Carmel-by-the-Sea City Council
June 2, 2026

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL AGENDA
Contact: 831.620.2000 www.ci.carmel.ca.us
Mayor Dale Byrne
Councilmembers Jeff Baron, Hans Buder, Bob Delves, and
Alissandra Dramov
All meetings are held in the City Council Chambers
East Side of Monte Verde Street
Between Ocean and 7th Avenues
Regular Meeting
Tuesday, June 2, 2026
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 and enter the passcode. https://ci-carmel-ca-us.zoom.us/j/83138976374
Webinar ID: 831 3897 6374
Passcode: 862068
Dial in: (253) 215-8782

HOW TO OFFER PUBLIC COMMENT
The public may give public comment at this meeting in person, or use the Zoom teleconference module, provided that there is access to Zoom during the meeting. Zoom comments will be taken after the inperson 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.

CALL TO ORDER AND ROLL CALL

PLEDGE OF ALLEGIANCE

EXTRAORDINARY BUSINESS
A. Pride Month Proclamation
B. Monterey Airport District Presentation

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. While stating your name is optional, it helps to identify speakers in the meeting minutes. 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. Remote or in-person participants who do not comply with the requirements of the Brown Act will be muted.

ANNOUNCEMENTS
City Administrator Announcements
City Attorney Announcements
Councilmember Announcements

PUBLIC HEARINGS
1) Resolution 2026-035 Adopting the Fiscal Year 2026-2027 Annual Operating and Capital Budget, and provide staff direction on Budget Policy 2) Resolution 2026-036 Adopting the Fiscal Year 2026-2027 Appropriations Limit

ORDERS OF BUSINESS
Orders of Business are agenda items that require City Council discussion, debate, direction to staff, and/or action.
3) Resolution 2026-037, implementing an address identification system consistent with the requirements of the California Building Standards Code and adopting the Street Addressing Map identifying assigned property addresses citywide 4) Resolution 2026-038 approving a 3.04 percent rate increase to charges by the City's franchise hauler, GreenWaste Recovery, for collection of solid waste, recycling, and organics, effective July 1, 2026, and approving Amendment No. 5 to the MOU between ReGen Monterey and Member Agencies for Fiscal Year 2026/27 5) Consider Resolution 2026-039 Rejecting all Bids for the Project for Beach Access 12th Avenue Stairs Repair (Carmel Beach Coastal Protection and Access Improvement) BID 25-26-006 and request for direction
6) Resolution 2026-040 Calling for the November 3, 2026 General Municipal Election, Requesting Consolidation with the Monterey County Elections Department, and Establishing Procedures for Resolving a Tie Vote; and Resolution 2026-041 Establishing Regulations for Candidate Statements; and approving a Service Agreement for the Provision of Election Services by the County of Monterey Department of Elections
7) Resolution 2026-042 Submitting To The Qualified Electors Of The City Of CarmelBy-The-Sea A Measure To Adopt A New Two Percent Transient Occupancy Tax, In Addition To Existing Ten Percent Transient Occupancy Tax, And Approving The Form Of The Ordinance To Be Submitted To The Voters; Requesting The Monterey County Elections Department To Conduct The Election And Requesting Consolidation Of The General Municipal Election With The Statewide General Election To Be Held On November 3, 2026; Directing The City Attorney To Prepare An Impartial Analysis Concerning Such Measure; Authorizing The Drafting Of

Primary Arguments And Rebuttals Concerning Such Measure or, in the alternative, provide direction and Motion to approve Draft Primary Argument in support of Proposed Measure
8) Resolution 2026-043 ordering the submission to the qualified electors of the City of Carmel-by-the-Sea at the General Municipal Election to be held on November 3, 2026, a Measure increasing the City’s current Transactions and Use Tax rate from

1.5% to 1.875%, extending the duration of such Transactions and Use Tax so that it remains in effect until ended by voters of the City of Carmel-by-the-Sea, and approving the Ordinance to be submitted to the voters pursuant to Revenue and Taxation Code Section 7285.9; requesting the Monterey County elections department to conduct the Election and requesting consolidation of the General Municipal Election with the Statewide General Election to be held on November 3, 2026; directing the City Attorney to prepare an impartial analysis concerning such Measure; authorizing the drafting of primary arguments and rebuttals concerning such Measure; or, in the alternative, provide direction and Motion to approve proposed Primary Argument in support of ballot measure 9) Consider Resolution 2026-044 Approving First Amendment to Acting City Administrator At-Will Employment Agreement
RECESS
The City Council will take a 30-minute break around 6:30 p.m.

FUTURE AGENDA ITEMS

ADJOURNMENT
This agenda was posted at City Hall, Monte Verde Street between Ocean Avenue and 7th Avenue, Harrison Memorial Library, located on the NE corner of Ocean Avenue and Lincoln Street, the Carmel-bythe-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.

CORRESPONDENCE RECEIVED AFTER THE POSTING OF THE AGENDA Any correspondence or supplemental materials related to items on this agenda that are received after the agenda has been posted will be distributed to the City Council and made available for public review at City Hall (Monte Verde Street between Ocean and Seventh Avenues) during regular business hours.

Written comments emailed to the City Clerk will not be read aloud, but will be posted online with the related agenda at: https://carmelbytheseaca.portal.civicclerk.com/.

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).

PROCLAMATION

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RECOGNIZING JUNE 2026 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, Dale Byrne, Mayor of the City of Carmel-by-theSea, on behalf of the City Council and the citizens of Carmel hereby proclaim June 2026 as LGBTQ Pride Month.

IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day of June, 2026, in Carmel-by-the-Sea, California.
______________________________
Dale Byrne, Mayor

CITY OF CARMEL-BY-THE-SEA
City Council
Staff Report
June 2, 2026

PUBLIC HEARINGS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Jayme Fields, Finance Manager
APPROVED BY: Brandon Swanson, Acting City Administrator SUBJECT: Resolution 2026-035 Adopting the Fiscal Year 2026-2027 Annual Operating and Capital Budget, and provide staff direction on Budget Policy
RECOMMENDATION:

Adopt Resolution 2026-035 (Attachment 1) Adopting the Fiscal Year 2026-2027 Annual Operating and Capital Budget and provide direction to staff on Budget Policy.

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 (Attachment 2). The proposed budget, referred to as the Fiscal Year 2026-2027 (FY 26-27) Recommended Budget, of $41.9 million is submitted for Council’s consideration.

BACKGROUND
The City has continued its new approach to budgeting. It is being more aggressive with revenue estimates. It is being serious about identifying opportunities to trim operating expenses. It is taking seriously the policy goal set out for it, balancing operating costs against capital outlay. This is an effort that has gone into forming the 2026-2027 budget and an effort that will continue into the future.

The budget is a puzzle made up of three pieces: operating expenses, capital outlay and revenue. The City has identified a list of approximately $100 million of deferred maintenance. The Community and the City Council have made addressing this a priority, resulting in a 10-year plan to resolve the City’s deferred maintenance needs.

The budget reflects the first year of that plan and the rightsizing of the project management staff to do it.

In order to address the necessary capital outlay, the City must address the operating expenses piece of the puzzle. Administration is committed to fiscal discipline. Multiple meetings with department heads and transparent sharing with the Financial Stewardship Workgroup have resulted in meaningful spending cuts to help fund Capital Outlay. The City is seeking to maximize its impact with reduced resources.

But addressing operating expenses alone is not enough to finish the puzzle. Revenue is the missing piece. The City is utilizing informed, more aggressive forecasting to help it plan. It is trying to balance operating needs against sustainable revenues. At the same time, every dollar counts as the City is seeking to address capital outlay needs that exceed its current revenue sources.

SUMMARY OF BUDGET PRESENTED
The budget originated from Departmental Requests that were formed based on current year operations and planned projects for the coming year. City management reviewed the detail of those requests with department heads and identified areas where current operating costs could be redirected, new projects and new positions eliminated, additional revenues identified and revenue assumptions made less conservative.

For fiscal year 2026-2027, the City is budgeting $39.1 million of revenues, $33.4 million of operating expenditures and $8.5 million of capital project expenditures. Operating expenditure represents 85% of budgeted revenues, which is $1.8 million less than the 90% budgetary maximum. Capital Project expenditures represent 22% of budgeted revenues, which is $4.6 million in excess of the 10% budgetary minimum. These capital project expense amounts are in addition to any unfinished FY 25-26 projects that will be carried over into FY 26-27. See “Capital Outlay and Fund Balance” below.

The budget anticipates continued increases in revenues for FY 26-

27. Additionally, the budget also expects expenditures to grow in FY 26- 27, primarily related to increased staffing, pension costs, general operating costs, and a robust Capital Improvement Plan. Highlights of the budget include:
• Salary and benefit costs of approximately $15.0 million in funding for maintaining 92 full-time equivalent (FTE) positions supporting daily citywide operations and capital projects.
• Pension costs of approximately $3.0 million for the City’s annual unfunded accrued liability (“UAL”) payment to CalPERS, in addition to the normal pension costs included in salary and benefits.
• Services and supplies costs of approximately $14.8 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.
• $8.5 million for capital projects and vehicle and equipment. • $519,000 for debt service payments on the City’s bonds.

The budget above is consistent with the City’s budget policies:

The City’s policy says that it will spend at least $3.9 million (10%) on capital outlays.

The proposed budget this year shows projects totaling $8.5 million, which is more than double the minimum required capital investment. The City’s policy also says that it will spend no more than $35.1 million (90%) on operating expenditures. The proposed budget this year is $33.4 million (85%). That is a $1.8 million savings in operating costs

below the policy maximum, compared to the operating expenditures of 91% exceeding the policy last year.

Staff provided a brief overview of the budget as part of the May 5, 2026 Council meeting. At the May 12, 2026 budget workshop, staff presented a detailed review of the budget and received questions and feedback from both the public and Council. At the direction of Council at the budget workshop, the Recommended Budget was updated to include some of the contract services, training and other expenses previously removed from the first version of the budget (see Attachment 3). CIP projects were also discussed by Council along with the potential for additional modifications to the Capital Improvement Projects list going forward. The proposed CIP budget remains the same as presented on May 12th, but staff will be prepared to continue discussions and receive direction from Council if they wish to modify the CIP list prior to adoption of the budget.

Additionally, the Recommended Budget Book has been updated to include the fund balance forecasts, and the Question & Answer report has been updated for questions received since it was published for the May 12 meeting (see Attachment 4).

Budget Policy
At the May 12th Budget Workshop, Council expressed a desire to have a conversation about whether to amend the existing budget policy which states that operating expenses should not exceed 90% of projected revenues, and Capital Expenses should not be less than 10% of projected revenues. This has been referred to as the "90/10" policy. Council stated that they wished to discuss the possibility of modifying the policy from "90/10" to "85/15". Staff will be prepared to answer questions related to this potential change. If Council wishes to modify this budget policy at the June 2nd meeting, it would not prevent the budget from being able to be adopted.

FISCAL IMPACT:

The FY 26-27 Recommended Budget totals $41,762,547 and uses $2,675,050 in prior years’ unassigned fund balance to fund capital projects.

PRIOR CITY COUNCIL ACTION:

Council participated in a Priorities Workshop in January, 2026 and received a presentation regarding the Five-Year Financial Forecast and Five-Year CIP on March 24, 2026. Council received a presentation regarding the FY 26-27 Recommended Budget, inclusive of the Capital budget, on May 5, 2026 and participated in a Budget Workshop on May 12, 2026.

ATTACHMENTS:

1. Resolution 2026-035

2. FY26-27 Adopted Budget Book

3. Detail of Expenditure Adjustments Through Budget Development

4. FY26-27 Questions & Answers - updated

Attachment 1

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2026-035

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA ADOPTING THE FISCAL YEAR 2026-2027 ANNUAL OPERATING AND CAPITAL BUDGET WHEREAS, on January 12, 2026, the City Council of the City of Carmel-by-the-Sea adopted the budget schedule for Fiscal Year 2026-2027 in accordance with Carmel Municipal Code Section 3.060.020; and
WHEREAS, the City Council held public meetings on the proposed Fiscal Year 2026-2027 capital projects and Five-Year Capital Improvement Program on March 24, 2026 and May 12, 2026; 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 will hold a hearing on June 10, 2026 and will determine whether 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 2026-2027 Operating and Capital Improvement Program Budgets during the budget hearing held on May 12, 2026 and gave general direction on the recommendations contained therein during a public meeting; and
WHEREAS, the City Council held a public hearing on June 2, 2026 for consideration of adoption of the proposed Fiscal Year 2026-2027 Operating and Capital Budget; and WHEREAS the City’s budget totals $41,762,547 for Fiscal Year 2026-2027 consisting of appropriations, inter-fund transfers, General Fund expenditures of $32,754,967, Capital expenditures of $8,488,680 (Capital Projects and Vehicle and Equipment Funds), and Debt Service expenditures of $518,900.

WHEREAS the City’s budgeted revenue totals $39,087,497 for Fiscal Year 2026-2027.

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 2026-2027.

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 2025-2026 as necessary as part of the fiscal year-end process on June 30, 2026.

Approves and adopts the City of Carmel-by-the-Sea’s Fiscal Year 2026-2027 Recommended Operating Budget and Capital Improvement Program Budget.

Authorize the City Administrator to make ministerial changes to budgeted transfers and adjust appropriations to or from designated funds as necessary during Fiscal Year 2026-2027.

Resolution No. 2025-052

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 2026-2027.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BYTHE-SEA this 2rd day of June, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:

_________________________ _________________________
Dale Byrne Nova Romero
Mayor City Clerk

FISCAL YEAR 2026-2027

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

Table of Contents
Introduction 3
City Boundaries Map 4
City Organizational Chart 5
City Council 6
Department Heads 6
Boards, Committees & Commissions 7
City Profile 8
Demographics & Key Statistics 9
Financial Summaries 10
Budget Message 11
Executive Summary 12
Revenue 15
Expenditures 19
Authorized Positions 22
Operating Budget 24
City Council 25
City Attorney 27
Administration 28
Citywide (Non-Departmental) 34
Debt Service 35
Economic Development 36
Library 37
Community Activities 39
Community Planning & Building 41
Public Works 46
Public Safety 54
Capital Improvement Plan 58
Vehicle and Equipment Fund 60
Capital Projects Fund 61
Key Projects and Funding Needs (Years 2-5) 68
Other Funds 71
Projected Fund Balances 75
Financial Policies 77
2 ATTACHMENT 2

INTRODUCTION
3 ATTACHMENT 2

City Boundaries Map
4 ATTACHMENT 2

•Administration
•Circulation
•Youth
•Reference
•Local History
•Administration
•Planning
•Building Safety
•Code Compliance
•Police
•Fire
•Ambulance
•Administration
•Streets Maintenance
•Facilities Maintenance
•Environmental Compliance
•Project Management
•Forest, Parks & Beach

LIBRARY COMMUNITY PLANNING &

BUILDING

PUBLIC SAFETY PUBLIC WORKS
Carmel-by-the-Sea
Electorate
City Council
City Attorney City Administrator Boards &
Commissions
Assistant
City Administrator
•Community Activities

ADMINISTRATION

COMMUNITY ACTIVITIES
•Administration
•City Clerk
•Finance
•Human Resources
•Information Technology
5 ATTACHMENT 2

City Council
Department Heads
ACTING CITY ADMINISTRATOR – Brandon Swanson
ACTING ASSISTANT CITY ADMINISTRATOR – Marisa Bermudez
CITY ATTORNEY – Brian Pierik
POLICE CHIEF – Todd Trayer
ACTING DIRECTOR OF PUBLIC WORKS – Shari Carlet
DIRECTOR OF PLANNING & BUILDING – Anna Ginette
LIBRARY DIRECTOR – Heather Cousin
6 ATTACHMENT 2

Boards, Committees & Commissions
City Board and Commissions advise and assist the City Council with specific projects, policies and issues.

Terms of office are 4 years, with the exception of the Harrison Memorial Library Board of Trustees who serve 3-year terms. Terms run through May 30th. Vacancies occur on a rotating basis each year and the City recruits to fill these vacancies each year in March or whenever an unscheduled vacancy occurs.

City Council
Building Code
of Appeals
Community
Activities
Commission
Forest and
Beach
Commission
Historic
Resources
Board
Harrison
Memorial
Library Board
of Trustees
Planning
Commission
7 ATTACHMENT 2

CITY OF CARMEL-BY-THE-SEA PROFILE
Located about 120 miles south of San Francisco on the Monterey Peninsula, Carmel-bythe-Sea is a world-renowned coastal village spanning just one square mile. Despite its small footprint, it is home to 3,049 residents and an impressive urban forest of over 10,000 public trees, including Monterey pines, live oaks, and Monterey cypress. Visitors and residents alike enjoy its signature white sand beach, natural parklands, and a walkable downtown famous for its unique architecture, dining, and shopping. The community is further enriched by cultural hubs like the Sunset Center and the outdoor Forest Theater, alongside beloved local events such as the Sandcastle Contest, the City Halloween Parade, and the annual Pumpkin Roll.

Established on October 31, 1916, Carmel-by-the-Sea operates as a General Law City with a Council-City Manager form of government. All legislative authority rests with a five-member City Council, which includes a Mayor serving a two-year term and four Councilmembers serving four-year terms. This Council acts as the ultimate policymaking body, responsible for adopting the annual budget, enacting local laws, and approving major contracts or acquisitions. To manage the city's daily affairs, the Council appoints a City Administrator to act as the chief administrative officer. This individual is tasked with enforcing ordinances, executing Council orders, maintaining city records, and overseeing the day-to-day operations of departments like Public Works, Public Safety, and Community Planning and Building.

The City provides a wide variety of services to ensure the village remains a safe and beautiful place for everyone. This includes everything from building safety and planning functions to law enforcement and crime prevention through the Police department.

While many services are handled internally, fire and ambulance are provided through a contract with the City of Monterey. The Public Works department maintains the village's vital infrastructure, including streets, sidewalks, and the iconic shoreline and urban forest. The City also manages two library branches and organizes a variety of community activities and special events.

The true soul of Carmel-by-the-Sea is found in its residents, who stand as the City’s most precious resource. Their unwavering pride and dedication are the driving forces that preserve the unique, historic character of our one-square-mile community. It is the commitment of our residents that keeps the village’s legendary charm and natural beauty alive for everyone to enjoy.
8 ATTACHMENT 2

CITY OF CARMEL-BY-THE-SEA STATISTICS
AS OF JUNE 30, 2025
3 Unemployment
Rate:

4.30%
Median
Age:

68.9 Percent
with
Bachelor’s
Degree:
76%
Median
Household
Income:
$115,729
Population:
3,049
Annual
Precipitation:
15 inches
Average
Annual Low
Temperature:
48°F
Average
Annual High
Temperature:
65°F
Average
Room Rate:
$373
Average
Hotel
Occupancy:

68.9%
Hotel
Rooms
Available:
981
City Fleet
Vehicles:
46 Miles of
Paved
Streets:
27 Parking
Lots:
3 Tennis
Courts:
2 Parks:
10 Playgrounds:
1 Reference
Questions:
20,622
Library
Facilities:
2 Circulation
of library
materials:
156,306
Public Works
Calls for
Service:
7,140
Fire Calls for
Service:
924
Police Calls
for Service:
10,602
Restaurants:
58 9
ATTACHMENT 2

FINANCIAL SUMMARIES
10 ATTACHMENT 2

BUDGET MESSAGE
Greetings,
As we present the City’s Fiscal Year 2026/27 Budget, I am proud of the work that shaped this important document. Through meaningful engagement from the City Council, staff, and our community, this has truly become our budget — one that reflects shared priorities, community values, and a commitment to Carmel-by-the-Sea’s future.

Like many communities, we face increasing costs and evolving financial pressures, making disciplined and strategic decision-making more important than ever. I want to sincerely thank the Mayor and City Council for their thoughtful leadership and engagement throughout this process, as well as the residents and stakeholders whose participation helped inform the decisions reflected in this document.

I also want to express my appreciation to City staff across every department for the tremendous effort required to prepare this budget. Departments rose to the challenge of reducing operating expenditures while continuing to provide the exceptional service our community expects and deserves.

The FY 2026/27 Budget is structurally balanced and strategically utilizes available fund balance to support a much-needed, aggressive Capital Improvement Program for the coming fiscal year. These investments will help maintain community assets while positioning the City for long-term success.

Looking ahead, I am encouraged by discussions surrounding potential new revenue sources and other long-term financial stewardship measures that can improve fiscal sustainability and reduce reliance on fund balance in future years. While important work remains ahead, I believe this budget positions the City to move forward responsibly, strategically, and with optimism about the future.

See you around town,
Brandon Swanson
Acting City Administrator
11 ATTACHMENT 2

EXECUTIVE SUMMARY
In accordance with Carmel Municipal Code Section 3.06.020, this document presents the City’s operating and capital budget for the fiscal year 2026-2027 (“FY 26-27”) with tentative adoption on June 2, 2026. This budget reflects a conservative view of revenues in the face of increased economic uncertainties. It is designed to maintain essential service levels while balancing operational expense reductions. During the year, the City has invested significant resources addressing high interest community projects, and there is more work to be done. This work is reflected in the proposed budget.

FISCAL YEAR AT 26-27 AT A GLANCE
FY26-27 Adopted Revenues $39,087,497
General Fund Expenditures 29,782,406
Debt Service Expenditures 518,900
Pension Unfunded Liability Mitigation Expenditures 2,972,561 Capital Outlay Expenditures 8,488,680
FY26-27 Adopted Expenditures $41,762,547
Use of Fund Balance for Capital Projects $2,675,050
Funded Full Time Equivalent (FTE) positions 92.0
As we move forward and plan to implement the Fiscal Year 26-27 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.

BUDGET ASSUMPTIONS
Economic uncertainty and instability continue to affect markets at the local, national, and global levels. Persistent inflationary pressures are weakening consumer confidence and reducing discretionary spending, creating ongoing challenges for revenue forecasting and long-term financial planning.

The City’s three major sources of General Fund revenue (Property Tax, Sales and Use Tax and Transient Occupancy Tax) continue to show growth, however, the pace of growth has slowed as economic factors and international relations make for uncertainty.

This trend has led to a 66% - 68% annual occupancy rate over the past three fiscal years, which is below industry targets. It is also worth noting that Highway 1 through Big Sur is routinely impacted by natural disaster events, contributing to fluctuations in tourism activity and related revenues throughout the Peninsula.

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. 12 ATTACHMENT 2

The proposed budget reflects a balanced and collaborative approach, incorporating input from both internal stakeholders and the community to identify opportunities to control cost, maintain essential services, and implement operational efficiencies where appropriate, while continuing to meet the needs of the Village.

BUDGET POLICY
This budget is crafted based on the City’s budget policies, which include a policy that requires that a maximum of 90% of revenues be used to fund operations and that a minimum of 10% of revenues be used to pay for the capital improvement plan (“CIP”).

Based on the budgeted revenues of $39.1 million, the goal for this year’s Operating Expenses to meet the 90%/10% policy would be $35.1 million or less, and Capital Expenses would be $3.9 million or more. This compares to the forecast 5-Year CIP plan total costs, which focus on deferred maintenance, of $9M - $12M per year, each year.

Given the fact that the City has no new revenues sources to increase the projected $39.1M revenue, City Administration and Department Leadership has been looking for ways to cut costs and control spending. Thanks to this thoughtful scrutiny of department operations, the proposed budget on the following pages results in operating expenses equal to 85% of revenues (compared to the 90% maximum per the policy).

Budget Policy Budgeted Amount
Budget
Percentage
Policy
Amount
Policy
Percentage
Operational Expenditures
to be no more than 90% of
Revenue
33,273,867 85% 35,178,748 90%
Capital Outlay
Expenditures to be at least
10% of Revenue
8,488,680 22% 3,908,750 10%
This makes additional funding available for CIP but the current capital plan still exceeds the available revenues, resulting in the above-noted $2.7 million use of fund balance for Capital Projects.

Budget policy also says that a balanced budget is a budget in which total funding sources meet or exceed uses. The adopted budget is not operationally balanced, meaning the total projected incoming revenue does not fully compensate for our projected expenditures. The budget is balanced by strategically using “unrestricted fund balance”.

As discussed at the budget hearings, “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 or increased revenues received). The use of these “unrestricted fund balance” dollars make it possible to address the past and current 13 ATTACHMENT 2

direction of Council, which is to maintain core services, invest heavily in deferred infrastructure maintenance, natural resource management and community character.

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 total, the funds needed to structurally balance the budget equal $2.7 million.

STAFFING
Over the past year, the City has taken a more strategic approach to staffing in response to ongoing economic uncertainty and rising operational costs. As vacancies and retirements occur, departments are evaluated to determine current operational needs and identify opportunities for organizational efficiencies. This approach has included reviewing position structures, leveraging technology and software improvements, and maximizing the use of existing systems and resources. While some staffing reductions have been achieved through attrition, the primary focus has been on right-sizing departments and improving operational effectiveness rather than implementing broad workforce reductions.

These efforts have enabled the City to continue providing quality services to the community while exercising prudent fiscal management and maintaining flexibly for future staffing needs.

SUMMARY
The following pages outline forecasts of the City’s revenue sources and detail of each department and division’s staffing and spending plans. Also included is a detail of the current year plan for capital improvements, including projects that are being carried over from the prior fiscal year, and a detailed plan for the four years following.

Altogether, the 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. 14 ATTACHMENT 2

REVENUE
The FY 26-27 Recommended Budget includes $39,087,497 in estimated total revenue.

