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The 2025A Installment Sale Agreement
Obligation to Pay 2025A Installment Sale Payments . Pursuant to the 2025A Installment Sale Agreement, the City is obligated to make the 2025A Installment Sale Payments , but solely from Net Revenues (as defined below) of the Electric System and all moneys on deposit in the Ele ctric Revenue Fund, which are sufficient to provide for the payment of the interest, premium, if any, and principal on the 2025A Bonds. The obligation of the City to pay the 2025A Installment Sale Payments is absolute and unconditional, and until such time as such 2025A Installment Sale Payments have been paid in full (or provision for the payment thereof shall have been made pursuant to the 2025A Installment Sale Agreement), the City will not discontinue or suspend any 2025A Installment Sale Payments required to be paid by it under the 2025A Installment Sale Agreement when due, whether or not the Electric System or any part thereof is operating or operable, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement for any cause whatsoever.
Pledge of Electric System Revenues. The obligation o f the City to make the 2025A Installment Sale Payments and the interest thereon is a special obligation of the City payable solely from and secured solely by a pledge of and lien on “Net Revenues” (as defined below) of the Electric System.
The term “Net Re venues” is defined in the 2025A Installment Sale Agreement to mean, for any period of time in question, the Revenues during such period less the Maintenance and Operation Costs during such period.
“Revenues” is defined in the 2025A Installment Sale Agreement to consist of all gross income and revenue received or receivable by the City from the ownership or operation of the Electric System, including all rates and charges received by the City for the Electric Service and the other services and facilities of the Electric System, all proceeds of insurance covering business interruption loss relating to the Electric System and all other income and revenue howsoever derived by the City from the ownership or operation of the Electric System or otherwise arising from the Electric System, including all Payment Agreement Receipts, and all income from the deposit or investment of any money in the Electric Revenue Fund, but excluding (i) proceeds of taxes and (ii) refundable deposits made to establish credit and advances or contributions in aid of construction and line extension fees. See “APPENDIX D –SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS –DEFINITIONS.” “Maintenance and Operation Costs” is defined in the 2025A Installment Sale Agreement to mean the costs paid or incurred by the City for maintaining and operating the Electric System, including, but not limited to, (a) all costs of electric energy and power generated or purchased by the City for resale, costs of transmission, fuel supply a nd water supply in connection with the foregoing, (b) all expenses of management and repair and other expenses necessary to maintain and preserve the Electric System in good repair and working order, (c) all administrative costs of the City that are charged directly or apportioned to the operation of the Electric System, such as salaries and wages of employees, overhead, taxes (if any) and insurance premiums, (d) all other reasonable and necessary costs of the City or charges required to be paid by it to comply with the terms of the 2025A Installment Sale Agreement or of any resolution authorizing the execution of the 2025A Installment Sale Agreement or of any resolution authorizing the issuance or incurrence of any Parity Obligations or of such Parity Oblig ations, such as compensation, reimbursement and indemnification of the trustee, remarketing agent or surety costs for the 2025A Bonds or other Parity Obligations, letter of credit fees relating to Parity Obligations, fees and expenses of Independent Certified Public Accountants, (e) all amounts required to be paid by the City under contracts with a joint powers agency for the purchase of capacity, energy, transmission capability or any other commodity or service in connection with the foregoing, which contract requires payments to be made by the City thereunder to be Packet Pg. 267
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treated as maintenance and operation costs of the Electric System (see “ – Outstanding Electric System Revenue Obligations – Take-or-Pay Power Sales Contracts ” below), (f) all deposits to be made to the Rebate Fund pursuant to the Tax Certificate and all deposits in comparable accounts established with respect to Parity Obligations required to be deposited pursuant to the proceedings authorizing such Parity Obligations, and (g) any other cost or expense which, in accordance with Generally Accepted Accounting Principles, is to be treated as a cost of operating or maintaining the Electric System; but excluding in all cases, depreciation, replacement and obsolescence charges or reserves therefor and a mortization of intangibles. See “APPENDIX D – SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS – DEFINITIONS.”
The obligation of the City to make 2025A Installment Sale Payments does not constitute a debt of the City, the State of California or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction. The general fund of the City is not liable, and neither the faith and credit nor the taxing power of the City is pledged, for the pay ment of the 2025A Installment Sale Payments or the performance or satisfaction of any other obligations of the City under the 2025A Installment Sale Agreement.
Allocation of Revenues under the 2025A Installment Sale Agreement . Pursuant to 2025A Installment Sale Agreement , the City agrees and covenants that all Revenues received by it shall be deposited when and as received in the “City of Redding Electric Revenue Fund” (the “Electric Revenue Fund”), established by the City under the 2025A Installment Sale A greement. The City shall pay all Maintenance and Operation Costs (including amounts reasonably required to be set aside in contingency reserves for Maintenance and Operation Costs the payment of which is not then immediately required) from the Electric Rev enue Fund as they become due and payable, and all remaining money on deposit in the Electric Revenue Fund shall be set aside and deposited by the City at the following times:
(a) Revenue Fund Deposits. On or before the fourth Business Day before each date on which a 2025A Installment Sale Payment becomes due and payable under the 2025A Installment Sale Agreement, whether on an Interest Payment Date or upon an acceleration pursuant to the 2025A Installment Sale Agreement, the City shall, from the money in the Electric Revenue Fund, transfer to the Trustee for deposit in the Revenue Fund created under the Trust Agreement a sum equal to the 2025A Installment Sale Payment becoming due and payable under the 2025A Installment Sale Agreement on such due date, except that no such deposit need be made to the extent the Trustee then holds money for such purpose in the Revenue Fund available to pay the 2025A Installment Sale Payment becoming due and payable under the 2025A Installment Sale Agreement on such date. The City shall also, from such remaining moneys in the Electric Revenue Fund, pay to the party entitled thereto or transfer or cause to be transferred to any applicable debt service or other payment fund or account for any Parity Obligations, without preference or priority between transfers made as described in this sentence and the transfers made for the payment of the 2025A Bond s as described in the immediately preceding sentence, and in the event of any insufficiency of su ch moneys ratably without any discrimination or preference, on the dates specified in the proceedings relating to such Parity Obligations, the sum or sums required to be paid or deposited in such debt service or other payment fund or account with respect t o principal, premium, if any, and interest on Parity Obligations (or in the case of Parity Payment Agreements, the net payments due) in accordance with the terms of such Parity Obligations. (b) Remaining Funds. After making the foregoing deposits and transfers, the City shall apply any remaining money in the Electric Revenue Fund for any lawful purpose of the City, including for the payment of any obligations of the City which constitute Subordinate Obligations, the payments under and pursuant to which are payable from Net Revenues, subject and subordinate to the 2025A Installment Sale Payments and to all Parity Obligations in accordance with the Packet Pg. 268
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instruments authorizing such Subordinate Obligations; provided, however, that no moneys in the Electric Revenue Fund shall be applied to any purpose not related to the expansion of the facilities or business of the Electric System or replacement of facilities thereof, including the payment of any Subordinate Obligations, in any Fiscal Year unless amounts remaining on dep osit in the Electric Revenue Fund shall be sufficient to make the remaining transfers hereinabove described required to be made in such Fiscal Year with respect to the 2025A Installment Sale Payments and all Parity Obligations.
The City shall distribute Ne t Revenues available for the payment of the Outstanding 2025A Installment Sale Payments and payments on all outstanding Parity Obligations on a pro rata basis without regard to whether each such Parity Obligation has a funded debt service reserve or a sure ty bond or other similar funding instrument.
Rate Covenant. The City covenants under the 2025A Installment Sale Agreement to fix, prescribe and collect rates and charges for the services, facilities and electricity of the Electric System during each Fiscal Year which will be at least sufficient to yield:
(a) Adjusted Annual Revenues for such Fiscal Year at least equal to the sum of the following for such Fiscal Year: (i) Maintenance and Operation Costs, (ii) Adjusted Annual Debt Service, and (iii) all other payments required to meet any other obligations of the City which are charges, liens or encumbrances upon or payable from the Electric Revenue Fund, including all amounts owing under Subordinate Obligations; and
(b) Adjusted Annual Net Revenues for such Fiscal Year equal to at least 110% of the Adjusted Annual Debt Service for such Fiscal Year.
The City may make adjustments from time to time in such rates and charges and may make such classification thereof as it deems necessary, but covenants not to reduce the rates and charges then in effect unless the Adjusted Annual Revenues and Adjusted Annual Net Revenues from such reduced rates and charges will at all times be sufficient to meet the requirements described above. “Adjusted Annual Net Revenues” means for any Fiscal Year or any designated 12-month period in question, the Adjusted Annual Revenues during such Fiscal Year or 12-month period less Maintenance and Operation Costs during such Fiscal Year or 12-month period. “Adjusted Annual Revenues” means for any Fiscal Year or any designated 12 -month period in question, the Revenues during such Fiscal Year or 12 -month period, less, for purposes of determining compliance with the rate covenant and conditions for the execution of Parity Obligations, any Payment Agreement Receipts taken into account in calculating Annual Debt Service with respect to payment of interest on Parity Obligations, plus, for purposes of determining compliance with the rate covenant only, the amount of Available Reserves on deposit, or w hich the City has authorized to be deposited, in the Electric Revenue Fund as of the first day of such Fiscal Year or 12-month period. “Adjusted Annual Debt Service” means for any Fiscal Year or any designated 12-month period in question, the Annual Debt Service for such Fiscal Year or 12 -month period minus the sum of the amount of the Annual Debt Service with respect to Outstanding Parity Obligations to be paid during such Fiscal Year or 12 -month period, from the proceeds of Parity Obligations or interest earned thereon (other than interest deposited into the Electric Revenue Fund), all as set forth in a Certificate of the City. “Available Reserves” means as of any date of calculation, the amount of unrestricted funds in the Electric Revenue Fund designated as “Available Reserves” for purposes of the 2025A Installment Sale Packet Pg. 269
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Agreement by the City and then available to pay Maintenance and Operation Costs and/or Annual Debt Service which may include transfers to the Electric Revenue Fund from any fund which is legally available for deposit in the Electric Revenue Fund.
For definitions of certain other terms used herein, see “APPENDIX D – SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS – DEFINITIONS.” No Debt Service Reserve Fund
No debt service reserve fund will be established for the 2025A Bonds. Amounts held in or credited to any other debt service reserve fund established in connection with the Outstanding 2015 RJPFA Electric System Bonds, the 2017 City Electric System Refunding Bonds, the 2018 City Electric System Refunding Bonds, or any other Parity Obligations of the City do not secure, and are not available for, the payment of the 2025A Installment Sale Payments or the 2025A Bonds.
Outstanding Electric System Revenue Obligations
Take-or-Pay; Joint Powers Agency Obligations. As described herein, the City has entered into certain power sales contracts for the purchase of energy and certain other agreements for the payment of its share of the costs of certain projects in which it is participating through joint powers agencies, including M-S-R Public Power Agency (“M -S-R PPA”), M -S-R Energy Authority (“M -S-R EA”) and the Transmission Agency of Northern California (“TANC”). As of January 1, 2025, the City had outstanding approximately $21.0 million principal amount of obligations related to debt of the joint powers agencies in which it participates (exclusive of obligations relating to debt of M -S-R EA which debt is nonrecourse to the City). See “THE ELECTRIC SYSTEM – Power Supply Resources – Joint Powers Agency Resources” and “– Indebtedness.” The City’s obligations under such contracts constitute a portion of the Maintenance and Operation Costs of the Electric System, payable from Revenues of the Electric System prior to the 2025A Installment Sale Payments and other Parity Obligations. The City may incur additional obligations pursuant to its agreements with such joint power agencies in which it participates or enter into other contacts or leases for the purchase of facilities, properties, structures or works or electric output, capacity or other electrical services for the Electric System which are Maintenance and Operation Costs of the Electric System, payable from Revenues of the Electric System prior to the 2025A Installment Sale Payments and other Parity Obligations. See also “The 2025A Installment Sale Agreement – Rate Covenant” above.
Outstanding Parity Obligations. As of January 1, 2025, the City had outstanding Parity Obligations in the aggregate principal amount of $ 82.72 million, comprised of (i) the installment sale payments related to the 2015 RJPFA Electric System Bonds outstanding in the principal amount of $28.44 million, (ii) the 2017 City Electric System Refunding Bonds outstanding in the principal amount of $32.85 million, and (iii) the 2018 City Electric System Refunding Bonds outstanding in the principal amount of $21.43 million.
The 2015 RJPFA Electric System Bonds were issued pursuant to a trust agreement, dated as of December 1, 2015, by and between the Authority and U.S. Bank Trust Company, National Association, as successor trustee. The 2015 RJPFA Electric System Bonds are payable primarily from certain installment sale payments required to be made by the City to the Authority under the terms of a 2015 Installment Sale Agreement, dated as of December 1, 2015 (the “2015 Installment Sale Agreement”), by and between the City and the Authority. The 2017 City Electric System Refunding Bonds were issued pursuant to an Indenture, dated as of March 1, 2017 (the “2017 Indenture”), by and between the City and U.S. Bank Trust Company, National Association, as successor trustee. The 2018 City Electric System Refunding Bonds were issued pursuant to an Indenture, dated as of March 1, 2018 (the “2018 Indenture”), by and between the City and U.S. Bank Trust Company, National Association, as successor trustee.
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The 2025A Installment Sale Payments under the 2025A Installment Sale Agreement are payable from Net Revenues of the City’s Electric System on a parity with the payment from such Net Revenues of the installment sales payments under the 2015 Installment Sale Agreement, and the debt service payments on the 2017 City Electric System Refunding Bonds and the 2018 City Electric System Refunding Bonds.
The City may hereafter incur additional Parity Obl igations which are payable from Net Revenues on a parity with the outstanding Parity Obligations in accordance with the terms of the 2025A Installment Sale Agreement as described below.
Outstanding Subordinate Obligations. In May 2023, the City and the Aut hority entered into the Revolving Credit Agreement with the Credit Bank. Under the Revolving Credit Agreement, the Credit Bank has agreed to advance funds to the Authority, from time to time, in an amount up to $25.0 million, for the benefit of the City’s Electric System. The term of the Revolving Credit Agreement extends to October 29, 2025, unless extended or earlier terminated pursuant to its terms. Borrowings under the Revolving Credit Agreement are payable from, and secured by, installment sale payments required to be made by the City to the Authority under the Subordinate Installment Sale Agreement, by and between the City and the Authority. The in stallment sale payments required to be made by the City under the Subordinate Installment Sale Agreement constitute Subordinate Obligations, payable from Net Revenues of the Electric System of the City subject and subordinate to the City’s obligation to pa y the 2025A Installment Sale Payments and the other Parity Obligations. As of January 1, 202 5, there were no borrowings by the City outstanding under such Revolving Credit Agreement. See also “THE ELECTRIC SYSTEM – Indebtedness” for additional information regarding the terms of the Revolving Credit Agreement, including certain circumstances and the terms under which the installment sale payment obligations of the City under the Subordinate Installment Sale Agreement relating thereto may be accelerated or ot herwise become due prior to maturity. The City may incur additional Subordinate Obligations in the future in accordance with the terms of the 2025A Installment Sale Agreement as described below.
Additional Electric System Revenue Obligations
Additional Take-or-Pay and Other Contracts. The City may incur additional obligations pursuant to its agreements with such joint power agencies in which it now, or in the future may, participate or enter into other contacts or leases for the purchase of facilities, properties, structures or works or electric output, capacity or other electrical services for the Electric System which are Maintenance and Operation Costs of the Electric System, payable from Revenues of the Electric System prior to the 2025A Bonds and oth er Parity Obligations. See also “– The 2025A Installment Sale Agreement – Rate Covenant” above.
Additional Parity Obligations . The City will covenant pursuant to the 2025A Installment Sale Agreement that it will not incur additional obligations payable from and secured by a lien on Net Revenues of the Electric System or moneys in the Electric Revenue Fund prior to the lien and charge securing the 2025A Installment Sale Payments. In addition to the City’s obligation to pay the Parity Obligations to be outstanding upon the delivery of the 2025A Bonds, the City may at any time execute and deliver any additional Parity Obligations, the payment of which is payable from and secured by a lien and charge on the Net Revenues and moneys in the Electric Revenue Fund on a parity with the charge and lien on the Net Revenues and moneys in the Electric Revenue Fund for the payment of the 2025A Installment Sale Payments and such outstanding Parity Obligations, subject to certain conditions, including among others, that:
(a) either –
(1) during any 12 consecutive calendar months out of the immediately preceding 18 calendar month period, the Adjusted Annual Net Revenues were at least equal Packet Pg. 271
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to 110% of the Maximum Annual Debt Service for all Outstanding 2025A Installment Sale Payments and all Outstanding Parity Obligations plus the Parity Obligation proposed to be executed; or
(2) as evidenced by a Certificate of the City, the projected Adjusted Annual Net Revenues during the succeeding first complete Fiscal Year following issuance of such Parity Obligation in which interest is not capitalized in whole or in part from the proceeds of Parity Obligations, is at least equal to 110% of the Maximum Annual Debt Service for all Outstanding 2025A Installment Sale Payments and all Outstanding Parity Obligations plus the Parity Obligation proposed to be executed; and (b) no Event of Default (or any event which would become an Event of Default once all notice or grace periods have passed) exists unless such Event of Default or default shall be cured upon such issuance.
Notwithstanding the foregoing, the provisions described in paragraph (a) above shall not limit the ability of the City to execute any Parity Obligations at any time to refund any Outstanding Parity Obligations which results in a present value savings to the City, inclusive of all costs of such refunding.
Subordinate Obligations. The 2025A Installment Sale Agreement provides that the City may incur Subordinate Obligations without meeting the tests set forth above.
Investment of Funds
All funds held under the Trust Agreement are required to be invested in certain Permitted Investments as provided under the Trust Agreement. See “APPENDIX D – SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS – DEFINITIONS” for the defi nition of Permitted Investments.
Funds held by the City are invested by the City in accordance with the City’s Investment Policy as authorized by Section 53600 et seq. of the Government Code of the State of California. Allowable investments under the Inves tment Policy are those authorized by California Government Code Sections 53601 and 53630. See “THE ELECTRIC SYSTEM – City Investment Policy.” All investments, including the Permitted Investments and those authorized by law from time to time for investments by public agencies, contain a certain degree of risk. Such risks include, but are not limited to, a lower rate of return than expected and loss or delayed receipt of principal. The occurrence of these events with respect to amounts held under the Trust Agreement, or other amounts held by the City, could have a material adverse effect on the City’s finances.
Limitations on Remedies
The ability of the City to comply with its covenants under the 2025A Installment Sale Agreement and to generate Net Revenues of the Electric System sufficient to pay the 2025A Installment Sale Payments securing the 2025A Bonds may be adversely affected by actions and events outside of the control of the City. Furthermore, any remedies available to the owners of the 2025A Bonds upon the occurrence of an event of default under the Trust Agreement are in many respects dependent upon judicial actions which are often subject to discretion and delay and could prove both expensive and time consuming to obtain. In addition to the limitations on remedies contained in the Trust Agreement and the 2025A Installment Sale Agreement, the rights and remedies provided in the Trust Agreement and the 2025A Installment Sale Agreement may be limited by and are subject to bankruptcy, insolvency, reorgani zation, moratorium and other similar laws affecting creditors’ rights, to the application of equitable principles, to the exercise of Packet Pg. 272
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judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State of California. Bankruptcy proceedings, or the exercise of powers by the federal or State government, if initiated, could subject the owners of the 2025A Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently m ay entail risks of delay, limitation, or modification of their rights.
See “APPENDIX D – SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS – SUMMARY OF THE TRUST AGREEMENT – Events of Default and Remedies” for additional information regarding events of default under the Trust Agreement and the remedies available to owners of the 2025A Bonds pursuant to the terms thereof.
THE AUTHORITY
The Authority was originally created in December 1988 by the Joint Exercise of Powers Agreement which was ente red into between the City and the Housing Authority. The Authority was created for the purpose of facilitating the financing of public capital improvements in accordance with the Joint Exercise of Powers Act. Under the Joint Exercise of Powers Agreement, t he Authority is a public entity, separate from the City and the Housing Authority. The debts, liabilities and obligations of the Authority shall not constitute debts, liabilities or obligations of the City or the Housing Authority.
Pursuant to the Joint Exercise of Powers Agreement, the Authority is empowered to, among other things, cause the acquisition of equipment and other personal property for the use of the City. The Joint Exercise of Powers Agreement further provides that the Authority will fulfill the purposes of the Joint Exercise of Powers Agreement by undertaking the sale and issuance of bonds in accordance with the Act.
The Authority shall continue in effect so long as any obligation of the Authority remains unpaid or any Authority bonds are outstanding.
The Authority is administered by a governing board consisting of the City Council of the City.
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THE ELECTRIC SYSTEM
General
The City is a general law city of the State of California. As a general law city, the City has the power to furnish electric utility service to its inhabitants. In connection therewith, the City has the powers of eminent domain, to contract, to construct works, to fix rates and charges for commodities or services furnished and to incur indebtedness. Specifically, the City Council is authorized by the Redding Municipal Code to establish electric utility rates for all electric utility subscribers, and any rate changes are not subject to regulatory agency review.
The City provides electric utility service through the Electr ic Utility Department. The legal responsibilities and powers of the Electric Utility Department, including the establishment of rates and charges, are exercised through the five-member City Council. The members of the City Council are elected City-wide for staggered four -year terms. The Electric Utility Department is under the direction of the Director of the Electric Utility Department who is appointed by the City Manager.
To provide electric service within its service area (which is coterminous with the City’s corporate city boundaries), the City owns and operates an Electric System that includes generation, transmission and distribution facilities. The City also purchases power and transmission service from others. In addition, the City provides normal city services to its inhabitants such as police and fire protection and water and sewer service.
Since 1921, the City has provided electric service within its boundaries. For the Fiscal Year ended June 30, 2024, the City served approximately 45,413 customer accounts, had total sales of approximately 737 million kWh and a peak demand of 234.2 MW.
Management
The City’s electric utility operations are carried out under the direction of the Director of the Electric Utility Department and in accordance with the City Council’s directives and policies.
Nick Zettel is the Electric Utility Director for the City of Redding Electric Utility. Mr. Zettel holds a Bachelor of Science degree in Financial Management and has worked at the Electric Utility Department for over 20 years holding various positions in resource planning, energy trading, market operations, and leadership team development. He is a member of the Central Valley Project O&M Governance Board, the Central Valley Project Corporation Board of Directors, and C ommissioner of the Balancing Authority of Northern California, the Transmission Agency of Northern California, and the M-S-R Public Power Agency and M-S-R Energy Authority.
Power Supply Resources
The following table sets forth information concerning the E lectric Utility Department’s power supply resources and the percent of total energy supplied by each during the Fiscal Year ended June 30, 2024.
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CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
POWER SUPPLY RESOURCES
(For the Fiscal Year Ended June 30, 2024)
Source
Capacity
Available
(MW)(1)
Actual Energy
(GWh)
Percent of
Total Energy(2)
Purchased Power:
Western Base Resource 128.5 285.2 25.5%
M-S-R PPA/Big Horn I Wind Project 23.0 154.4 13.8
Short-Term Purchases(3) N/A 292.8 26.2
Total Purchased Power(1) 151.5 732.4 65.6%
Generation Facilities:
Redding Power Plant(4) 183.1 360.8 32.3%
Whiskeytown 3.5 23.7 2.1
Total Generated Power 186.6 384.5 45.4%
Total (Generated and Purchased)(2) 338.1 1,116.9 100.0% Total Energy Sold and
Exchanged at Wholesale
N/A
350.8
31.4%
System Requirement for Retail N/A 766.1 68.6%
(1) Capacities listed may not be available at all times and do no necessarily represent values used for resource planning.
(2) Totals may not add due to rounding.
(3) Includes power purchases for resale. See “–Wholesale Energy Trading” below. (4) Capacity listed is nameplate capacity (EIA860 defined) for Redding Power Plant.
Source: City of Redding.
The City’s Redding Power Plant serves as its primary local generation resource (although the City substitutes market purchases when economical to do so). The Redding Power Plant has a total nameplate capacity of 183.1 MW, or approximately 1,300 GWh of available energy per year. The plant was expanded to its current capacity in 2011 with the addition of Unit 6, a natural gas -fired combined cycle generator which added 42.5 MW of capacity to the plant. This addition was designed, in part, to offset an expected decrease in energy to be received by the City as a r esult of the expiration of certain previously existing power supply arrangements. See “ – Joint Powers Agency Resources -Purchased Power, Generation and Transmission – M-S-R PPA – San Juan Retained Obligations” below. The Redding Power Plant, together with the City’s other existing power supply resources and additional renewable resources anticipated to be acquired by the City to meet future regulatory requirements, are currently expected by the City to be sufficient to supply the City’s projected energy needs through the foreseeable future.
Each of the City’s power supply resources are briefly described below.
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Generating Facilities
Redding Power Plant. The Redding Power Plant is located on a site owned by the City within the city limits of Redding. The Redding Power Plant presently consists of the following components: (i) a two- on-one combined cycle power generating plant that uses two Siemens SGT-800 gas turbines, one with a 40 MW nameplate capacity and one with a 42.5 MW nameplate capacity, operating in combined cycle with a
26.8 MW GE steam turbine, and (ii) three GE Frame 5 simple cycle combustion turbines, with a combined nameplate capacity of 73.8 MW, for a total station nameplate capacity of 183.1 MW. The initial steam unit at the Redding Power Plant was acquired by the City in August 1991 and was converted from biomass fuel to natural gas in 1994. The three simple cycle combustion turbines were added to the Redding Power Plant site in October 1996. The first SGT-800 gas turbine, Unit No. 5, was placed into commercial operation in June 2002. Unit No. 6, the second SGT -800 gas turbine with a heat recovery steam generator, was placed into commercial operation in August 2011. See also “–Fuel Supply” below.
Whiskeytown Project. The City owns and operates a 3.5 MW hydroelectric generating plant located at the United States Bureau of Reclamation (the “U.S. Bureau of Reclamation”) Whiskeytown Dam near Redding, California. This project, completed in 1986, has produced average annual energy in the amount of approximately 25 GWh. In some years, temporarily high flow releases have been captured by the flexibility of the dual runners installed in the Whiskeytown unit and additional energy has been generated.
The City estimates that under minimum flow releases, this hydroelectric generation facility will produce approximately 10 GWh per year. The City estimates that this hydroelectric generation facility will produce approximately 24 GWh in Fiscal Year 2024-25. The City has received full California Energy Commission (“CEC”) certification for the Whiskeytown hydroelectric facility as a California Renewable Portfolio Standard (“RPS”) “Eligible” renewable resource. The Whiskeytown hydroelectric facility has been registered with the Western Renewable Energy Generation Information System (“WREGIS”), and the associated renewable energy credits (“RECs”) will either be retained by the City electric utility for RPS compliance purposes or utilized for wholesale sales.
Joint Powers Agency Resources – Purchased Power, Generation and Transmission TANC California-Oregon Transmission Project. The City, together with fourteen other northern California cities, utility districts and one rural electric cooperativ e, is a member or associate member of a California joint powers agency known as the Transmission Agency of Northern California (referred to herein as TANC). TANC, together with Western Area Power Administration (“Western”) and PG&E (collectively, the “COTP Participants”), own the California–Oregon Transmission Project (the “COTP”), a 339-mile long, 1,700 MW (as most recently re -rated), 500 kV transmission project between southern Oregon and central California. The COTP was placed in service on March 24, 199 3, at an original cost of approximately $430 million.
To utilize the full transfer capability of the COTP on a firm basis and maximize the benefits of the line, the COTP is operated on a coordinated basis with the Pacific AC Intertie (the “Intertie”), a t wo-line system which, like the COTP, connects California utilities with those in the Pacific Northwest. The Intertie lines are owned by PG&E, PacifiCorp and Western and are operated by the California Independent System Operator Corporation (the “CAISO”). R ate schedules are on file with the Federal Energy Regulatory Commission (“FERC”) to accomplish this coordination. The three-line system comprised of the COTP and the Intertie is collectively referred to as the California-Oregon Intertie.
Pursuant to Project Agreement No. 3 for the COTP (the “TANC Agreement”), TANC has agreed to provide to the City and 12 other members of TANC (the “TANC Member-Participants”) a participation percentage of TANC’s entitlement (currently approximately 1,505.6 MW) of COTP transfer capability. In return, each TANC Member-Participant has severally agreed to pay TANC a corresponding percentage of TANC’s share of the COTP construction costs, including debt service on TANC’s revenue bonds and other Packet Pg. 276
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obligations issued by TANC to finance its ownership share of the COTP. A TANC Member -Participant’s obligations to make payments to TANC are not dependent upon the operation of the COTP and are not subject to reduction. Upon an unremedied default by one TANC Member in making a payment requir ed under the TANC Agreement, the non-defaulting TANC Member-Participants are required to increase pro- rata their participation percentage by the amount of the defaulting TANC Member-Participant’s entitlement share, provided that no such increase can result in a greater than 25% increase in the participation percentage of a non-defaulting TANC Member-Participant. See “– Indebtedness” below.
The City gains access to its COTP entitlements (representing approximately 148 MW of COTP scheduling rights as more fully described below) t hrough a long-term transmission service contract with Western. See “– Interconnections, Transmission and Distribution.” The City is currently using a portion of its COTP transfer capability to provide transmission of renewa ble wind capacity and energy purchased through M-S-R PPA. See “ M-S-R PPA Purchased Power -Big Horn I Wind Energy Project ” below. The remaining transfer capability is used to make spot market purchases of firm and non -firm energy and as reliability backup for the City’s firm power purchases and sales commitments.
TANC’s current ownership interest in the COTP includes certain COTP transmission assets (representing an approximately 121 MW entitlement) purchased by TANC in April 2008 from Vernon Light & Power of the City of Vernon, California (“Vernon”), one of the original owners of the COTP. The City, as well as six other TANC Members, participated in the acquisition from Vernon and share in the increase in COTP entitlement rights and are responsible for the associated cost obligation for this TANC interest. In addition, effective as of January 1, 2025, TANC accepted the assignment and transfer from the City of a 1.7496% share (approximately 25 MW) ownership interest in the COTP purchased by the City in April 2005 from the City of Shasta Lake, another original owner of the COTP. The City will retain its rights to utilize such COTP entitlement previously owned by the City and transferred to TANC, and the City is responsible for the associated cost obligation. Al so effective as of January 1, 2025, TANC accepted the assignment and transfer of certain interests in the COTP (representing approximately 2 MW) acquired by the City of Roseville (“Roseville”) and the Turlock Irrigation District (“TID”) from the San Juan W ater District and Carmichael Water District, as original owners of the COTP. Roseville and TID enjoy the COTP entitlement rights represented by these COTP interests and are responsible for the associated cost obligations.
TANC financed its interest in the COTP through the issuance of California-Oregon Transmission Project revenue bonds, of which approximately $159.6 million principal amount was outstanding as of January 1, 2025. In November 2021, TANC approved a 20-year capital replacement plan for the COTP. In August 2024, TANC approved the execution and delivery of a Credit Agreement with JPMorgan Chase Bank, National Association (the “TANC Credit Agreement”), establishing a line of credit pursuant to which TANC may borrow, pay down, refund and re -borrow, through the issuance and sale from time to time of short-term variable rate notes (“TANC short-term notes”), an aggregate amount outstanding at any time of up to $120,000,000 for the purpose of financing improvements to the COTP on an interim basis. TANC executed the TANC Credit Agreement in September 2024. As of January 1, 2025, $91.7 million aggregate principal amount of TANC short-term notes were outstanding under the TANC Credit Agreement. See “– Indebtedness – Joint Powers Agency Obligations.”
Pursuant to the TANC Agreement (and the effect of the subsequently acquired interests described above), the City is obligated to pay 10.04% of TANC’s COTP operating and maintenance expenses and approximately 8.4% of TANC’s debt service on its outstanding bonds and notes. The City will be obligated to pay approximately 10.04% of TANC’s debt service on future TANC indebtedness incurred in connection with the currently ongoing 20 -year COTP capital replacement plan (including the anticipated take -out financing of the o utstanding notes issued). See “ – Indebtedness – Take-or-Pay; Joint Powers Agency Obligations.” The City is entitled to 10.04% of TANC’s share of COTP transfer capability (approximately 148 MW net of life-of-the asset third-party layoffs by TANC) on an unco nditional take-or-pay basis. The Packet Pg. 277
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City’ share of annual operating and maintenance expenses and debt service payable to TANC pursuant to the TANC Agreement is estimated to be approximately $ 6.6 million per year. The City’s payments to TANC, including payment s for debt service on TANC’s revenue bonds and other debt obligations, constitute Maintenance and Operation Costs of the City’s Electric System.
The COTP is operated within the Balancing Authority of Northern California (“BANC”) balancing authority area. A balancing authority performs a balancing function in which customer usage and resources are matched on a moment -by-moment basis. In addition, a balancing authority operates the transmission system, monitoring power lines to ensure they are operated within the reliable limits of the system in addition to coordinating the operation with neighboring balancing authorities. The City is a member of BANC. See “–Interconnections, Local Transmission and Distribution Facilities” below. Under BANC, the City enjoys th e benefits of direct scheduling energy transactions over the COTP within the balancing authority area, free of the CAISO tariff, charges, congestion and encumbrances.
As the 340 -mile COTP transmission line runs from Kamath County in Southern Oregon to the Tesla Substation located south of the City of Tracy in San Joaquin County, in central California, approximately 34% of the transmission line runs through the “elevated” Tier 2 fire risk zone and 1% runs through the “extreme” Tier 3 fire risk zone as identified on the CPUC’s Fire-Threat Map. TANC employs a fire risk management plan to mitigate its wildfire risk exposure that includes semi -annual aerial inspections; a series of annual ground inspections; a rigorous vegetation management program; as well as limiting crops and vegetation height in orchard areas. The COTP is constructed entirely of steel lattice towers or single pole steel structures which includes a 200 foot right-of-way for the majority of the COTP that is kept clear of trees and large vegetati on. TANC has submitted its wildfire mitigation plan for the COTP to the California Wildfire Safety Advisory Board (the “Wildfire Advisory Board”) as required by California Senate Bill 901 (“SB 901”). See “CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY – State Legislation and Regulatory Proceedings – Legislation Relating to Wildfires; Related Risks.”
Tesla-Midway Transmission Service. The southern physical terminus of the COTP is near PG&E’s Tesla Substation near Tracy, California. TANC has arrange d for PG&E to provide TANC and certain TANC Members with 300 MW of firm, bi -directional transmission capacity on its transmission system between PG&E’s Tesla Substation and the Midway Substation in Buttonwillow, California (the “Tesla - Midway Service”) under a long-term agreement known as the South of Tesla Principles. The City’s share of Tesla-Midway Service is 31 MW. This transmission service enhances the value of the COTP to TANC and the TANC Member -Participants by increasing opportunities for energy purc hases, sales and other utility arrangements. The City has utilized its full allocation of Tesla-Midway transmission service for firm and non-firm power transactions.
M-S-R PPA Purchased Power –Big Horn I Wind Energy Project . The City, along with the Modesto Irrigation District (“Modesto”) and the City of Santa Clara (“Santa Clara”), is a member of a California joint powers agency known as the M -S-R Public Power Agency (referred to herein as M -S-R PPA). In 2005, M-S-R PPA entered into a series of power purchase agreements with Avangrid Renewables, Inc. (originally PPM Energy, Inc. and formerly Iberdrola Renewables, Inc.) (“Avangrid”), certain of which agreements have been assigned to Avangrid’s subsidiary, Big Horn I, LLC, for the purchase of energy from the B ig Horn I wind energy project (the “Big Horn I Project”) located near the town of Bickleton, in Klickitat County, Washington. The 199.5 MW project consists of 133 1.5 MW GE wind turbines. The City participates in the purchase of a 35% share of the output from the Big Horn I Project through M-S-R PPA.
The City’s share equates to approximately a 70 MW share of the project output. The cost for the City’s 70 MW output share equates to a cost roughly comparable to combined cycle gas–fired generation. Power deliveries commenced on October 1, 2006, and will continue through September 30, 2026. Through an amendment of the original agreements M -S-R PPA has an obligation to continue to take the same output through September 30, 2031, or if the Big Horn I Project is repowered, M-S-R PPA will have a right of first Packet Pg. 278
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offer to negotiate a long-term power purchase for such repowered project. The project interconnects with the high voltage transmission grid through an 11 -mile transmission line at the Spring Creek Substation of Bonneville Power Administration (“BPA”). Through the shaping and firming agreement between M -S-R PPA and Avangrid, Avangrid receives Big Horn I Wind energy, as generated, and delivers such energy to M-S-R PPA at the California-Oregon border pursuant to firm pre-established delivery schedules. The City uses a portion of its COTP transfer capability to provide for transmission of the output from the Big Horn I Project from the California-Oregon border to the City.
The Big Horn I Project is operated within the Avangrid balancing authority (which began operating in mid-2018) and delivered through the BPA balancing authority area. On October 1, 2009, BPA began imposing a wind integration charge for the purpose of recovering its costs to provide within-hour generation balancing services for wind generators. Pursuant to a series of amendments of the power purchase agreements between M-S-R PPA and Avangrid effective September 18, 2019, M-S-R PPA agreed to pay to Avangrid, following the effective date of operation of the Avangrid balancing authority on July 31, 2018, in lieu of responsibility for payment of any wind integration charges to BPA, a wind integration charge of $1.10/kW month through December 31, 2018 and $1.01/kW month thereafter. Through a collaborative effort between Avangrid and M-S-R PPA, the Big Horn I Project has obtained California RPS certification as an “Eligible” renewable resource by the CEC. The Big Horn I Project has been registered with the WREGIS by Avangrid with BPA acting as the Qualified Reporting Entity. The RECs are transferred from Avangrid, the originator, to M-S-R PPA and finally to the members of M-S-R PPA, for either retirement or wholesale sales by such members.
BPA establishes rates to be charged for power and transmission services in biennial formal evidentiary hearing processes. Changes in BPA rates indirectly affect the Big Horn I Project costs through formulaic adjustments to prices paid to Avangrid.
M-S-R PPA–San Juan Retained Obligations. The City’s resources acquired through M-S-R PPA previously included an entitlement to a portion of the output of M -S-R PPA’s prior ownership interest in Unit No. 4 of the San Juan Generating Station (hereinafter, the “M-S-R PPA San Juan Unit No. 4 Interest”), a coal-fired steam electric generating unit located in San Juan County, New Mexico, which was constructed and operated by the Public Service Company of New Mexico (“PNM”). M -S-R PPA divested its M -S-R PPA San Juan Unit No. 4 Interest on December 31, 2017, although it retains certain liabi lities for a share of the costs of environmental remediation obligations and plant decommissioning and mine reclamation, as described below. The final operating unit of the San Juan Project, Unit No. 4, permanently ceased operations on September 29, 2022.
M-S-R PPA purchased its 28.8% (approximately 146 MW) M -S-R PPA San Juan Unit No. 4 Interest on December 31, 1983 and began dispatching power from such interest in May 1995. M-S-R PPA financed the acquisition of its M -S-R PPA San Juan Unit No. 4 Interest, a nd certain costs of related transmission arrangements, through the issuance of its San Juan Project revenue bonds, all of which were retired as of July 1, 2022. The City purchased from M-S-R PPA, on a take-or-pay basis, a 15% entitlement share in the M -S-R PPA San Juan Unit No. 4 Interest pursuant to a power sales agreement (the “M -S-R PPA Agreement”), among M-S-R PPA and its members.
The divestiture of M-S-R PPA’s interests in San Juan Unit No. 4 (referenced above) was completed pursuant to a number of ag reements (the “San Juan Restructuring Agreements”) between and among the prior San Juan Generation Station owners (the “San Juan Participants”), which provided for the interests of M-S-R PPA and certain other San Juan Participants (the “Divested San Juan Participants”) in the San Juan Generation Station to be transferred to the remaining San Juan Participants effective December 31, 2017.
In addition to the ownership divesture, the San Juan Restructuring Agreements provide for, among other things, the allocation of ongoing responsibility for decommissioning costs, mine reclamation costs and any environmental remediation obligations among the Divested San Juan Participants and the remaining San Packet Pg. 279
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Juan Participants, and the establishment and funding of mine reclamation and plant decommissioning trust funds.
Pursuant to the San Juan Restructuring Agreements, M-S-R PPA and the other Divested San Juan Participants retain certain liabilities for a share of the costs of San Juan Generation Station decommissioning and pre-exit date mine reclamation costs. Under the San Juan Restructuring Agreements, M-S-R PPA was required to maintain a balance of approximately $12.1 million in the mine reclamation trust funds as of December 31, 2023 to fund its currently expected share of ongoing and final reclamation costs, which requirement was met by a year -end balance at such date of approximately $12.2 million. As of December 31, 2023, M -S-R PPA’s liability for mine reclamation costs is recorded pursuant to Governmental Accounting S tandards Board (“GASB”) Statement No. 83, Certain Asset Retirement Obligations (“GASB 83”) requirements as approximately $14.6 million. In addition, under the San Juan Restructuring Agreements, M-S-R PPA was required to maintain a balance of approximately $2.3 million in the decommissioning trust fund as of December 31, 2023 to fund its currently expected share of the initial work for known asset removal and remediation activities in connection with demolition of the San Juan Generation Station, which requirement was met by a year-end balance at such date of approximately $2.6 million. As of December 31, 2023, M-S-R PPA’s liability for plant demolition costs is recorded pursuant to GASB 83 requirements as approximately $3.3 million. However, M-S-R PPA’s final total proportionate share of San Juan Generation Station decommissioning and mine reclamation costs cannot yet be determined and will depend on a number of factors, including, among other things, actual costs for the demolition work. Additional deposits to the trust funds may be required in the future if trust earnings are below expectations or if determined necessary by future decommissioning and reclamation costs study updates.
Pursuant to the M-S-R PPA Agreement, the City is unconditionally obligated thereunder to pay its entitlement share (15%) of all of M-S-R PPA’s costs associated with the M-S-R PPA San Juan Unit No. 4 Interest, including any remaining liabilities for environmental remediation obligations, decommissioning and mine reclamation of the plant associated with the M-S-R PPA San Juan Unit No. 4 Interest. The City’s payments to M-S-R PPA under the M-S-R PPA Agreement constitute Maintenance and Operation Costs of the City’s Electric System. The City’s obligations to make payments under the M-S-R PPA Agreement are not dependent upon the continued ownership or operation of the San Juan Unit No. 4 and are not subject to reduction. Pursuant to the M-S-R PPA Agreement, upon failure of any M -S-R PPA member to make any payment thereunder which failure constitutes a default under the M-S-R PPA Agreement, the participation percentage of each non -defaulting member automatically will be increased for the remaining term of the M-S-R PPA Agreement in proportion to its participation percentage; provided, how ever, that the sum of such increase for any non-defaulting member shall not exceed 25% of its original participation percentage.
In light of the divesture of its active ownership interest in San Juan Unit No. 4, the majority of M-S-R PPA activities are cu rrently related to renewables (including the Big Horn I Project described above). Coordinating, regulatory, and compliance services costs of M -S-R PPA are shared among the M-S-R PPA members as follows: the City – 20%; Modesto – 40%; and Santa Clara – 40%. Renewable administrative services, electric product, delivery and environmental attribute rights, benefits and costs are shared in accordance with contracted participation ratios described above.
NCPA. The City is a member of the Northern California Power Agency (“NCPA”). NCPA owns certain electric generating projects. The City is not currently a participant in any of the NCPA projects. As a member of NCPA, the City participates in NCPA’s state and federal legislative and regulatory matters.
Purchased Power
Western. The City receives a significant portion of its supply of power from the Central Valley Project (the “CVP”) pursuant to a contract with Western. The CVP, for which Western serves as marketing Packet Pg. 280
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agency, is a series of federal hydroelectric facilities in Northern California operated by the U.S. Bureau of Reclamation. Delivery of purchased power from Western is made by Western over the CVP transmission system at the City’s two interconnection points with Western: (1) the Keswick Dam Switchyard, a Western facility located approximately 0.5 miles from the City, and(2) the City’s Airport Substation, which is jointly owned by Western and the City, and located in the southeastern part of the City. The rates and terms of this service is in accordance with Wes tern’s then-current rate schedule and Open Access Transmission Tariff (“OATT”). Power is transmitted to the City’s distribution substations over the City’s 115 kV transmission lines.
The City previously purchased low-cost hydroelectricity from the CVP under a 20-year agreement with Western which began on January 1, 2005 and continued through 2024 (and which agreement replaced a prior agreement which expired December 31, 2004). Under such agreement, the City initially received a
7.7% “slice of the system” base resource allocation from Western. As of January 1, 2015, Western revised its allocation percentages, and the City’s allocation increased to 8.159% for the then remaining term. The power marketed by Western to the City is provided on a take-or-pay basis wherein Western’s annual costs are allocated to all CVP preference customers based on their CVP participation percentage. Western then allocates the annual take-or-pay charges to the CVP preference customers based on a monthly percentage that is designed t o reflect the anticipated seasonal energy deliveries. The City is obligated to pay its preference customer share of the costs associated with operating the CVP facilities.
In January 2021, the City executed a 30-year agreement with Western for the continued purchase of hydroelectricity from the CVP, the term of which agreement began on January 1, 2025 and will continue through December 31, 2054 (unless earlier terminated). The agreement is similar to the City’s prior contract with Western, but the City’s base resource allocation decreased to 7.99604% beginning in 2025. In addition, in 2040, the allocation of CVP to Western customers (including the City) will be reduced by 1% to allow for new Western customers. Under the new agreement, the City may reduce its CVP quantity or terminate the agreement when a new rate schedule is adopted or extended (which will occur at least every five years).
The City’s contract with Western includes power from numerous hydroelectric plants around the Sierra Nevada region, some of which qualify as a California RPS “Eligible” renewable resource. The City participates in Western’s Sierra Nevada region program (the “small hydro program”) to receive the RECs from the qualifying hydroelectric projects. RECs from these qualifying hydroelectric facilities (under 30 MW) account for approximately 3.0% of the City’s base resource allocation from Western.
The table below shows the deliveries and wholesale power rates c harged by Western for Fiscal Years 2020-21 through 2023-24 and the projected deliveries and power rates to be charged by Western for Fiscal Year 2024-25. Energy made available for delivery to the City under its agreement with Western is subject to the annu al hydrology of the CVP , and can vary significantly from year to year. Deliveries in Fiscal Years 2021 -22 through 2022 -23 reflect the then ongoing drought conditions in California. For planning purposes, Western provides estimates of projected deliveries based upon Western’s assessment of current and expected hydrologic conditions. The projected deliveries for Fiscal Year 2024 -25 are based upon amounts received to April 2024 and Western’s estimates as of April 2024, and will be subject to hydrologic conditions for the remainder of the Fiscal Year.
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Western Area Power Administration
Wholesale Power Rates and Deliveries
(Historical and Projected – Fiscal Years 2020-21 through 2024-25) Fiscal Year
Energy
(GWh)
Price
$/MWh
2020-21 178,909 $33.02
2021-22 122,059 47.10
2022-23 128,052 40.09
2023-24 285,228 14.44
2024-25(1) 232,022 18.21
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(1) Projected Fiscal Year 2024 -25 power rates and deliveries based on actual amounts to April 2024 and Western’s estimates as of April 2024.
Source: City of Redding.
Hydrology in California can be highly variable from year to year. In an average water year, approximately 30% of the City’s power supply resources are derived from hydroelectric sources, including both the Whiskeytown Project and power p urchased from Western. In the event of reduced hydroelectric generation, it is necessary for the City to generate additional energy or to purchase additional energy on the wholesale market to meet its retail sales and load obligations, both of which incur additional costs.
Renewable Resources
Current Energy Mix . The City has a diversified renewable portfolio that includes wind power purchase agreements and hydroelectric resources. As described above, these currently include the City’s purchase through M-S-R PPA of a portion of the output of the Big Horn I Project (wind energy), as well as the City’s participation in Western’s small hydro program. The City also owns and operates its small hydroelectric generating plant at the base of Whiskeytown Dam. Additio nally, the City has also entered into a long -term and short -term renewable energy power purchase agreements to purchase eligible renewable energy from various generators in various quantities.
The table below set forth the City’s estimated mix of power res ources used to generate the electricity sold to customers for calendar year 2023.
CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
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GENERATION MIX PERCENTAGES
(2023)(1)
Energy Resource Type
Redding
Power Mix
Percentage(1)
Eligible Renewable(2) 27.6%
Biomass and Biowaste 0.0
Geothermal 0.0
Eligible Hydroelectric 4.3
Solar 0.0
Wind 23.2
Coal 0.0
Large Hydroelectric 26.5
Natural Gas 45.5
Nuclear 0.3
Other 0.0
Unspecified Sources of Power(3) 0.1
Total 100.0%
(1) Based on the City’s calendar year 2023 (most recent) Annual Power Content label submission to the CEC. (2) The eligible renewable percentage in table above does not reflect RPS compliance, which is determined using a different methodology.
(3) Unspecified power is electricity that has been purchased through open market transactions and is not traceable to a specific generation source.
Source: City of Redding.
City Renewable Portfolio Standard. Over the last two decades, the City has taken numerous steps towards satisfying the RPS targets set forth in State legislation, and has pursued cost -effective contracts and ownership opportunities for renewable resources. In response to the adoption of California Senate Bill 1078 in 2002, the City first formally adopted a Renewables Portfolio Standard (RPS) in 2003 which stated that the City would meet or exceed a standard of 20% of the City’s annual energy needs to be provided by state qualified renewable resources by 2017. Following the development b y the California Air Resources Board (“CARB”) of a Renewable Energy Standard, the City updated its RPS policy in 2011 to include a 33% by 2020 goal. In accordance with the California Renewable Energy Resources Act, enacted in 2011 as SBX1-2 (“SBX1-2”), the City was required to develop and implement a renewable energy resources plan which provided that a specified average of the Electric System’s retail sales must be procured from eligible renewable energy resources during specified compliance periods through 2020. The City was “deemed in compliance” with the RPS procurement requirements for Compliance Period 1 (2011 -2013) by the CEC, satisfying its RPS obligation with an optional compliance measure. The City satisfied the RPS target for Compliance Period 2 (from 2014 through 2016), meeting the compliance requirement of 20% of retail sales in 2014 and 2015, and 25% of retail sales in 2016. The City also satisfied the RPS target for Compliance Period 3 (from 2017 through 2020), meeting the compliance requiremen t of 27% of retail sales in 2017, 29% of retail sales in 2018, 31% of retail sales in 2019, and 33% of retail sales in 2020), through the use of banked RECs from prior excess procurement. California Senate Bill 350 (“SB 350”) requires that the target amount of electricity generated each year from eligible renewable energy resources be increased to at least 50% of total retail sales by December 31, 2030. California Senate Bill 100 (“SB 100”) accelerates the State’s RPS target as established by SB 350 from 50% by 2030 to 60% by 2030 and sets interim compliance targets to achieve such goal. The City intends to exercise optional compliance measures in satisfaction of the interim target under SB 100 of 44% of retail sales to be made from eligible renewable energy resources by December 31, 2024. In addition, the City is preparing to meet the accelerated eligible renewable energy compliance requirement of 60% of retail sales by December 31, 2030 in accordance with SB 100. The City Packet Pg. 283
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has registered with WREGIS to track, transfer, retire and sell RECs. The City’s RPS compliance obligation is increasing due to rising customer demand primarily driven by electrification adoption. The City intends to meet the RPS compliance targets, but plans to utilize eligible optional compliance measures in the event it falls short of the revised RPS requirements. See “CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY – State Legislation and Regulatory Proceedings – California Renewables Portfolio Standard.”
Distributed Energy–Solar Programs. In 2007, the City adopted a solar initiative program designed to meet Senate Bill 1 (“SB 1”) requirements for the promotion of solar photovoltaic projects through rebates and incentives. Over the last several years, over 2,200 solar photovoltaic (“PV”) projects with a capacity of over 21 MW have been installed within the City. The projects range from 1 kW to 700 kW and are located on City-owned and customer -owned facilities throughout the City. The City offered significant rebates through September 30, 2010. The City Council approved a 700 kW project at the municipal airport in December 2010 which, combined with several other scalable sized projects, effectively exhausted funds available to incentivize solar photovoltaic projects with rebates through July 2014. In August 2014, the City reopened the rebate program with $700,000 in funding; those funds were exhausted in less than two business days through 105 applications with a total installed capacity of 1.3 MW. Since that time, the City has continued to see growth in installed PV systems. On September 13, 2016, the City again re-opened the solar rebate program and provided a $0.50/watt rebate, up to maximum of $5,000. After meeting the goals of SB 1, application for the program was closed on October 31, 2017 with approximately $1.1 million in rebates having been provided through December 31, 2017. The City continues to see additional PV system installations in the City, prompted at least in part by the California building code standards requirements for PV installations in various new construction residential and nonresidential buildings.
Energy Efficiency Programs
To operate cost-effectively, the City developed several load-management and energy-conservation programs, including public awareness campa igns, technical conservation assistance, rebates on energy - efficient products and technologies, renewable technologies, and energy -efficient streetlights. In Fiscal Year 2021-22, the City developed its Demand-Side Integrated Resource Plan (DSM-IRP) and determined that decarbonization programs ( i.e., electrification) were more cost -effective than energy -efficiency programs due to their ability to produce downward rate pressure from the increased retail load. The electrification rebate programs, which help reduce carbon emissions by including incentives for switching appliances from natural gas to electric technologies, were launched at the beginning of Fiscal Year 2022 -
23. The City also developed various electrification programs for income -qualified customers , which provide electrification equipment and installation at no cost or point -of-sale vouchers for electric vehicle or e-bike purchases to reduce up-front costs.
Future Power Supply Resources
The City maintains a future power supply plan to ensure that r esources to meet both the capacity and energy needs of the City (including reliability reserves) are planned, developed and tested before their load service duty begins. The City’s interest in the M-S-R PPA power purchase agreements for wind energy from the Big Horn I Project (see “– Power Supply Resources – Joint Powers Agency Resources - Purchased Power, Generation and Transmission – M-S-R PPA Purchased Power–Big Horn I Wind Energy Project ” above), account for nearly 25% of the City’s retail energy needs, and over 75% of its current renewable energy requirements. As part of its future power supply planning, the City is exploring options, such as new solar and storage projects, to replace the Big Horn Wind PPA starting in 2027. As noted above, the City is forecasted to have sufficient renewable resources to meet the minimum renewable energy procurement targets mandated by State law through approximately 2030. See “DEVELOPMENTS IN THE CALIFORNIA ENERGY MARKETS – State Legislation – Renewables Portfolio Standard.” Options for the City to meet increased requirements of any new legislation or requirements beyond 2030 would include:
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renewing current power purchase agreements for renewable energy; acquiring renewable energy through new pow er purchase agreements; acquiring new City -owned renewable projects; and/or purchasing qualifying RECs. These options are regularly assessed by the Electric Utility Department and explored in accordance with best utility practices to have the least impact on rates, reliability and safety. The City will continue to look for cost effective, conventional, and renewable resources that will complement the City’s existing diversified resource portfolio and reliably meet the future electricity needs of the City’s customers, as well as regulatory requirements.
Fuel Supply
Natural gas is the primary fuel and the primary variable operating cost of the Redding Power Plant.
See “– Power Supply Resources – Generating Facilities – Redding Power Plant” above. The Redding Power Plant can require delivery of up to 40,000 million British Thermal Units (“MMBtu”) of natural gas per day, with current average daily requirements of 8,500 MMBtu per day. The City has developed a comprehensive natural gas program to both manage supply and price volatility. This includes the procurement of a supply of natural gas at a discount from the monthly index price pursuant to a gas prepayment arrangement, forward purchases of natural gas at fixed prices, and storage options.
