Costa Mesa City Council
May 6, 2025

CITY OF COSTA MESA
REGULAR CITY COUNCIL AND HOUSING AUTHORITY*
Agenda
City Council Chambers
77 Fair Drive
6:00 PMTuesday, May 6, 2025
*Note: All agency memberships are reflected in the title "Council Member" 4:00 P.M. Closed Session
Council Member Marr will be attending the meeting via Zoom Webinar from:

Hyatt House Richmond/Short Pump
11800 West Broad Street, Suite 1098
Henrico, Virginia 23233
The City Council meetings are presented in a hybrid format, both in-person at City Hall and as a courtesy virtually via Zoom Webinar. If the Zoom feature is having technical difficulties or experiencing any other critical issues, and unless required by the Brown Act, the meeting will continue in person.

TRANSLATION SERVICES AVAILABLE / SERVICIOS DE TRADUCCIÓN DISPONIBLE Please contact the City Clerk at (714) 754-5225 to request language interpreting services for City meetings. Notification at least 48 hours prior to the meeting will enable the City to make arrangements.

Favor de comunicarse con la Secretaria Municipal al (714) 754-5225 para solicitar servicios de interpretación de idioma para las juntas de la Ciudad. Se pide notificación por lo mínimo 48 horas de anticipación, esto permite que la Ciudad haga los arreglos necesarios.

Members of the public can view the City Council meetings live on COSTA MESA TV (SPECTRUM CHANNEL 3 AND AT&T U-VERSE CHANNEL 99) or
http://costamesa.granicus.com/player/camera/2?publish_id=10&redirect=true and online at youtube.com/costamesatv.

Closed Captioning is available via the Zoom option in English and Spanish.

1 REGULAR CITY COUNCIL AND HOUSING
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Agenda May 6, 2025
As a courtesy, the public may participate via the Zoom option.

Zoom Webinar: (For both 4:00 p.m. and 6:00 p.m. meetings) Please click the link below to join the webinar:
https://us06web.zoom.us/j/89982812676?pwd=oX6BGzSScr92QUVyg1m0SN8HSTnoqj.1 Or sign into Zoom.com and “Join a Meeting”
Enter Webinar ID: 899 8281 2676/ Password: 772583
• If Zoom is not already installed on your computer, click “Download & Run Zoom” on the launch page and press “Run” when prompted by your browser. If Zoom has previously been installed on your computer, please allow a few moments for the application to launch automatically.
• Select “Join Audio via Computer.”
• The virtual conference room will open. If you receive a message reading, “Please wait for the host to start this meeting,” simply remain in the room until the meeting begins.
• During the Public Comment Period, use the “raise hand” feature located in the participants’ window and wait for city staff to announce your name and unmute your line when it is your turn to speak. Comments are limited to 3 minutes, or as otherwise directed.

Participate via telephone: (For both 4:00 p.m. and 6:00 p.m. meetings) Call: 1 669 900 6833 Enter Webinar ID: 899 8281 2676/ Password: 772583 During the Public Comment Period, press *9 to add yourself to the queue and wait for city staff to announce your name/phone number and press *6 to unmute your line when it is your turn to speak. Comments are limited to 3 minutes, or as otherwise directed.

Note, if you have installed a zoom update, please restart your computer before participating in the meeting.

Additionally, members of the public who wish to make a written comment on a specific agenda item, may submit a written comment via email to the City Clerk at [email protected].

Any written communications, photos, or other materials for copying and distribution to the City Council that are 10 pages or less, can be e-mailed to [email protected], submitted to the City Clerk’s Office on a flash drive, or mailed to the City Clerk’s Office. Kindly submit materials to the City Clerk AS EARLY AS POSSIBLE, BUT NO LATER THAN 12:00 p.m. on the day of the meeting.

Comments received by 12:00 p.m. on the day of the meeting will be provided to the City Council, made available to the public, and will be part of the meeting record.

2 REGULAR CITY COUNCIL AND HOUSING
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Agenda May 6, 2025
Please know that it is important for the City to allow public participation at this meeting. If you are unable to participate in the meeting via the processes set forth above, please contact the City Clerk at (714) 754-5225 or [email protected] and staff will attempt to accommodate you. While the City does not expect there to be any changes to the above process for participating in this meeting, if there is a change, the City will post the information as soon as possible to the City’s website.

Note that records submitted by the public will not be redacted in any way and will be posted online as submitted, including any personal contact information. All pictures, PowerPoints, and videos submitted for display at a public meeting must be previously reviewed by staff to verify appropriateness for general audiences. This includes items submitted for the overhead screen during the meeting. Items submitted for the overhead screen should be 1 page and provided to the City Clerk prior to the start of the meeting. No links to YouTube videos or other streaming services will be accepted, a direct video file will need to be emailed to staff prior to each meeting in order to minimize complications and to play the video without delay. The video must be one of the following formats, .mp4, .mov or .wmv. Only one file may be included per speaker for public comments, for both videos and pictures. Please e-mail to the City Clerk at [email protected] NO LATER THAN 12:00 Noon on the date of the meeting. If you do not receive confirmation from the city prior to the meeting, please call the City Clerks office at 714-754-5225.

Note regarding agenda-related documents provided to a majority of the City Council after distribution of the City Council agenda packet (GC §54957.5): Any related documents provided to a majority of the City Council after distribution of the City Council Agenda Packets will be made available for public inspection. Such documents will be posted on the city’s website and will be available at the City Clerk's office, 77 Fair Drive, Costa Mesa, CA 92626.

All cell phones and other electronic devices are to be turned off or set to vibrate. Members of the audience are requested to step outside the Council Chambers to conduct a phone conversation.

Free Wi-Fi is available in the Council Chambers during the meetings. The network username available is: CM_Council. The password is: cmcouncil1953.

As a LEED Gold Certified City, Costa Mesa is fully committed to environmental sustainability.

A minimum number of hard copies of the agenda will be available in the Council Chambers.

For your convenience, a binder of the entire agenda packet will be at the table in the foyer of the Council Chambers for viewing. Agendas and reports can be viewed on the City website at https://costamesa.legistar.com/Calendar.aspx. Las agendas y los informes se pueden ver en español en el sitio web de la Ciudad en
https://www.costamesaca.gov/trending/current-agendas/spanish-city-council-agendas.

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Agenda May 6, 2025
In compliance with the Americans with Disabilities Act, Assistive Listening headphones are available and can be checked out from the City Clerk. If you need special assistance to participate in this meeting, please contact the City Clerk at (714) 754-5225. Notification at least 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. [28 CFR 35.102.35.104 ADA Title II].

En conformidad con la Ley de Estadounidenses con Discapacidades (ADA), aparatos de asistencia están disponibles y podrán ser prestados notificando a la Secretaria Municipal. Si necesita asistencia especial para participar en esta junta, comuníquese con la oficina de la Secretaria Municipal al (714) 754-5225. Se pide dar notificación a la Ciudad por lo mínimo 48 horas de anticipación para garantizar accesibilidad razonable a la junta. [28 CFR

35.102.35.104 ADA Title II].

4 REGULAR CITY COUNCIL AND HOUSING
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Agenda May 6, 2025
CLOSED SESSION - 4:00 P.M.

CALL TO ORDER

ROLL CALL
PUBLIC COMMENTS Members of the public are welcome to address the City Council only on those items on the Closed Session agenda. Each member of the public will be given a total of three minutes to speak on all items on the Closed Session agenda.

CLOSED SESSION ITEMS:

1. CONFERENCE WITH REAL PROPERTY NEGOTIATOR
Pursuant to California Government Code Section 54956.8
Fairview Developmental Center; APN: 420-012-16
Property: 2501 Harbor Blvd., Costa Mesa, CA 92626
Agency Negotiators: Lori Ann Farrell Harrison, City Manager Negotiating Parties: State of California
Under Negotiation: Price and Terms of Payment

2. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to California Government Code Section 54957.6, (a) Agency Designated Representative: Lori Ann Farrell Harrison, City Manager Name of Employee Organization: Costa Mesa Police Association (CMPA)

3. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to California Government Code Section 54957.6, (a) Agency Designated Representative: Lori Ann Farrell Harrison, City Manager Name of Employee Organization: Costa Mesa Police Management Association (CMPMA)

4. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to California Government Code Section 54957.6, (a) Agency Designated Representative: Lori Ann Farrell Harrison, City Manager Name of Employee Organization: Costa Mesa City Employees Association (CMCEA)

5. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to California Government Code Section 54957.6,(a) Agency Designated Representative: Lori Ann Farrell Harrison, City Manager Name of Employee Organization: Costa Mesa Confidential Unit

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Agenda May 6, 2025

6. CONFERENCE WITH REAL PROPERTY NEGOTIATOR
Pursuant to California Government Code Section 54956.8
APN: 424-051-23; Property: 778 Shalimar Drive, Costa Mesa, CA 92627 Agency Negotiators: Lori Ann Farrell Harrison, City Manager Negotiating Parties: Dominic Bulone
Under Negotiation: Price and Terms of Payment

7. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATION OF LITIGATION - ONE CASE
Pursuant to California Government Code Section 54956.9 (d)(2), Potential Litigation.

8. PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Pursuant to California Government Code Section 54957, (b)(1) Title: City Manager

6 REGULAR CITY COUNCIL AND HOUSING
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Agenda May 6, 2025

REGULAR MEETING OF THE CITY COUNCIL AND HOUSING AUTHORITY MAY 6, 2025 – 6:00 P.M.

JOHN STEPHENS
Mayor

MANUEL CHAVEZ ANDREA MARR Mayor Pro Tem - District 4 Council Member - District 3

ARLIS REYNOLDS LOREN GAMEROS Council Member - District 5 Council Member - District 2

JEFF PETTIS MIKE BULEY Council Member - District 6 Council Member - District 1

KIMBERLY HALL BARLOW LORI ANN FARRELL HARRISON City Attorney City Manager

CALL TO ORDER

NATIONAL ANTHEM AND PLEDGE OF ALLEGIANCE

MOMENT OF SOLEMN EXPRESSION
[Per Council Policy 000-12, these presentations are made by community volunteers stating their own views. The City Council disclaims any intent to endorse or sponsor the views of any speaker.]

ROLL CALL

CITY ATTORNEY CLOSED SESSION REPORT
PRESENTATIONS:

1. Proclamation: National Bike Month
PUBLIC COMMENTS – MATTERS NOT LISTED ON THE AGENDA
Comments on Presentations and Consent Calendar items may also be heard at this time. Comments are limited to 3 minutes, or as otherwise directed.

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Agenda May 6, 2025

COUNCIL MEMBER COMMITTEE REPORTS, COMMENTS, AND SUGGESTIONS Each council member is limited to 3 minutes. Additional comments will be heard at the end of the meeting.

1. Council Member Reynolds

2. Council Member Pettis

3. Council Member Buley

4. Council Member Gameros

5. Council Member Marr

6. Mayor Pro Tem Chavez

7. Mayor Stephens
REPORT – CITY MANAGER
REPORT – CITY ATTORNEY

CONSENT CALENDAR
All matters listed under the Consent Calendar are considered to be routine and will be acted upon in one motion. There will be no separate discussion of these items unless members of the City Council, staff, or the public request specific items to be discussed and/or removed from the Consent Calendar for discussion.

1. PROCEDURAL WAIVER: WAIVE THE FULL READING OF ALL

ORDINANCES AND RESOLUTIONS
25-275
RECOMMENDATION:

City Council and Housing Authority approve the reading by title only and waive further reading of Ordinances and Resolutions.

2. READING FOLDER 25-276
RECOMMENDATION:

City Council receive and file Claims received by the City Clerk and authorize staff to reject any and all Claims: Southern California Edison, Mercury Insurance Company (Robert Wolfshagen), Ali Berri, Parker Bittner, Karen Franco, Cathy Jo Liebel.

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Agenda May 6, 2025

3. ADOPTION OF WARRANT RESOLUTION 25-269
RECOMMENDATION:

City Council approve Warrant Resolution No. 2733.

1. Summary Check Registration 4-3-25

2. Summary Check Registration 4-10-25

3. Summary Check Registration 4-17-25
Attachments:

4. MINUTES 25-277
RECOMMENDATION:

City Council approve the minutes of the regular meeting of April 15, 2025.mmendation

1. 04-15-2025 Draft MinutesAttachments:

5. ALERTOC MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN

THE CITY OF COSTA MESA AND THE COUNTY OF ORANGE
25-271
RECOMMENDATION:

Staff recommends the City Council:

1. Approve the Memorandum of Understanding (MOU) between the City of Costa Mesa and the County of Orange to allow the use of the County ’s Countywide Mass Notification System under the terms and conditions of the County’s Countywide Mass Notification System Operations Guidelines and vendor-provider agreements, commencing on December 30, 2024, through December 30, 2029.

2. Authorize the City Manager and /or her designee to execute and manage the MOU on behalf of the City of Costa Mesa.

1. 2024 MOU AlertOC Final Sheriff Approved

2. Exhibit A - MA-060-25010178 Everbridge Inc

3. Exhibit B - AlertOC Policy

4. Exhibit C - Individual User Agreement
Attachments:

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Agenda May 6, 2025

6. FAIRVIEW ROAD ACTIVE TRANSPORTATION IMPROVEMENTS -

ADAMS AVENUE TO FAIR DRIVE
25-274
RECOMMENDATION:

Staff recommends the City Council:

1. Award a Professional Services Agreement (PSA) to Onward Engineering for professional engineering design services for the Fairview Road Active Transportation Improvements - Adams Avenue to Fair Drive project (Federal Project No. STPL-5312( 109)) in the amount of $313,081, in final form approved by the City Attorney.

2. Authorize a ten percent (10%) contingency in the amount of $31,308 for any unforeseen costs that may be required by the project.

3. Authorize the City Manager and the City Clerk to execute the PSA and any future amendments to the agreement.

1. Proposed PSA with Onward EngineeringAttachments:

7. PROPOSED BUSINESS IMPROVEMENT AREA (BIA)

REAUTHORIZATION AND INTENTION TO LEVY AN ANNUAL

ASSESSMENT
25-281
RECOMMENDATION:

Staff recommends the City Council:

1. Approve the 2024-2025 Annual Report for the Business Improvement Area (BIA) (Attachment 1).

2. Receive and file the audited financial report for Fiscal Years Ended June 30, 2024 and June 30, 2023 (Attachment 2).

3. Adopt the Resolution declaring the City ’s intention to levy an annual assessment for Fiscal Year 2024-25 for the Business Improvement Area covering certain Costa Mesa hotels and motels and setting the time and place for a Public Hearing on the proposed annual assessment (Attachment 3).

1. TCM Annual Report

2. FY Ending June 2024 Financial Audit

3. Resolution No. 2025-XX Intent Business Improvement Area

4. BIA Update for City Council 4.30.25
Attachments:

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Agenda May 6, 2025

AT THIS TIME COUNCIL WILL ADDRESS ANY ITEMS PULLED FROM THE CONSENT

CALENDAR
------------------------------END OF CONSENT CALENDAR------------------------------- PUBLIC HEARINGS:
(Pursuant to Resolution No. 05-55, Public Hearings begin at 7:00 p.m.)

1. APPEAL OF THE PLANNING COMMISSION ’S DECISION TO

UPHOLD THE DIRECTOR OF DEVELOPMENT SERVICES
DETERMINATION THAT CONDITIONAL USE PERMIT (CUP) PA-21-23 TO ESTABLISH A CANNABIS STOREFRONT LOCATED AT 1687
ORANGE AVENUE (DBA KING’S CREW) HAS EXPIRED
25-239
RECOMMENDATION:

Staff recommends the City Council:

1. Find that the appeal is not subject to the California Environmental Quality Act (CEQA) per California Public Resources Code Section 15268.

2. Uphold the Director of Development Services determination that Conditional Use Permit (CUP) PA-21-23 has expired pursuant to Costa Mesa Municipal Code Sections 13-29(k)(2) and CUP Condition of Approval No. 2.

Agenda Report

1. Resolution

2. Appeal Application

3. Planning Commission Resolution

4. Planning Commission Agenda Report

5. Planning Commission Minutes

6. Notice of Expiration of CUP
Attachments:

OLD BUSINESS: NONE.

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Agenda May 6, 2025
NEW BUSINESS:

1. CAPITAL ASSET NEEDS (CAN) ORDINANCE EMERGENCY

EXCEPTION AND CAPITAL IMPROVEMENT PROGRAM (CIP)
PROJECT DEFERRALS - FISCAL YEAR 2024-25
25-283
RECOMMENDATION:

Staff requests the City Council:

1. Authorize the “Emergency Exception” clause of the Capital Asset Needs Ordinance under Section 2-209.2 ( a)(2), Economic Downturn, for Fiscal Year 2024-25.

2. Provide direction on which approved projects may be deferred to help address the General Fund revenue shortfall resulting from the current economic downturn.

3. Approve a financial plan to reinstate the $2.9 million in deferred projects by:
a. Prioritizing funding in FY 2025-26 if revenues exceed expectations, and if needed.
b. Reinstate the funding over a 10-year period for fiscal years that revenues exceed expenditures to ensure a fiscally sustainable General Fund budget.

1. Capital Asset Needs Code

2. Capital Improvement Program

3. Summary of Proposed Alternative Projects for Deferral Attachments:

ADDITIONAL COUNCIL /BOARD MEMBER COMMITTEE REPORTS, COMMENTS, AND

SUGGESTIONS

ADJOURNMENT

12 CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 25-275 Meeting Date: 5/6/2025
TITLE:

PROCEDURAL WAIVER: WAIVE THE FULL READING OF ALL ORDINANCES AND

RESOLUTIONS
RECOMMENDATION:

City Council and Housing Authority approve the reading by title only and waive further reading of Ordinances and Resolutions.

13 CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 25-276 Meeting Date: 5/6/2025
TITLE:

READING FOLDER
DEPARTMENT: CITY MANAGER’S OFFICE/CITY CLERK’S DIVISION RECOMMENDATION:

City Council receive and file Claims received by the City Clerk and authorize staff to reject any and all Claims: Southern California Edison, Mercury Insurance Company (Robert Wolfshagen), Ali Berri, Parker Bittner, Karen Franco, Cathy Jo Liebel.

14 CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 25-269 Meeting Date: 5/6/2025
TITLE:

ADOPTION OF WARRANT RESOLUTION
DEPARTMENT: FINANCE DEPARTMENT
PRESENTED BY: CAROL MOLINA, FINANCE DIRECTOR
CONTACT INFORMATION: CAROL MOLINA, FINANCE DIRECTOR AT (714) 754-5243 RECOMMENDATION:

City Council approve Warrant Resolution No. 2733.

BACKGROUND:

In accordance with Section 37202 of the California Government Code, the Director of Finance or their designated representative hereby certify to the accuracy of the following demands and to the availability of funds for payment thereof.

FISCAL REVIEW:

Funding Payroll Register No. 25-08 On Cycle for $3,997,709.63, and City operating expenses for $3,732,978.85.

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Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 25-277 Meeting Date: 5/6/2025
TITLE:

MINUTES
DEPARTMENT: City Manager’s Office/City Clerk’s Division RECOMMENDATION:

City Council approve the minutes of the regular meeting of April 15, 2025.mmendation

80 Minutes – Regular Meeting April 15, 2025 Page 1 of 11

REGULAR CITY COUNCIL AND HOUSING AUTHORITY
April 15, 2025 - CLOSED SESSION - 4:00 P.M.

CALL TO ORDER – The Closed Session meeting was called to order by Mayor Stephens at 4:01 p.m.

ROLL CALL

Present: Council Member Buley, Council Member Gameros, Council Member Marr, Council Member Pettis, Council Member Reynolds, Mayor Pro Tem Chavez, and Mayor Stephens (Left at 10:39 p.m.).

Absent: None.

PUBLIC COMMENTS – NONE.

CLOSED SESSION ITEMS:

1. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
Pursuant to California Government Code Section 54956.9 (d)(1) Name of Case: Schaefer v. City of Costa Mesa
Orange County Superior Court Case No. 30-2022-01286737-CU-PO-CJC

2. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION
Pursuant to California Government Code Section 54956.9 (d)(1) Name of Case: DBO Investments CM, LLC v. City of Costa Mesa Orange County Superior Court Case No. 30-2023-01360125-CU-CR-NJC.

3. CONFERENCE WITH REAL PROPERTY NEGOTIATOR
Pursuant to California Government Code Section 54956.8
APN: 140-041-81
Property: 3333 Susan Street, Costa Mesa, CA 92626
Agency Negotiator: Lori Ann Farrell Harrison, City Manager Negotiating Parties: Legacy Partners
Under Negotiation: Price and Terms of Payment
Ms. Hall Barlow, City Attorney requested to add to the Closed Session agenda one item:

Conference with Legal Counsel – Anticipated Litigation – One Case, Pursuant to California Government Code Section 54956.9 (d)(2), due to the item requiring action prior to the next regularly scheduled City Council meeting and the item arose after the posting of the current agenda.
81 Minutes – Regular Meeting April 15, 2025 Page 2 of 11 MOVED/SECOND: Council Member Marr/Mayor Pro Tem Chavez
MOTION: Add Conference with Legal Counsel – Anticipated Litigation – One Case, Pursuant to California Government Code Section 54956.9 (d)(2) to the Closed Session Agenda.

The motion carried by the following roll call vote:

Ayes: Council Member Buley, Council Member Gameros, Council Member Marr, Council Member Pettis, Council Member Reynolds, Mayor Pro Tem Chavez, and Mayor Stephens.

Nays: None.

Absent: None.

Abstain: None.

Motion carried: 7-0

4. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATION OF LITIGATION - ONE CASE
Pursuant to California Government Code Section 54956.9 (d)(2), Potential Litigation.

City Council recessed at 4:03 p.m. for Closed Session.

Closed Session recessed to open session at 6:10 p.m.

Closed Session resumed at 10:39 p.m. after open session.

Closed Session adjourned at 11:42 p.m.

CALL TO ORDER - The Regular City Council and Housing Authority meeting was called to order by Mayor Stephens at 6:10 p.m.

NATIONAL ANTHEM AND PLEDGE OF ALLEGIANCE – A video was played of the National Anthem and the Mayor led the Pledge of Allegiance.

MOMENT OF SOLEMN EXPRESSION – Led by Pastor Christine Nolf, Redemption Church.

ROLL CALL

Present: Council Member Buley, Council Member Gameros, Council Member Pettis, Council Member Marr, Council Member Reynolds, Mayor Pro Tem Chavez, and Mayor Stephens (Left at 10:39 p.m.).

Absent: None.

CITY ATTORNEY CLOSED SESSION REPORT – No reportable action.

PRESENTATIONS:

Active Transportation Committee Chair Andrew Barnes and Vice Chair Michael Moses Nolf provided an update to the City Council.

PUBLIC COMMENTS – MATTERS NOT LISTED ON THE AGENDA
Jose Toscano spoke on comments made by Council Members on social media. 82 Minutes – Regular Meeting April 15, 2025 Page 3 of 11 Mat Garcia, President of Harbor Soaring Society, spoke on the Harbor Soaring Society and their activities.

Flo Martin thanked City Manager Farrell Harrison for the maintenance of the palm trees on Tanager Drive and thanked the Police Department for issuing citations on Newport Boulevard and 19th Street.

David Martinez thanked the Active Transportation Committee and Public Works Department for their investment in the City.

Janna Moore and Larisa Moffit from Epilepsy Support Network of Orange County, spoke on the fight against Epilepsy, and on the May 3rd Seizure Wars Walk at Tewinkle Park.

Speaker, spoke on public safety as the highest priority of City Council, and that public safety includes lifeguards, homelessness, safe streets, safe sidewalks, and bike lanes, and spoke in support of safety improvements for motorists, pedestrians, and bicyclists.

Debra Lee, Founder of Furever Heaven Foundation, spoke in support of a Trap Neuter Return policy.

Trace Yulie, spoke in support of active transportation improvements.

Speaker, Save Our Youth (SOY), introduced Soy students to give a presentation.

Speaker, SOY Leadership Program, spoke on homelessness in the community.

Speaker, SOY Leadership Program, spoke on homelessness in the community.

David Perez, SOY Leadership Program, spoke on a blanket drive for the homeless.

Speaker, SOY Leadership Program, spoke on a blanket drive for the homeless.

Kim Hendricks, Fairview Park Alliance, spoke on Fairview Park and on the U.S. Fish and Wildlife Service communication against Harbor Soaring Society flying at Fairview Park until the Master Plan is completed, and requested moving Harbor Soaring Society off of the vernal pools.

Speaker, spoke in support of active transportation improvements.

Speaker, thanked staff for the response for the HDL tax information, spoke on tax generators in the City, and spoke on funding for the Arts Master Plan.

Speaker, spoke in support of the Active Transportation Committee and the work they have done.

Speaker, spoke on the Active Transportation Committee work and projects accomplished, thanked Council Member Reynolds for the work on the Committee, spoke in support of all committees making annual presentations, spoke on the improvements and the low costs for the active transportation projects, and thanked staff for pursuing grants. 83 Minutes – Regular Meeting April 15, 2025 Page 4 of 11 David Larson spoke against removing a Chinese Elm tree in front of his house and requested if it could be trimmed instead.

Cynthia McDonald, Costa Mesa, spoke in support of citizen participation and engaging the public, requested more town hall meetings, and spoke on the upcoming Fairview Park Steering Committee meeting.

Speaker, expressed safety concerns in the area of Adams Avenue and Fairview Road.

Speaker, spoke in support of the 311 App and requested it to be fully useable in Spanish, and spoke on a lack of parking enforcement and using the 311 App for better enforcement.

Speaker, spoke on the Active Transportation Committee presentation, requested traffic data on Towne Street due to the traffic improvements on 19th St., spoke on homelessness, and spoke on citizen engagement.

Speaker, spoke on biodiversity systems at Fairview Park and preserving Fairview Park, and spoke against the Harbor Soaring Society flying at Fairview Park.

COUNCIL MEMBER COMMITTEE REPORTS, COMMENTS, AND SUGGESTIONS Council Member Marr thanked the Active Transportation Committee, thanked the SOY students for their presentation, spoke in support of more town hall meetings, spoke on the amenities provided to facilitate public participation in Spanish, thanked Mr. Larson for bringing the Chinese Elm tree to the attention of City Council, and spoke in support of an ethics policy and encouraged staff to look at the City of Irvine as a starting point.

Council Member Reynolds spoke on protecting the Chinese Elm tree, spoke on communicating to the residents on Towne Street about the traffic study that was completed, thanked staff and the Active Transportation Committee for their work on grants, thanked Ms. Torres for responding to citizen requests, spoke on the Arts Commission recently awarding grants and inquired if special event fees could be waived, spoke in support of a Code of Conduct policy for City Council, Commissioners, and Committee Members and requested City Council values be posted at City Hall.

Council Member Pettis spoke on attending the OC Japan Fair, spoke on community engagement and responding to individual residents, spoke on street improvements on 16 th street including parking restrictions approaching the crossings, striped crosswalks, and striping to highlight the speed humps, spoke on working with Mr. Martin, Transportation Services Manager to respond to residents requests, and spoke on parking enforcement for street sweeping.

Council Member Buley thanked SOY students for speaking, responded to Mr. Larson’s comment regarding the Chinese Elm and requested staff to revisit the decision, spoke on attending the OC Japan Fair, attending the Finance and Pension Advisory Committee meeting, spoke on citizen involvement at the Committee level, and recognized Mayor Stephens for addressing the Gisler bridge issue at the OCTA meeting, and spoke on good governance. 84 Minutes – Regular Meeting April 15, 2025 Page 5 of 11 Council Member Gameros recognized Jasmine Vega for receiving the City Manager’s Award and congratulated Sergio Escobar for receiving a leadership award, spoke on meeting with individuals from SOY and spoke on mentorship, and spoke in support of hearing from constituents.

Mayor Pro Tem Chavez spoke on the SOY student’s presentation and the blanket drive which is April 21st to the 25th and the blankets can be dropped off at SOY, recognized Public Safety Dispatcher Week and praised dispatch for their work, spoke on attending the Orange County Chamber of Commerce awards event, spoke on attending the OC Japan Fair, thanked the Vista Harbor Center for paving the alley at Center Street, spoke on saving the Chinese Elm tree, suggested more patrolling at Adams Avenue and Fairview Road, spoke in support of more town halls, and requested to agendize an item for a Trap Neuter and Return Program.

Mayor Stephens spoke in support of having more town halls on specific issues, spoke on saving the Chinese Elm tree and the appeal process, spoke on the SOY students who attended the meeting, spoke on the Arts Commission description on the website and requested a report back, spoke on the Finance and Pension Advisory Committee meeting and recommendations that were made to the City Council, spoke on meeting with the Chair and Vice Chair of the Finance and Pension Advisory Committee, and spoke on his efforts at the OCTA meeting to remove the Gisler Bridge from the Master Plan of Highways and that Fountain Valley was not in support and the item was continued for 30 days.

REPORT – CITY MANAGER – NONE.

REPORT – CITY ATTORNEY – NONE.

CONSENT CALENDAR
MOVED/SECOND: Mayor Pro Tem Chavez/Council Member Marr
MOTION: Approve the Consent Calendar except for item no. 5.

The motion carried by the following roll call vote:

Ayes: Council Member Buley, Council Member Gameros, Council Member Marr, Council Member Pettis, Council Member Reynolds, Mayor Pro Tem Chavez, and Mayor Stephens.

Nays: None.

Absent: None.

Abstain: Council Member Gameros recused himself on item 3 the Warrant Resolution due to his wife working at Priceless Pets.

Motion carried: 7-0

1. PROCEDURAL WAIVER: WAIVE THE FULL READING OF ALL ORDINANCES AND

RESOLUTIONS
ACTION:

City Council and Housing Authority approved the reading by title only and waived further reading of Ordinances and Resolutions.
85 Minutes – Regular Meeting April 15, 2025 Page 6 of 11

2. READING FOLDER
ACTION:

City Council received and filed Claims received by the City Clerk and authorized staff to reject any and all Claims: Karen Franco, Gail Kay, Nona Wolverton, Masoon Yazarlou.

3. ADOPTION OF WARRANT RESOLUTION
Council Member Gameros recused himself on the item due to his wife working at Priceless Pets.

ACTION:

City Council approved Warrant Resolution No. 2732.

4. MINUTES
ACTION:

City Council approved the minutes of the regular meeting of April 1, 2025.

ITEMS PULLED FROM THE CONSENT CALENDAR

5. 2024 2015-2035 GENERAL PLAN ANNUAL PROGRESS REPORT (APR) Public Comments:

Speaker, spoke on a structural budget deficit, spoke on SB-1000 and unfunded mandates, stated the city has added 100 full-time employees and is keeping consultants but reducing the CIP, spoke on deferred maintenance on potholes, spoke in opposition of the item, and requested City Council to revisit becoming a Charter City.

Cynthia McDonald, Costa Mesa, spoke on SB-1000, and requested the City provide restroom facilities at parks.

Speaker, spoke against mocking people with disabilities.

MOVED/SECOND: Mayor Stephens/Mayor Pro Tem Chavez
MOTION: Approve staff recommendation.

The motion carried by the following roll call vote:

Ayes: Council Member Buley, Council Member Gameros, Council Member Marr, Council Member Reynolds, Mayor Pro Tem Chavez, and Mayor Stephens.

Nays: Council Member Pettis.

Absent: None.

Abstain: None.

