Agenda packet — San Carlos City Council, November 27, 2023 (part 1 of 3)

CITY OF SAN CARLOS
City Council/Successor Agency to the
Redevelopment Agency/Housing Authority
Regular Meeting
November 27, 2023 7:00 PM
Council Chambers, City Hall
600 Elm Street, San Carlos, CA 94070
www.cityofsancarlos.org
AGENDA
Members of the public will have the option to observe the meeting and address the City Council as outlined below.

InPerson Participation:

Location. City Hall – 600 Elm Street, Council Chambers.

Masks are no longer required, but are still recommended by the California Department of Health. To maintain public health and safety, please do not attend in person if you are experiencing respiratory symptoms (e.g. cough, runny nose, and/or sore throat).

Provide Public Comment. To address the City Council on any item on the posted agenda, fill out a Request to Speak Form located in the back of the Council Chambers and submit it to the City Clerk; or, you may raise your hand when the Mayor calls for public comments.

Remote Participation :

Observe via:
Zoom. https://us02web.zoom.us/j/88256140939; or call 16699009128 and enter the Meeting ID #: 882 5614 0939
Meeting Webportal . www.cityofsancarlos.org/agenda Local TV. Comcast Channel 27 and AT&T Uverse Channel 99 Public comments for this meeting will not be accepted on Zoom. Please see above details for providing public comments inperson or you may also submit them to the City Council via email at [email protected].

Should any Councilmember(s) need to participate in this meeting remotely, as authorized by Assembly Bill 2449, public comments will also be accepted remotely via Zoom (in addition to the ways outlined above). To provide public comment remotely, join the meeting via Zoom (see above access information), and during the public comment period for the agenda item you wish to address, use the “raise hand” feature. If joining Zoom by phone, press *9 to “raise hand”.

MAYOR: Adam Rak
COUNCIL: Ronald Collins, John Dugan, Sara McDowell, Pranita Venkatesh

1. CALL TO ORDER

2. ASSEMBLY BILL 2449 TELECONFERENCE REQUESTS

3. PLEDGE OF ALLEGIANCE
a. Led by Scout BSA Troop 4301.

4. CHANGES TO THE ORDER OF THE AGENDA

5. REPORT FROM CLOSED SESSION

6. PRESENTATIONS
a. Present a City Coin to Community Volunteer Tim King. b. Present a Proclamation to Lydia Rak with Scout BSA Troop 4301 Upon Receiving Her Eagle Scout Award.

7. COUNCIL COMMUNICATIONS AND ANNOUNCEMENTS
Council Communications and Announcements are brief items from members of the City Council regarding upcoming events in the community and correspondence that they have received. They are informational in nature and no action will be taken on these items at this meeting.

8. CONSENT CALENDAR
a. Motion to Waive Reading of All Ordinances.
b. Approve the October 9, 2023 City Council Regular Meeting Minutes. c. Approve the October 16, 2023 City Council Special Meeting Minutes. d. Adopt a Resolution Accepting the Annual Report for the Year Ended June 30, 2023 on Development Impact Fees, Reaffirming the Necessity for Development Impact Fees, and Making Findings Related to Impact Fee Balances and InLieu Fees. e. Adopt a Resolution Accepting the City of San Carlos’ Annual Comprehensive Financial Report for the Fiscal Year Ending June 30, 2023. f. Accept the Fiscal Year 202324 First Quarter Financial Report for the Period Ending September 30, 2023.
g. Accept the Fiscal Year 202324 First Quarter Investment Report for the Period Ending September 30, 2023.
h. Deny Claim of Gary Hunt.
i. Adopt a Resolution Approving the Winterization of the Landslides at Big Canyon Park behind 995 Crestview Drive and 3144 Brittan Avenue and Authorizing the City Manager to Execute a Public Projects Agreement with Brannon Corporation in the Amount of $110,220.
j. Adopt a Resolution Approving the Winterization of the Landslides at Big Canyon Park behind 314161 Melendy Drive, across from 270 Dartmouth Avenue, and at the Oakley Avenue Access Road; and Authorizing the City Manager to Execute a Public Projects Agreement with Redwood Engineering and Construction in the Amount of $105,406; and Authorizing a Contingency Budget in the Amount of $21,081. k. Adopt a Resolution Authorizing the Submittal of Individual Grant Applications for all Grant Programs Administered by CalRecycle for which the City of San Carlos is Eligible and Authorizing the City Manager to Execute all Documents Necessary to Implement and Secure Payment.

9. REPORTS TO COUNCIL
Reports to the Council are updates on key City Projects by City Staff and City Council Subcommittees. They are informational in nature, and no action will be taken on these items at this meeting.
a. Receive a Report on Current Trail Projects.

10. PUBLIC HEARING
a. Consideration of the Following Actions for the Proposed Pedestrian Mall:
i. Consider all Written Objections to the Establishment of the Proposed Pedestrian Mall on the 700 Block of Laurel Street Between Cherry and Olive Streets from Owners of Lands Abutting the Proposed Pedestrian Mall;
ii. Adopt a Resolution Establishing a Pedestrian Mall on the 700 Block of Laurel Street Between Cherry and Olive Streets to Vehicular Traffic Under the Pedestrian Mall Law of 1960 or Alternatively if a Sufficient Number of Protests are Received, a Resolution Abandoning the Pedestrian Mall; iii. Consider All Claims of Legal Damage by Persons Owning, or Having a Legal or Equitable Interest in, Any Real Property Which Might Suffer Legal Damage by Reason of the Establishment of the Proposed Pedestrian Mall and in the Event of Such Claims, Consider a Resolution Directing the City Attorney or other Attorney Designated by the City Attorney to Bring an Action or Actions in the Superior Court for a Determination of Legal Damages; and
iv. Introduce an Ordinance Establishing a New Chapter 12.40 – Pedestrian Malls, in the San Carlos Municipal Code.
b. Consideration of Introducing an Ordinance Amending San Carlos Municipal Code Title 18 – Zoning: Sections 18.15 – General Site Regulations, 18.21 – Performance Standards, and 18.28 – Zoning Clearance, for Consistency with the County of San Mateo’s Comprehensive Airport Land Use Compatibility Plan for the Environs of San Carlos Airport.
c. Consideration of the Following Actions for the Indigo Hotel Project at 501 Industrial Road:
i. Adopt a Resolution Certifying the Final Environmental Impact Report, Adopting the California Environmental Quality Act Findings of Fact, and Approving the Associated Mitigation Monitoring and Reporting Program; ii. Introduce an Ordinance Amending the Zoning Map to Change the Zoning of the Site from LCLandmark Commercial Zoning District to PDPlanned Development Zoning District and Approving the Associated Planned Development Plan; and
iii. Introduce an Ordinance Approving a Development Agreement with Holly Hotel Group, LLC.

11. AGENDA SETTING
Items discussed in this Agenda Setting Section will be considered by the Council for placing on a future agenda. No action will be taken on these items at this meeting.

12. PUBLIC COMMENT
Persons wishing to address the City Council on matters NOT on the posted agenda may do so. Each speaker is limited to two minutes.

If the item you are speaking on is not listed on the agenda, please be advised that the City Council may briefly respond to statements made or questions posed as allowed under the Brown Act (Government Code Section 54954.2). The City Council's general policy is to refer items to staff for attention, or have a matter placed on a future City Council agenda for a more comprehensive action or report and formal public discussion and input at that time.

13. ADJOURNMENT
Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection upon request.

In compliance with the Americans with Disabilities Act and Title VI, and as outlined in the City’s Reasonable Accommodations Policy, if you need special assistance or translation services to participate in this meeting, please contact the City Clerk’s Office at (650) 8024222 or via email at [email protected]. Notification in advance of the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.

1 CITY OF SAN CARLOS
City Council/Successor Agency to the
Redevelopment Agency/Housing Authority
Regular Meeting
November 27, 2023 7:00 PM
Council Chambers, City Hall
600 Elm Street, San Carlos, CA 94070
www.cityofsancarlos.org
AGENDA
Members of the public will have the option to observe the meeting and address the City Council as outlined below.

InPerson Participation:

Location. City Hall – 600 Elm Street, Council Chambers.

Remote Participation :

MAYOR: Adam Rak
COUNCIL: Ronald Collins, John Dugan, Sara McDowell, Pranita Venkatesh

1. CALL TO ORDER

2. ASSEMBLY BILL 2449 TELECONFERENCE REQUESTS

3. PLEDGE OF ALLEGIANCE
a. Led by Scout BSA Troop 4301.

4. CHANGES TO THE ORDER OF THE AGENDA

5. REPORT FROM CLOSED SESSION

6. PRESENTATIONS
a. Present a City Coin to Community Volunteer Tim King. b. Present a Proclamation to Lydia Rak with Scout BSA Troop 4301 Upon Receiving Her Eagle Scout Award.

11. AGENDA SETTING
Items discussed in this Agenda Setting Section will be considered by the Council for placing on a future agenda. No action will be taken on these items at this meeting.

12. PUBLIC COMMENT
Persons wishing to address the City Council on matters NOT on the posted agenda may do so. Each speaker is limited to two minutes.

13. ADJOURNMENT
Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection upon request.

2 CITY OF SAN CARLOS
City Council/Successor Agency to the
Redevelopment Agency/Housing Authority
Regular Meeting
November 27, 2023 7:00 PM
Council Chambers, City Hall
600 Elm Street, San Carlos, CA 94070
www.cityofsancarlos.org
AGENDA
Members of the public will have the option to observe the meeting and address the City Council as outlined below.

InPerson Participation:

Location. City Hall – 600 Elm Street, Council Chambers.

Remote Participation :

MAYOR: Adam Rak
COUNCIL: Ronald Collins, John Dugan, Sara McDowell, Pranita Venkatesh

1. CALL TO ORDER

2. ASSEMBLY BILL 2449 TELECONFERENCE REQUESTS

3. PLEDGE OF ALLEGIANCE
a. Led by Scout BSA Troop 4301.

4. CHANGES TO THE ORDER OF THE AGENDA

5. REPORT FROM CLOSED SESSION

6. PRESENTATIONS
a. Present a City Coin to Community Volunteer Tim King. b. Present a Proclamation to Lydia Rak with Scout BSA Troop 4301 Upon Receiving Her Eagle Scout Award.

11. AGENDA SETTING
Items discussed in this Agenda Setting Section will be considered by the Council for placing on a future agenda. No action will be taken on these items at this meeting.

12. PUBLIC COMMENT
Persons wishing to address the City Council on matters NOT on the posted agenda may do so. Each speaker is limited to two minutes.

13. ADJOURNMENT
Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection upon request.

3 CITY OF SAN CARLOS
City Council/Successor Agency to the
Redevelopment Agency/Housing Authority
Regular Meeting
November 27, 2023 7:00 PM
Council Chambers, City Hall
600 Elm Street, San Carlos, CA 94070
www.cityofsancarlos.org
AGENDA
Members of the public will have the option to observe the meeting and address the City Council as outlined below.

InPerson Participation:

Location. City Hall – 600 Elm Street, Council Chambers.

Remote Participation :

MAYOR: Adam Rak
COUNCIL: Ronald Collins, John Dugan, Sara McDowell, Pranita Venkatesh

1. CALL TO ORDER

2. ASSEMBLY BILL 2449 TELECONFERENCE REQUESTS

3. PLEDGE OF ALLEGIANCE
a. Led by Scout BSA Troop 4301.

4. CHANGES TO THE ORDER OF THE AGENDA

5. REPORT FROM CLOSED SESSION

6. PRESENTATIONS
a. Present a City Coin to Community Volunteer Tim King. b. Present a Proclamation to Lydia Rak with Scout BSA Troop 4301 Upon Receiving Her Eagle Scout Award.

11. AGENDA SETTING
Items discussed in this Agenda Setting Section will be considered by the Council for placing on a future agenda. No action will be taken on these items at this meeting.

12. PUBLIC COMMENT
Persons wishing to address the City Council on matters NOT on the posted agenda may do so. Each speaker is limited to two minutes.

13. ADJOURNMENT
Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection upon request.

4 CITY OF SAN CARLOS
City Council/Successor Agency to the
Redevelopment Agency/Housing Authority
Regular Meeting
November 27, 2023 7:00 PM
Council Chambers, City Hall
600 Elm Street, San Carlos, CA 94070
www.cityofsancarlos.org
AGENDA
Members of the public will have the option to observe the meeting and address the City Council as outlined below.

InPerson Participation:

Location. City Hall – 600 Elm Street, Council Chambers.

Remote Participation :

MAYOR: Adam Rak
COUNCIL: Ronald Collins, John Dugan, Sara McDowell, Pranita Venkatesh

1. CALL TO ORDER

2. ASSEMBLY BILL 2449 TELECONFERENCE REQUESTS

3. PLEDGE OF ALLEGIANCE
a. Led by Scout BSA Troop 4301.

4. CHANGES TO THE ORDER OF THE AGENDA

5. REPORT FROM CLOSED SESSION

6. PRESENTATIONS
a. Present a City Coin to Community Volunteer Tim King. b. Present a Proclamation to Lydia Rak with Scout BSA Troop 4301 Upon Receiving Her Eagle Scout Award.

11. AGENDA SETTING
Items discussed in this Agenda Setting Section will be considered by the Council for placing on a future agenda. No action will be taken on these items at this meeting.

12. PUBLIC COMMENT
Persons wishing to address the City Council on matters NOT on the posted agenda may do so. Each speaker is limited to two minutes.

13. ADJOURNMENT
Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection upon request.

5 San Carlos City Council/Successor Agency to the
Redevelopment Agency/Housing Authority Regular Meeting
Council Chambers, City Hall
600 Elm Street, San Carlos, CA 94070
October 9, 2023 7:00 PM

MINUTES

ROLL CALL

City Council Present: Adam Rak, Mayor
Ronald Collins, Councilmember
John Dugan, Vice Mayor
Sara McDowell, Councilmember
Pranita Venkatesh, Councilmember

Staff Present: Nil Blackburn, Assistant City Manager
Lisa Costa Sanders, Principal Planner Consultant
Steven Machida, Public Works Director
Jeff Maltbie, City Manager
Rebecca Mendenhall, Administrative Services Director
Tyler Muela, Recreation Supervisor
Crystal Mui, City Clerk
Gregory Rubens, City Attorney
Al Savay, Community Development Director

1. CALL TO ORDER

Mayor Rak called the meeting to order at 7:00 PM.

2. ASSEMBLY BILL 2449 TELECONFERENCE REQUESTS

Mayor Rak announced that there are no AB 2449 teleconference requests.

3. PLEDGE OF ALLEGIANCE

Mayor Rak led the Pledge of Allegiance.

4. CHANGES TO THE ORDER OF THE AGENDA

None.

5. REPORT FROM CLOSED SESSION

None.

6. PRESENTATIONS

a. Present a Proclamation Recognizing October 2023 as Domestic Violence Awareness Month.

8.b
November 27, 2023

Packet Pg. 6

Mayor Rak presented a proclamation to CORA (Community Overcoming Relationship Abuse) Boardmember Donald Magilligan recognizing October 2023 as Domestic Violence Awareness Month.

Mr. Magilligan thanked the Council and spoke on the services that CORA provides in the community.

7. COUNCIL COMMUNICATIONS AND ANNOUNCEMENTS

Councilmember Collins expressed appreciation to the following staff:
- City Clerk Crystal Mui for handling the disruptive commenters at Council’s September 25, 2023 meeting.
- Public Works Director Steven Machida and his maintenance crew for installing the HAWK lighting at Belmont Avenue and El Camino Real.
- Parks and Recreation Director Amy Newby and her staff for the Art and Wine Festival this past weekend.

Councilmember Collins also clarified his comments provided at the last meeting , stating that he is comfortable with exploring all the housing options for the Northeast Area.

Councilmembers McDowell and Venkatesh and Mayor Rak also commended staff and volunteers for a successful Art and Wine Festival.

Councilmember McDowell also reminded the community of the northbound 101 closure this weekend.

8. CONSENT CALENDAR

MOTION: Approve City Council Consent Calendar Items ‘a’ through ‘j’.

MOVER: John Dugan
SECONDER: Ronald Collins
AYES: Collins, McDowell, Venkatesh, Dugan, Rak
NAYS: None.

RESULT: Motion Passed 5 – 0

a. Motion to Waive Reading of All Ordinances.

b. Approve the September 11, 2023 City Council Special Meeting Minutes.

c. Accept the Quarterly Reports from City Commissions and Boards.

d. Adopt a Resolution Accepting the Installation of Sports Field Lighting at Burton and Highlands Parks Phase II, Project C1818 and Authorizing the Public Works Director to Issue and Record a Notice of Completion. Resolution 2023-120

e. Adopt a Resolution Approving and Adopting a Comprehensive Master Salary Schedule for Fiscal Year 2023-24 in Accordance with Title 2 of the California Code of Regulations Section 570.5 and the California Employees Retirement System ("CalPERS"). Resolution 2023-121

f. Adopt a Resolution Accepting the 2022 Traffic Calming Improvement Project C1807 and Authorizing the Public Works Director to Issue and Record a Notice of Completion. Resolution 2023-122

8.b
November 27, 2023

Packet Pg. 7

g. Authorize the City Manager to Sign the Letter Prepared by Staff in Response to the 2022-2023 San Mateo County Civil Grand Jury Report "Bike Safety in San Mateo County: Making Bicycling Safer in the County."

h. Adopt a Resolution Approving an Adjustment of $110,000 for Fiscal Year 2022 -23 and $110,000 for Fiscal Year 2023-24 to the Annual Not to Exceed Amount for Emergency Services for the On-Call Traffic Signal and Maintenance Agreement with Cal-West Lighting and Signal Maintenance; and Authorizing the City Manager to Execute an Amendment to the Agreement.

Resolution 2023-123

i. Approve Artwork for the Utility Box Mural Program, Phase III.

j. Adopt a Resolution Appropriating $100,000 from the General Capital Fund (“Fund 25”) Unassigned Fund Balance to Construct and Install Wooden Planters over the Orange Water Wall Barriers on Laurel Street and San Carlos Avenue. Resolution 2023-124

9. PUBLIC HEARING

a. Consideration of the Below Actions for the Life Science/Research & Development Project at 841 Old Country Road (APNs 046-133-160, 046-134-050, 046-134-060, 046-135-010, 046- 135-020, 046-135-030, 046-135-040, 046-182-100, 046-182-110, 046-182-150):

Principal Planner Lisa Costa Sanders provided background on the development project at 841 Old County Road and highlighted the updated community benefits from the developers. She notified Council of an edit to the Development Agreement (Exhibit B to the 2 nd proposed Ordinance) and then turned the presentation over to the project applicant , Jeff Sobrato, and Architect Marc Pfenninger to provide details on the additional community benefits they added to the project.

Mr. Pfenninger, Ms. Costa Sanders, Fiscal Consultant Jim Simon, City Attorney Greg Rubens, Mr. Sobrato and City Manager Jeff Maltbie responded to Council questions.

Councilmember Collins disclosed that he spoke with Sobrato regarding their proposed additional community benefits.

Councilmembers McDowell and Venkatesh and Mayor Rak noted that they have the same disclosures from what they had previously disclosed at the August meeting when this project was last discussed.

Public Comment
- Jeff Maley, resident, expressed concerns with the mitigated negative declaration and spoke in support of adding purple pipe plumbing to the project.

- Sonia Elkes, resident, echoed Mr. Maley’s support for purple pipe and provided suggestions on addressing traffic in the area.

MOTION: Approve to Close the Public Hearing.

MOVER: John Dugan
SECONDER: Ronald Collins
AYES: Dugan, Collins, McDowell, Venkatesh, Rak
NAYS: None.

RESULT: Motion Passed 5 – 0

8.b
November 27, 2023

Packet Pg. 8

Ms. Costa Sanders noted that, after listening to Council’s discussion this evening, the developer has agreed to add an additional 3 spaces (for a total of 7) at the courtyard during business hours and offered the purple pipe plumbing.

i. Adopt a Resolution Adopting a Mitigated Negative Declaration and Associated Mitigation Monitoring and Reporting Program;

MOTION: Adopt Resolution 2023-125 Adopting a Mitigated Negative Declaration and Associated Mitigation Monitoring and Reporting Program for the 841 Old County Road Project.

MOVER: John Dugan
SECONDER: Ronald Collins
AYES: Venkatesh Dugan, Collins, McDowell, Rak
NAYS: None.

RESULT: Motion Passed 5 – 0

ii. Introduce an Ordinance Amending the Zoning Map to Change the Zoning of the Site from IH – Heavy Industrial Zoning District to PD – Planned Development Zoning District and Approving the Associated Planned Development Plan; and

MOTION: Introduce Ordinance No. 1601 Approving the 841 Old County Road Project Planned Development Plan and Related Zoning Map Amendment to Rezone the Project Site from Heavy Industrial (IH) to Planned Development (PD) at 841 Old County Road (APNs 046- 133- 160, 046-134-050, 046-134-060, 046-135-010, 046-135-020, 046-135- 030, 046-135-040, 046-182-100, 046-182-110, 046-182-150).

MOVER: Sara McDowell
SECONDER: Ronal Collins
AYES: McDowell, Venkatesh Dugan, Collins, Rak
NAYS: None.

RESULT: Motion Passed 5 – 0

iii. Introduce an Ordinance Approving a Development Agreement with the Sobrato Family Foundation.

MOTION: Introduce Ordinance No. 1602 Approving a Development Agreement with the Sobrato Family Foundation, for the 841 Old County Road Project; with an amendment to include seven public designated parking spaces during business hours , a dual pipe recycling system; a temporary closure for maintenance and events addendum (Exhibit D to Exhibit B ); and a booking system maintained by the property management company overseen by the City.

MOVER: John Dugan
SECONDER: Ronald Collins
AYES: Collins, McDowell, Venkatesh Dugan, Rak
NAYS: None.

RESULT: Motion Passed 5 – 0

10. AGENDA SETTING

None.

8.b
November 27, 2023

Packet Pg. 9

11. PUBLIC COMMENT

None.

12. ADJOURNMENT

Mayor Rak adjourned the meeting at 8:09 PM.

Crystal Mui,
City Clerk

8.b
November 27, 2023

Packet Pg. 10

San Carlos City Council/Successor Agency to the
Redevelopment Agency/Housing Authority Special Meeting
Enterprise Conference Room, City Hall
600 Elm Street, San Carlos, CA 94070
October 16, 2023 1:00 PM

MINUTES

ROLL CALL

City Council Present:

Council Absent:

Ronald Collins, Councilmember
John Dugan, Vice Mayor
Sara McDowell, Councilmember
Pranita Venkatesh, Councilmember

Adam Rak, Mayor

Staff Present: Jeff Maltbie, City Manager
Crystal Mui, City Clerk
Gregory Rubens, City Attorney

1. CALL TO ORDER

Vice Mayor Dugan called the meeting to order at 1:00 PM and noted that he will be chairing today’s meeting in Mayor Rak’s absence.

2. 3.

PEDGE OF ALLEGIANCE

Vice Mayor Dugan led the Pledge of Allegiance.

PUBLIC COMMENT

None.

4. STUDY SESSION

a. Discussion of Issues and Topics Affecting the City of San Carlos, Including, But Not Limited to, the Items Listed in the Attachment. No Action Will be Taken on Any Items at This Meeting.

South Laurel Developments

Public Comment
- Five members of the public expressed concerns on the potential parking and traffic impact from the proposed developments in the Southend of Laurel Street, by Carl’s Jr. They provided the following suggestions to Council:
• conduct a comprehensive study on south Laurel Street to prepare for developments and its impact on traffic, safety and the environment
• w hen considering parking, be mindful of how it’ll impact the community • determine the number of parking spaces based on objective facts from a study • when c onsidering density of developments, be mindful of its impact on parks and recreation

8.c
November 27, 2023

Packet Pg. 11

At Mayor Dugan’s request, City Manager Jeff Maltbie provided info rmation on the proposed development, stating that it’s at its very initial stages.

- Sonia Elkes, resident, advocated for an active transportation corridor.

Council expressed interest in eventually adding South Laurel, through Eaton Avenue, as Phase II of the Downtown Plan study.

Observing all Federal Holidays for Council and Commission Meetings

Councilmember McDowell spoke on the importance of not holding Council nor Commission meetings on any federal holidays, including Columbus Day and Juneteenth.

Council spoke in support of this item and directed staff to agendize it for approval.

Regularity of Commission and Advisory Body Meetings

Councilmember McDowell noted that some Commission s are meeting infrequently and are not being fully utilized.

Mr. Maltbie noted that he’ll address this with staff.

Zoom Remote Participation and Comments; Meeting Decorum Policy

Council discussed the benefits of continuing to allow public comments via Zoom and suggested practices to implement to address disruptions, such as:

• provide the Mayor with a binder with the decorum policy and a clear script • have more programs to acknowledge how diverse our City is • incorporate this process:

1. limit the amount of time commenters can raise their hand to speak; after a designated amount of time (perhaps one minute) count the number of hands and don’t allow any additional speakers for that item

2. if an inappropriate comment is received, the Mayor will interject with a warning while the City Clerk temporarily lowers the volume of the commenter

3. if inappropriate comments continue after the warning, the Mayor will direct the City Clerk to remove the speaker from the meeting.

If disruptive comments continue on Zoom, Councilmember Collins suggested creating a public comment email group list and providing an option for the public to leave a voice message with their comment during the meeting.

Council reviewed the draft Meeting Decorum Policy and directed staff to re move reference to Rosenberg Rules and agendize it for adoption.

Elected Treasurer Position Ballot Measure

City Attorney Greg Rubens reminded Council that they had provided direction for him to prepare a measure on the November 2024 ballot for considering the elected City Treasurer position and noted that the item will be brought to them in the spring.

Councilmember McDowell suggested the City proactively educate the public on this measure.

8.c
November 27, 2023

Packet Pg. 12

Gas-Powered Leaf Blowers

Mr. Rubens updated Council on the state law banning the sale of gas leaf blower s effective January 2024.

Council discussed options for how the City can address the issues of gas leaf blowers, including implementing a ban, setting maximum decibels allowed, and allowing gas powered blowers only on garbage pick-up days, however, they recognized the difficulty with enforcement.

Public Comment
Sonia Elkes, resident, suggested adding an article in the City’s newsletter to provide options and creative way to address the issues of gas leaf blowers.

Budget Impacts of a Construction Slowdown

At the Mayor’s request, Mr. Maltbie confirmed that there is a construction slowdown, which may result in some delays and interruptions, however, he has no reasons for concerns at this time. He also provided an update on the Alexandria developer’s desire to start over with the Development Agreement due to economic changes.

Potential Targets for City Acquisition for Affordable Housing

Mr. Maltbie confirmed that there have been properties identified as p otential targets for City acquisition for affordable housing, however, the City is not in the position to purchase another property at this time.

Negotiating Community Benefits from Developers

Council inquired on how the City can better negotiate public benefits from developers and questioned if the 50/50 split for net present value is the most beneficial approach.

Mr. Maltbie noted that the Council subcommittee needs to review formula options and consider how the analysis is working.

Council requested additional information from CalWater to learn more about recycled water and purple-piping.

Council recessed at 3:00 PM and reconvened for 3:07 PM.

Non-Utilization of Downtown Employee Parking in Wheeler Plaza Garage/ Downtown Parking and Mobility

Council noted that employees in the downtown are still parking in the parking lot behind T own Restaurant and discussed:
• the need to be more aggressive and enforce the two hour time limits • looking into John Baer’s El Camino Real and Cherry Street property • the benefits of zoned parking

Mr. Maltbie confirmed that a study will be conducted as part of the Downtown Plan Study that should help address the issue of downtown employee parking.

8.c
November 27, 2023

Packet Pg. 13

Smart City Infrastructure

Council identified areas of the City with traffic signal delays, including the intersections at Chestnut Street and San Carlos Avenue, and San Carlos Avenue and Holly Street, and inquired if smart infrastructure is something we could benefit from.

Mr. Maltbie confirmed there is a light timing project already in the budget, and noted that artificial intelligent traffic signals are still being tested and not quite ready to be rolled-out.

Council agreed that they’re interested in being proactive with smart traffic signals when the technology is ready.

SamTrans Headquarters Building Update

Mr. Maltbie confirmed that SamTrans is aware of the City ’s desire to see housing at their headquarters building, but that it’s unlikely there will be changes anytime soon.

Downtown Look and Feel

Council inquired if the City can require and enforce parklets to be repaired for aesthetics.

Mr. Maltbie noted that he’ll check with the Public Works Director.

Council added that they have received a number of complaints regarding the sticky sidewalks in the downtown and requested staff post the cleaning schedule on social media so that the community is aware of the City’s efforts to address the issue.

AEDs (Automated External Defibrillator) in Public Parks

Mr. Maltbie notified Council that once staff is able to identify how to secure and make AEDS accessible, they’ll focus on getting them out to the City’s fields and courts.

Trails and Open Space Access Update

Mr. Maltbie confirmed that Council has the latest updates on trails and open space access and noted that we’re within months of being able to start trail work.

Advanced Planning for Community Center/Community Pool

Mr. Maltbie noted that the Parks and Recreation Director’s suggestion is to include the discussion of a community center/pool as part of the parks master planning process. He noted that there will not be enough funding to complete both the Downtown Plan and the community center/pool and expressed the importance for Council to begin considering how they’ll close the funding gap or decide which project they want to focus on.

North Crestview Park

Vice Mayor Dugan noted the community’s general appetite for a Veteran’s Memorial that also commemorates our War Dog history and spoke on the potential at North Crestview Park.

Mr. Maltbie confirmed that this will be addressed in the Parks Master and the North Crestview Plans that’s currently underway.

8.c
November 27, 2023

Packet Pg. 14

Air BNBs

Mr. Maltbie confirmed that Air BNBs are not allowed in San Carlos and provided information on the TOT (Transient Occupancy Tax) loss due to this.

Council agreed to take a wait-and-see approach on Air BNBs.

Update on Flood Mitigation Measures Approved in Recent Budget

Mr. Maltbie provided Council with a status on the work that staff has completed or are currently working on to mitigate flooding.

Council directed staff to share this update with the community in the next newsletter.

Councilmember McDowell inquired about the purchase of an excavator to clean storm drain inlets.

Mr. Maltbie will check with staff for the status on this.

Increase NPDES (National Pollutant Discharge Elimination System) Fees

Mr. Maltbie provided a brief background on the NPDES tax and spoke on the lack of funding source for the Storm Drain Master Plan’s identified improvements, estimated (in 2017) at $56 million.

Council discussed the benefits of a tax measure to increase funding for storm drains and contemplated if the community would support it. Council stated that they will reflect on this further.

Council recessed at 4:45 PM and reconvened at 4:50 PM.

Traffic Studies at Alameda Corridor

Mr. Maltbie stated that there will be several traffic plans conducted in different parts of the city, but there is nothing currently planned for the Alameda corridor.

Safe Routes to School Progress

At the Mayor’s request, Mr. Maltbie provided updates on the various Safe Routes to School projects currently underway.

Councilmember McDowell added that at a recent 2+2 Joint City/School Committee meeting, the City and the School District agreed to improve some sidewalks near Arroyo Avenue.

Repaving of Main Streets

Council commented on some of the City’s main streets that need to be repaired, including Laurel Street (south of Arroyo Ave) and Brittan Ave (immediately off the freeway by Industrial Road), and inquired about where they fall on the priority list.

Mr. Maltbie noted that he will check with the Public Works Director.

Councilmember McDowell shared that her street has recently been repaved, but her neighbor, who’s tearing down her home is required to underground powerlines, which would require cutting into the street. She noted the issues with undergrounding powerlines and inquired if there is any consideration of updating the residential policy requiring undergrounding powerlines.

8.c
November 27, 2023

Packet Pg. 15

Mr. Maltbie noted that he’ll look into this.

405 Industrial Road Traffic Study

Mr. Maltbie confirmed that staff is proceeding with a traffic study at 405 Industrial Road to prohibit left-hand turns.

Cumulative Impact of Traffic Flow from East Side New Development Projects

Councilmember McDowell inquired about the potential to study a roundabout at Industrial Road and Holly Street to keep traffic moving. She also expressed concern about the cumulative traffic impact on all the new developments on the east side.

Mr. Maltbie responded that roundabouts require a lot of space and would require acquiring property to accomplish one at the site in question. He also stated that the General Plan Traffic Impact Study will provide an overview of the future cumulative impact from the projects.

Bike and Pedestrian Bridge over 101

Councilmember McDowell gauged the Council’s interest in proceeding with the Bike and Pedestrian Bridge over Highway 101 project separate from the freeway interchange.

Mr. Maltbie noted that staff had initially tried to approach it as a separate project, but it was easier to get grants when it was combined with the freeway interchange.

Consider Hiring Grant Writing Consultant

Councilmember McDowell suggested hiring a consulting firm to help identify and apply for grants that the City would be eligible for.

Council expressed interest and directed staff to proceed with it as a one-year pilot.

Offering more Cultural Events in our Community.

Councilmember Venkatesh inquired on the process to diversify our City events and incorporate them into the community.

Mr. Maltbie responded that it would just require C ouncil to give direction to staff and identify the funding source.

5. ADJOURNMENT

Vice Mayor Dugan adjourned the meeting at 5:30 PM.

Crystal Mui
City Clerk

8.c
November 27, 2023

Packet Pg. 16

CITY COUNCIL

STAFF REPORT
MEETING DATE: November 27, 2023
ITEM TITLE: Adopt a Resolution Accepting the Annual Report for the Year Ended June 30, 2023 on Development Impact Fees, Reaffirming the Necessity for Development Impact Fees, and Making Findings Related to Impact Fee Balances and In-Lieu Fees.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution accepting the annual report for the year ended June 30, 2023 on development impact fees, reaffirming the necessity for the development impact fees, and making findings related to impact fee balances and in-lieu fees.

FISCAL IMPLICATIONS:

There are no fiscal implications associated with accepting this report.

BACKGROUND:

This administrative report serves as the City’s annual report on development impact fees, as required by Government Code section 66006 and in accordance with the Mitigation Fee Act, specifically Government Code section 66001(d). It includes details of the City’s park in-lieu fees, which are governed by Government Code section 66477, and addresses the City’s other in-lieu and linkage fees for informational purposes.

ANALYSIS:

The City has a number of Development Impact Fees (DIFs) including the traffic impact fee, park facility development fee, affordable housing impact fee, commercial linkage fee, sewer capacity charge, child care development fee, and the sewer connection pass-through fee. Detailed descriptions of these fees are available to the public on the City’s website and in their respective sections of the Municipal Code.

In California, state legislation sets certain legal and procedural parameters for charging of DIFs.

This legislation was passed as Assembly Bill (AB) 1600 by the California Legislature. Government Code section 66006(b) states the following requirements with respect to DIFs:

For each separate account or fund established, the local agency shall, within 180 days after the last day of each fiscal year, accept the report and make available to the public the following information for the fiscal year:

A. A brief description of the type of fee in the account or fund.

B. The amount of the fee.

8.d
November 27, 2023

Packet Pg. 17

C. The beginning and ending balance of the account or fund.

D. The amount of the fees collected and interest earned.

E. An identification of each public improvement on which fees were expended and the amount of expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with the fees.

F. An identification of an approximate date by which the construction of the public improvement will commence if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement and the public improvement remains incomplete.

G. A description of each interfund transfer or loan made from the account or fund, including the public improvement on which the transferred or loaned fees will be expended, and, in the case of an interfund loan, the date on which the loan will be repaid, and the rate of interest that the account or fund will receive on the loan.

H. The amount of refunds made (pursuant to Government Code section 66001(e)) due to sufficient funds being collected to complete financing on incomplete public improvements, and the amount of reallocation of funds made (pursuant to Government Code section 66001(f)) due to administrative costs of refunding unexpended revenues exceeding the amount to be refunded.

In addition, the Mitigation Fee Act requires local agencies to adopt “five-year findings” in accounting for development impact fee proceeds.

The following findings are made as required by the Government Code Section 66001:

1. The purpose to which each Development Impact Fee is collected for has been identified.

2. There is a continued need for the improvements and there is a reasonable relationship between the fee, the timing of the improvements, and the impacts for development for with the fees are collected.

3. The sources and amounts of funding anticipated to complete the financing of capital projects have been identified and will be deposited into the appropriate account upon receipt or during the normal capital improvement program budget cycle. For the fiscal year 2022-23 ended June 30, 2023, none of the impact fees collected by the City have been held for a period greater than five years.

4. A copy of the Resolution will be posted on the website and forwarded to the Administrative Services Director for use in overseeing these monies.

5. These findings are based, in part, on information provided in the City’s Capital Improvement Program.

The attached report contains details to satisfy the requirements of Government Code section 66006 and 66001. Once accepted by the City Council, it will be made available to the public on the Financial Reports and Policies page of the City’s website. It also describes the City’s park land dedication in-lieu fee, which is governed by Government Code section 66477, and the City’s affordable housing in-lieu fee and parking in-lieu fee. The report shows these fees grouped by fund.

Many projects have been either partially or fully funded over the past five fiscal years through the City’s DIFs and in-lieu fees. These include the Brittan Avenue & Alameda de las Pulgas Widening project ($1.1 million) through the traffic impact fee; the Park Bathroom Replacement project ($1.2 million) and Installation of New Sports Field Lighting at Flanagan and Stadium Fields project ($1.5 million) through the park land dedication in-lieu fee and park facility development fee; the Cherry

8.d
November 27, 2023

Packet Pg. 18

Street Below Market Rate Housing project ($3.1 million) through the commercial linkage fee and affordable housing in-lieu fee; and sewer system improvements ($3.3 million) through collection of the sewer capacity charge.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution accepting the Annual Report for the year ended June 30, 2023 on development impact fees and making findings related to impact fee balances and in-lieu fees; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Rebecca Mendenhall, Administrative Services Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

2. Development Impact Annual Report FY 2022-23

8.d
November 27, 2023

Packet Pg. 19

RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS ACCEPTING THE ANNUAL REPORT FOR THE YEAR ENDED JUNE 30, 2023 ON

DEVELOPMENT IMPACT FEES, REAFFIRMING THE NECESSITY FOR

DEVELOPMENT IMPACT FEES, AND MAKING FINDINGS RELATED TO IMPACT FEE BALANCES AND IN-LIEU FEES.

WHEREAS, Government Code Sections 66000 et seq., commonly known as the Mitigation Fee Act, regulate the imposition, collections, expenditure, and reporting of development impact fees; and
WHEREAS, Government Code Section 66006 requires that certain information be made available to the public regarding development impact fees on an annual basis; and WHEREAS, Government Code Section 66001 requires that local agencies adopt “five- year findings” in accounting for development impact fee proceeds; and WHEREAS, Government Code Sections 66477 et seq. regulate the imposition, collections, and expenditure of park in-lieu fees; and
WHEREAS, the City of San Carlos assesses a number of development impact fees – traffic impact fee, park facility development fee, commercial linkage fee, sewer capacity charge, and the Silicon Valley Clean Water (SVCW) sewer connection pass-through fee; and WHEREAS, the City of San Carlos also collects a number of in-lieu fees – park land dedication in-lieu fee, affordable housing in-lieu fee, and parking in-lieu fee; and WHEREAS, the City Council of the City of San Carlos has read and considered the Development Impact Fees and In-Lieu Fees Annual Report for the year ended June 30, 2023; and
WHEREAS, the following findings have been made as required by the Government Code Section 66001:

1. The purpose to which each development impact fee is collected for has been identified.

4. A copy of the Resolution will be posted on the website and forwarded to the Administrative Services Director for use in overseeing these monies.

5.These findings are based, in part, on information provided in the City’s Capital Improvement Program.

8.d
November 27, 2023

Packet Pg. 20

NOW, THEREFORE BE IT RESOLVED, that the City Council of the City of San Carlos hereby accepts the Development Impact Fees and In-Lieu Fees Annual Report for Fiscal Year 2022-23 and reaffirms the necessity for development impact fees and has made findings related to impact fee balances and in-lieu fees.
* * * * *
I, City Clerk Crystal Mui, hereby certify the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 27th day of November, 2023 by the following vote:

AYES, COUNCILMEMBERS:___________________________________________ NOES, COUNCILMEMBERS:___________________________________________ ABSENT, COUNCILMEMBERS:___________________________________________ ________________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos

8.d
November 27, 2023

Packet Pg. 21

City of San Carlos
Development Impact Fees and In-Lieu Fees – Annual Report Fiscal Year Ended June 30, 2023
This Administrative Report serves as the City’s annual report on development impact fees, as required by Government Code Section 66000-66008, and on park in-lieu fees, as required by Government Code Section 66477. This report also includes the City’s other fees not governed by these specific Government Code sections.

Development Impact Fees
The City of San Carlos assesses several development impact fees – Traffic Impact Fee, Park Facility Development Fee, Commercial Linkage Fee, Sewer Capacity Charge, and the Silicon Valley Clean Water (SVCW) Sewer Connection Pass-through Fee. An additional Childcare Impact Fee was approved during Fiscal Year (FY) 2022-23 and will begin to be budgeted and collected during FY 2023-24.

Local governments often charge fees as a condition of approval for development projects to fund public improvements to compensate for the demands that the developments have on public infrastructure. These fees are commonly known as development impact fees. In 1989, the State Legislature passed Assembly Bill 1600 (AB 1600), which added Sections 66000 et seq. to the California Government Code, commonly known as the Mitigation Fee Act. As required by law, these fees are segregated and accounted for in a separate fund. Per AB1600, each fee collected to mitigate a specific impact must be spent within five years of collection. If the fee is held over this five-year period due to specific circumstances or insufficient collection for the need improvements, the City Council must take specific findings to continue holding the fees, otherwise, the fees are subject to refund. For the FY 2022-23 ended June 30, 2023, none of the impact fees collected by the city have been held for a period greater than five years. Government Code Section 66001 requires the city to make available to the public certain information regarding these fees for each fund within 180 days after the end of each fiscal year.

In-Lieu Fees
In-lieu fees are fees that are also collected by the city instead of requiring developers to provide or construct specified improvements or amenities with their projects. The City of San Carlos assesses a few in-lieu fees – Park Land Dedication In-Lieu Fee, Affordable Housing In-Lieu Fee, and Parking In-Lieu Fee.

This report summarizes the following information for each of the development impact fee programs and in-lieu fees, categorized by the funds in which the fees are collected:
•A brief description of the fee program
•A schedule of fees, where applicable, or reference to it in the City’s Municipal Code •Beginning and Ending fund balances of the fee program
•Total fees collected and the interest earned, if applicable •Disbursement information

8.d
November 27, 2023

Packet Pg. 22

The table below shows the summary of the development impact and in-lieu fees for Fiscal Year 2022-23:

Fund 25
Traffic Impact Fee
City of San Carlos Municipal Code Chapter 8.50 establishes a Traffic Impact Fee to fund transportation improvements to help accommodate new residents and businesses brought to San Carlos as a result of new development projects. The Traffic Impact Fee is accounted for in the General Capital Project Fund (0025) restricted account.

Traffic Impact Fee Schedule
Category Fee Basis
Office $8,413.00 Per 1,000 Square Foot
Lab $3,585.00 Per 1,000 Square Foot
Manufacturing $4,902.00 Per 1,000 Square Foot
Warehouse $1,390.00 Per 1,000 Square Foot
Restaurant (High Turnover) $71,477.00 Per 1,000 Square Foot Retail $27,874.00 Per 1,000 Square Foot
Single Family Residential $7,243.00 Per Dwelling Unit
Apartment $4,097.00 Per Dwelling Unit
Condominium $4,097.00 Per Dwelling Unit
Hotel $4,390.00 Per Room
Medical Office $25,313.00 Per 1,000 Square Foot

8.d
November 27, 2023

Packet Pg. 23

Traffic Impact Fee Collection and Expenditure Schedule
June 30, 2019 – June 30, 2023
The total ending balance as of the end of Fiscal Year 2022-23 was $1,285,997 and no Traffic Impact Fees funds have been held longer than five years. The Brittan Avenue & Alameda de las Pulgas Widening project is currently identified in the capital improvement five-year plan as a recipient of funds. The City is continuing to collect fees for future projects.

Fund 27
Park Land Dedication In-Lieu Fee
Park In-Lieu Fees are assessed pursuant to the Quimby Act under Government Code Section 66447. Under the Quimby Act, local governments may require the dedication of land for parks or the payment of fees in-lieu of land dedication as a condition of subdivision map approval.

The Park Land Dedication In-Lieu Fee is collected and expended to purchase land, buy equipment, or construct improvements in neighborhood parks and recreation facilities serving such subdivisions. The fee is accounted for in the Park In-Lieu Fund (0027).

Calculation of Subdivision Park Land Dedication In-Lieu Fee The Municipal Zoning Code section 17.32.030 requires new subdivisions to pay Park and Recreation land dedication fees in-lieu of land dedication: Fee = A x B x C A = The acreage required per dwelling unit within the proposed subdivision for park and recreational facilities from this title (see Table 17.32.030), e.g. 0.00475 B = The number of dwelling units in the proposed subdivision, e.g. 18 Fiscal Year 2019 2020 2021 2022 2023
% of Project funded by Fee to date
Commence Approximate DateBeginning Fund Balance 2,449,860$ 2,528,117$ 1,694,714$ 979,368$ 1,463,740$ Revenues Interest Earnings 48,725 70,043 451 (57,986) 29,030 Impact Fees 79,532 233,761 512,067 542,358 93,227 Transfer inTotal Revenues 128,257 303,804 512,518 484,372 122,257 ExpendituresHolly St/101 Interchange Study - 887,207 377,865 - - 25.4%Traffic impact Fee Update 50,000 - - - - 100% CompletedBrittan Ave & Alameda de las Pulgas Widening - 250,000 850,000 - - 100%Brittan Ave Widening at Industrial Road - - - - 300,000 35.5%Total Expenditures 50,000 1,137,207 1,227,865 - 300,000 Revenues over (under) Expenditures 78,257 (833,403) (715,347) 484,372 (177,743) Fund Balance June 30 2,528,117$ 1,694,714$ 979,368$ 1,463,740$ 1,285,997$

8.d
November 27, 2023

Packet Pg. 24

C = The fair market value per acre of land in the proposed subdivision, e.g. $18,708,871 Fee Example Calculation: Fee = (0.00475) x (18) x ($18,708,871) = $1,599,608.47 However, Code section 17.32.030 caps these fees at 50% of the highest in-lieu fee collected by the City for single-family residential subdivisions since March 1, 1976 (on an average, per dwelling basis). The highest fee collected for a single-family subdivision since 1976 was $38,084.63 per unit (in 2016: 2 lot subdivision at 1985 Carmelita).

Park In-Lieu Fee = 50% x ($38,084.63) = $19,042.32 per unit Total Fee = $342,761.76 ($19,042.32 x 18 units)
Park Facility Development Fee
Park Facility Development Fees are assessed pursuant to Law of the City of San Carlos (Ord. 1007 § 1 (part), 1988) per Municipal Code section 3.34. The fee is accounted for in the Park In-Lieu Fund (0027) and is used for the acquisition, development, renovation, and replacement of parks and recreational areas and their development, including equipment for recreational purposes.

The Park Facility Development Fee for Fiscal Year 2022-23 = $2,651 per bedroom Park Land Dedication In-Lieu Fee and Park Facility Development Fee Collection and Expenditures Schedule
June 30, 2019 – June 30, 2023
The total ending balance as of the end of Fiscal Year 2022-23 was $1,053,024 and no Park Facility Development Fees funds have been held longer than five years. This in-lieu fee will continue to be collected to build the fund balance, and potential projects will be identified as the fund balance reaches an appropriate level.

Fiscal Year 2019 2020 2021 2022 2023
% of Project funded by Fee to date
Commence Approximate DateBeginning Fund Balance 1,852,477$ 2,519,269$ 1,533,928$ 1,585,257$ 2,055,962$ Revenues Interest 47,530 40,565 321 (40,831) 18,948 Park Facility Development Fees 200,331 149,647 194,212 150,248 95,455 P&R Dedication in-Lieu Fees 418,931 114,254 152,388 571,270 342,762Total Revenues 666,792 304,466 346,921 680,687 457,164 ExpendituresChilton Park Improvements - 44,781 269,095 185,482 104 100% CompletedPark Bathroom Replacement - 1,200,000 - - - 100% CompletedHighland Park Tennis Court Resurfacing - 24,500 - 100% CompletedShade Structure Improvements - 45,026 26,497 - - 100% CompletedInstallation of New Sports Field Lighting at Flanagan and Stadium Fields - - - - 1,460,000 62.4% In progressTotal Expenditures - 1,289,807 295,592 209,982 1,460,104 Revenues over (under) Expenditures 666,792 (985,341) 51,329 470,705 (1,002,940) Fund Balance June 30 2,519,269$ 1,533,928$ 1,585,257$ 2,055,962$ 1,053,022$

8.d
November 27, 2023

Packet Pg. 25

Fund 28
Parking In-Lieu Fee
City of San Carlos Municipal Code Chapter 18.20 establishes a Parking In-Lieu fee to fund programs to reduce parking impacts including acquisition, development, and maintenance of parking facilities located in the parking assessment district; transportation system management projects (Ord. 1537 (Exh. C (part)), 2018; Ord. 1438 § 4 (Exh. A (part)), 2011); transit or paratransit passes, coupons, and tickets to be made available at a discount to employees and customers and to promote and support incentives for employee ride-sharing and transit use.

The full schedule defining the requirements for parking spaces can be found in Municipal Code section 18.20.040.

Parking In-Lieu Fee Collection and Expenditures Schedule June 30, 2019 – June 30, 2023
The total ending balance as of the end of Fiscal Year 2022-23 was $245,375 and no Parking In-Lieu Fees have been held longer than five years. The balance remaining in this fund has been budgeted to be transferred and applied against Project C1904 Wheeler Plaza Parking Garage in FY 2023-24.

Fund 29
Commercial Linkage Fee
The City of San Carlos Municipal Code Chapter 8.51 establishes a development impact fee for fund construction, acquisition, or financing of new existing multi-family affordable housing projects. The purpose of the Commercial Linkage Fee is to encourage the development and availability of housing affordable to a broad range of individuals and Fiscal Year 2019 2020 2021 2022 2023
% of Project funded by Fee to date
Commence Approximate DateBeginning Fund Balance 19,627$ 40,023$ 187,939$ 261,835$ 241,097$ RevenuesInterest 2,460 7,418 - (6,593) 4,278Fees 17,936 143,488 76,169 - -Total Revenues 20,396 150,906 76,169 (6,593) 4,278 ExpendituresReconfiguration Public Parking Plaza - 2,990 2,273 14,144 - 100%CompletedTotal Expenditures - 2,990 2,273 14,144 - Revenues over (over) Expenditures 20,396 147,916 73,896 (20,737) 4,278 Fund Balance June 30 40,023$ 187,939$ 261,835$ 241,097$ 245,375$

8.d
November 27, 2023

Packet Pg. 26

families with varying income levels within the city as mandated by State law, California Government Code Section 65580.

