Agenda packet — Carmel-by-the-Sea City Council, June 4, 2024 (part 1 of 2)

CITYOF CARMEL-BY-THE-SEA

CITY COUNCIL AGENDA
Mayor Dave Potter, Councilmembers Jeff Baron,
Alissandra Dramov, Karen Ferlito, and Bobby
Richards
Contact: 831.620.2000 www.ci.carmel.ca.us
All meetings are held in the City Council Chambers
East Side of Monte Verde Street
Between Ocean and 7th Avenues

REGULAR MEETING
Tuesday, June 4, 2024
4:30 PM

HYBRID MEETING ATTENDANCE OPTIONS
This meeting will be held in person and via teleconference ("hybrid"). The public is welcome to attend the meeting in person or remotely via Zoom, however, the meeting will proceed as normal even if there are technical difficulties accessing Zoom. The City will do its best to resolve any technical issues as quickly as possible. To view or listen to the meeting from home, you may also watch the live stream on the City's YouTube page at: https://www.youtube.com/@CityofCarmelbytheSea/streams. To participate in the meeting via Zoom, copy and paste the link below into your browser.
https://ci-carmel-ca-us.zoom.us/j/89775703025 Webinar ID: 897 7570 3025 Passcode:
297166 Dial in: (253) 215-8782

HOW TO OFFER PUBLIC COMMENT
The public may give public comment at this meeting in person, or using the Zoom teleconference module, provided that there is access to Zoom during the meeting. Zoom comments will be taken after the in-person comments. The public can also email comments to [email protected]. Comments must be received at least 2 hours before the meeting in order to be provided to the legislative body. Comments received after that time and up to the beginning of the meeting will be made part of the record.

OPEN SESSION
4:30 PM

CALL TO ORDER AND ROLL CALL

PLEDGE OF ALLEGIANCE

EXTRAORDINARY BUSINESS
A. Pride Month Proclamation
B. Carmel High School Report Out

PUBLIC APPEARANCES
Members of the public are entitled to speak on matters of municipal concern not on the agenda during Public Appearances. Each person's comments shall be limited to 3 minutes, or as otherwise established by the Chair.

Persons are not required to provide their names, however, it is helpful for speakers to state their names so they may be identified in the minutes of the meeting. Under the Brown Act, public comment for matters on the agenda must relate to that agenda item and public comments for matters not on the agenda must relate to the subject matter jurisdiction of this legislative body. If a member of the public attending the meeting remotely violates the Brown Act by failing to comply with these requirements of the Brown Act, then that speaker will be muted.

ANNOUNCEMENTS
A. City Administrator Announcements
B. City Attorney Announcements
C. Councilmember Announcements
D. Ad Hoc Committees - Report Out

ORDERS OF BUSINESS
Orders of Business are agenda items that require City Council, Board or Commission discussion, debate, direction to staff, and/or action.

1. Resolution 2024-042, authorizing the City Administrator to execute Amendment No.1 to the Agreement with Visit Carmel, a nonprofit corporation, for marketing services extending the term through June 30, 2027

2. Resolution 2024-043, authorizing the City Administrator to execute an agreement with Keep It Simple for the installation and configuration of network firewalls and associated switching hardware in a total amount not to exceed $109,998 for a contract term ending July 30, 2029

3. Resolution 2024-044 approving a 3.59 percent rate increase to charges by the City’s franchised hauler, GreenWaste Recovery, for the collection of solid waste, recycling and organics, effective July 1, 2024, and approving Amendment No. 3 to the Memorandum of Understanding between ReGen Monterey and Member Agencies for Fiscal Year 2024/25

PUBLIC HEARINGS

4. Resolution 2024-046 Adopting the Fiscal Year 2024-2025 Appropriations Limit

5. Resolution 2024-047 Adopting the Fiscal Year 2024-2025 Annual Operating and Capital Budget

6. Resolution 2024-048 adopting Fiscal Year 2024-2025 Fee schedule for Administrative Services, Community Planning and Building, Public Safety and Public Works Services

7. First Reading and Introduction of Ordinance No. 2024-001, adding Chapter 8.30 to Title 8 to the Carmel-by-the-Sea Municipal Code regarding a policy related to the use of Military Equipment by the Carmel-by-the-Sea Police Department Recommendation:

1. Request the City Attorney read the title of the Ordinance only; and

2. Waive the reading in full and introduce Ordinance No. 2024-001 adding Chapter

8.30 to Title 8 to the Carmel-by-the-Sea Municipal Code regarding a policy related to the use of Military Equipment by the Carmel-by-the-Sea Police Department; and set a second reading for July 8, 2024.

FUTURE AGENDA ITEMS

ADJOURNMENT
This agenda was posted at City Hall, Monte Verde Street between OceanAvenue and 7thAvenue, Harrison Memorial Library, located on the NE corner of Ocean Avenue and Lincoln Street, the Carmel-by-the-Sea Post Office, 5th Avenue between Dolores Street and San Carlos Street, and the City's webpage http://www.ci.carmel.ca.us in accordance with applicable legal requirements.

SUPPLEMENTAL MATERIAL RECEIVED AFTER THE POSTING OF THEAGENDA Any supplemental writings or documents distributed to a majority of the City Council regarding any item on this agenda, received after the posting of the agenda will be available for public review at City Hall located on Monte Verde Street between Ocean and Seventh Avenues during regular business hours.

SPECIAL NOTICES TO PUBLIC
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk's Office at 831-620-2000 at least 48 hours prior to the meeting to ensure that reasonable arrangements can be made to provide accessibility to the meeting (28CFR 35.102-35.104 ADA Title II).

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
June 4, 2024

EXTRAORDINARY BUSINESS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Chip Rerig, City Administrator
APPROVED BY: Chip Rerig, City Administrator
SUBJECT: Pride Month Proclamation
RECOMMENDATION:

BACKGROUND/SUMMARY:

FISCAL IMPACT:

PRIOR CITY COUNCIL ACTION:

ATTACHMENTS:

Pride Month Proclamation

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL

PROCLAMATION

A PROCLAMATION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA RECOGNIZING JUNE 2024 AS LGBTQ PRIDE MONTH
WHEREAS, many cities across the United States recognize June as Lesbian, Gay, Bisexual, Transgender and Queer Pride Month, in commemoration of the Stonewall riots in June of 1969 and to celebrate the progress that has been made for LGBTQ rights; and
WHEREAS, continued discrimination against LGBTQ persons makes it important for cities to stand up and show solidarity and support for our LGBTQ residents and those in the community at large; and
WHEREAS, the City of Carmel-by-the-Sea has a diverse Lesbian, Gay, Bisexual, Transgender and Queer community and is committed to celebrating and supporting visibility, dignity and equality for all people in the community; and WHEREAS, The City of Carmel-by-the-Sea has a long and proud history of celebrating diversity, promoting inclusion and defending civil rights both within our community and outside of our community; and
WHEREAS, it is of great importance to respect one another and appreciate our differences.

NOW, THEREFORE, BE IT PROCLAIMED THAT I, Dave Potter, Mayor of the City of Carmel-by-the-Sea, on behalf of the City Council and the citizens of Carmel hereby proclaim June 2024 as LGBTQ Pride Month.
______________________
Dave Potter, Mayor
Attachment 1

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
June 4, 2024

ORDERS OF BUSINESS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Emily Garay, Administrative Analyst
APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Resolution 2024-042, authorizing the City Administrator to execute Amendment No.1 to the Agreement with Visit Carmel, a nonprofit corporation, for marketing services extending the term through June 30, 2027
RECOMMENDATION:

Adopt Resolution 2024-042, authorizing the City Administrator to execute Amendment No.1 to the Agreement with Visit Carmel, a nonprofit corporation, for marketing services extending the term through June 30, 2027.

BACKGROUND/SUMMARY:

Recognizing the City of Carmel-by-the-Sea’s status as a lauded travel destination and potential for further growth as a regional, national, and international travel destination, the City has historically worked with outside agencies to develop a destination marketing plan and to allocate funding for marketing efforts with attention to tourism being a leading driver of the City’s economic vitality and fiscal health, and a major contributor to the sales and use taxes and the transient occupancy taxes the City receives.

Visit Carmel has served as the City’s marketing administrator for the last six years and has promoted responsible travel by visitors in its messaging. It has served the City by encouraging sustainability by recycling, no littering, environmentally responsible use of the beach, and designing a marketing campaign encouraging visitors to, “Love Carmel Like A Local”. Campaigns by Visit Carmel have included producing marketing collateral such as median islands banners, custom Love Carmel Like A Local wooden signs that blend into the City character, and placards for restaurants, shops, and hotels.

Based on Visit Carmel’s expertise in marketing; knowledge and familiarity with Carmel-by-the-Sea’s values, its marketing objectives for responsible and sustainable travel and to ensure continuity and consistency of brand messaging, staff recommends amending the existing Agreement with Visit Carmel, extending the term through June 30, 2027, with fiscal year compensation amounts subject to appropriations as determined by City Council as part of the annual budget adoption process.

FISCAL IMPACT:

The Fiscal Year 2024-2025 Recommended Budget allocates One Hundred and Twenty Thousand Dollars ($120,000.00) to Visit Carmel to serve as a marketing administrator to promote the City as a destination for sustainable and responsible tourism and encourage visitors to stay overnight, dine, and shop in the City.

The amount for Fiscal Year 2024-2025 will be One Hundred and Twenty Thousand Dollars ($120,000.00) contingent on Council approval and adoption of the Fiscal Year 2024-2025 budget. The amount of the agreement for the next two fiscal years is subject to appropriations as determined by Council as part of the annual budget adoption process.

PRIOR CITY COUNCIL ACTION:

Council adopted a resolution to execute an agreement with Visit Carmel for marketing services on January 9, 2018.

Council adopted a resolution to execute an agreement with Visit Carmel for marketing services on June 1, 2021.

ATTACHMENTS:

Attachment 1) Resolution 2024-042
Attachment 2) Visit Carmel Amendment No. 1

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2024 - 042

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA AUTHORIZING THE CITY ADMINISTRATOR TO EXECUTE AMENDMENT NO. 1 TO THE

PROFESSIONAL SERVICES AGREEMENT WITH VISIT CARMEL, A NONPROFIT CORPORATION, FOR MARKETING SERVICES FOR THE TERM OF JULY 1, 2021 TO JUNE 30, 2027 FOR A NOT-TO-EXCEED AMOUNT SUBJECT TO THE ANNUAL APPROPRIATION

OF FUNDS BY THE CITY COUNCIL DURING THE ANNUAL BUDGET PROCESS FOR EACH FISCAL YEAR DURING THE REMAINDER OF THE TERM.

WHEREAS, the City of Carmel-by-the-Sea Council recognizes the importance of tourism to the City’s economic vitality and fiscal health; and
WHEREAS, the City Council also desires to have a consistent and cohesive marketing campaign to promote responsible and sustainable travel; and WHEREAS, the City wishes to continue its agreement with an organization with advertising and marketing expertise to help promote the City as a destination; and WHEREAS, Carmel Municipal Code Section 3.12.140 allows for the dispensation of the bidding process when a professional service involves specialized knowledge; and WHEREAS, Visit Carmel has specialized marketing knowledge; is responsible for implementing marketing programs for the Carmel Hospitality Improvement District and the Carmel Restaurant Improvement District and has worked collaboratively with the City and its partner agencies to promote Carmel-by-the-Sea as a visitor destination; and WHEREAS, Visit Carmel is well suited to continue to serve as brand ambassador for the City and promote the interests of the retail, restaurants and eating establishments and lodging industries and entering into an agreement with Visit Carmel for marketing service is in the best interest of the City as it allows for continuity, consistency and cohesion of the City’s brand messaging and marketing campaigns; and
WHEREAS, on June 1, 2021, the City Council adopted Resolution 2021-024 authorizing the City Administrator to execute a Professional Services Agreement for marketing services with Visit Carmel, a nonprofit corporation, for an amount subject to the annual appropriations of funds as determined by the City Council as part of the annual budget approval process for the duration of the term of the agreement; and
WHEREAS, the City Council allocated a not-to-exceed amount of One Hundred Thousand Eight Hundred Dollars ($100,800.00) for Fiscal Year 2021-2022; and WHEREAS, the City Council allocated a not-to-exceed amount of One Hundred Twenty Thousand Dollars ($120,000.00) for Fiscal Year 2022-2023; and WHEREAS, the City Council allocated a not-to-exceed amount of One Hundred Twenty Thousand Dollars ($120,000.00) for Fiscal Year 2023-2024; and Attachment 1
Resolution 2024-042

Page 2 of 2 ends

WHEREAS, the funding beyond the original Professional Services Agreement and City Council annual allocations will be exceeded for continued services and any additional funding will be subject to the annual appropriation of funds by the Carmel-by-the-Sea City Council during the annual budget process for each fiscal year for the remainder of term; and WHEREAS, the Carmel-by-the-Sea Municipal Code requires contracts exceeding FiftyNine Thousand Nine Hundred and Ninety-Nine Dollars ($59,999.00) to be entered into only by City Council authorization.

NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMELBY-THE-SEA DOES HEREBY:

Authorize the City Administrator to execute Amendment No.1 to the Professional Services Agreement with Visit Carmel, a nonprofit corporation, for continued marketing services to promote travel and tourism in Carmel-by-the-Sea for a term through June 30, 2027, subject to the annual appropriation of funds by the City Council during the annual budget process for each fiscal year during the remainder of the term.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 4th day of June 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:
________________________ _________________________
Dave Potter Nova Romero, MMC
Mayor City Clerk
Attachment 1
AMENDMENT NO. 1
AGREEMENT NUMBER ADM-VC-DEST-89-21-22
City Marketing Administrator

1. This amendment (the “Amendment”) is made by City of Carmel-by-the-Sea, a municipal corporation, (hereinafter “City”), and Visit Carmel, a nonprofit corporation, (hereinafter “Consultant”), collectively referred to herein as the “parties”, to agreement ADM-VC-DEST-89-21-22, (the “Agreement”) executed on July 2, 2021.

2. The Agreement is amended as follows:
a. Section 3.A (Term) of the Agreement is amended and restated as follows:

The work under this Agreement will commence on July 1, 2021 and shall be completed by June 30, 2027, subject to annual appropriations of the City Council for each fiscal year and unless terminated by either party or the City grants an extension of time in writing pursuant to the terms of this Agreement, except for provisions in this Agreement that will survive the termination or completion of this Agreement. Consultant will perform Change Order services as set out in Section 1.B, “Amendment of Services (Change Orders)”, in a timely manner or in accordance with the agreed upon Change Order Project Schedule. b. Section 2.A (Compensation) of the Agreement is amended and restated as follows:

Subject to any limitations set forth in this Agreement, the City agrees to pay and Consultant agrees to accept as full and fair consideration for the term of July 1, 2021 to June 30, 2022 (Fiscal Year 2021-2022), a total amount not-to-exceed One Hundred Thousand and Eight Hundred Dollars ($100,800.00), subject to the appropriation of funds by City Council as part of the adoption of the Fiscal Year 2021-2022 Budget.

For Fiscal Year 2022-2023 and Fiscal Year 2023-2024, the annual fiscal year compensation shall be subject to the annual appropriation of funds by the Carmel-by-the-Sea City Council during the annual budget process for each fiscal year during the remainder of the term.

For Fiscal Year 2024-2025, Fiscal Year 2025-2026, and Fiscal Year 2026-2027, the annual fiscal year compensation shall be subject to the annual appropriation of funds by the Carmelby-the-Sea City Council during the annual budget process for each fiscal year during the remainder of the term.

Such compensation is the “Maximum Authorized Expenditure” under this Agreement. The Fee Schedule includes, but is not limited to, fees for each phase and task, not-to-exceed total fee, hourly rates, reimbursable rates and subconsultant mark-up rates. The use of subconsultants will not be considered a reimbursable expense, and such costs must be applied towards the approved budgeted amount. Payment of any compensation to Consultant is contingent upon performance of the terms and conditions of this Agreement to the satisfaction of the City. If the City determines that the Services set forth in the written invoice have not performed in accordance with the terms of this Agreement, the City is not responsible for payment until the Services have been satisfactorily performed.

Attachment 2

3. Except as set forth in this Amendment, the Agreement is unaffected and shall continue in full force and effect in accordance with its terms. If there is conflict between this amendment and the Agreement or any earlier amendment, the terms of this amendment will prevail.

4. Each party represents and warrants that all necessary action has been taken by such party to authorize the undersigned to execute this Amendment and to bind the parties to the performance of its obligations.

5. This Amendment may be executed in counterparts, each of which will be deemed an original, and all of which, when taken together, constitute one and the same instrument. The Amendment will be considered executed when the signature of a party is delivered by facsimile or other electronic transmission. Such facsimile or other electronic signature will have the same effect as an original signature.

6. If any term, condition, or covenant of this Amendment is declared or determined by any court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Amendment will not be affected and the Amendment will be read and construed without the invalid, void or unenforceable provision.

CONSULTANT:

By: _____________________________ Date: ______________________

CITY:

By: _____________________________ Date: ___________________ Chip Rerig, City Administrator
ATTEST:

By: _____________________________ Date: ______________________ Nova Romero, City Clerk
Attachment 2

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
June 4, 2024

ORDERS OF BUSINESS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Chip Rerig, City Administrator
APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Resolution 2024-043, authorizing the City Administrator to execute an agreement with Keep It Simple for the installation and configuration of network firewalls and associated switching hardware in a total amount not to exceed $109,998 for a contract term ending July 30, 2029
RECOMMENDATION:

Adopt Resolution 2024-043, authorizing the City Administrator to execute an agreement with Keep It Simple for the installation and configuration of network firewalls and associated switching hardware in a total amount not to exceed $109,998 for a contract term ending July 30, 2029.

BACKGROUND/SUMMARY:

The firewalls we currently use were purchased in 2017. Generally, this type of hardware should be replaced every five years or so depending on several factors including serviceability, fitness and appropriateness for the current workload. In this case, these firewalls are entering a state “end of useful life”, where all updates and patches are discontinued. It is important to replace these devices as soon as possible.

The City is seeking to take advantage of pricing made available with Palo Also Networks through the California Multiple Award Schedules (CMAS) Contract number 3-18-70-2443Q and the Palo Alto Networks partner, Keep It Simple. California Multiple Award Schedules (CMAS) offer a wide variety of commodity, non-IT Services, and information technology products and services at prices which have been assessed to be fair, reasonable and competitive. The use of these contracts is optional and is available to California State and Local Government agencies.

Sections 3.12.140 and 3.12.170 of the Carmel-by-the-Sea Municipal Code authorize the City Administrator to take advantage of valid contract terms that have been negotiated by another governmental agency, where that agency had used a quote or bid process substantially conforming with Carmel-by-the-Sea sections

3.12.140, 3.12.170 and State Law. Staff has verified that the CMAS process and agreement with Palo Alto Networks satisfied these open market bid process requirements.

Keep It Simple will furnish, install, configure and provide training for two Palo Alto Networks PA-1410 firewalls. Keep It Simple is a California technology company with a long history working with Palo Alto Networks.

FISCAL IMPACT:

The 2024-25 budget included 180,000.00 for the purchase and installation of two firewalls. We received several vendor proposals, but felt this proposal would give the city of Carmel-by-the-Sea the network security protection that best meets the city’s needs.

PRIOR CITY COUNCIL ACTION:

Resolution 2017-044 authorized the City Administrator to purchase our current firewalls, the resolution passed May 2, 2017.

ATTACHMENTS:

Attachment 1) Resolution 2024-043
Attachment 2) Keep It Simple Quote

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2024-043

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA AUTHORIZING

THE CITY ADMINISTRATOR TO EXECUTE AN AGREEMENT WITH KEEP IT SIMPLE FOR THE PURCHASE AND INSTALLATION OF TWO PALO ALTO NETWORKS PA-1410 FIREWALLS FOR AN AMOUNT NOT TO EXCEED $109,998
WHEREAS, Keep IT Simple is a partner of Palo Alto Networks and can furnish, configure and install firewall products manufactured by Palo Alto Networks; and WHEREAS, Carmel-by-the-Sea budgeted $180,000.00 for the purchase and installation of firewall products; and
WHEREAS, Keep IT Simple can provide Palo Alto Networks firewalls through the California Multiple Award Schedules (CMAS) Contract number 3-18-70-2443Q; and WHEREAS, contracts and expenditures exceeding $25,000 require Council approval.

NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA DOES HEREBY:

Authorize the City Administrator to execute an agreement with Keep It Simple for the installation and configuration of network firewalls and associated switching hardware in a total amount not to exceed $109,998 for a contract term ending July 30, 2029.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 4th day of June, 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:
_________________________ _________________________
Dave Potter Nova Romero, MMC
Mayor City Clerk
Attachment 1
Attachment 2
KIS - Keep IT Simple
43160 Osgood Road
Fremont, CA 94539
United States
Quote # 10252 v5
Date 2024/05/08
Expires 2024/06/08
Contact Matt Eickmann
Prepared for City of Carmel-by-the-Sea
Joel Staker
Monte Verde Street
Carmel-by-the-Sea, CA 93923
United States
T: 831-620-2025
E: [email protected]
02-15-2024 PAN 1410
Fees
Category Item Qty Price Total
Network
Security &
Firewalls
Palo Alto Networks PA-1410 Network Security/Firewall Appliance Strata PA-1410 Network Security/Firewall Appliance - 12 Port - 10GBase-X, 5GBase-T, 10/100/1000Base-T, 1000Base-X - 10 Gigabit Ethernet - 1.11 GB/s Firewall Throughput - 3DES, AES (128-bit), AES (192-bit), AES (256-bit), MD5, SHA-1, SHA-256, SHA-384, SHA-512, SSL - 8 x RJ-45 - 10 Total Expansion Slots - 1U - Rack-mountable 2 $7,314.00 $14,628.00
Software
Licensing
Palo Alto Core Security Bundle - Subscription License - 5 Year Palo Alto Core Security Bundle Advanced Threat Prevention, Advanced URL Filtering, Advanced Wildfire, DNS Security and SD WAN - Subscription License - 5 Year
2 $27,153.00 $54,306.00
†
Services Palo Alto Premium Support - 5 Year - Service
Palo Alto Premium Support - 5 Year - Service - Technical Provides reliable support to resolve all your technical issues 5 Year service duration to ensure maximum productivity and deliver timely results
2 $8,316.00 $16,632.00
†
Switches Meraki MS350-24X L3 STCK CLD-MNGD 24XGIGE MGIG UPOE Switch 2 $6,116.00 $12,232.00 Cable Meraki 40GbE QSFP Cable, 1 Meter 2 $160.00 $320.00 Power
Supplies
Meraki 250WAC PSU 2 $410.00 $820.00
Software
Licensing
Meraki MS350-24X Enterprise Support - Subscription License - 5 Year Meraki Enterprise + 5 Years Enterprise Support - Subscription License - 1 Switch - 5 Year - Cisco Meraki MS350-24X Cloud Managed Switch - Subscription License 1 Switch - 5 Year License Validation Period 2 $1,010.00 $2,020.00
†

ACCEPT QUOTE
Quote
KIS - Keep IT Simple - Quote # 10252 v5 2 / 4
Attachment 2
† Non-taxable item
Please contact us if you have any questions.

