APPENDIX A
CITY OF REDONDO BEACH FINANCIAL AND DEMOGRAPHIC INFORMATION The information in this appendix concerning the City’s finances and operations is provided as supplementary information only, and it should not be inferred from the inclusion of this information in this Official Statement that the principal of or interest on the Bonds is payable from the General Fund or any other funds of the City. The Bonds are payable from the proceeds of an unlimited ad valorem tax approved by the voters of the City pursuant to all applicable laws and State Constitutional requirements and required to be levied by the City Council on property within the City in an amount sufficient for the timely payment of principal of and interest on the Bonds. See “SECURITY FOR THE BONDS” and “PROPERTY TAXATION” in the front portion of this Official Statement.
Certain statements included or incorporated by reference in this APPENDIX A constitute “forward-looking statements.” Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The City does not plan to issue any updates or revisions to those forward-looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based occur.
General
The City was incorporated in 1892 and adopted a charter in 1949. The City is located on the coastal edge of Los Angeles County, approximately 20 miles from downtown Los Angeles and approximately seven miles south of Los Angeles International Airport and spans 6.3 square miles. The City’s population as of January 1, 2026 is 68,460. The City remains a mostly residential, non-industrial community. The City provides a full range of municipal services. These include public safety (police and fire protection); recreation and community services; library; parks; maintenance and improvement of streets and infrastructure; planning and zoning; housing; economic development; transit and general government. The City also operates and maintains a large recreational and commercial harbor, including King Harbor, a 1,428-slip recreational boating harbor; the Redondo Beach Pier and Seaside Lagoon; the Redondo Beach Performing Arts Center; and 1.5 miles of waterfront. Redondo Beach has significant concentrations of employment in the northern portion of the City anchored by Northrop Grumman. It also has a vibrant hospitality sector near the Harbor/Pier area, an eclectic mix of specialty shops, restaurants and services in the Riviera Village, at the south end of the City, and maintains retail centers at the South Bay Galleria, on the east end of the City. The Harbor/Pier and the Riviera Village made up of specialty shops and services is located at the south end of the City.
City Government
The City is divided into five districts and operates under a Council-Manager form of government. One councilperson is elected from each district and serves four year overlapping terms at elections held every two years. Each councilperson has a limit of two full terms. The Mayor is elected from the City at large, and is also limited to two full terms. Other elected officials are the City Treasurer, City Attorney and the City Clerk, serving terms of four years, but can be re-elected an unlimited number of times. The City Council is responsible for, among other things, passing ordinances, adopting the budget, and appointing the City Manager.
In addition to sitting as the governing board of the City, the Mayor and the City Council act as the Board of Directors for various component units of the City, including the Redondo Beach Housing Authority, the Redondo Beach Public Financing Authority, the Redondo Beach Community Financing Authority, the Parking Authority of the City of Redondo Beach, and the Redevelopment/Successor Agency of the City of Redondo Beach. The City Manager is responsible for carrying out the policies and ordinances of the City Council and for selecting the non-elected heads of the City’s various departments.
Elected City Officials include the following:
Eugene Solomon, City Treasurer. Eugene Solomon is the elected City Treasurer for the City of Redondo Beach. He was elected on March 7, 2023, and brings over 30 years of finance and risk management experience to the role and a deep commitment to ensuring the fiscal health and transparency of Redondo Beach.
As the owner of a South Bay-based insurance and financial services business, Mr. Solomon has a long history in revenue generation, working with multinational corporations, local families, investments, and budgets. A proud resident of over 30 years, Mr. Solomon participated in a number of volunteer positions within the city, serving on the General Plan Advisory Committee, Vice-Chair of the Charter Review Committee, and Chairman of the Budget & Finance Committee. While working in these roles, he collaborated with the City Council to modernize sections of the City Charter and refinance our Pension Debt obligations, streamlining operations and saving the city valuable revenue for other civic improvements.
Mr. Solomon worked as a Registered Representative from 1994-2009 after securing Series 6 & 63 designations with FINRA (Financial Industry Regulatory Authority). Mr. Solomon holds a Bachelor’s degree from Florida State University and holds multiple insurance credentials, including LUTCF & SBCS insurance designations and licenses for Property & Casualty, Life, Health, Disability, Long Term Care, and Annuities.
City Management staff include the following:
Mike Witzansky, City Manager. Mr. Witzansky has served as City Manager for the City since November 2021 and as Assistant City Manager for the City since January 2015. Prior to this, he served as the City’s Public Works Director since July 2010, and prior to that served as the City’s Recreation and Community Services Director beginning in January 2006. Before working for the City, Mr. Witzansky served as an Administrative Analyst and Senior Business Manager for the City of Torrance for approximately six years. Mr. Witzansky received a Bachelor of Arts degree in Politics from Pomona College. Mr. Witzansky is a member of the American Public Works Association and is currently the Chairman of the Board of Directors for the Torrance Community Credit Union.
Stephanie Meyer, Finance Director. Ms. Meyer has served as the Finance Director for the City of Redondo Beach since February 2025. She was promoted to the position from her role as Assistant Financial Services Director, the position she held on joining the City in July 2023. Previously, Ms. Meyer worked for the City of Santa Monica’s Finance Department, where she worked on strategic issues including review of City service delivery, pension management strategy, citywide strategic planning, and integrating performance management with the City’s budget. Prior to Santa Monica, Ms. Meyer worked for the US Department of State in the Bureau of Resource Management in budget and planning. Ms. Meyer holds a Bachelor of Arts Degree in Political Science from UCLA and a Master of Public Policy Degree from the Harvard Kennedy School of Government.
CITY FINANCIAL INFORMATION
Budgetary Process; General Fund Budget
The City generally adopts the budget in June of each year. The Fiscal Year 2026-27 budget was adopted on June 16, 2026. The annual budget adopted by the City Council provides for the general operation of the City. The City Council approves total budgeted appropriations and any amendments to appropriations throughout the fiscal year. Appropriations lapse at fiscal year-end, apart from encumbered funds which roll over to the next fiscal year. The City Council generally reauthorizes appropriations for continuing projects and activities. The City Council has the legal authority to amend the budget of any fund at any time during the fiscal year with a four-fifths vote. The budgetary level of control (the level on which expenditures may not legally exceed appropriations) is at the departmental level. The City Manager is authorized to transfer budgeted amounts within departments within any fund; however, any revisions that alter the total expenditures of any fund or transfer funds between departments must be approved by the City Council.
Capital Improvement Projects
The City adopts a five-year capital improvement program (CIP). On June 16, 2026, the City approved the Five-Year CIP for 2027-2031, which proposes $130.3 million in projects. The City’s established process for evaluating, reviewing and prioritizing future capital efforts focuses on enhancing the quality of existing public facilities, streets, sewers, and open spaces. The Fiscal Year 2027-31 capital budget coordinates and leverages grant and restricted funds, and includes projects that are a priority to the City Council and provide the greatest public benefit with funding available. It focuses on finishing existing projects while addressing health and safety issues, legislative mandates, and priorities arising out of Mayor and City Council policy direction. It includes 32 previously approved projects and ten new projects, including the Police and Fire Station construction planned to be funded through the Bonds, and $69.1 million in carryover funding for 79 previously approved projects.
The City completed 25 capital improvement projects in Fiscal Year 2025-26, with an additional 25 projects in design, 11 in procurement, and eight in construction, for a total estimated $16.5 million year-end expenditure. The adopted Fiscal Year 2026-27 CIP, which again focuses on rehabilitation of existing street, sewer, park, and public facility infrastructure, contains $69.1 million of carryover funding for 79 previously approved projects and $130.3 million in appropriations for 42 projects, for a total Fiscal Year 2026-27 CIP of approximately $199.5 million and approximately 121 projects. The CIP includes $92.9 million for Police and Fire facilities, which is being funded with proceeds of the Bonds. The project breakout is summarized in the following table, with most of the City’s capital funding designated to, and/or limited to, various street improvement projects, including resurfacing and reconstruction.
Table 1
City of Redondo Beach
Fiscal Year 2026-27 CIP
Project
Carryover Funding
New Appropriations
Total
Public Facilities
$11,945,438
$102,297,934
$114,243,372
Streets
32,283,638
16,510,029
48,793,667
Waterfront
12,043,247
3,200,000
15,243,247
Drainage
5,366,632
3,285,500
8,652,132
Sewer
3,831,050
3,585,000
7,416,050
Parks
2,597,586
1,155,000
3,752,586
General Improvements
1,081,947
270,000
1,351,947
Total
$69,149,538
$130,303,463
$199,453,001
General Fund Budget Summary
The following table shows the City’s budget and actual results for General Fund revenues and expenditures for fiscal year 2024-25, and the City’s budget for fiscal years 2025-26 and 2026-27.
