Pacifica City Council
November 10, 2025

service exceptions").

Section R110.3.1 of the California Residential Code is hereby added to read as follows:

R110.3.1 Improvements prior to occupancy of structures and utility service exceptions.
(a) No new structure for which a building permit is required shall be occupied or otherwise used, nor shall utility services be supplied thereto, until such public improvements, including street paving, sidewalk, gutter and/or curb and miscellaneous facilities required by Section R105.3.3 have been installed and approved by the City Engineer and until such time as the Planning Director has been satisfied that all Planning Department requirements for the project have been met, including, but not limited to, any applicable conditions of approval imposed on the project by approval of a discretionary permit.
(b) When it is, in the opinion of the City Engineer and/or the Planning Director, not practicable to complete public improvements including street paving, sidewalk, gutter and/or curb, miscellaneous facilities or Planning Department conditions prior to completion of construction of the structure, a completion bond in an amount determined by the City Engineer and/or Planning Director to be adequate to ensure completion shall be posted for the completion of the required improvements.

Exception: The Building Official may authorize the installation of gas and/or electric utilities in buildings for the purpose of testing equipment prior to completion of construction when the Building Official has determined that such utilities are necessary for the testing of required equipment prior to the final inspection of the building.

Sec. 8-7.5.09. Amendments: Section R111.4 ("Service Utilities: Underground Utilities").

Section R111.4 is hereby added to the California Residential Code to read as follows:

Section R111.4 - Underground Utilities.

R111.4.1 - Authority and Purpose. This Section is enacted pursuant to the general police powers of the City as well as the City's authority to modify its local building standards, and is for the purpose of ensuring that all new construction adheres to utility undergrounding measures designed to reduce the risk of fire and to preserve scenic resources.

R111.4.2 - Undergrounding Requirements.

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(a) Persons constructing any structure subject to this Code shall underground all utility lines as follows:
(i) All on-site utility lines must be placed underground; (ii) All utility lines between (i.e., connected to and serving) the structure and the point of connection to existing utility lines having the capacity to serve the structure must be placed underground; and
(iii) If any utility lines are being upgraded, the upgraded portions as well as the pre-existing lines shall be placed underground.
(b) Exceptions. Undergrounding of utilities as described in this Subsection shall not be required when any of the following three conditions apply:
(i) The undergrounding of utility lines would require the trenching and repaving of any public right-of-way that has been paved within one year from the date the building permit is issued;
(ii) The undergrounding of utility lines would require more than 500 feet of trenching to reach a point of connection to existing utility lines having the capacity to serve the residential structure. In such case, the nearest 500 feet of utility lines to the structure shall be installed underground; or
(iii) The servicing utility carrier has issued written notice indicating that undergrounding is either impractical or impossible given the location of the structure, and that the carrier has refused to provide utilities through undergrounded utility lines.

R111.4.3 - Undergrounding Standards.
(a) All placement of utilities underground shall adhere to the standards and specifications of the California Building Standards Code, including applicable titles, as applied and codified in this Title. Any placement of utilities underground shall be subject to inspection by the Building Official to ensure that these standards are met.
(b) In the event that the placement of utilities underground requires digging, trenching, or otherwise impacting existing public right-of-way, the property owner shall be responsible for obtaining all necessary licenses, permits, and rights of entry from the City, county, and/or state, as appropriate. The property owner shall also be required to restore or cause to be restored all public right-of-way that is impacted by the placement of utilities, which restoration will include replacement of pavement overlay.

Sec. 8-7.5.10. Amendments: Section R112 ("Board of Appeals").

Section R112.1 of the California Residential Code is hereby amended in its entirety

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to read as follows:

R112.1 Appeal Procedure. Any person who is aggrieved by an order, decision or determination of the Building Official as provided in Section R112.1 may appeal said order, decision or determination. Such appeal shall be in writing and must be filed with the City Clerk within ten (10) business days from the date of service of the order, decision or determination being appealed. The appeal must specify the basis for the appeal in detail, provide a mailing address and telephone number for the appellant, and include the applicable appeal fee. If a timely appeal is not received by the City Clerk, the right to appeal is waived and the order, decision or determination of the Building Official is deemed final and binding. Appeals shall be heard as follows:
(a) Appeals shall be heard before the Emergency Preparedness and Safety Commission ("Commission"). As soon as practicable after receiving the request, the City Clerk shall set a date for the Commission to hear the appeal, which date shall be not less than ten (10) calendar days nor more than forty-five (45) calendar days from the date the appeal was received. The City Clerk shall give each party written notice of the time and place of the hearing at least ten (10) calendar days prior to the date of the hearing, either by causing a copy of the notice to be delivered to the party personally, or by mailing a copy thereof, postage prepaid, addressed to each appealing party at the address(es) shown on the request.

Continuances of the appeal hearing may be granted by the Commission on request of the appealing person for good cause shown, provided such request is made no later than 24 hours prior to the scheduled hearing, or upon request of the Building Official or his or her designee for good cause shown, or on the Commission's own motion.
(b) At the time and place set forth in the notice of hearing, the Commission shall hear the testimony of the appealing person(s), the Building Official, and/or their witnesses, as well as any documentary evidence presented by these persons concerning the order, decision or determination being appealed. Only those matters or issues specifically raised in the written appeal shall be considered in the hearing. Appeal hearings are informal, and formal rules of evidence and discovery do not apply.
(c) Upon the conclusion of the appeal hearing, the Commission shall, on the basis of the evidence presented at the hearing, determine whether the order, decision or determination should be affirmed, modified, or rescinded. A copy of the Commission's written decision shall be served upon the appealing person by first class mail or by personal service. Notwithstanding any other provision of the Pacifica Municipal Code, the determination of the Commission shall be final and binding.
(d) If the appellant fails to appear, the Commission shall cancel the hearing and send a notice thereof to the appellant by first class mail. A cancellation of a hearing due to non-appearance of the appellant shall constitute the appellant's waiver of

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the right to appeal. In such instances, the order, decision or determination of the Building Official shall be final and binding.

Sec. 8-7.5.11. Amendments: Section R113.1 ("Violations").

Section R113.1 of the California Residential Code is hereby amended in its entirety to read as follows:

R113.1 Unlawful acts. Irrespective of whether a notice of violation has been issued pursuant to Section R113.2 of this Code, it shall be unlawful for any person, firm, or corporation to erect, construct, alter, extend, repair, move, remove, demolish, occupy or maintain any building, structure, equipment, installation or land regulated by the Technical Codes, or cause or permit the same to be done, in conflict with or in violation of any of the provisions of the Technical Codes.

R113.1.1 Unpermitted Structures. No person shall own, use, occupy, or maintain an unpermitted structure. For purposes of this section, "unpermitted structure" shall be defined as any building or structure, or portion thereof, that was erected, constructed, enlarged, altered, repaired, moved, improved, removed, connected, converted, demolished, or equipped, at any point in time by any person, without the required permit(s) having first been obtained from the Building Official or with a valid permit as issued by the Building Official which subsequently expired and became null and void.

Sec. 8-7.5.12. Amendments: Section R113.4 ("Violations penalties").

Section R113.4 of the California Residential Code is hereby amended in its entirety to read as follows:

R113.4 Violation penalties. Any person, firm or corporation who violates any provision of the Technical Codes, or fails to comply with any of the requirements thereof, or who erects, constructs, alters, repairs or maintains a building, structure, installation or equipment, or excavates, cuts, fills, grades, compacts or maintains land in violation of approved construction documents or directive of the Building Official, or of a permit or certificate issued under the provisions of the Technical Codes, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be subject to the punishments set forth in Chapter 2 of Title 1 of the Pacifica Municipal Code.

Each and every day, or portion thereof, during which any violation of the Technical Codes occurs or continues constitutes a separate and distinct offense.

Sec. 8-7.5.13. Amendments: Section R115 ("Procedure for Legalizing Unpermitted Structures").

Section R115 of the California Residential Code is added to read as follows:

R115 Procedure for Legalizing Unpermitted Structures.

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R115.1 Permits. Any person who wishes to legalize an "unpermitted structure" (as this term is defined in Sections R113.1.1 of this Code), shall obtain all applicable permits. Unpermitted structures shall comply with all current Technical Code requirements and other required approvals pursuant to the Pacifica Municipal Code in order to be legalized.

R115.2 Plans.

R115.2.1 Structures. Prior to the issuance or granting of any permit to legalize an unpermitted structure, plans showing the plot plan, exterior elevations, existing structures, proposed structures, and proposed finish materials shall be submitted to the Building Official and Planning Director for review and approval.

R115.2.2 Grading. Prior to the issuance or granting of any permit to legalize unpermitted grading, a grading and drainage plan showing the original grade and existing unpermitted grade on the premises and the existing grade on adjoining properties, and a soils report shall be submitted to the Building Official and Planning Director for review and approval.

R115.3 Inspections.

R115.3 Inspections. Unpermitted structures or unpermitted grading for which a permit has subsequently been obtained shall be subject to inspection by the Building Official in accordance with, and in the manner prescribed in, the Technical Codes. The Building Official may require the removal of finish materials in order to expose framing elements, electrical components, plumbing fixtures, or mechanical systems, or may require the removal of fill, to verify that installation, construction, or grading was performed in conformance with the Technical Codes.

R115.4 Investigation Fees.

R115.4.1 Investigation. Whenever any work for which a permit is required by this Code has commenced on land or in connection with any type of structure without first obtaining said permit, a special investigation shall be made before a permit may be issued for such work. For purposes of this section, "special investigation" shall include, but is not limited to, inspecting premises and structures, reviewing permit, license and other records of the City or other agencies, reviewing plans, taking photographs, engaging in conferences and communications with other officials of the City or other agencies, and engaging in conferences and communications with owners or other responsible persons concerning the unpermitted structure or grading.

R115.4.2 Fee. A special investigation fee shall be paid prior to the issuance of a permit for an unpermitted structure or unpermitted grading. The fee shall be assessed as provided in Section R108.4.2 of this chapter.

The payment of such investigation fee shall not exempt any person from compliance with all other provision of this Code nor from any penalty prescribed

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by law.

R115.5 Unpermitted Structures Which Cannot be Legalized.

If the Planning Director determines that the City's zoning regulations prohibit legalization of any unpermitted structure, the structure shall be demolished or, if previously permitted, restored to its original approved condition, with all requisite permits, inspections and approvals.

If the Building Official determines that an unpermitted structure cannot be made to conform with current applicable Technical Code requirements, the structure shall be demolished or, if previously permitted, restored to its original approved condition, with all requisite permits, inspections and approvals.

Sec. 8-7.5.14. Amendments: Section R309.1. ("Townhouse automatic fire sprinkler systems").

Section R309.1 of the California Residential Code is amended in its entirety to read as follows:

R309.1 Townhouse automatic fire sprinkler systems.

1. An automatic residential fire sprinkler system shall be installed in Townhouses.

2. Existing Buildings and Structures. An automatic fire sprinkler system shall be installed throughout all buildings when an addition is added to the building.

Exception.

1. When an addition to an R-3 occupancy is less than 1,000 square feet in size no sprinklers are required in either the addition or the existing building.

Section R309.1.1 Design and installation.

Automatic fire sprinkler systems for townhouses shall be designed and installed in accordance with Section R309 or NFPA 13D.

Sec. 8-7.5.15. Amendments: Section 309.2 One- and two-family dwellings automatic fire sprinkler systems.

Section R309.2 of the California Residential Code is amended in its entirety to read as follows:

R309.2 One- and two-family dwelling automatic sprinkler systems.

1. An automatic sprinkler system shall be installed in all new one-and twofamily dwellings.

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2. Existing one- and two-family dwellings. An automatic sprinkler system shall be installed when an addition is added to the building.

Exception 1: When an addition to an R-3 occupancy is less than 1,000 square feet in size no sprinklers are required in either the addition or the existing building.

Exception 2: The construction of an accessory dwelling unit shall not trigger a requirement for fire sprinklers to be installed in an existing dwelling, including any addition solely for purposes of accessory dwelling unit construction.

Sec. 8-7.5.16. Amendments: Section R401.4 ("Soil Tests").

Section R401.4.3 is hereby added to the California Residential Code to read as follows:

R401.4.3 Investigation of Off-site Conditions.

The following requirements shall apply to any site located within a geologic or seismic hazard zone mapped by the California Geologic Survey or adopted in the General Plan of the City of Pacifica:

1. A registered design professional shall evaluate potential off-site geotechnical hazards, including, but not limited to, those upslope and/or downslope of the project site, that may have the potential to cause direct injury to persons or damage to property as a result of development of the project.

2. When any such hazard(s) is/are identified, the registered design professional shall identify appropriate design features to be incorporated into the project design to minimize the hazard(s) to the maximum extent practicable.

3. The building official shall not issue a building permit until any project design feature(s) identified by the evaluation required in this subsection has or have been incorporated into the project plans.

4. The evaluation required in this subsection shall be limited to consideration of readily available data obtained from aerial photos, maps, previously prepared geotechnical reports, and observations able to be made from the project site and other publicly-accessible areas in the vicinity of the project site, including, but not limited to, public rights-of-way and public open spaces. This subsection shall not require or authorize entry onto neighboring properties for any purpose, including, but not limited to, obtaining soil borings.

5. The registered design professional may seek a waiver from the requirement of this subsection to construct project design features to minimize potential off-site geotechnical hazards when the construction of such features would be disproportionate to the cost of the overall project. The building official shall

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consider waiver requests and grant approval if the registered design professional has demonstrated with sufficient written evidence that the cost of design features to minimize potential off-site geotechnical hazards would exceed 20 percent of the overall project cost, such features would not otherwise be required by any other provision of this Code, and no other less-costly feature can be incorporated into the project design to reduce the identified hazard(s).

The requirements of this subsection shall be supplementary to and shall not replace or substitute for any other geotechnical investigation or geohazard investigation required by this Code or any other provision of law. Except, however, when another provision of this Code may provide for waiver or exemption from geotechnical investigation, the provisions of this subsection shall still apply.

CHAPTER 8. HISTORICAL BUILDINGS CODE
Sec. 8-8.01. Adoption of the California Historical Buildings Code.

For the purpose of regulating the erection, construction, enlargement, alteration, repair, removal, demolition, conversion, occupancy, equipment, use, height, area, and maintenance of all historical buildings and structures in the City of Pacifica, adopts that certain Code designated as the California Historical Building Code, 2025 Edition [Title 24, California Code of Regulations, Part 8].

CHAPTER 8.5. EXISTING BUILDINGS CODE
Sec. 8-8.5.01. Adoption of the California Existing Buildings Code.

For the purpose of regulating the erection, construction, enlargement, alteration, repair, removal, demolition, conversion, occupancy, equipment, use, height, area, and maintenance of all existing buildings and structures in the City of Pacifica, adopts that certain Code designated as the California Existing Building Code, 2025 Edition [Title 24, California Code of Regulations, Part 10].

CHAPTER 9. REFERENCE STANDARDS CODE
Sec. 8-9.01. Adoption of the California Reference Standards.

For the purpose of regulating the erection, construction, enlargement, alteration, repair, removal, demolition, conversion, occupancy, equipment, use, height, area, and maintenance of all buildings and structures in the City of Pacifica, adopts that certain Code designated as the California Reference Standards Code 2025 Edition [CCR Title 24, California Code of Regulations, Part 12]. […]
CHAPTER 22. Wildland-Urban Interface Code

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TITLE 4. - PUBLIC SAFETY
CHAPTER 3. - FIRE PROTECTION
Article 1. Fire Code
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Sec. 8-22.01. Adoption of the California Wildland-Urban Interface Code.

For the purpose of regulating the erection, construction, enlargement, alteration, repair, removal, demolition, conversion, occupancy, equipment, use, height, area, and maintenance of all buildings and structures and grading in the City of Pacifica, Chapters 1 through 7, of that certain Code designated as the California Wildland-Urban Interface Code, 2025 Edition [Title 24, California Code of Regulations, Part 7], which is on file in the office of the City Clerk for public record and inspection, is hereby adopted by reference and made a part of this chapter as though set forth in this chapter in full, subject, however, to the amendments, additions, and deletions set forth in this chapter, and said Code shall be known as the Wildland-Urban Interface Code for the City. “ Section 6. Repeal. Article 1 (Fire Code) of Chapter 3 (Fire Protection) of Title 4 (Public Safety) of the Pacifica Municipal Code is hereby repealed in its entirety; however, such repeal shall not affect or excuse any violation of said chapter that occurred prior to the effective date of this ordinance; nor shall such repeal impede, impact, or negate any administrative, civil, or criminal enforcement of said chapter that that commenced prior to the enforcement date of this ordinance.

Section 7. Amendment. Article 1 (Fire Code) of Chapter 3 (Fire Protection) within Title 4 (Public Safety) of the Pacifica Municipal Code is hereby amended to read in its entirety as follows:
“Article 1. Fire Code
Sec. 4-3.101. Adoption of the California Fire Code.

For the purpose of regulating the erection, construction, enlargement, alteration, repair, removal, demolition, conversion, occupancy, equipment, use, height, area, and maintenance of all buildings and structures and grading in the City of Pacifica, Chapters 1 through 67, including Appendix B ("Fire-Flow Requirements for Buildings"), Appendix C ("Fire Hydrant Locations and Distribution"), Appendix D ("Fire Apparatus Access Roads"), and Appendix F ("Hazard Ranking"), Appendix L ("Requirements for Fire Fighter Air Replenishment Systems") of that certain code designated as the California Fire Code, 2025 Edition [CCR Title 24, Part 9], published by the International Code Council, amended by the State of California and as adopted and/or amended by the Office of the State Fire Marshal, which is on file in the Office of the City Clerk for public record and inspection, is hereby adopted by reference and made a part of this chapter as though set forth in this chapter in full, subject, however, to the amendments, additions, and deletions set forth in this chapter, and said code shall be known as Fire Code for the City of Pacifica.

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Sec. 4-3.102. Establishment and duties of the Bureau of Fire Prevention.

The California Fire Code shall be enforced by the Fire Prevention Services Bureau in the Fire Department of the City, which Bureau is hereby established, and which shall be operated under the supervision of the Fire Chief.

The Fire Marshal in charge of the Fire Prevention Services Bureau shall be appointed in accordance with the provisions of Article 4 of Chapter 5 of Title 2 of this Code and Council Resolution No. 82-69.

The Fire Chief may detail such members of the Fire Department as shall from time to time be necessary.

Sec. 4-3.103. Amendments: Section 105.1.1 ("Permits required").

Section 105.1.1 is amended by adding the following paragraph at the end of the section:

The city council of the City of Pacifica may, if it so desires, establish by resolution permit fees in connection with any permit required or authorized to be issued by the fire chief or any other authorized representative of the fire department.

Sec. 4-3.104. Amendments: Section 105.5 ("Required operational permits").

Section 105.5 is amended by adding the following at the end of the section:
105.5.60 Institutions and day care. An operational permit is required to operate any and all occupancies that are set forth under Group I Occupancies, and Group E Occupancy of Title 24 of the California Code of Regulations, each accommodating more than six people.
105.5.61 Residential care facility. An operational permit is required to operate a residential care/assisted living facility as set forth under Group R, Division 4 Occupancies.

Sec. 4-3.105. Amendments: Section 202 ("General Definitions").

Section 202 is added to read as follows:
202 Definitions.
(a) Wherever the word "jurisdiction" is used in said California Fire Code, it shall be held to mean the City of Pacifica.
(b) Wherever the term "Corporation Counsel" is used in said California Fire Code, it shall be held to mean the City Attorney.

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(c) Wherever the words "Fire Code Official" are used in said California Fire Code, they shall be held to mean the Fire Marshal.

Sec. 4-3.106. Amendments: Section 505.1 (“Address Identification”).

Section 505.1 of the California Fire Code is amended by adding the following at the end of the section:

Said numbers shall be internally or externally illuminated in all new construction, or when alterations or repairs of existing construction occur.

The size and location of address numbers for multi-family dwellings and all other occupancies shall be as designated by the Fire Marshal.

Sec. 4-3.107.-Amendments: Section 507 (“Fire Protection Water Supplies”).

Section 507.5.7 is added to the California Fire Code read as follows:
507.5.7 Hydrants. All new fire hydrants shall be UL listed, or equivalent, wet barrel type having a minimum of two 2 ½” and one 4 ½” outlets, all equipped with national standard threads (Clow 860, or approved equivalent). The minimum fire service main size permitted is six inch (6”).

Sec. 4-3.108.-Amendments: Section 509 (“Fire Protection and Utility Equipment Identification and Access”).

Section 509.1.2 is added to the California Fire Code read as follows:
509.1.2 Utility Identification in Multi-Family Tenant Buildings. Utility markings of all gas and electric utility services in multi-family tenant buildings shall be visibly and legibly marked with the unit identification.

Sec. 4-3.109. Amendments: Section 903.2 ("Automatic sprinkler systems. Where required").

Section 903.2 of the California Fire Code is hereby amended to read as follows:
903.2 Required Installations.

A. Newly Constructed Buildings and Structures. An automatic fire sprinkler system shall be installed in all new occupancies and locations.

Exception. Detached U occupancies not exceeding 1,000 square feet in

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size, when accessory to an R-3 dwelling.

B. Existing Buildings and Structures. An automatic fire sprinkler system shall be installed throughout all buildings when an addition is added to the building.

Exceptions:

1. When an addition to a R-3 occupancy is less than 1,000 square feet in size and when an addition to all other occupancies is less than 500 square feet in size, no sprinklers are required in either the addition or the existing building.

2. The construction of an accessory dwelling unit shall not trigger a requirement for fire sprinklers to be installed in an existing dwelling, including any addition solely for purposes of accessory dwelling unit construction.

3. When specifically exempted by the Fire Code Official.

C. 903.2.22 Car Stackers. Parking garage areas containing car stackers shall be protected by an automatic wet-pipe sprinkler system designed to the current edition of NFPA 13. In addition, non-extended coverage standard sidewall sprinklers listed for Ordinary Hazard shall be provided under each parking level, including the bottom level if the stacker is provided with a pit. Each sidewall sprinkler shall cover an area of 80 sq. ft. or less.

The area of application may be reduced from the required 2,500 sq. ft. to as low as 1,500 sq. ft. if:

1. 1-hour fire rated walls are provided to separate the car stacker areas from the standard parking stalls,

2. The car stacker areas are divided up into 1,500 sq. ft. areas via 1- hour fire rated walls, and

3. One-hour fire rated walls are provided to separate the car stacker areas from any other areas in the garage.

One-hour fired rated walls are not required in the driveway areas. For the hydraulic calculation, flow from all sprinklers, upright or pendent sprinklers at ceiling and all sidewall sprinklers at all levels, located in the area of application shall be included in the calculation.

Sec. 4-3.110. Amendments: Section 903.4.3 ("Alarms").

Section 903.4.3 is amended by adding the following to the end of the paragraph:

In addition to the audible device(s) required by this section, an approved strobe

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light shall be located on the exterior of the building in an approved location.

Sec. 4-3.111. Amendments: Section 904.2.2 ("Commercial hood and duct systems").

Section 904.2.2 is amended by adding the following to the end of the paragraph:

The location(s) of all cooking appliances that are protected by an approved automatic fire extinguishing system shall be permanently identified either by a wall mounted "approved" appliance floor plan or marked on the floor in a manner approved by the Fire Marshal.

Sec. 4-3.112. Amendments: Section 907.7.3 ("Instructions").

Section 907.7.3 of the California Fire Code is amended by adding the following paragraph:

Each fire alarm system shall have posted at the main control panel instructions for silencing and resetting the system, the day and night phone numbers of the person responsible for the property, and the company or individual providing maintenance services for the alarm system.

Sec. 4-3.113. Amendments: Section 907.8.1 ("Maintenance required").

Section 907.8.1 of the California Fire Code is amended by adding the following to the end of the paragraph:

Owners and operators of group R-1 occupancies shall provide documentation to the Fire Department, such as annual inspection forms, which confirm that all smoke detection devices and equipment within apartment units are installed and are in good operating condition.

Sec. 4-3.114. Amendments: Section 914.3.9 ("High Rise Buildings").

Section 914.3.9 is added to read as follows:

Section 914.3.9 Firefighter Breathing Air Replenishment. All Group B and Group R occupancies, each having floors used for human occupancy located more than seventy-five feet (75') above the lowest level of fire department vehicular access, shall be equipped with an approved Firefighter Breathing Air Replenishment System as outlined in Appendix L. Such a system shall provide an adequate pressurized fresh air supply through a permanent piping system for the replenishment of portable life sustaining air equipment carried by fire department, rescue, and other personnel in the performance of their duties. Location and specifications of access stations to, and the installation of, such air replenishment systems shall be made in accordance with the requirements of the Fire Chief.

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Sec. 4-3.115. Amendments: Section 5608.1 ("Fireworks display").

Section 5608.1 is amended by adding the following to the end of the paragraph:

The sale and discharge of safe and sane fireworks is permitted only as provided in the Pacifica Municipal Code.

Section 5608.1.2 is hereby added to read as follows:
5608.1.2 Dangerous Fireworks Prohibited. Except as hereinafter provided, it shall be unlawful for any person to possess, store, offer for sale, expose for sale, sell at retail, or use or explode any fireworks, except those designated as "safe and sane" and approved by the State Fire Marshal. No person under the age of eighteen (18) shall be permitted to purchase or sell "safe and sane" fireworks. The Fire Chief shall have the power to adopt reasonable rules and regulations for the granting of permits for supervised public displays of fireworks by a jurisdiction, fair association, amusement park, or other organization or for the use of fireworks by artisans in the pursuit of their trade. Every such use or display shall be handled by a competent operator approved by the Fire Chief and shall be of such character and so located, discharged, or fired so as, in the opinion of the Fire Chief after proper investigation, not to be hazardous to property or endanger any person, and shall be in accordance with Chapter 56 of said California Fire Code.

