Costa Mesa City Council
June 3, 2025

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File #: 25-310 Meeting Date: 6/3/2025
allocations. The City is proposing that the FY 2025-26 RMRA funding be allocated towards the construction of a roadway rehabilitation project along Harbor Boulevard (from MacArthur Boulevard to South Coast Drive and from Gisler Avenue to Baker Street), that would not have otherwise been funded. In conjunction with roadway rehabilitation, staff will explore opportunities to incorporate any feasible bicycle and pedestrian improvements along this corridor.

SB 1 requires that the project list include the following components: description and location of the proposed project, a proposed schedule for its completion, and the estimated useful life of the improvement. The required project components are reflected in the proposed resolution. This improvement project will benefit all the residents and businesses in the community and will also be included in the FY 2025-26 Capital Improvement Program (CIP) budget for City Council adoption.

ALTERNATIVES:

The City Council may elect not to adopt the proposed resolution. Staff does not recommend this action since this may cause potentially more expensive repairs in the future.

FISCAL REVIEW:

The City is projected to receive an estimated $2,951,612 in FY 2025-26 from RMRA funding based on the January 2025 State Department of Finance statewide RMRA revenue projections to fund the project. The approved project will be included in the Proposed FY 2025-26 CIP budget, RMA Fund (Fund 251)
LEGAL REVIEW:

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

CITY COUNCIL GOALS AND PRIORITIES:

This project supports the following City Council goals:
· Maintain and enhance the City’s infrastructure, facilities, equipment, and technology. · Strengthen the Public’s safety and improve the quality of life.

CONCLUSION:

Staff recommends the City Council adopt Resolution No. 2025-xx, approving the Harbor Boulevard Roadway Rehabilitation Project, (from MacArthur Boulevard to South Coast Drive and from Gisler Avenue to Baker Street) for funding with Road Maintenance and Rehabilitation Account (RMRA) revenues for Fiscal Year 2025-26.

134
ATTACHMENT 1

Resolution No. 2025-xx Page 1 of 4

RESOLUTION NO. 2025-xx

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA, ADOPTING A LIST OF PROJECTS FOR FISCAL YEAR 2025-26 FUNDED BY S ENATE BILL 1 (SB 1), THE ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017

THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA DOES HEREBY FIND AND DECLARE AS FOLLOWS:

WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the Legislature and signed into law by the Governor in April 2017 to address the significant multi -modal transportation funding shortfalls statewide; and
WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of the City are aware of the projects proposed for funding in the community and which projects have been completed each fiscal year; and WHEREAS, the City must adopt a list of all projects proposed to receive funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and
WHEREAS, the City will receive an estimated $2,951,612 in RMRA funding in Fiscal Year 2025-26 from SB 1; and
WHEREAS, this is the ninth year in which the City of Costa Mesa is receiving SB 1 funding. It will enable the City to continue essential road maintenance and rehabilitation projects and increase access and mobility options for the traveling public that would not have otherwise been possible without SB 1; and
WHEREAS, the City has undergone a robust public process to ensure public input into our community’s transportation priorities/the project list; and WHEREAS, the City used a Pavement Management System to develop the SB 1 project list to ensure revenues are being used on the most high-priority and cost-effective projects that also meet the community’s priorities for transportation investment; and 135
ATTACHMENT 1

Resolution No. 2025-xx Page 2 of 4

WHEREAS, the funding from SB 1 will help the City maintain and rehabilitate one local street and road and provide resources for similar projects in the future; and WHEREAS, the 2023 California Statewide Local Streets and Roads Needs Assessment found that the City’s streets and roads are in an overall good condition, with some streets identified in poor condition, and this revenue will help the City increase the quality of such streets and assist in bringing citywide streets and roads into an excellent condition; and
WHEREAS, the SB 1 project list and overall investment in local streets and roads infrastructure, with a focus on basic maintenance and safety, investing in complete streets infrastructure, and using cutting- edge technology, materials and practices , will have significant positive co-benefits statewide.

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

Section 1. The foregoing recitals are true and correct.

Section 2. The Fiscal Year 202 5-26 list of project s planned to be funded with Road Maintenance and Rehabilitation Account revenues includes:

FY 2025-26 List of Project(s)

Project Title: Harbor Boulevard (MacArthur Boulevard to South Coast Drive and from Gisler Avenue to Baker Street)

Project Description: This project will include rehabilitation and repair of the existing pavement and aims to enhance bicycle facilities and pedestrian access. Striping, markings, and bicycle facilities will be consistent with the City’s Active Transportation Plan (ATP). The proposed RMRA funding, programmed for the
construction phase, will enable the transition of Harbor Boulevard to be a more complete street that promotes Active Transportation. These RMRA funds will be used towards
rehabilitation of Harbor Boulevard, (MacArth ur Boulevard to South Coast Drive and from Gisler Avenue to Baker Street)

Proposed Schedule for
Construction:

Estimated Useful Life of
Improvement:

Estimated Start Date: June 2026
Estimated Completion Date: September 2026

10 years

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ATTACHMENT 1

Resolution No. 2025-xx Page 3 of 4

PASSED AND ADOPTED this 3rd day of June, 2025.

_____________________________
John Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

________________________ _____________________________ Brenda Green, City Clerk Kimberly Hall Barlow, City Attorney 137
ATTACHMENT 1

Resolution No. 2025-xx Page 4 of 4

THIS PAGE IS RESERVED FOR CITY CLERK’S OFFICE

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 t he 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 3rd day of June, 2025, by the following roll call vote, to wit:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the City of Costa Mesa this 3rd day of June, 2025.

________________________
Brenda Green, City Clerk

138

CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 25-319 Meeting Date: 6/3/2025
TITLE:

BUSINESS IMPROVEMENT AREA (BIA) REAUTHORIZATION TO LEVY ANNUAL ASSESSMENT DEPARTMENT: CITY MANAGER’S OFFICE
PRESENTED BY: HADASSA JAKHER, ASSISTANT TO THE CITY MANAGER CONTACT INFORMATION: HADASSA JAKHER, ASSISTANT TO THE CITY MANAGER, (714) 754-4885
RECOMMENDATION:

Staff recommend the City Council:

1. Conduct a public hearing regarding the Business Improvement Area (BIA) reauthorization and levy of the annual assessment for Fiscal Year 2025-2026.

2. Adopt Resolution No. 2025-XX, confirming the annual report filed by Travel Costa Mesa and levying an annual assessment for Fiscal Year 2025-2026 for the Business Improvement Area covering certain Costa Mesa hotels and motels.

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) 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.

At the May 6, 2025, City Council meeting, the City Council approved a resolution declaring the

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File #: 25-319 Meeting Date: 6/3/2025
At the May 6, 2025, City Council meeting, the City Council approved a resolution declaring the intention to levy an annual assessment for Fiscal Year 2025-2026 and set a public hearing for Tuesday, June 3, 2025, at 7 p.m. Staff mailed out notices, including a copy of the resolution, to all hotel and motel owners on file with the City. Hotel and motel owners were notified of the proposed assessment renewal and their opportunity to protest the annual assessment or raise other concerns regarding the BIA.

ANALYSIS:

During the public hearing, property owners are provided an opportunity to speak in support of, protest the annual assessment, and/or address any concerns regarding the BIA. 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 TCM manage the day-to-day activities and provide all services to administer the BIA.

Per the agreement between the City of Costa Mesa and TCM and as required by Streets and Highways Code section 36533, TCM is required to provide an annual report (Attachment 2) 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. 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.

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,” “’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 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 not to adopt the resolution, which will prevent the City from levying an annual assessment for the upcoming fiscal year.

FISCAL REVIEW:

According to the audit report (Attachment 3), Travel Costa Mesa’scash 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

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File #: 25-319 Meeting Date: 6/3/2025
million in revenues. 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
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.

Since 2014, Travel Costa Mesa has also provided “CommunityEvents Programming”funding to the City, based on 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 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 decision is attached (Attachment 4).

The one percent revenue/assessment is still in effect. The discontinued funds had previously supported various community events, the following of which will now be absorbed fully by the General Fund:

Previously fully funded by the “Community Events Programming” Fund:
· Snoopy House
· ICSC Trade Show
Previously partially funded by the “Community Events Programming” 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 them 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.

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CONCLUSION:

State law mandates the specific procedure to be followed in the establishment of business improvement areas and the levying of a voluntary annual assessment. Adoption of Resolution No. 2025-XX is the final step in the reauthorization of the BIA assessment, and the City Council must adopt the proposed resolution before an annual assessment can be levied for Fiscal Year 2025-2026.

Therefore, staff recommends that the City Council:

1. Conduct a public hearing regarding the Business Improvement Area (BIA) reauthorization and levy of the annual assessment for Fiscal Year 2025-2026.

2. Adopt Resolution No. 2025-XX, confirming the annual report filed by Travel Costa Mesa and levying an annual assessment for Fiscal Year 2025-2026 for the Business Improvement Area covering certain Costa Mesa hotels and motels.

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Resolution No. 2025-xx Page 1 of 7
RESOLUTION NO. 2025-xx
A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA,

CONFIRMING THE ANNUAL REPORT FILED BY TRAVEL COSTA MESA AND LEVYING AN ANNUAL ASSESSMENT FOR FISCAL YEAR 2025-2026 FOR A BUSINESS IMPROVEMENT

AREA COVERING CERTAIN COSTA MESA HOTELS AND MOTELS

THE CITY COUNCIL OF THE CITY OF COSTA MESA DOES HEREBY FIND AND DECLARE AS FOLLOWS:

WHEREAS, in adopting 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 N ovember 2010, the City Council approved an increase in the assessment, raising the assessment from two percent (2%) to three percent (3%) based on the sale of overnight room stays; and
WHEREAS, the City desires to levy and collect a three percent (3%) assessment within the BIA for Fiscal Year 2025-2026; and
Attachment 1
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Resolution No. 2025-xx Page 2 of 7
WHEREAS, on May 6 , 2025 , the City Council adopted Resolution No. 2025- 07, a resolution of intention to levy an assessment for Fiscal Year 2025- 2026, pursuant to California Streets and Highways Code section 36534; and
WHEREAS, the City Council has conducted a public hearing pursuant to California Streets and Highways Code section 36535; and
WHEREAS, the City Council now desires to confirm the annual report as filed by TCM and adopt this Resolution to levy the assessment for the 2025-2026 Fiscal Year.

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

Section 1. Annual Report. The City Council hereby confirms the annual report on the Business Improvement Area as originally filed by Travel Costa Mesa in accordance with California Streets and Highways Code section 36535. The report shall be kept on file in the City Clerk’s Office.

Section 2. A ssessment. An annual assessment for the BIA shall be levied pursuant to California Streets and Highways Code sections 36500, et seq. The boundaries of the territory are the 11 motels and hotels listed in Exhibit A. The 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 and Highways Code section 36531.

Section 3. Ty pes 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. R eporting 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. M ethod 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 levying the assessment are set forth in the annual report relative to the Business Improvement Area, Ordinance No. 95-9, and Exhibit B.
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Resolution No. 2025-xx Page 3 of 7
PASSED AND ADOPTED this 3rd day of June, 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 3rd day of June, 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 3rd day of June, 2025.

Brenda Green, City Clerk
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Resolution No. 2025-xx Page 4 of 7

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
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Resolution No. 2025-xx Page 5 of 7
Crowne Plaza

Property Address: 3131 Bristol Street, Costa Mesa

Business Owner: Bright Bristol Street LLC
3131 Bristol Street
Costa Mesa, CA 92626

Property Owner: Bright Bristol Street LLC
3131 Bristol Street
Costa Mesa, CA 92626

Hilton Orange County/Costa Mesa

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

Hampton by Hilton (Formerly Holiday Inn)

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
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Resolution No. 2025-xx Page 6 of 7
OC Hotel Costa Mesa (Formerly BLVD Hotel)

Property Address: 2430 Newport Boulevard, Costa Mesa

Business Owner: SAI KSP Inc.
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: Legacy Strata
11301 W Olympic Bldv. #121-467
West Los Angeles, CA 90064

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: Secon Properties
3315 Fairview Rd.

Costa Mesa, CA 92626
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Resolution No. 2025-xx Page 7 of 7

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.
149
2024-2025 ANNUAL REPORT
TRAVEL
COSTA
MESA
150
151
// TRAVEL COSTA MESA //

TABLE OF

CONTENTS
4 P resident’s Message
6 F
unding Source
8 L
odging & TCM Hotel Partners
10 U
.S. Travel Association
12 Visit Calif
ornia
14 T
ourism Economics
16 M
arketing
20 Research
21 P
ublic Relations
24 S
ocial Media
28 G
roup Sales
31 T
ravel Costa Mesa Leadership
152
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

E
conomics. 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,

to
taling $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

sta
ys as well as a longer length of stay compared to the

pr
evious year.

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

r
egardless 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 //
153
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 ne
w relationships with meeting professionals to highlight our city’s unique offerings and vibrant amenities, showcasing it in a way that stands out against

c
ompeting cities. By emphasizing our stunning venues, rich culture, and exceptional

hosp
itality, we aim to present our city as the premier destination for events and

ga
therings. 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

enhanc
e Costa Mesa’s reputation
as a top destination. With the

c
ontinued support of our local

businesses and c
ommunity

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

sustainable g
rowth. 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
154

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

pr
ogram 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

c
onservative 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

oper
ating costs. This ensures that

surplus funds ar
e prudently managed
and can be utilized for future program-
ming, unforeseen expenses, or strategic

initia
tives that benefit the organization.
// 2024-2025 ANNUAL REPORT //6

BIA REVENUE
(PAST FOUR FISCAL YEARS)
100%

FUNDING FROM

BIA FUNDS
155
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
156
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 B
ristol St.

Costa Mesa, CA 92626

N
ewport 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 An
ton Blvd.

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

Greenwich, CT 06830

HEI H
otels & Resorts
101 Merritt 7 Corporate Park, 1st Fl.

Norwalk, CT 06851
OC Hotel Costa Mesa

2430 N
ewport Blvd.

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

S
anjay 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

M
arriott International
10400 Fernwood Rd.

Bethesda, MD 20817

L
egacy 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
157
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
S onesta Simply Suites in Santa
Ana is also scheduled for an upgrade.

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

en
tertainment 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-room 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
158
The U.S. Travel Association is a
national non-profit organization

r
epresenting all travel industry sectors.

As the industry's unified voice, it

f
ocuses on the key issues that matter
most to its members. Opportunities and

challeng
es 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

tr
avel as essential and responsible;
improving the travel experience;

pr oviding 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

member
s.

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% 159
*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. 160

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

pr
edicted to increase in 2024 and in
2025.

Overall visitation to California is

e
xpected to reach 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

Calif
ornia include Canada, Mexico,
India, and Australia. The Chinese are
projected to spend $2.5 billion in 2024,
r
eaching 94% of 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
161
California Airports
California airport throughput
(the number of passengers screened
under expedited and standard

scr
eenings) 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:
■ L
os Angeles (LAX)
■ B
urbank (BUR)
■ L
ong Beach (LGB)
■ O
akland (OAK)
■ O
ntario (ONT)
■ O
range County (SNA)
■ S
acramento (SMF)
■ S
an Diego (SAN)
■ S
an Francisco (SFO)
■ S
an Jose (SJC)
Airports with the largest percentage

o
f growth include Los Angeles,

S
an Francisco, 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
162

TOURISM ECONOMICS
$883M

VISITOR SPENDING
Travel Costa Mesa commissioned Tourism Economics in Fiscal Year 2024-2025 to c
onduct 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
wh
o stayed overnight or

tr
aveled 50+ miles to Costa Mesa.

In 2023, visitors spent $883 million, resulting in a total economic impact of tourism o
f $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.

O
vernight 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

en
tertainment revenue amounted to $80M, while transportation revenue was $46M. All segments of spending have recovered post-pandemic. 163
// 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
164
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 op
timization (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
165
T op 10 Landing Page Rankings

1. P lan-your-visit

2. W
hats-next Home Page

3. H
ome Page

4. Ca
tiontime

5. O
c-fair-costa-mesa

6. W
e-ve-got-good-taste-drive

7. S
tay/costa-mesa-hotels

8. H
otels-specials

9. W
e-ve-got-good-taste-fly

10. Eatcation®
// TRAVEL COSTA MESA // 17
By City
L.A. 11%
N
ew York
2%
D
allas
2%
S
an Jose
2%
S
an Diego

1.9%
Website Traffic Drivers

44.1% D isplay Ads

13.17%
R
eferral

13.14%
P
aid Search

9.66%
O
rganic Search

6.7%
D
irect

5.6%
P
aid Social

3.5%
P
aid Other
(SEM, Native,

T
ripadvisor, etc.)
T op Website Visitors By State
California 34%
T
exas
7%
F
lorida
3%
Ariz
ona
3%
N
ew York

2.9%
166

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 I
mpressions
■ 0.98% CTR (0.90% benchmark)
■ 982k R
each
Programmatic
■ 1.5M unique individuals r
eached
■ 102k
total visitors
Visitation
■ +1.3 da
y visitation over same

time pe
riod in 2023
■ +17.5%
visitation 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

significan
t, generating an impressive
$1.59 million in economic impact from
users exposed to the campaign’s

adv
ertisements. This collaboration
strengthened Costa Mesa’s presence
among key traveler segments.
■ 2.9M+ onsite
TA impressions with

0.08% CTR
■ 5.1M+ impr
ession and 411k+ clicks
from offsite ROVE ads with an

impr
essive 7.99% CTR
■ $1.59M in ec
onomic impact
// 2024-2025 ANNUAL REPORT //18
167
Onsite
■ 1.6M I
mpressions
■ 2,386 Clicks
■ 0.15% CTR

(0.10% benchmark)
O
ffsite – Connect
■ 1.3M I
mpressions
■ 44K+ Clicks
■ 1.80% CTR
O
ffsite – ROVE
■ 2.1M I
mpressions
■ 87K
Clicks
■ 4.13% CTR
E
mail
■ 2.3M sends
■ 40.20% O
pen Rate
■ 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 I
mpressions
■ 0.13% P
ost Impression Rate

(0.10% benchmark)
■ 3,417 B
ooked Room Nights
Digital Out of Home
■ D
rove a 70% Visitation Lift
■ R
esulted in nearly 2k actual visits to
Costa Mesa
Visitation
■ +2.8% o
vernight visitors YOY
■ H
alf day increase to length of stay
■ +5.4%
visitation from cities 500+ miles
away
// TRAVEL COSTA MESA // 19
Tripadvisor
Branded Hub
To further position Costa Mesa as a premier travel
destina
tion, 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.
168
Visitor Insights and
Location Tracking Data
Understanding traveler behavior is
essen
tial to measuring the impact of
Travel Costa Mesa’s marketing efforts.

Through advanced location data

tr
acking, 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 o
vernight visitors
■ 2.9 da
y length of stay (+0.8%)
■ +8.1%
visitors 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

r
anking above neutral on the interest
scale. Additionally, the city attracts

mainstr
eam and off-the-beaten-path
travelers, with 42% of respondents
equally open to well-known and

hidden-g
em destinations.

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

vie
w the city as a shopping and dining

hub, ther
e is potential to attract

e
xtended-stay travelers by emphasizing
resort-like experiences and curated events.

Audience Segments

1. T he Luxury Traveler
■ H
igh-income individuals willing to pay
for premium experiences
■ P
refer upscale lodging and luxury
travel options

2. T
he Cultural Experiences Traveler
■ E
njoys trying new things and

immer
sing in different cultures
■ S
pends more time planning trips to
maximize cultural experiences

3. T
he Urban Budget Traveler
■ P
refers urban destinations and well-
known travel spots
■ B
udget-conscious, seeking

a
ffordable travel options

4. T
he Routinized Traveler
■ M
ost frequent repeat travelers
■ F
avor structured plans but spend less
time on trip planning
■ P
refer familiar experiences over

e
xploring new 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
169
// 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,

“Calif
ornia’s best-kept cultural secrets”
from The Sacramento Bee and

“M
ust-sees in the Golden State” from
Canadian CTV News. Media and

journalists
wrote about Costa Mesa
very favorably, with 95% of the

c
overage having a positive sentiment.

