part), 2010)

17.70.30 PERMIT REQUIREMENTS.

A. Application Review

1. All accessory dwelling units (ADU) and junior accessory dwelling units (JADU) require review and approval through the plan check process, pursuant to the requirements of Section 17.12.030 (Plan Check). a. Applications for ADUs and JADUs shall be ministerially reviewed by the City within sixty (60) days from the date a completed application is received if there is an existing single-family or multifamily dwelling on the lotcomplete application is submitted.
b. If the permit application to create an ADU or JADU is submitted with a permit application to create a new singlefamily dwelling on the lot, the City may delay acting on the application for the ADU or JADU until the City acts on the permit application to create the new single-family dwelling. The application to create the ADU or JADU shall still be considered ministerially without discretionary review or a hearing.

B. All plan check applications for ADUs and JADUs shall include, but are not limited to, the following:

1. A completed building permit application;

2. Proof of ownership of the property or permission from the property owner;

3. SiteA plot plan showing the location of any and all easements, structures, parking for both the primary and accessory dwelling units, other improvements, and trees over four (4) inches in diameter;

4. Floor plan showing the square footage of the structure, the floor area, the lot, and the percentage of the lot area covered by the foundations of the accessory and primary dwelling units;

5. Elevations showing all sides of the ADU or changes being made to the single-family home in order to add an ADU or JADU;

6. Colors and materials board, or aesthetic details noted in plan sets;

7. Such other information which the Community Development Director determines is necessary to evaluate the proposed project.

8. Completed declaration of restrictions, including a notarized property owner signature on the form as

required in Section17.70.050, signed and ready for recordation.

9. Address assignment application for the proposed unit.

10. Permit applications required by the Public Works Department to serve the proposed unit, which may include but is not limited to sewer lateral and encroachment permits. (Ord. 2020-04 § 2, 2020; Ord. 2017-08 § 2 (part), 2017; Ord. 2010-02 § 1 (part), 2010)

17.70.040 PERFORMANCE STANDARDS.

An accessory dwelling unit (ADU) or junior accessory dwelling unit (JADU) shall meet all of the applicable zoning regulations for the specific zoning district in which it is located, except as provided in this chapter. An ADU or JADU that conforms to the requirements of this chapter, and any other applicable development standards and regulations contained in Title 17 Zoning Code, shall not be considered to exceed the allowable density for the lot upon which such unit is proposed to be established and shall be deemed a residential use which is consistent with the existing general plan and zoning designations for the lot. Correction of nonconforming zoning conditions shall not be required as a condition for ministerial approval of a permit application for the creation of an ADU or JADU.:

A. Unit Types and FacilitiesDefinitions.

1. Accessory Dwelling Unit (ADU)
a. An ADU shall consist of complete independent living facilities including permanent facilities for sleeping, living, eating, cooking, and sanitation. The ADU shall include independent heating and cooling controls, its own kitchen and sink and standard built-in or freestanding appliances, its own bathroom with bathtub or shower, and a separate exterior entrance. b. The ADU may either be within an existing structure, attached to the primary dwelling, or detached from the primary dwelling.

2. Junior Accessory Dwelling Unit (JADU). A JADU shall consist of a unit that is no more than five hundred (500) square feet in size and contained entirely within a single-family residence. A JADU may include separate sanitation facilities, or may share sanitation facilities with the existing structure.

B. ADUs and JADUS may not be sold separately from the primary residential dwelling on the lot.

C. Maximum Number of ADUs and JADUs. Any of the following shall be permitted in a residential or mixed-use zone:

1. One (1) ADU and one (1)or JADU per lot with a proposed or existing single-family dwelling.

2. One (1) detached, new construction, ADU that does not exceed four (4) foot side and rear yard setbacks for a lot with a proposed or existing single-family dwelling. The proposal may be combined with a JADU, for one (1) ADU and one (1) JADU on the single-family lot. The ADU shall not exceed eight hundred (800) square feet and sixteen (16) feet high.

23. Within existing multi-family dwelling structures, a number of ADUs based onat least one (1) ADU and not more than twenty-five percent (25%) of the number of existing multi-family dwelling units, with a minimum of one (1) ADU allowed, if all of the following apply:
a. The unit is within the portions of existing multi-family dwelling structures that are not used as livable space, including, but not limited to, storage rooms, boiler rooms, passageways, attics, basements, or garages. b. The unit complies with state building standards for dwellings.

34. Not more than two (2) ADUs Multiple ADUs, not to exceed either of the numbers established below, that are located on a lot that has an existing multi- family dwelling, but are detached from that multi-family dwelling and are subject to a height limits and of sixteen (16) feet and four (4) foot rear and side yard setbacks under this Chapter. a. On a lot with an existing multifamily dwelling, not more than eight detached accessory dwelling units.

However, the number of accessory dwelling units allowable pursuant to this clause shall not exceed the number of existing units on the lot; or
b. On a lot with a proposed multifamily dwelling, not more than two detached accessory dwelling units.

D. Development Standards and Requirements for Accessory Dwelling Units.

1. Maximum floor area for attached or detached ADUs.
a. Fifty percent (50%) of the existing living area of the primary dwelling unit, with a limit of eight hundred fifty (850) square feet for an ADU with one or fewer bedrooms or one thousand (1,000) square feet for an ADU with two (2) or more bedrooms.
b. Where fifty percent (50%) of the existing living area does not allow for an eight hundred (800) square foot ADU, an ADU of up to eight hundred (800) square feet may be allowed;

2. Setbacks.
a. New ADUs shall have a minimum setback of four (4) feet from the side and rear property lines, and setbacks shall be sufficient for fire and safety;
b3. No setback shall be required for an existing legal structure that is converted to an ADU;

c4. Detached ADUs shall not be less than six (6)eight (8) feet from the primary dwelling unit, except if this would prohibit the construction of an eight hundred (800) square foot ADU with four (4) foot rear and side setbacks; d. No setback shall be required for an ADU constructed within an existing legal structure, or in the same location and to the dimensions of an existing legal structure. Such ADUs may include an expansion of not more than one hundred fifty (150) square feet beyond the same physical dimensions as the existing accessory structure.

An expansion beyond the physical dimensions of the existing accessory structure shall be limited to accommodating ingress and egress.

3. Height
a. Detach ADUs shall not exceed sixteen (16) feet in height, unless the ADU is located within an existing structure. i. The maximum allowable height shall be eighteen (18) feet if the lot is within a half-mile walking distance of a transit stop or high quality transit corridor, as defined in Section 21155 of the Public Resources Code;
ii. The maximum allowable height shall be eighteen (18) feet if the detached ADU is located on a lot with a multistory, multifamily building.
b. Attached ADUs shall not exceed the maximum allowable height of the zoning district;.

4. Exterior Access and Design.
a. The ADU shall have its own exterior access, and no.
b. Any exterior stairs to a second story attached ADU shall be located behind the residence. If location behind the residence is not possible due to site constraints, the project shall include at least one of the following features to obscure visibility shall be visible from the public right-of-way; incorporate screening into the architectural design; addition of trees or landscaping as screening; and/or use of colors on the stairway that match those used on the structure where the stairs are attached to minimize contrasts. c. Attached ADUs shall use exterior colors, materials, and architectural details that match the appearance of existing corresponding features on the residence.
d. No passageway shall be required in conjunction with the construction of an ADU. A passageway means a pathway that is unobstructed clear to the sky and extends from a street to one entrance of the ADU.;

5. Location. Detached ADUs shall be constructed at the rear or side of an existing single-family residence, and otherwise appear secondary in nature, and not be constructed in front of the primary dwelling unit;.

6. The ADU should be compatible with the primary dwelling unit, and should use similar style, materials, and colors;

7. No passageway shall be required in conjunction with the construction of an ADU;

8. If ADUs are rented, rental must be for terms longer than thirty (30) days; and

9. No setback shall be required for an ADU constructed within an existing legal structure, or in the same location and to the dimensions of an existing legal structure. Such ADUs may include an expansion of not more than one hundred fifty (150) square feet beyond the same physical dimensions as the existing accessory structure. An expansion beyond the physical dimensions of the existing accessory structure shall be limited to accommodating ingress and egress.

6. Rentals. Any rental of ADUs must be for terms longer than thirty (30) days.

E. Development Standards and Requirements for Junior Accessory Dwelling Units.

1. The JADU shall be constructed within the walls of the proposed or existing single-family residence and shall not exceed five hundred (500) square feet.

2. The owner shall occupy the primary residence or JADU.

3. The JADU shall include a separate entrance from the main entrance to the proposed or existing single-family residence.

4. The JADU may include separate sanitation facilities or may share sanitation facilities with the existing structure.

5. The JADU shall include an efficiency kitchen, which shall include all of the following:
a. A cooking facility with appliances.
b. A food preparation counter and storage cabinets that are of reasonable size in relation to the size of the junior accessory dwelling unit.

6. Modifications to the exterior of the residence in order accommodate a proposed JADU shall use exterior colors, materials, and architectural details that match the appearance of existing corresponding features on the residence.

F. Parking and Vehicle Access.

1. The ADU shall be provided with one (1) additional off-street parking space per ADU or bedroom, whichever is less.

However, no additional parking spaces shall be required for an ADU which is:

a. Part of the existing or proposed primary residence or an existing accessory structure; b. Located within one-half mile of a public transit stop; c. Located within an architecturally and historically significant historic district; d. Is located within one (1) block of a car share vehicle; or e. In a location where on-street parking permits are required, but not provided to the occupant of the ADU.

2. Replacement parking shall not be required where a garage, carport, or covered parking structure, or uncovered parking space is demolished in conjunction with the construction of an ADU or converted to an ADU. a. A demolition permit for a detached garage that is to be replaced with an ADU shall be reviewed with the application for the ADU and issued at the same time. An applicant shall not be required to post any written notice or placards for demolition of a detached garage that is to be replaced with an ADU, where posting of such written notice or placard may otherwise be required.

3. The parking spaces required for the accessory dwelling unit can be in tandem to the required parking of the primary dwelling unit, as tandem parking on a driveway, may be uncovered, and/or can be located within the front setback if it can be demonstrated that no other option exists. Such parking is allowed unless specific findings that are made that parking in setback areas or tandem parking is not feasible based upon specific site or regional topographical or fire and life safety conditions.

4. The ADU shall utilize the same vehicular access that serves the primary dwelling unit. If the parcel is a through lot, access for both the single-family home and the ADU shall be limited to one (1) point or side of the lot for both dwelling units.

5. No additional parking spaces shall be required for a JADU.

G. Construction, and Utilities, Connections, and Impact Fees.

1.The ADU shall meet all applicable building and construction requirements as adopted by the city that apply to the construction of single-family detached dwellings, as appropriate, including but not limited to sewer and utility services, as appropriate and unless otherwise exempt by State law.

2. An ADU shall be served by public water and sewer and shall have access to an improved street.

3. An ADU is not considered a new residential use for purposes of calculating connection fees or capacity charges for utilities, including water and sewer service, unless the ADU was constructed with a new single-family dwelling.

4. An ADU is not required to provide fire sprinklers if they are not required for the primary residence. The construction of an ADU shall not trigger a requirement for fire sprinklers to be installed in the existing primary dwelling.

5.2a. An ADU within a primary dwelling unit or an existing accessory structure, or a JADU, is not required to install a new or separate utility connection directly between the ADU and the utility or impose a related connection fee or capacity charge, unless the ADU was constructed with a new single-family home or upon separate conveyance of the ADU.
b. For purposes of providing service for water, sewer, or power, including a connection fee, a JADU is not to be considered a separate or new dwelling unit from the single-family residence.

4. The ADU shall be served by public water and sewer and shall have access to an improved street.

6. JADU Regulations Related to the Primary Residence
a. For the purposes of providing service for water, sewer, or power, including a connection fee, a JADU is not considered a separate or new dwelling unit from the single-family residence. Service or connection fees for water, sewer, or power established by ordinances and regulations that uniformly apply to all single-family residences shall apply to a single-family residence that contains a JADU.
b. A JADU is not considered a separate or new dwelling unit for the purposes of fire and life protection ordinances.

Fire and life protection ordinances and regulations that uniformly apply to all single-family residences shall apply to a single-family residence that contains a JADU.
c. A permit to create a JADU shall not be denied due to the correction of nonconforming zoning conditions, building code violations, or unpermitted structures that do not present a threat to public health and safety and that are not affected by the construction of the JADU.

75. Impact fees shall not be charged for ADUs less than seven hundred fifty (750) square feet. Any impact fees charged for an ADU of seven hundred fifty (750) square feet or more shall be charged proportionately in relation to the square footage of the primary dwelling unit.

H. Operations

1. Separate Sales
a. A JADU shall not be sold or conveyed separately from the primary dwelling unit. b. An ADU shall not be sold or conveyed separately from the primary dwelling unit, except:
i. The ADU or the primary dwelling was built or developed by a qualified nonprofit corporation, and the

proposal meets the requirements of Government Code Section 66340 to 66341. ii. As otherwise mandated by the California Government Code, or as otherwise allowed if a local ordinance is adopted to provide for the separate conveyance of the primary dwelling unit and accessory dwelling unit or units as condominiums beyond what is described in subsection (i).

2. Rental Term. An ADU shall only be rented for rental terms longer than thirty (30) days.

3. Occupancy. If a project proposes a JADU, the owner of the property shall live in either the primary residence or JADU.
(Ord. 2020-04 § 2, 2020; Ord. 2017-08 § 2 (part), 2017; Ord. 2010-02 § 1 (part), 2010)

17.70.050 DECLARATION OF RESTRICTION.

Prior to issuance of a building permit final, all property owners of record shall sign and record a Declaration of Restrictions with the County Recorder in a form satisfactory to the Zoning Administrator consenting to the operations and requirements described in this chapter and as otherwise permitted by State lawstating, as applicable, that 1) the ADU or JADU shall not be sold separately from the primary residential unit on the lot, 2) the ADU shall only be rented for rental terms longer than thirty (30) days, and 3) an owner of the property shall live in either the primary residence or JADU, if there is a JADU on the property. The ADU or JADU shall be found to be in non-compliance with the Zoning Code if the City finds the Declaration of Restrictions has been breached.
(Ord. 2020-04 § 2, 2020; Ord. 2017-08 § 2 (part), 2017; Ord. 2010-02 § 1 (part), 2010)

17.70.060 AFFORDABLE HOUSING INCENTIVE.

The city may, subject to the availability of funds and approval of the City Council, allow any applicable city development impact fees for accessory dwelling units to be paid from the city's available affordable housing fund for any new accessory dwelling unit rented to eligible very low and low income households after recording a Housing Affordability Control Agreement, subject to the review and approval of the City Attorney that shall run with the property for fifty five (55) years.