Comments
CMAS: 3-18-70-2443Q
One-Time Subtotal $107,408.00
Sales Tax Rate (9.25%) $2,590.00
Total $109,998.00 USD
Services /
Professional
Services
KIS Professional Services - Firewall and Switch Installation Configuration migration, and cleanup
Onsite cutover
Configure and deploy two WAN switches
1 $6,450.00 $6,450.00
†
Category Item Qty Price Total
Cost Breakdown
Category Fees
Network Security & Firewalls $14,628.00
Software Licensing $56,326.00
Services $16,632.00
Switches $12,232.00
Cable $320.00
Power Supplies $820.00
Services / Professional Services $6,450.00
Sales Tax Rate $2,590.00
Total $109,998.00 USD
Terms and Conditions
A convenience fee of two point nine percent (2.9%) will be applied to credit card purchases.

Unless otherwise stated on the invoice, payment terms are thirty (30) days net from date of invoice. If Buyer fails to pay in accordance with these terms, KIS, at its option, may charge Buyer, and Buyer shall pay KIS (in addition to the price), a delinquent administrative service charge on the unpaid amount at the rate of one and a half percent (1.5%) per month (or such lower rate as may be the maximum allowable by law) from any such date until the date of payment. Should the Buyer become delinquent in the payment of any sum due to KIS, KIS shall not be obligated to continue performance under any agreement with Buyer. In the event of default, collection costs and attorney fees may apply.

Contact

ACCEPT QUOTE
Quote
KIS - Keep IT Simple - Quote # 10252 v5 3 / 4
Attachment 2
Matt Eickmann | Enterprise Account Manager
(510) 403-7561 [email protected]
Keep IT Simple
43160 Osgood Road, Fremont, CA 94539
Keeping IT Simple Since 1988. www.kiscc.com
Quote
KIS - Keep IT Simple - Quote # 10252 v5 4 / 4
Attachment 2

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
June 4, 2024

ORDERS OF BUSINESS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Mary Bilse, Environmental Programs Manager APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Resolution 2024-044 approving a 3.59 percent rate increase to charges by the City’s franchised hauler, GreenWaste Recovery, for the collection of solid waste, recycling and organics, effective July 1, 2024, and approving Amendment No. 3 to the Memorandum of Understanding between ReGen Monterey and Member Agencies for Fiscal Year 2024/25
RECOMMENDATION:

Adopt Resolution 2024-044 approving a 3.59 percent rate increase to charges by the City’s franchised hauler, GreenWaste Recovery, for the collection of solid waste, recycling and organics, effective July 1, 2024, and approving Amendment No. 3 to the Memorandum of Understanding between ReGen Monterey and Member Agencies for Fiscal Year 2024/25.

BACKGROUND/SUMMARY:

Solid Waste, Recycling, and Organics Collection Rate Adjustment Calculation On June 17, 2014, Council approved a Franchise Agreement (Agreement) with GreenWaste Recovery (GWR) for the collection of solid waste, recycling and organics, subsequent to a competitive Request for Proposals selection process. The Agreement became effective on July 1, 2015 and expires on June 30, 2030. The Agreement includes a prescribed formula to determine annual rate adjustments by GWR, effective each year on July 1. This index-based formula includes the cost of disposal and processing (“tipping fee”) at the ReGen Monterey (formerly known as Monterey Regional Waste Management District) facility in Marina, inflationary indexes for adjustments to GWR labor and operating costs, regional implementation of SB 1383 (further discussed below), and the City’s Franchise Fee of 13%.

HF&H Consultants, LLC (HF&H) was retained by ReGen Monterey to review GWR’s request for an adjustment to customer rates, effective July 1, 2024 (Attachment 2). The rate review resulted in a 3.59% rate increase due to labor and material inflationary indices for the period reviewed. ReGen Monterey originally estimated the City’s rate increase to be 3.95%, but after review, it was reduced to a 3.59% rate increase.

Rate Adjustment Approval
While the Agreement requires the City Council to approve annual rate adjustments, the rate adjustment is based upon disposal fees and actual tonnage, inflationary indexes for GWR labor and operational costs, and cost for the City’s Franchise Fee and other regulatory fees. City staff, in tandem with ReGen Monterey staff and HF&H, finds the rate calculation methodology to be consistent with the Agreement. Therefore, staff recommends Council approve Resolution 2024-044 (Attachment 1) and rate adjustment, which becomes effective on July 1, 2024, in accordance with the Agreement.

Memorandum of Understanding (MOU) for Regional SB1383 Implementation In November 2020, CalRecycle issued regulations to implement Senate Bill (SB) 1383, with the goal to reduce the amount of organic material being landfilled by 75% by 2025. CalRecycle regulations place significant responsibility for implementation on local municipalities, including food waste collection from all residential and commercial customers, public education and outreach, enforcement, developing or increasing the capacity of edible food recovery programs, and purchasing recycled organic material such as compost. In response to the SB 1383 regulations, ReGen Monterey’s Technical Advisory Committee (TAC), which is comprised of staff from each Member Agency including the City, waste haulers in the ReGen Monterey service area, and ReGen Monterey, have been working collaboratively to implement program changes to meet the regulations.

The Member Agencies determined ReGen Monterey has the expertise and resources necessary to implement shared activities on the Member Agencies’ behalf, and agreed to reimburse ReGen Monterey for proportionate shares of designated annual costs incurred by ReGen Monterey for these activities under the MOU regarding assistance with compliance with SB 1383. Elements of the regulations that are being managed by ReGen Monterey under guidance of the TAC are similar to last year and include public outreach, contamination monitoring, enforcement, reporting, and edible food recovery programs. The regional costs for implementation of SB 1383 under this MOU are included in the collection rates charged by GWR. The MOU Amendment No. 3 is included as Attachment 3.

The City’s share of regional costs for implementation of SB 1383 in Fiscal Year (FY) 2024/25 is $11,225.

This amount is reflected as an agency fee in the solid waste, recycling, and organics collection rate adjustment.

FISCAL IMPACT:

The new collection rates reflect an increase of 3.59 % and are included as Exhibit A in Resolution 2024-044 (Attachment 1). The 3.59% rate increase is due to labor and material inflationary indices for the period reviewed. The cost of SB 1383 implementation is also included in the fees.

For context, a residential customer with a 32-gallon trash cart will now pay $53.78 a month for solid waste, recycling and yard trimming service, as compared to the current rate of $51.91 a month, or $22.44 more per year. Commercial rates vary based upon the size of the cart, frequency of collection, and type of collection service.

The City’s share of regional cost to ReGen for FY 2024/25 will increase from $9,486 to $11,225. This cost will be covered in the Public Works/Environmental Programs operating budget.

The City’s Franchise Fee of 13% for FY 2023/2024 was estimated at $443,074 and for next FY 2024/25, the franchise fee is estimated at $458,996.

PRIOR CITY COUNCIL ACTION:

In June 2021, Council approved GWR’s imposition of a 2% formula-based rate adjustment for the collection of solid waste, recycling and organics. GWR’s rate increase was primarily due to the creation of a $72,600 fund to buffer anticipated costs of SB 1383.

In November 2021, Council amended the City’s Solid Waste and Materials Recovery Ordinance (Chapter

8.16) to address the new requirements of SB 1383. In December 2021, Council amended the Franchise Agreement with GWR to comply with SB 1383 and approved a 3.76% extraordinary rate increase to cover the additional operational costs associated with SB 1383.

In June 2022, Council approved a 2.14% increase for GWR for the collection of solid waste, recycling and organics. Council also approved Amendment No. 1 to the MOU between the Monterey Regional Waste Management District and Member Agencies for FY 2022/23 regional costs associated with SB 1383.

In June 2023, Council approved a 3.71% increase for GWR for the collection of solid waste, recycling and organics. Council also approved Amendment No. 2 to the MOU for FY 2023/2024.

ATTACHMENTS:

Attachment 1) Resolution 2024-044
Attachment 2) HF&H Rate Increase Review
Attachment 3) MOU Amendment No. 3

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2024-044

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA APPROVING A 3.59 PERCENT RATE INCREASE TO CHARGES BY THE CITY’S

FRANCHISED HAULER, GREENWASTE RECOVERY, FOR THE COLLECTION OF SOLID WASTE, RECYCLING AND ORGANICS, EFFECTIVE JULY 1, 2024, AND APPROVING AMENDMENT NO.3 TO THE MEMORANDUM OF UNDERSTANDING BETWEEN REGEN MONTEREY AND MEMBER AGENCIES FOR FISCAL YEAR 2024/25
WHEREAS, the City of Carmel-by-the-Sea (City) entered into a Franchise Agreement with GreenWaste Recovery, Inc. (GWR) on June 17, 2014 for solid waste, recycling, and organics collection services for the period of July 1, 2015 through June 30, 2030; and, WHEREAS, Section 8.2 of the Franchise Agreement requires annual inflationary adjustments to customer rates on July 1 of each year, as described in Exhibit E1 to the Agreement, based on agreed-upon cost indices, changes in tipping fees at the ReGen Monterey (formerly Monterey Regional Waste Management District) landfill, City fees, and actual tonnage of materials collected by GWR; and,
WHEREAS, HF&H Consultants, LLC (HF&H) was retained by ReGen on behalf of all its member agencies to review GWR’s request for an adjustment to customer rates, submitted to the City on March 1, 2024; and,
WHEREAS, HF&H’s calculation of the rate adjustments have been reviewed by City staff, and staff finds the calculations to be consistent with the methodology and requirements of the Franchise Agreement; and,
WHEREAS, the rate review resulted in a 3.59 percent rate increase; and, WHEREAS, in September 2016, Senate Bill 1383 (SB 1383) established methane emissions reduction targets, and in November 2020, CalRecycle issued regulations to implement SB 1383; and
WHEREAS, the ReGen’s Technical Advisory Committee developed a Memorandum of Understanding to conduct tasks to comply with CalRecycle SB 1383 regulations on a regional basis; and
WHEREAS, regional implementation costs included in the Memorandum of Understanding must be updated annually; and
WHEREAS, the City’s share of regional implementation costs is reflected as an agency fee in the solid waste, recycling, and organics collection rate adjustment.

NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES HEREBY:

Attachment 1
Resolution No. 2024-044

Page 2 ends

• Approve a 3.59 percent rate increase to charges by the City’s franchised hauler, GreenWaste Recovery, for the collection of solid waste, recycling and organics, effective on July 1, 2024, as shown in the attached Exhibit A. • Approve Amendment No. 3 to the Memorandum of Understanding between ReGen and Member Agencies for Fiscal Year 2024/25 regional costs associated with SB 1383.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA this 4th day of June, 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:
_________________________ _________________________
Dave Potter Nova Romero, M.M.C.

Mayor City Clerk
Attachment 1
Resolution No. 2024-044

Page 3 ends

EXHIBIT A
Franchise Agreement
Rates Effective July 1, 2024
(All rates are monthly unless stated otherwise)
Attachment 1
Resolution No. 202
4-044

Page 4 ends

Attachment 1
Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105 Northern California
Walnut Creek, California 94596 Southern California
Telephone: 925/977-6950 www.hfh-consultants.com
May 2, 2024
Mary Bilse
Environmental Compliance Manager
City of Carmel-by-the-Sea
Sent via E-mail
Subject: Review of GreenWaste Recovery’s 2024-25 Rate Request – Final Report Mary Bilse:

HF&H Consultants, LLC (HF&H) was retained by the Monterey Regional Waste Management District (District) to assist with a review of GreenWaste Recovery’s (GWR) request for an adjustment to customer rates, effective July 1, 2024, submitted to the City of Carmel-by-the-Sea (City) on March 1, 2024. This report presents our findings and recommendations.

EXECUTIVE SUMMARY
HF&H’s review of GWR’s Rate Period 10 (RP10) rate request to the City, and subsequent negotiations with GWR, resulted in the following outcomes:
• HF&H has determined a 3.59% increase as appropriate as a result of the following components:
 4.50% inflationary increase in labor-related costs
 4.20% inflationary increase in vehicle-related costs (excl. fuel)  Fuel rate held flat as set by the District
 4.20% inflationary increase in other costs
 Depreciation held flat per the Agreement
 1.36% net processing costs increase due to an increase in tonnage  2.18% increase in disposal costs due to an increase in per ton disposal rate, offset by a slight decrease in tonnage
Refer to Figure 1 below for the impact to sample residential rates.

Attachment 2
Managing Tomorrow’s Resources Today
Mary Bilse
May 2, 2024

Page 2 of 6 ends

Figure 1 – Example Rate Impact of Adjustment

BACKGROUND
In 2012, the City, participating with other members of the District, issued a competitive request for proposals for collection services and entered into the new Agreement with GWR effective July 1, 2015.

The Agreement provides for the following, related to the adjustment of rates:
• Rates are to be adjusted annually throughout the term of the Agreement, using various inflationary indices, actual tonnage, and changes in the tipping fees at the District, unless either the City or GWR request a Cost Based Rate Adjustment (CBRA).
• The City and GWR may mutually agree upon alternative approaches to structuring rates without amendment to the Agreement (Section 8.2.D).
• During the CBRA review in Rate Period 5 (RP5), a number of issues surrounding the process for setting rates and the resulting rate relationships amongst sectors and materials was identified. As such, the City and GWR have negotiated an amendment to the prescribed methodology for the CBRA and index adjustments so as to not alter rate relationships between service sectors and material types. • Through negotiations of the amendment, and as a result of the desire to maintain current rate relationships between sectors and service levels, the City and GWR have prescribed a uniform rate adjustment to be applied to all sectors.

RATE CALCULATION REVIEW
HF&H Scope of Work
HF&H performed this review of the rate request in accordance with Exhibit E1 (for the index-based rate adjustment). These procedures included:

1. Review of the rate request for completeness and compliance with the procedures contained in Exhibit E1 of the Agreement.

Attachment 2
Managing Tomorrow’s Resources Today
Mary Bilse
May 2, 2024

Page 3 of 6 ends

2. Review for mathematical accuracy and logical consistency to determine that the rate request is mathematically correct, that the rows and columns of numbers add down and across as intended, and that the stated assumptions were, in fact, used. Also, to determine that the rate request is internally consistent and that any summary schedules agree to the supporting schedules and worksheets.

3. Verification of the inclusion of the franchise fee calculation in the adjustment.

4. Verification of contract compliance, including`:

A. The indices used in the adjustment.

B. The tip fees reported for the disposal/processing components of the rates.

C. The use of quarterly-reported tonnage data and allocations among agencies. A detailed audit of tonnage and allocations of tonnage reported by GWR was not a part of this scope of work.

HF&H discussed GWR’s allocation methodology with them and the methodology appears reasonable and consistent with standard practices within the industry.

D. Any changes in governmental fees on the fee component of the rates; and, the accurate application of the resultant percentage changes in the various rate components to the rate schedule approved by the City through the Agreement.

E. The addition of anticipated costs related to identified program changes resulting from SB 1383.

Review of Rate Request
Rate Period 10 Application
HF&H reviewed the rate application for RP10. The results of the calculation of RP10 per methodology of Exhibit E1 of the amendment can be seen in Figure 2 on the following page.

Attachment 2
Managing Tomorrow’s Resources Today
Mary Bilse
May 2, 2024

Page 4 of 6 ends

Figure 2 – City of Carmel Application of Index-Based Adjustments to RP10 Attachment 2
Managing Tomorrow’s Resources Today
Mary Bilse
May 2, 2024

Page 5 of 6 ends

Review of GWR Costs
There are four major components to GWR’s rate application: 1) calculation and application of the inflationary indexes as prescribed in the Agreement; 2) the disposal and/or processing component; 3) the Agency Fees; and, 4) other one-time adjustments.

There are three indexes used in the index adjustment; CPI, fuel index, and labor index. The annual percent change in each of the indices is used to calculate the coming year’s projected cost for the line items to which these indexes are applied.

HF&H has reviewed and GWR has confirmed the accuracy of each of these indexes, and notes that the fuel index remains unchanged, as reported by management staff at the District.

Review of Disposal/Processing Component
Calendar Year 2023 collected tons were used for the RP10 review in accordance with the amendment.

The disposal and processing components also consider the tipping fees charged by the District in order to project anticipated disposal and processing costs at the District. The following table describes the changes in the City’s disposal and processing costs for each material type based on the tip fees at the District, which have been incorporated into our RP10 review.

Figure 3 - Impact of District Tip Fee Changes
Review of Fee Component
HF&H ensured that the fee component of each rate matches the contractual percentage of 13% for franchise fees, remitted to the City by GWR.

Additionally, rate application review costs and other identified District costs totaling $11,225 were added as a one-time adjustment to cover the rate review, franchise management, and other identified District costs such as staff time, public education and outreach, and some other identified costs related to SB 1383.

Attachment 2
Managing Tomorrow’s Resources Today
Mary Bilse
May 2, 2024

Page 6 of 6 ends

New Rates
Attached hereto is a table of all new rates recommended for RP10 based on the adjustments described in this memo (Attachment B). HF&H recommends adopting these rates by resolution to be effective July 1, 2024.
* * * * *
We would like to express our appreciation to GWR staff for their assistance and cooperation in this process. Should you have any questions, please call me at (925) 977-6959 or rchilton@hfhconsultants.com.

Sincerely,

HF&H CONSULTANTS, LLC
Rob Hilton Dave Hilton
President Senior Project Manager
Attachment 2
1 MEMORANDUM OF UNDERSTANDING

BETWEEN THE MONTEREY REGIONAL WASTE MANAGEMENT DISTRICT AND ITS

MEMBER AGENCIES REGARDING ASSISTANCE WITH COMPLIANCE WITH CALIFORNIA SENATE BILL 1383
This Memorandum of Understanding (“MOU”) is made and entered into as of the date of the signatures set forth below by and between the MONTEREY REGIONAL WASTE MANAGEMENT DISTRICT (“District”, “MRWMD”), a California Garbage and Refuse Disposal District, and its member agencies including the cities of CARMEL-BY-THE-SEA, DEL REY OAKS, MARINA, MONTEREY, PACIFIC GROVE, SAND CITY, and SEASIDE; THE PEBBLE BEACH COMMUNITY SERVICES DISTRICT; and THE COUNTY OF MONTEREY (“Member Agencies”). Collectively these entities shall be known herein as “Parties” or individually as a “Party.”
Recitals
A. The State of California has passed legislation, known as Senate Bill 1383, California’s Short-Lived Climate Pollutants regulation. The regulation will have significant impact on each Member Agency, with the goal of reducing organic material being landfilled by 75% by 2025, compared to a 2014 basis. The legislation mandates that Member Agencies undertake certain activities around the handling of organic waste materials collected within their jurisdictions. The regulation also requires 20% recovery of edible food by 2025 to direct it to a beneficial use and thus prevent it from entering the waste stream. Regulations take effect, and local program implementation will begin, on January 1, 2022.

B. The Member Agencies have determined that it is in their best interest to coordinate their activities related to this legislation. This coordination is being facilitated by the District’s Technical Advisory Committee (TAC) comprised of staff from each Member Agency, the three Haulers in the District service area (Haulers), Salinas Valley Recycles (SVR) and MRWMD.

C. The Member Agencies have further determined that the District has the expertise and resources necessary to implement some of these activities on the Member Agencies’ behalf and have now requested that the District incur costs to provide these activities.

D. The Member Agencies have agreed to reimburse the District for proportionate shares of certain designated annual costs incurred by the District for these activities.

E. The form and content of this MOU have been presented to the TAC, and the TAC has recommended it for approval by the Parties
NOW THEREFORE, in consideration of the mutual benefits to be derived by the District and the Member Agencies, and of the promises contained in this MOU, the Parties agree as Attachment 3
2 follows:

Section 1. Recitals: The recitals set forth above are incorporated into this MOU.

Section 2. Purpose: The purpose of this MOU is to provide a structure for the Member Agencies to reimburse the District for SB 1383 related activities it performs on behalf of the Member Agencies.

Section 3. Voluntary: This MOU is voluntarily entered into by the Parties for the purpose of facilitating the implementation of SB 1383.

Section 4. Term: This MOU shall become effective on the last day of its execution by a Party and shall remain in effect until terminated by the Parties.

Section 5. Scope of Work, Costs & Cost Sharing: The scope of work, and associated costs, are set out in Exhibit A, entitled Detailed Activities and Costs, attached hereto and incorporated herein. Allocation of such costs to the Member Agencies is set out in Exhibit B, entitled Member Agencies’ Annual Proportionate Shares and Costs, attached hereto and incorporated herein. Exhibit C outlines estimated individual Member Agencies’ allocations related to the Department of Resources Recycling and Recovery (CalRecycle) SB 1383 Local Assistance Grant Program (OWR1: 2021-22), attached hereto and incorporated herein. Exhibit D defines the estimated annual procurement requirements of organic material and estimated cost per ton of compost for each Member Agency, attached hereto and incorporated herein.