M-S-R Energy Authority – Gas Prepay. The M-S-R PPA members have formed a joint powers authority known as the M-S-R Energy Authority (referred to herein as M-S-R EA). M-S-R EA was created for the purpose of entering into contracts and issuing bonds to assist the M-S-R EA participants in financing the acquisition of supplies of natural gas for use in each participant’s respective electrical generation stations. In 2009, the City participated in the M -S-R EA Gas Prepay Project. The Gas Prepay Project provides the City, through a Gas Supply Agreement with M -S-R EA (the “Gas Supply Agreement”), a reliable, long-term supply of natural gas of 5,000 MMBtu daily (or 1,825,000 MMBtu annually) through September 30, 2039. The Gas Supply Agreement provides this supply at a discounted price below the monthly market index price (the PG&E Citygate index) over the 30 -year term. M-S-R EA entered into a prepaid gas purchase agreement with Citigroup Energy, Inc. (“CEI”) to provide this gas supply, and issued $200.4 million principal amount of its Gas Project Revenue Bonds, Series 2009C (the “M-S-R EA 2009C Gas Bonds”) to finance the prepayment for the City, of which $189.7 million was outstanding as of January 1, 2025. Under the terms of the Gas Supply Agreement, M -S-R EA will bill the City for act ual quantities of natural gas delivered each month on a “take -and-pay” basis. The obligations of CEI are guaranteed by Citigroup Inc., and responsibility for bond repayment is non-recourse to the City. Moreover, any default by the other Gas Prepay Project participants, Modesto and Santa Clara, is also non-recourse to the City.
Fixed Price Forward Purchases. In addition to natural gas procured through the M -S-R EA Gas Prepay Project, the City has entered into a number of fixed price purchase agreements to pu rchase natural gas through Fiscal Year 2027 -28. The following tables provides on a yearly basis, the amount and approximate purchase dollar amount of current fixed price natural gas purchases for which the City is obligated:
Fiscal Year 2024-25 2025-26 2026-27 2027-28
Dth/dy
(Decatherm per day)
8,188
7,479
3,500
1,750
Purchase Cost
($ in million)
$14.5
$14.1
$6.3
$3.5
$/Dth $4.85 $5.15 $4.92 $5.48
Currently, the City’s forecasted gas requirements range from approximately 6,000 to approximately 10,000 Decatherms per day (“Dth/dy”) (a decatherm is equal to one MMBtu) for the next 10 yrs. The City Packet Pg. 285
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employs a laddered hedging strategy with specified minimums when considering additional gas purchases; specifically, the smaller of the vol ume needed to hedge index priced gas or the forward generation requirement as then modeled to meet forecasted load.
In connection with the City’s gas hedging activities, the City may be required to post collateral to various counterparties based upon contr act mark-to-market values and credit exposure limits under such contracts. During the last five years, the City has not been required to post collateral at any time. While the posting of collateral is not an expense to the City, it can encumber unrestricted cash balances when required.
Storage. To further manage seasonal, weather, and price volatility, the City has, since 2004, contracted for natural gas storage within California. In 2010, under a 28-year term contract with Gill Ranch Storage, the City commenced utilizing storage rights in Gill Ranch, a gas storage facility located in central California. Under the agreement, the City has leased cushion gas valued at $13.57 million to Gill Ranch Storage and Gill Ranch Storage provides the City with approximat ely 600,000 Dth of natural gas storage.
At the end of the contract term in 2038, the cushion gas will be returned to the City, unless the lessee executes the option to purchase the gas. If the option is exercised, the purchase price will be equal to the original cost of the gas escalated at a rate of 1.08% per annum.
Interconnections, Transmission and Distribution
The City is a member of the Balancing Authority of Northern California ( referred to herein as BANC). In January 2005, the City became part of the Sacramento Municipal Utility District (“SMUD”) balancing authority area. In May 2009, SMUD, the City, Modesto and Roseville executed a joint exercise of powers agreement creating BANC to consolidate balancing authority activities. The transition to operation of BANC occurred on May 1, 2011, at which time the operations of the SMUD balancing authority were turned over to BANC. Since that time, the Trinity Public Utilities District and the City of Shasta Lake have also become members of BANC. SMUD acts as th e balancing authority operator under contract and performs balancing authority functions on behalf of BANC. As provided in the BANC member agreement, liability for penalties associated with balancing authority -related Reliability Standards are shared on a pro rata basis among the members of BANC. The BANC joint exercise of powers agreement assigns cost responsibility for BANC operations based on member load within the BANC balancing authority. The City’s cost responsibility share for BANC operations based upon BANC’s budget for 2025 is approximately 4.9%.
On April 3, 2019, SMUD, the largest BANC member, began its participation in the CAISO Energy Imbalance Market (“EIM”), a real -time wholesale power trading market that operates in parts of eight western states, including Washington, Oregon, California, Nevada, Idaho, Wyoming, Utah, and Arizona.
In addition to modest economic benefits, participation in the EIM is expected to enhance BANC members’ ability to integrate renewable energy, provide additional sources of real-time supply to augment reliability resources, increase regional resource diversity, and maintain access to a robust pool of resources and counterparties. The remaining BANC members, including the City, began participating in the EIM in March 2021.
Western’s Sierra Nevada region operates as a sub -balancing authority area within BANC’s balancing authority area. Western provides access to the City to Western’s high voltage transmission facilities via an interconnection with the City’s distribution s ystem. Under a transmission service contract with Western, power needed to meet the City’s system loads that are not met by generation assets within its service area can be imported using Western transmission service. The City’s transmission service contract with Western, executed in August 1995, is effective for 40 years, subject to a termination right of either party upon five years’ notice. Under the transmission service contract, Western agrees to provide on a firm basis, both long-term transmission service and short-term COTP transmission service to the City.
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As discussed herein, the City has firm transmission rights on the COTP. Through its participation in TANC, the City has firm transmission rights to approximately 14 8 MW of the COTP. The City gains access to its COTP participation rights though its transmission service contract with Western. See “– Power Supply Resources – Joint Powers Agency Resources – Purchased Power, Generation and Transmission – TANC California-Oregon Transmission Project” above.
Delivery of all power from sources outside of the City is made to the City at the Keswick Switchyard and the Airport 230/115 kV Substation. These two facilities provide the City with a reliable interconnection capacity of 275 MW from Western’s 230 kV tr ansmission system. The City owns and operates a 115/13.8 kV generation step -up substation at the Redding Power Plant. The City also jointly owns the Airport Substation with Western. The City owns and operates 72 miles of 115 kV transmission system lines wh ich deliver energy to 11 existing distribution substations that step the voltage down to 12 kV. The City also owns and operates 762 miles of 12 kV distribution system lines. The City’s system typically experiences approximately 38 minutes of outage time pe r customer per year (excluding major storm events).
Wholesale Energy Trading
As previously noted, the City plans for its future conventional and renewable power supplies . In addition to making market purchases when cost-effective, the City sells excess capacity and energy that is surplus to its needs. The City operates and manages its power supply and transmission resources using an “economic dispatch” model that is designed to produce energy at the lowest cost to reliably serve consumers, recognizing any operational limits of generation and transmission facilities. Under this model, the City participates in trading in the wholesale energy markets in order to capture the maximum value of its generation assets and to minimize the cost of purchased power. Additionally, the City optimizes its gas purchases and sales within the year to coordinate with wholesale energy costs. In the three Fiscal Years ended June 30, 2022 through June 30, 2024, gross revenue associated with these trading activities has averaged $35.032 million Net revenue is significantly less but is not independently determinable as it is reflected in the overall cost to serve retail load. For financial forecasting and planning purposes, the City only assumes revenues from wholesale trading activities that are under contract at the time of the forecast.
The City expects to continue optimizing its generation and transmission assets using the wholesale market for the benefit of its retail electric customers and anticipates that wholesa le trades will continue at some level in the future.
Risk Management Program
In support of its wholesale market transactions, the Electric Department has maintained a formal risk committee since September 17, 2001. A newly re -chartered Energy Risk Managem ent Committee (“ERC”) was established on March 14, 2017. Energy Risk policies were revised in February 2024. The ERC meets periodically to implement risk policies, review wholesale market activities, and establish counterparty credit, among other activities.
As of the date of this Official Statement, the City has never experienced a loss as a result of credit quality or transaction performance defaults.
Cybersecurity Measures
The City has a computer usage and management of electronic records policy and has adopted a risk-based cybersecurity strategy. The Electric Utility Department has computer security procedures, and security practices documents. The Electric Utility Department launched a comprehensive upgrade to the cybersecurity program in 2021 that is compliant with the North American Electric Reliability Corporation (“NERC”) Critical Infrastructure Protection (“CIP”) Standards. NERC’s CIP Standards protect the critical Packet Pg. 287
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infrastructure of the North American electric grid by establishing mandatory cyberse curity regulations designed to safeguard the Bulk Electric System from cyber threats, ensuring the reliable operation of the power grid by mitigating risks posed by cyberattacks on critical assets like power generation and transmission systems. These Relia bility Standards were developed by NERC and approved by FERC pursuant to the Energy Policy Act of 2005 (“EPAct 2005”). See “CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY – Federal Energy and Environmental Policies and Legislation – Energy Policy Act of 2005.” See also “CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY – Federal Policy on Cybersecurity” and “– Cybersecurity Risks.” Wildfire Mitigation Measures
Approximately 50% of the territory of the City’s Electric System service area is in a geographical area classified by the CPUC’s Fire Threat Map as a “Tier 2” or “Tier 3” fire -threat area (i.e., an area of elevated or extreme risk from utility-associated wildfires), including 18,000 acres adjacent to Electric System equipment and facilities and 120 miles of overhead power lines. In connection with the operation of its facilities and equipment, the City currently has in place or is implementing a number of wildfire prevention strategies and programs. These programs and measures include ongoing vegetation management activities, annual inspection of overhead electric utility equipment, enhanced situational awareness though use of surveillance and communications technology, and the ability to eliminate the automatic restoration function on certain transmission lines to require that power to a tripped line is only restored after manual inspection and confirmation that it may be operated safely under established conditions. The City also has established protocols and procedures for operations for emergency preparedness and response. Pursuant to the requirements of SB 901, the City Council approved the City’s Wildfire Mitigation Plan on December 3, 2019. The City’s W ildfire Mitigation Plan (accompanied by an Independent Evaluator Report) was submitted to the Wildfire Advisory Board. The plan is updated annually, most recently in May 2024, consistent with statutory requirements, and with consideration of the recommendations of the Wildfire Advisory Board regarding its prior plans. See also “CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY – State Legislation and Regulatory Proceedings – Legislation Relating to Wildfires; Related Risks” and “– Insurance” below.
In addition, the City has adopted a Community Wildfire Protection Plan, which was developed with an external consultant , and with collaboration from the Redding Fire Department, the Electric Utility Department, and other agencies. The Community Wildfire Protection Plan was prepared as a tool to assess the City’s wildfire risks, community preparedness and defensibility, and to identify and provide potential wildfire hazard mitigation projects for the City. The City’s Community Wildfire Protection Plan was accepted by the City Council in January 2025.
Insurance
The insurable property and facilities of the Electric System are covered under the City’s general insurance program. The City’s insurance program currently consists of a combination of commercial insurance policies and self-insurance. Property insurance is administered as a co-insurance plan. The City is self-insured for claims up to $250,000 for all risk and up to $500,000 for wildfires. Additionally, the City has acquired coverages for Redding Power Plant up to $100 million, with various sub-limits and deductibles for different types of losses. The City does not insure its physical assets against the risk of physical loss or damage due to earthquakes. Effective January 1, 2025, the City has also secured c ertain cybersecurity insurance coverage to protect the Redding Power Plant assets.
The City is self-insured for general and liability claims up to $750,000. Any claims from $750,001 to $40.0 million are administered through a governmental pooling joint pow ers authority, the California Joint Powers Risk Management Authority. In addition, the City is self-insured up to $750,000 per claim for Packet Pg. 288
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workers’ compensation claims, with an insurance company co -insuring claims from $750,001 to $50.0 million.
The City records liabilities for unpaid claims when they are probable of occurrence and the amount can be reasonably estimated. Funds determined to be at risk are charged a percentage of the total estimated insurance and claim expense. The City periodically evaluates its insurance program and may modify the current configuration of commercial insurance and self-insurance with respect to the City and the Electric System. Limits maintained by the City are subject to change depending on insurance market conditions and assessments by the City as to risk exposure.
Rates and Charges
The City Council is authorized by the Redding Municipal Code to establish electrical utility rates for all electric utility subscribers. Rate changes are not subject to regulatory agency review. The City has maintained rates sufficient, together with other available funds, to pay for (a) operations and maintenance of the system; (b) additions and betterments to the system; (c) amortization of all depreciation and obsolescence within the system; (d) all debt service liability incurred in the construction or extension of the system; and (e) establishment and maintenance of a reserve fund to provide for extensions and betterments of the system and unforeseen contingencies. See also “– Cash Reserves.” In December 2023, the City Council approved a change in electric rates (4.0% rate increases per year) effective with the January 2024 and January 2025 billing cycles, and an increase in the benefit of the residential energy discount for income -qualified households. The general rate increases of 4.0% per year are consistent with the anticipated rate increases contemplated in the City’s approved biennial budget for Fiscal Years 2023 -24 and 2024 -25, and the Electric System’s five -year financial plan presented in connection with such budget.
The following table presents a history of electric rate increases for the last five years.
CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
RATE INCREASES
Date Percent Change
January 1, 2025 4.00%
January 1, 2024 4.00
January 1, 2023 2.00
January 1, 2022 2.00
__________________
Source: City of Redding.
The City’s current primary rate schedules for residential, commercial and industrial customers of the Electric System are set forth below.
CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
PRIMARY RATE SCHEDULES FOR RESIDENTIAL, COMMERCIAL
AND INDUSTRIAL CUSTOMERS
(As of January 1, 2025)
Type and Description of Service
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General Residential Service (Basic):
Fixed Charge, per meter, per month $ 40.00
Energy Charge (to be added to Network Access Charge):
Per kWh for all kWh in billing period 0.1492
Multi-Family Residential Service (Basic):
Fixed Charge, per meter, per month $ 38.00
Energy Charge (to be added to Network Access Charge):
Per kWh for all kWh in billing period 0.1492
General Service Small Commercial Customers:
Fixed Charge, per meter, per month $ 70.00
Energy Charge (to be added to Network Access Charge):
Per kWh for all kWh in billing period 0.1649
General Service Large Commercial and Industrial Customers:
Fixed Charge, per meter, per month $ 95.00
Energy Charge (to be added to Network Access Charge):
Per kWh for all kWh in billing period 0.1086
Demand Charge, per kW $ 21.50
__________________
Source: City of Redding.
The table below sets forth the average billing price per kWh for the various customer classes during the Fiscal Year 2023-24.
CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
AVERAGE BILLING PRICE (CENTS) PER KILOWATT-HOUR
(RETAIL SALES)
(For Fiscal Year 2023-24)
Residential .............................................. $0.1747 Commercial ............................................ 0.1744 Industrial ................................................. 0.1988 Other ....................................................... 0.1850 System Averages .................................... 0.1757 __________________
Source: City of Redding.
Comparison of Selected Monthly Residential Electric Bills The City’s residential rates for average usage continue to be below PG&E’s rates (for other than baseline (subsidized) residential service). The following table shows a comparison of selected monthly residential electric bills for regional utilities as of October 2024.
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COMPARISON OF SELECTED MONTHLY
RESIDENTIAL ELECTRIC BILLS
(As of October 2024)
850 kWh 1,500 kWh
Average Monthly Average Monthly
PG&E $363.17 $680.82
Modesto Irrigation District 186.40 318.96
SMUD 186.33 310.35
City of Palo Alto 179.68 231.82
Redding 158.98 255.70
Silicon Valley Power 137.96 244.78
Turlock Irrigation District 111.48 201.54
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Notes:
Excludes state surcharge and taxes, if any.
Differences in time-of-use periods and rate adjustments make exact comparisons difficult.
Source: City of Redding.
Major Customers
Based upon energy usage for the Fiscal Year ended June 30, 2024 , the ten largest electric utility accounts (including state and federal government accounts) of the City represent approximately 13.9% of total kWh sales and approximately 12.5% of total revenues. The largest account, the City’s other departments and activities, consumed approximately 4.1% of the electric utility ’s total kWh sales and contributed approximately 3.9% of total revenues, and the smallest of the ten largest accounts consumed approximately 0.6% of total kWh sales and contributed approximately 0.5% of revenues.
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CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
TEN LARGEST CUSTOMERS(1)
(Fiscal Year 2023-24)
Customer
Total kWh
Usage
% of Total
System
Usage
Total
Electric
Charge
% of Total
System
Revenue
City of Redding 29,827,306 4.06% $ 5,147,591 3.93%
State of California 13,241,983 1.80 2,094,094 1.60
Mercy Healthcare Center 12,574,595 1.71 1,813,291 1.39
Shasta County 7,972,576 1.09 1,429,182 1.09
Prime Health Care Shasta LLC 9,719,598 1.32 1,421,535 1.09 Mt. Lakes Manufacturing LLC 7,584,000 1.03 1,231,425 0.94 Redding Rancheria Utility Corp 7,589,416 1.03 1,101,500 0.84 AT&T Services Inc. 5,143,984 0.70 818,543 0.63
Saraf, Simmon 4,481,600 0.61 721,809 0.55
Costco Utility Bills 4,249,960 0.58 624,533 0.48
102,385,018 13.9% $16,403,502 12.5%
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Source: City of Redding.
Customers, Sales, Revenues and Demand
The average number of customers, kWh sales, revenues derived from sales, by classification of service, and peak demand during the past five Fiscal Years, are listed below. Combined customer electric requirements created the City’s historic distribution system peak demand of 253.0 MW on July 24, 2006.
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CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
CUSTOMERS, SALES, REVENUES AND DEMAND
(Fiscal Years Ended June 30)
2020 2021 2022 2023 2024
Number of Customers(1):
Residential ...................... 38,320 38,587 38,572 38,706 39,019 Commercial ..................... 4,972 4,975 5,088 5,092 5,101 Industrial ......................... 338 353 351 336 326 Other ............................... 936 966 970 974 967 Total Customers ........... 44,566 44,881 44,981 45,108 45,413 Kilowatt-Hour Sales:
Residential ...................... 358,509,525 393,403,666 375,817,815 394,986,058 372,342,493 Commercial ..................... 298,241,578 302,067,356 300,596,737 308,605,996 305,667,285 Industrial ......................... 12,349,327 11,552,342 12,155,405 12,152,344 12,127,995 Other ............................... 41,639,506 50,105,459 49,924,125 46,678,248 46,467,017 Total kWh .................... 710,739,936 757,128,823 738,494,082 762,422,646 736,604,790 Revenues from Sale of
Energy:
Residential ...................... $ 50,015,075 $ 64,644,393 $ 61,245,910 $ 66,247,872 $ 65,060,311 Commercial ..................... 47,225,005 48,851,836 49,535,399 52,376,793 53,321,173 Industrial ......................... 2,182,133 2,168,208 2,273,909 2,366,791 2,411,381 Other ............................... 6,630,690 8,085,886 8,200,232 8,029,169 8,598,261 Total Revenues from
Sale of Energy(2)(3): .. $106,052,903 $123,750,323 $121,255,450 $129,020,625 $129,391,126 Peak Demand (kW) ............ 224,200 225,400 233,900 239,100 234,200 __________________
(1) The Number of Customers values includes every point at which electricity is used as of the last month of the Fiscal Year.
(2) Fiscal Year 2019-20 revenues levels reflect an $11.2 million distribution of cap-and-trade revenues to customers to offset the financial impacts of COVID -19. The distribution, reflected as credits for NAICS reporting, is unique to Fiscal Year 2019-20.
(3) Differs from Retail Revenue as shown in the table entitled “Summary of Financial Operating Results” due to timing differences in meter readings, accruals and billings in the application of data for billing system and accounting system data.
Source: City of Redding, Utility Billing System Detailed Marketing Report of Quarterly NAICS Usage.
All electric bills are due and payable upon receipt of billing and become delinquent 20 days thereafter. If such bills remain unpaid on the 42nd day after billing, all electric services are subject to termination until all fees, charges, penalties and the entire delinquent balance have been paid. Delinquent fees and charges may be made a lien against the property, placed on the tax roll of Shasta County and collected in the same manner as ad valorem taxes.
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The City considers its write -offs for uncollectible accounts to be low by electric utility industry standards for urban areas. The write -offs for uncollectible accounts for the past five Fiscal Years are presented in the following table:
CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
UNCOLLECTIBLE REVENUES
As of
June 30
Uncollectible
Revenues
Percent of
Gross Billings
2020 $162,480 0.14%
2021 230,576 0.18
2022 1,947(1) < 0.01(1)
2023 289,651 0.22
2024 178,072 0.13
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(1) The lower uncollectible revenues in Fiscal Year 202 2 reflects the recovery by the City for past due accounts under the 2021 California Arrearage Payment Program (CAPP) which provided financial assistance for California energy utility customers to help reduce past due energy bill balances that were incurred during the COVID-19 pandemic.
Source: City of Redding.
Transfers to the General Fund
Commencing with Fiscal Year 1988-89, it has been the practice of the Electric System to make a monthly payment in -lieu of taxes (“PILOT”) to the City’s general fund, in addition to paying its proportionate share of the City’s operating expenses attributable to the Electric System. The City’s payment in-lieu of taxes represents 1% of installed assets with selected depreciation. For the Electric System, this formula includes the system’s share of joint powers agency installed assets, and currently results in an in - lieu payment of approximately 5.8% of budgeted retail revenues.
The following table sets out the transfers from the electric utility to the City’s general fund for the five Fiscal Years 2019-20 through 2023-24 and the budgeted transfer for Fiscal Year 2024-25.
CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
TRANSFERS TO THE GENERAL FUND
Fiscal Year Transfer Amount
2019-20 $5,323,500
2020-21 6,097,590
2021-22 5,464,000
2022-23 6,246,800
2023-24 7,270,600
2024-25(1) 6,614,200
__________________
(1) Fiscal Year 2024-25 Budgeted amount.
Source: City of Redding.
Litigation challenging the PILOT was filed against the City in 2011. On August 27, 2018, the California Supreme Court rendered a decision upholding the City’s PILOT. See “CONSTITUTIONAL LIMITATIONS IN CALIFORNIA ON TAXES AND FEES.”
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Capital Requirements
The City expects capital requirements for general Electric System improvements to average approximately $8.7 million per year for the next five Fiscal Years. The planned improvements primarily consist of ongoing routine capital projects for the Electric System, including transmission and distribution system improvements, such as construction of distribution lines, property acquisition, transformers, poles, conductors, metering equipment, and other miscellaneous routine capital facilities. In addition to the ongoing routine capital requirements, the City’s capital plan for the next five years includes the expenditure of approximately $7.0-8.0 million per year for special projects, including substation construction, and the funding of scheduled generation facility improvements and enhancements. Other than the amounts to be financed with proceeds of the 2025A Bonds (as described under “PLAN OF FINANCE”), it is currently expected that these capital requirements will be funded primarily from Electric System Revenues.
Employees
Labor Relations. As of June 30, 2024, the Electric Utility Department had 202 authorized full-time equivalent (“FTE”) staff positions, including 174 FTEs for the Electricity Services Divisions, 18 FTEs for the Customer Service Division and 10 FTEs for the Field Service (meter reading) Division.
Distribution, Field Services, and Generation employees (made up of three bargaining units:
Electric, Maintenance and Power Production) are represented by the International Brotherhood of Electric Workers (“IBEW”) under labor contracts (“MOUs”) which expire as follows: (i) Electric bargaining unit, MOU expiring November 7, 2026; (ii) Maintenance bargaining unit, MOU expiring December 3, 2025; and (iii) Power Production bargaining unit, MOU expiring April 4, 2026. Clerical employees (made up of two bargaining units: Supervisory/Confidential and Clerical, Technical and Professional) are represented by Redding Independent Employees Organization (“RIEO”) under labor contracts which expire on July 19, 2025. Technical office employees throughout the u tility are represented by United Public Employees of California (“UPEC”) under labor contracts which expire on June 30, 2026. Management and professional employees receive substantially the same fringe benefit package as the represented employees. Redding’ s wage and fringe benefits are generally comparable to those offered by other local public agencies.
Pension Plans. Retirement benefits to City employees, including those assigned to the Electric Utility Department, are provided through the City’s partici pation in the California Public Employees Retirement System (“CalPERS”), an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State.
CalPERS issues a separate annual comprehensive financial report. Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office, 400 Q Street, Sacramento, California 95814.
The City’s defined benefit pension plans, the Miscellaneous Plan and the Safety Plan of the City of Redding, provide retirement and disability benefits, annual cost -of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions under the plans are established by State statute and local government resolution. No employees assigned to the Electric Utility Department participate in the Safety Plan.
The cost of the Miscellaneous Plan is funded through bi-weekly contributions from employees and from employer contributions by the City. Active Miscellaneous Plan members hired prior to January 1, 2013 are required to contribute 7.00% of their annual covered salary and those hired on or after January 1, 2013 are required to contribute 8.00% of their annual covered salary. The member contribution can be paid by the employee or by the City on the employee’s behalf in accordance with applicable labor agreements.
The required member contributions are currently paid by the employees. The City’s employer contribution rate is determined annually by the a ctuary effective on the July 1 following notice of a change in rate.
Funding contribution amounts are determined annually on an actuarial basis as of June 30 by CalPERS.
The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The Packet Pg. 295
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City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. The actuarial methods and assumptions used are those adopted by the CalPERS Board of Administration. The contribution requirements of the plan members are established by State statute and the employer contribution rates are established, and may be amended, by CalPERS.
In addition to the defined pension plan through CalPERS, the City approved the establishment of a Public Agency Retirement System (“PARS”) defined benefit Retirement Enhancement Plan (“REP”) effective January 1, 2005, in order to provide a supplemen tal retirement benefit for all eligible City employees, including those assigned to the Electric Utility Department. The REP is an agent multiple - employer defined benefit plan. Pursuant to the California Public Employees’ Pension Reform Act of 2013, as of January 1, 2013 the REP is closed to new participants. Employees are required to contribute between
1.71% and 2.70% of their of their annually covered salary to the REP to participate. Active represented REP members (not including management and profession al employees) assigned to the Electric Utility Department are not required to contribute to the REP to participate. The City is required to make all other required contributions to fund the REP benefits for participating members.
The Electric Utility Department is allocated its portion of the City’s required contributions for the Miscellaneous Plan and the REP. This allocation is based on eligible employee wages.
The table below sets forth the Electric Utility Department’s allocated share of the City’s actuarially determined required contributions to the Miscellaneous Plan and the REP Plan for the past five Fiscal Years and the amount budgeted for its allocated share of the City’s estimated required contributions to such plans for the current Fiscal Year.
Miscellaneous Plan REP Plan
Fiscal Year
Electric Utility
Department
Allocated Share
of Contribution
Total City
Required
Contribution
Amount
Electric Utility
Department
Allocated Share
of Contribution
Total City
Required
Contribution
Amount
2019-20 $4,866,347 $13,743,592 $2,710,255 $ 7,350,841
2020-21 5,788,940 15,066,353 2,639,123 7,158,333
2021-22 6,563,152 16,765,328 3,645,286 9,589,481
2022-23 7,364,449 18,428,744 3,634,079 9,823,669
2023-24 7,501,976 19,675,937 7,595,688 17,077,760
2024-25(1) 7,552,820 21,022,050 3,378,530 8,637,980
(1) Fiscal Year 2024-25 Budgeted amounts.
Source: City of Redding.
The market value of assets for the Miscellaneous Plan as of June 30, 2023 (the most recent actuarial information available) was $355,957,279 and the entry age normal accrued liability was $565,084,814, resulting in a total unfunded actuarial accrued liability for the City’s Miscellaneous Plan of $209,127,535 and a funded ratio of 63.0% as of such date. The market value of assets fo r the REP as of June 30, 20 22 (the most recent actuarial information available) was $ 70,205,340 and the actuarial accrued liability was $93,145,586, resulting in a total unfunded actuarial accrued liability for the REP of $ 22,940,246 and a funded ratio of 75.37% as of such date.
The City’s required contributions to CalPERS fluctuate each year and include a normal cost component and a component equal to an amortized amount of the unfunded liability. Many assumptions are used to estimate the ultimate liabili ty of pensions and the contributions that will be required to meet those obligations. The CalPERS Board of Administration has adjusted and may in the future further adjust certain assumptions used in the CalPERS actuarial valuations, which adjustments may increase the City’s required contributions to CalPERS in future years. Actuarial assumptions used by PARs in calculating Packet Pg. 296
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actuarially determined contributions and other actuarially determined amounts are generally consistent with those used by CalPERS. Acco rdingly, the City cannot provide any assurances that the City’s required contributions to CalPERS and PARS in future years will not significantly increase (or otherwise vary) from any past or current projected levels of contributions.
The announcement on July 12, 2021 that CalPERS achieved a preliminary investment return of
21.3% for the period from July 1, 2020 through June 30, 2021 caused the CalPERS Board of Administration to lower CalPERS’ discount rate from 7.0% to 6.8% on November 15, 2021 in accorda nce with a risk mitigation policy that was adopted in 2015, which calls for the discount rate to be lowered if returns exceed the then-current discount rate by two or more percentage points. Lowering the discount rate generally means that employers which contract with CalPERS to administer their pension plans will see increases in their normal costs and unfunded actuarial liabilities.
Effective for the Fiscal Year ended June 30, 2015, the City adopted Governmental Accounting Standards Board (“GASB”) Statement No. 68 (“GASB 68”), affecting the reporting of pension liabilities for accounting purposes. Under GASB 68, the City is required to report the Net Pension Liability (i.e., the difference between the Total Pension Liability and the Pension Plan’s Net Pos ition or market value of assets) in its financial statements. The GASB 68 standards apply to financial reporting but not to the actuarial calculation of annual employer pension contributions, which continue to be determined actuarially by each plan.
The t able below summarizes certain information relating to the Net Pension Liability of the Miscellaneous Plan and the REP Plan for the measurement periods ended June 30, 2019 through June 30, 2023, as reported in the City’s audited financial statements for the Fiscal Year ended June 30, 2024.
Miscellaneous Plan(1) REP Plan(2)
Measurement
Period
Net Pension
Liability
Net Position
as a % of
Total
Pension
Liability
Net Pension
Liability as a
% of
Covered
Payroll
Net Pension
Liability
Net Position
as a % of
Total
Pension
Liability
Net Pension
Liability as a
% of
Covered
Payroll
2018-19 $148,549,928 67.76% 338.06% $30,774,260 64.32% 129.92% 2019-20 157,087,984 66.95 365.54 29,044,412 67.27 135.25 2020-21 109,430,508 77.67 243.93 14,809,606 83.65 73.46 2021-22 178,526,513 65.77 368.82 22,940,246 75.37 119.84 2022-23 190,628,671(3) 65.13 359.02 14,906,468(4) 84.22 77.52 __________________
(1) Measured using prior fiscal year annual actuarial valuation rolled forward to measurement date using standard update procedures.
(2) Determined by actuarial valuation as of valuation date projected forward to the measurement date. (3) $72,682,269 of the Net Pension Liability of the Miscellaneous Plan as of June 30, 2023 was determined to be allocable to the Electric Utility Fund.
(4) $6,629,962 of the Net Pension Liability of REP Plan as of June 30, 2023 was determined to be allocable to the Electric Utility Fund.
Source: City of Redding.
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As of the June 30, 20 23 measurement date, the city -wide Total Pension Liability for the Miscellaneous Plan was $546,680,572 and the Plan Fiduciary Net Position was $356,051,901, resulting in the city-wide Miscellaneous Plan Net Pension Liability of $ 190,628,671. In the June 30, 20 22 actuarial valuation utilized for measuring the pension liability for the Miscellaneous Plan as of the June 30, 20 23 measurement date, the Entry Age Normal Actuarial Cost Method was used. The actuarial valuation assumptions used for determining pension liabilities included (a) a 7.00% investment rate of return (net of pension plan investment expenses); (b) projected salary increases that vary based on age and type of service; (c) an inflation component of 2.50% per year; (d) payroll growth of 2.75%; and (e) a discount rate of 6.90%.
As of the June 30, 2023 measurement date, the Total Pension Liability for the REP was $94,451,621 and the Plan Fiduciary Net Position was $ 79,545,153, resulting in the REP Net Pension Liability of $14,906,468. In the June 30, 2022 actuarial valuation utilized for measuring the pension liability for the REP as of the June 30, 202 3 measurement date, the Entry Age Normal Actuarial Cost Method was used.
The actuarial valuation assumptions used for determining pension liabilities included (a) a 7.00% investment rate of return; (b) projected salary increases that were graded rates based on years of service, and 3.34% after 30 years of service; (c) an inflation component of 2.30% per year; and (d) a discount rate of 7.00%.
Retiree Health Benefits . The City also provides medical and dental benefits to eligible City employees and their spouses, including City employees assigned to the Electric Utility Department, who retire from the City, through the City of Redding PARS Pos t-Retirement Health Care Plan (the “OPEB Plan”). The OPEB Plan is a single -employer defined benefit healthcare plan administered by Phase II Systems, dba Public Agency Retirement Services. The Redding City Council has the authority to establish and amend benefit provisions to the OPEB Plan. The authority for this coverage is union contracts for union employees and council resolution for all other employees. The contribution requirements of the plan members are established and may be amended by the Redding C ity Council. The required contribution is based on projected pay-as-you-go financing requirements, with an additional amount (if any) to pre -fund benefits as determined annually by the Redding City Council. The City does not, and historically did not, pre-fund any portion of the plan. The City’s cost of current premiums, financed on a pay -as-you-go basis, can be up to 50% of the premium costs (with the remaining portion paid by retirees) based on employee years of service, subject to each of the City’s eigh t labor organization/employee group’s bargaining agreements. The Electric Utility Department is allocated its portion of the City’s annual full cost for current premiums based on employee eligibility.
Effective beginning for Fiscal Year 2017-18, the City follows the provisions of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (“GASB No. 75”) affecting the reporting of OPEB liabilities for accounting purposes. GASB No. 75 establishes standards for em ployers with other postemployment liabilities for recognizing and measuring net OPEB liabilities, along with deferred inflows and outflows of resources, and expenses/expenditures related to the other postemployment liability. GASB No. 75 does not establish requirements for funding.
The table below sets forth the certain information regarding the City’s annual actuarially determined contribution, the Electric Utility Department’s allocated share of the City’s contribution amount for the OPEB plan, the contri bution deficiency or excess and the Net OPEB liability. The actuarially determined contribution represents the level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded liabilities over a clos ed period not to exceed 30 years. As noted above, the City does not currently pre-fund any portion of the plan.
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OPEB Plan
Fiscal Year
Electric Utility
Department
Allocated Share of
Contribution
City
Required
Contribution
Contribution
Deficiency (Excess)
Net OPEB
Liability(1)
2019-20 $1,016,196 $3,753,880 -- $43,334,953
2020-21 988,708 3,646,314 -- 40,637,719
2021-22 1,238,492 4,601,018 -- 54,940,168
2022-23 788,709 3,021,637 -- 51,564,892
2023-24 1,135,258 4,312,188 -- 78,992,811(2)
2024-25(3) 1,257,628 4,777,000 N/A(4) N/A(4)
__________________
(1) As reported for such fiscal year based on prior fiscal year measurement period. (2) $20,796,229 of the Net OPEB Liability as of the June 30, 2023 measurement date was determined to be allocable to the Electric Utility Fund.
(3) Fiscal Year 2024-25 Budgeted amounts.
(4) Information not yet available.
Source: City of Redding.
Pursuant to GASB No. 75, for the Fiscal Year ended June 30, 2024, the City reported a Net OPEB Liability of $78,992,811 as of the June 30, 2023 measurement date, of which $20,796,229 was allocable to the Electric Utility Fund. The covered payroll (annual payroll of active employees covered by the OPEB Plan was $77,182,339 and the ratio of the Net OPEB liability to the covered payroll was 102.35%. The Net OPEB Liability was measured as of June 30, 20 23, and the actuarial valuation used to calculate the Net OPEB Liability was as of June 30, 2023. In the June 30, 2023actuarial valuation, the actuarial assumptions used in determining the Total OPEB liability include (a) a 3.65% discount rate at June 30, 2023 and a 3.54% discount rate at June 30, 2022 ; (b) a 3.50% expected net long -term investment rate of return at June 30, 2023 and 2022; (c) aggregate projected salary increases of 2.75% annually; (d) an inflation component of
2.50% per year; and (e) a healthcare cost trend of 8.50% for 2025, decreasing to an ultimate rate of 3.45% in year 2076 for Non-Medicare participants, and 7.50% for 2025, decreasing to an ultimate rate of 3. 45% in year 2076 for Medicare participants.
Additional information regarding the City’s retirement plans and other post-employment benefits, including further information regarding the assumptions used to determine the pension and OPEB liabilities and the funding requirements therefor, can be found in Notes 17 and 18 and the Required Supplementary Information to the City’s audited financial statements included in Appendix A hereto and in the City’s annual comprehensive financial report (“ACFR”) which may be obtained at the following website:
http://www.cityofredding.org/departments/finance-department/accounting/financial-reporting.
Indebtedness
Parity Electric Revenue Obligations. As of January 1, 2025, the City had $82,720,000 outstanding aggregate principal amount of long -term Electric System obligations constituting Parity Obligations and payable from Net Revenues of the Electric System and amounts on deposit in the Electric Revenue Fund on a parity w ith the 2025A Installment Sale Payments payable under the Installment Sale Agreement relating to the 2025A Bonds, consisting of: (i) the installment sale payments payable under the installment sale agreement relating to the 2015 RJPFA Electric System Bonds ; (ii) the 2017 City Electric System Refunding Bonds, and (iii) the 2018 City Electric System Refunding Bonds. All of the outstanding Parity Obligations bear interest at a fixed rate. The outstanding Parity Obligations are summarized in the table below.
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CITY OF REDDING
OUTSTANDING ELECTRIC SYSTEM INDEBTEDNESS
(as of January 1, 2025)
Name of Issue
Original Principal
Amount
Principal Amount
Outstanding
RJPFA Bonds
Electric System Revenue Bonds, 2015 Series A ....................... $ 37,955,000 $28,440,000 City Refunding Bonds
Electric System Refunding Revenue Bonds, Series 2017 ......... 55,785,000 32,850,000 Electric System Refunding Revenue Bonds, Series 2018 ......... 39,510,000 21,430,000 Total $133,250,000 $82,720,000
__________________
Source: City of Redding.
See also APPENDIX G – “DEBT SERVICE SCHEDULE” for information regarding the City’s annual debt service requirements for the outstanding Parity Obligations.
Subordinate Revolving Credit Agreement . The City and the Authority have entered into the Revolving Credit Agr eement with the Credit Bank, under which the Credit Bank has agreed to advance funds to the Authority, from time -to-time, in an amount up to $25,000,000, for the benefit of the City, in order to finance and refinance the acquisition, construction and insta llation from time to time of improvements, additions and betterments to the Electric System. Such funds may be borrowed, paid down, and re-borrowed under the terms of the Revolving Credit Agreement through October 29, 2025, unless such commitment by the Credit Bank to advance funds thereunder is earlier terminated pursuant to its terms. The obligation of the Authority to repay borrowings advanced by the Credit Bank under the Revolving Credit Agreement is evidenced by promissory notes of the Authority (which may be taxable or tax -exempt, as applicable), which notes are payable from, and secured by, certain installment sale payments required to be made by the City to the Authority under the terms of the Subordinate Installment Sale Agreement by and between the City and the Authority. The installment sale payments to be made by the City under the Subordinate Installment Sale Agreement constitute Subordinate Obligations, payable from Net Revenues of the City’s Electric System subject and subordinate to the City’s obligation to pay the 2025A Installment Sale Payments and the other Parity Obligations.
Notes under the Revolving Credit Agreement bear interest at a fluctuating rate of interest per annum equal to: (a) for taxable borrowings, the one -month secured overn ight financing rate plus 0.11448% as determined in accordance with the Revolving Credit Agreement for each monthly interest accrual period (“Term SOFR”) plus a spread of 0.75% (so long as the current credit ratings on the City’s senior lien Parity Obligations are maintained); and (b) for tax-exempt borrowings, 85% of the Term SOFR plus a spread of
0.65% (so long as the current credit ratings on the City’s senior lien Parity Obligations are maintained).
Any outstanding borrowings under the Revolving Credit A greement which have not been paid (which borrowings may be paid from, among other sources, proceeds of future long-term financings of the City or the Authority) on or prior to the facility maturity date of the Revolving Credit Agreement ( i.e., currently October 29, 2025, unless extended) will be automatically converted to term loans on such date, so long as no default or event of default by the Authority or the City shall have occurred and be continuing and all representations and warranties of the Authority and the City under the Revolving Credit Agreement are true and correct in all material respects as of such date. Any term loans made by the Credit Bank under the Revolving Credit Agreement will bear interest at a fluctuating rate of interest per annum equal to, for each day: (1) during the first 90 days commencing on the facility maturity date, the greatest of (i) the Prime Rate in effect at such time plus 1.0%; (ii) the Federal Funds Rate in effect at such time plus 2.0%; and (iii) 7.5% Packet Pg. 300
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(such applicable rate, the “Base Rate”); and (2) during the period commencing on the 91 st day after the facility maturity date to and including the 180 th date after the facility maturity date, the Base Rate then in effect plus 1.0%; and (3) during the period commencing on the 181st day after the facility maturity date and thereafter, the Base Rate plus 2.0%. Principal on any such term loans would be payable in quarterly installments over three years.
Under the Revolving Credit Agreement, upon a failure by the Authority to pay principal or interest of any borrowing thereunder, a failure by the Authority or the City to perform or observe its covenants, a default by the Authority or the City in the payment of other specified indebtedness payable from Net Revenues of the Electri c System, certain acts of bankruptcy or insolvency, or other specified events of default (including if any of Moody’s, S&P or Fitch shall have assigned a credit rating below “Baa1” or “BBB+” to any of the senior lien Parity Obligations, or any credit ratin g assigned by any of such rating agencies has been suspended or withdrawn for any credit related reason), the Credit Bank has the right to terminate its commitment to extend further credit under the Revolving Credit Agreement and may accelerate (depending on the event, seven days after the occurrence, or for certain events, only after 180 days’ notice, or, in connection with certain acts of bankruptcy or insolvency or in the event of an acceleration or right to cause an acceleration of Authority or City deb t by another lender, credit enhancer or swap counterparty, immediately) the Authority’s obligation to repay any borrowings under the Revolving Credit Agreement. Upon the occurrence and during the continuance of an event of default under the Revolving Credit Agreement, outstanding borrowings thereunder may bear interest at a default rate equal to the then applicable Base Rate plus a spread of 4.0%.
As of January 1, 2025, the aggregate principal amount of borrowings outstanding under the Revolving Credit Agreement was $0.
Take-or-Pay; Joint Powers Agency Obligations. As previously discussed, the City participates in several joint powers agencies, including M -S-R PPA, M -S-R EA and TANC, which have issued joint powers agency indebtedness to finance the costs of certain projects on behalf of their respective project participants. The City does not participate in any NCPA -financed generation or transmission projects and therefore has no obligation in connection with any NCPA indebtedness. Obligations of the Cit y under its agreements with respect to M -S-R PPA and TANC constitute Maintenance and Operation Costs of the Electric System payable prior to any of the 2025A Installment Payments required to be made in connection with the 2025A Bonds and the City’s other P arity Obligations described above. Agreements with M -S-R PPA and TANC are on a “take-or-pay” basis, which requires payments to be made whether or not projects are completed or operable, or whether output from such projects is suspended, interrupted or term inated.
These agreements contain “step -up” provisions obligating the City to pay a share of the obligations of a defaulting participant. As described herein, the City also participates in M-S-R EA and has certain payment obligations in connection therewith which constitute Maintenance and Operation Costs of the City’s Electric System. However, the City’s payment obligation to M-S-R EA is with respect to actual quantity of natural gas delivered each month on a take-and-pay (rather than take-or-pay) basis. Responsibility for bond repayment is non-recourse to the City. See “– Fuel Supply – M-S-R Energy Authority – Gas Prepay” above.
All of M-S-R PPA’s debt was retired as of July 1, 2022. The City’s participation and share of debt service obligation (without giving effect to any “step-up” provisions) for the TANC COTP project in which it participates are shown in the following table.
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CITY OF REDDING
ELECTRIC UTILITY DEPARTMENT
OUTSTANDING DEBT OF JOINT POWERS AGENCIES
(Dollar Amounts in Millions)
(as of January 1, 2025)
Outstanding
Debt(1)
City
Participation(2)
City Share of
Outstanding
Debt
TANC
COTP Bonds
................................................................ $159.6 8.36%(3) $13.3 COTP Notes
................................................................ 91.7 8.41%(3) 7.7 Total $251.3 $21.0
__________________
(1) Outstanding principal amount.
(2) Participation obligation is subject to increase upon default of another project participant. Such increase should not exceed, without prior written consent of a non-defaulting participant, an accumulated maximum of 25% of such non-defaulting participant’s original participation. (3) As described herein, the City’s obligation for debt service differs from its TANC COTP entitlement participation percentage due to the varying shares of each TANC member -participant with respect to prior bond issues refunded by the outstanding TANC bonds and the portion of bonds allocable to South of Tesla transmission.
Source: City of Redding.
For the fiscal year ended June 30, 2024, the City’s annual obligations for debt service in connection with the TANC COTP joint powers agency obligations described in the table above aggregated approximately $1.2 million. The City’s share of debt service on such TANC COTP joint powers agency obligations is expected to increase, with the City’s annual oblig ations for debt service costs estimated at approximately $1.3 million in fiscal year 2024 -25 through fiscal year 2038 -39 (the final maturity of the TANC COTP bonds). This projection does not include any future debt issuances that may occur. The outstanding TANC COTP bonds included in the above table are fixed rate debt. As described under “ – Power Supply Resources – Joint Powers Agency Resources – Purchased Power, Generation and Transmission – TANC California-Oregon Transmission Project,” in August 2024, TA NC authorized the issuance pursuant to the TANC Credit Agreement of up to $120.0 million of variable rate TANC short term notes to be outstanding at any time for the purpose of financing certain improvements to the COTP on an interim basis. TANC short term notes issued pursuant to the TANC Credit Agreement will mature in September 2025 (with a corresponding amount proportionate to the City’s debt service obligations under the TANC Agreement due from the City), unless the commitment of the lender under the T ANC Credit Agreement is extended in accordance with its terms. It is expected that TANC will refinance any TANC short term notes issued pursuant to the TANC Credit Agreement from the proceeds of TANC bonds on or before their maturity date. The City will be obligated to pay approximately 10.04% of TANC’s debt service on any such future TANC indebtedness.
Cash Reserves
The City maintains cash reserves for a number of reasons, including operating cash requirements, construction cash requirements, dealing with the cost impacts of dry hydroelectric conditions, gas and electric market volatility, and to allow the City the flexibility to increase rates on a scheduled basis. When circumstances warrant, the City has determined that it is appropriate to use a portion of its unrestricted cash Packet Pg. 302
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balances and reserves to stabilize or subsidize its electric rates in the near term and to increase rates when appropriate.
In November 2014, the City Council adopted the Electric Utility Financial Management Policy (the “Electric Utility Financial Management Policy”), which became effective January 1, 2015. The Electric Utility Financial Management Policy establishes guidelines for prudently managing the financial profile of the City electric utility, including a target of 1.80 times debt service coverage without use of reserves; and a target of unrestricted reserves sized at a minimum of 75 days’ cash up to 180 days’ cash. The Electric Utility Financial Management Policy also recommends that the City Council consider different rate adjustments under different conditions.
In Fiscal Year 2021 -22, in alignment with the quarterly financial updates presented to the City Council, the Electric Utility Department allocated a portion of its cash reserves to help offset operational costs for the fiscal year. The actual cost of Redding Power Plant generation was higher than forecast due to an increase in load, the ongoing drought’s impact on hydroelectric deliveries, the price of natural gas due to the war in Ukraine, and the inclusion of gas purchases for wholesale energy sales. As of June 30, 2024, the level of unrestricted operating cash reserves maintained by the Electric System was approximately $40.6 million, representing 110 days’ of operating cash on hand. The current minimum unrestricted operating cash balance, as established by the Electric Utility Financial Management Policy, would be approximately $27.5 million.
In addition to unrestricted operating cash reserves addressed in the Electric Utility Financial Management Policy, the electric utility currently maintains a variety of other cash reserves, which together with the Electric Utility Financial Management Policy reserve amount totaled approximately $59.9 million as of June 30, 2024. These available cash reserves (as reflected in the table entitled “Summary of Operating Results” below) include certain set -aside amounts that are excluded for purposes of the Electric Utility Financial Management Policy reserve calculation.
Collectively, these reserves are designated to help insulate the City from market volatility. In addition, the documents pursuant to which the City’s outstanding Parity Obligations were issued or incurred permit the use of unrestricted cash balances and reserves to satisfy the City’s rate covenants with its bond holders. These reserves are not available for transfer to the City’s general fund. The City Council has a policy that limits in-lieu transfers to the general fund to 1% of the electric utility’s asset base each year. See “– Transfers to the General Fund” above.
City Investment Policy
Funds of the City which are not pledged for the payment of debt are invested by the City Treasurer in accordance with the City’s Investment Policy. Allowable investments under the Investment Policy are those authorized by California Government Code Sections 53600 et seq. The Investment Policy is reviewed and updated if necessary no less than annually. The current Investment Policy was most recently approved by the City Council on July 30, 2024.
The Investment Policy may be changed at any time at the discretion of the City Council (subject to the State law provisions relating to authorized investments) and as the California Government Code is amended. There can be no assurance, therefore, that the State law and/or the Investment Policy will not be amended in the future to allow for investments which are currently not permitted under such State law or the Investment Policy, or that the objectives of the City with respect to investments will not change. All investments, including those authorized by law f rom time to time for investments by public agencies, contain a certain degree of risk. Such risks include, but are not limited to, a lower rate of return than expected Packet Pg. 303
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and loss or delayed receipt of principal. The occurrence of these events with respect am ounts held by the City could have a material adverse effect on the City’s finances.
Summary of Condensed Operating Results and Fund Net Position Information A summary of operating results and condensed statement of fund net position for the City’s Electric Utility Fund for the five Fiscal Years ended June 30, 2020 through June 30, 2024 is shown in the following tables. The information for the Fiscal Years ended June 30, 2020 through June 30, 2024 was prepared by the City on the basis of its audited financial information for such Fiscal Years. The following table also sets forth debt service coverage ratios with respect to the City’s outstanding Parity Obligations for the years indicated. See also “– Cash Reserves” above.
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CITY OF REDDING
ELECTRIC UTILITY FUND
SUMMARY OF OPERATING RESULTS
Fiscal Year Ended June 30,
2020 2021 2022 2023 2024
Revenue
Retail Revenue $ 117,984,880 $ 126,419,111 $ 123,439,749 $ 131,400,744 $ 132,448,887 Wholesale Revenue(1) 28,208,129 25,726,030 30,351,930 44,591,721 30,153,666 Misc. Other Income(2) 5,747,919 6,174,975 5,994,359 23,374,061(14) 7,190,474 Total Revenue $ 151,940,928 $ 158,320,116 $ 159,786,038 $ 199,366,526 $ 169,793,027 Operating Expenses(3)
Cost of Power(4) $ 50,599,673 $ 52,810,777 $ 62,709,514 $ 80,993,472 $ 53,212,490 Maintenance Operations
and Administration
M-S-R Payments 4,543,924 4,486,291 4,530,947 321,609 59,560 TANC Payments 2,567,099 2,740,288 2,361,697 2,604,247 3,656,589 Other Operating Expenses 76,671,379(13) 79,407,830 69,457,550 83,274,523 84,039,379 Add/(Less) OPEB Expenses(5) (16,458) (737,360) (735,482) (1,136,682) (1,955,260) Add/(Less) Pension Expense(6) (3,828,740) (7,535,001) 6,199,814 18,334 3,791,794 In Lieu Tax Payment
to General Fund(7) 5,323,500 6,097,590 5,464,000 6,246,800 7,270,600 Total Expenses $ 135,860,377 $ 137,270,415 $ 149,988,040 $ 172,322,303 $ 150,075,152 Net Revenue $ 16,080,551 $ 21,049,701 $ 9,797,998 $ 27,044,223 $ 19,717,875 Available Reserves(8) $ 102,018,489 $ 87,201,242 $ 71,970,574 $ 70,486,678 $ 59,881,615(15) In Lieu Tax Payment
to General Fund(7) $ 5,323,500 $ 6,097,590 $ 5,464,000 $ 6,246,800 $ 7,270,600 Funds Available for Debt Service $ 123,422,540 $ 114,348,533 $ 87,232,571 $ 103,777,701 $ 86,870,090 Debt Service(9) $ 12,778,070 $ 12,780,320 $ 12,785,570 $ 14,304,520 $ 14,298,520 Remaining Funds(10) $ 110,644,470 $ 101,568,213 $ 74,447,001 $ 89,473,181 $ 72,571,570 Debt Service Coverage(11) 9.66 8.95 6.82 7.25 6.08
Current Debt Service Coverage(12) 1.26 1.65 0.77 1.89 1.38 __________________
(1) Primarily represents spot market sales of both electricity and natural gas. (2) Developer fees (available for debt service), earnings on Electric Utility Fund balance plus earnings on the Acquisition Fund, Debt Service Fund and the Reserve Fund for the City’s then outstanding Parity Obligations. (3) Excludes depreciation and amortization expenses.
(4) This fluctuates in relation to the volume of wholesale revenue in a given year. (5) The City is not currently pre-funding its OPEB liability. In addition to the portion of the cost of current retiree health insurance premiums allocable to the Electric Utility Department, the operating expenses of the Electric Utility Department for accounting purposes include an amount necessary to reflect the Electric Utility Department’s allocable share of the City’s OPEB liability as of the end of the Fiscal Year. This amount is excluded for calculation of debt service coverage as it is a non -cash item and does not reduce cash available for debt payments. See “– Employees – Retiree Health Benefits” above. (6) Represents adjustment for cash used for operating activities related to pension expense. Certain changes in net pension liabilities are recorded as deferred inflows of resources or deferred outflows of resources depending on the nature of the change. (7) Represents 1% of installed assets with selec ted depreciation. Payments are made annually to the City general fund and are reflected as Transfers Out on the Electric Utility Fund Statement of Revenues, Expenses and Changes in Net Assets. (8) This represents the amount of unrestricted funds in the Electric Utility Fund available to pay Maintenance and Operation Costs and/or annual debt service on the outstanding Parity Obligations. Available Reserves are taken into account for purposes of compliance with the rate covenant under the documents pursuan t to which the outstanding Parity Obligations were issued.
Available Reserves exclude electric utility funds held in a margin account as posted collateral. See “ – Fuel Supply” above. (Footnotes to table continue on the next page)
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(9) Reflects installment sale payments under installment sale agreements and debt service on bonds comprising the outstanding Parity Obligations. Interest payments are net of capitalized interest (if any) and final debt service payments made from bond reserve funds (if applicable).
(10) Available for capital expenditures and other lawful purposes. (11) Funds available for Debt Service divided by Debt Service. (12) Net Revenues divided by Debt Service. The documents pursuant to which the outstanding Parity Obligations were issued have no requirement respecting debt service coverage from then current year’s revenues. In certain past years, the City has utilized a portion of its cash reserves to fund part of its annual costs. See “– Cash Reserves” above. (13) Fiscal Year 2019 -20 Other Operating Ex penses includes an $11.2 million distribution of cap -and-trade revenues to customers to offset the financial impacts of COVID -19. The distribution, reflected as an expense in the City’s audited financial statements, is unique to Fiscal Year 2019-20. (14) Includes $15.9 million in one -time, unanticipated settlement proceeds received in April 2023 from the Central Valley Project Improvement Act (CVPIA) litigation.
(15) The City expects to reimburse itself for certain cash expenditures made for costs of the 2025A Electric System Project.
See “PLAN OF FINANCE – Financing of Improvements to the Electric System.” Source: City of Redding.
