Agenda — Marina City Council, May 20, 2025 (part 2 of 3)

5 EXHIBIT A-1

CITY OF MARINA

INVESTMENT REPORT
Quarter Ended March 31, 2025
Institution/Type of Investment Purchase Date Maturity Rate (%) Face Value Market Value Cost Basis Unrealized
Gain/Loss
Cash
Petty Cash - - - 2,000$ 2,000$ 2,000$ - Chase Checking Account - - - 1,634,150 1,634,150 1,634,150 - Total Cash 1,636,150$ 1,636,150$ 1,636,150$ - Investments
Local Agency Investment Fund (LAIF)
Pooled money investment - - 4.34% 60,490,318$ 60,490,318$ 60,490,318$ -$ JP Morgan Investments
US Agency Bond Federal Farm Credit Bank 3133ERPC9 08/08/24 08/12/26 4.50% 5,000,000 4,997,431 5,000,000 (2,569.00) US Treasury Bill US Treasury Bill 912797PV3 03/20/25 03/19/26 4.02% 10,000,000 9,621,844 9,614,723 7,121.20 US Treasury Bill US Treasury Bill 912797MG9 02/06/25 08/07/25 4.20% 6,124,000 6,033,406 5,999,247 34,158.33 US Treasury Bill US Treasury Bill 91282CMH1 02/04/25 01/31/27 4.20% 5,000,000 5,016,992 4,992,383 24,609.40 US Treasury Bill US Treasury Bill 912797LN5 06/28/24 06/12/25 5.04% 2,485,000 2,464,176 2,369,160 95,015.80 US Treasury Bill US Treasury Bill 912797MS3 10/17/24 10/02/25 4.16% 9,607,000 9,407,104 9,236,325 170,779.40 US Treasury Bill US Treasury Bill 91282CLY5 12/20/24 11/30/26 4.26% 2,500,000 2,512,012 2,499,414 12,597.68 US Treasury Bill US Treasury Bill 91282CMB4 12/20/24 12/15/27 4.26% 2,500,000 2,507,324 2,483,477 23,847.33 Total JP Morgan Investments 43,216,000$ 42,560,289$ 42,194,729$ 365,560$ Citizens Bank LPL
Cash - - - - 1.98% 2,083$ 2,083$ 2,083$ -$ US Treasury Bill US Treasury Bill 912797PN1 02/21/25 08/14/25 4.31% 15,308,000$ 15,069,471$ 15,000,004$ 69,467$ US Treasury Bill US Treasury Bill 912797PX9 03/24/25 09/18/25 4.17% 5,357,000$ 5,253,406$ 5,250,250$ 3,156$ US Treasury Bill US Treasury Bill 91282CFW6 01/23/25 11/15/25 4.24% 2,065,000$ 2,068,872$ 2,068,192$ 680$ US Treasury Bill US Treasury Bill 912797KS5 04/18/24 04/17/25 5.20% 5,252,000$ 5,242,079$ 4,999,788$ 242,291$ US Treasury Bill US Treasury Bill 912797LN5 06/13/24 06/12/25 5.07% 10,500,000$ 10,411,905$ 10,003,342$ 408,563$ Total Citizens Bank LPL 38,484,083$ 38,047,815$ 37,323,659$ 724,157$ Additional Identifiers/CUSIP #
-
-
-
City of Marina

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6 EXHIBIT A-1

CITY OF MARINA

INVESTMENT REPORT
Quarter Ended March 31, 2025
Institution/Type of Investment Purchase Date Maturity Rate (%) Face Value Market Value Cost Basis Unrealized
Gain/Loss
Time Value Investments
Money Market - - - - 3.97% 40,687$ 40,687$ 40,687$ -$ US Treasury Bill US Treasury Bill 91282CFZ9 11/12/24 11/30/27 4.15% 1,500,000 1,498,425 1,488,272 19,322$ US Treasury Bill US Treasury Bill 91282CGL9 02/12/25 02/15/26 4.17% 2,000,000 1,997,640 1,996,670 9,724$ US Treasury Bill US Treasury Bill 91282CJR3 01/13/25 12/31/28 4.43% 2,610,000 2,592,252 2,546,073 24,334$ US Treasury Bill US Treasury Bill 9128285M8 11/12/24 11/15/28 4.16% 1,500,000 1,458,810 1,443,222 17,611$ US Agency Bond Federal Home Loan Banks 3130B3XQ1 12/04/24 12/04/26 4.50% 2,000,000 1,998,900 2,000,000 29,250$ US Agency Bond Federal Home Loan Banks 3130B4NK3 02/12/25 01/16/26 4.20% 2,000,000 2,001,860 2,000,846 17,708$ Municipal Bonds California State GO Bonds 13063EGT7 11/07/24 08/01/29 4.24% 4,000,000 4,038,440 4,043,916 30,000$ Total Time Value Investments 15,650,687$ 15,627,014$ 15,559,686$ 147,948$ Institution/Type of Investment Additional Identifiers/CUSIP # Purchase Date Maturity Rate (%) Face Value Market Value Cost Basis Unrealized
Gain/Loss
Restricted Bond Reserve Accounts
US Bank
Money Market Abrams B Debt Service - - 3.97% 477,024$ 477,024$ 477,024$ - Money Market 2022 COPS - Transportation Improvements - - 3.82% 9,791,958$ 9,791,958$ 9,791,958$ - Total Bond Reserve Accounts 10,268,982$ 10,268,982$ 10,268,982$ - Total Cash and Investments 169,746,221$ 168,630,569$ 167,473,524$ 1,237,665$ Additional Identifiers/CUSIP #
City of Marina

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7 EXHIBIT A-2
To: Honorable Mayor and City Council Members
From: Roger Sattoof, Financial Analyst
RE: Investment Report for Fiduciary Funds: Successor Agency and the FORA Bond Reserve Account Quarter Ended March 31, 2025
Cash and Investment Summery:

Market Value
Cash 197,502$
Local Agency Investment Fund (LAIF) 3,465,235$
5,915,736$
Total 9,578,473$
Cash not earning interest 197,502$
Non earning cash as a percentage of total cash 2%
I hereby certify that sufficient investment liquidity and anticipated revenues are available to meet the Successor Agency's anticipated expenditure requirements for the next six (6) months. (California Government Code Section 53646)
Tori Hannah, Finance Director
Roger Sattoof, Financial Analyst
Restricted Money Market - Bond Proceeds/Bond Reserves
Fiduciary Funds
1 of 2
8 EXHIBIT A-2
City of Marina
Investment Report for Fiduciary Funds
Quarter Ended March 31, 2025
Successor Agency
Institution/Type of Investment Additional Identifiers/CUSIP# Purchase
Date Maturity Rate (%) Face Value Market Value Cost Basis Unrealized
Gain /Loss
Cash
Checking Account Chase Bank - - 0.00% 197,502$ 197,502$ 197,502$ - Investments
Local Agency Investment Fund (LAIF)

4.34% 3,465,235$ 3,465,235$ 3,465,235$ - Restricted Bond Reserve Accounts
US Bank
Money Market 2018 Housing Tax Allocation Bonds Series A&B - - 4.02% 1,171,257$ 1,171,257$ 1,171,257$ - Money Market 2020 Housing Tax Allocation Bonds Series A&B - - 4.00% 979,875$ 979,875$ 979,875$ - Money Market 2023 Housing Tax Allocation Bonds Series A&B - - 3.80% 1,308,000$ 1,308,000$ 1,308,000$ - Total Bond Reserve Accounts 3,459,132$ 3,459,132$ 3,459,132$ - Total Successor Agency 7,121,869$ 7,121,869$ 7,121,869$ - FORA
Institution/Type of Investment Additional Identifiers/CUSIP# Purchase
Date Maturity Rate (%) Face Value Market Value Cost Basis Unrealized
Gain/Loss
Restricted Bond Reserve Accounts
US Bank
Money Market 2020 Tax Allocation Bonds - - 3.82% 2,456,604$ 2,456,604$ 2,456,604$ - Total Cash and Investments 9,578,473$
Pooled money investment
Fiduciary Funds
2 of 2
9 EXHIBIT A-3
To: Honorable Mayor and City Council Members
From: Roger Sattoof, Financial Analyst
RE: Investment Report for Abrams and Preston Funds
Preston Park Sustainable Community Non-Profit Corporation & Abrams B Non-Profit Corporation Quarter Ended March 31, 2025
Cash and Investment Summery: Market Value
Cash 14,377,046$
Money Market 3,624,947
Total 18,001,994$
Cash not earning interest 896,354$
Non earning cash as a
percentage of total cash 5%
I hereby certify that sufficient investment liquidity and anticipated revenues are available to meet the City of Marina's anticipated expenditure requirements for the next six (6) months. (California Government Code Section 53646)
Tori Hannah, Finance Director
Roger Sattoof, Financial Analyst
Preston and Abrams

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10 EXHIBIT A-3

CITY OF MARINA

INVESTMENT REPORT
Quarter Ended March 31, 2025
Preston Park
Additional Identifiers
/CUSIP# Purchase Date Maturity Rate (%) Face Value Market Value Cost Basis Unrealized Gain /Loss Cash
Chase Bank
Checking Account Operations - - 2.20% 563,755$ 563,755$ 563,755$ - Checking Account Security Deposit - - 0.00% 584,087$ 584,087$ 584,087$ - Bridge Bank
High-Yield Checking AccountCapital Reserve Account - - 3.71% 12,916,938$ 12,916,938$ 12,916,938$ - Total Cash 14,064,780$ 14,064,780$ 14,064,780$ - Investments
Bridge Bank
Money Market Capital Reserve Account - - 0.65% 250,138$ 250,138$ 250,138$ - Total Investments 250,138$ 250,138$ 250,138$ - Total Cash and Investments - Preston Park 14,314,918$ 14,314,918$ 14,314,918$ - Abrams Park
Additional Identifiers
/CUSIP# Purchase Date Maturity Rate (%) Face Value Market Value Cost Basis Unrealized Gain /Loss Cash
Bridge Bank
Checking Account Operations - - 0.00% 312,267$ 312,267$ 312,267$ - Total Cash 312,267$ 312,267$ 312,267$ - Investments
Bridge Bank
Money Market Trust - Securty Deposits - - 0.65% 276,793$ 276,793$ 276,793$ - Money Market Trust - Reserves - - 1.00% 3,098,016$ 3,098,016$ 3,098,016$ - Total Investments 3,374,809$ 3,374,809$ 3,374,809$ - Total Cash and Investments - Abrams Park 3,687,076$ 3,687,076$ 3,687,076$ - Total Cash and Investments 18,001,994$
Institution/Type of Investment
Institution/Type of Investment
Preston and Abrams

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11 May 15, 2025 Item No. 10j(3)

Honorable Mayor and Members City Council Meeting
of the Marina City Council of May 20, 2025

Honorable Chairperson and Members Successor Agency Meeting of the Successor Agency to Marina Redevelopment Agency of May 20, 2025

Chair and Board Members of Corporation Meeting
Preston Park Sustainable Community Non-Profit Corporation of May 20,2025

CITY COUNCIL OF THE CITY OF MARINA RECEIVE THE THIRD
QUARTER BUDGET REPORT FOR FISCAL YEAR 2024/25 AND THE HDL

CITY OF MARINA SALES TAX UPDATE

REQUEST:

It is requested that the City Council and Boards:

1. Consider receiving City of Marina Third Quarter Budget Report – Fiscal Year 2024/25, which represents the quarter ended March 31, 2025.

2. Consider receiving the HdL City of Marina Sales Tax Update for the period from October – December 2024.

BACKGROUND:

In February 2025, the Finance Department introduced interim budget reporting to provide updates on the City’s fi scal condition and assist with financial plann ing. The initial reports consisted of a Quarterly Budget Report and a City of Marina HdL Sales Tax Update. The Quarterly Budget Report provided information on the City’s General Fund, Municipal Airport Fund, FORA Dissolution Fund, and the Public Facilities Impact Fee Fund. The HdL report included information on local and state sales tax performance ; the top 25 sales tax producers in the City, and sales tax activity by business type.

ANALYSIS:

The City’s Third Quarter Budget Report and the most recent HdL Sales Tax Update are included in EXHIBITS A AND B. The reporting intervals on the HdL report differ from the City’s records due to the City’s use of accrual accounting; however, the information is a good indicator of the current local economic environment and sales tax performance.

Both reports reflect the addition of the new Trader Joe’s and Ross Dress for Less stores.

Detailed information can be found within each report.

FISCAL IMPACT:

There is no fiscal impact. This report is for informational purposes.

CONCLUSION:

This report is submitted for City Council consideration and possible action.

1 __________________________
Tori Hannah
Finance Director
City of Marina

REVIEWED/CONCUR:

____________________________
Layne P. Long
City Manager
City of Marina

2 The following sections provide an overview of current revenues and expenditures for the General Fund, Airport Fund, and two key funds that relate to capital project allocations . These funds include the FORA Dissolution Fund and Public Impact Fees Fund.

When reviewing this report, it should be noted that there could be variances between the percentage of the year elapsed and the amount expended or received. This results from some revenues having uneven receipting patterns, and expenditures that may vary with the procurement of goods and services. The City continually monitors the budget on a regular basis. If any significant budgetary variances are identified, a budget amendment will be requested as part of the mid-cycle budget process; or through a separate budget amendment during the year.

An overview of each fund is presented in the subsequent sections.

General Fund Overview
General fund revenues and expenditures were $26.6 million and $29.5 million, respectively at the close of the third quarter. While expenditures were $2.9 million in excess of revenues, the Fiscal Year 24/25 Amended Budget planned for a $2.1 million drawdown from fund balance to support one -time capital improvements. This trend is also consistent with the prior year, due to the transfer of capital project funding at the beginning of the fiscal year, as well as the timing of sales tax, property tax, and transient occupancy receipts.

Revenues
The overall General Fund revenues are trending relatively consistent with the budget and prior year receipting trends. The chart below provides a comparative overview of the revenues received to date with prior year amounts, as well as a budgetary comparison . In Fiscal Year 24/25, it was projected that the combined General Fund revenues would be $38.5 million. During the first three quarters of the fiscal year, the City received $26.6 million in revenues or 69.0% of the budgeted amount. This was $3.1 million or

13.2% greater than the prior year, when an $8.4 million one-time land sale is excluded from the calculation. $23.5
$26.6
$0 $10 $20 $30 $40
Fiscal Year 23/24
Fiscal Year 24/25
Millions
General Fund Revenues
(excludes an $8.4 million one-time land sale in the prior year for comparative purposes) Remaining Budget
City of Marina
Third Quarter Budget Report – Fiscal Year 24/25

EXHIBIT A
3 An overview of revenues by major categories are provided in the following table, with a brief narrative describing any key variances.

Prior Year Annual
Amended Qtr to Date % Received Qtr to Date Difference Revenues
Property tax 10,432,421$ 5,391,797$ 51.7% 4,969,739$ 422,058$ Sales tax 10,065,000 6,142,193 61.0% 5,907,642 234,551 Transient occupancy tax 5,352,000 3,901,155 72.9% 3,297,025 604,131 Other taxes 4,055,174 2,372,650 58.5% 2,488,688 (116,038) - Subtotal Taxes 29,904,595$ 17,807,795$ 59.5% 16,663,094$ 1,144,702$ Licenses, permits, and fees 913,500 682,622 74.7% 537,020 145,602 Fines and penalties 64,600 64,181 99.4% 42,746 21,435 Intergovernmental 1,027,617 533,979 52.0% 441,600 92,379 Charges for services 1,235,800 1,519,068 122.9% 1,099,712 419,356 Use of money and property 4,584,800 5,122,354 111.7% 4,456,048 666,306 Other revenues 121,200 209,798 173.1% 97,214 112,584 OperatingSubtotal Operating 37,852,112$ 25,939,797$ 68.5% 23,337,434$ 2,602,364$ Non-Operating Revenes
Land Sales - - - 8,426,523 (8,426,523) Transfers 633,337 633,337 100.0% 133,337 500,000 Total Revenues 38,485,449$ 26,573,134$ 69.0% 31,897,294$ (5,324,159)$ Fiscal Year 24/25

Property Taxes
The City receives property tax in April and December, with a minor payment in June. The property tax receipts reflect the December payment, which includes $204,000 for a residual FORA Distribution.

Sales Tax
The City records sales tax in the period in which it is earned. Due to receipting patterns, the amount of the year elapsed is not reflective of performance. The amount received in both fiscal years represents seven months of payments. The third quarter receipts for Fiscal Year 24/25 include sales tax revenues from the new Trader Joe’s and Ross Dress for Less locations.

Transient Occupancy Tax
At the close of the third quarter, transient occupancy tax receipts were $3.9 million or 72.9% of the budget.

While the City received seven payments in both fiscal years, the revenues were $604,131 greater than the prior year. This increase is primarily due to the addition of new hotels, as well as performance.

Intergovernmental Revenues
This revenue category includes grant s, Supplemental Law Enforcement Services Fund (SLESF), and fire mutual reimbursements. This amount may vary annually based on the amount of grants awarded and the timing of grant expenditures; as well as the amount of mutual aid reimbursements.

EXHIBIT A
4 Charges for Services
Revenue receipts for the first three quarters of the fiscal year were $1.5 million or $283,000 greater than the amended budget. A large portion of the budgetary surplus is attributed to $313,000 in reimbursements from developer fee agreements, which are offset by corresponding expenditures. Additional new revenues include a $48,000 contribution from the Monterey Peninsula Unified School District for recreation programs.

These factors also contribute to the annual difference between the two fiscal years.

Use of Money and Property
This category includes interest income, facility rental revenues , and the general fund receipts from the Abrams Park and Preston Park operations. Revenues within this category exceeded the amended budget by approximately $538,000. This is primarily due to strong investment performance, and the maturity of $42 million in investments that only pay interest upon maturity.

Other Revenues
Revenues within this category are likely to vary with each year. In the first half of Fiscal Year 24/25, the City received a one-time $85,265 opioid settlement and a $35,226 damage or loss reimbursement claim. These unique receipts also contribute to the annual variance.

Transfers
The City initiates interfund transfers at the beginning of the year. All interfund revenues align with their budgetary receipts. This includes a $500,000 transfer-in from the Groundwater Stabilization Fund to assist in offsetting litigation costs.

Expenditures
At the end of the third quarter, the City expended approximately $29.5 million or 72.8% of the budgeted amount. This amount includes $4.2 million in capital outlay and capital project transfers . Operating expenditures were $25.3 million, which was $2.6 million greater than the prior year. This is primarily due to position vacancies in the prior year, as well as an increase in positions in Fiscal Year 24/25. The chart below provides a comparative overview of the operating costs through the third quarter of each fiscal year, as well as the Fiscal Year 24/25 percentage of budgetary funds expended.

$22.8
$25.3
$0 $10 $20 $30 $40
Fiscal Year 23/24
Fiscal Year 24/25
Millions
General Fund Operating Expenditures
(Excludes capital outlay and capital project transfers) Remaining Budget

EXHIBIT A
5 An overview of expenditures by the department are provided in the following table, with a brief narrative describing any significant variances.

It may be noted that the City Attorney and Engineering Departments have exceeded or will likely exceed their budgeted amount. Resolution 2024-103 provides the City Manager with the authority to transfer appropriations between the General Fund departments. Staff will be working with the City Manager to determine if there will be sufficient savings within other departments to administratively amend the budget or if Council action is needed to appropriate additional funds.

Prior Year Annual
General Fund Expenditures Amended Quarter to % Quarter to Difference Departments
City Council 56,269$ 40,299$ 71.6% 28,732$ 69,031$ City Mgr/HR/Risk 3,646,931 1,632,638 44.8% 3,412,486 (1,779,848) Information Technology 349,416 182,240 52.2% 223,608 (41,368) Finance 1,336,810 874,763 65.4% 824,662 50,101
City Attorney 800,000 776,300 97.0% 316,108 460,192
Police 10,006,818 7,146,118 71.4% 6,048,538 1,097,580
Fire 5,787,801 4,396,959 76.0% 3,671,559 725,400
Public Works 2,692,090 1,787,131 66.4% 1,364,797 422,334 Planning 1,682,850 936,659 55.7% 936,591 67
Engineering 1,236,838 1,297,949 104.9% 1,101,072 196,877 Building Inspection 849,815 467,499 55.0% 475,271 (7,773) Economic Development 334,644 101,061 30.2% 114,123 (13,062) Recreation & Culture 1,600,069 1,102,861 68.9% 909,813 193,048 Citywide Non-Department 4,590,168 4,557,650 99.3% 3,355,841 1,201,809 Subtotal Operating 34,970,519$ 25,300,126$ 72.3% 22,783,202$ 2,574,388$ Non-Operating Expenditures
Capital Outlay 2,200,701$ 825,486$ 37.5% 42,423$ 783,063$ Citywide Transfers Out 3,408,768 3,408,768 100.0% 19,290,292 (15,881,524) Subtotal Non-Operating 5,609,469$ 4,234,254$ 75.5% 19,332,715$ (15,098,461)$ - Total Expenditures 40,579,988$ 29,534,380$ 72.8% 42,115,917$ (12,524,072)$ Fiscal Year 24/25

City Manager
The department expenditures were $1.6 million or 44.8% of the amended budget, which is $1.8 million less than the prior year. The primary factors contributing to the variances include a $1.5 million reduction in the use of specialized legal services for groundwater stabilization litigation, salary savings from the vacant Assistant City Manager position, and timing of vendor payments.

City Attorney
Legal expenditures through the third quarter were $776,300 or 97% of the budgeted amount. This is also $460,192 greater than the prior year. Th e budgetary and annual difference can primarily be attributed to the increased use of legal services and timing differences of payments. An administrative or Council budget amendment may be initiated to bring the department budget into balance.

EXHIBIT A
6 Police
Police Department expenditures were 71.4% of the budgeted amount; and $1.1 million greater than the prior year. Approximately $593,000 of the annual variance is primarily due to multiple position vacancies in the prior year ; with the remaining increases associated with planned costs for new annual software subscription costs; training and safety equipment for new officers; and various other expenditures.

Fire
The expenditures through the third quarter were in alignment with the percentage of the year that has elapsed, however they were $725,400 greater than the prior year. Approximately $572,000 of the annual difference can be attributed to the addition of new positions. The remaining $153,000 variance represents the planned purchase of personal protective gear, fire prevention materials; and other supplies.

Engineering
Engineering expenditures exceeded the a mended budget by approximately $61,000. The primary factor contributing to the overage was $245,000 in additional costs that were reimbursed through fee agreements.

An administrative or Council budget adjustment will be initiated for a revised estimate.

Public Works
The Public Works department expenditures were 66.4% of the budgeted amount , which is approximately $422,000 greater than the prior year. The annual variance reflects $277,000 in additional personnel costs associated with new positions; and $146,000 for increased facility, grounds, and street maintenance.

Recreation and Culture
Recreation expenditures represented 68.9% of the budgeted amount. The annual difference of $193,048 relates to prior year position vacancies and the expansion of recreation programs.

Citywide Non-Department
The Citywide non -department costs were $4.6 million or 99.3% of the budget. While costs could exceed the budgeted amount, the majority of the expenditures were made during the first half of the fiscal year.

This includes annual property, workers compensation, and liability insurance premiums ; and the PERS unfunded liability payment. Factors contributing to th e $1.2 million annual variance include a $352,000 groundwater-related settlement, timing differences in insurance payments, and a $399,000 increase in the unfunded pension liability payment.

Other Funds
Municipal Airport
In Fis cal Year 24/25, the Airport revenue budget was estimated at $2.2 million. During the first three quarters of the fiscal year, the City received $1.8 million or 81.1% of the amended budget. The annual variance of $288,521 was driven by increased facility and land rental revenues and higher interest earnings.

The third quarter expenditures were $996,000 or 53.8% of the annual budget. The annual operating and budgetary difference reflect salary savings from partial position vacancies during the current fiscal year, as well as spending patterns. While the Fi scal Year 24/25 expenditures were $1,077,493 less than the prior year, the majority of the difference can be attributed to a $ 694,860 reduction in capital project transfers.

EXHIBIT A
7 FORA Dissolution Fund
The FORA Dissolution Fund includes bond proceeds and on-going development fees for residential and commercial projects within the former Fort Ord area. Funds can only be spent on blight removal, capital projects, or habitat management in the stated FORA boundaries.

In Fiscal Year 24/25, the City originally budgeted for $3.1 million in revenues; however revenues through the third quarter were $ 7.8 million. This variance resulted from a one -time receipt of $5.1 million in development-related fees that were previously held in escrow (reduced by $753,000 in fees that were applicable to the Transportation Agency of Monterey County (TAMC); and $3.4 million in recurring development-related fees and interest earnings. This can be contrasted with the prior year’s receipts of $2.9 million, which include $995,133 in bond proceeds and $1.9 million in fees and interest earnings.

The expenditures within this fund reflect capital transfers, as well as capital projects and habit management activities. The Fiscal Year 24/25 expenditures are anticipated to be $3.8 million less than the budgeted amount due to accrual of historical TAMC fees that were recognized at the end of the last fiscal year.

$2.1
$1.0
$1.5
$1.8
$0.0 $0.5 $1.0 $1.5 $2.0 $2.5
FY 23/24 Expenses
FY 24/25 Expenses
FY 23/24 Revenues
FY 24/25 Revenues
Millions
Airport Revenues and Expenditures
(Through Third Quarter)
Remaining Budget
$4.7
$4.3
$2.9
$0.0 $2.0 $4.0 $6.0 $8.0 $10.0
FY 23/24 Expenditures
FY 24/25 Expenditures
FY 23/24 Revenues
FY 24/25 Revenues
Millions
FORA Revenues and Expenditures
(Through Third Quarter)
Remaining Budget
$8.0

EXHIBIT A
8 Public Impact Fees
The City receives public impact fees from new developments. The related receipts can only be spent on capital projects or purchases that align with the impact from the new growth.