Media coverage included television
segments on both domestic and

in
ternational 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

O
range County Business Journal

appearing bo
th 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 e
vents, and engaging brand experiences.

TCM proudly sponsored a special morning activation during the

w
eekend. 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.)
170
In Partnership with Visit California
In addition to attending the Fall Media Reception, Visit California in
vited 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 thr
oughout 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
I
nternational 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

T
raveler,
E
ssence, US News & World Report,

AAA
Magazines, and Times Media Group. TCM
also attended Visit California’s Fall Media

R
eception at the new Intuit Dome in Inglewood,
where it met and pitched Costa Mesa to media

r
epresentatives from companies such as

L
os Angeles Times, SFGate, Orange County

R
egister, 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
171
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

ambassador
s for the city. TCM led an interactive presentation designed to

incr
ease staff 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

r
epresentative 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

C
ommunications Summit. Persistent messaging from

indu
stry 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

r
elationships 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
visitor
s. These monthly newsletters highlight seasonal

dining, limited-time e
vents, 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.

I mpressions are calculated via Similarweb UVM
172
// 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
173
// 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
otal Engagements:
3,129
T
otal 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
otal Engagements: 4,413
T
otal Reach:
52,518
G
iveaway Entries:
350
Business Highlighted:
21+
B
log Clicks:
3,830
174
// 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
175
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

cr
eativity that make the city a cultural hub.

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

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

2. E
ating Well in the New Year in Costa Mesa - 8,853

3. B
est Places to Dance in Costa Mesa - 8,845

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

5. R
oad 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

cr
eator-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
176
Meetings and event spending are
expected to increase in 2025, with
a sharp focus on personalized

e
xperiences and sustainability,
while AI will play a significant role
in driving industry growth.

A
ccording to AMEX GBT, 74% of
meeting professionals are

op
timistic about the industry's
health, and 66% anticipate a

budg
et 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

f
ormats. 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

f
ollowing the Destination Sales

Ex
ecutive’s (DSE) departure in April
2024. This arrangement remained in
place until the new DSE was hired in
late October 2024. Since their

arriv
al, industry tradeshows have been

a
ttended, with the DSE participating
in three events from December to

F
ebruary 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

pr
ovide 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

r
eceiving 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

c
ontributes to and directly benefits
Costa Mesa’s local economy.

GROUP SALES
// 2024-2025 ANNUAL REPORT //28
177
Memberships
■ Calif ornia DMO Alliance
■ Calif
ornia Society of Association
Executives (CalSAE)
■ C
vent
■ H
elmsBriscoe
■ H
ospitality 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

cultur
al vitality through sports. Members
include OC Fair & Event Center,

Anaheim D
ucks, Mission 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,

r
eported that 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
178
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

participa
te in a Familiarization (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
179
// TRAVEL COSTA MESA // 31

TRAVEL COSTA MESA LEADERSHIP

EXECUTIVE COMMITTEE
Steve Yannarell
C

HAIRPERSON, GENERAL MANAGER,

T
he Westin South Coast Plaza
Susan O’Brien Moore
V

ICE PRESIDENT, GENERAL MANAGER,

A
yres Hotel Costa Mesa
Sue Cooke
T

REASURER, GENERAL MANAGER,

R
esidence Inn by Marriott
Lori Ann Farrell Harrison
S

ECRETARY , CITY MANAGER,

C
ity of Costa Mesa

DIRECTORS
Kevin Schjei GE NERAL MANAGER,

A
venue of the Arts Hotel, A Tribute Portfolio Hotel
Naj Ekhlas
GE

NERAL MANAGER,

B
est Western Plus
Annie Hsu
GE

NERAL MANAGER,

C
rowne Plaza
Jeannie Blue
GE

NERAL MANAGER, VP OF OPERATIONS,

H
ampton By Hilton Costa Mesa Newport Beach

(
formerly Holiday Inn Express)
Benito Benitez
GE
NERAL MANAGER, Hilton
Nimisha Solanki
GE
NERAL MANAGER, OC Hotel Costa Mesa
Hugo Barba
GE
NERAL MANAGER, Marriott
OPEN
GE
NERAL MANAGER, Ramada
John Stephens
MA
YOR, City of Costa Mesa

ADVISORS
Brian Chuan S ENIOR DIRECTOR OF INTERNATIONAL &
D
OMESTIC MARKETS, South Coast Plaza
David Haithcock
P

RESIDENT & CEO,

C
osta Mesa Chamber of Commerce
Michele Richards
C
EO, OC Fair & Event Center
STAFF
Paulette Lombardi-Fries P RESIDENT
Anne-Marie Schiefer
V

ICE PRESIDENT OF MARKETING
Chris Nuccio
C

MP, DESTINATION SALES EXECUTIVE
Jessica Placentia
OP

ERATIONS MANAGER
Jasmine Garcia
SO

CIAL MEDIA AND CONTENT MANAGER
Macie Rae Brady
MA

NAGER OF PUBLIC RELATIONS
180
TRAVELCOSTAMESA.COM
181

TRAVEL COSTA MESA

FINANCIAL ST ATEMENTS
June 30, 2024 and 2023
Attachment 3
182

TRAVEL COSTA MESA
Costa Mesa, California

FINANCIAL STATEMENTS
June 30, 2024 and 2023

CONTENTS
INDEPENDENT AUDITOR'S REPORT.

FINANCIAL ST ATEMENTS

STATEMENTS OF ASSETS, LIABILITIES AND NET ASSETS-CASH BASIS STATEMENTS OF REVENUE AND EXPENSES - CASH BASIS.
.1
.3
.4
NOTES TO FINANCIAL STATEMENTS . .5
183
JCrowe Crowe LLP
Independent Meinbei Crowe 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 United 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 1 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. 184
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 performing 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 ofinternal 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.

C tLP
Crowe LLP
Los Angeles, California
December 20, 2024

2. 185

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
$3178747

3. 186

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
70B,742
191 ,855
3,338,301
(46,966)
3,178,7 47
$ 3.131,781
$ 3,168,239
47,7'l 3
2 ,338
3 ,218,290
466,893
I ,208,088
143,442
37,000
609,624
174,032
2,639,079
579,211
2,599,536
$ 3.178.747

4. 187

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,
of donor-imposed restrictions. Accordingly,
follows:
and losses are classified based on the existence or absence net assets and changes therein are classified and reported as Without 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. 188

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. 189

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 $ 3.178.747
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. 190

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

Salaries and benefits
Marketing
Hotel marketing funds
Online marketing
City sponsorship
Sales depafment
Group incentiw 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
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
14254
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
14,254
7,304
20,921
255
63 550
212
443
3,864
$ 3,338,301
(Continued)

8. 191

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 fi.inds
Online marketing
City sponsorship
Sales department
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 Ainctional expenses
Program
Activities
490,737 $
7,951
466,893
1,200,137
143,442
37 ,00 €)
38 ,367
33, 806
5,935
$ 2,424,268
General and
Administrative Total
118,887 $
9 280
13 800
21 359
12,345
i -i sgi
i1 397
335
28 317
281
855
14 336
$ 214,811
609,624
7,951
466,893
i,200,137
143,442
37,000
47,647
33,806
13,800
21,359
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 !547,ei47, respectively. (Continued)
g.
192

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
$ 64.544
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 UNCERTAINTIES
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. 193
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
194

CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 25-311 Meeting Date: 6/3/2025
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 (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; and

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.

195

City of Costa Mesa
Agenda Report

77 Fair Drive
Costa Mesa, CA 92626
Item #: 25-311 Meeting Date: 6/3/2025
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 (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; and

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, subjec t 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.
196

Item #: 25-311 Meeting Date: 6/3/2025

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

197

Item #: 25-311 Meeting Date: 6/3/2025

On May 1, 2023, an 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 correctio ns. 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 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 requeste d 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 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 September 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 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. 198

Item #: 25-311 Meeting Date: 6/3/2025

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 “planning matter” decision 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 CMMC 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 procedure s 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.

Planning Commission Decision
After a continuation was granted by the Planning Commission from a previous hearing date scheduled on February 10, 2025 , the appeal was heard by the Planning Commission on February 24, 2025, to consider the applicant’s appeal of the staff determination that the subject application had 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 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 Planning Commission upheld the staff determination that the CUP PA -21-23 had expired on a 6 -0-1 vote, with Commissioner Dickson absent.

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
199

Item #: 25-311 Meeting Date: 6/3/2025

 Planning Commission Meeting Video:
https://costamesa.granicus.com/player/clip/4216?view_id=14&redirect=true On February 27, 2025, the applicant submitted an appeal of the Planning Commission dec ision to be reviewed by the City Council.

City Council Public Hearing Continuation
On May 6, 2025, a City Council public hearing was held which included this item on the agenda. Prior to the hearing date , the applicant submitted a request in writing on May 2, 2025for a continuance of the item to allow additional time for Gold Flora to better prepare for the public hearing.

One public comment letter opposing the requested appeal was submitted to the City prior to the original City Council meeting on May 6, 2025. During the City Council public hearing on May 6, 2025, there was one speaker in opposition of the appeal stating concerns with traffic and safety issues.

The City Council approved the request for continuation to a date certain of June 3, 2025, by a v ote of 5-0. As of the date this report was written, the applicant has not submitted any additional applicant submittal/information.

ANALYSIS:

Appeal of the Planning Commission’s Determination

The applicant’s February 27, 2025 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, then the City Council should uphold the staff determination and the Planning Commission confirmation that the CUP application, pursuant to the CMMC, has expired.

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 200

Item #: 25-311 Meeting Date: 6/3/2025

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 sub ject 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 that 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.

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.
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Item #: 25-311 Meeting Date: 6/3/2025

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.

Due to the continuation of the item from the May 6, 2025 meeting to the date -certain June 3, 2025 meeting, re-notification was not required. Any public comments received prior to the June 3, 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 1687 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 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 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 Approval 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 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 1
203
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 by 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 approval is a “ministerial” decision and is therefore exempt from the California Environmental Quality Act pursuant to California Public Resources Code Section 15268;
WHEREAS, an appeal of the Planning 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 opened by the City Council on May 6, 2025 and continued to June 3, 2025;
WHEREAS, the City Council conducted the continued public hearing on June 3, 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 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 3rd day of June, 2025.

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Resolution No. 2025-xx Page 3 of 3

_____________________________
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. 202 5-xx and was duly passed and adopted by the City Council of the City of Costa Mesa at a regular meeting held on the 3
rd day of June 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 4th day of June 2025.

___________________________
Brenda Green, City Clerk
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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
207
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.
208

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 211
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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. 212
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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. 214
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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 #: 25-314 Meeting Date: 6/3/2025
TITLE:

SCHEDULE OF USER AND REGULATORY FEES
DEPARTMENT: FINANCE DEPARTMENT
PRESENTED BY: CAROL MOLINA, FINANCE DIRECTOR
CONTACT INFORMATION: CAROL MOLINA, FINANCE DIRECTOR, (714) 754-5036 RECOMMENDATION:

Staff recommends the City Council

1. Open a Public Hearing and take testimony.

2. Adopt a Resolution of the City Council of the City of Costa Mesa, California, Updating and Establishing User and Regulatory Fees for Various City Services.

BACKGROUND:

Fee-related services typically benefit a particular individual, business, or group. Since these services typically provide a specific benefit, communities often seek to recover all, or a portion of, the costs of providing fee-related services from those benefiting from the service provided. This allows unobligated revenues to be more purposefully directed to funding services provided to the community as a whole (e.g., public safety services).

Staff reviews existing user and regulatory fees and rates on a recurring basis to recover allowable costs of certain City services. City staff has obtained the professional services of Clear Source to ensure the User and Regulatory Fee adjustments are within California law, which allows Cities to charge for fee-related services and activities up to the estimated reasonable cost of providing the services, activities, or materials for which fees are charged. The User and Regulatory Fee Study conducted by Clear Source is included in Attachment 3. This report presents recommended changes to the current schedule of user and regulatory fees.

This User Fee Resolution and Fee Schedule report will be presented in a Public Hearing format. At the public hearing, staff will recommend that the City Council adopt a revised schedule of fees for various City services. If adopted, the updated fees will be effective July 1, 2025.

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File #: 25-314 Meeting Date: 6/3/2025
ANALYSIS:

Each year, it is the intent of staff to review and update user and regulatory fees collected for various City services. Periodically, full cost of service studies are undertaken. To keep pace with changes in costs, in years between fee studies (“interim years”), the City Council has authorized the annual adjustment of existing user and regulatory fees. The adjustment is based on the prior year’sannual change in the All-Urban Consumer Price Index for Los Angeles-Long Beach-Anaheim, CA (CPI), not to exceed five percent (5%) per year. If the CPI does not change or goes down in a given year, no change shall be made to the fee schedule that year.

While the proposed action provides for an annual review and update of fees, during the course of the year, the City Council may elect to adopt new fees, modify existing fees, or repeal existing fees. As these changes are made, the consolidated fee schedule will be updated to reflect the changes.

Staff intends to conduct periodic studies that will identify the City’sfull cost of providing fee-related services based on current labor rates and service delivery methods. These studies will provide an opportunity to recalibrate fees based on cost-of-service findings and adjustments to targeted cost recovery levels. The results will be brought to the City Council at a future date.

Since this is an interim year update, this report is intended to primarily reflect a CPI adjustment to the fees in line with the recent annual change in regional CPI of 3.3% until the next full cost of service study is performed. In addition to the annual CPI adjustment, three new fees are proposed for City Council consideration.

Similar fees are collected by communities throughout the region and the State. The proposed fee amounts do not exceed the City’scost of service and are in-range of amounts charged by other jurisdictions. In order to provide the City Council with additional information as it considers potential adjustments to fees, current and proposed fees were compared to amounts collected by other agencies. For sampling purposes, the fee comparison examined fees for:
· Fountain Valley
· Huntington Beach
· Laguna Beach
· Laguna Niguel
· Long Beach
· Mission Viejo
· Newport Beach
· Orange
· Seal Beach
The following provides an overview of adjustments to existing fees and new fees proposed:
· No fee adjustments or increases are proposed for youth or senior services. · Most fees are proposed to be adjusted by 3.3% (CPI adjustment) · Three new fees are proposed:

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File #: 25-314 Meeting Date: 6/3/2025

1. Credit Card Transaction Processing Fee:
§ This fee is intended to offset processing fees charged by the City’scredit card payment processors. Accordingly, this fee will only apply to applicants that pay fees with a credit card.
§ The proposed fee is 2.7% of the amount paid by credit card. § The fee is not intended to generate any new revenue for the City. It is simply intended to function as a pass-through collection of amounts directly payable to the City’scredit card transaction processing vendor.

Graph 1: Credit Card Transaction Fee

2. General Plan Update Fee:
§ This fee is proposed to offset a portion of the periodic costs associated with General Plan and supporting document updates.
§ Adopting a General Plan Update Fee allows staff to reserve amounts collected and use them to offset costs that may be incurred from time to time. § In order to maintain alignment with the region, staff proposed less than full cost recovery for this fee. The proposed fee will be collected as 5% of applicable permit fees. The fee will only be paid by construction projects that make use of the City’s General Plan and related documents in order to determine whether the project can be constructed (e.g., new construction).

243
File #: 25-314 Meeting Date: 6/3/2025
Graph 2: General Plan Update Fee
*Fees also collected by City of Huntington Beach, Orange, and Seal Beach. For those agencies, fees are collected as a percent of project valuation, so they are not compatible for chart comparison purposes.

3. Technology Enhancement Fee:
§ The City's Technology Enhancement Fee will assist in capturing costs associated with the implementation, enhancement, management, and maintenance of the City's software platform and technology.
§ Additionally, the fee will be used to support maintaining and enhancing the City's eServices platforms, ensuring better service for the public and fostering improvements in the interconnected services and business operation across departments. § The development community has indicated that online permitting, dynamic land management tracking, and good access to historical permit information is critical. These funds will be used to offset the costs of those services. § In order to maintain alignment to the region, staff proposed less than full cost recovery for this fee. The proposed fee will be collected as 5% of the building permit fee.

244
File #: 25-314 Meeting Date: 6/3/2025
Graph 3: Technology Enhancement Fee
*Fees also collected by City of Mission Viejo, Orange, and Seal Beach. Those agencies collect fees as a percent of project valuation, rather than as a percent of permit fee, so they are not compatible for chart comparison purposes.

User and Regulatory Fees Best Practices
Industry best practices and California statutes are in harmony: User and regulatory fees should be set according to the estimated reasonable cost of service and should bear a fair and reasonable relationship to the payer’s burdens on, or benefits received from the activities and/or services provided by the City. Additionally, ongoing review and adjustment of fees provides multiple benefits, including:
· Increasing the availability of General Fund revenues to be used for services and activities available to all Costa Mesa residents and businesses, such as public safety and parks services.
· Keeping pace with general cost inflation.
· Avoiding fee spikes that are more likely to occur when municipalities leave fees unchanged for a multi-year period.
· Providing fee payers, City Staff, and City policymakers with a pattern of consistency that provides information for forecasting and decision-making purposes. · Helps meet fee-payer service level expectations by collecting fees to fund the existing level of services provided.
· Encouraging generational equity among fee payers by avoiding long-term stagnation of fees followed by significant fee increases.

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File #: 25-314 Meeting Date: 6/3/2025
ALTERNATIVES:

City Council alternatives include:
· Implement a CPI increase other than 3.3%.
· Approve any combination of partial implementations of the proposed changes.

FISCAL REVIEW:

The anticipated fiscal impact of the proposed fee changes is $750,000. It is important to note that while adjusting fees and billing rates will provide a fiscal impact in the form of additional revenue; the revenue is not intended to be used to fund new services, rather the revenue is intended to offset the costs of providing existing services that are recoverable from fees. Authorizing an annual inflationary adjustment to fees simply allows the City to better recoup its costs.

LEGAL REVIEW:

The City Attorney’s Office has reviewed this agenda report and approves as to form.

CITY COUNCIL GOALS AND PRIORITIES:

This item supports the following City Council Goal:
· Achieve Long-Term Fiscal Sustainability
CONCLUSION:

Staff recommends the City Council

1. Open a Public Hearing and take testimony.

2. Adopt a Resolution of the City Council of the City of Costa Mesa, California, Updating and Establishing User and Regulatory Fees for Various City Services.

246
ATTACHMENT 1

RESOLUTION NO. 2025-xx

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA, CALIFORNIA,

UPDATING AND ESTABLISHING USER AND REGULATORY FEES FOR VARIOUS CITY

SERVICES

THE CITY COUNCIL OF THE CITY OF COSTA MESA HEREBY FINDS AND DECLARES AS FOLLOWS:

WHEREAS, user and regulatory fees are established by the City Council; and WHEREAS, the City recently completed a study to identify the cost of providing various user and regulatory fee-related services; and
WHEREAS, the study examined fee-related services provided by the City, the costs reasonably borne by the City in providing those services, the beneficiaries of those services, and the revenues produced by those paying fees and charges for direct services; and WHEREAS, the City Council finds that providing these services is of direct benefit to applicants both separate and apart from the general benefit to the public; and therefore, in the interests of fairness to the general public, the City desires to better recover the costs of providing these services from applicants who have sought or require the City's services by revising its schedule of fees; and
WHEREAS, the City Council hereby finds that the study provides adequate evidence to conclude that the revised fees do not exceed the cost to provide the services for which the fees are charged; and
WHEREAS, the City Council has authorized the annual adjustment of various fees, each July 1, based on the prior year annual change in the all-urban Consumer Price Index for Los Angeles-Long Beach-Anaheim, CA (CPI), typically published each January, not to exceed five percent (5%) per year. If the CPI does not change or goes down in a given year, no change shall be made to the fee schedule that year; and WHEREAS, in adopting this Resolution, the City Council is taking action only on those fees for the services, programs or products set forth in Exhibit “A” which have been modified from prior resolutions of the City Council. The remaining fees that have not been modified from prior resolutions shall remain in full force and effect; and WHEREAS, all legal prerequisites to the adoption of this resolution have occurred.