CITY OF REDDING
ELECTRIC UTILITY FUND
CONDENSED STATEMENT OF NET POSITION
Fiscal Year Ending June 30,
2020 2021 2022 2023 2024
Assets:
Net Utility Plant $188,225,311 $195,970,192 $194,812,072 $197,472,790 $201,007,916 Restricted Assets 10 11 643 12,030 17,827
Current Assets 125,479,965 116,918,989 98,058,068 96,321,693 90,129,737 Non-Current Assets 22,263,414 23,703,977 26,078,543 25,485,377 26,626,743 Deferred Outflow
of Resources 24,155,839 22,901,183 25,070,370 37,354,666 44,609,555 Total Assets $360,124,539 $359,494,352 $344,019,696 $356,646,556 $362,391,778 Liabilities and Equity:
Current Liabilities $ 19,793,729 $ 25,212,444 $ 25,971,831 $ 27,107,920 $ 29,965,643 Long Term Liabilities 78,665,069 85,738,547 67,014,428 97,399,523 103,158,884 Retained Earnings(1) 138,820,724 133,516,316 130,373,590 135,612,411 145,811,761 Long Term Debt 123,139,529 114,216,448 103,408,368 94,995,093 82,417,528 Deferred Inflows
of Resources (294,512) 810,597 17,251,479 1,531,609 1,037,962 Total Liabilities
and Equity $360,124,539 $359,494,352 $344,019,696 $356,646,556 $362,391,778 __________________
(1) Retained Earnings include contributed capital which represents improvements built by developers at no cost to the Electric System and amounts contributed by other municipal departments.
Source: City of Redding Finance Department.
Management’s Discussion of Summary of Fiscal Year 2023-24 Operating Results As reflected in the table above entitled “Summary of Operating Results,” in Fiscal Year 202 4, Electric System retail sales r evenues were approximately $132.4 million, representing an increase of approximately $1.0 million, as compared to the prior year. This reflects a stable retail customer base and the 4.0% rate increase effective on January 1, 2024. Wholesale sales revenues declined by approximately Packet Pg. 306
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$14.4 million (approximately 32.4%), offset by an approximately $27.8 million reduction (approximately
34.3%) in Cost of Power. The decline in wholesale activity and reduction in Cost of Power was primarily attributable to increased hydroelectric deliveries. Total expenses decreased by approximately $22.2 million (approximately 12.9%). Overall Available Reserves of the electric utility decreased by approximately $10.6 million from $70.5 million as o f June 30, 2023 to $ 59.9 million as of June 30, 2024. The decease of approximately $10.6 million in the electric utility’s aggregate Available Reserves from June 30, 2023 to June 30, 2024 was primarily due to investment in planned capital projects. “Available Reserves” as defined in the indentures and installment sale agreements relating to the outstanding Parity Obligations include, among other things, customer service deposits and reserves, public benefits program funds, the power plant maintenance fund, and greenhouse gas allowance receipts.
Litigation Affecting the Electric System
At any given time, including the present, there are certain other claims and disputes, including those currently in litigation, that arise in the normal course of the Electric Utility Department’s activities. Such matters could, if determined adversely to the City, affect expenditures by the Electric Utility Department, and in some cases, its Electric Revenues. The management of the Electric Utility Department and the Redding City Attorney are of the opinion that no pending actions are likely to have a material adverse effect on the City’s ability to make the 2025A Installment Payments due in connection with the 2025A Bonds.
See also “LITIGATION.”
In addition, from time -to-time, there are ongoing proceedings that involve projects in which the City has an interest and which comprise a portion of the current resource portfolio of the City’s Electric Utility. Although the City is generally not a party to such litigation, the outcome of such proceedings may impact the costs and operations of the affected project. The City is not aware of any such presently ongoing proceedings that, if determined adversely, would be expected to materially adversely affect the financial position or operations of the Electric Utility.
RATE REGULATION
The City sets rates, fees and charges for electric service. The authority of the City to impose and collect rates and charges for electric power and energy sold and delivered is not subject to the general regulatory jurisdiction of the CPUC, and currently neither the CPUC nor any other regulatory authority of the State of California nor FERC approves such rates and charges. It is possible that future legislative and/or regulatory changes could subject the rates and/or service area of the City to the jurisdiction of the CPUC or to other limitations or requirements. See also “CONSTITUTIONAL LIMITATIONS IN CALIFORNIA ON TAXES AND FEES” for a discussion of certain voter -approved constitutional measures affecting the imposition of fees and charges by governmental agencies in the State.
FERC potentially could assert jurisdiction over rates of licensees of hydroelectric projects and customers of such licensees under Part I of the Federal Power Act, although it as a practical matter has not exercised or sought to exercise such jurisdiction to modify rates that would legitimately be charged. Even if it did assert such jurisdiction, the City’s small hydroelectric project represents only approximately one percent of the available capacity of the City’s total power supply resources.
Under provisions of the Federal Power Act, FERC has the authority, under certain circumstances and pursuant to certain procedures, to order certain utilities (municipal, distribution cooperative or otherwise) to provide transmission access to others at FERC -approved rates. See “CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY.”
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The CEC is authorized to evaluate rate policies for electric energy as related to the goals of the Energy Resources Conservation and Development Act and to make recommendations to the Governor, the Legislature and local, publicly-owned electric utilities (“POUs”).
CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY The following discussion of legislative, regulat ory and other factors affecting the electric utility industry should be considered when evaluating the Electric System and considering an investment in the 2025A Bonds. This discussion does not purport to be comprehensive or definitive, and these matters a re subject to change subsequent to the date hereof. The electric industry has historically been subject to continuing legislative and administrative reform. The City cannot predict at this time whether any additional legislation or rules will be enacted wh ich will affect the Electric System’s finances or operations, but the impacts could be significant. Extensive information on the electric utility industry is available from the legislative and regulatory bodies and other sources in the public domain, and p otential purchasers of the 2025A Bonds should obtain and review such information. Such information is not incorporated herein by reference.
The election of new administrations, including the President of the United States, could also impact substantially the current environmental standards and regulations and other matters described herein. For example, upon taking office in January 2025, President Trump issued a series of executive orders affecting executive actions and policies implemented by the prior administration. One such executive order revoked a number of executive actions taken by the Biden administration, including revoking certain executive orders of the Biden administration relating to climate change and clean energy, requiring federal agencies to review all federal government actions taken pursuant to the revoked orders and to take necessary steps to rescind, replace or amend such actions. In addition, the President issued a separate executive order directing the heads of all federal agencies t o review all agency actions affecting the development of domestic energy resources, such as oil, natural gas, coal, hydropower, biofuels, critical mineral, and nuclear energy, and within 30 days of identifying any agency action that unduly burdens the production of domestic energy resources, to develop and begin action plans to rescind or revise the agency actions. Further, the agencies were directed to notify the Attorney General so that appropriate action may be taken in any pending litigation, including the request of a stay, related to the identified agency action. The outcome of these executive orders is not yet known. See also “ – Federal Energy and Environmental Policies and Legislation – Inflation Reduction Act” and “– Changing Laws and Requirements Generally.” Federal Energy and Environmental Policies and Legislation Energy Policy Act of 2005. Although the City is exempt from most federal rate regulation pursuant to Section 201(f) of the Federal Power Act (see “RATE REGULATION”), EPAct 2005 imposed sp ecific exceptions. In particular, FERC was given authority over the behavior of market participants. Under FERC’s authority it can impose penalties on any seller for using a manipulative or deceptive device, including market manipulation, in connection with the purchase or sale of energy or of transmission service.
The Commodity Futures Trading Commission (“CFTC”) also has jurisdiction to prohibit certain types of market manipulation or deceptive claims under the Commodity Exchange Act.
EPAct 2005 authorized FERC to issue permits to construct or modify transmission facilities located in a national interest electric transmission corridor if FERC determines that the statutory conditions are met.
EPAct 2005 also required the creation of an electric reliability organization (“ERO”) to establish and enforce, under FERC supervision, mandatory Reliability Standards to increase system reliability and minimize blackouts. The Reliability Standards apply to users, owners and operators of the Bulk -Power System, as more specifically set forth in each Reliability Standard. In February 2006, FERC issued Order 672, which certified NERC as the ERO. Many Reliability Standards have since been approved by FERC.
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Such Reliability Standards pertain not only to the planning, operatio ns, and maintenance of Bulk -Power System facilities, but also to cyber and physical security of systems that could affect the reliable operation of the electric grid. The Reliability Standards are frequently being amended to address emerging reliability issues.
The ERO or the entities to which NERC has delegated enforcement authority through an agreement approved by FERC (“Regional Entities”), such as the WECC, may enforce the Reliability Standards, subject to FERC oversight, or FERC may independently enforce them. Potential monetary sanctions include fines in excess of $1 million per violation per day. FERC Order 693 further provided the ERO and Regional Entities with the discretion necessary to assess penalties for such violations, while also having discretion to calculate a penalty without collecting the penalty if circumstances warrant.
Federal Regulation of Transmission Access. EPAct 2005 authorizes FERC to compel “open access” to the transmission systems of certain utilities that are not generally regulated by FERC, including municipal utilities if the utility sells more than four million MWhs of electricity per year. Under open access, a transmission provider must allow all customers to use the system under standardized rates, terms and conditions of service.
FERC Order No. 888 requires the provision of open access transmission services on a nondiscriminatory basis by all “jurisdictional utilities” (which, by definition, does not include municipal entities like the City) by requiring all such utilities to file Open Access Transmission Tariffs (OATTs , as defined above). Order No. 888 also requires “non-jurisdictional utilities” (which, by definition, does include the City) that purchase transmission services from a jurisdictional utility under an open acc ess tariff and that owns or controls transmission facilities to provide open access service to the jurisdictional utility under terms that are comparable to the service that the non -jurisdictional utility provides itself. Section 211A of the EPAct 2005 authorizes, but does not require, FERC to order unregulated transmission utilities to provide transmission services. Specifically, FERC may require an unregulated transmitting utility to provide access to their transmission facilities (1) at rates that are co mparable to those that the unregulated transmitting utility charges to itself; and (2) on terms and conditions (not relating to rates) that are comparable to those under which the unregulated transmitting utility provides transmission services to itself that are not unduly discriminatory or preferential.
On February 16, 2007, FERC issued Order 890, which concluded that reform of its pro forma OATT was necessary to reduce the potential for undue discrimination and provide clarity in the obligations of transmission providers and customers. Significantly, in Order 890 FERC stated that it will implement its authority under Section 211A with respect to unregulated transmitting utilities on a case-by-case basis and retain the current reciprocity provisions.
On Jul y 21, 2011, FERC issued Order 1000, which among other things requires public utility (jurisdictional) transmission providers to participate in a regional transmission planning process that produces a regional transmission plan and that incorporates a regio nal and inter -regional cost allocation methodology. Further, FERC states that it has the authority to allocate costs to beneficiaries of transmission services, even in the absence of a contractual relationship between the owner of the transmission facilities and the beneficiary. Under EPAct 2005, FERC may not require municipal utilities to join regional transmission organizations, in which participating utilities allow an independent entity to oversee operation of the utilities’ transmission facilities. FER C has stated, however, that FERC expects such utilities to participate in the regional processes for transmission planning and that FERC will pursue associated complaints against such utilities on a case-by-case basis.
On May 13, 2024, FERC issued Order 19 20 to reform the planning of the nation’s transmission system as well as the allocation of costs for new transmission projects. Order 1920, among other things, Packet Pg. 309
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requires public utility (jurisdictional) transmission providers to conduct and periodically update long-term regional transmission planning to anticipate future needs, consider a broad set of benefits when planning new facilities, identify opportunities to modify in -kind replacement of existing transmission facilities to increase their transfer capability, propose methods of cost allocation to pay for selected long-term regional transmission facilities, and increase transparency regarding local transmission planning information. Order 1920 expands the role of states throughout the process of planning, selecting and determining how to pay for new transmission facilities. On November 21, 2024, FERC issued Order No. 1920 -A, revising its original Order 1920 in response to numerous requests for rehearing and clarification. The revisions to Order 1920 provide state regulators with a larger role in the long -term regional transmission planning process, particularly in shaping scenario development and cost allocation, by requiring transmission providers to include state input about how future scenarios in the lo ng-term regional transmission planning will be developed and to include any state-agreed cost allocation proposals in their compliance plans. The revised rule also eliminates the requirement for transmission planners to use several recommended economic and reliability costs factors when evaluating potential long -term transmission projects. The City is evaluating the implications of Order 1920 with respect to the operations of the Electric System.
Federal Policy on Cybersecurity. In February 2013, then-President Obama issued Executive Order 13636 “Improving Critical Infrastructure Cybersecurity” (the “Cybersecurity Order”). Among other things, the Cybersecurity Order called for improved information sharing and processing of security clearances for owners and operators of critical infrastructure. The Cybersecurity Order further required the Secretary of Commerce to direct the National Institute of Standards and Technology (“NIST”) to lead the development of a framework (“Framework”) to reduce cyber risks to cr itical infrastructure. The voluntary Framework will continue to be updated and improved as industry provides feedback on implementation.
The Cybersecurity Information Sharing Act of 2015 was signed into law in December 2015. It creates an industry-supported, voluntary cybersecurity information sharing program which facilitates the secure sharing of cyber-related threat information among both public and private sector entities. The City participates in sharing and receiving information about cybersecurity th reats in real time through several hubs, including the Electricity Information Sharing and Analysis Center (E -ISAC) and the National Cybersecurity and Communication Integration Center, as tools to actively manage risk related to potential cyber intrusion.
Regulatory Actions Under the Clean Air Act. The United States Environmental Protection Agency (the “EPA”) regulates greenhouse gas (“GHG”) emissions under existing law by imposing monitoring and reporting requirements, and through its permitting programs. Like other air pollutants, GHGs are regulated under the Clean Air Act through the Prevention of Significant Deterioration (“PSD”) Permit Program and the Title V Permit Program. A PSD permit is required before commencement of construction of new major stationary sources or major modifications of a major stationary source and requires best available control technologies (“BACT”) to control emissions at a facility. Title V permits are operating permits for major sources that consolidate all Clean Air Act requi rements (arising, for example, under the Acid Rain, New Source Performance Standards, National Emission Standards for Hazardous Air Pollutants, and/or PSD programs) into a single document and the permit process provides for review of the documents by the EPA, state agencies and the public. GHGs from major natural gas -fired facilities are regulated under both permitting programs through performance standards imposing efficiency and emissions standards.
In April 2024, the EPA released new carbon pollution standards for coal and natural gas-fired power plants. The rule establishes carbon dioxide (“CO2”) emissions standards and guidelines for newly built and reconstructed stationary combustion turbines (generally natural gas-fired) and existing and modified fossil fuel-fired steam generating units (generally coal-fired). The EPA previously announced in February 2024 that it would defer promulgating emissions guidelines for existing natural gas -fired power plants (as contemplated in its proposed rule) and stated t hat it would commence a new rulemaking process that will Packet Pg. 310
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apply to existing natural gas-fired plants and regulate additional pollutants. In March 2024, the EPA opened a non-regulatory docket which includes key framing questions intended to help the EPA develop standards for reducing GHG emissions and possibly criteria pollutant emissions from existing gas combustion turbines in the power sector. The EPA’s final rule for existing coal -fired and new natural gas-fired power plants is designed to ensure that all coal-fired power plant that plan to run in the long -term and all new baseload gas-fired power plants control 90% of their carbon pollution. The final rule identifies a standard of performance reflecting the application of best systems for emissions reduct ion (BSER), taking into account costs, energy requirements and other statutory factors. Under the final rule, emissions standards and guidelines are established for different subcategories of power plants according to unit characteristics such as their gen erating technology, capacity, level of operations, and anticipated remaining operational life of the unit. The rule would generally require more CO 2 emissions control at fossil fuel -fired power plants that operate more frequently and for more years and wou ld phase in increasingly stringent CO 2 requirements over time. The standards are based on emission control methods that can be installed at the plants, including technologies such as carbon capture and sequestration/storage, and natural gas co -firing; however, the determination of whether to implement such technologies or to comply with the proposed emissions limits by other means would be made by power plant operators and state regulators. Under the rule, states would be required to submit compliance plans to the EPA within 24 months of the effective date of the adoption of the final rule.
The City does not have any remaining interest in any existing coal -fired power plants. The City’s Redding Power Plant will be subject to a separate rule being developed for existing gas-fired units when promulgated.
Inflation Reduction Act. On August 16, 2022, then President Biden signed the Inflation Reduction Act of 2022 (the “IRA”). The IRA introduces a large amount of funding and grants for governmental and non-profit organizations. Among the most significant energy-related grants are grants for “zero-emissions technologies” and other GHG reduction activities as determined the EPA. Pursuant to the IRA, public power utilities and other tax-exempt entities are also given access to refundable direct payment tax credits. Among the energy-related tax credits that may be available if certain requirements are met are a clean hydrogen production tax credit, a biogas and energy storage credit, and enhancements to the credit for carbon capture.
The IRA also expands and extends the renewable electricity production tax credit and the investment tax credits for renewable energy sources.
Pursuant to an executive order issued by President Trump on January 20, 2025, the Trump Administration revoked various executive actions of the prior administration, including specifically those implementing the energy and infrastructure provisions of the IRA. The ultimate impact of this executive order on the programs implemented under the IRA is not yet known.
State Legislation and Regulatory Proceedings
A number of bills affecting the electric utility industry have been introduced or enacted by the California Legislature in recent years. In general, these bills reflect California climate policy developments by regulating GHG emissions and providing for greater investment in energy efficiency and environmentally friendly generation and storage alternatives, principally through more stringent RPS requirements and more aggressive emissions reduction programs to combat the effects of climate change.
Legislation enacted in recent years has also focused on addressing issues relating to wildfire risks and occurrences in California, including imposing certain requirements on electric utilities in connection with planning for and mitigating such occurrences and risks. Set forth below is a brief summary of certain of these bills and regulatory proceedings.
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California Climate Program. In September 2006, then-Governor Arnold Schwarzenegger signed into law Assembly Bill 32, the California Global Warming Solutions Act of 2006 (“AB 32” or the “Global Warming Solutions Act”). This law, which became effective on January 1, 2007, required CARB to adopt enforceable GHG emission limits and emission reduction measures in order to reduce GHG emissions from within the State to 1990 levels by 2020. In September 2016, then -Governor Jerry Brown signed into law Senate Bill 32 (“SB 32”), an amendment to the Global Warming Solutions Act, that requires CARB to take such actions to e nsure that statewide GHG emissions from within the State are reduced to at least 40% below 1990 levels by 2030.
SB 350, the Clean Energy and Pollution Reduction Act of 2015, signed into law by then-Governor Brown in October 2015, among other things, requir es CARB, in consultation with the California Public Utilities Commission (“CPUC”) and the CEC, to establish 2030 GHG emission targets for each electric utility in the State. SB 350 was superseded by SB 100, adopted in 2018, which set a 100% zero-carbon by 2045 requirement and accelerated RPS targets to 50% by 2025 and 60% by 2030. At present, these targets are non-binding, and primarily intended to help the State measure progress toward the 2030 statewide goal outlined in SB 32. The targets, however, are an input to the development of the Integrated Resource Plans that are required of the State’s utilities with over 700 GWh annual retail sales, which includes the City. See “– California Renewables Portfolio Standard” below.
The Global Warming Solutions Act established an annual mandatory reporting requirement for all investor-owned utilities (“IOUs”), POUs, and other load-serving entities (electric utilities providing energy to end -use customers) to inventory and report GHG emissions to CARB. It required CARB to adopt regulations for significant GHG emission sources and gave CARB the authority to enforce such regulations beginning in 2012. The City is complying with the applicable reporting requirements under the Global Warming Solutions Act.
In September 2022, Governor Newsom signed into law Assembly Bill 1279 (“AB 1279”), which became effective on January 1, 2023, and established additional GHG emission reduction goals. AB 1279 declares the policy of the State both to achieve net -zero GHG emissions as soon as possible, but no later than 2045, and achieve and maintain net negative GHG emissions thereafter, and to ensure that by 2045, Statewide anthropogenic GHG emissions are reduced to at least 85% below the 1990 levels. Under AB 1279, “net zero GHG emissions” means emissions of GHGs to the atmosphere are balanced by removals of GHG emissions over a period of time. The bill directs CARB to ensure that its scoping plan identifies and recommends measures to achieve these policy goals. The State Legislative Analyst’s Office is required to conduct an independent assessment of progress toward the bill’s objectives every two years and to make its findings available to the public.
In September 2022, Senate Bill 1020 (“SB 1020”), the Clean Energy, Jobs, and Affordabilit y Act of 2022, was signed into law. Under SB 100, it is the policy of the state that eligible renewable energy resources and zero -carbon resources supply 100% of all retail sales of electricity to California end -use customers and 100% of electricity procur ed to serve all state agencies by December 31, 2045. SB 1020 revised the state policy to provide that eligible renewable energy resources and zero -carbon resources supply 90% of all retail sales of electricity to California end-use customers by December 31, 2035, 95% of by December 31, 2040, 100% by December 31, 2045, and 100% of electricity procured to serve all state agencies by December 31, 2035, as specified.
Cap-and-Trade Regulations. CARB has implemented the Global Warming Solutions Act through a series of regulations (collectively referred to as the “Cap-and-Trade Regulations”) that imposed declining aggregate emissions limitations on entities in California that meet minimum reporting thresholds. The Cap- and-Trade Regulations require all regulated entities, including the City, to report annual GHG emissions and to obtain and submit to CARB compliance instruments (allowances and/or offsets) that represent GHG Packet Pg. 312
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emissions related to its industrial processes within the State. For electric utilities, thi s includes generation and GHG emissions associated with imported electricity from out -of-state resources. Like other electric utilities, the City receives an administrative allocation of allowances for compliance. Entities that emit GHGs at levels above th ose for which they receive administrative allocations, if any, must purchase the additional allowances they require at quarterly CARB auctions or from other covered entities with surplus allowances.
In July 2017, then-Governor Brown signed into law Assembly Bill 398 (“AB 398”), extending the Cap-and-Trade Regulations from 2021 to 2030. The bill passed both chambers with a 2/3 supermajority vote, which protects the legislation from certain legal challenges. Under AB 398, CARB was directed to address the foll owing: establish a price ceiling, offer non -tradeable allowances at two price containment points below the price ceiling, transfer current vintages unsold for more than 24 months to the allowance price containment reserve, evaluate and address allowance over-allocation concerns, set industry assistance factors for allowance allocation, and establish allowance banking rules. Under AB 398, CARB was directed to include cost containment provisions to keep allowance prices from rising too high and pushing business expansion outside of the state (referred to as “leakage”). AB 398 was passed in conjunction with AB 617, which strengthens the monitoring of criteria air pollutants and toxic air contaminants in local communities.
Amendments to the Cap -and-Trade Regulations to reflect the requirements of AB 398 were adopted by CARB and went into effect on April 1, 2019.
At this time, the City is unable to predict the long-term impacts of the Cap-and-Trade Regulations on the City’s Electric System, on the electric utility industry generally, or whether any additional changes to the adopted program will be made. Since the advent of the cap -and-trade program in 2012, regulations by CARB have provided the electric sector, including the City on behalf of its ratepayers, with sufficient allocated GHG allowances or credits to cover existing operations in meeting retail load obligations. The City may bank allocated allowances in its compliance account to satisfy a portion of its ongoing compliance obligations. The City can buy or sell allowances in the quarterly auctions or on the bilateral market to meet its additional compliance obligations. Currently, the City is sufficiently positioned for compliance.
CARB is in the process of developing the 2024 amendments to the Cap -and-Trade Regulations.
The administrative record commencement date for such amendments occurred on February 13, 2023. The scope of the potential amendments to be considered by CARB includes, among other things, using an updated integrated energy forecast to adjust allowance allocations through 2030, reducing the total number of budgeted allowances starting in 2026, and requiring POUs to consign all allocated allowances to auction (similar to investor-owned utilities). The City could be adversely affected in the future if its GHG emissions exceed its allocated allowances, which would require additional compliance instruments to be purchased from the market to meet retail load compliance obligations. CARB has indicated that it expects to make the formal rulemaking pr oposal available for public comment in early 2025. Assuming that the formal rule amendments package is posted in early 2025, the amendments are anticipated to take effect starting in 2026.
Although the direction CARB will take and the extent of the regulat ory changes remain uncertain, the potential impact on the Electric System could reach up to $20 million over the four-year period from 2026 to 2030.
GHG Emissions Performance Standard and Financial Commitment Limits . Senate Bill 1368 (“SB 1368”) became effective as law on January 1, 2007. SB 1368 provided for an emission performance standard (“EPS”) restricting new investments in baseload electric generating resources exceeding a specified rate of GHG emissions. SB 1368 allows the CEC to establish a regulatory framework to enforce the EPS for POUs. Pursuant to SB 1368, the CEC adopted a GHG EPS for electric generating facilities of 1,100 pounds of CO2 per MWh for “covered procurements” by POUs. SB 1368 also prohibits POUs from making any “long -term financial commitment” in connection with “baseload generation” that does not satisfy the EPS. Generally, a “long -term financial commitment” is any new or renewed power purchase Packet Pg. 313
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agreement with a term of five years or more, the purchase of an interest in a new power plant, or any investment (other than routine maintenance) in an existing power plant that extends the life of the plant by more than five years or results in an increase in its rated capacity. “Baseload generation” means a power plant that is intended to operate at an annualized capacity factor of 60% or more.
As modified, the EPS regulations require a POU to post a public meeting notice at which its governing board will consider any expenditure over $2.5 million to meet environmental regulatory requirements at a non-EPS-compliant baseload facility. In addition, each POU is required to file an annual notice identifying all investments over $2.5 million that it anticipates making during the subsequent 12 months on non-EPS-compliant baseload facilities to comply with environmental regulatory requirements.
This requirement is waived for any POU that has entered into a binding agreement to divest within five years of all baseload facilities exceeding the EPS. CEC staff has confirmed that the $2.5 million threshold applies to an individual investment by each utility, and not the combined investment of all participants in a project.
Any future procurement or investment by the City in a baseload generating resource of greater than 10 MW or with a term of five years o r more (or extending the life of an existing plant by more than five years) will be subject to the requirements of SB 1368.
Energy Procurement and Efficiency Reporting . Senate Bill 1037 (“SB 1037”) was signed into law by then-Governor Schwarzenegger in September 2005. It requires that each POU, including the City, first acquire all available energy efficiency, demand reduction, and renewable resources that are cost - effective, reliable, and feasible prior to procuring new energy generation resources. SB 1037 also requires each POU to report annually to its customers and to the CEC its investment in energy efficiency and demand reduction programs. The City is complying with these ongoing reporting requirements.
Further, Assembly Bill 2021 (“AB 2021”), signed into law by then-Governor Schwarzenegger in September 2006, requires that POUs establish, report, and explain the basis of the annual energy efficiency and demand reduction targets by June 1, 2007, and every three years thereafter for a ten -year horizon. A subsequent amendment, Assembly Bill 2227, extended the reporting timeframe from three to four years.
The City is complying with these ongoing reporting requirements. The information obtained from the POUs is being used by the CEC to present progress made by the State to double energy efficiency savings in electricity and natural gas final end uses by 2030, to the extent doing so is cost-effective, feasible, and does not adversely impact public health and safety, as prescribed in SB 350.
California Renewables Portfolio Standard . California’s legislature and executive branch have been active in promoting increasingly stringent renewable energy procurement requirements since 2002.
Early efforts established a renewables portfolio standard (RPS) of 20% of renewable electricity generation by 2017. Since then, both legislative and executive branch initiatives have raised that standard in multiple phases.
SBX1-2, the California Renewable Energy Resources Act, was signed into law by then -Governor Brown in Apr il 2011. SBX1 -2 required each POU to adopt and implement a renewable energy resource procurement plan and establish targets for specified compliance periods for the procurement of at least the following amounts of electricity products from eligible renewab le energy resources (which could include RECs) as a proportion of total kilowatt hours sold to the utility’s retail end-use customers: (i) over the 2011- 2013 compliance period, an average of 20% of retail sales from January 1, 2011 to December 31, 2013, inclusive; (ii) over the 2014-2016 compliance period, a total equal to 20% of 2014 retail sales, 20% of 2015 retail sales, and 25% of 2016 retail sales; (iii) over the 2017-2020 compliance period, a total equal to 27% of 2017 retail sales, 29% of 2018 retail sales, 31% of 2019 retail sales, and 33% of 2020 retail sales; and (iv) for 2021 and each subsequent year, 33% of retail sales for the applicable year. The governing boards Packet Pg. 314
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of POUs are responsible for implementing the requirements of SBX1 -2, rather than t he CPUC, as is the case for the IOUs. In addition, the CEC was given certain enforcement authority for POUs and CARB was given the authority to set penalties. The CEC developed detailed rules to implement SBX1 -2, and has adopted regulations for the enforce ment of the RPS program requirements for POUs, which regulations have been subsequently amended from time to time.
SB 350, the Clean Energy and Pollution Reduction Act of 2015, as enacted, establishes an RPS target of 50% by December 31, 2030, for the amou nt of electricity generated and sold to retail customers from eligible renewable energy resources for retail sellers and POUs, including interim targets of (i) 40% of retail sales from eligible renewable energy resources by December 31, 2024; (ii) 45% of retail sales from eligible renewable energy resources by December 31, 2027; and (iii) 50% of retail sales from eligible renewable energy resources by December 31, 2030.
SB 100, signed into law in 2018, supersedes and builds upon the goals of SB 350 by raisi ng the RPS target to 60% by December 31, 2030, and establishes a new policy that all electricity in California be carbon-free by 2045. This policy effectively accelerates and expands the renewable energy targets, requiring retail sellers and POUs to achiev e 60% by December 31, 2030. The passage of SB 100 significantly increases the compliance requirements under the RPS and reinforces the long -term commitment to achieving a carbon-free electricity grid statewide.
SB 350 requires each retail seller of electri city (including IOUs, most POUs above a certain size threshold, community choice aggregators, and energy service providers) to provide a renewable energy procurement plan on an annual basis, and all POUs with demand greater than 700 gigawatt hours to develop an integrated resource plan (“IRP”) at least once every five years, commencing no later than January 1, 2019. The City is subject to this requirement. As required in the statute, all IRPs are to be submitted to the CEC, including information outlined in the CEC’s POU IRP Guidelines. The City filed its first IRP with the CEC in April 2019. In accordance with SB 350, the City’s 2024 IRP was approved by the City Council in November 2023 and filed with the CEC by April 30, 2024.
In December 2020, the CEC ado pted regulations to update its RPS enforcement procedures for POUs, including to update regulations amended by both SB 350 and SB 100, among other enacted bills.
This includes implementing a provision relating to the long-term procurement of renewable resources which requires, beginning January 1, 2021, that at least 65% of renewable procurement must be for a duration of 10 years or more. The regulations implement the new RPS procurement requirements for the compliance periods between 2021 and 2030, establi sh soft procurement targets for the intervening years of the compliance periods to demonstrate reasonable progress in meeting the RPS procurement target for the compliance periods, and establish three-year compliance periods beginning after 2030. The regulations also define requirements for 10-year procurement contracts for purposes of satisfying the long-term procurement requirement.
Senate Bill 1020 (“SB 1020”), the Clean Energy, Jobs, and Affordability Act of 2022, was signed into law by Governor Newsom in September 2022 and became effective on January 1, 2023. SB 1020 revises SB 100’s State policy on eligible renewable energy resources and zero -carbon resources supply, and establishes that it is the policy of the State that eligible renewable energy reso urces and zero-carbon resources supply (i) 90% of all retail sales of electricity to California end-use customers by December 31, 2035, (ii) 95% of all retail sales of electricity to California end -use customers by December 31, 2040, (iii) 100% of all reta il sales of electricity to California end -use customers by December 31, 2045, and (iv) 100% of electricity procured to serve all state agencies by December 31, 2035.
Legislation Relating to Wildfires; Related Risks. Senate Bill 1028 (“SB 1028”) was signed into law by then -Governor Brown in September 2016. SB 1028 requires that each POU and each electric Packet Pg. 315
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cooperative in the State construct, maintain, and operate its electrical lines and equipment in a manner that will minimize the risk of catastrophic wildfi re posed by those electrical lines and equipment. SB 1028 required the governing board of each POU to determine, based on historical fire data and local conditions, and in consultation with the fire departments or other entities responsible for the control of wildfires within the geographical area where the utility’s overhead electrical lines and equipment are located, whether any portion of that geographical area has a significant risk of wildfire resulting from those electrical lines and equipment, and if so, to present for its governing board approval wildfire mitigation measures the utility intends to undertake to minimize the risk of its overhead electrical lines and equipment causing a catastrophic wildfire.
SB 901 was signed into law by then-Governor Brown in September 2018. SB 901 amends certain provisions of SB 1028 requiring POUs and electric cooperatives to prepare wildfire mitigation measures if the utilities’ overhead electrical lines and equipment are located in an area that has a significant r isk of wildfire resulting from those electrical lines and equipment. Under SB 901, each POU or electric cooperative is required to prepare before January 1, 2020 and annually thereafter, a wildfire mitigation plan.
SB 901 requires specified information and elements to be considered as necessary, at minimum, in the wildfire mitigation plan. The POU or electric cooperative is required to present each wildfire mitigation plan in an appropriately noticed public meeting, and to accept comments on its wildfire mi tigation plan from the public, other local and state agencies, and interested parties. In addition, SB 901 requires the POU or electric cooperative to contract with a qualified independent evaluator with experience in assessing the safe operation of electr ical infrastructure to review and assess the comprehensiveness of its wildfire mitigation plan. The report of the independent evaluator is to be made available to the public and to be presented at a public meeting of the POU’s governing board. In accordanc e with the requirements of SB 901 and subsequent legislation (AB 1054 discussed below), the City’s initial wildfire mitigation plan was approved by the City Council in December 2019. The review and assessment of the City’s wildfire mitigation plan by an in dependent evaluator was subsequently completed. In accordance with the requirements of SB 901, the City’s wildfire mitigation plan is updated annually, with comprehensive revisions and independent evaluator review occurring every three years. The City’s wildfire mitigation plan was most recently submitted to the City Council in May of 2024 for approval and submitted to the Wildfire Advisory Board in July of 2024. See also “THE ELECTRIC SYSTEM – Wildfire Mitigation Measures.” Assembly Bill 1054 (“AB 1054”) w as signed into law by Governor Newsom in July 2019. AB 1054 establishes a Wildfire Fund for IOUs to facilitate payment of eligible, uninsured third -party damage claims resulting from future catastrophic wildfires. Participation in the Wildfire Fund is exclusive to IOUs.
Each of the major IOUs in California are now participating in the in the Wildfire Fund. POUs, such as the City, are not eligible to participate in or receive funding for wildfire claims from the Wildfire Fund.
AB 1054 expands on the existing requirements for POUs established under SB 901 for wildfire mitigation plans. AB 1054 requires each POU, by July 1 of each year, to submit its wildfire mitigation plan to the then-newly created Wildfire Advisory Board for review and comment. Under AB 1054, the Wildfire Advisory Board is required to provide comments and an advisory opinion to each POU regarding the content and sufficiency of its plan and to make recommendations on the mitigation of wildfire risks. AB 1054 requires each POU to comprehensivel y revise its wildfire mitigation plan at least once every three years. The City has prepared and submitted wildfire mitigation plans in accordance with the provisions of SB 901 and AB 1054 as required.
A number of significant wildfires have occurred in California during the last several years. Under the doctrine of inverse condemnation (a legal concept that entitles property owners to just compensation if their private property is damaged by a public use), California courts have imposed liability on utilit ies in legal actions brought by private property holders for damages , where the inherent risks in the utility’s infrastructure, as deliberately designed, constructed or maintained, are determined to be a substantial cause Packet Pg. 316
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of damage to the property. Thus, if the facilities of a utility, such as its electric distribution and transmission lines, are determined to be the substantial cause of a fire, and the doctrine of inverse condemnation applies, the utility could be liable for damages without having been found negligent. In August 2019, in its decision in the case of City of Oroville v. Superior Court of Butte County, 7 Cal.5th 1091, 446 P.3d 304 (2019), involving damages related to sewage overflows from a city sewer system, the California Supreme Court held that to succeed on an inverse condemnation claim, a property owner must demonstrate that the property damage was the probable result or necessary effect of an inherent risk associated with the design, construction or maintenance of the relevant public impr ovement. SB 1028, SB 901 and AB 1054 do not address the existing legal doctrine relating to utilities’ liability for wildfires. How any future legislation addresses California’s inverse condemnation and “strict liability” issues for utilities in the contex t of wildfires in particular could be significant for the electric utility industry.
Impact of California Energy Market Developments on the City. The effect of the developments in the California energy markets described above on the City’s Electric System cannot be fully ascertained at this time. Also, volatility in energy prices in California may return due to a variety of factors that affect both the supply and demand for electric energy in the western United States. These factors include, but are not limited to, the adequacy of generation resources to meet peak demands at all times, the availability and cost of renewable energy, the impact of economy-wide GHG emission legislation and regulations, fuel costs and availability, weather effects on customer demand, the impact of climate change, wildfire mitigation and potential liability cost recovery, insurance costs, transmission congestion, the strength of the economy in California and surrounding states and levels of hydroelectric generation within the regi on (including the Pacific Northwest). This price volatility may contribute to greater volatility in the City’s revenues from the sale (and purchase) of electric energy and, therefore, could materially affect the City’s financial condition.
The City, individually and/or through joint powers agencies in which it participates, undertakes resource planning and risk management activities and manages its resource portfolio to mitigate such price volatility and spot market rate exposure. See “THE ELECTRIC SYSTEM.” Changing Laws and Requirements Generally
Electric utilities are subject to continuing environmental regulation. Federal, State and local standards and procedures which regulate the environmental impact of electric utilities are subject to change.
These ch anges may arise from continuing legislative, regulatory and judicial action regarding such standards and procedures. In addition, the election of new administrations, including the President of the United States, could impact substantially the current envi ronmental standards and regulations and other matters described herein. In light of the changing regulatory requirements and standards for electric utilities, there is no assurance that any facilities or projects of the City will remain subject to the laws and regulations currently in effect, will always be in compliance with future laws and regulations or will always be able to obtain all required operating permits. An inability to comply with environmental standards could result in, for example, additional capital expenditures, reduced operating levels or the shutdown of individual units not in compliance. Increased environmental laws and regulations may create certain barriers to new facility development, may require modification of existing facilities and may result in additional costs for affected resources.
In addition, on both the federal and State levels, legislation is introduced frequently addressing domestic energy policies and various environmental matters and impacts relating to energy, including the generation of energy using conventional and unconventional technologies. Issues raised in legislative proposals in recent years have included implementation of energy efficiency and renewable energy standards, addressing transmission planning, siting and cost allocation to support the construction of renewable energy facilities, cybersecurity legislation, climate change and the reduction or elimination of net carbon dioxide emission attributable to the electric grid and financial incentives that could provide grants and credits to municipal utilities to invest in renewable energy infrastructure. Congress has also Packet Pg. 317
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considered other bills relating to energy supplies and development (such as expedited permitting for natural gas drilling projects, reducing regulatory burdens, climate change and water quality). The City is unable to predict at this time whether any of these or other legislative proposals will be enacted into law or what the impact of any such proposals that may ultimately be enacted will be.
General Economic Conditions
The City’s costs are affected by numerous factors, many of which are macroeconomic industry variables that are beyond its control. Some of the recent factors include inflation, supply chain disruptions and delays, labor shortages and rising labor costs, and rising interest rates. More specifically, the rate of inflation increased during certain periods of recent years, increasing the price of fuel and commodities integral to the City’s Electric System operations. In response to ri sing inflation, the United States Federal Reserve increased interest rates a number of times from 2022 to 2023, which is expected to result in an increase to the City’s costs of capital so long as such inflationary pressures continue. The global economy has also faced supply chain shortages and delays in recent years. These issues may be further exacerbated by rising labor costs in the United States and global economic geopolitical crises. The occurrence of global events and macroeconomic factors and their impacts are difficult to predict but may have a material adverse effect on the Electric System’s results of operations and financial condition.
Cybersecurity Risks
The City like many other public and private entities and utilities, relies on computer and other digital networks and systems to conduct its operations, including operations of the Electric System. In connection with the use of such technology, the City and the Electric System are potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. United States government agencies have in the past issued warnings indicating that critical infrastructure sectors such as electric systems may be specific targets of cybersecurity threats .
Cybersecurity incidents could result from unintentional events, or from deliberate attacks by unauthorized entities or individuals attempting to gain access to the City’s digital networks and systems for the purposes of misappropriating assets or informa tion or causing operational disruption and damage. To mitigate the risk of business operations impact and/or damage from cybersecurity incidents or cyber -attacks, the City invests in multiple forms of cybersecurity and operational safeguards. Although the City has a variety of security measures and safeguards in place with respect to the Electric System (as described under “THE ELECTRIC SYSTEM – Cybersecurity Measures” above), no assurances can be given that any existing or additional safety and security me asures will prove adequate in the event that cyberattacks or military conflicts or terrorist activities, including cyber terrorism, are directed against the City’s systems technology or the assets of the Electric System. Cyberattacks are becoming more soph isticated and certain cyber incidents, such as surveillance, may remain undetected for an extended period. Attacks directed at critical electric sector operations could damage generation, transmission or distribution assets, cause operational malfunctions and outages, and result in costly recovery and remediation efforts. The costs of security measures or of remedying damage from security breaches could be greater than presently anticipated.
Global Health Emergencies
A pandemic, epidemic or outbreak of an infectious disease can have significant adverse health and financial impacts on global and local economies. For example, beginning in 2020, the COVID-19 pandemic negatively affected economic activity throughout the world, including the United States and the State of California. The initial impacts of stay-at home orders globally were unprecedented, with commerce, travel, asset values and financial markets experiencing disruptions worldwide. The City’s ability to provide electric service was not impaired as a result of the COVID-19 pandemic. The City’s Electric System is in a federally designated critical infrastructure sector and continued to operate throughout the COVID -19 pandemic.
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While the COVID-19 pandemic impacted the City in certain respects, the City did not experience a material adverse impact to the Electric System’s operations or its ability to meet its financial obligations as a result of the COVID -19 pandemic. To help mitigate the economic impact of COVID -19 and the related governmental regulations on its customers, the City implemented a suspension of the disconnection of electric services for non -payment of utility bills beginning in March 2020. Normal practices for non - payment resumed in late summer 2021. However, while the declarations of COVID -19 as a public health emergency have been lifted, future pandemics and other widespread public health emergencies can and do arise from time to time. The City cannot predict whether another national or localized outbreak of highly contagious or epidemic disease in the future could negatively impact the Electric System’s operations and finances and/or the economy of its service area.
Other Factors
The electric utility industry in general has been, or in the future may be, affected by a number of other factors which could impact the financial condition and competitiveness of many electric utilities and the level of utilization of generating and transmission facilities. Such factors (a number of which are further discussed elsewhere in the this Official State ment) include, among others, (a) effects of compliance with rapidly changing environmental, safety, licensing, regulatory and legislative requirements other than those described above; (b) changes resulting from conservation and demand -side management programs on the timing and use of electric energy; (c) effects on the integration and reliability of power supply from the increased usage of renewables; (d) changes resulting from a national energy policy; (e) effects of competition from other electric utilit ies (including increased competition resulting from a movement to allow direct access or expanded community choice aggregation or from mergers, acquisitions, and “strategic alliances” of competing electric and natural gas utilities and from competitors tra nsmitting less expensive electricity from much greater distances over an interconnected system) and new methods of, and new facilities for, producing low -cost electricity; (f) the repeal of certain federal statutes that would have the effect of increasing the competitiveness of many IOUs; (g) increased competition from independent power producers and marketers, brokers and federal power marketing agencies; (h) “self-generation” or “distributed generation” (such as microturbines, fuel cells and solar install ations) by industrial and commercial customers and others; (i) issues relating to the ability to issue tax-exempt obligations, including restrictions on the ability to sell to nongovernmental entities electricity from generation projects and transmission service from transmission line projects financed with outstanding tax -exempt obligations; (j) wildfires and potential liabilities of electric utilities in connection therewith; (k) effects of inflation on the operating and maintenance costs of an electric utility and its facilities; (l) changes from projected future load requirements; (m) increases in costs and uncertain availability of capital; (n) shifts in the availability and relative costs of different fuels (including the cost of natural gas); (o) changes in the electric market structure for neighboring electric grids, such as the energy imbalance market operated by the CAISO; (p) sudden and dramatic increases in the price of energy purchased on the open market that may occur in times of high peak deman d in an area of the country experiencing such high peak demand, such as has occurred in the past in California; (q) issues relating to risk management procedures and practices with respect to, among other things, the purchase and sale of natural gas, energ y and transmission capacity; (r) other legislative changes, voter initiatives, referenda and statewide propositions; (s) effects of the changes in the economy, population and demand of customers within a utility’s service area; (t) effects of possible manipulation of the electric markets; (u) acts of terrorism or cyber -terrorism impacting a utility and/or significant load customers; (v) impacts of a pandemic or the outbreak of another infectious disease impacting the global, national or local economy or a utility’s service area; or (w) effects of and regulatory responses to climate change; (x) natural disasters or other physical calamities, including, but not limited to, wildfires, earthquakes, droughts, severe weather and floods; and (y) adverse impacts to the market for insurance relating to wildfires and other calamities, leading to higher costs or prohibitively expensive coverage, or limited or unavailability of coverage for certain types of risk. Any of these factors (as well as Packet Pg. 319
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other factors) could have an adverse effect on the financial condition of any given electric utility, including the City’s Electric System, and likely will affect individual utilities in different ways.
CONSTITUTIONAL LIMITATIONS IN CALIFORNIA
AFFECTING FEES AND CHARGES
Proposition 62
A statutory initiative (“Proposition 62”) was adopted by the voters voting in the State of California at the November 4, 1986 General Election which (1) requires that any tax for general governmental purposes imposed by local governmental entities be approved by resolution or ordinance adopted by two - thirds vote of the governmental agency’s legislative body and by a majority of the electorate of the governmental entity, (2) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two -thirds vote of the voters within that jurisdiction, (3) restricts the use of revenues from a special tax to the purposes or for the service for which the special ta x was imposed, (4) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA, (5) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local go vernmental entities and (6) requires that any tax imposed by a local governmental entity on or after March 1, 1985 be ratified by a majority vote of the electorate within two years of the adoption of the initiative or be terminated by November 15, 1988.
Proposition 218
Proposition 218, a State ballot initiative known as the “Right to Vote on Taxes Act,” was approved by the voters of the State of California on November 5, 1996. Proposition 218 added Articles XIIIC and XIIID to the State Constitution. Article XIIIC imposes a majority voter approval requirement on local governments (including the City) with respect to taxes for general purposes, and a two-thirds voter approval requirement with respect to taxes for special purposes. Article XIIID creates additio nal requirements for the imposition by most local governments of general taxes, special taxes, assessments and “property - related” fees and charges. Article XIIID explicitly exempts fees for the provision of electric service from the provisions of such article.
Article XIIIC expressly extends the people’s initiative power to the reduction or repeal of local taxes, assessments, and fees and charges imposed prior to its effective date (November 1996). The California Supreme Court held in Bighorn-Desert View Water Agency v. Verjil, 39 Cal.4th 205 (2006) that, under Article XIIIC, local voters by initiative may reduce a public agency’s water rates and delivery charges, as those are property-related fees or charges within the meaning of Article XIIID, and noted th at the initiative power described in Article XIIIC may extend to a broader category of fees and charges than the property-related fees and charges governed by Article XIIID. Moreover, in the case of Bock v. City Council of Lompoc , 109 Cal.App.3d 52 (1980), the Court of Appeal determined that an electric rate ordinance was not subject to the same constitutional restrictions that are applied to the use of the initiative process for tax measures so as to render it an improper subject of the initiative process. Thus, electric service charges (which are expressly exempted from the provisions of Article XIIID) may be subject to the initiative provisions of Article XIIIC, thereby subjecting such fees and charges to reduction by the electorate. The City believes that even if the electric rates of the City are subject to the initiative power, the electorate of the City would be precluded from reducing electric rates and charges in a manner adversely affecting the payment of the 2025A Installment Sale Payments securing the 2025A Bonds by virtue of the “impairment of contracts clause” of the United States and California Constitutions.
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Proposition 26
The California electorate adopted Proposition 26 at the November 2, 2010 election, amending Article XIIIC of the California Constitution. Proposition 26 was designed to supplement tax limitations California voters adopted when they approved Proposition 13 in 1978 and Proposition 218 in 1996.
Proposition 26 applies by its terms to any levy, charge or exaction imposed, increased or extended by a local government on or after November 3, 2010. Proposition 26 deems any such levy, charge or fee to be a “tax,” requiring voter approval unless it comes within one of the listed exceptions or further exceptions recognized by the courts. P roposition 26 expressly excludes from its definition of a “tax,” among other things, a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.
Proposition 26 is subject to interpretation by California courts. A number of lawsuits have been filed against public agencies in California relating to electric utility fund transfer s. In 2011, two lawsuits were filed against the City challenging the implementation of the City’s “payment in lieu of taxes” (or “PILOT”) transfer from the Electric System to the City’s general fund without voter approval. The City’s PILOT is designed to be equivalent to the ad valorem taxes the Electric System would have had to pay if such electric utility were privately owned. The suits alleged that the PILOT was passed through to the City’s Electric System customers as part of the rates and charges for e lectric service in excess of the reasonable costs to the City of providing electric service. The Superior Court of the State of California, Shasta County, consolidated the two lawsuits and ruled in favor of the City on July 13, 2012. Following an appeal by the plaintiffs, on February 19, 2015, the Court of Appeal of the State of California, Third Appellate Division, ruled in Citizens for Fair REU Rates v. City of Redding , holding that the City’s PILOT constituted an unconstitutional “tax” under Proposition 26 for which the City was required to secure voter approval unless the City proved that the amount collected was necessary to cover the reasonable costs to the City of providing electric service. In addition, the Court of Appeal noted that Proposition 26 h ad no retrospective effect as to local taxes that existed prior to November 3, 2010, but found that since the PILOT was subject to the City Council’s recurring discretion, the PILOT did not escape the purview of Proposition 26. On March 2, 2015, the City filed a Petition for Review with the California Supreme Court which was granted.
On August 27, 2018, t he California Supreme Court rendered its decision reversing the judgment of the Court of Appeal. The California Supreme Court determined that the budgetary transfer from the City electric utility to the City’s general fund, calculated by using the PILOT, itself is not the type of exaction that is subject to Article XIIIC of the California Constitution. The court reasoned that it is only the City’s electric u tility rate, not the PILOT, that is imposed on customers for electric service. The California Supreme Court concluded that the challenged rate did not exceed the reasonable costs of providing electric service, and therefore did not constitute a tax.
Due to evolving case law and the uncertainties regarding potential legislative interpretations of Proposition 26, the City is unable to predict at this time how Proposition 26 will ultimately be interpreted by the courts in the context of any particular electric utility rates or what the ultimate impact of Proposition 26 will be.
Other Initiatives
Articles XIIIC and XIIID and Propositions 62, 218 and 26 were adopted as measures that qualified for the ballot pursuant to California’s initiative process. From time t o time, including presently, other initiatives have been, and could be, proposed, and if qualified for the ballot and approved by voters, could affect the City’s Electric System revenues or operations. Neither the nature and impact of these measures nor the likelihood of qualification for ballot or passage can be anticipated by the City.
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TAX MATTERS
In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority, based upon an analysis of existing laws, regulations, rulings and court dec isions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the 2025A Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”) and is exempt from State of California personal income taxes. Bond Counsel is of the further opinion that interest on the 2025A Bonds is not a specific preference item for purposes of the federal individual alternative minimum tax. Bond Counsel observes that interest on the 2025A Bonds included in adjusted financial statement income of certain corporations is not excluded from the federal corporate alternative minimum tax. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the 2025A Bonds. A complete copy of the proposed form of opinion of Bond Counsel is set forth in Appendix F hereto.
To the extent the issue price of any maturity of the 2025A Bonds is less than the amount to be paid at maturity of such 2025A Bonds (excluding amounts stated to be interest and payable at least annually over the term of such 2025A Bonds), the difference constitutes “original issue discount,” the accrual of which, to the extent properly allocable to each beneficial owner thereof, is treated as interest on the 2025A Bonds which is excluded from gross income for federal income tax purposes and exempt from State of California personal income taxe s. For this purpose, the issue price of a particular maturity of the 2025A Bonds is the first price at which a substantial amount of such maturity of the 2025A Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the 2025A Bonds accrues daily over the term to maturity of such 2025A Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such 2025A Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or pa yment on maturity) of such 2025A Bonds.
Beneficial owners of the 2025A Bond s should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of beneficial owners who do not purchase such 2025A Bonds in the original offering to the public at the first price at which a substantial amount of such 2025A Bonds is sold to the public. 2025A Bonds purchased, whether at original issuance or otherwise, for an amount higher than their principal amount payable at maturity (or, in some cases, at their earlier call date) (“Premium 2025A Bonds”) will be treated as having amortizable bond premium. No dedu ction is allowable for the amortizable bond premium in the case of bonds, like the Premium 2025A Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax -exempt interest received, and a beneficial owner’s basis in a Premium 2025A Bond, will be reduced by the amount of amortizable bond premium properly allocable to such beneficial owner. Beneficial owners of Premium 2025A Bonds should consult their own tax advisors with respect to the proper treat ment of amortizable bond premium in their particular circumstances.
The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the 2025A Bonds. The Authority and the City have made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the 2025A Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the 2025A Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the 2025A Bonds. The opinion of Bon d Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not Packet Pg. 322
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undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any oth er matters coming to Bond Counsel’s attention after the date of issuance of the 2025A Bonds may adversely affect the value of, or the tax status of interest on, the 2025A Bonds. Accordingly, the opinion of Bond Counsel is not intended to, and may not, be r elied upon in connection with any such actions, events or matters.
Although Bond Counsel is of the opinion that interest on the 2025A Bonds is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the 2025A Bonds may otherwise affect a beneficial owner’s federal, state or local tax liability. The nature and extent of these other tax consequences dep ends upon the particular tax status of the beneficial owner or the beneficial owner’s other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences.
Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the 2025A Bonds to be subject, directly or indirectly, in whole or in part, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the 2025A Bonds. Prospective purchasers of the 2025A Bonds should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, as to wh ich Bond Counsel expresses no opinion.
The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment of the 2025A Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service (“IRS”) or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the Authority or the City, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The Authority and the City have covenanted, however, to comply with the requirements of the Code.
Bond Counsel’s engagement with respect to the 2025A Bonds ends with the issuance of the 2025A Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Authority, the City or the beneficial owners regarding the tax -exempt status of the 2025A Bond s in the event of an audit examination by the IRS. Under current procedures, beneficial owners would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of 2025A Bonds is difficult, obtaining an independent review of IRS positions with which the Authority and/or the City legitimately disagree may not be practicable. Any action of the IRS, including but not limited to selection of the 2025A Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues, may affect the market price for, or the marketability of, the 2025A Bonds, and may cause the Authority, the City or the beneficial owners to incur significant expense.
Payments on the 2025A Bonds generally will be subject to U.S. information reporting and possibly to “backup withholding.” Under Section 3406 of the Code and applicable U.S. Treasury Regulations issued thereunder, a non-corporate beneficial owner of 2025A Bonds may be subject to backup withholding with respect to “reportable payments,” which include interest paid on the 2025A Bonds and the gross proceeds of a sale, exchange, redemption, retirement or other disposition of the 2025A Bonds. The payor will be required to deduct and withhold the prescribed amounts if (i) the payee fails to furnish a U.S. taxpayer identification number (“TIN”) to the payor in the manner required, (ii) the IRS notifies the payor that the Packet Pg. 323
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TIN furnished by the payee is incorrect, (iii) there has been a “notified payee underreporting” described in Section 3406(c) of the Code or (iv) the payee fails to certify under penalty of perjury that the payee is not subject to withholding under Section 3406(a)(1)(C) of the Code. Amounts withheld u nder the backup withholding rules may be refunded or credited against a beneficial owner’s federal income tax liability, if any, provided that the required information is timely furnished to the IRS. Certain beneficial owners (including among others, corpo rations and certain tax -exempt organizations) are not subject to backup withholding. The failure to comply with the backup withholding rules may result in the imposition of penalties by the IRS.