The Linkage Fee applies to commercial projects including changes in use, additions to floor area, and new developments as noted below.

Commercial Linkage Fee Schedule
Category Fee
Retail, Restaurant, & Personal Service $ 5.00 per net new square footHotel $10.00 per net new square footOffice, Medical Office, Research & Development $20.00 per net new square foot Affordable Housing In-Lieu Fee for Residential Development Per Municipal Code section 18.16.030, for all residential ownership developments of five or more dwelling units, at least twenty percent of the total units shall be Below Market Rate (“BMR”) units restricted for sale to and occupancy by low-income households unless the residential development is exempt under Section 18.16.040. For all residential rental developments of seven (7) or more dwelling units, at least fifteen percent (15%) of the total units shall be below market rate units restricted for rent to and occupancy by low and very low- income households unless the residential development is exempt under Section 18.16.040.

At least fifteen percent of the total units in a residential rental development shall be below market rate units, of which ten percent shall be affordable to very low-income households and five percent affordable to low-income households.

For a residential ownership development of one (1) dwelling unit, or for an addition of one thousand (1,000) square feet or more to an existing dwelling unit that may be sold individually, the builder shall pay an in-lieu fee or construct an accessory dwelling unit.

For a residential development that creates one (1) additional lot, or two (2) to six (6) rental dwelling units and/or lots, or two (2) to four (4) ownership dwelling units and/or lots, or for a residential development that triggers a decimal fraction of less than one-half (0.5), the builder shall pay an in lieu fee for the fractional unit requirement or build a below market rate unit affordable to a low-income household.

8.d
November 27, 2023

Packet Pg. 27

For residential rental developments, the following table applies:

Commercial Linkage and Affordable Housing In-Lieu Fees deposited in the Housing In-Lieu Fund (0029) shall be used in accordance with the City’s Housing Element, or subsequent plan adopted by the City Council to maintain or increase the quantity, quality, and variety of affordable housing units or assist other governmental entities, private organizations, or individuals to do so. Permissible uses include, but are not limited to, land acquisition, new construction, and other pursuits associated with providing affordable housing. It may also be used to cover reasonable administrative or overhead related expenses associated with the administration of the program.

For Partial Fee based on Applicable Project Size:Step 1: Find line for Total Units in project under Column AStep 2: Go to Column H for Partial Fee Obligation per square footStep 3: Multiply figure in Column H by the actual average square feet per unit in project

A B D F G H
TotalUnits BMR 20%Obligation LowUnits
PartialLow UnitObligation
Incremental Partial Fee ObligationPer Avg. Sq. Ft.

Cumulative Project Partial Fee ObligationPer Avg. Sq. Ft. TotalUnits1 0.20 0.00 0.20 4.22 4.222 0.40 0.00 0.40 11.82 23.63 23 0.60 0.00 0.60 19.41 58.24 34 0.80 0.00 0.80 27.01 108.04 45 1.00 1.00 - - - 56 1.20 1.00 0.20 42.20 42.20 67 1.40 1.00 0.40 42.20 84.40 78 1.60 2.00 - - - 89 1.80 2.00 - - - 910 2.00 2.00 - - - 1011 2.20 2.00 0.20 42.20 42.20 1112 2.40 2.00 0.40 42.20 84.40 12

8.d
November 27, 2023

Packet Pg. 28

Commercial Linkage and Affordable Housing In-Lieu Fees
Collection and Expenditures Schedule
June 30, 2019 – June 30, 2023
The total ending balance as of the end of Fiscal Year 2022-23 was $12,123,575 and no Commercial Linkage and Affordable Housing In-Lieu Fees funds have been held longer than five years. The fund balance and continued collection of fees will be used to fund the acquisition of property on the north side of Cherry Street between Laurel and Walnut for potential assemblage with the adjacent property to create new, affordable rental housing. On June 26, 2023, the City Council approved Resolution 2023-085 authorizing the execution of a financing agreement to purchase property on 1800 El Camino Real and 1131-1133 Eaton Avenue for affordable housing in the amount of approximately $13 million. The property sale finalized in October 2023 and will be reflected in the next annual report.

Fund 6
Sewer Capacity Charge
San Carlos Municipal Code Chapter 13.04 establishes a sewer capacity charge to recover costs for the City’s sewer system infrastructure and assets that provide benefit to the new or expanded connection. Water and sewer capacity charges are governed by California Government Code section 66013. The sewer capacity charge applies based on the estimated increase in volume of wastewater discharge from each new or expanded connection and shall be adjusted annually based on the change in the Engineering News-Record Construction Cost Fiscal Year 2019 2020 2021 2022 2023
% of Project funded by Fee to date
Commence Approximate DateBeginning Fund Balance 4,206,124$ 6,698,196$ 8,114,932$ 9,448,459$ 12,098,079$ RevenuesInterest 126,950 230,955 8,242 (230,761) 213,852Commercial Linkage Fees 2,374,290 - 1,943,280 4,004,180 264,684Affordable Housing in-Lieu Fees (BMR) 197,680 4,141,141 418,210 306,089 187,560Total Revenues 2,698,920 4,372,096 2,369,732 4,079,508 666,096 ExpendituresRegional Housing Contribution 93,000 105,000 154,500 157,600 132,300 100%AnnualCherry Street BMR 25,373 2,768,175 1,056 398,296 (73,378) 25%In progressAdministrative & Overhead Expenses 88,475 75,470 121,986 129,509 952,194 100%AnnualStudy Land Use and Regulatory Options - 6,715 260,862 214,507 339,114 100%CompletedLow & Moderate Income Housing Units - - 497,801 529,976 (1,027,777) 100%Units Sold1232 Cherry Street Building Demolition - - - - 347 1%In progress817 Walnut St - - - - 310,000 100%Completed817 Walnut Oven Installation - - - - 7,800 4%In progressTotal Expenditures 206,848 2,955,360 1,036,205 1,429,888 640,600 Revenues over (less than) Expenditures 2,492,072 1,416,736 1,333,527 2,649,620 25,496 Fund Balance June 30 6,698,196$ 8,114,932$ 9,448,459$ 12,098,079$ 12,123,575$

8.d
November 27, 2023

Packet Pg. 29

Index (20-Cities Average) from the March 2016 Index. The fee is accounted for in the Sewer Enterprise Fund (0006).

Sewer Capacity Charge Schedule

Sewer Capacity Charge Collection and Expenditures Schedule June 30, 2019 – June 30, 2023
The total ending balance as of the end of Fiscal Year 2022-23 was $0. The fund balance and continued collection of sewer capacity charge will be used for improvement and expansion of sewer facilities, including the collection system, and any other purpose allowed by State and Federal law.

Sewer Connection Fee
In accordance with Municipal Code section 13.04.025 paragraph F, the City also collects the sewer connection fees adopted by Silicon Valley Clean Water (“SVCW”) from new or expanded connections to the sewer system in conformance with the City’s obligations under the Joint Powers of Authority Agreement between the City and SVCW. The current adopted rate is $7.91 per gallon per day.

Fiscal Year 2019 2020 2021 2022 2023
% of Project funded by Fee to date
Commence Approximate DateBeginning Fund Balance -$ -$ -$ -$ -$ RevenuesSewer Capacity Fees 108,450 760,322 813,350 1,424,311 207,778Total Revenues 108,450 760,322 813,350 1,424,311 207,778 ExpendituresSewer System Improvements 108,450 760,322 813,350 1,424,311 207,778 73%AnnualTotal Expenditures 108,450 760,322 813,350 1,424,311 207,778 Revenues over (less than) Expenditures - - - - -
Fund Balance June 30 -$ -$ -$ -$ -$

8.d
November 27, 2023

Packet Pg. 30

SVCW Sewer Connection Fee Pass-Through Schedule
SVCW Sewer Connection Fee Pass-Through
Single Family Residence (190 gpd) $1,503
Multi-Family dwelling Unit (120 gpd) $949
Non-Residential (per each 100 gpd)) $791
Sewer Connection Fee Pass-Through Collection and Disbursement Schedule June 30, 2019 – June 30, 2023
The total fund balance as of the end of Fiscal Year 2022-23 was $309,821 and no Sewer Connection Fee funds have been held longer than five years. These funds are usually passed through to SVCW before the end of December in the following fiscal year. The city will continue to collect the fee and make pass-through payments to SVCW.

Fiscal Year 2019 2020 2021 2022 2023
% of Project funded by Fee to date
Commence Approximate DateBeginning Fund Balance 698,338$ 18,979$ 482,855$ 120,766$ 267,583$ SVCW Sewer Connection Fee Pass Through 18,979 482,855 120,766 204,268 42,238N/A - pass-through Disbursement to SVCW 698,338 18,979 482,855 57,451 -
Fund Balance June 30 18,979$ 482,855$ 120,766$ 267,583$ 309,821$

8.d
November 27, 2023

Packet Pg. 31

CITY COUNCIL

STAFF REPORT
MEETING DATE: November 27, 2023
ITEM TITLE: Adopt a Resolution Accepting the City of San Carlos’ Annual Comprehensive Financial Report for the Fiscal Year Ending June 30, 2023.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution accepting the City of San Carlos’ Comprehensive Annual Financial Report (ACFR) for the fiscal year (FY) ending June 30, 2023.

FISCAL IMPLICATIONS:

There is no fiscal impact associated with accepting the FY 2022-23 ACFR.

BACKGROUND:

The financial statements of the City of San Carlos for the fiscal year ending June 30, 2023 were prepared by the Administrative Services Department staff and examined by an independent auditing firm Badawi and Associates, in accordance with Governmental Accounting Standards Board (GASB) Statement 34. It is the opinion of the auditors that the financial statements present fairly, in all material respects, the respective financial position of the City as of June 30, 2023, and that the financial statements were prepared in conformity with generally accepted accounting principles.

The Administrative Services Department incorporates the financial statements into the Annual Comprehensive Financial Report (ACFR), the purpose of which is to present an easily readable and organized report of the financial transactions of the City. The ACFR provides members of the public with a wide variety of information needed to evaluate the financial condition of the City. The final step in the formal process of preparing these financial statements is to transmit them to the City Council for acceptance.

ANALYSIS:

During its audit, Badawi and Associates also assessed the City’s internal controls over financial reporting in order to determine whether the City’s audit procedures are appropriate for the purpose of expressing opinions on the financial statements. Badawi and Associates did not find any deficiencies and issued a clean report. The Transmittal Letter and the Management, Discussion and Analysis (“MD&A”) sections of the Annual Financial Report summarize the financial results for the fiscal year ending June 30, 2023.

The change in net position was an increase of $21.3 million. As of June 30, 2023, the citywide net position was $370.1 million.

8.e
November 27, 2023

Packet Pg. 32

The City’s General Fund revenues increased by $12.7 million, or 25.6%, compared to the prior fiscal year amount of $49.6 million. General Fund revenues, including property taxes, charges for services, transient occupancy taxes, and vehicle-in-lieu, increased compared to the prior year.

The City’s General Fund expenditures totaled $49.3 million, an increase of $6.7 million, or 15.7%, from prior year expenditures of $42.6 million. The increase in expenditures was primarily caused by increases in public safety contracts, higher professional services expenses to assist with the increase in development projects, increases in salaries and benefits per negotiated employee agreements, and additional positions.

The net increase in fund balance for the year ending June 30, 2023, in the General Fund was $10.4 million and the ending fund balance was $54.5 million.

Additional details and information regarding the other operating and capital funds can be found in the attached financial statements, MD&A, and notes to the financial statements.

In parallel with the main financial audit, the auditors also carried out an Award Examination, in relation to the State and Local Fiscal Recovery Funds (SLFRF) the City previously received under the American Rescue Plan Act (ARPA), to determine that all compliance requirements have been met for the year ended June 30, 2023. After performing the examination, the auditors issued an opinion that the City had complied, in all material respects, with the necessary specified requirements of the award during the year ended June 30, 2023.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution accepting the City of San Carlos’ Comprehensive Annual Financial Report for the fiscal year ending June 30, 2023; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Rebecca Mendenhall, Administrative Services Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

2. FY 2022-23 Annual Comprehensive Financial Report

8.e
November 27, 2023

Packet Pg. 33

RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS ACCEPTING THE CITY OF SAN CARLOS’ ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDING JUNE 30, 2023.

WHEREAS, the City of San Carlos contracted with the audit firm Badawi and Associates to conduct an audit of the City’s financial records in accordance with Governmental Accounting Standards Board Statement 34; and
WHEREAS, the financial statements for the fiscal year ending June 30, 2023, as prepared by said firm, have been completed; and
WHEREAS, it is recommended that the City Council accept the financial statements, known as the Annual Comprehensive Financial Report.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council hereby accepts the City’s Annual Comprehensive Financial Report for the fiscal year ending June 30, 2023. * * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 27th day of November 2023, by the following vote:

8.e
November 27, 2023

Packet Pg. 34

C I T Y O F S A N C A R L O S

SAN CARLOS CALIFORNIA
FOR THE FISICAL YEAR ENDED JUNE 30, 2023

ANNUAL COMPREHENSIVE

FINANCIAL REPORT

8.e
November 27, 2023

Packet Pg. 35

CITY OF SAN CARLOS, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Prepared by

CITY OF SAN CARLOS FINANCE DIVISION

8.e
November 27, 2023

Packet Pg. 36

City of San Carlos
Annual Comprehensive Financial Report
For the year ended June 30, 2023
Table of Contents
Page
i

INTRODUCTORY SECTION
Letter of Transmittal .......................................................................................................................................................... v Elected and Appointed Officials ..................................................................................................................................... xix The Residents of the City of San Carlos ......................................................................................................................... xx City-Wide Organizational Chart ..................................................................................................................................... xxi GFOA Certificate of Achievement for Excellence in Financial Reporting ..................................................................... xxiii

FINANCIAL SECTION
Independent Auditors’ Report ....................................................................................................................................... 1 Management’s Discussion and Analysis ..................................................................................................................... 5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ......................................................................................................................................... 25 Statement of Activities ..................................................................................................... ......................................... 26 Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet .............................................................................................................. ......................................... 32 Reconciliation of the Gove rnmental Funds Balance Sheet to the Government-Wide Statement of Net Position .......................................................................... ................ 33 Statement of Revenues, Expenditures and
Changes in Fund Balances .................................................................................................. .............................. 34 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ................................................................................................... .................................... 35 Budgetary Comparison Statement by Department – General Fund ..................................................................... 36 Proprietary Fund Financial Statements:

Statement of Net Position .................................................................................................. ................................... 39 Statement of Revenues, Expenses and Changes in Net Position ................................................................ ........ 40 Statement of Cash Flows .................................................................................................... .................................. 41 Fiduciary Fund Financial Statements:

Statement of Fiduciary Net Position ........................................................................................ .............................. 44 Statement of Changes in Fiduciary Net Position ............................................................................. ..................... 45 Notes to the Basic Financial Statements ..................................................................................................................... 49

8.e
November 27, 2023

Packet Pg. 37

City of San Carlos
Annual Comprehensive Financial Report
For the year ended June 30, 2023
Table of Contents
Page
ii
FINANCIAL SECTION (Continued)
Required Supplementary Information:

Defined Benefit Pension Plans:

Schedule of the City’s Proportionate Share of the Net Pension Liability and Related Ratios – CalPERS Cost-Sharing Plan ........................................................................ 104 Schedule of Pension Plan Contributions – CalPERS Cost-Shari ng Plan ........................................................... 106 Schedule of Changes in the Net Pension Liability and Related Ratios – PARS Agent Multiple-Employer Longevity Recognition Plan .................................................................................. 108 Schedule of Plan Contributions – PARS Agent Multiple-Emp loyer Longevity Recognition Plan ....................... 110 Other Post Employment Benefit Plan:

Schedule of Changes in OPEB Liability and Related Rati os – Other Post-Employment Benefits Plan ............. 112 Schedule of Plan Contributions – Other Post-Employment Benefits Plan ....................................................... ... 114 Supplementary Information:

Statements of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual:

City Capital Improvement Fund........................................................................................................................... 117 Housing Capital Projects Fund ............................................................................................................................ 118 Nonmajor Governmental Funds:

Combining Balance Sheet ................................................................................................................................... 120 Combining Statement of Revenues, Expenditures and Changes in Fund Balances .......................................... 122 Statements of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual:

Special Revenue Funds:

NPDES .................................................................................................................... ..................................... 124 Police Grants ............................................................................................................ .................................... 125 San Carlos Library Tenant ................................................................................................ ............................ 126 Capital Projects Funds:

Equipment Replacement .................................................................................................... .......................... 127 Measure A ................................................................................................................ .................................... 128 Measure W ................................................................................................................ ................................... 129 Gas Tax .................................................................................................................. ...................................... 130 Park Fee ................................................................................................................. ...................................... 131 Parking In-Lieu .............................................................................................................................................. 132 Debt Service Fund:

San Carlos Library Bonds ................................................................................................. ............................ 133 Internal Service Funds:

Combining Statements of Net Position ....................................................................................... ........................ 135 Combining Statements of Revenues, Expenses, and Changes in Net Position ................................................. 13 6 Combining Statements of Cash Flows ......................................................................................... ....................... 137 Custodial Funds:

Combining Statement of Fiduciary Net Position .............................................................................. ................... 139 Combining Statement of Changes in Fiduciary Net Position ................................................................... ........... 140

8.e
November 27, 2023

Packet Pg. 38

City of San Carlos
Annual Comprehensive Financial Report
For the year ended June 30, 2023
Table of Contents
Page
iii
STATISTICAL SECTION (Unaudited)
Financial Trends:

Net Positions by Component ............................................................................................................................... 143 Changes in Net Position ...................................................................................................................................... 144 Fund Balances of Governmental Funds ........................................................................................ ..................... 148 Changes in Fund Balances of Governmental Funds ............................................................................. ............. 149 Revenue Capacity:

Assessed Valuation, Tax Rates and Tax Levies ................................................................................................. 150 Direct and Overlapping Property Tax Rates ....................................................................................................... 151 Principal Property Tax Payers ............................................................................................................................. 152 Property Tax Levies and Collections ........................................................................................ .......................... 153 Debt Capacity:

Ratios of Outstanding Debt by Type ......................................................................................... .......................... 154 Ratio of General Bonded Debt Outs tanding ...................................................................................................... 155 Pledged Revenue Cove rage ............................................................................................................................... 156 Direct and Overlapping Debt ........ ....................................................................................................................... 157 Computation of Legal Bonded Debt Margin .................................................................................... .................... 158 Demographic and Economic Information:

Demographic and Economic Statistics ........................................................................................ ....................... 159 Principal Employers ........................................................................................................ .................................... 160 Full Time Equivalent City Personnel by Function ............................................................................ ................... 161 Operating Information:

Operating Indicators by Function/Program ................................................................................... ...................... 162 Capital Asset Statistics by Function/Program ............................................................................... ...................... 163

8.e
November 27, 2023

Packet Pg. 39

This page intentionally left blank
iv

8.e
November 27, 2023

Packet Pg. 40

November 27, 2023

To the Members of the City Council and Residents of San Carlos:

It is the policy of the City of San Carlos to annually publish a complete set of financial statements presented in conformity with Generally Accepted Accounting Principles (GAAP) and audited in accordance with generally accepted auditing standards by an independent firm of certified public accountants. Pursuant to that requirement, we hereby issue the annual comprehensive financial statements of the City of San Carlos (“the City”) for the fiscal year ended June 30, 2023.

This report consists of management’s representations concerning the finances of the City.

Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City established a comprehensive internal control framework that is designed both to protect the City’s assets from loss, theft, or misuse and to compile sufficiently reliable information for the preparation of the City’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls was designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

The City’s financial statements have been audited by Badawi & Associates, a firm of certified public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City for the fiscal year that ended June 30, 2023 are free of material misstatements. The independent audit involved: examination, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessment of the accounting principles used and significant estimates made by management; and evaluation of the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City’s financial statements for the fiscal year that ended June 30, 2023 were fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report.

GAAP requires that management provide a narr ative introduction, overview, and analysis to accompany the basic financial statements in the form of a Management’s Discussion and Analysis (“MD&A”). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the independent auditor’s report.
v

8.e
November 27, 2023

Packet Pg. 41

Profile of the Government
The City
of San Carlos, “The City of Good Living”, incorporated in 1925. It is located in the center of the San Francisco Bay Area region of the State of California, which is considered to be one of the most expensive areas of the state and country in which to live. San Francisco is 25 miles north and San Jose is 25 miles south. San Carlos boasts an ideal climate, good government, an outstanding schoo l system, attractive residential areas, a fine shopping district, excellent restaurants, a modern industrial and commercial area, and plenty of open space. As part of the northern end of Silicon Valley, San Carlos hosts several technology companies and is the address of many West Coast biotech and medical instrumentation firms. The City currently occupies a land area of six square miles and serves a population of approximately 30,000.

The City is a general law city, empowered to levy a transient occupancy tax on hotel/motel stays and a business registration fee on for-profit businesses within its boundaries. It also is empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the City Council.

The City has operated under the council-manager form of government since 1925. Policy- making and legislative authority are vested in a City Council consisting of the Mayor, selected by the Council, and four other Councilmembers. The City Council is responsible for, among other things, passing ordinances, adopting the budget, appointing advisory commissions/committees, and hiring both the City Manager and City Attorney. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the City, and for appointing the heads of the various departments. The City Council is el ected on a non-partisan, at large basis.

Councilmembers serve four-year staggered te rms, with two or three Councilmembers elected every two years. The Mayor and Vice Mayor are selected from among the five Councilmembers to serve one-year terms.

The City provides a full range of services, including: police and fire; the construction and maintenance of highways, streets, and other infrastructure; and recreational activities and cultural events.

Budget Process
The go
als of the City’s budget process are to identify necessary and/or desirable service increase options and identify possible service reduction options, which are all combined to reach a balanced and sustainable budget. Each City department is provided with a base budget with certain inflationary increases and is given an opportunity to request additional funding, if needed. The City Manager, Assistant City Manager, Administrative Services Director, and the Financial Services Manager me et with each departme nt individually to discuss and finalize the proposed budget recomm endations. In the second year of the two-year budget cycle, departments are gi ven another opportunity to review their projections and budgets and request ad ditional funding, if needed. Those recommendations are also reviewed by the City Manager, Assistant City Manager, Administrative Services Director, and Financial Services Manager. The City Manager then presents the proposed biennial budget or mi d-cycle review budget to the Council for review prior to the end of May every year. The Council holds a public hearing on the proposed budget and adopts a final budget by the end of June, the close of the City’s fiscal year. The appropriated budget is prepared by fund, function/program (e.g., public safety) vi

8.e
November 27, 2023

Packet Pg. 42

and department (e.g., Community Development). Department heads may make transfers of appropriations within a department. Transfers of appropriations between departments, but within the same fund, can be approved administratively (by the Administrative Services Director or City Manager). However, transfers of appropriations that change total fund appropriations must be approved by the Cit y Council. Expenditures that exceed appropriations at the fund level must be approved by the City Council.

Budgets are adopted on a basis consistent with GAAP. Budget-to-actual comparisons are presented in the supplementary section of the accompanying financial statements for each individual governmental fund for which an appropriated annual budget has been adopted.

The Biennial Budget for fiscal y ear (“FY”) 2021-23 was adopted by the Council via Resolution 2021-050 on June 14, 2021. The Mid-Cycle Budget Update for FY 2022-23 or the period ending June 30, 2023, was adopted by the Council via Resolution 2022-032 on March 28, 2022.

Economic Condition and Outlook
The
information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment in which the City operates.

Economic Update
Labor Market . According to the September 15, 2023 report from the California Employment Development Department (EDD), California’s unemployment rate remained at 4.6% for the third consecutive month. Since the current economic expansion began in April 2020, California has gained 3,202,200 jobs, which averages out to a gain of 80,055 jobs per month. In related data that figures into the state’s unemployment rate, there were 394,757 people certifying for unemployment in surance benefits during the August 2023 sample week. That compares to 401,745 people in July and 310,212 people in August 2022.

According to the California Employment Development Department, as of June 2023, there were an estimated
442,200 jobs in the county, a decrease of 6,500 jobs from June 2022.

The unemployment rate in San Mateo County has increased slightly from 2.4% in June 2022 to 3.1% in June 2023. The San Carlos unemployment rate has increased from 2.1% in June 2022 to 3.4% in June 2023. This compares with an unadjusted unemployment rate of 4.9% for California and 3.8% for the nation during the same period. As of June 2023, there were 1,043,800 jobs reported in Santa Clara County, an area to which our economic fortunes are closely linked. This represents an increase of 9,400 jobs from one year earlier.

Santa Clara County’s unemployment rate has increased from 2.7% in June 2022 to 3.7% in June 2023.

Sales Taxes. Steady household spending, despite historically low unemployment, has shielded the economy from recession, a uniq ue situation even as inflation exceeded Federal Reserve targets and interest rates on loans and credit cards rose. In California, sales tax performance for FY 2022-23 grew by 2.1%, but it lags far behind the double-digit growth seen during the pandemic recovery . Looking ahead, households face tight vii

8.e
November 27, 2023

Packet Pg. 43

budgets, and various industries grapple with challenges like labor costs, inventory issues, and competition. Spending generating sales taxes is expected to dip slightly in FY 2023- 24, with limited expansion anticipated in the following year.

According to our third-party consultant, HdL Companies, San Carlos’ sales tax receipts for FY 2022-23 were 2.7% below the prior year. Despite the overall decline, t he City’s largest business segment, building-constructi on, rose 6.2% with the increased cost of building materials and continued construction projects improving receipts. Autos and Transportation saw a 3.4% increase over the prior year, in-store shopping remained steady, and restaurants and hotels experienced a 1.1% increase as consumers continued to spend on dining out and travel activity remained buoyant. Revenue from fuel and service stations saw a significant drop of 52.9% largely due to fluctuations in fuel prices and reduced consumption.

Property Taxes. According to the City’s third-party consultant, HdL Companies, during 2022, there was a noticeable decline in the number of units sold in the City and a flattening of sale prices, or at least a lower rate of growth in prices, in reaction to the multiple interest rate hikes impacting mortgages and a reduction in the number of properties offered for sale. This resulted in a total growth in the assessed value of $1.11 billion for the FY 2023-24 tax year. This was following 2021, which saw unprecedented growth due to sales transactions which resulted in a $1.73 billion increase in assessed value for the FY 2022-23 tax year and was reflected in the increased property tax revenue seen in FY 2022-23. As the City entered the 2023 calendar year (the data that drives the assessed values for FY 2024-25), home sales were trending downward and sale prices into the second quarter were down compared to those reported for the full year in 2022.

In April 2021, San Mateo County was the first county in California where the median sales price for single-family homes exceeded $2 million. While still above this threshold, according to data from the California Association of Realtors, the median price of a single- family home in San Mateo County decreased by 5.4% from $2.15 million in June 2022 to $2.039 million in June 2023. In San Carlos, the median price of a single-family home in June 2023 remained more or less flat at $2,300,000 when compared to a year ago.

As the attached financial statements will reflect, the City’s conservative budgeting coupled with the unexpected growth, kept the City in strong financial shape.

Financial Policies
In June 2008, the City
Council approved fi nancial policies formalizing long standing practices used in the past to prepare the budget. The policies were established to ensure that the City's finances are managed in a manner that will: (1) continue to provide for the delivery of quality services; (2) maintain and enhance service delivery as the community grows in accordance with the City’s General Plan; (3) guarantee a balanced budget annually assuring that the City is always living within its means; and (4) establish reserves necessary to meet known and unknown future obligations. These financial policies are reviewed and updated as needed, every two years, as part of the biennial budget process.

The City Council most recently adopted th e financial policies on May 22, 2023 via Resolution 2023-061.
viii

8.e
November 27, 2023

Packet Pg. 44

Financial Control
The Fi
nance Division of the City is responsi ble for: establishing and maintaining an appropriate internal control structure surrounding the safeguarding of assets; ensuring the reliability of financial records to prepare the financial statements in conformity with GAAP; and maintaining asset accountability. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. We believe the City's systems of internal accounting controls adequately safeguard assets and provide reasonable assurance that financial transactions are properly recorded.

Long-term Financial Planning and Major Initiatives
Long-term Financial Planning

The City Council and City management continue to emphasize “structural balance” in the City’s financial planning. The City has established economic reserves to meet future opportunities and unexpected changes, and has structurally aligned its revenues and expenditures to provide for a sustainable financial balance. To that end, the City has taken the following steps over the years:
x Budget revenues conservatively and expenditures at full cost; x Maintain the condition of City facilities and infrastructure to optimize use and minimize future repair/replacement costs;
x Maintain a highly motivated, talented, and well-trained workforce to serve the needs of the community;
x Retain municipal ownership of commercial properties and use ground leases to diversify the City’s revenue stream;
x Secure outside funding and/or low-co st debt financing, and set aside City resources to pay for capital improvement program projects; and x Limit the growth of on-going expenses for City services to a financially sustainable level.

In FY 2022-23, the City Council and Executive Management staff continued the Strategic Planning process begun in FY 2005-06. As part of this process, the City retained two facilitators to lead us through the City’s Strategic Planning process. The process resulted in the review of the City’s Mission Stat ement, Vision Statement, Core Values , and the establishment of Goals and Objectives. The City Council appropriates the funds necessary to meet operating and capital activities and the adopted strategic goals and objectives. ix

8.e
November 27, 2023

Packet Pg. 45

Major Events and Initiatives
Highlight
s of the City’s major events and initiatives that were in progress as of June 30, 2023 or soon after the year-end are as follows:

Downtown Specific Plan
The City kicked off the Downtown Specific Plan project in March 2022, to create a new vision for Downtown San Carlos, including Laurel Street, El Camino Real, and the cross streets from Holly Street to Greenwood Avenue. This project will take a close look at what needs updating or changing in the downtown area (“Downtown”).

The Downtown Specific Plan will be a policy document that will:
x Establish a vision for the future of Downtown;
x Shape the look, feel, and function of Downtown;
x Define the right balance of businesses and housing;
x Increase the economic vitality of Downtown businesses; x Consider building design and heights;
x Enliven the existing parklets and parks, and consider locations for additional community gathering spaces;
x Improve walking, bicycling, and driving Downtown, including exploring whether to keep Laurel Street closed to automobiles and traffic; and x Increase connections from Downtown to surrounding neighborhoods and destinations.

Several community and stakeholder meetin gs have been held since the project was initiated including:
x Stakeholder focus group interviews (August 2022)
x Community workshop #1 (August 2022)
x Community survey (August 2022 – January 2023)
x Community workshop #2 (February 2023)
x “Coffee and Comments” open house (March 2023)
x Planning and Transportation Commi ssion Study Session (April 2023) x City Council Study Session (April 2023)
Following these efforts and after multiple meetings with the 18-member citizen- based Downtown Advisory Committee (DTAC), proposed concepts include closure of the 700 block of Laurel Street, purpose-function-improvements to alleys, design ideas for Harrington Park, and possibilities to create a new public plaza along the 600 block of Laurel Street.

The Planning and Transportation Commission and the City Council provided City staff feedback, guidance, and direction on these fundamental components of the Downtown area. Recommendations for additional design concepts for the 600 and 800 blocks of Laurel, roadways design for San Carlos Avenue and other roadways within the Downtown area, plus parking strategies, will rely on these foundational concepts for Downtown. Additional community workshops and surveys will be offered in the coming months and will address these future items. x

8.e
November 27, 2023

Packet Pg. 46

Information and updates
on the Downtown Specific Plan can be found at
www.sancarlosdowntownplan.com. The project is scheduled to be completed in March 2024.

Below Market Rate (BMR) Housing and Accessory Dwelling Units (ADUs) The City’s June 2023 Strategic Work Plan sets an objective to increase the number of below market rate (BMR) housing unit s to meet local and regional housing requirements. On June 13, 2022, the City updated the BMR Ordinance to increase the number of affordable units. The update increased the percentage of units and deepened the level of affordability required in residential ownership projects. The San Carlos City Council also extended affordability periods in perpetuity, addressed issues around unbundled park ing, and made other amendments to encourage the production and preservation of BMR units.

At its meeting in June 2023, the Planning and Transportation Commission voted to approve the 33-unit affordable housing project at 1232-1244 Cherry Street. The project is a partnership between the City and non-profit affordable housing developers, HIP Housing and Eden Housin g. The City acquired the property in February 2022 to create a 100% affordable housing project. In June 2023, the City approved a loan making $9.6M available to the developer. Undergrounding and relocation of existing utilities is ex pected to commence January 2024 and be completed by October 2024. Residential co nstruction is expected to commence November 2024 and be completed mid-2026.

The City had previously completed a 23-u nit, 100% affordable project at 817 Walnut Street with a $7.3 million loan from the City of San Carlos, and a generous partnership with Charities Housing, the local nonprofit organization that developed the property and will continue to manage the 23-unit building.

On June 26, 2023, the City Council approv ed the purchase of properties located at 1800 El Camino Real and 1131-113 3 Eaton Avenue for affordable housing redevelopment purposes. It is estimated that this site has a realistic capacity to produce 77 units of housing, of which 65 could be affordable to Very Low-, Low-, and Moderate-Income households. It is possible that the site could provide for 99 units or more of housing, depending on the impact of site constraints such as creek setbacks, building design op tions, and density bonuses that may be granted for achieving certain affordable housing goals.

Accessory Dwelling Units (ADUs) are also being leveraged by the City to create additional housing in San Carlos. As of June 30, 2023, the City approved a total of 98 dwelling units, that included 17 single-family units and 34 accessory dwelling units. Staff anticipated th e adoption of an updated ADU Ordinance in October 2023.

In addition, staff is exploring feasibility of participating in a non-profit ADU center (“21 Elements”) that could begin providing assistance to San Carlos residents by February 2024.
xi

8.e
November 27, 2023

Packet Pg. 47

Northeast Area Specific Plan
As a part of the City's 2022 Strategic Plan, the City Council established a goal to create a Northeast Area Specific Plan in response to continued development interest in the area. The Plan will focus on the area north of Holly Street, to the San Carlos City limits at Belmont Creek, and between U.S. Highway 101 and Old County Road.

The City of San Carlos will work with residents, property owners, stakeholders, business owners, committees, commissions, the Chamber of Commerce, and all other interested members of the community to develop a plan in response to continued development interest in the life sciences and biotechnology sectors and develop policies and strategies to incorporate housing as part of this new development.

The Specific Plan will:
x Create a plan for anti cipated new development
x Explore the possibility of introducing housing to the area x Plan for environmental needs, in cluding addressing the potential presence of hazardous substances
x Support industrial access and prov ide transit options through the area x Address flooding from Belmont Creek
In September 2023, the City Council held a Study Session on the draft options and concepts for the Northeast Area Specific Plan. During the Study Session, the City Council provided direction to the planning team about which elements of the draft options they liked best, and which elements need refinement.

As a next step, the planning team will revise the draft options based on input received from the City Council, Planning and Transportation Commission, property and business owners, and the community. Then, City staff will meet with stakeholders to discuss new ideas and the revised options.

The Specific Plan and environmental adoption is anticipated to be completed by October 2024.

Infrastructure Improvements
The City of San Carlos has allocated $188 million over the next five years or through June 30, 2028. These major infrastructure improvement projects are summarized below.

Major Infrastructure Projects:
Sewage Improvements and Replacements $55 million
Street Improvements $49 million
Storm Drainage System Improvements $8 million
Parks and Recreation Projects $9 million
Traffic and Transit $3 million
General Planning and Zoning Amendments $4 million
Childcare investments $9 million
xii

8.e
November 27, 2023

Packet Pg. 48

Affordable Housing $48 million
Facilities and Technology Improvements $4million
The City continues to implement the Bicycle and Pedestrian Master Plan to encourage alternative modes of transportation and improve mobility. The following three projects are currently in design phase with estimated completions in 2024, 2024, and 2027, respectively: (1) San Carlos Avenue pedestrian safety improvements phase III – Wellington to Beverley; (2) Brittan Avenue Sidewalk Construction – Sunset Drive to Rogers Avenue; and (3) the Alameda de las Pulgas Corridor Improvement project.

The City also continues to identify and implement citywide street and inte rsection projects and initiatives to improve traffic flow and parking in San Carlos. It is currently performing a citywide traffic signal study, which will include, among other things, the timing of signals along upper East San Carlos Avenue.

The City implemented a neighborhood traffic management pilot program in the Greater East San Carlos Neighborhood in July 2023 and installed a high-intensity activated crosswalk (“HAWK”) signal at Belmont and El Camino in October 2023.

In an effort to improve pedestrian safety and its ongoing effort to implement Safe Routes to Schools Program (SRTS) recommendations, rectangular rapid flashing beacons (RRFBs) and associated crosswalk improvements were constructed at San Carlos Avenue/Kenton Avenue and Sa n Carlos Avenue/Prospect Street, as well as crosswalk striping and marking at various locations per SRTS during the summer of 2023. SRTS improvements at Arroyo Avenue and Chestnut Street are currently underway and anticipated to be completed in spring 2024.

Climate Mitigation and Adaptation Plan
The City of San Carlos adopted a Climate Mitigation and Adaptation Plan (CMAP) in September 2021. The CMAP serves as a blueprint for how San Carlos will address climate change by reducing our community’s greenhouse gas emissions and adapting to changing climate conditions.

The CMAP sets the goal of reducing em issions 40% by 2030 and 80% by 2050 and includes 45 strategies to achieve th ose goals with a planning horizon out to 2050. To this end, the Council approved an annual allocation of $100,000 to be applied toward the installation of EV charging at multifamily buildings in the city.

In May 2023, City staff reviewed and provided input to OneShoreline’s Planning Policy Guide, which will be used to develop recommendations and policies for San Carlos’ sea level rise mitigation planning. Staff is currently exploring a fee study to develop an in-lieu fee to offset greenhouse gas emissions associated with projects exempted from the City’s all -electric reach code and expects to present a recommendation to the City Council in early 2024.

The City continues to collaborate with the City of Belmont and Redwood City regarding the process timeline for cleaning Cordilleras Creek. In addition, the City continues to collaborate with the City of Belmont and San Mateo County on xiii

8.e
November 27, 2023

Packet Pg. 49

Belmont Creek to discuss the storm detention pond at Twin Pines Park (design is underway) and with OneShoreline to secure regulatory permits for creek cleanups.

Staff is currently in the process of revi ewing and updating City standards related to creek setbacks, buffer zones, and mi nimum floor elevations. Furthermore, a Pulgas Creek Watershed study, with an anticipated completion date of May 2024, is in progress.

Increasing Access to Child Care
Outlined in the 2023 Strategic Workplan, the City of San Carlos set a goal to increase access to child care by reducing barriers to the creation and expansion of child care facilities.

To achieve this goal, the City drafted an ordinance, adding Chapter 8.52 to the San Carlos Municipal Code, to establish a child care development impact fee for new, non-residential developments in San Ca rlos. Staff is currently developing a strategy on how to distribute child care impact fee funds, including guidance on whether to prioritize certai n types of providers and the structure by which such funding should be provided (e.g., grants versus loans), which it plans to bring to the Council for consideration in December 2023.

In addition, the City developed a robust childcare webpage, containing resources and information for the San Carlos community, parents, and child care operators.

This dedicated webpage also includes an application process infographic and informational literature with additional child care resources.

Staff continues to research the ability of commercial daycare centers to locate in residential zoning districts and plans to incorporate a waiver of City-controlled permit fees for child care centers into the annual update for user fee schedule in January 2024.

Recreation Services
In its 2023 Strategic Plan, the City Council added a new goal to explore new recreational opportunities by completing an assessment of parks, open space, and other recreation facilities to support the health and well-being for community members of all ages. Staff expects to i ssue a request for proposals for a master plan by November 2023.

In the summer, the City hired a consultant to explore additional recreational opportunities at North Crestview Park that meet the needs of the community and by October 2023
In September 2023, the City Council adop ted a resolution finding hiking and pedestrian use of an easement at the end of Los Vientos Way consistent with the public use granted in order to encourage Midpeninsula Open Space Parks District to remove a gate and open the path for public access.
xiv

8.e
November 27, 2023

Packet Pg. 50

Construction Updates on Large Developments
Commercial Developments:
501 Industrial
Road – New Hotel
The City has received an application for a new 188 room hotel. The project includes a six-story building with at-grade parking and site landscaping improvements. The project is still under review and the building permit is expected to be issued and construction to begin in summer 2024. Its estimated completion date is fall 2025.

Alexandria Center for Life Science
The City has received an application fo r a science and technology campus. The project involves construction of an office/research and development ( “R&D”) campus-style development on the approx imately 25.34-acre site bounded by Industrial Road to the east, Commercial Street to the north, Old County Road to the west, and Pulgas Creek to the south. The site includes the following addresses:
900, 960, 961, 967 Industrial Road; 1003, 1011 Commercial Street; and 915, 1055, and 1063 Old County Road.

The proposed campus-like development includes six life science R&D buildings, one centrally located community center , two parking garages, and community- accessible open space and amenities, including enhancement of the Pulgas Creek corridor along the project’s southern boundary. Ground -floor retail amenities are proposed fronting Commercial Street an d the adjacent pedestrian walkway. The targeted retail tenant would be a grab-and-go food service and/or coffee shop that would primarily serve on-site uses. The office/R&D buildings will be at grade, five to seven stories tall, and vary in height from about 81 to 113 feet. The parking garages will each include eight levels of parking, including a rooftop and a basement level and reach heights of 80 feet.

The project will be implemented in three phases. In addition to construction of the proposed buildings and outdoor improvements, each phase would include demolition of any remaining structures in that phase area and any adjacent roadway and creek-side improvements. Th e project is currently under review including preparation of an environmental impact report (EIR). 1021 Howard Avenue
This project will include the construction of a new three-story building, providing approximately 190,869 square feet of research and development use, plus two levels of subsurface parking providing 456 parking spaces. The Planning Commission approved the project on August 1, 2022. The project is still under review and the building permit is expect ed to be issued winter 2024 with construction to begin spring 2024. Its estimated completion date is summer 2025. 1030 Brittan Avenue
This project will include the construction of a new three-story building with one level of underground parking, a first floor that includes parking and tenant space, and xv

8.e
November 27, 2023

Packet Pg. 51

two levels of laboratory and office area . The Planning Commission approved the project on July 19, 2021. The building permit was issued in June 2022 and construction is underway. Its estimated completion date is in the fall of 2024. 1091 Industrial Road
This project includes a three-story building with two levels dedicated to a parking garage below grade, and an amenity building serving food and drinks at the building’s entry. The building permit was issued in April 2021 and construction is underway. Its estimated completion date is in the spring of 2024. 405 Industrial Road
This project includes demolition of th e existing public storage buildings and construction of a new six-story building for life science R&D use with two levels of parking above grade and one parking level underground. The City Council approved the development agreement on November 28, 2022. Building permits were issued on August 29, 2023 and cons truction is currently underway with an expected completion date of spring 2025.
888 Bransten Road
This project includes demolition of existing one- and two-story industrial buildings and construction of a new 105,416 square feet, three-story building for life science R&D use with a shared parking agreement and surface parking. The Planning and Transportation Commission approved the project on March 20, 2023. Building permits are currently under review. It is estimated that construction could begin winter 2024 with an expected completion date of summer 2025. 777 Industrial Road
This project includes redevelopment of the former Honda dealership to a life science R&D building. The project includes three levels of office/lab space above at-grade parking. The Planning and Transportation Commission approved the development application in June 2021. Construction is underway with building permits issued in May 2022. Its estimated completion date is in the fall of 2024. 789 Old County Road
This project includes demolition of existing buildings and construction of two new buildings, one four-story and one six-story with at grade and underground parking for life science R&D use. The application is currently under review and if approved, construction could begin in 2024, with an expected completion date of 2026. 841 Old County Road
This project includes demolition of ex isting, one- and two-story commercial buildings and construction of two new buildings, one four-story and one five-story, with two levels of underground parking for life science R&D use. The project was xvi

8.e
November 27, 2023

Packet Pg. 52

approved by the City Council at its Octobe r 9, 2023 meeting. It is anticipated construction could begin summer 2024 with an expected completion date of fall 2025.

Residential Developments:
11 El Camino Real
T
his project proposes to redevelop an underutilized auto-centric site into a vibrant 242-unit development with an underground parking area offering 297 spaces. This proposal is the largest multifamily deve lopment ever presented in the City under the updated zoning code and Housing Element. Within this development, 15% of the units will be designated as deed-res tricted below-market-rate units (BMR), comprising 24 units affordable to very low-income households and 12 units affordable to low-income households. The Planning Commission approved the project on September 18, 2023. Building permit plans are currently under review.

Construction could begin summer 2024 with an expected completion date of winter 2025.
1232-1244 Cherry Street
This project proposes to demolish the existing vacant office building at 1232 Cherry Street and the six-unit structure at 1244 Cherry Street. The applicant proposes to construct a new five-story residential building consisting of 33 affordable housing units with 15 one-bedroom units, 9 two-bedroom units, and 9 three-bedroom units.

All residential units will be for rent at rates that are affordable to moderate- and lower-income households.

The project was approved by the Planning and
Transportation Commission meeting on June 7, 2023. Should the project be successful in its first round of funding applications, construction could begin in late 2024 with an expected completion in 2026.
1800 El Camino Real
On June 26, 2023, the City Council approv ed the purchase of properties located at 1800 El Camino Real and 1131-1133 Eaton Ave for affordable housing redevelopment purposes. It is estimated that the site has a realistic capacity to produce 77 units of housing, of which 65 could be affordable to Very Low-, Low-, and Moderate-Income households. It is possible that the site could provide for 99 units or more of housing, depending on the impact of site constraints such as creek setbacks, building design op tions, and density bonuses that may be granted for achieving certain affordable housing goals. The purchases of the properties were finalized on October 5, 2023. Developers will be invited to provide their proposals for a development program and prospective building design, as well as a prospective pro forma indicating develo pment costs, gap financing, potential sources of funding, and terms of an offer for disposition and development. 806 Alameda de las Pulgas
The City received an application for 87 townhouse units at 806 Alameda de las Pulgas. The proposed project lies on an 11.4 acre site. The Planning and Transportation Commission approved the proposed development on May 1, 2023.

The developer is currently marketing the approved project for sale to a developer. xvii

8.e
November 27, 2023

Packet Pg. 53

150-160 Vista Del Grande
The City
received an application for 89 residential units at 150-160 Vista del Grande. The proposed project lies on a 12.2 acre site. The project is currently under review.

Financial Awards and Acknowledgements
Government Finance O f
ficers Association of the United States and Canada (“ GFOA”) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report ( “Annual Report”) for the fiscal year ended June 30, 2022. This was the 29th consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, the City must publish an easily readable an d efficiently organized Annual Report. This report satisfied both GAAP and applicable legal requirements.

A Certificate of Achievement is valid for a pe riod of one year only. We believe that our current Annual Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

This report represents the culmination of months of work by dedicated staff in the Administrative Services Department-Finance Division. Special thanks go to Financial Services Manager Paul Harris, Senior Accountants Tammy Mak and Marco Lao, Accounting Technician Mithun Alexande r, Management Analyst Cheryl Hong, Administrative Assistant Madeleine Payumo, City Treasurer Inge Tiegel, and the audit staff at Badawi & Associates. Credit also must be given to City Council for its unfailing support for maintaining the highest standards of professionalism in the management of the City’s finances.