Sec. 4-3.116. Amendments: Section 5706.2.4.4 ("Locations where above-ground tanks are prohibited").

Section 5706.2.4.4 is amended by adding the following paragraph at the end of the section:

The storage of flammable or combustible liquids in above-ground outside storage tanks is prohibited in all areas of the City except for those areas with the zoning designation of Public Facilities District. Notwithstanding the foregoing, the Fire Chief may grant a permit for such storage in other areas of the City if the Chief determines, in each case, that the storage is required for the conduct of a lawful use upon the property, will not constitute a safety hazard, and will otherwise comply with all applicable provisions of this Code and all other ordinances, rules and regulations of the City. The Chief may impose such conditions and requirements upon the issuance of the permit, as the Chief deems necessary or appropriate.

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Sec. 4-3.117. Amendments: Section 6104.2 ("Maximum capacity within established limits").

Section 6104.2 is amended by adding the following paragraph at the end of the first paragraph:

The aggregate storage of liquefied petroleum gas at any one installation in excess of two thousand (2,000) gallons (7,570 L) is prohibited in all areas of the City except for those areas with the zoning designation of Public Facilities District.

Notwithstanding the foregoing, the Fire Chief may grant a permit for such storage in other areas of the City if the Chief determines, in each case, that the storage is required for the conduct of a lawful use upon the property, will not constitute a safety hazard, and will otherwise comply with all applicable provisions of this Code and all other ordinances, rules and regulations of the City. The Chief may impose such conditions and requirements upon the issuance of the permit, as the Chief deems necessary or appropriate.

Sec. 4-3.118. Amendment Appendix D, Section D101 ("General").

Section D101.2 is added to read as follows:

D101.2 - Definition. Fire Apparatus Access Road. A road that provides fire apparatus access from a fire station to a facility, building or portion thereof. This is a general term inclusive of all other terms such as but not limited to fire lane, public street, private street, parking lot lane, access roadway and driveway.

Sec. 4-3.119. Amendments: Appendix D, Section D102 ("Required access").

1. Section D102.2 is added to Appendix D of the California Fire Code to read as follows:

Section D102.2. Fire department access shall extend to within 50 feet (15 m) of at least one exterior door that can be opened from the outside and that provides access to the interior of the building.

Exception: one- or two-family dwellings or townhouses protected with 13D or 13R may be permitted to be increased to 150 ft. (46 m).

2. Section 102.3 is added to Appendix D of the California Fire Code to read as follows:

Large Buildings. Fire department access roads shall be provided such that any portion of the facility or any portion of an exterior wall of the first story of the building is located not more than 150 ft. (46 m) from fire department access roads as measured by an approved route around the exterior of the building or facility.

3. Section 102.4 is added to the California Fire Code to read as follows:

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Fire apparatus access roads shall have an unobstructed vertical clearance of not less than 13 ft. 6 in. (4.1 m).

4. Section D102.5 is added to the California Fire Code to read as follows:

Exception: When fire department access roads cannot be installed due to location on the property, topography, waterways, nonnegotiable grades, or other similar conditions the Fire Marshal shall be authorized to require fire protection features in addition to those already required.

Sec. 4-3.120. Appendix D, Section D103 ("Minimum specifications").

Section D103.7 is added to Appendix D of the California Fire Code to read:

D103.7 - Marking where fire lanes on private property have been designated by the Fire Marshal, curbs shall be painted red on the side or sides of the street or access route where parking is prohibited and no parking signs or other appropriate notice prohibiting obstructions, as approved by the Fire Marshal, shall be provided and maintained by the owner. “
Section 8. Severability. The City Council hereby declares that every section, paragraph, sentence, clause, and phrase of this ordinance is severable. If any section, paragraph, sentence, clause, or phrase of this ordinance is for any reason found to be invalid or unconstitutional, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining sections, paragraphs, sentences, clauses, or phrases.

Section 9. Effective Date. This Ordinance shall become effective thirty days following adoption or on January 1, 2026, whichever is later. However, where applications and plans for building have been filed and are pending for building permits prior to the effective date of this Ordinance, such permits may be issued, and the applicant may proceed with construction in strict compliance with the California Building Standards Codes, 2022 Editions, California Code of Regulations, Title 24, as previously adopted and amended by any ordinances of the City of Pacifica, but only to the extent that the issuance of such permit is required by Health and Safety Code section 18938.5 and any other applicable law.

Section 10. Publication, Filing. The City Clerk shall cause this ordinance to be published in a newspaper of general circulation as required pursuant to state law and shall cause this ordinance to be entered into the Pacifica Municipal Code. The City Clerk shall file this ordinance with the California Building Standards Commission in the manner as may be required by law.
***

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The foregoing ordinance was introduced on November 10, 2025, and passed and adopted at a regular meeting of the City Council of the City of Pacifica held on November 24, 2025, by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSENT, Councilmembers:
_____________________
Sue Beckmeyer, Mayor
ATTEST: APPROVED AS TO FORM:
___________________ ________________________
Sarah Coffey, City Clerk Michelle Marchetta Kenyon, City Attorney

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EXHIBIT A
-FINDINGS
[Forthcoming]

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CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
11/10/2025
1 SUBJECT:

Appointments to the Emergency Preparedness and Safety Commission; Library Advisory Committee; and Economic Development Committee
RECOMMENDED ACTION:

Move to appoint:

A) three (3) applicants to the Emergency Preparedness and Safety Commission for full 4- year terms to expire October 2029; and
B) six (6) applicants to the Library Advisory Committee: three (3) at-large members for full 4- year terms to expire October 2029, one (1) at-large member for a partial term to expire October 2027, and two (2) Youth members for one-year terms to expire October 2026; and
C) five (5) applicants to the Economic Development Committee: three (3) for full 4-year terms to expire October 2029 and two (2) for partial terms to expire October 2027.

STAFF CONTACT:

Sarah Coffey, City Clerk
650-738-7307
[email protected]
BACKGROUND/DISCUSSION:

The City has recruited applicants for the Emergency Preparedness and Safety Commission, Library Advisory Committee, Economic Development Committee, and Beautification Advisory Committee due to vacancies and terms expiring in October 2025. The City has also recruited applicants for the newly established Climate Action & Resilience Committee.

At this meeting, the City is seeking to appoint applicants to the following positions:
1) Emergency Preparedness and Safety Commission: a total of three (3) positions, each for full 4-year terms to expire October 2029;
2) Library Advisory Committee: a total of five (5) positions for the following:

A) three (3) for full 4-year terms to expire October 2029, and B) two (2) Youth (under age 18) for one-year terms to expire October 2026; and 3) Economic Development Committee: a total of five (5) positions for the following:

A) three (3) for full 4-year terms to expire October 2029, and B) two (2) for partial terms to expire October 2027.

Recruitment notices were posted on the City website on August 26, 2025, and published in the San Mateo Daily Journal on August 27, 2025, and September 3, 2025. These recruitments were also advertised in the City's weekly Connect With Pacifica e-newsletter and the City's social 9 Packet Pg. 133
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media accounts. The application deadline of September 12, 2025, was extended two times to September 29, 2025, and October 10, 2025.

The City received five (5) timely applications for the Emergency Preparedness and Safety Commission; twelve (12) timely applications for the Library Advisory Committee; and seven (7) timely applications for the Economic Development Committee. The lists of applicants under consideration for each committee and commission are attached.

Applicant interviews for the Emergency Preparedness and Safety Commission, Library Advisory Committee, and Economic Development Committee were conducted by the City Council at a Special City Council Meeting held on October 28, 2025. Due to the number of positions under recruitment and the number of total applicants, a previous applicant interview date was held on Monday, October 20, 2025, to conduct interviews for applicants indicating interest in the Climate Action and Resilience Committee and the Beautification Advisory Committee. Some applicants indicated interest in one or more of the committees / commissions; those indicating interest in the Climate Action and Resilience Committee or the Beautification Advisory Committee were scheduled for interviews on October 20. Appointments to the Beautification Advisory Committee and the Climate Action & Resilience Committee were made by the City Council at the regular City Council meeting on October 27, 2025. The lists of applicants in Attachments A, B and C include the names of all applicants that listed interest in the specified committee / commission; a note has been added next to names that were appointed to another committee at the October 27 City Council meeting.

Pacifica Municipal Code Section 2-2.103 (Membership: Eligibility) sets forth guidelines for City Commissions and Committees membership eligibility as follows:
2-2.103(a) Membership on the commissions provided for in this chapter shall represent a broad cross-section of the entire community.
2-2.103(b) To be eligible for appointment to any commission or committee, a person shall be a qualified elector of the City, except for the following persons:
(1) Members who are under the age of eighteen (18) years at the time of their appointment; provided, however, they shall be residents of the City; and (2) Members of committees who are not qualified electors or residents of the City but who may be appointed by the Council where they are deemed to be able to provide expertise or where they may be representative of a section of the community (i.e., commercial).

The Library Advisory Committee designates positions specifically for Youth members under the age of 18. At the City Council meeting held on January 27, 2025, the City Council approved Resolution No. 10-2025 amending the membership of the Library Advisory Committee to include two of the nine voting member positions on the Library Advisory Committee designated for Youth Members under the age of 18; term duration for Youth Members shall be one year. The non-youth member positions shall have a full term of four years.

Selection Process
Lists of all applicants under consideration for each committee / commission are attached for Emergency Preparedness and Safety Commission (Attachment A); Library Advisory Committee (Attachment B); and Economic Development Committee (Attachment C).

Council may choose to deliberate as to the candidates that they would support to nominate for appointments to each of the open Committee seats. Council should then make a formal motion to appoint named applicants to each committee. Each formal motion should specify which 9 Packet Pg. 134
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named individual(s) are nominated for appointment to full terms and which named individual(s) are nominated for appointment to a partial term of specified duration and or to the Youth Member position(s), if there are multiple positions of differing terms to be filled.

Recommended Action tonight is to appoint the following:

1. Three (3) individuals to the full 4-year terms to expire October 2029 for the Emergency Preparedness and Safety Commission.

2. Three (3) individuals to the full 4-year terms to expire October 2029 for the Library Advisory Committee.

3. One (1) individual to a partial term to expire October 2027 for the Library Advisory Committee.

4. Two (2) Youth Member positions to expire October 2026 for the Library Advisory Committee. Note: Those indicating interest in the Youth Member position have been noted on Attachment B.

5. Three (3) individuals to the full 4-year terms to expire October 2029 for the Economic Development Committee.

6. Two (2) individuals to partial terms to expire October 2027 for the Economic Development Committee.

FISCAL IMPACT:

None associated with this item.

ORIGINATED BY:

City Clerk
ATTACHMENT LIST:

Attachment A: List of Applicants Emergency Preparedness and Safety Commission (PDF) Attachment B: List of Applicants Library Advisory Committee (PDF) Attachment C: List of Applicants Economic Development Committee (PDF) 9 Packet Pg. 135

CITY COUNCIL REGULAR MEETING
NOVEMBER 10, 2025

APPOINTMENT TO

EMERGENCY PREPAREDNESS AND SAFETY COMMISSION
NEED 3:
• 3 full 4-year terms to expire October 2029
Applicants
Jay Crawford
Debra Etienne
Jeanne Salisbury
Ofelia Virtucio
Michael Wahlman

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CITY COUNCIL REGULAR MEETING
NOVEMBER 10, 2025

APPOINTMENTS TO

LIBRARY ADVISORY COMMITTEE
NEED 6:
• 3 full 4-year terms (at-large) to expire October 2029 • 1 partial term (at-large) to expire October 2027
• 2 one-year youth terms to expire October 2026
Applicants Youth Applicants
Theo George Coppola Ethan Ng *Appointed to CARC
Stephanie Hartwell-Mandella Kathleen Renfroe Johnson
Jennifer Hlavin Maya Sinapuelas
Kathy Long Maile Velichko *Appointed to BAC
Brianne Murphy Miller Parker Witte
Ofelia Virtucio Grace Zaheed

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CITY COUNCIL REGULAR MEETING
NOVEMBER 10, 2025

APPOINTMENT TO

ECONOMIC DEVELOPMENT COMMITTEE
NEED 5:
• 3 full 4-year terms to expire October 2029
• 2 partial terms to expire October 2027
Applicants
Oscar Baud
Brendan Berman
Cole Dalton
Floriane Gramlich
Greta Sieglock
Teresa Sulcer
Remi Tan

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CITY OF PACIFICA

COUNCIL AGENDA SUMMARY REPORT
11/10/2025
1 SUBJECT:

Council Study Session – Revenue Generation Opportunities and Pacifica’s Financial Sustainability Challenges
RECOMMENDED ACTION:

Hold a Council Study Session on Pacifica’s financial sustainability challenges and revenue generation opportunities. Provide direction to the City Manager on Options to address these challenges to maintain the Current Level of City Services and address Unfunded Capital Project and Other Operating Needs.

STAFF CONTACT:

Kevin Woodhouse, City Manager
(650) 738-7409
[email protected] <mailto:[email protected]> Yulia Carter, Assistant City Manager
(650) 738- 7402
[email protected] <mailto:[email protected]>
FORWARD:

Each year the City must adopt a balanced budget for the upcoming fiscal year. And each year this is a challenging process involving compromises while striving to maintain essential service levels. Despite significant historical and on-going budget challenges, Pacifica has been able to balance the budget each year, while achieving award-winning budget and financial audit reports, a testament to transparency, accountability and prudence of the City’s financial planning and management practices.

However, over years of expenditure containment, slow revenue growth, and increasing state and federal funding restrictions, the feasibility of year-by-year budget balancing while maintaining essential service levels is disappearing. Low staffing and compensation levels in comparison to the labor market norm for local government in this region is a serious threat to organizational sustainability. And lack of funding for critical infrastructure improvement projects is a growing threat to public health and safety.

As part of this year’s staff workplan to support the City’s Strategic Plan, the City Manager committed to preparing for a study session in the fall of Fiscal Year 2025-26 about Pacifica’s continuing financial sustainability challenges for the City Council and the community to gain a deeper understanding about Pacifica’s financial realities and options moving forward. The City Manager’s Fiscal Year 2025-26 Budget Transmittal Memo emphasized that the path forward must entail reasonable new development of housing and mixed-use centers to realize property and sales tax revenue increases, hotel capacity to realize transient occupancy tax revenue increases, combined with other revenue generation strategies such as strategic economic development and voter-approved revenue measures if Pacifica is to ever achieve, and operationally sustain, the level of service delivery desired by the community. The purpose of this study session is to explain and document the numbers behind this reality. Only by understanding today’s financing baseline can the Council, and the community, begin an honest conversation about the difficult financial and service-delivery choices Pacifica must make about its future.
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The City Council’s Strategic Plan acknowledges this reality by identifying organizational and fiscal stability as its top-priority goal. The Strategic Plan also sets a vision for Pacifica’s future that can only be achieved with a well-staffed, strong, and stable workforce and hundreds of millions of dollars in capital project funding. It is not only my obligation as City Manager, but my deepest hope for Pacifica, that this study session helps to further City Council and community understanding about how to connect the dots between current financial reality and future vision, to show and explain “why,” and not just “how,” Pacifica’s revenues are lagging so far behind what’s possible for a community like Pacifica, and therefore to shed light on a multi-pronged revenue enhancement strategy that can help bring the City Council’s vision to reality.

This thorough staff report provides a great deal of information, organized in four sections as follows:
• Section 1 - Budget Challenges: Reviews the City’s projected General Fund deficit, staffing limitations, and unfunded capital needs.
• Section 2 - Lessons from Thriving San Mateo County Communities: Provides examples of how some neighboring cities achieved long-term fiscal sustainability and economic vitality through strategic housing growth, targeted economic development, and diversified revenue streams.
• Section 3 - Pathways Toward Fiscal Sustainability: Explores potential strategies to strengthen the City’s long-term financial base, including revenue enhancements, costrecovery, development-related funding, and other tools. • Section 4 - Next Steps: Evaluates potential voter-approved measures to address the City’s immediate budget deficit to support the continued delivery of essential services.

The staff presentation on November 10, 2025, will augment this information with other visuals to help convey several key points.

The overarching focus for this study session is to establish a shared fiscal baseline understanding about local government revenue generation and where structural gaps exist, and what strategies may exist to bridge those gaps, so Pacifica can strengthen its fiscal base through sustainable and diversified revenue sources. The scope of this discussion is not intended to dive in depth into City expenditures or specific service levels or specific economic development tasks or projects. Those types of detailed topics are part of the annual budget and Capital Improvement Program development process and other specific agendized discussions for City Council which require much more detailed staff preparation and analysis.

INTRODUCTION:

The City of Pacifica faces a fiscal landscape that is increasingly complex and multidimensional.

For many years, the City has managed to balance its annual budgets primarily by reducing expenditures and deferring investments, which meant living within existing revenues but at the cost of long-term organizational and community health. This has meant cutting positions and underfunding salary growth to the point where the organization’s capacity for service provision became inadequate to meet the needs and desires of the community.

This approach has left multiple layers of structural imbalance. The first and most visible is the operating deficit projected to emerge beginning in FY 2026-27. Beneath that, however, lies a chronically underfunded organization, with staffing levels, salaries, and benefits that have not kept pace with the demands of modern service delivery or regional labor market realities. This has constrained the City’s capacity to recruit, retain, and sustain the professional workforce needed to provide high-quality services.
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A third and equally critical layer involves the City’s infrastructure and capital investment deficit.

Decades of deferred maintenance have accumulated across streets, facilities, and public spaces, compounded by Pacifica’s extreme coastal climate, which accelerates wear on assets and increases long-term maintenance costs. The City’s unfunded capital projects now represent hundreds of millions in deferred public investment, and there is currently no dedicated or sustainable source of funding to maintain, let alone modernize, the infrastructure that sustains Pacifica’s quality of life and resilience.

Together, these interrelated challenges, operating shortfalls, under-resourced staffing, and unfunded capital needs, form a complex fiscal problem that cannot be addressed through incremental measures alone. The solution must be equally comprehensive and thoughtful, combining near-term stabilization with longer-term strategies for fiscal sustainability, economic growth, and organizational capacity building.

During the preparation of the 2025-26 fiscal year City Budget, Staff reviewed and updated estimates for revenues and expenditures over the next 10 years. The budget process also looked at challenges the City faces in the areas of insufficient staffing levels, lack of competitive pay and benefits, and backlog of unfunded Capital Project needs.

These challenges were highlighted in the adopted City Budget, and the City Manager noted the plans to bring a review of these items and potential options to the City Council in the Fall.

Accordingly, the purpose of tonight’s Study Session is to take a deeper and more strategic look at Pacifica’s long-term fiscal outlook. This report presents refinements to the updated 10-Year Financial Forecast to illustrate the magnitude and structure of the City’s fiscal sustainability challenges, and to discuss a range of potential revenue-generating initiatives, and funding strategies. These include both voter-approved revenue measures and non-tax options, including cost recovery and audits, economic development, housing and mixed-use development, and grants.

The goal is not only to close a projected budget gap, but to position Pacifica to thrive: to maintain core services, invest in infrastructure, and support an organization capable of meeting the expectations of its residents. The City Council’s discussion tonight will help define that shared vision for fiscal sustainability and guide the next steps, including which potential revenue measures should advance to further feasibility analysis and community engagement.

Given the size of the City’s projected financial shortfall starting in 2026-27 to maintain the current level of City Services, staff has not yet explored the added cost of restoring City Services that were cut in prior years or enhancing the current level of City services.

To achieve long-term structural sustainability at the level of service delivery and infrastructure investment envisioned by the community, Pacifica must look beyond short-term budget balancing and toward a more intentional and forward-looking fiscal strategy. This will require the City Council and the community to thoughtfully consider voter-approved revenue measures, expanded cost-recovery tools, new and re-development, and other innovative opportunities to ensure that essential public services, facilities, and capital assets can be maintained and strengthened over time.

BACKGROUND
SECTION 1: BUDGET CHALLENGES
A) GENERAL FUND BUDGET DEFICIT IN FUTURE YEARS ($3 Million to $6.6 Million/year)
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The City’s General Fund budget includes most of the day-to-day services the City provides. This includes Police, Fire, Community Development, Parks, Beaches & Recreation, Public Works, Finance and Administration. In 2024-25, the General Fund budget was balanced with a projected one-time surplus of $1.15 million, due to a one-time debt service payment relief from the Debt Service Fund. Current estimates show that surplus being reduced to $0.5 million, however this is an unaudited estimate, as the year is not finalized.

This fiscal year (2025-26), the Adopted General Fund Budget projected to end the year with a $42,109 positive balance. However, within the same week of the budget adoption, staff learned that the State decided to only fund 2/3 of the Vehicle License Fee In-lieu backfill payment owed to the City in FY 2025-26, which resulted in an immediate $0.7 million revenue reduction in the current year. Because the budget was adopted on the expectation of full payment of this backfill, we now face a budget deficit. However, Budget Strategy #2, approved by Council, allows for filling this gap in the current year with General Fund reserves, preserving planned service levels for the current fiscal year. This unexpected withholding exposes local governments, including Pacifica, to State fiscal risk shifting. As the County’s lawsuit argues, this breach threatens core services if not reversed. Further corrective action will absolutely be necessary and discussed during the next budget cycle if the State does not restore the missing 1/3 payment.

In future years (2026-27 through 2034-35) the General Fund is projected to have an annual deficit that ranges from $3 Million to $6.6 Million as shown in the table and charts shown below:
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Another issue raised by the Long-Term Financial Projection is the level of the City’s Unassigned General Fund Balance. The Government Finance Officers Association (GFOA) recommends that the minimum balance should equate to two months of General Fund expenditures, which is $8.8 million or 16.7% of the current budget.

This standard was met for the current 2025-26 fiscal year at adoption. If the structural budget deficit remained unaddressed in subsequent years, the unassigned General Fund reserves would continue to shrink and eventually the level of this balance would fall significantly below the recommended level as shown in the chart below and in Attachment A, which provides the detailed assumptions for the 10-Year financial model.

While the City does maintain a 10% reserve in the General Fund over this 10-year period in the model, it would be desirable to increase revenues so that the GFOA Unassigned General Fund Balance is also maintained. If the structural deficit remains unaddressed, the forecast shows that the City’s reserves could fall below the GFOA-recommended two months of operating expenditure reserves as early as FY2026-27, with full depletion of reserves projected by 10 Packet Pg. 143
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FY2028-29.

Maintaining sufficient reserves is necessary for fiscal and operational sustainability, which becomes especially critical in uncertain economic conditions. Therefore, staff always strives to go above the minimum recommendation for the General Fund undesignated fund balance. The prospect of it falling below the minimum threshold guidelines presents a significant challenge to maintaining the City’s operations and is not sustainable, which means significant cuts would likely be needed to balance the budget in future years.

B) GENERAL FUND REVENUES & STAFFING
In June 2024, the City completed a citywide staffing analysis conducted by Raftelis, a consulting firm specializing in local government fiscal and organizational studies (Attachment B). The study compared Pacifica to eight peer cities in Northern California based on population, services, and General Fund size.

At the time of the study, Pacifica employed 187.3 full-time equivalent (FTE) positions-placing it 17% below the peer average of 6.0 FTE per 1,000 residents, with 5.0 FTE per 1,000 residents.

Peer cities ranged from 151 FTE in Martinez to 285.5 FTE in Menlo Park, with General Fund revenues between $41.5 million (Martinez) and $76.1 million (Menlo Park). Pacifica’s General Fund revenue of $48.6 million was the second lowest in the group, exceeding only Martinez. 10 Packet Pg. 144
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Since the Raftelis study, Pacifica has worked diligently to strengthen its organizational capacity despite ongoing fiscal constraints, increasing total staffing to 201.75 FTE. This progress improved the City’s position from 17% below to 13.3% below the peer average.

To reach a staffing level comparable to the peer group, Pacifica would still require approximately 25 additional FTEs, representing a conservative estimate of about $3.8 million in ongoing General Fund costs (assuming an average fully burdened annual cost of $150,000 per position).

When comparing specifically to San Mateo County peers, Pacifica continues to operate well below regional benchmarks:
• 41% below Menlo Park
• 32.5% below Burlingame
• 23.5% below San Bruno
• 5.5% below Foster City
When interpreting these comparisons, it is important to recognize that staffing analyses are not direct one-to-one evaluations. Each city organizes its departments differently, contracts for various services, and operates under distinct service levels, community expectations, and geoeconomic conditions. For example, some peer cities manage utilities, recreation, or library services internally, while others rely on special districts or third-party providers.

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responsibilities or service delivery models. A more comprehensive organizational analysis, including examining the scope of services, departmental structure, and workload factors, would be necessary to fully analyze staffing comparisons across jurisdictions.

However, the data clearly demonstrate that Pacifica continues to provide a broad range of municipal services with fewer staff and lower revenues than its peers. As the City works to meet community expectations and maintain service quality, increasing organizational capacity, through both staffing and revenue growth, will be essential to long-term fiscal and organizational sustainability.

The City Council has made important progress over the past two rounds of labor negotiations by adopting a citywide framework to gradually bring employees to market, improving competitiveness in several classifications. However, significant gaps remain. It is difficult to estimate what it would take to bring all positions to market, as the labor market is fluid and better-resourced jurisdictions in our region drive regional salary benchmarks upward through their own negotiation practices. However, based on the current data, staff estimates approximately $4-5 million annually in additional General Fund resources would be needed to bring city job classifications to market.