Motion carried: 6-1
86 Minutes – Regular Meeting April 15, 2025 Page 7 of 11 ACTION:

City Council approved the 2024 Annual Progress Report for the 2015-2035 Costa Mesa General Plan for submittal to the State Office of Land Use and Climate Innovation (LUCI) [formerly known as the Office of Planning and Research (OPR)], and State Department of Housing and Community Development (HCD).
------------------------------END OF CONSENT CALENDAR------------------------------- City Council recessed into a break at 8:17 p.m.

City Council reconvened at 8:30 p.m.

PUBLIC HEARINGS:
(Pursuant to Resolution No. 05-55, Public Hearings begin at 7:00 p.m.)

1. APPEAL OF THE PLANNING COMMISSION’S DECISION TO APPROVE A CONDITIONAL USE PERMIT (CUP) PCUP-24-0011 TO OPERATE A RETAIL CANNABIS STOREFRONT BUSINESS WITH DELIVERY LOCATED AT 1912 HARBOR BOULEVARD (“GREEN MART”), IN THE LOCAL BUSINESS DISTRICT (C1)
Ex-Parte Communications: Mayor Stephens and Mayor Pro Tem Chavez spoke with both the applicant and appellant, and Council Members Marr and Gameros spoke with the applicant.

Presentation by Mr. Drapkin, Assistant Development Services Director.

Kendra Carney Mehr, representing the appellant, spoke on the project.

Keith Sheinberg, applicant, spoke on the project.

Public Comments:

James Peters spoke in opposition of the project.

Speaker, spoke in opposition of the project.

Nora Brown, spoke in opposition of the project.

Speaker, spoke in support of the project.

Speaker, spoke in opposition of the project.

Speaker, spoke in support of the project.

Speaker, spoke in opposition of the project.

Speaker, spoke in support of the project.
87 Minutes – Regular Meeting April 15, 2025 Page 8 of 11 Speaker, spoke in opposition of the project.

Speaker, spoke in support of the project.

Speaker, spoke in opposition of the project.

Speaker, spoke in opposition of the project.

Speaker, spoke in opposition of the project.

Alicia Cox spoke in support of the project.

MOVED/SECOND: Council Member Gameros/Mayor Stephens
MOTION: Uphold the Planning Commission’s decision to approve Conditional Use Permit PCUP-24-0011 based on findings of fact and subject to the conditions of approval as contained in the Resolution.

SUBSTITUTE MOTION/SECOND: Council Member Reynolds/Council Member Marr SUBSTITUTE MOTION: Deny the approval of the Conditional Use Permit PCUP-24-0011 and direct staff to prepare a resolution for denial reflecting that the necessary findings could not be met, the proposed development or use is not substantially compatible with the developments in the same general area and would be materially detrimental to other properties within the area and that granting the CUP would be materially detrimental to the health, safety, and welfare of the public and injurious to property or improvements within the immediate neighborhood.

The motion carried by the following roll call vote:

Ayes: Council Member Buley, Council Member Marr, Council Member Pettis, Council Member Reynolds, and Mayor Pro Tem Chavez.

Nays: Council Member Gameros and Mayor Stephens.

Absent: None.

Abstain: None.

Motion carried: 5-2
ACTION:

City Council denied the approval of the Conditional Use Permit PCUP-24-0011 and directed staff to prepare a resolution for denial reflecting that the necessary findings could not be met, the proposed development or use is not substantially compatible with the developments in the same general area and would be materially detrimental to other properties within the area and that granting the CUP would be materially detrimental to the health, safety, and welfare of the public and injurious to property or improvements within the immediate neighborhood.
88 Minutes – Regular Meeting April 15, 2025 Page 9 of 11

2. RESOLUTION FOR APPROVAL OF THE DRAFT RELOCATION PLAN AND RELOCATION ASSISTANCE FOR TENANTS OF 778 SHALIMAR DRIVE Presentation by Ms. Jakher, Assistant to the City Manager.

Public Comments:

Jenn Tanaka spoke in support of the item, and stated the Housing Trust Fund is intended to build new housing.

MOVED/SECOND: Mayor Pro Tem Chavez/Mayor Stephens
MOTION: Approve staff recommendation.

The motion carried by the following roll call vote:

Ayes: Council Member Buley, Council Member Gameros, Council Member Marr, Council Member Pettis, Council Member Reynolds, Mayor Pro Tem Chavez, and Mayor Stephens.

Nays: None.

Absent: None.

Abstain: None.

Motion carried: 7-0
ACTION:

1. City Council adopted Resolution No. 2025-06 approving the draft Relocation Plan for the Shalimar Park Expansion Project’s acquisition of real property located at Assessor’s Parcel Number 424-051-23 (778 Shalimar Drive) and appropriating funds thereof.

2. Authorized an appropriation of $203,717 in the Housing Trust Fund (Fund 222) for relocation assistance.

3. Authorized the City Manager, City Attorney, and Finance Director to implement the approved Relocation Program.

OLD BUSINESS:

1. APPOINTMENT TO THE ANIMAL SERVICES COMMITTEE AND CONFIRMING THE

ORANGE COUNTY MODEL ENGINEERS (OCME) LIAISON TO THE FAIRVIEW

PARK STEERING COMMITTEE
Presentation by Ms. Green, City Clerk.

Public Comments: None.
89 Minutes – Regular Meeting April 15, 2025 Page 10 of 11 MOVED/SECOND: Mayor Pro Tem Chavez/Mayor Stephens
MOTION: Appoint Kalvin Alvarez to the Animal Services Committee and confirm Hank Castignetti as the Orange County Model Engineers City liaison to the Fairview Park Steering Committee.

The motion carried by the following roll call vote:

Ayes: Council Member Buley, Council Member Gameros, Council Member Marr, Council Member Pettis, Council Member Reynolds, Mayor Pro Tem Chavez, and Mayor Stephens.

Nays: None.

Absent: None.

Abstain: None.

Motion carried: 7-0
ACTION:

1. Mayor Pro Tem Chavez appointed Kalvin Alvarez to the Animal Services Committee with a term expiration of April 2027.

2. The City Council confirmed Hank Castignetti as the Orange County Model Engineers (OCME) City liaison to the Fairview Park Steering Committee.

NEW BUSINESS: NONE.

ADDITIONAL COUNCIL/BOARD MEMBER COMMITTEE REPORTS, COMMENTS, AND SUGGESTIONS – NONE.

ADJOURNMENT – Mayor Stephens adjourned the open meeting at 10:39 p.m. and City Council recessed to Closed Session. Closed Session ended at 11:42 p.m., and the City Attorney stated there would be no reporting out.
90 Minutes – Regular Meeting April 15, 2025 Page 11 of 11 Minutes adopted on this 6th day of May, 2025.
___________________________
John Stephens, Mayor
ATTEST:
___________________________
Brenda Green, City Clerk
91 CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 25-271 Meeting Date: 5/6/2025
TITLE:

ALERTOC MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN THE CITY OF COSTA

MESA AND THE COUNTY OF ORANGE
DEPARTMENT: POLICE DEPARTMENT
PRESENTED BY: DELCIE HYNES, EMERGENCY SERVICES MANAGER
CONTACT INFORMATION: DELCIE HYNES, EMERGENCY SERVICES MANAGER 714-754- 5189
RECOMMENDATION:

Staff recommends the City Council:

1. Approve the Memorandum of Understanding (MOU) between the City of Costa Mesa and the County of Orange to allow the use of the County’sCountywide Mass Notification System under the terms and conditions of the County’s Countywide Mass Notification System Operations Guidelines and vendor-provider agreements, commencing on December 30, 2024, through December 30, 2029.

2. Authorize the City Manager and/or her designee to execute and manage the MOU on behalf of the City of Costa Mesa.

BACKGROUND:

AlertOC has been used since its inception in 2008 to contact hundreds of thousand Orange County residents in times of emergency. Public safety agencies have employed AlertOC for a wide range of notifications, including missing children, severe weather warnings, COVID-19 information, and evacuations when required for public safety purposes.

On July 22, 2008, the Orange County Board of Supervisors (BOS) extended use of the AlertOC system regionally by approving a MOU with Orange County municipalities and public universities, which are responsible for protecting a resident population and maintains a dedicated Public Safety Answering Point (PSAP).

As a full-service City providing police, fire and 911 emergency communications services, Costa Mesa has a dedicated PSAP and is eligible to enter an MOU with the County for its own use of AlertOC.

The MOU allows the City to use the County’sCountywide Mass Notification System under the terms and conditions of the County’s Countywide Mass Notification System Operating Guidelines and vendor-provided agreements.

Over time, the County of Orange has updated the terms and conditions of the AlertOC operating

92 File #: 25-271 Meeting Date: 5/6/2025
Over time, the County of Orange has updated the terms and conditions of the AlertOC operating guidelines, which has resulted in updates to the MOU. On June 18, 2013, the Orange County Board of Supervisors approved an MOU with cities, public universities, and water agencies to allow their use of the County's Countywide Mass Notification System under the terms and conditions of the County's Operating Guidelines and vendor-provided agreements for the period of July 1, 2013, through June 30, 2016.

On May 5, 2016, the Board renewed the MOU with Orange County cities, universities, and water agencies for a five-year term from July 1, 2016, through June 30, 2021. On June 22, 2021, the Board approved an updated version of the MOU with the Orange County cities, universities, and water agencies for a four-year term from July 1, 2021, to June 30, 2025. Most recently, on November 19, 2024, the Board approved an updated version of the MOU with the Orange County cities, universities, and water agencies for a five-year term from December 30, 2024, to December 20, 2029. The updated version of the MOU approved by the County is the basis for this recommendation.

ANALYSIS:

Staff is requesting the approval of a non-financial MOU between the City of Costa Mesa and the County of Orange for use of the Countywide Mass Notification System for the term of December 30, 2024, through December 30, 2029.

Approval of the MOU with the County of Orange will allow the City of Costa Mesa to continue using the County's Countywide Mass Notification System, AlertOC, to notify our residents in times of emergency.

ALTERNATIVES:

The City Council could decide not to approve the MOU with the County of Orange; however, this alternative is not recommended because it would result in the loss of access to the AlertOC mass notification system which would be essential in the event of a disaster.

FISCAL REVIEW:

There is no fiscal impact with this action as the AlertOC service is provided through the Memorandum of Understanding (MOU) between the City of Costa Mesa and the County of Orange.

LEGAL REVIEW:

The City Attorney’s Office has reviewed this report and the MOU and approved them as to form.

CITY COUNCIL GOALS AND PRIORITIES:

This item supports the following City Council Goal: Strengthen the public’ssafety and improve the quality of life.

93 File #: 25-271 Meeting Date: 5/6/2025
CONCLUSION:

Staff recommends the City Council:

1. Approve the Memorandum of Understanding (MOU) between the City of Costa Mesa and the County of Orange to allow the use of the County's Countywide Mass Notification System under the terms and conditions of the County's Countywide Mass Notification System Operating Guidelines and vendor-provided agreements, commencing on December 30, 2024, through December 30, 2029.

2. Authorize the City Manager and/or her designee to execute and manage the MOU on behalf of the City of Costa Mesa.

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County of Orange and Orange County Operational Area
Countywide Public Mass Notification System
Operating Guidelines

Effective: June 30, 2008 Revised: October 15, 2024

I. PURPOSE
The purpose of these Operating Guidelines is to describe the use and administration of AlertOC, the Orange County Public Mass Notification S ystem ( “System”) by the County of Orange (“County”), County agencies and departments (“Agencies”), and local jurisdictions authorized by the County Board of Supervisors (“Jurisdictions”). Th is document will provide roles and responsibilities at the regional level. Individual Jurisdictions/ Agencies should create and maintain subordinate procedures which incorporate the regional concepts outlined below. The step-by step procedures for activation and use will be maintained in a separate document maintained by each jurisdiction/agency as a part of their emergency response plans for overall planning and response efforts. A copy of these guidelines shall be maintained in PrepareOC.

This document does not supersede any policy and procedures outlined in the Memorandum of Understandings signed by participating agencies, but should be used to support the use of the System.

Authorized users must respect the integrit y of the System, understand the regulatory and privacy issues, and fully comply with the guidelines outlined in this document.

II. SYSTEM DESCRIPTION
The primary intent of the System is to disseminate early warning and time sensitive information to County businesses and community members during an emergency event. The System is only one component of the County of Orange public warning system. As deemed fit by local authorities, the System should be used in conjunction with the other public warning mechanisms including, but not limited to: route alerting, the Emergency Alert System, outdoor warning systems, and press releases.

The System is available 24/7 and has been pre -loaded with Orange County landline phone numbers (including unlis ted) and countywide geographic maps. Additionally, community members have the option to provide additional contact information via self -registration portal AlertOC.gov with link access from county and all participating entity websites. The System will be used to send messages, describing the situation, impacted area, and recommended action the public should take, to affected businesses and community members via telephone, e-mail, and/or text.

The County is the sponsor of the System and will take appropriate measures to ensure that the System is in a state of operational readiness at all times. It is the responsibility of all participating Agencies to maximize community member benefits from the System.

While the County’s intent for implementing and maintaining the System is for “emergency” use, upon consent from local authorities, cities may optionally use the S ystem to disseminate “government-related” non- emergency notifications to community members and organization resources within its jurisdiction.

ATTACHMENT 3
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Operating Guidelines

III. OVERVIEW OF GENERAL SYSTEM FEATURES
At minimum, the Orange County Sheriff’s Department Emergency Management Division shall acquire and maintain a System capable of meeting the following requirements:

A. Licensed for use throughout the County’s entire region B. Capable of sending Wireless Emergency Alerts and Emergency Alert System notifications
C. Capacity to send a 45 second message to 10,000 community members and businesses within 10 minutes
D. Capacity to send messages via phone, e-mail and text E. Accessible via the public internet
F. Provides audit trail logging and reporting
G. GIS map interface for geographic call list generation H. Community member self-registration web portal (available in threshold languages) I. Interactive phone survey technology and reporting
J. I nteractive Voice Response based notification setup and execution K. Unlimited vendor support, with access to vendor available for Jurisdictions as needed

IV. REGULATIONS AND AUTHORITIES
The System is operated in compliance with laws and regulations which are incorporated by reference into these Operating Guidelines.
• 47 C.F.R. Part 11 – Emergency Alert System
• 47 C.F.R. Part 10 – Wireless Emergency Alerts
• American with Disabilities Act

The System uses the E911 database to complete the notifications. The use of the E911 database is regulated by the California Public Utilities Code (CPUC) sections 2872 and 2891 et seq. The information contained in the E911 database is confidential and proprietary and shall not be disclosed or used except by authorized personnel for the purpose of emergency notifications. Any agency in violation of this regulation is subject to criminal charges as described in the CPUC.

V. GOVERNANCE
The County Board of Supervisors has authority over the System governance.

The Orange County Sheriff’s Department Emergency Management Division (OCSD-EMD) will manage the System as a countywide asset on a day-to-day basis. The OCSD-EMD will draft, implement and maintain policies, processes, and data related to the System. The OCSD-EMD is responsible for ensuring that the provisions of the Vendor contract are implemented properly.

The Emergency Management Council Subcommittee and the Orange County Emergenc y Management Organization- Technology Subcommittee are responsible for recommending plans, procedures, and policies related to the System for approval.

The Orange County Emergency Management Council and County of Orange Operational Area Executive Board are responsible for approving plans, procedures, and policies related to the System.
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Operating Guidelines

VI. AUTHORIZED USERS
Use of the System by each Agency and Jurisdiction is contingent upon that Agency or Jurisdiction abiding by the contract with the mass notification vendor , and the protocols established by the Emergency Management Council and Operational Area Executive Board.

The System is designed to be a countywide asset, available to all Jurisdictions that have a dedicated public safety answering point (PSAP) and/or a residential population for whom they are responsible for making protective action recommendations.

An Agency may participate in the countywide System at no charge when used for emergency purposes until December 30, 2029.

Entities authorized to join the system at no cost are limited to the County, Orange County Cities, the Municipal Water District of Orange County and Orange County Retail Water Agencies, and the University of California, Irvine. Each participating Jurisdiction must sign a Memorandum of Understanding ( MOU) and will maintain, at minimum, a Local Administrator responsible for implementing and administering use of the System at the local level.

A. County Level

1. County Administrator
The OCSD-EMD will assign and maintain a designated County Administrator responsible for overall acquisition, accessibility, maintenance, compliance and management of all components required to provide an effective countywide mass notification system.

The County Administrator is responsible for:

1. System acquisition and contract management.

2. Policy management and as needed modification (in consultation with public safety, emergency management and emergency response personnel.)

3. Audit compliance: routine monitoring of System use t o insure policy and contract compliance.

4. Access management: record management of signed MOU from each participating Agency, distribution of local administrator accounts and updated Local Administrator contact list.

5. Data management: E911 data acquisition, update and compliance monitoring.

Countywide map file acquisition, update and overall geo-coding.

6. Testing: facilitate routine System -wide test exercise, document overall test results and recommend and execute, as needed, corrective action at the County level.

7. User Testing: verify and document County Alert and Warning Users are performing monthly tests.

8. Public education campaign: initiate and facilitate public education campaign aimed at making the public aware of the countywide public mass notification sys tem initiative and individual registration web portal.
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Operating Guidelines

9. Exclusion List: maintaining exclusion lists , provided by Local Administrators, in the System.

10. System support: provide support to County Users and Local Administrators.

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Operating Guidelines

2. County User
The County will have two levels of users: Alert & Warning Users and Agency Users .

Both Alert and Warning Users and Agency Users are responsible for obtaining Multi - Factor Authentication (MFA) software and will require MFA software to be functional for access to the System.

Alert & Warning Users
Orange County Sheriff’s Department Emergency Communication Bureau (9-1-1 dispatch), Control One and Emergency Management Division personnel will be setup as Alert & Warning Users . Alert & Warning Users will have permission to access and launch emergency notifications to all jurisdictions within Orange County consistent with the County of Orange and Orange County Operational Area Alert and Warning Plan.

Alert and Warning users should perform monthly tests including:

1. Logging into AlertOC

2. Sending a test message to one or more contacts

3. Checking message receipt to ensure message was delivered

A Jurisdiction that contracts with the Orange County Sheriff’s Department for police services authorizes the OCSD-Control One, OCSD-Dispatch, or OCSD-EMD personnel to launch on their behalf if requested by contracted field personnel in order to launch messages in a timely manner. These jurisdictions can also launch on their own behalf.

Agency User
Agency Users will have permission to execute int er-department notifications.

Unincorporated areas of Orange County will have emergency messaging to the public launched by the Orange County Sheriff’s Department. All other County Agencies may have access to use the S ystem for interdepartmental use. Each participating Agency shall develop and maintain written procedures to identify and address the Agency’s specific use of the System within the scope of this policy guide and provide this guideline to the Orange County Sheriff’s Department Emergency Management Division. Each participating County agency shall maintain a level of training for their users consistent with the County of Orange and Orange County Operational Area Alert and Warning Plan.

B. Jurisdictions
Jurisdictions wishing to participate may do so by having an authoritative representative sign the “Orange County Public Mass Notification System” MOU. Upon signing the MOU, the Jurisdiction will identify a Local Administrator. The Local Administrator completed specified training and certifications before being provided with an account. Throughout the term of the MOU, the Jurisdiction may use the System to send an unlimited number of emergency notifications to the public as well as an unlimited number of emergency and non-emergency inter-department me ssages. Each participating Jurisdiction shall develop and maintain written procedures to identify and address the Jurisdiction’s specific use of the System within the scope of this guideline. Each participating Jurisdiction shall maintain a level of traini ng 161
County of Orange and Orange County Operational Area
Countywide Public Mass Notification System
Operating Guidelines

for their users consistent with the County of Orange and Orange County Operational Area Alert and Warning Plan.

1. Local Administrator
Participating Jurisdictions agree to appoint a designated Local Administrator responsible for leading, coordinating, monitoring and optimizing use of the System at the local level.

Local Administrator shall act as the Jurisdiction’s central point of contact and will work collaboratively with the County Administrator to ensure local use of the system is within MOU and Operating Guidelines.

Local Administrator is responsible for:

1. Contract acquisition if Agency will use the system for non-emergency purposes.

2. Local Agency Mass Notification Operating Procedure development and management.

3. Use compliance: routine monitoring to ensure System is used within the conditions and terms of this document and associated MOU.

4. Access management: Local U ser account distribution and management, including an annual audit of accounts; annual attestation that all Local Administrators and Local Users are authorized to continue accessing the system.

Record management of MOU(s) and signed Local User certifications.

5. Testing: facilitate routine local System test exercise, document local test results and recommend and execute, as needed, corrective action at the local level.

6. User Testing: verify and document Local Users with Alert and Warning responsibilities are performing monthly tests.

7. Public education campaign: initiate and facilitate public education campaign aimed at making the local community aware of the intended use of the System and individual registration web portal.

8. System support: provide support to Local Users.

9. Providing logins and procedural training to key individuals within their Agency responsible for using the System.

10. Exclusion Lists: provide annually a review of the exclusion list for businesses, phone numbers, and organizations in the Participating Jurisdiction.

11. Training: ensuring Local Users complete security awareness training that covers at a minimum the following areas: proper protection, handling, dissemination, and destruction of confidential information (CI); threats, vulnerabilities, and risks associated with handling of CI; social engineering; system responsibilities and expected behavior; account usage and m anagement – including password creation, protection, and frequency of changes; system usage – allowed vs. prohibited; incident response; physical security; email protection – phishing threats and business account compromise

12. Incident Response: Local Adminis trator is responsible to immediately notify OCSD of any incidents that could lead to the unauthorized or accidental use, modification, disclosure, or destruction of any information contained within the system.

2. Local User:
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Operating Guidelines

Participating Jurisdictions may have an unlimited number of Local Users. Local Users will have access to community member contact records within their J urisdiction or Service District. Local Users will be authorized and managed by the Local Administrator and may have varied system permissions. For Water Retail Water Agencies , Local Users may use the System to send emergency notifications to the public by using pre- established GIS shape files or the system’s interactive map feature to identify their water users.

Local Users are responsible for obtaining Multi -Factor Authentication (MFA) software and will require MFA software to be functional for access to the System.

If a local user has access to send Alert and Warning messaging to the public then t he local user should perform monthly tests including:

1. Logging into AlertOC

2. Sending a test message to one or more contacts (this can be the Alert and Warning User)

3. Checking message receipt to ensure message was delivered

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Operating Guidelines

VII. AUTHORIZED USE

A. Emergency Public Notifications
Legal restrictions exist related to issuing different types of messages through the System.

All Users are required to know and understand these restrictions. The Form in Attachment B delineates the requirements for each type of message.

As a general principle, the System is to be used when the public is being asked to take some action (e.g. evacuate, prepare to evacuate, shelter in place, boil tap water before drinking, local assistance centers and other follow up information, re-entry to an area after evacuation orders have been lifted or termination of the emergency because the danger has passed).

Use of the System for emergency activity contains two components: (1) the need to disseminate critical, safety-related information to individuals regarding emergency events occurring now, follow up information regarding the event and termination of the emergency event, and (2) communicating with safety-responder staff, volunteers and involved parties about the emergency event.

Emergency Public Notifications are limited to:

1. Imminent or perceived threat to life or property

2. Disaster notifications

3. Evacuation notices

4. Public health emergencies

5. Public safety emergencies

6. Any notification to provide emergency information to a defined community

The following criteria should be used to assist with determining the need to issue an alert:

1. Severity. Is there a significant threat to public life and safety?

2. Public Protection. Is there a need for members of the public to take a protective action in order to reduce loss of life or substantial loss of property?

3. Warning. Will providing warning information assist members of the public in making the decision to take proper and prudent action?

4. Timing. Does the situation require immediate public knowledge in order to avoid adverse impact?

5. Geographical area. Is the situation limited to a defined geographical area? Is that area of a size that will allow for an effective use of the system, given the outgoing call capacity?

6. Are other means of disseminating the information inadequate to ensure proper and time delivery of the information?

7. Is the message being sent follow up information to an emergency event in progress?

If the answer to ALL of these questions is “Yes”, then an activation of the System for emergency purposes may be warranted.

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Operating Guidelines

Illustrations of incidents which may be Emergency Public Notifications are included in Attachment A.

Participating Agencies are authorized to develop pre- established notification lists and messages related to specific types of emergencies. The circumstances for using these lists should be documented within County emergency plans and annexes approved by the Emergency Management Council, and their establishment coordinated with the County Administrator. Such documentation should include which forms of System notification will be used (e.g., opt -in agency data). During emergencies, messages will be coordinated with the Operational Area Emergency Operations Center or OCSD-EMD. These lists may include special populations (e.g. in- home care, schools, etc.) or those susceptible to certain risks (e.g. homes within dam inundation zone). It is the responsibility of the participating Agency to create, maintain and update these lists.

B. Emergency Responder Notifications
Emergency Responder Notifications are limited to:

1. Contacting first responders to advise of an emergency

2. Contacting first responders to report for duty due to an emergency

3. Contacting key staff regarding an emergency or crisis situation

4. Contacting agency employees/DSWs to report at a different time or location (or provide an update) due to an emergency

5. Exercises

Emergency considerations:

1. N otification shall clearly state situation is an emergency

2. Message length shall not exceed 60 seconds

3. Message shall have a call back number specific to the agency issuing the notification.

4. It is highly recommended all messages are recorded using a real voice and not the computer transcriber.

5. It is highly recommended to provide a phone number or website where the public can obtain additional or updated information

6. An all clear notification should be sent when applicable

C. Non-Emergency Public Notifications
Non-emergency public notification use is prohibited for any of the following purposes:

1. Any message of commercial nature

2. Any message of a political nature

3. Any non-official business (e.g. articles, retirement announcements, etc.)

4. To send a message to an E911 obtained data source

E911 data is cannot be used for non-emergency use except for testing according to the law California Public Utilities Code (CPUC) sections 2872 and 2891.1 and violators may be subject to criminal enforcement. Any Agency or Jurisdiction in violation of this term may have their use of the System suspended or their individual access revoked.

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Operating Guidelines

No Jurisdiction shall use the System for non -emergency public announcements unless a separate contract with the Vendor is established. Cost associated with non- emergency public notifications is the responsibility of the local Jurisdiction. Jurisdictions will be limited to using the self -registering portal entry data only when launching non- emergency messages.

Jurisdictions who contract to use the System for non-emergency activity agree to give precedence to emergency notification call-outs by delaying or terminating non- emergency notification sessions if needed to increase emergency message success . The primary concern for point of failure in this situation is not the System, but the telephone port capacity of local phone provider s responsible for delivering calls to community members and businesses.

D. Inter-Department Communication
Each participating Agency and Jurisdiction is authorized to create employee/volunteer and department call lists and pre-recorded messages. Agencies and Jurisdictions may use the System for non-emergency inter-departmental business communication as needed, without cost. It is recommended that individual Agencies identify where this would add value to their operations and establish separate written protocols and procedures for this use. Inter- departmental users will have permission to inter-departmental contact information only and are authorized to use the System solely for inter-departmental communication including but limited to first responder or volunteer call-outs.

VIII. ACTIVATION OF THE SYSTEM
Each Jurisdiction is responsible for launching messages to affected community members and businesses within their Jurisdiction or Service District. • For messages launched by Jurisdictions on their own behalf, Jurisdictions are responsible for identifying and documenting who has the authority to launch messages.
• For messages launched by the County on behalf of Jurisdictions, the County requires the message be authorized by either the City Manager, City Police Chief, City Fire Chief, City Emergency Manager, or by public safety personnel on the incident scene with Incident Commander approval. Exigent circumstances wil l be evaluated on a case-by-case basis if the preceding individuals are not available.

The County of Orange and Orange County Operational Area Alert and Warning Plan is incorporated by reference. This document delineates the processes for coordinating al l alert and warning notifications, including those transmitted using this System.

IX. LIMITATIONS OF THE SYSTEM
Every effort will be made by the County to ensure the System operates in the manner described in the SOP. However there are limitations of technology which may cause the system to fail or provide inconsistent message delivery. Some of these limitations include:
• Cell Phone Disruptions
• Cell Phone Reception Coverage
• Public Safety Power Shutoff events

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Operating Guidelines

X. ROUTINE TESTING
Monthly System tests will be conduct ed to ensure that use of the System in an emergency is optimized and users are familiar with operation. All users should perform monthly message proficiency tests. Users who do not login and perform a message proficiency test at least yearly are subject to removal as a user from the System.

The System will have an annual regional test. This includes testing operational readiness, activation procedures and system effectiveness as well as validating data and system processes. Through the annual test exercise, System administrators and users will be able to observe the mode of operation to augment and refresh System and process knowledge.

Specific test exercise routines, roles, responsibilities and schedule will be detailed in the County of Orange and Operational Area Alert and Warning Plan.

By signing the Mass Notification System MOU, participating Jurisdictions agree to take part in System drills and exercises.

XI. CONFIDENTIALITY AND SECURITY
Through the “Memorandum of Understanding between the County of Orange and Participants for use of Countywide Mass Notification System,” each agency is bound in writing to the confidentiality obligations sufficient to permit agencies to fully perform its obligations under this policy or the vendor agreement. Jurisdictions and Agencies shall be responsible for:

1. Ensuring users have completed an appropriate background check and undergone annual security awareness training.

2. Protecting Confidential Information (CI) contained within the system against accidental or unauthorized use, modification, dissemination, or destruction.

3. Ensuring that users maintain the confidentiality of all u ser login and password information;

4. Ensuring that users follow the 90 day password expiration limit;

5. Ensuring that users use the service in accordance with all applicable laws and regulations, including those relating to use of personal information;

6. Immediately notifying the County Administrator of any security incident that could lead to the unauthorized access, use, modification, dissemination, or destruction of CI contained within the system.

7. Any breach of the terms of this policy or the vendor agreement by any user; and

8. All communications by users using the service.

XII. COSTS
The County of Orange agrees to fund the System for notifications classified as “emergency use.” The Co unty of Orange also agrees to continue to obtain updated E911 telephone data and geographic maps.

Costs associated with use of the System for non-emergency activity is the responsibility of the local Jurisdiction through separate contract with the Vendor.

XIII. DEFINITIONS

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County of Orange and Orange County Operational Area
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Operating Guidelines

System – All components of the Mass Notification System including hardware, software, access portals, contact data and GIS maps.

Community members – Comprises individuals and businesses.

Emergency - “Emergency” shall include, but not be limited to, instances of fire, flood, storm, epidemic, riots, or disease that threaten the safety and welfare of the individuals and property located within the boundaries of the county and participants’ respective jurisdictions.

XIV. REVISION HISTORY

Revision Date Author Description
April 18, 2008 PMNS Policy
Committee
Document originated
May 19, 2008 PMNS Executive
Review Team
Non-emergency session termination in
Section V., Item C.

June 16, 2008 Teara LeBlanc Exception clause in Section VII, Item A., bullet 2.

May 2010 Vicki Osborn Revision of all sections
June 2012 Raymond Cheung Revision for OCSD transition
May 2013 Raymond Cheung Revision for new vendor contract May 2016 Raymond Cheung Added confidentiality item to Section V., Item C. and allowed non-emergency use in
Section V., Item B. and Section VIII.

June 2021 Harmon “Jay” Ward Revision for new contract
Revision of Sections II, III, IV, V, IX, and XI.

October 2024 Harmon “Jay” Ward Revision for new contract ; added User Testing for County and Local Jurisdictions in
Sections VI and X; added City Emergency
Manager as Authorized Requestor in
Section VIII; added Section IX; added
password expiration in Section XI.

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Operating Guidelines

XV. ATTACHMENT A – INCIDENT ILLUSTRATIONS
This is a non-exhaustive list provided as examples.

Type of Incident Description Meets
Public
Safety
Criteria
Active Shooter A shooting with armed individual or individuals is occurring in a known area.