The revenues received through the third quarter were approximately $3.8 million or 66.1% of the budgeted amount. While this is $ 514,000 less than the prior year, development activities take place at irregular intervals. Historically, this fund has received an average of $ 6.3 million annually over the last four years .

While it is anticipated that development activities will continue to be strong in the fourth quarter, the annual receipts may be below the budgetary projections.

The expenditures within this fund reflect transfers to the capital improvement fund. The contribution reflects a reduced amount, with additional funds appropriated in the next budget cycle.

An overview of the annual and comparative budgets is provided in the following table.

Amended Qtr to Date % Budget
Prior Year Qtr
to Date
Annual
Difference
Revenues
Interest Income 373,000$ 671,113$ 179.9% 532,267$ 138,846$ Intersections Fee 637,000 351,613 55.2% 859,028 (507,415) Roadways Fee 1,536,000 1,005,479 65.5% 1,449,553 (444,074) Public Safety Fee 212,000 126,211 59.5% 150,149 (23,937) Public Building Fee 748,000 454,190 60.7% 344,947 109,243 Parks Fee 2,228,000 1,180,982 53.0% 967,547 213,435 Total Revenues 5,734,000$ 3,789,589$ 66.1% 4,303,491$ (513,902)$ Expenditures
Capital Transfers 5,000,000$ 5,000,000$ 100.0% 7,850,000$ (2,850,000)$ Total expenditures 5,000,000 5,000,000 100.00% 7,850,000 (2,850,000)- Net operating difference 734,000$ (1,210,411)$ (3,546,509)$ (2,336,098)$ Public Facility Impact Fees

EXHIBIT A
9 www.hdlcompanies.com | 888.861.0220
Q4 2023*
Q4 2024*
Legend
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
SALES TAX BY MAJOR BUSINESS GROUP*Allocation aberrations have been adjusted to reflect sales activity General
Consumer
Goods
County
and State
Pools
Restaurants
and
Hotels
Fuel and
Service
Stations
Food
and
Drugs
Building
and
Construction
Autos
and
Transportation
Business
and
Industry
TOP 25 PRODUCERSCITY OF MARINA HIGHLIGHTS
Published by HdL Companies in Spring 2025
7 Eleven
Best Buy
Brass Tap
Catalyst
Chipotle
Five Below
Grocery Outlet
Jack in the Box
Kohls
Las Animas Concrete
Marina
Luckys
Marina Chevron
Marina Fast Fill Market
McDonald’s
Michaels Arts & Crafts
Old Navy
REI
Ross
Sanctuary Beach Resort
Shell
Stiizy
Target
Teriyaki Madness
Trader Joe’s
Walmart Supercenter

SALES TAX UPDATE

CITY OF MARINA
4Q 2024 (OCTOBER - DECEMBER)
Marina’s receipts from October through
December were 10.6% above the fourth
sales period in 2023. Excluding reporting
aberrations, actual sales were up 9.8%.

New outlets boosted results. These new
outlets are boosting food-drug, general
consumer goods and restaurants-hotel
groups.

In restaurants-hotels there were gains
that furthered the positive results. In
food-drug there was slowing that offset
some of the growth from the new outlet.

And in general consumer goods, there
was also slowing in the existing outlets.

Lower prices at the pumps caused
the drop in service stations. Building-
construction was down in line with
statewide average; the industry has been
slowing for the last 8 quarters.

These new outlets boosting point of sale
results in an increase in the city’s portion
of the pool leading to a 10.8% increase in
the allocation.

Voter approved Measure N was impacted
by the above, but the gains were lessened
by locals purchasing fewer vehicles.

Net of aberrations, taxable sales for all
of Monterey County declined 0.8% over
the comparable time period; the Central
Coast region was down 0.8%.

TOTAL:

9.1%
$2,008,824
Measure N
TOTAL: $ 882,475

9.8% -0.8% -1.1%

COUNTY STATE
MARINA
4Q2024

EXHIBIT B
10 TOP NON-CONFIDENTIAL BUSINESS TYPES
Q4 '24
Marina
Business Type Change Change Change
County HdL State
-13.0%-6.4%-0.1% 70,063 Service Stations

1.9%3.0%20.8% 49,475 Casual Dining

1.7%4.4%0.5% 48,459 Quick-Service Restaurants
-0.9%2.5%48.1% 36,311 Grocery Stores

1.6%2.8%11.6% 24,191 Fast-Casual Restaurants
-2.3%-6.4%-42.2% 8,923 Convenience Stores/Liquor
-1.8%-3.7%1.8% 5,447 Light Industrial/Printers
-5.2%-2.0%15.7% 4,682 Auto Repair Shops
-1.9%8.0%26.2% 2,533 Government/Social Org.

2.0%-0.6%27.2% 2,100 Leisure/Entertainment
*Allocation aberrations have been adjusted to reflect sales activity $0
$5,000
$10,000
$15,000
$20,000
Marina
12 2416 20
County California
SALES PER CAPITA*
*ADJUSTED FOR

ECONOMIC DATA
SALES TAX UPDATECITY OF MARINA4Q 2024

STATEWIDE RESULTS
California’s local one cent sales and
use tax receipts during the months of
October through December were 1.1%
lower than the same quarter one year ago
after adjusting for accounting anomalies.

The fourth quarter is notably the highest
sales tax generating period of the year
but exhibited diminished year-over-year
returns as consumers struggled with tariff
concerns and pulling back on discretionary
spending.

For the past eight quarters - two calendar
years - statewide results have declined;
led mostly by autos-transportation and
building-construction suppressed activity
due to the sustained high interest rate
environment. Specifically, this quarter,
as new and used car returns pulled back,
only leasing activity improved likely
representing buyers willingness to wait for
more advantageous economic conditions
before committing to long term obligations.

Furthermore, building-construction drops
spanned multiple categories including
building materials, plumbing/electrical
and contractors as property owners delay
repairs and improvements until they’re
more comfortable tapping available equity.

During this holiday shopping period, brick-
and-mortar general retailers slumped 2.4%,
further hindered by lower gas prices. Recent
closures by merchants selling variety/
low priced items and weaker returns from
department stores were most impactful.

As consumers appeared more interested in
value/discounted items vs higher priced/
luxury goods, overall statewide receipts
revealed growth from online retailers by
way of local returns through fulfillment
centers and allocations via each county’s
use tax pool demonstrating a desire to
spend, just more through different vendors
which shifted local tax distributions.

Fuel and service stations experienced a
drop of 14% largely due to the decreased
price of global crude oil. While this dynamic
hurt the sector results, it did allow for more
disposable income to be spent in other areas
and does not appear to be changing in the
near term.

Revenue from restaurants sustained a
modest gain of 1.3%, with only a waning
from fine dining establishments – consistent
with spending trends in other sectors. As
eateries try and balance higher menu prices
and demand, a ‘return to office’ call by
businesses could inspire future increased
foot traffic for many venues in metropolitan
centers.

The fourth quarter also marks the end of the
calendar year. As expected 2024 was 1.2%
lower than 2023 with most sectors taking
a hit. Only restaurants, business-industry
and allocations via the county use tax pools
improved.

With national tariff discussions happening
at the federal level, consumers start 2025
wondering if higher priced goods and
difficult decisions are on the horizon. Also,
the Federal Reserve Board hasn’t signified
any relief by way of lower interest rates
leaving only minimal growth expectations to
come. The theme of the current economic
outlook is uncertainty.

EXHIBIT B
11 ORDINANCE 2025-
AN ORDINANCE OF THE CITY OF MARINA AMENDING TITLE 15 ENTITLED “BUILDINGS AND CONSTRUCTION”, BY ADDING CHAPTER 15.07, “FIRE HAZARD SEVERITY ZONES” , TO THE MARINA MUNICIPAL CODE
THE CITY COUNCIL OF THE CITY OF MARINA DOES ORDAIN AS FOLLOWS:

1. Title 15 amended. Title 15, entitled “Buildings and Construction” is hereby amended by adding a new section, Chapter 15.07 “Fire Hazard Severity Zones”, to the Municipal Code to read as set forth on the attached Exhibit “A” and incorporated herein by this reference thereto.

2. Effective Date. This ordinance shall take effect and be in force thirty (30) days from and after its final passage.

3. Posting of Ordinance. Within fifteen (15) days after the passage of this ordinance, the City Clerk shall cause it to be posted in the three (3) public places designated by resolution of the City Council.

The foregoing ordinance was introduced at a regular meeting of the City Council of the City of Marina duly held on 6th day of May 2025, and was passed and adopted at a regular meeting duly held on the 20th day of May 2025, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

Bruce C. Delgado, Mayor
ATTEST:
____________________________
Anita Sharp, Deputy City Clerk
Agenda Item: 10 L(1)
City Council Meeting of
May 20, 2025
1 EXHIBIT A

CHAPTER 15.07

Section-15.07.00-Adoption of Fire Hazard Safety Zone Map

A. The City of Marina hereby designates the Fire Hazard Severity Zones as recommended by the California Department of Forestry and Fire Protection pursuant to Government Code Section 51178.

B. The City hereby adopts by reference the Fire Hazard Safety Zone Map from the Office of the State Fire Marshal (OSFM) for the California Department of Forestry and Fire Protection into the Marina Municipal Code for the parcels that are within the City of Marina boundaries as defined by the Local Agency Formation Commission (LAFCO).

The map, approved by the city, is hereby incorporated by reference, and entitled “City of Marina Fire Hazard Severity Zones,” dated March 10, 2023.

The official map is also located electronically on the following website:
https://cityofmarina.org/107/Community-Development

2 EXHIBIT B

3 ORDINANCE NO. 2025-05

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MARINA AMENDING TITLE 15, CHAPTER 15. 32 ENTITLED “ADOPTION OF THE CALIFORNIA FIRE CODE (CFC), SECTION 15.32.890, SUBSECTION 5609.1.4-r OF THE MARINA MUNICIPAL CODE THE CITY COUNCIL OF THE CITY OF MARINA DOES ORDAIN AS FOLLOWS:

1. Title 15, Chapter 15.32 amended. Title 15, Chapter 15.32 entitled “Adoption of the California Fire Code” Section 15.32.890, Subsection 5609.1.4-r is hereby amended to read, “No Fireworks shall be sold or discharged on the Marina Municipal Airport property, except by approval of the City’s Fire Chief during a City-sponsored event in an area designated by the Chief. Such fireworks must be certified as “safe and sane” by the State Fire Marshal's Office.”

2. Effective Date. This Ordinance shall be in full force and effect on thirty (30) days after its final passage and adoption.

3. Posting of Ordinance. Within fifteen (15) days after the passage of this Ordinance, the City Clerk shall cause it to be posted in the three (3) public places designated by resolution of the City Council.

The foregoing Ordinance was introduced at a regular meeting of the City Council of the City of Marina duly held on the 6th day of May 2025, and was passed and adopted at a regular meeting duly held on the 20th day of May 2025, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

Bruce C. Delgado, Mayor
ATTEST:
__________________________
Anita Sharp, Deputy City Clerk
Agenda Item: 10 L(2)
City Council Meeting of
May 20, 2025
1 EXHIBIT A

Section 15.32.890, Subsection 5609.1.4-r is hereby amended to read, “No Fireworks shall be sold or discharged on the Marina Municipal Airport property, except by approval of the City’s Fire Chief during a City-sponsored event in an area designated by the Chief. Such fireworks must be certified as “safe and sane” by the State Fire Marshal's Office.”

2 May 14, 2025 Item No. 11a

Honorable Mayor and Members City Council Meeting
of the Marina City Council of May 20, 2025

CITY COUNCIL OPEN PUBLIC HEARING, TAK E TESTIMONY
FROM THE PUBLIC AND CONSIDER ADOPTING RESOLUTION NO.
2025-, CONFIRMING DIAGRAM, ASSESSMENT AND ORDERING
LEVY OF $ 182.42 FOR FY 2025-26 ASSESSMENT FOR THE

SEABREEZE LANDSCAPE MAINTENANCE ASSESSMENT
DISTRICT, AND; AUTHORIZING THE CITY CLERK TO FILE A

CERTIFIED COPY OF THE DIAGRAM AND ASSESSMENT WITH

THE MONTEREY COUNTY AUDITOR -CONTROLLER PRIOR TO
AUGUST 1, 2025

REQUEST:

It is requested that the City Council:

1. Open public hearing and take testimony from the public;

2. Consider adopting Resolution No. 20 25-, confirming diagram, assessment and ordering levy of $18 2.42 for FY 2025-26 assessment for Seabreeze Landscape Maintenance Assessment District, and;

3. Authorize the City Clerk to file a certified copy of the diagram and assessment with the Monterey County Auditor-Controller prior to August 1, 2025

BACKGROUND:

At the regular meeting of June 4, 1996, the City Council adopted Resolution No. 1996 -62, ordering the formation of the Seabreeze Landscape Maintenance Assessment District pursuant to Streets and Highway Code §22594 and the Landscaping and Lighting Act of 1972 to maintain certain improvements required of new development as a condition of the subdivision approvals.

The Landscaping and Lighting Act of 1972 requires an annual update report to be prepared which includes the costs to maintain the improvements of the Districts and what the proposed assessments will be to provide for that maintenance.

At the regular meeting of May 6, 202 5, the City Council adopted Resolution No. 2025-31, receiving the FY 2025-26 Engineer’s Report for Seabreeze Landscape Maintenance Assessment District and calling a public hearing for May 20, 2025, on the proposed intention to levy and collect assessments for the District.

ANALYSIS:

Based on the Engineer’s Report (Exhibit A) , the assessment has been set in the amount of $182.42. This is the same amount as last year’s assessment and is the upper limit set by the last the assessment district at its formation in 1996.

1 Staff have been coordinating with various District homeowners to discuss further beautification and improvements to the District. Due to public safety concerns, sound wall reconstruction began in Fiscal Year 2021 -22. Staff are recommending the continued assessment of $182.42 in order to obtain the required fund balance to continue these improvements.

FISCAL IMPACT:

Should the City Council approve this request, the anticipated revenue for the FY 2025-26 assessment levy is $6,749.54 for the purpose of the landscape maintenance district.

Levying of the assessment is the first step to collect the assessments to fund the landscape maintenance district.

CONCLUSION:

This request is submitted for City Council consideration and possible action.

Respectfully submitted,

____________________________
Edrie Delos Santos, P.E.

Public Works Department
City of Marina

REVIEWED/CONCUR:

____________________________
Ismael Hernandez
Public Works Director
City of Marina

_____________________________
Layne P. Long
City Manager
City of Marina

2 RESOLUTION NO. 2025-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MARINA
CONFIRMING DIAGRAM AND ASSESSMENT AND ORDERING LEVY OF $182.42 FOR FY 2025-26 ASSESSMENT FOR THE SEABREEZE LANDSCAPE

MAINTENANCE ASSESSMENT DISTRICT AND AUTHORIZING THE CITY CLERK

TO FILE A CERTIFIED COPY OF THE DIAGRAM AND ASSESSMENT WITH THE MONTEREY COUNTY AUDITOR-CONTROLLER PRIOR TO AUGUST 1, 2025

WHEREAS, on June 4, 1996 , the City ordered the formation of the Seabreeze Landscape Maintenance District pursuant to Streets and Highway Code §22594, and;

WHEREAS, the City Engineer filed the Engineer's Report, fiscal year 2025-26, required by Streets and Highways Code §22622 for said District, and;

WHEREAS, on May 6, 2025, the City approved said Engineer's Report, declared its intention to levy and collect assessments within said District and set a hearing to ascertain whether the City shall order the levy and assessment of said assessment, and;

WHEREAS, said public hearing was held on May 20, 2025, and;

WHEREAS, levying of the assessment is the first step to collect the assessments to fund the landscape maintenance districts, and;

WHEREAS, provisions of this resolution are severable and if anyone provision is determined to be impermissible then the remainder of the resolution shall remain in full force and effect, and;

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Marina that:

1. The City does hereby confirm the diagram and assessment as described in the Engineer's Report on file with the City Clerk.

2. The City does hereby order the levy and collection of said assessment, $182.42, for FY 2025-26 assessment for Seabreeze Landscape Maintenance Assessment District.

3. It is the intention of the City of Marina that any monetary advance mad e by it during any fiscal year to cover a deficit in the improvement fund of the Seabreeze Landscape Maintenance Assessment District shall be repaid from the next annual assessments levied and collected within the Seabreeze Landscape Maintenance Assessment District.

4. The City Clerk is hereby authorized and directed to file a certified copy of said diagram and assessment with the Monterey County Auditor prior to August 1, 2025.

3 Resolution No. 2025-
Page Two

PASSED AND ADOPTED by the City Council of the City of Marina at a regular meeting duly held on the 20th day of May 2025, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

_____________________________
Bruce C. Delgado, Mayor
ATTEST:

___________________________
Anita Sharp, Deputy City Clerk

4 CITY

OF MARINA

MONTEREY COUNTY

CALIFORNIA

SEABREEZE LANDSCAPE
MAIN

TENANCE

ASSESSMENT DISTRICT

ENGINEER'S REPORT
FY 2025-2026
Cou
ncil Members:

B. DELGADO, MAYOR
L. VISSCHER B. MCCARTHY
K. BIALA J
. MCADAMS
LAYNE LONG City Manager
ANITA SHEPHERD-SHARP Deputy City Clerk
RENÉ ORTEGA City Attorney
ISMAEL HERNANDEZ Public Works Director
Prepared By
City of Marina
Public Works Department

EXHIBIT A
5 SEABREEZE

LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

FY 2025-2026

This report concerns the Seabreeze Landscape Maintenance Assessment District.

This report has been prepared pursuant to Section 22265 through 22574 of the Streets and Highway Code (Landscaping and Landscaping Act 1972).

The Assessment District encompasses the Seabreeze subdivision located on the north side of Beach Road and west of Marina Drive in the City of Marina, County of Monterey, State of California.

The subdivision consists of 37 residential lots, with all underground utilities (water, sewer, gas and electric) street and drainage improvements. The Assessment District has been formed for the purpose of maintaining the proposed landscape areas including the street scape along the Northerly side of Beach Road adjacent to Seabreeze Subdivision, Tract No. 1251 and the buffer along the westerly side of the Southern Pacific Railroad within the rear portion of Lots 18 through 21 of the Seabreeze subdivision. Lot 38 is dedicated to the City for the maintenance of the drainage percolation basin. These improvements were installed and paid for by the developer.

A brief description of the improvements that are to be maintained by the Assessment District are:

All landscaping elements, irrigation systems and services thereto located along the Northerly side of Beach Road, the westerly of Southern Pacific Railroad and the easterly of the percolation pond. Also included is the maintenance, repair and replacement of the sound walls. Landscaping elements consist of ground cover, shrubs, trees, irrigation pipelines, controllers, valves, emitters, sprinklers and appurtenant improvements all as delineated on the plans with the City of Marina and titled Seabreeze Streetscape and Buffer Plans prepared by Isaacson Wood & Associates, Landscape Architecture.

This report includes the following attached exhibits:

EXHIBIT A - An Assessment Diagram and Boundary Map showing all the parcels of the real property within the Assessment District and location of the landscaped areas to be maintained by the Assessment District. The Diagram is keyed to Exhibit C by the separate “Assessment District”.

EXHIBIT B - Spreadsheet showing estimated costs for FY 2024-2025, FY 2025-2026 and FY 2026- 2027.

EXHIBIT C - An assessment roll showing the amount proposed to be assessed against each parcel of real property within this Assessment District. In addition to the Assessors Parcel Number each parcel has been assigned a separate “Assessment Number” which corresponds to the lot number of each parcel.

EXHIBIT A
6 Page Two
Engineer's Report
Seabreeze Landscape Maintenance Assessment District

EXHIBIT D - Method of determination of assessment spread.

Respectfully submitted

_______________________
Nourdin Khayata, PE
Interim City Engineer
April 2025

EXHIBIT A
7 Beach Rd
Lillian Pl
Starfish CtDolphin Cir
Sandpiper Way
Marina Dr
Sand Dollar Ct
Frontage Rd
Marina Dr
038 001
018
032
017
009
006 021
022
010
004
033
007
014013
003
037 002
012
023
011
028
016
015
024
005
031 029 025026027
008
020
034
030
035
019
036
Seabreeze
Landscape Maintenance District
0 50 100
Feet
±
¬«1
Del Monte Blvd California Ave
Crescent Ave
Hillcrest Ave
Patton Parkway
Reindollar Ave
Carmel Ave
De Forest Rd
Cardoza Ave
Marina Dr
Reservation Rd
Abdy Way
Paddon Pl
Bayer Dr
±
Vicinity Map
Boundary and Landscaped Area Map
Legend
Seabreeze
Boundary
Landscaped Area
20,470 SQ FT
Parcels
Percolation Lot
Roads
Date: April 15th, 2009
Notes: The City of Marina assume no warranty or legal responsibility for the information contained on this map. Data and information represented on this map is subject to updates/modifications and may not be complete or appropriate for all purposes. The City of Marina and Monterey County GIS should be queried for the most current information. Parcel data is of mapping grade only and does not represent reliable locations or legal boundaries.

Sources: Monterey County GIS, City of Marina CDD
Map Projection: California State Plane Z one IV, NAD 83 (Feet)

EXHIBIT A

EXHIBIT A
8 Estimates Estimates Estimates
Summary FY 2024-2025 FY 2025-2026 FY 2026-2027
Beginning Cash Balance, July 1st 3,867$ 4, 130$ 4,312$ (a)Total Assessment Revenues (37 Parcels) 6,7 50$ 6,750$ 6,750$ Expenditures
Contractor Services
(b) Landscape Maintenance Contract 2,7 12$ 2,793$ 2,877$ Utilities -$ -$ -$
Large Tree Trimming -$ -$ -$ Extraordinary Maintenance -$ -$ -$ Plant Replacement -$ -$ -$ Administrative Services
Administration (Incl. Engineers Report) 1,800$ 1,800$ 1,800$ Cost Allocation Plan Charges 1,740$ 1,740$ 1,740$ Legal Advertising 235$ 235$ 235$ Total Expenditures 6,487$ 6,568$ 6,652$ (c)Net Change in Fund Balance 263$ 182$ 98$ (d)Ending Fund Balance, June 30th 4,130$ 4, 312$ 4,410$ (d) End Fund Balance equals the Net Change in Fund Balance plus the Beginning Cash Balance of that Fiscal Year. (c) Net Change in Fund Balance equals the Total Expenditures subtracted from Total Assessment Revenue for that Fiscal Year.
(b) Maintenance Costs are shown as increasing per fiscal year by an estimated Consumer Cost Index (CPI) of 3% as allowed by the Contract Specifications.
(a) Maximum Assessment per Prop 218 is $182.42 per parcel. The assessment amount for FY25-26 is consistent with FY24-25 at $182.42 per parcel.

SEABREEZE LANDSCAPE MAINTENANCE DISTRICT

EXHIBIT B

EXHIBIT A
9 EXHIBIT C

SEA

BREEZE LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

ASSESSMENT ROLL FOR
FISCAL YEAR 2025-2026

DIAGRAM AND ASSESSOR'S NET
ASSESSMENT NO. PARCEL NUMBER ASSESSMENT

1 033-082-001 $182.42
2 033-082-002 $182.42
3 033-082-003 $182.42
4 033-082-004 $182.42
5 033-082-005 $182.42
6 033-082-006 $182.42
7 033-082-007 $182.42
8 033-082-008 $182.42
9 033-082-009 $182.42
10 033-082-010 $182.42
11 033-082-011 $182.42
12 033-082-012 $182.42
13 033-082-013 $182.42
14 033-082-014 $182.42
15 033-082-015 $182.42
16 033-082-016 $182.42
17 033-082-017 $182.42

EXHIBIT A
10 SEABREEZE LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

ASSESSMENT ROLL FOR
FISCAL YEAR 2025-2026

DIAGRAM AND ASSESSOR'S NET
ASSESSMENT NO. PARCEL NUMBER ASSESSMENT

18 033-082-018 $182.42
19 033-082-019 $182.42
20 033-082-020 $182.42
21 033-082-021 $182.42
22 033-082-022 $182.42
23 033-082-023 $182.42
24 033-082-024 $182.42
25 033-082-025 $182.42
26 033-082-026 $182.42
27 033-082-027 $182.42
28 033-082-028 $182.42
29 033-082-029 $182.42
30 033-082-030 $182.42
31 033-082-031 $182.42
32 033-082-032 $182.42
33 033-082-033 $182.42
34 033-082-034 $182.42

EXHIBIT A
11 SEABREEZE LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

ASSESSMENT ROLL FOR
FISCAL YEAR 2025-2026

DIAGRAM AND ASSESSOR'S NET
ASSESSMENT NO. PARCEL NUMBER ASSESSMENT
35 033-082-035 $182.42
36 033-082-036 $182.42
37 033-082-037 $182.42

EXHIBIT A
12 EXHIBIT D

METHOD OF DETERMINATION OF ASSESSMENT SPREAD

The maintenance of the landscaped areas within the Assessment District benefits the Assessment District as a whole. Therefore, the assessment should be equally apportioned over the 37 residential building sites or lots contained within the district as indicated on the Assessment Diagram (Exhibit A).

