Inc., which was funded with a Port Security Grant. Due to CJIS regulations, the Field Services Commander is also the administrator for those cameras on behalf of the Port.
STRATEGIC PLAN:
Primary Strategic Pillar and Initiative:
• Optimal Levels of Service for Residents and Businesses o Promote operational excellence in all City functions and embody best practices as a municipality
FISCAL IMPACT:
Approval of this action would require an appropriation of $10,000 for the flock camera service agreement in Account No.101-440-5223 in fiscal year 2023-24. The estimated unassigned fund balance after this appropriation is $6,399,001.
ATTACHMENTS:
A. Flock Group Inc. SAAS Services Agreement
B. Flock Group Inc. Certificate of Liability Insurance
Agenda Item No. 09 Page 2 of 13 CC Agenda 05-20-2024
Flock Safety + CA - Port Hueneme PD
______________
Flock Group Inc.
1170 Howell Mill Rd, Suite 210
Atlanta, GA 30318
______________
MAIN CONTACT:
Ashlee Adeli
[email protected]
(470) 508-5771
Attachment A
Agenda Item No. 09 Page 3 of 13 CC Agenda 05-20-2024
Company Overview
At Flock Safety, technology unites law enforcement and the communities they serve to eliminate crime and shape a safer future, together. We created the first public safety operating system to enable neighborhoods, schools, businesses, and law enforcement to work together to collect visual, audio, and situational evidence across an entire city to solve and prevent crime.
Our connected platform, comprised of License Plate Recognition (LPR), live video, audio detection, and a suite of integrations (AVL, CAD & more), alerts law enforcement when an incident occurs and turns unbiased data into objective answers that increase case clearance, maximize resources, and reduce crime -- all without compromising transparency or human privacy.
Join thousands of agencies reducing crime with Flock Safety’s public safety operating system 2000+ 120 1B+ <60%*
communities with privatepublic partnershipsincident alerts / minute 1B+ vehicles detected / month
<60% local crime reduction
in Flock cities
*According to a 2019 study conducted by Cobb County Police Department Introduction
Layer Intelligence to Solve More Crime
The pathway to a safer future looks different for every community. As such, this proposal presents a combination of products that specifically addresses your public safety needs, geographical layout, sworn officer count, and budget. These components make up your custom public safety operating system, a connected device network and software platform designed to transform real-time data into a panoramic view of your jurisdiction and help you zero in on the leads that solve more cases, prevent future crimes, and foster trust in the communities you serve.
Software Platform
Flock Safety's out-of-box software platform collects and makes sense of visual, audio, and situational evidence across your entire network of devices.
Agenda Item No. 09 Page 4 of 13 CC Agenda 05-20-2024
Out-of-Box Software Features
Simplified Search Get a complete view of all activity tied to one vehicle in your network of privately and publicly owned cameras.
The user-friendly search experience allows officers to filter hours of footage in seconds based on time, location, and detailed vehicle criteria using patented Vehicle Fingerprint ™ technology. Search filters include:
● Vehicle make
● Body type
● Color
● License plates
○ Partial tags
○ Missing tags
○ Temporary tags
○ State recognition
● Decals
● Bumper stickers
● Back racks
● Top racks
National and Local Sharing Access 1B+ additional plate reads each month without purchasing more cameras. Solve cross-jurisdiction crimes by opting into Flock Safety's sharing networks, including one-toone, national, and statewide search networks. Users can also receive alerts from several external LPR databases:
California SVS
FDLE
FL Expired Licenses
FL Expired Tags
FL Sanctioned Drivers
FL Sex Offenders
Georgia DOR
IL SOS
Illinois Leads
NCIC
NCMEC Amber Alert
REJIS
CCIC
FBI
Real-time Alerts Receive SMS, email, and in-app notifications for custom Hot Lists, NCIC wanted lists, AMBER alerts, Silver alerts, Vehicle Fingerprint matches, and more.
Interactive ESRI Map View your AVL, CAD, traffic, and LPR alerts alongside live onscene video from a single interactive map for a birdseye view of activity in your jurisdiction.
Vehicle Location Analysis Visualize sequential Hot List alerts and the direction of travel to guide officers to find suspect vehicles faster.
Agenda Item No. 09 Page 5 of 13 CC Agenda 05-20-2024
Out-of-Box Software Features (Continued)
Transparency Portal Establish community trust with a public-facing dashboard that shares policies, usage, and public safety outcomes related to your policing technology.
Insights Dashboard Access at-a-glance reporting to easily prove ROI, discover crime and traffic patterns and prioritize changes to your public safety strategy by using data to determine the most significant impact.
Native MDT Application Download FlockOS to your MDTs to ensure officers never miss a Hot List alert while out on patrol.
Hot List Attachments
Attach relevant information to Custom Hot List alerts. Give simple, digestible context to Dispatchers and Patrol Officers responding to Hot List alerts so they can act confidently and drive better outcomes. When you create a custom Hot List Alert, add case notes, photos, reports, and other relevant case information.
Single Sign On (SSO) Increase your login speed and information security with Okta or Azure Single Sign On (SSO). Quickly access critical
information you need to do your job by eliminating the need for password resets and steps in the log-in process.
Agenda Item No. 09 Page 6 of 13 CC Agenda 05-20-2024
License Plate Recognition
The Flock Safety Falcon® LPR camera uses Vehicle Fingerprint™ technology to transform hours of footage into actionable evidence, even when a license plate isn't visible, and sends Hot List alerts to law enforcement users when a suspect vehicle is detected. The Falcon has fixed and location-flexible deployment options with 30% more accurate reads than leading LPR.* *Results from the 2019 side-by-side comparison test conducted by LA County Sheriff's Department Flock Safety Falcon®LPR Camera Flock Safety Falcon® Flex Flock Safety Falcon® LR Fixed, infrastructure-free LPR camera
designed for permanent placement.
√ 1 Standard LPR Camera
√ Unlimited LTE data service + Flock OS
platform licenses
√ 1 DOT breakaway pole
√ Dual solar panels
√ Permitting, installation, and ongoing
maintenance
Location-flexible LPR camera designed
for fast, easy self-installation, which is
ideal for your ever-changing
investigative needs.
√ 1 LPR Camera
√ Unlimited LTE data service + software
licenses
√ 1 portable mount with varying-sized
band clamps
√ 1 Charger for internal battery
√ 1 hardshell carrying case
Long-range, high-speed LPR camera
that captures license plates and Vehicle
Fingerprint data for increasing
investigative leads on high-volume
roadways like highways and interstates.
√ 1 Long-Rage LPR Camera
√ Computing device in protective poly
case
√ AC Power
√ Permitting, installation, and ongoing
maintenance
Agenda Item No. 09 Page 7 of 13 CC Agenda 05-20-2024
Your Flock Safety Team
Flock Safety is more than a technology vendor; we are a partner in your mission to build a safer future. We work with thousands of law enforcement agencies across the US to build stronger, safer communities that celebrate the hard work of those who serve and protect. We don’t disappear after contracts are signed; we pride ourselves on becoming an extension of your hard-working team as part of our subscription service.
Implementation Meet with a Solutions Consultant (former LEO) to build a deployment plan based on your needs. Our Permitting Team and Installation Technicians will work to get your device network approved, installed, and activated.
User Training + Support Your designated Customer Success Manager will help train your power users and ensure you maximize the platform,
while our customer support team will assist with needs as they arise.
Maintenance We proactively monitor the health of your device network. If we detect that a device is offline, a full-time technician will service your device for no extra charge.
Note: Ongoing maintenance does not apply to Falcon Flex devices.
Public Relations Government Affairs
Get support educating your stakeholders, including city councils and other governing bodies.
Media Relations
Share crimes solved in the local media with the help of our Public Relations team.
Agenda Item No. 09 Page 8 of 13 CC Agenda 05-20-2024
EXHIBIT A
ORDER FORM
Customer: CA - Port Hueneme PD Initial Term: 24 Months
Legal Entity Name: CA - Port Hueneme PD Renewal Term: 24 Months Accounts Payable Email: Payment Terms: Net 30
Address: 250 N Ventura Rd Port Hueneme, California
93041
Billing Frequency: Annual - First Year at Signing.
Retention Period: 30 Days
Hardware and Software Products
Annual recurring amounts over subscription term
Item Cost Quantity Total
Flock Safety Platform $30,000.00
Flock Safety Flock OS
FlockOS ™ - Essentials Included 1 Included
Flock Safety LPR Products
Flock Safety Falcon ® Included 10 Included
Professional Services and One Time Purchases
Item Cost Quantity Total
One Time Fees
Subtotal Year 1: $30,000.00
Annual Recurring Subtotal: $30,000.00
Estimated Tax: $0.00
Contract Total: $60,000.00
Taxes shown above are provided as an estimate. Actual taxes are the responsibility of the Customer. This Agreement will automatically renew for successive renewal terms of the greater of one year or the length set forth on the Order Form (each, a “Renewal Term”) unless either Party gives the other Party notice of non-renewal at least thirty (30) days prior to the end of the then-current term.
Agenda Item No. 09 Page 9 of 13 CC Agenda 05-20-2024
Billing Schedule
Billing Schedule Amount (USD)
Year 1
At Contract Signing $30,000.00
Annual Recurring after Year 1 $30,000.00
Contract Total $60,000.00
*Tax not included
Agenda Item No. 09 Page 10 of 13 CC Agenda 05-20-2024
Product and Services Description
Flock Safety Platform Items Product Description Terms
FlockOS™ Flock Safety’s situational awareness operating system.
Flock Safety Falcon ®
An infrastructure-free license plate reader camera that utilizes Vehicle Fingerprint® technology to capture vehicular attributes.
The Term shall commence upon first installation and validation of Flock Hardware.
One-Time Fees Service Description
Installation on existing
infrastructure
One-time Professional Services engagement. Includes site & safety assessment, camera setup & testing, and shipping & handling in accordance with the Flock Safety Advanced Implementation Service Brief.
Professional Services - Standard
Implementation Fee
One-time Professional Services engagement. Includes site and safety assessment, camera setup and testing, and shipping and handling in accordance with the Flock Safety Standard Implementation Service Brief.
Professional Services -
Advanced Implementation Fee
One-time Professional Services engagement. Includes site & safety assessment, camera setup & testing, and shipping & handling in accordance with the Flock Safety Advanced Implementation Service Brief.
FlockOS Features & Description
FlockOS Features Description
Community Network Access
The ability to request direct access to feeds from privately owned Flock Safety Falcon® LPR cameras located in neighborhoods, schools, and businesses in your community, significantly increasing actionable evidence that clears cases.
Unlimited Users Unlimited users for FlockOS
State Network (License Plate Lookup Only) Allows agencies to look up license plates on all cameras opted into the Flock Safety network within your state.
Nationwide Network (License Plate Lookup Only)
With the vast Flock Safety sharing network, law enforcement agencies no longer have to rely on just their devices alone. Agencies can leverage a nationwide system boasting 10 billion additional plate reads per month to amplify the potential to collect vital evidence in otherwise dead-end investigations.
Law Enforcement Network Access The ability to request direct access to evidence detection devices from Law Enforcement agencies outside of your jurisdiction.
Time & Location Based Search Search full, partial, and temporary plates by time at particular device locations License Plate Lookup Look up specific license plate location history captured on Flock devices Vehicle Fingerprint Search Search footage using Vehicle Fingerprint™ technology. Access vehicle type, make, color, license plate state, missing / covered plates, and other unique features like bumper stickers, decals, and roof racks.
Insights & Analytics Reporting tool to help administrators manage their LPR program with device performance data, user and network audits, plate read reports, hot list alert reports, event logs, and outcome reports.
ESRI Based Map Interface Map-based interface that consolidates all data streams and the locations of each connected asset, enabling greater situational awareness and a common operating picture.
Real-Time NCIC Alerts on Flock ALPR Cameras
Receive automated alerts when vehicles entered into established databases for missing and wanted persons are detected, including the FBI’s National Crime Information Center (NCIC) and National Center for Missing & Exploited Children (NCMEC) databases.
Unlimited Custom Hot Lists Ability to add a suspect’s license plate to a custom list and get alerted when it passes by a Flock camera Agenda Item No. 09 Page 11 of 13 CC Agenda 05-20-2024
By executing this Order Form, Customer represents and warrants that it has read and agrees all of the terms and conditions contained in the Terms of Service located at https://www.flocksafety.com/terms-and-conditions /L1/
The Parties have executed this Agreement as of the dates set forth below.
FLOCK GROUP, INC. Customer: CA - Port Hueneme PD
By:
\FSSignature2\
By:
\FSSignature1\
Name:
\FSFullname2\
Name:
\FSFullname1\
Title:
\FSTitle2\
Title:
\FSTitle1\
Date:
\FSDateSigned2\
Date:
\FSDateSigned1\
PO Number:
Agenda Item No. 09 Page 12 of 13 CC Agenda 05-20-2024
X
08/23/2024
10,000
X
2,000,000
25674
ZPL-91N55329-23-I3
A
10,000,000
A
X
A
5,000,000
08/23/2024 X
Errors&Omissions(SIR: $50,000)
08/23/2023
CN134017657--GAUWE-23-24
1,000,000
25615
08/23/2024
SEA-003941278-00
08/23/2023
X
2,000,000
08/22/2023
0 Cyber (SIR: $50,000) 5,000,000
1,000,000
X
08/23/2024 Cyber Aggregate Limit
1,000,000
1,000,000
B
08/23/2024
08/23/2023
08/23/2023
X
810-6T343696-23-I3-G
E&O Limit
10,000
UB-6T346569-23-I3-G
CUP-6T386924-23-I3
ZPL-91N55329-23-I3
1,000,000
DBA Flock Safety
Flock Group Inc
Atlanta, GA 30318
1170 Howell Mill Rd NW
1,000,000
Travelers Property Casualty Company of America
X
FOUR EMBARCADERO CENTER, SUITE 1100
MARSH RISK & INSURANCE SERVICES
SAN FRANCISCO, CA 94111
CALIFORNIA LICENSE NO. 0437153
H-630-9W194831-TIL-23
The Charter Oak Fire Insurance Company
08/23/2023
N
Atlanta, GA 30318
Flock Group Inc. DBA Flock Safety
1170 Howell Mill Rd Northwest
08/23/2023
A
1,000,000
X
A
10,000,000
08/23/2024
Attachment B
Agenda Item No. 09 Page 13 of 13 CC Agenda 05-20-2024
DATE: May 20, 2024
TO: Honorable City Council
FROM: James Vega, City Manager
Tony Stewart, AICP, Community and Economic Development Director SUBJECT: UPDATE TO CANNABIS ORDINANCE
RECOMMENDATION:
It is recommended the City Council:
1. Introduce for first reading, by title only, waiving further reading of an Ordinance entitled, “An Ordinance of the City Council of the City of Port Hueneme Amending Article III of the Municipal Code to supersede Ordinance 796, which comprises Chapter 12, to implement various laws of the State of California by allowing medicinal and nonmedicinal and/or commercial cannabis facilities within the City subject to regulatory parameters that protect public health, safety, and welfare”; and
2. Make a determination the project is exempt under CEQA.
BACKGROUND/ANALYSIS:
On February 20, 2024, the City Council held a public hearing to approve revisions to the City’s Cannabis Ordinance, and subsequently amended the City’s related Cannabis Implementing Resolution. Since that date, staff has determined that three minor revisions are further needed to be made to the Cannabis Ordinance (no additional revisions are required for the Implementing Resolution, however). The proposed revisions are:
1. Amending Section 3985(B) (page 9 of the attached redlined Ordinance) to clarify that background checks through the Port Hueneme Police Department’s LiveScan process will continue to be required for business owners and security guards, but not for employees of a cannabis business. This will be consistent with the Implementing Resolution and will potentially save the businessowners a substantial amount of money since they will no longer be required to pay the background processing costs for employees who come and go on a frequent basis.
It should be noted this request was made by the Port Hueneme Police Department.
Agenda Item No. 10 Page 1 of 33 CC Agenda 05-20-2024
Modifications to Cannabis Ordinance
May 20, 2024
2. Amending Section 3989.5(O) (pages 14-15 of the attached ordinance) to require that at least one armed security guard be present at each dispensary during hours of operation. While this has been the norm through to the approval of each dispensary’s security plan through the Certificate of Approval process, two separate dispensary owners have recently approached staff regarding the necessity of bearing the costs for armed security guards. However, as the City Council may be aware, it has been statistically proven that the presence of the armed security guards has reduced crime rates in the vicinities of the dispensaries (contrary to popular belief that dispensaries result in increased crime). This is one of the reasons why the community continues to support cannabis operations in the City. In addition, the armed guards protect employees, visitors (i.e., persons delivering cannabis products, taking cash from the facilities to banks, etc.) and customers of the dispensaries. Therefore, the Chief of Police and other members of the City’s Cannabis Business Review Committee recommend the Cannabis Ordinance clearly require the presence of an armed guard at each dispensary.
3. Amending Section 3989.6(O) (page 18 of the attached Ordinance), to add language to clarify that while an applicant for a cannabis consumption lounge that will be added to an existing dispensary apply for modifications to the previously approved Certificate of Approval and entitlements (Conditional Use Permit and Development Agreement), a new Certificate of Approval and new entitlements will be required for any new, stand-alone consumption lounge, since these approvals would be specific to that stand-alone location.
California Environmental Quality Act (CEQA)
This Ordinance is exempt from additional review under the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., “CEQA”) and CEQA regulations (14 California Code of Regulations §§ 15000, et seq.)
1. The Ordinance will not adversely affect adjoining property as to value or precedent, and will not be detrimental to the area.
2. The Ordinance does not authorize any new construction or use; rather, it merely prescribes a process that requires the vetting of environmental, land use and operational issues in connection with each application for a Certificate of Approval.
As such, the Ordinance is not a “project” under CEQA because: (1) it establishes "general policy and procedure making" (CEQA Guidelines § 15378(b)(2); and (2) it constitutes "organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment” (CEQA Guidelines 15378(b)(5)).
3. The Implementing Resolution is self-mitigating insofar as it provides the means for avoiding environmental impacts, if any are identified, as part of each discretionary application for a Certificate of Approval. As stipulated in PHMC Section 10352C(7), each conditional use application is subject to separate environmental review under CEQA. Furthermore, as stipulated in PHMC Sections 10482, 10462, Agenda Item No. 10 Page 2 of 33 CC Agenda 05-20-2024
Modifications to Cannabis Ordinance
May 20, 2024
and 10542, conditional uses within the C-1, M-1 and R-4 zones may only be allowed so long as they will not be injurious or detrimental to the public health, safety or welfare or to property in the vicinity or zone in which the use or uses will be situated.
4. Issuance of ministerial permits for personal, non-commercial cultivation is categorically exempt as a Class 1 or Class 5 project in so far, at best, the activities that are authorized would constitute a minor alteration of existing public structures involving no expansion of use, or a minor alteration in land use limitations (see 14 CCR §§15301, 15305).
FISCAL IMPACT:
There will be no direct fiscal impact from this action.
STRATEGIC PLAN:
Primary Strategic Pillar(s) and Initiative(s):
Innovation & Opportunity
• Retain and maximize opportunities for local businesses as the backbone of our community
• Invest in new programs and technologies to strengthen our economy and attract innovation
ATTACHMENT:
A. Redlined Ordinance
Agenda Item No. 10 Page 3 of 33 CC Agenda 05-20-2024
This Page Intentionally Left Blank
Agenda Item No. 10 Page 4 of 33 CC Agenda 05-20-2024
ORDINANCE NO. ____
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PORT HUENEME,
CALIFORNIA, AMENDING ARTICLE III OF THE MUNICIPAL CODE TO SUPERSEDE ORDINANCE 796, WHICH COMPRISES CHAPTER 12, TO
IMPLEMENT VARIOUS LAWS OF THE STATE OF CALIFORNIA BY
ALLOWING MEDICINAL AND NONMEDICINAL AND/OR COMMERCIAL
CANNABIS FACILITIES WITHIN THE CITY SUBJECT TO REGULATORY
PARAMETERS THAT PROTECT PUBLIC HEALTH, SAFETY, AND WELFARE The City Council of the City of Port Hueneme does ordain as follows:
SECTION 1: The City Council finds and determines as follows:
A. On November 5, 1996, the voters of the State of California approved Proposition 215, codified as Health and Safety Code Section 11362.5, et seq., entitled the Compassionate Use Act of 1996 (“CUA”). The CUA exempts qualified patients and their primary caregivers from criminal liability under state law for the possession and cultivation of marijuana for personal medical use.
B. The intent of the CUA is to enable persons in the State of California who are in need of marijuana for medicinal purposes to obtain it and use it under limited, specified circumstances.
C. Health and Safety Code Section 11362.7, et seq., (“Medical Marijuana Program Act,” or “MMPA”) clarifies the scope of CUA and allows cities and other governing bodies to adopt and enforce rules and regulations consistent with the MMPA. The MMPA created a state-approved voluntary medical marijuana identification card program and provided for certain additional immunities from state marijuana laws.
D. The Federal Controlled Substances Act, 21 U.S.C. § 801, et seq., classifies marijuana as a Schedule 1 Drug, which is defined as a drug or other substance that has a high potential for abuse, that has no currently accepted medical use in treatment in the United States, and that has not been accepted as safe for use under medical supervision. The Federal Controlled Substances Act makes it unlawful under federal law for any person to cultivate, manufacture, distribute or dispense, or possess with intent to manufacture, distribute or dispense, marijuana. The Federal Controlled Substances Act contains no exemption for medical purposes.
E. In 2015, the Medical Marijuana Regulation and Safety Act (“MMRSA”) became effective. MMRSA establishes a State of California licensing scheme for commercial medical marijuana uses while protecting local control by requiring that all such businesses must have a local license or permit to operate in addition to a State license.
MMRSA allows a city to completely prohibit commercial medical marijuana activities.
F. The limited immunity from specified state marijuana laws provided by the CUA and MMPA does not confer a land use right or the right to create or maintain a public nuisance.
G. In City of Riverside v. Inland Empire Patients Health and Wellness Center, Inc. (2013) 56 Cal.4th 729, the California Supreme Court held that “[n]othing in the CUA or the MMP expressly or impliedly limits the inherent authority of a local jurisdiction, by its own ordinances, to regulate the use of its land ... .” Additionally, in Maral v. City of Live Oak (2013) 221 Cal.App.4th 975, the Court of Appeal held that “there is no right – and Attachment A
Agenda Item No. 10 Page 5 of 33 CC Agenda 05-20-2024
Ordinance No.___, Page 2 of 29
certainly no constitutional right – to cultivate medical marijuana ... .” The Court in Maral affirmed the ability of a local governmental entity to prohibit the cultivation of marijuana under its land use authority.
H. A statewide initiative entitled the “Control, Regulate and Tax Adult Use of Marijuana Act” (“AUMA”) was approved by voters on the November 2016 ballot. AUMA decriminalizes (under California law), controls and regulates the cultivation, processing, manufacture, distribution, testing and sale of nonmedical marijuana, including marijuana products, for use by adults 21 years of age or older. AUMA also taxes the commercial growth and retail sale of marijuana. It does not, and cannot, affect federal regulations as to marijuana or its derivatives.
I. AUMA expressly preserves local control over the regulation of marijuana-related businesses and marijuana-related land uses (Business & Professions Code § 26200, et seq.)
J. On June 5, 2017, the City Council adopted Ordinance 727, which amended Article III, Chapter 12 of the Port Hueneme Municipal Code to allow medicinal cannabis activity within the City.
K. In response to California voter approval of the Control, Regulate and Tax Adult Use of Marijuana Act (“AUMA”), the City Council adopted Ordinance 734 on December 18, 2017, which amended Article III, Chapter 12 of the Port Hueneme Municipal Code permitting medicinal and non-medicinal cannabis activity within the City.
L. On June 21, 2021, the City Council adopted Ordinance 780, which amended Article III, Chapter 12, of the Port Hueneme Municipal Code, which further refined the City’s regulations for cannabis activity in the City, including establishing caps for the maximum number of certain types of cannabis businesses allowed in the City, and which superseded Ordinances 727 and 734.
M. On March 7, 2022, the City Council adopted Ordinance 784, which amended Article III, Chapter 12, of the Port Hueneme Municipal Code, which further refined the City’s regulations for cannabis activity in the City, including allowing the establishment of cannabis consumption lounges within, or adjacent to, and operated by, existing retail cannabis dispensaries in the City, and which superseded Ordinance 780.
N. On February 20, 2024, the City Council adopted Ordinance 796, which amended Article III, Chapter 12, of the Port Hueneme Municipal Code, which further refined the City’s regulations for cannabis activity in the City, including allowing for the operation of free-standing cannabis lounges subject to certain requirements within the City, extended operating hours for retail cannabis businesses, and occasional small-scale temporary events at retail dispensaries and consumption lounges in the City, which superseded Ordinance 784.
O. The City Council now desires to supersede Ordinance 796 by enacting this Ordinance, which governs all medicinal, non-medicinal, and commercial cannabis activity within the City, including eliminating the requirement for background checks for employees of retail cannabis dispensaries, requiring armed guards at retail cannabis dispensaries and clarifying application requirements for cannabis consumption lounges that will be incorporated into an existing dispensary and those that will be free-standing.
Agenda Item No. 10 Page 6 of 33 CC Agenda 05-20-2024
Ordinance No.___, Page 3 of 29
SECTION 2: Authority. This Ordinance is adopted pursuant to the authority granted by the California Constitution and state law, including, without limitation, Article XI, Section 7 of the California Constitution; the CUA, MMPA, MMRSA and AUMA. The City Manager is authorized to administer this Ordinance and to promulgate such administrative policies and procedures that may be required to implement this Ordinance.
SECTION 3: Findings. The City Council finds as follows:
A. This Ordinance will not adversely affect adjoining property as to value or precedent, and will not be detrimental to the area. Since 1996, thirty-nine states and the District of Columbia have legalized the use, home cultivation, and, in some cases, the retail dispensing of medical and/or adult use marijuana. In a study published March 26, 2014 in the journal PLOS One, researchers analyzed FBI crime statistics from eleven of these states between 1990 and 2006. (Morris RG, TenEyck M, Barnes JC, Kovandzic TV (2014) The Effect of Medical Marijuana Laws on Crime: Evidence from State Panel Data, 1990-2006. PLOS ONE 9(3): e92816. doi: 10.1371/journal.pone.0092816.) The states included Alaska, California, Colorado, Hawaii, Maine, Montana, Nevada, Oregon, Rhode Island, Vermont and Washington. The research revealed that laws authorizing the use and dispensing of medical marijuana are not predictive of higher crimes rates and, in fact, may be related to reductions in rates of homicide and assault.
Robbery and burglary rates were found to be unaffected by medical marijuana legislation, despite widely-held belief to the contrary. The results of the study were consistent with other prior research suggesting that medical marijuana dispensaries may actually reduce crime in the immediate vicinity. Indeed, a U.S. National Institutes of Health study found that the psychopharmacologic effect of marijuana has “been attributed to ‘mellowing out’ or causing individuals to ‘nod out,’ conditions that are likely to ameliorate violent tendencies.” (U.S. Department of Health and Human Services, Public Health Service & National Institute on Drug Abuse, “Drugs and Violence:
Causes, Correlates and Consequences,” NIDA Research Monograph 103, at 187 (1990)). The same study noted that marijuana use had no correlation to violent crime. (Id. at 8, 25, Table 6 and 232). Further, the City Council finds that secondary impacts associated with marijuana dispensaries in the City, such as the possibility of increased crime at the facility, an increase in people loitering about the facility, and odors, have been ameliorated through the provisions of this Ordinance, based upon the drop of crime around areas containing approved cannabis dispensaries since the first dispensary in the City opened in 2018. Accordingly, there is substantial evidence to support the conclusion that this ordinance will not be detrimental to any area of the City or have an adverse effect on property values. To the contrary, it is anticipated that the limited authorization of marijuana-related businesses and uses contemplated by the ordinance, together with the strict regulatory controls set forth therein, will have the effect of reducing crime in the City and promoting public health, safety and the general welfare.
B. This Ordinance promotes public health, safety and general welfare. Based on the studies and sources cited in the preceding paragraph, there is substantial evidence to support the conclusion that the limited authorization of marijuana-related businesses and uses contemplated by the ordinance, together with the strict regulatory controls set forth therein, will have the effect of reducing crime in the City and would, therefore, promote public health, safety and the general welfare.
C. This Ordinance will not adversely affect the City’s General Plan or zoning regulations set forth in the Port Hueneme Municipal Code (“PHMC”) because this Ordinance (i) regulates commercial cannabis activity without regard to zone district or development Agenda Item No. 10 Page 7 of 33 CC Agenda 05-20-2024
Ordinance No.___, Page 4 of 29
standards that are properly relegated to Article X of the PHMC; and (ii) preserves the City’s land use authority to determine the appropriate zone district and permit process by which such uses may be allowed.
SECTION 4: Article III, Chapter 12 of the PHMC is amended and superseded to read as follows:
“Chapter 12
CANNABIS ACTIVITY
3980 Purpose.
This Chapter is adopted pursuant to the City’s police powers and municipal affairs provision of the City Charter for the purpose of permitting commercial cannabis activity for medical and nonmedical purposes in compliance with state and local laws. Nothing in this Chapter is intended to, nor does, duplicate or conflict with applicable local, state, or, beyond the extent constitutionally permissible, federal laws.
3981 General Prohibitions.
A. It is unlawful for any person to engage in commercial cannabis activity without a valid Certificate of Approval issued pursuant to this Chapter for each location at which the activity is proposed to occur.
B. Unless otherwise provided by this Chapter, it is unlawful for any person to engage in commercial cannabis activity from other than a fixed location within the City’s jurisdiction for which a Certificate of Approval has been obtained and remains in effect.
C. It is unlawful for any person to cause, permit, aid, abet, or conceal a violation of any provision of this Chapter.
3982 Permitted Cannabis Activity.
Subject to applicable state law and this Chapter, commercial cannabis activity is permitted when approved by the City in accordance with this Chapter. Specifically, the following commercial cannabis activity may be allowed pursuant to a Certificate of Approval:
A. Sale;
B. Indoor cultivation;
C. Delivery;
D. Manufacturing;
E. Testing Services;
F. Distribution; and
G. Cannabis Lounges.
3983 Definitions.
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Unless the contrary is stated or clearly appears from the context, the following definitions will govern the construction of the words and phrases used in this Chapter. Words and phrases undefined in this Chapter have the same meaning as set forth in the Adult Use of Marijuana Act; the Compassionate Use Act; the Medical Marijuana Program Act; the Medical Marijuana Regulation and Safety Act; or the “Control, Regulate and Tax Adult Use of Marijuana Act.” “Cannabis” means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. “Cannabis” also means the separated resin, whether crude or purified, obtained from marijuana. “Cannabis” also means marijuana as defined by Health and Safety Code Section 11018. “Cannabis” does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this Chapter, “cannabis” does not mean “industrial hemp” as defined by Food and Agricultural Code Section 81000 of the or Health and Safety Code Section 11018.5. For purposes of this code, “marijuana” has the same meaning as cannabis and the two terms are used interchangeably. “Cannabis Lounge” means a discrete, licensed premise where cannabis goods may be purchased and smoked, ingested, or otherwise consumed within the confines of the premises. “Certificate of Approval” or “Certificate” means final approval granted for commencement of a commercial cannabis activity under this Chapter.
“Commercial cannabis activity” includes cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution, or sale of medical cannabis or a medical cannabis product, or of nonmedical cannabis or nonmedical cannabis products, except as set forth in Business and Professions Code Section 19319, related to qualifying patients and primary caregivers.
“Cultivation” means any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.
“Delivery” means the commercial transfer of medical cannabis or medical cannabis products from a facility, up to an amount determined by the bureau, to a primary caregiver or qualified patient as defined in Health and Safety Code Section 11362.7, or a testing laboratory. “Delivery” also includes the use by a facility of any technology platform owned and controlled by the facility, or independently licensed under California law, which enables qualified patients or primary caregivers to arrange for or facilitate the commercial transfer by a licensed facility of medical cannabis or medical cannabis products.
“Director” means the City Manager, or designee.
“Distribution” shall have the meaning as provided in Section 26001(r) of the California Business and Professions Code, as amended from time to time. “Distributor” is one holding a valid certificate of Approval and license as for Distribution activities.
“Employee” at a facility means any person who performs work at the facility, including but not limited to any owner, supervisor, worker or volunteer, whether paid or unpaid, full time or partAgenda Item No. 10 Page 9 of 33 CC Agenda 05-20-2024 Ordinance No.___, Page 6 of 29
time. “Employ” means to hire or otherwise retain or allow a person to act as an employee.
Incidental contractors and enforcement officials (as defined in this Chapter) shall not be considered employees.
“Enforcement official” means an employee of or contractor for the City, County, or State who is enters onto the premises of a facility for the purpose of implementing this Chapter or enforcing applicable laws.
“Facility” means a facility at which commercial cannabis activity occurs as authorized by this Chapter including, without limitation, a medical marijuana collective, a medical or nonmedical marijuana dispensary, a cannabis consumption lounge, a commercial cannabis distribution facility, a commercial cannabis cultivation facility, a Testing Service, or a manufacturing site for cannabis products.
“Identification card” means a document issued either by a governmental agency, e.g., the California Department of Health Services, or other valid documentation that identifies a person as someone authorized to engage in the medical use of marijuana, and that identifies the person’s designated primary caregiver, if any.
“Implementing Resolution” means a resolution or resolutions adopted by the City Council which prescribes the application process, eligibility requirements and/or operational parameters governing commercial cannabis activity and/or cultivation of cannabis, as such resolutions may be revised, replaced or amended from time to time. “Incidental contractors” means independent contractors who are brought in to a facility only occasionally and solely to perform specialized services generally applicable to non-cannabis businesses (e.g. pest control specialist, plumber, electrician, copier repair tech). “Medical marijuana collective” means a collective, cooperative, association, dispensary or other entity, whether for profit or nonprofit in nature, that cultivates, distributes, dispenses, stores, exchanges, processes, delivers, makes available or gives away cannabis in the City for medical purposes to qualified patients, or primary caregivers of qualified patients pursuant to Health and Safety Code § 11362.5 or any State regulations promulgated to implement the Compassionate Use Act of 1996. Medical Marijuana Collective does not include the following uses, so long as such uses comply with this Code and other applicable law:
A. A clinic licensed pursuant to Health and Safety Code § 1200, et seq.
B. A health care facility licensed pursuant to Health and Safety Code § 1250, et seq.
C. A residential care facility for persons with chronic life-threatening illness licensed pursuant to Health and Safety Code § 1568.01, et seq.
D. A residential care facility for the elderly licensed pursuant to Health and Safety Code § 1569, et seq.
E. A hospice or a home health agency licensed pursuant to Health and Safety Code § 1725, et seq.
“Medical cannabis,” medical cannabis product,” or “cannabis product” has the same meaning as set forth in Business & Professions Code § 19300.5(ag), as the same may be amended from time to time.
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“Operations Plan” means an operating plan approved by the Police Chief, that implements the standard requirements of this Chapter along with such additional, reasonable, criteria needed to protect public health and safety as determined by the Police Chief, based upon the size and location of the proposed facility.
“Person with an identification card” means an individual who is a qualified patient who has applied for and received a valid identification card.
“Personal cultivation”, “cultivation for personal use” and similar terms mean cultivation of cannabis for personal use, whether medical or nonmedical, by (i) the cultivator, and/or (ii) if for medical use, by the cultivator’s qualified patient, if the cultivator is the primary caregiver of the qualified patient.
“Police Chief” means the Police Chief, or designee.
“Primary caregiver” means the individual, designated by a qualified patient or by a person with an identification card, who has consistently assumed responsibility for the housing, health, or safety of that patient or person, and may include any of the following:
A. In any case in which a qualified patient or person with an identification card receives medical care or supportive services, or both, from a clinic licensed pursuant to Health and Safety Code Section 1200, et seq., a health care facility licensed pursuant to Health and Safety Code Section 1250, et seq., a residential care facility for persons with chronic life-threatening illness licensed pursuant to Health and Safety Code Section 1568.01, et seq., a residential care facility for the elderly licensed pursuant to Health and Safety Code Section 1569, et seq., a hospice, or a home health agency licensed pursuant to Health and Safety Code Section 1725, et seq., the owner or operator, or no more than three employees who are designated by the owner or operator, of the clinic, facility, hospice, or home health agency, if designated as a primary caregiver by that qualified patient or person with an identification card.
B. An individual who has been designated as a primary caregiver by more than one qualified patient or person with an identification card, if every qualified patient or person with an identification card who has designated that individual as a primary caregiver resides in the same city or county as the primary caregiver.
C. An individual who has been designated as a primary caregiver by a qualified patient or person with an identification card who resides in a city or county other than that of the primary caregiver, if the individual has not been designated as a primary caregiver by any other qualified patient or person with an identification card.
D. A primary caregiver must be at least 21 years old, unless the primary caregiver is the parent of a minor child who is a qualified patient or a person with an identification card or the primary caregiver is a person otherwise entitled to make medical decisions under state law pursuant to Family Code Sections 6922, 7002, 7050, or 7120. “Proof of identity” is defined as a means of proving the person seeking medical marijuana is the person’s name in the doctor’s recommendation or as the primary caregiver, and may include, by way of example, photograph identity materials, such as a valid California driver’s license, California DMV identity card, or a US passport. “Qualified patient” means a person who is entitled to the protections of Health and Safety Code Section 11362.5.
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“School” means any public or private school providing instruction in kindergarten any grades 1 through 12. A school does not include any private school in which education is primarily conducted in private homes.
“Testing Service” or “Testing Services” has the same meaning as “testing service” set forth in Health and Safety Code § 26001.
3984 State License Required; Timing.
To engage in commercial cannabis activity allowed by this Chapter, a person or entity must provide all information and comply with all requirements identified in the Implementing Resolution and obtain all of the following:
A. First, a Certificate of Approval as required by this Chapter.
B. After obtaining a Certificate of Approval issued by this Chapter, a person must thereafter obtain and maintain all required State of California commercial cannabis activity licenses required for the facility, e.g. a Type 6 (Manufacturer 1) license issued by the California Department of Consumer Affairs and/or a Type 10 or 10A (Dispensary) license issued by the California Department of Consumer Affairs, etc. as enumerated in Cal. Bus. & Prof. Code section 19300.7 or other applicable state law, once such licenses become available. Operation of the facility without a state license or licenses is permissible during the time such licenses are not available.
C. Background check approval from the City for each employee at the facilityowner or other representative of the applicant and security guard of the facility, pursuant to Section 3985 of this Chapter.
D. After obtaining a Certificate of Approval, a person must thereafter, before commencing a commercial cannabis activity, obtain a Development Permit and any other permits and approvals required for the facility under Article X or other provision of this Code.
Failure to obtain all entitlements outlined in this Chapter, any resolutions or regulations adopted in relation to this Chapter, or Article X of this Code, including, without limitation, a Certificate of Approval, discretionary development entitlements, a development agreement adopted by ordinance of the City Council, and a certificate of occupancy prior to engaging in commercial cannabis activity shall be a violation of this Ordinance and shall constitute grounds for revocation or suspension of all entitlements. Notwithstanding the foregoing, the City may enforce violations of this Chapter through any legal means to abate violations of this Code and prevent illegal cannabis activities.
Notwithstanding any other provision of applicable law, unless extended or renewed, a Certificate of Approval will be rendered void should a person fail to obtain, within six (6) months following issuance of the Certificate of Approval, or thereafter maintain, the state license and other permits and approvals required by this Section. The six (6) month period shall be extended by a reasonable amount of time to reflect delays due to state backlog if the applicant has filed for such a license or licenses, provided all information and fees required by the state have been provided to the state within the initial six (6) month period following issuance of the Certificate of Approval.
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3985 Certificate of Approval Qualifications; Background Check for Applicants and Employees.
A. To protect public health and safety, and to further ensure that commercial cannabis activity permitted by this Chapter is in the public interest, the City may establish by Implementing Resolution and/or by administrative policies and procedures promulgated by the City Manager the procedures for determining the qualifications of persons allowed to apply for a Certificate of Approval or allowed to be employed at a facility. Any such resolution, policy or procedures may also (i) establish the application fees and method, including timing, for objectively evaluating and reaching a decision on applications for a Certificate of Approval pursuant to this Chapter, and (ii) establish operating standards and restrictions as the City may require from time to time.
B. Pursuant to California Penal Code Sections 11105(b)(11) and 13300(b)(11), which authorize City authorities to access State and local summary criminal history information for employment, licensing, or certification purposes, and authorize access to federal level criminal history information by transmitting fingerprint images and related information to the Department of Justice to be transmitted to the Federal Bureau of Investigation, every applicant for a Certificate of Approval (including owners and other representatives of the applicant), and security guards and every person to be employed at the facility must submit fingerprints and other information deemed necessary by the Chief of Police or his/her designee(s) for a background check by the Port Hueneme Police Department. A fee for the cost of the background investigation, which shall be the actual cost to the City of Port Hueneme to conduct the background investigation as it deems necessary and appropriate, including City staff time and costs, shall be paid at the time the person submits for the background check.
C. In addition to any other qualifications, methods and procedures established for applicants pursuant to Paragraph A above in this Section, and except as permitted by the Police Chief on good cause shown, an applicant for a Certificate of Approval or for employment at a commercial cannabis activity shall be denied a Certificate of Approval and disqualified from employment at a facility if the background check or other information shows that the applicant:
1. Is dishonest or untrustworthy;
2. Has committed a felony or misdemeanor involving fraud, deceit or embezzlement;
3. Was convicted of a violent felony or crime of moral turpitude; or
4. Was convicted of unlawful activity under the Federal Controlled Substances Act, except for California medical cannabis-related offenses for which the conviction occurred after the passage of the Compassionate Use Act of 1996, and where the conviction related solely to lack of legal authority to engage in the business.
D. Any transfer of an interest in a commercial cannabis activity or change in location of an established and approved cannabis business shall comply with the requirements of this Chapter and the Implementing Resolution.
3985.5 Term of Certificate.
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Unless otherwise provided in the Certificate, a Certificate of Approval shall expire one year following its issuance. All commercial cannabis activity at the facility shall cease upon expiration of the Certificate unless and until the Certificate is renewed or a new Certificate of Approval is issued pursuant to the Implementing Resolution. The renewal of the Certificate of Approval shall not be unreasonably withheld based upon the City’s review of the applicant’s compliance with conditions of approval, any regulations adopted by resolution or City requirement, changes in circumstances, operations or ownership or staffing, observing all relevant laws, ordinances and regulations, and such other factors as are reasonable. 3986 Limitations on City’s Liability.
A. To the fullest extent permitted by law, the City does not assume any liability whatsoever, with respect to approving any Certificate of Approval pursuant to this code or the operation of any facility approved pursuant to this code.
B. As a prerequisite to issuance of a Certificate of Approval, the applicant must:
1. Execute an agreement indemnifying the City from any claims, judgments, awards, damages, injuries, or liabilities of any kind arising out of or related to issuance of a Certificate of Approval and/or approval of a Development Permit or Ministerial Permit, or operation of the facility or the prosecution of the facility or its owners, managers, directors, officers, employees, or its qualified patients or primary caregivers for violation of federal or State laws;
2. Maintain insurance in the amounts and of the types that are reasonably acceptable to the City Manager or designee;
3. Name the City as an additionally insured on all City required insurance policies;
4. Agree to pay the reasonable fees and costs of legal counsel selected by the City to defend the City, its agents, officers, and/or employees against any claim described in subsection 3986(B)1 above; and
5. Agree to reimburse the City for any court costs and reasonable attorney fees the City may be required to pay as a result of any claim described in subsection 3986(B)1 above.
6. The agreements required by this subsection 3986(B) must be secured with sufficient insurance, as determined by the City Attorney, and a surety, as approved by the City Attorney, to adequately protect the City from any and all liability. The surety requirement may be waived in the discretion of the director if the applicant demonstrates sufficient net worth to adequately cover the liability exposure.
FACILITIES
3987 Location Criteria.
A. Facilities may only be allowed within the zone districts designated by Implementing Resolution. Each physical location of a facility requires a separate Certificate of Approval.
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B. It is unlawful for any portion of the parcel on which a facility is located to be within 600 feet of any parcel that contains a school.
C. If a facility is located above the ground floor, it must be accessible to persons with disabilities in conformance with applicable law including, without limitation, the California Building Code as adopted by this code.
D. A Certificate of Approval may be renewed for a facility located on a parcel that is within 600 feet of a school if: (1) the school located to the area after the Certificate of Approval was first issued; (2) the Certificate of Approval has not lapsed for any period of time; and (3) the facility was in continuous operation. For purposes of this section, a temporary interruption of business activity due to fire, natural disaster or other force majeure is excused provided reasonable steps are taken by the Certificate holder to resume business operations expeditiously. The prior, temporary suspension of a Certificate of Approval does not render a Certificate of Approval ineligible for renewal under this section provided the applicant otherwise qualifies for renewal.
E. Unless otherwise prohibited by State law, other provisions of this Chapter, or regulations or requirements adopted by the City, holders of more than one Certificate of Approval and related state license to operate different types of cannabis facilities may operate the facilities from the same location.
3987.1 Maximum Number of Commercial Cannabis Businesses – Density A. The following caps on types of commercial cannabis activities and/or facilities within the territorial jurisdiction of the City shall apply to all commercial cannabis operations in an effort to reduce the incidence of excessive concentration of commercial cannabis activities:
1. Retail Cannabis Dispensaries: there shall not be more than twelve (12) approved retail cannabis dispensaries approved, located, and operating within the City territorial limits at any time;
2. Delivery Businesses: with the exception of Retail Cannabis Dispensaries, which receive a delivery license upon approval by the City, there shall not be more than six (6) approved delivery only cannabis businesses within the City territorial limits at any time and, in no event, more than eighteen (18) total delivery business licenses approved, located, and operating within the City territorial limits at any time;
3. Cannabis Lounges: there shall be not more than five (5) cannabis lounges operating within the City territorial limits at any time; and
4. Manufacturing/Distribution Businesses: there shall not be more than ten (10) manufacturing licenses and not more than eight (8) distribution licenses approved, located, and operated within the City territorial limits at any time.
B. Notwithstanding the preceding subdivision of this Section, businesses that have received a Certificate of Approval or have an active application for a Certificate of Approval in process with the City as of June 21, 2021 shall be allowed to continue in the application process towards final approval in compliance with this Chapter and any resolutions for the operation of a commercial cannabis activity and/or facility.
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Approval may be issued at any time the maximum number of activities exceeds the limits contained within this Section after June 21, 2021.
C. This Section shall not prohibit an existing and approved commercial cannabis activity or business from changing its location of operation provided all requirements of this Chapter and the Implementing Resolution are fulfilled. Any change in the ownership structure, business entity, ownership, or interest in the commercial cannabis activity or business will be governed by the implementing resolution. Changes in location and in ownership, depending on the criteria identified in the implementing resolution, may require a new Certificate of Approval and may be prohibited by this Section after the effective date of this Section should the number of commercial cannabis activities or facilities exceed the maximum number.
3988 Operations Plan and Standards.
A Certificate of Approval issued for a facility must include, as conditions of approval, the operating standards set forth below. In addition, the Certificate of Approval must incorporate by reference an Operations Plan approved by the Police Chief, that implements not only the operating standards set forth in this Section, but such additional conditions that the Police Chief finds reasonably necessary to implement the purpose of this Chapter when considering the location, size and other characteristics of the proposed facility. 3989 Community Relations.
A. Each facility must provide the City Manager or designee with the name, telephone number, and email address of an on-site community relations or staff person or other representative to whom the City can provide notice if there are operating problems associated with the facility or refer members of the public who may have any concerns or complaints regarding the operation of the facility. Each facility must also provide the above information to all businesses and residences located within 100 feet of the facility.
During the first year of operation of a facility authorized under this Chapter, the owner, manager, and community relations representative from each such facility must attend a monthly meeting with the City Manager and/or designee to discuss costs, benefits and other community issues arising as a result of implementation of the Certificate of Approval authorized by this Chapter. After the first year of operation, the owner, manager, and community relations representative from each such facility must meet with the City Manager and/or designee when and as requested by the City Manager or designee, with reasonable notice.
DISPENSARIES
3989.5 Operational Standards for Dispensaries.
In addition to all other requirements of an Operations Plan required by this Chapter, dispensary facilities must include the following in an Operations Plan approved by the Police Chief:
A. Except as otherwise provided, a facility can only be open for access to the public between the hours of 8:00 a.m. and 10:00 p.m.
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B. It is unlawful for alcohol or tobacco to be sold within the facility. Further, it is unlawful for smoking, vaporization, ingestion or consumption of alcohol, tobacco or marijuana in any form, to occur on the premises of a facility, elsewhere on the same parcel, or in outdoor areas adjacent to the parcel (e.g., parking lots, walkways, sidewalks, streets, parks, etc.).
C. It is unlawful for cannabis or cannabis products or graphics depicting cannabis or cannabis products to be publicly visible from the exterior of the property. It is unlawful to store cannabis or cannabis products outside of the facility at any time.
D. All cannabis and cannabis products allowed to be sold or otherwise made available at a facility must be cultivated, manufactured, distributed and transported by licensed facilities that maintain operations in full conformance with State and local regulations including, without limitation, certification by a testing service as required by applicable law; provided, however, that this requirement may be waived for some designated period of time at the director’s sole discretion if, due to timing issues and coordination with state requirements, it would be difficult or impossible to meet this requirement.
E. It is unlawful for a physician to be located in, or on the same parcel as, a facility at any time for the purpose of evaluating patients to issue a medical marijuana prescription or recommendation. A physician is neither required nor prohibited from being located in or on the same parcel as a facility operating solely as a nonmedical facility.
F. Before dispensing cannabis or cannabis products to any person, the facility must verify that the person possesses proof of identity, proving their identity as the patient specified in the recommendation or as the primary caregiver.
G. Each facility must provide the Police Chief, with the name and telephone number of an on-site employee or owner to whom emergency notice can be provided. The telephone number provided must be capable of accepting recorded voice messages in the event the contact person does not answer.
H. Except for employees of the facility, enforcement officials and incidental contractors, it is unlawful for any person to be allowed into any area of a facility where medical cannabis products are displayed and/or being offered for sale unless that person is a qualified patient or has a valid identification card (as defined in Section 3983), or is named as a designated primary caregiver on a valid identification card, together with proof of identity. It is unlawful for any person under the age of 21 to be present in any area of a facility where nonmedicinal cannabis products are displayed and/or being offered for sale. A sign must be posted at each entrance to a sales/display area of the facility informing patrons of these restrictions. Proof of identity as a qualified patient is not required at a facility that is operated solely as a nonmedical commercial cannabis facility.
I. It is unlawful for any person under age 21 to be present in any lobby or reception area of a facility unless the facility is being operated solely as a medical cannabis facility and that person is a qualified patient or primary caregiver and is accompanied by a parent or legal guardian.
J. It is unlawful for any person to employ any other person at a facility unless: (i) the person is at least 21 years of age; and (ii) the person has passed any background check and employee registration process specified by Implementing Resolution.
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K. Each entrance to a facility must be posted with a conspicuous notice stating that smoking, vaping, ingesting, or otherwise consuming cannabis on the premises or in the areas adjacent to the facility is prohibited.