Owners of accessory dwelling units affordable to very low income households shall be eligible for complete reimbursement of city development impact fees upon recordation of the Affordability Control Agreement. Owners of accessory dwelling units affordable to low income households shall be eligible for reimbursement of seventy-five percent (75%) of the city development impact fees based on the available balance of the city's affordable housing fund established by the City Council for this purpose. Maximum annual rents, adjusted for accessory dwelling unit household size, shall be calculated by the City Manager or his/her designee annually based on published Contra Costa County income limits provided by the State Department of Housing and Community Development. Any reimbursement payment shall be repaid, along with five percent (5%) monthly interest charge, as well as the city's housing affordability monitoring expenses if an affordability control agreement is violated during the affordability period.
(Ord. 2020-04 § 2, 2020; Ord. 2017-08 § 2, 2017)

4. Pinole Municipal Code Chapter 17.71 SB9 Urban Lot Split and Unit Development [New Chapter]
Full Chapter included.

All text is new text, shown in bold and underline.

CHAPTER 17.71
SB9 URBAN LOT SPLIT AND UNIT DEVELOPMENT
Sections:

17.71.010 Purpose.

17.71.020 Applicability.

17.71.030 Definitions.

17.71.040 Eligibility.

17.71.050 Application Review Process.

17.71.060 Standards and Requirements for Urban Lot
Splits.

17.71.070 Standards and Requirements for Unit
Development.

17.71.080 Declaration of Restriction.

17.71.010 PURPOSE
The purpose of this chapter is to establish procedures and standards for reviewing urban lot split and unit development projects proposed under the provisions of Senate Bill 9 (SB 9), as set forth in California Government Code § 65852.21 and 66411.7.

17.71.020 APPLICABILITY
The regulations and standards contained in this chapter shall apply to projects proposing to use the provisions of SB 9 to create a unit, urban lot split, or both, and shall be in addition to any other applicable development standards and regulations contained elsewhere within Title 17 Zoning Code. Projects proposed under SB 9 shall meet eligibility criteria established in this Chapter, consistent with California Government Code § 65852.21 and 66411.7. This Chapter does not apply to construction of accessory dwelling units and junior accessory dwelling units under Chapter 17.70.

17.71.030 DEFINITIONS
For the purposes of this Chapter, the following definitions apply to projects proposing an urban lot split or unit development under the provisions of SB 9.

A. Single Family Residential Zoning District. Single family residential zoning districts, for the purposes of this Chapter, include Low Density Residential (LDR) and Suburban Residential (R-1).

B. Unit Development. The development of a primary dwelling unit, subject to the standards and requirements of this Chapter.

C. Urban Lot Split. A subdivision of one parcel located in a single family residential zoning district into two parcels, subject to the standards and requirements of this Chapter.

D. High-quality Transit Corridor. As defined in subdivision (b) of Section 21155 of the Public Resources Code, a high-quality transit corridor means a corridor with fixed route bus service with service intervals no longer than 15 minutes during peak commute hours.

E. Major Transit Stop. As defined in Section 21064.3 of the Public Resources Code, a major transit stop means a site that contains any of the following: (a) An existing rail or bus rapid transit station, (b) A ferry terminal served by either a bus or rail transit service, or (c) The intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods.

F. Specific, Adverse Impact. As defined in Section 65589.5(d)(2), specific, adverse impact means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified written public health or safety standards, policies, or conditions as they existed on the date the application was deemed complete. The following shall not constitute a specific, adverse impact upon the public health or safety:

1. Inconsistency with the zoning ordinance or general plan land use designation.

2. The eligibility to claim a welfare exemption under subdivision (g) of Section 214 of the Revenue and Taxation Code.

17.71.040 ELIGIBILITY
A. General Criteria. Projects for a proposed urban lot split or unit development are required to meet the general eligibility criteria provided below:

1. Single Family Residential Zoning District. The parcel must be located in a single family residential zoning district.

2. Not Withdrawn from Rental. The property is not a parcel where the owner had withdrawn accommodations

from rent or lease (as a residential hotel), under Chapter 12.75 (commencing with Section 7060) of Division 7 of Title 1, within the last fifteen (15) years.

3. Not Historic. The property is not listed as a historic property or in a historic district under local or State register of historic resources.

B. Urban Lot Split Criteria. Projects for a proposed urban lot split are required to meet additional eligibility criteria provided below:

1. Previous Urban Lot Split Limitations. An urban lot split may be conducted only where all of the following applies:
a. The parcel has not been established through a prior SB9 urban lot split. b. Neither the owner nor any person acting in concert with the owner has subdivided an adjacent parcel through a prior SB9 urban lot split.

2. Limitations on demolition or alteration of certain existing housing:
a. No demolition or alteration of housing with a recorded affordability restriction. b. No demolition or alteration of housing under rent or price control. c. No demolition or alteration of housing that has been occupied by a tenant in the last three (3) years.

C. Unit Development Criteria. Projects for a proposed unit development are required to meet additional eligibility criteria provided below:

1. Floor Area. Units shall be consistent with maximum unit sizes established under this Chapter.

2. Limitations on demolition or alteration of certain existing housing:
a. No demolition or alteration of housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. b. No demolition or alteration of housing under rent or price control. c. No demolition or alteration of housing that has been occupied by a tenant in the last three (3) years.

D. Locational Limitation Criteria. Projects shall not be located on a site that is any of the following, consistent with California Government Code Section 65913.4(a)(6)(B) to 65913.4(a)(6)(K):

1. Prime Farmland or Farmland of Statewide Importance. Prime farmland or farmland of statewide importance, as defined pursuant to United States Department of Agriculture land inventory and monitoring criteria, as modified for California, and designated on the maps prepared by the Farmland Mapping and Monitoring Program of the Department of Conservation, or land zoned or designated for agricultural protection or preservation by a local ballot measure that was approved by the voters of that jurisdiction.

2. Wetlands. Wetlands, as defined in the United States Fish and Wildlife Service Manual, Part 660 FW 2 (June 21, 1993).

3. Very High Fire Hazard Severity Zone. Within a very high fire hazard severity zone, as determined by the Department of Forestry and Fire Protection pursuant to Section 51178, or within the state responsibility area, as defined in Section 4102 of the Public Resources Code.
a. This does not apply to sites that have adopted fire hazard mitigation measures pursuant to existing building standards or state fire mitigation measures applicable to the development, including, but not limited to, standards established under all of the following or their successor provisions: (i) Section 4291 of the Public Resources Code or Section 51182, as applicable; (ii) Section 4290 of the Public Resources Code; (iii) Chapter 7A of the California Building Code (Title 24 of the California Code of Regulations).

4. Hazardous Waste Site. A hazardous waste site that is listed pursuant to Section 65962.5 or a hazardous waste site designated by the Department of Toxic Substances Control pursuant to Section 25356 of the Health and Safety Code, unless either of the following apply:
a. The site is an underground storage tank site that received a uniform closure letter issued pursuant to subdivision (g) of Section 25296.10 of the Health and Safety Code based on closure criteria established by the State Water Resources Control Board for residential use or residential mixed uses. This section does not alter or change the conditions to remove a site from the list of hazardous waste sites listed pursuant to Section 65962.5. b. The State Department of Public Health, State Water Resources Control Board, Department of Toxic Substances Control, or a local agency making a determination pursuant to subdivision (c) of Section 25296.10 of the Health and Safety Code, has otherwise determined that the site is suitable for residential use or residential mixed uses.

5. Earthquake Fault Zone. Within a delineated earthquake fault zone as determined by the State Geologist in any official maps published by the State Geologist, unless the development complies with applicable seismic protection building code standards adopted by the California Building Standards Commission under the California Building Standards Law (Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code), and by any local building department under Chapter 12.2 (commencing with Section 8875) of Division 1 of Title 2.

6. Flood Hazard Zone. Within a special flood hazard area subject to inundation by the 1 percent annual chance flood (100-year flood) as determined by the Federal Emergency Management Agency in any official maps published by the Federal Emergency Management Agency. If a development proponent is able to satisfy all applicable federal qualifying criteria in order to provide that the site satisfies this subparagraph and is otherwise eligible for streamlined approval under this section, a local government shall not deny the application on the basis that the development proponent did not comply with any additional permit requirement, standard, or action adopted by that local government that is applicable to that site. A development may be located on a site described in this subparagraph if either of the following are met:
a. The site has been subject to a Letter of Map Revision prepared by the Federal Emergency Management Agency and issued to the local jurisdiction.
b. The site meets Federal Emergency Management Agency requirements necessary to meet minimum flood plain management criteria of the National Flood Insurance Program pursuant to Part 59 (commencing with Section

59.1) and Part 60 (commencing with Section 60.1) of Subchapter B of Chapter I of Title 44 of the Code of Federal Regulations.

7. Floodway. Within a regulatory floodway as determined by the Federal Emergency Management Agency in any official maps published by the Federal Emergency Management Agency, unless the development has received a no-rise certification in accordance with Section 60.3(d)(3) of Title 44 of the Code of Federal Regulations. If a development proponent is able to satisfy all applicable federal qualifying criteria in order to provide that the site satisfies this subparagraph and is otherwise eligible for streamlined approval under this section, a local government shall not deny the application on the basis that the development proponent did not comply with any additional permit requirement, standard, or action adopted by that local government that is applicable to that site.

8. Conservation Land. Lands identified for conservation in an adopted natural community conservation plan pursuant to the Natural Community Conservation Planning Act (Chapter 10 (commencing with Section 2800) of Division 3 of the Fish and Game Code), habitat conservation plan pursuant to the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), or other adopted natural resource protection plan.

9. Habitat for Protected Species. Habitat for protected species identified as candidate, sensitive, or species of special status by state or federal agencies, fully protected species, or species protected by the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), the California Endangered Species Act (Chapter 1.5 (commencing with Section 2050) of Division 3 of the Fish and Game Code), or the Native Plant Protection Act (Chapter 10 (commencing with Section 1900) of Division 2 of the Fish and Game Code).

10. Conservation Easement. Lands under a conservation easement.

17.71.050 APPLICATION REVIEW PROCESS
A. Application Approval Consideration.

1. Applications for urban lot splits and unit development meeting the standards and requirements of this Chapter shall be ministerially approved without public hearings or discretionary review.

2. Applications under this Chapter shall be approved or denied within 60 days from the date the Planning Division receives a completed application, consistent with the provisions of California Government Code Section 65852.21 and 66411.7.
a. If an application is denied, the Planning Division shall provide the applicant a full set of written comments with a list of items that are defective or deficient and a description of how the application can be remedied by the applicant.

B. Urban Lot Split Application. The applicant shall submit an application for a proposed urban lot split to the Planning Division for ministerial review to verify consistency with eligibility criteria under SB 9, required application checklist items, and compliance with standards and requirements under this Chapter and the Subdivision Map Act (commencing with Government Code Section 66410). An application that meets the standards and requirements under this Chapter and all applicable objective requirements of the Subdivision Map Act shall be approved ministerially.

Notwithstanding anything in this Code to the contrary, such approval shall be granted by the City Engineer, and shall not require approval from the Planning Commission or City Council.

C. Unit Development Application. The applicant shall submit an application for the design of a proposed unit to the Planning Division for ministerial review to verify consistency with eligibility criteria under SB 9, required application checklist items, and compliance with standards and requirements under this Chapter. An application that meets the standards and requirements under this chapter shall be approved ministerially by the Zoning Administrator.

D. Tree Removal in Conjunction with Applications. The removal of any protected tree in conjunction with construction proposed under the provisions of this Chapter shall require a tree removal permit. Notwithstanding the requirements of Chapter 17.96 Tree Removal, a tree removal permit application shall be processed ministerially at the staff level and concurrently with an application proposed under this Chapter.

17.71.060 STANDARDS AND REQUIREMENTS FOR URBAN LOT SPLITS A. General Development Standards. The project shall be consistent with the standards of the zoning district applicable to the site, except as provided under this Chapter. Except for the standards set forth in this chapter, no development standards shall apply if they would have the effect of physically precluding the construction of two units of at least 800 square feet on the parcel(s).

B. Total Lots. An urban lot split conducted under the provision of this chapter shall result in no more than two (2) lots.

C. Total Units per Lot. No more than two (2) total units, inclusive of primary dwelling units, accessory dwelling units, and junior accessory dwelling units, may be located on each parcel created through the urban lot split.

D. Lot Sizes.

1. Each parcel shall be a minimum of one thousand two hundred (1,200) square feet.

2. A parcel may be no smaller than forty percent (40%) of the original parcel size and no larger than sixty percent (60%) of the original parcel size.

E. Setbacks

1. Each parcel shall allow for minimum side and rear setbacks that are minimum four (4) feet. Parcels with a front lot line shall provide for a front setback that is a minimum of twenty (20) feet, except as otherwise allowed per Chapter 17.56 Yard and Setback Regulations.

2. No setback required for an existing structure or a structure constructed in the same location with the same dimensions.

F. Access to Streets and Services

1. Parcels created through the urban lot split shall have access to, provide access to, or adjoin the public rightof-way. a. Access shall meet objective design standards for circulation, pedestrian and vehicular access, or driveways, as may be applicable.

2. Project may be required to establish easements if required by the City for the provision of public services and facilities, as provided under Government Code Section 66411.7(e).

G. Parking.

1. A minimum of one off-street parking space shall be required per unit, except for the following:
a. The parcel is located within a half mile of a high-quality transit corridor or major transit stop; or b. The parcel is located within one block of a car share vehicle.

2. Parking may be provided in any configuration on the parcel, including in the driveway, provided the project complies with the following requirements:
a. Parking design and dimensions are consistent with the standards under Chapter 17.48 Parking and Loading Requirements.
b. Parking does not obstruct pedestrian or vehicular access to other units and parking spaces.

H. Ongoing Requirements.

1. Residential Use. Primary uses on lots created through an urban lot split under this Chapter are limited to residential uses.

2. Occupancy. The property owner must intend to occupy one of the units as their principal residence for a minimum of three (3) years from the date of urban lot split approval. Except, such occupancy is not required for community land trusts or qualified nonprofit corporations, as provided by Government Code Section 66411.7. a. As part of the application, the owner shall submit a signed affidavit stating that they intend to occupy one of the housing units on the site as their principal residence for a minimum of three (3) years from the date of the approval of the urban lot split.

