VENTURA PORT DISTRICT BOARD OF PORT COMMISSIONERS Everard Ashworth, Chairman Brian Brennan, Vice Chairman Jim Friedman, Secretary Bruce E. Smith, Commissioner Nikos Valance, Commissioner
Oscar Peña, General Manager Timothy Gosney, Legal Counsel Jessica Rauch, Clerk of the Board
PORT COMMISSION AGENDA REGULAR MEETING JANUARY 25, 2017 AT 7:00PM VENTURA PORT DISTRICT OFFICE 1603 ANCHORS WAY DRIVE, VENTURA, CA
A Closed Session of the Board will be held at 5:30PM at the Port District Office located at 1603 Anchors Way Drive, Ventura, CA, to discuss the items on the Attachment to Agenda- Closed Session Conference with Legal Counsel.
The Board will convene in Open Session at the Port District Office located at 1603 Anchors Way Drive for its Regular Meeting at 7:00PM.
ADMINISTRATIVE AGENDA:
CALL TO ORDER: By Chair Everard Ashworth.
PLEDGE OF ALLEGIANCE: By Chair Everard Ashworth.
ROLL CALL: By the Clerk of the Board.
ADOPTION OF AGENDA (3 minutes) Consider and approve, by majority vote, minor revisions to agenda items and/or attachments and any item added to, or removed/continued from the Port Commission’s agenda. Administrative Reports relating to this agenda and materials related to an item on this agenda submitted after distribution of the agenda packet are available for public review at the Port District’s office located at 1603 Anchors Way Drive, Ventura, CA during business hours as well as on the District’s website - www.venturaharbor.com (Public Notices). Each item on the agenda shall be deemed to include action by an appropriate motion, resolution or ordinance to take action on any item.
APPROVAL OF MINUTES (3 minutes) The Minutes of the January 11, 2017 meeting will be considered for approval.
PUBLIC COMMUNICATIONS (3 minutes) The Public Communications period is set aside to allow public testimony on items not on today’s agenda. Each person may address the Commission for up to three minutes or at the discretion of the Chair.
CLOSED SESSION REPORT (3 minutes) Closed Sessions are not open to the public pursuant to the Brown Act. Any reportable actions taken by the Commission during Closed Session will be announced at this time.
1 Ventura Port District – Regular Meeting Agenda January 25, 2017
BOARD COMMUNICATIONS (5 minutes) Port Commissioner’s may present brief reports on port issues, such as seminars, meetings and literature that would be of interest to the public and/or Commission, as a whole. Port Commissioner’s must provide a brief summary and disclose any discussions he or she may have had with any Port District Tenants related to Port District business.
DEPARTMENTAL AND GENERAL MANAGERS REPORTS (5 minutes) Ventura Port District Staff and General Manager will give the Commission reports on their Department and items of general interest to the Port Commission and members of the public.
LEGAL COUNSEL REPORT (5 minutes)
CONSENT AGENDA: (5 minutes) Matters appearing on the Consent Calendar are expected to be non-controversial and will be acted upon by the Board at one time, without discussion, unless a member of the Board or the public requests an opportunity to address any given item. Approval by the Board of Consent Items means that the recommendation is approved along with the terms set forth in the applicable staff reports.
A) Approval of New Retail Lease Agreement for December Store & More Recommended Action: Voice Vote. That the Board of Port Commissioners approve a new Retail lease agreement between the Ventura Port District dba Ventura Harbor Village and December Store & More for the premises located at 1559 Spinnaker Drive #103 consisting of a total of 400 square feet for a one-year term.
B) Approval of New Retail Lease Agreement for Silhouettes Salon Recommended Action: Voice Vote. That the Board of Port Commissioners approve a new Retail lease agreement between the Ventura Port District dba Ventura Harbor Village and Silhouettes Salon for the premises located at 1591 Spinnaker Drive #117B consisting of a total of 761square feet for a two-year term.
C) Approval of New Office Lease Agreement for Linda D. Andreotti dba Coastwide Corporation Recommended Action: Voice Vote. That the Board of Port Commissioners approve a new Office lease agreement between the Ventura Port District dba Ventura Harbor Village and Linda D. Andreotti dba Coastwide Corporation for the premises located at 1575 Spinnaker Drive #205/A consisting of a total of 1,326 square feet for a one-year term.
STANDARD AGENDA:
1) Approval of Fiscal Year 2015 – 2016 Audit Recommended Action: Voice Vote. That the Board of Port Commissioners approve the acceptance of the Basic Financial Statements and Supplementary Information with Independent Auditor’s Report for the Year Ended June 30, 2016, prepared by White Nelson Diehl Evans, LLP.
2) Coastal Marine Biolabs Quarter 1 and Quarter 2 Report Recommended Action: Informational. That the Board of Port Commissioners receive a report from Coastal Marine Biolabs on their current activities.
2 Ventura Port District – Regular Meeting Agenda January 25, 2017
3) ADA Parking Access Improvements Bid Award Recommended Action: Voice Vote. That the Board of Port Commissioners award the ADA Parking Access Improvements contract to J & H Engineering General Contractors, Inc. in the amount of $174,934.25.
4) Approval of Parking Management Plan for the Ventura Harbor Recommended Action: Roll Call Vote. That the Board of Port Commissioners approve the Parking Management Plan for the Ventura Harbor.
REQUEST FOR FUTURE AGENDA ITEMS
ADJOURNMENT
This agenda was posted on Friday, January 20, 2017 by 5:00 p.m. at the Port District Office and on the Internet - www.venturaharbor.com (Port Commission). In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Ventura Port District at (805) 642-8538. Notification 48 hours before the meeting will enable the District to make reasonable arrangements to ensure accessibility. (28 CFR 35.102.35.104 ADA Title II)
3 Ventura Port District – Regular Meeting Agenda January 25, 2017
ATTACHMENT TO PORT COMMISSION AGENDA CLOSED SESSION CONFERENCE WITH LEGAL COUNSEL
WEDNESDAY, JANUARY 25, 2017
1. Conference with Real Property Negotiators - Per Government Code Section 54956.8:
a) Property: 1691 Spinnaker Drive #104, #105A, #105B Negotiating Parties: Oscar Peña, Brian Pendleton, Timothy Gosney Under Negotiation: Island Packers New Lease Terms
b) Property: 1559 Spinnaker Drive #103 Negotiating Parties: Oscar Peña, Brian Pendleton, Timothy Gosney Under Negotiation: December Store and More New Retail Lease
c) Property: 1591 Spinnaker Drive #117B Negotiating Parties: Oscar Pena, Brian Pendleton, Timothy Gosney Under Negotiation: Silhouettes Salon New Retail Lease
d) Property: 1575 Spinnaker Drive #205/A Negotiating Parties: Oscar Pena, Brian Pendleton, Timothy Gosney Under Negotiation: Coastwide Corporation New Office Lease
e) Property: 1559 Spinnaker Drive #108, #206 Negotiating Parties: Oscar Pena, Brian Pendleton, Timothy Gosney Under Negotiation: New Lease Terms with Ventura Dive & Sport
2. Conference with Legal Counsel - Potential Litigation per Government Code Section 54956.9(d)(4): One case.
3. Conference with Legal Counsel - Potential Litigation per Government Code Section 54956.9(d)(2): One case.
4. Conference with Legal Counsel - Potential Litigation per Government Code Section 54956.9(d)(2): Claim by Chubb Insurance Company.
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BOARD OF PORT COMMISSIONERS JANUARY 25, 2017
APPROVAL OF MINUTES JANUARY 11, 2017 MEETING
5 VENTURA PORT DISTRICT
BOARD OF PORT COMMISSIONERS MINUTES OF JANUARY 11, 2017
The Regular Meeting of the Ventura Board of Port Commissioners was called to order by Chairman Jim Friedman at 7:11PM at the Ventura Port District Office located 1603 Anchors Way Drive, Ventura, CA 93001.
Commissioners Present: Jim Friedman, Chair Everard Ashworth, Vice Chair Bruce E. Smith Brian Brennan
Commissioners Absent: Nikos Valance
Port District Staff: Oscar Peña, General Manager Brian Pendleton, Business Operations Manager John Higgins, Harbormaster Richard Parsons, Consultant Jessica Rauch, Clerk of the Board
Legal Counsel: Timothy Gosney Dominic Nunneri
AGENDA
CALL TO ORDER: By Chairman Jim Friedman at 7:11PM.
PLEDGE OF ALLEGIANCE: By Commissioner Friedman.
ROLL CALL: All Commissioners were present.
ELECTION OF OFFICERS
ACTION: Commissioner Smith moved, seconded by Commissioner Brennan and carried by a vote of 4-0 to nominate Commissioner Ashworth as Chairman.
ACTION: Commissioner Friedman moved, seconded by Commissioner Ashworth and carried by a vote of 3-1 (Smith no) to nominate Commissioner Brennan as Vice-Chairman.
ACTION: Commissioner Brennan moved, seconded by Commissioner Ashworth and carried by a vote of 3-1 (Smith no) to nominate Commissioner Friedman as Secretary.
ADOPTION OF AGENDA
ACTON: Commissioner Friedman moved, seconded by Commissioner Brennan and carried by a vote of 4-0 to adopt the January 11, 2017 agenda, with Consent Item C being pulled from the agenda.
6 Ventura Port District Board of Port Commissioners January 11, 2017 Regular Meeting Minutes Page 2
APPROVAL OF MINUTES The Minutes of December 7, 2016 Regular meeting were considered as follows:
ACTION: Commissioner Brennan moved, seconded by Commissioner Friedman and carried by a vote of 4-0 to approve the minutes of the December 7, 2016 Regular meeting, deleting Gregory L. Carson from “Commissioners Present” to Brian Brennan.
PUBLIC COMMUNICATIONS: Sam Sadove encouraged the Commission to continue seeking funding to destroy abandoned boats. Richard Countess from the Pierpont Bay Yacht Club requested the use of Parcel 8 for their boat races this year. The Commission seemed okay with this and suggested working with John Higgins to coordinate.
CLOSED SESSION REPORT: Mr. Gosney stated that the Board met in closed session; discussed and reviewed all items on the closed session agenda. Staff was given instructions on how to proceed as appropriate and there was no action taken that is reportable under The Brown Act.
BOARD COMMUNICATIONS: None.
STAFF COMMUNICATIONS: Mr. Peña announced that the Tall Ships will be coming to the Harbor on January 25 through February 14.
LEGAL COUNSEL REPORT: None.
The Port Commission adjourned and convened as the Board of Directors of the Ventura Port District Public Facilities Corporation at 7:33PM.
AGENDA
I. Call to Order the Annual Meeting of the Ventura Port District Public Facilities Corporation
A. Election of Officers: President, Vice President, Secretary
B. Ratify the Minutes of the Meeting held January 27, 2016
II. Adjourn the Annual Meeting of the Public Facilities Corporation
The Board of Directors of the Ventura Port District Public Facilities Corporation adjourned and reconvened the Regular Meeting of the Ventura Port District Board of Port Commissioners at 7:40PM.
CONSENT AGENDA:
A) Approval of Out of Town Travel Request Recommended Action: Voice Vote. That the Board of Port Commissioners approve the out of town travel requests for Harbormaster, John Higgins, Consultant, Richard Parsons, Commissioner, Everard Ashworth, and Electrician, John Collins.
ACTION: Commissioner Brennan moved, seconded by Commissioner Friedman and carried by a vote of 4-0 to approve the out of town travel requests for
7 Ventura Port District Board of Port Commissioners January 11, 2017 Regular Meeting Minutes Page 3
Harbormaster, John Higgins, Consultant, Richard Parsons, Commissioner, Everard Ashworth, and Electrician, John Collins.
B) Approval of Professional Services Agreement with Noble Consultants, Inc. Recommended Action: Voice Vote. That the Board of Port Commissioners approve the Professional Services Agreement with Noble Consultants, Inc. to provide professional engineering services for the preparation of contract documents providing for the replacement of Docks G, H and the southern portion of D at Harbor Village.
ACTION: Commissioner Brennan moved, seconded by Commissioner Friedman and carried by a vote of 4-0 to approve the Professional Services Agreement with Noble Consultants, Inc. to provide professional engineering services for the preparation of contract documents providing for the replacement of Docks G, H and the southern portion of D at Harbor Village.
C) Consideration of Rejection of Claim by Chubb Insurance Recommended Action: Voice Vote. That the Board of Port Commissioners approve the rejection of a claim filed against the Ventura Port District on October 5, 2016 by Chubb Insurance as Subrogee of Georgiana Denniston and authorize the General Manager to execute and mail a Notice of Rejection to Chubb Insurance.
ACTION: This item was removed from the agenda.
STANDARD AGENDA:
1) Shellfish Grant – Leasing Alternatives and Operational Structures Recommended Action: Information. That the Board of Port Commissioners receives a memorandum by Plauché & Carr, LLP analyzing leasing alternatives and operational structures available to the District related to the Shellfish Grant.
ACTION: The Commission received a presentation from Robert Smith from Plauché & Carr, LLP, analyzing leasing alternatives and operational structures available to the District related to the Shellfish Grant.
REQUEST FOR FUTURE AGENDA ITEMS: Commissioner Brennan requested an informational item on the abandoned boat program.
ADJOURNMENT: The meeting was adjourned at 8:40PM.
______Secretary
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BOARD OF PORT COMMISSIONERS JANUARY 25, 2017 DEPARTMENTAL STAFF REPORTS DREDGING FEDERAL FACILITIES HARBOR PATROL MARINA PROPERTY
9 RWP DREDGING MANAGEMENT
Richard W. Parsons 2271 Los Encinos Road Ojai, California 93023 Phone/Fax (805) 649-9759
January 25, 2017
Board of Port Commissioners Ventura Port District 1603 Anchors Way Drive Ventura, CA 93001
Subject: December 2016/January 2017 Dredging Activities and Special Projects Report
The Dredging Program Manager’s activities for the December 2016/January 2017 period are reviewed below:
FY2018 Federal Dredging Appropriations I am currently discussing with the LA District of the Corps of Engineers the expected FY18 funding requirement for the dredging of Ventura Harbor. While I have not yet finalized the number, I expect the District’s request to Congress will be in the $6 to $7 million range.
FY2017 Maintenance Dredging Preparations The Corps dredging contractor, Manson Construction Company, is scheduled to commence dredging in the harbor in mid- February. The $4.3 million in available funding will provide for the dredging of about 400,000 cubic yards of material. My expectation is that by the date dredging commences the volume of material available to be dredged will be between 550,000 and 650,000 cubic yards. Thus, while the available funding is unlikely to provide for a complete dredging of the entrance channel and sand traps, I nonetheless believe the effort will be adequate.
Harbor Village Phase II ADA Improvements J&T Engineering and Construction is still struggling to complete the stainless steel railing installation called for in their contract for the ADA improvements at the Village. Hopefully, they can complete the work by February.
Harbor Village Phase III Improvements Viola Contractors, Inc. began the demolition work on the Phase III Improvements during the week of January 9, 2017. The work has been hampered, however, by the recent rains. At this point, the old promenade from the Dive Shop around to Copa Cubana and much of the linear concrete plaza area between Coffee Dock & Post and the Carousel Marketplace have been removed. The erection of the interim wooden walkway temporarily replacing the promenade on weekends was delayed by the rains but should be in place by the weekend of January 21/22. For those businesses immediately adjacent to the work area the noise and dirt are clearly a problem. Both the contractor and the District are making every effort to mitigate the problems as they develop.
Roof Rehabilitation Work (Phase II) We expect to file working drawings with the City’s Building Department for the roof rehabilitation work at 1431, 1591 and 1691 Spinnaker Drive by the end of the month. Upon the City’s approval, competitive bids will be sought with the expectation that work would commence in April or May 2017.
Respectfully submitted,
Richard Parsons
Dredging and Special Projects Consultant
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Federal Update and Outlook
On January 3, 2017, the 114th Congress was officially brought to a close to allow members of the 115th Congress to be sworn into the House and Senate. Republicans in the House and Senate immediately set to work on efforts to dismantle President Obama's signature piece of legislation, the Affordable Care Act (ACA). Since a replacement for the ACA has yet to be identified, the debate over how move forward will continue to occupy the time and attention of the Republican majority along with a massive effort to overhaul the tax code. While healthcare and tax reform are front and center, the desire to address critical infrastructure needs through an infrastructure package are not far behind. The pace of such a package will be determined once President-elect Trump is sworn into office as the 45th President of the United States on January 20th.
But make no mistake, attention in Washington, DC will also be firmly focused on the 2018 mid- term elections. In just two years, 25 sitting Democratic senators will be in the ballot, ten of which hold seats in states that were won by Trump. The electoral map was turned upside down last November and Democrats will be working hard to reverse their losses and in the hopes of making substantial gains.