Table 2
City of Redondo Beach
General Fund Budget Summary
Fiscal Years 2024-25 through 2026-27
Fiscal Year 2024-25
Adopted Budget
Fiscal Year 2024-25 Audited Actual
Fiscal Year 2025-26
Adopted Budget
Fiscal Year 2026-27
Adopted Budget
Revenues:
Taxes and assessments
$79,697,278
$83,657,491
$85,237,861
$86,452,619
Interdepartmental
1,832,937
2,420,849
14,737,617
16,153,526
Licenses and permits
2,568,953
3,509,054
2,952,848
2,690,115
Intergovernmental
160,000
565,494
219,367
248,000
Charges for services
10,607,111
10,245,522
11,763,937
15,419,927
Use of money and property
3,411,107
4,961,657
3,295,401
3,312,851
Fines, forfeitures
1,520,814
1,711,773
1,693,994
2,482,742
Miscellaneous
2,641,941
3,553,135
4,344,062
3,544,135
Total revenues
102,440,141
110,624,975
124,245,087
130,303,915
Expenditures:
Current:
General government
14,809,861
18,010,461
17,952,019
12,227,167
Public safety
57,433,354
59,575,539
70,940,498
76,328,353
Housing & community development
3,610,574
4,433,228
4,511,043
6,624,836
Cultural and leisure services
12,125,075
11,710,649
13,866,900
14,878,130
Public works
8,105,473
6,912,928
8,914,907
9,813,630
Capital Outlay
25,110
271,225
40,000
40,000
Debt Service
31,082
574,946
--
--
Total expenditures
96,140,529
101,488,976
116,225,367
119,912,116
Excess (Deficiency) of Revenues Over (Under) Expenditures 6,303,428
9,135,999
8,019,720
10,391,799
Other Financing Sources (Uses):
Transfers in
4,265,303
2,061,967
6,403,128
681,229
Transfers out
(15,880,783)
(21,657,252)
(18,933,573)
(12,805,337)
Subscription Financing
--
267,659
--
--
Total Other Financing Sources (Uses):
(11,615,480)
(19,327,626)
(12,530,445)
(12,124,108)
Net Change in Fund Balance
(5,315,868)
(10,191,627)
(4,510,725)
(1,732,309)
Fund Balances, Beginning of Year
36,266,892
36,266,892
26,075,265
21,564,540
Fund Balances (Deficits), End of Year
$30,951,024
$26,075,265
$21,564,540
$19,832,231
Source: City of Redondo Beach, Finance Department.
Financial Statements
Set forth in the following pages are the City’s General Fund balance sheets and statements of revenues, expenditures and changes in General Fund balance for the last five fiscal years, based on the City’s audited financial statements. The balance sheets and statements presented in this Official Statement are subject to the various notes attached to the City’s audited financial statements for the respective years. The City’s Annual Comprehensive Financial Report for fiscal year ended June 30, 2025, which includes the City’s 2024-25 audited financial statements, is set forth in APPENDIX F.
Table 3
City of Redondo Beach General Fund Balance Sheets
Fiscal Years 2020-21 through 2024-25
Fiscal Year 2020-21
Fiscal Year 2021-22
Fiscal Year 2022-23
Fiscal Year 2023-24
Fiscal Year 2024-25
Assets:
Pooled cash and investments
$7,845,179
$15,469,649
$24,931,434
$28,233,374
$16,333,896
Receivables:
Accounts
3,323,627
3,192,800
2,257,139
399,354
813,007
Taxes
5,844,897
6,555,813
5,378,629
5,205,519
5,413,998
Accrued Interest
192,076
210,047
415,855
369,305
331,899
Notes and Loans
18,667
18,605
21,839
15,616
12,600
Leases
--
4,137,426
3,933,367
4,785,455
4,595,338
Prepaid Costs
71,104
52,821
148,160
152,736
180,123
Due from Other Governments
1,744,076
5,136,813
1,622,672
1,649,840
2,042,833
Due from Other Funds
5,838,647
6,809,022
8,103,574
9,586,431
11,624,435
Restricted Assets: Deposits Receivable
152,963
701,717
1,246,492
1,574,054
2,016,930
Total Assets
$25,031,236
$42,284,713
$48,059,161
$51,971,684
$43,365,059
Liabilities:
Accounts Payable
896,748
2,121,704
2,077,857
1,686,301
1,345,273
Accrued Liabilities
3,106,340
3,196,699
3,439,472
4,964,108
6,423,624
Unearned Revenues
21,291
94,673
153,601
340,529
731,996
Deposits Payable
2,575,064
3,206,981
5,103,378
4,000,601
4,228,681
Pollution Remediation Liability
150,000
150,000
150,000
--
--
Due to Other Funds
--
--
--
--
79,474
Total Liabilities
6,749,443
8,770,057
10,924,308
10,991,539
12,809,048
Deferred Inflows of Resources: Deferred Leases Related Items 2,628
4,145,658
3,946,435
4,713,253
4,480,746
Fund Balances:
Nonspendable
89,771
71,426
169,999
168,352
192,723
Committed
7,241,252
8,599,208
8,599,208
8,599,208
8,599,208
Assigned
8,908,619
20,421,828
24,228,260
25,968,072
11,919,657
Unassigned
2,039,523
276,536
190,951
1,531,260
5,363,677
Total Fund Balances (Deficits)
18,279,165
29,368,998
33,188,418
36,266,892
26,075,265
Total Liabilities, Deferred Inflows & Fund Balances
$25,031,236
$42,284,713
$48,059,161
$51,971,684
$43,365,059
Source: City of Redondo Beach Annual Comprehensive Financial Reports for Fiscal Years 2020-21 through 2024-25.
Table 4
City of Redondo Beach
Statements of Revenues, Expenditures and Changes in General Fund Balance Fiscal Years 2020-21 through 2024-25
Fiscal Year 2020-21
Fiscal Year 2021-22
Fiscal Year 2022-23
Fiscal Year 2023-24
Fiscal Year
2024-25
Revenues:
Taxes
$67,619,669
$73,699,610
$76,446,608
$80,645,193
$83,657,491
Interdepartmental
9,379,851
10,034,053
8,745,517
12,108
2,420,849
Licenses and Permits
1,641,684
1,731,398
2,607,527
2,386,229
3,509,054
Intergovernmental
275,476
6,136,835
331,107
186,830
565,494
Charges for Services
6,622,881
9,009,337
9,924,671
10,078,596
10,245,522
Use of Money and Property
880,216
(194,345)
2,535,421
5,289,634
4,961,657
Fines and Forfeitures
1,317,110
1,180,975
1,341,895
1,230,559
1,711,773
Miscellaneous
2,941,472
2,871,155
3,917,756
3,189,908
3,553,135
Total revenues
90,678,359
104,469,018
105,850,502
103,019,057
110,624,975
Expenditures:
Current:
General Government
11,164,958
10,771,669
11,433,726
8,907,675
18,010,461
Public Safety
59,932,018
53,879,562
55,465,035
55,215,054
59,575,539
Housing and Community Development
3,722,514
3,232,474
3,425,042
3,272,031
4,433,228
Cultural and Leisure Services
9,046,250
9,294,093
11,054,870
11,080,717
11,710,649
Public Works
6,866,827
6,914,996
7,515,994
6,619,942
6,912,928
Capital Outlay
192,777
2,557,035
469,495
896,456
271,225
Debt Service
--
251,825
389,795
607,373
574,946
Total expenditures
90,925,344
86,901,654
89,753,957
86,599,248
101,488,976
Excess (Deficiency) of Revenues Over (Under) Expenditures (246,985)
17,567,364
16,096,545
16,419,809
9,135,999
Other Financing Sources (Uses):
Transfers In
4,604,726
196,128
1,650,733
1,653,179
2,061,967
Transfers Out
(3,624,716)
(8,919,217)
(14,343,215)
(13,973,838)
(21,657,252)
Leases Issued
--
2,245,558
--
--
--
Subscription Financing
--
--
415,357
619,252
267,659
Total Other Financing Sources (Uses)
980,010
(6,477,531)
(12,277,125)
(11,701,407)
(19,327,626)
Net Change in Fund Balance
733,025
11,089,833
3,819,420
4,718,402
(10,191,627)
Fund Balances, Beginning of Year (as restated)
$17,546,140
18,279,165
29,368,998
31,548,490
36,266,892
Fund Balances (Deficits), End of Year
$18,279,165
$29,368,998
$33,188,418
$36,266,892
$26,075,265
Source: City of Redondo Beach Annual Comprehensive Financial Reports for Fiscal Years 2020-21through 2024-25.
Primary General Fund Revenue Sources
The table below provides the amount of property tax, sales tax, transient occupancy tax, vehicle license fee, and utility users tax revenues, which are the largest General Fund revenues, and the percentage of General Fund revenues that each represents for Fiscal Year 2021-22 through 2024-25.