Yes
Boil Water
Orders
An unsafe water supply issue requiring the public to boil water before use.

Yes
Building Fire A fire occurring in an urban area requiring evacuation or shelter in place for the immediate area.

Yes
Violent Crimes Violent crimes that just occurred such as robbery, assault, murder, etc.

Yes
Felony Suspect
at Large
Law enforcement is currently searching for a felony
suspect that is suspected to be in a certain area.

Yes
HazMat Hazardous Materials incidents that require a fire/hazmat response and may include evacuations or shelter-in-
place orders.

Yes
Health Orders Any public health order made pursuant to County Health Officer recommendations.

Yes
Missing Adult
(920A) with
special circs
12- 17 yrs with decreased mental capacity or medical
condition
Yes
Missing Child
(920C)
12 yrs or younger Yes
Missing Juvenile
(920J)with
special circs
18 yrs and older 12- 17 yrs with decreased mental
capacity or medical condition
Yes
Severe Weather
Related
Weather warnings that forecast an occurring or
imminent threat to public safety or coincide with
protective action recommendations such as voluntary or
mandatory evacuation orders.

Yes
Evacuation or
Shelter-in-Place
Voluntary or mandatory evacuation or shelter-in-place
orders.

Yes
Wildland Fire A fire occurring in a wildland urban interface area requiring immediate evacuation or shelter-in-place.

Yes
Road Closures Unplanned road closures due to an emergency situation.

Yes
Planned Events Road closures due to community events planned in advance.

No

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Operating Guidelines

XVI. Attachment B – AlertOC/WEA/EAS Activation Form

170
Public Mass Notification System
Individual User Agreement

1. _______
___________________(hereinafter “USER”) is an agent, officer, employee or representative of __________________________, (hereinafter “PARTICIPANT”).

2. PA
RTICIPANT is a signatory to a Memorandum of Understanding (“MOU”) between with the County of Orange (“COUNTY”) for Use of Countywide Mass Notification System (“SYSTEM”).

3. As
an agent, officer, employee or representative of PARTICIPANT, USER has been granted access to the System by PARTICIPANT and is deemed an Individual User under the MOU. USER can have access removed by the Local Administrator for PARTICIPANT at any time.

4. USE
R understands that as an Individual User, USER may only use the SYSTEM in the manner described in the MOU, the Everbridge GSA Approved End User License Agreement, and in accordance with the requirements of the law.

5. By
signing this Individual User Agreement, USER hereby further expressly agrees to the do following things:
a) to m
aintain the confidentiality of login and password information; b) to
use the System in accordance with all applicable laws and regulations, including those relating to use of personal information;
c) to
be responsible for any breach of the terms of the Agreement with Everbridge and/or the MOU between PARTICIPANT and COUNTY caused by the USER;
d) to
notify the Local Administrator or County Administrator if there is a breach of security caused by the USER e) to m
aintain the confidentiality of all records and information to which the USER may have access as a result of their access to the System pursuant to all statutory laws relating to privacy and confidentiality that currently exist or exist at any time during the term of this MOU; f) tha
t all information transmitted and the use of the SYSTEM by USER shall be in compliance with California Public Utilities Code section 2872; and
g) to b
e responsible for notifying the Local Administrator if the USER is no longer an agent, officer, employee, or representative of PARTICIPANT

6. USE
R also acknowledges having been provided the opportunity to review the GSA Approved End User License Agreement with Everbridge, the Memorandum of Understanding Between the County of Orange and Participants for Use of Countywide Mass Notification System, and California Public Utilities Code section 2872, prior to signing this Individual User Agreement, and hereby agrees to abide by both the letter and intent of those documents.

7. US
ER may withdraw their consent to terms contained within this Individual User Agreement at any time by notifying PARTICIPANT in writing. USER acknowledges, however, that withdrawing USER’s consent will result in immediate termination of USER’s right and ability to access the SYSTEM.

By
signing this Individual User Agreement, USER acknowledges having thoroughly read the foregoing, and hereby consents and agrees to the above terms and conditions.

Da
ted: __________________ _____________________________________ Signature
_______
________________________________
Printed Name
_______
________________________________
Email Address
ATTACHMENT 4
171

CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 25-274 Meeting Date: 5/6/2025
TITLE:

FAIRVIEW ROAD ACTIVE TRANSPORTATION IMPROVEMENTS - ADAMS AVENUE TO FAIR DRIVE
DEPARTMENT: PUBLIC WORKS DEPARTMENT/ TRANSPORTATION

SERVICES DIVISION
PRESENTED BY: RAJA SETHURAMAN, PUBLIC WORKS DIRECTOR
CONTACT INFORMATION: RAMIN NIKOUI, SENIOR ENGINEER; BRETT ATENCIO

THOMAS, ACTIVE TRANSPORTATION COORDINATOR
RECOMMENDATION:

Staff recommends the City Council:

1. Award a Professional Services Agreement (PSA) to Onward Engineering for professional engineering design services for the Fairview Road Active Transportation Improvements - Adams Avenue to Fair Drive project (Federal Project No. STPL-5312(109)) in the amount of $313,081, in final form approved by the City Attorney.

2. Authorize a ten percent (10%) contingency in the amount of $31,308 for any unforeseen costs that may be required by the project.

3. Authorize the City Manager and the City Clerk to execute the PSA and any future amendments to the agreement.

BACKGROUND:

The City has identified the need for various Active Transportation infrastructure improvements to provide a higher quality and more inviting bicycling and walking experience to the community. The Fairview Road Active Transportation Improvements Project (Project) will improve bicycle and pedestrian access and mobility along Fairview Road from Adams Avenue to Fair Drive. The Project will enhance the bicycle facility along the street which will serve to enhance operations by providing separation between bicyclists and vehicles. The Project is also planned to include high-visibility crosswalks, green bicycle conflict markings, and landscape and irrigation to improve pedestrian connectivity and safety. The Project will design a Class IV Cycle Track on Fairview Road and connect to the proposed Fairview Road Cycle Track from Fair Drive to Newport Boulevard, which is expected to begin construction in Fall 2025.

In 2024, the City secured a federal Orange County Complete Streets Program (OCCSP) grant to

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In 2024, the City secured a federal Orange County Complete Streets Program (OCCSP) grant to design and construct the Project. Due to the advancement of federal funding deadlines for the grant, the design of the project needs to be expedited and federal construction authorization obtained by June 2026.

ANALYSIS:

The procurement was handled in accordance with federal procedures outlined in the Caltrans Local Assistance Procedures Manual (LAPM) Chapter 10, Consultant Selection, for architectural and engineering (A&E) services. Proposals are evaluated and ranked in accordance with the qualifications of the firm, staffing, work plan, and familiarity with federal procedures. A&E procurement prohibits cost as an evaluation criterion, and evaluation of the proposals shall be conducted only based on qualifications because this is a federally funded project. The highest-ranked firm is requested to submit a cost proposal, and the final agreement is negotiated with the City.

Should negotiations fail with the highest-ranked firm, a cost proposal will be solicited from the next highest-ranked consultant until an agreement is reached.

On January 23, 2025, the City issued a Request for Proposals (RFP) on PlanetBids for professional engineering design services for the Project. Two (2) proposals were received to provide professional engineering design services. Proposals were reviewed for compliance with the RFP, and consultants were evaluated based on project understanding, depth of experience, technical expertise, and knowledge of federal procedures. The proposals were evaluated utilizing the following evaluation criteria and weightings:

In developing the criteria and weightings, several factors were considered. The firm’squalifications and experience performing relevant work of similar scope, size and complexity are important to the success of the Project. The proposed team should include key personnel who are experienced in working on active transportation projects. Given the project is federally funded, the firm’sfamiliarity with federal procedures is important for successfully completing all federal requirements, and this was added as an additional evaluation criterion and assigned a weighting of 10%.

After a thorough evaluation of the two proposals, one of the proposers was found nonresponsive and disqualified due to not submitting the required materials as outlined in the RFP. Staff found the remaining firm, Onward Engineering (Onward) to be responsive to the requirements in the RFP, responsive to the Disadvantaged Business Enterprise goal of 20% outlined in the RFP, and found Onward well qualified to perform the requested engineering design services for the project.

Onward Engineering has been providing engineering design services for over 20 years and is based

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Onward Engineering has been providing engineering design services for over 20 years and is based in Anaheim, California. Onward offers professional services including design engineering, project management, construction management, staff augmentation, plan check, construction inspection, and surveying. They are experienced working on active transportation projects and have worked on federally funded projects. Some of Onward’srecent projects include the design of multi-use pathways at The Tracks at Brea, bike lane improvements in El Monte, and the Olive Grove Park Multi-use Trail Project. Onward is currently working on the City’s Adams Avenue Active Transportation Improvements - Multipurpose Trails project to design Class I Multi-use paths along Adams Avenue from the Santa Ana River to Royal Palm Drive.

The proposal submitted by Onward represents a thorough understanding of the Project. Onward provided a comprehensive and viable work plan and schedule that demonstrated an understanding of the project requirements and the expedited project timeline required to meet the federal funding deadline for construction obligations. Onward’s proposal complies with City requirements and contains all required federal forms. The proposal documents Onward’s technical ability and experience with similar projects and includes a project team consisting of staff with multiple years of experience working on active transportation and federally funded projects. Onward’s design fees were finalized through multiple rounds of negotiations with City staff and determined to be competitive and commensurate with the requested services.

ALTERNATIVES:

The City Council could choose to not approve the PSA and conduct the project using in-house resources. However, the technical expertise and volume of the work associated with the project far exceed the staff’savailable resources and time. The City Council could also choose to readvertise the RFP. Both of these options would result in significant delays in the completion of the design and would result in not meeting the federal grant timelines required to obtain federal authorization for construction. Therefore, staff does not recommend the alternatives.

FISCAL REVIEW:

The total amount for the proposed contract inclusive of contingency will not exceed $344,389.

Funding for the Fairview Road Improvement project in the amount of $300,000 is available in the Fiscal Year 2024-25 budget, in multiple Capital Improvement projects, including Federal Grants (Funds 230), Capital Improvement Fund (Fund 401), and Measure “M2”Fairshare (Fund 416). The remaining amount of $44,389 will be funded by the Class II and III Bicycle Project in the Traffic Impact Fund (Fund 214) and Capital Improvement Fund (Fund 401).

LEGAL REVIEW:

The City Attorney’sOffice has reviewed this report, prepared the proposed PSA and approves them both as to form.

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CITY COUNCIL GOALS AND PRIORITIES:

This item supports the following City Council Goals:
· Strengthen the public’s safety and improve the quality of life. · Maintain and enhance the City’s facilities, equipment and technology. · Advance environmental sustainability and climate resiliency.

CONCLUSION:

Staff recommends the City Council:

1. Award a Professional Services Agreement (PSA) to Onward Engineering for professional engineering design services for the Fairview Road Active Transportation Improvements - Adams Avenue to Fair Drive project (Federal Project No. STPL-5312(109)) in the amount of $313,081, in final form approved by the City Attorney.

2. Authorize a ten percent (10%) contingency in the amount of $31,308 for any unforeseen costs that may be required by the project.

3. Authorize the City Manager and the City Clerk to execute the PSA and any future amendments to the agreement.

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CITY OF COSTA MESA

PROFESSIONAL SERVICES AGREEMENT

WITH ONWARD ENGINEERING
THIS
PROFESSIONAL SERVICES AGREEMENT (“Agreement”) is made and entered into this 6th day of May, 2025 (“Effective Date”), by and between the CITY OF COSTA MESA, a municipal corporation (“City”), and ONWARD ENGINEERING, a California corporation (“Consultant”).

RECI
TALS
A. Ci
ty proposes to utilize the services of Consultant as an independent contractor to provide professional engineering design services for the development and construction bid documents for the City’s federally -funded Fairview Road Active Transporation Improvements – Adams Avenue to Fair Drive (Federal Project No. STPL – 5312(109), as more fully described herein; and
B. Cons
ultant represents that it has that degree of specialized expertise contemplated within California Government Code s ection 37103, and holds all necessary licenses to practice and perform the services herein contemplated; and
C. Ci
ty and Consultant desire to contract for the specific services described in Exhibit “A” and desire to set forth their rights, duties and liabilities in connection with the services to be performed; and
D. No offi
cial or employee of City has a financial interest, within the provisions of sections 1090-1092 of the California Government Code, in the subject matter of this Agreement.

NO
W, THEREFORE, for and in consideration of the mutual covenants and conditions contained herein, the parties hereby agree as follows:

1.0. S

ERVICES PROVIDED BY CONSULTANT

1.1. S
cope of Services. Consultant shall provide the professional services described in City’s Request for Proposals No. 25-12, attached hereto as Exhibit “A,” and Consultant’s Proposal, attached hereto as Exhibit “B,” both incorporated herein.

1.2. P
rofessional Practices. All professional services to be provided by Consultant pursuant to this Agreement shall be provided by personnel experienced in their respective fields and in a manner consistent with the standards of care, diligence and skill ordinarily exercised by professional consultants in similar fields and circumstances in accordance with sound professional practices. Consultant also warrants that it is familiar with all laws that may affect its performance of this Agreement and shall advise City of any changes in any laws that may affect Consultant’s performance of this Agreement.

1.3. P
erformance to Satisfaction of City . Consultant agrees to perform all the work to the complete satisfaction of the City. Evaluations of the work will be done by the City Manager or his or her designee. If the quality of work is not satisfactory, City in its discretion has the right to:

ATTACHMENT 1
176
2 Onward Engineering
Rev. 04-2025
(a) Meet with Consultant to review the quality of the work and resolve the matters of concern;
(b) Requi
re Consultant to repeat the work at no additional fee until it is satisfactory; and/or
(c) Term
inate the Agreement as hereinafter set forth.

Further
, pursuant to the requirements of Article XXX, Consultant’s performance will be evaluated by the City. A copy of the evaluation will be sent to Consultant for comments. The evaluation together with the comments shall be retained as a part of the Agreement record.

1.4. War
ranty. Consultant warrants that it shall perform the services required by this Agreement in compliance with all applicable Federal and California employment laws , including, but not limited to, those laws related to harassment, workplace violence, discrimination, minimum hours and wages; occupational health and safety; fair employment and employment practices; workers’ compensation insurance and safety in employment; and all other Federal, State and local laws and ordinances applicable to the services required under this Agreement. Consultant shall indemnify and hold harmless City from and against all claims, demands, payments, suits, actions, proceedings, and judgments of every nature and description including attorneys’ fees and costs, presented, brought, or recovered against City for, or on account of any liability under any of the above-mentioned laws, which may be incurred by reason of Consultant’s performance under this Agreement.

1.5 . Non-Discrimination. In performing this Agreement, Consultant shall not engage in, nor permit its agents to engage in, discrimination in employment of persons because of their race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military or veteran status, e xcept as permitted pursuant to s ection 12940 of the Government Code. In addition, Consultant shall comply with the Non-Discrimination Clause and Statement of Compliance as delineated in Article XVI, attached as Exhibit “T” to this PSA.

Contr
actor assures that he/she/it will comply with Title VII of the Civil Rights Act of 1964 and that no person shall, on the grounds of race, creed, color, disability, sex, sexual orientation, national origin, age, religion, Vietnam era Veteran’s status, political affiliation, or any other non-merit factor, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under this Agreement.
(a) Contr
actor shall, in all solicitations or advertisements for applicants for employment placed as a result of this Agreement, state that it is an “Equal Opportunity Employer” or that all qualified applicants will receive consideration for employment without regard to their race, creed, color, disability, sex, sexual orientation, national origin, age, religion, Vietnam era Veteran’s status, political affiliation, or any other non-merit factor. (b) Contr
actor shall, if requested to so do by the City, certify that it has not, in the performance of this Agreement, discriminated against applicants or employees because of their race, creed, color, disability, sex, sexual orientation, national origin, age, religion, Vietnam era Veteran’s status, 177
3 Onward Engineering
Rev. 04-2025
political affiliation, or any other non-merit factor.
(c) If
requested to do so by the City, Contractor shall provide the City with access to copies of all of its records pertaining or relating to its employm ent pr
actices, except to the extent such records or portions of such records ar e c
onfidential or privileged under state or federal law.
(d) C
ontractor shall recruit vigorously and encourage minority - and women- owned businesses to bid its subcontracts.
(e) N
othing contained in this Agreement shall be construed in any manner so as to require or permit any act, which is prohibited by law. (f) The C
ontractor shall include the provisions set forth in subparagraphs (a) through (e) (above) in each of its subcontracts.
(g) The C
onsultant’s signature affixed herein and dated shall constitute a certification under penalty of perjury under the State of California that t he C
onsultant has, unless exempt, complied with the nondiscriminati on r
equirements of Government Code § 12990 and 2 CCR § 8103.

1.6. Non-Exclusive Agreement. Consultant acknowledges that City may enter into agreements with other consultants for services similar to the services that are subject to this Agreement or may have its own employees perform services similar to those services contemplated by this Agreement.

1. 7. Delegation and Assignment. This is a personal service contract, and the duties set forth herein shall not be delegated or assigned to any person or entity without the prior written consent of City. Consultant may engage a subcontractor(s) as permitted by law and may employ other personnel to perform services contemplated by this Agreement at Consultant’s sole cost and expense.

1.8 . Confidentiality. Employees of Consultant in the course of their duties may have access to financial, accounting, statistical, and personnel data of private individuals and employees of City. Consultant covenants that all data, documents, discussion, or other information developed or received by Consultant or provided for performance of this Agreement are deemed confidential and shall not be disclosed by Consultant without written authorization by City. City shall grant such authorization if disclosure is required by law. All City data shall be returned to City upon the termination of this Agreement. Consultant’s covenant under this Section shall survive the termination of this Agreement.

1.9 . Workplace Safety. In performing services under this Agreement, Contractor shall observe and comply with all applicable laws, ordinances, codes and regulations of governmental agencies, including federal, state, municipal, and local governing bodies, having jurisdiction over the scope of services, including all applicable provisions of the California Occupational Safety and Health Act. Contractor shall indemnify and hold City harmless from any and all liability, fines, penalties and consequences from any of Contractor’s failures to comply with such laws, ordinances, codes and regulations.
(a) A
ccidents: If a death, serious personal injury, or substantial property damage 178
4 Onward Engineering
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occurs in connection with Contractor’s performance of this Agreement, Contractor shall immediately notify the Costa Mesa City Risk Manager's Office by telephone. Contractor shall promptly submit to City a written report, in such form as may be required by City of all accidents which occur in connection with this Agreement. This report must include the following information: (1) name and address of the injured or deceased person(s); (2) name and address of Contractor's sub-Contractor, if any; (3) name and address of Contractor's liability insurance carrier; and (4) a detailed description of the accident and whether any of City's equipment, tools, material, or staff were involved.
(b) C
ontractor further agrees to take all reasonable steps to preserve all physical evidence and information which may be relevant to the circumstances surrounding a potential claim, while maintaining public safety, and to grant to the C
ity the opportunity to review and inspect such evidence, including the scene of the accident.

1.10 . State Prevailing Wage Rates.
(a) N
o Consultant or Subconsultant may be awarded an Agreement containing public work elements unless registered with the Department of Industrial Relations (DIR) pursuant to Labor Code § 1725.5. Registration with DIR must be maintained throughout the entire term of this Agreement, including any subsequent amendments.
(b) The C
onsultant shall comply with all of the applicable provisions of the California Labor Code requiring the payment of prevailing wages. The General Prevailing Wage Rate Determinations applicable to work under this Agreement are available and on file with the Department of
Tr
ansportation’s Regional/District Labor Compliance Officer. (c) G
eneral Prevailing Wage Rate Determinations applicable to this projec t m
ay also be obtained from the Department of Industrial Relations websi te at http://w
ww.dir.ca.gov.
(d) P
ayroll Records: 1) Each Consultant and Subconsultant shall keep accurate certified payroll records and supporting documents as mandated by Labor Code § 1776 and as defined in 8 CCR § 16000 showing the nam e,
addr
ess, social security number, work classification, straight tim e and ov
ertime hours worked each day and week, and the actual per diem wages paid to each worker or other employees by the Consultant or Subconsultant; 2) The payroll records enumerated under paragraph 1) above shall be certified as correct by the Consultant under penalty of perjury. Each Consultant shall submit a certified copy of the records to th e
enti
ty that requested the records within ten (10) calendar days after receipt of the written request.
(e) When pr
evailing wage rates apply, the Consultant is responsible for verifying compliance with certified payroll requirements. Invoice payment will not be made until the invoice is approved by the City’s Contrac t
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5 Onward Engineering
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Administrator.
(f) Penal
ty. The Consultant and any of its Subconsultants shall comply with Labor Code § 1774 and § 1775. Pursuant to § 1775, the Consultant and any Subconsultants shall forfeit to the City a penalty of not more than two hundred dollars ($200) for each calendar day, or portion thereof, for each worker paid less than the prevailing rates as determined by the Director of DIR for the work or craft in which the worker is employed for any public work done under the Agreement by Consultant or by its Subconsultants in violation of the requirements of the Labor Code and in particular, Labor Code §§ 1770 to 1780, inclusive.
(g) Pur
suant to Labor Code § 1775, the City shall notify the Consultant on a public works project within fifteen (15) calendar days of receipt of a complaint that a Subconsultant has failed to pay workers the general prevailing rate of per diem wages.

2.0. CO

MPENSATION AND BILLING

2.1. C
onsultant shall be paid in accordance with the fee schedule set forth in Exhibit “C,” (Consultant’s Cost Proposal) attached hereto and made a part of this Agreement. Consultant’s total compensation, based upon lump sum, shall not exceed Three Hundred Thirteen Thousand Eighty Dollars and Five Cents ($313,080.05).

2.2. A
dditional Services. Consultant shall not receive compensation for any services provided outside the scope of services specified in the Consultant’s Proposal unless the City Manager or designee, prior to Consultant performing the additional services, approves such additional services in writing. It is specifically understood that oral requests and/or approvals of such additional services or additional compensation shall be barred and are unenforceable.

2.3. M
ethod of Billing. Consultant may submit invoices to the City for approval on a progress basis, but no more often than two times a month. Said invoice shall be based on the total of all Consultant’s services which have been completed to City’s sole satisfaction. City shall pay Consultant’s invoice within forty-five (45) days from the date City receives said invoice. Each invoice shall describe in detail, the services performed, the date of performance, and the associated time for completion. Any additional services approved and performed pursuant to this Agreement shall be designated as “Additional Services” and shall identify the number of the authorized change order, where applicable, on all invoices.

2.4. Prompt Payment From Local City To Consultant. The City shall make all project progress payment within 30 days after receipt of an undisputed and properly submitted payment request from Consultant on a professional service contract. If the City fails to pay promptly, the City shall pay interest to the Consultant, which accrues at the rate of 10 percent per annum on the principal amount of a money judgment remaining unsatisfied and pro-rated as necessary.

Upon receipt of the payment request, the City shall act in accordance with both of the following:
(a) The City shall review each payment request as soon as feasible after receipt to verify it is a proper payment request.
(b) The City must return any payment request deemed improper by the 180
6 Onward Engineering
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City to the Consultant as soon as feasible, but not later than seven (7) days, after receipt. A request returned pursuant to this paragraph shall include documentation setting forth in writing the reasons why it is an improper payment request.

2.5. Prompt Payment Certification. For projects awarded on or after September 1, 2023: the Consultant must now submit Exhibit9-P (pursuant to Article XXXI) to the City administering the contract by the 15th of the month following the month of any payment(s). If the Consultant does not make any payments to subconsultants, supplier(s), and/or manufacturers they must report “no payments were made to subs this month” and write this visibly and legibly on Exhibit 9-P.

The City must verify all Exhibit 9- P information, monitor compliance with prompt payment requirements for DBE and non-DBE firms, and address any shortfalls to the DBE commitment and prompt payment issues until the end of the project. The City must email a copy of Exhibit 9- P to [email protected] before the end of the month after receiving the Exhibit 9-P from the City.

2.6. Prompt Payment of Withheld Funds to Subconsultants. The City may hold retainage from CONSULTANT and shall make prompt and regular incremental acceptances of portions, as determined by the City, or the contract work, and pay retainage to Consultant based on these acceptances. The City shall designate that no retainage will be held by the City from progress payments due to Consultant. Consultant and subconsultants are prohibited from holding retainage from subconsultants. Any delay or postponement of payment may take place only for good cause and with the City’s prior written approval. Any violation of these provisions shall subject the violating Consultant or subconsultant to the penalties, sanctions, and other remedies specified in Section 3321 of the California Civil Code. This requirement shall not be construed to limit or impair contractual, administrative or judicial remedies, otherwise available to Consultant or subconsultant in the event of a dispute involving late payment or nonpayment by Consultant, deficient subconsultant performance and/or noncompliance by a subconsultant. This clause applies to both DBE and non-DBE subconsultants.

2.7. Retention of Records, Audits and Audit Review Procedure. (a) For the purpose of determining compliance with Gov. Code § 8546.7, the Consultant, Subconsultants, and City shall maintain all books, documents, papers, accounting records, Independent CPA Audited Indirect Cost Rate workpapers, and other evidence pertaining to the performance of the Agreement including, but not limited to, the costs of administering the Agreement. All parties, including the Consultant’s Independent CPA, shall make such workpapers and materials available at their respective offices at all reasonable times during the Agreement period and for three (3) years from the date of final payment under the Agreement and records for real property and equipment acquired with federal funds must be retained for three (3) years after final disposition. City, Caltrans Auditor, FHWA, or any duly authorized representative of the Federal government having jurisdiction under Federal laws or regulations (including the basis of Federal funding in whole or in part) shall have access to any books, records, and documents of the Consultant, Subconsultants, and the Consultant’s Independent CPA, that are pertinent to the Agreement for 181
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audits, examinations, workpaper review, excerpts, and transactions, and copies thereof shall be furnished if requested without limitation.

(b) Any dispute concerning a question of fact arising under an interim or post audit of this Agreement that is not disposed of by Agreement, shall be reviewed by City’s Chief Financial Officer.

(c) Not later than thirty (30) calendar days after issuance of the final audit report, Consultant may request a review by City’s Chief Financial Officer of unresolved audit issues. The request for review will be submitted in writing.

(d) Neither the pendency of a dispute nor its consideration by City will excuse Consultant from full and timely performance, in accordance with the terms of this Agreement.

(e) Consultant and subconsultant Agreements, including cost proposals and Indirect Cost Rates (ICR), may be subject to audits or reviews such as, but not limited to, an Agreement audit, an incurred cost audit, an ICR Audit, or a CPA ICR audit work paper review. If selected for audit or review, the Agreement, cost proposal and ICR and related work papers, if applicable, will be reviewed to verify compliance with 48 CFR 31 and other related laws and regulations. In the instances of a CPA ICR audit work paper review it is Consultant’s responsibility to ensure federal, City , or local government officials are allowed full access to the CPA’s work papers including making copies as necessary. The Agreement, cost proposal, and ICR shall be adjusted by Consultant and approved by City Contract Administrator to conform to the audit or review recommendations. Consultant agrees that individual terms of costs identified in the audit report shall be incorporated into the Agreement by this reference if directed by City at its sole discretion.

Refusal by Consultant to incorporate audit or review recommendations, or to ensure that the federal, City or local governments have access to CPA work papers, will be considered a breach of Agreement terms and cause for termination of the Agreement and disallowance of prior reimbursed costs.

(f) Consultant’s Cost Proposal may be subject to a CPA ICR Audit Work Paper Review and/or audit by the Independent Office of Audits and Investigations (IOAI). IOAI, at its sole discretion, may review and/or audit and approve the CPA ICR documentation. The Cost Proposal shall be adjusted by the Consultant and approved by the City Contract Administrator to conform to the Work Paper Review recommendations included in the management letter or audit recommendations included in the audit report. Refusal by the Consultant to incorporate the Work Paper Review recommendations included in the management letter or audit recommendations included in the audit report will be considered a breach of the Agreement terms and cause for termination of the Agreement and disallowance of prior reimbursed costs.

(1) During IOAI’s review of the ICR audit work papers created by the Consultant’s independent CPA, IOAI will work with the CPA and/or 182
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Consultant toward a resolution of issues that arise during the review. Each party agrees to use its best efforts to resolve any audit disputes in a timely manner. If IOAI identifies significant issues during the review and is unable to issue a cognizant approval letter, City will reimburse the Consultant at an accepted ICR until a FAR (Federal Acquisition Regulation) compliant ICR (e.g. 48 CFR Part 31; GAGAS (Generally Accepted Auditing Standards); CAS (Cost Accounting Standards), if applicable; in accordance with procedures and guidelines of the American Association of State Highways and Transportation Officials (AASHTO) Audit Guide; and other applicable procedures and guidelines) is received and approved by IOAI.

Accepted rates will be as follows:
a. If the proposed rate is less than one hundred fifty percent (150%) - the accepted rate reimbursed will be
ninety percent (90%) of the proposed rate.
b. If the proposed rate is between one hundred fifty
percent (150%) and two hundred percent (200%) - the
accepted rate will be eighty-five percent (85%) of the
proposed rate.
c. If the proposed rate is greater than two hundred percent (200%) - the accepted rate will be seventy -five percent (75%) of the proposed rate.

(2) If IOAI is unable to issue a cognizant letter per paragraph E.1. above, IOAI may require Consultant to submit a revised
independent CPA-audited ICR and audit report within three (3) months of the effective date of the management letter. IOAI will then have up to six (6) months to review the Consultant’s and/or the independent CPA’s revisions.

(3) If the Consultant fails to comply with the provisions of this paragraph E, or if IOAI is still unable to issue a cognizant approval letter after the revised independent CPA audited ICR is submitted, overhead cost reimbursement will be limited to the accepted ICR that was established upon initial rejection of the ICR and set forth in paragraph E.1. above for all rendered services. In this event, this accepted ICR will become the actual and final ICR for
reimbursement purposes under this Agreement.

(4) Consultant may submit to City final invoice only when all of the following items have occurred: (1) IOAI accepts or adjusts the original or revised independent CPA audited ICR; (2) all work under this Agreement has been completed to the satisfaction of City; and, (3) IOAI has issued its final ICR review letter. The Consultant must submit its final invoice to City no later than sixty (60) calendar days after occurrence of the last of these items. The accepted ICR will 183
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apply to this Agreement and all other agreements executed between City and the Consultant, either as a prime or
subconsultant, with the same fiscal period ICR.

3.0. TIME OF PERFORMANCE

3.1. Commencement and Completion of Work. Unless otherwise agreed to in writing by the parties, the professional services to be performed pursuant to this Agreement shall commence within five (5) days from the Effective Date of this Agreement and completion of work shall be no later than November 18, 2027. Said services shall be performed in strict compliance with the Project Schedule approved by City as set forth on page 12 in Exhibit “B,” attached hereto and incorporated herein. The Project Schedule may be amended by mutual agreement of the parties. Failure to commence work in a timely manner and/or diligently pursue work to completion may be grounds for termination of this Agreement.