C) CAPITAL IMPROVEMENT PROJECTS & UNFUNDED PROJECTS
Capital Improvement Program
The Capital Improvement Program (CIP) is the portion of the City Budget that identifies projects, assigns costs, and recommends schedules for design and construction of capital improvements over a five (5) year horizon. These are major projects that are outside the scope of the day-today City operations found in the City's Operating Budget, which are funded by special funds and the General Fund.

Capital improvements are projects that involve the purchase, improvement, or construction of major fixed assets and equipment, which are typically large in size, expensive, non-recurring and permanent. The Capital Improvement Program (CIP) consists of projects to maintain and enhance the City’s infrastructure of roadways, sidewalks, utilities, structures, and facilities for the benefit of the community.

The City’s capital improvement needs are a result of an aging infrastructure, significant deferred maintenance, and desired construction on new and existing facilities. The CIP identifies programs and projects needed to satisfy the City Council’s strategic goals and objectives to address the long-term obligations and investments in public infrastructure and the future needs of the community.

These projects are funded by sources including Gas Tax, Measure A and SB 1 (streets, sidewalks, and traffic improvements), Measure W, NPDES, Roy Davies Fund, Parks Beaches & Recreation Special Revenue, Disaster Accounting Fund, Wastewater Taxes and Fees (sewer system improvements and projects), and Grants and Insurance funds. When specialized funds, like Gas Tax and Wastewater fees cannot fully cover the cost of Capital Projects, the City transfers funds from the General Fund, if available, into the General Capital Improvement Fund to complete projects. This, however, is an on-going challenge given the City’s ongoing structural operating deficit, which limits the availability of General Fund resources for capital investment.

While no city has sufficient funding to meet the full breadth of its infrastructure needs, Pacifica faces particularly elevated capital pressures, driven by its coastal geography, exposure to erosion and sea level rise, and accelerated wear on facilities and utilities. In short, the baseline 10 Packet Pg. 146
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maintenance burden for Pacifica is higher than for many inland municipalities.

Unfunded Projects ($371.4 Million)
The annual review of the City's Capital Improvement Program focuses on projects that can be funded and constructed over the next five years. This section reviews the priority capital projects that are either partially or completely unfunded at this time.

With the assistance of the Public Works department, a list of these unfunded projects was compiled. There are 38 projects requiring $371.4 Million to complete. Seven of these projects each require $10 Million or more, with the largest project to address needed Street Improvements in Pacifica that totals $95 Million. This level of investment is urgently needed as Pacifica’s Pavement Condition Index (PCI) averages approximately 47, placing it among the lowest in the Bay Area and well below the statewide average of about 65 (although the PCI has improved in recent years due to the City’s strategic approach to its streets maintenance program). This reflects years of deferred maintenance and limited rehabilitation funding. Many of Pacifica’s streets are now rated in the “poor” or “very poor” range, requiring full reconstruction rather than resurfacing.

The $95 million estimate represents the cost to restore the roadway network to a state of good repair and prevent further deterioration that would otherwise increase long-term maintenance costs. Each year of deferred investment is estimated to increase project costs by 8-10% due to inflation and accelerated pavement degradation, restating the urgency for roadway rehabilitation.

A breakdown of the other unfunded projects category can be found in Attachment C.

Fleet and vehicle replacement costs are not included in the unfunded projects total. During the FY 2025-26 budget proceedings, fleet replacement requests totaled $1.2 million, which went unfunded in the current year. The total fleet replacement needs over the next five years are projected to reach $7 million.

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ability to allocate any General Fund dollars for capital needs. Without additional long-term funding strategies, deferred maintenance will continue to grow, increasing future costs and service impacts.

City Staff in Public Works, Finance and the City Manager's Office will continue to review these projects and look for grants, outside funding sources (Federal, State, Regional, County) to bring these projects forward. In Section 2 of this report, we will also discuss the option of a General Obligations Bond (G.O. Bond), which could be brought forward to the voters at a future General Election to cover the cost of some or all of these projects.

SECTION 2: REVENUES IN THRIVING SAN MATEO COUNTY COMMUNITIES Before exploring potential solutions such as new revenue measures or fiscal strategies for Pacifica’s future, it is helpful to take a look at what a thriving community looks like in practice. To do that, we can look at a few of Pacifica’s neighboring cities, like Burlingame, Menlo Park, and San Carlos, each of which has evolved over the past 10-15 years into a model of balanced economic growth, fiscal resilience, and community vitality.

While each city followed its own path and selected strategies tailored to its unique challenges and opportunities, they share common traits: steady growth in assessed property value, rising General Fund revenue per capita, and successful integration of housing, infrastructure, and economic investment. By understanding how these communities achieved long-term stability and vibrancy, Pacifica can draw lessons that inform its own fiscal sustainability strategy and future planning decisions.

The data below illustrates the fiscal trajectories that have emerged across San Mateo County over the past 15 years. While all four cities have grown, Pacifica’s General Fund revenue per capita and assessed-value growth have lagged behind its peers.

Pacifica’s General Fund revenue per capita roughly doubled (+102%), compared with increases as high as +127% (Burlingame). Similarly, Pacifica’s assessed property value grew by 95%, while Burlingame, San Carlos and Menlo Park, experienced gains of 157%, 162% and 193%, respectively.

City General Fund Revenue
Per Capita
Change (%) Secured Assessed Value
(AV)
Change
(%)
Pacifica $618 → $1,207 +95 % $4.36 B → $8.48 B +95 %
Menlo Park $1,073 → $2,197 +105 % $9.38 B → $27.46 B +193 % San Carlos $894 → $1,929 +116 % $6.48 B → $17.00 B +162 % Burlingame $1,252 → $2,838 +127 % $6.66 B → $17.13 B +157 % The growth in assessed property value among peer cities reflects the combined effects of housing production, commercial reinvestment, and population growth over the past 15 years.

According to the California Department of Finance (DOF) Housing Unit Estimates (2009-2025), Burlingame, Menlo Park, and San Carlos all experienced stronger population growth of approximately 4-5%, supported by housing and employment expansion, while Pacifica was the only city among the four where population declined (by 4.4%) over the same period.

Between 2010 and 2025:

Burlingame added approximately 976 housing units (+7%), Menlo Park added 1,190 units (+9%),
San Carlos added 390 units (+3%), while
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Pacifica added only 334 units (+2%).

These housing units contributed directly to growth in assessed property value, expanding each city’s tax base and stimulating secondary economic activity through construction and local spending. At the same time, all three peer cities achieved substantial commercial and mixeduse development, which accelerated their fiscal growth even more. ➢ Menlo Park leveraged major office and research campus redevelopment in the Bayfront area, anchored by tech and life-science employers. This expanded assessed property values and diversified the City’s economic base and increased daytime activity and visitor spending.
➢ Burlingame expanded its hospitality, retail, and life science sectors near the airport corridor, attracting research facilities, and also increasing TOT from business travel and conferences.
➢ San Carlos transformed its eastern industrial corridor into an Innovation Zone, attracting life-science and advanced-manufacturing companies along Industrial Road. By converting older, lower-value parcels into modern industrial and research facilities, the city significantly increased taxable property values and generated new business activity, including jobs, business travel, and supporting services.

These projects significantly raised commercial property assessments and broadened the local tax base. Cities that experienced steady residential and commercial growth also realized substantially higher assessed-value growth: +157% in Burlingame, +162% in San Carlos, and +193% in Menlo Park, as well as generated secondary fiscal benefits through higher sales tax, and TOT revenues.

By contrast, Pacifica’s property-value growth has been driven almost entirely by residential appreciation, with only 2% new housing units added over the last 15 years and practically no new commercial development. This helps explain why Pacifica’s assessed-value growth (+95%) has lagged behind nearby cities that have diversified development and reinvested in their local economies.

All these land-use strategies boosted local employment, increased commercial assessments, and generated stronger sales-tax performance. From FY 2010-11 to FY 2024-25, Burlingame’s sales-tax base grew by 52.8% or $3.9 million, driven by restaurants, hotels, and transportation, building and construction, and business industries. During the same period, San Carlos achieved a 70% or $4.2 million increase in total sales-tax revenue, primarily due to the Innovation Zone, Restaurants and Hotels and building and construction sectors. Pacifica’s sales-tax revenue grew by 42% or $0.7 million, reflecting steady consumer activity but limited commercial diversification.

The effect of these trends is evident not only in fiscal health but in the level of public services and quality of life each city can provide. Cities with stronger growth in assessed value, sales tax, and diversified revenues have been able to reinvest in city infrastructure, parks, and facilities, maintain competitive staffing, and expand programs that enhance daily quality of life.

Burlingame has consistently leveraged its strong revenue growth to deliver high-quality community facilities and public spaces, and invested approximately $52.3 million to build its new Community Center at Washington Park through a bond issuance (completed in 2022), a 38,000- square-foot LEED-Gold facility that serves as a year-round hub for recreation, arts, and public events. It is now advancing the Downtown Town Square and Waterfront Redevelopment projects, transforming underutilized parcels into vibrant public gathering areas with open space, trail connections, and waterfront amenities. The Parks and Recreation Department has also significantly expanded its year-round programming, Movies and Music in the Park, art and wellness classes, and senior recreation offerings.
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Menlo Park’s strong fiscal position has enabled major civic investments that extend well beyond core municipal services. In 2024, the city opened the Belle Haven Community Campus, a 37,000-square-foot facility combining a public library, senior and youth centers, an aquatics area, and a gymnasium. The city has also leveraged redevelopment opportunities, like the Stanford Research Institute (SRI) International campus, a major research and innovation hub now being redeveloped into a mixed-use district, along with Downtown and Bayfront projects that add housing, office space, and public amenities. These investments are supported by a strong Library and Community Services Department, which runs nine libraries, recreation centers, and community spaces across the city. Together, they show how Menlo Park’s financial stability translates into well-maintained places, active programs, and a strong sense of community.

San Carlos has turned sustained fiscal growth into visible, community-wide improvements. As mentioned above, through its East Side Innovation District Vision Plan, the city transformed older industrial parcels into a thriving hub for life-science and advanced-manufacturing companies, creating new jobs and significantly increasing property values, and adding roughly $11.6 million in development impact fees and over $4 million in other contributions, including upgrades to Old County Road, and a new traffic light.

Development agreements in this area have generated roughly $80 million in various community benefits from funding infrastructure upgrades to affordable housing, and public amenities. With this expanded revenue base, San Carlos has invested heavily in its parks, youth and senior programs, and popular community events like Hometown Days and Music in the Park.

These are just a few examples of how economic reinvestment directly supports an active, connected, and high-quality community life. While each community is different in their own ways, and Pacifica is unique and different from Menlo Park, San Carlos, and Burlingame, a takeaway from these comparisons is how assessed valuation growth helps sales tax growth and together this revenue growth funds increased services and capital improvements.

SECTION 3: PATHWAYS TOWARD FISCAL SUSTAINABILITY
Understanding what makes a community thrive provides important context for how Pacifica can approach its own fiscal sustainability. The qualities that define vibrant communities, like economic diversity, organizational capacity, strong infrastructure, and civic trust, cannot be achieved without a stable financial foundation. A city cannot maintain vibrant public spaces, invest in infrastructure, or attract and retain talent without stable and reliable resources to support those goals.

Unfortunately, for Pacifica, advancing toward long-term sustainability requires more than closing a short-term budget gap, it calls for a strategic framework that balances fiscal discipline with investment in the community’s future.

The next section begins to outline potential pathways toward achieving fiscal sustainability, which combines revenue strategies, organizational investments, economic opportunities, and housing/mixed-use development to form an integrated approach to financial health. This includes exploring potential voter-approved measures to stabilize recurring revenues; pursuing cost-recovery strategies and operational efficiencies; leveraging grants and partnerships; and investing in economic and housing development that expands the local tax base over time.

Each of these strategies plays a distinct role, but together they represent a single purpose: to ensure that Pacifica can continue providing high-quality services, maintaining vital infrastructure, and supporting a resilient, well-functioning organization capable of delivering on the community’s expectations.
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A) REVENUE STRATEGIES CURRENTLY UNDERWAY
Ongoing Revenue Generation & Enhancement
The City’s ongoing efforts to strengthen revenue generation are a critical component of its longterm fiscal strategy. Developing a 10-year financial projection of revenues and expenditures as part of the City’s budget process is a financial best-practice that reflects multiple initiatives already underway to diversify and enhance revenues, improve compliance, and attract outside funding. These efforts include pursuing grant opportunities for major capital projects and community programs by City departments and contract assistance from Townsend Public Affairs, conducting business license tax and cannabis compliance audits by the City Finance Department and HdL Companies, and helping small businesses in Pacifica through the City’s Economic Development program.

Development, Impact Fee, Cost Allocation Plan, and Citywide Fee Study A key part of Pacifica’s fiscal sustainability strategy involves ensuring that the City’s fees for services accurately reflect the cost of delivering these services. To that end, the Finance Department is currently advancing a comprehensive review of development-related and citywide fees, as a comprehensive Development Impact Fee (DIF) Study, Cost Allocation Plan, and Citywide Fee Study.

This work is particularly important given that Pacifica’s Development Impact Fees have not been comprehensively reviewed in decades, resulting in fees that no longer reflect the true costs of infrastructure expansion and public facility impacts generated by new growth. The upcoming study is expected to result in substantial adjustments to the City’s DIF structure, ensuring that new development “pays its way” by contributing proportionately to the roads, parks, utilities, and public safety facilities it necessitates.

It is hard to estimate the fiscal impact from this study. The City’s FY 2025-26 budget does not assume any new DIF revenue, as the study is still underway and the fiscal impact will depend on both the adopted fee schedule and the pace of new development. Once implemented, however, the revised fees could generate meaningful one-time revenue to support infrastructure needs and offset General Fund pressures.

To provide a sense of scale, one of the recent projects in Pacifica demonstrates the magnitude of potential revenues when new development occurs under updated fee structures. A good example is the 801 Fassler Avenue (Pacifica Heights) residential development, a 24-unit townhome project located along Fassler Avenue. This project demonstrates how new growth contributes directly to City infrastructure funding through Development Impact Fees and related charges. For this project, the City collected a total of $540,326 in one-time fees, distributed across multiple categories, including $333,313 in Development Impact Fees (Highway 1 Impact Fee, In-Lieu Park Dedication Fee, and Subdivision Drainage Fee), to help fund transportation improvements, parks and recreation facilities, and storm drainage infrastructure needed to serve new development.

While these revenues are one-time and project-specific, they demonstrate the scale of fiscal contribution that even modest development can provide toward the City’s capital infrastructure and service needs, which is separate and apart from the ongoing property tax and sales tax revenue that come into play once the homes are occupied. Importantly, these fees were based on the City’s outdated schedule, and the upcoming Development Impact Fee Study is expected to identify opportunities for greater cost recovery so future development may better offset its infrastructure impacts.
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Once completed, this comprehensive study will help the City better align its cost-recovery practices with actual service demands, reducing reliance on the General Fund to subsidize private development-related activities to ensure that growth contributes proportionately to the infrastructure and services it requires.

Separately from the Development Impact Fees, the current Long-term Financial Forecast conservatively includes only $100,000 in additional General Fund recovery through User Fees; however, the study results may identify a significantly greater opportunity for cost recovery, subject to City Council policy direction. Similar to the Development Impact Fees, the City’s User Fees and Cost Allocation Plan have not been comprehensively updated in more than a decade (with the last CAP based on the FY 2010-11 budget).

Economic Development Workplan
As part of the City’s broader fiscal sustainability strategy, staff developed a focused Economic and Housing Development Work Plan (Attachment G) to guide ongoing efforts to improve Pacifica’s economic base and attract long-term investment. This Workplan is consistent with the Council’s Strategic Plan, reflects a strategic approach to leveraging limited resources toward the City’s highest priorities, including revitalizing commercial areas, accelerating housing and mixed-use opportunities, and enhancing Pacifica’s visibility as both a destination and a place to live, work, and invest. The full, detailed Work Plan will be shared with Council in early 2026, and after the hiring of the new Economic and Housing Development Manager.

B) OPPORTUNITY SITES
8 Sites in Economic Opportunities Study (approx. $3.4 Million per year) In March 2023, the City Council received a presentation on the Economic Opportunities Study prepared by Kosmont Companies, which outlined 30 potential economic development strategies to strengthen Pacifica’s business economy (Economic Opportunities Study <https://www.cityofpacifica.org/home/showpublisheddocument/14938/638206138381770000>).

The study included 8 priority opportunity sites, which could provide the City with approximately $2.7 Million per year in additional revenues. In October 2025, Kosmont Companies prepared an updated fiscal benefit analysis for these sites to reflect current market conditions, construction costs, and the City’s voter-approved increases to sales tax (+0.5%) and Transient Occupancy Tax (+3%). Based on the revised assumptions, the combined annual fiscal benefit to the City is now estimated at approximately 3.4 million per year:
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Beach Blvd. Property (approx. $1,200,000 per year)
The City’s Economic Development team is working on a project to market the Beach Blvd. property, a 3.5-acre coastal site identified as Pacifica’s top redevelopment opportunity that could become a 100+ room hotel plus restaurants.

This mixed-use project would generate property tax, sales tax, and transient occupancy (hotel) tax revenues if such a property sale and hotel development were successful.

The concept is discussed in more detail in the Economic Opportunities Study mentioned earlier.

C) HOUSING DEVELOPMENT
Housing development is not only a matter of state compliance, but also is a cornerstone of local economic vitality. In California, the ability of cities to sustain vibrant economies is increasingly tied to how effectively they plan for, permit, and support housing development.

Each new home brings benefits across the local economy: construction jobs, demand for goods and services, additional property and sales tax revenue, and long-term community stability as residents live, work, and invest locally.

For cities like Pacifica, where geography and land constraints limit large-scale growth, strategic housing development, particularly in mixed-use areas, serves as one of the most effective tools to expand the economic base and address structural fiscal challenges. Housing supports population retention, workforce availability, and local spending, all of which are essential to the City’s long-term sustainability.

Despite a vibrant small business culture, Pacifica’s current economic structure inherently limits its revenue potential. Excluding large national chains and fuel stations, the majority of Pacifica’s top 100 sales tax producers, primarily local restaurants, cafes, and independent retailers, generate modest annual sales tax revenues. A typical popular restaurant contributes on average roughly $5,000 to $10,000 per year, while most independent retail stores generate on average about $4,000 to $6,000 annually.

With 93% of Pacifica’s parcels classified as residential and only 4% zoned for commercial use, most of which are occupied by small, locally owned businesses, the City’s current sales tax base is among the narrowest in San Mateo County.

By contrast, new housing (particularly market-rate or part of larger mixed-use projects) presents a far greater and more stable economic opportunity. These projects generate significant one-time revenues through development impact fees and building permits, and create ongoing property taxes once the homes are occupied. New residents, in turn, expand the local customer base, supporting neighborhood restaurants, shops, and service providers, and help increase the City’s small business economy.

The integration of Economic and Housing Development efforts positions Pacifica to pursue projects that strategically expand its revenue base, meet state housing mandates, and reinforce economic vitality in the community as further described below.

Housing Element & Regional Housing Needs Assessment
California’s Regional Housing Needs Allocation (RHNA) process has made housing production not only a fiscal and community goal but also a legal and planning requirement. The State mandates that every jurisdiction accommodate its fair share of the region’s projected housing 10 Packet Pg. 153
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demand across income levels.

Like all cities in California, Pacifica is required to adopt a Housing Element under State Law.

This includes planning for and establishing the regulatory framework to accommodate a specified number of market and below-market housing units.

Pacifica’s current RHNA target of 1,892 new housing units underscores both the scale of this challenge and the opportunity it presents: aligning housing policy with economic development strategy can generate meaningful fiscal returns while fulfilling the City’s commitment to a more inclusive and sustainable community.

If Pacifica were to achieve its RHNA target of 1,892 housing units across all income levels, the fiscal impact would be substantial. Using current citywide market averages, an assessed value of $1.3 million for market-rate units and $500,000 for below-market units, with a base property tax rate of 1% plus local assessments (and conservatively assume an effective rate of approx.

1.1%) and Pacifica’s share of 18.93%, the estimated property tax benefit is summarized below:
• 1,044 moderate-income and market-rate units × $1.3 Million = $1.36 Billion • 848 lower-income units × $650,000 = $0.55 Billion
• Total = $1.91 B assessed value × 1.1% = $21.26 Million total property tax × 18.93% City share = $4.0 Million per year
This represents new, recurring General Fund revenue that would significantly strengthen the City’s long-term fiscal position, providing resources to maintain essential services, support organizational capacity, and invest in infrastructure. Beyond direct fiscal returns, housing development also stimulates broader economic activity, from construction employment and local spending at restaurants, shops, and service providers further increasing tax and business activity within the City. The number of housing units is also a factor when potential retailers decide whether or not open a new store in a community.

Over time, new residents also help sustain and diversify Pacifica’s small business community, expand participation in local programs and recreation services, and support the overall vitality of neighborhoods and schools. The resulting increase in population, when strategically located in mixed-use and infill areas, can also increase market demand, improve the viability of transit, and retail uses, and other community amenities, creating a more complete and connected community fabric. It is also the reason that cities with successful downtowns often concentrate more housing units and density close to their downtown area, generating customers within walking distance to desired stores and services.

In the sections that follow, housing development is explored not simply as a compliance measure, but as a core economic driver and community-building strategy, a means to strengthen Pacifica’s financial foundation, support local businesses, and foster the kind of thriving, balanced community envisioned in the City’s long-term strategic goals.

Sea Bowl Residential Proposal (approx. $255,000 per year) Toll Brothers has purchased the 9.2-acre property that was the former Sea Bowl site in Pacifica. They propose to develop the site with the construction of 91 market rate for sale residential units and 22 below market rate accessory dwelling units for rent.

As part of their application to the City, Toll Brothers provided a Market Study and Fiscal Analysis of the Sea Bowl Residential Proposal prepared by Economic & Planning Systems (EPS), shown in Attachment D. In line with the Opportunity Sites analysis above, the EPS study estimates that this residential development would generate over $400,000 in annual 10 Packet Pg. 154
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revenue to the City and a net of $255,000 in annual revenue after deducting the cost of serving these new residential units as shown below:

Addressing a Common Misconception: Does Housing Strain City Finances? A common concern in many communities, including Pacifica, is that new housing development creates a fiscal burden by increasing demand for services such as police, fire, roads, parks, and utilities. While this perception is understandable, data from economic and fiscal impact analyses across California show that when housing is strategically planned, it contributes net positive fiscal and economic benefits to cities.

Several key points help clarify this dynamic:
• Modern housing projects pay their way. As demonstrated above, new development is assessed at current market values, generating substantially higher property tax revenue than older housing stock. Impact fees, development impact fees, and utility connection charges help offset infrastructure and service costs upfront. • Most City costs are fixed, not per-unit. The cost of maintaining police, fire, and administrative services does not rise linearly with population growth. In many cases, the marginal cost of adding new residents is significantly lower than the new revenues they generate.
• Strategic location matters. Infill and mixed-use projects, especially near existing infrastructure, make efficient use of City systems, minimizing long-term maintenance costs while supporting walkability and local business activity. • Housing supports economic circulation. New residents shop locally, eat locally, and use local services, directly supporting Pacifica’s small business community and sales tax base.
• The real fiscal risk lies in stagnation. When housing production lags behind demand, assessed value growth slows, commercial vitality declines, and existing infrastructure ages without sufficient reinvestment, creating greater long-term fiscal strain.

In short, well-planned housing development is not a financial liability, it is an investment.

Projects that are fiscally analyzed, supported by appropriate impact fees, and integrated with infrastructure planning tend to produce recurring General Fund surpluses and strengthen the City’s long-term financial capacity.

Recent research and fiscal presentations by Kosmont Companies at the League of California Cities Annual Conference reinforce this conclusion. As Kosmont notes, “Housing is not a loss 10 Packet Pg. 155
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leader-it’s a growth driver.” In today’s economic environment, housing creation directly supports local fiscal health by generating new tax revenues, increasing assessed property values, and sustaining neighborhood businesses. The Kosmont analysis shows that residential zoning and mixed-use redevelopment create strong residual land value and fiscal benefits, particularly when paired with financing tools such as Enhanced Infrastructure Financing Districts (EIFDs).

Kosmont further emphasizes that housing acts as a community economic catalyst, stimulating consumer demand for local services and retail, capturing household spending that might otherwise leave the city, and helping maintain a diverse and stable local economy. In this way, housing is not simply a regulatory requirement but a key pillar of long-term economic sustainability for California cities.

Community Facilities Districts (CFDs)
Community Facilities Districts (CFDs) are a financing mechanism that allows local government to levy a special tax option to raise funds for a variety of purposes, including infrastructure costs (such as streets, roads, sidewalks, and traffic signals), development impact fees, and operating and maintenance costs. They can also be used to fund the construction of schools and libraries and the purchase of open space.

In recent years, cities and counties in California are increasingly exploring the formation of CFDs to pay for operating costs and maintenance and improvement of infrastructure in new developments. While CFDs cannot cover all General Fund operating costs, they can be used to fund a number of General Fund and Capital Improvement expenses including police protection services, fire protection and suppression services, ambulance and paramedic services, lighting of parks, parkways, streets, traffic signals, roads and open space, flood and storm protection and water quality improvement services.

In summary, CFDs can further supplement the General Fund and Capital Project resources, helping finance infrastructure and service needs associated with new residential and commercial development and may be part of Pacifica’s financial strategy in the years ahead.

They also offer a way to “unstick” proposed developments in communities where new commercial and residential projects have been approved but have yet to move forward due to interest rate and other challenges in today’s economy.

D) POTENTIAL REVENUE MEASURES - GENERAL FUND
Potential Revenue Measures
Another area of opportunity to address the City’s General Fund projected deficits is to consider revenue measures that would be brought before Pacifica voters for consideration.