Fiscal Year 2017 Continuing Resolution
In early December 2016, Congress punted on completing their work on the fiscal year 2017 (FY17) appropriations bills. As such federal agencies are currently operating under a continuing resolution (CR) at FY16 levels until April 28, 2017. The current CR further delays the ability of the US Army Corps of Engineers (Corps) to execute a work plan for FY17 as the Corps lacks the authority to produce a work plan without its budget being signed into law by the President. Until this issue is resolved they are essentially locked into a holding pattern.
Notably, this is the first time that a new president will take office while the federal budget operates under a CR. Given all of the other duties and pressures that will consume the start of the 115th Congress, there is a great deal of nervousness that instead of seeing the FY17 process finalized by April 28th, we will see a year-long CR. This is also the first time that we are facing the threat of a year-long CR without earmarks which puts the formulation of a work plan into uncharted territory. It is unknown what kind of a role the new Administration will want to take for an anticipated work plan.
A major impact of a CR is that agencies generally do not award discretionary grants until the full fiscal year’s funding has been decided. This could push out final awards from several important grant programs until late summer or even closer to the end of the fiscal year on September 30. Another effect is on those programs, such as highway funding, that were due to see increased funding during this fiscal year but will, instead, need to make do with lower FY16 funding.
The CR contains an added $170 million to help communities affected by contaminated drinking water, with most of these funds destined for Flint, Michigan. This funding includes grants for infrastructure
11 improvements, lead poisoning prevention care for mothers and children, and a lead exposure registry. Within this total, the CR also provides $20 million to capitalize the WIFIA water-financing program administered by EPA. This funding will allow EPA to begin making loans from the program in the coming calendar year. The CR also includes funding for emergency relief to Louisiana and other states that were hit by hurricanes and other natural disasters in 2016.
Proposed Action Items: . Call/send letters to your congressional delegation stressing the importance of completing the FY17 appropriations bills by April 28th. . Call House and Senate leadership and urge them against passing a year-long CR. . Work with your partners at the Corps to develop plan A and plan B scenarios for anticipated work plan funding.
Fiscal Year 2018 Administration's Budget
It's not uncommon for budgets to be delayed during times of Presidential transition and we expect that it will take several months, perhaps not until May, before the Trump Administration releases their FY18 budget request to Congress. In the interim, the Office of Management and Budget (OMB) is preparing a very high level document intended to be released in February. This will allow the incoming Administration to meet both its constitutional reporting requirements and produce a more detailed budget later in 2017. While this is not an ideal way to kick off the FY18 appropriations cycle, the Chairmen of the House and Senate Appropriations Committees will probably be more accommodating to a President of their own party than they were when President Obama's budget request was delayed several years back.
Funding for the Corps historically hasn't had a tremendous amount of fluctuation regardless of the occupant of the Oval Office. In fact, the Corps sometimes fairs slightly better under Republican administrations, but past administration recommendations for the Corps consistently fall far short of the actual need. It will be up to Congress to "plus up" funding for the Corps and CMANC will need to continue its efforts to see that through.
President-elect Trump has selected Congressman Mick Mulvaney (R-SC) to be his OMB Director. As a member of the House Freedom Caucus, Mulvaney has a well-established track record of being a hardcore fiscal conservative and has actively advocated for cuts for spending on both domestic and military programs. He is not afraid to pick a fight and notably was one of the key members behind the ouster of former Speaker John Boehner.
Proposed Action Items: . Continue to work with your Corps partners for project funding to be included in the FY18 Administration's Budget Request. . Ask your Member(s) of Congress to write and call the Trump Administration on your behalf. . Come to DC for CMANC's Legislative Advocacy Meetings March 6-8
Water Resources Development Act of 2016
Rather than passing the Water Resources Development Act of 2016 (WRDA) as a standalone measure, the bill was packaged with several other water infrastructure priorities to become the Water Infrastructure
12 Improvements for the Nation Act (WIIN), S. 612 (PL 114-322). Within the WIIN Act, most the civil works provisions included in earlier House and Senate passed WRDA bills remained intact. Highlights include:
. Authorization of 37 new Corps projects for navigation, flood risk, hurricane protection, and ecosystem restoration. . Navigation interests include project authorization of four coastal navigation channel improvement efforts for Port Everglades, FL; Charleston, SC; and Little Diomede and Craig Harbor, AK and four feasibility studies for channel improvements at the Port of Brunswick, GA; Port Corpus Christi, TX; Bay City, TX; and the Gulf Intracoastal Waterway in Texas. . Authorizes two new regional coastal navigation studies for the Mississippi River from Baton Rouge, LA, to the Gulf and Arctic Deep Draft Port Development Partnerships. . Authorizes the placement of dredged material in a location other than the least-cost alternative, if any additional upfront costs will be offset by the resulting environmental, flood protection, and resiliency benefits. . Allows the Corps to assume the O&M costs of alternative projects to maintenance dredging for a channel if the alternative project will lower the overall costs of maintaining the channel. . Allows a non-federal interest to perform O&M to not less than the authorized dimensions of a project or separable element and subject to appropriations be reimbursed up to the estimated federal cost of performing the same work. . Extends the HMT Donor and Energy transfer port provision until 2025 if HMT targets are achieved. This provision would have expired in 2018. . Includes an expansion of the HMT Donor and Energy program for medium-size ports. . Makes technical revisions and includes streamlining language that a) directs the Corps to issue implementation guidance for WRRDA Section 2102 (funds distribution process) within 90 days of the bill’s enactment (Section 1112), b) clarifies that a project sponsor can fund the Corps to conduct the economic analysis on sponsor-led feasibility studies (Section 1126), and c) clarifies when the Corps can accept and use materials and services (Section 1153) . Changes the federal navigation channel deepening cost-share from 45 feet to 50 feet. . Includes language that will ensure that Harbor Maintenance Tax (HMT) authorization levels will increase by three percent over the prior year, even if the HMT revenues decrease. This provision was included to reach the full use of HMT by 2025.
With WIIN signed into law, the Corps will soon begin their implementation process. This effort will be led by Ada Benavides and she is expected to announce plans for Corps stakeholder engagement efforts in the near future. Nearly 15% of the provisions from WRRDA 2014 remain without final implementation guidance and it is unclear how the Corps will prioritize outstanding provisions from 2014 versus new provisions in 2016.
Within the House, Transportation and Infrastructure Committee (T&I) Ranking Member DeFazio is anxious to get started on WRDA 2018. He has already signaled that full use of the Harbor Maintenance Trust Fund (HMT) and taking HMT off budget remain top priorities for him and he intends to complete the work that he started on WRDA 2016.
Proposed Action Items: . Engage with the Corps on implementation of provisions of interest. . Initiate discussions with T&I and Senate Environment and Public Works Committee on WRDA 2018 needs.
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Infrastructure Package
One of the signature pieces of both presidential campaigns was an infrastructure package. With Trump now in the driver's seat, leaders in Washington have openly commented on an infrastructure package. Here's what they are saying:
President-elect Trump - "Buy American and hire American. We're going to do it ourselves."
Speaker Paul Ryan – “Critical for the foundation of economic growth.”
Senate Majority Leader Mitch McConnell - "What I hope that we will clearly avoid - and I'm confident we will - is a trillion-dollar stimulus. Take you back to 2009, we borrowed a trillion dollars and nobody could find that it did much of anything. It seemed to me that basically what it did was plus up a bunch of federal accounts. And when you looked around trying to find examples of things that actually occurred, they were darn few."
Senate Minority Leader Chuck Schumer - "We think it should be large. He mentioned a trillion dollars. I told him that sounded good to me. I said to do this in the way that at least we wanted to do it, he'd need to alienate a good number of his right-wing Republicans who are not - these were the folks who held up even a much smaller infrastructure bill for five years in the House. And he said he realized that. And so we'll see what happens. I mean, on the administration in general, I don't think anybody knows what they're gonna do."
House Transportation & Infrastructure Ranking Member Peter DeFazio – “Public-private partnerships only work on projects that create revenues. The vast majority of the national highway system, and our bridge problems and all our transit problems, do not generate revenues. It will not help them.”
Congressman John Delaney - "In government we think about it entirely wrong. The way we score infrastructure spending is as if it has no return. That creates a very, very difficult environment to make the kinds of transformative investments we have to make as a nation."
Congressman Raúl Labrador, a member of the House Freedom Caucus - “If Trump doesn’t find a way to pay for it, then I think the majority of us, if not all of us, are going to vote against it.”
Reince Priebus - "The first nine months being very much consumed through Obamacare and tax reform. Well, we don't, listen, it's hard ... and it's not something, I would love to not get into the details with you, but we're not going to do that today.”
Comments about an infrastructure package, what it will include, how it should be paid for, when it will happen, etc. are all over the map. But one thing that is certain is that the Trump Administration intends to form an Infrastructure Task Force to shape the proposal. The Task Force is expected to be comprised private investors and officials from all levels of government.
14 Proposed Action Items: . Meet with your Member(s) of Congress to let them know why an infrastructure package is important to you. . Educate republican members about economic benefits of infrastructure investments and the need for a well-rounded package that includes direct funding for infrastructure.
Cabinet Selections
Donald Trump continues his quick pace to name his future Cabinet and senior advisors. True-to-form, his picks include a mix of individuals respected in their fields, unconventional choices, and highly controversial figures. However, despite the fierce opposition of Democrats to several of his picks, are powerless to stop them. In 2013, while in the majority, Senate Democrats approved the “nuclear option” that eliminated the ability of the minority to filibuster Cabinet-level appointees and federal judge nominations (with the exception of Supreme Court nominees). Thus, while contentious hearings and floor debate can be expected, Trump’s picks should win confirmation in early 2017.
Cabinet Selections (as of January 11, 2017)
Position Appointment/Nominee* White House Staff Chief of Staff Reince Priebus Chief Strategist Steve Bannon Senior Director for Strategic Communications Monica Crowley White House Counsel Donald McGhan II Office of Management & Budget, Director Rep. Mick Mulvaney (R-SC)* National Security Advisor Lt. Gen. Mike Flynn (ret.) Deputy Nat’l Security Advisor K.T. McFarland Assistant to the President for Homeland Security and Thomas Bossert Counterterrorism National Economic Council, Director Gary Cohn (President, Goldman Sachs) Cabinet and Other Officials Attorney General Sen. Jeff Sessions (R-AL)* Commerce Wilbur Ross* Deputy Secretary Todd Rickets* Defense Gen. James Mattis (ret.)* Secretary of the Army Vincent Viola* Director of National Intelligence Dan Coats (fmr. Senator – R-IN) Central Intelligence Agency, Director Rep. Mike Pompeo (R-KS)* Education Betsy DeVos* Energy Rick Perry (fmr. TX Gov.)* Environmental Protection Agency Scott Pruitt (Attorney General, OK)* HHS Rep. Tom Price (R-GA; Chairman, House Budget Committee)* Centers for Disease Control Seema Verma* Homeland Security Gen. John Kelly (ret.)* Housing & Urban Development Dr. Ben Carson* Interior Rep. Ryan Zinke (R-MT)* Labor Andrew Puzder*
15 Small Business Administration Linda McMahon* State Rex Tillerson (CEO, ExxonMobil)* Transportation Elaine Chao* Treasury Steven Mnuchin* UN Ambassador Gov. Nikki Haley (R-SC)* U.S. Trade Representative Robert Lighthizer* Veterans Administration David Shulkin* *Nominee requiring Senate confirmation
Senior Staff Selections . White House Political Director: Bill . Office of Public Liason: Katie Walsh Stepien . Director of Presidential Personnel: John . Deputy Assistant to the President and DeStefano Director of Oval Office Operations: . Director of Advance: George Gigicos Keith Schiller . Special Assistant and Personal Aide to . Director of Legislative Affairs: Marc the President: John McEntee Short . Chief of Staff for the Vice President: . Deputy Communications Director: Josh Pitcock Jessica Ditto . Deputy Chief of Staff for the Vice . Deputy Communications Director and President: Jen Pavlik Research Director: Raj Shah . Chairman, Securities & Exchange . Director of Communications for the Commission: Jay Clayton Office of Public Liaison: Omarosa Manigault
During the week of January 9th, the Senate began confirmation hearings for several nominees. Among them was Elaine Chao, Trump’s choice for Secretary of the US Department of Transportation. At her January 11th nomination hearing before the Senate Commerce Committee Chao was joined by members of her immediately family and introduced by her husband Majority Leader McConnell. Over the course of several hours members of the committee asked Chao questions regarding all modes of transportation including maritime interests and the Administration’s plans for an infrastructure package. Chao received high marks for her performance before the committee and is expected to be easily confirmed by the full Senate.
New Members of the California Delegation
The California congressional delegation welcomed several new members of Congress. They are:
. Senator Kamala Harris. Replaced . Salud Carbajal CA-24. Replaced retiring retiring Senator Boxer. Congresswoman Capps. . Ro Khanna CA-17. Defeated . Nanette Barragan CA-44. Replaced Congressman Honda. retiring Congresswoman Hahn. . Jimmy Panetta CA-20. Replaced . Lou Correa CA-46. Replaced retiring retiring Congressman Farr. Congresswoman Loretta Sanchez.
In addition, with the selection of Congressman Becerra to become California’s new attorney general, the state will have one open seat. A special election is expected to take place late this spring.
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VENTURA PORT DISTRICT DEPARTMENTAL STAFF REPORT Meeting Date: January 25, 2017 TO: Board of Port Commissioners FROM: Joe A. Gonzalez, Facilities Manager SUBJECT: December 2016 Facilities Report
FACILITIES PROJECTS: Staff has been progressing well with the various projects around the Harbor Village as follows:
1) Christmas Décor: Contractors: All Christmas décor under Contract has been removed.
In house staff: Has removed and stored all Christmas Décor.
2) Landlord’s Tenant Improvement Allowances - working closely with these tenants:
The Ultimate Escape Rooms, Complete. iPowerUp, Complete.
Sierra Pacific Mortgage, Complete. Ventura Swimwear, Complete.
17 Brophy’s Bros Restaurant (office), Complete.
3) Upgrading/adding WiFi to all telephones in the Port District elevators. Currently paying $135 per elevator; upgrades will reduce costs to $35 per elevator, total of six elevators. Project is Complete.
.
4) Ventura Harbor Village Window Replacement - Rasmussen & Associates have delivered the specifications for the VHV window replacements. Total budgeted for this project is $130,000. Total construction will now be approximately $100,000; architect costs are approximately $10,000. On first phase
5) Ventura Harbor Village Entry Feature Repairs – Capital Improvement Project. Budgeted for $60,000; finalized project at a cost of $25,000. The final walk thru inspection was performed, final paperwork has been completed, project is Completed.
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6) Village Landscaping – The bougainvillea along the promenade embankment has been trimmed back 24” to accommodate Phase Three Promenade Sidewalk project.
7) Ventura Harbor Village Flag Pole - was serviced and a new 8” finial ball was installed.
19 8) Village Building Staircase - Several staircases have been refurbished; new waterproofing material was used with non-skid coating.
20 VENTURA PORT DISTRICT DEPARTMENTAL STAFF REPORT Meeting Date: January 25, 2017 TO: Board of Port Commissioners FROM: John Higgins, Harbormaster SUBJECT: December 2016 Harbormaster/Harbor Patrol Report
Public Safety Overview: The Harbor has experienced several rain events in the last 60 days. While most of the rain has been light we had a significant deluge the night of December 23rd. This event caused significant flooding throughout the Harbor and Harbor Blvd. The Holiday Inn Parking Lot, along with Navigator, flooded as the storm drains could not keep up with the volume of water that was poured in from the rain and neighboring fields. Several cars were significantly damaged and one water rescue was performed by our staff. The road was closed as a result and traffic diverted for approximately 3 hours, but no injuries were reported. We have been monitoring the Santa Clara River Mouth daily because once a strong flow occurs there will be excessive navigational hazards for our local boaters. Should we see significant debris, we will surely pass it on to the boating community and commercial vessels.
Beach Update: The Beach Erosion has not increased significantly as we have not had any significant surf events in the last 60 days. The area between Surfers Knoll and Harbor Cove is still the most affected area and has receded back near the dunes. As mentioned in previous reports there are no significant threat to the Port District Facilities at either Surfers Knoll or Harbor Cove Beach Parking Lots.
Harbor Patrol Vacancy: Harbor Patrol Officer Brad Chisholm has turned in his resignation after being offered a job with Los Angeles County Fire Department. Brad was the newest member of our staff and brought many talents to our Organization. While it is a big loss to the Harbor we are very supportive of his decision and wish him luck in his new career.