Table 5
City of Redondo Beach
Largest General Fund Tax Revenues
Fiscal Years 2021-22 through 2024-25
2021-22
2022-23
2023-24
2024-25
Revenue Source
Revenues
% of General Fund Revenues
Revenues
% of General Fund
Revenues
Revenues
% of General Fund
Revenues
Revenues
% of General Fund Revenues
Property Tax
$31,890,095
30.5%
$34,061,743
32.2%
$35,806,499
34.8%
$37,895,356
34.3%
Sales Tax
11,813,896
11.3 11,036,523
10.4 10,822,480
10.5 11,043,781
10.0 Transient Occupancy Tax
5,419,197
5.2 6,174,326
5.8 9,114,545
8.8 9,122,741
8.2 Vehicle License Fee
8,730,260
8.4 9,286,586
8.8 9,802,781
9.5 10,353,124
9.4 Utility Users Tax
8,024,511
7.7 9,166,031
8.7 8,481,267
8.2 8,840,537
8.0 Source: City of Redondo Beach.
Property Taxes
The City’s property tax is imposed on real property (land and permanently attached improvements, such as buildings) and tangible personal property (moveable property) located within the City. The property tax rate is 1.0% of the assessed value. The assessed value may be adjusted annually to reflect inflation at a rate not to exceed 2% per year, or reduced in the event of declining property value. The City receives revenues equal to 16.5% of the tax rate from the County of Los Angeles - Auditor/Controller’s Office, or the equivalent of 16.5 cents out of each dollar of property tax collected through property tax bills. See “CONSTITUTIONAL AND STATUTORY LIMITS ON TAXES, REVENUES AND APPROPRIATIONS - Article XIIIA”.
Taxable valuation within the City is established by the Los Angeles County Assessor, except for utility property, which is assessed by the State Board of Equalization. Article XIIIA of the State Constitution provides that, beginning with the 1978-79 Fiscal Year, property taxes in California are limited to one percent of full cash value, except for taxes to pay debt service on indebtedness approved by the voters prior to July 1, 1978. Article XIIIA defines full cash value as the County Assessor’s valuation of real property as shown on the 1975-76 tax bill (“base year”), except in the case of newly-constructed property or property which undergoes a change in ownership. Yearly taxable value increases following the base year are limited to the growth in the consumer price index, but may not exceed two percent annually. For assessment and collection purposes, property is classified either as “secured” or “unsecured,” and is listed accordingly on separate parts of the assessment roll. The “secured roll” is that part of the assessment roll containing State assessed property and property the taxes on which are a lien on real property sufficient, in the opinion of the County Assessor, to secure payment of the taxes. Other property is assessed on the “unsecured roll.” Proposition 13 Limitations. Article XIIIA of the State of California Constitution imposes limits on annual adjustments to real property assessed values and to the amount of ad valorem tax that may be levied on real property. See “CONSTITUTIONAL AND STATUTORY LIMITS ON TAXES, REVENUES AND APPROPRIATIONS – Article XIIIA of the State Constitution.” ERAF. In response to California’s past severe financial and budgetary distress, the State Legislature adopted legislation impacting the City’s allocation of revenues from property taxes, including, in particular, provisions relating to the Education Revenue Augmentation Fund (“ERAF”). Beginning in Fiscal Year 1992-93 and in various fiscal years thereafter, the State required local governments to remit a portion of their property tax revenues to ERAF. The Fiscal Year 2005-06 state budget required a $13 billion shift from local governments to ERAF. While the State budgets for each of Fiscal Years 2006-07 through 2020-21, as well as the proposed Fiscal Year 2021-22 budget, did not contain provisions for additional ERAF property tax shifts from cities (although the 2008-09, 2009-10, and 2010-11 State Budgets contained provisions for additional ERAF property tax shifts from redevelopment agencies), there can be no assurance that future State Budgets will not require additional ERAF property tax shifts from the City.
Redevelopment Dissolution. The State’s Community Redevelopment Law (codified in Part 1 of Division 24 of the California Health and Safety Code) authorized the redevelopment agency of any city or county to receive an allocation of tax revenues resulting from increases in assessed values of properties within designated redevelopment project areas (the “incremental value”) occurring after the year the project area is formed. In effect, local taxing agencies, such as the City, realize tax revenues only in the assessed value of such property at the time the redevelopment project is created for the duration of such redevelopment project. Although Assembly Bill No. 26 (“AB X1 26”), enacted on June 29, 2011 as Chapter 5 of Statutes of 2011, statutorily dissolved redevelopment agencies as of February 1, 2012, the enforceable obligations of dissolved redevelopment agencies, continue to be paid from property taxes derived from such incremental value until the enforceable obligations are paid in full in accordance with Parts 1.8 (commencing with Section 34161) and 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code of the State, as amended on June 27, 2012 by Assembly Bill No. 1484 (“AB 1484”), enacted as Chapter 26, Statutes of 2012, and as such statutory provisions may further be amended from time to time (as amended, the “Dissolution Act”). Under the Dissolution Act, taxing entities, such as the City, are to receive distributions (in proportion to such taxing entity’s share of property tax revenues in the tax rate area for the applicable fiscal year) of residual amounts of property taxes attributable to incremental value on each June 1 and January 2, commencing June 1, 2012, after payment of (i) tax sharing obligations established previously pursuant to the Community Redevelopment Law, (ii) enforceable obligations of the successor agency to the former redevelopment agency, and (iii) an administrative cost allowance to such successor agency. As enforceable obligations of the former redevelopment agency and its successor agency are paid and retired, residual amounts of property tax revenues attributable to redevelopment project area incremental value are expected to increase over time.
Sales Taxes
The City’s sales tax rate in the City is 9.50%. Redondo Beach receives 1% of taxable sales from the State Department of Tax and Fee Administration. The City’s sales tax revenue has remained fairly flat over the past five years, with declines in Fiscal Years 2022-23 and 2023-24, largely reflecting a leveling out following a strong post-COVID recovery, followed by an increase in Fiscal Year 2024-25. The sales tax revenue trend is similar to the state and region, related to online sales and slower consumer spending following the COVID recovery. Ongoing uncertainty at the South Bay Galleria site, one of the City’s major retail centers, continues to be a negative factor impacting sales tax revenue growth.
The City received $11.04 million in sales tax revenue in Fiscal Year 2024-25, a $0.2 million or 2% increase over the previous Fiscal Year. As stated above, the City has experienced lower than expected revenue growth in the past several fiscal years, due to the impact of inflation and economic uncertainty on purchasing habits, including gas price increases and high borrowing rates. The categories most impacted in Redondo Beach have been restaurants and hotels, general consumer goods, autos and transportation, and fuel and service stations.
The number of establishments selling merchandise subject to sales tax and the valuation of taxable transactions is presented in the following table.
Table 6
City of Redondo Beach
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Taxable Transactions in Thousands of Dollars)
Retail and Food Services
Total All Outlets
Calendar Year
Number of Permits
Taxable Transactions
Number of Permits
Taxable Transactions
2021
1,678
$761,254
2,808
$896,504
2022
1,706
801,887
2,855
937,399
2023
1,615
765,645
2,746
891,867
2024
1,601
745,209
2,737
894,681
2025
1,613
720,459
2,779
896,133
Source: California State Board of Equalization, Taxable Sales in California (Sales & Use Tax).
The following table provides a summary of taxable transactions by category in the City for calendar years 2021 through 2025.
Table 7
City of Redondo Beach
Taxable Transactions
(In Thousands)
2021
2022
2023
2024
2025
Motor Vehicle and Parts
$57,923
$63,375
$59,540
$57,706
$54,576
Home Furnishings & Appliances
49,659
38,199
37,429
33,297
29,811
Building Material and Garden
8,168
8,923
9,789
8,676
9,026
Food & Beverage Stores
116,702
114,112
112,659
110,519
119,270
Gasoline Outlets
56,707
68,363
60,918
55,768
47,204
Clothing
67,542
63,831
60,053
56,572
52,248
General Merchandise stores
81,707
85,411
83,008
80,634
72,804
Food Services & Drink
242,707
276,159
268,131
270,548
266,351
Other retail stores
80,138
83,514
74,118
71,489
69,069
Total Retail and Food Services
761,254
801,887
765,645
745,209
720,459
All Other Outlets
135,250
135,512
126,223
149,472
175,673
Total All Outlets
$896,504
$937,399
$891,867
$894,681
$896,133
Source: City of Redondo Beach, based on data from California Department of Tax and Fee Administration, Statistical Research and Consulting Division.
Largest Sales Taxpayers. The 25 largest payers of sales taxes in the City for Fiscal Year 2024-25 comprised 45.98% of sales tax revenue in the City. The following is a table of the 25 largest sales taxpayers in the City in alphabetical order for Fiscal Year 2024-25:
Table 8
City of Redondo Beach
25 Largest Sales Taxpayers
Fiscal Year 2024-25
Bluewater Redondo
Portofino Hotel & Yacht Club
Cheesecake Factory
Quality Sea Food
Del Amo Motorsports
Ralphs
Dell Marketing
Redondo Mitsubishi
Ferguson Enterprises
Rocket
Hewlett Packard Enterprise Company
Smart & Final
In N Out Burger
South Bay Shell
Kohls
Target
Living Spaces Furniture
TJ Maxx
Macy's
Total Wine & More
Nordstrom Rack
Ulta Beauty
Petco
Vons
Platinum Auto Haus
Source: City of Redondo Beach
Transient Occupancy Tax
The City’s transient occupancy tax (TOT) is imposed on occupants of hotel, motel, inn, tourist home or other lodging facilities, unless such occupancy is for 30 days or longer. The tax is applied to the customer’s lodging bill at a rate of 12%, which was increased 2% in July 2005, and substantially enhanced revenues. Through Fiscal Year 2016-17, generally 10% of the TOT received by the City was contributed to the Redondo Beach Chamber of Commerce and Visitors Bureau to support marketing and tourism in the City. This amount is not netted against revenues, but rather reflected in the City’s expenditures.