With the assistance of the City’s Business License Tax consultant, HdL Companies, and Financial Consulting from Regional Government Services (RGS), staff has identified several potential revenue sources that could be considered by the Council to address the City’s General Fund revenue shortfall in future years. They are summarized in the sections below.

Business License Tax ($88,570 to $490,070 per year)
The Business License Tax (BLT) is charged to anyone doing business in the City. It is a common revenue used to fund City services throughout California with over 450 of the 483 cities in California levying a BLT. The BLT recognizes the link between City services and infrastructure and the use of these by local businesses.

Pacifica requires all businesses operating within the City to obtain a business license and pay business license tax per section 3-1.101 of the City's Municipal Code. This revenue is locally 10 Packet Pg. 156
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controlled and funds essential services.

For the last three fiscal years, businesses in the City of Pacifica reported average total gross receipts of $832,000,000. This is calculated from businesses reporting and taxed on gross receipts and does not include businesses taxed on units or flat rates.

Currently, most businesses in Pacifica are charged between $0.35 and $0.77 per $1,000 of gross receipts. Revenue from the Business License Tax during the current fiscal year is $582,000.
2022 Business License Tax Study
In 2022, HdL Companies performed a detailed study of the City’s Business License Tax Ordinance and rate structure. The study included three potential models • Model 1 - 20% rate increase of the gross receipts portion of the rate (increased revenue = $88,570/year)
• Model 2 - $100 base rate + $1.50 per thousand of gross receipts over $25,000 (increased revenue = $208,680/year)
• Model 3 - $100 base rate + $2 to $3 per thousand of gross receipts based on business category. (increased revenue = $490,070/year).

Business License Tax Recommendation
The HdL study recommended proceeding with Model 3 if the City elects to update their Business License Tax ordinance. If there is Council interest in the Business License Tax revenue option, Staff recommends contracting with HdL to update Model 3 with current Business License Tax data and conducting voter research to inform Council’s consideration at a future Council meeting.

Utility User Tax ($2 Million to $3.1 Million per year)
Cities may impose a Utility User Tax (UUT) on utility services, including electricity, gas, water, sewer, solid waste, video (cable TV and streaming services), and telecommunications. Utility companies are responsible for collecting the taxes and remitting them to the City. Utility user tax rates throughout the State range from 1 % to 11%. Over 150 of the state’s 483 cities impose a Utility Users Tax.

Increases in the Utility Users Tax requires a majority vote at a General Election. Prior to 1986, increases in the UUT could be adopted by a majority vote of the City Council.

The City of Pacifica has a Utility User Tax (UUT) of 6.5% that is charged on electricity and gas. In the 2025-26 fiscal year, the UUT is estimated to generate $2.87 Million in revenues.

Here is a comparison of UUT rates in Pacifica and neighboring cities in San Mateo County. 2022 Utility Users Tax Study
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In 2022, HdL Companies performed a detailed study of the City’s Utility Users Tax Ordinance and rate structure.

This study noted that the City’s current UUT is collected on electricity and gas service. But it is not collected on telecommunications (phone), prepaid wireless, video (Cable TV and streaming services), and water which for several other neighboring cities are included in the UUT tax.

The two options reviewed in this study were:
• Model 1 - Lower the Pacifica UUT rate from 6.5% to 5% and add the categories of telecommunications (phone), prepaid wireless and water to the ordinance. (Increased revenue of $2 Million/year)
• Model 2 - Keep the Pacifica UUT rate at 6.5% and add the categories of telecommunications (phone), prepaid wireless and water to the ordinance. (Increased revenue of $3.1 Million/year)
Utility Users Tax Recommendation
If there is Council interest in the Utility Users Tax revenue option, Staff recommends contracting with HdL to update Model 1 and Model 2 with current Utility Users Tax data and conducting voter research to inform Council’s consideration at a future Council meeting.

Parcel Tax ($6 Million per year)
A Parcel Tax is a non-ad valorem, or non-value based, tax on parcels of property. It can either include a flat amount per parcel or building square footage or establish different rates based on land use. Unlike a Business License Tax or a Utility Users Tax which can be adopted by a majority vote at a General Election, a Parcel Tax can be adopted by a 2/3 vote at a General Election. A Parcel Tax must be a Special Tax meaning the revenue must be used only for specific purposes identified in the ballot measure language approved by voters. The specified purpose can include ongoing operations as well as capital projects.

This revenue source offers the highest potential yield of the General Fund revenue options evaluated, depending on the rate structure and voter-approved tax rate. 2025-26 San Mateo County Assessor parcel data was used to develop initial modeling that simulates different rate structures, each calibrated to generate approximately $6 million in net annual revenue (after an assumed 1.5% delinquency). Such a tax could be set in several different ways including:

Single Tax Rate per Parcel
This option uses a single tax rate per parcel regardless of land use type. Setting a single flat tax rate of $478.51 per parcel across all taxable properties generates approximately $6 million net annual revenue after delinquencies. A single flat tax rate represents a uniform tax burden, simple to administer but less reflective of parcel size or use. Single-family residence makes up approximately 86% of the parcels.

Tax Rate per Building Square Foot, Lot Size, or Units
This type of structure would use building square footage as the basis for both residential and commercial parcels, creating a direct link between parcel size and the amount of tax owed.

Larger structures-such as commercial centers or multi-family buildings-would contribute proportionally more than smaller single-family homes.

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contribute in proportion to the number of occupied units. While this approach may better align the tax burden with property scale and potential service demand, it introduces greater administrative complexity, as building and unit data must be verified and consistently maintained with County Assessor records.

Tax Rate by Land Use
This model would set the Parcel Tax by land use. The tax could be a flat rate or a per square foot rate for each land use. This approach might also set a flat rate for residential units and a per square foot rate for commercial parcels. For instance, setting a base flat tax rate for a single-family residential and base x 3 for all other types may still result in desired tax revenue, but shift the burden slightly off single-family parcels.

Similarly, a blended tax rate structure is also possible, such as keeping single-family parcels to a flat tax rate but utilizing lot size or units for commercial or multi-unit lots. This hybrid structure could allow for taxing underutilized vacant lots differently, while emphasizing commercial and industrial contributions.

These hybrid scenarios entail greater administrative complexity, as building and unit data must be verified and consistently maintained with County Assessor records.

Parcel Tax Recommendation
If there is Council interest in the Parcel Tax revenue option, staff recommends contracting with a firm with Parcel Tax expertise to analyze the parcels in Pacifica and conducting voter research to inform Council’s consideration at a future Council meeting. Although preliminary analysis shows that there are about 12,730 taxable parcels, deeper analysis would need to be completed to determine which parcels are exempt from the Parcel Tax and then calculate the potential Parcel Tax rates and revenue generated under all Parcel Tax scenarios described above.

Several other revenue measures were not considered or recommended at this time to address the City’s General Fund revenue shortfall, but they are discussed in Attachment EF

E) POTENTIAL REVENUE MEASURES - UNFUNDED CAPITAL PROJECTS As noted earlier, City staff will continue to look for opportunities to move the projects on the Unfunded Project List to funded. This includes aggressively seeking grants and external funding from Federal, State, Regional, and County sources.

General Obligation Bond
In recent years, some cities in the Bay Area have considered and, in some cases, successfully passed General Obligation Bonds (also known as G.O. Bonds) to finance large-scale capital improvements. Given the size of Pacifica’s current unfunded capital need of approximately $371 million, a G.O. Bond program will likely need to be part of the City’s long-term strategy as well.

General Obligation Bonds are bonds that are funded by levying a property tax that is based on the value of a property. This is typically done with a tax rate that is set at $X per $100,000 of assessed value. The tax is collected on an annual basis over the life of the bonds - typically a period of 25 to 30 years.

This revenue source cannot be used for operating revenues but can be used for infrastructure and Unfunded Capital Project needs. In Pacifica, the City could consider a G.O. Bond proposal to be considered by the voters at a future General Election. The amount of the G.O. Bond could be set at either the entire amount of the Unfunded Projects list or a portion of the projects on the list. This revenue requires 2/3 voter approval for the amount of the bond issue and use of the bond proceeds. G.O. Bonds issued by schools have a lower 55% voter approval threshold that 10 Packet Pg. 159
Pacifica City Council 22 November 10, 2025
was adopted by the voters in 2000.

Measure Q General Obligation Infrastructure Bond in San Bruno An example of how a General Obligation Bond could address the Infrastructure and Facilities needs in Pacifica is the recent passage of Measure Q in the City of San Bruno.

San Bruno identified almost $500 Million in Unfunded Capital Project needs. That City reviewed these needs and brought to the voters a General Obligation Bond of $102 Million to cover repairs to stormwater systems, upgrades to fire stations and equipment and repaving and fixing City streets.

Measure Q is financed by a tax on real property for a period of 15 years. The average tax rate required to be levied to pay the debt service on these bonds is $0.03 per $100 (or $30.00 per $100,000) of the assessed valuation of the property to be taxed. San Bruno voters passed this measure with a 73% Yes vote (2/3 required for passage).

Other Financing Alternatives
The attached memo from the City’s financial advisor also identifies alternative financing tools that may merit future consideration to address Pacifica’s Unfunded Capital Projects needs (Attachment F).
• Certificates of Participation (COPs) or lease-revenue bonds, which do not require voter approval and can fund capital improvements secured by City assets or lease payments. COPs are typically repaid from the City’s General Fund or other available revenues over a 20-30-year term. Based on current market conditions, an annual debt service payment of approximately $1 million could support about $17 million in COP financing, depending on interest rates and repayment structure. While this option would increase the City’s General Fund debt service, it would also allow the City to leverage funding for priority capital projects that cannot be financed through existing revenues. This mechanism could allow the City to fund priority capital projects in phases while maintaining flexibility to align future bond issuances with voter-approved measures or other long-term revenue strategies.
• Direct Bank Loans, which do not require voter approval and may be more cost-efficient for smaller projects (typically in the $5 Million to $7 Million range) due to lower issuance costs. The recent Pacifica Civic Center Renovation project is an example of a project in Pacifica that was funded in part by a Direct Bank Loan; and • Parcel Tax-Secured Bonds, which, while less common, could finance certain publicsafety or infrastructure investments and provide more flexibility for operational uses.

These bonds require two-thirds voter approval to sell the bonds and establish a new parcel tax to pay for the bond debt over a 15-to-30-year period.

If the City Council wishes to explore any of these options further, staff would work with the municipal advisor and bond counsel to develop preliminary tax-rate models, evaluate funding scenarios, and identify potential election timelines (G. O. Bond). This would allow the Council to weigh the fiscal benefits, voter support, and community priorities before deciding whether to pursue a bond measure.

SECTION 4: COUNCIL DIRECTION & NEXT STEPS

NEXT STEPS
At tonight’s meeting, the City Manager is seeking the Council’s direction regarding which 10 Packet Pg. 160
Pacifica City Council 23 November 10, 2025
potential revenue measures should be advanced to the next phase of feasibility assessment.

Once the City Manager has received that direction, work will continue advancing this matter for discussion with the Council and the community. That process will include the following steps:

1. Further work on assessing the feasibility of placing one or more revenue measures (Business License Tax, Utility Users Tax, Parcel Tax or General Obligation Bond) on the November 2026 ballot.

2. Retaining consultant expertise to assist the City with educational community outreach and public engagement and polling on the potential revenue measure.

3. Returning to the City Council with more detailed fiscal estimates and voter feasibility of the revenue option(s) that the City Council has selected.

4. Returning to the City Council for a decision on moving ahead with a revenue measure - by April 2026.

5. If the Council moves ahead with a revenue measure, developing the proposed ordinance(s) and ballot measures on a timeline to meet County ballot requirements - by June 2026.

Fiscal sustainability is not only about maintaining a balanced budget, but also about building capacity, trust, and opportunity so that Pacifica can continue to evolve as a strong, connected, and thriving coastal community. The decisions and discussions ahead will help define how the City positions itself to meet community expectations, protect essential services, and invest in the future this community envisions.

ALTERNATIVE ACTION:

The City Council may decide to direct staff to take alternative actions to address the projected City budget deficit starting in the 2026-27 fiscal year. These may include:

1. One or more of the alternatives and options described earlier in the Alternatives to Potential Revenue Measures attachment to this report.

2. The City Council may want to pursue additional revenue options to address needs beyond the current level of services described in the Restoring City Services, Enhancing City Services & Capital Project Needs section of the report.

RELATION TO CITY COUNCIL GOALS AND WORK PLAN:

This report and its recommendations support the City Council’s Strategic Goals and the City’s efforts towards Fiscal Sustainability.

FISCAL IMPACT:

Funding to continue work on the Revenue Options Study is included in the 2025-26 budget. As work commences to further develop any potential revenue measure for the November 2026 ballot, including retaining a firm to assist with education, outreach, and polling, staff will assess whether there is a need for additional funding for this work at that time.

ORIGINATED BY:

City Manager's Office
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Pacifica City Council 24 November 10, 2025
ATTACHMENT LIST:

Attachment A - Long-Term Financial Forecast & Assumptions (PDF) Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (PDF) Attachment C - Other Unfunded Projects List (PDF)
Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems (EPS) (PDF)
Attachment E – Other Revenue Measures Not Considered (PDF) Attachment F – Memo From The City’s Financial Advisor Capital Funding Options (PDF) Attachment G - ED Workplan Exec Sum Final (PDF)
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City of Pacifica
Long Term Financial Forecast Table and AssumptionsGeneral Fund revised September 2025 S1.3

REVENUE
2025-2026
Adopted Budget
2026-2027
Projected
2027-2028
Projected
2028-2029
Projected
2029-2030
Projected
2030-2031
Projected
2031-2032
Projected
2032-2033
Projected
2033-2034
Projected
2034-2035
Projected
Property Tax 17,466,700 17,990,700 $ 18,530,400 $ 19,086,300 $ 19,658,900 $ 20,248,700 $ 20,856,200 $ 21,481,900 $ 22,126,400 $ 22,790,200 $ Vehicle License Fees 5,410,902 4,974,173 4,623,976 5,953,841 6,856,277 7,876,674 7,781,402 8,772,534 10,301,412 9,761,571 Sales Tax 3,241,230 3,306,100 3,372,200 3,456,500 3,542,900 3,631,500 3,722,300 3,815,400 3,910,800 4,008,600 Measure Y 2,505,100 2,555,200 2,606,300 2,671,500 2,738,300 2,105,100 - - - - Transient Occupancy Tax 2,358,000 2,217,100 1,580,700 1,628,100 1,676,900 1,727,200 1,779,000 1,832,400 1,887,400 1,944,000 Utility Users Tax 2,870,000 2,927,400 2,985,900 3,045,600 3,106,500 3,168,600 3,232,000 3,296,600 3,362,500 3,429,800 Other Tax - Franchise Tax 1,352,550 1,386,400 1,421,100 1,456,600 1,493,000 1,530,300 1,568,600 1,607,800 1,648,000 1,689,200 Other Tax - Business License Tax 582,000 596,100 608,400 623,600 639,200 655,200 671,600 688,400 705,600 723,200 Other Tax - Cannabis Tax 800,000 816,000 832,300 853,100 874,400 896,300 918,700 941,700 965,200 989,300 Excess ERAF 3,860,000 3,917,900 3,976,700 4,036,400 4,096,900 4,158,400 4,220,800 4,284,100 4,348,400 4,413,600 Department/Program Revenues 11,260,824 11,621,100 11,890,200 12,306,400 12,737,100 13,182,900 13,644,200 14,121,700 14,615,900 15,127,500 Transfers In 1,478,800 1,593,800 1,625,700 1,658,200 1,691,400 1,725,200 1,759,700 1,794,900 1,830,800 1,867,400 Total Annual Revenue 53,186,106 $ 53,901,973 $ 54,053,876 $ 56,776,141 $ 59,111,777 $ 60,906,074 $ 60,154,502 $ 62,637,434 $ 65,702,412 $ 66,744,371 $ Revenue Year-to-Year 8.65% 2.85% 0.28% 5.04% 4.11% 3.04% -1.23% 4.13% 4.89% 1.59%

EXPENDITURES
2025-2026
Adopted Budget
2026-2027
Projected
2027-2028
Projected
2028-2029
Projected
2029-2030
Projected
2030-2031
Projected
2031-2032
Projected
2032-2033
Projected
2033-2034
Projected
2034-2035
Projected
Salaries & Benefits 36,454,015 38,463,323 41,768,715 42,864,923 44,150,871 45,475,397 46,839,659 48,244,848 49,692,194 51,182,960 Contract Services 8,719,867 8,894,300 9,072,200 9,253,600 9,438,700 9,627,500 9,820,100 10,016,500 10,216,800 10,421,100 Material/Supplies/Maintenance 4,501,536 4,569,100 4,637,600 4,707,200 4,777,800 4,849,500 4,922,200 4,996,000 5,070,900 5,147,000 Transfers Out - Debt Service 1,419,798 2,990,583 3,067,962 3,088,206 2,895,486 1,797,046 1,781,108 1,570,438 1,520,294 1,520,412 Transfers Out - Allocations 2,048,781 2,079,500 2,110,700 2,142,400 2,174,500 2,207,100 2,240,200 2,273,800 2,307,900 2,342,500Total annual operating Expenditures 53,143,997 $ 56,996,806 $ 60,657,177 $ 62,056,329 $ 63,437,356 $ 63,956,543 $ 65,603,266 $ 67,101,586 $ 68,808,088 $ 70,613,971 $ Transfers Out - Capital 50,000 - - - - - - - - -
Total General Fund Expenditures 53,193,997 $ 56,996,806 $ 60,657,177 $ 62,056,329 $ 63,437,356 $ 63,956,543 $ 65,603,266 $ 67,101,586 $ 68,808,088 $ 70,613,971 $ Exp Year-to-Year 10.06% 8.63% 6.42% 2.31% 2.23% 0.82% 2.57% 2.28% 2.54% 2.62% GF Structural Surplus/Deficit 42,109 $ (3,094,833) $ (6,603,301) $ (5,280,188) $ (4,325,579) $ (3,050,469) $ (5,448,764) $ (4,464,151) $ (3,105,676) $ (3,869,600) $ Surplus/Def as % of GF Revenues 0 -5.74% -12.22% -9.30% -7.32% -5.01% -9.06% -7.13% -4.73% -5.80% Beginning Fund Balance 19,309,076 19,251,960 16,157,128 9,553,827 4,273,638 (51,941) (3,102,410) (8,551,174) (13,015,326) (16,121,001) Total Revenues 53,186,106 53,901,973 54,053,876 56,776,141 59,111,777 60,906,074 60,154,502 62,637,434 65,702,412 66,744,371 Total Expenditures 53,193,997 56,996,806 60,657,177 62,056,329 63,437,356 63,956,543 65,603,266 67,101,586 68,808,088 70,613,971 Projected Ending Fund Balance 19,301,185 $ 16,157,128 $ 9,553,827 $ 4,273,638 $ (51,941) $ (3,102,410) $ (8,551,174) $ (13,015,326) $ (16,121,001) $ (19,990,602) $ Non-Spendable 8,287 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 Restricted 542,791 710,291 877,791 1,045,291 1,212,791 1,380,291 1,547,791 1,715,291 1,882,791 2,050,291 Assigned Reserves Policy Level of 10% of Expenditures 5,314,400 5,699,681 6,065,718 6,205,633 6,343,736 6,395,654 6,560,327 6,710,159 6,880,809 7,061,397 VLF Restriction Budget Strategy #2 2,300,000 - - - - - - - - - Facility Maintenance & Replacement 205,000 205,000 205,000 205,000 205,000 205,000 205,000 205,000 205,000 205,000 Compensated Absences 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 Child Care Reserve 488,591 488,591 488,591 488,591 488,591 488,591 488,591 488,591 488,591 488,591 Legal Reserves 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 Assigned Reserves 8,607,991 6,693,272 7,059,309 7,199,224 7,337,327 7,389,245 7,553,918 7,703,750 7,874,400 8,054,988 Non-Spendable, Restricted & Assigned 7,561,964 7,428,563 7,962,100 8,269,515 8,575,118 8,794,536 9,126,709 9,444,041 9,782,191 10,130,279 Unassigned Fund Balance 11,689,997 $ 8,728,565 $ 1,591,727 $ (3,995,876) $ (8,627,058) $ (11,896,946) $ (17,677,883) $ (22,459,366) $ (25,903,192) $ (30,120,881) $ Unassigned balance as % of Op. Exp. 21.98% 15.31% 2.62% -6.44% -13.60% -18.60% -26.95% -33.47% -37.65% -42.66% GFOA Recommended Reserves 8,857,333 9,499,468 10,109,530 10,342,722 10,572,893 10,659,424 10,933,878 11,183,598 11,468,015 11,768,995 Above/(Below) GFOA Guidelines 2,832,664 (770,903) (8,517,803) (14,338,598) (19,199,951) (22,556,370) (28,611,760) (33,642,964) (37,371,207) (41,889,876) $WWDFKPHQW$

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Packet Pg. 163 Attachment: Attachment A - Long-Term Financial Forecast & Assumptions (6078 : Revenue Generation Opportunities Study Session)

LONG-TERM FINANCIAL FORECAST (LTFF)

ASSUMPTIONS
The long-term financial model features a set of assumptions for revenues and expenditures based on conservative projections and information available at the time of publication. The forecast starts with the FY 2025-26 adopted budget, plus nine (9) forecasted years, for a ten (10) year financial forecast. This forecast is intended to be used to guide strategic budgeting and financial stability efforts, in accordance with Strategic Goal #1 – Enhance organizational and fiscal stability.

The following projections have been updated since the preliminary projections were presented at Budget Study Session 1, on April 14, 2025, during the FY 2025-26 budget cycle. Most notable updates for the current year include changes to ERAF, vehicle-in-lieu (VLF) backfill, transfer allocations, and salaries and benefits structure with the completion of labor negotiations, which will be further discussed in their respective sections below.

Revenue Assumptions

1. Property Tax is the City's biggest revenue category. Based on the current collection trends, consistent with the anticipated increases in the assessed market value and information provided by the county and HdL, the City’s property tax consultant, these revenues assume a 3% increase for the upcoming year and annually thereafter.

2. Vehicle License Fees (VLF) are tied to property-assessed value growth and a corresponding growth in tax revenue. Utilizing the estimates from San Mateo County, VLF assumes a 6.6% increase year over year, however the State has been unable to fulfill its payments in the year due, causing a shortfall each year. The shortfall becomes an estimate to be received two-years later, which is referenced as a backfill. The FY 2025-26 Adopted Budget includes the projected shortfall in the current year of $2.8 million, which will be due in FY 2028. The preliminary assumptions included the backfill to be received in the current year owed from FY 2024, in the amount of $2.3 million. After the Budget Study Session 1, Council approved Budget Strategy #2, that placed $2.3 million as assigned reserves in case the State doesn’t fulfill its obligation. This revenue is in constant jeopardy, depending on the State’s budget situation, and the City is continuing to monitor this issue and coordinate with the County of San Mateo on the matter.

3. Sales Tax assumes a modest increase of 2% for three years based on the most recent projections by HdL (the City’s Sales Tax consultant), followed by a 2.5% increase for the next seven years to consider the cyclical nature of these revenues driven by the local economy.

4. Measure Y is the new ½ % voter-approved Transaction and Use Tax that went into effect on April 1, 2023. The same projection method is applied to Measure Y as the other regular 1% of Bradley Burns Local Sales and Use Tax mentioned above, assuming 2% increase for FY 2026 through FY 2028 and 2.5% for the future years. Measure Y transactions and use tax measure is scheduled to sunset in 2031and the forecast reflects that revenue reduction.

5. Transient Occupancy Tax assumes a 2.5% increase for FY 2026 through FY 2028 and a normal inflation change of 3% thereafter for the subsequent seven years. Unfortunately, due to the Council’s recent ordinance changes related to short-term rental (STR) regulations, the forecast incorporates a reduction of almost $1.5 million over the next three years.

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Packet Pg. 164 Attachment: Attachment A - Long-Term Financial Forecast & Assumptions (6078 : Revenue Generation Opportunities Study Session)

6. Utility Users' Taxes (UUT) also assume a uniform 2.0% increase for all ten years, consistent with current collections trends.

7. Other Taxes include business license tax, cannabis operations tax, and franchise tax. A modest

2.5% increase is projected for these tax categories in future years. However, this category was also affected by the Council’s recent ordinance changes related to STR regulations and a slight decrease in business license activity was incorporated.

8. For FY 2025-26 the General Fund received 100% of the Excess Educational Revenue Augmentation Fund (ERAF) revenues projected. This is a one-time change from the Council Policy of allocating only $145K of ERAF to the General Fund and splitting the rest of the ERAF funding 50% each between the Disaster Accounting Fund (Fund 238) and the Housing In lieu Fund (Fund 224). For FY 2027 through FY 2035, the financial forecast keeps the current allocation to the General Fund in place. Council direction could change from year to year on this allocation methodology.

9. Departmental or Program Revenues include building, planning, and other permits, recreation revenues, grants, and rentals. In FY 2026 through FY 2028, this category includes a 2% increase, and a 3.5% increase thereafter based on the anticipated continuation of the current service activity level, plus inflationary adjustments to the Wastewater Fund administrative service fee and an anticipated increase in investment income. However, this category was also affected by the Council’s recent ordinance changes related to STR regulations and a slight decrease in STR permits was incorporated.

10. Operating Transfers in reflect a modest increase of 2% in the out years to account for the cost increases that drive this transfer relationship. This category mainly includes the cost recovery reimbursements from Fund 216 (NPDES), Fund 210 (Gas Tax) and Fund 209 (Measure A).