In the interim we have offered Part Time Harbor Patrolman Erik Bear a Temporary Full Time Schedule until we can undergo a hiring process. We expect Erik Bear will be a strong candidate for the Permanent Full Time Position.
Holiday Parade of Lights: With extreme weather forecasted early in the week the first day of the planned Parade of Lights was faced with Gale Force Winds. Earlier in the day the US Coast Guard advised the Harbor Patrol they would not be able to come up to assist due to the weather. At 4:30pm Friday afternoon and at the events skippers meeting, the event was determined to be unsafe and ultimately canceled due to the winds, which were still blowing in the upper 30 mph range with gusts in the low 40’s. After the meeting the Harbormaster and Harbor Patrol staff answered calls and met with the local businesses to inform them of the cancelation and answered any questions. The message delivered was we were canceling Friday’s parade, but all signs pointed to the event happening on Saturday. 24 hours later the weather could not have been more perfect. Calm winds and a slight chill, the night was what many have described as the best Parade of Lights ever. All Harbor Patrol staff was on duty and the Harbor experienced a record breaking crowd both on land and on the water. No significant problems were
21 encountered and the outflow of traffic was eased with the assistance of Ventura Police Department at the events conclusion.
Harbor Patrol Activity Log 12/23/2016: While most people were comfortable in their homes and enjoying the holidays our Harbor Patrol stood ready as a storm approached and a Small Craft Advisory was already in effect. I am giving you a quick summary via a timeline to show how our staff has to respond and adapt to our many responsibilities. Our normal shifts are 6am-4pm & 4pm-2am and have two people on duty to respond to both landside and water related calls for service. On this night both the Senior Harbor Patrol Officer and Harbormaster were called in for Emergency support.
4:00-6:00pm On duty. Checking Weather & Preparing Equipment for shift 6:00 Beginning Patrols & Surveying Potential Hazards 7:00 First signs of significant Roadway Flooding Navigator & Harbor Blvd 7:05 Harbor Patrol Officers divert traffic, Notify Hotel, & Notify City Police 8:05 911 Call: Water Rescue - 3 People Stuck In Submerged Car on Navigator 8:17 Subjects Rescued by Harbor Patrol Truck (No Injuries) 8:46 City Closed Schooner, Navigator, &Parts of Harbor Blvd (Significant Flooding) 8:58 Received report of Fishing Vessel “Saigon” Sinking 8 Miles Offshore 9:05 Harbor Patrol Officers Responding With Dewatering Equipment 9:15 Harbormaster & Senior Harbor Patrol Officer called – Emergency Call Back 9:30 On scene with F/V “Saigon” making way back to harbor under power 9:30 Provided escort back to Harbor & notified US Coast Guard of location 9:30 Harbor Patrol unable to dewater due to rough seas. Escorting Only 9:43 911 Call: Harbormaster responding to Medical Call @ Comedy Club 9:52 Harbor Patrol & “Saigon” entering the Harbor and enroute to fuel pier 10:10 Vessel Safely Secured to Fuel Pier - Dealing With Vessel & Crew 10:20 Harbor Patrol Identifies Fuel in F/V Saigon’s Bilge 10:25 Harbormaster bringing Absorbent Boom to F/V Saigon 10:30 Senior Harbor Patrolman off duty (Released once situation under control) 10:35 Coordinating with USCG (Pollution & Seaworthiness of F/V Saigon) 11:15 Clearing the F/V Saigon. 11:30 Harbor Patrol returned to Office & Harbormaster off duty. 11:45 Harbor Boulevard & Navigator - No Longer Flooded 12:00-2:00am Continued routine patrols & calls for service. (1.7” rain recorded)
While this call volume is above average, it is not uncommon for a number of calls to come in at the same time. Our staff trains and equips so that we are best prepared to provide the highest level of service to our community. This is only possible because of our small staff’s level of commitment to Ventura Harbor and its residents.
Boating Liability & Pollution Insurance Project: I have begun the task of surveying the local Marinas to determine the level of boaters insurance required by their tenants. I have identified that liability does not include pollution or salvage of vessels. These two issues typically have a high cost to mitigate and create a real hazard to the daily operations of our Harbor. The goal of this project is to determine the viability of requiring
22 both liability and pollution insurance for all vessels in our Harbor. Prior to making any recommendations, I plan to reach out to other Harbors and specifically identify if the requirement would put us at a competitive disadvantage. If viable, this would eliminate the unexpected high costs of pollution response or salvaging a vessel.
Harbor Patrol Vehicle Replacement: I have begun gathering information to select a replacement Harbor Patrol vehicle. I have contacted dealers and local Government Agencies to understand the process and to ensure we get the best deal available. I have established a dialog with the City of Ventura Fleet Services and was made aware they have recently awarded a bid to Ford of Ventura for two trucks for both the Police and Fire Department that match our needs. In the coming weeks I will be trying to see if we can piggyback on their bid as they have already gone through the process and picked this vendor due to the competitive pricing.
Harbor Patrol Boat-17 Engine Replacement: Having been awarded the California Division of Boating and Waterways Law Enforcement Equipment Grant, we will be moving forward with sending out the bids for Boat-17 two (2) engines & electronics for both Boat-17 & Boat-19. The goal will be to have the bid awarded and the installation of engines and electronics before the summer season begins.
Port District & Oxnard Harbor District: • Delivered a flyer on a special meeting regarding commercial lobster fishing. o The Port is looking to prohibit Commercial Fishing near Hueneme Harbor.
Port District & Ventura City Collaboration: • Hosted several dockside training events for Ventura City Fire • Continued to work with City on a Vessel Disposal Project • Working with City Fleet Services • Met with the City Parks & Rec to discuss Beach Soccer @ Harbor Cove
23 Harbor Patrol 911 Calls (11-16-16 to 01-16-17) CO / INHAL / HAZMAT NON EMD 1591 Spinnaker Dr 11/16/2016 1:15:36 PM UNKNOWN PROBLEM NON EMD 1902 Spinnaker Dr 11/16/2016 5:40:01 PM INVESTIGATION 1363 Spinnaker Dr 11/18/2016 5:31:57 PM COMMERCIAL FIRE ALARM 1050 Schooner Dr 11/19/2016 8:47:13 PM FALLS 1363 SPINNAKER DR 11/19/2016 8:49:57 PM TC Olivas Park Dr / E Harbor Bl 11/26/2016 6:46:27 PM MEDICAL ALARM 1215 Anchors Way 11/27/2016 11:35:48 AM OCEAN RESCUE LOW 559 Figueroa St 11/27/2016 4:20:44 PM FALLS NON EMD 1559 Spinnaker Dr 11/29/2016 8:24:57 PM UNKNOWN PROBLEM NON EMD E Harbor Blvd / Schooner Dr 11/30/2016 11:06:18 AM SICK PERSON NO CODE 1215 Anchors Way 12/2/2016 1:35:44 AM ABDOMINAL PAIN NO CODE 1215 Anchors Way 12/3/2016 5:35:14 AM OCEAN RESCUE LOW Mussel Shoals / Sb 101 Fwy 12/4/2016 11:34:23 AM UNCONSCIOUS/FAINT NON EMD 1559 Spinnaker Dr 12/6/2016 11:43:50 AM OCEAN RESCUE LOW Shoreline Dr / Figueroa St 12/9/2016 2:01:58 PM VEHICLE FIRE 1415 SPINNAKER DR 12/14/2016 8:55:51 AM TC (HEAVY RESCUE) E HARBOR BLVD / PENINSULA ST 12/14/2016 9:17:12 AM OVERDOSE/POISONING NON EMD S HARBOR BLVD / BARRACUDA WAY 12/16/2016 4:50:38 PM BREATHING PROBLEMS HIGH 1215 Anchors Way 12/17/2016 9:12:42 AM CHEST PAIN NON TRAUMA NON EMD 1363 Spinnaker Dr 12/20/2016 5:45:46 PM ENTRAPMENT NON VEHICLE 1080 NAVIGATOR DR 12/23/2016 8:05:50 PM ASSIST OTHER AGENCY 34°15'52.8"n / 119°24'03"w 12/23/2016 9:30:26 PM UNCONSCIOUS/FAINT HIGH 1559 SPINNAKER DR 12/23/2016 9:43:59 PM MEDICAL ALARM 1215 Anchors Way 12/24/2016 9:55:09 AM UNKNOWN PROBLEM NON EMD 1651 Anchors Way Dr 12/25/2016 1:41:42 AM LIFT ASSIST 1215 Anchors Way 12/25/2016 12:38:15 PM UNKNOWN PROBLEM NON EMD 1603 Anchors Way Dr 12/26/2016 12:14:09 PM OVERDOSE/POISONING NON EMD 1449 Spinnaker Dr 12/26/2016 5:28:13 PM UNKNOWN PROBLEM NON EMD Olivas Park Dr / Spinnaker Dr 12/27/2016 2:26:43 PM FALLS 1080 Navigator Dr 12/28/2016 10:21:05 PM TRAUMATIC INJURIES NO CODE 1080 Navigator Dr 12/31/2016 9:04:38 AM HEMORRHAGE/LACERATIONS HIGH Navigator Dr / Anchors Way 1/3/2017 5:30:04 PM HEMORRHAGE/LACERATIONS HIGH 1198 NAVIGATOR DR 1/3/2017 6:02:13 PM CARDIAC/RESP ARREST NON EMD 1591 SPINNAKER DR 1/6/2017 3:33:45 PM SICK PERSON NO CODE 1215 Anchors Way 1/9/2017 7:58:47 AM INVESTIGATION 1559 Spinnaker Dr 1/9/2017 9:40:48 AM OCEAN RESCUE LOW 1309 Beachmont St 1/9/2017 9:02:14 PM COMMERCIAL FIRE ALARM 1449 Spinnaker Dr 1/10/2017 9:11:05 AM BOAT FIRE (OPEN WATER) 559 Figueroa St 1/10/2017 10:39:39 AM COMMERCIAL FIRE ALARM 1050 Schooner Dr 1/10/2017 1:39:08 PM TC (HEAVY RESCUE) Harbor Blvd @ Olivas 1/11/2017 9:43:38 AM MEDICAL ALARM 1215 Anchors Way 1/11/2017 12:03:15 PM BEHAVIORAL EMERGENCY 1215 Anchors Way 1/14/2017 2:22:12 PM
Attachment 1 - Soundings
24 ATTACHMENT 1
25 VENTURA PORT DISTRICT DEPARTMENTAL STAFF REPORT Meeting Date: January 25, 2017 TO: Board of Port Commissioners FROM: Frank Locklear, Marina Manager / Technology SUBJECT: December 2016 Marina Report
I. Special Events On December 16th and 17th, three Dial Security officers were utilized by the marina to provide additional security for the Parade of Lights event. Fire department regulations mandated the additional personnel to provide a security perimeter for the fireworks show. This was the first year that this requirement was demanded by the Ventura Fire Department. We expect this demand will be repeated for any future events featuring fireworks.
On December 20th and 21st, the Ventura II conducted a tuna sale at our fish pier. This event is highly anticipated by the public. The event was well attended and all of the product was sold.
II. Ventura Harbor Village Marina Occupancy and Squid Production In December, the Ventura Harbor Village slip occupancy remained at 100%. December Squid production for Ventura Harbor remains lower than expected. Squid landings at all other harbors have been minimal, insuring most of this season’s squid quota remains not landed. The current squid season and catch quota continues until March 31st.
III. Technology A new weather station has been installed on the 1591 building roof top that is public accessible at https://weather.weatherbug.com/weather-forecast/now/ventura-ca-93003. The site presents comprehensive weather information in addition to access to the WeatherBug Ventura Harbor web camera which is also located on top of the 1691 building. WeatherBug apps are available for Android and Apple phones.
The Port District’s six emergency elevator telephones have been converted to a cellular connection at a savings of $100.00 per elevator per month.
Preparations are underway to complete a fiber optic cable connection to the 1691 building. Upgrades to the District’s security cameras at that location will be possible with the improved connection, which will allow us to eliminate the current rooftop antennas. The connection has been delayed due to rain, but is expected to be completed by the end of the January.
The adoption of the new Ring Central telephone system at the 1603 Port District Headquarters was delayed in December because of illness and the Christmas Holidays. The project is expected to be completed by the end of January.
26
27 VENTURA PORT DISTRICT DEPARTMENTAL STAFF REPORT Meeting Date: January 25, 2017 TO: Board of Port Commissioners FROM: Robin Baer, Property Manager SUBJECT: December 2016 Property Report
I. Tenant Improvements Underway 1) Milano’s Italian Restaurant – 1575 Spinnaker Drive, #100 – Construction to the new interior bar has been completed and in operation (see photos). 2) The Ultimate Escape Rooms --- 1591 Spinnaker Drive #117C – Construction is completed and they are open (see photos).
II. Leasing 1) Leasing Packet: • Distribution of leasing packets to prospective tenants and posted on website. • Posting ads online via Loopnet and in other publications. 2) Overview of FY2016/2017 leasing strategy goals: • Obtain monthly, quarterly and annual data from real estate organizations and sources; • Procured Co-star for real estate analytics; • Increase annual rental revenue to VPD at (or above) consumer price index; • Achieve vacancy rates for office, retail, restaurant below comparable properties in the City of Ventura • Attendance and participation with real estate, trade shows, webinars and networking events and others as applicable; • Annual memberships with leasing, real estate and development organizations; • Visit prospective tenant locations and meet with business owners.
III. Occupancy level at Harbor Village CATEGORY Harbor Harbor Harbor Harbor City * City * Vacancy Vacancy Available Available Vacancy Available Sq Ft % Sq Ft % % % Office 1,955 7% 1,955 7% 16.5% 24.1% Retail 0 0% 5,634 28.5% 7.4% 14.4% Restaurant 0 0% 0 0% 10.1% 13% *Based on comparable square footage
IV. November Sales Report The attached summary provides sales for three categories: restaurants, retail and charters. The reports compare the monthly sales for 2016 and 2015. They also include year-to-date comparisons. Restaurant and retail categories posted noteworthy increases in sales. For example, retail sales in November 2016 were 8.32% higher than November 2015 sales.
The year-to-date sales for November 2016 were up 2.72% from the same time last year. However, there was a decrease of 12.19% for Charters; this was mostly due to the Santa Cruz Island landing dock closed for Island Packers’ boat trips. The landing dock is now open; we anticipate seeing an increase in revenues going forward.
Attachment 1 – November Tenant Sales
28 MILANO’S RESTAURANT & BAR
ULTIMATE ESCAPE ROOMS
29
30 ATTACHMENT 1
31
BOARD OF PORT COMMISSIONERS JANUARY 25, 2017
CONSENT AGENDA ITEM A APPROVAL OF NEW RETAIL LEASE AGREEMENT FOR DECEMBER STORE & MORE
32 VENTURA PORT DISTRICT CONSENT AGENDA ITEM A BOARD COMMUNICATION Meeting Date: January 25, 2017 TO: Board of Port Commissioners FROM: Robin Baer, Property Manager SUBJECT: Retail Lease Agreement for December Store & More 1559 Spinnaker Drive #103
RECOMMENDATION: That the Board of Port Commissioners approve a new Retail Lease Agreement between the Ventura Port District dba Ventura Harbor Village and December Store & More for the premises located at 1559 Spinnaker Drive #103 consisting of a total of 400 square feet for a one-year term.
BACKGROUND AND DISCUSSION: December Store & More has been a tenant since November 2015. They are a specialty store selling handmade crafts by local artisans. They feature the best of each kind of art or craft and also offer locally made soaps, jewelry, scarfs, blankets, etc. They even have books by local authors and raise money for Ventura’s homeless animals.
FISCAL IMPACT: This new lease reflects current market rental rates for retail space in the complex. The annual occupancy cost for this tenant is $11,000. The minimum rent over the one year term is adjusted annually by 3% per year.
We look forward to continued future success with this tenant. Staff recommends the Board’s approval of the new lease transaction.
33
BOARD OF PORT COMMISSIONERS JANUARY 25, 2017
CONSENT AGENDA ITEM B APPROVAL OF NEW RETAIL LEASE AGREEMENT FOR SILHOUETTES SALON
34 VENTURA PORT DISTRICT CONSENT AGENDA ITEM B BOARD COMMUNICATION Meeting Date: January 25, 2017 TO: Board of Port Commissioners FROM: Robin Baer, Property Manager SUBJECT: Retail Lease Agreement for Silhouettes Salon 1591 Spinnaker Drive #117B
RECOMMENDATION: That the Board of Port Commissioners approve a new Retail Lease Agreement between the Ventura Port District dba Ventura Harbor Village and Silhouettes Salon for the premises located at 1591 Spinnaker Drive #117B consisting of a total of 761 square feet for a two-year term.
