RECITALS
WHEREAS, the City requires the services of an animal welfare organization to provide exclusive management and operational services for the City of Coronado Animal Care Facility (hereinafter referred to as the "CACF"); and WHEREAS, PAWS has the willingness and expertise working with domestic animals to perform the services contemplated herein, and has provided such services since execution of the Management Services Agreement for the Coronado Animal Care Facility between the parties effective as of November 1, 2014 (the “Prior Agreement”); and
WHEREAS, PAWS has served the Coronado community for many years, promoting the proper treatment and care of domestic animals, educating the public, and working to promote adoption services; and
WHEREAS the City and PAWS desire to contract for the specific management and operational services described below and desire to set forth their respective rights, obligations, duties and liabilities in connection with the services to be performed; and WHEREAS no official or employee of the City has a financial interest, within the provisions of California Government Code Sections 1090-1092, in the subject matter of this Agreement; and
WHEREAS, the Prior Agreement has been amended four times and the parties desire to enter into this Agreement to amend, restate and fully replace the Prior Agreement as of the Effective Date; and
WHEREAS, on ___________, 2024, the Coronado City Council approved PAWS for the performance of the services contemplated herein and the form of this Agreement; NOW, THEREFORE, for and in consideration of the mutual covenants and conditions contained herein, the parties hereby agree as follows:
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2 A. SERVICES PROVIDED BY PAWS.
1. PAWS Scope of Services. PAWS shall provide the City the services described in PAWS' Scope of Services, attached hereto as Exhibit "A" and hereby incorporated fully by this reference. Intake, assessment and care services shall be provided to residents of the City of Coronado for animals relinquished by their owners or for stray animals found running at large within the confines of the City of Coronado that come into the possession of the Coronado Police Department (CPD) or PAWS. PAWS shall provide animal licensing services to residents of the City of Coronado. Residents of other jurisdictions shall be directed to their respective animal care facilities.
Adoption, fostering or other placement services shall be available to members of the public. PAWS shall not be required to accept for intake, assessment and care any animal rescued by other animal welfare organizations, whether within Coronado or outside its City limits.
2. PAWS Warranty. PAWS shall be obligated to use commercially reasonably efforts to comply with applicable standards of professional care in the performance of its Scope of Services. In addition, during the term of this Agreement, PAWS shall comply with all applicable Federal, State and local laws in effect at the time that the services are being performed.
3. Scope of Duties. The City shall exercise the duties described in the City's Scope of Duties, attached hereto as Exhibit "B" and hereby incorporated fully by this reference.
4. Change of Law. PAWS shall advise the City and the City shall advise PAWS of any change in any law of which it becomes aware that may affect their respective performances of this Agreement. Notwithstanding the foregoing, each of the parties is responsible for complying with applicable law.
B. TERM.
This Agreement shall commence on the Effective Date and shall continue for a term of five (5) years unless sooner terminated in accordance with its terms.
C. COMPENSATION.
1. Fixed Fee Compensation. For the performance of PAWS' services provided hereunder the City shall pay to PAWS the sum of $541,000 per year, at the rate of $45,083.33 per month, without billing or demand, on the first (1st) day of each and every month during the period ending June 30, 2024 and thereafter, at the annual and monthly fixed fee compensation determined in accordance with Section C.2 for each year during the term of this Agreement.
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3 A. Within 30 days after receipt of the executed copy of this Amendment, the City shall pay PAWS a one-time lump sum equal to the difference between $541,000 and the amount paid by the City under the Prior Agreement in monthly fixed fee compensation payments for each month from July 1, 2023 to the time of payment.
2. Cost of Living Adjustments. Effective July 1, 2024, and every July 1 thereafter during the term of the Agreement, the annual and monthly fixed fee compensation set forth above shall be increased automatically by the rate of increase of the Consumer Price Index for All Urban Consumers (CPI-U) for the San Diego Region (all items) as calculated over the period July 1 - June 30 of the prior year, to a maximum adjustment not to exceed five and a half percent (5.5%). The adjusted fees shall go into effect on July 1, of each contract year beginning with July 1, 2024. Also, on an annual basis, the annual and monthly fixed fee will be increased by the aggregate amount of the increase of premiums for the insurance PAWS is required to maintain in accordance with Section F of this Agreement. On an annual basis, starting on April 1, 2025, the total utilities’ usages and costs from the previous twelve months will be reviewed and evaluated by City and PAWS. Any adjustment to the utilities portion of the annual fixed fee compensation to align with actual and updated projected utilities’ costs will be by mutual agreement and reflected in the subsequent fiscal year of the Agreement, starting July 1.
3. Emergency Boarding and Protective Custody Animal Compensation.
For services provided by PAWS for each and every animal brought into protective custody or emergency boarding by the City and transported to the CACF, the City shall pay to PAWS the sum of forty dollars ($40.00) per day for each day the animal is in the care of PAWS. All medical care for animals under protective custody or emergency boarding is to be at the expense of the City, including transport to and from appropriate veterinary facilities.
Emergency board is defined as the temporary custody of an animal at the request of the City if the owner is ill and temporarily unable to care for their pet. Protective custody is defined as the acquisition of an animal at the request of the City if the owner has been deemed unfit to care for the animal.
Per diem charges for emergency boarding and/or protective custody animals shall be billed to the City by PAWS on a monthly basis, identifying the animal(s) by ACO number and providing dates of service.
4. Reimbursements. Should the City fail to pay for maintenance as described in the attached Exhibit "B," hereby incorporated fully by this reference, to the extent that PAWS pays for such maintenance and/or utilities, the City shall make reimbursement within thirty (30) days of receiving written notification of the payment having been made.
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4 D. CONTRACT ADMINISTRATION.
1. City Representative. The City Manager will designate a City Representative for all matters relating to this Agreement. All services performed and requests by PAWS shall be coordinated with the City's Representative.
2. PAWS Representative. PAWS Chairperson of the Board of Directors shall serve as its representative for all matters relating to this Agreement. The PAWS Chairperson of the Board of Directors may delegate this authority but PAWS must notify the City in writing of this delegation.
E. LIMITATIONS ON LIABILITY/INDEMNIFICATION
1. Indemnification by PAWS. To the extent permitted by law, PAWS agrees to indemnify, protect, defend and hold harmless, the City and its elected and/or appointed boards, officers, officials, employees, agents, and volunteers from and against any and all causes of action, claims, demands, liabilities, obligations, actions, proceedings, suits, judgments, damages, liens, levies, costs and expenses, including reasonable attorneys' fees and costs of litigation that may arise out of, or pertain to, or relate to the negligence, recklessness, or willful misconduct of PAWS, its officers, employees, agents, and volunteers in the performance of or failure to perform services under this Agreement.
PAWS' obligation herein does not extend to liability for damages for death or bodily injury to persons, injury to property, or other loss, damage or expense arising from the sole negligence or willful misconduct by the City or its elected and appointed boards, officials, officers, agents, employees and volunteers.
2. Indemnification by the City. To the extent permitted by law, the City agrees to indemnify, protect, defend and hold harmless PAWS and its respective officers, employees, agents, and volunteers in from and against any and all causes of action, claims, demands, liabilities, obligations, actions, proceedings, suits, judgments, damages, liens, levies, costs and expenses, including reasonable attorneys' fees and costs of litigation that may arise out of, or pertain to, or relate to the negligence, recklessness, or willful misconduct of the City, its elected and/or appointed boards, its officers, employees, agents, and volunteers in the performance of or failure to perform its obligations under this Agreement.
The City's obligation herein does not extend to liability for damages for death or bodily injury to persons, injury to property, or other loss, damage or expense arising from the sole negligence or willful misconduct by PAWS or its respective officers, employees, agents, and volunteers.
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5 3. PERS Eligibility Indemnification. In the event that any of PAWS’ officers, employees, agents, subcontractors, representatives or other persons providing services on PAWS’ behalf under this Agreement (collectively “PAWS’ Personnel”) claims or is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS of the City or are eligible to receive wages from the City by virtue of providing services on PAWS’ behalf under this Agreement, PAWS shall indemnify, defend (with counsel acceptable to City), and hold harmless City for the payment of any employer and employee contributions for PERS benefits on behalf of PAWS’ Personnel as well as for payment of any penalties and interest on such contributions which would otherwise be the responsibility of the City and for the payment of any such wages to PAWS’ Personnel.
PAWS agrees that PAWS Personnel are not employees of the City.
Notwithstanding any other agency, state or federal policy, rule, regulation, law, or ordinance to the contrary, PAWS’ Personnel providing services under this Agreement shall not qualify for or become entitled to any compensation and benefit including, but not limited to, eligibility to enroll in PERS as an employee of City and entitlement to any contributions to be paid by City for employer contributions and/or employee contributions for PERS benefits.
4. Complete Compensation. The payments made to PAWS pursuant to this Agreement shall be the full and complete compensation to which PAWS and PAWS’ Personnel are entitled for performance of any work under this Agreement. Neither PAWS nor PAWS’ officers or employees are entitled to any salary or wages, or retirement, health, leave or other fringe benefits applicable to employees of the City. The City will not make any federal or state tax withholdings on behalf of PAWS. The City shall not be required to pay any workers’ compensation insurance on behalf of PAWS.
5. Survival. The provisions of this Section E shall not be limited by any provision of insurance coverage that either may have in effect. The provisions of this Section E shall survive the expiration or termination of this Agreement.