3. No Short-Term Rentals. Rental of any units created through SB 9 are required to be for terms longer than thirty (30) days.

17.71.070 STANDARDS AND REQUIREMENTS FOR UNIT DEVELOPMENT A. General Development Standards. The project shall be consistent with the standards of the zoning district applicable to the site, except as provided under this Chapter.

B. Total Units.

1. Up to two (2) primary units per parcel may be created through the provisions of this Chapter. Additionally, a project may not result in more than two (2) primary units per parcel.

C. Setbacks.

1. Front setback. On a parcel with a front lot line separating the lot from a street, the front setback shall be a minimum of twenty (20) feet or as otherwise allowed per Chapter 17.56 Yard and Setback Regulations, unless such setbacks would physically preclude the construction of the unit(s) or preclude the unit(s) from being at least eight hundred (800) square feet.

2. Side setback. The side setback shall be a minimum of four (4) feet.

3. Rear setback. The rear setback shall be a minimum of four (4) feet.

4. Setbacks from Other Structures. The minimum distance between structures on the same parcel shall be six (6) feet, unless this would physically preclude the construction of the unit(s) or preclude the unit(s) from being at least eight hundred (800) square feet.

5. Existing Structure Setback Exceptions. No setback shall be required for an existing structure or a structure constructed in the same location and to the same dimensions as an existing structure.

E. Parking.

1. A minimum of one off-street parking space shall be required per unit, except no minimum parking shall be required for the following:
a. The parcel is located within one-half mile walking distance of a high-quality transit corridor or major transit stop; or
b. The parcel is located within one block of a car share vehicle.

2. Parking may be provided in any configuration on the parcel, including in the driveway, provided the project complies with the following requirements:
a. Parking design and dimensions are consistent with the standards under Chapter 17.48 Parking and Loading Requirements.
b. Parking does not obstruct pedestrian or vehicular access to other units and parking spaces.

F. Ongoing Requirements.

1. No Short-Term Rentals. Rental of units created through SB 9 are required to be for terms longer than thirty (30) days.

G. Objective Design Standards. Projects shall be consistent with the development standards of the zoning district applicable to the site, except as provided under this Chapter. Except for the standards set forth in this chapter, no development standards shall apply if they would have the effect of physically precluding the construction of two units of at least 800 square feet on the parcel(s).

17.71.080 DECLARATION OF RESTRICTION
Prior to building permit final, all property owners of record shall sign and record a Declaration of Restrictions with the County Recorder in a form satisfactory to the Zoning Administrator consenting to the operations and requirements described in this chapter and as otherwise permitted by State law. An urban lot split or unit development shall be found to be in non-compliance with the Zoning Code if the City finds the Declaration of Restrictions has been breached.

17.71.090 INTERPRETATION
If any portion of this Chapter conflicts with applicable State law, State law shall supersede this Section. Any ambiguities in this Section shall be interpreted to be consistent with State law

Attachment D. Housing Element Programs Associated with Second Set of Revisions
[Highlighted text was addressed in the revisions]
Program 4. Facilitate ADU Production
To encourage and increase ADU production in the City, a number of efforts are included. The programs are intended to help the City meet its target projection of three ADUs per year.

This program works in conjunction with Program 23, ADU, JADU, and SB 9 Education. If annual production and affordability rates do not match the estimates included in the Housing Resources Section, the City will update the ADU strategy to ensure that the City continues to maintain adequate capacity for all income levels. • Updated ADU Ordinance. The City has submitted its ADU ordinance to the State and the State acknowledge that the ordinance was received. Should the State require revisions to the ordinance, it will be modified to reflect the requested revisions within one year upon receipt of the comments.
• ADU Tracking. The City will track and monitor its ADU production to ensure that annual production achieves the RHNA projections (3 ADUs/year). The City will begin to request information about ADU rents from applicants to better track the affordability of proposed ADUs. As a part of ADU tracking, the City will analyze geographic distribution of ADUs biennially to understand which neighborhoods are building ADUs. • ADU Fast Track Program. The City will develop a process to fast track ADU applications through plan check by moving them to the top of the queue and reducing plan check turnaround times.
• ADU Amnesty Program. To ensure safe and adequate housing, the City will develop an ADU amnesty program for existing, unpermitted ADUs to receive inspections and bring units into compliance with code and permits without risk of code enforcement action, significant fee reductions and assistance in determining necessary improvements. • Fee Waivers for Affordable ADUs. Current successor funds require an affordability covenant length of 55 years. The City will modify Zoning Ordinance Section 17.70.060 to shorten the required ADU covenant length (for example, for 5 – 15 years) pending alternate funding to offset the fee waivers for ADUs over 750 square feet that are made available to lower or moderate income households for a shorter period of time. The City will pursue funding sources, such as PLHA or in-lieu fees, funds for this effort.

Program 5. SB 9 Technical Assistance and Facilitation
The City is in the process of creating informational materials to assist applicants and property owners in submitting applications for the development of SB 9 projects, which would highlight permit requirements and development standards to promote greater clarity in preparing submittals. Materials are anticipated to be completed in 2023. In the interim, City staff provides guidance to applicants and owners through correspondences by phone, email,

and counter meetings to help applicants understand State standards and provisions under SB 9, discuss preliminary design concepts, and explain permit procedures. Additionally, the City is in the process of establishing objective design standards. Objective design standards would provide greater predictability and clarity regarding design attributes for new residential development and support ministerial review and are anticipated to be completed within two years of Housing Element adoption.

The City has recently received its first SB 9 application. In an effort to encourage and facilitate development in single family zone, the City will pursue a number of technical assistance and facilitation efforts including:
• Updating the zoning code. This will include a review of developmental standards that could constrain SB 9 development and updating the zoning code to remove such constraints.
• Creating a simplified lot split form to process SB 9 projects and provide the form online
• Ensure objective design standards for SB 9 units (Program 13) • Provide enhanced technical assistance through Program 4, which includes implementing new software to provide residents and developers with tools to determine if an ADU or SB 9 unit can be put on their property. The software will provide information regarding zoning, rebate opportunities, opportunities for fee waivers available for affordable ADU and SB 9 development, and the ADU amnesty program. The objective design standards and simplified lot form for SB 9 units will be made available through the software.

This program works in conjunction with Program 23, ADU, JADU, and SB 9 Education, which provide a variety resources and outreach to homeowners regarding SB 9.

Program 12. Zoning Amendments
The City is including a number of zoning amendments as identified in the constraints section to ensure compliance with state law and remove constraints to development. Amendments to the zoning ordinance are as follows.
• Amend the Emergency Shelter ordinance to comply with AB 139 and to ensure that standards for emergency shelters are subject to the same standards as other uses in the same zone and parking requirements are based on staffing levels only. • Amend the zoning ordinance pursuant to Government Code Section 65583 to allow for Low Barrier Navigation Centers by right in areas zoned for mixed uses and nonresidential zones that permit multifamily uses.
• Amend the zoning ordinance in RMU to permit manufactured homes on permanent foundations as if they were single-family homes.
• Amend the zoning ordinance to comply with SB 9 standards (California Government Code section 65852.21).
• Review and revise standards and definitions for both group homes and residential care facilities to ensure that they are fully compliant with all appropriate state laws and that there are no constraints on group homes in the Zoning Code. This includes

an amendment to allow group homes in the R zone as a permitted use by right as is allowed in all other residential zones and adding a definition of group residential to the Zoning Code.
• Review the definition of family and revise as appropriate to ensure that the definition does not require, or imply that it requires a single lease or rental agreement. • Amend the zoning ordinance to comply with state density bonus law (California Government Code section 65915). Specifically the update will increase the maximum density bonus from 35 to 50 percent, add student housing as a housing type that is eligible for density bonus incentives, reduce parking from 2 to 1.5 spaces for two and three bedroom units and from 2.5 to 2 spaces for four or more bedroom units. The City is complying with state density bonus law though the code is not yet updated. • The City will reduce the level of approval for a parking reduction or shared parking agreement from a conditional use permit to an administrative use permit, which is approved by the Zoning Administrator. The City will review the four criteria for a parking reduction to evaluate additional criteria or/and reduce the minimum number of required criteria.
• The City will further study parking requirements and reduce them so they do not post a constraint on development. Specifically, the City will do one or more of the following:
remove or reduce guest parking, remove covered parking requirements, allow tandem parking, or reduce minimum parking requirements. The City is pursuing assistance with parking evaluation and reduction through MTC-ABAG’s parking policy technical assistance.

Program 13. SB 330 Objective Design Standards and SB 35 Streamlining Compliance SB 330 enacts changes to local development policies, permitting, and processes that will be in effect through January 1, 2025. SB 330 places new criteria on the application requirements and processing times for housing developments; prevents localities from decreasing the housing capacity of any site, such as through downzoning or increasing open space requirements, if such a decrease would preclude the jurisdiction from meeting its RHNA housing targets; prevents localities from establishing non-objective standards; and requires that any proposed demolition of housing units be accompanied by a project that would replace or exceed the total number of units demolished. Additionally, any demolished units that were occupied by lower-income households must be replaced with new units affordable to households with those same income levels.

The City will ensure compliance with SB 330, by requiring any demolished units that were occupied by lower-income households to be replaced with new units affordable to households with those same income levels and establishing objective design standards.

Pursuant to SB 330, the City will review and amend the Zoning Ordinance and Design Review Guidelines to ensure that all development standards, design guidelines, and findings are objective, and promote certainty in the planning and approval process. The objective standards will also include standards for SB 9 projects. The City has begun the process and is currently cataloging existing objective and subjective standards. Through implementing

objective design standards, the City is aiming to reduce the time it takes to complete the comprehensive design review process.

The City will review its approval processes to accommodate SB 35 streamlined applications and by-right applications for permanent supportive housing and navigation centers. The City will provide information regarding the SB 35 process on its website.

CITY COUNCIL
REPORT 12.A.

DATE: JANUARY 21, 2025
TO: MAYOR AND COUNCIL MEMBERS
FROM: MARKISHA GUILLORY, FINANCE DIRECTOR
SUBJECT: FISCAL YEAR (FY) 2023/24 ANNUAL COMPREHENSIVE FINANCIAL REPORT

RECOMMENDATION
Staff recommends that the City Council receive and accept the Annual Comprehensive Financial Report (ACFR) for the fiscal year (FY) ended June 30, 2024.

BACKGROUND
At the close of each fiscal year, the City engages an external auditor to audit its financial statements. The purpose of a financial audit, which is conducted as a best practice in both the public and private sectors, is to provide users of financial statements with reasonable assurance that they can rely on the statements to make informed decisions. Financial statements are the tool that management uses to give an accounting of the stewardship of the financial resources for which it is responsible.

At the conclusion of year-end financial audit, the City publishes the ACFR, which contains the City of Pinole’s basic financial statements, auditor’s report, and important supplemental information regarding that fiscal year. The ACFR is intended to present the reader with a comprehensive view of the City’s financial position and operational activities.

The City’s Finance Department is responsible for preparing the ACFR and assumes responsibility for its accuracy, completeness, and fairness. The Pun Group, the City’s auditors, audited the basic financial statements included in the ACFR to provide reasonable assurance that the financial statements are free of material misstatement and are fairly presented in accordance with generally accepted accounting principles (GAAP). The Pun Group issued an unmodified opinion on the City’s financial statements; this is the highest possible rating. This means that the financial statements are presented, in all material respects, in accordance with applicable financial reporting guidelines.

Consistent with sound fiscal management practices and prudent public policy, City staff is presenting the ACFR to the City Council. The ACFR can be found on the City’s website at: https://www.pinole.gov/financial-reports/.

REVIEW AND ANALYSIS
The ACFR (Attachment A) is organized into five sections:

• An introduction, which includes the Transmittal Letter and the Independent Auditor’s Report;
• Management’s Discussion and Analysis (MD&A);
• Basic Financial Statements and Notes;
• Supplemental Information; and
• Statistical Information.

The MD&A section (pages 5-17) of the ACFR presents an overview and analysis of the City’s financial activities for the fiscal year ended June 30, 2024. Staff encourages readers to consider the information presented in this section in conjunction with additional information provided in the Transmittal Letter (pages v-viii), the City’s basic financial statements (pages 19-44), and the notes to the financial statements (pages 45-92). Additionally, the ACFR is supplemented by other auditors’ reports on the matters of internal controls, compliance, and governance (Attachments B-E).

Financial Highlights
Following is a summary of financial highlights from the MD&A section of the ACFR for the year ended June 30, 2024.
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of FY 2023/24 by $38.9 million (net position).

Of this amount, $29.7 million is restricted for specific purposes (restricted net position), $38.9 million is the net investment in capital assets and $29.7 million represents a deficit in unrestricted net position.
• The City’s net position decreased by $2.3 million, a 5.5% decrease at the close of FY 2023/24 as compared to FY 2022/23. The decrease is primarily the result of the decrease in cash and investments. Overall, governmental activities net position decreased by $4.1 million while business-type activities increased by $1.8 million. • The General Fund balance at the close of FY 2023/24 was $32.3 million, which has various levels of restrictions. The General Fund as presented in the financial statements is comprised of the main General Fund, Measure S 2006 Fund, Measure S 2014 Fund, General Reserve Fund, Equipment Reserve Fund, and Section 115 Trust Fund. Of the $32.3 million fund balance, $7.8 million is unassigned. The unassigned fund balance represents the portion that is not restricted, committed, or assigned for specific purposes.

This ACFR meets all of the requirements to achieve the highest standard in government accounting and financial reporting for an ACFR, the Certificate of Achievement for Excellence in Financial Reporting issued by the Government Finance Officers Association of the United States and Canada (GFOA). The City has received this certificate annually for the last twentysix consecutive fiscal years and expects to receive this certificate for the FY 2023/24 ACFR.

FISCAL IMPACT
There is no fiscal impact from receiving the FY 2023/24 ACFR.

