to be levied on each assessed full service restaurant business; and WHEREAS, pursuant to the Taxpayer Protection and Government Accountability Act (TPGAA), an initiative certified eligible for qualification for the November 5, 2024, general election ballot, the proposed assessment is an exempt charge as the CRID is a restaurant improvement district formed under the provisions of the Property and Business Improvement District Law of 1994, as set forth in the Streets and Highways Code §36600, et seq.; and WHEREAS, the amount of the proposed assessment for the entire CRID in each full fiscal year (July 1 – June 30) will total approximately $240,000. The initial “year” of operations will be a partial year consisting of six (6) months, with an anticipated assessment budget of $96,000.
Pursuant to the TPGAA, the City has found the proposed assessment amount is reasonable given the scope of services to be provided and shall not exceed the actual cost of providing the CRID services to the payors; and
WHEREAS, adoption of this Ordinance does not diminish the legal effect of the adoption of the Resolution of Formation.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. Findings. The City Council of the City of Carmel-by-the-Sea does hereby find that the above referenced recitals are true and correct and material to the adoption of this Ordinance; and Section 2. Codification. This Ordinance shall not be codified in the Carmel-by- the-Sea Municipal Code.
Section 3. Enacted. All provisions of the Carmel Restaurant Improvement District (“CRID”) are made effective through this Ordinance as follows:
3.1 Renewed. The City hereby renews the CRID for a nine (9) year and six (6) months life, beginning January 1, 2024 or as soon as possible thereafter, and ending on June 30, 2033, under the provisions of the Property and Business Improvement District Law of 1994, as set forth in the Streets and Highways Code of the state, Section 36600 et seq.
3.2 Management District Plan. The Management District Plan (Plan) dated July 11, 2023 is hereby adopted and approved.
3.3 Activities and Improvements. The activities to be provided to benefit full service restaurant businesses in the CRID will be funded by the levy of the assessment. The revenue from the assessment levy shall not be used: to provide activities that directly benefit businesses outside the CRID; to provide activities or improvements outside the CRID; or for any purpose other than the purposes specified in this Ordinance, the Resolution of Intention, the Resolution of Formation, and the Plan. Notwithstanding the foregoing, improvements and activities that must be provided outside the CRID boundaries to create a specific benefit to the assessed full service restaurant businesses may be provided, but shall be limited to marketing or signage pointing to the CRID.
The Council finds as follows:
A. The activities funded by the assessment will provide a specific benefit to assessed full service restaurant businesses within the CRID that is not provided to those not paying the assessment.
B. The assessment is a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed Attachment 1
Ordinance No. 2023-005
the reasonable costs to the local government of conferring the benefit or granting the privilege.
C. The assessment is a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.
D. Assessments imposed pursuant to the CRID are levied solely upon the assessed full service restaurant business, and the full service restaurant business owner is solely responsible for payment of the assessment when due. The amount of assessment, if passed on to each customer, shall be disclosed in advance and separately stated from the amount of consideration charged and any other applicable taxes, and each customer shall receive a receipt for payment from the business.
E. The assessments levied for the CRID shall be applied toward sales and marketing services, and other improvements and activities as set forth in the Plan.
F. Assessments levied on full service restaurant businesses pursuant to this Ordinance shall be levied on the basis of benefit. Because the services provided are intended to increase restaurant food and drink sales, an assessment based on gross food and drink sales revenue is the best measure of benefit.
3.4 Budget. The assessments for the entire CRID in each full fiscal year (July 1 – June 30) of operations will total approximately $240,000. The initial “year” of operations will be a partial year consisting of six (6) months, with an anticipated assessment budget of $96,000.
3.5 Bonds. Bonds shall not be issued to fund the CRID.
3.6 Boundaries. The renewed CRID includes all full service restaurant businesses, existing and in the future, located within the City boundaries of the City of Carmel-by-the-Sea as described in the Plan.
3.7 Assessments.
A. The annual assessment rate is one quarter of one percent (0.25%) of gross food and drink sales revenue. During the CRID’s term, the assessment rate may be increased by the CRID Management Committee to a maximum rate of one percent (1%) of gross food and drink sales revenue for assessed full service restaurant businesses. The maximum increase or decrease in any year shall be one quarter of one percent (0.25%). If the assessment rate is increased, it may subsequently be decreased but shall not be decreased below a minimum of one quarter of one percent (0.25%) of gross food and drink sales revenue.
B. The assessments shall be used for the purposes set forth herein and any funds remaining at the end of any year may be used in subsequent years in which the CRID assessment is levied as long as they are used consistent with the requirements set forth herein.
3.8 Collections. The City will be responsible for collecting the assessment on a quarterly basis (including any delinquencies, penalties and interest) from each assessed full service restaurant business located in the boundaries of the CRID. The City shall take all reasonable efforts to collect the assessments from each assessed full service restaurant business.
3.9 Owners’ Association. The Council through adoption of this Ordinance and the Plan, has the right pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the Owners’ Association of the CRID as defined in Streets and Highways Code §36612. The City Council has determined that Visit Carmel will continue to serve as the Owners’ Association for the CRID. The CRID Management Committee, comprised of a minimum of three (3) business owners, or their representatives, paying the CRID assessment, will continue to be responsible for implementing the Plan. Passage of this Ordinance authorizes the Attachment 1
Ordinance No. 2023-005
Council to contract with Visit Carmel to administer the CRID.
3.10 Annual Report. Visit Carmel, pursuant to Streets and Highways Code §36650, shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvement and activities described in the report. The first report shall be due after the first year of operation of the CRID.
3.11 Amendments to Enabling Legislation. The CRID renewed pursuant to this Ordinance shall be subject to any amendments to the Property and Business Improvement District Law of 1994 (California Streets and Highways Code §36600 et. seq.).
Section 4. Severability. If any section, subsection, phrase, or clause of this ordinance is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance.
The City Council hereby declares that it would have passed this Ordinance and each section, subsection, phrase or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional.
Section 5. Publication. The City Clerk shall publish or post this ordinance in the manner required by law.
Section 6. Effective Date. This Ordinance of the City of Carmel-by-the-Sea shall be effective thirty (30) days after its passage.
INTRODUCED at a Regular meeting of the City Council of the City of Carmel-by-the-Sea on the 6th day of June, 2023.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this ______ day of _____________, 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVE: ATTEST:
________________________ ___________________________
Dave Potter, Mayor Nova Romero, MMC, City Clerk
Attachment 1
2024-2033
CARMEL RESTAURANT IMPROVEMENT DISTRICT
MANAGEMENT DISTRICT PLAN
Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq.
July 11, 2023
Deleted: April 10
Attachment 2
Contents
I. OVERVIEW ........................................................................................................................................3 II. BACKGROUND ................................................................................................................................5 III. BOUNDARY.......................................................................................................................................6 IV. ASSESSMENT BUDGET AND SERVICES................................................................................7 A. Annual Service Plan ........................................................................................................7 B. Annual Budget.................................................................................................................9 C. California Constitutional Compliance ............................................................................10 D. Assessment....................................................................................................................12 E. Penalties and Interest .....................................................................................................12 F. Time and Manner for Collecting Assessments ...............................................................13 V. GOVERNANCE...............................................................................................................................14 A. Owners’ Association......................................................................................................14 B. Brown Act and California Public Records Act Compliance ...........................................14 C. Annual Report ...............................................................................................................14 APPENDIX 1 – LAW...............................................................................................................15 APPENDIX 2 – ASSESSED BUSINESSES .............................................................................26 Prepared by
Civitas
(800)999-7781
www.civitasadvisors.com
Attachment 2
CRID Management District Plan 3
July 11, 2023
Deleted: April 10
I. OVERVIEW
Developed by Visit Carmel (VC) and Carmel restaurant businesses, the Carmel Restaurant Improvement District (CRID) is an assessment district proposed to continue to provide specific benefits to payors, by funding marketing and sales promotion efforts for assessed businesses. This approach has been used successfully in other destination areas throughout the country to provide the benefit of increased restaurant food and drink sales and market assessed businesses in the CRID. The CRID was initially formed on January 1, 2019 for a five (5) year term. VC and Carmel restaurant businesses now wish to renew the CRID for a nine (9) year and six (6) months term.
Location: The CRID includes all full service restaurant businesses, existing and in the future, located within the City boundaries of the City of Carmel-by-the-Sea, as shown on the map in Section III.
Services: The CRID is designed to provide specific benefits directly to payors by increasing restaurant food and drink sales and revenue therefrom. Sales and marketing services will be provided to increase restaurant food and drink sales and market assessed businesses in the CRID.
Budget: The total CRID annual assessment budget for each full fiscal year (July 1 – June 30) of operations is anticipated to be approximately $240,000. The initial “year” of operations will be a partial year consisting of six (6) months, with an anticipated assessment budget of $96,000. A similar assessment budget is expected to apply to subsequent years, but this budget is expected to fluctuate as restaurant food and drink sales do, as businesses open and close, and if the assessment rate increases or decreases, as detailed in Section IV.
Cost: The annual assessment rate is one quarter of one percent (0.25%) of gross food and drink sales revenue. During the CRID’s term, the assessment rate may be increased by the CRID Management Committee to a maximum rate of one percent (1%) of gross food and drink sales revenue for assessed businesses. The maximum increase or decrease in any year shall be one quarter of one percent (0.25%). If the assessment rate is increased, it may subsequently be decreased but shall not be decreased below a minimum of one quarter of one percent (0.25%) of gross food and drink sales revenue.
Collection: The City will be responsible for collecting the assessment on a quarterly basis (including any delinquencies, penalties and interest) from each assessed business located in the boundaries of the CRID. The City shall take all reasonable efforts to collect the assessments from each assessed business.
Duration: The CRID will have a nine (9) year and six (6) month life, beginning January 1, 2024 or as soon as possible thereafter, and ending on June 30, 2033. After nine (9) years and six (6) months, the CRID may be renewed pursuant to the 94 Law if business owners support continuing the CRID programs. Once per year, beginning on the anniversary of CRID renewal, there is a thirty (30) day period in which owners paying fifty percent (50%) or more of the assessment may protest and initiate a City Council hearing on CRID termination.
Deleted: payers
Deleted: months year life
Attachment 2
CRID Management District Plan 4
July 11, 2023
Deleted: April 10
Management: Visit Carmel shall continue to serve as the CRID’s Owners’ Association. Visit Carmel Board has formed a CRID Management Committee, which is comprised of a minimum of three (3) business owners, or their representatives, paying the CRID assessment which will be responsible for implementing this Plan. The CRID Management Committee shall be responsible for managing funds and implementing programs in accordance with this Plan, and must provide annual reports to the City Council.
Attachment 2
CRID Management District Plan 5
July 11, 2023
Deleted: April 10
II. BACKGROUND
Business Improvement Districts (BIDs) utilize the efficiencies of private sector operation in the market-based promotion of business districts. BIDs allow business owners to organize their efforts to increase sales and promotional efforts. Business owners within the district fund a BID, and those funds are used to provide services that the businesses desire and benefit the businesses within the district.
Business Improvement District services may include, but are not limited to:
➢ Marketing of the District
➢ Business Promotion Activities
➢ Infrastructure Improvements
In California, BIDs are formed pursuant to the Property and Business Improvement District Law of 1994 (PBID Law). This law allows for the creation of special benefit assessment districts to raise funds within a specific geographic area. The key difference between BIDs and other special benefit assessment districts is that funds raised are managed by the private non-profit corporation governing the district.
There are many benefits to Business Improvement Districts:
➢ Funds cannot be diverted for other government programs; ➢ Services are customized to fit the needs of each district; ➢ They allow for a wide range of services, including those listed above; ➢ Business Improvement Districts are designed, created and governed by those who will pay the assessment; and
➢ They provide a stable funding source for business promotion.
The PBID Law is provided in Appendix 1 of this document.
Attachment 2
CRID Management District Plan 6
July 11, 2023
Deleted: April 10
III. BOUNDARY
The CRID will include all full service restaurant businesses, existing and in the future, within the City boundaries of the City of Carmel-by-the-Sea, as shown in the map below.
As used herein, full service restaurant business means: a restaurant business providing a full line of prepared food and drinks using non-disposable plates, glasses, and utensils for immediate consumption on the site. Full line restaurant businesses provide table service to patrons who pay after eating. Full service restaurant businesses may provide takeout service. As used herein, restaurant business does not include coffee shops, bakeries, candy shops, or any business that sells food and/or drinks incidentally to its main business purpose.
A complete listing of assessed businesses within the CRID can be found in Appendix 2.
Attachment 2
CRID Management District Plan 7
July 11, 2023
Deleted: April 10
IV. ASSESSMENT BUDGET AND SERVICES
A. Annual Service Plan
Assessment funds will be spent to provide specific benefits conferred or privileges granted directly to the payors that are not provided to those not charged, and which do not exceed the reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and services provided with the CRID funds are activities and improvements designed to increase restaurant food and drink sales and revenue therefrom.
A service plan assessment budget has been developed to deliver services that benefit the assessed businesses. A detailed annual assessment budget will be developed and approved by the Owners’ Association. The table below illustrates the annual assessment budget for fiscal year January 1, 2024- June 30, 2024, which covers the initial six (6) month period of the CRID.
Although actual revenues will fluctuate due to market conditions, the proportional allocations of the budget shall remain the same. The table below illustrates the annual assessment budget for fiscal year two (July 1, 2024- June 30, 2025). However, the VC board shall have the authority to adjust budget allocations between the categories by no more than fifteen percent (15%) of the total budget per year.
A description of the proposed improvements and activities for the initial year of operation is below.
The same activities are proposed for subsequent years. In the event of a legal challenge against the CRID, any and all assessment funds may be used for the costs of defending the CRID.
Sales & Marketing,
$67,200 , 70%
Administration,
$16,320 , 17%
Contingency/Reserve,
$10,560 , 11%
Collections,
$1,920 , 2%
Fiscal Year 2024 (January- June)
Assessment Budget: $96,000
Attachment 2
CRID Management District Plan 8
July 11, 2023
Deleted: April 10
Each budget category includes all costs related to providing that service. For example, the sales and marketing budget includes the cost of staff time dedicated to overseeing and implementing the sales and marketing program. Staff time dedicated purely to administrative tasks is allocated to the administrative portion of the budget. The costs of an individual staff member may be allocated to multiple budget categories. The staffing levels necessary to provide the services below will be determined by the VC on an as- needed basis.
Sales and Marketing
A sales and marketing program will promote assessed restaurant businesses. The sales and marketing program will have a central theme of promoting Carmel as a desirable place for culinary experiences.
The program will have the goal of increasing customers and sales at assessed businesses and may include the following activities:
• Internet marketing efforts, including the use of digital ad programs and social media, to increase awareness and optimize internet presence to drive customers and sales to assessed businesses;
• Print and digital ads in magazines and newspapers, television/video ads, and radio/podcast ads targeted at potential visitors to drive customers and sales to assessed businesses; • Public relations campaigns to increase awareness and brand image using earned media coverage;
• Direct to consumer e-mail and mail campaigns;
• Attendance at media events and/or trade shows to promote assessed businesses; • Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed businesses;
• Attendance at professional industry conferences and affiliation events to promote assessed businesses;
Sales & Marketing,
$168,000 , 70%
Administration,
$40,800 , 17%
Contingency/Reserve,
$26,400 , 11%
Collections, $4,800
, 2%
Fiscal Year 2024/2025 (July- June)
Assessment Budget: $240,000
Attachment 2
CRID Management District Plan 9
July 11, 2023
Deleted: April 10
• Creation of or participation in promotional culinary or dining events; • Lead generation activities designed to attract customers to assessed businesses; • Development and maintenance of a website designed to promote assessed businesses; and • Creative asset and content creation including photo and video production.
Administration
The administration portion of the budget shall be utilized for administrative staffing costs, office costs, advocacy and other general administrative costs such as insurance, legal, and accounting fees.
Contingency/Reserve
The budget includes a contingency line item to account for uncollected assessments, if any. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of the CRID Management Committee. Policies relating to contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the CRID Management Committee. The reserve fund may be used for the costs of renewing the CRID.
Collections
The City shall retain a fee equal to two percent (2%) of the amount of assessment collected to cover its costs of collection and administration.
B. Annual Budget
The total CRID annual assessment budget for each full fiscal year (July 1 – June 30) of operations is anticipated to be approximately $240,000. The initial “year” of operations will be a partial year consisting of six (6) months, with an anticipated assessment budget of $96,000. A similar assessment budget is expected to apply to subsequent years, but this budget is expected to fluctuate as restaurant food and drink sales do, as businesses open and close, and if the assessment rate is increased or decreased pursuant to Section IV.
The annual assessment rate is one quarter of one percent (0.25%) of gross food and drink sales revenue. During the CRID’s term, the assessment rate may be increased by the CRID Management Committee to a maximum rate of one percent (1%) of gross food and drink sales revenue for assessed businesses. The maximum increase or decrease in any year shall be one quarter of one percent (0.25%).
The table below demonstrates the estimated maximum budget if the assessment rate is increased at the earliest opportunity each year, as it is a required disclosure, it is not the anticipated course of action.
Alternate courses of action may be taken in regard to implementing the assessment rate increase other than what is demonstrated in the chart below, within the parameters of this Management District Plan.
Estimated Annual Budget if Maximum Assessment Rates are Adopted Year Sales &
Marketing Admin Contingency/Reserve Collection Total
Jan -Jun 2024 $67,200 $16,320 $10,560 $1,920 $96,000
2024/2025 $168,000 $40,800 $26,400 $4,800 $240,000
2025/2026 $252,000 $61,200 $39,600 $7,200 $360,000
2026/2027 $336,000 $81,600 $52,800 $9,600 $480,000
2027/2028 $336,000 $81,600 $52,800 $9,600 $480,000
2028/2029 $336,000 $81,600 $52,800 $9,600 $480,000
2029/2030 $336,000 $81,600 $52,800 $9,600 $480,000
Attachment 2
CRID Management District Plan 10
July 11, 2023
Deleted: April 10
The table below demonstrates the annual improvement and service plan budget with the assumption that the rates will not be increased during the CRID’s term.
Estimated Annual Budget if Maximum Assessment Rates Are Not Adopted Year Sales &
Marketing Admin Contingency/Reserve Collection Total
Jan - Jun 2024 $72,000 $16,320 $10,560 $1,920 $96,000
2024/2025 $180,000 $40,800 $26,400 $4,800 $240,000
2025/2026 $180,000 $40,800 $26,400 $4,800 $240,000
2026/2027 $180,000 $40,800 $26,400 $4,800 $240,000
2027/2028 $180,000 $40,800 $26,400 $4,800 $240,000
2028/2029 $180,000 $40,800 $26,400 $4,800 $240,000
2029/2030 $180,000 $40,800 $26,400 $4,800 $240,000
2030/2031 $180,000 $40,800 $26,400 $4,800 $240,000
2031/2032 $180,000 $40,800 $26,400 $4,800 $240,000
2032/2033 $180,000 $40,800 $26,400 $4,800 $240,000
Total $1,692,000 $383,520 $248,160 $45,120 $2,256,000
C. California Constitutional Compliance
The CRID assessment is not a property-based assessment subject to the requirements of Proposition 218. Courts have found Proposition 218 limited the term ‘assessments’ to levies on real property.1 Rather, the CRID assessment is a business-based assessment, and is subject to Proposition 26.
Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions. Two of these exceptions apply to the CRID, a “specific benefit” and a “specific government service.” Both require that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the benefits or providing the services.
1. Specific Benefit
Proposition 26 requires that assessment funds be expended on, “a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.”2 The services in this Plan are designed to provide targeted benefits directly to assessed businesses, and are intended only to provide benefits and services directly to those businesses paying the assessment. These services are tailored not to serve the general public, businesses in general, or parcels of land, but rather to serve the specific businesses within the CRID. The activities described in this Plan are specifically targeted to increase gross food and drink sales revenue for assessed businesses within the boundaries of the CRID, and are narrowly tailored. CRID funds will be used exclusively to provide the specific benefit of increased demand for food and drink sales directly to the assessees. Assessment funds shall not be used to feature non-assessed businesses in CRID programs, or to directly generate sales for non-assessed businesses. The activities paid for from assessment 1 Jarvis v. the City of San Diego 72 Cal App. 4th 230
2 Cal. Const. art XIII C § 1(e)(1)
2030/2031 $336,000 $81,600 $52,800 $9,600 $480,000
2031/2032 $336,000 $81,600 $52,800 $9,600 $480,000
2032/2033 $336,000 $81,600 $52,800 $9,600 $480,000
Total $2,839,200 $689,520 $446,160 $81,120 $4,056,000
Attachment 2
CRID Management District Plan 11
July 11, 2023
Deleted: April 10
revenues are business services constituting and providing specific benefits to the assessed businesses. Nothing in this Plan limits the ability of the Owners’ Association to enter into private contracts with non-assessed businesses for the provision of services to those businesses.
The assessment imposed by this CRID is for a specific benefit conferred directly to the payors that is not provided to those not charged. The specific benefit conferred directly to the payors is an increase in gross food and drink sales revenue. The specific benefit of an increase in gross food and drink sales revenue for assessed businesses will be provided only to businesses paying the district assessment, with marketing and sales programs promoting businesses paying the CRID assessment. The marketing and sales programs will be designed to increase gross food and drink sales revenue at each assessed business. Because they are necessary to provide the marketing and sales programs that specifically benefit the assessed businesses, the administration and contingency and collections services also provide the specific benefit of increased gross food and drink sales revenue to the assessed businesses.
Although the CRID, in providing specific benefits to payors, may produce incidental benefits to nonpaying businesses, the incidental benefit does not preclude the services from being considered a specific benefit. The legislature has found that, “A specific benefit is not excluded from classification as a ‘specific benefit’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific benefit to the payor.”3
2. Specific Government Service
The assessment may also be utilized to provide, “a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.” 4 The legislature has
recognized that marketing and promotions services like those to be provided by the CRID are government services within the meaning of Proposition 265. Further, the legislature has determined that “a specific government service is not excluded from classification as a ‘specific government service’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific government service to the payor.”6
3. Reasonable Cost
CRID activities and improvements will be implemented carefully to ensure they do not exceed the reasonable cost to the City of such activities and improvements. The full amount assessed will be used to provide the activities and improvements described herein. Funds will be managed by the CRID Management Committee, and reports submitted on an annual basis to the City. Only assessed restaurant businesses will directly benefit from other CRID-funded services. Non-assessed restaurant businesses will not directly receive these, nor any other, CRID-funded services and benefits.
The CRID-funded programs are all targeted directly at and feature only assessed businesses. It is, however, possible that there will be a spill over benefit to non-assessed businesses. If non-assessed restaurant businesses receive incremental gross food and drink revenue, that portion of the promotion or program generating that gross food and drink revenue shall be paid with non-CRID funds. CRID funds shall only be spent to benefit the assessed businesses, and shall not be spent on that portion of any program which directly generates incidental gross food and drink sales for non-assessed businesses.
3 Government Code § 53758(a)
4 Cal. Const. art XIII C § 1(e)(2)
5 Government Code § 53758(b)
6 Government Code § 53758(b)
Attachment 2
CRID Management District Plan 12
July 11, 2023
Deleted: April 10
D. Assessment
The annual assessment rate is one quarter of one percent (0.25%) of gross food and drink sales revenue. During the CRID’s term, the assessment rate may be increased by the CRID Management Committee to a maximum rate of one percent (1%) of gross food and drink sales revenue for assessed businesses. The maximum increase or decrease in any year shall be one quarter of one percent (0.25%).
If the assessment rate is increased, it may subsequently be decreased but shall not be decreased below a minimum of one quarter of one percent (0.25%) of gross food and drink sales revenue.
The assessment was calculated based on the total cost of the activities to be provided for the benefit of the businesses within the CRID with costs allocated based on the proportional benefit conferred to each business. Activities funded by the CRID are specifically targeted to increase food and drink sales revenue at assessed businesses. All food and drink sales do not represent the same benefit to the payors. For example, higher priced food and drink is of greater benefit than lower priced food and drink because the assesse derives greater revenue. To account for this benefit differential and to make sure the benefits are proportional, an assessment formula based on a percentage of revenue has been selected. The proposed formula accurately reflects greater benefit to assessed businesses with higher priced food and drink.
The term “gross food and drink sales revenue” as used herein means: the consideration charged whether or not received, for prepared food and drink items to be consumed on or off the businesses’ premises valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits, and property and services of any kind or nature, without any deduction therefrom whatsoever.
Gross food and drink sales revenue shall not include, for purposes of the assessment: facility rental fees, off-site catered or ticketed events, nor revenue generated from retail products, such as branded promotional items (coffee mugs, t-shirts, hats, etc.), and similar items.
The assessment is levied upon and is a direct obligation of the assessed business. However, the restaurant business may, at its discretion, pass the assessment on to customers. The amount of assessment, if passed on to each customer, shall be disclosed in advance and separately stated from the amount of consideration charged and any other applicable taxes, and each customer shall receive a receipt for payment from the business. The assessment is imposed solely upon and is the sole obligation of the assessed restaurant business even if it is passed on to customers. The California Department of Tax and Fee Administration (CDTFA) issued a written opinion that state sales tax applies to the revenue generated from Business Improvement District (BID) assessments on items where state sales tax is levied. In light of CDTFA’s opinion, businesses that pay both state sales tax and CRID assessments on sales are advised to collect sales tax on the assessment revenue.
Bonds shall not be issued.
E. Penalties and Interest
The City shall be responsible for collection of delinquent assessments. The City of Carmel-by-theSea shall retain any penalties or interest collected with unpaid assessments as its fee for collecting the delinquent assessments. Assessed businesses which are delinquent in paying the assessment shall be responsible for paying:
1. Original Delinquency: Any assessed business which fails to remit payment of assessments within fourteen (14) days of the due date shall pay a penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment.
Attachment 2
CRID Management District Plan 13
July 11, 2023
Deleted: April 10
2. Continued Delinquency: If an assessed business fails to remit any delinquent remittance within sixty (60) days, the City may file a complaint against the assessed business. If the City determines than an assessed business is delinquent, the assessed business can be sent directly to collections without further review and the assessed business will be responsible for all late fees, interest, and collection fees.
3. Fraud: If it is determined that the nonpayment of any remittance due is due to fraud, a penalty of twenty-five percent (25%) of the amount of the assessment shall be added thereto in addition to the penalties stated above.
4. Interest: In addition to penalties imposed, any assessed business which fails to remit any assessment shall pay simple interest at the rate of six percent (6%) per year or fraction thereof on the amount of the assessment, exclusive of penalties, from the date on which the assessment first became delinquent until paid.
5. Penalties Merged With Assessment: Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the assessment required to be paid.
F. Time and Manner for Collecting Assessments
Visit Carmel shall be responsible for educating new and existing businesses in the CRID of its renewal.