F. INSURANCE
1. Insurance. PAWS shall obtain and, during the term of this Agreement maintain the following insurance policies with such terms and endorsements acceptable to the City:
(a) Commercial General Liability Coverage (CGL) in an amount of not less than two million dollars ($2,000,000) per occurrence and four million dollars ($4,000,000) annual aggregate, for bodily injury, personal injury, and property damage;
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6 (b) Automobile Liability Insurance (any auto) covering bodily injury and property damage for all of its activities arising out of or in connection with the services to be provided under this Agreement, including coverage for owned, hired, and non-owned vehicles, in an amount of not less than one million dollars ($1,000,000) per occurrence;
(c) Workers’ Compensation Insurance for all of PAWS’ employees who are subject to this Agreement and to the extent required by applicable state or federal law, a Workers’ Compensation policy providing at minimum $1,000,000 employers’ liability coverage, and an endorsement that the insurer waives the right of subrogation against the City and its respective elected officials, officers, employees, agents and representatives;
(d) Professional Liability (errors and omissions) coverage with a limit of no less than $1,000,000 per claim and $2,000,000 annual aggregate for all veterinary professionals on a claims made and in the aggregate basis; and
(e) Cyber Liability Insurance on a claims made basis with limits not less than $2,000,000 per claim, $2,000,000 aggregate with coverage sufficiently broad to respond to the duties and obligations as are undertaken by PAWS in this Agreement, including, without limitation claims involving infringement of intellectual property, infringement of copyright, trademark, trade dress, invasion of privacy violations, information theft, damage to or destruction of electronic information, release of private information, alteration of electronic information, extortion and network security, and coverage for breach response costs as well as regulatory fines and penalties as well as credit monitoring expenses with limits sufficient to respond to such obligations.
2. Insurance Policy Requirements. For the CGL, Professional Liability and Cyber Liability policies: (a) there shall be no endorsement or modification of such policies limiting the scope of coverage for insured vs. insured claims or for contractual liability; (b) if PAWS maintains higher limits than the limits shown above, the City shall be entitled to coverage for the higher limits maintained by PAWS and any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City; and (c) any excess or umbrella policies being used to meet the required limits of insurance will be evaluated separately and must meet the same qualifications as PAWS' primary policy. For insurance policies written on a claims made basis, PAWS shall purchase a three year tail policy upon expiration or termination of this Agreement, provided that the City shall pay the cost of the tail policy.
3. The insurance policies shall provide that the policies shall remain in full force during the life of the Agreement, and shall not be canceled without thirty (30) City of Coronado Page 479
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7 days' prior written notice to the City from the insurance company. Statements that the carrier ''will endeavor" and "failure to mail such notice shall impose no obligation or liability upon the company, its agents or representatives," will not be acceptable on insurance certificates.
4. The City, its officers, officials, employees, and representatives shall be named as additional insureds on the required general liability and automobile liability policies. All policies shall contain a provision stating that PAWS' policies are primary insurance and that insurance (including self-retention) of the City or any named insured will not be called upon to contribute to any loss.
5. PAWS shall furnish certificates of said insurance and policy endorsements to the City's Representative within thirty (30) days after execution of this Agreement. Failure on the part of PAWS to procure or maintain in full force the required insurance shall constitute a material breach of contract under which the City may terminate this Agreement.
6. The City reserves the right to review the insurance requirements of this section during the effective period of the Agreement and to reasonably modify insurance coverages and their limits when deemed necessary and prudent by City's Risk Manager based upon economic conditions, recommendations of professional insurance advisors, changes in statutory law, court decisions or other relevant factors. PAWS agrees to make in good faith any reasonable request for deletion, revision or modification of particular policy terms, conditions, limitations or exclusions (except where policy provisions are established by law or regulation binding upon either party to the contract or upon the underwriter of any such policy provisions); provided that such deletions, revisions, or modifications are available under PAWS’s insurance policy and do not violate any legal requirements or cause PAWS to breach any contract, and that the City promptly pays for any increase in premiums attributable to such changes. Upon request by the City, PAWS shall exercise reasonable efforts to accomplish such changes in policy coverages and any increase in premiums attributable to such changes will be reimbursable by the City.
7. Any deductibles or self-insured retentions must be declared to and reasonably approved by the City. At the City's option, PAWS shall demonstrate financial capability for payment of such deductibles or selfinsured retentions.
G. COMPLIANCE WITH LAWS.
PAWS shall comply with all applicable federal, state, and local laws, codes, ordinances, and regulations including, but not limited to, the following: workers' compensation laws; labor and employment laws; prevailing wage laws regarding public projects at the CACF (if any); non-discrimination and equal employment opportunity laws; the Americans with City of Coronado Page 480
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8 Disabilities Act (ADA) of 1990 and all regulations and practices pertaining thereto; and tax laws.
H. CAPITAL IMPROVEMENT PLAN
City and PAWS recognize that the CACF facility is in need of investments to improve operations, cost efficiency and animal care outcomes. Both parties commit to dedicate time and regularly meet to assess current and future operational needs and explore design and remodel options for the CACF. In the FY 2023-24 City of Coronado Budget, the City allocated $100,000 for the initial activities. City and PAWS will collaborate and advance the CACF remodel project in good faith and with time of the essence; provided that PAWS shall have no obligation to make any financial contribution to the remodel project. The final remodel design, appropriation of funds and construction timeline is at the discretion of the City Council. Accordingly, if PAWS finds that the CACF remodel project is not being resolved to support operational success, PAWS may terminate this Agreement by providing at least six months’ notice to the City. If the City has commenced the procurement process under Coronado Municipal Code and a new operator has yet to be identified, the City can extend the Termination Date twice by 45 days each with 15 days’ prior notice of the extension. Additional extensions may be made upon mutual agreement.
I. SECURITY
1. Implementation. Each party shall implement commercially reasonable administrative, technical and physical safeguards designed to: (i) ensure the security and confidentiality of data and information provided by the other party or used in connection with providing services under this Agreement, including data or information about third parties (the “Data”); (ii) protect against any anticipated threats or hazards to the security or integrity of the Data; and (iii) protect against unauthorized access to or use of the Data
2. Network. If either party makes the other party’s Data accessible through the Internet or other networked environment, such party shall be solely responsible for all aspects of Internet use, and shall use commercially reasonable efforts to maintain, in connection with the operation or use of the Data, adequate technical and procedural access controls and system security requirements and devices, necessary for data privacy, confidentiality, integrity, authorization, authentication and non-repudiation and virus detection and eradication.
3. Information Security. Each party shall notify the other party of a security breach impacting the other party’s Data as soon as practicable. Promptly following either party’s notification to the other of a security breach, the parties shall coordinate with each other to investigate the security breach. The party experiencing the breach agrees to fully cooperate with the other party in such other party’s handling of the matter. Each party shall use reasonable efforts to promptly remedy any security breach and prevent any further security City of Coronado Page 481
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9 breach at such party’s own expense in accordance with applicable privacy rights, laws, regulations and standards. To the extent required under applicable law, each party agrees to provide, at its expense, up to one year of credit monitoring services to third parties impacted by any data breach of such party involving the loss of personally identifiable information.
4. Indemnity. Each party shall defend (with counsel reasonably acceptable to the other party), indemnify and hold the other party harmless from and against all claims, actions, proceedings, losses, costs (including reasonable attorney fees and other charges), liabilities, damages, judgments, settlements, and court awarded attorney’s fees resulting from such party’s security or data breach unless the breach is proven to be caused solely by the other party; provided that such party’s liability shall be limited to amounts covered under its cyber liability insurance maintained in accordance with this Agreement. The terms of this section shall survive termination of this Agreement. For purposes of this provision, “security breach” means any act or omission that compromises either the security, confidentiality, or integrity of Confidential Information of the City or PAWS or a breach or alleged breach of this Agreement relating to such privacy practices or privacy obligations imposed by any applicable law. These indemnity obligations shall survive the termination or expiration of this Agreement.
5. Notice and Remedy of Breaches. Each party shall promptly give notice to the other party of any actual or suspected breach by it of any of the provisions of this Section I of this Agreement, whether or not intentional, and the breaching party shall, at its expense, take all steps reasonably requested by the other party to prevent or remedy the breach.
6. Enforcement. Each party acknowledges that any breach of any of the provisions of this Section I of this Agreement may result in irreparable injury to the other for which money damages would not adequately compensate. If there is a breach, then the injured party shall be entitled, in addition to all other rights and remedies which it may have, to have a decree of specific performance or an injunction issued by any competent court, requiring the breach to be cured or enjoining all persons involved from continuing the breach.
J. MISCELLANEOUS PROVISIONS
1. Independent Contract. PAWS agrees and acknowledges that it is, and shall at all times remain as to the City, a wholly independent contractor. Neither the City, nor any of its agents, shall have control over the conduct of PAWS, nor any of PAWS' employees or agents, except as expressly herein set forth.
PAWS shall not at any time, nor in any manner, represent that it or any of its agents or employees are in any manner agents or employees of the City.
PAWS and its employees and agents shall have no authority to incur, and City of Coronado Page 482
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10 shall not incur, any debt, obligation, or liability on behalf of the City, nor otherwise act on behalf of the City as its agent. PAWS shall not act in any manner that gives the impression that it has the power or authority to bind the City in any respect whatsoever.
2. Confidentiality. Both parties recognize that their respective employees and agents, in the course of performance of this Agreement, may be exposed to confidential information and that disclosure of such information could violate the rights of private individuals and entities, including the parties and third parties. Confidential information is nonpublic information that a reasonable person would believe to be confidential and includes, without limitation, personal identifying information (e.g., social security numbers) and trade secrets, each as defined by applicable state law, and all other information protected by applicable law (“Confidential Information”). The party receiving Confidential Information (“Receiving Party”) of the other (“Disclosing Party”) shall not, and shall cause its employees and agents who are authorized to receive Confidential Information, not to, use Confidential Information for any purpose except as necessary to implement, perform or enforce this Agreement or comply with its legal obligations. Receiving Party will use the same reasonable efforts to protect the Confidential Information of Disclosing Party as it uses to protect its own proprietary information and data. The Receiving Party will not disclose or release Confidential Information to any third person without the prior written consent of the Disclosing Party, except for where required by law or for authorized employees or agents of the Receiving Party. Prior to disclosing the Confidential Information to its authorized employees or agents, Receiving Party shall inform them of the confidential nature of the Confidential Information and instruct them to abide by the terms of this Agreement. Receiving Party will promptly notify Disclosing Party if Receiving Party discovers any improper use or disclosure of Confidential Information and will promptly commence all reasonable efforts to investigate and correct the causes of such improper use or disclosure. If Receiving Party believes the Confidential Information must be disclosed under applicable law, Receiving Party may do so provided that, to the extent permitted by law, the Disclosing Party is given a reasonable notice and opportunity to contest such disclosure or obtain a protective order; and provided that any information so disclosed retains its confidentiality protections for all other purposes. Confidential Information does not include information that Receiving Party can demonstrate: (i) is or becomes known to the public without fault or breach of the Receiving Party; (ii) the Receiving Party obtains from a third party without restriction on disclosure and without breach of a non-disclosure obligation or (iii) the Receiving Party develops without reference to or use of the Confidential Information of the other party.