3.2. Excusable Delays . Neither party shall be responsible for delays or lack of performance resulting from acts beyond the reasonable control of the party or parties. Such acts shall include, but not be limited to, acts of God, fire, strikes, pandemics (excluding COVID-19), material shortages, compliance with laws or regulations, riots, acts of war, or any other conditions beyond the reasonable control of a party (each, a “Force Majeure Event”). If a party experiences a Force Majeure Event, the party shall, within five (5) days of the occurrence of the Force Majeure Event, give written notice to the other party stating the nature of the Force Majeure Event, its anticipated duration and any action being taken to avoid or minimize its effect. Any suspension of performance shall be of no greater scope and of no longer duration than is reasonably required and the party experiencing the Force Majeure Event shall use best efforts without being obligated to incur any material expenditure to remedy its inability to perform; provided, however, if the suspension of performance continues for sixty (60) days after the date of the occurrence and such failure to perform would constitute a material breach of this Agreement in the absence of such Force Majeure Event, the parties shall meet and discuss in good faith any amendments to this Agreement to permit the other party to exercise its rights under this Agreement. If the parties are not able to agree on such amendments within thirty (30) days and if suspension of performance continues, such other party may terminate this Agreement immediately by written notice to the party experiencing the Force Majeure Event, in which case neither party shall have any liability to the other except for those rights and liabilities that accrued prior to the date of termination.

4.0. TERM AND TERMINATION

4.1. Term. This Agreement shall commence on the Effective Date and continue for a period of thirty-six (36) months, ending on May 5, 2029, unless previously terminated as provided herein or as otherwise agreed to in writing by the parties. This Agreement may be extended by one (1) one (1) year period upon mutual written agreement of both parties.

4.2. This AGREEMENT may be terminated by City, provided that City gives not less than thirty (30) calendar days’ written notice (delivered by certified mail, return receipt requested) of intent to terminate. Upon termination, City shall be entitled to all work, including but not limited to, reports, investigations, appraisals, inventories, studies, analyses, drawings and data estimates performed to that date, whether completed or not.

4.3. City may temporarily suspend this Agreement, at no additional cost to City, provided that Consultant is given written notice (delivered by certified mail, return receipt 184
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requested) of temporary suspension. If City gives such notice of temporary suspension, Consultant shall immediately suspend its activities under this Agreement. A temporary suspension may be issued concurrent with the notice of termination.

4.4. Notwithstanding any provisions of this Agreement, Consultant shall not be relieved of liability to City for damages sustained by City by virtue of any breach of this Agreement by Consultant, and City may withhold any payments due to Consultant until such time as the exact amount of damages, if any, due City from Consultant is determined.

4.5. In the event of termination, Consultant shall be compensated as provided for in this Agreement. Upon termination, City shall be entitled to all work, including but not limited to, reports, investigations, appraisals, inventories, studies, analyses, drawings and data estimates performed to that date, whether completed or not.

5.0. INSURANCE

5 .1. Minimum Scope and Limits of Insurance. Consultant shall obtain, maintain, and keep in full force and effect during the life of this Agreement all of the following minimum scope of insurance coverages with an insurance company admitted to do business in California, rated “A,” Class X, or better in the most recent Best’s Key Insurance Rating Guide, and approved by City:

(a) Commercial general liability, including premises -operations, products/completed operations, broad form property damage, blanket contractual liability, independent contractors, personal injury or bodily injury with a policy limit of not less than One Million Dollars ($1,000,000.00) per occurrence, Two Million Dollars ($2,000,000.00) general aggregate.

(b) Business automobile liability for owned vehicles, hired, and non-owned vehicles, with a policy limit of not less than One Million Dollars ($1,000,000.00) combined single limit per accident for bodily injury and property damage.

(c) Workers’ compensation insurance as required by the State of California.

Consultant agrees to waive, and to obtain endorsements from its workers’ compensation insurer waiving subrogation rights under its workers’ compensation insurance policy against the City, its officers, agents, employees, and volunteers arising from work performed by Consultant for the City and to require each of its subcontractors, if any, to do likewise under their workers’ compensation insurance policies.

(d) Professional errors and omissions (“E&O”) liability insurance with policy limits of not less than One Million Dollars ($1,000,000.00), combined single limits, per occurrence and aggregate. Architects’ and engineers’ coverage shall be endorsed to include contractual liability. If the policy is written as a “claims made” policy, the retro date shall be prior to the start of the contract work.

Consultant shall obtain and maintain, said E&O liability insurance during the life of this Agreement and for three years after completion of the work hereunder.

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5.2. Endorsements. The commercial general liability insurance policy and business automobile liability policy shall contain or be endorsed to contain the following provisions:

(a) Additional insureds: “The City of Costa Mesa and its elected and appointed boards, officers, officials, agents, employees, and volunteers are additional insureds with respect to: liability arising out of activities performed by or on behalf of the Consultant pursuant to its contract with the City; products and completed operations of the Consultant; premises owned, occupied or used by the Consultant; automobiles owned, leased, hired, or borrowed by the Consultant.”

(b) Notice: “Said policy shall not terminate, be suspended, or voided, nor shall it be cancelled, nor the coverage or limits reduced, until thirty (30) days after written notice is given to City.”

(c) Other insurance: “The Consultant’s insurance coverage shall be primary insurance as respects the City of Costa Mesa, its officers, officials, agents, employees, and volunteers. Any other insurance maintained by the City of Costa Mesa shall be excess and not contributing with the ins urance provided by this policy.”

(d) Any failure to comply with the reporting provisions of the policies shall not affect coverage provided to the City of Costa Mesa, its officers, officials, agents, employees, and volunteers.

(e) The Consultant’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability.

5.3. Deductible or Self Insured Retention. If any of such policies provide for a deductible or self-insured retention to provide such coverage, the amount of such deductible or self-insured retention shall be approved in advance by City. No policy of insurance issued as to which the City is an additional insured shall contain a provision which requires that no insured except the named insured can satisfy any such deductible or self-insured retention.

5.4. Certificates of Insurance. Consultant shall provide to City certificates of insurance showing the insurance coverages and required endorsements described above, in a form and content approved by City, prior to performing any services under this Agreement.

5.5. Non-Limiting. Nothing in this Section shall be construed as limiting in any way, the indemnification provision contained in this Agreement, or the extent to which Consultant may be held responsible for payments of damages to persons or property.

5.6. Excess Coverage . To the extent that Contractor maintains any insurance coverage(s) in amounts or types which are not expressly called out in this Agreement, such additional coverage(s) shall be deemed to be required by this Agreement.

5.7. Federal Insurance Requirements. If required by Article XIX, Consultant shall maintain insurance in accordance with those requirements.

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6.0. GENERAL PROVISIONS

6.1. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to any matter referenced herein and supersedes any and all other prior writings and oral negotiations. This Agreement may be modified only in writing, and signed by the parties in interest at the time of such modification. The terms of this Agreement shall prevail over any inconsistent provision in any other contract document appurtenant hereto, including exhibits to this Agreement.

6.2. Representatives. The C ity Manager or his or her designee shall be the representative of City for purposes of this Agreement and may issue all consents, approvals, directives and agreements on behalf of the City, called for by this Agreement, except as otherwise expressly provided in this Agreement.

Consultant shall designate a representative for purposes of this Agreement who shall be authorized to issue all consents, approvals, directives and agreements on behalf of Consultant called for by this Agreement, except as otherwise expressly provided in this Agreement.

6.3. Project Managers. City shall designate a Project Manager to work directly with Consultant in the performance of this Agreement.

Consultant shall designate a Project Manager who shall represent it and be its agent in all consultations with City during the term of this Agreement. Consultant or its Project Manager shall attend and assist in all coordination meetings called by City.

6.4. Debarment and Suspension Certification: Applicable to all agreements funded in part or whole with federal funds and contracts over $25,000.

(a) By signing this agreement, Contractor/Grantee agrees to comply with applicable federal suspension and debarment regulations as stated in Exhibit “U,” Debarment and Suspension Certification and Exhibit “AD,” Exhibit 10- O2 Consultant Contract DBE Commitment, including but not limited to 7 Code of Federal Regulations (CFR) 3016.35, 28 CFR 66.35, 29 CFR 97.35, 34 CFR 80.35, 45 CFR 92.35 and Executive Order 12549..

(b) By signing this agreement, Contractor certifies to the best of its knowledge and belief, that it and its principals:

(1) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntary excluded by any federal department or agency;

(2) Shall not knowingly enter into any covered transaction with a person who is proposed for debarment under federal regulations, debarred, suspended, declared ineligible, or voluntarily excluded from participation in such transaction.

(c) Any exceptions to this certification must be disclosed to City. Exceptions will not necessarily result in denial of recommendation for award but will be 187
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considered in determining responsibility. Disclosures must indicate party to whom the exceptions apply, the initiating agency, and the dates of agency action.

(d) Exceptions to the Federal Government excluded parties (https://sam.gov/content/home) maintained by the U.S. General Services Administration are to be determined by FHWA.

6.5. Additional Contract Provisions – Federal. Contractor shall comply with all of the terms and conditions of Exhibit “E,” Article XXXII Title VI Assurances, Appendix A, which is attached hereto and incorporated herein by this reference as though set forth in full. Contractor shall execute and be bound by the provisions of Exhibit “F,” Article XXXII Title VI Assurances,

Appendix B, Clauses for Deeds Transferring United States Property ; Exhibit “G,” Article XXXII Title VI Assurances, Appendix C, Clauses for Transfer of Real Property Acquired or Improved Under the Activity, Facility, or Program; Exhibit “H,” Article XXXII Title VI Assurances, Appendix D, Clauses for Construction/Use/Access to Real Property Acquired Under the Activity, Facility, or Program; Exhibit “I,” Article XXXII Title VI Assurances, Appendix E; Exhibit “J,” Article III, Statement of Work; Exhibit “K,”Article IV, Performance Period; Exhibit “L,”Article V, Allowable Costs and Payments; Exhibit “M,” Article VII, Cost Principle and Administrative Requirements; Exhibit “N,”Article X, Subcontracting; Exhibit “O,”Article XI, Equiptment Purchase and Other Capital Expenditures; Exhibit “P,” Article XII, State Prevailing Wage Rates; Exhibit “Q,” Article XIII, Conflict of Interest; Exhibit “R,” Article XIV, Rebates, Kickbacks or Other Unlawful Consideration; Exhibit “S,”Article XV, Prohibition of Expending City, State, or Federal Funds for Lobbying; Exhibit “T,”
Article XVI, Non-Discrimination Clause And Statement Of Compliance; Exhibit “U,” Article XVII, Debarment and Suspension Certification; Exhibit “V,” Article XVIII, Disadvantaged Business Enterprises (DBE) Participation; Exhibit “W,” Article XX, Funding Requirements; Exhibit “X,” Article XXI, Change In Terms; Exhibit “Y,” Article XXIII, Disputes; Exhibit “Z,” Article XXIV, Inspection of Work; Exhibit “AA,” Article XXV, Safety; Exhibit “AB,” Article XXXI, Prompt Payment; and Exhibit “AC,” Article XXXIV, Contract.

6.6. Notices. Any notices, documents, correspondence or other communications regarding interpretation of the terms of this Agreement, changes thereto, or the work hereunder may be provided by personal delivery or mail and shall be addressed as set forth below. Such communication shall be deemed served or delivered: ( a) at the time of delivery if such communication is sent by personal delivery, and (b) 48 hours after deposit in the U.S. Mail as reflected by the official U.S. postmark if such communication is sent through regular United States mail.

IF TO CONSULTANT: IF TO CITY:

Onward Engineering
300 S. Harbor Blvd., Suite 814
Suite 700
Anaheim, CA 92805
City of Costa Mesa
77 Fair Drive
Costa Mesa, CA 92626

Tel: (714) 533-3050 Tel: (714) 754-5275
Attn: Muhammad Ataya, M.A. Attn: Brett Atencio Thomas

Courtesy copy to:
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City of Costa Mesa
77 Fair Drive
Costa Mesa, CA 92626
Attn: Finance Dept. | Purchasing

6.7. Drug-Free Workplace Policy . Consultant shall provide a drug-free workplace by complying with all provisions set forth in City’s Council Policy 100-5, attached hereto as Exhibit “D” and incorporated herein. Consultant’s failure to conform to the requirements set forth in Council Policy 100-5 shall constitute a material breach of this Agreement and shall be cause for immediate termination of this Agreement by City.

6.8. Attorneys’ Fees. In the event that litigation is brought by any party in connection with this Agreement, the prevailing party shall be entitled to recover from the opposing party all costs and expenses, including reasonable attorneys’ fees, incurred by the prevailing party in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions, or provisions hereof.

6.9. Governing Law. This Agreement shall be governed by and construed under the laws of the State of California without giving effect to that body of laws pertaining to conflict of laws. In the event of any legal action to enforce or interpret this Agreement, the parties hereto agree that the sole and exclusive venue shall be a court of competent jurisdiction located in Los Angeles County, California.

6.10. Assignment. Consultant shall not voluntarily or by operation of law assign, transfer, sublet or encumber all or any part of Consultant’ s interest in this Agreement without City’s prior written consent. Any attempted assignment, transfer, subletting or encumbrance shall be void and shall constitute a breach of this Agreement and cause for termination of this Agreement. Regardless of City ’s consent, no subletting or assignment shall release Consultant of Consultant’s obligation to perform all other obligations to be performed by Consultant hereunder for the term of this Agreement.

6.11. Indemnification and Hold Harmless. Consultant agrees to defend, indemnify, hold free and harmless the City, its elected officials, officers, agents and employees, at Consultant’s sole expense, from and against any and all claims, actions, suits or other legal proceedings brought against the City, its elected officials, officers, agents and employees arising out of the negligence, recklessness, or willful misconduct of the Consultant, its employees, and/or authorized subcontractors, in the performance of the work undertaken pursuant to this Agreement. The defense obligation provided for hereunder shall apply without any advance showing of negligence or wrongdoing by the Consultant, its employees, and/or authorized subcontractors, but shall be required whenever any claim, action, complaint, or suit asserts as its basis the negligence, errors, omissions or misconduct of the Consultant, its employees, and/or authorized subcontractors, and/or whenever any claim, action, complaint or suit asserts liability against the City, its elected officials, officers, agents and employees based upon negligence, recklessness, or willful misconduct in the work performed by the Consultant, its employees, and/or authorized subcontractors under this Agreement, whether or not the Consultant, its employees, and/or authorized subcontractors are specifically named or otherwise asserted to be liable.

Notwithstanding the foregoing, the Consultant shall not be liable for the defense or indemnification of the City for claims, actions, complaints or suits arising out of the sole active negligence or willful 189
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misconduct of the City. In no event shall the cost to defend charged to Consultant exceed Consultant’s proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, Consultant shall meet and confer with other parties regarding unpaid defense costs. This provision shall supersede and replace all other indemnity provisions contained either in the City’s specifications or Consultant’s Proposal, which shall be of no force and effect.

In addition, Consultant must also comply with Article XXVII Claims Filed by City’s Construction Contractor as follows:
(a) If c
laims are filed by City’s construction contractor relating to work performed by Consultant’s personnel, and additional information or assistance from Consultant’s personnel is required in order to evaluate or defend against such claims; Consultant agrees to make its personnel available for consultation with City’s construction contract administration and legal staff and for testimony, if necessary, at depositions and at trial or arbitration proceedings.
(b) C
onsultant’s personnel that City considers essential to assist in defending against construction contractor claims will be made available on r
easonable notice from City.Consultation or testimony will be reimbursed at the same rates, including travel costs that are being paid for Consultant’s personnel services under this Agreement.
(c) S
ervices of Consultant ’s personnel in connection with City’s c
onstruction contractor claims will be performed pursuant to a written contract amendment, if necessary, extending the termination date of this Agreement in order to resolve the construction claims.

6. 12. PERS Eligibility Indemnification. In the event that Consultant or any employee, agent, or subcontractor of Consultant providing services under this Agreement 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 as an employee of the City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City.

N
otwithstanding any other agency, state or federal policy, rule, regulation, law or ordinance to the contrary, Consultant and any of its employees, agents, and subcontractors providing service under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any claims to, any compensation, benefit, or any incident of employment by City, including but not limited to eligibility to enroll in PERS as an employee of City and entitlement to any contribution to be paid by City for employer contribution and/or employee contributions for PERS benefits.

6.1 3. Cooperation. In the event any claim or action is brought against City relating to Consultant’s performance or services rendered under this Agreement, Consultant shall render any reasonable assistance and cooperation which City might require. 190
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6.14. Ownership/Confidentiality of Data/Documents.

(a) It is mutually agreed that all materials prepared by Consultant under this Agreement shall become the property of City, and Consultant shall have no property right therein whatsoever. Immediately upon termination, City shall be entitled to, and Consultant shall deliver to City, reports, investigations, appraisals, inventories, studies, analyses, drawings and data estimates performed to that date, whether completed or not, and other such materials as may have been prepared or accumulated to date by Consultant in performing this Agreement which is not Consultant’s privileged information, as defined by law, or Consultant’s personnel information, along with all other property belonging exclusively to City which is in Consultant’s possession. Publication of the information derived from work performed or data obtained in connection with services rendered under this Agreement must be approved in writing by City.

(b) Additionally, it is agreed that the Parties intend this to be an Agreement for services and each considers the products and results of the services to be rendered by Consultant hereunder to be work made for hire. Consultant acknowledges and agrees that the work (and all rights therein, including, without limitation, copyright) belongs to and shall be the sole and exclusive property of City without restriction or limitation upon its use or dissemination by City. (c) Nothing herein shall constitute or be construed to be any representation by Consultant that the work product is suitable in any way for any other project except the one detailed in this Contract. Any reuse by City for another project or project location shall be at City’s sole risk.

(d) Applicable patent rights provisions regarding rights to inventions shall be included in the contracts as appropriate (48 CFR 27 Subpart 27.3 - Patent Rights under Government Contracts for federal-aid contracts). (e) City may permit copyrighting reports or other agreement products. If copyrights are permitted; the Agreement shall provide that the FHWA shall have the royalty-free nonexclusive and irrevocable right to reproduce, publish, or otherwise use; and to authorize others to use, the work for government purposes.

(f) All financial, statistical, personal, technical, or other data and information relative to City’s operations, which are designated confidential by City and made available to Consultant in order to carry out this Agreement, shall be protected by Consultant from unauthorized use and disclosure.

(g) Permission to disclose information on one occasion, or public hearing held by City relating to the Agreement, shall not authorize 191
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Consultant to further disclose such information, or disseminate the same on any other occasion.

(h) Consultant shall not comment publicly to the press or any other media regarding the Agreement or City’s actions on the same, except to City’s staff, Consultant’s own personnel involved in the performance of this Agreement, at public hearings, or in response to questions from a Legislative committee.
(i) Consultant shall not issue any news release or public relations item of any nature, whatsoever, regarding work performed or to be performed under this Agreement without prior review of the contents thereof by City, and receipt of City’s written permission.

(j) Any subcontract entered into as a result of this contract shall contain all of the provisions of this Article.

6.15. Public Records Act Disclosure. Consultant has been advised and is aware that this Agreement and all reports, documents, information and data, including, but not limited to, computer tapes, discs or files furnished or prepared by Consultant, or any of its subcontractors, pursuant to this Agreement and provided to City may be subject to public disclosure as required by the California Public Records Act (California Government Code s ection 7920.000, et seq.).

Exceptions to public disclosure may be those documents or information that qualify as trade secrets, as that term is defined in the California Government Code section 7924.510, and of which Consultant informs City of such trade secret. The City will endeavor to maintain as confidential all information obtained by it that is designated as a trade secret. The City shall not, in any way, be liable or responsible for the disclosure of any trade secret including, without limitation, those records so marked if disclosure is deemed to be required by law or by order of the Court.

6.16. Conflict of Interest. Consultant and its officers, employees, associates and subconsultants, if any, will comply with all conflict of interest statutes of the State of California applicable to Consultant's services under this agreement, including, but not limited to, the Political Reform Act (Government Code sections 81000, et seq.) and Government Code s ection 1090.

During the term of this Agreement, Consultant and its officers, employees, associates and subconsultants shall not, without the prior written approval of the City Representative, perform work for another person or entity for whom Consultant is not currently performing work that would require Consultant or one of its officers, employees, associates or subconsultants to abstain from a decision under this Agreement pursuant to a conflict of interest statute. In addition, Consultant must comply with the federal Conflict of Interest p rovisions delineated in Article XIII, attached hereto as Exhibit “Q”.
.

6.17. Rebates, Kickbacks or Other Unlawful Consideration. The Consultant warrants this this Agreement was not obtained or secured through rebates, kickbacks or other unlawful consideration, i.e., a commission, percentage, brokerage, or contingent fee, excepting bona fide employees, or bona fide established commercial or selling agencies maintained by Consultant for the purpose of securing business . For breach or violation of this warranty, City shall have the right, in its discretion, to terminate this Agreement without liability, to pay only for the value of the work actually performed, or to deduct from this Agreement prices or otherwise recover the full amount of such rebate, kickback or other unlawful consideration. 192
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6.18. Prohibition of Expending City, State, or Federal Funds for Lobbying.

(a) The Consultant certifies, to the best of his or her knowledge and belief, that 1) No State, Federal, or City appropriated funds have been paid or will be paid, by or on behalf of the Consultant, to any person for influencing or attempting to influence an officer or employee of any local, State, or Federal agency, a Member of the State Legislature or United States Congress, an officer or employee of the Legislature or Congress, or any employee of a Member of the Legislature or Congress, in connection with the awarding or making of this Agreement, or with the extension, continuation, renewal, amendment, or modification of this Agreement.

(b) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a member of Congress in connection with this Agreement, the Consultant shall complete and submit Standard Form -LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions.

(c) This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite form making or entering into this transaction imposed by 31 U.S.C. § 1352. Any person who fails to file the required certification shall be subject to a civil penalty of not less than ten thousand dollars ($10,000) and not more than one hundred thousand dollars ($100,000) for each such failure.

(d) The Consultant also agrees by signing this document that he or she shall require that the language of this certification be included in all lower tier subagreements, which exceed one hundred thousand dollars ($100,000), and that all such subrecipients shall certify and disclose accordingly.

6 .19. Responsibility for Errors. Consultant shall be responsible for its work and results under this Agreement. Consultant, when requested, shall furnish clarification and/or explanation as may be required by the City’s representative, regarding any services rendered under this Agreement at no additional cost to City. In the event that an error or omission attributable to Consultant occurs, then Consultant shall, at no cost to City, provide all necessary design drawings, estimates and other Consultant professional services necessary to rectify and correct the matter to the sole satisfaction of City and to participate in any meeting required with regard to the correction.

6.20. Prohibited Employment. Consultant will not employ any regular employee of City while this Agreement is in effect.

6.21. National Labor Relations Board Certification . In accordance with Public Contract Code Section 10296, Consultant hereby states under penalty of perjury that no more than one unappealable finding of contempt of court by a federal court has been issued against Consultant within the immediately preceding two-year period, because of Consultant’s failure to comply with an order of a federal court that orders Consultant to comply with an order of the National Labor 193
19 Onward Engineering
Rev. 04-2025

Relations Board.

6.22. Order of Precedence. In the event of an inconsistency in this Agreement and any of the attached Exhibits, the terms set forth in this Agreement shall prevail . If, and to the extent this Agreement incorporates by reference any provision of any document, such provision shall be deemed a part of this Agreement. Nevertheless, if there is any conflict among the terms and conditions of this Agreement and those of any such provision or provisions so incorporated by reference, this Agreement shall govern over the document referenced.

6.23. Costs. Each party shall bear its own costs and fees incurred in the preparation and negotiation of this Agreement and in the performance of its obligations hereunder except as expressly provided herein.

6.24. Binding Effect. This Agreement binds and benefits the parties and their respective permitted successors and assigns.

6.25. No Third Party Beneficiary Rights . This Agreement is entered into for the sole benefit of City and Consultant 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.

6.26. 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.

6.27. Construction. The parties have participated jointly in the negotiation and drafting of this Agreement and have had an adequate opportunity to review each and every provision of the Agreement and submit the same to counsel or other consultants for review and comment. 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.

6.28. Amendments. Only a writing executed by the parties hereto or their respective successors and assigns may amend this Agreement.

6.29. 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.

6.30. 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 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, which 194
20 Onward Engineering
Rev. 04-2025
determination made by the presiding court or arbitrator of competent jurisdiction shall be binding, then both parties agree to substitute such provision(s) through good faith negotiations.

6. 31. Counterparts. 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.

6. 32. 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.
[S
ignatures appear on following page.]
195
21 Onward Engineering
Rev. 04-2025
I N WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed by and through their respective authorized officers, as of the date first above written.

CO

NSULTANT
__________________________________
Date: __________________________
Signature
__________________________________

Muhammad Ataya, MPA, Operations Manager
C

ITY OF COSTA MESA
_________________________________
_ Date: __________________________
Lori Ann Farrell Harrison
City Manager
AT
TEST:
__________________________________

Brenda Green
City Clerk
APPR
OVED AS TO FORM:
__________________________________
Date: __________________________
Kimberly Hall Barlow
City Attorney
APPR
OVED AS TO INSURANCE:
__________________________________
Date: __________________________
Ruth Wang
Risk Management
196
22 Onward Engineering
Rev. 04-2025
APPROVED AS TO CONTENT:
__________________________________
Date: __________________________
Brett Atencio Thomas
Project Manager
DE
PARTMENTAL APPROVAL:
__________________________________
Date: __________________________
Raja Sethuraman
Public Works Director
APPR
OVED AS TO PURCHASING:
__________________________________
Date: __________________________
Carol Molina
Finance Director
197

CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 25-281 Meeting Date: 5/6/2025
TITLE:

PROPOSED BUSINESS IMPROVEMENT AREA (BIA) REAUTHORIZATION AND INTENTION TO LEVY AN

ANNUAL ASSESSMENT
DEPARTMENT: CITY MANAGER’S OFFICE
PRESENTED BY: ALMA REYES, DEPUTY CITY MANAGER
CONTACT INFORMATION: HADASSA JAKHER, ASSISTANT TO THE CITY MANAGER, (714) 754- 4885
RECOMMENDATION:

Staff recommends the City Council:

1. Approve the 2024-2025 Annual Report for the Business Improvement Area (BIA) (Attachment 1).

2. Receive and file the audited financial report for Fiscal Years Ended June 30, 2024 and June 30, 2023 (Attachment 2).

3. Adopt the Resolution declaring the City’s intention to levy an annual assessment for Fiscal Year 2024-25 for the Business Improvement Area covering certain Costa Mesa hotels and motels and setting the time and place for a Public Hearing on the proposed annual assessment (Attachment 3).

BACKGROUND:

The Parking and Business Improvement Area Law of 1989 (Streets and Highways Code §§ 36500, et seq.) enables cities to impose an assessment fee on businesses within an area designated by the City.

On July 5, 1995, the City Council adopted Ordinance No. 95-9 to establish a Business Improvement Area (BIA) for the purpose of assisting the hotel and motel industry in its promotion of tourism within the City. The City Council authorized the City Manager to enter into an agreement with the Costa Mesa Tourism and Promotion Council to develop and administer the BIA. In 2001, the Costa Mesa Conference & Visitor Bureau (CVB), now known as Travel Costa Mesa (TCM), became the administrator of the BIA. In accordance with Travel Costa Mesa bylaws, Travel Costa Mesa’sBoard of Directors is currently comprised of eleven (11) General Managers from the eleven (11) participating hotels and motels, one member of the City Council, and the City Manager’s designee.

Since November 2010, the City levies a three percent (3%) special assessment on the eleven (11)

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File #: 25-281 Meeting Date: 5/6/2025
Since November 2010, the City levies a three percent (3%) special assessment on the eleven (11) participating hotels in the BIA based on the sale of overnight guestroom stays in the partner hotels (2,375 total available rooms). The levy is transmitted by the hotels to the City and ninety-nine percent (99%) of the assessment is remitted to TCM. The remaining one percent is retained by the City to offset administrative costs.

ANALYSIS:

Currently, the number of properties included in the BIA assessment levy is limited to the eleven (11) hotels and motels that have expressed an interest in participating in the program, as detailed in the proposed Resolution of Intention (Attachment 3). Upon adoption of the Resolution of Intention, property owners of the participating hotels will be notified in writing within seven (7) days of the assessment renewal. Subsequently, the Resolution will be published in the Daily Pilot at least seven (7) days prior to the public hearing scheduled for June 3, 2025, at 7 p.m. City staff will also notify all the hotels and motels in the City not currently included in the BIA to allow them the opportunity to participate in the BIA.

Property owners will be provided an opportunity to voice their opinions on the annual assessment, and/or address any concerns regarding the BIA at the public hearing. The City Council will vote to adopt or deny the resolution levying an annual assessment for the upcoming fiscal year and make the ultimate decision as to the size of and the properties to be included in the BIA. Upon the approval of the annual assessment, the three percent (3%) assessment is collected along with the City’s Transient Occupancy Tax (TOT). The hotels and motels included in the BIA are required to itemize the BIA levy as a separate assessment. The staff at Travel Costa Mesa manage the day-to-day activities and provide all services to administer the BIA.

Per the agreement between the City of Costa Mesa and Travel Costa Mesa and as required by Streets and Highways Code section 36533, Travel Costa Mesa is required to provide an annual report describing the programs and activities implemented during the previous fiscal year as well as the status of the programs and activities implemented during the current fiscal year (Attachment 1).

The City Council may approve the report as filed or modify the report and approve it as modified.

Once the City Council approves the report, it may adopt the resolution of intention to levy the annual assessment.

Further, in accordance with the agreement between the City and Travel Costa Mesa, the annual audit for Fiscal Years Ended June 30, 2023 and June 30, 2024 has been completed by Crowe LLP, an independent auditor, and paid for by assessment funds. The audit is intended to ensure that the assessment revenue is expended for public purposes as specified within the resolution and that no expenditures are made in a manner contrary to the agreement. The City Council is requested to receive and file the independent audit (Attachment 2).

Highlights of the 2024-25 Fiscal Year
Travel Costa Mesa continues its dedication to showcasing the City of Costa Mesa as the City of the Arts and further enhancing the City’sbrand as a premier destination in Orange County. Seasonal messaging included campaigns such as “We’veGot Good Taste,”and “’CationTime,”and “Eatcation” campaigns. This translated into increased visitation, with travelers staying longer in Costa Mesa and shopping, dining, and recreating for a longer period within the City. Travel Costa Mesa generated 195 articles with 54 stories, providing robust media coverage with 95% positive sentiments. Travel Costa

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File #: 25-281 Meeting Date: 5/6/2025
articles with 54 stories, providing robust media coverage with 95% positive sentiments. Travel Costa Mesa’s social media and website also saw increases - Instagram follower counts were up 34%, TikTok 67%, and LinkedIn 21%. Total engagement statistics increased by 5,000% across all platforms. Total website users increased by 41% from the prior year. Similarly, hotel partners saw successes in the 2024-25 Fiscal Year. Transient occupancy increased by 1.7%, and room revenue growth rose slightly to 0.3%.

ALTERNATIVES:

City Council may choose to deny the resolution of intention, which will prevent the public hearing from taking place to consider levying an annual assessment for the upcoming fiscal year.

FISCAL REVIEW:

According to the audit report, Travel Costa Mesa’s cash equity as of June 30, 2024 totaled $3,131,781. Based on the 2024-25 annual report, Travel Costa Mesa is forecasting $3.2 million in revenues for the current fiscal year. As of February 2025, BIA funds have recorded $2.2 million in revenues.

The City receives one percent (1%) of the BIA revenue/assessment as partial reimbursement for its collection and administrative costs. The one percent (1%) allocated to the City for reimbursement is estimated at $30,000 for the 2024-25 fiscal year. The primary expenses in the 2024-25 fiscal year were:
· 58% on Marketing Expenses
· 26% on Employee Expenses
· 9% on Administrative Expenses
· 7% on Sales-Related Expenses
Since 2014, Travel Costa Mesa has also provided “CommunityEvents Programming”funding to the City, based under a Professional Services Agreement (PSA). This $164,000 fund supports community-wide marketing and community events that attract visitors to Costa Mesa. Due to the COVID-19 pandemic restrictions on large gatherings, the “Community Events Programming” funds were not available to the City during Fiscal Years 2020-21, 2021-22, and 2022-23. However, Travel Costa Mesa reinstated the funding in Fiscal Year 2023-24.