In 2012, the City entered into an agreement with a developer to develop hotels located on Marine Avenue adjacent to the 405 freeway: originally the Marriott Residence Inn and the Hilton Garden Inn, with a third hotel (Homewood Suites) added with a 2016 agreement amendment - collectively the Marine Avenue Hotels. To provide adequate security for the construction loans for the Marine Avenue Hotels project, the City agreed to apply a portion of the TOT revenues and real property taxes to be received by the City generated from the Marine Avenue Hotels to create a reserve account. The developer could then access funds in the reserve account by an established formula in the case that it was unable to meet debt service payments on the three hotels. In addition to the City reserve account (Authority-Funded Reserve, or AFR), the Agreement required the developer to create a reserve account (Owner-Funded Reserve, or OFR), which the developer was to use prior to accessing the City’s reserve account. Initial levels were $3.0 million for the operators’ reserve, and $8.5 million for the City’s reserve. Annual replenishment of the AFR is limited to $2.5 million per year. With the addition of the third hotel, these levels decreased to $1.0 million and $3.0 million for the OFR and AFR respectively.
The reserve account became fully funded at $3 million in Fiscal Year 2016-17. At that time, the City recorded a $3.0 million reserve account on its books as a one-time revenue with the fund balance impact classified as restricted. During the COVID-19 pandemic, the hotel operators depleted both reserve funds, and have not recovered performance sufficiently to provide TOT to the City on a consistent basis since 2020. From a pre-pandemic peak of approximately $9 million, TOT has dropped to between $6 and $7 million on a net basis since FY 2022-23, recording $6.9 million in net revenue in FY 2024-25. Note that starting in Fiscal Year 2023-24, the City records gross TOT revenue, with the contribution to the lender-held AFR shown as an offsetting expense.
The Fiscal Year 2026-27 Adopted Budget TOT estimate represents a slight increase in the TOT the City estimates to retain (although the gross amount represents a decrease) compared to the prior year related to projected tourism improvement from a low Fiscal Year 2025-26, partial-year, partial TOT revenue from the Marine Avenue Hotels, and partial-year revenue from The Eddy, a new hotel that is planned to open during the fiscal year. The Marine Avenue Hotels returning to self-sustaining performance would result in significant additional TOT revenue for the City.
The City plans to place a TOT revenue measure on the March 2027 ballot, proposing a TOT increase from 12% to up to 15%, following Council direction at its February 3, 2026 meeting.
See footnote 10 in Table 3 under “CITY FINANCIAL INFORMATION - Financial Statements.” Vehicle License Fee
Vehicle license fees (VLF) (including property tax in lieu of VLF and motor vehicle in-lieu tax) is imposed by the State on owners of registered vehicles for the privilege of operating a vehicle on public highways. A portion of the tax is disbursed to cities based on the proportion that the population of each city bears to the total population of all cities in the State (a per capita formula). The license fee paid to the State by vehicle owners is 0.65% of the market value of the motor vehicle; however, cities are due 2% of the market value of the motor vehicle. Since there is a discrepancy of 1.35% in what the State collects and what cities are due, the State backfills the additional 1.35% from its General Fund in the form of property tax revenue. Since Fiscal Year 2011-2012, the City has seen increased VLF revenue due to the growth in property tax in lieu of VLF with relatively flat motor vehicle in-lieu tax.
Utility Users Tax
Utility users’ tax (UUT) is imposed on consumers of electric, gas, cable services, water and telephone services. Federal and state governmental agencies and pay telephone users are exempt. Each city sets its UUT rate, and the City’s rate is 4.75%. The City placed a measure on the March 2009 ballot to extend its existing UUT to include additional forms of telecommunications without increasing the tax rate. This measure was approved by 75% of the voters, helping to support the long-term viability of telecommunications-based UUT revenue. In response to AB 1717 and as approved by the State Board of Equalization, the City began collecting UUT from the sale of prepaid wireless devices in Fiscal Year 2015-16. There is no sunset on the UUT.
In April 2026, the California Second Appellate District ruled in favor of the City of Santa Barbara in an action to tax streaming services in the same way that UUT applies to cable services. With this ruling, the City intends to consider a tax modernization update on the March 2027 ballot that would enable the City to also apply UUT to streaming services, with the potential to increase UUT revenue.
Reserve Policies
On November 17, 1998, the City Council adopted the Statements of Financial Principles intended to guide the financial management of the City, which requires a minimum reserve for contingencies to be 8.33% (or one month) of the General Fund’s current fiscal year’s operating expense budget. On October 9, 2007, the City amended such policy to require that the reserves or fund balances designated for other post-employment benefits (OPEB) be maintained at appropriate levels as authorized by the City Council. The City is currently in compliance with such policies.
In September 2017, the City Council created a separate CalPERS Reserve Fund, in which to deposit funds, when available, to be reserved for potential significant increases to the City’s mandated CalPERS contributions.
Investment Portfolio
The City invests all idle cash in various investment instruments, as authorized within the City’s Statement of Investment Policy. The City Treasurer employs a buy and hold philosophy of cash management, ensuring the full return of all investment principal. Since 2013, the City has employed the services of an investment adviser in a non-discretionary capacity. The City’s pooled investment portfolio comprises a diversified mix of local government investment pools (LGIPs), U.S. Treasury securities, Federal Agency securities, and high-quality Corporate Medium Term Notes. The maturity structure of the portfolio emphasizes necessary liquidity to meet the City’s cash flow needs while laddering investments along a zero- to five-year laddered maturity schedule. The City strives to maintain at least 25% of the portfolio in liquid investments that can be converted to cash on short-term notice such as funds in the state-managed Local Agency Investment Fund (LAIF) or other LGIPs, but liquidity levels fluctuate due to City’s operational and capital improvement program cash flow requirements.
The City maintains a Statement of Investment Policy which has been certified for reporting excellence by the Government Investment Officers Association (GIOA) and the City has established both a written investment policy and investment procedures manual. The Investment Policy is reviewed and approved by both the City Council and the Budget and Finance Commission. The City’s investment portfolio consistently meets the primary objectives set forth in the City’s Investment Policy of safety first, liquidity, and then return, in that order of importance as prescribed by the California Government Code. As of June 30, 2026, the City’s general portfolio was invested as follows:
Amortized Cost Comparison of Investment Portfolio Positions Fiscal Year 2025-26
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Cash in Banks
$11,795,033
$10,424,788
$9,289,338
$8,463,482
Investment Type
$
%
$
%
$
%
$
%
Money Market
$9,330,381
12.8%
$7,801,389
9.8%
$1,230,883
1.6%
$441,115
0.5%
CAMP
$12,401,737
17.0%
$12,530,377
15.7%
$59,885
0.1%
$60,450
0.1%
Local Agency Investment Fund
$108,917
0.2%
$15,110,107
18.9%
$30,116,452
38.7%
$41,398,964
46.3%
Treasuries
$15,928,128
21.8%
$8,948,228
11.2%
$12,564,491
16.1%
$15,580,697
17.4%
Federal Agency Issues
$24,834,595
33.9%
$24,874,731
31.2%
$24,913,994
32.0%
$24,953,694
27.9%
Corporate Medium Term Notes
$10,565,811
14.4%
$10,583,199
13.3%
$9,012,154
11.6%
$7,016,220
7.8%
Total Investment Portfolio
$73,169,570
100.0%
$79,848,030
100.0%
$77,897,859
100.0%
$89,451,139
100.0%
Weighted Average Maturity (Yrs)
0.75 0.54.0
0.52 0.45
Effective Rate of Return YTD
3.23%
3.28%
2.90%
3.05%
LAIF Apportionment Rate
4.34%
4.20%
3.98%
3.92%
As required by GASB 31, the City recorded the unrealized gain/loss on certain investments to account for the market value at fiscal year-end. As of June 30, 2026 the portfolio market value, $89,295,277, was $155,862 below the portfolio's amortized cost of $89,451,139. The unrealized loss results from structural factors and interest rate movements within the financial marketplace over the past year impacting the market value of the City’s investments.
Long-Term Liabilities
The Redondo Beach Community Financing Authority (CFA) issued refunding revenue bonds in February 2019 (2019A Bonds) totaling $28,015,000, which as of June 30, 2026, were outstanding in the principal amount of $24,085,000. The proceeds of the bonds were used to refund the various leaseback contingencies and finance the purchase of a sublease between the City and Redondo Fisherman’s Cove Company.
The 2019A Bonds bear interest at rates between 4.00% and 5.00% and interest is payable on each May 1 and November 1, commencing November 1, 2019. The 2019A Bonds are payable from base rental payments. Principal is due annually beginning on May 1, 2020, in amounts ranging from $350,000 to $1,585,000. The bonds mature on May 1, 2049. The 2019A Bonds are subject to optional and mandatory early redemption provisions.