BACKGROUND AND DISCUSSION: The tenant has been with the Ventura Harbor Village since 2008 and would like to continue their occupancy within the Village located at 1591 Spinnaker Drive #117B
FISCAL IMPACT: This new lease reflects current market rental rates for retail space in the complex. The annual occupancy cost for this tenant is $20,752. The minimum rent over the two year term is adjusted annually by 3% per year.
We look forward to continued future success with this tenant. Staff recommends the Board’s approval of the new lease transaction.
35
BOARD OF PORT COMMISSIONERS JANUARY 25, 2017
CONSENT AGENDA ITEM C APPROVAL OF NEW OFFICE LEASE AGREEMENT FOR LINDA D. ANDREOTTI DBA COASTWIDE CORPORATION
36 VENTURA PORT DISTRICT CONSENT AGENDA ITEM C BOARD COMMUNICATION Meeting Date: January 25, 2017 TO: Board of Port Commissioners FROM: Robin Baer, Property Manager SUBJECT: Office Lease Agreement for Linda D. Andreotti dba Coastwide Corporation 1575 Spinnaker Drive #205/A
RECOMMENDATION: That the Board of Port Commissioners approve a new Office Lease Agreement between the Ventura Port District dba Ventura Harbor Village and Linda D. Andreotti dba Coastwide Corporation for the premises located at 1575 Spinnaker Drive #205/A consisting of a total of 1,326 square feet for a one-year term.
BACKGROUND AND DISCUSSION: Coastwide Corporation is a Real Estate Development company that has been a Village tenant since 2006. Coastwide Corporation also holds a General Building Contractor, Fire Protection Contractor and Plumbing license. They have projects throughout California and Arizona. They love the Ventura Harbor and would like to continue tenancy for another year prior to retiring their business.
FISCAL IMPACT: This new lease reflects current market rental rates for office space in the complex. The annual occupancy cost for this tenant is $32,000.
We look forward to continued future success with this tenant. Staff recommends the Board’s approval of the new lease transaction.
37
BOARD OF PORT COMMISSIONERS JANUARY 25, 2017
STANDARD AGENDA ITEM 1 APPROVAL OF FISCAL YEAR 2015 – 2016 AUDIT
38 ATTACHMENT 1
The Board of Port Commissioners of the Ventura Port District Ventura, California
We have audited the financial statements of Ventura Port District for the year ended June 30, 2016. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our engagement letter dated July 20, 2016 and in our letter on planning matters dated August 22, 2016. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the District are described in Note 1 to the financial statements. As discussed in Note 1D to the financial statements, in fiscal year 2015-2016, the District implemented Governmental Accounting Standards Board (GASB) Statement No. 72, “Fair Value Measurement and Application”. GASB Statement No. 72 requires the District to use valuation techniques which are appropriate under the circumstances and are either a market approach, a cost approach or income approach. GASB Statement No. 72 establishes a hierarchy of inputs used to measure fair value consisting of three levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs, and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. GASB Statement No. 72 also contains note disclosure requirements regarding the hierarchy of valuation inputs and valuation techniques that were used for the fair value measurements. There was no material impact on the District’s financial statements as a result of the implementation of GASB Statement No. 72. No other accounting policies were adopted and the application of other existing policies was not changed during the year ended June 30, 2016. We noted no transactions entered into by the District during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. - 1 - 2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange39 and San Diego Counties ATTACHMENT 1
Significant Audit Findings (Continued)
Qualitative Aspects of Accounting Practices (Continued)
The most sensitive estimates affecting the financial statements are: a. The estimate of the fair market value of investments which is based on market values obtained from outside sources. b. The estimate of the allowance for doubtful accounts receivable which is based on historical trends. c. The estimated useful lives of capital assets used for depreciation purposes which are based on industry standards. d. The annual required contributions, pension expense, net pension liability and corresponding deferred outflows of resources and deferred inflows of resources for the District’s public defined benefit plan with CalPERS which are based on actuarial valuations provided by CalPERS. e. The annual required contribution and actuarial accrued liability for the District’s other post-employment benefit plan which are based on actuarial assumptions and methods prepared by a third-party consultant.
We evaluated the key factors and assumptions used to develop these estimates in determining that they were reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements are reported in Note 3C regarding the District’s defined benefit pension plans, Note 3D regarding the District’s other postemployment healthcare benefits plan.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors’ report. We are pleased to report that no such disagreements arose during the course of our audit.
- 2 - 40 ATTACHMENT 1
Significant Audit Findings (Continued)
Management Representations
We have requested certain representations from management that are included in the management representation letter dated January 13, 2017.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the District’s financial statements or a determination of the type of auditors’ opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the District’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to management’s discussion and analysis, the schedule of proportionate share of the net pension liability and the schedule of contributions for the defined benefit pension plans, and the schedule of funding progress for other postemployment healthcare benefits, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
Restriction on Use
This information is intended solely for the use of the Board of Port Commissioners and management of the Ventura Port District and is not intended to be, and should not be, used by anyone other than these specified parties.
Irvine, California January 13, 2017
- 3 - 41 ATTACHMENT 2
VENTURA PORT DISTRICT
FINANCIAL STATEMENTS
WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
JUNE 30, 2016
42 ATTACHMENT 2
43 ATTACHMENT 2 VENTURA PORT DISTRICT
TABLE OF CONTENTS
June 30, 2016
Page Number
Independent Auditors’ Report 1
Management’s Discussion and Analysis (Required Supplementary Information) 3
Basic Financial Statements:
Statement of Net Position 15
Statement of Revenues, Expenses and Changes in Net Position 16
Statement of Cash Flows 17
Notes to Basic Financial Statements 19
Required Supplementary Information: 55
Schedule of Proportionate Share of the Net Pension Liability 56
Schedule of Contributions - Defined Benefit Pension Plans 57
Schedule of Funding Progress for Other Postemployment Health Care Benefits 58
Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 59
44 ATTACHMENT 2
45 ATTACHMENT 2
INDEPENDENT AUDITORS’ REPORT
The Board of Port Commissioners
of the Ventura Port District Ventura , California
Report on the Financial Statements
We have audited the accompanying financial statements of the Ventura Port District (the District), which comprise the statement of net position as of June 30, 2016 and the related statements of revenues, expenses, and changes in net position and cash flows for the year then ended, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements, as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the State Controller’s Minimum Audit Requirements for California Special Districts. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the District’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. - 1 - 2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange46 and San Diego Counties ATTACHMENT 2 Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Ventura Port District as of June 30, 2016, and the respective changes in its financial position and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matter
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedule of proportionate share of the net pension liability, the schedule of contributions - defined benefit pension plans, and the schedule of funding progress - other postemployment health care benefits, identified as Required Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the RSI in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during the audit of the basic financial statements. We do not express an opinion or provide any assurance on the RSI because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated January 13, 2017, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.
Irvine, California January 13, 2017
- 2 - 47 ATTACHMENT 2
VENTURA PORT DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
June 30, 2016
It is our pleasure to submit the Ventura Port District’s (District) Management’s Discussion and Analysis (MD&A) for the fiscal year ending June 30, 2016. This report was prepared pursuant to the guidelines set forth by the Government Accounting Standards Board (GASB) and sets forth an overview of the District’s financial activities and performance for the fiscal years ended June 30, 2016 and 2015. This analysis should be read in conjunction with the audited financial statements that follow this section.
District staff prepared this financial report in conjunction with an unmodified opinion issued by the independent audit firm White Nelson Diehl Evans LLP. This report consists of management’s representations concerning the finances of the District. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that has been established for this purpose. Because the cost of internal controls should not exceed the anticipated benefits, the objective is to provide reasonable, rather than absolute assurance that the financial statements are free of any material misstatements.
District Structure and Leadership
The Ventura Port District was established in April 1952 for the purpose of acquiring, constructing and operating a commercial and recreational boat harbor now known as the Ventura Harbor. The port was formed as per Sections 6200 to 6372 of the Harbor and Navigation Code of the State of California. The District’s legal boundaries encompass all of the City of San Buenaventura as well as some small areas outside the City limits. Construction was completed and Ventura Harbor commenced operations in June 1963.
Other than the 2.74 acre site owned by the Department of Interior, National Park Service, the District is the sole landowner within this multiple use harbor, with current property holdings of approximately 152 acres of land and 122 acres of water area, initially developed in the early 1960s. The harbor is home to many diverse businesses such as marinas for recreational and commercial vessels, commercial fishing offloading facilities, boat charters, a mobile home park, two hotels, a time share, a public launch ramp, two fuel stations, two full service boatyards, and a mixed use commercial development center.
The District is governed by a five-member Board of Port Commissioners, appointed by the City Council of the City of San Buenaventura, serving four-year terms without compensation.
Jim Friedman, Chairman Everard Ashworth, Vice Chairman Bruce E. Smith, Commissioner Nikos Valance, Commissioner Brian Brennan, Commissioner
Mission Statement
The Ventura Port District, home to Channel Island National Park, provides a safe and navigable harbor and a seaside destination that benefits residents, visitors, fishermen and boaters to enjoy Ventura Harbor’s exceptional facilities, events and services.
- 3 - 48 ATTACHMENT 2
VENTURA PORT DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) (UNAUDITED)
June 30, 2016
Financial Highlights
The District provides public services such as Harbor Patrol and a public launch ramp, which are traditionally associated with a port district. The District also contracts with the State Parks system for lifeguard services from May through September for approximately $50,000. In addition, the District offers long term ground leases (50 years) on certain parcels for private use and is the owner/operator of Ventura Harbor Village, a 32.67 acre commercial, office and marina complex located in the harbor.
. The District’s net position for June 30, 2016 increased 7.3% to $17,164,791 over the June 30, 2015 net position of $16,000,325. . Total revenues increased 13.6% to $9,402,478 during the fiscal year. . Total expenses increased 0.9% to $8,238,012 during the fiscal year
Overview of the basic financial statements
The District’s basic financial statements are comprised of three components: Financial statements, notes to the basic financial statements and required supplementary information. The financial statements consist of the following:
. Statement of Net Position . Statement of Revenues, Expenses and Changes in Net Position . Statement of Cash Flows
The District’s activities are accounted for in an enterprise fund. Enterprise funds are operated in a manner similar to private business in that the majority of the Districts revenues are generated through leases, fees and services to the public. These revenues are used to cover all operations, financing and infrastructure needs in the harbor.
The Statement of Net Position and the Statement of Revenues, Expenses and Changes in Net Position
The Statement of Net Position includes all of the District’s investments in resources (assets) and the obligations to creditors (liabilities). The difference between the District’s assets and deferred outflows of resources and its liabilities and deferred inflows of resources is reported as net position. Over time, increases and decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or declining. The Statement of Revenues, Expenses and Changes in Net Position presents information showing how the District’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are recognized on the accrual basis.
- 4 - 49 ATTACHMENT 2
VENTURA PORT DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) (UNAUDITED)
June 30, 2016
Statement of Net Position
The following condensed financial information provides an overview of the District’s financial position as of June 30, 2016 and 2015.
Summary of Net Position June 30, 2016 and 2015
Increase/ 2016 2015 (Decrease)% Assets: Current assets $ 9,119,312 $ 9,080,956 $ 38,356 0.4% Restricted assets 3,090,131 3,025,024 65,107 2.2% Capital assets, net 22,996,393 22,401,525 594,868 2.7% Total assets 35,205,836 34,507,505 698,331 2.0%
Deferred Outflows of Resources 682,808 550,294 132,514 24.1%
Total assets and deferred outflows 35,888,644 35,057,799 830,845 2.4%
Liabilities: Current & other liabilities 4,397,115 4,097,059 300,056 7.3% Long-term debt obligations 13,850,200 14,298,460 (448,260) -3.1% Total liabilities 18,247,315 18,395,519 (148,204) -0.8%
Deferred Inflows of resources 476,538 661,955 (185,417) -28.0%
Total liabilities and deferred inflows 18,723,853 19,057,474 (333,621) -1.8%
Net Position: Net investment in capital assets 9,440,821 8,327,179 1,113,642 13.4% Restricted assets 3,090,131 3,025,024 65,107 2.2% Unrestricted assets 4,633,839 4,648,122 (14,283) -0.3% Total net position $ 17,164,791 $ 16,000,325 $ 1,164,466 7.3%
- 5 - 50 ATTACHMENT 2
VENTURA PORT DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) (UNAUDITED)
June 30, 2016
Statement of Net Position (Continued)
The District’s net position at June 30, 2016 is $17,164,791. This is an increase of $1,164,466 over the June 30, 2015 net position of $16,000,325. Key changes in the statement of net position are as follows:
Current assets increased $38,356 for fiscal year 2016 due to an increase from normal operations for the year offset by the purchase of capital assets and equipment.
Restricted Assets increased $65,107 for fiscal year 2016 due to contributions made from two lease tenants to the restricted fisheries improvement fund. These contributions are a condition of their leases to help maintain the fisheries offloading areas in the Ventura Harbor Village. The funds are deposited with LAIF and earn interest quarterly. These contributions are classified as unearned revenue to be amortized as rent over the life of the leases.
The capital assets increased $594,868 during fiscal year 2016. This was the net effect of infrastructure renovations and equipment purchases offset by asset retirements and the annual amortization of the depreciation expenses. The capital assets are discussed in more detail later in this report.
Deferred outflows of resources increased by $132,514. This increase was the net effect of the change in value from three items required to be reported in this category.
. The first is the expensing of the annual amortization on the deferred amounts on bond refunding that resulted from the difference in the carrying value of refunded debt and its reacquisition price.
. The second change is related to pensions. This amount is the change to reflect the employer contributions made after the measurement date of the net pension liability applicable to the current audit year. The new value will be recognized as a reduction of the net pension liability in the next fiscal year.
. The third item is also related to pension. This change reflects the difference between the actual and the expected experience value of the pension.
Current & other liabilities increased by $300,056 in fiscal year 2016 to $4,397,115. This increase is the net effect of several factors grouped into this category:
. There was a decrease of $25,000 in accounts payable and other accrued expenses. This decrease was primarily due to the net effect of two factors. 1) There was an increase in accounts payable accrual from the work on construction projects being completed and not yet billed by the contractor, and 2) there was a decrease in the interest expense accrual as a result of the rate reset reduction on the Series 2008 and 2009 Certificates of Participation. In accrual based accounting, it is necessary to record the expense and the payable due at the time the work is completed.
. Unearned revenue increased $59,000 in fiscal year 2016 due to two tenants being required to make contributions to the fisheries improvement fund as discussed in restricted assets above. These payments are amortized as rent over the life of the leases.
- 6 - 51 ATTACHMENT 2
VENTURA PORT DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) (UNAUDITED)
June 30, 2016
Statement of Net Position (Continued)
. There was an increase of $109,000 in the OPEB (Other Post-Employment Benefits) liability as reflected in the most recent Alternative Measurement Method (AMM) actuarial review as of 7/1/2015. GASB 45 requires the District to update its AMM actuarial review every three years. The previous actuarial review was from 7/1/2012.
. There was an increase of 157,000 in pension liability. CalPERS prepares a guide for public agencies reflecting the methodology and pension amounts to be used for GASB 68 pension reporting. The District’s liability increased as a result of GASB 68 calculations.
Deferred inflows of resources were decreased by $185,417. This decrease was due to the net effect of the change in value of three items to be reported in this category related to pensions.
. The first reflects the change in the employer’s proportion of the pension and differences between the employer’s contributions and the employer’s proportionate share of contributions. These amounts will be amortized over a 3.8 year period.
. The second reflects the changes in the assumptions used for the current measurement. These amounts will be amortized over a 3.8 year period.
. The third item is the net differences between the actuarially assumed rate of return and the actual rate of return on plan investments of the pension plan fiduciary net position. This amount is amortized over five years.
Assets that are invested in capital assets, net of related debt, represent land, land improvements, construction in progress, harbor improvements, leasehold improvements, buildings, and equipment as reduced by the related debt service. The District uses these assets to provide facilities and services to the public.
The net investment in capital assets increased $1,113,642. This increase is the net effect of the increase in capital assets as explained previously (the net effect of infrastructure renovations and equipment purchases offset by asset retirements and the annual amortization of the depreciation expenses) being reduced by the annual principal payment on the related debt which in-turn reduced the amount of debt being netted against the capital assets.
Restricted assets are subject to external restrictions on how they may be used. As of June 30, 2016, there is $3,000,000 restricted for dredging activity as required by the Ellison Judgment and a balance of $90,131 in the restricted fisheries improvement reserve.