The City shall notify Visit Carmel when a business closes, opens or changes ownership within the CRID. The CRID assessment will be implemented beginning January 1, 2024 and will continue for nine (9) years and six (6) months through June 30, 2033. The City will be responsible for collecting the gross food and drink sales revenue assessment on a quarterly basis (including any delinquencies, penalties and interest) from each assessed business. The City shall take all reasonable efforts to collect the assessments from each assessed business. The City shall forward the assessments collected to Visit Carmel within thirty (30) days from collection.
Deleted: years
Attachment 2
CRID Management District Plan 14
July 11, 2023
Deleted: April 10
V. GOVERNANCE
A. Owners’ Association
The City Council, through adoption of this Management District Plan, has the right, pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the Owners’ Association of the CRID as defined in Streets and Highways Code §36612.
The City Council has determined that the Visit Carmel will continue to serve as the Owners’ Association for the CRID. The CRID Management Committee, comprised of a minimum of three (3) business owners, or their representatives, paying the CRID assessment, will continue to be responsible for implementing this Plan. Visit Carmel shall continue to be responsible for managing funds and implementing programs in accordance with this Plan and by direction of the CRID Management Committee, and must provide annual reports to the City Council.
B. Brown Act and California Public Records Act Compliance An Owners’ Association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. The Owners’ Association is, however, subject to government regulations relating to transparency, namely the Ralph M. Brown Act and the California Public Records Act. These regulations are designed to promote public accountability. The Owners’ Association acts as a legislative body under the Ralph M. Brown Act (Government Code §54950 et seq.). Thus, meetings of the Board and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. Accordingly, the Owners’ Association shall publicly report any action taken and the vote or abstention on that action of each member present for the action. The Owners’ Association is also subject to the record keeping and disclosure requirements of the California Public Records Act.
C. Annual Report
The VC shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 (see Appendix 1). The annual report shall include:
• Any proposed changes in the boundaries of the improvement district or in any benefit zones or classification of businesses within the district.
• The improvements and activities to be provided for that fiscal year. • An estimate of the cost of providing the improvements and the activities for that fiscal year. • The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year.
• The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
• The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
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APPENDIX 1 – LAW
*** THIS DOCUMENT IS CURRENT THROUGH THE 2023 SUPPLEMENT *** (ALL 2022 LEGISLATION)
STREETS AND HIGHWAYS CODE
DIVISION 18. PARKING
PART 7. PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994 CHAPTER 1. General Provisions
ARTICLE 1. Declarations
36600. Citation of part
This part shall be known and may be cited as the “Property and Business Improvement District Law of 1994.” 36601. Legislative findings and declarations; Legislative guidance The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some of this state’s communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts. (b) It is in the public interest to promote the economic revitalization and physical maintenance of business districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts. (c) It is of particular local benefit to allow business districts to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that receive benefits from those improvements.
(d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific benefit upon the businessesin a business district are not taxesfor the general benefit of a city, even if property, businesses, or persons not assessed receive incidental or collateral effects that benefit them. (e) Property and business improvement districts formed throughout this state have conferred special benefits upon properties and businesses within their districts and have made those properties and businesses more useful by providing the following benefits:
(1) Crime reduction. A study by the Rand Corporation has confirmed a 12-percent reduction in the incidence of robbery and an 8-percent reduction in the total incidence of violent crimes within the 30 districts studied.
(2) Job creation.
(3) Business attraction.
(4) Business retention.
(5) Economic growth.
(6) New investments.
(f) With the dissolution of redevelopment agencies throughout the state, property and business improvement districts have become even more important tools with which communities can combat blight, promote economic opportunities, and create a clean and safe environment. (g) Since the enactment of this act, the people of California have adopted Proposition 218, which added Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of, and activities, expenditures, and assessments by property-based districts. Article XIII D of the Constitution provides that property-based districts may only levy assessments for special benefits. (h) The act amending this section is intended to provide the Legislature’s guidance with regard to this act, its interaction with the provisions of Article XIII D of the Constitution, and the determination of special benefits in property-based districts.
(1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this act, which discourages the use of assessments to fund needed improvements, maintenance, and activities in property-based districts, contributing to blight and other underutilization of property. (2) Activities undertaken for the purpose of conferring special benefits upon property to be assessed inherently produce incidental or collateral effects that benefit property or persons not assessed.
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Therefore, for special benefits to exist as a separate and distinct category from general benefits, the incidental or collateral effects of those special benefits are inherently part of those special benefits.
The mere fact that special benefits produce incidental or collateral effects that benefit property or persons not assessed does not convert any portion of those special benefits or their incidental or collateral effects into general benefits.
(3) It is of the utmost importance that property-based districts created under this act have clarity regarding restrictions on assessmentsthey may levy and the proper determination ofspecial benefits.
Legislative clarity with regard to this act will provide districts with clear instructions and courts with legislative intent regarding restrictions on property-based assessments, and the manner in which special benefits should be determined.
36602. Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize citiesto levy assessments within property and business improvement districts, to ensure that those assessments conform to all constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act. This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes.
36603. Preemption of authority or charter city to adopt ordinances levying assessments Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvement district created pursuant to this part is expressly exempt from the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)). 36603.5. Part prevails over conflicting provisions
Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law, as to districts created under this part.
36604. Severability
This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall remain in full force and effect. Assessments levied under this part are not special taxes.
ARTICLE 2. Definitions
36606. “Activities”
“Activities” means, but is not limited to, all of the following that benefit businesses or real property in the district:
(a) Promotion of public events.
(b) Furnishing of music in any public place.
(c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment. (e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Other services provided for the purpose of conferring special benefit upon assessed real property or specific benefits upon assessed businesses located in the district. 36606.5. “Assessment”
“Assessment” means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to properties or businesses located within a property and business improvement district.
36607. “Business”
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“Business” means all types of businesses and includes financial institutions and professions. 36608. “City”
“City” means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which includes only cities, counties, or a city and county, or the State of California. 36609. “City council”
“City council” means the city council of a city or the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part. 36609.4. “Clerk”
“Clerk” means the clerk of the legislative body.
36609.5. “General benefit”
“General benefit” means, for purposes of a property-based district, any benefit that is not a “special benefit” as defined in Section 36615.5.
36610. “Improvement”
“Improvement” means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following:
(a) Parking facilities.
(b) Benches, booths, kiosks, display cases, pedestrian shelters and signs. (c) Trash receptacles and public restrooms.
(d) Lighting and heating facilities.
(e) Decorations.
(f) Parks.
(g) Fountains.
(h) Planting areas.
(i) Closing, opening, widening, or narrowing of existing streets. (j) Facilities or equipment, or both, to enhance security of persons and property within the district. (k) Ramps, sidewalks, plazas, and pedestrian malls.
(l) Rehabilitation or removal of existing structures.
36611. “Management district plan”; “Plan”
“Management district plan” or “plan” means a proposal as defined in Section 36622. 36612. “Owners’ association”
“Owners’ association” means a private nonprofit entity that is under contract with a city to administer or implement improvements, maintenance, and activities specified in the management district plan. An owners’ association may be an existing nonprofit entity or a newly formed nonprofit entity. An owners’ association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. Notwithstanding this section, an owners’ association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and with the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), for all records relating to activities of the district.
36614. “Property”
“Property” means real property situated within a district.
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36614.5. “Property and business improvement district”; “District” “Property and business improvement district,” or “district,” means a property and business improvement district established pursuant to this part.
36614.6. “Property-based assessment”
“Property-based assessment” means any assessment made pursuant to this part upon real property. 36614.7. “Property-based district”
“Property-based district” means any district in which a city levies a property-based assessment. 36615. “Property owner”; “Business owner”; “Owner”
“Property owner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. “Business owner” means any person recognized by the city as the owner of the business. “Owner” means either a business owner or a property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient. 36615.5. “Special benefit”
(a) “Special benefit” means, for purposes of a property-based district, a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large. Special benefit includes incidental or collateral effects that arise from the improvements, maintenance, or activities of property-based districts even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general enhancement of property value.
(b) “Special benefit” also includes, for purposes of a property-based district, a particular and distinct benefit provided directly to each assessed parcel within the district. Merely because parcels throughout an assessment district share the same special benefits does not make the benefits general. 36616. “Tenant”
“Tenant” means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner.
ARTICLE 3. Prior Law
36617. Alternate method of financing certain improvements and activities; Effect on other provisions This part provides an alternative method of financing certain improvements and activities. The provisions of this part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is valid and effective and is unaffected by this part.
CHAPTER 2. Establishment
36620. Establishment of property and business improvement district A property and business improvement district may be established as provided in this chapter. 36620.5. Requirement of consent of city council
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A county may not form a district within the territorial jurisdiction of a city without the consent of the city council of that city. A city may not form a district within the unincorporated territory of a county without the consent of the board of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city without the consent of the city council of the other city.
36621. Initiation of proceedings; Petition of property or business owners in proposed district (a) Upon the submission of a written petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district.
The amount of assessment attributable to property or a business owned by the same property or business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be included in determining whether the petition is signed by property or business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied. (b) The petition of property or business owners required under subdivision (a) shall include a summary of the management district plan. That summary shall include all of the following:
(1) A map showing the boundaries of the district.
(2) Information specifying where the complete management district plan can be obtained. (3) Information specifying that the complete management district plan shall be furnished upon request.
(c) The resolution of intention described in subdivision (a) shall contain all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the district, a statement as to whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities, and the location and extent of the proposed district. (2) A time and place for a public hearing on the establishment of the property and business improvement district and the levy of assessments, which shall be consistent with the requirements of Section 36623.
36622. Contents of management district plan
The management district plan shall include, but is not limited to, all of the following:
(a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the district. If the assessment will be levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a business owner to reasonably determine whether a business is located within the district boundaries. If the assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property and to allow a business owner to reasonably determine whether a business is located within the district boundaries.
(b) The name of the proposed district.
(c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected property and businesses included, which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a proposed property assessment district shall not overlap with the boundaries of another existing property assessment district created pursuant to this part. This part does not prohibit the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law, including, but not limited to, the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to this part. This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with a property assessment district created pursuant to this part. (d) The improvements, maintenance, and activities proposed for each year of operation of the district and the estimated cost thereof. If the improvements, maintenance, and activities proposed for each year of operation are the same, a description of the first year’s proposed improvements, maintenance, and activities and a Attachment 2
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statement that the same improvements, maintenance, and activities are proposed for subsequent years shall satisfy the requirements of this subdivision.
(e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and debt service in each year of operation of the district. If the assessment is levied on businesses, this amount may be estimated based upon the assessment rate. If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount proposed to be expended in the initial year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this subdivision.
(f) The proposed source or sources of financing, including the proposed method and basis of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against their property or business. The plan also shall state whether bonds will be issued to finance improvements.
(g) The time and manner of collecting the assessments.
(h) The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding these limitations, a district created pursuant to this part to finance capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district. (i) The proposed time for implementation and completion of the management district plan. (j) Any proposed rules and regulations to be applicable to the district. (k)
(1) A list of the properties or businesses to be assessed, including the assessor’s parcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof. (2) In a property-based district, the proportionate special benefit derived by each identified parcel shall be determined exclusively in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the proportional special benefit conferred on that parcel. Only special benefits are assessable, and a property-based district shall separate the general benefits, if any, from the special benefits conferred on a parcel. Parcels within a property-based district that are owned or used by any city, public agency, the State of California, or the United States shall not be exempt from assessment unless the governmental entity can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit. The value of any incidental, secondary, or collateral effects that arise from the improvements, maintenance, or activities of a property-based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit or affect the proportionate special benefit derived by each identified parcel. (3) In a property-based district, properties throughout the district may share the same special benefits. In a district with boundaries that define which parcels are to receive improvements, maintenance, or activities over and above those services provided by the city, the improvements, maintenance, or activities themselves may constitute a special benefit. The city may impose assessments that are less than the proportional special benefit conferred, but shall not impose assessments that exceed the reasonable costs of the proportional special benefit conferred. Because one or more parcels pay less than the special benefit conferred does not necessarily mean that other parcels are assessed more than the reasonable cost of their special benefit. (l) In a property-based district, a detailed engineer’s report prepared by a registered professional engineer certified by the State of California supporting all assessments contemplated by the management district plan. (m) Any other item or matter required to be incorporated therein by the city council. 36623. Procedure to levy assessment
(a) If a city council proposes to levy a new or increased property assessment, the notice and protest and hearing procedure shall comply with Section 53753 of the Government Code. (b) If a city council proposes to levy a new or increased business assessment, the notice and protest and hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the Attachment 2
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public hearing. The city council may waive any irregularity in the form or content of any written protest. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest shall contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the city as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the business or the authorized representative. A written protest that does not comply with this section shall not be counted in determining a majority protest. If written protests are received from the owners or authorized representatives of businesses in the proposed district that will pay 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the proposed assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the city council. (c) If a city council proposes to conduct a single proceeding to levy both a new or increased property assessment and a new or increased business assessment, the notice and protest and hearing procedure for the property assessment shall comply with subdivision (a), and the notice and protest and hearing procedure for the business assessment shall comply with subdivision (b). If a majority protest is received from either the property or business owners, that respective portion of the assessment shall not be levied. The remaining portion of the assessment may be levied unless the improvement or other special benefit was proposed to be funded by assessing both property and business owners.
36624. Changes to proposed assessments
At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and business improvement district that will exclude territory that will not benefit from the proposed improvements, maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 36627. 36625. Resolution of formation
(a) If the city council, following the public hearing, decides to establish a proposed property and business improvement district, the city council shall adopt a resolution of formation that shall include, but is not limited to, all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property, businesses, or both within the district, a statement on whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements need not be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities and the location and extent of the proposed district. (2) The number, date of adoption, and title of the resolution of intention. (3) The time and place where the public hearing was held concerning the establishment of the district.
(4) A determination regarding any protests received. The city shall not establish the district or levy assessments if a majority protest was received.
(5) A statement that the properties, businesses, or properties and businesses in the district established by the resolution shall be subject to any amendments to this part. (6) A statement that the improvements, maintenance, and activities to be conferred on businesses and properties in the district will be funded by the levy of the assessments. The revenue from the levy of assessments within a district shall not be used to provide improvements, maintenance, or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district.
Notwithstanding the foregoing, improvements and activities that must be provided outside the district boundaries to create a special or specific benefit to the assessed parcels or businesses may be provided, but shall be limited to marketing or signage pointing to the district.
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(7) A finding that the property or businesses within the area of the property and business improvement district will be benefited by the improvements, maintenance, and activities funded by the proposed assessments, and, for a property-based district, that property within the district will receive a special benefit.
(8) In a property-based district, the total amount of all special benefits to be conferred on the properties within the property-based district.
(b) The adoption of the resolution of formation and, if required, recordation of the notice and map pursuant to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the management district plan.
36627. Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part. 36628. Establishment of separate benefit zones within district; Categories of businesses The city council may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be provided within the benefit zone and may impose a different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a different assessment or rate of assessment on each category of business, or on each category of business within each zone. 36628.5. Assessments on businesses or property owners
The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant to this part. The city council shall structure the assessments in whatever manner it determines corresponds with the distribution of benefits from the proposed improvements, maintenance, and activities, provided that any propertybased assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622. 36629. Provisions and procedures applicable to benefit zones and business categories All provisions of this part applicable to the establishment, modification, or disestablishment of a property and business improvement district apply to the establishment, modification, or disestablishment of benefit zones or categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of business, follow the procedure to establish, modify, or disestablish a property and business improvement district. 36630. Expiration of district; Creation of new district If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part.
CHAPTER 3. Assessments
36631. Time and manner of collection of assessments; Delinquent payments The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be charged interest and penalties.
36632. Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion of residential and agricultural property
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(a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated benefit to the real property within the property and business improvement district. The city council may classify properties for purposes of determining the benefit to property of the improvements and activities provided pursuant to this part.
(b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of determining the benefit to the businesses of the improvements and activities provided pursuant to this part.
(c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively presumed not to benefit from the improvements and service funded through these assessments, and shall not be subject to any assessment pursuant to this part.
36633. Time for contesting validity of assessment
The validity of an assessment levied under this part shall not be contested in an action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section 36625. An appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of judgment.
36634. Service contracts authorized to establish levels of city services The city council may execute baseline service contracts that would establish levels of city services that would continue after a property and business improvement district has been formed. 36635. Request to modify management district plan
The owners’ association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this chapter. 36636. Modification of plan by resolution after public hearing; Adoption of resolution of intention (a) Upon the written request of the owners’ association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements and activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution determining to make the modifications after holding a public hearing on the proposed modifications. If the modification includes the levy of a new or increased assessment, the city council shall comply with Section 36623. Notice of all other public hearings pursuant to this section shall comply with both of the following:
(1) The resolution of intention shall be published in a newspaper of general circulation in the city once at least seven days before the public hearing.
(2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days before the public hearing, to each business owner or property owner affected by the proposed modification.
(b) The city council shall adopt a resolution of intention which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention.
36637. Reflection of modification in notices recorded and maps Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627.
CHAPTER 3.5. Financing
36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments Attachment 2
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(a)The city council may, by resolution, determine and declare that bonds shall be issued to finance the estimated cost of some or all of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500)) or in conjunction with Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). Either act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although proceedings under the Bond Act of 1915 may be modified by the city council as necessary to accommodate assessments levied upon business pursuant to this part.
(b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements, specify the number of annual installments and the fiscal years during which they are to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated to be raised from assessments over 30 years.
(c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with the timely retirement of the debt.
CHAPTER 4. Governance
36650. Report by owners’ association; Approval or modification by city council (a) The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report. The owners’ association’s first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the property and business improvement district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categories of business, if a classification is used.
(b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information:
(1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district. (2) The improvements, maintenance, and activities to be provided for that fiscal year. (3) An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year.
(4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year.
(5) The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
(6) The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
(c) The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636.
The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the district. 36651. Designation of owners’ association to provide improvements, maintenance, and activities The management district plan may, but is not required to, state that an owners’ association will provide the improvements, maintenance, and activities described in the management district plan. If the management district plan designates an owners’ association, the city shall contract with the designated nonprofit corporation to provide services.
CHAPTER 5. Renewal
Attachment 2
CRID Management District Plan 25
July 11, 2023
Deleted: April 10
36660. Renewal of district; Transfer or refund of remaining revenues; District term limit (a) Any district previously established whose term has expired, or will expire, may be renewed by following the procedures for establishment as provided in this chapter. (b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses. (c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district.
CHAPTER 6. Disestablishment
36670. Circumstances permitting disestablishment of district; Procedure (a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances:
(1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (2) During the operation of the district, there shall be a 30-day period each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for 30 days. The next such 30-day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30-day period. Upon the written petition of the owners or authorized representatives of real property or the owners or authorized representatives of businesses in the district who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall notice a hearing on disestablishment. (b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intention. 36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestablishment of district (a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan. (b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund.
Attachment 2
CRID Management District Plan 26
July 11, 2023
Deleted: April 10
APPENDIX 2 – ASSESSED BUSINESSES
Akaoni
Alvarado Street Brewery
Anton & Michel Restaurant
Aubergine
AW Shucks
Basil Pangaea Grill
Barmel Patisserie Boissiere
Brophy's Tavern Portabella
Bud's at La Playa Promesa
Cantinetta Luca Rise + Roam
Carmel Belle Seventh and Dolores
Carmel Burger Bar Stationaery
Carmel's Hidden Gem Sushi Heaven
Café Luna Terrys Lounge
Carmel's Bistro Giovanni The Pocket
Casanova Restaurant Tommys Wok
Catch Toro Sushi
Chez Noir Tree House Cafe
Cottage Restaurant Tuck Box
Cultura Comida Y Bebida Vesuvio & Star Bar
Dametra Cafe Village Corner
Edwin's Carmel Yafa
Enzo Ristorante Italiano
Flaherty's Seafood Grill & Oyster Bar
Flying Fish Grill
Foray
Forge in the Forest
Grasings Coastal Cuisine
Grill on Ocean Ave
Hogs Breath Inn
Il Fornaio
Il Tegamino
Katy's Place
L Escargot
La Balena
La Bicyclette
Le Souffle
Little Napoli & Bar Napoli
Little Swiss Cafe
Links Club
Mission Bistro
Mulligan Public House
Nicolás Cocina de Herencia
*List as of March 2023
Deleted: Little Swiss Cafe
Deleted: Links Club
Deleted: Mission Bistro
Deleted: Mulligan Public House
Deleted: Nicolás Cocina de Herencia
Attachment 2
CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
Staff Report
June 6, 2023
PUBLIC HEARINGS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Maxine Gullo, Ass't. City Administrator
APPROVED BY: Chip Rerig, City Administrator
SUBJECT:
Resolution 2023-066 Adopting the Fiscal Year 2023-2024 Appropriations Limit RECOMMENDATION:
Adopt Resolution 2023-066 approving the FY23-24 Appropriations Limit BACKGROUND/SUMMARY:
The State Constitution (Article XII IB) places a limit on the amount of monies that a governmental entity is able to spend based upon projected tax revenues. In accordance with State law, the government entity must adopt an annual appropriations limit. This limit is calculated using a prescribed methodology outlined by the State. The limit is adjusted by the change in the cost of living and the change in population, using the California Department of Finance figures.
In calculating the appropriations limit, the City Council has the option to use either the change in per capita income or the percentage change in the local assessment roll. In addition, the Council may either use the change in population within the City or within the County. For consistency purposes, staff recommends using the California per capita personal income of 4.44% and the population growth for the City of Carmel by the Sea of -.49%. The Department of Finance uses a formula that converts the percent change in income and population growth into a ratio and thus the adjustment factors for calculating the GANN limit are
1.0444 for income and 0.9951 for population growth.
These adjustment factors are applied to the current fiscal year (Fiscal Year 2022-2023) GANN limit in order to determine the appropriation limit for the upcoming fiscal year (Fiscal Year 2023-2024). Using this formula, the City’s appropriation limit for Fiscal Year 2023-2024 is $40,742,203. The appropriations subject to the GANN limit is $25,996,802; thus, the City is well within its GANN limit.
FISCAL IMPACT:
The appropriation limit for fiscal year 2023-2024 is based upon budgeted revenues for property tax, sales tax, transient occupancy tax, motor vehicle in lieu and business license tax. Together, these revenues are budgeted at $25,996,802.
PRIOR CITY COUNCIL ACTION:
Council adopted the Fiscal Year 2022-2023 Appropriations Limit on June 7, 2022.
ATTACHMENTS:
Attachment 1) Resolution 2023-066
CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
RESOLUTION NO. 2023-066
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA ADOPTING THE FISCAL YEAR 2023-2024 APPROPRIATIONS LIMIT WHEREAS, under Article XIIIB of the State Constitution, public agencies are required to annually establish maximum appropriations limits referred to as the GANN limit (Limit); and WHEREAS, since fiscal year 1991, the City is permitted to adjust its Limit in accordance with inflation and population adjustment factors; and
WHEREAS, the annual adjustment factors that were selected to calculate the Fiscal Year 2023-2024 Limit were the California per capita personal income adjustment factor of 1.0444 and the Carmel by the Sea population growth factor of 0.9951; and WHEREAS, in accordance with California Government Code Section 7910, a notice of the public hearing was published in the Carmel Pine Cone on May 19, 2023; the documentation used in determining the Limit has been made available to the general public for fifteen days prior to the date of the adoption; and Council conducted a public hearing on the Limit on June 6, 2023; and WHEREAS, the City may not appropriate any proceeds of taxes in excess of its Limit.
NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES HEREBY:
1. Adopts the final calculation of the Appropriation Limit for Fiscal Year 2023-2024 as $40,742,203, which is attached hereto as Exhibit A.
2. Certifies the Fiscal Year 2023-2024 Adopted Appropriations Subject-To-Limit of $25,996,802 does not exceed the GANN limit, which is attached hereto as Exhibits A and B respectively.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA this 6th day of June 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED: ATTEST:
________________________ _________________________
Dave Potter Nova Romero
Mayor City Clerk
Attachment 1
Resolution 2023-066
Appropriations Subject to Limit
Fiscal Year 2023-2024 General Tax Revenues $ 25,996,802 Less Non proceeds of Tax $ -
Total appropriations subject to limits $ 25,996,802
Appropriations Limit
Fiscal Year 2022-2023 Appropriations limit $ 39,201,580 Plus change factors
A. Cost of Living adjustment/Per Capital Income 1.0444
B. Population Adjustment 0.9951
Total Change Factor 1.0393
Increase in appropriations limit $ 1,540,622
Fiscal Year 2023-2024 Appropriations Limit $ 40,742,203 Remaining appropriations capacity $ 14,745,401
Availability capacity as a percent of appropriations limit 36% Exhibit A
City of Carmel-by-the-Sea
Spending Limit Calculations
Fiscal Year 2023-2024
Attachment 1
Resolution 2023-066
City of Carmel-by-the-Sea
Spening Limit Calculation
Fiscal Year 2023-2024
Revenue Source
Fiscal Year
2023-2024
Budget
Property Tax $ 8,465,082
Sales and Use Tax $ 9,605,953
Transient Occupancy Tax $ 6,801,007
Business License Tax $ 557,024
Motor Vehicle in Lieu $ 567,736
Total Budgeted Tax Revenues $ 25,996,802
Exhibit B
Attachment 1
CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
Staff Report
June 6, 2023
PUBLIC HEARINGS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Maxine Gullo, Ass't. City Administrator
APPROVED BY: Chip Rerig, City Administrator
SUBJECT:
Resolution 2023-067 Adopting the Fiscal Year 2023-2024 Annual Operating and Capital Budget
RECOMMENDATION:
Adopt Resolution 2023-067 Adopting the Fiscal Year 2023-2024 Annual Operating and Capital Budget BACKGROUND/SUMMARY:
In accordance with Carmel Municipal Code Section 3.06.020, prior to the beginning of each fiscal year, the City Administrator shall prepare and submit to the City Council a proposed operating and capital budget for the forthcoming fiscal year. The proposed budget, referred to as the Fiscal Year 2023-2024 (FY 23-24) Recommended Budget of $40.9 million is submitted for Council’s consideration. The proposed expenditures totaling $40.9 million, include the General Fund operating budget ($26.3 million), debt service ($528,000), pension mitigation and unfunded liability ($3.0 million), capital budget ($10.9 million), and workers compensation ($76,600). The proposed revenues totaling $30.9 million include property taxes ($8.5 million), sales tax ($9.6 million), transient occupancy tax ($6.8 million), and other revenue ($6.0 million). The FY 23-24 Recommended Budget requires the use of $9.9 million in prior years’ savings ("fund balance") specifically to fund deferred Capital projects.