In July 2021, CFA issued $226,180,000 lease revenue bonds (2021A Bonds) to fund a portion of the city’s obligation to the California Public Employees’ Retirement system. As of June 30, 2026, the 2021A Bonds were outstanding in the principal amount of $195,780,000.
The 2021A Bonds interest rates are between 0.415% to 3.068% and interest is payable on each May 1, and November 1, commencing November 1, 2023. The 2021A Bonds are payable from base rental payments. The bonds include serial bonds with principal due annually beginning May 1, 2023 until 2026, in amounts ranging from $7,530,000 to $9,485,000. The 2021A Bonds also include term bonds in the amount of $51,785,000 and $58,530,000 due May 1, 2041 and 2049.
On July 1, 2021 the City entered into a 102 month lease as the lessee for the use of 1922 Artesia Blvd. An initial lease liability was recorded in the amount of $2,245,558. As of June 30, 2025 the value of the lease liability $1,242,080. The City is required to make monthly payments of $20,798. The city is using an implicit interest rate of 0.4570%. The City has one extension option of 60 months should it choose to exercise it.
On February 1, 2024 the City entered into a 54 month lease as the lessee for the use of equipment. An initial lease liability was recorded in the amount of $550,897. As of June 30, 2025 the value of the lease liability is $275,604. The City is required to make annual payments of $140,750. The City is using an implicit interest rate of 1.5132% for this lease. The workstation equipment has a useful life of 54 months as of the contract commencement. The City has the option to purchase the equipment for $385 should it choose to exercise it.
Employee Relations
City employees are represented by seven employee associations. Pursuant to the City’s Municipal Code and the Meyers-Millis-Brown-Act, the City and the employee associations negotiate wages, hours and conditions of employment. The seven employee associations and their contract expiration dates are as follows:
Employee Association
Contract Expiration
Redondo Beach Police Officers (Officers and Sergeants)
31-Dec-26
Redondo Beach Police Officers (Police Management Unit)
31-Dec-26
Redondo Beach Firefighters
30-Jun-28
Redondo Beach Firefighters (Fire Management Unit)
30-Jun-28
Redondo Beach Professional and Supervisory
31-Dec-26
Redondo Beach City Employees
31-Dec-26
California Teamsters Public, Professional & Medical Employees, Union Local 911 31-Dec-26
Source: City of Redondo Beach.
Pension Plans
Plan Description. The pension plans are agent, multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for participating public employers within the State of California. A full description of the pension plans regarding number of employees covered, benefit provisions, assumptions (for funding, but not account purposes), and membership information are listed in the Annual Actuarial Valuation Reports (funding valuation). Details of the benefits provided can be obtained in Appendix B of the actuarial valuation report. The actuarial valuation report and CalPERS’ audited financial statements are publicly available reports that can be obtained at CalPERS’ website, at www.calpers.ca.gov. Such website and information is not incorporated by reference in this Official Statement. None of the Authority, City or Underwriters can guarantee the accuracy of such information. Actuarial assessments are forward-looking statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or may be changed in the future. Actuarial assessments will change with the future experience of the pension plans.
The City provides three Tier 1 defined benefit pension plans – two for safety employees (3% at 55 for Fire and 3% at 50 for Police) and one for miscellaneous employees (2% at 55). Beginning July 2012, two additional Tier 2 defined benefit pension plans were provided – one for safety employees (3% at 55 for both Fire and Police) and one for miscellaneous employees (2% at 60). Beginning January 2013, pursuant to the California Public Employee’s Pension Reform Act of 2013 (PEPRA), Tier 3 defined benefit pension plans were added, 2.7% at 57 for safety employees and 2% at 62 for miscellaneous employees. The City makes contributions to the plans based on amounts determined by CalPERS actuaries. Employees of some bargaining groups paid a portion of the employee and/or employer contribution to CalPERS.
Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
Miscellaneous
Tier 1
Tier 2
Tier 3
Hire Date
Prior to
May 1, 2012
On or after May 1, 2012 and before
January 1, 2013
On or after
January 1, 2013
Benefit formula
2% @55
2% @ 60
2% @ 62
Benefit vesting schedule
5 years service
5 years service
5 years service
Benefit payments
monthly for life
monthly for life
monthly for life
Retirement age
50-63
50-63
52-67
Monthly benefits, as a % of eligible compensation
1.426%-2.418%
1.092%-2.418%
1.0%-2.5%
Required employee contribution rates
7.00%
7.00%
7.75%
Required employer contribution rates
10.31%
10.31%
10.31%
Safety
Tier 1
Tier 2
Tier 3
Hire Date
Prior to
May 1, 2012
On or after May 1, 2012 and before
January 1, 2013
On or after
January 1, 2013
Police - 3% @ 50
Police & Fire
Police & Fire
Benefit formula
Fire - 3% @ 55
3% @ 55
2.7% @ 57
Benefit vesting schedule
5 years service
5 years service
5 years service
Benefit payments
monthly for life
monthly for life
monthly for life
Retirement age
50-55
50-55
50-57
Monthly benefits, as a % of eligible compensation
2.4-3%
2.4-3%
2%-2.7%
Required employee contribution rates
9.00%
9.00%
13.00%
Required employer contribution rates
23.28%
23.28%
23.28%
As of the valuation date of July 2025, the following employees were covered by the benefit terms of the Plan:
Miscellaneous
Safety
Inactive employees or beneficiaries currently receiving benefits 318
262
Inactive employees entitled to but not yet receiving benefits 211
158
Active employees
302
154
Total
831
574
Contributions. Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS’ annual actuarial valuation process. The actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
For the Fiscal Year ended June 30, 2026, the City made $8.3 million in employer contributions to pension plans ($2.72 million for the miscellaneous plan, and $5.56 million for the safety plan).
Net Pension Liability. The net pension liability is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2025, using an annual actuarial valuation as of June 30, 2024 rolled forward to June 30, 2025 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.
Actuarial Methods and Assumptions Used to Determine Total Pension Liability.
The June 30, 2024 valuation was rolled forward to determine the June 30, 2025 total pension liability based on the following actuarial methods and assumptions:
Miscellaneous
Safety
Valuation Date
7/1/2024
7/1/2024
Measurement Date
6/30/2025
6/30/2025
Actuarial Cost Method
Entry Age Normal
Entry Age Normal
Asset Valuation Method
Market Value of Assets
Market Value of Assets
Actuarial Assumptions:
Discount Rate
6.90%
6.90%
Price Inflation
2.3% compounded annually
2.3% compounded annually
Salary Increases
Varies
Varies
Mortality Rate Table
Derived using CALPERS’ membership data for all Funds
Post Retirement Benefit Increase
Annual standard cost of living adjustment (COLA) is 2%. Additional detail below.
For more details and additional rationale for the selection of the actuarial assumptions, please refer to the 2021 CalPERS Experience Study and Review of Actuarial Assumptions that can be found on the CalPERS website under: Forms and Publications. Click on “View All” and search for Experience Study.
Discount Rate. The discount rate used to measure the total pension liability as of June 30, 2025, was 6.90%. This is based on the long-term expected rate of return on plan assets and is net of investment expenses but not reduced for administrative expenses. In determining the long-term expected rate of return, CalPERS took into account 20-year market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated and combined with risk estimates to project compound (geometric) returns over the long term.
The table below reflects the expected real rate of return by asset class.
Asset Class
Assumed Asset Allocation
Long-Term Expected Real Rate of Return,
Global Equity
37.0%
4.56%
Global Debt Securities
17.0%
5.56%
Inflation Assets
28.0%
2.53%
Private Equity
15.0%
3.03%
Real Assets
8.0%
4.93%
Liquidity
-5.0%
1.40%
Changes in the Net Pension Liability. The following table shows the changes in net pension liability recognized over the measurement period for the City Miscellaneous Plan.
Increase (Decrease)
Miscellaneous Plan
Plan Total Pension
Liability
(a)
Plan Fiduciary Net
Position
(b)
Plan Net Pension
Liability
(c) = (a) - (b)
Balance at: 6/30/2024 (MD)1
$251,408,672
$247,077,359
$4,331,313
Changes Recognized for the Measurement Period:
Service Cost
3,836,418
3,836,418
Interest on the Total Pension Liability
17,122,190
17,122,190
Changes of Assumptions
-
Differences between Expected and Actual Experience
2,226,861
2,226,861
Net Plan to Plan Resource Movement
Contributions from the Employer
3,262,539
(3,262,539)
Contributions from the Employees
1,772,025
(1,772,025)
Net Investment Income
29,421,410
(29,421,410)
Benefit Payments, including Refunds of Employee Contributions (14,812,084)
(14,812,084)
-
Administrative Expense
(176,560)
176,560
Other Miscellaneous Income (Expense)
-
Net Changes during 2024-2025
8,373,385
19,467,330
(11,093,945)
Balance at: 6/30/2025 (MD)1
$259,782,057
$266,544,689
$(6,762,632)
(MD) = Measurement Date
The following table shows the changes in net pension liability recognized over the measurement period for the City Safety Plan.