EXHIBIT A
13 May 14, 2025 Item No. 11b

Honorable Mayor and Members City Council Meeting
of the Marina City Council of May 20, 2025

CITY COUNCIL OPEN PUBLIC HEARING, TAK E TESTIMONY
FROM THE PUBLIC AND CONSIDER ADOPTING RESOLUTION NO.
2025-, CONFIRMING DIAGRAM, ASSESSMENT AND ORDERING
LEVY OF $77.14 FOR THE FY 2025-26 ASSESSMENT FOR THE

MONTEREY BAY ESTATES LIGHTING & LANDSCAPE
MAINTENANCE ASSESSMENT DISTRICT , AND; AUTHORIZING

THE CITY CLERK TO FILE A CERTIFIED COPY OF THE DIAGRAM

AND ASSESSMENT WITH THE MONTEREY COUNTY AUDITOR -
CONTROLLER PRIOR TO AUGUST 1, 2025

REQUEST:

It is requested that the City Council:

1. Open public hearing and take testimony from the public;

2. Consider adopting Resolution No. 2 025-, confirming diagram, assessment and ordering levy of $77.14 for FY 2025-26 assessment for the Monterey Bay Estates Lighting & Landscape Maintenance Assessment District, and;

3. Authorize the City Clerk to file a certified copy of the diagram and assessment with the Monterey County Auditor-Controller prior to August 1, 2025.

BACKGROUND:

At the regular meeting of October 3, 1989 , the City Council adopted Resolution No. 1989-62, ordering the formation of the Monterey Bay Estates Lighting & Landscape Maintenance Assessment District pursuant to Streets and Highway Code §22594 and the Landscaping and Lighting Act of 1972 to maintain certain improvements required of new development as a condition of the subdivision approvals.

At the regular meeting of May 6, 202 5, the City Council adopted Resolution No. 2025-32, receiving the FY 2025-26 Engineer’s Report for Monterey Bay Estates Lighting & Landscape Maintenance Assessment District and calling a public hearing for May 20, 2025, on the proposed intention to levy and collect assessments for the District.

ANALYSIS:

Based on the Engineer’s Report (Exhibit A) , the assessment has been set in the amount of $77.14. This is the same amount as last year’s assessment and is the upper limit set by the last Proposition 218 rate vote by members of the assessment district established in 1989.

1 Feedback from District residents has been positive, expressing a dequate levels of landscape maintenance and site cleanup accomplished with the current funding assessment. Unless District residents request additional beautification or improvements, staff recommend continuing the current assessment and level of maintenance. Regular maintenance of the existing District and updates to the District website will continue.

FISCAL IMPACT:

Should the City Council approve this request, the anticipated revenue for the FY 2025-26 assessment levy is $12,496.68 for the purpose of the landscape maintenance district.

Levying of the assessment is the first step to collect the assessments to fund the landscape maintenance district.

CONCLUSION:

This request is submitted for City Council consideration and possible action.

Respectfully submitted,

_____________________________
Edrie Delos Santos, P.E.

Public Works Department
City of Marina

REVIEWED/CONCUR:

____________________________
Ismael Hernandez
Public Works Director
City of Marina

_____________________________
Layne P. Long
City Manager
City of Marina

2 RESOLUTION NO. 2025-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MARINA

CONFIRMING THE DIAGRAM AND ASSESSMENT AND ORDERING LEVY OF $77.14 FOR FY 2025-26 ASSESSMENT FOR THE MONTEREY BAY ESTATES

LIGHTING & LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT AND

AUTHORIZING THE CITY CLERK TO FILE A CERTIFIED COPY OF THE

DIAGRAM AND ASSESSMENT WITH THE MONTEREY COUNTY AUDITOR- CONTROLLER PRIOR TO AUGUST 1, 2025

WHEREAS, on October 3, 1989 , the City ordered the formation of the Monterey Bay Estates Lighting & Landscape Maintenance District pursuant to Streets and Highway Code §22594, and;

WHEREAS, the City Engineer filed the Engineer's Report, fiscal year 2025-2026, required by Streets and Highways Code §22622 for said District, and;

WHEREAS, on May 6, 2025, the City preliminarily approved said Engineer's Report, declared its intention to levy and collect assessments within said District and set a hearing to ascertain whether the City shall order the levy and assessment of said assessment, and;

WHEREAS, said public hearing was held on May 20, 2025, and;

WHEREAS, levying of the assessment is the first step to collect the assessments to fund the landscape maintenance districts, and;

WHEREAS, provisions of this resolution are severable and if anyone provision is determined to be impermissible then the remainder of the resolution shall remain in full force and effect, and;

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Marina that:

1. The City does hereby confirm the diagram and assessment as described in the Engineer's Report on file with the City Clerk.

2. The City does hereby order the levy and collection of said assessment, $77.14, for FY 2025-26 assessment for Monterey Bay Estates Lighting & Landscape Maintenance Assessment District.

3. It is the intention of the City of Marina that any monetary advance mad e by it during any fiscal year to cover a deficit in the improvement fund of the Monterey Bay Estates Lighting & Landscape Maintenance Assessment District shall be repaid from the next annual assessments levied and collected within the Monterey Bay Estates Lighting & Landscape Maintenance Assessment District.

4. The City Clerk is hereby authorized and directed to file a certified copy of said diagram and assessment with the Monterey County Auditor prior to August 1, 2025.

3 Resolution No. 2025-
Page Two

PASSED AND ADOPTED by the City Council of the City of Marina at a regular meeting duly held on the 20th day of May 2025, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

_____________________________
Bruce C. Delgado, Mayor
ATTEST:

__________________________________
Anita Sharp, Deputy City Clerk

4 CITY

OF MARINA

MONTEREY COUNTY

CALIFORNIA

MONTEREY BAY ESTATES LIGHTING
AND

LANDSCAPE MAINTENANCE

ASSESSMENT DISTRICT

ENGINEER'S REPORT
FY 2025-2026
Cou
ncil Members:

EXHIBIT A
5 MONTEREY BAY ESTATES

LIGHTING AND LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

FY 2025-2026

This report concerns the Monterey Bay Estates Lighting and Landscape Maintenance District.

The Assessment District consists of the Monterey Bay Estates Subdivision located in the northeasterly portion of the City of Marina. The subdivision contains 162 lots, a percolation pond parcel, and a park parcel.

The subdivision consists of 162 single family homes complete with underground utilities, water and wastewater facilities, public lighting facilities, street and drainage improvements, and landscaping.

The Assessment District has been formed for the purpose of maintaining and servicing both the landscaping areas and public lighting facilities within the subdivision. The landscaping areas to be maintained and serviced are those in the percolation pond parcel and the street rights-of-way of De Forest Road and Quebrada Del Mar adjacent thereto; in and adjacent to the Crescent Avenue right-of-way, installed and paid for by the developer. The public lighting facilities to be maintained and serviced include all the public lighting facilities within the subdivision installed and paid for by the developer.

This report has been prepared pursuant to Sections 22500 through 22679 of the Streets and Highway Code (Landscaping and Lighting Act of 1972).

The improvements to be maintained which are the subject of this report, are briefly described as follows:

Landscaping elements within the percolation pond parcel and the street rights-of-way of De Forest Road and Quebrada Del Mar adjacent thereto, and landscaping elements within and adjacent to the Crescent Avenue right-of-way (See Exhibit A) are considered as the landscaping improvements included in the Assessment District.

Landscaping elements consist of hydroseeded areas, groundcover, shrubs, trees, irrigation pipelines, controllers, valves, sprinklers, water and electrical service, and freestanding concrete block walls.

Public Lighting facilities within the street right-of-way of De Forest Road, Costa Del Mar Road, Sirena Del Mar Road, Tallmon Street, Quebrada Del Mar Road, Isla Del Sol Way, Estrella Del Mar Way and Crescent Avenue all within the boundary of the Monterey Bay Estates Subdivision (Tract no. 1102) are considered as the public lighting improvements included in the Assessment District, see Exhibit A. The public lighting facilities consist of electroliers, mast arm, ballast, electrical service, wiring and lamps.

EXHIBIT A
6 Page Two
Engineer's Report
Monterey Bay Estates Lighting and Landscape Maintenance District

This report includes the following exhibits:

EXHIBIT A - An assessment diagram and boundary map showing all of the parcels of the real property within the Assessment District. The diagram is keyed to Exhibit C by the separate "Assessment Number".

EXHIBIT B - Spreadsheet showing estimated maintenance costs for FY 2024-2025, FY 2025- 2026 and FY 2026-2027.

EXHIBIT C - An assessment roll showing the amount proposed to be assessed against each parcel of real property within this Assessment District. In addition to the Assessor's Parcel Number each parcel has been assigned a separate "Assessment Number" which corresponds to that parcel's lot number.

EXHIBIT D- A statement of the method by which the undersigned determined the amount to be assessed against each parcel based on the benefits to be derived by each parcel, respectively, from the improvements.

Respectfully submitted,

__________________________
Nourdin Khayata, PE
Interim City Engineer

April 2025

EXHIBIT A
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De Forest Rd
Park Cir
Sirena Del Mar Rd
Villa Cir Quebrada Del Mar Rd
Young Cir
Shuler Cir
Oak Cir
Costa Del Mar Rd
Isla Del Sol Way
Vista Del Camino Cir
De Forest Rd
Crescent Ave
Tallmon St
Estrella Del Mar Way
Whitney Pl
Park
042
151
007
019
141
020
043
132124
145
018
Perc Lot
150
129
111
149
112
023
127
152
044
153
024
157
102
077
039
040
022
154
050
143
031
047
001
093
094
085
121
060
142
120
084
008
055
128
125
155
130
048
140
017
066
035
103
061067
081
126
131
045
133
026
004
123
148
146
003
021
139
002
080
147
011
078
115
079
006
114
110
032
076
014
041
119
144
113118
005
117 025
091
108
053
083
101
033
038
072
052
096
116
046
159
049
069
051057
138
015
134
122
136
095
029
064
106 010
089
109104
088
016
059
034
036
156
009
107
056
013
087
054
062
098
158 027
071 070 068
135
028
100
086 037
012
082
030105
058
161
063
090
137
099
092
074 065
162
075
097
073
160

UNIVERSITY OF CALIFORNIA

HABITAT RESERVE

PG & ESUBSTATION

MCWDPUMP FACILITY
Monterey Bay Estates
Lighting and Landscape
Maintenance District
0 100 200
Feet
±
¬«1
Del Monte Blvd California Ave
Crescent Ave
Hillcrest Ave
Patton Parkway
Reindollar Ave
Carmel Ave
De Forest Rd
Cardoza Ave
Marina Dr
Reservation Rd
Abdy Way
Paddon Pl
Bayer Dr
±
Vicinity Map
Boundary and Landscaped Area Map
Legend
Monterey Bay Estates
Boundary
Landscaped Area

2.14 Acres
Maintained Street Lights
!. Total 34 - 100W
!. Total 7 - 200W
Parcels
Percolation Lot
Roads
Date: April 15th, 2009
Notes: The City of Marina assume no warranty or legal responsibility for the information contained on this map. Data and information represented on this map is subject to updates/modifications and may not be complete or appropriate for all purposes. The City of Marina and Monterey County GIS should be queried for the most current information. Parcel data is of mapping grade only and does not represent reliable locations or legal boundaries.

Sources: Monterey County GIS, City of Marina CDD
Map Projection: California State Plane Z one IV, NAD 83 (Feet)

EXHIBIT A

EXHIBIT A
8 Estimates Estimates Estimates
Summary FY 2024-2025 FY 2025-2026 FY 2026-2027
Beginning Cash Balance, July 1st 7,141$ 8, 618$ 9,920$ (a)Total Assessment Revenues (162 Parcels) 12,497$ 12 ,497$ 12,497$ Expenditures
Contractor Services
(b) La ndscape Maintenance Contract 5,8 20$ 5,995$ 6,174$ Utilities 120$ 120$ 120$ Large Tree Trimming -$ -$ -$ Extraordinary Maintenance -$ -$ -$ Plant/Tree Removal/Replacement -$ -$ -$ Administrative Services
Administration (Incl. Engineers Report) 2,000$ 2,000$ 2,000$ Cost Allocation Plan Charges 2,871$ 2,871$ 2,871$ Legal Advertising 209$ 209$ 209$ Total Expenditures 11,020$ 11,195$ 11,375$ (c)Net Change in Fund Balance 1,4 76$ 1,302$ 1,122$ (d)Ending Fund Balance, June 30th 8,618$ 9, 920$ 11,042$

EXHIBIT B

MONTEREY BAY ESTATES LIGHTING & LANDSCAPE MAINTENANCE DISTRICT (d) End Fund Balance equals the Net Change in Fund Balance plus the Beginning Cash Balance of that Fiscal Year. (c) Net Change in Fund Balance equals the Total Expenditures subtracted from Total Assessment Revenue for that Fiscal Year.
(b) Maintenance Costs are shown as increasing per fiscal year by an estimated Consumer Cost Index (CPI) of 3% as allowed by the Contract Specifications.
(a) Maximum Assessment per Prop 218 is $77.14 per parcel. The assessment amount for FY25-26 is consistent with FY24- 25 at $77.14 per parcel.

EXHIBIT A
9 EXHIBIT C

MONTEREY BAY ESTATES

LIGHTING AND LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

ASSESSMENT ROLL FOR
FISCAL YEAR 2025-2026

DIAGRAM AND ASSESSOR'S NET
ASSESSMENT NO. PARCEL NUMBER ASSESSMENT

1 032-541-01 $77.14
2 032-541-02 $77.14
3 032-541-03 $77.14
4 032-541-04 $77.14
5 032-541-05 $77.14
6 032-541-06 $77.14
7 032-541-07 $77.14
8 032-541-08 $77.14
9 032-541-09 $77.14
10 032-541-10 $77.14
11 032-541-11 $77.14
12 032-541-12 $77.14
13 032-541-13 $77.14
14 032-541-14 $77.14
15 032-541-15 $77.14
16 032-541-16 $77.14
17 032-541-17 $77.14
18 032-541-18 $77.14

EXHIBIT A
10 MONTEREY BAY ESTATES

LIGHTING AND LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

ASSESSMENT ROLL FOR
FISCAL YEAR 2025-2026

DIAGRAM AND ASSESSOR'S NET
ASSESSMENT NO. PARCEL NUMBER ASSESSMENT

19 032-541-19 $77.14
20 032-541-20 $77.14
21 032-541-21 $77.14
22 032-555-38 $77.14
23 032-555-02 $77.14
24 032-542-01 $77.14
25 032-542-02 $77.14
26 032-542-03 $77.14
27 032-542-04 $77.14
28 032-542-05 $77.14
29 032-542-06 $77.14
30 032-542-07 $77.14
31 032-542-08 $77.14
32 032-542-09 $77.14
33 032-542-10 $77.14
34 032-542-11 $77.14
35 032-542-12 $77.14
36 032-542-13 $77.14

EXHIBIT A
11 MONTEREY BAY ESTATES

LIGHTING AND LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

ASSESSMENT ROLL FOR
FISCAL YEAR 2025-2026

DIAGRAM AND ASSESSOR'S NET
ASSESSMENT NO. PARCEL NUMBER ASSESSMENT
37 032-542-14 $77.14
38 032-542-15 $77.14
39 032-542-16 $77.14
40 032-542-17 $77.14
41 032-542-18 $77.14
42 032-542-25 $77.14
43 032-542-26 $77.14
44 032-542-21 $77.14
45 032-542-22 $77.14
46 032-542-23 $77.14
47 032-542-24 $77.14
48 032-543-01 $77.14
49 032-543-02 $77.14
50 032-543-03 $77.14
51 032-543-04 $77.14
52 032-543-05 $77.14
53 032-543-06 $77.14
54 032-543-07 $77.14
55 032-543-08 $77.14

EXHIBIT A
12 MONTEREY BAY ESTATES

LIGHTING AND LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

ASSESSMENT ROLL FOR
FISCAL YEAR 2025-2026

DIAGRAM AND ASSESSOR'S NET
ASSESSMENT NO. PARCEL NUMBER ASSESSMENT
56 032-543-09 $77.14
57 032-543-10 $77.14
58 032-543-11 $77.14
59 032-543-12 $77.14
60 032-543-13 $77.14
61 032-543-14 $77.14
62 032-543-15 $77.14
63 032-543-16 $77.14
64 032-543-17 $77.14
65 032-543-18 $77.14
66 032-543-19 $77.14
67 032-551-01 $77.14
68 032-551-02 $77.14
69 032-551-03 $77.14
70 032-551-04 $77.14
71 032-551-05 $77.14
72 032-551-06 $77.14
73 032-551-07 $77.14
74 032-551-08 $77.14

EXHIBIT A
13 MONTEREY BAY ESTATES

LIGHTING AND LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

ASSESSMENT ROLL FOR
FISCAL YEAR 2025-2026

DIAGRAM AND ASSESSOR'S NET
ASSESSMENT NO. PARCEL NUMBER ASSESSMENT
75 032-551-09 $77.14
76 032-551-10 $77.14
77 032-551-11 $77.14
78 032-551-12 $77.14
79 032-551-13 $77.14
80 032-551-14 $77.14
81 032-551-15 $77.14
82 032-551-16 $77.14
83 032-551-17 $77.14
84 032-551-18 $77.14
85 032-552-01 $77.14
86 032-552-02 $77.14
87 032-552-03 $77.14
88 032-552-04 $77.14
89 032-552-05 $77.14
90 032-552-06 $77.14
91 032-552-07 $77.14
92 032-552-08 $77.14
93 032-552-09 $77.14

EXHIBIT A
14 MONTEREY BAY ESTATES

LIGHTING AND LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

ASSESSMENT ROLL FOR
FISCAL YEAR 2025-2026

DIAGRAM AND ASSESSOR'S NET
ASSESSMENT NO. PARCEL NUMBER ASSESSMENT

94 032-552-10 $77.14
95 032-552-11 $77.14
96 032-552-12 $77.14
97 032-552-13 $77.14
98 032-552-14 $77.14
99 032-552-15 $77.14
100 032-552-16 $77.14
101 032-552-17 $77.14
102 032-552-18 $77.14
103 032-553-01 $77.14
104 032-553-02 $77.14
105 032-553-03 $77.14
106 032-553-04 $77.14
107 032-553-05 $77.14
108 032-553-06 $77.14
109 032-553-07 $77.14
110 032-553-08 $77.14

EXHIBIT A
15 MONTEREY BAY ESTATES

LIGHTING AND LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

ASSESSMENT ROLL FOR
FISCAL YEAR 2025-2026

DIAGRAM AND ASSESSOR'S NET
ASSESSMENT NO. PARCEL NUMBER ASSESSMENT
111 032-553-09 $77.14
112 032-553-10 $77.14
113 032-553-11 $77.14
114 032-553-12 $77.14
115 032-553-13 $77.14
116 032-553-14 $77.14
117 032-553-15 $77.14
118 032-553-16 $77.14
119 032-553-17 $77.14
120 032-553-18 $77.14
121 032-554-01 $77.14
122 032-554-02 $77.14
123 032-554-03 $77.14
124 032-554-04 $77.14
125 032-554-05 $77.14
126 032-554-06 $77.14
127 032-554-07 $77.14
128 032-554-08 $77.14
129 032-555-03 $77.14

EXHIBIT A
16 MONTEREY BAY ESTATES

LIGHTING AND LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

ASSESSMENT ROLL FOR
FISCAL YEAR 2025-2026

DIAGRAM AND ASSESSOR'S NET
ASSESSMENT NO. PARCEL NUMBER ASSESSMENT

130 032-555-39 $77.14
131 032-555-05 $77.14
132 032-555-06 $77.14
133 032-555-07 $77.14
134 032-555-08 $77.14
135 032-555-09 $77.14
136 032-555-10 $77.14
137 032-555-11 $77.14
138 032-555-12 $77.14
139 032-555-13 $77.14
140 032-555-14 $77.14
141 032-555-15 $77.14
142 032-555-16 $77.14
143 032-555-17 $77.14
144 032-555-18 $77.14
145 032-555-19 $77.14
146 032-555-20 $77.14
147 032-555-21 $77.14

EXHIBIT A
17 MONTEREY BAY ESTATES

LIGHTING AND LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT

ASSESSMENT ROLL FOR
FISCAL YEAR 2025-2026

DIAGRAM AND ASSESSOR'S NET
ASSESSMENT NO. PARCEL NUMBER ASSESSMENT

148 032-555-22 $77.14
149 032-555-23 $77.14
150 032-555-24 $77.14
151 032-555-25 $77.14
152 032-555-26 $77.14
153 032-555-27 $77.14
154 032-555-28 $77.14
155 032-555-29 $77.14
156 032-555-30 $77.14
157 032-555-31 $77.14
158 032-555-32 $77.14
159 032-555-33 $77.14
160 032-555-34 $77.14
161 032-555-35 $77.14
162 032-555-36 $77.14

EXHIBIT A
18 EXHIBIT D

METHOD OF DETERMINATION OF ASSESSMENT SPREAD

The maintenance of the landscaping surrounding percolation pond and Crescent Avenue landscaping together with maintenance and service of the public lighting facilities benefits the Assessment District as a whole. The tentative subdivision map approval was conditioned on the formation of this Maintenance District. Since the creation of the lots was so conditioned, each lot equally benefits from the District. Therefore, the assessment spread is based on the number of building sites or lots contained within the district as indicated on the Assessment Diagram (Exhibit A).

EXHIBIT A
19 May 16, 2025 Item No. 11c
Honorable Mayor and Members City Council Meeting
of the Marina City Council of May 20, 2025

CITY COUNCIL TO CONSIDER OPENING A PUBLIC HEARING,

TAKING ANY TESTIMONY FROM THE PUBLIC, INTRODUCING
BY TITLE ONLY ORDINANCE NO. 2025-__, RENEWING CHAPTER

9.26 OF THE MARINA MUNICIPAL CODE “ MILITARY
EQUIPMENT USE”
RECOMMENDATION:

It is recommended that the City Council consider:

1. Opening a public hearing, and;

2. Introducing by title only O rdinance No. 2025 -__, renewing Ordinance No. 2022 -02, Marina Municipal Code Chapter 9.26 “Military Equipment Use”.

BACKGROUND:

On September 30, 2021, Governor Gavin Newsom signed into law Assembly Bill 481 (AB 481), relating to the use, funding, and acquisition of military equipment by law enforcement agencies .

The Marina City Council previously approved Marina Police Department Policy #707 – Military Equipment, and the associated Military Equipment use by ordinance 2022 -02 on April 19, 2022 (now codified as Chapter 9.26 of the Marina Municipal Code).

In addition to receiving and approving the Annual Military Equipment Report presented to Council on May 6, 2025, AB 481 and Marina Municipal Code Section 9.26.040.E require the City Council to annually review the ordinance and vote on whether to renew such ordinance at a regular meeting held pursuant to the Brown Act.

In considering whether to renew Chapter 9.26 including Policy #707 , Council shall consider whether the Annual Military Equipment Report complies with the standards set forth in MMC Section 9.26.040.D. Those standards include:

1. The military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.

2. The proposed military equipment use policy will safeguard the public’s welfare, safety, civil rights, and civil liberties.

3. If purchasing the equipment, the equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety.

4. Prior military equipment use complied with the military equipment use policy that was in effect at the time, or if prior uses did not comply with the accompanying military equipment use policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance
1 ANALYSIS:

In accordance with the Marina Municipal Code (MMC) Section 9.26.040.D, the Marina Police Department has evaluated its military equipment inventory and use policy to ensure compliance with the standards required for ordinance renewal. The following findings support the continued necessity, accountability, and appropriateness of Policy #707 and Chapter 9.26:

1. Necessity and Lack of Reasonable Alternatives:

The military equipment maintained by the Marina Police Department remains necessary to achieve objectives related to officer and civilian safety. The department continues to utilize this equipment for critical incidents such as active shooter situations, high -risk warrant service, barricaded suspects, disaster response, and search and rescue operations.

There is no reasonable alternative available that provides the same capabilities with the same efficiency or reliability under those conditions.

2. Safeguarding Public Welfare, Civil Rights, and Liberties:

The existing Military Equipment Use Policy (#707) contains clear procedural safeguards, including limitations on deployment, defined authorization levels, incident documentation requirements, and supervisory oversight. The department also conducts annual reviews and provides public transparency through community meetings and published reports. These measures ensure the policy protects the public’s welfare, civil rights, and civil liberties while enabling effective law enforcement operations.

3. Cost-Effectiveness of Equipment:

All military equipment in use was either previously acquired through state and federal programs at no cost or has been evaluated for cost -effectiveness prior to purchase. The department continually reviews advancements in technology and evaluates potential alternatives; however, the current equipment remains functionally superior and cost - effective when compared to any commercially available replacements.

4. Compliance with Use Policy and Corrective Actions:

The Annual Military Equipment Report for 2024 –2025 confirms that all use of military equipment during the reporting period was in compliance with the approved use policy.

There were no policy violations, community complaints, or reported misuse. In the event of any future non-compliance, the department maintains established internal protocols for investigation, correction, and retraining to ensure accountability and future adherence.

These findings affirm that the Marina Police Department has responsibly maintained its military equipment inventory, adhered to the standards of MMC Section 9.26.040.D, and upheld the commitments made to the community when Ordinance No. 2022-02 was first enacted.

Attached for Council consideration is a draft Policy # 707, EXHIBIT A and draft Military Equipment Use Ordinance, Chapter 9.26 , EXHIBIT B , for Council renewal. This draft ordinance is identical to that enacted on April 19, 2022.