247

NOW, THEREFORE, BE IT RESOLVED as follows:

Section 1: The City Council hereby finds and determines that based upon the data, information, analysis, oral and written documentation presented to the City Council concerning the rates, fees, and charges described in Exhibit “A” attached hereto and by this reference incorporated herein, the rates, fees, and charges set forth in said Exhibit “A” do not exceed the established reasonable cost of providing the service for which the rates, fees, or charges are levied.

Section 2: The rates, fees, and charges set forth in Exhibit “A” are hereby adopted and approved as the rates, fees, and charges for the services identified for each such rate, fee, and/or charge.

Section 3: All previously authorized annual CPI adjustments to existing fees shall be effective July 1, 2025.

Section 4: Any new fees adopted that are not imposed upon a development project, as defined in Section 66000 of the California Government Code shall be effective July 1, 2025.

Section 5:

Any new fees that are imposed upon a development project, as defined in Section 66000 of the California Government Code shall be effective September 1, 2025, to comply with California Government Code requirements.

Section 6:

Severability. If any section, subsection, sentence, clause, phrase or portion of this Resolution is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Resolution.

The City Council of the City of Costa Mesa hereby declares that it would have adopted this Resolution and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or portions be declared invalid or unconstitutional.

Section 7: The
City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

248
PASSED AND ADOPTED this 3rd day of June, 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 3 rd day of June, 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 4
th day of June, 2025.

___________________________
Brenda Green, City Clerk

249
Illustration of Current and Proposed Fees
Attachment 2
250
Services / Activities / Subject Matter Page
Animal License Fees 1
Business License Processing Fees 2
Administrative / Finance Department Fees 3
Administrative / City Clerk Fees 4
Appeal Fees 5
Building Fees 6
Cannabis Permit Fee 11
Fire & Rescue Department EMS & Emergency Ground Ambulance Transport & Vehicle Accident Fees 12 Fire Prevention and Community Risk Reduction Fees 13
Planning Fees 15
Police Fees 18
Public Works 19
Contractor Self-Haul Fees 20
Impact Fees 21
Watershed Fees 22
Recreation and Facility Rental Fees 23
Digital/Video Duplication Fees 31
City of Costa Mesa

ILLUSTRATION OF CURRENT AND PROPOSED FEES
251
City of Costa Mesa
BEFORE AND AFTER - ANIMAL LICENSE FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable Dog License
1 Altered $25 $26 3.3% per license Y
2 Unaltered $80 $83 3.3% per license Y
3 Senior Citizen Altered (62+ yrs.) $10 $10 0.0% per license [a] Y 4 Senior Citizen Unaltered (62+ yrs.) $40 $40 0.0% per license [a] Y 5 Replacement Tag $5 $5 0.0% per tag Y
6 Late Renewal Penalty 50% of license fee 50% of license fee [b] N Special Animal Permit Fees
7 Non-domesticated animals, livestock, reptiles, aviaries, and more than five domestic animals
a) Initial $15 $15 3.3% Y
b) Renewal $15 $15 3.3% Y
8 Beekeeping Permit Fee
a) Initial $75 $75 0.0% Y
b) Renewal $75 $75 0.0% Y
[a] Senior Citizens must submit proof of age to receive rate (Government ID).

Activity Description
[b] If application was provided by an Animal Control Officer, payment is required within 15 days of notification and will result in a penalty of 50% of licensing fees. Failure to obtain and keep current a dog license can result in a citation. If a renewal is more than 30 days overdue, a late fee of 50% of the applicable license fee will be charged in addition to the yearly fee. 252
City of Costa Mesa
BEFORE AND AFTER - BUSINESS LICENSE PROCESSING FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable Business License Administrative Processing Charge
1 Changes and Amendments – Existing Accounts $25 $25 0.0% Y 2 Reactivations – Existing Accounts $35 $35 0.0% Y
3 Reprint Fee $10 $10 0.0% Y
4 Delinquent Payment Penalty 25% 25% 0.0% per month, not to exceed 100% of the fee
N
5 Noncompliance Penalties
a) After 90 days for Renewals $50 $50 0.0% N
b) After 45 days for New Applicants $50 $50 0.0% N
Activity Description
253
City of Costa Mesa
BEFORE AND AFTER - ADMINISTRATIVE / FINANCE DEPARTMENT FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable 1 Credit Card Transaction Processing Fee 2.70% New
2 Bad Check Fee
a) First Bad Check $25 $25 0.0% N
b) Each Subsequent Bad Check $35 $35 0.0% N
3 Christmas Tree Lots
a) Permit $215 $222 3.3% Y
b) Clean Up Fee $200 $200 0.0% Y
4 Fireworks Stand Permit
a) Fireworks Stand Permit waived waived 0.0% N
b) Fireworks Cleanup Fee $100 $100 0.0% Y
5 Home Occupation Permit $100 $103 3.3% one-time fee Y
6 Operator Permit $75 $77 3.3% Y
7 Sidewalk/Parking Lot Sale Permit $45 $46 3.3% Y
8 Solicitation Permit $160 $165 3.3% Y
9 Sidewalk Vendor Permit $250 $258 3.3% non-refundable Y Activity Description
254
City of Costa Mesa
BEFORE AND AFTER - ADMINISTRATIVE / CITY CLERK FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable 1 Certification of Documents $10 $10 0.0% N
2 Political Reform Act Late Filing Fee $10 $10 0.0% N
3 Photocopies - Citywide
a) Per page - Black and White Copies $0.10 $0.10 0.0% per page Y b) Per Page - Color Copies $0.50 $0.50 0.0% per page Y
c) Digital $8 $8 0.0% per digital storage device Y
4 Subpoena Fee $15 $15 0.0% N
Activity Description
255
City of Costa Mesa
BEFORE AND AFTER - APPEAL FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable 1 Appeal Fees
a) Appeal of Planning Commission Decision
i) Tier I $1,220 $1,220 0.0% [a] Y
ii) Tier II $3,825 $3,825 0.0% [b] Y
b) Appeal of Non-Planning Commission Decision
i) Tier I $690 $690 0.0% [a] Y
ii) Tier II $3,825 $3,825 0.0% [b] Y
Activity Description
[a] Includes owners and/or occupants of a property located within 500 feet of project site (excluding owners and/or occupants of the project site.) [b] 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 project site. 256
City of Costa Mesa
BEFORE AND AFTER - BUILDING FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable Building Permit Fee

TOTAL VALUATION
1 $1 - $500 $40.12 $41.44 3.3% Y
2 $501 - $2,000
a) for the first $500 $40.12 $41.44 3.3% Y
b) for each additional $100, or fraction thereof, to and including $2,000 $5.20 $5.37 3.3% Y 3 $2,001 - $25,000
a) for the first $2,000 $118.18 $122.08 3.3% Y
b) for each additional $1,000, or fraction thereof, to and including $25,000
$23.87 $24.66 3.3% Y
4 $25,001 - $50,000
a) for the first $25,000 $667.19 $689.20 3.3% Y
b) for each additional $1,000, or fraction thereof, to and including $50,000
$17.21 $17.78 3.3% Y
5 $50,001 - $100,000
a) for the first $50,000 $1,097.63 $1,133.85 3.3% Y
b) for each additional $1,000, or fraction thereof, to and including $100,000
$11.94 $12.33 3.3% Y
6 $100,001 - $500,000
a) for the first $100,000 $1,694.57 $1,750.48 3.3% Y
b) for each additional $1,000, or fraction thereof, to and including $500,000
$9.54 $9.85 3.3% Y
7 $500,001 - $1,000,000
a) for the first $500,000 $5,648.19 $5,834.56 3.3% Y
b) for each additional $1,000, or fraction thereof, to and including $1,000,000
$8.10 $8.37 3.3% Y
8 $1,000,001 and up
a) for the first $1,000,000 $9,698.98 $10,019.01 3.3% Y b) for each additional $1,000, or fraction thereof $5.98 $6.18 3.3% Y Plan Check Fee
9 Building Plan Check 65% 65% 0.0% percent of permit fee Y 10 Accelerated Building Plan Check
a) Consultant Fee 65% 65% 0.0% percent of permit fee Y
b) City Administrative Fee 16.25% 16.25% 0.0% percent of permit fee Y Document Retention Fee
11 Document Retention 5% 5% 0.0% percent of permit fee Y

GRADING PERMITS
Total Cut and Fill Cubic Yards (CY)
12 1 CY to 50 CY $40.12 $41.44 3.3% Y
13 51 CY - 100 CY $63.08 $65.16 3.3% Y
14 101 CY - 1,000 CY
a) for the first 100 CY $63.21 $65.30 3.3% Y
b) for each additional 100 CY, or fraction thereof, to and including 1,000 CY
$29.90 $30.89 3.3% Y
15 1,001 CY - 10,000 CY
a) for the first 1,000 CY $332.35 $343.32 3.3% Y
b) for each additional 1,000 CY, or fraction thereof, to and including 10,000 CY
$24.77 $25.59 3.3% Y
16 10,001 CY - 100,000 CY
a) for the first 10,000 CY $555.35 $573.67 3.3% Y
b) for each additional 10,000 CY, or fraction thereof, to and including 100,000 CY
$112.76 $116.48 3.3% Y
17 100,001 CY or more
a) for the first 100,000 CY $1,570.19 $1,622.00 3.3% Y
b) for each additional 10,000 CY, or fraction thereof $62.37 $64.43 3.3% Y Activity Description
257
City of Costa Mesa
BEFORE AND AFTER - BUILDING FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description

ELECTRICAL PERMIT FEES
18 Issuance Fee $40.07 $41.39 3.3% Y
19 New Residential Buildings
a) Multi-Family Residential $0.08 $0.09 3.3% per SF Y
b) Single and Two-Family Residential $0.09 $0.10 3.3% per SF Y 20 Private Swimming Pools $91.73 $94.76 3.3% Y
21 Carnivals and Circuses
a) Carnivals, circuses, or other traveling shows or exhibitions utilizing transportable type rides, booths, displays and attractions. For electrical generators and electrically driven rides
$40.07 $41.39 3.3% each Y
b) Mechanically driven rides and walk-through attractions or displays having electric lighting
$12.36 $12.77 3.3% each Y
c) System of area and booth lighting $12.36 $12.77 3.3% each Y 22 Temporary Power Service
a) Temporary service pole or pedestal, including all pole or pedestal- mounted receptacle outlets and appurtenances
$40.07 $41.39 3.3% each Y
b) Temporary distribution system and temporary lighting and receptacle outlets for construction sites, decorative lights, Christmas tree sales lots, fireworks stands, etc.
$20.97 $21.66 3.3% each Y
23 Unit Fee Schedule [a]
a) First 20 fixtures $1.88 $1.94 3.3% each [b] Y
b) Additional fixtures $1.24 $1.28 3.3% each [b] Y
24 Lighting Fixtures
a) Lighting fixtures, sockets or other lamp-holding devices $1.88 $1.94 3.3% each Y b) Pole or platform-mounted lighting fixtures $1.88 $1.94 3.3% each Y c) Theatrical-type lighting fixtures or assemblies $1.88 $1.94 3.3% each Y 25 Residential Appliances $8.09 $8.36 3.3% each [c]; [d] Y 26 Non-Residential Appliances $8.09 $8.36 3.3% each [c]; [e] Y 27 Power Apparatus
a) Up to and including 1 HP, kW, kVA, kVAR $8.09 $8.36 3.3% each [f]; [g] Y b) Over 1 and not over 10 HP, kW, kVA, kVAR $20.97 $21.66 3.3% each [f]; [g] Y c) Over 10 and not over 50 HP, kW, kVA, kVAR $41.95 $43.33 3.3% each [f]; [g] Y d) Over 50 and not over 100 HP, kW, kVA, kVAR $84.40 $87.18 3.3% each [f]; [g] Y e) Over 100 HP, kW, kVA, kVAR $127.02 $131.21 3.3% each [f]; [g] Y 28 Busways
a) For trolley and plug-in-type busways, each 100 feet (30 480 mm) or fraction thereof
$12.36 $12.77 3.3% [h] Y
29 Signs, Outline Lighting and Marquees
a) Signs, outline lighting systems or marquees supplied from one branch circuit
$41.95 $43.33 3.3% each Y
b) Additional branch circuits within the same sign, outline lighting system or marquee
$8.09 $8.36 3.3% each Y
30 Services
a) 600 volts or less and not over 200 amperes in rating $52.01 $53.73 3.3% [i] Y b) 600 volts or less and over 200 amperes to 1, 000 amperes $105.97 $109.47 3.3% Y c) Over 600 volts or over 1,000 amperes in rating $211.93 $218.92 3.3% Y d) Miscellaneous Apparatus, Conduits and Conductors. For electrical apparatus, conduits and conductors for which a permit is required, but for which no fee is herein set forth
$31.03 $32.06 3.3% Y
31 Plan Check Fee
a) Electrical plan review fee when required (minimum charge - one-hour) $133.73 $138.14 3.3% per hour Y 258
City of Costa Mesa
BEFORE AND AFTER - BUILDING FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description

MECHANICAL PERMIT FEES
32 Issuance Fee $40.07 $41.39 3.3% Y
33 Furnaces
a) installation or relocation of each forced-air or gravity-type furnace or burner, including ducts and vents attached to such appliance, up to and including 100,000 Btu/h (29.3 kW)
$25.23 $26.06 3.3% Y
b) installation or relocation of each forced-air or gravity-type furnace or burner, including ducts and vents attached to such appliance over 100,000 Btu/h (29.3 kW)
$31.03 $32.06 3.3% Y
c) installation or relocation of each floor furnace, including vent $25.23 $26.06 3.3% Y d) installation or relocation of each suspended heater, recessed wall heater or floor-mounted unit heater
$25.23 $26.06 3.3% Y
e) Appliance Vents: For the installation, relocation, or replacement of each appliance vent installed and not included in an appliance permit $12.36 $12.77 3.3% Y
f) Repairs or Additions: For the repair of, alteration of, or addition to each heating appliance, refrigeration unit, cooling unit, absorption unit, or each heating, cooling, absorption, or evaporative cooling system, including installation of controls regulated by the Mechanical Code. $23.36 $24.13 3.3% Y
34 Boilers, Compressors, and Absorption Systems
a) Installation or relocation of each boiler or compressor to and including 3 horsepower (10.6 kW), or each absorption system to and including 100,000 Btu/h (29.3 kW)2
$25.06 $25.89 3.3% Y
b) Installation or relocation of each boiler or compressor over 3 horsepower (10.6 kW) to and including 15 horsepower (52.7 kW), or each absorption system over 100,000 Btu/h (29.3 kW) to and including 500,000 Btu/h (146.6 kW)
$46.29 $47.82 3.3% Y
c) Installation or relocation of each boiler or compressor over 15 horsepower (52.7 kW) to and including 30 horsepower (105.5 kW), or each absorption system over 500,000 Btu/h (146.6 kW) to and including 1,000,000 Btu/h (293.1 kW)
$63.52 $65.61 3.3% Y
d) Installation or relocation of each boiler or compressor over 30 horsepower (105.5 kW) to and including 50 horsepower (176 kW), or each absorption system over 1,000,000 Btu/h (293.1 kW) to and including 1,750,000 Btu/h (512.9 kW)
$94.54 $97.66 3.3% Y
e) Installation or relocation of each boiler or compressor over 50 horsepower (176 kW), or each absorption system over 1,750,000 Btu/h (512.9kW)
$157.97 $163.18 3.3% Y
35 Air Handlers
a) air-handling unit to and including 10,000 cubic feet per minute (cfm)(4719 L/s), including ducts attached thereto
$18.15 $18.75 3.3% each [j] Y
b) air-handling unit over 10,000 cfm (4719 L/s) $30.86 $31.88 3.3% each Y c) Evaporative Coolers: For each evaporative cooler other than portable type
$18.15 $18.75 3.3% each Y
36 Ventilation and Exhaust
a) ventilation fan connected to a single duct $12.36 $12.77 3.3% each Y b) ventilation system which is not a portion of any heating or air conditioning system authorized by a permit
$18.15 $18.75 3.3% each Y
c) installation of each hood which is served by mechanical exhaust, including the ducts for such hood
$18.15 $18.75 3.3% each Y
37 Incinerators
a) installation or relocation of each domestic-type incinerator $31.03 $32.06 3.3% Y b) installation or relocation of each commercial or industrial-type incinerator
$24.72 $25.54 3.3% Y
38 Miscellaneous
a) For each appliance or piece of equipment regulated by the Mechanical Code but not classed in other appliance categories, or for which the fee is listed in the table
$18.15 $18.75 3.3% Y
39 Plan Check Fee
a) Mechanical plan review fee when required per hour (minimum charge - one-hour).
$133.73 $138.14 3.3% Y
259
City of Costa Mesa
BEFORE AND AFTER - BUILDING FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description

PLUMBING PERMIT FEES
40 Issuance Fee $40.07 $41.39 3.3% Y
41 Fixtures and Vents
a) For each plumbing fixture or trap or set of fixtures on one trap (including water, drainage piping and backflow protection thereof) $16.71 $17.26 3.3% Y
b) repair or alteration of drainage or vent piping, each fixture $8.09 $8.36 3.3% Y 42 Sewers, Disposal Systems, and Interceptors
a) Building sewer and each trailer park sewer $42.02 $43.41 3.3% each Y b) Cesspool $63.52 $65.61 3.3% each Y
c) Private sewage disposal system $127.02 $131.21 3.3% each Y d) Industrial waste pretreatment interceptor, including its trap and vent, excepting kitchen-type grease interceptors functioning as fixture traps $33.93 $35.05 3.3% each Y
e) Rainwater systems-per drain (inside building) $16.71 $17.26 3.3% Y 43 Water Piping and Water Heaters
a) Installation, alteration, or repair of water piping or water-treating equipment, or both, each
$8.09 $8.36 3.3% each Y
b) Water heater including vent ; For vents only, see Section 3 $20.97 $21.66 3.3% each Y 44 Gas Piping Systems
a) 1 to 5 outlets $10.48 $10.83 3.3% Y
b) Each additional outlet over 5 $1.88 $1.94 3.3% Y
45 Lawn Sprinklers, Vacuum Breakers and Backflow Protection Devices a) For each lawn sprinkler system on any one meter, including backflow protection devices thereof
$25.23 $26.06 3.3% Y
b) Additional Vacuum Breakers and Backflow Protection Devices i) 1 to 5 devices $20.97 $21.66 3.3% Y
ii) Over 5 devices, each $3.84 $3.97 3.3% [k] Y
iii) 2 inches (50.8 mm) and smaller $20.97 $21.66 3.3% Y iv) Over 2 inches (50.8 mm) $42.02 $43.41 3.3% Y
46 Swimming Pools
a) Public Pool $155.58 $160.71 3.3% Y
b) Public Spa $103.58 $107.00 3.3% Y
c) Private Pool $103.58 $107.00 3.3% Y
d) Private Spa $51.58 $53.28 3.3% Y
47 Miscellaneous
a) For each appliance or piece of equipment regulated by the Plumbing Code but not classed in other appliance categories, or for which no other fee is listed in this code.
$16.71 $17.26 3.3% Y
48 Plan Check Fee
a) Plumbing plan review fee when required (minimum charge - one hour), per hour listed in the table
$133.73 $138.14 3.3% Y
Other
49 Technology Enhancement Fee 5% New percent of permit fee [l] Y 50 General Plan Maintenance Fee 5% New percent of building permit fee
[m] Y
51 Other Inspection and Fees
a) Reinspection Fees $122.58 $126.62 3.3% per hour [n] Y b) Inspections outside of normal business hours $122.58 $126.62 3.3% per hour, min 2 hrs Y c) Inspections for which no fee is specifically indicated $122.58 $126.62 3.3% per hour, min 1 hr Y d) Additional plan review required by changes, additions or revisions to plans or to plans for which an initial review has been completed $133.73 $138.14 3.3% per hour, min 0.5 hrs Y
e) Inspection due to change of use in accordance with CBC 111.1 $122.58 $126.62 3.3% per hour, min 1 hr Y 260
City of Costa Mesa
BEFORE AND AFTER - BUILDING FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description [d] Residential appliances or receptacle outlets for same, including wall mounted electric ovens; counter-mounted cooking tops; electric ranges; self-contained room, console or through-wall air conditioners; space heaters; food waste grinders; dish washers; washing machines; water heaters; clothes dryers; or other motor-operated appliances not exceeding I horsepower (HP) (746 W) in rating. [a] The following do not include permit-issuing fee: Receptacle, Switch and Light Outlets: For receptacle, switch, light or other outlets at which current is used or controlled, except services, feeders and meters.
[b] For multi-outlet assemblies, each 5 feet (1524 mm) or fraction thereof may be considered as one outlet. [c] For other types of air conditioners and other motor-driven appliances having larger electrical ratings, see Power Apparatus. [m] Fee is applicable to projects requiring a building permit (e.g., new construction, square footage additions). Fee is calculated as a percentage of building permit fee. [n] A reinspection fee may be assessed for each inspection or reinspection when such portion of work for which the inspection is called is not complete or when the corrections called for are not made or when the work for which the inspection is called is not ready for inspection. [e] Nonresidential appliances and self-contained factory-wired, nonresidential appliances not exceeding 1 horsepower (HP), kilowatt (kW) or kilovolt-ampere (kVA), in rating, including medical and dental devices; food, beverage and ice cream cabinets; illuminated show cases; drinking fountains; vending machines; laundry machines; or other similar types of equipment. [f] For equipment or appliances having more than one motor, transformer and heater, These fees include all switches, circuit breakers, contactors, thermostats, relays. [g] For motors, generators, transformers, rectifiers, synchronous converters, capacitors, industrial heating, air conditioners and heat pumps, cooking or baking equipment and other apparatus, as follows:

Rating in horsepower (HP), kilowatts (kW), kilovolt-amperes (kVA) or kilovolt-amperes- reactive (kVAR). [h] An additional fee is required for lighting fixtures, motors and other appliances that are connected to trolley and plug-in-type busways. A fee is not required for portable tools. [i] Not applicable when a fee is paid for one or more services, outlets, fixtures, appliances, power apparatus, busways, signs or other equipment. [j] Does not apply to an air-handling unit which is a portion of a factory-assembled appliance, cooling unit, evaporative cooler or absorption unit for which a permit is required elsewhere in the Mechanical Code.
[k] For each backflow-protection device other than atmospheric-type vacuum breakers. [l] Fee is applicable to all permit fees. Fee is calculated as a percentage of permit fee. 261
City of Costa Mesa
BEFORE AND AFTER - CANNABIS PERMIT FEE Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable Conditional Use Permit
1 Conditional Use Permit - Measure X Facility $21,529 $22,239 3.3% Y 2 Conditional Use Permit - Measure Q Facility $18,499 $19,109 3.3% Y Cannabis Business Permit - Initial Application
3 Measure X Facility $20,380 $21,052 3.3% Y
4 Measure Q Facility $19,732 $20,383 3.3% Y
Cannabis Business Permit - Renewal Application
5 Measure X Facility $16,996 $17,557 3.3% Y
6 Measure Q Facility $16,348 $16,887 3.3% Y
Cannabis Business Permit Modification - Major
7 Measure X Facility $3,099 $3,201 3.3% Y
8 Measure Q Facility $3,099 $3,201 3.3% Y
Cannabis Business Permit Modification - Minor
9 Measure X Facility $1,300 $1,342 3.3% Y
10 Measure Q Facility $1,300 $1,342 3.3% Y
Cannabis Business Permit - Employee Badge
11 Measure X Facility $306 $306 0.0% Y
12 Measure Q Facility $306 $306 0.0% Y
Activity Description
262
City of Costa Mesa
Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable Emergency Medical Services & Emergency Ground Ambulance Transportation
1 First Responder $275 $284 3.3% fee charged to non-resident patients transported by
ambulance
Y
2 3
Activity Description
As approved and authorized by the City Council at the inception of the City of Costa Mesa Fire & Rescue Emergency Ground Ambulance Transportation Program, the City utilizes the most recently adopted annual billing rate structure that is consistent with and replicates the most current maximum emergency ground ambulance rates that are identified through the Orange County Health Care Agency (OCHCA) EMS Policy and Procedures and approved through formal resolution by the Orange County Board of Supervisors.

Significant motor vehicle accidents and/or heavy rescue responses will be billed/charged by an hourly rate for personnel which can be identified in the most recently adopted City of Costa Mesa Hourly Rate Determination Schedule and for apparatus and equipment as outlined in the OES state rates for equipment and apparatus.

Pursuant to Government Code § 53150-53159, “Any person who is under the influence of an alcoholic beverage or any drug, or the combined influence of an alcoholic beverage and any drug, whose negligent operation of a motor vehicle caused by the influence proximately cases any incident resulting in an appropriate emergency response, and any person whose intentionally wrongful conduct proximately causes any incident resulting in an appropriate emergency response, is liable for the expense of an emergency response by a public agency to the incident." California courts have required that the "incident” involved must be something more than a standard DUI stop and investigation. Usually, a public agency will only make a request for expense recovery under Government Code § 53150 where there has been a DUI collision or other similar type of event that required a significant emergency response. Under Government Code § 53155, a driver’s liability is capped at $12,000.

In many cases following a DUI arrest involving an emergency response, the driver will receive a bill in the mail directly from the public agency requesting reimbursement for the emergency response. In other cases, the prosecution will make the reimbursement request directly from the Court as part of the DUI case. The prosecution will seek this amount as part of any DUI restitution that may be owed by the defendant.

BEFORE AND AFTER - FIRE & RESCUE DEPARTMENT EMS & EMERGENCY GROUND AMBULANCE TRANSPORT & VEHICLE ACCIDENT FEES
263
City of Costa Mesa
BEFORE AND AFTER - FIRE PREVENTION AND COMMUNITY RISK REDUCTION FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable Fire System Plan Review & Permit Fees
1 New Fire Sprinkler System NFPA 13 & 13R (includes 2 inspections) a) Plan Review and Permit Fee $775 $801 3.3% Y
b) Plus, Per Head Fee $7 $7 3.3% Y
2 New Fire Sprinkler System NFPA 13D (includes 2 inspections) a) Plan Review and Permit Fee $430 $444 3.3% Y
b) Plus, Per Head Fee $7 $7 3.3% Y
3 Tenant Improvement - New Fire Sprinkler System NFPA 13 & 13R (includes 2 inspections)
a) Plan Review and Permit Fee $300 $310 3.3% Y
b) Plus, Per Head Fee $7 $7 3.3% Y
4 Fire Alarm System (includes 1 inspection)
a) Plan Review and Permit Fee $395 $408 3.3% Y
b) Plus, Per Device $7 $7 3.3% Y
5 Commercial Hood Extinguishing System (includes 1 inspection) a) Plan Review and Permit Fee $360 $372 3.3% Y
b) Plus, Per Nozzle $7 $7 3.3% Y
6 Underground Fire Line/Hydrant System (includes 2 inspections) $485 $501 3.3% Y 7 Special Extinguishing System (includes 1 inspection) $555 $573 3.3% Y 8 Compressed Gas System (includes 1 inspection) $400 $413 3.3% Y 9 Fire Pump (includes 1 inspection) $465 $480 3.3% Y
10 Standpipe System (includes 1 inspection) $555 $573 3.3% Y 11 Additional Plan Check / Revision / Resubmittal (per hour) hourly per hour Y 12 Additional Inspections (per hour) hourly per hour Y
Building Plan Review for Fire & Life Safety
13 Single Family Residence - New (per hour) hourly per hour Y 14 Single Family Residence - Remodel/Addition (per hour) hourly per hour Y 15 Multi-Family Residential/Subdivision (per hour) hourly per hour Y 16 Grading - Rough/Precise (per hour) hourly per hour Y 17 Commercial/Industrial - New (per hour) hourly per hour Y 18 Commercial/Industrial - Remodel/Tenant Improvement (per hour) hourly per hour Y 19 Rack/High Pile Storage (per hour) hourly per hour Y
20 High-Hazard Groups H1, H2, H3, H4 or Laboratory (per hour) hourly per hour Y 21 High Rise (per hour) hourly per hour Y
22 Fire Access / Fire Master Plan (per hour) hourly per hour Y 23 Plant Processing and Extraction Equipment / Facility (per hour) hourly per hour Y 24 A, E, High Rise, I, R, S, and others at request of Building Department (per hour)
hourly per hour Y
Activity Description
264
City of Costa Mesa
BEFORE AND AFTER - FIRE PREVENTION AND COMMUNITY RISK REDUCTION FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description Fire & Life Safety Inspections (Company)
25 1 to 2,500 sq ft $50 $52 3.3% Y
26 Over 2,501 sq ft $250 $258 3.3% Y
Operational Permit Fees
27 New Operational Permit (range based on occupancy type) $270 $279 3.3% Y 28 Renewal of Operational Permit $140 $145 3.3% Y
False Alarms
29 False Alarm
a) First and Second Responses no charge no charge no charge within 12 month period N b) Each Subsequent Response $405 $418 3.3% within 12 month period Y Pre-Inspection of Community Care Licensing
30 Pre-Inspection of Community Care Licensing
a) Facility with a capacity of 25 or fewer persons $50 $50 0.0% fee set by state N b) Facility with a capacity of 26 or more persons $100 $100 0.0% fee set by state N High-Rise Building Inspection
31 High-Rise Building Inspection $360 $372 3.3% per hour Y Fire Incident Report
32 Fire Incident Report $15 $15 0.0% N
265
City of Costa Mesa
BEFORE AND AFTER - PLANNING FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable 1 ABC, Use Confirmation Requests $500 $516 3.3% Y
2 Administrative Adjustment $3,800 $3,925 3.3% Y
3 Address/Address Change $200 $207 3.3% Y
4 Appeal Fees
a) Appeal of Planning Commission Decision
i) Tier I $1,220 $1,220 0.0% [a] Y
ii) Tier II $3,825 $3,825 0.0% [b] Y
b) Appeal of Non-Planning Commission Decision
i) Tier I $690 $690 0.0% [a] Y
ii) Tier II $3,825 $3,825 0.0% [b] Y
5 Banner Permit $25 $26 3.3% Y
6 CC&Rs Review $1,000 $1,033 3.3% Y
7 Certificate of Appropriateness $7,500 $7,747 3.3% Y
8 Certificate of Compliance $1,500 $1,549 3.3% Y
9 Conditional Use Permit $7,500 $7,747 3.3% Y
10 Conditional Use Permit - Minor $3,800 $3,925 3.3% Y
11 Density Bonus Review $12,000 $12,396 3.3% Y
12 Design Review
a) Minor $1,500 $1,549 3.3% Y
b) Major $3,800 $3,925 3.3% Y
13 Designating a cultural resource No Fee No Fee 0.0% Y 14 Development Agreement $20,000 $20,000 0.0% time and materials with $20,000 min deposit
Y
15 Development Agreement Annual Review
a) Planning Commission Review $1,425 $1,472 3.3% Y
b) City Council Review $1,875 $1,937 3.3% Y
16 Development Review $1,500 $1,549 3.3% Y
17 Environmental Review/CEQA Actual Cost + 10% Actual Cost + 10% 0.0% total consultant contract estimate plus 10%
Y
18 Flood Zone Determination $250 $258 3.3% Y
19 Gate Permits $500 $516 3.3% Y
20 General Plan
a) Amendment Screening $5,000 $5,165 3.3% Y
b) Amendment $12,000 $12,396 3.3% Y
21 Home Occupation Permit (Planning Review) $100 $103 3.3% Y 22 Land Use Restriction $500 $516 3.3% Y
23 Lot Line Adjustment $1,500 $1,549 3.3% Y
24 Master Plan $9,000 $9,297 3.3% Y
25 Master Plan Minor Change $1,250 $1,291 3.3% Y
26 Master Plan Minor Amendment $6,000 $6,198 3.3% Y
27 Master Plan Major Amendment $7,500 $7,747 3.3% Y
28 Minor Modification $500 $516 3.3% Y
Activity Description
266
City of Costa Mesa
BEFORE AND AFTER - PLANNING FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description 29 Mixed Use Development Plan Screening $5,000 $5,165 3.3% Y 30 Mobile Home Park Applications
a) Mobile Home Park Conversion $7,500 $7,747 3.3% Y
b) Tenant Relocation
i) Staff Review $5,000 $5,165 3.3% Y
ii) Third Party Review Actual Cost + 10% Actual Cost + 10% 0.0% total consultant contract estimate plus 10%
Y
31 Off-site Hazardous Waste Facility
a) Notice of Intent $5,000 $5,165 3.3% [c] Y
b) Conditional Use Permit $12,000 $12,396 3.3% [c] Y
c) Local Assessment Committee (Formation and Convening) $5,000 $5,165 3.3% [c] Y 32 Planned Signing Program $1,500 $1,549 3.3% Y
33 Plan Check
a) Commercial $250 $258 3.3% Y
b) Industrial $250 $258 3.3% Y
c) Residential- Minor, 4 or less $250 $258 3.3% Y
d) Residential- Major, 5 or more $500 $516 3.3% Y
e) Landscape Plan Only $500 $516 3.3% Y
34 Pre-application Review $1,500 $1,549 3.3% Y
35 Public Entertainment Permit $1,500 $1,549 3.3% Y
36 Public Notice (500 ft Radius and Newspaper Publishing) $1 $1 0.0% per mailing address plus publishing costs
N
37 Reasonable Accommodation No Fee No Fee 0.0% N
38 Renewal/Time Extension
a) Director Action $500 $516 3.3% Y
b) Zoning Administrator Action $2,500 $2,582 3.3% Y
c) Planning Commission Action $3,800 $3,925 3.3% Y
39 Residential and Non-Residential Common Interest Development Conversion
a) Base Fee $7,500 $7,747 3.3% Y
b) Per Unit Required for Building Inspection $115 $119 3.3% Y 40 Rezone $10,000 $10,330 3.3% Y
41 Second-story notification $500 $516 3.3% Y
42 Shared Parking Approval $500 $516 3.3% Y
43 Small Cell Facility Encroachment Permit - Planning Review $1,000 $1,033 3.3% Y 44 Special Use Permit $5,500 $5,681 3.3% Y
45 Specific Plan
a) Specific Plan Amendment $12,000 $12,396 3.3% Y
b) Specific Plan Conformity Review $9,000 $9,297 3.3% Y 46 Tentative Tract Map $6,000 $6,198 3.3% Y
47 Tentative Parcel Map $3,800 $3,925 3.3% Y
48 Tree Removal Review/Tree Replacement Plan (separate from plan check)
$500 $516 3.3% Y
49 Urban Master Plan Screening $5,000 $5,165 3.3% Y
50 Use Determination $500 $516 3.3% Y
51 Variance $7,500 $7,747 3.3% Y
267
City of Costa Mesa
BEFORE AND AFTER - PLANNING FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description 52 Wireless Telecommunications Use Permit
a) Discretionary $3,500 $3,615 3.3% Y
b) Ministerial $2,500 $2,582 3.3% Y
c) Eligible Facilities Exemption Request $1,000 $1,033 3.3% Y 53 Wireless Technical Review Consultant costs plus 10%
administration fee
Consultant costs plus 10%
administration fee

0.0% Y
54 Zoning Verification Letter $250 $258 3.3% Y
[c] Minimum deposit, actual cost includes total consultant contract estimate plus 10%. [a] Includes owners and/or occupants of a property located within 500 feet of project site (excluding owners and/or occupants of the project site.) [b] 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 project site. 268
City of Costa Mesa
BEFORE AND AFTER - POLICE FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable 1 911 Audio $40 $41 3.3% Y
2 Adult Establishment Permit $315 $325 3.3% Y
3 Adult Practitioner Permit $315 $325 3.3% Y
4 Adult Practitioner Renewal $200 $207 3.3% Y
5 Citation Sign Off $10 $10 3.3% Non-Residents Only Y
6 Civil Deposition Subpoena $275 $275 0.0% $275 Deposit; Officer's total hrs x rate of pay + benefit +
mileage + misc.

N
7 Clearance Letter $30 $31 3.3% Y
8 Contract Policing Hourly Rate Hourly Rate Rate set annually per Admin Reg. 2.13
Y
9 CSI Photos $30 $31 3.3% Y
10 DAR (Digital Audio Recording) $30 $31 3.3% Y
11 DVAR (Digital Video/Audio Recording) $50 $52 3.3% Y
12 Large Party Disturbance Cost Cost Per CMMC 11-170,
11-171 & 11-172
Y
13 Livescan (Fingerprinting) $10 $10 3.3% Plus livescan fee paid to Dept. of Justice
Y
14 Massage Establishment Permit $315 $325 3.3% Y
15 Massage Establishment Renewal $200 $207 3.3% Y
16 Peddler/Solicitor Permit $75 $77 3.3% Plus livescan
fee paid to Dept. of Justice
Y
17 Police Report $9 $9 3.3% Y
18 Purge Letter $30 $31 3.3% Y
19 Repossession Receipts $15 $15 0.0% Processing fee for lien holder to retrieve towed
N
20 Subpoena (Duces Tecum) $15 $15 0.0% N
21 Vehicle Impound Storage - Public $200 $207 3.3% Fee collected by tow company and
remit to the City
Y
Activity Description
269
City of Costa Mesa
BEFORE AND AFTER - PUBLIC WORKS FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable 1 Construction Access Permit $230 $238 3.3% Y
2 Construction Dumpster Permit $40 $41 3.3% per site, for up to 2 weeks
Y
3 Curb and Gutter Permit $365 $377 3.3% Y
4 Curb Drain $305 $315 3.3% Y
5 Drainage Fee Schedule
a) Low Density Residential Use $6,283 $6,283 0.0% per acre Y b) Medium Density Residential Use $7,539 $7,539 0.0% per acre Y c) High Density Residential Use $10,052 $10,052 0.0% per acre Y d) Commercial/Industrial Use $11,309 $11,309 0.0% per acre Y 6 Driveway Approach $425 $439 3.3% Y
7 Encroachment Permit $465 $480 3.3% Y
8 Map Review $90 $93 3.3% per hour, avg time 25hrs Y
9 Lane Closure Permit $220 $227 3.3% Y
10 Oversize Load Permit
a) Single Trip $16 $16 0.0% [a] N
b) Annual $90 $90 0.0% [a] N
11 Public R/W Inspection
a) First 2 hours no charge no charge 0.0% Y
b) Each Additional Hour $125 $129 3.3% staff time
after 2nd hr
Y
12 Sidewalk Permit $380 $393 3.3% Y
13 Storm Drain Connection $425 $439 3.3% Y
14 Street Cut
a) Arterial $390 $403 3.3% Y
b) Local $300 $310 3.3% Y
15 Street Improvement Plan Check $90 $93 3.3% per hour Y 16 Utility Permit $265 $274 3.3% Y
17 Vacation/Abandonment of Right of Way $150 $155 3.3% flat fee Y 18 Water District Permit no charge no charge 0.0% State govt code precludes charging
N
19 Wheelchair Ramp $365 $377 3.3% Y
[a] Fee set to match CalTrans.