No later than March 1 of each year, and at such other times as directed by the Parties, the TAC shall meet to consider and, if deemed necessary, modify Exhibits A, B, C, and/or D subject to direction from the governing bodies of each Member Agency to its TAC representative.

Section 6. The District Agrees:
(a) District staff will manage activities as identified in Exhibit A, C, and D which activities include contracting with third party vendors when reasonably necessary and paying those vendors for contracted costs.
(b) Two times per year, on dates to be determined by the TAC, District will invoice Member Agencies for each Member Agency’s proportionate share of costs as shown in Exhibit B with each invoice to be fifty percent (50%) of the Member Agency’s share of costs. (c) Upon award of CalRecycle SB 1383 Local Assistance Grant Program funds, the District will invoice Member Agencies for their full allocation of grant funds as shown in Exhibit C. Four times during the grant term, aligned with dates identified by CalRecycle grant Terms & Conditions, the District shall report to Member Agencies a summary of actual grant expenditures and progress toward grant tasks to date.

Attachment 3
3 (d) District will maintain an accounting of activities and expenses and provide reconciliation of payments annually. Material differences between estimated costs and actual incurred costs will result in either: 1) an adjustment made to the final annual payment for each Member Agency, or 2) such cost difference shall be incorporated into the subsequent year cost allocation.
(e) In year one only, in recognition of expected continuation of improved recycling revenues for the District from recyclable material sales, the District will off-set $140,000 of the costs identified in Exhibit A. This off-set is reflected in the cost allocations set out in Exhibit B for FY 2021-22.

Section 7. The Member Agencies Agree:
(a) To reimburse the District for all expenses incurred by the District under this MOU in accordance with each Member Agency’s proportionate share as shown on Exhibit B, C, and D. (b) To make a full-faith effort to cooperate with one another and with the District to achieve the purposes of this MOU by providing information, reviewing information in a timely manner, and informing their respective administration and governing bodies.

Section 8. Termination. Any Party may terminate its participation in this MOU upon giving written notice to the District no later than April 1 of any calendar year during the term of this MOU. Within ten days following a Party’s termination date, such party shall pay District all charges then due and payable and shall pay when determined any additional charges that shall later come due under the MOU, subject to the limits set out in Exhibits A, B, C, and D.

Section 9. General Provisions.
(a) This MOU is binding and for the benefit of the respective successors, heirs, and assigns of each Party and the District; provided however, no Party may assign its respective rights or obligations under this MOU without the prior written consent of the District. (b) This MOU is governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California.
(c) If any provision of this MOU is determined by any court to be invalid, illegal, or unenforceable to any extent, then the remainder of this MOU will not be affected, and this MOU will be construed as if the invalid, illegal, or unenforceable provision had never been contained in this MOU.
(d) Waiver by the District or any Party to this MOU of any term, condition, or covenant of this MOU will not constitute a waiver of any other term, condition, or covenant.

Attachment 3
4 Waiver by the District or any Party of any breach of the provisions of this MOU will not constitute a waiver of any other provision, nor a waiver of any subsequent breach or violation of any provision of this MOU.
(e) This MOU may be executed in any number of counterparts, each of which is an original but all of which taken together will constitute one and the same instrument, provided, however, that such counterparts have been delivered to all parties to this MOU. (f) All parties acknowledge they have been represented, or have had the opportunity to be represented, by counsel in the preparation and negotiation of this MOU. Accordingly, this MOU will be construed according to its fair language. Any ambiguities will be resolved in a collaborative manner by the District and the Parties and must be rectified by amending this MOU.

IN WITNESS WHEREOF, the District and the Parties have caused this MOU to be executed by their duly authorized representatives as of the date of their respective signatures.

MONTEREY REGIONAL WASTE MANAGEMENT DISTRICT
By: ________________________ DATE: _______________
APPROVED AS TO FORM:
_______________________
Attachment 3
5 CITY OF CARMEL-BY-THE-SEA
By: ________________________ DATE: _______________
APPROVED AS TO FORM:
_______________________
Attachment 3
14 EXHIBIT A

DETAILED ACTIVITIES & COSTS
FY 2024-2025
Scope of Work
The activities related to the implementation of SB 1383 may include contracting and policy development; public education; materials purchasing and distribution; reporting; contamination monitoring; edible food waste recovery; enforcement; procurement; organics processing; rate setting; cost monitoring; and any other related activities the Parties choose to address.

The District will take the lead producing public education campaigns in concert with the alreadyprovided Hauler and/or Member Agency resources. The Member Agencies will be responsible for production and mailing fees associated with outreach. The District will also contract with a vendor to administer contamination monitoring in the form of curbside lid flipping. The District will also provide CalRecycle reporting services to the Member Agencies. In addition, funds will be allocated to food recovery organizations for procurement of refrigerated holding facilities or transport vehicles to support edible food recovery efforts.

Costs
Attachment 3
15 EXHIBIT A

DETAILED ACTIVITIES & COSTS
FY 2024-2025 (CONTINUED)
Attachment 3
16 EXHIBIT B
MEMBER AGENCIES’ ANNUAL PROPORTIONATE SHARES & COSTS*
FY 2024-2025
*Member Agencies’ proportionate costs subject to adjustment annually in accordance with any change in scope and total costs. Costs “with minimums” will be utilized.

Attachment 3
17 EXHIBIT C
MEMBER AGENCIES’ ESTIMATED ALLOCATION OF CALRECYCLE LOCAL ASSISTANCE GRANT PROGRAM FUNDING (OWR1: 2021-22)**
The Member Agencies of Carmel, Del Rey Oaks, Marina, Monterey, Sand City, Seaside, Pacific Grove, and the Pebble Beach Community Services District (PBCSD) join the Local Assistance Grant Program as a regional collaborative project for the implementation of regulation requirements associated with SB 1383, in coordination with other jurisdictions of the Monterey County region to maximize project impact and cost-effectiveness across the countywide area.

This regional grant-funded project will be coordinated through the two local waste management governmental agencies within Monterey County, Monterey Regional Waste Management (MRWMD), and Salinas Valley Solid Waste Authority (SVSWA).

The Member Agencies, along with each of the MRWMD and SVSWA member agencies are applying individually to this grant program using a unified regional project design, budget and implementation approach. All participating jurisdictions’ individual grant funding will be pooled together and expended in a cooperative manner by their agencies’ respective waste districts, MRWMD and SVSWA. The County of Monterey is applying separately and will manage its budget and project implementation independently, in coordination with broader regional planning efforts.

Based on current regional needs and findings to date related to SB 1383 in Monterey County, the following four major components will comprise the principal focus areas of program expenditures under the proposed regional project approach:
1) Grant Management, Tracking & Reporting
2) Agency Procurement Support
3) Edible Food Recovery Implementation and Capacity Building 4) Organics & Edible Food Recovery Education, Outreach and Technical Assistance Each element will be informed by regional coordination through the established MRWMD and SVSWA Technical Advisory Committee forums, Capacity Planning Assessments and related studies completed or in process throughout the region, and new data and information obtained through program implementation trials, stakeholder feedback and best practices as identified.

All expenditures will be incurred jointly, facilitated through each respective waste agency, and tracked and reported by each jurisdiction, based on the percentage of grant funds received by each agency compared to the full funding received collectively by all participating member agencies. CalRecycle, based on per capita calculations, using the Department of Finance’s January 2021 population statistics, estimates jurisdictions’ proportionate grant allocations. A summary of individual and collective agency grant allocations is presented below as Table 1.

Attachment 3
18 Table 1. Thirteen Agency Collaborative Approach Budget Summary ** Working in coordination with the designated CalRecycle grant manager or other agency representatives as appropriate, the region may adjust these proposed expenditure areas, amounts, or priorities, consistent with grant expenditure eligibility requirements, as needed during the course of the grant term based on the needs of the region.

Agencies Estimated
Funding
% of District
Subtotal
% of Region
Total
Waste
District
Carmel-by-the-Sea $20,000 9% 4% MRWMD
Del Rey Oaks $20,000 9% 4% MRWMD
Marina $29,771 14% 6% MRWMD
Monterey $38,247 18% 7% MRWMD
Pacific Grove $21,398 10% 4% MRWMD
Sand City $20,000 9% 4% MRWMD
Seaside $43,151 20% 8% MRWMD
Pebble Beach Community
Services District
$20,000 9% 4% MRWMD
Subtotal (MRWMD): $212,566 100% 41%
Gonzales $20,000 6% 4% SVSWA
Greenfield $25,157 8% 5% SVSWA
King City $20,665 7% 4% SVSWA
Salinas $211,143 68% 40% SVSWA
Soledad $33,095 11% 6% SVSWA
Subtotal (SVSWA): $310,060 100% 59%
TOTAL (13 Agency Regional
Approach): $522,626 100%
Attachment 3
19 EXHIBIT D
MEMBER AGENCIES’ ESTIMATED PROCURMENT REQUIRMENTS

OF ORGANIC MATERIAL
The list below indicates the annual recovered organic waste product procurement targets for each jurisdiction (city, county, or city and county) that will be in effect from January 1, 2022, through December 31, 2026 per CalRecycle.

Attachment 3

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
June 4, 2024

PUBLIC HEARINGS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Jane Hogan, Accountant
APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Resolution 2024-046 Adopting the Fiscal Year 2024-2025 Appropriations Limit RECOMMENDATION:

Adopt Resolution 2024-046 approving the FY24-25 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. This is based on a 1979 law passed by California voters which approved a Proposition put forward by the late political activist Paul Gann, which became known as the "Gann Limit". 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 3.62% and the population growth for the City of Carmel by the Sea of .55%. 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 1.0362 for income and 1.0055 for population growth.

These adjustment factors are applied to the current fiscal year (Fiscal Year 2023-2024) Gann limit in order to determine the appropriation limit for the upcoming fiscal year (Fiscal Year 2024-2025). Using this formula, the City’s appropriation limit for Fiscal Year 2024-2025 is $42,449,301. The appropriations in the City budget which are subject to the Gann limit total only $27,108,447; thus, the City is well within its Gann limit.

FISCAL IMPACT:

The appropriation limit for fiscal year 2024-2025 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 $27,108,447.

PRIOR CITY COUNCIL ACTION:

Council adopted the Fiscal Year 2023-2024 Appropriations Limit on June 6, 2023.

ATTACHMENTS:

Attachment 1) Resolution 2024-046
Attachment 2) DOF Price and Population 2024

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2024-046

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA ADOPTING THE FISCAL YEAR 2024-2025 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 2024-2025 Limit were the California per capita personal income adjustment factor of 1.0362 and the Carmel by the Sea population growth factor of 1.0055; 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 24, 2024; 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 4, 2024; 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 2024-2025 as $42,449,301, which is attached hereto as Exhibit A.

2. Certifies the Fiscal Year 2024-2025 Adopted Appropriations Subject-To-Limit of $27,108,447 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 4th day of June 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:
________________________ _________________________
Dave Potter Nova Romero
Mayor City Clerk
Attachment 1
Resolution No. 202
4-046

Page 2 ends

Attachment 1
Resolution No. 202
4-046

Page 3 ends

Attachment 1

April 30, 2024
Dear Fiscal Officer:

Price Factor and Population Information
Appropriations Limit
California Revenue and Taxation Code section 2227 requires the Department of Finance to transmit an estimate of the percentage change in population to local governments.

Each local jurisdiction must use their percentage change in population factor for January 1, 2024, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2024-25. Attachment A provides the change in California’s per capita personal income and an example for utilizing the factors to calculate the 2024-25 appropriations limit. Attachment B provides the city and unincorporated county population percentage change. Attachment C provides the population percentage change for counties and their summed incorporated areas. The population percentage change data excludes federal and state institutionalized populations and military populations.

Population Percent Change for Special Districts
Some special districts must establish an annual appropriations limit. California Revenue and Taxation Code section 2228 provides additional information regarding the appropriations limit. Article XIII B, section 9(C) of the California Constitution exempts certain special districts from the appropriations limit calculation mandate. Special districts required by law to calculate their appropriations limit must present the calculation as part of their annual audit. Any questions special districts have on this requirement should be directed to their county, district legal counsel, or the law itself. No state agency reviews the local appropriations limits.

Population Certification
The population certification program applies only to cities and counties. California Revenue and Taxation Code section 11005.6 mandates Finance to automatically certify any population estimate that exceeds the current certified population with the State Controller’s Office. Finance will certify the higher estimate to the State Controller by June 1, 2024. Please note: The prior year’s city population estimates may be revised. The per capita personal income change is based on historical data.

If you have any questions regarding this data, please contact the Demographic Research Unit at (916) 323-4086.
/s Erika Li
Attachment
Attachment 2

April 2024
Attachment A
A. Price Factor: Article XIII B specifies that local jurisdictions select their cost of living factor to compute their appropriation limit by a vote of their governing body. The cost of living factor provided here is per capita personal income. If the percentage change in per capita personal income is selected, the percentage change to be used in setting the fiscal year 2024-25 appropriation limit is:

Per Capita Personal Income
Fiscal Year Percentage change
(FY) over prior year
2024-25 3.62
B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2024-25 appropriation limit.
2024-25:

Per Capita Cost of Living Change = 3.62 percent
Population Change = 0.17 percent
Per Capita Cost of Living converted to a ratio: 3.62 + 100 = 1.0362 100
Population converted to a ratio: 0.17 + 100 = 1.0017
100
Calculation of factor for FY 2024-25: 1.0362 x 1.0017 = 1.0379 Attachment 2

Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 Total
County Population Percent Change --- Population Minus Exclusions --- City 23-24 1-1-23 1-1-24 1-1-24
Alameda
Alameda 1.21 76,309 77,234 78,071
Albany -0.14 20,354 20,325 20,325
Berkeley 0.12 125,181 125,327 125,327
Dublin -0.03 71,600 71,575 72,917
Emeryville 4.95 12,686 13,314 13,314
Fremont -0.63 230,713 229,250 229,250
Hayward -0.58 160,699 159,770 159,770
Livermore -0.48 85,235 84,828 84,828
Newark -2.36 47,762 46,635 46,635
Oakland -0.52 427,085 424,873 425,093
Piedmont -0.88 10,878 10,782 10,782
Pleasanton -1.17 76,861 75,960 75,960
San Leandro -1.01 87,984 87,098 87,098
Union City -1.26 67,279 66,432 66,432
Unincorporated -1.18 147,743 146,006 146,067
County Total -0.54 1,648,369 1,639,409 1,641,869
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

1.42 -0.13
-0.77

2.85 0.71

3.74 1.81

1.04 0.55

0.67 -0.10

1.09 0.27
-0.11
-0.10

0.06 124,361
13,291
8,480
7,163
542,600
6,119
16,950
12,908
12,462
9,453
14,382
25,376
26,286
3,620
24,395
157,158
126,133
13,274
8,415
7,367
546,467
6,348
17,256
13,042
12,531
9,516
14,368
25,653
26,357
3,616
24,371
157,254
126,133
17,107
8,415
7,367
546,971
6,348
17,256
13,042
12,531
9,516
14,368
25,653
26,357
3,616
24,371
158,380
County Total 0.69 1,005,004 1,011,968 1,017,431
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 County
City
Percent Change
23-24
--- Population Minus Exclusions ---
1-1-23 1-1-24
Total
Population
1-1-24
Humboldt
Arcata
Blue Lake
Eureka
Ferndale
Fortuna
Rio Dell
Trinidad
Unincorporated
-1.54
-1.29
-0.80
-1.45
-1.11
-1.49
-1.34
-1.07
18,830
1,164
26,116
1,376
12,318
3,290
298
70,959
18,540
1,149
25,906
1,356
12,181
3,241
294
70,199
18,540
1,149
26,073
1,356
12,181
3,241
294
70,266
County Total -1.11 134,351 132,866 133,100
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

2.58 1.70

4.60 1.37

1.27 2.59

2.86 1.65
27,633
38,606
6,063
44,305
5,513
21,583
1,993
30,586
28,345
39,262
6,342
44,911
5,583
22,141
2,050
31,091
28,345
39,262
6,342
44,952
5,583
22,141
2,050
34,206
County Total 1.95 176,282 179,725 182,881
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.98 0.80

0.60 0.96

0.00 1.45

0.75 4.31

0.13 0.48

1.35 0.39
19,460
407,835
13,001
45,119
1,004
13,765
27,098
21,266
6,944
9,297
22,945
300,172
19,651
411,109
13,079
45,554
1,004
13,965
27,300
22,183
6,953
9,342
23,254
301,340
19,651
411,109
13,079
52,484
1,004
13,965
27,940
22,226
6,953
11,092
27,028
303,769
County Total 0.77 887,906 894,734 910,300
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 Total
County Percent Change --- Population Minus Exclusions --- Population City 23-24 1-1-23 1-1-24 1-1-24
Los Angeles
Agoura Hills -0.44 19,928 19,841 19,841
Alhambra 0.05 81,753 81,790 81,811
Arcadia -0.13 55,855 55,783 55,783
Artesia -0.21 16,053 16,019 16,019
Avalon -0.57 3,332 3,313 3,313
Azusa -0.35 49,595 49,420 49,420
Baldwin Park -0.06 70,700 70,660 70,660
Bell -0.34 33,414 33,301 33,301
Bellflower -0.03 77,014 76,990 76,990
Bell Gardens -0.49 38,569 38,381 38,381
Beverly Hills -0.45 31,950 31,806 31,806
Bradbury -0.77 905 898 898
Burbank 0.11 105,484 105,603 105,603
Calabasas -0.50 22,857 22,742 22,742
Carson -0.52 92,399 91,920 91,924
Cerritos -0.53 48,063 47,806 47,806
Claremont 0.03 37,673 37,686 37,686
Commerce 0.57 12,055 12,124 12,124
Compton -0.37 94,016 93,671 93,671
Covina 0.19 50,390 50,485 50,485
Cudahy -0.52 22,327 22,210 22,210
Culver City 0.89 39,859 40,213 40,213
Diamond Bar -0.43 53,566 53,335 53,335
Downey -0.15 111,656 111,493 111,493
Duarte 3.04 22,958 23,656 23,656
El Monte 0.08 106,649 106,738 106,786
El Segundo -0.08 16,953 16,939 16,964
Gardena 0.22 59,896 60,028 60,028
Glendale -0.25 192,072 191,586 191,586
Glendora -0.32 51,374 51,209 51,209
Hawaiian Gardens -0.29 13,600 13,560 13,560
Hawthorne -0.37 85,886 85,566 85,566
Hermosa Beach -0.42 19,169 19,088 19,088
Hidden Hills 0.17 1,724 1,727 1,727
Huntington Park -0.31 53,374 53,209 53,219
Industry -0.23 427 426 426
Inglewood -0.53 106,628 106,065 106,065
Irwindale 0.74 1,488 1,499 1,499
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 Total
County Percent Change --- Population Minus Exclusions --- Population City 23-24 1-1-23 1-1-24 1-1-24
La Canada Flintridge -0.20 20,089 20,048 20,048
La Habra Heights -0.45 5,513 5,488 5,488
Lakewood -0.25 80,365 80,162 80,162
La Mirada -0.40 48,271 48,077 48,077
Lancaster -0.10 169,939 169,776 172,631
La Puente -0.19 37,530 37,459 37,459
La Verne 0.06 31,678 31,697 31,697
Lawndale -0.55 31,026 30,855 30,855
Lomita -0.38 20,397 20,320 20,320
Long Beach -0.18 459,315 458,498 458,813
Los Angeles 0.27 3,800,438 3,810,548 3,814,318
Lynwood -0.23 66,424 66,271 66,271
Malibu -0.18 10,640 10,621 10,621
Manhattan Beach -0.50 34,367 34,195 34,195
Maywood -0.49 24,572 24,451 24,451
Monrovia 1.39 37,563 38,087 38,087
Montebello 0.32 61,730 61,930 61,930
Monterey Park -0.42 59,592 59,340 59,347
Norwalk -0.39 100,732 100,341 101,172
Palmdale -0.02 166,089 166,055 166,055
Palos Verdes Estates -0.44 13,031 12,974 12,974
Paramount -0.34 52,331 52,153 52,153
Pasadena 1.09 138,187 139,692 139,692
Pico Rivera -0.32 61,014 60,820 60,820
Pomona 0.68 151,132 152,166 152,166
Rancho Palos Verdes -0.50 41,106 40,902 40,919
Redondo Beach -0.27 68,424 68,239 68,239
Rolling Hills -0.53 1,686 1,677 1,677
Rolling Hills Estates 0.46 8,495 8,534 8,534
Rosemead 0.08 50,503 50,541 50,541
San Dimas -0.31 34,027 33,920 33,920
San Fernando 0.04 23,633 23,643 23,643
San Gabriel -0.09 38,648 38,613 38,613
San Marino 0.23 12,350 12,379 12,379
Santa Clarita -0.27 231,045 230,428 230,428
Santa Fe Springs -0.34 18,574 18,511 18,640
Santa Monica 0.34 92,598 92,912 92,912
Sierra Madre -0.15 10,925 10,909 10,909
Signal Hill -0.35 11,488 11,448 11,448
South El Monte -0.21 19,482 19,441 19,441
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.03 -0.37
-0.18
-0.36
-0.49
92,701
26,367
36,040
143,433
206
92,729
26,270
35,975
142,910
205
92,729
26,270
35,975
142,910
205
Walnut
West Covina
West Hollywood
Westlake Village
Whittier
Unincorporated
-0.10