As detailed in the following table, the City’s three major sources of revenue—Property Tax, Sales and Use Taxes (including Measure C), and Transient Occupancy Tax (TOT)— continue to provide the foundation for essential services Source Budget
Property Taxes $9,680,988
Sales Tax 4,166,843
Measure C 7,023,597
Other 4,874,727
Charges for Services 3,576,436
Transient Occupancy Tax 9,764,905
Total $39,087,497
Sales Tax
11%
Measure C
18%
Property Taxes
25%
Transient
Occupancy Tax
25%
Other
12%
Charges
for
Services
9%
FY 26-27 Citywide Revenue Sources
15 ATTACHMENT 2

Table 1: Estimated Performance and Recommended Budget for Major Revenue Sources Key
Revenues
FY 22-23
Actual
FY23-24
Actual
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
Property Taxes $8,136,928 $8,770,848 $9,147,434 $9,445,000 $9,680,988 Sales Tax $3,469,412 $3,692,470 $3,956,282 $4,092,183 $4,166,843 Measure C $5,868,695 $6,386,122 $6,913,837 $6,900,734 $7,023,597 TOT $8,455,742 $8,579,344 $9,559,155 $9,526,737 $9,764,905 Total $25,930,777 $27,428,783 $29,576,709 $29,964,653 $30,636,334 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
Property taxes are budgeted at $9,680,988, representing approximately 25% of the total budgeted revenue. This reflects a 2.5% projected growth over the FY 25-26 estimated actual. The projected growth is minimal and expected to remain below the Consumer Price Index (CPI). As of February 2026, typical home values in the City remain among the highest in the State, with median prices estimated roughly at $1.17 million, resulting in an average annual tax bill of $12,281. The desirability of Carmel-by-the-Sea and its limited housing stock are major factors in its strong local market. Even so, the City has opted for a conservative projection due to a general softening in the broader housing market.

SALES AND USE TAXES
In Carmel-by-the-Sea, Sales and Use taxes and the local Measure C district tax are vital revenue streams, collectively budgeted to contribute $11,190,440, which represents nearly 29% of the City's total revenue.

Carmel’s revenue is heavily concentrated in three primary sectors, starting with General Consumer Goods, which remains the largest contributor at approximately 41% of the total sales tax revenue. This sector's performance is bolstered by receipts at jewelry stores and women's apparel. The Restaurants and Hotels sector follow closely at approximately 38% of the total revenue. Within this group, casual dining saw an increase, while hotels also experienced jump in tax receipts. Lastly, the State and County Pools classification accounts for 17% of total sales tax revenue.

Although fiscal year 2025-26 has shown a rebound in sales tax revenues, the outlook for fiscal year 2026-27 remains cautious due to a variety of economic pressures. A significant driver of this caution is shifting consumer sentiment, as shoppers are 16 ATTACHMENT 2

becoming increasingly cost-conscious and value-focused while navigating the combined impacts of inflation and evolving tariff policies. Despite these challenges, there is a sense of optimism regarding potential Federal Reserve interest rate changes in 2026, which are expected to improve consumer financing conditions and potentially stimulate growth.

TRANSIENT OCCUPANCY TAX
Transient Occupancy Tax (“TOT”) is levied at 10% of the rent charged by a hostelry operator within the City. Adopted at $9,764,905, TOT accounts for 25% of revenues and assumes continued occupancy at the current fiscal year’s rate. The City of Carmel-bythe-Sea has seen generally positive growth in TOT driven by higher daily room rates and stable occupancy compared to the previous fiscal year. July-August remains the City’s highest revenue-generating period while January-February is still considered the City’s tourism off season. The primary driver for increased tax revenue appears to be rising room rates. The average daily rate for the fiscal year to date is $397.36, up 6.80% from the prior year's annual average. Occupancy has remained relatively stable. Even with a decrease in the total rooms available, TOT collections show higher demand for the existing inventory.

The City has historically outperform its initial budget assumptions for TOT. While the current fiscal year has been robust, the City’s official outlook for fiscal year 2026-27 remains cautiously optimist. Statewide forecasts for the Restaurant and Hotel sector project a 2.8% growth for fiscal year 2026-27. The full reopening of Highway 1 and a new direct flight service from Chicago to Monterey are expected to boost visitor volume.

International tourism is forecast to rise 2.7%, supported by San Francisco and Los Angeles hosting the 2026 FIFA World Cup.

Fiscal Year * TOT Sales ** Property
2018 $6,329,074 $5,476,123 $6,163,959
2019 $6,882,015 $5,719,521 $6,496,558
2020 $5,115,277 $4,766,313 $6,690,948
2021 $5,339,285 $7,028,041 $7,389,656
2022 $7,787,643 $9,596,727 $7,694,722
2023 $8,455,742 $9,338,107 $8,136,928
2024 $8,579,344 $10,078,592 $8,770,848
2025 $9,559,155 $10,870,120 $9,147,434
2026 Estimated $9,526,737 $10,992,917 $9,445,000
2027 Budget $9,764,905 $11,190,440 $9,680,988
*Ending June 30th
** Combination of Bradley Burns & Measure C 1.5%
17 ATTACHMENT 2

CHARGES FOR SERVICES
The City of Carmel-by-the-Sea is a unique coastal community that takes pride in providing high-quality services to its residents and visitors. To maintain essential services—such as public safety, forest and beach maintenance, and library services—the City must ensure that its fee-supported services are accurately priced to recover the actual cost of providing them. These fee supported services make up the revenue category Charges for Services, which accounts for $3,576,436 or 8% of the City’s total budgeted revenue. The fiscal year 2026-27 budget of Charges for Services has been adjusted to reflect the change in fees presented in the fiscal year 2026-27 Master User Fee Schedule along with no change to number of services provided.

OTHER
Other Revenue budgeted at $4,874,727 sources make up the final 13% of the budgeted revenues. Other Revenue is made up of business license tax, franchise fees, grant, intergovernmental funding and interest and investment earnings. Interest and investment earnings are budgeted higher than in the prior fiscal year, as the City has been more strategic in its investments.
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
City's Major Revenues Historical
TOT Sales ** Property
18 ATTACHMENT 2

EXPENDITURES
The FY 26-27 Budget totals $41.8 million, consisting of the following expenditures:
· ▪ Operating Budget totals $32.8 million, or 79%, of the citywide budget · ▪ Debt service totals $518,900, or 1% of the citywide budget · ▪ Capital outlay, including Capital Improvement Projects ($8 million) and Vehicles and Equipment ($0.5 million), makes up 20% of the budget The Operating Budget encompasses the City’s departments and services. Debt Service is based upon required payments toward bonds issued by the City or by other governmental agencies on behalf of the City. As shown in the chart below, the FY 26-27 Budget includes the Operating Budget, Pension Unfunded Liability (“UAL”) payments, Capital Outlay 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.

Type of Expenditure Budget
Salaries & Benefits $14,814,197
Outside Services 11,989,462
Other Expenditures 2,978,747
Pension 2,972,561
Capital Outlay 8,488,680
Debt Service 518,900
Total $41,762,547
19 ATTACHMENT 2

The City’s largest expenditure is related to the cost of personnel. Salaries and benefits total $14.8 million and account for 35% of the citywide budget. The second largest type of expenditure is Outside Services. This category includes various types of expenditures, 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 and ambulance services provided by the City of Monterey ($3.7 million, $2.1 million respectively); support for the operations of the Sunset Center and other economic development activities ($1.2 million); legal services ($495,000); tree care and landscape maintenance ($990,000); fuel reduction ($300,000); and janitorial service ($294,000, including all parks). Capital Outlay is the third largest type of expenditure at $8.5 million, or 20% of the budget.

Other expenditures total $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. In addition, Pension expenses total $3 million, or 7%, of the budget and only include the annual required unfunded pension liability premium.

The citywide budget is rounded out with Debt Service ($518,900) accounting for 1% of the citywide budget.

Together, the above budgeted operating expenditures represent 85% of budgeted revenues. This compares favorably to a budget policy that operating expenditures be no more than 90% of revenues.

Total expenditures also include budgeted Capital Outlay of $8.5 million. This budgeted capital outlay represents 22% of budgeted revenues, compared to a budget policy that capital outlay expenditures be a minimum of 10% of budgeted revenues. While this budgeted Capital Outlay of 22% is a positive variance to the 10% minimum, it exceeds the amount of revenue available, causing the City to have to dip into fund balance reserves.

EXPENDITURES BY FUNCTION
Another way to view operating expenditures is by function, as depicted in the FY 26-27 illustration below. Capital Outlay makes up 20% of operating expenditures. The public safety functions of Ambulance, Fire and Police make up 28% of the budget. The Public Works Department is the next largest operating expenditure at 15% followed by Citywide at 13% of the budget, as it includes the City’s unfunded actuarial pension liability premium. In total, Administration, Council, Planning, Legal, Economic Development (including the Sunset Center), and Library and Community Activities represent the remaining 24% of the budget expenditures. 20 ATTACHMENT 2

Total Expenditures Budget %
Public Works $6,190,509 15%
Police 5,401,414 13%
Citywide 5,316,701 13%
Fire 3,797,984 9%
Administration 3,671,312 9%
Community Planning & Building 2,474,695 6%
Ambulance 2,329,489 6%
Library 1,428,253 3%
Economic Development 1,102,947 3%
Debt 518,900 1%
Legal 495,000 1%
Community Activities 292,047 1%
Council 254,618 1%
Operating Budget $33,273,867 80%
Capital 8,488,680 20%
Total $41,762,547 100%

RESERVE OF FUND BALANCE
In past years the City made an additional annual transfer of fund balance to the Section 115 Pension Unfunded Liability trust ($1.0 million) for pension mitigation. The trust has been built-up to help reduce the long-term liability for pensions. This year the City will forgo transferring funds to the 115 Pension Trust and will instead Assign fund balance of $1 million to the City’s Housing Trust Reserve. 21 ATTACHMENT 2

Authorized Positions
FY 25/26 FY 26/27
Department and Title Adopted Adopted Change
Council
Councilmember 4.00 4.00 0.00
Mayor 1.00 1.00 0.00
City Council Total 5.00 5.00 0.00
Administration
City Administrator 1.00 1.00 0.00
Assistant City Administrator 1.00 1.00 0.00
Administrative Analyst 1.00 1.00 0.00
Administrative Technician 0.00 1.00 1.00
Administrative Coordinator 1.00 0.00 -1.00
City Clerk 1.00 1.00 0.00
Finance Manager 1.00 1.00 0.00
Accountant 1.00 1.00 0.00
Finance Analyst 1.00 1.00 0.00
Finance Specialist 1.00 1.00 0.00
Human Resources Manager 1.00 1.00 0.00
Information Services / Network Manager 1.00 1.00 0.00
IT Analyst 0.00 1.00 1.00
IT Help Desk/Technician 1.00 0.00 -1.00
IT Interns 0.00 0.50 0.50
Administration Total 12.00 12.50 0.50
Community Activities
Community Services Assistant 0.50 0.00 -0.50
Administrative Analyst 0.00 1.00 1.00
Executive Assistant 0.50 0.00 -0.50
Community Activities Total 1.00 1.00 0.00
Library
Library Director 1.00 1.00 0.00
Supervising Librarian 2.00 2.00 0.00
Librarian 1.00 1.00 0.00
Library Associate 3.00 3.00 0.00
Library Assistant 1.00 1.00 0.00
Executive Assistant 0.50 0.00 -0.50
Administration Technician 0.00 0.50 0.50
Librarian II (Local History) 0.00 0.00 0.00
Hourly Librarian 1.00 1.00 0.00
Hourly Library Assistant 2.00 2.00 0.00
Library Total 11.50 11.50 0.00
22 ATTACHMENT 2

FY 25/26 FY 26/27
Department and Title Adopted Adopted Change
Community Planning & Building
Planning & Building Services Director 1.00 1.00 0.00
Principal Planner 2.00 2.00 0.00
Senior Planner 1.00 1.00 0.00
Associate Planner 2.00 2.00 0.00
Assistant Planner 0.50 0.50 0.00
Administrative Coordinator 1.00 1.00 0.00
Building Official 1.00 1.00 0.00
Building Inspector 1.00 1.00 0.00
Permit Technician 1.00 1.00 0.00
Code Compliance Coordinator 1.50 1.50 0.00
Community Planning & Building Total 12.00 12.00 0.00
Public Works
Director of Public Works 1.00 1.00 0.00
Administrative Coordinator 1.00 1.00 0.00
Public Works Superintendent 1.00 1.00 0.00
Street Supervisor 1.00 1.00 0.00
Streets Maintenance Worker III 2.00 1.00 -1.00
Streets Maintenance Worker I/II 5.00 6.00 1.00
Facilities Maintenance Supervisor 1.00 1.00 0.00
Facilities Maintenance Specialist 1.00 1.00 0.00
Environmental Compliance Manager 1.00 1.00 0.00
Environmental Administrative Analyst 1.00 1.00 0.00
Capital Program Manager 0.00 1.00 1.00
Project Manager 2.00 2.00 0.00
City Forester 1.00 1.00 0.00
Assistant City Forester 1.00 1.00 0.00
Tree Climber & Care Specialist 1.00 1.00 0.00
Administrative Analyst 1.00 1.00 0.00
F&B Maintenance Worker I/II 3.00 3.00 0.00
Tree Permit Technician 1.00 1.00 0.00
Public Works Total 25.00 26.00 1.00
Police
Public Safety Director 1.00 1.00 0.00
Police Commander 1.00 1.00 0.00
Sergeant 3.00 3.00 0.00
Police Officer 10.00 10.00 0.00
Police Services Supervisor 1.00 1.00 0.00
Police Services Officer 6.00 5.50 -0.50
Community Services Officer/Animal Control 2.00 2.50 0.50 Police Total 24.00 24.00 0.00
Citywide Total Funded Positions 90.50 92.00 1.50
23 ATTACHMENT 2

OPERATING BUDGET
24 ATTACHMENT 2

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.

YTD 2025-2026 WORKLOAD INDICATORS / PERFORMANCE MEASURES · 33 City Council meeting
· 136 Hours of City Council meetings
· 79 other City boards, committees and commission meetings · 67 Resolutions passed
· 5 Ordinances passed
2025-2026 INITIATIVES AND ACCOMPLISHMENTS
· Street Addresses Implementation
· Entered MOU with the Carmel Public Library Foundation to facilitate renovations at the historic Harrison Memorial Library
· Submitted revised draft Housing Element to the State of California for review · Completed contract with Monterey Fire to operate Ambulance · Established pickleball regulations by ordinance
· Adopted updated Fire Hazard Maps
· Adopted a Paid Parental Leave policy
2026-2027 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; 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; develop a facilities master plan.
· 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 $25,000 for the Council discretionary grant program, $3,000 for United Way 211, $4,000 for the Monterey County Film Commission, $7,500 25 ATTACHMENT 2

for the Central Coast Small Business Development Center and $78,000 for the cost of courier service for the mail delivery program for a total budget of $117,500.

City Council
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-110-00-41008 Salaries -Elected $10,101 $9,600 $9,600 101-110-00-41101 Retirement 175 179 179
101-110-00-41104 Health Insurance 29,484 24,755 40,109
101-110-00-41105 Social Security 496 0 372
101-110-00-41106 Medicare 147 139 139
101-110-00-41108 Worker's Comp 3,122 514 429
Salaries & Benefits Subtotal $43,525 $35,187 $50,828
101-110-00-42005 Community Promotions $127,060 $128,500 $117,500 101-110-00-42007 Regional Memberships 47,428 53,065 54,240 101-110-00-42101 Office Supplies 0 450 500
101-110-00-42302 Conferences & Meetings 14,105 31,550 31,550 Services & Supplies Subtotal $188,594 $213,565 $203,790 Total $232,118 $248,752 $254,618
Regional Memberships
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-110-00-42007 TAMC $1,295 $1,295 $1,360
101-110-00-42007 AMBAG 3,950 3,950 4,100
101-110-00-42007 Monterey Pen. Chamber of Commerce 900 900 950 101-110-00-42007 Monterey County Mayors Association 1,575 1,575 1,700 101-110-00-42007 Monterey County Business Council 500 500 525 101-110-00-42007 MBUAPCA 1,900 1,900 2,000
101-110-00-42007 League of CA Cities 3,380 3,380 3,600
101-110-00-42007 League of CA Cities- Monterey Bay 300 300 315 101-110-00-42007 LAFCo 16,796 16,796 18,000
101-110-00-42007 Community Human Services 19,175 19,175 20,875 101-110-00-42007 CoastWalks/Coastal Trail Association 300 300 315 101-110-00-42007 Carmel Chamber of Commerce 475 475 500 Total $50,546 $50,546 $54,240
26 ATTACHMENT 2

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.

YTD 2025-2026 WORKLOAD INDICATORS / PERFORMANCE MEASURES · 744 hours logged by the City Attorney
· 703 hours logged by City Attorney staff
· 172 hours logged by other legal service providers

BUDGET SUMMARY AND SERVICE IMPACTS
The FY 26-27 City Attorney budget totals $495,000 and consists of $395,000 for general legal services and $100,000 for other specialized legal assistance from the City attorney’s office, including labor negotiations and personnel. The budget also includes $3,500 for the City attorney’s annual performance evaluation.

City Attorney
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-112-00-42001 Contract Services $528,109 $442,000 $395,000 101-112-00-42004 Legal Costs 22,211 75,000 100,000
Total $550,320 $517,000 $495,000
27 ATTACHMENT 2

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.

YTD 2025-2026 WORKLOAD INDICATORS / PERFORMANCE MEASURES · 199 PRA’s requested
· 539 fixed location and 1,071 in & about
business licenses issued
· 403 high heel permits issued
· Awarded Certificate of Achievement for
Excellence in Financial Reporting for the
City’s Annual Comprehensive Financial
Report for the Fiscal Year ended June 30,
2024.
· 2,497 invoices processed
· 10 vacant positions filled, including Police
Chief and Library Director
2025-2026 INITIATIVES AND ACCOMPLISHMENTS
· Implemented an electronic payment portal for the collection of administrative fees, including business licenses, TOT tax collections and CRID administration · New IT internship program established
· Street Addresses implementation program started
· Approved ballot measures for new revenues
2026-2027 PRIORITIES
· Digitize all historic City records, including Resolutions, Ordinances, and Meeting Minutes, to improve accessibility and preserve institutional history. · Strategically implement Laserfiche software to create a centralized, web based platform for efficient records management and public access. · Evaluate and identify cost-effective off-site storage solutions to reduce physical storage needs and optimize space within City facilities. · Creation of web dashboard interface for more transparent fiscal reporting · Upgrade computer fleet to Windows 11 and prepare to pay for extended security update costs for any remaining Windows 10 computers. ($61/yr per PC) · Analyze departmental software priorities so that a strategic plan is developed which minimizes incompatible software.
· Implement Citywide Customer Service Program
28 ATTACHMENT 2

BUDGET SUMMARY AND SERVICE IMPACTS
Office of the City Administrator
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-111-00-41001 Salaries $1,747,030 $1,960,191 $1,872,786 101-111-00-41003 Salaries -Part time 0 23,135 23,135
101-111-00-41005 Overtime 29 0 0
101-111-00-41101 Retirement 106,487 123,548 109,868
101-111-00-41103 Deferred Compensation 52,111 46,541 41,161 101-111-00-41104 Health Insurance 324,463 422,125 456,957 101-111-00-41105 Social Security 0 1,434 1,434
101-111-00-41106 Medicare 25,151 28,931 27,491
101-111-00-41107 LTD/STD/Life 1,357 4,226 5,386
101-111-00-41108 Worker's Comp 75,569 104,586 84,706
101-111-00-41109 Benefits-MOU Obligations 9,048 10,690 9,707 Salaries & Benefits Subtotal $2,341,245 $2,725,407 $2,632,631 101-111-00-42001 Contract Services $216,785 $566,500 $294,054 101-111-00-42002 Recruiting Services 29,765 57,500 50,500 101-111-00-42003 Auditing Services 77,325 96,500 75,000 101-111-00-42006 Records Management 7,528 25,000 26,000 101-111-00-42009 Advertising and Legal Notice 15,209 21,000 10,700 101-111-00-42015 Other Services 27,052 24,800 24,950
101-111-00-42101 Office Supplies 7,860 7,875 3,000
101-111-00-42102 Publications & Subscriptions 318,773 275,400 261,397 101-111-00-42105 Materials and Supplies 2,048 500 3,000 101-111-00-42106 Small Tools and Equipment 492 0 500
101-111-00-42115 Other Supplies 0 5,000 250
101-111-00-42202 Equipment Maintenance 7,486 8,750 10,000 101-111-00-42301 Training & Education 7,888 18,400 15,400 101-111-00-42302 Conferences & Meetings 13,636 17,625 25,400 101-111-00-42304 Dues & Memberships 9,426 3,580 6,780
101-111-00-42306 Employee Programs 2,784 6,000 6,000
101-111-00-42307 Employee Appreciation Costs 19,595 20,000 20,500 101-111-00-42403 Printing 8,722 5,900 9,000
101-111-00-42404 Shipping/Postage/Freight 16,708 500 500 101-111-00-42405 Telephone and Communications 161,058 125,000 125,000 101-111-00-42406 Bank & Merchant Fees 6,321 4,500 34,000 101-111-00-42407 Computer Non Capital 10,615 40,000 33,750 101-111-00-42410 Pre-employment Costs 2,418 4,000 3,000 Services & Supplies Subtotal $969,492 $1,334,330 $1,038,681 Total $3,310,737 $4,059,737 $3,671,312
29 ATTACHMENT 2

STAFFING
FY 25/26 FY 26/27
Department and Title Adopted Adopted Change
Administration
City Administrator 1.00 1.00 0.00
Assistant City Administrator 1.00 1.00 0.00
Administrative Analyst 1.00 1.00 0.00
Administrative Technician 0.00 1.00 1.00
Administrative Coordinator 1.00 0.00 -1.00
City Clerk 1.00 1.00 0.00
Finance Manager 1.00 1.00 0.00
Accountant 1.00 1.00 0.00
Finance Analyst 1.00 1.00 0.00
Finance Specialist 1.00 1.00 0.00
Human Resources Manager 1.00 1.00 0.00
Information Services / Network Manager 1.00 1.00 0.00
IT Analyst 0.00 1.00 1.00
IT Help Desk/Technician 1.00 0.00 -1.00
IT Interns 0.00 0.50 0.50
Administration Total 12.00 12.50 0.50

ADMINISTRATION
The Administration divisional budget includes funding for the City’s Administrator’s performance evaluation within contract services, office supplies, conferences and meetings and employee appreciation costs.

Administration
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-111-10-42001 Contract Services $23,420 $152,585 $34,000 101-111-10-42015 Other Services 27,052 2,350 2,500
101-111-10-42101 Office Supplies 7,205 6,375 1,500
101-111-10-42102 Publications & Subscriptions 335 540 550 101-111-10-42302 Conferences & Meetings 11,202 5,325 13,100 101-111-10-42304 Dues & Memberships 3,691 1,350 4,550
101-111-10-42307 Employee Appreciation Costs 470 0 500
101-111-10-42403 Printing 0 100 200
101-111-10-42404 Shipping/Postage/Freight 16,708 500 500 Services & Supplies Subtotal $90,084 $169,125 $57,400
30 ATTACHMENT 2

CITY CLERK
The City Clerk provides timely and accessible service to all inquiries and requests for public information and records, 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 maintains 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.

City Clerk
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-111-11-42001 Contract Services $56,039 $48,300 $62,754 101-111-11-42006 Records Management 7,528 25,000 26,000 101-111-11-42009 Advertising and Legal Notice 13,422 15,000 10,000 101-111-11-42101 Office Supplies 321 1,000 1,000
101-111-11-42302 Conferences & Meetings 1,599 3,000 3,000 101-111-11-42304 Dues & Memberships 540 500 500
101-111-11-42403 Printing 3,686 2,500 5,000
Services & Supplies Subtotal $83,136 $95,300 $108,254

FINANCE
The Finance Department provides financial analysis and reporting through budget development and expenditure monitoring. It also handles routine operations—including accounts payable, payroll, tax collection, and licensing—while managing investments and debt and administrating the hostelry and restaurant improvement districts.

Finance
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-111-12-42001 Contract Services $77,781 $137,200 $44,800 101-111-12-42003 Auditing Services 77,325 96,500 75,000 101-111-12-42101 Office Supplies 31 0 0
101-111-12-42102 Publications & Subscriptions 1,357 29,350 30,500 101-111-12-42301 Training & Education 2,525 2,400 2,400 101-111-12-42304 Dues & Memberships 150 350 350
101-111-12-42403 Printing 4,673 2,900 3,800
101-111-12-42406 Bank & Merchant Fees 6,321 4,500 34,000 Services & Supplies Subtotal $170,162 $273,200 $190,850 31 ATTACHMENT 2

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.

HR
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-111-13-42001 Contract Services $9,080 $68,415 $69,000 101-111-13-42002 Recruiting Services 29,765 57,500 50,500 101-111-13-42009 Advertising & Legal Notice 1,787 6,000 700 101-111-13-42101 Office Supplies 146 500 500
101-111-13-42102 Publications & Subscriptions 131 25,300 25,300 101-111-13-42301 Training & Education 1,373 6,000 3,000 101-111-13-42302 Conferences & Meetings 834 3,800 3,800 101-111-13-42304 Dues & Memberships 5,045 680 680
101-111-13-42306 Employee Programs 2,784 6,000 6,000
101-111-13-42307 Employee Appreciation Costs 19,125 20,000 20,000 101-111-13-42403 Printing 362 400 0
101-111-13-42410 Pre-employment Costs 2,418 4,000 3,000 Services & Supplies Subtotal $72,850 $198,595 $182,480

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.
32 ATTACHMENT 2

IT
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-111-14-42001 Contract Services $50,466 $160,000 $83,500 101-111-14-42015 Other Services 0 22,450 22,450
101-111-14-42101 Office Supplies 156 0 0
101-111-14-42102 Publications & Subscriptions 316,949 220,210 205,047 101-111-14-42105 Materials and Supplies 2,048 500 3,000 101-111-14-42106 Small Tools and Equipment 492 0 500
101-111-14-42202 Equipment Maintenance 7,486 8,750 10,000 101-111-14-42301 Training & Education 3,820 10,000 10,000 101-111-14-42302 Conferences & Meetings 0 5,500 5,500
101-111-14-42304 Dues & Memberships 0 700 700
101-111-14-42405 Telephone and Communications 161,058 125,000 125,000 101-111-14-42407 Computer Non capital 8,327 40,000 33,750 Services & Supplies Subtotal $550,801 $593,110 $499,447 33 ATTACHMENT 2

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.