Activity Description
270
City of Costa Mesa
BEFORE AND AFTER - CONTRACTOR SELF-HAUL FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable 1 Annual Permit Fee $200 $207 3.3% N
2 Nonrefundable Per-Project Fee
Project Valuation
a) Up to $20,000 $160 $165 3.3% flat fee N
b) $20,001 - $100,000
i) Flat Fee, plus $160 $165 3.3% flat fee N
ii) Fee for each additional $1,000 in value above $20,000, or fraction thereof, up to and including $100,000
$3 $3.10 3.3% N
c) $100,001 - $500,000
i) Flat Fee, plus $400 $413 3.3% flat fee N
ii) Fee for each additional $1,000 in value above $100,000, or fraction thereof, up to and including $500,000
$2 $2.07 3.3% N
d) $500,001 or more
i) Flat Fee, plus $960 $992 3.3% flat fee N
ii) Fee for each additional $1,000 in value above $500,000, or fraction thereof
$0.50 $0.52 3.3% N
Activity Description
271
City of Costa Mesa
BEFORE AND AFTER - IMPACT FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable Traffic Impact Fees
1 Citywide Traffic Impact Fees $235 $235 0.0% per daily net trip N 2 San Joaquin Hills Corridor Traffic Impact Fee See TCA Fee Schedule See TCA Fee Schedule Park Development Fees
3 Park Development Fees
a) Single Family Residential $13,572.00 $13,572.00 0.0% per dwelling unit N b) Multi-Family Residential $13,829.00 $13,829.00 0.0% per dwelling unit N c) Apartment $5,000.00 $5,000.00 0.0% per dwelling unit N 4 Drainage Fee - See Public Works Fee Schedule
Measure Z -Open Space and Public Park Impact Fee
5 Measure Z -Open Space and Public Park Impact Fee $1.50 $1.50 0.0% per sq ft of new development N Fire System Development Fees
6 Fire System Development Fees
a) Commercial $0.285 $0.285 0.0% per sq ft N
b) Industrial $0.285 $0.285 0% per sq ft N
c) Residential $0.285 $0.285 0% per sq ft N
Activity Description
272
City of Costa Mesa
BEFORE AND AFTER - WATERSHED FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable Storm Drain Cost for Apportioned Share to Construct
Areas:
1 Area 1 $4,639.16 $4,639.16 0.0% per acre N
2 Area 2 $0.00 $0.00 0.0% N
3 Area 3 $17,567.14 $17,567.14 0.0% per acre N
4 Area 4 $9,528.61 $9,528.61 0.0% per acre N
5 Area 5 $17,098.52 $17,098.52 0.0% per acre N
6 Area 6 $5,051.68 $5,051.68 0.0% per acre N
7 Area 7 $17,571.61 $17,571.61 0.0% per acre N
8 Area 8 $27,044.16 $27,044.16 0.0% per acre N
9 Area 9 $5,355.86 $5,355.86 0.0% per acre N
10 Area 10 $12,872.73 $12,872.73 0.0% per acre N
11 Area 11 $20,162.49 $20,162.49 0.0% per acre N
12 Area 12 $11,936.40 $11,936.40 0.0% per acre N
13 Area 13 $10,219.93 $10,219.93 0.0% per acre N
14 Area 14 $20,392.55 $20,392.55 0.0% per acre N
15 Area 15 $17,472.62 $17,472.62 0.0% per acre N
16 Area 16 $3,302.64 $3,302.64 0.0% per acre N
17 Area 17 $7,783.39 $7,783.39 0.0% per acre N
18 Area 18 $0.00 $0.00 0.0% N
19 Area 19 $0.00 $0.00 0.0% N
20 Area 20 $0.00 $0.00 0.0% N
21 Area 21 $0.00 $0.00 0.0% N
22 Area 22 $0.00 $0.00 0.0% N
23 Area 23 $0.00 $0.00 0.0% N
24 Area 24 $0.00 $0.00 0.0% N
25 Area 25 $0.00 $0.00 0.0% N
26 Area 26 $0.00 $0.00 0.0% N
27 Area 27 $2,547.79 $2,547.79 0.0% per acre N
28 Area 28 $0.00 $0.00 0.0% N
29 Area 29 $0.00 $0.00 0.0% N
30 Area 30 $0.00 $0.00 0.0% N
31 Area 31 $0.00 $0.00 0.0% N
32 Area 32 $0.00 $0.00 0.0% N
33 Area 33 $0.00 $0.00 0.0% N
34 Area 34 $0.00 $0.00 0.0% N
35 Area 35 $0.00 $0.00 0.0% N
36 Area 36 $0.00 $0.00 0.0% N
37 Area 37 $0.00 $0.00 0.0% N
Activity Description
273
City of Costa Mesa
BEFORE AND AFTER - RECREATION AND FACILITY RENTAL FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable Fly Field Permits
1 Adult/Resident $50.00 $50.00 0.0% Y
2 Adult/Non-Resident $55.00 $55.00 0.0% Y
3 Learners Permit/Resident (Ages 6-14) $30.00 $30.00 0.0% Y 4 Learners Permit/Non-Resident (Ages 6-14) $35.00 $35.00 0.0% Y 5 Administrative Fee Applicable, in Addition to Base Fee $5.00 $5.00 0.0% Y Sports/Fitness
6 Open Gym/Drop In (Adult Open Gym)
a) 1 Visit $4.00 $4.00 0.0% Y
b) 10 Visits $24.00 $24.00 0.0% Y
c) 20 Visits $45.00 $45.00 0.0% Y
d) Non-Resident Fee, In Addition to Base Fee $5.00 $5.00 0.0% Y 7 Men's Basketball
a) League Fee $355.00 $355.00 0.0% per team Y
b) Officials Fee $230.00 $230.00 0.0% per team Y
Aquatic Programs
8 Lap Swim / Open Swim
a) 1 Visit
i) Adult (16+) $4.00 $4.00 0.0% Y
ii) Senior (55+ with ID) $2.00 $2.00 0.0% Y
b) 10 Visits
i) Adult (16+) $38.00 $38.00 0.0% Y
ii) Senior (55+ with ID) $18.00 $18.00 0.0% Y
c) 20 Visits
i) Adult (16+) $70.00 $70.00 0.0% Y
ii) Senior (55+ with ID) $34.00 $34.00 0.0% Y
d) 30 Visits
i) Adult (16+) $90.00 $90.00 0.0% Y
ii) Senior (55+ with ID) $42.00 $42.00 0.0% Y
9 Jr. Guard Prep $75.00 $75.00 0.0% Y
10 Learn-to-Swim Programs
a) Private Lessons $125.00 $125.00 0.0% Four 25 minute classes Y b) Group Lessons
i) Youth $50.00 $50.00 0.0% Y
ii) Adult $48.00 $48.00 0.0% Y
c) Adult Water Aerobics $48.00 $48.00 0.0% Y
11 Aqua Camp $35.00 $35.00 0.0%
12 Transfer Fee $10.00 $10.00 0.0% Y
13 Cancellation Fee $20.00 $20.00 0.0% Y
Activity Description
274
City of Costa Mesa
BEFORE AND AFTER - RECREATION AND FACILITY RENTAL FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description Youth Programs
14 L.E.A.P.
a) Resident M-F $500.00 $500.00 0.0% per month Y
b) Non-Resident $505.00 $505.00 0.0% per month Y
15 Camp Mini Explorers (Summer L.E.A.P.)
a) Resident: Tue-Thurs $192.00 $192.00 0.0% Y
b) Non-resident: Tue-Thurs $197.00 $197.00 0.0% Y
c) Resident: Mon-Wed-Fri $308.00 $308.00 0.0% Y
d) Non-resident: Mon-Wed-Fri $313.00 $313.00 0.0% Y
16 R.O.C.K.S. (school year)
a) 2 Weeks $33.00 $33.00 0.0% per session Y
b) 3 Weeks $47.00 $47.00 0.0% per session Y
c) 4 Weeks $58.00 $58.00 0.0% per session Y
d) 5 Weeks $70.00 $70.00 0.0% per session Y
e) 6 Weeks $83.00 $83.00 0.0% per session Y
Summer R.O.C.K.S.
a) Resident Free Free 0.0% Y
b) Non-resident: 4 Weeks $52.00 $52.00 0.0% per session Y c) Non-resident: 5 Weeks $63.00 $63.00 0.0% per session Y 17 Camp Costa Mesa
a) Resident: 4-day week $180.00 $180.00 0.0% per week Y b) Resident: 5-day week $200.00 $200.00 0.0% per week Y c) Non-resident: 4-day week $185.00 $185.00 0.0% per week Y d) Non-resident: 5-day week $205.00 $205.00 0.0% per week Y 18 1-Day Camp (NMUSD non-Holiday Closure Day)
a) Resident fee $51.00 $51.00 0.0% Y
b) Non-resident fee $56.00 $56.00 0.0% Y
19 Teen Camp
a) Resident: 4-day week $140.00 $140.00 0.0% per week Y b) Resident: 5-day week $165.00 $165.00 0.0% per week Y c) Non-resident: 4-day week $145.00 $145.00 0.0% per week Y d) Non-resident: 5-day week $170.00 $170.00 0.0% per week Y 20 Cancellation Fee $20.00 $20.00 0.0% Y
21 Late Fee $20.00 $20.00 0.0% Y
Senior Programs
22 Special Events $10.00 $10.00 0.0% average Y
23 Facility Rentals Varies Varies 0.0% Y
24 Senior Travel Administrative Fee $5.00 $5.00 0.0% Y
275
City of Costa Mesa
BEFORE AND AFTER - RECREATION AND FACILITY RENTAL FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description Field Rentals
25 Group Field Rental Fee
a) Group 1 - Youth Resident Non-Profit N/A N/A 0.0% fees waived per City Council ("everyone plays, no child is
turned away")
Y
b) Group 2 - NMUSD N/A N/A 0.0% fees waived (joint user agreement)
Y
c) Group 3 - Resident Youth Organization Non-Profit (90%) $25.00 $25.00 0.0% per hour per field Y d) Group 4 - Resident Youth Organization Non-Profit (75%) $25.00 $25.00 0.0% per hour per field Y e) Group 5 - Non-Resident Youth Organization Non-Profit $35.00 $35.00 0.0% per hour per field Y f) Group 6 - Non-Resident Youth Organization Non-Profit $35.00 $35.00 0.0% per hour per field Y g) Resident Adult Private (75%) $77.00 $77.00 0.0% per hour per field Y h) Non-Resident Private
a) Youth $239.00 $239.00 0.0% per hour per field Y
b) Adult $239.00 $239.00 0.0% per hour per field Y
Extra Fees
26 Softball/Baseball Field Prep $40.00 $40.00 0.0% per field Y 27 Permanent Lights $15.00 $15.00 0.0% per hour per field Y 28 Portable Lights (2 minimum) $10.00 $10.00 0.0% per unit per hour Y Tournaments and Large Event Deposits (Refundable)
29 1 Field with 20 or more participants $100.00 $100.00 0.0% per event Y 30 2 Fields $100.00 $100.00 0.0% per event Y
31 3-6 Fields $300.00 $300.00 0.0% per event Y
32 7 or more Fields $500.00 $500.00 0.0% per event Y
Downtown Recreation Center
33 Gymnasium Rental
a) Resident/Non-Profit $40.00 $40.00 0.0% per hr, 2 hr min Y b) Resident/Private $70.00 $70.00 0.0% per hr, 2 hr min Y c) Commercial Resident $95.00 $95.00 0.0% per hr, 2 hr min Y d) Non-Resident $80.00 $80.00 0.0% per hr, 2 hr min Y
e) Commercial Non-Resident $125.00 $125.00 0.0% per hr, 2 hr min Y 34 Multi-Purpose Room
a) Resident/Non-Profit $30.00 $30.00 0.0% per hr, 2 hr min Y b) Resident/Private $45.00 $45.00 0.0% per hr, 2 hr min Y c) Commercial Resident $95.00 $95.00 0.0% per hr, 2 hr min Y d) Non-Resident $55.00 $55.00 0.0% per hr, 2 hr min Y
e) Commercial Non-Resident $140.00 $140.00 0.0% per hr, 2 hr min Y 35 Pool Rental
a) Resident/Non-Profit $60.00 $60.00 0.0% per hr, 2 hr min, + staff time Y b) Resident/Private $100.00 $100.00 0.0% per hr, 2 hr min, + staff time Y c) Commercial Resident $125.00 $125.00 0.0% per hr, 2 hr min, + staff time Y d) Non-Resident $125.00 $125.00 0.0% per hr, 2 hr min, + staff time Y e) Commercial Non-Resident $155.00 $155.00 0.0% per hr, 2 hr min, + staff time Y 36 Refundable Deposit
a) Room $250.00 $250.00 0.0% per event for gym and mpr Y b) Pool $500.00 $500.00 0.0% per event for pool Y
37 Cancellation/Transfer of Reservation $25.00 $25.00 0.0% per cancellation/transfer Y 276
City of Costa Mesa
BEFORE AND AFTER - RECREATION AND FACILITY RENTAL FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description Balearic Community Center
38 Adobe Room
a) Non-Profit $35.00 $35.00 0.0% per hr, 2 hr min Y
b) Resident/Private $57.00 $57.00 0.0% per hr, 2 hr min Y c) Commercial Resident $95.00 $95.00 0.0% per hr, 2 hr min Y d) Non-Resident $85.00 $85.00 0.0% per hr, 2 hr min Y
e) Commercial Non-Resident $140.00 $140.00 0.0% per hr, 2 hr min Y f) Refundable Deposit $250.00 $250.00 0.0% per event Y
39 Sierra Room
a) Non-Profit $27.00 $27.00 0.0% per hr, 2 hr min Y
b) Resident/Private $35.00 $35.00 0.0% per hr, 2 hr min Y c) Commercial Resident $55.00 $55.00 0.0% per hr, 2 hr min Y d) Non-Resident $55.00 $55.00 0.0% per hr, 2 hr min Y
e) Commercial Non-Resident $80.00 $80.00 0.0% per hr, 2 hr min Y f) Refundable Deposit $100.00 $100.00 0.0% per event Y
Norma Hertzog Community Center
40 Costa Mesa Room (MPR)
a) Non-Profit $80.00 $80.00 0.0% per hr, 2 hr min Y
b) Resident/ Private $130.00 $130.00 0.0% per hr, 2 hr min Y c) Non-Resident/ Private $180.00 $180.00 0.0% per hr, 2 hr min Y d) Commercial/ Resident $230.00 $230.00 0.0% per hr, 2 hr min Y e) Commercial/ Non-Resident $255.00 $255.00 0.0% per hr, 2 hr min Y f) Partial Kitchen (Flat) Varies: $20 - $45 Varies: $20 - $45 0.0% per hr, 2 hr min Y g) Coffee Service
i) 50 Cups $35.00 $35.00 0.0% Y
ii) 100 Cups $45.00 $45.00 0.0% Y
h) Deposit
i) No Alcohol $500.00 $500.00 0.0% Y
ii) With Alcohol $750.00 $750.00 0.0% Y
i) Microphone
i) Extra Microphones $10.00 $10.00 0.0% Y
ii) Extra Lapel Microphone $30.00 $30.00 0.0% Y
41 Fairview
a) Non-Profit Resident $25.00 $25.00 0.0% per hr, 2 hr min Y b) Resident/ Private $30.00 $30.00 0.0% per hr, 2 hr min Y c) Non-Resident/ Private $55.00 $55.00 0.0% per hr, 2 hr min Y d) Commercial/ Resident $90.00 $90.00 0.0% per hr, 2 hr min Y e) Commercial/ Non-Resident $105.00 $105.00 0.0% per hr, 2 hr min Y f) Partial Kitchen (Flat) N/A N/A Y
g) Coffee Service
i) 50 Cups $35.00 $35.00 0.0% Y
ii) 100 Cups $45.00 $45.00 0.0% Y
h) Deposit (based on max capacity)
i) No Alcohol $100.00 $100.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
i) Microphone
i) Extra Microphones $10.00 $10.00 0.0% Y
277
City of Costa Mesa
BEFORE AND AFTER - RECREATION AND FACILITY RENTAL FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description 42 Capri Courtyard - Addition to MPR or Fairview only
a) Non-Profit Resident $25.00 $25.00 0.0% per hr, 2 hr min Y b) Resident/ Private $30.00 $30.00 0.0% per hr, 2 hr min Y c) Non-Resident/ Private $55.00 $55.00 0.0% per hr, 2 hr min Y d) Commercial/ Resident $90.00 $90.00 0.0% per hr, 2 hr min Y e) Commercial/ Non-Resident $105.00 $105.00 0.0% per hr, 2 hr min Y f) Partial Kitchen (Flat) N/A N/A Y
g) Coffee Service
i) 50 Cups $35.00 $35.00 0.0% Y
ii) 100 Cups $45.00 $45.00 0.0% Y
h) Deposit (based on max capacity)
i) No Alcohol $100.00 $100.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
i) Microphone
i) Extra Microphones $10.00 $10.00 0.0% Y
43 Event Lawn
a) Non-Profit $80.00 $80.00 0.0% per hr, 2 hr min Y
b) Resident/ Private $130.00 $130.00 0.0% per hr, 2 hr min Y c) Non-Resident/ Private $180.00 $180.00 0.0% per hr, 2 hr min Y d) Commercial/ Resident $230.00 $230.00 0.0% per hr, 2 hr min Y e) Commercial/ Non-Resident $255.00 $255.00 0.0% per hr, 2 hr min Y f) Partial Kitchen (Flat) $45.00 $45.00 0.0% per hr, 2 hr min Y g) Coffee Service
i) 50 Cups $35.00 $35.00 0.0% Y
ii) 100 Cups $45.00 $45.00 0.0% Y
h) Deposit
i) No Alcohol $500.00 $500.00 0.0% Y
ii) With Alcohol $750.00 $750.00 0.0% Y
i) Microphone
i) Extra Microphones $10.00 $10.00 0.0% Y
ii) Extra Lapel Microphone $30.00 $30.00 0.0% Y
44 Donald Dungan Library
a) Non-Profit $30.00 $30.00 0.0% Y
b) Resident/ Private $40.00 $40.00 0.0% Y
c) Non-Resident/ Private $65.00 $65.00 0.0% Y
d) Commercial/ Resident $100.00 $100.00 0.0% Y
e) Commercial/ Non-Resident $120.00 $120.00 0.0% Y
f) Deposit (based on max capacity)
i) No Alcohol $100.00 $100.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
278
City of Costa Mesa
BEFORE AND AFTER - RECREATION AND FACILITY RENTAL FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description Costa Mesa Senior Center
45 GH
a) Non-Profit $70.00 $70.00 0.0% Y
b) Resident/ Private $120.00 $120.00 0.0% Y
c) Non-Resident/ Private $170.00 $170.00 0.0% Y
d) Commercial/ Resident $220.00 $220.00 0.0% Y
e) Commercial/ Non-Resident $245.00 $245.00 0.0% Y
f) Deposit (based on max capacity)
i) No Alcohol $500.00 $500.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
g) Projector Deposit $500.00 $500.00 0.0% Y
46 GH1
a) Non-Profit $45.00 $45.00 0.0% Y
b) Resident/ Private $95.00 $95.00 0.0% Y
c) Non-Resident/ Private $145.00 $145.00 0.0% Y
d) Commercial/ Resident $195.00 $195.00 0.0% Y
e) Commercial/ Non-Resident $220.00 $220.00 0.0% Y
f) Deposit (based on max capacity)
i) No Alcohol $500.00 $500.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
g) Projector Deposit $500.00 $500.00 0.0% Y
47 GH2
a) Non-Profit $35.00 $35.00 0.0% Y
b) Resident/ Private $80.00 $80.00 0.0% Y
c) Non-Resident/ Private $130.00 $130.00 0.0% Y
d) Commercial/ Resident $180.00 $180.00 0.0% Y
e) Commercial/ Non-Resident $195.00 $195.00 0.0% Y
f) Deposit (based on max capacity)
i) No Alcohol $250.00 $250.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
g) Projector Deposit $500.00 $500.00 0.0% Y
48 101
a) Non-Profit $25.00 $25.00 0.0% Y
b) Resident/ Private $30.00 $30.00 0.0% Y
c) Non-Resident/ Private $55.00 $55.00 0.0% Y
d) Commercial/ Resident $90.00 $90.00 0.0% Y
e) Commercial/ Non-Resident $105.00 $105.00 0.0% Y
f) Deposit (based on max capacity)
i) No Alcohol $100.00 $100.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
g) Projector Deposit $500.00 $500.00 0.0% Y
279
City of Costa Mesa
BEFORE AND AFTER - RECREATION AND FACILITY RENTAL FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description 49 102
a) Non-Profit $25.00 $25.00 0.0% Y
b) Resident/ Private $30.00 $30.00 0.0% Y
c) Non-Resident/ Private $55.00 $55.00 0.0% Y
d) Commercial/ Resident $90.00 $90.00 0.0% Y
e) Commercial/ Non-Resident $105.00 $105.00 0.0% Y
f) Deposit (based on max capacity)
i) No Alcohol $100.00 $100.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
g) Projector Deposit $500.00 $500.00 0.0% Y
50 201
a) Non-Profit $20.00 $20.00 0.0% Y
b) Resident/ Private $25.00 $25.00 0.0% Y
c) Non-Resident/ Private $50.00 $50.00 0.0% Y
d) Commercial/ Resident $85.00 $85.00 0.0% Y
e) Commercial/ Non-Resident $100.00 $100.00 0.0% Y
f) Deposit (based on max capacity)
i) No Alcohol $100.00 $100.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
g) Projector Deposit $500.00 $500.00 0.0% Y
51 202
a) Non-Profit $20.00 $20.00 0.0% Y
b) Resident/ Private $25.00 $25.00 0.0% Y
c) Non-Resident/ Private $50.00 $50.00 0.0% Y
d) Commercial/ Resident $85.00 $85.00 0.0% Y
e) Commercial/ Non-Resident $100.00 $100.00 0.0% Y
f) Deposit (based on max capacity)
i) No Alcohol $100.00 $100.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
g) Projector Deposit $500.00 $500.00 0.0% Y
52 203
a) Non-Profit $20.00 $20.00 0.0% Y
b) Resident/ Private $25.00 $25.00 0.0% Y
c) Non-Resident/ Private $50.00 $50.00 0.0% Y
d) Commercial/ Resident $85.00 $85.00 0.0% Y
e) Commercial/ Non-Resident $100.00 $100.00 0.0% Y
f) Deposit (based on max capacity)
i) No Alcohol $100.00 $100.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
g) Projector Deposit $500.00 $500.00 0.0% Y
53 Library
a) Non-Profit $15.00 $15.00 0.0% Y
b) Resident/ Private $20.00 $20.00 0.0% Y
c) Non-Resident/ Private $30.00 $30.00 0.0% Y
d) Commercial/ Resident $40.00 $40.00 0.0% Y
e) Commercial/ Non-Resident $45.00 $45.00 0.0% Y
f) Deposit (based on max capacity)
i) No Alcohol $100.00 $100.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
g) Projector Deposit $500.00 $500.00 0.0% Y
280
City of Costa Mesa
BEFORE AND AFTER - RECREATION AND FACILITY RENTAL FEES Yearly Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note AllowableActivity Description 54 Patio
a) Non-Profit $20.00 $20.00 0.0% Y
b) Resident/ Private $25.00 $25.00 0.0% Y
c) Non-Resident/ Private $50.00 $50.00 0.0% Y
d) Commercial/ Resident $85.00 $85.00 0.0% Y
e) Commercial/ Non-Resident $100.00 $100.00 0.0% Y
f) Deposit (based on max capacity)
i) No Alcohol $100.00 $100.00 0.0% Y
ii) With Alcohol Not Allowed Not Allowed Y
g) Projector Deposit $500.00 $500.00 0.0% Y
Park Rental Fees
55 Private Resident/Non-Profit
a) 11-50 Attendees $15.00 $15.00 0.0% per hour, 4-hour min Y b) 51 - 150 Attendees $40.00 $40.00 0.0% per hour, 4-hour min Y c) 151+ Attendees $62.50 $62.50 0.0% per hour, 4-hour min Y 56 Private Non-Resident
a) 11-50 Attendees $52.50 $52.50 0.0% per hour, 4-hour min Y b) 51 - 150 Attendees $102.50 $102.50 0.0% per hour, 4-hour min Y c) 151+ Attendees $152.50 $152.50 0.0% per hour, 4-hour min Y 57 Commercial Companies/Organization
a) 11-50 Attendees $102.50 $102.50 0.0% per hour, 4-hour min Y b) 51 - 150 Attendees $152.50 $152.50 0.0% per hour, 4-hour min Y c) 151+ Attendees $202.50 $202.50 0.0% per hour, 4-hour min Y 58 Park Utility Fee - Gas or Electric / event $40.00 $40.00 0.0% Y 59 Basketball/Volleyball Court Rental - With Shelter $15.00 $15.00 0.0% per event - not available separately, add-on to
reservation space
Y
60 Vendor Deposit $100.00 $100.00 0.0% per event Y
61 Cancellation/Transfer of Reservation $25.00 $25.00 0.0% per cancellation/transfer Y 62 Deposit (50+ Attendees) $100.00 $100.00 0.0% if over 50 people Y 63 Administrative Fee Required Per Transaction $5.00 $5.00 0.0% Y Special Events
64 Special Event Permit $425 $425 0.0% per application Y 65 Special Event - Street Banner $115 $115 0.0% Y
Film Permit
66 Film Permit $460 $460 0.0% per location, 7 day max Y 281
City of Costa Mesa
DIGITAL VIDEO DUPLICATION FEES Yearly
Inflator
Current Fee FY 25/26 Proposed Fee Fee Change Charge Basis Note Allowable 1 Public Safety Video Review $40 $40 0.0% hourly rate Y 2 Digital Media Duplication $25 $25 0.0% Y
Activity Description
282