LITIGATION
There is no action, suit or proceeding known to be pending or threatened, restraining or enjoining the issuance or delivery of the 2025A Bonds, the Trust Agreement, the 2025A Installment Sale Agreement or the Continuing Disclosure Agreement, or in any way contesting or affecting the validity of the foregoing or any proceedings of the Authority or the City taken with respect to any of the foregoing.
To the best knowledge of the Authority and the City, there is no litigation pending or threatened, questioning the corporate existence of the Authority or the City, or the title of the officers of the Authority or the City to their respective offices, or the power and authority of the Authority or the City to execute and deliver the 2025A Bonds, the Trust Agreement, the 2025A Installment Sale Agreement or the Continuing Disclosure Agreement, as applicable, or of the City to make the 2025A Installment Sale Payments under the 2025A Installment Sale Agreement. To the best knowledge of the Authority and the City, there is no litigation pending or threatened, questioni ng or affecting in any material respect any of the financial information with respect to the City’s Electric System contained in this Official Statement.
At any given time, including the present, there are certain other claims and disputes, including those currently in litigation, that arise in the normal course of the City’s activities. Such matters could, if determined adversely to the City, affect expenditures by the City, and in some cases, its Electric System revenues. See also “THE ELECTRIC SYSTEM – Litigation Affecting the Electric System.” The City’s management and its City Attorney are of the opinion that no pending actions are likely to have a material adverse effect on the City’s ability to make payments under the 2025A Installment Sale Agreement.
RATING
Fitch Ratings (“Fitch”) has assigned the 2025A Bonds the rating of “____.” Fitch’s rating outlook with respect to the 2025A Bonds is “___________.” No application has been made to any other rating agency for the purpose of obtaining any additional rating on the 2025A Bonds. Such rating expresses only the view of the rating agency and an explanation of the significance of such ratin g may be obtained only from such rating agency as follows: Fitch Ratings, 33 Whitehall Street, New York, New York 10004.
Generally, a rating agency bases its credit rating on the information and materials furnished to it (which may include information and material from the City which is not included in this Official Statement) and on investigations, studies and assumptions of its own. A securities rating is not a recommendation to buy, sell or hold securities. There is no assurance that such rating (or any rating outlook ascribed thereto) will continue for any given period of time or that it will not be revised or withdrawn entirely if, in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of such rating could have an adverse effect on the market price of the 2025A Bonds.
CONTINUING DISCLOSURE
The City has covenanted for the benefit of the holders and beneficial owners of the 2025A Bonds to provide in an Annual Report certain financial information and operating data relating to the City and the Packet Pg. 324
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Electric System by not later than 270 days following the end of the City’s Fiscal Year (which Fiscal Year presently ends June 30), commencing with the report for the 202 4-25 Fiscal Year, and to provide notices of the occurrence of certain enumerated events. The Annual Report and notices of enumerated events will be provided by or on behalf of the City to the Municipal Securities Rulemaking Board through the Electronic Municipal Market Access (EMMA) system. The specific nature of the information to be contained in the Annual Report and the notice of specified events is summarized in “APPENDIX E – PROPOSED FORM OF CONTINUING DISCLOSURE AGREEMENT.” These covenants have been made in order to assist the Underwriter in complying with the Rule.
In the last five years, certain deficiencies in performance by the City , including the City, as the Successor Agency to the Redding Redevelopment Agency (the “Successor Agency”) under their respective continuing disclosure undertakings have occurred. In that period, annual report information deficiencies are noted for each of the fiscal years identified below, including with respect to various items of the financial and operating data information specified under the continuing disclosure undertakings for the: (i) Redding Joint Powers Financing Authority Water and Wastewater Refunding Revenue Bonds , 2013 Series A and City of Redding Wastewater System Refunding Revenue Bonds, Series 2020 (Fiscal Years 2020 -2022); (ii) Redding Joint Powers Financing Authority Lease Revenue Bonds (2019 Capital Projects), Series 2019A (Fiscal Years 2019-2022); and (iii) Redding Redevelopment Agency Canby-Hilltop-Cypress Project Area Housing Set-Aside Tax Allocation Bonds, 2001 Series B (Fiscal Years 2019 and 2020). In addition, with respect to the Redding Joint Powers Financing Authority Water and Wastewater Refunding Revenue Bonds, 2013 Series A and City of Redding Wastewater System Refunding Revenue Bonds, Series 2020, the City did not timely file its annual report with respect to Fiscal Year 2019-20, and did not file notice of such failure to timely file, but made a filing of such annual report on January 6, 2022, approximately 10 months late. With respect to the Transmission Agency of Northern California Cali fornia-Oregon Transmission Project Revenue Refunding Bonds, 2016 Series A, the City’s audited financial statements and financial and operating data information were not properly linked to two of the CUSIPs for those bonds for Fiscal Year 2023. Also in the last five-years, on October 7, 2021 and June 29, 2023, ratings upgrades were made on the Successor Agency’s outstanding tax allocation bonds, for which the Successor Agency failed to make event notices. The City and the Successor Agency, respectively, have made the necessary filings, posted to EMMA, to address the deficiencies, including notices of the failures to timely make such filings, for all currently outstanding bonds identified above.
UNDERWRITING
The 2025A Bond s are being purchased for reoffering by J.P. Morgan Securities LLC (the “Underwriter”) pursuant to a bond purchase contract (the “Purchase Contract”), by and between the Underwriter and the City. The Underwriter has agreed, subject to certain conditions, to purchase the 2025A Bonds at a price of $___________ (representing the $__________ aggregate principal amount of the 2025A Bonds [plus/less] $_________ original issue [premium/discount] and less $__________ of Underwriter’ s discount). The Purchase Contrac t for the 2025A Bond s provides that the Underwriter is obligated to purchase all of the 2025A Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the Purchase Contract.
The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the initial public offering prices stated on the inside cover page hereof. The offering prices may be changed from time to time by the Underwriter.
The following information h as been provided by the Underwriter for inclusion in this Official Statement: J.P. Morgan Securities LLC (“JPMS”), the Underwriter of the 2025A Bonds, has entered into negotiated dealer agreements (each, a “Dealer Agreement”) with each of Charles Schwab & Co., Inc. (“CS&Co.”) and LPL Financial LLC (“LPL”) for the retail distribution of certain securities offerings at the Packet Pg. 325
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original issue prices. Pursuant to each Dealer Agreement, each of CS&Co. and LPL may purchase 2025A Bonds from JPMS at the original issue price less a negotiated portion of the selling concession applicable to any 2025A Bonds that such firm sells.
CERTAIN RELATIONSHIPS
The Underwriter and its affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The Underwriter and its affiliates have, from time to time, performed, and may in the futu re perform, various investment banking services for the City, for which they received or will receive customary fees and expenses.
In the ordinary course of their various business activities, the Underwriter and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the Authority and the City.
CERTAIN LEGAL MATTERS
The validity of the 2025A Bonds and certain other legal matters are subject to the approving opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority. A complete copy of the proposed form of Bond Counsel opinion is contained in Appendix F hereto. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement and expresses no opinion with respect thereto. Stradling Yocca Carlson & Rauth LLP is serving as Disclosure Counsel to the City in connection with the 2025A Bonds. Certain legal matters will also be passed upon for the Authority and the City by the City Attorney of the City of Redding, and for the Underwriter by Norton Rose Fulbright US LLP. Bond Counsel and Disclosure Counsel will receive compensation that is contingent upon the issuance and delivery of the 2025A Bonds.
MUNICIPAL ADVISOR
The City has retained PFM Financial Advisors LLC, Los Angeles, California, as municipal advisor (the “Municipal Advisor”) in connection with the issuance of the 2025A Bonds. The Municipal Advisor has not undertaken to make an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. The Municipal Advisor is an independent financial advi sory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. The payment of certain fees of the Municipal Advisor is contingent upon the issuance and delivery of the 2025A Bonds.
AUDITED FINANCIAL STATEMENTS
The City’s A nnual Comprehensive Financial Report for the Fiscal Year ended June 30, 20 24, including its Basic Financial Statements, are included in Appendix A to this Official Statement. The City’s Basic Financial Statements as of and for year ended June 30, 2024 have been audited by CliftonLarsonAllen LLP, independent accountants (the “Independent Accountants”) as stated in their report appearing in Appendix A. The 2025A Installment Sale Payments are special obligations of the City payable solely from the Net Revenues of the City’s Electric System and moneys in the City’s Electric Revenue Fund.
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The financial statements of the City are public documents and the City has not requested nor did the City obtain permission from the Indepe ndent Accountants to include the Basic Financial Statements and their report in an Appendix to this Official Statement. Accordingly, the Independent Accountants have made no representation in connection with inclusion of the audit herein that there has bee n no material change in the financial condition of the City or the Electric System since the most recent audit was concluded. The Independent Accountants have not been engaged to perform and have not performed, since the date of its report included in Appendix A, any procedures on the financial statements addressed in that report. The Independent Accountants also have not performed any procedures relating to this Official Statement.
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EXECUTION AND DELIVERY
The execution and delivery of this Official Statement has been duly authorized by the Authority and the City.
REDDING JOINT POWERS
FINANCING AUTHORITY
By
Chair
CITY OF REDDING
By
City Manager
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APPENDIX A
AUDITED FINANCIAL STATEMENTS OF THE CITY
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
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APPENDIX B
CERTAIN INFORMATION CONCERNING THE CITY OF REDDING
The economic and demographic information regarding the City provided in this Appendix B is presented as general background data and has been collected from sources which the City deems to be reliable. The general fund of the City is not liable, and the credit or taxing power of the City is not pledged, for the payment of the 2025A Installment Sale Payments securing the 2025A Bonds or the interest thereon.
The 202A5 Bonds are limited obligations of the Authority and are payable solely from the Revenues of the Authority (consisting primarily of the 2025A Installment Sale Payments) and are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any of the property of the City, or any of its income or receipts, except the Net Revenues of the City’s Electric System and the other funds which are pledged to the payment of the 2025A Installment Sale Payments under the 2025A Installment Sale Agreement and the other funds which are pledged to the payment of the 2025A Bonds pursuant to the Trust Agreement. See the section in the Official Statement entitled “SECURITY AND SOURCES FOR THE 2025A BONDS.”
General Description
The City of Redding (the “City” or “Redding”), comprising approximately 62 square miles, is located at the northern end of the Sacramento Valley, approximately 160 miles north of Sacramento and 230 miles northeast of San Francisco. It is the county seat of Shasta County and the major trade, recreational and commerce center for the northern central and northeastern portion of California.
The City is situated in the midst of a vast recreational area that includes nine national forests, six wilderness areas, two state parks and one national park. The City experiences hot summers and mild winters. Annual precipitation is approximately 34.23 inches. Elevation within the area varies from 400 feet above sea level to 10,466 feet at Lassen Park, just outside the County of Shasta (the “County”).
Municipal Government
The City was incorporated on October 4, 1887 and operates as a general law city with the council-manager form of government. The City Council consists of five members elected “at large” for four-year staggered terms. Council members must be residents of the City and registered voters both at the time nomination papers are taken out and assuming office. The Mayor is selected by the City Council from among its members.
City Council Members. The current members of the City Council are as follows:
JACK MUNNS, Mayor, was elected to the City Council in November 2022. Mr. Munns was born and raised in Redding. In 1989, he joined the Reno Police Department. Mr. Munn’s education includes a bachelor’s degree in Criminal Justice and a master’s degree in Social Work , which he obtained while working as a police officer. Mr. Munn’s current term of office ends in December 2026.
MIKE LITTAU, Vice Mayor, was elected to the City Council in November 2024. Mr. Littau moved to Redding in 1995 and attended Simpson University. Mr. Littau’s education includes a bachelor’s degree in Communications. After graduating from college, Mr. Littau served in the Army. Following his military service, he began his career working for a local bank and insurance company in Redding. In 2005, he opened his own insurance business. Mr. Littau’s community involvement includes serving on a local school board, as well as serving in various leadership roles for the California Soccer Park, Redding Youth Soccer League, and Simpson Alumni Association. Mr. Littau’s current term of office ends in December 2028.
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TENESSA AUDETTE, Council member, was elected to the City Council in November 2022. Ms.
Audette’s education includes a bachelor’s degree in Political Science from Sonoma State University. She started a small business, Called to Actio n Consulting, Inc., which managed campaigns for city council, county supervisor, district attorney, congressional, assembly and gubernatorial races. Ms. Audette serves as the First District’s Representative for the California State Senate. She is a graduat e of Leadership Redding, a program of the Community Foundation of the North State, the stated purpose of which is to serve as a catalyst for individuals who seek participation in community decision -making in voluntary and governmental organizations. She se rved on the Leadership Redding Steering Committee, organizing the government program for five years. She also served as the Data Chair on the Shasta County Republican Central Committee and was a delegate for the California GOP. Ms. Audette is an Adjunct In structor teaching constitutional principles and civics as an elective for Bethel School of Supernatural Ministry. Ms.
Audette’s current term of office ends in December 2026.
DR. PAUL DHANUKA, Council member, was elected to the City Council in November 2024. Dr.
Dhanuka has served as a medical doctor in the Redding community and North State region for nearly two decades. He is a former Chief of Medical Staff at Mercy Medical Center Redding and at Shasta Regional Medical Center Redding. Dr. Dhanuka is the current President of the North Valley Medical Association, and an Assistant Professor at the U niversity of California, Davis School of Medicine and California University of Science and Medicine. He serves on the Shasta County Public Health Advisory Board, Simpson University’s Community Advisory Committees, and Turtle Bay Exploration Park Board of Regents. Dr. Dhanuka’s current term of office ends in December 2028.
ERIN RESNER, Council member and Mayor Pro Tempore, was elected to the City Council in November 2024. Ms. Resner was raised in Redding. Her education includes a bachelor’s degree in Biology, with a minor in Environmental Sciences , from St. Mary’s College of California. Ms. Resner and her husband currently o wn eight locations of Dutch Bros. Coffee i n Redding, Anderson, and Palo Cedro, California. Ms. Resner’s community involvement includes serving as a Court Appointed Special Advocate for youth in Dependency Court for over a decade and as a Commissioner for the City of Redding’s Community Services Ad visory Commission for four years. She is involved in a number of community focused non-profits and businesses such as One Safe Place and Turtle Bay and is also on the Children’s Legacy Center Board of Directors serving as the Treasurer. Ms. Resner’s current term of office ends in December 2026.
City Management and Employees. The City Manager is appointed by the City Council and is responsible for implementation of Council policies and for day-to-day operation of the City. The offices of City Clerk and City Treasurer are elective, for four -year terms, and the City Attorney is appointed by the City Council. The City is regarded as a full service city and municipally provided services include planning and building regulation, police protection, fire protection, recreation and parks, electric, water, wastewater, storm drainage and solid waste collection and disposal and operation of two airports.
As of June 30, 2024, a staff of 9 06 full-time employees and 293 part-time employees of the City carried out the functions of municipal government. City employees have been represented by various unions since 1965.
Population Characteristics
Between 1980 and 2020, the City grew significantly, increasing to 93,746 residents in 2020 from 41,995 residents in 1980. The City’ s estimated 2024 population of 92,466 represents a slight decrease of approximately 1.37% from the 2020 U.S. Census tabulation. The City’s population represents over 50% of the County’s estimated population of 179,195 in 2024. The following table indicates population growth for the City and the County from 1980 to 2024.
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CITY OF REDDING AND COUNTY OF SHASTA
POPULATION
(1980, 1990, 2000, 2010 and 2020 as of April 1;
2021-2024 as of January 1, with 2020 benchmark)
City of Redding County of Shasta
Year Number
Annualized
Percent
Change
Over Interval Number
Annualized
Percent
Change
Over Interval
1980 41,995 – 115,715 –
1990 66,462 5.83% 147,036 2.71%
2000 80,865 2.17 163,256 1.10
2010 89,861 1.11 177,223 0.86
2020 93,746 0.43 182,155 0.28
2021 93,536 (0.22) 181,483 (0.36)
2022 92,682 (0.91) 180,206 (0.70)
2023 92,164 (0.55) 179,122 (0.60)
2024 92,466 0.32 179,195 0.04
__________________
Source: State of California, Department of Finance, E -4 Population Estimates for Cities, Counties, and the State, 1980-2020 Census data, 2021-2024 with 2020 Census Benchmark. Sacramento, California, May 2024.
Industry and Employment
Timber extraction and the processing of wood by-products, together with agriculture, tourism and government, have historically been the major sectors of employment in Redding. Over the last decade, the City’s economic base has diversified from resource extraction and processing activities, primarily lumber, to a regional services economy supported by retail and wholesale trade plus educati onal, recreational, medical and government services for an area covering several counties. The City has attracted new manufacturing industries through a combination of industrial development policies, the availability of a growing labor pool, comparatively low development and living costs and inexpensive power. A consistent factor in the growth of the labor force continues to be the out -migration of all types of workers from the population centers of Southern California and the San Francisco Bay Area to Sha sta County and other Northern California counties. A large portion of the in-migrants possesses high technical and administrative skills.
Major employers in the City and Shasta County include those in medical services, government and utility services. Majo r non-governmental employers, their products or services, and the number of their respective employers in 2024 are listed in the following table:
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CITY OF REDDING
MAJOR EMPLOYERS
(as of June 30, 2024)
Employer Employees Rank
Percentage
of Total Area
Employment
Mercy Medical Center 1,980 1 2.82%
Shasta County(1) 1,773 2 2.53
City of Redding(2) 918 3 1.31
Shasta Regional Medical Center 880 4 1.25
California Transportation Department 573 5 0.82
Shasta Union High School District 559 6 0.80
Shasta Community College 512 7 0.73
Shasta Community Health 507 8 0.72
Win-River Casino 351 9 0.50
Redding Rancheria 187 10 0.27
Total 8,240 11.75%
__________________
(1) Full-time equivalent budgeted positions. This includes employees who work outside of the City. (2) Full-time budgeted positions. In Fiscal Year 2023-24, there were 906 full-time and 293 part-time/temporary positions filled.
Source: City of Redding Annual Comprehensive Financial Report for Fiscal Year 2023-24. Derived roughly from the State of California Employment Development Department’s listing of the top 25 employers in Shasta County.
The Redding Metropolitan Statistical Area (MSA) is comprised of Shasta County. The following table summarizes employment by industry in Shasta County in calendar years 2019 through 2023 (most recent full year information available). The calendar year figures presented are annual averages which are estimated by the State of California Employment Development Department.
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LABOR FORCE IN SHASTA COUNTY
AVERAGE ANNUAL EMPLOYMENT BY INDUSTRY
2019 through 2023
2019 2020 2021 2022 2023
Wage and Salary Employment:
Farm ........................................... 800 800 900 1,000 1,000 Mining, Logging, and
Construction ............................. 3,900 4,400 4,400 4,400 4,400 Manufacturing ............................ 2,600 2,500 2,800 2,900 2,900 Trade, Transportation and
Utilities ..................................... 13,000 13,000 13,400 13,600 13,200 Information Services .................. 500 500 500 500 500 Financial Activities .................... 2,800 2,800 2,800 2,800 2,800 Professional and Business
Services ................................... 6,100 5,800 5,800 6,100 6,300 Private Education and
Health Services ........................ 15,500 15,200 15,100 15,600 16,500 Leisure and Hospitality .............. 7,000 6,100 6,700 7,000 7,000 Other Services ............................ 2,400 2,300 2,300 2,400 2,600 Government ................................ 13,600 13,200 13,100 13,400 14,100 Total(1) ................................... 68,200 66,600 67,900 69,600 71,200 __________________
(1) Columns may not add to totals due to independent rounding.
Source: California Employment Development Department. Annual Averages; March 2023 Benchmark.
According to the California Employment Development Department, the City’s metropolitan area (i.e., Shasta County) annual average unemployment rate was 5.7% in 2024. The following table sets forth certain information regarding employment in the Redding Metropolitan Statistical Area from 2020 through 2024.
REDDING METROPOLITAN STATISTICAL AREA
CIVILIAN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT
2020 through 2024
Year Labor Force
Unemployment
Number Rate
2020 73,300 6,500 8.9%
2021 72,800 5,000 6.9
2022 72,500 3,400 4.7
2023 73,900 3,800 5.1
2024 74,700 4,300 5.7
__________________
Source: California Employment Development Department; Revised annual averages (not seasonally adjusted) March 2023 Benchmark.
Construction Activity
The following table sets forth the valuation and number of units for new single - and multi-family dwellings and businesses located in the City for the five calendar years 2019 through 2023.
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CITY OF REDDING
BUILDING VALUATIONS AND NUMBER OF UNITS
2019 through 2023
(Dollars in Thousands)
2019 2020 2021 2022 2023
Single Family Units ......................... 223 204 151 234 94 Value Single Family(1) ..................... $65,182.7 $59,295.3 $42,964.6 $76,963.5 $36,660.3 Multi-Family Units .......................... 91 4 244 52 0 Multi-Family Permits(2) ................... 7 1 3 4 0
Value Multi-Family Dwellings........ $9,220.3 $518.3 $38,036.4 $9,031.6 $0 Business Permits ............................. 24 37 33 23 23 Value Business ................................ $27,756.9 $35,738.4 $46,433.7 $44,679.7 $36,936.1 Total Permits(3) ................................ 5,146 6,756 5,317 4,696 3,883 Value Total All Permits(3) ................ $157,668.1 $165,613.4 $165,423.9 $193,625.1 $116,809.5 __________________
(1) Value of new construction only.
(2) Includes hotel and apartment units – “R” occupancies. (3) Total includes miscellaneous structures and additions, alterations and remodels in addition to new construction.
Source: City of Redding Development Services Department.
Commerce
The City is a regional center of commerce for several Northern California counties, with many shopping centers and malls. Support for retail sales is derived from a retail trade area population of approximately 128,000 in the primary trade area and approximately 257,000 people in the secondary trade area. The primary trade area consists of the metropolitan urban area, including the cities of Redding, Shasta Lake, Anderson and Red Bluff. The secondary trade area consists of Shasta, Trinity, and Tehama counties.
The following table shows the annual volume of taxable sales within the City since 2019. Taxable transactions in the City were reported to be approximately $2.56 billion in calendar year 2023.
CITY OF REDDING
TAXABLE TRANSACTIONS
Calendar Years 2019 through 2023
(Dollars In Thousands)
Year
Retail and Food Services
Taxable Transactions
Total All Outlets Taxable
Transactions
2019 $1,785,797 $2,318,353
2020 1,766,878 2,276,483
2021 2,044,445 2,608,210
2022 2,001,843 2,607,234
2023 1,940,192 2,560,254
__________________
Source: California Department of Tax and Fee Administration - Taxable Sales in California
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Personal Income
The United Department of Commerce, Bureau of Economic Analysis (the “BEA”) produces economic accounts statistics that enable government and business decision -makers, researchers, and the public to follow and understand the performance of the national economy.
The BEA defines “personal income” as income received by persons from all sources, including income received from participation in production as well as from government and business transfer payments. Personal income represents the sum of compensation of employees (received), supplements to wages and salaries, proprietors’ income with inventory valuation adjustment and capital consumption adjustment (“CCAdj”), rental income of persons with CCAdj, personal income receipts on assets, and personal current transfer receipts, less contributions for government social insurance. Per capita personal income is calculated as the personal income divided by the resident pop ulation based upon the Census Bureau’s annual midyear population estimates.
The following table presents total personal income and per capita personal income for the Redding Metropolitan Statistical Area (which is the same as the County of Shasta), the Sta te and the United States for the period 2019 through 2023.
REDDING METROPOLITAN STATISTICAL AREA,
STATE OF CALIFORNIA AND UNITED STATES
PERSONAL INCOME AND PER CAPITA PERSONAL INCOME
Calendar Years 2019 through 2023(1)
Year Area
Personal Income
(millions of dollars)
Per Capita Personal
Income (dollars)
2019 Redding MSA $ 8,321.8 $45,675
California 2,539,747.4 64,219
United States 18,349,584.0 55,566
2020 Redding MSA $ 9,325.8 $51,240
California 2,769,103.0 70,098
United States 19,600,945.0 59,123
2021 Redding MSA $ 9,905.5 $54,385
California 3,009,556.6 76,882
United States 21,403,979.0 64,460
2022 Redding MSA $ 9,788.5 $54,099
California 3,003,826.1 76,941
United States 22,077,232.0 66,244
2023 Redding MSA $ 10,395.7 $57,637
California 3,166,135.4 81,255
United States 23,380,269.0 69,810
__________________
(1) Latest available annual data. SAINC1 National and State data updated September 2024 – revised statistics for 2019-2023; CAINC1 MSA data updated November 2024 – new statistics for 2023; revised statistics for 2019- 2022; data not adjusted for inflation.
Source: Bureau of Economic Analysis: SAINC1 National and State data; CAINC1 MSA data.
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Transportation
The City enjoys a strategic market location among the Pacific Coast States of California, Oregon and Washington. Interstate 5, the principal transportation artery running north -south from Mexico to Canada, connects the City to the entire Pacific Coast marketplace. The City lies an equal distance (approximately 600 miles) between Los Angeles, California and Seattle, Washington. The City is also bisected by State Highway 299 and State Route 44, the key east -west transportation arteries in northern California. Interstate 5 also provides industrial and manufacturing firms in the County with freight-delivery schedules to the Midwest and the East Coast.
The City is served by Amtrak for rail transportation and Greyhound for bus service. Eight truck terminals are located in the County and daily service is provided by six major carriers.
The Redding Area Bus Authority (“RABA”) is the City’s multi -bus transportation system and offers 11 different fixed routes, two express routes, and a commuter service to provide transportation to the rural city of Burney. RABA also operates the Americans with Disability Act (ADA) Paratransit service providing service for individuals who, because of a disability, are not able to utilize the fixed route system.
The service area of the RABA system covers well over 100 square miles.
The Redding Regional Airport serves the regional area of Northern California, consisting of approximately 25,000 square miles covering eight counties. Commercial, freight and passenger services are provided by United Express/SkyWest Airlines, Alaska Airlines, Avelo Airlines, Federal Express, UPS and charter service providers. The Redding Municipal Airport features a 32,000 square foot terminal building to serve the traveling public that was expanded and remodeled in 2014.
Utilities
Electricity, solid waste collection and disposal, water, storm drainage, and wastewater services are provided by enterprise operations owned and operated by the City. Natural gas is provided by Pacific Gas and Electric Company (PG&E).
Community Services
The City is served by eight different school districts. The City has 39 elementary schools, 9 middle/junior high schools, 18 charter schools, one regional occupation program and 10 high schools. The City also has many private schools. There are several higher educational institutions in the immediate area offering bachelor and master’s degrees: Chico State University Center for Regional and Continuing Education (located in downtown Redding), National University, Simpson University and Shasta Bible College & Graduate School. Shasta Community College, a two -year institution, offers day and evening courses to an enrollment of over 11,000 students annually. In addition, there are several vocational and technical schools in the area offering a range of programs in the area.
The City’s parks system includes 56 developed parks and facilities, encompassing over 597 developed acres. The park system includes nearly 180 acres of natural area parks, 38 -plus miles of City - owned trails, and 16 special purpose fa cilities. The special purposes facilities include the Redding Civic Auditorium; the Redding Big League Dreams Sports Park; the California Soccer Park; the Redding Aquatics Center; the Senior Citizens Center; the Martin Luther King Jr. Community Center; the Benton Dog Park; and three boat ramp facilities accessing the Sacramento River.
The City serves as the primary medical center for Northern California. The City’s two general care hospitals serve approximately 332,000 people in Shasta, Tehama, Trinity, Sis kiyou, and Lassen counties.
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The two largest hospitals have a total of 493 beds and employ approximately 2,700 full -time staff employees. In addition, the City has several specialized health care facilities.
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APPENDIX C
BOOK-ENTRY ONLY SYSTEM
General
The Depository Trust Company (“DTC”), New York, New York will act as securities depository for the 2025A Bonds. The 2025A Bonds will be issued as fully-registered securities certificates registered in the name of Cede & Co. (DTC’s partnership nominee) or s uch other name as may be requested by an authorized representative of DTC. One fully-registered 2025A Bond will be delivered for each maturity of the 2025A Bonds, in the aggregate principal amount of such maturity, and will be deposited with DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” wi thin the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and no n-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to oth ers such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to DTC’s participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information on such website is not incorporated herein by reference.
Purchases of the 2025A Bonds under the DTC book -entry system must be made by or through Direct Participants, which will receive a credit for the 2025A Bonds on DTC’s records. The o wnership interest of each actual purchaser of each 2025A Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Ow ners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Tr ansfers of ownership interests in the 2025A Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the 2025A Bonds, except in the event that use of the book -entry system for the 2025A Bonds is discontinued.
To facilitate subsequent transfers, all 2025A Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co, or such other name as may be requested by an authorized representatives of DTC. The deposit of 2025A Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial o wnership.
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the identity of the Direct Participants to whose accounts such 2025A Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Dir ect Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the 2025A Bonds may wish to take ce rtain steps to augment the transmission to them of notices of significant events with respect to the 2025A Bonds, such as redemptions, defaults and proposed amendments to the bond documents. For example, Beneficial Owners of 2025A Bonds may wish to ascertain that the nominee holding the 2025A Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the bond registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of a maturity of the 2025A Bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the 2025A Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures.
Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the 2025A Bonds are credited on the record date (ident ified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest payments with respect to the 2025A Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority or the Trustee, on each payment date in accordance with their respective holdings shown on DTC’s records. Payments by Participa nts to Beneficial Owner will be governed by standing instructions and customer practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant an d not of DTC, the Trustee, the Authority or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC, is the responsibility of the Authority, the City or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the 2025A Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, 2025A Bonds are required to be printed and delivered.
The Authority may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered.
The foregoing description concerning DTC and DTC’s book -entry system is based solely on information furnished by DTC. No representation is made herein by the Authority, the City or the Underwriter as to the accuracy or completeness of suc h information, and the Authority, the City and the Underwriter take no responsibility for the accuracy or completeness thereof.
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Discontinuance of DTC Services
In the event that (a) DTC determines not to continue to act as securities depository for the 2025A Bonds or (b) the Authority determines to remove DTC from its functions as a depository, DTC’s role as securities depository for the 2025A Bonds and use of the book -entry system will be discontinued. If the Authority fails to select a qualified securi ties depository to replace DTC, the Authority will cause the Trustee to execute and deliver new 2025A Bond s in fully registered form in such denominations and numbered in the manner determined by the Trustee and registered in the names of such persons as a re requested in a written request of the Authority. The Trustee shall not be required to deliver such new 2025A Bonds within a period of less than 60 days from the date of receipt of such written request of the Authority.
Upon such registration, such perso ns in whose names the 2025A Bonds are registered will become the registered owners of the 2025A Bonds for all purposes.
In the event that the book-entry system is discontinued, the following provisions would also apply:
(a) any 2025A Bonds may, in accordance with their terms, be transferred on the books maintained by the Trustee under the Trust Agreement for such purpose by the person in whose name it is registered, in person or by the duly authorized attorney of such person, upon payment by the Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer as a condition precedent to the exercise of such privilege, and upon the surrender of such 2025A Bond for cancellation accompanied by a duly execu ted written instrument of transfer in a form approved by the Trustee; (b) 2025A Bonds may be exchanged at the principal corporate trust office of the Trustee for a like aggregate principal amount of 2025A Bonds of the same maturity of other authorized denominations, upon payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such transfer as a condition precedent to the exercise of such privilege; (c) the Trustee shall not be required to register the transfer of or exchange any 2025A Bonds during the fifteen days preceding each interest payment date, or to register the transfer of or exchange any 2025A Bond which has been selected for redemption in whole or in part, from after the day of mail ing of a notice of redemption of such 2025A Bond; (d) all interest payments on the 2025A Bonds will be made on the interest payment dates therefor as provided in the Trust Agreement to the person whose name appears on the registration books maintained by the Trustee as the Owner thereof at the close of business on the last day of the month immediately preceding an interest payment date (the “Record Date”), whether or not such day is a Business Day, such interest to be paid by check mailed by first-class mail to such registered Owner at the address as it appears in such registration books on the Record Date, except in the case of an Owner of at least $1,000,000 in aggregate principal amount of 2025A Bonds the Outstanding, payment shall be made at such Owner’s option by wire transfer of immediately available funds to an account in a bank or trust company or savings bank that is a member of the Federal Reserve System and that is located in the United States of America according to written instructions given by s uch Owner to the Trustee by the applicable record date; and (e) all payments of principal of and premium, if any, on the 2025A Bonds will be payable in lawful money of the United States of America by check upon surrender of the 2025A Bonds at the principal corporate trust office of the Trustee at maturity or upon its prior redemption.
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APPENDIX D
SUMMARY OF CERTAIN PROVISIONS OF
THE PRINCIPAL LEGAL DOCUMENTS
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APPENDIX E
PROPOSED FORM OF CONTINUING DISCLOSURE AGREEMENT
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APPENDIX F
PROPOSED FORM OF OPINION OF BOND COUNSEL
[CLOSING DATE]
Redding Joint Powers Financing Authority
Redding, California
Redding Joint Powers Financing Authority
Electric System Revenue Bonds, 2025 Series A
(Final Opinion)
Ladies and Gentlemen:
We have acted as bond counsel to the Redding Joint Powers Financing Authority (the “Authority”) in connection with issuance of $__________ aggregate principal amount of Redding Joint Powers Financing Authority Electric System Revenue Bonds, 2025 Series A (the “Bonds”), issued pursuant to a trust agreement, dated as of April 1, 2025 (the “Trust Agreement”), between the Authority and U.S.
Bank Trust Company, National Association, as trustee (the “Trustee”). Capitaliz ed terms not otherwise defined herein shall have the meanings ascribed thereto in the Trust Agreement.
In such connection, we have reviewed the Trust Agreement, the 2025A Installment Sale Agreement, dated as of April 1, 2025 (the “Agreement”), between t he City of Redding, as purchaser (the “City”), and the Authority, the Tax Certificate, dated the date hereof (the “Tax Certificate”), opinions of counsel to the Authority, the City and the Trustee, certificates of the Authority, the City, the Trustee and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein.
The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the original delivery of the Bonds on the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the original delivery of the Bonds on the date hereof. Accordingly, this letter speaks only as of its date and is not intended to, and may not, be relied upon or otherwise used in connection with any such actions, events or matters. Our engagement with respect to the Bonds has concluded with their issuance, and we disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures provided to us and the due and legal execution and delivery of each such document by each party thereto other than the Authority and the City and that each such document constitutes a valid and binding agreement of such party. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents and of the legal conclusions contained in the opinions, referred to in the second paragraph hereof. Further more, we have assumed compliance with all covenants and agreements contained in the Trust Agreement, the Agreement and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to assure that future act ions, omissions or events will not cause interest on the Bonds to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bonds, the Trust Agreement, the Agreement and the Tax Certificate and their enforceability may be subject to bankruptcy, Packet Pg. 344
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insolvency, receivership, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against governmental entities such as the Authority and the City in the State of California. We express no opinion with respect to any indemnification, contribution, liquidated damages, penalty (including any remedy deemed to constitute a penalty), right of set -off, arbitration, judicial reference, choice of law, choice of forum, choice of venue, non-exclusivity of remedies, waiver or severability provisio ns contained in the foregoing documents, nor do we express any opinion with respect to the state or quality of title to or interest in any of the real or personal property described in or as subject to the lien of the Trust Agreement or the Agreement or th e accuracy or sufficiency of the description contained therein of, or the remedies available to enforce liens on, any such property. Our services did not include financial or other non -legal advice. Finally, we undertake no responsibility for the accurac y, completeness or fairness of the Official Statement or other offering material relating to the Bonds and express no view with respect thereto.
Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions:
1. The Bonds constitute the valid and binding limited obligations of the Authority.
2. The Trust Agreement has been duly executed and delivered by, and constitutes the valid and binding agreement of, the Authority. The Trust Agreement c reates a valid pledge, to secure the payment of the principal of and interest on the Bonds, of the Revenues and any other amounts held by the Trustee in any fund or account established pursuant to the Trust Agreement, subject to the provisions of the Trust Agreement permitting the application thereof for the purposes and on the terms and conditions set forth in the Trust Agreement.
3. The Agreement has been duly executed and delivered by, and constitutes a valid and binding agreement of, the Authority and the City.
4. The Bonds are limited obligations of the Authority payable solely from Revenues and the other assets pledged therefor under the Trust Agreement. The obligation of the City to make payments pursuant to the Agreement is limited to the Net Revenues of the Electric System. Neither the faith and credit nor the taxing power of the City, the State of California or of any political subdivision thereof is pledged to the payment of the principal of or interest on the Bonds or the City’s payments under the Agreement.
5. Interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. Interest on the Bonds is not a specific preference item for purposes of the federal individual alternative minimum tax. We observe that interest on the Bonds included in adjusted financial statement income of certain corporations is not excluded from the federal corporate alternativ e minimum tax. We express no opinion regarding other tax consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds.
Faithfully yours,
ORRICK, HERRINGTON & SUTCLIFFE LLP
per
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APPENDIX G
DEBT SERVICE SCHEDULE
Fiscal Year Outstanding Parity Obligations(1) 2025A Installment Sale Payments Total Debt Ending June 30 Principal Interest Total(2) Principal Interest Total Service(2) 2025 $10,270,000.00 $4,029,520.00 $14,299,520.00
2026 10,785,000.00 3,516,020.00 14,301,020.00
2027 11,325,000.00 2,976,770.00 14,301,770.00
2028 11,885,000.00 2,410,520.00 14,295,520.00
2029 12,490,000.00 1,816,270.00 14,306,270.00
2030 13,110,000.00 1,191,770.00 14,301,770.00
2031 2,345,000.00 536,270.00 2,881,270.00
2032 2,465,000.00 419,020.00 2,884,020.00
2033 2,590,000.00 295,770.00 2,885,770.00
2034 2,680,000.00 201,882.50 2,881,882.50
2035 2,775,000.00 104,062.50 2,879,062.50
2036 -- -- --
2037 -- -- --
2038 -- -- --
2039 -- -- --
2040 -- -- --
2041 -- -- --
2042 -- -- --
2043 - -- --
2044 -- -- --
2045 -- -- --
2046 -- -- --
2047 -- -- --
2048 -- -- --
2049 -- -- --
2050 -- -- --
2051 -- -- --
2052 -- -- --
2053 -- -- --
2054 -- -- --
2055 -- -- --
Total(2) $87,720,000.00 $17,497,875.00 $100,217,875.00
__________________
(1) Include the installment sale payments relating to outstanding 2015 RJPFA Electric System Bonds, the 2017 City Electric System Refunding Bonds and the 2018 City Electric System Refunding Bonds. Excludes obligations payable with respect to joint powers agency obligations described under “SECURITY AND SOURCES OF PAYMENT FOR THE 2025A BONDS – Outstanding Electric System Revenue Obligations – Take-or-pay; Joint Powers Agency Obligations,” which constitute Maintenance and Operation Costs. (2) Totals may not add due to rounding.
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CITY OF REDDING
REPORT TO THE CITY COUNCIL
Recommendation
Approve the Audit Committee’s recommendation to a ccept the Statement on Auditing Standards AU-C 260 Letter and the draft copy of the Single Audit Reports for the year ended June 30, 2024.
Fiscal Impact
There is no fiscal impact associated with this item.
Alternative Action
The City Council (Council) could reject the Statement on Auditing Standards AU-C 260 Letter and the draft copy of the Single Audit Reports for the year ended June 30, 2024, and provide additional direction to the Audit Committee and/or staff.
Background/Analysis
Attached is a copy of the AU -C 260 Letter to the Council and a draft copy of the Single Audit Reports for the year ended June 30, 2024. The Audit Committee met on March 7, 2025, to review and disc uss the reports. The Audit Committee recommended that the AU -C 260 Letter and the draft of the Single Audit Reports be brought to the Council for acceptance.
The AU -C 260 Letter is commonly know n as the ‘The Auditor’s Communication with those Charged wit h Governance’ and provides the auditors the forum to share their perspective on accounting policies, estimates, and disclosures used in the preparation of the financial statements and whether there were any difficulties, disagreements, or other findings in performing the audit.
The auditors found no problems or issues to convey.
MEETING DATE: March 18, 2025
ITEM NO. 9A
FROM:
***APPROVED BY***
[email protected], [email protected]
[email protected]
SUBJECT: 9A--Consider Reports from Independent Auditors for the year ended June 3 0, 2024.
Jack Munns, Mayor, Mike
Littau, Vice Mayor
Packet Pg. 347
Report to Redding City Council March 12, 2025
Re: 9A--Reports from Independent Auditors for the year ended June 30, 2024 Page 2
The Single Audit Reports pertain to the compliance and internal control in the expenditure of federal awards and the collection and expenditure of passenger facility charges. No findings or questioned costs were noted in the reports.
Environmental Review
This is not a project defined under California Environmental Quality Act, and no further action is required.
Council Priority/City Manager Goals
This is a routine operational item occurring on an annual basis.
Attachments
2024 City of Redding Governance Communication - AU-C-260 FINAL 2024 City of Redding Single Audit Report FINAL
Packet Pg. 348
Packet Pg. 349
Attachment: 2024 City of Redding Governance Communication - AU-C-260 FINAL (9A--Reports from Independent Auditors for the year ended Packet Pg. 350
Attachment: 2024 City of Redding Governance Communication - AU-C-260 FINAL (9A--Reports from Independent Auditors for the year ended Packet Pg. 351
Attachment: 2024 City of Redding Governance Communication - AU-C-260 FINAL (9A--Reports from Independent Auditors for the year ended Packet Pg. 352
Attachment: 2024 City of Redding Governance Communication - AU-C-260 FINAL (9A--Reports from Independent Auditors for the year ended CIT
Y OF REDDING
SINGLE AUDIT REPORT, PASSENGER
FACILITY CHARGES PROGRAM, AND
INDEPENDENT AUDITORS’ REPORTS
YEAR ENDED JUNE 30, 2024
Packet Pg. 353
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
TABLE OF CONTENTS
YEAR ENDED JUNE 30, 2024
SINGLE AUDIT:
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND REPORT ON COMPLIANCE AND OTHER
MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING
STANDARDS 1
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR
FEDERAL PROGRAM, REPORT ON INTERNAL CONTROL OVER
COMPLIANCE, AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE 3
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 7
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 10
SUMMARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS 12
PASSENGER FACILITY CHARGES:
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH
REQUIREMENTS APPLICABLE TO THE PASSENGER FACILITY CHARGE
PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE
AND REPORT ON THE SCHEDULE OF PASSENGER FACILITY CHARGES 14
SCHEDULE OF PASSENGER FACILITY CHARGES COLLECTED AND
EXPENDED AND INTEREST COLLECTED 17
NOTES TO SCHEDULE OF PASSENGER FACILITY CHARGES
COLLECTED AND EXPENDED AND INTEREST COLLECTED 19
SCHEDULE OF FINDINGS AND QUESTIONED COSTS 20
Packet Pg. 354
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.
CliftonLarsonAllen LLP
CLAconnect.com
(1)
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND REPORT ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Honorable Mayor and Members of City Council
of the City of Redding
Redding, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United St ates, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Redding (the City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively compri se the City’s basic financial statements, and have issued our report thereon dated March 11, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered City’s internal control over financial reporting (internal control) as a ba sis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
Packet Pg. 355
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024) Honorable Mayor and Members of City Council
of the City of Redding
(2)
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control over financial reporting and the results of that testing and not to provide an opinion on the effectiveness of the entity’s internal control and compliance. This communication is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control over financial reporting. Accordingly, this communication is not suitable for any other purpose.
CliftonLarsonAllen LLP
Roseville, California
March 11, 2025
Packet Pg. 356
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024) (3)
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH
MAJOR FEDERAL PROGRAM, REPORT ON INTERNAL CONTROL OVER
COMPLIANCE, AND REPORT ON THE SCHEDULE OF EXPENDITURES
OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE
Honorable Mayor and Members of City Council
of the City of Redding
Redding, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Redding’s (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2024. The City’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.
In our opinion, the City complied, in all material re spects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2024.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financ ial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditors’ Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.
CliftonLarsonAllen LLP
CLAconnect.com
Packet Pg. 357
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024) Honorable Mayor and Members of City Council
of the City of Redding
(4)
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal cont rol over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.
Auditors’ Responsibility for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City ’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards , and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City ’s compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards , and the Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding City of Redding ’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City ’s internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Packet Pg. 358
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024) Honorable Mayor and Members of City Council
of the City of Redding
(5)
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of com pliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the Auditors’ Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over com pliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Packet Pg. 359
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024) Honorable Mayor and Members of City Council
of the City of Redding
(6)
Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated March 11, 2025, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibilit y of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole
.
CliftonLarsonAllen LLP
Roseville, California
March 11, 2025
Packet Pg. 360
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2024
See accom
panying Notes to Schedule of Expenditures of Federal Awards. (7)
Federal
Assistance Grant
Federal Grantor/Pass-Through Grantor/ Listing Identification Federal Passed Through Program or Cluster Title Number Number Expenditures to Subrecipients U. S. Department of Housing and Urban Development
Direct Program:
CDBG - Entitlement Grants Cluster:
Community Development Block Grant 14.218 B-20-MC 060-033 30,000$ -$ Community Development Block Grant 14.218 B-21-MC 060-033 112,365 18,498 Community Development Block Grant - CARES 14.218 B-22-MC 060-033 333,479 170,134 Community Development Block Grant 14.218 B-23-MC 060-033 284,743 3,000 Subtotal CDBG Entitlement Grants Cluster 760,587 191,632 Passed through State of California:
Community Development Block Grant 14.228 21-DRMHP-21008 2,884,927 - Community Development Block Grant 14.228 32000302/304/416 886,534 - Subtotal Assistance Listing Number 14.228 3,771,461 - Emergency Solutions Grant Program:
Passed through State of California:
Emergency Solutions Grant Program - CV 14.231 22-ESG-17060 / E-22-DC-06-0001 200,000 - HOME Investment Partnership 14.239 M20-MC060238 35,348 - HOME Investment Partnership 14.239 M21-MC060238 39,282 - HOME Investment Partnership 14.239 M22-MC060238 43,723 - HOME Investment Partnership 14.239 M21-MP060238 756,812 - HOME Investment Partnership 14.239 M23-MC060238 386,985 - Subtotal Assistance Listing Number 14.239 1,262,150 - Housing Vouchers Cluster:
Section 8 Housing Choice Vouchers 14.871 CA 106 13,833,090 - Emergency Housing Vouchers (EHV) 14.871 CA 106 593,145 - Subtotal Assistance Listing Number 14.871 14,426,235 - Mainstream Vouchers Cluster:
Mainstream Vouchers 14.879 CA 106 598,199 -
Subtotal Housing Vouchers Cluster 15,024,434 -
Family Self-Sufficiency (FSS) Program:
FSS Coordinator 14.896 FSS23CA5065 60,771 -
FSS Coordinator 14.896 FSS24CA5065 41,804 -
Subtotal Assistance Listing Number 14.896 102,575 -
Total U.S. Department of Housing and Urban Development 21,121,207 191,632 U.S. Department of Interior
Passed through State of California:
Sport Fish Restoration 15.605 F23AG01256-00 216,864 - Total U.S. Department of Interior (DOI) 216,864 -
U.S. Department of Justice
Direct Programs:
Bulletproof Vest Partnership Program 2023 16.607 19,097,427 6,114 - Edward Byrne Memorial Justice Assistance Grant 16.738 15PBJA-22-GG-02533-JAGX 374 - Edward Byrne Memorial Justice Assistance Grant 16.738 15PBJA-22-GG-02533-JAGX 49,198 - Subtotal Assistance Listing Number 16.738 49,572 -
Asset Seizure Program 16.922 2XXX 30,962 -
Total U.S. Department of Justice 86,648 -
U.S. Department of Transportation
Direct Programs:
Airport Improvement Program:
COVID-19 - CARES Act Benton 20.106 3-06-0308-022 25,825 - Airport Layout Plan Drawing Set Update 20.106 3-06-0308-023-2021 4,873 - ARP (American Rescue Plan / Airport Rescue Plan) Benton 20.106 3-06-0308-027-2021 32,000 - Runway 16/34 MAGVAR Design Phase 2 20.106 3-06-0194-061-2022 417,862 - Airport Master Plan Update - Muni 20.106 3-06-0194-063-2022 254,691 - Terminal Loop Construction Phase 2 Add Alt 2 20.106 3-06-0194-065-2023 10,188 - Subtotal Assistance Listing Number 20.106 745,439 -
Packet Pg. 361
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED)
YEAR ENDED JUNE 30, 2024
See accompanying Notes to Schedule of Expenditures of Federal Awards. (8)
Federal
Assistance Grant
Federal Grantor/Pass-Through Grantor/ List ing Identification Federal Passed Through Program or Cluster Title Number N umber Expenditures to Subrecipients U.S. Department of Transportation
Passed through State Department of Transportation:
Highway Planning and Construction:
FHBP study 5068-34 Sacramento / Olney 20.205 HBRR 5068-34 18,474$ -$ FHBP study 5068-35 Eastside / Canyon 20.205 HBRR 5068-35 48,557 - FHBP study 5068-36 Eastside Olney 20.205 HBRR 5068-36 935,442 - FHBP study 5068-37 Canyon / ACID 20.205 HBRR 5068-37 69,414 - FHBP study 5068-38 Westside / Canyon 20.205 HBRR 5068-38 182,949 - FHBP study 5068-45 Old Alturas / Churn Creek 20.205 HBRR 5068-45 3,121,574 - Shoulder widening on Old Oregon Trail for recovery area and bike lanes 20.205 HSIP6-02-002 5068-52 102,133 - Enhanced Pedestrian Crossings 20.205 HSIPL-5068(62) 14,438 - Bridge Preventative Maintenance 20.205 BPMP-5068(060) 22,556 - Downtown to Turtle Bay Non-Motorized Improvements 20.205 RPSTPL 5068 (061) 25,908 - Shasta Street Railroad Crossing Project 20.205 STPLR-7500(254) 60,060 - Girvan Road Railroad Crossing Project 20.205 STPLR-7500(225) 131,967 - Victor/Cypress ATP 20.205 HSIPL-5068(64) 625,927 - Passed through Shasta Regional Transportation Agency:
Bechelli-Loma Vista ATP 20.205 HSIPL-5068(59) 427,845 - Subtotal Assistance Listing 20.205 5,787,244 - Federal Transit Cluster:
Direct Programs:
COVID-19 - Federal Transit—Formula Grants (CARES Act) 20.507 2020-061 69,825 - Federal Transit—Formula Grants 20.507 2022-109 893,224 - Federal Transit—Formula Grants 20.507 2023-055 201,600 - Federal Transit—Formula Grants 20.507 2024-021 2,000,000 - Subtotal Assistance Listing Number 20.507 3,164,649 - Bus and Bus Facilities Formula Program 20.526 2020-061 23,005 - Bus and Bus Facilities Formula Program 20.526 2021-107 259,818 - Subtotal Assistance Listing Number 20.526 282,823 - Subtotal Federal Transit Cluster 3,447,472 - Passed through California Department of Transportation through Shasta Count y Formula Grants for Rural Areas and Tribal Transit Program:
Highway Planning and Construction 20.509 2022-051 23,998 - Passed through California Office of Traffic Safety:
Highway Safety Cluster:
Selective Traffic Enforcement Program (STEP) 20.600 PT23150 2,932 - Selective Traffic Enforcement Program (STEP) 20.600 PT23150 8,835 - Subtotal Highway Safety Cluste
r 11,767 -
Minimum Penalties for Repeat Offenders for Driving
While Intoxicated Program:
Selective Traffic Enforcement Program (STEP) 20.608 PT23150 15,382 - Selective Traffic Enforcement Program (STEP) 20.608 PT23150 54,748 - Subtotal Assistance Listing Number 20.608 70,130 - Total U.S. Department of Transportation 10,086,050 - U.S. Department of Treasur
y
Direct Programs:
Coronavirus State & Local Fiscal Recovery Funds:
COVID-19 American Rescue Plan Act (ARPA) Funds 21.027 N/A 479,443 - COVID-19 American Rescue Plan Act (ARPA) Funds 21.027 N/A 243,257 - COVID-19 American Rescue Plan Act (ARPA) Funds 21.027 N/A 2,303,969 - COVID-19 American Rescue Plan Act (ARPA) Funds 21.027 N/A 999,927 - COVID-19 American Rescue Plan Act (ARPA) Funds 21.027 N/A 49,036 - COVID-19 American Rescue Plan Act (ARPA) Funds 21.027 N/A 11,720 - COVID-19 American Rescue Plan Act (ARPA) Funds 21.027 N/A 500 - COVID-19 American Rescue Plan Act (ARPA) Funds 21.027 N/A 461,820 - COVID-19 American Rescue Plan Act (ARPA) Funds 21.027 N/A 954,660 - COVID-19 American Rescue Plan Act (ARPA) Funds 21.027 N/A 80,593 - COVID-19 American Rescue Plan Act (ARPA) Funds 21.027 N/A 85,000 - COVID-19 American Rescue Plan Act (ARPA) Funds 21.027 N/A 2,559 - Subtotal Assistance Listing Number 21.027 - Direct 5,672,484 -
Packet Pg. 362
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED)
YEAR ENDED JUNE 30, 2024
See accom
panying Notes to Schedule of Expenditures of Federal Awards. (9)
Federal
Assistance Grant
Federal Grantor/Pass-Through Grantor/ List ing Identification Federal Passed Through Program or Cluster Title Number N umber Expenditures to Subrecipients Passed through Shasta County:
COVID-19 Coronavirus State and Local Fiscal Recovery Funds 21.027 AGR.CAO.COR.SS.2324.FE X 243,176$ -$ Subtota
l Assistance Listing Number 21.027 5,915,660 - T
otal U.S. Department of Treasury 5,915,660 - U.S. Department of Homeland Security
Passed through the California Natural Resources Agency - Division of Boating and Waterways:
Boating Safety 97.011 N/A 3,595 -
Boati
ng Safety 97.011 C8966331 33,867 -
Boati
ng Safety 97.011 N/A 14,455 -
Subtota
l Direct Assistance Listing Number 97.011 51,917 -
Smal
l Water Craft Safety Program 97.012 C8965311 22,121 -
D
irect Programs:
Disaster Grants - Public Assistance 97.036 FEMA-4382-DR-Carr Fire 2,361 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 165,857 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 326 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 199 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 7 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 2,524 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 854 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 29,208 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 560 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 48 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 88,413 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 281 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 17,197 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 5,356 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 3,596 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 250,248 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 5,567 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 41,323 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 3,691 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 180,308 - D
isaster Grants - Public Assistance 97.036 FEMA-4301-Flooding 41,736 - Subtota
l Direct Assistance Listing Number 97.036 839,660 -
D
irect Programs:
Disaster Grants - Public Assistance 97.039 HMGP 4382-143-27F 111,301 - D
isaster Grants - Public Assistance 97.039 HMGP DR-4382-131-3R 19,754 - Subtota
l Direct Assistance Listing Number 97.039 131,055 -
D
irect Programs:
Assistance to Firefighters 97.044 EMW-2021-FG-05829 170 - Assi
stance to Firefighters 97.044 EMW-2022-FG-03871 18,510 - Subtota
l Direct Assistance Listing Number 97.044 18,680 -
Passed thr
ough the County of Shasta:
Homeland Security Grant Program (HSGP) 97.067 AGR.PH.CityofRedding.HSG.FY20 22,975 - D
irect Programs:
Staffing for Adequate Fire & Emergency Response 97.083 EMW-2021-FF-00741 797,245 - T
otal Department of Homeland Security 1,883,653 - T
otal Expenditures of Federal Awards 39,310,082$ 191,632$ Packet Pg. 363
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
JUNE 30, 2024
(10)
NOT
E 1 REPORTING ENTITY
The accompanying schedule of expenditures of federal awards (the Schedule) presents the activity of all federal award programs of the City of Redding (City). The City’s reporting entity is defined in Note 1 to the City’s basic financial statements. Federal awards received directly from federal agencies, as well as federal awards passed through other government agencies, are included in the Schedule. The information in this Schedule is presented in accordance with the requirements of 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.