0.65 -0.44
-0.45

0.22 -0.19
27,896
108,404
35,229
7,938
87,333
998,818
27,867
109,105
35,075
7,902
87,527
996,956
27,867
109,105
35,075
7,902
87,527
997,587
County Total 0.05 9,810,925 9,815,428 9,824,091
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.13 -0.44
-1.08
-0.26
-0.14
-0.45
-0.55
-0.36
-0.45
2,046
9,916
7,399
12,638
13,695
51,415
2,278
12,443
59,855
6,894
8,841
62,940
2,043
9,872
7,371
12,655
13,635
50,861
2,272
12,426
59,585
6,856
8,809
62,656
2,043
9,882
7,371
12,655
13,635
51,140
2,272
12,426
59,585
6,856
8,809
66,170
County Total -0.53 250,360 249,041 252,844
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 Total
County Population Percent Change --- Population Minus Exclusions --- City 23-24 1-1-23 1-1-24 1-1-24
Merced
Atwater 0.02 31,390 31,397 31,397
Dos Palos -0.02 5,634 5,633 5,633
Gustine -0.07 5,940 5,936 5,936
Livingston 0.09 14,273 14,286 14,286
Los Banos 0.25 47,300 47,419 47,419
Merced 1.91 90,120 91,837 91,837
Unincorporated 0.23 89,424 89,630 90,795
County Total 0.72 284,081 286,138 287,303
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.55 0.64

0.98 2.01

1.78 1.91

0.56 0.63

0.73 0.26

0.04 2.94

0.75 3,105
1,559
8,384
20,155
13,968
22,269
24,096
14,872
160,870
378
28,075
19,565
104,372
3,122
1,569
8,466
20,561
14,216
22,695
24,232
14,966
162,037
379
28,085
20,140
105,157
3,122
1,569
8,466
20,561
14,216
22,695
27,106
14,966
162,037
379
30,197
26,966
105,334
County Total 0.94 421,668 425,625 437,614
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 Total
County Percent Change --- Population Minus Exclusions --- Population City 23-24 1-1-23 1-1-24 1-1-24
Orange
Aliso Viejo -0.43 50,284 50,068 50,068
Anaheim 0.29 339,105 340,090 340,160
Brea -0.34 47,886 47,725 47,725
Buena Park 0.07 82,632 82,689 82,689
Costa Mesa -0.31 109,765 109,423 109,423
Cypress 0.11 49,291 49,345 49,345
Dana Point -0.38 32,721 32,596 32,596
Fountain Valley 0.18 56,233 56,333 56,333
Fullerton -0.32 140,756 140,311 140,311
Garden Grove 1.17 169,024 171,002 171,024
Huntington Beach -0.30 193,078 192,503 192,503
Irvine 0.97 311,537 314,550 314,550
Laguna Beach 0.07 22,433 22,449 22,449
Laguna Hills -0.42 30,442 30,315 30,315
Laguna Niguel 0.67 63,865 64,291 64,291
Laguna Woods -0.43 17,222 17,148 17,148
La Habra -0.21 61,028 60,901 60,901
Lake Forest 0.70 86,311 86,917 86,917
La Palma -0.40 15,131 15,071 15,071
Los Alamitos -0.19 11,970 11,947 11,947
Mission Viejo 0.09 91,221 91,304 91,304
Newport Beach -0.35 82,707 82,419 82,419
Orange -0.16 138,842 138,621 138,621
Placentia 0.08 52,182 52,226 52,226
Rancho Santa Margarita -0.43 46,507 46,305 46,305
San Clemente -0.29 62,481 62,297 62,297
San Juan Capistrano 1.05 34,627 34,992 34,992
Santa Ana 0.89 308,041 310,797 310,797
Seal Beach -0.37 24,200 24,110 24,350
Stanton 3.55 38,914 40,297 40,297
Tustin 0.42 78,515 78,844 78,844
Villa Park -0.19 5,716 5,705 5,705
Westminster 0.10 89,400 89,490 89,490
Yorba Linda -0.27 66,268 66,087 66,087
Unincorporated 0.72 130,381 131,325 131,335
County Total 0.31 3,140,716 3,150,493 3,150,835
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 Total
County Population Percent Change --- Population Minus Exclusions --- City 23-24 1-1-23 1-1-24 1-1-24
Placer
Auburn -0.94 13,344 13,218 13,218
Colfax -1.09 2,010 1,988 1,988
Lincoln 1.79 52,296 53,231 53,231
Loomis 0.06 6,597 6,601 6,601
Rocklin 0.26 71,420 71,609 71,609
Roseville 1.05 152,726 154,329 154,329
Unincorporated 0.16 111,692 111,868 111,868
County Total 0.67 410,085 412,844 412,844
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 Total
County Percent Change --- Population Minus Exclusions --- Population City 23-24 1-1-23 1-1-24 1-1-24
Riverside
Banning 0.54 31,046 31,213 31,213
Beaumont 2.03 56,275 57,416 57,416
Blythe -0.33 12,566 12,524 17,378
Calimesa -0.39 10,909 10,867 10,867
Canyon Lake -0.13 10,846 10,832 10,832
Cathedral City -0.27 51,012 50,873 50,911
Coachella 2.36 42,179 43,173 43,173
Corona 0.22 156,268 156,615 156,615
Desert Hot Springs 0.85 32,380 32,654 32,654
Eastvale -0.35 69,123 68,884 68,884
Hemet 0.37 89,333 89,663 89,663
Indian Wells 1.35 4,733 4,797 4,797
Indio 0.78 89,978 90,680 90,680
Jurupa Valley 0.12 104,541 104,663 104,721
Lake Elsinore 0.14 71,351 71,452 71,452
La Quinta 1.44 37,824 38,370 38,370
Menifee 1.97 109,401 111,560 111,560
Moreno Valley 0.12 206,903 207,146 207,146
Murrieta -0.17 109,364 109,177 109,177
Norco -0.15 22,084 22,050 25,068
Palm Desert 1.22 50,274 50,889 50,889
Palm Springs -0.03 43,802 43,791 43,791
Perris 1.13 78,424 79,311 79,311
Rancho Mirage 0.74 16,868 16,992 16,992
Riverside 0.30 315,747 316,690 316,690
San Jacinto -0.39 53,746 53,538 53,538
Temecula 0.49 108,173 108,700 108,700
Wildomar 0.65 36,093 36,327 36,327
Unincorporated 0.95 399,653 403,438 403,563
County Total 0.55 2,420,896 2,434,285 2,442,378
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 Total
County Population Percent Change --- Population Minus Exclusions --- City 23-24 1-1-23 1-1-24 1-1-24
Sacramento
Citrus Heights -0.58 86,056 85,554 85,554
Elk Grove 0.69 177,446 178,679 178,679
Folsom 2.41 81,478 83,443 88,023
Galt 0.69 25,608 25,785 25,785
Isleton -0.65 772 767 767
Rancho Cordova 0.62 81,604 82,109 82,109
Sacramento 0.18 519,466 520,407 520,407
Unincorporated -0.40 599,989 597,614 597,614
County Total 0.12 1,572,419 1,574,358 1,578,938
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 Total
County Percent Change --- Population Minus Exclusions --- Population City 23-24 1-1-23 1-1-24 1-1-24
San Bernardino
Adelanto -0.80 36,422 36,131 36,131
Apple Valley -0.24 74,500 74,322 74,322
Barstow -0.34 24,124 24,043 24,669
Big Bear Lake 0.20 4,948 4,958 4,958
Chino 0.57 88,580 89,088 92,585
Chino Hills -0.17 76,547 76,414 76,414
Colton -0.12 52,841 52,778 52,778
Fontana 0.68 212,772 214,223 214,223
Grand Terrace -0.17 12,793 12,771 12,771
Hesperia 0.75 99,338 100,087 100,087
Highland 0.12 55,612 55,676 55,676
Loma Linda -0.02 24,923 24,919 24,965
Montclair -0.09 37,246 37,211 37,211
Needles -0.23 4,780 4,769 4,769
Ontario 0.93 179,555 181,224 181,224
Rancho Cucamonga 0.56 172,344 173,316 173,316
Redlands 1.28 71,776 72,696 72,696
Rialto 0.71 102,367 103,097 103,097
San Bernardino 0.39 224,316 225,188 226,541
Twentynine Palms -1.12 15,397 15,224 25,346
Upland 0.56 77,849 78,285 78,285
Victorville 0.96 132,537 133,805 138,202
Yucaipa 0.33 53,635 53,810 53,810
Yucca Valley 0.40 21,509 21,594 21,594
Unincorporated 0.02 286,864 286,926 295,763
County Total 0.42 2,143,575 2,152,555 2,181,433
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.07 5.39

0.50 2.67

0.10 0.48

1.33 0.29
7,244
35,138
66,164
88,552
15,726
315,655
95,341
157,407
7,249
37,033
66,492
90,917
15,741
317,174
96,609
157,866
7,249
37,033
66,492
90,917
15,741
317,204
96,609
160,163
County Total 1.01 781,227 789,081 791,408
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.37 -0.49
-0.52
-0.29

0.90 -0.42
18,039
29,278
30,792
12,542
10,315
7,869
48,249
118,457
17,941
29,233
30,907
12,481
10,261
7,846
48,684
117,954
17,941
30,279
30,907
12,481
10,261
7,846
48,684
120,070
County Total -0.08 275,541 275,307 278,469
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.04 0.08

0.04 1.10
-0.06

0.35 0.84

0.05 -0.07
4,968
12,734
32,503
8,582
40,571
85,362
109,687
5,660
136,235
4,970
12,744
32,515
8,676
40,545
85,659
110,608
5,663
136,144
4,970
12,744
32,515
8,676
43,610
85,679
110,608
5,663
139,158
County Total 0.28 436,302 437,524 443,623
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.80 -0.19
-0.01
-0.41

0.17 0.51

0.11 2.45
-0.21
-0.13
-0.26
-0.08

0.24 -0.53
43,191
59,656
60,419
31,316
8,477
33,368
81,635
3,564
46,333
84,463
68,093
970,772
132,386
30,845
157,187
90,063
43,095
59,471
60,904
31,255
8,476
33,230
81,773
3,582
46,384
86,535
67,953
969,491
132,048
30,819
157,566
89,584
43,095
59,471
61,033
31,255
8,476
33,230
81,773
3,582
46,384
86,535
67,973
969,491
132,048
30,819
157,566
90,467
County Total 0.02 1,901,768 1,902,166 1,903,198
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.67 -0.19
-0.18
838
1,658
667
676
1,202
3,211
872
2,692
7,820
23,794
836
1,651
665
674
1,199
3,203
870
2,710
7,805
23,750
836
1,651
665
674
1,199
3,203
870
2,710
7,805
23,796
County Total -0.15 43,430 43,363 43,409
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

1.80 0.32

0.35 1.04

0.10 -0.54
-0.52
26,255
19,060
115,266
9,969
28,543
96,096
122,220
17,392
26,033
19,403
115,632
10,004
28,840
96,192
121,558
17,301
26,033
19,403
120,339
10,004
28,840
102,173
121,558
18,076
County Total 0.04 434,801 434,963 446,426
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 County
City
Percent Change
23-24
--- Population Minus Exclusions ---
1-1-23 1-1-24
Total
Population
1-1-24
Sonoma
Cloverdale
Cotati
Healdsburg
Petaluma
Rohnert Park
Santa Rosa
Sebastopol
Sonoma
Windsor
Unincorporated
-1.11
-1.06
-0.32
-0.02
-0.04
-0.07
-0.96
-0.98
-0.91
-0.40
8,808
7,381
11,020
58,457
43,838
175,013
7,366
10,636
25,628
130,333
8,710
7,303
10,985
58,445
43,821
174,890
7,295
10,532
25,394
129,812
8,710
7,303
10,985
58,445
43,821
174,890
7,295
10,532
25,394
130,777
County Total -0.27 478,480 477,187 478,152
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.58 2.28

0.52 0.15

0.29 1.49

1.59 0.55

0.08 0.16
49,035
7,539
216,734
12,103
22,942
24,426
24,614
70,885
9,103
108,372
49,319
7,711
217,862
12,121
23,008
24,790
25,006
71,273
9,110
108,544
49,319
7,711
217,862
12,121
23,008
24,790
25,006
71,273
9,110
108,544
County Total 0.55 545,753 548,744 548,744
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.45 0.08

1.78 1.07

0.70 1.77

1.10 0.17

0.42 25,458
10,171
10,146
12,461
62,320
69,565
142,821
7,700
133,652
25,573
10,179
10,327
12,594
62,758
70,799
144,385
7,713
134,219
25,573
10,179
10,327
12,594
62,934
70,799
144,532
7,713
134,267
County Total 0.90 474,294 478,547 478,918
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.57 -0.49
-0.05
-0.10
-0.69
-0.20
-0.14
-0.11
-0.38
-0.44
69,256
16,965
35,286
7,537
197,737
19,168
107,723
31,400
124,165
123,111
89,813
69,014
17,061
35,114
7,533
197,536
19,036
107,512
31,355
124,029
122,643
89,421
69,014
17,061
35,114
7,533
197,536
20,916
107,569
31,355
124,029
122,643
91,093
County Total -0.23 822,161 820,254 823,863
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment C
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024
County Percent Change
23-24
--- Population
1-1-23
Minus Exclusions ---
1-1-24
Alameda
Incorporated
County Total
-0.48
-0.54
1,500,626
1,648,369
1,493,403
1,639,409
Alpine
Incorporated
County Total

0.00 -0.34
0 1,183
0 1,179
Amador
Incorporated
County Total
-0.80
-0.89
13,813
36,091
13,703
35,770
Butte
Incorporated
County Total

1.61 -0.32
144,871
206,579
147,197
205,928
Calaveras
Incorporated
County Total
-0.47
-0.15
3,604
44,853
3,587
44,786
Colusa
Incorporated
County Total
-0.18
-0.40
11,997
21,831
11,975
21,743
Contra Costa
Incorporated
County Total

0.11 0.12
971,251
1,145,274
972,337
1,146,626
Del Norte
Incorporated
County Total

0.52 -0.08
4,019
24,787
4,040
24,768
El Dorado
Incorporated
County Total

0.32 0.26
31,220
187,974
31,320
188,463
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.81 0.69
847,846
1,005,004
854,714
1,011,968
Glenn
Incorporated
County Total

2.77 1.43
14,458
28,330
14,858
28,736
Humboldt
Incorporated
County Total
-1.14
-1.11
63,392
134,351
62,667
132,866
Imperial
Incorporated
County Total

2.02 1.95
145,696
176,282
148,634
179,725
Inyo
Incorporated
County Total
-0.13
-0.16
3,853
18,826
3,848
18,796
Kern
Incorporated
County Total

0.96 0.77
587,734
887,906
593,394
894,734
Kings
Incorporated
County Total

0.15 0.04
108,741
133,516
108,903
133,575
Lake
Incorporated
County Total

0.90 0.47
21,343
66,619
21,535
66,933
Lassen
Incorporated
County Total
-0.22
-0.08
9,355
24,305
9,334
24,286
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.07 0.05
8,812,107
9,810,925
8,818,472
9,815,428
Madera
Incorporated
County Total

0.28 0.79
79,869
152,734
80,096
153,934
Marin
Incorporated
County Total
-0.55
-0.53
187,420
250,360
186,385
249,041
Mariposa
Incorporated
County Total

0.00 -0.04
0 16,912
0 16,905
Mendocino
Incorporated
County Total

0.27 -0.08
28,485
89,496
28,562
89,424
Merced
Incorporated
County Total

0.95 0.72
194,657
284,081
196,508
286,138
Modoc
Incorporated
County Total
-0.19
-0.20
2,664
8,501
2,659
8,484
Mono
Incorporated
County Total
-2.67
-2.53
7,305
13,097
7,110
12,765
Monterey
Incorporated
County Total

1.00 0.94
317,296
421,668
320,468
425,625
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.47 0.38
111,044
132,816
111,570
133,324
Nevada
Incorporated
County Total
-0.01
-0.30
33,530
100,421
33,525
100,115
Orange
Incorporated
County Total

0.29 0.31
3,010,335
3,140,716
3,019,168
3,150,493
Placer
Incorporated
County Total

0.87 0.67
298,393
410,085
300,976
412,844
Plumas
Incorporated
County Total
-1.14
-0.80
2,099
18,993
2,075
18,841
Riverside
Incorporated
County Total

0.48 0.55
2,021,243
2,420,896
2,030,847
2,434,285
Sacramento
Incorporated
County Total

0.44 0.12
972,430
1,572,419
976,744
1,574,358
San Benito
Incorporated
County Total

0.73 1.06
44,579
65,165
44,904
65,853
San Bernardino
Incorporated
County Total

0.48 0.42
1,856,711
2,143,575
1,865,629
2,152,555
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

0.03 0.07
2,756,900
3,235,324
2,757,771
3,237,699
San Francisco
Incorporated
County Total

0.11 0.11
841,745
841,745
842,644
842,644
San Joaquin
Incorporated
County Total

1.19 1.01
623,820
781,227
631,215
789,081
San Luis Obispo
Incorporated
County Total

0.17 -0.08
157,084
275,541
157,353
275,307
San Mateo
Incorporated
County Total
-0.49
-0.50
683,226
745,168
679,897
741,435
Santa Barbara
Incorporated
County Total

0.44 0.28
300,067
436,302
301,380
437,524
Santa Clara
Incorporated
County Total

0.05 0.02
1,811,705
1,901,768
1,812,582
1,902,166
Santa Cruz
Incorporated
County Total
-0.04
-0.29
135,179
263,282
135,121
262,509
Shasta
Incorporated
County Total

0.18 0.05
113,195
178,923
113,397
179,019
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment C
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024
County Percent Change
23-24
--- Population
1-1-23
Minus Exclusions ---
1-1-24
Sierra
Incorporated
County Total
-0.41
-0.50
727
3,187
724
3,171
Siskiyou
Incorporated
County Total
-0.12
-0.15
19,636
43,430
19,613
43,363
Solano
Incorporated
County Total

0.06 0.04
417,409
434,801
417,662
434,963
Sonoma
Incorporated
County Total
-0.22
-0.27
348,147
478,480
347,375
477,187
Stanislaus
Incorporated
County Total

0.64 0.55
437,381
545,753
440,200
548,744
Sutter
Incorporated
County Total

1.90 1.90
78,432
98,248
79,924
100,110
Tehama
Incorporated
County Total
-0.50
-0.61
22,913
64,578
22,798
64,182
Trinity
Incorporated
County Total

0.00 -0.11
0 15,878
0 15,860
Tulare
Incorporated
County Total

1.08 0.90
340,642
474,294
344,328
478,547
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

Fiscal Year 2024-25
Attachment C
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024
County Percent Change --- Population Minus Exclusions --- 23-24 1-1-23 1-1-24
Tuolumne
Incorporated 0.25 5,119 5,132
County Total -0.11 52,207 52,148
Ventura
Incorporated -0.21 732,348 730,833
County Total -0.23 822,161 820,254
Yolo
Incorporated 0.44 186,763 187,591
County Total 0.55 220,454 221,666
Yuba
Incorporated 0.93 16,492 16,645
County Total 1.25 80,672 81,679
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

Attachment 2

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
Staff Report
June 4, 2024

PUBLIC HEARINGS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Jane Hogan, Accountant
APPROVED BY: Chip Rerig, City Administrator
SUBJECT:

Resolution 2024-047 Adopting the Fiscal Year 2024-2025 Annual Operating and Capital Budget
RECOMMENDATION:

Adopt Resolution 2024-047 Adopting the Fiscal Year 2024-2025 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 2024-2025 (FY 24-25) Recommended Budget of $43.5 million is submitted for Council’s consideration. The proposed expenditures totaling $43.5 million, include the General Fund operating budget ($28.3 million), debt service ($519,100), pension unfunded liability ($2.4 million), capital budget ($12.2 million), and workers compensation ($127,000). The proposed revenues totaling $31.4 million include property taxes ($8.6 million), sales tax ($9.8 million), transient occupancy tax ($7.5 million), and other revenue ($5.5 million). The FY 24-25 Recommended Budget requires the use of $12.1 million in prior years’ savings ("unassigned fund balance") specifically to fund deferred Capital projects.

The total fund balance is estimated to end the FY 23-24 at $37.3 million which includes all restricted, reserves and unassigned funds. City Council has the authority to tap into the unassigned fund balance which currently sits at approximately $15M.

As the economy remains unpredictable, the City remains cautious and anticipates only a conservative increase in revenues for FY 24-25. Conversely, the City also expects its expenditures to grow in FY 24-25, primarily related to pension costs, general operating costs, and a robust Capital Improvement Plan.

Highlights of the budget include:

Salary and benefit costs of approximately $16 million with the addition of 1.02 Full Time Equivalent (FTE) employees over the prior FY (97.25 FTE total).

Pension costs of approximately $2.4 million, which includes $2.0 million for the City’s annual unfunded accrued liability (“UAL”) payment to CalPERS. Additionally, the City will restrict $1 million by once again transferring funds into the City’s established Section 115 Trust.

Services and supplies costs of approximately $12.4 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.
$12.2 million for capital projects and vehicle and equipment purchases in the following categories: public safety ($3.4 million), streets/sidewalks ($4.0 million), facilities ($1.1 million), drainage ($1.6 million), green infrastructure ($100,000), environment ($1.1M), IT/Planning ($300,000), fleet ($150,000), libraries ($100,000) and CIP Contingency ($400,000).
$519,100 for debt service payments and $127,000 for workers compensation claim administration, potential claims and costs associated with the implementation of preventive measures.

Staff provided an overview of the budget as part of the May 7, 2024 Council meeting. At the May 21, 2024 budget workshop, staff presented a detailed review of the budget and received direction from Council to remove three CIP projects from FY24-25 and postpone for consideration in FY25-26.

Those projects were the Doolittle Bridge and Pathway Realignment, Junipero Bypass Drainage Project, and Park Branch Library Windows and Dry Rot. Additionally, the Recommended Budget Book has been revised to reflect updates to the Capital Improvement Plan narratives and Table 2: FY 24-25 Recommended Capital Projects and Funding Source.