CITY OF

USER AND REGULATORY FEE STUDY
APRIL 20 25
ATTACHM ENT 3
283

CONTENTS

REPORTING
1 TRANSMITTAL
2 EXECUTIV E SUMMAR Y
4 PROJECT ORIENTA TIO N
8 IMPLEMENTA TION

APPENDI X

I REGIONA L FEE COMP ARISON

II COST OF S ERVICE ANALYSIS
284

April 2025

Attn: Carol Molina, Finance Director
77 Fair Drive
Costa Mesa, CA 92626

Dear Ms. Molina:

ClearSource Financial Consulting submits the following report describing the findings of our preparation of a User and Regulatory Fee Study for the City of Costa Mesa.

Please refer to the Executive Summary for the key findings of the analysis. The balance of the report and its appendix provides the necessary documentation to support those outcomes.

Thank you for the opportunity to serve the City on this topic. We are happy to continue discussion on this study as the need arises or consult with you on additional topics.

Sincerely,

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EXECUTIVE SUMMARY

STUDY OVERVIEW
The City of Costa Mesa has completed a User and Regulatory Fee Study. California cities regularly conduct these studies to justify fee amounts imposed and to optimize the overall portfolio of revenues available to the municipality to fund its services.

Industry practice and fiscal conditions in the state have led most cities to link cost recovery for services of individual action, cause, or benefit to that same individual through user fee revenue, relieving the agency’s general revenues as much as possible for use toward services of broader community benefit.

USER AND REGULATORY FEES
Cities derive annual revenue from a number of sources. These include, but are not limited to, property taxes, sales taxes, license fees, franchise fees, fines, rents, and user and regulatory fees. User and regulatory fees are intended to cover all, or a portion of, the costs incurred by the City for providing fee -related services an d ac tivities that are not otherwise provided to those not paying th e fee .

California law provides guidance regarding the amounts the City may charge for fee-related services and activities. Specifically, in order to avoid being considered taxes, the fees ch arged shall not exceed th e estim ated reasonable c ost of providing th e services , activities, or materials for which fees are charged.

At its conclusion, this study proposes for City Council review and consideration at public hearing a new Schedule of User and Regulatory Fees for application in Fiscal Year 202 5-2026 and continued update in subsequent years.

COST RECOVERY POLICY AND PRACTICE
Recovering the costs of providing fee-related services directly influences the City’s fiscal health and increases the City’s ability to meet the service level expectations of fee payers.

The services for which the City imposes a user or regulatory fee typically derive from an individual person or entity’s action, request, or behavior. Therefore, except in cases where there is an overwhelming public benefit generated by the City’s involveme nt in the individual action, a fee for servic e en sures that th e individual bears m ost, if not all, of the cost incurred by the City to provide that servic e . When a fee targets “100% or full cost recovery,” the individual is bearing the entirety of the cost. When a fee targets less than full cost recovery, another City revenue source – in most cases, the General Fund – subsidizes the individualized activity.

Generally, fees for service are targeted to full cost rec overy, inclusive of operating, direct, indirec t, and c apital costs, exc ept in cases wh ere the City Counc il cites a public interest in lower fees . The City may also be influenced by market conditions, comparing to municipalities of similar size and service profile.

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EXECUTIVE SUMMARY

FINDINGS AND PROPOSED ACTION
During the course of study, information and analysis was generated and is discussed substantively throughout this report and its technical appendix. However, summarized in the following table by broad fee category and highlighted in the subsequent findings statements, are outcomes and proposals of particular interest to City leaders and policymakers.

PRIMARY OUTCOMES
 CREDIT CARD TR AN SACTION PR OCESSING FEE
• The new fee is intended to offset processing fees charged by the City’s credit card payment processors. Accordingly, this fee will only apply to applicants that pay fees with a credit card. o The proposed fee is 2.7% of the amount paid by credit card o The fee is not intended to generate any new revenue for the City. It is simply intended to function as a pass-through collection of amounts directly payable to the City’s credit card transaction processing vendor.
 GENER AL PL AN UPD ATE F EE
• A new fee is proposed to help offset the costs of General Plan and supporting document updates:
o This is a $2,000,000+ project with a multi -year useful life, including updates of the City’s Housing Element and Zoning Code updates.
o The proposed fee will be collected as 5% of applicable permit fees  TECHN OL OGY ENHANCEMENT F EE
• A new fee is proposed to recover costs of future development related technology enhancements and system replacement:
o This is a $2,000,000+ project with a multi-year useful life. o The proposed fee will be collected as 5% of applicable permit fees  INFLATION ARY ADJUSTMENTS AND COST OF SER VICE ADJUSTMENTS F OR

VARIOUS CITY F EES
• The City Council has authorized annual fee adjustments to keep pace with regional cost inflation. The prior year annual CPI change was 3.3%. Accordingly most fees are proposed to be adjusted by 3.3%. No adjustments are proposed to fees for youth or senior services.

FISCAL IMPACT
The anticipated fiscal impact of the proposed fee ch anges is an additional $ 750 ,000 in annual General F und revenue. The primary purpose of the adjustments to the City’s fee schedule is to correlate fees to services provided. The City’s proposed fees seek to recover the City’s full cost of service for new development within the City and avoid cost recovery deterioration for non-development related fees.

Please continue to the following technical report and appendix for further discussion of this User and Regulatory Fee Study.
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PROJECT ORIENTATION

SCOPE OF STUDY
The City of Costa Mesa has completed a User an d R egulatory Fee Study , which represents an external review of prevailing practices and development of a new Schedule of User and Regulatory Fees . ClearSource Financial Consulting has prepared this analysis using FY 202 4/25 organizational information and will be available to answer questions as the City proceeds in implementing findings as it chooses.

Key tasks expected by the City from this study included the following:
 Review eligible fee -related services Citywide to establish the reasonable relationship between current fees for service and the underlying costs of service.  Calculate the full cost of service, including estimated Citywide overhead costs.  Recommend fees to be charged for each service.
 Recommend cost recovery strategies and best practices in setting fees, while considering the complexities and demands of responsible programs or departments.  Identify underlying billable rates for cost recovery opportunities and as the basis for user fees.

DIRECT SERVICES UNDER REVIEW

FEE CATEGORIES
 Credit Card Transaction Processing Fee
 Technology Enhancement Fee
 General Plan Maintenance Fee

REASON FOR STUDY
Cities derive annual revenue from a number of sources. These include, but are not limited to, property taxes, sales taxes, franchise fees, fines, rents, and user and regulatory fees. User and regulatory fees are intended to cover all, or a portion of, the costs incurred by a City for providing fee-related services and activities that are not otherwise provided to those not paying the fee.

California cities regularly conduct fee studies to justify fee amounts imposed and to optimize the overall body of revenues available to the municipality to fund its services. Widespread industry practice and fiscal conditions in the state have led most cities to link cost recovery for services of individual action, cause, or benefit to that individual through user fee revenue, relieving the agency’s general revenues for services of broader community benefit.

PREVAILING GUIDANCE
The objectives of this study, the methodology used to complete the study, and the formulation of outcomes and recommendations for future consideration were significantly influenced by Article 13C of the California Constitution and Section 66014 of the California Government Code. 288
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PROJECT ORIENTATION
Article 13C states that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payer bear a fair or reasonable relationship to the payer’s burdens on, or benefits received from, the governmental activity. Additionally, Article 13C identifies the following as items that are not defined as taxes:
 A charge imposed for a specific benefit conferred or privilege granted directly to the payer that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.  A charge imposed for a specific government service or product provided directly to the payer that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.  A charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication th ereof.  A charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property.
 A fine, penalty, or other monetary charge imposed by the judicial branch of government or a local government, as a result of a violation of law.
 A charge imposed as a condition of property development.  Assessments and property-related fees imposed in accordance with the provisions of Article XIII D.

Section 66014(a) of the California Government Code includes the following, “Notwithstanding any other provision of law, when a local agency charges fees for zoning variances; zoning changes; use permits; building inspections; building permits; …the processing of maps under the provisions of the Subdivision Map Act…; or planning services…; those fees may not exceed the estimated reasonable cost of providing the service for which the fee is charged, unless a question regarding the amount of the fee charged in excess of the estimated reasonable cost of providing the servic es or materials is submitted to, and approved by, a popular vote of two-thirds of those electors voting on the issue.

The outcomes and recommendations of the study are intended to comply with applicable federal, state, and local laws including providing confirmation that the proposed fees (“charges”) recommended as a result of this study are not taxes as defined in Articl e 13C of the California Constitution and that the proposed fees are no more than necessary to the cover the reasonable costs of the City’s activities and services addressed in the fees. Additionally, this report is intended to show that the manner in whic h the costs are allocated to a payer bear a fair and reasonable relationship to the payer’s burdens on, or benefits received from the activities and services provided by the City.
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PROJECT ORIENTATION

METHODOLOGY AND DATA SOURCES
This study calculated the estimated reasonable cost of providing various fee -related services across the City organization. Generally, the estimated reasonable cost of providing the fee-related services and activities examined in this study can be calculated as the product of the composite fully-burdened hourly labor rate of the division responsible for providin g services and the estimated labor time required to process a typical request for service.

The composite fully-burdened hourly rates calculated in this study are based on the estimated annual hours spent providing fee related services, and estimated labor, services and supplies, and Citywide overhead expenditures, sourced as follows:
 Labor expenditures for in -house personnel were based on budgeted salary and benefits expenditures.
 Contract service personnel and other services and supplies related costs were based on current industry market rates for service.
 Citywide overhead cost allocations were developed to assign a reasonable share of central service support to the City’s direct service units.
 Estimated labor time spent providing fee related services were developed based on interviews with City staff and are in-line with typical direct service ratios experienced by the consultant via studies of similar municipalities throughout California. Commonly used industry data also aided in the development of time estimates and proposed fee structures.

Once cost of service levels are identified, the City may use this information to inform targeted cost recovery from fees. Fees set at the cost of service target full cost recovery. Fees set at any amount less than the cost of service target less than full cost recovery.

An illustration of the methods used in this analysis is shown in Exhibit 1. 290
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PROJECT ORIENTATION
EXHIBIT 1 | STEPS IN ANALYZIN G COSTS OF SERVICE AND USER FEES 291
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IMPLEMENTATION

CONSIDERATIONS FOR IMPLEMENTATION
If the City decides to adopt or otherwise utilize outcomes generated through this study, it should:
 Update Systems for Fee Outcom es - Ensure that City staff begin using updated fees and associated outcomes once the updated schedule of fees becomes effective. Values should be included in all official fee schedules used throughout the City (e.g., departmental pamphlets, counter schedules, and online information). Additionally, ensure collections processes are updated, which may include coding in billing systems and training for personnel who handle fees directly with the public.
 Actively M onitor th e Use of F ees - In order to recover accurate and eligible amounts expected, the City should be diligent about tracking time to projects for time and materials billings and ensuring fees are applied in the correct amount and using the correct and intended basis for fixed fee billings.
 Monitor F eedback and Perm it Statistics - Monitor permit and application volume and applicant feedback to determine if fee modifications are resulting in any unanticipated changes in project frequency and to increase the level of detail available for revenue forecasting.
 Annually R eview an d Adjust F ee Values - In order to generally maintain pace with regional cost inflation and/or the City's salary cost inflation, the City should adjust its fees on an annual basis. A commonly used, reasonable inflation index is the annual change in the all-urban Consumer Price Index (CPI) representative of the region.  Periodic ally Perform Comprehen sive An alysis - A comprehensive fee study should be conducted periodically (e.g., every three to five years) to ensure fee levels remain at or below legal limits and are consistent with evolving service practices and local conditions. 292

APPENDIX I

FEE COMPARISON
293

REGIONAL FEE COMPARISON
Similar fees are collected by communities throughout the region and the State. The proposed fee amounts do not exceed the City’s cost of service and are in -range of amounts charged by other jurisdictions.

In order to provide the City Council with additional information as it considers potential adjustments to fees, current and proposed fees were compared to amounts collected by other agencies. For sampling purposes, the fee comparison examined fees for:
• Fountain Valley
• Huntington Beach
• Laguna Beach
• Laguna Niguel
• Long Beach
• Mission Viejo
• Newport Beach
• City of Orange
• Seal Beach
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APPENDIX I
*Fees also collected by City of Huntington Beach, Orange, and Seal Beach. For those agencies, fees are collected as percent of project valuation, so they are not compatible for chart comparison purposes.

0.00%

2.70%

2.85%

3.00%

3.00%

0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50%

COSTA MESA - CURRENT

COSTA MESA - PROPOSED

NEWPORT BEACH

SEAL BEACH

HUNTINGTON BEACH
Credit Card Transaction Fee - % of Fees Paid by Credit Card

0.00%

2.00%

3.50%

4.50%

5.00%

5.00%

10.00%

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00%

COSTA MESA - CURRENT

LAGUNA NIGUEL

LAGUNA BEACH

LONG BEACH

COSTA MESA - PROPOSED

NEWPORT BEACH

FOUNTAIN VALLEY
General Plan Maintenance Fee - % of Building Permit Fee 295

APPENDIX I
*Fees also collected by City of Mission Viejo, Orange, and Seal Beach. For those agencies, fees are not collected as percent of permit fee, so they are not compatible for chart comparison purposes.

0.00%

1.70%

2.00%

4.50%

5.00%

6.00%

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00%

COSTA MESA - CURRENT

LAGUNA BEACH

LAGUNA NIGUEL

LONG BEACH

COSTA MESA - PROPOSED

HUNTINGTON BEACH
Development Technology Fee - % of Permit Fee
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CITY OF COSTA MESA
Agenda Report
77 Fair Drive
Costa Mesa, CA 92626
File #: 25-312 Meeting Date: 6/3/2025
TITLE:

FISCAL YEAR 2025-26 PROPOSED OPERATING AND CAPITAL IMPROVEMENT PROGRAM

AND HOUSING AUTHORITY BUDGET INCLUDING ANNUAL REPORTING FOR EQUIPMENT USE POLICY PER AB 481 AND VACANCY STATUS AND RECRUITMENT STRATEGIES PER AB 2561
DEPARTMENT: CITY MANAGER’S OFFICE, FINANCE DEPARTMENT
PRESENTED BY: CECILIA GALLARDO DALY, ACTING CITY MANAGER, CAROL

MOLINA, FINANCE DIRECTOR
CONTACT INFORMATION: CAROL MOLINA, FINANCE DIRECTOR, (714) 754-5243 RECOMMENDATION:

Staff recommends the City Council:

1. Approve Resolution 2025-XX, adopting the Proposed Fiscal Year 2025-26 Operating and Capital Improvement Program (CIP) Budget; and

2. Approve Joint Resolution 2025-XX adopting the Housing Authority Budget including Economic and Community Development expenditures for Fiscal Year 2025-26; and

3. Authorize the “Emergency Exception” clause of the Capital Asset Needs Ordinance under Section 2-209.2 (a)(2), Economic Downturn, for Fiscal Year 2025-26; and

4. Approve a financial plan to reinstate $6.9 million from Fiscal Year 2025-26 in deferred projects by:
a. Reinstate the funding over a 10-year period to ensure a fiscally sustainable General Fund budget.