NOTE 2 BASIS OF ACCOUNTING
The accompanying Schedule is presented using the modified accrual basis of accounting and the accrual basis of accounting for program expenditures accounted for in governmental funds and proprietary funds, respectively, as described in Note 1 of the City’s basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
NOTE 3 FEDERAL ASSISTANCE LISTING NUMBERS
The program titles and federal assistance listing numbers were obtained from the federal or pass-through grantor.
NOTE 4 INDIRECT COST RATE
The City did not elect to use the 10% de minimis indirect cost rate as covered in 2 CFR §200.414.
NOTE 5 PASS-THROUGH ENTITIES’ IDENTIFYING NUMBER
When federal awards were received from a pass-through entity, the Schedule shows, if available, the identifying number assigned by the pass-through entity. When no identifying number is shown, the City determined that no identifying number is assigned for the program, or the City was unable to obtain an identifying number from the pass-through entity.
Packet Pg. 364
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
JUNE 30, 2024
(11)
NOT
E 6 BLENDED COMPONENT UNITS
The accompanying Schedule of Expenditures of Federal Awards includes federal awards to the following blended component units:
Federal
Expenditures
Redding Area Bus Authority:
Federal Transit Assistance Cluster 3,447,472 $
Housing Authority of the City of Redding:
Housing Vouchers Cluster 14,426,235 $
Mainstream Vouchers Cluster 598,199
Family Self Sufficiency (FSS Program) 102,575
Packet Pg. 365
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
SUMMARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2024
(12)
Section I – Summary of Auditors’ Results
Financial Statements
1. Type of auditors’ report issued: Unmodified
2. Internal control over financial reporting:
Material weakness(es) identified? yes x no
Significant deficiency(ies) identified? yes x none reported
3. Noncompliance material to financial
statements noted? yes x no
Federal Awards
1. Internal control over major federal programs:
Material weakness(es) identified? yes x ___ no
Significant deficiency(ies) identified? yes x___ none reported
2. Type of auditors’ report issued on
compliance for major federal programs: Unmodified
3. Any audit findings disclosed that are required
to be reported in accordance with
2 CFR 200.516(a)? yes x no
Identification of Major Federal Programs
Assistance Listing Number(s) Name of Federal Program or Cluster
14.871/14.879 Housing Voucher Cluster
21.027 COVID-19 Coronavirus State and Local Fiscal
Recovery Funds
Dollar threshold used to distinguish between
Type A and Type B programs: $ 1,179,302
Auditee qualified as low-risk auditee? x yes no
Packet Pg. 366
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
SUMMARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED JUNE 30, 2024
(13)
Section II – Financial Statement Findings
Our audit did not disclo
se any matters required to be reported in accordance with Government Auditing Standards.
Section III – Findings and Questioned Costs – Major Federal Programs Our audit did not disclose any matters required to
be reported in accordance with 2 CFR 200.516(a).
Packet Pg. 367
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024) (14)
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR THE
PASSENGER FACILITY CHARGE PROGRAM, REPORT ON INTERNAL CONTROL
OVER COMPLIANCE, AND REPORT ON THE
SCHEDULE OF PASSENGER FACILITY CHARGES
Honorable Mayor and Members of City Council
of the City of Redding
Redding, California
Report on Compliance for the Passenger Facility Charge Program Opinion on Compliance
We have audited the City of Redding’s (the City) compliance with the types of compliance requirements identified as subject to audit in the Passenger Facility Charge Audit Guide for Public Agencies , issued by the Federal Aviation Administration (the Guide), for its passenger facility charge program for the year ended June 30, 2024.
In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on the Passenger Facility Charge Program for the year ended June 30, 2024.
Basis for Opinion
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financ ial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the Federal Aviation Administration. Our responsibilities under those standards and the Federal Aviation Administration are further described in the Auditors’ Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit does not provide a legal determination of the City’s complianc e with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal cont rol over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s government programs.
CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.
CliftonLarsonAllen LLP
CLAconnect.com
Packet Pg. 368
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024) Honorable Mayor and Members of City Council
of the City of Redding
(15)
Auditors’ Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards , and the Federal Aviation Administration will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of the government program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards , and the Federal Aviation Administration, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of m
aterial noncompliance, whether due to fraud or error, and design and
perform audit procedures responsive to those risks. Such procedures inclu de examining, on a test basis, evide
nce regarding the City's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
Obtain an understanding of the City's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Federal Aviation Administration, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a compliance requirement will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Packet Pg. 369
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024) Honorable Mayor and Members of City Council
of the City of Redding
(16)
Our consideration of internal control over compliance was for the limited purpose described in the Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over com pliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Federal Aviation Administration. Accordingly, this report is not suitable for any other purpose.
Report on the Schedule of Passenger Facility Charges Collected and Expended and Interest Collected
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our r eport thereon dated March 11, 2025, which contained unmodified opinions on those financial statements. The accompanying Schedule of Passenger Facility Charges Collected and Expended and Interest Collected is presented for purposes of additional analysis as specified in the Passenger Facility Charge Audit Guide for Public Agencies , issued by the Federal Aviation Administration, and is not a required part of the basic financial statements . Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in a ccordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Passenger Facility Charges Collected and Expended and Interest Collected is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
CliftonLarsonAllen LLP
Roseville, California
March 11, 2025
Packet Pg. 370
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
SCHEDULE OF PASSENGER FACILITY CHARGES COLLECTED AND EXPENDED AND
INTEREST COLLECTED
YEAR ENDED JUNE 30, 2024
See accom
panying Notes to Schedule of Passenger Facility Charges Collected and Expended and Interest Collected. (17)
Cumulative Total September 30, December 31,
June 30, 2023 2023 2023
Unexpended (over expended) passenger facility 247,576$ 340,055$ 407,127$ charges and interest, beginning of period
Amount
Revenues: Approved
Passenger facility charges collected 4,870,953 94,708 102,828 Interest earned 25,786 114 173
Total passenger facility charge revenue 6,483,283$ 4,896,739 94,822 103,001 Expenses:
Amount
Project Number/Project Name Approved
Completed and Closed Applications 2,766,535 $ 2,766,535 - - Open Projects
Application 11-04-C-01-RDD
001-Storage Building for FAR Part 139 Equipment 14,791 14,791 - - 002-Update Airport Layout Plan (ALP) 1,500 1,500 - - 003-Prepare Airport Electrical Master Plan 1,500 1,500 - - 004-Acquire Aircraft Rescue Fire Fighting (ARFF) Equipment 1,992 1,992 - - 005-Rehabilitate Airfield Guidance Signs 16,588 16,588 - - 006-Rehabilitate Runway 13/34 - Design Only 3,250 3,250 - - 007-Rehabilitate Parallel and Connecting Taxiways - Design Only 2,302 2,302 - - 008-Rehabilitate Terminal Building 60,346 60,346 - - 009-Conduct Wildlife Hazard Assessment 4,510 4,510 - - 010-Terminal Building Expansion - Design Only 12,498 12,498 - - 011-PFC Administration Costs 35,000 35,000 - - 017-Rehabilitate and Expand Terminal Building 519,645 519,645 - - Application 17-05-C-00-RDD
001-Aircraft Rescue and Fire Fighting Vehicle Acquisition 68,676 68,676 - - 002-Airport Master Plan Update 44,832 44,800 - - 003-ADA Passenger Loading Ramp 4,984 4,984 - - 004-Airport Pavement Management System Study 4,735 4,735 - - 005-T-Hangar Taxilane Reconstruction 458,672 394,850 - - 006-West Tie Down Apron Reconstruction 323,278 313,730 - - 007-Aircraft Rescue and Fire Fighting Station Modifications 1,735 1,735 - - 009-Environmental Assessment Parallel Runway 32,690 187 - - 013-PFC Application/Administration Costs 150,000 54,870 - - Application 23-06-C-00-RDD
001-PFC Audi
t 61
,141 61,141 - -
002-Guidance Sign Installation & Misc NAVAID 30,811 30,811 - - 003-Terminal Loop Design 53,633 67,660 - - 004-AAAE-IET Training Program 42,000 14,250 27,750 - 005-Update Airport Master Plan Study 103,927 32,640 - - 006-Master Drainage Study 52,001 21,158 - - Application 24-07-C-00-RDD
001-PFC Audi
t 10
,750 - - -
002-PFC Application 67,222 - - -
003-NEPA Environmental Evaluation for Runway 16-34 Improvements 17,051 - - - 004-Runway 16-34 Rehabilitation Design 87,288 - - - 005-Runway 16-34 Blast Pad Design 6,006 - - - 006-Runway 16-34 Connector Taxiways Design 10,414 - - - 007-Runway 16-34 MAGVAR Update Design 431 - - - 008-Runway 16-34 Rehabilitation Construction 1,532,385 - - - 009-Runway 16-34 Blast Pad Construction 106,615 - - - 010-Runway 16-34 Connector Taxiways Construction 201,900 - - - 011-Runway 16-34 MAGVAR Update Construction 7,655 - - - Total passenger facility charge revenue expenditures 4,556,684 27,750 - Unexpended (over expended) passenger facility
charges and interest, end of period 340,055$ 407,127$ 510,128$ (Continued)
For the Quarter Ended
Packet Pg. 371
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
SCHEDULE OF PASSENGER FACILITY CHARGES COLLECTED AND EXPENDED AND
INTEREST COLLECTED (CONTINUED)
YEAR ENDED JUNE 30, 2024
See accom
panying Notes to Schedule of Passenger Facility Charges Collected and Expended and Interest Collected. (18)
For the Year
Ended
March 31, June 30, June 30, Cumulative Total
2024 2024 2024 June 30, 2024
Unexpended (over expended) passenger facility 510,128 $ 459,685 $ 340,055 $ $ -$ charges and interest, beginning of period
Revenues:
Passenger facility charges collected 72,425 87,815 357,776 5,228,729 Interest earned 138 193 618 26,404
Total passenger facility charge revenue 72,563 88,008 358,394 5,255,133 Expenses:
Project Number/Project Name
Completed and Closed Applications - - - 2,766,535 Open Projects
Application 11-04-C-01-RDD
001-Storage Building for FAR Part 139 Equipment - - - 14,791 002-Update Airport Layout Plan (ALP) - - - 1,500 003-Prepare Airport Electrical Master Plan - - - 1,500 004-Acquire Aircraft Rescue Fire Fighting (ARFF) Equipment - - - 1,992 005-Rehabilitate Airfield Guidance Signs - - - 16,588 006-Rehabilitate Runway 13/34 - Design Only - - - 3,250 007-Rehabilitate Parallel and Connecting Taxiways - Design Only - - - 2,302 008-Rehabilitate Terminal Building - - - 60,346 009-Conduct Wildlife Hazard Assessment - - - 4,510 010-Terminal Building Expansion - Design Only - - - 12,498 011-PFC Administration Costs - - - 35,000
017-Rehabilitate and Expand Terminal Building - - - 519,645 Application 17-05-C-00-RDD
001-Aircraft Rescue and Fire Fighting Vehicle Acquisition - - - 68,676 002-Airport Master Plan Update - - - 44,800
003-ADA Passenger Loading Ramp - - - 4,984
004-Airport Pavement Management System Study - - - 4,735 005-T-Hangar Taxilane Reconstruction - - - 394,850 006-West Tie Down Apron Reconstruction - - - 313,730 007-Aircraft Rescue and Fire Fighting Station Modifications - - - 1,735
009-Environmental Assessment Parallel Runway - - - 187 013-PFC Application/Administration Costs - - - 54,870 Application 23-06-C-00-RDD
001-PFC Audit - - - 61,141
002-Guidance Sign Installation & Misc NAVAID - - - 30,811 003-Terminal Loop Design - - - 67,660
004-AAAE-IET Training Program - - 27,750 42,000 005-Update Airport Master Plan Study - - - 32,640 006-Master Drainage Study - - - 21,158
Application 24-07-C-00-RDD
001-PFC Audi
t 14,
796 (4,080) 10,716 10,716
002-PFC Application 22,567 766 23,333 23,333 003-NEPA Environmental Evaluation for Runway 16-34 Improvements - - - - 004-Runway 16-34 Rehabilitation Design 71,453 12,212 83,665 83,665 005-Runway 16-34 Blast Pad Design 4,919 841 5,760 5,760 006-Runway 16-34 Connector Taxiways Design 8,525 1,457 9,982 9,982 007-Runway 16-34 MAGVAR Update Design 350 60 410 410 008-Runway 16-34 Rehabilitation Construction 328 5,130 5,458 5,458 009-Runway 16-34 Blast Pad Construction 23 357 380 380 010-Runway 16-34 Connector Taxiways Construction 43 676 719 719 011-Runway 16-34 MAGVAR Update Construction 2 26 28 28 Total passenger facility charge revenue expenditures 123,006 17,445 168,201 4,724,885 Unexpended (over expended) passenger facility
charges and interest, end of period 459,685$ 530,248$ 530,248$ 530,248$ (Concluded)
For the Quarter Ended
Packet Pg. 372
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
NOTES TO SCHEDULE OF PASSENGER FACILITY CHARGES COLLECTED AND EXPENDED
AND INTEREST COLLECTED
JUNE 30, 2024
(19)
NOTE 1 REPORTING ENTITY
The accompanying Schedule of Facility Charges Collected and Expended and Interest Collected includes all the Passenger Facility Charges (PFC) and the interest earnings thereon collected by the City from July 1, 2023 through June 30, 2024. The City currently collects $4.50 per enplaned passenger. The current approval for the charges as approved by the Federal Aviation Administration (FAA) is expected to end on February 1, 2025.
NOTE 2 BASIS OF ACCOUNTING
The Schedule of Facility Charges Collected and Expended and Interest Collected was prepared on the accrual basis of accounting. PFCs are recorded as revenue when earned and expenditures for debt service and approved capital projects are recorded as expenditures are made. Expenditures are made in accordance with an approved FAA application.
Packet Pg. 373
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
PASSENGER FACILITY CHARGE PROGRAM
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2024
(20)
Section I – Summary of Auditors’ Results
A.
Current Year Findings and Questioned Costs – Passenger Facility Charge Program No findings or questioned costs were noted
on the City’s complia nce with requirements of the
passenger f
acility charge program for the year ended June 30, 2024.
B.
Prior Year Findings and Questioned Costs – Passenger Facility Charge Program No findings or questioned costs were noted
on the City’s complia nce with requirements of the
passenger f
acility charge program for the year ended June 30, 2024.
Packet Pg. 374
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
Packet Pg. 375
Attachment: 2024 City of Redding Single Audit Report FINAL (9A--Reports from Independent Auditors for the year ended June 30, 2024)
CITY OF REDDING
REPORT TO THE CITY COUNCIL
Recommendation
Accept the report on tobacco retailing and provide direction to staff regarding next steps.
Fiscal Impact
There is no fiscal impact with accepting th is report. If the City Council (Council) would like to alter the former Council’s September 2024 previous direction to staff which was to create a Tobacco Retail License (TRL) ordinance specific to vape/smoke shops there would be associated staff time costs with updating the ordinance.
The Redding Police Department (RPD) has received two toba cco use prevention related grants.
The first grant is with the County of Shasta to perform decoy operations through March 15, 2026. The grant consists of five operations a year with each operation consisting of 10 to 12 retailer visits per operation – revenue received per operation is $1,500 . The second grant is through the California Department of Justice that provide s $630,569 through October 31, 2027.
This grant funds police officers to administer and conduct enforcement operations that include retail inspections, decoy operations, shoulder tap, undercover buys, and retailer education.
Alternative Action
The Council could choose to not accept the report or move forward with implementation of a TRL or provide other direction.
MEETING DATE: March 18, 2025
ITEM NO. 9.1(c)
FROM:
***APPROVED BY***
[email protected]
SUBJECT: 9.1(c)--Consider accepting report regarding tobacco retailing in the City of Redding.
Jason Gibilisco, Management
Assistant to the City Manager
Packet Pg. 376
Report to Redding City Council March 12, 2025
Re: 9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 2
Background/Analysis
On February 6, 2024, staff presented a report to the Council outlining current California laws and tobacco enforcement practices in various jurisdictions, including Shasta County. The Council accepted the report and directed staff to conduct further resear ch on tobacco enforcement practices in other California municipalities and determine what is and is not working regarding tobacco enforcement, and any other information as it relates to tobacco retailers.
Staff canvased the municipalities for information related to tobacco retailers and returned to Council on September 17, 2024 to present this information. Staff analyzed 48 jurisdictions with 28 of them requiring retailers to have a local TRL. This is in addition to the state license that is required by the California Department of Tax and Fee Administration for any retailers who sell tobacco products. The cost of the state license is $265 and must be renewed annually. It is intended to prevent retailers from selling unregulated tobacco products.
Municipalities that require a TRL also require an annual fee in concert with the TRL, and allows for local control, and enforcement capabilities over tobacco retailers in their jurisdiction. Many jurisdictions have set their ordinances to go above and beyond what the federal and state law requires. Jurisdictions that are successfully running a TRL program also provide education, inspections, and enforcement to their tobacco retailers.
The Council accepted the September 17, 2024 staff report on tobacco retailing a nd directed staff to return with a TRL ordinance for vape and smoke shops, and include fee options to fund enforcement through both code enforcement and law enforcement, for consideration at a future Council meeting.
Following the September 17, 2024 meeti ng, staff worked on both a TRL ordinance specific to vape and smoke shops and worked on fee options to fund the TRL program. The TRL ordinance specific to vape and smoke shops is still under review and not ready to be presented at this time.
The options t o oversee the TRL program c ould be e ither RPD or Redding Code Enforcement (RCE).
If the Council would like to pursue implementing a TRL program, the fee for the TRL will vary depending on the overseeing department; RPD or RCE. The fee will also vary depen ding if it is vape/smoke shop only, or for all tobacco retailers. It was noted at the September 17, 2024 Council meeting, that there are 29 vape/smoke shops and 119 tobacco retailers in the City of Redding.
RPDs identified resource needs to oversee a TRL program would be one full-time Police Officer position and a half -time Sergeant position. RPD is currently receiving funding through the above-mentioned grant for tobacco use prevention related enforcement and education activities.
RCE’s identified resource needs to run the TRL program would be one full-time Neighborhood Preservation Officer and a half -time Admin Assistant. The following are the estimated costs for RPD and RCE to successfully cover administration and enforcement efforts based on their identified needs to run a TRL program based off the number of tobacco retailers.
Packet Pg. 377
Report to Redding City Council March 12, 2025
Re: 9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 3
Redding Police
Department
Cost of a Full -time
Police Officer and half -
time Sergeant
Estimated Cost of TRL
for Vape/ Smoke shops
only (29)
Estimated Cost
of TRL for all
Tobacco
Retailers (119)
$379,000 $13,068.96 $3,184.87
Redding Code
Enforcement
Cost of a Full -time
Neighborhood
Preservation Officer and
half-time Admin
Assistant
Estimated Cost of TRL
for Vape/ Smoke shops
only (29)
Estimated Cost
of TRL for all
Tobacco
Retailers (119)
$140,020 $4,828.27 $1,176.63
The TRL program costs are significantly reduced if requiring all tobacco retailers to be licensed versus the vape/smoke shops only . TRL program costs are even further reduced with RCE overseeing the program. The cost of the TRL covers staff time costs to run the TRL program and includes education, inspections, and enforcement for tobacco retailers. Of course the cost could be further reduced if the Council wanted to lower the amount of oversight or wished to s ubsidize the activity with the General Fund.
At the February 18, 2025 , Council meeting, agenda item 12, the Council directed staff to bring back the TRL item for further direction. If the Council would like to move forward with altering the previously dir ected tobacco retail ordinance for vape/smoke shops, staff can further analyze and update the ordinance to bring back to the Council at a future date for possible adoption. This process will include necessary outreach with stakeholders, work with the City Attorney’s Office and any other necessary departments.
Environmental Review
This is not a project defined under the California Environmental Quality Act, and no further action is required.
Council Priority/City Manager Goals
• Public Safety – “Work to improve all aspects of public safety to help people feel secure and safe where they live, work, and play in the City of Redding.”
Attachments
^Tobacco Staff Report February 6, 2024
^Staff Report City Council 9-17-24
^Jurisdictional Data
Tobacco Retailer Licensing is Effective September 2018
California Youth Tobacco Survey-Shasta County Data
California Youth Tobacco Survey 2023 Annual Report
Packet Pg. 378
CITY OF REDDING
REPORT TO THE CITY COUNCIL
Recommendation
Accept the report on tobacco retailing and provide direction to staff regarding next steps.
Fiscal Impact
There is no fiscal impact with accepting the report.
Alternative Action
The City Council (Council) could choose to not accept the report and provide alternate direction to staff.
Background/Analysis
On October 17, 2023, the Tobacco Education Coalition of Shasta County presented to the Council. The presentation included information regarding the history of tobacco enforcement in the County, how kids are targeted, retailer density, youth tobacco use poll data, and public opinion poll data. On that same evening, the Council directed staff to review the information that was provided by the Tobacco Education Coalition and present it at a future council meeting for consideration of potential changes to the City’s Ordinance regarding the density of tobacco - selling businesses.
Staff then began researching what current laws are in place regarding tobacco in California and in neighboring jurisdictions. Staff met with the Shasta County Health and Human Services Tobacco & Obesity Prevention Unit and with the Tobacco Use and Prevention Education Coordinator for the Shasta County Office of Education. They were able to provide information on state laws, other California city ’s tobacco regulations, education, and other helpful information related to youth tobacco use.
MEETING DATE: February 6, 2024
ITEM NO. 9.1(a)
FROM:
***APPROVED BY***
[email protected]
SUBJECT: 9.1(a)--Accept report regarding tobacco retailing.
Jason Gibilisco, Management
Assistant to the City Manager
Packet Pg. 462Packet Pg. 379
Attachment: ^Tobacco Staff Report February 6, 2024 (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Report to Redding City Council January 31, 2024
Re: 9.1(a)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 2
The most recent major California legislation on tobacco is Senate Bill 793 - approved by Governor Newsom on August 28, 2020. California passed Senate Bill 793 prohibiting the sale of most flavored tobacco products. These banned tobacco products include flavored e -cigarettes, menthol cigarettes, flavored little cigars, flavored smokeless tobacco, tobacco flavor enhancers, and other similar flavored tobacco products. The law does not apply to the retail sale of flavored loose-leaf pipe tobacco or flavored premium cigars ($12 or more) and flavored shisha or hookah when sold according to state law. Shortly after passing, a referendum was proposed and qualified for a ballot measure in the November 2022 election. The law was upheld by the voters and went into effect on January 1, 2023.
Other California legislation includes that all tobacco retailers throughout the state must obtain a tobacco retailer license at a current cost of $265 through the California Department of Tax and Fee Administration to sell tobacco and it must be renewed on an annual basis. The minimum age required by state and federal law to purchase tobacco is 21. The state accepts customer complaints and the California Food and Drug Branch conducts random, onsite inspections with a person under the age of 21 to ensure tobacco retailers do not sell to minors. Retailers who violate the minimum age of sale law are subject to criminal and civil penalties in fi nes ranging from $200 to $1,000. Local enforcement agencies are also authorized to conduct enforcement activities as necessary.
City of Redding
The City of Redding currently does not have an ordinance regulating businesses that sell tobacco or one that controls the density of tobacco retailing in the City and therefore, relies solely on State law. Currently, the City has approximately 9 8 tobacco retailers per the California Department of Tax and Fee Administration website (which includes grocery stores, ph armacies and other similar retailers). The City’s 2045 Draft General Plan incorporates policy language to reduce the use of tobacco (EJ8K) and considers establishing distance requirements for tobacco retailers from youth-oriented facilities (EJ8L).
The Redding Police Department (RPD) finalized a contract with the Shasta County Health and Human Services to conduct Tobacco Retail Minor Decoy operations. RPD will work with a person under the age of 21 and perform at least five operations per year with 10-12 retailer visits per operation. Decoy operations are planned to begin later this month and expire March of 2026.
Funding for the decoy operations is being provided through a Department of Justice grant.
Grants are made available through the Research and Prev ention Tobacco Tax Act of 2016 (Proposition 56) and funds assist local law enforcement agencies by providing grants and tobacco enforcement training.
City of Shasta Lake
The City of Shasta Lake adopted an Interim Zoning Ordinance in August 2023, which req uires a Use Permit for tobacco retailing. The City of Shasta Lake has approximately 8 tobacco retailers per the California Department of Tax and Fee Administration website.
City of Anderson
The City of Anderson currently does not have a tobacco ordinance more stringent than State law.
The City of Anderson has approximately 18 tobacco retailers per the California Department of Tax and Fee Administration website.
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Attachment: ^Tobacco Staff Report February 6, 2024 (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Report to Redding City Council January 31, 2024
Re: 9.1(a)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 3
Shasta County
Shasta County currently does not have a tobacco ordinance more stringent than state law. In unincorporated Shasta County, there are approximately 40 tobacco retailers per the California Department of Tax and Fee Administration website.
Other California Cities
The majority of all California Cities that have adopted tobacco regulatio ns, require tobacco retailers to be registered with their respective local government. This requires the tobacco retailer to pay a fee to their respective local government for a license that would be renewed annually.
The fee for the license covers the cos t of administration, license program, retailer education, inspection, and compliance checks. Having a tobacco retail license program assists with enforcement at the local level. To aid tobacco retail license programs local governments have adopted various other ordinances to assist in the prevention of youth tobacco use.
Additional ordinances that have been adopted in California include:
• Distance requirements for tobacco retailers such as not being able to operate within 500 feet or 1000 feet of a youth-oriented facility (school, daycare, park, etc); • Distance requirements for tobacco retailers to not be able to operate within 500 feet or 1000 feet of another tobacco retailer;
• Requirements for pharmacies to cease tobacco retailing; • Density limits such as limiting the amount of tobacco retailers to operate in a jurisdiction to one for every 2,500 inhabitants;
• Density limits such as limiting the amount of smoke shops to operate in a jurisdiction to one shop for every 4,000 inhabitants;
• Requiring a use permit through planning in addition to a tobacco retail license; and • Prohibiting smoking at all multifamily residential properties unless outside in a designated smoking area.
The ordinances that are provided in this report are the majority of what California loca l governments are adopting in their jurisdictions or variations of, to prevent youth tobacco use. If the Council would like to provide staff with specific direction on pursuing any potential ordinances, staff can pursue additional research and report back to Council at a later date. This can include a report on RPDs progress on the Tobacco Retail Minor Decoy Program.
Environmental Review
This is not a project defined under the California Environmental Quality Act, and no further action is required.
Council Priority/City Manager Goals
• This is a routine operational item
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Attachment: ^Tobacco Staff Report February 6, 2024 (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing)
CITY OF REDDING
REPORT TO THE CITY COUNCIL
Recommendation
Accept the report on tobacco retailing and provide direction to staff regarding next steps.
Fiscal Impact
There is no fiscal impact with accepting the report. If the City Council (Council) would like to pursue drafting an ordinance on tobacco retailing, there would be associated staff time costs.
Currently, the Redding Police Department (RPD) is running decoy operations through a grant.
The grant consists of five operations a year with each operation consisting of 10 -12 retailer visits per operation - revenue received per operation is $1,500.
If the Council pursues a Tobacco Retail License (TRL) Program that is to be managed and enforced by Code Enforcement, staff would need to further examine cost recovery of the program. In TRL programs , the costs of education, inspections, and enforcement are funded by the cost of the license, and can be supplemented with grants. The cost of the license could fund a full time Code Enforcement position and even an administrative position to process the licenses.
Further examination would be required.
Alternative Action
The Council could choose to not accept the report.
Background/Analysis
On February 6, 2024, staff presented to the Council a report regarding what California (State) laws are in place and wh at other jurisdictions are doing in regards to tobacco enforcement. Staff presented a broad scope of what the majority of State jurisdictions are doing in regards to tobacco enforcement and specifically what the jurisdictions are doing in Shasta County. Th e MEETING DATE: September 17, 2024
ITEM NO. 9.1(a)
FROM:
***APPROVED BY***
[email protected]
SUBJECT: 9.1(a)--Consider report regarding tobacco retailing in the City of Redding.
Jason Gibilisco, Management
Assistant to the City Manager
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Attachment: ^Staff Report City Council 9-17-24 (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Report to Redding City Council September 12, 2024
Re: 9.1(a)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 2
Council accepted the report and advised staff to further canvas State municipalities to determine what is and is not working regarding tobacco enforcement, retailer density, how youth are targeted, and any other information as it relates to tobacco retailers.
Since the previous meeting , the 2023 California Youth Tobacco Use Survey (survey) was released for Shasta County and there is new legislation, that, if signed by the Governor, will increase the fine for selling a tobacco product to youth. The surve y was released in March 2024, and shows Shasta County has the highest rate of tobacco ever used by youth in the State of California at 41.2 percenti. The report shows that one in three Shasta County Youth report being able to purchase tobacco directly form a tobacco retaileri. On average, students reported first using tobacco at age 13 and 82.2 percent of students who have used tobacco reported trying vapes as their first tobacco producti.
Potential new tobacco enforcement legislation has moved forward to Governor Newsom for consideration. Senate Bill (SB) 2021 supplements the existing fine that can be issued to a n individual who knowingly sells a tobacco product to a person under 21 years of age. Th is new bill allows for a fine to be issued to the retailing businesses or corporation. The fine amount that can be issued to the business for knowingly selling to a youth is punishable by a fine of $500 for the first offense, $1,000 for the second offense, and $5,000 for the third offense.
The California Department of Tax and Fee Administration (CDTFA) requires all retailers who sell cigarettes, or tobacco products, to obtain a cigarette and tobacco retailer's license . The CDTFA defines a tobacco product on their website as:
• “any product containing, made, or derived from tobacco or nicotine that is intended for human consumption;”
• “Any electronic smoking or vaping device that delivers nicotine or other vaporized liquids;” and
• “Any component, part, or accessory of tobacco product, whether or not sold separately.”
Data Collection and Benchmarking
Staff analyzed 48 various jurisdictions throughout the State on what types of tobacco ordinances and enforcement other jurisdictions have in place. Staff specifically asked jurisdictions if they have a tobacco ordinance, if they enforce their tobacco ordinance, and if the ordinance is working. Staff also viewed each jurisdiction ’s municipal code for specifications on tobacco related ordinances. Staff analyzed if a TR L is required, how many tobacco retailers are in the jurisdiction, what are the associated fees, population, penalties, and what specific ordinances are in place. Staff did not hear back from some jurisdictions through phone or email which resulted in reviewing online ordinances and information.
Of the 48 jurisdictions that were analyzed, 28 of them require retailers to have a local TRL. As of October 2023, at least 226 municipalities in California require a TRL to sell tobacco products.
Jurisdictions that require a TRL, required them to be renewed annually, allow them to have local control, and enforcement capabilities of the tobacco retailers in their jurisdiction. This allows the jurisdiction to set any additional requirements such as limits on how many retailers are operating in their jurisdiction and general oversight. It makes enforcement more effective and efficient and gives local governments the ability to intervene when needed. Many jurisdictions have set their ordinances to go above and beyond of what the federal and state law requires.
Staff found several jurisdictions have adopted tobacco ordinances but currently have no funding for their tobacco program or for enforcement. These jurisdictions are Butte County, Oroville, Packet Pg. 261Packet Pg. 383
Attachment: ^Staff Report City Council 9-17-24 (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Report to Redding City Council September 12, 2024
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Hollister, San Benito County, Arroyo Grande, and Merced County. The Cit ies of Anderson, Santa Rosa, and Vallejo, stated that they are in the process of working on updating or creating a TRL program.
The City of Benicia was found to have the most restrictive requirements for tobacco retailers.
Followed by Sonoma County and Sonoma County cities such as Petaluma, Sebastopol, Windsor, and Sonoma. These jurisdictions require each tobacco retailer to hold a TRL, implemented density requirements (with some no longer issuing TRLs due to being over density ), proximity requirements to youth areas, distance/proximity requirements to other tobacco retailers, no selling of flavored tobacco, no tobacco retailing at pharmacies, minimum pricing requirements, and some even banning the sale of electronic cigarettes or vaping products.
There was a wide array of specific ordinances that have been implemented throughout the State.
The various ordinances in place include:
Proximity Requirement to a Youth Sensitive Area
Jurisdictions have set requ irements for tobacco retailers operating near youth sensitive facilities. Youth sensitive facilities mainly include, schools, parks, libraries, day cares, playgrounds, and ultimately , specific areas defined by the jurisdiction. Jurisdictions set prohibitions for tobacco retailers near schools because of the belief that children are more likely to experiment with tobacco products when tobacco retailers are near youth areas.
Setting distance restrictions near youth areas may assist with reducing youth smoking rates. There are 16 jurisdictions that have set a distance requirement for tobacco retailers near youth sensitive areas. The distance set by the jurisdictions analyzed ranges from 300 feet to 1,000 feet.
Proximity Requirements Near Existing Tobacco Retailers
There are 10 jurisdictions that have requirements for no new tobacco retailers to operate within a specific proximity to other tobacco retailers. This requirement prevents the over concentration of tobacco retailers within particular neighborhoods an d how close they can operate from one another. The overconcentration of tobacco retailers may affect youth smoking behaviors and youth access to tobacco products. The distance set by the jurisdictions analyzed ranges from 500 feet to 1,000 feet.
Tobacco Retailers per Population Density or Cap on the Amount of Tobacco Retailers
Jurisdictions have imposed requirements for tobacco retailers based on the local population. Jurisdictions have based this requirement off of the State’s ability to limit the number of alcohol licenses. Greater tobacco density may lead to higher smoking rates. In the jurisdictions analyzed, 12 jurisdictions have adopted an ordinance based off the population. The jurisdictions analyzed had various densities adopted that include one tobacco retailer for every 1,500 residents (one jurisdiction), 1,750 residents (one jurisdiction), 2,000 residents (four jurisdictions), and 2,500 residents (three jurisdictions).
This sets local capacity of tobacco retailers based on the number of residents . If population increases then the number of tobacco retailers can be increased. The City of Sonoma has a set capacity of 15 retailers, and Nevada City has a set limit of five. The City of Oroville requires a use permit from planning and has a density requirement of one for every 4,000 residents for significant tobacco retailers which has been reached.
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Attachment: ^Staff Report City Council 9-17-24 (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Report to Redding City Council September 12, 2024
Re: 9.1(a)--Accept Report and Provide Direction Regarding Tobacco Retailing Page 4
No Selling of Flavored Tobacco
With the passing of SB 793 , effect ive January 1, 2023, flavored tobacco or tobacco product flavor enhancers are now illegal to sell, offer for sale, or possess with the intent to sell or offer for sale in the State with a few exceptions. Flavored tobacco is considered a starter product for youth that assists with long term tobacco use. There are countless flavors that range fro m Cotton Candy, Cherry Crush, Pop Tart, Banana Blast, Wintergreen, and many more. There are 17 jurisdictions that were analyzed that have an ordinance that prohibits the sale of flavored tobacco with some going above and beyond SB 793 and banning all flavo red tobacco. In communications with jurisdictions, flavored tobacco products are still being found, mainly at significant tobacco retailers such as smoke shops.
No Sale of Electric Smoking Devices (ESDs)/ Vapes
Electronic Cigarettes are also known as e -cigarettes, vapes, or e -vaporizers, and are battery operated devices used to deliver nicotine, flavorings, and other chemicals into the body in an aerosol form rather than smoke. The majority of ESDs or vapes are widely used for flavors. Following the ban on flavored tobacco, jurisdictions noticed that tobacco companies are finding ways to circumvent the flavor ban and are calling products by the names of colors such as “Blue.” Blue could mean that its flavor is blue raspberry or blueberry. ESDs are also w hat the youth are using in higher rates. The State’s flavor ban does leave room for interpretation on what is and is not considered flavored tobacco.
Jurisdictions have decided to go one step further and prohibit the sale of all ESDs for this reason. Since the majority of ESDs are flavored, jurisdictions reported minimal impacts to prohibiting the sale of ESDs. The Environmental Protection Agency classifies ESDs as hazardous waste due to their lithium batteries and nicotine in the liquid. There are seven jurisdictions analyzed that have prohibited the sale of ESDs.
No Selling of Tobacco at Pharmacies
Jurisdictions have restricted pharmacies from selling tobacco and tobacco related products. This ordinance is based off pharmacies being a place people go to for health care and medicine. It can send a mixed message about their safety because it is where people purchase healthcare products. There are 11 jurisdictions analyzed that have an ordinance in place prohibiting the sale of tobacco products at pharmacies.
Minimum Package Pricing/ Quantity Requirements/ No Free Samples or Discounts
Jurisdictions have imposed minimum pricing requirements and minimum packaging requirements. The implementation of pricing requirements is that if tobacco products are priced higher, then they are likely to be unaffordable by youth. Higher prices make products less appealing and can make people use tobacco products less. Minimum packing requirements is thought to have the same logic. Cigarettes are already required to be sold in packs of 20 but cigars can be sold in singles. Some examples analyzed include:
minimum price for a pack of cigarettes to be no lower than $7 or $10; little cigars to be sold in packs of five or more and to be priced no less than $7; and smokeless tobacco to be no less than $10. Jurisdictions that have imposed minimum pricing and packaging ordinances have also imposed discount restrictions to back up the minimum pricing Packet Pg. 263Packet Pg. 385
Attachment: ^Staff Report City Council 9-17-24 (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Report to Redding City Council September 12, 2024
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requirement. Coupons and free samples are prohibited under State law. Six jurisdictions analyzed have requirements on tobacco pricing and quantity packaging requirements.
Smoke Free Multi-Family Housing
Jurisdictions have set no smoking requirements for multi -family housing. This restriction is in place to protect residents from second han d smoke, minimize fire risk, and provide overall quality of life to residents. The restriction includes no smoking in the building and in common areas with a designated smoking area away from the building or any units.
There are nine jurisdictions that were analyzed that have created an ordinance prohibiting smoking in multi-family housing.
Other Regulations Found
• Tobacco retailer must obtain a use permit through the jurisdiction’s planning department to operate within a certain distance to a youth facility; • No significant tobacco retailers. A significant tobacco retailer can be defined as their primary purpose is to sell tobacco and tobacco related products; • No significant tobacco retailers to operate within a certain distance to residential property;
• No deliveries of tobacco product s to be made by employees or by private delivery drivers;
• No placing tobacco products or advertising within 5 feet of candy, snacks, and nonalcoholic beverages;
• No advertising of tobacco products within 500 feet of a youth sensitive area; and • No advertising of tobacco products on windows or advertising to be seen from outside the establishment.
Majority of all jurisdictions analyzed that have imposed tobacco retailing restrictions allowed legally operating tobacco retailers to continue to operate post adoption of their ordinance as long as the tobacco retailer was in good standing. This included businesses that were within required distances to youth facilities and within proximity to other tobacco retailers, and if a TRL cap was initiated. Some offered grace periods such as San Jose, to sell off flavored tobacco which was prior to the State banning flavored tobacco. Santa Maria required pharmacies to immediately stop selling tobacco and San Luis Obispo County immediately requi red businesses to cease selling ESDs. Further break down of ordinances and analysis can be found on the attached Tobacco Retailer Regulation Comparison spreadsheet.
What is and is not working
The Council directed staff to follow up on what is and is not working. The jurisdictions that are successfully running a TRL program, provide education, inspections, and enforcement, feel like their ordinance is working to prevent youth access to tobacco products. If the jurisdiction has a density limit, it prevents the over density of more tobacco retailers from operating. Jurisdictions feel that to be able to back up enforcement with fines and TRL suspension and revocation assist greatly in preventing retailers from being a bad actor. Fines allow the jurisdiction to immediately issue a citation for when violations are found such as a business selling flavored tobacco. If a business continues to sell flavored tobacco a jurisdiction can then issue a second citation and can suspend their TRL or work towards full revocat ion. Many jurisdictions expressed the use of discretion when deciding on the level of enforcement to be issued. It was reported that Packet Pg. 264Packet Pg. 386
Attachment: ^Staff Report City Council 9-17-24 (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Report to Redding City Council September 12, 2024
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suspension and revocation of TRL can be stronger than fines but having all available options is best.
The City of San Jose operates a decoy program and issues a citation amount of $2,500 for selling to a youth. The San Jose City Code Enforcement Inspector felt like the fine amount should be higher due to one business being fined twice for selling to a decoy on two different occasions.
The City of San Jose has smaller fine amounts for other violations such as selling flavored tobacco. Other cities have set fine amounts up to $5,000, and include suspension and revocation of the stores ’ TRL. A TRL suspension could have a higher business impact over a smaller fine amount on a business because the store physically has to remove all tobacco products from their store shelfs for a certain amount of time. Sonoma County has the ability to suspend a TRL and issue a citation. Some jurisdi ctions are able to suspend a TRL for any violation of their Tobacco Retail Ordinance. Jurisdictions with higher fines, suspensions and revocation of TRL are able to effectively enforce tobacco restrictions to ensure retailers are always in compliance.
In the study that was performed, 2021 State of Tobacco Control: California Local Grades ii, for a TRL ordinance to be successful in reducing the sale of tobacco to minors it should include:
• A sufficient fee for the TRL to cover administration and enforcement efforts; • Permission to sell tobacco through an annual license that must be renewed annually; • Include provisions against any state laws in ordinance; and • Financial deterrent that includes fines, penalties, suspensions and revocation of the license.
In the report Tobacco Retailer Licensing is Effective, 41 jurisdictions were analyzed in 2018 and determined that youth sales rates dropped following the adoption of a strong tobacco retailer licensing ordinance. This was determined from youth purchase surveys admi nistered by local agencies. The report indicates that a TRL alone will not decrease youth access but with enforcement and education regarding the local regulations will always be needed. Six of the jurisdictions that were analyzed were included this report (Davis, Elk Grove, Grass Valley, Oroville, San Luis Obispo County, and Woodland).
City of Redding (City) Tobacco Retailer Landscape
In the City there are 119 tobacco retailers. Staff worked with the County of Shasta and the State to obtain the actual amount of tobacco retailers to include sole proprietors, husband and wife co - owners, and domestic partners. The below table shows the number of store types that hold a CDTFA issued tobacco retailers license:
Redding Tobacco Retailers
Gas Station 39
Smoke Shop/ Significant Tobacco Retailers 29
Small Market/ Convenience Store 25
Liquor Store 8
Pharmacy 8
Super Market 7
Golf Course 2
Winery 1
Staff worked with the City’s Information and Technology Department’s Geographic Information System personnel to map all tobacco retailer adresses and compare their distance to youth Packet Pg. 265Packet Pg. 387
Attachment: ^Staff Report City Council 9-17-24 (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Report to Redding City Council September 12, 2024
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sensitive locations, and their distance to other tobacco retailers. Staff defined youth sensitive locations as the same as in the City’s cannabis ordinance which includes schools, parks, and child care facilities. Of these stores there are 20 youth sensitive areas that are located within 1,000 feet of a tobacco retailer. There are 100 tobacco retailers that are located within 500 feet of another tobacco retailer. The population density is one tobacco retailer for every 787 residents.
Local Enforcement
RPD received a grant earlier this year to perform decoy ope rations. RPD receives $1,500 per operation and must perform five operations a year with each operation requiring 10 -12 retailer visits. To date, RPD has performed three tobacco decoy operations that included 41 decoy attempt purchases of tobacco. In all, five sales were made by a youth decoy. One tobacco retailer sold to a decoy twice on two different operations. The four stores are smoke shops and would be considered a significant tobacco retailer. Of these four store stores, two are located within 500 feet of another tobacco retailer and none are located within 1,000 feet of a youth sensitive area.
In June of 2024 the CDTFA was in in the City doing inspections with Shasta County’s Tobacco Compliance Specialist and RPD. Their mission was to ensure tobacc o retailers were properly licensed through the State and have all proper invoices for their products dating back to a year.
They are also able to confiscate illegally imported tobacco and cannabis products. They are unable to confiscate flavored tobacco wh ich falls under the California Department of Public Health (CDPH) and they did not perform underage decoy purchases. They inspected seven tobacco retailers in Redding and found violations at all seven of the retailers. The violations range from confiscatio n of illegally imported products, confiscation of cannabis products, and confirmation of flavored tobacco. The seven stores inspected were all smoke shops. Two of these stores were issued a citation and the total amount of confiscated illegal products exce eded $9,000. Three of these seven retailers sold to a minor as part of RPDs decoy operations earlier this year.
The Food and Drug Administration (FDA) performs random and unannounced decoy operations and has their inspection logs publicly available on the ir website. From January 1, 2022, to July 16, 2024, there was one sale to a decoy out of 22 attempts. Their follow up procedure for a decoy sale is to send a warning letter, then after another confirmed sale, the FDA can follow up with civil penalties, injunctions, and criminal prosecution. The confirmed sale to a decoy was made at a smoke shop or significant tobacco retailer.
How Kids are Targeted
Kids are targeted by tobacco companies in several different ways. The largest is advertising. The U.S. Centers for Disease Control and Prevention reported that cigarette and smokeless tobacco companies spent $8.2 billion in 2019 on advertising and promotional expenses iii. This includes incentives to retailers by tobacco companies to offer price discounts, promotio ns, and stocking certain brands. Lower prices and discounts are more appealing to lower income residents and more appealing to youth. Tobacco products such as a pack of three small cigars can be found for $1.19 in the City.
The advertising of tobacco pro ducts includes how they are packaged. The packaging of tobacco products is made and designed similar to candy products. This can make it very appealing to youth. The placement of tobacco products and advertising are typically placed near candy, soft drinks, and adjacent to the cash register in places likely to be seen by youth. Advertisements can also be strategically placed outside to be seen by youth passing by.
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Flavors and ESDs are also more appealing to youth. Flavors can hide the distinct tobacco fla vor and can make products easier to inhale. Flavored tobacco products have been banned in the State but flavored products are still being found in stores. ESDs come in a variety of designs, relatively low in price, easily concealable, and have high nicotine content that can make it very addicting to users.
Next Steps
If the Council would like to move forward with any potential tobacco retail ordinance and/ or TRL program, staff can further analyze and prepare an ordinance to bring back to the Council at a future date for possible adoption. This process will include necessary outreach with stakeholders, work with the City Attorney’s Office and any other necessary departments.
Environmental Review
This is not a project defined under the California Environme ntal Quality Act, and no further action is required.
Council Priority/City Manager Goals
• Public Safety – “Work to improve all aspects of public safety to help people feel secure and safe where they live, work, and play in the City of Redding.”
Attachments
^Tobacco Staff Report February 6, 2024
^Tobacco Retailer Licensing is Effective September 2018 ^California Youth Tobacco Survey-Shasta County Data
California Youth Tobacco Survey 2023 Annual Report
^Jurisdictional Data
i Clodfelter, R., Dutra, L. M., Bradfield, B., Russell, S., Levine, B., & von Jaglinsky, A. (2023). Annual results report for the California Youth Tobacco Survey 2023. RTI International. ii County Grades. (2021). https://www.lung.org/getmedia/3b258a14-f355-42d0-9cac-18901c1802eb/state-of- tobacco-control-california-local-grades.pdf
iii CDC. (2018, May 4). Tobacco Industry Marketing. Centers for Disease Control and Prevention. https://www.cdc.gov/tobacco/data_statistics/fact_sheets/tobacco_industry/marketing/index.htm Packet Pg. 267Packet Pg. 389
Attachment: ^Staff Report City Council 9-17-24 (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Jurisdiction Notable Regulations
Is a Tobacco
Retailer
License
Required?
Number of
Tobacco
Retailers
Fee amount for
Tobacco Retail
License?
Population
Population
Density per 1
Tobacco Retailer
Distance requirement
from youth sensitive
facilities? If so, how far?
Distance requirement from
other tobacco retailers?
Density
Restrictions? Notes Fines / Penalties
Redding N/A No 119 N/A 93,600 787 N/A N/A N/A N/A N/A
City of Anderson ~No sale of flavored tobacco ~No tobacco advertising No 22 No 11,300 627 No No No N/A
1st violation = $100 2nd
violation = $200 3rd
violation = $500
City of Shasta Lake
Interim zoning ordinance adopted August 2023
which requires a use permit for tobacco
retailing within 900 feet of a youth sensitive
area
No 11 N/A 10,370 1296 900 ft N/A N/A Did not impact existing businesses N/A Shasta County N/A No 67 N/A 66,180 988 N/A N/A N/A
Performs inspections of all tobacco retailers
and provides education. Can refer violations
to the District Attorney's Office
N/A
Butte County N/A Yes 48 Unknown 69,000 1438 N/A N/A N/A Does not actively enforce due to funding 1st Violation: $100
2nd Violation: $200
3rd Violation: $500
Sonoma County
~No sale of tobacco at pharmacies ~Pack
of Cigarettes = Not less than $7
~Pack of Little Cigars = Not less than $7
~Smokeless tobacco = not less than $10
~Pack of Cigars = Not less than $7 (CPI
adjustment)
~No Significant Tobacco Retailers
Yes *79 $505 130,770 1655 1,000 ft N/A 1 retailer per
2,000 inhabitants
No tobacco retail licenses being issued until
density is lowered
1st Violation: license
suspended for 30 days, $100
fine.
2nd Violation:license
suspended for 60 days, $200
fine.
3rd Violation: license
suspended for 90 days, $500
fine.
4th Violation: license revoked,
$500 fine.
City of Sonoma
~Little cigars = must be sold in packages over 5
~Pack of cigarettes = Price can not be lower
than $10 ~Single Cigar = can not be lower than $10 or $5
~Discount/Coupons = can not be used
~Pharmacies = Can not sell tobacco
~No Free samples ~No Sale of Flavored Tobacco ~No
smoking in multi-unit housing
Yes *10 $246 10,730 715 1,000 ft 500 ft
No more
allowed. Set at
15 locations
Not allowing any new tobacco retailers.
Maximum density of 15 addresses that allow
tobacco retailing.
1st Violation: license
suspended for 30 days, $100
fine.
2nd Violation:license
suspended for 60 days, $200
fine.
3rd Violation: license
suspended for 90 days, $500
fine.
4th Violation: license revoked,
$500 fine.
Santa Rosa ~No free samples ~No smoking in multi-unit housing No *119 N/A 178,120 1497 N/A N/A N/A Considering density requirement 1 per 2,500 $100 first violation
$250 second violation within
one year $500 for
each additional violation ithin
one year
Tobacco Retailer Regulation Comparison
Packet Pg. 390
Attachment: ^Jurisdictional Data (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Petaluma
~Parmacies can not sell tobacco ~No
sale to delivery drivers or deliveries by store
~No sale of electronic smoking devices ~No
free samples, coupons or discounts.
~Little Cigars must be sold in packs of 5.
~No single cigar sales unless over $10
~Cigarette pack (20 cigarettes) to be over $10.
(CPI adjustment)
~No sale of flavored tobacco products
~No smoking in duplexes or mult-unit housing
Yes *39 $525 59,770 1533 1,000 ft 500 ft 1 retailer per 2,000 inhabitants No new tobacco retailers Suspension and revocation Sebastopol
~No free samples, discounts, or coupons
~No deliveries by employess and no deliveries
by private parties ~No sale of
flavored tobacco products ~No sale of
Electronic Smoking devices ~Little
cigars must be sold in a pack of 5
~Single cigar must be $10 or more
~Cigarettes (pack of 20) must be sold for $10 or
more ~Little cigars not less than $2 per little cigar (CPI
adjustment) ~No pharmacies to sell tobacco ~No
smoking in multi-unit housing
Yes *9 $68 7,520 537 1,000 ft N/A 1 retailer per
2,000 inhabitants No new tobacco retailers
1st Violation: license
suspended for 30 days.
2nd Violation: license
suspended for 60 days.
3rd Violation:license
suspended for one year.
4th Violation: license revoked.
Windsor
~Cigars to be sold in minimum pack of 5.
~Chewing tobacco must be sold in packages of
5 units ~Single cigar to be $5 ~Pack of Cigarettes (20) to be $7 or more
~Little cigars to be $7 or more ~Package
of (5) cigars to be $7 or more ~Chewing
tobacco of 5 units must be $7 or more (CPI
adjusted) ~No Sale of of flavored tobacco products
~Electronic smoking device sales prohibited
~No free samples, coupons or discounts
~No pharmacies to sell tobacco
Yes *14 $350 26,340 2927 1,000 ft N/A 1 per 2,000
inhabitants N/A
1st Violation: license
suspended for 30 days.
2nd Violation: license
suspended for 90 days.
3rd Violation:license
suspended for one year.
4th Violation: license revoked.
Healdsburg ~No pharmacies to sell tobacco
~No smoking in multi-unit housing Yes *11 $460 11,340 1031 N/A N/A N/A N/A 1st Violation: license
suspended for 30 days.
2nd Violation: license
suspended for 60 days.
3rd Violation:license
suspended for 180 days.
4th Violation: license revoked
Packet Pg. 391
Attachment: ^Jurisdictional Data (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Auburn N/A Yes *17 $850 13,770 810 1,000 ft 500 ft N/A N/A 1st Violation: license
suspended for 15 days. The
tobacco retailer shall
participate in a training or
diversion program or pay a
penalty up to $1,000.
2nd Violation:license
suspended for 90 days.
3rd Violation: license revoked.
Loomis N/A No *4 N/A 6,830 1708 1,000 ft N/A N/A Did not impact existing businesses 1st Violation: $100 penalty.
2nd Violation:$200 penalty.
3rd Violation: $500 penalty.
Nevada City
~Restriction on significant tobacco retailers
~Pack of cigars must be sold in a pack of 5
~Single cigar must exceed $5
Yes 5 $325 15,670 3134 N/A N/A
Limit of 5
retailers for the
city
N/A
1st violation: $250 - $1,000
2nd Violation: $1,000 -$2,500
3rd violation: $2,500-$5,000.
Public nuisance
Grass Valley N/A Yes 30 $100 14,010 467 N/A N/A N/A N/A Range from suspension of tobacco license to revocation
Oroville
~Smoke shop limit- requires use permit 1:4000
residents (zoning code). Defined as primary
business purpose is tobacco or tobacco
products. ~No sale of flavors
Yes 39 $35 20,040 514 N/A N/A
smoke shops
only 1 for every
4,000 residents
N/A Fines / Penalties
Humboldt County
~No Free Samples, discounts or coupons
~No Sale of flavored tobacco
~No tobacco advertisements within 5 feet of
any candy, snacks, or nonalcholic beverages
~No tobacco selling at pharmacies
Yes Unkown
Initial application
fee of $130 and
annual fee of
$390
68,000 Unknown 500 ft 500 ft 1 retailer per
2,500 inhabitants N/A Suspension or revocation of
license
Mendocino County ~No sale of flavored tobacco Yes Unkown $350 Unknown Unknown N/A N/A N/A N/A 1st violation: $100 2nd
violation: $200 3rd violation:
$500
Fort Bragg N/A Yes *16 $187 6,980 436 N/A N/A N/A N/A
Include: administrative
penalities, suspension, and
revocation of license
Del Norte County
~No advertisements of tobacco products within
500 ft of a youth area ~No
advertising within 5 ft of candy, snacks, and
nonalcoholic beverages
Yes 11 No Fee 21,070 1915 N/A N/A N/A N/A
Packet Pg. 392
Attachment: ^Jurisdictional Data (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Cresent City
~No pharmacies may sell tobacco
~Can not advertise tobacco products in a
publicly visible location within 500 feet of a
youth sensitive area
Yes 8 No Fee 6,670 513 N/A N/A 1 retailer per
2,500 inhabitants Did not impact existing businesses
Range from issuance of an
administrative citation,
suspension, & revocation of
license
Merced County N/A No Unkown N/A 60,827 Unknown N/A 1,000 ft N/A Did not impact existing businesses. No Enforcement N/A
Benicia
~No sale of electronic smoking devices or
electronic device fluid ~No sale of flavors ~No free samples, discounts or coupons
~No pharmacies to sell tobacco ~Minimum
Package Size for Little Cigars and Cigars = 10
~Pack of 6 cigars shall be minimum of $5.
~Cigarettes (20 per package) shall not be sold at
a price less than $7.
~Little cigars shall not be sold at a price less
than $7 per package.
~Cigars shall not be sold at a price less than $5
per cigar.
CPI anual adjustment to single price points.