Increase (Decrease)
Safety Plan
Plan Total Pension
Liability
(a)
Plan Fiduciary Net
Position
(b)
Plan Net Pension
Liability
(c) = (a) - (b)
Balance at: 6/30/2024 (MD)
$452,925,159
$420,950,814
$31,974,345
Changes Recognized for the Measurement Period:
-
Service Cost
7,044,057
7,044,057
Interest on the Total Pension Liability
30,809,122
30,809,122
Differences between Expected and Actual Experience
4,122,985
4,122,985
Changes of Assumptions
-
Plan to Plan Resource Movement
-
Contributions from the Employer
7,756,006
(7,756,006)
Contributions from the Employees
2,575,384
(2,575,384)
Net Investment Income
50,152,579
(50,152,579)
Benefit Payments, including Refunds of Employee Contributions (28,122,323)
(28,122,323)
-
Administrative Expense
(300,809)
300,809
Other Miscellaneous Income (Expense)
-
Net Changes during 2024-25
13,853,841
32,060,837
(18,206,996)
Balance at: 6/30/2025 (MD)(1)
$466,779,000
$453,011,651
$13,767,349
(MD) = Measurement Date
Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net pension liability for the Plan as of the measurement date, calculated using the discount rate of 6.9 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.9 percent) or 1 percentage-point higher (7.9 percent) than the current rate:
Net Pension Liability
Discount Rate - 1%
Current Discount Rate
Discount Rate + 1%
Discount Rate
5.90%
6.90%
7.90%
Miscellaneous Plan
25,336,831
(6,762,632)
(33,348,878)
Safety Plan
70,937,124
13,767,349
(33,582,898)
Pension Plan Fiduciary Net Position. The plan fiduciary net position disclosed in the GASB 68 accounting valuation report may differ from the plan assets reported in the funding actuarial valuation report due to several reasons. First, for the accounting valuations, CalPERS must keep items such as deficiency reserves, fiduciary self-insurance and OPEB expense included as assets. These amounts are excluded for rate setting purposes in the funding actuarial valuation. In addition, differences may result from early Annual Comprehensive Financial Report closing and final reconciled reserves. Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. See CalPERS website for additional information.
For the measurement period ending June 30, 2024 (the measurement date) and Fiscal Year ending June 30, 2025, the City incurred pension expense of $4,557,846 and $16,947,891 for the miscellaneous and safety plans, respectively.
As of June 30, 2025 (the measurement date), the following were the reported deferred outflows of resources and deferred inflows of resources related to all pension plans:
Miscellaneous
Safety
Deferred Outflows of Resources
Deferred Inflows of Resources
Deferred Outflows of Resources
Deferred Inflows of Resources
Difference between Expected and Actual Experience
$1,299,002
--
$6,531,755
--
Net Difference between Projected and Actual Earnings on Pension Plan Investments --
$(6,367,568)
--
$(10,843,745)
Total
$1,299,002
$(6,367,568)
$6,531,755
$(10,843,745)
Amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:
Miscellaneous
Safety
Measurement Period ended June 30:
Deferred Outflows/(Inflows)
of Resources
Deferred Outflows/(Inflows)
of Resources
2026
$4,281,735
$9,764,570
2027
(3,033,731)
(3,875,189)
2028
(3,771,229)
(5,854,234)
2029
(2,545,341)
(4,347,137)
AB 340, Public Employee Pension Reform Act of 2013 (PEPRA). On September 12, 2012, the California Governor signed AB 340, which implements pension reform in California. Effective January 1, 2013, AB 340: (i) requires public retirement systems and their participating employers to share equally with employees the normal cost rate for such retirement systems; (ii) prohibits employers from paying employer-paid member contributions to such retirement systems for employees hired after January 1, 2013; (iii) establishes a compulsory maximum non-safety benefit formula of 2.5% at age 67; (iv) defines final compensation as the highest average annual pensionable compensation earned during a 36-month period; and (v) caps pensionable income at $110,100 ($132,120 for employees not enrolled in Social Security) subject to Consumer Price Index increases. Other provisions reduce the risk of the City incurring additional unfunded liabilities, including prohibiting retroactive benefits increases, generally prohibiting contribution holidays, and prohibiting purchases of additional non-qualified service credit.
CalPERS Actions. The CalPERS board adopted its current discount rate of 6.80% on November 17, 2021. The rate is 6.80% compounded annually (net of investment and administrative expenses) as of June 30, 2024. The discount rate is based on the long-term expected rate of return on assets using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. The current assumption, originally based on capital market assumptions developed by the Investment Office in 2021, was reviewed for the June 2025 valuation based on capital market assumptions developed by the Investment Office in 2023.
In 2025, CalPERS completed its Asset Liability Management (ALM) process, an integrated review of CalPERS assets and liabilities to inform decisions designed to achieve a sound and sustainable fund. This formal process runs on a four-year cycle and includes a review of CalPERS’ investment portfolios and retirement plan liabilities. Liability projections are based on demographic and economic factors and trends, including membership dynamics, future salary and payroll growth, retirement ages, inflation, and life expectancy. The CalPERS board adopted changes to both investment decision-making and assumptions as a result of this review. On the investment side, CalPERS' investment decision-making will follow a total portfolio approach (TPA), replacing the prior strategic asset allocation (SAA) model. Under SAA, the CalPERS Board periodically allocated a set amount to each asset class. Under TPA, the focus will be on which investments can best contribute to the performance of the entire CalPERS portfolio, as opposed to achieving individual asset allocation targets. Changes are effective July 1, 2026, with resulting impact to cities’ valuations appearing in the Fiscal Year 2027-28 contributions. CalPERS anticipates assumption changes to result in limited impact to each city’s overall liability, with the actual impact to depend on the city’s individual characteristics. The June 2026 valuation incorporates the impact of these ALM changes.
City Pension Contributions. The total normal cost contribution paid by the City toward pension benefits was $12.6 million in Fiscal Year 2025-26, which includes the employer ($8.3 million) and employer-paid member contributions ($4.3 million). Approximately 84.2%, or $10.6 million, was charged to the General Fund. The budgeted total normal cost contribution for Fiscal Year 2026-27 is approximately $12.6 million and is expected to increase again in Fiscal Year 2027-28. While overall contributions continue to increase along with payroll, the normal cost rate declined slightly for both plans during Fiscal Year 2025-26 and 2026-27.
CalPERS began to separate the City’s employer contributions into their normal cost and unfunded liability portions in Fiscal Year 2017-18. The normal cost portion continued to be paid as a percentage of payroll, while the unfunded liability portion was paid as a flat dollar amount. In Fiscal Year 2025-26, the percentage-based portion of the rate decreased from 10.31% to 9.98% for miscellaneous employees and from 23.28% to 22.78% for safety employees. The Fiscal Year 2024-25 CalPERS unfunded liability payment was $ 3,139,526 ($489,272 for miscellaneous employees and $2,650,254 for safety employees), with the final amount differing from the budgeted amount and appearing in the City’s valuation based on revised figures from CalPERS at the time of payment. The City paid both the required contribution ($230,855 for miscellaneous employees and $1,092,771 for safety) and additional discretionary payments (ADP) recommended to avoid negative amortization. Rates will decrease from Fiscal Year 2025-26 levels for the 2026-27 fiscal year to 9.72% for miscellaneous employees and to 21.71% for safety employees together with an unfunded liability payment of $4,310,915 ($841,023 for miscellaneous employees and $3,469,892 for safety employees). For Fiscal Year 2027-28, the normal cost rate increases slightly for both miscellaneous, to 9.79%, and safety, to 21.79%, with the unfunded liability payment decreasing to $378,545 for miscellaneous and increasing to $3,959,026 for safety, for a total payment of $4,337,571, a 0.6% increase over the prior year.
The July 2026 valuation, which incorporates the impact of Fiscal Year 2024-25 investment returns of 11.6%, well ahead of the 6.8% target, estimates the miscellaneous plan to be overfunded starting in Fiscal Year 2028-29. In Fiscal Year 2027-28, both plans funded status improves, from 96.3% to 99.4% (miscellaneous) and from 91.0% to 94.7% (safety). The valuation also notes a 47% decrease in the City’s combined unfunded accrued liability, from $51.0 million to $27.0 million. The July 2027 valuation will incorporate Fiscal Year 2025-26 investment returns of 14.8%; the City anticipates that this will further improve its total unfunded liability and decrease unfunded accrued liability payments in the upcoming years.
The table below shows the required and projected employer contributions (before cost sharing) for the next six fiscal years as reported in the most recent annual valuation report provided by CalPERS, dated July 2026 and setting rates for Fiscal Year 2027-28. The projection assumes that all actuarial assumptions will be realized and that no further changes to assumptions, contributions, benefits, or funding will occur during the projection period. As of the preparation date of this report, there are no reported returns yet for Fiscal Year 2026-27; preliminary final Fiscal Year returns are 14.8%. Actual contribution rates during this projection period could be lower than the projection shown below; for example, note that the projections assume a 6.8% return for Fiscal Year 2025-26. The projected normal cost percentages in the projections below reflect that the normal cost will continue to decline over time as new employees are hired into PEPRA or other lower cost benefit tiers.