- 7 - 52 ATTACHMENT 2
VENTURA PORT DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) (UNAUDITED)
June 30, 2016
Statement of Net Position (Continued)
The restricted assets increased $65,107 primarily due to an increase in the fisheries improvement reserve as discussed previously. Two leases were negotiated, one in fiscal year 2015 and one in fiscal year 2016, which require the tenants to pay into a fisheries improvement reserve fund up to a maximum of $100,000 each during the term of their leases. These funds are restricted by the terms of the leases to be used for repairs and upkeep to the fish offloading complex areas in the Ventura Harbor Village, including the fish pier.
Unrestricted assets may be used to meet the District’s on-going obligations.
Statements of Revenues, Expenses and Changes in Net Position
The following table summarizes the District’s operations for fiscal years 2016 and 2015:
Summary of Reve nues, Expenses and Changes in Net Position Ye ars Ended June 30, 2016 and 2015
Increase/ 2016 2015 (Decrease)% Revenues: Operating revenues $ 8,105,274 $ 7,142,043 $ 963,231 13.5% Non-operating revenues 1,297,204 1,137,933 159,271 14.0% Total Revenues 9,402,478 8,279,976 1,122,502 13.6%
Expenses: Operating expenses before depreciation 6,571,210 6,326,968 244,242 3.9% Depreciation 995,930 986,294 9,636 1.0% Non-operating expenses 670,872 847,513 (176,641) -20.8% Total Exp enses 8,238,012 8,160,775 77,237 0.9%
Change in Net Position 1,164,466 119,201 1,045,265 876.9%
Net Position, Beginning of Year 16,000,325 15,881,124 119,201 0.8%
Net Position, End of Year $ 17,164,791 $ 16,000,325 $ 1,164,466 7.3%
- 8 - 53 ATTACHMENT 2
VENTURA PORT DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) (UNAUDITED)
June 30, 2016
Revenues
Total revenues increased 13.6% in fiscal year 2016 to $9,402,478. This represents a $1,122,502 increase from fiscal year 2015 revenue of $8,279,976. This increase was due to a number of factors:
Operating income increased $963,231 due to four primary factors:
. The District received $630,000 in appreciation rent from a master tenant as a lease requirement from the sale of their lease. This is a onetime receipt of income that infrequently occurs.
. Master tenant lease income increased $165,000, approximately 5% over fiscal year 2015. Rents received from these tenants are calculated based on percentages of their sales. Several tenants reported significant increases in their sales during the fiscal period.
. Harbor Village lease income increased $143,000. This increase is primarily attributed to an increase in restaurant tenant sales of which the District receives a rent percentage. . . Dry Storage income increased $29,000 due to a rate increase and an increase in occupancy.
Non-operating income increased $159,271 due to two primary factors:
. The District’s pro-rata share of County property taxes increased $48,000 due to an improvement in the housing market.
. Intergovernmental grants increased $108,000 primarily due to two factors. 1) The receipt of a grant through NOAA’s Sea Grant Program for an aquatic shellfish farming initiative program in fiscal year 2016 that was not received in fiscal year 2015, and 2) The receipt of dredging expense reimbursement income from the City of Ventura in fiscal year 2016 that was not received in fiscal year 2015. The City reimburses the District for their pro-rata share of the cost to dredge the stub-channel at the entrance of the Keys housing track every three years or so. There was virtually no change between the amounts received in grants from the Division of Boating and Waterways in fiscal year 2016 over that which was received in fiscal year 2015.
- 9 - 54 ATTACHMENT 2
VENTURA PORT DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) (UNAUDITED)
June 30, 2016
Revenues (Continued)
The following two charts show a comparison of revenues by source for each year. Lease revenues are by far the most significant source of revenues for the District, generally followed by property tax revenues. There has been very little percentage change from 2015 to 2016 in the sources of revenue.
Expenses
The expenses for fiscal year 2016 increased by $77,237 to $8,238,012. This represents a 0.9% increase over the fiscal year 2015 expenses of $8,160,775. This increase is attributed to several factors:
Operating expenses increased $244,242 due to the net effect of changes in five primary categories:
Professional services increased $17,000 due primarily to the net effect of two factors; 1) An increase of $47,000 in services pertaining to the aquatic shellfish farming initiative program study. These services were reimbursed by the NOAA grant. And 2) there was a decrease of $30,000 in services provided by real estate advisors. In Fiscal year 2015, Armstrong Real Estate Advisors were asked to evaluate existing land use in the harbor and design new use/concepts for future tenants. This was a onetime service in fiscal year 2015.
- 10 - 55 ATTACHMENT 2
VENTURA PORT DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) (UNAUDITED)
June 30, 2016
Expenses (Continued)
Repairs and maintenance expense increased $57,000 due to the net effect of four primary factors: 1) an increase of $12,000 in elevator repairs; 2) an increase of $11,000 in equipment rental due to the need to rent more heavy equipment than usual to clean up storm damage erosion on the beaches and streets from displaced sand; 3) there was an increase of $131,000 in tenant improvements due to lease negotiations with new tenants in Ventura Harbor Village; and 4) there was a decrease of $97,000 in accessibility enhancements because most of the enhancements completed in fiscal year 2016 qualified as capital asset improvements.
Dredging expenses increased $150,000 for fiscal year 2016 due to inner-harbor dredging of the stub channel at the entrance of the Keys housing track. This dredging is necessary every three years or so pending weather conditions. Some residents of the Keys have access to private slips outside their homes in channels that lead out to the ocean. The City of Ventura reimburses the District for their pro- rata share of the expense to keep this passage safe and navigable.
Utility expenses have decreased $25,000 primarily due to passing on of water sewage costs to the tenants that utilize these services such as restaurants and fisheries in fiscal year 2016.
The other expense category increased $32,000 primarily due to two factors: 1) an increase of $19,000 for additional summer lifeguard services in fiscal year 2016; and 2) an increase of $16,000 in Harbor Patrol operating supplies to replace aging electronics and hand held radios.
Non-operating expenditures decreased $176,641. This is primarily to a decrease in the category ‘loss on disposition of capital assets’. In fiscal year 2015 the District retired infrastructure architectural designs & plans of $197,000 that would not be completed due to financial constraints. The loss from this retirement was offset by a gain of $12,000 on the sale of a 150 ton boat lift. This type of disposition was not necessary in fiscal year 2016.
Capital Assets and Debt Administration
Capital Assets
The District’s capital assets, net of accumulated depreciation totaled $22,996,393 on June 30, 2016. This is $594,868 more than the June 30, 2015 balance of $22,401,525. This increase is due to the net effect of new infrastructure improvements and the purchase of equipment offset by asset dispositions and the current year’s depreciation expense.
- 11 - 56 ATTACHMENT 2
VENTURA PORT DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) (UNAUDITED)
June 30, 2016
Capital Assets (Continued)
The capital assets include land, harbor, building and leasehold improvements, equipment and construction in progress. The following table shows the change in capital assets for fiscal years 2016 and 2015.
Capital Assets, Net Years Ended June 30, 2016 and 2015
2016 2015 Increase/ (Decrease)%
Land $ 2,342,629 $ 2,342,629 $ - 0.0% Land Improvements* - 9,904,702 (9,904,702) -100.0% Buildings & Structures 19,705,040 18,385,650 1,319,390 7.2% Harbor Improvements* 14,557,892 4,637,166 9,920,726 100.0% Equipment 1,538,136 1,414,168 123,968 8.8% Construction in Progress 154,601 76,540 78,061 102.0% 38,298,298 36,760,855 1,537,443 4.2% Less: Accumulated depreciation (15,301,905) (14,359,330) (942,575) 6.6% Total capital assets $ 22,996,393 $ 22,401,525 $ 594,868 2.7%
*Land Improvements transferred to Harbor Improvements
Major improvement projects and equipment purchases in fiscal year 2016 were as follows: . Renovated portions of the Ventura Harbor Village parking lot for improved accessibility.
. Renovated the walking path throughout portions of Ventura Harbor Village shopping facility to improve accessibility.
. Renovated the roof systems for two Ventura Harbor Village buildings and renovated the tile roof portion only of a third Harbor Village building.
. Renovated the elevator in one of the Ventura Harbor Village buildings located at 1691 Spinnaker Drive.
. Purchased and installed a one ton derrick crane on the Commercial Fish Pier at Ventura Harbor Village.
. Fabricated and installed a permanent navigation style flag pole in front of the Ventura Port District headquarters building.
There were no major dispositions in fiscal year 2016 to note.
There were no significant capital commitments to report at June 30, 2016. Additional information on the District’s capital assets can be found in Note 2(c) of the basic financial statements.
- 12 - 57 ATTACHMENT 2
VENTURA PORT DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) (UNAUDITED)
June 30, 2016
Debt Administration
The District’s long-term debt balance at June 30, 2016 is $13,850,200. This is a decrease of $448,260 over the June 30, 2015 balance of $14,298,460. This decrease is due to the net effect of the paying down of principal on the outstanding debt offset by an increase in principal due to adding the costs related to the refinancing of the Department of Boating & Waterways’ notes payable to the new debt, certificates of participation Series 16.
The following table summarizes the changes in the District’s long-term debt obligations as of June 2016 and 2015:
Summary of Long-term Debt
Increase/ June 30, 2016 June 30, 2015 (decrease)% Amend #1 Refinance certificates of participation Series '08 $ 7,205,000 $ 7,655,000 $ (450,000) -5.9% Amend #1 Refinance certificates of participation Series '09 1,803,400 1,911,900 (108,500) -5.7% Refunding of DBW loans related to certificates of participation Series '16 4,841,800 - 4,841,800 100.0% Notes payable - 4,731,560 (4,731,560) -100.0%
Total long-term debt $ 13,850,200 $ 14,298,460 $ (448,260) -3.1%
Additional information on the District’s long-term debt can be found in Note 2(e) of the basic financial statements.
Economic Outlook
The economic outlook for the Ventura Port District is positive. The hotels and boatyards have increased sales and the demand for more restaurants and office space has improved; however, retail sales are still sluggish. The District is investing more money into infrastructure improvements such as roof systems, tenant improvement allowances and more ADA related improvements at Harbor Village. The occupancy levels for the marinas in the harbor continue to improve and with Ventura Isle Marina slated to renovate their marina in the near future we expect more revenues in this category.
Ventura Isle Marina through an assignment of lease is now under new management with Safe Harbor Marinas (SHM). SHM has presented a proposed dock and boat slip replacement plan to the District. Dock systems to be replaced include Docks G, H, I, L, & M. Improvements will also include new gangways and decorative gateways, parking lot and accessibility improvements. The proposed project is undergoing environmental review, with action by the VPD Board likely 1st quarter 2017. The plan will be subject to City and Coastal Commission approvals. The goal of the project is to modernize the marina, and increase boat slip occupancy.
- 13 - 58 ATTACHMENT 2
VENTURA PORT DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) (UNAUDITED)
June 30, 2016
The operating revenues are currently flat; however, developer Sondermann Ring Partners (SRP) exercised its option and executed a 50 year ground lease in October 2017. This has begun generating a new source of revenue to the District in the amount of $300,000 per year. SRP has mobilized for construction and obtained a grading permit. The construction will take 36 months; however, the project will over time increase the District’s rental revenue to approximately $1.2 million per year upon completion and stabilization of the project. This project will spur economic development throughout the harbor as a result of the 300 apartment units, 23,000 sq. ft. of commercial space and 140 slip recreational Marina associated with the project.
Requests for Information
This financial report is designed to provide a general overview of the District’s finances. If you have questions about this report or need additional financial information, contact the Accounting Manager, at (805) 642-8538 or 1603 Anchors Way Drive, Ventura, CA 93001.
- 14 - 59 ATTACHMENT 2 VENTURA PORT DISTRICT
STATEMENT OF NET POSITION
June 30, 2016
ASSETS: CURRENT ASSETS: Cash and cash equivalents $ 6,686,658 Restricted cash and cash equivalents 3,090,131 Investments 1,500,240 Accounts receivable, net 335,297 Due from other governments 46,552 Other receivables 152,957 Prepaid expenses 354,537 Inventories 43,071 TOTAL CURRENT ASSETS 12,209,443
NONCURRENT ASSETS: Capital assets not being depreciated 2,497,230 Capital assets being depreciated (net of accumulated depreciation) 20,499,163 TOTAL NONCURRENT ASSETS 22,996,393
TOTAL ASSETS 35,205,836
DEFERRED OUTFLOWS OF RESOURCES: Deferred amounts on refundings 294,628 Deferred amounts from pension plans 388,180 TOTAL DEFERRED OUTFLOWS OF RESOURCES 682,808
LIABILITIES: CURRENT LIABILITIES: Accounts payable 217,270 Interest payable 159,177 Accrued liabilities 141,643 Unearned revenue 199,905 Security deposits 176,147 Current portion of compensated absences 175,518 Current portion of long-term debt obligations 824,700 TOTAL CURRENT LIABILITIES 1,894,360
NONCURRENT LIABILITIES: Compensated absences 72,454 Net OPEB obligation 519,362 Net pension liability 2,735,639 Noncurrent portion of long-term debt obligations 13,025,500 TOTAL NONCURRENT LIABILITIES 16,352,955
TOTAL LIABILITIES 18,247,315
DEFERRED INFLOWS OF RESOURCES: Deferred amounts from pension plans 476,538
NET POSITION: Net investment in capital assets 9,440,821 Restricted for dredging 3,000,000 Restricted for fisheries complex 90,131 Unrestricted 4,633,839
TOTAL NET POSITION $ 17,164,791
See accompanying notes to basic financial statements. - 15 - 60 ATTACHMENT 2 VENTURA PORT DISTRICT
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
For the year ended June 30, 2016
OPERATING REVENUES: Leases: General $ 5,493,434 Harbor Village slips 923,751 Fishing 198,793 Boat yard 360,074 Charter 331,577 Tenant reimbursements 399,204 Dry storage 113,371 Other 285,070 TOTAL OPERATING REVENUES 8,105,274
OPERATING EXPENSES: Administration 168,964 Salaries and benefits 3,482,185 Merchant promotion 275,938 Professional services 567,733 Depreciation 995,930 Repairs and maintenance 869,597 Harbor dredging 371,564 Utilities 315,449 Insurance 265,268 Other 254,512 TOTAL OPERATING EXPENSES 7,567,140
OPERATING INCOME 538,134
NONOPERATING REVENUES (EXPENSES): Taxes 1,090,940 Investment income 52,549 Intergovernmental grants 153,715 Loss on disposition of capital assets (2,626) Interest expense (668,246) TOTAL NONOPERATING REVENUES (EXPENSES) 626,332
CHANGES IN NET POSITION 1,164,466
NET POSITION - BEGINNING OF YEAR 16,000,325
NET POSITION - END OF YEAR $ 17,164,791
See accompanying notes to basic financial statements. - 16 - 61 ATTACHMENT 2 VENTURA PORT DISTRICT
STATEMENT OF CASH FLOWS
For the year ended June 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from tenants $ 7,882,182 Cash received from others 222,709 Cash paid to employees (3,433,899) Cash paid for goods and services (2,937,633)
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,733,359
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Taxes received 1,090,940 Receipts from other governments 459,327
NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES 1,550,267
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from issuance of debt 4,841,800 Acquisition and construction of capital assets (1,593,424) Principal payments on long-term debt (5,290,060) Interest payments on related debt (952,973)
NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES (2,994,657)
CASH FLOWS FROM INVESTING ACTIVITIES: Interest received 46,405
NET CASH PROVIDED BY INVESTING ACTIVITIES 46,405
NET INCREASE IN CASH AND CASH EQUIVALENTS 335,374
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 9,441,415
CASH AND CASH EQUIVALENTS - END OF YEAR $ 9,776,789
RECONCILIATION OF CASH AND CASH EQUIVALENTS TO STATEMENT OF NET POSITION: Cash and cash equivalents $ 6,686,658 Restricted cash and cash equivalents 3,090,131 $ 9,776,789
See accompanying notes to basic financial statements. (Continued) - 17 - 62 ATTACHMENT 2 VENTURA PORT DISTRICT
STATEMENT OF CASH FLOWS (CONTINUED)
For the year ended June 30, 2015
RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating income $ 538,134 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 995,930 Amortization of deferred amounts from pension plans (58,363) Changes in operating assets and liabilities: (Increase) decrease in assets and deferred outflows of resources: Accounts receivable 2,850 Other receivables (62,361) Prepaid expenses (221) Inventories (7,825) Deferred amounts from pension plans (390,415) Increase (decrease) in liabilities and deferred inflows of resources: Accounts payable 62,577 Accrued liabilities 96,405 Unearned revenue 59,128 Security deposits 12,383 Compensated absences 17,305 Net OPEB obligation 108,852 Net pension liability 483,799 Deferred amounts from pension plans (124,819)
Total adjustments 1,195,225
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 1,733,359
NONCASH CAPITAL AND FINANCING ACTIVITIES: Amortization on deferred amount on debt refunding $ 70,514
Retirement of capital assets $ 2,626
NONCASH INVESTING ACTIVITY: Unrealized gain on investments $ 6,750
See accompanying notes to basic financial statements. - 18 - 63 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2016
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A. Reporting Entity:
The Ventura Port District (District) was organized under Sections 6200 to 6372 of the Harbor and Navigation Code of the State of California on April 15, 1952, for the purpose of acquiring, constructing, and operating a small boat harbor now known as Ventura Harbor. The District is governed by a board of five commissioners appointed by the District Council of the District of San Buenaventura. They serve for a term of four years without compensation. The Board of Port Commissioners appoints legal counsel, an auditor, and a general manager to implement board policies and direct operational aspects of the harbor.