At the April 8th Annual Board Meeting, the Travel Costa Mesa Board of Directors voted to discontinue this funding for the City, beginning on July 1, 2025 for Fiscal Year 2025-26. A letter notifying the City of this change is attached (Attachment 4). The one percent revenue/assessment is still in effect.

The discontinued funds had previously supported various community events, the following which will now be absorbed fully by the General Fund:

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File #: 25-281 Meeting Date: 5/6/2025
Previously fully funded by the “Community Events Programing” Fund:
· Snoopy House
· ICSC Trade Show
Previously partially funded by the “Community Events Programing” Fund:
· ArtVenture
· Concerts in the Park
· Various City promotional materials
LEGAL REVIEW:

The City Attorney’s Office has reviewed the report and resolution and approves it as to form.

CITY COUNCIL GOALS AND PRIORITIES:

This item supports the City Council’scontinuous efforts to promote the City of Costa Mesa for its rich and vibrant community that offers many attractions for residents, visitors, and businesses.

CONCLUSION:

Adoption of the resolution of intent is the initial step in the reauthorization of the BIA assessment.

State law mandates the specific procedure to be followed in the establishment of such an area. Staff will make a presentation to the City Council on the implementation of the BIA assessment at the public hearing on June 3, 2025; however, the City Council must approve the annual report and the proposed resolution of intention before the hearing can be scheduled to consider the levying of an annual assessment.

Therefore, staff recommends the City Council:

1. Approve the 2024-25 Annual Report for the Business Improvement Area (BIA) (Attachment 1).

2. Receive and file audited financial report for Fiscal Years Ended June 30, 2024 and June 30, 2023 (Attachment 2).

3. Adopt Resolution 2025-xx, declaring the City’s intention to levy an annual assessment for Fiscal Year 2024-25 for Business Improvement Area covering certain Costa Mesa hotels and motels and setting the time and place for a public hearing on the proposal (Attachment 3).

201
2024-2025 ANNUAL REPORT
TRAVEL
COSTA
MESA
Attachment 1
202
203
// TRAVEL COSTA MESA //

TABLE OF

CONTENTS
4 President’s Message
6 Funding S
ource
8 Lodging &
TCM Hotel Partners
10 U.S.

Travel Association
12 Visit California
14 Tourism E
conomics
16 Mark
eting
20 R
esearch
21 Public R
elations
24 Social M
edia
28 Gr
oup Sales
31 Tr
avel Costa Mesa Leadership
204
Tourism wields a remarkable influence, breathing life into a city’s economy and sparking transformative change. It brings job opportunities in different areas, like hospitality and retail, while helping local businesses thrive by boosting the demand for their products and services.

Tourism Economics was hired to evaluate our industry’s
progress this fiscal year. In 2023, tourism contributed a total economic impact of $1.1 billion to the city of Costa Mesa.

Visitors spent an impressive $883 million, marking a 10% increase over 2019. The results are remarkable as Travel Costa Mesa (TCM) continues to enhance brand awareness and reach among guests visiting the City of the Arts®.

Transient room night stays increased for both the weekday and weekend segments for calendar year 2024 for Costa Mesa.

Both the transient and group segments have exceeded the results from 2019. The overall revenue per available room saw a modest uptick compared to 2023.

Business travel within the United States grew more than 5% in 2024 compared to the year prior, according to Tourism

Ec
onomics. Corporate travel is gaining momentum as trade- shows, in-person meetings, and employee connections are expected to increase travel spending this year. Occupancy in the United States remained flat year over year, and average daily rate increased 1.7%.

Visitor spending reached a record high for California,

totaling $156 billion.

The state of California’s results for overall
hotel occupancy for 2024 are relatedly flat year-over-year, with the average daily rate slightly decreasing year-over-year by 0.9%. Group room nights increased approximately 1%
compared to the prior year.

Navigating tools that monitor, analyze, and provide targeted insights for destination strategy, marketing, and sales have allowed TCM to measure results from marketing and sales efforts efficiently. A survey conducted this fiscal year for TCM aimed to understand current audience segments and
potential new ones, including travel motivations, behaviors, and preferences, to refine future market strategies.

Key campaigns throughout the year included “We’ve Got
Good Taste,” which highlights summer activities supported by a new video and photoshoot for display ads, connected TV and social outreach. The fall and winter “ ‘Cation” campaign targeted shopping, good vibes, and savory Eatcation® themes from September through December. Notable performance
measures of the campaigns include growth in overnight

stay
s as well as a longer length of stay compared to the
pre
vious year.

Video content remains a top priority as social media videos continues to dominate. Ninety percent of consumers,

regar
dless of age, use social media more than television to
follow trends and cultural moments. The continued supremacy of social media videos emphasizes the importance of making video content a central focus.

4 PRESIDENT’S MESSAGE
// 2024-2025 ANNUAL REPORT //
205
A combined spring and summer ad campaign will launch in the second half of this fiscal year and continue through the first quarter of the new fiscal year. “Endless Sensations to Immerse Yourself In” will capture the sights, smells, and tastes when visiting the City of the Arts®.

In June, TCM will participate again in IPW, the premier international marketplace for the U.S. Travel Association, which will be held in Chicago. Participants engage in focused, in-person meetings organized through a structured appointment system, fostering meaningful connections and promoting collaborative opportunities within the industry.

Targeted group experiences are crucial; impactful content and venue selection are key for hotels to set the desired vibe and grow interest in attendance. TCM will harness both

established and new
relationships with meeting professionals to highlight our city’s unique offerings and vibrant amenities, showcasing it in a way that stands out against compe
ting cities. By emphasizing our stunning venues, rich culture, and exceptional

hospitality
, we aim to present our city as the premier destination for events and gatherings.

Attendance at tradeshows and events will be a cornerstone of establishing these planner relationships.

As we look ahead, the strategic initiatives of TCM and the ongoing growth of tourism will play a crucial role in shaping the future of our city. By prioritizing effective marketing strategies and

enhancing visitor
experiences, we
aim to attract more visitors and
enhance C
osta Mesa’s reputation
as a top destination. With the
con
tinued support of our local
businesses and community

partners,
we are dedicated to
highlighting the City of the Arts®
unique charm and fostering

sustainable gr
owth. Together, we
can further enhance the positive
impact of tourism, ensuring that
Costa Mesa remains a favored
choice for visitors.

Paulette Lombardi-Fries

PRESIDENT, TRAVEL COSTA MESA
IN 1995, TRAVEL COSTA MESA WAS THE

SECOND TOURISM ORGANIZATION

FORMED AS A NONPROFIT CORPORATION

TO MARKET THE CITY OF COSTA MESA AS A

DESIRABLE, LEISURE OVERNIGHT
DESTINATION IN ORANGE COUNTY.

MISSION

STATEMENT
Travel Costa Mesa enhances
and promotes the destination
brand experience, further
increasing visitor spending
for industry and community
economic viability,
sustainability, and
quality of life.

VISION

STATEMENT
TCM is the engaged
destination marketing leader,
supporting and selling the
city’s distinct visitor brand
experiences and advocating
community tourism benefits.

KEY

OBJECTIVE
Increase brand awareness for
the city of Costa Mesa as a
desirable, overnight, leisure
Orange County
destination.

SALES

OBJECTIVE
Increase brand awareness
and new group room nights
for the city of Costa Mesa
– to make it the preferred
Orange County destination
ideal for small to midsize
business that increases
the economic benefits
throughout the city.
// TRAVEL COSTA MESA // 5
206

FUNDING SOURCE
Business Improvement
Assessment (BIA)
Travel Costa Mesa is fully funded
through the Business Improvement
Assessment (BIA), which is collected
by the 11 Costa Mesa partner hotels
listed in this annual report. Each hotel
collects a 3% levy from overnight guests
(2,375 total available rooms). All of the
Transient Occupancy Tax (TOT) collected
by the City of Costa Mesa is directed to
its general fund.

Business owners within the BIA program
must submit their assessments to the
Costa Mesa City Finance Department
monthly. New hotels and motels
interested in participating in the BIA
should contact both the City of Costa
Mesa and TCM. This is a voluntary

progr
am for hotel partners.

Fiscal Year 2024-2025
Forecast
For the current fiscal year, TCM is
forecasting BIA revenue to reach $3.2M.

As of February 2025, BIA funds have
accumulated to $2.2M. TCM’s

conserv
ative budgeting reflects the
leisure market trend stabilizing as well
as two hotel partners’ plans to renovate
have been postponed.

Allocation of Overages in BIA
Any overage in the BIA that TCM
receives is directed into TCM’s board-
approved reserve policy, which will
maintain at least six months of

opera
ting costs. This ensures that
surplus funds are pruden
tly managed
and can be utilized for future program-
ming, unforeseen expenses, or strategic

initiativ
es that benefit the organization.
// 2024-2025 ANNUAL REPORT //6

BIA REVENUE
(PAST FOUR FISCAL YEARS)
100%

FUNDING FROM

BIA FUNDS
207
Out of reserves, $476K is being used for hotel marketing funds and $164K for city sponsorships.

PRIMARY EXPENSES
(FY 2024-25 PROJECTIONS)
// TRAVEL COSTA MESA // 7
208
LODGING + ADDRESS BUSINESS OWNER PROPERTY OWNER
Avenue of the Arts Hotel Costa Mesa,
A Tribute Portfolio Hotel
3350 Avenue of the Arts
Costa Mesa, CA 92626
Rosanna Inc.
3350 Avenue of the Arts
Costa Mesa, CA 92626
Rosanna Inc.
3350 Avenue of the Arts
Costa Mesa, CA 92626
Ayres Hotel Costa Mesa

325 Bristol S
t.

Costa Mesa, CA 92626
Ne
wport Country Inn & Suites, Inc.
355 Bristol St., Suite A
Costa Mesa, CA 92626
Newport Country Inn & Suites, Inc.
355 Bristol St., Suite A
Costa Mesa, CA 92626
Best Western Plus
Newport Mesa Inn
2642 Newport Blvd.

Costa Mesa, CA 92627
James Hsuen & Shang-Pu Lee
2642 Newport Blvd.

Costa Mesa, CA 92627
James Hsuen & Shang-Pu Lee
2642 Newport Blvd.

Costa Mesa, CA 92627
Crown Plaza
3131 Bristol St.

Costa Mesa, CA 92626
Bright Bristol Street, LLC
3131 Bristol St.

Costa Mesa, CA 92626
Bright Bristol Street, LLC
3131 Bristol St.

Costa Mesa, CA 92626
Hilton Orange County/Costa Mesa
3050 Bristol St.

Costa Mesa, CA 92626
Ashford TRS CM LLC
14185 Dallas Pkwy, Ste. 1100
Dallas, TX 75254
Remington Lodging & Hospitality LP
14185 Dallas Pkwy., Ste. 1100
Dallas, TX 75254
Hampton by Hilton
Costa Mesa Newport Beach
2070 Newport Blvd.

Costa Mesa, CA 92627
Narendra B. Patel
2070 Newport Blvd.

Costa Mesa, CA 92627
Narendra B. Patel
2070 Newport Blvd.

Costa Mesa, CA 92627
Costa Mesa Marriott

500 Anton
Blvd.

Costa Mesa, CA 92626
Starwood Capital Group
591 West Putnam Ave.

Greenwich, CT 06830

HEI Ho
tels & Resorts
101 Merritt 7 Corporate Park, 1st Fl.

Norwalk, CT 06851
OC Hotel Costa Mesa

2430 Ne
wport Blvd.

Costa Mesa, CA 92627
SAI KSP INC.
11556 Manchester Way
Porter Ranch, CA 91326

Sanja
y Panchal
11556 Manchester Way
Porter Ranch, CA 91326
Ramada by Wyndham
Costa Mesa/Newport Beach
1680 Superior Ave.

Costa Mesa, CA 92627
B.D. Inn Inc./Ramada Ltd.
1680 Superior Ave.

Costa Mesa, CA 92627
B.D. Inn Inc./Ramada Ltd.
1680 Superior Ave.

Costa Mesa, CA 92627
Residence Inn by Marriott
Costa Mesa Newport Beach
881 Baker St.

Costa Mesa, CA 92626

Marrio
tt International
10400 Fernwood Rd.

Bethesda, MD 20817

Legacy
Strata
11301 W. Olympic Blvd. #121-467
West Los Angeles, CA 90064
The Westin South Coast Plaza
686 Anton Blvd.

Costa Mesa, CA 92626
Host Hotels & Resorts
6903 Rockledge Dr., Ste. 1500
Bethesda, MD 20817
Secon Properties
3315 Fairview Rd.

Costa Mesa, CA 92626

LODGING & TCM HOTEL PARTNERS
// 2024-2025 ANNUAL REPORT //8
209
Orange County
New Hotels, Renovations &
Special Projects
In 2025, a new La Quinta Inns & Suites
is set to open in the Orange County
Northwest/Fullerton submarket, while
construction has already begun on the
144-room Wyndham Grand Bolsa Row
Hotel in Westminster.

Irvine's SpringHill Suites and Residence
Inn Costa Mesa Newport Beach are
both undergoing renovations in 2025,
and the
Sonesta S imply Suites in Santa
Ana is also scheduled for an upgrade.

OCVIBE is a 100-acre, master-planned
mixed-use community/live

entertainmen
t project in Anaheim and
construction is underway. It will be
a modern urban village built around
sports and entertainment.

Moving forward into upcoming years,
final planning and proposed new hotel
pipelines are more active. Several large
hotels in the final planning phases are in
the Disneyland submarket. These

include a 500-r
oom Nickelodeon-
themed hotel and resort, a 400-room
Le Meridien, and a 371-room Kimpton
Garden Grove Anaheim. More hotel
development could occur as Disneyland
Forward plans continue.

Hotel Partner Results
Transient occupancy for TCM hotel partners increased by

1.7% in calendar year 2024 compared to 2023. Compared to the 2019 benchmark, transient occupancy grew 1.9%. Room revenue growth rose slightly to 0.3% in 2024 compared to 2023. Increase in average daily rate grew 1% year over year.

Key metrics reflect the following:
// TRAVEL COSTA MESA // 9

78.8%

TCM PARTNERS

AVERAGE DAILY RATE (ADR)
In 2024, Orange County hotels (71.6% occupancy, $208.21 ADR) outperformed hotels in California (67% occupancy, $188.52 ADR) and the U.S. (63% occupancy, $158.67 ADR) Source: Visit California & STR

TCM PARTNERS

OCCUPANCY

75.6%
76%
73%

42.3%

58.5%
$ 1 7 7. 4 7
$147
$123
$136
$173$166
210
The U.S. Travel Association is a
national non-profit organization

repr
esenting all travel industry sectors.

As the industry's unified voice, it

focuses on the k
ey issues that matter
most to its members. Opportunities and
challenges in the industry
are identified,
along with strategies to establish travel
as essential for driving economic growth.

As a member of this organization, TCM
has access to reporting tools, educational
opportunities, networking events, and
other travel-related resources.

At the forefront, U.S. Travel’s long-term
goals remain the same: establishing

tra
vel as essential and responsible;
improving the travel experience;

pro viding members with opportunities to
learn, connect, and shape business; and
being the best-in-class trade association.

For 2025, priorities include creating
a collaborative relationship with the
new administration and Congressional
leaders, empowering the industry to
communicate a compelling message,
and increasing engagement amongst

members.

Forecasts
In 2024, total number of trips reached
2019 levels. The total number of trips in
2025 is expected to increase by

2.6% compared to 2024 as indicated
by U.S. Travel Association’s winter
travel forecast. Business travel is
forecasted to increase 4% while leisure
is expected to increase 2%.

Corporate travel is gaining momentum
as tradeshows, in-person meetings, and
employee connections are expected to
increase travel spending this year.

However, business travel is expected to
take another year to recover to 2019
levels.

MISSION
Increase travel to and
within the United States,
and in doing so, fuel our
nation’s economy and
future growth
U.S. TRAVEL ASSOCIATION
// 2024-2025 ANNUAL REPORT //10
VOLUME

ACTUAL FORECASTS
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
T otal # of Trips 2.40 B 1.60 B 2.04 B 2.30 B 2.37 B 2.43 B 2.50 B 2.56 B 2.62 B 2.68 B Domestic Person-Trips 2.32 B 1.58 B 2.02 B 2.25 B 2.31 B 2.36 B 2.42 B 2.47 B 2.53 B 2.58 B Leisure 1.85 B 1.40 B 1.77 B 1.88 B 1.89 B 1.92 B 196 B 2.01 B 2.05 B 2.09 B Business 463.9 M 181.3 M 249.5 M 370.9 M 413.1 M 436.0 M 454.5 M 467.4 M 478.7 M 488.3 M Auto 2.13 B 1.50 B 1.88 B 2.08 B 2.12 B 2.16 B 2.21 B 2.26 B 2.31 B 2.36 B Air 188.9 M 78.6 M 140.4 M 174.6 M 190.7 M 200.2 M 205.8 M 210.6 M 215.1 M 219.2 M International Arrivals 79.4 M 19.2 M 22.1 M 50.8 M 66.5 M 72.4 M 78.8 M 85.8 M 91.2 M 95.0 M Canada 20.7 M 4.8 M 2.5 M 14.4 M 20.5 M 20.4 M 21.5 M 22.8 M 24.0M 24.8 M Mexico 18.3 M 6.8 M 10.4 M 12.4 M 14.5 M 17.1 M 18.6 M 20.3 M 21.2 M 21.7 M Overseas 40.4 M 7.6 M 9.2 M 24.0 M 31.5 M 35.0 M 38.6 M 42.8 M 46.0 M 48.5 M U.S. Travel Forecasts
VOLUME
(YOY % CHANGE)

FORECASTS
2020 2021 2022 2023 2024 2025 2026 2027 2028
T otal # of Trips 33.2% 27.6% 12.7% 3.1% 2.4% 2.6% 2.4% 2.2% 2.2% Domestic Person-Trips -31.8% 27.8% 11.4% 2.5% 2.2% 2.4% 2.3% 2.1% 2.1% Leisure -24.5% 26.5% 6.2% 0.7%% 1.5% 2.0% 2.2% 2.2% 2.1% Business -60.9% 37.6% 48.6% 11.4% 5.5% 4.2% 2.8% 2.4% 2.0% Auto -29.4% 25.1% 10.5% 1.9% 2.0% 2.4% 2.3% 2.3% 2.1%
AIr -58.4% 78.6% 24.3% 9.2% 5.0% 2.8% 2.3% 2.1% 1.9%
International Arrivals -75.8% 15.0% 129.7% 30.9% 8.9% 8.8% 8.9% 6.3% 4.1% Canada -76.8% -47.4% 468.7% % 42.6% -0.6% 5.6% 5.7% 5.5% 3.3% Mexico -62.9% 52.7% 19.6% 16.6% -17.7% 9.1% 8.8% 4.7% 2.4% Overseas -81.2% 20.8% 161.1% 31.4% 11.2% 10.5% 10.7% 7.5% 5.4% 211
*Spending dated is cited in “real” 2023 $, adjustments based on Travel Price Index. Sources: Tour- ism Economics and U.S. Travel Association.

In 2025, overall travel-related
spending is expected to
increase by nearly 4%
compared to 2024, with leisure
travel spending anticipated to
remain similar, also increasing
by approximately 4%.
// TRAVEL COSTA MESA // 11

SPENDING
YOY % CHANGE

ACTUAL FORECASTS
2020 2021 2022 2023 2024 2025 2026 2027 2028
T otal Travel Spending -38.4% 25.9% 11.8% 4.8% 2.1% 3.9% 3.5% 2.5% 1.9% Leisure -28.3% -26.1% 1.9% 3.3% 1.5% 3.9% 3.7% 2.6% 1.9% Business -67.0% 24.8% 75.8% 10.5% 4.0% 4.0% 2.8% 2.2% 1.8% Domestic -31.3% 27.4% 5.4% 1.8% 0.7% 2.6% 2.2% 2.0% 1.7% Leisure -18.6% 27.3% -5.0% 1.8% 0.7% 2.6% 2.2% 2.0% 1.7% Business -65.5% 27.9% 70.7% 7.7% 3.5% 3.7% 2.7% 2.2% 1.8% Transient -59.7% 30.1% 50.6% 5.6% 2.9% 3.5% 2.9% 2.1% 1.8% Group -73.5% -23.4% 115.1% 11.2% 4.3% 3.9% 2.8% 2.3% 1.9% International* -77.3% 0.6% 148.7% 31.8% 11.5% 12.5% 10.9% 5.5% 2.5% Leisure -71.1% 3.7% 143.4% 30.0% 12.3% 13.8% 12.4% 6.0% 2.7% Business -78.2% -12.4% 163.2% 40.4% 8.2% 6.7% 3.8% 2.9% 1.6% Transient -77.1% -8.6% 179.0% 27.8% 4.5% 6.3% 3.4% 2.8% 1.5% Group -79.8% -18.8% 132.9% 69.5% 14.6% 7.5% 4.3% 3.1% 1.7%

SPENDING

ACTUAL FORECASTS
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
T otal Travel Spending $1.402 T $0.864 T $1.087 T $1.087 T $1,274 T $1,301 T $1,351 T $1,399 T $1.434 T $1.461 T Leisure $1.037 T $0.743 T $0.937 T $0.937 T $0.982 T $.0987 T $1.036 T $1.074 T $1.102 T $1.123 T Business $365.7 B $120.6 B $150.5 B $264.5 B $292.1 B $303.7 B $315.9 B $324.7 B $332.0 B $337.9 B Domestic $1.187 T $0.815 T $1.038 T $1.094 T $1.114 T $1.122 T $1.151 T $1.176T $1.199 T $1.220 T Leisure $864.3 B $703.8 B $896.0 B $851.5 B $852.8 B $851.6 B $870.3 B $888.4 B $905.3 B $920.7 B Business $322.2 B $111.1 B $142.2 B $242.6 B $261.4 B $270.4 B $260.4 B $287.8 B $294.0 B $299.3 B Transient $187.1 B $75.4 B $98.0 B $147.7 B $155.9 B $160.4 B $166.1 B $170.3 B $173.9 B $177.0 B Group $135.1 B $35.8 B $44.1 B $94.9 B $105.5 B $110.0 B $114.3 B $117.5 B $120.2 B $122.3 B International* $215.9 B $48.9 B $49.2 B $121.4 B $160.1 B $178.5 B $200.8 B $222.7 B $234.9 B $240.8 B Leisure $172.4 B $39.4 B $40.9 B $99.5 B $129.4 B $145.3 B $165.3 B $185.9 B $197.0 B $202.3 B Business $43.5 B $9.5 B $8.3 B $21.9 B $30.7 B $33.3 B -$35.5 B $36.9 B $37.9 B $38.6 B Transient $26.1 B $6.0 B $5.5 B $15.3 B $19.5 B $20.4 B $21.7 B $22.4 B $23.1 B $23.4 B Group $17.3 B $3.5 B $2.8 B $6.6 B $11.2 B $12.8 B $13.8 B $14.4 B $14.8 B $15.1 B *Spending dated is cited in “real” 2023 $, adjustments based on Travel Price Index.

Sources: Tourism Economics and U.S. Travel Association. 212

VISIT CALIFORNIA
As the Golden State enters 2025, total
domestic visitor spending is forecasted
to grow by 3% compared to 2024. Total
visitor spending for 2024 is expeced
to grow more than 3% to $156B
compared to the prior year. Domestic
spending for 2024 is expected to be at
just under $130B, similar to 2023. As
the demand for leisure travel stabilizes
for the state, outbound travel is

predicted to incr
ease in 2024 and in
2025.

Overall visitation to California is
expected to r
each 2019 levels in 2026.

Visitation to the state is forecasted to
increase to just over 270M in 2024,
which is a 2% increase compared to the
prior year. International travel spending
is expected to recover in 2025 as well
as spending.

Key international markets for

California include Canada, M
exico,
India, and Australia. The Chinese are
projected to spend $2.5 billion in 2024,
reaching 94% o
f their spending levels
from 2019, making this market one of
the most significant overseas.

Source: Tourism Economics, Feb 2025
// 2024-2025 ANNUAL REPORT //12

TOTAL ANNUAL

TRAVEL SPENDING & VISITATION
213
California Airports
California airport throughput
(the number of passengers screened
under expedited and standard

screenings
) grew 3.5% to 112.8 million
in 2024 compared to 2023. Passenger
traffic from domestic fights was down
1%, with international visitation growing
9% year-over-year.

Airports include:
■ Los
Angeles (LAX)
■ Burbank (BUR)
■ Long B
each (LGB)
■ Oakland (
OAK)
■ On
tario (ONT)
■ Or
ange County (SNA)
■ Sacr
amento (SMF)
■ San D
iego (SAN)
■ San F
rancisco (SFO)
■ San
Jose (SJC)
Airports with the largest percentage
of
growth include Los Angeles,

San F
rancisco, San Diego, Sacramento
and Ontario.

John Wayne Airport, Orange County
(SNA) experienced a decrease in overall
total passengers in 2024 compared to
2023. Total passengers decreased 5.6%
to 11M in 2024 compared to 11.7M
the previous year.
2024
California Airport
Throughput
112.8 million
+3.5% YOY
// TRAVEL COSTA MESA // 13
214

TOURISM ECONOMICS
$883M

VISITOR SPENDING
Travel Costa Mesa commissioned Tourism Economics in Fiscal Year 2024-2025 to conduct
a study on the impacts of tourism, specifically in
Costa Mesa. This report presents the key findings for 2023 compared to the previous four years. The organization can highlight the travel sector's critical role by monitoring the industry’s success and the effects of visitor spending. $1.1B
TOTAL

ECONOMIC IMPACT
8,421

TOTAL JOBS
$50.2M

STATE AND LOCAL
TAXES
// 2024-2025 ANNUAL REPORT //14
A visitor is defined as those
who sta
yed overnight or

tra
veled 50+ miles to Costa Mesa.

In 2023, visitors spent $883 million, resulting in a total economic impact of tourism of
$1.1 billion in Costa Mesa. More than 8,400 jobs and $50M in state and local taxes were generated.

Visitors to Costa Mesa totaled 7.6M in 2023, a 5.9% increase from 2022.

Ov
ernight visitation grew 3.7% and day visitation grew more than 6% in 2023.

Similar to California and the U.S., overall visitation to Costa Mesa hasn’t reached 2019 levels.

Overall visitor spending in 2023 was $883M, up more than 7% compared to the prior year, and surpassed 2019 revenue of $802M.

Food and beverage visitor spending in 2023 reached $307M, retail revenues reached $270M, and lodging revenues were at $180M. Recreation and entertainmen
t revenue amounted to $80M, while transportation revenue was $46M. All segments of spending have recovered post-pandemic. 215
// TRAVEL COSTA MESA // 15

COSTA MESA VISITOR SPENDING
2023 % change and % recovered relative to 2019
Lodging spending is calculated as an industry and includes short-term rentals and the value of second homes.

Source: Tourism Economics
Amounts in $ millions
216
Fiscal year 2024-25 was a remarkable one for
Travel Costa Mesa, marked by significant growth
in engagement, reach, awareness, and overall
exposure for the city. These efforts translated into
increased visitation, with travelers staying longer
and contributing to a thriving hospitality industry
and a stronger local economy. By strategically
aligning marketing efforts with traveler behaviors
and industry trends, TCM reinforced its position
as a premier destination in Southern California,
offering a dynamic mix of arts, culture, dining, and
entertainment.

A key focus of the year’s strategy was
leveraging the power of storytelling to highlight
Costa Mesa’s unique offerings. TCM showcased
the city’s vibrant culinary scene, world-class
shopping, and rich arts experiences through
engaging digital content, influencer collaborations,
and strategic PR outreach. Partnerships with
local businesses, tourism stakeholders, and our
state marketing organization helped amplify these
efforts, creating authentic narratives resonating
with first-time and repeat visitors. Additionally,
a renewed emphasis on community outreach
strengthened relationships with local businesses,
ensuring alignment in promoting Costa Mesa as a
welcoming and must-visit destination.

By integrating owned, earned, and paid media
strategies, TCM ensured consistency in messaging
while refining campaigns based on real-time
performance insights. This comprehensive
approach strengthened the city’s presence among
target audiences—such as active travelers, food
enthusiasts, and high-income Millennial and
Gen X visitors—and delivered measurable results
that supported local businesses, hotels, and
tourism partners.
travelcostamesa.com
As the digital landscape continues to evolve, search engine optimiza
tion (SEO) and search engine marketing (SEM) remain
essential in ensuring TCM reaches a highly qualified audience. By optimizing keywords and refining our paid search efforts, we enhance our website’s visibility, ensuring Costa Mesa stands out in relevant travel-related searches. Targeted display advertising further amplifies brand awareness, driving engaged visitors to the site.

Through SEO, SEM, and ongoing adaptation to AI-driven search innovations, TCM continues to attract engaged visitors to our website—connecting them with compelling travel inspiration, local businesses, and resources to plan their stay. This strategic approach ensures Costa Mesa remains a top destination in a rapidly changing digital environment.
911k
TOTAL
USERS
(+41% YOY)

1.1M

ENGAGED

SESSIONS
(+37% YOY)
109k

ORGANIC
SEARCH
(+13% YOY)
124k
PAID
SEARCH
(+5% YOY)
// 2024-2025 ANNUAL REPORT //16
Key Initiatives in FY 2024-25
Storytelling Content
Cultivate Partnerships
Focus on PR and Community Outreach
Increase Fly Market Visitation
This report contains data from Feb. 2024 to Feb. 2025
217
T op 10 Landing Page Rankings

1. Plan-your-visit

2. Wha
ts-next Home Page

3. Home
Page

4. Cation
time

5. Oc
-fair-costa-mesa

6. We-v
e-got-good-taste-drive

7. Sta
y/costa-mesa-hotels

8. Ho
tels-specials

9. We-v
e-got-good-taste-fly

10. Eatcation®
// TRAVEL COSTA MESA // 17
By City
L.A. 11%
Ne
w York 2%
Dallas
2%
San
Jose 2%
San D
iego 1.9%
Website Traffic Drivers

44.1% Displa y Ads

13.17% Re
ferral

13.14% Paid S
earch

9.66% Or
ganic Search

6.7% Dir
ect

5.6% Paid S
ocial

3.5%
Paid O
ther
(SEM, Native,
Tripadvisor
, etc.)
T op Website Visitors By State
California 34%
Te
xas
7%
Florida 3%
Arizona 3%
Ne
w York 2.9%
218

MARKETING
We’ve Got Good Taste
TCM’s “We’ve Got Good Taste”
paid campaign was a dynamic, multi-
channel marketing initiative that
showcased the city’s vibrant culinary,
arts, and shopping scenes. Centered
around the idea that Costa Mesa is a
destination for those who appreciate
quality experiences, the campaign
leveraged compelling storytelling to
engage high-value travelers in drive
and key fly markets.

Additionally, a new Costa Mesa
destination video debuted, capturing
the city's essence through its
renowned dining, entertainment, and
shopping attractions. This video was
the foundation for a robust digital
strategy that included programmatic
advertising, Connected TV (CTV)
placements, targeted social media ads,
and influencer collaborations.

By integrating engaging content across
multiple platforms, “We’ve Got Good
Taste” reached travelers at various
stages of their journey—building
awareness, inspiring trip planning, and
ultimately driving visitation.