FY23-24 Recommended Revenue $30,927,502
General Fund Operating Expenditures 26,324,852
Debt Service 528,044
Pension Mitigation / Unfunded Liability 3,007,732
Capital Outlay 10,916,100
Workers Compensation 76,600
FY23-24 Recommended Expenditures $40,853,328
Revenues Over (Under) (9,925,826)
Use of Fund Balance $9,925,826
As the economy continues to rebound from the economic impacts associated with the coronavirus pandemic, the City anticipates an increase in revenues for FY 23-24. Conversely, the City also expects its expenditures to grow in FY 23-24, primarily related to increased staffing, pension costs, general operating costs, and a robust Capital Improvement Plan. Highlights of the budget include:
Salary and benefit costs of approximately $15.1 million with minimal changes to FTE over prior FY (96.23 FTE total).
Pension costs of approximately $3.0 million, which includes $2.0 million for the City’s annual unfunded accrued liability (“UAL”) payment to CalPERS and $1.0 million investment into the City’s established Section 115 Trust.
Services and supplies costs of approximately $11.2 million to fund contractual services, fuel and vehicle maintenance, supplies and materials, utilities, fire services, insurance premiums, Sunset Center, staff training, marketing and other operational costs.
$10.9 million for capital projects and vehicle and equipment purchases in the following categories: public safety ($3.7 million), streets/sidewalks ($3.6 million), facilities ($1.4 million), drainage ($665,000), green infrastructure ($407,000), environment ($629,000), IT/Planning ($103,000) and CIP Contingency ($500,000). $528,000 for debt service payments and $76,600 for workers compensation claim administration, potential claims and costs associated with the implementation of preventive measures.
Staff provided a brief overview of the budget as part of the May 2, 2023 Council meeting. At the May 16, 2023 budget workshop, staff presented a detailed review of the budget. There have been no changes to the FY 23-24 Recommended Budget since the budget workshop.
The Recommended Budget Book has been revised to reflect updates to the Capital Improvement Plan Table 2:
FY 23-24 Recommended Capital Projects and Funding Source. The CIP table now reflects consolidated projects as presented in the Capital Improvement Plan narratives. Additional language was added to the Drainage System Repair narrative on page 55 based upon feedback at the budget workshop.
FISCAL IMPACT:
The FY 23-24 Recommended Budget totals $40.9 million and uses $9.9 million in prior years’ savings ("fund balance") specifically to fund deferred Capital projects.
PRIOR CITY COUNCIL ACTION:
Council received a presentation regarding the Five-Year Financial Forecast and Five-Year CIP on March 21, 2023. Council received a presentation regarding the FY 23-24 Recommended Budget, inclusive of the Capital budget, on May 2, 2023. Council held a FY 23-24 budget workshop on May 16, 2023.
ATTACHMENTS:
Attachment 1) Resolution 2023-067
Attachment 2) FY 2023-2024 Proposed Budget Book
Attachment 3) Budget Questions
CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
RESOLUTION NO. 2023-067
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA ADOPTING THE FISCAL YEAR 2023-2024 ANNUAL OPERATING AND CAPITAL BUDGET WHEREAS, on February 7, 2023, the City Council of the City of Carmel-by-the-Sea adopted the budget schedule for Fiscal Year 2023-2024 in accordance with Carmel Municipal Code Section 3.060.020; and
WHEREAS, the City Council held public meetings on the proposed Fiscal Year 2023-2024 capital projects and Five-Year Capital Improvement Program on March 21, 2023 and May 2, 2023; and
WHEREAS, in accordance with Section 3.06.020 of the Carmel Municipal Code and Section 65103 of the State Government Code, the City’s Planning Commission held a hearing on May 10, 2023 and determined that the Capital Improvement Program is consistent with the City’s General Plan; and
WHEREAS, the City Council has received and completed its review of the proposed Fiscal Year 2023-2024 Operating and Capital Improvement Program Budgets during the budget hearing held on May 16, 2023 and gave general direction on the recommendations contained therein during a public meeting; and
WHEREAS, the City Council held a public hearing on June 6, 2023 for consideration of adoption of the proposed Fiscal Year 2023-2024 Operating and Capital Budget; and WHEREAS the City’s budget totals $40,853,328 for Fiscal Year 2023-2024 consisting of appropriations, inter-fund transfers, General Fund expenditures of $26,324,852, Capital expenditures of $10,916,100 (Capital Projects and Vehicle and Equipment Funds), Debt Service expenditures of $528,044 and Workers Compensation expenditures of $76,600.
WHEREAS the City’s budgeted revenue totals $30,927,502 for Fiscal Year 2023-2024, including General Fund revenue of $24,900,092.
WHEREAS, in accordance with Carmel Municipal Code Section 3.06.010, the City Council shall adopt a budget for expenditures and anticipated revenues prior to the beginning of the fiscal year and the City Council now desires to adopt the Operating and Capital Budgets for Fiscal Year 2023-2024.
NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES HEREBY:
Authorize the City Administrator to make ministerial changes to budgeted transfers and adjust appropriations to or from designated funds for Fiscal Year 2022-2023 as necessary as part of the fiscal year-end process on June 30, 2023.
Approves and adopts the City of Carmel-by-the-Sea’s Fiscal Year 2023-2024 Recommended Operating Budget and Capital Improvement Program Budget.
Attachment 1
Resolution No. 2023-067
Authorize the City Administrator to make ministerial changes to budgeted transfers and adjust appropriations to or from designated funds as necessary during Fiscal Year 2023-2024.
Approve and adopts establishing the General Fund Reserve based upon fifteen percent (15%) of the General Fund Operating Expenditures for Fiscal Year 2023-2024.
A copy of the adopted budget, signed by the Mayor and attested to by the City Clerk, shall be kept on file with the City Clerk of the City of Carmel-by-the-Sea as the official budget of the City of Carmel-by-the-Sea for Fiscal Year 2023-2024.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA this 6th day of June, 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED: ATTEST:
_________________________ _________________________
Dave Potter Nova Romero
Mayor City Clerk
Attachment 1
Fiscal Year 2023-2024
PROPOSED BUDGET
CITY OF CARMEL-BY-THE-SEA
Attachment 2
FY 23-24 PROPOSED BUDGET 2
CITY COUNCIL
DAVE POTTER, MAYOR
BOBBY RICHARDS, MAYOR PRO TEMPORE
JEFF BARON, COUNCILMEMBER
KAREN FERLITO, COUNCILMEMBER
ALISSANDRA DRAMOV, COUNCILMEMBER
CHIP RERIG, CITY ADMINISTRATOR
CITY OF CARMEL-BY-THE SEA
P. O. BOX CC
CARMEL-BY-THE-SEA, CA 93921
T: (831) 620-2000 www.ci.carmel.ca.us
Attachment 2
FY 23-24 PROPOSED BUDGET 3
Table of Contents
INTRODUCTION............................................................................................................................... 4 RECOMMENDED BUDGET MESSAGE........................................................................................ 5 REVENUE...................................................................................................................................... 8 EXPENDITURES ......................................................................................................................... 12 FY 23/24 AUTHORIZED POSITIONS.......................................................................................... 15 ORGANIZATIONAL CHART ....................................................................................................... 17 OPERATING BUDGET................................................................................................................... 18 CITY COUNCIL............................................................................................................................ 19 CITY ATTORNEY ........................................................................................................................ 21 ADMINISTRATION ...................................................................................................................... 22 CITYWIDE (NON-DEPARTMENTAL).......................................................................................... 27 ECONOMIC DEVELOPMENT ..................................................................................................... 29 LIBRARY AND COMMUNITY ACTIVITIES................................................................................. 30 COMMUNITY PLANNING AND BUILDING................................................................................. 34 PUBLIC WORKS ......................................................................................................................... 37 PUBLIC SAFETY......................................................................................................................... 44 CAPITAL IMPROVEMENT PLAN (CIP) ......................................................................................... 49 DEBT SERVICE – FUND 401......................................................................................................... 61 FUNDS OVERVIEW........................................................................................................................ 63 PROJECTED FUND BALANCE..................................................................................................... 65 Proposed Fund Balance as of June 30, 2023........................................................................... 67 Proposed Fund Balance as of June 30, 2024........................................................................... 68 FINANCIAL POLICIES………………………………………………………………………………….....70 Attachment 2
FY 23-24 PROPOSED BUDGET 4
INTRODUCTION
Attachment 2
FY 23-24 PROPOSED BUDGET 5
RECOMMENDED BUDGET MESSAGE
Honorable Mayor Potter, City Councilmembers, and
Residents of Carmel-by-the-Sea:
The Fiscal Year 2023-2024 (“FY 23-24”) recommended budget is submitted for your consideration and tentative adoption on June 6, 2023. This budget continues to be structurally balanced and maintain service levels from last fiscal year, all in an effort to continue to build organizational resiliency. The City has been through a magnitude of challenges including a series of severe winter storms that absorbed a profound amount of our capacity. Throughout, the City’s dedicated staff, volunteer groups and the community at large rallied together to serve and take the best actions under challenging circumstances. Please allow me to reinforce that we have a strong and dedicated workforce, and unparalleled leadership from the City Council combined with an impassioned and solutions-oriented citizenry.
The adopted Operating Budget serves as a policy document, financial plan, operations guide, and communications device. It is a living document that reflects the City Council’s strategic goals and objects and provides a framework to meet future challenges such as rising operational costs and limited growth in revenues.
As we move forward and plan the Fiscal Year 23-24 operating budget for the upcoming year, it is important to take into consideration the various factors that impact our financial health at the global, national, State, and local levels.
At the global level, we continue to face economic uncertainty and instability due to rising interest rates, the fallout from the global pandemic, market distress, and volatility in financial markets. This has resulted in a decrease in revenue for many businesses and organizations, and we must be prepared for potential impacts on our own financial situation.
At the national level, we saw the noteworthy second largest bank failure in our Country’s history and other factors that are, in many ways, consistent with what one would expect in a typical economic debt cycle; with credit card debt soaring 19% in the last quarter alone, for example. We have also seen significant declines in personal savings which collapsed following the end of federal stimulus programs which could add to a greater sell-off of investments and potentially steep market declines.
Going on fifteen years, the current economic cycle is likely the longest in US history. During this period, the nation has benefited from some of the most extraordinary expansionary monetary policy ever conducted, with interest rates held near zero and concurrent investments tracking.
At the state level, California faces its own set of challenges. The state has a large and diverse economy, but it also has a high cost of living and a significant homeless population. The state’s budget is also impacted by various factors such as natural disasters, healthcare costs, and public education funding.
Attachment 2
FY 23-24 PROPOSED BUDGET 6
At the local level, Monterey County is no exception to these challenges. We must also consider factors such as our aging infrastructure, affordable housing shortage, and rising healthcare costs.
Additionally, our tourism industry was impacted by the pandemic, resulting in a decrease in revenue for our county, although the City’s three major sources (Property Tax, Sales and Use Tax and Transient Occupancy Tax) of General Fund revenue are flattening with decreased occupancy in our hotels and uncertainty about travel patterns impacting two of these three major revenue pillars.
As I said, the factors identified above may reflect a monetary tightening that could impact the City’s revenue pillars. As such, we approached our budget planning with an understanding of these factors and their potential impacts on our financial health. This budget is a thoughtful representation working together internally and with the community to identify areas where we can maintain costs without sacrificing essential services, as well as we begin to explore the need for additional sources of revenue to maintain our financial stability.
The recommended budget is not operationally balanced, meaning the total projected incoming revenue does not compensate for our projected expenditures. The recommended budget is, however, structurally balanced – balanced by strategically using unrestricted fund balance (revenue saved over past fiscal years) to address past and current direction of Council. That direction is to maintain core services and invest heavily in deferred infrastructure maintenance and community character. We are fortunate to have available fund balance, accumulated through the prudent budgeting in past years, to close the gap in revenue that we are forecasting. In total, the funds needed to structurally balance the budget approaches $10,000,000. Using this amount will virtually eliminate our current fund balance.
STAFFING
At this time, I am not proposing any increase in our number of staff. That said, I have considered increasing Library staffing and propose to readdress this issue during mid-year budget review as we get a better sense of potential impacts on our local economic situation. The Library has been and continues to be a treasured community resource, which has been busier than ever, as the pandemic begins to wane. As Library usage and community demands for service continue to increase, including Saturday hours, it is important that staffing be able to match that demand. The Library continues to make judicious use of part-time staff, and an increase in the part-time staff budget at mid-year would ensure that the Library meets community needs, whether that be additional programs, additional hours, or both.
I will continue to carefully consider whether to fill future vacancies, and return to the City Council to discuss operational needs as they may change.
CAPITAL IMPROVEMENTS AND MAINTENANCE
On April 5, 2023 and, again on May 2, 2023, the City Council directed carry-over funding in a total amount of $8,088,000 for our Capital Improvements Program (CIP).
Council also directed that we proceed with sixteen additional Capital Improvement Projects for FY 23- 24 for a total of $2,828,000.
The combined total CIP investment for carry-over plus new projects would be $10,916,000 – a figure that includes both internal and external funding. Capital projects included in the recommended budget consist of rehabilitation of City facilities, sidewalk and street improvements, enhanced public safety, and protection and preservation of the natural environment. More generally, the FY 23-24 budget recognizes the importance of investing our “green” infrastructure, and includes funding for Attachment 2
FY 23-24 PROPOSED BUDGET 7
renovating our police station, Library Master planning, and improvements at Sunset Center and other City facilities.
Vehicle & Equipment Fund
The total vehicle acquisition costs are approximately $3,000,000, and the City's 10% reserve target is being implemented beginning in FY 24-25 for $304,000. Currently, the Vehicle & Equipment Fund balance is $366,000, and therefore, no additional funds are being budgeted for FY 23-24. We will continue to increase this Fund as vehicles continue to depreciate.
FISCAL YEAR 23/24 BUDGET AT A GLANCE
FY 23-24 Recommended Revenues $ 30,927,502
General Fund Operating Expenditures 26,324,851
Debt Service Expenditures 528,044
Pension Unfunded Liability Mitigation Expenditures 3,007,732 Capital Outlay Expenditures 10,916,100
Workers Compensation Expenditures 76,600
FY 23-24 Total Recommended Expenditures $ 40,853,327
Use of Fund Balance for Capital Projects $ 9,925,825
Funded Full Time Equivalent (FTE) positions 96.23
Many of you know the level of respect I have for the lessons one can learn by studying the past. And while much of my message may seem dour, history teaches us that economic cycles are intrinsic to local government. Consequently, as clear as I can be about the likelihood of an unavoidable down cycle in two of our three major revenue pillars, I am equally as confident about the inevitable upcycle to follow. The budget I am presenting is not intended to be irrepressibly contrarian; it is meant to be cautious and realistic. In the long term, I remain very bullish, and indeed optimistic about our future.
My profound thanks to my department heads, and especially our Finance Division team, for developing a budget that is realistic given the realities that we are facing. I look forward to Council’s leadership and guidance as we balance fiscal sustainability with the need to fund projects and services for our community.
Respectfully submitted,
Chip Rerig
City Administrator
Attachment 2
FY 23-24 PROPOSED BUDGET 8
REVENUE
The FY 23-24 Recommended Budget includes $30.9 million in estimated new revenue. As illustrated in the chart below, statewide sales tax (Sales Tax) and local Measure C district tax (Measure C), contribute 31% and have overtaken over Property Tax as the largest City revenue source. This shift reveals the importance and impact of the voter approved of Measure C in 2020. With the occurrence of the pandemic, the benefits of the Measure C revenues began to emerge in FY21-22 and mature fully in this budget. Property Tax reflects its customary stable growth accounting for 28% of the budgeted revenue. Coming off of a slower year, Hotel Tax (TOT) holds at 22% of budgeted revenue, followed by Other revenues and Charges for Services at 19%, a decrease over prior FY 21-22.
Property Taxes
28%
Sales Tax
12%
Measure C
19%
Other
10%
Charges for Services
9%
Transient Occupancy
Tax
22%
FY 23-24 Citywide Revenue Sources
Property Taxes Sales Tax Measure C Other Charges for Services Transient Occupancy Tax Attachment 2
FY 23-24 PROPOSED BUDGET 9
REVENUE
Property taxes are estimated at $8.5 million reflecting a 2% projected growth over prior year amended budget. The City’s portion of the Sales Tax is $3.7 million and Measure C $5.9 million, or 12% and 19% of revenue respectively. The significance of the March 2020 Carmel voter approval of Measure C, at a renewed rate of 1.5%, cannot be understated. In the midst of COVID-19, it provided a financial lifeline allowing for the continuance of core services. Measure C continues to play significantly in seeding both operational and capital needs. Sales Tax has fared well also. This FY 23-24 Recommended Budget projects slowing of Measure C and Sales Tax trends as consumers are recovering after post-COVID overspending.
Transient Occupancy Tax (“TOT”) at 10% of the rent charged by a hostelry operator, has slowed over prior year’s high. Recommended at $6.8 million, TOT accounts for 22% of revenues, unchanged over FY 22-23. Charges for Services are fees collected from a specific user of a service, such as plan review, building inspection and ambulance transports and account for $2.8 million, or 9% of the budget. The category of “Other” revenue includes General Fund revenues from business license tax, franchise fee and other intergovernmental revenue as well as restricted revenue for Community Oriented Policing Services (COPS), road maintenance and transportation-related projects and federal and State grants for planning, parks and radio communications.
Attachment 2
FY 23-24 PROPOSED BUDGET 10
REVENUE
This time last year, as shown in Table 1, Estimated Performance and Recommended Budget for Major Revenue Sources, the City was enjoying a notable recovery from COVID after seeing a 26% drop in Hotel Tax and 17% drop in Sales Tax. Now that the economy is recovering from overspending, projecting future trends presents challenges.
Over the last few months, slight inflation improvements materialized in various industries, however real change has yet to take hold. Nevertheless, consumer spending remained relatively strong through the holiday season. Experts vary on whether a recession will occur and to what extent.
Unemployment does reflect a slowdown in taxable merchandise spending to 0.4% in FY 23-24 as the higher cost of utilities, food and other necessities limit dollars available for discretionary and nonessential items.
As we project Sales Tax and Measure C, we remain conservative and vigilant to the current trends.
The dilemma facing us is deciphering if the activity experienced in FY 22-23 as a result of “pent-up demand” will now be replaced with a longer-term change in travel and buying habits as consumers pull back on spending. We remain fully aware that unknowns still exist, whether consumer patterns will settle, and headwinds are in play to be managed. We recognize the economic strains of continued supply chain disruption, rising inflation rates, increased fuel prices and interest rates and their effects on consumer spending patterns. Lastly, geopolitical tensions loom worryingly on our minds. Hence, we have compiled the FY 23-24 Recommended Budget carefully and conservatively. We project a slowing of sales tax activity in the coming year with the City’s Sales Tax coming in at $3.7 million and Measure C $5.9 million in line with current year estimates based on Statewide sales tax trends.
TOT is trending at $8.0 million for FY 22-23, 3% or $250,000 above the prior year actual collections.
Last fiscal year, TOT grew 31% or $1.6 million. The FY 23-24 Recommended Budget assumes continued slowing as world travel slows to pre-COVID levels. For the reasons noted above, we remain guarded in our projections.
Property taxes, which includes secured, unsecured, unitary and property transfer tax, can be relied on to be stable. At the end of this current fiscal year, we anticipate to reach a level of $8.4 million.
The FY 23-24 Recommended Budget projects Property Tax at a total amount of $8.4 million, made up primarily of $7.8 million in secured property tax. National economic reports uniformly indicate that despite the drop-off in sales, housing supply in the state remains constrained. Tight housing supply will have two consequences. First, when interest rates begin to fall, the consequent increase in buyers may again place an upward pressure on housing prices. Second, while prices can and may go lower, there is not enough supply in the market to provide the type of overhang that could lead to acute price declines. This budget conservatively projects growth yet remains confident in the stability of Carmel’s property tax performance.
Attachment 2
FY 23-24 PROPOSED BUDGET 11
REVENUE
As the City looks forward to its future revenues that fund services, capital projects and other initiatives,stepping back and reviewing the City’s historic performance is of value. The chart below depicts the performance of the City’s three major revenue sources over the last 10 years.
Fiscal Year TOT Sales* Property
2015 $5,593,689 $5,280,418 $5,127,974
2016 $5,890,538 $4,897,325 $5,598,743
2017 $6,112,347 $5,373,800 $5,825,889
2018 $6,329,074 $5,476,123 $6,163,959
2019 $6,882,015 $5,719,521 $6,496,558
2020 $5,115,277 $4,766,313 $6,690,948
2021 $5,339,291 $7,028,041 $7,389,657
2022 $7,787,643 $9,596,727 $7,694,722
2023 Estimated $8,038,940 $9,518,760 $8,135,188
2024 Budget $6,801,007 $9,605,953 $8,493,132
*Combination of Bradley Burns & Measure C 1.5%
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2015 2016 2017 2018 2019 2020 2021 2022 2023
Estimated
2024
Budget
Fiscal Year
City's Major Revenues Historical Trend
TOT Sales Property
Attachment 2
FY 23-24 PROPOSED BUDGET 12
EXPENDITURES
The FY 23-24 Recommended Budget totals $40.9 million, which consists of the following:
• Operating Budget, or General Fund, totals $29.4 million, or 72%, of the citywide budget; • Debt service totals $528,044, or 1%, of the citywide budget; • Capital totals $10.9 million, or 27% of the citywide budget.
The Operating Budget consists of the City departments and services. Debt is based upon required payments toward various bonds issued by the City or by other governmental agencies on behalf of the City. As shown in the chart below, FY 23-24 Expenditure by Type, the FY 23-24 Budget includes the Operating Budget and Debt Service. The Operating Budget is further categorized by type of expenditure including salaries and benefits, outside services, and other expenditures as explained below.
Salaries & Benefits
37%
Outside Services
20%
Other Expenditures
7%
Pension
8%
Capital
27%
Debt
1%
FY 23-24 Expenditure by Type
Salaries & Benefits Outside Services Other Expenditures Pension Capital Debt Attachment 2
FY 23-24 PROPOSED BUDGET 13
EXPENDITURES
The City’s largest expenditure is related to the cost of personnel. Salaries and benefits total $15.1 million and account for 37% of the citywide budget. Capital Outlay is the second largest type of expenditure at $10.9 million, or 27% of the budget. The third largest type of expenditure is Outside Services. This category includes various line item accounts, such as advertising and noticing, contract services and community promotions. Contract services are used as an alternative to City staff directly providing the service due to cost savings or the specialized nature of the work being performed and include funding for expenses such as fire service provided by the City of Monterey ($2.9 million); support for the operations of the Sunset Center and other marketing activities ($1.1 million); legal services ($517,000); tree care and landscape maintenance ($798,000) and janitorial service ($272,000).
Other expenditures total $3.0 million and account for 7% of the citywide budget. This category includes various line item accounts such as, retiree healthcare and citywide operational expenses like property tax assessments and utilities. Also included here are the City’s general liability and property insurance premiums ($813,000) and expenses such as public works materials and supplies, telecommunications, fuel, training and conferences, vehicle maintenance, medical and safety supplies and printing and postage.
Pension expenses total $3.0 million, or 7%, of the budget and include the annual required unfunded pension liability ($2.0 million) and annual funding of the City’s Section 115 trust ($1.0 million) for pension mitigation.
The citywide budget is rounded out with Capital Outlay ($10.9 million) accounting for 27% and Debt Service ($528,044) accounting for 1% of the citywide budget.
Attachment 2
FY 23-24 PROPOSED BUDGET 14
EXPENDITURES
Another way to view operating expenditures is by function, as depicted in the “FY 23-24 Expenditures by Function” illustration. Capital Outlay makes up 27% of operating expenditures.
The public safety functions of Ambulance, Fire and Police make up 26% of the budget. The Public Works Department is the next largest operating expenditure at 13% followed by Citywide at 11% of the budget, as it includes the City’s unfunded actuarial liability. In total, Administration, Council, Planning, Legal, Marketing, the Sunset Center, and Library and Community Activities represent the remaining 13% of the Operating Budget.
Administration
8%
Citywide
11% Council
1% Legal
1%
Planning
5%
Ambulance
4%
Fire
8%
Police
14% Marketing
1%
Sunset Center
2% Library/Community
Activities
4%
Public Works
13%
Debt
1%
Capital
27%
FY 23-24 Expenditures by Function
Attachment 2
FY 23-24 PROPOSED BUDGET 15
FY 23-24 AUTHORIZED POSITIONS
0 1
2 3
4 5
6 Category 1 Category 2 Category 3 Category 4
Chart Title
Series 1 Series 2 Series 3
Attachment 2
FY 23-24 PROPOSED BUDGET 16
FY 23/24 AUTHORIZED POSITIONS
0 1
2 3
4 5
6 Category 1 Category 2 Category 3 Category 4
Chart Title
Series 1 Series 2 Series 3
Attachment 2
FY 23-24 PROPOSED BUDGET 17
ORGANIZATIONAL CHART
Carmel-by-the-Sea
Electorate
Council
City
Administrator
Library and
Community
Activity
Library
Admin
Circulation
Youth
Reference
Local History
Community
Activity
Planning
Planning
Building
Safety
Code
Compliance
Public
Works
Admin
Project
Management
Envir.
Compliance
Facilities
Streets
Forest, Parks
and Beach
Public
Safety
Ambulance
Fire
Police
Office of City
Administrator
Clerk
Finance
Human
Resources
Information
Technology
City
Attorney
Attachment 2
FY 23-24 PROPOSED BUDGET 18
GENERAL FUND (101)
OPERATING BUDGET
(CITY DEPARTMENTS AND SERVICES)
Attachment 2
FY 23-24 PROPOSED BUDGET 19
CITY COUNCIL
The City Council consists of the Mayor and four Councilmembers, elected at large by the citizens of Carmel-by-the-Sea on a non-partisan basis. The City Council is the policy-making legislative body of the City. The Council adopts the annual budget, enacts ordinances, and approves major contracts, acquisitions and leases. With the advice and assistance of the City Administrator and City Attorney, the City Council reviews proposals to meet the community’s needs, initiates action for new policies, and allocates resources.
2023-2024Priorities
▪ Continued oversight of the implementation of the strategic plan and updating of City priorities to include some of the following: plan for natural areas, reduce fire risk, review opportunities for enhanced fire/ambulance service; develop forest management plan and update tree ordinance; update zoning code & design guidelines; ADU ordinance; wireless ordinance; increase beautification effort; review barriers to affordable housing; explore street addresses, develop a facilities master plan; underground utilities rule 20A; explore reinstatement of design review board; explore opportunities for Flanders Mansion and Scout House. ▪ Continue to respond to any forthcoming State legislation that undermines local control, especially as it relates to local land-use decisions.