FISCAL IMPACT:

None

CONCLUSION:

This request is submitted for City Council consideration and possible action.

2 Respectfully submitted,

__________________________
Randy Hopkins
Chief of Police
City of Marina

REVIEWED/CONCUR:

_________________________
Layne Long
City Manager
City of Marina

3 ORDINANCE NO. 2025 -____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MARINA, RENEWING ORDINANCE NO. 2022 -02, CHAPTER 9.26 OF THE MARINA

MUNICIPAL CODE REGARDING ESTABLISHMENT OF A MILITARY

EQUIPMENT POLICY FOR THE MARINA POLICE DEPARTMENT

WHEREAS, on September 30, 2021, Governor Gavin Newsome signed into law Assembly Bill 481 (“AB 481”), adding Chapter 12.8, “Funding, Acquisition and Use of Military Equipment,” to Division 7 of Title 1 of the Government Code (sections 7070 -7075), relating to the use of military equipment by California law enforcement agencies; and

WHEREAS, AB 481 seeks to provide transparency, oversight, and an opportunity for meaningful public input on decisions regarding whether and how military equipment is funded, acquired. Or used; and

WHEREAS, the Marina Police Department is in possession of certain items of equipment that qualify as “military equipment’ under AB 481 and further intends to acquire other items of military equipment; and

WHEREAS, AB 481 requires, inter alia, that a law enforcement agency possessing and using such qualifying equipment must prepare a publicly released written, military equipment use policy document covering the inventory, description, quantity, purpose, capabilities, use, lifespan, acquisition, maintenance, authorized use, fiscal impacts, procedures, training oversight, and complaint process, applicable to the Department’s use of such equipment; and

WHEREAS, the policy must be approved by the City Council by ordinance, and reviewed annually thereafter; and

WHEREAS, the military equipment inventoried and presented to the City Council is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety; and

WHEREAS, the proposed Military Equipment Use Policy, Marina Police Department Policy 707, will safeguard the public’s health, welfare, safety, civil rights, and civil liberties; and

WHEREAS, the equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety; and

WHEREAS, prior military equipment use complied with the applicable equipment use policy (which included equipment now defined as military equipment) that was in effect at the time, or if prior uses did not comply with the accompanying military equipment use policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance; and

WHEREAS, the Marina Police Department has submitted the proposed Policy to the City Council and has made those documents available on the Police Department’s website for at least 30 days prior to the public hearing concerning the military equipment at issue; and

WHEREAS, the Policy satisfied the requirements of Government Code Section 7070(d); and

WHEREAS, the City Council recognizes that there is a need to enact the restrictions contain ed in this Ordinance to protect the public health, safety, and welfare; and

4 Ordinance No. 2022-
Page Two

WHEREAS, all legal prerequisites prior to the adoption of this Ordinance have occurred.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MARINA
HEREBY ORDAINS AS FOLLOWS:

Section 1. The City Council having received information required under AB 481 regarding the Marina Police Department’s use of military equipment as defined in said law, deems it to be in the best interest of the City to and hereby does approve the Military Equipment Policy attached hereto Exhibit A which shall govern the use of military equipment by the Marina Police Department.

Section 2. Chapter 9.26 added to Title 9 of the Marina Municipal Code is renewed and to read as follows on the seven (7) pages attached hereto as Exhibit B:.

Section 3. The City Council finds that the adoption of this Ordinance is exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15061(b)(3) (General Rule) of the CEQA Guidelines because it is not a “project” and because it can be seen with certainty that there is no possibility that the passage of this Ordinance will have a significant effect on the environment.

Section 4. Any provision of the Marina Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to affect the provisions of this Ordinance.

Section 5. This Ordinance shall be in full force and effect thirty (30) days after its final passage, and the Ordinance shall be posted within fifteen (15) days after the adoption.

THE FOREGOING ORDINANCE was introduced following a public hearing held at a regular meeting of the City Council of the City of Marina on May 20, 2025 and will come for adoption as an Ordinance of the City of Marina at a regular meeting of the Council to be held on June 3, 2025.

AYES, COUNCIL MEMBERS:

NOES, COUNCIL MEMBERS:

ABSENT, COUNCIL MEMBERS:

ABSTAIN, COUNCIL MEMBERS:

________________________
Bruce C. Delgado, Mayor
ATTEST:

___________________
Anita Sharp, Deputy City Clerk

5 EXHIBIT A
6 7

8 9

Chapter: 9.26
“Military Equipment” Use Ordnance

Sections:

9.26.010 Name of Ordinance

9.26.020 Purpose.

9.26.030 Definitions.

9.26.040 Military Equipment Use Policy Requirement

9.26.050 Use In Exigent Circumstances

9.26.060 Reports on the Use of Military Equipment.

9.26.070 Severability

9.26.010 Name of Ordinance.

A. This Ordinance shall be known as the Military Equipment Use Ordinance.

9.26.020 Purpose.

A. The purpose of this ordinance is to ensure the Police Department’s compliance with California AB 481, which requires California law enforcement agencies to obtain approval of the law enforcement agency’s governing body, by adoption of a military equipment use policy, as specified, by ordinance at a regular meeting prior to taking actions relating to the funding, acquisition, or use of military equipment. This ordinance also requires approval for the continued use of military equipment acquired prior to January 1, 2022. This ordinance also allows the governing body to approve the funding, acquisition, or use of military equipment within its jurisdiction only if it determines that the military equipment meets specified standards. (California Government Codes § 7070, § 7071, § 7072.)

9.26.030 Definitions.

A. “Military equipment” means the following:

(1) Unmanned, remotely piloted, powered aerial or ground vehicles.

(2) Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. However, police versions of standard consumer vehicles are specifically excluded from this subdivision.

(3) High mobility multipurpose wheeled vehicles (HMMWV), commonly referred to as Humvees, two and one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached.

However, unarmored all-terrain vehicles (ATVs) and motorized dirt bikes are specifically excluded from this subdivision.

EXHIBIT B
10 (4) Tracked armored vehicles that provide ballistic protection to their occupants and utilize a tracked system instead of wheels for forward motion.

(5) Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units.

(6) Weaponized aircraft, vessels, or vehicles of any kind.

(7) Battering rams, slugs, and breaching apparatuses that are explosive in nature. However, items designed to remove a lock, such as bolt cutters, or a handheld ram designed to be operated by one person, are specifically excluded from this subdivision.

(8) Firearms of .50 caliber or greater. However, standard issue shotguns are specifically excluded from this subdivision.

(9) Ammunition of .50 caliber or greater. However, standard issue shotgun ammunition is specifically excluded from this subdivision.

(10) Specialized firearms and ammunition of less than .50 caliber, including assault weapons as defined in Sections 30510 and 30515 of the Penal Code, with the exception of standard issue service weapons and ammunition of less than .50 caliber that are issued to officers, agents, or employees of a law enforcement agency or a state agency.

(11) Any firearm or firearm accessory that is designed to launch explosive projectiles.

(12) “Flashbang” grenades and explosive breaching tools, “tear gas,” and “pepper balls,” excluding standard, service-issued handheld pepper spray.

(13) Taser Shockwave, microwave weapons, water cannons, and the Long- Range Acoustic Device (LRAD).

(14) The following projectile launch platforms and their associated munitions:
40 mm projectile launchers, “bean bag,” rubber bullet, and specialty impact munition (SIM) weapons.

(15) Any other equipment as determined by a governing body or a state agency to require additional oversight.

(16) Notwithstanding paragraphs (1) through (15), “military equipment” does not include general equipment not designated as prohibited or controlled by the federal Defense Logistics Agency.

B. “City” means any department, agency, bureau, and/or subordinate division of the City of Marina,

11 C. “Police Department” means any division, section, bureau, employee, volunteer and/or contractor of the Marina Police Department.

D. “City Council” means the governing body that is the Marina City Council.

E. “Military Equipment Use Policy” means a publicly released, written document governing the use of military equipment by the Police Department that addresses, at a minimum, all of the following:

(1) A description of each type of military equipment, the quantity sought, its capabilities, expected lifespan, and product descriptions from the manufacturer of the military equipment.

(2) The purposes and authorized uses for which the Police Department proposes to use each type of military equipment.

(3) The fiscal impact of each type of military equipment, including the initial costs of obtaining the equipment and estimated annual costs of maintaining the equipment.

(4) The legal and procedural rules that govern each authorized use.

(5) The training, including any course required by the Commission on Peace Officer Standards and Training, that must be completed before any officer, agent, or employee of the Police Department allowed to use each specific type of military equipment to ensure the full protection of the public’s welfare, safety, civil rights, and civil liberties and full adherence to the military equipment use policy.

(6) The mechanisms to ensure compliance with the military equipment use policy, including which independent persons or entities have oversight authority, and, if applicable, what legally enforceable sanctions are put in place for violations of the policy.

(7) For the Police Department procedures by which members of the public may register complaints or concerns or submit questions about the use of each specific type of military equipment, and how the Police Department will ensure that each complaint, concern, or question receives a response in a timely manner. (California Government Codes § 7070.)

9.26.040 Military Equipment Use Policy Requirement.

A. The Police Department shall obtain approval of the City Council, by an ordinance adopting a Military Equipment Use Policy at a regular meeting of the City Council held pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code) prior to engaging in any of the following:

(1) Requesting military equipment made available pursuant to Section 2576a of Title 10 of the United States Code.

12 (2) Seeking funds for military equipment, including, but not limited to, applying for a grant, soliciting, or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers.

(3) Acquiring military equipment either permanently or temporarily, including by borrowing or leasing.

(4) Collaborating with another law enforcement agency in the deployment or other use of military equipment within the territorial jurisdiction of the City of Marina.

(5) Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the City Council pursuant to this chapter.

(6) Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of, military equipment.

(7) Acquiring military equipment through any means not provided by this section.

B. No later than May 1, 2022, if seeking to continue the use of any Military Equipment that was acquired prior to January 1, 2022, the Marina Police Department shall commence a City Council approval process in accordance with this section. If the City Council does not approve the continuing use of military equipment, including by adoption pursuant to this subdivision of a military equipment use policy submitted within 180 days of submission of the proposed military equipment use policy to the City Council, the Marina Police Department shall cease its use of the military equipment until it receives the approval of the City Council in accordance with this section.

C. In seeking the approval of the governing body, the Police Department shall submit a proposed military equipment use policy to the City Council and make those documents available on the Police Department’s internet website at least 30 days prior to any public hearing concerning the military equipment at issue.

D. The City Council shall only approve a military equipment use policy pursuant to this chapter if it determines all of the following:

(1) The military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety.

(2) The proposed military equipment use policy will safeguard the public’s welfare, safety, civil rights, and civil liberties
.
(3) If purchasing the equipment, the equipment is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety.

13 (4) Prior military equipment use complied with the military equipment use policy that was in effect at the time, or if prior uses did not comply with the accompanying military equipment use policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance.

E. The City Council shall review this ordinance at least annually and vote on whether to renew it at a regular meeting held pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code).

9.26.050 Use in Exigent Circumstances

A. Notwithstanding the provisions of this Chapter, the Police Department may acquire, borrow and/or use Military Equipment in Exigent Circumstances without following the requirements of this ordinance.

B. If the Police Department acquires, borrows, and/or uses Military Equipment in Exigent Circumstances, in accordance with this section, it must take all of the following actions:

(1) Provide written notice of that acquisition or use to the City Council within 30 days following the commencement of such Exigent Circumstances, unless such information is confidential or privileged under local, state, or federal law.

(2) If it is anticipated that the use will continue beyond the Exigent Circumstance, submit a proposed amended Military Equipment Use Policy to the City Council within 90 days following the borrowing, acquisition and/or use, and receive approval, as applicable, from the City Council.

(3) Include the Military Equipment in the Police Department’s next annual Military Equipment Report.

9.26.060 Reports on the Use of Military Equipment

A. The Police Department shall submit to City Council an annual military equipment report for each type of military equipment approved by City Council within one year of approval, and annually thereafter for as long as the military equipment is available for use.

B. The Police Department shall also make each annual military equipment report available on its internet website for as long as the military equipment is available for use.

C. The annual military equipment report shall, at a minimum, include the following information for the immediately preceding calendar year for each type of military equipment:

(1) A summary of how the military equipment was used and the purpose of its use.

(2) A summary of any complaints or concerns received concerning the military equipment.

(3) The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response.

14 (4) The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.

(5) The quantity possessed for each type of military equipment.

(6) If the Police Department intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.

D. Within 30 days of submitting and publicly releasing an annual military equipment report pursuant to this section, the Police Department shall hold at least one well -publicized and conveniently located community engagement meeting, at which the general public may discuss and ask questions regarding the annual military equipment report and the Police Department’s funding, acquisition, or use of military equipment. (California Government Codes § 7072 (a)

E. The City Council shall determine, based on the annual military equipment report submitted by the Marina Police Department whether each type of military equipment identified in that report has complied with the standards for approval. In order to facilitate public participation, any proposed or final Military Equipment Use Policy shall be made publicly available on the internet website of the Marina Police Department for as long as the Military equipment is available for use. (California Government Codes § 7071 (a) (1)). I f the City Council determines that a type of military equipment identified in that annual military equipment report has not complied with the standards for approval, the City Council shall either disapprove a renewal of the authorization for that type of military equipment or require modifications to the military equipment use policy in a manner that will resolve the lack of compliance.

9.26.070 Severability

A. If any section, subsection, sentence, clause, phrase, or word of this Chapter, or any application thereof to any person or circumstance, is held to be invalid or unconstitutional by a decision of a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions or applications of this Chapter.

B. The City Council hereby declares that it would have passed this Chapter and each and every section, subsection, sentence, clause, phrase, or word not declared invalid or unconstitutional without regard to whether any other portion of this Chapter or application thereof would be subsequently declared invalid or unconstitutional.

15 May 5, 2025 Item No. 11d
Honorable Mayor and Members City Council Meeting
of the Marina City Council of May 20, 2025

THE CITY COUNCIL WILL HOLD A PUBLIC HEARING
INTRODUCING ORDINANCE NO. 2025 -, AMENDING THE ZONING
CODE (TITLE 17) AND ADOPT A RESOLUTION APPROVING A
GENERAL PLAN AMENDMENT TO THE 2000 MARINA GENERAL
PLAN TO IMPLEMENT PROGRAM 2.4 (INCLUSIONARY
ORDINANCE) OF THE HOUSING ELEMENT. THE ACTION IS

EXEMPT FROM CEQA PURSUANT TO CEQA GUIDELINES SECTION
15061(B)(3).

RECOMMENDATION: It is recommended that the City Council consider:

1. Open a public hearing introducing Ordinance No. 2025, amending the Zoning Code (Title 17) and

2. Adopt a resolution amending Section 5.7.2 of the 2000 General Plan, both to implement Program 2.4 of the Housing Element.

3. Find that the recommended action is exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3).

BACKGROUND
On April 11, 2024, the Marina Sixth Cycle Housing Element was certified by the California Department of Housing and Community Development (State HCD). Per the programs of the Housing Element the City must take specific action steps every year to maintain certification with the State HCD. One such action step is the implementation of Program 2.4 of the Housing Element, which requires certain amendments to the City’s Inclusionary Housing Ordinance within Title 17 of the Marina Municipal Code (Zoning Ordinance) and Section 5.7.2 of the 2000 Marina General Plan. Pursuant to Government Code Section 65353 the policy was reviewed and recommended for approval by the Planning Commission on March 27, 2025. 1

DISCUSSION
An "inclusionary housing ordinance" is a local law that requires developers to include a certain percentage of affordable housing units within new residential developments, essentially requiring them to set aside a portion of their project for lower -income residents; this is typically done by specifying a percentage of units that must be priced at a level affordable to certain income brackets.

Currently, the City of Marina’s Inclusionary Ordinance imposes a twenty percent (20%) inclusionary requirement for projects containing twenty units or more, meaning that 20% of the units must be dedicated for below market rate housing. However, for projects within the former Fort Ord area, the inclusionary requirement is forty percent (40%). 2 This forty percent requirement is substantially higher than the requirement in the General Plan, specific plans for the Big Three Projects (Dunes, Sea Haven, and Marina Station), and the inclusionary ordinances of neighboring agencies, which generally require a twenty percent inclusionary requirement for development 1 On March 27, 2025, the Planning Commission reviewed the zoning text amendment and removed section

17.48,030(b)(1)(b) to make it clear that this ordinance would apply to development projects moving forward. 2 See Section 17.48.030(c)(1) of the Marina Municipal Code. 1 projects.3 The proposed amendment would change the inclusionary requirement in the Fort Ord area to twenty percent, consistent with the requirement in all other areas of Marina. The goal of the amendment is to make the Inclusionary Ordinance apply similarly to all segments of Marina, and to comply with Housing Element Program 2.4, which requires the City to make this change.

Additionally, to spur the development of more affordable housing, Housing Element Program 2.4 requires the City to update the Inclusionary Ordinance to apply to projects with five or more units.

As noted above, currently it applies only to projects with twenty or more units. If adopted, this action will require amendments to Marina Municipal Code Section 17.48.030 and General Plan Section 5.7.2, which also contains the City’s inclusionary requirement.

After the Planning Commission recommended approval of this action by the City Council, an inquiry came in regarding why the City would remove the forty percent requirement. No city of comparable size to the City of Marina has a forty percent inclusionary requirement as this would make housing infeasible for developers to build.

Recently, Land Watch submitted a letter requesting that, because the proposed ordinance amendments would lower the inclusionary requirement for the former Fort Ord area, the City should “commit to incentivizing other methods for attaining affordable housing.” Although the proposed amendments would reduce the inclusionary requirement for the former Fort Ord area from 40% to 20%, the ordinance would also substantially expand the number of developments anywhere in the City to which the inclusionary ordinances applies: from developments of 20 units or more, to developments of just five units or more. Thus, the proposed ordinance amendments would likely increase, rather than decrease the supply of affordable housing units in the City.

Land Watch also suggested that under AB 1505, the Department of Housing and Community Development (HCD) could potentially require the City to conduct an “economic feasibility study” of the proposed Ordinance amendment. Per AB 1505, a feasibility study is not authorized here, as Marina is exceeding the requirement that it achieve at least 75% of its Regional Housing Needs Allocation for the Sixth Cycle Housing Element; the City has annually filed its Annual Progress Report pursuant to the Housing Element Law; and the proposed amendments do not mandate that at least 15% of units be built at 80% of the Area Median Income (AMI). (Rather, the proposed ordinance would mandate that at least 13% of units be built at 80% of AMI.)

ENVIROMENTAL REVIEW
The proposed action is exempt from the California Environmental Quality Act (CEQA) under Section 15061(b)(3) of the CEQA Guidelines as there is no reasonable possibility that it will have a significant effect on the environment. Because the proposed action merely update the Municipal Code and General Plan to clarify which housing types are allowed in certain residential zones, subject to a use permit and project -specific environmental review as necessary, there is no possibility that the activity in question may have a significant effect on the environment. No further environmental review is necessary.

CONCLUSION
City staff are recommending approval of the proposed edits to the Municipal Code and the 2000 General Plan in order to implement Program 2.4 of the Housing Element , and a finding that the recommended action is exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3).

3 City staff confirmed that most neighboring local agencies have an inclusionary requirement of 20% (Seaside, Monterey, Salinas), with several having Housing Element action items mandating adoption of an inclusionary ordinance (Pacific Grove, Carmel by the Sea) approximating this percentage. 2 Respectfully submitted

_____________________
Guido F. Persicone, AICP
Community Development Director
City of Marina

REVIEWED BY:

_______________________
Layne Long
City Manager
City of Marina

3 RESOLUTION NO. 2025-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MARINA ADOPTING AN AMENDMENT TO SECTION 5.7.2 OF THE 2000 GENERAL PLAN

WHEREAS, on April 11, 2024, the California Department of Housing and Community Development (State HCD) certified the City of Marina’s Sixth Cycle Housing Element (“Housing Element”); and

WHEREAS, the Housing Element requires the City of Marina to implement several policy and ordinance modifications to remain compliant with the Housing Element, as set forth further herein; and

WHEREAS, reducing barriers to development of more housing is a key objective of the Housing Element; and

WHEREAS, Housing Element Program 2.4 mandates that the City’s inclusionary housing ordinance be amended such that it applies to projects with five (5) or more units; and

WHEREAS, concurrent with its adoption of this Resolution, the City Council has adopted Ordinance No. 2025- to amend the City’s inclusionary housing ordinance consistent with Housing Element Program 2.4; and

WHEREAS, Section 5.7.2 of the City’s 2000 General Plan currently provides that the City’s inclusionary housing requirement only applies to projects with twenty (20) or more housing units; and

WHEREAS, the proposed amendment is subject to the findings provided in Exhibit A; and

WHEREAS, to achieve compliance with Housing Element Program 2.4, the City Council amends Section 5.7.2 of the 2000 General Plan as indicated in Exhibit B and referenced herein; and

WHEREAS, the Planning Commission, at a duly noticed public hearing on March 27, 2025 adopted Resolution 2025 recommending that the City Council amend the referenced section as presented; and

WHEREAS, at a duly noticed meeting on May 20, 2025 the City Council reviewed the recommendation; and

WHEREAS, the proposed amendment has been processed in accordance with the applicable provisions of the California Environmental Quality Act (CEQA) and adoption of the foregoing amendment will not result in a negative impact to the environment and is exempt from environmental review per Section 15061(b)(3) of the CEQA Guidelines; and

NOW THEREFORE, BE IT RESOLVED that the City Council does hereby:

1. Find that the foregoing recitals are adopted as findings of the City Council as though set forth fully herein.

2. Make the findings set forth in Exhibit A, attached hereto, and adopt this Resolution to amend the 2000 General Plan, Section 5.7.2, as set forth in Exhibit B, attached hereto.

4 Resolution No. 2025
Page Two

3. Declare that: (a) if any section, subsection, clause or phrase of this resolution is for any reason held to be invalid, such decision shall not affect the validity of the remaining portions of this resolution; and (b) the City Council would have adopted the resolution and each section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared invalid.

4. If approved, direct the City Manager to execute all documents and to perform all other necessary acts to implement this Resolution.

PASSED AND ADOPTED by the City Council of the City of Marina at a regular meeting duly held on the 20th day of May 2025 by the following vote:

AYES, COUNCIL MEMBERS:

NOES, COUNCIL MEMBERS:

ABSENT, COUNCIL MEMBERS:

ABSTAIN, COUNCIL MEMBERS:

__________________________
Bruce Delgado, Mayor

Attest:

________________________
Anita Sharp, Deputy City Clerk

5 Exhibit A to Resolution
Findings
Pursuant to Government Code section 65358, the City makes the following findings (the finding is in italics and staff’s justification follows):
• The proposed amendment is deemed in the public interest.

The purpose of the City’s Inclusionary Housing Ordinance is to encourage the development and availability of affordable housing by ensuring that the addition of affordable housing units to the City’s housing stock is in proportion with the overall increase in housing units. The proposed amendment, by increasing the number of projects to which the Inclusionary Housing Ordinance will apply, will further the purpose of the Ordinance and foster improved regional jobs -housing balances and racial integration within the City, all of which are in the public interest. • The proposed amendment is consistent and compatible with the rest of the General Plan and any implementation programs that may be affected.

Staff has reviewed the General Plan and implementing programs and has determined that the proposed amendment is consistent and compatible with both. • The potential impacts of the proposed amendment have been assessed and have been determined not to be detrimental to the public health, safety, or welfare.

The proposed amendment will increase the number of projects to which the Inclusionary Housing Ordinance will apply and therefore will likely increase the development and availability of affordable housing in the City. This impact is in the interest of public health, safety, and welfare.

No other potential impacts of the amendment will be detrimental to the public health, safety, and welfare.
6 Exhibit B to Resolution
General Plan Text Amendments
Amendment to Section 5.7.2 of the 2000 General Plan (Strikethrough identifies deletions to the text; underline indicates additional language added to the text):

Inclusionary Zoning. To help alleviate the housing shortages for households of low and moderate income, and to make housing available to persons employed within Marina in lower wage jobs (thereby promoting both the General Plan’s jobs/housing balance and housing affordability objectives), the City should draft and adopt inclusionary zoning requirements. The ordinance shall require that all projects containing approximately 5 20 units or more regardless of zoning district or specific plan area, include and m aintain an appropriate percentage of the units as housing affordable to lower and moderate -income households consistent with the Housing Element’s inclusionary requirement.

The ordinance should also include incentives for providing below -market-rate housing - in addition to that required as inclusionary - that is affordable to households with incomes ranging from 120 to 150 percent of the current county median income. The ordinance should determine both the income eligibility for defining affordability, and employment and residence eligibility consistent with the Housing Element, set pricing criteria for affordable units, provide restrictions on resale and re -rental of afforda ble units, and include incentives to help ensure the economic viability of affected projects. Where affordable housing is provided pursuant to conditions of project approval, resale conditions should be imposed.