The non-disclosure and non-use obligations of this Agreement will remain in full force with respect to each item of Confidential Information for a period of ten (10) years after the Receiving Party’s receipt of that item.
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11 3. Exclusivity. The City shall not solicit, hire, direct, employ nor facilitate any other organization in the provision of the services for the CACF described in PAWS' Scope of Services.
4. Assignment. This Agreement and any portion thereof shall not be assigned or transferred, nor shall any of PAWS' duties be delegated or sub-contracted, without the express written consent of the City. If the City consents to such subcontract, PAWS shall be fully responsible to the City for all acts or omissions of the subcontractor. Nothing in this Agreement shall create any contractual relationship between the City and subcontractor nor shall it create any obligation on the part of the City to pay or to see to the payment of any monies due to any such subcontractor other than as required by law.
5. Consequential Damages. Neither party shall be liable to the other for consequential damages, including, without limitation, loss of use or loss of profits, incurred by one another or their subsidiaries or successors, regardless of whether such damages are caused by breach of contract, negligent act or omission, or other wrongful act of either of them.
6. Governing Law. The laws of the State of California shall govern this Agreement. Any action to enforce this Agreement, or any term or condition thereof, shall be brought in the Superior Court in San Diego County, or the Southern District of California, United States District Court. PAWS hereby waives the right to remove any action from San Diego County as is otherwise permitted by California Code of Civil Procedure Section 394.
7. Integration. This Agreement sets forth the entire understanding of the parties with respect to the subject matters herein. There are no other understandings, terms or other agreements expressed or implied, oral or written, except as set forth herein. No change, alteration, or modification of the terms or conditions of this Agreement, and no verbal understanding of the parties, their officers, agents, or employees shall be valid unless agreed to in writing by both parties.
8. Waiver. The delay or failure of either party at any time to require performance or compliance by the other of any of its obligations or agreements shall in no way be deemed a waiver of those rights to require such performance or compliance. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought. The waiver of any right or remedy in respect to any occurrence or event shall not be deemed a waiver of any right or remedy in respect to any other occurrence or event, nor shall any waiver constitute a continuing waiver.
9. Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be unenforceable in any circumstance, such determination shall not affect the validity or enforceability of the remaining City of Coronado Page 484
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12 terms and provisions hereof or of the offending provision in any other circumstance. Notwithstanding the foregoing, if the value of this Agreement, based upon the substantial benefit of the bargain for any party is materially impaired by the finding of the unenforceability of any provision, then and in that event, both parties agree to substitute such provision(s) through good faith negotiations.
10. Third Party Beneficiary Rights. This Agreement is entered into for the sole benefit of the City and PAWS and no other parties are intended to be direct or incidental beneficiaries of this Agreement and no third party shall have any right in, under or to this Agreement.
11. Headings. Paragraphs and subparagraph headings contained in this Agreement are included solely for convenience and are not intended to modify, explain or to be a full or accurate description of the content thereof and shall not in any way affect the meaning or interpretation of this Agreement.
12. Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises with respect to this Agreement, this Agreement shall be construed as if drafted jointly by the parties and in accordance with its fair meaning. There shall be no presumption or burden of proof favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
13. Amendments. Only a writing executed by the parties hereto or their respective successors and assigns may amend this Agreement.
14. Notices. All formal notices permitted or required under this Agreement shall be in writing, and shall be deemed made when hand-delivered to the applicable party's representative as provided in this Agreement or forty-eight (48) hours after deposit in the U.S. mail system with first-class postage prepaid. Such notices shall be given to the respective parties at the following addresses:
The address of the City, and the proper person to receive any notice on the City's behalf, is:
City of Coronado
City Manager's Office
1825 Strand Way
Coronado, CA 92118
Attention: City Manager
Telephone (619) 522-7335; Fax (619) 522-7846
The address of PAWS, and the proper person to receive any notice on PAWS' behalf, is:
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13 PAWS Chairman of the Board
124 Orange Avenue, Suite 205
Coronado, CA 92118
Telephone (619) 435-8247; Fax (619) 435-6417
15. Counterparts/Electronic Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. All counterparts shall be construed together and shall constitute one agreement.
This Agreement may be executed electronically with the same force and effect as an original ink signature.
16. Electronic Communication. Communications between PAWS employees and City employees concerning their respective scope of duties may be transmitted by way of electronic communication including, but not limited to, e-mail and texting. PAWS shall designate the phone number(s) and email(s) to receive communications from City employees.
17. Corporate Authority. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that by doing so, the parties hereto are formally bound to the provisions of this Agreement.
PAWS: CITY:
Pacific Animal Welfare Society City of Coronado
By: __________________________ By:_________________________ Teresa Leighty, Board President Tina Friend, City Manager Date: ____________________ Date: ____________________
APPROVED AS TO FORM
By: _______________________
Johanna N. Canlas, City Attorney
ATTEST
By: _______________________
Kelsea Holian, MMC, CPM
EXHIBITS
Exhibit A - PAWS SCOPE OF SERVICES
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14 Exhibit B - CITY SCOPE OF DUTIES
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15 EXHIBIT "A"
PAWS SCOPE OF SERVICES
1. PAWS shall provide all labor, materials and equipment to administer, operate, and staff the Coronado Animal Care Facility (CACF) with a minimum of two (2) employees from 8 AM to 4:30 PM PST, Monday through Friday. PAWS will endeavor to schedule weekly public drop-in hours at CACF to the extent feasible from a staffing and operations perspective.
2. PAWS shall collect, generate and report to the CITY, on at least a quarterly basis, aggregated animal data, including an inventory of the animal population, length of stay, and disposition.
3. PAWS shall establish a 24-hour contact phone number and email to be provided to the City’s Representative and Coronado Police Department (“CPD”) for communications related to the operations of CACF.
4. PAWS shall provide for the cleaning of all CACF cages, kennels and linens, and the provision of supplies for this purpose. PAWS shall develop cleaning and maintenance standards that are consistent with industry standards and shall follow such standards.
5. PAWS shall provide animal care services, including intake evaluation, behavioral assessment, food, litter, medications, supplies and ongoing care for the animals taken into the CACF and guarantees that it shall accept all animals brought to the CACF by CPD; provided, however, that notwithstanding anything in this Agreement to the contrary, CPD shall not deliver to CACF (i) any known violent animal, (ii) any animal with any communicable disease which could endanger the health of other animals in the CACF, or (iii) any animal that needs emergency medical care.
6. PAWS shall perform animal care' services with personnel experienced in their field and in a manner consistent with the standards of care, diligence and skill ordinarily exercised by professionals in similar fields and circumstances in accordance with sound professional practices.
7. PAWS acknowledges and agrees that the City requires PAWS to place on a three (3) day hold any animal found running at large within the City limits (hereinafter referred to as the "holding period"). During the holding period, the ownership and legal control of the animals shall remain with the City; provided, however, that PAWS shall feed, house and care for the animals during these times at the sole expense of PAWS. After completion of the holding period, the ownership and legal control of such animals shall automatically pass to PAWS. During the holding period, PAWS shall be entitled to make all medical decisions in respect of any animal brought to the CACF without obtaining the consent of the City or any owner of any animal.
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16 The ownership and control of all relinquished animals shall pass directly to PAWS at relinquishment without any holding period.
8. PAWS shall determine the adoptability of all animals in its custody (other than animals in protective custody or emergency board) according to PAWS’ adoptability standards, which shall meet or exceed industry standards.
9. At the end of any relevant holding period, PAWS shall determine and provide for the disposition of animals determined by PAWS to be unadoptable based on the current condition of the animal, including a determination, in its sole discretion, to continue behavioral training in an effort to make the animal adoptable and/or arranging for fostering or life-time care.
10. PAWS shall provide the following general medical services to animals in its custody at the CAFC:
a. CANINE: Physical examination, Spay/Neuter; DHPP, Rabies and Bortadella inoculations; Fecal testing and deworming if required; flea control; and microchipping.
b. FELINE: Physical examination, Spay/Neuter; FVRCP; fecal testing and deworming if required; flea control; and microchipping. c. OTHER TYPES OF ANIMALS COMING INTO THE CACF: As determined by PAWS consistent with industry standards.
d. EMERGENCY BOARD AND PROTECTIVE CUSTODY ANIMALS: Only emergency medical care and any vaccinations required to protect other animals in the custody of the CACF, as determined by PAWS and at the expense of the City.
11. All professional veterinary services to be provided through PAWS shall be provided by personnel experienced in their field and in a manner consistent with the standards of care, diligence and skill ordinarily exercised by professionals in similar fields and circumstances in accordance with sound professional practices.
12. Subject to Section C.3 of the Agreement and Exhibit B, PAWS shall provide for emergency medical services to the animals in its care, as needed, by transport to an emergency veterinary service within the County.
13. PAWS shall provide for the disposal of deceased animals brought in by the CPD and those deceased while in PAWS’ care.
14. PAWS shall exclusively provide adoption, fostering and other placement services for adoptable domestic animals which come into the possession of the CPD or PAWS.
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17 15. PAWS shall issue animal licenses for adopted animals as well as for other domestic animals in Coronado, as well as license renewals, and collect licensing fees at the rates set by the Coronado City Council, with PAWS collecting and retaining for itself all licensing fees.
16. PAWS may charge an owner, if any, of an animal found running at large in Coronado a fee for the return of the animal and if the animal remains overnight in the shelter, a reasonable sum per day for the animals food and care at rates set by the Coronado City Council, retaining for itself all income generated in that regard.
17. PAWS may charge animal owners for the relinquishment of animals to PAWS or other fees for services provided by PAWS, including vaccines and microchips, at rates set by the Coronado City Council. PAWS shall collect and may retain all such charges or fees.