Budget Summary and Service Impacts
▪ $30,000 is budgeted for the Council discretionary grant program Attachment 2
FY 23-24 PROPOSED BUDGET 20
CITY COUNCIL
Attachment 2
FY 23-24 PROPOSED BUDGET 21
CITY ATTORNEY
The City Council appoints the City Attorney. The City Attorney legally represents the City and provides legal advice and/or training to the City Council, City Administrator, boards, commissions, and departments; investigates and resolves claims against the City; defends the City in litigation and administrative actions; initiates and prosecutes litigation on behalf of the City; and drafts and reviews legal documents and agendaitems.
Budget Summary and Service Impacts
▪ The FY 23-24 contract services budget totals $442,000 and consists of $360,000 for general legal services (a return to pre-pandemic budget level) and $75,000 for other specialized legal assistance from the City’s attorney office, including labor negotiations and personnel. The budget total also includes $7,000 for the City’s attorney’s annual performance evaluation. ▪ $75,000 is budgeted for supplementary specialized legal costs, such as wireless communications, and wilbe reflected in a separate line item. This is a change from prior fiscal years and will help isolate legal costs incurred separately from the City Attorney’s office.
City Attorney
Account Number Account Description FY22-23
Amended
Budget
FY22-23
Estimated
Actual
FY23-24
Recommended
101-112-00-42001 Contract Services 435,000 181,916 442,000 101-112-00-42004 Legal Costs 75,000 76,513 75,000
Total $510,000 $258,429 $517,000
Attachment 2
FY 23-24 PROPOSED BUDGET 22
ADMINISTRATION
The City Administrator is appointed by the City Council and responsible for the enforcement of City laws and ordinances; ensuring that the orders of the City Council are executed; preparing the budget and monitoring City finances; and managing day-to-day operations. In addition to overseeing City departments, the Administrator also serves as the director of the centralized administrative functions pertaining to the City Clerk, Finance, Human Resources and Information Technology.
2022-2023 Initiatives and Accomplishments
▪ Ensured the execution of Council policy direction, completion of capital projects, hiring of staff and continuity of daily citywide operations to deliver services in an efficient and effective manner. ▪ Implemented the newly structured mail home delivery program. ▪ Implemented digital signatures, continued efforts for digital storage of records, responded to requests for records.
2023-2024 Priorities
▪ Continue to oversee the City's response to COVID-19 to ensure the safe delivery of City services.
▪ Explore service delivery alternatives and other options to enhance revenue as directed by Council.
▪ Continue hiring of staff.
Administration Budget Summary and Service Impacts
The Administration Divisional budget includes funding for the City Administrator’s performance evaluation within contract services, office supplies, copier fees, and the citywide postage meter.
Funding for the City Administrator’s lunches with staff is now separately reflected under Employee Appreciation.
Attachment 2
FY 23-24 PROPOSED BUDGET 23
ADMINISTRATION
Attachment 2
FY 23-24 PROPOSED BUDGET 24
ADMINISTRATION
CLERK DESCRIPTION
The City Clerk provides timely and accessible service in response to all inquiries and requests for public information and records, and is responsible for the administration of elections, public records requests processing, records management, and the legislative process. Records the City’s legislative history through approved minutes and maintaining City Ordinances and the Municipal Code; facilitates applications for appointments to boards and commissions and coordinates Statements of Economic Interest as well as campaign and other financial disclosure-related filings.
Attachment 2
FY 23-24 PROPOSED BUDGET 25
ADMINISTRATION
FINANCE DESCRIPTION
Finance provides financial analysis, management and reporting through the development of the annual budget, ongoing financial monitoring and reporting of revenues and expenditures. Routine financial duties including vendor payments, payroll, business license processing and the collection of the transient occupancy tax and the administration of pass-through funding to the hospitality and tourism improvement districts. Provides treasury services, invests revenue, and issues and manages debt.
HUMAN RESOURCES DESCRIPTION
Human Resources recruits, develops, and retains a diverse, well-qualified workforce that reflects the high standards of the community, and leads the City departments in positive employee relations, talent management, succession planning, and employee engagement. Services include employee orientation, recruitment, performance assessment, compensation and job classification assessments, safety and wellness programs; and organization development services efficiently to City departments. Staff is responsible for negotiating Memorandums of Understanding with the City’s three bargaining units, subject to Council direction and approval.
The HR divisional budget includes funding for implementing new employee supplemental benefits, managing an updated and expanded citywide Safety Program, and digitizing personnel records using LaserFiche. Funding for the staff appreciation events, such as the annual holiday party, is now separately reflected under Employee Appreciation.
Attachment 2
FY 23-24 PROPOSED BUDGET 26
ADMINISTRATION
IT Description
Information Technology (IT) provides innovative and secure technology solutions that support City departments in delivering quality services to the community. The purpose of IT is to provide a broad range of high-quality technology-related solutions to employees, departments, Council members, and the community; and to support and continuously improve essential technology infrastructure for enabling day-to-day operations of the City.
Attachment 2
FY 23-24 PROPOSED BUDGET 27
CITYWIDE (NON-DEPARTMENTAL)
Citywide, or non-departmental costs, are expenses that are spread across the entire organization.
These items include the unfunded pension liability, the City’s insurance premiums for general liability and property insurance, and the City’s share of costs toward retiree healthcare. Other operational expenses include utilities, property tax assessments and the administrative fee charged by Monterey County for property tax collection.
Budget Summary and Service Impacts
▪ In addition to the employer contribution toward retirement for City employees, the City also is responsible for pension obligations for the unfunded actuarial liability (“UAL”). This amount decreases by $75,000, or 4%, in FY 23-24 compared to the FY 22-23 originally Adopted Budget. The FY22-23 lump sum payment was paid in July 2022 for a savings of $69,000 and those savings were transferred to other budget line items during the fiscal year. ▪ The City will pay the annual lump sum UAL in July, which will result in approximately $75,000 of interest savings. Those savings would then be available for other line item expenses. ▪ The City’s liability insurance premiums are budgeted to increase by $50,000. ▪ The utility expenses for the Forest Theater are separated out for tracking purposes, as required by the new lease.
Attachment 2
FY 23-24 PROPOSED BUDGET 28
MARKETING & ECONOMIC DEVELOPMENT
Two of the City’s unique facilities include the performing arts venue known as the Sunset Community and Cultural Center and the Forest Theater, an outdoor amphitheater. These locations support musical performances, lectures and other cultural activities that enhance the quality of life for residents and promote the City and the Monterey Peninsula as an artistic and cultural destination.
In 2017, the City entered into a lease agreement with the Sunset Cultural Center, Inc. (SCC) for the management of these facilities and the terms of the lease require the City to make an annual grant to SCC to support operations. In 2021, Sunset Cultural Center, Inc.’s management of the Forest Theater ended. The annual grant for management of only Sunset Center remains in the budget.
In 2021, the City entered into a lease agreement with Pac Rep Theater for the management of the Forest Theater. This new lease does not require an operational grant payment. Rather, the City pays for a portion of utilities and repairs, which are budgeted in the Citywide (Non-Departmental) and Public Works budgets, respectively.
The City funds the Monterey County Convention and Visitors Bureau (MCCVB) and Visit Carmel to manage visitors. Visit Carmel maintains the City’s official travel website (www.carmelcalfornia.com) and develops targeted and seasonal marketing campaigns to encourage visitors to stay overnight, dine, and shop within the Village.
In addition to supporting these organizations with General Fund revenues, the City also collects a tourism improvement district assessment from its lodging establishments on behalf of the County and remits these pass-thru funds to MCCVB on a bi-monthly basis. The City also collects an assessment on lodging through the Carmel Hospitality Improvement District and remits these funds to Visit Carmel for the marketing of overnight stays within the Village during mid-week and the non-peak season. As of January 1, 2019, the City also began collecting an assessment from full-service restaurants on behalf of the Carmel Restaurant Improvement District and remits these funds to Visit Carmel for marketing efforts to increase food and beverage sales within the City.
Another partner agency is the Carmel Chamber of Commerce, which operates the Visitor Center in town, publishes a comprehensive visitor guide, and assists businesses. The Chamber also supports small businesses and provides services to assist its members, including listing businesses on the Chamber website, providing educational programs, conducting outreach with businesses via weekly business walks with City elected officials and staff and marketing opportunities to “shop locally”.
Attachment 2
FY 23-24 PROPOSED BUDGET 29
ECONOMIC DEVELOPMENT
Budget Summary and Service Impacts
Visit Carmel has been budgeted funding in the amount of $120,000 annually. Funding to MCCVB is $204,030 equates to 3% of the FY23-24 transient occupancy tax revenue budget of $6.8 million.
Attachment 2
FY 23-24 PROPOSED BUDGET 30
LIBRARY AND COMMUNITY ACTIVITIES
The Library is an efficient medium for the free and equitable distribution and exchange of books, information, and ideas; and a recognized social center providing the community with a place to learn, interact and gather.The Library aspires to be a welcoming place, in-person and virtually, where reading, learning and imagination thrive; a recognized leader and respected voice in our community; and a model library in our industry.
A five-member Board of Trustees appointed by the City Council governs the Library. The Harrison Memorial Library Board of Trustees, the Carmel Public Library Foundation, Harrison Memorial Library Friends of the Library, and the City work together in partnership to sustain the vital and historic tradition of providing free public library service of excellent quality for the residents and visitors of the City of Carmel and the Monterey Peninsula 2022-2023 Workload Indicators / Performance Measures
• 13,138 reference and information questions were
answered.
• 1,808 library cards were issued.
• 67,388 library items were circulated.
• 4,878 people attended library programs.
• 116,854 visits were made to the library.
• 9,623 log-ins were made to library wi-fi.
• 70,638 digital items (e-books, audios, magazines,
films, music) were accessed.
2022-2023 Initiatives and Accomplishments
• Expanded library hours to 5 days a week.
• Completed the conversion of the collection to Radio Frequency Identification (RFID), including purchasing new self-checks to streamline the check-in/out process for both staff and patrons. • Engaged an architect for the Library Master Plan.
• Began a rebranding project in partnership with the Carmel Public Library Foundation • Added additional programming for Children of all ages and launched a small program series for adults.
2023-2024 Priorities
• Restore Saturday hours.
• Continue the implementation of the Library’s Strategic Plan.
Budget Summary and Service Impacts
The City funds the personnel and building maintenance costs for operating the Main and Park Branch libraries. The sources of funding for library materials, programs and services are the Carmel Public Library Foundation, the Friends of the Library, and other donations.
Attachment 2
FY 23-24 PROPOSED BUDGET 31
LIBRARY AND COMMUNITY ACTIVITIES
Attachment 2
FY 23-24 PROPOSED BUDGET 32
LIBRARY AND COMMUNITY ACTIVITIES
The Community Activities department and Commission encourage and support the interaction of neighbors, friends, families and visitors through the shared experience of special events, programs,and gatherings which bring the community together virtually and in-person safely on the City’s streets and in its parks and create opportunities to interact, celebrate, enrich people’s lives, and promote inclusiveness.
The Community Activities department facilitates the weekly Farmers’ Market, permitting for special events, beach events, and filming, the City’s annual special events (Memorial Day, 4th of July, Sandcastle Contest, Pumpkin Roll, Halloween Parade, Veteran’s Day, Homecrafters’ Marketplace, and Holiday Menorah and Tree-lighting), and manages the Vista Lobos Community Room and the Scout House.
2022-2023 Workload Indicators/Performance Measures
• Planned and facilitated nine City special events.
• An estimated 5,000 people attended City Special Events. • Issued 40 event, beach, and film permits.
2022-2023 Initiatives and Accomplishments
• Held first Community Group Fair as part of the Farmers’ Market. • Completed streamlining special event, beach, and film permit process. • Began beta testing the 3rd Thursday initiative.
2023-2024 Priorities
• Explore ideas for new events.
• As part of the Community Activities Strategic Plan, implement a “Citizens Academy” to educate new community members and others interested in how to participate in the civic process in Carmel and acquaint them with all things City. • Continue collaborating with local organizations like Sunset Center or the Monterey Pops on special events.
Budget Summary and Service Impacts
Community Activities department expenses include costs for advertising, banners and signage, event and office supplies for City events, equipment replacements, Community Activities Commission initiatives, and the Farmers’ Market.
Attachment 2
FY 23-24 PROPOSED BUDGET 33
LIBRARY AND COMMUNITY ACTIVITIES
Attachment 2
FY 23-24 PROPOSED BUDGET 34
COMMUNITY PLANNING AND BUILDING
The Community Planning and Building Department (CPB) includes the Planning, Building and Code Compliance Divisions and is responsible for preserving community character while fostering a vibrant community and a high quality of life for its residents, businesses and visitors. ▪ The Planning Division processes current development applications, maintains the General Plan, and ensures that capital programs, zoning and other activities of the City are consistent with the goals and policies of the Plan.
▪ The Building Safety Division is responsible for plans examination and inspections of City and private development projects to ensure compliance with building codes. ▪ The Code Compliance Division ensures compliance with the City Municipal Code. This function includes public education and outreach on existing laws and resolving code violations. 2022-2023 Initiatives and Accomplishments
• Adopted Phase 1 update of the City’s Historic Context Statement to add the period from 1966 through 1986.
• Adopted an ordinance amending the City’s regulations on timeshares. • Completed the scanning/digitizing of physical property files. 100% of parcels have now been digitized and made available for viewing through the City’s GIS map. • Significant progress on an updated Wireless Ordinance, including robust public participation and complete redraft to existing regulations.
• Implemented several measures in line with the CPB 2019 strategic plan’s customer service, technology, and streamlining goals including but not limited to: Implementing a fully online payment system, simplifying CPB’s website portal, completing scanning/digitizing files, refreshing SOPs for the Building and Planning processes. • Multiple community workshops and meetings for the Design Traditions 1.5 Project, culminating in the release of a first draft updates to the Commercial and Residential Guidelines.
• Completed housing feasibility study in accordance with State “SB 2”, local “LEAP”, regional “REAP” grants and began work in earnest on General Plan Housing Element update for completion by December, 2023.
• Implemented a 7-day per week code compliance program, with an emphasis on construction impacts, unpermitted work, and short-term rental enforcement. • Purchased and rolled-out of two (2) residential electric vehicles for Planning, Building, and Code Compliance inspections.
Attachment 2
FY 23-24 PROPOSED BUDGET 35
COMMUNITY PLANNING AND BUILDING
2023-2024 Priorities
• Continued implementation of the CPB 2019 strategic plan, with a focus on customer service, technology, and streamlining processes.
• Adopt General Plan Housing Element and Safety Element updates by December, 2023 in accordance with State “SB 2”, local “LEAP”, regional “REAP” grants. • Adopt Phase 2 (final phase) of the Historic Context Statement update. • Adoption of: (1) updated Accessory Dwelling Unit Ordinance; (2) updated Wireless Ordinance. • Scanning/digitizing of rolled building plans currently in storage at Vista Lobos. • Adoption of updated Design Guidelines and Zoning Code through the Design Traditions 1.5 Project. • Engage staff to participate in more training opportunities to continue the professionalization and growth of the Community Planning and Building Department.
Budget Summary and Service Impacts
• Contract services include $247,000 representing State, local and regional grants for housing studies and General Plan updates, $40,000 for scanning rolled plans stored at Vista Lobos, and $80,000 for the Phase 2 update of the Historic Context Statement.
• In an effort to continue professionalizing and growing the Community Planning and Building Department, the overall budget for training and education has been increased by approximately 25%.
Attachment 2
FY 23-24 PROPOSED BUDGET 36
COMMUNITY PLANNING AND BUILDING
Attachment 2
FY 23-24 PROPOSED BUDGET 37
PUBLIC WORKS
The mission of the Public Works Department is to plan, design, construct, operate, and maintain public infrastructure, streets, sidewalks, storm drains, building facilities, the urban forest, parks, and beach that contribute to the health, safety, and well-being of the Village. Public Works consists of an administrative unit and five operating divisions with responsibilities as follows:
Administration Unit: prepares Council agenda reports, monthly status reports, and annual 5-year Capital Improvement Plans, make presentations, serves as Executive Team liaison to the Forest and Beach Commission and on the TAMC TAC and Traffic Safety Committees, performs engineering services, and provides administrative support, budgeting, scheduling, and performance oversight of the operating divisions.
Environmental Compliance: enforces State storm water quality and waste reduction/ recycling regulations, oversees the City’s waste hauler contract, implements Climate Action and Adaptation Plan projects, serves on Monterey Regional Stormwater
Management Program and ReGen Monterey TAC committees,
manages sensitive projects in the North Dunes and MTNP, evaluates energy reduction initiatives, and coordinates with environmental, resiliency, and sustainability-focused partners.
Facilities Maintenance: maintains and repairs 15 City-owned buildings and facilities with 149,050 square feet, including six historic buildings nearly 100 years old, supports facility renovation capital improvement projects, oversees janitorial contract, obtains quotes and manages trade contractors, implements annual ADA project, and performs annual fire safety apparatus, generators, and backflow inspections.
Forestry, Parks and Beach: prepares reports and staffs Forest & Beach Commission meetings, maintains eight City parks, Carmel Beach, open spaces and landscaped islands, collaborates with volunteer organizations, processes tree removal/pruning permits, reviews development applications, manages multiple on-call tree care and landscape maintenance service contractors, performs tree planting, pruning, and dead or unsafe tree removal services, and provides emergency response during storms.
Project Management: supplemented by project management, architectural and engineering consultants, implements planning, engineering, design, public bidding, and constructionoriented capital improvement projects, performs condition assessments, manages contractors, coordinates with utilities and other departments, checks grading, drainage, and street improvement plans, obtains permits, and prepares specifications, contract documents, and cost estimates.
Street Maintenance: supervises Public Works field personnel and allocates equipment and resources, repairs streets, potholes, sidewalks, curbs, fencing, storm drainage system, berms, traffic signs, striping, and pavement markings, performs street sweeping, provides fleet maintenance services, reviews utility and encroachment permit applications, supports City events, and provides emergency response.
Attachment 2
FY 23-24 PROPOSED BUDGET 38
PUBLIC WORKS
2022-2023 Initiatives and Accomplishments
• Tracked incidents during significant storms in January and March 2023 and cleaned up. • Launched the Coastal Engineering Study, which included a condition assessment of the shoreline infrastructure - a key Climate Adaptation Plan project. • Updated Municipal Code Chapter 17 related to storm water requirements. • For the Police Building renovation, supported the Council Ad Hoc Committee, prepared a Request for Proposal, selected an architect with expertise in police operations, and began a detailed facilities condition assessment and options evaluation. • Prepared a Request for Proposal, Operations and Maintenance Agreement, and Site Lease for renovation, activities programming, and facility maintenance of the Scout House. • Carmel Cares installed 800 native plants in the Forest Theater at no cost to the City. • Awarded three, On-Call Tree Services Contracts covering the next three fiscal years. • Awarded On-Call Landscape Maintenance Service
Contract after a two-year gap.
• Designed, bid, and will complete construction of the City Hall Retaining Wall Repair Project.
• Completed design of 2 Mission Trails Nature Preserve
projects: 3 Drainage Improvements for Stream Stability, and Well Abandonment and Tank and Pump House
Removals.
• Substantially completed the design of six facility renovation projects for City Hall, Harrison Memorial Library, and Sunset Center. • Updated the citywide Storm Drain Master Plan to reflect 20-year, rather than 10-year, storm events, to evaluate drainage improvements needed to adapt to climate change. • Performed Pavement Condition Assessment and updated the StreetSaver Pavement Management System database.
• Performed building condition assessments for City Hall, Fire Station, Public Works, and Vista Lobos facilities.
• Purchased an electric street sweeper utilizing a $250,000 rebate from 3CE. • Held the inaugural Earth Day celebration, in conjunction with the annual Arbor Day event.
Attachment 2
FY 23-24 PROPOSED BUDGET 39
PUBLIC WORKS
2023-2024 Priorities
● Complete construction of the following Capital Improvement Projects:
▪ MTNP – 3 Drainage Improvements for Stream Stability
▪ MTNP – Well Abandonment, and Removal of Tank and Pump House ▪ FY 21 Street Paving Project
▪ FY 23 Concrete Street Repairs Project
● 4 Facility Renovation Projects: City Hall Roof Replacement, HML Exterior/Interior Painting, Sunset Center Hazardous Materials Remediation and Exterior Painting, and Cottage Window Repairs.
● Complete engineering and design of the following Capital Improvement Projects:
▪ FY 24 Street Paving Project
▪ City-wide Drainage System Repairs and Bottlenecks
▪ Electrical Panel Upgrades at Four Buildings
• For the Coastal Engineering Study, substantially complete the Shoreline and Beach Change Analysis, Erosion Exposure Modeling, and Coastal
Hazard and Sea Level Rise Vulnerability, High Priority
Adaptation, Identification, and Action Plan.
• For the Police/Public Works Building, complete the
condition assessment, reflecting safety concerns, police operations/POST standards, code deficiencies, and
deferred maintenance. Begin to implement Council
direction in terms of renovations, reconstruction, and/or pursuit of an entirely new public safety facility.
• For the Urban Forest Master Plan, complete technical
studies, engage in community outreach, and prepare and
present the Master Plan Report.
• For the Scout House, enter into an Operations and Maintenance Agreement and Site Lease with a qualified contractor, complete design, and begin the renovation. • Establish an Underground Utility District utilizing PG&E Rule 20A funds. • Plant at least 60 new trees, and reduce the backlog of tree stump removals. • Implement beautification projects, including landscaping along the Ocean Avenue Median Islands.
Attachment 2
FY 23-24 PROPOSED BUDGET 40
PUBLIC WORKS
Budget Summary and Service Impacts
• The Administration Unit budget includes funding for Contract Services ($22,500), including uniforms, copier lease, and software contracts, training ($12,000), safety equipment ($10,000), subscriptions ($6,500), and office supplies ($5,000). Deleted $50,000 for project management consultant fees which are charged to CIP projects. Line item increases reflect filled all field positions.
• The Street Division budget includes funding for Materials and Supplies ($67,000) for black mutt mitts, asphalt, sidewalk pavers, and traffic paint, Equipment and Vehicle Maintenance ($37,000), Fuel ($48,000), and Contract Services ($65,000) including reconstruction of the San Antonio Pathway, between Second and Fourth Avenues damaged by January storms (not a CIP project) and subject to FEMA reimbursement. Pink Mutt Mitts for all dispensers would increase the budget by $34,800.
• The Facilities Maintenance Division budget
approximates the Amended Budget for FY
22/23, with increases due to deteriorating
older buildings, inflation, and reduced
contractor availability. The budget includes
funding for Contract Services ($597,000)
including janitorial ($272,000), alarm
monitoring, and generator services,
dumbwaiter decommissioning, and HVAC,
plumbing, roofing, and electrical repairs,
and Materials & Supplies ($109,000) for
doors, hardware, lighting, filters, plumbing,
and first aid supplies.
• The Environmental Compliance Division budget includes funding for Contract Services ($252,500), including SB1383 implementation, recycling containers, and waste hauler oversight ($85,000), stormwater quality enforcement and watershed monitoring ($51,000). As well as Vactor cleaning of storm drains, on-call environmental consultants, and climate change initiatives, and Permits and Licenses ($13,000) for stormwater and Air Resources District permits and MTNP invasive removals and North Dune habitat monitoring services. • The Forestry, Parks, and Beach Division budget includes funding for Contract Services ($941,500), including tree contractors for removals, pruning, stump grinding, MTNP tree removals, and beautification projects ($345,000), landscape maintenance contract ($175,000), storm emergency response ($125,000), and consulting services ($100,000), and Materials and Supplies ($76,000) for trees, landscaping, irrigation supplies, and playground repairs. Tree contract budgets have increased to reflect numerous dead/unsafe tree removals due to drought and severe storms, and the backlog of stumps.
Attachment 2
FY 23-24 PROPOSED BUDGET 41
PUBLIC WORKS
Attachment 2
FY 23-24 PROPOSED BUDGET 42
PUBLIC WORKS
Attachment 2
FY 23-24 PROPOSED BUDGET 43
PUBLIC WORKS
66%
26%
4% 3% 1%
FY23-24 PW F&B Expenditure Detail
Tree Related
Services
Landscaping
Services
New trees/plants
Equipment
Landscaping &
Irrigation Materials
Attachment 2
FY 23-24 PROPOSED BUDGET 44
PUBLIC SAFETY
The Director of Public Safety/Police Chief manages the Public Safety Department and three distinct functions:
The Police Department is responsible for law enforcement and crime prevention within the City. The mission of the Department is to protect and serve, with the primary responsibility of ensuring the rights of citizens and visitors to live in peace and safety. It also oversees the management and operation of the Emergency Operations Center; the Volunteers in Policing Program that assists with daily clerical activities, errands, public outreach and special events and the City Community Emergency Response Team of volunteers ready to assist the community during an emergency situation.
The Fire Department is primarily responsible for saving lives and protecting property through the prevention and control of fires. The Fire Department has operated under a contract with the City of Monterey since 2012. The Public Safety Department manages the contract with the City of Monterey and is responsible for oversight of needed equipment and supplies.
Carmel Fire Ambulance provides advanced life support ambulance service to the residents of Carmelby-the-Sea. Ambulance staffing includes paramedic-firefighters and emergency medical technicianfirefighters to provide front line medical emergency response and all-hazard response as a key component of the City’s public safety services. The City of Monterey also provides administrative oversight of this function through a contractual agreement managed by the Public Safety Department.
Attachment 2
FY 23-24 PROPOSED BUDGET 45
PUBLIC SAFETY
2022-2023 Initiatives and Accomplishments
• Vacancies were filled to include (1) Firefighter/Paramedic, (1) Police Officer, (1) Community Services Officer, and (1) Dispatcher. Continued recruitments to fill Police Officer and Dispatcher positions are ongoing.
• In the process of developing new contract language for Fire services with the City of Monterey. • New portable radios were purchased to improve radio communications for the transition from analog to digital for police services. A new radio tower was purchased in conjunction with Monterey County and is in the process of being constructed for activation. • A new parking management software system was implemented for parking/permit issuance.
Paid parking is also being explored as part of the parking management system. • Body worn camera and taser contracts were renewed.
• To enhance public safety within the village, new license plate reader cameras were purchased and installed throughout the city.
Additionally, the camera capture program was implemented, and the use of volunteer groups like (VIPS) volunteers in policing and (CERT) Community Emergency Response Team were utilized
during essential Situations such as storms and flooding. • In December 2022, and January 2023 utilized Police Officers, Public Works, City Staff and (CERT) Community Emergency Response Team members along with (VIPS) Volunteers in
Policing for countywide emergency flood and storm
evacuations/power outages.