L. Medical cannabis dispensaries can only dispense medical cannabis or cannabis products to a “person with a physician’s recommendation,” as defined in Section 3983, or a qualified patient, either of whom possesses proof of identity.
M. Cannabis and cannabis products for personal nonmedical use may not be displayed, dispensed or sold separately or in combination with a medicinal commercial cannabis activity at the same facility unless a separate Certificate of Approval is acquired for each such use.
N. Entrances into any area of a facility where cannabis products are displayed and/or being offered for sale must be locked at all times with entry strictly controlled. A “buzzin” electronic/mechanical entry system must be utilized to limit access to such areas and to separate them from the outside and/or any adjacent reception/lobby area. The specifics of such entry system must be set forth in the operations plan.
O. Uniformed security personnel must be employed to monitor all entrances and exits of the facility and to serve as a visual deterrent to unlawful activities during all hours of operation. At least one armed security guard must be present at the facility at all hours of operation. Every security guard employed by or provided by the facility must be currently licensed by the California Bureau of Security & Investigative Services and in possession of a valid “guard card.” The number of such security personnel must be set forth in the operations plan.
P. All restroom facilities serving a facility must remain locked and under the control of management.
Q. Odor control devices and techniques must be incorporated as needed in a facility to ensure that odors from marijuana are not detectable outside of the facility or in any tenant space or area adjacent to the facility.
R. It is unlawful for any person within a facility to provide cannabis or cannabis products to any individual in a quantity not consistent with personal use.
S. A facility cannot store more than $200.00 in cash reserves overnight on the premises except as may be otherwise provided in the operations plan incorporated as a condition of approval in the Certificate of Approval.
T. All law enforcement and code enforcement personnel seeking admission to the facility for the purpose of ascertaining compliance with the standards and regulations of this code must be given unrestricted access to all areas of the premises at all times during hours of operation. Consent to such unrestricted access must be acknowledged by the Certificate of Approval holder and included within the operations plan.
U. All interior spaces of the facility which are open and accessible to the public (except restrooms), and all entrances and exits to and from the premises, must be monitored by 24-hour video security surveillance of at least HD quality with night vision capability.
The video security system must be compatible with software and hardware utilized by the City as determined by the Police Chief and set forth in the operations plan.
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premises and all footage must be maintained for a minimum of 45 days. The video surveillance system specifications must be set forth in the operations plan before the City issues a certificate of occupancy for the facility.
V. A facility must have a professionally installed, maintained, and monitored alarm system as approved through the operations plan.
W. A facility must maintain a valid business license as required by this code.
X. All food products, food storage facilities, food-related utensils, equipment and materials must be approved, used, managed and handled in accordance with the provisions of the California Retail Food Code (Health & Safety Code § 113700 et seq.).
All food products must be protected from contamination at all times, and all food handlers must be clean, in good health, and free from communicable diseases. The Ventura County Department of Environmental Health may inspect the facility at any time during business hours to ensure compliance with this Section.
Y. Except as otherwise provided by state law, state or City regulation or condition of approval, baked cannabis products (e.g., brownies, bars, cookies, cakes), tinctures, and other non-refrigerated items may be sold at a facility.
Z. A Certificate of Approval for a facility is subject to all of the regulations and operational standards set forth in this section in addition to the conditions stated in the Certificate of Approval itself.
AA. Each dispensary may have a maximum of two, temporary uses that are minor in nature each month that are incidental to the normal, day-to-day dispensary operations, such as a food truck or a vendor’s booth to promote the sale of their product, without approval of a Special Use Permit from the City. The business owner shall inform the Community Development Director at least 24 hours prior to the temporary use taking place. The business owner shall be responsible for obtaining landlord approval. All vendors associated with said events who sell products, food, etc. directly at the events shall possess a City business license. For any event that will incorporate amplified music, use more than two parking spaces, generate a crowd, or would otherwise impact the surrounding businesses and or residences, the dispensary owner shall first obtain a Special Use Permit from the City.
3989.6 Operational Standards for Cannabis Lounges.
In addition to all other requirements of an Operations Plan required by this Chapter, and in Section 3989.5, Operational Standards for Dispensaries (unless otherwise amended below), cannabis lounge facilities must include the following Operations Plan approved by the Police Chief:
A. Cannabis Lounges must only be operated as members-only establishments, and shall be operated by an existing adult use cannabis dispensary that has been approved to operate within the City of Port Hueneme and licensed by the State of California.
Cannabis lounges may be located in an existing dispensary, immediately adjacent to an existing dispensary, or may be in a location that is separate from the dispensary operating said lounge, provided the lounge meets all locational requirements of a commercial cannabis facility, per Section 3987 of this Chapter.
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B. Patrons may smoke, inhale, consume or ingest cannabis and cannabis products within the confines of the cannabis lounge premises only.
C. Permittees shall create patron consumption guidelines that may include the utilization of labels, menu notifications, signage, portion control, dosage monitoring, and staff education to prevent the overconsumption of cannabis by patrons. A consumption lounge is authorized to sell any type of cannabis product for consumption on-site in compliance with State packaging requirements. Cannabis goods shall only be provided to an individual in an amount reasonable for on-site consumption and consistent with personal possession and use limits allowed by the State. Vaping products shall be limited to single, individually packaged vape cartridges and pens of no more than one (1) gram.
D. Permittees shall not permit patrons to bring their own personal cannabis or cannabis goods to the cannabis lounge facility.
E. All cannabis goods purchased and opened at the facility must be smoked, inhaled, consumed or ingested on-site, and shall not be permitted to leave the facility unless repackaged in a container that is compliant with all applicable state law and regulation.
Permittees shall only permit patrons to leave the cannabis lounge facility with cannabis and cannabis goods that remain in originally sealed and unopened packaging or have been transferred by the operator for repackaging in a container that is compliant with all applicable state law and regulation.
F. The sale or consumption of alcohol or tobacco products is not allowed on the premises.
G. Access to the cannabis lounge facility shall be restricted to persons twenty-one (21) years of age and older.
H. The smoking, inhalation, consumption or ingestion of cannabis or cannabis goods shall not be visible from any public place or any area where minors may be present.
The cannabis lounge shall be located within a completely enclosed building.
I. Permittee shall provide an adequate odor control plan so as to prevent any detectable odor immediately outside of the premises (this shall include within business suites that may be located adjacent to the cannabis lounge facility). Within 24 hours of any complaint concerning odors emanating from or originating within the facility, the permittee shall respond to the complaint in question, and shall timely file a written disclosure to the City documenting any and all actions taken and planned to address the odor complaints. If the odor complaints persist, the facility shall be closed until the situation is resolved.
J. Areas where cannabis consumption is permitted shall provide adequate security and lighting on-site, in addition to that required by the adjacent dispensary retail sales area, to ensure the safety of persons and protect the premises from theft at all times in conformance with the security plan approved for the subject facility by the City.
K. Permittee shall not provide service to impaired patrons and shall provide information on rideshare services.
L. The hours of operation for cannabis lounges shall be from 9:00 a.m. to 10:00 p.m., seven (7) days per week, with the last sale/last call taking place at 9:00 p.m. daily.
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M. Permittee shall provide the Port Hueneme Chief of Police and all neighbors within 100 feet of the business with the name and phone number of an on-site community relations employee to notify if there are operational problems with the establishment.
N. Each cannabis lounge may have a maximum of two, temporary uses that are minor in nature each month that are incidental to the normal, day-to-day dispensary operations, such as a food truck or a vendor’s booth to promote the sale of their product, without approval of a Special Use Permit from the City. The business owner shall inform the Community Development Director at least 24 hours prior to the temporary use taking place. The business owner shall be responsible for obtaining landlord approval. All vendors associated with said events who sell products, food, etc. directly at the events shall possess a City business license. For any event that will incorporate amplified music, use more than two parking spaces, generate a crowd, or would otherwise impact the surrounding businesses and or residences, the dispensary owner shall first obtain a Special Use Permit from the City.
O. An amended Certificate of Approval, along with a Major Modification to the approved Conditional Use Permit and Development Agreement for the existing dispensary, shall be required for a cannabis lounge that is added to the operations of an existing dispensary, and is subject to all of the regulations and operational standards set forth in this section in addition to the conditions stated in the Certificate of Approval itself. A new Certificate of Approval, along with a Conditional Use Permit and Development Agreement shall be required for all new, free-standing cannabis consumption lounges.
CULTIVATION
3990 Outdoor Cultivation Prohibited; Exception.
Except for personal medicinal use as provided in Section 3993 below, outdoor cultivation of commercial cannabis is prohibited in all areas of the City. 3991 Operational Standards for Cultivation.
In addition to all other requirements of an Operations Plan required by this Chapter, facilities engaged in indoor cultivation of medical or nonmedical marijuana must include the following in an Operations Plan approved by the Police Chief:
A. The facility can have only one contiguous cultivation area, except that segregated areas within the facility are permitted with the Police Chief’s approval and the approval of the fire chief regarding fire code issues.
B. It is unlawful to use flammable or explosive substances in the cultivation of cannabis.
C. Facilities engaged in cultivation must follow all pesticide use requirements of local, state and federal law.
D. The Operations Plan must include a detailed electrical and plumbing plan, along with projections for water usage.
E. All law enforcement personnel seeking admission to the cultivation site for the purpose of ascertaining compliance with the standards and regulations of this code must be given unrestricted access to all areas of the premises at all times during hours of Agenda Item No. 10 Page 21 of 33 CC Agenda 05-20-2024
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operation. Consent to such unrestricted access must be acknowledged by the applicant and included within the Operations Plan.
F. It is unlawful for any person under the age of 21 to be present within the area where the cultivation of cannabis is occurring. A sign must be posted at each entrance to a cultivation facility informing visitors of these restrictions.
G. All cultivation activity must be conducted in compliance with all applicable state and local water conservation laws, ordinances, and regulations.
H. Each cannabis cultivation facility must provide the Police Chief with the name and telephone number of an on-site employee or owner to whom emergency notice can be provided. The telephone number provided must be capable of accepting recorded voice messages in the event the contact person does not answer.
I. Entrances into any area of a cannabis cultivation facility where cannabis is grown or kept must be locked at all times with entry strictly controlled. The specifics of such entry system must be set forth in the Operations Plan.
J. Odor control devices and techniques must be incorporated in a cannabis cultivation facility to ensure that odors from cannabis are not detectable outside of the facility or in any tenant space or area adjacent to the facility.
K. A cannabis cultivation facility must have a professionally installed, maintained, and monitored alarm system as approved through the Operations Plan.
L. Cannabis cultivation facilities cannot be open to the public, though the facility may dispense cannabis in accordance with a Certificate of Approval.
M. A cannabis cultivation facility must be equipped with an automated fire suppression system to the satisfaction of the Building Official.
N. Except as expressly approved as part of the Operations Plan and incorporated in a Certificate of Approval, it is unlawful for any cannabis cultivation facility to use, employ, or maintain any equipment, system, material or apparatus for the purpose of increasing the ambient carbon dioxide levels within any grow area.
O. It is unlawful to cultivate cannabis within 600 feet of any other parcel containing a school.
P. It is unlawful for cannabis or cannabis products or graphics depicting cannabis or cannabis products to be publicly visible from the exterior of the property. It is unlawful to store cannabis or cannabis products outside of the facility at any time.
Q. All interior spaces of the facility which are open and accessible to the public (except restrooms), and all entrances and exits to and from the premises, must be monitored by 24-hour video security surveillance of at least HD quality with night vision capability.
The video security system must be compatible with software and hardware utilized by the City as determined by the Police Chief and set forth in the operations plan.
Surveillance video must be recorded to a device that is securely located on the premises and all footage must be maintained for a minimum of 45 days. The video Agenda Item No. 10 Page 22 of 33 CC Agenda 05-20-2024
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surveillance system specifications must be set forth in the operations plan before the city issues a certificate of occupancy for the facility.
R. A facility must maintain a valid business license as required by this code.
S. A Certificate of Approval for a facility is subject to all of the regulations and operational standards set forth in this section in addition to the conditions stated in the Certificate of Approval itself.
3992 Personal Indoor Cultivation; Standards and Regulations.
Outdoor cultivation of cannabis for personal use in accordance with state law may only be permitted as regulated under the provisions of Section 3993 of this Chapter. 3993 Personal Cultivation for Medicinal Use; Development and Operational Standards.
A. Not more than six cannabis plants of any size may be cultivated on any parcel regardless of the number of qualified patients or caregivers residing on the property.
B. Cultivation cannot exceed 75 square feet in cumulative area.
C. All outdoor cannabis cultivation must be fully enclosed by an opaque fence six feet in height. The fence must be at least ten feet from any structure on the property and be adequately secure to prevent unauthorized entry and theft. Alternatively, outdoor cannabis cultivation may be conducted in a secure opaque greenhouse structure, subject to the approval of the Police Chief. The Police Chief will determine the level of security necessary. Indoor cultivation for personal medical marijuana is permissible, subject to the pertinent provisions hereof.
D. It is unlawful to cultivate cannabis within 600 feet of any other parcel containing a school.
E. No lighting, heaters, fans, generators or other mechanical equipment that may cause a nuisance to neighbors may be used in connection with the cultivation of cannabis.
F. It is unlawful to cultivate cannabis in the front yard area of any parcel.
G. It is unlawful to cultivate cannabis within the required rear or side yard setbacks of any parcel.
H. It is unlawful for there to be any audible or olfactory evidence of cannabis cultivation from any street, sidewalk, public right-of-way, or adjacent property, or any visual evidence of cannabis cultivation when viewed from five feet above ground level from any street, sidewalk, public right-of-way, or adjacent property.
I. The cultivation of medicinal cannabis is permitted for non-commercial purposes only.
It is unlawful to sell, trade, barter, or engage in any other commercial exchange of cannabis or cannabis products cultivated pursuant to this section.
J. The address of any dwelling on a parcel where cannabis is cultivated must be posted and plainly visible from the public right-of-way.
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K. Cultivation of cannabis cannot occur on any property where a parolee or probationer resides unless the parolee or probationer has received confirmation from a court of competent jurisdiction that he or she is allowed to use medical cannabis while on parole or probation pursuant to Health and Safety Code section 11362.795. Such confirmation must be provided to City staff or law enforcement upon request.
L. Any law enforcement personnel may, after providing 24 hours’ notice, enter onto the property where cultivation of medical cannabis is occurring pursuant to this section for the purpose of inspecting the cultivation site and perimeter fencing. This section does not purport to authorize any law enforcement personnel to enter any dwelling located on the property. For purposes of this section, notice is sufficient if posted at the entrance to the dwelling on the property or if hand delivered to any person over the age of 18 residing on the property.
M. It is unlawful for any person under the age of 21 to be present within the fenced area where the cultivation of medical cannabis is occurring unless such person is a qualified patient or a primary caregiver and he or she is in the presence of his or her parent or guardian.
N. All cultivation activities must be conducted in compliance with all applicable state and local water conservation laws, ordinances, and regulations.
O. Nothing in this section is intended to authorize the cultivation, possession, or use of cannabis in violation of State or federal law.
P. Notwithstanding any other provision of this code, or applicable law, no variances are permitted from any of the regulations in this section.
Q. Prior to commencing cultivation under this Section, the cultivator shall obtain a Ministerial Permit from the City as provided by Implementing Resolution. A valid Ministerial Permit must be maintained in effect by the cultivator throughout the period of cultivation. The cultivator shall remove all cannabis plants and plant materials from the property within 24 hours following termination or expiration of the Ministerial Permit.
DELIVERY
3994 Delivery.
A. A Certificate of Approval for a facility may authorize the delivery of medical cannabis as part of and in conjunction with the operation of the facility. Deliveries by dispensaries other than those which are located in the City of Port Hueneme and hold a valid Certificate of Approval under this Chapter are unlawful.
B. Delivery of cannabis from a facility that has obtained a Certificate of Approval pursuant to this Chapter can only be made in a city or county that does not expressly prohibit such deliveries by ordinance.
C. It is unlawful for any person under the age of 21 to be allowed to serve as a delivery driver and no person can employ a person under the age of 21 for the purpose of making deliveries of any medical cannabis product.
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D. A facility which has obtained a Certificate of Approval pursuant to this Chapter may have its delivery privileges suspended or terminated by the City Manager if the facility is found to have violated this Chapter.
MANUFACTURING AND TESTING FACILITIES
3995 Operations Plan; Additional Requirements. In addition to any other requirements of an Operations Plan, a Testing Service or a facility engaged in manufacturing cannabis products must include, as conditions precedent to issuance of a Certificate of Approval, an Operations Plan encompassing the elements set forth in Section 3996.
3996 Operational Standards.
A. The manufacture of cannabis products and the operations of a Testing Service must be undertaken in a manner that ensures the health, safety, and welfare of the public, the employees of the cannabis business, visitors, and neighboring properties, and must be in full compliance with State law.
B. All law enforcement and code enforcement personnel seeking admission to the manufacturing or testing site for the purpose of ascertaining compliance with the standards and regulations of this code must be given unrestricted access to all areas of the premises at all times during hours of operation. Consent to such unrestricted access must be acknowledged by the applicant and included within the Operations Plan.
C. It is unlawful for any person under the age of 21 to be present within the area where the manufacture or testing of cannabis products is occurring. A sign must be posted at each entrance to a manufacturing or testing facility informing visitors of these restrictions.
D. All manufacturing and testing activity must be conducted in compliance with all applicable state and local water conservation laws, ordinances, and regulations.
E. It is unlawful for any person to employ another person under the age of 21 at a cannabis manufacturing or testing facility.
F. Entrances into any area of a cannabis manufacturing or testing facility where cannabis products are made, tested or kept must be locked at all times with entry strictly controlled. The specifics of such entry system must be set forth in the Operations Plan.
G. Odor control devices and techniques must be incorporated in a cannabis manufacturing or testing facility as needed to ensure that odors from cannabis are not detectable outside of the facility or in any tenant space or area adjacent to the facility.
H. A cannabis manufacturing or testing facility must have a professionally installed, maintained, and monitored alarm system as approved through the Operations Plan.
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I. It is unlawful for cannabis manufacturing or testing facilities to be open to the public.
J. Any compressed gases used in the manufacturing or testing process shall not be stored in containers that exceed 150 pound tanks in size. Each facility shall be limited to a total of eight tanks on the property at any time.
K. Cannabis manufacturing and testing facilities are limited to the following methods, equipment, solvents, gases and mediums when creating cannabis extracts:
1. Cannabis manufacturing and testing facilities may use the hydrocarbons Nbutane, isobutane, propane, or heptane or other solvents or gases exhibiting low to minimal potential human-related toxicity approved by the director.
These solvents must be of at least ninety-nine percent purity and any extraction process must use them in a professional grade closed loop extraction system designed to recover the solvents, work in an environment with proper ventilation, controlling all sources of ignition where a flammable atmosphere is or may be present.
2. Any extraction processes must use a professional grade closed loop CO₂ gas extraction system where every vessel is rated to a minimum of six hundred pounds per square inch. The CO₂ must be of at least ninety-nine percent purity.
3. Closed loop systems for hydrocarbon or CO₂ extraction systems must be commercially manufactured and bear a permanently affixed and visible serial number.
4. Certification from a licensed engineer must be provided to the Community Development Department for professional grade closed loop systems used by any cannabis manufacturing or mechanized testing system to certify that the system was commercially manufactured, safe for its intended use, and built to codes of recognized and generally accepted good engineering practices, such as: (i) the American Society of Mechanical Engineers (ASME); (ii) the American National Standards Institute (ANSI); (iii) Underwriters Laboratories (UL); or (iv) the American Society for Testing and Materials (ASTM).
5. The certification document must contain the signature and stamp of a professional engineer and serial number of the extraction unit being certified.
6. Professional closed loop systems, other equipment used, the extraction operation, and facilities must be approved for their use by the Fire Department and meet any required fire, safety, and building code requirements specified in the California Building Reference Codes.
L. Cannabis manufacturing facilities may use heat, screens, presses, steam distillation, ice water, and other methods without employing solvents or gases to create kief, Agenda Item No. 10 Page 26 of 33 CC Agenda 05-20-2024
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hashish, bubble hash, or infused dairy butter, or oils or fats derived from natural sources, and other extracts.
M. Cannabis manufacturing facilities may use food grade glycerin, ethanol, and propylene glycol solvents to create extracts. All ethanol must be removed from the extract in a manner to recapture the solvent and ensure that it is not vented into the atmosphere.
N. Cannabis manufacturing facilities creating marijuana extracts must develop standard operating procedures, good manufacturing practices, and a training plan prior to producing extracts for the marketplace. Any person using solvents or gases in a closed looped system to create marijuana extracts or otherwise in a testing or manufacturing facility must be fully trained on how to use the system, have direct access to applicable material safety data sheets and handle and store the solvents and gases safely.
O. Parts per million for one gram of finished extract produced in a manufacturing facility cannot exceed 500 parts per million of residual solvent or gas when quality assurance tested.
P. It is unlawful for cannabis or cannabis products or graphics depicting cannabis or cannabis products to be publicly visible from the exterior of the property. It is unlawful to store cannabis or cannabis products outside of the facility at any time.
Q. Each facility must provide the Police Chief, with the name and telephone number of an on-site employee or owner to whom emergency notice can be provided. The telephone number provided must be capable of accepting recorded voice messages in the event the contact person does not answer.
R. All entrances and exits to and from the premises, must be monitored by 24-hour video security surveillance of at least HD quality with night vision capability. The video security system must be compatible with software and hardware utilized by the city as determined by the Police Chief and set forth in the operations plan. Surveillance video must be recorded to a device that is securely located on the premises and all footage must be maintained for a minimum of 45 days. The video surveillance system specifications must be set forth in the operations plan before the City issues a certificate of occupancy for the facility.
S. A facility must maintain a valid business license as required by this code.
T. A Certificate of Approval for a facility is subject to all of the regulations and operational standards set forth in this section in addition to the conditions stated in the Certificate of Approval itself.
U. The following requirements shall apply to all testing facilities:
1. Testing laboratories shall be required to conduct all testing in a manner pursuant to Business and Professions Code Section 26100 and shall be subject to state and local law. Each testing laboratory shall be subject to additional regulations as they are developed or modified by the State of California.
2. Testing laboratories shall conduct all testing in a manner consistent with general requirements for the competence of the testing and calibration Agenda Item No. 10 Page 27 of 33 CC Agenda 05-20-2024
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activities, including a sampling using verified methods, pursuant to Section 26100(f).
3. All cannabis testing laboratories performing testing shall obtain and maintain ISO/IEC 17025 accreditation as required by the state, pursuant to Section 26100(g).
4. Testing laboratories shall destroy the remains of the sample cannabis or cannabis products upon the completion of the analysis as determined by the state through regulations, pursuant to Section 26100(i).
5. Testing laboratories shall dispose of any waste byproduct resulting from their operations in the manner required by state and local laws and regulations. 3996.1 Distribution.
A. Distribution is the procurement, sales and transport of cannabis and cannabis products between dispensaries.
B. The transportation of cannabis or cannabis products shall only be conducted by persons holding a Distribution certificate or employee of those persons.
C. Transportation safety standard, in addition to those imposed by the State of California, shall approved by the Chief of Police including without limitations, the type of vehicles in which cannabis or cannabis product may be distributed, and minimal qualification for persons eligible to operate such vehicles.
D. A person holding a Distribution Certificate shall observe all security manifest, and notice requirements of Section 26070 (sections e through n, inclusive).
ENFORCEMENT
3997 Enforcement of Certificates of Approval; Generally.
In addition to other remedies set forth in this code, violations of this Chapter may be prosecuted as infractions or misdemeanors at the City Attorney’s discretion and may be abated as public nuisances. The remedies provided by Sections 3997 through 3999.5 are cumulative and in addition to any other criminal or civil remedies. For purposes of Sections 3997 through 3999.5, violations of this Chapter include (i) violation of the provisions of this Chapter; (ii) violation of any Implementing Resolution; (iii) violation of any administrative policy or procedure promulgated by the City Manager; (iv) violation of the terms and conditions of a Certificate of Approval, development agreement, indemnification agreement, operations plan, development permit, or other permit or agreement associated with a facility; and (v) violation of terms and conditions of a Ministerial Permit issued for cannabis cultivation for personal use. 3998 City Attorney Enforcement Authority.
In addition to any other general functions, powers, and duties given to the City Attorney by this code or California law, the City Attorney is authorized to:
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A. Prosecute on behalf of the people all criminal and civil cases for violations of this Chapter including, without limitation, administrative or judicial nuisance abatement and suits for injunctive relief.
B. Prosecute all actions for the recovery of fines, penalties, forfeitures, and other money accruing to the City under this Chapter.
3999 Administrative Suspension and Revocation.
A. Suspension or Revocation. In addition to any other penalty authorized by law, the director may suspend or revoke a Certificate of Approval for the following reasons:
1. Upon learning that an applicant provided false, misleading or materially incomplete information in connection with its application for a Certificate of Approval or discovering facts that require denial of an application for a Certificate of Approval under this Chapter that were not previously disclosed by the applicant; or
2. Upon occurrence of a violation under this Chapter.
B. Notice of Suspension or Revocation. If the Director elects to suspend or revoke a Certificate of Approval, the Director shall provide written notice of suspension or revocation to the holder of the Certificate at the address of the facility. The notice shall state the basis for the suspension or revocation and provide information regarding the right to appeal. Unless the Director determines there is an imminent threat to public health, safety and welfare and makes the suspension or revocation effective immediately, suspension or revocation of the Certificate of Approval shall not become effective until the time for filing an appeal has passed or, if an appeal is timely filed, until the City Manager has rendered a final decision on the appeal. 3999.1 Appeal of Notice of Suspension or Revocation.
A. A notice of suspension or revocation of a Certificate of Approval may be appealed to the City Council, provided that a request for review (appeal) is filed with the office of the City Manager within ten calendar days from the date on which the written notice of suspension of revocation was mailed to the holder of the Certificate. If a request for review is untimely, the City Council may, but is not required to, extend the time for commencing such review for good cause shown.
B. A request for review must be on a form provided by the Community Development Department and contain the following information:
1. The name, address and telephone number of the person making the request;
2. A description of the decision, determination or order which is the subject of the review and the date such decision, determination or order was made or issued;
3. A complete description of all grounds for making the request, together with any evidence in support of the request; and
4. Such other information as may be required by the Director.
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C. Upon receiving a timely request for review, the City Council, will schedule and conduct a de novo appeal review of the decision of the Director, which shall be heard as soon as the schedule of the City Council permits, but in any event not later than twenty one (21) business days of receiving the request. At the conclusion of the hearing, the City Council may conclude any of the following:
1. The Director’s decision is affirmed;
2. The Director’s decision is modified; or
3. The Director’s decision is reversed.
D. The City Council’s decision may include such terms and conditions as the City Council may determine to be in the interest of public health and safety, including revocation, suspension, or continuation of a Certificate of Approval (with or without modification to conditions of approval).
E. The City Council’s decision is final.
F. Notwithstanding any provision of this ordinance to the contrary, any decision or act which is subject to appeal under the sections pertaining to cannabis businesses and/or facilities shall be appealable to the City Council after all other intervening appeals have been exhausted.
3999.2 Right to Judicial Review.
A final decision of the City Council may be judicially reviewed pursuant to Code of Civil Procedure Section 1094.6.
3999.3 No New Certificate After Revocation.
Should a cannabis Certificate of Approval be revoked, the former holder of the Certificate is presumptively disqualified to apply for a new Certificate of Approval in accordance with this Chapter. This presumption may be overcome upon a showing of good cause as to why a Certificate of Approval should be issued following a revocation. Any such showing must be made to the Director’s satisfaction.
3999.4 Attorney’s Fees in Nuisance Abatement Action.
If the court issues an order or a judgment which finds a public nuisance to exist, and orders or approves the abatement of the public nuisance, the City is entitled to recover its actual costs of abatement, including, without limitation, reasonable attorneys’ fees incurred by the City in such judicial proceeding.
3999.5 Remedies Cumulative.
The remedies provided by this Chapter are cumulative and in addition to any other criminal or civil remedies including, without limitation, those set forth elsewhere in this code.
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ENVIRONMENTAL REVIEW
SECTION 5: Environmental Review. This Ordinance is exempt from additional review under the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., “CEQA”) and CEQA regulations (14 California Code of Regulations §§ 15000, et seq.) a. On the basis of evidence provided, and for the reasons set forth in Section 3, Paragraphs A and B, the Ordinance will not adversely affect adjoining property as to value or precedent, and will not be detrimental to the area.
b. The Ordinance does not authorize any new construction or use; rather, it merely prescribes a process that requires the vetting of environmental, land use and operational issues in connection with each application for a Certificate of Approval. As such, the Ordinance is not a “project” under CEQA because: (1) it establishes "general policy and procedure making" (CEQA Guidelines § 15378(b)(2); and (2) it constitutes "organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment” (CEQA Guidelines 15378(b)(5)).
c. The Implementing Resolution is self-mitigating insofar as it provides the means for avoiding environmental impacts, if any are identified, as part of each discretionary application for a Certificate of Approval. As stipulated in PHMC Section 10352C(7), each conditional use application is subject to separate environmental review under CEQA. Furthermore, as stipulated in PHMC Sections 10482, 10462, and 10542, conditional uses within the C-1, M-1 and R-4 zones may only be allowed so long as they will not be injurious or detrimental to the public health, safety or welfare or to property in the vicinity or zone in which the use or uses will be situated. d. Issuance of ministerial permits for personal, non-commercial cultivation is categorically exempt as a Class 1 or Class 5 project in so far, at best, the activities that are authorized would constitute a minor alteration of existing public structures involving no expansion of use, or a minor alteration in land use limitations (see 14 CCR §§15301, 15305).
GENERAL PROVISIONS
SECTION 6: Construction. This Ordinance must be broadly construed in order to achieve the purposes stated in this Ordinance. It is the City Council’s intent that the provisions of this Ordinance be interpreted or implemented by the City and others in a manner that facilitates the purposes set forth in this Ordinance.
SECTION 7: Enforceability. Repeal of any provision of the Port Hueneme Municipal Code does not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before this Ordinance’s effective date. Any such repealed part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Ordinance.
SECTION 8: Severability. If any part of this Ordinance or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Ordinance are severable.
SECTION 9: The City Clerk and Director of Community and Economic Development are directed as follows:
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a. The City Clerk shall certify the passage and adoption of this Ordinance, cause it to be entered into the City of Port Hueneme’s book of original ordinances, make a note of the passage and adoption in the records of this meeting, and, within fifteen days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law.
b. The Director of Community and Economic Development shall file a Notice of Exemption upon adoption of this Ordinance under the provisions of CEQA Guidelines Sections 15061 (d) and 15062, thereby commencing a 35-day challenge period should any interested party take exception to the City's determination set forth in Section 5 hereof.
SECTION 10: REPEAL OF CONFLICTING PROVISIONS. All of the provisions of the City Municipal Code as heretofore adopted by the Council that are in conflict with the provisions of this Ordinance are hereby repealed.
SECTION 11: This Ordinance will take effect on the 31st day following its final passage and adoption
PASSED and ADOPTED on this ___ day of 2024.
Misty Perez
Mayor
ATTEST:
________________________________
Georgianna Nicole Alvarez
City Clerk
APPROVED AS TO FORM:
________________________________
Joan Stevens Smyth
City Attorney
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CERTIFICATION
STATE OF CALIFORNIA )
) ss
COUNTY OF VENTURA )
I, Georgianna Nicole Alvarez, City Clerk of the City of Port Hueneme, California, do hereby certify that the foregoing Ordinance No. ____ was introduced at the regular meeting of _____, 2024, and duly adopted at the regular meeting of ________, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Georgianna Nicole Alvarez
City Clerk
Agenda Item No. 10 Page 33 of 33 CC Agenda 05-20-2024
DATE: May 20, 2024
TO: Honorable City Council
FROM: James Vega, City Manager
Tony Stewart, AICP, Community and Economic Development Director SUBJECT: INTRODUCTION OF ORDINANCES AMENDING SECTIONS 10802 AND 10803 OF CHAPTER 6 OF ARTICLE X OF THE PORT HUENEME
MUNICIPAL CODE, PERTAINING TO DEVELOPMENT STANDARDS
FOR ACCESSORY DWELLING UNITS AND DENSITY BONUS
REGULATIONS, RESPECTIVELY
RECOMMENDATION:
It is recommended the City Council:
1. Introduce for first reading, by title only, waiving further reading of an Ordinance entitled, “An Ordinance of the City Council of the City of Port Hueneme, California, Amending Section 10802 of Chapter 6 of Article X of The Port Hueneme Municipal Code, Pertaining to Development Standards for Accessory Dwelling Units”; and
2. Introduce for first reading, by title only, waiving further reading of an Ordinance entitled, “An Ordinance of the City Council of the City of Port Hueneme, California, Amending Section 10803 of Chapter 6 of Article X of the Port Hueneme Municipal Code, Pertaining to Density Bonus Requirements”; and
3. Make a determination the project is exempt under CEQA.
BACKGROUND/ANALYSIS:
Although the City’s Accessory Dwelling Unit (ADU) and Density Bonus Standards are both contained in Chapter 6 of the Port Hueneme Municipal Code, staff is presenting these within two separate ordinances, since the state’s regulations for affordable housing, and ADUs in particular, change frequently. Therefore, the process for future amendments to comply with state law, again, primarily to the ADU ordinance, would be simpler if each topic was within a standalone ordinance.
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Updates to ADU and Density Bonus Ordinances
May 20, 2024
ADU Ordinance
California Government Code Sections 65852.2, 65852.22 and 65852.26 establish certain standards for ADUs. The intent of the state law is to overcome barriers to affordable housing by providing housing choices to serve different populations.
Government Code Section 65852.150(a)(7) states: "Accessory dwelling units offer lower cost housing to meet the needs of existing and future residents within existing neighborhoods, while respecting architectural character". Cities cannot impose more stringent standards of approval than those outlined by state law. Local standards which are consistent with, and authorized by, state law may be enforced.
To ensure the City maintains as much local land use authority as possible, an updated ADU ordinance must be adopted. Otherwise, the City will be required to follow all statemandated regulations regarding the development of ADUs. In addition, the proposed revisions will enable the City to be in compliance with the most recently adopted state regulations pertaining to ADUs, will correct inconsistencies with state law in the current ADU ordinance, and will also maintain consistency with the programs set forth in the City’s newly adopted and certified General Plan Housing Element. Section 10802 of the Port Hueneme Municipal Code ("PHMC") currently contains development standards for ADUs.
Once an ADU ordinance is adopted by a local jurisdiction, the jurisdiction is then required to provide a copy to the state’s Department of Housing and Community Development “HCD” who is tasked with reviewing the ordinances with state law. The City of Port Hueneme submitted the 2023 ADU ordinance to HCD upon adoption by the City Council. However, HCD took issue with three items in the Ordinance. Therefore, after meeting with HCD several times, staff has updated the ADU Ordinance to address the issues raised by HCD. These are as follows:
1. Clarify the number of ADUs allowed on a single-family lot. The City’s current ADU ordinance allows one attached ADU and one Junior ADU (JADU) on a single-family lot OR one detached ADU and one JADU on a single-family lot, per California Government Code Sections 65852.2(e)(1)(A) and (B), respectively.
However, HCD interprets this Government Code Section to allow one attached ADU, one detached ADU AND one JADU.
Staff disagrees since the Government Code does not state “AND” between the subsections (A) and (B). Therefore, the applicant has a choice of either following subsection (A) or subsection (B). Further demonstrating HCD’s erroneous interpretation is that there are two additional subsections - (C) and (D), which pertain to multi-family developments, and are thus, not applicable whatsoever to single-family parcels. Staff sent HCD a letter on June 13, 2023 stating as such.
In the City’s letter, staff responded to HCD as follows:
“The Department of Housing and Community Development’s (HCD) interpretation of Government Code section 65852.2, subdivision (e)(1) is flawed Agenda Item No. 11 Page 2 of 44 CC Agenda 5-20-2024
Updates to ADU and Density Bonus Ordinances
May 20, 2024
and not supported by the plan language of the statue. The relevant section provides:
Notwithstanding subdivisions (a) to (d), inclusive, a local agency shall ministerially approve an application for a building permit within a residential or mixed-use zone to create any of the following: (A) one accessory dwelling unit and one junior accessory dwelling unit per lot with a proposed or existing singlefamily dwelling if [a number of provisions apply]; (B) one detached, new construction accessory dwelling unit that does not exceed four-foot side and rear setbacks for a lot with a proposed or existing single-family dwelling. The accessory dwelling unit may be combined with a junior accessory dwelling unit described in subparagraph (A)….(C)(i) Multiple accessory dwelling units within the portions of existing multifamily dwelling structures that are not used as livable space…(D)(1) Not more than two accessory dwelling units that are located on a lot that has an existing or proposed multifamily dwelling…(Emphasis added).
HCD contends that “[t]he use of the term any followed by an enumeration of byright ADU types permitted indicate that any of these ADU types can be combined on a lot zoned for single-family dwellings.” (Emphasis in original.) HCD posits the statute requires one converted ADU, one detached, new construction ADU, and one JADU. This interpretation, however, completely ignores the fact that subdivisions (C) and (D) are not applicable to single-family lots. The plain language of this statute indicates that certain of the enumerated subdivisions may only be utilized for proposed or existing multifamily dwellings.
Furthermore, HCD’s interpretation renders the penultimate sentence of subdivision (B) superfluous, which is disfavored in statutory interpretation. This sentence, emphasized above, makes clear that one detached, new construction ADU may be combined with a JADU, as described in subparagraph (A). It is important to note that subdivision (A) allows for one ADU and one JADU. When subdivision (B) states that a new construction, detached ADU may be combined with the JADU, the legislature specifically excluded the additional unit contemplated by subdivision (A).
HCD’s interpretation of the provisions of this statute is unreasonable given the plain language and unsupported by any statutory analysis.” On January 24, 2024, HCD sent a response letter to the City’s June 13, 2023 letter (Attachment A, pages 3-4 – note: Staff’s June 13, 2023 letter was incorporated by HCD into their January 24, 2024 letter), stating the same interpretation of the Government Code as before, with which the City took issue.
Upon further discussion with HCD staff, and given that HCD’s response to staff’s letter continues to indicate their unreasonable and erroneous interpretation, staff recommends the ADU Ordinance be revised to simply quote the requirements of California Government Code Section 65852.2(E)(1)(A) – (D). This action will meet the intent of HCD’s response by directly quoting state statute, but will also Agenda Item No. 11 Page 3 of 44 CC Agenda 5-20-2024
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enable City staff to continue to interpret this statute as staff has been doing all along.
The revised language is contained within Section D(6)(a) – (d) (pages 5 and 6 of the attached redlined ADU Ordinance). With the addition of subsections D(6)(c) and (d), the former section “E” (“Development Standards – Multi-Family”) on page 9 of the attached redlined ADU Ordinance is no longer relevant and is recommended to be deleted.
2. Setbacks. Section 10802(D)(5)(a)(3) of the existing ADU Ordinance quotes California Government Code Section 65852.2(e)(1)(A)(iii), which allows for one ADU and one JADU per single-family lot provided that “The side and rear setbacks are sufficient for fire and safety”. However, HCD staff took issue with their own state statutes and determined the City’s Ordinance was too subjective in this instance (refer to Attachment A, pages 4-5). Therefore, while the City’s Ordinance already complies with state law, staff is recommending that Section D(6)(a)(3) be amended to read: “The side and rear setbacks are sufficient for fire and safety as required by the Uniform Building and Uniform Fire Codes as adopted by the City.” This provides objective standards to this requirement. (Refer to page 5 of the attached redlined ADU Ordinance.)
3. As the City Council is aware, state law notes that ADUs are an affordable type of residential unit to develop and therefore, the City requires a covenant be recorded with each ADU that guarantees the units remain affordable to lowincome households (there are exceptions if the ADU is to be used by family members or caregivers). These covenants are important for a beach community such as Port Hueneme, otherwise, there is no guarantee that ADUs would be affordable to the households the state anticipates them being constructed for, or that the ADUs would not simply be rented out during summer months and not used for the remainder of the year, thus not meeting the intent of state law at all.
HCD continues to take issue with the requirement for the covenant although they have not provided any state statute the City is violating by requiring the covenant.
In their January 24, 2024 letter, HCD staff erroneously stated the City’s ADU Ordinance was out of compliance with state law because the requirement of the covenant could be a reason to delay the issuance of a building permit for an ADU (refer to the last paragraph on page 7 of Attachment A).
However, as noted above, HCD staff is erroneously accusing the City of violating state law in that Section G(2) of the City’s ADU Ordinance states the covenant shall be recorded prior to occupancy of the ADU and not prior to issuance of building permits. Therefore, no further revisions to the City’s ADU Ordinance are necessary in this regard. However, staff will ensure all applicants are clearly made aware of the timing requirements for the recordation of the affordability covenants and not delay issuance of building permits.
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With the addition of Section D(6)(a) – (d) discussed above, the portions of the remainder of the existing Ordinance were revised for clean-up purposes and several new definitions were added to Section B (pages 3-4 of the attached redlined Ordinance). However, no other substantive changes were made to the Ordinance.
Density Bonus Ordinance
California Government Code Sections 65915 through 65918 provide regulations with regard to density bonus. The purpose of density bonus law is to allow an applicant to potentially develop their property at density that is above the maximum otherwise allowed in that zone, along with being able to deviate from other development standards, such as parking, setbacks, building heights etc., which are referred to as “incentives” or “concessions”.
In exchange for being granted the additional density and/or incentives and concessions, the applicant must provide a certain percentage of the units as affordable to a variety of types of households and/or income levels. The amount of the density bonus and number of incentives or concessions the City must allow an applicant depends on the type and number of affordable units being provided. The applicant is also required to quantifiably demonstrate to the City how the requested density bonus and/or incentives and concessions are needed to reduce development costs to provide for affordable housing units.
The City adopted its current Density Bonus Ordinance in 1999, and revised it in 2012.
Since that time, the state has made several revisions to Density Bonus law, primarily due to the continued housing affordability crisis. However, similar to ADU and other recent housing legislation, the current state Density Bonus statutes strip away a significant amount of local land use authority, including within charter cities. Local jurisdictions must comply with these state statutes. There are no provisions to make minor adjustments as there are with some other housing statutes, such as ADU laws (as discussed above).
Therefore, to ensure compliance with state law, staff recommends the City’s Density Bonus Ordinance be amended in its entirety accordingly. The following is a list of the most substantive revisions proposed to be made to the Density Bonus Ordinance:
1. The percentage of density bonuses required to be granted and the percentage of affordable units an applicant is required to provide in order to be granted the requested density bonus. Overall, while state law now allows an applicant to request a greater density bonus than previously allowed, state law also requires a greater number of affordable units to be provided by the applicant in order to obtain a greater density bonus. Refer to the tables on pages 5 and 6 of the attached redlined Density Bonus Ordinance.
2. Government Code Section 65915.7 establishes standards that grant developers of commercial projects certain commercial density bonuses (i.e. 20% reduction in minimum parking, 20% additional height allowance, 20% additional floor area Agenda Item No. 11 Page 5 of 44 CC Agenda 5-20-2024
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allowance, etc.) if the commercial developer partners with a residential developer to provide affordable housing units on the commercial site (i.e. with a mixed-use project) or on a nearby site in the City. Since these statutes came into being after the City’s last Density Bonus Ordinance Update, it is recommended the City’s Ordinance be updated to address these laws (refer to Section E(4), pages 8-9, of the attached redlined Density Bonus Ordinance).
3. Section F(3) (page 9 of the attached redlined Density Bonus Ordinance) increases the term of affordability within density bonus projects form 30 years to 55 years, per Government Code Section 65915(c)(1)(A). This is the same time period as required for Affordable Housing Agreements.
4. The table on page 10 of the attached redlined Density Bonus Ordinance includes the addition of up to five incentives or concessions (up from the previous maximum of three) if additional affordable units are provided in a project. As indicated in the footnote to this table, state law also allows a project located within a half-mile of a major transit stop a height increase of up to three stories over the zone’s base maximum height limit. However, the City of Port Hueneme currently contains no major transit stops and therefore, this potential height increase is not applicable to the City at this time.
5. A section regarding waivers is proposed, to ensure compliance with Government Code Section 65915(e). Essentially, if any development standard would otherwise prevent the proposed project from being built at the permitted density and/or with the permitted incentives or concessions, the applicant may request one or more waivers from the City’s standards to be allowed to construct the project with the permitted density and/or incentives and concessions. Refer to Section H (page 12) of the attached redlined Density Bonus Ordinance.
6. For transparency, staff recommends Section I be added, which provides the requirements for submitting an application for a Density Bonus request. Refer to pages 12-13 of the attached redlined Density Bonus Ordinance.
7. For further transparency, staff recommends adding subsections 3 and 4 to Section J (formerly Section H), which add clarifying language regarding staff review of Density Bonus requests (refer to page 13 of the attached redlined Density Bonus Ordinance).
8. Finally, staff recommends adding Section K to the end of the revised Density Bonus Ordinance (refer to page 14), which ensures state law will be complied with at all times.
California Environmental Quality Act (CEQA)
Pursuant to the California Environmental Quality Act ("CEQA"), this action to amend City Municipal Code section 10802 regarding Accessory Dwelling Units is exempt from CEQA. Title 14 California Code of Regulations section 15282(h) statutorily exempts an Agenda Item No. 11 Page 6 of 44 CC Agenda 5-20-2024
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ordinance by the City to implement the provisions of Government Code section 65852.2. In addition, these Ordinances are exempt pursuant to Title 14 California Code of Regulations section 15061(b)(3), which exempts projects where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
FISCAL IMPACT:
The revised ADU and Density Bonus standards will not have a direct fiscal impact on the budget. However, improvements to properties with new ADUs and increased densities may increase the property values and hence, property tax revenues for the City. In addition, staff's time spent researching the new state laws regarding Density Bonus, and preparing and presenting this staff report and ordinance to the City Council will be reimbursed by monies received by the City from the state SB2 Planning Grant.
ATTACHMENTS:
A. Letter from HCD, dated January 24, 2024
B. Redlined ADU Ordinance
C. Redlined Density Bonus Ordinance
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This Page Intentionally Left Blank
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STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY GAVIN NEWSOM, Governor
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
DIVISION OF HOUSING POLICY DEVELOPMENT
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
(916) 263-2911 / FAX (916) 263-7453
www.hcd.ca.gov
January 24, 2024
Tony Stewart, Director of Community Development
City of Port Hueneme
Community Development Department
250 N. Ventura Road
Port Hueneme, CA 93041
Dear Tony Stewart:
RE: Letter of Technical Assistance: City of Port Hueneme ADU Ordinance On March 13, 2023, the California Department of Housing and Community Development (HCD) provided written findings of non-compliance to the City of Port Hueneme (City) accessory dwelling unit (ADU) Ordinance Number 791 (Ordinance). On June 13, 2023, the City submitted its written response to HCD’s findings. HCD appreciates the City’s time and effort in crafting its response.
However, the City’s response fails to address substantial inconsistencies between the City’s zoning code and State ADU Law.
HCD requests that the City respond to this letter no later than February 24, 2024, with a detailed plan of action and timeline to bring the Ordinance into compliance pursuant to Government Code section 65852.2, subdivision (h)(2)(B). Specifically, the City must either amend the Ordinance according to HCD’s findings or readopt the Ordinance and make express findings via resolution addressing HCD's findings and explaining the reasons the City believes it has complied with State ADU Law despite HCD’s findings. (Gov. Code, § 65852.2, subd. (h)(2)(B)).
Pursuant to Government Code section 65852.2, subdivision (h)(3)(A), HCD may notify the Attorney General when a local ordinance is in violation of State ADU Law.
Background and Summary of Issues
In its March 13, 2023, findings, HCD detailed the areas of the Ordinance which violate Government Code section 65852.2. Government Code section 65852.2, subdivision (h)(2)(A), requires that HCD provide jurisdictions “a reasonable time, no longer than 30 days, to respond….” HCD staff reached out on April 24, 2023 to inquire as to the City’s response, and was told the City Attorney was drafting it. On May 26, 2023, HCD staff reached out again offering to meet with Port Hueneme staff to discuss the letter. No Attachment A
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Tony Stewart, Director of Community Development
official response was provided until June 13, 2023. In its June 13, 2023, letter, the City responded point by point to the findings as they were presented in the HCD letter. This letter will provide responses to the City’s specific findings that HCD still considers outstanding and inconsistent with State ADU Law. Note that HCD is only responding the findings that are inconsistent with State ADU Law and will omit from this letter mention of findings that have been properly addressed.
For reference and convenience, HCD’s original finding is included in italicized font, followed by the City’s response in italicized font, followed by HCD’s current response in regular font.
1) HCD’s Original Finding
“10802 (D) and (D)(5) – ADU Limitation – The Ordinance states that "Only one (1) accessory dwelling unit shall be allowed on a single lot of record…." And that "A lot may contain up to one ADU and one JADU..." However, Government Code section 65852.2, subdivision (e)(1), states that "Notwithstanding subdivisions (a) to (d), inclusive, a local agency shall ministerially approve an application for a building permit within a residential or mixed-use zone to create any of the following: (A) One accessory dwelling unit and one junior accessory dwelling unit per lot with a proposed or existing single-family dwelling…(i) The accessory dwelling unit or junior accessory dwelling unit is within the proposed space of a single-family dwelling or existing space of a single-family dwelling or accessory structure." Additionally, subparagraph (B) permits "One detached, new construction, accessory dwelling unit that does not exceed four-foot side and rear yard setbacks." The use of the term any followed by an enumeration of by-right ADU types permitted indicate that any of these ADU types can be combined on a lot zoned for single-family dwellings. This permits the creation of one converted ADU, one detached, new construction ADU, and one junior accessory dwelling unit (JADU). The City must amend it to reflect statute.”
Port Hueneme’s Response
“The Department of Housing and Community Development’s (HCD) interpretation of Government Code section 65852.2, subdivision (e)(1) is flawed and not supported by the plain language of the statute. The relevant section provides:
Notwithstanding subdivisions (a) to (d), inclusive, a local agency shall ministerially approve an application for a building permit within a residential or mixed-use zone to create any of the following: (A) One accessory dwelling unit and one junior accessory dwelling unit per lot with a proposed or existing singlefamily dwelling if [a number of provisions apply]; (B) one detached, new construction, accessory. dwelling unit that does not exceed four-foot side and rear setbacks for a lot with a proposed or existing single-family dwelling. The accessory dwelling unit may be combined with a junior accessory dwelling unit described in subparagraph (A). . . . (C)(i) Multiple accessory dwelling units within the portions of existing multifamily dwelling structures that are not used as livable Agenda Item No. 11 Page 10 of 44 CC Agenda 5-20-2024
Tony Stewart, Director of Community Development
space . . . (D)(1) Not more than two accessory dwelling units that are located on a lot that has an existing or proposed multifamily dwelling . . . (Emphasis added).” HCD contends that “[t]he use of the term any followed by an enumeration of by-right ADU types permitted indicate that any of these ADU types can be combined on a lot zoned for single family dwellings.” (Emphasis in original). HCD posits the statute requires one converted ADU, one detached, new construction ADU, and one JADU.
This interpretation however, completely ignores the fact that subdivisions (C) and (D) are not applicable to single-family lots. The plain language of this statute indicates that certain of the enumerated subdivisions may only be utilized for proposed or existing multifamily dwellings.