7 ORDINANCE NO. 2025-

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MARINA AMENDING TITLE 17 (ZONING CODE) OF THE MARINA MUNICIPAL CODE TO IMPLEMENT PROGRAM 2.4 OF THE HOUSING ELEMENT

WHEREAS, on April 11, 2024, the California Department of Housing and Community Development (State HCD) certified the City of Marina’s Sixth Cycle Housing Element (“Housing Element”); and

WHEREAS, the Housing Element requires the City of Marina to implement several policy and ordinance modifications to remain compliant with the Housing Element, as set forth further herein; and

WHEREAS, reducing barriers to the development of more housing is a key objective of the Housing Element; and

WHEREAS, the City’s inclusionary housing ordinance currently imposes a forty percent (40%) inclusionary mandate for the parts of Marina that are located on former Fort Ord land and a twenty percent (20%) inclusionary mandate for the remainder of Marina; and

WHEREAS, the forty percent (40%) mandate applicable to the former Fort Ord area is substantially higher than the requirement in the General Plan and the City -adopted specific plans for the Dunes (University Village Specific Plans), Sea Haven and Marina Station Specific Plans; and

WHEREAS, the City’s inclusionary housing ordinance currently applies to residential development of twenty (20) or more units; and

WHEREAS, Housing Element Program 2.4 requires the City to amend the inclusionary housing ordinance such that: (1) the inclusionary mandate for the former Fort Ord area is consistent with the General Plan and the twenty percent (20%) mandate applicable to other areas of the City; and (2) the ordinance applies to residential development of five (5) or more units.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF MARINA DOES ORDAIN AS FOLLOWS:

Section 1. Findings.

The City Council finds and determines the recitals set forth above, and the findings contained in Exhibit A, attached hereto, to be true and correct and by this reference, incorporates the same herein as findings.

Section 2. Amendments.

Section 17.48.030 of the Marina City Code is hereby amended to read as follows. Strikethrough identifies deletions to the text; underline indicates additional language added to the text. 8 Ordinance No. 2025-
Page Two

17.48.030 Inclusionary housing.

A. Purpose and Intent. It is the intent of this section to establish standards and procedures that facilitate the development of housing affordable to a range of households with varying income levels as mandated by California Government Code Section 65580. The purpose of this section is to encourage the development and availability of such housing by ensuring that the addition of affordable housing units to the city’s housing stock is in proportion with the overall increase in housing units.

B. Applicability and Exemptions.

1. Applicability.
a. All residential developments of five twenty or more units; b. Existing occupied housing in Marina’s former Fort Ord.

2. Exemptions.
a. Residential developments proposed to contain fewer than five twenty units; b. Market-rate units produced as a density bonus pursuant to Section 17.48.040; c. Any housing unit or residential development which is damaged or destroyed by fire, natural catastrophes, or act of public enemy, subject to the following conditions:
i. The unit or development is damaged or destroyed to the extent to not more than seventy-five percent of the assessed value thereof, as shown on the latest Monterey County assessment roll, prior to such destruction,
ii. The use of the reconstructed building and number of housing units remain the same as prior to the damage or destruction,
iii. The square footage of the reconstructed building is not increased or reduced by more than ten percent,
iv. The unit or development is reconstructed within four years of the damage or destruction, and
v. Should the reconstructed development result in an increased number of housing units, only the net increase in units shall incur an inclusionary housing requirement.

C. Inclusionary Housing Requirement.

1. All new residential development of five twenty or more units and all existing occupied housing in Marina’s former Fort Ord shall be required to provide at minimum a specified percentage of h ousing units affordable to specific income groups according to the affordability distribution set forth in Table 17.48.030-1.

2. Provision of affordable for-sale housing for middle income households is voluntary and incentive-based. The developer must submit a request for incentives as part of the affordable housing plan for review by the director.

9 Ordinance No. 2025-
Page Three

Table 17.48.030-1. Inclusionary Housing Requirements
Planning Area
Percentage of Required Affordable Housing by Income Total Affordable
Requirement
(Percentage
of Total
Units) Very Low Low Moderate Middle
Citywide For-
Sale or Rental
Housing:

New
Construction
or
Substantially
Rehabilitated
6 Percent 7 Percent 7 Percent 10 Percent—
Voluntary and
Incentive-
Based
20+ percent
Former Fort
Ord: Existing
Occupied
Housing
6 15 Percent 7 15 Percent 7 10 Percent 0 Percent 20 40 Percent1

1 Inclusionary housing requirement for existing occupied housing on the former Fort Ord can be fulfilled by providing fewer moderate income housing u nits than required above if a greater percentage of very low and low income housing units are provided and the total number of very low, low and moderate income units is not less than twenty forty percent.

3. Existing Housing on Former Fort Ord.
c. Inclusionary housing requirements for existing occupied housing on the former Fort Ord can be fulfilled with fewer moderate income housing units than specified in Table

17.48.030-1 if a greater percentage of very low and low income housing units are provided and the total number of very low, low and moderate income units is not less than twenty forty percent, and the allocation of the inclusionary units is approved as part of the affordable housing agreement. The trading of units is one -way only from moderate income to low and very low income, or from low income to very low income. 10 Ordinance No. 2025-
Page Four

Section 3. California Environmental Act (CEQA).

The proposed action is exempt from the California Environmental Quality Act (CEQA) under Section 15061(b)(3) as there is no reasonabl e possibility that the adoption of the ordinance will have a significant effect on the environment. Because the proposed action merely updates the Municipal Code to clarify the housing types that are allowed in certain residential zones, subject to a use permit and project -specific environmental review as necessary, there is no possibility that the activity in question may hav e a significant effect on the environment. No further environmental review is necessary.

Section 4. Severability.

It is the intent of the City Council of the City to supplement applicable state and federal law and not to duplicate or contradict such law and this ordinance shall be construed consistently with that intention. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase of this ordinance, or its application to any person or circumstance, is for any reason held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases of this ordinance, or its application to any other person or circumstance. The City Council declares that it would have adopted each section, subsection, subdivision, paragraph, sentence, clause, or phrase independently, even if any one or more other sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases were declared invalid or unenforceable.

Section 5. Effective Date.

This ordinance shall be in full force and effect thirty (30) days following its passage and adoption, as certified by the City Clerk.

The foregoing ordinance was introduced and read on the 20th day of May 2025 and was finally adopted on the 3rd day of June 2025, by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

______________________________
Bruce Delgado, Mayor
ATTEST:

_______________________________
Anita Sharp, Deputy City Clerk

11 EXHIBIT A

FINDINGS

Consistent with the General Plan
1) General Plan Policy 5.4 and 5.4.6 - Zoning Ordinance Update. A major revision of the City’s existing zoning code is required to implement the General Plan. The initial step should be to thoroughly review and critique the existing code and identify its deficiencies. Changes are required to implement Housing Element policies and programs.

Evidence: By adopting the revisions to the zoning ordinance as required by Program 2.4 of the Housing Element, the City will be implementing General Plan Policy

5.4.6 which directs city staff to review the Municipal Code for consistency with Housing Element Law.

2) General Plan Policy 5.7 – Housing Availability Ordinances. This policy requires the City to prepare and adopt certain ordinances to address the General Plan objectives of matching housing to the needs of local employees and providing housing to meet the needs of households of all economic levels.

Evidence: By reducing the housing constraints for special housing needs groups and making the City’s inclusionary housing ordinance applicable to more residential development per Program 2.4 of the Housing Element, the City will be implementing General Plan Policy 5.7.

12 May 8, 2025
Mayor Bruc
e Delgado
City of Marina
211 Hillcrest Avenue
Marina, CA 93933
RE: Inclusionary Ordinance Amendment for Fort Ord Lands and better incentives for affordable housing

Dear Mayor Delgado and City Council Members:

Last month, the M
arina Planning Commission approved an amendment to Marina’s Inclusionary Ordinance. The amendment will lower the inclusionary requirement for the former Fort Ord area from 40% to 20%. We ask that the City, when lowering the inclusionary requirement, also commit to incentivizing other methods for attaining affordable housing.

While we agre
e that 40% inclusionary is unrealistic and even counterproductive to ensuring affordable housing production, Marina should consider the objective behind the 40% requirement, i.e. the production of a greater amount of affordable housing. We ask the City to identify other mechanisms for ensuring the same desired outcome. There are other strategies for encouraging affordable housing development, many of which are as or more effective than an inclusionary requirement. These include: incentivizing smaller units; zoning higher densities; reducing impact fees and/or charging fees on a square foot basis rather than a unit basis; and requiring minimum zoning densities.

If Marina takes aw
ay half of a requirement intended to encourage below market rate housing production, it should replace it with some other means of accomplishing the same goal. If the City amends the ordinance to reduce the 40% inclusionary requirement for former Fort Ord lands, we ask that it simultaneously add language committing to incentivize other options.

We would also lik
e to bring to your attention that the California Department of Housing and Community Development (HCD) is authorized to require a city to conduct a feasibility study for post-2017 changes to an inclusionary housing ordinance in which the requirement exceeds 15%.

P .O. Box 1876, Salinas, CA 93902-1876 | 831-759-2824 | www.landwatch.org | [email protected] 13 See AB 1605; Government Code §65850.01. This study is needed to demonstrate that the higher affordability requirement doesn't unduly constrain housing production.

Setting the inclusionary requirement at 15% would obviate the risk that HCD would require an expensive and time-consuming feasibility study.

Thank you for your consideration of this request. Please feel free to contact me should you have any questions.

Regards,

Michael DeLapa
Executive Director

Page 2 ends

14 May 20, 2025 Item No. 11e

Honorable Mayor and Members City Council Meeting
of the Marina City Council of May 20, 2025

CITY COUNCIL TO CONSIDER OPENING A PUBLIC HEARING AND

RECIEVING AND FILING A REPORT AND PRESENTATION ON THE
CITY’S VACANCIES, RECRUITMENT AND RETENTION, INLCUDING
ANY PRESENTATIONS FROM THE CITY’S REPRESENTED
BARGAINING GROUPS, PUSUANT TO ASSEMBLY BILL 2561 AND
GOVERNMENT CODE 3502.03

REQUEST:

It is recommended that the City Council:

1. Open a public hearing; and

2. Receive a report and presentation regarding City vacancies, recruitment and retention efforts, including any presentation from the City’s represented bargaining groups, pursuant to California Government Code Section 3502.3.

BACKGROUND:

Assembly Bill 2561 was passed with an effective date of January 1, 2025, and requires public agencies to hold a public hearing regarding vacancies, recruitment and retention efforts prior to the adoption of a final budget. The bill was enacted into law and is codified as California Government Code Section 3502.3. (“EXHIBIT A”)

Under (Gov. Code § 3502.3), the City is required to:

1. Hold a Public Hearing: At least once each fiscal year, at a public hearing before the City Council the City shall present information regarding the status of vacancies and recruitment and retention efforts (Gov. Code § 3502.3(a)(1)) and identify any necessary changes to policies, procedures, and recruitment activities that may lead to obstacles in the hiring process (Gov. Code § 3502.3(a)(3)).

If the City Council adopts an annual or multiyear budget during the fiscal year, this presentation must occur prior to the City Council’s adoption of the final budget for the City (Gov. Code § 3502.3(a)(2).)

2. Allow Employee Organization Participation: Allow the recognized employee organization for each bargaining unit at the City to make presentations during the public hearing concerning vacancies and recruitment and retention efforts. (Gov. Code § 3502.3(b).)

3. Provide Additional Reporting for High Vacancy Rates: If vacancies within a single bargaining unit meet or exceed 20% of authorized full-time positions in that bargaining unit, upon request of the recognized employee organization for that bargaining unit, the City must provide additional information during the public hearing, including the following: (1) the total number of vacancies; (2) the number of applicants; (3) the average time to fill positions; and (4) opportunities to improve compensation and working conditions for employees in the bargaining unit. (Gov. Code § 3502.3(c).)

1 City of Marina Bargaining Groups:

There are 5 bargaining groups in the City consisting of 101 authorized positions.

Table 1: Bargaining Groups
City of Marina - Bargaining Groups
UWUA – Utility Workers Union of Ameria
MMEA – Marina Management Employees Association
MPOA – Marina Public Safety Officers Association
MPFFA – Marina Professional Fire Fighters Association
MPSMA – Marina Public Safety Mid Management Association

Vacancies in an organization can occur for several reasons, such as the creation of a newly budgeted position, internal promotions or transfers, or when an employee departs due to retirement, voluntary separation or involuntary separation. For the City of Marina, as of April 1, 2025, the vacancy rate was 10%.

Table 2: Vacancy Rate by Bargaining Group as of April 1, 2025.

City of Marina Bargaining Groups Vacancy Rate
Number of
Vacancies
Number of
Authorized
Positions
UWUA 7% 3 42
MPFFA 0% 0 18
MPOA 7.7% 2 26
MMEA 40% 4 10
MPSMA 0% 0 5

California Government Code Section 3502.3 requires additional information for a bargaining group if the number of vacancies meet or exceed 20% of authorized full-time positions in that bargaining unit. In this instance, only the MMEA bargaining group exceeded the 20% threshold.

Additional information for MMEA

1. The total number of vacancies – 4

2. Number of applicants
a. City Engineer:
i. 2023 May: 9 applicants
ii. 2023 October: 6 applicants
iii. Combined position with Public Works Director through March 2024 iv. Currently work is being performed by consultant/contractor.

b. Associate Engineer:
i. 2023 Vacant Assistant Civil Engineer reclassed to Associate Engineer ii. Currently work is being performed by consultant/contractor.

2 c. Other vacancies have not been posted/recruited for since authorized through the budget or have had classification changes
i. Housing Manager
a. Approved September 2023
b. Work was being performed by Assistant City Manager
through May 2024
c. Develop classification function and duties
ii. Arborist/Botanist/Landscape Architect
a. Approved September 2024
b. Develop classification (combination) and duties
iii. Sr. Management Analyst/Communications/Public Relations a. 2019 (October) – Vacant Economic Development Position b. 2020-2022 – COVID
c. 2023 – Housing/Economic Development/Public Relations/ Communications
d. 2024 – Communications/Public Relations

3. Average time to fill positions – 116 Days

4. Opportunities to improve compensation and working conditions for employees in the bargaining unit. (Gov. Code § 3502.3(c).).

a. The City conducts a compensation study of comparable agencies during labor negotiations, to ensure competitive salary and benefits package. b. Continued process improvements to streamline recruitment and attract top qualified candidates.
c. Continued Employee Engagement efforts to maintain a high retention rate.

AB2561 allows City recognized employee bargaining unit to make a presentation during the public hearing regarding vacancies, recruitment and retention efforts.

ANALYSIS:

When a vacancy arises, Human Resources will prioritize filling the position promptly to ensure smooth continuation of services and maintain operations. Prompt recruitment and hiring also prevent disruptions within departments and support the overall stability of the workforce. There are times where certain positions require research in order to identify the appropriate classification, duties and salary, resulting in additional time prior to the position being finalized, posted and recruited. During these times, the work may be supplemented by consultants or interim assignments.

The Human Resources Department understands it is vital to attract individuals with the right skills and expertise who will contribute to the City’s long-term success. By identifying and selecting top talent, the recruitment process ensures the City is staffed with individuals who possess the necessary skills, knowledge, and values to drive progress and support the organization’s ongoing growth and development.

The Personnel Manual Section 4 – Employment, Selection and Appointment illustrates the recruitment process for the City. Recruitment within the organization follows a structured process to ensure efficiency and compliance. The process stated in the Personnel Manual ensures a sound process. Over the last two years, efficiencies and marketing strategies have been incorporated throughout the process to increase the interest of top qualified applicants and to create a more streamlined and collaborative process with the departments.

3 According to Governmentjobs.com and Neogov - State governments have the shortest time-to-hire, filling open positions on average in 96 days. At the local government level, agencies need an average of 130 days or approximately 4 months to find a qualified hire.

Changes in the last two years:
• Targeted Advertising – work with the departments for the best advertising strategies, including ad placements in common industry job boards.
• Highlight Key Positions on our Professional Social Network platform, such as LinkedIn. • Attended Local Career Fairs
• Streamlining recruitment process – ensuring diversity on panels and candidate pools • Recruitment strategy and timeline form, which is completed during the recruitment “start” meeting. This initial meeting is to discuss ideal candidate, timeline, posting, application screening criteria, testing requirements, high priority items, interview questions, ad list, etc. • Increased contact points with applicants throughout the recruitment process, ensuring continued engagement and interest.

As an example: prior to the changes stated above, the number of applications received by the city for an Administrative Assistant averaged approximately 5 applications compared to the most recent Administrative Assistant recruitment, where we received 63 applications, with 30 of those meeting the minimum qualifications.

Although the vacancy rate stands at 10%, the City faces challenges in filling hard-to-fill positions.

Contributing factors include skill shortages, high cost of living in the area, housing shortage and a competitive job market. To address these challenges, the City evaluates compensation, aiming to identify pay differentials and assess how our compensation compares to that of market comparable cities.

Employee retention is a key priority for the City, and our efforts to create an engaging and supportive work environment have significantly contributed to maintaining a high retention rate of 79% in this period (Jan 2024 – Apr 2025). The initiatives we’ve implemented are designed to ensure that employees feel valued, supported, and engaged, which helps reduce turnover and improve overall workforce stability.

Employee engagement improves employee morale and also fosters an environment where staff feel appreciated, connected, and motivated to contribute long-term. As a result, these efforts help reduce turnover, increase job satisfaction, and support the City’s overall goals by retaining top talent, and recruitment. The City has made significant efforts and will continue to be innovative and proactive in anticipating the needs of our workforce. By staying ahead of challenges and adapting to changing circumstances, we remain committed to fostering a dynamic and effective work environment that supports both employee satisfaction and the efficient delivery of services.

FISCAL IMPACT
This item does not have a fiscal impact and is a receive and file report.

CONCLUSION:

This request is submitted for City Council consideration and approval.

Respectfully submitted,

____________________________
Belinda Varela, Director,
Human Resources & Risk Management
City of Marina
REVIEWED/CONUR:

Layne Long
City Manager
City of Marina

4 SHARE THIS:

Date Published: 09/23/2024 09:00 PM
AB-2561 Local public employees: vacant positions. (2023-2024) Assembly Bill No. 2561
CHAPTER 409
An act to add Section 3502.3 to the Government Code, relating to public employment. [ Approved by Governor September 22, 2024. Filed with Secretary of State September 22, 2024. ]

LEGISLATIVE COUNSEL'S DIGEST
AB 2561, McKinnor. Local public employees: vacant positions.

Existing law, the Meyers-Milias-Brown Act (act), authorizes local public employees, as defined, to form, join, and participate in the activities of employee organizations of their own choosing for the purpose of representation on matters of labor relations. The act requires the governing body of a public agency to meet and confer in good faith regarding wages, hours, and other terms and conditions of employment with representatives of recognized employee organizations and to consider fully presentations that are made by the employee organization on behalf of its members before arriving at a determination of policy or course of action.

This bill would, as specified, require a public agency to present the status of vacancies and recruitment and retention efforts at a public hearing at least once per fiscal year, and would entitle the recognized employee organization to present at the hearing. If the number of job vacancies within a single bargaining unit meets or exceeds 20% of the total number of authorized full-time positions, the bill would require the public agency, upon request of the recognized employee organization, to include specified information during the public hearing. By imposing new duties on local public agencies, the bill would impose a state-mandated local program. The bill would also include related legislative findings.

The California Constitution requires local agencies, for the purpose of ensuring public access to the meetings of public bodies and the writings of public officials and agencies, to comply with a statutory enactment that amends or enacts laws relating to public records or open meetings and contains findings demonstrating that the enactment furthers the constitutional requirements relating to this purpose.

This bill would make legislative findings to that effect.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement shall be made pursuant to these statutory provisions for costs mandated by the state pursuant to this act, but would recognize that a local agency or school district may pursue any available remedies to seek reimbursement for these costs.

Vote: majority
Appropriation: no Fiscal Committee: yes Local Program: yes Home Bill Information California Law Publications Other Resources My Subscriptions My Favorites Bill Text - AB-2561 Local public employees: vacant positions. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB2561 1/3

EXHIBIT A
5 THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. The Legislature finds and declares as follows:
(a) Job vacancies in local government are a widespread and significant problem for the public sector affecting occupations across wage levels and educational requirements. (b) High job vacancies impact public service delivery and the workers who are forced to handle heavier workloads, with understaffing leading to burnout and increased turnover that further exacerbate staffing challenges.
(c) There is a statewide interest in ensuring that public agency operations are appropriately staffed and that high vacancy rates do not undermine public employee labor relations.

SEC. 2. Section 3502.3 is added to the Government Code, to read:
3502.3. (a) (1) A public agency shall present the status of vacancies and recruitment and retention efforts during a public hearing before the governing board at least once per fiscal year. (2) If the governing board will be adopting an annual or multiyear budget during the fiscal year, the presentation shall be made prior to the adoption of the final budget. (3) During the hearing, the public agency shall identify any necessary changes to policies, procedures, and recruitment activities that may lead to obstacles in the hiring process. (b) The recognized employee organization for a bargaining unit shall be entitled to make a presentation at the public hearing at which the public agency presents the status of vacancies and recruitment and retention efforts for positions within that bargaining unit.
(c) If the number of job vacancies within a single bargaining unit meets or exceeds 20 percent of the total number of authorized full-time positions, the public agency shall, upon request of the recognized employee organization, include all of the following information during the public hearing:
(1) The total number of job vacancies within the bargaining unit. (2) The total number of applicants for vacant positions within the bargaining unit. (3) The average number of days to complete the hiring process from when a position is posted. (4) Opportunities to improve compensation and other working conditions. (d) This section shall not prevent the governing board from holding additional public hearings about vacancies. (e) The provisions of this section are severable. If any provision of this section or its application is held invalid, the invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(f) For purposes of this section, “recognized employee organization” has the same meaning as defined in subdivision (a) of Section 3501.

SEC. 3. The Legislature finds and declares that Section 2 of this act, which adds Section 3502.3 to the Government Code, furthers, within the meaning of paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution, the purposes of that constitutional section as it relates to the right of public access to the meetings of local public bodies or the writings of local public officials and local agencies. Pursuant to paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution, the Legislature makes the following findings:

It is in the public interest, and it furthers the purposes of paragraph (7) of subdivision (b) of Section (3) of Article I of the California Constitution, to ensure that information concerning public agency employment is available to the public.

SEC. 4.

No reimbursement shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code for costs mandated by the state pursuant to this act. It is recognized, however, that a local agency or school district may pursue any remedies to obtain reimbursement available to it under Part 7 (commencing with Section 17500) and any other law.

Bill Text - AB-2561 Local public employees: vacant positions. https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB2561 2/3

EXHIBIT A
6 May 20, 2025 Item No: 13a

Honorable Mayor and Members City Council Meeting
of the Marina City Council of May 20, 2025

SUPPLEMENTAL STAFF REPORT TO ITEM 13A: CITY COUNCIL
CONSIDER ADOPTING RESOLUTION NO. 2025-, APPROVING A SALES

TAX REVENUE SHARING AGREEMENT BETWEEN CITY OF MARINA

AND UNSTOPPABLE AUTOMOTIVE MBMCA LLC TO ASSIST WITH

THE CONSTRUCTION COSTS AND SITE DEVELOPMENT OF AN
AUTOMOBILE DEALERSHIP, AND; AUTHORIZING THE CITY

MANAGER TO EXECUTE THE AGREEMENT, SUBJECT TO FINAL
REVIEW BY THE CITY ATTORNEY.

ANALYSIS:

The Unstoppable Group, LLC has approached the City to revise the terms of the draft tax sharing agreement to provide for a firm incentive of $5 million dollars, rather than $5 million dollars over a 5-year period. The original discussions with staff revolved around providing an incentive of $5 million dollars within a 5-year period. However, there appears to have been an assumption by the Unstoppable Group that a $5 million dollar incentive would be achievable in 5-years, based on the assumption that there would be a 50% rebate from the sales tax received based on a 1 ½ percent sales tax. The 1 ½ percent sales tax they were looking at is the additional 1 ½ percent tax approved by the voters and would not be subject to the tax sharing agreement. The City’s base tax rate, which is 1 percent, would be applicable to the sharing agreement . Applying the City’s 1 percent sales tax to expected sales over the 5-year period as provided in the agreement resulted in a $3.48 million dollar estimated incentive , less than the $5 million initial incentive proposed by the Unstoppable Group.

As a result of this request, City staff worked with its consultant to determine whether extending the 5-year cap to a $5 million dollar cap would still make financial sense to the City. The attached revised Economic Development Subsidy Report shows that to meet the $5 million cap, the cost- sharing time period would need to be extended from five to seven years . The report shows that the City will receive an estimated $11,635,000 over the 7-year period. Once the incentive sharing agreement is over in year seven, the city’s estimated annual direct tax revenue will be $3,195,000.

In addition to clarifying the original intent of staff and the Unstoppable Group with respect to the incentive in the tax sharing arrangement, a couple of other clarifications were requested, including by staff:

• Fixing title of the Agreement
• Providing for quarterly payments to the Unstoppable Group; and • Designating the property in the City of Marina as the point of sale for any internet sales.

A revised economic development subsidy report and agreement are attached to this supplemental report for Council consideration.

SUPPLEMENTAL REPORT

FISCAL IMPACT:

First year direct new tax revenue to the City will be $882,000. Cumulative over seven years, the new direct tax annual revenue will be $11,635,000. The revenue will go to the General Fund.

Additionally, the City’s portion of the Monterey County pooled sales tax could increase an additional $100,000 to $400,000.

CONCLUSION
This request is submitted for City Council consideration and direction.

Respectfully submitted,

____________________________
Layne Long
City Manager
City of Marina
1 661\05\3982867.5

PERFORMANCE BASED SALES TAX REVENUE SHARING AGREEMENT
This Performance Sales Tax Revenue Sharing Agreement (this “Agreement”) is entered into this ___ day ofon __________, 2025 by and between the City of Marina, a California municipal corporation (the “City”), and Unstoppable Automotive MBMCA LLC, a California limited liability company (“Developer”). The City and Developer are collectively referred to herein as the “Parties” and individually as a Party.