• Our VIP (Volunteers in Policing) program had an accumulated almost 269 hours of volunteer time designated to storm
preparation and aid during the county wide storm emergency. The Volunteer in Policing (V.I.P.) program is composed of people who give freely of their time. They enjoy the satisfaction of providing worthwhile contributions to departmental personnel and the Community of Carmel. They are motivated by their interest in a higher quality of life for Carmel, and their own ability to liberate and officer’s time for greater enforcement and investigated impact.
• Our Carmel CERT (Community Emergency Response Team) was also integral to our safety in the community and was activated multiple times during the storm emergency to help with power outages, contacting residents, and assisting in life saving measures alongside police, fire, and ambulance services. Our CERT Team is made up of 30 dedicated volunteers who support our village as well as provide mutual aid to our neighboring communities. During emergencies or disasters, both self-reliance and the use of volunteers under professional direction will be necessary. CERT provides community members with the disaster related know how they need to be self-sufficient and support others until further help can arrive.
Attachment 2
FY 23-24 PROPOSED BUDGET 46
PUBLIC SAFETY
2023-2024 Priorities
• Continue recruitments to fill additional Police Officer(s) and Dispatcher(s) positions to become fully staffed.
• Complete Police Department renovation project.
• Continue to work with contracted services for paid parking implementation in the downtown area of the village.
• Upgrade outdated computer equipment in police vehicles and parking scooters. • Increase training for staff in preparation for promotional advancement and growth.
Fire
• The FY 23-24 Budget increases by $87,447 over the FY 22-23 Amended Budget. Contract services include fire services provided to the Village by the City of Monterey ($2,950,700) and dispatch services ($25,000). Funding for a wildfire risk assessment is also included within the budget ($20,000).
• The FY 23-24 Budget also includes funding for fuel ($19,000) and vehicle maintenance ($35,000) as Carmel is responsible for vehicle repair and replacement under the contract with Monterey.
Attachment 2
FY 23-24 PROPOSED BUDGET 47
PUBLIC SAFETY
Ambulance
• The FY 23-24 Budget increases by $142,377 over the FY 22-23 Amended Budget. Overtime reflects an anticipated decrease due to being fully staffed. Contract services include station coverage by the City of Monterey as needed ($170,000), ambulance billing ($48,000), Monterey Fire management of Ambulance personnel ($24,000). Other major expenses include medical supplies ($48,150), fuel and vehicle maintenance ($21,000), safety equipment ($37,000) and required training to maintain credentials ($19,000). 0 1
2 3
4 5
6 Category 1 Category 2 Category 3 Category 4
Chart Title
Series 1 Series 2 Series 3
Attachment 2
FY 23-24 PROPOSED BUDGET 48
PUBLIC SAFETY
Police
• The FY 23-24 Budget increases by $231,852 over the FY 22-23 Amended Budget. The Department will continue to focus on patrol and responding to public safety needs. • The FY 23-24 Budget reflects an increase of $80,151 in services and supplies over FY 22-23.
The increase is primarily the result of upgrading aging equipment, and an increase in ammunition prices, providing CERT team uniforms and equipment, and training and supplies needed to fill vacant positions. Training expenses were increased to add Critical Incident Training, De-escalation and Racial Bias Training for all department members. Contract services include expenses critical to operations including dispatch, jail booking and animal services provided by Monterey County; tasers, body and surveillance cameras and associated software and maintenance costs. Fuel costs are projected to increase as well.
Attachment 2
FY 23-24 PROPOSED BUDGET 49
CAPITAL IMPROVEMENT
PLAN (CIP)
Attachment 2
FY 23-24 PROPOSED BUDGET 50
CAPITAL IMPROVEMENT PLAN
The FY 23-24 Recommended Budget includes $10.92 million for capital projects. This level of capital spending represents 27% of the total citywide budget of $40.9 million. As the economy recovers from the economic impact of the pandemic, sales tax revenue generated by Measure C, the City’s local sales tax, plays a pivotal role in provide a funding source for the City’s capital needs. The presence of state and county gas and transit taxes also provide a consistent base, albeit partial, for much needed street projects. That said the five-year capital plan points out that, as vital as these funding sources are, they cannot cover the full scope of identified improvements in the long term requiring that we attend to the highest needs and deferring others until funding becomes available.
Capital outlay funds several types of projects as depicted above in the “FY 23-24 CIP Funding by Category” chart. Streets account for 28% of capital expense, with a proposed budget of $3.0 million, largely funded by revenues the City receives specifically for street maintenance and other transportation-related projects. The FY 23-24 Recommended Budget recognizes the importance of facility investments including $3.2 million budgeted for Police Department renovations. Also included in facilities are deferred facility maintenance items equaling $819,000 that addresses Sunset center renovations, City Hall roofing and retaining walls.
Forestry, Parks & Beach reach $803,000, 7% of the CIP budget, and include Urban Forest Master Plan, Scenic Pathways hardscape, and MTNP Streams 3 Construction. Included in this fiscal year’s budget is a $500,000 CIP Contingency to provide funds when needed to award construction contracts that may have outdated cost estimates, such as for carry-over projects, the scope of essential work has increased, and/or when construction bids are competitive, but higher than available funds.
Capital outlay includes $1,155,000 for the projects listed in Table 1, FY 23-24 Recommended Vehicle and Equipment Acquisitions and Funding Source.
Drainage, 6%
Streets, 28%
Facilities, 41%
Foresty, Parks & Beach,
5%
Environment, 4% IT, 0%
Libraries, 1%
CIP Contingency, 5%
Fleet, 10%
Drainage Streets Facilities Foresty, Parks & Beach Environment IT Libraries CIP Contingency Fleet FY 23-24 CIP Funding by Category
Attachment 2
FY 23-24 PROPOSED BUDGET 51
CAPITAL IMPROVEMENT PLAN
Table 1: FY 23-24 Recommended Vehicle and Equipment Acquisitions and Funding Source
Funding prioritizes public safety response capabilities, including enhanced communications and the purchase of new vehicles. A focus on environmentally friendly vehicles is evident in this year’s spending plan. The budget also invests in critical safety equipment related to emergency ambulance services.
Vehicle & Equipment
Ambulance: A contract to build the new ambulance with equipment for $410,000 will be submitted for Council approval at an upcoming meeting. There is a long lead time for delivery of approximately three years. The total combined funding of $275,000 from the Vehicle and Equipment Fund, and a $50,000 donation, will need to be carried forward until the invoice is due.
Staff recommends carrying the funding over each fiscal year until needed for payment, and placing the estimated $85,000 balance for the ambulance into the CIP for Fiscal Year 25-26.
Vehicles (3): The Public Works Forestry Division uses a 2000 Dodge Dakota with 87,100 miles for landscape maintenance. The truck is in poor condition, has an undersized flatbed, and is only capable of carrying tools and hauling a very small load. This vehicle will be replaced with a fullsized electric pickup truck. Forestry also uses a 2002 Dodge Dakota with 62,700 miles for tree services. Despite a slightly larger bed capable of hauling larger debris loads, this truck is also in poor condition. This will also be replaced by a full-sized electric pickup truck. The Police Department's 2006 Ford Fusion Administrative vehicle has 106,500 miles and is used for traveling to court appearances, meetings, training, and conferences. This vehicle will be replaced with an electric sedan. Electric Vehicle grants from 3CE will be pursued for all new electric vehicles. While the amount of any grants is unknown at this time, staff estimates that up to $25,000 may be funded by 3CE for qualifying vehicles. The existing gas-powered vehicles will ultimately be sold at a public auction.
Attachment 2
FY 23-24 PROPOSED BUDGET 52
CAPITAL IMPROVEMENT PLAN
Street Sweeper: In July 2022, Council awarded a $563,814 purchase of a RAVO SE 5 electric street sweeper, offset by a $250,000 Central Coast Community Energy grant. This was funded by the Vehicle and Equipment Fund. The sweeper is currently being manufactured overseas and is scheduled to be delivered after the first of the fiscal year.
Police Radios Lease, Year 3: Twenty-two (22) radios were purchased in 2021 with a payment schedule of $30,000 per year payments for six years, with funding from the Vehicle and Equipment Fund.
IT Servers: This project funding would be used to purchase hardware intended to enable our transition to running a majority of our workload in the cloud. Per the vendor, our existing Nutanix system will be at the end of its useful life by October 2023. This means support and security updates may become unavailable. We will purchase new hardware, software, and retain vendor services to provide a local copy of our critical data to be used in certain emergencies when and if cloud access is interrupted for extended periods. The hardware will also serve as a local cache for our data, making access faster and allowing for local backups to be kept onsite without incurring data charges.
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Attachment 2
FY 23-24 PROPOSED BUDGET 53
CAPITAL IMPROVEMENT PLAN
Table 2: FY 23-24 Recommended Capital Projects and Funding Source Attachment 2
FY 23-24 PROPOSED BUDGET 54
CAPITAL IMPROVEMENT PLAN
In addition, funding for various other capital projects total $9.76 million. The funding sources include MeasureC revenue as well as transportation-related revenues and project specific grants. (See Table 2, FY 23-24 Recommended Capital Projects and Funding Source, located on the following page) Project descriptions follow the table explain the nature and background of each.
The Recommended Budget proposes the use of available fund balances that have resulted from prior period savings and the postponements of capital projects during pandemic shutdowns and staffing shortages. Table 2 has identified these projects that have been deferred and remain in need of attention. The tally and identification of these projects is directly related to the budget strategy taken this year in the attempt to “catch- up”. This use of fund balances as proposed in the FY 23-24 Recommended Budget leaves policy reserves intact and is directly related to this one-year extended level of capital spending.
As we look beyond FY 23-24 into the five-year CIP plan, it becomes apparent that the level of CIP expenditures proposed this year cannot be maintained in the long term. Although the fiveyear plan does its job in articulating the physical project needs it also tells us that the City is faced with more capital needs than it can afford. This is true even if capacity resources are at full strength. Hence, priorities and limits will need to be set in navigating a sound fiscal plan in the longer term.
Streets:
FY 2019/20 Citywide Annual Paving Project: This Project, which includes the bike route and recentlydeleted median islands along San Carlos Street, land was presented to the City Council at the March 7th meeting. This project is bundled with another prior carryover project called Mission Street Sidewalk Repairs (FY 2021/22). The City was allocated $15,311 from RSTP funding via TAMC to repair a significantly uneven brick sidewalk on the west side of Mission Street, between Fifth and Sixth Avenues.
FY 2022/23 Concrete Street Repairs: At the January 2023 meeting, Council awarded a $189,667 Professional Services Agreement to BKF Engineers for design of this project. The project includes repairs and resurfacing of concrete intersections at Ocean/San Antonio, San Carlos/Fifth, San Carlos/Sixth, and along Ocean Avenue, between Monte Verde and San Antonio, and along San Carlos between Fifth and Sixth. An ADA ramp and bulb outs will also be included at the Junipero/Seventh intersection. The total project budget includes $441,300 in external funds (i.e. Measure X, SB-1) plus the Maintenance of Effort requirement of $563,700. The project is currently in preliminary design, and final design is anticipated to be substantially completed this summer. The remaining balance should be carried forward into the Fiscal Year 2023/24 CIP for construction.
FY 2023/24 Annual Paving Project: At the April 4, 2023 meeting, Council adopted a list of streets to be included in the FY 2023/24 annual paving project. The City’s Maintenance of Effort (MOE) contribution of $657,329 would leverage $438,570 of external funds via TAMC from Measure X, Gas Tax, SB 1, and RSTP. The project will include the design and construction of asphalt pavement overlays of five roadway segments, including Upper Ocean Avenue and Santa Lucia Avenue between Dolores Street and Rio Road, removal of failed pavement sections and providing a slurry seal on up to 20 road segments predominately in residential neighborhoods, and replacing broken Attachment 2
FY 23-24 PROPOSED BUDGET 55
concrete, asphalt, and brick sidewalks with permeable pavers along seven road segments in the downtown area. The project will be supplemented with ADA ramps, new trees, bike route markings, and other amenities as appropriate.
Sunset Center Retaining Wall Repairs – Design: Sunset Center requested this project. This project would provide funding to hire an engineering firm to design repairs for four retaining walls around Sunset Center. In the north lot, a 100- foot long, Carmel stone wall along Eight Avenue is leaning, and there are significant cracks in the wall along Mission Street. In the south parking lot off of Tenth Avenue, there is 50-feet of rotted wooden wall on top of a granite wall.
These and other walls require replacements of such as fencing, posts, and railings. Repairs are tentatively programmed in FY 2024/25. The same structural engineering firm will be retained to restore the pathway on the west side of San Antonio Avenue, between Second and Fourth Avenues, which was damaged by the winter storms.
Drainage:
MTNP Stream Stability Projects-Construction: This project, which consists of the first three (3) of eight (8) stream restoration and erosion control measures recommended by the Mission Trail Nature Preserve Stream Stability Study, is largely funded by a California State Parks Per Capita Grant in the amount of $187,000. The design and environmental permits for the project were listed in the completed projects above. Construction must be substantially completed by December 2023. Remaining funding is carried over to Fiscal Year 2023/24.
Drainage System Repair Design Phase I & Phase II: The City-wide Drainage Master Plan identified numerous repairs needed for our existing underground storm drain pipes, as well as significant "bottlenecks" in the drainage system. In October 2022, Council awarded a $50,000 Professional Services Agreement to Schaaf & Wheeler Consulting Engineers to update their 2020 Drainage Master Plan to reflect recommendations from the Climate Committee to evaluate 20- year storm event impacts to the drainage system, versus 10-year storm events as previously evaluated, and as much of the drainage infrastructure of the City was built. The Updated Master Plan is complete, and highlights will be presented to Council at an upcoming meeting. On a parallel track, Neill Engineers was issued a $24,999 Professional Services Agreement to design eight to ten specific drainage repairs and bottleneck elimination projects. The design of those improvements is in progress. Remaining funds should be carried-forward into Fiscal Year 2023/24 to complete the design. At least $4M will be needed to fix the most critical repairs and bottlenecks, and allocations for specific repairs will be recommended in future year CIP plans.
At the April Workshop, Council requested that part of the remaining funds be used for physical construction of drainage improvements, rather than using all budget on engineering design services.
As noted during the May 2, 2023 CIP Review presentation, the Public Works Director noted that this carry-over project scope was changed accordingly. Specifically, of the remaining budget of approximately $500k, approximately $150k will be earmarked for design of the first three (3), high priority projects, and $350k will be available for construction. The first three projects are: 1) Acacia Way headwall upgrade, 2) Santa Rita box culvert repair, between Third and Fourth Avenues, and 3) Santa Fe new pipeline between Mountain View and the MTNP outfall. Project #3 will be bid as a bid additive in case the final costs exceed the remaining budget.
Attachment 2
FY 23-24 PROPOSED BUDGET 56
Facilities:
Police Building Renovation Project: At the February 2023 meeting, the Ad Hoc Committee recommended, and Council approved, issuing a Request for Proposal to architects with expertise in police building design, to perform a detailed evaluation of the building, including elements shared with the Public Works Department. In brief, the evaluation will consider building code deficiencies, needed safety repairs, police operational deficiencies and best practices, and the useful life of the facility with such investments. The architect will also consider swing space during construction, develop a rough cost for complete reconstruction within the current building footprint, and a cost for an entirely new building. The RFP was issued, four proposals were received, and negotiations are underway with the highest-ranked firm. A Professional Services Agreement with the selected architect will be presented to Council for award at an upcoming meeting. The project is being managed by a 4 Leaf project manager.
ADA Upgrades, Year 6: This project would continue the City’s annual program of modifying public facilities, as identified in the City’s 2018 Americans with Disabilities Act Transition Plan, to provide access to the disabled. For the past few years, the City allocated $15,000 per year for this initiative.
To continue to demonstrate good faith efforts to implement these improvements and to reflect higher costs due to inflation, staff is recommending that this year’s allocation be increased to $20,000. As has been the case in the past, the project will be managed, and improvements will be installed, by the Facilities Maintenance Division supplemented by vendors as needed. Tentative projects will include installing additional ADA-compliant railings and water fountains.
Resilience Infrastructure Pilot Project Planning and Design: As recommended in the Climate Adaptation Plan, this project involves developing plans for sustainable backup power to provide continued operations of critical facilities. Preliminary review to date suggests focusing the project on the Police, Public Works, Vista Lobos, and Youth Center in the event of an extended power outage. The project is currently on hold pending the outcome of the Police Building Evaluation (discussed above).
Electrical Panel Upgrades for City Hall, Public Works, Sunset Center, and Vista Lobos Facilities: Electrical panel upgrades are necessary for these facilities to carry new electric vehicle charging stations, and to provide additional capacity for electric loads since these panels are near or potentially over capacity. Based on the Police Building Project, it is recommended that the Public Works facility of these four panels be incorporated into the Police Building, and that the Fire Station, which is also near capacity be substituted in its place. Note that the electrical switches in the Public Works Garage have been replaced with weatherproof panels. Also, in February 2023, $35,000 was added to the Public Works Operating Budget for Mid-Year Budget augmentation to support the active electrical work at the Vista Lobos parking lot. A contract was executed with PG&E to install the $200,000 transformer for 5 new charging stations at Vista Lobos at no cost to the City. Staff is currently negotiating a new Professional Services Agreement with an electrical/mechanical engineering consultant to provide design services for both the 4 Electrical Panel Upgrades and the Vista Lobos EV Charging Station projects.
Sunset Center – 7 Bollards: Our Sunset Center Cultural Center partners requested this project.
There are currently 11 vehicle bollards along the edge of the center parking lot in the vicinity of the box office. Over time, these bollards get hit by trucks and cars. Sometimes, staff is able to repair the bollards for continued use; however, several bollards are no longer useable. This budget would be used to replace at least three bollards at this time and keep four in stock and used when bollards are damaged in the future. Each bollard costs between $2,000 - $3,000 depending on their specific size and lighting features.
Sunset Center – Carpenter Hall Heater: Sunset Center requested this project. The existing system provides radiant heating from the boiler but is at the end of its useful life.While the outdated Attachment 2
FY 23-24 PROPOSED BUDGET 57
system still provides heat, the heat quickly escapes on colder days as soon as the entry doors are open. HVAC technicians were unable to make significant improvements to properly heat the space.
The problem was evident at the Council Strategic Initiative Workshop held at Carpenter Hall in January 2023. This project would include hiring a contractor to replace the heating system.
Sunset Center- North Lot Electrical Panel: This project is a supplement to the carry- over project entitled Electrical Panel Upgrades for City Hall, Public Works, Sunset Center, and Vista Lobos.
Staff is finalizing a Professional Services Agreement with an electrical/mechanical engineering consultant to evaluate and design these panel upgrades. Since the Public Works panel will be evaluated in conjunction with the Police Building project, this panel upgrade has been switched with the Fire Station panel. The existing funding of $75,000 appears to be sufficient for the design of all panels and repair certain panels. However, the electrical panel at the Sunset Center North Parking Lot is not only the most expensive to rebuild but also the most urgent because it is already over capacity and has been tagged by the Building Official. Staff has already been coordinating with PG&E to upsize the power conductors to this panel, with Chargepoint for additional EV charging stations to be installed along the west wall at a later date, and with 3CE for possible grants associated with the EV facilities. The Sunset Center panel also services the north parking lot lighting system and power to the CERT container.
Sunset Center – Portico Design: Sunset Center requested this project. Located at the promenade and concessions exterior, this project would provide for the architectural design of a new portico cover. This project will replace an ornamental garden trellis that was demolished in 2017 and eliminate the remaining columns that are an eyesore and have succumbed to dry rot.
The proposed portico may consist of an approximately 1,000 square foot roof structure to provide a functional outdoor concession space, enhance patron experience, eliminate water intrusion into the concession stand, and provide weather protection for wood framed doors and windows at the lobby entrance.
City Hall Retaining Wall Repair: The redwood retaining wall in the south parking lot of City Hall failed due to the lateral loads from the historic City Hall building over to the under-designed wall. With project management services provided by Ausonio, Inc., structural and geotechnical engineers were retained to design a permanent fix. The fix includes removal of the redwood planter area, constructing a large, concrete wall and footing below the existing building footing, particularly below the office of the Planning and Building Director, and replacing the planter
Facility Renovation Projects: The following four (4) facility renovations have been bundled into one design and construction project for cost-effectiveness and efficiency. These projects are being managed by contract project managers with Ausonio, Inc. In February 2023, Council approved a $78,900 Amendment to the Professional Services Agreement with Ten Over Studio, for architectural and engineering design services for these projects. Preliminary design work is nearly complete, and final design and commencement of construction bidding is likely by the end of Fiscal Year 2022/23; however, remaining funds for these projects will be carried forward for construction in Fiscal Year 2023/24.
• City Hall Roof Replacement
• Harrison Memorial Library Renovations Exterior and Interior Painting • Sunset Center Cottage Window Repairs
• Sunset Center Hazardous Materials Abatement and Exterior Painting Urban Forest Master Plan: The Urban Forest Master Plan (UFMP) is one of Council's high priority strategic initiatives. During FY 2021/22, the City was awarded a Cal Fire reimbursement grant of $150,000 for the UFMP. At the August 2022 meeting, Council awarded a $150,000 Professional Services Agreement with Davey Resources Group to prepare the Plan. Contractual issues, which Attachment 2
FY 23-24 PROPOSED BUDGET 58
delayed the start of the project for several months, have all been resolved. This is an 18-month duration project with the tree inventory and technical studies in progress. An Amendment to the Agreement with Davey is currently being negotiated for additional services that are prudent, and will be forthcoming to Council for approval utilizing the forestry operating budget funds.
Water Well and Tank Removal in MTNP: Regulatory decommissioning of the water well, and physical removal of the elevated tank, stone pump house, and abandoned power pole are needed. Under contract to the City, a Wallace Group project manager completed the design of the project and environmental approvals, including the Coastal Development Permit, have been obtained. The Project is anticipated to be advertised for construction bids by the end of the Fiscal Year 2022/23; however, remaining funds will be carried forward into Fiscal Year 2023/24 for construction.
North Dunes Habitat Restoration Interpretive Signage and Split Rail Fencing: Several organizations, including the North Dunes volleyball players, Rotary Club, and Carmel Cares, have expressed interest in donating funds and/or volunteer support to design and install interpretive signage and/or install split rail fencing along the Ocean Avenue and San Antonio frontages of the North Dunes site. These projects are in line with the recreation goals of the North Dunes Restoration Plan.
Scenic Pathway Hardscape Renovations: Carmel Cares requested to continue our Scenic Pathway Renovation Project following the upcoming repairs to the barrier rails, for which a Purchase Order for $50,000 for lumber and materials is expected to be awarded by the City Council on May 2, 2023. The proposed renovations will include Pathway signage, irrigation repairs, pathway trim edging, decomposed granite repairs, and other hardscape improvements. Council requested staff and Carmel Cares to develop a holistic game plan to cover the complete renovation of the Pathway.
This game plan will need to be carefully developed over the next year since co-mingling public and private funds on publicly-owned infrastructure triggers state public works contracting regulations. For example, for the Scenic Pathway Barrier Rails, City funds are only being used to provide materials, and Carmel Cares will hire a contractor and pay for the costs for installation, under guidance of the Community Planning & Building and Public Works Departments.
ENVIRONMENTAL:
Coastal Engineering Study Phase I & II and the Beach Sand Survey Project: This Study was identified in the Climate Adaptation Plan as a critical document for sea level rise resilience planning to ensure the City has the tools necessary to make decisions related to the long-term maintenance of coastal resources and infrastructure. At the November 2022 meeting, Council awarded a $175,000 Professional Services Agreement to EMC Planning Group, who teamed up with Integral Corporation and Haro Kashunich & Associates, to complete the four key tasks for Phase I of this Project. The results of Task 1, the Coastal Engineering Condition Evaluation, was presented to the Forest and Beach Commission on March 9th and is planned to be presented to the Climate Committee at an upcoming meeting. Remaining funds should be carried over into FY 23-24 to finish Phase I. For Phase II, an Amendment to the Agreement with EMC will be submitted to Council to incorporate the previously- scoped services and negotiated fee into the overall Study. These two phases will then be considered one combined project. Phase II will include three additional tasks focusing on: hazards policy review and revisions, public outreach and engagement, and adaptation monitoring and pathway development. Phase II may be eligible for a California Coastal Conservancy grant of $100,000, and staff will work with the consultants to develop and submit the grant application.
Shoreline Infrastructure Repairs: As noted in the Coastal Engineering Study above, the first task of Phase 1 was the Shoreline Condition Assessment. The Assessment concluded that of the 11 Attachment 2
FY 23-24 PROPOSED BUDGET 59
existing seawalls, 2-4 need repairs, with one (the Fourth Avenue Outfall Wall) as a high priority repair. Similarly, of the 11 beach access stairs, 9 need repairs with 3 considered to be high priority (two of these have been closed due to damage resulting from the winter storms). Finally, of the 6 rock revetments, 4 need repairs, 3 of which are high priority. The total cost for engineering design, environmental permits, and construction for all of these repairs will likely exceed $2 million over the next few years, as outlined in the attached 5-Year CIP spreadsheet; however, this project will initiate the engineering and design of the highest priority repairs, as well as to repair the closed and damaged beach access stairs, with like materials, as a maintenance project which is expected to streamline the regulatory approval process. This starting point will also allow the City to better estimate future costs and phasing to complete all needed shoreline infrastructure repairs.
LIBRARIES:
Library Master Plan – Phases II-IV: This project complements the Library’s Strategic Plan objective to develop facility plans for the Harrison Memorial and Park Branch library buildings. In January 2023, Council awarded a $55,000 Professional Services Agreement to Jayson Architecture to prepare the Master Plan.
CIP PLANNING:
CIP Contingency Fund: While used by other municipalities, this fund would be a new tool for Carmel. This proposed “project” would provide contingency funds when needed to award construction contracts that may have outdated cost estimates, such as for carry-over projects, the scope of essential work has increased, and/or when construction bids are competitive, but higher than available funds. For example, at the April 4th meeting, Council appropriated an additional $113,600 from General Fund End Balance to the CIP Fund to be able to award the City Hall Retaining Wall Emergency Repair Project. The proposed fund may be needed in upcoming construction projects in FY 23-24 including: MTNP 3 Drainage Projects, MTNP Well Abandonment and Tank Removal Project, FY 20-21 Paving Project, Sunset Center Cottage Window Repairs, and/or City Hall Roof Replacement. These funds would be appropriated only by Council authorization at the time construction contracts are awarded, and any remaining balance would carry forward to the subsequent year and used when needed.
KEY PROJECTS AND FUNDING NEEDS FOR THE SUBSEQUENT FOUR (4) FISCAL YEARS OF THE 5-YEAR CAPITAL IMPROVEMENT PLAN (CIP)
A preliminary 5-year Capital Improvement Plan has been developed. Although only the first fiscal year (23-24) would be funded as part of the City Budget, the remaining years serve as a planning tool to identify, well in advance, anticipated future projects. The 5-year CIP is a “snap shot” in time of anticipated needs for future infrastructure revitalization funding in the outer years.