18. PAWS shall be responsible for utility services and minor maintenance (but not replacement) and repairs to the interior improvements of the CACF, including, but not limited to payment of all telephone charges, janitorial services, gas and electricity, water, sewer, trash removal, and solid waste and recycling removal. Examples of minor maintenance include interior paint touchups, moving equipment, hanging items on the wall, purchase and installation of door stops and aesthetic décor changes or improvements.
19. PAWS shall provide and maintain, at its own cost, office furniture, equipment, and supplies including such items as furniture, fixtures, telephones and any related phone equipment paper, toner and ink. PAWS shall establish and maintain an independent and separate computer system/ network. The City shall have no obligation to maintain or repair any such computer equipment.
20. PAWS shall operate consistent with general accounting principles, including but not limited to, with respect to receipt and deposit of funds and credit card use.
21. PAWS shall prepare a quarterly report to be delivered to the City by no later than the 15th of January (covering months October- December), the 15th of April (covering months January - March), the 15th of July (covering months April - June), and the 15th of October (covering months July - September), and an annual report to be delivered to the City no later than July 31 of each year as long as this Agreement is in effect. The quarterly and annual reports shall include at least the following aggregated information on number of animals: voluntarily relinquished to CACF, voluntarily relinquished to CPD; number of animals that were stray and collected by CPD or collected at the CACF; and the number of animals returned to owner, adopted, fostered, placed in a home or euthanized and the average length of stay of all animals in the shelter. The reports shall also include annual information regarding City of Coronado Page 490
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18 income generated by PAWS through animal licensing and fees paid by owners of animals running at large and subsequently returned.
22. PAWS shall receive, process, address and provide the City with a copy of all written consumer complaints, if applicable, received by PAWS.
23. PAWS shall keep and maintain records of each live animal relinquished to PAWS or brought in by the CPD for at least three (3) years following the termination of this Agreement. Records shall include, but are not limited to, information on number of animals: voluntarily relinquished to CACF, voluntarily relinquished to CPD; stray and collected by CPD; returned to owner; adopted, fostered or placed in a home; transferred to another rescue organization or euthanized; and written consumer complaints received by PAWS.
24. PAWS shall allow the inspection and subsequent audit by the City or its designees of all CACF records including, but not limited to, information on number of animals: voluntarily relinquished to CACF, voluntarily relinquished to CPD, stray and collected by CPD, returned to owner, adopted, fostered or placed in a home, transferred to another rescue organization, or euthanized; annual financial statements for all operations of the CACF by PAWS; and written consumer complaints received by PAWS, upon reasonable prior written notice by the City to monitor compliance with this Agreement.
Inspections shall be done during normal business hours of the CACF and in a manner that does not interfere with the operation of the CACF.
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EXHIBIT "B"
CITY'S SCOPE OF DUTIES
1. The City shall provide to PAWS, on a rent free basis, sufficient space, including the existing Coronado Animal Care Facility (CACF) for PAWS to perform its services. PAWS shall have no obligation to provide any space for the operation of the CACF.
2. The City hereby grants exclusive, rent-free permission to PAWS and its authorized agent(s), subcontractor(s), licensee(s) and invitee(s) to access, occupy and use all of the CACF (including the building, grounds and parking lot, including any temporary structures or trailers) for the purpose of performing the Scope of Services for the term of this Agreement. Neither the City nor any other party shall have access to the CACF; provided that the City and the public will have access to the CACF for purposes consistent with its operation by PAWS as an animal care facility during the CACF’s public hours and in accordance with access, security and other procedures established by PAWS.
3. In the event of an outbreak of a communicable but treatable disease within the CACF population or upon the intake of animals requiring quarantine that cannot be accommodated within the CACF facility, as immediately as practicable, the City shall provide to PAWS reasonable but not unlimited space, either in the parking lot of the CACF or in another location owned by the City, for PAWS to perform its services. Returning the CACF to normal operation within a reasonable period of time shall be the responsibility of PAWS.
4. The City shall modify the CACF facility, upon mutual agreement between the parties, which will improve PAWS' ability to provide its services to the City.
5. The City shall transport all animals relinquished by owners who are residents of Coronado, or which are found running at large within the City of Coronado to the CACF, assigning each an Animal Control Number and preparing a written narrative of the circumstances of how the animal came into the possession of the CPD and all information discovered about, or provided to the CDP regarding the animals that is not privileged. The City (including the CPD) shall not deliver to PAWS any animal known by the City to be owned by a person who is not a resident of Coronado, nor found running at large outside the City limits. The CPD shall not transport or transfer any animal relinquished by owners who are residents of Coronado, or which are found running at large within the City of Coronado to any other animal welfare organization without the express, prior written consent of PAWS. CPD shall not transport or accept for transfer to the CACF any animal rescued by any other animal welfare organization, whether within Coronado or outside of its City limits, without the express, prior written consent of PAWS. At PAWS request, the CPD shall City of Coronado Page 492
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assist PAWS with the verification of the residency of owners relinquishing animals or animal rescuers who bring animals directly to CACF.
6. The City shall transport any animal relinquished to the CPD or found running at large by the CPD while the CACF is closed, and which is suffering a medical emergency, or serious injury requiring immediate medical attention, to an emergency veterinary clinic designated from time to time by PAWS. The CPD officer to whom the animal was relinquished, or by whom the animal was found running at large, shall immediately notify PAWS' designated representative of the emergency veterinary clinic to which the animal was transported and delivered. Notice to PAWS at its 24-hour contact number shall satisfy this requirement.
7. The City shall transport large or uncontrollable animals from the CACF to veterinary hospitals or clinics or other shelters for ordinary and/or emergency veterinary services and back to the CACF as requested by PAWS.
8. The City shall be responsible for the thorough cleaning and sanitation of the interior of any City of Coronado or CPD vehicle in which an animal is transported, after each transport, with products provided by PAWS and in accordance with PAWS' written cleaning and sanitation procedures which shall be provided to the CPD and which shall be in a manner consistent with the standards of care, diligence and skill ordinarily exercised by professionals in similar fields and circumstances in accordance with sound professional practices.
9. The City shall cooperate with PAWS in the application of PAWS’ policies and procedures.
10. The City shall be responsible for the maintenance and repair of the roof, structure and foundation, integrated building utility and mechanical systems, and parking areas of the CACF in a timely manner so they remain in good working condition and in compliance with all building and safety codes and the, maintenance and replacement of existing landscaping, drain maintenance including lateral sewer maintenance, sewer or solid waste, parking lot, security systems, electrical and plumbing systems, HVAC systems and fire safety equipment. The City shall also be responsible for any major maintenance to the interior and tenant improvements of the CACF. Examples of City maintenance requirements include: landscaping, storm drains, electrical, plumbing, emergency work (electrical/plumbing), installation/replacements (interior or exterior), key/fob replacements and alarm system maintenance.
PAWs will submit requests for maintenance and repair to the CACF to the City through its Public Works department in accordance with its online submission process.
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Agenda Item 10a: Report on Inter-Agency Committees, Board Assignments, and Meetings for Councilmember Mike Donovan
Period of report: April 1, 2024 to April 30, 2024
Date Activity
4/1/24 Met with resident Aileen Oya.
4/3 Capital Improvement Program (CIP) Council Subcommittee meeting. 4/4 Met with resident Rich Haas.
Met with resident Bill Hiscock.
4/6 Coronado Chamber of Commerce Salute to the Military Ball. 4/8 Cal Cities, San Diego County Division meeting.
4/9 Capital Improvement Program (CIP) Council Subcommittee meeting. 4/12 Virtual meeting with Chris Jonsmyr, CA Assembly Member David Alvarez, regarding AB 2783 regarding the San Diego Port District.
Employee Recognition Dinner.
4/13 Coronado MainStreet MotorCars Judges luncheon.
4/15 Coronado Naval Complexes Coordinating Group meeting. 4/16 Met with City Manager Tina Friend.
4/20 Coronado 102nd Annual Flower Show Kickoff.
4/22 Capital Improvement Program (CIP) Council Subcommittee meeting.
Emerald Keepers Earth Month Poster Award Ceremony and Plastics Film. 4/23 Met with residents Eric and Jacqueline Trapp.
4/24 Met (Virtual) with SANDAG Shoreline Preservation staff and Leon Firsht regarding potential sand replenishment projects in Coronado.
Met with Howard Somers and Jim Besikof on Traffic Calming Plan. 4/25 San Diego Metropolitan Transit System (MTS) Board of Directors meeting.
Ribbon Cutting ceremony for new business The True House. 4/26 Emerald Keepers Earth Month Poster and Media Award Ceremony. 4/29 Navy reception honoring the City of Coronado.
Item 10a.
Councilmember Donovan
City of Coronado Page 495
Councilwoman Carrie Downey Item 10(b) Activities Report April 2024 April 1, 2024 Meeting with City Manager Friend re: PFAS April 2, 2024 City Council Meeting
April 3, 2024 Represented City at Coronado Historic Association GEM Awards April 6, 2024 Represented City at Chamber of Commerce, Salute to the Military Ball April 9, 2024 Special City Council Meeting
April 10, 2024 Met with Safe Harbor Director Danielle Maske and Missey Robertson, Development Director
April 11, 2024 Represented City at SDG&E’s 2024 Public Safety Power Shutoff (PSPS) Tabletop Exercise to observe procedures followed in high wind high fire risk events
April 11, 2024 Met with City Manager and Councilmember Tanaka to prepare for next City/CUSD 2x2 meeting
April 12, 2024 Attended Coronado Employee Recognition Dinner April 15, 2024 Represented City at Navy Complexes Meeting April 16, 2024 City Council Meeting
April 20, 2024 Represented City at Flower Show Opening
April 22, 2024 Represented City at Joint City/CUSD 2x2 meeting April 24, 2024 Represented City at Winn Room Subcommittee public meeting April 24, 2024 Meeting with City Manager Friend
April 25, 2024 Represented City at Library Board of Directors Meeting April 27, 2024 Represented City Council and delivered Proclamation for KMAC Foundation at dinner event
April 29, 2024 Represented City in National League of Cities, Environment, Energy & Natural Resources Committee Meeting
April 30, 2024 Attended Meeting with City Manager Friend, Leon First, Asst City Manager Tony Winney, Kelly Purvis, Jackie Lu and League of Wives Members Alexia Palacios-Peters, Dr. Christina Slentz, and Nancy Schaumburg at Memorial coordination meeting
Item 10a.