~No pharmacies to sell tobacco
~No smoking in multi-unit housing
~No deliveries or sale to delivery drivers
Yes *9 $520 initial and
$468 for renewal 27,130 3014 1,000 ft 600 ft also 600 ft from a cannabis retailer
1 per 1,750
inhabitants Did not impact existing businesses
1st Violation: license
suspended for 5 days.
2nd Violation: license
suspended for 10 days.
3rd Violation: license shall be
suspended for one year.
4th Violation: license revoked.
Vallejo ~No free samples, coupons, or discounts
~No smoking in multi-unit housing No *76 N/A 126,090 1659 N/A N/A N/A Notes: Working on updating ordinance to
include restrictions on location distance from
youth oriented sites.
First violation $100 Second
violation $200 Third
violation $500
San Benito County
~No sale of flavors ~No sale of electronic smoking devices includes
unincorpoarted and incorporated areas of the
county
No Unkown N/A 16,790 Unknown N/A N/A N/A
Per County Health, no funding to actively
enforce and are pursuing grant to update
tobacco policies and enforce in County
$250
Hollister ~No sale at pharmacies Yes *23 N/A 41,678 1812 N/A N/A N/A No active enforcement Penalties of up to $1,000 for each violation.
San Luis Obispo County ~No sale of electronic smoking devices unless have premarket approval by the FDA Yes Unknown $1,005 121,960 Unknown N/A N/A N/A N/A 1st Violation: license
suspended for 30 days and
citation.
2nd Violation: license
suspended for 60 days and
citation.
3rd Violation: license
suspended for 90 days and
citation.
4th Violation: license revoked
and citation.
Town of Paradise ~No sale of flavors No 10 N/A 4,760 476 N/A N/A N/A N/A First violation $100 Second
violation $200 Third
violation $500
Arroyo Grande N/A Yes *17 $161 18,440 1085 N/A N/A N/A No enforcement due to lack of funding Range from suspension to revocation
Packet Pg. 393
Attachment: ^Jurisdictional Data (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Santa Maria
~No sale at pharmacies ~No free samples, coupons or discounts
~Little cigars must be sold in packs of 5 and no
less than $5 ~Cigar must be sold in packs of 5 or a single cigar price
of $5. ~Pack of cigarettes must be no less than $7 (CPI
adjusted) ~No sale of flavored tobacco products
Yes 81
Initial fee of $505
and renewal fee
of $335
109,700 1354 300 ft 500 ft 1 per 1,500
inhabitants
Dedicated Park Ranger. Did not impact
existing businesses
1st Violation: shall pay a
$1,000 fine. 2nd Violation:
license shall be suspended for
15 days.
3rd Violation: license shall be
supended for 30 days.
4th Violation: license revoked.
Visalia N/A No *78 N/A 141,380 1813 750 ft 750 ft inside or outside city limits N/A N/A N/A
Chico N/A No 95 N/A 101,470 1068 N/A N/A N/A N/A N/A
Roseville N/A No *76 NA 147,770 1944 NA NA NA N/A N/A
Fairfield N/A No *59 N/A 119,881 2032 N/A N/A N/A N/A N/A Tracy ~Significant tobacco retailers must be 600 ft
from residential zoning No *53 N/A 93,000 1755 600 ft N/A N/A N/A N/A Folsom ~No smoking in muti-unit housing No *36 N/A 80,450 2235 N/A N/A N/A N/A N/A Vacaville N/A No *54 N/A 102,380 1896 N/A N/A N/A N/A N/A Lodi N/A No *55 N/A 66,340 1206 N/A N/A N/A N/A N/A
Davis No sale of flavors Yes *26 Unknown 66,850 2571 N/A N/A N/A Adoption of Yolo County's tobacco retail ordinance Revocation of permit and fines
Turlock N/A No *46 N/A 72,740 1581 N/A N/A N/A N/A N/A
Woodland No sale of flavors Yes *24 $473 61,030 2543 N/A N/A N/A Adoption of Yolo County's tobacco retail ordinance Revocation of permit and fines
City of Stockton ~No sale of flavors with the exception of hookah lounges Yes *232 $102 320,800 1383 600 ft 600 ft N/A Did not impact existing businesses Suspension or revocation of
license. 1st violation = $1,000
2nd violation = $2,000 3rd
violation = $3,000
City of San Jose ~No sale of flavors with the exception of hookah lounges Yes 502 $697 1,013,000 2018 1,000 ft 500 ft N/A Dedicated Code Enforcement Inspector. Grace
period for businesses to sell stock of flavored
tobacco.
Revocation and fines ranging
from $500 - $2,500 depending
on violation
Livermore
~No sale of flavors ~No sale of electronic smoking devices or electronic
device fluid (unless FDA approved)
Yes 62 $969 90,000 1452 1,000 ft N/A N/A Did not impact existing businesses $250 - $1,000, suspension and revocation of license
Alturas ~No sale of flavors Yes 6
Initial fee $100,
renewal fee of
$25
2,715 453 N/A N/A N/A N/A Fines from $250-$1,000.
Revocation of License
Packet Pg. 394
Attachment: ^Jurisdictional Data (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Elk Grove N/A Yes *83 $270 178,440 2150 N/A N/A N/A N/A Denial Suspension, and revocation. $250 citation
Santa Clara ~No smoking in multi-unit housing No *72 N/A 131,060 1820 N/A N/A N/A N/A N/A Sunnyvale ~No smoking in multi-unit housing ~No sale of flavors No *52 N/A 151,960 2922 N/A N/A N/A N/A N/A *Approximate number pulled from California Department of Tax and Fee Administration website. Does not include licenses issued to individuals (sole proprietors, married co owners, and domestic partners). Did not receive confirmation from jurisdiction.
Packet Pg. 395
Attachment: ^Jurisdictional Data (9.1(c)--Accept Report and Provide Direction Regarding Tobacco T obacco Retailer Licensing
Is Effective
@ 2013 California Department of Public Health
The Center for Tobacco Policy & Organizing | American Lung Association in California 1531 I Street, Suite 201, Sacramento, CA 95814 | Phone: (916) 554.5864 | Fax: (916) 442.8585 ©2018. California Department of Public Health. Funded under contract #14-10013.
CENTER4TOBACCOPOLICY.ORG
LUNG.ORG/CALIFORNIA
In California, 144 communities have adopted strong local tobacco retailer licensing ordinances in an effort to reduce illegal sales of tobacco products to minors. That includes the following four components:
• License that all retailers must obtain in order to sell tobacco products and that must be renewed annually.
• A fee set high enough to sufficiently fund an effective program including administration of the program and
enforcement efforts. An enforcement plan, that includes compliance checks, should be clearly stated.
• Coordination of tobacco regulations so that a violation of any existing local, state or federal tobacco regulation violates the license.
• A financial deterrent through fines and penalties including the suspension and revocation of the license. Fines and penalties should be outlined in the ordinance.
The table below lists illegal sales rates to minors before and after a strong licensing law was enacted. These sales rates were determined by youth tobacco purchase surveys administered by local agencies. It is important to note that results from the youth tobacco purchase surveys
have a number of different factors that influence change.
Results from these surveys are somewhat dependent
on certain factors that differ in each community, such as the age of the youth and the number of stores surveyed.
Furthermore, other factors that could impact these rates include statewide laws, other city policies, or statewide or national media campaigns. The data below shows that
these decreases occur after a tobacco retailer license has been established. The results overwhelmingly demonstrate that local tobacco retailer licensing ordinances with strong enforcement provisions are effective. Rates of illegal
tobacco sales to minors have decreased, often significantly, in all municipalities with a strong tobacco retailer licensing ordinance where there is before and after youth sales rate data available. However, a licensing ordinance by itself will not automatically decrease sales rates; proper education and enforcement about the local ordinance and state youth access laws are always needed.
Before and after youth sales rate data is available for the following 41 California communities with strong licensing ordinances- Banning, Baldwin Park, Beaumont, Berkeley,
Burbank, Calabasas, Carpentaria, Coachella, Contra Costa County, Corona, Davis, Delano, Desert Hot Springs, El
Cajon, Elk Grove, Goleta, Grass Valley, Grover Beach,
Kern County, La Canada Flintridge, Los Angeles County,
Morgan Hill, Murrieta, Norco, Oroville, Pasadena, Riverside, Rosemead, Sacramento, Sacramento County, San Fernando,
San Francisco, San Luis Obispo, San Luis Obispo County, Santa Barbara County, Sonoma County, Tehachapi, Vista,
Winters, Woodland, and Yolo County.
For more resources on these ordinances, including
the Matrix of Strong Local Tobacco Retailer Licensing
Ordinances with policy and enforcement details for every strong ordinance in the state, visit:
www.Center4TobaccoPolicy.org
For model tobacco retailer licensing ordinance language, visit ChangeLab Solutions at changelabsolutions.org
SEPTEMBER 2018
Packet Pg. 396
Attachment: Tobacco Retailer Licensing is Effective September 2018 (9.1(c)--Accept Report and Provide Direction Regarding Tobacco THE CENTER FOR TOBACCO POLICY & ORGANIZING Page 2 of 2
The Center for Tobacco Policy & Organizing | American Lung Association in California 1531 I Street, Suite 201, Sacramento, CA 95814 | Phone: (916) 554.5864 | Fax: (916) 442.8585 ©2018. California Department of Public Health. Funded under contract #14-10013.
CENTER4TOBACCOPOLICY.ORG
LUNG.ORG/CALIFORNIA
Table of youth sales rates before and after the adoption of a strong tobacco retailer licensing ordinance City/County Date Passed Annual Fee Youth Sales Rate
Before Ordinance
Most Recent
Youth Sales Rate
Banning August 2006 $350 77% 21%
Baldwin Park October 2008 $342 34% 9%
Beaumont December 2006 $350 63% 20%
Berkeley December 2002 $427* 38% 4.2%
Burbank February 2007 $235 26.7% 5%
Calabasas June 2009 $0* 30.8% 5%
Carpentaria April 2012 $379 26% 7%
Coachella July 2009 $350 69% 11%
Contra Costa County January 2003 $160* 37% 13%
Corona October 2005 $350 50% 17%
Davis August 2007 $377 30.5% 12%
Delano June 2008 $165 23% 5.6%
Desert Hot Springs August 2007 $350 48% 4%
El Cajon June 2004 $698 40% 1%
Elk Grove September 2004 $270 17% 16.7%
Goleta May 2014 $534 21% 7%
Grass Valley November 2009 $100 27% 0%
Grover Beach September 2005 $244 46% 17%
Kern County November 2006 $165 34% 13.3%
La Canada Flintridge June 2009 $50* 47.1% 0%
Los Angeles County December 2007 $235 30.6% 8%
Morgan Hill April 2014 $125 15% 0%
Murrieta May 2006 $350 31% 7%
Norco March 2006 $350 40% 6%
Oroville March 2013 $30 22.6% 0%
Pasadena January 2004 $225 29% 0%
Riverside May 2006 $350 65% 31%
Rosemead July 2017 $235 32% 22%
Sacramento March 2004 $324 27% 15.1%
Sacramento County May 2004 $287 21% 7.1%
San Fernando October 2008 $250 38.5% 3%
San Francisco November 2003 $175* 22.3% 13.4%
San Luis Obispo August 2003 $255 17% 13%
San Luis Obispo County October 2008 $342 33.3% 5%
Santa Barbara County November 2010 $235 21% 3%
Sonoma County April 2016 $350 18.4% 1.3%
Tehachapi February 2007 $165 8% 16.7%
Vista May 2005 $250 39% 1.9%
Winters January 2016 $377 47% 19%
Woodland June 2015 $377 32% 8%
Yolo County May 2006 $377 28% 7.8%
*City or County fee does not fully cover administration and enforcement of the tobacco-retailer license. Rather, the fee is supplemental with another stable source of funds, such as the Master Settlement Agreement (MSA) funds or general funds. See the Center’s Matrix of Strong Local Tobacco Retailer Licensing Ordinances for full details about the administration and enforcement of these ordinances.
Packet Pg. 397
Attachment: Tobacco Retailer Licensing is Effective September 2018 (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Current Use of Any Tobacco Product by Demographic or Risk Factors 2023 Data Summary for
Shasta County
Ever and Current Use by Product
1 The California Youth Tobacco Survey (CYTS) is a project of the California Department of Public Health’s California Tobacco Prevention Program. It aims to obtain statewide estimates of use for various tobacco products by middle and high school students in California to inform statewide prevention and intervention efforts. For Shasta County in 2023, 1,022 students in 10th or 12th grades at 6 high schools completed the survey. This report summarizes their key responses. †Estimate is unstable. LCCs = Little cigars and cigarillos. HTPs = Heated tobacco products/heat-not-burn. Pouches = nicotine pouches. Co-use is defined as use of both products in the student’s lifetime (ever) or in the past 30 days (current). Use of alcohol or marijuana and co-use of marijuana and tobacco are included for comparison only and are not included in rates of overall tobacco use. †Estimate is unstable. ††The difference between this county’s and all other counties’ estimates was statistically significant to p < 0.05. 1All races and ethnicities reported by each respondent are shown. For example, someone who reports being Black and Hispanic is shown in both the Black and Hispanic categories. 2No estimates reported for other gender identities due to low response rates.
Approximately 16.8% of students in Shasta County reported using a tobacco product in the last 30 days. This is higher than the average use in California of 7.3%.††
45.7 22.7
37.0 16.5
30.8 11.4
37.1 14.8
12.4 2.6
8.6 1.9
5.8 1.9
6.1†
1.9 1.7 0.6
3.4 1.0
8.9 4.1†
PouchesHookahHTPsSmokeless
Tobacco Products
LCCsCigarsCigarettesVapesCo-use of
Marijuana
and Tobacco
MarijuanaAlcohol
0%
50%
Ever Used Product Currently Use Product
Average
County Use16.8%
11.0†
14.0† 17.8 17.8 16.4 16.6
18.9 14.3
19.2 15.7
13.6 20.6 21.8
Any Disc-
rimination
Fair to PoorGood to
Excellent
Not LGBTQ+LGBTQ+MaleFemaleMultiracialOtherWhiteHispanicBlackAsian Race/Ethnicity1
(Categories are not exclusive) Gender2
Sexual
Orientation Mental Health
0%
30%
Packet Pg. 398
Attachment: California Youth Tobacco Survey-Shasta County Data (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing)
82.2% of students who ever used tobacco reported trying vapes as their first tobacco product.
On average, students first reported using tobacco at age 13.
51.3% of students who ever vaped tried to
stop using within the last year.
How Students
Obtained Their Vapes
Most Selected
Reason for Vaping
Susceptibility to Product Use Self-reported likelihood of trying a product if it were offered to them by the student’s best friend (among never users of the product).
Most common way students who vape
report getting their vapes, pods, or e-liquid.
Among students who vape, the most common
reason for vaping.
LCCs = Little cigars and cigarillos. HTPs = Heated tobacco products/heat-not-burn. Pouches = nicotine pouches.
Alcohol and marijuana use are included for comparison only and are not included in rates of overall tobacco use. 2023 CYTS Data Summary for Shasta County
†Estimate is unstable.
2 32.6
23.4 16.0
11.0†
4.5†
12.4†
Get them
some other
way
Take them
from
someone
Ask someone
for them
Someone
gives them
to me
Ask someone
to buy them
for me
Buy them
myself
0%
40%
7.6 6.0
4.7 3.2
7.2 2.3
4.4 6.0
3.6 Alcohol Marijuana Vapes Cigarettes LCCs Smokeless HTPs Hookah Pouches 0%
10%
31.6 15.9
14.0 10.9
8.0 It looks coolTo have a good
time with my
friends
For the nicotine/uni00A0
buzz
To fit in/peer/uni00A0
pressure
To relax or relieve
stress and anxiety
0%
40%
Packet Pg. 399
Attachment: California Youth Tobacco Survey-Shasta County Data (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) 2023 CYTS Data Summary for Shasta County
Saw Use vs Saw Someone Caught
Perceived Use Tobacco Use at School
in Past 30 Days
Saw Product Use
on Social Media
Levels of use at school and consequences for use for each product in the past 30 days.
Percent responding “Most” or “All” to “How
many students at your school use the following
products?”
Marijuana use is included for comparison only and is not included in rates of overall tobacco use. †Estimate is unstable. LCCs = Little cigars and cigarillos. Alcohol and marijuana use are included for comparison only and are not included in rates of overall tobacco use.
Alcohol and marijuana use are included for comparison only and are not included in rates of overall tobacco use. †Estimate is unstable. 3 For more information on
tobacco use in California,
see the full California Youth
Tobacco Survey report. This can
be found by searching online
for CDPH Tobacco Control Fact
Sheets and Reports.
Reported “Sometimes,” “Often, ” or “Always”
seeing someone on social media use these products
in the last 30 days.
Last 30-day prevalence of use of
tobacco products at school.
23.7 12.6
35.8 28.5
70.7†
65.5†
4.8 3.1 2.8 2.2
Alcohol Marijuana Vapes Cigarettes LCCs
0%
80%
Saw Product Used
Saw Someone Caught
Using Product
55.8 43.7
67.2 6.9
CigarettesVapesMarijuanaAlcohol
0%
80%
49.1 58.0
28.3 CigarettesVapesMarijuana
0%
80%
71.3†
65.6†
49.3 Used tobacco at school
(among tobacco users)
Saw someone caught
using/uni00A0tobacco
Saw tobacco used
0%
80%
Packet Pg. 400
Attachment: California Youth Tobacco Survey-Shasta County Data (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) RTI International is a registered trademark and trade name of Research Triangle Institute.
The RTI logo is a registered trademark of Research Triangle Institute 2150 Shattuck Avenue, Suite 800 Berkeley, CA 94704
Authors
Rachel Clodfelter, MPH
Lauren McCarl Dutra, ScD, MA
Brian Bradfield, BA
Sara Russell, MS
Burton Levine, PhD
Annette von Jaglinsky, MPH
Prepared for the California
Department of Public Health,
California Tobacco Prevention
Program by RTI International
2023 Results
Packet Pg. 401
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing)
RTI Project Number
0217905.004
Results of the 2023
California Youth Tobacco Survey
Report
March 2024
Prepared for
California Department of Public Health,
California Tobacco Prevention Program
Prepared by
Rachel Clodfelter, MPH
Lauren McCarl Dutra, ScD, MA
Brian Bradfield, BA
Sara Russell, MS
Burton Levine, PhD
Annette von Jaglinsky, MPH
RTI International
2150 Shattuck Avenue, Suite 800
Berkeley, CA 94704
Suggested citation: Clodfelter, R., Dutra, L. M., Bradfield, B., Russell, S., Levine, B., & von Jaglinsky, A. (2023).
Annual results report for the California Youth Tobacco Survey 2023. RTI International. _________________________________
RTI International is a trade name of Research Triangle Institute.
RTI and the RTI logo are U.S. registered trademarks of Research Triangle Institute.
Packet Pg. 402
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing)
iii
Contents
Section Page
Executive Summary ES-1
1. Tobacco Use Behavior, Overall and for Priority Populations 1-1
1.1 Tobacco Use Among High School Respondents ........................................... 1-1
1.2 Frequency of Tobacco Use ....................................................................... 1-2
1.3 Tobacco Use by Gender Identity ............................................................... 1-3
1.4 Tobacco Use by Race/Ethnicity ................................................................. 1-4
1.5 Tobacco Use by Grade ............................................................................ 1-6
1.6 Tobacco Use by LGBTQ+ Status ............................................................... 1-6
1.7 Tobacco Use by General Mental Health ...................................................... 1-7
1.8 Polytobacco Use ..................................................................................... 1-8
1.9 Tobacco Use by Experiences of Discrimination ............................................ 1-9
1.10 Vaping Cessation .................................................................................. 1-12
1.11 Summary ............................................................................................. 1-14
2. Use of Flavored Tobacco Products 2-1
2.1 Flavored Tobacco Use ............................................................................. 2-1
2.2 Flavored Tobacco Use by Demographics .................................................... 2-2
2.3 Use of Specific Flavored Tobacco Products by Demographics ........................ 2-3
2.4 Use of Specific Flavor Types .................................................................... 2-7
2.5 Perceived Accessibility of Flavored Tobacco Products ................................... 2-9
2.6 Summary .............................................................................................. 2-1
3. Access to Vapes and Cigarettes 3-1
3.1 Acquisition of Vapes ............................................................................... 3-1
3.2 Acquisition of Cigarettes ......................................................................... 3-2
3.3 Perceived Accessibility of Vapes ............................................................... 3-2
3.4 Perceived Access for Cigarettes ................................................................ 3-5
3.5 Summary ............................................................................................. 3-10 Packet Pg. 403
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing)
iv
4. Secondhand Exposure and Other Environmental Influences 4-1
4.1 Exposure to Secondhand Vapor and Tobacco Smoke in Car or Room and Outside ................................................................................................ 4-1
4.2 Exposure to Secondhand Vapor and Tobacco Smoke by Race/Ethnicity .......... 4-4
4.2.1 Indoors ....................................................................................... 4-4
4.2.2 Outside ....................................................................................... 4-6
4.3 Home Bans on Vaping and Tobacco Smoking ............................................. 4-8
4.4 Exposure to Vape and Cigarette Advertisements in Last 30 Days .................. 4-11
4.5 Summary ............................................................................................. 4-13
5. Susceptibility to Future Tobacco Use and Perceptions of Vaping and Smoking 5-1
5.1 Susceptibility to Vapes, Cigarettes, and LCCs by Demographics .................... 5-1
5.2 Susceptibility to Vape and Cigarette Use by Peer Vaping and Smoking ........... 5-4
5.3 Reasons for Vaping ................................................................................ 5-5
5.4 Adult Disapproval of Vaping and Smoking .................................................. 5-6
5.5 Peer Disapproval of Vaping and Smoking ................................................... 5-7
5.6 Summary .............................................................................................. 5-9
6. Tobacco Endgame Attitudes 6-1
6.1 Summary .............................................................................................. 6-3
7. Geographic Differences 7-1
7.1 Rurality ................................................................................................ 7-1
7.2 County-Level Estimates .......................................................................... 7-2
7.3 Region 7-9
7.4 Summary .............................................................................................. 7-1
8. Marijuana Use 8-2
8.1 Marijuana Use ....................................................................................... 8-2
8.2 Marijuana Use and Tobacco Co-use ........................................................... 8-3
8.3 Exposure to Secondhand Marijuana Smoke in Last 2 Weeks ......................... 8-5
8.4 Acquisition of Marijuana .......................................................................... 8-7
8.5 Summary .............................................................................................. 8-8 Packet Pg. 404
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing)
v
9. Changes in Tobacco Use Between 2022 and 2023 9-1
9.1 Tobacco Product Use .............................................................................. 9-1
9.2 Flavored Tobacco Product Use .................................................................. 9-1
9.3 Current Tobacco Use by Demographics ..................................................... 9-2
9.4 Marijuana Use and Marijuana Tobacco Co-use ............................................ 9-7
9.5 Summary .............................................................................................. 9-7
10. 8th-Grade Tobacco Use 10-1
10.1 Tobacco Use among 8th-Grade Respondents ............................................. 10-1
10.2 Flavored Tobacco Use among 8th-Grade Respondents ................................ 10-2
10.3 Exposure to Secondhand Vapor and Tobacco Smoke in Last 2 Weeks Among 8th-Grade Respondents ............................................................... 10-3
10.4 Access to Vapes and Cigarettes Among 8th-Grade Respondents ................... 10-4
10.5 Marijuana Use Among 8th-Grade Respondents .......................................... 10-6
10.6 Exposure to Secondhand Marijuana Smoke in Last 2 Weeks ........................ 10-6
10.7 Summary ............................................................................................. 10-7
11. Conclusion 11-1
11.1 Implications ......................................................................................... 11-2 Appendix
A: List of Terms A-1
B: Survey Methodology of 2023 California Youth Tobacco Survey B-1
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Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing)
vi
Figures
Number Page
1. Map of County Groups ................................................................................. 7-3
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Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing)
vii
Tables
Number Page
1-1. Prevalence of Ever and Current Use of Tobacco Products Among High School Respondents .............................................................................................. 1-2 1-2. Frequency of Current Use Among High School Respondents Who Were Currently Using a Given Tobacco Product ........................................................ 1-2 1-3. Prevalence of Current Use of Tobacco Products Among High School Respondents, by Gender Identity................................................................... 1-3
1-4a. Prevalence of Current Use of Tobacco Products Among High School Respondents, by Race/Ethnicity .................................................................... 1-4
1-4b. Prevalence of Current Use of Tobacco Products Among High School Respondents, by Race/Ethnicity .................................................................... 1-5
1-5. Prevalence of Current Use of Tobacco Products Among High School Respondents, by Grade ................................................................................ 1-6
1-6. Prevalence of Current Tobacco Use Among High School Respondents, by LGBTQ+ Status ........................................................................................... 1-7 1-7. Prevalence of Current Use of Tobacco Products Among High School Respondents, by General Mental Health .......................................................... 1-8
1-8. Prevalence of Current Polytobacco Use Among High School Respondents Currently Using Tobacco, by Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status ........................................................................................... 1-8 1-9. Prevalence of Experiences of Discrimination in the Last Month Among High School Respondents ................................................................................... 1-10
1-10. Prevalence of Experiences of Discrimination in the Last Month Among High School Respondents, by Current Tobacco Use ................................................. 1-10
1-11. Perceived Reasons for Experiencing Discrimination in the Last Month Among High School Respondents, by Current Tobacco User Status .............................. 1-11 1-12. Percentage of Respondents Who Reported Attempting to Quit Vaping in the Last 12 Months or Intending to Quit Vaping in the Next 30 Days Among Currently Vaping High School Respondents .................................................... 1-13
2-1. Descriptive Analysis of Current Flavored Tobacco Product Use by Product, Among Respondents Currently Using Tobacco ................................................. 2-1
2-2. Prevalence of Current Use of Any Flavored Tobacco Among High School Respondents Who Reported Currently Using These Products, by Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status ........................................ 2-2 2-3. Prevalence of Current Flavored Tobacco Product Use Among High School Respondents Who Reported Currently Using Each Tobacco Product by Gender Identity ..................................................................................................... 2-4 2-4a. Prevalence of Current Flavored Tobacco Product Use Among High School Respondents Who Reported Currently Using Each Tobacco Product by Race/Ethnicity ............................................................................................ 2-5
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2-4b. Prevalence of Current Flavored Tobacco Product Use Among High School Respondents Who Reported Currently Using Each Tobacco Product by Race/Ethnicity ............................................................................................ 2-5 2-5. Prevalence of Current Flavored Tobacco Product Use Among High School Respondents Who Reported Currently Using Each Tobacco Product by Grade ....... 2-6
2-6. Prevalence of Current Flavored Tobacco Product Use Among High School Respondents Who Reported Currently Using Each Tobacco Product, by LGBTQ+ Status ........................................................................................... 2-7 2-7a. Prevalence of Endorsing Specific Flavors Among High School Respondents Who Reported Currently Using Each Tobacco Product ....................................... 2-7
2-7b. Prevalence of Endorsing Specific Flavors Among High School Respondents Who Reported Currently Using Each Tobacco Product ....................................... 2-8
2-8. Prevalence of Perceiving That it was Easy to Access Flavored Tobacco Products Among High School Respondents ...................................................... 2-1
3-1. Methods of Accessing Vapes Among High School Respondents Who Were Currently Vaping, by Grade .......................................................................... 3-1
3-2. Methods of Accessing Cigarettes Among High School Respondents Who Were Currently Smoking Cigarettes, by Grade ......................................................... 3-1
3-3. Prevalence of Perceiving That It Was Easy to Access Vapes Among High School Respondents, by Vaping Status ........................................................... 3-2
3-4. Prevalence of Perceiving That It Was Easy to Access Vapes from a Store Among High School Respondents, by Vaping Status and Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status ..................................................... 3-3 3-5. Prevalence of Perceiving That It Was Easy to Access Vapes from the Internet Among High School Respondents, by Vaping Status and Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status ..................................................... 3-4
3-6. Prevalence of Perceiving That It Was Easy to Access Vapes from Someone Else Among High School Respondents, by Vaping Status and Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status ..................................................... 3-5
3-7. Prevalence of Perceiving That It Was Easy to Access Cigarettes Among High School Respondents, by Cigarette Smoking Status ........................................... 3-6
3-8. Prevalence of Perceiving That It Was Easy to Access Cigarettes from a Store Among High School Respondents, by Cigarette Smoking Status and Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status ........................................ 3-7
3-9. Prevalence of Perceiving That It Was Easy to Access Cigarettes from the Internet Among High School Respondents, by Cigarette Smoking Status and Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status ............................. 3-8
3-10. Prevalence of Perceiving That It Was Easy to Access Cigarettes from Someone Else Among High School Respondents, by Cigarette Smoking Status and Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status ............................. 3-9
4-1. Prevalence of Last-2-Week Exposure to Vapor and Tobacco Smoke in Car or Room Among High School Respondents, by Vaping and Tobacco Smoking Status ....................................................................................................... 4-2
4-2. Prevalence of Last-2-Week Exposure to Vapor and Tobacco Smoke Outside Among High School Respondents, by Vaping and Tobacco Smoking Status .......... 4-3 4-3. Prevalence of Last-6-Month Exposure to Tobacco Smoke in Multiunit Housing Among High School Respondents Living in Multiunit Housing ............................. 4-3 Packet Pg. 408
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4-4. Prevalence of Last-2-Week Exposure to Vapor or Tobacco Smoke in a Car or Room Among High School Respondents, by Race/Ethnicity ................................ 4-4 4-5. Prevalence of Last-2-Week Exposure to Vapor in Car or Room Among High School Respondents, by Vaping Status and Race/Ethnicity ................................ 4-5 4-6. Prevalence of Last-2-Week Exposure to Tobacco Smoke in Car or Room Among High School Respondents, by Tobacco Smoking Status and Race/Ethnicity ............................................................................................ 4-5 4-7. Prevalence of Last-2-Week Exposure to Vapor or Tobacco Smoke Outside Among High School Respondents, by Race/Ethnicity ......................................... 4-6 4-8. Prevalence of Last-2-Week Exposure to Vapor Outside Among High School Respondents, by Vaping Status and Race/Ethnicity .......................................... 4-7 4-9. Prevalence of Last-2-Week Exposure to Tobacco Smoke Outside Among High School Respondents, by Tobacco Smoking Status and Race/Ethnicity.................. 4-8 4-10. Prevalence of Complete Home Bans on Vaping Among High School Respondents, by Current Use of Vapes ........................................................... 4-9
4-11. Prevalence of Complete Home Bans on Tobacco Smoking Among High School Respondents, by Current Use of Smoked Tobacco ............................................ 4-9
4-12. Prevalence of Complete Home Bans on Vaping and Tobacco Smoking Among High School Respondents, by Race/Ethnicity .................................................. 4-10
4-13. Prevalence of Complete Home Vaping Bans Among High School Respondents, by Vaping Status and Race/Ethnicity ............................................................. 4-10 4-14. Prevalence of Complete Home Bans on Tobacco Smoking Among High School Respondents, by Smoking Status and Race/Ethnicity ....................................... 4-11
4-15. Prevalence of Having Favorite Vaping Advertisement Among High School Respondents, by Vaping Status .................................................................... 4-12
4-16. Last-30-Day Social Media Exposure to Vaping Among High School Respondents, by Vaping Status .................................................................... 4-12 4-17. Last-30-day Social Media Exposure to Smoking Among High School Respondents, by Smoking Status ................................................................. 4-13 4-18. Attention Paid to Social Media Posts About Vaping Among High School Respondents, by Vaping Status .................................................................... 4-13
5-1. Susceptibility to Vapes, Cigarettes, and/or LCCs Among High School Respondents Who Had Never Used One or More of These Products, by Gender Identity, Race/Ethnicity, Grade, LGBTQ+ Status, and General Mental Health ........ 5-2 5-2. Proportion of High School Respondents Who Had Never Vaped, Never Smoked Cigarettes, and/or Never Smoked LCCs Who Were Susceptible to Future Use of These Products, by Gender Identity, Race/Ethnicity, Grade, LGBTQ+ Status, and General Mental Health ........................................................................... 5-3
5-3. Prevalence of Susceptibility to Vaping Among High School Respondents Who had Never Vaped, by Friend Vaping Status ..................................................... 5-4 5-4. Prevalence of Susceptibility to Cigarette Smoking Among High School Respondents Who Had Never Smoked Cigarette, by Friend Smoking Status ......... 5-5
5-5. Reported Reasons for Vaping Among High School Respondents Who Were Currently Vaping ......................................................................................... 5-5
5-6. Percentage of High School Respondents Who Believed That Adults Would Feel Negatively About Them Vaping and Smoking, by Demographics ......................... 5-6
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5-7. Percentage of High School Respondents Who Believed That Close Friends and Other Respondents at School Would View Vaping Negatively, by Vaping Status .... 5-7 5-8. Percentage of High School Respondents Who Believed That Close Friends and Other Respondents at School Would View Smoking Negatively, by Smoking Status ....................................................................................................... 5-7
5-9. Percentage of High School Respondents Who Believed That Close Friends or Other Respondents Would Feel Negatively About Them Smoking Cigarettes, by Demographics ........................................................................................ 5-8 6-1. Agreement with Tobacco Endgame Policies Among High School Respondents, by Vaping Status and Cigarette Smoking Status .............................................. 6-1
6-2. Agreement With Tobacco Endgame Policies Among High School Respondents, by Demographics ........................................................................................ 6-2
7-1. Prevalence of Current Use of Tobacco Products Among High School Respondents, by Rurality .............................................................................. 7-1
7-2. Percentage of Respondents Who Reported Intending to Quit Vaping in the Next 30 Days Among High School Respondents Who Were Currently Vaping, by Rurality ................................................................................................. 7-2
7-3. Prevalence of Ever and Current Use of Any Tobacco Products Among High School Respondents, by County Grouping ....................................................... 7-3 7-4a. Prevalence of Current Use of Vapes, Cigarettes, and LCCs Among High School Respondents, by County Grouping ................................................................. 7-6
7-4b. Prevalence of Current Use of Cigars, Hookah, and Smokeless Tobacco Among High School Respondents, by County Grouping ................................................ 7-7
7-4c. Prevalence of Current Use of Heated Tobacco Products and Nicotine Pouches Among High School Respondents, by County Grouping ..................................... 7-8
7-5. Prevalence of Ever and Current Use of Any Tobacco Products Among High School Respondents, by Region ..................................................................... 7-9
7-6. Prevalence of Current Use of Tobacco Products Among High School Respondents, by Region .............................................................................. 7-10
8-1. Prevalence of Marijuana Use Among High School Respondents, by Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status ........................................ 8-2 8-2. Usual Mode of Marijuana Use Among High School Respondents Who Reported Currently Using Multiple Marijuana Products .................................................... 8-3
8-3. Prevalence of Current Marijuana-Only Use and Current Co-Use of Marijuana and Any Tobacco Product Among High School Respondents, by Gender Identity, Race/Ethnicity, and Grade ............................................................... 8-4 8-4. Prevalence of Current Co-Use of Marijuana and Tobacco Among High School Respondents Currently Using Marijuana, by Tobacco Product Currently Used ....... 8-5 8-5. Prevalence of Last-2-Week Exposure to Marijuana Smoke in Car or Room or Outside Among High School Respondents, by Race/Ethnicity ............................. 8-6 8-6. Prevalence of Last-2-Week Exposure to Marijuana Smoke in Car or Room Among High School Respondents, by Race/Ethnicity and Marijuana Use Status .... 8-6 8-7. Prevalence of Last-2-Week Exposure to Marijuana Smoke Outside Among High School Respondents, by Race/Ethnicity and Marijuana Use Status ............... 8-7 8-8. Method of Acquiring Marijuana Among High School Respondents Currently Using Marijuana .......................................................................................... 8-8
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9-1. Prevalence of Ever and Current Tobacco Product Use by Year Among High School Students .......................................................................................... 9-1 9-2. Prevalence of Flavored Tobacco Product Use by Year Among High School Students Who Were Currently Using Each Product ........................................... 9-2 9-3. Prevalence of Current Any Tobacco Use by Year and by Gender Identity Among High School Students ........................................................................ 9-2 9-4. Prevalence of Current Vaping, Cigarette Smoking, and LCC Smoking by Year and by Gender Identity Among High School Students ....................................... 9-3 9-5. Prevalence of Current Any Tobacco Use by Year and by Race/Ethnicity Among High School Students ................................................................................... 9-3
9-6. Prevalence of Current Vaping, Cigarette Smoking, and LCC Smoking by Year and Race/Ethnicity Among High School Students ............................................. 9-4
9-7. Prevalence of Current Tobacco Use by Year and by Grade Among High School Students .................................................................................................... 9-5
9-8. Prevalence of Current Any Tobacco Use by Year and by LGBTQ+ Status Among High School Students ........................................................................ 9-5 9-9. Prevalence of Current Vaping, Cigarette Smoking, and LCC Smoking by Year and LGBTQ+ Status Among High School Students ............................................ 9-6
9-10. Prevalence of Current Any Tobacco Use by Year and by General Mental Health Among High School Students ........................................................................ 9-6
9-11. Prevalence of Current Any Tobacco Use By Year and Rurality Among High School Students .......................................................................................... 9-6
9-12. Prevalence of Ever and Current Marijuana Use and Marijuana Co-Use by Year Among High School Students ........................................................................ 9-7 10-1. Prevalence of Tobacco Use Among 8th-Grade Respondents .............................. 10-1 10-2. Prevalence of Current Use of Any Tobacco Among 8th-Grade Respondents, by Gender Identity, Race/Ethnicity, LGBTQ+ Status, and Mental Health Status ........ 10-2 10-3. Prevalence of Flavored Tobacco Use Among 8th-Grade Respondents Currently Using Each Tobacco Product ........................................................................ 10-3 10-4. Prevalence of Last-2-Week Exposure to Vapor and Tobacco Smoke in Car or Room, Outside, or Multiunit Housing Among 8th-Grade Respondents Living in Multiunit Housing ....................................................................................... 10-4 10-5. Method of Accessing Vapes (or Pods or e-Liquid) Among 8th-Grade Respondents Who Were Currently Vaping ...................................................... 10-4 10-6. Methods of Accessing Cigarettes Among 8th-Grade Respondents Who Were Currently Smoking Cigarettes ...................................................................... 10-5 10-7. Prevalence of Marijuana Use Among 8th-Grade Respondents ............................ 10-6 10-8. Prevalence of Last-2-Week Exposure to Marijuana Smoke in Car or Room or Outside Among 8th-Grade Respondents ........................................................ 10-7
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Executive Summary
This report summarizes the main results from the 2023 California Youth Tobacco Survey (CYTS). The CYTS has been administered annually to 8th-, 10th-, and 12th-grade students from California middle and high schools since 2021 and prior to 2021, once every 2 years.
Data collection for the 2023 survey occurred between January and June 2023. Schools and classrooms within schools were randomly selected. The sample was designed to provide statewide and county-level estimates of tobacco use among youth in California. In 2023, we collected data from 356 schools and 41,755 students who consented to participate in the survey and provided valid survey data (see Appendix B for additional information). The survey was administered online during the school day. Most respondents completed the survey at their school, except for those engaged in virtual learning or independent study.
The survey was designed to assess the use of, knowledge of, and attitudes toward tobacco products, including cigarettes, vapes, little cigars or cigarillos (LCCs), cigars, hookah, smokeless tobacco, heated tobacco products (HTPs), and nicotine pouches. The survey also examined social and environmental exposure to tobacco. Marijuana and alcohol were included in the survey because the co-use of marijuana and alcohol with tobacco products is common. This report primarily focuses on high school respondents (16,255 respondents in 10th grade and 14,711 in 12th grade). Key results for 8th graders (10,789) are presented in Chapter 10.
This year’s report includes tobacco prevalence estimates by rurality, region, and county or county group for any tobacco use and the use of specific products. In addition, we compare the prevalence of current tobacco use for high school students between the 2022 and 2023 administrations of the CYTS.
Appendix B provides a brief overview of the survey methodology. Additional details about the sampling strategy, survey administration, and statistical analysis can be found in the Technical Report on Analytic Methods and Approaches Used in the California Youth Tobacco Survey 2023, by Russell et al.
1 Appendix B also includes information about comparing CYTS estimates between 2022 and 2023 and information about the criteria we used to label estimates as imprecise and to suppress specific estimates. For definitions of the terminology included in table footnotes, see the definitions for analytic terms section in Appendix A.
ES-1. Key Findings
ES-1.1 Tobacco Use Behavior (Chapters 1 and 2)
In 2023, 21.6% of California high school respondents had ever used any tobacco product, and 7.3% currently used tobacco.
1 Russell, S., Dutra, L. M., Carter, S.E., Baum, L., & Levine, B. (2023). Technical report for the California Youth Tobacco Survey 2023. RTI International.
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Vapes were the most commonly used tobacco product among high school respondents (18.3% ever use, 5.9% current use), regardless of gender identity, race/ethnicity, and grade.
Ever use of vapes was 18.3% among high school respondents, and current use was
5.9%.
Ever cigarette smoking prevalence was 5.6%; 1.2% of high school respondents reported currently smoking cigarettes.
Current prevalence of use of nicotine pouches was 1.1%. Current prevalence was less than 1% for LCCs, cigars, HTPs, smokeless tobacco, and hookah.
Current tobacco use prevalence varied by demographics. Current use was highest among White (10.7%) respondents, 12th-grade (9.4%) respondents, lesbian, gay, bisexual, transgender, queer or questioning (LGBTQ+) (11.4%) respondents, and respondents who reported poor mental health (14.8%).
Approximately a quarter (27.2%) of respondents who reported currently using tobacco also reported currently using two or more tobacco products. Polytobacco use varied by LGBTQ+ status.
Two-thirds of high school students (66.1%) reported experiencing one or more types of discrimination a few times or more often in the past 30 days. The most commonly reported experience of discrimination was being treated with less courtesy or respect than others, with 6.9% of respondents reporting experiencing this almost every day,
12.6% reporting experiencing it at least once a week, and 32.1% reporting experiencing it a few times in the past month.
Experiences of discrimination were more commonly reported by respondents currently using tobacco than respondents not currently using tobacco. Respondents who were currently using tobacco (11.5%) reported being treated with less courtesy or respect than others almost every day, compared to 6.4% of non-current tobacco users.
Almost half of respondents who were currently vaping reported attempting to quit vaping in the last 12 months (40.8%), and approximately the same percentage reported intending to quit vaping in the next 30 days (38.8%). The survey asked respondents who were currently using tobacco which flavor they used most often (e.g., unflavored, fruit, mint). A substantial majority of respondents who reported currently using tobacco also reported using flavored tobacco products (85.6%), with flavored tobacco use being highest for vapes (89.1%) out of all tobacco products. Fruit was the most popular flavor of vapes reported by respondents who were currently vaping.
In terms of flavored tobacco use by demographics, among respondents who reported currently using tobacco, current use of flavored tobacco was highest among respondents who selected “something else” as their gender identity (90.1%) and 10th-grade respondents (86.6%). In terms of race/ethnicity, use of flavored tobacco was highest among African American or Black respondents and lowest among Hispanic respondents. While 96.0% of respondents who reported current use and identified as African American or Black reported using flavored tobacco, only 82.7% of respondents who reported current use and identified as Hispanic reported using flavored tobacco.
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ES-1.2 Methods of Accessing Vapes and Cigarettes (Chapter 3) Among respondents who were currently vaping, the most commonly reported method of obtaining vapes was buying them (34.9%). Among respondents who reported buying their own vapes, the most common method of buying them was from someone else (30.5%).
Among respondents who were currently smoking cigarettes, the most commonly reported method of obtaining cigarettes was buying them (26.5%). Reports of respondents buying their own vapes or cigarettes varied by grade; 12th- grade respondents reported higher prevalence of buying vapes (38.8%) than 10th- grade respondents (28.7%), and 10th-grade respondents reported higher prevalence of buying cigarettes (28.5%) than 12th-grade respondents (25.5%). Overall, high school respondents reported that it was easy to obtain vapes and cigarettes. For vapes, 49.9% of respondents reported that it was easy to access them from a store, 67.3% that it was easy to access them from the internet, and
71.6% that it was easy to access them from someone else. For cigarettes, 37.0% of respondents reported it was easy to access them from a store, 58.7% that it was easy to access them from the internet, and 60.8% that it was easy to access them from someone else.
ES-1.3 Sec ondhand Exposure and Other Environmental Influences (Chapter 4)
Regarding secondhand exposure to vapes, 29.0% of high school respondents reported being exposed in a car or room in the last 2 weeks. More than a third (42.1%) reported being exposed outside during the same time period. For secondhand tobacco smoke exposure, 14.1% of high school respondents reported being exposed to secondhand smoke in a car or room in the last 2 weeks.
More than half (57.8%) reported being exposed to secondhand smoke outside. Among high school respondents who reported living in multiunit housing (MUH) (29.7%), approximately half (48.8%) reported being exposed to secondhand tobacco smoke in the home in the last 6 months.
Respondents who were currently vaping reported higher prevalence of exposure to secondhand vapor in a car or room in the last 2 weeks (80.1%), compared with respondents who formerly vaped (49.9%) and those who had never vaped (22.2%). Respondents who were currently smoking tobacco reported higher prevalence of exposure to secondhand tobacco smoke in a car or room in the last 2 weeks (60.1%), compared with former (30.5%) and never smokers (12.4%). Respondents who were currently vaping or smoking tobacco reported higher prevalence of exposure to secondhand vapor or tobacco smoke outside in the last 2 weeks (76.1% for vaping, 84.7% for smoking), compared with those who reported former (56.0% for vaping, 65.8% for smoking) and never use (37.6% for vaping,
56.9% for smoking).
Most high school respondents reported having a complete ban on vaping (81.0%) and tobacco smoking (78.4%) in the home. Generally, a higher percentage of respondents who had never vaped reported complete home bans compared to respondents who were currently vaping or had formerly vaped.
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Few (3.8%) respondents reported having a favorite vaping advertisement. Over two-thirds (71.8%) of respondents reported being exposed to vaping (rarely, sometimes, often, or always) on social media in the last 30 days. Respondents who currently (84.5%) vaped and had formerly (84.8%) vaped more commonly reported being exposed to vaping advertisements than respondents who had never vaped (69.1%).
About half of respondents (55.9%) reported being exposed to cigarette smoking on social media (rarely, sometimes, often, or always) in the last 30 days. Respondents who were currently smoking cigarettes (72.1%) or formerly smoked cigarettes (72.4%) reported being exposed to cigarette smoking on social media more than respondents who had never smoked (55.0%).
Less than half of respondents (40.9%) reported paying any attention to social media posts about vaping. Attention to these posts varied by vaping status, with a higher percentage of respondents who currently vaped (55.1%) reporting they paid attention, compared to respondents who had formerly (48.1%) and never vaped (38.8%).
ES-1.4 Tobacco Susceptibility and Knowledge, Attitudes, and Beliefs (Chapter 5)
Overall, 44.3% of respondents who had never used tobacco were susceptible to one or more tobacco products, and 37.8% were susceptible to vapes specifically. Among high school respondents who had never smoked, 20.1% were susceptible to future cigarette smoking.
Among respondents who had never smoked LCCs, 21.4% were susceptible to future use of LCCs.
Susceptibility to vapes, cigarettes, and LCCs varied by gender identity and race/ethnicity. Susceptibility was highest for respondents who identified their gender as “something else” or “I’m not sure yet” (49.8%) and non-Hispanic multiracial respondents (46.4%).
Respondents who rated their mental health as poor (55.3%) or fair (51.8%) had higher susceptibility to vapes, cigarettes, and LCCs than those who rated it good, very good, or excellent (39.5%).
Respondents who were LGBTQ+ were more susceptible (52.6%) to vapes, cigarettes, and LCCs than respondents who were not LGBTQ+ (42.2%) and respondents with unclear LGBTQ+ status (44.7%).
Among youths who had never vaped, never smoked cigarettes, and never smoked LCCs, 37.8% were susceptible to future vaping, 20.1% to future cigarette smoking, and 21.4% to future LCC smoking.
The most commonly endorsed reason for vaping (among current vapers) was to relax or relieve stress and anxiety (35.2%).
Most respondents believed that adults who were important to them viewed vaping and smoking cigarettes negatively (96.3% and 96.8%, respectively), and this belief was consistent across demographic categories.
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Perceived approval of vaping and smoking among peers varied by product. About half (49.8%) of respondents reported that other respondents at school would view vaping negatively, while most (83.6%) reported that their peers would view smoking cigarettes negatively. A higher percentage of respondents who were never users of each product believed their peers would disapprove of their use compared to respondents who were current or former users of vapes and cigarettes. Respondents perceived that more of their peers held negative views of smoking cigarettes (83.6%) than vaping (49.8%).
ES-1.5 Tobacco Endgame Attitudes (Chapter 6)
Two-thirds (66.9%) of high school respondents reported that they supported a ban on the sale of all tobacco products. Almost three-quarters supported a ban on public use of cigarettes and LCCs (73.7%) and a similar percentage supported a ban on the sale of all flavored tobacco (72.0%).
Support for policies varied across vaping and smoking status, with 71.2%, 77.0%, and 76.9% of never vapers reporting support for a tobacco sales ban, a tobacco public use ban, and a flavored tobacco ban, respectively, and fewer respondents who were currently smoking cigarettes reporting support for such bans (19.0% for sales,
29.9% for public use, and 26.8% for flavored).
ES-1.6 Geographic Differences (Chapter 7)
In general, towns and rural settings (9.6%) tended to have higher tobacco use in comparison to cities (6.9%) and suburban areas (6.8%).
Madera (18.7%, 4.2%), Merced (16.2%, 4.5%), Tulare (15.0%, 4.2%), Contra Costa (15.5%, 2.8%), and Los Angeles (16.6%, 5.0%) counties had the lowest ever and current tobacco use estimates, respectively, out of all counties or county groupings.
In general, current use estimates for specific products were consistent across region, except for vaping; the Northern region of the state (8.1%) had the highest prevalence of current vaping.
ES-1.7 Marijuana Use (Chapter 8)
Almost a quarter (23.0%) of high school respondents reported having ever used marijuana, while 10.4% reported current use of marijuana. Current marijuana use (10.4%) was higher than current use of any tobacco (7.3%) among high school respondents.
Current marijuana use varied by demographics. Current use was highest among respondents who identified their gender as “something else” or “I’m not sure yet” (14.1%), African American or Black (18.1%) respondents, and 12th-grade (14.0%) respondents. Prevalence of current use among LGBTQ+ respondents was more than double (18.0%) that of non-LGBTQ+ respondents (8.9%) or respondents of unclear LGBTQ+ status (6.4%).
Among respondents who were currently using marijuana, the most common mode of use was smoking marijuana (49.0%).
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Overall, the prevalence of current use of marijuana only (5.5%) was slightly higher than co-use of marijuana and any tobacco product (4.9%). For some demographic subgroups, co-use was higher than marijuana-only use.
Among respondents who were currently co-using marijuana and tobacco, the most commonly used tobacco product was vapes (39.1%).
Overall, 21.3% of respondents reported being exposed to marijuana smoke in a car or room within the last 2 weeks, and 31.1% reported being exposed outside.
Respondents who were currently using marijuana reported greater exposure to secondhand marijuana smoke than respondents who reported former and never use. Among respondents currently using marijuana, the most commonly endorsed methods of obtaining the product were buying it (38.2%) and someone giving it to them (27.0%). Among those who reported purchasing their own marijuana, the most common methods of obtaining marijuana were from someone else (44.9%) or from a store or dispensary (38.3%).
ES-1.8 Comparisons of Tobacco Use from 2022 to 2023 (Chapter 9) The use of current and ever use of any tobacco product changed little between 2022 and 2023. Current use of tobacco was 6.6% in 2022 and 7.3% in 2023; ever use was 20.3% in 2022 and 21.6% in 2023. There were no significant changes in ever or current use of any tobacco product or ever or current use of specific tobacco products among all high school respondents.
There was one significant change over time by race and ethnicity. Current cigarette smoking increased significantly between 2022 (0.1%) and 2023 (1.8%) among students who identified as non-Hispanic other race.
There were also significant changes by grade. Current hookah use increased between 2022 (0.5%) and 2023 (1.0%) among 12th graders, current smokeless tobacco use increased among 10th graders (0.2% in 2022 and 0.6% in 2023), and current use of nicotine pouches increased in both grades (10th: 0.5% in 2022 and 0.9% in 2023; 12th: 0.7% in 2022 and 1.2% in 2023).
ES-1.9 8th-Grade Tobacco Use (Chapter 10)
Prevalence of ever tobacco use was lower for 8th-grade respondents (11.4%) than high school respondents (21.6%).
Prevalence of current tobacco use was lower for 8th-grade respondents (3.2%) than high school respondents (7.3%).
Vaping was the most common form of current tobacco use (2.5%), followed by nicotine pouches (0.6%), among middle school respondents. In terms of demographics, current tobacco use was highest among 8th-grade respondents who identified their gender as “something else” or “I’m not sure yet” (6.8%). Among racial/ethnic categories, multiracial respondents (5.9%) reported the highest current use, and Asian respondents (0.7%) reported the lowest. Almost all 8th-grade respondents who currently vaped reported using flavored vapes (91.9%).
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vapor (31.8%) outdoors. Of those respondents who reported living in MUH, about half (49.2%) reported tobacco smoke exposure in their unit within the last 6 months. Eighth-grade respondents who were currently vaping most commonly acquired vapes by buying them (26.2%), and the most common source was buying them from someone (45.1%). Of those who currently smoked cigarettes, the most common method of obtaining them was someone giving them to them (38.6%). Among 8th- grade respondents, 3.1% reported current marijuana use and 8.5% reported ever marijuana use.
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1. Tobacco Use Behavior, Overall and for Priority Populations This chapter presents high school tobacco use behavior data from the 2023 California Youth Tobacco Survey (CYTS), including both ever and current use of various tobacco products.
Ever use is defined as any tobacco use in one’s lifetime, and current use is defined as any use within the last 30 days. In this report, the terms current use and last-30-day use are used interchangeably. This chapter also provides the overall prevalence rates of tobacco product use and the frequency of current use of products. Additionally, it presents the use of multiple tobacco products (i.e., polytobacco use). Last, this chapter includes tobacco use by demographics commonly found in surveys, specifically, gender identity, race/ethnicity, and grade. For tobacco use among 8th-grade respondents, see Chapter 10.
This chapter also presents high school tobacco use among specific populations. Because of high observed tobacco use among members of priority populations, the chapter examines use by lesbian, gay, bisexual, transgender, queer or questioning (LGBTQ+) status 2; mental
health3; and experiences of discrimination.4,5 Because of higher use of multiple tobacco products among LGBTQ+ individuals2 (compared to individuals who do not identify as LGBTQ+), this chapter also examines polytobacco use by LGBTQ+ status. In addition, this chapter examines characteristics of current vapers who attempted to quit vaping in the last 12 months and who intended to quit vaping in the next 30 days.
1.1 Tobacco Use Among High School Respondents
We asked respondents not to include marijuana products when answering questions about the use of tobacco products. Table 1-1 presents ever and current use of tobacco products among high school respondents. The first row of Table 1-1 indicates any tobacco use (use of one or more of the included tobacco products). Current use of any tobacco product was
7.3%. Vaping was the most popular at 5.9%. The use of tobacco products other than vapes was low. Current use of cigarettes was 1.2%. Nicotine pouch use was 1.1%. Less than 1% of high school respondents reported current use of little cigars or cigarillos (LCCs) (0.6%), cigars (0.8%), hookah (0.7%), smokeless tobacco (0.5%), or heated tobacco products (HTPs) (0.5%).
2 Creamer, M. R., Everett Jones, S., Gentzke, A. S., Jamal, A., & King, B. A. (2020). Tobacco product use among high school students – Youth Risk Behavior survey, United States, 2019. MMWR, 69(1), 56–63.