For the tables below, Normal Cost means the annual cost of service accrual for the upcoming fiscal year for active employees. UAL means Unfunded Accrued Liability. When a plan or pool’s value of assets is less than its Accrued Liability (i.e., the total dollars needed as of the valuation date to fund all benefits earned in the past for current members), the difference is the plan or pool’s Unfunded Accrued Liability (or unfunded liability). If the unfunded liability is positive, the plan or pool will have to pay contributions exceeding the Normal Cost.
MISCELLANEOUS Plan
Required Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2025-26 and beyond) Fiscal Year
2027-28
2028-29
2029-30
2030-31
2031-32
2032-33
Normal Cost %
9.79%
9.60%
9.50%
9.30%
9.20%
9.10%
UAL Payment
$378,545
$0
$0
$0
$0
$0
SAFETY Plan
Required Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2025-26 and beyond) Fiscal Year
2027-28
2028-29
2029-30
2030-31
2031-32
2032-33
Normal Cost %
21.79%
21.00%
20.40%
19.80%
19.30%
18.70%
UAL Payment
$3,959,026
$3,917,000
$3,183,000
$2,398,000
$1,868,000
$1,868,000
Aside from contributing to CalPERS, the City also contributes to Social Security. The Fiscal Year 2024-25 total cost for Social Security and Medicare coverage was $2.8 million, of which $2 million, or 71.4%, is from the General Fund. Safety employees do not participate in Social Security and Medicare, except for those employees hired after 1986, who are required to participate in Medicare.
See Note 12 to the audited financial statements in “APPENDIX F - CITY OF REDONDO BEACH ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR FISCAL YEAR ENDED JUNE 30, 2025” for additional information regarding the City’s pension plan.
Other Post-Employment Benefits Other Than Pensions
The City also provides post-retirement health care benefits to its employees in accordance with agreements reached with various employee bargaining groups through the California Employers’ Retiree Benefit Trust (CERBT) Fund, which is an agent multiple-employer plan administered by CalPERS. The City pays for retirees’ health care premiums in these plans up to limits established in the agreements with the bargaining units. After age 64, only the City’s minimum health premium contribution under the Public Employees’ Medical and Hospital Care Act is paid. These payments are paid through an Other Post-Employment Benefits (“OPEB”) trust, which was established by the City in Fiscal Year 2009-10 to comply with GASB 45. The OPEB trust allows the City to prefund actuarially derived OPEB costs that are expected to be incurred in future periods. In Fiscal Year 2024-25, the City paid $1,282,258 in premiums and contributed $965,455 to the OPEB trust for a total of $2.2. million in payments to cover current and future retiree medical benefits; however, future contributions may vary based on future actuarial studies. As of June 30, 2025, the City had 418 active members, 155 participants that are inactive and currently receiving benefits, and 369 members entitled to, but not yet receiving benefits.
As of June 30, 2025, the City had a net OPEB liability of $12,753,999, measured as of June 30, 2024. For the Fiscal Year ended June 30, 2025, the City contributed $2,247,713 to the plan.
Changes in the OPEB Liability.
Total OPEB Liability
(a)
Plan Fiduciary Net Position
(b)
Net OPEB Liability
(c) = (a) - (b)
Balance at June 30, 2024 (measurement date June 30, 2023) $23,866,032
$10,198,784
$13,667,248
Changes recognized for the measurement period:
Service cost
818,543
-
$818,543
Interest
1,492,416
-
1,492,416
Benefit changes
-
-
-
Actual vs. expected experience
-
-
-
Assumption changes
-
-
-
Contributions - employer
-
1,970,280
(1,970,280)
Net investment income
-
1,264,693
(1,264,693)
Benefit payments
(1,611,836)
(1,611,836)
-
Administrative expenses
-
(10,765)
10,765
Net changes
699,123
1,612,372
(913,249)
Balance at June 30, 2025 (measurement date June 30, 2024) $24,565,155
$11,811,156
$12,753,999
Risk Management
The City maintains a self-insurance program for workers’ compensation and liability claims. The program accumulates resources in the Self-Insurance Program internal service fund to meet potential losses. For Fiscal Year 2026-27, the self-insurance retention (SIR) is $750,000 for workers’ compensation and $1,000,000 for liability. Excess coverage up to $50 million for each workers’ compensation claim is provided by a third party private insurer, and excess liability up to $30 million for each occurrence is covered by the PRISM Risk Pool Public Risk Innovation, Solution and Management.
PRISM is a joint powers authority for 95% of California counties as well as 68% of California municipalities where risks and losses are pooled together to keep annual premiums low. Both the workers’ compensation and liability claims programs are managed by a third-party claims administrator under the direction of the Risk Management Division of the Human Resources Department.
The amounts included in the Self-Insurance Program internal service fund are significant, partly due to requirements of Government Accounting Standards Board (GASB) Statement No.10. In complying with GASB 10, the City must record as a liability and expenditure not only actual risk/loss experienced in the areas of workers’ compensation and liability, but also claims incurred but not reported (IBNR). IBNR claims include exposure for losses of which a city is not yet aware, as well as any statistically probable increase in costs for accidents that are already known to the City. The appropriate amount to include on the financial statements for IBNR claims is typically developed by an actuary. The City recorded the following:
Workers’ Compensation Claims. For Fiscal Year ending June 30, 2025, claims payable totaled $15.9 million representing an increase of $1.2 million, or 8.2%, from the prior period. This increase is attributable to higher estimated reserves and the settlement of claims in previous years. For Fiscal Year ending June 30, 2026, claims payable totaled $15.9 million representing an increase of $100,000, or .62%, from the prior period. This slight increase is attributable to lower estimated reserves and the settlement of claims in previous years.
Liability Claims. For Fiscal Year ending June 30, 2025, claims payable totaled $8.7 million representing a decrease of $1.0 million, or 10.2%, from the prior period. This decrease is attributable to lower estimated reserves and the settlement of claims in previous years. For Fiscal Year ending June 30, 2026, claims payable totaled $11.4 million representing an increase of $2.7 million, or 31.43%, from the prior period. This increase is attributable to higher estimated reserves and the settlement of claims in previous years.
Unemployment Insurance. The City participates in a direct-cost reimbursement method for unemployment insurance. This program is administered by the State Employment Development Department (EDD) to provide salary continuance for terminated employees. For Fiscal Year 2024-2025, reimbursement to EDD was $23,056. For Fiscal Year 2025-26, reimbursement to EDD was $38,832.
CITY DEMOGRAPHIC INFORMATION
Population
The following table shows the population of the City and the County for the last ten years.
POPULATION STATISTICS
Year (as of January 1)
City of Redondo Beach
Los Angeles County
2017
68,907
10,231,271
2018
68,677
10,283,729
2019
68,473
10,184,378
2020
66,900
10,135,614
2021
66,484
10,044,458
2022
68,972
9,936,690
2023
68,407
9,848,406
2024
68,319
9,808,667
2025
68,528
9,876,811
2026
68,460
9,837,286
Source: U.S. Department of the Census and the California State Department of Finance.
Major Employers
The following table sets forth the top ten major employers located in the City for Fiscal Year 2024-25.
CITY OF REDONDO BEACH
MAJOR EMPLOYERS (Fiscal Year 2024-25)
Name
Type of Business or Entity
Employees
% of Total City Employment
Northrop Grumman Corporation
Aerospace defense/technology
6,845
18.78%
Redondo Beach Unified School District
Education
954
2.62 City of Redondo Beach
City government
458
1.26 The Cheesecake Factory
Restaurant
261
0.72 Target Store
Retail
217
0.60 Impulse Space
Aerospace defense/technology
205
0.56 Macy’s
Retail
171
0.47 Frontier
Telecommunications
164
0.45 United States Post Office
Postal Service
152
0.42 The Kensington Redondo Beach
Assisted living facility
130
0.36 9,557
26.22%
Construction Activity
The following table presents building permit valuations for the City from calendar year 2021 through 2025.
CITY OF REDONDO BEACH
Building Permit Valuation and New Housing Units
2021
2022
2023
2024
2025
Residential
Single Family
$14,624,317
$26,193,994
$27,862,396
$14,456,880
$10,024,739
Multi-Family
24,866,851
78,272,398
18,391,441
20,771,360
41,613,950
Alteration/Additions
24,438,257
28,987,343
25,578,639
30,355,291
35,836,138
Total
$63,929,425
$133,453,735
$71,832,476
$65,583,531
$87,474,827
Non-Residential
New Commercial
$3,655,467
$30,918,970
$3,527,107
$610,000
$0
Other
309,460
308,662
188,835
289,293
651,330
Alteration/Additions
15,841,685
80,680,847
16,770,044
29,098,006
32,877,239
Total
$19,806,612
$111,908,479
$20,485,986
$29,997,299
$33,528,569
Total All Industry
$83,736,037
$245,362,214
$92,318,462
$95,580,830
$121,003,396
New Housing Units
Single Family Units
68 73
79 85
47 Multi-Family Units
85 170
76 29
38 Total
153
243
155
114
85 Source: City of Redondo Beach
Employment and Industry
Los Angeles-Long Beach-Glendale Metropolitan Division civilian labor force and employment figures for calendar years 2022 through 2026 are shown in the following table.