Councilmember Downey
City of Coronado Page 496
CITY COUNCIL STAFF REPORT
May 7, 2024 10b
MULTI-YEAR GENERAL FUND FINANCIAL FORECAST THROUGH FISCAL YEAR 2028-29
AND LONG-TERM CAPITAL PROJECT PLANNING
RECOMMENDATION:
Receive Multi-Year General Fund Financial Forecast through Fiscal Year 2028-29 and summary of Long-Term Capital Project Planning efforts, and provide direction as appropriate.
BACKGROUND:
As part of the FY 2024-25 Budget preparation, staff develops a multi-year financial projection of the General Fund, which is presented in advance of the draft Budget release. This forecast identifies financial trends and risks, assesses the likelihood that services can be sustained at current levels, estimates the level at which capital expenditures/investments can be made, and identifies future commitments and resource demands. The financial projections also provide an opportunity to discuss key variables that impact revenue and expenditures.
The City also has in process numerous long-term capital projects valued at $3 million or more, such as the Cays Park Master Plan, Winn Room Renovation Project and remodel of both fire stations. These projects are forecast to be completed within the next ten years. Their significant cumulative costs warrant a broader discussion of funding strategies.
All projects will be included in the draft Fiscal Year 2024-25 Five-Year Capital Improvement Budget (CIP) that will be presented to City Council on May 21, 2024.
ANALYSIS:
Long-Range General Fund Financial Forecast
Staff is forecasting the General Fund revenues, expenditures, and ending balances through FY 2028-29 using historical data and projected future trends. This forecast is contained in the following analysis. The analysis shows a summary of financial information with current and projected revenues, operating expenditures, and transfers for each of the next five fiscal years.
Recent trends in property taxes, sales taxes, transient occupancy taxes, and other revenues have been recognized for the upcoming fiscal years. The discussion below includes the basic approach for developing projections for the upcoming fiscal years.
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General Fund Revenue Projections
Total Revenues are projected to increase from $70.2 million in FY 2023-24 to $92.6 million in FY 2027-28. This average annual increase is approximately 6.4% through FY 2028-29. The revenue forecast for FY 2024-25 assumes continuing growth in property taxes with Transient Occupancy Tax (TOT) and Sales & Uses Tax remaining at the current level, primarily due to a major hotel renovation leading to a reduction in available rooms for an extended period. Nevertheless, the general trend and outlook are optimistic as the FY 2022-23 TOT revenue showed strong growth, following a full recovery from the pre-pandemic level in FY 2021-22.
Property Tax Revenue is projected to increase from the current level for FY 2023-24 of $39.7 million to $52.5 million in FY 2028-29. This projection is provided by a third-party consultant and represents an average annual increase of 6.4% per year for five years. The factors in these projections include Consumer Price Index (CPI) adjustments, estimated transfers of ownership, Proposition 8 value restoration, and new construction, among others.
Similar to TOT, Sales Tax Revenue is projected to remain level in FY 2024-25 due to a major hotel renovation, then increase by 11% in FY 2025-26 before tapering down to a more customary 2-3% in subsequent years.
Collectively, property, sales, and Transient Occupancy Taxes revenue sources represent about 89% (average over the five projected years) of General Fund Revenues.
Notable revenues from Other Sources include Use of Money & Properties, which has increased significantly since early 2022, primarily due to 11 rate hikes by the US Federal Reserve. With
ACTUAL ESTIMATED
Revenue from Taxes: 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 Property (Current) 39,678,822 39,747,663 $ 43,604,820 $ 45,702,212 $ 47,845,646 $ 50,094,391 $ 52,458,846 Franchise Fees 1,304,915 1,210,000 1,260,000 1,297,800 1,336,734 1,376,836 1,418,141 Sales & Use 5,015,515 4,782,006 4,822,876 5,357,000 5,464,140 5,628,064 5,796,906 Public Safety $0.5 Sales Tax (Prop. 172) 522,144 316,000 316,000 387,000 387,000 387,000 387,000 Transient Occupancy 22,741,252 16,500,000 17,500,000 20,000,000 23,000,000 23,690,000 24,400,700 Sub-totalRevenue from Taxes 69,262,650 62,555,669 67,503,696 72,744,012 78,033,520 81,176,291 84,461,593 Revenue from Other Sources:
Licenses, Fines, Fees & Permits 436,052 313,500 315,500 324,965 334,714 344,755 355,098 Charges for Services 1,619,318 1,614,305 1,614,555 1,662,992 1,712,881 1,764,268 1,817,196 Intergovernmental & Other 3,602,743 1,102,340 592,340 1,000,000 1,500,000 2,000,000 2,500,000 Reimbursements 1,121,595 1,335,000 1,330,000 1,369,900 1,410,997 1,453,327 1,496,927 Use of Money & Property 2,913,955 3,266,526 3,067,758 2,500,000 2,000,000 2,000,000 2,000,000 Transfers In 1,000,000 - - - - - -
Sub-totalfrom Other Sources 10,693,663 7,631,671 6,920,153 6,857,857 6,958,592 7,562,350 8,169,221 Grand Total General Fund Revenue $ 79,956,312 $ 70,187,340 $ 74,423,849 $ 79,601,868 $ 84,992,112 $ 88,738,641 $ 92,630,814
GENERAL FUND REVENUE
PROJECTED
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anticipation of rate cuts during 2024, the forecast reflects a tapering down of investment revenues in FY 2024-25 and subsequent years. The intergovernmental category is expected to decrease significantly in FY 2023-24, with the State and Local Fiscal Recovery Fund (SLFRF) grants completed in FY 2022-23 and COVID-19 FEMA reimbursements in FY 2023-24. The remaining revenue categories project stable CPI-based adjustments through FY 2028-29. The following table presents the growth assumptions related to projected revenues in the next five years.
General Fund Expenditure Projections
Operating expenditures for the General Fund are projected to increase by an annual average of
6.58% ($69.3 million in FY 2023-24 to $92.1 million in FY 2028-29) over the next five years.
Operating Expenditures are divided into three main categories: Personnel, Services/Supplies/Property, and Transfers from the General Fund to other Funds.
Personnel Expenditures: These costs represent the largest cost element in the General Fund (about 57.4% of operating costs). Personnel costs are expected to increase by $8.9 million to $49.0 million (an average increase of 4.5%) through FY 2028-29. These projections mostly incorporate estimates for both the represented and the self-represented groups, as the current Memorandum of Understanding with the represented groups are scheduled to expire on June 30, 2025.
2023-24 2024-25 2025-26 2026-27 2027-28 2028-29
Property Taxes 0.2% 9.7% 4.8% 4.7% 4.7% 4.7%
Franchise Fees -7.3% 4% 3.0% 3% 3% 3%
Sales & Use Taxes -4.7% 0.9% 11.1% 2.0% 3.0% 3.0%
Public Safety $0.5 Sales Tax (Prop. 172) -39.5% 0.0% 22% 0% 0% 0% Transient Occupancy Taxes -27.4% 6% 14.3% 15.0% 3.0% 3.0% Licenses, Fines, Fees & Permits -28.1% 0.6% 3% 3% 3% 3% Charges for Services -0.3% 0.0% 3.0% 3.0% 3.0% 3.0%
Intergovernmental & Other -69.4% -46.3% 68.8% 50% 33% 25% Reimbursements 19.0% 0% 3% 3% 3% 3%
Use of Money & Property 12.1% -6.1% -18.5% -20.0% 0.0% 0.0% Transfers In -100.0% 0.0% 0% 0% 0% 0%
Total General Fund Revenues -12.22% 6.04% 6.96% 6.77% 4.41% 4.39%
GENERAL FUND REVENUE GROWTH ASSUMPTIONS
ACTUAL ESTIMATED
GF Expenditures 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 Personnel $ 35,956,581 $ 40,094,972 $ 42,591,584 $ 44,102,095 $ 45,677,444 $ 47,321,138 $ 49,036,913 Services & Supplies 14,435,351 17,635,885 18,951,279 19,709,330 20,300,610 20,909,628 21,536,917 Community Grants % of GF Revenue (Council
Policy #28) 1,022,886 1,015,000 1,075,000 1,114,000 1,147,000 1,154,000 1,158,000 Total Services & Supplies $ 51,414,818 $ 58,745,857 $ 62,617,863 $ 64,925,425 $ 67,125,054 $ 69,384,766 $ 71,731,831
PROJECTED
City of Coronado Page 499
Pension costs have been one of the primary drivers of increased costs in the personnel category.
The discount rate is integral to the actuarial assumptions that calculate the required City contribution for unfunded accrued liability. For FY 2024-25, the discount rate will remain at 6.8%.
Any changes to future discount rates would significantly impact the City's pension and corresponding personnel costs and will be closely monitored.
Supplies, Services, and Community Grants Expenditures: Forecasts are primarily driven by CPI, and after hitting a 40-year high of 9.1% in June 2022, it has steadily decreased to 3.5% as of March 2024. FY 2024-25 has a conservative 5% multiplier applied to certain expenditures in this category, gradually tapering to 3% in the subsequent years. As shown below, the Community Grants are projected based on the percentage of the General Fund revenue as established under Council Policy #28.
General Fund Transfers Projections
Transfer Expenditures Accounts: As shown in the table above, this category accounts for transfers to the Sub-funds of the General Fund and other Non-General Funds. The use of separate self-balancing funds for functions such as Recreation, Community Development, Insurance, Solid Waste/Recycling, IT Equipment Replacement, and Vehicle/Equipment Replacement necessitates the use of transfer accounts (in the General Fund) in order to account for the allocation of General Fund resources to these activities.