ATTACHMENTS
A. Annual Comprehensive Financial Report for the Year Ended June 30, 2024 B. Communication at Conclusion Letter for the Year Ended June 30, 2024 C. Independent Accountant's Report on Agreed-Upon Procedures Applied to Schedule of Measure S 2006 Revenues and Expenditures
D. Independent Accountant's Report on Agreed-Upon Procedures Applied to Schedule of Measure S 2014 Revenues and Expenditures
E. Independent Accountant's Report on Agreed-Upon Procedures Applied to Appropriations Limit Schedule for the Year Ending June 30, 2025

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City of Pinole
Pinole, California
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2024
Prepared by the
Finance Department

City of Pinole
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents
i
Page
INTRODUCTORY SECTION (Unaudited)
Table of Contents ........................................................................................................................................................ i Letter of Transmittal ................................................................................................................................................... v Principal Officers ...................................................................................................................................................... ix Organization Chart ..................................................................................................................................................... x GFOA Certificate of Achievement ............................................................................................................................ xi

FINANCIAL SECTION
Independent Auditors’ Report ................................................................................................................................ 1 Management’s Discussion and Analysis (Unaudited) ........................................................................................... 5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ............................................................................................................................ 22 Statement of Activities ................................................................................................................................ 24 Fund Financial Statements:

Governmental Funds Financial Statements:

Balance Sheet ........................................................................................................................................ 31 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ...................................................................... 32 Statement of Revenues, Expenditures, and Changes in Fund Balances ............................................... 33 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ................................................................................................................... 34 Proprietary Funds Financial Statements:

Statement of Net Position ..................................................................................................................... 37 Statement of Revenues, Expenses and Changes in Net Position .......................................................... 38 Statement of Cash Flows ...................................................................................................................... 39 Fiduciary Funds Financial Statements:

Statement of Fiduciary Net Position ..................................................................................................... 43 Statement of Changes in Fiduciary Net Position .................................................................................. 44 Notes to the Basic Financial Statements ........................................................................................................ 51

City of Pinole
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents (Continued)
ii
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Unaudited):

Budgetary Information ....................................................................................................................................... 95 Schedule of Revenues, Expenditures, and Change in Fund Balance Budget and Actual Schedules:

General Fund ............................................................................................................................................... 97 Housing Programs Special Revenue Fund .................................................................................................. 98 Building and Planning Special Revenue Fund ............................................................................................ 99 Schedule of the City’s Proportionate Share of the Net Pension Liability and Related Ratios:

Cost Sharing Multiple Employer Miscellaneous Plan .............................................................................. 100 Cost Sharing Multiple Employer Safety Plan ........................................................................................... 102 Schedules of Contributions – Pension:

Cost Sharing Multiple Employer Miscellaneous Plan .............................................................................. 104 Cost Sharing Multiple Employer Safety Plan ........................................................................................... 106 Schedule of Changes in Net Other Postemployment Benefits Liability and Related Ratios ........................... 108 Supplementary Information:

Non-Major Governmental Funds:

Combining Balance Sheet ......................................................................................................................... 115 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................................................................................................. 119 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual:

Public Works Capital Projects ............................................................................................................ 123 Growth Impact Special Revenue Fund ............................................................................................... 124 Gas Tax Special Revenue Fund .......................................................................................................... 125 Parkland Dedication Special Revenue Fund ....................................................................................... 126 Measure C Special Revenue Fund ...................................................................................................... 127 Storm Water Special Revenue Fund ................................................................................................... 128 Refuse Management Special Revenue Fund ....................................................................................... 129 Adjudicated Asset Seizure Special Revenue Fund ............................................................................. 130 Police Special Revenue Fund ............................................................................................................. 131 Cable TV Special Revenue Fund ........................................................................................................ 132 Recreation Special Revenue Fund ...................................................................................................... 133 Development Services Special Revenue Fund ................................................................................... 134 Solid Waste Special Revenue Fund .................................................................................................... 135 CASP Certification & Training Special Revenue Fund...................................................................... 136 Rate Stabilization Special Revenue Fund ........................................................................................... 137 Fiduciary Funds:

Combining Statement of Fiduciary Net Position ................................................................................ 140 Combining Statement of Changes in Fiduciary Net Position ............................................................. 142

City of Pinole
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents (Continued)
iii
Page
STATISTICAL SECTION (Unaudited)
Table of Contents ................................................................................................................................................... 147 Financial Trends:

Net Position by Component – Last Ten Fiscal Years ...................................................................................... 148 Changes in Net Position – Last Ten Fiscal Years ............................................................................................ 150 General Fund Tax Revenue by Source – Last Ten Fiscal Years...................................................................... 153 Fund Balances Governmental Funds – Last Ten Fiscal Years ........................................................................ 154 Changes in Fund Balances Governmental Funds – Last Ten Fiscal Years ...................................................... 156 Revenue Capacity:

Assessed and Estimated Actual Value of Taxable Property – Last Ten Fiscal Years ..................................... 159 Direct and Overlapping Governments – Last Ten Fiscal Years ...................................................................... 160 Principal Property Taxpayers – Current and Nine Years Prior ........................................................................ 161 Property Tax Levies and Collections – Last Ten Fiscal Years ........................................................................ 163 Taxable Sales by Category – Last Ten Fiscal Years ........................................................................................ 164 Direct and Overlapping Sales Tax Rates – Last Ten Fiscal Years .................................................................. 166 Top 25 Sales Tax Producers ............................................................................................................................ 167 Debt Capacity:

Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ......................................................................... 168 Ratios of Net General Bonded Debt Outstanding – Last Ten Fiscal Years ..................................................... 169 Direct and Overlapping Governmental Activities Debt ................................................................................... 170 Computation of Legal Debt Margin – Last Ten Fiscal Years .......................................................................... 171 Revenue Bond Coverage – Last Ten Fiscal Years ........................................................................................... 172 Demographic and Economic Information:

Demographic Statistics – Last Ten Fiscal Years ............................................................................................. 173 Principal Employers – Current and Nine Years Ago ....................................................................................... 175

Operating Information:

Operating Indicators by Function/Program – Last Ten Fiscal Years ............................................................... 176 Full-Time Equivalent City Government Employees by Function/Program – Last Ten Fiscal Years .............. 179 Capital Asset Statistics by Function/Program – Last Ten Fiscal Years ........................................................... 180 Other reports:

Independent Auditors’ Report on Internal Control Over Financial Reporting and Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards....................................................................................................... 183

iv
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v















vi















vii















viii

ix

ELECTED OFFICIALS

Maureen Toms Cameron Sasai Anthony Tave
Mayor Mayor Pro Tempore Council Member
Devin Murphy Norma Martínez-Rubin Roy Swearingen
Council Member Council Member City Treasurer

DEPARTMENT HEADS
City Manager Kelcey Young
City Attorney (Contract) Eric Casher
City Clerk Heather Bell
Community Development Director Lilly Whalen
Community Services Director Andrea Dwyer
Finance Director Markisha Guillory
Human Resources Director Stacy Shell
Police Chief (Interim) Matt Avery
Public Works Director Sanjay Mishra

Residents of Pinole
City Council City Treasurer
City Manager City Clerk City Attorney
Community
Development
Community
Services Finance Human Resources Police Public Works
-Planning-Building-Code Enforcement-Affordable Housing-EconomicDevelopment-RedevelopmentSuccessor Agency -Parks and Recreation:
-Administration-Tiny Tots
-Youth Center-Senior Center-Swim Center
-Tennis Court
-Memorial Hall
-Special Events-Library and AnimalServicesCommunity Healthand Food-Pinole Cable AccessTelevision (PCTV) -AccountingOperations:
-Accounts Payable-Accounts Receivable-Payroll Processing -Audits and Financial
Reporting-Budget Management-Long-Range FinancialPlanning-Purchasing-TreasuryManagement-Debt and BondAdministration-Business LicenseAdministration -Human ResourcesAdministration andRisk Management-Labor Relations-Employee Relations-Recruitment andSelection-BenefitsAdministration-OrganizationalTraining andDevelopment-Classification andCompensation -Police Operations-Police SupportServices-Police Dispatch WestBay CommunicationsCenter -Administration andEngineering-Road Maintenance-Facility Maintenance-Park Maintenance-Storm Water-Waste Reduction-Water PollutionControl Plant-Sewer Collection-Landscape andLighting AssessmentDistrict-Real Estate andProperty Management-Fleet Management Office of the City
Manager
-Administration and Programs-Information Technology
Note: The Contra Costa County Fire Protection District provides fire safety services to Pinole residents. x

Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Pinole
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
xi

xii
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200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
of the City of Pinole
Pinole, California
Report on the Audit of the Financial Statements
Opinions
We have audited accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Pinole, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2024, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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

Emphasis of Matter
Prior Period Adjustment
As discussed in Note 19 to the basic financial statements, correction was made to deposit payable in the Building and Planning fund in the amount of $109,982. Accordingly, beginning fund balance as of July 1, 2023 were restated to reflect the correction of these errors. Our opinions are not modified with respect to these matters.

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.

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

2 In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

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

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
 exercise professional judgment and maintain professional skepticism throughout the audit.  identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.  evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Budgetary Comparison Schedules, Schedule of City’s Proportionate Share of the Net Pension Liability, Schedules of Contributions – Pension Plans, and Schedule of the City’s Net OPEB Liability and Related Ratios, as listed in the accompanying table of contents, be presented to supplement the basic financial statements. Such 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. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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

3 Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The Combining and Individual Fund Financial Statements and Budgetary Comparison Schedules are presented for purposes of additional analysis and are 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 GAAS. In our opinion, the Combining and Individual Fund Financial Statements and Budgetary Comparison Schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the Introductory and Statistical Sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 27, 2024, on our consideration of City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is 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 City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.

Santa Ana, California
December 27, 2024

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City of Pinole
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
5 This section of the City of Pinole’s (City) Annual Comprehensive Financial Report presents a narrative overview and analysis of the City’s financial activities for the fiscal year (FY) ended June 30, 2024 (FY 2023/24). We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal and the City’s basic financial statements which follow this section.

FINANCIAL HIGHLIGHTS
 The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of FY 2023/24 by $38.9 million (net position). Of this amount, $29.7 million is restricted for specific purposes (restricted net position), $38.9 million is the net investment in capital assets and $29.7 million represents a deficit in unrestricted net position.  The City’s net position decreased by $2.3 million, a 5.5% decrease at the close of FY 2023/24 as compared to FY 2022/23. The decrease is primarily the result of the decrease in cash and investments. Overall, governmental activities net position decreased by $4.1 million while business-type activities increased by $1.8 million.  Governmental funds reported ending balances of $53.8 million, a decrease of $3.4 million in comparison to the prior fiscal year.
 The General Fund balance closed at $32.3 million, of which $7.8 million is unassigned.

OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other required supplementary information and related notes, combining statements for non-major governmental funds, and individual fund financial statements and schedules.

Government-wide Financial Statements
Government-wide Financial Statements are designed to provide readers with a broad overview of City finances, in a manner similar to a private-sector business. The government-wide financial statements include the City (primary government); the City does not have any component units.

The Statement of Net Position presents information on all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as an indicator of whether the financial position of the City is improving or deteriorating.

The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows (accrual basis of accounting). Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in future fiscal periods, such as revenues pertaining to uncollected taxes and expenses pertaining to interest on long-term debt.

City of Pinole
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
6 Both of these government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a substantial portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, public services, recreation, and community development. The business-type activities of the City include wastewater utility. As of February 1, 2012, the activity of the Successor Agency to Pinole Redevelopment Agency (Successor Agency) is reported with the City’s fiduciary funds, which is not included in the government-wide statements since the resources of those funds are not available to support the City’s own programs. The Successor Agency is included as a fiduciary fund as the activities are under the control of an Oversight Board. The City provides administrative services to the Successor Agency to wind down the affairs of the former Redevelopment Agency.

Fund Financial Statements
Fund Financial Statements use fund accounting to segregate accounts for specific activities or objectives, including demonstrating finance-related legal compliance. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds, as described below.

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental funds financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year.

The governmental funds focus is narrower than that of the government-wide financial statements. It is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. This comparison facilitates a better understanding of the long-term impact associated with the government’s near-term financing decisions. The governmental funds balance sheet and the governmental funds statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City maintains several individual governmental funds organized according to their type (general, special revenue, debt service, and capital projects). Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures and changes in fund balances for the major funds (see Notes to Basic Financial Statements).

Data from the remaining non-major governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided as supplementary information in the form of combining statements.

Proprietary funds are generally used to account for services for which the City charges customers – either outside customers or internal units of departments in the City. Proprietary funds provide the same type of information as shown in the government-wide financial statements, only in more detail. The City maintains two types of proprietary funds, enterprise funds and internal service funds, as described below.  Enterprise funds are used to report the same functions presented as business-type activities in the governmentwide financial statements. The City uses enterprise funds to account for the wastewater utility.

City of Pinole
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
7  Internal service funds are used by the City to establish reserves and account for employee benefits, equipment replacement, liability insurance, and retiree medical benefits. These funds serve both governmental and business-type functions and so they are allocated accordingly in the government-wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided as supplementary information in the form of combining statements.

Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Since the resources of these funds are not available to support the City’s own programs, they are not reflected in the government-wide financial statements. The fiduciary funds for the City consist of the Successor Agency to the Pinole Redevelopment Agency Private-Purpose Trust Fund.

Notes to Basic Financial Statements
Notes to Basic Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.

Required Supplementary Information
Required Supplementary Information includes budgetary comparison schedules that have been provided for the major governmental funds to demonstrate compliance with the budget. Required supplementary information also includes schedules showing the City’s progress towards funding its pension plan and other post-employment benefits (OPEB).

The City participates in California’s Public Employees Retirement System (CalPERS) for its pension plan and provides its employees with post-retirement health care benefits (OPEB).

Supplementary Information
Supplementary Information includes information for non-major governmental, non-major enterprise, internal service, and agency funds, and is presented immediately following the required supplementary information.

City of Pinole
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
8 GOVERNMENT-WIDE FINANCIAL ANALYSIS
The following section provides a comparative analysis of government-wide data for FY 2023/24 and FY 2022/23. The Statement of Net Position will be discussed first, followed by a discussion of the Changes in Net Position.

The following table is a summary of the Statement of Net Position as of June 30, 2024 (2024) and June 30, 2023 (2023).