3 National Institute on Drug Abuse. (2022). Research report: Tobacco, nicotine, and e-cigarettes research report. https://nida.nih.gov/publications/research-reports/tobacco-nicotine-e-cigarettes/. 4 Dutra, L. M., Williams, D. R., Kawachi, I., & Okechukwu, C. A. (2014). Racial and nonracial discrimination and smoking status among South African adults ten years after apartheid. Tobacco Control, 23(e2), e114–121. doi:10.1136/tobaccocontrol-2013-051478. 5 Borrell, L. N., Jacobs, D. R., Williams, D. R., Pletcher, M. J., Houston, T. K., & Kiefe, C. I. (2007).
Self-reported discrimination and substance use in the Coronary Artery Risk Development in Adults Study. American Journal of Epidemiology, 166(9), 1068–1079.
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Table 1-1. Prevalence of Ever and Current Use of Tobacco Products Among High School Respondents
Tobacco Product
Ever Use Current Use
N % (95% CI) N % (95% CI)
Any tobacco use 30,966 21.6 (20.3–22.9) 30,966 7.3 (6.5–8.1) Vapes 30,933 18.3 (17.2–19.5) 30,930 5.9 (5.3–6.5)
Cigarettes 30,943 5.6 (4.9–6.5) 30,943 1.2 (0.9–1.5)
LCCs 30,953 2.3 (2.0–2.6) 30,951 0.6 (0.5–0.8)
Cigars 30,948 3.3 (2.9–3.7) 30,947 0.8 (0.7–1.0)
Hookah 30,966 2.5 (2.0–3.0) 30,966 0.7 (0.5–1.0)
Smokeless 30,966 1.5 (1.3–1.7) 30,966 0.5 (0.4–0.7)
HTPs 30,966 1.2 (1.0–1.4) 30,966 0.5 (0.3–0.7)
Nicotine pouches 30,966 3.1 (2.7–3.5) 30,966 1.1 (0.9–1.3) Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos. CI = confidence interval
1.2 Frequency of Tobacco Use
The 2023 CYTS asked respondents who reported currently using a tobacco product to indicate how many days they had used the product within the last 30 days. Table 1-2 presents the mean frequency of use among respondents who were currently using each product. Of the 5.9% of high school respondents who reported vaping in the last 30 days,
41.5% reported frequent vaping (20 or more days in the last 30 days). Among current vapers, 29.9% reported vaping daily in the last 30 days (daily use not shown in table).
Frequent use (20 or more days in the last month) was the most common response for users of vapes, LCCs, cigars, and smokeless tobacco. For cigarettes, hookah, HTPs, and nicotine pouches, using the product either 1 day or 2 days were the most common responses.
Table 1-2. Frequency of Current Use Among High School Respondents Who Were Currently Using a Given Tobacco Product
Tobacco
product N
1 or 2 days
% (95% CI)
3–5 days
% (95% CI)
6–19 days
% (95% CI)
20–30 days
% (95% CI)
Vapes 2,051 26.1 (22.9–29.4) 14.1 (11.2–17.4) 18.4 (15.4–21.7) 41.5 (37.4–45.7) Cigarettes 452 41.1 (33.6–48.9) Q (13.9–29.7) 12.9 (8.0–19.1) 25.1 (17.1–34.4) LCCs 231 24.4 (15.8–34.8) 18.9 (9.1–32.7) 18.8 (10.3–30.1) 38.0 (26.9–50.0) Cigars 293 38.9 (29.9–48.6) 11.8 (6.4–19.3) 7.4† (3.5–13.5) 41.9 (31.0–53.3) Hookah 192 51.2 (36.2–66.0) 11.4† (3.1–27.2) 11.1† (4.5–21.8) 26.3 (16.7–37.8) Smokeless 176 32.9† (18.1–50.6) 11.4† (4.3–23.2) — — 40.8† (23.4–60.0) HTPs 137 39.8† (23.7–57.7) 8.7† (2.7–19.5) 21.4† (9.6–38.2) 30.2 (18.0–44.7) (continued)
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Table 1-2. Frequency of Current Use Among High School Respondents Who Were Currently Using a Given Tobacco Product (continued)
Tobacco
product N
1 or 2 days
% (95% CI)
3–5 days
% (95% CI)
6–19 days
% (95% CI)
20–30 days
% (95% CI)
Nicotine
pouches
410 51.9 (38.5–65.1) — — 11.5 (6.3–18.6) 22.5 (15.3–31.1) Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos. CI = confidence interval — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate. For more information about Korn-Graubard confidence intervals, see Appendix A.
1.3 Tobacco Use by Gender Identity
Table 1-3 presents current use of each tobacco product by gender identity. The gender identity category “identified in another way” includes respondents who reported their gender as “something else” or “I’m not sure yet.” The “declined to answer” gender identity category represents those who skipped this question.
Respondents who identified their gender in another way (12.5%) or declined to answer the question about gender identity (15.6%) had a higher prevalence of current use of any tobacco product than those who identified as female (7.0%) or male (6.5%). This pattern was similar for vapes and hookah. For the remaining products, those who identified another way, but not those who declined to answer, reported higher use than those who identified as male or female.
Table 1-3. Prevalence of Curr ent Use of Tobacco Products Among High School Respondents, by Gender Identity
Tobacco Product
Male
N = 13,750
% (95% CI)
Female
N = 13,537
% (95% CI)
Identified in
Another Way
N = 1,767
% (95% CI)
Declined to
Answer
N = 198
% (95% CI)
Any tobacco use 6.5 (5.7–7.5) 7.0 (6.1–8.0) 12.5 (9.8–15.5) 15.6 (8.4–25.5) Vapes 5.1 (4.4–5.8) 6.0 (5.1–6.9) 8.6 (6.8–10.8) 12.3† (5.8–21.9) Cigarettes 1.1 (0.8–1.5) 0.7 (0.5–1.1) 5.2 (3.6–7.2) 1.5 (0.2–5.1) LCCs 0.5 (0.4–0.7) 0.3 (0.2–0.5) 3.9 (2.5–5.6) 0.7 (0.2–1.8) Cigars 1.0 (0.8–1.4) 0.2 (0.1–0.3) 4.2 (2.8–6.0) 1.1 (0.3–3.1) Hookah 0.7 (0.4–1.0) 0.5 (0.3–1.0) 2.9 (1.6–4.7) 3.4† (0.8–9.4) Smokeless 0.5 (0.3–0.8) 0.2 (0.0–0.5) 2.8 (1.5–4.7) 0.6 (0.2–1.5) HTPs 0.3 (0.2–0.5) 0.4 (0.2–0.8) 2.6 (1.5–4.1) 0.2 (0.0–1.0) Nicotine pouches 1.3 (1.0–1.6) 0.7 (0.3–1.2) 3.1 (1.9–4.7) 1.0 (0.2–2.9) Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos. CI = confidence interval † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
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1.4 Tobacco Use by Race/Ethnicity
Tables 1-4a and 1-4b present tobacco use by race/ethnicity. The race/ethnicity variable was created by combining responses to two questions, one about Hispanic ethnicity and the other about race (Hispanic is not considered a race in the survey). Tables 1-4a and 1-4b include all race/ethnicity categories created by combining Hispanic ethnicity with the response options for race. However, elsewhere in the survey, American Indian or Alaska Native (AI/AN), Native Hawaiian or other Pacific Islander (NHOPI), and respondents who did not identify with any of the races listed in the survey are collapsed into a category called “other” due to small sample sizes. For more information on demographic variables used in the survey, see Appendix A.
Tables 1-4a and 1-4b present race/ethnicity differences in current use of any tobacco product. Although we make comparisons between NHOPI respondents and other race/ethnicity categories in the text, all estimates for NHOPI and all comparisons that include this group should be interpreted with caution due to small sample sizes. For AI/AN respondents, we were not able to provide estimates for any current tobacco use or any vaping due to small sample sizes, and the estimates for LCCs and cigars should be interpreted with caution for the same reason.
Table 1-4a. Prevalence of Current Use of Tobacco Products Among High School Respondents, by Race/Ethnicity
Tobacco
Product
White
N = 7,386
% (95% CI)
African
American or
Black
N = 688
% (95% CI)
Hispanic
N = 16,691
% (95% CI)
Asian
N = 3,172
% (95% CI)
Any tobacco use 10.7 (9.4–12.2) 7.9 (5.4–11.1) 6.3 (5.5–7.1) 3.3 (2.5–4.2) Vapes 8.7 (7.6–9.9) 5.4 (2.9–9.0) 5.1 (4.4–5.9) 2.7 (2.1–3.4) Cigarettes 2.3 (1.6–3.1) 1.4 (0.2–4.5) 0.7 (0.5–0.9) 0.6 (0.3–1.2) LCCs 0.6 (0.3–0.9) 0.7 (0.1–1.9) 0.7 (0.5–0.9) 0.4 (0.1–0.9) Cigars 1.3 (0.8–1.8) 0.7 (0.2–1.7) 0.7 (0.5–0.9) 0.5 (0.2–1.0) Hookah 0.9 (0.4–1.5) 2.1† (0.4–6.2) 0.5 (0.3–0.7) 0.6 (0.3–1.2) Smokeless 0.6 (0.3–1.1) 0.3 (0.1–0.6) 0.4 (0.2–0.6) 0.5 (0.2–1.1) HTPs 0.4 (0.2–0.8) 1.0 (0.0–5.0) 0.4 (0.2–0.6) 0.5 (0.2–1.1) Nicotine
pouches
1.7 (1.3–2.2) 1.5 (0.3–4.5) 0.7 (0.5–0.9) 0.8 (0.4–1.3) Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos. CI = confidence interval † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
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For any tobacco use, non-Hispanic White (hereafter, White) high school respondents had the highest current use (10.7%) followed by NHOPI (9.6%), and multiracial respondents (9.5%). Asian respondents had the lowest current use (3.3%). For vapes, NHOPI respondents (9.6%), followed by White respondents (8.7%), had the highest current prevalence of use. For cigarette smoking, current use was similar across multiple races and ethnicities, with the highest prevalence estimates for White (2.3%), NHOPI (2.2%), multiracial (2.1%), and other race (2.0%) respondents. AI/AN (1.5%) and NHOPI (1.7%) respondents had notably higher use of LCCs than other races and ethnicities, but, again, these estimates should be interpreted with caution. African American/Black (2.1%), NHOPI (1.7%), other race (2.0%), and multiracial (2.1%) respondents all reported higher current hookah use than the other race/ethnicity categories. NHOPI respondents reported the highest current use of smokeless tobacco (2.0%) and HTPs (2.0%). For nicotine pouches, current use was higher for White (1.7%), African American/Black (1.5%), NHOPI (2.1%), multiracial (1.8%), and other race (1.5%) respondents, compared to the other race/ethnicity groups.
Table 1-4b. Prevalence of Current Use of Tobacco Products Among High School Respondents, by Race/Ethnicity
Tobacco Product
American
Indian or
Alaska Native
N = 177
% (95% CI)
Native
Hawaiian or
Other Pacific
Islander
N = 117
% (95% CI)
Other
N = 492
% (95% CI)
Multiracial
N = 2,168
% (95% CI)
Any tobacco use — — 9.6† (2.7–22.7) 6.7 (3.9–10.6) 9.5 (7.7–11.7) Vapes — — 9.6† (2.7–22.7) 3.8 (1.9–6.9) 7.6 (5.9–9.6)
Cigarettes 0.5 (0.0–2.3) 2.2† (0.1–9.5) 2.0 (0.6–4.8) 2.1 (1.3–3.3) LCCs 1.5† (0.0–7.9) 1.7† (0.0–9.6) 0.2 (0.0–1.0) 0.8 (0.3–1.7) Cigars 1.4† (0.0–8.0) 1.7† (0.0–9.6) 1.1 (0.4–2.4) 0.9 (0.4–1.6) Hookah 0.8 (0.0–3.6) 1.7† (0.0–9.6) 2.0 (0.5–5.1) 1.6 (0.8–2.9) Smokeless 0.7 (0.0–3.7) 2.0† (0.1–9.4) 0.8 (0.1–3.1) 1.2 (0.5–2.5) HTPs 0.7 (0.0–3.7) 2.0† (0.1–9.4) 0.8 (0.1–3.1) 1.1 (0.5–2.2) Nicotine
pouches
0.7 (0.0–3.6) 2.1† (0.1–9.3) 1.5 (0.5–3.5) 1.8 (1.0–2.9) Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos. CI = confidence interval — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
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1.5 Tobacco Use by Grade
Table 1-5 presents current tobacco use by grade. Current use of any tobacco product was higher among 12th graders (9.4%) than 10th graders (5.3%). Current use of specific products was higher among 12th-grade respondents for each product except for HTPs and nicotine pouches.
Table 1-5. Prevalence of Current Use of Tobacco Products Among High School Respondents, by Grade
Tobacco Product
10th Grade 12th Grade
N % (95% CI) N % (95% CI)
Any tobacco use 16,255 5.3 (4.6–6.2) 14,711 9.4 (8.2–10.8) Vapes 16,235 4.3 (3.7–5.0) 14,695 7.6 (6.6–8.6)
Cigarettes 16,244 0.8 (0.5–1.1) 14,699 1.6 (1.2–2.1)
LCCs 16,244 0.6 (0.4–0.8) 14,707 0.7 (0.5–0.9)
Cigars 16,243 0.7 (0.5–1.0) 14,704 1.0 (0.7–1.3)
Hookah 16,255 0.4 (0.3–0.6) 14,711 1.0 (0.6–1.6)
Smokeless 16,255 0.6 (0.4–0.9) 14,711 0.4 (0.2–0.6)
HTPs 16,255 0.5 (0.3–0.7) 14,711 0.5 (0.3–0.9)
Nicotine pouches 16,255 0.9 (0.7–1.2) 14,711 1.2 (0.9–1.5) Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos. CI = confidence interval
1.6 Tobacco Use by LGBTQ+ Status
Respondents were asked to indicate their sexual orientation and gender identity in two separate questions. Using responses from these questions, three categories of LGBTQ+ status were created: LGBTQ+, non-LGBTQ+, and unclear LGBTQ+ status. See Appendix A for additional information on this variable.
Table 1-6 presents tobacco use by LGBTQ+ status. LGBTQ+ respondents had higher prevalence of any current tobacco use (11.4%) than non-LGBTQ+ respondents (6.4%) and those of unclear LGBTQ+ status (5.3%). LGBTQ+ respondents also had a higher prevalence of tobacco use for each specific tobacco product than respondents with unclear LGBTQ+ status or who identified as non-LGBTQ+. Vapes were the most commonly used product across all groups. Current vaping was 9.1% among LGBTQ+ respondents, 4.0% among respondents with unclear LGBTQ+ status, and 5.1% among non-LGBTQ+ respondents.
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Table 1-6. Prevalence of Current Tobacco Use Among High School Respondents, by LGBTQ+ Status
Tobacco
Product
LGBTQ+* Non-LGBTQ+*
Unclear LGBTQ+
Status*
N % (95% CI) N % (95% CI) N % (95% CI)
Any tobacco use 5,146 11.4 (9.5–13.6) 21,360 6.4 (5.6–7.2) 2,414 5.3 (4.0–6.8) Vapes 5,142 9.1 (7.7–10.7) 21,337 5.1 (4.5–5.9) 2,412 4.0 (2.8–5.4) Cigarettes 5,145 2.5 (1.8–3.3) 21,348 0.9 (0.6–1.2) 2,413 1.1 (0.6–1.8) LCCs 5,143 1.6 (1.1–2.2) 21,353 0.4 (0.3–0.5) 2,414 0.4 (0.2–0.8) Cigars 5,144 1.5 (1.0–2.2) 21,352 0.7 (0.5–0.9) 2,412 0.6 (0.3–1.1) Hookah 5,146 1.5 (0.8–2.3) 21,360 0.5 (0.3–0.9) 2,414 1.0 (0.4–1.9) Smokeless 5,146 1.2 (0.7–1.9) 21,360 0.3 (0.2–0.5) 2,414 0.7 (0.3–1.5) HTPs 5,146 1.4 (0.8–2.3) 21,360 0.3 (0.2–0.5) 2,414 0.5 (0.1–1.2) Nicotine
pouches
5,146 1.7 (1.1–2.5) 21,360 1.0 (0.7–1.3) 2,414 0.9 (0.5–1.6) Note. LCCs = little cigars or cigarillos; HTPs = heated tobacco products; LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning. CI = confidence interval * Respondents who reported (a) their gender identity as transgender or “something else” and/or (b) identified their sexual orientation as gay or lesbian, bisexual, “something else,” or “don’t know what this question means” were considered LGBTQ+. Respondents who identified as female or male and straight (that is, not gay or lesbian) were considered non-LGBTQ+. Respondents who responded (a) unsure for gender identity and straight for sexual orientation or (b) male, female, or unsure for gender identity and unsure or “don’t know” for sexual orientation were considered to have unclear LGBTQ+ status.
1.7 Tobacco Use by General Mental Health
Table 1-7 presents respondents’ current tobacco use according to reported general mental health (see Appendix A). Respondents who rated their mental health as poor reported higher use of any tobacco product (14.8%) than those who reported their mental health as fair (7.2%) or good to excellent (5.9%). This pattern was consistent for each tobacco product.
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Table 1-7. Prevalence of Current Use of Tobacco Products Among High School Respondents, by General Mental Health
Tobacco
Product
Good to Excellent Fair Poor
N % (95% CI) N % (95% CI) N % (95% CI)
Any tobacco use 19,149 5.9 (5.1–6.7) 7,155 7.2 (6.0–8.7) 3,107 14.8 (12.3–17.6) Vapes 19,137 4.6 (4.0–5.2) 7,146 6.3 (5.2–7.7) 3,098 11.5 (9.4–13.8) Cigarettes 19,141 1.1 (0.8–1.5) 7,151 0.9 (0.6–1.2) 3,103 2.4 (1.7–3.3) LCCs 19,141 0.6 (0.4–0.8) 7,154 0.3 (0.2–0.6) 3,105 0.9 (0.4–1.8) Cigars 19,141 0.9 (0.7–1.2) 7,153 0.3 (0.2–0.5) 3,104 1.2 (0.6–2.3) Hookah 19,149 0.8 (0.5–1.3) 7,155 0.3 (0.2–0.5) 3,107 0.9 (0.5–1.7) Smokeless 19,149 0.5 (0.3–0.6) 7,155 0.2 (0.1–0.5) 3,107 1.4 (0.6–2.6) HTPs 19,149 0.5 (0.3–0.7) 7,155 0.2 (0.1–0.4) 3,107 1.2 (0.6–2.1) Nicotine
pouches
19,149 1.1 (0.9–1.3) 7,155 0.5 (0.3–0.8) 3,107 2.3 (0.9–4.7) Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos. CI = confidence interval
1.8 Polytobacco Use
Table 1-8 presents the current use of multiple tobacco products, often referred to as polytobacco use. Some estimates are imprecise due to small sample sizes. Overall, 27.2% of high school respondents who were currently using tobacco reported using two or more tobacco products. Due to small sample sizes, we excluded respondents who declined to answer questions about gender identity from the table. Of the remaining categories, respondents who identified their gender another way reported the highest prevalence of polytobacco use (50.6%). Polytobacco use was higher for 10th-grade respondents (30.4%) than 12th-grade respondents (25.2%). LGBTQ+ respondents had a higher prevalence of polytobacco use (31.1%) than non-LGBTQ+ (26.8%) or respondents with unclear LGBTQ+ status (27.0%).
Table 1-8. Prevalence of Current Polytobacco Use Among High School Respondents Currently Using Tobacco, by Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status
Characteristic N
Used Only One
Tobacco Product
% (95% CI)
Used Two or More
Tobacco Products
% (95% CI)
Overall 2,584 72.8 (69.0–76.3) 27.2 (23.7–31.0)
Gender identity
Male 1,027 67.4 (61.3–73.0) 32.6 (27.0–38.7)
Female 1,078 80.9 (75.5–85.6) 19.1 (14.4–24.5)
(continued)
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Table 1-8. Prevalence of Current Polytobacco Use Among High School Respondents Currently Using Tobacco, by Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status (continued)
Characteristic N
Used Only One
Tobacco Product
% (95% CI)
Used Two or More
Tobacco Products
% (95% CI)
Identified in another way 252 49.4 (39.6–59.3) 50.6 (40.7–60.4) Declined to answer 35 — — — —
Race/ethnicity*
White 958 71.0 (62.2–78.7) 29.0 (21.3–37.8)
African American or Black 68 — — — —
Hispanic 1,133 76.9 (72.4–80.9) 23.1 (19.1–27.6)
Asian 126 73.1 (60.0–83.8) 26.9 (16.2–40.0)
Other 60 — — — —
Multiracial 232 65.7 (55.8–74.8) 34.3 (25.2–44.2)
Grade
10 1,056 69.6 (62.6–76.0) 30.4 (24.0–37.4)
12 1,528 74.8 (70.0–79.2) 25.2 (20.8–30.0)
LGBTQ+ status
LGBTQ+ 671 68.9 (62.8–74.5) 31.1 (25.5–37.2)
Non-LGBTQ+ 1,522 73.2 (67.9–78.1) 26.8 (21.9–32.1)
Unclear LGBTQ+ status 161 73.0 (60.9–83.0) 27.0 (17.0–39.1) Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning. CI = confidence interval * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A.
1.9 Tobacco Use by Experiences of Discrimination
The CYTS captures experiences of discrimination based on literature establishing a relationship between discrimination and tobacco use.6,7,8 Specifically, since 2022, the CYTS has contained a modified version of the Everyday Discrimination Scale.9 The scale was
6 See Dutra et al., 2014.
7 Borrell, L. N., Jacobs, D. R., Williams, D. R., Pletcher, M. J., Houston, T. K., & Kiefe, C. I. (2007).
Self-reported discrimination and substance use in the Coronary Artery Risk Development in Adults Study. American Journal of Epidemiology, 166(9), 1068–1079. 8 Wiehe, S.E., Aalsma, M.C., Liu, G.C., Fortenberry, J.D. (2010). Gender differences in the association between perceived discrimination and adolescent smoking. American Journal of Public Health,100(3), 510-516.
9 Williams, D. R., Yu, Y., Jackson, J. S., & Anderson, N. B. (1997). Racial differences in physical and mental health: Socioeconomic status, stress, and discrimination. Journal of Health Psychology, 2(3), 335–351.
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modified to specify a time period for the experiences—the past 30 days; otherwise, the scale is identical to its original version. Additional information on the discrimination variable is available in Appendix A.
Table 1-9 presents the list of experiences and how frequently high school students reported experiencing them. Overall, 66.1% of high school students reported one or more experiences of discrimination a few times or more in the past month. The most commonly endorsed experience of discrimination was “people acted as if they think you are not smart;”
8.1% of respondents reported having this experience almost every day. The second most common experience was “you were treated with less courtesy or respect than other people;”
6.9% of respondents reported having this experience almost daily.
Table 1-9. Prevalence of Experiences of Discrimination in the Last Month Among High School Respondents
Experience of
Discrimination N
Almost Every
Day
% (95% CI)
At Least Once a
Week
% (95% CI)
A Few Times
% (95% CI)
Not At All
% (95% CI)
You were
treated with
less courtesy or
respect than
other people
28,871 6.9 (6.3–7.6) 12.6 (11.8–13.5) 32.1 (31.1–33.2) 48.3 (46.7–50.0) You received
poorer service
than other
people at
restaurants or
stores
28,852 2.7 (2.3–3.2) 4.7 (4.2–5.2) 15.8 (14.9–16.7) 76.9 (75.7–78.0) People acted as
if they think you
are not smart
28,835 8.1 (7.4–8.8) 12.2 (11.4–13.0) 30.1 (29.3–31.0) 49.5 (48.3–50.8) People acted as
if they are
afraid of you
28,829 4.4 (3.8–5.0) 6.4 (5.9–6.9) 16.9 (16.1–17.8) 72.3 (70.9–73.6) You were
threatened or
harassed
28,843 3.5 (3.0–4.0) 4.7 (4.1–5.4) 14.0 (13.3–14.7) 77.8 (76.6–79.0) Note. CI = confidence interval
We examined these experiences by tobacco user status (Table 1-10). The two most commonly reported experiences were the same among respondents who were using tobacco and not using tobacco, but those using tobacco endorsed them at higher rates. For example, respondents who used tobacco reported experiencing “almost every day” that “people acted as if they think you are not smart” at twice the rate (15.6%) of those who didn’t use tobacco (7.5%). Respondents who used tobacco generally reported higher rates of discrimination than respondents who didn’t use tobacco.
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Table 1-10. Prevalence of Experiences of Discrimination in the Last Month Among High School Respondents, by Current Tobacco Use
Experience of
Discrimination
Almost Every
Day
% (95% CI)
At Least Once
a Week
% (95% CI)
A Few Times
% (95% CI)
Not At All
% (95% CI)
Currently using
tobacco1
You were treated
with less courtesy or
respect than other
people
13.5 (10.6–16.9) 19.9 (17.2–22.8) 31.3 (27.5–35.3) 35.3 (31.2–39.5) You received poorer
service than other
people at restaurants
or stores
6.6 (4.3–9.6)
11.0 (8.7–13.6) 17.5 (14.8–20.4) 64.9 (60.9–68.8)
People acted as if
they think you are
not smart
15.6 (12.5–19.2) 18.7 (15.5–22.2) 29.3 (25.8–33.0) 36.4 (32.5–40.4) People acted as if
they are afraid of you
11.7 (9.0–14.8) 12.0 (9.8–14.4) 24.3 (20.9–27.8) 52.1 (48.2–56.0) You were threatened
or harassed
9.4 (6.9–12.5) 10.3 (8.1–12.9) 20.1 (17.4–23.0) 60.1 (56.7–63.6) Not currently using
tobacco2
You were treated
with less courtesy or
respect than other
people
6.4 (5.8–7.1)
12.0 (11.2–13.0) 32.2 (31.1–33.4) 49.3 (47.7–51.0)
You received poorer
service than other
people at restaurants
or stores
2.4 (2.0–2.8) 4.2 (3.8–4.6)
15.6 (14.7–16.6) 77.8 (76.6–78.9)
People acted as if
they think you are
not smart
7.5 (6.9–8.2) 11.7 (11.0–12.5) 30.2 (29.3–31.1) 50.6 (49.2–51.9) People acted as if
they are afraid of you
3.8 (3.3–4.4) 6.0 (5.5–6.5)
16.4 (15.5–17.3) 73.8 (72.5–75.1)
You were threatened
or harassed
3.0 (2.6–3.5) 4.3 (3.8–4.9)
13.5 (12.8–14.3) 79.1 (78.0–80.2)
Note. CI = confidence interval
1 n = 2,324 for respondents currently using tobacco in this table. 2 n = 26,547 for respondents not currently using tobacco in this table.
Next, we examined the perceived reason for experiences of discrimination among high school students who reported one or more of the experiences of discrimination (Table 1-11).
The most common perceived reasons for experiencing discrimination in the last month were some other aspect of physical appearance (35.3%) and age (30.7%). The least common Packet Pg. 429
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reason was religion (8.4%). The findings were similar when examining reason for discrimination across tobacco user status.
Table 1-11. Perceived Reasons for Experiencing Discrimination in the Last Month Among High School Respondents, by Current Tobacco User Status Reason for Discrimination
(Select All That Apply)
Overall
Currently Using
Tobacco
Not Currently
Using Tobacco
N = 19,152 N = 1,861 N = 17,291
% (95% CI) % (95% CI) % (95% CI)
Age 30.7 (29.4–32.0) 33.8 (29.3–38.4) 30.4 (29.0–31.9)
Race/ethnicity 28.6 (26.8–30.4) 28.0 (23.9–32.4) 28.6 (26.8–30.5) Gender identity 27.8 (26.5–29.2) 31.0 (27.2–35.0) 27.5 (26.2–29.0) Some other aspect of physical
appearance
35.3 (33.7–37.0) 38.7 (34.8–42.7) 35.0 (33.4–36.7)
Weight 20.8 (19.6–22.1) 23.3 (19.9–26.9) 20.6 (19.3–22.0) Height 19.9 (18.6–21.3) 20.1 (16.6–23.8) 19.9 (18.6–21.3) Ancestry or national origins 11.3 (10.5–12.1) 14.2 (10.8–18.2) 11.0 (10.3–11.8) Household or family education or
income
17.6 (16.6–18.8) 17.2 (14.4–20.4) 17.7 (16.6–18.8)
Sexual orientation 11.5 (10.6–12.4) 16.7 (13.0–20.9) 11.0 (10.2–11.8) Religion 8.4 (7.5–9.4) 9.2 (7.0–11.8) 8.3 (7.4–9.3)
Other 19.2 (18.3–20.2) 16.3 (13.5–19.5) 19.5 (18.4–20.6) Note. CI = confidence interval
1.10 Vaping Cessation
The 2023 CYTS examined quit attempts among current vapers and their intentions to quit vaping in the future. Appendix A provides additional information about these variables.
Table 1-12 presents reported quit attempts and intention to quit vaping in the next 30 days among vapers in specific populations. Among respondents who currently vaped, 40.8% reported attempting to quit vaping in the last 12 months, and 38.8%reported intending to quit in the next 30 days. Respondents who identified their gender in another way had the lowest prevalence of quit attempts (30.6%) and lowest reported intention to quit (24.5%).
Quit attempts and intention to quit were more common among 12th-grade respondents (41.8% and 40.8%, respectively) than 10th-grade respondents (39.2% and 35.5%, respectively). Non-LGBTQ+ respondents had a higher prevalence of quit attempts and reporting intentions to quit (41.7% and 41.5%, respectively) than respondents who were LGBTQ+ (36.9% and 32.6%, respectively) and respondents who had unclear LGBTQ+ status (36.7% and 33.6%, respectively). Respondents with poor mental health (36.4%) reported fewer quit attempts, but respondents with fair mental health status (43.1%) reported a higher prevalence of quit attempts than those with good to excellent mental health (40.5%). When asked about the next 30 days, respondents with good to excellent Packet Pg. 430
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mental health (41.7%) had the highest prevalence of intention to quit out of all mental health statuses. Suppressed values prevented comparisons by race/ethnicity.
Table 1-12. Percentage of Respondents Who Reported Attempting to Quit Vaping in the Last 12 Months or Intending to Quit Vaping in the Next 30 Days Among Currently Vaping High School Respondents
Characteristic
Attempted to Quit Intending to Quit
N % (95% CI) N % (95% CI)
Overall 2,099 40.8 (37.5–44.2) 2,099 38.8 (34.3–43.3)
Gender identity
Male 767 41.2 (35.4–47.2) 767 40.7 (34.3–47.3)
Female 965 40.6 (35.9–45.4) 965 39.2 (33.7–45.0)
Identified in another way 182 30.6 (19.6–43.6) 182 24.5 (14.6–36.8) Declined to answer 25 — — 25 — —
Race/ethnicity*
White 761 39.1 (33.5–44.8) 761 32.7 (25.3–40.7)
African American or Black 55 — — 55 — —
Hispanic 939 42.1 (36.9–47.5) 939 42.4 (36.1–48.9)
Asian 107 39.9 (27.2–53.6) 107 44.8 (31.5–58.8)
Other 43 — — 43 — —
Multiracial 192 42.6 (30.8–55.1) 192 40.2 (28.4–52.9)
Grade
10 853 39.2 (33.1–45.6) 853 35.5 (30.6–40.7)
12 1,246 41.8 (37.2–46.5) 1,246 40.8 (34.6–47.2)
LGBTQ+ status
LGBTQ+ 543 36.9 (29.8–44.4) 543 32.6 (25.0-40.9)
Non-LGBTQ+ 1,246 41.7 (36.9–46.5) 1,246 41.5 (36.2–46.9) Unclear LGBTQ+ status 124 36.7 (24.0–50.9) 124 33.6† (18.9–51.0) Mental health status
Good to excellent 980 40.5 (35.0–46.2) 980 41.7 (34.0–49.6) Fair 537 43.1 (35.5–50.9) 537 38.4 (31.2–46.0)
Poor 420 36.4 (27.7–45.8) 420 30.8 (23.8–38.5)
Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning. CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
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1.11 Summary
In 2023, the most frequently used tobacco product among California high school respondents was vapes, with 5.9% reporting current use and 18.3% reporting ever use.
Current use of cigarettes was 1.2%, and current use of LCCs, cigars, hookah, smokeless tobacco, and HTPs were all less than 1.0%. Respondents who identified their gender in another way or declined to answer questions about gender had a higher prevalence of any tobacco used compared to female or male respondents. This was also true for most individual tobacco products. Tobacco use was highest among respondents in the 12th grade (compared with 10th grade). About a quarter (27.2%) of respondents who currently used tobacco also reported using two or more tobacco products. Experiences of discrimination were common (66.1%), and respondents who currently used tobacco reported experiencing discrimination more frequently. A higher prevalence of quit attempts and intention to quit was observed among males, 12th graders, and non-LGTBQ+ respondents. Prevalence of quit attempts in the last 12 months and intention to quit in the next 30 days varied by self- reported mental health status.
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2. Use of Flavored Tobacco Products
This chapter presents the information about the use of flavored tobacco products among respondents currently using tobacco. It also presents the use of specific flavors. It should be noted that the flavored cigarette use reported in this chapter reflects the use of menthol cigarettes (the only flavor available). For flavored tobacco use among 8th-grade respondents, see Chapter 10.
2.1 Flavored Tobacco Use
The 2023 CYTS asked respondents who were currently using tobacco which flavors they used most often for each tobacco product. Since menthol cigarettes are the only type of flavored cigarette, the CYTS only asked about the use of menthol cigarettes in the past 30 days for respondents reporting current smoking. However, for the other products, the CYTS asked respondents to select their most commonly used flavor from a list of multiple flavors.
We divided respondents based on their use of flavored or unflavored products. This report defines flavored tobacco use as smoking menthol cigarettes in the last 30 days or, for users of all other tobacco products, selecting any flavor other than tobacco or unflavored as their most used flavor (see Appendix A). This report defines unflavored tobacco use as not having smoked menthol cigarettes in the last 30 days or, for users of all other products, selecting “tobacco” or “unflavored” as their most used flavor.
Table 2-1 indicates that, for the products included in the table, most respondents who were using tobacco also reported using a flavored tobacco product (85.6%), with the use of flavored vapes (89.1%) being the most prevalent. Almost half of respondents who were smoking cigarettes (45.0%) reported using menthol cigarettes in the past 30 days.
Table 2-1. Descriptive Analysis of Current Flavored Tobacco Product Use by Product, Among Respondents Currently Using Tobacco
Tobacco Product
Flavored Product Use
N % (95% CI)
Any of the below* 2,464 85.6 (82.6–88.2)
Vapes 2,070 89.1 (85.8–91.9)
Cigarettes** 457 45.0 (36.4–53.9)
LCCs 232 50.1 (38.5–61.7)
Cigars 294 49.9 (38.1–61.6)
Hookah 195 77.2 (60.8–89.2)
Smokeless 178 66.1† (49.3–80.5)
(continued)
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Table 2-1. Descriptive Analysis of Current Flavored Tobacco Product Use by Product, Among Respondents Currently Using Tobacco (continued) Tobacco Product
Flavored Product Use
N % (95% CI)
HTPs 140 75.2 (60.8–86.3)
Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos; CI = confidence interval. * As the sample size for the subgroup for each product varies, estimates for each product may be greater than that of “any of the below.”
** Menthol was the only available flavor for cigarettes. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
2.2 Flavored Tobacco Use by Demographics
Table 2-2 presents the current use of flavored tobacco among respondents who reported currently using tobacco, by demographics. Overall, most respondents who used these products reported using a flavored tobacco product. Use of flavored tobacco was highest among high school respondents who identified their gender in another way (90.1%) and lowest among males (81.5%). Use of flavored tobacco was highest among African American or Black respondents, followed by Asian respondents. Among respondents who currently used tobacco, 96.0% of African American or Black respondents and 94.4% of Asian respondents reported using flavored tobacco. Use of flavored tobacco was lowest among Hispanic respondents (82.7%). Use among 10th- and 12th-grade students was 86.6% and
85.0% respectively. LGBTQ+ respondents reported higher use (86.9%) than non-LGBTQ+ respondents (85.7%) and respondents with unclear LGBTQ+ status (79.8%).
Table 2-2. Prevalence of Current Use of Any Flavored Tobacco Among High School Respondents Who Reported Currently Using These Products, by Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status Characteristic
Current Use
N % (95% CI)
Overall 2,464 85.6 (82.6–88.2)
Gender identity
Male 951 81.5 (77.5–85.1)
Female 1,056 88.4 (83.4–92.3)
Identified in another way 244 90.1 (84.8–94.1)
Declined to answer 30 — —
Race/ethnicity*
(continued)
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Table 2-2. Prevalence of Current Use of Any Flavored Tobacco Among High School Respondents Who Reported Currently Using These Products, by Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status (continued)
Characteristic
Current Use
N % (95% CI)
White 900 86.3 (82.0–89.8)
African American or Black 67 96.0 (91.2–98.6)
Hispanic 1,085 82.7 (77.1–87.4)
Asian 120 94.4 (87.4–98.2)
Other 59 91.7 (77.1–98.4)
Multiracial 226 87.8 (80.8–93.0)
Grade
10 998 86.6 (82.1–90.3)
12 1,466 85.0 (81.4–88.1)
LGBTQ+ status
LGBTQ+ 656 86.9 (80.6–91.8)
Non-LGBTQ+ 1,441 85.7 (82.7–88.4)
Unclear LGBTQ+ status 151 79.8 (63.1–91.3)
Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A.
2.3 Use of Specific Flavored Tobacco Products by Demographics The following section (Tables 2-3, 2-4, and 2-5) presents the current use of flavored tobacco for specific products among respondents who were currently using tobacco across respondent demographics, including gender identity, race/ethnicity, and grade.
Table 2-3 indicates the percentage of respondents currently using vapes, cigarettes, and cigars who were using flavored versions of these products, by gender identity, excluding participants who declined to answer gender identity questions due to small sample sizes. We excluded other tobacco products due to small sample sizes. Female respondents reported the highest use of flavored vapes (90.3%) out of the gender identities included in the table.
Participants who identified their gender in another way (69.0%) reported higher current use of menthol cigarettes than males (38.0%), but the estimate for males should be interpreted with caution, and we could not include females in this comparison due to small sample sizes.
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Table 2-3. Prevalence of Current Flavored Tobacco Product Use Among High School Respondents Who Reported Currently Using Each Tobacco Product by Gender Identity
Tobacco
Product
Male Female Identified in Another Way
N % (95% CI) N % (95% CI) N % (95% CI)
Any flavored
tobacco use*
951 81.5 (77.5–85.1) 1,056 88.4 (83.4–92.3) 244 90.1 (84.8–94.1) Vapes 752 87.7 (83.2–91.4) 958 90.3 (84.5–94.5) 180 85.5 (72.0–94.1) Cigarettes** 183 38.0† (23.6–54.2) 138 — — 98 69.0 (55.6–80.5) Note. CI = confidence interval. The “decline to answer” category for gender identity was removed because all values were suppressed due to small sample size. * Includes use of vapes, cigarettes, LCCs, cigars, hookah, smokeless tobacco, and/or HTPs. All products except for vapes and cigarettes were removed from the table due to small sample sizes. ** Menthol was the only available flavor for cigarettes. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
Tables 2-4a and 2-4b display the use of flavored tobacco products by race/ethnicity. African American/Black respondents reported the highest use of any flavored tobacco (96.0%), followed by Asian (94.4%) and other race (91.7%) respondents. For flavored vapes, African American/Black respondents had the highest prevalence of using flavored vapes (98.7%) of the race/ethnicity groups with a sufficient sample size to include in the table (all groups except “other race”). The sample sizes for menthol cigarette smoking use were too small to determine patterns by product and race/ethnicity. We excluded the remaining tobacco products from the table due to small sample sizes.
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Table 2-4a. Prevalence of Current Flavored Tobacco Product Use Among High School Respondents Who Reported Currently Using Each Tobacco Product by Race/Ethnicity
Tobacco
Product
White
African American or
Black Hispanic
N % (95% CI) N % (95% CI) N % (95% CI)
Any flavored
tobacco use*
900 86.3 (82.0–89.8) 67 96.0 (91.2–98.6) 1,085 82.7 (77.1–87.4) Vapes 754 92.9 (89.9–95.2) 55 98.7 (95.4–99.8) 923 84.6 (78.3–89.7) Cigarettes** 222 28.7 (19.0–40.0) 13 — — 137 57.6 (43.7–70.6) Note. CI = confidence interval.
* Includes use of vapes, cigarettes, LCCs, cigars, hookah, smokeless tobacco, and/or HTPs. All products except for vapes and cigarettes were removed from the table due to small sample sizes. ** Menthol was the only available flavor for cigarettes. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A.
Table 2-4b. Prevalence of Current Flavored Tobacco Product Use Among High School Respondents Who Reported Currently Using Each Tobacco Product by Race/Ethnicity
Tobacco
Product
Asian Other Multiracial
N % (95% CI) N % (95% CI) N % (95% CI)
Any flavored
tobacco use*
120 94.4 (87.4–98.2) 59 91.7 (77.1–98.4) 226 87.8 (80.8–93.0) Vapes 104 95.9 (88.3–99.2) 43 — — 189 89.2 (79.7–95.3)
Cigarettes** 20 — — 13 — — 52 — —
Note. CI = confidence interval.
* Includes use of vapes, cigarettes, LCCs, cigars, hookah, smokeless tobacco, and/or HTPs. All products except for vapes and cigarettes were removed from the table due to small sample sizes. ** Menthol was the only available flavor for cigarettes. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A.
Table 2-5 shows results by grade. Due to small sample sizes, we are unable to make comparisons for some tobacco products. Use of flavored vapes was higher among respondents in 12th grade (90.0%) than in 10th grade (87.7%). Use of menthol cigarettes and flavored cigars was higher among respondents in 10th grade (51.1% and 62.7%, respectively) than in 12th grade (41.7% and 39.7%, respectively).
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Table 2-5. Prevalence of Current Flavored Tobacco Product Use Among High School Respondents Who Reported Currently Using Each Tobacco Product by Grade
Tobacco Product
10th Grade 12th Grade
N % (95% CI) N % (95% CI)
Any of the below* 998 86.6 (82.7–90.5) 1,466 85.0 (81.7–88.3) Vapes 839 87.7 (82.8–92.6) 1,231 90.0 (87.1–92.8)
Cigarettes** 160 51.1 (38.3–63.9) 297 41.7 (29.9–53.4)
LCCs 102 — — 130 51.5 (38.4–64.5)
Cigars 122 62.7† (46.8–78.6) 172 39.7 (27.9–51.4)
Hookah 88 76.2† (61.1–91.3) 107 — —
Smokeless 89 72.0 (58.5–85.5) 89 — —
HTPs 72 — — 68 77.7 (64.8–90.6)
Note. HTPs = heated tobacco products; LCCs = little cigars or cigarillos; CI = confidence interval. * As the sample size for the subgroup for each product varies, estimates for each product may be greater than that of “any of the below.”
** Menthol was the only available flavor for cigarettes. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
Table 2-6 shows the use of flavored tobacco products by LGBTQ+ status. Estimates for respondents of unclear LGBTQ+ status and estimate for products other than vapes, cigarettes, and cigars are suppressed due to small sample sizes. Where estimates are available for specific products, use of flavored tobacco products varied by LGBTQ+ status.
Use of menthol cigarettes and flavored cigars was higher among LGBTQ+ respondents (48.4% and 63.8%, respectively) than non-LGBTQ+ respondents (39.5% and 44.2%, respectively); however, these estimates should be interpreted with caution. Use of flavored vapes was higher among non-LGBTQ+ respondents (89.7%) than LGBTQ+ respondents (88.7%).
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Table 2-6. Prevalence of Current Flavored Tobacco Product Use Among High School Respondents Who Reported Currently Using Each Tobacco Product, by LGBTQ+ Status
LGBTQ+ Non-LGBTQ+
Tobacco Product N % (95% CI) N % (95% CI)
Any flavored tobacco use* 656 86.9 (80.6–91.8) 1,441 85.7 (82.7–88.4) Vapes 537 88.7 (80.4–94.3) 1,229 89.7 (86.3–92.5)
Cigarettes** 165 49.4 (37.4–61.4) 216 39.5† (24.8–55.7) Cigars 86 63.8† (44.6–80.2) 164 44.2† (28.8–60.4)
Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * Includes use of vapes, cigarettes, LCCs, cigars, hookah, smokeless tobacco, and/or HTPs. All products except for vapes and cigarettes were removed from the table due to small sample sizes. ** Menthol was the only available flavor for cigarettes. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
2.4 Use of Specific Flavor Types
The 2023 CYTS asked respondents to indicate the flavor type they used most often. As shown in Tables 2-7a and 2-7b, flavor popularity varied by product. Fruit was the most popular flavor among respondents who were currently vaping (48.7%), using hookah (32.9%), and using HTPs (17.5%). Tobacco was the most popular flavor among respondents who were smoking cigars (29.8%) and using smokeless tobacco (23.5%).
Almost half (45%) of respondents who currently smoked reported smoking menthol cigarettes.
Table 2-7a. Prevalence of Endorsing Specific Flavors Among High School Respondents Who Reported Currently Using Each Tobacco Product Flavors
Vapes
N = 2,070
% (95% CI)
Cigarettes***
N = 457
% (95% CI)
LCCs
N = 232
% (95% CI)
Cigars
N = 294
% (95% CI)
Unflavored 8.0 (5.6–11.0) 55.0 (46.1–63.6) 29.2 (18.6–41.6) 20.4 (12.4–30.5) Tobacco flavored 2.9 (1.6–4.7) N/A 20.8 (13.2–30.1) 29.8 (21.0–39.8) Menthol 2.2 (1.3–3.6) 45.0 (36.4–53.9) 9.7† (3.6–20.0) 3.4† (1.0–8.1) Mint 9.3 (7.1–12.0) N/A 2.3† (0.5–6.6) 7.2† (1.1–22.2)
Cooling, ice, or
frosty
9.2 (7.1–11.6) N/A 0.4 (0.0–1.3) 5.8† (2.1–12.4)
Clove or spice 0.4 (0.1–1.4) N/A 3.9† (1.1–9.5) 1.0 (0.4–2.3) (continued)
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Table 2-7a. Prevalence of Endorsing Specific Flavors Among High School Respondents Who Reported Currently Using Each Tobacco Product (continued)
Flavors
Vapes
N = 2,070
% (95% CI)
Cigarettes***
N = 457
% (95% CI)
LCCs
N = 232
% (95% CI)
Cigars
N = 294
% (95% CI)
Fruit 48.7 (44.1–53.4) N/A 14.4 (7.5–24.2) 10.7† (5.1–19.1) Alcoholic drink* 1.2 (0.7–2.1) N/A 2.5 (1.1–4.7) 3.1 (1.3–6.1) Non-alcoholic
drink**
0.9 (0.3–1.9) N/A 0.8 (0.2–2.0) 1.8† (0.2–5.9)
Candy, chocolate,
desserts, or other
sweets
10.0 (7.7–12.7) N/A 7.5† (2.9–15.3) 5.6† (2.2–11.5)
Some other flavor 7.1 (5.4–9.0) N/A 8.7† (3.8–16.5) 11.3† (5.4–20.3) Note. LCCs = little cigars or cigarillos; CI = confidence interval. * Such as wine, cognac, margarita, or other cocktails.
** Such as coffee, soda, energy drinks, or other beverages. *** Menthol was the only available flavor for cigarettes. All other flavors are labeled N/A (not applicable).
† The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
Table 2-7b. Prevalence of Endorsing Specific Flavors Among High School Respondents Who Reported Currently Using Each Tobacco Product Flavors
Hookah
N = 195
% (95% CI)
Smokeless
N = 178
% (95% CI)
HTPs
N = 140
% (95% CI)
Unflavored 5.7† (2.4–11.2) 10.4 (5.3–17.8) 10.6 (6.2–16.5) Tobacco flavored 17.1† (6.1–34.7) 23.5 (10.9–40.8) 14.3† (5.2–29.2) Menthol 7.9 (4.1–13.6) 13.5† (5.4–26.5) 8.9 (4.4–15.5)
Mint 8.1† (2.8–17.3) — — — —
Cooling, ice, or
frosty
1.1 (0.3–2.8) 2.0 (0.7–4.6) 4.7† (1.7–10.3)
Clove or spice 6.9† (2.1–16.1) 1.6 (0.2–5.1) 1.9† (0.3–5.8) Fruit 32.9 (21.4–46.1) 9.4† (2.6–22.3) 17.5† (8.0–31.4) Alcoholic drink* 2.1† (0.4–6.4) 2.0 (0.9–3.8) — —
Non-alcoholic
drink**
— — 0.2 (0.0–1.0) 0.6 (0.2–1.3)
(continued)
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Table 2-7b. Prevalence of Endorsing Specific Flavors Among High School Respondents Who Reported Currently Using Each Tobacco Product (continued)
Flavors
Hookah
N = 195
% (95% CI)
Smokeless
N = 178
% (95% CI)
HTPs
N = 140
% (95% CI)
Candy, chocolate,
desserts, or other
sweets
4.2† (1.5–9.1) 9.4† (2.4–23.1) 1.7 (0.8–3.1)
Some other flavor 8.2 (4.2–14.2) 9.7 (5.2–16.2) 9.6† (4.4–17.6) Note. HTPs = heated tobacco products; CI = confidence interval. * Such as wine, cognac, margarita, or other cocktails.
** Such as coffee, soda, energy drinks, or other beverages. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
2.5 Perceived Accessibility of Flavored Tobacco Products In addition to asking questions of respondents who were currently using tobacco products about which flavors they were using, we asked all respondents, regardless of user status, how easy they thought it was to access flavored tobacco products from a store, the internet (including apps), or someone else. The survey did not provide a definition for flavored tobacco products in the survey item. Respondents who responded “somewhat easy” or “very easy” to each question were coded as perceiving that it was easy to access flavored tobacco products. Respondents who responded “somewhat difficult” or “very difficult” were coded as not perceiving that it was easy to access flavored tobacco products. Perceived access for vapes and cigarettes (without mention of the products being flavored or unflavored) is presented in Chapter 3.
Table 2-8 presents the percentage of high school respondents who perceived that it was easy to obtain flavored tobacco products from a store, from the internet, and from someone else. About a third of respondents thought it was easy to access flavored tobacco products from a store (38.5%), while many more thought it was easy to access flavored products from the internet (61.4%) or from someone else (63.6%).
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Table 2-8. Prevalence of Perceiving That it was Easy to Access Flavored Tobacco Products Among High School Respondents
Characteristic
From a store From the internet From someone else
N % (95% CI) N % (95% CI) N
% (95%
CI)
Overall 29,943 38.5 (37.3–39.8) 29,809 61.4 (60.2–62.6) 29,861 63.6 (62.3–64.9)
2.6 Summary
Most high school respondents who were currently using tobacco reported using flavored tobacco. This finding was consistent regardless of gender identity, race/ethnicity, or grade.
Out of all tobacco products, flavored product use was highest for vapes, with 89.1% of respondents who currently vaped reporting using flavored vapes. Almost half (45.0%) of respondents who smoked cigarettes reported using menthol cigarettes in the last 30 days.
The popularity of flavor types varied by product, but fruit flavors were popular for several products, including vapes. Respondents reported that they believed it was easier to access flavored tobacco products from the internet or another person than from a store. Findings for flavored tobacco should be interpreted with caution. The CYTS asks respondents to identify their most commonly used flavor, as opposed to asking them for all flavors they have used in the past 30 days. As a result, it is possible that some users categorized as unflavored users have also used flavored products in the past 30 days, and vice versa. For discussion of flavored tobacco use within the context of Senate Bill (SB) 793, please see the Conclusions section of the report.
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3. Access to Vapes and Cigarettes
Age restrictions are intended to make it difficult for youth to access tobacco products. The minimum legal age to purchase tobacco products, including vapes, in California is 21 years old. As a result, it is important to monitor how underage youth acquire tobacco products, particularly through retail sources. This chapter presents data on how respondents acquired vapes and cigarettes. We asked respondents who currently vaped and smoked cigarettes how they usually got their vapes (or pods or e-liquid) or cigarettes, respectively. We then asked respondents who reported buying their own vapes or cigarettes where they usually bought their vapes (or pods or e-liquid) or cigarettes.
3.1 Acquisition of Vapes
Table 3-1 presents methods of vape acquisition among respondents who reported currently vaping. The most common method of obtaining vapes was buying their own (34.9%).
Besides purchasing one’s own vapes, other common methods were asking someone else to buy them (21.4%) and someone giving them to the respondent (18.2%). The least commonly reported method was taking them from someone (4.9%).
Among respondents who reported purchasing their own vapes, the most common source was buying them from another person (30.5%), followed by from a tobacco or smoke shop (25.0%). When looking by grade, among respondents who purchased their own vapes, the most common purchasing source reported by 10th graders was another person (45.5%), and the most common purchasing source for 12th graders was a tobacco or smoke shop (29.6%).
Table 3-1. Methods of Accessing Vapes Among High School Respondents Who Were Currently Vaping, by Grade
Method
Overall
N = 2,055
% (95% CI)
10th Grade
N = 836
% (95% CI)
12th Grade
N = 1,219
% (95% CI)
I ask someone to buy them
for me
21.4 (18.0–25.1) 23.9 (17.9–30.8) 19.8 (16.2–23.8)
Someone gives them to me 18.2 (15.2–21.6) 16.8 (11.5–23.4) 19.1 (15.9–22.7) I ask someone for them 11.5 (9.3–14.1) 11.2 (7.2–16.5) 11.7 (9.2–14.6) I take them from someone 4.9 (3.5–6.7) 6.8 (3.9–10.9) 3.7 (2.5–5.2) I get them some other way 9.0 (6.8–11.7) 12.5 (8.7–17.3) 6.8 (4.5–9.8) I buy them myself* 34.9 (30.9–39.1) 28.7 (21.7–36.5) 38.8 (34.0–43.8) From a gas station or
convenience store
11.0 (6.6–17.1) 8.0† (3.3–15.8) 12.5 (7.2–19.6)
From a grocery store 1.4 (0.4–3.5) 2.2† (0.5–5.9) 1.0 (0.0–4.6) (continued)
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Table 3-1. Methods of Accessing Vapes Among High School Respondents Who Were Currently Vaping, by Grade (continued)
Method
Overall
N = 2,055
% (95% CI)
10th Grade
N = 836
% (95% CI)
12th Grade
N = 1,219
% (95% CI)
From a drugstore or
pharmacy
0.0 N/A 0.0 N/A 0.0 N/A
From a liquor store 2.7 (1.0–5.7) 0.7 (0.0–3.7) 3.6† (1.2–8.1) From a tobacco or smoke
shop
25.0 (17.6–33.7) 15.4† (5.2–32.2) 29.6 (21.0–39.5)
From a vape shop 17.4 (12.8–22.8) 14.0 (7.0–24.1) 19.0 (13.0–26.3) From a mall or shopping
center kiosk/ stand
0.0 N/A 0.0 N/A 0.0 N/A
On the internet (including
apps)
2.1 (1.2–3.4) 2.8 (1.1–5.6) 1.8 (0.7–3.6)
From someone 30.5 (23.1–38.7) 45.5† (28.7–63.1) 23.4 (16.3–31.8) Some other way 7.9 (4.8–12.0) 9.6† (4.2–18.2) 7.1 (3.6–12.3) Note. CI = confidence interval. A value of 0.0 indicates that no respondents selected that item. N/A is used in the table to indicate that there is no confidence interval because the value of the estimate is
0.0. For definitions of nominal and effective sample size, see Appendix A. * Numbers below this row represent the percentage of respondents endorsing each location among those who reported buying their own vapes.
† The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
3.2 Acquisition of Cigarettes
Table 3-2 shows how respondents who were current cigarette smokers acquired cigarettes.
The most common method of obtaining cigarettes was buying them (26.5%). Besides purchasing one’s own cigarettes, other common methods of obtaining them were being given them (22.1%) and taking them from someone (22.0%). The least common method was to ask someone for them (7.5%). In terms of location of purchase among respondents who reported purchasing their own cigarettes, for several methods, the estimate was suppressed. However, among the estimates that could be obtained, the most common method of purchase among those who reported buying their own cigarettes was from a gas station or convenience store (41.0%).