RECITALS
A. The City and Marina Community Partners (“MCP”) entered into that certain Development Agreement dated July 8, 2005 and recorded in the Official Records of Monterey County as Document No. 2005080655 on August 5, 2005, as modified by that Administrative Modification to Development Agreement dated May 28, 2010 and that Second Administrative Modification to Development Agreement dated March 29, 2013 (collectively, the "Development Agreement") with regards to that certain development commonly referred to as the Dunes on Monterey Bay. The Dunes development is a mixed-use development including retail, office, hotel and residential uses.

B. MCP entered into a Disposition and Development Agreement with the former Redevelopment Agency of the City of Marina dated as of May 31, 2005 as modified by that certain Implementation Agreement Regarding University Village dated September 6, 2006 and that certain Second Implementation Agreement dated August 5, 2008, that certain Operating Agreement Clarifying and Modifying Certain Project Approvals for the Specific Plan for the Dunes on Monterey Bay dated December 17, 2019, that certain University Villages Settlement Agreement between MCP, the City of Marina and Save Our Peninsula Committee and that certain Order of The Court of Appeal dismissing appeal filed September 20, 2006 and that certain Stipulation Between Plaintiffs Monterey/Santa Cruz County Building And Construction Trades Council; International Brotherhood of Electrical Workers, Local 234; Mechanical Contractors Council of Central California and Ranae and William Gary Martin and Defendants Marina Community Partners, LLC; Shea Properties LLC; W.L. Butler Construction, Inc.; City of Marina Redevelopment Agency and Board of the City of Marina Redevelopment Agency; Cypress Marina Heights LP and East Garrison Partners I LLC and Order of Approval filed October 9, 2008 (collectively, the “DDA”) setting forth rights, terms, conditions and requirements for the acquisition and development of certain real property described therein (the “Site”) and referred to originally as University Villages and currently referred to as the Dunes. The City has succeeded to the former Redevelopment Agency’s rights and obligations under the DDA.

C. Developer is proposing to acquire certain property consisting of a portion of the Site and more particularly described in Exhibit A attached hereto (“Property”) upon which Developer proposes to develop and operate an approximately 60,000 square foot automobile dealership for the sale and service of Mercedes Benz automobiles and Sprinter Vans and AMG service department (“Development”). Developer, as a condition of acquiring the automobile dealership to be located in the Development is Formatted: Font: Bold
Formatted: Underline

EXHIBIT B
2 661\05\3982867.5
required by the car manufacturer to develop the Development consistent with the manufacturer’s standards resulting in development costs that exceed the amount Developer can reasonably be expected to recover from operation of the Development.

D. The City has determined that the Development is an important catalyst for the continued development of the Dunes Project and that development of the Development will provide substantial direct and indirect benefits to the City and economic opportunities, including sales tax revenues, increased property tax revenues and increased jobs in the region, will enhance the City’s position as a regional retail and commercial destination and serve as a catalyst for additional retail and commercial development.

E. The City has determined that the development and operation of the Development in accordance with this Agreement is in the best interest of the City and will provide significant benefits to the City and the community and therefore is willing to enter into this Agreement to provide financial assistance to the Developer in accordance with the terms and conditions set forth below and in exchange for the Developer’s agreement to develop and operate the Development.

F. The City has determined that an economic development subsidy to the Developer as set forth in this Agreement is appropriate because of the costs associated with the construction of the Development, the sales tax and property tax benefits to the City, and the increased employment expected from the Development all as more specifically described in the Economic Impact Analysis attached as Exhibit C and incorporated herein.

G. City is a Charter City. The subject matter of this Agreement is a municipal affair and, therefore, except for those provisions of state law expressly adopted by City, the provisions of state law applicable to general law cities do not apply to this Agreement.

AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

ARTICLE 1.

Formatted: Underline

EXHIBIT B
3 661\05\3982867.5
(c) “Conditions Precedent” means all of the following: (i) the Developer has completed the Development within the time set forth in Section 3.2 below; (ii) the Developer has submitted a cost certification pursuant to Section 3.3 below to the City of the costs of construction of the Development that shows costs exceeding Forty Million Dollars ($40,000,000); and (iii) no Developer Event of Default shall have occurred. (d) “Developer” is defined in the preamble.
(e) “Developer Event of Default” is defined in Section 4.3. (f) “Developer Sales Tax Share” means fifty percent (50%) of the Sales Tax generated by the Development during the Term of this Agreement. (g) “Effective Date” is defined in Section 2.1.
(h) “Fiscal Year” means the fiscal year of City beginning on July 1 and ending on June 30 of each year.
(i) “Fiscal Year Quarter” means each three month period of a Fiscal Year commencing with July 1 of each Fiscal Year.
(i)(j) “Force Majeure Event” is defined in Section 3.8. (j)(k) “Indemnitees” means City and its councilmembers, officers, officials, employees, volunteers, representatives, attorneys, and consultants. (k)(l) “Opening” means the date that the Development opens for business for sales and services to Developer’s customers during normal business hours. (l)(m) “Party” means either the City or Developer.
(m)(n) “Parties” means collectively the City and Developer. (n)(o) “Sales Tax Law” means the Bradley-Burns Uniform Local Sales and Use Tax Law (California Revenue and Taxation Code section 7200, et seq.). If the Bradley-Burns Uniform Local Sales and Use Tax Law is further amended, terminated or rescinded, and Sales Taxes are calculated in an alternate manner or are replaced by an alternate revenue stream (i) arising from the retail sale, use or other consumption of tangible personal property from or on the Property, or (ii) designated as being a replacement for Sales Taxes previously generated by the retail sale, use or other consumption of tangible personal property on or from the Property, then “Sales Taxes” shall also mean those revenues attributable to sales, services or consumption of tangible personal property on or from the Property, collected for City in the alternate manner of calculation, so long as City receives its portion of such revenues and has the legal right under California and/or federal Law to retain and control the disposition of all of its portion thereof. (o)(p) “Sales Taxes” means for each Fiscal Year Quarter during the Term, that portion of taxes actually received by City from the imposition of Sales Tax Law attributable to the sales, services or business activities of Developer at the Development to the extent allocated

EXHIBIT B
4 661\05\3982867.5
and paid by the State Board of Equalization to City for its use, in a particular Fiscal Year Quarter. The defined term “Sales Taxes” shall not include any of the following: (i) any sales tax levied by, collected for or allocated to the State of California, the County, or any district or entity (including an allocation to a statewide or Countywide pool) other than City; (ii) any administrative fee charged by the State Board of Equalization or the County; (iii) any sales tax subject to any sharing, rebate, offset or other charge imposed pursuant to any applicable Law; (iv) any sales tax (or other funds measured as sales tax) required by the State of California to be paid over to another public entity (including the State) or set aside and/or pledged to a specific use other than for deposit into City’s general fund; (v) the district sales tax imposed by the City of Marina currently set at 1.5%; (vi) any other sales tax that is imposed within the boundaries of City and which is intended to fund a specific activity or project, rather than to be used by City as general fund revenues, or which has specific voter approved limitations on its uses. No Sales Taxes shall be considered to have been received by City until City is able to confirm the amount of City’s actual receipt thereof from the State Board of Equalization. (p)(q) “Term” is defined in Section 2.2.

ARTICLE 2.

EFFECTIVE DATE AND TERM
Section 2.1 Effective Date. This Agreement shall take effect the date this Agreement is signed by both Parties (the “Effective Date”).

Section 2.2 Term. The term of this Agreement begins on the Effective Date and ends on the later of (i) the October 1st immediately following the fifth (5th) anniversary of the Opening of the Development, subject to a year-for-year tolling in the event of a Force Majeure Event, or (ii) the date on which the Developer shall have received $5,000,000 in City Payments under this Agreement, unless terminated pursuant to the express provisions of this Agreement (the “Term”).

ARTICLE 3.

DEVELOPER REIMBURSEMENT
Section 3.1 Payment of Development Costs. Developer shall be responsible for the payment of all costs associated with the Development, including, but not limited to costs of construction, permit and impact fees, costs of any off-site improvements required as a condition of approval of the Development and any other costs.

Section 3.2 Development. Developer shall commence construction of the Development no later than January 1, 2026, and complete construction no later than fifteen (15) months after commencement as evidenced by a certificate of occupancy or final permit sign off by the City. The time frames for commencement and completion are subject to extension pursuant to Section 3.8. The Development shall be constructed consistent with the concept design plan submitted by the Developer to the City and attached hereto as Exhibit B.

Section 3.3 Development Costs. The City payments provided herein are being provided because the costs of the Development exceed the amounts that the Developer can Formatted: Font: Bold
Formatted: Underline

EXHIBIT B
5 661\05\3982867.5
reasonably expect to recover from the operation of the Development. In order to verify the costs of the Development, the Developer shall provide the City within thirty (30) days of completion of construction of the Development a cost certification showing all costs associated with construction of the Development, including, but not limited to land costs, design costs, hard construction costs, permit and impact fees and all other costs. Upon receipt of the Developer’s cost certification, the City may request additional information and supporting documentation including but not limited to construction contracts, contractor payment applications, invoices and other evidence of payments. Submission of a cost certification along with such evidence as the City may require to verify costs documenting that at least Forty Million Dollars ($40,000,000) was spent on the Development is a Condition Precedent to the City payments set forth in Section

3.6. Section 3.4 Developer Annual Report. No later than sixty (60) days following the end of each Fiscal Year, commencing upon the end of the first Fiscal Year after the Opening the Developer shall provide the City with a report on the performance of the Development, including, but not limited to, annual gross sales, total number of employees as well as the total full time equivalent employees with a breakdown of the job types and the number of employees that are Marina residents. The City may from time to time request additional information to be included in the annual reports. The City shall have the right by written notice to the Developer to review Developer’s books and records to confirm information provided in the annual report.

Section 3.5 City Business License. Developer shall maintain a City Business License at all times that the Development is open for business.

Section 3.6 City Payments.
(a) Subject to satisfaction of all Conditions Precedent, commencing on the first October 1stdate that is ninety (90) days following the end of the first full Fiscal Year in whichQuarter after the Development Opening occurs and on each October 1st ninety (90) days following the end of each Fiscal Year Quarter thereafter continuing throughout the Term, the City shall pay to Developer the Developer Sales Tax Share of the Sales Tax based on the Sales Tax actually received by the City during the immediately previous Fiscal Year Quarter, along with a certification by the City’s Finance Director specifying the total amount of Sales Tax received from the operation of the Development during the previous Fiscal Year Quarter (“City Payment(s)”). Nothing contained in this Agreement shall obligate or otherwise commit the City to pay any amount to Developer unless and until the City receives the Sales Taxes attributable to sales, services or business activities of Developer at the Development. (b) Developer shall, at the request of the City, provide the City with its Sales Tax reporting forms submitted to the State Board of Equalization to verify the Sales Tax reported to the Board of Equalization. Developer shall designate the Property as the point of sale for sales tax purposes for all goods and services sold or leased on the Property, whose sales or leases originate from the Property.
(c) Following receipt of the City’s certification of the Sales Tax for the prior Fiscal Year Quarter, Developer shall review the amount of Sales Tax determined by the City’s Finance Director and shall either approve or disapprove the amount within thirty (30) days of

EXHIBIT B
6 661\05\3982867.5
receipt. Failure to notify the City of Developer’s disapproval within thirty (30) days of receipt shall be deemed Developer’s approval of the City Finance Director’s calculations. Any disapproval shall state in writing the reasons for disapproval and the requested changes and shall provide any additional information or documentation available to Developer to support Developer’s determination of the Sales Tax. The City, upon receipt of a disapproval by Developer and the additional information, shall review all information provided by Developer and either re-determine the Sales Tax for the previous Fiscal Year Quarter or provide Developer with a statement of disagreement with regards to the Sales Tax received by the City. In the event the City and Developer cannot agree on any item of the certification, the City and Developer shall submit the item mediation pursuant to Section 4.5 below.

Section 3.7 Failure to Operate. If the Development ceases to operate for a period of sixty (60) consecutive days absent a Force Majeure Event, the City shall have the right to terminate this Agreement, and the City shall have no obligation to make any further payments to Developer. Any expansion, renovation, repair or restoration of damage by Developer shall not be deemed a discontinuance of operations under this Section.

Section 3.8 Force Majeure. In addition to specific provisions of this Agreement, performance by any Party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; riots; pandemics, floods; earthquakes; fires; or casualties (a “Force Majeure Event”). An extension of time for Force Majeure Event shall only be for the period of the enforced delay, which period shall commence to run from the time of the notification of the delay by the Party requesting the extension to the other Party. The Party requesting an extension of time under this Section 3.8 shall give notice promptly following knowledge of the delay to the other Party. If, however, notice by the Party claiming such extension is sent to the other Party more than thirty (30) days after knowledge of the commencement of the delay, the period shall commence to run upon the earliest of (i) thirty (30) days prior to the giving of such notice; (ii) the date that the other Party received knowledge of the events giving rise to the delay or (iii) if the Force Majeure Event is one that results in the temporary closure of the Developer Store, the date of such closure.

Section 3.9 Limited City Obligation. The obligations arising from this Agreement are not a debt of the City, nor a legal or equitable pledge, charge, lien, or encumbrance upon any of its property or upon any of its monies, income, receipts, or revenues, except the revenues from the Sales Tax as provided herein. Neither the general nor any other fund of the City shall be liable for the payment of any obligations arising from this Agreement. The credit or taxing power of the City is not pledged for the payment of any obligation arising from this Agreement.

Nothing herein shall provide Developer any right to compel the forfeiture of any of the City's property to satisfy any obligations arising from this Agreement. The obligations created by this Agreement do not create an immediate indebtedness of the City, but rather create a liability only when a payment becomes due hereunder.

ARTICLE 4.

DEFAULT AND REMEDIES
Section 4.1 Application of Remedies. The provisions of this Article shall govern the Parties' remedies for breach of this Agreement.

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Section 4.2 Fault of City.
(a) Event of Default. Following notice and opportunity to cure as set forth in subsection (b) below, each of the following events constitutes a "City Event of Default" and a basis for Developer to take action against the City:
(i) The City fails to make any payment to Developer when required under this Agreement.
(ii) The City breaches any other material provision of this Agreement. (b) Notice and Cure Procedure. Upon the occurrence of any of the above- described events, Developer shall first notify the City in writing of its purported breach or failure, giving the City thirty (30) days from receipt of such notice to cure such breach or failure.

In the event the City does not then cure the default within such thirty (30)-day period (or, if the default is not reasonably susceptible of cure within such thirty (30)-day period, the City fails to commence the cure within such period and thereafter to prosecute the cure diligently to completion), then Developer shall be entitled to pursue any or both of the following remedies:
(1) terminating this Agreement by written notice to the City; and (2) exercising its remedies as provided in Section 4.4. If Developer elects to terminate this Agreement, the provisions of this Agreement that are specified to survive such termination shall remain in full force and effect.

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(b) Notice and Cure Procedure. Upon the happening of any of the above- described events the City shall first notify Developer in writing of its purported breach or failure, giving Developer thirty (30) days from receipt of such notice to cure such breach or failure. If Developer does not cure the default within such thirty (30)-day period (or if the default is not reasonably susceptible of being cured within such thirty (30)-day period, Developer fails to commence the cure within such period and thereafter to prosecute the cure diligently to completion), then the City shall be entitled to pursue any or both of the following remedies: (1) terminating this Agreement by written notice to Developer; (2) exercising its remedies pursuant to Section 4.4. If the City elects to terminate this Agreement, the provisions of this Agreement that are specified to survive such termination shall remain in full force and effect.

Section 4.4 Remedies.
(a) Either Party may, in addition to any other rights or remedies that it may have available in law or equity (excluding punitive damages and consequential damages), institute legal action to cure, correct, or remedy any default by the other Party to this Agreement, to enforce any covenant or agreement herein, or to enjoin any threatened or attempted violation hereunder or to seek specific performance. For purposes of instituting a legal action under this Agreement, any City Council determination under this Agreement as it relates to an alleged default hereunder shall be deemed a final agency action. Developer acknowledges that it may not collect for future years based on a current or prior default, and that the City’s obligation to pay with respect to any Fiscal Year Quarter is contingent upon receipt of Sales Taxes for that Fiscal Year Quarter and dependent upon the amount of those Sales Taxes and fees for determination of the amount to be paid.
(b) The Parties hereby acknowledge and agree that it is a material part of Developer’s consideration to City that Developer, on the one hand, and the City, on the other hand, for themselves, their successors and assignees, hereby release one another's officers, trustees, directors, agents and employees from any and all claims, demands, actions, or suits of any kind or nature arising out of any liability, known or unknown, present or future, including, but not limited to, any claim or liability, based or asserted, pursuant to Article I, Section 19 of the California Constitution, the Fifth and Fourteenth Amendments of the United States Constitution, or any other law or ordinance which seeks to impose any money damages, whatsoever because of the terms of this Agreement, or because of the manner of implementation or performance of this Agreement.

Section 4.5 Mediation. If Developer and City have any disputes relating to this Agreement, the Sales Tax amount, each Party’s respective performance or obligations hereunder or a notice of default has been issued, then, upon the written request of either Party given within ten (10) days after written notice of the dispute or the notice of default, as applicable, the issue shall be submitted to nonbinding mediation with a neutral mediator selected by mutual agreement of the Parties. Failure of either Party to timely request mediation shall be deemed a waiver of the mediation process. The mediator shall be selected and the mediation scheduled as soon as is reasonably practicable. The cost of mediation shall be borne equally by the Parties.

At the mediation meeting, the mediator shall attempt to bring the Parties together to close the gap Formatted: Underline
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between their respective positions, in an effort to settle the dispute or claim, without deciding the matter for the Parties.

ARTICLE 5.

GENERAL PROVISIONS.

This indemnity includes the fees and costs reasonably incurred by the City by its own in-house or special counsel retained to protect the City's interests. Each Party is entitled to legal counsel of its choice, at Developer's expense. The Parties and their respective counsel shall cooperate with each other in the defense of any such actions, including in any settlement negotiations. If a court in any such action awards any form of money damages to such third party, or any attorneys' fees and costs to such third party, Developer shall bear full and complete responsibility to comply with the requirements of such award, and hereby agrees to timely pay all fees and costs on behalf of City. This indemnity obligation shall not extend to any claim to the extent arising solely from the City's gross negligence or the City's failure to perform its obligations under this Agreement, and shall survive termination of this Agreement.

Section 5.2 Challenges to Agreement. Developer hereby agrees to defend (with counsel approved by the City), indemnify, protect and hold harmless the Indemnitees from any costs, losses, damages, claims including reasonable attorneys' fees and costs, resulting from any challenges brought by any third parties to the City's authority to enter into this Agreement or to make the payments provided for herein. In the event of any such third-party challenge, the Parties shall meet and confer on the defense of such litigation; and either party may elect, in lieu of defending (or continuing to defend) against such third-party challenge, to terminate this Agreement.

Section 5.3 Notices, Demands and Communications. Any approval, disapproval, demand, document or other notice to be provided under this Agreement shall be given in writing and shall be sent (i) for personal delivery by a delivery service that provides a record of the date of delivery, the individual to whom delivery was made, and the address where delivery was made; (ii) by first-class United States mail, postage prepaid, return receipt requested; or (iii) by a nationally recognized overnight courier service, marked for next day business delivery. All notices shall be addressed to the Party to whom such notice is to be given at the address stated in this Section 5.2 or to such other address as a Party may designate by written notice to the other; notices sent by a Party’s attorney on behalf of such Party shall be deemed delivered by such Party.

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City Notice Address:

City of Marina
211 Hillcrest Avenue
Marina, CA 93933
Attn: City Manager
With copies to:

City of Marina
211 Hillcrest Avenue
Marina, CA 93933
Attn: City Attorney

Developer Notice Address:

Unstoppable Automotive MBMCA LLC
40910 Temecula Center Dr
Temecula, CA 92591
Attn; Garth Blumenthal
Email: [email protected]

With a copy to:

Tribune Law Firm, LLP
601 University Ave, Suite 288
Sacramento, CA 95825
Attn: Sylvia Arostegui
Email: [email protected]

All notices shall be deemed effective on the earliest of (a) actual receipt; (b) rejection of delivery; (c) if sent by first class mail, the third day on which regular United States mail delivery service is provided after the day of mailing or; (d) if sent by overnight delivery service, on the next day on which such service makes next-business-day deliveries after the day of sending.

Section 5.4 No Assignment. Developer may not assign any of its rights or obligations under this Agreement without the prior written consent of the City, which may be withheld or granted in its sole discretion. Notwithstanding the foregoing, Developer shall have the right to assign its rights without the prior written consent of the City in connection with the following: (i) any assignment to an affiliate or related party, or (ii) any assignment for financing purposes or for collateral purposes, provided that prior to any such assignment, the Developer shall provide the City with notice of such assignment and a signed assignment agreement.

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successors or assigns (each, a “Developer Party”) in the conduct of its or their business or a member of a joint enterprise with Developer or any Developer Party. Neither City nor Developer shall be deemed or construed for any purpose to be the agent of the other, and City does not assume any responsibility for Developer or any Developer Party’s conduct or performance of this Agreement.

Section 5.6 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

Section 5.7 No Waiver. A waiver by either Party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other Party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement.

Section 5.8 Modifications. Any alteration, change, amendment or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each Party.

Section 5.9 Severability. If any provision of this Agreement or the application thereof to any person, entity or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such provision to persons, entities or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each other provision of this Agreement shall be valid and be enforceable to the full extent permitted by Law.

Section 5.10 Legal Advice. Each Party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party, or its officers, officials, agents, employees, volunteers, representatives, attorneys, or consultants, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise.

Section 5.11 Cooperation. Each Party agrees to cooperate with the other in this transaction and, in that regard, shall execute any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement.

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Section 5.13 Applicable Law. The laws of the State of California, without regard to conflict of laws principles, shall govern the interpretation and enforcement of this Agreement.

Section 5.14 No Third-party Beneficiaries. There are no third-party beneficiaries to this Agreement.

Section 5.15 Interpretation. The captions preceding the sections of this Agreement have been inserted for convenience of reference only and such captions shall in no way define or limit the scope or intent of any provision of this Agreement. This Agreement has been negotiated at arm’s length and between persons sophisticated and knowledgeable in the matters dealt with herein and shall be interpreted to achieve the intents and purposes of the Parties, without any presumption against the Party responsible for drafting any part of this Agreement.

Provisions in this Agreement relating to number of days shall be calendar days. Use of the word “including” means “including, without limitation.” As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The recitals to this Agreement and all exhibits attached hereto are incorporated by reference, as though fully restated herein.

Section 5.16 Time of Essence. Time is of the essence with respect to all obligations of Developer under this Agreement.

Section 5.17 City Approvals and Actions. Whenever a reference is made herein to an action or approval to be undertaken by City, the City Manager or his or her designee is authorized to act on behalf of City unless specifically provided otherwise or the context should require otherwise.

Section 5.18 Attorneys’ Fees. In the event that either Party to this Agreement brings an action or proceeding for a declaration of the rights of the parties under this Agreement, for injunctive relief or for an alleged breach or default of this Agreement, or in any other action arising out of this Agreement or the transactions contemplated by this Agreement, the predominantly prevailing party in any such action shall be entitled to an award of reasonable attorneys’ fees and any court costs incurred in such action or proceeding, in addition to any other damages or relief awarded, regardless of whether such action proceeds to final judgment.

Section 5.19 Land Use Entitlements and Permits. The execution of this Agreement does not constitute the grant of any required land use entitlement or permit, and all land use entitlements and permits contemplated by this Agreement and required from the City, shall be granted, denied, or conditionally granted in accordance with the City’s established procedures and in compliance with all applicable laws, rules, regulations and requirements including but not limited to the requirements of CEQA and the CEQA Guidelines. Notwithstanding any language in this Agreement that may be construed to the contrary, the City retains its full discretion to grant, deny or conditionally grant any and all entitlements or permits sought by Developer for the Development, and such discretion includes but is not limited to the discretion to exercise its independent judgment and impose on such approvals all mitigation measures and conditions that City determines are required or appropriate under CEQA and the CEQA Guidelines. No action by Developer or the City with reference to this Agreement shall be deemed a representation or warranty to Developer, or to any other person or entity, that the City will issue or approve any

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entitlements or permits, nor constitute a waiver of any state or City requirements that are applicable to the Development.

[SIGNATURES ON THE FOLLOWING PAGE.]

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date.

CITY OF MARINA, a municipal corporation

By:

Layne Long, City Manager

UNSTOPPABLE AUTOMOTIVE MBMCA LLC,
a California limited liability company
By:

Garth Blumenthal, Manager

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EXHIBIT A

PROPERTY DESCRIPTION

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EXHIBIT B

CONCEPT DESIGN

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EXHIBIT C

ECONOMIC IMPACT ANALYSIS

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SALES TAX REVENUE SHARING AGREEMENT

This Sales Tax Revenue Sharing Agreement (this “Agreement”) is entered into on __________, 2025 by and between the City of Marina, a California municipal corporation (the “City”), and Unstoppable Automotive MBMCA LLC, a California limited liability company (“Developer”). The City and Developer are collectively referred to herein as the “Parties” and individually as a Party.

RECITALS

A. The City and Marina Community Partners (“MCP”) entered into that certain Development Agreement dated July 8, 2005 and recorded in the Official Records of Monterey County as Document No. 2005080655 on August 5, 2005, as modified by that Administrative Modification to Development Agreement dated May 28, 2010 and that Second Administrative Modification to Development Agreement dated March 29, 2013 (collectively, the "Development Agreement") with regards to that certain development commonly referred to as the Dunes on Monterey Bay. The Dunes development is a mixed-use development including retail, office, hotel and residential uses.