Respectfully submitted,
Jeff D. Maltbie Rebecca Mendenhall
City Manager Administrative Services Director
xviii

8.e
November 27, 2023

Packet Pg. 54

MAYOR

ADAM RAK

MEMBERS OF THE CITY COUNCIL

JOHN DUGAN,

VICE MAYOR

RON COLLINS,

COUNCIL MEMBER

SARA MCDOWELL,

COUNCIL MEMBER

PRANITA

VENKATESH,

COUNCIL MEMBER

CITY TREASURER

INGE TIEGEL

CITY STAFF

JEFF MALTBIE
City Manager

REBECCA MENDENHALL
Administrative Services
Director
xix

8.e
November 27, 2023

Packet Pg. 55

CITY STAFF

AMY NEWBY
Parks & Recreation
Director

CRYSTAL MUI
City Clerk/Director of Community
Relations

NIL BLACKBURN
Assistant City Manager

RAY IVERSON
Fire Chief

DAVE PUCCI
Deputy Fire Chief

MARK MYERS
Police Captain

GREG RUBENS
City Attorney

AL SAVAY
Community Development Director

STEVEN MACHIDA
Public Works Director
xx

8.e
November 27, 2023

Packet Pg. 56

Community
Development
Department
Administrative
Services
Department
Parks &
Recreation
Department
Organization Chart
Public Works
Department
The Residents of
the
City of San Carlos
Finance Engineering
Fleet Maintenance
Advance
Planning
Adult Community
Center
Personal Family
Development
Police
City Manager
City Council
City Treasurer
City Clerk Assistant
City Manager
Fire
Human Resources
Information
Technology
Risk Management
Current Planning
Building
Economic
Development &
Housing
Athletics
Youth
Development
Events
Parks
Maitnenance
Facilities
Maintenance
Wastewater
Stormwater
Street
Maintenance
City Attorney
xxi

8.e
November 27, 2023

Packet Pg. 57

Human Resources
Manager
(1)
Sr Management
Analyst
(1)
Information Technology
Manager
(1)
Administrative Services Department
Organization Chart
Financial Services
Manager
(1)
Administrative Services
Director
(1)
Management Analyst
(1)
Senior Accountant
(2)
Accountant
(1)
HR Management
Analyst
(1)
Sr Systems Analyst
(1)
Systems Analyst
(2)
Accounting Technician
I/II ‐ AP/AR
(1)
Administrative
Assistant
(1)
xxii

8.e
November 27, 2023

Packet Pg. 58

xxiii

8.e
November 27, 2023

Packet Pg. 59

This page intentionally left blank

8.e
November 27, 2023

Packet Pg. 60

INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and Members of the City Council
of the City of San Carlos
San Carlos, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the govern mental activities, the business-type activities, each major fund, the aggregate remaining fund informatio n, and the budgetary comparison schedule for the General Fund of the City of San Carlos (City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comp rise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements pr esent fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, the aggregate remaining fund information, and the budgetary comparison schedule for the General Fund of the City, as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting pr inciples generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing st andards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the Un ited States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethica l requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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

8.e
November 27, 2023

Packet Pg. 61

To the Honorable Mayor and Members of the City Council
of the City of San Carlos
San Carlos, California

Page 2 ends

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substa ntial doubt about the City’s ability to continue as a going concern for twelve months beyond the financ ial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

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

In performing an audit in accordance with GAAS, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence rega rding the amounts and disclosures in the financial statements.
x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. x Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the Unit ed States of America require that the management’s discussion and analysis, and the required pension and OPEB schedules on pages 5-19 and 104–114 be presented to supplement the basic financial stat ements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental 2 8.e
November 27, 2023

Packet Pg. 62

To the Honorable Mayor and Members of the City Council
of the City of San Carlos
San Carlos, California

Page 3 ends

Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational , economic, or historical context. We have applied certain limited procedures to the required supplem entary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information an d comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opin ions on the financial statements that collectively comprise the City’s basic financial statements. The combining nonmajor fund statements and the budgetary comparison schedules for the Capital Improvements Fund, Housing Fund, and nonmajor governmental funds, and the combining schedules for the internal se rvice and custodial funds are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining nonmajor fund statements and the budgetary comparison schedules for the Capital Improvements Fund, Housing Fund, and nonmajor gove rnmental funds, and the combining schedules for the internal service and custodial funds are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlyi ng accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the Unit ed States of America. In our opinion, the combining nonmajor fund statements and the budgetary comparison schedules for the Capital Improvements Fund, Housing Fund, and nonmajor governmental funds, an d the combining schedules for the internal service and custodial funds are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual comprehensive financial report. The other information comprises the informatio n included in the annual comprehensive financial report but does not include the financial statements an d our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherw ise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrec ted material misstatement of the other information exists, we are required to describe it in our report.
3 8.e
November 27, 2023

Packet Pg. 63

To the Honorable Mayor and Members of the City Council
of the City of San Carlos
San Carlos, California

Page 4 ends

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 15, 2023 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, cont racts, and grant agreements and other matters. The p u r p o s e o f t h a t r e p o r t i s s o l e l y t o d e s c r i b e t h e s cope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness o f i n t e r n a l c o n t r o l o v e r f i n a n c i a l r e p o r t i n g o r o n c o m p l i a n c e . T h a t r e p o r t i s a n i n t e g r a l p a r t o f a n a u d i t performed in accordance with Government Auditing St andards in considering the City’s internal control over financial reporting and compliance.

Badawi & Associates, CPAs
Berkeley, California
November 15, 2023
4 8.e
November 27, 2023

Packet Pg. 64

MANAGEMENT’S DISCUSSION AND ANALYSIS (“MD&A”)
This section of the City’s Comprehensive Annual Financial Report presents an overview and analysis of the City’s financial activities for the fiscal year ending June 30, 2023. We encourage readers to consider the information presented here in conjunction with the accompanying transmittal letter and basic financial statements.

FINANCIAL HIGHLIGHTS
Citywide:
x Total City assets increased by $34.6 million to $465.1 million, of which $381.9 million represented governmental assets and $83.2 million represented business-type assets. x City deferred outflows related to pension and other post-employment benefits (“OPEB”) increased by $10.4 million to $23.7 million, of which $22.0 million represented governmental deferred outflows related to pension and other post-employment benefits and $1.7 million represented business-type deferred outflows related to pension and other post-employment benefits.
x Total City liabilities increased by $37.3 million to $86.3 million, of which $82.3 million were governmental liabilities and $4.0 million were business-type liabilities. x Total City deferred inflows of resources decreased by $13.5 million to $32.4 million, of which $26.0 million were lease related (GASB 87), $5.9 million were governmental deferred inflows related to pension and other post-employment benefits and $0.5 million were business-type deferred inflows related to pension and other post-employment benefits. x The City’s assets and deferred outflows of resources exceeded the liabilities and deferred inflows by $370.1 million (“net position”), which increased by $21.3 million. Of this amount, $61.4 million represented unrestricted net position for governmental activities, which may be used to meet the government’s ongoing obligations to residents and creditors. The unrestricted net position for business-type activities was $29.5 million. x Citywide revenues were $99.3 million, of which, excluding interfund transfers, $76.5 million were generated by governmental activities that increased by $2.2 million and $22.8 million were generated by business-type activities, which increased by $0.8 million. x Citywide expenses were $75.2 million, of which $58.3 million were incurred by governmental activities and $16.9 million were incurred by business-type activities. x Included in the Statement of Activities was a reclassification of $2.8 million in governmental activities. As disclosed in the fiscal year 2022-23 report, the City reclassed $3.4 million unspent American Rescue Plan Act (ARPA) funds to unearned revenue for the previous fiscal year 2021-

22. As a result, the beginning fund balance in the Capital Fund has been adjusted and decreased by the amount of $3.4 million. Also, a $0.6 million loan balance received in fiscal year 2021-22 was reclassed to revenue. As a result, the beginning fund balance in the Housing Fund has been adjusted and increased by the amount of $0.6 million. Due to both adjustments, the Statement of Net Position for Governmental Activities was also adjusted and decreased by a total of $2.8 million. For more information, see Note 16.

Fund Level:
x Governmental funds increased by $6.7 million to $130.6 million. Of this amount, $2.9 million, or

2.2%, was unassigned fund balance and available for spending at the City’s discretion. x Governmental Fund revenues, excluding transfers, were $76.6 million, an increase of $8.4 million from the prior year.
x Governmental Fund expenditures were $67.9 million, an increase of $18.3 million from the prior year.
x Enterprise Fund net position increased by $5.2 million to $80.4 million. Of this amount, $19.1 million, or 23.8%, was restricted for enterprise activities. 5 8.e
November 27, 2023

Packet Pg. 65

x Enterprise Fund operating revenues were $22.0 million in fiscal year 2022-23, remaining flat when compared to $22.0 million in the prior year.
x Enterprise Fund operating expenditures were $15.7 million, an increase of $1.3 million from $14.4 million in the prior year.

OVERVIEW OF THE FINANCIAL STATEMENTS
The annual report consists of six parts: 1) introductory section; 2) management’s discussion and analysis (this section); 3) basic financial statements; 4) required supplementary information; 5) an optional section that presents combining statements for non-major governmental funds and internal service funds; and 6) a statistical section.

The basic financial statements include two kinds of statements that present different views of the City:
x The first two statements are government-wide financial statements that provide both long-term and short-term information about the City’s overall financial status. x The remaining statements are fund financial statements that focus on individual parts of the City government, reporting the City’s operations in more detail than the government-wide statements. o The governmental funds statements tell how general government services, like public safety, were financed in the short-term and what remains for future spending. o Proprietary fund statements offer short- and long-term financial information about the activities the government operates like businesses, such as the sewer system. o Fiduciary fund statements provide information about fiduciary relationships – like the custodial funds of the City – in which the City acts solely as agent or trustee for the benefit of others to whom the resources belong.

The financial statements also include notes that explain some of the information in these statements and provide more detailed data. The statements are followed by a section of required supplementary information that provides additional financial and budgetary information.

Figure A-1 summarizes the major features of the City’s financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of the MD&A explains the structure and contents of each of the statements.

Figure A-1
City of San Carlos Annual Comprehensive Financial Report 6 8.e
November 27, 2023

Packet Pg. 66

Reporting the City as a Whole
The accompanying government-wide financial statements include two statements that present financial data for the City as a whole. One of the most important questions asked about the City’s finances is: “Is the City, as a whole, better off or worse off as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this question. These statements include all assets and deferred outflows of resources and liabilities and deferred inflows of resources using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are taken into account regardless of when cash is received or paid.

These two statements report the City’s net position and the changes in it. One can think of the City’s net position – the difference between assets and deferred outflows of resources, and liabilities and deferred inflows of resources – as one way to measure the City’s financial health, or financial position. Over time, increases and decreases in the City’s net position are one indicator of whether its financial health is improving or deteriorating. One will need to consider other non-financial factors, such as changes in the City’s property tax base and the condition of the City’s roads, to assess the overall health of the City.

In the Statement of Net Position and the Statement of Activities, we divide the City’s services into two kinds of activities:
x Governmental activities – Most of the City’s basic services are reported here. Sales taxes, property taxes, state subventions, such as Senate Bill 1 (“SB 1”) funding for transportation, street, and road rehabilitation, and other revenues finance most of these activities. x Business-type activities – The City charges a fee to customers to help cover all or most of the cost of the services related to the Wastewater Enterprise Fund.

Reporting the City’s Most Significant Funds
The fund financial statements provide detailed information about the City’s most significant funds – not the City as a whole. Some funds are required to be established by State law or by bond covenants. However, the City Council establishes many other funds to help control and manage money for particular purposes or to show that the City is meeting administrative responsibilities for using certain taxes, grants, or other monies. The City’s two kinds of funds – governmental and proprietary – use different accounting approaches. x Governmental funds – Most of the City’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year- end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other current financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. The relationship or differences between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are described in the reconciliation that follows the fund financial statements. x Proprietary funds – When the City charges customers for the services it provides – whether to outside customers or to other units of the City – these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. In fact, the City’s enterprise funds (a component of proprietary funds) are the same as the business-type activities reported in the government-wide statements, but provide more detail and additional information, such as cash flows, for proprietary funds. Internal service funds (the other component of proprietary funds) are used to report activities that provide supplies and services for the City’s other programs and activities.
7 8.e
November 27, 2023

Packet Pg. 67

Reporting the City’s Fiduciary Responsibilities
The City is an agent for certain assets held for, and under the control of, other organizations and individuals. All of the City’s fiduciary activities are reported in a separate Statement of Fiduciary Net Position. These activities are excluded from the City’s other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. Custodial funds include the City/County Association of Governments of San Mateo County (“C/CAG”) and the Peninsula Traffic Congestion Relief Alliance (“Commute.org”). The Private Purpose Trust Fund is used to report resources held in trust for the Successor Agency of the former Redevelopment Agency (“RDA”).

Government-wide Statement Summaries
Net position may over time serve as a useful indicator of a City’s financial position. The City’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $370.1 million on June 30, 2023.

Net Position
Table 1 below reflects the City’s net position as of June 30, 2023 and June 30, 2022:

Table 1
City’s Comparative Statement of Net Position
June 30, 2023 and 2022
(Amounts in Millions)
8 8.e
November 27, 2023

Packet Pg. 68

The largest portion of the net position (59.1%) reflects the City’s $218.9 million investment in capital assets less any capital-related outstanding debt. Capital assets are the aggregated value of land, infrastructure, equipment, buildings, and improvements that are used to provide services. Their value is reported net of related debt because the funds to repay the debt come from other sources. The City’s capital assets cannot be sold and used to liquidate liabilities. This portion for the net position increased by $8.0 million, or 3.8%, over the prior year mainly because of the addition in capital assets associated with construction projects that were completed or underway. These include: the Traffic Calming Improvement project; the Fire Station 16 Replacement project; the Installation of New Sports Field Lighting at Burton Park Flanagan and Highlands Park Stadium Fields project; and the Street Resurfacing project.

Another portion of the City’s net position is subject to external restrictions, such as debt covenants, grantor’s stipulations, or enabling legislation on how it may be used. As of June 30, 2023, the restricted assets were 16.3%, or $60.3 million, of the total net position. Of this amount, $23.0 million was for low- and moderate-income housing, $15.8 million for capital projects such as street rehabilitation, and $4.2 million for debt service. The remaining $17.3 million relates to police grants, the Park In-Lieu Fees, Measure A funds, Gas Tax and Stormwater funds.

The unrestricted net position of $90.9 million represents the remaining balance of the net position. The remaining portion of the unrestricted net position may be used to meet the City’s ongoing and unexpected expenses, including facility and infrastructure improvements, pension- related liabilities, property acquisition, and emergency repairs and replacement.

At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the government as a whole and for its separate governmental and business
type activities. The City reported positive balances in these categories for the prior fiscal year as well.

Statement of Activities and Changes in Net Position
The City’s net position increased by $21.3 million, amounting to $370.1 million during the fiscal year ended June 30, 2023, as indicated in the Statement of Activities and Changes in Net Position (see Table 2 on next page).
9 8.e
November 27, 2023

Packet Pg. 69

Table 2
Statement of Activities and Changes in Net Position
June 30, 2023 and 2022
(Amounts in Millions)
The Statement of Activities presents program revenues and expenses and general revenues in detail. All of these are elements in the Changes in Net Position summarized in Table 2 above.

As of June 30, 2023, the City’s total net position was $370.1 million. This is an increase of $21.3 million, or 6.1%, from the prior year. The changes in net position are explained in the following paragraphs. Total revenue of all government-wide activities was $99.3 million, an increase of $3.0 million, or 3.1%, while the total expense of all government- wide activities increased by $10.3 million, or 15.9%, to $75.2 million.

Governmental Activities
Net position in the governmental activities totaled $289.7 million, an increase of $16.1 million, or

5.9%, from the prior year.

Total revenue for the City’s governmental activities before extraordinary gain and transfers increased by $2.2 million, or 3.0%, to $76.5 million. Total governmental activity expenses increased by $8.7 million, or 17.5%, to $58.3 million. Transfers into governmental activities from the Wastewater Fund were $0.7 million, which was $0.1 million higher than the previous fiscal year.

As shown in the Statement of Activities, the amount that taxpayers ultimately financed these activities through City taxes was $43.0 million, while some of the cost was paid by those who directly benefited from the programs ($15.1 million), or by other governments and organizations that subsidized certain programs with grants and contributions ($5.1 million), or by other general revenues ($12.5 million).
10 8.e
November 27, 2023

Packet Pg. 70

The reasons for significant changes in the revenues and expenses of the City’s governmental activities are as follows:
x Property Taxes increased by $2.3 million, or 12.4%, to $20.9 million primarily due to the substantial increase in the assessed value of properties from new developments, transfers of ownership, and the sale of properties in calendar year 2021. x Sales Taxes remained flat at $14.6 when compared with the prior year. Due to the continued inflationary environment, shifting spending patterns and rising interest rates, prices were driving positive sales tax proceeds, while offset by diminishing sales volumes. x Charges for Services increased by $3.0 million, or 24.8%, to $15.1 million. There was an increase of $2.4 million compared to the previous year due to the collection of plan check fees from large development projects. Plan check and inspection fee revenues can vary from year to year due to the timing of large-scale development projects. x Operating Grants and Contributions decreased by $1.6 million, or 23.9%, to $5.1 million, mainly due to lower commercial linkage fee receipts. This revenue category can vary from year to year due to the timing of development projects. The decrease was partially offset by receipt of American Rescue Plan Act (ARPA) funds which were transferred to the Capital Project Fund for the Fire Station 16 project.
x Capital Grants and Contributions decreased by $9.8 million, to $0.8 million, due to the recognition of American Rescue Plan Act (ARPA) grant revenue which was used for the construction of Fire Station 16, and the capitalization of 817 Walnut Avenue in the previous fiscal year.
x Other General Revenues increased by $7.2 million to $12.5 million, from the prior year.

The increase is mainly due to receiving the county-wide shortfall in motor vehicle in-lieu fees from fiscal year 2020-21 and higher interest rates on investment bank accounts. x Other Taxes include transient occupancy taxes (“TOT”) and franchise taxes, which increased by $1.1 million, or 5.2%, to $22.1 million. TOT increased by $0.6 million due to an increase in travel activity during the year. An increase in the hotel tax rate to 14% on January 1 st, 2023 from 13.5% also contributed to the increase in revenue. Franchise taxes increased by $0.4 million, based on the scheduled rate increases. x Governmental Expenses totaled $58.3 million in the fiscal year 2022-23, an increase of $8.7 million from the prior year’s expenses of $49.6 million. The increase is mainly associated with an increase in professional services expenditures to assist with the increase in the City’s development projects, cost increases in our public safety agreements, increases in salaries and benefits per the negotiated employee agreements, and increases in special events in Parks & Recreation.
11 8.e
November 27, 2023

Packet Pg. 71

Business-Type Activities
Business-type activities’ total net position for fiscal year 2022-23 was $80.4 million, an increase of $5.2 million, or 6.9%, from the prior year as indicated in the Statement of Activities and Changes in Net Position. The change in Net Position was less in the current fiscal year when compared to the prior year primarily due to higher expenditures in operating overhead. This year there was a net decrease in the investment in Silicon Valley Clean Water (“SVCW”) in the amount of $1.1 million. Every year the City adjusts this investment based on the City’s proportion of financial activity in SVCW. SVCW (formerly the South Bayside System Authority) was formed in 1975 between the cities of San Carlos, Belmont, Redwood City, and the West Bay Sanitation District to operate a wastewater treatment facility. The cost of operating and maintaining the facility is divided in proportion to the volume of sewage generated by each member entity.

Grants &
Entitlements
8% Other Taxes
10%
Other General
Revenues
17%
Charge for
Services
19%
Sales Taxes
19%
Property Taxes
27%

REVENUES BY SOURCE FOR GOVERNMENTAL

ACTIVITIES
Parks &
Recreation
10%
Community
Development
19%
General
Government
18%
Public Works
22%
Public Safety
31%

EXPENSES FOR GOVERNMENTAL ACTIVITIES
12 8.e
November 27, 2023

Packet Pg. 72

The unrestricted portion of the ending net position includes $7.5 million in investment in the SVCW joint venture. As of June 30, 2023, the City’s direct obligation is approximately $82.7 million. Since the City reports the SVCW joint venture as net investment, this obligation is not directly reported in the City’s financial statements as long-term debt. More information can be found in Note 13b to the Financial Statements.

Financial Analysis of the City’s Funds
As noted earlier, the City uses fund accounting to provide proper financial management of the City’s resources and to demonstrate compliance with finance-related legal requirements.

Governmental Funds
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the total fund balance in the General Fund was $54.5 million, representing an increase of $10.4 million, or 23.6%, higher than the fiscal year 2021-22 fund balance of $44.1 million. This increase is explained in the following paragraphs.

The General Fund’s total revenues increased by $12.7 million, or 25.6%, to $62.3 million compared to the prior fiscal year amount of $49.6 million. The General Fund expenditures totaled $49.3 million, an increase of $6.7 million, or 15.7%, from prior year expenditures of $42.6 million. The increase in expenditures was primarily caused by increases in the public safety agreements, higher professional services expenses to assist with the increase in the City’s development projects, increases in salaries and benefits per the negotiated employee agreements, and increases resulting from the increased programs, classes, and special events in Parks & Recreation.

The following chart shows the Revenues and Expenditures over the past few years:
*General Fund actual expenditures includes a $7.0 million payment towards California Public Employees Retirement System (“CalPERS”) Unfunded Pension Liability in fiscal year 2019-20.

Revenues

47.00 45.10

49.60 62.30

48.90 38.20

42.60 49.30
$32
$36
$40
$44
$48
$52
$56
$60
$64
2020* 2021 2022 2023
General Fund Revenues & Expenditures
Revenue Expenditure
13 8.e
November 27, 2023

Packet Pg. 73

Significant changes in the Revenues of the City’s General Fund from the prior year are as follows:
x Property Taxes increased by $2.3 million, or 15.0%, primarily due to an increase in the assessed value of properties for new developments, transfers of ownership, and the sale of properties.
x Sales Taxes decreased by $0.1 million, or 0.1%, in comparison with the prior year, mostly due to lower revenues in the state and county pool, business and industry, and fuel and service station categories, partially offset by increases in building and construction, general consumer goods, and autos and transportation. Due to the continued inflationary environment, shifting spending patterns and rising interest rates, prices were driving positive sales tax proceeds, while sales volumes have started to diminish. x Charges for Services increased by $3.3 million, or 59.6%. This was mainly due to the collection of plan check fees from large development projects. Plan check and inspection fee revenues can vary from year to year due to the timing of large-scale development projects.
x Use of Money and Property increased by $4.0 million, to $5.1 million. The increase is primarily due to higher interest rates in fiscal year 2022-23. In fiscal year 2021-22, investment income was poor due to offsetting by unfavorable unrealized gains from the GASB 31 Fair Market Value adjustment which led to a $4.1 million loss recognized at year- end.
x Revenues from Licenses and Permits decreased by $0.1 million, or 4.1%, when compared to the previous year. The prior year was particularly strong in this category due to the onset of several large projects and the demand for building, electrical, plumbing, encroachment, and mechanical permits. Similar to Charges for Services, this revenue category can vary from year to year due to the timing of development projects. x Business Registration increased by 0.2 million, or 20.1%, to $1.3 million compared to the prior year due to the continued recovery and growth of the local economy. x Transient Occupancy Tax, or TOT, increased by $0.6 million, or 28.4%, compared to the prior year. This increase is due the continued growth in tourism and travel activity and an increase in the tax rate effective January 1, 2023, from 13.5% to 14% due to the passage of Measure QQ in November 2018.
x Vehicle In-Lieu Revenues increased by $2.3 million, or 64.9%, compared to the prior year.

In fiscal year 2004-05, Senate Bill 1096 was enacted, which redirected Motor Vehicle License Fees (“VLF’) collected by the Department of Motor Vehicles from the cities and counties to the State. To make the cities and counties whole, the legislation specified that revenue lost by the cities would be “backfilled” by the County as a “property tax in-lieu” payment rather than paid directly by the State. The County notified the City that if the “backfilled” amount exceeded a certain limit, there would not be enough money to fully cover the amount owed. For example, in April 2021, San Mateo County notified the City that it was experiencing a countywide shortfall in fiscal year 2020-21 in the amount of $96 million due to a reduction in the number of non-basic aid school districts in the County, which in turn resulted in less available property tax revenues to fund the fiscal year 2020-21 VLF. The $2.3 million increase seen in fiscal year 2022-23 was due to payment of the county-wide shortfall from two years ago (fiscal year 2020-21) and an increase in property assessed values.
x Other General Revenues increased by $0.2 million, or 9.5%, compared to the prior year.

The increase is primarily due to donations to the Art & Wire Faire, Hometown Days Committee and Parks & Recreation Cost Reimbursements.
14 8.e
November 27, 2023

Packet Pg. 74

Expenditures
*General Fund actual expenditures includes a $7.0 million payment of California Public Employees Retirement System (“CalPERS”) Unfunded Pension Liability in fiscal year 2019-20.

Significant changes in the Expenditures of the City’s General Fund from the prior year are as follows:
x General Government Expenditures increased by $2.3 million, or 38.7%, in fiscal year 2022-23 due to an increase in professional services fees and the addition of new positions to provide administrative support to the increased need for communication and outreach. x Community Development Expenditures increased by $0.8 million, or 12.7%, largely due to higher professional consulting services and the addition of new positions in the fiscal year 2022-23 budget to implement the strategic plan objectives and to support the greater workload related to the City’s development projects.
x Public Safety Expenditures increased by $1.7 million, or 8.1%, in comparison to the previous year. The primary reasons were higher annual pension payments to CalPERS and the contract increases for fire, police, and dispatch services. x Public Works Expenditures increased by $1.1 million, or 19.8%, mainly due to the addition of new positions to support the increase in infrastructure projects. x Parks and Recreation Expenditures increased by $0.8 million, or 22.8%, mainly due to the restoration of programs, classes, and special community events.

Capital Improvement Fund – This fund had a fund balance of $31.8 million at the close of fiscal year 2022-23, which represents a decrease of $0.5 million from the adjusted prior year ending fund balance. As discussed in note 16 to the financial statements, this adjustment was due to American Rescue Plan Act (ARPA) funds being reclassed in fiscal year 2021-22 from revenue to unearned revenue. Significant changes in the Capital Improvement Fund are as follows:
x Transfers in from other funds increased by $2.8 million to $4.0 million to help fund various capital improvement projects.
x Licenses and Permits and Traffic Impact Mitigation Fees decreased by $0.7 million due to the timing of large-scale development projects.
x Other Revenue decreased by $0.1 million due to a one-time cost reimbursement to Parks and Recreation for new Burton Park batting cages in the previous year. x Property Taxes decreased by $0.1 million due to a catch-up Educational Revenue Augmentation Fund (“ERAF”) payment for fiscal year 2018-19 and 2019-20 in the previous year.
x Funding From Other Agencies increased $1.9 million due to the recognition of ARPA funds as expenditures occurred relating to the Fire Station 16 replacement project. x Use of Money and Property increased by $0.2 million due to the GASB 31 fair market adjustment in the prior year.
x Capital Project Expenditures increased by $6.4 million due to the timing and scale of capital projects Such as 1) the Fire Station 16 Replacement project; 2) the Installation of New Sports Field Lighting at Flanagan and Stadium Fields; 3) the Traffic Circle and Midblock Crossing project; 4) 2nd Floor Library Remodel project; and 5) 447 Hillcrest Wall Replacement project.
15 8.e
November 27, 2023

Packet Pg. 75

Housing Capital Projects Fund – This fund is used to account for affordable housing-related financial activities. As of June 30, 2023, it had a fund balance of $23.0 million, which is restricted for housing purposes. The fund balance decreased by $0.7 million compared to the prior year following a $0.6 million adjustment of the fiscal year 2021-22 fund balance as described in Note 16 to the financial statements.

Other Governmental Funds – The total fund balance for the Other Governmental Funds increased to $21.3 million compared with $21.1 million in the previous fiscal year, an increase of $0.2 million, or 1.0%. This was due mainly to the increase in the investment interest rate, partially offset by the decrease in capital grants.

Major Enterprise Fund – The City’s proprietary fund statements provide the same type of information found in the government-wide financial statements. The Wastewater Fund is the only enterprise fund reported in the proprietary funds Statement of Revenues, Expenses and Changes in Fund Net Position.

The Wastewater Fund’s total net position at the end of the fiscal year was $80.4 million, an increase of $5.2 million, or 6.9%. The operating revenues in the Wastewater Fund remained flat at $22 million when compared to the previous year.

Also, as stated previously, the City recorded an adjustment in the investment in SVCW during this fiscal year of $1.1 million. More detail on the investment can be found in Note 13b. Included in the $80.4 million ending net position, $15.9 million is restricted for capital projects and $3.3 million is restricted for debt service. The remaining net position is unrestricted and includes $2.0 million for pension and other benefits programs, and $27.5 million for sewer system maintenance.

Internal Service Funds – The City uses internal service funds to account for risk management, including worker’s compensation, general liability, and property insurance. The Longevity Benefits Fund is used to account for Other post-employment benefits (OPEB) for retired employees. Total net position for these funds was $1.5 million which was $0.1 million less than the prior year.

General Fund Budgetary Highlights
The final General Fund expenditure budget differs from the original adopted budget by $0.5 million, mostly because of amendments approved by City Council during the year which added appropriations. The changes were as follows:
x Increase in the General Government expenditure budget by $0.4 million for settlement agreement and release and assignment of a lease at 1144 El Camino Real. x Increase in the Administrative Services Department budget by $0.04 million for upgrading Accounting Technician II position to an Accountant Position. x Increase in the City Council one-time grant to Community Overcoming Relationship Abuse (CORA) with $0.05 million.

Major deviations between the final budget of the General Fund and its actual operating results for Revenue and Expenditures are discussed below.

Revenue. Total revenues were greater than the final budget by $10.7 million, or 20.7%. The City’s policy is to budget conservatively. Revenues are estimated using accepted standards and estimates provided by the State, other governmental agencies, and outside consultants. x Property Taxes received were higher than the budget by $1.1 million, or 6.4% due to an increase in assessed values from property sales in the Industrial Area. x Sales Taxes were higher than budget by $0.8 million, or 7.0% mainly due to increases in the building and construction category. Restaurants continued to perform well due to increased prices and a continued desire to dine out.
x Vehicle In-Lieu was higher than budgeted by $2.2 million, or 62.3%, due to the increase in property assessed values and receipt of the countywide shortfall payment during the year. 16 8.e
November 27, 2023

Packet Pg. 76

x Business Registration exceeded budget by $0.3 million, or 25.5%, due to scheduled annual rate increases and increased efforts in collecting delinquent business registration fees.
x Transient Occupancy Taxes were lower than budget by $1.1 million, or 27.8%. Although the hotel industry began to rally in FY 2021-22 following the COVID-19 pandemic, it has not yet returned to historical occupancy levels as business travel remains relatively low compared to prior to the pandemic.
x Use of Money and Property Revenues were greater than budget by $1.9 million, or

57.6%, primarily due to higher-than-expected interest rates which continued to rise throughout the year.
x Current Charges for Services were higher than budget by $3.9 million, or 80.6%, primarily due to the timing of large-scale development that fluctuates from year to year. Plan check and inspection fee revenues can vary from year to year due to the timing of large-scale development projects.
x License and Permit Revenues exceeded the budget by $0.9 million, or 38.3%, due to new residential and commercial building projects and renovations of existing properties. As noted previously, the timing of large development is difficult to predict and can fluctuate greatly from year to year.
x Revenue from Other Agencies exceeded the budget by $0.1 million mainly due to reimbursement of COVID-19 related expenses from the Federal Emergency Management Agency (FEMA).
x Other Revenue exceeded budget by $0.2 million, or 13.1%, due to increases in cost reimbursements from Recology and a court case settlement.

Expenditures. Total expenditures were under budget by $3.2 million, or 6.0%. x Salaries and Benefits were under budget by $2.9 million, or 12.5%, due to the salary and benefit savings realized from vacant or under-filled positions during the fiscal year and the savings generated from the prepayment of pension obligations in fiscal years 2017-18 and 2019-20.
x Operating Expenditures were under budget by $0.3 million, or 1.0%, primarily in professional services due to the delays in the start and completion of certain projects.

Other Budgetary Highlights
Capital Outlay for total Governmental Funds was also under budget by $27.5 million primarily due to delays in numerous other projects, including: the Fire Station 16 Replacement project; the Annual Street Resurfacing project; the Brittan Avenue Sidewalk Improvements project; and the Brittan Ave & Alameda de las Pulgas Widening project. The majority of these projects will roll forward to the next fiscal year.

Capital Assets and Debt Administration
Capital Assets
The City’s investment in capital assets for government and business-type activities amounts to $224.7 million as of June 30, 2023. The investment in capital assets includes land, buildings, machinery and equipment, park facilities, roads, and streets. The total increase in capital assets for fiscal year 2023 is $7.6 million, or 3.5%. The increase relates to the current year capital assets additions, largely the $5.0 million on the Street Resurfacing infrastructure project; the Fire Station 16 Replacement project; and the Installation of New Sports Field Lighting at Burton Park Flanagan and Highlands Park Stadium Fields project. The increase is offset by the increase in depreciation and retirement of capital assets.
17 8.e
November 27, 2023

Packet Pg. 77

For the government-wide statement of net position presentation, all depreciable capital assets are depreciated from the acquisition date to the end of the current fiscal year.

Governmental fund financial statements record capital asset purchases as expenditures. Ongoing infrastructure projects are accounted for in construction-in-progress. Additional information about the City’s capital assets can be found in Note 5 to the financial statements.

Long-Term Obligations
At the end of the fiscal year 2023, the City had total outstanding long-term obligations of $1.9 million, a decrease of 17.4%, due to the pay down of the General Obligation (“GO”) bond.

As of June 30, 2023, the City’s general obligation limit is $563.8 million, 3.75% of total assessed valuation subject to taxation. With outstanding debt of $1.9 million subject to the legal debt limit, the City is not at risk of exceeding its legal debt limit.

Additional information on the City’s long-term debt can be found in Note 7 to the accompanying financial statements.

Economic Factors and Next Year’s Budgets and Rates
The following key economic factors were considered in developing the fiscal year 2023-24 budget:
x Revenue Projections. The overall growth of the General Fund Revenue is projected to be approximately 7.2% higher than the fiscal year 2022-23 revised budget. The fiscal year 2023-24 budget reflects the continued economic growth in sales tax, TOT, and charges for current services revenue budgets and increase in the assessed value of properties. x Expenditures. The overall General Fund Expenditure is budgeted to be 6.8% higher than in the fiscal year 2022-23 revised budget. In fiscal year 2022-23, there were a number of staffing changes and program enhancements for the General Fund that have been incorporated into the budget. The changes are necessary to implement the strategic plan objectives, support the increased level of development activity, manage the increase in infrastructure projects, and advance increased communication needs. 18 8.e
November 27, 2023

Packet Pg. 78

x Capital Improvement Project Funds. An update of the five-year Capital Improvement Plan was included as part of the fiscal year 2023-24 budget process. Changes to existing projects and the addition of new projects totaling $46.7 million in expenditures were approved for fiscal year 2023-24. The major changes and additions included: (1) increases in funding for the Annual Sewer System Rehabilitation Program; (2) increases in funding for the Annual Street Resurfacing Project; (3) Annual Storm Drain Improvements Project; 4) Traffic Circle and Midblock Crossing Project; 5) Arroyo Avenue and Chestnut Street Safe Routes to School Improvements and Paving Project; 6) Intersection Pedestrian Improvements Project; 7) SRTS Intersection and Sidewalk Improvements Project; 8) Big Canyon Park Landslide Repair Projects ; 9) Dartmouth Road Landslide Repair Project; 10) Cherry Street Below Market Rate Housing Acquisition Proj ect; and 11) Affordable Housing Site Acquisition/Construction Project.
x Sewer Rate Adjustments. Per the City Council’s decision during the wastewater rate setting discussions in 2013, there will be no sewer rate increase in fiscal year 2023-24. The revenues collected through the sewer fees are used to fund capital improvements and the City’s share of the SVCW’s sewer treatment plant improvements.

Contacting the City’s Financial Management
This financial report is designed to provide our residents, taxpayers, customers, investors, and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. Questions about this report or additional financial information can be obtained by contacting the City at:

City of San Carlos
Administrative Services Department
600 Elm Street
San Carlos, CA 94070
(650) 802-4128
19 8.e
November 27, 2023

Packet Pg. 79

This page intentionally left blank
20 8.e
November 27, 2023

Packet Pg. 80

BASIC

FINANCIAL STATEMENTS
21 8.e
November 27, 2023

Packet Pg. 81

This page intentionally left blank
22 8.e
November 27, 2023

Packet Pg. 82

GOVERNMENT-WIDE

FINANCIAL STATEMENTS
23 8.e
November 27, 2023

Packet Pg. 83

This page intentionally left blank
24 8.e
November 27, 2023

Packet Pg. 84

City of San Carlos
Statement of Net Position
June 30, 2023
Governmental Business-t ype
Activities Activities Total
ASSETS
Current assets:

Cash and investments 143,729,410$ 42,854,880$ 186,584,290$ Receivables:

Accounts 4,668,176 1,060,816 5,728,992
Notes and loans 10,068,444 -1 0,068,444
Down payment assistance loan program 364,067 -3 64,067
Lease receivable 701,069 -7 01,069
Prepaid costs 1,835,629 -1 ,835,629
Property held for resale 972,829 -9 72,829
Total current assets 162,339,624 43,915,696 206,255,320 Noncurrent assets:

Lease receivable 26,667,788 -2 6,667,788
Investment in SVCW -7 ,467,296 7,467,296
Capital assets:

Nondepreciable 82,030,296 153,734 82,184,030
Depreciable 164,917,617 45,808,387 210,726,004
Less accumulated depreciation (54,087,869) (14,112,848) (68,200,717) Total capital assets 192,860,044 31,849,273 224,709,317 Total noncurrent assets 219,527,832 39,316,569 258,844,401 Total assets 381,867,456 83,232,265 465,099,721

DEFERRED OUTFLOWS OF RESOURCES
Deferred pension related items 21,171,948 1,669,275 22,841,223 Deferred OPEB related items 770,167 105,023 875,190
Total deferred outflows of resources 21,942,115 1,774,298 23,716,413

LIABILITIES
Current liabilities:

Accounts payable and accrued liabilities 14,685,488 686,906 15,372,394 Accrued benefits 222,703 - 222,703
Deposits payable 7,146,972 - 7,146,972
Unearned revenue 5,839,954 - 5,839,954
Compensated absences - current 659,378 47,339 706,717
Claims payable - current 744,400 - 744,400
Long-term debt - current portion 568,497 -5 68,497
Total current liabilities 29,867,392 734,245 30,601,637 Noncurrent liabilities:

Compensated absences 439,585 31,559 471,144
Claims payable 370,600 -3 70,600
Collective net pension liability 45,280,811 3,119,906 48,400,717 Net OPEB liability 1,087,605 148,310 1,235,915
Long-term debt 5,220,819 -5 ,220,819
Total noncurrent liabilities 52,399,420 3,299,775 55,699,195 Total liabilities 82,266,812 4,034,020 86,300,832

DEFERRED INFLOWS OF RESOURCES
Lease related 25,945,422 -2 5,945,422
Deferred pension related items 5,419,991 429,495 5,849,486 Deferred OPEB related items 511,414 69,737 581,151
Total deferred inflows of resources 31,876,827 499,232 32,376,059

NET POSITION
Net investment in capital assets 187,070,728 31,849,273 218,920,001 Restricted for:

General Government 745,816 -7 45,816
Public safety 308,435 -3 08,435
Parks and recreation 2,732,325 -2 ,732,325
Public works 13,488,403 -1 3,488,403
Housing 23,024,911 -2 3,024,911
Capital projects -1 5 ,842,296 15,842,296
Debt service 851,383 3,307,700 4,159,083
Total restricted 41,151,273 19,149,996 60,301,269
Unrestricted 61,443,931 29,474,042 90,917,973
Total net position 289,665,932$ 80,473,311$ 370,139,243$ Primary Government
See accompanying Notes to Basic Financial Statements.
25 8.e
November 27, 2023

Packet Pg. 85

City of San Carlos
Statement of Activities
For the year ended June 30, 2023
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Total Governmental activities:

General government 10,446,877 $ 1,752,358 $ 2,026,611 $ - $ 3,778,969$ Community development 11,251,181 8,616,137 491,685 - 9,107,822 Public safety 17,769,354 616,154 165,273 - 781,427 Public works 12,614,810 1,796,250 2,269,705 217,309 4,283,264 Parks and recreation 6,038,409 2,271,107 190,103 581,959 3,043,169 Interest on long-term debt 151,336 - - - - Total governmental activities 58,271,967 15,052,006 5,143,377 799,268 20,994,651 Business-type Activities:

Sewer 16,854,061 21,998,455 - - 21,998,455 Total business-type activities 16,854,061 21,998,455 - - 21,998,455 Total primary government 75,126,028$ 37,050,461 $ 5,143,377 $ 799,268 $ 42,993,106$ General Revenues:

Taxes:

Property taxes, levied for general purpose
Transient occupancy taxes
Sales taxes
Franchise taxes
Total taxes
Motor vehicle in lieu, unrestricted
Use of money and property
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning of year, as restated
Net position - end of year
Program Revenues
See accompanying Notes to Basic Financial Statements.
26 8.e
November 27, 2023

Packet Pg. 86

Governmental Business-Type
Activities Activities Total
(6,667,908)$ -$ (6,667,908) $
(2,143,359) - (2,143,359)
(16,987,927) - (16,987,927)
(8,331,546) - (8,331,546)
(2,995,240) - (2,995,240)
(151,336) - (151,336)
(37,277,316) - (37,277,316)
- 5,144,394 5,144,394
- 5,144,394 5,144,394
(37,277,316) 5,144,394 (32,132,922)
20,850,666 - 20,850,666
2,744,571 - 2,744,571
14,550,326 - 14,550,326
4,764,139 - 4,764,139
42,909,702 - 42,909,702
5,776,971 - 5,776,971
5,878,004 784,041 6,662,045
854,310 4,618 858,928
685,000 (685,000) -
56,103,987 103,659 56,207,646
18,826,671 5,248,053 24,074,724
270,839,261 75,225,258 346,064,519
289,665,932$ 80,473,311$ 370,139,243$
and Changes in Net Position
Net (Expense) Revenue
27 8.e
November 27, 2023

Packet Pg. 87

This page intentionally left blank
28 8.e
November 27, 2023

Packet Pg. 88

FUND

FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
29 8.e
November 27, 2023

Packet Pg. 89

This page intentionally left blank
30 8.e
November 27, 2023

Packet Pg. 90

The funds described below were determined to be Major Funds by the City. Individual non-major funds may be found in the Supplementary Information section.

General Fund - The primary fund of the City used to account for all revenue and expenditures not legally restricted as to use. A broad range of municipal activities are provided through this fund including City Manager, City Attorney, Administrative Services, City Clerk, Community Development, Public Safety, Public Works, and Parks and Recreation.

Capital Improvement Capital Projects Fund - This fund is used to account for major capital projects not provided for in one of the other capital projects funds.

Housing Capital Projects Fund - This fund is used to account for development fees that must be used to finance affordable housing for city residents and the housing activities assumed by the City when the former Redevelopment Agency was dissolved.

MAJOR GOVERNMENTAL FUNDS
31 8.e
November 27, 2023

Packet Pg. 91

City of San Carlos
Balance Sheet
Governmental Funds
June 30, 2023
Nonmajor Total
Governmental Governmental
Funds Funds
ASSETS
Cash and investments 68,411,909 $ 37,901,934 $ 13,402,875 $ 21,393,309 $ 141,110,027 $ Receivables:

Accounts receivable 4,218,411 236,976 - 212,789 4,668,176 Notes and loans - - 10,068,444 - 10,068,444 Down payment assistance loan program - - 364,067 - 364,067 Lease receivable 27,368,857 - - - 27,368,857 Prepaid items 1,835,629 - - - 1,835,629 Property held for resale - - 972,829 - 972,829 Total assets 101,834,806$ 38,138,910 $ 24,808,215 $ 21,606,098 $ 186,388,029 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 13,084,033 1,247,466 43,002 290,225 14,664,726 Accrued benefits 222,703 - - - 222,703 Deposits payable 7,145,443 - 1,529 - 7,146,972 Unearned revenue 725,489 5,098,681 - 15,784 5,839,954 Total liabilities 21,177,668 6,346,147 44,531 306,009 27,874,355 Deferred Inflows of Resources
Unavailable revenue 239,451 - 1,738,773 - 1,978,224 Lease related 25,945,422 - - - 25,945,422 Total deferred inflows of resources 26,184,873 - 1,738,773 - 27,923,646 Fund Balances:

Nonspendable:

Prepaid items 1,835,629 - - - 1,835,629 Restricted for:

General government -
745,816 - - 745,816 Public safety - - - 308,435 308,435 Parks and recreation - 1,186,248 - 1,546,077 2,732,325 Public works - 1,730,058 - 11,758,345 13,488,403 Debt service - - - 851,383 851,383 Housing - - 23,024,911 - 23,024,911 Committed to:

General government - - - 2,447,613 2,447,613 Community development - - - 397,955 397,955 Capital projects - 28,130,641 - 3,990,281 32,120,922 Strategic property acquisition 7,191,795 - - - 7,191,795 Assigned to:

Unfunded liabilities 7,000,000 - - - 7,000,000 Facility/infrastructure improvements 23,441,500 - - - 23,441,500 Economic uncertainties reserve 9,124,607 - - - 9,124,607 Strategic property acquisition 3,000,000 - - - 3,000,000 Unassigned 2,878,734 - - - 2,878,73 4
Total fund balances 54,472,265 31,792,763 23,024,911 21,300,089 130,590,028 Total liabilities, deferred inflows of
resources and fund balances 101,834,806$ 38,138,910$ 24,808,215$ 21,606,098$ 186,388,029$ General Fund
Capital
Improvement Housing
Capital Project Funds
See accompanying Notes to Basic Financial Statements.
32 8.e
November 27, 2023

Packet Pg. 92

Total Fund Balances - Total Governmental Funds 130,590,028$ Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. Except for the internal service funds reported below, the capital assets were adjusted as follows:

Nondepreciable 82,030,296
Depreciable, net 110,829,748
Total capital assets 192,860,044
Internal service funds were used by management to charge the costs of certain activities, such as insurance, to individual funds. The assets and liabilities of the Internal service funds were included in governmental activities in the Government-Wide Statement of Net Position. 1,499,321
Unavailable revenues recorded in the fund financial statements resulting from activities in which revenues were earned but were not available are reclassified as revenues in the Government-Wide Financial Statements. 1,978,224 In the Government-Wide Financial Statements, deferred employer contributions for pension and OPEB, certain differences between actuarial estimates and actual results, and other adjustments resulting from changes in assumptions and benefits are deferred in the current year.

Deferred outflows of resources related to pension 21,171,948 Deferred outflows of resources related to OPEB 770,167
Deferred inflows of resources related to pension (5,419,991) Deferred inflows of resources related to OPEB (511,414) Long-term liabilities were not due and payable in the current period. Therefore, they were not reported in the Governmental Funds Balance Sheet.

Compensated absences - due within one year (659,378)
Claims payable - due within one year -
Interest payable (15,700)
Long-term debt - due within one year (568,497)
Compensated absences - due in more than one year (439,585) Claims payable - due within one year -
Net pension liability (45,280,811)
Net OPEB liability (1,087,605)
Long-term debt - due in more than one year (5,220,819)
Total long-term liabilities (53,272,395)
Net Position of Governmental Activities 289,665,932$
City of San Carlos
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2023
Amounts reported for governmental activities in the statement of net position are different because:

See accompanying Notes to Basic Financial Statements
33 8.e
November 27, 2023

Packet Pg. 93

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the year ended June 30, 2023
Nonmajor Total
Governmental Governmental
Funds Funds
REVENUES:

Sales taxes 12,881,959$ -$ -$ 1,668,367$ 14,550,326$ Property taxes 17,587,725 2,819,438 - 443,503 20,850,666 Transient occupancy taxes 2,744,571 - - - 2,744,571 Franchise taxes 2,279,753 2,484,386 - - 4,764,139 Vehicle in-lieu 5,776,971 - - - 5,776,971 Business registration 1,334,055 - - - 1,334,055 Licenses and permits 3,415,774 205,709 - 111,165 3,732,648 From other agencies 172,059 1,901,698 39,441 2,373,185 4,486,383 Charges for services 8,736,288 - - 600 8,736,888 Fines and forfeitures 201,583 - - - 201,583 Use of money and property 5,143,060 67,100 298,342 531,022 6,039,524 Other revenue 1,985,373 225,333 452,273 704,691 3,367,670 Total revenues 62,259,171 7,703,664 790,056 5,832,533 76,585,424 EXPENDITURES:

Current:

General government 8,345,981 - - 351,370 8,697,351 Community development 6,973,565 - 1,483,359 - 8,456,924 Public safety 22,657,499 - - 150,000 22,807,499 Public works 6,608,
388 - - 1,813,319 8,421,707 Parks and recreation 4,473,637 - - - 4,473,637 Capital outlay - 9,007,316 - 5,286,032 14,293,348 Debt service:

Principal 123,141 - - 415,000 538,141 Interest and fiscal charges 126,859 - - 42,550 169,409 Total expenditures 49,309,070 9,007,316 1,483,359 8,058,271 67,858,016

REVENUES OVER (UNDER)
EXPENDITURES 12,950,101 (1,303,652) (693,303) (2,225,738) 8,727,408 OTHER FINANCING SOURCES (USES):

Transfers in 685,000 3,960,000 - 5,648,000 10,293,000 Transfers out (3,273,000) (3,125,000) - (3,210,000) (9,608,000) Total other financing sources (uses) (2,588,000) 835,000 - 2,438,000 685,000 Net change in fund balances 10,362,101 (468,652) (693,303) 212,262 9,412,408 FUND BALANCES:

Beginning of year 44,110,164 35,651,347 23,149,252 21,087,827 123,998,590 Restatement - (3,389,932) 568,962 - (2,820,970) Beginning of year, as restated 44,110,164 32,261,415 23,718,214 21,087,827 121,177,620 End of year 54,472,26
5$ 31,792,763$ 23,024,911$ 21,300,089$ 130,590,028$ General Fund
Capital
Improvement Housing
Capital Project Funds
See accompanying Notes to Basic Financial Statements.
34 8.e
November 27, 2023

Packet Pg. 94

City of San Carlos
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Government-Wide Statement of Activities For the year ended June 30, 2023
Net Change in Fund Balances - Total Governmental Funds 9,412,408$ Governmental funds reported capital outlay as expenditures. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over their estimated lives as depreciation expense. This was the amount of capital assets recorded in the current period. 12,748,461 Depreciation expense on capital assets was reported in the Government-Wide Statement of Activities, but did not require the use of current financial resources. Therefore, depreciation expense was not reported as expenditures in the governmental funds. (4,334,640)
Disposals of capital assets are recorded as a gain or loss in the Government-Wide Statement of Activities as a result of removal of the underlying asset along with any compensation or fees related to the disposal, but the fund financials record revenue for cash received and expense for fees paid. (549) Accrued compensated leave payments were reported as expenditures in the governmental funds, however expense is recognized in the Government-Wide Statement of Activities based on earned leave accruals. (13,198) Repayment of long-term debt was an expenditure in governmental funds, but the repayment reduced long- term liabilities in the Government-Wide Statement of Net Position.