As a dynamic planning document, the CIP for Years 2-5 is subject to change as updated information becomes available. Staff suggests that this year, should this 5-Year CIP be accepted by Council, staff could post this document on the City’s website.
The following are major projects, by asset category, and ballpark budget estimates (including probable grants), for Years 2-5:
Streets: Paving overlays, micro-surfacing treatments, slurry seals, sidewalk repairs, parking lot resurfacing, retaining walls, and bicycle master plan = $3.24M City plus $1.79M external funds.
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FY 23-24 PROPOSED BUDGET 60
Drainage: Includes: drainage pipe repairs and upsizing for 20-year storm events, bottleneck reconfigurations, and CDS reconstruction = $2.93M.
Facilities: ADA upgrades, electrical panel repairs, painting, critical repairs/code corrections to City Hall, Vista Lobos, Fire Station, and park restrooms, Flanders structural repairs, resilience and energy upgrades, and equipment replacements = $2.8M.
Forest, Parks, Beach: Construct MTNP stream stability projects, Scenic Pathway and other Carmel Cares joint projects = $0.8M City plus donations to be determined.
Environmental: Shoreline infrastructure repairs, Coastal Engineering Study, Phase 3, and climate action change initiatives = $2.0M plus $0.5M grants.
IT: Equipment replacements, security upgrades, Police records management system, and GIS applications expansion =$0.63M.
Libraries: Renovations as prioritized in the Master Plan = $1.1M plus $2.0M donations. Note: The Library Foundation will be embarking on a fundraising campaign to be able to advance the design and construction of significant improvements to both library buildings based on the Master Planning program.
Fleet: Replace outdated heavy equipment, including dump truck, water truck, asphalt patch truck, speed radar trailer, and other vehicles nearing the end of their useful lives with electric vehicles when possible, and fund balances for Police radios lease and ambulance purchase = $1.24M plus $0.1M grants.
The grand total estimate of $31.7 million (the four-year term yr. 2 through yr. 5) clearly exceeds anticipated revenues and fund balance availability for projects in those future years. Since the noted infrastructure above will not repair itself and will simply continue to decline without adequate funding, additional revenue should be evaluated. The Five-Year CIP would significantly draw upon available fund balances assuming the identified level of capital expenditures progress without alternative funding sources. Although important policy reserves would be preserved, the City would deplete its fund balance cushion taking away its ability to be nimble in the face of uncertainty and economic recession or crisis.
Attachment 2
FY 23-24 PROPOSED BUDGET 61
DEBT SERVICE – FUND 401
Debt service includes payments for the Next Generation Radio Project, the Sunset Center, and the Pension Obligation bonds. These payments total $878,000 as shown in Table 1, FY 23-24 Debt Service, below.
Countywide Radio Project: On April 7, 2009, City Council authorized the City’s participation in the Countywide Monterey County Next Generation Radio project (NGEN), including approving a pro-rata share of infrastructure costs and debt financing. The purpose of the project was to enhance communication among public safety agencies. The Certificate of Participation (COP), issued for $381,440, matures on June 30, 2023. Our final payment of $14,744 with will be made FY 23-24.
2020 Refunding Lease Revenue Bonds: On September 10, 2010, City Council approved the issuance and sale of certificates to finance improvements at the Sunset Center (the Sunset Theater Project), including the refinancing of the City’s lease payment obligation related to the preliminary financing of the Sunset Center (the 2010 Refunding Lease Revenue Bond). The COP of approximately $7.6 million included a maturity date of November 1, 2031. On September 3, 2020, the Public Improvement Authority and City Council determined that a refunding of the 2010 Bond was in the City’s best interest to take advantage of historically low interest rates and to achieve cash flow savings in light of the economic impact of COVID-19 on the City’s revenues.
The 2020 Refunding Lease Revenue Bond of approximately $3.9 million matures on November 1, 2032. As part of the refinancing, the City made significantly lower interest only payments in FY 22- 23; however, payments now include principal and have increased the total payment to $513,300.
Funding Sources
General Fund revenues are the source of funding for debt service payments. The General Fund (Fund 101) will transfer $528,044 to Debt Service (Fund 401) in FY 23-24.
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FY 23-24 PROPOSED BUDGET 62
OTHER FUNDS
Attachment 2
FY 23-24 PROPOSED BUDGET 63
FUNDS OVERVIEW
The City uses a fund accounting structure, which is an accounting structure to record and track resources that are limited in use by law or governing agency. The major governmental funds are the General Fund, Measure D and Capital Projects. The first set of funds listed below are discretionary, meaning there are no legal or policy-related restrictions on their use and can be used at the discretion of Council for services and projects.
General Fund (Fund 101)
Most of the City’s revenues and the expenditure budgets for City services and daily governmental operations are housed within the General Fund (Fund 101) and this is where the majority of the City’s financial activity occurs. The major revenue sources associated with the General Fund include property tax, the City’s share of the statewide sales and use tax, charges for services, franchise fees, business tax, and intergovernmental revenue. These revenues are considered to be general in nature. Throughout this budget document, the General Fund is also referred to as the Operating Budget and City policy recommends a 15% Reserve.
Hostelry Fund (102)
This fund is used to account for the transient occupancy tax and is intended to fund the portion of the municipal budget covering community and cultural and recreation activities including, but not limited to Sunset Center and the Forest Theater, parks, public facilities and municipal structures, and parking lots; acquisition and improvement of parks, recreation land and other municipal purposes as determined from time to time by the City Council; provided, that all such uses shall be in accordance with the General Plan of the City and General Fund for usual and current expenses. City financial policy recommends a reserve of 10% of revenues.
Measure C Sales Tax (Fund 206)
Carmel voters approved a temporary (10 year) 1% increase in the transactions and use tax in 2012 known as Measure D. On March 3, 2020, voters approved Measure C, which increases the tax to
1.5% for 20 years. Measure C may be used for debt service, capital projects and general City services.
The next set of funds are restricted as there are requirements prescribed by the local, state or federal governmental agencies regarding how these funds may be used.
Gas Tax (Fund 201)
This fund is used to account for revenues collected in accordance with California Streets and Highway Code.
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FY 23-24 PROPOSED BUDGET 64
FUNDS OVERVIEW
Transportation Safety (Fund 202)
Measure X, a 30-year 3/8 of one-percent transactions and use tax, was passed by the voters in November 2016 to fund transportation safety and mobility projects in Monterey County. This fund accounts for the expenditures for eligible transportation safety projects.
COPS Grant
This fund accounts for the expenditures for the Department of Justice Community Oriented Policing Services (COPS) grant for public safety. This fund transfers into the General Fund for the Police Department budget.
Parking in Lieu (Fund 204)
This fund is used to account for activities associated with parking in-lieu fees as prescribed by Carmel Municipal Code Section 17.38.040.
Asset Seizure (Fund 205)
This fund accounts for expenditures related to asset seizures.
The next two funds pertain to certain types of expenditures. • Capital Projects (Fund 301): This fund accounts for resources utilized, committed, assigned or restricted for capital projects.
• Debt Service (Fund 401): This fund accounts for activities related to the repayment of the Certificate of Participation, Pension Obligation Bond and capital lease obligations.
The next set of funds are considered to be internal service funds. • Workers Compensation (Fund 501): This fund accounts for workers’ compensation insurance provided to departments on a cost reimbursement basis. • Other Post-Employment Benefits (OPEB) Liability Reserve Fund: This fund accounts for other post-employment benefits.
• Vehicle and Equipment Replacement Fund: This fund is to set aside financial resources for future purchases of replacement equipment essential to the operations of the City.
There is one agency fund.
Refundable Deposits: This fund accounts for monies received that are unearned and required to be returned by the City.
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FY 23-24 PROPOSED BUDGET 65
PROJECTED FUND BALANCE
The accompanying tables depicts the Projected Fund Balance for FY 22-23 and FY 23-24.
General Fund
The General Fund is estimated to start FY 23-24 with a fund balance of $13.1 million and end with $6.1 million on June 30, 2024 due to the General Fund unassigned balance being utilized and the use of estimated new revenue and transfers in from other funds, such as the Hostelry Fund. Fund balance is the accumulation of prior years’ savings and may also be considered a “rainy day fund”. Carmel Municipal Code Section 3.06.040 states that the City shall maintain a General Fund balance equivalent to at least 15% of the General Fund budget in each fiscal year and this is referred to as the reserve. A reserve may be considered as a minimum amount of savings that the City has available for emergency or other purposes.
Hostelry Fund
FY 23-24 assumes $6.8 million in new revenue. New revenue and fund balance for a total of $10.2 million will be transferred to the General Fund to support citywide operations and CIP projects.
Gas Tax (Fund 201)
Revenue of $179,934 is anticipated in FY 23-24 to be transferred to Capital Projects for street paving.
Transportation Safety (Fund 202)
Revenue of $231,779 is anticipated in FY 23-24 to be transferred to Capital Projects for street paving.
COPS Grant
Revenue of $158,000 is anticipated in FY 23-24 and will be transferred to the General Fund for Police Department salaries for eligible positions.
Parking in Lieu (Fund 204)
There is no activity budgeted in this fund for FY 23-24.
Asset Seizure (Fund 205)
There is no activity budgeted in this fund for FY23-24.
Measure C Sales Tax (Fund 206)
Measure C has a projected fund balance of $1.9 million as of June 30, 2023. The FY 23-24 projected revenue of $5.9 million will be transferred to the Capital Improvement Projects ($5.07 million) and Vehicle & Equipment Replacement ($830,000) There is no reserve requirement for Measure C.
Capital Projects (Fund 301)
This fund is projected to end FY 23-24 at $5,015,998 representing 20% of the 5-Year CIP forecast City Funds total.
Debt Service (Fund 401)
The FY 23-24 debt service activity is $528,044. Additional details on the bonds is found within the debt service section of this document.
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FY 23-24 PROPOSED BUDGET 66
PROJECTED FUND BALANCE
Workers Compensation (Fund 501)
The anticipated costs of claims payments, third party administrator services, and preventative costs are reflected in this fund. Previously, these expenses were accounted for in the General Fund. Based upon the auditor recommendation, they will be accounted for in this fund.
Other Post-Employment Benefits (OPEB) Liability Reserve Fund This fund was created by Council resolution to set aside funding to address OPEB liabilities. There is no reserve requirement. There is $1.8 million in the fund and no planned activity for FY 23-24.
Vehicle and Equipment Replacement Fund
The planned activity in this fund for FY 23-24 in the amount of $1,155,000 will be covered by new revenue and transfers in from Measure C Sales Tax Fund. -----accompanying tables on next page---
Attachment 2
FY 23-24 PROPOSED BUDGET 67
PROPOSED FUND BALANCE AS OF JUNE 30, 2023
Attachment 2
FY 23-24 PROPOSED BUDGET 68
PROPOSED FUND BALANCE AS OF JUNE 30, 2024
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FY 23-24 PROPOSED BUDGET 69
FINANCIAL POLICIES
Attachment 2
BUDGET POLICIES AND PROCEDURES
The budget process for the City of Carmel-by-the-Sea involves the citizens, City Council, and staff. Each person plays a critical role in the development of the budget for the upcoming year.
The annual budget and operating plan balances the public service demands of the community with the fiscal resources of the City. It is intended to achieve the goals and objectives established by the City Council.
The goal of the City Administrator is to present a balanced budget to the City Council for review and adoption. A balanced budget is a budget in which sources meet or exceed uses. Available funding sources shall be at least equal to recommended appropriations. As a general rule, the year-end undesignated General Fund balance should not be used to fund ongoing operations.
As set in the Carmel Municipal Code prior to the beginning of each fiscal year, the City Council shall adopt a budget for expenditures and anticipated revenues. On or before February 15th of each year, the City Administrator will present to the City Council a proposed budget schedule.
The City Administrator prepares and submits to the City Council a proposed operating and capital budget for the forthcoming fiscal year. The City Council shall adopt the budget by July 1st.
The City Administrator shall have the right to approve the transfer of appropriations within a departmental budget; however, no additional positions shall be created without the authorization of the City Council. All transfers of appropriations between departments or in regards to capital items or projects shall be approved by the City Council. The City Administrator shall be charged with the responsibility of controlling the expenditures for all departments in accordance with the approved budget. A report on current year revenues, expenditures and fund balances shall be maintained.
The accounts of the City are organized on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balanced set of accounts. The minimum number of funds is maintained consistent with legal and managerial requirements. Annually appropriated budgets are legally adopted on a budgetary basis for the governmental fund types (General Fund, Special Revenue Fund, Debt Service Fund, and Capital Projects Fund) and are controlled on a fund and departmental level. These funds are used to account for most of the City’s general government activities. Governmental fund types use the flow of current financial resources measurement focus and the modified-accrual basis of accounting and budgeting.
Expenditures are recognized as encumbrances when a commitment is made. Unencumbered appropriations lapse at year-end.
FINANCIAL AND BUDGET POLICIES
70 Attachment 2
FINANCIAL POLICIES
The City of Carmel-by-the-Sea has strong financial policies that provide City Council direction to allow staff to provide sound fiscal planning and continued management of fiscal integrity. The financial policies are divided into five categories: Capital Budget Policies, Operating Management, Fund Balance Policy, Debt Policies, and Investment Policies. The City has financial policies that are adopted by the City Council with review every two years during the budget development process. The financial policies help ensure that the City maintains a healthy financial foundation into the future.
The goal of these policies is to promote:
• An extended financial planning horizon to increase awareness of future potential challenges and opportunities
• Setting aside reserves for contingencies, replacement of capital equipment, and other similar needs
• Maintaining the effective buying power of fees and charges and increasing cost recovery where directed to do so
• Accountability for meeting standards for financial management and efficiency in providing services
• Planning for the capital needs of the City
• Maintaining manageable levels of debt while furthering quality bond ratings • Communication to residents and customers on how the community goals are being addressed
CAPITAL BUDGET POLICIES
The City develops an annual five-year plan for capital improvements; it includes project design, development, implementation, and operating and maintenance costs. Each project in the Capital Improvement Plan (CIP) shows the estimated capital and on-going maintenance costs, known and potential funding sources and a design/development schedule. As used in the CIP, projects include land acquisition, buildings and facilities construction; these projects do not have a cost threshold. A capital outlay (fixed asset) purchase is any single item or piece of equipment that costs more than $10,000 and has an expected useful life exceeding one year.
The development of the Capital Improvement Plan is coordinated with the development of the operating budget. The CIP is a planning document; the City Council appropriates funding for capital projects in the annual operating budget. Costs for professional services needed to implement the CIP are to be included in the appropriate year’s operating budget.
Annual operating budgets should provide adequate funds for maintenance of the City’s buildings and maintenance and replacement of the City’s capital equipment. The City will make all capital improvements in accordance with an adopted and funded capital improvement program. Prior to ratification of the capital budget for the forthcoming year by the City Council, 71 Attachment 2
the Planning Commission shall review the capital improvement plan and shall advise the City Council as to its recommendations regarding the proposed capital projects in accordance with the Government Code.
Capital (Policy No. C94-01)
Capital expenditures shall be effectively planned and controlled.
Guidelines:
1. The level of capital improvement expenditures, excluding road maintenance program expenditures and lease payments, is established at three and one-half percent (3.5%) of total revenues.
2. Funding for the road maintenance program should improve the pavement condition index.
3. The City shall maintain a Five-Year Capital Improvement Program (CIP), which shall be updated at least annually as part of the budget review process.
4. The City shall annually establish a phasing calendar for capital improvement expenditures.
5. At least ten percent (10%) of the unrestricted funds designated for capital project expenditures shall be set aside for unanticipated expenditures.
6. The City shall conduct periodic reviews of property and facilities to determine the appropriate use and disposition of said property and facilities.
7. The City shall consider the ongoing impact of operations and maintenance expenses before undertaking any capital improvement expenditure.
8. The City shall maintain a capital reserve policy as described in the Reserve Policy.
9. Public participation in the Capital Improvement Program is a priority concern for the City.
10. All projects included in the Capital Improvement Plan shall be consistent with the City’s General Plan.
11. Capital projects that are not encumbered or completed during the fiscal year are required to be rebudgeted to the next fiscal year and subsequently approved by the City Council. All rebudgeted capital projects should be so noted in the proposed budget.
OPERATING MANAGEMENT (Policy No. C94-01)
Operating revenues shall exceed operating expenditures.
Guidelines:
1. The annual operating budget shall contain a current surplus (or “revenue buffer”) of at least five percent (5%) of projected expenditures.
2. A balanced budget is a budget in which total funding sources meet or exceed uses.
3. An appropriated City Discretionary Account of at least one-half of one percent (0.5%) of total projected General Fund expenditures shall be maintained.
4. Ongoing expenses shall not be funded with one-time revenues.
5. The City shall establish internal service funds for the repair, operation, and replacement of rolling stock and data processing equipment.
6. The level of capital outlay expenditures is established at three percent (3%) of total revenues.
7. The City shall annually establish a phasing calendar for capital outlay expenditures. 72 Attachment 2
8. The City shall develop a five-year forecast of operating revenue and expenditures.
9. The City shall establish salary adjustments in conjunction with the budget process.
10. The City shall review the relationship between fees/charges and the cost of providing services at least every three years.
11. The City’s fees and charges for services shall be adjusted annually, based upon the San Francisco-Oakland Consumer Price Index.
12. The City will seek to comply with suggested criteria of the Government Finance Officer’s Association in producing a budget document that meets the Distinguished Budget Presentation criteria.
FUND BALANCE POLICY
The Fund Balance Policy is designed to develop standards for setting reserve levels for various, significant City funds. Adequate fund balance and reserve levels are a necessary component of the City’s overall financial management strategy and a key factor in external agencies’ measurement of the City’s financial strength. The City shall maintain reserves at a prudent level, and shall use reserves appropriately with a focus on contributing to the reserves in good times and drawing on the reserves in times of difficult budget periods to maintain a consistent level of service and quality operations. Use of reserves are to supplement the annual budget.
Guidelines:
1. General Fund and Hostelry Fund reserves shall be maintained at no less than ten percent (10%) of their annual projected revenues.
2. The City shall maintain prudent reserves for identified liabilities a. A Vehicle Replacement reserve will be maintained sufficient to replace vehicles and heavy equipment at the end of their useful lives, with the target being 10% of the total City fleet replacement value.
b. Technology equipment replacement reserves will be maintained sufficient to repair covered equipment and for replacement at the end of its useful life.
3. The City will maintain a long-term budget stability reserve consisting of any unassigned General Fund balance. When available, the year-end General Fund operating surplus will be dedicated to the long-term budget stability reserve.
4. A general capital reserve fund will be maintained with a targeted balance of 20% of the estimated total five-year capital improvement plan project expenditure. Net proceeds from the sale of City owned property will be dedicated to the general capital reserve.
Funds in the general capital reserve will be allocated through the budget process for capital projects.
5. Reserves shall be used only for established purposes.
6. Depleted reserves shall be restored as soon as possible.
7. A minimum level for each of the reserve funds shall be established (see chart below).
8. The City shall maintain reserves required by law, ordinance and/or bond covenants.
DEBT POLICIES
The City considers the use of debt financing for one-time capital improvements that benefit the residents of Carmel-by-the-Sea when the term of the financing is no longer than the project life, and when specific resources are found to be sufficient to provide for the debt. Use of long73 Attachment 2
term debt is limited to capital projects or special projects or obligations that cannot be financed from current revenues. The City has traditionally kept annual debt service payments to less than 5% of the budget.
Use of Long-Term Debt Policy
The City recognizes that it may need to enter into long-term financial obligations to meet the demands of providing a high quality level of government services to our community. The following long-term debt policy sets the considerations for issuing debt and provides guidance in the timing and structuring of long-term debt commitments by the City.
General Practices:
1. The City will strive to maintain good relations with credit rating agencies, investors of the City’s long-term financial obligations and those in the financial community that participate in the City’s financings and demonstrate City officials are following a prescribed financial plan. The City also will strive to maintain and, if possible, improve its current AA+ bond rating in order to minimize borrowing costs and preserve access to credit. The City will follow a policy of full disclosure by communicating with bond rating agencies to inform them of the City's financial condition.
2. Bond issue proposals are to be accompanied by an analysis defining how the new issue, combined with current debt, impacts the City’s debt capacity and conformance with City debt policies. Such analysis shall include identification of the funding source, an assessment of the ability to repay the obligation, the impact on the current budget, commitments to future budgets, maintenance and operational impact of the facility or asset and the impact on the City’s credit rating, if any.
3. City Council must review such analysis, including existing debt level, ability to pay debt service, impact on City services, and make a finding that use of debt is appropriate.
4. Debt service costs (COP, Lease Purchase Agreements and other contractual debt that are backed by General Fund Operating Revenues) are not to exceed 25% of the City’s General Fund operating revenues.
5. The City recognizes that it is of the utmost importance that elected and appointed City officials, and all others associated with the issuance of City debt, not only avoid the reality of a conflict of interest, but the appearance thereof as well. City officials must conduct themselves in a fashion consistent with the best interests of the City and taxpayers.
6. Bonds will be sold on a competitive basis unless it is in the best interest of the City to conduct a negotiated sale. Competitive sales will be the preferred method. Negotiated sales may occur when selling bonds for a defeasance of existing debt, for current or advanced refunding of debt, or for other appropriate reasons.
The City will consider the issuance of long-term obligations under the following conditions:
1. The City will use debt financing for one-time capital improvement projects and specific nonrecurring equipment purchases or refunding of existing liabilities, and only under the following circumstances:
a. When the project is included in the City’s adopted five-year capital improvement program (CIP) and is in conformance with the City’s adopted General Plan. 74 Attachment 2
b. When the project is not included in the City’s adopted five-year capital improvement program (CIP), but the project is an emerging critical need whose timing was not anticipated in the five-year capital improvement program, or it is a project mandated by State or Federal requirements.
c. When the project’s useful life, or the projected service life of the equipment, will be equal to or exceed the term of the financing.
d. When there are designated General Fund revenues sufficient to service the debt, whether from project revenues, other specified and/or reserved resources, or infrastructure cost-sharing revenues.
e. Debt financing (other than tax and revenue anticipation notes) is not considered appropriate for any recurring purpose such as current operating and maintenance expenditures.
2. The City will follow all State and Federal regulations and requirements related to bonds and debt financing instruments regarding bond provisions, issuance, taxation and disclosure.
3. Costs incurred by the City, such as bond counsel and financial advisor fees, printing, underwriter’s discount, and project design and construction costs, will be charged to the bond issue to the extent allowable by law.
4. The City will monitor compliance with bond covenants and adhere to federal arbitrage and disclosure regulations.
5. The City shall continually review outstanding obligations for opportunities to achieve debt service savings through refunding and shall pursue refinancing when economically feasible and advantageous.
Debt Limit
The City will keep outstanding debt within the limits prescribed by State of California statutes and at levels consistent with credit objectives. California Government Code provides that “a city may incur indebtedness for any municipal improvement requiring an expenditure greater than the amount allowed for it by the annual tax levy” (43602). A “city shall not incur an indebtedness for public improvements which exceeds in the aggregate 15 percent of the assessed value of all real and personal property of the city. Within the meaning of this section "indebtedness" means bonded indebtedness of the city payable from the proceeds of taxes levied upon taxable property in the city” (43605). The limit is relative to the principal amount of bonds sold and delivered (43606). The City of Carmel-by-the-Sea, Policy No C94-01 establishes “the City’s debt shall not exceed predetermined levels.” The guideline in that policy is that “the City’s debt service level shall not exceed eight and one-fourth percent (8.25%) of total expenditures.
INVESTMENT POLICIES
This is a time to be particularly cautious. Municipal moneys not required for immediate expenditure will be invested. The City will maintain adequate cash availability and yield on invested idle funds while insuring that invested moneys are protected. The Carmel Municipal Code requires the City Administrator to prepare investment policies and guidelines for adoption by the City Council. The adopted investment policy follows. 75 Attachment 2
INVESTMENT POLICY AND GUIDELINES
Policy
In accordance with the Municipal Code of the City of Carmel-by-the-Sea and under authority granted by the City Council, the City Treasurer is responsible for investing the unexpended cash in the City Treasury.
The investment of the City of Carmel-by-the-Sea funds is directed to the goals of safety, liquidity and yield, in that order. The authority governing investments for municipal government is set forth in the California Government Code, Sections 53601 through 53659.
The primary objective of the investment policy of the City of Carmel-by-the-Sea is SAFETY OF PRINCIPAL. Investments shall be placed in those securities as outlined by type and maturity sector in this document. Effective cash flow management and resulting cash investment practices are recognized as essential to good fiscal management and control. The City’s portfolio shall be designed and managed in a manner responsive to the public trust and consistent with state and local law. Portfolio management requires continual analysis, and as a result the balance between the various investments and maturities may change in order to give the City of Carmel-by-the-Sea the optimum combination of necessary liquidity and optimal yield based on cash flow projections.
Scope
The investment policy applies to all financial assets of the City of Carmel-by-the-Sea as accounted for in the Annual Financial Report. Policy statements outlined in this document focus on the City of Carmel-by-the-Sea’s pooled funds, but will also apply to all funds under the City Treasurer’s control unless specifically exempted by statute or ordinance.
Prudence
The standard to be used by investment officials shall be that of a “prudent person” and shall be applied in the context of managing all aspects of the overall portfolio. Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, direction and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.
It is the City’s full intent, at the time of purchase, to hold all investments until maturity to insure the return of all invested principal dollars.
76 Attachment 2
Safety
Safety of principal is the foremost objective of the City. Each investment transaction shall seek to ensure that capital losses are avoided, whether from securities default, broker-dealer default, or from erosion of the market value.
Liquidity
Historical cash flow trends are compared to current cash flow requirements on an ongoing basis in an effort to ensure that the City’s investment portfolio will remain sufficiently liquid to enable the City to meet all reasonably anticipated operating requirements.
Yield
The investment portfolio should be designed to attain a market average rate of return through budgetary and economic cycles, consistent with the risk limitations, prudent investment principles and cash flow characteristics identified within the financial statements.
Performance Evaluation
Investment performance is continually monitored and evaluated by the City Treasurer.
Investment performance statistics and activity reports are generated on a monthly basis for presentation to the City Administrator and City Council.
Delegation of Authority
For short-term investments, the Administrative Services Director has authority to make transfers to and from the City’s Local Agency Investment Funds (LAIF) account in order to maximize interest earned and meet cash flow requirements. The transfers are made to and from the City’s general checking account to the LAIF account, with a minimum balance maintained in the general checking account to meet daily cash requirements.