Furthermore, HCD’s interpretation renders the penultimate sentence of subdivision (B) superfluous, which is disfavored in statutory interpretation. This sentence, emphasized above, makes clear that one detached, new construction ADU may be combined with a JADU, as described in subparagraph (A). It is important to note that subdivision (A) allows for one ADU and one JADU. When subdivision (B) states that a new construction, detached ADU may be combined with the JADU, the legislature specifically excluded the additional ADU contemplated by subdivision (A).
HCD’s interpretation of the provisions of this statute is unreasonable given the plain language and unsupported by any statutory analysis.”
HCD’s Follow-up Response
Subdivision (e) allows for the combination of units as dictated by the type of primary dwelling unit. HCD’s initial response highlighted only those relevant to single-family homes, which would be the allowed combination of a converted unit and JADU per subdivision (e)(1)(A), and a detached new-construction unit up to 800 square feet per subdivision (e)(1)(B). To clarify, the application of subdivision (e) would require the combination of converted units per subdivision (e)(1)(C), and two detached units pursuant to (e)(1)(D). Port Hueneme must approve the combination, with respect to the type of the primary dwelling, whether single-family or multifamily. There is no ambiguity because subdivisions (e)(1)(A) and (e)(1)(B) explicitly refer to ADU types to be created with a single-family dwelling and subdivisions (e)(1)(C) and (e)(1)(D) refer to ADU types to be created with a multifamily dwelling.
The use of the term “any” followed by an enumeration of by-right ADU types permitted indicate that any of these ADU types can be combined on a lot zoned for single family dwellings. This was changed in 2019 with the passing of clean-up legislation (AB 3182). The Legislature changed “or” to “and” in subparagraph (A) of subdivision (e)(1), but they left the “or” in (A)(i). This change validates HCD’s understanding that two units are allowed under subparagraph (A), with the criteria for creating these two units specified in the subsequent clauses.
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Tony Stewart, Director of Community Development
This permits a homeowner to create one converted ADU and one JADU. Thus, if the local agency approves an ADU that is created from existing (or proposed) space, and the owner subsequently applies for a detached ADU (or vice versa) that meets the size and setbacks pursuant to the subdivision, the local agency cannot deny the application, nor deny a permit for a JADU under this section. HCD notes that the Legislature, in creating the list, did not use “or” nor “one of” to indicate only one or another would be applicable to the exclusion of the other. Limiting single-family lots to one ADU would prevent property owners from creating ADUs by right under subdivision (e)(1). The additional positive mention of combining a converted (e)(1)(B) ADU and an (e)(1)(A) JADU does not invalidate the prescribed combinations stated at the opening of subdivision (e), as the change from “or” to “and” earlier in the subdivision indicates the legislature’s intention to promote this combination.
The City states that the second sentence of subdivision (e)(1)(B) is rendered superfluous under HCD’s expressed interpretation, and that such superfluousness invalidates the interpretation. However, it is not superfluous. Statute’s pluralistic allowance of ADU and JADU combinations is reinforced with the second sentence of subdivision (e)(1)(B), just as statute prohibits the use of minimum lot sizes in multiple places throughout statute – subdivisions (a)(1), (c)(2)(C), and (e)(6). HCD’s interpretation would allow for a combination of a converted ADU under (e)(1)(A) with the detached ADU in (e)(1)(B). The second sentence of subdivision (e)(1)(B) reinforces the combination of a detached ADU and a JADU; A JADU does not have to be combined with a converted ADU only. HCD’s statutory analysis is sound, has been legally vetted, and has precedent in other recent ordinance review letters such as our December 9, 2022, letter to Sunnyvale1 or our August 30, 2023, letter to Tiburon.
2 Port Hueneme must approve such combinations.
2) HCD’s Original Finding
“10802 (D)(5)(a)(3) – Setbacks – “The Ordinance states that “A lot may contain up to one ADU and one JADU is all of the following apply: …the side and rear setbacks are sufficient for fire and safety.” However, Government Code section 65852.2, subdivision (a)(1)(B)(i), allows the City to impose objective standards on dwelling units, and pursuant to subdivision (j)(7), “objective standards” means “standards that involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official prior to submittal.” Additionally, Government Code section 65852.2, subdivision (a)(1)(D)(vii), states that a setback of no more than four feet from side and rear lot lines shall be required for an ADU. Therefore, the City must amend the Ordinance to 1 Review of Sunnyvale’s Accessory Dwelling Unit (ADU) Ordinance under State ADU Law (Gov.
Code, § 65852.2)
2 Review of Tiburon’s Accessory Dwelling Unit (ADU) Ordinance under State ADU Law (Gov. Code, § 65852.2)
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Tony Stewart, Director of Community Development
comply with State ADU Law and should clearly indicate what “sufficient for fire and safety” means so that subjective standards are not being applied.” Port Hueneme’s Response
“HCD takes issue with language that is included in the statute notwithstanding the fact that the City is under no mandatory duty to adopt an ordinance. Government Code section 65852.2, subdivision (e)(1)(A)(iii) states, “[t]he side and rear setbacks are sufficient for fire and safety” in one of the criteria for by-right approval of one ADU and one JADU pursuant to subdivision (A) above. It is important to note that while HCD argues that this imposes subjective criteria into the ADU approval process, this language was specifically selected by the State legislature. The City was under no affirmative duty to enact an ordinance but was authorized to do so by SB 897. If the City had not enacted its ADU ordinance the offending language would still be required pursuant to the default State provisions. Accordingly, the State set the criteria for when an ADU and JADU may be permitted on a lot with a proposed or existing single-family dwelling and determined that “side and rear setbacks are sufficient for fire and safety” was sufficiently objective criteria for ministerial approval for such housing. HCD cannot now take issue with the specific, objective language chosen by the State legislature in enacting SB 897.”
HCD’s Follow-up Response
While the City is under no obligation to adopt an ordinance, Government Code section 65852.2, subdivision (a)(1), the authorizing statute, prescribes that an adopted “ordinance shall do all of the following:” and the subdivision lists the provisions that the ordinance must adhere to.
HCD’s finding addresses units that are subject to Government Code section 65852.2, subdivision (a), not those under subdivision (e). The City responded with a citation to subdivision (e)(1)(A)(iii). Please note that this citation would only apply to a unit created subject to subdivision (e) and not to subdivision (a). Subdivision (a) units are subject to local development standards, which are specified in subdivisions (a) through (d). Subdivision (e) begins with the phrase, “Notwithstanding sections (a) through (d), inclusive, a local agency shall ministerially approve an application for a building permit within a residential or mixed-use zone to create any of the following….” Units created pursuant to subdivision (e) are subject only to the standards in that section. Subdivision (a)(1)(D)(vii) is explicit in requiring no more than 4-foot side and rear setbacks.
3) HCD’s Original Finding
10802 (G)(2) – Deed Restriction – The Ordinance requires a deed restriction with an automatically renewing 55-year term to restrict ADU rents to low- or very low-income levels. However, Government Code section 65852.2, subdivision (a)(8), states "[t]his subdivision establishes the maximum standards that local agencies shall use to evaluate a proposed accessory dwelling unit on a lot that includes a proposed or existing single-family dwelling. No additional standards, other than those provided in this subdivision, shall be used or imposed except that, subject to subparagraph (B), Agenda Item No. 11 Page 13 of 44 CC Agenda 5-20-2024
Tony Stewart, Director of Community Development
a local agency may require an applicant for a permit issued pursuant to this subdivision to be an owner-occupant or that the property be used for rentals of terms longer than 30 days." Therefore, any manner of affordability covenant exceeds statute.
Furthermore, this restriction appears to have the practical effect of requiring rental and disallowing occupation by a relative or any other tenant without payment. This may constrain housing choice and result in discriminatory effects on families with children, people with disabilities, and other protected groups in violation of state and federal fair housing laws, including but not limited to Government Code section 65008, subdivisions (a)(1)(A) and (b)(1)(B)(i).
Requiring such a deed restriction as a condition of approval constitutes a local regulation on a proposed ADU that violates statute; Government Code section 65852.2, subdivision (a)(7) states "[n]o other local ordinance, policy, or regulation shall be the basis for the delay or denial of a building permit or a use permit under this subdivision." In summary, the City must remove this section.
Port Hueneme’s Response
“Once again, HCD takes issue with the affordability covenant. On August 18, 2022, myself, Tony Stewart, Shawn Danino, Mike Van Gorder, Jay Cross, and Cerlinda (surname unknown) met via zoom to discuss the ADU ordinance and the affordability covenant. During that meeting, I presented the City’s position that the affordability covenant is not a design standard and is not affected by Government Code sections 65852.2 or 65852.22, which is plainly stated as the import of Section 65852.2, subdivision (a)(8). I was informed that HCD would look into the issues I raised and provide analysis on its authority to regulate this matter in the absence of apparent authority to do so. In fact, Mr. Cross represented the City could expect HCD’s response within two to three weeks. To date, no analysis responding to my concerns has been provided.
The presence of an affordability covenant does not add any design standard.
Furthermore, there is no reasonable argument that executing a form affordability covenant is the basis for delay or denial in contravention of subdivision (a)(7). This form is executed at the time of submission of a ministerial application and has no ability to delay the issuance of a building permit. In addition, this covenant does not impose any subjective criteria; it is submitted, or it is not. The stated purpose of Government Code sections 65852.150 et seq. to provide ADUs as a valuable form of housing to “family members, students, the elderly, in-home health care providers, the disabled, and others, at below market prices within existing neighborhoods.” Moreover, the State indicates that available housing is falling short of meeting existing and future housing demands.
During our August 18, 2022, meeting, I explained that the City of Port Hueneme is a built-out beach community. There is a very real threat that these ADUs are not going to contribute to the State’s housing needs as contemplated by the ADU statutes.
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Tony Stewart, Director of Community Development
Without an affordability covenant, these properties will be rented out for summer getaways at significantly above market prices doing nothing to alleviate the State’s housing concerns. It is for this reason that HCD was contacted in the first instance regarding this covenant.
Given that this covenant imposes no design criteria, I inquired as to HCD’s authority to regulate in this area pursuant to Sections 65852.2 and 65852.22. I explained that this issue is one of municipal concern and the City’s Charter would provide authority for this imposition. I specifically requested that HCD identify a single statute that the City is violating. Instead, HCD reiterates that the affordability covenant is a design standard and delays the process, which is objectively incorrect.
In the March 13, 2023, letter, the statement is made that the affordability covenant may discriminate against certain groups in violation of state and federal housing laws with a reference to Government Code section 65008. It is unclear how HCD alleges this Section is implicated, as there is no reference to lawful occupation, age, familial status, or any characteristic that would appear to offend these protected classes. The City requests an explanation of this reference. In the event such discrimination is implicated the City is committed to remedying the situation.” HCD’s Follow-Up Response
HCD did not find that the requirement of an affordability covenant a “design standard”. The initial letter referred to Government Code section 65852.2, subdivision (a)(8) to note that “no additional standards” may apply other than those that appear within the section. This was to illustrate that deed restrictions and affordability covenants are not found in State ADU Law, and their inclusion would violate subdivision (a)(8). The City took the use of this reference as grounds for its claim that HCD considers an affordability covenant a design standard, and, to paraphrase, “therefore as it is not a design standard, HCD has no enforcement authority.” This statement is baseless, as only part of state ADU statute is relevant to design standards, and HCD enforces the whole of ADU statute.
The City states “there is no reasonable argument that executing a form affordability covenant is the basis for delay or denial in contravention of subdivision (a)(7). This form is executed at the time of submission of a ministerial application and has no ability to delay the issuance of a building permit.” This form, while required by the Ordinance, does not appear in the Ordinance itself and is therefore explicitly subject to Government Code section 65852.2, subdivision (a)(7), which states, “No other local ordinance, policy, or regulation shall be the basis for the delay or denial of a building permit or a use permit under this subdivision.” The Ordinance states, “the property owner shall file with the County Recorder upon approval by the City Attorney as to form and content, a deed restriction covenant…” and “the property owner shall file with the County Recorder upon approval by the City Attorney as to form and content an affordable housing agreement.” The timing of the execution of the forms in question is immaterial, as their requirement as part of the application process is the core issue.
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Tony Stewart, Director of Community Development
ADU applications without a deed restriction or compliant affordability covenant may be considered “incomplete”. Therefore, the absence of such a deed restriction and/or covenant would be the grounds for the City’s refusal to process the application or delaying the application until it expires, or otherwise delaying or denying a building permit. HCD has received complaints from homeowners in the City that refused to sign the affordability covenant and whose ADU applications were considered incomplete, not accepted, or otherwise not allowed to proceed. By deeming an application incomplete or otherwise not processing the application, the City effectively denies the ADU application.
The City states that HCD has not provided an analysis of its position. The analysis was incorporated in the March 13, 2023, findings letter. The City made no substantial response to HCD’s concern that an affordability requirement as written would require rentability and prohibit occupation without payment of rent, but instead asked for substantiation as to how that presents a fair housing challenge. To this question: requiring that ADUs be available only for rent to lower-income households or seniors would disallow occupation without payment of rent, which would prevent use by family members (for example, the adult child of the homeowner and that adult child’s family) or disabled relatives. Therefore, both familial status and disability could constitute grounds for a fair housing conflict. Alternatively, permanently suppressing potential income from the ADU actively discourages development of a unit that could be used as a low-income unit at some point or points in its life cycle.
A homeowner is less likely to create a low-income unit if they are obligated to permanently restrict its potential income, leading to a potential “no-win” situation for affordability.
In response to the City’s concern that ADUs would be rented out as “summer getaways” rather than as permanent residences, Government Code section 65852.2, subdivision (a)(8)(C) states “A local agency shall require that a rental of the accessory dwelling unit created pursuant to this subdivision be for a term longer than 30 days.”
Review of the City’s most recent adopted housing element reveals an inconsistency.
On page 1-32, under Quantified Objectives, the City projects the development of eight ADUs (roughly 6.5 percent of its total Regional Housing Needs Assessment (RHNA) obligation) over the planning period. These ADUs are projected as being specifically and exclusively for the moderate-income category. Requiring that all ADUs be income-restricted to low- or very low-income residents in perpetuity, would prohibit the development of the eight moderate-income ADUs that the City has claimed in its RHNA obligations.
Agenda Item No. 11 Page 16 of 44 CC Agenda 5-20-2024
Tony Stewart, Director of Community Development
Conclusion
Given the deficiencies described above and in HCD’s March 13, 2023 letter, the City’s Ordinance is inconsistent with State ADU Law. Government Code section 65852.2, subdivision (a)(4), states that if “a local agency has an existing accessory dwelling unit ordinance that fails to meet the requirements of this subdivision.... that agency shall thereafter apply the standards established in this subdivision for the approval of accessory dwelling units, unless and until the agency adopts an ordinance that complies with this section.” HCD has the authority to make findings as to whether an ADU ordinance complies with the requirements of this subdivision. (Gov. Code, § 65852.2, subd. (h)(1).) Government Code section 65852.2, subdivision (h)(3)(A), authorizes HCD to notify the California Office of the Attorney General that the City is in violation of this state law.
HCD appreciates the City’s efforts in the preparation and adoption of the Ordinance and welcomes the opportunity to assist the City in fully complying with State ADU Law.
Please feel free to contact Mike Van Gorder, of our staff, at (916) 776-7541 or at [email protected].
Sincerely,
Jamie Candelaria
Senior Housing Accountability Unit Manager
Housing Policy Development Division
Agenda Item No. 11 Page 17 of 44 CC Agenda 5-20-2024
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Agenda Item No. 11 Page 18 of 44 CC Agenda 5-20-2024
ORDINANCE NO. _____
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PORT HUENEME, CALIFORNIA, AMENDING SECTION 10802 OF CHAPTER 6 OF ARTICLE X
OF THE PORT HUENEME MUNICIPAL CODE, PERTAINING TO
DEVELOPMENT STANDARDS FOR ACCESSORY DWELLING UNITS
THE CITY COUNCIL DOES ORDAIN AS FOLLOWS:
A. The purpose of this ordinance is to amend Section 10802 of Chapter 6 of Article X of the Port Hueneme Municipal Code (PHMC) to revise the City's existing regulations for Accessory Dwelling Units to make conforming changes to comply with California Government Code Sections 65852.2, 65852.22 and 65852.26, which provide maximum standards for the development of accessory dwelling units and junior accessory dwelling units, and which permit local regulations that are consistent with Section 65852.2.
B. After reviewing the evidence presented, the City Council finds that the proposed ordinance is consistent with the City's General Plan. The proposed ordinance will not only comply with state law, but would assist with providing affordable housing and alternative housing and reasonable infill development opportunities.
SECTION 1: The City Council finds and determines as follows:
A. On May 20, 2024, the City Council conducted a duly noticed public hearing to consider the proposed amendments to PHMC Section 10802.
SECTION 2: The amendments to Section 10802 are made to Chapter 6 of Article X of the Port Hueneme Municipal Code, as set forth in attached Exhibit A.
SECTION 3: This Ordinance will take effect on the 31st day following its final adoption and passage.
SECTION 4: Pursuant to the California Environmental Quality Act ("CEQA"), this action to amend City Municipal Code Section 10802 regarding Accessory Dwelling Units is exempt from CEQA. Public Resources Code Section 21080.7 and Title 14 California Code of Regulations Section 15282(h) statutorily exempt an ordinance by the City to implement the provisions of Government Code Section 65852.2. In addition, this Ordinance is exempt pursuant to Title 14 California Code of Regulations section 15061(b)(3), which exempts projects where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
SECTION 5: Repeal of any provision of the Port Hueneme Municipal Code does not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before this Ordinance's effective date. Any such repealed part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Ordinance.
SECTION 6: If any section, subsection, sentence, clause, phrase, or portion of this Chapter is held to be invalid or unconstitutional by any court of competent jurisdiction for any reason, such decision shall not affect the validity of the remaining portions of this Chapter. The City Council declares that it would have adopted each section, subsection, sentence, clause, phrase, or portion of this Chapter irrespective of whether one or more sections, subsections, sentences, clauses, phrases, or portions of this Chapter be declared invalid or unconstitutional.
Attachment B
Agenda Item No. 11 Page 19 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 2 of 12
SECTION 7: All of the provisions of the City of Port Hueneme Municipal Code as heretofore adopted by the City Council that are in conflict with the provisions of this Ordinance are hereby repealed.
SECTION 8: The City Clerk of the City of Port Hueneme is hereby directed to certify the passage and adoption of this Ordinance and to cause it to be published as required by law.
PASSED and ADOPTED on this ___ day of 2024.
Misty Perez
Mayor
ATTEST:
________________________________
Georgianna Nicole Alvarez
City Clerk
APPROVED AS TO FORM:
________________________________
Joan Stevens Smyth
City Attorney
Agenda Item No. 11 Page 20 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 3 of 12
EXHIBIT A
Chapter 6 - Affordable Housing
10802 Accessory Dwelling Units
A. Purpose…………………………………………………………………….…………….
B. Definitions……………………………………………………….……………………….
C. Location…………………………………………..………………………………………
D. Development Standards – General………………………………………………….
E. Development Standards – Junior Accessory Dwelling Units…………………..
F. Deed Restriction Covenant and Affordable Housing Agreement……………… G. Review Process………………………..………………………………………………..
H. Revocation………….……………………………………………………………………
A. Purpose. The California State Legislature has identified in Government Code Section 65852.2 that the need exists for new housing to shelter California's population. The legislature has further declared that the state should increase housing resources and reduce the barriers to the provisions for affordable housing opportunities. Creating the opportunity to provide accessory dwelling units on existing residential property is beneficial and would provide an additional resource for affordable housing within the community.
B. Definitions. The following definitions apply specifically to this Section:
1. Accessory Dwelling Unit, or ADU. An Accessory Dwelling Unit or ADU (also known as "secondary dwelling unit" or "granny flat") will have the meaning set forth in Government Code Section 65852.2, which is an attached or detached residential dwelling unit that is accessory and incidental to a dwelling on the same lot, and which provides complete independent living facilities for one or more persons, and includes permanent provisions for living, sleeping, eating, cooking, and sanitation on the same parcel as the primary single-family dwelling is situated. In addition, the accessory dwelling unit is a housing alternative designed to offer an affordable living opportunity. The term "ADU" also includes an "Efficiency" Unit" as defined in Health and Safety Code Section 17958.1 and a "Manufactured Home" as defined in Health and Safety Code Section 18007.
2. Attached ADU. An attached ADU means an ADU that is attached to the existing single-family dwelling unit.
3. Detached ADU. A detached ADU means an ADU that is detached from the existing single-family dwelling unit.
4. Integrated ADU. An integrated ADU means an ADU that is located entirely within the living area of an existing dwelling.
5. Junior Accessory Dwelling Unit, or JADU. A junior accessory dwelling unit means a unit that is no more than 500 square feet in size and contained entirely within an existing primary residence. A junior accessory dwelling unit may include separate sanitation facilities, or may share sanitation facilities with the existing structure.
Agenda Item No. 11 Page 21 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 4 of 12
6. Living Area. Living area means the interior habitable area of a dwelling unit, including basements and attics, but does not include a garage or any accessory structure.
7. Objective Standards. Objective standards mean standards that involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official prior to submittal.
78. Primary Housing Unit. A primary housing unit (or "primary dwelling unit") means any single-family residence proposed or existing on the lot where an ADU would be located.
9. Proposed Dwelling. Proposed dwelling means a dwelling that is the subject of a permit application and that meets the requirements for permitting. 810. Public Transit. Public transit means a fixed bus route with regular service covering a significant portion of the City that is not a subscription service. 911. Statewide Exemption ADU. A statewide exemption ADU means an ADU of up to 800 square feet in area, 18 feet in height, as potentially limited by a local agency, and with four-foot side and rear setbacks. ADU law requires that no lot coverage, floor area ratio, open space, or minimum lot size will preclude the construction of a statewide exemption ADU. Further, ADU law allows the construction of a detached new construction statewide exemption ADU to be combined on the same lot with a JADU in a single-family residential zone. In addition, ADUs are allowed in any residential or mixed use zones regardless of zoning and development standards imposed in an ordinance.
12. Tandem Parking. Tandem parking means that two or more automobiles are parked on a driveway or in any other location on a lot, lined up behind one another.
C. Location. Accessory dwelling units shall be permitted on all property within an underlying residential or mixed use zone classification of R-1 (single-family), R-2 (Limited Multi-Family), R-3 (Multi-Family), R-4 (Mixed Use) and R-5 (Transitional Residential/Coastal-Related Industry).
D. Development Standards - General. Only one (1) accessory dwelling unit shall be allowed on a single lot of record, provided, further, that a A Ministerial Permit for such an ADU shall only be granted if all of the following conditions are met:
1. There shall be no minimum lot size required for accommodating an ADU.
2. A primary housingdwelling unit shall exist or be proposed on the lot where the accessory dwelling unit is proposed. Establishment of a secondary housing unit shall not add to, increase or create a use or structure that is not in conformance with all applicable building codes. Any building code violations existing in the primary dwelling unit shall be corrected prior to occupancy of the accessory dwelling unit only upon a determination that such existing building code violations present a threat to public health and safety. This section shall not apply to existing non-conforming zoning violations.
Agenda Item No. 11 Page 22 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 5 of 12
3. The accessory dwelling unit is either attached or located within the living area of the proposed or existing primary dwelling or detached from the proposed or existing primary dwelling and located on the same lot as the proposed or existing primary dwelling.
4. No setback shall be required for an existing living area or accessory structure, or a structure constructed in the same location and to the same dimensions as an existing structure, that is converted to an ADU or to a portion of an ADU, and a setback of no more than four (4) feet from the side and rear lot lines shall be required for an ADU that is not converted from an existing structure or a new structure constructed in the same location and to the same dimensions as an existing structure.
45. Floor Area.
a. Attached accessory dwelling units. The total floor area of an attached ADU shall be a maximum of 850 square feet for up to one bedroom and up to 1,000 square feet for more than one bedroom, or not more than fifty (50) percent of the size of the proposed or existing primary dwelling unit on the site, whichever is greater.
b. Detached accessory dwelling units. The total floor area of a detached ADU shall be a maximum of 850 square feet for up to one bedroom and up to 1,000 square feet for more than one bedroom.
56. A lot may contain up to one ADU and one JADU if all of the following applyThe City shall ministerially approve an application for a building permit to create any of the following:
a. For attached accessory dwelling unitsOne ADU and one JADU per lot with an existing or proposed single-family dwelling if all of the following apply:
1) The ADU or JADU is within the space of an existing or proposed single-family dwelling unit or accessory structure and may include an expansion of not more than 150 square feet beyond the same physical dimensions as the existing accessory structure solely for the purpose of accommodating ingress and egress.
2) The ADU or JADU has exterior access from the proposed or existing single-family dwelling.
3) The side and rear setbacks are sufficient for fire and safety as required by the Uniform Building and Uniform Fire Codes as adopted by the City.
4) A maximum height of 25 feet and two stories.
5) The JADU complies with the requirements of Government Code Section 68552.22 and Section FE, below.
b. For detached new construction accessory dwelling unitsOne detached, new construction ADU that does not exceed four (4)-foot side and rear Agenda Item No. 11 Page 23 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 6 of 12
yard setbacks for a lot with an existing or proposed single-family dwelling.
The ADU may be combined with a JADU described in subparagraph (D)(6)(a). The ADU/JADU shall be subject to the following:
1) Four-foot side and rear yard setbacks shall be maintained. 21) The total floor area shall not exceed 800 square feet. 32) A maximum height of 18 feet shall be maintained, with an additional two (2) feet of height allowed to accommodate a pitched roof on the ADU that is aligned with the roof pitch of the primary dwelling.
c. Multiple ADUs within the portions of existing multifamily dwelling structures that are not used as livable space, including, but not limited to, storage rooms, boiler rooms, passageways, attics, basements, or garages, if each unit complies with state building standards for dwellings.
At least one ADU within an existing multifamily dwelling shall be allowed, with the maximum number of ADUs equal to 25 percent of the number of existing dwelling units within the multifamily structure. d. Not more than two (2) ADUs that are located on a lot that has an existing or proposed multifamily dwelling, but are detached from that multifamily dwelling and are subject to a height limitation of 18 feet, with an additional two (2) feet of height allowed to accommodate a pitched roof on the ADU that is aligned with the roof pitch of the primary dwelling, and rear and side setbacks of no more than four (4) feet.
If the existing multifamily dwelling has a rear or side setback of less than four (4) feet, no modification to the existing multifamily dwelling shall be required as a condition of approving the application to construct an ADU that satisfies the requirements of this subparagraph.
67. The accessory dwelling unit shall conform to the height, setback, lot coverage and other development standards applicable to the construction of primary dwelling units in the underlying zoning district, except that:
a. No setback will be required for an existing garage that is converted to an ADU; and
b. Detached ADUs not located above a detached garage shall not exceed a maximum height of 18 feet, with an additional two (2) feet of height allowed to accommodate a pitched roof on the ADU that is aligned with the roof pitch of the primary dwelling; and.
c. An ADU located within the footprint of an existing living area, accessory structure, or a structure constructed in the same location and same dimensions of an existing structure will not be subject to additional setback requirements, except that an ADU 800 square feet or less in total floor area may be located within four feet of the side and rear property lines.
Agenda Item No. 11 Page 24 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 7 of 12
78. The architectural treatment and exterior composition of the ADU must be of the same materials, colors and architectural styling of the primary housing unit, or the entire structure primary dwelling unit must be modified to match the proposed architecture of the ADU. This determination shall be made objectively, based upon the existing condition of the primary dwelling, and shall be ministerially approved. Alternately, should the City approve model design standards for detached ADUs, if the applicant for a detached ADU chooses to use said model design standards, the ADU will otherwise be exempt from matching the architectural styling of the primary housing unit.
89. If the accessory dwelling unit has a separate entrance from the primary housing unit, the entrance of accessory dwelling unit cannot face the front property line or must otherwise be oriented so as to be clearly subordinate to the primary entrance of the primary housing unit. No accessory dwelling unit will be required to provide a new passageway from the accessory dwelling unit to the street. 910. Garage conversions. A demolition permit required 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 as the building permit for the ADU. When a garage or covered parking structure is demolished in conjunction with the construction of an ADU, or converted into an ADU, the parking spaces contained within the garage or covered parking area are not required to be replaced.
11. Off-street parking:
a. One (1) covered or uncovered off-street parking space, in addition to that required for the primary housing unit, shall be provided. The parking space shall meet the access, paving and other applicable requirements contained in Section 10301 of Chapter 3.
b. Said parking may be located in an existing driveway, in a required setback, or as a tandem design, but shall not impede access to the required parking for the primary residence nor be out of compliance with other development standards applicable to the construction of primary dwelling units in the underlying zoning district. The ADU must be served by the same driveway access to the street as the primary dwelling unit. c. Said parking shall be waived when the ADU is located in any of the following circumstances:
1) Within one-half (1/2) mile walking distance of public transit; 2) Within an architecturally and historically significant historic district; 3) Entirely within an existing or proposed primary residence or an accessory structure;
4) When on-street parking permits are required but not offered to the occupant of the accessory dwelling unit;
5) Within one block of a City-approved and designated car share location.
Agenda Item No. 11 Page 25 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 8 of 12
102. Except as provided in Government Code Section 65852.26, the ADU may be rented separately from the primary residence, but may not be sold or otherwise conveyed separate from the primary residence. Effective January 1, 2025, either the primary housing unit or accessory dwelling unit shall be occupied by the property owner. Notwithstanding, either a JADU constructed within a singlefamily dwelling or the primary dwelling must be occupied by the owner as of the effective date of this Ordinance. Beginning one (1) year after the approval date of the ADU, and annually thereafter, the owner must file an annual report with the Community Development Department listing the occupants of the primary dwelling unit and ADU (and JADU, if applicable) in order to ensure compliance with this section.
113. Rental terms for the ADU shall be 30 days or longer. The ADU shall not be sold separately from the primary housing unit, except as provided by Government Code section 65852.26.
124. The accessory dwelling unit shall conform to all other building, housing and zoning requirements stipulated in the Municipal Code.
135. The accessory dwelling unit shall contain its own kitchen facility and bathroom facility separate from the primary dwelling unit.
146. Utilities:
a. The accessory dwelling unit must have adequate public utility facilities to serve it, including, but not limited to, sewer, water and streets, as certified by the Public Works Director.
b. Accessory dwelling units shall not be considered new residential uses for the purposes of calculating City and County connection fees or capacity charges for utilities, including water and sewer service. c. When the ADU is located entirely within the existing residence, a new or separate utility meter shall not be required and a related connection or capacity fee may not be charged.
d. When the ADU unit is attached to the primary residence or detached, a new or separate utility meter may be required unless developed under Government Code Section 65852.2(e)(1)(A). Any connection or capacity fee for an ADU in excess of 750 square feet in size shall be proportionate to the burden of the proposed accessory dwelling unit based upon either its size or number of plumbing fixtures for a water or sewer system. 157. Accessory dwelling units shall not be required to provide fire sprinklers if they are not required for the primary residence.
168. Any newly constructed, non-manufactured, detached ADU must comply with the California Energy Code requirements contained within Title 24 of the Building Energy Efficiency Standards promulgated by the California Energy Commission, including, without limitation, compliance with net-zero electricity guidelines and inclusion of solar power.
Agenda Item No. 11 Page 26 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 9 of 12
E. Development Standards - Multi-Family. Notwithstanding the provisions of Section D, above, the following standards shall apply to ADUs on lots containing multi-family dwellings:
1. Accessory dwelling units may be established within portions of multifamily dwelling structures that are not used as living space, subject to compliance with all applicable building codes.
2. At least one accessory dwelling unit may be established within an existing multifamily dwelling unit, with the maximum number of accessory dwelling units equal to 25 percent of the number of existing dwellings within the Multi-Family structure.
3. Not more than two detached ADUs may be located on a lot that contains an existing multifamily dwelling, subject to a height limit of 18 feet and four-foot side and rear yard setbacks.
4. Any newly constructed, non-manufactured, detached ADU must comply with the California Energy Code requirements contained within Title 24 of the Building Energy Efficiency Standards promulgated by the California Energy Commission, including, without limitation, compliance with net-zero electricity guidelines and inclusion of solar power.
FE. Development Standards - Junior Accessory Dwelling Units. Notwithstanding the provisions of Section D, above, the following standards shall apply to JADUs:
1. A maximum of one JADU may be built upon residential lot zoned for single-family residences with a single-family residence built, or proposed to be built, on the lot, within the walls of the proposed or existing single-family residence.
2. Either the newly created JADU or the remaining portion of the single-family residence in which the JADU is constructed shall be owner-occupied.
3. The JADU shall include a separate entrance from the primary residence.
4. 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 JADU.
5. A deed restriction shall be recorded, in compliance with Section G, below, which shall run with the land, and which shall include both of the following:
a. The sale of the JADU separate from the sale of the single-family residence shall be prohibited, and a statement shall be provided that the deed restriction may be enforced against future purchasers; and b. A restriction on the size and the attributes of the JADU that conforms with the standards of this Section.
Agenda Item No. 11 Page 27 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 10 of 12
6. Beginning one (1) year after the approval date of the ADU, and annually thereafter, the owner must file an annual report with the Community Development Department listing the occupants of the primary dwelling unit and ADU (and JADU, if applicable) in order to ensure compliance with this section.
67. Additional parking shall not be required for a JADU that conforms with the provisions of this Section, with the exception that if the JADU is constructed within an attached garage, the parking spaces required for the primary residence that were displaced by construction of the JADU shall be replaced on the site.
GF. Deed Restriction Covenant and Affordable Housing Agreement.
1. Deed Restriction Covenant. To ensure compliance with the conditions of Sections D and E and F above, prior to occupancy of the accessory dwelling unit, the property owner shall file with the County Recorder upon approval by the City Attorney as to form and content, a deed restriction covenant containing a reference to the deed under which the property was acquired by the present owner and stating that:
a. The accessory dwelling unit shall not be sold from the primary dwelling unit, except for those sales or transfers exempted by Government Code section 65852.26;
b. The accessory dwelling unit is restricted to the approved site; c. Effective January 1, 2025, the Ministerial Permit for the accessory dwelling unit shall be in effect so long as either the primary housing unit or the accessory dwelling unit is occupied by the owner of the lot on which the accessory dwelling unit is located, except for bona fide temporary absences. The Ministerial Permit shall remain valid if disability or infirmity require the institutionalization of the owner; d. The Ministerial Permit, and any standards imposed by such permit, shall lapse upon removal of the accessory dwelling unit;
e. The accessory dwelling unit shall not be rented for a period of less than thirty (30) days; and
f. The above declarations are binding upon any successors in ownership of the property.
2. Affordable Housing Agreement. In that the state of California has found that accessory dwelling units are an affordable type of residence to address the housing needs in California, prior to occupancy of the ADU, the property owner shall file with the County Recorder upon approval by the City Attorney as to form and content an affordable housing agreement.
a. The affordable housing agreement shall:
1. Be for a minimum term of fifty-five (55) years, with automatic renewal, or until the accessory dwelling unit is removed, and such restriction shall run with the land;
Agenda Item No. 11 Page 28 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 11 of 12
2. Be rented to "low" or "very low" income households as defined by the most currently published United States Department of Housing and Urban Development (HUD) Income Limits for Ventura County. b. Beginning on the first anniversary of the occupancy of the accessory dwelling unit and annually thereafter, the property owner shall submit a report to the Community Development Department demonstrating that the tenant's income is in compliance with the requirements of the affordable housing agreement.
c. In lieu of being rented as an affordable unit, the accessory dwelling unit may be rented to person(s) over the age of sixty-two (62), caregivers for a resident of one of the units on the property, and persons with disabilities who do not meet the income limitations set forth herein. The property owner shall still submit a report to the Community Development Department demonstrating that the tenants residing in the accessory dwelling unit are in compliance with the requirements of the affordable housing agreement.
HG. Review Process. Applications for ADUs shall be submitted to the Community and Economic Development Department for review. If the proposal meets all of the requirements of the Municipal Code, then within sixty (60) days of deeming the application complete, the Director of Community and Economic Development or his designated representative shall issue a Ministerial Permit without discretionary review or a public hearing. In the event that an application is denied, the Community and Economic Development Department shall provide a full set of comments with a list of items that are defective or deficient and a description of how the application can be remedied within the 60-day timeframe to act on the permit application.
IH. Revocation. It shall be unlawful for any person to occupy any property which fails to comply with the provisions of this Section. Noncompliance may result in the revocation of the Ministerial Permit.
Agenda Item No. 11 Page 29 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 12 of 12
CERTIFICATION
STATE OF CALIFORNIA )
) ss
COUNTY OF VENTURA )
I, Georgianna Nicole Alvarez, City Clerk of the City of Port Hueneme, California, do hereby certify that the foregoing Ordinance No. ____ was introduced at the regular meeting of _____, 2024, and duly adopted at the regular meeting of ________, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Georgianna Nicole Alvarez
City Clerk
Agenda Item No. 11 Page 30 of 44 CC Agenda 5-20-2024
ORDINANCE NO. _____
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PORT HUENEME, CALIFORNIA, AMENDING SECTION 10803 OF CHAPTER 6 OF ARTICLE X OF
THE PORT HUENEME MUNICIPAL CODE, PERTAINING TO DENSITY BONUS
REQUIREMENTS
THE CITY COUNCIL DOES ORDAIN AS FOLLOWS:
A. The purpose of this ordinance is to amend Section 10803 of Chapter 6 of Article X of the Port Hueneme Municipal Code (PHMC) to revise the City's existing regulations for Density Bonus requests to make conforming changes to comply with California Government Code Sections 65915 through 65918.
B. After reviewing the evidence presented, the City Council finds that the proposed ordinance is consistent with the City's General Plan. The proposed ordinance will not only comply with state law, but would assist with providing affordable housing and alternative housing and reasonable infill development opportunities.
SECTION 1: The City Council finds and determines as follows:
A. On May 20, 2024, the City Council conducted a duly noticed public hearing to consider the proposed amendments to PHMC Section 10803.
SECTION 2: The amendments to Section 10803 are made to Chapter 6 of Article X of the Port Hueneme Municipal Code, as set forth in attached Exhibit A.
SECTION 3: This Ordinance will take effect on the 31st day following its final adoption and passage.
SECTION 4: Pursuant to the California Environmental Quality Act ("CEQA"), this action to amend City Municipal Code section 10803 regarding Density Bonus regulations is exempt from CEQA pursuant to Title 14 California Code of Regulations Section 15061(b)(3), which exempts projects where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
SECTION 5: Repeal of any provision of the Port Hueneme Municipal Code does not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before this Ordinance's effective date. Any such repealed part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Ordinance.
SECTION 6: If any section, subsection, sentence, clause, phrase, or portion of this Chapter is held to be invalid or unconstitutional by any court of competent jurisdiction for any reason, such decision shall not affect the validity of the remaining portions of this Chapter. The City Council declares that it would have adopted each section, subsection, sentence, clause, phrase, or portion of this Chapter irrespective of whether one or more sections, subsections, sentences, clauses, phrases, or portions of this Chapter be declared invalid or unconstitutional.
SECTION 7: All of the provisions of the City of Port Hueneme Municipal Code as heretofore adopted by the City Council that are in conflict with the provisions of this Ordinance are hereby repealed.
Attachment C
Agenda Item No. 11 Page 31 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 2 of 14
SECTION 8: The City Clerk of the City of Port Hueneme is hereby directed to certify the passage and adoption of this Ordinance and to cause it to be published as required by law.
PASSED and ADOPTED on this ___ day of 2024.
Misty Perez
Mayor
ATTEST:
________________________________
Georgianna Nicole Alvarez
City Clerk
APPROVED AS TO FORM:
________________________________
Joan Stevens Smyth
City Attorney
Agenda Item No. 11 Page 32 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 3 of 14
EXHIBIT A
Chapter 6 - Affordable Housing
10803 Density Bonus.
A. Purpose……………………………………………………………………….
B. Applicability………………………………………………………………….
C. Protection of Coastal Resources…………………………………………
D. Determination of Density Bonus………………………………………….
E. Specific Requirements……………………………………………………..
F. Standards…………………………………………………………………….
G. Incentives or Concessions………………………………………………..
H. Waiver…………………………………………………………………………
I. Application…………………………………………………………………...
J. Project Review Procedures……………………………………………….
K. Interpretation………………………………………………………………..
A. Purpose. The purpose of this section is to implement the incentive programs provided in the State density bonus regulations (California Government Code Sections 65915 through 65918) in order to provide additional opportunities for the development of affordable housing within the City of Port Hueneme. The intent of the following regulations is to ensure that, to the maximum extent feasible, the provisions of Government Code Sections 65915 through 65918 are implemented (1) in a manner that is consistent with the policies of the Port Hueneme General Plan, and (2) in the Coastal Zone, in a manner that is consistent with the certified Local Coastal Program land use policies and zoning ordinance provisions.
B. Applicability. This section applies to any residential development of five (5) or more units, or thirty-five (35) or more units for a senior housing project, when an applicant proposes a density increase above the maximum residential density. In exchange for the density, a portion of the units shall be reserved for lower income households, senior households, or moderate income households (in a common interest development) as provided in this section housing developments eligible for a density bonus and other regulatory incentives when the applicant seeks and agrees to provide very-low, low or moderate income housing units, or units intended to serve seniors, transitional foster youth, disabled veterans, homeless persons, and lower income students in the threshold amounts specified in Government Code Sections 65915 through 65918. All such projects shall be subject to development review requirements of Chapter 3 of this Article, including the Coastal Development Permit requirements.
C. Protection of Coastal Resources. Within the Coastal Zone, any housing development approved pursuant to Government Code Section 65915 (as modified to include a density bonus, incentives, or concessions) shall be consistent with all applicable certified Local Coastal Program policies and development standards. Further, the City shall grant the incentive or concession to accommodate the density increase in compliance with this section unless the requested incentive or concession will have an adverse effect on coastal resources. If, however, the City determines that the requested incentive or concession will have an adverse effect on coastal resources, before approving a density increase, the City shall identify all feasible alternative incentives and concessions and their effects on coastal resources. The City shall grant one or more of those alternatives that avoids adverse impacts to coastal resources to the extent feasible.
Agenda Item No. 11 Page 33 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 4 of 14
D. Determination of Density Bonus. Qualified projects that meet the eligibility requirements set forth in this section shall be granted a density bonus as outlined below.
1. In all density calculations, fractional units shall be rounded to the next whole number.
2. The density bonus shall not be included when determining the percentage of affordable units required to qualify a housing development for a density bonus pursuant to Government Code Sections 65915 through 65918.
3. The developer can request a lesser density bonus than the project is entitled to, or no density bonus, but no reduction will be permitted in the percentages of required affordable units contained in Government Code Section 65915, subdivisions (b), (c), and (f). Regardless of the number of affordable units, no residential development project shall be entitled to a density bonus of more than what is authorized under Government Code Sections 65915 through 65918.
4. Unless otherwise specified, each residential development is entitled to only one (1) density bonus, and density bonuses from more than one (1) category may not be combined.If a residential development qualifies for a density bonus under more than one income category, or additionally, as a senior citizen housing development as defined herein, or as housing intended to serve transitional foster youth, disabled veterans, homeless persons, or lower income students, the applicant shall identify the categories under which the density bonus would be associated and granted. Density bonuses from more than one category can be combined up to the maximum allowed under Government Code Section 65915, as it may be modified from time to time.
5. The granting of a density bonus and its subsequent incentive(s) shall not be interpreted, in and of itself, to require a general plan amendment, zone change, or other discretionary approval.
6. Condominium/apartment conversions are not eligible for a density bonus if the original development received a density bonus, or other incentive, pursuant to this article.Condominium Conversion. If a density bonus or incentive is requested for a condominium conversion, reasonable documentation that all of the requirements included in Government Code Section 65915.5 can be met must be provided.
7. Commercial Development Bonus. If a commercial development bonus is requested, the application shall include the proposed partnered housing agreement and the proposed commercial development bonus, as defined in herein and reasonable documentation that each of the standards included in subsection (e) (4) has been met.
Income Group Minimum
Set Aside
of
Affordable
Units
Bonus
Granted
Each
Additional
1% Adds
Maximum
Bonus
Under
State Law
%
Affordable
Units
Needed to
Reach
Maximum
Bonus
Agenda Item No. 11 Page 34 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 5 of 14
Very Low Income 5% 20% 2.5% 35% 11%
Lower Income 10% 20% 1.5% 35% 20%
Moderate Income
(Common Interest
Development Only)
10% 5% 1.0% 35% 40%
Senior Citizen Housing
Development
100% (35-
unit
minimum
project
size)
20% -- 20% NA
Land Donation (very low
income projects only)
10% 15% 1.0% 35% 30%
Condominium/Apartment
Conversions
33% lowtomoderate
Income
25% NA 25% NA
15% very
low income
Table 1- Density Bonus*
Income Group Percent of Required
Affordable Units
Density Bonus
Granted
Very Low Income 5%-15% 20%-50%
Low Income 10%-24% 20%-50%
Moderate Income 10%-44% 5%-50%
Senior Citizen Housing
Development
NA 20%
Foster Youth, Disabled Veterans,
Homeless Persons at 50% Area
Median Income (AMI)
10% 20%
Student Housing 20% 35%
100% Affordable (restricted to very
low, lower and moderate income
residents with a maximum of 20%
moderate)
80% at 80% AMI + 20%
at 120% AMI
80% or unlimited
Land Donation (very low income
projects only)
10%-30% 15%-35%
Condominium/Apartment
Conversions
33% low-to-moderate
income
25%
15% very low income
Agenda Item No. 11 Page 35 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 6 of 14
* The density bonus shall be consistent with California Government Code Section 69515, as it may be amended from time to time, although that may change the information provided in this table.
Table 2 - Example Calculation of a Density Bonus
Very Low
Income
Lower Income Moderate
Income
Senior
Housing
Initial Project Size 20 units 20 units 20 units 35 units Affordable Units 5% 10% 10% 100%
Density Bonus
Qualified
20% 20% 5% 20%
Total Project
Units
24 units 24 units 21 units 42 units
Distribution of
project Units
1 Very Low
Income; 23
Market Rate
2 Low Income;
22 Market Rate
2 Moderate
Income; 19
Market Rate
42 Units
In addition to the density bonus provisions noted in Table 1, above, Government Code Section 65915(v)(2) requires that an additional density bonus shall be granted as follows for a housing development that includes additional rental or for-sale units affordable to vey low income, or moderate income households above and beyond those to be provided in accordance with the provisions of table 1, above.
Table 3 – Additional Density Bonus
Income Group Percent of Additional
Required Affordable
Units
Additional Density
Bonus Granted
Very Low Income 5%-10% 20%-38.5%
Moderate Income 5%-15% 20%-50%
E. Specific Requirements
1. Senior Citizen Housing Requirements.
a. Senior citizen housing development projects shall have a minimum of thirtyfive (35) units and shall meet the requirements described in Section 51.3 of the California Civil Code or any successor statute or regulation. b. Mobile home parks shall limit residency based on age requirements for housing for older persons pursuant to Section 798.76 of 799.5 of the Civil Code, or any successor statute or regulation.
2. Land Donation Requirements. An applicant for a tentative map, parcel map or any other discretionary approval required to construct a residential development in the City shall receive a fifteen (15) percent density bonus for the residential development when the applicant donates land to the City as provided in this Section. This fifteen (15) percent bonus shall be in addition to any other density bonus provided for in this Section, up to a total combined density bonus of thirtyAgenda Item No. 11 Page 36 of 44 CC Agenda 5-20-2024 Ordinance No.___, Page 7 of 14
five percent. Applicants are eligible for the fifteen (15) percent land donation density bonus if all of the following conditions are met:
a. The developer shall donate and transfer land to the City prior to approval of the final map or other discretionary approval required for the residential development.
b. The transferred land shall have the appropriate acreage and General Plan and zoning designation to permit development of affordable housing for very low income households.
c. The transferred land shall be at least one (1) acre or of sufficient size to permit development of at least forty (40) residential units. d. The transferred land shall be served by adequate public facilities and infrastructure.
e. The transferred land and the very low income units constructed shall have a deed restriction recorded with the County Recorder, to ensure continued affordability of the units. The deed restriction shall be recorded on the property at the time of dedication.
f. The transferred land shall be conveyed in fee simple to the City or to a housing developer approved by the City.
g. The transferred land shall be within the boundary of the proposed residential development, or no more than approximately one-quarter (¼) mile from the boundary of the qualified project, if the City so approves. h. No later than the date of approval of the final map or other discretionary approval required for the residential development the transferred land shall have all of the permits and approvals, other than building permits, necessary for the development of the very low income housing units on the transferred land.
3. Child Care Facility Requirements.
a. The City shall grant either of the following to a density bonus project that includes a child care facility located on the premises of, or adjacent to, the project:
1) An additional density bonus in an amount equivalent to the square footage of the childcare facility; or
2) An additional concession or incentive that contributes significantly to the economic feasibility of the construction of the child care facility. b. In order to receive the additional child care density bonus, the project shall comply with the following requirements:
1) The child care facility shall remain in operation for a period of time that is as long as, or longer than, the period of time during which the density bonus units are required to remain affordable.
Agenda Item No. 11 Page 37 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 8 of 14
2) Of the children who attend the child care facility, the percentage of children of very low income, low income, or moderate income households shall be equal to, or greater than, the percentage of affordable units.
c. Notwithstanding any requirement of this section, the City shall not be required to provide a density bonus or concession for a child care facility if it finds, based upon substantial evidence, that the community already has adequate child care facilities.
d. Child Care Density Bonus means a floor area ratio bonus over the otherwise maximum allowable floor area permitted under the applicable zoning ordinance and land use elements of the General Plan of the following amounts pursuant to Government Code Section 65917.5: A maximum of five (5) square feet of floor area for each one square-foot of floor area contained in the Child Care Facility for existing structures; or a maximum of ten (10) square feet of floor area for each one square-foot of floor area contained in the Child Care Facility for new structures.
4. Commercial Density Bonus Requirements.
a. When an applicant proposes to construct a commercial development and has entered into a partnered housing agreement approved by the City, the City shall grant a commercial development bonus as set forth in Government Code Section 65915.7(b), as amended from time to time, that is mutually agreed upon by the developer and the City. The commercial development bonus shall not include a reduction or waiver of fees imposed on the commercial development to provide for affordable housing. b. The requirements for commercial development bonus are as follows, which also be described in the partnered housing agreement:
1) The housing development shall be located either: (a) on the site of the commercial development; or (b) on a site within the City that is within one-half mile of a major transit stop and is located in close proximity to public amenities, including schools and employment centers. 2) At least 30 percent of the total units in the housing development shall be made available at affordable ownership cost or affordable rent for low-income households, or at least 15 percent of the total units in the housing development shall be made available at affordable ownership cost or affordable rent for very low income households. 3) The commercial developer must agree either to directly build the affordable units; donate a site consistent with subparagraph (4)(b)(1) above for the affordable units; or make a cash payment to the housing developer for the affordable units.
c. Any approved partnered housing agreement shall be described in the City’s housing element annual report as required by California Government Code Section 65915.7, subdivision (k).
Agenda Item No. 11 Page 38 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 9 of 14
F. Standards. A density bonus shall only be granted in conjunction with a Development or Administrative Permit and shall only be granted if all of the following conditions are met:
1. The housing costs of units made available to qualifying households must not exceed the limits of affordability established pursuant to Section 50052.5 and 50053 of the California Health and Safety Code. Determinations of affordability for housing made available for sale or rent to qualifying households shall be governed by the regulations set forth in Title 25, Section 6910 et seq., of the California Code of Regulations.