Long-term debt repayments 538,141
Change in interest payabl
e 3,550
Amortization of bonds premium (discount), net 14,523
Current year employer pension contributions are recorded as expenditures in the governmental funds, however, these amounts are reported as a deferred outflow of resources in the Government-Wide Statement of Net Position. 5,127,635
Pension expense is reported in the Government-Wide Statement of Activities does not require the use of current financial resources, and therefore is not reported as expenditures in governmental funds. (4,303,317) Unavailable revenues recorded in the fund financial statements resulting from activities in which revenues were earned but were not available are reclassified as revenues in the Government-Wide Financial Statements. (219,314)
Internal service funds were used by management to charge the costs of certain activities, such as insurance and fleet management, to individual funds. The net revenue of the internal service funds was reported with governmental activities. (147,029)
Change in Net Position of Governmental Activitie
s 18,826,671$
Amounts reported for governmental activities in the Government-Wide Statement of Activities were different because:

See accompanying Notes to Basic Financial Statements
35 8.e
November 27, 2023

Packet Pg. 95

City of San Carlos
Budgetary Comparison Statement by Department
General Fund
For the year ended June 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Sales taxes 12,038,500$ 12,038,500$ 12,881,959$ 843,459$ Property taxes 16,524,000 16,524,000 17,587,725 1,063,725 Transient occupancy taxes 3,800,000 3,800,000 2,744,571 (1,055,429) Franchise taxes 1,949,900 1,949,900 2,279,753 329,853 Vehicle in-lieu 3,560,000 3,560,000 5,776,971 2,216,971 Business registration 1,063,400 1,063,400 1,334,055 270,655 Licenses and permits 2,469,200 2,469,200 3,415,774 946,574 From other agencies 40,800 40,800 172,059 131,259 Charges for services 4,837,000 4,837,000 8,736,288 3,899,288 Fines and forfeitures 306,700 306,700 201,583 (105,117) Use of money and property 3,262,500 3,262,500 5,143,060 1,880,560 Other revenue 1,755,100 1,755,100 1,985,373 230,273 Total revenues 51,607,100 51,607,100 62,259,171 10,652,071 EXPENDITURES:

Current:

General government:

City council 306,400 356,400 302,916 53,484 City manager 2,481,500 2,481,500 1,882,391 599,109 City clerk 563,900 563,900 416,183 147,717 Administrative services 3,948,050 3,989,900 3,541,456 448,444 General government 428,100 428,100 1,759,402 (1,331,302) City treasurer 21,900 21,900 10,054 11,846 City attorney 3
88,900 778,900 683,579 95,321 Total general government 8,138,750 8,620,600 8,595,981 24,619 Community development:

Administration 1,175,150 1,175,150 1,012,185 162,965 Economic development 670,400 530,400 198,298 332,102 Building 2,748,550 2,748,550 2,482,870 265,680 Planning 2,381,100 2,501,100 2,497,168 3,932 Advance planning 1,057,200 1,057,200 783,044 274,156 Total community development 8,032,400 8,012,400 6,973,565 1,038,835 Public safety:

Police 12,098,500 12,111,600 11,252,765 858,835 Fire 11,633,800 11,633,800 11,404,734 229,066 Total public safety 23,732,300 23,745,400 22,657,499 1,087,901 Budgeted Amounts
36 8.e
November 27, 2023

Packet Pg. 96

City of San Carlos
Budgetary Comparison Statement by Department, Continued General Fund
For the year ended June 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Public works:

Administration 2,463,050 2,313,050 1,622,989 690,061 Garage 102,425 58,425 46,108 12,317 Street maintenance 437,900 599,900 579,294 20,606 Park maintenance 2,661,925 2,736,925 2,736,669 256 Traffic control 329,300 306,300 290,753 15,547 Building maintenance 1,343,375 1,343,375 1,332,575 10,800 Total public works 7,337,975 7,357,975 6,608,388 749,587 Parks and recreation:

Administration 893,650 903,650 806,906 96,744 Recreation 3,770,700 3,820,700 3,666,731 153,969 Total parks and recreation 4,664,350 4,724,350 4,473,637 250,713 Total expenditures 51,905,775 52,460,725 49,309,070 3,151,655

REVENUES OVER (UNDER)
EXPENDITURES (298,675) (853,625) 12,950,101 13,803,726 OTHER FINANCING SOURCES (USES):

Transfers in 685,000 685,000 685,000 - Transfers out (3,273,000) (3,273,000) (3,273,000) - Total other financing sources (uses) (2,588,000) (2,588,000) (2,588,000) - Net change in fund balances (2,886,675)$ (3,441,625)$ 10,362,101 13,803,726$ FUND BALANCES:

Beginning of year 44,110,164
End of year 54,472,26
5$
Budgeted Amounts
37 8.e
November 27, 2023

Packet Pg. 97

Proprietary funds account for City operations financed and operated in a manner similar to a private business enterprise.

The intent of the City is that the cost of providing goods and services be financed primarily through user charges.

The concept of major funds extends to Proprietary Funds.

Budget versus actual comparisons regarding proprietary funds that are major funds are not presented.

Sewer Enterprise Fund - This fund is used to account for sewage treatment, transmission, major replacements and improvements to the City’s sewer system.

MAJOR PROPRIETARY FUNDS
38 8.e
November 27, 2023

Packet Pg. 98

City of San Carlos
Statement of Net Position
Proprietary Funds
June 30, 2023
Business-Type Activities
Enterprise Fund Governmental
Activities -
Internal Service
ASSETS Funds
Current Assets:

Cash and investments 42,854,880$ 2,619,383$ Receivables:

Accounts receivable 1,060,816 -
Total current assets 43,915,696 2,619,383 Noncurrent:

Investment in SVCW 7,467,296 -
Capital assets:

Nondepreciable capital assets 153,734 - Depreciable capital assets 45,808,387 -
Accumulated depreciation (14,112,848) -
Net capital assets 31,849,273 -
Total noncurrent assets 39,316,569 -
Total assets 83,232,265 2,619,383

DEFERRED OUTFLOWS OF RESOURCES
Deferred pension related items 1,669,275 - Deferred OPEB related items 105,023 - Total deferred outflows of resources 1,774,298 -

LIABILITIES
Current liabilities:

Accounts payable and accrued liabilities 686,906 5,062 Compensated absences - current 47,339 - Claims payable - current - 744,400 Total current liabilities 734,245 749,462 Noncurrent liabilities:

Compensated absences 31,559 -
Claims payable - 370,600 Net pension liability 3,119,906 -
Net OPEB liability 148,310 -
Total noncurrent liabilities 3,299,775 370,600 Total liabilities 4,034,020 1,120,062

DEFERRED INFLOWS OF RESOURCES
Deferred pension related items 429,495 - Deferred OPEB related items 69,737 - Total deferred inflows of resources 499,232 -

NET POSITION
Net investment in capital assets 31,849,273 - Restricted for:

Capital projects 15,842,296 -
Debt service 3,307,700 -
Unrestricted 29,474,042 1,499,321
Total net position 80,473,
311$ 1,499,321$
Sewer
See accompanying Notes to Basic Financial Statements.
39 8.e
November 27, 2023

Packet Pg. 99

City of San Carlos
Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
For the year ended June 30, 2023
Business-Type Activities
Enterprise fund Governmental
Activities -
Internal Service
Funds
OPERATING REVENUES:

Charges for services 21,998,455$ 885,100 $ Cost reimbursements - 1,624,900 Total operating revenues 21,998,455 2,510,000 OPERATING EXPENSES:

Salaries and benefits 2,352,074 -
Sewer operations 9,426,163 -
Insurance premiums - 1,144,261 Claims expense - 1,534,543 Depreciation expense 1,139,947 -
Miscellaneous 2,777,200 26,302
Total operating expenses 15,695,384 2,705,106 Operating income (loss) 6,303,071 (195,106) NONOPERATING REVENUES (EXPENSES):

Investment income 784,041 48,077
Miscellaneous 4,618 -
Decrease in investment in Sewer Authority (1,158,677) - Total nonoperating revenues (expenses) (370,018) 48,077 Income before contributions and transfers 5,933,053 (147,029) CONTRIBUTIONS AND TRANSFERS:

Transfers out (685,000) -
Total contributions and transfers (685,000) - Change in net position 5,248,053 (147,029) NET POSITION:

Beginning of year 75,225,258 1,646,350
End of year 80,473,311$ 1,499,321$
Sewer
See accompanying Notes to Basic Financial Statements.
40 8.e
November 27, 2023

Packet Pg. 100

City of San Carlos
Combining Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2023
Enterprise Funds Governmental
Activities -
Internal Service
Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers and users 21,907,060$ -$ Cash received from/(paid to) interfund services - 2,510,000 Cash paid to suppliers for goods and services (12,176,649) (697,692) Cash paid to employees for services (1,901,545) - Claims paid - (1,534,543) Net cash provided by (used in) operating activities 7,828,866 277,765 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Cash transfers out (685,000) -
Net cash provided by (used in)
noncapital financing activities (685,000) - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Acquisition and construction of capital assets (248,559) - Net cash provided by (used in)
capital and related financing activities (248,559) - CASH FLOWS FROM INVESTING ACTIVITIES:

Change in investments -
Interest received 784,041 48,077
Miscellaneous 4,618 -
Net cash provided by (used in) investing activities 788,659 48,077 Net cash flows 7,683,966 325,842
CASH AND INVESTMENTS - Beginning of year 35,170,914 2,293,541 CASH AND INVESTMENTS - End of year 42,854,880$ 2,619,383$

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:

Operating income (loss) 6,303,071$ (195,106)$ Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:

Depreciation 1,139,947 -
Changes in assets and liabilities:

Receivables, net (91,395) -
Accounts payable 26,714 (32,129)
Compensated absences (16,861) -
Claims payable - 505,000 Net pension liability and deferred outflows/inflows of resources 518,177 - Net OPEB liability and deferred outflows/inflows of resources (50,787) - Net cash provided by (used in) operating activities 7,828,866$ 277,765$ NONCASH TRANSACTIONS:

Investment in joint venture (1,158,677)$ -$ Business-Type Activitie
s
Sewer
See accompanying Notes to Basic Financial Statements.
41 8.e
November 27, 2023

Packet Pg. 101

This page intentionally left blank
42 8.e
November 27, 2023

Packet Pg. 102

Fiduciary Funds are presented separately from the Government-wide and Fund Financial Statements. These include the following:

Successor Agency of the Former RDA Private Purpose Trust Fund - This fund is used to account for the activities related to the dissolution of the former San Carlos Redevelopment Agency.

Custodial Funds - Custodial Funds are used to account for fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private-purpose trust funds .

FIDUCIARY FUNDS
43 8.e
November 27, 2023

Packet Pg. 103

City of San Carlos
Statement of Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2023
Private Purpose
Trust Fund
Successor
Agency of the
Former RDA Custodial Funds
ASSETS
Cash and investments 1,104,862$ 28,977,381$ Receivables:

Accounts receivable - 3,831,382 Notes and loans - 2,769,314 Grants receivable - 1,763,592 Prepaid items - 29,122 Total assets 1,104,862 37,370,791

LIABILITIES
Accounts payable and accrued liabilities 84,774 6,829,172 Unearned revenue - 782,856 Long-term liabilities:

Long-term debt - due within one year 803,023 - Long-term debt - due in more than one year 10,273,222 - Total liabilities 11,161,019 7,612,028

NET POSITION
Restricted for:

Individuals, organizations, and other governments (10,056,157) - Held in trust for private purposes - 29,758,762 Total Net Position (10,056,157)$ 29,758,762$ See accompanying Notes to Basic Financial Statements.
44 8.e
November 27, 2023

Packet Pg. 104

City of San Carlos
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2023
Private Purpose
Trust Fund
Successor
Agency of the
Former RDA Custodial Funds
ADDITIONS:

Taxes 1,272,492$ -$
Members contributions - 2,570,408
Intergovernmental - 15,909,595
Fees and assessments - 2,577,029
Miscellaneous - 722,524
Total additions 1,272,492 21,779,556 DEDUCTIONS:

Administrative expenses 9,800 635,429 Distribution - 12,337,070 Professional services - 8,095,832 Interest expense 471,642 -
Total deductions 481,442 21,068,331 Change in net position 791,050 711,225 NET POSITION:

Beginning of year (10,847,207) 29,047,537 End of year (10,056,157)$ 29,758,762$
See accompanying Notes to Basic Financial Statements.
45 8.e
November 27, 2023

Packet Pg. 105

This page intentionally left blank
46 8.e
November 27, 2023

Packet Pg. 106

NOTES TO BASIC

FINANCIAL STATEMENTS
47 8.e
November 27, 2023

Packet Pg. 107

This page intentionally left blank.
48 8.e
November 27, 2023

Packet Pg. 108

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
The City of San Carlos (“City”) is a general-law city that operates under the Council-Manager form of government, with five elected Council members served by a full-time City Manager and staff. Services provided by the City include public safety, streets and roads, parks and recreation, planning and community development, and others. The accounting policies of the City conform to Generally Accepted Accounting Principles (“GAAP”) as applicable to governments. These financial statements include the City and its component units – entities for which the City is financially accountable. Blended component units, although legally separate entities, are in substance part of the City's operations, therefore data from these units are combined with City data. Their financial activities have been aggregated and merged (termed “blending”) with those of the City in the accompanying financial statements.

The San Carlos Housing Authority (“Housing Authority”) is a separate government entity whose purpose is to provide housing to low and moderate income families within certain areas of the city. The Housing Authority is both controlled by and financially dependent on the City. The City Council members serve as the Authority’s Commissioners. The bond issuance authorizations are approved by the City’s Council and the City is legally obligated to provide resources in case there are deficiencies in debt service payments and resources are not available from any other remedies. As such, the financial activities of the Housing Authority have been included in these financial statements, and no separate statements for the Housing Authority were prepared.

B. Basis of Presentation
The City's Basic Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.

Government-wide Statements : The Statement of Net Position and the Statement of Activities display information about the primary government (City) and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. All fiduciary activities are reported only in the fund financial statements. Eliminations have been made to minimize the double counting of internal activities; however, inter-fund services provided and used are not eliminated in the process of consolidation. These statements distinguish between the governmental and business-type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties.

The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include: (a) charges paid by the recipients of goods or services offered by the programs; (b) grants and contributions that are restricted to meeting the operational needs of a particular program; and (c) fees, grants, and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. 49 8.e
November 27, 2023

Packet Pg. 109

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED B. Basis of Presentation, continued
Fund Financial Statements : Fund financial statements provide information about the City's funds, including fiduciary funds and blended component units. Separate statements for each fund category, governmental, proprietary and fiduciary, are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non-major funds.

Proprietary fund operating revenues and expenses, such as charges for services and salaries and benefits, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues and expenses, such as investment earnings and interest expense, result from non-exchange transactions or ancillary activities.

C. Major Funds
The City's major governmental and business-type funds are identified and presented separately in the fund financial statements. All other funds, called non-major funds, are combined and reported in a single column.

Major funds are defined as funds that have either assets, deferred outflows of resources, liabilities, deferred inflows of resources, revenues or expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand total. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds.

The following major governmental funds are reported in the accompanying financial statements:

General Fund: The primary fund of the City that is used to account for all revenues and expenditures of the City not legally restricted as to use. A broad range of municipal activities are provided through this fund including City Council, City Manager, City Attorney, Administrative Services, City Clerk, Community Development, Public Safety, Public Works, and Parks and Recreation.

Capital Improvement Capital Projects Fund: Used to account for major capital projects not provided for in one of the other capital project funds.

Housing Capital Projects Fund : Used to account for development fees that must be used to finance affordable housing for city residents and the housing activities assumed by the City when the former Redevelopment Agency was dissolved.

The City reports the following major enterprise fund in the accompanying financial statements:

Wastewater (Sewer) Enterprise Fund : Used to account for sewage treatment, transmission, major replacements and improvements to the City's sewer system.

The City also reports the following fund types:

Internal Service Fund: These funds account for workers’ compensation, general liability and other post- employment benefits; all of which are provided to other departments on a cost-reimbursement basis. 50 8.e
November 27, 2023

Packet Pg. 110

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED C. Major Funds, continued
Fiduciary Funds: Custodial funds are used to account for assets held by the City as an agent for the City/County Association of Governments of San Mateo County (C/CAG), and Peninsula Traffic Congestion Relief Alliance (Commute.org). Private-purpose trust funds are used to account for the assets and liabilities of the former Redevelopment Agency and the allocated revenue to pay estimated installment payments of enforceable obligations until the obligations of the former Redevelopment Agency are paid in full and assets have been liquidated. All fiduciary funds use the accrual, rather than the modified accrual, basis of accounting.

The financial activities of these funds are excluded from the Government-wide financial statements, but are presented in separate Fiduciary Fund financial statements.

D. Basis of Accounting
The Government-wide, proprietary funds and fiduciary funds financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers revenues reported in the governmental funds to be available if the revenues are collected generally within 60 days after year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, including lease liabilities, as well as claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Governmental capital asset acquisitions, including entering into contracts giving the City the right to use leased assets are reported as expenditures in governmental funds.

Proceeds of governmental long-term debt and financing through leases are reported as other financing sources.

Those revenues susceptible to accrual are property, sales and use, transient occupancy, franchise and gas taxes, intergovernmental revenues, grants, and interest revenue. Fines, licenses and permits, and charges for services are not susceptible to accrual because they are not measurable until collected.

Non-exchange transactions are those in which the City gives or receives value without directly receiving or giving equal value in exchange, and includes taxes, grants, entitlements and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed.

Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

The City may fund programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenditures. The City's policy is to firs t apply restricted grant resources to such programs, followed by general revenues if necessary.

Certain indirect costs are included in program expenses reported for individual functions and activities. 51 8.e
November 27, 2023

Packet Pg. 111

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED E. Property Taxes and Sewer Charges
Revenue is recognized in the period for which the tax and assessment is levied. The County of San Mateo (“County”) levies, bills, and collects property taxes and sewer charges for the City. The County remits the entire amount levied and handles all delinquencies, retaining interest and penalties. Secured and unsecured property taxes are levied on January 1.

Secured property tax is billed in two equal installments – on November 1 and February 1 – due by December 10 and April 10 (of the following year), respectively. Taxes are considered delinquent if paid after the due dates. Unsecured property tax is due on July 1 and becomes delinquent on August 31.

The term "unsecured" refers to taxes on personal property other than real estate, land and buildings.

These taxes are secured by liens on the property being taxed. Property tax revenues are recognized by the City in the fiscal year they are assessed, provided they become available as defined above; generally within 60 days.

F. Assets, Deferred Inflows/Outflows, Liabilities and Fund Balance Net Position Investments For financial reporting purposes, investments are adjusted to their fair value. Changes in fair value that occur during a fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments. Some investments are valued on an unamortized cost basis. For these investments, there is no material difference from fair value.

The City pools cash and investments of all funds, except for assets held by fiscal agents. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments.

Investment income earned by the pooled investments is allocated to the various funds based on each fund’s average cash and investment balance.

Cash and Cash Equivalents
For purposes of the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of change in value because of changes in interest rates. Cash equivalents also represent the proprietary fund’s share in the cash and investment pool of the City. Cash equivalents have an original maturity date of three months or less from the date of purchase. For purposes of the statement of cash flows, the entire balance of cash and investments on the combined balance sheet for the proprietary funds is considered cash and cash equivalents.

Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both Government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. 52 8.e
November 27, 2023

Packet Pg. 112

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED F. Assets, Deferred Inflows/Outflows, Liabilities and Fund Balance Net Position Investments, continued
Capital Assets
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available, except for the intangible right-to-use lease assets, the measurement of which is discussed in Note 7 below. Capital assets received in a service concession arrangement should be reported at acquisition value rather than fair value. The City's policy is to capitalize all assets with costs exceeding the $5,000 threshold and a useful life of more than one year. Donated capital assets, donated works of art and similar items, are reported at acquisition value rather than fair value.

All capital assets with limited useful lives and the right-to-use leased assets are depreciated over their estimated useful lives. The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charged to depreciation expense each year represents that year's pro rata share of the cost of capital assets.

Depreciation is provided using the straight-line method, which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. The City has assigned the useful lives listed below to capital assets:

Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of the business-type activities is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period.

Deferred Outflows/Inflows of Resources
In addition to assets, the statements of net position and the governmental fund balance sheet report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and will not be recognized as an outflow of resources (expense/expenditure) until then. The City only has two items that qualify for reporting in this category, which is deferred outflows relating to the net pension and other post-employment benefit liabilities reported in the statements of net position. These outflows are the result of contributions made after the measurement period, which are expensed in the following year, and of adjustments due to the differences between actuarial estimates and actual results, along with changes in the City’s proportionate share in the pension cost-sharing plan.

In addition to liabilities, the statements of net position and the governmental balance sheet report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. The City has three items that qualify for reporting in this category. 1) Deferred inflows relating to the net pension and other post-employment benefits liabilities reported in the Government-wide statement of net position. These inflows are the result 53 8.e
November 27, 2023

Packet Pg. 113

These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 3) Deferred inflows relating to the leases receivable for the City as a lessor.

Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Compensated Absences
Compensated absences comprise unpaid vacation that is accrued as earned. All employees who hold full-time regular positions are entitled to 12 working days of vacation pay upon successful completion of their first year of continuous service. Management employees may be entitled to a higher accrual rate based on prior work at a reciprocal agency or a CalPERS agency per the Salaries and Benefits resolution.

The accrual rate increases after length of service exceeds four years. Maximum accumulation of vacation is two years of vacation accrual. Upon termination or retirement, full-time employees are entitled to receive compensation at their current base salary for all unused vacation leave. The City's liability for compensated absences is recorded in the statements of net position. The compensated absences are reported in governmental funds only if they are matured. The liability for compensated absences is determined annually. For governmental funds, the portion expected to be permanently liquidated is recorded as fund liabilities.

Compensated absences are liquidated by the fund that has recorded the liability – primarily the General Fund.

Pensions
In Government-wide financial statements, retirement plans (pensions) are required to be recognized and disclosed using the accrual basis of accounting (see Note 10) and the required supplementary information (“RSI”) section immediately following the Notes to Financial Statements, regardless of the amount recognized as pension expenditures on the governmental fund statements, which use the modified accrual basis of accounting.

In general, the City recognizes a net pension liability, which represents the City’s proportionate share of the excess of the total pension liability over the fiduciary net position of the pension reflected in the actuarial report provided by the California Public Employees’ Retirement System (“CalPERS”). The net pension liability is measured as of the City’s prior fiscal year end. Changes in the net pension liability are recorded in the period incurred as pension expenses or as deferred inflows of resources or deferred outflows of resources depending on the nature of the change. The changes in net pension liability that are recorded as deferred inflows of resources or deferred outflows of resources (that arise from changes in actuarial assumptions or other inputs and differences between expected or actual experience) are amortized over the weighted average remaining service life of all participants in the respective pension plan and are recorded as a component of pension expense beginning with the period in which they are incurred.
54 8.e
November 27, 2023

Packet Pg. 114

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED F. Assets, Deferred Inflows/Outflows, Liabilities and Fund Balance Net Position Investments, continued
For purposes of measuring the net pension liability and deferred outflows/inflows of resources relating to pensions and pension expense, information about the fiduciary net position of the City’s pension plan with CalPERS and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. For th is purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit’s terms.

Investments are reported at fair value.

Projected earnings on pension investments are recognized as a component of pension expense.

Differences between projected and actual investment earnings are reported as deferred inflows of resources or deferred outflows of resources and amortized as a component of pension expense on a closed basis over a five-year period beginning with the period in which the difference occurred. Each subsequent year will incorporate an additional closed basis five-year period of recognition.

Fund Balance
In the fund financial statements, governmental funds report the following fund balance classifications:

Nonspendable: Amounts that cannot be spent because they are either (a) not in spendable form, or (b) legally or contractually required to be maintained intact.

Restricted: Amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws or regulations of other governments, or (b) by law through constitutional provisions or enabling legislation.

Committed: Amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest authority – the City Council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a City Council resolution.

Assigned: Amounts that are constrained by the government’s intent to be used for specific purposes but are neither restricted nor committed. The City Manager is authorized to assign amounts to a specific purpose, which is established by City Council resolution.

Unassigned: The residual amounts that have not been restricted, committed, or assigned to specific purposes. The general fund is the only fund that reports an unassigned fund balance amount. In other governmental funds it is not appropriate to report an unassigned fund balance amount. However, in governmental funds other than the general fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

The City Council adopts and amends committed fund balance amounts through resolution. The City Council authorizes assigned amounts for specific purposes pursuant to the policy-making powers granted through resolution.
55 8.e
November 27, 2023

Packet Pg. 115

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED F. Assets, Deferred Inflows/Outflows, Liabilities and Fund Balance Net Position Investments, continued
Fund Balance Flow Assumption
Sometimes the City will fund outlays for a particul ar purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). To calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to use assigned fund balance for the purpose for which it was assigned.

The hierarchy followed to deplete the reserves is as follows: first unassigned fund balance will be depleted; second assigned fund balances will be depleted at discretion of the City Manager; and lastly committed fund balances will be depleted in accordance to approved commitments and formal action of the City Council.

Net Position
Net position is the excess of all the City's assets and deferred outflows over all its liabilities and deferred inflows, regardless of fund. Net position is divided into three captions. These captions apply only to net position, which is determined only at the Government-wide level, and are described below:

Net investment in capital assets describes the portion of net position that is represented by the current net book value of the City's capital assets, less the outstanding balance of any debt issued to finance these assets.

Restricted describes the portion of net position that is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions that the City cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt service requirements, and funds restricted to low- and moderate-income purposes.

Unrestricted describes the portion of net position that is not restricted to use.

Net Position Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. To calculate the amounts to report as restricted net position and unrestricted net position in the Government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted net position to have been depleted before unrestricted net position is applied.
56 8.e
November 27, 2023

Packet Pg. 116

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED G. Budgets and Budgetary Accounting Policies
The City typically adopts a biennial operating budget on or before June 30 to ensure that two fiscal years for the General Fund, all Special Revenue Funds, and all Debt Service Funds are budgeted. Expenditures for the Capital Projects Funds are budgeted and managed on a project length basis. The City follows a budgeting process in which the City’s plans and objectives are outlined and budgeted. This work program is reviewed with the City Council to determine the priority and timing of plans and objectives. Revisions are made to the work program, which in its final form is adopted by the City Council as an operating budget, effective July 1 for the ensuing fiscal year. From the effective date of the budget, the amounts stated therein as proposed expenditures become appropriations to the various funds.

City Council may amend the budget by resolution during the fiscal year. The City Manager may transfer appropriations from one program, activity, or object to another within the same department or between departments. However, transfers of appropriations that change total fund appropriations must be approved by the City Council. Expenditures that exceed appropriations at the fund level must be approved by the City Council. Budgets are adopted on a basis consistent with GAAP. Department heads may make transfers of appropriations within a department. Transfers of appropriations between departments, but within the same fund, can be approved administratively (by the Administrative Services Director or City Manager).

H. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City categorizes its fair value measurements within the fair value hierarchy established by GAAP. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs are inputs, other than quoted prices included within Level 1, which are observable for an asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for an asset or liability.

If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement.

I. Estimates and Assumptions
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting period. Actual results could differ from those estimates. 57 8.e
November 27, 2023

Packet Pg. 117

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 2 - CASH AND INVESTMENTS
The City pools cash from all sources and all funds except cash and investments held by trustees so that it can be invested at the maximum yield consistent with safety and liquidity, while individual funds can make expenditures at any time.

A. Policies
California Law requires banks and savings and loan institutions to pledge government securities with a market value of 110% of the City's cash on deposit, or first trust deed mortgage notes with a market value of 150% of the deposit, as collateral for these deposits. This collateral is held in a separate investment pool by another institution in the City's name and places the City ahead of general creditors of the institution.

The City invests in investment pools. While individual investments are allowed under the City’s Investment Policy and are defined as specific identifiable securities instruments, or an electronic entry registering the owner in the records of the institution issuing the security, called the book entry system, the City primarily invests in investment pools. To increase security, the City employs the trust department of a bank as the custodian of certain City managed investments, regardless of their form.

The City's investments are carried at fair value, as required by GAAP. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, including the effects of these adjustments in income for that fiscal year.

B. Classification
Cash and investments as of June 30, 2023 are classified in the following financial statements as follows:

Cash and investments as of June 30, 2023 consist of the following:
58 8.e
November 27, 2023

Packet Pg. 118

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 2 - CASH AND INVESTMENTS, CONTINUED
C. Investments Authorized by the California Government Code and the City's Investment Policy The following table identifies the investment types that are authorized for the City by the California Government Code (or the City’s Investment Policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s Investment Policy, where more restrictive) that address interest rate risk, credit risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of bond indentures of the City, rather than the general provisions of the California Government Code or the City’s Investment Policy.
59 8.e
November 27, 2023

Packet Pg. 119

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 2 - CASH AND INVESTMENTS, CONTINUED
D. Investments Authorized by Debt Agreements
The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with City resolutions, bond indentures or State statutes.

The table below identifies the investment types that are authorized for investments held by fiscal agents.

The table also identifies certain provisions of these debt agreements.

E. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City’s investment policy is to hold investments to maturity to mitigate the interest rate risk. Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity or earliest call date.

Authorized Investment Type
Minimum
Credit
Quality
Securities of the U.S. Government or its agencies None
Time certificates of deposit None
Bankers acceptances None
Commercial paper A1
California Local Agency Investment Fund None
Repurchase agreements None
Small Business Administration loans None
Money market funds AAA-m (1)
Negotiable certificates of deposit None
Investment agreement None
Tax-exempt obligations AAA
(1) San Carlos RDA 2018 TAB
60 8.e
November 27, 2023

Packet Pg. 120

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 2 - CASH AND INVESTMENTS, CONTINUED
F. Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating, by Standard and Poor’s, as of June 30, 2023 for each investment type.

G. Fair Value Hierarchy
The City categorizes its fair value measurements within the fair value hierarchy established by GAAP.

The hierarchy is based on the valuation inputs used to measure fair value of the assets: 1) Level 1 inputs are quoted prices in an active market for identical assets; 2) Level 2 inputs are significant other observable inputs; and 3) Level 3 inputs are significant unobservable inputs.

Money markets, and external investment pools such as the California Local Agency Investment Fund and the San Mateo County Investment Pool, are exempt from the fair value hierarchy under GASB No. 72, Fair Value Measurement and Application.

H. Local Agency Investment Fund
The City is a participant in the Local Agency Investment Fund (“LAIF”) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City reports its investment in LAIF at the fair value amount provided by LAIF, using a fair value factor of

0.984828499 as of June 30, 2023. The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF's investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain State funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, United States Treasury Notes and Bills, and corporations. On June 30, 2023, LAIF’s investments in structured notes and asset-backed securities were 2.78% of the total LAIF balance as compared to 1.88% in the prior year.
61 8.e
November 27, 2023

Packet Pg. 121

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 2 - CASH AND INVESTMENTS, CONTINUED
I. San Mateo County Investment Fund
The City is a voluntary participant in the San Mateo County Investment Fund (“SMCIF”) that is regulated by California Government Code Section 53684 under the oversight of the Treasurer of the County of San Mateo. The balance available for withdrawal is based on the accounting records maintained by SMCIF, which are recorded on an amortized cost basis. Included in SMCIF's investment portfolio are U.S.

Treasury Notes, obligations issued by agencies of the U.S. Government, corporate botes, commercial paper, asset-backed securities and floating rate securities issued by federal agencies, government- sponsored enterprises, and corporations. The City reports its investments in SMCIF at the fair value amounts provided by SMCIF, using a fair value factor of 0.9715 as of June 30, 2023.

K. Custodial Credit Risk
Custodial credit risk for deposits is the risk that the Ci ty will not be able to recover its deposits or will not be able to recover collateral securities in the possession of an outside party if a depository institution fails.

The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit exposure to custodial credit risk for deposits or investments, other than the following provision applicable to deposits.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City’s name.

The fair value of pledged securities must equal at least 110% of the City’s cash deposits. State law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The City, however, has not waived the collateralization requirements.

NOTE 3 - LOANS RECEIVABLE
The City’s loans receivable balances as of June 30, 2023 is summarized below:

Loan Program/Description Total
Down Payment Assistance - original program 84,174$
Down Payment Assistance - revised program 279,893
Total Down Payment Assistance Loan Program Receivable 364,067$ 817 Walnut Street 7,882,255$
1232 Cherry Street 389,330
1244 Cherry Street 100,000
Human Investment Project Inc. 293,962
Laureola Oaks 1,402,897
Total Notes and Loans Receivable 10,068,444$
62 8.e
November 27, 2023

Packet Pg. 122

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 3 - LOANS RECEIVABLE, CONTINUED
A. Down Payment Assistance Loan (“DAL” Program)
The City’s former Redevelopment Agency previously offered first-time home buyers, who qualified as having low and moderate income, loans for use as a down payment on the purchase of a home. The loans bore an interest rate of 3% and were secured by second deeds of trust on the underlying property. No payments were due until five years after the date of purchase, at which time the buyer had the option of converting the loan into shared equity in the property or extending the loan for an additional 10 years with monthly payments and a balloon payment for the unpaid balance at the end of the 10-year term. On February 1, 2012, this receivable was transferred to the City when it took over the housing function of the Redevelopment Agency upon dissolution. On June 30, 2023, the City has recorded a receivable totaling $84,174 for loans given out to three buyers.

On April 27, 2009, the City Council approved revisions to the terms of the program DAL for the first-time home buyer program. Payments are deferred for the term of the loan. Homeowners of units other than a Below Market Rate unit and/or any unit subject to a resale restriction agreement are required to pay shared appreciation in addition to the repayment of principal and accrued interest at the time the DAL Program loan repayment is due. Interest rates and loan terms remained unchanged. On June 30, 2023, the City had recorded a receivable totaling $279,893 for loans given out to four buyers, consisting of $192,000 in principal and $87,893 in accrued interest. The DAL program was discontinued after the dissolution of RDA in 2012.

B. Disposition, Development and Loan Agreement (817 Walnut Street) On June 19, 2020, the City and Walnut Street, L.P. entered a Disposition, Development and Loan Agreement (“DDLA”). The purpose of the DDLA is to effectuate the Redevelopment Plan for the San Carlos Redevelopment Project by developing housing affordable to extremely low-income households.

Although Assembly Bill x1 26 dissolved the San Carlos Redevelopment Agency (“Former Agency”) effective February 1, 2012, the City elected to retain the authority to perform housing functions previously performed by the Former Agency as permitted by Section 34176.

The development includes 24 units of multi-family rental housing (the "improvement"), of which 6 units are restricted to 30% of the Area Median Income (AMI), 6 units are restricted to 40% of AMI, 6 units are restricted to 50% of AMI, and 5 units are restricted to 60% of AMI for a 75-year term. The City shall convey the leasehold interest in the Property under the terms of the Lease to the Tenant for one dollar ($1) per annum for a 75-year period. In addition, the land will remain with the City at the end of the lease term. The improvements were financed through a City loan in the approximate amount of $7.3 million and other public financing and private lender construction and permanent financing. The City loan accrues interest at 4% annually, and is to be repaid annually from residual receipts, if any. The loan will be payable in full at the end of the 55-year loan term. At June 30, 2023, the total outstanding principal and interest was $7,882,255.
63 8.e
November 27, 2023

Packet Pg. 123

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 3 - LOANS RECEIVABLE, CONTINUED
C. Predevelopment Loan Agreement (1232 Cherry Street)
On August 2, 2021, the City and Cherry Street Commons, L.P. (“Borrower”) entered a Predevelopment Loan Agreement. The City is the owner of the real property located at 1232 Cherry Street in San Carlos.

The City selected the Borrower to construct a residential project on the Property that consists of at least 25 dwelling units together with parking and related improvements. The City agreed to provide a loan to Borrower with a total principal amount not to exceed $1,000,000. The unpaid principal balance accrues simple interest at the rate of 3% per annum. Principal and interest shall be due and payable following termination of the agreement unless forgiven in accordance with Section 1.3.3 or rolled over and assumed in accordance with Section 1.5 of the agreement. At June 30, 2023, the total outstanding principal and interest was $389,330.

D. Housing Association for the Needy and Dispossessed Loan (1244 Cherry Street) On May 31, 1995, the City and Cherry Street Commons, L.P. (“Borrower”) entered a Housing Association for the Needy and Dispossessed Loan Agreement with a deed of trust to a trustee, Old Republic Title Company. The term is 40 years from the date of execution of this note. The City provided the Borrower a promissory note of $100,000. The outstanding principal shall not be required to be paid for the first 30 years of the term of this loan and commence a repay date on June 1, 2025 with no interest. The note is due and payable in full on or before June 1, 2035. On June 1, 2025, the Borrower will start a monthly payment of $833.33.

E. Human Investment Project Inc. Agreement
On June 28, 1994, the City and the County of San Mateo (“Borrower”) entered a Human Investment Project Agreement. The City is the owner of the real property located at 717 Cedar Street in San Carlos, The City selected the Borrower to construct a residential project on the property that provides for disposition and development of a shared housing facility for low income families. The City agreed to provide a loan to the Borrower with a total principal amount of $300,000. The total cost of the project was $541,010. The Project was financed by the Agency, (55.45%, $300,000) County, (24.42%, $132,110) and HIP. (20.13%, $108,900) At June 30, 2023, the total outstanding principal was $293,962.

F. Laureola Oaks Purchase and Sale Agreement
On November 30, 1992, the City (“Seller”) and the Laureola Oaks Associates (“Buyer”) entered a Purchase and Sale Agreement for 608 East San Carlos Avenue. The purchase price for the real property was $200,000 dollars and paid through Escrow. The Seller provided the Buyer a loan of $175,000 (unpaid principal). The unpaid principal bears interest which is compounded annually with a 7% rate. The principal and interest will be due and payable in full on March 9, 2049. At June 30, 2023, the total outstanding principal and interest was $1,402,897.
64 8.e
November 27, 2023

Packet Pg. 124

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 4 - INTERFUND TRANSACTIONS
A. Transfers Between Funds
The purpose of most transfers is to move resources from one fund to another. Less often, a transfer may be made to open or close a fund. Transfers between funds during the fiscal year ended June 30, 2023 were as follows:

NOTE 5 - CAPITAL ASSETS
At June 30, 2023 capital assets of Governmental Activities as of June 30, 2023 consisted of the following:
65 8.e
November 27, 2023

Packet Pg. 125

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 5 - CAPITAL ASSETS, CONTINUED
A. Depreciation
Depreciation expense was charged to governmental functions based on the use of the related assets.

The amounts allocated to each function or program are as follows:

The intangible right-to-use lease asset’s related leases payable is further discussed in Note 7 - Long-Term Liabilities.

C. Business Activities
Depreciation expense of $1,139,947 was charged to the Sewer Enterprise Fund in the year ended June 30, 2023.

Business-type Activ ities
Balance at
June 30, 2022 Additions Retirements
Balance at
June 30, 2023
Capital assets not being depreciated:

Land 153,734 $ - $ - $ 153,734$ Total non-depreciable assets 153,734 - - 153,734 Capital assets being depreciated
Equipment 2,010,503 5,723 - 2,016,226 Sewer network system 43,549,325 242,836 - 43,792,161 Total capital assets being depreciated 45,559,828 248,559 - 45,808,387 Less accumulated depreciation for
Equipment (1,777,494) (64,652) - (1,842,146) Sewer network system (11,195,407) (1,075,295) - (12,270,702) Total accumulated depreciation (12,972,901) (1,139,947) - (14,112,848) Net capital assets being depreciated 32,586,927 (891,388) - 31,695,539 Capital assets, net 32,740,661$ (891,388)$ -$ 31,849,273$ 66 8.e
November 27, 2023

Packet Pg. 126

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 6 - PROPERTY HELD FOR RESALE
Property held for resale is stated at the lower of historical cost or net realizable value (equal to agreed- upon sales price if a disposition and development agreement has been reached with a developer).

The City has three properties held for resale. The properties are reported in governmental activities in the Statement of Net Position as Property Held for Resale. The carrying value at June 30, 2023 shown on the table below.

NOTE 7 - LONG TERM LIABILITIES
The City's debt issues and transactions are summarized below and discussed in detail thereafter.

A. 2015 Refunding General Obligation Bonds
The 2015 Refunding Bonds were issued under a resolution adopted by the City Council on February 9, 2015 to refinance the outstanding City of San Carlos 2005 General Obligation Refunding Bonds, which were issued on December 20, 2005 in the aggregate principal amount of $8,115,000. The 2005 General Obligation Bonds were refunded with the issuance of the 2015 General Obligation (“GO”) Bonds. The original proceeds from the bonds were used for the construction of the City’s public library.

The 2015 Refunding Bonds are general obligations of the City payable solely from ad valorem property taxes levied by the City and collected by the County. The total principal and interest remaining to be paid on the bonds is $1,895,000 and $78,450 respectively. Principal and interest paid for the current fiscal year and total ad valorem property tax revenues were $457,050 and $443,503 respectively. 67 8.e
November 27, 2023

Packet Pg. 127

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 7 - LONG TERM LIABILITIES, CONTINUED
A. 2015 Refunding General Obligation Bonds, continued
The total cash flow savings including the application of the excess tax revenues of $1,483,637 were $2,498,038 and the net present value of the savings resulted in an economic gain of $777,443. The refunding resulted in a $19 savings for the average residential homeowner, which reduced the GO Bond tax from $47 to $28. Estimated savings will change over time with the growth in the City’s assessed value, but is estimated to average $17 for the 11 years that a 2015 GO Bond tax rate is required. Total estimated savings to the average residential homeowner is $182. The tax levy rate for fiscal year 2022-23 included the application of excess fund balance of $144,500. The residential homeowner paid on average approximately $25 per residential property. In celebrat ion of the City's Centenni al in 2025, the City is planning to pay the bond off one year early using the excess fund balance in the Library Tenant Fund.

Interest on Refunding GO Bonds accrues from the date of delivery and is payable semi-annually on February 1 and August 1, commencing August 1, 2015, and ranging from 3% to 2%. Principal payments are due annually on August 1.

The bond covenants contain events of default that require the revenue of the City to be applied by the Trustee as specified in the terms of the agreement if any of the following conditions occur: default on debt service payments; the failure of the City to observe or perform the conditions, covenants, or agreement terms of the debt; bankruptcy filing by the City; or if any court of competent jurisdiction shall assume custody or control of the City. No such events occurred during the fiscal year ending June 30, 2023.

Annual debt service requirements for the 2015 Refunding GO Bonds are shown below.

B. Leases Payable
The City entered into a lease agreement with Brittan Corners Shopping Center, LLC dated 10/15/2018 for Billboard 3 located on 1119 Industrial Road, San Carlos from 9/1/2019 through 8/31/2049. An initial lease liability was recorded in the amount of $2,472,634 as of July 1, 2021. As of June 30, 2023, the value of the lease liability was $2,321,803. The City is required to make monthly payments in amounts of $12,500 that shall be increased by 12.5% at the end of every 5-year period. The lease has an interest rate of 3%.

The intangible right-to-use lease asset is amortized over the life of the lease. As of June 30, 2023, the value of the right-to-use lease asset and accumulated amortization was $2,472,634 and $260,278, respectively.

For the
Year Ending
June 30 Principal Interest Total
2024 435,000$ 33,550 $ 468,550 $
2025 460,000 24,600 484,600
2026 485,000 15,150 500,150
2027 515,000 5,150 520,150
1,895,000$ 78,450 $ 1,973,450$
68 8.e
November 27, 2023

Packet Pg. 128

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 7 - LONG TERM LIABILITIES, CONTINUED
B. Leases Payable, continued
The City entered into a lease agreement with K & E Investments, LLC dated 9/10/2018 for Billboard 2 located on 815 American Street, San Carlos from 1/1/2019 through 12/31/2038. An initial lease liability was recorded in the amount of $1,616,987 as of July 1, 2021. As of June 30, 2023, the value of the lease liability was $1,514,424. The City is required to make monthly payments in amounts of $8,333 that shall be increased by 12.5% at the end of every 5-year period. The lease has an interest rate of 3%. The intangible right-to-use lease asset is amortized over the life of the lease. As of June 30, 2023, the value of the right-to-use lease asset and accumulated amortization was $1,616,987 and $179,666, respectively.

The terms of the leases are summarized below:

The transactions details for the leases are summarized below:

Lessor Property Address
Original
Lease Date
Lease
Ending Date
Term
Duration
(Years)
Remaining
Lease Term
(Years)
Extension
Years
K & E Investments, LLC 815 American Street 1/1/2019 12/31/2038 20 15 10 Brittan Corners Shopping Center, LLC 1119 Industrial Road 9/1/2019 8/31/2039 20 16 10 (Continued below)
Lessor
Expiration Date
Including Options Interest Exp
Principal
Expenditure
Monthly
Payment
Lease
Asset
Lease
Liability
K & E Investments, LLC 12/31/2048 50,105$ 49,895$ 8,333 $ 1,437,321$ 1,514,424 $ Brittan Corners Shopping Center, LLC 8/31/2049 76,754 73,246 12,500 2,212,356 2,321,803 126,859$ 123,141$ 20,833$ 3,649,677$ 3,836,227 $ 69 8.e
November 27, 2023

Packet Pg. 129

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 7 - LONG TERM LIABILITIES, CONTINUED
B. Leases Payable, continued
The future principal and interest lease payments as of June 30 were as follows:

NOTE 8 – FUND BALANCES
A. Fund Balance Commitments
The City has the following committed fund balances shown on the governmental balance sheet:

Strategic Property Acquisitions: General Fund committed fund balance for Strategic Property Acquisitions accumulates funds from the proceeds of sales of City properties, as directed by the City Manager or City Council.

Once established, appropriations from the Strategic Property Acquisitions Reserve fund balance commitment can only be made by formal action of the City Council. Appropriations and access to these funds are reserved for funding strategic property acquisitions by the City. The balance as of June 30, 2023 was $7,191,795.
70 8.e
November 27, 2023

Packet Pg. 130

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 8 – FUND BALANCES, CONTINUED
B. Fund Balances
Detailed classifications of the City’s fund balances as of June 30, 2023 are below. 71 8.e
November 27, 2023

Packet Pg. 131

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 8 – FUND BALANCES, CONTINUED
C. General Fund Policies
Economic Uncertainties: The General Fund tracks a fund balance reserve for Economic Uncertainties equal to a minimum of 12.5% of the General Fund expenditures with a target of increasing to 20% of General Fund expenditures.

Appropriations from the Economic Uncertainties fund balance can only be made by formal action of the City Council. Generally, appropriations and access to these funds will be reserved for emergency situations. Examples of such emergencies include, but are not limited to: catastrophic disaster (declared by Governor); budgeted revenue taken by another government entity; or a more than 5% drop in projected revenue to the General Fund. The balance as of June 30, 2023 was $9,124,607, or 18.5% of total General Fund operating expenditures.

D. Net Investment in Capital Assets
The balances related to Net Investment in Capital Assets were comprised of the following as of June 30, 2023:

NOTE 9 – LEASES
A. Policies
A lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. The City recognizes lease receivable or liabilities with an initial, individual value of $500,000 or more, based on the future lease payments remaining at the start of the lease.

Lessor
The City is a lessor for noncancellable leases of buildings and facilities. The City recognizes a lease receivable and a deferred inflow of resources in the government wide and fund financial statements.

At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.
72 8.e
November 27, 2023

Packet Pg. 132

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 9 - LEASES, CONTINUED
A. Policies, continued
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts as follows:
¾ The City uses bond interest rate as the discount rate for leases. ¾ The lease term includes the noncancellable period of the lease. ¾ Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

Lessee
The City is a lessee for two billboards located on 815 American Street and 1119 Industrial Road, San Carlos. City recognizes a lease liability and an intangible right-to-use lease asset in the government-wide financial statements. City recorded lease liabilities with an initial value of $4,089,621.

At the commencement of a lease, City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life.

Key estimates and judgments related to leases include how City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments as follows:
¾ The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, City generally uses bond interest rate as the discount rate for leases.
¾ The lease term includes the noncancellable period of the lease. ¾ Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that City is reasonably certain to exercise.

The City monitors changes in circumstances that wo uld require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported with other capital assets and lease liabilities are reported with long-term debt on the Statement of Net Position.
73 8.e
November 27, 2023

Packet Pg. 133

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 9 - LEASES, CONTINUED
B. Leases Receivable (City as Lessor)
The terms and balances related to leases receivable and deferred inflows of resources recorded in the General Fund as of June 30, 2023 were:

The future principal and interest lease receivables as of June 30, were as follows:

Lessee
Interest
Revenue
Lease
Revenue
Monthly Lease
Receipts as of
June 30, 2023
Lease
Receivable
Balance at June
30, 2023
Deferred Inflow of
Resources at
June 30, 2023
Duvall Properties 42,504$ 61,543$ 6,543$ 1,288,704$ 1,230,853$ San Carlos Properties, LLC 22,887 33,137 3,523 693,916 662,745 Brittan Corners LLC 60,475 102,660 10,006 1,827,181 1,745,227 GRM FISC, LLC 66,742 107,237 10,556 2,020,983 1,930,258 San Carlos Group I, LLC 232,567 240,659 22,569 7,135,251 6,738,437 Clear Channel Outdoor 146,398 245,138 21,481 4,445,376 4,167,337 Clear Channel Outdoor 150,651 269,274 25,000 4,539,885 4,308,383 Outfront Media 179,094 303,658 29,167 5,417,561 5,162,182 901,318$ 1,363,306$ 128,845$ 27,368,857$ 25,945,422$ For the Year
Ended June 30, Principal Interest Total
2024 701,069$ 879,774$ 1,580,843$
2025 806,187 855,409 1,661,596
2026 871,292 828,081 1,699,373
2027 923,192 798,977 1,722,169
2028 985,717 768,072 1,753,789
2029 - 2033 6,328,764 3,276,533 9,605,297
2034 - 2038 8,924,957 2,048,056 10,973,013
2039 - 2043 4,329,738 810,510 5,140,248
2044 - 2048 2,263,913 397,785 2,661,698
2049 - 2051 1,234,028 46,052 1,280,080
27,368,857$ 10,709,249 $ 38,078,106 $
74 8.e
November 27, 2023

Packet Pg. 134

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 9 - LEASES, CONTINUED
C. Leases Payable and Right-to-use Leased Equipment
See more details for Leases payable in Note 7 and Right-to-use Leased Equipment in Note 5.

NOTE 10 - NET PENSION LIABILITY
Summary of Pension Balances
Below is a summary of the deferred outflows of resources, net pension liabilities, and deferred inflows of resources for the pension plans at the City as of June 30, 2023:

For the year ended June 30, 2023, the total pension expense for all plans amounted to $4,944,326.

A. California Public Employees’ Retirement System (“CalPERS”) Plan Description of Plan
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost- Sharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS). The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous risk pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors 6 rate plans (4 miscellaneous and 2 safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions, and membership information that can be found on the CalPERS website: www.calpers.ca.gov. 75 8.e
November 27, 2023

Packet Pg. 135

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10 - NET PENSION LIABILITY, CONTINUED
A. California Public Employees’ Retirement System (“CalPERS”), continued Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments, and death benefits to plan members who must be public employees, and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at an age as early as 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit; the 1957 Survivor Benefit; or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

PEPRA requires new benefits and member contributions for new members as defined by PEPRA that are hired after January 1, 2013. These PEPRA member s in pooled plans are reflected in the new Miscellaneous and Safety risk pools created by the CalPERS Board in response to the passage of PEPRA, beginning with the June 30, 2013 risk-pool valuations. Therefore, pursuant to PEPRA, the Miscellaneous “Classic” plan is closed to new entrants as of January 1, 2013.