ARTICLE 1.

DEFINITIONS
Section 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, the following capitalized words shall have the following meanings:
(a) "Agreement" means this Sales Tax Revenue Sharing Agreement. (b) “City” is defined in the preamble.
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(c) “Conditions Precedent” means all of the following: (i) the Developer has completed the Development within the time set forth in Section 3.2 below; (ii) the Developer has submitted a cost certification pursuant to Section 3.3 below to the City of the costs of construction of the Development that shows costs exceeding Forty Million Dollars ($40,000,000); and (iii) no Developer Event of Default shall have occurred. (d) “Developer” is defined in the preamble.
(e) “Developer Event of Default” is defined in Section 4.3. (f) “Developer Sales Tax Share” means fifty percent (50%) of the Sales Tax generated by the Development during the Term of this Agreement. (g) “Effective Date” is defined in Section 2.1.
(h) “Fiscal Year” means the fiscal year of City beginning on July 1 and ending on June 30 of each year.
(i) “Fiscal Year Quarter” means each three month period of a Fiscal Year commencing with July 1 of each Fiscal Year.
(j) “Force Majeure Event” is defined in Section 3.8.
(k) “Indemnitees” means City and its councilmembers, officers, officials, employees, volunteers, representatives, attorneys, and consultants. (l) “Opening” means the date that the Development opens for business for sales and services to Developer’s customers during normal business hours. (m) “Party” means either the City or Developer.
(n) “Parties” means collectively the City and Developer. (o) “Sales Tax Law” means the Bradley-Burns Uniform Local Sales and Use Tax Law (California Revenue and Taxation Code section 7200, et seq.). If the Bradley-Burns Uniform Local Sales and Use Tax Law is further amended, terminated or rescinded, and Sales Taxes are calculated in an alternate manner or are replaced by an alternate revenue stream (i) arising from the retail sale, use or other consumption of tangible personal property from or on the Property, or (ii) designated as being a replacement for Sales Taxes previously generated by the retail sale, use or other consumption of tangible personal property on or from the Property, then “Sales Taxes” shall also mean those revenues attributable to sales, services or consumption of tangible personal property on or from the Property, collected for City in the alternate manner of calculation, so long as City receives its portion of such revenues and has the legal right under California and/or federal Law to retain and control the disposition of all of its portion thereof. (p) “Sales Taxes” means for each Fiscal Year Quarter during the Term, that portion of taxes actually received by City from the imposition of Sales Tax Law attributable to the sales, services or business activities of Developer at the Development to the extent allocated 4 661\05\3982867.5
and paid by the State Board of Equalization to City for its use, in a particular Fiscal Year Quarter. The defined term “Sales Taxes” shall not include any of the following: (i) any sales tax levied by, collected for or allocated to the State of California, the County, or any district or entity (including an allocation to a statewide or Countywide pool) other than City; (ii) any administrative fee charged by the State Board of Equalization or the County; (iii) any sales tax subject to any sharing, rebate, offset or other charge imposed pursuant to any applicable Law; (iv) any sales tax (or other funds measured as sales tax) required by the State of California to be paid over to another public entity (including the State) or set aside and/or pledged to a specific use other than for deposit into City’s general fund; (v) the district sales tax imposed by the City of Marina currently set at 1.5%; (vi) any other sales tax that is imposed within the boundaries of City and which is intended to fund a specific activity or project, rather than to be used by City as general fund revenues, or which has specific voter approved limitations on its uses. No Sales Taxes shall be considered to have been received by City until City is able to confirm the amount of City’s actual receipt thereof from the State Board of Equalization. (q) “Term” is defined in Section 2.2.

ARTICLE 2.

EFFECTIVE DATE AND TERM
Section 2.1 Effective Date. This Agreement shall take effect the date this Agreement is signed by both Parties (the “Effective Date”).

ARTICLE 3.

Section 3.3 Development Costs. The City payments provided herein are being provided because the costs of the Development exceed the amounts that the Developer can 5 661\05\3982867.5
reasonably expect to recover from the operation of the Development. In order to verify the costs of the Development, the Developer shall provide the City within thirty (30) days of completion of construction of the Development a cost certification showing all costs associated with construction of the Development, including, but not limited to land costs, design costs, hard construction costs, permit and impact fees and all other costs. Upon receipt of the Developer’s cost certification, the City may request additional information and supporting documentation including but not limited to construction contracts, contractor payment applications, invoices and other evidence of payments. Submission of a cost certification along with such evidence as the City may require to verify costs documenting that at least Forty Million Dollars ($40,000,000) was spent on the Development is a Condition Precedent to the City payments set forth in Section

Section 3.5 City Business License. Developer shall maintain a City Business License at all times that the Development is open for business.

Section 3.6 City Payments.
(a) Subject to satisfaction of all Conditions Precedent, commencing on the date that is ninety (90) days following the end of the first full Fiscal Year Quarter after the Development Opening occurs and ninety (90) days following the end of each Fiscal Year Quarter thereafter throughout the Term, the City shall pay to Developer the Developer Sales Tax Share of the Sales Tax based on the Sales Tax actually received by the City during the immediately previous Fiscal Year Quarter, along with a certification by the City’s Finance Director specifying the total amount of Sales Tax received from the operation of the Development during the previous Fiscal Year Quarter (“City Payment(s)”). Nothing contained in this Agreement shall obligate or otherwise commit the City to pay any amount to Developer unless and until the City receives the Sales Taxes attributable to sales, services or business activities of Developer at the Development.
(b) Developer shall, at the request of the City, provide the City with its Sales Tax reporting forms submitted to the State Board of Equalization to verify the Sales Tax reported to the Board of Equalization. Developer shall designate the Property as the point of sale for sales tax purposes for all goods and services sold or leased on the Property, whose sales or leases originate from the Property.
(c) Following receipt of the City’s certification of the Sales Tax for the prior Fiscal Year Quarter, Developer shall review the amount of Sales Tax determined by the City’s Finance Director and shall either approve or disapprove the amount within thirty (30) days of 6 661\05\3982867.5
receipt. Failure to notify the City of Developer’s disapproval within thirty (30) days of receipt shall be deemed Developer’s approval of the City Finance Director’s calculations. Any disapproval shall state in writing the reasons for disapproval and the requested changes and shall provide any additional information or documentation available to Developer to support Developer’s determination of the Sales Tax. The City, upon receipt of a disapproval by Developer and the additional information, shall review all information provided by Developer and either re-determine the Sales Tax for the previous Fiscal Year Quarter or provide Developer with a statement of disagreement with regards to the Sales Tax received by the City. In the event the City and Developer cannot agree on any item of the certification, the City and Developer shall submit the item mediation pursuant to Section 4.5 below.

ARTICLE 4.

DEFAULT AND REMEDIES
Section 4.1 Application of Remedies. The provisions of this Article shall govern the Parties' remedies for breach of this Agreement.
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Section 4.2 Fault of City.
(a) Event of Default. Following notice and opportunity to cure as set forth in subsection (b) below, each of the following events constitutes a "City Event of Default" and a basis for Developer to take action against the City:
(i) The City fails to make any payment to Developer when required under this Agreement.
(ii) The City breaches any other material provision of this Agreement. (b) Notice and Cure Procedure. Upon the occurrence of any of the above- described events, Developer shall first notify the City in writing of its purported breach or failure, giving the City thirty (30) days from receipt of such notice to cure such breach or failure.

Section 4.3 Fault of Developer.
(a) Event of Default. Following notice and opportunity to cure as set forth in subsection (b) below, each of the following events constitutes a "Developer Event of Default" and a basis for the City to take action against Developer:
(i) Developer fails to construct the Development or fails to Open the Development.
(ii) Developer fails to maintain a valid City Business License or fails to comply with any other material City laws or regulations. (iii) Developer: (1) files for bankruptcy, dissolution, or reorganization, or fails to obtain a full dismissal of any such involuntary filing brought by another party before the earlier of final relief or ninety (90) days after the filing; (2) makes a general assignment for the benefit of creditors; (3) applies for the appointment of a receiver, trustee, custodian, or liquidator, or fails to obtain a full dismissal of any such involuntary application brought by another party before the earlier of final relief or ninety (90) days after the filing; (4) becomes insolvent; or (5) fails, is unable or admits in writing to its inability to pay its debts as they become due.
(iv) Developer breaches any other material provision of this Agreement.
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(b) Notice and Cure Procedure. Upon the happening of any of the above- described events the City shall first notify Developer in writing of its purported breach or failure, giving Developer thirty (30) days from receipt of such notice to cure such breach or failure. If Developer does not cure the default within such thirty (30)-day period (or if the default is not reasonably susceptible of being cured within such thirty (30)-day period, Developer fails to commence the cure within such period and thereafter to prosecute the cure diligently to completion), then the City shall be entitled to pursue any or both of the following remedies: (1) terminating this Agreement by written notice to Developer; (2) exercising its remedies pursuant to Section 4.4. If the City elects to terminate this Agreement, the provisions of this Agreement that are specified to survive such termination shall remain in full force and effect.

At the mediation meeting, the mediator shall attempt to bring the Parties together to close the gap 9 661\05\3982867.5
between their respective positions, in an effort to settle the dispute or claim, without deciding the matter for the Parties.

ARTICLE 5.

GENERAL PROVISIONS.

Section 5.1 General Indemnity. Developer shall indemnify, defend (with counsel approved by the City) and hold harmless the City, Councilmembers, officials, employees, agents, consultants, and contractors (collectively, the “Indemnitees”) from and against any and all liabilities, losses, costs, expenses (including without limitation attorneys’ fees and costs of litigation), claims, demands, actions, suits, causes of action, writs, judicial or administrative proceedings, penalties, deficiencies, fines, orders, judgments and damages (all of the foregoing collectively “Claims”) which in any manner, directly or indirectly, in whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused by, arise in connection with this Agreement, including the negligent or wrongful performance of this Agreement by Developer or any contractor or subcontractor of Developer. This indemnity includes the fees and costs reasonably incurred by the City by its own in-house or special counsel retained to protect the City's interests. Each Party is entitled to legal counsel of its choice, at Developer's expense. The Parties and their respective counsel shall cooperate with each other in the defense of any such actions, including in any settlement negotiations. If a court in any such action awards any form of money damages to such third party, or any attorneys' fees and costs to such third party, Developer shall bear full and complete responsibility to comply with the requirements of such award, and hereby agrees to timely pay all fees and costs on behalf of City.

This indemnity obligation shall not extend to any claim to the extent arising solely from the City's gross negligence or the City's failure to perform its obligations under this Agreement, and shall survive termination of this Agreement.

City of Marina
211 Hillcrest Avenue
Marina, CA 93933
Attn: City Manager
With copies to:

City of Marina
211 Hillcrest Avenue
Marina, CA 93933
Attn: City Attorney

Developer Notice Address:

Unstoppable Automotive MBMCA LLC
40910 Temecula Center Dr
Temecula, CA 92591
Attn; Garth Blumenthal
Email: [email protected]

With a copy to:

Tribune Law Firm, LLP
601 University Ave, Suite 288
Sacramento, CA 95825
Attn: Sylvia Arostegui
Email: [email protected]

Section 5.5 No Joint Venture. It is expressly agreed that City is not, in any way or for any purpose, a partner of Developer or any of Developer’s partners, officers, members, directors, shareholders, principals, agents, employees, contractors or subcontractors, or its or their 11 661\05\3982867.5
successors or assigns (each, a “Developer Party”) in the conduct of its or their business or a member of a joint enterprise with Developer or any Developer Party. Neither City nor Developer shall be deemed or construed for any purpose to be the agent of the other, and City does not assume any responsibility for Developer or any Developer Party’s conduct or performance of this Agreement.

Section 5.12 Conflicts of Interest. No member, official or employee of City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested.
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Section 5.13 Applicable Law. The laws of the State of California, without regard to conflict of laws principles, shall govern the interpretation and enforcement of this Agreement.

Section 5.14 No Third-party Beneficiaries. There are no third-party beneficiaries to this Agreement.

Section 5.16 Time of Essence. Time is of the essence with respect to all obligations of Developer under this Agreement.

[SIGNATURES ON THE FOLLOWING PAGE.]

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date.

CITY OF MARINA, a municipal corporation

By:

Layne Long, City Manager

UNSTOPPABLE AUTOMOTIVE MBMCA LLC,
a California limited liability company
By:

Garth Blumenthal, Manager

2/7/2018
661\05\3982867.5

EXHIBIT A

PROPERTY DESCRIPTION

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EXHIBIT B

CONCEPT DESIGN

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EXHIBIT C

ECONOMIC IMPACT ANALYSIS
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CITY OF MARINA

ECONOMIC DEVELOPMENT SUBSIDY REPORT PURSUANT TO GOVERNMENT CODE SECTION 53803 (AB 562 REPORT)
MA

RINA CITY COUNCIL PUBLIC HEARING
MAY 20, 2025
Legisl
ative Intent
Wi
th the adoption of Assembly Bill 562 in 2013, now codified as California Government Code Section 53083, the California Legislature recognized the authority of local officials to use their regulatory powers, direct spending, and tax policies to influence where, when, and how the private sector invests capital and improves real property. The Legislature also intended to promote transparency and accountability in economic development subsidies, similar to annual financial reporting and local fiscal decisions. The legislation requires that subsidies to local businesses in the amount of $100,000 or more – those intended to increase employment, enhance the local tax base, and attract or retain desirable businesses – be detailed in a written report and placed on an agenda for a public hearing at a regularly scheduled meeting. The City of Marina has determined that the development of the proposed Mercedes-Benz automobile dealership in Marina will provide substantial fiscal and economic benefits to Marina and the broader region, including sales tax revenues and new jobs. It will enhance the City’s position as a regional retail and commercial destination and will serve as a catalyst for additional new development. Because of these benefits and the consideration that the cost of developing the new dealership consistent with the manufacturer’s standards will exceed the amount that the dealership’s owner can reasonably be expected to recover from the operation of the dealership, the City intends to provide a financial subsidy to the owner of the dealership. The terms of the tax sharing agreement are detailed in the proposed “Sales Tax Revenue Sharing Agreement” between the City of Marina (“City”) and the owner of the dealership (Developer). This report is intended to satisfy the requirements of Government Code 53083, and is being made available to the public prior to consideration of the proposed Agreement and authorization of the economic development subsidy.

Legal Requi
rements
In ac
cordance with Government Code Section 53083, the following elements must be addressed in written form, and be made available to the public (including posting on the City’s website) prior to the approval of the proposed economic development subsidy:
1) The name and address of all corporations or any other business entities, except for sole proprietorships, that are the beneficiary of the economic development subsidy, if applicable.

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2) The start and end dates and schedule, if applicable, for the economic development subsidy.
3) A description of the economic development subsidy, including the estimated total amount of the expenditure of public funds by, or of revenue lost to, the local agency as a result of the economic development subsidy.
4) A statement of the public purposes for the economic development subsidy. 5) Projected tax revenue to the local agency as a result of the economic development subsidy.
6) Estimated number of jobs created by the economic development subsidy, broken down by full-time, part-time, and temporary positions.

Proposed
Agreement
The City
of Marina, in an effort to generate additional sales tax revenue, create additional local jobs, and enhance economic vitality, proposes to provide the type of subsidy included in Government Code Section 53083. The City and Developer intend to enter into a Sales Tax Revenue Sharing Agreement (Agreement). Under the terms of the Agreement, the Developer will purchase a development site within the Dunes project at the former Fort on which it will develop an approximate 60,000 square foot Dealership in accordance with all design and quality requirements stipulated by Mercedes Benz USA. Under the terms of the Agreement, the payment of the subsidy to the Developer is conditioned on:

1. The Developer will privately fund all development costs including City building permit and development
impact fees and provide documentation demonstrating that expended development
costs exceed $40 million; and

2. The Developer shall commence construction of the Dealership by no later than January 1, 2026, and subject to Force Majeure, complete construction no later than fifteen (15) months after commencement.

The City will provide Subsidy Payments ”1 to the Developer equal to 50% of the actual amount of annual sales tax revenues tha t the City receives from the application of the 1% Bradley-Burns Uniform Local Sales Tax Rate (“1% Sale Tax”) to the actual annual amount of taxable sales that the Dealership generates until the earlier of: a) the date that the cumulative total of Subsidy Payments to the Developer equals $5 million; or b) the Agreement terminates due to non- performance terms provided in the Agreement.
1 Subsidy Payments will be made on a quarterly basis.

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Financial Feasibility Analysis and Project’s Need for a Subsidy Whi
le not required by California Government Code Section 53083, the amount of the City subsidy has been determined based on an analysis of the development economics of the Marina Dealership, including the cost to develop the new 59,000 square foot facility, annual debt service costs, projected sales volume of the Dealership, and the automobile industry standard relationship between debt service costs and dealership sales volume for luxury dealerships. The cost to develop the Dealership is anticipated to exceed $40 million, which is unusually high due to the impact fees and prevailing wage requirements that apply to all development at the former Fort Ord and the high design standards required by Mercedes-Benz of USA. Without the subsidy from the City, the cost of developing the Dealership exceeds the amount that the Developer can reasonably expect to recover from the operation of the Dealership. The tax sharing subsidy has been sized to effectively reduce debt service costs, so that the Dealership’s debt service costs as a percent of revenues is more aligned with the industry standard for automobile dealerships in the United States.

1. The name
and address of all corporations or any other business entities, except for sole proprietorships, that are the beneficiary of the economic development subsidy.

The Agr
eement is with Unstoppable Automotive MBMCA LLC, which is the sole beneficiary of the economic development subsidy.

Unstoppable Automotive MBMCA LLC
40910 Temecula Center Drive
Temecula, CA 92591

2. The star
t and end dates and schedule, if applicable, for the economic development subsidy.

Quar
terly Subsidy Payments from the City to the Developer will commence ninety days from the date that the City receives its first quarterly sales tax payment from the State of California of sales tax generated by the Dealership. Quarterly Subsidy Payments will end on the date that cumulative Quarterly Subsidy payments made to the Developer equals $5 million.

3. A descr
iption of the economic development subsidy, including the estimated total amount of the expenditure of public funds by, or of revenue lost to, the local agency as a result of the economic development subsidy.

The econom
ic development subsidy shall be in the form of the City sharing 50% of the amount of sales tax revenue that the City actually receives from the application of the 1% Tax Rate to the actual amount of taxable sales generated by the Dealership until the cumulative total of Subsidy Payments to the Developer equals $5 million. It is estimated that the cumulative total

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of Subsidy Payments paid to the Developer will equal $5 million during the Dealership’s 7th operating year.

Projected Subsidy/Sales Tax Revenue
Sharing Payments from City to Developer,
with Cumulative Total to Not Exceed
$5,000,000 (rounded to nearest $1,000)
1st 12-month Operating Year $468,000
2nd Operating Year $562,000
3rd Operating Year $674,000
4th Operating Year $809,000
5th Operating Year $970,000
6th Operating Year $1,116,000
7th Operating Year $401,000
Cumulative 7-Yr. Total $5,000,000

4. A sta
tement of the public purposes for the economic development subsidy.

The propos
ed Agreement is consistent with City’s economic development goals and objectives. Specifically, the following public purposes are achieved:
 The City has determined that the Dealership is an important catalyst for the continued development of the Dunes Project and that the Dealership will provide substantial direct and indirect benefits to the City and economic opportunities, including sales tax revenues, increased property tax revenues, and increased jobs in the region. It will enhance the City’s position as a regional retail and commercial destination and serve as a catalyst for additional retail and commercial development. • The tax
revenues to be generated by the Dealership to the City will be used to fund City services, from public safety to operating recreational facilities and programs.  The Dealership will diversify the City of Marina’s economic base by being the City’s first automobile dealership to sell new vehicles. The Dealership will sell and provide service for Mercedes-Benz ICE passenger cars, EQ electric vehicles, Sprinter ICE commercial vans, and E-Sprinter electric commercial vans. The dealership will also be one of only fifty Mercedes-Benz dealerships in the Country that will receive an allocation of Mercedes-Benz AMG model vehicles. By being the first luxury automotive franchise in Marina, it also has the potential to attract other luxury franchises and new businesses to Marina.
 The Dealership will attract customers from a large geographic area, extending from Santa Cruz to the North, Fresno to the East, and Carmel to the South. The

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customers will be introduced to Marina’s world-class recreational areas as well as shopping and dining opportunities and new residential offerings at the Dunes.

5. The pr
ojected tax revenue to the local agency as a result of the economic development subsidy.

The dealer
ship will generate significant annual tax revenue to the City of Marina. As shown in the following chart, total taxable revenues to be directly generated by the Dealership are anticipated to total $882,000 during the first operating year and increase to $3.20 million by the seventh operating year. Cumulate tax revenues generated during the Dealership’s first seven operating years to the City of Marina net of the subsidy payments to the Developer are estimated to approximate $11.64 million.

Pr
ojected Tax Revenues to be Generated by Mercedes-Benz Dealership to the City of Marina 12-Month
Operating
Year of
Dealership
1% Base Sales Tax
Levy (Apply to
Total Taxable
Sales), Net of 50%
share to Developer
Measure N

1.5% Tax
(Apply to
Parts Sales)
Gross Receipts
Tax (.2% of
Gross
Receipts)
VLF Property
Tax Revenue
Total New Annual
Direct City
Tax Revenues
1st Year $468,000 $145,000 $203,000 $66,000 $882,000
2nd Year $562,000 $174,000 $244,000 $67,000 $1,047,000
3rd Year $674,000 $209,000 $293,000 $69,000 $1,245,000
4th Year $809,000 $251,000 $352,000 $70,000 $1,482,000
5th Year $970,000 $301,000 $422,000 $71,000 $1,764,000
6th Year $1,116,000 $346,000 $485,000 $73,000 $2,020,000 7th Year $2,165,000 $398,000 $558,000 74,000 $3,195,000 Cumulative
7-Year
Total $6,764,000 $ 1,824,000 $2,557,000 $490,000 $11,635,000 Mar
ina’s 1.5% Measure N Tax will also apply to the sale of automobiles. However, this tax revenue is received by the buyer’s jurisdiction of residence. Given that Marina represents a relatively small fraction of the population within the Dealership’s trade area, for purposes of this analysis, Measure N revenues from the sale of automobiles have not been included in the calculation of projection tax revenues to Marina.

The Dealership’s sales are also anticipated to increase the City’s share of the County-wide pool of sales/use tax revenue generated by on-line sales. It is estimated that Marina could annually receive an additional $100,000 to over $400,000 of revenue from the Count-pool of sales/use tax. The actual amount to be generated will be driven by several factors, including the size of the County-wide pool of tax revenue and the relative amount of taxable sales generated by each jurisdiction within the County.

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6. The estimated number of jobs created by the economic development subsidy, broken down by full-time, part-time, and temporary positions.

The Deal
ership anticipates employing 80 full-time employees during the first operating year and increasing employment annually as sales grow; the Dealership expects to employ over 150 full- time employees by its fifth operating year due to the projected increase in sales volumes.

EXHIBIT C
May 15, 2025 Item No: 13a

Honorable Mayor and Members City Council Meeting
of the Marina City Council of May 20, 2025

CITY COUNCIL CONSIDER ADOPTING RESOLUTION NO. 202 5-,

APPROVING A SALES TAX REVENUE SHARING AGREEMENT

BETWEEN CITY OF MARINA AND UNSTOPPABLE AUTOMOTIVE

MBMCA LLC TO ASSIST WITH THE CONSTRUCTION COSTS AND
SITE DEVELOPMENT OF AN AUTOMOBILE DEALERSHIP, AND;

AUTHORIZING THE CITY MANAGER TO EXECUTE THE

AGREEMENT, SUBJECT TO FINAL REVIEW BY THE CITY
ATTORNEY.

REQUEST:

It is requested that the City Council consider:

1. Adopting Resolution No. 2025-, approving a sales tax revenue sharing agreement between the City of Marina and Unstoppable Automotive MBMCA LLC to assist in covering high site development and construction costs associated with developing a Mercedes -Benz automobile dealership in Marina, and;

2. Authorize the City Manager to execute the agreement subject to final review by the City Attorney, and:

3. Authorize the Finance Director to make the necessary budgetary and accounting entries.

BACKGROUND:

The City of Marina has actively sought to attract high -value commercial businesses that can stimulate economic development, create jobs, expand the tax base, and generate sustainable revenue for the City. This dealership provides a new revenue stream to help meet the public safety, service needs, infrastructure, and maintenance demands of Marina. In alignment with the City’s Mission and Vision Statement and the City Council’s goals and objectives, staff have been in discussions with the Unstoppable Automoti ve group who are interested in constructing a Mercedes-Benz dealership on a parcel within the Dunes development area.

The Dunes development is a mixed-use development that includes retail, commercial, office, hotel, residential and affordable housing uses. A Specific Plan adopted for the Dunes development guides the development and land use of this development.