Expenditures Assumptions

1. Salaries and Benefits (S&B) The FY 2025-26 adopted budget includes a full-time equivalent count of 201.75 Citywide. FY 2026 through FY 2028 include some projections for changes to recently amended labor contracts, as well as a projected 5% in salary savings. During the budget process Council made a one-time policy decision to not allocate $214k to the pension trust for FY 2025-26. The remaining years include a 4.0% increase annually thereafter to account for increases related to cost of medical, dental, and vision benefits, PERS rates, and unfunded pension liability payments, merit, and other labor-related increases, with a 5% salary savings factor, and include contributions to both the pension and OPEB trusts.

2. Contractual Services category assumes an annual increase of 2.0% for most City contracts to account for inflation and regular CPI increases in existing contracts.

3. Materials, Supplies, and Maintenance category assumes a modest 1.5% increase each year to account for inflation.

4. Operating Transfers Out Debt Service category is projected to be in accordance with the City’s updated debt service schedule for each projected year. These are the major debt service obligations included in financing: 2016 COP, 2019 POB, 2021 Civic Center, and the new 2023 Fire Equipment Lease. A reduction of the debt payment starting with FY 2031 is related to the projected payoff for the Pension Obligation Bond.

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Packet Pg. 165 Attachment: Attachment A - Long-Term Financial Forecast & Assumptions (6078 : Revenue Generation Opportunities Study Session)

5. Operating Transfers Out Allocations category accounts for transfers to Internal Service Funds, including the Risk Management funds for General Liability and Worker's Compensation insurance premiums and Motor Pool funds to cover motor pool operating expenditures. Also included in this category is an ongoing allocation to the motor pool vehicle replacement fund in order build up fund balance for future fleet replacement. The forecast shows a modest 1.5% increase each year to account for rising insurance premiums.

6. Capital Transfers Out category contains the approved allocation of $50k for the FY 2025-26 budget year. The forecast does not incorporate ongoing contribution to capital in future years.

Council Policy / Other Factors
The LTFF does not include recessionary trends. Property Tax is the only General Fund revenue source that is somewhat recession-proof, unless a recession last over several years. Property Tax values are slow to adjust and typically lag in times of recession by at least 24 months. But nearly all the other GF revenue sources would be impacted by reductions in times of a recession whether mild or not.

The unfunded pension liability is also impacted by economic dips, such as during the COVID-19 downturn, and a smaller downturn from earlier this year due to political changes. These factors, since they are currently unknown are not factored into the LTFF model.

After the State of California adopted its budget, the VLF backfill owed to Pacifica was reduced by 1/3, a reduction of $775k. This has caused a budget deficit to be addressed through the mid-year process.

Budget Strategy #2, which was previously approved by Council, allows us to fill this gap in the current year with the General Fund reserves, preserving planned service levels for the current fiscal year. This revenue is in constant jeopardy, depending on the State’s budget situation, and the County of San Mateo filed a writ of mandate for the wrongfully withheld 1/3 of funds.

The City’s current Sales Tax rate is 9.875%, which is the maximum rate. Pacifica would need to seek special legislative authority to exceed the 2% cap in order to implement an additional (or larger) district tax.

Council Policy direction may change from budget cycle to budget cycle. For instance, the ERAF allocation methodology may be subject to frequent changes in the coming years depending on the budget balancing needs. Other items subject to Council Policy could be the contribution to the OPEB and Pension Trusts, salary savings usage, allocations to motor pool, and capital contributions.

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Packet Pg. 166 Attachment: Attachment A - Long-Term Financial Forecast & Assumptions (6078 : Revenue Generation Opportunities Study Session) 1 North Calle Cesar Chavez, Suite 102, Santa Barbara, CA 93103 www.raftelis.com
MEMO
To: Kevin Woodhouse, City of Pacifica, City Manager
Yulia Carter, Assistant City Manager
From: Nancy Hetrick, Raftelis, Project Director
Sam Lieberman, Project Manager
Polly Englot, Consultant
Date: June 3, 2024
Re: City of Pacifica Staffing Comparison
This memorandum summarizes citywide and departmental staffing comparisons between the City of Pacifica (City) and eight peer cities in Northern California. The peers were selected using objective criteria, with a focus on identifying cities with comparable features and services. After Pacifica approved the list of peers, our team gathered all publicly available staffing data for each city and aligned the full time equivalent (FTE) allocations with Pacifica’s departmental structures. Comparing total FTEs between peer cities provides a general understanding of how Pacifica stands relative to its peers. However, because of nuanced differences among these cities, this high-level evaluation has its limitations. More meaningful insights can be gained by examining staffing at the departmental level. We then normalized the data to ensure meaningful comparisons across jurisdictions by adjusting for differences in scale and population size. The results of our research and analysis are presented below. Key takeaways include:
• Pacifica’s staffing levels trend lower than its peers in terms of raw counts, averages, and normalized values. Pacifica’s total FTE per 1,000 residents is 17% lower than the peer average. • Pacifica has the fewest Administrative Services FTE per 100 employees among the peer group, largely due to having fewer finance staff.
• Pacifica has the fewest total Police and sworn Police FTE per 1,000 residents among the peer group. • Pacifica has the fewest Planning FTE per 1,000 residents among the peer group. • When the uniquely large childcare programs in Pacifica and Menlo Park are excluded from the comparison, Pacifica ranks in the bottom third for Parks, Beaches, and Recreation FTE per 10,000 residents.

While this analysis provides a comprehensive overview of staffing levels between the City of Pacifica and its peer cities, it is important to acknowledge certain limitations inherent in the high-level nature of this comparison. Variations in municipal services, departmental structures, and operational practices across different jurisdictions can introduce discrepancies that may affect the direct comparability of staffing data.

Additionally, differences in the scope and scale of services provided, local priorities, and financial constraints can impact staffing needs and allocations uniquely. As such, while the normalized ratios and averages offer valuable insights, they may not fully capture the nuanced operational realities and specific service demands of

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Packet Pg. 167 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 2 each city. Further, in-depth analysis at the departmental level may be necessary to draw more precise conclusions and inform specific staffing decisions.

Examining Pacifica’s Staffing Relative to Its Peers
The City of Pacifica is facing rising labor and benefit costs in conjunction with increasing service demands. In this context, Raftelis sought to compare Pacifica’s staffing levels with those in comparable municipal agencies, building upon prior comparative work performed by City staff, to support the City in proactively planning and preparing for the future. Pacifica's staffing levels and budget allocations are directly linked to the city's capacity to deliver services effectively. Adequate staffing ensures that departments can meet community needs and maintain high standards of service provision. Conversely, budget constraints can limit staffing capabilities, leading to potential reductions in service levels and efficiency. Therefore, aligning the city's financial resources with its staffing requirements is crucial for sustaining quality services and meeting the expectations of Pacifica's residents.

Previously, Pacifica analyzed comparisons using fiscal year FY 2018–2019 FTE counts from nine peer cities.

At a high level, Pacifica’s staff counts were lower than the peers’ average, except for in the area of Parks and Recreation. This project confirmed that, as of FY 2023–2024, many of the overall trends were similar. Our research and analysis built on the work completed by the City and provides additional equivalency to the staffing comparisons by aligning peer departments to match Pacifica, identifying key differences in each peer city’s budget, and normalizing the data across the varying city characteristics. As such, this project is not a direct comparison to the FY 2018–2019 analysis.

When comparing normalized staffing ratios—such as employees per customer—between Pacifica and its peers, Pacifica generally remained below the peer average as shown in Table 1. The most significant staffing discrepancies were observed in the Planning, Administrative Services, and Human Resources Departments.

More modest gaps appeared in other departments such as Police, Finance, and General Government. In contrast, staffing levels for Public Works per 1,000 residents matched the peer average, and Pacifica slightly exceeded the average in IT and Parks and Recreation per 100 FTEs and per 10,000 residents, respectively.

While these figures help to quantify staffing levels, it’s crucial to recognize potential differences in service levels, especially in Public Works and Parks, Beaches, and Recreation, which may exist despite efforts to align department functions with those of peer cities.

Table 1: Peer Average Staffing Comparisons
Comparison Pacifica
Peer
Average Difference
Parks, Beaches, and Recreation FTE per 10,000 Residents 9.0 8.8 0.2 Information Technology FTE per 100 Citywide FTE 2.1 2.0 0.1 Public Works FTE per 1,000 Residents 1.5 1.5 0.0
Police FTE per 1,000 Residents 1.1 1.7 -0.6
General Government FTE per 10,000 Residents 1.8 2.5 -0.7 Finance FTE per 100 Citywide FTE 3.2 5.4 -0.7
Total FTE per 1,000 Residents 5.0 6.0 -1.0
Human Resources FTE per 100 Citywide FTE 1.6 2.1 -2.5
Administrative Services FTE per 100 Citywide FTE 6.9 9.4 -2.5 Planning FTE per 10,000 Residents 2.9 5.5 -2.6

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Packet Pg. 168 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 3 Data Collection and Peer Selection
Raftelis began by establishing objective criteria to guide peer selection. This included city population, median household income, general fund budget, and total FTE staff. In addition, Raftelis ensured that potential peer organizations had similar service provision profiles, meaning they each provided a range of services directly to their communities, as opposed to contracting for services. A notable exception was Fire services, which in Pacifica are provided through a local joint powers authority agreement and were excluded from the analysis.

Raftelis gathered census data on 16 potential peer cities to determine comparability. Population size reflects the number of residents served by the city. Median household income is an important factor to understand the community’s ability to pay for services and the types of services a community may demand. The 16 cities included agencies used in the city’s salary surveys as well as those included in Pacifica’s 2019 staffing comparison and were chosen for their comparability to Pacifica across these factors. In our search for peer agencies, we reviewed several coastal communities to reflect Pacifica's unique coastal characteristics; however, none of these coastal communities matched Pacifica's population size closely enough to be considered suitable peers for this analysis.

The demographic and economic characteristics of the 16 cities were then cross-referenced with data from their most recently available adopted budgets, including General Fund resources, employee counts, and service types. Given variation across municipalities, such as for water and wastewater management, Raftelis looked for comparison opportunities at both citywide and department-specific levels. To illustrate, evaluating Pacifica’s public works staffing levels relative to peer cities required a more specific lens due to differing utility provision arrangements. At the same time, including public works FTE in the citywide staff count is important when evaluating administrative services levels because functions such as human resources, information technology, and finance support are needed across the entire organization.

The selection criteria and 16 potential peers were shared with the City, and with feedback, the final eight cities were selected. Table 2, shown in order of total FTE, lists the characteristic data gathered for the eight peer cities and Pacifica.

Table 2: Key Features of Pacifica and the Eight Peer Cities Jurisdiction
2023
Population1
Median Household
Income (2021)2 General Fund Budget Total FTE
Menlo Park 32,478 $179,913 $76,147,993 285.5
San Bruno 42,054 $117,747 $66,443,527 276.0
Rohnert Park 43,693 $82,808 $54,508,924 241.0
Burlingame 30,136 $150,182 $74,518,635 228.7
Campbell 42,713 $130,171 $69,110,503 210.5
Morgan Hill 45,892 $139,161 $54,586,429 200.2
Foster City 32,703 $173,721 $58,671,232 188.9
Pacifica 37,082 $138,548 $48,607,256 187.3
Martinez 36,543 $114,390 $41,572,174 151.0
1 Population as of January 1, 2023. Data from the California Department of Finance 2 Source: United States Census
Pacifica’s population and median household income rank near the middle, but the City’s General Fund budget—which represents the agency’s primary operating fund and reflects capacity to allocate resources to various services—is the second smallest. A variety of factors could drive the budget difference, but the

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Packet Pg. 169 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 4 important consideration for this analysis is that service provision opportunities and staffing levels often mirror financial resources.

Comparative Analysis
Examining the total budget and FTE count offers some insight into how Pacifica compares to the peer cities but calculating the staffing per 1,000 residents normalizes the comparison across population sizes. Figure 1 details this comparison. Pacifica has 5.0 FTE per 1,000 residents, which is less than the peer average of 6.0.

Figure 1: Total FTE per 1,000 Residents
Comparing total FTE between peer cities contributes to a high-level understanding of Pacifica in relation to its peers. However, due to nuanced differences between the peers, it is important to remember that this level of evaluation is somewhat limited. More useful comparisons are possible when looking at the department level.

The first step of conducting the department level staffing comparison between Pacifica and the peer agencies was to delineate the organizational structure and functional responsibilities of each department. Using Pacifica as the benchmark, we examined the budgets of each peer agency to identify similarities and differences across service areas.

Next, we compiled FTE counts for each department and division in Pacifica, seeking alignment with available information from peer cities. This framework served as a reference for charting FTE counts across the peer agencies. Adjustments were made to align peer staff distributions with Pacifica’s departmental structure as needed.

Table 3 contains raw staff counts for the nine cities, organized by function to reflect Pacifica’s department structure. We verified the counts, including details on how staff were re-allocated for comparability (as shown in the table notes), with the peer cities.

7.6 4.9

5.8 4.1

8.8 4.4

5.5 6.6

5.0 Peer Average

6.0 0.0

2.0 4.0

6.0 8.0

10.0 Burlingame Campbell Foster City Martinez Menlo Park Morgan Hill Rohnert Park
San Bruno Pacifica

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Packet Pg. 170 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 5 Table 3: Peer Agency Department Staffing
Jurisdiction
General
Government1
Administrative
Services2 Police Planning5
Public
Works6
Parks, Beaches
and Recreation8
Burlingame 9 16.73 60 18 68 34
Campbell 9 17 74.1 17.6 53.97 38.8
Foster City 9.8 18 55.5 17 48 40.7
Martinez 4 18 53 14 56 6
Menlo Park 14 27.8 69.5 35 72.3 52.8
Morgan Hill 12.3 17.5 72 26.1 57.8 14.7
Rohnert Park 9 28 944 22 49 11
San Bruno 8 22 70 14 52.7 28.6
Pacifica 6.5 13 39.5 10.8 57 33.5
Peer Average 9.4 20.6 68.5 20.5 57.2 28.3
1 Includes City Manager's Office, City Clerk, City Attorney, Economic Development. Some cities include Councilmembers in FTE counts but, because each has five, they are not included here.
2 Includes HR, Finance, and IT functions. To align with the structure in Pacifica, the staffing of these functions has been reallocated to the category of Administrative Services where needed.
3 Burlingame is the only city that fully contracts out IT services. 4Rohnert Park groups Police and Fire in a single FTE count. Two discernible Fire FTE were removed from this total, but others may remain. 5 Includes Building and Planning functions. Some cities call this department Community Development, Development Services, or something else similar. 6 For utilities, Pacifica directly manages wastewater, but other cities manage varying combinations of water, sewer, waste, etc. Non-comparable FTE were removed, when possible (Morgan Hill, Rohnert Park, San Bruno), but remain in totals when differentiation was not clear (Burlingame, Foster City, Martinez, Menlo Park).
7 Campbell administers utilities through JPA agreements. 8 Includes community spaces and programming for youth through seniors, with some variations. Designated Library FTE are removed for comparability (Burlingame, Menlo Park, San Bruno).

The FTE counts in Table 3 may not sum to equal totals relative to Table 2 because staff performing noncomparable services—such as Fire or Library, which Pacifica fulfills through regional agreements—were removed from department counts whenever possible. Similarly, certain functional or departmental totals will appear different in the associated cities’ budget documents; for example, all nine cities have five city Councilmembers, but they are not reflected in the table even if a particular city includes them in their general government FTE count. Menlo Park is somewhat of an outlier in staffing among this group of peers for most functions except Police. For Parks, Beaches, and Recreation, Martinez is a clear outlier.

While FTE counts were re-allocated or removed to align to Pacifica, a number of key differences impacting comparability remain:
• Pacifica, along with five other cities, contracts for City Attorney services. • Burlingame, Campbell, and Morgan Hill have in-house City Attorney staff. • Burlingame, Foster City, and Martinez include economic development functions within their planning departments.
• A specific FTE for economic development was not identifiable for Martinez, so only the FTE from Burlingame and Foster City are included in their general government totals. • Menlo Park contracts for economic development services, and thus, their general government total of 14 FTE does not include this function.
• Public Works service provision varies significantly across peer cities: a prior third-party study found that Pacifica’s department has more functions than its peers, but for utilities the City manages only

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Packet Pg. 171 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 6 wastewater, while other cities deliver varying combinations of water, wastewater, sewer, and stormwater services.
• Public Works and Parks, Beaches, and Recreation departments across the peer organizations operate with varying topography and environmental features, which can further differentiate infrastructure needs and services.
• Pacifica’s Parks, Beaches, and Recreation department’s FTE total was above the peer average, which is likely influenced by two factors: it is one of two cities examined that have a robust grant-funded childcare program, with over 20 FTE in each, and it is the only city with coast and beach areas.

Department by Department Comparisons
The following charts show the staffing comparisons by department. We have normalized the data where appropriate using per capita, often shown as per 10,000 population, for departments that provide services to residents. For departments that serve internal city functions, like Human Resources and Information Technology, we normalized the data using per 100 FTE to reflect the ratio of services to internal city customers. Pacifica’s staffing levels trend lower than its peers in terms of raw counts, averages, and normalized values. The variance is more significant for the raw numbers and averages, but the fact that Pacifica also trends lower on the normalized comparisons underscores the City’s particular resources-toservices ratio.

General Government
General Government includes staffing associated with the City Manager’s office, City Clerk, City Attorney, and Economic Development functions. The staffing comparison has been aligned to the structure utilized in Pacifica.

Figure 2 shows the staffing comparison for General Government, which in Pacifica includes the City Manager’s Office, City Clerk, and Economic Development. It should be noted that Pacifica, Foster City, Martinez, Menlo Park, Rohnert Park, and San Bruno all contract out for City Attorney services while Burlingame, Campbell, and Morgan Hill have this function staffed in-house. For this exercise we have included City Attorney staffing of the peer agencies in the General Government total. The peer average of General Government department staff per 10,000 residents is 2.5 FTE while Pacifica’s ratio is 1.8 FTE, which is 0.7 FTE lower than the average. While this fractional difference might seem minor, it is important to note that many cities employ part-time or cross-departmental roles in General Government functions. Given the increasing complexity of service administration with each additional 10,000 residents, Pacifica could significantly benefit from an equivalent of 28 more hours per week (70% of 1.0 FTE) of direct leadership or support each week.

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Packet Pg. 172 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 7 Figure 2: General Government FTE per 10,000 Residents An additional consideration is the capacity of each City Manager’s second-in-command. Pacifica and the peer cities all have an Assistant City Manager, and Menlo Park also has a Deputy City Manager. For the purposes of our analysis these positions were reflected as a part of General Government. The roles commonly include interdepartmental oversight duties, but the staffing and sizes of the reporting departments can vary, which is discussed further below. As such, another comparative approach is to examine the Assistant City Manager (ACM) functions. In Pacifica, the ACM is budgeted across six cost centers, which include citywide support/oversight, supervising Economic Development, and acting as the Administrative Services Director.

The functional responsibilities of ACMs across cities clearly vary. As far as public documents indicate, though, Pacifica is the only city where the ACM has both citywide oversight and a direct departmental leadership role.

Administrative Services
Administrative Services includes the Human Resources (HR), Finance, and Information Technology (IT) functions. In Pacifica, these functions report to the Assistant City Manager. Figure 3 shows Administrative Services FTE per 100 citywide FTE using the total citywide staffing numbers because the department’s services are provided internally to all city staff. Accordingly, the number of staff relative to the total of city employees is a particularly meaningful ratio.

3.0 2.1

3.0 1.1

4.3 2.7

2.1 1.9 1.8
Peer Average

2.5 0.0

1.0 2.0

3.0 4.0

5.0 Burlingame Campbell Foster City Martinez Menlo ParkMorgan Hill Rohnert Park
San Bruno Pacifica

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Packet Pg. 173 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 8 Figure 3: Administrative Services FTE per 100 Citywide FTE Pacifica has 6.9 Administrative Services FTE per 100 citywide employees. This is lower than the peer average of 9.4 Administrative Services FTE for the same number of employees and the fewest among all peer agencies. Burlingame has the next lowest ratio after Pacifica, but it is also the only city among the peers that contracts for IT support services. Following Pacifica’s budget alignment, all ACM roles are included in the General Government staff calculations. Even with that adjustment Pacifica also fell below the normalized average for Administrative Services.

Figures 4 through 6 show the staffing by function for the Administrative Services departments. These values are normalized per 100 FTE for each city. Figure 4 highlights that Pacifica’s 2.1 IT FTE per 100 citywide FTE is slightly above the peer average. The city has the same number (not-normalized) of staff as the peerwide median of 4, while Menlo Park is an outlier with 10 IT staff. More detailed information about specific IT services and capabilities would be needed to understand this discrepancy. It is interesting that despite varying populations, budgets, and employee counts, five of the seven cities with direct IT service provision have 4 IT FTE. Burlingame contracts for IT support and is therefore excluded from the graph. Aside from Burlingame and Morgan Hill, which has an IT Director leading the function, Pacifica and the other six peer cities all have an IT Manager.

7.3 8.1

9.5 11.9

9.7 8.7

11.6 8.0

6.9 Peer Average

9.4 0.0

2.0 4.0

6.0 8.0

10.0 12.0

14.0 Burlingame Campbell Foster City Martinez Menlo Park Morgan Hill Rohnert Park
San Bruno Pacifica

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Packet Pg. 174 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 9 Figure 4: Information Technology FTE per 100 Citywide FTE Figure 5 illustrates the total number of Human Resources FTE per citywide FTE in each city. As of the FY 2023–2024 budget year, Pacifica had 1.6 Human Resources FTE per 100 city employees, which is below the peer average of 2.1. Pacifica and three of the other peers—Campbell, Martinez, and Menlo Park—have Managers as their most senior HR professional, while Burlingame, Foster City, Morgan Hill, Rohnert Park, and San Bruno have a director leading the function.

Figure 5: Human Resources FTE per 100 Citywide FTE

1.9 2.1

1.3 3.5

2.0 1.7 1.8

2.1 Peer Average

2.0 -

1.0 2.0

3.0 4.0
Campbell Foster City Martinez Menlo Park Morgan Hill Rohnert Park
San Bruno Pacifica

1.7 1.4

2.6 2.6

1.8 1.5

3.3 1.6 1.6
Peer Average

2.1 -

1.0 2.0

3.0 4.0
Burlingame Campbell Foster City Martinez Menlo Park Morgan HillRohnert ParkSan Bruno Pacifica

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Packet Pg. 175 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 10 For the ratio of Finance FTE per 100 citywide FTE in each city, the chart below shows that Pacifica again has fewer FTE than the peer average, with 3.2 relative to the peer average of 5.4. A consideration for Burlingame is that the Finance staff manage the city’s IT hardware and software, and act as a liaison with the external IT support, however, city leadership confirmed that their roles are primarily serving Finance functions. Pacifica uniquely has a Deputy Director of Finance as the senior finance-specific role, reporting to the ACM. For the peer cities, Menlo Park has a Finance and Budget Manager, while the other seven cities all use a Finance Director.

Figure 6: Finance FTE per 100 Citywide FTE
Police
As shown Figure 7, Pacifica has 1.1 Police FTE for every 1,000 residents, which is lower than the peer average of 1.8 FTE per 1,000 residents. Further research into district areas and crime rates would be helpful in understanding the context of service needs relative to staffing, but the normalization removes variation due to population size. An additional metric that is helpful for understanding the staffing environment is a comparison of sworn Police FTE; Figures 8 and 9 show that Pacifica’s raw count and normalized sworn FTE per 1,000 residents both fall below the peer averages. Rohnert Park is excluded because they group together their Police and Fire staff in a Public Safety Department and separating the FTE using publicly available data was not feasible.

5.6 4.8 4.8

7.3 4.5

5.2 6.6

4.5 3.2
Peer Average

5.4 -

2.0 4.0

6.0 8.0
Burlingame Campbell Foster City Martinez Menlo ParkMorgan Hill Rohnert Park
San Bruno Pacifica

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Packet Pg. 176 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 11 Figure 7: Police FTE per 1,000 Residents
Figure 8: Sworn and Non-Sworn Police FTE

2.0 1.7 1.7

1.5 2.1

1.6 1.7

1.1 Peer Average

1.7 0.0

0.5 1.0

1.5 2.0

2.5 Burlingame Campbell Foster City Martinez Menlo Park Morgan Hill San Bruno Pacifica 40 48.0

43.0 42.0

47.0 43.0

51.0 33.0
20 24.0

12.0 13.0

22.5 29.0

19.0 6.5
Sworn
Peer Average

44.9 Non-Sworn
Peer Average

19.9 0
10 20
30 40
50 60
Burlingame Campbell Foster City Martinez Menlo Park Morgan Hill San Bruno Pacifica Sworn
Non-Sworn

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Packet Pg. 177 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 12 Figure 9: Sworn Police FTE per 1,000 Residents
Planning
The Planning departments across the cities often had different titles, such as Community Development or Development Services, but the functions were very similar throughout. For Pacifica, the department comprises the building, planning, and code enforcement functions. Each of the other cities’ equivalent departments performed the same roles, however, Campbell, Menlo Park, Morgan Hill, and Rohnert Park also provide housing assistance functions in this functional area. Only Menlo Park distinguishes which Planning FTE work on housing, and this level of detail was not listed by other peers, so that function is not removed here. Similarly, specific comparisons among the common Planning functions—building, planning, code enforcement—were not supported by the publicly available information. Figure 10 depicts the ratio of Planning department FTE per 10,000 residents. Pacifica has 2.9 FTE per 10,000 residents, which is below the peer average of 5.5 FTE and the fewest among all peer agencies.