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Table 3-2. Methods of Accessing Cigarettes Among High School Respondents Who Were Currently Smoking Cigarettes, by Grade
Method
Overall
N = 452
% (95% CI)
10th Grade
N = 156
% (95% CI)
12th Grade
N = 296
% (95% CI)
I ask someone to buy them
for me
8.8 (5.0–14.2) 5.5† (2.1–11.4) 10.6 (5.4–18.2)
Someone gives them to me 22.1 (15.9–29.4) 14.9 (7.2–26.1) 26.0 (19.4–33.5) I ask someone for them 7.5 (4.5–11.7) 7.7† (2.8–16.2) 7.4 (3.9–12.7) I take them from someone 22.0 (14.5–31.1) 24.7 (12.6–40.7) 20.6 (11.5–32.4) I get them some other way 12.9 (7.2–20.9) 18.6† (7.3–35.9) 9.9 (4.9–17.5) I buy them myself* 26.5 (19.2–35.0) 28.5 (17.5–41.7) 25.5 (17.3–35.2) From a gas station or
convenience store
41.0 (28.3–54.6) — — 41.7 (28.1–56.4)
From a grocery store — — 5.9† (0.6–20.2) — —
From a drugstore or
pharmacy
0.0 N/A 0.0 N/A 0.0 N/A
From a liquor store 4.0† (0.8–11.5) 0.0 N/A 6.4† (1.4–17.6) From a tobacco or smoke
shop
12.6† (4.1–27.4) 2.5 (0.9–5.2) — —
From a vape shop — — 0.0 N/A 0.0 N/A
From a mall or shopping
center kiosk/ stand
0.0 N/A 0.0 N/A 0.0 N/A
On the internet (including
apps)
5.2† (1.5–12.2) — — 3.3† (0.7–9.3)
From someone 16.9 (11.2–23.9) — — 9.4† (4.2–17.7)
Some other way 6.9† (2.1–16.0) — — 3.6† (0.9–9.0)
Note. CI = confidence interval. A value of 0.0 indicates that no respondents selected that item. N/A is used in the table to indicate that there is no confidence interval because the value of the estimate is
0.0. * Numbers below this row represent the percentage of respondents endorsing each location among those who reported buying their own cigarettes.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
There were some differences by grade. In terms of method of acquisition, 10th-grade respondents reported buying their own cigarettes (28.5%) as the most common method, followed by getting them some other way (18.6%). Twelfth-grade respondents reported being given cigarettes as the most common method of acquisition (26.0%), followed by Packet Pg. 445
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buying them (25.5%). For 10th graders, too many estimates were suppressed to determine the most common method of purchase among respondents who were currently smoking cigarettes and reported purchasing their own cigarettes. Several methods of purchase were also suppressed for 12th graders, but for those estimates that could be presented, purchasing from a gas station or convenience store was the most common method of purchase (41.7%).
3.3 Perceived Accessibility of Vapes
In addition to asking questions of respondents who were currently using vapes about how they obtained their products, we asked all respondents, regardless of user status, how easy they thought it was to access these products from a store, the internet (including apps), or someone else. Respondents who responded “somewhat easy” or “very easy” to these questions were coded as perceiving that it was easy to access these products. Respondents who responded “somewhat difficult” or “very difficult” were coded as not perceiving that it was easy to access these products. Overall, about half of respondents or more reported that they thought it was easy to get vapes from a store, the internet, or someone else. Variation in perceived ease of access existed by current vaping status.
Table 3-3 presents the percentage of high school respondents who perceived that it was easy to get vapes from a store, from the internet, and from someone else. A little over two- thirds of respondents thought it was easy to access vapes from someone else (71.6%) or from the internet (67.3%), and about half of high school respondents thought it was easy to access vapes from a store (49.9%). Current vapers reported the highest perceived ease of access from a store or from someone else, but the lowest perceived access to vapes from the internet.
Table 3-3. Prevalence of Perceiving That It Was Easy to Access Vapes Among High School Respondents, by Vaping Status
Characteristic
From a Store From the Internet From Someone Else
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 29,941 49.9 (48.7–51.1) 29,814 67.3 (66.0–68.6) 29,858 71.6 (70.3–72.8) Vaping status
Never vaping 23,927 48.3 (47.0–49.6) 23,842 67.0 (65.7–68.4) 23,876 68.8 (67.5–70.1) Former vaping 4,000 54.2 (51.2–57.2) 3,972 70.5 (67.4–73.4) 3,981 83.5 (81.2–85.7) Current vaping 2,014 63.2 (59.2–67.1) 2,000 64.2 (60.6–67.7) 2,001 84.4 (81.5–87.1) Note. CI = confidence interval.
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to vapes from a store (63.2%), followed by those who formerly (54.2%) and never vaped (48.3%). This pattern was generally true across gender identity, race/ethnicity, and grade, and LGBTQ+ status, with a couple of exceptions. Asian respondents who had never vaped and respondents who had never vaped and identified their gender in another way had higher perceived ease of access than former vapers in these same categories.
Table 3-4. Prevalence of Perceiving That It Was Easy to Access Vapes from a Store Among High School Respondents, by Vaping Status and Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status
Characteristic
Never Vaping Former Vaping Current Vaping
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 23,927 48.3 (47.0–49.6) 4,000 54.2 (51.2–57.2) 2,014 63.2 (59.2–67.1) Gender identity
Male 11,142 48.3 (46.5–50.0) 1,649 55.1 (50.1–60.1) 752 65.5 (59.4–71.3) Female 10,466 49.1 (47.5–50.8) 1,903 54.7 (51.5–57.8) 952 62.2 (56.4–67.7) Identified in
another way
1,311 46.4 (41.7–51.2) 243 45.8 (34.6–57.3) 177 60.0 (46.5–72.5) Declined to
answer
121 45.9 (31.9–60.4) 27 — — 22 — —
Race/ethnicity*
White 5,379 49.9 (47.5–52.3) 1,038 54.4 (48.1–60.5) 732 66.7 (59.2–73.7) African
American or
Black
503 58.7 (50.5–66.6) 101 71.4 (61.9–79.7) 53 88.8 (75.8–96.2) Hispanic 12,943 46.3 (44.5–48.1) 2,266 51.7 (47.5–56.0) 893 58.5 (51.6–65.1) Asian 2,782 48.9 (46.2–51.5) 215 47.2 (38.1–56.5) 104 69.8 (55.7–81.6) Other 641 52.8 (44.9–60.7) 77 69.5† (52.5–83.3) 42 — —
Multiracial 1,628 50.6 (46.5–54.7) 299 61.9 (54.5–69.0) 188 65.1 (53.6–75.4) Grade
10 13,100 46.2 (44.7–47.7) 1,768 49.3 (45.0–53.5) 816 59.7 (54.0–65.2) 12 10,827 50.8 (48.9–52.7) 2,232 58.2 (54.4–61.9) 1,198 65.4 (59.5–71.0) LGBTQ+ status
LGBTQ+ 3,639 46.9 (43.6–50.2) 904 53.3 (47.0–59.5) 531 63.4 (56.8–69.5) Non-LGBTQ+ 17,174 50.0 (48.7–51.4) 2,642 55.9 (52.2–59.7) 1,224 63.8 (57.8–69.6) Unclear LGBTQ+
status
1,999 39.7 (34.6–45.0) 241 41.5 (31.7–51.8) 123 57.9†
(41.7–72.9)
Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
Perceived access to vapes from the internet shows a different pattern (Table 3-5). Overall, more respondents who had formerly vaped perceived it was easy to access vapes from the Packet Pg. 447
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internet (70.5%) than those who had never vaped (67.0%) or currently vaped (64.2%).
However, this pattern varied by gender identity, race/ethnicity, grade, and LGBTQ+ status.
Table 3-5. Prevalence of Perceiving That It Was Easy to Access Vapes from the Internet Among High School Respondents, by Vaping Status and Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status Characteristic
Never Vaping Former Vaping Current Vaping
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 23,842 67.0 (65.7–68.4) 3,972 70.5 (67.4–73.4) 2,000 64.2 (60.6–67.7) Gender identity
Male 11,106 67.1 (65.6–68.7) 1,640 68.1 (64.6–71.4) 749 59.3 (54.2–64.3) Female 10,453 67.6 (65.7–69.5) 1,893 73.7 (70.3–76.8) 943 67.2 (61.8–72.2) Identified in
another way
1,310 70.1 (66.2–73.8) 241 66.6 (54.4–77.3) 179 69.9 (55.8–81.6) Declined to
answer
120 59.5 (44.3–73.5) 24 — — 23 — —
Race/ethnicity*
White 5,368 69.7 (67.1–72.3) 1,023 69.0
(62.9–74.6) 730 60.9 (53.6–67.9)
African
American or
Black
499 67.9 (63.1–72.4) 100 73.8
(60.0–84.8) 53 — —
Hispanic 12,899 64.8 (62.8–66.8) 2,256 70.2 (66.0–74.1) 886 65.4 (59.5–71.0) Asian 2,780 72.1 (69.8–74.3) 215 67.1 (56.8–76.4) 103 68.4 (52.5–81.7) Other 631 66.1 (58.5–73.1) 77 86.0 (74.6–93.6) 41 — —
Multiracial 1,613 68.4 (64.1–72.5) 297 76.8 (68.0–84.2) 185 64.5 (50.8–76.7) Grade
10 13,058 66.5 (64.7–68.2) 1,758 70.8 (66.9–74.4) 813 69.6 (64.4–74.5) 12 10,784 67.7 (65.9–69.5) 2,214 70.3 (66.6–73.8) 1,187 60.8 (55.6–65.8) LGBTQ+ status
LGBTQ+ 3,631 71.6 (68.4–74.6) 901 75.1 (69.4–80.3) 533 73.0 (65.9–79.3) Non-LGBTQ+ 17,138 67.9 (66.5–69.2) 2,624 70.0 (66.8–73.1) 1,214 60.9 (56.0–65.5) Unclear LGBTQ+
status
1,990 58.6 (53.9–63.2) 240 67.5
(58.0–76.0) 122 51.8 (37.9–65.6)
Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A.
Table 3-6 presents findings for perceived access to vapes from someone else. Overall, respondents who currently vaped had the highest perceived access to vapes from someone else (84.4%), followed by respondents who had formerly (83.5%) and never vaped (68.8%).
This pattern was generally true across gender identity, race/ethnicity, grade, and LGBTQ+ Packet Pg. 448
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status. One exception was that Hispanic respondents who had formerly vaped reported higher perceived access than Hispanic respondents who currently vaped.
Table 3-6. Prevalence of Perceiving That It Was Easy to Access Vapes from Someone Else Among High School Respondents, by Vaping Status and Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status Characteristic
Never Vaping Former Vaping Current Vaping
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 23,876 68.8 (67.5–70.1) 3,981 83.5 (81.2–85.7) 2,001 84.4 (81.5–87.1) Gender identity
Male 11,135 67.4 (65.5–69.3) 1,644 81.1 (78.0–83.9) 750 82.6 (77.9–86.7) Female 10,494 72.1 (70.5–73.6) 1,900 87.1 (84.4–89.6) 953 87.2 (82.6–91.0) Identified in
another way
1,314 63.2 (58.5–67.7) 245 76.6 (66.2–85.1) 177 81.9 (71.0–90.0) Declined to
answer
115 55.3 (40.8–69.2) 25 — — 23 — —
Race/ethnicity*
White 5,380 72.2 (69.9–74.5) 1,032 85.3 (80.4–89.4) 729 89.0 (83.5–93.2) African American
or Black
502 71.8 (61.1–81.0) 100 83.8 (74.5–90.8) 52 92.3 (79.5–98.3) Hispanic 12,910 67.7 (65.8–69.6) 2,261 82.8 (79.7–85.7) 888 80.9 (75.7–85.4) Asian 2,780 65.6 (61.9–69.2) 212 80.3 (71.7–87.2) 103 82.0 (67.9–91.8) Other 636 65.2 (58.7–71.3) 77 75.4† (56.9–88.8) 42 — —
Multiracial 1,618 72.4 (68.8–75.8) 295 86.7 (80.2–91.7) 185 87.1 (75.7–94.4) Grade
10 13,077 66.8 (65.0–68.6) 1,758 84.6 (81.1–87.7) 812 85.7 (80.7–89.9) 12 10,799 71.2 (69.6–72.7) 2,223 82.7 (78.6–86.2) 1,189 83.6 (78.8–87.7) LGBTQ+ status
LGBTQ+ 3,637 70.7 (68.0–73.2) 907 85.8 (81.6–89.4) 531 87.4 (82.5–91.3) Non-LGBTQ+ 17,191 70.3 (68.6–72.0) 2,635 83.9 (81.0–86.5) 1,224 83.7 (79.3–87.4) Unclear LGBTQ+
status
2,005 59.0 (53.8–64.0) 239 79.5 (71.4–86.2) 123 81.3 (69.2–90.1) Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
3.4 Perceived Access for Cigarettes
We also examined perceived access to cigarettes from the same three locations (Table 3-7).
As with vapes, respondents reported highest perceived access from someone else (60.8%), followed by the internet (58.7%) or a store (37.0%). Also in alignment with vapes, Packet Pg. 449
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respondents who currently smoked cigarettes reported the highest perceived access to cigarettes from someone else or from a store, and respondents who had never smoked reported the lowest. Respondents who currently, formerly, and never smoked reported similar perceived access to cigarettes from the internet.
Table 3-7. Prevalence of Perceiving That It Was Easy to Access Cigarettes Among High School Respondents, by Cigarette Smoking Status Characteristic
From a Store From the Internet From Someone Else
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 29,963 37.0 (35.9–38.0) 29,826 58.7 (57.4–60.0) 29,866 60.8 (59.3–62.2) Cigarette
smoking status
Never smoking 27,967 36.2 (35.2–37.2) 27,845 58.7 (57.3–60.0) 27,884 59.9 (58.4–61.5) Former
smoking
1,554 44.5 (40.1–48.9) 1,546 58.7 (54.2–63.2) 1,549 71.3 (64.1–77.8)
Current
smoking
442 66.3 (56.4–75.2) 435 55.7 (46.1–65.0) 433 85.9
(79.6–90.8)
Note. CI = confidence interval.
Table 3-8 presents findings for perceived access to cigarettes from a store by vaping status and demographics. Overall, more respondents who currently smoked reported it was easy to access cigarettes from a store (66.3%) than those who had formerly (44.5%) or never smoked (36.2%). This pattern was consistent across gender identity categories, race/ethnicity, grade, and LGBTQ+ status, where responses were not suppressed.
Table 3-9 examines perceived ease of access to cigarettes on the internet. Perceived ease of access was similar among respondents who currently smoked and those who had formerly and never smoked. For subgroups in which there was variation across smoking status (e.g., Hispanic and LGBTQ+ students), the highest perceived access was reported by respondents who had never smoked, followed by those who currently smoked and those who had formerly smoked. This is the opposite pattern as that observed by smoking status for access to cigarettes from a store or another person. However, many of these differences should be interpreted with caution due to low precision for some estimates.
Packet Pg. 450
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 3-8. Prevalence of Perceiving That It Was Easy to Access Cigarettes from a Store Among High School Respondents, by Cigarette Smoking Status and Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status Characteristic
Never Smoking Former Smoking Current Smoking
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 27,967 36.2 (35.2–37.2) 1,554 44.5 (40.1–48.9) 442 66.3 (56.4–75.2) Gender identity
Male 12,706 36.6 (34.8–38.4) 665 49.0 (42.0–56.1) 182 65.2† (48.5–79.6) Female 12,544 36.4 (34.9–37.9) 648 43.0 (36.2–49.9) 137 55.4† (39.3–70.7) Identified in
another way
1,491 33.3 (29.4–37.5) 142 35.9 (24.4–48.6) 99 76.0 (59.8–88.2) Declined to
answer
154 31.6 (19.6–45.6) 11 — — 6 — —
Race/ethnicity*
White 6,359 35.6 (33.3–37.9) 577 44.6 (37.6–51.9) 215 66.5 (51.2–79.6) African
American or
Black
622 44.1 (38.1–50.4) 23 — — 13 99.1 —
Hispanic 15,278 34.8 (33.7–36.0) 703 42.5 (36.7–48.3) 133 59.4† (42.8–74.6) Asian 3,001 40.2 (38.0–42.4) 81 45.8† (29.0–63.3) 20 — — Other 710 37.1 (29.5–45.1) 41 — — 12 — —
Multiracial 1,943 38.6 (34.9–42.5) 125 41.0 (28.3–54.6) 49 — — Grade
10 14,923 33.4 (32.1–34.7) 618 43.9 (35.1–53.0) 157 60.8† (41.7–77.8) 12 13,044 39.5 (38.0–40.9) 936 44.8 (40.1–49.6) 285 69.2 (58.0–79.0) LGBTQ+ status
LGBTQ+ 4,466 34.2 (31.7–36.7) 444 38.9 (30.3–48.0) 165 69.6 (56.0–81.0) Non-LGBTQ+ 19,949 37.3 (36.1–38.5) 890 50.0 (43.6–56.3) 214 63.9 (49.8–76.4) Unclear LGBTQ+
status
2,213 32.4 (28.7–36.2) 117 32.5 (19.4–48.0) 38 — —
Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
Packet Pg. 451
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 3-9. Prevalence of Perceiving That It Was Easy to Access Cigarettes from the Internet Among High School Respondents, by Cigarette Smoking Status and Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status
Characteristic
Never Smoking Former Smoking Current Smoking
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 27,845 58.7 (57.3–60.0) 1,546 58.7 (54.2–63.2) 435 55.7 (46.1–65.0) Gender identity
Male 12,655 59.0 (57.4–60.7) 664 57.0 (50.9–63.0) 181 41.6† (27.0–57.3) Female 12,519 58.8 (57.2–60.4) 644 56.9 (48.5–65.1) 134 55.3† (38.6–71.1) Identified in
another way
1,490 61.1 (57.2–64.9) 142 77.3 (65.5–86.7) 97 — —
Declined to
answer
149 56.3 (43.5–68.5) 12 — — 7 — —
Race/ethnicity*
White 6,341 59.8 (57.4–62.1) 568 52.7 (45.0–60.4) 212 46.9 (34.6–59.6) African
American or
Black
617 60.5 (54.0–66.8) 23 — — 13 — —
Hispanic 15,211 56.4 (54.4–58.3) 706 59.5 (53.5–65.2) 130 51.1 (37.1–65.0) Asian 2,997 66.2 (63.9–68.4) 81 67.5† (49.8–82.1) 20 — — Other 701 61.8 (54.7–68.6) 41 — — 11 — —
Multiracial 1,924 61.1 (57.2–64.9) 123 59.8† (42.5–75.5) 49 — — Grade
10 14,871 58.5 (56.9–60.2) 614 59.6 (51.3–67.5) 155 51.2 (38.9–63.5) 12 12,974 58.9 (57.2–60.5) 932 58.2 (52.9–63.3) 280 58.1 (44.6–70.8) LGBTQ+ status
LGBTQ+ 4,462 63.3 (60.6–65.9) 445 61.6 (53.4–69.5) 162 60.2 (45.4–73.9) Non-LGBTQ+ 19,886 59.0 (57.5–60.5) 888 59.4 (54.2–64.4) 211 46.2† (31.5–61.5) Unclear LGBTQ+
status
2,199 52.4 (48.3–56.5) 115 39.7† (25.0–55.9) 38 — —
Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
Packet Pg. 452
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 3-10 presents findings for perceived access of cigarettes from someone else by vaping status and demographics. Overall, respondents who currently smoked had the highest perceived access (85.9%) compared to those who had formerly (71.3%) and never smoked (59.9%). This pattern was consistent across gender identity, race/ethnicity, grade and LGBTQ+ status. Comparisons by smoking status and race/ethnicity were difficult to make due to suppressed values.
Table 3-10. Prevalence of Perceiving That It Was Easy to Access Cigarettes from Someone Else Among High School Respondents, by Cigarette Smoking Status and Gender Identity, Race/Ethnicity, Grade, and LGBTQ+ Status
Characteristic
Never Smoking Former Smoking Current Smoking
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 27,884 59.9 (58.4–61.5) 1,549 71.3 (64.1–77.8) 433 85.9 (79.6–90.8) Gender identity
Male 12,683 57.9 (56.0–59.8) 663 68.5 (54.4–80.5) 179 83.2 (69.6–92.4) Female 12,572 63.3 (61.1–65.4) 650 73.4 (66.5–79.5) 136 87.5 (78.5–93.8) Identified in
another way
1,496 53.1 (48.9–57.4) 144 76.0 (63.0–86.2) 96 87.6 (75.4–95.1) Declined to
answer
145 51.5 (38.7–64.2) 12 — — 7 — —
Race/ethnicity*
White 6,358 62.0 (59.6–64.4) 575 77.3 (69.9–83.6) 211 88.7 (79.6–94.7) African
American or
Black
619 55.5 (48.5–62.4) 23 — — 13 98.0 —
Hispanic 15,224 59.6 (57.6–61.6) 704 68.4 (60.9–75.2) 129 77.4 (62.0–88.7) Asian 2,995 58.9 (55.9–61.8) 80 72.8† (53.8–87.2) 20 93.7 (72.7–99.7) Other 705 58.1 (51.4–64.5) 41 — — 12 — —
Multiracial 1,931 62.0 (58.2–65.8) 122 81.7 (67.5–91.5) 48 90.1 (73.6–98.0) Grade
10 14,884 58.0 (56.2–59.8) 618 66.8 (54.9–77.3) 154 77.3 (62.8–88.2) 12 13,000 62.2 (60.2–64.1) 931 74.3 (68.1–79.9) 279 90.5 (82.1–95.8) LGBTQ+ status
LGBTQ+ 4,470 59.8 (55.8–63.6) 446 72.2 (64.1–79.3) 161 89.2 (79.8–95.2) Non-LGBTQ+ 19,950 61.2 (59.6–62.8) 893 72.1 (61.7-81.1) 211 83.0 (72.2–90.9) Unclear
LGBTQ+ status
2,215 53.1 (48.9–57.3) 116 62.9†
(46.3–77.5) 38 — —
Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
Packet Pg. 453
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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3.5 Summary
The most common method of obtaining vapes among high school respondents who currently vaped was buying their own. Among those who bought their own vapes, the most common method of accessing them was to buy from someone else. The most common method of obtaining cigarettes was buying them.
Among all respondents, vapes were perceived as easier to obtain than cigarettes. We examined perceived ease of access via a store, the internet, and someone else. For vapes, the source that was easiest to access was from another person; 71.6% of respondents thought it was easy to access vapes from someone else. The same was true for cigarettes;
60.8% of respondents thought it was easy to access cigarettes from someone else. There were differences in perceived access by vaping and cigarette smoking status, with respondents who were currently using vapes generally reporting greater ease of access than those who had formerly or never used them, except when accessing vapes from the internet.
For accessing vapes from the internet, respondents who had formerly and never vaped reported higher ease of access than those who currently vaped. In general, patterns of ease of access by user status persisted across demographic categories. Packet Pg. 454 Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing)
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4. Secondhand Exposure and Other Environmental Influences This chapter focuses on environmental influences for tobacco use. It presents self-reported respondent exposure to secondhand vapor (i.e., vapor or aerosol from a vape or e -cigarette) and tobacco smoke and information on home bans for vaping and tobacco smoke. It also presents information on exposure to vaping and smoking in the media. The prevalence of exposure to environmental influences is compared across tobacco use status when possible.
It should be noted that questions about vapes reported in this chapter asked about vapes generally and did not specify the substance in the vape (e.g., nicotine, marijuana). As a result, responses could include exposure to vapes with marijuana.
4.1 Exposure to Secondhand Vapor and Tobacco Smoke in Car or Room and Outside
The 2023 CYTS asked respondents about exposure to vapor and tobacco smoke. To assess exposure to secondhand vapor in a car or room, the survey asked, “In the last 2 weeks, were you in a car or room when someone was using a vape?” A similar question asked about secondhand exposure to tobacco smoke in a car or room by replacing the phrase “using a vape” with the phrase “smoking a cigarette, little cigar, or cigarillo.” To assess exposure to secondhand vapor outside, the survey asked, “In the last 2 weeks, were you near someone who was using a vape…” We defined participants as having been exposed to secondhand vapor outside if they endorsed one or more of the following: “outside of a restaurant;” “outside of a store;” “at a park, playground, or beach”; or “on a sidewalk.” A similar question asked about secondhand exposure to tobacco smoke outside by replacing the phrase “using a vape” with the phrase “smoking a cigarette, little cigar, or cigarillo.” Table 4-1 reports high school respondents’ exposure to secondhand vapor and tobacco smoke in a car or room. One-third (32.9%) of respondents had been exposed to vapor or tobacco smoke in a car or room within the last 2 weeks. Secondhand exposure in a car or room was higher for exposure to vapes (29.0%) than tobacco smoke (14.1%). Respondents who currently vaped and currently smoked tobacco reported higher rates of exposure to vapor, tobacco smoke, and either vapor or tobacco smoke, compared to those who had never or formerly vaped and never or formerly smoked tobacco.
Packet Pg. 455
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 4-1. Prevalence of Last-2-Week Exposure to Vapor and Tobacco Smoke in Car or Room Among High School Respondents, by Vaping and Tobacco Smoking Status
Use Status
Vapor Exposure
Tobacco Smoke*
Exposure
Vapor or Tobacco
Smoke Exposure
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 30,917 29.0 (27.2–30.9) 30,940 14.1 (13.3–15.0) 30,918 32.9 (31.0–34.8) Vaping status
Never 24,689 22.2 (20.5–24.0) 24,703 11.6 (10.7–12.6) 24,690 26.2 (24.4–28.1) Former 4,110 49.9 (46.7–53.0) 4,113 21.4 (19.2–23.6) 4,111 53.5 (50.5–56.5) Current 2,092 80.1 (76.3–83.5) 2,093 33.4 (29.5–37.6) 2,091 81.7 (78.0–85.0) Tobacco
smoking
status*
Never 28,467 26.4 (24.7–28.2) 28,484 12.4 (11.6–13.3) 28,466 30.3 (28.5–32.2) Former 1,849 60.6 (56.3–64.8) 1,851 30.5 (27.4–33.8) 1,851 63.7 (59.5–67.8) Current 584 79.3 (73.0–84.8) 585 60.1 (52.3–67.5) 584 84.9 (78.9–89.8) Note. CI = confidence interval.
*Includes cigarettes, little cigars or cigarillos, or both.
Table 4-2 shows respondents’ exposure to secondhand vapor and tobacco smoke outside.
Respondents were considered having been exposed outside if they reported being near someone who was using a vape, smoking tobacco, or either outside of a restaurant, outside of a store, on a sidewalk, or at a park, playground, or beach in the last 2 weeks. Reported exposure outside was higher than reported exposure in a car or room. Over half (63.8%) of respondents had been exposed to vapor or tobacco smoke outside within the last 2 weeks.
Exposure to tobacco smoke outside (57.8%) was higher than exposure to vapor outside (42.1%). Respondents who currently vaped and currently smoked tobacco reported higher rates of exposure to vapor, tobacco smoke, and either vapor or tobacco smoke outside than respondents who had never or formerly vaped and never or formerly smoked tobacco.
Packet Pg. 456
Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 4-2. Prevalence of Last-2-Week Exposure to Vapor and Tobacco Smoke Outside Among High School Respondents, by Vaping and Tobacco Smoking Status
Use Status
Vapor Exposure
Tobacco Smoke
Exposure
Vapor or Tobacco
Smoke Exposure
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 30,649 42.1 (40.6-43.7) 30,696 57.8 (56.1-59.4) 30,660 63.8 (62.2-65.4) Vaping status
Never 24,501 37.6 (36.0-39.2) 24,526 56.1 (54.4-57.7) 24,499 60.9 (59.1-62.6) Former 4,066 56.0 (53.6-58.4) 4,070 63.1 (60.0-66.1) 4,067 72.6 (70.3-74.8) Current 2,057 76.1 (72.5-79.5) 2,071 69.9 (65.7-73.8) 2,067 85.4 (82.3-88.1) Tobacco smoking
status*
Never 28,236 40.3 (38.8-41.8) 28,269 56.9 (55.2-58.5) 28,238 62.6 (60.9-64.2) Former 1,821 64.6 (60.2-68.9) 1,830 65.8 (60.8-70.5) 1,829 77.9 (73.2-82.1) Current 576 80.2 (74.2-85.4) 577 84.7 (76.9-90.7) 576 91.6 (87.0-95.0) Note. CI = confidence interval.
* Includes cigarettes, little cigars or cigarillos, or both.
Table 4-3 shows exposure to secondhand smoke in MUH. About half of respondents (49.8%) reported any exposure to smoke in their home in the last 6 months. However, less than 10 % of respondents reported frequent exposure (“often” or “most of the time”).
Table 4-3. Prevalence of Last-6-Month Exposure to Tobacco Smoke in Multiunit Housing Among High School Respondents Living in Multiunit Housing Frequency of Exposure
Tobacco Smoke Exposure*
N % (95% CI)
Never 4,135 51.2 (48.8–53.5)
Rarely 1,749 25.2 (23.8–26.7)
Sometimes 962 13.8 (12.6–15.1)
Often 327 5.7 (4.7–6.8)
Most of the time 238 4.1 (3.0–5.5)
Note. CI = confidence interval.
* Includes cigarettes, little cigars or cigarillos, or both.
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Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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4.2 Exposure to Secondhand Vapor and Tobacco Smoke by
Race/Ethnicity
4.2.1 Indoors
We examined exposure to secondhand vapor and tobacco smoke by demographics. Table 4- 4 provides data on secondhand exposure to vapor, tobacco smoke, and either vapor or tobacco smoke in a car or room by race/ethnicity. White respondents had the highest reported secondhand vapor exposure (42.0%), tobacco smoke exposure (32.7%), and either vapor or tobacco smoke exposure (45.6%) out of all race/ethnicity groups, and Asian respondents had the lowest (20.2% vapor exposure, 16.5% smoke exposure, 25.4% exposure to either).
Table 4-4. Prevalence of Last-2-Week Exposure to Vapor or Tobacco Smoke in a Car or Room Among High School Respondents, by Race/Ethnicity Characteristic
Vapor Exposure
Tobacco Smoke
Exposure
Vapor or Tobacco Smoke
Exposure
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 30,891 29.0 (27.2–30.9) 30,920 14.1 (13.3–15.0) 30,918 32.9 (31.0–34.8) Race/ethnicity*
White 7,375 42.0 (39.7–44.2) 7,378 18.1 (16.5–19.8) 7,380 45.6 (43.2–47.9) African American or
Black
686 28.4 (24.0–33.1) 688 19.9 (14.3–26.6) 687 36.2 (29.9–43.0) Hispanic 16,652 24.5 (22.5–26.7) 16,667 11.7 (10.6–12.8) 16,666 27.8 (25.6–30.0) Asian 3,171 20.2 (17.3–23.4) 3,171 12.5 (10.5–14.6) 3,171 25.4 (22.6–28.3) Other 778 27.5 (22.7–32.7) 781 16.0 (12.3–20.2) 779 32.5 (28.1–37.2) Multiracial 2,160 36.6 (33.4–40.0) 2,165 18.0 (15.4–20.8) 2,164 41.1 (37.6–44.6) Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
Table 4-5 presents exposure to vapor in a car or room by vaping status and race/ethnicity.
Overall, current vapers reported higher exposure (80.1%) than former (49.9%) and never vapers (22.2%). This pattern was consistent across race/ethnicity categories, where values were available.
Table 4-6 shows secondhand exposure to tobacco smoke in a car or room by smoking status and race/ethnicity. As with vaping, respondents who currently smoked reported higher exposure (60.1%) than respondents who formerly (30.5%) or never smoked (12.4%). This pattern was consistent across race/ethnicity categories, where values were available.
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Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 4-5. Prevalence of Last-2-Week Exposure to Vapor in Car or Room Among High School Respondents, by Vaping Status and Race/Ethnicity Characteristic
Never Vaping Former Vaping Current Vaping
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 24,689 22.2 (20.5–24.0) 4,110 49.9 (46.7–53.0) 2,092 80.1 (76.3–83.5) Race/ethnicity*
White 5,543 32.7 (30.3–35.1) 1,071 63.7 (59.4–67.8) 761 89.1 (84.5–92.8) African
American or
Black
524 19.8 (15.0–25.3) 107 — — 55 — —
Hispanic 13,402 18.7 (16.7–20.9) 2,315 42.8 (38.9–46.9) 935 73.1 (67.6–78.0) Asian 2,843 16.5 (13.8–19.4) 221 49.7 (39.8–59.7) 107 78.9 (63.1–90.2) Other 656 23.3 (18.3–29.0) 80 31.4† (17.1–48.9) 42 — —
Multiracial 1,658 28.8 (25.7–32.2) 312 53.9 (42.8–64.7) 190 86.7 (78.8–92.4) Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
Table 4-6. Prevalence of Last-2-Week Exposure to Tobacco Smoke in Car or Room Among High School Respondents, by Tobacco Smoking Status and Race/Ethnicity
Characteristic
Never Smoking** Former Smoking** Current Smoking**
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 28,484 12.4 (11.6–13.3) 1,851 30.5 (27.4–33.8) 585 60.1 (52.3–67.5) Race/ethnicity*
White 6,465 15.6 (14.0–17.2) 656 34.0 (28.8–39.4) 257 63.8 (50.4–75.7) African
American or
Black
634 19.4 (13.2–26.8) 36 — — 18 — —
Hispanic 15,591 10.2 (9.2–11.3) 866 28.7 (23.8–34.1) 210 60.0 (47.6–71.6) Asian 3,062 11.5 (9.6–13.7) 87 36.1† (20.8–53.8) 22 — — Other 718 14.7 (10.7–19.4) 48 — — 15 — —
Multiracial 1,949 16.1 (13.3–19.2) 155 32.0 (21.3–44.3) 61 53.9† (34.7–72.3) Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
** Includes cigarettes, little cigars or cigarillos, or both. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
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Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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4.2.2 Outside
Table 4-7 presents data on secondhand exposure to vapor or tobacco smoke outside by race/ethnicity. White respondents reported the greatest secondhand exposure to vapor (47.9%) outside. High school students who identified as multiracial reported the greatest secondhand exposure to tobacco smoke (60.0%) outside. Exposure to vapor outside was lowest among Asian respondents (34.5%) and exposure to smoke outside was lowest among African American or Black respondents (45.9%). When looking at exposure to either vapor or smoke, White respondents reported greatest exposure to either vapor or tobacco smoke (67.7%) and African American or Black respondents reported the lowest exposure (53.5%).
Table 4-7. Prevalence of Last-2-Week Exposure to Vapor or Tobacco Smoke Outside Among High School Respondents, by Race/Ethnicity Characteristic
Vapor Exposure
Tobacco Smoke
Exposure
Vapor or Tobacco
Smoke Exposure
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 30,624 42.1 (40.6–43.7) 30,676 57.8 (56.1–59.4) 30,660 63.8 (62.2–65.4) Race/ethnicity*
White 7,307 47.9 (45.5–50.4) 7,315 59.8 (57.6–61.9) 7,315 67.7 (65.5–69.9) African American
or Black
674 37.0 (31.2–43.1) 676 45.9 (37.2–54.7) 672 53.5 (45.8–61.1) Hispanic 16,500 41.2 (39.2–43.1) 16,530 57.7 (55.3–60.0) 16,512 63.1 (60.8–65.4) Asian 3,159 34.5 (31.5–37.6) 3,158 58.6 (55.5–61.6) 3,159 62.4 (59.2–65.5) Other 770 39.6 (32.7–46.8) 780 55.7 (50.6–60.8) 779 60.4 (53.7–66.8) Multiracial 2,147 47.0 (43.9–50.2) 2,149 60.0 (56.7–63.1) 2,154 66.8 (63.7–69.8) Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
Table 4-8 presents exposure to vapor outside by vaping status and race/ethnicity. Overall, current vapers reported higher exposure to vapor (76.1%) than former (56.0%) or never vapers (37.6%). This pattern was consistent across race/ethnicity categories.
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Table 4-8. Prevalence of Last-2-Week Exposure to Vapor Outside Among High School Respondents, by Vaping Status and Race/Ethnicity Characteristic
Never Vaping Former Vaping Current Vaping
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 24,501 37.6 (36.0–39.2) 4,066 56.0 (53.6–58.4) 2,057 76.1 (72.5–79.5) Race/ethnicity*
White 5,496 42.2 (39.6–44.8) 1,061 59.2 (55.0–63.3) 750 80.6 (73.9–86.3) African
American or
Black
513 33.9 (27.5–40.7) 107 38.8 (29.7–48.6) 54 — —
Hispanic 13,299 37.0 (34.9–39.2) 2,287 56.0 (52.4–59.6) 914 72.0 (66.3–77.2) Asian 2,833 31.7 (28.7–34.8) 220 57.8 (48.3–66.9) 106 74.3 (61.6–84.6) Other 650 35.8 (28.2–44.1) 78 54.2† (36.4–71.3) 42 — —
Multiracial 1,648 41.4 (38.3–44.5) 309 59.1 (47.9–69.6) 190 84.1 (74.5–91.1) Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
Table 4-9 presents exposure to tobacco smoke outside by vaping status and race/ethnicity.
As with vapor, exposure to tobacco smoke outside was higher for respondents who currently smoked (84.7%) than those who had formerly (65.8%) or never smoked (56.9%) overall.
Too many values are suppressed to compare race/ethnicity categories.
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Table 4-9. Prevalence of Last-2-Week Exposure to Tobacco Smoke Outside Among High School Respondents, by Tobacco Smoking Status and Race/Ethnicity
Characteristic
Never Smoking** Former Smoking** Current Smoking**
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 28,269 56.9 (55.2–58.5) 1,830 65.8 (60.8–70.5) 577 84.7 (76.9–90.7) Race/ethnicity*
White 6,413 58.4 (56.1–60.6) 649 67.6 (61.7–73.1) 253 89.3 (81.1–94.8) African
American or
Black
622
46.8 (38.4–55.3) 36 — — 18 — —
Hispanic 15,470 56.8 (54.4–59.1) 854 68.7 (62.5–74.6) 206 83.4 (71.8–91.6) Asian 3,049 58.4 (55.3–61.5) 87 56.3† (39.2–72.4) 22 — — Other 717 54.1 (48.7–59.5) 48 — — 15 — —
Multiracial 1,935 58.8 (55.4–62.1) 153 66.2 (54.1–76.9) 61 — — Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. ** Includes cigarettes, little cigars or cigarillos, or both. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
4.3 Home Bans on Vaping and Tobacco Smoking
Home bans are an important influence on tobacco use, including influencing initiation, relapse among respondents who previously used tobacco, and continued use among respondents who currently use tobacco. In two separate questions, respondents were asked to indicate which statement best described rules about (a) vaping and (b) smoking cigarettes or other tobacco products inside their homes. Respondents who indicated that vaping or smoking was not allowed anywhere or at any time inside their home were classified as having a “complete home ban” on vaping or smoking and were compared with respondents who provided all other responses for rules about vaping or smoking in the home (“incomplete home ban”).
Tables 4-10 and 4-11 present the prevalence of complete home bans on vaping and tobacco smoking by vaping and tobacco smoking status. For tobacco user status, tobacco smoking included smoking cigarettes and/or LCCs to create consistency with the definition for secondhand tobacco smoke exposure. Most respondents had a complete home ban on vaping and tobacco smoking (81.0% and 78.4%, respectively). Respondents who had never Packet Pg. 462
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vaped (82.9%) and formerly vaped (76.0%) more commonly reported complete home vaping bans than respondents who currently vaped (64.7%).
Table 4-10. Prevalence of Complete Home Bans on Vaping Among High School Respondents, by Current Use of Vapes
Use Status
Vaping Ban
N % (95% CI)
Overall 30,837 81.0 (79.9–82.0)
Vaping status
Never 24,634 82.9 (81.8–84.0)
Former 4,094 76.0 (73.3–78.5)
Current 2,084 64.7 (59.7–69.4)
Note. CI = confidence interval.
Similarly, respondents who had never smoked (79.1%) and formerly smoked (71.0%) more commonly reported complete home bans on smoking than those who currently smoked (56.8%; Table 4-11).
Table 4-11. Prevalence of Complete Home Bans on Tobacco Smoking Among High School Respondents, by Current Use of Smoked Tobacco
Use Status
Tobacco Smoking Ban
N % (95% CI)
Overall 30,745 78.4 (77.2–79.5)
Tobacco smoking status*
Never 28,322 79.1 (78.0–80.3)
Former 1,829 71.0 (67.0–74.8)
Current 577 56.8 (48.3–65.0)
Note. CI = confidence interval.
*Includes cigarettes, little cigars or cigarillos, or both.
We examined home bans by demographics. Table 4-12 provides data on complete home bans on vaping and smoking by race/ethnicity. Hispanic respondents had the highest prevalence of complete home bans on vaping (82.1%), and Asian respondents had the highest prevalence of complete home bans on smoking (79.6%).
Table 4-13 presents the prevalence of home vaping bans by vaping status and race/ethnicity. Generally, a higher percentage of respondents who had never vaped reported complete home bans (82.9%) compared to those who currently (64.7%) and formerly (76.0%) vaped. The pattern of bans by vaping status observed for the overall sample was consistent with the pattern observed across race/ethnicity categories, where data were not suppressed. The exception was among Asian respondents, where those who currently vaped (70.8%) reported a higher prevalence of home vaping bans than those who Packet Pg. 463
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had formerly vaped (66.2%), but those who had never vaped still reported the highest prevalence of bans (82.8%) across vaping user status.
Table 4-12. Prevalence of Complete Home B ans on Vaping and Tobacco Smoking Among High School Respondents, by Race/Ethnicity
Characteristic
Vaping Ban Tobacco Smoking Ban
N % (95% CI) N % (95% CI)
Overall 30,812 81.0 (79.9–82.0) 30,728 78.4 (77.2–79.5) Race/ethnicity*
White 7,358 80.7 (78.4–82.9) 7,346 79.2 (76.8–81.5)
African American or Black 683 72.0 (65.2–78.2) 684 66.1 (58.3–73.3) Hispanic 16,593 82.1 (80.8–83.4) 16,540 79.1 (77.8–80.4) Asian 3,170 81.4 (79.3–83.4) 3,163 79.6 (76.9–82.1)
Other 778 79.5 (74.8–83.7) 770 75.1 (69.7–80.0)
Multiracial 2,162 78.4 (75.2–81.3) 2,158 77.5 (74.4–80.5) Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
Table 4-13. Prevalence of Complete Home Vaping Bans Among High School Respondents, by Vaping Status and Race/Ethnicity
Characteristic
Never Vaping Former Vaping Current Vaping
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 24,634 82.9 (81.8–84.0) 4,094 76.0 (73.3–78.5) 2,084 64.7 (59.7–69.4) Race/ethnicity*
White 5,535 83.3 (80.9–85.4) 1,067 75.2 (69.2–80.6) 756 67.3 (60.4–73.7) African
American or
Black
521 73.6 (64.0–81.8) 108 70.4 (54.9–83.0) 54 — —
Hispanic 13,357 83.9 (82.5–85.3) 2,305 78.5 (75.4–81.4) 931 62.3 (54.8–69.4) Asian 2,843 82.8 (80.5–84.9) 220 66.2 (53.5–77.4) 107 70.8 (56.5–82.6) Other 657 81.4 (76.6–85.5) 79 67.8† (49.1–83.1) 42 — —
Multiracial 1,659 80.4 (76.8–83.6) 311 71.8 (63.5–79.1) 192 69.2 (57.8–79.1) Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.
— The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
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Attachment: California Youth Tobacco Survey 2023 Annual Report (9.1(c)--Accept Report and Provide Direction Regarding Tobacco Retailing) Results of the 2023 California Youth Tobacco Survey
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Table 4-14 presents the prevalence of home smoking bans by smoking status and race/ethnicity. Consistent with home vaping bans, a higher percentage of respondents who had never smoked reported complete home bans (79.1%) compared to those who currently (56.8%) and formerly (71.0%) smoked. Too many values were suppressed to make comparisons across race/ethnicity.
Table 4-14. Prevalence of Complete Home Bans on Tobacco Smoking Among High School Respondents, by Smoking Status and Race/Ethnicity Characteristic
Never Smoking** Former Smoking** Current Smoking**
N % (95% CI) N % (95% CI) N % (95% CI)
Overall 28,322 79.1 (78.0–80.3) 1,829 71.0 (67.0–74.8) 577 56.8 (48.3–65.0) Race/ethnicity*
White 6,442 80.3 (78.0–82.4) 651 72.1 (65.6–77.9) 253 60.9 (46.2–74.2) African
American or
Black
631 68.1 (60.9–74.7) 35 — — 18 — —
Hispanic 15,480 79.7 (78.3–81.0) 853 73.0 (66.4–78.9) 207 60.1 (46.9–72.4) Asian 3,055 80.3 (77.5–82.9) 87 63.0† (45.0–78.7) 21 — — Other 709 76.2 (70.6–81.1) 46 — — 15 — —
Multiracial 1,943 78.1 (75.0–81.0) 154 78.1 (67.5–86.5) 61 — — Note. CI = confidence interval.
* With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey. ** Includes cigarettes, little cigars or cigarillos, or both. — The estimate has been suppressed due to small sample sizes, specifically, a nominal or effective sample size less than 30. For definitions of nominal and effective sample size, see Appendix A. † The estimate should be interpreted with caution given concerns about precision. The estimate meets one or both of the following criteria: (a) the absolute width of the Korn-Graubard confidence interval for the estimate is ≥ 0.30 OR (b) the absolute width of the Korn-Graubard confidence interval is < 0.30 and > 0.05 and the relative width of the Korn-Graubard confidence interval is greater than 130% of the estimate.
4.4 Exposure to Vape and Cigarette Advertisements in Last 30 Days Exposure to advertising influences tobacco use behavior. The survey asked respondents several questions about advertising exposure. First, they were asked whether they had a favorite advertisement for vaping products. They were also asked how often they saw someone smoking cigarettes or vaping on a social media site in the last 30 days (never, rarely, sometimes, often, always). Respondents were also asked how much attention they paid to social media posts about vaping (none, a little, some, or a lot).
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Table 4-15 presents results for having a favorite vaping advertisement. Very few respondents (3.8%) reported having a favorite vaping advertisement. The prevalence of reporting having a favorite advertisement was highest among current vapers (13.8%).
Table 4-15. Prevalence of Having Favorite Vaping Advertisement Among High School Respondents, by Vaping Status
Use Status
Have a Favorite Advertisement
N % (95% CI)
Overall 29,497 3.8 (3.4–4.4)
Vaping status
Never 23,655 2.6 (2.3–3.1)
Former 3,892 7.1 (6.0–8.4)
Current 1,950 13.8 (10.9–17.1)
Note. CI = confidence interval.
Table 4-16 presents the reported prevalence of having seen someone on a social media site vaping in the last 30 days. Response options were rarely, sometimes, often, or always.
Approximately two-thirds of respondents reported some exposure (rarely, sometimes, often or always in the past 30 days) to vaping on social media (71.9%). Responses to this question varied by vaping status. Respondents who currently and formerly vaped more commonly reported being exposed to vaping advertisements always (14.2% and 9.7%, respectively) or often (31.3% and 26.5%, respectively) compared with those who had never vaped (5.8% always, 16.7% often).
Table 4-16. Last-30-Day Social Media Exposure to Vaping Among High School Respondents, by Vaping Status
Frequency of
Exposure
Overall
N = 29,288
% (95% CI)
Never Vaping
N = 23,508
% (95% CI)
Former Vaping
N = 3,863
% (95% CI)
Current Vaping
N = 1,917
% (95% CI)
Never 28.1 (26.8–29.5) 31.0 (29.5–32.5) 15.3 (12.7–18.2) 15.6 (13.1–18.4) Rarely 20.7 (19.9–21.6) 21.3 (20.3–22.3) 19.8 (17.8–21.9) 14.2 (11.9–16.8) Sometimes 25.7 (24.8–26.5) 25.3 (24.3–26.2) 28.8 (26.0–31.8) 24.8 (21.4–28.4) Often 18.7 (17.9–19.5) 16.7 (15.8–17.6) 26.5 (24.3–28.7) 31.3 (26.9–35.9) Always 6.7 (6.1–7.5) 5.8 (5.1–6.6) 9.7 (8.4–11.1) 14.2 (11.5–17.3) Note. CI = confidence interval.
Respondents also answered the same question about exposure to tobacco smoking on social media. Half (55.9%) of respondents reported being exposed to smoking on social media in the last 30 days (i.e., rarely, sometimes, often, or always; Table 4-17). Respondents who Packet Pg. 466
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currently smoked reported a higher prevalence of being exposed than those who had formerly or never smoked. For example, 17.6% of respondents who currently smoked reported always being exposed, compared with 7.5% of those who had formerly smoked and 3.1% of those who had never smoked.
Table 4-17. Last-30-day Social Media Exposure to Smoking Among High School Respondents, by Smoking Status
Frequency of
Exposure
Overall
N = 29,296
% (95% CI)
Never Smoking
N = 27,389
% (95% CI)
Former Smoking
N = 1,490
% (95% CI)
Current Smoking
N = 417
% (95% CI)
Never 44.1 (42.5–45.6) 45.0 (43.5–46.6) 27.6 (24.0–31.6) 27.9 (19.9–37.1) Rarely 26.3 (25.3–27.3) 26.3 (25.3–27.4) 29.2 (24.1–34.7) 16.0 (9.8–24.0) Sometimes 18.4 (17.5–19.3) 18.1 (17.2–18.9) 23.4 (19.3–27.9) 22.8 (15.1–32.1) Often 7.8 (7.1–8.5) 7.5 (6.8–8.3) 12.3 (9.4–15.6) 15.7 (10.5–22.2) Always 3.4 (3.0–3.9) 3.1 (2.7–3.5) 7.5 (4.5–11.5) 17.6 (11.3–25.5) Note. CI = confidence interval.
The survey also asked respondents how much attention they paid to social media posts on vaping (Table 4-18). More than half (59.1%) of respondents reported not paying any attention to social media posts about vaping. Attention to these posts varied by vaping status. A higher percentage of respondents who currently vaped reported that they paid a lot of attention to these posts (3.9%) than those who had formerly (2.6%) and never (1.8%) vaped.
Table 4-18. Attention Paid to Social Media Posts About Vaping Among High School Respondents, by Vaping Status
Amount Of
Attention
Overall
N = 29,400
% (95% CI)
Never Vaping
N = 23,583
% (95% CI)
Former Vaping
N = 3,881
% (95% CI)
Current Vaping
N = 1,936
% (95% CI)
None 59.1 (57.6–60.5) 61.2 (59.5–62.8) 51.9 (48.9–54.9) 44.9 (40.8–49.0) A little 27.8 (26.7–28.9) 26.5 (25.4–27.7) 32.6 (29.7–35.7) 35.5 (31.5–39.5) Some 11.1 (10.4–11.9) 10.5 (9.7–11.4) 12.9 (11.0–15.0) 15.7 (12.7–19.1) A lot 2.0 (1.7–2.4) 1.8 (1.4–2.3) 2.6 (1.6–3.8) 3.9 (2.6–5.7) Note. CI = confidence interval.
4.5 Summary
Most high school respondents reported living in a home that had a complete home ban on tobacco smoking and vaping. Still, 22.2% of respondents who had never vaped had been exposed to vapor in a car or room in the last 2 weeks, and 37.6% reported exposure to Packet Pg. 467
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vaping outside during the same time period. Only 12.4% of respondents who had never smoked tobacco reported exposure to secondhand tobacco smoke in a car or room, but 56.9% reported being exposed outside. About half (49.8%) of respondents who lived in MUH reported any exposure to tobacco smoke in the last 6 months. Of all races and ethnicities, White respondents and multiracial respondents reported the highest exposure to secondhand vapor and secondhand smoke both in a car or room and outside, with the exception of tobacco smoke exposure in a car or room, for which African American or Black respondents reported the highest exposure.
More than half of respondents reported being exposed to social media posts about vaping or smoking in the past 30 days. Less than half of respondents reported paying any attention to social media posts about vaping, and few respondents reported having a favorite vaping advertisement.
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5. Susceptibility to Future Tobacco Use and Perceptions of Vaping and Smoking
The 2023 CYTS measured susceptibility in two different ways. For the most popular products (vapes, cigarettes, and LCCs), we used a three-item susceptibility scale. These questions were only asked of respondents who reported that they had never used each product. The scale asked three questions: whether they would use a product if one of their best friends offered the product to them, whether they thought they would try the product soon, and whether they thought they would use the product in the next year. Only those who answered “definitely not” to all three items were considered not susceptible to future tobacco use. All others were considered susceptible. For the other tobacco products captured by the survey (HTPs, hookah, smokeless, and nicotine pouches), we only asked one question: whether respondents would use the product if one of their best friends offered the product to them. Because of low use of cigars among youth, we did not administer a susceptibility item for cigars. Because the three-item susceptibility scale is superior to the single-item scale, we only present susceptibility for vapes, cigarettes, and LCCs in this chapter.
Social norms affect tobacco use behavior. This chapter also presents data on reported reasons for vaping among current vapers. It also presents data on respondents’ beliefs about how adults, peers or classmates, and friends perceive vaping and smoking cigarettes.
Finally, respondents’ opinions of the tobacco industry are reported. These perceptions are compared across tobacco use status (i.e., never, former, or current use) or demographics, when appropriate.
5.1 Susceptibility to Vapes, Cigarettes, and LCCs by Demographics Table 5-1 presents susceptibility to future use of vapes, cigarettes, and/or LCCs among respondents who had never used one or more of these three products by respondent demographics. This table only includes those three products because the susceptibility items were different for other products. Overall, 44.3% of respondents who had never used one or more of these products were susceptible to one or more products. We found differences in susceptibility by demographics. Respondents who identified their gender in another way were the most susceptible (49.8%) out of all gender categories. Multiracial and White respondents were the most susceptible (46.4% and 46.0%, respectively) out of all race/ethnicity categories, and Asian respondents were the least susceptible (35.8%).
Twelfth-grade respondents were more susceptible (45.6%) than 10th-grade respondents (43.2%). LGBTQ+ respondents were more susceptible (52.6%) than non-LGBTQ+ respondents (42.2%) and respondents with unclear LGBTQ+ status (44.7%). Respondents who rated their mental health as fair (51.8%) or poor (55.3%) were more susceptible to future use than who rated their mental health status as good to excellent (39.5%).
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Table 5-1. Susceptibility to Vapes, Cigarettes, and/or LCCs Among High School Respondents Who Had Never Used One or More of These Products, by Gender Identity, Race/Ethnicity, Grade, LGBTQ+ Status, and General Mental Health
Characteristic
Susceptible to Vapes, Cigarettes, and/or LCCs
N % (95% CI)
Overall 30,493 44.3 (42.7–45.9)
Gender identity
Male 13,523 42.3 (40.5–44.1)
Female 13,415 45.4 (43.0–47.8)
Identified in another way 1,691 49.8 (45.7–53.9)
Declined to answer 191 43.2 (32.2–54.7)
Race/ethnicity*
White 7,204 46.0 (43.7–48.2)
African American or Black 681 40.1 (33.9–46.6)
Hispanic 16,490 45.7 (43.4–48.0)
Asian 3,152 35.8 (33.7–37.9)
Other 772 36.6 (32.0–41.3)
Multiracial 2,125 46.4 (43.3–49.4)
Grade
10 16,078 43.2 (41.6–44.8)
12 14,415 45.6 (43.3–48.0)
LGBTQ+ status
LGBTQ+ 5,017 52.6 (49.8–55.4)
Non-LGBTQ+ 21,085 42.2 (40.4–44.1)
Unclear LGBTQ+ status 2,395 44.7 (40.4–49.0)
Mental health status
Good to excellent 18,914 39.5 (37.8–41.3)
Fair 7,057 51.8 (49.6–53.9)
Poor 3,014 55.3 (52.0–58.6)
Note. LGBTQ+ = lesbian, gay, bisexual, transgender, queer or questioning; CI = confidence interval. * With the exception of Hispanic, all ethnicities are classified as non-Hispanic. The following groups are included in the other race category: American Indian or Alaska Native, Native Hawaiian or other Pacific Islander, and any race not captured by the survey.