Also attached to this staff report are the questions received for both the operating budget and CIP throughout the entire budget process with corresponding answers.

FISCAL IMPACT:

The FY 24-25 Recommended Budget totals $43,492,044 million and uses $12,060,795 million in prior years’ savings ("unassigned fund balance") specifically to fund deferred Capital projects.

PRIOR CITY COUNCIL ACTION:

Council received a presentation regarding the Five-Year CIP on March 4, and March 26, 2024. Council received a presentation regarding the FY 23-24 Recommended Budget, inclusive of the Capital budget, on May 7, 2024. Council held a FY 24-25 budget workshop on May 21, 2024.

ATTACHMENTS:

Attachment 1) Resolution 2024-047
Attachment 2) Adopted FY24-25 Budget Book
Attachment 3) Budget Questions and Answers
Attachment 4) CIP Questions and Answers

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2024-047

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA ADOPTING THE FISCAL YEAR 2024-2025 ANNUAL OPERATING AND CAPITAL BUDGET WHEREAS, on January 9, 2024, the City Council of the City of Carmel-by-the-Sea adopted the budget schedule for Fiscal Year 2024-2025 in accordance with Carmel Municipal Code Section 3.060.020; and
WHEREAS, the City Council held public meetings on the proposed Fiscal Year 2024-2025 capital projects and Five-Year Capital Improvement Program on March 4, 2024 and March 26, 2024; 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 8, 2024 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 2024-2025 Operating and Capital Improvement Program Budgets during the budget hearing held on May 21, 2024 and gave general direction on the recommendations contained therein during a public meeting; and
WHEREAS, the City Council held a public hearing on June 4, 2024 for consideration of adoption of the proposed Fiscal Year 2024-2025 Operating and Capital Budget; and WHEREAS the City’s budget totals $43,492,044 for Fiscal Year 2024-2025 consisting of appropriations, inter-fund transfers, General Fund expenditures of $28,286,593, Capital expenditures of $12,184,000 (Capital Projects and Vehicle and Equipment Funds), Debt Service expenditures of $519,100 and Workers Compensation expenditures of $127,000.

WHEREAS the City’s budgeted revenue totals $31,431,249 for Fiscal Year 2024-2025, including General Fund revenue of $24,820,070.

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 2024-2025.

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 2023-2024 as necessary as part of the fiscal year-end process on June 30, 2024.

Approves and adopts the City of Carmel-by-the-Sea’s Fiscal Year 2024-2025 Recommended Operating Budget and Capital Improvement Program Budget.

Attachment 1
Resolution No. 2024-047

Page 2 ends

Authorize the City Administrator to make ministerial changes to budgeted transfers and adjust appropriations to or from designated funds as necessary during Fiscal Year 2024-2025.

Approve and adopts establishing the General Fund Reserve based upon fifteen percent (15%) of the General Fund Operating Expenditures for Fiscal Year 2024-2025.

Directs that 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 2024-2025.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA this 4th day of June, 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:
_________________________ _________________________
Dave Potter Nova Romero
Mayor City Clerk
Attachment 1
Fiscal Year 2024-2025

ADOPTED BUDGET

CITY OF CARMEL-BY-THE-SEA

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
2 CITY LEADERSHIP

DAVE POTTER,
MAYOR

BOBBY RICHARDS,

MAYOR PRO TEMPORE

JEFF BARON,

COUNCILMEMBER

KAREN FERLITO,

COUNCILMEMBER

ALISSANDRA DRAMOV,

COUNCILMEMBER

CHIP RERIG,

CITY ADMINISTRATOR
Attachment 2
3 Table of Contents
INTRODUCTION..................................................................................................................... 4 ADOPTED BUDGET MESSAGE......................................................................................... 5 REVENUE ............................................................................................................................ 9 EXPENDITURES................................................................................................................13 FY 24-25 AUTHORIZED POSITIONS................................................................................16 ORGANIZATIONAL CHART..............................................................................................17 OPERATING BUDGET...........................................................................................................19 CITY COUNCIL ..................................................................................................................20 CITY ATTORNEY ...............................................................................................................22 ADMINISTRATION ............................................................................................................23 CITYWIDE (NON-DEPARTMENTAL)...............................................................................28 ECONOMIC DEVELOPMENT...........................................................................................29 LIBRARY AND COMMUNITY ACTIVITIES.....................................................................31 COMMUNITY PLANNING AND BUILDING ...................................................................35 PUBLIC WORKS.................................................................................................................39 PUBLIC SAFETY................................................................................................................46 CAPITAL IMPROVEMENT PLAN (CIP)...............................................................................51 DEBT SERVICE......................................................................................................................68 OTHER FUNDS ......................................................................................................................70 OTHER FUNDS OVERVIEW.............................................................................................71 PROJECTED FUND BALANCE ........................................................................................74 PROJECTED FUND BALANCE AS OF JUNE 30, 2024...............................................75 PROJECTED FUND BALANCE AS OF JUNE 30, 2025...............................................76 FINANCIAL POLICIES..........................................................................................................77 APPROPRIATIONS LIMIT.....................................................................................................90 APPENDIX A...........................................................................................................................93 RESOLUTION 2024-XXX ADOPTION OF FY 24-25 BUDGET............................................94 FY 24-25 ADOPTED BUDGET (DETAIL)..............................................................................95 Attachment 2
4 INTRODUCTION
Attachment 2
5 BUDGET MESSAGE
Honorable Mayor Potter, City Councilmembers, and Residents of Carmel-by-the-Sea:

In accordance with Carmel Municipal Code Section 3.06.020, I present the City’s operating and capital budget for the fiscal year 2024-2025 (“FY 24-25”) with tentative adoption on June 4, 2024. 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 risen to a magnitude of challenges over the last year including another season of severe winter storms that absorbed a profound amount of our capacity, and several high interest community projects such as the General Plan Housing Element, and the Police Station Project. Throughout, the City’s dedicated staff, volunteer groups and the community at large worked 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 objectives and provides a framework to meet future challenges such as rising operational costs and limited growth in revenues.

As we move forward and plan to implement the Fiscal Year 24-25 operating budget in 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 high interest rates, changes in leisure travel patterns, market distress, and volatility in financial markets. Although far from our backyard, the two major wars currently being fought overseas factor into the overall economic picture. These variables have resulted in a decrease in revenue for many businesses and organizations, and we would be wise to anticipate and prepare for potential impacts on our own financial situation.

At the national level, we have continued to see declines in personal savings which fell from roughly 4.8% in June of 2023 to 3.2% at the time of this document’s preparation. This trend 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, so there is also uncertainty around how long [soon] it will be before we see a major change, especially given all of the financial “levers” that have been pulled over the last year by the FED in efforts to affect the economy.

Attachment 2
6 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. Very recently, the Governor has signaled the need to make cuts to the State Budget, which could impact grant funding anticipated to be received by local governments like ours.

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 County-wide tourism industry continues to recover from the pandemic, resulting in a decrease in revenue county-wide. The City’s three major sources of General Fund revenue (Property Tax, Sales and Use Tax and Transient Occupancy Tax) continue to increase, but only slightly as the trend of “revenge spending” that was seen coming out of the pandemic continues to flatten. This trend has led to decreased occupancy in our hotels and a remaining uncertainty about travel patterns, impacting two of these three major revenue pillars. It is also worth noting that as Highway 1 through Big Sur more routinely has some sort of annual disaster event, we will continue to see less visitor trade and traffic coming up along the coast from the L.A. area and bringing important visitor dollars to the peninsula.

As I said, the factors identified above may reflect a monetary tightening that could impact the City’s revenue pillars into the future. 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 at status quo, and where there may be room to cautiously spend budgetary dollars to enhance services for the Village. Given trends though, it is likely the City will soon need to begin to explore the need for additional sources of revenue to maintain our financial stability or adopt a position of significantly reducing costs in future fiscal years.

The adopted budget is not operationally balanced, meaning the total projected incoming revenue does not fully compensate for our projected expenditures. The adopted budget is, however, structurally balanced – balanced by strategically using “unrestricted fund balance”. As discussed at the budget hearings this year, “unrestricted fund balance” is different than our “restricted fund balance” and “reserved fund balance”. The “unrestricted fund balance” is not required to be set aside or used for a specific purpose each year, since it comes from revenue that was not spent over past fiscal years as planned (e.g.: unspent Capital Improvement Program dollars). The use of these “unrestricted fund balance” dollars makes it possible to address past and current direction of Council, which is to maintain core services, invest heavily in deferred infrastructure maintenance, natural resource management, community character and of course the Police Building Project. We are fortunate to have an available “unrestricted fund balance”, accumulated through the prudent budgeting in past years, to close the gap in revenue that we are forecasting. In Attachment 2
7 total, the funds needed to structurally balance the budget total $12,060,795. Using this amount will consume roughly 80% of our current unassigned fund balance, the remainder of which will continue to be saved.

STAFFING
After no increase in the previous Fiscal Year, we will see an increase in the number of City staff. This will be accomplished in part by a restructuring of some existing positions to meet the changing operational needs of the City and to respond to the City Council and Community’s desires for additional services. At face value in the FY24-25 budget, it appears that only 1 FTE is being added to the entire workforce, but this number does not reflect the full story, which is the addition of approximately 6 new FTE staff members. In the Library, a total of 1.25 new Library Assistant FTEs are included, which could allow for additional weekend hours; In Community Planning and Building, 1 Principal Planner FTE is included, which will allow for implementation of the General Plan Housing Element; and in Public Works a total of the following 4 new FTEs are included: 1 Maintenance Worker, which will increase capacity to complete deferred maintenance around the Village, 1 Project Manager, which will help with accomplishing more CIP projects without contractors, 1 Assistant City Forester, which will help with response time for development plan review and implementation of the forthcoming Urban Forest Management Plan, and 1 Tree Permit Technician, which will help with processing tree permits and inspection requests.

These new positions are offset in the total count of FTEs by a few things: 1) reclassification of some existing vacant positions which no longer support operational needs such as the Library Circulation Supervisor, and the Public Works Natural Resource Manager; and, 2) The removal of 4 Police Department positions still listed on the City roster which should have been removed after the major restructuring that took place in FY 22-23.

CAPITAL IMPROVEMENT AND MAINTENANCE
On March 4, March 26, and again on May 21, 2024, the City Council reviewed the FY 24-25 Capital Improvement Program. Comprised of 20 CIP projects and 6 Vehicle and Equipment projects, the combined total CIP investment for carry-over plus new projects would be $12,184,000 – a figure that includes both internal and external funding. Capital projects included in the adopted budget consist of rehabilitation of City facilities, sidewalk and street improvements, enhanced public safety, Citywide ADA improvements, and protection and preservation of the natural environment. More generally speaking, the FY 24-25 budget recognizes the importance of investing in our “green” infrastructure (Mission Trails Nature Preserve, Carmel Beach and Coastline, etc.), and includes funding for continuation of the Police Building project, Library Master planning, and improvements at Sunset Center and other City facilities.

Attachment 2
8 Vehicle & Equipment Fund
The total vehicle acquisition costs for FY 24-25 are budgeted at $570,000 and the City's 10% replacement reserve target is approximately $500,000. Currently, the Vehicle & Equipment Fund balance is estimated at $1,060,000 for FY 23-24 and will be utilized for FY 24-25 acquisitions. The City will continue to maintain the Vehicle & Equipment replacement reserve at 10% of the estimated replacement value of the City’s vehicles and equipment, adjusted annually based on CPI.

FISCAL YEAR 24/25 BUDGET AT A GLANCE
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 future 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 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
9 REVENUE
The FY 24-25 Adopted Budget includes $31.4 million in estimated new revenue. As illustrated in the chart below, statewide sales tax (Sales Tax) and local Measure C district tax, contribute 31% and is the largest City revenue source. This reveals the importance and impact of the voter approved of Measure C in 2020. Property Tax reflects its customary stable growth accounting for 28% of the budgeted revenue. Hotel Tax (TOT) increases 2% over last fiscal year to 24% of budgeted revenue, followed by Other Revenues and Charges for Services combined at 17%, a 2% decrease over prior FY 23-24.

Attachment 2
10 Property taxes are estimated at $8.6 million, reflecting a 2% projected growth over the previous year’s adopted budget. The City’s portion of the Sales Tax is $3.7 million and Measure C is $6 million, which remains at 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. Amid COVID-19, Measure C provided a financial lifeline allowing for the continuance of core City services and still factors significantly in funding both operational and capital needs. Sales Tax has also fared well. This FY 24-25 Adopted Budget projects a continuation of status quo in Measure C and Sales Tax trends as consumers remain cautious of inflation and overall price increases of goods and services.

Transient Occupancy Tax (“TOT”) is levied at 10% of the rent charged by a hostelry operator within the City. TOT has slowed over the FY 22-23 high. Adopted at $7.5 million, TOT accounts for 24% of revenues, a 2% increase over FY 23-24. 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 $2.6 million, or 8% 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.

The City’s three major sources of revenue include Property Tax, Sales and Use Taxes, and Transient Occupancy Tax (As detailed in Table 1 above entitled “Estimated Performance and Recommended Budget for Major Revenue Sources”).

PROPERTY TAXES
The desirability of Carmel-by-the-Sea as a place to reside, coupled with its limited housing stock, contribute to a strong local real estate market. Property tax revenue has been increasing on average by 6% over the past 9 years, reaching $8.14 million in fiscal year 2022-2023.

The State median home price is expected to rise 6.2% to $860,300 in 2024, after dropping

1.5% to $810,000 in 2023 from $822,300 in 2022. The City has budgeted Property Tax Attachment 2
11 revenue to increase 2% over last fiscal year’s adopted budget, as it has done in prior years.

This budget conservatively projects growth yet remains confident in the stability of Carmel’s property tax performance.

SALES AND USE TAXES
The majority of the City’s sales and use taxes are attributed to businesses within the categories known as general consumer goods and restaurants. The City receives a portion (1%) of the statewide sales tax, known as Bradley-Burns tax, as well as revenue from a local sales tax. On March 3, 2020, the Carmel electorate voted and approved Measure C to increase the sales tax rate to 1.5%. The timing of Measure C helped minimize the effects of reduced sales tax revenue suffered during the pandemic, allowing the City to survive and recover to pre-pandemic levels by fiscal year 2020-2021. In fiscal year 2021-2022, the City of Carmel-by-the- Sea experienced a peak increase in sales and use tax revenue, a reflection of the “revenge” consumer spending and relief from consumer goods shortages and logistic headaches brought out during COVID-19. Fiscal year 2022- 2023 sales and use tax revenue finished slightly under the prior year’s high of $9.6 million at $9.3 million, a 2.69% decrease.

The City remains conservative and vigilant to the current trends, as we are aware that geopolitical tensions, inflation concerns, and interest rates drive consumer spending patterns even at the local level. Consumer spending for certain goods and services remains high, particularly for online shopping and dining. General consumer goods spending slowed by the end of FY 22-23, hitting outlets, galleries and gift shops the hardest. We project stagnant sales tax activity in FY 24-25 and estimate $3.7 million for local sales tax and $6 million for Measure C, for a total of $9.7 million. We also anticipate $9.7 million in sales tax for FY 23-24.

TRANSIENT OCCUPANCY TAX
The FY 24-25 Adopted Budget for TOT revenue is $7.5 million, which assumes continued occupancy at the current fiscal year’s rate. In FY 23-24, daily occupancy rates have been lower while the daily room rates are higher over prior fiscal year. For the reasons noted above under Sales and Use Taxes, as well as Highway 1 Big Sur closures, we remain guarded in our TOT revenue projections due in large part to consumer travel trends.

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 charts below depicts the performance of the City’s three major revenue sources over the last 10 years.

Attachment 2
12 Attachment 2
13 EXPENDITURES
The FY 24-25 Adopted Budget totals $43.5 million, which consists of the following:
▪ Operating Budget, or General Fund, totals $30.7 million, or 71%, of the citywide budget
▪ Debt service totals $519,100, or 1% of the citywide budget ▪ Capital outlay, including Capital Improvement Projects ($11,614,000) and Vehicles and Equipment ($580,000), makes up 28% of the adopted budget The Operating Budget consists of the City’s 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 24-25 Expenditure by Type, the FY 24-25 Budget includes the Operating Budget and Debt Service. The Operating Budget is further categorized by types of expenditure including salaries and benefits, outside services, and other expenditures as explained below.

Attachment 2
14 The City’s largest expenditure is related to the cost of personnel. Salaries and benefits total $16 million and account for 36% of the citywide budget. Capital Outlay is the second largest type of expenditure at $12.2 million, or 28% 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 ($3.3 million); support for the operations of the Sunset Center and other marketing activities ($1.2 million); legal services ($517,000); tree care and landscape maintenance ($1.5 million) and janitorial service ($280,000).

Other expenditures total $3.3 million and account for 8% 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 ($1.1 million) 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 $2.4 million, or 6%, of the budget and only include the annual required unfunded pension liability ($2.4 million). The City will also make its annual funding transfer to the City’s Section 115 trust ($1.0 million) for pension mitigation, which is intended to help reduce the long term liability of pensions. This transfer is represented as part of Fund 101 (see page 76). After the FY 24-25 transfer, the balance is estimated to be approximately $4.06M on June 30, 2025.

The citywide budget is rounded out with Debt Service ($519,100) accounting for 1% of the citywide budget.

Another way to view operating expenditures is by function, as depicted in the FY 24-25 Expenditures by Function illustration below. Capital Outlay makes up 28% of operating expenditures. The public safety functions of Ambulance, Fire and Police make up 24% of the budget. The Public Works Department is the next largest operating expenditure at 15% followed by Citywide at 9% 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 23% of the Operating Budget.

Attachment 2
15 Attachment 2
16 FY 24-25 AUTHORIZED POSITIONS
Attachment 2
17 Attachment 2
18 ORGANIZATIONAL CHART
Carmel-by-the-Sea
Electorate
Council
City
Administrator
Community
Planning &
Building Director
Admin
Planning
Building Safety
Code
Compliance
Office of City
Administrator
Admin
City Clerk
Finance
Human
Resources
Information
Technology
Library and
Community
Activities Director
Library
Admin
Circulation
Youth
Reference
Local History
Community
Activities
Public Works
Director
Admin
Project
Management
Environmental
Compliance
Facilities
Streets
Forest, Parks
and Beach
Public Safety
Director
Ambulance
Fire
Police
Assistant City
Administrator
City Attorney
Attachment 2
19 OPERATING BUDGET
GENERAL FUND - 101
(CITY DEPARTMENTS AND SERVICES)
Attachment 2
20 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 policymaking 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. 2023-2024 INITIATIVES AND ACCOMPLISHMENTS
▪ Develop Telecommunication Ordinance consistent with federal law ▪ Stormwater Ordinance Update
▪ Car Week Safety and Impacts
▪ Review barriers to construction of affordable housing (Housing Element Adoption) 2024-2025 PRIORITIES
▪ 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
▪ Community Promotions includes $36,000 for the Council discretionary grant program, $3,000 for United Way 211, $3,000 for the Monterey County Film Commission, and $86,600 for the cost of courier service for the mail delivery program for a total budget of $122,600.

Attachment 2
21 Attachment 2
22 CITY ATTORNEY
The City Council appoints the City Attorney. The City Attorney represents the City as legal counsel 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 agenda items.

BUDGET SUMMARY AND SERVICE IMPACTS
▪ The FY 24-25 contract services budget totals $442,000 and consists of $360,000 for general legal services and $75,000 for other specialized legal assistance from the City attorney’s office, including labor negotiations and personnel. The budget also includes $7,000 for the City attorney’s annual performance evaluation. There are no changes from FY 23-24 adopted budget.
▪ $75,000 is budgeted for supplementary specialized legal costs, such as wireless communications and labor negotiations.

Attachment 2
23 ADMINISTRATION
The City Administrator is appointed by the City Council and is ultimately 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 of all City Departments. The Assistant City Administrator serves at the behest of the City Administrator to assist in managing the activities and operations of the City, act in the absence of the City Administrator, and serve as the Director of the centralized administrative city functions of City Clerk, Finance, Human Resources, and Information Technology.
2023-2024 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
▪ Pursued collaborative relationships with USPS and the Postmaster and through staff research produced four next step options in exploring street addresses ▪ Awarded Certificate of Achievement for Excellence in Financial Reporting for the City’s Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2022
▪ Continued execution of the City’s multi-pronged financial strategy to address pension liability
▪ Updated the City’s Purchasing Policy
▪ Refreshed the City’s website
▪ Completed public engagement phase through public meetings and outreach for the Parking and Traffic Management Program
2024-2025 PRIORITIES
▪ Explore Opportunities for Flanders Mansion
▪ Explore Street Addresses
▪ Develop and Implement a Social Media Plan
▪ Explore Parking and Traffic Management
Program
▪ Review and update reserve and financial
policies
▪ Transient Occupancy Tax (TOT) increase:

Explore a ballot measure for 2024 election
▪ Carmel Area Wastewater District (CAWD)
Bridge to Everywhere Project
▪ Board and Commissioner Training
Attachment 2
24 BUDGET SUMMARY AND SERVICE IMPACTS
Attachment 2
25 ADMINISTRATION
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.

CITY CLERK
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. The Clerk 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
26 FINANCE
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 passthrough funding to the hospitality and tourism improvement districts. The Finance Department also provides treasury services, invests revenue, and issues and manages debt.

HUMAN RESOURCES
Human Resources (HR) 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. HR Staff is responsible for negotiating Memorandums of Understanding with the City’s three labor 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 in the budget under Employee Appreciation.

Attachment 2
27 INFORMATION TECHNOLOGY
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, Councilmembers, and the community. In addition, IT supports and continuously improves essential technology infrastructure for enabling day-to-day operations of the City.