YTD 2025-2026 WORKLOAD INDICATORS / PERFORMANCE MEASURES · $1 million contribution to the City’s §115 Pension Mitigation Trust

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 $264,403 or 9.7%, in FY 26-27 compared to the FY 25-26 Adopted Budget.
· The City’s liability insurance premiums are budgeted at $977,140, a decrease by $126,800, or 11%.
· Changes to the City’s out-of-pocket deductible per occurrence increased and the budget reflects the increase in the City’s exposure.

Non-Departmental
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-130-00-42501 Liability Insurance Premium $964,366 $1,103,940 $977,140 101-130-00-42503 PERS UAL Payment 2,298,486 2,708,158 2,972,561 101-130-00-42504 Insurance Claims Paid 3,481 100,000 450,000 101-130-00-42505 Utilities 493,804 464,000 477,000
101-130-00-42506 Property Tax Assessments 94,134 100,000 100,000 101-130-00-42508 Unemployment Costs 17,067 15,000 18,000 101-130-00-42509 Citywide Mailing Costs 0 24,845 25,000 101-130-00-42510 Retiree Health Share 84,578 87,000 85,000 101-130-00-42511 County Property Tax Admin Fees 57,868 75,000 75,000 101-130-00-42512 Forest Theater Utilities 0 10,000 10,000 Total $4,013,784 $4,687,943 $5,189,701
34 ATTACHMENT 2

DEBT SERVICE (FUND 401)
Debt Service includes payments for the 2020 Refunding Lease Revenue Bonds. These payments total $518,900 as shown 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 SOURCE
General Fund revenue is the source of funding for debt service obligations. The General Fund (Fund 101) will transfer $518,900 to Debt Service (Fund 401) in FY 26-27 with approximately 75% of that going to the principal.

Debt Service: Total
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
401-411-00-44001 Principal $375,000 $380,000 $405,000
401-411-00-44002 Interest 133,526 126,600 111,400
401-411-00-44003 Administrative Fees 2,105 2,500 2,500
Total $510,631 $509,100 $518,900
FY 24-25 Debt Service by Bond
Bond Principal Interest Fee Total
Sunset Center $405,000 $111,400 $2,500 $518,900
Total $405,000 $111,400 $2,500 $518,900
35 ATTACHMENT 2

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. The annual grant for management of only Sunset Center is in this fiscal year’s 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.

The City funds See Monterey through a jurisdictional investment partnership at 3% of budgeted Transient Occupancy Tax collections. 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-the-Sea. Visit Carmel, 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. Visit Carmel uses assessments collected by overnight and restaurant visitors to fund operations.

Another partner agency is the Carmel Chamber of Commerce, which operates the Visitor Center in town, publishes a comprehensive visitor guide, and assists businesses. The Chamber also supports small businesses and provides services to assist its members, including listing businesses on the Chamber website, providing educational programs, conducting outreach with businesses via weekly business walks with City elected officials and staff and marketing opportunities to “shop locally”.

BUDGET SUMMARY AND SERVICE IMPACTS
Economic
Development
Account Number Details
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-122-00-42008 SCC- Sunset Center Operating Grant $750,000 $750,000 $750,000 101-122-00-42008 See Monterey 226,297 226,297 292,947
101-122-00-42008 Visit Carmel 120,000 120,000 0
101-122-00-42008 Carmel Chamber of Commerce 60,000 60,000 60,000 Total $1,156,297 $1,156,297 $1,102,947
36 ATTACHMENT 2

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.

YTD 2025-2026 WORKLOAD INDICATORS / PERFORMANCE MEASURES · 21,773 reference and information questions were
answered
· 1,827 library cards were issued
· 98,658 library items were circulated
· 8,643 people attended library programs
· 133,376 visits were made to the library
· 8,884 logins were made to library wi-fi
· 122,000 digital items (e-books, audios,
magazines, films, music) were accessed
· 450 items added to the online historical collection
· 6 new oral history interviews were captured
2025-2026 INITIATIVES AND ACCOMPLISHMENTS
Increased the number of adult, kids, and teen
programs. Attendance at all programs continues to grow and patrons are enjoying the variety of programs.
· Hired an Interim Library Director and completed the recruitment and hiring for a permanent Library Director.
· Actively working on the FY 2025-27 Library Strategic Plan objectives. In March 2026 the Library Board of Trustees established a Library Strategic Plan Ad Hoc Committee to work closely with staff. Staff provided an update. 2026-2027 PRIORITIES
· Continue work to accomplish FY 2025-2027 Library Strategic Plan objectives. · Relocate and open a temporary library for operation by fall 2026 while the Harrison Memorial Library restoration project is under construction. 37 ATTACHMENT 2

· Participate in design development and construction processes for the Harrison Memorial Library restoration project.
· Establish a circulating collection for all ages at the Park Branch Library. · Open the Park Branch Library for Saturday operations.

BUDGET SUMMARY AND SERVICE IMPACTS
Library
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-120-00-41001 Salaries $813,182 $918,714 $841,638
101-120-00-41003 Salaries -Part time 126,365 263,505 228,720 101-120-00-41101 Retirement 54,785 57,229 48,271
101-120-00-41103 Deferred Compensation 10,275 11,436 7,500 101-120-00-41104 Health Insurance 138,521 159,635 193,032 101-120-00-41105 Social Security 6,707 16,344 14,181
101-120-00-41106 Medicare 13,485 17,155 15,520
101-120-00-41107 LTD/STD/Life 886 1,399 1,934
101-120-00-41108 Worker's Comp 45,503 61,582 47,897
101-120-00-41109 Benefits-MOU Obligations 14,242 14,986 14,560 Salaries & Benefits Subtotal $1,223,951 $1,521,984 $1,413,253 101-120-00-42001 Contract Services $5,666 $10,500 $15,000 Services & Supplies Subtotal $5,666 $10,500 $15,000
Total $1,229,617 $1,532,484 $1,428,253

STAFFING
FY 25/26 FY 26/27
Department and Title Adopted Adopted Change
Library
Library Director 1.00 1.00 0.00
Supervising Librarian 2.00 2.00 0.00
Librarian 1.00 1.00 0.00
Library Associate 3.00 3.00 0.00
Library Assistant 1.00 1.00 0.00
Executive Assistant 0.50 0.00 -0.50
Administration Technician 0.00 0.50 0.50
Librarian II (Local History) 0.00 0.00 0.00
Hourly Librarian 1.00 1.00 0.00
Hourly Library Assistant 2.00 2.00 0.00
Library Total 11.50 11.50 0.00
38 ATTACHMENT 2

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 safely on the City’s streets and in
its parks and create opportunities to interact, celebrate, enrich people’s lives, and promote inclusiveness. Its
mission is to inspire connections and strengthen
community bonds by creating safe, inclusive events that foster belonging through shared celebrations and
gatherings.

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).

YTD 2025-2026 WORKLOAD INDICATORS / PERFORMANCE MEASURES · 125 beach, film, parking stall, special event and Car Week permits · 11 planned and facilitated City Special Events.
2025-2026 INITIATIVES AND ACCOMPLISHMENTS
· Reestablished the Community
Activities Commission
· Updated Mission Statement
2026-2027 PRIORITIES
· Plan special events to celebrate the
City’s 110th Birthday in October
2026
· Continue to engage the
Community Activities Commission
in planning and executing City events
· Continue to explore potential collaborations with community partners 39 ATTACHMENT 2

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.

Community Activities
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-121-00-41001 Salaries $48,506 $62,351 $118,872
101-121-00-41003 Salaries -Part time 0 28,649 0
101-121-00-41101 Retirement 4,652 5,553 10,921
101-121-00-41103 Deferred Compensation 600 1,219 1,200
101-121-00-41104 Health Insurance 5,667 14,324 14,491
101-121-00-41105 Social Security 0 1,776 0
101-121-00-41106 Medicare 677 1,332 1,724
101-121-00-41107 LTD/STD/Life 51 209 418
101-121-00-41108 Worker's Comp 4,375 4,768 5,311
Salaries & Benefits Subtotal $64,528 $120,182 $152,937
101-121-00-42001 Contract Services $81,616 $111,040 $113,290 101-121-00-42005 Community Promotions 11,717 9,340 19,090 101-121-00-42009 Advertising and Legal Notice 3,410 6,950 5,000 101-121-00-42101 Office Supplies 169 200 200
101-121-00-42403 Printing 241 1,440 1,530
Services & Supplies Subtotal $97,153 $128,970 $139,110
Total $161,681 $249,152 $292,047

STAFFING
FY 25/26 FY 26/27
Department and Title Adopted Adopted Change
Community Activities
Community Services Assistant 0.50 0.00 -0.50
Administrative Analyst 0.00 1.00 1.00
Executive Assistant 0.50 0.00 -0.50
Community Activities Total 1.00 1.00 0.00
40 ATTACHMENT 2

COMMUNITY PLANNING AND BUILDING
The Community Planning and Building Department (CPB) includes the Administration, 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.

YTD 2025-2026 WORKLOAD INDICATORS / PERFORMANCE MEASURES · 344 Planning Permits Applications
· 53 Business Licenses Applications
· 534 Building Permits Applications
· 203 Code Compliance Cases
· 10 Transient Rental Case
· 233 Encroachment Permit Applications
2025-2026 INITIATIVES AND ACCOMPLISHMENTS
· Adopted the updated Fire Hazard Severity Zone Map via ordinance. · Adopted the Historic Context Statement update and received certification from the California Coastal Commission.
· Adopted consultant contract with Opticos Design and commenced work on the City’s Objective Design and Development Standards.
· Adopted the Water Allocation Resolution placing 14-acre feet of water received from the Monterey Peninsula Water Management District into six water allocation categories.
· Created a Permit Streamline Task Force to elicit suggestions for permit process improvements.
· Conducted internal staff training with the goal of providing cross-training opportunities resulting in holistic project review.
· Adopted consultant contract with Granicus for improved Short-Term Rental compliance.
· Received Planning Commission recommendation on a draft Roof Material Policy. · Continued work with the Affordable Housing Alternatives (“AHA”) resident group and finalized the 6th Cycle General Plan Housing Element amendment draft.
· Submitted the 6th Cycle General Plan Housing Element amendment to the California Department of Housing and Community Development for review and certification.
· Provided assistance to Public Works on the Carmel Coastal Hazards Local Coastal Program update.
· Received Planning Commission direction on the draft Accessory Dwelling Unit Ordinance Update.
· Adopted the Building Code Update Ordinance.
· Commenced quarterly check-in meetings with California Coastal Commission staff.
· Created a Long-Range Planning work plan.
41 ATTACHMENT 2

· Updated Staff Report and Draft Resolution templates.
2026-2027 PRIORITIES
· Adoption of updated Design Guidelines and Zoning Code through the Design Traditions 1.5 Project.
· Adoption of ordinances for the 6th Cycle General Plan Housing Element implementation.
· Complete the scanning/digitizing of rolled building plans currently in storage at Vista Lobos.
· Adopt the General plan Safety Element updates before the end of fiscal year 2027.
· Adoption of the updated Accessory Dwelling Unit Ordinance. · Engage staff to participate in more training opportunities to continue the professionalization and growth of the Community Planning and Building Department.
· Adopt necessary ordinances and policies to ensure development and construction consistency with update state laws on wildfire.
· Replace existing permitting software to increase efficiency and improve user (applicants and staff) experience.
· Continue to meet with the Permit Streamline Task Force to identify policy gaps and improve confusing/complex regulations and processes. · Continue to collaborate with Public Works to improve the permit process for interrelated tasks.
· Update and improve Planning handouts and checklists.
· Update and improve Building handouts and checklists.
· Update and improve Code Compliance handouts.
· Continue internal training program and include cross training with Public Works, Monterey Fire Department and California Coastal Commission staff. 42 ATTACHMENT 2

BUDGET SUMMARY AND SERVICE IMPACTS
Community Planning & Building
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-115-00-41001 Salaries $1,131,924 $1,604,924 $1,604,331 101-115-00-41005 Overtime 1,440 0 0
101-115-00-41101 Retirement 60,897 85,614 84,808
101-115-00-41103 Deferred Compensation 8,000 12,216 12,300 101-115-00-41104 Health Insurance 231,680 339,397 366,940 101-115-00-41106 Medicare 15,942 23,254 23,263
101-115-00-41107 LTD/STD/Life 1,135 2,067 3,390
101-115-00-41108 Worker's Comp 51,954 83,899 71,704
101-115-00-41109 Benefits-MOU Obligations 18,587 23,623 22,880 Salaries & Benefits Subtotal $1,521,560 $2,174,995 $2,189,615 101-115-00-42001 Contract Services $221,867 $179,135 $224,185 101-115-00-42009 Advertising and Legal Notice 500 0 12,000 101-115-00-42101 Office Supplies 2,633 7,100 2,000
101-115-00-42102 Publications & Subscriptions 1,673 18,138 15,850 101-115-00-42104 Safety Equipment and Supplies 2,638 1,700 2,600 101-115-00-42106 Small Tools and Equipment 0 0 500
101-115-00-42107 Gas and Oil 250 100 0
101-115-00-42115 Other Supplies 2,962 4,300 1,400
101-115-00-42301 Training & Education 9,225 11,305 8,195 101-115-00-42302 Conferences & Meetings 5,735 10,700 6,620 101-115-00-42304 Dues & Memberships 5,084 6,760 6,930
101-115-00-42403 Printing 1,334 1,150 4,800
Services & Supplies Subtotal $253,902 $240,388 $285,080 Total $1,775,462 $2,415,383 $2,474,695

STAFFING
FY 25/26 FY 26/27
Department and Title Adopted Adopted Change
Community Planning & Building
Planning & Building Services Director 1.00 1.00 0.00
Principal Planner 2.00 2.00 0.00
Senior Planner 1.00 1.00 0.00
Associate Planner 2.00 2.00 0.00
Assistant Planner 0.50 0.50 0.00
Administrative Coordinator 1.00 1.00 0.00
Building Official 1.00 1.00 0.00
Building Inspector 1.00 1.00 0.00
Permit Technician 1.00 1.00 0.00
Code Compliance Coordinator 1.50 1.50 0.00
Community Planning & Building Total 12.00 12.00 0.00
43 ATTACHMENT 2

ADMINISTRATION
The Administration Division provides administrative support, budgeting, scheduling and performance oversight of the Community Planning and Building operating divisions.

Community Planning & Building: Administration
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-115-23-42001 Contract Services $0 $0 $10,250
101-115-23-42102 Publications & Subscriptions 0 0 250
101-115-23-42304 Dues & Memberships 0 0 1,200
Services & Supplies Subtotal $0 $0 $11,700

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.

Community Planning & Building: Planning
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-115-20-42001 Contract Services $191,663 $79,200 $108,800 101-115-20-42009 Advertising and Legal Notice 500 0 12,000 101-115-20-42101 Office Supplies 2,633 7,100 2,000
101-115-20-42102 Publications & Subscriptions 1,613 1,138 600 101-115-20-42104 Safety Equipment and Supplies 2,638 1,700 2,600 101-115-20-42115 Other Supplies 1,210 575 0
101-115-20-42301 Training & Education 5,435 6,825 4,365 101-115-20-42302 Conferences & Meetings 1,695 4,000 950 101-115-20-42304 Dues & Memberships 3,800 4,680 3,500
101-115-20-42403 Printing 1,334 1,150 4,800
Services & Supplies Subtotal $212,523 $106,368 $139,615

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. 44 ATTACHMENT 2

Community Planning & Building: Building
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-115-21-42001 Contract Services $16,055 $84,935 $95,635 101-115-21-42102 Publications & Subscriptions 60 17,000 15,000 101-115-21-42106 Small Tools and Equipment 0 0 500
101-115-21-42107 Gas and Oil 250 100 0
101-115-21-42115 Other Supplies 1,752 2,225 700
101-115-21-42301 Training & Education 1,700 4,480 1,830 101-115-21-42302 Conferences & Meetings 1,730 4,300 3,670 101-115-21-42304 Dues & Memberships 1,284 2,080 2,030
Services & Supplies Subtotal $22,831 $115,120 $119,365

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.

Community Planning & Building: Code Compliance
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-115-22-42001 Contract Services $14,148 $15,000 $9,500 101-115-22-42115 Other Supplies 0 1,500 700
101-115-22-42301 Training & Education 2,090 0 2,000
101-115-22-42302 Conferences & Meetings 2,310 2,400 2,000 101-115-22-42304 Dues & Memberships 0 0 200
Services & Supplies Subtotal $18,548 $18,900 $14,400
45 ATTACHMENT 2

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:

Street Maintenance, Facilities Maintenance, Environmental Compliance, Project Management, and Forestry, Parks and Beach.

YTD 2025-2026 WORKLOAD INDICATORS / PERFORMANCE MEASURES · 133 Trees planted
· 157 Tree permits issued
· 54 tons of hot mix asphalt for in-house street
repairs
· 29 potholes filled
· 1,001 USA tickets
· 5,248 Linear Feet of asphalt overlay
· 1,430 sidewalk grinds
· 206 Encroachment Permits
2025-2026 INITIATIVES AND ACCOMPLISHMENTS
Street and Sidewalk Maintenance
· City-Wide Sidewalk Repairs: Initiated a major sidewalk shaving project and fixed 1,426 identified locations for safety.
· Contracted with Precision Concrete Cutting for a digital sidewalk assessment and mapping database.
· Asphalt and Berm Enhancements: Performed continuous hot-mix street repairs, fixed uneven pavement, and installed multiple hot-mix asphalt berms throughout the city to improve street drainage.
· Storm and Erosion Management: Cleaned storm drains to prepare for winter rains and managed multiple emergency erosion issues, including building rock drainage channels and repairing the 4th Avenue pathway and Serra Trail in the Mission Trail Nature Preserve (MTNP).
· Installed 16 new stop signs, repaired damaged street signs. · Maintained public sandbag station.
· Procured Compact Track Loader and two EV pickup trucks.

Habitat Restoration & Environmental Oversight
· North Dunes Restoration Project: Continued the removal of invasive ice plant and began clearing over 2.5 acres of it. Navigated the multi-year renewal process for the 5-year Coastal Development Permit.
· Carmel Beach Sea Level Rise/Adaptation Project: Completed a Socio-Economic Report, conducted community surveys and workshops, and presented the 46 ATTACHMENT 2

resulting Adaptation Pathway Report to both the Planning Commission and Forest & Beach Commission.

Stormwater & Waste Management
· Stormwater Compliance: Completed dryweather and wet-weather stormwater outfall sampling in coordination with Applied
Marine Science and the Monterey Sanctuary
Foundation.
· Conducted ongoing, periodic construction
site inspections, restaurant grease-trap
inspections, and successfully navigated an
intensive audit by the State Water Board.
· Waste Management: Executed a Franchise
Agreement MOU with ReGen and member
agencies. Coordinated the cleaning and
water-vacuuming of 30 downtown trash
cans and prepared records for CalRecycle
physical audits.
· Copper Gutter Policy: Installed BioChar
socks at the 4th Ave storm drain to test filtration and progressed the policy to the Planning Commission and City Council.

Facilities Improvements & Repairs
· Fire Station Upgrades: Completed construction to accommodate a new Fire Truck, while replacing the facility's epoxy flooring, relocating the turnout room, and indoor painting.
· Forest Theater: Completed repairs to the Forest Theater stage. · Sunset Center: Completed Phase II of exterior painting, replaced an elevator power unit.
· Completed Yoga Center reroofing project.
· First Murphy House: Repaired extensive dry rot.
· Installed A/C units at Vista Lobos, Public Works, and City Hall. · Installed new rollup door and upgraded security at the PW administrative office. · Installed new ADA handrails on the Ocean Ave side of Devendorf Park. · Completed Park Branch Library window repairs.

Urbanized Forest, Parks & Landscaping
· Completed the deferred maintenance “catchup plan” of removing dead trees and stumps, one year ahead of schedule.
· Carmel Forest Master Plan (CFMP): Completed the first draft, collected feedback from the steering committee and the public, created a dedicated webpage to track the project's progress, and advanced the plan into the CEQA environmental review process.
47 ATTACHMENT 2

· Fire Defense & Tree Maintenance: Removed hundreds of dead, dying, or hazardous trees, pruned for street clearance, and planted new trees. Created vehicle turnarounds in the MTNP.
· Tree Fine Ad-Hoc Committee: Formed an ad-hoc committee to overhaul the Tree Fee and Fine Schedule, specifically targeting unauthorized tree removals and damage during construction.
· Parks & Landscaping: Re-landscaped the Rio Road Medians, actively watered newly planted trees across the city, and modernized irrigation systems by replacing broken valves and control boxes at Devendorf Park and Vista Lobos.

Project Management (CIP)
· Shoreline Infrastructure: Brought the 10th and 12th Avenue Beach Stairs to 100% design completion and submitted them for bidding.
· Facilitated geotechnical investigations and concept designs for the 4th Ave Outfall and Sand Ramp.
· Initiated emergency engineering designs and tarping for the 11th Ave shoreline bluff erosion.
· Conglomerate Paving Project: Managed a
massive paving project that included city-wide
street paving, sidewalk repairs, and AC berm
installations.
· Process Improvements & Utilities Coordination:

Published a CIP Gantt chart and process
documents online for transparency.
· Coordinated extensive utility infrastructure
replacements across the city with CalAm and
CAWD.
2026-2027 PRIORITIES
· Construction of shoreline infrastructure repairs,
including beach stairs at 10th Avenue and 12th
Avenue
· Complete designs and begin construction of the
8th Avenue Sand Ramp
· Construct the Fourth Avenue outfall
· Construct the Junipero bypass drainage project
· Implement Copper Policy
· Repair retaining walls at Sunset Center
· Fire service backflows upgrades for City Hall and both libraries · City Hall exterior shingles replacement and handrail painting · Flanders Mansion window frame/gutter painting
· Repair roof leaks into Public Works garage
· ADA upgrades for 2nd elevator unit at Sunset Center
· Paint Vista Lobos building
· Upgrade electrical panel and install EV chargers at Vista Lobos 48 ATTACHMENT 2

· Complete fire fuel abatement along emergency exit routes and secondary exit routes
· Implement beautification projects, including the re-landscaping of the First Murphy park
· Install new split rail fencing at the north end of the North Dunes Habitat Restoration Area
· Continue North Dunes Restoration Improvements and Reporting, including removal of ice plant, acacia trees, and the protection of endangered plants · Complete the new Amendment to the Coastal Development Permit for the North Dunes Habitat Restoration Area
· Design MTNP stream projects 4 & 5

BUDGET SUMMARY AND SERVICE IMPACTS
Public Works
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-119-00-41001 Salaries $2,231,171 $2,885,869 $2,998,117 101-119-00-41005 Overtime 11,751 11,978 -
101-119-00-41101 Retirement 145,151 179,895 172,916
101-119-00-41103 Deferred Compensation 19,349 17,086 26,700 101-119-00-41104 Health Insurance 494,335 700,133 770,149 101-119-00-41106 Medicare 32,098 42,459 43,473
101-119-00-41107 LTD/STD/Life 2,381 4,116 7,405
101-119-00-41108 Worker's Comp 103,908 152,427 133,950
101-119-00-41109 Benefits-MOU Obligations 33,896 40,705 38,133 101-119-00-41999 Contra Salaries and Benefits (193,391) (350,636) (661,580) Salaries & Benefits Subtotal $3,074,040 $4,034,668 $3,529,264 101-119-00-42001 Contract Services $1,964,806 $1,452,570 $2,229,090 101-119-00-42009 Advertising and Legal Notice 5,260 4,075 4,400 101-119-00-42101 Office Supplies 1,263 6,000 5,000
101-119-00-42102 Publications & Subscriptions 6,615 19,000 12,360 101-119-00-42104 Safety Equipment and Supplies 13,898 11,000 10,000 101-119-00-42105 Materials and Supplies 230,425 269,475 221,375 101-119-00-42106 Small Tools and Equipment 2,611 17,500 10,800 101-119-00-42107 Gas and Oil 32,023 38,000 41,000
101-119-00-42202 Equipment Maintenance 13,515 30,555 32,000 101-119-00-42203 Vehicle Maintenance 27,081 39,500 40,500 101-119-00-42301 Training & Education 9,602 14,000 21,800 101-119-00-42302 Conferences & Meetings - - 2,500
101-119-00-42304 Dues & Memberships 1,426 4,060 4,195
101-119-00-42403 Printing 192 0 2,500
101-119-00-42408 Permits and Licenses 11,814 14,500 15,225 101-119-00-42409 Rentals 6,879 10,000 20,600
101-119-00-42999 Contra Operating Expenses - - (12,100) Services & Supplies Subtotal $2,327,409 $1,930,235 $2,661,245 Total $5,401,449 $5,964,903 $6,190,509
49 ATTACHMENT 2

STAFFING
FY 25/26 FY 26/27
Department and Title Adopted Adopted Change
Public Works
Director of Public Works 1.00 1.00 0.00
Administrative Coordinator 1.00 1.00 0.00
Public Works Superintendent 1.00 1.00 0.00
Street Supervisor 1.00 1.00 0.00
Streets Maintenance Worker III 2.00 1.00 -1.00
Streets Maintenance Worker I/II 5.00 6.00 1.00
Facilities Maintenance Supervisor 1.00 1.00 0.00
Facilities Maintenance Specialist 1.00 1.00 0.00
Environmental Compliance Manager 1.00 1.00 0.00
Environmental Administrative Analyst 1.00 1.00 0.00
Capital Program Manager 0.00 1.00 1.00
Project Manager 2.00 2.00 0.00
City Forester 1.00 1.00 0.00
Assistant City Forester 1.00 1.00 0.00
Tree Climber & Care Specialist 1.00 1.00 0.00
Administrative Analyst 1.00 1.00 0.00
F&B Maintenance Worker I/II 3.00 3.00 0.00
Tree Permit Technician 1.00 1.00 0.00
Public Works Total 25.00 26.00 1.00

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.
50 ATTACHMENT 2

PW Administration
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-119-40-42001 Contract Services $22,278 $19,700 $16,500 101-119-40-42009 Advertising and Legal Notice 4,722 4,075 4,400 101-119-40-42101 Office Supplies 1,263 6,000 5,000
101-119-40-42102 Publications & Subscriptions 6,615 19,000 860 101-119-40-42104 Safety Equipment and Supplies 13,898 11,000 0 101-119-40-42203 Vehicle Maintenance* 54 0 0
101-119-40-42301 Training & Education 9,002 14,000 19,800 101-119-40-42304 Dues & Memberships 1,426 4,060 4,195
101-119-40-42403 Printing 192 0 0
Services & Supplies Subtotal $59,449 $77,835 $50,755

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.