In addition, the Planning department in Pacifica operates within a uniquely complex regulatory environment due to the city's coastal location. As a coastal community, Pacifica must navigate the additional layers of oversight from the Coastal Commission, which imposes more stringent regulations and permitting requirements. This necessitates a more robust planning framework to ensure compliance with both state and local coastal management policies, thereby adding complexity to the department's workload and staffing needs. When conducting further analysis in this area it may behoove the City to research agencies with a similar makeup, such as Pismo Beach, which wasn’t appropriate as a citywide staffing comparison peer because of its size but may provide valuable insights at the departmental level.

1.3 1.1

1.3 1.1

1.4 0.9

1.2 0.9
Peer Average

1.2 0.0

0.2 0.4

0.6 0.8

1.0 1.2

1.4 1.6
Burlingame Campbell Foster City Martinez Menlo Park Morgan Hill San Bruno Pacifica

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Packet Pg. 178 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 13 Figure 10: Planning FTE per 10,000 Residents
Public Works
As mentioned earlier, Public Works is a difficult department to compare across peers, primarily because of the variation in utilities provided. Further research could compare this department with peer cities dependent on similar utility services and other relevant demands on the Public Works department; however, to do so would require additional work beyond the scope of this review (i.e., determining jurisdictions with aligned functions and service demands and then surveying those jurisdictions for specific staffing detail).

That being said, using the current peer group, Pacifica has 1.5 Public Works FTE per 1,000 residents, which is equal to the peer average (Figure 11). This comparison should be qualified, however, based on the types of utilities that each city provides. Table 4 below captures the utilities administered by each city’s Public Works department. Although Campbell, Menlo Park, and San Bruno do not administer any utilities, their FTE ratio does not seem to vary as might be expected from Pacifica.

Table 4: Utilities Administered by Public Works in Pacifica and the Eight Peer Cities City Wastewater Water Sewer
Recycled
Water
Solid
Waste None
Burlingame ✓ ✓
Campbell ✓
Foster City1 ✓ ✓
Martinez ✓ ✓
Menlo Park ✓
Morgan Hill ✓ ✓
Rohnert Park ✓ ✓ ✓
San Bruno ✓
Pacifica ✓
1 Foster City also has Public Works FTE administering Levee, Lagoon, and Stormwater, as well as Recycling.

6.0 4.1

5.2 3.8

10.8 5.7 5.0

3.3 2.9
Peer Average

5.5 0.0

2.0 4.0

6.0 8.0

10.0 12.0
Burlingame Campbell Foster City Martinez Menlo Park Morgan Hill Rohnert Park
San Bruno Pacifica

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Packet Pg. 179 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 14 A previous third-party study of the Public Works department identified that, as of Fiscal Year 2018-2019, Pacifica had more functions housed in Public Works than its peers. When analyzing Public Works staffing levels, it is essential to quantify the department based on the range of utilities and functions each agency provides. Due to the complexity and variability in services such as street maintenance, park maintenance, water, wastewater, sewer, and stormwater management, and other functions that may be housed in a Public Works department. While not a part of the scope of this project, a more detailed and tailored analysis is necessary to accurately compare Public Works departments across different cities.

Three peer cities that overlap between the prior and current analysis—Burlingame, Foster City, and Morgan Hill—publicly share information that mirrors the format of the prior study sources. Without new in-depth analysis, comparing information from the prior study to FY 2023-2024 reveals that from FY 2019 to FY 2024:
• Burlingame grew their Engineering team 20% by adding an Engineering Technician and a Senior Civil Engineer.
• Foster City’s Engineering team grew 50%, with staff reporting to the Engineering Manager shifting from four Junior-Associate Engineers and one Senior Engineering Technician (five FTE) to three Senior Engineers, three Associate/Assistant Engineers, and two Senior Engineering Technicians (six FTE, with higher qualifications).
• San Bruno grew its Engineering team 45% from 11 to 16 FTE, added one street and two storms maintenance workers, added one administrative resource, and grew their fleet and facilities staffing to a full team within the department.
• Meanwhile, Pacifica’s department staffing only increased 4%, with the Field Services team adding two FTE and the Engineering team decreasing from six to five FTE.

Figure 11 presents the normalized staffing comparison for the department; however, it’s important to acknowledge the considerations outlined above, and while it appears that Public Works staffing in Pacifica is aligned with the peer average, that data is not conclusive without a more detailed analysis.

Figure 11: Public Works FTE per 1,000 Residents

2.3 1.3

1.5 1.5

2.2 1.3

1.1 1.3

1.5 Peer
Average

1.5 0.0

0.5 1.0

1.5 2.0

2.5 Burlingame Campbell Foster City Martinez Menlo Park Morgan Hill Rohnert Park
San Bruno Pacifica

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Packet Pg. 180 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 15 Parks, Recreation and Beaches
Parks and Recreation poses another challenging comparison. As noted earlier, Pacifica is the only city among the peers that has beaches within their service portfolio. In addition, 21 of Pacifica’s 33.5 FTE in this department support a grant-funded childcare services division. These differences likely explain why Pacifica has 9.0 FTE per 10,000 residents, which is higher than the peer average of 8.8 FTE per 10,000 (Figure 12).

The only other peer city with a comparable childcare program is Menlo Park, which has 24.25 FTEs for their pre-school childcare division. Menlo Park has an additional 28.5 FTE for their other recreation functions, while Pacifica has 11. When the childcare programs are removed from FTE counts for these two cities, the peer average falls to 7.5 FTE and Pacifica has 4.1 fewer FTE per 10,000 residents, as shown in Figure 13.

Martinez, which has a very low number of Parks and Recreation staff relative to the peer cities, contracts for the management of their marina, which was not included in this comparison.

Figure 12: Parks, Beaches, and Recreation FTE per 10,000 Residents (all FTE)

11.3 9.1

12.4 16.2

3.2 2.5

6.8 9.0
Peer Average

8.8 0.0

2.0 4.0

6.0 8.0

10.0 12.0

14.0 16.0

18.0 Burlingame Campbell Foster City Menlo Park Morgan Hill Rohnert Park
San Bruno Pacifica

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Packet Pg. 181 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 16 Figure 13: Parks, Beaches, and Recreation FTE per 10,000 Residents (excluding childcare program FTEs)
Conclusion
This analysis delivers a high-level city staffing comparison to Pacifica with sufficient detail to draw meaningful comparisons. After vetting potential peers with City staff, we mapped out peer city department functions to align them with Pacifica’s structure. Next, we used the map to create a comprehensive tracker for the department alignment, which facilitated data verification with peer agencies. While normalizing the peer comparisons based on their customer base helps reduce variances due to differing client bases across the region, certain comparisons—particularly for Public Works and Parks and Recreation—remain challenging due to service-provision variances.

Overall, our research reveals that Pacifica operates with, on average, fewer FTE than peer agencies. While there are pockets of parity, the City has managed to deliver similar public services with less support. On the upside, our analysis found that Pacifica had a nearly equal ratio of 0.1 above the peer average for IT staffing and Pacifica has a ratio 0.2 FTE higher than the normalized peer average of 8.8 for Parks, Beaches, and Recreation. When uniquely large childcare programs in Pacifica and Menlo Park are excluded from this departmental comparison, however, Pacifica had around 4 fewer FTE than the average 7.5 FTE per 10,000 residents among peer cities.

In addition, we found that Pacifica had an equal ratio for Public Works FTE per 1,000 residents; however, the services and functions within a Public Works department, such as utilities and maintenance, vary significantly among cities. Other factors, such as how services are provided (e.g., park maintenance being in Parks or Public Works), the geographical size of the jurisdiction (miles of sewer, streets, sidewalks, trails), infrastructure conditions, and the coastal climate's harsh influence on infrastructure, also impact staffing needs and should be considered for a more accurate comparison.

Pacifica had 0.6 fewer Police FTE per 1,000 residents and 0.7 fewer Finance FTE per 100 citywide FTE, which can be impactful gaps considering how service-delivery complexity grows alongside city population

11.3 9.1

12.4 7.5

3.2 2.5

6.8 3.4
Peer Average

7.5 0.0

2.0 4.0

6.0 8.0

10.0 12.0

14.0 Burlingame Campbell Foster City Menlo Park Morgan Hill Rohnert Park San Bruno Pacifica

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Packet Pg. 182 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) 17 and organizational size. For other functions, like HR and Planning, Pacifica had around 2.5 FTE fewer, on average, to serve the same size audience as its peers.

To further understand the staffing comparisons for Pacifica, additional research could focus on identifying peers based on specific departments’ alone. For example, identifying small California cities that have overlap with the utilities Pacifica provides, even if the potential peer has vastly different service-levels in other departments. As referenced earlier, each tenth of an FTE can make a difference in service delivery, particularly in a small city. The results of our research and analysis are intended to provide the City of Pacifica with information that provides context necessary to understand, and ultimately address, today’s staffing challenges.

As the next step in this analysis, we recommend conducting more focused deep dives into individual departments to gain a clearer understanding of their specific staffing needs and service levels. This should include a detailed examination of service provision models, workload metrics, and the unique challenges faced by each department. By analyzing these factors, Pacifica can develop more tailored strategies to address staffing disparities and enhance service delivery, ensuring that departmental resources are aligned with the city's goals and community needs.

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Packet Pg. 183 Attachment: Attachment B - City of Pacifica Staffing Study by Raftelis June 2024 (6078 : Revenue Generation Opportunities Study Session) City of Pacifica - Other Unfunded Projects List Attachment B Project Unfunded Amount
San Pedro Headlands Multi-Purpose Trail 8,250,000
Lower Linda Mar Storm Drain project 5,200,000
Cattle Hill Trailhead Park Construction 5,000,000
Frontierland Lower Park Expansion 5,000,000
Various City Trail Improvements 4,500,000
Rockaway Parking Area 4,330,000
Fairmont West Field Improvements 3,850,000
Sanchez Field and Park Improvements 2,500,000
Frontierland Upper Park Reno/Expansion 2,500,000
Beach Boulevard Promenade Park Improvements 2,500,000
Ahni (Cattle Hill) Trail Improvements 2,000,000
West Linda Mar Storm Drain Improvement Project 1,920,000 Adobe Bridge Reconstruction 1,600,000
Fairmont West Field Improvements 1,500,000
Palmetto Ave. Street Amenities 1,360,000
400 Esplanade Multi-Purpose Trail 1,250,000
Clarendon Road Drainage Improvements 1,200,000
Fire Station 71 & 72 Modernization 950,000
Monterey Road Drainage Improvements 575,000
Rockaway to Pacifica State Beach Trail Rehabilitation 350,000 Rockaway Beach Avenue Drainage Improvement 300,000
Station 72 Pavement Rehabilitation 250,000
Santa Rosa Avenue Outfall Improvements 250,000
Oddstad Park Parking Rehabilitation & Drainage Improvements 250,000 Montecito Avenue Storm Drain System Improvements 200,000 Community Center Improvements 200,000
Calera Creek Culvert Pipe Replacement 125,000
Sharp Park Road Slope Erosion Repair 100,000
Crespi Canal Repair Project 100,000
Terra Nova Boulevard and Oddstad Boulevard Pedestrian Crossing Improvements 45,000 Total $ 58,155,000

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Packet Pg. 184 Attachment: Attachment C - Other Unfunded Projects List (6078 : Revenue Generation Opportunities Study Session) Administrative Draft Report
Market Study and Fiscal Impact
Analysis of Pacifica Sea Bowl
Residential Project
Prepared for:

Toll Brothers
Prepared by:

Economic & Planning Systems, Inc.

March 27, 2024
EPS #231099

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Packet Pg. 185 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems (EPS) (6078 : Revenue Generation Table of Contents

1. Introduction and Key Findings .......................................................... 1 Key Findings ...................................................................................... 2

2. Project Description.......................................................................... 4

3. Market Context............................................................................... 7

4. Fiscal Impact Analysis ................................................................... 12 Methodology ....................................................................................12 General Fund Revenues .....................................................................15 General Fund Expenditures................................................................. 19 Net Fiscal Impact on General Fund ......................................................23

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Packet Pg. 186 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems (EPS) (6078 : Revenue Generation List of Tables
Table 1 Summary of Fiscal Impacts........................................................... 2 Table 2 Pacifica Citywide Demographic Assumptions.................................... 4 Table 3 Pacifica Sea Bowl Residential Development Program and Assumptions 5 Table 4 Pacifica Sea Bowl Existing Development and Assumptions ................. 6 Table 5 Population and Housing Trends (2013 -2023) .................................. 7 Table 6 Pacifica Employment by Industry................................................... 8 Table 7 Commercial Market Indicators.....................................................10 Table 8 Experiential Retail Market Indicators ............................................11 Table 9 Pacifica General Fund Revenue Summary .....................................15 Table 10 Pacifica General Fund Expenditure Summary................................. 20 Table 11 Annual General Fund Fiscal Impact Detail .....................................23

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Figure 1 Project Site Context..................................................................... 1 Figure 2 Median Sales Price in Pacifica (2012 -2023) .................................... 9

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1 1. Introduction and Key Findings
Toll Brothers (Developer) proposes to develop a parcel within the City of Pacifica (City) in San Mateo County into a residential development including market-rate for-sale units and below-market-rate (BMR) for-rent accessory dwelling units. The

9.2-acre site is located at the intersection of Sea Bowl Lane and Highway 1. The parcel currently contains a vacant 31,319 square foot building, previously home to the Sea Bowl Entertainment Center.

Figure 1 Project Site Context
This report provides a summary of market research focused on the residential and retail markets in and around the City of Pacifica as well as a fiscal impact analysis that evaluates the expected annual General Fund impacts of the Project. The report is organized into the introduction and key findings, followed by the Project Description, Market Context, and concludes with the Fiscal Impact Analysis.

Detailed data tables supporting the conclusions presented in the Fiscal chapter can be found in Appendix A.

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2 Key Findings

1. Despite recent population declines, increases in the cost of housing along with decreases in the number of vacant units point to unmet demand for additional housing in Pacifica. Like other markets in California and the San Francisco Bay Area, townhome values increased dramatically since 2013. The median sales prices for townhomes increased nearly 50 percent since 2013. Even as additional housing units were constructed, the residential vacancy rate in Pacifica decreased from 5 percent to 3.3 percent. These indicators point to unmet demand for new housing in the City.

2. While employment concentrations in retail trade and
accommodation and food services industry sectors suggest that these sectors are important components of Pacifica’s economy, current real estate indicators do not point to strong demand for additional retail space. Retail makes up the majority of commercial space in Pacifica, however very little new retail space has been constructed in the past decade. Overall, the retail market in Pacifica underperforms relative to the Peninsula Coastline region. Pacifica has a higher vacancy rate, as well as lower market rents and market sales prices per square foot than the surrounding submarket.

3. As proposed, the Project is expected to generate a positive annual net fiscal impact on the City of Pacifica’s General Fund. The proposed Project is anticipated to generate a positive net fiscal surplus to Pacifica’s General Fund in the range of $255,000 each year at project buildout as shown in Table 1. The Project is expected to generate annual General Fund revenues above and beyond the General Fund expenditures required to serve the Project, thereby more than covering its costs and generating surplus revenues to enhance services and/or service levels citywide. If the Sea Bowl property were to re-open as a bowling alley it would generate an estimated $94,000 annual net fiscal benefit to the City (driven primarily by sales tax revenue), $161,000 less than the anticipated net fiscal impact of the Project.

Table 1 Summary of Fiscal Impacts
General Fund
Revenues and Expenditures Vacant Occupied New Project
Annual General Fund Revenues $4,000 $101,000 $414,000
Annual General Fund Expenditures $0 $7,000 $159,000
Annual Net Impact on General Fund $4,000 $94,000 $255,000 Source: Economic & Planning Systems
Existing Development

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3 4. Property tax is estimated to comprise the largest revenue source for the Pacifica General Fund. The proposed development program is estimated to generate a total assessed value (AV) of approximately $138 million, resulting in a net AV increase of $136 million after accounting for the site’s current AV of $1.6 million. A substantial portion of the estimated General Fund revenues generated by the Project, including $260,000 a year in property taxes and $98,000 annually in property tax in-lieu of vehicle license fees, are directly tied to the new assessed value generated by the Project.

5. Public Safety costs are expected to make up the largest additional expenditure impact on the City’s General Fund. Public Safety costs, which include Police and Fire, are estimated to make up 66 percent of the additional General Fund costs at approximately $105,000 per year at Project buildout. Public Works costs comprise the next largest portion of estimated costs at around $25,000 per year.

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4 2. Project Description
The Project site is located near the western edge of the City of Pacifica on a 9.2- acre parcel, south of Sea Bowl Lane and east of Highway 1, about 600 feet from the Pacific Ocean. The parcel currently contains a 31,319 square foot bowling alley previously home to the Sea Bowl Entertainment Center, which vacated the building in May of 2023. Pacifica is in San Mateo County and has approximately 37,000 residents and about 4,200 jobs, as shown in Table 2.

Table 2 Pacifica Citywide Demographic Assumptions
The proposed development program includes 113 residential units consisting of 91 market-rate for-sale units and 22 below-market rate (BMR) accessory dwelling units. The City’s 6th Cycle Regional Housing Needs Allocation (RHNA) is 1,892 housing units with further delineation by income categories to ensure that housing is planned for households at all economic levels. The breakdown by income category is defined below:
• Very Low Income: 538
• Low Income: 310
• Moderate Income: 291
• Above Moderate Income: 753
As proposed, this Project would satisfy 2.6 percent of the City’s Lower Income allocation.

Citywide
Item Total Source
Total Housing Units 14,749 Department of Finance 2023
Occupied Households 14,255 Department of Finance 2023
Population 37,082 Department of Finance 2023
Persons per Household
Single Family 2.87 Census ACS 2022 5-Year Est.

Primary Jobs 4,183 LEHD Employment Statistics 2021
Service Population 38,959 Appendix Table A-1
Source: Economic & Planning Systems

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5 The market-rate program includes a mix of 81 townhome and ten (10) duplex units, with anticipated price points ranging from $1.1 million to $1.8 million, resulting in a weighted average price point of $1.5 million for all market-rate units. The BMR program includes 22 accessory dwelling units (ADUs) affordable at 80 percent Area Median Income (AMI). The ADUs would be deed-restricted, such that if the owners of the units make them available for rent, the rents would have to be affordable to low income tenants. The details of the proposed development program are summarized in Table 3. Note that there is no price point listed for the 22 ADUs as their value is included within the market rate ownership unit price.

As shown, the total program is anticipated to house up to 284 residents with an estimated average household income of about $250,000 for the market-rate units and $104,000 for the BMR units. The market-rate household income estimates are based on the weighted average of the price points provided by the Developer while the BMR household income estimates are based on County-specific limits based on depth of affordability and household size (studio units are assumed to have a household size of one).

Table 3 Pacifica Sea Bowl Residential Development Program and Assumptions Total New Avg. Ann.

Item Units1 Residents2 HH Income3
Market Rate
Ownership Units 91 262 $1,511,522 Sale Price $253,702
Below-Market-Rate
Rental ADUs 22 22 $104,400 4
Total Overall Program 113 284
[3] See Appendix Table A-8 for detail on how these estimates are calculated for Ownership units.

Source: State of California Department of Housing and Community Development; Toll Brothers; Economic & Planning Systems
Weighted Average
Price Point per Unit1
[1] Per information provided by the developer.
[2] For Ownership units, multiplies number of units by average persons per single-family household assumption from Table 2, rounded to nearest whole number. Rental unit household size calculated as number of bedrooms (from developer-provided development program) plus one, and all ADUs are proposed to be studio units.
[4] Affordable Rental Household Income based on 2023 San Mateo County Income Limits (as determined by HUD) at 80% of Area Median Income for a family size of one.

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6 As previously stated, the Project site is currently developed with a vacant commercial property. Table 4 below shows the current assessed value of the parcel and the service population contribution under two scenarios. The first scenario treats the site as it currently is, a vacant commercial property with no active use. The second scenario evaluates the site under its previous conditions as an operational bowling alley. This distinction is carried forth through the analysis in order to provide a comparison of the proposed Project’s fiscal impact with the currently vacant site and also under a scenario wherein an operator takes over Sea Bowl and restarts operations as a bowling alley.

Table 4 Pacifica Sea Bowl Existing Development and Assumptions The following chapter presents an overview of the market context for the Project site. Trends in population and employment are provided, followed by market indicators for the residential and commercial real estate market.

Service Assessed
Item Use Population1 Value2
Scenario 1
Current Use (Vacant) Vacant Commercial 0 $1,626,625
Scenario 2
Prior Use (Occupied) Bowling Alley 13 $1,626,625
Source: San Mateo County Assessor; CoStar Group; Economic & Planning Systems [1] Scenario 1 (Vacant) considers the site as it currently is, wherein there is no active business on site and therefore no contribution to City service population.

Scenario 2 (Occupied) considers the site when it was active. Per CoStar Group data, SeaBowl had 29 employees. The above value of 13 is found by multiplying 29 employees by the 44.9% employee service population equivalency derived in Appendix Table A-1.
[2] Assessed value for APN 022-150-440 per FY2023-2024 San Mateo County Secured Tax Bill.

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7 3. Market Context
This chapter lays out the existing market conditions in the City of Pacifica and the implications for the demand for new residential and commercial development.

Using data sourced from the California Department of Finance, JobsEQ, Redfin, and CoStar, this analysis provides context for the Project site.

Population Trends
Pacifica and San Mateo County have both experienced similar population declines in recent years. In the past ten years, from 2013 to 2023, San Mateo County’s population decreased by one percent, while the population in Pacifica decreased by three percent in the same period.

Despite these population declines, the number of housing units increased in both Pacifica and San Mateo County over the same period, with the highest growth seen in the single family attached unit stock. During the past decade, the number of single family attached homes increased nine percent in Pacifica and eight percent in San Mateo County, as seen in Table 5.

Table 5 Population and Housing Trends (2013 -2023)
Even with the City’s decline in population and increase in the number of housing units, the City’s vacancy rate decreased over the past decade from 4.5 percent to

3.3 percent. This suggests that there is still strong interest in living in Pacifica.

Employment Trends
Since 2013, employment in Pacifica increased 13 percent, with the current number of jobs in Pacifica just under 5,500. The industries that experienced the greatest rate of growth in Pacifica from 2013 to 2023 include Agriculture, Forestry, Fishing and Hunting; Health Care and Social Assistance; and Arts, Entertainment, and Recreation. Currently, the industry sectors with the largest share of employment are Accommodation and Food Services, Health Care and Item 2013 2023 Growth 2013 2023 Growth
Population 38,384 37,082 -3% 747,550 737,644 -1%
Housing
Total Housing Units 14,539 14,749 1% 272,477 287,967 6% Total Vacancy Rate 4.5% 3.3% -26% 5.2% 5.3% 2%
Townhomes 948 1,037 9% 25,079 27,099 8%
Source: California Department of Finance; Economic & Planning Systems Pacifica San Mateo County

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8 Social Assistance, Educational Services, and Retail Trade (see Table 6). While industry categories do not clearly fall into specific land use categories, there appears to be a substantial retail-oriented labor force within the City.

Table 6 Pacifica Employment by Industry
Industry Amount Pct. Of Total # %
Agriculture, Forestry, Fishing and Hunting 28 1% 26 1478% Mining, Quarrying, and Oil and Gas Extraction 0 0% 0 -87% Utilities 47 1% 6 16%
Construction 586 11% 137 31%
Manufacturing 108 2% -50 -32%
Wholesale Trade 37 1% -4 -9%
Retail Trade 702 13% 70 11%
Transportation and Warehousing 75 1% -30 -28%
Information 40 1% 7 21%
Finance and Insurance 110 2% 18 19%
Real Estate and Rental and Leasing 103 2% 12 13%
Professional, Scientific, and Technical Services 368 7% -30 -8% Management of Companies and Enterprises 1 0% 0 20%
Administrative and Support and Waste
Management and Remediation Services 144 3% 4 3%
Educational Services 704 13% 73 12%
Health Care and Social Assistance 840 15% 300 55%
Arts, Entertainment, and Recreation 192 3% 58 43%
Accommodation and Food Services 897 16% 153 21%
Other Services (except Public Administration) 261 5% -110 -30% Public Administration 243 4% -4 -1%
Unclassified 0 0% -8 -97%
Total - All Industries 5,483 100% 627 13%
Source: JobsEQ 2023; Economic & Planning Systems
Jobs (2022) Growth (2013-2023)

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9 Real Estate Market
This section examines the existing supply and demand for residential and commercial properties. The residential market data is sourced from Redfin, with a focus on townhomes to align with the proposed program. Commercial market data is sourced from CoStar, which compares market data for office, industrial and retail spaces. Additional consideration is given to “experiential retail,” a category which includes bowling alleys, movie theaters, restaurants, etc.

Residential
Townhome prices in Pacifica have largely trended upward over the past decade, with the median sales price of a townhome increasing more than 150 percent from 2012 to 2023. Figure 2 shows the average median sales price of townhomes in Pacifica over this period.

Figure 2 Median Sales Price in Pacifica (2012 -2023)

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10 Commercial
Pacifica falls into the larger Peninsula Coastline Submarket area, which includes communities such as Half Moon Bay and Pescadero. As shown in Table 7, retail spaces in Pacifica had lower market rents, sale prices, and higher vacancy rates as compared to the overall submarket.

Table 7 Commercial Market Indicators
These findings do not indicate strong demand for additional retail space in Pacifica. In considering the existing use as a bowling alley, this study examines “experiential retail” as a subset of general retail. This category consists of retail spaces which focus on experiences typically unique to the space and/or location, such as restaurants, bars, movie theaters, and bowling alleys. Table 8 demonstrates some of the market differences between “experiential retail” and general retail in Pacifica and the larger submarket area.