Summary of Net Position

Governmental Activities Business-type Activities Totals 2024 2023 2024 2023 2024 2023
Total %
Change
Assets:

Current and other assets $ 56,203,777 $ 60,053,084 $ 21,628,078 $ 20,196,810 $ 77,831,855 $ 80,249,894 -3.0% Capital assets 31,233,589 30,456,901 36,344,156 37,124,805 67,577,745 67,581,706 0.0% Total assets 87,437,366 90,509,985 57,972,234 57,321,615 145,409,600 147,831,600 -1.6%

Deferred outflows of resources 23,248,917 22,997,360 2,210,810 2,158,595 25,459,727 25,155,955 1.2%

Liabilities:

Current liabilities 3,981,193 2,897,451 2,016,583 1,793,489 5,997,776 4,690,940 27.9% Long-Term liabilities 74,400,891 74,186,551 34,444,412 35,758,627 108,845,303 109,945,178 -1.0% Total liabilities 78,382,084 77,084,002 36,460,995 37,552,116 114,843,079 114,636,118 0.2%

Deferred inflows of resources 15,431,110 15,481,521 1,673,985 1,665,039 17,105,095 17,146,560 -0.2%

Net position:

Net Investment in capital assets 30,973,001 30,207,077 7,975,522 7,718,239 38,948,523 37,925,316 2.7% Restricted 29,675,938 29,854,090 - - 29,675,938 29,854,090 -0.6% Unrestricted (deficit) (43,775,850) (39,119,345) 14,072,542 12,554,816 (29,703,308) (26,574,529) 11.8% Total net position $ 16,873,089 $ 20,941,822 $ 22,048,064 $ 20,263,055 $ 38,921,153 $ 41,204,877 -5.5% Analysis of Net Position
Net position may serve as a useful indicator of a government’s financial position. The City’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows by $38.9 million at the close of FY 2023/24. The City’s combined net position decreased 5.5%, or $2.3 million from the prior fiscal year. This is primarily a result of changes in governmental activities due to a decrease in cash and investments.  Net investment in capital assets (e.g. infrastructure, land, buildings, improvements other than buildings, construction in progress, and equipment), less any related debt used to acquire assets still outstanding, is $38.9 million (100% of the total). The City uses these capital assets to provide services to the community; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since generally capital assets are not used to liquidate these liabilities. The City's net investment in capital assets increased by $1 million (Note 6).  Restricted net position of $29.7 million (76.2% of the total) represents resources that are subject to external restrictions on how they may be used. Of this amount, $8.3 million represents housing net position with $0.4 million of that amount representing properties held for housing resale or redevelopment (Note 5).

City of Pinole
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
9  Unrestricted net position, the part of net position that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation, or other legal requirements, increased by $3.1 million to negative $29.7 million. Governmental activities unrestricted net position was a negative $43.8 million and business-type activities net position was a positive $14.1 million.

Analysis of Activities
The following table reflects the summary of changes in net position for governmental and business-type activities as of June 30, 2024 (2024) and June 30, 2023 (2023).

Governmental Activities Business-type Activities Totals 2024 2023 2024 2023 2024 2023
Total %
Change
Revenues: Program revenues:

Charges for services $ 5,068,161 $ 5,090,558 $ 8,114,292 $ 7,831,703 $13,182,453 $12,922,261 2.0% Operating grants and contributions 2,939,589 5,594,961 - - 2,939,589 5,594,961 -47.5% Capital grants and contributions 500,258 865,743 - - 500,258 865,743 -42.2% Total program revenue 8,508,008 11,551,262 8,114,292 7,831,703 16,622,300 19,382,965 -14.2%

General revenues: Taxes:

Property tax 5,910,711 5,013,845 - - 5,910,711 5,013,845 17.9% Sales tax 9,430,219 9,568,274 - - 9,430,219 9,568,274 -1.4% Franchise tax 901,209 893,814 - - 901,209 893,814 0.8%
Utility tax 2,445,715 2,312,830 - - 2,445,715 2,312,830 5.7% Other taxes 911,622 968,678 - - 911,622 968,678 -5.9%
Motor Vehicle in Lieu 2,319,153 2,219,137 - - 2,319,153 2,219,137 4.5% Gain on disposal of asset - - - - -
Investment earnings (loss) 2,449,243 1,508,707 483,402 (174,689) 2,932,645 1,334,018 119.8% Miscellaneous 124,132 51,658 124,132 51,658 140.3%
Total general revenues 24,492,004 22,536,943 483,402 (174,689) 24,975,406 22,362,254 11.7% Total revenues 33,000,012 34,088,205 8,597,694 7,657,014 41,597,706 41,745,219 -0.3%

Expenses: General government 5,439,951 4,336,508 - - 5,439,951 4,336,508 25.4% Public safety 20,226,459 12,985,795 - - 20,226,459 12,985,795 55.8% Public services 5,734,403 4,391,992 - - 5,734,403 4,391,992 30.6% Recreation 2,275,235 1,926,541 - - 2,275,235 1,926,541 18.1% Community development 2,968,511 2,982,917 - - 2,968,511 2,982,917 -0.5% Interest and fiscal charges 424,186 410,766 - - 424,186 410,766 3.3% Wastewater utility - - 6,812,685 5,787,622 6,812,685 5,787,622 17.7% Total expenses 37,068,745 27,034,519 6,812,685 5,787,622 43,881,430 32,822,141 33.7% Revenues over (under) expenses (4,068,733) 7,053,686 1,785,009 1,869,392 (2,283,724) 8,923,078 -125.6% Changes in Net Position (4,068,733) 7,053,686 1,785,009 1,869,392 (2,283,724) 8,923,078 -125.6% Net position, beginning of year, restated 20,941,822 13,888,136 20,263,055 18,393,663 41,204,877 32,281,799 27.6% Net position, end of year $16,873,089 $20,941,822 $22,048,064 $20,263,055 $38,921,153 $41,204,877 -5.5%

City of Pinole
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
10 Governmental Activities
Governmental activities net position decreased by $4.1 million. Key elements of the change in net position are as follows:
 Program revenues, mainly operating grants and contributions, reflected a decrease of $3.0 million, or 35.8% less than FY 2022/23. The increase was primarily attributable to the City using the remainder of the one-time American Rescue Plan Act (ARPA) funds of $4.0 million in FY 2022/23.  General revenues, mainly property tax and investment earnings, reflected an increase of $1.8 million (28.2%) combined over FY 2022/23.
 Expenses increased by $10 million (37.1%) over FY 2022/23. The most significant changes were in general government, public safety, and public services.

Business-type Activities
Business-type activities net position increased by $1.8 million. Key elements of the change in net position are as follows:
 The City’s sole business-type activity is the operation of its Water Pollution Control Plant (WPCP) Wastewater Utility, which is accounted for in a proprietary-type enterprise fund. The WPCP accounts for the collection, treatment and disposal of wastewater generated by city residents and businesses. The operation and maintenance of the City’s Wastewater Utility should be a self-supporting enterprise that is paid for by monthly service charges to all residential and commercial users. The City’s business-type activities provide the same type of information as the proprietary fund financial statements, but are presented in a more summarized format.  Program revenues increased $0.3 million (3.6%) over the prior fiscal year.  There was an increase in expenses over the prior fiscal year of $1.0 million (17.7%). This was due to GASB 68 pension plan adjustments in FY 2022/23, which lowered total benefits expenditures. Depreciation expense is considered a cost of service in proprietary funds, which accounted for $1.0 million in FY 2023/24 (Note 6).  The City is financing its share of the Water Pollution Control Plant Upgrade project through a low interest loan from the State Revolving Loan Fund. The City was approved for a loan in the amount of $26.7 million by the State Water Resources Control Board. In order to repay the loan, the City Council approved Resolution Number 2013-47 with scheduled rate increases over a five-year period, beginning July 1, 2013. The rate plan was amended July 17, 2018 by Resolution Number 2018-66. The 2024 monthly rate for single family residents was $73.62 and $62.58 for multi-family residents.

Fund Financial Analysis
The City uses fund accounting to segregate accounts for specific activities or objectives, including demonstrating finance-related legal compliance.

City of Pinole
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
11 Governmental Funds
The following table presents the Governmental Funds’ balances as of June 30, 2024:

Governmental Fund Balances

General Fund
Housing
Programs
Special Revenue
Fund
Building &
Planning
Fund
Non-Major
Governmental
Funds
Total
Governmental
Funds
Nonspendable $ 33,987 $ - $ - $ 320,552 $ 354,539
Restricted 13,718,620 8,267,771 - 11,397,509 33,383,900 Committed 10,744,838 - - - 10,744,838
Assigned - - - 3,856,760 3,856,760
Unassigned (Deficit) 7,841,433 - (2,226,680) (142,430) 5,472,323 Total Fund Balances $ 32,338,878 $ 8,267,771 $ (2,226,680) $ 15,432,391 $ 53,812,360 The City implemented GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions in fiscal year 2010-11 (Note 12). This Statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government’s fund balances more transparent.

At June 30, 2024, the City’s governmental funds reported combined fund balances of $53.8 million, which is an decrease of $3.4 million (6.3%) when compared to the prior fiscal year, FY 2022/23. This largely results from a decrease in the unassigned fund balance due to the funding of capital projects and special initiatives.

Nonspendable fund balances constitute $354,539 (0.7%) of the combined governmental fund balance and cannot be spent either because the underlying resources are not in a spendable form or because the government is legally or contractually required to maintain the resources intact.

Restricted fund balances constitute $33.4 million, (62%) of the combined governmental fund balance and are constrained for a specific purpose by external parties, constitutional provision, or enabling legislation.

Committed fund balances constitute $10.7 million (20%) of the combined governmental fund balance and are constrained by City Council for reserves for economic uncertainty as well as certain capital projects.

Assigned fund balances constitute $3.9 million (7.2%) of the combined governmental fund balance and are intended to be used for specific purposes and have been identified as such by the City Council or the City Manager who has been delegated authority by the City Council to assign amounts.

Unassigned fund balances constitute $5.4 million (10.2%) of the combined governmental fund balance and consist of amounts that have not been classified as nonspendable, restricted, or assigned.

Analysis of Governmental Funds
General Fund
The designated major Governmental funds in FY 2023/24 are the General Fund, Housing Fund, and the Building & Planning Fund. A major fund is defined as those funds whose revenues, expenditures/expenses, assets or liabilities are at least 10 percent of the total for their fund category (governmental or enterprise) and 5 percent of the aggregate of all governmental and enterprise funds in total.

City of Pinole
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
12 The General Fund is the primary operating fund of the City. The General Fund is used to report the financial results of the daily operations of the City. The major revenue sources are Property Tax, Sales Tax, and Utility Users’ Tax. The major expenditures are salaries and administrative expenses.

The fund balance for the General Fund decreased by $4.2 million (-11.5%), as a net result of expenditures in excess of revenues, resulting from an increase in the use of unassigned fund balance capital projects, special initiatives, and additional operating expenditures and subsidies to the recreation and PCTV funds.

General Fund revenue increased by $2.5 million (10.3%) this fiscal year as compared to FY 2022/23. The largest component of this increase was higher taxes and assessments revenue combined with an increase in interest income resulting from higher returns on investments.

General Fund expenditures increased $3.5 million (13.8%) this fiscal year compared to FY 2022/23. This is primarily attributed to increases in public safety, public works, and capital outlay expenses.

City of Pinole
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
13 Revenues
The following table and chart highlight the General Fund revenue by source for the year ended June 30, 2024.

Revenue by Source
Source Amount % of Total
Taxes and assessments $ 21,918,629 82.5%
Intergovernmental revenues 216,894 0.8%
Investment earnings 1,914,632 7.2%
Rents and ground leases 86,084 0.3%
Charges for services 2,317,447 8.7%
Fines, forfeitures and penalties 29,716 0.1%
Other revenues 91,876 0.3%
Total $ 26,575,278 100.0%
Expenditures
The following table and chart highlight the General Fund expenditures by function for the year ended June 30, 2024.

Taxes and assessments,
21,918,629 , 83%
Intergovernmental
revenues, 216,894 , 1%
Investment earnings,
1,914,632 , 7%
Rents and ground
leases, 86,084 , 0%
Charges for services,
2,317,447 , 9%
Fines, forfeitures and
penalties, 29,716 , 0% Other revenues, 91,876
, 0%

City of Pinole
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
14 Expenditures By Function
Function Amount % of Total
General Government $ 4,521,144 15.8%
Public Safety 17,686,177 61.8%
Public Services 2,583,978 9.0%
Recreation 325,040 1.1%
Community Development 547,005 1.9%
Capital Outlay 2,204,005 7.7%
Debt Service 754,957 2.6%
Total $ 28,622,306 100.0%
Housing Programs Special Revenue Fund
The fund balance for the Housing Programs Special Revenue Fund increased by $64,052 (0.78%), as a net result of revenues in excess of expenditures, resulting from an increase in the investment earnings and decrease in Community Development Expenditures.

Housing Programs Special Revenue Fund revenue increased by $67,055 (50.0%) this fiscal year as compared to FY 2022/23. This is primarily attributed to increases in investment earnings and other revenues.

Housing Programs Special Revenue Fund expenditures decreased by $471,755 (-77.45%) this fiscal year as compared to FY 2022/23. This is primarily attributed to decreases in community development expenditures.

General Government,
4,521,144 , 16%
Public Safety,
17,686,177 , 62%
Public Services ,
2,583,978 , 9%
Recreation, 325,040 ,
1%
Community
Development, 547,005
, 2%
Capital Outlay,
2,204,005 , 8%
Debt Service , 754,957
, 2%

City of Pinole
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
15 Building & Planning Fund
The fund balance for the Building & Planning Fund decreased by $590,483 (-36.09%), as a net result of expenditures in excess of revenues, the excess amounts are $590,483. Building & Planning Fund is a new major fund in FY24.

Building & Planning Fund revenue increased by $0.4 million (33.2%) this fiscal year as compared to FY 2022/23. This is primarily attributed to increases in Taxes and assessments and intergovernmental revenues.

Building & Planning Fund expenditures increased by $68,248 (3.09%) this fiscal year as compared to FY 2022/23. This is primarily attributed to decreases in community development expenditures.

Proprietary Fund
Wastewater Utility
The Wastewater Utility Funds net position increased by $1.8 million, 8.8% over the prior fiscal year to a total of $22 million. Program revenues FY 2023/24 was $8.1 million, as revenues increased by $0.3 million and expenses increased by $1.0 million.

The Fund’s Net Position is comprised of $8 million net investment in capital assets and $14.1 million in unrestricted net assets at June 30, 2024. The increased rates for the sewage collection and treatment fees have continued to generate positive cash flows to the City’s Business-type Activities, stabilizing the fiscal condition of this enterprise activity.

Fiduciary Fund
The Successor Agency to the Pinole Redevelopment Agency Private Purpose Trust Fund On December 29, 2011, the California Supreme Court upheld Assembly Bill 1x-26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. In accordance with the timeline set forth in the bill, all redevelopment agencies in the State of California were dissolved and ceased to operate as legal entity as of February 1, 2012.