The provisions and benefits of each plan in effect at June 30, 2023 are summarized as follows:
76 8.e
November 27, 2023

Packet Pg. 136

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10 - NET PENSION LIABILITY, CONTINUED
A. California Public Employees’ Retirement System (“CalPERS”), continued Benefits Provided, continued
Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded accrued liability (“UAL”). The UAL payments for the fiscal year ended June 30, 2023 are shown in the table above.

Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for all Miscellaneous Plans and Safety Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

The City’s contributions to the Plan for the measurement period ended June 30, 2022 were:

Tier 1 PEPRA
Hire date
On or after
October 23,
2011
On or after
January 1,
2013
Benefit formula 2% @50 2.7% @57
Benefit v esting schedule 5 years serv ice 5 years serv ice Benefit payments Monthly for life Monthly for life
Benefit amount calculated
3 years average 3 years average
Retirement age 50 and up 50 and up
Monthly benefits, as a % of
eligible compensation 2.0% to 2.7% 2.0% to 2.7%
Required employee contribution rates 9% 13%
Required employer contribution rates 18.17% 12.78%
Required UAL Payment 2,196,797 $ - $
Safety
77 8.e
November 27, 2023

Packet Pg. 137

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10 - NET PENSION LIABILITY, CONTINUED
A. California Public Employees’ Retirement System (“CalPERS”), continued Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2023, the City reported net pension liabilities for its proportionate share of the net pension liability of the Plan as follows:

The City’s net pension liability for the Plan is measured as the proportionate share of the total net pension liability of the Plan. The net pension liability of each of the Plan is measured as of June 30, 2022, and the total pension liability for the Plan used to calculate the net pension liability was determined by actuarial valuations as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The City’s proportion of the net pension liability was based on the City’s plan liability and asset-related information where available, and proportional allocations of individual plan amounts as of the valuation date where not available.

The City’s proportionate share of the net pension liability for the Plan as of June 30, 2021 and 2022 was as follows:
78 8.e
November 27, 2023

Packet Pg. 138

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10 - NET PENSION LIABILITY, CONTINUED
A. California Public Employees’ Retirement System (“CalPERS”), continued Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions, continued
For the year ended June 30, 2023, the City recognized a pension expense of $3,158,349 for the Plan. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

In the table above, the $4,315,040 reported as deferred outflows of resources related to contributions subsequent to the measurement date of June 30, 2022 but before the end of the City’s reporting period ended June 30, 2023, will be recognized as a reduction of the net pension liabilities in the subsequent fiscal year 2024 rather than in the current fiscal year 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
79 8.e
November 27, 2023

Packet Pg. 139

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10 - NET PENSION LIABILITY, CONTINUED
A. California Public Employees’ Retirement System (“CalPERS”), continued Actuarial Assumptions
The total pension liabilities in the actuarial valuations were determined using the following actuarial assumptions:

Discount Rate
The discount rate used to measure the total pension liability as of the measurement date of June 30, 2022 for the Plan was 6.90%, which differs from the discount rate used as of the measurement date of June 30, 2021, of 7.15%. The projection of cash flows used to determine the discount rate for the Plan assumed that contributions from plan will be made at the cu rrent member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. A detailed report testing these projections can be obtained from the CalPERS website.

In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated and, combined with risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return.
80 8.e
November 27, 2023

Packet Pg. 140

Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.90%) or 1 percentage point higher (7.90%) than the current rate:

Payable to the Pension Plan
At June 30, 2023 the City reported a payable of $73,767 for outstanding amount of contributions to the pension plan required for the year ended June 30, 2023. 81 8.e
November 27, 2023

Packet Pg. 141

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10 - NET PENSION LIABILITY, CONTINUED
B. Public Agency Retirement Services (“PARS”) Longevity Recognition Plan Plan Description and Benefits
The City sponsors an agent multiple-employer Longevity Recognition Defined Benefit Plan (Longevity Plan) for its retirees. All full-time employees hired before January 1, 2009 are eligible for a longevity recognition benefit if they retire from the City with a CalPERS pension and with at least 10 years of City service. All AFSCME (formerly known as Clerical and Mid-Management) and Teamsters employees hired on or after January 1, 2009 and before the following exclusion dates depending on bargaining group are eligible for a longevity recognition benefit if they retire from the City with a CalPERS pension and with at least 15 years of City service.

Employees hired by the City before January 1, 2009 receive a monthly payment equal to the Internal Revenue Code (IRC) Section 125 Plan benefit for active Miscellaneous employees and the former fire service employees with single coverage ($1,011.51 per month for 2023) subject to future annual increases. The cap for retirees from the former Police Department has been $718.11 since 2011 and is not expected to be increased.

Eligible employees hired by the City after January 1, 2009 and before the exclusion date for their respective bargaining groups will receive a monthly payment of $350 per month with no future increases upon retirement.

The longevity recognition benefit is payable for the retiree’s lifetime. No continuation of longevity benefits are payable to surviving spouses or dependents. No employees hired after the above exclusion dates are eligible for longevity benefits.

Participants Covered
As of the valuation date, June 30, 2021, the number of participants was as follows: 25 active and 48 retirees.

Contributions
During the measurement period ended June 30, 2022, employer contributions to the plan totaled $620,000.

Net Pension Liability
The net pension liability for the Longevity Plan is measured as the total pension liability less the Longevity Plan’s fiduciary net position. A summary of the actuarial assumptions and methods used to determine the net pension liability is shown below.

Bargaining Group Exclusion Date
AFSCME (formerly known as Mid-Management) December 13, 2010 AFSCME (formerly known as Clerical) February 28, 2011
Teamsters March 28, 2011
82 8.e
November 27, 2023

Packet Pg. 142

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10 - NET PENSION LIABILITY, CONTINUED
B. Public Agency Retirement Services (“PARS”) Longevity Recognition Plan, continued Actuarial Assumptions and Discount Rate
Changes in the Net Pension Liability
The changes in the measurement period ended June 30, 2022 were as follows:

Valuation Date June 30, 2021
Measurement Date June 30, 2022
Funding Method Entry-Age normal cost, level percent of pay Asset Valuation Method Market value of assets
Discount Rate 6.0%
Inflation Rate 2.50% per year
Salary Increase 3.0% per year, used only to allocate the cost of benefits between service years
Inv estment Rate of Return 6.0%
Demographic Assumptions Rates of retirement, disability and other terminations are based on the CalPERS 2017 experience study using data from 1997 to 2015, except for a different basis used to project future mortality improvements
Mortality Improvements MacLeod Watts Scale 2022 applied generationally from 2015 Actuarial Methods and Assumptions
83 8.e
November 27, 2023

Packet Pg. 143

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10 - NET PENSION LIABILITY, CONTINUED
B. Public Agency Retirement Services (“PARS”) Longevity Recognition Plan, continued Sensitivity of the Net Pension Liability to changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability for the Longevity Plan, calculated using the discount rate for the Longevity Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calc ulated using a discount rate that is 1 percentage point lower (5.0%) or 1 percentage point higher (7.0%) than the current rate:

Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately issued PARS financial reports.

Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pension For the year ended June 30, 2023, the City recognized pension expense of $1,785,977 for the Longevity Plan. At June 30, 2023, the City reported the following deferred inflows and outflows of resources related to the Longevity Plan:

The $668,000 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
84 8.e
November 27, 2023

Packet Pg. 144

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 11 - OTHER POST-EMPLOYMENT BENEFITS
A. Provisions and Benefits
OPEB Healthcare: During fiscal year 2009, the City joined the California Employers' Retiree Benefit Trust (“CERBT”), an agent multiple-employer plan administered by CalPERS, consisting of an aggregation of single-employer plans. City Council authorized a deposit of $1,575,000 with CERBT on October 10, 2008 to begin funding its Other Post-Employment Benefits (“OPEB”) liability.

By Council resolution and through agreements with its labor units, the City provides certain health care benefits for retired employees (spouse and dependents are not included) under Public Employees’ Medical Healthcare Act (“PEMHCA”). A summary of eligibility and retiree contribution requirements are described below.

Employees are eligible for retiree health benefits if they retire from the City with a CalPERS pension.

For retirees who retired on or before December 31, 2008, the City will reimburse the retiree only premium, up to the active employee single cap. The cap amount for miscellaneous is $1,011.51 per month for 2023.

The cap amount for retirees from the former Police Department is $718.11 and is not expected to be increased.

The City will continue to pay the CalPERS minimum contribution for surviving spouses of retirees as long as they remain enrolled in a health plan sponsored by CalPERS (PEMHCA).

For employees retiring on or after January 1, 2009 from the City of San Carlos who choose to enroll in a CalPERS retiree health plan, the City contributes the minimum monthly premium amount specified by CalPERS towards the cost of CalPERS (PEMHCA) medical premiums. The minimum is $151 per month for calendar year 2023.

B. Employees Covered
Membership in the plan consisted of the following at the June 30, 2022 measurement date:
85 8.e
November 27, 2023

Packet Pg. 145

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 11 - OTHER POST-EMPLOYMENT BENEFITS, CONTINUED
C. Net OPEB Liability
Actuarial Methods and Assumptions: The City’s net OPEB liability was measured as of June 30, 2022 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2021 that was rolled forward to determine the total OPEB liability, based on the following actuarial methods and assumptions:

Discount Rate: The discount rate used to measure the Total OPEB Liability was 6.05%.

Changes in Net OPEB Liability: The changes in the Net OPEB Liability are as follows:

Valuation Date June 30, 2021
Measurement Date June 30, 2022
Funding Method Entry age normal cost, level percent pay Asset Valuation Method Market value of assets
Long Term Return on Assets 6.05%
Salary Increase

3.0% per year, used only to allocate the cost of benefits between service years
Inflation Rate 2.5% per year
Healthcare Cost Trend Rates 5.8% in 2023, decreasing until ultimate rate of 3.9% in 2076 Mortality Improvement Macleod Watts Scale 2022 applied generationally from 2015 Actuarial Methods & Assumptions
Total OPEB
Liability
(a)
Plan Fiduciary
Net
Position
(b)
Net OPEB
Liability/(Asset)
(c) = (a) - (b)
Balance at measurement date 6/30/2021 4,755,837 $ 4,041,128 $ 714,709 $ Changes recognized for the measurement period:

Service cost 103,834 - 103,834 Interest on the total OPEB liability 282,490 - 282,490 Inv estment income - (534,670) 534,670 Employer contributions - 400,799 (400,799) Administrative expenses - (1,011) 1,011 Other expenses - - - Difference between expected and actual experience - - - Changes of assumptions - - - Benefit payments (380,832) (380,832) - Net changes 5,492 (515,714) 521,206 Balance at measurement date 6/30/2022 4,761,329$ 3,525,414$ 1,235,915$ 86 8.e
November 27, 2023

Packet Pg. 146

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 11 - OTHER POST-EMPLOYMENT BENEFITS, CONTINUED
D. Sensitivity of the Net OPEB Liability
The following presents the Net OPEB Liability, as well as what the Net OPEB Liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.05%) or 1 percentage point higher (7.05%) than the current discount rate:

The following presents the Net OPEB Liability, as well as what the Net OPEB Liability would be if it were calculated using a healthcare cost trend rate that is 1 percentage point lower or 1 percentage point higher than the current healthcare cost trend rate:

E. OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2023, the City recognized OPEB expense of $71,786. As of the fiscal year ended June 30, 2023, the City reported deferred outflows and inflows of resources related to OPEB from the following sources:
87 8.e
November 27, 2023

Packet Pg. 147

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 11 - OTHER POST-EMPLOYMENT BENEFITS, CONTINUED
E. OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB, continued $390,000 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the OPEB liability in the year ended June 30, 2024. Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as future OPEB expense as follows:

The governmental activities net OPEB liability is liquidated primarily by the General Fund.

NOTE 12 - LIABILITY COVERAGE
A. Liability Coverage
The City participates in the Pooled Liability Assurance Network Joint Powers Authority (“PLAN JPA”), which consists of 28 member cities in the San Francisco bay area. Members of the PLAN JPA collectively share the risk of self-insured losses and purchase a broad range of risk management services including, but not limited to, program administration, accounting and finance, claims administration, risk control, loss prevention, actuarial services, training and educatio n, and legal services to support the shared risk programs. PLAN JPA provides General Liability, Auto Liability, and Errors and Omissions coverage in excess of the City’s retained limit, or self-insured retention (“SIR”). PLAN JPA self-insures up to $1,000,000 of general and automobile liability coverage per occurrence (minus the City’s $100,000 self- insured retention) and $34,000,000 in excess liability coverage per occurrence through an additional self- insurance joint powers authority (California Affiliated Risk Management Authority, “CARMA”) and through the purchase of commercial excess insurance, for a total of $35,000,000 per occurrence. Financial statements may be obtained from PLAN JPA, 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833.

B. Workers' Compensation Coverage
Workers’ Compensation is provided to the City’s employees from a self-insurance pool arranged under a Joint Powers Agreement. Cities Group acts as administrator and claim adjuster. The pool consists of six (6) members, and each member of the Cities Group pays a premium. Workers’ Compensation claims in excess of $1,000,000 per claim for miscellaneous employees and for safety employees $1,500,000 are insured by Safety National Casualty Corporation under a reinsurance policy owned by the Group.

Financial statements may be obtained from The Cities Group, P.O. Box 111, Burlingame, CA 94011-0111. 88 8.e
November 27, 2023

Packet Pg. 148

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 12 - LIABILITY COVERAGE, CONTINUED
C. Liability for Uninsured Claims
The City's liability for uninsured claims at June 30, 2023 was estimated by management based on the PLAN JPA’s claims experience and recorded in the Liability Insurance Internal Service Fund. For the years ended June 30, 2023 and 2022, the amount of settlements did not exceed insurance coverage.

The City's liability for uninsured claims is limited to workers' compensation and general liability claims, as discussed above, and was estimated by management based on prior years’ claims experience as follows for the years ended:

NOTE 13 - JOINT VENTURES
Joint Power Authorities
The City participates in joint ventures through formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these Joint Power Authorities (“JPAs”) exercise full powers and authorities within the scope of the related JPA agreements, including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts, and the right to sue and be sued. Each JPA is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective joint venture, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on that board. Obligations and liabilities of these joint ventures are not the City's responsibility, and the City does not have an equity interest in the assets of each joint venture except upon dissolution of the joint venture.

A. Belmont-San Carlos Fire Department
The South County Fire Authority JPA was formed in 1979 between the Cities of San Carlos and Belmont on an equal basis to provide more efficient fire protection services for the two cities. Any assets used by the Fire Authority but owned by the member agencies prior to the creation of the Fire Authority remain the property of the members. Each member contributes its pro rata share of operating costs to the Fire Authority.
89 8.e
November 27, 2023

Packet Pg. 149

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 13 - JOINT VENTURES, CONTINUED
A. Belmont-San Carlos Fire Department
On April 12, 2010, the City Council adopted a resolution authorizing the City Manager to send notice to the Belmont Fire Protection District of the City's intent to dissolve the JPA establishing the Belmont-San Carlos Fire Department. The service termination of the Belmont-San Carlos Fire Department took effect on October 1, 2011.

As a result of the termination of service with the Belmont-San Carlos Fire Department, the City is required to make an annual contribution for: other post-employment benefits for retirees who have earned lifetime medical coverage; unfunded liabilities of the safety and miscellaneous retirement plans with CalPERS; outstanding workers’ compensation claims from past employees; and liability claims or other obligations of the former Fire Department. The City’s contribution during the year ended June 30, 2023 was $2,009,131. It is anticipated that the outstanding pension obligations with CalPERS will be paid off on 6/30/2033.

B. Silicon Valley Clean Water (“SVCW”)
The Silicon Valley Clean Water (formerly the South Bayside System Authority) JPA was formed in 1975 between the cities of San Carlos, Belmont, Redwood City, and the West Bay Sanitation District to operate a wastewater treatment facility. The cost of operating and maintaining the facility is divided in proportion to the volume of sewage entering from each member entity. During the year ended June 30, 2023, the City contributed $4,645,496 toward the cost of operating and maintaining the facility and paid debt principal and interest of $3,268,368 that included the State revolving fund loan and the financing agreements to finance the construction and rehabilitation of SVCW’s wastewater system. The City recorded an investment in joint venture of $7,467,296 for the fiscal year ended June 30, 2023 using the most recently published financial statements of SVCW for the period ended June 30, 2022.

The condensed audited financial information of the JPA as of June 30, 2022 is as follows:

Total Assets 928,143,063$
Total Deferred Outflows 26,635,391
Total Liability (821,218,780)
Total Deferred Inflows (10,259,797)
Total Net Position 123,299,877$
Total Operating Revenues 53,531,636$
Total Operating Expenses (39,615,517)
Total Operating Income (Loss) 13,916,119
Other Income (Loss) (16,899,043)
Net Income (2,982,924)$
Cumulative Agency Balances:

Belmont 46,289,694$
San Carlos 7,467,296
Redwood City 41,112,179
West Bay Sanitation District 28,430,708
Total Net Position 123,299,877$
90 8.e
November 27, 2023

Packet Pg. 150

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 13 - JOINT VENTURES, CONTINUED
B. Silicon Valley Clean Water (“SVCW”), continued
The City’s investment in SVCW was adjusted to reflect a net decrease in the investment of $1.2 million.

Every year, the City adjusts the investment based on the City’s proportion of financial activity at SVCW.

The Authority has issued bonds and entered into other loan agreements to fund the capital projects to replace the aged wastewater treatment plan and conveyance upgrade system. Each member has entered into financing agreements and is obligated to pay its allocated share of debts. SVCW financing agreements with the City for debts issued by SVCW are summarized in the table below:

Financial statements may be obtained by mailing a request to Silicon Valley Clean Water, 1400 Radio Road, Redwood City, CA 94065.

C. City/County Association of Governments of San Mateo County (“C/CAG”) The City/County Association of Governments of San Mateo County JPA was formed in 1990 between the various cities in San Mateo County to prepare, adopt, monitor, and enforce State mandated plans for the management of traffic congestion, integrated solid waste, airport land use, and hazardous waste. The City's contribution to C/CAG was $102,857 for the year ended June 30, 2023. The City provided financial services to C/CAG and received $100,500 for the services during the fiscal year.

Financial statements may be obtained by mailing a request to the City of San Carlos, 600 Elm Street, San Carlos, CA 94070.
91 8.e
November 27, 2023

Packet Pg. 151

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 13 - JOINT VENTURES, CONTINUED
D. South Bayside Waste Management Authority (“SBWMA”)
The South Bayside Waste Management Authority (‘the Authority’) JPA was formed on October 13, 1999.

Members of the Authority currently include the cities of Atherton, Belmont, Burlingame, East Palo Alto, Foster City, Hillsborough, Menlo Park, Redwood City, San Carlos, San Mateo, as well as the West Bay Sanitary District and the County of San Mateo. The members are required by Assembly Bill (AB) 939 to reduce, recycle, and reuse solid waste generated within their respective jurisdictions and to provide source reduction, recycling, and composting activities. The Authority's purpose is to assist its members in meeting these requirements.

Financial statements may be obtained by mailing a request to SBWMA, 610 Elm St. #202, San Carlos, CA 94070
E. Peninsula Traffic Congestion Relief Alliance (“Commute.org”) The Peninsula Traffic Congestion Relief Alliance is a joint exercise of powers between the cities of Belmont, Brisbane, Burlingame, Colma, Daly City, East Palo Alto, Foster City, Half Moon Bay, Millbrae, Pacifica, Redwood City, San Bruno, San Carlos, San Mateo, South San Francisco, the County of San Mateo, Town of Atherton, and Town of Hillsborough. It was formed to perform transit systems management efforts to mitigate traffic congestion in the member communities. Commute.org began operations on July 1, 2000. Starting on January 1, 2018, the City began providing financial services to Commute.org and received $84,500 for the services during the fiscal year ended June 30, 2023.

Financial statements may be obtained by mailing a request to the City of San Carlos, 600 Elm Street, San Carlos, CA 94070.

F. California Municipal Finance Authority (“CMFA”)
The CMFA was created on January 1, 2004 pursuant to a joint exercise of powers agreement to promote economic, cultural, and community development through the financing of economic development and charitable activities throughout California. The CMFA also assists local governments, non-profit organizations, and businesses with the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. Over 300 municipalities have become members of the CMFA.

On September 9, 2019, the City Council adopted Resolution 2019-071 authorizing the execution of a Joint Exercise of Powers Agreement and approving the issuance of tax-exempt bonds by the CMFA for the benefit of Charities Housing Development Corporation of Santa Clara County (the “Sponsor”), on behalf of Walnut Street, L. P., or a subsidiary or affiliate thereof (the “Borrower”), to provide for the financing of new construction of a 24-unit affordable rental housing facility for the benefit of the 817 Walnut Street project.
92 8.e
November 27, 2023

Packet Pg. 152

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 13 - JOINT VENTURES, CONTINUED
G. San Mateo County Libraries
The San Mateo County Library JPA was established in 1999 to provide library services to community members. The Library JPA is comprised of the cities of Atherton, Belmont, Brisbane, East Palo Alto, Foster City, Half Moon Bay, Millbrae, North Fair Oaks, Pacifica, Portola Valley, San Carlos, Woodside, and the unincorporated areas of the county. The Library JPA is a separate independent entity with its own Governing Board, consisting of elected officials from each member entity. Its Operations Committee is composed of City and County representative from each member entity.

In accordance with the Library JPA Agreement, and as approved by the JPA Governing Board, at end of each fiscal year, funds in excess of the amount required to operate a community library are distributed and held by the Library JPA in separate trust funds. The excess dedicated library tax revenue to the City at June 30, 2023 was $3,240,885. These funds can be used by the City to cover the repairs and maintenance costs for the library.

H. San Mateo Operational Area Emergency Services Organization (“OES”) San Mateo County Operational Area (“OA”) JPA was formed in 35 years ago. The OA is comprised of all local governments within the geographic area of San Mateo County. The Emergency Services Council (“EMC”), which consists of representatives of the jurisdictions in the San Mateo County OA, is the governing and oversight body for the Emergency Services Organization Authority (“Organization”). The purpose of the organization is to operate pursuant to California’s Standard Emergency Management System (“SEMS”) and local adopted Emergency Operations Plans. The goal is to provide coordinated plans for the protection of persons and properly based on the phases of emergency management.

I. Peninsula Clean Energy Authority of San Mateo County Under the Community Choice Aggregation (“CCA”) program, San Mateo County of all 21 of its cities and towns formed Peninsula Clean Energy (“PCE”), a community-controlled, not-for-profit, joint powers agency in 2016. As a CCA, PCE offers many environmental and economic benefits to its residential and business customers. The purposes of the JPA is to reduce greenhouse gas emissions, provide electric power and other forms of energy to customers at a competitive cost, and reduce energy consumption.

The Board of Directors consists of elected officials fr om each of the 21 cities within the County of San Mateo and the unincorporated areas of the county.

J. Service Agreements
Fire and Emergency Services Agreement with the City of Redwood City In July 2011, the City of San Carlos and the City of Redwood City entered into an agreement for fire and emergency services. This original agreement allowed the City of San Carlos to maintain a fire department, including personnel and infrastructure, at its sole cost sufficient to provide certain emergency and non-emergency services. The City of Redwood City provided certain fire and emergency services, including fire administration and support; fire prevention; investigation; and training. The City of San Carlos pays the City of Re dwood City a fee for the services provided that is reviewed in January of each year and amended to reflect actual increases or decreases in cost. 93 8.e
November 27, 2023

Packet Pg. 153

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 13 – JOINT VENTURES, CONTINUED
J. Service Agreements, continued
Fire and Emergency Services Agreement with the City of Redwood City, continued On June 24, 2013, the City Council adopted a resolution for the execution of the amended and restated agreement between the Cities of Redwood City and San Carlos for a full-service model for fire and emergency services. The restated agreement also included the transfer of fire services personnel from the City of San Carlos to the City of Redwood City on July 1, 2013. The term of the agreement was five years, which began on July 1, 2013 and expired on June 30, 2018.

In April 2018, the Cities of Redwood City and San Carlos negotiated a restated agreement for another five years, commencing on July 1, 2018 and expiring on June 30, 2023. Cost of services are be reviewed annually and brought forward for Council approval each year. The total charges for fiscal year 2023 were $9.067,435.

Law Enforcement Services Agreement with the County of San Mateo In September 2010, the City Council approved a five -year Police Services Agreement contract with the County of San Mateo Sheriff’s Office to provide law enforcement to the City. The contract with the Sheriff’s Office includes police management, patrol, investigation, traffic enforcement, community and school services, and support service components. The contract maintains minimum staffing levels for patrol, provides for the same quick response times, and restores many of the key community programs that the San Carlos Police Department had provided during better economic times. The consolidation of police services with the Sheriff’s Office results in estimated annual savings of approximately $2 million. Annual cost increases are limited to those increases required under California Government Code Section 51350.

In June 2020, the Council approved a new 5-year agreement with the San Mateo County Sheriff’s Office for July 2020 through June 2025. The total charges for fiscal year 2023 were $8,558,693.

Public Safety Communications Services Agreement with County of San Mateo On November 13, 2012, the City Council approved an agreement with the County of San Mateo for police dispatch services. The City Council approved a five-year agreement through June 30, 2025 on June 22, 2020 for police services with the San Mateo County Sheriff’s Office. The Sheriff’s Office is a County department and uses only one dispatch provider. The dispatch service provider for the Sheriff’s Office is a separate County department named “Public Safety Communications”.

San Mateo County’s Public Safety Communications Center is responsible for answering both emergency and non-emergency calls for service. The Communications Center is the primary answering point for 9-1-1 calls within the unincorporated areas of San Mateo County and the Cities of Half Moon Bay, Millbrae, East Palo Alto, Portola Valley, San Carlos, Woodside, and Broadmoor. 94 8.e
November 27, 2023

Packet Pg. 154

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 14 - COMMITMENTS AND CONTIGENT LIABILITIES
The City is subject to litigation arising during the normal course of business. In the opinion of the City Attorney, there is no pending litigation that is likely to have a material adverse effect on the financial position of the City.

The City participates in Federal, State, and local grant programs. These programs have been audited by the City's independent accountants in accordance with the provisions of the Federal Single Audit Act of 1984, as amended, and applicable State requirements. No cost disallowances were proposed as a result of these audits; however, these programs are still subject to further examination by the grantors, and the amount, if any, of expenditures that may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial.

A. Palo Alto Medical Foundation Development Agreement
On October 8, 2007, after an extensive 3 1/2 year process, the City Council approved a proposal by the Palo Alto Medical Foundation (“PAMF”) to develop a regional Medical Clinic, Medical Office Building, and Hospital on an 18 acre site at 301 Industrial Road in San Carlos that formerly housed the Varian - CPI Eimac plant. In 2011, Sutter Health, PAMF’s parent organization approved funding for the first phase of construction of the medical facility. This included construction of the Medical Office Building and Clinic, the parking garage to serve full facility build-out, and site improvements including utilities, loop access road, and landscaping. In May 2012, PAMF received construction permits from the City and began work including grading and pile installation on the site. The Medical Office Building and Clinic opened to patients in November 2014. A second phase of the project, to construct the Hospital on this site, remains unfunded.

The purchase and transfer of the 18-acre site at 301 Industrial Road took a major parcel in San Carlos off of the property tax rolls of the City. This occurred when the title to the site passed from 301 Industrial LLC (the entity performing the site clearance and remediation activities) to PAMF, which is a tax-exempt entity.

In addition, the PAMF San Carlos Center would generate very little in sales tax revenue to the City. To offset this fiscal impact, a Development Agreement with PAMF was entered into to ensure that the City would be in substantially the same position financially as the City would likely have been with use of the Project Site for an economically productive purpose.

The key components of the Development Agreement are described in the table below. The Development Agreement guarantees the City nearly $91,000,000 in revenue over a 50-year period. When factoring in costs for City services, the Development Agreement would net the City $43,939,000 over 50 years, resulting in a positive net present value of $11,642,000. The net amount does not include one-time payments of $1 million to the City for athletic fields and $1.5 million to the San Carlos Education Foundation for educational purposes. This amount also does not include the City's share of any excess returns of the $9 million principal amount to be funded by PAMF under the agreement, which could be substantial depending on the investment returns received on the fund.

The financial impacts of these developments are beneficial to the City. The Guaranteed Minimum Payments (item “C” in the table below) began in 2010-11 with a payment of $630,000 in April 2011 after receipt of $250,000 per year payments in the two years prior as described in the Development Agreement.

The Guaranteed Minimum Payment received in the fiscal year ended June 30, 2023 was $847,280.

In addition to receiving the Year 3 Guaranteed Minimum Payments of $630,000 in April 2011 as specified in the development agreement, the start of construction triggered two more events. 95 8.e
November 27, 2023

Packet Pg. 155

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 14 - COMMITMENTS AND CONTIGENT LIABILITIES, CONTINUED A. Palo Alto Medical Foundation Development Agreement, continued First, the City received the "construction period revenue" for Phase 1 of the PAMF development (see item "D" in the table below). Since the second phase of the project is unfunded, the City and PAMF agreed to allocate $252,700 of the total construction period revenue to Phase 1, which the City has received.

Second, the start of construction triggered payment to the City of the "guaranteed minimum annual operational use tax revenue" one year after construction is completed (see item "E" in the table below).

B. Ordinance 1538 - Amending Development Agreement to the Palo Alto Medical Foundation On November 13, 2018 Council approved amending the Development Agreement between the City and the Palo Alto Medical Foundation for health care, research, and education relating to the development of property at 301 Industrial Road to extend the vesting period for 10 years. Ordinance 1538 was adopted by the Council on November 26, 2018. PAMF agreed to pay the City a portion of the Commercial Linkage Fee in the amount of $2 million within 14 days after the amendment was final with the remaining fee due at the time building permits were issued. PAMF was also required to make a contribution of $500,000 towards the US 101/Holly Pedestrian Bridge Project.
96 8.e
November 27, 2023

Packet Pg. 156

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 14 - COMMITMENTS AND CONTIGENT LIABILITIES, CONTINUED B. Ordinance 1538 - Amending Development Agreement to the Palo Alto Medical Foundation, continued
The initial contribution from PAMF to the City for the execution of the First Amendment to the Development Agreement was $2.5 million. The revenue sources contained in the Development Agreement are summarized in the following table:

Funding Source Summary Description Current Status
A $9 million endowment
fund (called the
Designated Fund)
At the end of 50 years, the Designated Fund
becomes the City's to administer
No change
B 50% of excess
returns on the
Designated Fund at
the end of the
payment term
In addition to receiving the $9 million
Designated Fund at the end of the term of
the agreement, the City will then receiv e
50% of the amount of the Designated
Fund that exceeds $9 million
No change
C Guaranteed minimum
payments from the
revenue on the
Designated Fund
$250,000 in each of Years 1 and 2
$630,000 in Year 3
$630,000 inflated by 2.5% per year for
the next 49 years
The City has received a total of $10,038,479 from years 1 through 15. City is scheduled to receive the year 16
payment of $848,462 in April 2024.

D Guaranteed minimum
construction-related
use tax revenue
$722,000 for the principal construction period With the start of construction in May 2012, construction period rev enue (use tax assigned to the project by the contractors) began to flow to the City's sales tax account.

At completion of Phase I construction, the City had
received total of $252,700 construction user tax.

E Guaranteed minimum
annual operational
use tax revenue
$152,000/year inflated by 3% per year for 50
years
Deferred — $152,000 per year is guaranteed for 50 years starting one year after construction of both the Medical Clinic and Hospital facilities are completed.

F $1.5 million One-time payment to the San Carlos
Education Foundation for health-related
school programs
Received — by San Carlos Education Foundation on Feb
5, 2008.

G $1 million One-time payment to the City to improv e
athletic facilities and fields
Received — by City of San Carlos on Feb 5, 2008. The
funds were used to install a synthetic turf field at Lower Highlands Park Field.

H $2.5 million One-time payment to the City for
amending development agreement
Received — by City of San Carlos on March 6, 2019. $2
million paid for the commercial linkage fee and $0.5
million was used for US101/Holly Pedestrian Bridge
Project.

Total: $93,304,000 (minimum) over 50 years
97 8.e
November 27, 2023

Packet Pg. 157

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 14 - COMMITMENTS AND CONTIGENT LIABILITIES, CONTINUED C. Construction Commitments
Construction commitments as of June 30, 2023 consisted of the following projects:

NOTE 15 - SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provided for the dissolution of all Redevelopment Agencies in the State of California. This action impacted the reporting entity of the City of San Carlos that previously had reported a Redevelopment Agency within the reporting entity of the City as a blended component unit.

The Bill provided that upon dissolution of a Redevelopment Agency, either the City or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of State and local government. On January 9, 2012, the City Council elected to become the Successor Agency for the former Redevelopment Agency in accordance with the Bill.

After enactment of the Bill, which occurred on June 28, 2011, Redevelopment Agencies in California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

In future fiscal years, Successor Agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former Redevelopment Agency until all enforceable obligations of the prior Redevelopment Agency have been paid in full and all assets have been liquidated.

The last and final Recognized Obligations Payment Schedule (“ROP”) and administrative costs budget for the period July 1, 2020 to June 30, 2035 was approved by the Department of Finance on November 18, 2019. The Successor Agency will no longer have to prepare and submit the ROPS on an annual basis.

The last and final ROPS provides a permanent guarantee that all of the Successor Agency’s existing obligations will be repaid by 2035 without the annual review of the same debt items by the DOF under the current process.
98 8.e
November 27, 2023

Packet Pg. 158

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 15 - SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT

AGENCY, CONTINUED
A. Cash and Investments
Cash and investments reported by the Successor Agency in the accompanying financial statements consisted of the following:

B. Long-term Debt
The Successor Agency long-term debt issues and transactions are summarized below and discussed in detail thereafter.

C. Installment Purchase Agreement
On October 1, 1994, the Redevelopment Agency purchas ed real property and provided the bulk of the financing required to construct and equip an 85-unit residential care facility for elderly low income persons.

As part of the transaction, the San Carlos Development Corporation (“SCDC”) agreed to purchase and operate the facility as the San Carlos Elms. The Redevelopment Agency signed a direct borrowing Installment Purchase Agreement in the amount of $2,800,000 to finance its purchase of the land.

Payments are made out of receipts from SCDC. Interest payments on the Installment Purchase Agreement are due monthly and principal payments began on May 1, 2012 and continue through June 1, 2035, bearing interest of 10.9%. As of June 30, 2023, the total principal and interest remaining on the debt is $3,655,483.

D. Tax Allocation Refunding Bonds
In April 2018, the Successor Agency issued $11,840,684 of 2018 Tax Allocation Refunding Direct Placement Bonds to refinance the 2007 Series A Tax Allocation Revenue Bonds. The refunding resulted in an overall debt service decrease of $1,833,697. The net present value of the savings resulted in an economic gain of $1,466,261. This equates to $1.5 million in cumulative cash flow savings through 2033, or about $100,000 annually, which is divided amongst the taxing entities. The 2007 Series A Tax Allocation Revenue Bonds were subsequently retired in May 2018.
99 8.e
November 27, 2023

Packet Pg. 159

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 15 - SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT

AGENCY, CONTINUED
D. Tax Allocation Refunding Bonds, continued
The 2018 Bonds are special obligations of the Successor Agency payable solely from and secured by a pledge of Redevelopment Property Tax Trust Fund Revenues. Principal payments are payable annually on September 1 and the last principal payment is scheduled to occur in 2033. Interest payments are due semi-annually on September 1 and March 1 and bear interest of 2.85%.

The Redevelopment Agency pledged, as security for bonds issued, either directly or through the Financing Authority, a portion of tax increment revenue that it receives. The bonds were issued to provide financing for various capital projects. Assembly Bill 1X 26 provided that upon dissolution of the Redevelopment Agency, property taxes allocated to redevelopment agencies no longer are deemed tax increment but rather property tax revenues and will be allocated first to successor agencies to make payments on the indebtedness incurred by the dissolved redevelopment agency. Total principal and interest remaining on the debt is $10,392,841 with annual debt service requirements as included below. For the current year, the total property tax revenue recognized by the Successor Agency for the payment of indebtedness incurred by the dissolved Redevelopment Agency was $1,272,492 and the debt service obligation on the bonds was $945,629.

E. Debt Service Requirements
The following schedule illustrates the debt service requirements to maturity for the debt outstanding as of June 30, 2023:

Principal Interest Total Principal Interest Total
2024 703,118 244,304 947,422 99,905 205,495 305,400 2025 723,907 223,969 947,876 110,093 195,307 305,400 2026 743,938 203,051 946,989 121,320 184,080 305,400 2027 763,191 181,575 944,766 133,690 171,710 305,400 2028 786,641 159,490 946,131 147,325 158,075 305,400 2029-2033 4,275,239 443,620 4,718,859 995,065 531,935 1,527,000 2034-2035 927,580 13,218 940,798 545,233 56,251 601,484 Total 8,923,614$ 1,469,227$ 10,392,841$ 2,152,631 $ 1,502,853 $ 3,655,484 $ Direct Borrowing
Installment Purchase Agreement
Direct Placement
Tax Allocation Refunding BondsFor the Year
Ending June
30,
100

8.e
November 27, 2023

Packet Pg. 160

City of San Carlos
Notes to Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 16 – PRIOR PERIOD ADJUSTMENTS
In fiscal year 2023, the City recorded two prior period adjustments: one in the Capital Improvements Fund to reclass ARPA receipts in the prior year as unearned, and one in the Housing Fund to remove the principal portion of loan balances in unavailable revenues and remove prior adjustments to net position made in the fund related to originally booking those unavailable revenues.

NOTE 17 – SUBSEQUENT EVENTS
In October 2023, the City purchased two properties totaling $12.51 million using cash in the Housing Capital Projects Fund.
101

8.e
November 27, 2023

Packet Pg. 161

This page intentionally left blank
102

8.e
November 27, 2023

Packet Pg. 162

REQUIRED

SUPPLEMENTARY INFORMATION
103

8.e
November 27, 2023

Packet Pg. 163

City of San Carlos
Required Supplementary Information
For the year ended June 30, 2023
CalPERS Cost Sharing Plan
Schedule of the Proportionate Share of the Net Pension Liability - Last Ten Fiscal Years* Miscellaneous
Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 City's proportion of the net pension liability 0.22% 0.25% 0.23% 0.23% City's proportionate share of
the net pension liability 13,765,793$ 16,833,679 $ 20,234,806 $ 22,834,231 $ Covered payroll 4,034,029$ 6,254,350$ 6,577,443$ 7,079,214$ City's proportionate share of
the net pension liability as percentage
of its covered payroll 341% 269% 308% 323%
City's fiduciary net position as a percentage of the
City's proportion of the total pension liability 77.29% 72.85% 68.77% 68.08% Safety
Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 City's proportion of the net pension liability 0.22% 0.23% 0.21% 0.20% City's proportionate share of
the net pension liability 13,974,817$ 15,579,631 $ 17,790,912 $ 19,520,586 $ Covered payroll 104,376$ 109,603$ 114,534$ 119,583$ City's proportionate share of
the net pension liability as percentage
of its covered payroll 13389% 14215% 15533% 16324%
City's fiduciary net position as a percentage of the
City's proportion of the total pension liability 73.42% 69.92% 66.12% 64.49% Notes to the schedule:
*Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown.

Benefit Changes:

There were no changes to benefit terms that applied to all members of the Public Agency Pool. However, individual employers in the Plan may have provided a benefit improvement to their employees by granting Two Years Additional Service Credit to members retiring during a specified time period (a.k.a.

Golden Handshakes).

Changes in Assumptions: In FY2023, the discount rate decreased from 7.15% to 6.9% 104

8.e
November 27, 2023

Packet Pg. 164

6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022

0.18% 0.18% 0.12% 0.15% 0.35%
17,011,933$ 18,386,126 $ 12,569,004 $ 2,800,549 $ 16,367,826 $ 7,389,579$ 7,885,229$ 8,586,940$ 8,595,270$ 9,105,629$ 230% 233% 146% 33% 180%

76.94% 76.26% 84.31% 96.63% 81.39%
6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/202 2

0.20% 0.20% 0.19% 0.43% 0.33%
19,398,821$ 20,128,984 $ 20,988,636 $ 15,082,867 $ 22,401,494 $ 53,322$ 103,575$ 125,858$ 141,154$ 150,121$ 36381% 19434% 16676% 10685% 14922%

65.22% 65.05% 64.37% 74.51% 63.59%
105

8.e
November 27, 2023

Packet Pg. 165

City of San Carlos
Required Supplementary Information
For the year ended June 30, 2023
CalPERS Cost Sharing Plan
Schedule of Pension Plan Contributions - Last 10 Fiscal Years* Miscellaneous
Fiscal Year Ended 2015 2016 2017 2018
Actuarially determined contribution 1,261,404$ 1,102,597$ 670,838$ 6,926,132$ Contributions in relation to actuarially
deemed contributions (1,261,404) (1,102,597) (670,838) (6,926,132) Contribution deficiency (excess) -$ -$ -$ -$ Covered payroll 6,254,350$ 6,577,443$ 7,079,214$ 7,389,579$ Contributions as a percentage of
covered payroll 20.17% 16.76% 9.48% 93.73%
Safety
Fiscal Year Ended 2015 2016 2017 2018
Actuarially determined contribution 1,034,659$ 1,169,706$ 1,112,696$ 1,255,290$ Contributions in relation to actuarially
deemed contributions (1,034,659) (1,169,706) (1,112,696) (1,255,290) Contribution deficiency (excess) -$ -$ -$ -$ Covered payroll 109,603$ 114,534$ 119,583$ 53,322$ Contributions as a percentage of
covered payroll 944% 1021% 930% 2354%
Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age
Amortization method Level percentage of payroll, closed Remaining amortization period 8 years as of the Valuation Date Asset valuation method Market Value of Assets
Discount Rate 7.15%
Inflation 2.50%
Salary increases Annual increase vary by category, entry age and duration of service Retirement age 50 and up
*Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown. 106

8.e
November 27, 2023

Packet Pg. 166

2019 2020 2021 2022 2023
1,799,956$ 9,110,376$ 3,418,397$ 1,820,816$ 2,107,821$ (1,799,956) (9,110,376) (3,418,397) (1,820,816) (2,107,821) -$ -$ -$ -$ -$ 7,885,229$ 8,586,940$ 8,595,270$ 9,105,629$ 10,363,808$

22.83% 106.10% 39.77% 20.00% 20.34%
2019 2020 2021 2022 2023
1,456,904$ 1,676,149$ 1,830,722$ 2,034,117$ 2,207,219$ (1,456,904) (1,676,149) (1,830,722) (2,034,117) (2,207,219) -$ -$ -$ -$ -$ 103,575$ 125,858$ 141,154$ 150,121$ 57,357$ 1407% 1332% 1297% 1355% 3848%
107

8.e
November 27, 2023

Packet Pg. 167

City of San Carlos
Required Supplementary Information
For the year ended June 30, 2023
PARS Agent Multiple-Employer Longevity Recognition Plan Schedule of Changes in the Net Pension Liability and Related Ratios - Last Fiscal 10 Years* Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017

TOTAL PENSION LIABILITY
Service cost Not available 239,822$ 225,433$ 229,629$ Interest Not available 455,847 470,045 478,414 Changes in assumptions Not available - 802,583 (2,369,059) Differences due to plan experience Not available - - 1,055,691 Benefit payments Not available (261,805) (299,652) (333,528) Net change in the total pension liability Not available 433,864 1,198,409 (938,853) Total pension liability - beginning Not available 9,079,950 9,513,814 10,712,223 Total pension liability - ending (a) 9,079,950$ 9,513,814$ 10,712,223$ 9,773,370 $

PLAN FIDUCIARY NET POSITION
Contributions - employer 311,000$ 328,200$ 350,000$ 452,000$ Net investment income 141,262 29,190 15,848 128,999 Administrative expense - (373) (394) (455) Benefit payments (208,839) (261,805) (299,652) (333,528) Net change in plan fiduciary net position 243,423 95,212 65,802 247,016 Plan fiduciary net position - beginning 1,324,507 1,567,930 1,663,142 1,728,944 Plan fiduciary net position - ending (b) 1,567,930$ 1,663,142$ 1,728,944$ 1,975,960$ Net pension liability - ending (a) - (b) 7,512,020$ 7,850,672$ 8,983,279$ 7,797,410$ Plan fiduciary net position as a percentage of the
total pension liability 17.27% 17.48% 16.14% 20.22%
Covered em
ployee payroll1 4,751,000$ 3,794,000$ 3,848,632$ 3,726,133$ Net pension liability as a percentage of covered
payroll 158.11% 206.92% 233.41% 209.26%
Notes to the Schedule:
1Covered employee payroll as of June 30, 2015 only reflects 36 of 43 active. *Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown. 108

8.e
November 27, 2023

Packet Pg. 168

6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022
168,032$ 173,493 $ 123,724 $ 127,436 $ 151,066 $ 585,709 608,083 623,837 639,803 797,046 - (36,873) - 1,613,526 - - (2,151) - 758,229 - (359,186) (413,387) (447,071) (523,269) (560,537) 394,555 329,165 300,490 2,615,725 387,575 9,773,370 10,167,925 10,497,090 10,797,580 13,413,305 10,167,925$ 10,497,090 $ 10,797,580 $ 13,413,305 $ 13,800,880 $ 1,520,000$ 459,000$ 630,300$ 638,000$ 620,000$ 116,751 183,313 126,101 688,031 (480,064) (2,367) (549) (11) (756) (776) (359,186) (413,387) (447,071) (523,269) (560,537) 1,275,198 228,377 309,319 802,006 (421,377) 1,975,960 3,251,158 3,479,535 3,788,854 4,590,860 3,251,158$ 3,479,535$ 3,788,854$ 4,590,860$ 4,169,483$ 6,916,767$ 7,017,555$ 7,008,726$ 8,822,445$ 9,631,397$

31.97% 33.15% 35.09% 34.23% 30.21%
3,451,329$ 3,492,842$ 3,274,152$ 3,118,362$ 3,001,909$ 200.41% 200.91% 214.06% 282.92% 320.84%
109

8.e
November 27, 2023

Packet Pg. 169

City of San Carlos
Required Supplementary Information
For the year ended June 30, 2023
PARS Agent Multiple-Employer Longevity Recognition Plan Schedule of Pension Plan Contributions - Last 10 Fiscal Years* Fiscal Year Ended 2015 2016 2017
Actuarially determined contribution Not available 765,384 $ 834,000 $ Contributions in relation to actuarially
determined contributions Not available (350,000) (452,000) Contribution deficiency (excess) Not available 415,384$ 382,000$ Covered employee payroll Not available 3,794,000$ 3,848,632$ Contributions as a percentage of
covered employee payroll Not available 9.23% 11.74%
Notes to Schedule
Valuation date Not available
Actuarial cost method Not available
Amortization method Not available
Amortization period Not available 24 years 23 years
Discount Rate Not available
Inflation Not available
Annual salary increases Not available
Investment rate of return Not available
Mortality Not available
Mortality improvement Not available
*Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown.

2.50%

6.00%
CalPERS 2014 Experience Stud
y
Scale BB projected to 2028

6.00%

2.50%
June 30, 2015
Entry-Age Normal
Level % of Pay
110

8.e
November 27, 2023

Packet Pg. 170

2018 2019 2020 2021 2022 2023
857,928$ 795,117$ 640,965$ 624,585$ 619,847$ 883,364$ (1,520,000) (459,000) (630,300) (638,000) (620,000) (668,000) (662,072)$ 336,117$ 10,665$ (13,415)$ (153)$ 215,364$ 3,726,133$ 3,492,842$ 3,274,152$ 3,118,362$ 3,001,909$ 3,419,268$

40.79% 13.14% 19.25% 20.46% 20.65% 19.54%
20 years 19 years 30 years 30 years 29 years 28 years

6.00%

2.50%

3.00%

6.00%
CalPERS 2017 Experience Study
MacLeod Watts Scale 2020

3.25%

6.00%
CalPERS 2014 Experience Stud
y
MacLeod Watts Scale 2017
June 30, 2019
Entry-Age Normal
Level dollar

6.00%

2.75%
June 30, 2017
Entry-Age Normal
Level dollar
June 30, 2021
Entry-Age Normal
Level dollar

6.00%

2.50%

3.00%

6.00%
CalPERS 2017 Experience Stud
y
MacLeod Watts Scale 2022
111

8.e
November 27, 2023

Packet Pg. 171

City of San Carlos
Required Supplementary Information
For the year ended June 30, 2023
Schedule of Changes in the Net OPEB Liability and Related Ratios - Last 10 Fiscal Years* Measurement Date 6/30/2017 6/30/2018 6/30/2019
Total OPEB Liability
Service cost 99,800$ 103,043$ 112,103$
Interest 372,359 378,808 377,356
Differences between expected and actual
experience - - (791,845) Benefit payments (350,018) (416,540) (430,477) Changes of assumptions - 153,245 (192,646) Net change in the total OPEB liability 122,141 218,556 (925,509) Total OPEB liability - beginning 5,394,624 5,516,765 5,735,321 Total OPEB liabilty - ending (a) 5,516,765 5,735,321 4,809,812 Plan Fiduciary Net Position
Contribution - employer 470,037 1,502,744 575,870 Net investment income 127,483 117,747 162,210 Administrative expense (656) (904) (578) Other expenses - (2,011) - Benefit payments (350,018) (416,540) (430,477) Net change in plan fiduciary net position 246,846 1,201,036 307,025 Plan fiduciary net position - beginning 1,273,705 1,520,551 2,721,587 Plan fiduciary net position - ending (b) 1,520,551 2,721,587 3,028,612 Net OPEB liability/asset - ending (a) - (b) 3,996,214$ 3,013,734$ 1,781,200$ Covered-employee payroll 7,198,797$ 7,720,689$ 8,235,888$ Net OPEB liability as a percentage of covered-
employee payroll 55.51% 39.03% 21.63%
* Fiscal year 2018 was the 1st year of implementation.
112

8.e
November 27, 2023

Packet Pg. 172

6/30/2020 6/30/2021 6/30/2022
95,744$ 98,616$ 103,834$
316,059 315,162 282,490
- (314,122) -
(446,408) (409,504) (380,832)
- 290,478 -
(34,605) (19,370) 5,492
4,809,812 4,775,207 4,755,837
4,775,207 4,755,837 4,761,329
476,115 432,960 400,799
103,926 858,046 (534,670)
(1,446) (1,173) (1,011)
- - -
(446,408) (409,504) (380,832)
132,187 880,329 (515,714)
3,028,612 3,160,799 4,041,128
3,160,799 4,041,128 3,525,414
1,614,408$ 714,709$ 1,235,915$
8,951,213$ 8,822,720$ 9,348,265$

18.04% 8.10% 13.22%
113

8.e
November 27, 2023

Packet Pg. 173

City of San Carlos
Required Supplementary Information
For the year ended June 30, 2023
Schedule of OPEB Contributions - Last 10 Fiscal Years*
Fiscal Year Ended June 30, 2018 2019 2020 2021 2022 2023 Actuarially determined contribution 471,538$ 373,834$ 289,800$ 274,899$ 262,208$ 231,807$ Contributions in relation to the actuarially
determined contribution (1,502,744) (575,870) (476,115) (432,960) (400,799) (390,000) Contribution deficiency (excess) (1,031,206)$ (202,036)$ (186,315)$ (158,061)$ (138,591)$ (158,193)$ Covered employee payroll 7,198,797$ 8,235,888$ 8,951,213$ 8,822,720$ 9,348,265$ 10,871,968$ Contributions as a percentage of
covered employee payroll 20.87% 6.99% 5.32% 4.91% 4.29% 3.59% *Fiscal year 2018 was the 1st year of implementation.