PW Street
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-119-41-42001 Contract Services $50,277 $42,745 $31,200 101-119-41-42102 Publications & Subscriptions 0 0 7,000 101-119-41-42104 Safety Equipment and Supplies 0 0 10,000 101-119-41-42105 Materials and Supplies 88,253 71,500 80,100 101-119-41-42106 Small Tools and Equipment 2,611 17,500 10,800 101-119-41-42107 Gas and Oil 32,023 38,000 41,000
101-119-41-42202 Equipment Maintenance 13,515 30,555 32,000 101-119-41-42203 Vehicle Maintenance 27,027 39,500 40,500 101-119-41-42409 Rentals 6,879 10,000 20,600
Services & Supplies Subtotal $220,585 $249,800 $273,200 51 ATTACHMENT 2

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

PW Facilities
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-119-42-42001 Contract Services $598,094 $624,585 $578,880 101-119-42-42105 Materials and Supplies 68,301 99,500 72,450 Services & Supplies Subtotal $666,395 $724,085 $651,330

ENVIRONMENTAL 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 the ReGen 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.

PW Environmental Compliance
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-119-43-42001 Contract Services $149,724 $188,200 $237,510 101-119-43-42408 Permits and Licenses 11,814 14,500 15,225 Services & Supplies Subtotal $161,538 $202,700 $252,735

PROJECT MANAGEMENT
The Project Management Division implements planning, design, engineering, public bidding, and construction of capital improvement projects, including transportation, drainage, and facility renovation projects, performs condition assessments, manages consultants and contractors, coordinates with utility providers 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.
52 ATTACHMENT 2

PW Project Management
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-119-44-42102 Publications & Subscriptions 0 0 $4,500 101-119-44-42105 Materials and Supplies 0 0 600
101-119-44-42301 Training & Education 250 0 2,000
101-119-44-42302 Conferences & Meetings 0 0 2,500
101-119-44-42403 Printing 0 0 2,500
101-119-44-42999 Contra Operating Expenses 0 0 (12,100) Services & Supplies Subtotal $250 $0 $0

FORESTRY, PARKS AND BEACH
The Forestry, Parks and Beach Division performs tree management for 12,000+ 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.

PW Forest & Beach
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-119-45-42001 Contract Services $1,144,433 $577,340 $1,365,000 101-119-45-42105 Materials and Supplies 73,871 98,475 68,225 Services & Supplies Subtotal $1,218,304 $675,815 $1,433,225 53 ATTACHMENT 2

PUBLIC SAFETY
YTD 2025-2026 WORKLOAD INDICATORS / PERFORMANCE MEASURES · 631 Fire calls for service
· 339 Ambulance calls for service in City limits
· 614 Ambulance calls for service outside City limits
· 9,646 Police calls for service
· 431 Traffic violations issued
· 3,164 Parking tickets issued
2025-2026 INITIATIVES AND ACCOMPLISHMENTS
· Ambulance Merger with Monterey Fire
· Implemented a Police Social Media Presence
· Successful recruitments to fill Police Officer positions · Development and execution of a citywide evacuation drill 2026-2027 PRIORITIES
· Continue recruitments to fill additional Police Officer positions and be fully staffed.
· Continue work towards the completion of the Police Department Remodel Project.
· Update the City Emergency Operations Plan.
· Expand the Seniors Helping Seniors program to include an App for seniors needing special care during emergencies.

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.

BUDGET SUMMARY AND SERVICE IMPACTS
The FY 26-27 Budget reflects a total decrease of $216,000 from the FY 25-26 projected actual expenses. The decrease is primarily the result of the change in Salaries and Benefits. 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.
54 ATTACHMENT 2

Police
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-116-00-41001 Salaries $613,587 $905,162 $690,344
101-116-00-41002 Salaries -Safety 1,892,743 2,409,354 2,575,908 101-116-00-41005 Overtime 0 37,500 0
101-116-00-41006 Overtime -Safety 500,025 113,529 200,000 101-116-00-41009 Holiday in Lieu 119,745 116,197 131,494 101-116-00-41101 Retirement 42,973 59,573 45,177
101-116-00-41102 Retirement -Safety 316,070 293,521 389,266 101-116-00-41103 Deferred Compensation 210,539 199,623 45,568 101-116-00-41104 Health Insurance 388,588 657,795 536,779 101-116-00-41105 Social Security 0 0 5,578
101-116-00-41106 Medicare 47,329 52,930 48,787
101-116-00-41107 LTD/STD/Life 2,282 3,209 4,607
101-116-00-41108 Worker's Comp 141,590 191,243 150,323
101-116-00-41111 Uniform Allowance 21,030 19,014 21,840 Salaries & Benefits Subtotal $4,296,501 $5,058,650 $4,845,671 101-116-00-42001 Contract Services $245,801 $250,000 $329,393 101-116-00-42005 Community Promotions 1,067 5,300 2,000 101-116-00-42101 Office Supplies 5,600 8,800 5,000
101-116-00-42102 Publications & Subscriptions 308 420 350 101-116-00-42104 Safety Equipment and Supplies 35,821 51,500 79,800 101-116-00-42107 Gas and Oil 27,306 35,000 25,000
101-116-00-42201 Building Maintenance 779 2,000 0
101-116-00-42202 Equipment Maintenance 35,900 85,700 28,000 101-116-00-42203 Vehicle Maintenance 48,273 40,000 40,000 101-116-00-42301 Training & Education 44,579 50,000 30,000 101-116-00-42304 Dues & Memberships 1,369 1,400 6,300
101-116-00-42403 Printing 238 6,300 1,700
101-116-00-42404 Shipping/Postage/Freight 13 600 200
101-116-00-42405 Telephone and Communications 2,042 10,000 0 101-116-00-42415 Other Expenditures 25,407 12,000 8,000 Services & Supplies Subtotal $474,503 $559,020 $555,743 Total $4,771,004 $5,617,670 $5,401,414
55 ATTACHMENT 2

STAFFING
FY 25/26 FY 26/27
Department and Title Adopted Adopted Change
Police
Public Safety Director 1.00 1.00 0.00
Police Commander 1.00 1.00 0.00
Sergeant 3.00 3.00 0.00
Police Officer 10.00 10.00 0.00
Police Services Supervisor 1.00 1.00 0.00
Police Services Officer 6.00 5.50 -0.50
Community Services Officer/Animal Control 2.00 2.50 0.50 Police Total 24.00 24.00 0.00

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 Assistant City Administrator manages the contract with the City of Monterey and is responsible for oversight of needed equipment and supplies.

BUDGET SUMMARY AND SERVICE IMPACTS
The FY 26-27 budget reflects a total increase of $168,560 over FY 25-26 Estimated Actual. Contract Services include fire coverage, Chief management and Fire Prevention Service all provided by the City of Monterey ($3,618,584). It also includes County of Monterey dispatch services, alarm service, as well as laundry service.

Fire
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-117-00-42001 Contract Services $3,520,760 $3,558,924 $3,727,484 101-117-00-42005 Community Promotions 1,150 1,000 1,000 101-117-00-42103 Medical Supplies 0 3,000 3,000
101-117-00-42104 Safety Equipment and Supplies 5,749 0 0 101-117-00-42107 Gas and Oil 8,339 22,000 22,000
101-117-00-42202 Equipment Maintenance 1,257 4,500 4,500 101-117-00-42203 Vehicle Maintenance 103,192 40,000 40,000 Total $3,640,447 $3,629,424 $3,797,984
56 ATTACHMENT 2

AMBULANCE
The Ambulance Department provides advanced life support ambulance service to the residents of Carmel-by-the-Sea. Ambulance has operated under a contract with the City of Monterey since 2025. The Assistant City Administrator manages the contract with the City of Monterey and is responsible for oversight of needed equipment and supplies.

Ambulance staffing includes paramedic-firefighters and emergency medical technicianfirefighters to provide front line medical emergency response and all-hazard response as a key component of the City’s public safety services.

Ambulance
Account Number Account Description
FY24-25
Actual
FY25-26
Estimated
Actual
FY26-27
Adopted
Budget
101-118-00-41002 Salaries -Safety $734,676 $214,875 $0
101-118-00-41006 Overtime -Safety 268,848 78,017 0
101-118-00-41009 Holiday in Lieu 65,124 8,069 0
101-118-00-41102 Retirement -Safety 87,615 21,478 0
101-118-00-41103 Deferred Compensation 4,900 1,138 0
101-118-00-41104 Health Insurance 81,160 20,366 0
101-118-00-41106 Medicare 15,238 4,298 0
101-118-00-41107 LTD/STD/Life 547 130 0
101-118-00-41108 Worker's Comp 46,288 0 0
101-118-00-41111 Uniform Allowance 2,875 969 0
Salaries & Benefits Subtotal $1,307,271 $349,339 $0
101-118-00-42001 Contract Services $158,533 $2,456,110 $2,224,489 101-118-00-42103 Medical Supplies 50,302 48,150 45,000
101-118-00-42104 Safety Equipment and Supplies 480 17,500 5,000 101-118-00-42107 Gas and Oil 8,789 21,000 15,000
101-118-00-42201 Building Maintenance 2,177 5,000 5,000 101-118-00-42202 Equipment Maintenance 663 4,000 0
101-118-00-42203 Vehicle Maintenance 31,951 70,000 35,000 101-118-00-42301 Training & Education 5,620 15,000 0
Services & Supplies Subtotal $258,514 $2,636,760 $2,329,489 Total $1,565,785 $2,986,099 $2,329,489
57 ATTACHMENT 2

CAPITAL IMPROVEMENT
PLAN
58 ATTACHMENT 2

CAPITAL IMPROVEMENT PLAN
The FY 26-27 Budget includes $8.5 million for capital projects, including vehicles and equipment. This level of capital spending represents 20% of the total citywide budget of $41.9 million and requires the use of $2.3 million of the City’s unassigned fund balance.

Sales tax revenue generated by Measure C, the City’s local sales tax, 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.

The “FY 26-27 CIP Funding by Category” donut chart illustrates the allocation of Capital Improvement Program funds across seven sectors, with Facilities receiving the largest share at 49%—nearly half of the total budget. Streets & Sidewalks and Project Management follow as the next largest priorities, accounting for 17% and 8% of funding, respectively. The remaining quarter of the budget is distributed among Forest, Parks & Beach Drainage (7%), Contingency (7%), and Drainage (6%), and Vehicle and Equipment (6%).
59 ATTACHMENT 2

VEHICLE AND EQUIPMENT FUND
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.

Vehicle and Equipment Fund
Account Number Account Description
FY26-27
Adopted
Budget
503-513-00-43005 PW Patch Truck 125,000
503-513-00-43005 PD Radar Trailer 25,000
503-513-00-43005 PD Parking Vehicle 50,000
503-513-00-43005 Beach Emergency Vehicle 30,000
503-513-00-43005 PD Admin Vehicle EV 75,000
503-513-00-43006 Police Radios Year 6 of 6 30,000
503-513-00-43007 Tracnet Replacement (RIMS Sun System) 200,000 Vehicle and Equipment Total $535,000
Publics Works Fleet
The Public Works Street Division’s asphalt patch truck is 27 years old with 62,000 miles.

While the truck has low mileage, it is in poor condition and has an outdated leaking asphalt tack oil sprayer. This truck will be replaced with a medium- sized truck, outfitted with a dump bed, lift gate, and tack oil sprayer. An EV option will be evaluated.

Safety Fleet
Police will be replacing three vehicles this fiscal year, all based on age. (1) Parking Enforcement Vehicle, (2) PD Admin Vehicle EV, and (3) 2009 Radar Trailer. EV options for all vehicles will be evaluated. A Beach Emergency vehicle will also be purchased to support emergency transports off the beach.

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

Police Public Safety Automation Solutions
Replace and/or upgrade current automated system for records management, jail management and computer aided dispatch.
60 ATTACHMENT 2

CAPITAL PROJECTS FUND
The Capital Projects budget for expenditure includes 20 new projects for a total of $7.9 million of new funds requested in FY26-27. There are another 9 projects being carried over from FY25-26 with a reserve of fund balance of $2.1 million.

STREETS AND SIDEWALKS INFRASTRUCTURE
The City has a two-tiered approach to taking care of its roads. The first tier addresses the repair of roads, and the second tier addresses the maintenance of roads so that they do not fall into disrepair. By working on both, the City intends to bring all the streets up to a high level of quality across the City.

The City uses a comprehensive study of street condition to make a plan. Based on condition, a street is then scheduled for repair or maintenance. The City’s pavement management program, StreetSaver, assigns a Pavement Condition Index (PCI) score to every street. The City Council and Public Works have developed a 10-Year Street Plan based on the measures of every street. For the first tier, street repairs, the plan is to repair every street with a PCI less than 50. For the second tier, street maintenance, the Category Description
Carryover
Budget
FY26-27
Adopted
Budget
Total
Projected
Spend
Streets Street Improvement Project - Design 200,000 200,000 Streets Street Preventative Maintenance Program 850,000 850,000 Streets Resurfacing Parking Lots - Sunset Center 150,000 150,000 300,000 Streets Sidewalk Improvement Project 275,000 275,000
Drainage Drainage Improvement Project - Design 175,000 275,000 450,000 Drainage Scenic Drainage Improvement & Pathway Restoration 100,000 200,000 300,000 Facilities Vista Lobos Panel Upgrade EV 560,000 560,000 Facilities Picadilly Restroom - Design 70,000 80,000 150,000 Facilities ADA Upgrades 20,000 20,000
Facilities Sunset Center Piano Room Floor 25,000 25,000 Facilities Sunset Center Guardrail Replacement 50,000 50,000 Facilities Fire Station Alert System Upgrade 200,000 200,000 Facilities Police Station / Public Works Architecture 3,500,000 3,500,000 Facilities Flanders Foundation Repair 150,000 150,000
Facilities Transfer Switches for City Hall & Vista Lobos 100,000 100,000 Facilities Fire Service Backflow Preventer Upgrade 200,000 50,000 250,000 FP&B Sand Ramp 8th Avenue Repair Project 275,000 125,000 400,000 FP&B Eroded Bluff Emergency Repair 200,000 200,000
FP&B Shoreline Infrastructure Repairs 400,000 400,000
FP&B North Dunes Habitat Restoration Area - Invasive Species Removal 200,000 200,000 FP&B Beach Emergency Vehicle Storage 30,000 30,000
Planning ODDS Element 150,000 150,000
Project Mgmt Project Management 673,680 673,680
Contingency CIP Contingency 600,000 600,000
Total New CIP $2,080,000 $7,953,680 $10,033,680
61 ATTACHMENT 2

plan is to maintain the roads not being repaired so that the average PCI across the City is 80.
10-Year Street Repair Improvement Program ($200,000)
This project funds engineering design for priority street rehabilitation and improvement projects identified through the City’s pavement management program, StreetSaver. The design phase will include field verification, surveying, and preparation of construction documents and cost estimates for the highest-priority roadway segments. This design will then lead to road reconstruction projects next year. 10-Year Street Preventative Maintenance Program ($850,000) This project includes rehabilitation work on selected streets identified through the StreetSaver pavement evaluation program. Improvements will consist primarily of microseal/microsurfacing or similar treatments designed to extend the service life of existing roadways and prevent further deterioration. By addressing pavement needs proactively, this project reduces long-term costs associated with major repairs or full street reconstruction. These preventive maintenance efforts help preserve roadway integrity, improve safety, and maintain the overall quality of the pavement throughout the project area and is essential to preserve pavement conditions over the long term.

Together, the two tiers of the Street Program - repair and maintenance - bring all streets to a PCI of 50 or more with an average PCI of 80 within ten years. To keep streets at an average PCI of 80, the City will need to continue regular preventative maintenance on an ongoing basis. Implementing this 10-Year Plan helps preserve pavement conditions, extend the useful life of the roadway system and improve the City’s overall PCI score while minimizing more costly reconstruction in the future.

Resurface Parking Lot – Sunset Center ($300,000)
This project completes asphalt rehabilitation improvements at the Sunset Center north and south parking lots, one of the City’s most heavily used public parking facilities.

Work includes pavement resurfacing, localized asphalt repair, restriping, and accessibility improvements where needed. These upgrades extend the service life of the parking lots while improving safety, circulation, and ADA compliance for visitors to the Sunset Center campus.

Sidewalk Improvement Project – Design ($275,000)
This project supports the design of priority sidewalk repair and replacement projects throughout the City to improve pedestrian safety and accessibility. Areas requiring 62 ATTACHMENT 2

improvement have been identified through the City’s
recent sidewalk condition assessment conducted by
Precision Concrete, which documented trip hazards,
vertical offsets, and deteriorated sidewalk segments
across the community. The assessment data is managed
through the City’s DataWorks infrastructure
management software, allowing staff to prioritize
repairs based on safety risk, condition severity, and
pedestrian usage. The design phase will include
surveying, preparation of construction drawings, and
cost estimates for the highest-priority locations,
supporting future construction projects that enhance
walkability, reduce liability risks, and improve overall sidewalk conditions.

DRAINAGE INFRASTRUCTURE
Drainage improvements intended to address localized flooding, improve stormwater conveyance, and increase long-term system resilience.

Drainage Improvement Project- Design ($450,000)
This project addresses recurring localized neighborhood street ponding by improving surface drainage and upgrading the stormwater intake and conveyance system. The work will include targeted roadway and gutter grading to restore positive flow, installation of new catch basins to increase intake capacity, up sizing select storm drain pipelines to improve conveyance and adding new manholes to enhance system access and long-term maintenance. These improvements will reduce and eliminate floodwater entering residential properties and prevent standing water from accumulating on neighborhood streets, resulting in safer conditions, reduced pavement deterioration, and improved stormwater performance during peak rainfall events. The project also serves as an important preparatory phase for the future major storm drainage bypass pipeline improvement along Junipero, ensuring that upstream and local drainage conditions are properly integrated with the larger system upgrade.

Scenic Drainage Improvement & Pathway Restoration - Design ($300,000) This project addresses ongoing erosion, drainage deficiencies, and pathway deterioration along the Scenic Pathway corridor between Eighth and Eleventh Avenues—one of Carmel-by-the-Sea’s most heavily used and visually significant coastal routes. Seasonal stormwater runoff, combined with coastal bluff exposure and inadequate drainage infrastructure, has resulted in localized flooding, surface degradation, and slope instability, creating safety hazards for pedestrians and increasing long-term maintenance demands.

The project will implement a comprehensive drainage strategy, including the installation of new subsurface drains, upgraded piping systems, and improved surface conveyance features along Scenic Drive to better capture and direct stormwater away 63 ATTACHMENT 2

from the pathway and adjacent slopes. These improvements are designed to reduce erosion, minimize sediment transport, and protect the structural integrity of the coastal bluff.

In conjunction with drainage upgrades, the pathway will be reconstructed to restore a safe, durable, and accessible walking surface consistent with the character of the Scenic corridor. Work will also include targeted slope stabilization measures—such as reinforcement, regrading, and potential bioengineering treatments—to reduce the risk of further degradation. Protective barriers and edge treatments will be installed where necessary to enhance user safety while maintaining coastal views.

PUBLIC FACILITIES
Projects addressing maintenance, safety improvements, and long-term facility planning.

Picadilly Restroom Design ($150,000)
Funding will be allocated for the design of an expansion to the Picadilly restroom, one of the City’s most heavily used facilities. During peak summer months, the line for this single-toilet restroom often extends to the sidewalk,
highlighting the need for increased capacity.

Vista Lobos Electrical Panel Upgrade and EV Infrastructure ($560,000)
This project implements previously authorized Council action to upgrade the electrical infrastructure at the Vista Lobos facility and is currently in progress, with bid solicitation underway. The City has executed an agreement for this work, and the project is advancing toward construction.

Improvements include replacement of aging electrical panels, modernization of electrical systems, and expansion of capacity to support current operations and future electric vehicle (EV) charging infrastructure for the City’s fleet. These upgrades are necessary to ensure safe, reliable, and code-compliant electrical service while supporting the City’s sustainability and fleet electrification goals.

Completion of the project by the end of the calendar year is required to meet contractual and funding obligations. Failure to meet this deadline may result in financial penalties or loss of eligible funding. The project is being actively managed to maintain schedule and mitigate delivery risks.

ADA Upgrade Program ($20,000)
The City continues its ongoing program of accessibility improvements to public facilities and infrastructure. Funding supports targeted upgrades identified through ADA transition planning and accessibility reviews. Improvements may include pathway 64 ATTACHMENT 2

modifications, accessibility improvements to public buildings, and upgrades that ensure compliance with current accessibility standards.

Sunset Center Piano Room Floor and Guardrail Replacement ($75,000) This project includes two improvements at the Sunset Center facility to address aging infrastructure and safety concerns. The Piano Room floor requires replacement due to deterioration from years of use, which has impacted its structural integrity and appearance. Upgrading the floor will restore the functionality and safety of the space used for rehearsals, events, and performances.

The project also includes replacement
of the exterior guardrail along the
ramp in the Sunset Center North
Parking Lot, which has deteriorated
due to age and exposure to coastal
weather conditions. Replacing the
guardrail will improve safety for
pedestrians using the ramp and
adjacent parking areas while
maintaining compatibility with the
character of the Sunset Center
campus.

Fire Station Alert System Upgrade ($200,000)
This project replaces the Fire Station’s alerting and notification system that receives dispatch signals from Monterey County and alerts personnel to emergency incidents.

The need for this upgrade was identified during the current fiscal year CIP discussions but was not included due to timing constraints and is now proposed for the upcoming fiscal year.

The existing system is outdated, no longer supported by the manufacturer, and is beginning to experience failures similar to those encountered at neighboring stations prior to replacement. Replacement parts are unavailable, increasing the risk of system failure and delayed emergency response. Additionally, Monterey County has enhanced its dispatch capabilities, and the current system is not fully compatible with these updates.

The project includes installation of a modern station alerting system with a central controller, voice alerting, LED speaker and strobe notifications, room alerting components, and mobile application integration to support real-time notifications.

These improvements will enhance reliability, improve response times, and ensure compatibility with current emergency communications systems.

Police / Public Works Facility – Architectural Design ($3,500,000) This project initiates architectural and engineering design services associated with the 65 ATTACHMENT 2

future Police and Public Works facility project. Work will include feasibility studies, conceptual layouts, site evaluation, and preliminary architectural design alternatives for renovation or replacement of the existing facility. This phase will establish project scope, cost estimates, and potential development strategies for one of the City’s most significant future infrastructure investments.

Flanders Mansion Foundation Repair ($150,000)
Structural assessment and stabilization work will address foundation issues identified at Flanders Mansion. The project includes engineering evaluation, development of repair strategies, and implementation of stabilization measures to protect the historic structure. These improvements ensure the continued structural integrity and preservation of one of the City’s most historically significant properties.

Transfer Switch Installation – City Hall and Vista Lobos ($100,000) Automatic transfer switches will be installed at City Hall and the Vista Lobos facility to support backup power operations. These systems allow facilities to seamlessly transition to emergency power during outages, improving operational continuity for essential municipal services.

FOREST, PARKS AND BEACH INFRASTRUCTURE
Several projects focus on coastal resilience, environmental restoration, and park infrastructure.

Sand Ramp – Eighth Avenue Repair and Design ($400,000)
This project advances the design and reconstruction of the sand access ramp near Eighth Avenue, which has experienced repeated storm damage due to coastal erosion and sea level rise. Improvements will restore reliable access to the beach while incorporating design features that improve durability under changing coastal conditions.

Eroded Bluff Emergency Repair ($200,000)
Emergency stabilization work will address coastal bluff erosion that poses risks to public safety and nearby infrastructure. The project will include geotechnical investigation and design, along with the necessary emergency repairs or construction activities to address damaged areas. Additional restoration efforts will be undertaken to reduce future instability.