Social
■ 1.2M Impr
essions
■ 0.98% CTR (0.90% benchmark)
■ 982k Reach
P
rogrammatic
■ 1.5M unique individuals reached
■ 102k to
tal visitors
Visitation
■ +1.3 day
visitation over same

time period in 2023
■ +17.5% visita
tion from

c i
ti e s 5 0 0 + m i l e s a w a y o v e r
the same time period in 2023
Visit California &
Tripadvisor Co-op Campaign
As part of its ongoing efforts to expand
awareness and drive economic impact,
TCM partnered with Visit California and
Tripadvisor on a strategic co-op
campaign aimed at reaching high-intent
travelers. Leveraging Tripadvisor’s
extensive audience data, the campaign
targeted qualified consumers both onsite
and across external digital platforms,
ensuring Costa Mesa remained top of
mind for travelers actively researching
and planning their trips.

The campaign successfully attracted
engaged visitors by combining targeted
ad placements with Tripadvisor’s robust
travel insights, driving measurable results
for the destination. The impact was

significant, g
enerating an impressive
$1.59 million in economic impact from
users exposed to the campaign’s

advertisemen
ts. This collaboration
strengthened Costa Mesa’s presence
among key traveler segments.
■ 2.9M+ onsite T
A impressions with

0.08% CTR
■ 5.1M+ impression and 411k+ clicks

from offsite ROVE ads with an
impressiv
e 7.99% CTR
■ $1.59M in economic impact
// 2024-2025 ANNUAL REPORT //18
219
Onsite
■ 1.6M Impr
essions
■ 2,386 Clicks
■ 0.15% CTR

(0.10% benchmark)
Offsit
e – Connect
■ 1.3M Impr
essions
■ 44K+ Clicks
■ 1.80% CTR
Offsit
e – ROVE
■ 2.1M Impr
essions
■ 87K Clicks
■ 4.13% CTR
Email
■ 2.3M sends
■ 40.20% Open R
ate
■ 0.92% CTR
‘Cation Time
TCM’s “ ‘Cation Time” campaign invited
travelers to take a well-deserved get-
away in Costa Mesa. Designed to inspire
extended stays and increase visitation,
the campaign leveraged a multi-platform
approach to reach key fly and drive
markets, positioning Costa Mesa as
the ideal destination for a relaxing and
experience-filled Southern California
vacation.
“ ‘Cation Time” delivered a cohesive and
compelling message across multiple
digital touchpoints, reaching travelers
actively searching for their next trip.

Digital Out of Home (DOOH)
placements boldy captured travelers’
attention on key roadside billboards and
in major airports within Phoenix and
Dallas. These high-impact visuals were
reinforced with strategic programmatic
advertising on leading Online Travel
Agencies (OTAs) Priceline and Expedia,
and targeted social media promotions.

To further enhance engagement, the
campaign incorporated influencer and
content creator partnerships, generating
authentic storytelling that resonated
with key target audiences.
■ 24.6M Impr
essions
■ 0.13% Post I
mpression Rate

(0.10% benchmark)
■ 3,417 Book
ed Room Nights
Digital Out of Home
■ Dr
ove a 70% Visitation Lift
■ Resulted in nearly
2k actual visits to
Costa Mesa
Visitation
■ +2.8% ov
ernight visitors YOY
■ Half
day increase to length of stay
■ +5.4% visita
tion from cities 500+ miles
away
// TRAVEL COSTA MESA // 19
Tripadvisor
Branded Hub
To further position Costa Mesa as a premier travel
destination,
TCM launched a dedicated Tripadvisor
Branded Hub campaign, designed to inspire travelers with curated trip itineraries and targeted outreach. This
campaign featured a custom Tripadvisor landing page
showcasing three distinct Costa Mesa itineraries, offering tailored recommendations for visitors seeking culinary
adventures, arts and culture, and shopping getaways.
220
Visitor Insights and
Location Tracking Data
Understanding traveler behavior is
essential to measuring the impact o
f
Travel Costa Mesa’s marketing efforts.

Through advanced location data

tracking,
TCM monitors visitor trends,
providing valuable insights into where
travelers are coming from, how long they
stay, and how visitation patterns evolve.

This past year, the data revealed
impressive YOY growth, highlighting
the effectiveness of targeted marketing
strategies:
■ +3.9% in ov
ernight visitors
■ 2.9 day
length of stay (+0.8%)
■ +8.1% visitor
s from 500+ mile
These results reinforced the success
of expanded fly-market outreach and
demonstrated a positive shift toward
more extended visits that drive more
significant economic impact for the city.

Understanding Our Audience
To better understand visitor motivations
and preferences, TCM partnered with
LOVE Communications to conduct a
comprehensive audience study. The
research included quantitative and
qualitative insights, helping shape future
marketing strategies.

Key findings revealed that Costa Mesa’s
strongest visitor interests included beach
close access, a walkable city, culinary
experiences, and the county fair, all

ranking abo
ve neutral on the interest
scale. Additionally, the city attracts
mainstream and o
ff-the-beaten-path
travelers, with 42% of respondents
equally open to well-known and

hidden-gem destina
tions.

Seasonal travel trends showed spring
and summer as peak interest times, with
July being the most popular self-reported
month for a trip. The study also found
that escaping everyday stress, creating
memories, and spending time with loved
ones were the primary motivations for
choosing Costa Mesa.

Social proof plays a significant role in
awareness, as friends and family (50%)
and social media (36%) were the top
ways people discovered Costa Mesa.

Comparatively, San Diego, Laguna
Beach, and Newport Beach were rated
as top travel destinations, positioning
Costa Mesa as a desirable alternative
with unique offerings.

Focus groups further reinforced that
Costa Mesa is seen as a centrally
located, affordable, and culturally rich
destination, though transportation and
walkability improvements could enhance
its appeal. While OC visitors primarily

view
the city as a shopping and dining
hub, there is po
tential to attract

extended-sta
y travelers by emphasizing
resort-like experiences and curated events.

Audience Segments

1. The Luxury Traveler
■ High-inc
ome individuals willing to pay
for premium experiences
■ Pr
efer upscale lodging and luxury
travel options

2. The C
ultural Experiences Traveler
■ Enjo
ys trying new things and

immersing in diff
erent cultures
■ Spends mor
e time planning trips to
maximize cultural experiences

3. The U
rban Budget Traveler
■ Pr
efers urban destinations and well-
known travel spots
■ Budg
et-conscious, seeking
aff
ordable travel options

4. The R
outinized Traveler
■ Most f
requent repeat travelers
■ Fa
vor structured plans but spend less
time on trip planning
■ Pr
efer familiar experiences over
exploring ne
w ones
*All audiences shared an interest in specific
activities, with going to the beach and shop-
ping being the most popular.

RESEARCH
// 2024-2025 ANNUAL REPORT //20
221
// TRAVEL COSTA MESA // 21

PUBLIC RELATIONS
Earned Press Coverage
Travel Costa Mesa generated 195
articles with 54 unique stories. These
stories covered food, attractions, hotel
news, and seasonal events around
Costa Mesa, with headlines like,

“California
’s best-kept cultural secrets”
from The Sacramento Bee and
“Must-sees in the G
olden State” from
Canadian CTV News. Media and
journalists wr
ote about Costa Mesa
very favorably, with 95% of the
co
verage having a positive sentiment.

Media coverage included television
segments on both domestic and

interna
tional stations. Coverage
extended into Canada via broadcast
television, radio, and digital media.

Print media was included in the
coverage, with stories like “Orange
County Businesses Mobilize Relief
Efforts for Wildfire Victims” from

Or
ange County Business Journal
appearing both digitally
and in print.

Stories such as “Southern California
Road Trip” from This is TASTE were told
via audio podcast.

Familiarization (FAM) Trips
TCM hosted six FAMs with writers,
freelancers, and other media to see and
experience the city firsthand. Barry Choi,
Canadian finance and travel expert,
spoke about his stay in Costa Mesa in
news segments in Calgary, Vancouver,
and Windsor/Ontario in Canada. Rachel
Belkin, a Texas-based writer and consultant,
wrote several articles about her stay in
Costa Mesa, resulting in coverage titled
“15 Affordable Vacations to Treat Yourself
After Treating Everyone Else” appearing
on MSN.com and ProbetheGlobe.com.

Influencer Event
Each year, Emily Kaufman, also known as The Travel Mom, curates an unforgettable weekend of fun, connection, and travel inspiration for journalists and sponsors at Beach Bash Weekend in Fort Lauderdale, Florida. The event features a packed itinerary filled with exciting

activities, themed ev
ents, and engaging brand experiences.

TCM proudly sponsored a special morning activation during the week
end. The curated coffee experience featured a custom coffee cart that served lattes and cold brews from Costa Mesa’s beloved MoonGoat. This unique touch provided attendees with a refreshing and energizing start to the day while showcasing the vibrant, local flavors of Costa Mesa to influential journalists and travel personalities. 213
articles
55 unique articles
571,330,000
media impressions (est.)
222
In Partnership with Visit California
In addition to attending the Fall Media Reception, Visit California invited
TCM to present at their headquarters in Sacramento, California.

TCM brought a taste of Costa Mesa with them, sampling chips and salsa from Northgate Mercado, chocolate from El Moro, and cold brew from MoonGoat Coffee.

Visit California promoted Costa Mesa through their earned media

channels throughout the
year, publishing nine articles that mention Costa
Mesa, totaling almost 5,000,000 impressions. Costa Mesa also received a full page of coverage in Visit California’s annual California Visitor Guide, printed and distributed to more than 70,000 in-state residents.

Taking the Story to the Media
Travel Costa Mesa attended the annual
In
ternational Media Marketplace (IMM) in New
York. Through one-on-one appointments with
17 media representitives, TCM pitched stories
directly to the writers and editors who create
the news, such as AFAR, Conde Nast

Tr
aveler, Essenc
e, US News & World Report,
AAA M
agazines, and Times Media Group. TCM
also attended Visit California’s Fall Media
Rec
eption at the new Intuit Dome in Inglewood,
where it met and pitched Costa Mesa to media
repr
esentatives from companies such as

Los
Angeles Times, SFGate, Orange County

Regist
er, C Magazine, and KTLA.
// 2024-2025 ANNUAL REPORT //22
Digital Refresh
TCM refreshed several media and communications-focused website pages to create a more accessible browsing experience, remove outdated information, update search engine optimization, and share a more premium look and feel. On Press Room, Eatcation®, and Awards & Recognition pages, TCM removed defunct links, added photos, and designed a mobile-friendly user experience. New press coverage, awards, and accolades were inputted, better celebrating Costa Mesa’s impressive dining, hospitality, and hotels.

PUBLIC RELATIONS
223
Destination Training
TCM led two destination workshops for employees at The Westin South Coast Plaza and The Hilton Orange County/Costa Mesa, aiming to empower the front desk, sales team, events personnel, and bell desk to become even better

ambassadors f
or the city. TCM led an interactive presentation designed to increase sta
ff expertise in shopping, dining, and attractions so that staff can carry that knowledge to their guests. Attendees at The Westin went on a backstage tour of Segerstrom Center for the Arts, while Hilton employees met with a

repr
esentative from Orange County Museum of Art.
// TRAVEL COSTA MESA // 23
Trending T opics
TCM attended specialized conferences throughout
the year to stay informed on the latest public relations trends, like the Public Relations Society of America’s Icon and the Destinations International (DI) Marketing and

Communica
tions Summit. Persistent messaging from
industry
leaders covered insights on the emergence of
AI-driven content and the benefits of AI and its incendiary potential to introduce false narratives.

Repeatedly, the importance of authenticity and candid,
personal experience was highlighted, and TCM kept this in mind with all media outreach, leading to stronger

rela
tionships with local and national reporters. TCM was
ahead of the curve with strong collaboration between PR and social media, recognizing that stories are often told social and digital first, then in traditional media second.

Ongoing Communication
TCM sent an email newsletter each month to potential
visitors.

These monthly newsletters highlight seasonal
dining, limited-time ev
ents, and arts attractions. From May 1,
2024, to February 21, 2025, TCM sent out 10 newsletters.

July and May had the highest click rate at 6%. January and October had the highest open rate at 28.5%.

TCM also reinstated their partner newsletter, a quarterly publication to local businesses, board members, city council, and community stakeholders. As of February 25, 2025, one newsletter has been sent, with a 62% open rate.

The travel and tourism industry benchmark for newsletter open rate is 20.2%, as calculated by Campaign Monitor by Marigold. As the metrics above demonstrate, TCM consistently outperforms the industry benchmark with email marketing.

Along with creating original content for the newsletters, TCM audited, updated, and simplified the sign-up flow for both the monthly and partner newsletters with high-performing visuals and UX copy.

Impr essions are calculated via Similarweb UVM
224
// 2024-2025 ANNUAL REPORT //24
Follower Counts
(2023 vs. 2024)
19,334
Instagram
(+34.5%)
7,970
Facebook
(+8.6%)
1,776
TikT ok
(+67.2%)
2,301
LinkedIn
(+21%)
Engagement Stats
(2023 vs. 2024)
3,313,873
Instagram
(+22,946%)
68,120
Facebook
(+827%)
459,466
TikT ok
(+43,164%)
4,670
LinkedIn
(+175.8%)
3,844,760
Across all platforms
(+5,079%)

SOCIAL MEDIA
Growing Social Media Presence
Social media has evolved into a powerful search engine tool with users turning to platforms like Instagram, TikTok, and Facebook to discover destinations, experiences, and recommendations. To boost Costa Mesa’s searchability, TCM applied SEO best practices by strategically using keywords in hashtags, voiceovers, captions, and text overlays across social media content. This approach made it easier for audiences to find and engage with the content, resulting in more than 3 million views across all channels. Searchable itineraries and roundups were also created to guide users through the best spots and experiences in the city. In doing so, TCM highlighted more than 200 restaurants, shops, entertainment venues, and hotels, bringing greater awareness to the city as a must-visit destination. 39,748
Impressions
(+38.7% YOY)
5,247
Engagements
(+46.5% YOY)
3,504
Link Clicks
(+47.8% YOY)

13.2%
Engagement Rate
(5.7% YOY)
LinkedIn Growth & Highlights
225
// TRAVEL COSTA MESA // 25

SOCIAL MEDIA
STATS
MAY 2024 -
FEB 2025
Spend $29,481.42
Impressions 7,476,001
Reach 1,277,997
Link Clicks 77,853
CTR (link) 1.04%
CPC (link) $0.38
CPM $3.94
Engagements 412,353
Engagements (non-video) 80,917
Conversions 11
CTR (all) 1.33%
CPC (all) $0.30
Insights on Paid Social
TCM used a mix of stylized and native ads to boost engagement and connect with diverse audiences. The stylized ads featured high-quality imagery and creative elements to reinforce the brand's identity, while the native ads blended into users' feeds for a more casual, authentic feel. This balanced approach allowed TCM to capture the interest of visual users and those who respond better to authentic organic content, ensuring broader appeal and a cohesive presence across platforms.

Total numbers are for anything TCM ran from May 2024 to February 2025. Although the budget was nearly 100% lower this year, and one would expect the other metrics to be lower by a similar amount, the campaigns performed better due to improved cost efficiency.

Influencer Campaign Collabs
T otal Views: 86,055
T o
tal Engagements: 3,129
T o
tal Reach: 55,994
In-House Campaigns
TCM partnered with content creators from diverse industries, interests, and cultural backgrounds to showcase Costa Mesa as an inclusive destination. In doing so, the organization created authentic, relatable content and increased its visibility to new audiences.

Best of 2024
TCM launched the "Best of Costa Mesa” campaign, spotlighting the top food, shopping, and experiences across the city’s seven diverse neighborhoods. From hidden culinary gems to must-visit luxury boutiques and one-of-a-kind experiences, the campaign inspired visitors to explore a dynamic destination.

Total Views:
70,687
T o
tal Engagements: 4,413
T o
tal Reach:
52,518
Giv
eaway Entries: 350
B
usiness Highlighted: 21+
Blo
g Clicks: 3,830
226
// 2024-2025 ANNUAL REPORT //26

SOCIAL MEDIA
TOP 5 NATIVE ADS LANDING

PAGE VIEWS
Summer 2024 Social Post (“Road Trip”) 2024-06-20 6,186
Summer 2024 Social Post (“OC Fair”) 2024-07-26 2,732
Fly ‘Cation Unmod Carousel 2 1,929
Fly ‘Cation Unmod Social 2024-11-13 1,525
Summer 2024 Social Post (“Escape Heat”) 2024-07-31 795
TOP 5 STYLIZED ADS LANDING

PAGE VIEWS
Summer 2024 Carousel 1 3,001
Drive ‘Cation Carousel 1 2,518
Fly Cation Carousel 2 1,919
Summer 2024 Carousel 2 1,527
Summer 2024 Drive Carousel 2 1,383
TOP 5 PERFORMING REELS VIEWS ACCOUNTS

REACHED ENGAGEMENTS
$5 Taste of Fair 1M 607.3k 88.2k
Countdown to OC Fair 633.6k 431.2k 77.4k
The Westin Pickleball Courts 242.8k 155.6k 18.8k
Matty’s Patty’s 181.9k 156.9k 15.2k
LA to CM Road Trip Itinerary 142.3k 214.2k 7.9k
227
Hispanic Heritage Month
During Hispanic Heritage Month, TCM celebrated the city’s rich cultural experiences by interviewing Hispanic creators who shape its community. The campaign showcased Costa
Mesa as a destination where art, food, and traditions thrive, inviting visitors to be a part of the stories, flavors, and

crea
tivity that make the city a cultural hub.

T otal Views:
24,504
T o
tal Engagements: 1,191
T o
tal Reach:
15,967
Blo
g Clicks:
6,750
Content Marketing
T otal Number of Page Visits: 928,177
T op 5 Best Performing Blog - Number of Sessions

1. T
he Ultimate Summer Destination for SoCal Travelers - 122,343

2. Ea
ting Well in the New Year in Costa Mesa - 8,853

3. Best P
laces to Dance in Costa Mesa - 8,845

4. Our
Best Tips and Tricks for The OC Fair - 8,623

5. Road
Trip Ready Cruise from Los Angles to Costa Mesa - 7,580 Visit California x CrowdRiff Travel Stories
Travel Stories is a partnership between Visit California and CrowdRiff that highlights California’s destinations through

crea
tor-driven digital web stories. This content, featuring images, videos, and text, can appear on Google Search and is often featured on Visit California’s website.

Number of Stories: 28
Best Performing T opics:

1. Free Things to Do in CM

2. Snake Yoga

3. Beaches Near CM
// TRAVEL COSTA MESA // 27
228
Meetings and event spending are
expected to increase in 2025, with
a sharp focus on personalized

experienc
es and sustainability,
while AI will play a significant role
in driving industry growth.

Ac
cording to AMEX GBT, 74% of
meeting professionals are
optimistic about the industry's

health, and 66% anticipate a
budge
t increase this year.

Meetings are expected to increase
in number with a more extensive
attendee base. Notably, planners
intend to allocate these increased
budgets to enhance onsite experiences,
making events more memorable and
engaging for attendees. Face-to-face
interaction remains essential in the
meetings and events sector, with
industry leaders reaffirming the value of
in-person connections over hybrid

forma
ts. While hybrid events carry cost
concerns, most professionals agree that
technology can’t replace the benefits
of meeting in person for relationship
building and collaboration.

Despite labor costs due to efficiency
measures like self-check-in kiosks,
limited housekeeping, and mobile apps,
the sharp increase in average daily rate
(ADR) from last year has started to level
out. Planners are hopeful that these
rates have reached their peak and will
stabilize moving forward. Forbes Media
reports that meeting planners indicate
that onsite and are experience is a top
priority and that budget increases would
be allocated to this.

The city of Costa Mesa offers planners
a walkable location for their attendees,
rich with arts and culture, an abundance
of restaurants and is centrally located in
the county. These are staples that TCM
will continue to promote. Sustainability
has evolved beyond a mere trend—it’s
now a fundamental priority for meeting
planners. According to Meetings and
Events, planners focus on minimizing
waste, sourcing food and beverages
locally, and creating positive experiences
to the local economy and community.

Moving Forward
TCM initially utilized a temporary agency
sales manager to handle Cvent (sourcing
system) and independent leads

follo
wing the Destination Sales
Executiv
e’s (DSE) departure in April
2024. This arrangement remained in
place until the new DSE was hired in
late October 2024. Since their

arrival, industry
tradeshows have been
attende
d, with the DSE participating
in three events from December to
February
2025. These tradeshows have
primarily targeted small- to mid-sized
group businesses, typically ranging from
10 to 300 room nights at peak.

The DSE is scheduled to attend eight
additional shows for the remainder of
the fiscal year. These shows will

pro
vide opportunities to connect with
new meeting planners, promote Costa
Mesa as a prime meeting destination,
and secure requests for proposals
(RFPs).

Cvent reports TCM received

7.4% less RFPs in 2024 than
2023 but an increase of 30%
more room nights awarded
when TCM was copied on the
lead. TCM also increased its
response rate in 2024 to 5.1%
by responding to the event
planner within 12 hours of

rec
eiving the RFP.

The DSE plays a critical part in driving
revenue and contributing to the city’s
overall economic impact. Business
travelers tend to spend more than the
average leisure visitor, often due to
expense budgets, influencing their
choice of accommodations and the
amount they are willing to pay.

Meetings bring immediate business
to the city and attract future visitors,
potentially generating ongoing tourism.

This enhances the city’s exposure and
improves its image as a desirable
destination for business and leisure.

The “arrive early, stay late” trend

con
tributes to and directly benefits
Costa Mesa’s local economy.

GROUP SALES
// 2024-2025 ANNUAL REPORT //28
229
Memberships
■ California DMO Alliance
■ California S
ociety of Association
Executives (CalSAE)
■ Cv
ent
■ Helms
Briscoe
■ Hospitality
Performance Network
(HPN)
Orange County
Sports Commission (OCSC)
TCM’s partnership with OCSC continues
as the search for sports groups
continues. Its goal is to enhance OC
communities' economic, social, and

cultural
vitality through sports. Members
include OC Fair & Event Center,
Anaheim Ducks, M
ission Viejo, OCVIBE,
Visit Huntington Beach, ATN, John
Wayne Airport, Orange County, and
Visit Anaheim.

In 2024, OCSC reported 10 leads were
sent to TCM and nine bookings.

Venue availability and restrictions remain
challenging in securing fields and venues
within the city.

IPW 2024
Each year, U.S. Travel Association’s IPW tradeshow visits various cities across the U.S. to promote global relationships and strengthen connections. This premier inbound travel tradeshow connects travel buyers and media with America’s top travel exhibitors face-to-face. TCM participated in IPW 2024 in Los Angeles, where the team conducted professional story pitches through meetings with journalists and met with leisure and incentive buyers. This approach allowed TCM to effectively communicate its narratives and foster valuable relationships within the industry. TCM plans on taking part in IPW 2025 in Chicago.

Visit California Meetings
CaliforniaMeetings.com, a dedicated
meetings-focused website integrated
with Visit California’s platform,

reported tha
t 2024 group room
occupancy for California increased

0.3% and the average daily rate
increased 0.9% compared to 2023.

Orange County group room occupancy
increased 5.3% and 1.5% in average
daily rate for 2024 compared to 2023.

TCM maintains a prominent listing on
the site, providing meeting
planners with valuable information
about what Costa Mesa offers as a
meeting destination. Additionally, the
listing includes direct contact details
for the DSE, facilitating seamless
communication and further support for
meeting planning.
// TRAVEL COSTA MESA // 29
230
Association
(State/Regional/National)
Associations heavily depend on
annual meeting dues for financial
stability. Without these events,
associations may face significant
challenges and need to explore
alternative revenue sources to stay
afloat. While these organizations tend
to be larger and more budget-
conscious, they still present valuable
business opportunities, especially
mid-week or weekends.

In the FY 2024-2025, TCM will
maintain its membership with CalSAE
and continue its involvement in their
flagship event, Seasonal Spectacular.

This provides opportunities to connect
with association meeting planners and
intermediaries who specialize in
organizing such events. TCM also plans
to schedule an appointment visit in
Sacramento to strengthen relationships
with this key segment and build valuable
business connections.

Corporate
This sector presents a wealth of
opportunities for meetings, ranging from
internal team sessions and training to
client engagements and local
business events. To fully capitalize on
this growing demand, it is crucial to
maintain a strong presence with
national, state, and regional
corporations. TCM also plans to
participate in prominent shows like
Smart Meetings and HelmsBriscoe.

Fortune 500 firms have led the
charge of travel budget increases and
many businesses have emphasized
in-person conferences as an efficient
way to build connections that were once
made in-office. With overall occupancy
rates steadily recovering, the resurgence
of in-person events is expected to fuel
continued demand through 2025.

TCM will actively seek and pursue new
business opportunities by attending
conferences, conducting sales calls, and
participating in tradeshows to expand
our network of meeting-producing
companies. Additionally, TCM will invite
key planners from this market to

participate in a F
amiliarization (FAM) site
tours, ensuring Costa Mesa remains top
of mind when they are sourcing venues
and destinations for future events.

Sports
The sports market offers significant
potential for hotel room blocks across
one or more of the city’s hotels, driven
by national and regional tournaments for
all age groups. TCM will continue
prioritizing partnerships with the Orange
County Sports Commission (OCSC),
local colleges and universities, sports
complex venues, and the City of Costa
Mesa to drive sales and further
capitalize on this market opportunity.

SMERFE
(Social, Military, Educational,
Religious, Fraternal and Ethnic) /
Specialty

Given their budget constraints, these
markets are price-sensitive but offer
great potential for filling hotel room
blocks during peak times, such as
weekends. Their event and meeting
dates tend to be more flexible compared
to other markets. The Orange County
Fair & Event Center hosts events year-
round, making it a key partner for TCM,
and this collaboration will continue to be
a strategic focus.

GROUP SALES
In the second half of the fiscal year, TCM will continue to pursue mid-sized meetings in the markets that have produced well in the area. These markets will continue to be the focus:
// 2024-2025 ANNUAL REPORT //30
231
// TRAVEL COSTA MESA // 31

TRAVEL COSTA MESA LEADERSHIP

EXECUTIVE COMMITTEE
Steve Yannarell
CHA

IRPERSON, GENERAL MANAGER,

The W
estin South Coast Plaza
Susan O’Brien Moore VI

CE PRESIDENT, GENERAL MANAGER,

Ay
res Hotel Costa Mesa
Sue Cooke
TRE

ASURER, GENERAL MANAGER,

Re
sidence Inn by Marriott
Lori Ann Farrell Harrison SE

CRETARY , CITY MANAGER,

Ci
ty of Costa Mesa

DIRECTORS
Kevin Schjei GENE RAL MANAGER,

Av
enue of the Arts Hotel, A Tribute Portfolio Hotel
Naj Ekhlas
GENE

RAL MANAGER,

Be
st Western Plus
Annie Hsu
GENE

RAL MANAGER,

Cr
owne Plaza
Jeannie Blue
GENE

RAL MANAGER, VP OF OPERATIONS,

Hamp
ton By Hilton Costa Mesa Newport Beach

(f
ormerly Holiday Inn Express)
Benito Benitez
GENE
RAL MANAGER, Hilton
Nimisha Solanki
GENE
RAL MANAGER, OC Hotel Costa Mesa
Hugo Barba
GENE
RAL MANAGER, Marriott
OPEN
GENE
RAL MANAGER, Ramada
John Stephens
MAY
OR, City of Costa Mesa

ADVISORS
Brian Chuan SE NIOR DIRECTOR OF INTERNATIONAL &

DOME
STIC MARKETS, South Coast Plaza
David Haithcock
PRE

SIDENT & CEO,

Co
sta Mesa Chamber of Commerce
Michele Richards
CE
O, OC Fair & Event Center
STAFF
Paulette Lombardi-Fries PRE SIDENT
Anne-Marie Schiefer VI

CE PRESIDENT OF MARKETING
Chris Nuccio CMP
, DESTINATION SALES EXECUTIVE
Jessica Placentia
OPE

RATIONS MANAGER
Jasmine Garcia
SOC

IAL MEDIA AND CONTENT MANAGER
Macie Rae Brady
MANA

GER OF PUBLIC RELATIONS
232
TRAVELCOSTAMESA.COM
233

TRAVEL COSTA MESA

FINANCIAL ST ATEMENTS
June 30, 2024 and 2023
Attachment 2
234

TRAVEL COSTA MESA
Costa Mesa, California

FINANCIAL STATEMENTS
June 30, 2024 and 2023

CONTENTS
INDEPENDENT AUDITOR'S REPORT.

FINANCIAL STATEMENTS

STATEMENTS OF ASSETS, LIABILITIES AND NET ASSETS-CASH BASIS STATEMENTS OF REVENUE AND EXPENSES - CASH BASIS......................

NOTES TO FINANCIAL STATEMENTS
235
,4Crowe Crowe LLP
Independenj Meinbe+ C+owe Global

INDEPENDENT AUDITOR'S REPORT
Board of Directors
Travel Costa Mesa
Opinion
We have audited the financial statements of Travel Costa Mesa (the "Organization"), a California nonprofit corporation, which comprise the statement of assets, liabilities and net assets - cash basis as of June 30, 2024, and the related statement of revenue and expenses - cash basis for the year then ended and the related notes to the financial statements.

In our opinion, the accompanying financial statements present fairly, in all material respects, the statement of assets, liabilities and net assets - cash basis of the Organization as of June 30, 2024, and statement of revenue and expenses - cash basis for the year then ended in accordance with the cash basis accounting principles described in Note 1.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the Llnited States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Organization and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Emphasis of Maffer - Basis of Accounting
We draw the attention to Note I of the financial statements, which describes the basis of accounting. The financial statements are prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

Other Matter
The financial statements of the Organization for the year ended June 30, 2023 were audited by other auditors, who expressed an unmodified opinion on those statements on February 2, 2024.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. (Continued)

1. 236
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Organization's ability to continue as a going concern for one year from the date the financial statements are available to be issued.

Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
'In peforming an audit in accordance with GAAS, we:

Exercise professional judgment and maintain professional skepticism throughout the audit.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. Accordingly, no such opinion is expressed.

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Organization's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
11P
Crowe LLP
Los Angeles, California
December 20, 2024

2. 237

TRAVEL COSTA MESA

STATEMENTS OF ASSETS, LIABILITIES AND NET ASSETS - CASH BASIS Year ended June 30, 2024 and 2023
June 30,
2024 2023
ASSETS
Cash $ 3.131.781 3,178,747

LIABILITIES
Current liabilities
Commitments and contingencies

NET ASSETS
Net assets without donor restrictions
Total liabilities and net assets
3,131 ,781
$ 3.131.781
3,'178,747
$ 3,178,747

3. 238

TRAVEL COSTA MESA

STATEMENTS OF REVENUE AND EXPENSES - CASH BASIS
Year ended June 30, 2024 and 2023

CHANGE IN NET ASSETS WITHOUT DONOR RESTRICTIONS
Revenues and other income:

Business improvement area assessment, net of
handling fees
Employee retention credit
Interest income
Net revenues and other income
Expenses:

Hotel marketing funds (taken out of bank reserves) Marketing
City sponsorship funds (taken out of bank reserves) Sales department
Group incentive program
Salaries and benefits
General and administrative
Total expenses
(Decrease) increase in net assets without
donor restrictions
Net assets without donor restrictions, beginning of year Net assets without donor restrictions, end of year For The Years Ended June 30,
2024 2023
$ 3,286,105

5.230
3 291 335
463,049
1 ,585,828
164,000
150,827
74,000
708,742
191 855
3 338 301
(46,966)
3178747
$ 3.131.781
$ 3,168,239
47,7"l3
2 ,338
3 ,218,290
466,893
1 ,208,088
143,442
37,000
609,624
174,032
2,639,079
579,211
2,599,536
$ 3,"178,747

4. 239

TRAVEL COSTA MESA

NOTES TO FINANCIAL STATEMENTS
June 30, 2024 and 2023
NOTE 1- NATURE OF ACTMTIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Activities
Travel Costa Mesa (the "Organization") is a California non-profit corporation formed in 1995 to market the City of Costa Mesa (the "City") as a leisure travel and group business destination.