2. The housing costs of units made available to qualifying households must not exceed the limits of affordability established pursuant to Section 50052.5 of the California Health and Safety Code. Determinations of affordability for housing made available for sale or rent to qualifying households shall be governed by the regulations set forth in Title 25, Section 6910 et seq., of the California Code of Regulations.
3. Housing units made available to qualifying householdswith rents for the lower income density bonus units shall be set at an affordable rent, as defined in Section 50053 of the Health and Safety Code. The housing units must remain available to such households at affordable rates, for a minimum of thirty (30)fifty-five (55) years, or such longer period of time specified in loan agreements or subsidy programs associated with the development project. Deed restrictions, in form and content acceptable to the City to ensure unit affordability, must be recorded on the property prior to project commencement to assure compliance with the affordability requirements of this section.
4. The developer shall verify income data for each qualifying household for the purpose of establishing eligibility and affordable housing costs. The criteria and methods used in verifying income shall conform to the standards prescribed for the Housing Choice Voucher Rental Assistance Program and administered by the Port Hueneme Housing Authority. In determining eligibility, the income schedule (then in effect) adopted pursuant to Title 25, Section 6932 of the California Code of Regulations, shall be used at the time each unit is initially occupied by a qualifying household.
5. Housing units which are made available to qualifying households shall be constructed so as to resemble and be compatible with all other units in the same development. Affordable units shall be constructed concurrently with the marketrate units and be dispersed throughout the project, unless both the City Council and developer agree to an alternative construction schedule and distribution pattern.
G. Incentives or Concessions. All developers qualifying for a density bonus under this section may be entitled to at least one (1) of the following incentives according to the following schedule.An incentive or concession is defined as the number of incentives or concessions that may be requested, which shall be based upon the number the applicant is entitled to, pursuant to Government Code Sections 65915 through 65918.
Target Group Target Units
Very Low Income 5% 10% 15%
Agenda Item No. 11 Page 39 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 10 of 14
Lower Income 10% 20% 30%
Moderate Income (Common
Interest Development Only) 10% 20% 30%
Incentives* 1 2 3
Child care facility: When a qualified project includes a child care facility, the applicant shall receive one (1) additional incentive.
Table 4 - Incentives or Concessions Based on Percentage of Affordable Units No. of
Incentives/
Concessions
Very Low
Income
Percentage
Low Income
Percentage
Moderate
Income
Percentage (for
sale)
Student
Housing
Percentage
1 5% 10% 10% 20%
2 10% 17% 20% -
3 15% 24% 30% -
4 16% - 45% -
5 100% Low, Very Low, and or Moderate (up to 20%
Moderate allowed)*
-
* Projects located within one-half mile of a major transit stop, shall also receive a height increase of up to three additional stories, or 33 feet.
1. The City Council may approve the requested incentives or concessions for a proposed project if the applicant provides a written financial statement detailing that the incentive(s) is necessary to make the housing units economically feasible and will sufficiently reduce the cost of the housing development. The City Council may deny one (1) or more of the requested incentives if, based on substantial evidence, it makes either one (1) of the following written findings:
a. The incentive is not required to ensure housing costs meet the affordability standards, as defined in Health and Safety Code Section 50052.5, or any successor statute or regulation, or to ensure rents in the affordable units meet the requirements of this Article.
b. The incentive would have a specific adverse impact, as defined in Government Code Section 65589.5(d)(2), upon:
1) Public health and safety; or
2) Physical environment; or
3) Any real property that is listed in the California Register of Historical Resources; or
Agenda Item No. 11 Page 40 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 11 of 14
4) Resource protection policies of the Local Coastal Program; and 5) There is no feasible method to satisfactorily mitigate or avoid the specific adverse impact without rendering the development unaffordable to low and moderate income households.
2. Menu of Incentives or Concessions.
a. Relaxation or other modification of zoning standards regulating such items as setbacks height limitations, distances between buildings, required parking, parking development standards, projections into yards, and the like. No separate variance application will be required for any modification of standards. However, the approved plans and application shall identify the zoning standards modifications which have been incorporated into the project.
b. Modification of architectural regulations ordinarily applied to a residential development project.
c. Shared participation in public improvements, environmental documentation and impact mitigation, and similar costs associated with project development.
d. Regulatory concessions resulting in identifiable cost reductions including, but not limited to, fee waivers, expedited permit processing and reduction of off-site improvements.
e. Additional density bonus above the bonus incentives as required by Section 65915(b)(1) of the Government Code, as long as the overall bonus received for the project does not exceed one hundred ten (110) percent for SRO or one-bedroom units and fifty (50) percent for two-bedroom and above units.
f. The assignment of Housing Choice Voucher Rental Assistance Program payments, as available, to the applicants for the targeted housing units. g. Other regulatory incentives or concessions proposed by the developer or the City which result in identifiable project cost reductions.
H. Waiver. In accordance with Government Code Section 65915(e), if any other City development standard would physically prevent the project from being built at the permitted density and with the permitted incentives or concessions, the developer may propose to have those standards waived or reduced. The waiver or reduction of a development standard does not count as an incentive or concession, and there is no limit on the number of development standard waivers that may be requested or granted. This subdivision shall not be interpreted to require a local government to waive or reduce development standards if the waiver or reduction would have a specific, adverse impact, as defined in paragraph (2) of subdivision (d) of Government Code Section 65589.5, upon health or safety, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact. This subdivision shall not be interpreted to require the City to waive or reduce development standards that would have an adverse impact on any real property that is listed in the California Register of Historical Resources, or to grant any waiver or reduction that would be contrary to state or federal law.
Agenda Item No. 11 Page 41 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 12 of 14
I. Application Required.
1. When an applicant seeks a density bonus for a housing development that meets the criteria of Government Code Section 65915, the affordable housing developer must comply with all of the following requirements:
a. The applicant shall file an application for a density bonus that includes a minimum affordable housing component.
b. The applicant shall state in the application the specific minimum affordable housing component proposed for the housing development. c. The applicant shall enter into an agreement with the City to maintain and enforce the affordable housing component of the housing development.
2. Content of Application. The application for a density bonus shall include the following information:
a. A description of the project, including the number of dwelling units, the number of affordable units and level of affordability, and the location of the affordable units.
b. A description of the density bonus and the incentives or concessions requested, if any.
c. For parking standard modification requests, that the requirements of California Government Code Section 65915(p) are met.
d. The location, design and phasing criteria, including any proposed modifications or waivers to the City’s development standards. e. Any proposal for the waiver or reduction of development standards which waiver or reduction is required to allow the City to avoid physically precluding the construction of a development that meets the criteria of Government Code Section 65915(b) at the densities, or with the concessions or incentives permitted by the statute.
f. The proposed method of ensuring the continued affordability of all low and/or very low income rental units, senior units, or child care facilities for at least 55 years.
g. Other information reasonably requested by City staff needed to establish eligibility for a requested density bonus, incentives or concessions, or to demonstrate that the incentives meet the definition of identifiable and actual cost reductions to provide for affordable housing costs and rents.
HJ. Project Review Procedures. All project applications for which a density bonus is being requested shall be subject to the issuance of a Development, Administrative or Ministerial Permit pursuant to Chapter 3 of this Article; provided, further, that the following additional project review procedures shall be imposed:
1. A pre-application shall be made by the project applicant pursuant to Section 10352(B) of this Article. The purpose of the meeting will be to review any Agenda Item No. 11 Page 42 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 13 of 14
preliminary development plans prepared by the developer and to discuss the additional project incentives sought by the developer.
2. In the event the developer requests a waiver or modification of zoning standards pursuant to subsection (E)(2) of this section of this Chapter, the developer shall be required to show that the waiver or modification is necessary to make the housing units economically feasibleprovide documentation that the development standards for which a waiver is requested will have the effect of physically precluding the construction of a development at the densities or with the concessions or incentives permitted by Government Code Sections 65915 through 65918, as may be amended from time to time.
3. An application for a density bonus will not be processed until all of the provisions of Section 10803(I) are complied with and shall be processed concurrently with other required entitlements for which the affordable housing benefit is sought.
4. Approval of a density bonus permit, incentives, concessions or waivers shall be made by the approval authority within the City that is authorized to approve the associated discretionary approval or ministerial approval for the underlying development permit for the housing development. The approval of the density bonus application is nondiscretionary unless the City adopts written findings justifying the denial of the density bonus. The approval authority’s decision shall only be appealable if the density bonus application is denied. An appeal shall be granted if the approval authority’s decision does not include written findings or if the written findings do not justify the denial consistent with state or local law.
K. Interpretation. If any portion of this Section conflicts with Government Code Sections 65915 through 65918 or other applicable state law, state law shall supersede this chapter.
Any ambiguities in this Chapter shall be interpreted to be consistent with Government Code Sections 65915 through 65918.
Agenda Item No. 11 Page 43 of 44 CC Agenda 5-20-2024
Ordinance No.___, Page 14 of 14
CERTIFICATION
STATE OF CALIFORNIA )
) ss
COUNTY OF VENTURA )
I, Georgianna Nicole Alvarez, City Clerk of the City of Port Hueneme, California, do hereby certify that the foregoing Ordinance No. ____ was introduced at the regular meeting of _____, 2024, and duly adopted at the regular meeting of ________, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Georgianna Nicole Alvarez
City Clerk
Agenda Item No. 11 Page 44 of 44 CC Agenda 5-20-2024
DATE: May 20, 2024
TO: Honorable City Council
FROM: James Vega, City Manager
Charles Cable, PE, Principal Engineer
SUBJECT: PONOMA STREET PARKING CONCERNS AND OPTION FOR STOP
SIGN INSTALLATION
RECOMMENDATION:
It is recommended the City Council consider whether to approve an 18-month demonstration installation of Stop Signs for multiway stop control at Ponoma Street intersecting with Clara and B Street.
BACKGROUND/ANALYSIS:
In May 2023, a resident complained about the lack of sight distance when entering Ponoma Street from intersecting streets. The complaint stated that the vehicles parked far too close to the intersections and blocked a driver's view, leading to potential collisions with oncoming traffic.
Sight distance is a term used to describe the distance needed for minimum safe visibility for a driver to react, decide, and stop to avoid a collision. For local residential street intersections, this allows for the visibility of drivers on a side street to see oncoming traffic to pull out safely into the intersection.
The City's on-call Traffic Engineer was consulted to provide an assessment and recommend a solution for the resident's concern. The finding was that the red curb should be placed at the intersections to provide adequate sight distance to increase visibility and overall safety for motorists and pedestrians. It was noted that on-street parking was obstructing sight distance. The length of the red curb specified conformed with the stopping sight distance necessary under the American Association of State Highway and Transportation Officials (AASHTO) Policy of Geometric Design and Cal Trans Highway Design Manual.
Agenda Item No. 12 Page 1 of 12 CC Agenda 05-20-2024
PONOMA RED CURB & STOP SIGNS
May 20, 2024
The Ponoma Street neighborhood is a relatively dense neighborhood that also receives complaints related to the lack of available street parking. As the City began to add red curb (in August 2023), the City received several complaints about the reduction in the available on-street parking. This has only been made more challenging with new state laws and mandates being put in place since then. Since the resident's initial complaint came in, changes in enforcement regarding traffic and parking have occurred at the state level and locally:
• State Assembly Bill 413 (the "Daylighting" law) became effective on January 1, 2024. Which prohibits parking 20 feet from any marked or unmarked crosswalks, even if the curb is not painted red.
• The state continues to implement regulations that will increase density (and therefore number of cars per property) via ADU and density bonus regulations (also discussed separately on tonight’s agenda).
These regulations are going to result in more cars parked in less spaces, which will only enhance parking and visibility issues. For this reason, City staff have continued to investigate options proactively. Staff has noted the feedback and has explored other methods to mitigate the sight distance issue and address the parking impacts. Some mitigation measures reviewed included:
1) Installing traffic control devices like speed cushions on Ponoma Street 2) Contacting Gold Coast regarding the possibility of adjusting bus stop locations, 3) Providing more parking on San Pedro Street (already implemented), 4) Conducting traffic studies and preparing standard operating procedures in accordance with State Law and the California Manual on Uniform Traffic Control Devices (CA MUTCD) guidance.
Two of the four options investigated appeared feasible, addressed the original complaint, and increased parking. Measures 3 and 4 are feasible; however, measures 1 and 2 do not appear feasible. Staff contacted Gold Coast Transit District (GCTD) about bus stop removals along Ponoma Street. GCTD stated that the bus stops along Ponoma Street have one of the highest ridership, so it is not recommended to modify these stops at this time. Installing speed cushions along Ponoma Street is not advised because it is an emergency vehicle access corridor and a major bus route, and it doesn’t meet the criteria of the City’s Speed Cushion Policy. In partnership with the Naval Base, we were able to remove restrictions of on-street parking on the southbound side of San Pedro streets, providing an additional 40 parking spaces for the residents. The Public Works Department, in consultation with an on-call traffic engineer, has prepared Standard Operating Procedures for stop sign placement and curb marking citywide, which allows staff to implement alternatives to the red curbing at Ponoma Street and set future guidelines for implementing red curbing or stop signs. The Standard Operating Procedures does not override the authority of the City Council to direct the installation of stop signs unless prohibited by law.
Agenda Item No. 12 Page 2 of 12 CC Agenda 05-20-2024
PONOMA RED CURB & STOP SIGNS
May 20, 2024
In addition, the City Municipal Code authorizes City Council to install “Special Stop Signs” per Section 3224- which states: “Whenever any street or portion thereof is designated as a through street, or when the Council directs the installation of special stop signs, the Traffic Engineer shall erect and maintain stop signs on each and every street intersecting such through street or portion thereof so designated and at those entrances of other intersections where a stop is required and at any railroad grade crossing so designated by council resolution. Every such sign shall conform with and be placed as provided for in the Vehicle Code.” In a situation like this, where there are multiple factors to consider, the City Council has the ability to approve installation of stop signs. Staff recommends that Council consider installing stop signs at the intersections of Ponoma and “B” and Clara Streets to address the unique factors at these locations. Because this is an effort to address a variety of concerns proactively, the City’s Traffic engineer recommends that an evaluation of the operation and safety of the intersection be done at a minimum of 6 months and 18 months after the installation. If concerns arise related to the stop signs, the reviews would be an opportunity to consider removal.
The stop signs at these locations will allow the red curb to be removed at Ponoma and B Street. Another benefit of the two stop signs will be reduced traffic speeds on Ponoma, which will enhance vehicle and pedestrian crossings. A map is included as an attachment demonstrating where the proposed stop signs will be installed and where the red curb will be removed.
FISCAL IMPACT:
None. This item does not require an expenditure of funds.
STRATEGIC PLAN:
Primary Strategic Pillar(s) and Initiative(s):
Optimal Levels of Service for Residents and Businesses
• Promote operational excellence in all City functions and embody best practices as a municipality
Fiscal & Economic Excellence
• Establish Key Performance Indicators and systems for data management to help leaders monitor, measure, and report progress and successes.
ATTACHMENTS:
A. Ponoma St. showing potential Stop Sign Locations and Red Curb Removal B. Standard Operating Procedures Stop Signs
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Agenda Item No. 12 Page 4 of 12 CC Agenda 05-20-2024
STOP
STOP
STOP
STOP
PLEASANT VALLEY ROAD
C STREET
B STREET
PONOMA STREET
A STREET
CLARA STREET
Proposed STOP SIGNS
On Ponoma, at B Street
to create a 4-way Stop
Proposed STOP SIGNS
On Ponoma, at Clara Street
to create a 4-way Stop
Remove red curb (40')
Remove red curb (40')
Bus Stop
Bus Stop
Bus Stop
Bus Stop
Attachment A
Agenda Item No. 12 Page 5 of 12 CC Agenda 05-20-2024
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Agenda Item No. 12 Page 6 of 12 CC Agenda 05-20-2024
Public Works Standard Operating Procedure No. 550.1
1 City of Port Hueneme
Public Works
STANDARD OPERATING PROCEDURE
NO. 550.3
Subject: STOP SIGN INSTALLATION
Approved by:
Fred Camarillo, Public Works Director
Recommended by:
Charles Cable, PE, Principal Engineer
Date Originally Issued: Date of Revision:
Purpose
The purpose of this SOP is to establish guidelines for the installation of stop signs.
Procedure
A. General
All traffic control devices, including Stop signs, are to be evaluated and installed using engineering judgment and in accordance with State Law and the guidance contained in the California Manual on Uniform Traffic Control Devices (CA MUTCD). This Standard Operating Procedure provides additional guidance for consideration of the installation of stop signs.
However, this SOP does not override the authority of the City Council to direct the installation of stop signs as they deem necessary unless otherwise prohibited by law.
Stop signs are regulatory devices used to assign the right-of-way of traffic, improve efficiency, and improve safety at an intersection. Installing a stop sign should not be taken lightly because inappropriate installation may result in a less safe and inefficient intersection or adjacent street segments.
The installation of a stop sign should be considered along with other traffic control devices for increasing safety or improving the operation of an intersection. Their installation should be weighed against the current traffic conflicts, collision experience, and potential community acceptance of the proposed location. The location should be field reviewed and evaluated to determine if there are better solutions, such as removing a visibility obstruction, installing other Attachment B
Agenda Item No. 12 Page 7 of 12 CC Agenda 05-20-2024
Public Works Standard Operating Procedure No. 550.1
2 traffic control devices, or where other solutions would cause detrimental impacts. Stop signs may be a substantial inconvenience to motorists and bicyclists and would be a safety concern if compliance by motorists is low, so their installation should be carefully considered.
B. One-Way Stop Control
If a street intersection does not have any stop control on the side street approach to a threeway intersection between a through street and a side, a stop sign shall be installed on the side street approach unless a traffic analysis indicates that another traffic control method or physical improvement will better suit traffic flow, improve traffic safety, or provide visibility of traffic, bicycles, and pedestrians.
If an alley intersection does not have any stop control on the approach from the alley, a stop sign shall be installed on the alley approach unless a traffic analysis indicates that another traffic control method or physical improvement will better suit traffic flow, improve traffic safety, or provide visibility of traffic, bicycles, and pedestrians.
C. Two-Way Stop Control
If a 4-way (or more) approach intersection does not have any stop control on any of the approaches a stop sign should be installed on one or two of the minor crossing streets where one or more of the following warrants exist:
1. On a local road at its intersection with an arterial or collector road.
2. On a minor street where the safe approach speed is less than 10 mph due to unremovable visibility obstructions, such as buildings, walls, or topography.
3. At intersections where a combination of speed, restricted visibility, and collision history indicates a need for control by a stop sign.
D. Multi-Way Stop Control
Multi-way or all way stop controlled intersections are those that are controlled by stop signs on all approaches. Stop control on all approaches at an intersection is normally used at intersections with approximately equal volumes on all approaches. This type of control can be used as an effective safety measure if certain conditions exist. Safety concerns associated with the installation of a multi-way stop include pedestrians, bicyclists, and vehicular road users expecting other road users to stop. This expectation is based on the user’s experience with the individual location and the perception of a reason for the driver to stop (i.e. other vehicles, presence of pedestrians, or sight distance restrictions).
There are also disadvantages to installing multi-way stop signs. These include increased acceleration and deceleration noise, increased air pollution near the intersection, and the potential for an increase in rear-end collisions. Where they are installed incorrectly on arterial and collector streets, they can also cause unnecessary delay and increased fuel consumption.
Agenda Item No. 12 Page 8 of 12 CC Agenda 05-20-2024
Public Works Standard Operating Procedure No. 550.1
3 The decision to install a multi-way stop should be based on an engineering study with the following criteria:
1. GUIDELINES FOR INSTALLATION OF A MULTI-WAY STOP AT COLLECTOR OR
INDUSTRIAL STREET CLASSIFICATION INTERSECTIONS
Both the State and Federal governments publish guidelines for installation of multi-way stop controls. These guidelines are intended for use at non-local/local and collector/local classified intersections where traffic speeds, volume, and accident history are likely higher than local streets. For this policy, collector streets carry a traffic volume of greater than 6,000 vehicles per day. These guidelines are to be used by the City when conducting an engineering study for multi-way stop control at collector or industrial street classified intersections:
a. Where traffic control signals are justified, a multi-way stop can be an interim measure that can be installed quickly to control traffic while arrangements are being made to install a traffic signal.
b. Where there is a collision problem, as indicated by 5 or more reported crashes in a consecutive 12-month period over the previous 36 months that are susceptible to correction by a multi-way stop installation. Such collisions include right and left turn collisions as well as right angle collisions. Or, where the total number of reported accidents of a type susceptible to correction by a multi-way stop has averaged 3 or more collisions for the past 5 years.
c. Where the following minimum volumes are met:
• The vehicular volume entering the intersection from the major street approaches (total of both approaches) averages at least 300 vehicles per hour for any 8 hours of an average day; and,
• The unit volume entering the intersection from the minor street approaches (total of both approaches) averages at least 200 units per hour for the same 8 hours with an average delay to the minor street vehicular traffic of at least 30 seconds per vehicle during the highest hour; but,
• If the 85th percentile approach speed of the major street traffic exceeds 40 mph the minimum vehicular volume warrants are 70 percent of the above values (210 & 140, respectively).
d. Where no single criterion is satisfied, but where the first two volume criteria in subsection c) are satisfied to 80 percent of the minimum values (240 & 160 respectively).
e. Other criteria to be considered in the engineering study include the need to control left-turn conflicts, the need to control pedestrian/vehicle conflicts near locations that generate high pedestrian volumes, and sight distance restrictions.
Agenda Item No. 12 Page 9 of 12 CC Agenda 05-20-2024
Public Works Standard Operating Procedure No. 550.1
4 2. GUIDELINES FOR INSTALLATION OF COLLECTOR, AND LOCAL STREET
CLASSIFICATION INTERSECTIONS
Residential neighborhood streets pose a special case when considering the installation of a multi-way stop. Protecting the City’s neighborhood street environment is a primary goal. As such, residential neighborhood streets are intended to primarily serve lower traffic volumes with emphasis on access to individual residences, provide low noise levels, and provide a bicycle and pedestrian-friendly environment. Minimizing delay and congestion in a residential neighborhood is secondary to maintaining or creating a higher level of livability without sacrificing safety.
Typical traffic conditions on collector residential fronting streets need to provide the level necessary to meet State and Federal guidelines as stated in Section 2 above. However, the CA MUTCD in Section 2B.07 states, “Multi-way stop signs may be installed at an intersection of two residential neighborhood collector (through) streets of similar design and operating characteristics where multi-way stop control would improve traffic operational characteristics of the intersection. This, taken with the need to improve the safety and livability of residential neighborhoods, creates an opportunity to have different guidelines for these areas. Many local agencies have developed modified guidelines for neighborhood residential streets. A review of several of these modified guidelines led to the development of the following guidelines to be used by the City when conducting an engineering study for multi-way stop control at a local street intersection:
a. Both streets must have primarily residential or residential mixed-used frontage. b. AND, Where the legal posted speed limit of all of the approaches is equal or less than 25 mph.
c. AND, There are no traffic signals along either street within 1,000 feet or multi-way stop signs within 550 feet of the intersection.
AND, where one of the remaining is met:
d. Where a collision problem, as indicated by 3 or more reported crashes in a consecutive 12-month period over the previous 36 months that are susceptible to correction by multi-way stop installation. Such collisions include right and left turn collisions as well as right angle collisions.
e. OR, At a T-intersection, the total vehicle, bike, and pedestrian volume on the side street approach is regularly higher than the combined total of vehicles entering the intersection from the two-leg road.
f. OR, Where there at least three of the following conditions are met:
o A sight distance restriction where the visibility of oncoming traffic does not meet corner sight distance requirements due to unremovable visibility obstructions, such Agenda Item No. 12 Page 10 of 12 CC Agenda 05-20-2024
Public Works Standard Operating Procedure No. 550.1
5 as buildings, walls, large trees, or topography. Or where there is a sight distance restriction where the visibility of oncoming traffic does not meet stopping sight distance requirements unless parking is removed and the street near the intersection is deemed to have a demonstrated need for on-street parking. The need can be demonstrated through a parking utilization study where on-street parking where parking would be removed is utilized at least 75% during the peak period.
o The combined vehicle, bicycle, and pedestrian volume on each street approaching the intersection is at least 1,000 units per day on a normal day. o The intersection, following CA MUTCD 2B.07, Installation of a multi-way stop sign may be justified if there is a need to control vehicle/pedestrian conflicts near locations that generate high pedestrian volumes. This may include school-aged children, the elderly, or physically challenged pedestrians using the intersection or the presence of a facility such as a school, playground, park, civic center, fire station, etc.
o Where motorists on other approaches behave as if they expect to stop sign control on the uncontrolled approach based on surrounding roadway patterns or where unusual intersection geometrics may be confusing or unsafe for drivers, it has been determined that a multi-way stop would improve safety.
o Where there is a collision problem, as indicated by 5 or more in 24 months over the previous 36 months, that is susceptible to correction by a multi-way stop installation. Collisions susceptible to corrections will include, but not be limited to, all pedestrian and bicycle collisions.
If multi-way stop controls are installed using the above criteria, the City should conduct an evaluation of the operation and safety of the intersection a minimum of 6 months after the installation and 18 months after the installation using the minimum criteria established herein. The 18 month evaluation should allow for the inclusion of 12 months of collision history. Because of this evaluation need, a spot speed study should be conducted prior to the initial installation.
E. Removal of Multi-Way Stop Control at Minor Collector/Minor Collector, Minor Collector/Local or Local/Local Street Classification Intersections
1. Multi-way stop control should be considered for removal if any of the following guidelines are met:
a. OR, The number of collisions at the intersection for a consecutive 12-month period after the installation of the multi-way stop exceeds that which the intersection was experiencing for the consecutive 12-month period before the installation of the multi-way stop controls unless a traffic signal is programmed to be installed; Agenda Item No. 12 Page 11 of 12 CC Agenda 05-20-2024
Public Works Standard Operating Procedure No. 550.1
6 b. OR, Where the 85% speed of any of the approaches, as measured a minimum of 400 feet from the intersection and a minimum of 6 months following the multi-way stop installation, exceeds the 85% speed measured prior to the installation of the multi-way stop controls.
References
California Manual on Uniform Traffic Control Devices (CA MUTCD) Agenda Item No. 12 Page 12 of 12 CC Agenda 05-20-2024
DATE: May 20, 2024
TO: Honorable City Council
FROM: James Vega, City Manager
Lupe Acero, Finance Director
SUBJECT: FISCAL YEAR 2022-23 ANNUAL COMPREHENSIVE FINANCIAL
REPORT (ACFR)
RECOMMENDATION:
It is recommended that City Council receive and file the Fiscal Year 2022-23 Annual Comprehensive Financial Report.
BACKGROUND/ANALYSIS:
Government Accounting Standards Board (GASB), state law and City procedures require the completion of an independent audit known as the Comprehensive Annual Comprehensive Financial Report (ACFR). Annually, the ACFR is formally presented to the City Council in a public meeting. The purpose of the City’s ACFR is to provide relevant financial information to the City Council, citizens, current and future employees, grant entities, creditors, bond investors, rating agencies, and other interested parties. The ACFR also includes an opinion from a qualified independent accounting firm, The Pun Group, Accountants & Advisors, on the fairness of the City’s financial statement presentation in accordance with generally accepted accounting principles.
The annually audited financial reports are a testament to a city’s financial condition and how well it fiscally carried out its mission of providing public services to the community for the fiscal year. Moss, Levy & Hartzheim LLP, has conducted an independent audit of the financial statements of the City of Port Hueneme and the Port Hueneme Successor Agency for the fiscal year ended June 30, 2023 and has issued an Unqualified Opinion thereon. An Unqualified Opinion is the highest rating possible and means that the auditors found nothing in the City’s financial and bookkeeping practices that could preclude a fair representation of the City’s operations and financial condition for the fiscal year. Along with detailed reviews of the City’s financial transactions, the auditor also conducts a thorough evaluation of the agency’s accounting and internal control systems.
Agenda Item No. 13 Page 1 of 169 CC Agenda 05-20-2024
FY 2022-23 Annual Comprehensive Financial Report
May 20, 2024
The ACFR includes all funds of the City and is presented in three sections: Introductory, Financial and Statistical. The Introductory Section contains a letter of transmittal and directory of City Officials. The Financial Section contains the independent auditor’s report, management’s discussion and analysis (MD&A), the basic financial statements, notes to the financial statements and required supplementary information. The Statistical Section includes selected financial and demographic information, generally presented on a multiyear basis.
The ACFR was issued on May 15, 2024 as evidenced by the date on the transmittal letter and later published. The ACFR has been prepared by the staff of the Finance Department in conformity with Generally Accepted Accounting Principles (GAAP). The ACFR is made available to the public on the City’s website.
The Management’s Discussion and Analysis (MD&A) section of the ACFR provides a narrative overview of the City’s financial activities, and this information should be read in conjunction with the basic financial statements, and also the notes which accompany the basic financial statements to get an accurate overall representation of financial health.
MD&A includes the prior year and the current year financial health comparisons. The Notes to the Financial Statements help explain the financial statements by providing narrative information about the City’s significant accounting policies and detailed disclosure on key financial matters.
Government-Wide Financial Statements
The government–wide financial statements report information on all activities of the City except happenings where the City acts as a trustee for another agency, such as the Successor Agency. For the most part, transfers of funds between City entities and reserves, has been removed from these statements, and the statements only reflect events that resulted from activities between the City and non-City associations.
Governmental activities, which normally are supported by taxes and grant revenues, are reported separately from business-type activities, such as the Water Department, which instead rely to a significant extent on user fees and charges that come from receiving the service.
A major difference in the Government Wide Financial Statements in the ACFR the past few years is the Governmental Accounting Standards Board (GASB) No. 68 requirement for public agencies to disclose liability for pension obligations. GASB No. 68 does not require agencies to fund pension obligations; its purpose is to make existing obligations more transparent.
At June 30,2023, the total net position for governmental activities and business-type activities was $55,828,815 and $46,997,062 respectively for a total of $102,825,877. This represents a total increase of $13,963,026 versus prior fiscal year. The City’s total assets and deferred outflows of resources of $175,905,482 exceeded total liabilities and deferred inflows of resources of $73,079,605 by $102,825,877. The difference is primarily due to changes in the components of the net pension liability. Under the GASB 68, the annual Agenda Item No. 13 Page 2 of 169 CC Agenda 05-20-2024
FY 2022-23 Annual Comprehensive Financial Report
May 20, 2024
change in the net pension liability is recognized as Pension Expense or Deferred Inflows/Outflows of Resources, depending on the nature of the change.
Fund Financial Statements
The City’s Governmental Funds include the General Fund and Non- major Governmental Funds.
At June 30, 2022, the City’s Governmental Funds reported combined ending fund balances of $60,442,477 (Page 18 of ACFR). This represents an increase of $3,619,415 in comparison with the prior year fund balances.
The General Fund is the chief operating fund of the City. The General Fund balance at June 30, 2022 was $47,731,085, which represents an increase of $2,919,920 from the prior fiscal year.
There are five components or segregations of fund balance that were created by the Government Accounting Standards Board (GASB) organization. This organization regulates governmental accounting. The five components are Non-spendable Fund Balance, Restricted Fund Balance, Committed Fund Balance, Assigned Fund Balance, and Unassigned Fund Balance.
There are four of these components, or segregations, that the City of Port Hueneme currently utilizes which are:
• Non-spendable Fund Balance – Primarily notes receivable from PHWA • Restricted Fund Balance – Funds in the PARS Trust/Other Restricted Funds
• Committed Fund Balance – Reserves per Council approved Fiscal Policies • Unassigned Fund Balance – Funds available for appropriation The following Table illustrates the General Fund Balance Categories at June 30, 2023:
Agenda Item No. 13 Page 3 of 169 CC Agenda 05-20-2024
FY 2022-23 Annual Comprehensive Financial Report
May 20, 2024
Note: The Unassigned General Fund balance per the ACFR (Page 18) is $15,870,796.
This includes $1,164,511 in funds for designated use such as risk/fleet, RDA Bond Proceeds and Stormwater, which are now rolled into General Fund. Because these funds have specific use, they have been excluded from the fund balance leaving the General Unassigned Fund Balance at June 30, 2023 at $14,706,285. This unassigned fund balance is prior to the appropriations in fiscal year 2024 for CIP such as the $4,850,000 for Bubbling Springs Park.
Enterprise Funds:
Business-type activities, which are called Enterprise Funds, consists of the Water Operations Fund, Water Plant Operations Fund, Wastewater Operations Fund, and Solid Waste Operations Fund. The financial goal of the City’s business-type activities is to operate on a more or less “break-even” basis, without needing General Fund subsidies.
The Proprietary Fund Financials are illustrated on pages 22-31 of the ACFR. Following is a summary of the enterprise fund revenues and expenses in fiscal year 2023:
Agenda Item No. 13 Page 4 of 169 CC Agenda 05-20-2024
FY 2022-23 Annual Comprehensive Financial Report
May 20, 2024
The Enterprise Funds Net position includes Investment in Capital Assets and Unrestricted Funds as follows:
Capital Assets:
The City’s net investment in capital assets for Governmental and Enterprise Funds was $26,911,445 and $21,202,516 respectively. This includes Land, depreciable assets and leased assets (primarily vehicles). The schedule of Capital Assets is listed on page 51 of the ACFR.
Long Term Liabilities:
As of June 30, 2023, the City’s long- term liabilities were $59,175,898. This includes the Pension Obligation Bonds, Wastewater Revenue Bonds and two loans to Sterling Bank and State of California for the Engie renewable energy project. The remainder of the long term liabilities (Compensated absences, leases payable, subscription, OPEB and Pension ) are required accruals Governmental Accounting Standards.
Enterprise Fund Revenue Expense Net Income
Water Utility $ 6,996,995 $ 5,444,353 $1,552,642
Wastewater $ 3,629,987 $ 2,372,061 $1,257,926
Solid Waste $ 4,832,652 $ 2,995,193 $1,837,459
Water Plant $ 1,370,101 $ 775,386 $ 594,715
Totals $ 16,829,735 $11,586,993 $5,242,742
Description Water Utility Wastewater Utility Solid Waste Utility Water Plant Net investment in capital assets $ 3,799,167 $ 7,487,054 $ 3,623,145 $ - Unresticted $ 18,572,488 $ 6,806,628 $ 4,543,522 $ 429,473 Total Net Position $ 22,371,655 $ 14,293,682 $ 8,166,667 $ 429,473 Description Governmental Activities Business-Type Activities Total Pension Obligation Bonds $ 5,346,020 $ 1,640,415 $ 6,986,435 Series 2006D-1 Revenue Bond $ - $ 3,370,000 $ 3,370,000 Sterling Bank $ 455,637 $ 698,367 $ 1,154,004
State of California- Energy Resources $ 299,575 $ 459,166 $ 758,741 Compensated absences $ 1,009,926 $ 364,477 $ 1,374,403
Leases payable $ 494,341 $ 165,247 $ 659,588
Subscription liability $ 413,649 $ 856,326 $ 1,269,975
OPEB liability $ 3,022,509 $ 1,006,615 $ 4,029,124
Net pension liability $ 33,389,405 $ 6,183,223 $ 39,572,628 Total Long Term Liabilities $ 44,431,062 $ 14,743,836 $ 59,174,898 Agenda Item No. 13 Page 5 of 169 CC Agenda 05-20-2024
FY 2022-23 Annual Comprehensive Financial Report
May 20, 2024
In closing, the city is proud to have received an unqualified “clean” audit opinion. We would like to acknowledge the city auditors, Moss, Levy and Hartzheim LLP for their assistance with the audit; and the contribution of all the departments by providing data necessary to prepare the City’s FY 2022-23 ACFR.
FISCAL IMPACT:
No fiscal impact as this is a receive and file report.
ATTACHMENT:
A. 2022-23 Fiscal Year Annual Comprehensive Financial Report (ACFR) Agenda Item No. 13 Page 6 of 169 CC Agenda 05-20-2024
INTRODUCTt~RY SECTION
Attachment A
Agenda Item No. 13 Page 7 of 169 CC Agenda 05-20-2024
Agenda Item No. 13 Page 8 of 169 CC Agenda 05-20-2024
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City of Port Hueneme
Table of Contents —Continued
For the Fiscal Year Ended June 30, 2023
Page
Community Benefit Fund Special Revenue Fund ................................................................................................................... 98 Surplus Property Authority Special Revenue Fund ................................................................................................................. 99 Proposition 64 Public Health &Safety Grant Special Revenue Fund ................................................................................... 100 Pensïon Obligation Fund Debt Servïce Fund ........................................................................................................................ 1 O 1 Housing Successor Debt Service Fund .................................................................................................................................. 102 CapitalProjects Fund ............................................................................................................................................................ 103 Combining Statement of Net Position —Internal Service Funds ............................................................................................... 1 OS Combining Statement of Revenues, Expenses, and Changes in Net Position—Internal Service Funds .......................................................................................................................................... 106 Combining Statement of Cash Flows —Internal Service Funds ................................................................................................ 107 Schedule of Sources and Uses — Measure U ............................................................................................................................. 109
STATISTICAL SECTION
Financial Trends:
NetPosition by Component .................................................................................................................................................. 112 Changesin Net Position ........................................................................................................................................................ 114 Fund Balances —Governmental Funds .................................................................................................................................. 118 Changes in Fund Balances —Governmental Funds ............................................................................................................... 120 Revenue Capacity:
Assessed Value and Actual Value of Taxable Property ........................................................................................................ 122 Directand Overlapping Tax Rates ........................................................................................................................................ 123 PrincipalProperty Taxpayers ................................................................................................................................................ 124 PropertyTax Levies and Collections .................................................................................................................................... 125 Debt Capacity:
Ratioof Outstanding Debt by Type ....................................................................................................................................... 126 Ratio of General Bonded Debt Outstanding .......................................................................................................................... 127 Direct and Overlapping Governmental Activities Debt ........................................................................................................ 128 LegalDebt Margin Information ............................................................................................................................................ 129 Pledged Wastewater Revenue Coverage ............................................................................................................................... 130 Demographic and Economic Information:
Demographic and Economic Statistics .................................................................................................................................. 131 Operating Information:
Full-time and Part-time City Employees by Department ...................................................................................................... 132 Capital Asset Statistics by Function ...................................................................................................................................... 133 Wastewater Service Rates ..................................................................................................................................................... 134 ~
Agenda Item No. 13 Page 10 of 169 CC Agenda 05-20-2024
May 15, 2024
Honorable Mayor, City Council members, and the Residents of Port Hueneme:
I am pleased to present the Annual Comprehensive Financial Report (ACFR) of the City of Port Hueneme, California for the fiscal year ended June 30, 2023. The format and content of this ACFR complies with the principles and standards of accounting and financial reporting adopted by the Governmental Accounting Standards Board (GASB) and contains all information needed for readers to gain a reasonable understanding of City of Port Hueneme's financial affairs.
INTRODUCTION
This report was prepared by the City's Finance Department. City Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose.Because the cost of internal controls should not exceed the anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.
Moss, Levy & Hartzheim, LLP, a Certified Public Accountant firm selected by the City Council to perform the audit of the financial statements for the fiscal year ended June 30, 2023, has audited the City’s financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, the financial statements of the City of Port Hueneme for the fiscal year ended June 30, 2023 are fairly presented in conformity with GAAP. The auditors have issued an unqualified ("clean") opinion on the City's financial statements. The independent auditors' report is located at the front of the financial section of this report.
Management's discussion and analysis (MD&A) immediately follows the independent auditors' report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction withit.
CITY OF PORT HUENEME PROFILE
Port Hueneme (pronounced "Wy-nee'mee") is a seaside community in Ventura County, California.Port Hueneme is located 60 miles northwest of Los Angeles and 40 miles south of Santa Barbara. The City's name derives from a Chumash word (Wene'mu) that means "resting place". Today's Port Hueneme is iii
Agenda Item No. 13 Page 11 of 169 CC Agenda 05-20-2024
located halfway between two larger Chumash settlements, today's Malibu and Ventura. The first post office in the community was in Wynema. When Thomas R. Bard laid out thetown in 1872, he called it Hueneme. The name was changed to Port Hueneme after the Port of Hueneme was built in 1939.
Incorporated in 1948, Port Hueneme has a 5-member City Council which functions as the policy making governmental body. The five individuals serve staggered four-year terms in office, with the Mayor and Mayor Pro-Tern being selected by the City Council each year. City services are structured around six departments: City Administration, Community Development, Housing, Finance, Police, and Public Works.
The City Councilmembers also serve as the governing body of the following:
Port Hueneme Housing Authority
Surplus Property Authority
Port Hueneme Successor Agency
In addition, the City Council appoints the members of the following advisory Commissions andBoards:
Citizen Advisory Commission
Measure U Oversight Committee
The annual budget serves as the foundation for the City’s financial planning and control. The budget also contains detailed goals and objectives and financial projections for the departments and agencies that comprise the City’s governmental structure. The City reports on a fiscal year basis from July 1 to June 30. Throughout the year, the Finance Department monitors economic changes that may affect revenue streams, coordinates with department’s in identifying changing needs and demands, and presents budget adjustments to City Council as part of the mid-year review.
FINANCIAL OUTLOOK
As shown in the Annual Comprehensive Financial Report (ACFR), starting on page 18, the city ‘s overall revenue streams remained healthy in 2023. In the last quarter of the fiscal year, the city began to experience moderate declines in sales taxes resulting from a slowing down in consumer spending due to higher interest rates and pressures on disposable income. Food and Drugs, including cannabis related businesses started to see significant decreases in the last quarter of fiscal year 2023 as compared to the prior fiscal year.
In preparation for future economic challenges, the city will continue to monitor the current budget and develop a five-year financial projection for all city funds, covering all foreseeable elements of revenues and expenditures.
For capital projects, the city maintains a capital improvement plan which will be updated annually during the budget. This plan provides a long-term forecast of identified capital improvement projects and serves as a tool for management and City Council to plan, prioritize and monitor the city’s projects.
The city has recently established a General Fund reserve for capital projects. Following are the current relevant financial policies in place.
iv
Agenda Item No. 13 Page 12 of 169 CC Agenda 05-20-2024
RELEVANT FINANCIAL POLICIES
The city has established sound financial policies that will serve as guidelines to the City Council and staff for responsible and prudent decision making related to financial matters, and maintaining minimum and targeted reserves. The City Council has committed to maintaining General Fund reserve balances at appropriate levels to protect City assets, assure availability of cash to meet short-term obligations, address unforeseen events and avoid future debt.
The city has the following Committed General Fund Reserves:
1. Economic Emergency Reserve – The policy is to set aside a minimum reserve amount equal to six (6) months of General Fund expenditures, with a target reserve amount equal to eight (8) months of General Fund expenditures from current fiscal year adopted budget. The minimum and target General Fund balances are intended to be a prudent and conservative fiscal policy, which should contribute to the fiscal security of the City. The reserve levels can be changed or used for specific purposes at the discretion of the City Council. There is no maximum unreserved General Fund balance and any reasonable additional reserve above the minimum reserve would provide a greater level of fiscal security for the City.
2. Stability Reserve – The minimum target is set to 10% of the current year’s annual General Fund operating expenditures (minus one-time expenditures). The reserve will be maintained to mitigate financial and service delivery risk due to unexpected revenue shortfalls or unanticipated critical expenditures. It is intended to provide budgetary stability.
3. Risk Management- The policy is to set aside an amount equal to 50% of the annual property, liability and worker’s compensation insurance expenses from the current fiscal year’s adopted budget with a minimum target of no less than $500,000.
4. Capital Reserve – The purpose of this policy is to establish and maintain a long-term capital funding policy to ensure the needs of the city are met and provide a funding source for long-term, large value capital projects.
At the end of fiscal year 2022-23, the City’s General Fund Committed Reserves are as follows:
Committed Fund Balance Definition/Parameters Amount
Economic Emergency 6 months of operating expenses $13,246,592 Stability 10% of operating expenses $2,649,318
Risk Management 50% of estimated liability $950,000
Capital Reserve Maintain long-term capital funding $1,500,000 Total Committed Fund Balance $18,345,910
v
Agenda Item No. 13 Page 13 of 169 CC Agenda 05-20-2024
vi
Agenda Item No. 13 Page 14 of 169 CC Agenda 05-20-2024
City of Port Hueneme
CITY COUNCIL
Interim City Manager
Tony Stewart
Department Directors
Charles Peretz – Deputy City Manager
Lupe Acero – Finance Director
Tony Stewart - Community Development Director
Robert Albertson – Interim Police Chief
Mark Watkins – Interim Public Works Director
Gabby Basua – Housing & Facilities Director
Martha
McQueen-Legohn
Councilmember
Misty Perez
Mayor Pro Tem
Steven Gama
Councilmember
Laura Hernandez
Councilmember
Bobby Martinez
Mayor
Agenda Item No. 13 Page 15 of 169 CC Agenda 05-20-2024
FINANCIAL SECTION
Agenda Item No. 13 Page 16 of 169 CC Agenda 05-20-2024
Agenda Item No. 13 Page 17 of 169 CC Agenda 05-20-2024
Moss, Levy & Hartzheim LLP
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
City Council of the City of Port Hueneme
Port Hueneme, California
Opinions
We have audited the accompanying fmancial statements of the governmental activities, the business-type activities, the major funds, and the aggregate remaining fund information of the City of Port Hueneme, as of and far the fiscal year ended June 30, 2023, and the related notes to the fmancial statements, which collectively comprise the City of Port Hueneme's basic fmancial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective fmancial position of the governmental activities, the business-type activities, the major funds, and the aggregate remaining fund information of the City of Port Hueneme, as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof, for the fiscal year then ended in accordance with accounting prineiples generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Port Hueneme and to meet our other ethical responsibïlities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the fmancial 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 fmancial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Port Hueneme's ability to continue as a going concern for twelve months beyond the fmancial 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 fmancial statements as a whale are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the fmancial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Port Hueneme'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 fmancial statements. 1 2400 Professional Parkway, Suite 205 Santa Maria, CA 93455Te[805.925.2579 Fax 805.925.2147 m[hcpas.com Agenda Item No. 13
BEVERLY HILLS • Ct1LVER CITY •SANTA MARIA
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Port Hueneme'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 Informatïon
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the budgetary information for the General Fund, the schedule of proportionate share of net pension liability, the schedule of pension contributions, the schedule of changes in OPEB liability and related ratios, and the schedule of OPEB contributions, be presented to supplement the basic fmancial statements. Such information, although not a part of the basic fmancial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting far placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries about the basic fmancial statements, and other knowledge we obtained during our audit of the basic fmancial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the fmancial statements that collectively comprise the City of Port Hueneme's basic fmancial statements. The combining and individual nonmajor governmental fund fmancial statements, the combining Internal Service Fund fmancial statements, and the Schedule of Sources and Uses — Measure U are presented for purposes of additional analysis and are not a required part of the basïc fmancial 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 fmancial statements. The information has been subjected to the auditing procedures applied in the audit of the basic fmancial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic fmancial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America by us and other auditors. In our opinion, based on our audit and the report of the other auditors, the combining and individual nonmajor governmental fund financial statements, the combining Internal Service Fund fmancial statements, and the Schedule of Sources and Uses —Measure U 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 auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic fmancial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic fmancial 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 GovernmentAuditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 24, 2024, on our consideration of the City of Port Hueneme's internal control over fmancial reporting and on our tests of ïts compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over fmancial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over fmancial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over fmancial reporting and compliance. ,~~ ,
Santa Maria, California
Apri124, 2024
2 Agenda Item No. 13 Page 19 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Management's Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
As management of the City of Port Hueneme, we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2023. We encourage readers to consider the information presented here in conjunction with the City's financial statements, which begin on page 14.
OVERVIEW flF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City of Port Hueneme'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 contains other supplementary information in addition to the basic financial statements and required information.
Government-wide Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City's financial position, in a manner similar to that of aprivate-sector business. The Statement of Net Position presents information on all of the City's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the overall 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. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods, such as revenues pertaining to uncollected taxes and expenses pertaining to earned but unused vacation and sick leave.
The government-wide financial statements separate Governmental Activities that are principally supported by taxes and revenues from other agencies, from Business-type Activïties that are intended to recover all, or a significant portion of their costs, through user fees and charges. The governmental activities of the City include General Government, Public Safety, Streets and Highways, Community Development, Parks, Recreation and Social Services.
The City's Business-type activities include Water Utility, Wastewater Utility, Solid Waste Utility, Water Treatment Plant, and Housing Authority Funds.
The government-wide financial statements include not only the City, but also all legal entities for which the City is financially accountable. Accordingly, the financial information for the City's Surplus Property Authority (SPA) and the Port Hueneme Housing Authority are included as an integral part of the City's financial statements and reported as blended 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; the difference between the two is reported as net position. These assets include infrastructure and all assets previously included in the General Fixed Asset Account Group. The liabilities include all obligations previously reported in the General Long Term Debt Account Group. Evaluating increases or decreases in net position over time will serve as a useful indicator of whether the financial position of the City is improving or declining.
The statement of activities presents information on the net cost of each governmental function (activity) during the fiscal year. This statement also identifies the amount of general revenues needed to fully fund each governmental function.
3 Agenda Item No. 13 Page 20 of 169 CC Agenda 05-20-2024 City of Part Hueneme
Management's Discussion and Analysis (Continued)
For the Fiscal Year Ended June 30, 2023
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives.. The City, like other state and local governments, uses fund accounting to demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories:
Governmental Funds, Proprietary Funds, and Fiduciary Funds.
Governmental Funds (General Fund, Surplus Property Authorüy, and other non-governmental funds) are used to account for the same functions reported as governmental activities in the Government-wide financial statements.
However, unlike government-wide financial statements, fund financial statements focus on short-term inflows and outflows of spendable resources. These funds are reported using the modified accrual basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. This information may be useful in evaluating the City's short-term financing requirements.
The focus of the funds financial statements is narrower than that of the government-wide financial statements. The various balance sheets and the statement of revenues, expenditures, and changes in fund balances require a reconciliation to facilitate the comparison between fund statements and the government-wide statements. This reconciliation is required because the government-wide statements are prepared on the full accrual basis of accounting while the fund statements are prepared on the modified accrual basis of accounting. These reconciliations can be found on pages 19 and 21, immediately following the balance sheet and statement of revenues, expenditures, and changes in fund balances for governmental funds.
Proprietary Funds include enterprise funds and internal service funds. The City uses an enterprise fund to account for its Water Utility, Wastewater Utility, Solid Waste Utility, Housing Authority, and Water Treatment Plant, and internal service funds to account for internal services of fleet and equipment and risk administration. The proprietary fund statements provide information for the Water Operations, Wastewater Operations, Solid Waste Operations, Water Plant Operations, Housing Authority Operations, internal service fleet and equipment, and internal service risk administration operations.
Fiduciary Fund includes a fund that accounts for the balances and transactions of the Successor Agency to the Port Hueneme Redevelopment Agency Private-Purpose Trust Fund.
Notes to the Financial Statements provide additional information that is essential to the reader for a full understanding of the data provided in the government-wide and fund financial statements.