Shoreline Infrastructure Repairs ($400,000)
A recent Coastal Engineering Study included a comprehensive Shoreline Infrastructure Condition Assessment that identified priority repairs needed to protect critical coastal assets. This project initiates the engineering, design, and permitting of the highest priority shoreline infrastructure improvements.
66 ATTACHMENT 2

The assessment identified six rock revetments along the shoreline, four of which are in high-priority condition requiring repair—one requiring full reconstruction and others requiring partial rehabilitation. These structures are essential for protecting public infrastructure, maintaining coastal access, and reducing the risk of erosion and stormrelated damage.

This project will advance design and regulatory coordination for these priority repairs, allowing the City to proactively address deteriorating conditions while streamlining the permitting process with agencies such as the California Coastal Commission.

Advancing a focused set of priority improvements is expected to improve permitting efficiency and position the City to respond more effectively to coastal hazards.

Additionally, this effort will refine construction cost estimates, identify project phasing, and establish a clear implementation strategy for future shoreline infrastructure investments. This work lays the foundation for a comprehensive, long-term approach to maintaining and protecting the City’s shoreline assets.

North Dunes Habitat Restoration ($200,000)
This ecological restoration project targets invasive species removal and habitat restoration within the North Dunes area. The effort supports recovery of native dune ecosystems while improving habitat conditions for coastal wildlife. Work may include invasive plant removal, restoration planning, and revegetation with native species.

Beach Emergency Vehicle Storage ($30,000)
Storage to house new Beach Emergency Vehicle that will help with emergency transports off the beach.

PLANNING
Objective Development Design Standards (ODDS) ($150,000) ODDS is created to provide objective (ministerial) design and development regulations for affordable housing projects in compliance with State Laws.

PROJECT MANAGEMENT
Project Management ($673,680)
Staff time and resources allocated to manage FY26-27 CIP projects.

CIP PLANNING
CIP Contingency Fund ($600,000)
A $600,000 Contingency Fund will be budgeted to cover any shortfalls to award construction contracts or to close out projects.
67 ATTACHMENT 2

CAPITAL IMPROVEMENT PLAN – YEARS 2 - 5
City develops and maintains an on-going Capital Improvement Plan for the next five years, of which the preceding budget represents the first year. The remaining four years (years 2 – 5 of the plan) serve as an advance planning tool to identify anticipated future projects.

In addition, the City is measuring and planning for deferred maintenance needs that extend significantly beyond five years. The 5-year CIP is a “snapshot” in time of in which the City can anticipate needs for future infrastructure revitalization funding in more detail. As a dynamic planning document, the CIP for years 2 through 5 is subject to change as updated information becomes available. The 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 as in the current year.

The following are key projects and preliminary budget estimates, by asset category, for years 2 to 5 of the CIP.
68 ATTACHMENT 2

KEY PROJECTS AND FUNDING NEEDS FOR YEARS TWO THROUGH FIVE OF THE CAPITAL IMPROVEMENT PLAN (CIP) Category/Project Estimated Category/Project Estimated
Drainage Scenic Drainage Improvement & Pathway
Restoration Construction Phase 1* 1,500,000
Scenic Drainage Improvement & Pathway
Restoration Planting Monitoring Phase 2 * 300,000
Drainage Improvement Project - 1,500,000
Mission Bypass Pipe - Design * 415,000
7,330,000 3,000,000 715,000
Streets Street Improvement Project A - Construction 800,000 Street Improvement Project C - Design * 193,600 Street Improvement Project B - Design * 176,000 Street Improvement Project B - Construction * 880,000 Street Preventative Maintenance Project -
Design and Construction * 700,000
Street Preventative Maintenance Project -
Design and Construction * 500,000
Sidewalk Improvement Project -
Construction Phase 1 * 500,000
Sidewalk Improvement Project - Construction
Phase 2 * 600,000
Sunset Center Retaining Walls, Sidewalk,
Fence - Design * 450,000
Sunset Center Retaining Walls, Sidewalk,
Fence - Construction * 1,200,000
Children's Library Drainage and Parking Lot
Resurface - Design * 150,000
11,029,616 2,626,000 3,523,600
Facilities ADA Upgrades 20,000 ADA Upgrades 20,000
Facility Condition Assessment 200,000
Flanders Window and Gutter Repair * 100,000
City Hall Shingles and Windows * 500,000
Fire Station Window Upgrades * 20,000
Police Station / Public Works Architecture -
Design *
Picadilly Restroom Construction * 600,000
Back-up Generator Transfer Switch for City
Hall and Vista Lobos 200,000
2,400,000 940,000 720,000
Forest/Park/Beach Sand Ramp 8th Avenue Repair Project - Design and Permitting* 0
Sand Ramp 8th Avenue Repair Project -
Construction * 2,000,000
North Dunes Habitat Restoration Area -
Invasive Species Removal 200,000
North Dunes Habitat Restoration Area -
Planting 100,000
Shoreline Infrastructure Repairs * 200,000
Carmel Beach Climate Adaption & Coastal
Resiliency Program - Studies, Design, CEQA 650,000
Carmel Beach Climate Adaption & Coastal
Resiliency Program - Implementation 300,000
4th Ave Outfall - Design * 900,000 4th Ave Outfall - Permitting 0 Mission Trail Nature Preserve - Stream
Restoration/Trail Resiliency Design * 175,000
Mission Trail Nature Preserve - Stream
Restoration/Trail Resiliency Permitting * 400,000
14,775,000 2,125,000 2,800,000
Project Management CIP Contingency 600,000 CIP Contingency 600,000 Project Managers (3 FTE) 690,522 Project Managers (3 FTE) 707,785 5,267,403 1,290,522 1,307,785
Fleet PW Water Truck (1994 Ford SD) 125,000 PW EV Truck (2005 Ford LCF) 125,000 PD Patrol Vehicle EV (2019) 75,000 PD Dectective Vehicle EV (2017) 75,000 PD Parking Vehicle EV (2014) 45,000 PD Patrol Vehicle EV (2020) 75,000 PW Backup Portable Generator 90,000
1,010,000 245,000 365,000
Years 2-5 CIP $41,812,019 Total Year 2 $10,226,522 Total Year 3 $9,431,385 Carryover Budget from Prior Years (1,525,000) Carryover Budget from Prior Years (70,000) FY 2027/2028 Budget Need $8,701,522 FY 2028/2029 Budget Need $9,361,385 * Deferred Maintenance
Year 3
FY 2028/2029
Years 2 - 5
CIP
Year 2
FY 2027/2028
FY 27/28 FY 28/29
Drainage
Streets
Facilitie
s
Forest/Park/Beach
Project
Management Fleet
69 ATTACHMENT 2

KEY PROJECTS AND FUNDING NEEDS FOR YEARS TWO THROUGH FIVE OF THE CAPITAL IMPROVEMENT PLAN (CIP) Category/Project Estimated Category/Project Estimated
Drainage
Drainage Improvement Project - Design * 865,000
Mission Bypass Pipe - Construction * 2,750,000
2,750,000 865,000 7,330,000
Street Improvement Project C - Construction 968,000 Street Improvement Project E - Design * 234,256 Streets Street Improvement Project D - Design * 212,960
p j
* 1,064,800
Street Preventative Maintenance Project -
Design and Construction * 400,000
Street Preventative Maintenance Project -
Design and Construction * 400,000
Sidewalk Improvement Project - Design * 300,000
Sidewalk Improvement Project - Construction
Phase 1 * 700,000
Children's Library Drainage and Parking Lot
Resurface - Construction * 600,000
2,480,960 2,399,056 11,029,616
ADA Upgrades 20,000 ADA Upgrades 20,000 Facilities
Facility Repairs * 300,000 Facility Repairs * 300,000
Public Works Roll-up Doors (2) * 100,000
420,000 320,000 2,400,000
Forest/Park/Beach
4th Ave Pathway Monte Verde to San
Antonio - Design 400,000
Carmel Beach Climate Adaption & Coastal
Resiliency Program - Implementation 200,000
Carmel Beach Climate Adaption & Coastal
Resiliency Program - Monitoring 150,000
4th Ave Outfall - Permitting and 2,500,000 4th Ave Outfall - Construction * 2,500,000 Mission Trail Nature Preserve - Stream
Restoration/Trail Resiliency * 100,000
Mission Trail Nature Preserve - Stream
Restoration/Trail Resiliency * 4,000,000
3,200,000 6,650,000 14,775,000
CIP Contingency 600,000 CIP Contingency 600,000 Project Management Project Managers (3 FTE) 725,480 Project Managers (3 FTE) 743,617 1,325,480 1,343,617 5,267,403
PW Maintenance Truck (2008 Ford F350) 125,000 PW Maintenance Truck (2012 F250) 125,000 Fleet PD Patrol Vehicle EV (2016) 75,000 PD Patrol Vehicle EV (2020) 75,000 200,000 200,000 1,010,000
Total Year 4 $10,376,440 Total Year 5 $11,777,673 Years 2-5 CIP $41,812,019 FY 2029/2030 Budget Need $10,376,440 FY 2030/2031 Budget Need $11,777,673 * Deferred Maintenance
Years 2 - 5
CIP
Year 4
FY 2029/2030
Year 5
FY 2030/2031
FY 29/30 FY 30/31
Drainage
Streets
Facilitie
s
Forest/Park/Beach
Project
Management Fleet
70 ATTACHMENT 2

OTHER FUNDS
71 ATTACHMENT 2

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 C 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 reserve at no less than 50% of annual projected operating expenditures.

Hostelry Fund (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.

Measure C Sales Tax (Fund 206)
Carmel voters approved a temporary (10 year) 1% increase in the transactions and use tax in 2012 known as Measure D. On March 3, 2020, voters approved Measure C, which increases the tax to 1.5% for 20 years. Measure C may be used for debt service, capital projects and general City services. Fund 206 is used to house revenue from these tax sources.
72 ATTACHMENT 2

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 (Fund 203)
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
73 ATTACHMENT 2

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 502) This fund houses dollars for other post-employment benefits.

Vehicle and Equipment Replacement Fund (Fund 503)
This fund is to set aside to house financial resources for future purchases of replacement equipment essential to the operations of the City. A reserve will be maintained with a target of 10% the total fleet replacement value.

AGENCY FUNDS
Refundable Deposits (Fund 601)
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. 74 ATTACHMENT 2

PROJECTED FUND BALANCES
75 ATTACHMENT 2

Audited Estimated
Fund Description
Fund Balance
June 2025
Revenue &
(Expenses)
Transfers In &
(Out)
Fund Balance
June 2026
Unspendible Prepaid Items $14,936 $0 $0 $14,936
Restricted funds
101 General Fund 115 Trust 4,438,844 - 1,000,000 5,438,844 201 Gas Tax - 170,993 (170,993) -
202 Transportation Safety - 244,137 (244,137) -
203 COPS 46,425 100,000 (100,000) 46,425
204 Parking in Lieu 788,677 - - 788,677
205 Asset Seizure 5,838 - - 5,838
206 Local Measure Sales Tax - 6,900,734 (6,900,734) -
401 Debt Service 34,807 (509,100) 509,100 34,807
501 Worker's Comp - (127,000) 127,000 -
502 OPEB Reserve - - - -
503 Veh & Eq Replacement - (1,210,000) 1,210,000 -
LIB Library 1,520,824 - - 1,520,824
Committed funds
102 Hostelry Reserve - 9,526,737 (9,526,737) -
Assigned funds
101 General Fund Reserve 15,997,900 46,996 16,044,896
301 Capital Projects 4,702,557 (5,109,916) 6,607,359 6,200,000 Unassigned funds
101 General Fund 17,055,685 (12,667,993) 7,442,146 11,829,838 $44,606,493 ($2,681,408) $0 $41,925,085
Estimated Estimated
Fund Description
Fund Balance
June 2026
Revenue &
(Expenses)
Transfers In &
(Out)
Fund Balance
June 2027
Unspendible Prepaid Items $14,936 $0 $0 $14,936
Restricted funds -
101 General Fund 115 Trust 5,438,844 5,438,844
201 Gas Tax - 183,106 (183,106) -
202 Transportation Safety - 247,373 (247,373) -
203 COPS 46,425 100,000 (100,000) 46,425
204 Parking in Lieu 788,677 - - 788,677
205 Asset Seizure 5,838 - - 5,838
206 Local Measure Sales Tax - 7,023,597 (7,023,597) -
401 Debt Service 34,807 (518,900) 518,900 34,807
501 Worker's Comp - (127,000) 127,000 -
502 OPEB Reserve - - - -
503 Veh & Eq Replacement - (535,000) 535,000 -
LIB Library 1,520,824 - - 1,520,824
Committed funds
102 Hostelry Reserve - 9,764,905 (9,764,905) -
Assigned funds
Housing Fund 1,000,000 1,000,000
101 General Fund Reserve 16,044,896 592,038 16,636,933
301 Capital Projects 6,200,000 (7,953,680) 7,953,680 6,200,000 Unassigned funds
101 General Fund 11,829,838 (10,859,451) 6,592,363 7,562,750 $41,925,085 ($2,675,050) $0 $39,250,035
Projected Fund Balances June 30, 2026
Projected Fund Balances June 30, 2027
76 ATTACHMENT 2

FINANCIAL POLICIES
77 ATTACHMENT 2

BUDGET POLICIES AND GUIDELINES
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 balance 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 fulltime 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.
78 ATTACHMENT 2

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. A capital improvement project is typically a permanent structural change to a property or asset to prolong its life, increase its value, or enhance its capabilities. As used in the CIP, projects include land acquisition, buildings and facilities construction, asset upgrades or large-scale maintenance work and the planning needed to facilitate plans and implementation for infrastructure (for example, the Housing Element), including the cost of project management. 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 $50,000 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.

Annual operating budgets should provide adequate funds for maintenance of the City’s buildings and maintenance and replacement of the City’s capital equipment. The City will make all capital improvements in accordance with an adopted and funded capital improvement program. Prior to ratification of the capital budget for the forthcoming year by the City Council, 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 a minimum of ten percent (10%) 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. 79 ATTACHMENT 2

8. The City shall maintain a capital reserve policy as described in the Capital Project 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.

OPERATING BUDGET POLICY
Operating revenues shall exceed operating expenditures.

Guidelines:

1. Total Expenditures, excluding CIP, shall not exceed 90% of budgeted Revenue.

2. A balanced budget is a budget in which total funding sources meet or exceed uses.

3. Ongoing expenses shall not be funded with one‐time revenues.

4. The City shall establish salary adjustments in conjunction with the budget process.

5. 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.

FINANCIAL POLICIES AND GUIDELINES
The City of Carmel‐by‐the‐Sea has strong financial policies, based on City Council direction, which guide staff toward carrying out sound fiscal planning and continued management of fiscal integrity. The financial policies are divided into five categories:

Capital Project Policy, 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;
80 ATTACHMENT 2

• 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 PROJECT POLICY
Capital expenditures shall be effectively planned and controlled. Capital projects that have not been completed by the fiscal year-end will be carried over into the subsequent fiscal year. Fund balance equal to the remaining balance of the uncompleted projects will be reserved.

OPERATING MANAGEMENT POLICY
Operating revenues shall exceed operating expenditures.

Guidelines:

1. The City shall establish internal service funds for the repair, operation, and replacement of rolling stock and data processing equipment.

2. The City shall review the relationship between fees/charges and the cost of providing services at least every three years.

3. The City’s fees and charges for services shall be adjusted annually, based upon the San Francisco‐Oakland Consumer Price Index.

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.

Guidelines:

1. General Fund reserves shall be maintained at no less than fifty percent (50%) of annual projected operating expenditures.

2. The City shall maintain prudent reserves for operating liabilities and debt service.

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. 81 ATTACHMENT 2

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. 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. 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.

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 82 FINANCIAL POLICIES 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, 82 ATTACHMENT 2

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.

4. 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.

5. 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 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.
83 ATTACHMENT 2

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 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. 84 ATTACHMENT 2

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.

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. 85 ATTACHMENT 2

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 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 86 ATTACHMENT 2

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 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. 87 ATTACHMENT 2

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.

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 88 ATTACHMENT 2

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. 89 ATTACHMENT 2

Detail of Expenditure Adjustments Through Budget Development (a) (b) (a) + (b) = (c) (d) (c) + (d)
Department Description Original
Budget Ask
PreWorkshop
Cuts
Draft
Budget
PostWorkshop
Increases
Final
Budget
Forestry Contract Services- tree maintenance $ 600,000 $ (300,000) $ 300,000 $ 300,000 $ 600,000 Forestry Contract Services- fuel mitigation projects 300,000 (150,000) 150,000 150,000 300,000 Forestry Contract Services- landscaping maintenance 250,000 (50,000) 200,000 50,000 250,000 Attorney Seek more focused legal council utilization 442,000 (47,000) 395,000 - 395,000 Plan/Build Digitization, consultants 85,000 (45,000) 55,000 45,000 100,000 Finance Fewer TOT and sales tax audits 30,000 (17,500) 12,500 - 12,500 Police Look for grants for safety equipment & supplies 18,750 (12,750) 6,000 - 6,000 Council Reduce charitable grants 36,000 (11,000) 25,000 - 25,000 Comm Activities Holiday decorations 12,900 (5,400) 7,500 5,400 12,900 Human Res. Records digitization 10,000 (5,000) 5,000 5,000 10,000 Human Res. Less records digitization 10,000 (5,000) 5,000 - 5,000 Human Res. Employee appreciation expenditures 18,500 (3,500) 15,000 3,500 18,500 Comm Activities Fewer and smaller advertisements 7,425 (2,425) 5,000 - 5,000 Information Tech Seek reduced software subscription costs 227,830 (22,783) 205,047 - 205,047 Environmental Seek contract services reductions 56,250 (21,750) 34,500 - 34,500 Street Maint. Seek contract services reductions 20,000 (10,000) 10,000 - 10,000 City Facilities Seek contract services reductions 643,200 (64,320) 578,880 - 578,880 City Clerk Less records digitization 5,000 (5,000) - - - Street Maint. Reduced materials and supplies 89,000 (8,900) 80,100 - 80,100 Street Maint. Reduced tool and equipment purchases 12,000 (1,200) 10,800 - 10,800 Public Works Reduced office supplies 6,600 (1,600) 5,000 - 5,000 City Facilities Reduced office supplies 80,500 (8,050) 72,450 - 72,450 Administration Conferences and trainings 7,700 (3,900) 3,800 3,900 7,700 Human Res. Employee trainings & education 1,000 (500) 500 500 1,000 Information Tech Conferences and trainings 10,000 (2,500) 7,500 2,500 10,000 Public Works Conferences and trainings 13,500 (3,000) 10,500 3,000 13,500 Human Res. Human Resources conferences and trainings 1,800 (1,800) - 1,800 1,800 Information Tech IT conferences and trainings 5,500 (1,500) 4,000 1,500 5,500 Council Conferences and trainings 5,200 (5,200) - 5,200 5,200 Vehicle&Equip. Beach rescue vehicle - - - 30,000 30,000 CIP Storage area for beach rescue vehicle - - - 30,000 30,000 Council Community Promotions 128,500 (16,000) 112,500 5,000 117,500 Council Meetings 31,550 (18,600) 12,950 8,000 20,950
Vehicle&Equip. Animal control vehicle 75,000 - 75,000 (75,000) - Econ Dev Visit Carmel 120,000 (30,000) 90,000 (90,000) - ATTACHMENT 3

Attachment 4
1 FY 26-27 Budget Questions

1. What were the causes behind the 3% rise in the City’s unemployment rate as presented in the FY25 ACFR? (T. Twomey 3/24/26)
The City reports unemployment rates as published by the State of California Employment Development Department (EDD). The City of Carmel-by-the-Sea unemployment rate is 4.3%, below both Monterey County and California rates. It has been recently reported that Monterey County’s unemployment rate climbed to 10.6% in January 2026, almost double the California statewide rate of 5.5%. The exact cause of the rise in the City’s unemployment rate is unknown and most likely a combination of multiple factors such as slowed hiring, high cost of living, and regulatory and wage pressures. A rise in the unemployment rate can sometimes be a statistical anomaly where residents who were previously out of the labor force (retired or living off assets) start looking for work again and are counted as unemployed until they find a role.

2. Is there a granular list of those items that make up the reserved budget dollars for future years? (N. Twomey 3/24/26)
As of June 30, 2025, per the most recent audited financial statements, the fund balance reserves were comprised as follows:

Nonspendable:

Prepaid items $14,936 Nonspendable Amounts that cannot be spent because they are not in spendable form, or are legally or contractually required to be maintained intact.

Restricted: Restricted Amounts subject to externally enforceable legal restrictions.

Transportation 46,425 Grant received for the purpose of road & transportation improvements.

Debt service 34,807 Funds set aside for debt payments.

Library 1,520,824 Funds belonging to the Library Special Revenue fund.

Asset seizure 5,838 Funds held according to the rules for seized assets.

Public parking 788,677 Funds held according to the rules for parking mitigation.

Pensions 4,438,844 115 Trust holding funds for payment of the Unfunded Pension Liability.

Assigned: Assigned Amounts intended to be used for specific purposes, but do not meet the criteria of restricted or committed.

Operational
reserves
15,997,900 Operations reserve held according to City policy.

Capital projects 4,702,557 Unspent portion of approved Capital Improvement Projects.

Unassigned 17,055,685 Unassigned The residual classification for the general fund; may be positive or negative. In other funds, it represents deficit balances.

Total fund bal. $44,606,493

Attachment 4
2 3. Please provide a breakdown of the major balance sheet accounts as of the end of FY 26- 27 (projected) -- unassigned fund balance, opex reserve, etc. (Buder 5/5/2026) With the above audited financial statements as a starting spot, we can begin to project the impact that the budget will have on the fund balance. Based on the significant investments being made in Capital Outlay, an operating deficit of $2.1 million is forecast for FY 25-26. A further deficit of $2.2 million is budgeted for the FY 26-27 fiscal year. In addition to these uses of fund balance, the last of five years of $1 million set-asides to the 115 Trust took place in FY 25-26. The proposed FY 26-27 budget includes a new $1 million set-aside for a Housing Trust fund. As a result, the net CIP reserve and Available fund balance is forecast to decrease from $21.8 million as of June 30, 2025 to $15.4 million as of June 30, 2027.

4. Why does the additional $1M pension mitigation payments end in FY26-27 in the City’s 5-year forecast? (N. Twomey 3/24/26)
For forecasting purposes, FY26-27 included a proposed $1M contribution to a Housing Trust Fund rather than continuing contributions to the Section 115 Pension Mitigation Trust for Council to consider and provide direction. There is no Resolution that requires the City to make an annual pension mitigation contribution after FY25-26, it was voluntary each year.

5. Not considering Fire and Ambulance, what are we contracting or consulting out? In some cases, would it be cheaper to bring it back in house? (H. Ross 3/24/26) The City uses approximately 120 contract service vendors throughout its departments. Please see Exhibit A at the end of this document for a list with services provided. Most of the City’s contractors are niche services that require highly specific skills which are only utilized by the City for limited periods of time. During the budgeting process, Administration reviews with each Department their need for services and explores whether it can be performed in house or needs support from contractors or consultants.

6. Should the City be considering being self-insured for health insurance? Can analysis be done to see if that would save the City money over insuring out? There may be some risk in being self-insured, but it is worth looking at. (H. Ross 3/24/26)

Attachment 4
3 The City’s current health plan expenditure is approximately $2.3 million, at an average cost of roughly $26k per employee. With fewer than 100 employees, the City’s risk exposure is significant.

We have explored participation in risk pools and JPA healthcare structures, but given our location in one of the more medically expensive regions in the state, we have not qualified for program membership that would mitigate claim risks. The City has explored options over the years and remains committed to continuing to evaluate available options as part of our long term financial planning efforts, and will do so again this year.

7. It would be interesting to see a headcount from 5 or 10 years ago to now to understand have we really added employees or have employee levels stayed the same and we are just adding salaries. (H. Ross 3/24/26)

Attachment 4
4 8. What if the City Hall property was sold to help contribute to the funds needed to create a City Hall/Police/Public Works building, creating a centralized governmental facility? (? 3/24/26)
During the Strategic Priorities Planning Session in January, the City Council briefly discussed selling some of its properties, but quickly determined that it was not a priority to begin exploring what this would look like.

9. Can we see a commitment by the administration to improve services instead of asking the Council to trade-off services to lower our expenses? How did we survive the same level of services back in 2021 that didn’t require a huge amount of increase in expenses? Can we get by with the staffing levels we had in 2021 and what would that impact be? (J. Beck 3/24/26)
Fiscal Year 2021 was an anomaly due to the immediate response to the pandemic, which included reduced travel, limited in-person interaction, and temporary changes in service delivery expectations. During that period, the City reduced staffing levels and limited expenditures in response to revenue reductions, while demand for certain municipal services also temporarily decreased. As noted in question #7 above, the City has historically operated with approximately 80–90 employees to maintain normal service levels. The expenditure reductions reflected in the proposed budget are not intended to reduce service quality, but rather to reduce or defer certain internal system upgrades, limit the use of third-party contracted services where feasible, and maximize available in-house staff capacity. The City would not be able to operate effectively with 68 employees without significantly increasing reliance on contracted services and external consultants. In practice, this would shift expenditures from in-house staffing to outside service providers in order to meet ongoing operational demands, including tree maintenance, roadway repair and infrastructure maintenance, administration of a high volume of business and residential construction activity, increasing environmental compliance requirements, and other core municipal services that continue to drive workload demands across departments. It is also worth noting that five of the employees that make up the total count are the City Councilmembers.

The City will be looking to recategorize these positions so that the total (working) employee count is not overstated.