The District receives a pro rata share of the general tax levy from the County of Ventura. The District also has the power of eminent domain.
The accounting policies of the Ventura Port District conform to generally accepted accounting principles as applicable to governmental units.
The financial statements present the District and its component unit, an entity for which the District is considered to be financially accountable. A blended component unit, although a legally separate entity is, in substance, part of the District’s operations and data from this unit is combined with data of the District. The blended component unit has a June 30 year-end. The District had no discretely presented component units. The following entity is reported as a blended component unit.
The Ventura Port District Public Facilities Corporation (Corporation) was formed and organized in 1992 as a nonprofit public benefit corporation pursuant to the laws of the State of California. The District’s Board of Port Commissioners acts as the governing board of the Corporation. The Corporation was formed for the purpose of financing and owning certain improvements on land leased from the District consisting of a portion of a multiple-use center and marina, commonly referred to as “Ventura Harbor Village”. Separate financial statements are not prepared for the Corporation.
B. Basis of Presentation:
The basic financial statements (i.e., statement of net position, statement of revenues, expenses, and changes in net position, and statement of cash flows) report information on all of the activities of the District.
- 19 - 64 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
B. Basis of Presentation (Continued):
The District’s activities are accounted for in an enterprise fund. An enterprise fund is a proprietary-type fund used to account for operations (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The District applies all Governmental Accounting Standards Board (GASB) pronouncements.
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.
C. Measurement Focus and Basis of Accounting:
“Measurement focus” is a term used to describe which transactions are recorded within the various financial statements. “Basis of accounting” refers to when transactions are recorded regardless of the measurement focus applied. The accompanying financial statements are reported using the “economic resources measurement focus” and the “accrual basis of accounting”. Under the economic resources measurement focus, all assets, deferred outflows of resources, liabilities, and deferred inflows of resources (whether current or noncurrent) associated with these activities are included on the statement of net position. The statement of revenues, expenses, and changes in net position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
- 20 - 65 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
C. Measurement Focus and Basis of Accounting (Continued):
Enterprise funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services. The principal operating revenues of the District are lease revenues. Operating expenses include costs of providing services in relation to the leased properties, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted resources first and then use unrestricted resources as needed.
D. New Accounting Pronouncements:
Current-Year Standards
In fiscal year 2015-2016, the District implemented GASB Statement No. 72, “Fair Value Measurement and Application”. GASB Statement No. 72 requires the District to use valuation techniques that are appropriate under the circumstances and are either a market approach, a cost approach, or an income approach. GASB Statement No. 72 establishes a hierarchy of inputs used to measure fair value consisting of three levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. GASB Statement No. 72 also contains note disclosure requirements regarding the hierarchy of valuation inputs and valuation techniques that were used for the fair value measurements. There was no material impact on the District’s financial statements as a result of the implementation of GASB Statement No. 72.
GASB Statement No. 73, “Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68”, was required to be implemented in the current fiscal year, except for those provisions that address employer and governmental nonemployer contributing entities for pensions that are not within the scope of GASB Statement No. 68, is effective for periods beginning after June 15, 2016, and did not impact the District.
GASB Statement No. 76, “The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments”, was required to be implemented in the current fiscal year and did not impact the District. - 21 - 66 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
D. New Accounting Pronouncements (Continued):
Current-Year Standards (Continued)
GASB Statement No. 79, “Certain External Investment Pools and Pool Participants”, was required to be implemented in the current fiscal year, except for certain provisions on portfolio quality, custodial credit risk, and shadow pricing, which are effective for periods beginning after December 15, 2015, and did not impact the District.
GASB Statement No. 82, “Pension Issues an Amendment of GASB Statement No. 67, No. 68 and No. 73”, changed the measurement of covered payroll reported in required supplementary information and has been early implemented.
Pending Accounting Standards
GASB has issued the following statements, which may impact the District’s financial reporting requirements in the future:
GASB 74 - “Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans”, effective for periods beginning after June 15, 2016.
GASB 75 - “Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions”, effective for periods beginning after June 15, 2017.
GASB 77 - “Tax Abatement Disclosure”, effective for periods beginning after December 15, 2015.
GASB 78 - “Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans”, effective for periods beginning after December 15, 2015.
GASB Statement No. 79, “Certain External Investment Pools and Pool Participants”, contains certain provisions on portfolio quality, custodial risk, and shadow pricing, effective for periods beginning after December 15, 2015.
GASB 80 - “Blending Requirements for Certain Component Units”, effective for periods beginning after June 15, 2016.
GASB 81 - “Irrevocable Split-Interest Agreements”, effective for periods beginning after December 15, 2016.
- 22 - 67 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
E. Deferred Outflows/Inflows of Resources:
In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to future periods and will not be recognized as an outflow of resources (expense/expenditure) until that time. The District has three items that qualify for reporting in this category. The first item is a deferred outflow related to amounts on refunding that resulted from the difference in the carrying value of refunded debt and its reacquisition price. This item is deferred and amortized over the life of the refunding debt. The second item is a deferred outflow related to pensions. This amount is equal to employer contributions made after the measurement date of the net pension liability. This amount will be recognized as a reduction of the net pension liability next fiscal year. The third item is a deferred outflow related to pensions which is equal to the differences between actual and expected experience. This amount is amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided pensions through the plan, which is 3.8 years.
In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The District has three items that qualify for reporting in this category. The first and second items are deferred inflows related to pensions for the change in employer’s proportion and differences between the employer’s contributions and the employer’s proportionate share of contributions and for changes in assumptions. These amounts are amortized over a closed period equal to the average of the expected remaining services lives of all employees that are provided with pensions through the plans, which is 3.8 years. The third item is a deferred inflow related to pensions resulting from the net differences between projected and actual earnings on plan investments of the pension plan fiduciary net position. This amount is amortized over five years.
F. Assets, Liabilities, and Net Position:
Cash and Cash Equivalents
For the purposes of the statement of cash flows, the District considers cash on hand and in the bank, money market funds, cash held and invested by the County Treasurer, and the pooled funds held by the State of California - Local Agency Investment Fund (LAIF), which are readily convertible to known amounts of cash, to be cash and cash equivalents.
Cash and cash equivalents, as reported in the statement of cash flows, include both restricted and unrestricted amounts. - 23 - 68 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
F. Assets, Liabilities, and Net Position (Continued):
Investments
Investments are stated at fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Accounts Receivable
The District grants unsecured credit to its customers. Bad debts are accounted for by the reserve method, which establishes an allowance for doubtful accounts based upon historical losses and a review of past due accounts.
Inventories
Inventories consist primarily of materials and supplies used in the general maintenance of vehicles, boats, and leased land. They are valued at cost using the first-in, first-out method.
Capital Assets
The District defines capital assets as tangible property having a minimum value of $5,000 ($10,000 for buildings, improvements, and infrastructure) that has a life expectancy longer than one year. All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets are valued at their estimated fair value on the date donated.
- 24 - 69 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
F. Assets, Liabilities, and Net Position (Continued):
Capital Assets (Continued)
Depreciation has been provided over estimated useful lives using the straight-line method. The estimated useful lives are as follows:
Harbor improvements 5 - 50 years Leasehold improvements 5 - 50 years Buildings and structures 5 - 50 years Boats 3 - 10 years Trucks 3 - 10 years Equipment 3 - 10 years Signs 5 years
Property Taxes Receivables
Secured property taxes are attached as an enforceable lien on property as of January 1. Taxes are levied based on a July 1 to June 30 fiscal year. Taxes are due in two installments on November 1 and February 1 and become delinquent after December 10 and April 10, respectively. Unsecured property taxes are payable in one installment on or before August 31. The County of Ventura bills and collects the taxes for the District. Tax revenues are recognized by the District in the year levied. Property tax receivables are adjusted to their net realizable values by deducting any estimated uncollectible amounts reported to the District.
Compensated Absences
District employees earn vacation and sick leave in accordance with the personnel policies of the District. The liability for vested vacation and sick leave is recorded as an expense when earned.
Net Position
In the statement of net position, net position is categorized as net investment in capital assets, restricted and unrestricted.
Net investment in capital assets - This category groups all capital assets into one component of net position. Deferred amounts on refundings increase the balance in this category. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of these assets reduce the balance in this category.
- 25 - 70 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
F. Assets, Liabilities, and Net Position (Continued):
Net Position (Continued)
Restricted - This category presents external restrictions imposed by creditors, grantors, contributors, or laws or regulations of other governments and restrictions imposed by law or judgment. At June 30, 2016, the restricted assets are $3,090,131, of which $3,000,000 is restricted for dredging of the harbor by a court judgment against the District in 1979, and $90,131 is restricted by lease agreement for facility maintenance on the fisheries complex.
Unrestricted - This category represents assets of the District not restricted for any project or other purpose.
G. Operating Leases:
The District leases parcels of land within the harbor. The lessees develop the parcels and pay rent to the District. The leases are primarily for a period of 3 - 50 years.
Most of the lease agreements provide for future minimum lease payments with additional rentals contingent upon sales volumes of the lessees. Future minimum lease payments are subject to periodic renegotiation.
The rent paid to the District by each lessee is the greater of the established minimum annual rent for each parcel or rent computed as a percentage of the lessee’s gross revenues. The level of income received by the District is dependent upon the success of the businesses operating in the Ventura Harbor.
H. Pensions:
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions and pension expense, information about the fiduciary net position of the District’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position has been determined on the same basis as it is reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
- 26 - 71 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
2. DETAILED NOTES:
A. Cash and Investments:
Cash and Investments
Cash and investments as of June 30, 2016, are reported in the statement of net position as follows:
Cash and cash equivalents $ 6,686,658 Restricted cash and cash equivalents 3,090,131 Investments 1,500,240
Total cash and investments $ 11,277,029
Cash and investments as of June 30, 2016, consist of the following:
Demand accounts (bank balance) $ 262,871 Less outstanding checks (90,149) Book balance 172,722 Petty cash 1,307 Total deposits and petty cash 174,029
Investments: State of California Local Agency Investment Fund 9,585,945 U.S. Government-Sponsored Agency Securities 1,500,240 Ventura County Treasury Pool 16,815 Total investments 11,103,000
Total cash and investments $ 11,277,029
Restricted Cash and Cash Equivalents
A portion of cash and cash equivalents as of June 30, 2016, is considered to be restricted for the following purposes:
Dredging pursuant to settlement agreement $ 3,000,000 Facility maintenance pursuant to lease agreement 90,131
Total $ 3,090,131
- 27 - 72 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
2. DETAILED NOTES (CONTINUED):
A. Cash and Investments (Continued):
Investments Authorized by the California Government Code and the District’s Investment Policy
The District’s investment policy authorizes an investment in all investments authorized under provisions of California Government Code Section 53601. The District’s investment policy is not more restrictive than the California Government Code.
The table below identifies the investment types that are authorized for the District by the California Government Code. The table also identifies certain provisions of the California Government Code that address interest rate risk, credit risk, and concentration of credit risk. The table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the District, rather than the general provisions of the California Government Code or the District’s investment policy.
Percentage Maximum Maximum of Investment Authorized Investment Type Maturity Portfolio * in One Issuer U.S. Treasury Obligations 5 years None None U.S. Government-Sponsored Agency Securities 5 years None None State of California Obligations 5 years None None CA Local Agency Obligations 5 years None None Negotiable Certificates of Deposit 5 years 30% 5% CD Placement Service 5 years 30% None Bankers’Acceptances 180 days 40% 30% Repurchase Agreements 1 year None None Commercial Paper 270 days 25% 10% Medium-term Notes 5 years 30% None California Local Agency Investment Fund (LAIF) N/A None None County Pooled Investment Funds N/A None None Joint Powers Authority Pool N/A None None Mutual Funds and Money Market Mutual Funds N/A 20% 10%
* - Excluding amounts held by bond trustee that are not subject to California Government Code restrictions.
- 28 - 73 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
2. DETAILED NOTES (CONTINUED):
A. Cash and Investments (Continued):
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates.
Information about the sensitivity of the fair values of the District’s investments to market interest rate fluctuations is provided by the following table, which shows the distribution of the District’s investments by maturity at June 30, 2016:
Remaining Maturity (in Months) 12 Months 13 - 24 25 - 60 Investment Type or Less Months Months Total LAIF $ 9,585,945 $ - $ - $ 9,585,945 United States Government Sponsored Agency Securities (1) - 1,500,240 - 1,500,240 Ventura County Treasury Pool 16,815 - - 16,815 $ 9,602,760 $ 1,500,240 $ - $ 11,103,000
(1) All securities have call features by the issuer that are available at June 30, 2016.
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. LAIF does not have a rating provided by a nationally recognized statistical rating organization. The District’s U.S. Government Sponsored Agency Securities had ratings, by Standard & Poor’s, of AA+ at June 30, 2016. The Ventura County Treasury Pool had a Standard & Poor’s rating of AAAf at June 30, 2016.
Concentration of Credit Risk
The investment policy of the District contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The District’s investment in the following U.S. Government Sponsored Agency Securities represents investments in one issuer that are 5% or more of the District’s total investments:
Federal National Mortgage Association Securities $ 1,500,240
- 29 - 74 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
2. DETAILED NOTES (CONTINUED):
A. Cash and Investments (Continued):
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California Government Code and the District’s policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure District deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
As of June 30, 2016, all of the District’s deposits with financial institutions were covered by federal depository insurance limits.
The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the District’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. Investments are exposed to custodial credit risk if the securities are uninsured, are not registered in the name of the District, and are held by either the counterparty, or the counterparty’s trust department or agent but not in the District’s name. At June 30, 2016, the District does not have any investments that are exposed to custodial credit risk.
Investment in State Investment Pool
The District is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the District’s investment in this pool is reported in the accompanying financial statements at amounts based upon the District’s pro rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.
- 30 - 75 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
2.DETAILED NOTES (CONTINUED):
A. Cash and Investments (Continued):
Fair Value Measurements
The District categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the relative inputs used to measure the fair value of the investments. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
The three levels of the fair value hierarchy are described as follows:
Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets in active markets that the District has the ability to access.
Level 2: Inputs to the valuation methodology include: Quoted prices for similar assets in active markets; Quoted prices for identical or similar assets in inactive markets; Inputs other than quoted prices that are observable for the asset; Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Unobservable inputs reflect the District’s own assumptions about the inputs market participants would use in pricing the asset (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the District’s own data.
The asset’s level within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The determination of what constitutes observable inputs requires judgment by the District’s management. District management considers observable data to be that market data that is readily available, regularly distributed or updated, reliable, and verifiable, not proprietary, and provided by multiple independent sources that are actively involved in the relevant market.
The categorization of an investment within the hierarchy is based upon the relative observability of the inputs to its fair value measurement and does not necessarily correspond to District management’s perceived risk of that investment. - 31 - 76 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
2. DETAILED NOTES (CONTINUED):
A. Cash and Investments (Continued):
Fair Value Measurements (Continued)
The methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
When available, quoted prices are used to determine fair value. When quoted prices in active markets are available, investments are classified within Level 1 of the fair value hierarchy. When quoted prices in active markets are not available, fair values are based on evaluated prices received by the District’s asset manager from a third-party service provider.
The following is a description of the recurring valuation methods and assumptions used by the District to estimate the fair value of its investments.
For a large portion of the District’s portfolio, the District’s asset manager applies its leveling methodology across all securities in a specific sector (i.e., U.S. Government-Sponsored Agency Securities). Inputs to the pricing models are based on observable market inputs in active markets.
The District has no investments categorized in Level 3. When valuing Level 3 securities, the inputs or methodology is not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy.