The Unstoppable Automotive LLC is proposing to acquire land from the Dunes development (Marina Community Partners ) to develop a new Mercedes -Benz automobile dealership . The proposed dealership represents a significant capital investment estimated at over $40 million dollars that includes land acquisition, site development and construction of dealership facilities with a new showroom and service center . This dealership will generate substantial new sales tax revenue for the City and is expected to create ove r 80 full -time equivalent jobs, initially, and expanding to over 140 full-time equivalent jobs over five years. (“EXHIBIT A”)

The dealership has requested a sales tax revenue sharing agreement to support the significant upfront capital investment costs that will enhance their long-term competitiveness in the regional automotive market area.
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The dealership will serve as an important catalyst for the continued economic growth and development needs of the City. The project will provide substantial direct and indirect benefits to the City and economic opportunities, including sales tax revenues, increased property tax revenues, and increased jobs in the region . It will enhance the City’s position as a regional retail and commercial destination and serve as a catalyst for additional retail and commercial development opportunities.

In general, the City typically does not provide economic incentive agreements to businesses.

However, the former Fort Ord property area has some unique challenges due to constraints placed on the property when it was transferred from the Army to the Fort O rd Reuse Authority and then to the City of Marina. Some of the unique constraints of these properties include requirements for all first-generation construction to pay a prevailing wage for all new construction which in many cases can double the constructi ons costs verses other cities in the area or state. There are also blighted military housing units that have lead and asbestos which add a significant cost to remove; decaying water and sewer infrastructure to replace; various endangered species that must be mitigated; and housing and water allotment caps.

Other major developments in the former Fort Ord properties in Marina have needed an economic incentive to be able to move forward. Examples include the current Dunes development, Marina Heights development (now Sea Haven), Cinemark theatre, Marriott Spring hill Suite, and most recently the 225,000 square foot manufacturing building constructed by Joby Aviation at the Marina Municipal Airport.

ANALYSIS:

Mercedes-Benz, as a premier luxury auto brand, is anticipated to bring notable economic and brand value to the City of Marina . The dealership is projected to generate substantial annual sales revenue, which in turn would increase the City’s share of local sales tax and the City’s share of the Monterey County pooled sales tax.

To help offset the upfront capital burden of the development, the dealership has requested a temporary sales tax revenue sharing agreement. The proposed agreement includes the following terms: (“EXHIBIT B”)

• The City will rebate fifty percent (50%) of the City’s portion of the one percent (1%) local share of sales tax revenue generated by the dealership for a period of up to five (5) years • Commence construction no later than January 1, 2026, and complete construction no later than fifteen (15) months after commencement.
• A high building design standard
• Annual report that includes annual gross sales, total number of employees, total full -time employees, breakdown of job types and number of employees that are Marina residents.

The firm Keyser Marston Associates was hired to evaluate the fiscal and economic benefits associated with the Mercedes-Benz automobile dealership. Included with their evaluation is a tax revenue analysis, an economic impact analysis, along with an assessment of the justification of the sales tax revenue sharing agreement. (“EXHIBIT C”
The new facility will be over 60.000 square feet, consisting of a showroom, service area, and detail bay. Sales will include new vehicles, used vehicles, parts and service sales.

The sales tax generated by the dealership goes to the City’s General Fund for city -wide benefit and use and is not limited to the former Fort Ord area.

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A premium brand like Mercedes-Benz will likely generate high sales volumes, particularly since this will be the only dealership in Santa Cruz County, San Benito County, South Santa Clara County and Monterey County. Significant short -term economic activity will occur from site development and construction of the dealership facility. When completed it is expected to attract regional shoppers. Visitors to the dealership may spend additional money at nearby restaurants, gas stations, and hotels.

Estimated Fiscal Impact
Year 2027 Year 2031
Annual Taxable Sales $93, 593,200 $194,074,694
Sales Tax Revenue (1%) $935,932 $1,940,747
50% Rebate to Dealership $467,966 $970,373
Annual Net to City $467,966 $970,373

Over five years, the cumulative total net sales revenue to City is approximately $3,482,411. In addition to sales tax revenue, the City will receive Measure N (1.5%) tax on parts, business license gross tax receipts, vehicle in lieu property tax revenues. The cumulative total new direct tax revenue the City will receive over the five -year rebate will be $6,420,000. After year five, 100% of the sales tax revenue will come to the City.

FISCAL IMPACT:

First year direct new tax revenue to the City will be $882,000. Cumulative over five years, the new direct tax annual revenue will be $6,420,000. The revenue will go to the General Fund.

Additionally, the City’s portion of the Monterey County pooled sales tax is expected to increase annually by an estimated additional $150,000.

CONCLUSION
This request is submitted for City Council consideration and direction.

Respectfully submitted,

____________________________
Layne Long
City Manager
City of Marina
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RESOLUTION NO. 2025-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MARINA

APPROVING A SALES TAX REVENUE SHARING AGREEMENT

BETWEEN THE CITY OF MARINA AND UNSTOPPABLE AUTOMOTIVE

MBMCA LLC TO ASSIST WITH THE CONSTRUCTION COSTS AND SITE DEVELOPMENT OF AN AUTOMOBILE DEALERSHIP, AND;

AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT,

SUBJECT TO FINAL REVIEW BY THE CITY ATTORNEY

WHEREAS, the City desires to encourage private investment and economic development within the City’s commercial areas;

WHEREAS, the Unstoppable Automotive MBMCA LLC proposes to construct and operate a new Mercedes-Benz automotive dealership located in the Dunes development within the City of Marina;

WHEREAS the project involves a capital investment estimated at over $40 million dollars, which includes land purchase, site development, construction of facilities and equipment; and

WHEREAS, the dealership is anticipated to generate substantial local sales tax revenue and other direct tax revenue for the City and create quality jobs; and

WHEREAS, in consideration of the developer’s significant capital investment and contribution to the City’s economic base, the City agrees to rebate 50% of its local (1%) sales tax revenue for five years to support the financial feasibility of the project.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Marina does hereby:

1. Approve the sales tax revenue sharing agreement between the City of Marina and Unstoppable Automotive MBMCA LLC to assist in covering high site development and construction costs associated with developing a Mercedes-Benz automobile dealership in Marina, and;

2. Authorize the City Manager to execute the agreement subject to final review by the City Attorney, and:

3. Authorize the Finance Director to make the necessary budgetary and accounting entries.

PASSED AND ADOPTED by the City Council of the City of Marina at a regular meeting duly held on May 20, 2025 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

_________________________
ATTEST: Bruce C. Delgado, Mayor

_______________________________
Anita Sharp, Deputy City Clerk
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PERFORMANCE BASED SALES TAX REVENUE SHARING AGREEMENT
This Performance Sales Tax Revenue Sharing Agreement (this “Agreement”) is entered into this ___ day of __________, 2025 by and between the City of Marina, a California municipal corporation (the “City”), and Unstoppable Automotive MBMCA LLC, a California limited liability company (“Developer”). The City and Developer are collectively referred to herein as the “Parties” and individually as a Party.

EXHIBIT B
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required by the car manufacturer to develop the Development consistent with the manufacturer’s standards resulting in development costs that exceed the amount Developer can reasonably be expected to recover from operation of the Development.

ARTICLE 1.

EXHIBIT B
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(c) “Conditions Precedent” means all of the following: (i) the Developer has completed the Development within the time set forth in Section 3.2 below; (ii) the Developer has submitted a cost certification pursuant to Section 3.3 below to the City of the costs of construction of the Development that shows costs exceeding Forty Million Dollars ($40,000,000); and (iii) no Developer Event of Default shall have occurred. (d) “Developer” is defined in the preamble.
(e) “Developer Event of Default” is defined in Section 4.3. (f) “Developer Sales Tax Share” means fifty percent (50%) of the Sales Tax generated by the Development during the Term of this Agreement. (g) “Effective Date” is defined in Section 2.1.
(h) “Fiscal Year” means the fiscal year of City beginning on July 1 and ending on June 30 of each year.
(i) “Force Majeure Event” is defined in Section 3.8.
(j) “Indemnitees” means City and its councilmembers, officers, officials, employees, volunteers, representatives, attorneys, and consultants. (k) “Opening” means the date that the Development opens for business for sales and services to Developer’s customers during normal business hours. (l) “Party” means either the City or Developer.
(m) “Parties” means collectively the City and Developer. (n) “Sales Tax Law” means the Bradley-Burns Uniform Local Sales and Use Tax Law (California Revenue and Taxation Code section 7200, et seq.). If the Bradley-Burns Uniform Local Sales and Use Tax Law is further amended, terminated or rescinded, and Sales Taxes are calculated in an alternate manner or are replaced by an alternate revenue stream (i) arising from the retail sale, use or other consumption of tangible personal property from or on the Property, or (ii) designated as being a replacement for Sales Taxes previously generated by the retail sale, use or other consumption of tangible personal property on or from the Property, then “Sales Taxes” shall also mean those revenues attributable to sales, services or consumption of tangible personal property on or from the Property, collected for City in the alternate manner of calculation, so long as City receives its portion of such revenues and has the legal right under California and/or federal Law to retain and control the disposition of all of its portion thereof. (o) “Sales Taxes” means for each Fiscal Year during the Term, that portion of taxes actually received by City from the imposition of Sales Tax Law attributable to the sales, services or business activities of Developer at the Development to the extent allocated and paid by the State Board of Equalization to City for its use, in a particular Fiscal Year. The defined term “Sales Taxes” shall not include any of the following: (i) any sales tax levied by, collected

EXHIBIT B
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for or allocated to the State of California, the County, or any district or entity (including an allocation to a statewide or Countywide pool) other than City; (ii) any administrative fee charged by the State Board of Equalization or the County; (iii) any sales tax subject to any sharing, rebate, offset or other charge imposed pursuant to any applicable Law; (iv) any sales tax (or other funds measured as sales tax) required by the State of California to be paid over to another public entity (including the State) or set aside and/or pledged to a specific use other than for deposit into City’s general fund; (v) the district sales tax imposed by the City of Marina currently set at 1.5%; (vi) any other sales tax that is imposed within the boundaries of City and which is intended to fund a specific activity or project, rather than to be used by City as general fund revenues, or which has specific voter approved limitations on its uses. No Sales Taxes shall be considered to have been received by City until City is able to confirm the amount of City’s actual receipt thereof from the State Board of Equalization.
(p) “Term” is defined in Section 2.2.

ARTICLE 2.

EFFECTIVE DATE AND TERM
Section 2.1 Effective Date. This Agreement shall take effect the date this Agreement is signed by both Parties (the “Effective Date”).

Section 2.2 Term. The term of this Agreement begins on the Effective Date and ends on the October 1st immediately following the fifth (5th) anniversary of the Opening of the Development, subject to a year-for-year tolling in the event of a Force Majeure Event, unless terminated pursuant to the express provisions of this Agreement (the “Term”).

ARTICLE 3.

Section 3.3 Development Costs. The City payments provided herein are being provided because the costs of the Development exceed the amounts that the Developer can reasonably expect to recover from the operation of the Development. In order to verify the costs of the Development, the Developer shall provide the City within thirty (30) days of completion of construction of the Development a cost certification showing all costs associated with construction of the Development, including, but not limited to land costs, design costs, hard

EXHIBIT B
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construction costs, permit and impact fees and all other costs. Upon receipt of the Developer’s cost certification, the City may request additional information and supporting documentation including but not limited to construction contracts, contractor payment applications, invoices and other evidence of payments. Submission of a cost certification along with such evidence as the City may require to verify costs documenting that at least Forty Million Dollars ($40,000,000) was spent on the Development is a Condition Precedent to the City payments set forth in Section

Section 3.5 City Business License. Developer shall maintain a City Business License at all times that the Development is open for business.

Section 3.6 City Payments.
(a) Subject to satisfaction of all Conditions Precedent, commencing on the first October 1st following the end of the first Fiscal Year in which the Development Opening occurs and on each October 1st thereafter continuing throughout the Term, the City shall pay to Developer the Developer Sales Tax Share of the Sales Tax based on the Sales Tax received during the immediately previous Fiscal Year, along with a certification by the City’s Finance Director specifying the total amount of Sales Tax received from the operation of the Development during the previous Fiscal Year (“City Payment(s)”). Nothing contained in this Agreement shall obligate or otherwise commit the City to pay any amount to Developer unless and until the City receives the Sales Taxes attributable to sales, services or business activities of Developer at the Development.
(b) Developer shall, at the request of the City, provide the City with its Sales Tax reporting forms submitted to the State Board of Equalization to verify the Sales Tax reported to the Board of Equalization.
(c) Following receipt of the City’s certification of the Sales Tax for the prior Fiscal Year, Developer shall review the amount of Sales Tax determined by the City’s Finance Director and shall either approve or disapprove the amount within thirty (30) days of receipt.

Failure to notify the City of Developer’s disapproval within thirty (30) days of receipt shall be deemed Developer’s approval of the City Finance Director’s calculations. Any disapproval shall state in writing the reasons for disapproval and the requested changes and shall provide any additional information or documentation available to Developer to support Developer’s determination of the Sales Tax. The City, upon receipt of a disapproval by Developer and the additional information, shall review all information provided by Developer and either re- determine the Sales Tax for the previous Fiscal Year or provide Developer with a statement of

EXHIBIT B
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disagreement with regards to the Sales Tax received by the City. In the event the City and Developer cannot agree on any item of the certification, the City and Developer shall submit the item mediation pursuant to Section 4.5 below.

ARTICLE 4.

DEFAULT AND REMEDIES
Section 4.1 Application of Remedies. The provisions of this Article shall govern the Parties' remedies for breach of this Agreement.

Section 4.2 Fault of City.
(a) Event of Default. Following notice and opportunity to cure as set forth in subsection (b) below, each of the following events constitutes a "City Event of Default" and a basis for Developer to take action against the City:

EXHIBIT B
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(i) The City fails to make any payment to Developer when required under this Agreement.
(ii) The City breaches any other material provision of this Agreement. (b) Notice and Cure Procedure. Upon the occurrence of any of the above- described events, Developer shall first notify the City in writing of its purported breach or failure, giving the City thirty (30) days from receipt of such notice to cure such breach or failure.

Section 4.3 Fault of Developer.
(a) Event of Default. Following notice and opportunity to cure as set forth in subsection (b) below, each of the following events constitutes a "Developer Event of Default" and a basis for the City to take action against Developer:
(i) Developer fails to construct the Development or fails to Open the Development.
(ii) Developer fails to maintain a valid City Business License or fails to comply with any other material City laws or regulations. (iii) Developer: (1) files for bankruptcy, dissolution, or reorganization, or fails to obtain a full dismissal of any such involuntary filing brought by another party before the earlier of final relief or ninety (90) days after the filing; (2) makes a general assignment for the benefit of creditors; (3) applies for the appointment of a receiver, trustee, custodian, or liquidator, or fails to obtain a full dismissal of any such involuntary application brought by another party before the earlier of final relief or ninety (90) days after the filing; (4) becomes insolvent; or (5) fails, is unable or admits in writing to its inability to pay its debts as they become due.
(iv) Developer breaches any other material provision of this Agreement.
(b) Notice and Cure Procedure. Upon the happening of any of the above- described events the City shall first notify Developer in writing of its purported breach or failure, giving Developer thirty (30) days from receipt of such notice to cure such breach or failure. If Developer does not cure the default within such thirty (30)-day period (or if the default is not reasonably susceptible of being cured within such thirty (30)-day period, Developer fails to commence the cure within such period and thereafter to prosecute the cure diligently to completion), then the City shall be entitled to pursue any or both of the following remedies: (1)

EXHIBIT B
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terminating this Agreement by written notice to Developer; (2) exercising its remedies pursuant to Section 4.4. If the City elects to terminate this Agreement, the provisions of this Agreement that are specified to survive such termination shall remain in full force and effect.

Section 4.4 Remedies.
(a) Either Party may, in addition to any other rights or remedies that it may have available in law or equity (excluding punitive damages and consequential damages), institute legal action to cure, correct, or remedy any default by the other Party to this Agreement, to enforce any covenant or agreement herein, or to enjoin any threatened or attempted violation hereunder or to seek specific performance. For purposes of instituting a legal action under this Agreement, any City Council determination under this Agreement as it relates to an alleged default hereunder shall be deemed a final agency action. Developer acknowledges that it may not collect for future years based on a current or prior default, and that the City’s obligation to pay with respect to any Fiscal Year is contingent upon receipt of Sales Taxes for that Fiscal Year and dependent upon the amount of those Sales Taxes and fees for determination of the amount to be paid.
(b) The Parties hereby acknowledge and agree that it is a material part of Developer’s consideration to City that Developer, on the one hand, and the City, on the other hand, for themselves, their successors and assignees, hereby release one another's officers, trustees, directors, agents and employees from any and all claims, demands, actions, or suits of any kind or nature arising out of any liability, known or unknown, present or future, including, but not limited to, any claim or liability, based or asserted, pursuant to Article I, Section 19 of the California Constitution, the Fifth and Fourteenth Amendments of the United States Constitution, or any other law or ordinance which seeks to impose any money damages, whatsoever because of the terms of this Agreement, or because of the manner of implementation or performance of this Agreement.

At the mediation meeting, the mediator shall attempt to bring the Parties together to close the gap between their respective positions, in an effort to settle the dispute or claim, without deciding the matter for the Parties.

ARTICLE 5.

GENERAL PROVISIONS.

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liabilities, losses, costs, expenses (including without limitation attorneys’ fees and costs of litigation), claims, demands, actions, suits, causes of action, writs, judicial or administrative proceedings, penalties, deficiencies, fines, orders, judgments and damages (all of the foregoing collectively “Claims”) which in any manner, directly or indirectly, in whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused by, arise in connection with, result from, or relate to this Agreement, including the negligent or wrongful performance of this Agreement by Developer or any contractor or subcontractor of Developer.

City Notice Address:

City of Marina
211 Hillcrest Avenue
Marina, CA 93933
Attn: City Manager
With copies to:

City of Marina

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211 Hillcrest Avenue
Marina, CA 93933
Attn: City Attorney

Developer Notice Address:

Unstoppable Automotive MBMCA LLC
40910 Temecula Center Dr
Temecula, CA 92591
Attn; Garth Blumenthal
Email: [email protected]

With a copy to:

Tribune Law Firm, LLP
601 University Ave, Suite 288
Sacramento, CA 95825
Attn: Sylvia Arostegui
Email: [email protected]

Section 5.5 No Joint Venture. It is expressly agreed that City is not, in any way or for any purpose, a partner of Developer or any of Developer’s partners, officers, members, directors, shareholders, principals, agents, employees, contractors or subcontractors, or its or their successors or assigns (each, a “Developer Party”) in the conduct of its or their business or a member of a joint enterprise with Developer or any Developer Party. Neither City nor Developer shall be deemed or construed for any purpose to be the agent of the other, and City does not assume any responsibility for Developer or any Developer Party’s conduct or performance of this Agreement.

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Section 5.6 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

Section 5.13 Applicable Law. The laws of the State of California, without regard to conflict of laws principles, shall govern the interpretation and enforcement of this Agreement.

Section 5.14 No Third-party Beneficiaries. There are no third-party beneficiaries to this Agreement.

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Section 5.15 Interpretation. The captions preceding the sections of this Agreement have been inserted for convenience of reference only and such captions shall in no way define or limit the scope or intent of any provision of this Agreement. This Agreement has been negotiated at arm’s length and between persons sophisticated and knowledgeable in the matters dealt with herein and shall be interpreted to achieve the intents and purposes of the Parties, without any presumption against the Party responsible for drafting any part of this Agreement.

Section 5.16 Time of Essence. Time is of the essence with respect to all obligations of Developer under this Agreement.

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[SIGNATURES ON THE FOLLOWING PAGE.]

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date.

CITY OF MARINA, a municipal corporation

By:

Layne Long, City Manager

UNSTOPPABLE AUTOMOTIVE MBMCA LLC,
a California limited liability company
By:

Garth Blumenthal, Manager

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EXHIBIT A

PROPERTY DESCRIPTION

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EXHIBIT B

CONCEPT DESIGN

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EXHIBIT C

ECONOMIC IMPACT ANALYSIS

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CITY OF MARINA

ECONOMIC DEVELOPMENT SUBSIDY REPORT PURSUANT TO GOVERNMENT CODE SECTION 53803 (AB 562 REPORT)
MARI

NA CITY COUNCIL PUBLIC HEARING
MAY 20, 2025
Legislat
ive Intent
With
the adoption of Assembly Bill 562 in 2013, now codified as California Government Code Section 53083, the California Legislature recognized the authority of local officials to use their regulatory powers, direct spending, and tax policies to influence where, when, and how the private sector invests capital and improves real property. The Legislature also intended to promote transparency and accountability in economic development subsidies, similar to annual financial reporting and local fiscal decisions. The legislation requires that subsidies to local businesses in the amount of $100,000 or more – those intended to increase employment, enhance the local tax base, and attract or retain desirable businesses – be detailed in a written report and placed on an agenda for a public hearing at a regularly scheduled meeting. The City of Marina has determined that the development of the proposed Mercedes-Benz automobile dealership in Marina will provide substantial fiscal and economic benefits to Marina and the broader region, including sales tax revenues and new jobs. It will enhance the City’s position as a regional retail and commercial destination and will serve as a catalyst for additional new development. Because of these benefits and the consideration that the cost of developing the new dealership consistent with the manufacturer’s standards will exceed the amount that the dealership’s owner can reasonably be expected to recover from the operation of the dealership, the City intends to provide a financial subsidy to the owner of the dealership. The terms of the tax sharing agreement are detailed in the proposed “Sales Tax Revenue Sharing Agreement” between the City of Marina (“City”) and the owner of the dealership (Developer). This report is intended to satisfy the requirements of Government Code 53083, and is being made available to the public prior to consideration of the proposed Agreement and authorization of the economic development subsidy.

Legal Requirem
ents
In acco
rdance with Government Code Section 53083, the following elements must be addressed in written form, and be made available to the public (including posting on the City’s website) prior to the approval of the proposed economic development subsidy:
1) The name and address of all corporations or any other business entities, except for sole proprietorships, that are the beneficiary of the economic development subsidy, if applicable.

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2) The start and end dates and schedule, if applicable, for the economic development subsidy.
3) A description of the economic development subsidy, including the estimated total amount of the expenditure of public funds by, or of revenue lost to, the local agency as a result of the economic development subsidy.
4) A statement of the public purposes for the economic development subsidy. 5) Projected tax revenue to the local agency as a result of the economic development subsidy.
6) Estimated number of jobs created by the economic development subsidy, broken down by full-time, part-time, and temporary positions.

Proposed Agreement

The City of Marina, in an effort to generate additional sales tax revenue, create additional local jobs, and enhance economic vitality, proposes to provide the type of subsidy included in Government Code Section 53083. The City and Developer intend to enter into a Sales Tax Revenue Sharing Agreement (Agreement). Under the terms of the Agreement, the Developer will purchase a development site within the Dunes project at the former Fort on which it will develop an approximate 60,000 square foot Dealership in accordance with all design and quality requirements stipulated by Mercedes Benz USA. Under the terms of the Agreement, the payment of the subsidy to the Developer is conditioned on

1. The Developer will privately fund all development costs including City building permit and development impact fees and provide documentation demonstrating that expended development costs exceed $40 million; and

2. The Developer shall commence construction of the Dealership by no later than January 1, 206, and subject to Force Majeure, complete construction no later than fifteen (15) months after commencement.

The City will provide an “Annual Subsidy” to the Developer equal to 50% of the actual amount of annual sales tax revenues that the City receives from the application of the 1% Bradley-Burns Uniform Local Sales Tax Rate (“1% Sale Tax”) to the actual annual amount of taxable sales that the Dealership generates until the earlier of: a) the last day of the Dealership’s fifth 12-month operating year; or 3) the Agreement terminates due to non-performance terms provided in the Agreement.

Financial Feasibility Analysis and Project’s Need for a Subsidy

While not required by California Government Code Section 53083, the amount of the City subsidy has been determined based on an analysis of the development economics of the

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Marina Dealership, including the cost to develop the new 59,000 square foot facility, annual debt service costs, projected sales volume of the Dealership, and the automobile industry standard relationship between debt service costs and dealership sales volume for luxury dealerships. The cost to develop the Dealership is anticipated to exceed $40 million, which is unusually high due to the impact fees and prevailing wage requirements for all development of the former Fort Ord and the high design standards required by Mercedes-Benz of USA. Without the subsidy from the City, the cost of developing the Dealership exceeds the amount that the Developer can reasonably expect to recover from the operation of the Dealership. The tax sharing subsidy has been sized to effectively reduce debt service costs, so that the Dealership’s debt service costs as a percent of revenues is more aligned with the industry standard for automobile dealerships in the United States.

1. The name and address of all corporations or any other business entities, except for sole proprietorships, that are the beneficiary of the economic development subsidy.

The Agreement is with Unstoppable Automotive MBMCA LLC, which is the sole beneficiary of the economic development subsidy.

Unstoppable Automotive MBMCA LLC
40910 Temecula Center Drive
Temecula, CA 92591

2. The start and end dates and schedule, if applicable, for the economic development subsidy.

Annual Subsidy payments from the City to the Developer will commence on the first October 1 st following the first Fiscal Year in which the Dealership opens and end on the October 1st immediately following the fifth anniversary of the opening of the dealership.

3. A description of the economic development subsidy, including the estimated total amount of the expenditure of public funds by, or of revenue lost to, the local agency as a result of the economic development subsidy.

The economic development subsidy shall be in the form of the City sharing 50% of the amount sales tax revenue that the City actually receives from the application of the 1% Tax Rate to the actual amount of taxable sales generated by the Dealership over a term of five (5) consecutive 12-month operating years.

Based on the projection of taxable sales to be generated by the Dealership over the first five (5) operating years, the City estimates that Annual Subsidy payments to the Developer will total approximately $3.48 million over the term of the Agreement.

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Marina City CouncilMay 20, 2025

Marina City Council
May 20, 2025