Item Office Industrial Retail
Pacifica
Inventory (SF) 173,862 161,788 1,011,291
Pct. of Total Comm. Space1 13% 12% 75%
Vacancy Rate 0.00% 0.00% 3.30%
Market Rent/SF $36.38 $25.71 $29.87
Market Sale Price/SF $419 $330 $444
Market Cap Rate 6.59% 6.20% 4.90%
Peninsula Coastline - Submarket
Inventory (SF) 676,212 824,171 3,152,121
Pct. of Total Comm. Space1 15% 18% 68%
Vacancy Rate 1.50% 17.40% 1.70%
Market Rent/SF $37.80 $20.70 $33.39
Market Sale Price/SF $483 $341 $521
Market Cap Rate 6.60% 5.90% 4.60%
Source: CoStar Group (February 2024); Economic & Planning Systems [1] Total commercial space includes properties identified by CoStar as office, industrial, or retail. It does not include flex properties, sports facilities, hospitality properties, or healthcare facilities.

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11 Table 8 Experiential Retail Market Indicators
Both retail categories perform better in the larger submarket than in Pacifica. This indicates that there is not strong demand for the existing retail use at the Project site. While particular retail businesses within Pacifica are successful, there is little indication that either general or “experiential” retail are in high enough demand to require the continued use of this particular site as a commercial retail property.

Experiential General
Item Retail Retail
Pacifica
Inventory (SF) 81,800 1,011,291
Pct. of Total Retail Space 8.09% N/A
Vacancy Rate 0.00% 3.30%
Market Rent/SF $28.25 $29.87
Market Sale Price/SF $455 $444
Market Cap Rate 5.10% 4.90%
Peninsula Coastline - Submarket
Inventory (SF) 257,695 3,152,121
Pct. of Total Retail Space 8.18% N/A
Vacancy Rate 1.80% 1.70%
Market Rent/SF $35.56 $33.39
Market Sale Price/SF $468 $521
Market Cap Rate 4.90% 4.60%
Source: CoStar Group (February 2024); Economic & Planning Systems

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12 4. Fiscal Impact Analysis
The fiscal impact analysis compares the potential additional costs incurred by the City from providing public services to the Project with the additional public revenues generated by the Project. The analysis indicates whether the Project can be expected to have a positive or negative overall fiscal effect at buildout. The overall fiscal effect of the Project is presented along with the fiscal effect of the existing use under two scenarios. Scenario 1 analyzes the site as it currently is, with the commercial building sitting vacant with no ongoing business activity, and with no impact on the budget other than annual property tax generation. Scenario 2 presents a hypothetical set of circumstances, in which Sea Bowl recommences operations as a bowling alley in order to estimate the site’s fiscal performance with no change in use.

It should be noted that fiscal results (annual surpluses or deficits) are simply indicators of fiscal performance; they do not mean that the City will automatically have surplus revenues or deficits because cities must have a balanced budget each year. Persistent shortfalls shown in a fiscal analysis may indicate the need to reduce service levels or obtain additional revenues; persistent surpluses will provide resources to reduce liabilities or improve service levels.

The impacts of the proposed Project are considered upon completion of construction and full stabilization (Project buildout) with estimates provided in constant dollar terms. The analysis is based on a number of sources, including the City’s Fiscal Year 2023-24 Adopted Operating Budget, information on the development program and anticipated home sale prices provided by the developer, public data sources such as the Census, the Department of Finance, and the Bureau of Labor Statistics, along with EPS’ prior work experience in similar jurisdictions.

Methodology
This section describes the methodology and key assumptions used in calculating the impact of the proposed Project on Pacifica’s General Fund. For each revenue and expenditure line item, EPS uses the most appropriate forecasting methodology available based on the data and information available and industry best practices.

Service Population
“Service Population” is a concept that allows the impacts of both residents and employees to be estimated, acknowledging that employees who work but do not live in the City do not require City services to the same degree residents do. The City of Pacifica’s service population is shown in Table 2 and is calculated using

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13 U.S. Census and Department of Finance data. The calculation accounts for commute patterns by considering the proportion of employees who commute into the city and the proportion of residents who commute out of the city and applies weighting based on the portion of time these cohorts spend within the City with access to City services. The detailed calculation used to arrive at this estimate can be found in Appendix Table A-1.

Fixed vs. Variable Expenditures
In calculating the estimates of General Fund expenditures attributable to the Project, a percent variable factor has been applied. Most City departments operate with some fixed amount of overhead that does not vary as the City’s service population grows or contracts. For example, even as the City grows, the City only needs one City Manager or one City Clerk. This percent variable factor is applied to departmental expenditures to represent the proportion of expenditures that are assumed to vary and therefore would scale with increases in service population. Expenditures assumed to be fixed would include overhead costs, director salaries, and other costs that would not scale with service population and therefore would be unaffected by new developments such as the Project.

Case Study
A case study approach is used to calculate those revenues that can be estimated using assumptions specific to the development program. Items estimated using a case study approach in this analysis include property tax, property tax in-lieu of VLF, property transfer tax, and sales tax.

Average Revenue/Expenditure per Service Population
This approach estimates average revenues or expenditures per the City’s current service population and applies that average revenue or expenditure to the Project’s proposed service population. Revenues and expenditures are based on the City’s 2023-24 Adopted Operating Budget. The relative impacts of employment and population are compared and used to estimate the City’s service population. An employee is only likely to access services during work hours and therefore has a lower impact than the residential population. The City has an estimated service population of 38,959, and the Project is estimated to generate an additional service population of up to 284. The calculation supporting the estimates of the City’s service population is included in Appendix Table A-1.

Cost Recovery
A Cost Recovery approach is used for the Charges for Current Services revenue items. The City of Pacifica 2023-2024 Adopted Operating Budget identifies Charges for Services revenue for each department within the Department Work Programs section. These revenues are considered cost recovery revenues, as they

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14 recover costs expended by the departments performing these services. The revenues are not calculated with the other General Fund revenue items but are shown in the General Fund Expenditure table where they are offset from the relevant departments’ expenditures.

Not Impacted
Some budget items are not estimated because certain City revenues and expenditures are not directly impacted by the new development associated with this Project, such as Business License Tax revenues, Transient Occupancy Tax, and Intergovernmental revenues, among others.

The next section details the methodology and assumptions used for each revenue item estimated in the analysis, followed by a section pertaining to the expenditure items.

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15 General Fund Revenues
This section describes the methodology and assumptions used for each revenue item estimated in this analysis. Several General Fund revenue items are not forecasted because the Project is not expected to affect them. Table 9 below displays a summary of Pacifica’s General Fund revenue items based on the adopted 2023-2024 budget, with details on how each impacted revenue item is estimated. The remainder of this section explains how the Project’s estimated revenue impacts are derived.

Table 9 Pacifica General Fund Revenue Summary
FY 2023/24
General Fund
Description Revenues*
Property Tax $16,204,900 18.92% of 1% of base assessed value2 Vehicle License Fees $5,508,600
Business License Tax $520,700 - not impacted
Cannabis Tax $950,000 $24.38 per service population
Sales Tax $3,401,000 0.95% of estimated taxable sales3
Measure Y $2,800,000 0.5% of estimated taxable sales4
Transient Occupancy Tax $2,669,500 - not impacted
Utility Users Tax $2,700,000 $69.30 per service population Other Taxes1 $1,266,800 - not impacted
Intergovernmental $2,431,700 - not impacted
Other Revenue $105,000 - not impacted
Charges for Services $9,091,000
Transfers In $1,291,900 - not impacted
Total General Fund Revenues $48,941,100
Source: City of Pacifica Adopted Operating Budget FY 2023-2024; San Mateo County Assessor; CDTFA; Economic & Planning Systems
[3] City of Pacifica's Retain Rate of the 1% local sales tax revenue per California Department of Tax and Fee Administration's Sales Tax Rate Table 23.
[4] Pacifica Vital Services Measure Y, adopted in November 2022, places an additional one-half percent sales tax on purchases made in the City, sunsetting in 2032. [5] A portion of these revenues is considered as cost recovery and is taken out of relevant departmental expenditures as shown in Table 10.

Impact Estimating Factors
*2023-24 Adopted General Fund Budget values per City of Pacifica Adopted Operating Budget FY 2023-2024.

Case Study Approach
Cost Recovery5
[2] Post-ERAF property tax distribution to the City of Pacifica for Tax Rate Area 016-017 per the San Mateo County Assessor.
[1] Per City of Pacifica Adopted Operating Budget FY 2023-2024, Other Taxes consist of Franchise Fees. There is no mention of Property Transfer Tax in the City's budget, but the Municipal Code indicates there is Property Transfer Tax in the City. Franchise Fees are not estimated as part of this analysis but Property Transfer Tax is (Appendix Table A-4).

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16 Property Tax
Property taxes are based on the assessed value of land and improvements, such as new development. The Project comprises 91 market-rate for-sale units and 22 below-market-rate for-rent accessory dwelling units (ADUs). The assessed value for the accessory dwelling units is not included as a distinct item as their value is accounted for within the market-rate units to which they are attached. The estimated assessed value of the Project is $138 million based on anticipated price points provided by the Developer (see Appendix Tables A-2 and A-3), and the existing assessed value of the site is $1.6 million. The assessed value of the existing development is not netted out from the estimated value of Project in this analysis as the existing development’s fiscal impact is calculated separately. San Mateo County collects property tax based on 1.0 percent of the assessed value, and the City of Pacifica receives 18.92 percent of the County’s property tax base from property located in Tax Rate Area 016-017 (post-ERAF).1 The annual property tax revenue the City currently receives from the site is about $3,000, and this is expected to increase to about $260,000 at Project buildout. This share is assumed fixed going forward.

Property Tax In-Lieu of Vehicle License Fees
In 2004, the State of California adjusted the method for sharing vehicle license fees (VLF) with local jurisdictions. Recent state budget changes replaced the VLF with property tax, which grows proportionate to increases in the assessed value of cities and towns. The Project is expected to increase the City’s total assessed valuation by 1.79 percent (assuming no other assessed value growth) and will generate the same increased percentage in in-lieu VLF revenues, estimated to be about $98,500 per year (see Appendix Table A-3). Using this same method, the existing development is estimated to generate about $1,100 annually in property tax in-lieu of VLF.

Property Transfer Tax
The property transfer tax, or real estate transfer tax, is charged on documents that transfer real estate, and the Project’s proposed residential units would incur this tax when sold and transferred to new parties. As previously indicated, Pacifica’s 2023-24 Adopted Operating Budget does not mention this tax (EPS assumes it is included within a grouped revenue item in the budget, such as “Other Taxes”), but according to Chapter 5 Sec. 3-5.02 of Pacifica's Municipal Code the City’s property transfer tax is $0.55 per $1,000 in assessed value of the transferred property. The 91 market-rate for-sale units are assumed to be resold, 1 Per San Mateo County Assessor 2022/23 Annual Tax Increment Tables.

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17 on average, every five years.2 This results in an annual property transfer tax to the City of 20 percent of the total assessed value of the Project, or about $15,000 per year. Appendix Table A-4 shows this calculation. This revenue item is not estimated for either of the two existing development scenarios as commercial properties do not sell as often or as regularly as residential properties.

Sales Tax
Sales tax generation for the Project is based on estimates of taxable sales generated by the new population in the City attributable to the Project. To forecast new sales, estimates are made for household income, spending on taxable items, and the portion of spending captured in the City, as shown in Appendix Table A-5. EPS constructed average household incomes based on the weighted average of the Developer-provided sale prices for the market-rate units and HUD-mandated income limits for the below-market-rate accessory dwelling units. The weighted average annual income of the future market-rate for-sale unit households is estimated to be about $250,000, while new below-market-rate households are estimated to make about $104,000 a year. EPS established a share of taxable spending for each income group,3 with a conservative estimate of 25 percent of total taxable expenditures assumed to be captured by retailers in Pacifica. This equates to an estimated $14,000 in sales tax revenue annually for the City’s General Fund based on the City’s standard 0.95 percent share of taxable sales in addition to the 0.50 percent via Measure Y. The sales tax for the existing development under Scenario 1 (vacant) is $0 and is $93,788 under Scenario 2 (occupied) based on actual sales tax payments made by Sea Bowl in 2022 as provided by the Developer.

Pacifica’s Vital Services Measure Y was approved by Pacifica voters on November 8, 2022. This measure enacts a 0.50 percent sales tax which sunsets in 2032, intended to “help address city services … such as keeping pollution and trash off our beaches, attracting jobs and businesses, street paving, and storm drain maintenance…”4 According to the City’s 2023-2024 Adopted Operating Budget, revenues generated via Measure Y flow to the City’s General Fund. 2 In the developer’s experience, the townhome product type often serves as a “starter” home and turns over more frequently than detached single family homes, for example.
3 Based on the 2022 Bureau of Labor Statistics National Consumer Expenditure Survey by Income.
4 City of Pacifica November 23, 2022 Press Release titled “Pacifica Voters Adopt Measure Y.”

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Packet Pg. 205 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems (EPS) (6078 : Revenue Generation Administrative Draft Report
Market Study and Fiscal Impact Analysis
Pacifica Sea Bowl Residential Project
18 Business License Tax
The City imposes a Business License Tax on every fixed place of business within the City based on gross receipts of the business. As a residential development, the Project would not generate any Business License Tax revenues. Under Scenario 1, the existing development would not generate this revenue either as it would be vacant, and under Scenario 2 the existing development is estimated to pay $1,305 annually based on actual taxes paid by Sea Bowl per information provided by the Developer. These values are shown in Appendix Table A-6.

Cannabis Tax
The City collects revenue from cannabis operations based on gross receipts of sales, which are assumed to increase on a per-service population basis. As shown in Appendix Table A-6, this results in $24 per service population. The Project’s 284 estimated residents would therefore increase cannabis tax revenues by an estimated $6,900 per year at buildout. The existing development under Scenario 1 has no service population attributable to it, meaning it would not impact cannabis tax revenues, but under Scenario 2 it would increase this revenue by an estimated $300 per year.

Utility Users Tax
The City collects a tax on the use of utility services, and the Project would increase utility revenues in town. The net increase in Utility Users Tax is estimated at approximately $70 per service population, totaling about $19,700 annually at project buildout (as shown in Appendix Table A-6). For the existing development, this revenue item would be $0 under Scenario 1 and $900 under Scenario 2.

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Packet Pg. 206 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems (EPS) (6078 : Revenue Generation Economic & Planning Systems, Inc.
19 General Fund Expenditures
This section describes the methodology and key assumptions for calculating key General Fund expenditure items. All Departments consist of both fixed and variable costs. While fixed costs are independent of new development, variable costs are assumed to increase based on new growth in the City. Only variable costs are used to project the General Fund expenditures in this analysis. The approach is presented in Table 10.

Offsetting revenues, consisting of Charges for Services described previously, are subtracted from relevant departmental expenditures to arrive at the net expenditures by department. A percent variable is applied to each Department’s net expenditure to derive the annual variable expense, which is then divided by the citywide service population to produce a per-service population General Fund expenditure for each City Department. Following Table 10 below, this section describes the Departmental expenditure items in further detail and the estimated expenditures attributable to the Project and Scenario 2 of the existing development. Note that Scenario 1 of the existing development has no service population and therefore is not estimated to impact General Fund expenditures.

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Packet Pg. 207 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems (EPS) (6078 : Revenue Generation Administrative Draft Report
Market Study and Fiscal Impact Analysis
Pacifica Sea Bowl Residential Project
20 Table 10 Pacifica General Fund Expenditure Summary
Percent Annual Variable Per Service Pop.

Item Total Offsetting1 Net Variable2 Expense GF Expenditures3 Fire Department $7,969,668 $429,400 $7,540,268 75% $5,655,201 $145.16 General Government4 $7,155,340 $0 $7,155,340 15% $1,073,301 $27.55 Non-Departmental $4,883,300 $0 $4,883,300 - $0 $0.00
PB&R $5,862,623 $2,486,600 $3,376,023 50% $1,688,012 $43.33 Planning $5,831,718 $1,751,900 $4,079,818 30% $1,223,945 $31.42 Police Department $12,003,585 $323,100 $11,680,485 75% $8,760,364 $224.86 Public Works $4,901,022 $365,700 $4,535,322 75% $3,401,492 $87.31 Total General Fund
Expenditures $48,607,256 $5,356,700 $43,250,556 $559.63 FY 2023/24 Adopted GF Expenditures*
Source: City of Pacifica Adopted Operating Budget FY 2023-2024; Economic & Planning Systems [4] The General Government Category consists of the City Council, City Manager, City Attorney, and Administrative Services Departmental expenditures.
*2023-24 Adopted General Fund Budget values per City of Pacifica Adopted Operating Budget FY 2023-2024. [1] Represents a portion of Charges for Services line item shown in Table 9. [2] EPS assumption.
[3] Divides annual variable expense by total Citywide Service Population of 38,959 from Table 2.

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Packet Pg. 208 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems Economic & Planning Systems, Inc.
21 Administrative Government Functions (15 Percent Variable Expenditures)
There are four City departments that generally serve administrative government functions and as such are attributed a 15 percent variable assumption: City Council, City Manager, City Attorney, and Administrative Services. These are grouped into an overall “General Government” category in Table 10. Based on EPS’s research in similar jurisdictions, new development of the Project’s scale typically affects administrative and legislative government costs by only a fraction of these departments’ operating budgets. As a result, EPS assumes that 15 percent of the cost of these services is variable and will be affected by new development. The combined per-service population expenditure by these departments is estimated at $27.55, totaling about $8,000 annually at Project buildout compared to $400 for Scenario 2 of the existing development.

Development-Related Functions (30 Percent Variable Expenditures) Pacifica’s Planning Department provides development-related functions for the City. While new development of the Project’s scale typically affects these costs by a fraction of the operating budget, this department provides more citizen-facing services than the Administrative Government functions and therefore is attributed a higher variable percentage of 30 percent. The per-service population expenditure by this department is estimated at $31.42, totaling about $9,000 annually at Project buildout compared to $400 for Scenario 2 of the existing development.

Parks, Beaches & Recreation (PB&R) (50 Percent Variable Expenditures)
The City of Pacifica’s Parks, Beaches & Recreation Department oversees recreation and human services to the community. These functions are assumed to scale more closely with increases in service population than the previous categories, as additional residents will increase participation in programming and usage of City facilities (and required maintenance), thereby increasing Departmental expenditures. A 50 percent variable factor is applied to account for existing overhead costs, resulting in a $43.33 per-service population expenditure and an estimated $12,000 annual cost attributable to the Project compared to $600 for Scenario 2 of the existing development.

Public Safety and Public Works (75 Percent Variable Expenditures) Public Safety, consisting of the Police, Fire, and Public Works functions are assumed to scale most closely with changes in service population and are given a variable expenditure assumption of 75 percent. The costs required to perform these services are tied closely with the size of the population they serve, as additional population attributable to the Project may require additional law

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Packet Pg. 209 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems (EPS) (6078 : Revenue Generation Administrative Draft Report
Market Study and Fiscal Impact Analysis
Pacifica Sea Bowl Residential Project
22 enforcement and fire department personnel and/or staff time and equipment, as well as additional wear on Public Works’ maintained infrastructure and facilities.

These three Departments’ expenditures combined represent over half of Pacifica’s General Fund budget, and this combined with the high percent variable assumption results in the relatively large combined per-service population expenditure of about $450. This equates to an estimated $130,000 in annual General Fund expenditures at Project buildout compared to $6,000 for Scenario 2 of the existing development.

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Packet Pg. 210 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems (EPS) (6078 : Revenue Generation Economic & Planning Systems, Inc.
23 Net Fiscal Impact on General Fund
Based on the assumptions and analysis described above, the annual net fiscal impact associated with the proposed development is estimated at approximately $256,000 after completion of construction, as summarized in Table 11. The Project is estimated to generate about $414,000 in annual General Fund revenues compared to $159,000 in annual General Fund costs. Actual fiscal impacts may vary due to the actual timing of Project buildout and changes in economic and budgetary conditions.

The existing development, under Scenario 1 (vacant), would generate only about $4,000 annually in property tax-related revenues, and would generate no expenditures due to the lack of service population, resulting in a positive annual net fiscal impact of $4,000. Under Scenario 2 (occupied), the existing development is estimated to generate about $100,000 in General Fund revenues but only $7,000 in costs for an annual net fiscal impact of $93,000. This result is due to the small service population attributable to the bowling alley and the relatively large amount of sales tax generation. Still, the proposed Project is estimated to generate a higher net fiscal impact than the existing development under either scenario.

Table 11 Annual General Fund Fiscal Impact Detail
Annual General Fund Impacts Vacant Occupied New Project General Fund Revenues
Property Tax $3,000 $3,000 $260,000
Vehicle License Fees $1,000 $1,000 $98,000
Business License Tax $0 $1,000 $0
Cannabis Tax $0 $0 $7,000
Sales Tax $0 $61,000 $9,000
Measure Y $0 $32,000 $5,000
Utility Users Tax $0 $1,000 $20,000
Property Transfer Tax $0 $0 $15,000
Total Revenues $4,000 $101,000 $414,000
General Fund Expenditures
Fire Department $0 $2,000 $41,000
General Government $0 $0 $8,000
PB&R $0 $1,000 $12,000
Planning $0 $0 $9,000
Police Department $0 $3,000 $64,000
Public Works $0 $1,000 $25,000
Total Expenditures $0 $7,000 $159,000
Annual Net Impact on General Fund $4,000 $93,000 $256,000 Existing Development
Note: Values shown are rounded to the nearest thousand. Numbers may not sum due to rounding.

Source: Economic & Planning Systems

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Packet Pg. 211 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems (EPS) (6078 : Revenue Generation

APPENDIX A

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Packet Pg. 212 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems (EPS) (6078 : Revenue Generation Appendix Table A-1
Service Population Factors based on Resident to Employee Equivalencies Pacifica Sea Bowl Fiscal Impact Analysis; EPS #231099
Item#%
Employment Status of Pacifica Residents
1 Formula: a = b * 37,082
b
1 c = b * c
Not in Labor Force 20,144 54.3% 100% 54.3%
Employed in the City
3 1,221 3.3% 50% 1.6%
Employed Outside of the City 15,717 42.4% 67% 28.4%
Total Residents 37,082 100.0% 84.4%
Residence Status of Pacifica Employees
1 Formula: a = b * 4,183
b
1 c = b * c
Live in the City
3 1,221 29.2% 50% 14.6%
Live Outside the City 2,962 70.8% 33% 23.3%
Total Jobs 4,183 100.0% 37.9%
Employee to Resident Equivalency Factor
4 (37.9% / 84.4%) = 44.9%
Service Population Calculation
Amount Attributable to Residents (@ 100%) 37,082 95.2%
Amount Attributable to Employees (@ 44.9%) 1,877 4.8%
Total Service Population 38,959 100.0%
Sources: LEHD OnTheMap 2021, Department of Finance, and Economic & Planning Systems [4] Equals weighted average of residents divided by weighted average of employees.

Existing Weight
2 Weighted
Average
[1] Distribution and total jobs based on data from U.S. Census (OnTheMap 2021). Total residents based on 2023 estimates provided by DOF in Table E-5.
[2] Represents EPS estimate of how various types of residents and employees relate to each other in terms of demand for City Services.
[3] The number of residents who are employed in the City and the number of employees in the City who are residents are the same, representing the same group of unique individuals. This group is reflected both in the Total Residents and the Total Jobs to demonstrate the composition of the totals, with their weighting split evenly between the resident and employee groups.
24 10.d
Packet Pg. 213 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems Appendix Table A-2
Estimated Assessed Value of Proposed Development
Pacifica Sea Bowl Fiscal Impact Analysis; EPS #231099
Market Value Unit
Item per Unit
1 Count Total
Market Rate Ownership Units $1,511,522 91 $137,548,476
Source: Toll Brothers; Economic & Planning Systems
[1] Weighted average per Table 3. Values for ADUs are included within the per-unit ownership housing market value.
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Packet Pg. 214 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems Appendix Table A-3
Property Tax Revenue Estimate
Pacifica Sea Bowl Fiscal Impact Analysis; EPS #231099
Existing New
Item Formula Development Project
Property Tax
Assessed Value
1 a $1,626,625 $137,548,476
Property Tax b = a * 1.0% $16,266 $1,375,485
Annual Pacifica General Fund
Property Tax Revenue
2 c = b * 18.92% $3,078 $260,242
Property Tax In-Lieu of VLF
Existing Citywide Property Tax In-Lieu of VLF
3 d = $5,508,600
Citywide Taxable Assessed Value
4 e = $7,696,794,259
Percentage of Citywide Assessed Value f = a / e 0.021% 1.787% Annual Pacifica General Fund
Property Tax In-Lieu of VLF d * f $1,164 $98,444
Source: C y it of Pacifica Adopted Operating Budget FY 2023-2024; San Mateo County Assessor's Annual Report 2022-2023; Economic & Planning Systems
[1] Existing value per Table 4, New Project value per Appendix Table A-2. [2] Post-ERAF tax distribution to the City of Pacifica for Tax Rate Area 016-017 per the San Mateo County Assessor. [3] per Table 9.
[4] Citywide Net Secured AV per San Mateo County Assessor's Annual Report 2022-2023. 26 10.d
Packet Pg. 215 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems Appendix Table A-4
Real Estate Transfer Tax Estimate
Pacifica Sea Bowl Fiscal Impact Analysis; EPS #231099
New
Item Formula Project
Assessed Value
1 a $137,548,476
Turnover Rate
2 b 20%
Average Annual Value Turnover c = a * b $27,509,695
Real Estate Transfer Tax Revenue
3 = (c / 1,000) * $0.55 $15,130
Source: Pacifica Municipal Code; Economic & Planning Systems [1] New Project Assessed Value per Appendix Table A-2.
[3] Per Chapter 5 Sec. 3-5.02 of Pacifica's Municipal Code, Pacifica's Real Property Transfer Tax rate is $0.55 per $1,000 of value.
[2] New Development (for-sale residential) assumed to sell every five years.