10. How many more years of payments do we have on the Sunset Center 2020 Refunding Lease Revenue Bonds? (Dramov 3/24/26)
The final debt service payment will be made in the Fall of FY 2033. Therefore, there are seven more annual payments to be made.

11. When I think of something that’s called deferred maintenance, it is going to be delayed with a certain factor of time. When the City is deferring maintenance, what is your time frame? And why are the same items identified in the budgeted CIP and on the deferred maintenance list? (M. Ruess, 4/6/2026)
The deferred maintenance list are things that have been deferred in the past that the City has not done and need to catch up on, not things that the City will be deferring more into the future. This

Attachment 4
5 is why you see the same things listed in the CIP because that is the City taking action to do the things that are on the deferred maintenance list. .

12. What happened to the Sunset Center North Lot electrical vehicle project? (A. Dramov 4/6/2026)
A budget of $100,000 had previously been allocated in the FY 2024–25 Adopted Budget for the Sunset EV North Lot electrical panel upgrade. This amount has been combined into the Vista Lobos EV Charging Station and building electrical panel project and will be carried forward after Vista Lobos is completed.

Design for the Sunset EV North Lot upgrade is approximately 75% complete, but moving the project forward will require finishing the design and obtaining an engineer’s cost estimate.

Once the final estimate is available, additional funding will be needed so the project will come back to the City Council for their consideration.

13. Are there any kind of grants that the City could apply for that could help with some of our Beach/Environmental CIP project costs? (A. Dramov & M. Ruess 4/6/2026) The City has been looking out for grants and have applied for a few, but the City is not qualifying for many of them. We continue to keep our eyes out, while keeping in mind the overhead required to manage these grants as we look for opportunities.

14. Instead of splitting out a project over multiple years, could we do it as a complete project and maybe negotiate the price of the project down? Why defer it? (M. Ruess 4/6/2026)
While it may appear more efficient to complete a project all at once, most public sector capital improvement projects require several phases before construction can begin. These phases typically include project initiation and scoping, pre-design and feasibility analysis, environmental review and permitting, design development, bidding or procurement, and ultimately construction. Each phase also contains multiple supporting tasks such as surveys, engineering, cost estimating, agency coordination, public outreach, environmental compliance, and contract review.

Attachment 4
6 As a result, larger or more complex projects often span multiple fiscal years regardless of whether the construction itself occurs in a single phase. In some cases, projects are intentionally phased to align with available staffing, consultant support, permitting timelines, seasonal construction limitations, or funding availability. While the City always seeks competitive pricing and opportunities to reduce overall project costs through efficient procurement and negotiation, the primary reason for deferring portions of projects is the practical reality that there are limits to how many large-scale projects can be effectively designed, managed, permitted, and constructed at the same time.

15. Maybe
the City
should look at options of selling Flanders Mansion and keeping the land around it before repairing it? (M. Ruess 4/6/2026)
During the Strategic Priorities Planning Session in January, the City Council identified the potential for selling some of its properties but determined that it was not a priority for the current year.

16. I was hearing during the meeting that our "Sales Tax Cap" is 9.25. I'm not questioning the 9.25 number itself - as above yet. But is this really a "cap"....or can it be adjusted (as long as it is on a ballot and passed - just like our Measure C)? (N. Twomey 4/9/2026) The state collects 7.25% for itself and its programs, and then the State says that cities, counties and districts are allowed to add-on up to another 2%. Thus, the "cap" is 9.25% and cities/counties/districts must share the 2%. That being said, the State does give exemptions from this cap, resulting in some jurisdictions having a sales tax rate as high as 10.5%. In Monterey County, TAMC was given just such an exemption, thus the TAMC measure does not count toward the 2%.

17. I thought that the .38% - is/was included in our current 9.25 tax rate as above in current/previous years - when it should be separate and not included in this total. (This tax came from a TAMC under measure X - which may or may not be very relevant). But is this tax still being collected separately? or at all? explain please. (N. Twomey 4/9/2026)

Attachment 4
7 The TAMC 0.375% is still a valid, active tax being collected and remitted to the TAMC program.

18. Is this now reclassified above as "available sales tax of .38%" - really new? or is it that we are simply "claiming it officially" in this forthcoming process? (N. Twomey 4/9/2026) The municipalities in Monterey County have recently come to understand that the TAMC tax is not a part of the 2%, thus the availability of the 0.375% appears to be "new", even though the taxes are old.

19. If we are simply claiming it for the City (instead of other taxing entities) - why is it needed to be on a ballot? (Because as I see it - we wouldn't be increasing our total sales tax.) (N. Twomey 4/9/2026)
It is a new tax for the City; sort of a "C+" as it is the same process and type of tax as Measure C is. It would increase the total tax rate within the City by 0.375% because the TAMC tax is still in place. Our new sales tax rate would increase to 9.625%

20. If we don't, or any viable taxing entity doesn't, claim this .38% officially via any path - would our Sales tax decrease from .38%? (N. Twomey 4/9/2026) As stated above, the tax rate does not go down as all the current measures are still outstanding, including the TAMC 0.375%.

21. I’d like to see a detailing of the items listed highlighted in the Operating Expenditure Cuts slide. (Baron, N. Twomey 5/5/2026)
The focus of operating cuts made to achieve the 85/15 goal centers around:
•Slowing down upgrading and modernization projects like digitizing files •Trimming back the tree program to only slightly more than a maintenance-level of effort •Reducing landscaping expenditures
•Scaling back climate action initiatives
•Decreasing holiday event expenditures
•Asking Departments to review all contracts with direction to reduce those contract amounts by 10%
•No new Cost of Living Adjustment (“COLA”) to salaries for Represented and At-Will employees See Exhibit B for more detail of the cut made to the proposed FY 26-27 budget.

22. Are Council Members considered employees? City Council receives a stipend and not salaries. (Dramov 5/5/2026)
Although Council Members are not City employees, they are part of our employee/payroll system.

They are issued a W-2 and eligible for health, dental, vision, and retirement benefits if they choose to participate. This is why the City has included them as part of our employee number count in all of its budget and fiscal reporting as representing five (5) employees.

23. The Vista Lobos Electrical Panel CIP project is listed at $560K in the Recommended Budget Book though we saw yesterday an amount of $295K. Can you clarify the discrepancy? (Buder 5/5/2026)

Attachment 4
8 The City Council approved a not‑to‑exceed amount of $350,000 for the Vista Lobos EV Charging Station Project. As part of this action, the Council awarded a $295,829 contract to GA Technical for the Vista Lobos Electrical Panel Upgrade and EV Charging Stations Project, which is a carryover project from FY 2024–25.

In addition to the contract amount, the project budget also includes:
● $35,000 for the purchase of EV charging equipment
● $65,000 for consultant services, including design work, bid and award support, and construction support
This brings the total project cost to approximately $460,000.

Separately, $100,000 had previously been allocated in the FY 2024–25 Adopted Budget for the Sunset EV North Lot electrical panel upgrade. This amount has been included along with the above in the project total.

24. Can you provide the total interest and investment income the City is earning on our $40M fund balance? Can you outline what those funds are invested in and their respective returns profile and some of the constraints on how the money can be invested? (Buder 5/5/2026)
Footnote 2 of the audited financial statements for the fiscal year ended June 30, 2025 outlines the City’s investment policies and constraints in detail. In general, the City is restricted to investments with a five year maturity of less, with US Treasuries and Bonds at the long end and bankers acceptances, commercial paper and interest bearing accounts at the short end. During the year, the City kept a small portfolio of laddered investments and moved the rest of its available funds into interest bearing accounts while it evaluates its medium and long-term cash flow needs.

At this time, all of the City’s funds are earning returns generally in the range of 3.4% to 4.3%.

25. Was the presentation of an 85/15 budget postponed or was it decided not to pursue the 85/15 budget simultaneously with the 90/10 budget? In prior meetings the expectations I understood the ask was to see a 90/10 and a 85/15 version or at least summary - such that a decision could be made by Council that could understand the impact of the deeper reduction in operational expense. The transparency in this would help understand what "give" in this deeper view. (N. Twomey 5/5/2026) The City carefully reviewed current expenditures and future plans from the bottom up, and has come back with a budget which gives a starting point at 84%. As the 84% base budget is already less than the 85% “alternative”, the decision was made that starting with the one budget would be best. The question before the Council now is to evaluate cuts that have been made to date and whether they should remain in place.

26. Can you explain the 85/15 budget approach? (C. Theis 5/5/2026) It is the policy of the City that no more that 90% of budgeted revenues be spent on operating expenses and at least 10% of budgeted revenues be spent on Capital Outlay Faced with the need to address $100 million of deferred maintenance needs, the City Council asked the City to look for additional savings that might move the City closer to a budget where only 85% of budgeted

Attachment 4
9 revenues was spent on operating expenditures. The draft budget being presented shows 84% of revenues budgeted for operating expenses.

27. Do we have the staff capacity to handle the combined carryover and recommended CIP projects ($10M total) for FY26-27? I would like to have a better sense of staff capacity especially within the capital project arena. (C. Theis 5/5/2026) Assuming the City is fully staffed, including the proposed Capital Program Manager position, we believe there is sufficient organizational capacity to manage the combined carryover and recommended FY26–27 Capital Improvement Program projects. However, it is important to recognize that “capacity” within a capital program environment does not necessarily mean that all projects will be designed and constructed within a single fiscal year.

Many public infrastructure projects are multi-year efforts due to their size, complexity, permitting requirements, environmental review, consultant coordination, bidding timelines, utility coordination, seasonal construction limitations, and public outreach needs. As a result, the CIP budget reflects projects that may be in different phases simultaneously, including planning, predesign, environmental review, design, permitting, procurement, or construction. In practice, staff manages a portfolio of projects progressing concurrently through different stages rather than delivering every project to construction completion within the same year.

The CIP budget also reflects the prioritization outlined in the Five Year Plan. Said another way, not all of the projects carried over in the $10 million total are slated to be completed in FY 26-27.

28. Should we use the Section 115 Trust funds to pay down the CalPERS unfunded pension liability? (Delves 5/5/2026)
The 115 Trust currently provides several benefits:
- The composition of its investments is designed to move in the opposite direction of the retirement system’s investments in order to potentially offset unexpected losses in the primary retirement investment pool.
- The amounts in the trust are available in times of fiscal crisis at the City so that the City can meet its required annual payments.
- In times of underperformance in the primary retirement pool, the required pension contributions can escalate dramatically. The funds in the 115 Trust can be used to cover those significant and unexpected increases.

The decision on if/when to use the Section 115 Trust dollars must be made by the City Council.

The City will invite the firm responsible for managing the Trust to share more information on its construction and operations with the Community and the City Council.

29. What is the City’s obligation to the State for the Housing Trust? Are we having to commit a payment to this every year? (Delves/Dramov 5/5/2026) Program 2.1.D of the adopted Housing Element (and the current draft amendment in process) requires the establishment of an affordable housing trust fund in an effort to establish a Cityfunded source dedicated to supporting the creation, maintenance, and rehabilitation of affordable units. In other words, the City has committed to establishing the fund. The source of the funding

Attachment 4
10 was not committed to within the Housing Element, just the total amount of $1 million. The City has no obligation to commit more than $1 million, and no obligation to pay into the trust on an annual basis. The mechanism for who is eligible and how these funds would be accessed for building affordable housing will be determined through implementation of the program, which will include an ordinance or resolution adopted by the City Council.

30. We're expecting to spend $2.64 M on the ambulance. How much are we projecting in ambulance revenue? What are the prospects for further increasing ambulance revenue? Can the new found Ambulance revenues be restricted to CIP use? (Buder 5/5/2026) Based on historic runs and current pricing, the ambulance is expected to earn approximately $700 thousand on a combination of runs inside and outside of the City. In the current year AMR, the County’s carrier, has agreed to pay an additional $2 thousand for each run outside the City. This adds another $700 thousand to the budget based on the number of runs historically made, resulting in an annual revenue budget of $1.4 million. At the same time, those runs outside the City may be diverted back to AMR as they have taken steps to increase their workforce.

A full picture of the ambulance’s financial performance as it evolves over time will help the City Council to make sound fiscal decisions. At this time the operations have been recently transferred to the City of Monterey and the new out-of-area service agreement with AMR is just starting.

While it is hoped that together the ambulance will be making more runs and will be reimbursed for costs to a greater degree, these changes have yet to be realized and the ambulance will continue to be operating at a deficit.

31. Is the $150,000 budgeted for fire fuel mitigation work sufficient to cover all of the projects in the draft Fire Defense Plan, including the work contemplated for Mission Trail Nature Preserve, Pescadero Canyon, and the City's designated evacuation routes? (Buder 5/5/2026)
The FDP had an estimate of $300,000 for fuels work. The proposed $150,000 budget for fire fuel mitigation work is not sufficient to complete all of the projects and recommendations in FY26/27 that are identified in the draft Fire Defense Plan, including work associated with Mission Trail Nature Preserve, Pescadero Canyon, and the City’s designated evacuation routes. However, the funding would allow the City to begin implementing portions of the Plan and address the higherpriority fuel reduction efforts.

It is also important to recognize that the City separately budgets approximately $300,000 annually for contracted tree maintenance work, including pruning and tree removals, which also supports several of the vegetation management and wildfire risk reduction objectives identified in the Fire Defense Plan. When viewed together, these programs collectively contribute toward implementation of the Plan’s goals.

The current funding proposal was developed as a starting point and reflects broader organizational direction to limit increases in operating expenditures where possible. As implementation progresses and priorities are further refined, staff can return to the City Council with additional funding requests or phased implementation strategies if it is determined that more resources are necessary to adequately address the full scope of the Fire Defense Plan.

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11 32. How much is in the budget for each of the following categories: tree planting, tree removal, tree pruning, and stump grinding? Please describe the underlying assumptions used to generate those budget numbers (e.g., we have X number of stumps in town, we plan to grind Y of them this fiscal year, and we assume a cost of $Z for each stump). (Buder 5/5/2026).

The proposed urban forestry budget should be viewed as a targeted, risk-based maintenance program rather than a fully comprehensive citywide maintenance cycle. The current request reflects organizational guidance to reduce operating expenditures while still addressing the City’s highest-priority tree and vegetation management needs. If conditions, emergencies, or Council priorities require additional work during the fiscal year, staff can return to the Council with supplemental funding requests or revised program recommendations.

The proposed budget currently includes approximately $300,000 for contract tree work. Based on recent work history and local contractor pricing, staff estimates that the majority of the contract tree budget will continue to be directed toward structural pruning activities (more thorough than just removing a dead limb), followed by removals, stump grinding, and replanting efforts. See also the tree question below, as it is reflected in these budgeted plans. Current planning assumptions estimate that approximately 60% (roughly $180,000 or 80 to 90 trees) of annual contract expenditures may be directed toward pruning work, approximately 25% ($75,000 or 15 to 20 trees) toward removals, approximately 10% ($30,000 or 50 to 60 stumps) toward stump grinding, and the remaining portion of 5% ($15,000 or 50 to 60 trees) toward replanting and establishment activities. In addition, we have $23,500 for purchasing trees and plants, which staff can plant. However, these percentages are not fixed and may shift significantly during the year depending on operational demands and emergency conditions.

33. What are the final numbers on the 3 year tree catch-up plan? How much did we spend in total and what were the outcomes (number of dead trees removed, number of stumps ground, number of poor condition trees pruned, etc.)? How many dead, poor, and very poor condition trees remain to be addressed? (Buder 5/5/2026) Based on the City’s 2024 inventory, all Dead trees have been removed and Very Poor Trees (VP) sites remain below 60. While pruning for "poor" condition trees was not part of the original budget, we have continued to prioritize the removal of trees that have declined since the last survey.

Stump data currently fluctuates as new removals have occurred post-inventory. Because funding was consolidated across dead tree removal in the catch up plan and general maintenance, providing a more granular cost breakdown for can be attributed specifically to the "catch-up plan" is challenging.

34. Is the $75,000 "animal control vehicle" to be used primarily/solely for animal control? What's wrong with the 2009 animal control vehicle? (Buder 5/5/2026) The proposed $75,000 animal control vehicle replacement is intended primarily for animal control operations and related field response activities. The vehicle supports daily operational needs such as responding to animal-related calls for service, transporting equipment and animals when necessary, patrol and enforcement activities, and coordination with public safety and community service functions. Depending on operational needs, the vehicle may also occasionally support other related functions, but its primary intended use is for animal control services.

Attachment 4
12 The existing animal control vehicle is a 2009 model and has reached the point where age, reliability, maintenance costs, and operational limitations are becoming increasing concerns. As vehicles age, the City experiences more frequent repairs, higher maintenance expenditures, increased downtime, reduced parts availability, and decreased reliability for daily field operations.

In addition, older vehicles may no longer meet current operational, safety, or efficiency standards expected for field response vehicles.

The replacement request is intended to proactively maintain dependable service levels, reduce long-term maintenance risks, and avoid the operational impacts associated with retaining an aging vehicle beyond its practical service life. The estimated budget also reflects current vehicle market conditions, outfitting requirements, and the specialized equipment often necessary for animal control and field response operations. That being said, the city will and does carefully consider the need against the cost before executing the capital plan.

35. The CIP budget includes $275k for design work for sidewalks, with actual construction occurring in the next fiscal year. Can you give us a rough estimate of how many linear feet of sidewalk is estimated to be replaced in this project over the two fiscal years? (Buder 5/5/2026)
An estimated 3,000 linear feet of sidewalk is included in the project cost calculation. However, the actual pricing will depend on the bids received when the project is formally bid and awarded, so the current figure remains an estimate and may change. In addition, street conditions vary by location, which can further affect pricing once prospective contractors evaluate the actual field conditions.

36. $2.4M Sand Ramp – Eighth Avenue Repair CIP: Why are we choosing not to follow the Integral Consulting December 2025 Carmel Adaptation Pathways report for this project? Integral's immediate recommendation is for regrading the ramp at the current location, protecting it against potential future erosion with sand redistribution, and monitoring triggers BEFORE moving to the 2045-2060 strategy. This immediate strategy can be handled out of operating expenses. The $2.4M draft budget book CIP looks to be Integral's 2045- 2060 1-ft SLR redesign and move strategy. (S. Lonergan 5/6/2026) Integral Consulting’s role is focused on climate change resiliency guidance, but they are not an engineering firm. While we continue coordinating with them, the actual design of the sand ramp must be completed by a licensed engineering firm, as required for shoreline infrastructure projects.

Regarding the sand redistribution, that activity is considered maintenance and operations work related to climate change adaptation and will likely be incorporated into the ongoing maintenance plan for the sand ramp rather than treated as a standalone design task.

Integral’s work is to review technical designs to ensure they align with the climate change adaptation program currently under development.

37. There has been a significant effort to remove dead/dying trees and remove totem poles (as possible) and stumps - on a 3 year plan. What does this item do to this prior plan? And/or I understand that PG&E has a very aggressive removal/trimming plan as well.

How do both of these come together or not? (N. Twomey 5/6/2026)

Attachment 4
13 The City has finished the work identified in the 3-Year Plan. That being said, there is always more work to do.

The City’s plans rarely intersect with those of PG&E, except for dead tree removals. However, their pruning isn’t designed for tree health; it typically results in "totem poles" that leave us with more wood to collect and manage.

38. Digitizing files - directly impacts the productivity of all property owners and our planning staff. Is there an impact here....or are the files that remain not in high demand? (N. Twomey 5/6/2026)
There is a small impact, but that was considered when balancing the organizational guidance to reduce operating costs. There will still be some progress on scanning and digitizing, but it will just take two fiscal years to complete the project rather than one. The majority of files remaining to be scanned are documents such as resolutions, contracts, ordinance, etc. There are also old construction plans on the list to be scanned as well. Both of these categories of documents are important, but are not in high demand.

39. In the initial draft of the Budget Book....this includes the 84/16 operations/capital spending as the assumption.
● Is it fair to assume that if and when the incremental revenue comes in from these new initiatives - that the general guidance is to guide these dollars to more of our Capital Projects backlog?
● With any new/incremental funds guided to Capital Projects - can we manage them effectively - especially considering the 2 incremental Project Manager/Engineers and replacement Director of Public Works? (N. Twomey 5/6/2026)
The Council may choose by adopting a budget policy to directly allocate new revenue sources to Capital Projects. This decision has not been made yet.

Assuming the Project Management team in Public Works is fully staffed, including the proposed Capital Program Manager position, we believe there is sufficient organizational capacity to manage a larger Capital Improvement Program.

40. One of the areas I'm interested in learning more about are the strategies and scope of contract reductions by 10%.
○ Is current contracting centralized by the enterprise or decentralized by department(A)?
○ If it's decentralized are there standard contract templates being used (B)? ○ For this initiative, approximately how many contracts are in play and what is the current annual spend on these (C)?
○ What is the target range of annual savings (D)?
○ Can you adjust service levels or scope to reduce cost without materially impacting outcomes (E)?
i. If not, what service level impacts, if any, are anticipated? ○ What are your strategies (E)?

Attachment 4
14 i. For example, are there incumbent suppliers with favorable terms that could be renegotiated, should you consider competitive bidding, or might it be a combination of both?
○ Are there opportunities to eliminate redundant or duplicate contracts, consolidate vendors, or standardize terms (E)?
○ What resources (team, tools, external advisors) are required, and what is the estimated effort and time to implement (E)? (T. Twomey 5/6/2026) A. Each department is responsible for managing their own contracts once they are in place, which would include renegotiation and searching for new vendors. The processing of contracts however, including invoicing, is centralized through City Administrative Services.

B. The City uses a standard contract template for services and standardized guidelines for CIP.

C. There are a great diversity of contracts in place. See Exhibit A.

D. While a target of a 10% reduction on contracts in total, the true savings to be achieved will come through evaluation of each individual contract’s terms and services provided.

E. The goal of this initiative is to reduce contract costs and not materially impact outcomes or service levels. There will be a combination of strategies used for this effort. With the number of contracts in place, the primary strategy will be to seek opportunities to negotiate terms. Departments will also be looking at things like possible redundancies of service providers, ways to consolidate services to realize savings, and services that are not currently being utilized. The City believes there are opportunities to eliminate redundant or duplicate contracts, consolidate vendors, or standardize terms.

42. What amount is in the operating budget for watering trees? What is proposed to be done by City staff vs. contractors? Does the City Forester believe that this amount is sufficient to water all newly planted and otherwise vulnerable City trees on a best practices schedule? Recognizing some level of seasonality, what is that approximate schedule (i.e., how many times per week in the wet season vs. dry season)? (Buder 5/8/2026)
There is currently no specific funding allocated for tree watering, as these duties have been absorbed by our sole landscape maintenance worker. In addition to watering, staff manages staking, planting, and irrigation repairs.

43. What is in the budget on CIP projects for quality control? Historically, who has been responsible for overseeing quality control on CIP projects? In other words, who checks on the work to approve final payment? What arrangements are contemplated for FY 2026-2027? (Buder 5/8/2026)
Public Works staff provides project oversight to ensure compliance with all plans and specifications. This includes conducting regular field meetings and oversight during construction.

The City does employ a consulting Construction Manager (CM) from time to time as need arises to handle daily on-site construction operation management and quality control in the field. The CM is also responsible for monthly quantity take-offs and quality verification prior to authorizing progress payments. Due to a current lack of dedicated inspection staff and limited internal capacity, we recommend continuing the use of a consulting CM or Inspector to maintain these

Attachment 4
15 essential oversight duties. The City plans to increase these inspection activities in the FY26/27 CIP in order to support a higher level of quality assurance when projects are completed.

44. Do the City's CIP contracts for things like painting, paving, etc. include a retainage provision? (Buder 5/8/2026)
Public Works CIP contracts include a retainage provision.

45. $3.5M Police Station / Public Works (PS/PW) Design CIP: Is it the case, or would it be best, that the $3.5M in PS/PW design funding only be committed AFTER we have clear line of sight that we are structured to achieve our housing element's commitments as will be reviewed as part of the 2027 Mid-Cycle Review?
If we commit $3.5M on a single-use design project, we may lose flexibility to consider this site's highest and best use. For example, the combined Vista Lobos and PS/PW facility location may be a prime candidate location for a public-private-partnership (PPP) project that delivers a new PS/PW facility, parking, and low income housing.

There is evidence that properly structured PPPs implemented through a competitive Request for Proposal (RFP) process can reduce municipal financial risk for large city development projects compared to traditional "in-house" design-bid-build methods.

Please retain this option until we have a clear line of sight that we are structured to meet our housing element commitments. (S. Lonergan 5/8/2026) The design of the police station / public works building has been listed as a current project so that the City can get the help of professionals to identify ideas and consensus. This opinion will be considered in that process.

46. The annual cost difference for Carmel to fund CalPERS benefits versus what private sector employers contribute in Social Security payroll taxes is presently about $4 Million per year. That alone represents over 10% of Carmel's annual revenue. That includes:

1. 6.9% interest Carmel pays on our $29+ Million UAL ($2+ Million)

2. the $1 Million Section 115 Contribution, which seems to be terminating after FY26 in favor of a $1 Million Carmel subsidy for affordable housing

3. the difference between CalPERS employer payroll tax contributions versus what private sector employers pay in social security payroll contributions

4. annual OPEB contributions
Over ten years that is $40 Million, which could fund a new Police Station.

CalPERS Pension costs and benefits are said to be on average 4 times greater than the social security benefits that private sector employee retirees receive. That is grossly unfair to us private sector employees and retirees who in fact fund most of the those CalPERS Pensions and OPEB via our property taxes, sales taxes and TOT.