The vision of the Organization is to be a destination-marketing leader by supporting and selling the City's distinct visitor brand experiences and advocating community tourism benefits. The Organization's mission is to enhance and promote the City's brand experience, thus increasing visitor spending for industry and community economic viability, sustainability and quality of life.

The Organization is funded by the eleven member hotels that comprise the Business Improvement Area ("BIA") established by the City. The member hotels are Costa Mesa Marriott, Hilton Costa Mesa, Holiday Inn Express & Suites, Residence Inn by Marriott, Avenue of the Arts, A Tribute Portfolio Hotel, Ayres Hotel, The Westin South Coast Plaza, Ramada Inn and Suites Costa Mesa, Best Western Plus Newport Mesa Inn, Crowne Plaza, and QC Hotel Costa Mesa.

California state law provides that BIA assessments are to be used for the purposes specified in the authorizing resolution that established the assessment. The City's resolution that established the BIA stated that its purpose is to promote tourism to the City and to fund programs and activities that benefit the hotel and motel business within the City.

Basis of Presentation
The accompanying financial statements have been prepared on the cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States ofAmerica. Consequently, revenues are recognized when received rather than when earned, and expenses are recognized when disbursed rather than when the obligation is incurred.

Net assets and revenues, expenses, gains, and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets and changes therein are classified and reported as follows:
lAhthout donorrestrictions - Net assets that are not subject to donor-imposed stipulations. These assets are available to support the Organization's general activities and operations at the discretion of the Board of Directors.

With donorrestrictions - Net assets that are subject to donor-imposed restrictions. Some donor-imposed restrictions are temporary in nature, such as those that will be met by the passage of time or other events specified by the donor. Other donor-imposed restrictions are perpetual in nature, where the donor stipulates that such resources be maintained in perpetuity. Generally, the donors of these ASSETS permit the Organization to use all or part of the income earned on related investments for general or specific purposes.

As of and for the years ended June 30, 2024 and 2023, the Organization had no net assets with donor restrictions.
(Continued)

5. 240

TRAVEL COSTA MESA

NOTES TO FINANCIAL STATEMENTS
June 30, 2024 and 2023

NOTE I - NATURE OF ACTMTIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
Revenues are reported as increases in net assets without donor restrictions unless use of the related ASSETS is limited by donor-imposed restrictions. Expenses are reported as decreases in net assets without donor restrictions. Gains and losses on investments and other assets are reported as increases or decreases in net assets without donor restrictions unless their use is restricted by explicit donor stipulations or by law.

Tax Status
The Organization qualifies as a tax-exempt organization for Federal income taxes under Section 501 (c)(6) of the United States Internal Revenue Code and for California state income taxes under Section 23701 (d) of the California Revenue and Taxation Code; therefore, the Organization has no provision for federal or state income taxes. During the years ended June 30, 2024 and 2023, the Organization had no unrelated business income.

The Organization annually evaluates tax positions as part of the preparation of its exempt tax return. This process includes an analysis of whether tax positions the Organization takes with regard to a particular item of income or deduction would meet the definition of an uncertain tax position under current accounting guidance. The Organization believes its tax positions are appropriate based on current facts and circumstances. The Organization's policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. At June 30, 2024 and 2023, the Organization did not have any unrecognized tax benefits. The Organization is no longer subject to u.s.

Federal and state income tax examinations by tax authorities for tax years before 2020.

Use of Estimates
The preparation of financial statements in conformity with the cash basis of accounting requires management to make estimates and assumptions that affect certain reported amounts and disclosures.

Significant estimates made by the Organization's management include, but are not limited to, the allocation of expenses to program expenses. Actual results could differ from those estimates.

Revenues and Other Income
The City levies a special assessment on the eleven-member hotels in the BIA based on the sale of overnight guest room stays. For the fiscal years ended June 30, 2024 and 2023, the levy was three percent (3%).

The levy is transmitted by the hotels to the City; the City then aggregates the levies and sends a monthly remittance to the Organization, net of a one percent (1%) handling fee.

Other income amounts received in the year ended June 30, 2023 consist of employee retention credit amounts received from the Internal Revenue Service totaling $47,713. Such amounts are not conditional and have therefore been recorded as income.

Allocated Expenses
The costs of providing program activities and supporting services have been summarized on a functional basis in Note 7. The Organization incurs expenses that directly relate to, and can be assigned to, a specific program or supporting activity. The Organization also conducts a number of activities which benefit both its program objectives as well as supporting services. These costs, which are not specifically attributable to a specific program or supporting activity, are allocated by management on a consistent basis among program and supporting services benefited, based on either financial or nonfinancial data, such as headcount, occupancy or estimates of time and effort incurred by personnel. (Continued)

6. 241

TRAVEL COSTA MESA

NOTES TO FINANCIAL STATEMENTS
June 30, 2024 and 2023
NOTE 2 - LIQUIDITY AND AVAILABILITY
At June 30, 2024 and 2023, the Organization has $3,131,781 and $3,178,747, respectively, of financial assets available within one year of the date of the statement of assets, liabilities and net assets - cash basis to meet cash needs for general expenditures, all of which consist of cash. None of the financial assets are subject to donor or other contractual restrictions that make them unavailable for general expenditures within one year of the statement of assets, liabilities and net assets - cash basis. The Organization has a goal to maintain financial assets, which consist of cash on hand to meet twelve months of normal operating expenses. The Organization has a policy to structure its financial assets to be available as its general expenditures, liabilities, and other obligations come due.

Funding for the Organization is dependent on the hotel room nights booked in the City each year and the subsequent portion of the levy that is allocated through the City to the Organization. Annual revenue fluctuates depending on annual visitors to the City. As a result, the Organization closely monitors the monthly projected and received revenue to determine if any change needs to be made to budgeted expenditures.

NOTE 3 - CASH
Cash consists of demand deposits at the following institutions as of June 30:
2024 2023
Citizens Business Bank
Pacific Premier Bank
$ 549,314
2,582,467
$ 757,875
2,420,872
$ 3,131,781 u
The Organization maintains cash deposits at institutions which are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. At various times during 2024 and 2023, the Organization maintained balances in excess of FDIC limits. The Organization periodically reviews the quality of the financial institutions it has deposits with to minimize risk of loss.

NOTE 4 - HOTEL MARKETING FUNDS EXPENSE
During portions of each of the fiscal years ended June 30, 2024 and 2023, the Organization allocated $200 per room to each BIA member hotel for hotel-specific marketing purposes. The allocation subsidizes hotel- specific advertising and marketing efforts that may also include the Organization's logo. Vendor invoices are either paid by the hotel and reimbursed by the Organization or paid directly by the Organization.

Samples of advertising and marketing material is submitted showing the Organization's logo for reimbursement. For advertising or marketing material where the Organization's logo cannot be used, the Organization requests that the hotel partners use the following verbiage,"Hotel partner name is a proud partner of Travel Costa Mesa." Hotel marketing funds expense totaled $463,049 and $466,893 for fiscal years ended June 30, 2024 and 2023, respectively. If the hotels do not use all their allocated funds, the funds revert to the Organization.
(Continued)

7. 242

TRAVEL COSTA MESA

NOTES TO FINANCIAL STATEMENTS
June 30, 2024 and 2023
NOTE 5 - GROUP INCENTIVE PROGRAM
The Organization has a group incentive program which is used for certain qualifying groups and was created to assist the Organization's partners and the City with group business. The group incentive program funds totaled $74,000 and $37,000 during the years ended June 30, 2024 and 2023, respectively.

NOTE 6 - MARKETING EXPENSE
The Organization incurs marketing expenses related to its mission of promoting the City as a tourist destination. For the fiscal years ended June 30, 2024 and 2023, marketing expenses totaled $1,585,828 and $1,208,088, respectively.

Marketing expenses include online marketing, video and photography production, electronic collateral, print advertising, various promotions, and tradeshow costs.

NOTE 7 - ST ATEMENT OF FUNCTIONAL EXPENSES
The statement of functional expenses for the year ended June 30, 2024 is as follows:

Salaries and benefits
Marketing
Hotel marketing fi.inds
Online marketing
City sponsorship
Sales depafment
Group incentiw program
Office and copier leases
Trail, meetings, conferences and mileage
Accounting and fees
Insurance
Dues and subscriptions
Office supplies
Telephone and internet
Banking charges
Filing fee and state assessment
Postage
Parking
Recruiting seruces
Professional seruces
Total functional expenses
Program
Activities
570,525 $
6,883
463,049
1,578,945
164,000
150,827
74,000
38,696
61,246
$ 3,108,171
General and
Administrative Total
138,217 $
9,374
12,363
22,310
14,254
7,304
20,921
255
63 550
212
443
3,864
$ 230,130
708,742
6,883
463,049
i,578,945
164,000
150,827
74,000
48,070
61 ,246
12,363
22,310
14254
7 304
20 921
255
63 550
212
443
3,864
$ 3,338,301
(Continued)

8. 243

TRAVEL COSTA MESA

NOTES TO FINANCIAL STATEMENTS
June 30, 2024 and 2023
NOTE 7 - STATEMENT OF FUNCTIONAL EXPENSES, continued The statement of functional expenses for the year ended June 30, 2023 is as follows:

Salaries and benefits
Marketing
Hotel marketing funds
Online marketing
City sponsorship
Sales department
Group incenti* program
Office and copier leases
Trawl, meetings, conferences and mileage
Accounting and fees
Insurance
Dues and subscriptions
Office supplies
Telephone and internet
Banking charges
Filing fee and state assessment
Postage
Parking
Recruiting seruces
Professional seruces
Total functional expenses
Program
Activities
490,737 $
7,951
466,893
1,200,137
143,442
37,000
38,367
33,806
5,935
$ 2,424,268
General and
Administrative Total
118,887 $
9,280
13,800
21,359
12,345
11,591
11,397
335
28 317
281
855
14,336
$ 214,811
609,624
7,951
466,893
1,200,137
143,442
37,000
47, €Ei47
33,806
13,800
21359
12,345
11,591
17,332
335
28 317
281
855
14,336
$ 2,639,079
NOTE 8 - COMMITMENTS AND CONTINGENCIES
Indemnities
The Organization has made certain indemnities, under which it may be required to make payments to an indemnified party, in relation to certain actions or transactions. The Organization indemnifies its directors, officers, employees and agents, as permitted under the laws of the State of California. In connection with its facility lease, the Organization has indemnified its lessor for certain claims arising from the use of the facilities. The duration of the indemnities varies and is generally tied to the life of the agreement. These indemnities do not provide for any limitation of the maximum potential future payments the Organization could be obligated to make. Historically, the Organization has not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities in the accompanying statements of assets, liabilities and net assets - cash basis.

Operatinq Leases
The Organization has a lease for office space through October 2025. The Organization also has a lease for a color copier through September 30, 2028. Total rent expense for the fiscal years ended June 30, 2024 and 2023 totaled $48,070 and $47,647, respectively. (Continued)
g.
244

TRAVEL COSTA MESA

NOTES TO FINANCIAL STATEMENTS
June 30, 2024 and 2023
NOTE 8 - COMMITMENTS AND CONTINGENCIES (continued) Future minimum lease obligations as of June 30, 2024 consist of the following:

Litigation
Years Ending
June 30,
2025
2026
2027
2028
2029
44,492
16,068
1 ,804
1 ,804
376
ei4.544
In the ordinary course of business, the Organization may face various claims brought by third parties and they may, from time to time, make claims or take legal actions to assert their rights. Any of these claims could subject the Organization to costly litigation and, while the Organization generally believes that it has adequate insurance to cover many different types of potential liabilities, its insurance carriers may deny coverage or its policy limits may be inadequate to fully satisfy any damage awards or settlements. If this were to happen, the payment of any such awards could have a material adverse effect on the Organization's operations and financial position. Additionally, any such claims, whether or not successful, could damage the Organization's reputation and business.

NOTE 9 - EMPLOYEE BENEFIT PLAN
The Organization sponsors a defined contribution salary deferral plan (the "Plan") covering all employees.

Beginning in April 2012, the Board of Directors agreed to Safe Harbor contributions of 3% of the eligible employee's salary. During each of the fiscal years ended June 30, 2024 and 2023, Safe Harbor contributions totaled approximately $16,000 and $15,000, which are recorded in salaries and benefits in the accompanying statements of revenue and expenses - cash basis, respectively.

NOTE lO - RISKS AND UNCERT AINTIES
Due to the nature of the Organization's business, the Organization's revenue is entirely dependent on the City and the member hotels. The City established the BIA and collects the BIA levy from the eleven hotels in Costa Mesa and the member hotels are voluntary participants (see Note 1 ). A cancellation of the BIA or withdrawal of the member hotels would adversely and severely impact the Organization's financial position.

NOTE l1- SUBSEQUENT EVENTS
Management has evaluated and determined that no other events have occurred through December 20, 2024 the date that the financial statements were issued, which would require inclusion or disclosure in its financial statements, except as disclosed herein.

10. 245
Resolution No. 2025-xx Page 1 of 7

Attachment 3

RESOLUTION NO. 2025-xx

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, DECLARING ITS INTENTION TO LEVY AN ANNUAL ASSESSMENT FOR FISCAL YEAR 2025- 26 FOR A BUSINESS IMPROVEMENT AREA COVERING CERTAIN COSTA MESA HOTELS

AND MOTELS AND SETTING THE TIME AND PLACE FOR A PUBLIC HEARING ON THE

PROPOSED ANNUAL ASSESSMENT

THE CITY COUNCIL OF THE CITY OF COSTA MESA DOES HEREBY RESOLVE AS FOLLOWS:

WHEREAS, in ado pting the Parking and Business Improvement Area Law of 1989 (California Streets and Highways Code sections 36500, et seq .), the California Legislature authorized cities to levy assessments on businesses in order to promote economic revitalization and tourism, to create jobs, attract new businesses, and prevent erosion of business districts; and WHEREAS, on July 5, 1995, by Ordinance No. 95-9, the City Council adopted a business improvement area, commonly known as the Costa Mesa Tourism & Promotion Business Improvement Area (“BIA”), the purpose of which is to promote tourism to the City and to fund programs and activities that benefit the hotel and motel businesses within the City of Costa Mesa; and
WHEREAS, the eleven (11) hotels and motels listed in Exhibit A, attached hereto and incorporated herein by this reference, are currently subject to the assessment; and WHEREAS, the City Council appointed the general managers of the 11 hotels and motels subject to the assessment to serve as the advisory board as required by California Streets and Highways Code section 36530; and
WHEREAS, said advisory board is known as Travel Costa Mesa (“TCM”); and WHEREAS, the City Council has voted to continue the special assessment for the BIA each year since its inception, and it has been levied upon the 11 hotel and motel businesses listed in Exhibit A; and
WHEREAS, in January 2000, the City Council approved an increase in the assessment, raising the assessment from one percent (1%) to two percent (2%) based on the sale of overnight room stays; and
WHEREAS, in November 2010, the City Council approved an increase in the assessment, raising the assessment from two percent (2%) to three percent (3%) based on the sal e of overnight room stays; and
WHEREAS, the City desires to levy and collect a three percent (3%) assessment within the BIA for Fiscal Year 2024-2025; and
246
Resolution No. 2025-xx Page 2 of 7

Attachment 3

WHEREAS, this Resolution of Intention will commence proceedings under the Parking and Business Improvement Area Law of 1989 to levy the annual assessment of the Costa Mesa Tourism & Promotion Business Improvement Area for the 2025-26 Fiscal Year; and WHEREAS, the Agenda Report and its attachments for the May 7, 202 5 City Council meeting filed with the City Clerk set forth a detailed description of the activities to be provided in the 2025-26 Fiscal Year, the boundaries of the Business Improvement Area, the benefit zone of the area, and the proposed assessments to be levied upon the businesses within the area for the coming fiscal year.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Costa Mesa as follows:

Section 1. Intention; Assessment . The City Council hereby declares its intention to levy and collect assessments in the Costa Mesa Tourism & Promotion Business Improvement Area for Fiscal Year 20 25-26 pursuant to California Streets & Highways Code §§ 36500 et seq. The boundaries of the Costa Mesa Tourism & Promotion Business Improvement Area are the 11 motels and hotels listed in Exhibit A. The proposed amount of the annual assessment is three percent (3%) based on the sale of overnight room stays. New hotel and motel businesses commenced after the effective date of the resolution levying the assessment will be exempt from the levy of assessment, pursuant to California Streets & Highways Code § 36531.

Section 2. Annual Repor t. An annual report on the Costa Mesa Tourism & Promotion Business Improvement Area has been prepared by TCM, acting as the advisory board, as required by California Streets & Highways Code §§ 36533 and 36534. Said report is on file in the City Clerk’s Office.

Section 3. Types of Activities to Be Funded. The type or types of activities to be funded by and through the annual levy of assessments on businesses within the Costa Mesa Tourism & Promotion Council Business Improvement Area are specified in the referenced annual report and Exhibit B, attached hereto and incorporated herein.

Section 4. Reporting and Remitting to the City of Costa Mesa Finance Department. Each hotel/motel owner shall separate the Business Improvement Assessment from the Transient Occupancy Tax on guest billing statements. The specific term “Business Improvement Assessment” shall be included on the billing to identify the assessment amount. The hotel/motel owner shall collect and subsequently remit the assessment to the Costa Mesa Finance Department at the same time and manner as the Transient Occupancy Tax. A ten percent (10%) penalty and half percent (0.5%) interest will be assessed on late remittances.

Section 5 . Method and Basis of Levy . To allow each business owner to estimate the amount of the assessment to be levied against his or her business, the method and basis of 247
Resolution No. 2025-xx Page 3 of 7

Attachment 3

levying the assessment are set forth in the annual report relative to the Business Improvement Area, Ordinance No. 95-9, and Exhibit B.

Section 5. Time and Place of Public Hearing. The time and place of the public hearing on the levy of an annual assessment for Fiscal Year 2025-26 shall be 7:00 p.m. on June 4, 2025. At the public hearing set forth above, the testimony of all interested persons for or against the annual levy of the assessment for the Business Improvement Area, the extent of the area, and/or the furnishing of specific types of improvements or activities will be heard by the City Council.

Section 6. Protests. Consistent with California Streets & High ways Code §§ 36524 and 36525, the following rules shall apply to all protests:
(a) A protest may be made orally or in writing by any interested person. Any protest pertaining to the regularity or sufficiency of the proceedings shall be in writing and shall clearly set forth the irregularity or defect to which the objection is made. (b) Every written protest shall be filed with the City Clerk’s Office, Costa Mesa City Hall, 77 Fair Drive, Room 101, Costa Mesa, California 92626, at or before the time fixed for the public hearing as set forth above.
(c) The City Council may waive any irregularity in the form or content of any written protest, and, at the public hearing, may correct minor defects in the proceedings. (d) A written protest may be withdrawn in writing at any time before the conclusion of the public hearing.
(e) Each written protest shall contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the City as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the business. A written protest which does not comply with this section shall not be counted in determining a majority protest. (f) If written protests are received from the owners of businesses in the proposed Business Improvement Area which will pay fifty percent (50%) or more of the assessments to be levied and protests are not withdrawn so as to reduce the protests to less than the fifty percent (50%), no further proceedings on the proposal to continue to levy the Business Improvement Area assessment, as specified by this Resolution, shall be taken by the City Council for a period of one year from the date of the finding of a majority protest.
(g) If the majority protest is only against the furnishing of a specified type or types of improvement or activity within the Business Improvement Area, those types of improvements or activities shall be eliminated.
248
Resolution No. 2025-xx Page 4 of 7

Attachment 3

Section 7. Publication. The City Clerk shall cause this Resolution of Intention to be published once in a newspaper of general circulation in the City at least seven (7) days before the June 4, 2025 public hearing.

249
Resolution No. 2025-xx Page 5 of 7

Attachment 3

PASSED AND ADOPTED this _____ day of May, 2025.

John Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Brenda Green, City Clerk Kimberly Hall Barlow, City Attorney

STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss

CITY OF COSTA MESA )

I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that the above and foregoing is the original of Resolution No. 2025-xx and was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the _____ day of May, 2025, by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this ___ day of May, 2025.

Brenda Green, City Clerk
250
Resolution No. 2025-xx Page 6 of 7

Attachment 3

EXHIBIT A

The Business Improvement Area (“BIA”) benefit zone encompasses the entire City of Costa Mesa boundaries. It is anticipated that the entire City, including businesses and residents, will benefit from increased revenues generated by the activities financed by the BIA assessment.

The following businesses will be included in the BIA that is established pursuant to California Streets and Highways Code sections 36500, et seq., the businesses commonly known as:

Avenue of the Arts, A Tribute Portfolio Hotel

Property Address: 3350 Avenue of the Arts, Costa Mesa

Business Owner: Rosanna Inc.
3350 Avenue of the Arts
Costa Mesa, CA 92627

Property Owner: Rosanna Inc.
3350 Avenue of the Arts
Costa Mesa, CA 92627

Ayres Country Inn & Suites

Property Address: 325 Bristol Street, Costa Mesa

Business Owner: Newport Country Inn & Suites, Inc.
355 Bristol Street, Suite A
Costa Mesa, CA 92626

Property Owner: Newport Country Inn & Suites, Inc.
355 Bristol Street, Suite A
Costa Mesa, CA 92626

Best Western Plus Newport Mesa Inn

Property Address: 2642 Newport Boulevard, Costa Mesa

Business Owner: James Hsuen
Shang-Pu Lee
2642 Newport Boulevard,
Costa Mesa, CA 92627

Property Owner: James Hsuen
Shang-Pu Lee
2642 Newport Boulevard,
Costa Mesa, CA 92627
251
Resolution No. 2025-xx Page 7 of 7

Attachment 3

Crowne Plaza

Property Address: 3131 Bristol Street, Costa Mesa

Business Owner: Brighton Management
20342 SW Acacia St.

Newport Beach, CA 92660

Property Owner: Bright Bristol Street LLC
3131 Bristol Street
Costa Mesa, CA 92626

Hilton

Property Address: 3050 Bristol Street, Costa Mesa

Business Owner: Ashford TRS CM LLC
14185 Dallas Parkway, Suite 1100
Dallas, TX 75254

Property Owner: Remington Lodging & Hospitality LP
14185 Dallas Parkway, Suite 1100
Dallas, TX 75254

Holiday Inn Express Hotel & Suites

Property Address: 2070 Newport Boulevard, Costa Mesa

Business Owner: Narendra B. Patel
2070 Newport Blvd.

Costa Mesa, CA 92667

Property Owner: Narendra B. Patel
2070 Newport Blvd.

Costa Mesa, CA 92667

Costa Mesa Marriott

Property Address: 500 Anton Boulevard, Costa Mesa

Business Owner: Starwood Capital Group
591 West Putnam Avenue
Greenwich, CT 06830

Property Owner: HEI Hotels & Resorts
101 Merritt 7 Corporate Park, 1st Floor
Norwalk, CT 06851
252
Resolution No. 2025-xx Page 8 of 7

Attachment 3

OC Hotel Costa Mesa (Formerly BLVD Hotel)

Property Address: 2430 Newport Boulevard, Costa Mesa

Business Owner: Sai Hospitality Services, LLC
11556 Manchester Way
Porter Ranch, CA 91326

Property Owner: Sanjay Panchal
11556 Manchester Way
Porter Ranch, CA 91326

Ramada Inn & Suites Costa Mesa

Property Address: 1680 Superior Avenue, Costa Mesa

Business Owner: B.D. Inns Inc./Ramada Ltd.
1680 Superior Ave.

Costa Mesa, CA 92627

Property Owner: B.D. Inns Inc./Ramada Ltd.
1680 Superior Ave.

Costa Mesa, CA 92627

Residence Inn by Marriott

Property Address: 881 Baker Street, Costa Mesa

Business Owner: Marriott International
10400 Fernwood Rd.

Bethesda, MD 20817

Property Owner: BRE Select Hotels and Resorts
6201 15th Avenue
Brooklyn, NY 11219

The Westin South Coast Plaza Hotel

Property Address: 686 Anton Boulevard, Costa Mesa

Business Owner: Host Hotels & Resorts
6903 Rockledge Dr., Suite 1500
Bethesda, MD 20817

Property Owner: CJ Segerstrom & Sons
c/o South Coast Plaza
686 Anton Boulevard
Costa Mesa, CA 92626
253
Resolution No. 2025-xx Page 9 of 7

Attachment 3

EXHIBIT B

The BIA assessment will be used to fund Travel Costa Mesa (“TCM”). TCM will fund activities to promote tourism in Costa Mesa and will sponsor related tourist events that benefit the hotel and motel businesses within the City.

Revenue

A three percent (3%) levy will be assessed against each of the 11 hotels listed in Exhibit A, based on the net revenue from the sale of overnight room stays.

Business owners shall pay the assessment to the Costa Mesa City Finance Department on a monthly basis. A penalty and interest shall be assessed on late payments.

Note: New hotel and motel businesses commenced after the effective date of this resolution will be exempt from the levy of assessment.
254
Travel Costa Mesa | 151 Kalmus Drive, Suite C110 | Costa Mesa, CA 92626 | Ph: 714.786.8585 | Fax: 714.668.9350 April 30, 2025
To: Honorable Members of the Costa Mesa City Council
From: Paulette Lombardi-Fries, President Travel Costa Mesa Subject: Allocation of BIA Funds – Update
Dear Mayor and Members of the Council:

On behalf of Travel Costa Mesa and our Board of Directors, I am writing to inform you that, beginning with the upcoming fiscal year, the organization will discontinue allocating Business Improvement Area (BIA) assessment funds toward residential and neighborhood event programming, including the $164,000 previously provided to support City-hosted events and initiatives.

This decision follows a comprehensive review by the Travel Costa Mesa Board of Directors and reflects our ongoing commitment to steward the BIA funds in a manner that is focused on delivering the highest possible return on investment for our assessed lodging businesses. As part of that review, the Board reaffirmed the foundational intent of the BIA: to invest in programs that promote tourism, generate overnight visitation, and support the economic vitality of Costa Mesa’s hotel industry.

The Board concluded that future allocations of BIA funds should be prioritized for tourism marketing and destination development initiatives that are directly tied to overnight hotel stays and generate measurable visitor impact to the benefit of the assessed lodging businesses. Travel Costa Mesa remains committed to directing BIA assessment funds toward initiatives that benefit the City of Costa Mesa’s hotel industry.

Sincerely,
Paulette Lombardi-Fries
President
Travel Costa Mesa
Attachment 4
255

CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 25-239 Meeting Date: 5/6/2025
TITLE:

APPEAL OF THE PLANNING COMMISSION’S DECISION TO UPHOLD THE DIRECTOR OF DEVELOPMENT SERVICES DETERMINATION THAT CONDITIONAL USE PERMIT (CUP) PA-21- 23 TO ESTABLISH A CANNABIS STOREFRONT LOCATED AT 1687 ORANGE AVENUE (DBA KING’S CREW) HAS EXPIRED
DEPARTMENT: ECONOMIC AND DEVELOPMENT SERVICES DEPARTMENT/

PLANNING DIVISION
PRESENTED BY: GABRIEL VILLALOBOS, ASSISTANT PLANNER
CONTACT INFORMATION: GABRIEL VILLALOBOS, ASSISTANT PLANNER, (714) 754-5610 RECOMMENDATION:

Staff recommends the City Council:

1. Find that the appeal is not subject to the California Environmental Quality Act (CEQA) per California Public Resources Code Section 15268.

2. Uphold the Director of Development Services determination that Conditional Use Permit (CUP) PA-21-23 has expired pursuant to Costa Mesa Municipal Code Sections 13-29(k)(2) and CUP Condition of Approval No. 2.

256

City of Costa Mesa
Agenda Report

77 Fair Drive
Costa Mesa, CA 92626
Item #: 25-239 Meeting Date: 5/6/2025
TITLE: APPEAL OF THE PLANNING COMMISSION’S DECISION TO UPHOLD THE DIRECTOR OF DEVELOPMENT SERVICES DETERMINATION THAT CONDITIONAL USE PERMIT (CUP) PA-21-23 TO ESTABLISH A CANNABIS STOREFRONT LOCATED AT 1687 ORANGE AVENUE (DBA KING’S

CREW) HAS EXPIRED

DEPARTMENT: ECONOMIC AND DEVELOPMENT SERVICES DEPARTMENT/ PLANNING

DIVISION

PRESENTED BY: GABRIEL VILLALOBOS, ASSISTANT PLANNER

CONTACT INFORMATION: GABRIEL VILLALOBOS, ASSISTANT PLANNER, (714) 754-5610

RECOMMENDATION:

Staff recommends the City Council:

1. Find that the appeal is not subject to the California Environmental Quality Act (CEQA) per California Public Resources Code Section 15268.

2. Uphold the Director of Development Services determination that Conditional Use Permit (CUP) PA- 21-23 has expired pursuant to Costa Mesa Municipal Code Sections 13-29(k)(2) and CUP Condition of Approval No. 2.

APPLICANT OR AUTHORIZED AGENT:

The applicant/authorized agent is Dan Thompson on behalf of Gold Flora Partners Costa Mesa LLC and the property owner, Orange Ave Investors, LLC.

BACKGROUND:

CUP PA-21-23

Pursuant to Costa Mesa Municipal Code (CMMC) Sections 9 -494 and 13-200.93(c)(1), a conditional use permit (CUP) is required for the establishment of cannabis retail storefronts in Costa Mesa. On September 12, 2022, the Planning Commission approved CUP PA-21-23 and Resolution No. PC-2022- 22, to allow the establishment of a retail cannabis storefront at 1687 Orange Avenue (DBA King’s Crew), subject to conditions of approval and local and State regulations. The commercial building was previously occupied by La Cresta Cleaners (dry cleaner). Although no additional floor area was proposed to the existing commercial building, the project included both interior and exterior upgrades.

Project components also included site landscaping, providing eight offsite parking spaces at the adjacent shopping center, a bike rack and an employee shuttle service from a parking lot located at the business’s nearby headquarters.
257

Item #: 25-239 Meeting Date: 5/6/2025

Image 1 – Offsite Parking Location

The subject property is located on the south side of East 17 th Street near the intersection of East 17th Street and Orange Avenue. The site is zoned C1 (Local Business District) and is surrounded by other commercially zoned properties (C1, C2 - General Business District, C1 -S - Shopping Center District, and PDC - Planned Development Commercial). The site has a General Plan Land Use Designation of General Commercial. Existing development on the subject property consists of a 2,778 -square-foot single-story commercial building with five surface parking spaces. Access to the site is provided by an existing 18-foot-wide driveway from Orange Avenue. Existing businesses in the surrounding commercial centers consist of a variety of restaurants/bars, grocery stores, pharmacies, massage and beauty parlors, general retail, medical and general offices, fitness gym, automotive repair , and gas stations. The nearest residentially zoned properties (R2-HD; Multi-Family Residential High Density and R3; Multi-Family Residential District) are located to the south approximately 300 feet away from the subject property.

Image 2 – Street View Site Picture

258

Item #: 25-239 Meeting Date: 5/6/2025

A detailed description of the previously approved use is provided in the September 12, 2022, Planning Commission Agenda Report linked below. The meeting minutes and video are also linked below.