Quoted Observable Unobservable Prices Inputs Inputs Level 1 Level 2 Level 3 Total U.S. Government-Sponsored Agency Securities $ - $ 1,500,240 $ - $ 1,500,240
Total leveled investments $ - $ 1,500,240 $ - 1,500,240
Local Agency Investment Fund* 9,585,945 Venture County Treasury Pool* 16,815 Total investment portfolio $ 11,103,000
* Not subject to fair value measurement hierarchy disclosure requirement.
- 32 - 77 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
2. DETAILED NOTES (CONTINUED):
B. Accounts Receivable, Net:
As of June 30, 2016, accounts receivable, net consist primarily of lease receivables of $370,689 with an allowance for uncollectible accounts of $35,392.
C. Capital Assets:
A summary of changes in the capital assets for the year ended June 30, 2016 is as follows:
Balance at Balance at July 1, 2015 Additions Deletions Transfers June 30, 2016 Capital assets, not being depreciated: Land $ 2,342,629 $ - $ - $ - $ 2,342,629 Land improvements 9,904,702 - - (9,904,702) - Construction in progress 76,540 141,921 (63,860) - 154,601 Total capital assets, not being depreciated 12,323,871 141,921 (63,860) (9,904,702) 2,497,230
Capital assets, being depreciated: Buildings and structures 16,640,613 823,669 (8,730) - 17,455,552 Equipment 1,414,168 123,968 - - 1,538,136 Harbor improvements 4,637,166 16,024 - 9,904,702 14,557,892 Leasehold improvements 1,745,037 549,747 (45,296) - 2,249,488 Total capital assets, being depreciated 24,436,984 1,513,408 (54,026) 9,904,702 35,801,068
Less accumulated depreciation (14,359,330) (995,930) 53,355 - (15,301,905)
Total capital assets, being depreciated, net 10,077,654 517,478 (671) 9,904,702 20,499,163
Total capital assets, net $ 22,401,525 $ 659,399 $ (64,531) $ - $ 22,996,393
Depreciation expense was $995,930 for the year ended June 30, 2016.
D. Unearned Revenue:
Unearned revenue represents lease rent amounts to be credited to future years’ rent per the terms of leases executed between lessees and the District. Unearned revenue totaled $199,905 for the year ended June 30, 2016. - 33 - 78 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
2. DETAILED NOTES (CONTINUED): E. Long-Term Liabilities: The following is a summary of changes in long-term liabilities for the year ended June 30, 2016:
Balance Balance Due July 1, June 30, Within 2014 Additions Deletions 2015 One Year 2008 Refunding certificates of participation $ 7,655,000 $ - $ (450,000) $ 7,205,000 $ 505,500 2009 Refunding certificates of participation 1,911,900 -(108,500) 1,803,400 125,200 2016 Refunding certificates of participation - 4,841,800 - 4,841,800 194,000 Notes payable 4,731,560 -(4,731,560) - - Net OPEB obligation (Note 3D) 410,510 108,852 - 519,362 - Compensated absences 230,667 410,391 (393,086) 247,972 175,518 Total $ 14,939,637 $ 5,361,043 $ (5,683,146) $ 14,617,534 $ 1,000,218
2008 Refunding Certificates of Participation
On June 25, 2008, the District issued $10 million Refunding Certificates of Participation Series 2008 with an interest rate of 4.43% to advance a partial refund of $10.805 million of outstanding Series 1998 bonds. The defeased Series 1998 bonds have been paid in full. On February 1, 2016, the District reset the interest rate to 3.2% by paying a $72,050 prepayment price. As a result, the District reduced its total debt service payments by $610,078 and obtained an economic gain (difference between the present values of the debt service payments on the old and new debt) of $503,362.
The new annual debt service requirements on these 2008 Refunding Certificates of Participation are as follows:
Year Ending June 30, Principal Interest Total 2017 $ 505,500 $ 222,472 $ 727,972 2018 520,600 206,054 762,654 2019 535,400 189,158 724,558 2020 554,600 171,718 726,318 2021 568,500 153,148 722,248 2022 - 2026 3,131,100 478,668 3,609,768 2027 - 2028 1,389,300 44,772 1,434,072 Total $ 7,205,000 $ 1,466,590 $ 8,671,590 - 34 - 79 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
2. DETAILED NOTES (CONTINUED):
E. Long-Term Liabilities (Continued):
2009 Refunding Certificates of Participation
On March 12, 2009, the District issued $2,477,200 Refunding Certificates of Participation Series 2009 with an interest rate of 4.80% to advance a refund of $2,565,000 of outstanding Series 1998 bonds with an average interest rate of 6.375%. The defeased Series 1998 bonds have been paid in full. On February 1, 2016, the District reset the interest rate to 3.2% by paying a $18,034 prepayment price. As a result, the District reduced its total debt service payments by $200,416 and obtained an economic gain (difference between the present values of the debt service payments on the old and new debt) of $165,373.
The annual debt service requirements on these Refunding Certificates of Participation are as follows:
Year Ending June 30, Principal Interest Total 2017 $ 125,200 $ 55,705 $ 180,905 2018 129,300 51,633 180,933 2019 133,500 47,428 180,928 2020 137,900 43,086 180,986 2021 142,400 38,601 181,001 2022 - 2026 784,500 120,467 904,967 2027 - 2028 350,600 11,310 361,910 Total $ 1,803,400 $ 368,230 $ 2,171,630
- 35 - 80 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
2. DETAILED NOTES (CONTINUED):
E. Long-Term Liabilities (Continued):
2016 Refunding Certificates of Participation
On March 1, 2016, the District issued a $4,841,800 Refunding Certificates of Participation Series 2016 with an interest rate of 3.30% to currently refund the $4,731,560 notes payable to the State of California Department of Boating and Waterways. The defeased notes payable have been paid in full. The District refunded the notes payable to reduce its total debt service payments by $1,931,070 and to obtain an economic gain (difference between the present values of the debt service payments on the old and new debt) of $635,083. In addition, the term of the debt was reduced by 13 years.
Year Ending June 30, Principal Interest Total 2017 $ 194,000 $ 131,549 $ 325,549 2018 179,200 151,899 331,099 2019 185,200 145,936 331,136 2020 191,300 139,775 331,075 2021 198,200 133,405 331,605 2022 - 2026 1,092,300 563,769 1,656,069 2027 - 2031 1,286,500 369,512 1,656,012 2032 - 2036 1,515,100 140,752 1,655,852 Total $ 4,841,800 $ 1,776,597 $ 6,618,397
Debt Service Coverage on Certificates of Participation
The 2008, 2009, and 2016 Certificates of Participation are secured by the District’s pledge of all net revenues. Net revenue is defined as all operating and nonoperating revenue except for grant revenue less all operating and nonoperating expenses excluding depreciation and interest. A comparison of pledged net revenues to current-year debt service as of June 30, 2016, is as follows:
Net revenues $ 2,718,491 Debt services - current year 976,816
The District exceeds the debt service coverage requirements for the 2008, 2009, and 2016 Certificates of Participation.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION:
A. Operating Leases:
The District receives the majority of its operating revenues in the form of rent payments from lessees of the parcels of land in Ventura Harbor. The period of these noncancelable leases could range from 3 to 50 years.
Future minimum rent payments due to the District for the next five years are as follows:
Year Ending June 30, Amount 2017 $ 3,558,960 2018 3,087,919 2019 2,455,554 2020 2,354,514 2021 2,330,418 $ 13,787,365
The net carrying value of related assets under the leases is $3,627,366 for the year ended June 30, 2016.
Rental income of $7,820,204 for the year ended June 30, 2016, includes contingent rental income of $1,959,500.
B. Dredging Reserve:
As the result of a litigation settlement during the year ended June 30, 1979, the District is required to maintain a $3,000,000 reserve to be utilized to maintain the channel from the open sea to the Ventura Keys. Should the reserve fall below $3,000,000, the District is required to budget and fund annually 25% of total operating revenue of the prior year until such time as the reserve balance reaches $3 million again.
The District maintains a separate restricted general ledger cash account for dredging related expenses. As of June 30, 2016, this account had a balance of $3,000,000.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
C. Pension Plans:
1). General Information about the Pension Plans:
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the District’s separate Safety (police) and Miscellaneous (all other) Employee Pension Plans (Plans), which are cost-sharing multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plans are established by state statute and District resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions, and membership information that can be found on the CalPERS website.
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 nonduty 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.
The Plans’ provisions and benefits in effect at June 30, 2016, are summarized as follows:
Miscellaneous Prior to On or After Hire date January 1, 2013 January 1, 2013 Benefit formula 2%@55 2%@62 Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life Retirement age 50 52 Monthly benefits, as a % of eligible compensation 1.4% to 2.4% 1.0% to 2.5% Required employee contribution rates 7.00% 6.25% Required employer contribution rates: Normal cost rate 8.512% 6.237% Payment of unfunded liability $ 166,764 $ -
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
C. Pension Plans (Continued):
1). General Information about the Pension Plans (Continued):
Benefits Provided (Continued)
Safety Prior to On or After Hire date January 1, 2013 January 1, 2013 Benefit formula 2%@55 2%@57 Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life Retirement age 50 52 Monthly benefits, as a % of eligible compensation 1.4% to 2.0% 1.6% to 2.0% Required employee contribution rates 7.00% 9.50% Required employer contribution rates: Normal cost rate 12.212% 9.069% Payment of unfunded liability $ 32,676 $ -
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans 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 District is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
2). Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions:
As of June 30, 2016, the District reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as of the measurement date, June 30, 2015, as follows:
Proportionate Share of Net Pension Liability Miscellaneous $ 2,079,308 Safety 656,331 Total net pension liability $ 2,735,639
The District’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as of June 30, 2015, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2014, and rolled forward to June 30, 2015, using standard update procedures. The District’s proportionate share of the net pension liability was based on a projection of the District’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.
The District’s proportionate share of the net pension liability for each Plan as of June 30, 2014 and 2015, was as follows:
Miscellaneous Safety Proportion - June 30, 2014 0.08426% 0.01593% Proportion - June 30, 2015 0.07789% 0.01321% Change - increase (decrease) -0.00637% -0.00272%
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
C. Pension Plans (Continued):
2). Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued):
For the year ended June 30, 2016, the District recognized pension expense of $292,125. At June 30, 2016, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Deferred Outflows Inflows of Resources of Resources
Pension contributions subsequent to measurement date $ 381,923 $ - Differences between actual and expected experience 6,257 - Change in assumptions - (197,834) Change in employer’s proportion and differences between the employer’s contributions and the employer’s proportionate share of contributions - (179,278) Net differences between projected and actual earnings on plan investments - (99,426) Total $ 388,180 $ (476,538)
An amount of $381,923 reported as deferred outflows of resources related to contributions, subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the year ending June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Year Ending June 30, Amount 2017 $ (208,586) 2018 (208,013) 2019 (179,607) 2020 125,925
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
C. Pension Plans (Continued):
2). Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued):
Actuarial Assumptions
Total pension liabilities were determined using the following actuarial methods and assumptions:
Miscellaneous Safety Valuation date June 30, 2014 June 30, 2014 Measurement date June 30, 2015 June 30, 2015 Actuarial cost method Entry Age Normal Entry Age Normal Cost Method Cost Method Actuarial assumptions: Discount rate 7.65% 7.65% Inflation 2.75% 2.75% Payroll growth 3.00% 3.00% Projected salary increase (1) (1) Investment rate of return 7.5% (2) 7.5% (2) Mortality (3) (3)
(1) Depending on age, service, and type of employment. (2) Net of pension plan investment expenses, including inflation. (3) The probabilities of mortality are derived using CalPERS’s membership data for all funds. The mortality table used was developed based on CalPERS’s specific data. The table includes 20 years of morality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to the 2014 Experience Study report.
All other actuarial assumptions used in the June 30, 2014, valuation were based on the results of an actuarial experience study for the period from 1997 to 2011, including updates to salary increase, mortality, and retirement rates.The Experience Study report can be obtained at the CalPERS website under Forms and Publications.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
C. Pension Plans (Continued):
2). Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued):
Change of Assumptions
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014, measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015, measurement date is without reduction of pension plan administrative expense.
Discount Rate
The discount rate used to measure the total pension liability was 7.65% for each Plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each Plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing of the selected plans, the tests revealed that assets would not run out. Therefore, the current 7.65% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long-term expected discount rate of 7.65% will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website under the GASB 68 section.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations, as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future year. Using the historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short term (first 10 years) and the long term (11-60 years) using a building-block approach. Using the expected nominal returns for both the short term and long term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of 1%. - 43 - 88 ATTACHMENT 2 VENTURA PORT DISTRICT
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
C. Pension Plans (Continued):
2). Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued):
Discount Rate (Continued)
The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. The target allocation shown was adopted by the CalPERS Board effective on July 1, 2014.
New Real Return Real Return Strategic Years Years Asset Class Allocation 1 - 10 (a) 11+ (b) Global equity 51.00% 5.25% 5.71% Global fixed income 19.00% 0.99% 2.43% Inflation sensitive 6.00% 0.45% 3.36% Private equity 10.00% 6.83% 6.95% Real estate 10.00% 4.50% 5.13% Infrastructure and forestland 2.00% 4.50% 5.09% Liquidity 2.00% -0.55% -1.05% Total 100.00%
(a) An expected inflation of 2.5% used for this period. (b) An expected inflation of 3.0% used for this period.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
C. Pension Plans (Continued):
2). Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued):
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the District’s proportionate share of the net pension liability for each Plan calculated using the discount rate for each Plan, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
Miscellaneous Safety 1% Decrease 6.65% 6.65% Net pension liability $ 3,360,327 $ 1,081,743
Current discount rate 7.65% 7.65% Net pension liability $ 2,079,308 $ 656,331
1% Increase 8.65% 8.65% Net pension liability $ 1,021,678 $ 307,501
Pension Plans Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
3). Payable to the Pension Plans:
At June 30, 2016, the District had no outstanding amount of contributions to the pension plans required for the year ended June 30, 2016.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
D. Other Postemployment Health Care Benefits:
Plan Description
Ventura Port District administers a multiple-employer defined benefit health care plan (the Plan). The Plan provides medical health care insurance for eligible retirees and their spouses through the California Public Employees’ Retirement System Health Benefits Program under the Public Employee’ Medical and Hospital Care Act (PEMHCA). The benefit contribution has been long-standing and approved by the Board of Port Commissioners on June 23, 1999. No dental, vision, or life insurance benefits are provided. Currently there are 9 retired employees and 35 active employees participating in the Plan.
Funding Policy
There is no statutory requirement for the District to prefund its OPEB (other postemployment benefit) obligation. The District has currently chosen to pay plan benefits on a pay-as-you-go basis and does not maintain a trust fund for its other postemployment benefits. There are no employee contributions. The District’s fixed-dollar benefit contribution cannot be less than the PEMHCA minimum for PEMHCA actives and retirees. As of June 30, 2016, the District’s pays $125 per month for each retiree participating in the PEMCHA plan. For fiscal year 2015-16, the District paid $11,856 directly to CalPERS for the District’s health premium contributions under PEMHCA for retiree medical health care plan postemployment benefits.
Annual OPEB Cost and Net OPEB Obligation
For the fiscal year ended June 30, 2016, the components of the District’s annual OPEB (other postemployment benefit) cost for the year, the amount actually contributed to the Plan (including pay-as-you-go amounts), and changes in the District’s net OPEB obligation to the plan are as follows. The Alternative Measurement Method under GASB No. 45 was used to calculate the actuarial obligation since the District has fewer than 100 plan members.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
D. Other Postemployment Health Care Benefits (Continued):
Annual OPEB Cost and Net OPEB Obligation (Continued)
The following table shows the components of the District’s annual OPEB cost for the year, the amount actually contributed to the Plan, and changes in the District’s net OPEB obligation to the Plan:
Annual required contribution (ARC) $ 123,922 Interest on net OPEB obligation 16,420 Adjustment to ARC (19,634) Annual OPEB cost (expense) 120,708 Actual contributions made (pay-as-you-go basis) (11,856) Increase in net OPEB obligation 180,852 Net OPEB obligation - July 1, 2015 410,510 Net OPEB obligation - June 30, 2016 $ 519,362
The District’s annual ARC, the percentage of ARC contributed to the plan, and the net OPEB obligation for the years ended June 30, 2016, 2015, and 2014 were as follows:
Fiscal Annual Required Percentage of Net OPEB Year Contribution (ARC) ARC Contributed Obligation 6/30/16 $ 123,922 9.57% $ 519,362 6/30/15 77,047 12.05% 410,510 6/30/14 77,047 9.88% 347,987
Funded Status and Funding Progress
The funded status of the Plan as of July 1, 2015, the date of the latest actuarial review, was as follows:
Actuarial accrued liabilities (AAL) $ 1,077,067 Actuarial value of plan assets - Unfunded actuarial accrued liabilities (UAAL) $ 1,077,067
Funded ratio 0.00%
Covered payroll (active plan members) $ 2,064,584
UAAL as a percentage of covered payroll 52.17%
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
D. Other Postemployment Health Care Benefits (Continued):
Funded Status and Funding Progress (Continued)
The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of an occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the health care cost trend. Amounts determined regarding the funded status of the Plan and the annual required contributions of the employer are subject to continual revision, as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the basic financial statements, presents multiyear trend information about whether the actuarial value of Plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of the valuation and the historical pattern of sharing of the benefit costs between employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial assets, consistent with the long-term perspective of the calculations. The July 1, 2015, actuarial valuation was used to determine the ARC for fiscal year 2016 using the projected unit credit method.