Required Supplementary Information is presented concerning the City's General Fund budgetary compliance and the City's progress in funding its obligation to provide pension and other post-employment benefits.
Other Supplementary Information connects the combined statements referred to earlier with non-major governmental funds and internal service funds and is presented immediately fallowing the notes. 0 Agenda Item No. 13 Page 21 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Management's Discussion and Analysis {Continued)
For the Fiscal Year Ended June 30, 2023
FINANCIAL HIGHLIGHTS
Government Wide Financials
• Governmental activities posted an increase in the total net position of $7,176,777 while the business-type activities increased by $6,020,779 for an overall increase of $13,197,556. The increase is primarily due to increases in cash and investments of $4,043,035 and capital outlay and pension costs recognition which increased governmental activities by $5,246,000.
• The City's governmental wïde-assets exceeded liabilities by $55,828,815 at the close of the fiscal year ending June 30, 2023.
• Total net position for government-wide is $102,825,877 as compared to $88,817,397 in fiscal year 2022.
FINANCIAL ANALYSIS OF THE CITY AS A WHOLE
Government-wide Statement of Net Position
Governmental Business-Type Total Change Percent
2023 2022 2023 2022 2023 2022
Assets
Cash and investments $ 53,677,257 $ 47,517,871 $ 41,187,355 $ 43,303,70b $ 94,864,612 $ 90,821,577 $ 4,043,035 4.45% Other assets 15,934,360 16,651,387 (6,561,380) (2,522,278) 9,372,980 14,129,109 (4,756,129) -33.66% Capital and leased assets 26,960,389 2b,594,916 26,999,253 17,349,284 53,959,642 43,944,200 10,015,442 22.79% Deferred outflows of
resources 15,057,228 6,165,862 2,651,020 1,694,054 17,708,248 7,854,916 9,848,332 125.30% Total assets and deferred
outflows of resources 111,629,234 96,930,036 64,276,248 59,824,766 175,905,482 156,754,802 19,150,680 12.22% Liabilities
Other liabilities 8,519,292 6,386,261 1,761,066 2,130,121 10,280,358 8,516,382 1,763,976 20.71% Long-term liabilities 43,312,704 27,522,330 14,180,581 11,854,260 57,493,285 39,376,590 18,116,695 46.01% Deferred inflows of resources 3,968,423 14,073,127 1,337,539 5,971,306 5,305,962 20,044,433 (14,738,471) -73.53% Total liabilities and
Deferred inflows of resources 55,800,419 47,981,718 17,279,186 19,955,687 73,079,605 67,937,405 5,142,200 7.57% Net Position
Net investment in
capital assets 25,248,243 25,349,788 15,b53,410 13,312,631 40,901,653 38,662,419 2,239,234 5.79% Restricted 14,925,215 13,987,552 63,473 1,224,259 14,988,688 15,211,811 (223,123) -1.47% Unrestricted 15,655,357 9,656,432 31,280,179 25,332,189 46,935,536 34,988,621 11,94b,915 34.15% Total net position $ 55,828,815 $ 48,993,772 $ 46,997,062 $ 39,869,079 $ 102,825,877 $ 88,862,851 $ 13,963,026 15.71% 5 Agenda Item No. 13 Page 22 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Management's Discussion and Analysis (Continued)
For the Fiscal Year Ended June 30, 2023
FINANCIAL ANALYSIS OF THE CITY AS A WHOLE — (Continuedl Of the City-wide total assets and deferred outflows of resources of $175,905,482, 15% are other assets and deferred outflows of resources, and 27.4% reflects cash and investment in capital assets (i.e., land, buildings, machinery, equipment, and infrastructure), less any related debt used to acquire those assets that are still outstanding. The Cïty uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending.
Cash and investments increased by $4,043,03 b and net capital assets went up $10,015,442.
Total liabilities and deferred inflows of resources are $73,079,605 at June 30, 2023, an increase of $5,142,200 as compared to prior fiscal year.
Govermment-wide Statement of Activities
Governmental Business-Type Total
2023 2022 2023 2022 2023 2022 Change Percent
Revenues
Program revenues:
Charges for services $ 6,852,316 $ 5,425,796 $ 17,553,562 $ 19,175,216 $ 24,405,878 $ 24,601,012 $ (195,134) -0.8% Operating contributions &grants 2,355,706 1,380,994 53,056 18,500 2,408,762 1,399,494 1,009,268 72.1 Capital contributions &grants 1,075,195 - 4,508,688 3,536,435 5,583,883 3,536,935 2,046,948 100.0% General revenues:
Property taxes 3,144,238 3,644,709 - - 3,144,238 3,644,709 (500,471) -13.7% Sales taxes 7,781,027 7,106,678 - - 7,781,027 7,106,678 674,349 9.5% Other taxes and fees 7,137,676 9,515,392 - - 7,137,676 9,515,392 (2,377,716) -25.0% Total revenues 28,346,158 27,073,569 22,115,306 22,730,651 50,461,464 49,804,220 657,244 1.3% Program expenses
General government 5,017,701 8,989,963 - - 5,017,701 8,989,963 (3,972,262) -44.2% Public safety 11,071,147 9,522,717 - - 11,071,147 9,522,717 1,548,430 16.3% Public works 3,415,862 2,291,966 - - 3,415,862 2,291,966 1,123,896 49.0% Recreationandhumanservices 968,171 2,119,063 - - 968,171 2,119,063 (1,150,892) -54.3% Community development 2,393,401 2,524,300 - - 2,393,401 2,524,300 (130,899) -5.2% Interest andfiscal charges 4,954 381,162 - - 4,954 381,162 (376,208) -98.7% Water utility - - 5,482,477 5,762,237 5,482,477 5,762,237 (279,760} -4.9% Wastewater utility - - 2,402,841 3,515,315 2,402,841 3,515,315 (l,1í2,474) -31.6% Solid waste utility - - 2,739,891 4,526,480 2,739,891 4,526,480 (1,78b,589) -39.5% Housing Authority - - 4,503,108 5,218,032 4,503,108 5,218,032 (714,924) -13.7% Water plant - - 599,664 1,247,800 599,664 1,247,800 (648,136} -51.9% Total Expenses 22,871,236 25,829,171 15,727,981 20,269,864 38,599,217 46,099,035 (7,449,818) -16.3% Increase (decrease)in net
position 5,474,922 1,244,398 6,387,325 2,460,787 11,862,247 3,705,185 8,157,062 220.2% Transfers 1,085,388 1,738,355 (1,085,388) (1,738,355) - - - - Investment easrnings 616,467 962,615 718,842 151,459 1,335,309 I,I 14,074 221,235 19.9% Change in net position 7,176,777 3,945,368 6,020,779 873,891 13,197,556 4,819,259 8,378,297 173.9% Net position, beginning, as restated (Note 16) 48,652,038 45,002,950 40,976,283 38,995,188 89,628,321 83,998,138 5,630,183 6.7% Net position, ending $ 55,828,815 $ 48,948,318 $ 46,997,062 $ 39,869,079 $ 102,825,877 $ 88,817,397 $ 14,008,480 15.8% Agenda Item No. 13 Page 23 of 169 ~ CC Agenda 05-20-2024 City of Port Hueneme
Management's Discussion and Analysis (Continued)
For the Fiscal Year Ended June 30, 2023
FINANCIAL ANALYSIS OF THE CITY AS A WHOLE — {Continued} • Government wide revenues for the fiscal year were $50,461,464 plus investment earnings of $1,335,309 resulted in total revenues for the governmental and business-type activities of $51,796,773 an increase of $878,479 or
1.7% higher than the prior fiscal year.
• Government wide expenditures were $38,599,217, a decrease of $(7,499,818} or (16,3)% lower versus prior fiscal year.
Governmental Funds -The focus of the City's governmental funds is to provide information on the near-term inflows, outflows, and balances of resources that are available for spending. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.
The fund financial statements include separate columns, by fund type, for all major governmental funds of the City.
All non-major governmental funds are consolidated into a single column labelled "Nonmajor Governmental Funds".
The details of these funds are included in the combining and Individual Fund Statements and Schedules located in the Financial Section of this Report.
At June 30, 2023, the City's governmental funds reported combined ending fund balances of $b9,758,632 as follows:
• $11,300,556 is non-spendable consisting of advance, loans receivable, and prepaid expenses. • $14,925,215 is restricted primarily for Housing and Community Development projects. • $18,345,910 is committed for Economic, Stability, Risk and Capital Reserves. • $15,870,796 is unassigned, which is available to meet the City's minimum and targeted reserves.
Agenda Item No. 13 Page 24 of 169
7 CC Agenda 05-20-2024
Use of money and
7%
Intergovernmental
10%
Charges for services
11%
Fines, forfeihuesxand per
3%
es
Liceli.~l,.~ lUlll í.!\.L11111.7
_~ ~~O
City of Port Hueneme
Management's Discussion and Analysis (Continued)
For the Fiscal Year Ended June 30, 2023
Governmental Revenues and Expenditures:
Governmental Revenues and expenditures were $28,441,694 and $28,938,668 respectively. Expenditures exceeded revenues primarily due to the one-time expenditures í$750k for the purchase of 140 Pleasant Valley Rd. and $385k Grant payment to the Library.)
The following graph shows the Revenue Categories. Taxes represent 58% of the revenues or $16,509,445 of the $28,441,694.
Miscellaneous
8°!0
Total Governmental fund expenditures for the fiscal year were $28,938,668. The following shows a comparison of governmental fund expenditures by category.
Agenda Item No. 13 Page 25 of 169
8 CC Agenda 05-20-2024
City of Part Hueneme
Management's Discussion and Analysis (Continued)
For the Fiscal Year Ended June 30, 2023
Capital Outlay
16%
Interest and fiscal
charges
3%
Community Development
8%
Recreation and t
human services
2%
Public Works
10%
=~;~,x:,~ ~ General
Government
24%
Public Safety
38%
Business-Type Activities
The City operates five business-type activities: water utility, wastewater utility, solid waste utility, water treatment plant, and a housing authority. Total operating revenues and expenses for fiscal year ended June 30, 2023 were $17,553,562 and $14,701,178 respectively. Business-type activities increased the City's net position by $6,020,779.
Water Utility: Total operating revenues were $6,996,995 and total operating expenses were $4,647,839 for a change in net position of $1,552,642. The net position at the end of the fiscal year was $22,371,655.
Wastewater Operations: Total operating revenues were $3,629,987 and total operating expenses were $2,247,707 for a change in net position change of $1,257,926. The net position at the end of the fiscal year was $14,293,682.
Solid Waste Operations: Total operating revenues were $4,832,652 and total operating expenses were $2,703,194 for a change in net position of $1,837,459. The net position at the end of the fiscal year was 8,166,667.
Water Plant Operations: Total operating revenues were $1,370,101 and the total operating expenses were $599,664 for a change in net position of $594,715. The net position at the end of the fiscal year was $429,473.
Housing Authority Operations: Total operating revenues were $723,827; non-operating net revenues were $4,658,662. The operating expenses were $4,502,774. The housing authority change in net position was $778,037. The net position at the end of the fiscal year was $1,735,585.
The General Fund is the chief operating fund of the City. At the end of the fiscal year, the total General Fund balance was $47,731,085.
Non-Spendable - $11,299,875 -Representing the balance of various Promissory Notes to other funds Restricted - $2,214,504- Represents the balance in the PARS Trust.
Agenda Item No. 13 Page 26 of 169
,~ CC Agenda 05-20-2024
City of Port Hueneme
Management's Discussion and Analysïs (Contïnued)
For the Fiscal Year Ended June 30, 2023
Committed fund balance - $18,345,910 represents the balances in the Reserves per City Council Reserve Policies:
- Economic Emergency Reserve - $13,246,592
- Stability Reserve - $2,649,318
- Risk Management -$950,000
- Capital Improvement Projects - $1,500,000
Unassigned Balance - $15,870,796. The unassigned fund balance allows the City to address financial uncertainties by setting fiscal reserve policies. The policy's policies are as follows:
Economic Emergency Reserve -To set aside a minimum reserve amount equal to six (6) months of General Fund expenditures, with a target reserve amount equal to eight (8) months of General Fund expenditures from current fiscal year adopted budget. The purpose is to sustain general fund operations in case of a public emergency such as a natural disaster or other unforeseen catastrophic event.
Stability Reserve — To set aside 10% of annual General Fund budgeted operating expenditures. The purpose is to mitigate financial and service delivery risk due to unexpected revenue shortfalls or unanticipated critical expenses. This reserve can provide budgetary stabilization.
RiskManaegment— To set aside an amount equal to 50% of annual property, liability, and worker's compensation insurance. The Risk Management funds are utilized to set aside funds to cover unanticipated insurance costs that exceed the regularly budgeted amaunt.
Capital Reserve - To establish and maintain along-term capital fund to provide a funding source for long-term, large value capital purchases and projects. The reserve will be funded annually through planned appropriations approved by Council.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City's investment in capital assets for its governmental and business-type activities amounted to $48,113,961 (net of accumulated depreciation} for the fiscal year ended June 30, 2023. This investment in capital assets includes land, infrastructure, buildings and improvements, and equipment, Agenda Item No. 13 Page 27 of 169
10 CC Agenda 05-20-2024
City of Port Hueneme
Management's Discussion and Analysis (Continued)
For the Fiscal Year Ended June 30, 2023
Table 3 - Capital Assets
Governmental Business-type Total
Non-depreciable assets 2023 2022 2023 2022 2023 2022
Land $ 6,531,290 $ 5,779,175 $ 2,245,911 $ 2,245,911 $ 8,777,201 $ 8,025,086 Construction in progress 2,547,459 5,237,760 975,218 365,630 3,522,677 5,603,390 Total non-depreciable assets 9,078,749 11,016,935 3,221,129 2,611,541 12,299,878 13,628,476 Depreciable assets (net):
Buildings, structures, and
improvements 9,904,222 8,574,737 3,728,656 670,275 13,632,878 9,245,012 Office equipments 438,99b 50,744 - - 438,996 50.,744
Mobile equipments 214,794 276,02b - - 214,794 276,026
Other equipments 310,280 232,215 5,144,364 4,871,760 5,454,644 5,103,975 Infrastructure 6,125,367 5,884,502 8,267,636 8,498,242 14,393,003 14,382,744 Total depreciable assets 16,993,659 15,018,224 17,140,656 14,040,277 34,134,315 29,058,501 Total assets $ 26,072,408 $ 26,035,159 $20,361,785 $16,651,818 $46,434,193 $ 42,686,977 Additional information on the City of Port Hueneme's capital assets can be found in note 7 on page 55 of this report.
Long-term Liabilities
On April 1, 2007, the City issued $10.7 million ïn Pension Obligation Bonds (POB). The proceeds of the sale, together with available monies, were used for the funding of the City's Unfunded Pension Liability, which is the gap between the amount of available funds and necessary funds to pay City pension benefits earned by eligible current and former City employees. The balance of the Pension Obligation Bonds as of 6-30-2023 is $6,986,435.
On October 1, 2006, the City's Wastewater enterprise fund issued $5,270,000 in California Statewide Communities Development Authority {CSCDA) Wastewater Revenue Series 2007D-1 Bonds. The purpose of the bond proceeds was to construct approximately 5,000 lineal feet of new gravity lines and associated manholes, metering stations, and decommissioning of lift stations and other wastewater system capital improvements. The balance of the Revenue Bonds at b-30-2023 is $3,370,000.
In 2019, the City issued loans to finance the energy conservation project as follows:
On December 3, 2019, the City entered into a loan agreement with the California Energy Resources Conservation and Development Commission in the amount of $840,272. The loan was used to implement energy efficient and renewable energy projects. The loan balance as of June 30, 2023 is $758,741.
On December 5, 2019, the City entered into an equipment lease purchase agreement in the amount of $1,240,068 with Sterling National Bank to implement energy conservation measures. The balance of the Equipment lease agreement at 6-30-23 is $1,154,004.
Agenda Item No. 13 Page 28 of 169
11 CC Agenda 05-20-2024
City of Port Hueneme
Management's Discussion and Analysis (Continued)
For the Fiscal Year Ended June 30, 2023
Table 4 —Lang-term Liabilitïes
Governmental Business-type Total
2023 2022 2023 2022 2023 2022
Pension Obligation Bonds
Series 2006 D-1 Revenue Bonds
Equipment Lease
ECA Loan Agreement
Leases Payable
Subscrïption Liability
Total
$ 5,346,020 $5,517,239 1,640,415 $1,692,953 $ 6,986,435 $ 7,210,192 - - 3,370,000 3,525,000 3,370,000 3,525,000
455,637 1,184,740 698,367 - 1,154,004 1,184,740
299,575 800,838 459,166 - 758,741 800,838
494,341 500,443 165,247 186,244 659,588 686,687
413,649 - 856,326 - 1,269,975 -
$ 7,009,222 $8,003,260 $7,189,521 $5,404,197 $14,198,743 $13,407,457 Additional information on the City of Port Hueneme's long-term liabilities can be found in notes 8 and 9 on pages 56- 60 of this report.
Economic Factors and Next Year's Budget
The City adopts a biennial budget. The two-year budget demonstrates a commitment to operate the City over the long term with the goal of avoiding deficit spending while pursuing a balanced budget. The fiscal year 2023-24 total City and related entities adopted budget is $62,905,804.
The City's General Fund is the primary fund that accounts for all resources except for those where a separate fund is necessary for legal or administrative purposes. The General Fund includes the City's general-purpose services that relate to public safety, public works, community development, finance and administration. The fiscal year 2023-24 General Fund adopted budget are total financing sources of $27,176,196 and total projected appropriations of $27,092,482 for a surplus of $83,354.
The City's financial position remains financially sound, and it reaffirms its commitment to sound and conservative financial practices into the future.
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the City's finances. Inquiries regarding this information should be directed to LupeAcero,Finance Director, City of Port Hueneme, at (805) 986-6554. Formal requests may be submitted to LupeAcero,Finance Director, City of Port Hueneme, 250 N. Ventura Road, Port Hueneme, California 93041.
12 Agenda Item No. 13 Page 29 of 169 CC Agenda 05-20-2024
TIIIS PAGE IS INTENTIDNALL Y LEFT BLANK
Agenda Item No. 13 Page 30 of 169 CC Agenda 05-20-2024
Agenda Item No. 13 Page 31 of 169 CC Agenda 05-20-2024
GOVERNMENT-WIDE
FINANCIAL STATEMENTS
Agenda Item No. 13 Page 32 of 169 CC Agenda 05-20-2024
City of Port Hueneme
Statement of Net Position
June 30, 2023
Governmental Business-Type
Activities Activities Tatal
$ 51,462,753 $ 39,óO4,124 $ 91,066,877
3,302,816 3,384,422 ó,b87,238
9,603 4,b43 14,246
4,178 í,30b,178 1,310,356
8,808 - 8,808
1,249,744 - 1,249,744
11,444 91,144 102,588
11,347,767 (11,347,767) -
67,397,113 33,042,744 100,439,857
2,214,504 1,583,231 3,797,735
48,944 420,509 469,453
5,376,228 5,376,228
9,078,749 3,221,129 12,299,878
17,832,b9ó 17,981,387 35,814,083
29,174,893 28,582,484 57,757,377
ASSETS
Current assets
Cash and investments
Receivables, net
Prepaid expenses
Due from other governments
Interest receivable
Loans receivable
Lease receivables
Internal balances
Total current assets
Noncurrent assets
Cash and investments with fiscal agent
Lease receivable
Investment in j Dint venture
Capital assets and leased assets
Nondepreciable or amortizable
Depreciable and amortizable, net
Total noncurrent assets
Total assets 96,572,006 61,625,228 158,197,234
DEFERRED OUTFLOWS OF RESOURCES
Related to pensions 14,815,331 2,570,458 17,385,789
Related to OPEB 241,897 80,Só2 322,459
Total deferred outflows of resources $ 15,057,228 $ 2,651,020 $ 17,708,248 The notes to basic financial statements are an integral part of this statement 14 Agenda Item No. 13 Page 33 of 169 CC Agenda 05-20-2024 City of Part Hueneme
Statement of Net Position
June 30, 2023
Governmental Business-Type
Activities Activities Total
LIABILITIES
Current liabilities:
Accounts payable
Salaries and benefits payable
Accrued interest payable
Service deposits
Unearned revenue
Compensated absences
Lease payable, current
Subscription liabilities, current
Long-term debt
Total current liabilities
Noncurrent liabilities:
Compensated absences
Long-term debt
Leases payable
Subscription liabilities
Net pension liability
Net OPEB liability
Total noncurrent liabilities
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Related to leases
Related to pensions
Related to OPEB
Total deferred inflows of resources
NET POSITION
Net investment in capital assets
Restricted for:
Housing
Public works
Community development
PARS
Unrestricted
Total net position
$ 2,658,094 $ 842,237 $
238,512 91,585
43,097
319,337 215,657
4,184,991 5,235
696,833 239,326
137,062 53,317
63,857 -
220,606 270,612
8,519,292 1,761,066
313,093 125,151 438,244
5,880,626 5,897,336 11,777,962
357,279 111,930 469,209
349,792 856,326 1,206,118
33,389,405 6,183,223 39,572,b28
3,022,509 1,006,615 4,029,124
43,312,704 14,180,581 57,493,285
51,831,996 15,941,647 67,773,643
59,790 482,969 542,759
3,779,832 811,675 4,591,507
128,801 42,895 171,696
3,968,423 1,337,539 5,305,962
25,248,243 15,653,410 40,901,653
9,870,413 63,473 9,933,886
3,578,222 - 3,578,222
511,820 - 511,820
2,214,504 - 2,214,504
14,405,613 31,280,179 45,685,792
55,828,815 46,997,062 102,825,877
3,500,331
330,097
43,097
534,994
4,190,226
936,159
190,379
63,857
491,218
10,280,358
The notes to basic financial statements are an integral part of this statement 15 Agenda Item No. 13 Page 34 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Statement of Activities
For the Fiscal Year Ended June 30, 2023
Program Revenues
Operating Operating Total
Charges for Grants and Grants and Program
Expenses Services Contributions Contributions Revenues
Governmental activities:
General government $ 5,017,701 $ 223,725 $ 2,046,105 $ - $ 2,269,830 Public safety 11,071,147 1,015,188 177,807 - 1,192,995
Public works 3,415,862 3,953,752 - 1,075,195 5,028,947
Recreation and human services 968,171 455,638 14,432 - 470,070 Community development 2,393,401 1,204,013 117,362 - 1,321,375 Interest and fiscal charges 4,954 - - - -
Total governmental activities 22,871,236 6,852,316 2,355,706 1,075,195 10,283,217 Business-type activities:
Water utility 5,482,477 6,996,995 - - 6,996,995
Wastewater utility 2,402,841 3,629,987 - - 3,629,987
Solid waste utility 2,739,891 4,832,652 53,056 - 4,885,708 Housing authority 4,503,108 723,827 - 4,508,&88 5,232,515 Water plant 599,664 1,370,101 - - 1,370,101
Total business-type activities 15,727,981 17,553,562 53,056 4,508,688 22,115,306 Total primary government $ 38,599,217 $ 24,405,878 $ 2,408,762 $ 5,583,883 $ 32,398,523 The notes to basic financial statements are an integral part of this statement 16 Agenda Item No. 13 Page 35 of 169 CC Agenda 05-20-2024 City of Part Hueneme
Statement of Activities
For the Fïscal 3~ear Ended June 30, 2023
Net (Expense) Revenue and
Changes ïn Net Position
Governmental activities:
General government
Public safety
Public works
Recreation and human services
Community development
Interest and fiscal charges
Total governmental activities
Business-type activities:
Water utility
Wastewater utility
Solid waste utility
Housing authority
Water plant
Total business-type activities
Total primary government
General revenues and transfers:
General Revenues
Taxes:
Property taxes
Sales taxes
Utility users taxes
Franchise taxes
Transient occupancy taxes
Other taxes
Vehicle license fees, unrestricted
Investment income
Other
Transfers and capital contributions
Total general revenues and transfers
Change in net position
Net posïtion -beginning of fiscal year
Prior-period adjustments
Net position -beginning of fiscal year, restated
Net position -end of fiscal year
Goverrunental Business-Type
Activities Activities Total
$ (2,747,871) $ - $ (2,747,871)
(9,878,152) - (9,878,152)
1,613,085 - 1,613,085
(498,101) - (498,101)
(1,072,02b) - (1,072,026)
{4,954) - (4,954)
(12,588,019) - (12,588,019}
- 1,514,5i 8 1,514,518
- 1,227,146 1,227,146
- 2,145,817 2,145,817
- 729,407 729,407
- 770,437 770,437
- 6,387,325 6,387,325
(17 ïRR (11 Al h ~R7 ~~ï (f ~fi(1 X941
3,144,238 - 3,144,238
7,781,027 - 7,781,027
1,229,142 - 1,229,142
442,723 - 442,723
763,053 - 763,053
2,139,987 - 2,139,987
2,562,004 - 2,562,004
616,467 718,842 1,335,309
767 - 767
1,085,388 (1,085,388} -
19,764,796 (366,546) 19,398,250
7,176,777 6,020,779 13,197,556
48,948,318 39,869,079 88,817,397
(296,280) 1,107,204 810,924
48,652,038 40,976,283 89,628,321
$ 55,828,815 $ 46,997,062 $ 102,825,877
17 Agenda Item No. 13 Page 36 of 169 CC Agenda 05-20-2024 Agenda Item No. 13 Page 37 of 169 CC Agenda 05-20-2024
GOVERNMENTAL FUND
FINANCIAL STATEMENTS
Agenda Item No. 13 Page 38 of 169 CC Agenda 05-20-2024
City of Part Hueneme
Balance Sheet
Governmental Funds
June 30, 2023
ASSETS
Cash and investments
Cash and investments with fiscal agent
Receivables:
Accounts receivable
Due from other governments
Interest
Loans
Lease Receivables
Due from other funds
Prepaid items
Advances receivable
Total assets
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities:
Accounts payable
Salaries and benefits payable
Unearned revenue
Deposits payable
Due to other funds
Total liabilities
Deferred Inflows of Resources:
Lease
Unavailable revenues
Total deferred inflows of resources
Fund Balances:
Nonspendable
Restricted
Committed
Unassigned
Total fund balances
Total liabilities, deferred inflows of resources,
and fund balances
Major Nonmaj or Total
Fund Governmental Governmental
General Fund Funds Funds
$ 38,724,970 $ 12,737,783 $ 51,462,753
2,214,504 - 2,214,504
3,108,748 194,068 3,302,816
4,178 - 4,178
8,808 - 8,808
560,241 689,503 1,249,744
60,388 - 60,388
154,635 250 154,885
8,922 681 9,603
11,290,953 - 11,290,953
$ 56,136,347 $ 13,622,285 $ 69,758,632
$ 2,559,234 $ 98,860 $ 2,658,094
236,550 1,962 238,512
4,184,991 - 4,184,991
276,711 42,626 319,337
20,129 77,942 98,071
7,277,615 221,390 7,499,005
59,790 - 59,790
1,067,857 689,503 1,757,360
1,127,647 689,503 1,817,150
11,299,875 681 11,300,556
2,214,504 12,710,711 14,925,215
18,345,910 - 18,345,910
15,870,796 - 15,870,796
47,731,085 12,711,392 60,442,477
$ 56,136,347 $ 13,622,285 $ 69,758,632
The notes to basic financial statements are an integral part of this statement 18 Agenda Item No. 13 Page 39 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2023
Total fund balances -governmental funds $ 60,442,477
Amounts reported far governmental activities in the statement of net position are different because:
In governmental funds, only current assets are reported. In the statement of net position, all assets are reported, including capital assets and accumulated depreciation:
Capital assets at historical cast
Accumulated depreciation
Right-of--use assets
Accumulated amortization
Net
In governmental funds, revenue is recognized only to the extent that is available, meaning it will be collected soon enough after the end of the period to finance expenditures of that period. Receivables for revenues that are earned but unavailable are deferred until the period in which the revenues become available. In the governmentwide statements, revenue is recognized when earned, regardless of availability.
The amount of unavailable revenues that were deferred in governmental funds, but are recognized in the government-wide statements, is:
In governmental funds, deferred outflows and inflows of resources relating to pensions and OPEB are not reported because they are applicable to future periods.
In the statement of net position, deferred outflows and inflows of resources relating to pensions and OPEB are reported.
Deferred outflow of resources relating to pensions
Deferred outflow of resources relating to OPEB
Deferred inflow of resources relating to pensions
Deferred inflow of resources relating to OPEB
Total
In governmental funds, only current liabilities are reported. In the statement of net position, all liabilities, including long-term liabilities are reported. Long-term liabilities relating to governmental activities consist of:
Pension Obligation Bonds
Equipment lease purchase
ECA loan agreement
Leases payable
Subscription liability
Net pension liability
Net OPEB liability
Compensated absences payable
Total
Total net position -governmental activíties
The notes to basic financial statements are an integral part of this statement 19 $ 56,223,373
(30,150,965)
1,302,166
(463,129)
26,911,445
1,757,360
14,815,331
241,897
(3,779,832)
(128,801)
11,148,595
5,346,020
455,637
299,575
494,341
413,649
33,389,405
3,022,509
1,009,926
(44,431,062)
$ 55,828,815
Agenda Item No. 13 Page 40 of 169 CC Agenda 05-20-2024
City of Port Hueneme
Statement of Revenue, Expenditures, and Changes in Fund Balance Governmental Funds
For the Fiscal Year Ended June 30, 2023
Major Nonmaj or Total
Fund Governmental Governmental
General Fund Funds Funds
REVENUES
Taxes $ 16,028,679 $ 480,766 $ 16,509,445
Licenses and permits 788,987 - 788,987
Fines, forfeitures, and penalties 722,431 14,400 736,831 Charges for services 3,199,443 - 3,199,443
Intergovernmental 1,686,702 1,278,425 2,965,127
Use of money and property 1,475,512 551,410 2,026,922
Miscellaneous 2,182,970 31,969 2,214,939
Total revenues 26,084,724 2,356,970 28,441,694
EXPENDITURES
Current:
General government 6,732,336 122,209 6,854,545
Public safety 10,888,513 - 10,888,513
Public works 2,413,644 366,286 2,779,930
Recreation and human services 658,994 240 659,234
Community development 2,144,999 205,397 2,350,396
Capital outlay 3,295,003 1,276,184 4,571,187
Debt service:
Principal 778,182 3,002 781,184
Interest and fiscal charges 49,334 4,345 53,679
Total expenditures 26,961,005 1,977,663 28,938,668
Excess of revenues over (under) expenditures (876,281) 379,307 (496,974}
OTHER FINANCING SOURCES (USES)
Transfers in 3,469,193 1,130,487 4,599,680
Transfers out (354,717) (810,299) (1,165,016)
Proceeds from SBITA and leases 681,725 - 681,725
Total other financing sources (uses) 3,796,201 320,188 4,116,3 89 Net change in fund balances 2,919,920 699,495 3,619,415
FUND BALANCES
Fund balances, beginning of fiscal year 45,053,879 12,011,897 57,065,776 Prior-period adjustment (242,714) - (242,714)
Beginning of fiscal year, restated 44,811,165 12,011,897 56,823,062 Fund balances, end of fiscal year $ 47,731,085 $ 12,711,392 $ 60,442,477 The notes to basic financial statements are an integral part of this statement 20 Agenda Item No. 13 Page 41 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position For the Fiscal Year Ended June 30, 2023
Net change in fund balances -governmental funds $ 3,619,415 Amounts reported for governmental activities in the statement of activities are different because:
In governmental funds, capital outlays are reported as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense.
This is the amount by which additions to capital assets and right-of--use assets of $4,571,187 less disposals of ($119,896) is more than depreciation expense ($1,085,157) and amortizatïon expense {$342,057).
A transfer of capital assets and long-term debt from the governmental funds to the business-type activities is not reported in the governmental funds but it is reported as an interfund transfer in the governmental activities.
In governmental funds, pension costs are recognized when employer contributions are made. In the statement of activities, pension costs are recognized on the accrual basis.
This fiscal year, the difference between accrual-basis pension costs and actual employer contributions was:
In governmental funds, OPEB costs are recognized when employer contributions are made.
In the statement of activities, OPEB costs are recognized on the accrual basis. This fiscal year, the difference between accrual-basis OPEB costs and actual employer contribution was:
In governmental funds, interest on long-term debt is recognized in the period that it becomes due. In the government-wide statement of activities, it is recognized in less matured interest paid during but owing from the prior period was:
In governmental funds, repayments of long-term debt are reported as expenditures.
In the government-wide statements, repayments of long-term debt are reported as reductions of liabilities.
In governmental funds, proceeds from debt are recognized as other financing sources.
In the government-wide statements, proceeds from debt are reported as increases net of issue premium or discount, was:
In the statement of activities, compensated absences are measured by the amounts earned during the fiscal year. In governmental funds, expenditures for these items are measured by the amount of financial resources used (essentially the amount paid). This fiscal year, compensated absences earned exceeded the amount paid by:
In governmental funds, certain revenues are deferred because the revenues are not collected within the prescribed time period after fiscal year-end. However, on the accrual basis used in the statement of activities, those revenues are included:
Internal Service Funds are used by management to charge the costs of risk management and vehicle and equipment replacement to individual funds. The net income of the internal service funds is reported within governmental activities. Includes transfer out of pension and OPEB.
Change in net position -governmental activities
The notes to basic financial statements are an integral part of this statement 21 3,024,077
(1,445,551)
2,222,244
76,899
48,725
781,184
(681,725)
(231,777)
520,932
(757,64b)
$ 7,176,777
Agenda Item No. 13 Page 42 of 169 CC Agenda 05-20-2024
Agenda Item No. 13 Page 43 of 169 CC Agenda 05-20-2024
PRQPRIETAR~ FUND
FINANCIAL STATEMENTS
Agenda Item No. 13 Page 44 of 169 CC Agenda 05-20-2024
City of Port Hueneme
Statement of Net Fosition
Proprietary Funds
June 30, 2023
Wastewater Solid Waste 1=lousing
Water Utility Utility Utility Authority
$ 24,181,782 $ 7,617,106 $ 5,448,247 $ 2,356,989
1,698,622 626,865 1,029,751 29,184
- - - 91,144
4,571 - - 72
- - - 476
- - - 53,484
25,884,975 8,243,971 6,477,998 2,531,349
616,405 357,754 609,072 -
5,376,228 - - -
- - - 420,509
1,436,791 1,087,824 637,381 59,133
3,116,064 10,465,276 3,669,968 730,079
10,545,488 11,910,854 4,916,421 1,209,721
36,430,463 20,154,825 11,394,419 3,741,070
515,249 508,049 862,574 432,115
16,149 15,923 27,034 13,543
$ 531,398 $ 523,972 $ 889,608 $ 445,658
ASSETS
Current assets:
Cash and investments
Accounts receivable, net
Lease receivables-current
Prepaid expenses
Due from other governments
Due from other funds
Total current assets
Noncurrent assets:
Restricted investments
Investment ín joint venture
Lease receivables
Capital assets:
Nondepreciable or amortizable
Depreciable and amortizable, net
Total noncurrent assets
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Related to pensions
Related to OPEB
Total deferred outflows of resources
The notes to basic financial statements are an integral part of this statement 22 Agenda Item No. 13 Page 45 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Statement of Net Position
Proprietary Funds
June 30, 2023
Governmental
ASSETS
Current assets:
Cash and investments
Accounts receivable, net
Lease receivables-current
Prepaid expenses
Due from other governments
Due from other funds
Total current assets
Noncurrent assets:
Restricted investments
Investment in joint venture
Lease receivables
Capital assets:
Nondepreciable or amortizable
Depreciable and amortizable, net
Total noncurrent assets
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Related to pensions
Related to OPEB
Total deferred outflows of resources
Nonmaj or Internal
Water Plant Total Service Funds
$ - $ 39,604,124 $ -
- 3,384,422 -
- 91,144 -
- 4,643 -
1,305,702 1,306,178 -
1,305,702 44,443,995 -
- 1,583,231 -
- 5,376,228 -
- 420,509 -
- 3,221,129 -
- 28,582,484 -
1,305,702 73,026,479 -
252,471 2,570,458 -
7,913 80,562 -
$ 260,384 $ 2,651,020 $ -
(continued)
The notes to basic financial statements are an integral part of this statement 23 Agenda Item No. 13 Page 46 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Statement of Net Position
Proprietary Funds
June 30, 2023
Wastewater Solid Waste Housing
Water Utility Utility Utility Authority
$ 402,582 $ 203,798 $ 112,197 $ 63,584
21,629 15,098 26,292 18,418
- 43,097 - -
146,604 9,000 24,480 35,573
- - - 19,821
- - - 5,235
47,580 48,650 76,348 40,721
24,380 5,334 4,803 18,800
26,592 194,274 31,553 12,718
669,367 519,251 275,673 214,870
11,290,953 - - -
10,596 29,803 50,452 28,861
663,324 3,941,222 798,199 345,744
58,022 19,426 8,115 26,367
285,442 285,442 285,442 -
1,239,428 1,222,109 2,074,917 1,039,451
201,776 198,957 337,792 169,220
13,749,541 5,696,959 3,554,917 1,609,643
14,418,908 6,216,210 3,830,590 1,824,513
- - - 482,969
162,700 160,427 272,375 136,450
8,598 8,478 14,395 7,211
171,298 1b8,905 286,770 626,630
3,799,167 7,487,053 3,623,145 744,045
- - - 63,473
18,572,488 6,806,629 4,543,522 928,067
$ 22,371,655 $ 14,293,682 $ 8,166,667 $ 1,735,585
(continued)
LIABILITIES
Current liabilities:
Accounts payable
Salaries and benefits payable
Accrued interest payable
Service deposits
Due to other funds
Unearned revenue
Compensated absences, current
Lease payable, current
Long term debt, current
Total current liabilities
Noncurrent liabilities:
Advances payable
Compensated absences payable
Long term debt
Leases payable
Subscription liabilities
Net pension liability
Net OPEB liability
Total noncurrent liabilities
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Related to leases
Related to pensions
Related to OPEB
Total deferred inflows of resources
NET POSITION
Net investment in capital assets
Restricted
Unrestricted
Total net position
The notes to basic financial statements are an integral part of this statement 24 Agenda Item No. 13 Page 47 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Statement of Net Position
Proprietary Funds
June 30, 2023
Governmental
Activities
Nonmaj or Internal
Water Plant Tatal Service Funds
LIABILITIES
Current liabilities:
Accounts payable
Salaries and benefits payable
Accrued interest payable
Service deposits
Due to other funds
Unearned revenue
Compensated absences, current
Lease payable, current
Long term debt, current
Total current liabilities
Noncurrent liabilities:
Advances payable
Compensated absences payable
Long term debt
Leases payable
Subscription liabilities
Net pension liability
Net OPEB liability
Total noncurrent liabilities
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Related to leases
Related to pensions
Related to OPEB
Total deferred inflows of resources
NET POSITION
Net investment in capital assets
Restricted
Unrestricted
Total net position
The notes to basic financial statements are an integral part of this statement 25 $ 60,076 $ 842,237 $ -
10,148 91,585 -
- 43,097 -
- 215,657 -
90,477 110,298 -
- 5,235 -
26,027 239,326 -
- 53,317 -
5,475 270,612 -
192,203 1,871,364 -
- 11,290,953 -
5,439 125,151 -
148,847 5,897,336 -
- 111,930 -
- 856,326 -
607,318 6,183,223 -
98,870 1,006,615 -
860,474 25,471,534
1,052,677 27,342,898
- 482,969 -
79,723 811,675 -
4,213 42,895 -
83,936 1,337,539 -
- 15,653,410 -
- 63,473 -
429,473 31,280,179 -
$ 429,473 $ 46,997,062 $ -
Agenda Item No. 13 Page 48 of 169 CC Agenda 05-20-2024
City of Port Hueneme
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Wastewater Solid Waste Housing
Water Utility Utility Utility Authority
$ 6,762,9{0 $ 3,629,987 $ 4,751,224 $ 571,851
234,035 - 81,428 151,976
6,996,995 3,629,987 4,832,652 723,827
207,672 340,028 23,158 170,783
3,973,543 1,456,348 2,298,360 4,205,434
466,624 451,331 381,676 126,557
4,647,839 2,247,707 2,703,194 4,502,774
2,349,156 1,382,280 2,129,458 (3,778,947)
327,122 117,854 124,363 52,428
(832,757) (153,253) (8,711) (334)
- - - 97,880
(1,881) (1,881) (27,986) -
- - 53,056 4,508,688
(507,516) (37,280) 140,722 4,658,662
1,841,640 1,345,000 2,270,180 879,715
(288,998) (87,074) (432,721) {101,678)
1,552,642 1,257,926 1,837,459 778,037
20,742,146 12,998,998 6,268,046 957,548
76,867 36,758 61,162 -
20,819,Oi3 13,035,756 6,329,208 957,548
$ 22,371,655 $ 14,293,682 $ 8,166,b67 $ 1,735,585
OPERATING REVENUES:
Charges for services
Other operating revenues
Total operating revenues
OPERATING EXPENSES:
Salaries and benefits
Insurance claims
General and administrative
Depreciation and amortization
Total operating expenses
OPERATING INCOME (LOSS)
NON-OPERATING REVENUES (EXPENSES)
Interest income
Interest expense
Lease revenue
Loss ondisposatof capital assets
Intergovernmental
Total non-operating revenues (expenses}
INCOME (LOSS} BEFORE TRANSFERS
TRANSFERS
Transfers in (out)
CHANGE IN NET POSITION
Beginníng of fiscal year
Prior-period adjustments
Beginning of fiscal year, restated
End of fiscal year
The notes to basic financial statements are an integral part of this statement 26 Agenda Item No. 13 Page 49 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Governmental
Nonmaj or Internal
OPERATING REVENUES:
Charges for services
Other operating revenues
Total operating revenues
OPERATING EXPENSES:
Salaries and benefits
Insurance claims
General and administrative
Depreciation and amortization
Total operating expenses
OPERATING INCOME (LOSS)
NON-OPERATING REVENUES (EXPENSES)
Interest income
Interest expense
Lease revenue
Loss on disposal of capital assets
Intergovernmental
Total non-operating revenues (expenses}
INCOME (LOSS) BEFORE TRANSFERS
TRANSFERS
Transfers in (out)
CHANGE IN NET POSITION
Beginning of fiscal year
Prior-period adjustments
Beginning of fiscal year, restated
End of fiscal year
The notes to basic financial statements are an integral part of this statement 27 $ 1,370,101 $ 17,086,123 $ 3,516,596
- 467,439 -
1,370,101 17,553,562 3,516,596
(20,507) 721,134 14,754
- - 2,037,643
620,171 12,553,856 769,046
- 1,426,188 6,921
599,664 14,701,178 2,828,364
770,437 2,852,384 688,232
{805) 620,962 -
- (995,055} (1,209)
- 97,880 -
- (31,748) -
- 4,561,744 -
(805) 4,253,783 (1,209)
769,632 7,106,167 687,023
(174,917) (1,085,388) (540,944)
594,715 6,020,779 146,079
(1,097,659) 39,869,079 (146,079)
932,417 1,107,204 -
(165,242) 40,976,283 {146,079)
$ 429,473 $ 46,997,062 $ -
Agenda Item No. 13 Page 50 of 169 CC Agenda 05-20-2024
City of Port Hueneme
Statement of Cash Flows
Proprïetary Funds
For the Fiscal Year Ended June 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts fi•om customers
Payments to suppliers
Payments to employees
Payments for insurance claims
Net cash provided (used) by operating activities
Wastewater Solid Waste Housing
Water Utility Utility Utility Authority
$ 7,096,433 $ 3,686,515 $ 4,552,663 $ 729,137
(4,095,715) (1,494,323) (2,485,770) (4,345,270)
(935,227) (1,209,386) (1,668,736) (1,022,909)
2,065,491 982,806 398,157 (4,639,042)
CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES:
Proceeds from lease receivables - - - 85,738
Acquisition of capital assets (678,610) (508,771) {361,736} (465,882) Principal payments on long-term debt (138,615) (278,210) (125,011) (30,169) Interest paid on long-term debt {832,757) (162,404) (8,711) (334) Capital aquired from governmental funds net of related debt (481,851) (481,850) (481,850) - Advances from other funds (515,879) - - -
Net cash {used) by capital and related fmancing activities (2,647,712) (1,431,235) (977,308) (410,647) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Intergovernmental revenues - - 53,056 4,508,688
Proceeds from investments 240,448 - - -
Transfers to other funds (246,783) (44,859) (390,506) (169,024) Net cash (used) by noncapital financing activities (6,335) (44,859) (337,450) 4,339,664 Interest income
Net cash provided (used) by investing activities
Net decrease in cash and cash equivalents
CASH AND CASH EQUIVALENTS
$eginning of fiscal year
End of fiscal year
327,122 117,853 124,364 40,205
327,122 117,853 124,364 40,205
(261,434) (375,435) (792,237) (669,820)
25,059,621 8,350,295 6,849,556 3,026,809
$ 24,798,187 $ 7,974,860 $ 6,057,319 $ 2,35b,989
RECONCILIATION OF CASH AND INVESTMENTS TO THE STATEMENT OF NET POSITION:
Cash and investments $ 24,181,782 $ 7,617,106 $ 5,448,247 $ 2,356,989 Cash and investments with fiscal agent 616,405 357,754 609,072 - Total cash and cash equivalents $ 24,798,187 $ 7,974,860 $ 6,057,319 $ 2,356,989 The notes to basic financial statements are an integral part of this statement 28 Agenda Item No. 13 Page 51 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Statement of Cash Flaws
Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Nonmaj or
~7~Iatar Pl~nt
Governmental
4 ~tivitiac
lnternai
T~,+nÍ ~.r r<~ina ~iiin~e
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers
Payments to suppliers
Payments to employees
Payments far insurance claims
Net cash provided (used) by operating activities
CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES:
Proceeds from lease receivables
Acquisition of capital assets
Principal payments on long-term debt
Interest paid on long-term debt
Capital aquired from governmental funds net of related debt Advances from other funds
Net cash (used) by capital and related financing activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Intergovernmental revenues
Proceeds from investments
Transfers to other funds
Net cash (used) by poncapital financing activities
$ 277,984 $ 16,342,732 3,516,596
(606,076) (13,027,154) (18,721)
400,854 (4,435,404) (780,402)
- - (2,037,643)
72,762 (1,119,826) 679,830
- 85,738 -
- (2,014,999) -
(4,942) (576,947) {42,667)
- (1,004,206) (1,209)
- (1,445,551) -
- (515,879) -
(4,942) (5,471,844} (43,876)
- 4,561,744 -
- 240,448 -
(84,440} (935,612) (1,126,084)
(84,440) (935,612) (1,126,084)
Interest income (805) 608,739 -
Net cash provided (used) by investing activities (805) 608,739 - Net increase in cash and cash equivalents (17,425) (2,116,351) (490,130)
CASH AND CASH EQUIVALENTS
Beginning of fiscal year 17,425 43,303,706 490,130
End of fiscal year $ - $ 41,187,355 $ -
RECONCILIATION OF CASH AND INVESTMENTS TO THE STATEMENT OF NET POSITION:
Cash and investments $ - $ 39,604,124 $ -
Cash and investments with fiscal agent - 1,583,231 -
Total cash and cash equivalents $ - $ 41,187,355 $ -
The notes to basic financial statements are an integral part of this statement ~L~
Agenda Item No. 13 Page 52 of 169 CC Agenda 05-20-2024
City of Port Hueneme
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Wastewater Solid Waste Housing
Water Utility Utility Utility Authority
Reconciliation of operating income (loss) to
net cash provided by (used in) operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization expense
(Increase) decrease in:
Accounts receivable
Prepaid expenses
Deferred outflows
Increase (decrease)in:
Accounts payable
Salaries and benefits payable
Service deposits
Unearned revenue
Compensated absences
Net pension liability
Net OPEB liability
Deferred inflows
Net cash provided (used) by operating activities
$ 2,349,15b $ 1,382,280 $ 2,129,458 $ (3,778,947)
466,624 451,331 381,676 126,557
114,099 56,528 (264,740) (2,969)
(4,571) - - (72)
(217,203) (199,380) {308,028) (152,266)
{117,601) (37,975) (187,410) (139,764)
9,312 434 5,062 5,434
(14,661) - (15,249) 6,900
- - - 1,379
25,328 11,138 32,551 28,803
181,816 129,486 117,241 51,860
101,659 52,917 71,421 3,956
(828,467) {863,953) (1,563,825) (789,913)
$ 2,065,491 $ 982,806 $ 398,157 $ (4,639,042)
The notes to basic financial statements are an integral part of this statement 30 Agenda Item No. 13 Page 53 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Governmental
Nonmaj or lnternal
Water Plant Total Service Funds
Reconciliation of operating income {loss) to
net cash provided by (used in) operating activities:
Operatïng income (loss)
Adjustments to reconcile operating income (loss} to net cash provided by (used in} operating activities:
Depreciation and amortization expense
(Increase) decrease in:
Accounts receivable
Prepaid expenses
Deferred outflows
Increase (decrease)in:
Accounts payable
Salaries and benefits payable
Service deposits
Unearned revenue
Compensated absences
Net pension liability
Net OPEB liability
Deferred inflows of resources
Net cash provided {used) by operating activities
$ 770,437 $ 2,852,384 $ 688,232
- 1,426,188 6,921
(1,092,117) (1,189,199) -
- (4,643) -
(80,089) {956,966) -
14,095 (468,655) (11,356)
3,332 23,574 (3,967)
- (23,010)
- 1,379 -
16,75b 114,576 -
799,078 1,279,481 -
130,999 360,952 -
(489,729) (4,535,887) -
$ 72,762 $ (1,ll9,826) $ b79,830
The notes to basic financial statements are an integral part of this statement 31 Agenda Item No. 13 Page 54 of 169 CC Agenda 05-20-2024 Agenda Item No. 13 Page 55 of 169 CC Agenda 05-20-2024
FIDUCIARY FITND
FINANCIAL STATEMENTS
Agenda Item No. 13 Page 56 of 169 CC Agenda 05-20-2024
City of Port Hueneme
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2023
ASSETS
Cash and cash equivalents
Total assets
NET POSITION
Unrestricted
Private
Purpose
Trust Funds
Successor
Agency
$ (34)
(34)
$ (34)
The notes to basic financial statements are an integral part of this statement 32 Agenda Item No. 13 Page 57 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2023
Private
Purpose
Trust Funds
Successor
Agency
ADDITIONS
Taxes $ 1,347,501
Total additions 1.347.501
DEDUCTIONS
Community development 69,462
Interest expense 21,575
Total deductions 91.037
CHANGE IN NET POSITION 1,256,464
NET POSITION (DEFICIT)
Beginning of fiscal year (1,256,498)
End of fiscal year $ (34)
33 Agenda Item No. 13 Page 58 of 169 CC Agenda 05-20-2024
THIS PAGE IS INTENTIONALL Y LEFT BLANK
Agenda Item No. 13 Page 59 of 169 CC Agenda 05-20-2024
NCITES TO THE FINANCIAL STATEMENTS
Agenda Item No. 13 Page 60 of 169 CC Agenda 05-20-2024
Agenda Item No. 13 Page 61 of 169 CC Agenda 05-20-2024
City of Port Hueneme
Index to Notes to the Financial Statements
June 30, 2023
Pa~e
Note 1 —Summary of Significant Accounting Policies ........................................................................................................................... 36 Note2 —Cash and Investments ............................................................................................................................................................... 45 Note3 —Loans Receivable ...................................................................................................................................................................... 48 Note4 —Lease Receivables ..................................................................................................................................................................... 48 Note5 —Investment ín Joint Venture ...................................................................................................................................................... 49 Note6 — Interfund Transactions .............................................................................................................................................................. 50 Note7 —Capital Assets ........................................................................................................................................................................... 51 Note8 —Long-term Líabilities ................................................................................................................................................................ 52 Note9 —Changes in Long-term Liabilities ............................................................................................................................................. 56 Note10 —Risk Management ................................................................................................................................................................... 56 Note11 —Pension Plans .......................................................................................................................................................................... 58 Note 12 — Post-Employment Health Care Benefits (OPEB) .................................................................................................................... 63 Note 13 —Contingencies and Commitments ........................................................................................................................................... 66 Note 14 —Excess Expenditures Over Appropriations ............................................................................................................................. 66 Note 15 —Successor Agency to the Redevelopment Agency .................................................................................................................. 66 Note16 — Prior-Period Adjustments ........................................................................................................................................................ 68 35 Agenda Item No. 13 Page 62 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The reporting entity is the Cíty of Port Hueneme. The City is located in the County of Ventura and was incorporated on March 24, 1948, under the general laws of the State of California. The City operates under an elected Council form of government. The City's major operations include police protection, water, sanitation, public works, parks, recreation, certain social services, and general administration services.