Notes to Schedule
Actuarial cost method Entry-Age Normal Entr y-Age Normal Amortization method Level dollar Level dollar
Amortization period Closed 22 years Closed 21 years Closed 20 years Closed 19 years Closed 18 years Closed 17 years Asset valuation method Market value Market value
Inflation 2.50% 2.50%
Healthcare Trend Rates 5.4% in 2021,
fluctuates until
ultimate rate of
4% in 2076

5.8% in 2023,
fluctuates until
ultimate rate of

3.9% in 2076
Salary increases 3.00% 3.00%
Investment rate of return 6.25% 6.05%
Retirement age Ages 50 to 75 Ages 50 to 75
Mortality CalPERS 2017
Experience Study
CalPERS 2017
Experience Study
Mortality improvement MacLeod Watts
Scale 2020
MacLeod Watts
Scale 2022
Entry-Age Normal
Level dollar
Market value

2.75%

7.5% to 5% in 0.5% steps

3.25%

7.00%
Ages 50 to 75
CalPERS 2014 Experience Study
MacLeod Watts Scale 2017
Entry-Age Normal
Level dollar
Market value

2.50%
MacLeod Watts Scale 2020

5.4% in 2021, fluctuates until ultimate
rate of 4% in 2076

3.00%

6.25%
Ages 50 to 75
CalPERS 2017 Experience Study
114

8.e
November 27, 2023

Packet Pg. 174

SUPPLEMENTARY INFORMATION
115

8.e
November 27, 2023

Packet Pg. 175

This page intentionally left blank
116

8.e
November 27, 2023

Packet Pg. 176

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Capital Improvement
For the year ended June 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Property taxes 800,000$ 800,000$ 2,819,438$ 2,019,438$ Franchise taxes 2,400,000 2,400,000 2,484,386 84,386 Licenses and permits 718,900 718,900 205,709 (513,191) From other agencies 4,010,447 4,010,447 1,901,698 (2,108,749) Use of money and property 74,200 74,200 67,100 (7,100) Other revenue 155,000 155,000 225,333 70,333 Total revenues 8,158,547 8,158,547 7,703,664 (454,883) EXPENDITURES:

Current:

Capital outlay 35,267,197 36,513,184 9,007,316 27,505,868 Total expenditures 35,267,197 36,513,184 9,007,316 27,505,868

REVENUES OVER (UNDER)
EXPENDITURES (27,108,650) (28,354,637) (1,303,652) 27,050,985 OTHER FINANCING SOURCES (USES):

Transfers in 3,900,000 3,960,000 3,960,000 - Transfers out (3,125,000) (3,125,000) (3,125,000) - Total other financing sources (uses) 775,000 835,000 835,000 - Net change in fund balances (26,333,650)$ (27,519,637)$ (468,652) 27,050,985$ FUND BALANCES:

Beginning of year 35,651,347
Restatement (3,389,932)
Beginning of year, as restated 32,261,415
End of year 31,792,76
3$
Budgeted Amounts
117

8.e
November 27, 2023

Packet Pg. 177

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Housing Capital Projects Fund
For the year ended June 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

From other agencies -$ -$ 39,441$ 39,441$ Use of money and property 260,700 260,700 298,342 37,642 Other revenue 5,266,700 5,266,700 452,273 (4,814,427) Total revenues 5,527,400 5,527,400 790,056 (4,737,344) EXPENDITURES:

Current:

Community development 8,188,939 8,388,839 1,483,359 6,905,480 Total expenditures 8,188,939 8,388,839 1,483,359 6,905,480

REVENUES OVER (UNDER)
EXPENDITURES (2,661,539) (2,861,439) (693,303) 2,168,136 Net change in fund balances (2,661,539)$ (2,861,439)$ (693,303) 2,168,136$ FUND BALANCES:

Beginning of year 23,149,252
Restatement 568,962
Beginning of year, as restated 23,718,214
End of year 23,024,91
1$
Budgeted Amounts
118

8.e
November 27, 2023

Packet Pg. 178

City of San Carlos
Nonmajor Governmental Funds
Year Ended June 30, 2023
Special Revenue Funds:

NPDES Funds: Used to account for revenues rece ived from assessments levied by the County on property and disburses funds in compliance with the provisions of the National Pollutant Discharge Elimination System.

Police Grants Fund: Used to account for grant activities and services paid for and reimbursed by grant funding. This fund includes grants from the following funding sources:
• Supplemental Law Enforcement Services Funds (SLESF): Under the SLESF program, cities and counties receive State funds to augment public safety expenditures.

San Carlos Library Tenant Fund: Used to account for the San Carlos Library tenant activities.

Capital Projects Funds:

Equipment Replacement Fund: Used to account for the anticipated replacement of general equipment needs.

Measure A Fund: Used to account for t he City'ss hare o f ao n e -half cent sa les tax restr icted for transportat ion purposes. The revenue received is used to augment capital projects in the Gas Tax Fund.

Measure WF u n d: Used to account for the City's share of one-half cent sales tax . The Measure W went into effective in July of 2019 for 30 years. The funding is used to improve transit, relieve congestion, repair potholes, maintain streets and improve pedestrian safety.

Gas Tax Funds: Used to account for revenue receive d from highway users tax an d expended under the State of California, Streets and Highways Code Section 2103, 2015, 2107 and 2107.5. Senate Bill (SB) 1, the Road Repair and Accountability Act of 2017 provides funding for local streets and roads over the next 10 years. Measure M approved in 2010 provides funding for local streets and roads for 25 years. These revenues must be expended for maintenance or construction of streets.

Park Fee Fund: Used to account for development fees collected and used to finance thea c q uisition and construction of City parks.

Parking In-lieu Fund: Used to account for fees charged to business in lieu of required parking. These revenues are used to pay for parking lot improvements and repairs.

Debt Service Fund:

San Carlos Library Bonds Debt Services Fund: Used to accumulate the annual tax levies earmarked for payment of principal and interest on the General Obligation Bonds. 119

8.e
November 27, 2023

Packet Pg. 179

City of San Carlos
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
ASSETS
Cash and investments 763,507 $ 308,435 $ 2,483,914 $ 3,995,230 $ 661,314 $ Receivables:

Accounts receivable 19,495 - 1,453 - - Total assets 783,002$ 308,435 $ 2,485,367 $ 3,995,230 $ 661,314 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 1,323 - 37,754 4,949 - Unearned revenue - - - - - Total liabilities 1,323 - 37,754 4,949 - Fund Balances:

Restricted for:

Public safety - 308,435 - - - Parks and recreation - - - - - Public works 781,679 - - - 661,314 Debt service - - - - - Committed to:

General government - - 2,447,613 - - Community development - - - - - Capital projects - - - 3,990,281 - Total fund balances 781,679 308,435 2,447,613 3,990,281 661,314 Total liabilities, deferred inflows of
resources and fund balances 783,002$ 308,435$ 2,485,367$ 3,995,230$ 661,314$ Measure A
Special Revenue Funds
NPDES Police Grants
San Carlos
Library Tenant
Equipment
Replacement
Capital Projects Funds
120

8.e
November 27, 2023

Packet Pg. 180

Debt Service
Fund
Total Nonmajor
Governmental
Funds
199,237$ 10,186,153$ 1,546,181 $ 397,955 $ 851,383 $ 21,393,309$ 45,945 145,896 - - - 212,789 245,182$ 10,332,049$ 1,546,181$ 397,955$ 851,383$ 21,606,098$ - 246,095 104 - - 290,225 - 15,784 - - - 15,784 - 261,879 104 - - 306,009 - - - - - 308,435 - - 1,546,077 - - 1,546,077 245,182 10,070,170 - - - 11,758,345 - - - - 851,383 851,383 - - - - - 2,447,613 - - - 397,955 - 397,955 - - - - - 3,990,281 245,182 10,070,170 1,546,077 397,955 851,383 21,300,089 245,182$ 10,332,049$ 1,546,181$ 397,955$ 851,383$ 21,606,098$ Capital Projects Funds
Measure W Gas Tax Park Fee Parking In-Lieu
San Carlos
Library Bonds
121

8.e
November 27, 2023

Packet Pg. 181

City of San Carlos
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the year ended June 30, 2023
REVENUES:

Sales taxes - $ - $ - $ - $ 1,154,183$ Property taxes - - - - - Licenses and permits - - - - - From other agencies 510,870 165,272 - - - Charges for services - - - - - Use of money and property 13,951 5,658 257,893 - 12,117 Other revenue 203,649 - 62,825 - - Total revenues 728,470 170,930 320,718 - 1,166,300 EXPENDITURES:

Current:

General government - - 351,370 - - Public safety - 150,000 - - - Public works 647,483 - 60,654 - 91,582 Capital outlay - - - 130,652 - Debt service:

Principal - - - - - Interest and fiscal charges - - - - - Total expenditures 647,483 150,000 412,024 130,652 91,582

REVENUES OVER (UNDER)
EXPENDITURES 80,987 20,930 (91,306) (130,652) 1,074,718 OTHER FINANCING SOURCES (USES):

Transfers in - - - 373, 000 -
Transfers out - - - - (1,150,000) Total other financing sources (uses) - - - 373,000 (1,150,000) Net change in fund balances 80,987 20,930 (91,306) 242,348 (75,282) FUND BALANCES:

Beginning of year 700,692 287,505 2,538,919 3,747,933 736,596 End of year 781,67
9$ 308,435$ 2,447,613$ 3,990,281$ 661,314$ Special Revenue Funds
NPDES Police Grants
San Carlos
Library Tenant
Equipment
Replacement
Capital Projects Funds
Measure A
122

8.e
November 27, 2023

Packet Pg. 182

Debt Service
Fund
Total Nonmajor
Governmental
Funds
514,184$ - $ - $ - $ - $ 1,668,367$ - - - - 443,503 443,503 - 106,825 - 4,340 - 111,165 - 1,697,043 - - - 2,373,185 - 600 - - - 600 3,649 186,224 28,331 7,649 15,550 531,022 - - 438,217 - - 704,691 517,833 1,990,692 466,548 11,989 459,053 5,832,533 - - - - - 351,370 - - - - - 150,000 - 1,013,600 - - - 1,813,319 - 5,155,276 104 - - 5,286,032 - - - - 415,000 415,000 - - - - 42,550 42,550 - 6,168,876 104 - 457,550 8,058,271 517,833 (4,178,184) 466,444 11,989 1,503 (2,225,738) - 5,275,000 - - - 5,648,000 (60
0,000) - (1,460,000) - - (3,210,000) (600,000) 5,275,000 (1,460,000) - - 2,438,000 (82,167) 1,096,816 (993,556) 11,989 1,503 212,262 327,349 8,973,354 2,539,633 385,966 849,880 21,087,827 245,182$ 10,070,170$ 1,546,077$ 397,955$ 851,383$ 21,300,089$ Capital Projects Funds
Measure W Gas Tax Park Fee Parking In-Lieu
San Carlos
Library Bonds
123

8.e
November 27, 2023

Packet Pg. 183

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual NPDES
For the year ended June 30, 2023
Variance with
Final Budget
Actual Positive
Final Amounts (Negative)
REVENUES:

From other agencies 531,700 $ 510,870 $ (20,830) $ Use of money and property 8,600 13,951 5,351 Other revenue 173,100 203,649 30,549 Total revenues 713,400 728,470 15,070 EXPENDITURES:

Current:

Public works 684,500 647,483 37,017
Total expenditures 684,500 647,483 37,017

REVENUES OVER (UNDER)
EXPENDITURES 28,900 80,987 52,087 Net change in fund balances 28,900$ 80,987 52,087 $ FUND BALANCES:

Beginning of year 700,692
End of year 781,679
$
Budgeted Amounts
124

8.e
November 27, 2023

Packet Pg. 184

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Police Grants
For the year ended June 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive
Final Amounts (Negative)
REVENUES:

From other agencies 168,100 $ 165,272 $ (2,828) $ Use of money and property 5,600 5,658 58 Total revenues 173,700 170,930 (2,770) EXPENDITURES:

Current:

Public safety 157,600 150,000 7,600 Total expenditures 157,600 150,000 7,600

REVENUES OVER (UNDER)
EXPENDITURES 16,100 20,930 4,830 Net change in fund balances 16,100$ 20,930 4,830 $ FUND BALANCES:

Beginning of year 287,505
End of year 308,435$
125

8.e
November 27, 2023

Packet Pg. 185

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual San Carlos Library Tenant
For the year ended June 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive
Final Amounts (Negative)
REVENUES:

Use of money and property 237,000$ 257,893 $ 20,893 $ Other revenue 45,800 62,825 17,025 Total revenues 282,800 320,718 37,918 EXPENDITURES:

Current:

General government 303,900 351,370 (47,470) Public works 1,352,485 60,654 1,291,831 Total expenditures 1,656,385 412,024 1,244,361 EXPENDITURES (1,373,585) (91,306) 1,282,279 Net change in fund balances (1,373,585)$ (91,306) 1,282,279 $ FUND BALANCES:

Beginning of year 2,538,919
End of year 2,447,613$
126

8.e
November 27, 2023

Packet Pg. 186

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Equipment Replacement
For the year ended June 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive
Final Amounts (Negative)
EXPENDITURES:

Current:

Capital outlay 1,500,000$ 130,652$ 1,369,348$ Total expenditures 1,500,000 130,652 1,369,348 OTHER FINANCING SOURCES (USES):

Transfers in 373,000 373,000 -
Total other financing sources (uses) 373,000 373,000 - Net change in fund balances (1,127,000)$ 242,348 1,369,348 $ FUND BALANCES:

Beginning of year 3,747,933
End of year
3,990,281$
127

8.e
November 27, 2023

Packet Pg. 187

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Measure A
For the year ended June 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive
Final Amounts (Negative)
REVENUES:

Sales taxes 905,600 $ 1,154,183 $ 248,583 $ Use of money and property 12,100 12,117 17 Total revenues 917,700 1,166,300 248,600 EXPENDITURES:

Current:

Public works 93,700 91,582 2,118 Total expenditures 93,700 91,582 2,118

REVENUES OVER (UNDER)
EXPENDITURES 824,000 1,074,718 250,718 OTHER FINANCING SOURCES (USES):

Transfers out (1,150,000) (1,150,000) - Total other financing sources (uses) (1,150,000) (1,150,000) - Net change in fund balances (326,000)$ (75,282) 250,718 $ FUND BALANCES:

Beginning of year 736,596
End of year 661,314$
128

8.e
November 27, 2023

Packet Pg. 188

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Measure W
For the year ended June 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive
Final Amounts (Negative)
REVENUES:

Sales taxes 383,350 $ 514,184 $ 130,834 $ Use of money and property - 3,649 3,649 Total revenues 383,350 517,833 134,483 OTHER FINANCING SOURCES (USES):

Transfers out (600,000) (600,000) - Total other financing sources (uses) (600,000) (600,000) - Net change in fund balances (216,650)$ (82,167) 134,483 $ FUND BALANCES:

Beginning of year 327,349
End of year 245,182$
129

8.e
November 27, 2023

Packet Pg. 189

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Gas Tax
For the year ended June 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive
Final Amounts (Negative)
REVENUES:

Licenses and permits 22,400 $ 106,825 $ 84,425 $ From other agencies 1,671,700 1,697,043 25,343 Charges for services 6,500 600 (5,900) Use of money and property 28,100 186,224 158,124 Total revenues 1,728,700 1,990,692 261,992 EXPENDITURES:

Current:

Public works 1,013,600 1,013,600 - Capital outlay 10,163,750 5,155,276 5,008,474 Total expenditures 11,177,350 6,168,876 5,008,474

REVENUES OVER (UNDER)
EXPENDITURES (9,448,650) (4,178,184) 5,270,466 OTHER FINANCING SOURCES (USES):

Transfers in 5,275,000 5,275,000 - Total other financing sources (uses) 5,275,000 5,275,000 - Net change in fund balances (4,173,650)$ 1,096,816 5,270,466 $ FUND BALANCES:

Beginning of year 8,973,354
End of year 10,070,170$
130

8.e
November 27, 2023

Packet Pg. 190

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Park Fee
For the year ended June 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive
Final Amounts (Negative)
REVENUES:

From other agencies 178,000$ - $ (178,000)$ Use of money and property 49,400 28,331 (21,069) Other revenue 248,400 438,217 189,817 Total revenues 475,800 466,548 (9,252) EXPENDITURES:

Current:

Capital outlay 800,642 104 800,538 Total expenditures 800,642 104 800,538

REVENUES OVER (UNDER)
EXPENDITURES (324,842) 466,444 791,286 OTHER FINANCING SOURCES (USES):

Transfers out (1,460,000) (1,460,000) - Total other financing sources (uses) (1,460,000) (1,460,000) - Net change in fund balances (1,784,842)$ (993,556) 791,286 $ FUND BALANCES:

Beginning of year 2,539,633
End of year 1,546,077$
131

8.e
November 27, 2023

Packet Pg. 191

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Parking In-Lieu
For the year ended June 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive
Final Amounts (Negative)
REVENUES:

Licenses and permits 3,200 $ 4,340 $ 1,140 $ Use of money and property 4,300 7,649 3,349 Total revenues 7,500 11,989 4,489 EXPENDITURES:

Current:

Community development 115,594 - 115,594 Total expenditures 115,594 - 115,594

REVENUES OVER (UNDER)
EXPENDITURES (108,094) 11,989 120,083 Net change in fund balances (108,094)$ 11,989 120,083 $ FUND BALANCES:

Beginning of year 385,966
End of year 397,955$
132

8.e
November 27, 2023

Packet Pg. 192

City of San Carlos
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual San Carlos Library Bonds
For the year ended June 30, 2023
Variance with
Final Budget
Budgeted Amounts Actual Positive
Final Amounts (Negative)
REVENUES:

Property taxes 323,400 $ 443,503 $ 120,103 $ Use of money and property 16,500 15,550 (950) Total revenues 339,900 459,053 119,153 EXPENDITURES:

Current:

Debt service:

Principal 415,000 415,000 - Interest and fiscal charges 42,800 42,550 250 Total expenditures 457,800 457,550 250

REVENUES OVER (UNDER)
EXPENDITURES (117,900) 1,503 119,403 Net change in fund balances (117,900)$ 1,503 119,403 $ FUND BALANCES:

Beginning of year 849,880
End of year 851,383$
133

8.e
November 27, 2023

Packet Pg. 193

City of San Carlos
Internal Service Funds
Year Ended June 30, 2023
Internal Service Funds are used to finance and account for special activities and services performed by a designated department for other departments in the City on a cost reimbursement basis. The concept of major funds does not extend to internal service funds because they do not do business with outside parties. The Statement of Activities, the net revenues or expenses of each internal service fund, is eliminated by netting them against the operations of the other City departments, which generated them. The remaining balance sheet items are consolidated with these same funds in the Statement of Net Position. However, internal service funds are still presented separately in the Fund Financial Statements, including the funds below:

Worker's Compensation Fund: Used to account for act ivities re lating to Workers’Compensation claims an d the premiums for coverage.

Liability Insurance Fund: Used to account for act ivities re lating to general liability claims aga inst t he City and premiums for coverage above the City’s risk retention level.

Longevity Benefits Fund: Used to account for activities relating to health care benefits for retired employees. 134

8.e
November 27, 2023

Packet Pg. 194

City of San Carlos
Combining Statement of Net Position
Internal Service Funds
June 30, 2023
Totals
ASSETS
Current Assets:

Cash and investments 371,760$ 2,031,122$ 216,501$ 2,619,383$ Total current assets 371,76 0 2,031,122 216,501 2,619,383 Total assets 371,760 2,031,122 216,501 2,619,383

LIABILITIES
Current liabilities:

Accounts payable and accrued liabilities 2,000 3,062 -5 ,062 Claims payable - current 85,000 659,400 - 744,400
Total current liabilities 87,000 662,462 - 749,462
Noncurrent liabilities:

Claims payable - 370,600 - 370,600
Total noncurrent liabilities - 370,600 - 370,600
Total liabilities 87,000 1,033,062 - 1,120,062

NET POSITION
Unrestricted 284,760 998,060 216,501 1,499,321
Total net position 284,760$ 998,060 $ 216,501 $ 1,499,321 $ Workers'
Compensation Longevity BenefitsLiability Insurance
135

8.e
November 27, 2023

Packet Pg. 195

City of San Carlos
Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds
For the year ended June 30, 2023
Totals
OPERATING REVENUES:

Charges for services -$ - $ 885,100$ 885,100 $ Cost reimbursements 185,700 1,439,200 - 1,624,900 Total operating revenues 185,700 1,439,200 885,100 2,510,000 OPERATING EXPENSES:

Insurance premiums 178,057 966,204 - 1,144,261 Claims expense 2,000 574,543 958,000 1,534,543 Miscellaneous 22,450 3,852 - 26,302 Total operating expenses 202,507 1,544,599 958,000 2,705,106 Operating income (loss) (16,807) (105,399) (72,900) (195,106) NONOPERATING REVENUES (EXPENSES):

Investment income 6,810 37,119 4,148 48,077 Total nonoperating revenues (expenses) 6,810 37,119 4,148 48,077 Income before contributions and transfers (9,997) (68,280) (68,752) (147,029) Change in net position (9,997) (68,280) (68,752) (147,029) NET POSITION:

Beginning of year 294,757 1,066,340 285,253 1,646,350 End of year 284,760$ 998,060 $ 216,501 $ 1,499,321 $ Workers'
Compensation Liability Insurance Longevity Benefits
136

8.e
November 27, 2023

Packet Pg. 196

City of San Carlos
Combining Statement of Cash Flows
Internal Service Funds
For the year ended June 30, 2023
Totals
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from/(paid to) interfund services 185,700$ 1,439,200$ 885,100$ 2,510,000$ Cash paid to suppliers for goods and services (196,507) (501,185) - (697,692) Claims paid (2,000) (574,543) (958,000) (1,534,543)
Net cash provided by (used in) operating activities (12,807) 363,472 (72,900) 277,765 CASH FLOWS FROM INVESTING ACTIVITIES:

Interest receive
d 6,810 37,119 4,148 48,077
Net cash provided by (used in) investing activities 6,810 37,119 4,148 48,077 Net cash flows (5,997) 400,591 (68,752) 325,842 CASH AND INVESTMENTS - Beginning of year 377,757 1,630,531 285,253 2,293,541 CASH AND INVESTMENTS - End of year 371,760$ 2,031,122 $ 216,501 $ 2,619,383 $

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:

Operating income (loss) (16,807)$ (105,399)$ (72,900)$ (195,106)$ Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:

Changes in assets and liabilities
Accounts payable 2,000 (34,129) - (32,129)
Claims payable 2,000 503,000 - 505,000
Net cash provided by (used in) operating activities (12,807)$ 363,472 $ (72,900) $ 277,765 $ Longevity BenefitsLiability Insurance
Workers'
Compensation
137

8.e
November 27, 2023

Packet Pg. 197

City of San Carlos
Custodial Funds
Year Ended June 30, 2023
Custodial Funds are use d to account for fiduciary activities that are not require d to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private-purpose trust funds.

City/County Association of Governments o f San Mateo County: Used to account for activities relating to C/CAG.

The City acts as a fiscal agent for this entity.

Peninsula Traffic Congestion Relief Alliance: Used to account for act ivities re lating to PTCRA, also known as Commute.org. The City acts as a fiscal agent for this entity. 138

8.e
November 27, 2023

Packet Pg. 198

City of San Carlos
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2023
City/County Association of Peninsula
Governments of Traffic Congestion
San Mateo County Relief Alliance Totals
ASSETS
Cash and investments 28,183,275$ 794,106$ 28,977,381$ Receivables:

Accounts receivable 3,831,382 -3 ,831,382
Notes and loans 2,769,314 - 2,769,314
Grants receivable - 1,763,592 1,763,592
Prepaid items - 29,122 29,122
Total assets 34,783,971 2,586,820 37,370,791

LIABILITIES
Current liabilities:

Accounts payable and accrued liabilities 5,850,998 978,174 6,829,172 Unearned revenue - 782,856 782,856
Total liabilities 5,850,998 1,761,030 7,612,028

NET POSITION
Restricted for:

Other governments 28,932,972 825,790 29,758,762 Total net position 28,932,972$ 825,790 $ 29,758,762$ 139

8.e
November 27, 2023

Packet Pg. 199

City of San Carlos
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
For the year ended June 30, 2023
City/County Association of Peninsula
Governments of Traffic Congestion
San Mateo County Relief Alliance Totals
ADDITIONS:

Members contributions 2,570,408$ -$ 2,570,408$ Intergovernmental 10,629,448 5,280,147 15,909,595 Fees and assessments 2,577,029 - 2,577,029 Miscellaneous 721,575 949 722,524 Total additions 16,498,460 5,281,096 21,779,556 DEDUCTIONS:

Administrative expenses 635,429 - 635,429 Distribution 6,930,270 5,406,800 12,337,070 Professional services 8,095,734 98 8,095,832 Total deductions 15,661,433 5,406,898 21,068,331
Change in net position 837,027 (125,802) 711,225 NET POSITION:

Beginning of year 28,095,945 951,592 29,047,537 End of year 28,932,972$ 825,790 $ 29,758,762$ 140

8.e
November 27, 2023

Packet Pg. 200

STATISTICAL SECTION
141

8.e
November 27, 2023

Packet Pg. 201

This page intentionally left blank
142

8.e
November 27, 2023

Packet Pg. 202

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Governmental activities
Net investment in capital assets 124,467,083$ 132,736,463$ 140,578,718$ 139,749,356$ 143,590,862$ 144,862,733$ 151,378,234$ 174,874,347$ 178,194,511$ 187,070,728$ Restricted 9,859,896         12,904,615       13,634,148       14,913,451       17,552,239       21,956,488       20,162,108       29,895,196       37,564,261       41,151,273 Unrestricted 42,689,655       14,374,721       14,261,604       19,429,741       26,566,944       37,335,673       39,591,734       43,510,702       57,901,459       61,443,931 177,016,634$ 160,015,799$ 168,474,470$ 174,092,548$ 187,710,045$ 204,154,894$ 211,132,076$ 248,280,245$ 273,660,231$ 289,665,932$ Business‐type activities
Net investment in capital assets 14,840,080$    14,855,225$    21,838,351$    27,740,303$    31,170,136$ 31,475,466$    32,069,977$    33,829,658$    32,740,661$    31,849,273$ Restricted 21,920,835$    29,481,877$    35,287,006$    42,484,597$    19,149,996$ Unrestricted 19,028,996       19,212,357       13,613,839       14,360,124       17,040,516       ‐                        ‐                        ‐                        ‐                        29,474,042 33,869,076$    34,067,582$    35,452,190$    42,100,427$    48,210,652$    53,396,301$    61,551,854$    69,116,664$    75,225,258$    80,473,311$ Primary
government
Net investment in capital assets 139,307,163$ 147,591,688$ 162,417,069$ 167,489,659$ 174,760,998$ 176,338,199$ 183,448,211$ 208,704,005$ 210,935,172$ 218,920,001$ Restricted 9,859,896         12,904,615       13,634,148       14,913,451       17,552,239       43,877,323       49,643,985       65,182,202       80,048,858       60,301,269 Unrestricted 61,718,651       33,587,078       27,875,443       33,789,865       43,607,460       37,335,673       39,591,734       43,510,702       57,901,459       90,917,973 210,885,710$ 194,083,381$ 203,926,660$ 216,192,975$ 235,920,697$ 257,551,195$ 272,683,930$ 317,396,909$ 348,885,489$ 370,139,243$ CITY OF SAN CARLOS, CALIFORNIA
Total primary government net
position
Total business‐type activities net
position
Total governmental activities net
position
Last Ten Fiscal Years
Net Position by Component
$‐
$50
$100
$150
$200
$250
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ Millions
Total Primary Government Net Position
Net investment in capital assets
Restricted
Unrestricted
143

8.e
November 27, 2023

Packet Pg. 203

2014 2015 2016 2017 2018
Expenses
Governmental Activities:

General Government 5,321,121$ 5,189,609$ 6,017,538$ 6,329,346$ 10,536,582$ Public Safety 15,592,529 16,069,651 17,430,558 18,375,585 19,030,927 Public Works 8,255,888 9,167,760 8,266,278 7,978,435 9,153,462 Community Development 2,991,374 3,272,803 4,096,699 4,700,675 3,916,838 Parks and Recreation 3,043,648 3,203,949 2,367,444 3,858,835 3,127,329 Interest on Long Term Debt 276,859 334,808 268,810 81,837 73,925 Total Governmental Activities Expenses 35,481,419 37,238,580 38,447,327 41,324,713 45,839,063 Business‐Type Activities:

Sewer 8,320,370 11,882,000 14,067,910 9,663,209 10,604,504 8,320,370
11,882,000 14,067,910 9,663,209 10,604,504 Total Primary Government Expenses 43,801,789$ 49,120,580$ 52,515,237$ 50,987,922$ 56,443,567$ Program Revenues
Governmental Activities:

Charges for Services:

General Government 1,071,289$ 1,749,186$ 1,258,805$ 1,297,282$ 1,323,703$ Public Safety 527,366 560,303 518,876 618,102 522,690 Public Works 1,201,650 769,083 2,222,932 1,502,215 3,419,090 Community Development 2,625,860 3,227,818 4,359,416 3,618,051 4,075,435 Parks and Recreation 2,206,374 1,710,865 1,499,342 1,630,102 1,576,562
Operating Grants and Contributions 1,942,020 1,718,123 1,717,004 2,093,580 4,864,283 Capital Grants and Contributions 4,907,492 4,882,958 4,295,854 2,416,816 973,726 Total Government Activities Program Revenues 14,482,051 14,618,336 15,872,229 13,176,148 16,755,489 Business‐Type Activities:

Charges for Services:

Sewer 12,685,252      15,335,342      16,798,299      16,793,613      17,487,381 Total Business‐Type Activities Program Revenue 12,685,252      15,335,342      16,798,299      16,793,613      17,487,381 Total Primary Government Program Revenues
27,167,303$   29,953,678$   32,670,528$   29,969,761$   34,242,870$ Net (Expense)/Revenue
Governmental Activities (20,999,368)$ (22,620,244)$ (22,575,098)$ (28,148,565)$ (29,083,574)$ Business‐Type Activities 4,364,882        3,453,342        2,730,389        7,130,404        6,882,877 Total Primary Government Net Expense (16,634,486)$ (19,166,902)$ (19,844,709)$ (21,018,161)$ (22,200,697)$ Total Business‐Type Activities Expenses
Changes in Net Position
Last Ten Fiscal Years
CITY OF SAN CARLOS, CALIFORNIA
144

8.e
November 27, 2023

Packet Pg. 204

2019 2020 2021 2022 2023
6,380,239$      14,340,628$   6,858,609$      4,493,858$      10,446,877$ 20,312,716      21,394,936      21,027,010      24,199,562      17,769,354 9,228,138        12,497,686      10,685,934      10,159,609      12,614,810 4,573,922        6,972,347        4,246,931        6,581,083        11,251,181 3,887,509        3,028,761        2,792,235        4,040,188        6,038,409 65,287             55,762             44,819             153,069           151,336 44,447,811      58,290,120      45,655,538      49,627,369      58,271,967 12,864,967      11,835,352      12,997,274      14,605,088      16,854,061 12,864,967      11,835,352      12,997,274      14,605,088      16,854,061 57,312,778$   70,125,472$   58,652,812$   64,232,457$   75,126,028$ 1,373,465$      1,325,656$      1,421,092$      1,469,529$      1,752,358$ 671,586           600,031
541,764           693,247           616,154
1,944,495        1,769,924        2,486,563        2,184,256        1,796,250 3,479,906        3,747,032        6,862,012        6,017,022        8,616,137 1,555,971        1,248,126        626,332           1,746,721        2,271,107 4,625,477        6,190,174        4,761,192        6,680,012        5,143,377 1,495,483        3,793,984        20,833,501      10,648,635      799,268 15,146,383      18,674,927      37,532,456      29,439,422      20,994,651 18,294,560      19,955,871      21,188,241      22,049,838      21,998,455 18,294,560      19,955,871      21,188,241      22,049,838      21,998,455 33,440,943$   38,630,798$   58,720,697$   51,489,260$
42,993,106$
(29,301,428)$ (39,615,193)$ (8,123,082)$    (20,187,947)$ (37,277,316)$ 5,429,593        8,120,519        8,190,967        7,444,750        5,144,394 (23,871,835)$ (31,494,674)$ 67,885$           (12,743,197)$ (32,132,922)$ 145

8.e
November 27, 2023

Packet Pg. 205

2014 2015 2016 2017 2018
General Revenues and Other Changes in Net Position
Governmental Activities:

Taxes:

Property Taxes 12,907,307$ 11,295,391$ 12,117,407$ 12,867,544$ 13,777,611$ Sales Taxes 7,287,136 9,882,460 10,708,021 11,574,662 12,716,614 Motor Vehicle In‐Lieu 2,438,078 2,515,600 2,744,676 2,933,877 3,202,810 Transient Occupancy Tax 1,270,072 1,396,732 1,578,740 1,570,815 1,655,658 Nonregulatory Franchise and Business 3,351,838 3,437,742 3,552,639 3,792,976 3,962,800 Use of money and property 1,918,054 2,330,545 3,147,860 2,271,719 2,782,096 Loss on sale of
capital assets ‐ ‐ ‐ (2,686,318) ‐ Other 686,427 708,552 1,284,689 867,468 1,307,380 Transfers 172,200 591,000 562,600 573,900 457,400 Special item ‐ ‐ ‐ ‐ 6,000,000 ‐ 2,172,017 ‐ ‐ ‐ Total Government Activities 30,031,112 34,330,039 35,696,632 33,766,643 45,862,369 Business‐Type Activities:

Use of money and property 91,110             77,276             109,244           91,733             199,087 Miscellaneous Revenues 32,358             26,973             ‐                       ‐                       ‐ Transfers (172,200)          (591,000)          (562,600) (573,900)          (457,400)
Total Business‐Type Activities (48,732)            (486,751)          (453,356)          (482,167)          (258,313) Total Primary Government 29,982,380$   33,843,288$   35,243,276$   33,284,476$   45,604,056$ Change in Net Position
Governmental Activities 9,031,744$      11,709,795$   13,121,534$   5,618,078$      16,778,795$ Business‐Type Activities 4,316,150        2,966,591        2,277,033        6,648,237        6,624,564 Total Primary Government 13,347,894$   14,676,386$   15,398,567$   12,266,315$   23,403,359$ Extraordinary gain/(loss) on dissolution of
RDA
146

8.e
November 27, 2023

Packet Pg. 206

2019 2020 2021 2022 2023
16,025,098$ 16,865,800$ 17,311,790$ 18,624,289$ 20,850,666$ 12,931,123 12,638,700 12,533,764 14,537,028 14,550,326 3,563,988 3,602,983 2,314,833 3,504,285 5,776,971 3,123,042 2,461,423 1,200,905 2,136,750 2,744,571 4,121,311 4,180,156 4,112,616 4,354,709 4,764,139 4,507,003 5,331,720 2,348,979 841,322 5,878,004 ‐ ‐ ‐ ‐ ‐ 877,612 902,593 814,964 910,850 854,310 597,100 609,000 633,400 658,700 685,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 45,746,277 46,592,375 41,271,251 45,567,933 56,103,987 353,156 644,034 5,685 (686,201) 784,041
‐ ‐ 1,558 8,745 4,618 (597,100) (609,000) (633,400) (658,700) (685,000) (243,944) 35,034 (626,157) (1,336,156) 103,659 45,502,333$ 46,627,409$ 40,645,094$ 44,231,777$ 56,207,646$ 16,444,849$ 6,977,182$ 33,148,169$ 25,379,986$ 18,826,671$ 5,185,649 8,155,553 7,564,810 6,108,594 5,248,053 21,630,498$ 15,132,735$ 40,712,979$ 31,488,580$ 24,074,724$ 147

8.e
November 27, 2023

Packet Pg. 207

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
General Fund
Nonspendable 15,130,823$      14,422,062$    348,263$        380,712$        607,633$         398,241$          203,543$         309,293$               1,143,006$      1,835,629$ Restricted ‐                           ‐                         ‐                       ‐ Committed 3,200,000          3,300,000         11,291,795    12,131,795     15,924,352     15,810,239      16,509,727      14,509,727           15,497,178      7,191,795 Assigned 12,901,565        13,683,365      14,000,000    16,841,500     9,841,500       19,341,500      16,841,500      19,341,500           24,341,500      42,566,107 Unassigned 3,040,483          3,386,603         3,971,159      2,698,673       3,177,129       2,888,220         2,890,529        3,542,557              3,128,480        2,878,734 Total General Fund 34,272,871$      34,792,030$    29,611,217$ 32,052, 680$ 29,550,614$   38,438,200$    36,445,299$    37,703,077$         44,110,164$    54,472,265$ Other Governmental Funds
Nonspendable ‐                           ‐                         ‐                       ‐                       ‐                        ‐                         ‐                         ‐                              ‐                         ‐ Restricted 9,859,896          12,904,615      13,634,148    14,913,451     17,552,239     21,956,488      20,162,108      29,895,196           37,564,261      41,151,273 Committed 12,377,737        15,968,926      16,433,787    21,406,130     30,751,795     34,128,375      33,745,063      37,045,447           42,324,165      34,966,490 Assigned ‐                           ‐                         ‐                       ‐                       ‐                        ‐                         ‐                         ‐                              ‐                         ‐ Unassigned ‐                           ‐                         ‐                       ‐                       ‐                        ‐                         ‐                         ‐                              ‐                         ‐ 22,237,633$      28,873,541$    30,067,
935$ 36,319,581$ 48,304,034$   56,084,863$    53,907,171$    66,940,643$         79,888,426$    76,117,763$ 56,510,504$      63,665,571$    59,679,152$ 68,372,261$ 77,854,648$   94,523,063$    90,352,470$    104,643,720$       123,998,590$ 130,590,028$

27.8% 12.7% ‐6.3% 14.6% 13.9% 21.4% ‐4.4% 15.8% 18.5% 5.3% CITY OF SAN CARLOS, CALIFORNIA
Total Governmental Fund
Balance
Last Ten Fiscal Years
Fund Balances ‐ Governmental Funds
% Change from Prior Year
Total other governmental
Fund
‐10.0%
‐5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%
$0
$20
$40
$60
$80
$100
$120
$140
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ Millions
Total Governmental Fund Balance
Total other governmental Fund % Change from Prior Year
148

8.e
November 27, 2023

Packet Pg. 208

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Revenues
Taxes 27,254,43 1$ 28,527,925$ 30,701,483$ 32,739,874$ 35,315,493$ 39,764,562$ 39,749,062$ 37,473,908$ 43,157,061$ 48,686,673$ Licenses, permits and fees 2,271,457 2,465,157 4,534,737 3,511,276 5,671,196 3,759,871 3,574,107 6,211,124 5,606,760 5,066,703 Fines and forfeitures 219,944 265,288 234,697 255,632 202,126 283,864 266,630 159,652 218,320 201,583 Use of money and property 2,176,508 6,124,308 3,143,760 2,195,096 2,680,870 4,393,214 5,206,157 2,277,391 643,279 6,039,524 From other agencies 4,119,086 4,218,621 4,360,957 2,753,794 1,602,792 1,974,384 3,090,322 4,241,884 5,929,398 4,486,383 Charges for services 3,389,107 3,785,239 4,253,198 3,952,620 4,231,562 4,130,312 3,855,545 4,576,734 5,475,185 8,736,888 Other 2,886,13 4 4,439,450 4,236,064 3,613,927 6,373,700 5,920,652 6,592,001 6,511,943 7,235,156 3,367,670 Total Revenues 42,316,667 49,825,988 51,464,896 49,022,219 56,077,739 60,226,859 62,333,824 61,452,636 68,265,159 76,585,424 Expenditures
Current:

General government 4,715,31
8 4,824,314 4,988,340 4,840,215 12,350,097 5,695,234 16,144,942 6,091,767 6,299,799 8,697,351 Public safety 15,360,993 15,993,240 17,340,123 17,827,665 18,568,952 19,567,510 20,351,411 20,681,262 21,178,999 22,807,499 Public works 6,779,012 4,121,793 4,612,132 8,930,843 11,417,750 9,223,438 6,166,679 6,123,584 7,251,780 8,421,707 Community development 2,870,822 3,104,920 4,134,764 4,250,662 4,668,424 4,400,138 8,099,919 5,989,739 7,230,955 8,456,924 Parks and recreation 2,574,917 2,590,068 2,775,229 2,816,465 2,919,349 2,997,533 2,945,962 2,024,703 3,642,195 4,473,637 Capital outlay 7,691,263 10,596,619 12,271,896 1,887,675 2,771,420 1,898,256 15,148,607 10,454,826 3,272,541 14,293,348 Debt service:

Principal repayment 285,000 6,405,000 9,210,000 250,000 265,000 290,000 320,000 365,000 520,253 538,141 Interest and fiscal charges 258,604 400,240 300,908 99,485 91,760 83,435 74,285 63,905 172,467 169,409 Total Expenditures 40,535,929 48,036,194 55,633,392 40,903,010 53,052,752 44,155,544 69,251,805 51,794,786 49,568,989 67,858,016 1,780,738 1,789,794 (4,168,496) 8,119,209 3,024,987 16,071,315 (6,917,981) 9,657,850 18,696,170 8,727,408 Other Financing Sources (Uses)
Transfers in 1,645,165 6,441,141 4,815,399 5,846,109 9,469,241 3,832,100 4,759,300 8,507,150 6,184,600 10,293,000 Transfers (out) (1,472,965) (5,850,141) (4,252,799) (5,272,209) (9,011,841) (3,235,000) (4,150,300) (7,873,750) (5,525,900) (9,608,000) Loss on sale of property ‐ ‐ (380,523) ‐ ‐ ‐ ‐ ‐ ‐ ‐ Proceeds of Debt 8,800,000 4,774,273 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Capital contribution 1,550,695 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Total other financing sources (uses) 10,522,895 5,365,273 182,077 573,900 457,400 597,100 609,000 633,400 658,700 685,000 Special item ‐ ‐ ‐ ‐ 6,000,000 ‐ 2,138,388 ‐ ‐ ‐ Extraordinary gain/(loss) on dissolution of RDA ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Net Change in fund balances 12,303,633$ 7,155,067$ (3,986,419)$ 8,693,109$ 9,482,387$ 16,668,415$ (4,170,593)$ 10,291,250$ 19,354,870$ 9,412,408$

1.7% 16.3% 20.7% 1.0% 0.8% 1.0% 0.9% 1.1% 1.5% 1.3%Debt service as a percentage of noncapital expenditures
Excess (deficiency) of revenues over (under)
expenditures
Changes in Fund Balances ‐ Governmental Funds
Last Ten Fiscal Years
CITY OF SAN CARLOS, CALIFORNIA
$‐
$10
$20
$30
$40
$50
$60
$70
$80
$90
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ Millions
To ta l Governmental Revenues and Expenditures
Total Revenues Total Expenditures
149

8.e
November 27, 2023

Packet Pg. 209

Real Property
Fiscal
Year
Residential
Property
Commercial
Property
Industrial
Property Others
Total Real
Property
Unsecured
Property Total Assessed
% Change
from Prior
Year
Total Direct
Tax Rate
2014 6,120,011,894 541,914,403 556,804,162 59,050,682 7,277,781,141 401,155,969 7,678,937,110 7.66% 0.11685 2015 6,489,784,870 561,595,333 563,659,154 50,870,561 7,665,909,918 299,060,205 7,964,970,123 3.72% 0.11840 2016 6,979,211,977 665,733,132 598,644,941 63,226,293 8,306,816,343 370,528,439 8,677,344,782 8.94% 0.11424 2017 7,420,946,280 770,190,805 636,526,534 67,885,633 8,895,551,269 381,768,262 9,277,319,531 6.91% 0.11379 2018 7,974,893,577 932,202,492 719,752,790 93,148,004 9,719,996,863 399,049,241 10,119,046,104 9.07% 0.11346 2019 8,556,401,938 1,038,848,823 920,844,274 89,053,163 10,605,148,198 590,331,671 11,195,479,869 10.64% 0.11460 2020 9,274,656,525 1,134,157,010 908,575,428 84,410,613 11,401,799,576 465,645,550 11,867,445,126 6.00% 0.11317 2021 10,058,881,929 1,207,502,590 1,101,271,014 97,747,547 12,465,403,080 388,462,296 12,853,865,376 8.31% 0.11219 2022 10,631,737,121 1,336,437,032 1,279,668,947 133,084,452 13,380,927,552 423,846,897 13,804,774,449 7.40% 0.11207 2023 11,567,728,737 1,464,899,784 1,908,269,890 93,708,394 15,034,606,805 508,848,926 15,543,455,731 12.59% 0.11221 Source:

San Mateo County Assessor 2013/14 ‐ 2022/23 Combined Tax Rolls Assessed Valuation, Tax Rates and Tax Levies
LAST TEN FISCAL YEARS
In 1978, the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). Property is only re‐assessed at the time it is sold to a new owner. At that point, the new assessed value is re‐assessed at the purchase price of the property sold . The assessed valuation data shown above represents the only data current available with respect to the actual market value of taxable property and is subject to the limitations described above.

CITY OF SAN CARLOS, CALIFORNIA
0 2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ Millions
CITY'S TAXABLE ASSESSED VALUATION
150

8.e
November 27, 2023

Packet Pg. 210

Fiscal
Year
Basic
Levy
¹City's
Share of
1% Levy
Per Prop
13 City Debt
Rate
San Mateo
Junior
College
San Carlos
Elementary
Sequoia
Union High
Belmont
Redwood
City
Redwood
Shore
Elementary
Mid‐
Peninsula
Regional
Open Space
San Mateo
Community
College
Total Direct
Overlapping
Tax Rate
Total
Direct
Rate*
2014 1.0000 0.10755 0.0084 0.0194 0.0775 0.0313 0.0945 ‐ ‐ 1.2311 0.11685 2015 1.0000 0.10803 0.0082 0.0190 0.0768 0.0433 0.0923 ‐ ‐ 1.2396 0.11840 2016 1.0000 0.10803 0.0042 0.0250 0.0725 0.0434 0.1005 0.0008 ‐ 1.2464 0.11424 2017 1.0000 0.10802 0.0040 0.0247 0.0646 0.0391 0.1198 0.0006 ‐ 1.2528 0.11379 2018 1.0000 0.10800 0.0038 0.0235 0.0643 0.0383 0.1194 0.0009 ‐ 1.2502 0.11346 2019

1.0000 0.10800 0.0037 0.0175 0.0600 0.0365 0.1125 0.0018 ‐ 1.2320 0.11460 2020 1.0000 0.10798 0.0032 0.0231 0.0604 0.0340 0.1071 0.0016 0.0035 1.2329 0.11317 2021 1.0000 0.10800 0.0023 0.0176 0.0559 0.0315 0.0949 0.0015 0.0037 1.2074 0.11219 2022 1.0000 0.10798 0.0023 0.0227 0.0542 0.0290 0.1010 0.0015 ‐ 1.2107 0.11207 2023 1.0000 0.10811 0.0023 0.0193 0.0487 0.0286 0.0838 0.0013 ‐ 1.1840 0.11221 Source:

San Mateo County Assessor 2013/14- 2022/23 Tax Rate Table ₁City's share of 1% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the city.