The following simplifying assumptions were made:
Retirement age for active employees - Based on the historical average retirement age for the covered group; active plan members were assumed to retire at age 60 or at the first subsequent year in which the member would qualify for benefits.
Marital status - Marital status of members at the calculation date was assumed to continue throughout retirement.
Mortality - Life expectancies were based on mortality tables from the 1994 GAM Male and Female Mortality Tables published by the Society of Actuaries.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
D. Other Postemployment Health Care Benefits (Continued):
Actuarial Methods and Assumptions (Continued)
Turnover - Nongroup-specific age-based turnover data from the Alternative Measurement Method formulas, Table 1, paragraph 35 of GASB Statement 45 were used as the basis for assigning active members a probability of remaining employed until the assumed retirement age and for developing an expected future working lifetime assumption for the purposes of allocating to periods the present value of total benefits to be paid.
Health care cost trend rate - The expected rate of increase in health care insurance premiums was based on projections of the Office of the Actuary at the Centers for Medicare & Medicaid Services. A rate of 8% was used initially, which was reduced to an ultimate rate of 5% after three years.
Health insurance premiums - Health insurance premiums under the CalPERS Public Employees Medical and Hospital Care Act were used as the basis for the calculation of the present value of total benefits to be paid.
Medical inflation rate - The typical medical inflation assumption of 4% was based on historical averages.
Based on the historical and expected returns of the District’s short-term investment portfolio, a discount rate of 4% was used. In addition, an ultimate trend rate of 5%, dental, vision, and other trend rates of 4%, and an age-adjustment factor of 3% were used. The unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at June 30, 2016, was 27 years.
E. Related-Party Transactions:
The City of Ventura provides utility services to the District for water and sewage. The cost for these services for the year ended June 30, 2016, was $170,200.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
F. Liability, Property, and Workers’ Compensation Protection:
Description of Self-Insurance Pool Pursuant to Joint Powers Agreement
The Ventura Port District is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 116 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, purchase excess insurance or reinsurance, and arrange for group purchased insurance for property and other lines of coverage. The Authority began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board of Directors operates through a nine-member Executive Committee.
Self-Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter for coverage years 2012-13 and prior. Retrospective adjustments are scheduled to continue indefinitely on coverage years 2012-13 and prior, until all claims incurred during those coverage years are closed, on a pool-wide basis. This subsequent cost re-allocation among members, based on actual claim development, can result in adjustments of either refunds or additional deposits required. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment.
The total funding requirement for self-insurance programs is estimated using actuarial models and prefunded through the annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative to other members of the risk-sharing pool. Additional information regarding the cost allocation methodology is provided below.
Liability - In the liability program, claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $750,000 to $50 million are distributed based on the outcome of cost allocation within the first and second loss layers.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
F. Liability, Property, and Workers’ Compensation Protection (Continued):
Self-Insurance Programs of the Authority (Continued)
Liability (Continued) - For 2015-16, the Authority’s pooled retention is $2 million per occurrence, with reinsurance to $20 million, and excess insurance to $50 million. The Authority’s reinsurance contracts are subject to the following additional pooled retentions: (a) $2.5 million annual aggregate deductible in the $3 million x/ s $2 million layer and (b) $3 million annual aggregate deductible in the $5 million x/ s $10 million layer. There is a third annual aggregate deductible in the amount of $2.5 million in the $5 million x/ s $5 million layer; however, it is fully covered under a separate policy and therefore not retained by the Authority.
The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Costs of covered claims for subsidence losses have a sublimit of $30 million per occurrence.
Workers’ Compensation - In the workers’ compensation program, claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $100,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.
For 2015-16, the Authority’s pooled retention is $2 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law.
Employer’s liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased as part of a reinsurance policy, and employer’s liability losses from $5 million to $10 million are pooled among members.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
F. Liability, Property, and Workers’ Compensation Protection (Continued):
Purchased Insurance
Pollution Legal Liability Insurance - The Ventura Port District participates in the pollution legal liability insurance program that is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the Ventura Port District. Coverage is on a claims-made basis. There is a $50,000 deductible. The Authority has a limit of $50 million for the three-year period from July 1, 2014 through July 1, 2017. Each member of the Authority has a $10 million sublimit during the three-year term of the policy.
Property Insurance - The Ventura Port District participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. Ventura Port District property is currently insured according to a schedule of covered property submitted by the Ventura Port District to the Authority. Ventura Port District property currently has all-risk property insurance protection in the amount of $20,008,846. There is a $5,000 deductible per occurrence, except for nonemergency vehicle insurance, which has a $1,000 deductible. Premiums for the coverage are paid annually and are not subject to retrospective adjustments.
Earthquake and Flood Insurance - The Ventura Port District purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. Ventura Port District property currently has earthquake protection in the amount of $0. There is a deductible of 5% per unit of value with a minimum deductible of $100,000. Premiums for the coverage are paid annually and are not subject to retrospective adjustments.
Crime Insurance - The Ventura Port District purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority. Premiums are paid annually and are not subject to retrospective adjustments.
Special Event Tenant User Liability Insurance - The Ventura Port District further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and is paid to the Ventura Port District according to a schedule. The Ventura Port District then pays for the insurance. The insurance is arranged by the Authority.
Adequacy of Protection - During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2015-16.
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NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
June 30, 2016
3. OTHER INFORMATION (CONTINUED):
G. Commitments:
The District is developing a strategy (short/long term) that will improve the accessibility of the Ventura Harbor Village for all tenants and customers. The District has budgeted $1,660,000 in the financial year of 2015-2016 for such improvements.
4. SUBSEQUENT EVENTS:
Events occurring after June 30, 2016, have been evaluated for possible adjustments to the financial statements or disclosure as of January 13, 2017, which is the date these financial statements were available to be issued.
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REQUIRED SUPPLEMENTARY INFORMATION
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SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
Last Ten Fiscal Years*
Fiscal year ended June 30, 2015 June 30, 2016
Measurement period June 30, 2014 June 30, 2015
Plan’s proportion of the net pension liability 0.04143% 0.03986%
Plan’s proportionate share of the net pension liability $ 2,578,020 $ 2,735,639
Plan’s covered - employee payroll $ 2,112,081 $ 2,106,485
Plan’s proportionate share of the net pension liability as a percentage of its covered - employee payroll 122.06% 129.87%
Plan’s proportionate share of the fiduciary net position as a percentage of the proportionate share of the Plan's total pension liability 78.68% 78.40%
Plan’s proportionate share of aggregate employer contributions$ 260,330 $ 345,430
Notes to Schedule:
Changes in Benefit Terms: None
Changes in Assumptions: GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.
* - Fiscal year 2015 was the first year of implementation, therefore two years are shown.
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SCHEDULE OF CONTRIBUTIONS - DEFINED BENEFIT PENSION PLANS
Last Ten Fiscal Years*
2015 2016
Contractually required contribution (actuarially determined)$ 326,180 $ 381,923
Contributions in relation to the actuarially determined contributions (326,180) (381,923)
Contribution deficiency (excess) $ - $ -
Covered - employee payroll $ 2,106,485 $ 2,225,849
Contributions as a percentage of covered - employee payroll 15.48% 17.16%
Notes to Schedule:
Valuation Date 6/30/2013
Methods and Assumptions Used to Determine Contribution Rates: 1) Cost sharing employers Entry age normal ** 2) Amortization method Level percentage of payroll, closed ** 3) Average remaining period 19 years (Misc. 2%@55 or 62), 13 years (Safety 2%@55 or 57) 4) Asset valuation method Market value *** 5) Investment rate of return 7.50% (net of pension plan expense, including inflation) ** 6) Projected salary increases Depending on age, service, and type of employment ** 7) Inflation 2.75% 8) Retirement age 50 years (Misc. and Safety 2%@55), 52 years (Misc. 2%@62), and 52 years (Safety @57) ** 9) Mortality Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board, first used in the June 30, 2009 valuation. For purposes of the postretirement mortality rates, those revised rates include five years of projected ongoing mortality improvement using Scale AA published by the Society of Actuaries until June 30, 2010. There is no margin for future mortality improvement beyond the valuation date. **
* - Fiscal year 2015 was the 1st year of implementation, therefore only two years are shown. ** - The valuation for June 30, 2012 (applicable to fiscal year ended June 30, 2015) included the same actuarial assumptions. *** - The valuation for June 30, 2012 (applicable to fiscal year ended June 30, 2015) valued assets using a 15 Year Smoothed Market method.
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SCHEDULE OF FUNDING PROGRESS OTHER POSTEMPLOYMENT HEALTH CARE BENEFITS
For the year ended June 30, 2016
Actuarial Actuarial Accrued Value Unfunded UAAL as a Actuarial Liability of Assets AAL Funded Covered % of Valuation (AAL) (AVA) (UAAL) Ratio Payroll Payroll Date (a) (b) (a) - (b) (b)/(a) (c) [(a)-(b)]/(c)
7/1/2009$ 476,265 $ - $ 476,265 0.00%$ 1,826,203 26.08% 7/1/2012$ 629,594 $ - $ 629,594 0.00%$ 1,978,368 31.82% 7/1/2015$ 1,077,067 $ - $ 1,077,067 0.00%$ 2,064,584 52.17%
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INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Board of Port Commissioners of the Ventura Port District Ventura, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the basic financial statements of the Ventura Port District (the District) as of and for the year ended June 30, 2016, and the related notes to the basic financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated January 13, 2017.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’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 District’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 may exist that have not been identified.
- 59 - 2875 Michelle Drive, Suite 300, Irvine, CA 92606 • Tel: 714.978.1300 • Fax: 714.978.7893
Offices located in Orange104 and San Diego Counties ATTACHMENT 2 Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’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 determination of financial statement amounts. 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 and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Irvine, California January 13, 2017
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BOARD OF PORT COMMISSIONERS JANUARY 25, 2016
STANDARD AGENDA ITEM 2 COASTAL MARINE BIOLABS QUARTER 1 AND QUARTER 2 REPORT
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VENTURA PORT DISTRIST STANDARD AGENDA ITEM 2 BOARD COMMUNICATION Meeting Date: January 25, 2017 TO: Board of Port Commissioners FROM: Linda Santschi, Ph.D. and Ralph Imondi, Ph.D. SUBJECT: Coastal Marine Biolabs Quarter 1 and Quarter 2 Report
RECOMMENDATION: That the Board of Port Commissioners receive a report from Coastal Marine Biolabs on their Quarters 1 and 2 activities.
SUMMARY: Coastal Marine Biolabs (CMB) will discuss the following:
• Recent funding; • Program spread and adoption; and • Technology resource development.
BACKGROUND: CMB is a private, 501(c)(3), research-based science education organization that provides innovative field and laboratory-based learning experiences for high school students. Under the mentorship of CMB scientists, students use many of the key technological cornerstones of modern scientific discovery to explore contemporary questions that lie at the frontiers of scientific knowledge.
CMB joined the Ventura Harbor family in April 2007 in the 1559 Building, Suite 101 with a one year lease. After termination, CMB was a month-to-month tenant until 2011 when the lease was re-stated for three years. In June 2014, a new five year lease was created.
At the November 18, 2015 meeting, CMB provide an overview of their mission, approach and programming. Also, a brief organizational history and timeline, highlighting major achievements and milestones with respect to the research-based educational programming was reported.
CMB provided an update on the program in developmental neuroscience funded by the National Institutes of Health, and their recent grant submission to the National Science Foundation. CMB concluded with a brief description of its role in the Ventura Shellfish Enterprise.
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BOARD OF PORT COMMISSIONERS JANUARY 25, 2017
STANDARD AGENDA ITEM 3 ADA PARKING ACCESS IMPROVEMENTS BID AWARD
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VENTURA PORT DISTRICT STANDARD AGENDA ITEM 3 BOARD COMMUNICATION Meeting Date: January 25, 2017 TO: Board of Port Commissioners FROM: Richard Parsons, Project Manager SUBJECT: ADA Parking Access Improvements Bid Award
RECOMMENDATION: That the Board of Port Commissioners award the ADA Parking Access Improvements contract to J & H Engineering General Contractors, Inc. in the amount of $174,934.25.
BACKGROUND: The Port District’s current capital improvement budget includes the following two project appropriations:
Parking Lot Striping Reconfiguration $100,000 Additional Parking Lot ADA Improvements $100,000 Total $200,000
Both of these projects essentially involve concrete and asphalt paving work and for that reason were combined for purpose of project implementation. The project involves modifications and improvements at the following parking lots:
Harbor Cove – restriping to gain an additional 22 spaces and ADA improvements Surfers Knoll – ADA improvements VIM Lot – ADA and striping improvements to add 13 spaces to the District’s portion of this lot Launch Ramp – ADA and striping modifications in the restroom area VPD Office Lot – ADA improvements
On January 17, 2017, competitive bids for the project were opened and the following bids were received:
1 J&H Engineering $174,934.25 2 Toro Engineering $178,476.40 3 Hughes General Engineering, Inc. $179,995.25 4 A. Bates, Inc. $200,200.00 5 Civic Construction $252,550.00
J&H Engineering General Contractors is a Camarillo firm that has accomplished a great deal of work throughout Ventura County and appears well qualified to perform the work specified in the Port District’s contract.
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BOARD OF PORT COMMISSIONERS JANUARY 25, 2017
STANDARD AGENDA ITEM 4 APPROVAL OF PARKING MANAGEMENT PLAN FOR THE VENTURA HARBOR
110 VENTURA PORT DISTRICT STANDARD AGENDA ITEM 4 BOARD COMMUNICATION Meeting Date: January 25, 2017 TO: Board of Port Commissioners FROM: Brian Pendleton, Business Operations Manager SUBJECT: Parking Management Plan for the Ventura Harbor
RECOMMENDATION: That the Board of Port Commissioners approve the Parking Management Plan for the Ventura Harbor.
SUMMARY: On January 13th the Board of Port Commissioners approved an adjustment to the 2015 - 2016 annual budget to fund professional services with Associated Transportation Engineers for parking survey and development of updated parking management program policies for Commission consideration. The resulting work product was presented to the Commission on May 25, 2016 as the Draft Parking Management Plan for the Ventura Harbor.
BACKGROUND: On behalf of the District, Associated Transportation Engineers (ATE) conducted parking surveys at the Harbor in the summer of 2015. This follows similar survey work conducted by ATE in the summer of 2012. Comparison of the parking survey data collected at the Ventura Harbor in the summers of 2012 and 2015 showed an increase in demand of over 60% in the three-year span. The 2015 results demonstrate that Harbor Village parking lots were at or near capacity (over 90% occupied) during the afternoon hours on the weekends resulting in traffic congestion. This is consistent with conditions observed by staff during the 2015 and 2016 summer months. Additionally, in the summer of 2015, traffic counts were measured along Spinnaker Drive over a one week period, and long-term (multiple- day) parking demand was determined. The parking surveys found that there were approximately 200 overnight permit vehicles in the parking lots during the peak weekend period.
The Parking Management Plan for the Ventura Harbor reviews existing parking conditions within the Harbor Village and recommends short-term, mid-term and long-term strategies to maximize parking efficiency, increase parking supplies, and accommodate existing and future parking demands. Several workshops and meetings were held with Ventura Port District staff, the tenants of the Harbor Village shops and restaurants, Island Packers, dive boat operators, and commercial fishermen to discuss existing parking issues and potential solutions. Additionally staff reached out to private marina operators to discuss additional parking opportunities for Harbor Village as reflected in the Parking Management Plan for the Ventura Harbor.
FISCAL IMPACTS: Funding for costs associated with Short and Mid-Term Strategies is included in the District’s 5-Year Capital Improvement Plan as part of the FY16-17 budget. Costs will be reevaluated on an annual basis.
ATTACHMENTS: Attachment 1 – Parking Management Plan for the Ventura Harbor
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