The Successor Agency is a separate legal entity which was formed to hold the assets of the former Redevelopment Agency pursuant to City Council action. The activity of the Successor Agency is overseen by an Oversight Board comprised of individuals appointed by various government agencies (Note 15).

CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets:

The City’s net investment in capital assets for its governmental and business-type activities as of June 30, 2024 was $67.6 million. This investment in capital assets includes: infrastructure, land, construction-in-progress, buildings, and improvements, equipment, vehicles, streets and roads, storm drains, bridges, parks, and sewer lines. Infrastructure assets are items that are normally immovable and of value to the City such as roads, bridges, streets and sidewalks, drainage systems, lighting systems, and similar items (Note 6).

City of Pinole
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
16 Capital assets for the governmental and business-type activities are presented below to illustrate changes from the prior year:

Capital Assets at Year-end

2024 2023 Net Change
Governmental Activities
Land and Construction-in-progress $ 9,164,522 $ 7,963,301 $ 1,201,221 Buildings and improvements 16,156,929 16,040,401 116,528 Machinery, equipment and vehicles 9,323,223 8,725,678 597,545 Infrastructure 61,222,765 61,078,899 143,866
Leased assets 103,931 103,931 -
Subscription assets 1,155,303 666,105 489,198
Less accumulated depreciation and amortization (65,893,084) (64,121,414) (1,771,670) Totals 31,233,589 30,456,901 776,688
Business-type activities
Construction in Progress 367,638 124,930 242,708
Buildings and improvements 40,857,072 40,857,072 -
Equipment 1,229,931 1,229,931 -
Vehicles 789,200 920,362 (131,162)
Infrastructure 7,474,337 7,474,337 -
Less accumulated depreciation (14,374,022) (13,481,827) (892,195) Totals $ 36,344,156 $ 37,124,805 $ (780,649)
Debt Administration:

Each of the City’s debt issues is discussed in detail in Note 7 to the financial statements. At June 30, 2024 the City’s remaining long-term debt related to governmental and business-type activities is as follows:

Outstanding Debt

Balance Balance
Governmental Activity Debt June 30, 2024 June 30, 2023 Net Change 2006 Pension Obligation bonds $ 2,089,509 $ 2,297,299 $ (207,790) Leases payable 30,976 56,609 (25,633)
Subscription payable 199,399 176,570 22,829
Compensated absences 845,808 819,967 25,841
Total Governmental Activity Debt 3,165,692 3,350,445 (184,753)

Business-Type Activity Debt
2016 Wastewater Revenue Refunding Bond 5,633,000 5,980,000 (347,000) 2016 Clean Water State Revolving Fund 22,735,634 23,426,566 (690,932) Compensated absences 215,169 178,271 36,898
Total Business-Type Activity Debt 28,583,803 29,584,837 (1,001,034)

Total Debt Outstanding $ 31,749,495 $ 32,935,282 $ (1,185,787)

City of Pinole
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2024
17 ECONOMIC OUTLOOK AND MAJOR INITIATIVES
The economy of the City and its major initiatives for the coming year are discussed in the accompanying Transmittal Letter (page i-v). The most significant financial initiatives facing the City are, as follows:
 Fiscal Year (FY) 2024/25 Operating and Capital Budget was adopted by the City Council on June 25, 2024.

The Adopted FY 2024/25 Operating and Capital Budget is a balanced but includes a one-time transfer in from the City’s General Fund that was used to balance the budget. It is a status quo budget, meaning that ongoing revenues are mostly sufficient to cover ongoing expenditures, and that service levels and revenue mechanisms in the budget are essentially the same as those in the FY 2023/24 budget. The budget does include the use of a portion of the City’s unassigned fund balance to fund several capital projects and one-time special initiatives..  Long-Term Financial Planning includes periodically updating the City’s 20-year financial forecast to identify future potential opportunities and challenges that the City may proactively address through the annual budget and capital improvement planning processes.
 City’s Strategic Plan 2020-2025 adopted in February 2020 identifies 22 individual strategies (special projects) for staff to complete over a five-year timeframe to position the City to achieve the vision, mission, and goals.

Several initiatives are underway and most have been completed.  Capital Facility and Public Infrastructure projects are progressing according to construction scheduling, with primary focus on repairs to City streets/roadways and facilities. The City adopted a Five-Year Capital Improvement Plan on June 25, 2024 which identifies capital needs and funding for the next five years.  Economic Development Strategy (EDS) was adopted in October 2022. The EDS is a strategic framework to guide the City of Pinole’s economic development policies and programs over the next five years (starting January 1, 2023) and is based on a comprehensive research and stakeholder input process, and reflects consensus views on the most promising opportunities and the most pressing challenges facing Pinole’s economy. Implementation has started as several strategies are funded in the FY 2024/25 budget.  Successor Agency Dissolution occurred in FY 2023/24 as the former Redevelopment Agency’s outstanding debt service was paid off.
 Sales Tax Measure will be placed on the ballot for the November 2024 election. If passed by the voters, the proposed half-cent sales tax measure will generate approximately $2.5 million annually and the additional funds will go into the City’s General Fund primarily to maintain critical services.

REQUESTS FOR INFORMATION
This financial report is designed to provide our residential and business community, taxpayers, customers, investors, and creditors with a general overview of the City’s finances. Questions concerning any information provided in this report or requests for additional information should be addressed to the City of Pinole, Finance Department, 2131 Pear Street, Pinole, CA 94564. Alternatively, you may send your inquiries via email to [email protected].

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BASIC FINANCIAL STATEMENTS
19

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20

GOVERNMENT-WIDE FINANCIAL STATEMENTS
21

Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:

Cash and investments 30,869,394 $ 19,001,498 $ 49,870,892 $ Cash and investments with fiscal agents 15,816,975 1,089,183 16,906,158 Accounts receivable, net 3,711,779 815 3,712,594
Notes receivable, net 4,380,001 - 4,380,001
Interest receivable 151,646 170,270 321,916
Lease receivable, current 92,178 - 92,178
Due from other government - 264,320 264,320
Prepaid items 339,179 1,089,184 1,428,363
Inventory 12,808 15,360 28,168
Land held for resale 355,062 - 355,062
Total current assets 55,731,574 21,628,078 77,359,652
Noncurrent assets:

Lease receivable - noncurrent 472,203 - 472,203
Capital assets:

Land and construction in progress 9,164,522 367,638 9,532,160 Capital assets being depreciated/amortized, net 22,069,067 35,976,518 58,045,585 Total capital assets 31,233,589 36,344,156 67,577,745
Total noncurrent assets 31,705,792 36,344,156 68,049,948 Total assets 57,972,234 87,437,366 145,409,600

DEFERRED OUTFLOWS OF RESOURCES
Pension related amounts 16,646,918 1,477,255 18,124,173 OPEB related amounts 6,601,999 733,555 7,335,554
Total deferred outflows of resources 2,210,810 23,248,917 25,459,727 June 30, 2024
Statement of Net Position
City of Pinole
Primary Government
See accompanying Notes to the Basic Financial Statements. 22

Governmental Business-Type
Activities Activities Total

LIABILITIES
Current liabilities:

Accounts payable 1,012,846 241,910 1,254,756
Accrued payroll 522,437 59,594 582,031
Interest payable 45,743 441,343 487,086
Unearned revenue 84,824 - 84,824
Deposits payable 240,698 - 240,698
Compensated absences, due within one year 277,451 46,835 324,286 Claims payable, due within one year 21,652 - 21,652
Long-term debt, due within one year 315,534 1,064,678 1,380,212 Total OPEB liability, due within one year 1,460,008 162,223 1,622,231 Total current liabilities 3,981,193 2,016,583 5,997,776 Noncurrent liabilities:

Compensated absences, due in more than one year 568,357 168,334 736,691 Long-term liabilities, due in more than one year 2,004,350 27,303,956 29,308,306 Net pension liability 41,809,472 3,636,709 45,446,181
Total OPEB liability, due in more than one year 30,018,712 3,335,413 33,354,125 Total noncurrent liabilities 74,400,891 34,444,412 108,845,303 Total liabilities 36,460,995 78,382,084 114,843,079

DEFERRED INFLOWS OF RESOURCES
Lease related 530,612 - 530,612
Pension related amounts 2,426,708 288,008 2,714,716
OPEB related amounts 12,473,790 1,385,977 13,859,767
Total deferred inflows of resources 1,673,985 15,431,110 17,105,095

NET POSITION
Net investment in capital assets 30,973,001 7,975,522 38,948,523 Restricted:

Community development 6,102 - 6,102
Public works 6,772,574 - 6,772,574
Public safety 1,044,309 - 1,044,309
Housing activities 8,267,771 - 8,267,771
Pension - 13,585,182 13,585,182
Total restricted 29,675,938 - 29,675,938
Unrestricted (deficit) (43,775,850) 14,072,542 (29,703,308) Total net position $ 22,048,064 16,873,089 $ 38,921,153 $ Primary Government
City of Pinole
Statement of Net Position (Continued)
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 23

Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Total Primary government:

Governmental activities:

General government $ 752,366 5,439,951 $ 147,021 $ 215,233 $ 1,114,620 $ Public safety 1,908,034 20,226,459 510,623 - 2,418,657
Public services 5,734,403 502,517 2,023,162 285,025 2,810,704 Recreation 2,275,235 481,813 31,362 - 513,175
Community development 1,423,431 2,968,511 227,421 - 1,650,852 Interest expense 424,186 - - - -
Total governmental activities 37,068,745 5,068,161 2,939,589 500,258 8,508,008 Business-type activities:

Wastewater utility 8,114,292 6,812,685 - - 8,114,292
Total business-type activities 6,812,685 8,114,292 - - 8,114,292 Total primary government $ 13,182,453 43,881,430 $ 2,939,589 $ 500,258 $ 16,622,300 $

City of Pinole
Statement of Activities
For the Year Ended June 30, 2024
Program Revenues
See accompanying Notes to the Basic Financial Statements. 24

Governmental Business-type
Functions/Programs Activities Activities Total
Primary government:

Governmental activities:

General government $ - (4,325,331) $ (4,325,331) $
Public safety - (17,807,802) (17,807,802)
Public services (2,923,699) - (2,923,699)
Recreation (1,762,060) - (1,762,060)
Community development - (1,317,659) (1,317,659)
Interest expense (424,186) - (424,186)
Total governmental activities (28,560,737) - (28,560,737) Business-type activities:

Wastewater utility 1,301,607 - 1,301,607
Total business-type activities - 1,301,607 1,301,607
Total primary government 1,301,607 (28,560,737) (27,259,130) General Revenues
General revenues:

Taxes:

Property taxes 5,910,711 - 5,910,711
Sales taxes 9,430,219 - 9,430,219
Franchise taxes 901,209 - 901,209
Utility taxes 2,445,715 - 2,445,715
Other taxes 911,622 - 911,622
Total taxes 19,599,476 - 19,599,476
Unrestricted motor vehicle in lieu 2,319,153 - 2,319,153 Investment earnings (loss) 2,449,243 483,402 2,932,645
Miscellaneous 124,132 - 124,132
Total general revenues 483,402 24,492,004 24,975,406
Change in net position 1,785,009 (4,068,733) (2,283,724) Net Position:

Beginning of year, as restated (Note 19) 20,941,822 20,263,055 41,204,877 End of year $ 22,048,064 16,873,089 $ 38,921,153 $
For the Year Ended June 30, 2024
Statement of Activities (Continued)
City of Pinole
Net (Expense) Revenue
and Changes in Net Position
See accompanying Notes to the Basic Financial Statements. 25

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26

FUND FINANCIAL STATEMENTS
27

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28

Governmental Fund Financial Statements
General Fund is used for all the general revenues of the City not specifically levied or collected for other City funds, and the related expenditures. The major revenue sources for this fund are property taxes, sales taxes, utility users tax, franchise fees, business licenses, unrestricted revenues from the State, fines and forfeitures and interest income.

Expenditures are made for public safety, recreation, and the other services described above.

Housing Programs Fund receives tax increment funds through Redevelopment Property Tax Trust Funds, representing 20% set-aside for housing activities. Funds are expended for approved housing activities.

Building and Planning Fund - This fund is used to account for fees collected for building permits and plan check fees.

Fees collected are used to cover the cost involved in plan checks and inspections performed. 29

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30

Housing
Programs Building Non-major Total
General Special Revenue & Planning Governmental Governmental Fund Fund Fund Funds Funds
ASSETS
Cash and investments 12,264,859 $ 3,506,880 $ - $ 15,097,655 $ 30,869,394 $ Accounts receivable 2,897,062 374 301,921 512,422 3,711,779 Notes receivable - 4,380,001 - - 4,380,001
Lease receivable 552,995 - - 11,386 564,381
Interest receivable 19,896 30,496 6,632 94,622 151,646
Due from other funds 2,636,685 - - - 2,636,685
Prepaid items and supplies 18,627 - - 320,552 339,179
Inventory 15,360 - - - 15,360
Land held for redevelopment - 355,062 - - 355,062
Cash and investments with fiscal agents 15,816,975 - - - 15,816,975 Total assets $ 8,272,813 34,222,459 $ 308,553 $ 16,036,637 $ 58,840,462 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 739,323 5,042 104,705 163,776 1,012,846 Accrued liabilities 461,417 - 26,866 34,154 522,437
Unearned revenue 67,989 - - 16,835 84,824
Deposits payable 84,240 - 80,272 76,186 240,698
Due to other funds - - 2,323,390 313,295 2,636,685
Total liabilities 5,042 1,352,969 2,535,233 604,246 4,497,490

DEFERRED INFLOWS OF RESOURCES
Lease related 530,612 - - - 530,612
Total deferred inflows of resources - 530,612 - - 530,612

Fund Balances (Deficit):

Nonspendable 33,987 - - 320,552 354,539
Restricted 13,718,620 8,267,771 - 11,397,509 33,383,900 Committed 10,744,838 - - - 10,744,838
Assigned - - - 3,856,760 3,856,760
Unassigned (deficit) 7,841,433 - (2,226,680) (142,430) 5,472,323 Total fund balances (deficit) 8,267,771 32,338,878 (2,226,680) 15,432,391 53,812,360 Total liabilities, deferred inflows of
resources, and fund balances $ 8,272,813 34,222,459 $ 308,553 $ 16,036,637 $ 58,840,462 $ Major Funds
City of Pinole
Balance Sheet
Governmental Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 31

Total Fund Balances - Total Governmental Funds $ 53,812,360 Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet.