In evaluating how to define the City for financial reporting purposes, management has considered all potential component units. The primary criteria for including a potential component unit within the reporting entity are the governing body's financial accountability and a financial benefit or burden relationship and whether it is misleading to exclude. A primary government is financially accountable and shares a financial benefit or burden relationship, if it appoints a voting majority of an organizatïon's governing body and it is able to impose its will on the organization, or if there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government. A primary government may also be financially accountable if an organization is fiscally dependent on the primary government regardless of whether the organization has a separately elected governing board, a governing board appointed by a higher level of government, or a jointly appointed board, and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government.
Blended Component Units:
Management determined that the following entities should be reported as blended component units based on the criteria above. Although the fallowing is legally separate from financial benefit or burden relationship between the City and the component unit; management of the City has operational responsibilities for the component unit; and/or the component unit provides services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even though it does not provide services directly to it.
Surplus Property Authority of the City of Port Hueneme — On October 6, 1993, the City Council by the adoption of Ordinance No. 591, established the Surplus Property Authority to function within the City of Port Hueneme. Although the Surplus Property Authority is a separate legal entity from the City of Port Hueneme, its financial operations are closely related and the Port Hueneme City Council serves as the Surplus Property Authority Board of Directors.
The Housing Authority of the City of Port Hueneme (PHHA) — On May 16, 1993, pursuant to the provisions of the Health &Safety Code of the State of California, the City Council established the Housing Authority. The City Council along with two appointed members (Housing Authority Tenants) act as the PHHA Board of Directors and have oversight of the PHHA operations. The City has no responsibility for the outstanding debt of PHHA or the surplus or deficit from operations.
B. Basis of Presentation
The City's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.
Government-wide Statements
The Statement of Net Position and the Statement of Activities display information about the primary government (the City). These statements include the financial activities of the overall City government, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities although interfund services provided and used are not eliminated in the process of consolidation.
Government activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
Agenda Item No. 13 Page 63 of 169
36 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financïal Statements
June 30, 2023
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contïnued) B. Basis of Presentation(Contin
The Statement of Activities presents a comparison between dïrect expenses and program revenues for each segment of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational needs of a program, and {c) fees, grants, and contributions that are restricted to fmancing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements
The fund fmancial statements provide information about the City's funds. Separate statements for each fund category (governmental and proprietary) are presented. The emphasis of fund financial statements is on major individual funds, each of which is displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds.
Proprietary fund financial statements include: a Statement of Net Position; a Statement of Revenues, Expenses, and Changes in Net Position; and a Statement of Cash Flows for all proprietary funds.
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 non-current) 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 liability is incurred.
Operating revenues in the proprietary funds are those revenues that are generated from the primary operation of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.
C. Major Funds
GASB Statement No. 34 defines major funds and requires that the City's major funds are identified and presented separately in the fund fmancial statements. Ali other funds, called nonmajor funds, are combined and reported in a single column in the Fund Statements as Other Governmental Funds, regardless of their fund-type.
Major funds are defined as funds that have either assets plus deferred outflows, liabilities plus deferred inflows, revenues, or expenditures/expenses at least ten percent of their fund-type total or at least five percent of the total far all funds. The General Fund is always a major fund. The City may also voluntarily select other funds it believes should be presented as major funds.
The City reported the following major governmental funds in the accompanying fmancial statements:
General Fund — Accounts for all general revenues of the City not specifically levied or collected for other City funds and the related expenditures. The General Fund accounts for all fmancial resources of a governmental unit which are not accounted for in other funds.
Agenda Item No. 13 Page 64 of 169
37 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 1 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Major Funds Continued)
The City reported the following major proprïetary funds:
Water Utility Operations Fund —This fund is used to accounts for the activities of providing water services to the residents of the City.
Wastewater Utility Operations Fund —This fund is used to account for the activities of maintaining sanitary sewer and storm drain systems within the City.
Solid Waste Operations Fund —This fund is used to account for the activities of refuse removal within the City.
HousingAuthorïty Fund —This fund is used to account far the administration and management offederallysponsored Public Housing and Housing Choice Voucher (Section 8) programs.
Internal service funds are presented in the proprietary fund financial statements. However, internal service balances and activities have been combined with governmental activities in the government-wide financial statements.
Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in Fiduciary Net represent agency funds and private purpose trust funds. Both agency funds and the private purpose trust funds are accounted for on the full accrual basis of accounting.
The City reports the following fiduciary fund:
Successor Agency to the Port Hueneme Redevelopment Agency Private purpose Trust Fund —This fund is used to account for the balances and transactions of the Successor Agency to the former Port Hueneme Redevelopment Agency.
D. Basis of Accounting
The government-wide and proprietary funds financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.
Governmental funds are reported using the current,financial resources measurement focus and the modi~ed accrual basis of accounting. Under this method, revenues are recognized when measurable and available.
The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after fiscal year end. Expenditures are recorded when the related fund liabilïty is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent that they have matured.
Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of long-term debt and acquisitions under capital leases are reported as other financing sources.
Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include properly taxes, grants, entitlements, and donations. fln an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied.
Other revenues susceptible to accrual include other taxes, intergovernmental revenues, interest, and charges for services.
Agenda Item No. 13 Page 65 of 169
38 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basïc Financïal Statements
June 30, 2023
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contïnued) 7 E
Basis of Accountin~(Continued)
Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements, the Cïty may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net assets may be available to finance program expenditures/expenses. The City's policy is to first apply restricted grant resources to such programs, followed by general revenues, if necessary.
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 voters' 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 by no more than two percent per year, unless a change in ownership or new construction 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 have been levied and collected within sixty days of fiscal year end. Property taxes are billed and collected as follows:
Secured Unsecured
January 1 January 1
July 1 July 1
November 1 (50%) August 1
February 1 (50%)
December 10 (Nov.) August 31
April 10 (Feb.)
Valuation/Lien Dates
Levy Dates
Due Dates
Delinquency Dates
F. Estimates
G
H
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenditures or expenses as appropriate. Actual results could differ from those estimates.
Cash, Cash Equivalents, and Investments
The City pools its available cash for investment purposes. The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with origïnal maturity of three months or less from the date of acquisition. Cash and cash equivalents are combined with investments and displayed as Cash and Investments. For purposes of the statement of cash flows of the proprietary fund types, cash and cash equivalents include all investments, as the City operates an internal cash management pool which maintains the general characteristics of a demand deposit account. Investments are stated at fair value (quoted market price or best available estimate thereof).
Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. The prepaid items recorded in the governmental funds do not reflect current appropriable resources and, thus, an equivalent portion of the fund balance is reported as nonspendable.
Ri~ht-of-use SBITAs
Right-of--use Subscription-Based Information Technology Arrangements (SBITAs) are recorded at the amount of the initial measurement of the subscription liabilities and are modified by any subscription payment made at or before the commencement of the subscription term. Right-of--use SBITAs are amortized using the straight-line method over the shorter of the subscription term or the useful life of the underlying asset.
Agenda Item No. 13 Page 66 of 169
39 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) J. Leases
Lessee —The City has a policy to recognize a lease liability and aright-of--use asset (lease asset) in the financial statements with an initial, individual value of $5,000 or more with a lease term greater than one year. Variable payments based on future performance or usage of the underlying assets are not included in the measurement of the lease liabíüty. At the commencement of a lease, the lease liability is measured 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.
Lease assets are recorded at the amount of the initial measurement of the lease liabilities and modified by any lease payments made to the lessor at or beftire the commencement of the lease term, less any lease incentives received from the lessor at or before the commencement of the lease term along with any initial direct costs that are ancillary charges necessary to place the lease asset over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the City has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.
Key estimates and judgments related to leases include haw 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 noncancelable period of the lease, plus any option periods that are reasonably certain to be exercised. 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 a lease and will remeasure any lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.
• Lease assets are reported as right-of--use along with other capital assets and lease liabilities are reported on the statement of net position.
Lessor -The City is a lessor for leases of buildings and land and recognizes leases receivable and deferred inflows of resources in the fmancial 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. 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 ïn 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 Cíty uses the average of the LAIF rate and the incremental borrowing rate (IBR) provided by our fmancial 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.
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.its Agenda Item No. 13 Page 67 of 169
40 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) K. Investment in Joint Venture
Investment in a joint venture is reported using the equity method. Initially, the investment is reported at cost, and the equity interest is adjusted for the City's share of the joint venture's net income or loss (Note 5).
L. Capital Assets
Capital assets, which include property, plant equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide fmancial statements.
Capital assets are defined by the City as assets with an estimated useful life in excess of one year and an initial individual cost of $5,000 or more for equipment, $25,000 or more for building improvements and infrastructure. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Public domain (infrastructure) assets consist of roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, and lighting systems.
Donated capital assets received prior to June 15, 2015, are recorded at their estimated fair value at the date of donation. Donated capital assets received after June 15, 2015, are recorded at acquisition value. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.
Depreciation is charged to operations using the straight-lïne method of depreciation over the estimated useful lives of the assets as follows:
Building and Improvements 27.5-50 years
Pipeline and Plant 30 years
Machinery and Equipment 7-15 years
Infrastructure 20-50 years
M. Long-Term Liabilities
In the government-wide fmancial statements, long-term debt and other long-term obligations are reported as liabilities in the Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount.
N. Compensated Absences
In the government-wide financial statements, a liability is accrued for earned but unused vacation leaves benefits relating to the operations of the funds. This liability will be liquidated as either additional cash payments in the event of employee termination or as part of budgeted salary expenditures if used by employees as compensated leave time while still employed by the City.
O. Unearned Revenue
In the government-wide fmancial statements, unearned revenue is recognized for transactions for which revenue has not yet been earned. Typical transactions recorded as unearned revenues in the governmentwide fmancial statements are cell phone site license lease payments received in advance, prepaïd charges for services and facility rentals paid in advance.
In the fund fmancial statements, unearned and unavailable revenue is recorded when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting. The City records unearned revenue for transactions for which revenues have not been earned, and unavailable revenue when funds are not available to meet current fmancial obligations in accordance with GASB Statement No. 65.
Typical transactions for which unearned or unavailable revenue is recorded are lease payments, quarterly encroachment fees, and advance registration for recreation classes which were not yet earned.
Agenda Item No. 13 Page 68 of 169
41 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the basic Financial Statements
June 30, 2023
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) P. Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, "Financial Reporting of Deferred Outflows of Resources, Deferred In, flows of Resources, and Net Position," and GASB Statement No. 65, "Items Previously Reported as Assets and Liabilities, "the Cíty recognizes deferred outflows and inflows of resources.
In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources represents a consumption of net assets by the government that applíes to future periods. The City has two items that qualify far reporting in this category; refer to Note 11 and Note 12 for detaíled listing of the deferred outflows of resources the City has reported.
In addition to liabilities, the Statement of Net Position and the Governmental Funds —Balance Sheet will sometimes report a separate section for deferred inflows of resources. A deferred inflow of resources is an acquisition of net assets by the City that applies to a future perïods. The City has three items that qualify for reporting in this category; refer to Notes 4, 11, and 12 for detailed listing of the deferred inflows of resources the City has reported.
Q. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City of Part Hueneme's California Public Employee's Retirement System (CaIPERS) plans (Plans) and additions to/deductions from the Plans' fiduciary net position have been determined on the same basis as they are reported by Ca1PERS.
For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
R. Other Postemployment Benefits {OPEB)
For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City's plan (OPEB Plan) and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value.
S. Fund Balances
Fund balances of the governmental funds are classified as follows:
Nonspendable Fund Balance — represents amounts that cannot be spent because they are either not in spendable form {such as inventory or prepaid insurance) or are legally required to remain intact (such as notes receivable or the lease receivable in excess of the deferred inflow of resources for the lease receivable).
Restricted Fund Balance — represents amounts that are constrained by external parties, constitutional provisions or enabling legislation.
Committed Fund Balance — represents amounts that can only be used for a specific purpose because of a formal action by the City's governing board. Committed amounts cannot be used for any other purpose unless the governing board removes those constraints by taking the same type of formal action. Committed fund balance amounts may be used for other purposes with appropriate due process by the governing board.
Commitments are typically done through adoption and amendment of the budget. Committed fund balance amounts differ from restricted balances in that the constraints on their use do not come from outside parties, constitutional provisions, or enabling legislation.
Agenda Item No. 13 Page 69 of 169
42 CC Agenda 05-20-2024
City of Part Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) S. Fund Balances tContinued
Assigned Fund Balance — represents amounts that the City intends to use far a specific purpose, but that do not meet the criteria to be classified as restricted or committed. Intent may be stipulated by the governing board or by an official or body to which the governing board delegates the authority. Specific amounts that are not restricted or committed in a special revenue, capital projects, debt service, or permanent fund are assigned for purposes in accordance with the nature of their fund type or the fund's primary purpose.
Assignments within the general fund convey that the intended use of those amounts is for a specific purpose that is narrower than the general purpose of the City.
Unassigned Fund Balance — represents amounts which are unconstrained in that they may be spent for any purpose. Only the general fund reports a positive unassigned fund balance. Other governmental funds might report a negative balance in this classification because of overspending far specific purposes for which amounts had been restricted, committed or assigned.
When an expenditure is incurred for a purpose for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds. The description of each fund balance category is listed in the City's adopted Governmental Fund Balance Policy.
T. Net Position
GASB Statement No. 63 requires that the difference between assets added to the deferred outflows of resources, and liabilities added to the deferred inflows of resources, be reported as net position. Netposition is classified as either net investment in capital assets, restricted, or unrestricted.
Net Investment in Capital Assets —This component of net position consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of those assets and retention payable, and added back the unspent debt proceeds.
Restricted —This component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.
Unrestricted —This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.
When expenses are incurred for purposes for which both restricted and unrestricted net position are available, the City's policy is to apply restrïcted net position first, then unrestricted net position as they are needed.
U. Interfund Balances/Internal Balances
Advances to and advances from other funds represent interfund loans in the fund financial statements.
Advances between funds are offset by a fund liability or by deferred revenue in the applicable governmental funds to indicate that they are not expendable available fmancial resources. Any unpaid interest due to lack of funds in the borrowing fund increases the principal owed and is reported in the lending fund as deferred revenue. A1í other outstanding balances between funds are reported as due to and due from other funds. These are generally repaid within the following fiscal year. Any residual balances outstanding between the governmental activities and business-type activities are reported ïn the Government-Wide Financial Statements as "internal balances."
Agenda Item No. 13 Page 70 of 169
43 CC Agenda 05-20-2024
V
~
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE I —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES {Continued) Budgetary Accounting
The City Council establishes budgets for the General Fund and all Special Revenue Funds. Budgetary control is legally maintained at the fund level for these funds. Department heads submit budget requests to the City Manager. The City Manager prepares an estimate of revenues and prepares recommendations far the next year's budget. The preliminary budget may or may not be amended by the City Council and is adopted by resolution by the City Council on or before June 30 in accordance with the municipal code. The City Council may amend the budget by motion during the fiscal year. Only the Council can authorize transfers between funds and approve inter-fund loans. The City Manager is authorized to transfer budgeted amounts within a fund without formal council action or approval. The City Manager is authorized to increase expenditures in relation to revenues in funds receiving assigned revenues without approval by the City Council.
Expenditures may not legally exceed appropriations at the fund level, which is the legal level of control.
Supplemental appropriations, which increase appropriations, may be made during the fiscal year. There were no material supplemental appropriations made for the fiscal year ended June 30, 2023. Budget information is presented for the General and budgeted Special Revenue Funds in the fund financial statements. The budget information is presented on a basis consistent wïth generally accepted accounting principles. Appropriations, except open project appropriations, and unexpended grant appropriations, lapse at the end of each fiscal year.
Appropriations lapse at the end of the fiscal year and then are re-budgeted for the coming year. Under Article XIII B of the California Constitution (the Gann Spending Limitation Inïtiative), the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller, returned to the taxpayers through revised tax rates or revised fees schedules, or an excess in one year may be offset against a deficit in the following year. For the fiscal year ended June 30, 2023, based on the calculations by City Management, proceeds of taxes did not exceed the appropriations limit. Budgeted appropriations far the various governmental funds become effective each July 1.
Future Accounting Pronouncements
Statement No. 99 "Omnibus 2022" The provisions of this statement are effective in Apri12022 except for the provisions related to
leases, PPPs, SBITAs, financial guarantees and
derivative instruments. The provisions related to
leases, PPPs, and SBITAs are effective for fiscal
years beginning after June 15, 2022. The provisions
related to financial guarantees and derivative
instruments are effective for fiscal years beginning
after June 15, 2023.
The provisions of this statement are effective
for fiscal years beginning after June 15, 2023.
The provisions of this statement are effective
for fiscal years beginning after December 15, 2023.
Statement No. 100 "Accounting Changes and Error
Corrections - an amendment of GASB
Statement No. 62"
Statement No. 101 "Compensated Absences"
Agenda Item No. 13 Page 71 of 169
44 CC Agenda 05-20-2024
Investments by fair value
PARS Capital Appreciation Mutual Fund
Ventura County Investment Fund
Total investments measured at fair value
Investments measured at amortized cost:
LAIF
Total investments
T~rai
$ 3,797,737
7,145,958
10,943,695
37,746,894
$ 48,690,589
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 2 —CASH AND INVESTMENTS
The composition of cash and investments as of June 30, 2023, is as follows:
Statement of Net Positïon:
Cash and cash equivalents
Cash and investments $ 46,168,290
Restricted cash 3,519
Cash on hand 2,180
Total cash and cash equivalents 46,173,989
Investments
Deposit in Trust 3,797,737
Ventura County Investment Fund 7,145,958
Local Agency Investment Fund 37,746,894
Total investments 48,690,589
Total cash and investments $ 94,864,578
Cash and investments are classified in the fmancial statements as shown below, based on whether or not their use is restricted under the terms of the City's debt instruments or Agency's agreements:
Government-Wide
Governmental Business-Type Fiduciary
Activities Activities Activities Total
Cash and investments $ 51,462,753 $ 39,604,124 $ (34) $ 91,066,843 Cash and investments with fiscal agents 2,214,504 1,583,231 - 3,797,735 Total cash and investments $ 53,677,257 $ 41,187,355 $ (34) $ 94,864,578 Governmental Accounting Standards Board (GASB) Statement No. 72, "Fair Value Measurements and Application," provides the framework for measuring fair value. The framework categorizes a fair value hierarchy that is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City has recurring fair value measurements as of June 30, 2023 as shown below:
Fair Value Measurement Using
Quoted Prices in Significant Other Significant
Actïve Markets for Observable Unobservable
Identical Assets Inputs Inputs
(Level ï) (Leve12) (Leve13)
$ 3,797,737 $ - $ -
_ 7,145,958 _
$ 3,797,737 $ 7,145,958 $ -
Agenda Item No. 13 Page 72 of 169
45 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basïc Fïnancial Statements
June 30, 2023
NOTE 2 —CASH AND INVESTMENTS {Continued)
A. Investments Authorized b_y the California Government Code and the City's Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code. The table also identifies certain provisions of the California Government Code that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity of Portfolio in One Issuer
U.S. Treasury Obligations 5 years None None
U.S. Agency Securities 5 years None None
Bankers' Acceptance 180 days 40% 30%
Commercial Paper 270 days 15% 10%
Negotiable Certificates of Deposit 5 years 30% None
Repurchase Agreements 1 year None None
Reverse Repurchase Agreements 92 days 20% None
Money Market Mutual Funds NIA 20% 10%
Ventura County Investment Fund N/A N/A N/A
Local Agency Investment Fund (LAIF) N/A None $75,000,000 B. Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of ïts fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments, and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flows and liquidity needed for operations.
Information about the sensitivity of the fair values of the City's investments to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity:
Investment Type
LAIF
Ventura County Investment Fund
PARS Capital Apprecíation Mutual Fund
Total
Remaining Maturity (in Months)
Carrying 12 Months 13-24 25-60 More than
Amount Or Less Months Months 60 Months
$ 37,746,894 $ 37,746,894 $ - $ - $ -
7,145,958 7,145,958 - - -
3,797,737 455,634 377,719 2,964,384 -
$ 48,690,589 $ 45,348,486 $ 377,719 $ 2,964,384 $ -
C. Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by the California Government Code, and the actual rating as of fiscal year end for each investment type.
Minimum Exempt
Carrying Legal From Rating as of Fiscal Year End
Investment Type Amount Rating Disclosure AAA Not Rated
LAIF $ 37,746,894 N/A $ - $ - $ 37,746,894
Ventura County Investment Fund 7,145,958 N/A - - 7,145,958 PARS Capital Appreciation Mutual Fund 3,797,737 N1A - - 3,797,737 Total $ 48,690,589 $ - $ - $ 48,690,589
Agenda Item No. 13 Page 73 of 169
46 CC Agenda 05-20-2024
pity of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 2 —CASH AND INVESTMENTS (Contïnued)
D. Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There are no investments in any one issuer that represents 5% or more of the total City's investments.
E. Custodial Credit Risk
Custodial credit risk for dep©sits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits, other than the following provision for deposits: The California Government Code requires that a fmancial institution secure deposits made by State or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under State law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows fmancial institutions to secure the City's deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
None of the City's deposits with fmancial institutions in excess of the Federal Depository Insurance Corporation's limits were held in uncallateralized accounts.
The custodial credit rïsk for investments is the risk that, in the event of the failure of the counterparty {e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government's indirect investment in securities through the use of mutual funds or governmental investment pools (such as LAIF and the Ventura County Investment Pool).
F. Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying basic fmancial statements at the amounts based upon the City's pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.
G. Investment in Ventura County Investment Pool
The City maintains cash in the Ventura County Treasury as part of the common investment pool ($7,145,958 as of June 30, 2023). The fair value of this pool as of that date, as provided by the plan sponsor, was $7,145,958.
The City is considered to be a voluntary participant in the external pool Interest is deposited in the participating funds. The County is restricted by Government Code Section 53635, pursuant to Section 53601, to invest in time deposits, U.S. government securities, State registered warrants, notes or bonds, State Treasurer's investment pool, bankers' acceptances, commercial paper, negotiable certificates of deposit, and repurchase or reverse repurchase agreements.
Agenda Item No. 13 Page 74 of 169
47 CC Agenda 05-20-2024
City of Part Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 3 —LOANS RECEIVABLE
Loans receivable consists of the following:
HOME Program loans $ 560,310
Rehabilitiation1oans 129,193
PHWA loans 560,241
Total $ 1,249,744
Housing Rehabilitation and HOME Loans
The City has received funding from the U.S. Department of Housing and Urban Development for the purpose of assistïng (through zero or low interest deferred loans) residents and commercial enterprises to rehabilitate their homes and businesses. Same of the loans have maturity dates while other are due upon sales of the underlying property. Notes receivable for Housing Rehabilitation and HOME Loans as of June 30, 2023 were $560,310 and $129,193, respectively.
PHWA Loans
The City advance funds to the Port Hueneme Water Authority (the "PHWA" for construction. The PHWA has agreed to repay the advances along with accrued simple interest at 8%. Notes receivable at June 30, 2023 was $560,241.
NOTE 4 —LEASE RECEIVABLES
The City leases various types of property including land and buildings, Leases receivable consist of agreements with Other entities for the "right-of--use" the underlying assets at various locations owned by the City. The remaining terms of the agreements range from 2 to 32 years. The interest rates used calculated the net present value of the lease receivable ranged from 1% to 1.5%. For the fiscal year ended June 30, 2023, the City recognized $109,452 in lease revenue and $8,071 in interest revenue and the outstanding net present value of the lease receivable amount is $572,041 as of June 30, 2023.
Governmental Activities
A summary of the changes in lease receivable for the governmental activities for the fiscal year ended June 30, 2023 is as follows:
Balance Balance Amounts due Amounts due in
July 1, 2022 Additions Reductions June 30, 2023 within one year more than one year $ 71,718 $ - $ 11,330 $ 60,388 $ 11,444 $ 48,944
At June 30, 2023, the required payments for these leases including interest are:
NPV Lease Total Lease
Fiscal Year Receivables Interest Payments
2024 $ 11,444 $ 556 $ 12,000
2025 11,560 440 12,000
2026 i1,677 323 12,000
2027 11,795 205 12,000
2028 11,915 85 12,000
2029 1,997 3 2,000
Total $ 60,388 $ 1,612 $ 62,000
Agenda Item No. 13 Page 75 of 169
48 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 4 —LEASE RECEIVABLES (Continued)
Business-type Activities
A summary of the changes in lease receivable for the business-type activities for the fiscal year ended June 30, 2023 is as follows:
Balance Balance Amounts due
July 1, 2022 Additions Reductions June 30, 2023 wïthin one year $ 597,391 $ - $ 85,738 $ 511,653 $ 91,144
At June 30, 2023, the required payments for these leases including interest are:
NPV Lease Total Lease
Fiscal Year Receivables Interest Payments
2024 $ 91,144 $ 6,231 $ 97,375
2025 96,817 4,989 101,806
202b 62,934 3,868 66,802
2027 59,037 3,100 62,137
2028 62,950 2,294 65,244
2029-2030 138,771 1,956 140,727
Total $ 511,653 $ 22,438 $ 534,091
Amounts due ïn
more than one year
$ 420,509
NOTE 5 — INVESTMENT IN JOINT VENTURE
Investment in joint venture represents the City's investment in the Port Hueneme Water Agency {PHWA), a joint powers agency created on July 20, 1994, when the City entered into a Joint Powers Agency Agreement (Agreement) with the Channel Islands Beach Community Services District (District).
PHWA was created to plan, develop, finance, construct and operate joint water desalination and softening plant. The City Water Fund contributed $12,673,812 to PHWA for the acquisition and construction of property, plant, and equipment and the amount was reported as investment in joint venture. The balance is adjusted yearly based on the City's pro rata share of PHWA's income or loss. The balance of the investment is $5,376,228 as of June 30, 2023.
Under the Agreement, the City:
• Received capacity rights in water facilities, namely the right to use a portion of each of the water facilities constructed and operated by PHWA, and the right to take its proportionate share of water produced and available from each of the facilities.
• Owns an undivided interest, equal to its pro rata contribution, in all property and facilities acquired by PHWA.
• Bears financial responsibility for and all rights to the portian of the water facilities capacity attributable to its own capacity and the capacity attributable to PHWA's customers. • Is responsible for its proportionate share of PHWA's debts, liabilities, and obligations.
The following is the net position of PHWA as of June 30, 2023:
NET POSITION
Net investment in capital assets $ 11,446,720
Restricted 457,707
Unrestricted 1,584,165
Total net position $ 13,488,592
Agenda Item No. 13 Page 76 of 169
49 CC Agenda 05-20-2024
pity of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 6 - INTERFUND TRANSACTIONS
Interfund transactions are reported as either loans, services provided, reimbursements, or transfers. Loans are reported as interfund receivables and payables, as appropriate, and are subject to elimination upon consolïdation. Services provided, deemed to be at market ar near market rates, are treated as revenues and expenditures/expenses.
Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers among governmental funds are netted as part of the reconciliation to the government-wide financial statements.
A. Due From/To Other Funds
Due to and from balances result from the time lag between the dates that interfund goods and services are provided or reimbursable expenditures occur, transactions are recorded in the accounting system, and payments between funds are made.
Indïvidual fund interfund receivable and payable balances at June 30, 2023, are as follows:
Fund Due From Due To
Major Governmental Fund:
General Fund $ 154,635 $ 20,129
Nonmajor Governmental Funds:
Community Benefit Fund 44,587
Housing Successor Agency Fund 27,419
Surplus Property Authority Fund 250 5,936
Proprietary Funds:
Housing Authority Fund 53,484 19,821
Water Plant Fund 90,477
Total $ 208,369 $ 208,369
B. Interfund Transfers
Interfund transfers consist of transfers from funds receiving revenue to funds through which the resources are to be expended.
Interfund transfers for the 2022-2023 fiscal year are as follows:
Fund Transfers In Transfers Out
Major Governmental Funds:
General Fund $ 3,469,193 $ 354,717
Nonmajor Governmental Funds:
Neighborhood Preservation Fund 14,601
Stormwater Program Fund 191,483 40,802
Drainage Assessment District Fund 86,122
Light Assessment District Fund 66,646 7,893
Median Assessment District Fund 83,487
COPS AB3229 Fund 165,271
Traffic Safety Fund 24,320
Gas Tax Fund 19,001
Senior Nutrition Grant Fund 180
Surplus Property Authority Fund 2,466
Pension Obilgation Bonds Fund 4,345
Housing Successor Agency Fund 275,864
Capital Projects Fund 868,013 90,292
Major Proprietary Funds:
Water Utility Fund 288,998
Wastewater Utility Fund 87,074
Solid Waste Utility Fund 432,721
Housing Authority Fund 101,678
Water Plant Fund 174,917
Governmental Activities Internal Service Fund: 2,349,276 $ 4,599,680 $ 4,599,680
Agenda Item No. 13 Page 77 of 169
50 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 7 -CAPITAL ASSETS
Capital asset activity for the fiscal year ended June 30, 2023, was as follows:
Balance Balance
July 1, 2022 Additions Deletions Transfers June 30, 2023 Governmental Activities
Nondepreciable capital assets:
Land $ 5,779,175 $ 752,115 $ - $ - $ 6,531,290
Construction in progress 5,237,760 1,812,969 (115,325) (4,387,945) 2,547,459 Total nondepreciable capital assets $ 11,016,935 $ 2,565,084 $ (115,325) $ (4,387,945) $ 9,078,749 Depreciable capital assets:
Buildings, structures, and improvements $ 23,059,758 $ 211,408 $ - $ 1,727,091 $ 24,998,257 Office equipment 871,073 394,311 (670,700) 2,045 596,729 Mobile equpment 1,930,517 17,833 (620,226) - 1,328,124
Other equipment 1,883,979 126,662 (334,980) - 1,675,661 Infrastructure 17,96Q041 574,164 - 11,648 18,545,853
Total depreciable capital assets 45,705,368 1,324,378 (1,625,906) 1,740,784 47,144,624 Less accumulated depreciation
Buildings, structures, and ünprovements 14,485,021 609,014 - - 15,094,035 Office equipment 820,329 8,104 (670,700) - 157,733
Mobile equipment 1,654,491 74,065 (620,226) - 1,113,330 Other equipment 1,651,764 44,027 (330,410) - 1,365,381
Infrastruchue 12,075,539 344,947 - - 12,420,486
Total accumulated depreciation 30,687,144 1,085,157 (1,621,336) - 30,150,965 Net depreciable capital assets $ 15,018,224 $ 239,221 $ (4,570) $ 1,740,784 $ 16,993,659 Right-of--use leased assets being amortized:
Subscriptions $ - $ 569,361 $ - $ - $ 569,361
Vehicles 620,441 112,364 - - 732,805
Total right of-use leased assets being amortized 620,441 681,725 - - 1,302,166 Less accumulated amortizion:
Subscriptions - 214,924 - - 214,924
Vehïcles 121,072 127,133 - - 248,205
Total accumulated amortization 121,072 342,057 - - 463,129 Total right-to-use leased assets
being amortized 499,369 339,668 - - 839,037
Net capital assets $ 26,534,528 $ 3,143,973 $ (119,895) $ (2,647,161} $ 26,911,445 Balance Balance
July 1, 2022 Additions Deletions Transfers June 3Q 2023 Business-Type Activitïes
Nondepreciable capital assets:
Land $ 2,245,911 $ - $ - $ - $ 2,245,911
Construction in progress 365,630 674,392 - (64,804) 975,218 Total nondepreciable capital assets $ 2,611,541 $ 674,392 $ - $ (64,804) $ 3,221,129 Depreciable capital assets:
Buildings, structures, and ünprovements $ 6,095,155 $ 451,421 $ - $ 2,711,965 $ 9,258,541 Pipelines and Plant 16,045,248 - - - 16,045,248
Meters 4,924,905 - - - 4,924,905
Equipment 6,808,019 889,186 (1,412,520) - 6,284,685
Total depreciable capital assets 33,873,327 1,340,b07 (1,412,520) 2,711,965 36,513,379 Less accumulated depreciation
Buildings, structures, and improvements 5,424,880 105,005 - - 5,529,885 Pipelines and Plant 7,547,006 230,606 - - 7,777,612
Meters 2,950,277 246,245 - - 3,196,522
Equipment 3,910,887 338,589 (1,380,772} - 2,868,704
Total accumulated depreciation 19,833,050 920,445 (1,380,772) - 19,372,723 Net depreciable capital assets $ 14,040,277 $ 420,162 $ (31,748) $ 2,711,965 $ 17,140,656 Right-of--use leased assets being amortized:
Subscriptions $ - $ 1,131,150 $ - $ - $ 1,131,150
Vehicles 236,726 29,511 - - 266,237
Totalright-of- use leased assets being amortized 236,726 1,160,661 - - 1,397,387 Less accutulated amortizion:
Subscriptions - 452,460 - - 452,460
Vehicles 50,913 53,283 - - 104,196
Total accumulated amortization 50,913 505,743 - - 556,656 Total right-of--use leased assets
being amortized 185,813 654,918 - - 840,731
Net business-type capital assets $ 16,837,631 $ 1,749,472 $ (31,748) $ 2,647,161 $ 21,202,516 Agenda Item No. 13 Page 78 of 169
51 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 7 —CAPITAL ASSETS {Continued)
Depreciation and amortization expenses are charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or program as shown below:
Governmental Activities
General government $ 256,706
Community development 43,005
Recreation and human services 308,937
Public safety 182,634
Public works b35,932
Total depreciation and amortization expense-governmental activities $ 1,427,214 Business-type Activities:
Water Utility $ 466,624
Wastewater Utility 451,331
Solid Waste Utility 381,676
Housing Authority 126,557
Total depreciation and amortization expense-business-type activities $ 1,426,188 NOTE 8 —LONG-TERM LIABILITIES
A. Compensated Absences
Governmental Accounting Standards Board Statement No. 16 identifies certain items that should be accrued as a liability as benefits are earned by employees, but only to the extent it is probable that the employer will compensate the employees for the benefits through cash payments conditioned on the employee's termination or retirement.
The City's employees accumulate earned but unused benefits, which can be converted to cash at termination of employment. The non-current portion of these vested benefits, payable in accordance with various collective bargaining agreements, at June 30, 2023, total $1,009,926 for governmental activities and $364,477 for business-type activities.
B. Pension Obligation Bonds
On April 1, 2007, the City of Port Hueneme, pursuant to an Agreement with the California Statewide Communities Development Authority, issued $4,305,000 or 6.6% of Series A-1 and $6,374,956 or 28.54% of Series A-2 for a total of $10,679,956 of Pension Obligation Bonds. The aggregate total amounts of the bonds for all agencies were $87,475,b99, which includes $65,140,000 of Series A-1 current interest and $22,335,699 of Series A-2 capital appreciation bonds. The issuance of the bonds provided monies to meet the City's obligation to pay the Ciry's unfunded accrued actuarial liability {"UAAL") to the California Public Employees Retirement System{"PERS").The City's obligation includes, among others, the requirement to amortize the unfunded accrued liability over amulti-year period. On April 1, 2007, the City contributed $10,404,400 of the bond proceeds toPERSto fund a portion of the unfunded liability for the Miscellaneous and Safety Plans that provides retirement benefits to the City employees and public safety officers.
Installments related to Series A-2 Capital Appreciation Bonds is due and payable on June 1 of every year, commencing June 1, 2009 and ending on June 1, 2035. The rate of interest varies from 5.1060% to 5.754% per annum.
Agenda Item No. 13 Page 79 of 169
52 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 8 -LONG-TERM LIABILITIES (Continued]
I: Pension Obligation Bonds (Continued)
The balance outstanding as of June 30, 2023 was $6,986,435, including accreted interest of $4,386,539.
76.52% was reported under governmental activities and 23.48% was reporting under business-type activities.
The annual debt service requirements are as follows:
C
Fiscal Year
Ending June 3 0
2024
2025
2026
2027
2028
2029-2033
2035-2046
Accredited Interest
Total
Equipment Lease Purchase
Total
Principal Interest Payments
$ 247,874 $ 397,126 $ 645,000
241,674 423,326 665,000
236,698 453,302 690,000
230,310 479,690 710,000
224,983 510,017 735,000
1,040,679 3,014,321 4,055,000
377,678 1,432,322 1,810,000
4,386,539 - 4,386,539
$ 6,986,435 $ 6,710,104 $ 13,696,539
~
On December 5, 2019, the City issued the Equipment Lease Purchase Agreement for the principal amount of $1,240,068. 17 annual payments of principal and interest are due under the obligation on September 1. The balance outstanding as of June 30, 2023 was $1,154,004.
The annual debt service requirements are as follows:
Fiscal Year Total
Ending June 30 Principal Interest Payments
2024 $ 35,845 $ 29,954 $ 65,799
2025 41,261 29,023 70,284
2026 48,646 27,952 76,598
2027 54,811 26,689 81,500
2028 61,333 25,266 86,599
2029-2033 418,238 98,713 516,951
2034-2037 493,870 33,285 527,155
Total $ 1,154,004 $ 270,882 $ 1,424,886
Enemy Conservation Assistance Act (ECA) Loan Agreement
On January 27, 2020, the Cüy entered into a loan agreement with California Energy Commission for an amount of $840,272, which is used for energy efficiency and renewable energy projects. The interest rate is 1%. 37 semiannual payments of principal and interest are due under the obligation on June 22nd and December 22nd. The balance outstanding as of June 30, 2023 was $758,741.
Agenda Item No. 13 Page 80 of 169
53 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 8 -LONG-TERM LIABILITIES {Continued)
D. Energy Conservation Assistance Act (ECA) Loan Agreement (Continued The annual debt service requirements are as follows:
Fiscal Year Total
Ending June 30 Principal Interest Payments
2024 $ 42,499 $ 7,502 $ 50,001
2025 42,945 7,056 50,001
202b 43,375 6,625 50,000
2027 43,810 6,190 50,000
2028 44,234 5,767 50,001
2029-2033 227,979 22,023 250,002
2034-2038 239,643 10,360 250,003
2039-2040 74,256 744 75,000
Total $ 758,741 $ 66,267 $ 825,008
E. Series 2006D-1 Revenue Bonds
On October 1, 2006, the City issued $5,270,000 in revenue bonds, maturing on various dates between 2007 and 2037 with interest rates ranging from 4% to 4.125%. Bond proceeds were used to finance and refinance certain public capital improvements of the City and to pay certain costs of issuance incurred in connection with the Series 2006D Bonds. Annual principal payment ranging from $85,000 to $300,000 is due and payable every October 1 of each year. The balance outstanding as of June 30, 2023 was $3,370,000.
The annual debt service requirements are as follows:
Fiscal Year Total
Ending June 30 Principal Interest Payments
2024 $ 165,000 $ 14b,306 $ 311,306
2025 170,000 139,081 309,081
2026 180,000 131,425 311,425
2027 185,000 123,441 308,441
2028 195,000 115,128 310,128
2029-2033 1,100,000 437,106 1,537,106
2034-2038 1,375,000 160,088 1,535,088
Total $ 3,370,000 $ 1,252,575 $ 4,622,575
F. Leases Payable
The City has entered leases for vehicles in various departments. The terms of the agreements are 60 months.
The calculated interest rate used was from 0.417% to 6.250%. At June 30, 2023, the outstanding balance of the leases was $659,588.
Agenda Item No. 13 Page 81 of 169
54 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financïal Statements
June 30, 2023
NOTE 8 —LONG-TERM LIABILITIES (Continued)
F. Leases Payable (Continued)
The future lease payments are as follows:
Fiscal Year Total
Ending June 30 Principal Interest Payments
2024 $ 190,379 $ 28,088 $ 218,467
2025 201,244 17,223 218,467
2026 143,261 6,560 149,821
2027 109,771 1,379 111,150
2028 14,933 69 15,002
Total $ 659,588 $ 53,319 $ 712,907
G. Subscription Liabilities
In July 2022, the City entered into a 36 month subscription far the use of OpenGov. An initial subscription liability was recorded in the amount of $192,311. As of June 30, 2023, the value of the subscription liability is $128,207. The City is required to make annual fixed payments of $66,680. The subscription has an interest rate of 4.00%.
In August 2022, the City entered into a 60 month subscription for the use of Tyler Technologies ERP System.
An initial subscription liability was recorded in the amount of $1,508,200. As of June 30, 2023, the value of the subscription liability is $728,119. The City is required to make variable payments as described in the contract. The subscription has an interest rate of 4.00%.
The future SBITA payments are as follows:
Fiscal Year Total
Ending June 30 Principal Interest Payments
2024 $ 63,857 $ 2,823 $ 66,680
2025 537,610 222 537,832
2026 432,480 - 432,480
2027 236,028 - 236,028
Total $ 1,269,975 $ 3,045 $ 1,273,020
H. Other Post-Employment Liability
In accordance with GASB Statement No. 75, the City is required to measure and report liabilities associated with OPEB. The City's estimated OPEB liability on June 30, 2023 was $4,029,124. For governmental funds, these expenses are incurred by the General Fund. See Note 12 for further detail.
I. Net Pension Liability
In accordance with GASB Statement No. 68, the City is required to measure and report liabilities associated with its pension liability. Pension expense in charged to functions and programs based on their proportionate share of total payroll cost. The City's estimated net pension liability on June 30, 2023, was $39,572,628. For governmental funds, these expenses are typically incurred by the General Fund. See Note 11 for further detail.
Agenda Item No. 13 Page 82 of 169
55 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 9 -CHANGES IN LONG-TERM LIABILITIES
The following is a summary of long-term liability activities for the fiscal year ended June 30, 2023 Governmental Activities
Balance, Balance Due Within
July 1, 2022 Additions Deletions Reclass June 30, 2023 One Year Compensated absences $ 778,149 $ 768,039 $ 536,262 $ - $ 1,009,926 $ 696,833 Pension Obilgation Bonds 5,517,239 307,031 478,250 - 5,346,020 189,673 Equipment lease purchase 1,184,740 - 12,135 (716,968) 455,637 14,153 ECA Loan agreement 800,838 - 16,621 (484,642) 299,575 16,780 Leases payable 500,443 112,364 118,466 - 494,341 137,062 Subscription liability - 569,361 155,712 - 413,649 63,857 OPEB liability 3,íO7,183 - 84,674 - 3,022,509 -
Net pension liability 16,619,376 16,770,029 - - 33,389,405 - Total $ 28,507,968 $ 18,526,824 $ 1,402,120 $ (1,201,610) $ 44,431,062 $ 1,118,358 Busmess-tvbe Activities
Balance Balance Due Within
July 1, 2022 Additions Deletions Reclass June 30, 2023 One Year Compensated absences $ 249,901 $ 464,965 $ 350,389 $ - $ 364,477 $ 239,326 Pension Obilgation Bonds 1,692,953 94,212 146,750 - 1,640,415 58,201 Series 2006D-1 Revenue Bond 3,525,000 - 155,000 - 3,37Q000 165,000 Equípment lease purchase - - 18,601 716,968 698,367 21,692 ECA Loan agreement - - 25,476 484,642 459,166 25,719
Leases payable 186,244 29,511 50,508 - 165,247 53,317
Subscription liability - 1,131,150 274,824 - 856,326 -
OPEB liability 954,256 52,359 - - 1,006,615 -
Net pension liability 5,702,353 480,870 - - 6,183,223 - Total $ 12,310,707 $ 2,253,067 $ 1,021,548 $ 1,201,610 $ 14,743,836 $ 563,255 NOTE 10 -RISK MANAGEMENT
A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City of Port Hueneme is a member of the CALIFORNIA JOINT POWERS INSURANCE AUTHORITY (Authority). The Authority is composed of 123 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs far the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through opine-member Executive Committee.
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool.
Agenda Item No. 13 Page 83 of 169
56 CC Agenda 05-20-2024
City of Part Hueneme
Notes to the Basic Financial Statements
June M, 2023
NOTE 10 —RISK MANAGEMENT (Continued)
A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement (Continued Primary Liability Program -Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4} Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation withïn the first and second loss layers.
The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses also have a $50 million per occurrence limit. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority's website: hops://cjpïa.or~,í`coverage/risk-sharing-pools/.
B. Primary Self-Insurance Programs of the Authority
Primary Workers' Compensation Program -Claims are pooled separately between public safety (police and fire) and general government exposures. (1}The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2} The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4} Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.
For 2022-23 the Authority's pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer's Liability losses from $5 million to $10 million are pooled among members.
C. Purchased Insurance
Pollution Legal Liability Insurance -The City of Port Hueneme participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Port Hueneme. Coverage is on a claimsmade basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million.
Property Insurance -The City of Port Hueneme participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of Port Hueneme property is currently insured according to a schedule of covered property submitted by the City of Port Hueneme to the Authority. City of Port Hueneme property currently has all-risk property insurance protection in the amount of $9,089,660. There is a $10,000 deductible per occurrence except for nonemergency vehicle insurance which has a $2,500 deductible.
Earthquake and Flood Insurance -The City of Port Hueneme purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. City of Port Hueneme property currently has earthquake protection in the amount of $7,767,673. There is a deductible of 5%per unit of value with a minimum deductible of $100,000.
Crime Insurance -The City of Port Hueneme purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority.
Agenda Item No. 13 Page 84 of 169
57 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 10 —RISK. MANAGEMENT {Continued)
C. Purchased Insurance (Çontinued)
Special Event Tenant User Liability Insurance -The City of Port Hueneme further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and is paid to the City of Port Hueneme according to a schedule. The City of Port Hueneme then pays for the insurance. The insurance is facilitated by the Authority.
D. Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions ín pooled or insured liability coverage in 2022-23.
NOTE ll — PENSION PLAN
A. General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (the Plan), administered by the California Public Employees' Retirement System (Ca1PERS). The Plan's benefit provisions are established by statute. The Plan is included as a pension trust fund in the Ca1PERS' Annual Comprehensive Financial Report, which is available online at www.calpers.ca.gov.
The Plan consists of a miscellaneous pool and a safety pool (referred to as "risk pools"), which are comprised of individual employer miscellaneous and safety rate plans, respectively, including those of the City of Fort Hueneme.
The City of Port Hueneme's employer rate plans in the miscellaneous risk pool include the Miscellaneous plan (Miscellaneous) and the PEPRA Miscellaneous plan (PEPRA Misc.).
Benefits Provided
The Plan provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Classic members and PEPRA Safety members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. PEPRA Miscellaneous members with five years of total service are eligible to retire at age 52 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after five years of service. The death benefit is the Basic Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law.
The Plans' provisions and benefits in effect at June 30, 2023, are summarized as shown below:
Miscellaneous
Prior to On or after
Hire Date January 1, 2013 January 1, 2013
Benefit formula 2.0% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50-63 52-67
Monthly benefits, as a % of eligible compensation 1.426% to 2.418% 1.0% to 2.5% Required employee contribution rates 8.00% 6.75%
Required employer contribution rates 14.03% + $1,878,925 7.47% + $5,294 Agenda Item No. 13 Page 85 of 169
58 CC Agenda 05-20-2024
January 1, 2013 January 1, 2013
3.0%@55 2%@62
3 years service
monthly far life
50-63
3.00°/a
9.00%
21.84%+ $1,081,846
5 years service
monthly for life
52-67
2.00% - 2.70%
12.00%
12.78% + $1,908
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 11 — PENSION PLAN (Continued)
A. General Information about the Pension Plans (Continued Benefits Provided (Continued)
Prior to On or after
Hire Date
Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of eligible compensation
Required employee contribution rates
Required employer contribution rates
Contributions
Section 20814(c) of the California Public Employees' Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions far the Plan is determined annually on an actuarial basis as of June 30 by CaIPERS. The actuaríally determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to fmance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
Contributions to the pension plan from the City were $2,666,509 for the Miscellaneous Plan $1,708,526 far the Safety Plan for the fiscal year ended June 30, 2023.
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions At June 30, 2023, the City reported a liability of $39,572,628 for its proportionate share of the net pension liabílity, $24,749,264 from the Miscellaneous Plan and $14,823,364 from the Safety Plan. The net pension liability was measured as of June 30, 2022, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021 rolled forward using standard update procedures. The City's proportion of the net pension liabilïty was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all Pension Plan participants, actuarially determined. The City's proportion share of net pension liability for miscellaneous and safety plans as of June 30, 2022, and 2021 was as follows:
Miscellaneous Safety
Proportion-June 30, 2021 0.76826% 0.22037%
Proportion-June 30, 2022 0.52892% 0.21572%
Change-Increase (Decrease) -0.23934% -0.00465%
For the fiscal year ended June 30, 2023, the City recognized a pension credit of $2,858,645. Pension expense represents the change in the net pension liability during the measurement period, adjusted for actual contributions and the deferred recognition of changes in investment gain/loss, actuarial gain/loss, actuarial assumptions or method, and plan benefits.