For the Storm Drain Enterprise Fund, the staff is conducting a rate fee study for a potential future rate adjustment, which projects to decrease the dependence upon transfers from the General Fund over the next five years. The table shows the planned transfers over the next five years.
Capital Projects and Facilities Replacement: Following the budget principles and strategies, the available fund balance will be applied toward the City's General Capital Improvement Program
ACTUAL ESTIMATED
Transfers to Sub-funds of the GF 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 Recreation $ 4,200,000 $ 4,200,000 $ 4,200,000 $ 4,000,000 $ 4,000,000 $ 4,000,000 $ 4,000,000 Community Development 2,725,000 1,500,000 1,500,000 1,600,000 1,700,000 1,800,000 1,900,000 GeneralInsurance 500,000 1,700,000 2,800,000 2,500,000 2,700,000 2,916,000 3,149,280 Workers' Comp Fund - - - - - - -
Pension Stabilization 550,000 - - - 550,000 550,000 550,000 Solid Waste & Recycling 280,000 350,000 350,000 300,000 300,000 300,000 300,000 Vehicle & Equipment Replacement 1,000,000 715,300 500,000 1,500,000 1,500,000 2,000,000 3,000,000 IT Equipment Replacement 500,000 700,000 700,000 800,000 800,000 800,000 800,000 Cultural Arts 195,451 195,450 250,000 200,000 200,000 200,000 200,000 Sub-total Sub-fund of the GF 9,950,451 9,360,750 10,300,000 10,900,000 11,750,000 12,566,000 13,899,280 Transfers to Other Funds
CapitalImprovement Projects 1,513,166 716,440 850,000 2,000,000 4,000,000 2,000,000 1,500,000 Major Capital Facilities Replacement 1,000,000 - - 1,000,000 1,500,000 4,500,000 5,000,000 Storm Drain Enterprise Fund 820,220 500,000 500,000 300,000 200,000 - - Sub-total Other Funds 3,333,386 1,216,440 1,350,000 3,300,000 5,700,000 6,500,000 6,500,000 Total Transfers from General Fund 13,283,837 10,577,190 11,650,000 14,200,000 17,450,000 19,066,000 20,399,280
PROJECTED
City of Coronado Page 500
(CIP) after application toward Operating Expenditures. The projections reflect the 5-year CIP schedule and the result funding estimates based on the projects' timing and scope.
The City Council established the transfer to the Major Capital Facilities Replacement Fund (Fund 436) in FY 2015-16. The contribution formula provides for the increase in the replacement cost due to inflation and would approximate $1.4 million of recommended annual contribution.
However, due to the anticipated reduction in revenue for next fiscal year, the forecast includes a continued deferral of contributions for FY 2024-25, before recommencing in FY 2025-26.
Contributions from FY 2025-26 to FY 2027-28 projects to be higher than the recommended annual amount, ranging from $1.0 million to $5.0 million. The Major Capital Facilities Replacement Fund's estimated fund balance is $8.5 million on June 30, 2023. Note that a higher than budgeted ending General Fund Balance for FY 2023-24 is expected to allow for an infusion into Fund 436 to offset the deferred contributions.
Pension Stabilization: In 2015, the City established an irrevocable trust account to contribute savings from the advance payments made to CalPERS, reducing the City's annual employer contributions. Assets placed in trust allowed for greater diversity in investment allocations designed to provide higher returns over time based on the risk tolerance level set by the City.
The City previously made a $5.0 million prepayment to CalPERS towards unfunded pension liability, and the estimated annual saving of $450,000 in required contributions has been budgeted for contribution to the pension stabilization fund, along with any additional General Fund contributions. Due to the projected budgetary impact of TOT reduction, the forecast does not include any contribution beyond $450,000 for FY 2024-25, with additional contributions recommencing in FY 2025-26. Based on CalPERS's most recently published report, the City's Pension Plans collectively have a funded status of 74.1% as of June 30, 2022. While this is a decrease from the prior year, mostly due to the investment loss of -6.1% during FY 2021-22, Coronado's status is expected to remain healthy and above the consolidated CalPERS funded ratio. Furthermore, this funded status does not include the pension stabilization irrevocable trust account balance of $14.8 million as of June 30, 2023, which would increase the funded status to approximately 80.0%.
General Fund Sources and Uses of Funds Projections
ACTUAL ESTIMATED
2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 BEGINNING BALANCE $ 66,118,504 $ 81,376,161 $ 82,240,454 $ 82,396,440 $ 82,872,883 $ 83,289,941 $ 83,577,817 Revenues 79,956,312 70,187,340 74,423,849 79,601,868 84,992,112 88,738,641 92,630,814 Expenditures & Transfers:
PersonnelCosts 35,956,581 40,094,972 42,591,584 44,102,095 45,677,444 47,321,138 49,036,913 Services, Supplies & Property 15,458,237 18,650,885 20,026,279 20,823,330 21,447,610 22,063,628 22,694,917 Transfers to Sub-funds of GF 9,950,451 9,360,750 10,300,000 10,900,000 11,750,000 12,566,000 13,899,280 Transfers to Other Funds 3,333,386 1,216,440 1,350,000 3,300,000 5,700,000 6,500,000 6,500,000 Sub-total Expenditures and Transfers 64,698,655 69,323,047 74,267,863 79,125,425 84,575,054 88,450,766 92,131,111 Net Increase (Decrease) ofRevenues -
Expenditures & Transfers 15,257,657 864,293 155,986 476,443 417,058 287,875 499,703 ENDING FUND BALANCE $ 81,376,161 $ 82,240,454 $ 82,396,440 $ 82,872,883 $ 83,289,941 $ 83,577,817 $ 84,077,520
PROJECTED
City of Coronado Page 501
Sources and Uses of Funds: The table above shows the summary results of Revenues (Sources of Funds) and Expenditures (Uses of Funds) for the five-year period from FY 2024-25 through FY 2028-29. The impact of a temporary reduction in TOT revenues for FY2023-24 and FY2024-25 will be mitigated by continued increases in other revenue sources and a reduction in the General Fund transfers to other funds. This strategy will help the City maintain a balanced General Fund budget for the next five years.
Restricted General Fund Balance: The City has adopted a policy that provides a Minimum Reserve of six months of operating expenditures to provide adequate resources in the event of an economic downturn or other events that result in limited or significant reduction in current revenues. The amount set aside for this factor ranges from $36.0 million in FY 2024-25 to $47.3 million in FY 2028-29. The City Council has also set aside two other reserves for future reductions in Property Tax Revenues from Mills Act (historic designation) properties. The amount set aside for this purpose is $500,000. The City Council also provided a reserve of $4 million to be used for future Capital Projects. The following table portrays these reserves and the amount of the total Fund Balance that exceeds the reserve requirements, as explained.
ACTUAL ESTIMATED
2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 ENDING FUND BALANCE $ 81,376,161 $ 82,240,454 $ 82,396,440 $ 82,872,883 $ 83,289,941 $ 83,577,817 $ 84,077,520 Minimum Reserve Requirement:
six months operating expenditures not including
transfers (31,525,000) (33,314,000) (36,458,900) (37,912,700) (39,437,500) (40,975,400) (42,815,600) Committed for CapitalImprovement Projects (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) (4,000,000) Committed for Historic Preservation (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) (500,000) Total Minimum Reserve Requirement (36,025,000) (37,814,000) (40,958,900) (42,412,700) (43,937,500) (45,475,400) (47,315,600) Ending Fund Balance Exceeding
Minimum Reserve (f - g) $ 45,351,161 $ 44,426,454 $ 41,437,540 $ 40,460,183 $ 39,352,441 $ 38,102,417 $ 36,761,920
PROJECTED
City of Coronado Page 502
Putting the Results Together: For FY 2022-23, the City is projecting a net increase of $15.3 million in the General Fund balance. This is a result of a few significant financial results, as summarized below:
o Property Taxes: $39.7 million exceeded the budget by approximately $2.3 million. o TOT: $22.7 million exceeded the budget by approximately $4.2 million, primarily due to continued strong demand for tourism.
o Use of Money & Property: $2.9 million exceeded the budget by approximately $2.6 million, primarily due to continued increase in the interest rate environment. o Personnel: $36.0 million was below the budget by approximately $2.0 million, primarily due to continued staffing turnover and vacancies.
o Services & Supplies: $14.4 million was below the budget by approximately $2.2 million, primarily due to staff shortage and resulting delays in certain planned projects and tasks.
While some of the budgetary surpluses are expected to be incorporated in subsequent years, the estimated actuals from FY 2022-23 will enhance the City’s ability to restore deferred contributions to reserve accounts, such as the Major Facilities Replacement fund or the Pension Stabilization fund. The City also has a list of planned long-term priority projects with significant funding requirements, which will be covered later in this staff report.
As a result, the general outlook remains positive, with the City maintaining a healthy General Fund balance over the next five-year period. The fund balance on June 30, 2029, is projected at $84.1 million, above the projected minimum reserve requirement estimated to be $42.8 million.
Ultimately, the growth or decline in fund balance will depend upon actual revenue and expenditure growth.
Long-Term Capital Project Planning
The City has a long and growing list of planned capital investments to support Coronado’s highquality and large breadth of community services. Annually, the City prepares a Five-Year Capital Improvement Plan (CIP) to detail the list of projects, their time spans for design and construction, funding requirements and identified funding sources. In the annual budget, allocations are made for that fiscal year’s financial requirements. The five-year planning tool provides a vital near-term look, but in anticipation of larger projects on the horizon, the City initiated work this Spring for project planning to 10+ years.
This expanded planning horizon is necessary because the City has new, long-term and high-cost projects under development that may not fully appear in the traditional five-year CIP for several years yet require financial planning now. For instance, over the past two years, several major capital initiatives that had been stalled saw renewed focus and are on the cusp of City Council final decisions. These projects, including the Cays Park Master Plan, Downtown Beautification and the Winn Room Renovation project, entail significant costs and their funding sources are not fully known. The City is also planning for substantial investments in public buildings and facilities for ongoing maintenance and replacement, such as the City’s two fire stations and the police station which have large cumulative cost impacts.