Nondepreciable $ 9,164,522
Depreciable/amortizable 22,069,067
Total capital assets 31,233,589
Long-term liabilities are not due and payable in the current period and therefore were not reported in the Governmental Funds Balance Sheet.

Amount reported in Government-Wide Statement of Net Position Compensated absences - due within one year (277,451)
Compensated absences - due in more than one year (568,357) Claim payable - due within one year (21,652)
Long-term debt - due within one year (315,534)
Long-term debt - due in more than one year (2,004,350)
Total long-term liabilities (3,187,344)
Interest payable on long-term debt did not require current financial resources. Therefore, interest payable was not reported as a liability in the governmental funds. (45,743) Aggregate net pension liability and total OPEB liability used in the governmental activities were not financial resources and therefore were not reported in the Governmental Funds Balance Sheet.

Net pension liability (41,809,472)
Total OPEB liability (31,478,720)
Total OPEB and Pension (73,288,192)
Deferred outflows of resources related to OPEB and pensions are not available for current period and, therefore, are deferred in the governmental funds or not recorded in the governmental funds Amount reported in Government-Wide Statement of Net Position Deferred outflows of resources related to pensions 16,646,918 Deferred outflows of resources related to OPEB 6,601,999 Total deferred outflows of resources 23,248,917
Deferred inflows of resources related to OPEB and pensions are not available for current period and, therefore, are deferred in the governmental funds or not recorded in the governmental funds Amount reported in Government-Wide Statement of Net Position Deferred inflows of resources related to pensions (2,426,708) Deferred inflows of resources related to OPEB (12,473,790) Total deferred inflows of resources (14,900,498)
Net Position of Governmental Activities $ 16,873,089
Amounts reported for Governmental Activities in the Statement of Net Position were different because:

City of Pinole
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 32

Housing
Programs Building Non-major Total
General Special Revenue & Planning Governmental Governmental Fund Fund Fund Funds Funds
REVENUES:

Taxes and assessments 21,918,629 $ - $ 625,076 $ 531,453 $ 23,075,158 $ Intergovernmental revenues 216,894 - 227,421 2,292,950 2,737,265 Investment earnings 1,914,632 188,166 (2,735) 580,284 2,680,347 Rents and ground leases 86,084 - - 25,863 111,947
Charges for services 2,317,447 - 738,480 665,368 3,721,295 Fines, forfeitures and penalties 29,716 - 32,809 20,660 83,185 Other revenues 91,876 13,237 15 485,687 590,815
Total revenues 201,403 26,575,278 1,621,066 4,602,265 33,000,012

EXPENDITURES:

Current:

General government 4,521,144 - - 560,782 5,081,926
Public safety 17,686,177 - - 550,617 18,236,794
Public services 2,583,978 - - 1,399,439 3,983,417
Recreation 325,040 - - 1,866,987 2,192,027
Community development 547,005 137,351 2,278,549 1,040 2,963,945 Capital outlay 2,204,005 - - 981,513 3,185,518
Debt service:

Principal 336,809 - - - 336,809
Interest and fiscal charges 418,148 - - - 418,148
Total expenditures 137,351 28,622,306 2,278,549 5,360,378 36,398,584 Excess (deficiency) of
revenues over expenditures 64,052 (2,047,028) (657,483) (758,113) (3,398,572) OTHER FINANCING SOURCES (USES):

Proceeds from sale of asset 139 - - - 139
Issuance of debt 126,215 - - - 126,215
Transfers in 3,146,313 - 67,000 2,228,594 5,441,907
Transfers out (5,441,907) - - - (5,441,907)
Total other financing sources (uses) - (2,169,240) 67,000 2,228,594 126,354 NET CHANGE IN FUND BALANCES 64,052 (4,216,268) (590,483) 1,470,481 (3,272,218) FUND BALANCES (DEFICIT):

Beginning of year, as previously reported 36,555,146 8,203,719 - 12,435,695 57,194,560 Prior period adjustment (Note 19) - - - (109,982) (109,982) Change with financial reporting entity
(major and non-major fund classification) (Note 20) - - (1,636,197) 1,636,197 - Beginning of year, as restated (Note 19) 8,203,719 36,555,146 (1,636,197) 13,961,910 57,084,578 End of year 32,338,878 $ 8,267,771 $ (2,226,680) $ 15,432,391 $ 53,812,360 $ Major Funds
For the Year Ended June 30, 2024
Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances City of Pinole
See accompanying Notes to the Basic Financial Statements. 33

Net Change in Fund Balances - Total Governmental Funds $ (3,272,218) Capital outlay $ 3,185,518
Proceed from sale of assets (628,297)
Depreciation/amortization expense (1,780,533)
Total capital assets 776,688
(6,038)
Proceeds from issuance of debt $ (126,215)
Repayment of debt and lease principal 336,809
Total 210,594
Accrued compensated absences $ (25,841)
Claims payable (21,652)
Net difference between pension expense and contributions subsequent to the measurement date (2,052,425) Net difference between OPEB expense and contributions subsequent to the measurement date 322,159 Total (1,777,759)
Change in Net Position of Governmental Activities $ (4,068,733) Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets:

Debt proceeds are reported as financing sources in governmental funds and thus contribute to the liabilities and not affect the statement of activities. Similarly, repayment of principal is an expenditure in the governmental funds, but reduces the liability in the statement of net position
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 governmental funds:

Amounts reported for Governmental Activities in the Statement of Net Position were different because:

City of Pinole
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities For the Year Ended June 30, 2024
Interest accrued on long-term debt is reported in the Statement of Activities, but does not require the use of current financial resources. Therefore, accrued interest is not reported as an expenditure in governmental funds. This amount represents the change in accrued interest from the prior year.

See accompanying Notes to the Basic Financial Statements. 34

Proprietary Funds Financial Statements
Wastewater Utility Fund - this fund accounts for wastewater utility services provided by the City and it is the City's intent that the cost of providing these services be financed primarily through user charges. 35

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36

Business-type
Activities
Wastewater Utility
Enterprise Fund
ASSETS
Current assets
Cash and investments $ 19,001,498
Restricted cash and investment 1,089,183
Accounts receivable -
Interest receivable 170,270
Other receivable 815
Due from other governments 264,320
Prepaid items 1,089,184
Inventory 12,808
Total current assets 21,628,078
Noncurrent assets
Capital assets not being depreciated 367,638
Capital assets being depreciated, net 35,976,518
Total capital assets 36,344,156
Total noncurrent assets 36,344,156
Total assets 57,972,234

DEFERRED OUTFLOW OF RESOURCES
Deferred outflow pension-related items 1,477,255
Deferred outflow OPEB-related items 733,555
Total deferred outflow of resources 2,210,810

LIABILITIES
Current liabilities
Accounts payable 241,910
Accrued liabilities 59,594
Interest payable 441,343
Compensated absences - current 46,835
Long-term debt, due within one year 1,064,678
Total OPEB liability, due within one year 162,223
Total current liabilities 2,016,583
Noncurrent liabilities
Compensated absences - noncurrent 168,334
Long-term debt, due in more than one year 27,303,956
Net pension liability 3,636,709
Total OPEB liability, due in more than one year 3,335,413 Total noncurrent liabilities 34,444,412
Total liabilities 36,460,995

DEFERRED INFLOW OF RESOURCES
Deferred inflow pension-related items 288,008
Deferred inflow OPEB-related items 1,385,977
Total deferred inflow of resources 1,673,985

NET POSITION
Net investment in capital assets 7,975,522
Unrestricted 14,072,542
Total net position $ 22,048,064
City of Pinole
Statement of Net Position
Proprietary Fund
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 37

Business-type
Activities
Wastewater Utility
Enterprise Fund
OPERATING REVENUES:

Charges for services $ 8,072,292
Other revenue 42,000
Total operating revenues 8,114,292
OPERATING EXPENSES:

Sewer treatment plant 4,511,416
Sewer maintenance 1,277,912
Depreciation 1,023,357
Total operating expenses 6,812,685
OPERATING INCOME (LOSS) 1,301,607
NONOPERATING REVENUES (EXPENSES):

Gain on disposal of assets 9,608
Intergovernmental 32,447
Interest revenue 995,766
Interest expense (554,419)
Total nonoperating revenues (expenses) 483,402
Changes in net position 1,785,009
NET POSITION:

Beginning of year 20,263,055
End of year $ 22,048,064
City of Pinole
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Fund
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 38

Business-type
Activities
Wastewater Utility
Enterprise Fund
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers $ 8,433,798
Cash paid to suppliers (3,302,802)
Cash paid to employees (2,561,865)
Net cash provided by operating activities 2,569,131
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Intergovernmental 32,447
Net cash provided by noncapital financing activities 32,447 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Gain on disposal of capital assets 9,608
Acquisition and construction of capital assets (242,708) Principal payment of long-term debt (1,037,932)
Interest paid on debt (569,543)
Net cash (used in) capital and related financing activities (1,840,575) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest and dividends 937,417
Net cash provided by investing activities 937,417
Net change in cash and cash equivalents 1,698,420
CASH AND CASH EQUIVALENTS:

Beginning of year 18,392,261
End of year $ 20,090,681

RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:

Operating income $ 1,301,607
Adjustments to reconcile operating to net
cash provided by (used in) operating activities:

Depreciation 1,023,357
Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:

Other receivables 301
Due from other governments 319,205
Prepaid items 3,196
Inventory 2,799
Deferred outflow pension-related items 64,830
Deferred outflow OPEB-related items (117,045)
Accounts payable 38,091
Accrued liabilities -
Compensated absences 36,898
Net pension liability 17,913
Total OPEB liability (130,967)
Deferred inflows - pension related (203,272)
Deferred inflows - OPEB related 212,218
Total adjustments 1,267,524
Net cash provided by operating activities $ 2,569,131
City of Pinole
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 39

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40

FIDUCIARY FUND FINANCIAL STATEMENTS
41

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42

Total
Private-Purpose Custodial
Trust Fund Funds
ASSETS
Cash and cash equivalents $ 176,411 1,741,593 $
Interest receivable 15,267 244
Notes receivable, net of allowance 10,054 -
Easement 272,040 -
Land held for redevelopment 2,469,715 -
Capital assets not being depreciated 2,429,793 -
Capital assets being depreciated, net 6,963,176 -
Total assets 176,655 13,901,638

LIABILITIES
Accounts payable 11,448 7,554
Deposits payable 56,238 117,958
Unearned revenue 19 25,150
Total liabilities 154,556 63,811

NET POSITION
Restricted for:

Held in trust for dissolution of RDA - 13,837,827
Individuals, organizations, and other governments 22,099 - Total net position $ 22,099 13,837,827 $
City of Pinole
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements. 43

Total
Private-Purpose Custodial
Trust Fund Funds
ADDITIONS:

Property taxes $ - 145,458 $
Investment income 86,195 1,551
Total additions 1,551 231,653
DEDUCTIONS:

Operating costs 205,482 -
Depreciation 255,670 -
Interest expense - 2,422
Total deductions 463,574 -
Change in net position (231,921) 1,551
NET POSITION:

Beginning of year 14,069,748 20,548
End of period $ 22,099 13,837,827 $
City of Pinole
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 44

45 NOTES TO THE BASIC FINANCIAL STATEMENTS

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City of Pinole
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
47 Page
Note 1 – Summary of Significant Accounting Policies ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 51 A. The Reporting Entity ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 51 B. Basis of Presentation ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 52 C. Property Taxes ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 54 D. Cash and Investments ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 55 E. Cash and Investments with Fiscal Agents ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 55 F. Fair Value Measurement ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 55 G. Accounts and Interest Receivable ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 55 H. Prepaid Items and Inventory ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 56 I. Leases Receivable ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 56 J. Capital Assets ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 57 K. Subscription-Based Information Technology Arrangements (SBITAs) ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 57 L. Lease Liabilities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 58 M. Long Term Liabilities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 59 N. Pension ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 59 O. Other Postemployment Benefits (OPEB) ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 59 P. Deferred Outflows/Inflows of Resources ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 60 Q. Interfund Transactions ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 60 R. Net Position and Fund Balances ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 60 S. Spending Policy ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 61 T. Grant Funding ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 62 U. Deferred Compensation ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 62 V. Use of Estimates ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 62 W. Implementation of Governmental Accounting Standards Board (GASB) Pronouncements ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 63 X. New GASB Pronouncements ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 63 Note 2 – Cash and Investments ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 63 A. Summary of Cash and Investments ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 64 B. Deposits ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 64 C. Investments Authorized by the California Government Code and the City's Investment Policy ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 65 D. Investments Authorized by Debt Agreements ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 66 E. Investment Valuation ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 66 F. Disclosure Relating to Interest Rate Risk ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 67 G. Disclosures Relating to Credit Risk ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 67 H. Investment in Local Agency Investment Fund (LAIF) ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 68 Note 3 – Notes Receivable ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 68 Note 4 – Lease Receivablesꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 69 Note 5 – Land Held For Resaleꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 70 Note 6 – Capital Assetsꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 71 A. Governmental Activities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 71 B. Business- Type Activities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 72

City of Pinole
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024
48 Page
Note 7 – Long-Term Liabilities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 73 A. Governmental ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 73 B. Business-Type Activities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 74 Note 8 – Interfund Transactionsꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 76 A. Interfund Transfers to/from Other Funds ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 76 B. Due to/from Other Funds ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 76 Note 9 – Defined Benefit Pension Planꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 76 A. General Information about the Pension Plans ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 76 B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 78 Note 10 – Other Post-Employment Benefits (OPEB)ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 82 A. Summaryꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 82 B. Description of the Plan ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 82 C. Employees Covered ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 82 D. Contributions ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 82 E. Total OPEB Liability ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 83 F. Discount Rate ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 84 G. Changes in the Total OPEB Liability ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 84 H. Recognition of Deferred Outflows and Deferred Inflows of Resources ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 85 I. OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 85 Note 11 - Deferred Compensation Plan ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 86 A. 457 Plan ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 86 Note 12 – Fund Balanceꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 86 Note 13 – Risk Managementꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 88 Note 14 – Stewardship, Compliance, and Accountability ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 88 A. Deficit Fund Balances/Net Position ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 88 B. Expenditures in Excess of Appropriations ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 89 Note 15 – Successor Agency Private Purpose Trust for Assets of Former Redevelopment Agency ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 89 A. Capital Assets ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 90 B. Long-term Liabilities ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 90 Note 16 – Contingencies and Commitmentsꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 91 Note 17 – Net Investment in Capital Assets ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 91

City of Pinole
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024
49 Note 18 – Joint Powers Agreementsꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 91 A. Pinole/Hercules Wastewater Treatment Plant ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 91 Note 19 – Prior Period Adjustments ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 92

Note 20 ‒ Changes to or within the Financial Reporting Entity ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 92

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City of Pinole
Notes to the Basic Financial Statements
For the Year Ended June 30, 2024
51 Note 1 – Summary of Significant Accounting Policies
The City of Pinole, California (the “City”) was incorporated June 25, 1903. The City is primarily a residential community located in Contra Costa County, twenty-four miles east of San Francisco on Interstate 80. The City provides the following services: public safety (police), parks, streets and highways, sanitation, culture-recreation, public improvements, planning and zoning, and general administration services.