The City Treasurer is responsible for investment of all unexpended City funds as per California Government Code section 41000 et seq. The City Treasurer makes long-term investments after review and approval by the Administrative Services Director and the City Administrator.
Ethics and Conflict of Interest
Officers and employees involved in the investment process shall refrain from personal business activity that conflicts with the proper execution of the investment program, or impairs their ability to make impartial investment decisions. Additionally, the City Treasurer and the members of the investment committee are required to annually file applicable financial disclosures as required by the Fair Political Practices Commission (FPPC). 77 Attachment 2
Safekeeping of Securities
To protect against fraud, embezzlement, or losses caused by a collapse of an individual securities dealer, all securities owned by the City shall be held in safekeeping by a third party bank trust department, acting as an agent of the City under the terms of a custody agreement or PSA agreement (repurchase agreement collateral). The third party bank trust department must have safe keeping as a professional business line with expertise in this particular service area. All trades executed by a dealer will settle Delivery vs. Payment (DVP) through the City's safekeeping agent. Securities held in custody for the City shall be independently audited on an annual basis to verify investment holdings. All exceptions to this safekeeping policy must be approved by the City Treasurer in written form and included in quarterly reporting to the City Council.
Internal Control
Separation of functions between the City Treasurer's Office and the Administrative Services Department would be an ideal situation. Time and necessity, however, dictate a different approach. Due to the lack of personnel dedicated to the investment function alone, a proper balance must be maintained between Treasury activities and Administrative Services Department functions. The City Treasurer will make the appropriate arrangements to buy and sell securities that are deemed permissible by the Laws of the State of California as time permits. The Administrative Services Director and/or City Administrator will have the power as granted under the section titled Delegation of Authority in the absence of the City Treasurer.
The City Administrator will have the authority to enter into agreements on securities so long as written policies set by the City Treasurer and State Legislature are followed.
The investment portfolio and all related transactions are reviewed and balanced to appropriate general ledger accounts by the Administrative Services Director on a monthly basis. An independent analysis by an external auditor shall be conducted annually to review internal control, account activity, and compliance with government policies and procedures.
Reporting
The City Treasurer shall review and render monthly reports to the City Administrator and the City Council, which shall include the face amount of the cash investment, the classification of the investment, the name of the institution or entity, the rate of interest, the maturity date, and the current value and accrued interest to date due for all securities.
Qualified Broker/Dealers
The City shall transact business only with banks and broker/dealers that are properly licensed and in good standing. The Administrative Services Director and the City Treasurer shall investigate dealers who wish to do business with the City to determine if they are adequately capitalized and if they market securities appropriate to the City’s needs. 78 Attachment 2
The City Treasurer shall annually send a copy of the current investment policy to all broker/dealers approved to do business with the City. Confirmation of receipt of the City’s policy by the broker/dealer shall be considered evidence that the broker/dealer understands the City’s investment policies and intends to sell the City only appropriate investments authorized by this investment policy.
Collateral Requirements
Collateral is required for investments in certificates of deposit. In order to reduce market risk, the collateral level will be at least 110% of market value of principal and accrued interest.
In order to conform with the provisions of the Federal Bankruptcy Code that provide for liquidation of securities held as collateral, the only securities acceptable as collateral shall be certificates of deposit, commercial paper, eligible banker’s acceptances, medium term notes or securities that are the direct obligations of, or are fully guaranteed as to principal and interest by, the United States or any agency of the United States.
Authorized Investments
Investment of City funds is governed by the California Government Code Sections 53600 et seq.
Within the context of the limitations, the following investments are authorized as further limited herein:
1) United States Treasury Bills, Bonds, and Notes or those for which the full faith and credit of the United States are pledged for payment of principal and interest. There is no percentage limitation of the portfolio that can be invested in this category, although a five-year maturity limitation is applicable but current market conditions and interest rate projections may call for shorter terms.
2) Local Agency Investment Fund (LAIF), which is a State of California managed investment pool, may be used up to the maximum permitted by the California State Law. LAIF is a demand account so no maturity limitation is required.
Investments detailed in items 3) are further restricted to percentage of the cost value of the portfolio in any one-issuer name to a maximum percentage of 15%. The total value invested in any one issuer shall not exceed 5% of the issuer’s net worth. Again, a five-year maximum maturity is applicable unless further restricted by current policy. Market conditions should be evaluated as an important consideration and may indicate a shorter maturity. 3) Negotiable certificates of deposit issued by nationally or state chartered bank or state or federal savings institutions. Negotiable certificates of deposit shall be rated in a category of “A” or its equivalent or better by two Nationally Recognized Statistical Rating Organizations. Purchases of negotiable certificates of deposit may not exceed 30% of the total portfolio. A maturity limitation of up to five years is applicable after considered evaluation of the financial markets.
79 Attachment 2
Ineligible investments are those that are not described herein, including, but not limited to, common stocks and long term (over five years maturity) notes, bonds, and time deposits, unless specifically allowed both by state law and City Council approval. It is noted that special circumstances may arise where these methods of investment may become necessary. When this becomes necessary, the City Council will be asked to take the appropriate action to ratify the means of investment necessary, provided that it is allowable by California Code.
Legislative Changes
Any State of California legislative actions that further restrict allowable maturities, investment type, or percentage allocations will supersede any of the material presented herein. In this case, the applicable law will become part and parcel of this investment policy.
Interest Earnings
All moneys earned and collected from investments authorized in this policy shall be allocated monthly to the General Fund and various special funds of the City that legally require interest proration or when City Council action dictates such proration. This distribution will be based on the cash balance in the fund as a percentage of the entire pooled portfolio.
Policy Review
The City of Carmel-by-the-Sea’s investment policy shall be approved by resolution of the City Council. This investment policy shall be reviewed at least annually to ensure its consistency with the overall objectives of preservation of principal, liquidity and yield, and its relevance to current law and financial and economic trends. Any amendments to the policy, other than State and Federal laws that automatically supersede the relevant sections shall be forwarded to the City Council for approval by resolution.
80 Attachment 2
Updated on 5/30/2023
CITY OF CARMEL-BY-THE-SEA
FISCAL YEAR 23-24 RECOMMENDED BUDGET
QUESTIONS SUBMITTED AS OF MAY 19, 2023
1. Question/Comment: Why does the Estimated Actual FY 22-23 Sales Tax go up while Measure C goes down compared to FY 21-22 Actual? It seems Sales Tax and Measure C should move the same direction. Is this estimate correct?
Response: Administration met with HdL on May 10, 2023 to review sales tax data through 4Q22 and have updated the estimated FY 22-23 with figures provided by HdL. Measure C FY22-23 is now estimated at $5,865,000. As Sales Tax captures point-of-sale transactions and Measure C tracks point-of-use transactions, it is not uncommon for these two taxes to trend differently.
2. Question/Comment: How does our City’s Transient Occupancy Tax (TOT) compare to other peninsula cities?
Response:
County City TOT
Tax Rate %
Monterey Carmel-by-the-Sea 10%
Monterey Del Rey Oaks 10%
Monterey Gonzales 8%
Monterey Greenfield 8%
Monterey King City 10%
Monterey Marina 14%
Monterey Monterey 12%
Monterey Pacific Grove 12%
Monterey Salinas 10%
Monterey Seaside 12%
Monterey Soledad 12%
Monterey Monterey County 10.5%
3. Question/Comment: Is there a better way to handle the payments to the Monterey County Convention and Visitors Bureau (MCCVB)? Why not estimate, then true up? How would a 'true up' with the MCCVB work? Response:
The City remits four equal payments to Monterey County Convention & Visitors Bureau (MCCVB) quarterly based upon 3% of the fiscal year adopted budget for Transient Occupancy Tax (TOT) revenue. There are no trueup payments currently to reflect 3% of actual TOT receipts collected over the fiscal year Presently, there is a discrepancy between what MCCVB estimates ($8.1M) for the City’s TOT revenues and what the City estimates ($6.8M) for FY 23-24. The City’s TOT FY 23-24 estimates are calculated as a 2% increase over Attachment 3
Updated on 5/30/2023
CITY OF CARMEL-BY-THE-SEA
FISCAL YEAR 23-24 RECOMMENDED BUDGET
QUESTIONS SUBMITTED AS OF MAY 19, 2023
prior fiscal year’s adopted budget. This variance results in a difference of approximately $40K for the City’s annual Jurisdiction Investment Partnership amount. In order to address situations like this, MCCVB is requesting an “invest-as-we-go” payment model for Council consideration that would result in the City’s investment being based upon actual TOT revenues collected.
Based upon the current procedures and processes for the City’s TOT collections and remittance, the MCCVB Jurisdiction Investment Partnership could be calculated every two months to match the timing of Monterey County Tourism Improvement District remittance, which is based on actual TOT collections. No end-of-the-year true up is needed with this approach and is based on actual TOT collections. Year-end or quarterly true-up calculations would require additional staff time while a bimonthly pay-as-you-go option could easily be incorporated into the TID processes already in place. Regardless, the City does need to add a placeholder amount as part of the budget and will continue with the amount in the recommended budget. Based on Councilmember Baron’s direction, City Administrator Rerig will work with Rob O’Keefe of MCCVB to pay this upcoming fiscal year on actuals and should the actual amounts come over the budget amount, the City will submit a midyear adjustment accordingly.
4. Question/Comment: How would we propose cutting the budget by 10 percent if asked by Council? Response: If a majority of City Council provides direction to cut $4 million (10%) from the budget, the City Administrator will assess and come back with recommendations that may come from one or more sources such as salaries/benefits, operating expenses, and/or capital improvement projects (CIP).
5. Question/Comment: Please clarify the use of the parking in lieu fees? Response: City Municipal Code § 17.38.040 states: “Funds collected by the City from such payments shall be deposited in a specific fund and used by the City to acquire and/or develop off-street parking.” The CMC does not authorize the funds to be used for any other purpose (e.g., inter-city loan or other City program). Administration has requested from the City Attorney a memo specifically to clarify use of funds and whether funds can be utilized for parking improvements on currently owned off-street parking lots and spaces.
6. Question/Comment: Can you add the position control list back into the budget? How about adding the salary schedules for positions into the budget book?
Response: The FY 23-24 Recommended Budget Book has been updated since the May 2, 2023 City Council meeting with the City’s Recommended Fund Positions table for FY 23-24.
7. Questions/Comment: Will the sand ramp at Eighth Avenue be repaired for use during an emergency? Response:
Staff was anticipating that the ocean tides would bring back enough beach sand such that we could push up the sand and restore the ramp before the summer season. While some sand has returned to the beach, a considerable amount of additional sand is still needed back onto the beach to be able to restore the ramp.
Attachment 3
Updated on 5/30/2023
CITY OF CARMEL-BY-THE-SEA
FISCAL YEAR 23-24 RECOMMENDED BUDGET
QUESTIONS SUBMITTED AS OF MAY 19, 2023
Police, Fire, and Public Works are well aware of this situation, and the lack of the beach ramp could potentially hinder emergency access.
However, it would be extremely challenging and costly to reconstruct the sand beach access ramp using imported sand for the following reasons. First, there is no known supply of pristine white sand that would match the natural Carmel Beach sand. Even if a source of sand was found, numerous truckloads would be required to cross the Village and deposit the sand. Not only would such a project be very costly, these operations would trigger an environmental analysis, environmental documentation, and a CEQA determination.
A Coastal Development Permit would also be required. Furthermore, the ocean tides could return the sand for us during our summer beach profile.
8. Question/Comment: Can we add a photograph of the entire City Council in the budget book? Response: The City paid for a recruitment video that included video footage and photos which were incorporated into the FY 23-24 budget. However, a photo of the full City Council can be integrated into the budget book once a photo of the full City Council has been taken. As of today (5/30), staff has been unable to get a picture of the full City Council together.
9. Question/Comment: Regarding the Community Fire Risk assessment - will the document clearly elucidate whether we are at risk of wildfire in the Village? Response: The City believes the Community Fire Risk Assessment will touch on the risk of wildfire in the Village.
Administration has taken this question to Chief Panholzer and will update as more information becomes available. The City recommends that you participate in the community workshops and take the community survey that can be found at this link:
https://storymaps.arcgis.com/stories/1676ab5b4a2d4993883393f1cb5f3d87
10. Question/Comment: Now that we have prohibited wood burning fires at Carmel Beach will we change the signs?
Response: Yes. We are in the process of ordering and installing the new signs.
11. Question/Comment: Since there have not been any transactions on the Parking in Lieu fund balance for the last two years, can we invest the $734k (or a portion) in an interest-bearing account? Response: The Parking in Lieu fund balance is part of the overall City’s investment financial portfolio. City’s investment gain/losses are totaled and allocated among all funds holding a cash balance at the end of the fiscal year. As of June 30, 2022, the City’s cash and investment portfolio was divided among checking accounts (73%), savings accounts (16%) and brokerage accounts (11%).
Attachment 3
Updated on 5/30/2023
CITY OF CARMEL-BY-THE-SEA
FISCAL YEAR 23-24 RECOMMENDED BUDGET
QUESTIONS SUBMITTED AS OF MAY 19, 2023
12. Question/Comment: The staffing positions and comparison to FY 22-23 are missing from the FY 23-24 recommended budget document. Chip called out in the FY 23-24 budget report that there are no increases in staffing. Even so, when will the public be able to see this information? Response: The FY 23-24 Recommended Budget Book has been updated since the May 2, 2023 City Council meeting and includes the authorized positions.
13. Question/Comment: IT has over 50% increase in budget recommendations. What are the specific publications and subscriptions driving this and how are they used? Response: The City’s long term plan to move from on-premise systems which are capital expense heavy to Cloud based technologies which are operating expenses have increased expenditures in IT subscriptions. Additionally, Administration has consolidated all cross-departmental software subscriptions into IT’s Publication and Subscriptions budget for FY 23-24.
14. Question/Comment: Community Activities has a noticeable increase in community promotions.
What specifically are these?
Response: Community Activities has budgeted more in FY 23-24 due to inflationary increases in contractor costs.
Additionally, more funds are budgeted towards the Farmers' Market for 3rd Thursdays ($20,100), Programs/Events ($13,200), Community Promotions ($5,100), music ($4,500) and other market improvements, signage, display, and equipment ($13,667).
Attachment 3
Updated on 5/30/2023
CITY OF CARMEL-BY-THE-SEA
FISCAL YEAR 23-24 RECOMMENDED BUDGET
QUESTIONS SUBMITTED AS OF MAY 19, 2023
15. Question/Comment: What is the anticipated amount of reimbursements from storm damage that occurred during the 1st quarter of 2023 and when do we expect to receive this? Response: At this time, the City is still identifying and inventorying disaster-related damages as required by FEMA. The City has until June 14, 2023 to complete emergency work and June 14, 2024 to complete permanent work. The City met with the new FEMA representative on May 10, 2023 and is actively working through the process. So far, the storm debris costs approved by FEMA is $36K. Repairs have yet to be approved and will require a FEMA sight adjuster to come to the City and assess the damages, such as the stairs and ramp at the beach, street damages from tree uprooting etc. FEMA has not said when specifically, we would receive the funding.
16. Question/Comment: Contract services for tree care and landscape maintenance increased 50% in last year's budget and now again by 49% in this year's budget. Given this trend, is this enough? How do we better prepare for these services given that winter storms will continue to challenge our Village? Response: For Fiscal Years 20-21 and 21-22, during the Pandemic, contracted landscape maintenance services were unfunded. While volunteer groups stepped up to help reduced Public Works/forestry crews with landscape care, the overall quality of the landscaping was diminished.
In the current Fiscal Year 22-23, $149,000 was allocated for landscape maintenance. In late 2022, a contract was awarded to Town & Country Gardening & Landscaping for $140,000. Approximately $24,000 will also be expended to reimburse Carmel Cares for their contracted gardening services along the Scenic Pathway. Staff believes that the quality of the landscaping across the Village is now better than even before the Pandemic.
The proposed landscape maintenance budget for FY 23-24 is $203,000 and covers both Town & Country ($175,000) and Carmel Cares ($28,000) landscaping services. The budgeted increase from $149,000 to $203,000 is 36%.
Staff believes this increase is significant and prudent, but cautions against increasing the budget for landscaping maintenance beyond this amount so as to be in balance with the many other City needs.
17. Question/Comment: The pie chart on page 41 doesn’t seem to represent the PW Forest & Beach FY 2023-2024 budget amount of $1,017,500.
Response: The FY 23-24 Recommended Budget Book has been updated since the May 2, 2023 City Council meeting to reflect the proper allocation of PW’s Forest & Beach services and supplies.
Attachment 3
Updated on 5/30/2023
CITY OF CARMEL-BY-THE-SEA
FISCAL YEAR 23-24 RECOMMENDED BUDGET
QUESTIONS SUBMITTED AS OF MAY 19, 2023
18. Question/Comment: Staff turnover adds to increased recruiting time, costs, and understaffing that can delay project progress. What has been our staff turnover trend/rate for the last 5 years, adjusting for Covid impacts?
Response: In summary, 57 full-time employees have separated since 2018 which is close to 60% of personnel.
Although COVID and the corresponding layoffs impacted 2020, the City has been proactively taking measures to address issues that may causing employees to leave such as improving employee engagement and satisfaction, and offering competitive compensation and benefit packages. The employee (full-time or temp/hourly/retired annuitant) and elected officials turnover trend/rate for the last 5 calendar years is as follows:
Calendar
Year
Elected
Official
Temp/Hourly/
Retired
Annuitant
Full-Time Total
2018 2 2 8 12
2019 0 1 9 10
2020 1 3 18 22
2021 0 0 8 8
2022 1 6 10 17
2023 (to
date) 0 0 4 4
4 12 57 73
0 10
20 30
40 50
60 70
80 Elected
Official
Temp/Hourly/
Retired Annuitant
Full-Time Total
Employee Turnover
2018 2019 2020 2021 2022 2023 (to date)
Attachment 3
Updated on 5/30/2023
CITY OF CARMEL-BY-THE-SEA
FISCAL YEAR 23-24 RECOMMENDED BUDGET
QUESTIONS SUBMITTED AS OF MAY 19, 2023
19. Question/Comment: It mentions that Pink Mutt Mitts will increase the budget by $34,800. This isn’t true.
The cost for the "black" mitts will be $71/case going forward for pallet quantities and the cost for pink mitts will be $71/case for any order quantity. Rob <Culver> has the information on how to get this pricing with Dog Waste Depot. There is no need to distinguish between the two types. You just need to order the correct quantities of each based on usage.
Response: FY 23-24 budget reflects $24,000 for mutt mitts.
20. Question/Comment: The Scenic Pathway Hardscape Renovation is discussed but there is no amount listed for this budget. Why isn't the $100,000 included in that discussion? If it is still in the budget where is it shown?
Response: The amounts for the Scenic Pathway Hardscape Renovation are included in Table 2: FY 23-24 Recommended Capital Projects and Funding Source on page 53 of the Proposed Budget Book. Currently budgeted is $100,000 from the General Fund with a $100,000 matching donation from Carmel Cares.
21. Question/Comment: There is no direct discussion of the $24,000 allocated to landscaping for Scenic Pathway. Is this part of the $175,000 landscaping budget? And, should this be broken out separately or at least discussed?
Response: The Public Works/Forestry Operating Budget for Contractual Services is budgeted for $941,500 (page 43 of budget). Of that amount, $175,000 is earmarked for our landscape maintenance contractor and $28,000 is allocated to reimburse Carmel Cares for contracted gardening services performed along the Scenic Pathway.
22. Question/Comment: There is no discussion that I could find related to all the volunteer hours donated to the city by Carmel Cares and other volunteer groups. I thought this was in last year's budget but I could be wrong.
Response: Volunteer hours are not presented in the Budget Book. These hours are recognized during the fiscal year in the Resolution presented to City Council, when the donation from Carmel Cares is accepted. The Council last recognized donations from Carmel Cares on December 6, 2022, for $150,316 plus 7,808 volunteer hours.
23. Question/Comment: Is the council really satisfied with 1 person in Public Works directly allocated to tree work? Not only is this insufficient but, if that person were to quit we would have zero people until they are replaced. You'd think after this past winter this would be front and center. Seems to me that it would be the money allocated for Natural Resource Manager would be better spent on 1 or two additional Forestry staff.
Response: The Public Works/Forestry Operating Budget for Contractual Services is budgeted for $941,500 (page 43 of budget). Of that amount, nearly $600,000 is earmarked for contracted tree care services - Attachment 3
Updated on 5/30/2023
CITY OF CARMEL-BY-THE-SEA
FISCAL YEAR 23-24 RECOMMENDED BUDGET
QUESTIONS SUBMITTED AS OF MAY 19, 2023
a significant increase from the $330,000 in the current year budget. All Public Works field crews have been trained in storm-related tree incidents, as evidenced by the quick restoration following the significant March storm. The Public Works Director would not support reallocating funds from a Natural Resources Manager position for more field crews.
24. Question/Comment: If any of you have gone for a walk on the beach lately you would have been shocked to see the state of the bluff around 10th Ave. Study or not, it is perfectly clear that this area is at risk of collapse without further reinforcement. By the time the study is complete, discussion takes place, funds allocated, and a project takes place, there might not be anything to protect. It is clear by the precariously leaning posts on the top that something is happening. The area North of 12th we are going to replace soon is also leaning, demonstrating that the ground is moving due to inadequate support on the beach and erosion. If we aren't careful, what happened in 1983 will be repeated and the cost of repairs will be beyond our ability to finance.
Response: Noted. The entire shoreline infrastructure is currently being evaluated by our environmental, climate change/adaptation, and geotechnical engineering consultants as part of the Coastal Engineering Study. The results of the Shoreline Condition Assessment (Task 1 in the Study) revealed that Seawall #7, in the vicnity of 10th Avenue, does need repairs and these were rated as medium priority. Seawall #6, between 11th and 12th Avenue did not warrant repairs.
The CIP proposes to continue the Study into Phase 2 next fiscal year. This will include further evaluations. In addition, design by a structural engineering firm of the most heavily-damaged seawall(s) are planned to be funded under the Shoreline Infrasstructure Repairs Project, as shown in the CIP pages 53 and 58.
25. Question/Comment: I didn't see any funding for repair/replacement of the beach access wooden stairways and repairs to the stone/concrete stairways. Would this be included in the $100,000? Response: No. The design and initial repairs of the most heavily-damaged beach access stairs are planned to be funded under the Shoreline Infrasstructure Repairs Project, as shown in the CIP pages 53 and 58.
We are also seeking funding from FEMA and the Coastal Conservancy.
26. Question/Comment: Can you run the crime statistics from July to July for the years shown? Response: The City can provide the crime statstics in August since we are still with the requested reporting period (Jan -July 2023)
27. Question/Comment: Please clarify why volunteers cannot be used to perform some work when it is part of a union-represented position.
Response: Volunteers cannot be used to perform work when it is part of a union-represented position without meeting and conferring with the appropriate bargaining units. If the City did allow volunteers to perform work currently performed by represented employees without meeting and conferring, then the Attachment 3
Updated on 5/30/2023
CITY OF CARMEL-BY-THE-SEA
FISCAL YEAR 23-24 RECOMMENDED BUDGET
QUESTIONS SUBMITTED AS OF MAY 19, 2023
represented employees could file an Unfair Labor Practice claim with the California Public Employment Relations Board.
28. Question/Comment: Please clarify the process we are in for the Parking and Congested Traffic analysis.
Response: The City has concluded phase 1 of the program - Public Outreach. The public outreach included a booth at Farmer’s Market on April 27th and May 4th plus four (4) separate public meetings held on May 1, May 3, May 9, and May 11 within our village. We had excellent dialogue with the various audiences and gave them good information in the process. We are currently working on phase 2 - Refinement, which includes gathering the various public inputs and developing a more robust plan to address important things like permit areas, fleshed-out plans for employees, deliveries, and other longerrange issues. We will also continue to refine our maps and other details. In September, Council will receive a presentation on the proposed parking program and give direction to staff. If approved, the introduction of a Parking Management Ordinance will occur in October.
29. Question/Comment: Please confirm that we have design and build funding for the Acacia Way headwall.
Response: At the April 5, 2023 CIP Workshop, the project description for the City-wide drainage projects was listed as follows:
Drainage System Repair Design (FY 2021/22, $100,000), and Drainage System Repair Design Phase II (FY 2022/23, $500,000): should now be considered one combined project. The City-wide Drainage Master Plan identified numerous spot repairs needed for our existing underground storm drain pipes, as well as significant "bottlenecks" in the drainage system. In October 2022, Council awarded a $50,000 Professional Services Agreement to Schaaf & Wheeler Consulting Engineers to update their 2020 Drainage Master Plan to reflect recommendations from the Climate Committee to evaluate 20-year storm event impacts to the drainage system, versus 10-year storm events as previously evaluated, and as much of the drainage infrastructure of the City was built. The Updated Master Plan is complete, and highlights will be presented to Council at an upcoming meeting. On a parallel track, Neill Engineers was issued a $24,999 Professional Services Agreement to design eight to ten specific drainage repairs and bottleneck elimination projects. The design of those improvements is in progress. Remaining funds should be carried-forward into Fiscal Year 2023/24 to complete the design. At least $4M will be needed to fix the most critical repairs and bottlenecks, and allocations for specific repairs will be recommended in future year CIP plans.
At the April Workshop, Council requested that part of the remaining funds be used for physical construction of drainage improvements, rather than using all budget on engineering design services. As noted during the May 2, 2023 CIP Review presentation, the Public Works Director noted that this carry-over project scope was changed accordingly. Specifically, of the remaining budget of approximately $500k, approximately $150k will be earmarked for design of the first three (3), high priority projects, and $350k will be available for construction.
The first three projects are: 1) Acacia Way headwall upgrade, 2) Santa Rita box culvert repair, between Third and Fourth Avenues, and 3) Santa Fe new pipeline between Mountain View and the MTNP outfall. Project #3 will be bid as a bid additive in case the final costs exceed the remaining budget.
Attachment 3
CITY OF CARMEL-BY-THE-SEA
FISCAL YEAR 23-24 RECOMMENDED BUDGET
QUESTIONS SUBMITTED AS OF MAY 19, 2023
30. Question/Comment: Please clarify the City's current transit occupancy tax (TOT). How much more revenue is possible if we increase the TOT by one (1) percent, and two (2) percent. an you run the crime statistics from July to July for the years shown? Response: Currently, $6.8 million is budgeted for FY 23-24 TOT revenue, at a 10% tax rate. If the tax rate was increased, TOT revenue would increase $680,000 for each 1% increase.
31. Question/Comment: Please request financial data/reports for Visit Carmel, MCCVB, Carmel Chamber, Susnset Center, and Carmel Youth Center (CYC).
Response: The City Administrator has received financial data/reports from Visit Carmel, MCCVB, Carmel Chamber of Commerce and Sunset Center. The CYC has not yet responded, however, the City has financial data that was submitted as part of the discretionary grand application process. The City is working with the City Attorney to confirm that we can release the financial data received.