Los Angeles-Long Beach-Glendale Metropolitan Division
Industry Employment & Labor Force - by Annual Average
Category
2022
2023
2024
2025
2026(1)
Civilian Labor Force
5,036,800
5,064,800
5,106,400
5,098,800
4,951,100
Civilian Employment
4,786,000
4,808,300
4,812,400
4,810,600
4,689,000
Civilian Unemployment
250,800
256,500
294,000
288,200
262,100
Civilian Unemployment Rate
5.0%
5.1%
5.8%
5.7%
5.3%
Total Farm
4,800
4,700
4,700
4,200
4,100
Total Nonfarm
4,532,100
4,548,500
4,597,800
4,592,700
4,614,200
Total Private
3,962,100
3,965,400
3,996,100
3,989,500
4,006,400
Goods Producing
474,700
471,300
465,900
451,400
445,400
Mining, Logging and Construction
153,000
152,900
153,300
148,200
148,000
Mining and Logging
1,700
1,700
1,700
1,700
1,800
Construction
151,300
151,200
151,600
146,500
146,200
Manufacturing
321,700
318,400
312,600
303,300
297,400
Durable Goods
189,500
190,200
187,800
181,800
182,200
Nondurable Goods
132,200
128,300
124,900
121,500
115,200
Service Providing
4,057,400
4,077,200
4,131,900
4,141,200
4,168,800
Private Service Providing
3,487,400
3,494,100
3,530,300
3,538,100
3,561,000
Trade, Transportation & Utilities
833,500
822,800
812,000
799,300
786,400
Information
234,900
193,100
189,600
177,000
174,100
Financial Activities
215,700
210,500
207,700
203,400
200,600
Professional & Business Services
667,400
657,200
657,400
660,200
652,600
Educational & Health Services
870,600
919,000
967,000
1,007,100
1,034,500
Leisure & Hospitality
512,400
534,100
537,500
533,100
550,500
Other Services
153,000
157,400
159,000
158,000
162,300
Government
570,000
583,100
601,700
603,200
607,800
Total, All Industries
4,536,900
4,553,200
4,602,500
4,596,900
4,618,300
Note: The “Total, All Industries” data is not directly comparable to the employment data found herein.
Source: State of California, Employment Development Department, Labor Market Information Division, Los Angeles-Long Beach-Glendale Metropolitan Division (Los Angeles County), Industry Employment & Labor Force - by Annual Average, March 2025 Benchmark.
The following table summarizes the labor force, employment and unemployment figures for the years 2021 through 2026 for the City, the County, the State and the nation as a whole.
CITY OF REDONDO BEACH, LOS ANGELES COUNTY,
STATE OF CALIFORNIA AND UNITED STATES
Average Annual Civilian Labor Force, Employment and Unemployment Year and Area
Labor Force
Employment
Unemployment
Unemployment Rate (%)
2021
City of Redondo Beach
38,100
35,500
2,700
7.0 Los Angeles County
5,019,900
4,569,800
450,100
9.0 California
19,013,800
17,619,300
1,394,500
7.3 United States
161,204,000
152,581,000
8,623,000
5.3 2022
City of Redondo Beach
38,500
36,800
1,600
4.2 Los Angeles County
5,036,800
4,786,000
250,800
5.0 California
19,267,400
18,441,400
826,100
4.3 United States
164,287,000
158,291,000
5,996,000
3.6 2023
City of Redondo Beach
38,500
36,800
1,700
4.5 Los Angeles County
5,064,700
4,808,300
256,500
5.1 California
19,514,600
18,593,600
921,000
4.7 United States
167,116,000
161,037,000
6,080,000
3.6 2024
City of Redondo Beach
38,600
36,600
2,000
5.3 Los Angeles County
5,106,400
4,812,400
294,000
5.8 California
19,692,800
18,650,700
1,042,200
5.3 United States
168,106,000
161,346,000
6,761,000
4.0 2025
City of Redondo Beach
38,527
36,572
1,945
5.0 Los Angeles County
5,098,800
4,810,600
288,200
5.6 California
19,823,800
18,738,500
1,085,300
5.5 United States
170,807,000
163,493,000
7,314,000
4.3 Source: California Employment Development Department and U.S. Department of Labor, Bureau of Labor Statistics, March 2025 Benchmark.
A-2
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A-8
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Includes $92.9 million of improvements to the Police and Fire facilities being funded by the Bonds.
As provided in the City’s Annual Adopted Budget for fiscal year ended June 30, 2025.
As provided in the City’s Annual Comprehensive Financial Report for fiscal year ended June 30, 2025.
As provided in the City’s Annual Adopted Budget for fiscal year ended June 30, 2026. This data presentation combines multiple fund budgets for consistency with Annual Comprehensive Financial Report (“ACFR”) fund grouping (General Fund, CalPERS Reserve, Redevelopment Agency-City, Housing Authority-City, and Deposits).
As provided in the City’s Annual Adopted Budget for fiscal year ended June 30, 2027. This data presentation combines multiple fund budgets for consistency with ACFR fund grouping (General Fund, CalPERS Reserve, Redevelopment Agency-City, Housing Authority-City, and Deposits).
Overhead paid to the General Fund.
Consists of fees and charges for services including, but not limited to, parking meter fees, building and engineering fees and library charges.
Includes the General Fund portion of annual debt service on its 2021A Lease Revenue Bonds of approximately $11.4 million.
General Fund cash and investments have decreased primarily as a result of spending funds for one-time designated purposes, including a transfer to the self-insurance fund, transfer to the capital projects fund, and transfer to the Harbor Tidelands and Uplands funds for capital spending.
Up to $3 million in cash is held by a fiscal agent for a reserve fund established in connection with a financing guarantee by the City for the Marine Avenue hotels project. Due to the COVID-19 Pandemic and the impact on travel and hotel stays, the Marine Avenue Hotels developer drew on the reserve fund starting in Fiscal Year 2019-20. See “--Transient Occupancy Tax (TOT)” below.
The City’s Statement of Financial Principles requires the City to maintain a committed fund balance for contingencies equivalent to 8.33%, (or one-month), of the General Fund’s current fiscal year’s operating expense budget.
Transfers from the General Fund for capital improvement project funding, subsidies of the Street Landscaping and Lighting Fund, and funding capital projects, including for future major facilities reconstruction and open space acquisition vary from year to year in accordance with the capacity of the General Fund in light of competing funding interests. Starting in FY 2022-23, the City budgets and records spending for 2019A (as a pass-through) and 2021A debt service in Transfers Out.
Excluding homeowners’ exemptions and vehicle license fees which are included in Tax in Fiscal Year2024-25 ACFR. The vehicle license fee in this table includes the Motor Vehicle in Lieu Fee which was included in intergovernmental revenue in the Fiscal Year2024-25 ACFR.
Latest data available.
Starting in 2020 the State Board of Equalization changed the category from Total Retail to Total Retail and Food Services Annual increases vary by category, entry age, and duration of service The mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board in November 2021. For purposes of the mortality rates, the rates incorporate generational mortality to capture ongoing mortality improvement. Generational mortality explicitly assumes that members born more recently will live longer than the members born before them thereby capturing the mortality improvement seen in the past and expected continued improvement. For more details, please refer to the 2021 CalPERS Experience Study and Review of Actuarial Assumptions report that can be found on the CalPERS website.
The standard cost-of-living adjustment (COLA) is 2%. Annual adjustments are calculated by first determining the lesser of 1) 2% compounded from the end of the year of retirement or 2) actual rate of price inflation. The resulting increase is divided by the total increase provided in prior years. For any given year, the COLA adjustment may be less than 2% (when the rate of price inflation is low), may be greater than the rate of price inflation (when the rate of price inflation is low after several years of high price inflation) or may even be greater than 2% (when price inflation is high after several years of low price inflation).
An expected annual rate of price inflation of 2.30% was used for this period.
Figures are based on the 2024 Asset Liability Management mid-cycle review.
The fiduciary net position includes receivables for employee service buybacks, deficiency reserves, fiduciary self-insurance and OPEB expense. As described in the previous section of this note, this may differ from the plan assets reported in the funding actuarial valuation report.
City of Redondo Beach, Annual Comprehensive Financial Report, based on business licensing data from the City of Redondo Beach.
Based on 36,446 total City employees. Data from U.S. Department of the Census, American Community Survey (ACS) 5-year estimate.
Includes churches and religious building, hospitals and institutional buildings, schools and educational buildings, residential garages, public works and utilities buildings and non-residential alterations and additions.
May not add up due to rounding.
Data as of June 1, 2026.
Includes persons involved in labor-management trade disputes.
Includes all persons without jobs who are actively seeking work.
The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded figures in this table.
Annual estimates for 2025 are 11-month averages that exclude October. (Data for October 2025 were not collected due to the federal government shutdown.) As a result, 2025 annual estimates are not strictly comparable with annual averages for other years.