Three related Questions:

1. The $1 Million contributions to the Section 115 Trust (total $5 Million) and now for Affordable Housing are being paid by restricting prior years' accumulated net

Attachment 4
16 reserves. Why are those Section 115 contributions not by being funded via the current years' operating costs?

2. Carmel appears to have $40+ Million in cash and investments on our Balance Sheet.

Why not pay off the $29 Million UAL and save the 6.9% interest? It appears that the interest/investment income being earned on the $40+ Million is significantly less than the 6.9% Carmel is paying on the UAL loan from CalPERS.

3. What is being done to address the cost of CalPERS Pensions and OPEB, and the disparity that exists between Government Employees and Private Sector Employees? Why can't the CalPERS Plan be terminated and replaced by Social Security? (D.Quinnert 5/9/26)
The Section 115 Trust and assignment to a Housing Fund are not expenses, but the City and Council could choose to spend less on Operating Expenditures and Capital Outlays in order to have more fund balance available to fund these set-asides.

While cash could be used to pay down pension debt, it would then not be available to pay for deferred maintenance. In addition, the 6.9% “interest rate” on the pension liability is actually the current base rate of return or crediting rate calculated by the pension, but the investments in the pension pool are earning a return that is greater than 6.9%.

Significant pension reforms were put into place, resulting in current benefits which are not accruing unfunded liabilities. Additional reforms could be considered but the City would still be liable for all benefits earned to date.

47. I have asked the following questions in writing via email for the past ten years to the broader City Council for which I have not had the courtesy of a response. a. Why does it take 9+ months every year to release the prior years' Audit Report? The largest publicly held corporations in the world release their numbers to shareholders well within 60 days after the close of their fiscal year. It is very challenging to properly manage a business when audited financial statements are not available for so many months.
b. Why are quarterly budget updates not provided to residents? Without this information, Residents cannot exercise oversight over the financial management of our City.(D.Quinnert 5/9/26)
The audit begins before the fiscal year has ended, but certain grants, taxes and other accruals require time after the end of the fiscal year to be quantified and recorded. That being said, nine+ months is not the time frame in which the report should be released. The City will be working closely with its external audit team to encourage a more rapid release of the audit.

Most cities utilize a mid-year budget review process. This year the City moved to a tri-annual review, giving the public its first look at operations sooner and giving a second look in time to adjust as needed. In addition, the City is working on ways to provide ongoing reporting that will enhance Fiscal Transparency.

48. Another area where I have been asking questions, albeit without response, over the past 11 years is in regard to transparency. I am not at all suggesting any underlying

Attachment 4
17 concerns or other motivation, just simply more and better data that would aid in financial oversight.

That said, my questions are as follows:
a. There is no detail associated with Other Income, which is a significant amount estimated to be nearly $5 Million. Apparently that broadly includes: Various Fees and Licenses, Ambulance Income, and Interest and Investment Income. I am particularly interested in the amount of interest and investment income relating to the $40+ Million in cash and investments noted on the Balance Sheet. Also, can that detail routinely be provided going forward?
b. How much does the City invest in the Sunset Center annually? I know it minimally includes $750K in cash, but probably includes some Public Works staffing and some out-of-pocket maintenance expenses.
c. CalPERS Pension and OPEB Costs are the big issue for me. Those costs include the loan interest, Section 115 Trust, employer payroll tax contributions, and OPEB contributions. Some of them are separately noted in the Financial Notes of the ACFR, but can those costs be summarized together someplace in the ACFR so that the uninformed reader can see the extent of those costs included in the City Budget? d. Carmel Cares is providing and contributing services to the City which are very important to our community and beyond invaluable. In fact, those services relieve the City of the cost of providing those services in the annual operating budget. How much does the City save annually because Carmel Cares is providing those services free of cost?
I would appreciate if these questions are included in the Budget Workshop Meeting on May 12.(D.Quinnert 5/10/26)
a. Page 15 of the budget book outlines the major categories of Other Income. Once the budget is finalized, the end of the book will have the accounts in detail, as can be seen in the FY 25-26 budget book (page 96 last year). As mentioned in the various Q&A answers above, the City is generally being much more aggressive in its Other Income assumptions. b. In addition to the annual contribution of $750 thousand per year, the City has a number of CIP projects in and around the Sunset Center. The City does not track facilities management time by location, but its staff do work with the Sunset Center’s facilities staff. c. Although the form and content of the ACFR are uniformly structured across all cities, we will work with the auditors who issue the ACFR to see what can be done. d. The City makes an annual disclosure of the donations received from Carmel Cares including their time. The last declaration (provided by Carmel Cares in June of 2025) noted $252,097 of value provided and 8,576 hours of volunteer service.

50. Budget Policy: Although it is commendable that the City staff has been able to look at ways to lower Operational Expenditures to 84% of the Revenues, it is not clear what each source of those reductions is. Please explain the specific items. If the intent is to go forward with a policy of 85 / 15 vs the current 90/10 policy, my recommendation is to establish the budget with 15% of Revenue for Capital Outlay Expenditures. The proposed budget shows 22% of Revenue at $ 8,503,680 which does not seem like a

Attachment 4
18 realistic allocation. Why not set up a target of 15% of Revenue at $5,857,911 for Capital Outlay Expenditures?(M. Rengifo-Ruess 5/9/26)
See the discussion of current year budget cuts, the discussion of the $9 - 10 million annual CIP Plan and the discussion of decreasing available fund balance in the previous Q&A above. The City Council must determine their priorities and fund them with the resources that are available or could be available.

51. Expenditures: A significant work at reaching an 84% of the Revenue, but it is unclear how that level was achieved. Please provide details of what was reduced, by how much and with what impact to the operations.

Additionally, seems some expenses have been identified yet no detail has been provided. Please provide some information regarding:
a. $1.2 Million for support for the operations of the Sunset Center and other economic development activities
b. Pension expenses total $3 million, or 7%, of the budget and only include the annual required unfunded pension liability premium (M. RengifoRuess 5/9/26) See detail of suggested cuts discussed in Q&A above. The detail of $1.2 million of Economic Development is included in the budget book at page 33. The largest expenditure is that of the sunset center contribution, followed closely by SeeMonterey. The $3 million pension expense in the budget is this year's required minimum contribution to continue paying down the unfunded liability related to past pension grants.

52. Revenues: It is clear what our three big sources of revenue are: TOT, Sales & Use Tax, and Property Tax. I think it is an imperative for the City to find ways to increase both TOT and Sales & Use Tax for the following fiscal year. My question is: what tools are we using to estimate the growth? They seem very conservative. Also, in the category of Other representing a 13% of the Budgeted Revenues we describe that it includes Interests and Investment Earnings. Please provide the details what those are. How is the city investing? What Interest is the city generating? etc.(M. Rengifo-Ruess 5/9/26) The City is looking at housing price indicators and trends and talking with industry experts.

While the assumptions appear to be conservative, they are more aggressive than other cities in the state are using. At the same time, these revenue sources are very volatile and some level of caution is sound fiscal practice. See above discussions regarding Other Income (including Ambulance) and Investment Income.

53. Capital Improvement Plan: Not clear how an increase to $8,503,680 in the Capital Improvement Plan is going to be implemented. Questions:
a. Does the City have the required staff to implement all the items listed? b. Can the City use all the allocated budget within the Fiscal year 2026/2027?(M.

Rengifo-Ruess 5/9/26)

Attachment 4
19 The City is proposing to increase the project management staffing to a level that is three times that of the current year. As discussed in the previous Five Year Forecast and CIP workshop, the $8.5 million budget is based on a plan that the City has for the specific projects that can be completed in the coming year.

54. Unassigned General Fund Balance: The current unassigned fund balance is approximately $18 million at the end of FY 25-26. Contributions to the 115 Pension Trust are reflected as a restriction of unassigned fund balance. After five years of contributions to the 115 Unfunded Pension Liability Trust, the City is proposing that the $1 million that had in the past been contributed to the trust instead be Committed by the City Council to a Housing Trust. Please explain:
a. What is the Housing Trust? How long is the City going to allocate the $1M? Is this a recurring funding item or a one time?
b. Why stop the contributions to the 115 Pension Trust? This is a liability that would be best managed if reduced or eliminated. (M. Rengifo-Ruess 5/9/26) The concept of the Housing Trust originates in the City’s Housing Element. Please see Question 29 above.

The Unfunded Pension Liability still has a number of years of expected payments before it is paid down. The 115 Trust continues to be a vital tool in the management of that liability and its fluctuations, but in the spirit of trying to make as many resources available to CIP as possible, it was suggested that a further reserve of fund balance be put on hold.

55. Other sources of Revenue
I recommend we as a community, with the support of our businesses and residents, continue to look at other sources of revenue such as:

Increase in TOT
Increase in Sales & Use Tax
Establish Pay Parking
Consider a Vacancy tax on empty homes (or similar mechanism) (M. Rengifo-Ruess 5/9/26)
With deferred maintenance of $100 million and a forecast Capital Outlay Five Year Plan of $9 - $10 million per year, the City will need to look for resources along with spending cuts.

56. At the end of the Proposed Budget, the “fund” accounting structure is mentioned. What are the 2025-2026 year end balances for all of the funds mentioned on pages 69-71, and what would the anticipated 2026-2027 year end balances be under the proposed budget? (Baron 5/9/2026)
See previous #2 and #3 Q&A response regarding fund balance and the reduction in fund balance as the City continues to spend more than it receives.

Attachment 4
20 57. There is a new position called a “Capital Program Manager” with a salary range of $153, 845 to $187,000 per year. What is the salary range of the project manager position? What is the salary range of the Public Works department head? (Baron 5/9/2026) The current project manager salary range is $130,456.28 - $158,546.00 The new CIP Manager’s salary range is $153,845 - $ 187,000 The public works directors salary range is $197,417.61 - $239,962.63 The salary range for the new CIP Manager was determined by market median for municipal engineer type classifications, which traditionally oversee CIP programs. This is also in line with Council’s long standing compensation philosophy of market median.

58. Where are we in the forest [rehabilitation/replanting/maintenance] program, and how specifically will this forest management effort be affected by these cuts?(Baron 5/9/2026) See previous Q&A response outlining the fact that the Three Year Catchup plan has been completed, leaving the City in a stronger position to continue maintenance efforts.

55. I am personally no longer OK with the significant under estimation of the sales tax and TOT revenues that we’ve seen year after year.

If you are intentionally counting on the upside actual revenue to feed the unassigned reserves - that is one thing. Or to cover for overages. If yes, say so.

However statements including assumptions that sales are flat because of online shopping - is like comparing apples to caviar. What is sold here doesn’t have the benefit the Carmel setting and experience (mostly food/bev) and unique products (art, furnishings, etc)… and is not what is available online.

And however the TOT has over delivered consistently year after year…and this budget estimate only uses 2.5 % increase. When They’ve been delivering over 5% predictably.

I’m frustrated with this routine under estimating of revenue. What am I missing? I’m all ears. (N. Twomey 5/12/26)
Regarding Sales Tax
The forecast is based on measures provided by a third party who specializes in analyzing sales tax. The recent discussions around revenue sources are supplying little bits of data that underlie the larger industry analysis. It is important to note that sales tax comes to the City from two sources: the Statewide pool (known as Bradley Burns) and the local measure (known as Measure C). These two sources bring revenue to the City based on differing sets of rules, with the Bradley Burns revenues increasingly reflecting only local sales and Measure C tracking remote sales as well as local. It is Measure C, the local measure, that brings back the benefit of large remote purchases (like cars) and internet sales to the City, thus capturing a larger pool of revenue.

Attachment 4
21 Regarding TOT
The City doesn’t have all the reporting periods in yet, so the forecast reflects eight months of actual receipts and four months of unknown. Based on initially very low projections, the continued global uncertainty and the very quiet December - February that was seen around the City, the forecast was increased by a moderate amount for the remainder of the year. There has been discussion around aggressive forecasts received from the local industry. These forecasts differ significantly from previous forecasts received and are not consistent with the December to February actual experience. Therefore the City is choosing a path down the middle for its current forecast, significantly more than the prior forecast for a decrease but less than current discussions regarding future growth trends.

56.The ask for this current fiscal year to achieve a 90/10 spend was absolutely the right thing to do, and the team and department heads have delivered. However, I don’t believe we ever had the discussion on what the cuts were to achieve this mix, but could be mistaken and is in place now. And routinely, the capital dollars don’t fully get spent so goes into unspent reserves.

Then in Tuesday evenings workshop, there was two confusing/contradictory discussions and at least one missing % calculation by Council.

1.One was to retain many/most of the cut items that was in a 85/15 spend proposal…that would adjust the mix. (These items including the Forest items, and possible the employee training/travel). I heard the guidance to hold Brandon and team accountable for these decisions.

2. The other was a topic for June Council to discuss and decide if policy should be a 85/15 spend mix. Is or isn’t this mix achievable this soon and therefore be a requirement - especially if you decide to add back items discussed Tuesday evening.

3. If/as new revenues are added in 26/27 and revenue rolls in (anticipating at a partial year) the mix percents change by definition. Yes, I understand that the high level goal is to guide/apply new $’s to deferred maintenance. But these $’s are still revenue, and we can’t count these revenue chickens before the hatch (e.g., pending voter approval). And if/should/as any new paid parking is approved and planned inside next year, you can always count on a significant upfront setup cost and time before any go live and revenue next year.

Attachment 4
22 Not covered Tuesday was priorities, by agreement. But I understood that relooking at our older and mix match of siloed IT applications and data was critical to action for transparency and productivity/efficiency. These ERP+ evaluations and implementations are very staff time consuming and expensive to implement before you see payback. It would be great is AI tools can/could fast track this initiative…but likely is too soon to tell. You and staff better understand if this item should be a project to begin in 26/27.

There are expectations here (on many sides) that go far beyond a realistic opportunity to implement or materially move ahead from where I sit. And this roster doesn’t include these other essential work on the Library, PD/PW, Housing Element that also consumes people power. Looks like too much overall from here. Priorities have been lost in the shuffle.

For your consideration… (N.Twomey 5/13/26)
While the three revenue sources on which the City relies are highly volatile, the expenditures are very predictable. Therefore, a focus on controlling those expenditures is the first step when it comes to freeing up funds for new projects. Efficiency is a big part of controlling expenditures, and that comes from investments like a new ERP system (the evaluation of which is in the budget) and AI training (which is happening internally at the City). It also comes from critically looking at every service being provided and how it is provided, and that takes time. Ultimately it is these efficiencies, as well as increased revenue, that allow the City to work toward its priorities.

As noted in the May 12th meeting, the current budget considers a continued focus on the #1 priorities identified in the January Strategic Retreat. The upcoming Priorities workshop will task the Council with prioritizing the remaining strategic list, but will also have the advantage of allowing for assessment of the City’s work toward the primary priorities during the last six months.

57. Why would this go from 10k/yr to 0 on Phones for Police? (N.Twomey 5/14/26)
Telephone and communications costs have been centralized within the IT budget.

Attachment 4
23 EXHIBIT A - List of Primary Contract Service Providers Vendor Description
Regional Government Services Payroll services
Civitas Advisors Consulting services
Universal Staffing Inc Temporary staffing services
Pace Productivity Inc Municipal Cost of Services Study
Monterey Bay Engineers, Inc Profession fees: ALTA/SDPS Survey Dolores/Carmel River Municipal Resource Group, LLC Executive coaching services Netfile, Inc Netfile
Regional Government Services Payroll Services
GovInvest Inc GASB, Financial Forecast, Pension/OPEB
Hinderliter, De Llamas & Associates Sales Tax Contract Services Prime Actuarial Consulting LLC/Bickmore Actuarial study Yuval Miller Professional services: LIUNA hearing
Department of General Services Moulton hearing
Flaherty's Seafood Grill IT Training - lunch 45 people
IAMP Pro Audio/Anthony J. Nocita Set-up, live production, associated support of city meetings and
Cogix Corporation Online payment portal
Digital Deployment Website Support Agreement
Sloan Sakai Yeung & Wong Legal services
Burke,Williams & Sorensen, LLP Legal services: City Attorney Kennedy, Archer & Giffen Legal costs
Mad Dogs & Englishmen CP&B Bike Maintenance
EMC Planning Group, Inc 6th Cycle Housing Element
Veronica Tam and Associates Sites Inventory and Programs 4Leaf, Inc Permit Technician 08-04-25 - 08-08-25
Engineered Fire Systems Engineered Fire Systems Review
Avenu Insights & Analytics, LLC POP: 7/12/24-7/11/25
Total Industries Pacheco Batteries for Electric Vehicle - Code Enforcement Share Granicus, Inc. FY26 Short Term Rental Monitoring
Uretsky Security background investigations
Carmel Towing & Garage Towing services PD
Community Hospital of the Monterey
Peninsula
PD Testing services
Department of Justice/Accounting Office Police Dept Fingerprinting services AT&T PD Phone Tracking
Wilana, LLC dba Swift Car Wash Car Wash
T2 Systems, Inc Parking and Citation services
Chaplin and Hill Investigative Investigative services
Thomas Uretsky Professional security consulting as directed by Police Dept Cooke & Associates, Inc. PD Background Check
ComSonics Repair Services Autovu Maintenance contract
Lexipol LLC Lexipol manual/DTB annual fee
Monterey County Animal Services Animal control services Monterey County Sheriff-Coroner MCSO Jail bookings
County of Monterey, Dept of Emerg
Management
Alert & Warning, Dispatch
Monterey County District
Attorney/Accounting
Blood Alcohol Costs
Monterey County Health Department CBS-PD Retainer Fee
Same Day Shred PD-Document shredding services

Attachment 4
24 T2 Systems Canada Inc. Digital Iris Service PD
Transunion Risk & Alterna TLO investigative searches
Tracnet Corporation IBM Service Hardware/Software renewal Verizon Wireless Cell phone sales and usage
City Of Monterey Fire Services
First Alarm Alarm services
Mission Linen Service Laundry service
County of Monterey, Dept of Emerg
Management
Mty Count Emergency Communications Dispatch
Dr. James Stubblefield, MD, Inc Medical Director services Altius Medical Medical/biohazard waste disposal
City Of Monterey Ambulance Administration
LogRx Controlled Substance Subscription 1-5 Units
Mission Linen Service Mission Linen (updated contract)
Verizon Wireless Verizon Wireless
Wittman Enterprises, LLC Ambulance billing services
Cintas Corporation Uniform Services
Robert Half Temporary staff for Forestry permit tech
Cintas Corp 2 (First Aid) First Aid station stocking
Anthony Enea Sidewalk cleaning
Precision Emprise LLC Sidewalk Assessment 10/14/25 #56205 David Sollid Marina Backflow Company FM Backflow services Ailing House Pest Control Ailing House - City wide pest control Airtec Inc Airtec - Routine Service
Otis Elevatior Company elevator service at HML
California Fire Protection, Inc. Fire extinguisher service California Premier Restoration California Premier Restoration, Inc. - Work at City facilities Cate Electrical Co., Inc. SSC parking lot, electrical light post repair. 11/26/25 #49935 West Coast Door & Gates Service call and Edge Replacement 1/27/26 #6499 On Point Generators City Generator service
Wm Baxter Electric City electrical work
Brian Steckler Council Chambers A/V Project
Golden State Portables Golden State Portables - Portable potty service Macaluso Electric, Inc. FT emergency electrical services Department of Industrial Relations Conveyance fee
Carmel Door Company Replacement of window unit 1 on south side of City Hall M3 Environmental Consulting Lead - Asbestos inspection different City locations Overhead Door Co of Salinas Overhead Door Co - City Garage door service Poes Plumbing & Backflow Poes Plumbing & Backflow - City facility plumbing service Pureserve Building Service FM Janitorial services Citywide Sentry Alarm Systems City facility alarm service
Toro Petroleum Fuel for generator PD/PW
Wald, Ruhnke & Dost Architects, LLP Professional services Fire Dept Engine Bay expansion Carmel Area Wastewater District Cleaning storm drains
Applied Marine Sciences ASBS Watershed Monitoring
Denise Duffy & Associates ND Habitat Resource Monitoring Dudek Environmental support: On call MTNP, Carmel Forest Mast Plan, CE
Jamestown Advanced Products Corp Ribbon can replacement parts HF&H Consultants, LLC Virtual Council presentation-
2nd Nature Software Inc Signature Software -street sweeper route Ace Organics dba Th Bin King Steam clean 30 trash enclosures Monterey One Water Monterey One Water

Attachment 4
25 Monterey Regional Waste Management
District
Monterey Regional Waste Management District
Native Solutions North Dunes Volunteer Management (Native Solutions) PSTS, Inc. Pumping oil-water separator
State Water Resources Control Board
(SWRCB)
Annual Storm Water Permit fee
California Marine Sanctuary Foundation E.9.C Water Quality Monitoring Community Tree Service Tree work as directed by City Forester Nicole Nedeff Forest Management Plan
Tope's Tree Service Inc. Tree services citywide as directed by City Forester West Coast Arborists Inc . Tree maintenance services as directed by City Forester Town and Country Gardening Tree work in the City
Pacific Grove Self Storage Storage Unit - Document storage Joe Shabram City art restoration
The Christmas Light Pros Holiday lights
Kelly Productions Santa for holiday celebration 12.5.2025 Glastonbury Inc Sound for Community Activities
Good Roots Events, Inc. Thursday farmers' market and Third Thursday events Hear & Now Monterey, LLC Sound & lighting for Community Activities Bliss Point Productions Stage rental
National Parking & Valet Shuttle-parking services Car Week

Attachment 4
26 EXHIBIT B - Detail of Expenditure Adjustments Through Budget Development (a) (b) (a) + (b) = (c) (d) (c) + (d)
Department Description Original
Budget Ask
PreWorkshop
Cuts
Draft
Budget
PostWorkshop
Changes
Final
Budget
Forestry Contract Services- tree
maintenance
$ 600,000 $ (300,000) $ 300,000 $ 300,000 $ 600,000
Forestry Contract Services- fuel mitigation
projects
300,000 (150,000) 150,000 150,000 300,000
Forestry Contract Services- landscaping
maintenance
250,000 (50,000) 200,000 50,000 250,000
Attorney Seek more focused legal council
utilization
442,000 (47,000) 395,000 - 395,000
Plan/Build Digitization, consultants 85,000 (45,000) 55,000 45,000 100,000 Finance Fewer TOT and sales tax audits 30,000 (17,500) 12,500 - 12,500 Police Look for grants for safety
equipment & supplies
18,750 (12,750) 6,000 - 6,000
Council Reduce charitable grants 36,000 (11,000) 25,000 - 25,000 Comm
Activities
Holiday decorations 12,900 (5,400) 7,500 5,400 12,900
Human Res. Records digitization 10,000 (5,000) 5,000 5,000 10,000 Human Res. Less records digitization 10,000 (5,000) 5,000 - 5,000 Human Res. Employee appreciation
expenditures
18,500 (3,500) 15,000 3,500 18,500
Comm
Activities
Fewer and smaller
advertisements
7,425 (2,425) 5,000 - 5,000
Information
Tech
Seek reduced software
subscription costs
227,830 (22,783) 205,047 - 205,047
Environmental Seek contract services reductions 56,250 (21,750) 34,500 - 34,500 Street Maint. Seek contract services reductions 20,000 (10,000) 10,000 - 10,000 City Facilities Seek contract services reductions 643,200 (64,320) 578,880 - 578,880 City Clerk Less records digitization 5,000 (5,000) - - - Street Maint. Reduced materials and supplies 89,000 (8,900) 80,100 - 80,100 Street Maint. Reduced tool and equipment
purchases
12,000 (1,200) 10,800 - 10,800
Public Works Reduced office supplies 6,600 (1,600) 5,000 - 5,000 City Facilities Reduced office supplies 80,500 (8,050) 72,450 - 72,450 Administration Conferences and trainings 7,700 (3,900) 3,800 3,900 7,700 Human Res. Employee trainings & education 1,000 (500) 500 500 1,000 Information
Tech
Conferences and trainings 10,000 (2,500) 7,500 2,500 10,000 Public Works Conferences and trainings 13,500 (3,000) 10,500 3,000 13,500 Human Res. Human Resources conferences
and trainings
1,800 (1,800) - 1,800 1,800
Information
Tech
IT conferences and trainings 5,500 (1,500) 4,000 1,500 5,500 Council Conferences and trainings 5,200 (5,200) - 5,200 5,200 Vehicle&Equip. Beach rescue vehicle - - - 30,000 30,000 CIP Storage area for beach rescue
vehicle
- - - 30,000 30,000
Council Community Promotions 128,500 (16,000) 112,500 5,000 117,500 Council Meetings 31,550 (18,600) 12,950 8,000 20,950
Vehicle&Equip. Animal control vehicle 75,000 - 75,000 (75,000) - Econ Dev Visit Carmel 120,000 (30,000) 90,000 (90,000) -

CITY OF CARMEL-BY-THE-SEA
City Council
Staff Report
June 2, 2026

PUBLIC HEARINGS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Jayme Fields, Finance Manager
APPROVED BY: Brandon Swanson, Acting City Administrator SUBJECT: Resolution 2026-036 Adopting the Fiscal Year 2026-2027 Appropriations Limit
RECOMMENDATION:

Adopt Resolution 2026-036 Adopting the Fiscal Year 2026-2027 Appropriations Limit.

BACKGROUND / SUMMARY:

The State Constitution (Article XII IB) places a limit on the amount of monies that a governmental entity is able to spend based upon projected tax revenues. In accordance with State law, the government entity must adopt an annual appropriations limit. This limit is calculated using a prescribed methodology outlined by the State.