32. Question/Comment: Please clarify the obligation under the long-term lease with Sunset Cultural Center, Inc. to establish an endowment, and use said endowment earnings for capital work on the property.
Response: Sunset Cultural Center is the sole beneficiary of the Sunset Theater Endowment Fund at the Community Foundation for Monterey County (market value $188,801). It was established after the renovation in 2003 and restricted to deferred maintenance and protection of new assets in the Sunset Theater. The Sunset Theater Endowment Fund provides interest earned on the principle. It also acts as a “quasi-endowment” that enables Sunset Cultural Center to receive pass-through donations where the full gift is spendable as designated.
We received some of our recent Theater Upgrade donations through the quasi-endowment.
33. Question/Comment: What assets does Carmel Youth Center have at this time? Response: No response has been received yet.
34. Question/Comment: What are the dues for Chamber of Commerce? I also heard that they have a lot of members that do not pay their dues.
Response: Councilmember Felito had heard that there was a lot of members that don’t pay their dues at the Chamber. I don’t think what she heard was quite true. Below I have documented, where members are past due, offered courtesy memberships, and trade agreements.
As of today, we have 522 members, 11 are past due 12 months. (2% of our members). This can be for lots of reason hardship for example, a business being sold like SUR where we are working on the new owners. Often members are dropped well before reaching this point.
If I could expand on her question, there are 2 other types of membership that we trade:
Attachment 3
CITY OF CARMEL-BY-THE-SEA
FISCAL YEAR 23-24 RECOMMENDED BUDGET
QUESTIONS SUBMITTED AS OF MAY 19, 2023
Courtesy Members - 8
We call them Courtesy Members where they are offered membership at no cost, because the chamber deems them important, and wants to sustain a close relationship with the entity. For example, Carmel Cares, Monterey Chamber of Commerce.
Trade Members – 16
These are members that are paid up members, but we move them up to the next level of membership as a trade. For example, The Pine Cone is a trade partner and we get to advertise for free. KION TV CBS that we are hoping to cover taste live this year. Carmel Magazine for which we get a full page add ever edition. Aaron Chang Art Gallery, he gave us access to his digital photography to use in things like the Guide to Carmel at no charge. The City of Carmel-by-the-Sea is a paid Business Level member, and the Chamber upgrades the city to Executive level for its ongoing support. Carmel-by-the-Sea is the only city the Chamber has a trade agreement with.
Both are standard practices within Commerce Chambers.
35. Question/Comment: It seems that City Budget add on requests (e.g., the Carmel Youth Center, Chamber of Commerce, and MCCVB) happening in the final steps of the budget process would benefit by going through a more formal and timely process. These organizations provide important services to our community. Most, if not all, nonprofits in our City derive their funds from membership dues, donations, grants, fundraisers, etc. for support. The Council (and public) would benefit by being able to see these requests earlier in the City budget cycle with submissions that include a comprehensive plan, financial statements, and value proposition similar to what's required in the Discretionary Grant Funds Program.
Response: The City is always looking to improve on its processes and have noted the suggestion.
Administration has reached to each vendor accordingly for FY 23-24 and will look to incorporate budget requests from the City’s marketing and economic development servicers sooner in the budgeting process.
Attachment 3
CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
Staff Report
June 6, 2023
PUBLIC HEARINGS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Marnie R. Waffle, AICP, Principal Planner APPROVED BY: Chip Rerig, City Administrator
SUBJECT:
Consideration of a Permanent Encroachment Permit (EN 21-272, Fountain) for an existing fence in the public right-of-way on the southern side of the single-family residence on the northwest corner of Junipero Avenue and 8th Avenue in the Residential and Limited Commercial (RC) Zoning District.
RECOMMENDATION:
Consider a Permanent Encroachment Permit (EN 21-272, Fountain) for an existing fence in the public rightof-way on the southern side of the single-family residence on the northwest corner of Junipero Avenue and 8th Avenue in the Residential and Limited Commercial (RC) Zoning District.
BACKGROUND/SUMMARY:
On February 5, 2003, the Planning Commission approved a Design Review (DR 01-04, Mackey) and Use Permit (UP 01-24, Mackey) for the construction of two attached single-family residences and a lot line adjustment to modify two 2,500 square-foot lots into one, 2,000 square-foot lot (fronting on 8th Avenue) and one 3,000 square-foot lot (located at the northwest corner of Junipero Street & 8th Avenue) (Attachments 1 and 2). A single-family residence was constructed on the 3,000-square-foot corner lot, and on February 8, 2023, the Planning Commission approved Design Review application DR 16-364 (Fountain) for a new mixed-use building on the lot on 8th Avenue.
The Planning Commission’s approval of the Mackey project in 2003 included the Use Permit condition of approval number 8, requiring the applicant to continue a pedestrian sidewalk along Eighth Avenue for use by the public on public property that will further protect the health, safety, and welfare of the community.
Additionally, the Design Review condition of approval number 13 required the applicant to install and maintain public way improvements adjacent to the project, including new sidewalks, curb and gutter, and landscape improvements in conformance with City requirements for the public way. An improvement plan was required to be submitted to the Planning Director for review and approval prior to the issuance of a building permit to include an improved sidewalk surface treatment that complimented the character of the commercial district and provided for a sidewalk along the north side of Eighth Avenue adjacent to the Scout House. The applicant was required to design and install the sidewalk at their sole expense.
On October 8, 2003, the Planning Commission approved a revision to the Use Permit condition of approval number 8 to allow the relocation of the public walkway from the north side of Eighth Avenue between Junipero and Mission to the south side of the street with the added condition that the applicant install a crosswalk and that all property owners on the south side of Eighth Avenue be notified of the project and encouraged to respond in writing (Attachments 3 and 4). The proposed relocation, due to grading issues according to City staff, was reviewed by the Traffic Safety Committee on September 3, 2003, and was supported by the Committee (Attachment 5).
On March 22, 2005, former owner Mr. Don Mackey submitted a building permit revision to construct a threefoot-tall and 28-foot-long wooden grape stake picket fence located in the public right-of-way approximately 5 feet, 8 inches from the southern street side yard property line on 8th Avenue (Attachments 6 and 7). The fence was approved by Planning staff subject to the approval of an Encroachment Permit. However, there is no record in the property file that an Encroachment Permit was issued. Mr. Mackey did provide proof of liability insurance in 2005 and signed a Hold Harmless Encroachment Agreement that does not appear to have been notarized or recorded. In 2017, the new owner, Mr. Thomas Fountain, provided proof of liability insurance for the encroachment.
On March 19, 2015, the Planning staff approved Design Study 15-085 to install a 3-foot wide decomposed granite pathway on the south side of 8th Avenue between Junipero Avenue and Mission Street to satisfy the revised condition of approval from 2003 (Attachment 8). The path was installed, and in June 2015, the path was inspected by the Planning staff and the Building Inspector and found to be in compliance with the revised condition of approval (Attachment 9).
On April 5, 2022, the City Council considered the Permanent Encroachment application (EN 21-272, Fountain) and passed a motion 3-2 denying the application.
Carmel Municipal Code Section 2.04.140 (Reconsideration of Council Action) states that any City Council member voting in the majority on any given item may move reconsideration of Council action on that item for consideration at a future meeting. Following the April 5, 2022, meeting, a City Council member voting with the majority requested that staff bring the application back to the City Council to discuss reconsideration of the application. On May 3, 2022, the Council passed a motion 3-2 to reconsider the application and directed staff to return for a second public hearing at a future meeting date.
Mr. Fountain requests that the fence design approval granted by the Planning Department in 2005 be formalized with the issuance of the required Permanent Encroachment Permit. If the City Council approves the permit, a Hold Harmless Encroachment Agreement (Attachment 10) would be signed, notarized, and recorded with the Monterey County Recorder’s Office.
ANALYSIS:
Section 12.08.050 of the Carmel Municipal Code (CMC) grants authority to the City Administrator to approve encroachment permit applications that conform to the Encroachment Application Review Standards (CMC 12.08.060). CMC section 12.08.050 also gives the City Administrator the authority to refer Encroachment Permit applications to the City Council for determination.
Given the unique nature of the proposal and the level of public interest in the application, the City Administrator has exercised his authority to elevate this decision to the Council. The City Administrator will be prepared at the hearing to provide his opinion on the merits of the encroachment as the effective “junior hearing body” for this matter.
The decision by the Council would be final in this case, as there would be no appeal authority or administrative remedies remaining within the City’s regulatory framework. In considering this application, the Council should refer to CMC section 12.08.060 (Encroachment Application Review Standards), which essentially functions as the findings required for approval, including standards such as showing a justifiable need for the encroachment, protecting public safety, and benefitting the public interest. This entire section has been included as Attachment 11 for convenience.
The property associated with this application is located in the Residential & Limited Commercial (RC) District. However, CMC Section 17.14.110 (Standard of Review and Design Guidelines) states that the development of single-family residences in the RC district shall be consistent with the standards and criteria identified in Chapter 17.10 (R-1 District Design Regulations). This provision was adopted in 2009 and applies to all applications submitted after this date.
Both the Municipal Code and adopted design guidelines prioritize open space and landscaping over structures within the public right-of-way to perpetuate and enhance the established forest character. Aboveground encroachments are generally prohibited except for paving for driveways. Landscaping is the preferred treatment for the right-of-way and does not require an encroachment permit. The desired separation by the Fountains could be achieved with landscaping and, in staff's opinion, would be the superior option.
Since the code does not require approval of an Encroachment Permit via resolution when elevated, the Council does not need to adopt a resolution. The decision can be made by a motion to approve or deny the application and a majority vote.
If the Council approves the encroachment permit, the fence would remain and could be repaired or replaced as needed so long as the location and design remained consistent with the encroachment permit approval. The City may terminate and revoke the Agreement at any time that it is determined by the City Council to be in the best interests of the City and necessary to promote public health, safety, or welfare.
If the Council denies the encroachment permit, the fence would need to be removed from the public rightof-way. The property owner could construct a similar fence on their property. However, because the residence was constructed in such close proximity to the southern property line, a fenced-in open space buffer between the house and the public way would be eliminated.
ENVIRONMENTAL REVIEW:
If the Council is inclined to approve the project, Staff recommends the project be found categorically exempt from the California Environmental Quality Act (CEQA), State CEQA guidelines, and local environmental regulations, pursuant to Section 15303 (Class 3) – New Construction or Conversion of Small Structures. Class 3 exemptions include, but are not limited to, the construction of small facilities or structures and the installation of new small equipment. The proposed project consists of the installation of a wooden fence. The project does not change the existing or former use of the property and does not present any unusual circumstances that would result in a potentially significant environmental impact as proposed and conditioned. No exceptions apply to the exemption pursuant to Section 15300.2 of the CEQA guidelines.
FISCAL IMPACT:
Staff time associated with processing this application is captured in the adopted FY2022-23 budget.
PRIOR CITY COUNCIL ACTION:
On April 5, 2022, the City Council considered the Permanent Encroachment application (EN 21-272, Fountain) and passed a motion 3-2 denying the application.
On May 3, 2022, the Council passed a motion 3-2 to reconsider the application and directed staff to return for a second public hearing at a future meeting date.
ATTACHMENTS:
Attachment 1 - February 5, 2003 Planning Commission Agenda Report Attachment 2 - February 5, 2003 Planning Commission Meeting Minutes Attachment 3 - October 8, 2003 Planning Commission Agenda Report Attachment 4 - October 8, 2003 Planning Commission Meeting Minutes Attachment 5 - September 3, 2002 Traffic Safety Committee Meeting Minutes Attachment 6 - 2005 Plan Check_Revision Submission dated 3.22.05 Attachment 7 - Project Plans
Attachment 8 - DS 15-085 (Old Mill) - Approval Afteraction Attachment 9 - June 4, 2015 Pathway Compliance Verification Attachment 10 - Hold Harmless Encroachment Agreement 06.06.23 Attachment 11 - CMC Section 12.08.060
Attachment 1
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Attachment 5
Attachment 5
1 City of Carmel-by-the-Sea
Department of Community Planning & Building;
Public Works/Forestry & Beach
P.O. Drawer G
Carmel, CA 93921
(831) 620-2010 OFFICE/(831) 620-2014 FAX
PLAN CHECK/REVISION SUBMISSION
Date Rec'd.: �{zi,� Fee:$
Citv Use Onl� This Section
7-0J �-- Receipt#: By:
Existing Permit #: cY-f-Z-�
APPLICANT SECTION
\ Sv
�
I
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\JI
Complete items 1-8 in this section and·provide additional information and/or plans as required to describe the work proposed. SIGN THE BACK OF THIS FORM
1. Project Location: i
Street the
NvJ
project is on
bet. 01li and Jv tJ 11'£�
Block: '0v} Lot(s): '2 5 /2 G, Parcel#: 0\c?. of:?7 · oof
2. Legal Property Owner: 1)oN MACJtf,f
Mailing Address:
City: =rvl,�ON
-015--w .-AV\0 MAii: P.O. Box
State: AZ
---
Zip:
Telephone# (?U7) bZ-4 · 04�1 FAX:(�W ) i�f;. ..
3. Contractor/Agent/Contact Person: 1>AN J'J L'1 €,e.,\f., (Circle One)
�57o�
0512
Mailing Address: -£ {). �� P.O. Box: 1-,23103
City: Ck{LH\ llG State: CA Zip: 9,g9i1,, Phone(�)
City License#: Zo404- State License#: Jf;o9!�
Value of Project: I j__. OM I
4,0 z · 71/_� 7
/Type: g
Check the am2ro12riate De12artment action 12ro12osed:
�PUBLIC WORKS DEPT.: Encroachment/Sidewalk/curb-Gutter/Driveway/Utilities D FORESTRY/ BEACH: Tree removal/Pruning/Landscaping/Encroachment �LANNING/BUILDING: Residential/Commerical/Structural/Architectural/Encroachment/Site Coverage/Exterior Changes
0 FIRE DEPARTMENT ACTION: Fire Sprinkler System/Fire Alarm System FULLY DESCRIBE ALL WORK PROPOSED: A l)l) Of £1C�"f ��GE; i �o<;T Sl-lu:-r Ai .1. Al'f'£Zo\". - '5' fAST £�f.■
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Revised 12/04
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Attachment 6
Attachment 6
JAN-27-200� 11 :20AM FROM-DON MACKEY OLDS +520 623 5178 . •-
V PONTtAC GMC,
9£n 8'!£elcf/l
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□ 'Urgent □ :For �view D Please Comment �ase !Rf..p[y
'J{_ote,.s Or Comm.en.ts:
Attachment 6
JAN-27-2006 11 :20AM FROM-DON MACKEY OLDS +520 623 5178 T-445 P.004/005 F-526 WHEN RECORDED, MAIL TO:
CITY OF CARMEL-BY-1HE-SEA
BOXCC
CARMEL-BY-THE-SEA CA 93921
THIS SPACE FOR RECORDER'S USE ONLY
HOLD HARMLESS ENCROACHMENT AGREEMENT
AGREEMENT made this ___ day of ______ �, 20_, between the CITY OF CARMEL-BY-THE-SEA, hereinafter called CITY, and ______________ _ hereinafter called OWNER, with reference to the following facts:
OWNER is in possession of and owns certain real property in CITY known as Block __ _ Lot(s) _____ , Assessor's Parcel No. ___________ , Zoning District-��- street location --------------------------
OWNER has requested from CITY perm1ss1on to construct and maintain a structural encroachment on CITY street or sidewalk area adjacent to or near the property, described as follows:
NOW, THEREFORE, the parties, in consideration of the mutual covenants contained herein, agree as follows:
1. CITY grants penruss1on to OWNER to construct and maintain a structural encroachment on CITY street or sidewalk area adjacent to or near OWNER'S property, as described above. Said permission is subject to the following conditions:
a. Execution of this Hold Harmless Agreement and compliance wjth the provisions of paragraph 3 below.
b.
2. OWNER, his successors and assigns, agrees to name CITY an additional insured and to hold CITY harmless from any and all claims, actions and demands of third parties of any kind> character and description arising out of or due to any accident or mishap in, on, or about said structural encroachment so constructed or so maintained or any error or omission resulting in personal injury or property damage.
3. OWNER agrees to provide CITY and maintain a certificate of insurance from an insurance carrier acceptable to CITY certifying that OWNER has pubhc liability and property damage insurance with limits of not less than $500,000 combined single limit for personal injury and/or property damage for property located in the R-1 zoning district and limits of not less than $1,000,000 Rev, 3/02
Attachment 6
JAN-27-2006 11 :21AM FROM-DON MACKEY OLDS +520 623 5178 T-445 P.005/005 F-526 for property located in all other zoning districts. The certificate must indicate this insurance is primary over any other valid or collectible insurance CITY may have, insures owner's performance of this Hold Harmless Agreement and that the Carrier will notify CITY in the event of any material change in the policy, including the nonrenewal thereof. Said Certificate of Insurance must name CITY, its elected officials, officers, agents and employees as additional insured insofar as the insurance pertains to this encroachment. Owner further agrees to maintain said insurance as long as said encroachment remains on CITY property.
In the event of cancellation or nonrenewal, the inst1rance compally will give thirty (30) days' written notice to CITY. The Certificate must be signed by an authorized employee of the insurance carrier and mailed to : City Clerk, Carmel-by-the-Sea) P. 0. Box CC, Cannel-by-the"Sea, CA 93921.
4. CITY inay terminate and revoke this Agreement at any time that it is determined by the City Council to be in the best interests of City and necessary to promote the public health, safety or welfare. Any expense caused to OWNER, his successors or assigns, by termination of this Agreement shall be borne by OWNER, his successors or assigns.
5. The parties agree that this contract is for the direct benefit of the land in that it makes the property mme usable and increases its value, as such, agree that the covenants herein shall run with the land, and the parties agree that 1he covenants shall bind the successors and assigns of OWNER.
CITY OF CARMEL-BY-THE-SEA:
By: Richard Guillen, City Administrator
ATTEST:
Karen Crouch, City Clerk
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of Monterey ss.
On_�------' 20_, before me, -----------�'Notary Public, personally appeared------�-------• personally known to me or_ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledgment to he/she/they executed the same in his/her/their authorized capacity(ies). and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instroment.
W11NESS my hand and official seal:
Signature ofNotary
Rev. 3/Q:;!
Attachment 6
JAN-27-200� 11 :20AM FROM-DON MACKEY OLDS +520 623 5178 T-445 P.002/005 F-526 DON MACKEY@Y i3MCJANUARY 2712006
TIM MARONEY
CITY OF CARMELBY THE SEA
FAx NO. 831-620-2014
IN REGARD TO THE CERTIFICATE1OF INSURANCE, MR. MACKEY'S AGENT IS LAURIE PIKE ( FARMERS INSURANCE) IN MONTEREY. WE REQUESTED THE NEW CERTIFICATE.AND SHE ADVISED THAT THE C_ITY OF-CARMEL IS LISTED IN THE POLICY AND IT IS AN ON GOING LISTING.
, '
LAURIE'S PHONE NUMBER IS 831-373-2925, §HE WILL BE CALLING YOU REGARDING THIS ISSUE. SHOULD THERE BE ANY OTHER PROBLEM YOU CAN .
CALL ME AT 520-624-0481 AND I WILL GET BACK 1·NVOLVED.
BEST WISHES!
JO H. ATWELL
ASSISTANT TO DON MACKEY
81.5 West Auto Mall Drive • Tucson. Arizona 85705 • tel: 520,624.0481 • fax: 520 623.5178 • www.donmackey.com Attachment 6
JAN-27-2006 11 :20AM FROM-DON MACKEY OLDS +520 623 5178 T-445 P.003/005 F-526 DATE (MMll>Dl'IYf
CERTIFICATE OF LIABILITY INSURANCE
THIS ceRTIFICATE IS ISSUED AS A MATTER OF INFORMATION
ONLY AND COMFERS NO RIGHTS I.WON ntE CERTIFICATI:
Jankovsky Gene�a1 �ns��a.nce
1131 N Count�y Club Rd
TUC�Qn 1 AZ 85716
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INSURERS AFFORDING COVERAGE
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Attachment 6
Attachment 6
Attachment 7
Attachment 7
Attachment 8
Attachment 8
Attachment 8
Attachment 8
Attachment 8
Attachment 9
Rev. 10/2021
RECORDING REQUESTED BY
CITY OF CARMEL-BY-THE-SEA
AND WHEN RECORDED MAIL TO
City of Carmel-by-the-Sea
Attn: City Clerk
Post Office Drawer CC
Carmel, CA 93921 This space is reserved for the Recorder’s use only
HOLD HARMLESS ENCROACHMENT AGREEMENT
AGREEMENT made this 6th day of June 2023, between the CITY OF CARMEL-BY-THE-SEA, hereinafter called CITY, and Thomas Dean & Kristin Kim Sato Fountain TRS, hereinafter called OWNER, with reference to the following facts:
OWNER is in possession of and owns certain real property in CITY known as Block 89, Lot(s) 26, Assessor’s Parcel No. 010-087-019, Residential & Limited Commercial (R-C) Zoning District, and street location northwest corner of Junipero Street and 8th Avenue.
OWNER has requested from CITY permission to construct and maintain a structural encroachment on CITY street or sidewalk area adjacent to or near the property, described as follows:
A three-foot tall and 28-foot long wooden grape stake picket fence located in the public right-of-way five feet, eight inches from the southern street side yard property line of OWNERs property as depicted in the project plans prepared by Mandurrago, Mandurrago, & Sullivan, Inc., dated 1-2-03, for the Las Casitas Residences consisting of 2 sheets, Sheet A1.1 and Sheet L-1, stamped approved and on file in the Community Planning & Building Department, Carmel City Hall, located on the east side of Monte Verde between Ocean Avenue and 7th Avenue, Carmel-By-The-Sea, CA 93921.
NOW, THEREFORE, the parties, in consideration of the mutual covenants contained herein, agree as follows:
1. CITY grants permission to OWNER to construct and maintain a structural encroachment on CITY rightof-way, street, or sidewalk adjacent to, or near, OWNER’S property, as described above. Said permission is subject to the following conditions:
a. Execution of the Hold Harmless Encroachment Agreement and compliance with the provisions of paragraph 3 below.
b.
2. OWNER, their successors, and assigns agree to name CITY as additional insured and to hold CITY harmless from any and all claims, actions, and demands of third parties of any kind, character, and description arising out of or due to any accident or mishap in, on, or about said encroachment so constructed or so maintained or any error or omission resulting in personal injury or property damage.
Attachment 10
Rev. 10/2021
3. OWNER, their successors, and assigns agree to provide CITY and maintain a certificate of insurance from an insurance carrier acceptable to CITY certifying that OWNER has public liability and property damage insurance with limits of not less than $2,000,000 in combined single limit insurance for personal injury and/or property damage per occurrence and $4,000,000 in aggregate caused by or due to the presence of the encroachment in the CC, SC, RC and R-4 Districts and $500,000 of the coverage in the R-1 district. The certificate must indicate this insurance is primary over any other valid or collectible insurance CITY may have, ensures OWNER’S performance of the Hold Harmless Encroachment Agreement, and that the insurance carrier will notify CITY in the event of any material change in the policy, including the nonrenewal thereof. Said Certificate of Insurance must name CITY, its elected officials, officers, agents, and employees as additional insured insofar as the insurance pertains to the encroachment. OWNER, their successors, and assigns further agree to maintain said insurance as long as said encroachment remains on CITY property.
In the event of cancellation or nonrenewal, the insurance company will give thirty (30) days written notice to CITY. The Certificate of Insurance must be signed by an authorized employee of the insurance carrier and mailed to: City of Carmel-by-the-Sea, Attn: City Clerk, PO Box CC, Carmel-by-the-Sea, CA 93921.
4. CITY may terminate and revoke this Agreement at any time that it is determined by the City Council to be in the best interests of CITY and necessary to promote the public health, safety, or welfare. Any expenses caused to OWNER, their successors, or assigns by the termination of this Agreement shall be borne by the OWNER, their successors, or assigns.
5. The parties agree that this contract is for the direct benefit of the land in that it makes the property more useable and increases its value, as such, agree that the covenants herein shall run with the land, and the parties agree that the covenants shall bind the successors and assigns of OWNER.
CITY OF CARMEL-BY-THE-SEA: OWNER(S):
Richard L. Rerig, City Administrator Thomas Dean Fountain, Property Owner Kristin Kim Sato, Property Owner
ATTEST:
Brandon Swanson, Director of Community
Planning & Building
Attachment 10
EN 21-272 (Fountain)
April 5, 2022
12.08.060 Encroachment Application Review Standards.
A. Need. The applicant shall be determined to have a justifiable need for the encroachment, and the encroachment shall not be contrary to the public interest.
B. Safety. The granting of an encroachment permit shall not create a hazard to public health or safety.
C. Drainage. The proposed encroachment shall not adversely affect the normal drainage of surface water, unless an acceptable mitigation is included that will be advantageous to the general public and meet the standards herein.
D. Circulation and Parking.
1. The proposed encroachment shall not adversely affect vehicular and/or pedestrian traffic nor the parking of vehicles.
2. The proposed encroachment shall not adversely impact existing rights-of-way nor preclude or make difficult the establishment or improvement of existing or potential streets or pedestrian ways.
E. Public Use and Enjoyment.
1. The proposed encroachment shall not diminish public use or enjoyment, either visual or physical, of the City property or public right-of-way to be encroached upon.
2. The encroachment and enjoyment shall be in the public interest.
3. The length of time an encroachment has existed shall not by itself prejudice a decision.
F. Compatibility.
1. The proposed encroachment and its mitigation shall be consistent with the General Plan and the adopted ordinances of the City. Particular attention shall be given to Section P1-48 of the General Plan, which prohibits the construction of sidewalks and concrete curbs in the R-1 district, unless necessary for drainage and/or pedestrian safety.
2. The encroachment shall not create, extend, or be reasonably likely to lead to an undesirable land use precedent.
3. Granting of a permit shall not adversely affect the usability or enjoyment of one or more adjoining parcels.
4. The proposed encroachment and its mitigation shall be compatible with the surrounding area and adjoining properties.
G. Public Property/Greenbelt.
1. The proposed encroachment shall not adversely affect any public property, including existing vegetation or its root structure, and shall not significantly reduce greenbelt area that may be used for tree planting.
2. Significant trees which would be affected by the proposed encroachment shall be identified by the Director of Forest, Parks and Beach and approval for removal shall follow City policy.
H. Mitigation. When deemed appropriate by the City, the applicant shall include those measures appropriate to compensate the City for the loss of the use of City property or the public right-of-way, or to repair damage thereto. (Ord. 89-9 § 1, 1989).
Attachment 11