Attachment 2
28 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 increases by $432,584, or 22%, in FY 24-25 compared to the FY 23-24 Adopted Budget. The FY23-24 lump sum payment was paid in July 2023 for a savings of $65,000 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.
▪ On September 7, 2021, Council authorized the adoption of a Section 115 Trust known as the Public Agencies Post Employment Benefits Trust administered by the Public Agency Retirement Service (PARS). Since then, City staff has deposited three (3) $1 million annual contributions into the Trust, which were approved by Council to be made over a period of five years. The City will be contributing the fourth annual $1 million tranche into the Section 115 Trust in FY 24-25. ▪ The City’s liability insurance premiums are budgeted to increase by $155,535, or 16%.
▪ The utility expenses for the Forest Theater are separated out for tracking purposes, as required by the lease with the Pacific Repertory Theater.

Attachment 2
29 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 Pacific Repertory Theater (Pac Rep) 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 two organizations, Visit Carmel and See Monterey to manage visitors. Visit Carmel, as the City’s destination marketing organization (DMO), 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. See Monterey, as the DMO for all of Monterey County, works to manage and educate visitors coming to the broader County who may also choose to visit Carmel-by-theSea.

In addition to supporting these visitor management 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 See Monterey 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 (CRID) and remits these funds to Visit Carmel for marketing efforts to increase food and beverage sales within the City. An ordinance of the City Council renewed the CRID for a term of nine years and six months beginning January 1, 2024 and ending on June 30, 2033.

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, Attachment 2
30 conducting outreach with businesses via weekly business walks with City elected officials and staff and marketing opportunities to “shop locally”.

BUDGET SUMMARY AND SERVICE IMPACTS
Funding for Visit Carmel has and continues to be budgeted in the amount of $120,000 annually. Funding to See Monterey is $226,297, which equates to 3% of the FY 24-25 Transient Occupancy Tax revenue budget of $7,453,000.

Attachment 2
31 LIBRARY AND COMMUNITY ACTIVITIES

LIBRARY
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. 2023-2024 WORKLOAD INDICATORS / PERFORMANCE MEASURES
▪ 15,722 reference and information questions were answered. ▪ 2,088 library cards were issued.
▪ 85,223 library items were circulated.
▪ 5,006 people attended library programs.
▪ 120,194 visits were made to the library.
▪ 9,390 log-ins were made to library wi-fi.
▪ 84,485 digital items (e-books, audios, magazines, films, music) were accessed. ▪ 5 new oral history interviews were captured.
2023-2024INITIATIVES AND ACCOMPLISHMENTS
▪ Worked with the Community Activities Department, Police Department, and Carmel CERT to launch the Carmel Prepares initiative to communicate with the community on a regular basis on regional agency preparedness efforts and to encourage citizens to be prepared for disasters and emergencies.

Attachment 2
32 ▪ With funds from the Harrison Memorial Library Board of Trustees purchased equipment to turn the Park Branch Library into a charging station for the community during power outages.
▪ Created space in Park Branch Library for ongoing Friends of the Library book sales. ▪ Began working with the Carmel-by-the-Sea Rotary to launch Dolly Parton Imagination Library countywide to provide free books to children aged 5 and under. 2024-2025 PRIORITIES
▪ Restore Saturday hours.
▪ Complete a new Library’s Strategic Plan.
▪ Continue to work on moving the Library Facilities Master Plan project forward.

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
33 COMMUNITY ACTIVITIES
The Community Activities Department encourages and supports 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 inperson 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 special events, beach events, and filming, in addition to organizing 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).
2023-2024 WORKLOAD INDICATORS / PERFORMANCE MEASURES
▪ Planned and facilitated twelve City special events.
▪ An estimated 6,000 people attended City Special Events. ▪ Issued 46 event, beach, and film permits.
2023-2024 INITIATIVES AND ACCOMPLISHMENTS
▪ Worked with the Library, Police Department, and Carmel CERT to launch the Carmel Prepares initiative to communicate with the community on a regular basis on regional agency preparedness efforts and to encourage citizens to be prepared for disasters and emergencies, which will be a biannual event going forward. ▪ Collaborated with Public Works on a combined Community, Earth, and Arbor Day celebration, in addition to the annual Community Day event in the Fall. ▪ Continue to work with Car Week event organizers to build Car Week in Carmel back to something like it was pre-pandemic.

Attachment 2
34 2024-2025 PRIORITIES
▪ Holding beloved annual special events and always looking for ways to make them safer and more fun.
▪ Building and sustaining community partnerships for current special events and future smaller events.
▪ Soliciting community input on new small
community-oriented events and
initiatives through surveys, Farmers’
Market outreach, and work with
community partners.
▪ Continuing to facilitate community
gatherings and special events, and ensure
that processes are streamlined and
conducive to encouraging events within
the bounds of current city regulations.
▪ Continue to keep the Council informed on new initiatives and provide report outs on items like Car Week and the Farmers’ Market.

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
35 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.

PLANNING
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.

BUILDING SAFETY
The Building Safety Division is responsible for plans examination and inspections of City and private development projects to ensure compliance with building codes.

CODE COMPLIANCE
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.

Attachment 2
36 2023-2024 INITIATIVES AND ACCOMPLISHMENTS
▪ Began work on Phase 2 update of the City’s Historic Context Statement. ▪ Adopted and certified an update to the City’s General Plan Housing Element for the 6th Cycle of the Regional Housing Needs Allocation (RHNA). ▪ Adopted a full update to the City’s Wireless Ordinance, including robust public participation and complete redraft to all 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: expanding the online payment system, simplifying CPB’s website portal, refreshing SOPs for the Building and Planning processes.
▪ Certified an update to the City’s Timeshare Ordinance with the California Coastal Commission.
▪ Multiple community workshops and meetings for the Design Traditions 1.5 Project, following the release of a first draft update to the Commercial and Residential Guidelines.
▪ Conducted citywide code compliance effort to bring excess outdoor seating/guest amenities still remaining from the Covid-19 emergency proclamation into conformity or to gain the required permits.
▪ Conducted complete fee study on department wide permit fees, adjusted amounts, and implemented new fees.
▪ Completed first draft of ADU ordinance, held public workshop with Planning Commission, and worked with Coastal Commission and HCD staff to refine policy language.
▪ Purchased and rolled-out of two (2) electric bicycles for Planning, Building, and Code Compliance inspections.
2024-2025 PRIORITIES
▪ Continued implementation of the CPB 2019 strategic plan, with a focus on customer service, technology, and streamlining processes.
▪ Begin year one of eight to implement the General Plan Housing Element and utilize State grant funding through the Regional Early Action Planning (REAP) 2.0 program.
▪ Adopt the General plan Safety Element updates by December 2024. ▪ Adopt Phase 2 (final phase) of the Historic Context Statement update. ▪ Adoption of: (1) updated Accessory Dwelling Unit Ordinance; (2) updated Beach Fire Ordinance.
▪ Formalize a Long-Range Planning work plan to help with planning and tracking ordinance related tasks.
▪ Update the City’s Mills Act Policy and bring it to City Council for Consideration.

Attachment 2
37 ▪ Complete the 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.
▪ Complete a successful recruitment to install a new Director of Community Planning and Building
▪ 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
Planning contract services ($136,010 total) includes items such as $82,500 for General Plan Housing Element implementation and Safety Element updates; $40,000 for scanning rolled plans stored at Vista Lobos, and $40,000 for the completion of Phase 2 update of the Historic Context Statement. The City will receive a total of $82,500 in various State grant awards to offset some of the contract services associated with the Housing Element and the Historic Context Statement Update.

The State has signaled that potential housing program budget cuts will be made to balance the overall State budget. Due to this, it is likely that the previously awarded REAP 2.0 Grant from last fiscal year ($85,000), will be reduced by 50% to $42,500 in this coming fiscal Attachment 2
38 year. This reduction has been reflected in the FY 2024/24 budget. The REAP 2.0 Grant funds are used for Housing Element implementation.

In an effort to continue professionalizing and growing the Board and Commission members along with the Community Planning and Building Department staff, the overall budget for training and education has been increased to include training for boards and commissions.

The Planning Department is seeking to add one (1) new position, which would effectively be the Housing Element implementation planner. This position would be created at the Principal Planner level. With the 6th Cycle Housing Element now adopted, the task at hand is an 8-year implementation plan. This complex and detailed plan will require a fulltime effort, that will be undertaken and managed by this new position. The addition of this new Planning Position will also greatly reduce the need to utilize costly contract support for the implementation of the Housing Element.

PLANNING

BUILDING SAFETY

CODE COMPLIANCE
Attachment 2
39 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
The Administration Division prepares Council agenda reports, monthly status reports, and annual 5-year Capital Improvement Plan, make presentations, serves as Executive Team liaison to the Forest and Beach Commission and on the Transportation Agency for Monterey County Technical Advisory Committee (TAMC TAC) and Traffic Safety Committees, liaison to volunteer groups throughout the City, performs engineering services, and provides administrative support, budgeting, scheduling, and performance oversight of the operating divisions.

STREET MAINTENANCE
The Street Maintenance Division supervises Public Works field personnel, prioritizes and allocates equipment, tools, and material 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.

FACILITIES MAINTENANCE
The Facilities Maintenance Division maintains and repairs 20 City-owned buildings and facilities with 137,000 square feet, including 8 historic buildings nearly 100 years old, supports facility renovation capital improvements, oversees janitorial contract, obtains quotes and manages building trade contractors, implements ADA projects, and performs annual fire safety apparatus, generators, and
backflow inspections.

ENIVORNMENTAL COMPLIANCE
The Environmental Compliance Division 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 ReGen
Attachment 2
40 Monterey and Monterey Regional Stormwater Management Program TAC committees, manages sensitive projects in the North Dunes and Mission Trail Nature Preserve (MTNP), evaluates energy reduction initiatives, and coordinates with partners on resiliency, environmental, and sustainability-focused projects.

FORESTRY, PARKS AND BEACH
The Forestry, Parks and Beach Division performs tree
management for 10,000+ City trees, including planting,
pruning, and removal services, prepares reports and
presentations for 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 private development applications, manages
multiple on-call tree care and landscape maintenance
service contractors, and provides emergency response
during storms.

PROJECT MANAGEMENT
The Project Management Division implements planning, engineering, design, public bidding, and construction- of capital improvement projects, including transportation, drainage, and facility renovation projects, performs condition assessments, manages consultants and contractors, coordinates with utilities and other City departments, prepares special conditions of approval for major encroachment permits, checks technical reports and plans, obtains permits, and prepares specifications, contract documents, and cost estimates.
2023-2024 INITIATIVES AND ACCOMPLISHMENTS
▪ Facilitated community volunteer organizations in obtaining permits for projects such as Leadership Carmel’s Forest Hill Park “Nature Play” project and Carmel Cares’ Scenic Road Barrier Rails
▪ Continued developing the Urban Forest Master Plan and completed technical studies
▪ Planted new trees following removal of dozens of dead, diseased, and hazardous trees that were removed via task orders by our on-call tree services contractors ▪ Coordinated emergency response and clean up of tree incidents from February 2024 storms
▪ Established 48 sites which receive ongoing landscaping maintenance by our on-call landscaping contractor
Attachment 2
41 ▪ Updated the City’s Stormwater Ordinances
▪ Issued two Emergency Coastal Development
Permits to repair six beach access stairways
▪ Completed Phase I of the Coastal Engineering
Study, including the Shoreline Assessment and
Beach Change Analysis, Erosion Exposure
Modeling, Coastal Hazards, and Sea Level Rise
Vulnerability Assessment
▪ Awarded a $500,000 Coastal Commission Local
Coastal Program Grant to perform Phase 2
▪ Held the 2nd-Annual Earth Day/Arbor Day
celebration
▪ Installed new split rail fencing at Forest Hill Park
and the North Dunes Habitat Restoration area
▪ Implemented waste management compliance with
organics and recycling regulations, and implemented a new waiver application process
▪ Installed new dual, ribbon style, trash and recycling cans throughout downtown and residential areas
▪ Supported the re-formed Climate Committee
▪ Remodeled the Police Dispatch Office
▪ At Sunset Center, installed new bollards, a
recirculating fire pump system, and replaced the
heater for Carpenter Hall
▪ Completed other Facility Renovation Projects: Fire
Station back patio resurfacing, Police evidence locker
installation, and Park Branch Library dumbwaiter
decommissioning
▪ Updated the “StreetSaver” Pavement Management
System database
▪ Used 30 tons of asphalt to fill potholes and street
repairs and 70 gallons of traffic paint to update
pavement markings
▪ As a Public Works team building project, rebuilt a foot bridge in MTNP and installed new roadway surfacing and new gate at the Preserve entrance at Eleventh Avenue ▪ Began using the all-electric Street Sweeper and received a $250,000 rebate from 3CE
▪ Auctioned 7 surplus vehicles for a total of $36,000
▪ Completed construction of the following Capital Improvement Projects:
▪ City Hall Retaining Wall Repair Project
▪ MTNP – Well Abandonment, and Removal of Tank and Pump House Attachment 2
42 ▪ Completed construction of the FY 22 Paving Project, which included the City’s first application of micro-surfacing and establishment of the first official bike route along San Carlos Street
▪ Hazardous materials remediation and painting the exterior of Sunset Center and Harrison Memorial Libraries
▪ Electrical panel assessments at four sites: Public Works, City Hall, and Fire Station, and Ocean Avenue median
▪ Completed engineering, design, and environmental review of the following Capital Projects:
• MTNP – 3 Drainage Improvements for Stream Stability
• Four Drainage System repairs and bottlenecks
• FY 23 Concrete Street Repair Project
• FY 23-24 Street Resurfacing Project
• San Antonio Pathway Repairs (Second to Fourth Avenues) • Sunset Center Retaining Wall Repairs
• Electrical Panel Upgrade at Vista Lobos
• Police Building - completed building condition assessment and Police Department space needs
• Developed a conceptual design for Sunset Center Portico 2024-2025 PRIORITIES
▪ Adopt and implement the Urban Forest Master Plan, which will kick off a 3-year “catch up” plan with the goal of resolving the backlog of Stump Removals and Tree Removals for dead, dying, or diseased trees. The backlog is anticipated to be reduced by 1/3 by the end of FY 24-25. A “catch up” plan will also be implemented to plant trees equal to the number of trees which fell in recent years’ storms, all the while continuing to replant 1-for-1 for non-storm removals. All progress on these efforts will be reported monthly at Forest & Beach Commission meetings. ▪ Establish an Underground Utility District utilizing PG&E Rule 20A funds. ▪ Develop adaptation strategies and launch public outreach for Coastal Engineering Study, Phase 2
▪ Continue North Dunes Restoration Improvements and Reporting Implement updates to the Monterey Regional StormWater Management Program and Reporting ▪ Construct the FY 24 Street Resurfacing Project, including 4 bid additives from the FY 22 paving project and the San Antonio/Ocean Avenues intersection reconstruction from the FY 23 concrete streets project
▪ Construct four Drainage System repairs and bottleneck improvements ▪ Complete construction of the MTNP – 3 Drainage Improvements for Stream Stability
▪ Construct the Electrical Panel Upgrade and EV Chargers at Vista Lobos Attachment 2
43 ▪ Implement beautification projects, notably the re-landscaping of the Ocean Avenue Medians
▪ Construct the City Hall Roof Replacement and Sunset Center Cottage Window Repairs
▪ Reconstruct the San Antonio Pathway
▪ Repair retaining walls at Sunset Center
▪ Remove and replace 167 trees and remove 200 stumps

BUDGET SUMMARY AND SERVICE IMPACTS

ADMINISTRATION
The Administration Division budget includes funding for Contract Services ($32,200), including uniforms and software contracts, training ($15,000), subscriptions ($5,000), and office supplies ($3,000). Line item increases reflect all field positions being filled.

Attachment 2
44 STREET MAINTENANCE
The Street Maintenance Division budget includes funding for Materials and Supplies ($71,000) for black and pick mutt mitts ($30,000), asphalt, sidewalk pavers, and traffic paint, Equipment and Vehicle Maintenance ($10,000), Fuel ($30,000), and Contract Services ($46,200) including reconstruction of the San Antonio Pathway, between Second and Fourth Avenues damaged by January storms and subject to FEMA reimbursement.

FACILITIES MAINTENANCE
The budget for the Facilities Maintenance Division includes funding for Contract Services ($571,762) including janitorial ($280,412), alarm monitoring, and generator services, HVAC, plumbing, roofing, and electrical repairs, and Materials & Supplies ($94,350) for doors, hardware, lighting, filters, plumbing, and first aid supplies.

Attachment 2
45 ENIVORNMENTAL COMPLIANCE
The Environmental Compliance Division budget includes funding for Contract Services ($292,800), including SB1383 implementation, recycling containers, and waste hauler oversight ($8,000), stormwater quality enforcement and watershed monitoring ($26,000).

Cleaning of storm drains, on-call environmental consultants, and climate change initiatives, and Permits and Licenses ($13,200) for stormwater and Air Resources District permits and MTNP invasive removals and North Dunes habitat monitoring services.

FORESTRY, PARKS AND BEACH
The Forestry, Parks, and Beach Division budget includes funding for Contract Services ($1,426,200), including tree contractors for removals, pruning, stump grinding, MTNP tree work, beautification projects ($25,000), landscape maintenance contract ($179,200), and materials and supplies ($82,200). Contract service budget increases reflect dead/unsafe tree removals and the backlog of stumps, all part of a 3-year tree maintenance catch-up plan.

Attachment 2
46 PUBLIC SAFETY
The Director of Public Safety/Police Chief manages the Public Safety Department and three distinct functions:

POLICE DEPARTMENT
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 (VIPs) that assists with daily clerical activities, errands, public outreach and special events and the City Community Emergency Response Team
(CERT) of volunteers ready to assist the community
during an emergency situation.

FIRE DEPARTMENT
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
Carmel Fire Ambulance provides advanced life support ambulance service to the residents of Carmel- by-the-Sea. Ambulance staffing includes paramedic-firefighters and emergency medical technician- firefighters to provide front line medical emergency response and allhazard response as a key component of the City’s public safety services. 2023-2024 INITIATIVES AND ACCOMPLISHMENTS
▪ Vacancies were filled to include, (1) Police Chief/Director of Public Safety, (1) Police Officer, and (2) Dispatchers.
▪ Began developing new contract language for Fire services with the City of Monterey. ▪ A new radio tower was purchased in conjunction with Monterey County and a grant through the Bay Area Urban Areas Security Initiative (UASI). The installation of the tower is in its final stages and should allow the police department the ability to transition to the digital network used by all county law enforcement agencies. ▪ A new Ambulance and Fire Engine were ordered to replace aging vehicles.

Attachment 2
47 ▪ The police department is working to convert a majority of its fleet to fully electric vehicles. The department purchased two fully electric vehicles, one administrative vehicle and an electric pick-up, which will be used for patrol operations. ▪ Volunteer groups like (VIPS) volunteers in policing and (CERT) Community Emergency Response Team were utilized during essential situations such as storms and flooding.
▪ In January 2024, in Conjunction with City Departments, including Fire, Public Works, Library, Forestry, VIP’s, CERT, and County Agencies including, Monterey County Department of Emergency Management and CalFire, began a planned series of educational forums for the public called Carmel Prepares. The series will include bi-annual training for our village on how to prepare for emergencies in our village. ▪ 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.

The VIP’s provide a variety of
services for the village, including
acting as ambassadors for the
village by helping to direct and
educate visitors. Our VIP’s play
an important role during
emergencies, including traffic control and operating and maintaining our Temporary Assistance Center.
▪ Our Carmel CERT (Community Emergency Response Team) was also integral to our safety in the community and was activated multiple times during the storm emergencies 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 selfreliance and the use of volunteers under professional direction will be necessary.

CERT provides community members with disaster related know-how. They need to be self-sufficient and support others until further help can arrive. 2024-2025 PRIORITIES
▪ Continue recruitments to fill additional Police Officer positions and be fully staffed. ▪ Continue work towards the completion of the Police Department Remodel Project. ▪ Upgrade outdated computer equipment in police vehicles and parking scooters. ▪ Increase efforts in retention of police officers through positive leadership and training in preparation for promotional advancement and growth.

Attachment 2
48 ▪ Increase transparency and education of the use and placement of the Flock camera system.

BUDGET SUMMARY AND SERVICE IMPACTS

POLICE DEPARTMENT
▪ The FY 24-25 Budget reflects a total decrease of $404,964 from the FY 23-24 Budget. ▪ The Department will continue to focus on patrol and response to public safety needs. ▪ The FY 24-25 Budget reflects an increase of $21,023 in services and supplies over FY 23-24. The increase is primarily the result of upgrading aging equipment, and an increased 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 maintenance costs.

Attachment 2
49 FIRE DEPARTMENT
▪ The FY 24-25 Budget reflects a total increase of $235,815 from the FY 23-24 Amended Budget.
▪ Contract services include fire services provided by the City of Monterey ($3,253,597). ▪ The FY 24-25 Budget also includes funding for fuel ($19,000) and vehicle maintenance ($40,000) as Carmel is responsible for vehicle repair and replacement under the contract with Monterey.

Attachment 2
50 CARMEL FIRE AMBULANCE
▪ The FY 24-25 Budget reflects a total decrease of $36,108 from the FY 23-24 Amended Budget.
▪ Overtime reflects an anticipated decrease from FY 23-24 Estimated Actual due to being fully staffed.
▪ Contract services include station
coverage by the City of Monterey as
needed ($85,000), ambulance billing
($48,000), Monterey Fire
management of Ambulance
personnel ($27,222). Other major
expenses include medical supplies
($48,150), fuel and vehicle
maintenance ($21,000 and $37,000
respectively), safety equipment
($17,500) and required training to
maintain credentials ($19,150).