5. Authorize and approve staffing for the following full-time positions: increase of 1.0 FTE for Custody Officer for Police Department, decrease of 1.0 FTE for Human Resources Analyst, decrease of 1.0 FTE for Programmer Analyst I, decrease of 1.0 FTE for Senior Management Analyst (CON), and a decrease of 1.0 FTE for Community Outreach Worker as presented at the May 13, 2025 Study Session; and

6. Approve Resolution 2025-XX establishing the Fiscal Year 2025-26 Appropriations Limit for the City of Costa Mesa at $330,924,446, by using Orange County’sgrowth for population adjustment, and the California per capita income growth for inflationary adjustment; and

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7. Approve the City of Costa Mesa’s Revised Special Event Rates; and

8. City Council action is requested for the following to comply with AB 481 Police Equipment Report and Resolution:
a. Receive and file the 2025 Annual AB 481 Report and take public comment; and b. Approve Resolution 2025-XX Renewing Ordinance No. 2022-03, the AB 481 Equipment Use Policy of the City of Costa Mesa, California, governing the use of police safety equipment.

9. Receive and file the job vacancy status information required by AB 2561.

298

City of Costa Mesa
Agenda Report

77 Fair Drive
Costa Mesa, CA 92626
Item #: 25-312 Meeting Date: 6/03/2025
TITLE:

FISCAL YEAR 2025 -26 PROPOSED OPERATING AND CAPITAL IMPROVEMENT PROGRAM

AND HOUSING AUTHORITY BUDGET INCLUDING ANNUAL REPORTING FOR EQUIPMENT USE POLICY PER AB 481 AND VACANCY STATUS AND RECRUITMENT STRATEGIES PER AB 2561 DEPARTMENT: CITY MANAGER’S OFFICE, FINANCE DEPARTMENT
PRESENTED BY: CECILIA GALLARDO DALY, ACTING CITY MANAGER, CAROL MOLINA,

FINANCE DIRECTOR

CONTACT INFORMATION: CAROL MOLINA, FINANCE DIRECTOR, (714) 754-5243

RECOMMENDATION:

Staff recommends the City Council:

1. Approve Resolution 2025 -XX, adopting the Proposed Fiscal Year 2025 -26 Operating and Capital Improvement Program (CIP) Budget; and

2. Approve Joint Resolution 2025-XX adopting the Housing Authority Budget including Economic and Community Development expenditures for Fiscal Year 2025-26; and

3. Authorize the “Emergency Exception” clause of the Capital Asset Needs Ordinance under Section 2-209.2 (a)(2), Economic Downturn, for Fiscal Year 2025-26; and

4. Approve a financial plan to reinstate $6.9 million from Fiscal Year 2025-26 in deferred projects by:

a. Reinstate the funding over a 10 -year period to ensure a fiscally sustainable General Fund budget.

5. Authorize and approve staffing for the following full-time positions: increase of 1.0 FTE for Custody Officer for Police Department, decrease of 1.0 FTE for Human Resources Analyst, decrease of 1.0 FTE for Programmer Analyst I, decrease of 1.0 FTE for Senior Management Analyst (CON), and a decrease of 1.0 FTE for Community Outreach Worker as presented at the May 13, 2025 Study Session; and

6. Approve Resolution 2025-XX establishing the Fiscal Year 2025-26 Appropriations Limit for the City of Costa Mesa at $330,924,446, by using Orange County’s growth for population adjustment, and the California per capita income growth for inflationary adjustment; and

7. Approve the City of Costa Mesa’s Revised Special Event Rates; and

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8. City Council action is requested for the following to comply with AB 481 Police Equipment Report and Resolution:

a. Receive and file the 2025 Annual AB 481 Report and take public comment; and

b. Approve Resolution 2025-XX Renewing Ordinance No. 2022 -03, the AB 481 Equipment Use Policy of the City of Costa Mesa, California, governing the use of police safety equipment.

9. Receive and file the job vacancy status information required by AB 2561.

BACKGROUND:

The Fiscal Year 2025 -26 Proposed Budget includes collaboration efforts throughout all sectors, including public safety, parks, facilities, streets and housing for the City of Costa Mesa residents, businesses, and visitors. Recommended budget adjustments co ntained in the Proposed Budget were carefully selected based on operational needs, the provision of essential core services to our community, and to implement the City Council’s stated Goals and Priorities more effectively.

The current uncertainty regarding the potential impacts of United States policies on global, domestic, and local economic conditions presents a challenging environment for both consumers and businesses. As a result, it is prudent to anticipate some slowdown in revenues leading in to Fiscal Year 2025 -26, particularly in Sales Tax and Transient Occupancy Tax, while Property Tax is expected to continue to experience modest growth. During the development of the Fiscal Year 2025- 26 budget, the City diligently worked to balance the anticipated decline in revenues due to economic uncertainties and the expected increase in costs for goods and services. However, you will find that, despite the decline in revenue and increase in costs, this carefully prepared budget ensures that services and programs will continue to be provided for its residents and business community.

Guiding Principles

The guiding principles that inspired the recommendations for the FY 2025-26 Proposed Budget were created when the City Council conducted a Strategic Plann ing workshop, identifying key priorities, as well as the Mission Statement for Costa Mesa, as follows:

“The City of Costa Mesa serves our residents, businesses, and visitors by promoting a safe, inclusive, and vibrant community.”

In addition, the City Council has developed five Strategic Plan Goals:

 Strengthen the Public’s Safety and Improve the Quality of Life;  Achieve Long-Term Fiscal Sustainability;
 Maintain and Enhance the City’s Facilities, Technology, and Equipment;  Recruit and Retain High Quality Staff;
 Diversify, Stabilize, and Increase Housing to Reflect Community Needs; and  Advance Environmental Sustainability and Climate Resiliency.

The recommendations contained in the FY 2025 -26 Proposed Budget are rooted in the Strategic Plan Goals and Core Values created by the City Council for a safe, inclusive, and vibrant City. 300

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ANALYSIS:

The theme for the FY 2025 -26 Proposed Budget is, “Focused. Efficient. Resilient.” Staff will stay focused on the City’s mission to serve its community, be efficient in all services delivered, while being resilient to the changing economic conditions. This budget fully funds the Homeless and Behavioral Health Program, Information Technology Replacement Fund, Self -Insurance Fund, and the Equipment Replacement Fund to allow Departments to achieve shared goals in addressing our most pressing needs and priorities.

Funding requests contained in the FY 2025 -26 Proposed Budget help further stabilize or enhance critical City operations to better serve the public and/or provide City employees with the essential technology, equipment, and overall tools to perform their public service effectively. The Proposed Budget also helps to ensure both short-and-long-term fiscal sustainability, while committing resources to achieve Council’s goals in a fiscally prudent manner.

At the April 22, 2025 FY 2025-26 Capital Improvement Budget Study Session and May 13, 2025 FY 2025-26 Proposed Operating Study Session, City Council provided feedback to staff regarding several items to include or adjust in the Proposed Budget.

The FY 2025 -26 Proposed Operating and Capital Improvement Budget was also presented and discussed at the May 14, 2025, Finance and Pension Advisory Committee (FiPAC) meeting.

The agenda reports and videos for the April 22, 2025, and May 13, 2025 City Council Study Sessions can be found here:

April 22, 2025 Agenda Report
 FY2025-26 Proposed Capital Improvement Program Budget Study Session Staff Report and Corresponding Attachments

May 13, 2025 Agenda Report
 FY2025-26 Proposed Operating and Capital Improvement Program Budget Study Session Staff Report and Corresponding Attachments

Overview of FY 2025-26 Proposed All Funds Budget

The Fiscal Year 2025 -26 Budget reflects the operating and capital spending plans for the General Fund, Special Revenue Funds, Capital Project Funds, and Internal Service Funds. The total proposed budget for all funds is $224.4 million, a decrease of $15.4 million, or 6 percent, compared to the Fiscal Year 2024-25 Adopted Budget of $239.8 million. Table 1 illustrates these amounts.

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Table 1 – Proposed Budget – All Funds

The All-Funds Budget for the City includes both governmental and proprietary funds. Governmental funds include the General Fund, Special Revenue funds , and Capital Projects funds. The Special Revenue Funds are the grants and other restricted funds designated for specific services and purposes provided by higher levels of government (i.e., Federal, State , and County governments and agencies). Some of thes e funds receive ongoing revenue streams, while some are one -time competitive grants and require careful monitoring and record keeping. Proprietary funds are internal service funds that account for the City’s equipment replacement, self -insurance, and infor mation technology replacement.

In some instances, a fund can have available fund balances that have accumulated over time and are expended as the need arises and/or to complete specific projects within allotted timeframes. As such, the All-Funds Budget contains many funds that are separate entities with specific accounting and reporting requirements as per government regulations and , in some cases, statutes.

The City’s General Fund , however, is not restricted and can be used to provide a broad array of public services and is comprised of multiple revenue sources including taxes (such as property, sales, and hotel taxes, among others), user fees, fines, facility rentals, and development related fees, to name a few.

The Fiscal Year 2025 -26 Proposed All Fund s Budget of $224.4 million, a decrease of 6 percent from the previous adopted year, consists of an increase in the operating budget and decreases in both transfers out and the capital project budget to ensure a balanced budget.

Operating Budget

The FY 2025-26 total proposed operating budget for All Funds is $204.1 million, an increase of $4.9 million, or 2 percent, compared to the FY 2024-25 Adopted Budget of $199.3 million. The FY 2025- 26 All Funds Proposed Operating Budget is comprised of several changes including:

General Fund

 A salary and benefits budget increase of $133,286 in the Police Department for a full -time Custody Officer.
 $59,915 increase in the Police Department Operating Budget that includes gun range maintenance, mobile data connection services for first responders, and public safety health counseling services.
 $163,908 decrease in the Police Department as a result of the relocation of the Placentia Avenue evidence warehouse to a city-owned facility.
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 A budget reallocation of $ 1,500 transferring 3SI Security Systems from the Information Technology Department to the Police Department budget.
 $40,750 increase in the Information Technology Department for evidence and internal affairs software to support the Police Department.
 $50,000 increase in the Fire and Rescue Department for firefighters’ personal protective equipment, training for the Emergency Operations Center, and Telecommunications Staff.  $35,000 increase in the Public Works Department for bus shelter pressure washing.  $50,000 increase for the Economic & Development Department to support the lease agreement for the Airport Loop Drive facility, which serves as the office location for the City’s Code Enforcement Officers.
 $36,950 increase for the City Attorney’s annual contractual agreement.  $65,000 increase in the City Manager Department’s Human Resources Division to enhance the background screening process for public safety -related positions and to support organization-wide workplace reviews.
 $1.8 million increase to the annual CalPERS retirement plan payment.  $140,000 decrease in the City Manager Department’s City Clerk Division for biennial elections.

Other Funds

 $2.8 million in Measure M2 Fairshare (Fund 416) to utilize annual allocations towards eligible street and road projects.
 The Gas Tax (Fund 201) has a $120,000 budget increase to support tree trimming along City streets and medians, and a $720,590 reallocation from the General Fund for street sweeping costs.
 Appropriates year five of the Arts and Culture Master Plan (Fund 130) in the amount of $416,990, which is a budget increase of $23,495 from FY 2024 -25, for various free art experiences for the community, such as ARTVenture, Art Crawl, and Park Performances.  $319,950 increase in the Self Insurance Fund (602) for insurance premiums.  $600,000 decrease in RMRA Gas Tax Funds (Fund 251) due to Fiscal Year 2024-25 utilization of fund balance, leaving $2.9 million towards street projects.

Transfers Out

The total transfers out decreased by $6.9 million from the FY 2024 -25 Adopted Budget due to the “Emergency Exception” clause of the Capital Asset Needs Ordinance under Section 2 -209.2 (a)(2), Economic Downturn.

Transfers Out from the General Fund total $2.8 million to the Information Technology Replacement Fund (Fund 603). This amount is comprised of $474,901 towards the Citywide Computer Replacement Program, $1.2 million towards year one of a ten -year depreciation schedule for the replacement of major software programs, and salaries and benefits.

Transfers Out from Other Funds total $750,000. This represents a budget allocation of $750,000 State Grant Funding from the Department of Health Care Service s in the State Grant Fund (Fund 231) into the Housing Authority Fund (Fund 222) to support the City’s Homeless Programs. 303

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Equipment Replacement Fund

The FY 2025-26 Proposed Budget includes $1.5 million for the replacement of fleet that has exceeded its life expectancy and/or is essential to operations. The Police Department accounts for $1.1 million, which includes eight (8) Police interceptors, four (4) motorcycles, two (2) vehicles for investigations, and one (1) light truck for Park Rangers. The Fire an d Rescue Department’s proposed fleet totals $99,000, which includes one (1) light truck.

The Public Works Department FY 2025 -26 proposed fleet totals $109,000, which includes one (1) warehouse forklift, one (1) trailer, and one (1) portable generator. Add itionally, the Parks and Community Services Department’s proposed fleet totals $188,000 for one (1) large passenger van, eight (8) light towers, and one (1) utility maintenance vehicle for Fairview Park.

Information Technology Replacement Fund

This fund accounts for the accumulation of resources necessary to replace hardware and software related to information technology. As per the City’s Municipal Code Section 2-209.4, 1.5% of General Fund revenues is allocated to the Information Technology Replacement Fund (ITRF) to provide funding for the City’s immediate and future information technology needs, including those identified in the Information Technology Strategic Plan (ITSP). In the FY 2025 -26 Proposed Budget, $2.8 million will be funded from the General Fund for the Citywide Computer Replacement Program, depreciation, and staffing salaries and benefits related to the ITSP.

Capital Budget

For the proposed Capital Improvement Program (CIP) budget, staff is requesting an emergency exception to the 5% General Fund contribution towards the Capital Assets Needs (CAN) for FY 2025- 26 in the amount of $6.9 million. The funding for the deferred amount would be reinstated over a 10- year period to ensure fiscal sustainability to the General Fund budget. Public Works will be utilizing fund balance in the Capital Improvement Program (Fund 401) to fund $2.2 million in projects in the Proposed FY 2025-26 Capital Improvement Program (Fund 401).

The proposed all-funds Capital Improvement Program (CIP) budget of $16.7 million is a decrease of $11.2 million, or 40 percent, from the adopted FY 2024 -25 budget. In addition to the $16.7 million, the Capital Budget includes a $12.0 million Fire Station #2 Reconstruction project that will be funded through future bond financing. A comprehensive detail of the Proposed CIP Budget was presented to the City Council at the April 22, 2025, Study Session and is contained in further detail in the CIP section of the FY 2025-26 Proposed Budget Book. Some key capital projects include:
 Adams Avenue Active Transportation Improvements – Multipurpose Trails  Harbor Boulevard Rehabilitation Project (RMRA funds)
 Park Security Lighting Replacement
 Bicycle and Pedestrian Infrastructure Improvements
 Clean Mobility Options Program - On-Demand Transit Services  Pedestrian Safety Festival
 Fire Station #2 Reconstruction

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Public Works staff presented the one-year (FY 2025-26) and the five-year (FY 2025-26 to FY 2029- 30) Capital Improvement Program (CIP) budgets to the Finance and Pension Advisory Committee (FiPAC) on April 9, 2025, to the Parks and Community Services Commission on April 10, 2025, and to the Planning Commission during its regularly scheduled meeting on May 12, 2025.

FY 2025-26 Proposed General Fund Budget Overview
The Proposed FY 2025-26 General Fund expenditure budget is a balanced budget and totals $186.9 million. This reflects a decrease of $3.0 million, or 2 percent, from the FY 2024 -25 Adopted Budget of $189.9 million.

Table 2 is a summary of the Proposed FY 2025-26 General Fund Revenue and Expenditure Budget.

Table 2 – General Fund Revenue and Expenditure

General Fund Revenue Highlights
The FY 2025 -26 Proposed Budget for Total General Fund Revenues for all funds totals $186.9 million, a decrease of $3.0 million, or 2 percent reduction from the FY 2024 -25 Adopted Budget.

Economic and consumer challenges that impacted Sales Tax in FY 2024 -25 continue to present potential headwinds in FY 2025 -26 at the City, County, and State levels, and therefore have the biggest impact to overall City revenues. These funds typically are used to cover public safety, parks and community services, development services, and other activities and programs for residents. The Fiscal Year budget commencing July 1, 2025, will be balanced without the use of reserves.

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Graph 1 – General Fund Revenue Estimates by Category

Sales and Use Tax : Sales tax is the largest revenue category in Costa Mesa and is estimated at $75.1 million for FY 2025-26, a reduction of $6.5 million, or an 8 percent decrease from the FY 2024- 25 Adopted Budget. General economic uncertainty due to the potential impact of tariffs on businesses and consumers, coupled with persistent inflation and slower growth, could lead to a continued reduction in spending in such areas as automobiles, general consumer goods, and home renovations.

Property Tax: All combined Property Tax revenues are e stimated at $63.0 million, reflecting a 4 percent growth over the prior fiscal year budget. Despite continued higher interest rates and limited supply, the competitiveness in the housing market continues to show resilience in terms of assessed values and number of home sales.

Transient Occupancy Tax (TOT): Hotel tax revenues are estimated at $9.8 million next year, reflecting a 3 percent decrease from the FY 2024-25 Adopted Budget. There is an anticipation of a potential slowdown in general consumer spend ing, and a reduction in international visitors to California. In addition, persistent inflation and economic uncertainty impact consumer confidence, discretionary income , and savings levels, potentially impacting the travel and leisure segment of consumer spending.

Fees and Charges: Fees and Charges are estimated at $13.2 million, a decrease of $84,084, while Plan Check fee revenues are $1.8 million in FY 2025-26. Staff is proposing a Consumer Price Index (CPI) increase of 3.3% to certain fees and proposi ng a credit card processing fee of 2.7%. In addition, staff is proposing a Technology Enhancement Fee of 5% on all permit fees to recover costs of future development related technology enhancements and system replacement, as well as a General Plan Maintenance Fee of 5% for on all applicable building permit fees, to offset a portion of the periodic costs associated with General Plan and supporting document updates. Adopting a Technology Enhancement Fee and General Plan Maintenance Fee allows staff to reser ve amounts collected and use them to offset costs that may be incurred from time to time.

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Measure Q Retail Cannabis Business Tax: On November 3, 2020, voters approved the “City of Costa Mesa Retail Cannabis Tax and Regulation” Measure, also known as Measure Q, which allows cannabis retail storefront and delivery uses. City Council voted to adopt a 7 percent tax on cannabis retail businesses. The FY 2025-26 Proposed Budget includes an estimated $3.6 million in cannabis taxes, an increase of $195,583, or 6 percent, from FY 2024-25. To date, the City has approved over 20 retail storefronts and non-storefront businesses. Also, as previously approved by the City Council, the Proposed Budget has two restricted special revenue funds that are financed by the cann abis retail tax: The Arts and Culture Master Plan Fund (130) and First Time Homebuyers Fund (140).

FY 2025-26 General Fund Budget Expenditure Highlights

The Proposed General Fund Budget for FY 2025-26 reflects total expenditures of $186.9 million. Of this amount, $137.4 million is in salaries and benefits, which represents an increase of $4.2 million, or 3 percent, from the FY 2024-25 adopted operating budget of $133.1 million. The General Fund transfer of $5.9 million to the Equipment Replacement Fund was reclassified from a transfer out to an internal rent category for consistency reporting purposes. The remaining $2.8 million represents the Transfers Out to the Information Technology Fund as described earlier. The FY 2025 -26 Proposed Budget for expenditures includes the following significant items:

 A $2.8 million allocation to ensure compliance with the Information Technology needs municipal code requirement of 1.5% of the General Fund revenue.  A $1.8 million increase in the annual required CalPERS contributions.  An additional $159,819 in funding for medical, dental and vision benefits and $2.3 million in compensation increase as per contractual MOU requirements.  The continuation of the $4.3 million vacancy factor (negative appropriation).  No use of General Fund Reserves to balance the General Fund.