The limit is adjusted by the change in the cost of living and the change in population, using information from the California Department of Finance. The change in the cost of living can be calculated using either the change in per capita income or the percentage change in the local assessment roll for non-residential new construction. The change in population can be calculated using either the change in population within the City or within the County. It is in the City's best interest to choose between the population and rate of inflation factors based on which factor in each category will generate the largest increase to the appropriations limit.

The factors used for the fiscal year 2026-2027 calculation were the change in the County's population of -.17% and the California per capital personal income growth factor of 4.95%. For the fiscal year 2026-2027, the limit is calculated at $47.2 million with budgeted tax receipts of $31.9 million. The difference between the two is the

City's margin for allowable growth in tax receipts.

FISCAL IMPACT:

The appropriation limit for fiscal year 2026-2027 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 $31,947,178.

PRIOR CITY COUNCIL ACTION:

Council adopted the Fiscal Year 2024-2025 Appropriations Limit on June 3, 2025.

ATTACHMENTS:

1. Resolution 2026-036

2. Gann Limit Calculation (Reso Exhibits A & B)

Attachment 1

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2026-036

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA ADOPTING THE FISCAL YEAR 2026-2027 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 2026-2027 Limit were the California per capita personal income adjustment factor of 1.0495 and the County of Monterey population growth factor of .9983; 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 xxx, 202x; 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 2, 2026; 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 2026-2027 as $47,231,529, which is attached hereto as Exhibit A.

2. Certifies the Fiscal Year 2026-2027 Adopted Appropriations Subject-To-Limit of $31,947,178 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 2rd day of June 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED: ATTEST:
________________________ _________________________
Dave Byrne Nova Romero
Mayor City Clerk

Appropriations Subject to Limit
Fiscal Year 2026-2027 General Tax Revenues 31,947,178 $ Less Non proceeds of Tax - $
Total appropriations subject to limits $ 31,947,178
Appropriations Limit
Fiscal Year 2025-2026 Appropriations limit $ 45,081,157 Plus change factors
A. Cost of Living adjustment -California Per Capital Income 1.0495 B. Population Adjustment - County of Monterey 0.9983
Total Change Factor 1.0477
Increase in appropriations limit $ 2,150,371
Fiscal Year 2026-2027 Appropriations Limit $ 47,231,529 Remaining appropriations capacity $ 15,284,351
Availability capacity as a percent of appropriations limit 32% Exhibit A
City of Carmel-by-the-Sea
Spending Limit Calculations
Fiscal Year 2026-2027
Attachment 2

City of Carmel-by-the-Sea
Spending Limit Calculation
Fiscal Year 2026-2027
Revenue Source
Fiscal Year
2026-2027
Budget
Property Tax 9,653,187 $
Sales and Use Tax 11,175,602 $
Transient Occupancy Tax 9,764,905 $
Business License Tax 592,453 $
Motor Vehicle in Lieu 761,030 $
Total Budgeted Tax Revenues 31,947,178 $
Exhibit B
Attachment 2

CITY OF CARMEL-BY-THE-SEA
City Council
Staff Report
June 2, 2026

ORDERS OF BUSINESS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Marisa Bermudez, Acting Assistant City Administrator APPROVED BY: Brandon Swanson, Acting City Administrator SUBJECT: Resolution 2026-037, implementing an address identification system consistent with the requirements of the California Building Standards Code and adopting the Street Addressing Map
identifying assigned property addresses citywide
RECOMMENDATION:

Adopt Resolution 2026-037 confirming that the City has implemented an address identification system consistent with the requirements of the California Building Standards Code and adopting the Street Addressing Map identifying assigned property addresses citywide (Attachment 1).

BACKGROUND / SUMMARY:

DISCUSSION
October 7, 2025: The City Council adopted Resolution 2025-087 (Attachment 3) directing staff to begin developing a comprehensive Street Address Program and an Ordinance amending the Carmel-By-The-Sea Municipal Code Section 15.55.100.

Prior to October 7, 2025: There were multiple meetings of the City Council which included discussion of the subject of address identification.

December 2, 2025: There was an item on the City Council agenda for a first reading of Ordinance No. 2025-006 titled: An Ordinance Amending City of Carmel-by-the-Sea Municipal Code Section 15.55.100 for Street Identification Pursuant to the California Building Standards Code (“Ordinance”). The Staff Report for the December 2, 2025 City

Council meeting is Attachment 4.

January 13, 2026: The City Council adopted the Ordinance. Section 5 of the Ordinance provides as follows in regard to the effective date of the Ordinance:
“SECTION 5. Effective Date. This Ordinance shall take effect 30 days after its adoption by the City Council of the City of Carmel-by-the-Sea or upon the adoption of a Resolution by the City Council confirming that the City has implemented an address identification system which is consistent with the requirements of the California Building Standards Code whichever is later.” The City has completed all actions necessary to develop a Street Address Program and implement an address identification system consistent with the requirements of the California Building Standards Code. The objective of the project was to create a consistent, logical, and safety-oriented house numbering system that:
• Improves emergency response and public safety
• Enhances navigation and wayfinding for residents, visitors, and service providers • Integrates with the City’s Planning Department processes and GIS systems • Provides a citywide address numbering framework based on clear principles • Assigns consistent and logical property numbers along all named streets Staff developed the address identification system by researching best practices and recommendations from the American Planning Association (APA), reviewing systems used in neighboring jurisdictions, applying California Building Code and California Fire Code requirements, and collaborating with a City Council- and community-led addresses workgroup to evaluate and refine potential addressing approaches.

Staff’s review of the existing descriptive addressing system identified inconsistencies in numbering use and application. The existing system did not require the posting or display of address numbers and was not formatted to comply with standard addressing guidelines or integrate with the USPS Address Management Database for broad accessibility and verification. As a result, the system created operational challenges for police, fire, emergency medical services (EMS), delivery services, and utility providers serving residents and businesses.

The Street Addresses Program established a clear and consistent citywide address numbering framework. The program assigned logical property numbers along all named streets, adopted an ordinance formalizing the new addressing system, and included an implementation and community engagement plan.

As part of implementation, staff prepared a Street Addressing Map identifying the assigned

address number for each parcel within the City. Due to the scale and detail of the map, it is not included as a printed attachment to this staff report. The map is available for public review on the City’s website at: [click here for address map]. The Street Addressing Map serves as the official reference document for assigned property addresses under the City’s address identification system. The map, as maintained by the City, may be administratively updated to reflect corrections, parcel changes, or other minor modifications without requiring future Council action.

The new addressing system was tailored to the City’s street layout, including standard and non-standard blocks, diagonal streets, and irregular lots, and was reviewed by first responders, USPS representatives, County of Monterey staff, and key City departments.

City staff completed the following steps to develop an accurate and effective addressing system:

1. The Administration Department led a coordinated effort involving multiple departments and agencies to ensure operational functionality and regulatory compliance.

Departments and agencies consulted included:

Carmel-by-the-Sea Departments
• Police Department
• Fire Department
• Planning & Building
• Public Works
Outside Agencies
• County of Monterey
• USPS Address Management Systems
• Neighboring jurisdictions
• Major utility service providers

2. Created an address inventory and GIS map identifying the Assessor’s Parcel Number (APN) and newly assigned address number for every parcel in the City.

3. Conducted field surveys to document multi-unit buildings and create the City’s first database identifying multi-unit buildings and occupied spaces.

4. Developed a process for reviewing, correcting, and modifying assigned address

numbers.

5. Conducted field visits in response to requests submitted by property owners seeking review of preliminary address assignments.

While the City has completed all actions necessary to develop and implement the Street Address Program, a final administrative coordination step is underway as part of transitioning the completed system into active use. The County of Monterey is proceeding with integration of the new addresses into County systems and coordinating notifications with agencies and service providers that rely on standardized addressing data, including utility providers and emergency response agencies. Official notices to property owners indicating the activation of the Street Address Program will be distributed in the coming weeks.

PROPOSED RESOLUTION
Because the City has completed all actions necessary to implement an address identification system consistent with the requirements of the California Building Standards Code, the Council is being presented with a proposed Resolution confirming implementation of the address identification system, with the Ordinance attached as Exhibit A (Attachment 2).

FISCAL IMPACT:

Postcard mailings to property owners and newspaper ads $14,300. Other nominal expenses will be covered in FY 2025-2026 operating budget.

PRIOR CITY COUNCIL ACTION:

Prior to October 2025: Multiple City Council meetings for discussion regarding the subject of address identification
October 7, 2025: Adoption of Resolution 2025-087
December 2, 2025: Introduction of Ordinance No. 2025-006 January 13, 2026: Adoption of Ordinance No. 2025-006
ATTACHMENTS:

1. Resolution 2026-037 - adopting street address map

2. Exhibit A (Ordinance No. 2025-006)

3. Resolution 2025-087 - adopted in October 2025

4. December 2, 2025, City Council Staff Report

ATTACHMENT 1

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2026-037

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

CONFIRMING THAT THE CITY HAS IMPLEMENTED AN ADDRESS IDENTIFICATION SYSTEM

CONSISTENT WITH THE REQUIREMENTS OF THE CALIFORNIA BUILDING STANDARDS CODE
WHEREAS, on January 13, 2026, the City Council adopted Ordinance No. 2025-006 titled:

An Ordinance Amending City of Carmel-by-the-Sea Municipal Code Section 15.55.100 for Street Identification Pursuant to the California Building Standards Code (“Ordinance”); and WHEREAS, a true and correct copy of Ordinance 2025-006 is attached hereto as Exhibit A; and
WHEREAS, Section 5 of the Ordinance reads as follows:

SECTION 5. Effective Date. This Ordinance shall take effect 30 days after its adoption by the City Council of the City of Carmel-by-the-Sea or upon the adoption of a Resolution by the City Council confirming that the City has implemented an address identification system which is consistent with the requirements of the California Building Standards Code whichever is later; and
WHEREAS, the City has taken all actions (“Actions”) necessary to implement an address identification system consistent with the requirements of the California Building Standards Code including the following:

1. The Administration Department led a coordinated effort involving multiple departments and agencies to ensure operational functionality and regulatory compliance. Departments and agencies consulted include:

Carmel-By-The-Sea Departments:
• Police Department
• Fire Department
• Planning & Building
• Public Works
Outside Agencies:
• County of Monterey
• USPS - Address Management Systems
• Neighboring cities
• Major Utility Service Providers

2. Created an address inventory and GIS Map identifying the Assessor’s Parcel Number (APN) and newly assigned address number for every parcel in the City.

ATTACHMENT 1

3. Conducted field surveys to document multi-unit buildings and create the City’s first database identifying multi-unit buildings and occupied spaces.

4. Developed a process for reviewing, correcting, and modifying assigned address numbers.

5. Conducted field visits in response to requests submitted by property owners seeking review of preliminary address assignments.

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

SECTION 1. Recitals. The City Council of the City of Carmel-by-the-Sea does hereby find that the above referenced Recitals are true and correct and are hereby incorporated by this reference as though set forth in full.

SECTION 2. Implementation. The City has completed all actions necessary to implement an address identification system consistent with the requirements of the California Building Standards Code including those Actions set forth hereinabove.

SECTION 3. Effective Date of Ordinance 2025-006. Ordinance 2025-006 is hereby deemed effective as of the date of adoption of this Resolution.

SECTION 4. Effective Date of Resolution. This Resolution shall be effective immediately upon adoption by the City Council.

SECTION 5. Severability. The City declares that, should any provision, section; paragraph, sentence or word of this Ordinance be rendered or declared invalid by any final court action in a court of competent jurisdiction, or by reason of any preemptive legislation, the remaining provisions, sections, paragraphs, sentences and words of this Ordinance shall remain in full force and effect.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THESEA THIS 2ND DAY OF JUNE 2026, BY THE FOLLOWING VOTE:

AYES:

NOES:

ABSENT:

ABSTAIN
APPROVED: ATTEST:
___________________________________ __________________________________ Dale Byrne, Mayor Nova Romero, MMC, City Clerk

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
ORDINANCE NO. 2025-006

AN ORDINANCE AMENDING CITY OF CARMEL-BY-THE-SEA MUNICIPAL CODE SECTION

15.55.100 FOR ADDRESS IDENTIFICATION PURSUANT TO THE CALIFORNIA BUILDING

STANDARDS CODES
WHEREAS, Section 15.55.100 of the City of Carmel-by-the-Sea Municipal Code ("CMC") begins as follows:
"15.55.100 Amendments to the California Fire Code.

The 2022 California Fire Code is amended and changed as follows as described in subsections (1) through (37) of this section."
WHEREAS, Section 15.55.100 subsection (16) of the CMC currently reads as follows:
"16. Section 505.1 is amended to read as follows:
505.1 Address identification. Buildings and parcels shall be identified by a description of Parcel location relative to the nearest cross-street intersection as determined by the Community Planning and Building Department. For multi-tenant buildings, unit identifiers shall be provided as follows:

1. Multi-family dwelling units (apartments, condominiums) - shall be designated using alphabetic characters (i.e. A, B, C ... ). When the building contains multiple floors, the floor number shall precede the alphabetic unit designator (i.e. 1-A, 2-B, etc.)

2. Non-residential, multi-tenant buildings - individual tenant spaces shall be assigned numeric identification (i.e. 1, 2, 3, etc.) When the building contains multiple floors, the floor number shall precede the numeric unit designator and shall be separated by the number "O" (i.e. first floor units: 1 Ox; second floor units: 20x).

3. Mixed Use buildings - Residential units shall be designated as described in 1 above.

Nonresidential units shall be designated as described in 2." WHEREAS, the California Building Code set forth in the California Code of Regulations Title 24, Part 2, Section 502.1 reads as follows:
502.1 Address identification. New and existing buildings shall be provided with approved address identification. The address identification shall be legible and placed in a position that is visible from the street or road fronting the property. Address identification characters shall contrast with their background. Address numbers shall be Arabic numbers or alphabetical letters. Numbers shall not be spelled out. Each character shall be not less than 4 inches (102 mm) high with a minimum stroke width of 1/2 inch (12.7 mm). Where required by the fire code official, address identification shall be provided in additional approved locations to facilitate emergency response. Where access is by means of a private road and the building cannot be viewed from the public way, a Exhibit A ATTACHMENT 2

Ordinance No. 2025-006

monument, pole or other sign or means shall be used to identify the structure. Address identification shall be maintained."
WHEREAS, the California Residential Code set forth in California Code of Regulations Title 24, Part 2.5, Section R319.1 reads as follows:
"SECTION R319 SITE ADDRESS
R319.1 Address identification. Buildings shall be provided with approved address identification. The address identification shall be legible and placed in a position that is visible from the street or road fronting the property. Address identification characters shall contrast with their background. Address numbers shall be Arabic numbers or alphabetical letters. Numbers shall not be spelled out. Each character shall be not less than 4 inches (102 mm) in height with a stroke width of not less than 0.5 inch (12. 7 mm). Where required by the fire code official, address identification shall be provided in additional approved locations to facilitate emergency response. Where access is by means of a private road and the building address cannot be viewed from the public way, a monument, pole or other sign or means shall be used to identify the structure. Address identification shall be maintained."
WHEREAS, the California Fire Code set forth in the California Code of Regulations Title 24, Part 9, Section 505.1 reads as follows:
"PREMISES IDENTIFICATION
505.1 Address identification. New and existing buildings shall be provided with approved address identification. The address identification shall be legible and placed in a position that is visible from the street or road fronting the property. Address identification characters shall contrast with their background. Address numbers shall be Arabic numbers or alphabetical letters. Numbers shall not be spelled out. Each character shall be not less than 4 inches (102 mm) high with a minimum stroke width of 1/2 inch (12.7 mm). Where required by the fire code official, address identification shall be provided in additional approved locations to facilitate emergency response. Where access is by means of a private road and the building cannot be viewed from the public way, a monument, pole or other sign or means shall be used to identify the structure. Address identification shall be maintained."
WHEREAS, Health and Safety Code Section 18941.5 (b) reads as follows:
§ 18941.5. Amendments, additions, deletions to standards; effective date; publication date; more restrictive standards
"(b) Neither the State Building Standards Law contained in this part, nor the application of building standards contained in this section, shall limit the authority of a city, county, or city and county to establish more restrictive building standards, including, but not limited to, green building standards, reasonably necessary because of local climatic, geological, or topographical conditions. The governing body shall make the finding required by Section 17958. 7 and the other requirements imposed by Section 17958. 7 shall apply to that finding. Nothing in this section shall limit the authority of fire Exhibit A ATTACHMENT 2

Ordinance No. 2025-006

protection districts pursuant to subdivision (a) of Section 13869. 7. Further, nothing in this section shall require findings required by Section 17958. 7 beyond those currently required for more restrictive building standards related to housing." (Emphasis added) WHEREAS, Health and Safety Code Section 18941.5 (b), authorizes a city to amend the California Building Code and the California Residential Code and the California Fire Code ("California Building Standards Code") when the amendment establishes more restrictive building standards, including, but not limited to, green building standards, reasonably necessary because of local climatic, geological, or topographical conditions.

WHEREAS, address identification in Buildings and parcels by a description of Parcel location relative to the nearest cross-street intersection is not more restrictive than the address identification requirements of the California Building Standards Code.

WHEREAS, address identification in Buildings and parcels by a description of Parcel location relative to the nearest cross-street intersection is not reasonably necessary because of local climatic, geological, or topographical conditions.

WHEREAS, the California Building Standards Code, as laws of the State of California, preempt local laws which are in conflict with the requirements of the California Building Standard Code.

WHEREAS, CMC Section 15.55.100 subsection (16) on address identification by a description of Parcel location relative to the nearest cross-street intersection is in conflict with the address identification requirements of the California Building Standards Code.

WHEREAS, the City has received confirmation from USPS that implementing a street address system will not require mail delivery service and that the Post Office in the City will not close.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS:

SECTION 1. Recitals. The City Council of the City of Carmel-by-the-Sea does hereby find that the above referenced Recitals are true and correct and are hereby incorporated by this reference as though set forth in full.

SECTION 2. Existing Code. The first sentence of Section 15.55.100 subsection (16) of the City of Carmel-by-the-Sea Municipal Code currently reads as follows:
"Buildings and parcels shall be identified by a description of Parcel location relative to the nearest cross-street intersection as determined by the Community Planning and Building Department."
SECTION 3. Amendment. Section 15.55.100 subsection (16) of the City of Carmel-bythe-Sea Municipal Code is hereby amended such that the first sentence thereof shall be deleted and replaced with the following sentence:
"Buildings and parcels shall be identified by the address identification requirements of the California Building Standards Code."
Exhibit A ATTACHMENT 2

Ordinance No. 2025-006

SECTION 4. CEQA Findings. As demonstrated in the Staff Report and other documents in the record for this matter, this Ordinance is exempt from review under the California Environmental Quality Act ("CEQA") (California Public Resources Code Section 21000, et seq.), pursuant to the Class 1 (Minor Alterations to Existing Facilities) and Class 4 (Minor Alterations to Land) categorical exemptions in CEQA Guidelines Sections 15301 and 15304, respectively, and this Ordinance is also exempt from CEQA pursuant to the common sense exemption in CEQA Guidelines Section 15061 because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.

SECTION 5. Effective Date. This Ordinance shall take effect 30 days after its adoption by the City Council of the City of Carmel-by-the-Sea or upon the adoption of a Resolution by the City Council confirming that the City has implemented an address identification system which is consistent with the requirements of the California Building Standards Code whichever is later.

INTRODUCED at a Regular City Council Meeting on December 2, 2025.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 13th day of January 2026, by the following vote:

AYES: Councilmembers Baron, Buder, Delves, Dramov, and Mayor Byrne NOES: None
ABSENT: None
ABSTAIN: None
APPROVED:
0�
Mayor
ATTEST:

Nova Romero: MMC
City Clerk •
Exhibit A ATTACHMENT 2

CITY OF CARMEL-BY-THE-SEA

CITY COUNCIL
RESOLUTION NO. 2025-087

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA TO BEGIN

IMPLEMENTATION OF ADDRESS IDENTIFICATION IN THE CITY THROUGH A

COMPREHENSIVE STREET ADDRESS PROGRAM
WHEREAS, Title 24 of the California Building Standards Code contains the Building Code (Part 2), the Residential Code (Part 2.5), and the Fire Code (Part 9), which all include the following requirements for address identification for new and existing buildings, which are numbered here for reference (hereafter "Address Identification"):
(1) The address identification shall be legible and placed in a position that is visible from the street or road fronting the property.
(2) Address identification characters shall contrast with their background. (3) Address numbers shall be Arabic numbers or alphabetical letters. (4) Numbers shall not be spelled out. Each character shall be not less than 4 inches (102 mm) high with a minimum stroke width of 1/2 inch (12.7 mm). (5) Where required by the fire code official, address identification shall be provided in additional approved locations to facilitate emergency response. (6) Where access is by means of a private road and the building cannot be viewed from the public way, a monument, pole or other sign or means shall be used to identify the structure.
(7) Address identification shall be maintained.

WHEREAS, the 2018 Version and Commentary on the International Building Code states in regard to the history of the Address Identification requirement that the ability of fire, police and other emergency response personnel to identify both new and existing buildings is greatly aided by the proper placement of Address Identification; and
WHEREAS, the Carmel-by-the-Sea Police Department supports the implementation of Address Identification in the City to improve public safety and response time on calls for service; and
WHEREAS, the City of Monterey Fire Department, which provides fire, and will soon also provide ambulance service to the City, supports the implementation of Address Identification in the City to improve public safety and response time on calls for service; and WHEREAS, Health & Safety Code Section 17958.5 provides that a city may make changes or modifications to the California Building Standards Code (Part 2.5) and other ATTACHMENT 3

Resolution 2025-087

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

Section 1. The foregoing Recitals are hereby incorporated by reference in full.

Section 2. Council directs City staff to return to the Council with a comprehensive Street Address Program for the implementation of an address identification consistent with AMS and the California Building Code.

Section 3. The Street Address Program shall include: establishing the Department of Community Planning and Building as the authority for address identification in the City of Carmel-by-the-Sea; a process for address assignment; a public outreach and communication plan; coordination with the County of Monterey and major utility service companies; a change management plan; an estimated budget; and an estimated timeline.

Section 4. When a Street Address Program has been approved by the City Council and implemented, then the City Council hereby directs City staff to return to the Council with an ordinance to repeal City Municipal Code Section 15.55.100, subsection (16) so that the City will be governed by the provisions of the California Building Code regarding address identification.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 7th day of October, 2025, by the following vote:

AYES: Councilmembers Baron, Buder, Delves, Dramov, and Mayor Byrne NOES: None
ABSENT: None
ABSTAIN: None
APPROVED:
of2u�
Mayor
ATTACHMENT 3

CITY OF CARMEL-BY-THE-SEA
City Council
Staff Report
December 2, 2025

PUBLIC HEARINGS
TO: Honorable Mayor and City Council Members
SUBMITTED BY: Brian Pierik, City Attorney, Emily Garay, Administrative Analyst APPROVED BY: Chip Rerig, City Administrator
SUBJECT: Staff's update on standard street addresses implementation timeline, Staff's recommendation that the City Council find that the proposed Ordinance is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Sections 15061(b)(3), 15301 and 15304, and First reading of Ordinance 2025-006 amending City of Carmel-by-the-Sea Municipal Code Section 15.55.100 for address identification pursuant to the California Building Standards Codes (Estimated time - 45 min) RECOMMENDATION:

1. Receive Staff's update on standard street addresses implementation timeline.

2. Request the City Attorney to read the title of the Ordinance.

3. Motion to waive further reading, and introduce Ordinance 2025-006 amending Carmel-by-the-Sea Municipal Code Section 15.55.100 for address identification pursuant to the California Building Standards Codes.

BACKGROUND / SUMMARY:

On October 7, 2025, the City Council adopted Resolution 2025-087, directing staff to return to the City Council with a comprehensive Street Address Program that includes a process to begin implementation of an address identification system and an Ordinance amending Carmel-by-the-Sea Municipal Code Section 15.55.100. Staff from the Administration Department, Community Planning and Building Department, and community members have worked diligently to build upon the prototype Addressing ATTACHMENT 4

System introduced at the Street Addresses Community Workshops (August and September 2025) and subsequently introduced to the City Council at the October 7, 2025, meeting. Staff will provide a brief update on the development of the Street Address Program and the estimated timeline for implementation.

Address Number Assignments to APN’s
The City will produce a data set containing APN numbers and the standard address number assigned to each APN number. This data will be shared with the County and utility service providers. Utility companies can utilize this data in a testing environment to update their systems in preparation for the official integration of the City’s standard address system into the County’s systems and USPS’s Address Management System.

Staff met with Monterey County personnel in August, October, and November to confirm the specific information and format that County departments will need to incorporate the address system into their respective databases. The City is collaborating and coordinating a workflow with the following County departments for a streamlined batch update:
• Assessor’s Office
• Emergency Communications/911
• Information Technology/GIS
• Department of Emergency Management
• Elections - Registrar of Voters
• Housing and Community Development
• Public Works, Facilities, & Parks
Upon review and approval of the City’s address system, the County will begin incorporating the address system into Monterey County databases. A successful update into the County’s systems will result in updates of address information in the Assessor’s APN data list, GIS maps maintained by the County, geolocation resources for Emergency Communications/911, and voter registration list.

Following the County’s approval of the City’s address system, the City will transmit the approved system’s data set to the USPS Address Management Systems Manager to input and update the Address Management System (AMS). The update into AMS will result in verifiable physical addresses and the ability for financial institutions, government entities, insurance providers, etc. to confirm a person’s or business’s physical address in Carmel-by-the-Sea.

Estimated Timeline for Implementation
October 2025 - January 2026
Development of the change management plan that will include community outreach, education, collaboration with community organizations, resources through transition, ATTACHMENT 4