Agenda Item No. 13 Page 86 of 169
59 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 11—PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:
Differences between expected and actual experience
Changes in assumptions
Net difference between projected and actual earnings on retirement plan investments
Changes in proportion and differences between the City
contributions and proportionate share of contributions
Adjustment due to differences in proportion
City's contributions subsequent to the measurement date Differences between expected and actual experience
Changes in assumptions
Net difference between projected and actual earnings on retirement plan investments
Changes in proportion and differences between the City
contributions and proportionate share of contributions
Adjustment due to differences ïn proportion
City's contributions subsequent to the measurement date Miscellaneous Plan Safety Plan
Deferred Outflows Deferred Inflotivs of Deferred Outflows Deferred Inflows of of Resources Resources of Resoruces Resources
$ 497,014 $ 332,878 $ 613,485 $ 160,970
2,536,079 - 1,494,644 -
4,533,408 - 2,340,816 -
- 532,234 - 1,181,688
SS,630 2,383,737 939,b78 -
2,666,509 - 1,708,526 -
$ 10,288,640 $ 3,248,849 $ 7,097,149 $ 1,342,658
City Total
Deferred Outflows Deferred Inflows of
of Resources Resources
$ 1,110,499 $ 493,848
4,030,723 -
6,874,224 -
- 1,713,922
995,308 2,383,737
4,375,035 -
$ 17,385,789 $ 4,591,507
Deferred outflows of resources and deferred inflows of resources above represent the unamartized portion of changes to net pension liability, to be recognized in future periods in a systematic and rational manner. $4,375,035 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the subsequent fiscal year ending June 30, 2024.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in the pension expenses as follows:
Miscellaneous Plan Safety Plan City Total
Amount Amount Amount
$ 720,423 $ 1,157,902 $ 1,878,325
588,543 937,441 1,525,984
291,528 522,695 814,223
2,772,788 1,427,927 4,200,715
$ 4,373,282 $ 4,045,965 $ 8,419,247
Fiscal year Ending June 30,
2024
2025
2026
2027
Agenda Item No. 13 Page 87 of 169
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CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 11 — PENSION PLAN (Continued)
B. Pensíon Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Actuarial Assumptions
The total pension liability in the June 30, 2021 actuarial valuation was determined using the following actuarial assumptions:
Miscellaneous
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Mortality
Past Retirement Benefit
Increase
June 30, 2021
June 30, 2022
Entry-Age Normal Cost Method
b90%
2.30%
Varies by Entry Age and Service
Derived using CaIPERS' Membership
Data for all Funds (1)
The lesser of contract COLA or 2.30%until
Purchasing Power Protection Allowance floor
on purchasing power applies, 2.30% thereafter
(1) The mortality table used was developed based on CaIPERS' speck data. The probabilities are based on the 2021 Ca1PERS' Experience Study for the period from 2001 to 2019. Pre-retúement and Post-retúement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CaIPERS' Experience Study and Review of Actuarial Changes in Assumptions
The discount rate changed from 7.15% to b.90% and the inflation rate changed from 2.50% to 2.30%.
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using abuilding-block method ïn which expected future real rates of return {expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, Ca1PERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds' asset classes, expected compound {geometric) returns were calculated over the next 20 years using abuilding-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as shown on the following page:
Agenda Item No. 13 Page 88 of 169
61 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 11—PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions ,(Continued)
New Strategic Real Return
Asset Class Allocation (a,b)
Global Equity -cap-weighted 30.0% 4.45%
Global Equity -non-cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporations 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.0% -0.59%
Total 100.0%
(a) An expected inflation of 2.30% was used for this period. (b) Figures are based on the 2021 Asset Liability Management Study.
Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projectïon of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was prajected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of prajected benefit payments to determine the total pension liability.
Subsequent Events
On July 12, 2021, Ca1PERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the thresholds specified in CaIPERS' Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of
0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.
On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction far administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 Ca1PERS' Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions are reflected in the GASB Statement No. 68 accounting valuation reports for the June 30, 2022, measurement date.
Agenda Item No. 13 Page 89 of 169
62 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 11—PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in Discount Rate The following represents the City's proportionate share of the net pension liability calculated using the discount rate of 6.90 percent, as well as what the City's proportionate share ofthe net pension liability would be if it were calculated using a discount rate that is one percentage point lower (5.90 percent) or one percentage point higher (7.90 percent} than the current rate:
1%Decrease Current Discount Rate 1 %Increase
5.90% 6.90% 7.90%
Miscellanoues plans' share $ 35,424,524 $ 24,749,264 $ 15,966,174 Safety plan's share 22,030,419 14,823,364 8,933,225
Total City's share of net pension liabilty $ 57,454,943 $ 39,572,628 $ 24,899,399 Pension Plan Fiduciary Net Position
Detailed information about the pension plan's fiduciary net position is available in the separately issued CaIPERS financïal reports.
C. Payable to the Pension Plan
At June 30, 2023, the City had no amount outstanding for contributions to the pension plan required for the fiscal year ended June 30, 2023.
NOTE 12 — POST-EMPLOYMENT HEALTH CARE BENEFITS (OPEB)
A. Plan Description
The City provides medical, dental, and vision plan coverage through CaIPERS under the Public Employees' Medical and Hospital Care Act (PEMHCA). This coverage requires the employee to satisfy the requirements for retirement under Ca1PERS: either (a) attainment of age 50 {age 52, if a miscellaneous employee new to PERS on or after January 1, 2013) with 5 years of State or public agency service or (b) an approved disability retirement. The employee must begin his or her CaIPERS pension benefit within 120 days of terminating employment with the City to be eligible to continue medical coverage through the City and be entitled to the employer subsidy. If an eligible employee is not already enrolled in the medical plan he or she may enroll within 60 days of retirement or during any future open enrollment period. Coverage may be continued at the retiree's option for his or her lifetime. A surviving spouse and other eligible dependents may also continue coverage.
The City sets aside assets in an irrevocable trust to prefund its OPEB liability and has been making annual contributions to the trust based on the Actuarially Determined Contribution each year.
B. Benefits Provided
The City is obligated to contribute toward the cost of retiree medical coverage for the retiree's lifetime or until coverage is discontinued. All employees who retire from the City receives contribution not less than the required PEMHCA minimum employer contribution (theMEC).TheMECwas $149 per month in 2022 and $151 per month in 2023 and is expected to be adjusted annually at roughly the rate of CPI medical cost increases.
In addition to theMECbenefit described above, additional benefits may apply to retirees based on bargaining unit, date of hire, date of retirement and years of City service. These benefits are summarized below. These additional benefits do not require the retiree to select Ca1PERS medical coverage.
Agenda Item No. 13 Page 90 of 169
63 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 3Q, 2023
NOTE 12 — POST-EMPLOYMENT HEALTH CARE BENEFITS {OPEB) {Continued) B. Benefits Provided (Continued
Additional benefits for POA: The City provides additional reimbursements to qualifying POA retirees. Below summarizes the eligibility requirements and the benefits provided:
Minimum Years of
Date of Hire Date of Retirement Service Retirement Type Benefit 2-Party HMO Premium
Before July 1, 2011 On or After July 1, 2011 15 Any (includesMEC) Premium (includesMEC)$668
per month (includeds theMEC)
but no more than actual
premiums for retiree and oiled
Before July 1, 2011 After July 1, 2011 15 Service dependents Industrial
Before July 1, 2011 After July 1, 2011 12.5 Disabilities $325 (includes)MEC.
On or After July 1, 2011 Any Any Any MEConly
C. Employees Covered
As of the June 30, 2022 actuarial valuation, the following current and former employees were covered by the benefit terms under the City's Plan:
Active plan members 113
Inactive plan members or beneficiaries currently receiving benefits 47 Inactive plan members entitled to but not yet receiving benefits 63 Total 223
D. Contributions
The City currently fmances benefits on apay-as-you-go basis.
E. Total OPEB Liability
The City's OPEB Liability was measured as of June 30, 2023 and the total OPEB liability used to calculate the OPEB Liability was determined by an actuarial valuation as of June 30, 2422 rolled forward to June 30, 2023 using standard update procedures.
Actuarial assumptions. The total OPEB liability was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Salary increases 3.00%
inflation 2.50%
Healthcare cost trend rate 5.60% in the first year trending down to 3.90% by 2076 Pre-retirement mortality rates were based on the Ca1PERS' tables.
Actuarial assumptions used in the July 1, 2022 valuation were based on a review of plan experience, established pattern of practice an Ca1PERS experience studies.
F. Discount rate
As of June 30, 2023, the discount rate was 5.90% blending the municipal bond index rate and return on trust assets and assumed future contribution equal to b9.4%, the mast recent 5 year average of the percentage of actuarially determine contribution (ADC) funded, The discount rate decreased from 6.00% as of June 30, 2022 to 5.90% as of June 30, 2023.
Agenda Item No. 13 Page 91 of 169
64 CC Agenda 05-20-2024
212,304
333,927
60,288
(3 04,002)
302,517
$ 5,807,665
490,805
148,029
(304,002)
334,832
$ 1,778,541
212,304
333,927
60,288
(490,805)
(148,029)
tJ~,~ ~~~
$ 4,029,124
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 12 — POST-EMPLOYMENT HEALTH CARE BENEFITS (OPEB) (Continued) G. Changes in the OPEB Liability
Total OPEB Plan Fiduciary Net OPEB
Liabilíty Net Position Liability
Balance at June 30, 2022 $ 5,505,148 $ 1,443,709 $ 4,061,439 (Valuation Date June 30, 2022)
Changes recognized for the measurement period:
Service cost
Interest
Difference between expected and actual experience
Changes in assumptions
Contributions -employer
Net investment income
Benefit payments
Net Changes
Balance at June 30, 2023
(Measurement Date June 30, 2023)
Sensitivity of the OPEB liability to changes in the discount rate. The following presents the OPEB liability, as well as what the OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (4.90 percent) or 1 percentage-point higher (690 percent) than the current discount rate:
OPEB Liability
1 % Decrease
n nnn/
~ '+,V7`#,JJG
Discount Rate
c nn°i
11 `t,VL7,1G`t
1 % Increase
~ nnn/
~ ~,~+~i,i~~
Sensitivity of the OPEB liability to changes in the healthcare cost trend rates. The following presents the OPEB liability, as well as what the OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 percentage-point lower (4.90 percent decreasing to 2.90 percent) or 1 percentage-point higher (690 percent decreasing to 4.90 percent) than the current healthcare cost trend rates:
1 A / T _ _ _ _ _. _ T._ _ ._ _7 Tl _a. _ 1 n / T__ _ __ _ _ _ _ OPEB Liability $ 3,529,574 $ 4,029,124 $ 4,645,752
H. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2023, the City recognized OPEB expense of $465,719. As of the fiscal year ended June 30, 2023, the City reported deferred outflows and deferred inflows of resources related to OPEB from the fallowing sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between expected and actual experience $ 124,642 $ 104,612 Net difference between projected and actual earnings 38,673 - Changes in assumptions 159,144 67,084
$ 322,459 $ 171,696
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in the OPEB expenses as follows:
Agenda Item No. 13 Page 92 of 169
65 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basïc Financial Statements
June 30, 2023
NOTE 12 — POST-EMPLOYMENT HEALTH CARE BENEFITS {OPEB) (Continued) H. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Cantinued) Fiscal Year Ending June 30, Amount
2024 $ 9,622
2025 936
2026 59,532
2027 6,751
2028 31,781
thereafter 42,051
$ 150,673
NOTE 13 —CONTINGENCIES AND COMMITMENTS
A. Legal
The City is a party to claims and lawsuits arising in the ordinary course of business. The City's management and legal counsel are of the opinion that the ultimate liability, if any, arising from these claims will not have material adverse impact on the financial position of the City.
B. Grant Pro r ~ ams
The City participates in a number of federal and state assisted grant programs. These programs are subject to program compliance audits by the grantors. The amount, if any, of expenditures which maybe disallowed by the granting agencies cannot be determined at this time although the City expects such amounts, if any, to be immaterial.
C. Construction and Other Significant Commitments
Listed below are the projects for uncompleted contracts outstandïng as of June 30, 2023.
Software services agreement—OpenGov $133,360
ERP Enterprise System —Tyler Technologies 608,522
Total Commitments as of June 30, 2023 741 882
NOTE 14 —EXCESS EXPENDITURES OVER APPROPRIATIONS
The following funds had expenditures in excess of appropriations for the fiscal year ended June 30, 2023:
Nonmajor Funds:
Stormwater Program Fund $ 71,564
Light Assessment Fund 14,569
Community Benefit Fund 37,842
NOTE 15 —SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
On June 29, 2011, Assembly Bills lx 26 (the "Dissolution Act") and lx 27 were enacted as part of the FY 2011-12 state budget package.
On June 27, 2012, as part of the FY 2012-13 state budget package, the Legislaíure passed, and the Governor signed AB 1484, which made technical and substantive amendments to the Dissolution Act based on experience to-date at the state and local level in implementing the Dissolution Act.
Agenda Item No. 13 Page 93 of 169 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 15 — SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY (Continued) Under the Dissolution Act, each California redevelopment agency (each a "Dissolved RDA") was dissolved as of February 1, 2012, and the sponsoring community that formed the Dissolved RDA, together with other designated entities, have initiated the process under the Dissolution Act to unwind the affairs of the Dissolved RDA. A Successor Agency was created for each Dissolved RDA which is the sponsoring community of the Dissolved RDA unless it elected not to serve as the Successor Agency. On January 11, 2012, the City elected to serve as the Successor Agency of the Port Hueneme Redevelopment Agency.
The Dissolution Act also created oversight boards which monitor the activities of the successor agencies. The roles of the successor agencies and oversight boards is to administer the wind down of each Dissolved RDA which includes making payments due on enforceable obligations, disposing of the assets (other than housing assets) and remitting the unencumbered balances of the Dissolved RDAs to the County Auditor- Controller for distribution to the affected taxing entities.
The Dissolution Act allowed the sponsoring community that formed the Dissolved RDA to elect to assume the housing functions and take over the certain housing assets of the Dissolved RDA. If the sponsoring community does not elect to become the Successor Housing Agency and assume the Dissolved RDA's housing functions, such housing functions and all related housing assets will be transferred to the local housing authority in the jurisdiction. AB 1484 modified and provided some clarifications on the treatment of housing assets under the Dissolution Act. The City of Port Hueneme elected on January 11, 2012 to serve as the Housing Successor Agency.
Aft-er the date of dissolution, the housing assets, obligations, and activities of the Dissolved RDA have been transferred and are reported in a special revenue fund in the financial statements of the City. All other assets, obligations, and activities of the Dissolved RDA have been transferred and are reported in a fiduciary fund {private-purpose trust fund) in the financial statements of the City.
The Dissolution Act and AB 1484 also establish roles for the County Auditor-Controller, the California Department of Finance (the "DOF") and the California State Controller's office in the dissolution process and the satisfaction of enforceable obligations of the Dissolved RDAs.
The County Auditor-Controller is charged with establishing a Redevelopment Property Tax Trust Fund {the "RPTTF") far each Successor Agency and depositing into the RPTTF for each six-month period the amount of property taxes that would have been redevelopment property tax increment had the Dissolved RDA not been dissolved. The deposit in the RPTTF fund is to be used to pay to the Successor Agency the amounts due on the Successor Agency's enforceable obligations for the upcoming six-month period.
The Successor Agency is required to prepare a recognized obligation payment schedule {the "ROPS") approved by the aversight board setting forth the amounts due for each enforceable obligation during each six-month period. The ROPS is submitted to the DOF for approval. The County Auditor-Controller will make payments to the Successor Agency from the RPTTF fund based on the ROPS amount approved by the DOF. The ROPS is prepared in advance for the enforceable obligations due over the next six months.
The process of making RPTTF deposits to be used to pay enforceable obligations of the Dissolved RDA will continue until all enforceable obligations have been paid in full and all non-housing assets of the Dissolved RDA have been liquidated.
As part of the dissolution process, AB 1484 required the Successor Agency to have full diligence reviews of both the low- and moderate-income housing funds and all other funds to be completed by October 15, 2012 and January 15, 2013 to compute the funds (cash) which were not needed by the Successor Agency to be retained to pay for existing enforceable obligations. These funds were to be remitted to the CAC after the DOF completed its review of the due diligence reviews.
Agenda Item No. 13 Page 94 of 169
67 CC Agenda 05-20-2024
City of Port Hueneme
Notes to the Basic Financial Statements
June 30, 2023
NOTE 15 —SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY (Continued) The Successor Agency made payments totaling $5,113,b79 to the CAC as a result of the due diligence reviews. The DOF issued a Finding of Completion on May 24, 2013 in which DOF concurred that the Successor Agency has made full payments of any payments required as a result of the due diligence reviews. The Finding of Completion allows the placement of loan agreements between the former redevelopment agency and the City on the ROPS, as an enforceable obligation.
AB 14$4 specifies the actions to be taken and the method of repayment for advances by the Successor Agency (former Redevelopment Agency) to the various funds of the City. Upon application and approval by the successor agency and approval by the oversight board, loan agreements (advances) entered into by former redevelopment agency and the city shall deem to be enforceable obligations provided that the oversight board makes a finding that the advances were far legitimate redevelopment purposes. The accumulated interest on the remaining amount of advances will be recalculated from origination at the interest rate earned by funds deposited into the Local Agency Investment Fund.
The advances are to be repaid with a defined schedule over a reasonable term of years at an interest rate not to exceed the interest rate earned by the funds deposited into the Local Agency Investment Fund. Loan repayments could begïn in the 2014-15 fiscal year as governed by the criteria in the health and code safety section.
During the fiscal year 2022-23, the Department of Finance (DOF) received RPTTF distribution of $1,344,501.
The 2017 Tax Allocation Refunding Bonds (2017 Bonds) final payment was made as of May 1, 2023 and therefore the balance is $0 as of June 30, 2023.
Balance Balance Due Within
July 1, 2022 Additions Deletions June 30, 2023 n„a VA~r 2017 Tax Allocation Refunding Bond $ 1,334,556 $ $ 1,334,556 $ - $ Total $ 1,334,556 $ - $ 1,334,556 $ - $ -
NOTE 16 — PRIOR-PERIOD ADJUSTMENT
Governmental Activities:
Correction of prior fiscal year OPEB Contributions to PARS, cannabis revenue, and deferred inflow for unavailable loan revenue Proprietary Funds:
Water Utility Fund
Overstatement of prior year OPEB Contributions to PARS
Wastewater Utility Fund
Overstatement of prior year OPEB Contributions to PARS
Solid Waste Fund
Overstatement of prior year OPEB Contributions to PARS
Water Plant Fund
Transfer of Pension and OPEB liability to PHWA.
Statement of Activities Fund Statements
Governmental Business-type Governmental Proprietary
Activities Activities Funds Funds
$ (z96,280> $ - $ (242,714) $ -
- 76,867 - 76,867
- 36,758 - 36,758
- 61,162 - 61,162
- 932,417 - 932,417
$ {296,280) $ 1,107,204 $ (242,714) $ 1,107,204
Agenda Item No. 13 Page 95 of 169 CC Agenda 05-20-2024
REQUIRED SUPPLEMENTAL INFOT;MATION SECTION
Agenda Item No. 13 Page 96 of 169 CC Agenda 05-20-2024
Agenda Item No. 13 Page 97 of 169 CC Agenda 05-20-2024
City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual General Fund
For the Fiscal Year Ended June 30, 2023
Variance
with
Original Final Final
Budget Budget Amounts Budget
REVENUES
Taxes $ 13,660,056 $ 14,931,956 $ 1b,028,679 1,096,723
Licenses and permits 723,605 796,467 788,987 (7,480)
Intergovernmental 300,746 464,596 1,686,702 1,222,106
Charges for services 2,769,879 2,959,426 3,199,443 240,017 Fines, forfeitures, and penalties 469,400 455,250 722,431 267,181 Use of money and property 1,244,456 860,487 1,475,510 615,023 Miscellaneous 2,552,711 2,921,874 2,182,970 (738,904)
Total revenues 21,720,853 23,390,056 26,084,722 2,694,66b
EXPENDITURES
Current:
General government 6,313,960 8,603,172 7,163,818 1,439,354 Public safety 10,060,834 10,543,103 10,888,513 (345,410) Public works 2,946,210 3,778,562 2,413,644 1,364,918
Recreation and human services 590,374 774,028 658,994 115,034 Community development 2,228,762 2,369,887 2,144,999 224,888 Capital outlay 338,000 7,585,166 2,863,519 4,721,647
Debt service:
Principal retirement 486,214 602,384 789,259 (186,875}
Interest - 2,739 38,257 (35,518)
Total expenditures 22,964,354 34,259,041 26,961,003 7,298,038 Excess of revenues over (under) expenditures (1,243,501) (10,868,985) (876,281) 9,992,704
OTHER FINANCING SOURCES (USES)
Transfers in 2,375,741 2,489,169 3,469,193 980,024
Transfers out (6,000) (6,000) (354,717) (348,717)
Proceeds from capital leases and SBITAs 208,144 681,725 473,581 Total other financing sources (uses) 2,369,741 2,691,313 3,796,201 1,104,888 Net change in fund balance $ 1,126,240 $ (8,177,672) 2,919,920 $ 11,097,592
FUND BALANCE
Beginning of fiscal year 45,053,879
Prior-period adjustment (242,714)
Beginning of fiscal year, restated 44,811,165
End of fiscal year $ 47,731,085
See notes to the required supplemental information.
69 Agenda Item No. 13 Page 98 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Notes to the Budgetary Comparison Schedule
For the Fiscal Year Ended June 30, 2023
NOTE 1—BUDGETARY BASIS OF ACCOUNTING
The City adopts annual budgets for the General Fund and Special Revenue Funds and adopts project length budgets for projects within the City Capital Projects Fund as well as City's debt service funds.
The City' s budget is a detailed operating plan, which identifies estimated costs and results in relation to estimated revenues. The budget includes (1) the programs, projects, services, and activities to be provided during the fiscal year, (2) the estimated resources (inflows) and amounts available for appropriation and (3) the estimated charges to appropriations {outflows). The budget represents a process through which policy decisions are made, implemented, and controlled. The City's policy prohibits expending funds for which there is no legal appropriation.
The City's procedures for preparing the budgetary data reflected in the financial statements are:
• The budget is prepared under the City Manager's direction and adopted by the City Council, generally prior to June 30 of each year. It is revised periodically during the fiscal year by the City Council. The budget presented in the financial statements includes the original and final amounts.
• The budget serves as a policy document for the deliverance of public services; however, expenditures are individually approved by the City Council. The City Manager is authorized to transfer amounts within individual fund budgets without the approval of City Council. Additional appropriations during the fiscal year may be submitted to the City Council for review and approval. • Budget information is presented for the governmental fund types. Budgeted revenue amounts represent the original budget modified by Council-authorized adjustments during the year, which were contingent upon new, or additional revenue sources.
Budgeted expenditure amounts represent original appropriations adjusted for supplemental appropriations during the fiscal year. • Total expenditures of each governmental fund may not legally exceed fund appropriations, and total expenditures far each department may not legally exceed departmental appropriations. The City does not employ encumbrance accounting. The budgets conform, in all material respects, to generally accepted accounting principles. • Appropriations lapse at fiscal year-end to the extent they have not been expended, except for capital projects appropriations which lapse when individual projects are completed.
Budgets are adopted for all general, special revenue, capital projects, and debt service funds except far the Capital Projects Fund. 70 Agenda Item No. 13 Page 99 of 169 CC Agenda 05-20-2024 City of Port Hueneme
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY Last 10 Years*
As of June 30, 2023
The following table provides required supplementary information regarding the City's Pension Plan 2023 2022 2021 2020 2019
Proportion of the net pension liability 0.34260% 0.41273% 0.31442% 0.31553% 0.30357% Proportionate share of the net pension liability $ 39,572,628 $ 22,321,729 $ 34,210,069 $ 32,332,166 $ 29,252,937 Covered payroll $ 8,095,771 $ 7,879,096 $ 7,100,468 $ 7,801,933 $ 7,956,822 Proportionate share of the net pension liability as
percentage of covered payroll 488.81% 283.30% 481.80% 414.41% 367.65% Plan's total pension liability $ 49,525,975,138 $ 46,174,942,264 $ 43,702,930,887 $ 41,426,453,489 $ 38,944,855,364 Plan's fiduciary net position $ 37,975,170,163 $ 40,766,653,876 $ 32,822,501,335 $ 31,179,4ï4,067 $ 29,308,584,559 Plan fiduciary net position as a percentage of the
total pension liability 76.68% 88.29% 75.10% 75.26% 75.26% 2018 2017 2016 2015
Proportion of the net pension liability 0.29603% 0.29485% 0.29026% 0.27978% Proportionate share of the net pension liability $ 29,358,066 $ 25,513,760 $ 19,923,105 $ 17,409,518 Covered payroll $ 7,572,226 $ 8,428,793 $ 9,106,716 $ 8,620,998 Proportionate share of the net pension liability as
percentage of covered payroll 387.71% 302.70% 218.77% 201.94% Plan's total pension liability $ 37,161,348,332 $ 33,358,627,624 $ 31,771,217,402 $ 30,829,966,631 Plan's fiduciary net position $ 27,244,095,376 $ 24,705,532,291 $ 24,907,305,871 $ 24,607,502,515 Plan fiduciary net position as a percentage of the
total pension liability 73.31% 74.06% 78.40% 79.82%
Notes to Schedule:
Changes in assumptions
In the reporting fiscal year ended June 30, 2023, the discount rate was reduced from 7.15% to 6.90% and price inflation was reduced from 2.50% to 2.30%.
*- Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown. 71 Agenda Item No. 13 Page 100 of 169 CC Agenda 05-20-2024 City of Part Hueneme
SCHEDULE OF PENSION CONTRIBUTIONS
Last IO Years*
As of June 30, 2023
The fallowing table provides required supplementary information regarding the City's Pension Pian. 2023 2022 2021 2020 2019
$ 4,375,035 $ 3,824,377 $ 3,478,249 $ 3,018,338 $ 2,616,625 (4,375,035) (3,824,377) (3,478,249) (3,018,338) (2,616,625) $ 11,552,357 $ 8,095,771 $ 7,879,09b $ 7,100,468 $ 7,801,933
37.87% 47.24% 44.15% 42.51% 33.54%
Contractually required contribution (actuarially determined) Contribution in relation to the actuarially determined
contributions
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of covered payroll
201$ 2017 2016 2015
Contractually required contribution (actuarially deternined) Contribution in relation to the actuarially determined
contributions
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of covered payroll
$ 2,354,681 $ 2,105,195 $ 1,940,351 $ 1,866,578
(2,354,b81} (2,105,195) {1,940,351) (1,866,578)
$ - $ - $ - $ -
$ 7,956,822 $ 7,572,226 $ 8,428,793 $ 9,106,716
29.59% 27.80% 23.02% 20.50%
Notes to Schedule:
Changes in assumptions
In the reporting fïscal year ended June 30, 2023, the discount rate was reduced from 7.15% to 6.90% and price inflation was reduced from 2.50% to 2.30%.
*-Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown. 72 Agenda Item No. 13 Page 101 of 169 CC Agenda 05-20-2024 City of Port Hueneme
SCHEDULE OF CHANGES 1N THE OPEB LIABILITY AND RELATED RATIOS Last 10 Years*
As of June 30, 2023
Measurement Period 2023 2022 2021 2020 2019
Total OPEB Liability
Service cost $ 212,304 $ 175,551 $ 176,651 $ 186,283 $ 182,825 Interest on the total OPEB liability 333,927 326,948 310,523 315,760 297,885 Difference between expected and actual experience - 107,105 - (137,267} - Changes in assumptions 60,288 104,119 (100,900) 44,663 - Benefit payments (304,002) (299,186) (254,922) (243,472) (174,878) Net change in total OPEB Liability 302,517 414,537 131,352 165,967 305,832 Total OPEB liability - beginning 5,505,148 5,090,611 4,959,259 4,793,292 4,487,460 Total OPEB liability - ending (A] $ 5,807,665 $ 5,505,148 $ 5,090,611 $ 4,959,259 $ 4,793,292 Plan Fiduciary Net Position
Contributions -employer $ 490,805 $ 497,201 $ 522,558 $ 243,472 $ 472,483 Contributions -employee - - - - -
Net investment income (lass) 148,029 (219,721) 356,367 10,579 31,792 Benefit payments (304,002} (299,186) (254,922) (243,472} (174,878) Net change in plan fiduciary net position 334,832 (21,706) 624,003 10,579 329,397 Total plan fiduciary net position - beginning 1,443,709 1,465,415 841,412 830,833 501,436 Total plan fiduciary net posítion - ending [B] $ 1,778,541 $ 1,443,709 $ 1,465,415 $ 841,412 $ 830,833 Net OPEB Liability - ([A]-[B]) $ 4,029,124 $ 4,061,439 $ 3,625,196 $ 4,117,847 $ 3,962,459 Plan fiduciary net posítion as a percentage of the
total OPEB liability 30.62% 26.22% 28.79% 16.97% 17.33% Covered payroll $ 14,069,306 $ 11,013,408 $ 8,166,760 $ 9,732,551 $ 8,562,558 Total net OPEB liability as a percentage
of covered payroll 28.64% 36.88% 44.39% 42.31% 46.28%
Measurement Period 2018
Total OPEB Liability
Service cost $ 177,070
Interest on the total OPEB liability 279,543
Difference between expected and actual experience -
Changes in assumptions -
Benefit payments (185,448}
Net change in total OPEB Liabílity 271,165
Total OPEB liability - beginning 4,216,295
Total OPEB liability - ending [A] $ 4,487,460
Plan Fiduciary Net Position
Contributions -employer $ b85,448
Contríbutions -employee -
Net investment income (loss) 1,851
Administrative/trustee expenses (415)
Benefit payments (185,448)
Net change in plan fiduciary net position 501,436
Total plan fiduciary net position - beginning -
Total plan fiduciary net position - ending [B] $ 501,436 Net OPEB Liability - ([A]-[B]) $ 3,986,024
Plan fiduciary net position as a percentage of the
total OPEB liability 11.17%
Covered payroll $ 9,699,577
Total net OPEB liability as a percentage
of covered payroll 41.09%
Notes to Schedule:
Change in Assumptions
The discount rate decreased from 6.0% to 5.9%for the fiscal year ended June 30, 2023. *- Fiscal year 2018 was the 1st year of implementation, therefore only six years are shown. 73 Agenda Item No. 13 Page 102 of 169 CC Agenda 05-20-2024 City of Port Hueneme
SCHEDULE OF OPEB CONTRIBUTIONS
Last 10 Years*
As of June 30, 2023
The following table provides required supplementary information regarding the Authority's OPEB. 2023 2022 2021 2020 2019
Actuarially Determined Contribution (ADC)
Contributions in relation to the ADC
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of covered payroll
$ 527,170 $ 497,201 $ 493,159 $ 508,573 $ 503,530
(490,805) (497,201) (522,557) (243,472) (472,483)
$ 36,365 $ - $ (29,398) $ 265,101 $ 31,047
$ 14,069,306 $ 11,013,408 $ 8,166,758 $ 9,732,551 $ 8,562,558
3.49% 4.51% 6.40% 2.50% 5.52%
Actuarially Determined Contribution (ADC)
Contributions in relation to the ADC
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of covered payroll
$ 511,453
(685,448)
$ (173,995)
$ 9,699,577
7.07%
Nates taSchedule:
Change in Assumptions
The discount rate decreased from 6.0% to 5.9% for the fiscal year ended June 30, 2023. *- Fiscal year 2018 was the 1st year of implementation, therefore only six years are shown. 74 Agenda Item No. 13 Page 103 of 169 CC Agenda 05-20-2024
SUPPLEMENTAL INFORMATION SECTION
Agenda Item No. 13 Page 104 of 169 CC Agenda 05-20-2024 Agenda Item No. 13 Page 105 of 169 CC Agenda 05-20-2024
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
These funds account for revenue sources that are restricted far specific purposes (other than those resources to be expended solely for the construction of major capital facilities).
Neighborhood Preservation -This fund is used to account for Neighborhood Preservation revenues and expenses.
Stormwater Program -This fund is used to account for money partially funded by a countywide benefit assessment program collected by the County of Ventura on behalf of the cities in Ventura County, the County, and the Watershed Protection District.
Drainage Assessment District -This fund is used to account for funds received from special assessments on property owners to provide drainage in areas of the City not covered by other drainage district.
Light Assessment District -This fund is used to account for funds received from special assessments on property owners to provide lighting in areas of the City not covered by other lighting district.
Median Assessment District -This fund is used to account for funds received from special assessments an property owners to provide median in areas of the City not covered by other median district.
COPS AB3229 -This fund is used to account for state funding under the Citizens Option for Public Safety Program to supplement City's current funding for law enforcement services.
Traffic Safety -This fund is used to account for the City's share of fines and fees collected by the Ventura County Superior Court.
TDA -The Transportation Development Act was enacted by the State Legislature in 1971 to make funds available for transit, pedestrian way and bikeway projects, transportation planning ridesharing, and street and road improvements. Funds are derived from 1/4 cent of the retail sales tax and from sales taxes on diesel fuel.
Gas Tax -This fund is used to account for state gasoline taxes received by the City. These funds are restricted for maintenance of street lights, traffic signals, and traffic signs.
Bike Path -This fund is used to accaunt for revenues and expenditures used for the planning and construction of bicycle and pedestrian facilities. The funds are allocated annually by the Ventura County Transportation Commission based an the type of projects submitted and availability of funds.
Homebuyer Program -This fund is used to account for the first-time homebuyer down payment assistance program. The down payment assistance program consisted of a 3.0%simple interest, deferred payment loan available to low income home buyers only. The program was terminated.
Senior Nutrition Grant -This fund is used to account for the Sr. Nutrition Grant revenue and expenses.
Community Benefit Fund -This fund is used to account for the revenues received from the Oxnard Harbor District and the expenses spent on approved projects that benefit bath the City and District, and the communities they serve.
Surplus Property Authority -This fund was established ïn 1993 to maintain, operate, improve, and dispose of federal surplus property and bring surplus property into productive civilian use.
Proposition 64 Public Health &Safety Grant - To fund projects that assist with law enforcement efforts addressing public health and safety associated with the implementation of the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA).
Agenda Item No. 13 Page 106 of 169
75 CC Agenda 05-20-2024
THIS PAGE IS INTENTIONALL Y LEFT BLANK
Agenda Item No. 13 Page 107 of 169 CC Agenda 05-20-2024 NONMAJOR GOVERNMENTAL FUNDS (Continued)
DEBT SERVICE FUNDS
These funds account for resources accumulated for the payment of principal and interest (other than that for proprietary fund debt).
Pension Obligation Bonds -This fund is used to account for the Pension Obligation Bonds.
Housing Successor Agency -This fund is to serve as the successor housing agency for the purpose of managing the affordable housing obligations and assets of the former Redevelopment Agency and all housing redevelopment functions.
CAPITAL PROJECT FUND
Capital Projects -Accounts for capital improvement projects by centralizing project expenditures. 77 Agenda Item No. 13 Page 108 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2023
Special Revenue Funds
Drainage Light Median
Neighborhood Stormwater Assessment Assessment Assessment Preservation Program District District District
ASSETS
Cash and investments $ 474,669 $ - $ 649,285 $ 13,891 $ 193,759 Receivables:
Accounts receivable - - 2,946 1,924 2,808
Loans - - - - -
Due from other funds - - - - -
Prepaid items - - - - -
Total assets $ 474,669 $ - $ 652,231 $ 15,815 $ 196,567
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities
Accounts payable $ - $ - $ 1,633 $ 15,815 $ 1,172
Salaries and benefits payable 1,045 - - - -
Deposits payable - - - - -
Due to other funds - - - - -
Total liabilities 1,045 - 1,633 15,815 1,172
Deferred Inflows of Resources
Unavailable revenues - - - - -
Total deferred inflows of resources - - - - -
Fund Balances
Nonspendable - - - - -
Restricted 473,624 - 650,598 - 195,395
Total fund balances 473,624 - 650,598 - 195,395
Total liabilities, deferred inflows of
resources, and fund balances $ 474,669 $ - $ 652,231 $ 15,815 $ 196,567 (Continued)
78 Agenda Item No. 13 Page 109 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Nonmajor Governmental Funds
Combinïng Balance Sheet
June 30, 2023
(Continued)
Special Revenue Funds
COPS Traffic
AB3229 Safety TDA Gas Tax Bike Path
ASSETS
Cash and investments $ - $ - $ 79,888 $ 2,615,049 $ 18,720 Receivables:
Accounts receivable - 2,500 - 94,126 -
Loans - - - - -
Due fi•om other funds - - - - -
Prepaid items - - - - -
Total assets $ - $ 2,500 $ 79,888 $ 2,709,175 $ 18,720
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities
Accounts payable $ - $ - $ 60,893 $ 16,244 $ -
Salaries and benefits payable - - - 917 -
Deposits payable - - - - -
Due to other funds - - - - -
Totalliabilities - - 60,893 17,161 -
Deferred Inflows of Resources
Unavailable revenues - - - - -
Total deferred inflows of resources - - - - -
Fund Balances
Nonspendable - - - - -
Restricted - 2,500 18,995 2,692,014 18,720
Total fund balances - 2,500 18,995 2,692,014 18,720
Total liabilities, deferred inflows of
resources, and fund balances $ - $ 2,500 $ 79,888 $ 2,709,175 $ 18,720 (Continued)
lïC
Agenda Item No. 13 Page 110 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Nonmajor governmental Funds
Combining Balance Sheet
June 30, 2023
{Continued)
Saecial Revenue Funds
Proposition 64
Senior Surplus Public Health
Homebuyer Nutrition Community Propel-ty &Safety
Program Grant Benefit Authority Grant
ASSETS
Cash and investments $ - $ - $ - $ 4,13 8,112 $ -
Receivables:
Accounts receivable - - 83,208 4,301 -
Loans - - - - -
Due from other funds - - - 250 -
Prepaid items - - - - -
Total assets $ - $ - $ 83,208 $ 4,142,663 $ -
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities
Accounts payable $ - $ - $ 425 $ 142 $ -
Salaries and benefits payable - - - - -
Deposits payable - - - 4,875 -
Due to other funds - - 44,587 5,936 -
Totalliabïlitïes - - 45,012 10,953 -
Deferred Inflows of Resources
Unavaílabie revenues - - - - -
Total deferred inflows of resources - - - - -
Fund Balances
Nonspendable - - - - -
Restricted - - 38,196 4,131,710 -
Total fund balances - - 38,196 4,131,710 -
Total liabilities, deferred inflows of
resources, and fund balances $ - $ - $ 83,208 $ 4,142,663 $ - (Continued)
80 Agenda Item No. 13 Page 111 of 169 CC Agenda 05-20-2024 Cïty of Port Hueneme
Nonmajor Governmental Funds
Combining Balance Sheet
June 30, 2023
(Continued)
Debt Service Funds
Total
Pension Housing Nonmajor
Obligation Successor Capital Governmental
Bonds Agency Projects Funds
ASSETS
Cash and investments $ - $ 4,554,410 $ - $ 12,737,783
Receivables:
Accounts receivable - 2,255 - 194,068
Loans - 689,503 - 689,503
Due from other funds - - - 250
Prepaid items - 681 - 681
Total assets $ - $ 5,246,849 $ - $ 13,622,285
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities
Accounts payable $ - $ 2,536 $ - $ 98,860
Salaries and benefits payable - - - 1,962
Deposits payable - 37,751 - 42,626
Due to other funds - 27,419 - 77,942
Totalliabilitïes - 67,706 - 221,390
Deferred Inflows of Resources
Unavailable revenues - 689,503 - 689,503
Total deferred inflows of resources - 689,503 - 689,503 Fund Balances
Nonspendable - 681 - 681
Restricted - 4,488,959 - 12,710,711
Total fund balances - 4,489,640 - 12,711,392
Total liabilities, deferred inflows of
resources, and fund balances $ - $ 5,246,849 $ - $ 13,622,285 (Concluded)
81 Agenda Item No. 13 Page 112 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Nonmajor Governmental Funds
Statement of Revenue, Expenditures, and Changes in Fund Balance Far the Fiscal Year Ended June 30, 2023
Special Revenue Funds
Draïnage Light Median
Neighborhood Stormwater Assessment Assessment Assessment Preservation Program District District District
REVENUES
Taxes $ - $ - $ 183,114 $ 120,816 $ 176,836
Fines, forfeitures, and permits - - - - -
Intergovernmental - - - - -
Use of money and property 12,798 - - - -
Miscellaneous 31,000 - - - -
Total revenues 43,798 - 183,114 120,816 176,836
EXPENDITURES
Current:
General government - - - - -
Public works - 15,965 3,598 179,569 4,168
Recreation and human services - - - - -
Community development 65,871 - - - -
Capital outlay - 134,964 297,213 - -
Debt service:
Principal retirement 2,455 - - - -
Interest and fiscal charges - - - - -
Total expenditures 68,326 150,929 300,811 179,569 4,168 Excess of revenues over (under)
expenditures (24,528) (150,929} (117,697) (58,753) 172,668
OTHER FINANCING SOURCES (USES)
Transfers in - 191,483 - 66,646 -
Transfers out (14,601) (40,802) (86,122) (7,893) (83,487) Total other financing sources (uses) (14,601} 150,681 (86,122) 58,753 (83,487) Net change in fund balances (39,129) (248) (203,819) - 89,181
FUND BALANCES
Beginning of fiscal year 512,753 248 854,417 - 106,214
End of fiscal year $ 473,b24_ _$ - $ 650,598 $ - $ 195,395 (Continued)
82 Agenda Item No. 13 Page 113 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Nonmajor Governmental Funds
Statement of Revenue, Expenditures, and Changes in Fund Balance For the Fiscal Year Ended June 30, 2023
(Continued)
Special Revenue Funds
COPS Traffic
AB3229 Safety TDA Gas Tax Bike Path
REVENUES
Taxes $ - $ - $ - $ - $ -
Fines, forfeitures, and permits - 14,400 - - -
Intergovernmental 165,271 - - 1,059,677 15,517
Use of money and property - - 1,211 26,562 204
Miscellaneous - - - - -
Total revenues 165,271 14,400 1,211 1,086,239 15,721
EXPENDITURES
Current:
General government - - - - -
Public works - - 9,370 153,616 -
Recreation and human services - - - - -
Community development - - - - -
Capital outlay - - 94,326 713,422 -
Debt service:
Principal retirement - - - 547 -
Interest and fiscal charges - - - - -
Total expenditures - - 103,696 867,585 -
Excess of revenues over {under)
expenditures 165,271 14,400 (102,485) 218,654 15,721
OTHER FINANCING SOURCES {USES)
Transfers in - - - - -
Transfers out (165,271) (24,320) - (19,001) -
Total other financing sources (uses) (165,271) (24,320) - (19,001) - Net change in fund balances - (9,920) (102,485) 199,653 15,721
FUND BALANCES
Beginning of fiscal year - 12,420 121,480 2,492,361 2,999 End of fiscal year $ - $ 2,500 $ 18,995 $ 2,692,014 $ 18,720 (Continued)
83 Agenda Item No. 13 Page 114 of 169 CC Agenda 05-20-2024 City of Part Hueneme
Nonmajor Governmental Funds
Statement of Revenue, Expenditures, and Changes in Fund Balance For the Fiscal Year Ended June 30, 2023
{Continued)
Special Revenue Funds
Proposition 64
Senior Surplus Public Health
Homebuyer Nutrition Community Property &Safety
Program Grant Benefit Authority Grant
REVENUES
Taxes $ - $ - $ - $ - $ -
Fines, forfeïtures, and permits - - - - -
Intergovernmental - 420 37,540 - -
Use of money and property - - - 119,046 -
Miscellaneous - - - - -
Total revenues - 420 37,540 119,046 -
EXPENDITURES
Current:
General government - - - 14,577 -
Public works - - - - -
Recreation and human services - 240 - - -
Comrnunity development 101,684 - 37,842 - -
Capital outlay - - - - -
Debt service:
Principal retirement - - - - -
Interest and fiscal charges - - - - -
Total expenditures 101,684 240 37,842 14,577 -
Excess of revenues over (under)
expenditures (101,684) 180 (302) 104,469 -
OTHER FINANCING SOURCES {USES)
Transfers in - - - - -
Transfers out - (180) - (2,466) -
Total other financing sources (uses) - (180) - (2,466) - Net change in fund balances (101,684) - (302) 102,003 -
FUND BALANCES
Beginning of fiscal year 101,684 - 38,498 4,029,707 -
End of fiscal year $ - $ - $ 38,196 $ 4,131,710 $ -
(Continued)
84 Agenda Item No. 13 Page 115 of 169 CC Agenda 05-20-2024 pity of Port Hueneme
Nonmajar Governmental Funds
Statement of Revenue, Expenditures, and Changes in Fund Balance Far the Fiscal Year Ended June 30, 2023
(Continued)
Debt Service Funds
Total
Pension Housing Nonmajor
Obligation Successor Capital Governmental
Bonds Agency Projects Funds
REVENUES
Taxes
Fines, forfeitures, and permits
Intergovernmental
Use of money and property
Miscellaneous
Total revenues
$ - $ - $
- 391,585
- 969 _
- 392,554
- $ 480,766
- 14,400
- 1,278,425
4 551,410
- 31,969
4 2,356,970
EXPENDITURES
Current:
General government
Public works
Recreation and human services
Community development
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess of revenues over (under)
expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
FUND BALANCES
Beginning of fiscal year
End of fiscal year
107,632 - 122,209
- 366,286
- 240
- 205,397
36,259 - 1,276,184
- 3,002
4,345 - - 4,345
4,345 ~ 143,891 1,977,663
(4,345) 248,663 4 379,307
4,345 - 868,013 1,130,487
- (275,864) (90,292) (810,299)
4,345 (275,864) 777,721 320,188
- (27,201) 777,725 699,495
- 4,516,841 (777,725) 12,011,897
$ - $ 4,489,640 $ - $ 12,711,392
(Concluded)
85 Agenda Item No. 13 Page 116 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Neighborhood Preservation Fund
For the Fiscal Year Ended June 30, 2023
REVENUES
Use of money and property
Miscellaneous
Total revenues
EXPENDITURES
Current:
Community development
Debt service:
Principal retirement
Total expenditures
Excess of revenues over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources {uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
Variance
with
Fïnal Actual Final
Budget Amounts Budget
$ 8,815 $ 12,798 $ 3,983
31,000 31,000 -
39,815 43,798 3,983
213,629 65,871 147,758
2,455 2,455 -
216,084 68,326 147,758
(176,269) (24,528) 151,741
(14,601) (14,601) -
{14,601) {14,601) -
$ (190,870} (39,129) $ 151,741
86 Agenda Item No. 13 Page 117 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Stormwater Program Fund
For the Fiscal Year Ended June 30, 2023
Variance
with
Final Actual Final
Budget Amounts Budget
REVENUES
Charges for services
Total revenues
EXPENDITURES
Current:
Public works
Capital outlay
Total expenditures
Excess of revenues over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
$ 68,657 $ - $ (68,657)
68,657 - (68,657)
26,400 15,965 10,435
52,965 134,964 (81,999)
79,365 150,929 {71,564]
(10,708) (150,929) (140,221)
11,664 191,483 179,819
(42,257) (40,802) 1,455
(30,593) 150,681 181,274
$ (41,301) (248) $ 41,053
248
$ -
87 Agenda Item No. 13 Page 118 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expendïtures, and Changes ïn Fund Balance -Budget and Actual Drainage Assessment District Fund
For the Fïscal Year Ended June 30, 2Q23
REVENUES
Taxes
Total revenues
EXPENDITURES
Current:
Public works
Capital outlay
Total expenditures
Excess of revenues over (under) expenditures
OTHER FINANCING SOURCES {USES)
Transfers out
Total other financing sources {uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
Variance
with
Final Actual Final
Budget Amounts Budget
$ 185,050 $ 183,114 $ (1,936)
185,050 183,114 (1,936)
100,000 3,598 96,402
(243,950) (117,697) 126,253
(86,122) (86,122) -
(86,122) (86,122) -
$ (330,072) (203,819) $ 126,253
854,417
$ 650,598
88 Agenda Item No. 13 Page 119 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Light Assessment District Fund
For the Fiscal Year Ended June 30, 2023
REVENUES
Taxes
Total revenues
EXPENDITURES
Current:
Public works
Total expenditures
Excess of revenues over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
Variance
with
Final Actual Final
Budget Amounts Budget
$ 132,893 $ 120,816 $ (12,077)
132,893 120,816 (12,077)
165,000 179,569 (14, 569)
165,000 179,569 (14,569)
(32,107) (58,753) (26,646)
40,000 66,646 26,646
(7,893) (7,893) -
32,107 58,753 26,646
$ - - $ -
E:~~
Agenda Item No. 13 Page 120 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expendïtures, and Changes in Fund Balance -Budget and Actual Median Assessment District Fund
For the Fiscal Year Ended June 30, 2023
Variance
with
Final Actual Final
Budget Amounts Budget
REVENUES
Taxes
Total revenues
EXPENDITURES
Current:
Public works
Capital outlay
Total expenditures
Excess of revenues over {under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
$ 176,060 $ 176,836 $ 776
17b,060 176,836 776
70,000 4,168 65,832
40,000 - 40,000
110,000 4,168 105,832
66,060 172,668 106,608
158,599 - (158,599}
(83,487) (83,487) -
75,112 (83,487) (158,599)
$ 141,172 89,181 $ (51,991}
90 Agenda Item No. 13 Page 121 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual COPS AB3229 Fund
For the Fiscal Year Ended June 30, 2023
Variance
with
Final Actual Final
Budget Amounts Budget
REVENUES
Intergovernmental
Total revenues
EXPENDITURES
Current:
Public safety
Total expenditures
Excess of revenues over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources (uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
$ 100,000 $ 165,271 $ 65,271
100,000 165,271 65,271
100,000 165,271 65,271
(100,000) (165,271) (65,271)
(100,000) {165,271} (65,271)
$ - - $ -
GII
Agenda Item No. 13 Page 122 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Traffic Safety Fund
For the Fiscal Year Ended June 30, 2023
REVENUES
Fines, forfeitures, and penalties
Total revenues
EXPENDITURES
Current:
Public works
Total expenditures
Excess of revenues over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources (uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
Variance
with
Final Actual Final
Budget Amounts Budget
$ 20,000 $ 14,400 $ (5,600)
20,000 14,400 (5,600)
20,000 14,400 (5,600)
~ (20,000) (24,320) (4,320)
(20,000) (24,320) (4,320)
$ - (9,920) $ (9,920}
92 Agenda Item No. 13 Page 123 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual TDA Fund
For the Fiscal Year Ended June 30, 2023
Variance
with
Final Actual Final
Budget Amounts Budget
$ 242 $ 1,211 $ 969
242 1,211 969
1,400 9,370 {7,970)
120,000 94,326 25,674
121,400 103,696 17,704
$ (121,158) (102,485) $ 18,673
121,4$0
$ 18,995
REVENUES
Use of money and property
Total revenues
EXPENDITURES
Current:
Public works
Capital outlay
Total expenditures
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
93 Agenda Item No. 13 Page 124 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Gas Tax Fund
Far the Fiscal Year Ended June 30, 2023
REVENUES
Intergovernmental
Use of money and property
Miscellaneous
Total revenues
EXPENDITURES
Current:
Public works
Capital outlay
Debt service:
Principal retirement
Total expenditures
Excess of revenues over (under} expenditures
OTHER FINANCING SOURCES {USES}
Transfers out
Total other financing sources {uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
Variance
with
Final Actual Final
Budget Amounts Budget
$ 925,255 $ 1,059,677 $ 134,422
4,064 26,562 22,498
1,500 - (1,500)
930,819 1,086,239 155,420
439,306 153,616 285,690
2,594,914 713,422 1,881,492
- 547 (547)
3,034,220 867,585 2,166,635
(2,103,401) 218,654 2,322,055
(19,001) (19,001) -
$ (2,122,402) 199,653 $ 2,322,055
2,492,361
$ 2,692,014
94 Agenda Item No. 13 Page 125 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Bike Path Fund
For the Fiscal Year Ended June 30, 2023
REVENUES
Intergovernmental
Use of money and property
Total revenues
EXPENDITURES
Current:
Public works
Total expenditures
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
Variance
with
Final Actual Fïnal
Budget Amounts Budget
$ 15,600 $ 15,517 $ (83)
108 204 96
15,708 15,721 13
10,000 - 10,000
10,000 - 10,000
$ 5,708 15,721 $ 10,013
2,999
95 Agenda Item No. 13 Page 126 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Homebuyer Program Fund
For the Fiscal Year Ended June 30, 2023
Variance
with
Final Actual Final
Budget Amounts Budget
REVENUES
Intergovernmental $ - $ - $ -
Total revenues
EXPENDITURES
Current:
Community development 101,684 (101,684)
Total expenditures - 101,684 (101,684)
Net change in fund balance $ - (101,684) $ (101,684)
FUND BALANCE
Beginning of fiscal year 101,684
End of fiscal year
Agenda Item No. 13 Page 127 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Senior Nutrition Grant Fund
For the Fiscal Year Ended June 30, 2023
REVENUES
Intergovernmental
Total. revenues
EXPENDITURES
Current:
Recreation and human services
Total expenditures
Excess of revenues over (under) expenditures
OTHER FINANCING SOURCES (USES}
Transfers out
Total other financing sources (uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
Variance
Wlth
Final Actual Final
Budget Amounts Budget
$ 1,620 $ 420 $ (1,200)
1,620 420 (1,200)
2,900 240 2,660
2,900 240 2,660
(1,280) 180 1,460
(180) (180)
- (180) (180}
$ (1,280) - $ 1,280
97 Agenda Item No. 13 Page 128 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Community Benefit Fund
For the Fiscal Year Ended June 30, 2023
Variance
with
Final Actual Final
Budget Amounts Budget
$ 118,000 $ 37,540 $ (80,460)
118,000 37,540 (80,460)
- 37,842 (37,842)
- 3 7, 842 (3 7, 842)
$ 118,000 (302} $ (118,302)
38,498
$ 3 8,196
REVENUES
Intergovernmental
Total revenues
EXPENDITURES
Current:
Community development
Total expenditures
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
%~:j
Agenda Item No. 13 Page 129 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Surplus Property Authority Fund
For the Fiscal Year Ended June 30, 2023
REVENUES
Use of money and property
Total revenues
EXPENDITURES
Current:
General government
Total expenditures
Excess of revenues over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources (uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
Variance
with
Final Actual Final
Budget Amounts Budget
$ 87,801 $ ll9,046 $ 31,245
87,801 119,046 31,245
76,224 14,577 61,647
76,224 14,577 61,647
11,577 104,469 92,892
(2,466) (2,466) -
(2,466) (2,466) -
$ 9,111 102,003 $ 92, 892
4,029,707
$ 4,131,710
Agenda Item No. 13 Page 130 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Proposition 64 Publïc Health &Safety Grant Fund
For the Fiscal Year Ended June 30, 2023
Variance
with
Final Actual Final
Budget Amounts Budget
$ 240,000 $ - $ (240,000)
240,000 - (240,000)
$ 240,000 - $ (240,000)
REVENUES
Charges for services
Total revenues
EXPENDITURES
Current:
Public safety
Total expenditures
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
100
Agenda Item No. 13 Page 131 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Pension Obligation Bonds Debt Service Fund
For the Fiscal Year Ended June 30, 2023
REVENUES
Taxes
Total revenues
EXPENDITURES
Current:
General government
Debt service:
Interest
Total expenditures
Excess of revenues over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Total other financing sources (uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
Variance
with
Final Actual Final
Budget Amounts Budget
$ - $ - ~ -
6,000 - 6,000
- 4,345 (4,345)
6,000 4,345 1,655
(6,000) (4,345) 1,655
6,000 4,345 (1,655)
6,000 4,345 (1,655)
$ - - $ -
101
Agenda Item No. 13 Page 132 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Housing Successor Agency Debt Service Fund
For the Fiscal Year Ended June 30, 2023
REVENUES
Use of money and property
Miscellaneous
Total revenues
EXPENDITURES
Current:
General government
Capital outlay
Total expenditures
Excess of revenues over {under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers out
Total other financing sources (uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
Varïance
with
Final Actual Final
Budget Amounts Budget
$ - $ 391,585 $ 391,585
- 969 969
- 392,554 392,554
- 107,632 (107,632)
- 36,259 (36,259)
- 143,891 (143,891)
- 248,663 248,663
- (275,864) (275,864)
- (275,864) (275,864)
$ - (27,201} $ (27,201)
4,516,841
Agenda Item No. 13 Page 133 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget and Actual Capital Projects Fund
For the Fiscal Year Ended June 30, 2023
REVENUES
Use of money and property
Total revenues
EXPENDITURES
Capital outlay
Total expenditures
Excess of revenues over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
FUND BALANCE
Beginning of fiscal year
End of fiscal year
Variance
with
Final Actual Final
Budget Amounts Budget
$ - $ 4 $ 4
- 4 4
- 868,013 868,013
- (90,2~2~ (~0,292~
- 777,721 777,721
$ - 777,725 $ 777,725
(777 7~51
103
Agenda Item No. 13 Page 134 of 169 CC Agenda 05-20-2024 THIS PA DE I5 INTENTIDNALL Y LEFT &LANK
Agenda Item No. 13 Page 135 of 169 CC Agenda 05-20-2024 INTEP:NAL SERVICE FUl~+TDS
The Internal Service Fund accounts for %nancing of goods and services provided by one department to other departments of the Cïty on a Cost-reimbursement basis.