The ERAF portion of the City's Levy has been subtracted where known. *Total Direct Rate is the weighted average of all individual direct rates applied by the government preparing the statistical section information Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(Rate per $100 of Taxable Value)
CITY OF SAN CARLOS, CALIFORNIA

1.14 1.16

1.18 1.20

1.22 1.24

1.26 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total Direct and Overlapping Rates
151

8.e
November 27, 2023

Packet Pg. 211

2013‐2014
Taxpayer Assessed Value Rank
Percentage
of Total City
Assessed
Value Taxpayer Assessed Value Rank
Percentage
of Total City
Assessed
Value
Are‐San Francisco No. 63 LLC 622,462,606 1 4.00% Novartis Pharmaceuticals Group 157,876,558 1 2.06% SC Transit Village LLC Lessee 159,839,061 2 1.03% SPK ‐Skyway Landing LLC 73,331,069 2 0.95% BMR‐201 Industrial Rd LLC 130,917,173 3 0.84% BMR ‐201 Industrial RD LLC 39,774,175 3 0.52% BGOGC 150 Industrial Owner LLC 118,515,228 4 0.76% L‐3 Communications Corp 38,767,187 4 0.50% Hudson Skyway Landing LLC 118,264,511 5 0.76% Black Mountain Holdings LLC 36,098,44 8 5 0.47% San Carlos Partners LLC 116,660,200 6 0.75% Brittan Corners Shopping Center 24,238,825 6 0.32% Are‐San Francisco No. 92 Holding LLC 114,199,20 0 7 0.73% Kelly ‐Moore Paint Company 22,792,542 7 0.30% Equity One San Carlos LLC 104,508,405 8 0.67% Vica Capital LLC 22,440,000 8 0.29% GC Net Lease San Carlos Investors LLC 94,525,47 4 9 0.61% San Carlos Retail Venture LP 21,817,815 9 0.28% Are‐San Francisco No. 71 Holding LLC 76,946,26 9 10 0.50% ECI Two San Carlos LLC 19,540,756 10 0.25% Total Top 10 Taxpayers' Totals 1,656,838,127$ 10.66% 456,677,375$ 5.95% City's Total Assessed Valuation 15,543,455,731$ 100% 7,678,937,110$ 100% Source:

San Mateo County Assessor 2022/23 Combined Tax Rolls and the SBE Non Unitary Tax Roll Top Property Tax Payers Based on Net Values
2022‐2023
Principal Property Tax Payers
Current Fiscal Year and Ten Years Prior
CITY OF SAN CARLOS, CALIFORNIA

4.00%

1.03%

0.84%

0.76%

0.75%

0.73%

0.67%

0.61%

0.50%
Are‐San Francisco No. 63 LLC
SC Transit Village LLC Lessee
BMR‐201 Industrial Rd LLC
BGOGC 150 Industrial Owner LLC
Hudson Skyway Landing LLC
San Carlos Partners LLC
Are‐San Francisco No. 92 Holding LLC
Equity One San Carlos LLC
GC Net Lease San Carlos Investors LLC
Are‐San Francisco No. 71 Holding LLC
City's Top 10 Property Tax Payers 2022‐23
Percentage of Total City Assessed Value

2.06%

0.95%

0.52%

0.50%

0.47%

0.32%

0.30%

0.29%

0.28%

0.25%
Novartis Pharmaceuticals Group
SPK‐Skyway Landing LLC
BMR‐201 Industrial RD LLC
L‐3 Communications Corp
Black Mountain Holdings LLC
Brittan Corners Shopping Center
Kelly‐Moore Paint Company
Vica Capital LLC
San Carlos Retail Venture LP
ECI Two San Carlos LLC
City's Top 10 Property Tax Payers 2013‐14
Percentage of Total City Assessed Value
152

8.e
November 27, 2023

Packet Pg. 212

Fiscal Year Total Tax Levy
Current Tax
Collections
Percent of
Levy
Collected
Delinquent
Tax
Collection
Total Tax
Collections
Percent of
Total Tax
Collections to
Tax Levy
2014 8,879,658 8,757,878 98.63% 8,757,878 98.63% 2015 9,229,066 9,208,905 99.78% 9,208,905 99.78%
2016 9,744,532 9,693,04 7 99.47% 9,693,047 99.47%
2017 10,273,217 10,231,703 99.60% 10,231,703 99.60%
2018 9,804,156 9,807,155 100.00% 9,807,155 100.00%
2019 10,934,08 5 10,913,557 99.81% 10,913,557 99.81%
2020 11,428,769 11,413,29 6 99.86% 11,413,296 99.86%
2021 12,254,87 8 12,245,969 99.93% 12,245,969 99.93%
2022 13,029,89 7 12,992,668 99.71% 12,992,668 99.71%
2023 14,695,947 14,712,607 100.11% 14,712,607 100.11% Source
San Mateo County Assessor 2013/14 2022/23 Combined Tax Rolls 202223 County of San Mateo Estimated Property Tax Revenue

1. CITY OF SAN CARLOS, CALIFORNIA
Last Ten Fiscal Years
Property Tax Levies and Collections
In 1995 the County entered a "Teeter Plan" agreement with the City which allows the City to keep 100% of the secured taxes, and the County to keep all interest and delinquency charges collected. $0
$2
$4
$6
$8
$10
$12
$14
$16
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ Millions
Property Tax Collections
Total Tax Levy Total Tax Collections
153

8.e
November 27, 2023

Packet Pg. 213

Fiscal Year
General
Obligation Bonds
Public Library
ABAG Lease
Agreement
2015 Refunding
General Obligation
Bonds
Lease
Obligations
Total Primary
Government Debt
% of Personal
Income (a)
Outstanding
Debt Per Capita
2014 6,405,000$ 8,800,000$ ‐$ ‐$ 15,205,000$ 0.89% 520 2015 ‐ 8,800,000 4,600,000 ‐ 13,400,000 0.73% 455 2016 ‐ ‐ 4,190,000 ‐ 4,190,000 0.21% 144 2017 ‐ ‐ 3,940,000 ‐ 3,940,000 0.19% 134 2018 ‐ ‐ 3,805,704 ‐ 3,805,704 0.16% 127 2019 ‐ ‐ 3,501,181 ‐ 3,501,181 0.14% 117 2020 ‐ ‐ 3,166,658 ‐ 3,166,658 0.12% 105 2021 ‐ ‐ 2,787,135 ‐ 2,787,135 0.10% 93
2022 ‐ ‐ 2,382,612 3,959,368 6,341,980 0.20% 213 2023 ‐ ‐ 1,953,089 3,836,227 5,789,316 (a) 196 Sources:

City of San Carlos Debt Schedule
State of California, Department of Finance (population) U.S. Department of Commerce, Bureau of the Census (income) Debt amounts exclude any premiums, discounts, or other amortization amounts. (a) See Schedule (Demographic Statistics) for personal income and population data. Data for 2022 is not available.

CITY OF SAN CARLOS, CALIFORNIA
Ratio of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities
$0
$100
$200
$300
$400
$500
$600
$0
$2
$4
$6
$8
$10
$12
$14
$16
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ Millions
City's Debt
Total Primary Government Debt Outstanding Debt Per Capita 154

8.e
November 27, 2023

Packet Pg. 214

Fiscal
Year
2005 General
Obligation Debt
(1)
2015 Refunding
General Obligation
Bond *
Less: Amounts
Available in Debt
Service Fund (2) Total
Percentrage of
Assessed Value (3) Per Capita (4)
2014 6,405,000 ‐ 2,044,334 4,360,666 0.06% 149.24 2015 ‐ 4,774,273 725,393 4,048,880 0.05% 137.49 2016 ‐ 4,349,750 661,476 3,688,274 0.04% 127.15 2017 ‐ 4,085,227 739,933 3,345,294 0.04% 114.13 2018 ‐ 3,805,704 837,295 2,968,409 0.03% 99.29 2019 ‐ 3,501,181 956,071 2,545,110 0.02% 85.22 2020 ‐ 3,166,658 1,020,951 2,145,707 0.02% 71.18
2021 2,787,135 936,862 1,850,273 0.01% 62.06 2022 2,382,612 849,879 1,532,733 0.01% 51.37 2023 1,953,089 938,365 1,014,724 0.01% 34.40

1. This is the general bonded debt of governmental activities, net of original issuance discounts and premiums

2. This is the amount restricted for debt service principal payments

3. Assessed value has been used because the actual value of taxable property is not readily available in the State of California

4. Population data can be found in the Schedule of Demographic and Economic Statistics *Updated to include bond premium
General Bonded Debt Outstanding
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
CITY OF SAN CARLOS, CALIFORNIA
$‐
$20
$40
$60
$80
$100
$120
$140
$160
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
GO BOND OUTSTADNING DEBT PER CAPITAL
155

8.e
November 27, 2023

Packet Pg. 215

Fiscal Year
Net Revenue
Available for Debt
Service 2008 2009 2014 2015 2018 2020
Total Debt
Payment Coverage
2014 5,300,680 116,008 759,246 875,254 6.06 2015 6,514,209 118,707 757,204 558,039 1,433,950 4.54 2016 6,758,316 110,850 754,175 646,163 60,448 1,571,636 4.30 2017 7,509,125 750,113 645,494 463,400 1,859,007 4.04 2018 9,611,211 749,907 645,410 465,550 1,860,867 5.16 2019 9,802,430 743,691 645,745 471,000 1,419,459 3,279,895 2.99 2020 10,988,237 473,934 645,811 584,198 1,424,138 3,128,081 3.51 2021 10,596,556 646,146 924,750 1,423,138 2,994,034 3.54 2022 10,487,651 1,420,220 1,542,917 2,963,137 3.54 2023 11,894,221 1,422,750 1,559,760 2,982,510 3.99 Source
City of San Carlos Annual Financial Statements
San Carlos Sewer Fund SVCW 2008, 2009, 2014, 2015, 2018, 2020 Financing Agreements Pledged Revenue Coverage
Last Ten Fiscal Years
Financing Agreement

CITY OF SAN CARLOS, CALIFORNIA
$5.30
$6.51 $6.76
$7.51
$9.61 $9.80
$10.99 $10.60 $10.49
$11.89
$0.88 $1.43 $1.57 $1.86 $1.86
$3.28 $3.13 $2.99 $2.96 $2.98

2 4
6 8
10 12
14 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ Millions
Net Revenue Available for Debt Service Total Debt Payment 156

8.e
November 27, 2023

Packet Pg. 216

2022‐23 Assessed Valuation $15,447,440,355 Redevelopment Successor Agency Incremental Valuation $1,986,624,584 DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT
Total Debt
6/30/2023
Percentage
Applicable (1)
City's Share of
Debt 6/30/2023
San Mateo Community College District 708,837,622$ 5.356% 37,965,343$ Sequoia Union High School District 440,812,000 12.287% 54,162,570 Belmont‐Redwood Shores School District 71,262,859 4.597% 3,275,954 Belmond‐Redwood Shores School Facilities Improvement District 39,647,852 7.058% 2,798,345 Redwood Shores School Facilities Improvement District 17,640,000 1.065% 187,866 Redwood City School District 260,775,000 2.723% 7,100,903 San Carlos School District 100,663,117 96.683% 97,324,121 City of San Carlos 1,895,000 100% 1,895,000
Midpeninsula Regional Open Space District 82,680,000 4.017% 3,321,256 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT 1,724,213,450$ 208,031,359$ OVERLAPPING GENERAL FUND OBLIGATION DEBT:

San Mateo County General Fund Obligations 589,931,687$     5.356% 31,596,741$ San Mateo County Board of Education Certificates of Participation 6,120,000            5.356% 327,787 Midpeninsula Regional Park District General Fund Obligations 91,570,600          4.017% 3,678,391 San Mateo County Mosquito & Vector
Control District General Fund Obligations 3,617,831            5.356% 193,771 TOTAL OVERLAPPING GENERAL FUND  DEBT 691,240,118$     35,796,690$ OVERLAPPING TAX  INCREMENT DEBT (SUCCESSOR AGENCY) 8,923,614$          100% 8,923,614$ CiTY OF SAN CARLOS (LEASE OBLIGATIONS) 3,836,227$          100% 3,836,227$ TOTAL DIRECT DEBT 5,731,227
TOTAL OVERLAPPING DEBT 247,020,436
COMBINED TOTAL DEBT 252,751,663$        (2)
RATIOS TO 2022‐23 ASSESSED VALUATION:

Direct Debt (5,731,227) 5,731,227
Total Direct and Overlapping Tax and Assessment Debt 1.35% Combined Total Debt 1.64%
RATIOS TO REDEVELOPMENT SUCCESSOR AGENCY INCREMENTAL VALUATION ($1,986,624,584):

Total Overlapping Tax Increment Debt 0.45%
Source
California Municipal Statistics, Inc.

1. 2.

CITY OF SAN CARLOS, CALIFORNIA
Direct And Overlapping Debt
June 30, 2023
Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds, and non‐bonded capital lease obligations.

The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
157

8.e
November 27, 2023

Packet Pg. 217

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Secured property assessed
value, net of exempt real
property
$7,678,937 $7,964,970 $8,677,644 $8,895,382 $ 9,719,830   10,604,982$ 11,401,615$ 12,465,321$   13,380,845$   15,034,525$ Legal Debt Limit
Debit service limit (3.75% of
property assessed value ) (a)
287,960       298,686       325,412       333,577       364,494         397,687          427,561          467,450           501,782          563,795 Less: General Obligation
Bond 6,405 4,600 4,190 3,940 3,675 3,385 3,065 2,700 2,310 1,895 Legal debt margin $ 281,555     $ 294,086     $ 321,222     329,637 $     $ 360,819      394,302$       424,496$       464,750$         499,472$        561,900$ Total net debt applicable to
the limit as a percentage of
debt limit

2.27% 1.56% 1.30% 1.20% 1.02% 0.86% 0.72% 0.58% 0.46% 0.34% Source
County of San Mateo, Assessed Valuation Reports

1. CITY OF SAN CARLOS, CALIFORNIA
Computation of Legal Bonded Debt Margin
California Government Code Section 43605 sets the debt limit at 15%. The code section was enacted prior to the change in basing assessed value to full market value when it was previously 25% of market value. Thus, the limit shown as 3.75% is one‐fourth the limit to account for the adjustment of showing assessed valuation at full cash value.

Last Ten Fiscal Years
Fiscal year (in Thousands)
$‐
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Legal Debt Service Limit
Legal Debt Margin Debt Service Limit
158

8.e
November 27, 2023

Packet Pg. 218

Fiscal
Year
City
Population
Total Personal
Income (In
Thousands)
Personal
Income Per
Capita
Unemployment
Rate
San Mateo
Population
City
Population
% of
County
2014 29,219 1,717,440 $ $ 58,740 2.8% 745,193 3.92% 2015 29,449 1,824,271 62,888 3.3% 753,123 3.91% 2016 29,008 1,963,141 66,976 3.3% 766,041 3.79% 2017 29,311 2,063,967 69,035 2.9% 770,763 3.80% 2018 29,897 2,311,883 77,413 2.2% 774,155 3.86% 2019 29,864 2,525,541 83,779 2.3% 774,351 3.86% 2020 30,145 2,721,759 91,291 7.4% 773,244 3.90% 2021 29,814 2,822,721 94,604 4.0% 765,245 3.90% 2022 29,837 3,224,656 109,325 1.8% 744,662 4.01% 2023 29,496 (a) (b) 3.1% 737,644 4.00%
Source
Population: California State Department of Finance
Unemployment Data: California Employment Development Department Income Data : ESRI ‐ Demographic estimates are based on the last available census Demographic data is totaled from census Block Groups that overlap the City's boundaries

(a) & (b) Information is not available
Demographic And Economic Statistics
Last Ten Fiscal Years
CITY OF SAN CARLOS, CALIFORNIA

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%
$‐
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
City's Personal Income Per Capita
and Unemployment Rate
Personal Income Per Capita Unemployment Rate
159

8.e
November 27, 2023

Packet Pg. 219

Employer
Number of
Employees Rank
Percent of
Total City
Employment
Number of
Employees Rank
Percent of
Total City
Employment
NATERA INC 934 1 5.46% L ‐3 ELECTRON DEVICES 389 1 2.39% IOVANCE BIOTHERAPEUTICS, INC. 562 2 3.29% PACIFIC GAS & ELECTRIC CO 350 2 2.15% PACIFIC GAS & ELECTRIC CO 386 3 2.26% KELLY MOORE PAINT CO 267 3 1.64% JOBY AERO INC 257 8 1.50% NATERA INC 205 4 1.26%
THE HOME DEPOT #0628 241 4 1.41% DELTA STAR INC 188 5 1.15% DELTA STAR INC 200 6 1.17% WELLS FARGO INSURANCE SERVICES 185 6 1.13% CHEMOCENTRYX, INC 199 7 1.16% NOVARTIS PHARMACEUTICALS 172 7 1.06% PENINSULA COMPONENTS INC 178 10 1.04% CHECK POINT SOFTWARE 170 8 1.04% CHECK POINT SOFTWARE TECH INC 171 5 1.00% THE HOME DEPOT #0628 165 9 1.01% THOUGHT STREAM 130 9 0.76% GEORGE P JOHNSON COMPAN Y 150 10 0.92% Top 10 Employers 3258 19.05% 2241 13.75%
Total Employment of the City's Labor Force 17,100 16,300 Source
Data from City of San Carlos business license database
CITY OF SAN CARLOS, CALIFORNIA
Current Year and Ten Years Ago
2023 2014
Principal Employers
160

8.e
November 27, 2023

Packet Pg. 220

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Community Development 13 13 13 13 14 15 16 15 17 23
General Government 19 19 22 22 22 23 23 23 22 24
Parks & Recreation 12 9 9 9 10 10 10 8 11 13
Public Safety 1111111111
Public Works 23 26 27 27 27 28 31 30 31 37
Total Full Time Equivalent Personnel 68 68 68 72 72 74 77 77 82 98 Source
City budget document

1. Starting on October 31, 2010, County of San Mateo Sheriff's Office began providing police services to the City

2. The Belmont‐San Carlos Fire Department was dissolved on October 12, 2011.

3. CITY OF SAN CARLOS, CALIFORNIA
Adopted Budget Authorized Personnel For Fiscal Year Ended June 30 The City of Redwood City began providing full fire and emergency services including the transfer of the fire service personnel from the City of San Carlos to the City of Redwood City on July 1, 2013.

Full Time Equivalent City Personnel By Function
Last Ten Fiscal Years
0 5
10 15
20 25
30 35
40 Community
Development
General Government Parks & Recreation Public Safety Public Works City Personnel by Function
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
161

8.e
November 27, 2023

Packet Pg. 221

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Function/Program
Public safety:

Fire
Fire calls for servic
e 1,961 2,209 2,365 2,232 2,415 2,312 2,405 2,497 3,292 3,537 Primary fire inspections conducted 356 638 700 450 659 984 737 734 465 533 Police:

Communication Center calls answere
d
Police calls for Service 12,831 13,446 17,985 12,474 13,094 13,013 13,575 13,621 12,027 12,312 Law violations:

Part I and Part II crime
s 1,988 1,868 1,544 1,387 1,469 1,572 1,427 1,490 1,387 1,301 Physical arrests (adult and juvenile) 683 732 713 803 790 878 611 667 661 647 Traffic violations 3,224 3,260 2,599 1,843 2,347 5,389 3,765 3,487 3,771 4,296 Parking violations 3,609 6,613 4,794 8,014 4,706 11,020 5,734 3,947 4,194 5,601 Street
60 60 60 63 63 61 60 57 56 57
Sewer
Sewer service connections 11,107 11,000 11,017 11,017 11,033 11,010 11,010 11,061 10,905 10,946 Average daily flow (millions of gallons) 1.66          1.81          1.80          2.69 1.66 2.21 1.67 1.53 1.69 1.69 Maximum Allocated Treatment Capacity,
Average Dry Weather Flow (Millions of
Gallons) 4.47          4.39          5.18          4.90 4.39 4.39 4.39 4.39 4.39 4.39 Maximum Allocated Treatment Capacity,
Peak Wet Weather Flow (Millions of
Gallons) 14.30       15.96       25.00       14.30 14.30 14.3 14.3 14.3 15.9 15.9 Culture and recreation:

Community Services:

Adult Registrations 2,750 2,825 2,949 4,120 5,789 5,688 1,679 1,910 2,717 2,251 Tot/Youth Registrations 7,042 7,524 6,433 5,595 4,426 4,919 2,982 3,058 4,607 6,476 Facility Rentals 133 114 79 129 106 104 144 ‐ 96 144 Picnic Rentals 173 196 235 236 223 284 141 83 335 518
Organized Play Participants 6,761 7,222 7,900 7,985 7,856 7,922 5,925 4,618 8,003 8,120 Organized Play Hours Permitted 17,046 17,856 18,440 18,560 18,470 18,505 12,400 10,500 19,202 19,320 Source:

Various city department records
Pavement Condition Index
Last Ten Years
Operating Indicators by Function/Program
CITY OF SAN CARLOS, CALIFORNIA
162

8.e
November 27, 2023

Packet Pg. 222

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Function/Program
Public safety:

Fire stations 222222 2222
Police stations 111111 1111
Streets
Total Length (Miles) 87 87 87 87 87 87 87 87 87 87
Street lights 1,888 1,916 1,942 1,942 1,942 1,942 1,942 1,942 1,861 1,879 Intersections with Traffic Signals 21 21 21 21 22 22 22 22 24 24 Parking Lots
Number of City Parking Lots 444444 4444
Number of Public Parking Spaces 356 356 356 356 386 386 605 605 605 605 Number of Business Permits issued 91 91 91 91 13 68 122 120 189 205 Wastewater
Total Sewer Main Length (Miles) 104 105 105 105 105 105 105 105 105 105 Sewer Pump Stations 666666 6655
Manholes 2,677 2,677 2,677 2,677 2,677 2,677 2,677 2,677 2,677 2,949 Storm water
Catch basins/inlets 1,324 1,324 1,326 1,326 1,326 1,326 1,326 1,326 1,472 1,75 4 Stormwater Pump Stations 333333 3333
Manholes 579 579 579 579 579 579 579 579 579 579
Levees (Feet) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 550 General government:

City Hall 111111 1111
City Museum 111111 1111
Parks and recreation:

Parks (and associated buildings) 13 13 13 13 13 13 13 13 13 13 Community centers 222222 2222
Source
Various city department records
Last Ten Years
Capital Asset Statistics By Function/Program
CITY OF SAN CARLOS, CALIFORNIA
163

8.e
November 27, 2023

Packet Pg. 223

CITY COUNCIL

STAFF REPORT
MEETING DATE: November 27, 2023
ITEM TITLE: Accept the Fiscal Year 2023-24 First Quarter Financial Report for the Period Ending September 30, 2023.

RECOMMENDATION:

Staff recommends that the City Council accept the Quarterly Financial Report (“Report”) for the first quarter of fiscal year (FY) 2023-24 ended September 30, 2023.

FISCAL IMPLICATIONS:

There is no financial impact associated with accepting this Report.

BACKGROUND:

In May 2023, the City Council approved financial policies formalizing long standing practices. The policies were established to ensure that the City's finances are managed in a manner that will: (1) continue to provide for the delivery of quality services; (2) maintain and enhance service delivery as the community grows, in accordance with the General Plan; (3) guarantee a balanced budget annually assuring that the City is operating within its means; and (4) establish reserves necessary to meet known and unknown future obligations.

A key component of these policies includes the preparation of a quarterly financial report. This report provides an executive summary of the City’s current financial status as it relates to the adopted operating budget.

Attached is the Report for the first quarter that reflects the City’s overall General Fund financial position as of September 30, 2023. Included in the Report is an update on the General Fund balance, analysis of revenues earned to date, and expenses incurred for the first nine months of the fiscal year.

ANALYSIS:

Revenues
The Report for the first quarter is prepared on a cash basis, therefore only revenue received by September 30 is reflected. Since revenue is received on many different schedules depending on type, it is useful to compare the year-to-date (“YTD”) actual amounts to the prior year’s actual amounts.

Overall, fiscal YTD revenues were approximately $8.1 million, or $0.7 million and 7.6% lower than last year at the end of the first quarter, and represented 14.6% of budget. As discussed in the

8.f
November 27, 2023

Packet Pg. 224

attached Report, revenues from property tax, sales taxes, vehicle in lieu, and other revenue were lower than the prior year. This was primarily due to a smaller number of property transfer transactions, the continuing inflationary environment, shifting spending patterns and rising interest rates. Higher prices, due to inflation, continue to drive sales tax proceeds while sales volumes have diminished and the City received a higher countywide Vehicle License Fee (VLF) shortfall payment, relating to FY 2020-21, in the prior year.

Charges for services, other taxes, license and permits and use of money and property were higher compared to quarter one of last year. As discussed in the attached Report, this was due to the timing and receipt of permit revenue related to large-scale development projects, the continuing increase in tourism and travel activity, and higher interest rates on investment returns.

Expenditures
Expenditures are recorded when paid, using the cash basis method of accounting. Overall, expenditure was $15.6 million, or 25.1%, of the budget. Total expenses were $0.4 million higher than the first quarter of last year due to increases in the budget approved by the City Council in June 2023. These budget increases were attributable to program changes and additional staffing changes necessary to implement the strategic plan objectives, increases in the level of development activity, an increase in infrastructure projects, and the higher costs for contracted fire services from the City of Redwood City and law enforcement services from the San Mateo County Sheriff’s Office. Additional details can be found in the attached report.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Accept the Quarterly Financial Report for the first quarter of FY 2023-24 ended September 30, 2023; or

2. Do not accept the Quarterly Financial Report; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Rebecca Mendenhall, Administrative Services Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Q1 FY24 Financial Report

8.f
November 27, 2023

Packet Pg. 225

CITY OF SAN CARLOS

First Quarter of Fiscal Year 2023-24

The City has completed the first quarter of the fiscal year (“FY”) 2023-24 ended September 30, 2023. This report summarizes the activities of the City’s General Fund, which is the primary operating fund of the City and is used to account for most operating activities. This report is not meant to be inclusive of all finance and accounting transactions. It is intended only to provide the Council and the public with an overview of the state of the City’s general fiscal condition.

GENERAL FUND FINANCIAL POSITION
The General Fund is comprised of budgeted operating r evenues of $ 55,339,300 and operating expenditures of $62,072,850 for FY 2023-24. Expenditures in the General Fund account for direct services provided to the residents of San Carlos , including General Government services, Police s ervices, Fire services, Parks and Recreation, Community Development and Public Works.

TOP SEVEN GENERAL FUND REVENUES
The City’s seven main revenue sources accounted for approximately 93.2% of the General Fund’s year-to- date total operating revenue in FY 2023-24.

Overall, these key operating revenues largely performed as projected based on payment schedules , past trends, and the expect ation of continuing economic growth. Any significant variations in the different revenue categories compared to the first quarter of the prior year and the budget are noted below:
• Property tax. Most the City’s property taxes are received in December and April. The property taxes received through the first quarter were $40,000 less compared to the first quarter of last fiscal year due to a lower SB813 distribution from supplemental assessments in the first quarter. In addition, the number of property transfer transactions w as lower compared to the same period in the prior fiscal year.

Quarterly Financial Report

8.f
November 27, 2023

Packet Pg. 226

• Sales Tax. Revenues for the quarter were $ 226,000 lower than the same period of the prior year, mostly in the categories of autos and transportation, building and construction, fuel and service stations and general consumer goods. Due to the continued inflationary environment, shifting spending patterns and rising interest rates, prices were driving positive sales tax proceeds, while sales volumes have started to diminish.
• Charges for Services . Most of the revenues collected in this quarter were for recreation classes, special event sponsorships and fees, inspection fees, development fees, and building plan checks.

Revenue was at 46.5% of the full year’s budget and compared to the first quarter of the prior year, there was an increase of $396,000 mainly due to the collection of plan check fees from large development projects. Plan check and inspection fee revenues can vary from year to year due to the timing of large-scale development projects.
• Vehicle in-lieu (VLF). The revenue received in this fiscal year was $1,588,000 less than the prior year mainly due to receiving the county-wide shortfall from fiscal year 2020-21 in the prior year which was significantly higher than the shortfall received for FY2021-22 in August this year. • Other Taxes. These include Transient Occupancy Tax (“TOT”) and Franchise fees. Total revenue was $6,000 higher than in the first quarter of the prior year. The budgeted TOT revenues for the full year are $551,000 more than the prior year, anticipating a continued increase in tourism and travel activity.
• Licenses & Permits. Revenues were $794,000 greater than at the same point in the prior year and have achieved 65% of this year’s budget. Similar to Charges for Services, this revenue category can vary from year to year due to the timing of development projects. • Use of Money and Property . This revenue stream was $56,000 higher than in the first quarter of the prior year mostly due to higher interest rates on investment returns. • Other Revenues. This revenue category includes business registration fees, vehicle code fines, various cost reimbursements, and grants. It was $61,000 less compared to the first quarter of the prior year due to the timing of the receipt of the park maintenance cost reimbursement from San Mateo County, receipt of the emergency management services cost reimbursement from Redwood City Fire Department and more donations received for the Art and Wire Faire in the prior fiscal year.

GENERAL FUND EXPENDITURES
In June 2023, the City Council approved several program changes and additional staffing changes for FY 2023-24 that were necessary to implement the strategic plan objectives, support the continued high level of development activity, manage the infrastructure projects, and advance the increased communication needs. As a result, total expenditures for the first quarter of the current fiscal year were 2.6% higher than last year. As shown in the table below, expenditures are generally on target for the first quarter of the fiscal year. Any significant variations are noted below.

• General Government. Expenditures were $386,000 higher than the first quarter of the prior year due to the increase in professional services fees in FY 2023-24 to provide administrative support for a greater need for communication and outreach.
• Community Development. Expenditures were $ 196,000 greater than the prior year due to higher professional consulting services in FY 2023-24 budget to implement the strategic plan objectives and to support the greater workload related to the City’s development projects. • Fire. Expenditures were $26,000 greater than the first quarter of last fiscal year due to increases in costs for contracted fire services from the City of Redwood City. The increase was partially offset by lower annual pension payments related to the former Belmont San Carlos Fire Department .

8.f
November 27, 2023

Packet Pg. 227

• Police. Expenditures were less than the same period of last year by $456,000 due to a decrease in the annual pension payments to CalPERS. The decrease was partially offset by the cost increases in the contracted law enforcement services from the San Mateo County Sheriff’s Office. • Parks and Recreation. E xpenditures were $ 143,000 higher compared to last year mainly due to more programs, classes, and special community events.
• Public Works. Expenditures were $113,000 higher than the prior year primarily due to the addition of new positions to support the increase in infrastructure projects.

• Salaries and benefits. Expenditures were $349,000 less than in the first quarter of last year due to a decrease in the annual pension payments to CalPERS. The decrease was partially offset by the increases in staff-related expenditures as noted above. • Professional Services. Expenditures include payments to outside consultants related to fire and police protection, police dispatch services, planning consultants, legal and auditing services , and recreation instructors . Expenditures in this category were $704,000 higher than the prior year largely due to cost increases related to contracted fire and police services, development professional services contracts related to the City’s development projects, and the increase of recreation services and special community events in this fiscal year. • Other Operating. Expenditures were $63,000 higher in the first quarter when compared to the same period in the prior year , mainly due to increases in the annual grant program to the Community Foundation of San Carlos , field programs in Parks & Recreation, and research and advisory services.
• Capital Outlay costs were $10,000 less than last fiscal year due to equipment purchased in the previous year.

FOR MORE INFORMATION
This summary is based on detailed information produced by the City’s Finance Division. If you would like additional information or have any questions about this report, please call (650) 802-4213.

8.f
November 27, 2023

Packet Pg. 228

2 0
7 7

CITY COUNCIL

STAFF REPORT
MEETING DATE: November 27, 2023
ITEM TITLE: Accept the Fiscal Year 2023-24 First Quarter Investment Report for the Period Ending September 30, 2023.

RECOMMENDATION:

Staff recommends that the City Council review and accept the Quarterly Investment Report (“Report”) for the first quarter of fiscal year (FY) 2023-24 ending September 30, 2023.

FISCAL IMPLICATIONS:

There is no fiscal impact associated with accepting the Report.

BACKGROUND:

On June 26, 2023, the City Council approved the Annual Investment Policy (“Policy”) per Resolution No. 2023-081. In accordance with the Policy, the City Administrative Services Director is responsible for investing the unexpended cash used for funding operations of the City of San Carlos (“City”).

The investment of funds for the City is directed by the goals of safety, liquidity, and yield. The authority governing investments for municipal governments is set forth in the California Government Code, sections 53601 through 53686 (“Code”). Effective January 1, 2023, per section 53646 (b)(1) of the Code, the Investment Committee serving as the legislative body will have the quarterly reports for its review within forty-five (45) days following the end of the quarter.

Thus, this Report and its attachments are furnished for review and information.

Beginning in FY 2016-17, the City included the checking account balance as part of this Report.

Although a checking account is not a typical investment account, this balance is included to show the total cash on hand for the quarter. The City typically maintains $1 million to $3 million, and a larger balance at the end of the calendar year, in the checking account to meet cash disbursement needs. Transfers are usually made into the investment accounts during the quarter to account for receipts that exceed disbursements.

Investment Strategy
The City’s investment priorities, in order, are “safety, liquidity, and yield,” while meeting the cash flow needs of the City through prudent investment of unexpended cash.

Compliance with Policy
Historical cash flow trends are compared to current cash flow requirements on an ongoing basis to ensure the City’s investment portfolio will remain sufficiently liquid to enable the City to meet

8.g
November 27, 2023

Packet Pg. 229

2 0
7 7
all reasonably anticipated operating requirements. As of September 30, 2023, the portfolio contains sufficient liquidity to meet the next six months of expected expenditures by the City.

As of September 30, 2023, the City has no investment instruments with a maturity date longer than one year. All investments are in highly liquid accounts, using the State of California and County of San Mateo investment pools, and are in compliance with the Policy.

The primary objective of the Policy of the City of San Carlos is “safety of principal”. The permitted investments section of the Policy also states:

Local Agency Investment Fund (LAIF), which is a State of California managed investment pool, and San Mateo County Investment pool, may be used up to the maximum permitted by California State Law. A review of the pool/fund is required when they are part of the list of authorized investments, with the knowledge that the pool/fund may include some investments allowed by statute but not explicitly identified in this investment policy.

The City’s Investment Committee, consisting of Jeff Maltbie, City Manager; Inge Tiegel, City Treasurer; and Rebecca Mendenhall, Administrative Services Director, has reviewed and approved this Report.

ANALYSIS:

The Investment Portfolio (Attachment 1) indicates that on September 30, 2023, City funds in the amount of $187,507,544 were invested, producing a weighted average yield of 3.30% for this quarter. The amount in the checking account was $2,259,219. The Local Agency Investment Fund (“LAIF”), the City’s benchmark for comparison of investment yield, was 3.56% for the quarter. The investment yield, net of administrative fees, for the County Pool was 3.13%. The allocation of the investment portfolio balance to various City funds is included on page 3 of the attachment.

Below is a summary of the changes from the last quarter.

The portfolio balance at the end of the first quarter is $189,766,763, a decrease of approximately $1.2 million. The decrease in the portfolio balance was due to the timing of the cash receipts and cash payments. The City draws on the investment portfolio throughout the year for normal operating activity, typically with the more significant levels of draw occurring in the first quarter (July through September) and fourth quarter (April through June). The City’s cash position typically improves in late December and April due to the receipt of property tax collections from San Mateo County.

The decrease in the first quarter is also due to drawdowns for several major distributions: (1) City’s share of the annual CalPERS contribution for the former Belmont-San Carlos Fire Department of $1.9 million; (2) annual pre-payment of the Unfunded Accrued Liability (UAL) for the pension costs of $2.4 million; (3) $2.1 million payment to Redwood City Fire Department for

8.g
November 27, 2023

Packet Pg. 230

2 0
7 7
outsourcing fire services Q4 FY 2021-22; 4) $0.9 million operating expenditure contributions to Silicon Valley Clean Water; 5) $2.0 million principal and interest payment to Silicon Valley Clean Water bonds; 6) $1.1 million general liability and property member contribution to Plan JPA; 7) $1.3 million on vehicle replacement; and 8) $1.1 million on the Fire Station 16 Replacement project. These drawdowns were mostly offset by $3.2 million in sales taxes, and an $8.5 million building permit payment for 405 Industrial Road.

Below is a comparison of quarterly cash position for the past three years.

Below is a summary of the changes in the total investment interest earnings from the prior quarter.

The increase in interest earnings this quarter occurred due to higher interest rates compared to the prior quarter. Interest for the investment accounts was $1,547,337 and $65,203 for the checking account.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Accept the Quarterly Investment Report for the first quarter of Fiscal Year 2023-24 as of September 30, 2023; or

2. Do not accept the Report; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Rebecca Mendenhall, Administrative Services Director

8.g
November 27, 2023

Packet Pg. 231

2 0
7 7
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Q1 Investment Report FY 2023-24

8.g
November 27, 2023

Packet Pg. 232

CITY OF SAN CARLOS Historical GASB 31
Date Purchase Book % of Market Quarterly
Investment TypeAccount/CUSIP #Purchased Price ($) Qtr. Year-to-date Value ($) Portfolio Value ($)* Income

LIQUID ACCOUNTS
Checking Account 2,259,219$ 4.82% 4.82% 2,259,219$ 1% 2,259,219$ 65,203$ Investment Accounts
San Mateo County Pool-City of San Carlos112,625,276 3.13% 3.13% 112,625,276 59% 109,218,362 881,527 State of California LAIF-City of San Carlos74,882,268 3.56% 3.56% 74,882,268 40% 73,856,960 665,810 Total Liquid Accounts 187,507,544$ 3.30% 3.30% 187,507,544$ 99% 183,075,322$ 1,547,337$ Total for City of San Carlos 189,766,763$ 3.32% 3.32% 189,766,763 $ 100% 185,334,541$ 1,612,540$

* Note: Difference in value between Historical Value and Market Value may be due to timing of purchase. Investments in the investment pools may have been purchased when interest rates were lower or higher than the end date of this report. As interest rates increase or decrease, the value of the investment pools will decrease or increase accordingly. However, the interest rate fluctuations does not have impact to the City's balance in the investment pools. The market values are presented as a reference only.

Yield
%

INVESTMENT PORTFOLIO

CITY OF SAN CARLOS
September 30, 2023

8.g
November 27, 2023

Packet Pg. 233

Investment Portfolio Diversification
City of San Carlos Checking Account 2,259,219$ 1% City of San Carlos SM County Pool 112,625,276 59% City of San Carlos LAIF-General 74,882,268 40% Total 189,766,763$ 100%
City - Checking1%City - SMC Pool59%City - LAIF40%City - CheckingCity - SMC PoolCity - LAIFCity of San CarlosInvestment Portfolioas of September 30, 2023

8.g
November 27, 2023

Packet Pg. 234

Funds Cash Balance
% of Total
Balance
Capital Projects Funds (Fund 10, 14, 16, 18, 25, 26, 27, and 28) 63,908,320$ 33%
Sewer Fund (Fund 6) 39,726,062 21%
Housing Funds (Funds 29 and 31) 17,107,990 9% Facility/Infrastructure Improvements 23,441,500 12% General Fund Operations (includes checking account) 21,910,594 12% Unfunded Liabilities 7,000,000 4%
Economic Uncertainties Reserve 9,142,607 5% Strategic Property Acquisition 191,795 0% Special Revenue Funds and Library Debt Service (Funds 15, 17, 93 and 95) 3,879,505 2%
Internal Service Funds (Funds 32, 33, and 35) 2,106,296 1% Restricted by contract or outside party 1,352,094 1% Total 189,766,763$ 100%
City of San Carlos
Investment Allocations
as of September 30, 2023
33%21%9%12%12%4%5%0%2%1%1%Capital Projects Funds (Fund 10, 14, 16, 18, 25, 26, 27, and 28)Sewer Fund (Fund 6)Housing Funds (Funds 29 and 31)Facility/Infrastructure ImprovementsGeneral Fund Operations (includes checking account)Unfunded LiabilitiesEconomic Uncertainties ReserveStrategic Property AcquisitionSpecial Revenue Funds and Library Debt Service (Funds 15, 17, 93 and 95)Internal Service Funds (Funds 32, 33, and 35)Restricted by contract or outside party

8.g
November 27, 2023

Packet Pg. 235

City of San Carlos Investment Portfolio
Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 City - Checking 2,329,948 3,214,823 5,993,674 2,166,789 2,115,336 3,257,964 2,755,075 3,112,159 2,259,219 City - SM County Pool 74,839,584 81,871,382 84,355,059 96,365,828 92,597,140 106,000,261 105,745,654 114,209,600 112,625,276 City - LAIF 58,692,480 51,978,289 51,260,708 66,551,266 69,161,866 70,891,695 74,441,588 73,628,612 74,882,268 Total 135,862,013$ 137,064,494$ 141,609,441$ 165,083,883$ 163,874,342$ 180,149,920$ 182,942,317$ 190,950,371$ 189,766,763$ 0%10%20%30%40%50%60%70%80%90%100%Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23City of San Carlos Historical Summary of Investment Portfolio City - Checking
City - LAIF
City - SM CountyPool

8.g
November 27, 2023

Packet Pg. 236

Investment Accounts Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 San Mateo County Pool-City of San Carlos0.99% 0.88% 0.87% 0.91% 1.31% 1.45% 1.78% 2.12% 3.13% State of California LAIF-City of San Carlos0.24% 0.25% 0.27% 0.38% 1.33% 1.66% 1.99% 2.28% 3.56% Annualized Rate of Return

CITY OF SAN CARLOS

INVESTMENT ANNUALIZED RATE OF RETURN
September 30, 2023

0.00%0.50%1.00%1.50%2.00%2.50%3.00%3.50%4.00%Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23Investment Annualized Rate of ReturnSan Mateo County Pool-City of San CarlosState of California LAIF-City of San Carlos

8.g
November 27, 2023

Packet Pg. 237

CITY COUNCIL

STAFF REPORT
MEETING DATE: November 27, 2023
ITEM TITLE: Deny Claim of Gary Hunt.

RECOMMENDATION:

Staff recommends that the City Council deny the claim of Gary Hunt as recommended by the Sedgwick representative.

FISCAL IMPLICATIONS:

None for this action.

BACKGROUND:

This item is coming before the Council to act on the claim submitted by Gary Hunt. Staff recommends that the City Council deny the claim based on Sedgwick’s guidance.

The Tort Claims Act. California Government Code Sections 900, seq., mandates that all claims for money or damages against a public entity must be presented in writing to the public entity prior to filing suit. Generally, claims concerning personal injury, wrongful death, damage to personal property, or damage to crops must be presented to the public within six (6) months of the accrual of the claim. All other claims, principally claims on contracts and damage to real property, are subject to a one-year statute of limitations for presentation of the tort claim. Once a tort claim is received by the public entity, the entity has forty-five (45) days to act on the claim. A claim can be settled or rejected. If no action is taken within 45 days, the claim is deemed rejected by operation of law on the last day.

Claims Processing in San Carlos. When the City receives a claim, the claim is immediately forwarded to claims examiners at Sedgwick for investigation. After Sedgwick investigates the claim, Sedgwick provides a recommendation to the City on the handling of the claim. Depending on the nature of the claim, Sedgwick may also hire outside legal counsel for assistance.

About Sedgwick. Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. In July 2019, Sedgwick acquired York Risk Services Group (“York”). York was originally hired through the Pooled Liability Assurance Network Joint Powers Authority (“PLAN JPA”), and Sedgwick will continue claims administration services to provide claims administration services to the City. The City Council approved the City’s participation in the PLAN JPA (previously known as the Association of Bay Area Government Pooled Liability Assurance Network or “ABAG PLAN”) on November 27, 2017 and designated the Administrative Services Director and Senior Management Analyst as primary and alternate PLAN JPA Board members.

8.h
November 27, 2023

Packet Pg. 238

ANALYSIS:

Claimant Gary Hunt filed a claim against the City for damage to his apartment building. Claimant alleged that on January 2, 2023, a mudslide occurred on the hillside behind his property due to improper installation and/or the City’s failure to maintain a sewer line. The claimant sustained property damages as mud flowed onto his property.

Staff worked with Sedgwick and outside counsel in investigating this claim, and they have recommended formal rejection of this claim.

Council’s rejection of this claim does not prohibit staff or the staff of Sedgwick from continuing to work with the claimant to resolve the dispute.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Deny the claim of Gary Hunt; or

2. Do not deny claim of the Gary Hunt; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Rebecca Mendenhall, Administrative Services Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Hunt, G. Claim Form

8.h
November 27, 2023

Packet Pg. 239

8.h
November 27, 2023

Packet Pg. 240

8.h
November 27, 2023

Packet Pg. 241

8.h
November 27, 2023

Packet Pg. 242

8.h
November 27, 2023

Packet Pg. 243

8.h
November 27, 2023

Packet Pg. 244

8.h
November 27, 2023

Packet Pg. 245

8.h
November 27, 2023

Packet Pg. 246

8.h
November 27, 2023

Packet Pg. 247

8.h
November 27, 2023

Packet Pg. 248

CITY COUNCIL

STAFF REPORT
MEETING DATE: November 27, 2023
ITEM TITLE: Adopt a Resolution Approving the Winterization of the Landslides at Big Canyon Park behind 995 Crestview Drive and 3144 Brittan Avenue and Authorizing the City Manager to Execute a Public Projects Agreement with Brannon Corporation in the Amount of $110,220.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution approving the winterization of the landslides at Big Canyon Park behind 995 Crestview Drive and 3144 Brittan Avenue (“Project”); and authorizing the City Manager to execute a Public Projects Agreement with Brannon Corporation in the amount of $110,220.

FISCAL IMPLICATIONS:

There are no fiscal impacts associated with this recommendation and no additional funding is needed at this time.

Funding for the Project comes from C2318 for 995 Crestview Drive and C2319 for 3144 Brittan Avenue which has an available budget of approximately $965,750 and $1,442,500 respectively for Fiscal Year 2023-24.

BACKGROUND:

Hillsides along roadways and within open space parks such as Big Canyon and Eaton Parks, failed, slipped, and eroded due to the heavy rains which caused the soil and debris to move down the slopes during the January and March 2023 storms.

Staff retained ENGEO, Inc. to provide engineering services and prepare construction documents to repair the various hillsides that failed last winter.

ANALYSIS:

Permanent improvements to address each slide cannot begin until spring 2024, after the wet season has passed. Therefore, preventative measures will be installed to protect and prevent further sliding of the soil during wet season in these areas until the construction of permanent improvements can begin.

Staff recommends approving the winterization of the landslides and authorizing the execution of a public projects agreement.

8.i
November 27, 2023

Packet Pg. 249

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution approving the winterization of the landslides at Big Canyon Park behind 995 Crestview Drive and 3144 Brittan Avenue and authorizing the City Manager to execute a Public Projects Agreement with Brannon Corporation in the amount of $110,220; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Steven Machida, Public Works Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

8.i
November 27, 2023

Packet Pg. 250

RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

APPROVING THE WINTERIZATION OF THE LANDSLIDES AT BIG CANYON PARK BEHIND 995 CRESTVIEW DRIVE AND 3144 BRITTAN AVENUE AND AUTHORIZING THE

CITY MANAGER TO EXECUTE A PUBLIC PROJECTS AGREEMENT WITH BRANNON CORPORATION IN THE AMOUNT OF $110,220.

WHEREAS, hillsides along roadways and within open space parks such as Big Canyon and Eaton Parks, failed, slipped, and eroded due to the heavy rains which caused the soil and debris to move down the slopes during the January and March 2023 storms; and WHEREAS, staff retained ENGEO, Inc. to provide engineering services and prepare construction documents to repair the various hillsides that failed last winter; and WHEREAS, with the wet season beginning, permanent improvements that would address each slide will not be constructed until spring 2024; and WHEREAS, preventative measures will be installed to protect and prevent further sliding of the soil during the wet season in these areas until construction of permanent improvements can begin; and WHEREAS, staff recommends approving the winterization of the landslides and authorizing the execution of a public projects agreement.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council approves the winterization of the landslides at Big Canyon Park behind 995 Crestview Drive and 3144 Brittan Avenue; and authorizes the City Manager to execute a Public Projects Agreement with Brannon Corporation in the amount of $110,220.
* * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 27th day of November 2023, by the following vote:

AYES, COUNCILMEMBERS:______________________________________________ NOES, COUNCILMEMBERS:______________________________________________ ABSENT, COUNCILMEMBERS:______________________________________________ ________________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos

8.i
November 27, 2023

Packet Pg. 251

CITY COUNCIL

STAFF REPORT
MEETING DATE: November 27, 2023
ITEM TITLE: Adopt a Resolution Approving the Winterization of the Landslides at Big Canyon Park behind 3141-61 Melendy Drive, across from 270 Dartmouth Avenue, and at the Oakley Avenue Access Road; and Authorizing the City Manager to Execute a Public Projects Agreement with Redwood Engineering and Construction in the Amount of $105,406; and Authorizing a Contingency Budget in the Amount of $21,081.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution approving the winterization of the landslides at Big Canyon Park behind 3141-61 Melendy Drive, across from 270 Dartmouth Avenue, and at the Oakley Avenue Access Road (“Project”); and authorizing the City Manager to execute a public projects agreement with Redwood Engineering and Construction in the amount of $105,406; and authorizing a contingency budget in the amount of $21,081.

FISCAL IMPLICATIONS:

Funding for the additional landslides comes from the following projects: C2320 for 3141-61 Melendy Drive, C2321 for the area across from 270 Dartmouth Avenue, and C9531 for the Oakley Avenue Access Road, which have available budgets of approximately $1,445,625, $911,425, and $145,209, respectively for fiscal year (FY) 2023-24.

Project Costs
Big Canyon Park (behind 3141-61 Melendy) $74,246
270 Dartmouth Avenue $19,720
Oakley Avenue Access Road $11,440
Sub Total $105,406
20% Contingency $21,081
Total $126,487
BACKGROUND:

Staff retained ENGEO, Inc. to provide engineering services and prepare construction documents to repair the various hillsides that failed last winter.

8.j
November 27, 2023

Packet Pg. 252

ANALYSIS:

With the wet season beginning, permanent improvements that would address each slide will not be constructed until spring 2024. Preventative measures to winterize these areas will be installed to protect and prevent further sliding of the soil during the wet season in these areas until construction of permanent improvements can begin.

Staff recommends appropriating additional funds, approving the winterization of the landslides, and authorizing the execution of a public projects agreement.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution approving the winterization of the landslides at Big Canyon Park behind 3141-61 Melendy Drive, across from 270 Dartmouth Avenue, and at the Oakley Avenue Access Road; and authorizing the City Manager to execute a public projects agreement with Redwood Engineering and Construction in the amount of $105,406; and authorizing a contingency budget in the amount of $21,081; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Steven Machida, Public Works Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

8.j
November 27, 2023

Packet Pg. 253

RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

APPROVING THE WINTERIZATION OF THE LANDSLIDES AT BIG CANYON PARK BEHIND 3141-61 MELENDY DRIVE, ACROSS FROM 270 DARTMOUTH AVENUE, AND AT THE OAKLEY AVENUE ACCESS ROAD; AND AUTHORIZING THE CITY MANAGER TO

EXECUTE A PUBLIC PROJECTS AGREEMENT WITH REDWOOD ENGINEERING AND CONSTRUCTION IN THE AMOUNT OF $105,406; AND AUTHORIZING A CONTINGENCY BUDGET IN THE AMOUNT OF $21,081.