Attachment 2
51 CAPITAL IMPROVEMENT PLAN (CIP)
Attachment 2
52 CAPITAL IMPROVEMENT PLAN
The FY 24-25 Adopted Budget includes $12.2 million for capital projects. This level of capital spending represents 29% of the total citywide budget of $43.5 million and requires the use of $12.1 million of the City’s unassigned fund balance. Sales tax revenue generated by Measure C, the City’s local sales tax, also plays a pivotal role in providing 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 below in the “FY 24-25 CIP Funding by Category” chart. Streets account for 32% of capital expense, with a proposed budget of $3.95 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 carryover for Police Department renovations. Also included in facilities are deferred facility maintenance items equaling $1.1 million that addresses Sunset Center North Electrical Lot Panel, Vista Lobos EV charging stations and Electrical Panel, City Hall roofing and Sunset Center Cottage Window Repairs.

Attachment 2
53 Drainage projects reach $1.6 million, 13% of the CIP budget, and include drainage system repairs and MTNP Streams 3 Drainage project. Included in this fiscal year’s budget is a $400,000 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 $570,000 for the projects listed in Table 1, FY 24-25 Adopted Vehicle and Equipment Acquisitions and Funding Source.

VEHICLE AND EQUIPMENT FUND
Table 1: FY 24-25 Adopted Vehicle and Equipment Acquisitions and Funding Source Funding for vehicles and equipment 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.

Ambulance
A contract to build the new ambulance and furnish equipment for $410,000 was executed last fiscal year. Delivery is anticipated in late 2025. Funding of $275,000 from the Vehicle and Equipment Fund and a $50,000 donation will be carried forward into FY 24-25 until the invoice is due. The estimated $85,000 balance for the ambulance will be programmed in FY 25-26.

Fire Engine
In October 2022, Council appropriated $880,000 and added the fire engine into the Fiscal Year (FY) 22-23 Capital Improvement Program (CIP). The Pierce Manufacturer Enforcer diesel fire engine has been ordered with delivery anticipated by late 2025. Although the purchase is complete, the project is being carried forward until delivery of the fire engine.

Public Works Dump Truck
In October 2022, Public Works’ 5-yard dump truck, a 1995 F700, broke down with a seized transmission, was towed to the Vista Lobos parking lot, and still remains there. Due to its Attachment 2
54 age and the unavailability of a new transmission, the truck needs to be replaced. In the interim, dump trucks have been rented periodically for certain tasks, but this approach is not sustainable.

A dump truck is needed year-round by all divisions in the Public Works Department. The dump truck is often used for hauling materials such as debris, wood chips, tree-rounds, logs, sand, gravel, decomposed granite, and asphalt.

The estimated cost for a 2024 or 2025 Ford F650 chassis (or similar) and a 5-yard dump bed is $150,000. Preliminary research has not yet resulted in a cost-effective electric vehicle alternative, but research will continue. With proper maintenance, a new truck should have a life expectancy of another 20+ years.

Police Electric Vehicle (EV) Patrol Vehicle
The Police EV Patrol Vehicle will replace a gas-powered 2017 Dodge Charger that has reached the end of its useful life. This vehicle continues to have mechanical issues, which require increasingly expensive repairs, and it is no longer reliable for emergency response.

The estimated cost of $90,000 includes the purchase of the EV and outfitting it for Police use. Grants from Central Coast Community Energy (3CE) will be pursued for all new EVs.

While the amount of any potential grants is unknown at this time, staff estimates that up to $15,000 in rebates or incentives may be funded by 3CE. The existing gas-powered vehicle will ultimately be sold pursuant to the City’s surplus equipment policies.

Police Radios Lease (Years 4 of 6)
Twenty-two (22) radios were purchased in 2021 with a payment schedule of $30,000 per year for six years, with funding from the Vehicle and Equipment Fund.

Council Chambers AV Upgrade
In 2017, the Council Chambers' Audio Visual (A/V) system was upgraded from standard to high definition. However, some of the equipment has reached the end of its useful life, and IT staff and vendors have determined that it needs to be replaced to be functional.

Upgrades are crucial to ensure smooth facilitation of hybrid meetings, accommodating both in-person and remote participation, especially via Zoom. Reliable audio and video systems are essential for seamless remote engagement and comprehensive meeting recordings.

Therefore, allocating resources for timely A/V infrastructure upgrades aligns with modern communication demands and demonstrates the City’s commitment to inclusive civic engagement. The estimated cost is $70,000.

Core Networks
The existing Arista switches that connect our computer server locations together were purchased in November 2016 and have reached the end of their useful life. The manufacturer no longer provides updates or support for these switches. The budget for new core networks is $50,000.

Network Firewalls
Attachment 2
55 Purchased in April 2017, the existing network firewalls, which protect the City from costly and disruptive cyber attacks have reached the end of their useful life and must be replaced as soon as possible. The budget for new network firewalls is $180,000.

CAPITAL PROJECTS FUND
Table 2: FY 24-25 Capital Projects and Funding Source
Attachment 2
56 STREETS
Paving Project : Conglomerate Paving Project FY 24-25
Annual Paving Project, FY 23-24: In April 2023, Council adopted a list of streets to be included in the FY 23-24 Annual Paving Project. The City’s annual Maintenance of Effort funding ($674,000 for FY 24-25) leverages external funds via TAMC from Measure X, Gas Tax, SB 1 - the Road Maintenance and Rehabilitation Account (RMRHA), and the Regional Surface Transportation Program (RSTIP). This project includes 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 treatment on 21 road segments predominately in residential neighborhoods, and replacing broken sidewalks with permeable pavers along five road segments in the downtown area.

All of these improvements, which have a construction cost estimate of $1.68 million, will be included in the Conglomerate Paving Project for FY 2024-25. However, several of the most expensive roadways may be included in the construction bid documents as additive bids and awarded if sufficient funding is available upon receiving the bid proposals.

Annual Paving Project, FY 21-22: Construction of this
Project is substantially complete. This project included paving overlays along Junipero Street, between Third
and Fourth Avenues, at the Junipero-Camino del Monte
intersection, and along Santa Fe Street between Fifth
and Sixth and Avenues. Also, the City’s first application of a micro-surfacing pavement treatment was completed
along Junipero Street, between Fourth and Ocean
Avenues, and along San Carlos Street, between Eighth
and Thirteenth Avenues. Four large downtown sidewalk
repairs were also completed. No budget remains from
this project.

Due to higher than anticipated construction bids
received for this Annual Paving Project for FY 21-22,
four additive bid items were not awarded for the
construction contract. The bid items were for paving
overlays along San Antonio Avenue, between Fourth and Ocean Avenues, San Antonio, between Ocean and Eighth Avenues, Monte Verde Street, between Fourth and Ocean Avenues, and along Torres Street, from Third to Fifth Avenues. All four of these bid additives, which have a construction cost estimate of $835,000, will be merged into the Conglomerate Paving Project FY 24-25.

Attachment 2
57 Concrete Street Repairs, FY 22-23: The design of this project is complete and “shovel ready” for construction; however, the construction cost estimate is nearly $3 million. Therefore, the majority of this project will be shelved until future capital funding becomes available. The project includes repairs and resurfacing of concrete intersections at Ocean-San Antonio, San Carlos-Fifth, San Carlos- Sixth, and ADA ramps and bulb out improvements at the Junipero-Seventh intersection. Also, structural repairs and resurfacing are included along Ocean Avenue, between Monte Verde and San Antonio, as well as the three intermittent side streets, up to the sidewalks, on both sides of Ocean Avenue. In addition, the project includes repairs and resurfacing of San Carlos Street between Fifth and Sixth Avenues.

The project balance of $792,000 is being reallocated into the Conglomerate Paving Project for FY 24-25. Only one portion of this project will be included in the Conglomerate Paving Project – Reconstruction of the San Antonio-Ocean Avenue intersection – which has a cost estimate of $293,000.

San Antonio Pathway Reconstruction
The San Antonio Avenue Pathway, located on the west side between Second and Fourth Avenues, was damaged by winter storms in early 2023. FEMA funding was promptly applied for reconstruction costs, but this effort was not successful.

Funded out of the Public Works/Streets and Forestry operating budgets for FY 23-24, a structural engineering firm designed the repairs to restore the pathway. The design process revealed that the original construction was deficient in that while the original buried concrete piers were fine, the wooden lagging supporting the pathway did not accommodate proper drainage, and the wooden posts supporting the grape stake fencing were not properly connected to the piers. Consequently, stormwater traveled along the west edge of the fencing, rotting the bottom of the posts, which resulted in the fence falling down.

The repair involves excavating around 44 concrete piers, constructing concrete pier caps to support new column posts, replacing the wood lagging, installing a drainage facility, restoring the Pathway, and installing grape stake fence to match the original fence. The FY 24-25 budget of $550,000 will cover the cost of construction and construction management.

Sunset Center Retaining Wall Repairs
In FY 23-24, $40,000 was allocated to the project to prepare structural engineering evaluations and repair plans for deteriorated walls surrounding Sunset Center. The design was completed for five retaining walls. In the north lot, a 100-foot long, Carmel stone wall along Eighth 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 a rotted wooden wall on top of a granite retaining wall. These and other walls require various structural repairs, restoration treatments, and replacement of fencing and railings. The FY 24-25 budget for construction and project management oversight is $550,000.

Attachment 2
58 Lincoln/Fourth Trestle Bridge Assessment
Originally built in the 1930s, the Lincoln Street/Fourth Avenue wooden trestle bridge was last formally inspected in 1998 when the footbridge was modified to provide parking for two homes adjacent to the bridge. Since then, Public Works crews have made numerous repairs to damaged boards, posts, and railings. Currently, there are some rotten deck boards, loose posts, and noticeable settling of concrete pier blocks on the east side of the bridge.

This project consists of hiring a structural engineering firm to assess the condition of the bridge, identify needed repairs and their urgency, and prepare cost estimates. The budget is $40,000. Depending on the condition findings, the design plans, CEQA review, and construction of the repairs would be programmed in subsequent fiscal year CIP budgets.

DRAINAGE
Mission Trail Nature Preserve 3 Stream/Drainage Projects This carry-over project consists of the first three of eight stream restoration and drainage improvements recommended in the 2019 MTNP Stream Stability Study. Acquisition of environmental permits from the U.S. Army Corps of Engineers, California Department of Fish and Wildlife Service, and Water Quality Control Board delayed the project for one year. The remaining funding of approximately $60,000 will be carried over into FY 24-25 for construction.

Construction includes three projects: 1) Drainage improvements along the Doolittle Trail, 2) swale reconstruction on the Willow Trail: and 3) an elevated boardwalk on the Willow Trail. A construction contract was awarded in May 2024 in the amount of $394,380.

Funding is available from a $178,000 California State Parks Per Capita Grant, the remaining balance of $163,169 from the FY 23-24 CIP Contingency Fund account, and $67,599 from FY 24-25 CIP funds. Construction is scheduled to be completed by late 2024.

Drainage System Repairs
The 2023 City-wide Drainage Master Plan Update identified numerous spot repairs needed for our existing underground storm drainpipes, as well as reconfigurations to eliminate significant "bottlenecks" in the drainage system. The Master Plan divided these repairs into 6 high priority repairs valued at $3.7M, 9 medium priority improvements at $7.7M, and 8 low priority projects at $3.3M. This Project, and subsequent projects programmed in the 5- year CIP, are intended to address these high priority issues.

In July 2023, Neill Engineers was issued a $159,100 Amendment to their Professional Services Agreement to design four of these high priority drainage system repairs at: 1) Eleventh Avenue (Carmelo to San Antonio Streets), 2) along Lincoln Street, from First to Second Avenues, and along Second Avenue, from Lincoln to Monte Verde Streets, 3) along Santa Fe Street from Eighth Avenue south to the MTNP outfall, and 4) a new headwall at Acacia Way/Flanders Way. The design plans are substantially complete, as are the required Attachment 2
59 CEQA documents for two locations, and the acquisition of one small drainage easement is in progress.

The remaining FY 23-24 funding of approximately $414,000 will be carried over into FY 24-

25. However, the revised construction cost for all four drainage projects is $1.052M, and supplemental funding of $638,000 is required to complete this project.

FACILITIES
Police Building Project
This is a carry-over project advancing
approximately $2.6M from the FY 23-24 CIP
Budget. In 2023, Council formed an Ad Hoc
Committee and awarded a $300,000 Professional
Services Agreement to an architectural firm. In
FY 23-24, the architectural team and their
engineering consultants prepared a Condition
Assessment Report of the Police Building which is
available on the City’s website. The architect also
developed a Police space programming needs
assessment to accommodate modern police
operations and standards.

In January 2024, the results of these tasks were
discussed with Council and the community. As
part of these discussions, Council considered
advancing the project only into the “schematic
design phase”(concept design) to obtain more
information regarding several project alternatives. These alternatives included: 1) significantly renovating the Police/Public Works building at the existing site; 2) Completely reconstructing the building at the existing site, and 3) Constructing a new Police Building at a different site and subsequently renovating and repurposing the existing building.

Prior to deciding whether or not to advance the project into schematic design, Council held a series of public meetings to solicit public input, and tours were conducted of the Carmel station and a new police station in Salinas.

Throughout this major project, a number of urgent safety repairs have already been completed in the Police Building, including electrical panels, steel doors, security systems, lighting, evidence lockers, dispatch room renovation, and others. These repairs were funded as part of this CIP project.

The FY 23-24 project balance of approximately $2.6M which is being carried over into FY 24-25 will cover remaining costs for schematic design, and potentially commencing design development of a selected alternative. Funding will also be earmarked to continue with a Attachment 2
60 consultant project management firm, and to continue making necessary safety repairs in the building. Additional public outreach will continue throughout FY 24-25.

ADA Upgrades, Year 7
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 improve access to the disabled. Last year, the City increased its annual allocation from $15,000 to $20,000 to continue to demonstrate good faith efforts to implement these improvements and to reflect higher costs due to inflation.

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 ADA-compliant railings, drinking fountains, restroom facilities, and signage.

Norton Court Garage Security Access System
The Norton Court parking garage access control system provides security for the underground parking garage. The outdated system no longer has the ability to program new access cards and is in disrepair. The new system will have the ability to be programmed by staff, rather than only by the vendor, and includes replacing two card readers at the pedestrian access points into the garage. The cost estimate is $15,000.

Sunset Center – North Lot Electrical Panel
In July 2023, Council awarded a Professional Services Agreement to an electrical engineering consultant for three projects, including this project for a fee of $18,240. Based on the 60% design plans and consultations with PG&E and Sunset Center, this project will allow the City to install additional EV charging stations to cover the entire west wall of the parking lot.

A two-pronged approach is being pursued. First, the existing, undersized electric panel along the Eighth Avenue ramp will be relocated down into the parking lot and rebuilt. This relocated panel will contain a new commercial service meter for the parking lot lights and a separate meter for the existing and future EV chargers. A new PG&E transformer, which will be installed by PG&E at no cost to the City, will provide power to all of the EV charging stations at discounted energy rates.

This project was initially funded at $100,000 in the FY 23-24 CIP, and the remaining funds will be rolled over into the FY 24-25 CIP. It is anticipated that 3CE will provide a rebate or other incentives for EV charging stations, but for an amount currently unknown.

Vista Lobos - 3 EV Charging Stations and Building Electrical Panel This is a follow-on project to the $75,000 Electrical Panel Assessments Project which was funded and completed in FY 23-24.

Attachment 2
61 In July 2023, Council awarded a Professional Services Agreement to an electrical engineering consultant for three projects, including the design of this project, for a fee of $24,110. The design is currently 90% complete. This “new” $400,000 project for FY 24-25 will cover the cost for construction of a new electrical system to allow for the expansion of three more EV charging stations along the south wall of the Vista Lobos parking lot, tying into a new transformer to be set by PG&E at no cost to the City. Funding will also cover the cost to reconstruct and upsize the electrical service at a new electrical panel located on the south wall of the Vista Lobos building.

One of the three new EV stations will be high capacity to charge the City’s electric street sweeper. The other stations will be available to the public. Rebates from 3CE are anticipated to partially cover the cost of the EV charging stations. Staff anticipates up to $60,000 from 3CE, but the actual amount is unknown at this time.

Facility Renovation Projects
Two carry-over facility renovation projects remain in the Capital Improvement Plan: The City Hall Roof Replacement Project and the Sunset Center Cottage Window Repairs Project.
▪ City Hall Roof Replacement: The City Hall roof was last replaced in 1984 and is 16 years past its warranty. Several roof leaks have been repaired by contractors and staff over the past few years as the roof progressively deteriorates. Contract documents for this project were extracted from a larger, bundled facilities renovation project which resulted in very high bids which were subsequently rejected by Council. This “shovel ready” project is anticipated to be constructed by Fall 2024.

The cost estimate has increased to $350,000, and supplemental funding is being programmed to cover the construction shortfall in FY 24-25. ▪ Sunset Center Cottage Window Repairs: The Cottage Window Repairs will be advertised for bids following the City Hall Roof Replacement. Contract documents for this project have also been extracted from the larger facility renovation project.

Unlike the original bidding documents in which all work had to be done at the jobsite, this time, the contractor will have the option of physically removing affected windows, performing hazardous materials remediation, wood framing repairs, and painting at their own shop, and replacing them back at the site. The cost estimate has increased to $200,000, and supplemental funding is being programmed to cover the construction shortfall in FY 24-25.

FOREST, PARKS AND BEACH
Scenic Pathway Hardscape Renovations
In FY 23-24, the City appropriated $100,000, and City support group Carmel Cares committed to matching these funds, to further improve the Scenic Pathway. City expenses Attachment 2
62 to date from this fund in FY 23-24 has been minimal and include additional lumber and hardware for barrier rail and pathway widening improvements. All remaining funds will be carried over into FY 24-25.

Proposed additional improvements along the pathway include: signage, irrigation repairs, pathway trim edging, decomposed granite repairs, barrier rail extensions, and other hardscape amenities.

ENVIRONMENTAL
Coastal Engineering Study, Phase II
This study was identified in the City Council-adopted 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. All five primary tasks in Phase I are complete, including the Shoreline Infrastructure Condition Evaluation, Shoreline and Beach Exposure Modeling, Coastal Hazard and Sea Level Rise Vulnerability Assessment, and Policy Review. Key findings were presented to the Forest and Beach Commission, Climate Committee, and City Council in 2023 and 2024.

Phase II is a carry-over project that is now underway, and will focus on hazards policy review and revisions, public outreach and engagement, socio-economic analysis, adaptation strategies, pathway development, and development of the City’s Local Coastal Program Amendment. This project is fully funded under a recently-executed, $500,000 Local Coastal Program Grant Agreement awarded by the California Coastal Commission.

Shoreline Infrastructure Repairs
The first phase of the Coastal Engineering Study included a Shoreline Infrastructure Condition Assessment. The Assessment concluded that 2-4 existing seawalls need repairs, with the highest priority repair being the Fourth Avenue Outfall. Eleven coastal access stairs were assessed with 9 stairs
needing repairs, and two stairs are
currently closed due to structural
damage resulting from winter storms.

In addition, of the 6 rock revetments,
4 are high priority in need of repair;
one in its entirety and others in some
portions. 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 5-Year CIP.

Attachment 2
63 This Shoreline Infrastructure Repair Project will initiate the engineering and design of the highest priority repairs, as well as repairing the remaining damaged beach access stairs with similar materials as a “maintenance project”. This approach is expected to streamline the regulatory approval process. This initial project will also allow the City to better estimate costs and phasing to complete future shoreline infrastructure repairs. A Request for Proposal has been prepared to retain a consultant with expertise in environmental permitting, coastal and structural engineering, and cost estimating.

Project funding for FY 23-24 was initially set at $250,000. An additional $100,000 previously budgeted for the Coastal Engineering Study, Phase 2 was reallocated to the Shoreline Infrastructure Project, and a FEMA grant of approximately $50,000 was received for beach stair repairs. All funds will be carried over into FY 24-25.

Shoreline Wall- Fourth Avenue Outfall
The Fourth Avenue Outfall is located on Carmel Beach west of the North Dunes Habitat Restoration site and north of Ocean Avenue. This seawall was identified as the highest priority seawall repair in the 2023 Carmel Beach Coastal Infrastructure Condition Assessment Report, prepared as part of the Coastal Engineering Study, Phase I. The seawall foundation is partially undermined, there are a number of significant structural cracks, and reinforcing steel bars have been exposed by spalling concrete and are corroded.

The seawall is at the end of its service life and poses a potential risk to beach users, particularly during a major storm or a seismic event. The Condition Assessment Report recommended complete reconstruction of the seawall including the drainage box culvert outfall.

This is a new FY 24-25 project with an initial budget of $250,000 for engineering design and environmental permitting. For efficiency and cost-effectiveness, the design and environmental review are proposed to be completed in conjunction with the Shoreline Infrastructure Repairs Project described above. Construction of the project is currently estimated at $900,000 and is included in the 5-Year CIP for FY 25-26.

PG&E Rule 20A Undergrounding
In 1967, in response to local government interest in enhancing the aesthetics of their communities, the California Public Utilities Commission (CPUC) established electric tariff Rule 20 which includes various programs for undergrounding existing overhead utility lines. Rule 20A is the primary program for municipalities to underground utilities in urban areas that meet certain criteria. Since Rule 20A funding is primarily from ratepayer electric bills, proposed undergrounding projects must provide a benefit to the public at large.

Currently, the City is inactive in the program but has a work credit balance of $667,639. As the Rule 20A program phases out from aesthetic-based projects to wildfire risk-based programs, a portion of the City’s credits have already been reallocated to shovel ready projects in other cities. In order to freeze and retain the remaining credits, the City would need to formally establish an Underground Utility District(s) by December 31, 2024.

Attachment 2
64 Two potential undergrounding projects/districts have been proposed by staff and considered by the City Council as follows:
▪ North side of Ocean Avenue, from San Antonio Avenue, extending 800 feet west to the end of the Del Mar Parking Lot.
▪ In the Mission Trails Nature Preserve, along the west side of the Willow Trail extending 1,100 feet south from the entrance gate at Eleventh Avenue.