Report: https://costamesa.legistar.com/LegislationDetail.aspx?ID=5821813&GUID=E1045B22-9047- 49D5-BE43-C021EDE9D246
Minutes: https://costamesa.legistar.com/View.ashx?M=M&ID=922029&GUID=E44B3DAD-8712- 4445-B48D-F06CC6EE4B4B
Video: https://costamesa.granicus.com/player/clip/3899?view_id=14&redirect=true On May 1, 2023 , a n application for building permits for the subject project was submitted (BC23- 00238). There were four rounds of Building Department reviews between May 2023 and April 2024 to address needed corrections. On May 17, 2024, the Building Division informed the applicant that the building permit was ready to be issued and a “clean” set of plans for final stamping and payment of fees was needed for final permit issuance. On July 31, 2024, the Building Division again contacted the applicant and requested a clean set of plans for approval stamps and building permit issuance. The applicant did not provide the final set of plans for stamping and the building permit was never issued.

CUP Time Limits and Extensions

CUP Resolution Condition of Approval No. 2, which follows the language of CMMC Section 13 -29(k), states:
“Approval of the planning/zoning application is valid for two years from the effective date of this approval and will expire at the end of that period unless the applicant establishes the use by one of the following actions:
1) A building permit has been issu ed and construction has commenced, and has continued to maintain a valid building permit by making satisfactory progress as determined by the Building Official; or
2) A certificate of occupancy has been issued; or
3) The use is established and a business license has been issued.

A time extension can be requested no less than thirty (30) days or more than sixty (60) days before the expiration date of the permit and submitted with the appropriate fee for review to the Planning Division. The Director of Development Services may extend the time for an approved permit or approval to be exercised up to 180 days subject to specific findings listed in Title 13, Section 13-29 (k)(6). Only one request for an extension of 180 days may be approved by the Director. Any subsequent extension requests shall be considered by the original approval authority”.

The CMMC and CUP Condition of Approval No. 2 allows the applicant to, before the two-year expiration of the permit, request a time extension of up to 180 days , subject to the Director of Development Services approval and specific findings in CMMC 13 -29(k)(6), and also allows a subsequent time extension to be approved by the Planning Commission if needed for time beyond the aforementioned 180 days and initial two -year period. Neither the applicant nor anyone acting on their behalf filed a 259

Item #: 25-239 Meeting Date: 5/6/2025

written CUP extension of time, nor met any of the three aforementioned requirements to establish the use pursuant to CMMC 13 -29(k)(2)(b). In addition, CUP Condition of Approval No. 2 states that approval of the planning/zoning application is valid for two years from the effective date of the approval and will expire at the end of that period unless the applicant establishes the use pursuant to CMMC 13-29(k)(2)(b). Therefore, on S eptember 19, 2024, Conditional Use Permit Application PA -21-23 expired. On December 2, 2024, the City issued a notice of expiration to the applicant. In reviewing the notice of expiration, the City Attorney’s office included information on appealing the City’s determination of expiration and to giving the applicant an opportunity to share additional information on the factors leading to the expiration. The notice indicated that any appeal must be filed by 5:00 p.m. on December 9, 2024.

Appeal of Staff Decision to Planning Commission

On December 9, 2024, Laurie Holcomb (an owner of Gold Flora Partners Costa Mesa LLC ), filed an appeal of the City’s determination that the CUP had expired . The reasons for requesting appeal was stated as:
“Additional time is needed to address Southern California Edison’s comments regarding the power distribution to the building. SCE originally indicated that they would be replacing the pole transformer to accommodate the project. After further discussion, SCE changed their position and will be keeping the existing transformer with modifications. As a result, our current plans cannot be used and we will need to revise most of the existing circuits, lighting schedule, single line diagram and the pane schedule”.

Pursuant to CMM C Section 2 -300, Appeal and Review Procedure, “the purpose of this chapter is to provide an orderly and fair method of appeal and review of decisions of the staff, committees, commissions and council of the City”. The City’s appeal procedures also require that a decision on “planning matters ” pursuant to Title 13 be made by the Planning Commission (CMMC Section 2 - 309(2)). The City Attorney determined that the CUP expiration is a “planning matter” and subject to appeal.

The appeal was heard by the Planning Commission on February 24, 2025, after a continuation was granted by the Planning Commission from a previous hearing date scheduled on February 10, 2025. As discussed further below, the Planning Commission upheld the staff determination that the CUP PA-21- 23 had expired on a 6-0-1 vote, with Commissioner Dickson absent. On February 27, 2025, the applicant submitted an appeal of the Planning Commission decision to be reviewed by the City Council.

Planning Commission Decision
On February 24, 2025, the Planning Commission reviewed the applicant ’s appeal of the staff determination that the subject application ha d expired. After receiving staff’s presentation and recommendation, the Planning Commission asked questions of staff and then opened the public hearing.

The applicant spoke on the appeal request and the Planning Commission subsequently asked questions of the applicant/appellant. After Commission deliberations, Commissioner Zich made a motion to find that the appeal is not subject to CEQA per California Public Resources Code Section 15268, and to uphold the staff determination that the Conditional Use Permit PA-21-23 had expired. The motion was seconded by Commissioner Martinez. Commissioner Zich further stated that the Condition of Approval No. 2 was clear in establishing the expiration date and no information was presented by the applicants 260

Item #: 25-239 Meeting Date: 5/6/2025

to support overturning the expiration determination made by staff. Commissioner Martinez expressed that while unfortunate, the Planning Commission was not a policy setting body and must adhere to the City’s Municipal Code.

The final Resolution reflecting the February 24, 2025, Planning Commission action is provided as Attachment 3 to this report. The Planning Commission staff report and meeting minutes are provided as Attachments 4 and 5 respectively. The Planning Commission staff report, attachments and meeting video are provided at the links below:

 Planning Commission Staff Report and Attachments:
https://costamesa.legistar.com/LegislationDetail.aspx?ID=7144850&GUID=760F888B-B2F1- 4CEA-B6AD-9C2E0C1E93C9
 Planning Commission Meeting Video:
https://costamesa.granicus.com/player/clip/4216?view_id=14&redirect=true

Public Comment

No public comment letters opposing/supporting the requested appeal were submitted to the City prior to the Planning Commission meeting. During the public hearing, there were also no speakers in opposition or support of the appeal. The applicants’ consultants spoke on behalf of the project.

ANALYSIS:

Appeal of the Planning Commission’s Determination

On February 27, 2025, the applicant (Gold Flora Partners Costa Mesa, LLC) filed an appeal of the Planning Commission’s d ecision to uphold the staff determination that the CUP ha d expired. (The appeal application is included as Attachment 2 to this report.) The appeal application noted the following reason for the appeal:
“We are requesting time to update, process and value engineer the construction drawings per the direction of Southern California Edison and the City of Costa Mesa Water District”.

Similar to the original staff determination appeal, the applicant’s above assertion (reason for appeal) is not relevant to the matter of permit expiration. Since the applicant did not file an extension of time, the CMMC deems the permit expired. Importantly, the CMMC does not provide any mechanism to re - activate a land use permit after expiration; except, the submittal of a new CUP application. Pursuant to CMMC Section 13-29(k)(7), “after the expiration of the permit or approval, no further work shall be done on the site and no further use of the site shall occur until a new permit or approval, or other city permits or approvals are first obtained.”

The City Council’s review of this matter is generally limited to whether the staff determination is consistent with the applicable CMMC sections and project conditions of approval. Essentially, “did the applicant submit a timely request for a time extension”. If the City Council cannot determine that an extension of time was filed, th en the City Council should uphold the staff determination and the Planning Commission confirmation that the CUP application, pursuant to the CMMC, has expired.

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Item #: 25-239 Meeting Date: 5/6/2025

City Council “De Novo” Hearing
Pursuant to CMMC Chapter 9, Appeal and Review Procedures, the City Council shall conduct a new or “ de novo ” review of the matter. The City Council may exercise its independent judgment and discretion in making a decision, and the appeal hearing is not limited to the grounds stated for the review or the evidence that was previously presented to the Planning Commission. The City Council’s decision on the matter is the final decision.

ENVIRONMENTAL DETERMINATION:

As described in the September 12, 2022, Agenda Report and Resolution No. 2022 -22, the proposed cannabis storefront use is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15301 (Class 1), Existing Facilities. The determination that a CUP has expired is a “ministerial” decision and is not subject to CEQA pursuant to California Public Resources Code Section 21068.

ALTERNATIVES:

The City Council can consider the following decision alternatives:

1. Uphold the Planning Commission decision – The City Council may adopt the attached Resolution which upholds the Planning Commission's decision that the entitlement for the cannabis storefront has expired; or

2. Uphold the Planning Commission decision subject to conditions and/or modifications – As a “de novo” review, the City Council may uphold the Planning Commission's decision with specific project changes/modifications that are necessary to address City Council concerns; or

3. Continue the item – The City Council may continue the item to a future meeting to allow for modifications or additional analysis; or

4. Overturn the Planning Commission ’s project expiration determination – If the City Council believes that the project has not expired , the City Council may direct staff to prepare a Resolution reflecting the City Council’s findings.

FISCAL REVIEW:

There are no fiscal impacts to the Fiscal Year 2024-25 City Budget.

LEGAL REVIEW:

The City Attorney’s Office has reviewed this report and approves it as to form.

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Item #: 25-239 Meeting Date: 5/6/2025

PUBLIC NOTICE:

Pursuant to CMMC Section CMMC 2 -308 (Notice of Appeal or Review ), notice of the hearing for the appeal or review shall be given in the same manner as any required notice for the hearing at which the decision subject to the appeal or review was made. As provided with the original Planning Commission review, pursuant to CMMC Section 13-29(d), three types of public notification have been completed no less than 10 days prior to the date of the public hearing:

1. Mailed notice. A public notice was mailed to all property owners and occupants within a 500 - foot radius of the project site on Wednesday, April 2 3, 2025 . The required notice radius is measured from the external boundaries of the property.

2. On-site posting. A public notice was posted on each street frontage of the project site on Thursday, April 24, 2025.

3. Newspaper publication. A public notice was published once in the Daily Pilot newspaper on Friday, April 25, 2025.

Any public comments received prior to the May 6, 2025, City Council meeting, may be viewed at this link: CITY OF COSTA MESA - Calendar (legistar.com)

CITY COUNCIL GOALS AND PRIORITIES:

This item is administrative and therefore is not applicable to City Council goals and priorities.

CONCLUSION:

Land use and building permit expirations serve to ensure that construction projects are completed within a reasonable timeframe, preventing prolonged commercial vacancies and disruptions to the community by prompting project owners to actively progress and finish their work, rather than letting projects linger indefinitely. Permit expirations also assist in maintaining safety standards by requiring re-evaluation of the project if significant time passes without substantial progress. Both the CMMC and the project conditions of approval include specific regulations related to expiration of the subject permit.

Included in these regulations, time extensions are permitted; however, neither the applicant nor anyone acting on their behalf requested a CUP extension and therefore both the City staff and the Planning Commission determined the land use permit expired pursuant to the CMMC.

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Resolution No. 2025-xx Page 1 of 3

RESOLUTION NO. 2025-xx

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA,

CALIFORNIA, UPHOLDING THE DIRECTOR OF ECONOMIC AND DEVELOPMENT SERVICES DETERMINATION THAT CONDITIONAL USE PERMIT PA -21-23 TO ESTABLISH A CANNABIS STOREFRONT LOCATED AT 1 687 ORANGE AVENUE (KING’S CREW) HAS EXPIRED

THE CITY COUNCIL OF THE CITY OF COSTA MESA HEREBY FINDS AND DECLARES AS FOLLOWS:

WHEREAS, appeal application PAPL-25-0001 was filed by Laurie Holcomb, representing Gold Flora Partners Costa Mesa LLC, and the pro perty owner, Orange Ave Investments, LLC, requesting an appeal of the Director of Development Services determination that Conditional Use Permit PA-21-23 to operate a cannabis retail storefront business within an existing 2,778-square-foot commercial build ing located at 1687 Orange Avenue has expired;
WHEREAS, a duly noticed public hearing was held by the Planning Commission on September 12, 2022 with all persons having the opportunity to speak for and against the Conditional Use Permit , and the project w as approved by the Planning Commission on a 5-2 vote;
WHEREAS, Costa Mesa Municipal Code Section 13 -29(k)(2)(a) and Condition of Approva l No. 2 , approval of the planning application is valid for two years from the effective date and expires at the end of that period unless the applicant establishes the use by one of the following actions: 1) a building permit has been issued and construction has commenced, and has continued to maintain a valid building permit by making satisfactory progress as determined by the Building Official, 2) a certificate of occupancy has been issued, or 3) the use is established and a business license has been issued;
WHEREAS, as of September 20, 2024 , two years passed from the effective date of the CUP , and the application expire d as none of the required actions for extension or establishing the use were tak en, nor has the applicant filed for an extension of time;
WHEREAS, the City issued a Notice of Expiration on December 2, 2024; ATTACHMENT 1
264
Resolution No. 2025-xx Page 2 of 3

WHEREAS, an appeal of the Director of Developm ent Services determination of the expiration of the CUP was filed on December 9, 2024; WHEREAS, a duly noticed public hearing was held b y the Planning Commission on February 24, 2025 with all persons having the opportunity to speak for and against the appeal, and the appeal was denied by the Planning Commission on a 6- 0-1 vote;
WHEREAS, the determination that a Conditional Use Permit has expired based on standard applicable regulations of the Costa Mesa Municipal Code (CMMC) and project conditions of app roval is a “ministerial” decision and is therefore exempt from the California Environmental Quality Act pursuant to California Public Res ources Code Section 15268;
WHEREAS, an appeal of the P lanning Commission’s decision to uphold the Director of Economic and Development Services determination that Conditional Use Permit PA-21-23 has expired was filed on February 27, 2025; WHEREAS, a duly noticed public hearing was held by the City Council on April 15 , 2025 with all persons having the opportunity to speak for and against the appeal;
NOW, THEREFORE, based on applicable evidence in the record , project conditions of approval and regulations pursuant to the Cost Mesa Municipal Code , the City Council hereby DENIES the appeal and upholds the Director of Economic and Development Services determination that Conditional Use Permit PA-21-23 expired.

BE IT FURTHER RESOLVED that if any se ction, division, sentence, clause, phrase or portion of this resolution, or the document in the record in support of this resolution, are for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining provisions.

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Resolution No. 2025-xx Page 3 of 3

PASSED AND ADOPTED this 6th day of May, 2025.

_____________________________
John Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

________________________ _____________________________ Brenda Green, City Clerk Kimberly Hall Barlow, City Attorney

STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss

CITY OF COSTA MESA )

I, BRENDA GREEN, City Clerk of the City of Co sta Mesa, DO HEREBY CERTIFY that the above and foregoing is the original of Resolution No. 2024-xx and was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 6th day of May 2025, by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

IN WITNESS WHEREOF, I have hereby set my h and and affixed the seal of the City of Costa Mesa this 7th day of May 2025.

___________________________
Brenda Green, City Clerk
266
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Cost-a'
City of Costa Mesa
Appeal of Planning Commission Decision:
$1,220.00 (ner 1
$3,825.00 (ner 2)
€ A$6p9pOe.aoloo(fTNleorn-IP,Ianning Commission Decision:

Applicant Name"
Address
Phone
$3,825.00 (Tier 2)a

APPLICATION FOR APPEAL OR REVIEW
Gold Flora Partners Costa Mesa, LLC (Kings Crew Costa Mesa) 3165 Red Hill Ave, Costa Meas, CA
949-252-1 908 ext 300
REQUEST FOR: [ZI APPEAL @REVIEW"
Decision of which appeal or review is requested: (give application number, if applicable, and the date of the decision, if known.)
Conditional Use Permit PA-2'l-23, 1687 0range Ave, Costa mesa CA Planning Commission/Appeal of the Directors of Development Services 25-196 decison DeC!S!On bY Planning Commission
Reasons for requesting appeal or review:
"If you are serving as the agent for another person, please identify the person you represent and provide proof of authorization. "Review may be requested only by the City Council or City Council Member.

For office use only - do not write below this line SCHEDULED FOR THE CITY COUNCIL/PLANNING COMMISSION MEETING OF:

If appeal or review is for a person or body other than City Council/Planning Commission, date of hearing of appeal or review Updated April 2020
' Indudes owners and/or occupants of a properFy )ocated within 500 feet of projeck site (excluding owners andjor occupants of the project site). o Includes the project applicant, owners and/or occupants of the project site, and owners and/or occupants of a property located greater than 500 feet from the project site.

ATTACHMENT 2
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Resolution No. 2025-04 Page 1 of 3
RESOLUTION NO. PC-2025-04

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY

OF COSTA MESA, CALIFORNIA, TO DENY THE APPEAL AND

UPHOLD THE DIRECTOR OF DEVELOPMENT SERVICES

DETERMINATION THAT CONDTIONAL USE PERMIT
APPLICATION PA-21-23 FOR A RETAIL CANNABIS
STOREFRONT BUSINESS LOCATED AT 1687 ORANGE AVENUE
(KING’S CREW) HAS EXPIRED

THE PLANNING COMMISSION O F THE CI TY O F COSTA MESA, CALIFORNIA HEREBY FINDS AND DECLARES AS FOLLOWS:

WHEREAS, appeal application PAPL-25-0001 was filed by Laurie Holcomb, representing Gold Flora Partners Costa Mesa LLC, and the property owner, Orange Ave Investments, LLC, requesting an appeal of the Director of Development Services determination that Conditional Use Permit PA-21-23 to operate a cannabis retail storefront business within an existing 2,778-square-foot commercial building located at 1687 Orange Avenue has expired;
WHEREAS, a duly noticed public hearing was held by the Planning Commission on September 12, 2022 with all persons having the opportunity to speak for and against the Conditional Use Permit, and the project was approved by the Planning Commission on a 5-2 vote;
WHEREAS, Costa Mesa Municipal Code Section 13-29(k)(2)(a) and Condition of Approval No. 2, states that the approval of the planning application is valid for two
years from the effective date and expires at the end of that period unless the applicant establishes the use by one of the following actions: 1) a building permit has been issued and construction has commenced, and has continued to maintain a valid building permit by making satisfactory progress as determined by the Building Official, 2) a certificate of occupancy has been issued, or 3) the use is established and a business license has been issued;
WHEREAS, as of September 20, 2024, two years passed from the effective date of the CUP, and the application expired as none of the required actions for extension or establishing the use were taken, nor has the applicant filed for an extension of time; WHEREAS, the City issued a Notice of Expiration on December 2, 2024; ATTACHMENT 3
268
Resolution No. 2025-04 Page 2 of 3
WHEREAS, an appeal of the Director of Development Service s determination of the expiration of the CUP was filed on December 9, 2024; WHEREAS, a duly noticed public appeal hearing was held by the Planning Commission on February 10, 2025 with all persons having the opportunity to speak for and against the appeal;
WHEREAS, the determination that a Conditional Use Permit has expired based on standard applicable regulations of the Costa Mesa Municipal Code (CMMC) and project conditions of approval is a “ministerial” decision and is therefore exempt from the California Environmental Quality Act pursuant to California Public Resources Code Section 15268; NOW, THEREFORE, based on applicable evidence in the record, project conditions of approval and regulations pursuant to the Cost Mesa Municipal Code, the Planning Commission hereby DENIES the appeal and upholds the Director of Development Services determination that Conditional Use Permit PA-21-23 is expired.

BE IT FURTHER RESOLVED that if any section, division, sentence, clause, phrase or portion of this resolution, or the document in the record in support of this resolution, are for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining provisions.

PASSED AND ADOPTED this 10th day of February, 2025.
269

STATE OF CALIFORNIA )
COUNTY OF ORANGE )ss

CITY OF COSTA MESA )
I, Scott Drapkin, Secretary to the Planning Commission of the City of Costa Mesa, do hereby certify that the foregoing Resolution No. PC-2025-04 was passed and adopted at a regular meeting of the City of Costa Mesa Planning Commission held on February 10, 2025 by the following votes:

AYES: Harlan, Zich, Andrade, Klepack, Martinez, Rojas
NOES: None
ABSENT: Dickson
ABSTAIN: None
Scott Drapkin cretary
Costa Mesa Planning Commission
Resolution No. 2025-04 Page 3 of 3
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PLANNING COMMISSION

AGENDA REPORT
MEETING DATE: February 24, 2025 ITEM NUMBER: PH-2 SUBJECT: APPEAL OF THE DIRECTOR OF DEVELOPMENT SERVICES DETERMINATION THAT CONDITIONAL USE PERMIT PA -21-23 TO ESTABLISH A CANNABIS STOREFRONT LOCATED AT 1687
ORANGE AVENUE (KING’S CREW) HAS EXPIRED

FROM: ECONOMIC AND DEVELOPMENT SERVICES

DEPARTMENT/PLANNING DIVISION

PRESENTATION BY: GABRIEL VILLALOBOS, ASSISTANT PLANNER

FOR FURTHER

INFORMATION
CONTACT:

GABRIEL VILLALOBOS
714-754-5610
[email protected]

RECOMMENDATION:

Staff recommends the Planning Commission adopt a Resolution to:

1. Find that the appeal is not subject to the California Environmental Quality Act per California Public Resources Code Section 15268; and

2. Uphold the Director of Development Services determination that Conditional Use Permit PA-21-23 has expired pursuant to Costa Mesa Municipal Code Sections 13-29(k)(2) and Conditional Use Permit Condition of Approval No. 2.

APPLICANT OR AUTHORIZED AGENT:

The applicant/authorized agent is Laurie Holcol mb on behalf of Gold Flora Pa rtners Costa Mesa LLC and the property owner, Orange Ave Investors, LLC.

ATTACHMENT 4
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BACKGROUND:

Pursuant to Costa Mesa Municipal Code (CMMC) Sections 9-494 and 13-200.93(c)(1), a conditional use permit (CUP) is required for the establishment of cannabis retail storefronts in Costa Mesa. On September 12, 2022 , by a vote of 5-2, the Planning Commission approved CUP PA-21-23 and Resolution No. PC -2022-22, t o allow the establishment of a retail cann abis storefront at 1 687 Orange Avenue , subject to conditions of approval and local and State regulations.

A detailed description of the p roposed use is provided in the Septem ber 12, 2022, Planning Commission Agenda Report linked below. The meeting minutes and video are also linked below.

• September 12, 2022 Planning Commission Agenda Report

• September 12, 2022 Planning Commission Minutes
• September 12, 2022 Planning Commission Video

As described further below, Section 13-29(k)(2)(a) of the CMMC and project Resolution Condition of A pproval N o. 2 establishes an expiration date of two years from the effective date of the CUP approval if specific actions by the applicant have not occurred.

If the actions have not occurred and/or not expected to occur timely, the CMMC also permits an extension of time process based on the filing by the applicant a written request for an extension of time. The applicant did not file for an extension of time and on September 19, 2024, the application expired pursuant to the CMMC and a project condition of approval.

Public Hearing Continuation

On February 10, 2025, a Planning Commission public hearing was held which included this item on the agenda. Prior to the hearting date, the applicant requested a continuance of the item to allow for additional time to research records and correspondences to staff regarding the permit expiration. The Planning Commission approved the request for continuation to the February 24, 2025, Planning Commission hearing by a vote of 7-0. As of the date this report was written, staff has not received any additional applicant submittal/information.

ANALYSIS

Application for Appeal

Pursuant to CMMC Section 2-300 (Appeal and Review Procedure), “the purpose of this chapter is to provide an orderly and fai r method of appeal and review of decisions of the staff, committees, commissions and counci l of the C ity”. The City ’s appeal 272
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procedures also requires that a decision on planning matters pursuant to Title 13 shall be made by the Planning Commission.

On December 9, 2024, Laurie Holcomb, an owner of Gold Flora Partners Costa Mesa LLC, filed an appeal of the City’s planning mater decision that the CUP had expired ; provided as Attachment 2 to this report. The “reasons for requesting appeal” was stated as:

“Additional time is needed to address Southern California Edison’s comments regarding the power distribution to the building. SCE o riginally indicated that they would be replacing the pole transformer to accommodate the project. After further discussion, SCE changed their position and will be keeping the existing transformer with modifications. As a result, our current plans cannot be used and we will need to revise most of the existing circuits, lighting schedule, single line diagram and the pane schedule”.

Time Limits and Extensions

Project Resolution Condition of Approval No. 2, which follows the language of CMMC Section 13-29(k), states:

Approval of the planning/zoning application is valid for two years from the effective date of this approval and will expire at the end of that period unless the applicant establishes the use by one of the following actions:

1) A building permit has been issued and construction has commenced, and has continued to maintain a valid building permit by making satisfactory progress as determined by the Building Official; or

2) A certificate of occupancy has been issued; or

3) The use is established and a business license has been issued.

A time extension can be requested no less than thirty (30) days or more than sixty (60) days before the expiration date of the permit and submitted with the appropriate fee for review to the Planning Division. The Director of Development Services may extend the time for an approved permit or approval to be exercised up to 180 days subject to specific findings listed in T itle 13, Section 13- 29 (k)(6). Only one request for an extension of 180 days may be approved by the Director. Any subsequent extension requests shall be considered by the original approval authority.

An application for building permits for the subject project was originally submitted on May 1 , 202 3, under application B C23-00238. There were four rounds of Building Department review between May 2023 and April 2024 to address the City’s corrections. 273
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On May 1 7, 2024, t he Building Technician requested a “clean” set of plans for final stamping (approval). On July 31, 2024, the Building Technician again requested a clean set of plans for final approval. The applicant did not provide the final set of plans for stamping and the building permit fees have not been paid in full.

As indicated above, t he CMMC and project Condition of Approval No. 2 allows the applicant to, before the two-year expiration of the permit, request a time extension of up to 180 days subject to the Director of Development Services approval and specific findings in CMMC 13- 29(k)(6), and also allows a s ubsequent time extension to be approved by the Planning Commission if needed for time beyond the aforementioned 180 days and initial two-year period. The applicant nor anyone act ing on their behalf filed a written CUP extension of time, nor met any of the three requirements to establish the use pursuant to CMMC 13-29(k)(2)(b) and Condition of Approval No. 2. Therefore, on September 19, 2024, Conditional Use Permit Application PA-21-23 expired, and on December 2, 2024, the City issued a notice of expiration to the applicant.

GENERAL PLAN CONFORMANCE

As described in the September 12, 2022, Agenda Report, the proposed use is consistent with the City of Costa Mesa 2015-2035 General Plan.

ENVIRONMENTAL DETERMINATION

As described in the September 12, 2022, Ag enda Report and Resolution No. 2022- 22, the proposed cannabis storefront use is categorically exempt from the provisions of the California Environmental Qualit y Act (CEQA) per CEQA Guidelines Section 15301 (Class 1), Existing Facilities.

The determination that a CUP has expired is a “ministerial” decision and is not subject to the California Environmental Quality Act pursuant to California Public Resources Code Section 21068.

LEGAL REVIEW

The draft Resolution has been approved as to form by the City Attorney’s Office.

PUBLIC NOTICE

Pursuant to CMMC Section CMMC 2-308 (Notice of Appeal or Review), notice of the hearing for the appeal or review shall be given in the same manner as any required notice for the hearing at which the decision subject to the appeal or review was made.

As provided with the original Planning Commission review, pursuant to CMMC Section 13-29(d), three types of public notification have been completed no less than 10 days prior to the date of the public hearing:
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1. Mailed notice. A public notice was mailed to all property owners and occupants within a 500- foot radius of the p roject site. The required notice radius is measured from the external boundaries of the property.

2. On-site posting. A public notice was posted on each street frontage of the project site.

3. Newspaper publication. A public notice was published once in the Daily Pilot newspaper.

As of this report, no written public comments have been received. Any public comments received prior to the February 10, 2025, Planning Commission meeting will be provided separately.

CONCLUSION

Land use and building permit expirations serve to ensure that construction projects are completed within a reasonable timeframe, preventing prolonged disruptions to the community by prompting project owners to actively progress and finish their work, rather than letting projects linger indefinitel y. Permit expirations also assist in maintaining safety standards by requiring re-evaluation of the project if significant time passes without substantial progress.

Both the CMMC and the project conditions of app roval include sp ecific regulations related to expiration of the subject permit . I ncluded in th ese regulations, time extensions are permitted; however, the applicant nor anyone acting on their behalf requested a CUP extension and therefore the land use permit expired pursuant to the CMMC.

The applicant asserts that the “ reason for requesting appeal” is due to project development issue related to project associated “ power distribution to t he building”; however, this “ reason” is not relevant to the matter of permit expiration. Since the applicant did not file an extension of ti me, the CMMC requires th at the permit be expired. Importantly, the CMMC does not provide any mechanism to re-activate a land use permit after expiration; except, the re -submittal of a new application . Pursuant to CMMC Section 13-29(k)(7), “after the expiration of the permit or approval, no further work shall be done on the site and no further use of the site shall occur unt il a new permit or approval, or other city permits or approvals are first obtained”.

The Planning Commission review of this matter is generally limited to if the Director of Development Services determination is consistent with the applicable CMMC sections and project conditions of approval. Essentially, “did the applicant submit a request for a time extension”. If the Planning Commission cannot determine that an extension of time was filed, than the Planning Commission should uphold the Director of Development Services determination that the CUP application pursuant to the CMMC is expired. 275
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ATTACHMENTS

1. Draft Resolution

2. Appeal Application

3. Notice of Expiration of CUP

4. Request for Continuation

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CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 25-283 Meeting Date: 5/6/2025
TITLE:

CAPITAL ASSET NEEDS (CAN) ORDINANCE EMERGENCY EXCEPTION AND CAPITAL IMPROVEMENT PROGRAM (CIP) PROJECT DEFERRALS - FISCAL YEAR 2024-25 DEPARTMENT: PUBLIC WORKS DEPARTMENT/FINANCE DEPARTMENT
PRESENTED BY: RAJA SETHURAMAN, PUBLIC WORKS DIRECTOR AND CAROL MOLINA,

FINANCE DIRECTOR
CONTACT INFORMATION: RAJA SETHURAMAN, PUBLIC WORKS DIRECTOR (714) 754-5343 RECOMMENDATION:

Staff requests the City Council:

1. Authorize the “Emergency Exception” clause of the Capital Asset Needs Ordinance under Section 2-209.2 (a)(2), Economic Downturn, for Fiscal Year 2024-25.

2. Provide direction on which approved projects may be deferred to help address the General Fund revenue shortfall resulting from the current economic downturn.

3. Approve a financial plan to reinstate the $2.9 million in deferred projects by:
a. Prioritizing funding in FY 2025-26 if revenues exceed expectations, and if needed. b. Reinstate the funding over a 10-year period for fiscal years that revenues exceed expenditures to ensure a fiscally sustainable General Fund budget.

BACKGROUND:

The City Council at their regular meeting on September 15, 2015, adopted the Capital Asset Needs (CAN) Ordinance (Attachment 1), requiring the allocation of a minimum of five percent (5%) of the annual General Fund revenues to Capital Fund 401. While the City met this requirement during the budget process for Fiscal Year 2024-25, the City’sGeneral Fund revenues are coming in lower than expected. This required several actions from staff to reduce operating expenditures to achieve a balanced budget.

Upon further in-depth fiscal analysis, the Finance Department determined that an additional $3.6 million in savings are needed. Staff is proposing to achieve this by deferring approximately $2.9 million in General Fund Capital Improvement Projects (CIP) and by funding the street sweeping program entirely with Gas Tax, thereby reducing the General Fund street sweeping expenditures by approximately $0.7 million.