2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 Ending GF Balance 81,376,161 82,240,454 82,396,440 82,872,883 83,289,941 83,577,817 84,077,520 Minimum GF Reserve 31,525,000 33,314,000 36,458,900 37,912,700 39,437,500 40,975,400 42,815,600 GF Excess % 258% 247% 226% 219% 211% 204% 196%
City of Coronado Page 503
The following sections of the report provide a summary of major factors in the analysis of capital needs and funding strategies:
Long Term Capital Projects
The first step of this work was to characterize the known major projects that could begin construction in 6-10 years. The following is a list of long-term capital improvement projects valued at $3 million or more, currently on the planning horizon within the next ten years. The list does not include the reconstruction of the Aquatics Center and replacement of the Parker Pump Station, as those projects were previously appropriated and are already in construction. *City Council CIP Subcommittee funding recommendation.
**Total includes high range estimate of $3 million for the Animal Care Facility project.
Five-Year Facilities Capital Improvement Study
In 2021, the City updated its Five-Year Facilities Capital Improvement Study. The study estimated major maintenance needs and costs for most, but not all, of the City’s facilities. In total, 94 total major maintenance projects with an estimated cost of $45 million were included in this report.
Major maintenance typically includes roof systems, HVAC, and structural systems. Costs were estimated in the following facility categories: restrooms, fire and police stations, pump stations, playgrounds and parks, golf course, recreation facilities, and City buildings. In addition to the major maintenance projects, the study contemplated two facility replacement projects: the Parker Pump Station and the Golf Maintenance Shop. The Parker Pump Station project is now underway while the Golf Maintenance Shop project has not yet begun.
While the Five-Year Facilities Capital Improvement Study is an excellent point of reference to ensure proper maintenance of major systems, additional replacement costs for certain aging facilities will need to be added to the plan for those nearing their end of life within the next ten years. Other large long-term projects need to be fully assessed to determine their potential costs and replacement timeframes, such as the replacement of the Glorietta Bay Marina promenade and docks A, B and C within the next twenty years. Staff proposes to update the Five-Year Facilities Capital Improvement Study to include costs for large facility replacement projects that may be outstanding and to update the costs currently contained in the study to reflect the significant increase in construction costs we have observed in recent years. Funds to conduct this updated study are budgeted in the Proposed FY 2024-25 Budget.
Priority Project
($3 million+)
Total Estimated
Cost General Fund Funding Source
Estimated
Project Design
Begins
Estimated
Construction
Completion
Downtown Beautification Project* $ 3,400,000 $ 2,650,000 General Fund/TransNet FY 2024/25 FY 2025/26 Golf Course Irrigation Replacement 9,000,000 N/A Golf Course FY 2024/25 FY 2027/28 Coronado Gateway Improvements 5,300,000 N/A Coronado Bridge Tolls FY 2024/25 FY 2027/28 Fire Station #37 (Cays) 30,000,000 30,000,000 General Fund FY 2025/26 FY 2029/30 Fire Station #36 (Main) 30,000,000 30,000,000 General Fund FY 2025/26 FY 2029/30 Winn Room Renovation 9,700,000 9,700,000 General Fund FY 2025/26 FY 2028/29 AnimalCare Facility $1-3 million $1-3 million General Fund FY 2025/26 FY 2027/28 Cays Park Master Plan 31,000,000 31,000,000 General Fund FY 2025/26 FY 2031/32 Total** $ 121,400,000 $106,350,000
City of Coronado Page 504
Next, with a plan to obtain a refined understanding of the capital requirements over the next 10 years, staff reviewed existing funding resources (Facilities Replacement Fund, CDA Funds, feebased revenues) and summarized some larger financing strategies the City may examine:
Facilities Replacement Fund (Fund 436)
Redevelopment funding was previously used to construct many existing City facilities. With the dissolution of redevelopment in 2012, this significant source of funding for facilities is no longer available. As a result, in 2015, the City established a Facilities Replacement Fund (Fund 436) to provide a reserve for the repair and renovation of most of the City’s capital facilities across their lifecycle for the next 60 years (barring unforeseen natural disasters). The Facilities Replacement Fund balance stands at approximately $8.5 million.
The City makes designated annual General Fund contributions to Fund 436 using an index-based formula that uses the prior year’s budget base value and multiplies it by the San Diego area Construction Cost Index (CCI). The estimated contribution for Fiscal Year 202024-25 calculates to $1.4 million. However, due to the estimated reduction to the City’s Transient Occupancy Tax from a major hotel renovation, contributions to Fund 436 were temporarily paused for FY 2023- 24 and are recommended to be paused again in FY 2024-25. Note in a prior discussion in this report, excess General Fund balance from higher than budgeted revenues in FY 2022-23 may be proposed to restore these deferrals.
There is also $14.3 million intrafund loan from the Facility Replacement Fund to the Wastewater Fund for the Parker Pump Station Project. A schedule for repayment of these funds by the Wastewater Fund will be developed in tandem with completion of the Wastewater Rate Study, which will be completed next year. At that time, the Fund 436 resources would be available for re-appropriation for other projects.
As part of the updated Facilities Capital Improvement Study referenced in the prior section, the annual Fund 436 formula will be recalibrated to account for the new estimation of facility needs and the current cost of construction. This recalibration will inform the City to properly save for our future facility needs.
CDA (Community Development Agency) Loan Funds
The City established the Community Development Agency (CDA) Loan Fund for the repayment of loan proceeds (loans that were made to the CDA from the General Fund) from the Successor Agency (formerly the Community Development Agency) to the General Fund. This fund retained the annual loan repayments of $2,780,754 from the Successor Agency in past years. In October 2018, the City refinanced the balance of all loans with bonds and transferred the proceeds of $33 million to this fund.
The fund's estimated balance is $16.6 million as of June 30, 2024 and can only be used for designated eligible capital projects. It is required (for Federal taxation purposes) that the fund balance be depleted entirely by the time that the TARB are paid off (estimated to be early FY 2028). In addition, $9.8 million of CDA funds were transferred to a Relinquishment Fund reserve, in anticipation of maintenance costs for SR-75 and -282 once relinquishment was effected. Given the deadline to expend the entirety of the CDA Funds in just over 3 years, the City Council will need to evaluate how to spend down the total ~$26 million within the approved project list.
City of Coronado Page 505
Fee Studies
The City receives some revenues to support select public facilities from use fees. Fees must comply with Section 66000 et seq. of the Government Code, which states fees must be related to the level of service provided by the local jurisdiction and the portion of the public facility attributable to the development on which the fees is levied.
Fees for many City services have not been updated in recent years to reflect the cost of providing services. The City currently has a number of fee study updates that have recently been completed or are in progress. For example, in November 2023, the City Council approved a revision to green fees as part of the golf fee study, which will support the golf course irrigation project. Staff will return to City Council this year with updates to recreation, ambulance, and development fees.
Once these studies have been completed and rates adjusted, the City will have refined estimates of fee revenues that can be used to help fund a portion of facility replacement costs related to those services over time.
Project Financing Options
With approximately $100 million in unappropriated General Fund projects on the planning horizon, examination of funding strategies is critical for the timing and sequencing of projects. Several potential financing mechanisms are available to the City and projects could be funded, in whole or in part, through:
Facilities Replacement Fund (Fund 436)
Enhanced or targeted contributions may be made annually to the Facilities Replacement Fund to build the required balance to complete an identified project. In addition, one-time lump sum contributions based on available resources may be made. This is pay-as-you-go strategy requires time to build cash balances.
User Fees
While not a primary source, revenues from user fees can be available to augment select capital projects. Facility maintenance/replacement costs must be fairly and accurately accounted for in the development of fees.
Grants & Federal and State Funding
The City will pursue grants more assertively in the coming year and has programmed funds for a grant consultant in the Proposed FY 2024-25 Budget. This consultant will assist the City in identifying potential grants, assessing project eligibility and writing grant documents.
The City will also continue its requests for project funding through Federal and State awards. The City has had recent success in both, receiving grants for the Parker Pump Station (Federal) and Library enhancements (State).
General Obligation (GO) Bonds or Other Financing
Another potential option to explore is the issuance of general obligation bonds backed by tax revenues to pay debt service or other financing vehicles. The City has not preferred financing in the past, but this mechanism is worthy of investigation if the City wishes to advance larger scale projects more quickly than a pay-as-you-go approach. A thorough analysis of these options will be conducted in partnership with a financial advisor experienced in working with city clients on financial planning, capital investments, and bond issuance support and would consider the interest rate environment and cost of borrowing.
City of Coronado Page 506
Tax Change Options
A change to transient occupancy tax (TOT), sales tax, real estate transfer tax, or the introduction of a utility users tax are options explored by cities to raise revenue for a variety of purposes. At present, the City’s TOT tax rate is 10 percent and there is no local sales tax or utility users tax.
Next Steps
To advance the City’s analysis of long-term capital planning, staff recommends the following steps:
First, staff seeks City Council direction on sequencing the listed Long-Term Priority Projects.
Based on the sequencing, staff will update project schedules and program costs for selected projects within the draft FY 2024-25 Five Year CIP Budget for City Council review at the May 21st City Council meeting.
Next, imbedded in the Proposed FY 2024-25 Budget is funding for an update to the existing FiveYear Facilities Capital Improvement Study. The revision encompasses assessment of previously excluded projects, adjusting existing estimates for inflation, and creating a more refined plan for future replacement of facilities. Staff requests the Council’s support for this budget expenditure for the FY 2024-25 Budget.
Once complete, staff will utilize these updated costs to make future recommendations to the City Council on potential contributions to the Facility Replacement Fund Policy and utilization of other potential funding sources beyond the General Fund.
Development of a long-term project financing plan would also include collaboration with a financial consultant to review the various financing options available to fully fund the selected long term projects and determine which courses of action would be most financially advantageous for the City for completion of these projects within the next ten years.
Finally, in the Proposed FY 2024-25 Budget are funds for a grant consultant to support in the identification and application for Federal, State and private grants. Staff requests the Council’s support of this budget expenditure for the FY 2024-25 Budget.