Internal Service Funds include:
Fleet and Equipment Fund — To finance and account for the City's fleet and equïpment program.
Risk Administration Fund — To finance and account for the insurance program.
Agenda Item No. 13 Page 136 of 169 CC Agenda 05-20-2024 Agenda Item No. 13 Page 137 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Internal Service Funds
Combining Statement of Net Position
June 30, 2023
Fleet and Risk
Equipment Administration Total
ASSETS
Cash and investments $ - $ - $ -
Total assets - - -
LIABILITIES
Accounts payable - - -
Total liabilities - - -
NET POSITION
Unrestricted - - -
Total net posïtion $ - $ - $ -
105
Agenda Item No. 13 Page 138 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Internal Service Funds
Combining Statement of Revenues, Expenses and Changes in Net Position For the Fiscal Year Ended June 30, 2023
Fleet and Risk
Equipment Administration Total
OPERATING REVENUES:
Charges for services
Total operating revenues
OPERATING EXPENSES:
Salaries and benefits
Insurance claims
CJeneral and administrative
Depreciation and amortization expense
Total operating expenses
Operating income
NON-OPERATING REVENUES (EXPENSES):
Interest expense
Income before transfers
Transfers out
Change in net position
NET POSITION (DEFICIT}:
Beginning of fiscal year
End of fiscal year
$ 1,402,958 $ 2,113,638 $ 3,516,596
1,402,958 2,113,638 3,516,596
14,754 - 14,754
- 2,037,643 2,037,643
769,046 - 769,046
6,921 - 6,921
790,721 2,037,643 2,828,364
612,237 75,995 688,232
(1,209) - (1,209)
611,028 75,995 687,023
(426,954) (113,990) (540,944)
184,074 (37,995) 146,079
(184,074) 37,995 (146,079)
$ - $ - $ -
106
Agenda Item No. 13 Page 139 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Internal Service Funds
Combining Statement of Cash Flows
For the Fiscal Year Ended June 30, 2023
Fleet and Risk
E ui ci pment Administration Total
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers and users
Payments to employees for services
Payments to suppliers
Payments for insurance claims
Net cash provided by operating activities
$ 1,402,958 $ 2,113,638 $ 3,516,596
(18,721} - (18,721)
(78a,4o2} - (780,402}
- (2,037,643) (2,037,643)
603,835 75,995 679,830
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Principal payments on long-term debt (42,667) - (42,667) Interest paid on long-term debt (1,209) - (1,209}
Net cash (used) by capital and related financing activities (43,876) - (43,876) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
Transfers to other funds (1,038,856) (87,228) (1,126,084) Net cash (used) by noncapital financing activities (1,038,856) (87,228) (1,126,084} Net change in cash and cash equivalents (478,897) (11,233) (490,130)
CASH AND CASH EQUIVALENTS
Beginning of fiscal year 478,897 11,233 490,130
End of fiscal year $ - $ - $ -
107
Agenda Item No. 13 Page 140 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Internal Service Funds
Combining Statement of Cash Flows
For the Fiscal Year Ended June 30, 2023
Fleet and Risk
Equipment Administration
Reconciliatïon of operatïng incame (loss) to
net cash provided by operating activities:
Operating income
Adjustments to reconcile operating income
to net cash provided by
operating activities:
Deprecïation expense
Change in assets, deferred outflows, liabilities, and deferred inflows Accounts payable
Accrued payroll
Net cash provided by operating activities
$ 612,237 $ 75,995 $ 688,232
6,921 - 6,921
(11,356) - (11,356)
{3,967) - (3,967)
$ 603,835 $ 75,995 $ 679,830
108
Agenda Item No. 13 Page 141 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Measure U General Fund Revenue and Expenditure Report
Fiscal Year 2022-2023
Description Amount
Measure U Revenue $ 3,411,458
Total Measure U Sources Available 3,411,458
Measure U Expenditures
Publie Safety
Police Sergeant 296,696
Police Officer Senior (2 FTE'S) 505,319
Police Officer (.50 FTE) 128,469
Police Communications Officers -Dispatch (3 FTE'S} 357,498 Computer -aided dispatch (CAD) system 20,191
Police Body Cameras and Tasers 56,863
Police Department Remodel 81,253
Police Department Upgrades/Improvements 292,065
PD Patrol Vehicles 77,721
Emergency Preparation /Communications Manager 181,862
Total Public Safety 1,997,938
Streets &Maintenance
Maintenance Staff - (1.5 FTE'S)Maintaining City Parks/ Pier/Removing graffito 119,501 Neighborhood Speed Cushion Installation 30,427
Community Center Exterior Paint 84,000
Streets Maintenance Supplies (Equipment Rental, Concrete) 158,367 Streets Staff- (2.5 FTE'S)Maintaining Streets, alleys, sidewalks, public rights-of--way &parking lots 382,542 Streets Small Tools /Equipment (blower starter, pipe wrenches) 14,227 City Hall Remodel 20,352
Facilities /Streets/Landscape Vehicles 56,433
Public Works New Generator 14,144
Evergreen Lane Storm Drain Repair #2 80,000
Total Streets &Maintenance 959,994
Parks ~ Recreation
Recreation Vehicles 6,902
Bubbling Springs Park -Pre-Construction Expenses 279,824 Recreation Staff 194,221
Recreation Various Contract Services /Supplies /Other 91,995 Senior Exercise Program 6,000
Total Parks ~ Recreation 578,942
Information Technology
Implementation labor for new enterprise resourse software 54,383 New enterprise resourse software supporting automation 95,620 Totallnformation Technology 150,003
Total Measure U Expenditures 3,686,876
Increase (Decrease) in Funds Available for Administration and Operation {275,418) Funds available for administration and operations @July 1, 2022 2,OOi,377 Funds available for administration and operations @June 30, 2023 $ 1,725,959 109
Agenda Item No. 13 Page 142 of 169 CC Agenda 05-20-2024
THIS PAGE IS INTENTIONALL Y LEFT BLANK
Agenda Item No. 13 Page 143 of 169 CC Agenda 05-20-2024
STATISTICAL SECTION
Agenda Item No. 13 Page 144 of 169 CC Agenda 05-20-2024 Agenda Item No. 13 Page 145 of 169 CC Agenda 05-20-2024
STATISTICAL SECTION
This part of the City of Port Hueneme's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, footnotes, and required supplementary information says about the City's overall financial health.
Contents Pages
Financial Trends
These schedules contain trend ïnformation to help the reader understand haw the City's financial li2-121 performance and well-being have changed over time.
Revenue Capacity
These schedules contain information to help assess the government's most significant local 122-125 revenue sources.
Debt Capacity
These schedules contain information to help the reader assess the affordabilüy of the City's current 126-130 levels of outstanding debt and the City's ability to issue additional debt.
Demographïc and Economic Information
This schedule offers demographic and economic indicators to help the reader understand the 131 environment within which the City's financial activities take place.
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the 132-134 information in the City's financial report relates to the services the City provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports far the relevant fiscal year.
111
Agenda Item No. 13 Page 146 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2023 2022 2021 2020 2019
Governmental activities:
Net Investment in capital assets $ 25,248,243 $ 24,250,205 $ 23,937,081 $ 21,199,332 $ 20,403,042 Restricted 16,174,959 13,987,552 13,080,233 11,010,024 - Unrestricted 14,405,613 10,710,561 7,678,075 6,515,649 31,693,837 Total governmental activities net position $ 55,828,815 $ 48,948,318 $ 44,695,389 $ 38,725,005 $ 52,096,879 Business-type activities:
Net Investment in capital assets $ 15,653,410 $ 13,021,716 $ 13,348,498 $ 12,841,334 $ 12,431,290 Restricted 63,473 1,224,259 1,129,900 1,129,900 91,813
Unrestricted 31,280,179 25,623,104 24,516,790 23,432,563 35,058,157 Total business-type activities net position $ 46,997,062 $ 39,869,079 $ 38,995,188 $ 37,403,797 $ 47,581,260 Primary government:
Net Investment in capital assets $ 40,901,653 $ 37,271,921 $ 37,285,579 $ 34,040,666 $ 32,834,332 Restricted 16,238,432 15,211,811 14,210,133 12,139,924 91,813 Unrestricted 45,685,792 36,333,665 32,194,865 29,948,212 66,751,994 Total primary government net position $ 102,825,877 $ 88,817,397 $ 83,690,577 $ 76,128,802 $ 99,678,139 Source: The Annual Comprehensive Financial Report.
112
Agenda Item No. 13 Page 147 of 169 CC Agenda 05-20-2024 Fiscal Year
2018 2017 2016 2015 2014
Governmental activities:
Net Investment in capital assets $ 20,981,245 $ 13,404,945 $ - $ 23,943,904 $ 25,164,338 Restricted - - - - -
Unrestricted 1,490,082 13,545,963 6,741,523 11,112,558 38,284,847 Total governmental activities net position $ 22,471,327 $ 26,950,908 $ 6,741,523 $ 35,056,462 $ 63,449,185 Business-type activities:
Net Investment in capital assets $ 12,953,551 $ 13,653,694 $ 13,085,616 $ 13,800,054 $ 14,384,883 Restricted - - 4,409,924 24,277 291,356
Unrestricted 28,358,365 24,291,432 13,800,373 13,515,859 11,993,284 Total business-type activities net position $ 41,311,916 $ 37,945,126 $ 31,295,913 $ 27,340,190 $ 26,569,523 Primary government:
Net Investment in capital assets $ 33,934,796 $ 27,058,639 $ 13,085,616 $ 37,743,958 $ 39,549,221 Restricted - - 4,409,924 24,277 191,356
Unrestricted 29,848,447 37,837,395 20,541,896 24,628,417 50,278,131 Total primary government net position $ 63,783,243 $ 64,896,034 $ 38,037,436 $ 62,396,652 $ 90,018,708 113
Agenda Item No. 13 Page 148 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Físcal Year
2023 2022 2021 2020 2019
$ 5,017,701 $ 8,989,463 $ 8,286,282 $ 4,795,819 $ 5,125,474 2,393,401 2,524,300 1,283,025 262,923 1,531,360
3,415,862 2,291,96b 2,638,704 1,548,023 1,073,431
11,071,147 9,522,717 1,699,359 7,343,033 6,916,219
968,171 2,114,063 10,343,428 424,976 896,490
4,954 381,162 416,393 677,142 551,441
$ 22,871,236 $ 25,829,171 $ 24,667,191 $ 15,051,916 $ 16,094,465 $ 2,402,841 $ 3,515,315 $ 2,416,405 $ 5,617,857 $ 3,250,520 5,482,477 5,762,237 5,854,49b 6,713,005 4,814,"125
2,739,891 4,52b,480 3,442,664 5,047,198 2,897,740
4,503,108 5,218,032 4,508,828 5,927,711 4,195,877
599,664 1,247,800 1,309,223 2,061,817 3,023,852
$ 15,727,981 $ 20,269,864 $ 17,531,621 $ 25,367,588 $ 18,182,114 $ 38,599,217 46,099,035 $ 42,198,812 $ 40,419,504 $ 34,276,579 $ 223,725 $ 505,359 $ 462,851 $ 427,072 $ 2,029,891
1,204,013 851,591 646,488 663,322 562,683
3,453,752 2,653,012 2,759,824 2,522,219 1,779,962
1,015,188 788,960 950,872 801,888 243,02b
455,638 626,874 574,423 b86,968 26,334
2,355,706 1,380,994 1,849,226 2,867,768 1,365,057
1,075,195 - - - -
$ 10,283,217 $ 6,806,790 $ 7,243,684 $ 7,969,237 $ 6,006,953 $ 3,629,987 $ 3,721,293 $ 3,562,898 $ 3,626,343 $ 3,671,442 b,996,995 7,562,418 7,450,705 7,627,483 7,372,487
1,370,101 1,269,984 1,895,816 1,229,086 796,186
4,832,652 4,956,554 4,410,211 4,329,851 4,450,209
53,056 - - - 3,422,570
4,508,688 3,555,435 3,277,568 3,027,381 -
723,827 1,664,967 1,560,668 1,269,592 463,554
- - - - 16,277
$ 22,115,306 $ 22,730,651 $ 22,157,866 $ 21,109,736 $ 20,192,725 $ 32,398,523 $ 29,537,441 $ 29,401,550 $ 29,078,973 $ 26,199,678 $ (12,588,019} $ (19,022,381) $ (17,423,507) $ (7,082,679} $ (10,087,512) 6,387,325 2,460,787 4,626,245 (4,257,852) 2,010,611
$ (6,200,644) $ (16,561,594) $ (12,797,262) $ (11,340,531) $ (8,076,901) Expenses:
Governmental activities:
General government
Community development
Streets and highways
Public safety -police
Parks, recreation and social services
Interest and fiscal charges on long term debt
Total governmental activities expenses
Business-type activities:
Wastewater
Water
Solid waste
Housing Authority
Other business-type funds
Total business-type activities expenses
Total primary govenunent expenses
Program revenues:
Governmental activities:
Charges for services:
General government
Community development
Streets and highways
Public safety -police
Parks, recreation and social services
Operating grants and contributions
Capital grants and contributions
Total goverivnental activities program revenues
Business-type activities:
Charges for services:
Wastewater
Water
Water plant
Solid waste
Operatnlg grants and contributions
Capital grants and contributions
Housing Authority
Other business-type funds
Total business-type activities program revenues
Total primary government program revenues
Net revenues (expenses):
Goverrunental activities:
Business-type activities:
Total net revenues (expenses):
114
Agenda Item No. 13 Page 149 of 169 CC Agenda 05-20-2024 Fiscal Year
2018 2017 2016 2015 2014
Expenses:
Governmental activities:
General government $ 6,804,477 $ 6,739,842 $ 6,428,792 $ 5,906,837 $ 7,726,546 Community development 1,443,377 1,224,865 1,509,163 1,261,289 1,142,228 Streets and highways 890,458 1,532,687 2,121,778 2,319,431 2,874,888 Public safety -police 6,584,802 6,094,455 6,146,558 6,353,265 6,341,581 Parks, recreation and socíal services 935,693 951,106 1,291,452 2,554,647 1,987,702 Interest and fiscal charges on long term debt 478,208 476,710 339,498 536,438 676,153 Total governmental activities expenses $ 17,437,015 $ 17,019,665 $ 17,837,241 $ 18,931,907 $ 20,744,098 Business-type activities:
Wastewater $ 3,235,348 $ 2,243,508 $ 2,436,342 $ 3,001,674 $ 3,401,089 Water 4,940,093 4,943,444 5,345,616 5,429,418 5,551,749 Solid waste 2,435,437 2,136,336 2,208,011 2,599,295 2,923,082 Housing Authority 4,207,218 3,944,331 3,800,192 3,809,438 4,101,576 Other business-type funds 3,067,932 2,827,157 2,826,779 3,031,317 878,187 Total business-type activities expenses $ 17,886,028 $ 16,094,776 $ 16,616,940 $ 17,871,142 $ 16,855,683 Total primary government expenses $ 35,323,043 $ 33,114,441 $ 34,454,181 $ 36,803,049 $ 37,604,781 Program revenues:
Governmental activities:
Charges for services:
General government $ 1,891,920 $ 1,442,918 $ 1,849,500 $ 1,83b,943 $ 3,937,746 Community development 711,272 477,488 667,057 637,900 879,648 Streets and highways 1,690,752 1,653,185 1,673,311 1,503,769 1,372,362 Public safety -police 241,003 137,247 104,917 151,711 158,476 Parks, recreation and social services 79,395 76,179 1,518,568 2,899,859 502,796 Operating grants and contributions 901,642 794,667 826,036 1,097,066 457,566 Capital grants and contrïbutions - - 114,540 (270,240) 2,881,263 Total governmental activities program revenues $ 5,515,984 $ 5,081,684 $ 6,753,929 $ 7,857,009 $ 10,189,856 Business-type activities:
Charges for services:
Wastewater $ 3,688,185 $ 3,704,457 $ 3,692,675 $ 3,806,645 $ 3,750,154 Water 7,599,160 7,649,891 7,371,309 7,329,785 7,415,296 Water plant 891,534 795,929 938,422 940,672 884,093
Solid waste 4,278,087 4,183,084 3,905,761 3,962,240 3,820,619 Operating grants and contributions 3,602,290 3,520,353 3,226,883 2,985,094 3,364,762 Capital grants and conriibutions - - - - -
Housing Authority 454,341 481,394 427,620 387,349 362,169 Other business-type funds 3,177 - - - -
Total business-type activities program revenues $ 20,516,774 $ 20,335,108 $ 19,562,670 $ 19,411,785 $ 19,597,093 Total primary goverrunent program revenues $ 26,032,758 $ 25,416,792 $ 26,316,594 $ 27,268,794 $ 24,786,949 Net revenues (expenses):
Governmental activities: $ (11,921,031} $ (11,937,981) $ {11,0$3,312} $ (11,074,898) $ (10,559,242) Business-type activities: 2,630,746 4,240,332 2,945,730 1,540,643 2,741,410 Total net revenues (expenses): $ (9,290,285} $ (7,697,649) $ (8,137,582) $ (9,534,255) $ (7,817,832) 115
Agenda Item No. 13 Page 150 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2023 2022 2021 2020 2019
General revenues and other changes in net assets:
Governmental activities:
Taxes:
Property taxes $ 3,144,238 $ 3,644,709 $ 4,104,353 $ 3,493,535 $ 3,109,663 Sales taxes 7,781,027 7,106,678 7,476,243 6,ll8,099 3,358,443 Utility users taxes 1,229,142 1,108,621 1,060,592 1,038,084 1,072,173 Transient lodging taxes 763,053 691,943 468,607 492,124 585,178 Franchise taxes 442,723 419,660 389,830 378,657 385,547 Other taxes 2,139,987 2,927,619 2,599,098 2,182,096 1,849,579 Motor vehicle license in lieu 2,562,004 2,395,892 2,318,909 2,229,471 2,065,075 Investment earnings 616,467 962,615 736,980 977,667 1,259,460 Gain on disposal of capital asset - - - - -
Other 767 1,471,657 659,154 388,599 -
Transfers 1,085,388 - - - (334,980)
Total govermental activities $ "19,764,796 $ 21,229,394 $ 19,813,767 $ 17,298,333 $ 13,350,138 Business-type activities:
Investment earnings 718,842 151,459 116,673 668,263 519,455 Gaú1/ (Loss) on disposal of capítal asset - - - - -
Other - - 428,598 252,966 650,004
Transfers (1,085,3$$} - - - 334,980
Total business-type activities $ (366,546) $ 151,459 $ 545,271 $ 921,229 $ 1,504,439 Total primary goverrunent $ 19,398,250 $ 21,380,853 $ 20,359,038 $ 18,219,562 $ 14,854,577 Changes in net position
Governmental activities: $ 7,176,777 $ 2,207,013 $ 2,390,260 $ 10,215,654 $ 3,262,626 Business-type activities: 6,020,779 2,612,246 5,171,526 (3,336,623) 3,515,050 Total primacy government $ 13,197,556 $ 4,819,259 $ 7,561,77b $ 6,879,031 $ 6,777,676 Source: The llmival Comprehensive Fntancial Report.
116
Agenda Item No. 13 Page 151 of 169 CC Agenda 05-20-2024 Fiscal Year
2018 2017 2016 2015 2014
$ 2,792,561 $ 2,634,443 $ 2,564,763 $ 2,446,547 $ 1,795,572 2,374,208 2,144,748 1,903,144 2,003,923 2,370,342
1,102,767 1,128,564 1,112,349 1,128,814 1,158,019
580,579 559,850 508,800 455,139 393,337
367,813 361,875 377,107 387,817 368,368
278,933 778,016 1,262,272 172,680 155,292
1,980,886 1,867,730 1,796,585 1,725,817 2,530,264
1,125,651 1,237,056 1,293,358 1,301,571 1,933,459
- - - - 135,754
(65,055) (32,885) (1,252,217) (2,394,085) 250,202
$ 10,538,343 $ 10,679,397 $ 9,566,161 $ 7,228,223 $ 11,090,609 215,182 67,762 1,723 1,052 973
2,475 - - - 9,601
453,332 869,251 1,061,951 370,540 381,349
65,055 32,885 132,598 1,134,265 (250,202)
$ 736,044 $ 969,898 $ 1,196,272 $ 1,505,857 $ 141,721
$ 11,274,387 $ 11,649,295 $ 10,762,433 $ 8,734,080 $ 11,232,330 $ (1,382,688} $ (1,258,584} $ (1,517,151} $ (3,846,676) $ 531,367 3,366,790 5,210,230 4,142,002 3,046,500 2,883,131
$ 1,984,102 $ 3,951,646 $ 2,624,851 $ (800,176) $ 3,414,498 General revenues and other changes in net assets:
Governmental activities:
Taxes:
Property taxes
Sales taxes
Utility users taxes
Transient lodgúlg taxes
Franchise taxes
Other taxes
Motor vehicle license in lieu
Investment earnings
Gain on disposal of capital asset
Other
Transfers
Total govermental activities
Business-type activities:
Investment earnúlgs
Gaúi/ (Loss) on disposal of capital asset
Other
Transfers
Total business-type activities
Total primary government
Changes in net position
Governmental activities:
Business-type activities:
Total primary govermment
117
Agenda Item No. 13 Page 152 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Fund Balances of Governmental Funds
Last Ten Fïscal Years
(modified accrual basis of accounting)
Fiscal Year
General fund:
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total general fund
2023 2022 2021 2020 2019
$ 11,299,875 $ 12,379,710 $ 12,863,486 $ 13,328,948 $ 17,618,438 2,214,504 1,844,580 1,435,340 1,435,340 279,049
18,345,910 - - - 959,945
15,870,796 30,829,589 24,592,218 20,243,668 13,305,000
$ 47,731,085 $ 45,053,879 $ 38,891,044 $ 35,007,956 $ 32,162,432 All other governmental funds:
Nonspendable $ 681 $ -$ -$ - $ 648,365
Restricted 12,710,711 12,789,622 11,708,275 9,471,639 3,355,672 Assigned (777,725} (224,443} 281,816
Unassigned 10,835 (170,084) 3,416,153
Total all other governmental funds $ 12,711,392 $ 12,011,897 $ 11,494,667 $ 9,583,371 $ 7,420,190 Source: The Annual Comprehensive Financial Report.
118
Agenda Item No. 13 Page 153 of 169 CC Agenda 05-20-2024 Fiscal Year
2018 2017 2016 2015 2014
General fund:
Nonspendable $ 17,476,476 $ 18,197,328 $ 18,873,805 $ 19,518,292 $ 15,129,585 Restricted 150,316 103,486 91,888 - -
Committed 946,431 939,820 933,930 931,726 925,957
Assigned - - - - -
Unassigned 11,150,785 10,537,945 9,947,139 10,460,93$ 15,820,100 Total general fund $ 29, 724,008 $ 29,778,579 $ 29,846,762 $ 30,910,956 $ 31,875,642 All other governmental funds:
Nonspendable $ - $ - $ - $ - $ -
Restricted 7,232,146 b,893,227 ó,984,b92 ó,18b,004 5,9ó7,1b5 Assigned - - - - -
Unassigned (ó23,O66) (ó13,8b4) (303,Oó5) (303,050) (245,184} Total all other governmental funds $ b, 609,080 $ 6,279,363 $ ó,b81,627 $ 5,882,953 $ 5,721,981 119
Agenda Item No. 13 Page 154 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Changes in Fund Balances of Governmental Funds
Last Ten Fïscal Years
(modified basis of accounting)
Fiscal Year
2023 2022 2021 2020 2019
Revenues:
Taxes
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Investment earnúlgs
Use of Money and Property
Other revenues
Total revenues
Expenditures:
Current:
General government
Community development
Streets and highways
Parks, recreation and social services
Public safety -police
Capital outlays
Debt service:
Principal retirement
Interest and other charges
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Proceeds from long-term debt
Transfers ú1
Transfers out
Total other financing sources (uses)
Special item
Net change in fund balances
Debt service as a percentage of noncapital expenditures Source: The Annual Comprehensive Financial Report.
$ 16,509,445 $ 15,848,138 $ 16,306,390 $ 14,229,030 $ 10,576,079 788,987 785,085 732,361 762,250 685,866
2,965,127 1,859,202 2,436,491 1,518,216 1,530,974
3,199,443 2,579,497 2,704,503 2,343,880 628,485
736,831 449,990 523,796 464,126 484,474
- - - - 1,259,460
2,026,922 1,298,919 1,538,652 1,823,555 -
2,214,939 5,531,116 2,981,684 2,588,127 4,526,733
$ 28,441,694 $ 28,351,947 $ 27,223,877 $ 23,729,184 $ 19,692,071 $ 6,854,545 $ b,121,688 $ 5,317,559 $ 5,015,084 $ 4,693,734 2,350,396 1,774,258 969,633 1,743,064 1,389,253
2,779,930 1,640,049 703,292 1,731,698 1,070,158
659,234 1,669,898 10,242,275 1,178,588 896,490
10,888,513 9,771,074 644,953 7,746,700 6,916,219
4,571,187 2,265,220 4,245,205 3,053,208 -
781,184 657,921 487,983 436,164 887,037
53,679 53,374 28,314 1,802 264,327
$ 28,938,668 $ 23,953,482 $ 22,639,214 $ 20,906,308 $ 16,117,218 $ (496,974) $ 4,398,465 $ 4,584,663 $ 2,822,876 $ 3,574,853 $ 681,725 $ 208,144 $ 840,272 $ 1,240,068 $ -
4,599,680 2,274,533 2,670,720 4,449,502 3,108,166
(1,165,016) (536,178) (2,301,271} (3,958,875) (3,443,146) 4,116,389 1,946,499 1,209,721 1,730,695 (334,980)
$ 3,619,415 $ 6,344,964 $ 5,794,384 $ 4,553,571 $ 3,239,873
3.5% 3.4% 2.3% 2,1% 7.7%
120
Agenda Item No. 13 Page 155 of 169 CC Agenda 05-20-2024 Fiscal Year
2018 2017 2016 2015 2014
Revenues:
Taxes $ 9,198,814 $ 8,697,212 $ 8,262,749 $ 8,148,057 $ 7,582,365 Licenses and permits 557,470 715,014 49b,454 ó09,b64 534,654 Intergovernmental 1,217,075 1,092,298 1,258,612 4,894,360 6,573,787 Charges for services 652,231 551,341 539,228 bó8,985 489,978 Fines and forfeitures 429,039 388,854 381,113 410,945 498,885 Investment earnings 1,125,651 1,245,867 1,298,979 1,301,571 2,251,581 Use of Money and Property - - - - -
Other revenues 2,939,102 3,103,382 3,845,796 2,559,608 2,524,030 Total revenues $ 16,119,382 $ 15,793,968 $ 16,082,931 $ 18,593,190 $ 20,455,280 Expenditures:
Current:
General government $ 4,884,507 $ 4,172,001 $ 4,987,652 $ 2,943,321 $ 6,128,490 Community development 1,294,351 1,146,438 1,377,477 1,112,264 1,132,961 Streets and highways 887,185 1,531,427 1,522,401 2,316,157 2,848,919 Parks, recreation and social services 935,693 925,462 872,949 2,554,647 1,975,165 Public safety -police 6,884,802 b,100,045 b,112,441 ó,353,26b 6,293,793 Capital outlays - - 65,639 1,937,761 1,937,761
Debt service:
Principal retirement 835,339 703,535 1,560,000 385,000 1,210,533 Interest and other charges 57,304 263,613 143,085 107,282 382,343 Total expenditures $ 15,779,181 $ 14,842,521 $ 1ó,b41,644 $ 17,709,698 $ 21,909,965 Revenues aver (under) expenditures $ 340,201 $ 951,447 $ (558,713) $ 883,492 $ (1,454,685) Other financing sources (uses):
Proceeds from long-term debt $ - $ - $ - $ - $ -
Transfers ill 3,196,389 3,150,591 3,780,436 1,071,076 1,884,340 Transfers out (3,261,444) (3,183,478) (3,913,034) (3,465,161) (1,634,138) Total other financing sources (uses) (65,055) (32,887) (132,598} (2,394,085) 250,202 Special item - - (23,506} - -
Net change in fund balances $ 275,146 $ 918,560 $ (714,817) $ (1,510,593) $ (1,204,4$3) Debt service as a percentage of noncapïtal expenditures 6.0% 7.0% 11.4% 2.9% 7.8% 121
Agenda Item No. 13 Page 156 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
(in thousands of dollars)
City Redevelopment Agency (1)
Fïscal Year Taxable Taxable Total
Ended Assessed Less: Assessed Direct Tax
June 30 Local Secured Utility Unsecured Value Secured Unsecured Exemptions Value Rate 2014 $ 1,312,093 $ - $ 114,592 $ 1,426,685 $ - $ - $ - $ - 0.088 2015 1,488,441 - 144,780 1,633,221 - - - - 0.089%
2016 1,583,699 21 130,632 1,714,352 - - - - 0.087%
2017 1,647,32b 21 134,011 1,781,358 - - - - 0.090%
2018 1,746,424 21 140,727 1,887,172 - - - - 0.090%
2019 1,830,778 21 137,111 1,967,910 - - - - 0.091
2020 1,973,27b 21 145,195 2,118,492 - - - - 0.086%
2021 2,047,195 3 158,247 2,205,445 - - - - 0.091
2022 2,122,031 3 147,894 2,269,928 - - - - 0.090%
2023 2,273,81b 3 159,135 2,432,954 - - - - 0.089%
Note: Data is stated at 100% of actual value as required under Section 135 of the Revenue and Tax Code.
Exemptions are netted directly against the individual property categories. (1) Redevelopment Agency dissolved January 31, 2012 pursuant to Assembly Bill X1 26.
Source: HDL -Ventura County Auditor-Controller's Office 122
Agenda Item No. 13 Page 157 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(Rate per $100 of assessed value)
Source: HDL -Ventura County Assessor
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
0.1503 0.1346 0.1346 0.1346 0.1346 0.1337 0.1347 0.1347 0.1347 0.1349
0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
0.1503 0.134b 0.1346 0.1346 0.1346 0.1337 0.1347 0.1347 0.1347 0.1349
0.0624 0.0856 0.0887 0.0902 0.0665 0.0634 0.0566 0.0685 0.0440 0.0483
0.0992 0.0985 0.1022 0.1059 0.1109 0.0837 0.0921 0.0992 0.0875 0..0811
0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0228 0.0241
0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0190 0.0211
0.0485 0.0435 0.0527 0.0491 0.0475 0.0287 0.0221 0.0282 0.0178 0.0325
0.0142 0.0148 0.0150 0.0143 0.0152. 0.0151 0.0155 0.0130 0.0176 0.0167
0.0185 0.0222 0.0078 0.0172 0.0249 0.0264 0.0272 0.0005 0.0182 0.0171
0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035 0.0035
1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
1.3966 1.4027 1.4046 1.4149 1.4031 1.3545 1,3516 1.3476 1.0035 1.0035 City Direct Rates:
Cíty Basic Rate
Redevelopment Agency
Total City Direct Rate
Overlapping Rates:
Port Hueneme Elementary
Oxnard Elementary
Elementary School Bond Pt Hueneme#2
Elementary School Bond Oxnard #4
Oxnard High School
Ventura Conmlunity College Board
United Water Cons Import
Metropolitan Water
City of Port Hueneme
Total Direct Rate
123
Agenda Item No. 13 Page 158 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Principal Property Taxpayers
Current Year and Ten Years Ago
2023 2014
Taxpayer
F Oliveira Ranch Company
Madera My Dear LP
Glovis America Inc
Marine Terminal Corporation
ChiquitaFresh North America LLC
Wallenius Wilhelemson Logistics
Del Mante Fresh Produce Company
Social Betterment Properties Inter
Yara North America Inc
Wraith LP
Ceres Marine Terminals Inc
Seaview Apartments LLC
Taxable Percent of Total Taxable Percent of Total
Assessed City Taxable Assessed City Taxable
Value c1> Assessed Value ~'~ Value c3~ Assessed Value ~~~ $ 92,142,318 4.05% $ 48,461,728 3.69°I°
39,608,814 1.74% - 0.00%
24,903,700 1.10°l° - 0.00%
17,638,600 0.78 % - 0.00%
11,526,172 0.51 % - 0.00%
- 0.00% 10,257,488 0.78
18,604,526 0.82% 9,585,400 0.73
11,562,957 0.51 % - 0.00
- 0.00% 7,116,100 0.54%
12,598,600 0.55°1° - 0.00%
14,281,966 0.63% - 0.00%
9,629,806 0.42 % 8,284,704 0.63
$ 252,497,459 11.10% $ 83,705,420 6.38%
(1) Source: Ventura County Assessor's Office
(2) 2022-23 Local Secured Assessed Valuation: $2,273,819,646 (3) Source: Ventura County Assessor's Office
(4) 2013-2014 Local Secured Assessed Valuation: $1,312,093,543 124
Agenda Item No. 13 Page 159 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Property Tax Levies and Collections
Last Ten Fiscal Years
Collected within the
Fiscal Year Taxes Levied Fiscal Year of Levy Collections in Total Collections To-Date Ended for the Percent Subsequent Percent
June 30 Fiscal Year (1) Amount of Levy Years (2) Amount (2) of Levy 2014 $ l,426,ó85 $ 1,257,895 88.17% $ 2,240 $ 1,260,135 88.33% 2015 1,633,221 1,457,358 * 89.23% 27 1,457,385 89.23%
2016 1,714,352 1,486,753 * 86.72% - 1,486,753 86.72%
2017 1,781,358 1,598,533 89.74% 1,989 1,600,522 89.85%
2018 1,887,172 1,b98,4ó5 * 90.00% 1,454 1,699,919 90.08% 2019 1,967,910 1,785,925 90.75% 2,883 1,788,808 90,90%
2020 2,118,491 1,827,482 * 8b.26% 2,776 1,830,258 86.39% 2021 2,205,445 1,995,020 90.46% 4,225.41 1,999,245 90.65% 2022 2,269,928 2,052,479 90.42% - 2,052,479 90.42%
2023 2,432,954 2,171,023 * 89.23 % - 2,171,023 89.23
Source: (1) HDL -Ventura County Assessor's Office
{2) Finance Department, City of Port Hueneme
* Revised to correctly reflect proprety tax collections. 125
Agenda Item No. 13 Page 160 of 169 CC Agenda 05-20-2024 Percentage Debt
of Personal Per
Income Capita
5.6b% $1,279
4.97% 1171
4.83% 1044
4.21 % 955
3.48 % 785
3.02% 697
2.9 % 648
2.5 % 587
2. f
0 y
% 559
O.0% V
City of Port Hueneme
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities Business-Type Activities
Fiscal,Year Tax Lease, Loan & Total Wastewater Lease, Loan & Total Total Ended Certifïcates of Allocation Pension Oblig Goverivnental Revenue Other Pension Oblig Business-Type Prúnary June 30 Participation Bonds Bonds Activities Bonds Funds Bonds Activities Government 2014 $ 2,050,000 $ 12,960,000 $ 8,963,808 $ 23,973,808 $ 4,585,000 $ 83,822 $ - $ 4,668,822 $ 28,642,630 2015 1,685,000 11,750,000 8,303,508 21,738,508 4,470,000 - - 4,470,000 26,208,508 2016 1,300,000 10,495,000 7,5b2,195 19,357,195 4,350,000 - - 4,350,000 23,707,195 2017 895,000 9,185,000 7,478,427 17,558,427 4,225,000 - - 4,225,000 21,783,427 2018 4b5,000 6,418,908 7,375,784 14,259,692 4,095,000 - - 4,095,000 18,354,692 2019 - 5,185,863 7,247,886 12,433,749 3,960,000 - - 3,960,000 1b,393,749 2020 - 3,928,621 5,785,259 9,713,880 3,820,000 - 1,775,194 5,595,194 15,309,074 2021 - 2,645,349 5,664,069 8,309,418 3,675,000 - 1,738,007 5,413,007 13,722,425 2022 - 1,334,56b 5,517,239 6,851,805 3,525,000 - 1,692,953 5,217,953 12,069,758 2023 - - 5,346,020 5,346,020 3,370,000 - 1,640,415 5,010,415 10,356,435 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Source: The Annual Comprehensive Financial Report.
126
Agenda Item No. 13 Page 161 of 169 CC Agenda 05-20-2024 2014 $ 2,050 $ 12,960 $ 8,964 $ 23,974 $ 1,42b,685
2015 1,685 11,750 8,304 21,739 1,633,221
2016 1,300 10,495 7,562 19,357 1,714,352
2017 895 9,185 7,478 17,558 1,781,358
2018 465 b,419 7,376 14,260 1,887,172
2019 - 5,186 7,248 12,434 1,967,910
2020 - 3,929 7,560 11,489 2,118,492
2021 - 2,645 7,402 10,047 2,205,445
2022 - 1,335 7,210 8,545 2,269,928
2023 - - 6,986 6,986 2,432,954
(1) Assessed value has been used because the actual value of taxable property is not readily available in the State of California.
Source: The Annual Comprehensive Financial Report.
0.63 $ 93
0.51 75
0.44 58
0.42 39
0.39 20
0.37%
0.36 0.34
0.32 0.29
City of Port Hueneme
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
( In Thousands, except Per Capita )
Outstanding General Bonded Debt
Fiscal Year Total Taxable Percent of
Ended Certificates of Tax Allocation Pension Assessed Assessed Per June 30 Participation Bonds Bonds Total Value Value (1) Capita 127
Agenda Item No. 13 Page 162 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Direct and Overlapping Debt
June 30, 2023
2022-23 Assessed Valuation $ 2,432,954,486
Redevelopment Agency Incremental Valuation -
Adjusted Assessed Valuation $ 2,432,954,486
OVERLAPPING TAX AND ASSESSMENT DEBT
Metropolitan Water District
Ventura County Community CoIlege District
Oxnard Union High School District
Hueneme School District
Oxnard School District
Total Overlapping Tax and Assessment Debt
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
Ventura County General Fund Obligations
Ventura County Superintendent of Schools Certificates of Participation Oxnard Union Hígh School District General Fund Obligations Oxnard School District Certificates of Participation
City of Port Hueneme Lease Purchase and Loan Obligations City of Port Hueneme Pension Obligation Bond.
Total Direct and Overlapping General Fund Debt
OVERLAPPING TAX INCREMENT DEBT (Successor Agency):
TOTAL DIRECT DEBT
TOTAL OVERLAPPING DEBT
Combined Total Debt
Total Debt City's Share of
6/30/2023 %Applicable {1) Debt 6/30/2023
$ 20,175,000 0.067% $ 13,517
257,457,000 1.491 % 3,838,684
352,767,016 4.578% 16,149,674
38,042,954 27.317% 10,392,194
270,584,228 5.b70% 15,342,126
$ 304,565,000 1.491 % $ 4,541,064
7,850,000 1.491 % 117,044
60,811,289 4.578% 2,783,941
10,132,700 5.670% 574,524
755,212 100.000% 755,212
5,346,020 100.000% 5,346,020
$ 14,117,805
$ - 100.000% $ -
$ 6,101,232
$ 53,752,768
$ 59,854,000 (2)
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping districts's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue obligations Ratios to 2022-23 Assessed Valuation:
Total Overlapping Tax and Assessment Debt .......................... 2.21 Total Direct Debt ($6,101,232) .................................................... 0.25% Combined Total Debt ............................................................. 2.46% Ratios to Redevelopment Successor Agency Incremental Valuation Total Overlappïng Tax Increment Debt ................................ . .... N/ A Source: Avenu Insights & Analytics
128
Agenda Item No. 13 Page 163 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Legal Debt Margin Information
Last Ten Fiscal Years
(1)
Total Net Debt Total Debt Applicable
Fiscal Year {2) Adjusted Applicable to Limit: to the Linút as a Ended Assessed Conversion Assessed Debt Limit General Obli- Legal Percentage of June 30 Valuatíon Precentage Valuation Percentage Debt Limit gation Bonds Debt Margin Debt Limit 2014 $ 1,426,685,000 25% $ 356,671,250 15% $ 53,500,688 $ - $ 53,500,688 0% 2015 1,633,221,000 25% 408,305,250 15% b1,245,788 - 61,245,788 0% 2016 1,714,352,000 25% 428,588,000 15% 64,288,200 - 64,288,200 0% 2017 1,781,358,000 25% 445,339,500 15% 66,800,925 - 66,800,925 0% 2018 1,887,172,000 25% 471,793,000 15% 70,768,950 - 70,7b8,950 0% 2019 1,967,910,000 25% 491,977,500 15% 73,796,b25 - 73,796,b25 0% 2020 2,118,492,000 25% 529,623,000 15% 79,443,450 - 79,443,450 0% 2021 2,205,445,000 25% 551,361,250 15% 82,704,188 - 82,704,188 0% 2022 2,269,928,000 25% 567,482,000 15% 85,122,300 - 85,122,300 0% 2023 2,432,954,000 25% 608,238,500 15% 91,235,775 - 91,235,775 0% The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation.
However, tlús provision was enacted when assessed valuation was based upon 25% of market value.
Each parcel is assessed at 100% of market value (as of the most recent change in ownership for that parcel).
The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments located within the state.
Source: (1) Finance Department, City of Port Hueneme
(2) Ventura County Tax Assessor's Office
129
Agenda Item No. 13 Page 164 of 169 CC Agenda 05-20-2024 City of Part Hueneme
Pledged Wastewater Revenue Coverage
Last Ten Fiscal Years
Wastewater Fund Revenue Bonds
Fiscal Year Less Net
Ended Operating Operating Available Debt Service
June 30 Revenue Expenses Revenue Principal Interest Coverage 2014 $ 3,750,154 $ 2,844,702 $ 905,452 $ 110,000 $ 247,984 $ 3 2015 3,806,731 2,805,009 1,001,722 115,000 196,664 3.21 2016 3,693,438 2,244,380 1,449,058 120,000 191,962 4.64 2017 3,733,319 2,056,462 1,676,857 125,000 187,046 5.37 2018 3,689,694 3,053,384 636,310 130,000 181,964 2.04
2019 3,675,353 3,073,772 601,581 135,000 176,748 1.93
2020 3,626,343 5,320,125 {1,693,782) 140,000 174,133 {5.39) 2021 3,562,898 2,248,563 1,314,335 145,000 168,533 4.19 2022 3,721,293 3,305,855 415,438 150,000 162,588 1.33
2023 3,629,987 2,247,707 1,382,280 155,000 151,753 4.51 Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. Operating expenses do not include interest or depreciation expenses.
Source: Finance Department, City of Port Hueneme
130
Agenda Item No. 13 Page 165 of 169 CC Agenda 05-20-2024 City of Part Hueneme
Demographic and Economic Statistics
Last Ten Calendar Years
Per Capita
Calendar Personal Income Personal Unemployment
Year Population (1) (2) {in thousands) (~} Income (1} Rate (s) 2014 22,399 $ 505,657
2015 22,389 527,821
2016 22,702 490,608
2017 22,808 517,583
2018 23,370 528,134
2019 23,52b 543,432
2020 23,607 534,362
2021 23,374 557,643
2022 21,599 592,982
2023 21,356 617,132
$ 22,575 7.3%
23,575 9.9
21,610 8.5
22,693 7.7%
22,070 5.9%
23,099 3.3
22,635 3.5
23,857 8.5
27,454 8.2
28,897 4.7%
HDL:
(1) Source: Decennial census data
(2) Source: State Department of Finance
{3) Source: California Employment Development Department {4) Source: Bureau of Labor Statistics- Demographic estimates are based on last available census 131
Agenda Item No. 13 Page 166 of 169 CC Agenda 05-20-2024 _-.~ ~^ ~~.~..~~~~.~.~.~
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Souzce~ ~i~'B~dzetDoconzeo~&z~b`ance ~i~/o[~or Bb~eneo`e Agenda Item No. 13 Page 167 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Capital Assets Statistïcs
by Function
Last Ten Fiscal Years
Políce:
Stations
Public works:
Street (miles)
Streetlights
Traffic signals
Parks and recreation:
Parks
Community centers
Water:
Water mains (miles)
Maximum daily capacity
(million gallons per day)
Wastewater:
Sanitary sewers (miles)
Storm sewers (miles)
Maximum daily treatment capacity
(million gallons per day)
Source: City of Port Hueneme
Fiscal Years
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
1 1 1 1 1 1 1 1 1 1 1
75 75 75 75 75 75 75 75 75 75 75
118 118 118 118 118 118 118 118 118 118 118
10 10 10 10 10 10 10 10 10 10 10
5 5 5 5 5 5 5 5 5 5 5
1 1 1 1 1 1 1 1 1 1 1
100 100 100 100 100 100 100 100 100 100 100
5 5 5 5 5 5 5 5 5 5 10
45 45 45 45 45 45 45 45 45 45 45
22 22 22 22 22 22 22 22 22 22 22
5 5 5 5 5 5 5 5 5 5 5
133
Agenda Item No. 13 Page 168 of 169 CC Agenda 05-20-2024 City of Port Hueneme
Wastewater Service Rates
Last Ten Fiscal Years
Wastewater Volume Rates Per Hundred Cubic Feet (H
Fiscal
~~~
~ Residential ~ Commercial
Year Ended Single Muti- Standard Med-High High
June 30 Family Family Strength Strength Strength
2023 $ 36.00 $ 36.00 $ 2.71 $ 4.20 $ 5.40
2022 36,00 3b.00 2.71 4.20 5.40
2021 36.00 36.00 2.71 4.20 5.40
2020 3b.00 36.00 2.71 4.20 5.40
2019 36.00 36.00 2.71 4.20 5.40
2018 36.00 36.00 2.71 4.20 5.40
2017 36.00 36.00 2.71 4.20 5.40
201b 36.00 36.00 2.71 4.20 5.40
2015 3b.00 36.00 2.71 4.20 5.40
2014 36.00 36.00 2.71 4.20 5.40
NOTE:
1 HCF = 748 gallons
The City bills bi-monthly and by hundred cubic feet (HCF).
Rates are based on 3 j4" meter, which is the standard household meter size.
Source: Port Hueneme Wastewater Division
134
~a 2.40
2.40 2.40
2.40 2.40
2.40 2.40
2.40 2.40
2.40 Agenda Item No. 13 Page 169 of 169 CC Agenda 05-20-2024