Both districts would ultimately result in
the removal of up to 10 power poles and
associated overhead electric, telephone,
and cable tv lines. Both districts also
would require 7 to 8 property owners to
convert their homes from overhead to
underground services at the time the
utility lines are undergrounded. Upon
Council’s adoption of a Resolution
selecting a District(s), a formal
application is submitted to PG&E to
commence the design, utility
coordination, and easements,
environmental permits, and funding agreement processes. Currently, PG&E estimates a 10-year lead time until actual construction begins.

This has long been a carry-over project as funds have accumulated over many years. The project is listed in the FY 24-25 CIP since adoption of the Underground Utility District for Rule 20A in this fiscal year would upgrade the City’s program from inactive to active status – the first key milestone for this long-range project.

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. The Master Plan was completed in mid-2023 and presented to the Library Board of Trustees and City Council in early 2024.

The Harrison Memorial Library is 96 years old, and the Park Branch Library was last significantly remodeled 35 years ago. Phases II-IV will encompass community outreach, conceptual designs, and construction documents for the renovation of the first building – tentatively the Harrison Memorial Library. Renovations to the facilities are intended to ensure that both library facilities are able to continue to serve the community well into the future. A request for proposals (RFP) is being prepared to retain an architect to design the Attachment 2
65 proposed renovations. The Carmel Public Library Foundation will be embarking on a significant fundraising campaign to support proposed renovations to both library buildings.

In FY 23-24, $100,000 was allocated for this Project and will be carried over into the FY 24- 25 CIP.

CIP PLANNING
CIP Contingency Fund
In FY 23-24, a $500,000 Contingency Fund was established. This account was used during the fiscal year as follows: $262,779 to award the construction contract for the FY 21/22 Paving Project, $163,169 to award the contract for the MTNP 3 Stream/Drainage Project, $42,378 to award the contract for the MTNP Tank and Pump House Removal and Well Decommissioning Project, $17,860 for the Urban Forest Master Plan to cover unanticipated funding shortfalls from the CalFire Grant, and final payment of $13,814 for the electric Street Sweeper following the 3CE rebate. This was the first year for this contingency fund account and has proven to be successful in completing the above-named projects.

Similarly, for FY 24-25, $400,000 will be budgeted to cover any shortfalls to award construction contracts or to close out projects. Any balance should be carried over into FY 25-26.

Attachment 2
66 KEY PROJECTS AND FUNDING NEEDS FOR YEARS 2 THROUGH 5 OF THE

CAPITAL IMPROVEMENT PLAN (CIP)
The 5-year CIP has been updated and is available on the City’s website. Although only the first year (Fiscal Year 24-25) is funded as part of this Adopted Budget, the remaining four years serve as an advance planning tool to identify anticipated future projects.

The 5-year CIP is a “snapshot” in time of anticipated needs for future infrastructure revitalization funding in coming years. As a dynamic planning document, the CIP for years 2 through 5 is subject to change as updated information becomes available. A multi-year plan also accommodates scheduling larger projects into multiple years to allow more projects to be underway concurrently, and to allocate construction funding only when those funds are needed.

It should be noted that the needs for infrastructure renewal and facility repairs far exceed the anticipated revenue over the subsequent four years as well.

The following are key projects and preliminary budget estimates, by asset category, for years 2 through 5 of the CIP:

Drainage: Includes highest priority drainage repairs and upsizing for 20-year storm events as identified in the 2023 Storm Drain Master Plan Update, bottleneck reconfigurations, and CDS reconstruction = $3.33M.

Streets: Annual paving Maintenance of Effort (MOE) and Transportation Agency for Monterey County (TAMC) match funding for years 2 and 3 are earmarked for the FY 23 Concrete Street Repair Projects. For years 4 and 5, traditional paving overlays, microsurfacing treatments, slurry seals, sidewalk repairs, parking lot resurfacing, and a bicycle master plan are proposed = $4.1M City plus $1.7M external funds via TAMC.

Facilities: As a placeholder, a total allocation of $22M is included to cover final design and construction of a Police Building Project (whether a new station or renovation of the existing building) plus launching the design of the Public Works building renovations. This major project will obviously require a dedicated funding source once a project concept is approved, and these “plug in” numbers need to be adjusted as more information and scheduling becomes available.

Additional facility renovation projects include relocation and renovation of the Scout House wherein the sale of the existing parcel may offset the costs for renovation, critical repairs and to City Hall and the Fire Station, the Sunset Center Portico, repairs to park restrooms, and facility condition assessments, painting, and railing repairs = $25.9M.

Forestry Parks, and Beach: Design and construction of the remaining five (5) Mission Trail Nature Preserve (MTNP) stream stability projects, and construction of the MTNP Doolittle Bridge = $1.50M.

Attachment 2
67 Fleet and Equipment: Replace aging Police, Fire, and Public Works vehicles with Electric Vehicles where possible. Replace broken and outdated heavy equipment, including Streets Department asphalt patch truck, Forestry Department bucket truck and water truck, Police Department speed radar trailer and animal control
vehicle, and other vehicles and equipment nearing the
end of their useful lives. This category includes full
funding for the Police radios lease and the ambulance
purchase = $1.48M plus $0.12M 3CE rebates.

Environmental and Climate Change: Shoreline
infrastructure repairs, notably reconstruction of the
Fourth Avenue outfall/wall, as well repairs to
structurally-damaged beach access stairs and
revetments, and Climate Action Plan projects and
energy upgrade initiatives = $3.85M
IT: Equipment replacements, security upgrades,
Police records management system, and GIS
applications expansion = $0.58M.

Library: It is difficult to estimate costs for the library as major renovations proposed under the Library Master Plan are largely subject to donor funding. As a placeholder, for Years 2 through 5, the CIP assumes the design and construction of the first major renovation project with a cost to the City of $800,000, supplemented by significant private donations, = $0.8M plus donations of millions of dollars. (These “plug in” numbers will be adjusted as more information and scheduling becomes available.) Years 2 Through 5 Needs Summary
The total estimated investment of City funds identified for years 2 through 5 is $42M. This amount exceeds anticipated CIP fund revenues over those four years plus any ending fund balance that may be available in those future years. However, without proper investment, the condition of the City's infrastructure will decline and worsen, eventually requiring more costly repairs. Therefore, additional revenue sources should be considered.

Attachment 2
68 DEBT SERVICE
FUND 401
Attachment 2
69 DEBT SERVICE – FUND 401
Debt Service includes payments for the 2020 Refunding Lease Revenue Bonds. These payments total $519,100 as shown in Table 1, FY 24-25 Debt Service, below. 2020 Refunding Lease Revenue Bonds
On September 10, 2010, City Council approved issuance and sale of certificates to finance improvements and 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 Certificate of Participation (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 the pandemic on the City’s revenues. The 2020 Refunding Lease Revenue Bond of approximately $3.9 million matures on November 1, 2032. The City made its first principal payment in FY 23-24 after two years of interest only payments.

Funding Sources
General Fund revenue is the source of funding for debt service obligations. The General Fund (Fund 101) will transfer $519,100 to Debt Service (Fund 401) in FY 24-25 with approximately 72% of that going to the principal.

Attachment 2
70 OTHER FUNDS
Attachment 2
71 OTHER FUNDS OVERVIEW
The City uses what is known as a “fund” accounting structure, which house and track resources (i.e.: money) that are limited in their use by law or governing agency. The major governmental funds are the General Fund, Measure D and Capital Projects.

DISCRETIONARY FUNDS
The first set of funds listed below are “discretionary”, meaning there are no legal 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 financial policy recommends maintaining a 15% Reserve of the total amount, which the City will continue to do in FY 24-25.

Hostelry Fund (102)
This fund is used to house the Transient Occupancy Tax (TOT) which is collected 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 TOT revenues, which the City will continue to do in FY 24-25.

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 Attachment 2
72 projects and general City services. Fund 206 is used to house revenue from these tax sources.

RESTRICTED FUNDS
The next set of funds are “restricted”, meaning 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 house revenues collected in accordance with California Streets and Highway Code.

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 houses dollars for expenditures for eligible transportation safety projects.

COPS Grant
This fund houses dollars for 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 house dollars for activities associated with parking in-lieu fees as prescribed by Carmel Municipal Code Section 17.38.040.

Asset Seizure (Fund 205)
This fund houses dollars for expenditures related to asset seizures.

CAPITAL PROJECTS FUND
Capital Projects (Fund 301)
This fund houses resources utilized, committed, assigned or restricted for capital projects.

DEBT SERVICE FUND
Debt Service (Fund 401)
This fund houses dollars related to the repayment of the Certificate of Participation, Pension Obligation Bond and capital lease obligations.

Attachment 2
73 INTERNAL SERVICE FUNDS
Workers Compensation (Fund 501)
This fund houses monies meant for workers’ compensation insurance provided to departments on a cost reimbursement basis.

Other Post-Employment Benefits (OPEB) Liability Reserve Fund This fund houses dollars for other post-employment benefits.

Vehicle and Equipment Replacement Fund
This fund is to set aside to house financial resources for future purchases of replacement equipment essential to the operations of the City.

AGENCY FUNDS
Refundable Deposits
This fund houses monies received that are unearned at the time of acquisition, and required to be returned by the City unless they are earned.

Attachment 2
74 PROJECTED FUND BALANCES
Attachment 2
75 PROJECTED FUND BALANCES AS OF JUNE 30, 2024
Attachment 2
76 PROJECTED FUND BALANCES AS OF JUNE 30, 2025
Attachment 2
77 FINANCIAL POLICIES
Attachment 2
78 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 revenue sources meet or exceed expected revenue use. Available funding sources shall be at least equal to recommended appropriations. As a general rule, the year‐end Undesignated General Fund Balance should only be used for one-time costs, not to fund ongoing operations such as full time employees.

As set forth 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.

Attachment 2
79 FINANCIAL POLICIES AND PROCEDURES
The City of Carmel‐by‐the‐Sea has strong financial policies, based on City Council direction, which guide staff to carry out 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; and, • Communication to residents and customers on how the community goals are being addressed.

CAPITAL BUDGET POLICY
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 5-year 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 CIP 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 Attachment 2
80 improvement program. Prior to ratification of the capital budget for the forthcoming year by the City Council, the Planning Commission shall review the capital improvement plan and shall advise the City Council as to its recommendations regarding the proposed capital projects conformity with the City’s General Plan in accordance with the Government Code.

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 re-budgeted to the next fiscal year and subsequently approved by the City Council. All re-budgeted capital projects should be so noted in the proposed budget
Attachment 2
81 OPERATING MANAGEMENT POLICY
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.

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 is meant to supplement the annual budget.

Attachment 2
82 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.

3. 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.

4. Technology equipment replacement reserves will be maintained sufficient to repair covered equipment and for replacement at the end of its useful life.

5. 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.

6. 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.

7. Reserves shall be used only for established purposes.

8. Depleted reserves shall be restored as soon as possible.

9. A minimum level for each of the reserve funds shall be established (see chart below).

10. The City shall maintain reserves required by law, ordinance and/or bond covenants.

DEBT POLICY
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 long‐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.

Attachment 2
83 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 financing 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 non-recurring 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.
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 Attachment 2
84 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 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 POLICY
The City will maintain adequate cash availability and yield on invested idle funds while insuring that invested monies are protected. Municipal monies not required for immediate expenditure will be invested. The Carmel Municipal Code requires the City Administrator Attachment 2
85 to prepare investment policies and guidelines for adoption by the City Council. The adopted investment policy follows.

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.

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.

Attachment 2
86 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).

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 Attachment 2
87 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.

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 Attachment 2
88 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.

Attachment 2
89 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.

Attachment 2
City of Carmel-by-the-Sea
FY24-25 Recommended Budget Questions and Responses
The following questions are broken into two sections. Section 1 (Questions 1 through 38) represent those received at the May 7th, 2024 City Council Meeting from Councilmembers and the general public. Also included in Section 1, are questions received via email, phone, or other means of communication leading up to the May 21st, 2024 budget workshop. Section 2 (Questions 39 through 57), include questions received at the May 21st, 2024 budget workshop, and in the period of time since then leading up to the budget adoption hearing on June 4th, 2024. The questions are answered in the order that they were received during these timeframes.

SECTION 1

1. Question/Comment: Every one of our boxes has a telephone and communications. It seems when it is all added up it gets pretty expensive. Is there a way to streamline the telephone and communications category? Response: The short answer is, yes, if the Council is comfortable assuming more risk to the City’s IT infrastructure. Our communications budget has grown in the past to add resiliency and redundancy to our network infrastructure, which has made the system more guarded against threats. On average, hackers are ransoming between 5%-10% of a City’s general fund to restore data and confidential information from hacked city sites.

2. Question/Comment: We have a lot of money in the bank. It seems like banks should be happy to have us as customers and they shouldn’t be charging us fees.

I’d like to look into that.

Response: The bank fees that are included in the Recommended Budget are specific to the credit card processing fees charged at the City’s Administration counter. Administration must collect the 2.5% directly from the customer when the credit card is processed. The credit card fees represented as “bank fees” in the budget are offset by the 2.5% processing fee revenue charged at the Administration counter. In other words, this bank fee is effectively a pass-through expense that is offset directly by revenue.

3. Question/Comment: I’d like to look into City credit cards to make sure we are getting points or money back, whatever it takes to take advantage of those banking opportunities.

Page 1 of 27 ends

06.04.2024
Attachment 3
City of Carmel-by-the-Sea
FY24-25 Recommended Budget Questions and Responses
Response: The City currently receives a rebate on its credit card purchases.

The City is enrolled in the State’s CAL-Card program, which is at no cost to the City (no fees). The CAL-Card program pays out quarterly rebates at

1.35%, that on average is $500 per quarter, which is recognized as revenue in the budget.

4. Question/Comment: The recruiting fees: I know we need to have recruiters but is there a possibility we could get that cost lower? Response: The recruitment fee for the FY 24-25 budget includes the assumption that the City will be utilizing a secondary executive recruitment firm to help search for a new Public Works Director. These types of recruitments are typically in the $25K range, and drive up the overall recruitment costs. If Council desired, the budget for recruitment could be reduced marginally by utilizing our regular contract support less from Traffic Patterns (recruitment company). This would result in fewer recruitments being undertaken to bring on general employees such as planners, maintenance workers, librarians, forestry staff.

5. Question/Comment: I would consider raising the rate we spend on advertising and legal notice. There has been an outcry for more communication through the newspapers and different things and maybe we could bump that number up so we can take up a continuous ad in the papers or whatever it takes to make sure the citizens of the community know what is happening.

Response: The City Council, Boards, and Commissions utilize the legal section of The Pine Cone for all required public and legal notices, and routinely publish notices of special meetings/workshops that are not legally required to be noticed in the newspaper. Staff will continue to do so for added transparency and public engagement. The Pine Cone does not enter into agreements with cities to reduce legal notice costs, however, they have maintained the same prices for 9-10 years without any increases, and they offer a slight discount for multi-week notices. The City could utilize other regional newspapers to print duplicates of the notices that are going out now, but that may not reach residents. Staff will look at expanding communication tools that may be underutilized at the time such as the Friday Letter, the city’s email listserv for various topics, the City website and others.

Page 2 of 27 ends

06.04.2024
Attachment 3
City of Carmel-by-the-Sea
FY24-25 Recommended Budget Questions and Responses

6. Question/Comment: Under completed projects, it lists Engineering Design and Environmental Review for the San Antonio Pathway. Under Priorities FY24-25, it says we can construct the pathway. When is that actually going to happen?
Response: We are currently at 90% design for this project. Assuming the CIP budget for the San Antonio Pathway is approved, we anticipate going out to bid for the work by July. So, the project could be under construction as early as this Fall.

7. Question/Comment: Do we have any projections, out several decades, of what our pension costs with this level of staffing will be? I ask that we somehow make a projection to see where we are out in the future.

Response: Based on the current data available through CalPERS, the City can project its UAL through FY29-30. The projections assume staffing at

80.0 FTE and 6.8% return on investment for FY23-24 forward. The projected UAL employer contributions are estimated to grow on average 8% fiscal year over fiscal year. To note, FY23-24 staffing is currently 81.0 FTE. If the projections hold, it is anticipated that the contributions in FY 29/30 will be approximately $3.2M. See Exhibit A for a chart that outlines the City’s UAL contributions from FY20-21 and projecting FY25-26 through FY29-30.

8. Question/Comment: Recommended Budget Book, Pages 5-6, Chip talked about the Revenue and sources and the possible need to adopt a position of significantly reducing costs in future fiscal years. And yet the proposed budget, you’re burning through the $12M surplus. To make the budget balance, you are going to eat all of that up. I don’t think that is prudent. Coming down the pipe you have two big projects on board with the Police Station and Public Works that you are proposing and some of the $12M surplus could be designated towards those things. Without the surplus, you will need to do bond measures to generate funds to do those expenditures.

Response: As of June 30, 2023, the City has an Unassigned Fund Balance of $15.5M. The Unassigned Fund Balance is funds that are neither Restricted,

Page 3 of 27 ends

06.04.2024
Attachment 3
City of Carmel-by-the-Sea
FY24-25 Recommended Budget Questions and Responses
Reserved, Committed, nor Assigned. The FY 24-25 Recommended Budget has proposed tapping into the Unassigned Fund Balance to the tune of $12.4M in order to support the $12.6M in budgeted capital expenditures.

There is no plan to tap into any of the Reserve or Restricted Funds.

9. Question/Comment: It always frustrates me to look at CalPERS and hear about the unfunded liabilities and I don’t know what to make of it; where that all fits; how much of it is current employees, retired people, previous employees, and so forth. I think this is a big question and needs better definition.

Response: As part of the City’s Annual Comprehensive Financial Report (ACFR), the City provides a valuation of its California Public Employees’ Retirement System (CalPERS) unfunded accrued liability (UAL), measured as of the prior year. You can find the FY22-23 ACFR as well as prior years’ reporting on the City’s website. https://ci.carmel.ca.us/budget Annually, the City makes a payment to CalPERS that consists of (1) the annual cost for current employees (“normal cost”) and (2) the unfunded accrued liability (UAL). The UAL is the actuarial liability less the actuarial value of the assets. In other words, it is the difference between what CalPERS needs in order to pay for retirement benefits when people retire as compared to the amount that CalPERS currently has on hand to pay for the estimated costs of the retirement benefits. As such, the City’s UAL can vary each year based on staffing levels and the pension’s investment performance.

As shown here, the City’s most recent UAL evaluation was measured on June 30, 2022, and was estimated at $28.2 million:

Page 4 of 27 ends

06.04.2024
Attachment 3
City of Carmel-by-the-Sea
FY24-25 Recommended Budget Questions and Responses

10.Question/Comment: With respect to raising new revenue sources, I’ve heard talk about the TOT and bumping that up. We are currently at 10%. Pebble Beach and Monterey are at 12%. If we went to 12%, that would be a 20% bump which would generate $1.5M without putting us out of line with them. If you end up going that direction, it makes sense and is reasonable.

Response: At the May 7, 2024 City Council Meeting, Council voted not to pursue an increase to the City’s 10% transient occupancy tax rate at this time.

11.Question/Comment: TOT comes from the Hotels, and like Restaurant operations, not everybody pays their bills. So, within that TOT collection, are all hotels current, and if they aren’t, what steps do you take to get them current:
penalties, file lawsuits, etc.?
Response: Chapter 3.32, Transient Occupancy Tax, of the City’s Municipal Code lays out the timing of TOT collections, as well as the penalties and interest imposed on delinquent payments. See link below. https://www.codepublishing.com/CA/CarmelbytheSea/#!/html/Carmel03/Carm el0332.html
In short, TOT filings are due on or before the last day of the month following the close of the bi-monthly reporting period. Any operator who fails to pay timely is required to pay a 10% penalty of the amount of the tax, in addition to the amount of tax. If another 30 days pass without payment, a second penalty of 10% of the amount of the tax in addition to the amount of the tax and 10% penalty first imposed. Interest is also imposed from the date on which the remittance first became delinquent until paid.

Additional details for steps taken for Failure to Collect and Report Tax or Fraud can be found in the link above. At this time the City audits three hotels annually to ensure accurate TOT payments.

At this time, all hostelry operators are current on their TOT remittance.

Page 5 of 27 ends

06.04.2024
Attachment 3
City of Carmel-by-the-Sea
FY24-25 Recommended Budget Questions and Responses

12.Question/Comment: What is the City Attorney line item of $7K for annual performance evaluation, I don’t quite understand that so I would like some clarification on that.

Response: The City Council conducts a thorough performance evaluation of the City Attorney on an annual basis. This effort is led by an outside consultant rather than the City’s HR department to ensure the neutrality of the process.

13.Question/Comment: A $43M budget to me is not safe nor prudent. Virtually spending the whole $12M reserve is not fiscally smart. We must, like any household, live within our means. Distasteful as it is, we must run a tight ship.

Freeze wages and bonuses, other than contractually obligated increases. Take a hard look at the organizational chart and find places where you can eliminate department heads and combine job responsibilities. There are too many chiefs.

Response: The $12.4M use of Unassigned Fund Balance needed to fund the recommended capital projects does not impact the City’s reserve balances. In preparing the “Projected Fund Balances”, the City captures the reserve balances in the Estimated Fund Balance June 2025 columns. The City Fund Balance policy states “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”. Based upon B. Harary’s 5-year Capital Improvement Plan, the City’s costs are estimated to be $47.2M, making the 20% target reserve balance $9.45M. This is the same amount represented on the Projected Fund Balance ending June 30, 2025 chart in the Fund 301 Capital Projects line item. The City anticipates ending FY24-25 with $9.48M in Capital Project Reserves.

Page 6 of 27 ends

Carmel-by-the-Sea City CouncilJune 4, 2024

Carmel-by-the-Sea City Council
June 4, 2024