Note: Existing development not assumed to regularly sell and therefore transfer tax is not estimated.
27 10.d
Packet Pg. 216 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems Appendix Table A-5
General Fund Annual Sales Tax Revenue Estimate
Pacifica Sea Bowl Fiscal Impact Analysis; EPS #231099
Item Vacant Occupied Ownership Rental (ADU) Total
Residential Spending
Estimated Annual Household Income1 - - $253,702 $104,400 - Household Taxable Retail Spending
as a Percent of Income - - 14.3% 23.4% -
Taxable Retail Spending per Household - - $36,375 $24,399 - Household Count - - 91 22 113
Total Retail Spending from Households - - $3,310,170 $536,777 $3,846,947 Taxable Retail Sales Captured in Pacifica 25% of Retail Expenditures3 - - $827,542 $134,194 $961,737 General Fund Household Sales Tax Revenue 0.95% of Taxable Sales4 - - $7,862 $1,275 $9,136 Measure Y Household Sales Tax Revenue 0.50% of Taxable Sales4 - - $4,138 $671 $4,809 On-Site Retail Sales
Total On-Site Retail Sales Tax Revenue - $93,788 - - -
General Fund On-Site Retail Sales Tax Revenue - $61,447 - - - Measure Y On-Site Retail Sales Tax Revenue - $32,341 - - - Total General Fund Sales Tax Revenue - $61,447 $7,862 $1,275 $9,136 Total Measure Y Sales Tax Revenue - $32,341 $4,138 $671 $4,809 Assumptions /
Estimating Factors
Existing Development
Actuals via Project Applicant
[1] Weighted average ownership household incomes derived on Appendix Table A-8, rental household income values per Table 3.

New Project
Source: BLS 2022 Consumer Expenditure Survey; Economic & Planning Systems Appenix Table A-8
Bureau of Labor Statistics2
Table 3
See Footnote 5
[4] per Table 9.
[2] Based on the Bureau of Labor Statistics 2022 Consumer Expenditure Survey. Value shown for Ownership units is percentage for households with incomes above $200,000. Value shown for Rental units based on households with incomes between $100,000 and $149,999. [3] EPS assumption.
[5] Assumed the total sales tax figure is inclusive of both the General Fund Bradley-Burns sales tax and the additional half-cent Measure Y sales tax. The total figure is portioned out based on the proportion of the total 1.45% sales tax that goes to each category. 28 10.d
Packet Pg. 217 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems Appendix Table A-6
Other General Fund Revenues
Pacifica Sea Bowl Fiscal Impact Analysis; EPS #231099
New
Revenue Source Vacant Occupied Project
Business License Tax
2 $0 $1,305 $0
Cannabis Tax $24.38 per service population $0 $317 $6,916 Utility Users Tax $69.30 per service population $0 $901 $19,655 Source: Economic & Planning Systems
[2] This value, provided by the Project Applicant, is the actual Business License Tax the Existing Development paid in 2022.

Assumptions /
Estimating Factors
1 Existing Development
See Footnote 2
[1] See Table 9 for revenue estimates and Table 3 and Table 4 for estimated service populations. 29 10.d
Packet Pg. 218 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems Appendix Table A-7
Annual General Fund Expenditures
Pacifica Sea Bowl Fiscal Impact Analysis; EPS #231099
New
Expenditure Item Vacant Occupied Project
Fire Department $145.16 per service pop. $0 $1,887 $41,167 General Government $27.55 per service pop. $0 $358 $7,813 PB&R $43.33 per service pop. $0 $563 $12,288
Planning $31.42 per service pop. $0 $408 $8,910
Police Department $224.86 per service pop. $0 $2,923 $63,772 Public Works $87.31 per service pop. $0 $1,135 $24,761
Total Annual Expenditures $559.63 per service pop. $0 $7,275 $158,711 Source: Economic & Planning Systems
Expenditure Estimation
Factors
1 Existing Development
[1] See Table 10 for cost estimates and Table 3 and Table 4 for estimated service populations. 30 10.d
Packet Pg. 219 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems Appendix Table A-8
Annual Household Income Estimate - Ownership Units
Pacifica Sea Bowl Fiscal Impact Analysis; EPS #231099
Wgt. Avg.

Item Formula Ownership HH
Sale Price
1 a $1,511,522
Downpayment b = a * 0.2 $302,304
Mortgage c = a - b $1,209,217
Payments d = PMT fn:30-Yr @ 5% $78,661
Taxes, Insurance, & Maintenance e = a * 0.02 $30,230
Annual HOA Dues
2 f $200
Total Annual Housing Costs g = d + e + f $109,092
Annual HH Income
3 g / 0.43 $253,702
Source: Toll Brothers; Economic & Planning Systems
[1] per Table 3.
[2] Assumes all products pay $200/month.
[3] Assumes total annual housing costs are equal to 43% of annual household income based on developer-provided information.
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Packet Pg. 220 Attachment: Attachment D – Sea Bowl Residential Proposal Analysis by Economic & Planning Systems Attachment E
OTHER REVENUE MEASURES NOT CONSIDERED –

GENERAL FUND
In addition to the Business License Tax, Utility Users Tax and Parcel Tax, there are several revenue measures that were not considered to address the City’s General Fund revenue shortfall in future years. They are summarized in the sections below.

Local Transactions and Use (Sales) Tax
Voters in the City of Pacifica approved Measure Y, a ½ Cent Local Transactions and Use (Sales) Tax (TUT) at the November 2022 General Election. This local tax generates $2.6 Million per year. It was collected for the City by the State starting in April 2023 for a period of 9 years.

The City will need to bring this ½ Cent TUT back to the voters prior to the sunset date in 2031 if the City wishes to continue to collect this tax. The 10 Year model reflects the ½ Cent TUT ending on the sunset date.

The base Sales Tax and TUT rate in San Mateo County is 9.375%. Twelve of the country’s 20 cities have received voter approval for a TUT in addition to the base Sales Tax and TUT rate.

Under State Law, the amount of Sales Tax and Local Transactions and Use Taxes levied by cities, the county and local transportation agencies are capped.

In San Mateo County, the cap is currently 9.875% and can only be increased by a vote of the legislature and the signature of the Governor. With the approval of the ½ Cent TUT in Pacifica, the City’s tax rate is now at the cap, as it is in several neighboring cities as shown below.

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Packet Pg. 221 Attachment: Attachment E – Other Revenue Measures Not Considered (6078 : Revenue Generation Opportunities Study Session) There is the potential for two local TUT measures to be on the November 2026 ballot. The first is a regional TUT tax to support transit in the Bay Area. If passed by the voters, the tax would be set at a half-cent in Alameda, Contra Costa, San Mateo, and Santa Clara counties, with San Francisco having the option to increase its rate to 1% to provide additional support for Muni.SB 63 is on the Governor’s desk awaiting a signature or veto.

The second is a potential extension of the ½ cent Countywide Measure A Transportation Tax adopted by the voters in 1989 and extended in 2004 with a sunset date in 2033. This could be on the November 2026 General Election ballot along with a second proposal to increase the Measure A tax from ½ cent to ¾ cent (the increase would need approval by the State Legislature and the Governor.

Transient Occupancy (Hotel) Tax
Voters in the City of Pacifica approved a 3% increase in the Transient Occupancy (Hotel) Tax or TOT at the November 2024 General Election. This local tax was collected for the City by the State starting in January 2025.

TOT is charged to renters of hotel, motel, and short-term rentals. The TOT is charged in 430 of the 483 cities in California. 15 of the 20 cities in San Mateo County charge TOT (the other 5 cities in the county do not have hotels). The trend for TOT in the Bay Area is for cities to increase this rate from 10% to 12% to 14% to 15.5%.

The City’s TOT rate of 15% matches the TOT rate in neighboring Half Moon Bay and is 0.5% below the 15.5% TOT rate in Palo Alto and Menlo Park, the highest TOT rates in the State as shown in the table below:

TOT Rate City

15.5% Menlo Park
15% Half Moon Bay
Pacifica
14% Brisbane
East Palo Alto
San Bruno
San Carlos
San Mateo
South San Francisco
13% Daly City
12% Belmont
Burlingame
Colma
Foster City
Millbrae
Redwood City

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Packet Pg. 222 Attachment: Attachment E – Other Revenue Measures Not Considered (6078 : Revenue Generation Opportunities Study Session) TOT revenues in Pacifica are estimated at $2,358,000 declining to $1,580,700 in fiscal year 2027- 28 due to Council approved changes in the ordinance surrounding short-term rentals. An increase of the TOT rate by 0.5% in Pacifica would generate $78,600 in the current fiscal year (if in effect) and would then decline to $52,690 in fiscal year 2027-28.

The small amount of revenue from this option and the resulting status as one of the state’s highest TOT rates charges make this option not worth pursuing.

Real Property Transfer Tax (Charter Cities)
Charter Cities in California may adopt property transfer taxes which are in lieu of the state statutory documentary transfer tax applicable in general law cities. The City of Pacifica is a general law city.

To have voters consider this revenue option it would be necessary for the City to propose a ballot measure (or measures) that would a) convert Pacifica from a general law city to a charter city and b) propose a property transfer tax as a Charter City. In November 2024, two cities (Benicia and St. Helena) proposed such a change and tax and both measures did not pass. However, two existing Charter Cities (Berkeley and Mountain View) did propose an increase to their property transfer tax which voters approved. Raising $4 Million per year in Berkeley and $11 Million per year in Mountain View.

It is also important to note that a proposed State Ballot Initiative that prohibits property transfer taxes may qualify for the November 2026 General Election ballot. This revenue option is not recommended for further consideration.

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Packet Pg. 223 Attachment: Attachment E – Other Revenue Measures Not Considered (6078 : Revenue Generation Opportunities Study Session) 1 Memorandum
To: Marisol Gómez
Director of Finance and Administrative Services
City of Pacifica
From: Peter Wong
Date: November 4, 2025
Re: Issuing General Obligation Bonds for General Law Cities The following is a generic overview of the process for issuing general obligation (GO) bonds. Once a city decides to sell bonds or any other type of securities, it is best to retain legal counsel who can properly guide the municipality through the process.

LEGAL BACKGROUND:

California cities are subject to two primary legal constraints when issuing GO bonds. First, Article XVI, Section 18 of the California Constitution imposes a debt limit, preventing cities from incurring debt beyond their annual income without two-thirds voter approval. Second, Section 43605 et seq of the California Government Code sets a statutory limit on GO debt at 15% of the gross assessed property value (or adjusted to 3.75% of full market value).

BASIC STEPS TO GO BOND ISSUANCE:

1. Bond Resolution. Once a city decides to use GO bonds to finance local projects, the city council of a general law city must adopt a resolution by a two-thirds vote. The resolution places a GO bond measure on the election ballot and must clearly describe the capital project(s) to be financed, the bond amount, and the uses of the bond proceeds.

2. Ballot Measure and Election Campaign. GO bonds repaid with property taxes require two-thirds voter approval. The city prepares and distributes election materials, including ballot arguments, project details, and the projected tax rate impact. If the ballot passes, a Citizens' Bond Oversight Committee is appointed to monitor the spending of bond funds.

3. Financial Analysis and Bond Sale Preparation. After voter approval, the city's finance department or a municipal advisor analyzes the debt structure, considering market conditions and the taxable status of the bonds. The repayment structure is determined, which specifies the timing and amount of principal and interest payments, including final bond maturity. The city and legal counsel prepare official bond documents, including a preliminary and final Official Statement which disclose financial and bond details to investors. Compliance with SEC, MSRB and IRS rules is required.

4. Selling the bonds. Bonds may be sold through either a negotiated sale with an underwriter or a competitive bid. Marketing of the bonds needs to follow industry best practices to secure the lowest possible interest rate on pricing day.
130 Battery Street, Suite 560
San Francisco, CA 94111
Backstrom McCarley Berry & Co., LLC
Attachment C

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Packet Pg. 224 Attachment: Attachment F – Memo From The City’s Financial Advisor Capital Funding Options (6078 : Revenue Generation Opportunities Study Issuing General Obligation Bonds
2 OTHER FINANCING ALTERNATIVES TO CONSIDER:

There are always direct and indirect costs to any financing strategies. While this brief memo does not detail those costs, below are general considerations:

PayGo. This approach avoids interest costs of a loan but carries the opportunity cost from foregone investment income. For long-term capital projects, intergenerational equity—whether today’s taxpayers or future ones bear the burden—is a key consideration.

General Obligation Bonds. GO bond can be efficient for large projects, but requires a costly, time-consuming campaign and a two-thirds voter majority. For authorizations in the tens of millions of dollars, the GO bonds make sense. For smaller needs (under $10 million), a cost-benefit analysis should be conducted to ensure the upfront election and issuance costs are justified.

Certificates of Participations (COP), or General Fund Lease. COPs provide an alternative to GO bonds, avoiding the need for an election. This option may be preferable if the likelihood of achieving two-thirds voter approval is low. Under a hypothetical scenario whereby a city allocates $1 million annually from its general fund for debt service payments, the following illustrates the bonding capacity that can be supported:

Maturity 20-year COP 25-year COP 30-year COP
Par Amount $12.5 million $14.2 million $15.5 million
The bond sizing assumes level annual DS at 5% coupon. The above estimates are for illustration purposes only using conservative assumptions.

Direct Bank Loan vs. Securities. Generally, GO bonds provide the lowest interest rates, followed by COPs, then bank loans. Bank loan efficiency depends heavily on size: the breakeven for bank loans is typically $5-$7 million. Issuance costs for bank loans are often one-third those of GO bonds, and when election costs are added, the difference grows. For smaller funding needs, bank loans may be the more efficient and costeffective option.

Parcel Tax-Secured Bonds. Parcel tax-secured bonds may be an option but will be more complicated than GO bonds. As with GO bonds, a parcel tax will also require a 2/3 vote. Parcel Tax bonds are not common because parcel tax measures are usually intended to fund ongoing operations and not to secure a bond financing. A significant advantage of a parcel tax is that the revenue can be used for salaries and other operating expenditures. The following are two examples of parcel tax-secured bonds that were priced within the past 12 months.

1. Marin County Emergency Radio System (911) Authority sold $5.8 million bonds for 20-year with a

1.10x DS coverage; charging home properties $29 and was passed by 69%, and the parcel tax is Teeter Plan secured.

2. Santa Fe Springs (LA County) sold $31.81 mm with a 2.70x coverage for 25 yrs; approved by 76.7% of voters; and no Teeter Plan (which may partly explain the higher DS coverage).

If the projected annual revenue from a parcel tax is $4 million, a parcel tax-secured bond can be sized up to approximately $45 million over 20 years, assuming a 5% interest rate and a 1.10x debt service coverage ratio. This estimate also assumes the bonds qualify under the San Mateo County Teeter Plan. With county support, the bonds may achieve a credit rating of AA+ or higher.

One potential advantage of a parcel tax is that, if approved by voters, the revenue may be used to support operating expenses such as salaries and maintenance.

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Packet Pg. 225 Attachment: Attachment F – Memo From The City’s Financial Advisor Capital Funding Options (6078 : Revenue Generation Opportunities Study Issuing General Obligation Bonds
3 In contrast, general obligation (GO) bonds are typically considered a stronger credit than parcel taxsecured bonds and therefore carry lower interest costs. However, GO bonds can only be used to fund capital projects. Since they do not require a coverage ratio above 1.00x and benefit from lower interest rates, GO bonds can generate greater net proceeds for capital funding.

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Packet Pg. 226 Attachment: Attachment F – Memo From The City’s Financial Advisor Capital Funding Options (6078 : Revenue Generation Opportunities Study 1 Memorandum
Office of the City Manager
To: City Council
From: Yulia Carter, Assistant City Manager
Alyssa Corsetti, Management Analyst II
Alex Greenwood, Principal, Alex Greenwood Group
Via: Kevin S. Woodhouse, City Manager
Date: November 5, 2025
Subject: Update on Economic Development Work Plan
Introduction
The City Council has given increased priority to economic and housing development, recognizing that they are critical economic drivers to help expand Pacifica’s economic base, achieve long-term fiscal sustainability, and address the City’s structural budget deficit.

During the past three months, staff from the City Manager’s Office, along with consultant support and staff from other departments, developed a focused Economic and Housing Development Work Plan to guide staff efforts and maintain progress on the City’s most urgent development projects.

This memo provides a brief Executive Summary of the Work Plan, for Council’s information as an attachment to the report for the Fiscal Sustainability Study Session scheduled for November 10.

The full, detailed Work Plan will be shared with Council in early 2026, and after the hiring of the new Economic and Housing Development Manager.

Basic Principles for the City’s Economic Development Work Plan Economic Development is a critical professional function of cities to help communities achieve financial stability and improve quality of life. Economic Development accomplishes these goals by:
• Attracting investment to revitalize the commercial areas of Pacifica, including housing and mixed-use development;
• Creating opportunities for quality jobs, business ownership, and wealth creation; • Supporting local businesses;
• Planning and “placemaking” to create healthy, beautiful, vibrant public places that promote a sense of community;
• Attracting shoppers and visitors to support local businesses; and

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Packet Pg. 227 Attachment: Attachment G - ED Workplan Exec Sum Final (6078 : Revenue Generation Opportunities Study Session) 2 • Generating tax revenues from new businesses, investment, and housing and mixed-use construction.

Staff has developed an Economic and Housing Development Work Plan that is consistent with the Council-adopted Strategic Plan and that reflects ongoing Economic Development efforts. The Work Plan reflects a strategic approach to leveraging limited resources toward the City’s highest priorities, like revitalizing commercial areas, accelerating housing and mixed-use opportunities, and enhancing Pacifica’s visibility as both a destination and a place to live, work, and invest.

Given the City’s critical fiscal environment and the evolving opportunities and challenges that shape local economic conditions, this Work Plan is intended to remain fluid and adaptive, allowing staff to adjust priorities and timelines as new conditions, opportunities, or constraints emerge.

Proposed Economic Development Work Plan
The proposed ED Work Plan organizes staff’s efforts into four major work areas, or goals:

Goal #1: Catalyst Projects & Opportunity Sites
These are real estate opportunities that, if developed properly, would create a major “anchor” and generate significant new jobs, investment, construction, tax revenue, support for local businesses, and enhancement of Pacifica’s image and visibility.

A. 2212 Beach Blvd. – Site due diligence, market analysis, feasibility analysis, CEQA analysis & compliance, infrastructure planning, marketing the site to the development community, selecting a developer, refining the project concept, and negotiating development agreement(s).

B. Pacific Manor Shopping Center – Facilitating meetings with property owners to improve the center signage, building exteriors, tenant mix, and to explore restructuring the ownership interests to improve center management. In addition, the City could identify outside investors who may be willing to help redevelop the center.

C. Downtown / Sharp Park – Work includes: Palmetto streetscape improvements; attracting high quality eating & drinking businesses, retail, and cultural/entertainment uses; events; exploring popups, kiosks, and other interim uses of vacant lots; upgrades to Pacifica Pier to create a visitor destination; work with the City of San Francisco to explore opportunities to improve Sharp Park Golf Course; pursuing opportunities to develop vacant downtown lots; and exploring a potential Property-Based Business Improvement District (PBID) to help fund marketing, events, and other enhanced services.

D. Other Opportunity Sites & Districts – Supporting the property owners and brokers representing Linda Mar Shopping Center, Pedro Point Shopping Center, the Rockaway District, and other important commercial areas, to pursue business retention, attraction, and development opportunities.

Goal #2: Business Attraction
Strategic marketing and other activities to help pave the way for new businesses, jobs, and investment.

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Packet Pg. 228 Attachment: Attachment G - ED Workplan Exec Sum Final (6078 : Revenue Generation Opportunities Study Session) 3 A. Marketing & Tourism – Developing an integrated strategy of brochures, social media, press, website content, signage, and other initiatives to build the city’s image and identity as a business and tourist destination; coordinating with Pacifica Tourism and Marketing District (PTMD), Half Moon Bay and other partner organizations to explore better & more coordinated marketing of events & develop a comprehensive destination marketing strategy.

B. Events – Coordinating with event organizers to improve existing events and harness greater marketing, tourism, and economic development benefits from existing events; exploring the addition of events to drive increased tourism; working with PTMD to jointly fund coordinated marketing and planning of regional events; exploring a partnership to link the Mavericks event with Pacifica; and hosting rotating pop-up markets in Downtown, Rockaway, Pacific Manor, or other districts to drive foot traffic and attract visitors.

C. Outreach & Assistance to prospective & incoming new businesses – Exploring opportunities to upgrade an existing hotel to a national franchise; partnering with a marketing firm to manage PTMD and revamp the VisitPacifica website; outreach to hotel developers; coordinating with local property owners and brokers on retail attraction; attending a retail attraction conference (ICSC); pursuing opportunities to attract health care and medical office uses; regional partnerships; and looking at opportunities to locate a research or academic institution in Pacifica.

Goal #3: Business Retention
Working with existing local businesses to help them solve financial or other problems, and to expand their business.

A. Communication & Collaboration with Local Businesses – Monthly business goodwill visits; meeting with commercial brokers to discuss trends, issues, and opportunities; holding focus group meetings with various business groups to better understand their concerns and ways the City can support them; and developing a line of brochures and social media posts on a variety of helpful topics for local businesses.

B. Technical Assistance to local entrepreneurs & business owners – Partnerships with the Small Business Development Center (SBDC), Renaissance Center, SCORE, financial nonprofits and/or U.S. Small Business Administration to provide seminars, one-on-one business consulting, access to capital, or other assistance; partnerships with the Workforce Development Board, Skyline Community College, or other institutions to provide job training and placement; and developing a matching grant program to help local businesses fund façade improvements and/or tenant improvements.

Goal #4: Planning, Analysis, Grants & Policy Development Developing long-term plans, policies, grant applications, and initiatives that will make it easier and more efficient to do business in Pacifica, position the City to gradually improve its business community, and generate funding for improvements to commercial districts.

A. Improving the City’s Permit & Development Process – Coordinating with the Community Development Department on major new developments; facilitating communication during the permit process to identify and resolve permit issues; serving as City ambassadors with property and business owners during the permit process; facilitating discussions to resolve permit issues; partnering with San Mateo County Health

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Packet Pg. 229 Attachment: Attachment G - ED Workplan Exec Sum Final (6078 : Revenue Generation Opportunities Study Session) 4 Services to educate local businesses on the County requirements for food businesses; and working with the Community Development Department to explore ways to improve the planning review/approval process.

B. Grants, Financing Districts & Revenue Generation Initiatives – Work includes:
researching Federal, State, and/or County funding opportunities for high-priority infrastructure projects; exploring a potential Property-Based Business Improvement District (PBID) in Downtown/Sharp Park and/or other districts; exploring potential opportunities for a Community Facility District (CFD), Enhanced Infrastructure Financing District (EIFD) and/or other revenue-generating initiatives.

Coordination with the Economic Development Committee
The Economic Development Committee (EDC) has its own work plan, which is separate from the Work Plan described above, but includes tasks that can complement the Economic and Housing Development Work Plan. As directed by City Council, the EDC is a citizen volunteer organization that provides:
• Policy-level input and recommendations to City Council; • Help in sharing information between between the City and the business community; • Help connecting staff with businesses, property owners, and community organizations; • Advocacy for Pacifica’s business community.

By contrast, the Economic and Housing Development Work Plan, as described above, includes many technical tasks such as market analysis, real estate negotiations, marketing, creating financing districts, or helping to retain a local business.

Although the work of the EDC is different and separate from the work performed by City staff, it is important for staff and the EDC to communicate and coordinate with each other. Staff looks forward to periodically updating the EDC as the Work Plan is implemented, and to seek the EDC’s feedback on an on-going basis.

Conclusions & Next Steps
In launching and carrying out this Work Plan, several logistics must be considered:
• As mentioned above, the Work Plan is a living document that must be updated frequently.

While it is always useful to have a “look ahead” for how staff will plan to focus their time, it is critical to allow staff the flexibility to revise the Work Plan to respond to unforeseen circumstances.
• Early on during the launch of the Work Plan, it will be important to carry out a few tasks that will be easy wins. By “easy wins” we refer to small, high-priority tasks that can be completed quickly, with little or no cost, and will make a noticeable, public impact, and thereby build trust, credibility, and good will among the local business community. • Several of the items in this Work Plan will require the City Council to appropriate funds.

Depending on the City’s budgetary conditions, staff may pursue a mid-year budget appropriation to fund a package of Economic Development initiatives, such as:
o Site engineering & due diligence for the 2212 Beach Blvd. project ($75,000) o PBID formation consultant & related expenses ($75,000) o Phase 1 streetscape improvements for Downtown / Sharp Park ($50,000)

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Packet Pg. 230 Attachment: Attachment G - ED Workplan Exec Sum Final (6078 : Revenue Generation Opportunities Study Session) 5 o Participation at ICSC and other trade shows to support business attraction ($5,000) o Miscellaneous marketing, social media, printing, and related costs ($5,000) o Seed funding for CFD/EIFD formation (amount TBD)

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Packet Pg. 231 Attachment: Attachment G - ED Workplan Exec Sum Final (6078 : Revenue Generation Opportunities Study Session)