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Graph 2 – General Fund Total Appropriations by Department

Table 3 - General Fund Budget by Department

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Commitment to Public Safety
The FY 2025-26 Proposed Budget allocates $101.7 million as the City’s commitment to public safety, comprising both the Police and Fire Departments. Public safety budgets account for approximately 54 percent of the General Fund Proposed Budget, with 34 percent allocated to the Police Department and 21 percent to the Fire and Rescue Department. Of the 599 citywide full -time personnel, approximately 38 percent are sworn officers.

The Police Department budget includes 142 full -time sworn personnel, with one new non -sworn Custody Officer in the propos ed budget. Additionally, the Police Department manages the entire Animal Services and Enforcement Program.

The Police Department’s salaries and benefits budget increased by a net of $1.0 million, primarily due to labor contractual agreements and retireme nt benefits. As in prior years, and to balance the General Fund, the Department includes a vacancy factor of approximately $3.7 million to account for its average vacancy rate.

The Fire and Rescue Department consists of 85 full-time sworn personnel. Its salaries and benefits budget increased by a net $1.1 million, largely due to labor contractual agreements and retirement costs.

Diversify, Stabilize, and Increase Housing to Reflect Community Needs

To support the Housing Authority Fund, $750,000 is transferred in from a State Grant secured by Assemblywoman Cottie Petrie-Norris. The General Fund continues the contribution of $1.3 million to the Housing Authority Fund to support t he Homeless Shelter and behavioral health programs. This budget includes funding for all contractual obligations such as Mercy House and Bracken’s Kitchen.

Staffing Levels
On April 1, 2025, the City implemented its soft hiring freeze of employees outside of public safety.

The FY 2025-26 Proposed Budget includes 599 full -time employees, which reflects a net decrease of three (3) positions. Positions eliminated were in the City Manager’s Department, which includes one (1) Human Resources Analyst, one (1) Programmer Analyst I, and one (1) Senior Management Analyst (CON), all funded by the General Fund. Additionally, one (1) Community Outreach Worker position was eliminated in the Housing Authority Fund (Fund 222).

There is an increase of one (1) Custody Officer in the Police Department that is vital to managing the workload of the City’s current jail staff. Custody Officers are needed for the transportation and booking of arreste es to the Orange County Jail. This one additional Custody Officer will alleviate staffing challenges, promote safety and wellness, and reduce overtime costs.

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Table 4 – Change in Staffing Levels

Department Job Title FTE
Other Funds

City Manager Community Outreach Worker
(1.00)
Other Funds Total
(1.00)
General Fund

City Manager Human Resources Analyst
(1.00)
City Manager Programmer Analyst I
(1.00)
City Manager Sr. Management Analyst (CON)
(1.00)
Police Department Custody Officer

1.00 General Fund Total
(2.00)
Grand Total All Funds Impact
(3.00)

Table 5 – Budgeted Citywide Staffing Levels

611 611 611
498 497 465 466 477 478 479 477 480 492 502 530 550
588 600 602 599
0 100
200
300
400
500
600
700
Table of Organization
(Full-Time Employees)
FY 07-08 to FY 25-26
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Compensation Adjustments
The Costa Mesa City Employees Association’s (CMCEA) MOU contains a provision for CMCEA to request up to five (5) compensation inequity studies each year. This allows for at least five (5) classifications in this bargaining unit to be analyzed by Human Res ources to identify whether there are discrepancies in compensation relative to the prevailing market. A classification update may also be needed based on the duties and functions being performed by the incumbent(s). Classification studies may also result in a recommendation to adjust compensation. For 2025, CMCEA requested compensation-inequity studies resulting in recommended market adjustments for the following five classifications:

10. Graphic Designer – 8.14%

11. Multimedia Specialist – 26.55%

12. Rangemaster – 8.19%

13. Building Technician – 9.90%

14. Assistant Fire Marshal – 19.9%

The FY 2025/2026 budget includes a 10% market adjustment for the classification of Fairview Park Administrator, which was pending the results of the compensation and classification study requested in 2023. There are also classification studies for Community Services Specialists and Property and Evidence Specialists that are pending final recommendation. Should these studies result in a compensation adjustment recommendation, these recommendations will be brought forward for City Council review and approval at a future Council meeting. A compensation adjustment was also recommended by the Police Department for the Crime Prevention Specialist classification to be internally aligned with the Fire Protection Specialist position. These two classifications perform similar functions for the Police and Fire Departments, respectively, and the Human Resources Division and CMCEA support and concur with the recommended adjustment. The recommended market adjustments will be included in the new salary resolution that will be presented at a future council meeting with the adoption of the newly negotiated CMCEA side letter.

General Fund Reserves

The City continues to demonstrate strong fiscal prudence and controls on spending. The combined commitment for emergency reserves , including the declared disaster and economic reserves, is indicative of financial discipline. The General Fund reserves currently at $60.4 million exceed the City Council policy of $55 million.

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Table 6 – General Fund Reserves Balance (in millions)

FY 2025-26 Housing Authority

On January 17, 2012, under the California Housing Authorities Law, Health, and Safety Code Section 34200, et seq. (“HAL”), the City Council established the Costa Mesa Housing Authority (“Housing Authority”). Also, on that date by resolution, the City Council selected the Housing Authority to serve as the “housing successor” and to assume the housing assets, duties, functions, and obligations of the former Costa Mesa Redevelopment Agency (“Former Agency”) as of February 1, 2012.

Section 34176.1 establishes certain limitations on expenditures by housing successors; thus, each fiscal year , the Housing Authority’s funding is limited in two categor ies: (1) administrative costs, including covenant monitoring, and (2) homelessness prevention and rapid rehousing.

Homeless Outreach

The Homeless Outreach program combines the City’s Network for Homeless Solutions with the Housing Authority’s Homeless Prevention and Rapid Rehousing Program. Both programs serve the same functions and offer a broad range of services to homeless individuals, such as assisting with housing options; creating a social service registry; establishing a network of nonprofit and faith-based organizations; providing outreach services; and reconnecting new homeless persons to their families and services in their city/state of origin.

Costa Mesa Bridge Shelter

The Housing Authority accounts for all shelter operating activities, including shelter operator contract, utilities, external rents, maintenance, and other operational costs. In March 2021, the Costa Mesa Bridge Shelter on Airway Avenue was completed and opened, and a partnership was established FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
Audited Audited Audited Audited Estimate
Committed
Declared Disasters $14,125 $14,125 $14,125 $14,125 $14,125 Self-Insurance 2,000 2,000 2,000 2,000 2,000
Economic Reserves 9,000 9,000 9,000 9,000 9,000
Assigned
Compensated Absences 5,920 5,584 6,210 5,982 5,982
Police Retirement 1%
Supplemental 2,275 1,885 1,737 1,572 1,572
Workers Compensation 1,000 2,000 2,000 2,000
Facilities Reserve 2,000 2,000 2,000 2,000
Strategic Plan Project 2,000 2,000 2,000 2,000
Section 115 Trust - - - - -
Restricted
Pension and OPEB 1,778 3,061 3,178 3,367 3,367
Non-spendable 965 604 459 631 631
Unassigned 17,429 16,517 16,328 17,686 17,686
Total Fund Balance $53,492 $57,776 $59,037 $60,363 $60,363 Fund Balance Category
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between the City of Costa Mesa and the City of Newport Beach. The permanent shelter serves as a temporary home for as many as 100 men and women in need. It is intended to help unsheltered individuals and residents who are affected by homelessness.

Additionally in 2024, The City received a three-year award for the Behavioral Health Bridge Housing (BHBH) in the amount of $3.6 million from the Orange County Health Care Agency (OCHCA) to provide emergency shelter and behavioral health services at the Costa Mesa Bridge Shelter. The program implements a wide range of behavioral health care services, which include housing navigation, workforce development, case management, and housing retention.

The Housing Authority’s FY 2025 -26 budget consists of funding from a variety of resources with distinct purposes. This includes rental income, loan repayments, grants, subsidies, and contributions/donations.

Table 7 – FY 2025-26 Proposed Housing Authority Budget

FY2025-26 Appropriations Limit

Article XIII B of the Constitution of the State of California requires that the City establish annually an Appropriations Limit. This appropriations limit determines the maximum amount of specific tax revenues which an agency is allowed to spend. Pursuant to Article XIII B and its implementing legislation, the total annual appropriations limit must be calculated by adjusting the prior year’s appropriations limit for changes in the cost of living and population growth.

For the FY 2025-26 calculation, the City uses the population growth of the County of Orange of 0.31% since it yields a higher population growth factor, and the growth in California per capita income as its inflation factor as provided by the State Department of Finance (DOF).

As a result, the City’s budget is $106.5 million less, or 32% below the proposed Fiscal Year 2025-26 appropriations limit. Therefore, the City is well within its appropriations limit established pursuant to Section 7910 of the California Government Code and will not exce ed this limit during Fiscal Year 2025-26. Below is the calculation utilized for the appropriations limit.

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FY 2025-26 Special Event Rates

Regarded as one of the most livable cities in the County, Costa Mesa offers community celebrations, festivals, and parades that provide opportunities for social activity, cultural experience, creative expression, and engagement in public life. Being named the City of the Arts, special events benefit the community through exposure to artistic and creative innovation, while providing entertaining ways to relax and enjoy life.

Each year, the City hosts, sponsors and/or coordinates with other agencies and local organizations to hold programs and activities that our local citizenry enjoy and love. These activities include the OC Fair and the OC Marathon, to name a couple.

A majority of events require public safety, public works, community development, and/or parks and community services staff. As such, the City costs out an hourly rate for the City personnel requested/needed to staff these events. The City takes into consideration a position’s hourly rate and corresponding benefits attributed to the position/classification.

2025 Annual AB 481 Police Safety Equipment Report

Per AB 481, law enforcement agencies are requi red to submit an annual report to the governing body on the use of the equipment, any complaints regarding the use of the equipment, results of any internal audits on the use of the equipment, annual costs of the equipment, quantity possessed by the agency, and any intent to purchase new equipment in the following year.

CITY OF COSTA MESA

CALCULATION OF APPROPRIATIONS LIMIT
FOR FY 2025-2026
The City's Appropriations Limit for FY 25-26 is calculated as follows:

Step 1 Appropriations Limit for FY 24-25 310,115,684$
Step 2 Multiply the FY 25-26 Appropriations Limit by the cumulative growth factors for changes in the California per capita personal income and the population change for the City of Costa Mesa. 1.067100
Appropriations Limit for FY 25-26 330,924,446$
*CALCULATION OF CUMULATIVE GROWTH FACTORS:

Personal Income Factor 1.0644
Orange County Population Change 1.0017
Costa Mesa Population Change 1.0025
*(1.0644 x 1.0025) = 1.0671
Per capita Cost of Living converted to ratio (6.44+100/100) 1.0644 Orange County Population converted to ratio (0.17+100/100) 1.0017 Costa Mesa Population converted to ratio (0.25+100/100) 1.0025 * The City has the option to utilize the larger of the annual percentage change of the City or the County. 314

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Items deemed to be AB 481 equipment are used as a component of best practices for law enforcement agencies throughout the country. These tools have been tested in the field and used by law enforcement agencies to enhance both citizen safety and officer safety. Loss of these items would jeopardize the welfare of citizens and peace officers within the Costa Mesa Police Department.

The term “military equipment,” as used in AB 481, does not necessarily indicate equipment that has been used by, or obtained from, the military. Pursuant to AB 481, items deemed to be “military equipment” include, but are not limited to, unmanned aerial or ground vehicles, armored rescue vehicles, command and control vehicles, tactical robots, specialized firearms and ammunition, less lethal 40mm projectile launchers, long range acoustic devices, flashbangs, “tear gas,” and pepper balls.

CMPD is committed to using the most up -to-date tools and equipment to safeguard the citizens of Costa Mesa. Many of the items deemed to be AB 481 equipment are utilized by CMPD, and law enforcement agencies across the country, in order to specifically reduce risk to community members.

These items provide peace officers with the abilit y to safely resolve volatile situations, which otherwise might rise to the level of a lethal force encounter. Items listed in this report, and accompanying AB 481 Equipment Use Policy, also provide CMPD’s peace officers with vital tools that facilitate compliance with its comprehensive use of force policy.

Other items deemed to be AB 481 equipment include specialized rifles. Specialized rifles allow peace officers in rare and unpredictable circumstances to address lethal threats from a greater distance and with greater precision.

There is significant interest to ensure law enforcement continues to have access to equipment that will provide peace officers as many options as possible to safeguard lives, ensure safety, de-escalate volatile circumstances, and protect civil liberties. The use of the tools identified below are vital to CMPD’s mission and will continue to be strictly regulated through internal processes and oversight.

Staff seeks to authorize the CMPD’s continued use of the specified equipment ba sed upon the attached Annual AB 481 Report. The report addressed each item responsive to the requirements of AB 481 and includes a list of equipment prescribed under AB 481, including information regarding the description, cost, quantity, capabilities, purpose, authorized use, lifespan, fiscal impact, training, and legal and procedural rules for each item. A majority of these particular items were in place prior to the implementation of AB 481.

2025 Annual AB 2561 Vacancy Status Report

Effective January 1, 2025, Assembly Bill 2561 modified the Meyers -Milias-Brown Act (“MMBA”) to update Government Code section 3502.3 (“Section 3502.3”). This modification introduced new requirements for public agencies to annually report vacant positions, recruitment, and retention efforts. The annual report requires presentation of the status of vacancies and recruitment and retention efforts during a public hearing before the governing board at least once per fiscal year. The presentation of vacancies must be done prior to the adoption of the agency’s final budget. The public agency must also identify any necessary changes to policies, procedures and recruitment activities that may lead to obstacles in the hiring process and allow bargaining units to also make a presentation. If vacancies within a single bargaining unit meet or exceed 20% of authorized full-time 315

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positions in that bargaining unit, the City must provide additional information regarding vacancies and recruitments if requested by that bargaining unit.

In Fiscal Year 2024-25, the City of Costa Mesa is authorized for 595 full -time employees (excludes Council Members). The City’s overall vacancy rate as of May 3, 2025 is currently 8.74%. The vacancy rate for each bargaining group is summarized below:

Vacancies within the City arise from a range of factors, including retirements, internal promotions, resignations, and terminations. From May 4, 2024 to May 3, 2025, the City filled 93 full -time positions. During this same time frame, 48 full-time employees separated from the City.

Employee retention remains a central focus and priority for the City. The City Council included the recruitment and retention of high-quality employees as one of the City Council’s Strategic Plan Goals. However, maintaining a competitive compensation package continues to be a challenge as other agencies continue to update their compensation and benefits. Continuing to negotiate agreements with the bargaining groups that incorporate competitive increases and expan ded benefits, and conducting market studies, will assist in recruiting and retaining high quality employees.

In the past year, the City has continued its efforts to recruit and retain high quality employees , including:

 Negotiating agreements with the Costa Mesa Police Association (CMPA), Costa Mesa Police Management Association (CMPMA) and the Costa Mesa City Employees Association (CMCEA), incorporating competitive wage increases and expanded benefits including recruitment and retention benefits
 Continuing to conduct market studies per the CMCEA MOU  Implementing hiring incentives and employee referral incentives for Police Officer s and Dispatchers
 Developing a new internship program to create a pipeline for identifying and nurturing local talent
 Partnering with local educational institutions to enhance interest in working for local government
 Attending various community and college job fairs
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 Enhancing employee’s onboarding experience and continuing to encourage professional growth and development
 Continuing to explore new advertising methods and platforms including enhancing recruitment- related social media presence, and
 Continuing efforts to enhance City’s branding as an employer of choice.

The City continues to monitor vacancies and asses strategies to assist in recruiting and retaining high quality employees.

May 13, 2025, City Council Study Session

At the May 13, 2025 City Council Study Session, the City Council requested additional information for their consideration in review of the FY 25-26 Proposed Budget . This included information on consultant contracts, use of reserves, staff vacancy information, revisiting funding for the Code Enforcement Officer position, and any alternatives to utilizing the emergency exception to the 5% General Fund contribution towards the CAN for FY 2025 -26. Some of the information has been provided as part of this report. The remaining information, such as consultant contracts, will be provided as part of the Budget presentation to City Council on June 3, 2025.

Summary

The budget development process is a collaborative effort that involves input from various stakeholders to ensure that financial planning aligns with Council Goals and Priorities. Staff values and appreciates the Committee and Commissions’ and City Council’ s continued support as we navigate challenges, ever-changing circumstances, and economic uncertainty. The dedication and collective efforts of the City Council’s leadership, the contributions from Commissions and Committees, of staff, residents, businesses, and the non-profit sector all working together to improve outcomes for all residents and visitors to Costa Mesa are reflected in this carefully prepared budget to ensure services and programs will continue to be provided for everyone in the community.

The 25-26 Proposed Budget reflects the City’s commitment to serve the community, be efficient in all services delivered while being resilient to the changing economic conditions. Staff will be presenting alternatives for the FY 2025-26 Proposed Budget to ensure the efficient use of resources while ensuring the continuity of high -quality services to our community. With the FY 2025 -26 Proposed Budget, we intend to create a solid foundation for a better “Focused. Efficient. Resilient” Costa Mesa.

ALTERNATIVES

The City Council can provide alternative direction to staff on the FY 2025 -26 Proposed Operating Budget through June 30, 2025.

FISCAL REVIEW

The FY 2025-26 Operating and Capital Improvement Budget provides the funding and expenditure plan for all funds. As such, it serves as the City’s financial plan for the upcoming fiscal year. The City Council will be kept apprised regarding actual operating results for the General Fund through a quarterly financial report and the Mid-Year Budget Review. The Mid-Year Budget Review will include 317

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an update of the fiscal year’s projected revenues and expenditures, and a ny recommended adjustments, if necessary.

LEGAL REVIEW

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

CITY COUNCIL GOALS AND PRIORITIES:

This item supports the City Council goals:
 Strengthen the Public’s Safety and Improve the Quality of Life  Achieve Long-term Fiscal Sustainability
 Maintain and Enhance the City’s Facilities, Technology, and Equipment  Recruit and Retain High Quality Staff
 Diversify, Stabilize, and Increase Housing to Reflect Community Needs  Advance Environmental Sustainability and Climate Resiliency

CONCLUSION:

The Proposed FY 2025 -26 Operating and Capital Improvement Program Budget represents the strong commitment of our City Council to its residents and community partners , and promotes healthy, sustainable neighborhoods and balanced economic activity, which facilitate and aid us in continuing the quality of services we provide.

Staff recommends the City Council:

1. Approve Resolution 2025 -XX, adopting the Proposed Fiscal Year 2025 -26 Operating and Capital Improvement Program (CIP) Budget; and

2. Approve Joint Resolution 2025-XX adopting the Housing Authority Budget including Economic and Community Development expenditures for Fiscal Year 2025-26; and

3. Authorize the “Emergency Exception” clause of the Capital Asset Needs Ordinance under Section 2-209.2 (a)(2), Economic Downturn, for Fiscal Year 2025-26; and

4. Approve a financial plan to reinstate $6.9 million from Fiscal Year 2025-26 in deferred projects by:

a. Reinstate the funding over a 10 -year period to ensure a fiscally sustainable General Fund budget.

5. Authorize and approve staffing for the following full-time positions: increase of 1.0 FTE for Custody Officer for Police Department, decrease of 1.0 FTE for Human Resources Analyst, decrease of 1.0 FTE for Programmer Analyst I, decrease of 1.0 FTE for Senior Management Analyst (CON), and a decrease of 1.0 FTE for Community Outreach Worker as presented at the May 13, 2025 Study Session; and
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