FISCAL IMPACT:
No fiscal impact is associated with receiving a report on the financial projections and long-range capital planning. The revenue and expenditure projections are intended for a high-level review.
This multi-year projection presentation provides a backdrop and context for the upcoming Fiscal Year 2024-25 Budget Hearing. Several assumptions are used in these projections. Two guiding principles which are employed throughout these estimates are as follows:
1) Operating revenues and expenditures are shown using historical data and projected future trends. Future trends are projected based on current financial conditions and anticipated changes.
2) Departmental operations are maintained at the current level, and current revenues are matched with current operational needs before being allocated for other purposes, i.e., new Capital Improvement Program (CIP) projects or Facilities Replacement projects (legacy facilities).
City of Coronado Page 507
ALTERNATIVE:
None.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
Not Applicable
PUBLIC NOTICE:
No notice required.
ATTACHMENTS:
None
Submitted By: Administrative Services Department / John Kim City of Coronado Page 508
CITY COUNCIL STAFF REPORT
May 7, 2024 10c
COUNCIL SUBCOMMITTEE ON CROSS BORDER WATER QUALITY QUARTERLY UPDATE RECOMMENDATION:
Receive a quarterly report from the City Council Subcommittee on Cross Border Water Quality and provide direction, as appropriate, to staff regarding the City’s Cross Border Water Quality advocacy efforts.
BACKGROUND:
The City of Tijuana’s regional wastewater infrastructure is decades old, has inadequate capacity to treat and convey wastewater and suffers from repeated breaks and system failures. These failures lead to spillage and wastewater discharge into the Tijuana River, its tributaries and outfall into the Pacific Ocean, polluting the ocean waters off Imperial Beach, Coronado and beyond. The City of Coronado has been tirelessly advocating for wastewater treatment solutions since 2016, along with other regional partners.
The City Council Ad Hoc Committee on Cross Border Water Quality was authorized by the City Council on April 2, 2023 and reauthorized on February 6, 2024. The Subcommittee members include Mayor Bailey and Councilmember Duncan with support from City Manager Friend, Assistant City Manager Winney and Andre Monette with BBK, the City’s federal advocate.
The Ad Hoc Committee meets monthly to coordinate advocacy efforts on the local, state and federal level. The Ad Hoc Committee developed a work plan to focus advocacy efforts and ensure the involvement of the broad spectrum of partners in long-term solutions to the cross-border water pollution. Major efforts of the Ad Hoc Committee include:
• Conducting ongoing meetings with Coronado’s Federal delegation to urge expedited construction of the current suite of $480 million of improvements and to appropriate future Federal funding to complete the remaining improvements (~$150 million); • Encouraging federal authorities to ensure the Mexican government fulfills its commitment to build its projects (particularly the SAB Treatment Plant rehabilitation) with its pledged $144 million;
• Advocating for consistent and ongoing funding of the EPA Border Water Infrastructure Grant Program (BWIP) for maintenance and operations for the IBWC treatment plant and pollution prevention infrastructure at the border;
• Expanding coordination with local jurisdictions and the state for a cohesive advocacy and information sharing.
ANALYSIS:
This report provides an update on Subcommittee activities and progress over the calendar quarter from January 2024 through March 2024.
U.S. EPA / IBWC and Mexico Wastewater Infrastructure Projects In 2022 the federal government allocated $330 million for a suite of improvement projects to the South Bay International Wastewater Treatment Plant (International Treatment Plant) in San Ysidro and surrounding river system. To provide international cooperation and funding, the United City of Coronado Page 509
States and Mexico signed Minute Order 328 in July 2022, a binational agreement committing to implementation of projects to reduce and eliminate cross-border pollution. Through this treaty, the Mexican government is contributing $144 million for improvements to canyon collectors and the San Antonio de los Buenos Wastewater Treatment Plant (SAB Treatment Plant) in Mexico.
For the U.S., the infrastructure projects are managed by the Environmental Protection Agency (EPA) and the International Boundary and Water Commission (IBWC), which operates the International Treatment Plant and the collection systems on the U.S. side of the border. The following infrastructure improvements are planned to adequately address cross border wastewater collection and treatment:
• Expanding the capacity of the existing International Treatment Plant from 25 million gallons per day (mgd) to 50 mgd;
• Building an additional treatment plant on the U.S. side of the border to treat river flows; • Installing trash booms in the Tijuana River on the U.S. side of the border; and • Additional repairs to the wastewater canyon collection system.
With appropriate funding, these combined projects (including Mexico’s improvements) are expected to be completed and operational by the end of 2029 and would result in a 90% reduction in the number of days of transboundary wastewater flow in the Tijuana River and an 80% reduction in untreated wastewater discharged to the Pacific Ocean six miles south of the border.
Status of Infrastructure Projects
Significant progress has been made in recent months regarding repairs, but momentum must continue to ensure their timely implementation. Updates for the first quarter are as follows:
• January 1, 2024: the Los Laureles I Pump Station project rehabilitation, funded by Mexico, has been procured and is expected to be constructed in 2024. This project will reduce cross-border flows in Goat Canyon on the US side of the border. • January 11, 2024: Mexico held a groundbreaking ceremony for the project to design, construct, and rehabilitate the SAB Treatment plant located south of Tijuana, Mexico.
The project is fully funded by Mexico at a cost of $37 million and will include the rehabilitation of the existing SAB Treatment Plant as well as wastewater treatment upgrades. Completion of the project is scheduled for October 2024. The rehabilitated SAB Treatment Plant will treat 18 million gallons per day which will reduce the volume of untreated wastewater discharged into the ocean at SAB.
• March 2024- IBWC completed repairs to the primary sedimentation tank #5 at the SBIWTP. The tank removes solids from the influent wastewater. This is the first of five tanks at the SBIWTP to return to operation. All were taken out of service in early 2023 due to excess flows into the plant from Mexico and solids overloading the primary treatment and damaging the tanks. Three tanks are required to be in operation for proper wastewater treatment. Tanks #1 and #2 will be cleaned and returned to service in July. With the return to operation of tank #5, we should see improvement in the effluent water quality discharged from the plant and a return to NPDES Permit compliance with water quality standards in August 2024. In addition to the tanks, IBWC has ordered 26 new primary and secondary pumps for the SBIWTP that will help create redundancy within the plant.
• March 2024- IBWC states they plan to award the design-build agreement for the SBIWTP Expansion Project this summer, with estimated project completion in 2027.
City of Coronado Page 510
Status of Federal Funding for Infrastructure Projects
In 2022, the total costs for the infrastructure improvements were estimated at $640 million.
Subsequent to the appropriation of the $330 million by the federal government, it was revealed that the existing IBWC treatment plant suffered from deferred maintenance estimated at $150 million in addition to the $330 million which was needed to rehabilitate the plant prior to the expansion and enhancement projects. Advocacy to overcome this funding set-back immediately commenced and continues to be a major feature of the City’s current efforts.
Below is an update on notable milestones for funding of cross border water infrastructure projects in the first calendar quarter:
• January 12, 2024: EPA and IBWC finalized the Interagency Agreement which will transfer funds set aside by the 2020 U.S.-Mexico-Canada Agreement to IBWC for the design and construction of the International Treatment Plant expansion project. IBWC will now take the lead on the project.
• March 23, 2024: President Biden signed a Fiscal Year 2024 appropriations bill that will inject $200 million to the International Boundary and Water Commission’s budget, including $156 million for water quality construction projects. The funding is a $103 million increase from the previous fiscal year and will facilitate repair and expansion of the International Treatment Plant. The bill also included a funds transfer authority to enable IBWC to receive funds from other federal and non-federal agencies, enabling them to find other funding streams to support the critically needed improvements to the SBIWTP.
City Council Ad Hoc Committee on Cross Border Water Quality Advocacy Mayor Bailey and Councilmember Duncan traveled to Washington D.C. in January 2024 to meet with Congressmembers to garner support for the President’s supplemental appropriations bill.
Meetings were held with over 15 members of Congress and key appropriations committees to discuss the impacts of cross border pollution on Coronado and the broader San Diego region and to solicit support for the supplemental funding bill.
In March 2024, Councilmember Downey also traveled to Washington D.C. as part of her role on the National League of Cities’ (NLC) Energy, Environment and Natural Resources (EENR) Committee. She met with seven key Congressmembers to seek further support for supplemental infrastructure funding for the SBIWTP.
Advocacy conducted by the City Council, San Diego regional partners and others was critical in the March approval of $200 million in additional infrastructure funding by Congress. We are particularly thankful for the work of our local Federal congressional delegation to move this funding legislation forward, including Congressmember Scott Peters and Senators Butler and Padilla.
IBWC Citizen’s Forum
Councilmember John Duncan currently serves on the IBWC Citizen’s Advisory Board. The IBWC Citizens Forum (CF) was established in 2002 to facilitate the exchange of information between the IBWC and members of the public, government agencies, and other interested stakeholders.
Councilmember Duncan has advocated for the interests of all South Bay cities, including Coronado, as a member of Citizen’s Forum.
The CF meets quarterly with their most recent meeting held on March 24, 2024 in Coronado.
Updates were provided on water pollution sources on the Tijuana River, Minute 328 Projects and IBWC Activities in the San Diego Region. Copies of the presentations provided at each meeting can be found on their website at https://www.ibwc.gov.
City of Coronado Page 511
Next Steps
IBWC has a number of internal assessments taking place to develop a more refined schedule for implementation of infrastructure improvements and future funding needs. The Subcommittee will continue their advocacy work to ensure support of necessary funding for additional wastewater infrastructure improvement projects and to advocate for expeditious completion of the projects, including those in Mexico. This will include determining the most advantageous time to conduct future advocacy meetings with representatives in Washington D.C.
Updates will continue to be posted on the Cross Border Water Pollution project website at:
https://www.projectcoronado.org/cross-border-water-pollution.
FISCAL IMPACT:
None.
ALTERNATIVE:
The City Council could direct staff to pursue alternate direction on cross border water pollution efforts.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
Not Applicable.
PUBLIC NOTICE:
No notice required.
ATTACHMENTS:
None.
Submitted By: City Manager's Office / Tony Winney
City of Coronado Page 512