The City operates under the Council-Manager form of government, with five elected Council members served by a full-time City Manager and staff. At June 30, 2024, the City's staff comprised 93 full-time and 28 part-time employees who are responsible for the following City-provided services:

Public Safety - The City employs 26 sworn and 19 non-sworn police personnel to provide round-the-clock police services from a central station.

Sanitation - The City maintains a sewage treatment plant with 11 employees, the plant provides wastewater treatment services to the residents of the City of Pinole and the City of Hercules.

Parks, Streets and Highways - The City builds and maintains its streets, curbs, gutters, parks and related public property with a force of 12 employees. Major projects may be contracted out to reduce costs.

Recreation, Public Improvements, Planning, Zoning, Administration - Recreation, Public Improvements, Planning, Zoning, Administration and other services are provided by a total of 53 employees.

The financial statements and accounting policies of the City conform with accounting principles generally accepted in the United States of America ("U.S. GAAP") applicable to governments. The Governmental Accounting Standards Board (“GASB”) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Significant accounting policies are summarized below:

A. The Reporting Entity
The accompanying basic financial statements present the financial activities of the City along with the financial activities of its blended component unit, which is an entity for which the City is financially accountable. Together these entities comprise the primary government for reporting purposes. Although they are separate legal entities, a blended component unit is in substance part of the City's operations and is reported as an integral part of the City's financial statements. The City's component unit, which is described below, is blended.

Pinole Joint Powers Financing Authority
The Pinole Joint Powers Financing Authority (the “Authority”) is a separate government entity whose purpose is to assist with the financing or refinancing of public capital facilities within the City. The Authority has the power to purchase bonds issued by any local agency and may sell such bonds to public or private purchasers. The Authority is controlled by the City and has the same governing body as the City, which also performs all accounting and administrative functions for the Authority. The financial activities of the Authority are included in the Wastewater Utility Fund and the Private-Purpose Trust Fund.

City of Pinole
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
52 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Presentation
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. City 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.

These statements require that the financial statements described below be presented.

Government-wide Financial Statements:

The Government-Wide Financial Statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. On an accrual basis, revenue from sales taxes is recognized in the period in which the taxable sale takes place. Revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the year when use is first permitted, matching requirements, in which the City must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the City on a reimbursement basis. Fiduciary activities are not included in these statements.

Certain types of transactions are reported as program revenues for the City in three categories:
 Charges for services
 Operating grants and contributions
 Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:
 Due from and to other funds
 Transfers in and out
Governmental Fund Financial Statements
A Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances are presented for all major governmental funds and aggregated nonmajor funds. Accompanying schedules are presented to reconcile and explain the differences in fund balances as presented in these statements, to the net position presented in the government-wide financial statements. The City has presented all major funds that met the applicable criteria.

City of Pinole
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
53 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Presentation (Continued)
All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Change in Fund Balances presents increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in net current assets.

Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both “measurable” and “available” to finance expenditures of the current period.

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 City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property tax, sales tax, intergovernmental revenues and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred.

The City reports the following major governmental funds:
 General Fund – The general fund is the general operating fund of the City and is always classified as a major fund. It is used to account for all activities except those legally or administratively required to be accounted for in other funds.
 Housing Program Special Revenue Fund – The housing program special revenue fund is used to account for the proceeds tax increment funds through Redevelopment Property Tax Trust Funds that are restricted or committed to expenditure for approved housing activities.  Building and Planning Fund – The building and planning fund is used to account for fees collected for building permits and plan check fees. Fees collected are used to cover the cost involved in plan checks and inspections performed.

Proprietary Fund Financial Statements
Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Sewer fund are charges to customers for services. Operating expenses for the proprietary funds include the costs of services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

The City reports one major proprietary fund:
 Wastewater Utility Fund -The Wastewater Utility Fund is used to account for the collection of sewer service fees and the related cost of maintenance and repair of the sewer treatment plant.

City of Pinole
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
54 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Presentation (Continued)
Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in Fiduciary Net Position. The City’s fiduciary funds represent custodial funds and private purpose trust funds. Both custodial funds and the private purpose trust funds are accounted for on the full accrual basis of accounting where the assets associated with the activity are controlled by the City and the assets are not derived 1) solely from the government’s own-source revenues or 2) from government-mandated nonexchange transactions or voluntary nonexchange transactions.

The City reports the following two types of fiduciary funds:
 Custodial Funds - Custodial Funds are clearing type funds for the collection of taxes or deposits held in trust, on behalf of individuals, private organizations, and other governments for which the City has a custodial responsibility. This fund is used to account for funds collected from asset seizure and private donations received for the community assistance program.  Private-Purpose Trust Fund - Private purpose trust fund is used to report all other trust arrangements under which principal and income benefit individuals, private organizations, or other governments. This fund was created as a result of the State order to dissolve California Redevelopment Agencies. As a Successor Agency, this fund is used to track the activity by the Oversight Board and the State Department of Finance to dissolve the Agency.

C. Property Taxes
California Constitution Article XIII A, limits the combined property tax rate to one percent of a property's assessed valuation. Additional taxes may be imposed with voter approval. Assessed value is calculated at one hundred percent of a property's fair value, as defined by Article XIII A, and may be increased no more than two percent per year unless a change in ownership occurs. The state legislature has determined the method of distributing the one percent tax levy among the various taxing jurisdictions.

Property tax revenues are recognized in the fiscal year for which taxes and assessments are levied. The County of Contra Costa levies, bills and collects property taxes and special assessments for the City under the County's "Teeter Plan." The County remits the entire amount levied and handles all delinquencies, retaining interest and penalties.

Tax collections are the responsibility of the County Tax Collector. Taxes and assessments on secured and utility rolls which constitute a lien against the property, may be paid in two installments; the first is due November 1 of the fiscal year and is delinquent if not paid by December 10; and the second is due on February 1 of the fiscal year and is delinquent if not paid by April 10. Unsecured personal property taxes do not constitute a lien against real property unless the tax becomes delinquent. Payment must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year. Significant penalties are imposed by the County for late payment.

Tax levy dates are attached annually on January 1 preceding the fiscal year for which the taxes are levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and unsecured and personal property, as it exists at that time. Liens against real estate, as well as the tax on personal property, are not relieved by subsequent renewal or change in ownership.

City of Pinole
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
55 Note 1 – Summary of Significant Accounting Policies (Continued) D. Cash and Investments
The City pools the cash of all funds, except for monies deposited with fiscal agents in accordance with related bond indentures. The cash and investments balance in each fund represents that fund's equity share of the City's cash and investment pool. As the City places no restrictions on the deposit or withdrawal of a particular fund's equity in the pool, the pool operates like a demand deposit account for the participating funds.

Interest income earned on pooled cash and investments is allocated quarterly to the various funds based on month-end balances and is adjusted at fiscal year-end. Interest income on restricted cash and investments with fiscal agents is credited directly to the related funds.

The City's investments are carried at fair value. The fair value of equity and debt securities is determined based on sales prices or bid-and-asked quotations from SEC-registered securities exchanges or NASDAQ dealers. The Local Agency Investment Fund ("LAIF") determines the fair value of their portfolio quarterly and reports a factor to the City; the City applies that factor to convert its share of LAIF from amortized cost to fair value. This amount is included in cash and cash equivalents in the balance sheet of the governmental funds. Changes in fair value are allocated to each participating fund.

For purposes of the statement of cash flows, the City has defined cash and cash equivalents to be change and petty cash funds, equity in the City's cash and investment pool, and restricted non-pooled investments with initial maturities of three months or less.

E. Cash and Investments with Fiscal Agents
Cash and investments with fiscal agents are restricted for the redemption of bonded debt, for acquisition and construction of capital projects, and pension contributions.

F. Fair Value Measurement
U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes disclosure about fair value measurement. Investments, unless otherwise specified at fair value in the financial statements, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Levels of inputs are as follows:
 Level 1 – Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
 Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the assets or liabilities through corroboration with market data at the measurement date.  Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the assets or liabilities at the measurement date.

G. Accounts and Interest Receivable
In the government-wide statements, receivables consist of all revenues earned at year-end and not yet received.

Receivables are recorded in the financial statements net of any allowance for doubtful accounts if applicable, and estimated refunds due. Major receivable balances for the governmental activities include sales and use taxes, franchise taxes, grants, police fines and other fees. Federal and state grants are considered receivable and accrue as revenue when reimbursable costs are incurred. Business-type activities report utilities and interest earnings as their major receivables.

City of Pinole
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
56 Note 1 – Summary of Significant Accounting Policies (Continued) G. Accounts and Interest Receivable (Continued)
In the fund financial statements, material receivables in governmental funds include revenue accruals such as sales tax, franchise tax, and grants and other similar intergovernmental revenues since they are usually both measurable and available. Nonexchange transactions collectible but not available are recorded as deferred inflows of resources in the fund financial statements in accordance with modified accrual, but not in the government-wide financial statements in accordance with the accrual basis. Interest and investment earnings are recorded when earned only if paid within 60 days since they would be considered both measurable and available. Long-term loans in governmental funds are treated as expenditures in the year advanced and as revenues in the year repayment is measurable and available. Proprietary fund material receivables consist of all revenues earned at year-end and not yet received. Utility accounts receivable and interest earnings compose the majority of proprietary fund receivables.

H. Prepaid Items and Inventory
Inventories are stated at cost (average cost per unit) for governmental and proprietary funds. Supplies of the General Fund consist of expendable supplies held for consumption. The cost is recorded as an expenditure/expense in the General Fund at the time individual items are consumed, rather than purchased.

Inventories of governmental funds are offset by nonspendable fund balance to indicate they do not constitute resources available for future appropriation. Enterprise Fund supplies consist primarily of items held for internal use.

Prepaid items are also recognized under the consumption method. Payments to vendors that reflect costs applicable to future accounting periods are recorded as prepaid items in both government-wide and fund financial statements.

I. Leases Receivable
The City is a lessor for leases of buildings and recognizes lease receivables and deferred inflows of resources in the financial statements. Variable payments based on future performance or usage of the underlying asset are not included in the measurement of the lease receivable.

At the commencement of a lease, the lease receivable is measured at the present value of payments expected to be received during the lease term. The City established a threshold of $5,000 for lease receivables. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.  The City uses incremental borrowing rate (IBR) provided by the financial institution at July 1, 2021 for existing leases or the current rate at the time a new lease is executed.  The lease term includes the noncancelable period of the lease plus any option periods that are likely to be exercised.
 Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

City of Pinole
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
57 Note 1 – Summary of Significant Accounting Policies (Continued) I. Leases Receivables (Continued)
The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

J. Capital Assets
In the government-wide financial statements, capital assets with a historical cost over $5,000 are accounted for as capital assets. All capital assets are valued at historical cost, or estimated historical cost if actual is unavailable.

Contributed capital assets are valued at their estimated fair market value on the date contributed. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value on the date donated.

The City defines infrastructure assets as the basic physical assets that allow the City to function. The assets include the street system, wastewater system, park and recreation lands and improvement system, and buildings combined with the site amenities such as parking and landscaped areas used by the City in the conduct of its business.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets acquired under finance purchase are capitalized at the net present value of the total finance payments.

Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method.

The lives used for depreciation purposes are as follows:

Asset Type Years
Infrastructure 50-75
Buildings and improvement 50-100
Machinery, equipment, and vehicles 5-10
K. Subscription-Based Information Technology Arrangements (SBITAs) The City has a policy to recognize a subscription liability and a right‐to‐use subscription asset (subscription asset) in the financial statements. The City recognizes subscription liabilities with an initial, individual value of $5,000 or more with a subscription term greater than one year. Variable payments based on future performance of the City, usage of the underlying IT asset, or number of user seats are not included in the measurement of the subscription liability, rather, those variable payments are recognized as outflows of resources (expenses) in the period the obligation for those payments is incurred.

At the commencement of a SBITA, the City initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of subscription payments made.

Subscription assets are recorded at the amount of the initial measurement of the subscription liabilities, less any payments made to the SBITA vendor before the commencement of the subscription term, and capitalizable initial implementation cost, less any incentives received from the SBITA vendor at or before the commencement of the subscription term.

City of Pinole
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
58 Note 1 – Summary of Significant Accounting Policies (Continued) K. Subscription-Based Information Technology Arrangements (SBITAs) (Continued)  Preliminary Project Stage: Outlays are expensed as incurred.  Initial Implementation Stage: Outlays are capitalized as an addition to the subscription asset.

Upon adoption, the City elected to exclude the capitalizable outlays associated with the initial implementation stage and the operation and additional implementation stage that were incurred prior to the implementation of this Statement in the measurement of subscription assets as of July 1, 2022.

Subscription assets are reported within capital assets and subscription liabilities are reported with long-term liabilities on the statement of net position. Subscription assets are amortized using the straight-line method over the shorter of the subscription term or the useful life of the underlying IT asset, unless the subscription contains a purchase option that the City has determined is reasonably certain of being exercised. In this case, the subscription asset is amortized over the useful life of the underlying IT asset.

Key estimates and judgments related to SBITA include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.
 The City uses the interest rate charged by the SBITA vendor as the discount rate. When the interest rate charged by the SBITA vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for SBITA.
 The subscription term includes the noncancellable period of the SBITA. Subscription payments included in the measurement of the subscription liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.

L. Lease Liabilities
The City recognizes lease liabilities with an initial, individual value of $5,000 or more with a lease term greater than one year in the government-wide and proprietary fund financial statements. Variable payments based on future performance of the City or usage of the underlying asset are not included in the measurement of the lease liability. Lease assets are reported within capital assets and lease liabilities are reported with long-term liabilities on the statement of net position.

At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made.

Key estimates and judgments related to leases liabilities include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.  The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
 The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.

The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure any lease asset or liability if certain changes occur that are expected to significantly affect the amount of the lease liability.