WHEREAS, hillsides along roadways and within open space parks such as Big Canyon and Eaton Parks, failed, slipped, and eroded due to heavy rains which caused the soil and debris to move down the slopes during the January and March 2023 storms; and WHEREAS, staff retained ENGEO, Inc. to provide engineering services and prepare construction documents to repair the various hillsides that failed last winter; and WHEREAS, due to the start of the wet season, permanent improvements that would address each slide will not be constructed until spring 2024; and WHEREAS, preventative measures will be installed to protect and prevent further sliding of the soil during wet season in these areas, until the construction of permanent improvements can begin; and
WHEREAS, staff recommends appropriating additional funds, approving the winterization of the landslides, and authorizing the execution of a public projects agreement.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council approves the winterization of the landslides at Big Canyon Park behind 3141-61 Melendy Drive, across from 270 Dartmouth Avenue, and at the Oakley Avenue Access Road; and authorizes the City Manager to execute a Public Projects Agreement with Redwood Engineering and Construction in the Amount of $105,406; and authorizes a contingency budget in an amount of $21,081. * * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 27th day of November 2023, by the following vote:

AYES, COUNCILMEMBERS:_______________________________________________ NOES, COUNCILMEMBERS:_______________________________________________ ABSENT, COUNCILMEMBERS:______________________________________________ ________________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos

8.j
November 27, 2023

Packet Pg. 254

CITY COUNCIL

STAFF REPORT
MEETING DATE: November 27, 2023
ITEM TITLE: Adopt a Resolution Authorizing the Submittal of Individual Grant Applications for all Grant Programs Administered by CalRecycle for which the City of San Carlos is Eligible and Authorizing the City Manager to Execute all Documents Necessary to Implement and Secure Payment.

RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution authorizing the submittal of individual grant applications for all grant programs administered by CalRecycle for which the City of San Carlos is eligible and authorizing the City Manager to execute all documents necessary to implement and secure payment.

FISCAL IMPLICATIONS:

There is no cost associated with this recommendation.

BACKGROUND:

Public Resources Code sections 48000 et seq. authorize the Department of Resources Recycling and Recovery (“CalRecycle”) to administer various grant programs in furtherance of the State of California’s efforts to reduce, recycle, and reuse solid waste generated in the state thereby preserving landfill capacity and protecting public health and safety and the environment.

CalRecycle has administered grant funding to the City from the Beverage Container City/County Payment Program (“Beverage Container Program”) and the Senate Bill (SB) 1383 Local Assistance Grant Program (“SB 1383 Grant”).

The City has received more than $77,000 over the last ten years from the Beverage Container Program for the purchase and placement of recycling receptacles downtown and in City parks. In addition, the City was awarded over $43,000 in 2022 from the SB 1383 Grant to implement SB 1383’s organic waste reduction requirements.

ANALYSIS:

The City seeks to apply for an additional SB 1383 Grant in the amount of $26,000 in 2023.

Pursuant to CalRecycle’s established procedures governing the administration of payment programs, the City cannot apply for any CalRecycle funding programs without a submittal authorization Resolution adopted by the City Council by December 20, 2023. If approved, the Resolution would be effective for five years from the date of adoption.

8.k
November 27, 2023

Packet Pg. 255

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution authorizing the submittal of individual grant applications for all grant programs administered by CalRecycle for which the City of San Carlos is eligible and authorizing the City Manager to execute all documents necessary to implement and secure payment; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Steven Machida, Public Works Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

8.k
November 27, 2023

Packet Pg. 256

RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

AUTHORIZING THE SUBMITTAL OF INDIVIDUAL GRANT APPLICATIONS FOR ALL

GRANT PROGRAMS ADMINISTERED BY CALRECYCLE FOR WHICH THE CITY OF

SAN CARLOS IS ELIGIBLE AND AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS NECESSARY TO IMPLEMENT AND SECURE PAYMENT.

WHEREAS, Public Resources Code sections 48000 et seq. authorize the Department of Resources Recycling and Recovery (“CalRecycle”) to administer various grant programs in furtherance of the State of California’s efforts to reduce, recycle and reuse solid waste generated in the state thereby preserving landfill capacity and protecting public health and safety and the environment; and
WHEREAS, in furtherance of this authority CalRecycle is required to establish procedures governing the application, awarding, and management of the grants; and WHEREAS, CalRecycle grant application procedures require, among other things, an applicant’s governing body to declare by Resolution certain authorizations related to the administration of CalRecycle grants.

NOW, THEREFORE, BE IT RESOLVED that the San Carlos City Council authorizes the submittal of applications to CalRecycle for all grants for which the City of San Carlos is eligible; and
BE IT FURTHER RESOLVED that the City Manager, or their designee, is hereby authorized and empowered to execute in the name of the City of San Carlos all grant documents, including but not limited to, applications, agreements, amendments, and requests for payment, necessary to secure grant funds and implement the approved grant project; and BE IT FURTHER RESOLVED that these authorizations are effective for five years from the date of adoption.
* * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 27th day of November 2023, by the following vote:

8.k
November 27, 2023

Packet Pg. 257

CITY COUNCIL

STAFF REPORT
MEETING DATE: November 27, 2023
ITEM TITLE: Receive a Report on Current Trail Projects.

RECOMMENDATION:

Staff recommends that the City Council receive an update on current trail projects.

FISCAL IMPLICATIONS:

There are no fiscal implications associated with this report.

BACKGROUND:

On January 27, 2023, the City Council held the annual Strategic Planning Retreat to discuss the City’s mission, vision, and core values, review strategic goals and objectives, and consider new priority areas for the upcoming year. Through City Council conversations, a new goal, “Recreational Opportunities,” was discussed and added as a goal for 2023. Under this goal, three objectives were identified. One objective under this goal is to assess new and existing opportunities to expand trails and trail connections with adjacent open space. This project aligns with the Council’s goal of improving and expanding trail access in the community.

Staff has been working on several efforts to continue to improve and expand trail access in the community including implementing the final portion of the San Carlos Hillside Trails Plan and other efforts identified in the Trails Connections Plan. These potential improvements and connections will benefit San Carlos in many ways, offering increased opportunities for health and wellness activities, because the community will be able to walk, run, or hike to additional open space parks and further distances than our current trails offer in Eaton and Big Canyon parks.

ANALYSIS:

Los Vientos Way Pedestrian Access into Pulgas Ridge Open Space Preserve Pedestrian access into Pulgas Ridge was first identified in the Potential Trails Connection Plan last updated in 2011 and was listed as the second highest priority trail connection. In early meetings with the City Council Trails Subcommittee, it was suggested that staff restart conversations with Midpeninsula Regional Open Space District (“Midpen”) to pursue this effort.

Currently, there is a locked access gate for maintenance and operations of the open space preserve. Modifications to the current configuration of the gate would require approval by Midpen’s Board. A one-foot “non-access easement” was granted to the City for public use and exists in front of the gate. On September 11, 2023, the City Council adopted a Resolution making findings that the public use of the one-foot wide “non-access strip” was to prohibit vehicular traffic, not pedestrian or hiking access. Additionally, the City hired a CEQA consultant who provided a

9.a
November 27, 2023

Packet Pg. 258

Notice of Exemption (NOE) for any potential impacts should access into the preserve be granted.

Following this Council action, a letter from the Mayor was sent to Midpen’s Board requesting that the gate be opened.

The City subsequently hosted a Community Meeting on November 7, 2023 at the Adult Community Center for residents to discuss this action. Approximately five residents who live adjacent to the proposed access spoke about their concerns related to parking, trash, and safety.

Approximately 20 residents in the community came and spoke in favor of the access, highlighting benefits such as the opportunities to connect with nature, promoting health and wellness, and building community. This meeting was also attended by the Assistant Manager of Midpen, Brian Malone. Mr. Malone indicated that this item is tentatively scheduled for Midpen to discuss at their Board meeting in February/March 2024.

Trillium Way Trailhead Easement
As part of the research into local trail opportunities, staff identified an easement that would allow new hiking access into Waterdog Lake and Open Space, a park within the Belmont park system, specifically connecting with the portion of the Finch Trail located in San Carlos. This 30’ wide easement was created in 1973 as part of the subdivision for Trillium Lane (located off Club Drive).

The easement has been surveyed, and it was determined that a retaining wall was constructed across the entire width of the easement some time between 2006 and 2014. Staff is currently looking into alternate options to access the easement. A CEQA consultant is also analyzing the potential environmental impacts and sensitive plant species at this connection. As seen in the image below, the yellow line below represents the approximate location of the connection.

Image 1. Trillium Connection
Devonshire Canyon Trails
In 2012, the San Carlos Hillside Trails Plan (“Trails Plan”) was adopted which addressed potential trail connections in the Devonshire Canyon Open Space area, Big Canyon Park, and Eaton Park.

9.a
November 27, 2023

Packet Pg. 259

As part of the Trails Plan process, an Initial Study and Mitigated Negative Declaration (IS/MND) for the proposed trails was adopted at the same time.

The Trails Plan identifies an approximate location of a connecting trail from Vista Park through Lot G on the lower side of Vista Park, and along the rear of the condominiums. The existing easement has been surveyed and is shown as a red line in Image 2 below.

Lot G
Lot G is located immediately adjacent to Vista Park. An existing public use easement for hiking purposes is located across the entire property of Lot G and links Vista Park to the existing 30’ wide trail easement located in Devonshire Canyon. Additionally, the City Attorney and the attorney for the Crestview Park Homeowners’ Association have been in discussion for the Lot G property to be acquired by the City.

Trail Design and Construction
The City has entered into a contract for trail design services with Roach & Campbell. Consultants will design a trail from Vista Park into Lot G to the end of the easement along the canyon. The preliminary design has been studied and as part of the mitigation measures found in the Mitigated Negative Declaration, the City will be studying potential sensitive plant species prior to completing the final design and construction. Due to the blooming periods of these potential species, this survey will not occur until spring/summer 2024. If sensitive plant species are found, there are various measures that could be taken to either reroute the trail or replant the species.

Construction of the trail is anticipated to begin in late summer/early fall 2024.

Image 2. Map of Existing and Proposed Easements and Trail Connections (Devonshire Canyon)

Top of the World Connection
Staff also identified a possible connection from the southern end of the existing 30’ wide trail easement in Devonshire Canyon up to a City-owned parcel on Crestview Drive (known as “Top

9.a
November 27, 2023

Packet Pg. 260

of the World”). Since this particular connection was not included in the original Trails Plan, a CEQA Consultant has been hired to prepare an Addendum to the Initial Study and Mitigated Negative Declaration for the Trails Plan. This connection would require that the City obtain an easement from the property owner and a Letter of Intent has been sent to the Homeowners’ Association. As the easement/land for this potential connection has not yet been obtained, nor has the environmental review been completed, it has not been included in the current design of the trail. This potential easement is shown in Image 2 (above) as the dashed yellow line.

Regional Trail Connection
Recognizing the unique opportunity to provide regional trail connections, San Carlos hosted a multi-jurisdictional meeting with Midpeninsula Regional Open Space District, County of San Mateo, City of Belmont, and the San Francisco Public Utilities Commission to discuss San Carlos as the missing connection into regional trail access from the south (Edgewood Park & Pulgas Ridge) into the County trails to the north of San Carlos. The discussed trail connection is identified in Image 3 below as the Eastern Ridge Boundary Trail in the San Mateo County Trail Master Plan and would link the Ralston Trail and the Sheep Camp Trail to the trails in the Pulgas Ridge Open Space Preserve.

To initiate a trail design, it needs to be determined who the lead agency will be to conduct the CEQA analysis. Staff will continue conversations with the County of San Mateo and San Francisco Public Utilities Commission to determine the next steps. Enthusiasm about the Eastern Ridge Boundary Trail was shared by all agencies.

Image 3. Portion of Regional Trails Map from the San Mateo County Trails Master Plan Respectfully submitted by:

Amy Newby, Parks & Recreation Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager

9.a
November 27, 2023

Packet Pg. 261

CITY COUNCIL

STAFF REPORT

MEETING
DATE:

November 27, 2023
ITEM TITLE: Consideration of Actions for the Proposed Pedestrian Mall:
i. Consider All Written Objections to the Establishment of the Proposed Pedestrian Mall on the 700 Block of Laurel Street Between Cherry and Olive Streets from Owners of Lands Abutting the Proposed Pedestrian Mall;
ii. Adopt a Resolution Establishing a Pedestrian Mall on the 700 Block of Laurel Street Between Cherry and Olive Streets to Vehicular Traffic under the Pedestrian Mall Law of 1960 or Alternatively Consideration of a Resolution Abandoning the Proceeding to Establish a Pedestrian Mall; iii. Consider All Claims of Legal Damage by Persons Owning, or Having a Legal or Equitable Interest in, Any Real Property Which Might Suffer Legal Damage by Reason of the Establishment of the Proposed Pedestrian Mall and in the Event of Such Claims, Consider a Resolution Directing the City Attorney or other Attorney Designated by the City Attorney to Bring an Action or Actions in the Superior Court for a Determination of Legal Damages; and
iv. Introduce an Ordinance Establishing a New Chapter 12.40 – Pedestrian Malls, in the San Carlos Municipal Code.

RECOMMENDATION:

Staff recommends that the City Council take the following actions for the proposed pedestrian mall:
i. Consider All Written Objections to the Establishment of the Proposed Pedestrian Mall on the 700 Block of Laurel Street Between Cherry and Olive Streets from Owners of Lands Abutting the Proposed Pedestrian Mall;
ii. Adopt a Resolution to Establish a Pedestrian Mall on the 700 block of Laurel Street between Cherry and Olive Streets to Vehicular Traffic under the Pedestrian Mall Law of 1960 or alternatively consideration of a Resolution abandoning the proceeding to establish a Pedestrian Mall;
iii. Consider All Claims of Legal Damage by Persons Owning, or Having a Legal or Equitable Interest in, Any Real Property Which Might Suffer Legal Damage by Reason of the Establishment of the Proposed Pedestrian Mall and in the Event of Such Claims, Consider a Resolution Directing the City Attorney or other Attorney Designated by the City Attorney to Bring an Action or Actions in the Superior Court for a Determination of Legal Damages; and

10.a
November 27, 2023

Packet Pg. 262

iv. Introduce an Ordinance establishing a new Chapter 12.40 regarding Pedestrian Malls in the Municipal Code.

FISCAL IMPLICATIONS:

There is no fiscal impact and no additional appropriation is needed at this time.

The initial cost of installation and rearrangement of bollards, restriping of the roadways, and minor traffic signal adjustments is estimated to be $50,000 and will come from the Streets Maintenance Operating Budget. Another fiscal impact would be if there are unresolved legal damage claims.

The cost of such litigation will depend on the nature of legal claims and whether resolution short of trial occurs.

After the creation of the Pedestrian Mall, funding for the improvements would need to be appropriated and assigned as a capital improvement project at a future date.

BACKGROUND:

In June 2020, the City Council approved a temporary parklet program on Laurel Street and San Carlos Avenue and temporary street closure of the 600 and 700 blocks of Laurel Street, (later reduced to just the 700 block). The temporary closure and parklet program is currently scheduled to expire on September 15, 2024.

On August 28, 2023, the City Council adopted Resolution 2023-108 (Attachment 4) declaring its intention to establish a year-round pedestrian mall on the 700 Block of Laurel Street between Cherry and Olive Streets, pursuant to the State Pedestrian Mall Act. The proposed configuration allows through east-west traffic to continue to flow on these streets.

The Resolution of Intent set a public hearing date of November 27, 2023, for the consideration of the street closure and creation of the pedestrian mall. Prior to the time set for the public hearing, abutting property owners and tenants may submit objections and may also file claims for damages.

ANALYSIS:

The initial public hearing is designed to provide property owners abutting on the proposed pedestrian mall, representing a majority of the frontage on the proposed pedestrian mall, to make written objection to the establishment of the proposed pedestrian mall. If a majority vote is received, the City Council is required to terminate the proceedings for at least one year.

Per the Pedestrian Mall Act, the proposed Resolution Establishing the Pedestrian Mall (Attachment 1) states that the City Council overrules any stated objections and will be establishing the pedestrian mall. As of the date this report was written, the City Clerk has not received any objections or protests. In the event majority protests are received, the Council must adopt a resolution abandoning the pedestrian mall, and a new effort cannot commence for one year.

The second public hearing relates to legal damages claimed. The Pedestrian Mall Law contemplates that there could be unresolved legal damage claims after the City Council has adopted a resolution to establish a pedestrian mall. If the City receives any legal damage claims, they must be resolved prior to the City establishing the pedestrian mall or adopting a pedestrian mall ordinance. In this event, the City Council is required to direct the City Attorney to institute a

10.a
November 27, 2023

Packet Pg. 263

legal action to resolve any such claims. If required, the attached Resolution (Attachment 2) provides such direction.

If the property owners do not submit legal damage claims in advance of the public hearing, then they waive their right to submit any future claims. Any claims received can be resolved or withdrawn prior to the conclusion of the hearing. As of the writing of this report, the City has not received any claims for legal damages related to the establishment of the pedestrian mall.

Additionally, the City has received comments from members of the public in support of and in opposition to the proposed pedestrian mall. The primary concerns stated in the comments include reduction in parking supply and reduced auto access for seniors and others with disabilities.

In order to implement the temporary street closures that are currently in place on segments of the 700 Block of Laurel Street, staff has used water-filled barricades to close the street to through traffic and has placed temporary traffic diversion signs on intersecting streets. A more permanent solution will need to be designed and constructed to support the conversion to pedestrian mall.

Staff will present two phases of capital improvements for the pedestrian mall at a future meeting.

The initial phase would cover the installation and rearrangement of bollards, restriping of the roadways, and minor traffic signal adjustments, and is anticipated to cost $50,000. An appropriation of funds and commencement of work on this phase will occur after the Ordinance approving the pedestrian mall goes into effect.

A second phase of improvements, which would be implemented in the future, would involve a complete redesign of the roadway segment and sidewalk areas to make a physical pedestrian mall. A much more extensive design process would be needed for these improvements. Staff estimates a cost of roughly $4 to $5 million to design and construct these improvements. How to pay for these improvements would be the subject of a future Council decision-making process and is not agendized at this time.

Procedural Process
The actions required to establish the mall are somewhat complicated procedurally. Initially, the Council should hold a public hearing to consider all protests of properties abutting the proposed mall. If a majority protest representing a majority of the frontage is not received, the Council can proceed to the adoption of the resolution establishing the pedestrian mall. If a majority protest is received, the Council must adopt a resolution abandoning the process for at least one year.

Once the pedestrian mall resolution is approved, the next step is a public hearing to consider legal damage claims. If no damage claims are received, the Council closes the hearing and proceeds to introduction of the pedestrian mall ordinance. If damage claims are received, and not accepted in full, the Council is required to adopt a resolution directing the City Attorney to file suit to adjudicate the claims.

The Pedestrian Mall Law of 1960 provides that once the Council adopts the resolution establishing the mall and all legal claims resolved, it can adopt an ordinance regarding the pedestrian mall.

The proposed Ordinance (Attachment 3) amends the Municipal Code to add a new chapter 12.40 that provides for the rules and regulations for the operation and use of the pedestrian mall. The pedestrian mall will be closed to all motorized vehicular traffic as defined, with exceptions for delivery, service, and maintenance vehicles during limited hours. An emergency access lane is required to be maintained at all times, free and clear of any furnishings to allow for fire, EMT and police access when needed.

The Ordinance is designed to be complementary with the City’s current codes for sidewalk dining, and temporary uses under Chapter 12.36, 18.23 and 18.31. Additional requirements specific to

10.a
November 27, 2023

Packet Pg. 264

the pedestrian mall include that the furnishings must be removable and not permanent, and can be removed for special events. The current temporary parklets under the temporary parklet program would expire as presently provided on September 15, 2024. The pilot program parklet would also continue until the Council sunsets that program.

If circumstances change, this Ordinance can be modified in the future. If damage claims are received, and not accepted in full, the Council is required to adopt a Resolution directing the City Attorney to file suit to adjudicate the claims. Adoption of the pedestrian mall Ordinance could occur as soon as December 11, 2023, and would become effective on January 10, 2024.

The Temporary Parklet Program and Pilot Parklet Programs are not before the Council this evening. The Pilot Parklet Program will continue as before the Covid-19 pandemic, while the Temporary Parklet Program in the city will continue until it expires on September 15, 2024.

To assist the Council regarding the hearings and actions to establish the Pedestrian Mall, a flow chart outlining the process is provided below:

Public
Hearing on
Protests
If Majority
Protest
If Insufficient
Protest
Yes No
Adopt Resolution
Abandoning
Pedestrian Mall
Adopt Resolution
Approving
Pedestrian Mall
Hearing on
Claims for
Damages
If Claims
Received If No Claims
Received
Adopt Resolution
Directing City
Attorney to File Suite
to Resolve Claims
Defer Ordinance
until Claims
Resolved
Introduce
Pedestrian Mall
Ordinance
Yes No

10.a
November 27, 2023

Packet Pg. 265

Environmental Determination
In accordance with California Environmental Quality Act (CEQA) Guidelines, the City has determined that this project is categorically exempt under Class 1: CEQA Exemption which was prepared and considered in March 2022. Additionally, the project is exempt as an “existing facility,” because the project consists of only minor alterations to an existing City street (CEQA Guidelines Section 15301, Class 1). Further, the project is exempt as closing the street to personal vehicles is “minor alterations to land,” with no significant physical alterations to the right of way (CEQA Guidelines Section 15304, Class 4). The proposed action is also exempt under the Public Resources Code section 21080.25 since it will improve pedestrian and bicycle facilities and not increase automobile capacity.

Notice Provided
All meeting noticing requirements were met.

Per the requirements of the State Pedestrian Mall Act, a copy of the Resolution of Intent to close the street (Attachment 4 to this staff report) was posted on the proposed street segments 90 days prior to the public hearing, mailed to all property owners and businesses abutting the street, and recorded at the San Mateo County Recorder’s office.

ALTERNATIVES:

The alternatives available to the City Council include:

1.i. Consider All Written Objections to the Establishment of the Proposed Pedestrian Mall on the 700 Block of Laurel Street Between Cherry and Olive Streets from Owners of Lands Abutting the Proposed Pedestrian Mall; and ii. Adopt a Resolution Abandoning the Proceeding to Establish a Pedestrian Mall; or

2.i. Consider All Written Objections to the Establishment of the Proposed Pedestrian Mall on the 700 Block of Laurel Street Between Cherry and Olive Streets from Owners of Lands Abutting the Proposed Pedestrian Mall; and ii. Adopt a Resolution Establishing a Pedestrian Mall on the 700 Block of Laurel Street Between Cherry and Olive Streets to Vehicular Traffic under the Pedestrian Mall Law of 1960; iii. Consider All Claims of Legal Damage by Persons Owning, or Having a Legal or Equitable Interest in, Any Real Property Which Might Suffer Legal Damage by Reason of the Establishment of the Proposed Pedestrian Mall and in the Event of Such Claims and Adopt a Resolution Directing the City Attorney or other Attorney Designated by the City Attorney to Bring an Action or Actions in the Superior Court for a Determination of Legal Damages; or

3.i. Consider All Written Objections to the Establishment of the Proposed Pedestrian Mall on the 700 Block of Laurel Street Between Cherry and Olive Streets from Owners of Lands Abutting the Proposed Pedestrian Mall; and ii. Adopt a Resolution Establishing a Pedestrian Mall on the 700 Block of Laurel Street Between Cherry and Olive Streets to Vehicular Traffic under the Pedestrian Mall Law of 1960; iii. Consider All Claims of Legal Damage by Persons Owning, or Having a Legal or Equitable Interest in, Any Real Property Which Might Suffer Legal Damage by Reason of the Establishment of the Proposed Pedestrian Mall and in absence of such claims; iv. Introduce an Ordinance Establishing a New Chapter 12.40 – Pedestrian Malls, in the San Carlos Municipal Code; or

4. Provide staff with alternative direction.

10.a
November 27, 2023

Packet Pg. 266

Respectfully submitted by:

Gregory Rubens, City Attorney
Steven Machida, Public Works Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution Establishing Pedestrian Mall (ii)

2. Resolution Directing the City Attorney to file suit to adjudicate claims (if any received) (iii)

3. Proposed Ordinance (iv)

4. Resolution of Intent 2023-108

5. General Public Comments received (not objections or claims for legal damages)

10.a
November 27, 2023

Packet Pg. 267

1 5
7 9
RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS ESTABLISHING A PEDESTRIAN MALL ON THE 700 BLOCK OF LAUREL STREET

BETWEEN CHERRY AND OLIVE STREETS TO VEHICULAR TRAFFIC UNDER THE PEDESTRIAN MALL LAW OF 1960.

WHEREAS, on August 28, 2023, the City Council of the City of San Carlos adopted Resolution 2023-108 declaring its intention to establish a pedestrian mall on the 700 block of Laurel Street, between Cherry and Olive Streets, while still maintaining through east-west traffic on theses streets, pursuant to the Pedestrian Mall Act of 1960 (California Streets and Highways Code Section 11000 et seq.); and
WHEREAS, the City Council set the date of November 27, 2023 as the public hearing for hearing claims of damages, protests, and objections to the establishment of the pedestrian mall; and
WHEREAS, the City completed the required public noticing of Resolution 2023-108, which included posting copies of the Resolution on the street proposed to be established as pedestrian mall, mailing copies of the Resolution to all property owners and tenants located along the proposed pedestrian mall; and
WHEREAS, the City Council held the public hearing on November 27, 2023, on the establishment of the pedestrian mall; and
WHEREAS, the City did not receive written objections from landowners representing the majority of the frontage on the proposed pedestrian mall; and WHEREAS, no claims of damages by reason of the establishment of the pedestrian mall were made or filed prior to the hour set for the public hearing; and WHEREAS, at said public hearing, evidence, both written and oral, was given pertaining to the establishment of the pedestrian mall and all persons desiring to be heard were fully heard; and
WHEREAS, the City Council has weighed the benefits to be derived from the establishment of the pedestrian mall, overrules the objections, and has determined that the pedestrian mall on the 700 Block of Laurel Street, between Cherry and Olive Streets shall be established by adoption of an ordinance.

NOW, THEREFORE, the San Carlos City Council hereby resolves,

1. Pursuant to the Pedestrian Mall Act of 1960 (California Streets and Highways Code Section 11000 et seq.), the City Council of the City of San Carlos hereby establishes a pedestrian mall located on the 700 Block of Laurel Street between Cherry and Olve Streets. The pedestrian mall is shown on Exhibit A, attached hereto and incorporated by reference. Vehicular through-traffic shall remain available on the intersecting streets of Cherry and Olive Streets.

10.a
November 27, 2023

Packet Pg. 268

1 5
7 9

2. The City completed an Initial Study/Negative Declaration, adopted by the City Council on March 2022, that adequately assessed the environmental impacts of the proposed pedestrian mall. No potentially significant impacts on the environment have been identified.

3. The City Council hereby finds that objections to the establishment of the pedestrian mall were not submitted by a majority of the abutting property owners.

4. The City Council hereby finds that no claims of damages were filed prior to the hour set for the public hearing in accordance with California Streets and Highways Code Section 11304.

5. The City Council hereby finds and determines that the public interest and convenience require the establishment of the pedestrian mall described in Resolution 2023-108 and that vehicular traffic will not be unduly inconvenienced thereby.

6. This Resolution takes effect upon the effective date of an ordinance prohibiting vehicular traffic on the proposed pedestrian mall except for emergency and utility maintenance vehicles which shall be allowed access at all hours and garbage and delivery vehicles which shall be allowed access between the hours of 1 a.m. to 10 a.m. The ordinance will add Municipal Code Chapter 12.40 (Pedestrian Malls) to establish related rules and regulations.

7. The City will fund any improvements to the pedestrian mall at a future date, which could include bollards, planters, or other traffic blocking devices. * * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 27th day of November, 2023, by the following vote:

10.a
November 27, 2023

Packet Pg. 269

RESOLUTION NO. 2023 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

DIRECTING THE CITY ATTORNEY, OR OTHER ATTORNEY DESIGNATED BY THE CITY

ATTORNEY TO BRING AN ACTION OR ACTIONS IN THE SUPERIOR COURT FOR A DETERMINATION OF LEGAL DAMAGES.

WHEREAS, the City Council set the date of November 27, 2023, as the public hearing for hearing claims of damages, protests, and objections to the establishment of the pedestrian mall; and

WHEREAS, the City completed the required public noticing of Resolution 2023-108, which included posting copies of the resolution on the street proposed to be established as pedestrian mall, mailing copies of the resolution to all property owners and tenants located along the proposed pedestrian mall, and recording the Resolution with the office of the County Recorder; and

WHEREAS, the City Council held the public hearing on November 27, 2023, on the establishment of the pedestrian mall; and

WHEREAS, the City did not receive written objections from landowners representing the majority of the frontage on the proposed pedestrian mall although some written objections were received; and

WHEREAS, the City received written claims of legal damages by reason of the establishment of the pedestrian mall prior to the hour set for the public hearing; and WHEREAS, the City Council determined that a pedestrian mall shall be established at the hearing; and

WHEREAS, Streets and Highways Code Section 11400 provides that if following the hearing the legislative body determines that the pedestrian mall shall be established, and if at that time there remain any written claims for damages which have not been allowed pursuant to Section 11310 or which have not been withdrawn, the legislative body shall direct that an action or actions be brought in the superior court in the name of the city by the county counsel, district attorney, or city attorney, as the case may be, or other attorney designated by the legislative body for a determination of the damages, if any, to which the claimant may legally be entitled because of the establishment of the pedestrian mall.

NOW, THEREFORE, BE IT FOUND, DETERMINED AND RESOLVED BY THE CITY COUNCIL THAT:
a. The above recitals are incorporated by this reference.

10.a
November 27, 2023

Packet Pg. 270

b. Pursuant to Streets and Highways Code Section 11400, the City Council directs that an action or actions be brought in the superior court in the name of the city by the city attorney, or other attorney designated by the city attorney for a determination of the damages, if any, to which the claimant may legally be entitled because of the establishment of the pedestrian mall.
* * * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of San Carlos at a scheduled meeting thereof held on the 27th day of November 2023, by the following vote:

10.a
November 27, 2023

Packet Pg. 271

ORDINANCE NO. ____

AN ORDINANCE OF THE CITY OF SAN CARLOS
ESTABLISHING CHAPTER 12.40 - PEDESTRIAN MALLS, TO TITLE 12 - STREETS, SIDEWALKS AND PUBLIC PLACES, IN THE SAN CARLOS MUNICIPAL CODE.

SECTION 1. Findings. The City Council of the City of San Carlos does hereby finds and declares as follows:

WHEREAS, after conducting a Public Hearing on November 27, 2023, the City Council of the City of San Carlos adopted Resolution 2023- ___ establishing a pedestrian mall on the 700 block of Laurel Street, between Cherry and Olive Streets while still maintaining through east-west traffic on these same streets, pursuant to the Pedestrian Mall Law of 1960 (California Streets and Highways Code Section 11000 et seq); and
WHEREAS, the Resolution will go into effect as of the effective date of this Ordinance; and
WHEREAS, the City wishes to amend the Municipal Code to add a new chapter establishing rules and regulations prohibiting vehicular traffic and governing the use of the pedestrian mall.

NOW, THEREFORE the Council of the City of San Carlos ordains as follows:

Section 1. Chapter 12.40 “Pedestrian Malls” of the San Carlos Municipal Code is added as follows:

12.40.010 Definitions
Emergency Vehicle Access Lane means the designated area of the Pedestrian Mall that shall be clear of all obstructions as determined by the Public Works Director or designee.

Pedestrian Malls means streets, or portions thereof, on which vehicle traffic is restricted in whole or in part and which is to be used exclusively or primarily for pedestrian travel.

Motorized Vehicular Traffic means vehicular traffic powered by motor, including without limitation, automobiles, trucks, buses, motorcycles, motor or e-scooters.

12.40.020 Boundaries
Pedestrian malls are established along the following boundaries, excluding the east-west traffic on the intersecting streets:
(a)700 block of Laurel Street between Cherry Street and Olive Street

12.40.030 Prohibition of Vehicular Traffic
All motorized vehicular traffic is prohibited on a pedestrian mall subject to the following exceptions:
(a) Emergency vehicles and equipment of all types;

10.a
November 27, 2023

Packet Pg. 272

(b) Public utility vehicles and equipment;
(c) Garbage/recycling trucks operating on their established routes; (d) Sweepers, trucks or other vehicles or equipment operated by or at the direction of the Public Works Director, or designee, for the purpose of performing City services on a pedestrian malI (e) Commercial vehicles and equipment entering a pedestrian mall during hours to be established by the Public Works Director, or designee, where such entry is reasonably necessary for the purpose of making deliveries of mail, merchandise, or goods or equipment to the business establishments occupying property abutting on the pedestrian mall and where such deliveries cannot be made to said business establishments through entrances other than those on the pedestrian mall; and
(f) Commercial vehicles and equipment entering a pedestrian mall where such entry is reasonably necessary for the purpose of performing work or services on the pedestrian mall or on private property or properties abutting thereon and where the owner or operator of any such vehicle or equipment holds a permit issued by or at the direction of the Public Works Director, or designee. (g) Vehicles exiting from the 799 Laurel Street parking area and driveway to reach Olive Street where such vehicular exit is reasonably necessary and where the property owner holds a permit issued by or at the direction of the Public Works Director, or designee.

12.40.040 Riding on sidewalks and pedestrian malls—Prohibited. (a) It is unlawful for any person to ride or operate a bicycle, motor driven cycle or motor scooter upon any sidewalk.
(b) It is unlawful for any person to ride or operate a bicycle, motor driven cycle or motor scooter upon any overhead pedestrian crossing over any street, or on a roadway, state highway or state freeway that is signed for pedestrian use only within the city. (c) It is unlawful for any person to ride or operate a bicycle, motor driven cycle or motor scooter upon any pedestrian mall, except in the portion designated as a bike path.

12.40.050 Permits for Use of Pedestrian Mall
(a) Business establishments occupying property abutting on a pedestrian mall may apply for a revocable encroachment permit from the Public Works Director or designee in accordance with Chapter 12.36 to use the portion of the pedestrian mall fronting their property for the purpose of restaurant seating and/or outdoor merchandise display, provided they meet the requirements set forth in the permit, including indemnity and insurance requirements, and the following conditions:
(1) Furniture and fixtures placed within a pedestrian mall shall not be permanently attached and shall be removable to allow for the full extent of the pedestrian mall to be used for the purpose of permitted celebrations and special events, required maintenance, or other City purposes and must be removed at the request of the Public Works Director or designee within 48 hours of receiving notice.

10.a
November 27, 2023

Packet Pg. 273

(2) Encroachment Areas. The physical extent of the encroachment may be required to be clearly delineated by physical means as part of the encroachment permit and designed to be decorative, durable, removable and minimize tripping hazards. (3) Interference with Emergency Vehicle Access Lane. Furniture and fixtures placed under an encroachment permit shall not be placed within emergency vehicle access lane of the pedestrian mall.
(4) Site Maintenance. Restaurant seating areas and outdoor merchandize display areas shall be maintained in a sanitary manner, free of litter, refuse, and debris. Such areas shall be in compliance with San Mateo County Division of Environmental Health requirements.

The area shall be swept, scrubbed and mopped to remove any spilled food or drink stains on the mall surface on a daily basis. Such cleaning shall be performed in accordance with the City's Stormwater Management and Discharge Control Program, which prohibits any discharge other than stormwater into the stormwater drainage system. Failure to maintain the site shall be cause for termination of the encroachment permit. (5) Encroachment Fee. The applicant shall pay an annual fee in the amount set forth in the City's adopted Fee Schedule.
(6) Accessibility. Restaurant seating and merchandise display areas shall meet accessibility requirements for the disabled under the Americans with Disabilities Act and other similar laws, and shall allow safe passage of pedestrians. Umbrellas or other moveable sunshading fixtures shall maintain a minimum of seven-foot ground clearance. (7) No Vested Rights. Encroachment permits shall be revocable in the discretion of the Public Works Director or designee. The Encroachment Permit shall not constitute a use permit or other entitlement that runs with the land.
(8) Other Conditions. The Director of Public Works or designee may impose other reasonable conditions deemed necessary for the safe and efficient operation of a pedestrian mall.
(9) Parklets with Existing Encroachment Permits. Notwithstanding the above, Parklets with encroachment permits granted as of the effective date of this Ordinance under the Pilot Parklet Program or the temporary parklet program shall remain in effect until the termination of the applicable program.
(b) Special Events and temporary uses on a pedestrian mall may be permitted pursuant to Chapters 12.01, and 18.31 and Section 18.23.240
SECTION 2: Severability. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council of the City of San Carlos hereby declares that it would have adopted this ordinance and such section, subsection, sentence, clause, phrase or portion may be declared invalid or unconstitutional.

10.a
November 27, 2023

Packet Pg. 274

SECTION 3: Publication and Effective Date. This Ordinance shall be published and posted according to law and shall take effect and be in force from and after 30 days after its passage and adoption.
* * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Ordinance was introduced on the 27th day of November, 2023 and passed and adopted as an Ordinance of the City Council of the City of San Carlos at a regular meeting thereof held on the ____ day of ____, 2023 by the following vote:

AYES, COUNCILMEMBERS: ____________________________________________________ NOES, COUNCILMEMBERS: ___________________________________________________ ABSENT, COUNCILMEMBERS: _________________________________________________ ________________________________
CITY CLERK of the City of San Carlos
APPROVED:
____________________________
MAYOR of the City of San Carlos

10.a
November 27, 2023

Packet Pg. 275

10.a
November 27, 2023

Packet Pg. 276

10.a
November 27, 2023

Packet Pg. 277

10.a
November 27, 2023

Packet Pg. 278

700
Block
of
Laurel
St

01 NOTES
fE]Block
Numbers
Exhibit
A
a
Driveway
Limit
Line
Street
Closure
Page
4 of
13 10.a
November 27, 2023

Packet Pg. 279

Public Comments Received
in Response to the
Pedestrian Mall
(as of November 22, 2023)

10.a
November 27, 2023

Packet Pg. 280

1 From: Starmie Taylor
Sent: Wednesday, October 4, 2023 11:41 AM
To: Crystal Mui
Subject: San Carlos Downtown Pedestrian Mall
[NOTICE: This message originated outside of City of San Carlos ‐‐ DO NOT CLICK on links or open attachments unless you are sure the content is safe.]
Hello Ms. Mui,
My husband and I have lived in San Carlos since 1988. We have watched San Carlos change through the years; some changes have been acceptable and help ful, but some have not been acceptable and helpful, at least to us.

When I was younger, I would have had no issue with the pedestrian mall downtown San Carlos. But, since I am older and handicapped now, I have issues with the loss of parking spaces and ease of accessibility to certain stores on Laurel Street. And, the parki
ng garage does not help the handicapped.

Often there are not enough back door parking spaces to aid in accessibility.

Has the city considered more handicapped parking spaces on Laurel and behind stores? Has the city considered a free handicap shuttle that runs inside the pedestrian mall on Laurel? Ha s the city considered making restaurants move their
outdoor seating areas off Laurel and creating the space being the businesses in the “alleyways” and restoring Laurel Street to its original design?
I would appreciate hearing from you.

Thanks,
Starmie Taylor
‐‐‐‐‐‐‐‐‐‐
This email ha
s been scanned for spam and viruses by Proofpoint Essentials. Visit the following link to report this email as spam:
hƩps://us2.proofpointessenƟals.com/index01.php?mod_id &mod_op Ɵon=gitem&report=type�syspam&k=&payloadS 616c7465645f5f520f12638066c206ce24a1be5cda0302c457abcb65e85e316c04ba56fa2fb12386d9f3f3423cfdc2bd43647 b85fa4d1b3fa77cc932df5fd0a437e4113383a8b4fc337d14a044c2ff1c399d096d8e5ef468a8911ff22018382cda61b9b67fb c4006608656901d3db45ad0c3b612ceba3a0859dee3755b12097bd82f032be2f87aae693875a4334292b48fdf039da21f7f 8609b88706d2ba48

10.a
November 27, 2023

Packet Pg. 281

10.a
November 27, 2023

Packet Pg. 282

From: Brian Morearty
To: *City Clerk"s Office
Subject: Support for the formation of the pedestrian mall Date: Saturday, November 11, 2023 6:53:09 PM
[NOTICE: This message originated outside of City of San Carlos -- DO NOT CLICK on links or open attachments unless you are sure the content is safe.] Hello,
My contact information is or . I live at ,
I am not a building owner on the 700 Block of Laurel Street, but am a San Carlos resident.

I support the formation of the pedestrian mall. I've lived in San Carlos for 25 years. My wife and I raised our children here. Laurel Street is walking distance from our home and we love walking there. Since the pandemic, when the 700 block was temporarily closed, we've really enjoyed the feel of that block. I think making it a permanent change would allow the city to make visual improvements to make it an even more attractive and pleasant place to walk. I also appreciate the parklets on Laurel. Even though most people are ignoring the risk of COVID now, I still feel safer with outdoor dining. I'm assuming the pedestrian mall would allow outdoor dining to stay.

I'm sure some store owners are concerned about shopping or parking access. On the few occasions when I've driven instead of walked, I didn't notice increased difficulty in parking from before.

Thanks,
Brian Morearty

This email has been scanned for spam and viruses by Proofpoint Essentials. Click here to report this email as spam.

10.a
November 27, 2023

Packet Pg. 283

CITY COUNCIL

STAFF REPORT
MEETING DATE: November 27, 2023
ITEM TITLE: Consideration of Introducing an Ordinance Amending San Carlos Municipal Code Title 18 – Zoning: Sections 18.15 – General Site Regulations, 18.21 – Performance Standards, and 18.28 – Zoning Clearance, for Consistency with the County of San Mateo’s Comprehensive Airport Land Use Compatibility Plan for the Environs of San Carlos Airport.

RECOMMEDATION:

The Planning and Transportation Commission recommends that the City Council hold a public hearing and introduce an Ordinance amending the City of San Carlos’ Municipal Code, Title 18, Zoning, Sections 18.15 – General Site Regulations, 18.21 – Performance Standards, and 18.28 – Zoning Clearance for consistency with the Comprehensive Airport Land Use Compatibility Plan for the Environs of San Carlos Airport.

FISCAL IMPLICATIONS:

No fiscal impacts are associated with this project.

BACKGROUND:

In 1967, California adopted legislation requiring the establishment of airport land use commissions in counties with one or more airports serving the general public. Subsequent amendments to the legislation required each commission to develop airport land use compatibility plans for the environs of the airports (California Public Utilities Code, Article 3.5, Section 21670).

The City/County Association of Governments of San Mateo County (C/CAG), in its designated role as the Airport Land Use Commission for San Mateo County, is the lead agency responsible for preparing the Comprehensive Airport Land Use Compatibility Plan for the Environs of San Carlos Airport (“ALUCP”). State law requires cities to have their general plans, specific plans, and land use regulations be consistent with the ALUCPs (California Government Code, Section 65302.3). The ALUCP that addresses the airport in the City of San Carlos was comprehensively updated and adopted in 2015; subsequent amendments were adopted in 2022. Because the City of San Carlos updated its Zoning Ordinance in early 2023, C/CAG requested amendments to San Carlos’ Zoning Ordinance to bring it into compliance with the most recent version of the ALUCP.

Specifically, C/CAG requested amending the City’s Zoning Ordinance to include procedures to implement and ensure compliance with the ALUCP policies.

Based on C/CAG’s recommendations, City staff is proposing amendments to the City of San Carlos’ Municipal Code, Title 18, Zoning, Sections 18.15 – General Site Regulations, 18.21 –

10.b
November 27, 2023

Packet Pg. 284

Performance Standards, and 18.28 – Zoning Clearance for consistency with the ALUCP (See Exhibit A of Attachment 1 for proposed Zoning Ordinance amendments).

The proposed amendments were reviewed by Airport Land Use Committee and C/CAG Board of Directors (C/CAG Board), pursuant to California Public Utilities Code (CPUC) Section 21676(b).

At its meeting on October 12, 2023, and on recommendation of Airport Land Use Committee, the C/CAG Board acting as Airport Land Use Commission determined the proposed amendments to be conditionally consistent with the ALUCP, subject to recommended modifications (See Attachment 3 for C/CAG’s Resolution with recommended modifications). The proposed Zoning Ordinance amendments include C/CAG’s recommended modifications (See Exhibit A of Attachment 1 for proposed Zoning Ordinance amendments).

At its meeting on Nov 6, 2023, the Planning and Transportation Commission reviewed the proposed amendments and adopted a resolution recommending that the City Council hold a public hearing and introduce an ordinance to amend the Zoning Ordinance for consistency with the ALUCP.

ANALYSIS:

To address the ALUCP’s required compatibility areas regarding Noise, Safety, and Airspace Protection, including Disclosures and Overflight Notification, the Zoning Ordinance is proposed to be amended as listed in Table 1 below.

Table 1. Amendments* to San Carlos’ Zoning Ordinance
Description Section
1 General Site Regulations 18.15
2 Noise (Performance Standards) 18.21.050
3 Airport Land Use Compatibility Plan Consistency (Performance Standards)

18.21.150
4 Zoning Clearance 18.28
*Note: proposed amendments are consistent with C/CAG’s recommendations.

1. Section 18.15, General Site Regulations, is amended to require conformance with the ALUCP standards as described in the amended and expanded Section 18.21.150, Airport Land Use Compatibility Plan Consistency, where applicable.

2. Section 18.21.050, Noise, is amended to require acoustic study when a proposed project creates an inconsistency with the standards in ALUCP as referred to in the amended and expanded Section 18.21.150, Airport Land Use Compatibility Plan Consistency.

3. Section 18.21.150, Airspace Protection, is renamed to Airport Land Use Compatibility Plan Consistency and amended to include procedures that require conformance to standards and requirements for each of the compatibility areas noted above, provides real estate disclosure language to be used, and indicates the relevant sections of the ALUCP for property owner, applicant, or reviewers.

10.b
November 27, 2023

Packet Pg. 285

a. Safety: The Zoning Ordinance amendment would establish a section requiring review of all projects subject to the ALUCP to be reviewed for consistency with the safety standards and policies contained in the ALUCP. For proposed language, see Section 18.21.150 A. Safety Compatibility Evaluation. b. Airspace Protection: The Zoning Ordinance amendment would establish sections requiring review of all projects subject to the ALUCP to be reviewed for the applicable standards and policies contained in the ALUCP. For proposed language see Section 18.21.150 B. Airspace Protection Evaluation and 18.21.150 F. Federal Aviation Administration (FAA) Requirements.
c. Noise: The Zoning Ordinance amendment would establish a section requiring review of all projects subject to the ALUCP to be reviewed for consistency with uses listed as conditionally compatible in the ALUCP and the noise standards and policies contained in the ALUCP. For proposed language see Section 18.21.150 C. Airport Noise Evaluation and Mitigation.
d. Real Estate Disclosures: The Zoning Ordinance amendment would establish sections requiring all projects that are subject to the ALUCP to require Overflight Notification and Real Estate Disclosure as set forth by the ALUCP. For proposed language see Section 18.21.150 D. Airport Real Estate Disclosure Notices and

18.21.150 E. Overflight Notification Requirement.
e. Local Agency Override of Airport Land Use Commission Determination and Required Disclosures: In addition to subsections that relate to compatibility areas within the ALUCP, the amended Section 18.21.150 includes provisions for the City Council to override an Airport Land Use Commission Determination (Section

18.21.150, E. Local Agency Override of an Airport Land Use Commission Determination); and a section that gives City the authority to require disclosures from the property owners in the event where the City Council decides to override an Airport Land Use Commission determination (Section 18.21.150, F. Required Disclosures).

4. Section 18.28, Zoning Clearance, is amended to require conformance with the Airport Land Use Compatibility Plan standards as described in the amended and expanded Section 18.21.150, Airport Land Use Compatibility Plan Consistency, where applicable.

Environmental Review.

No additional environmental review is required pursuant to Public Resources Code Section 21166 and California Environmental Quality Act (CEQA) Guidelines Section 15162.

Planning and Transportation Commission Recommendation.

10.b
November 27, 2023

Packet Pg. 286

ALTERNATIVES:

The options available to the City Council include:

1. Introduce an Ordinance Amending San Carlos Municipal Code Title 18 – Zoning: Sections

18.15 – General Site Regulations, 18.21 – Performance Standards, and 18.28 – Zoning Clearance, for Consistency with the County of San Mateo’s Comprehensive Airport Land Use Compatibility Plan for the Environs of San Carlos Airport; or

2. Do not introduce the proposed Ordinance; or

3. Provide alternative direction.

Respectfully submitted by:

Al Savay, Community Development Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENTS:

1. Proposed Ordinance
Exhibit A - Amendments to Zoning Ordinance

2. Planning and Transportation Commission Resolution PTC2023 - 21

3. C/CAG Consistency Determination Resolution 23-90

4. Proof of Public Notice

10.b
November 27, 2023

Packet Pg. 287

ORDINANCE NO. ____

AN ORDINANCE OF THE CITY OF SAN CARLOS
AMENDING SAN CARLOS MUNICIPAL CODE TITLE 18 – ZONING: SECTIONS 18.15 – GENERAL SITE REGULATIONS, 18.21 – PERFORMANCE STANDARDS, AND

18.28 – ZONING CLEARANCE, FOR CONSISTENCY WITH THE COUNTY OF SAN MATEO’S COMPREHENSIVE AIRPORT LAND USE COMPATIBILITY PLAN FOR THE ENVIRONS OF SAN CARLOS AIRPORT.

SECTION 1: The City Council of the City of San Carlos does ordain as follows:

WHEREAS, the State Law (California Public Utilities Code, Article 3.5, Section 21670) requires the establishment of airport land use commissions in counties with one or more airports serving the general public and development of airport land use compatibility plans for the environs of the airports; and
WHEREAS, the City/County Association of Governments of San Mateo County (C/CAG), in its designated role as the Airport Land Use Commission for San Mateo County, is the lead agency responsible for preparing the Comprehensive Airport Land Use Compatibility Plan for the Environs of San Carlos Airport (“ALUCP”); and
WHEREAS, State Law (California Government Code, Section 65302.3) requires cities to have their general plans, specific plans, and land use regulations be consistent with the ALUCPs; and
WHEREAS, on January 23, 2023, the City Council of the City of San Carlos adopted amendments to the San Carlos Zoning Ordinance, consisting of changes to building heights; and WHEREAS, subsequently C/CAG requested amendments to San Carlos’ Zoning Ordinance to bring it into compliance with the ALUCP as amended in 2015 and 2022; and WHEREAS, responding to C/CAG’s request, City staff submitted C/CAG with draft amendments to the City of San Carlos’ Municipal Code, Title 18, Zoning, Sections 18.15 – General Site Regulations, 18.21 – Performance Standards, and 18.28 – Zoning Clearance for consistency with the ALUCP; and
WHEREAS, on October 12 th, the C/CAG Board of Directors, acting as the Airport Land Use Commission, determined the proposed draft amendments to be conditionally consistent with the ALUCP, subject to recommended modifications; and
WHEREAS, City staff has accepted C/CAG’s recommended modifications and included these in the attached proposed amendments to Zoning Ordinance (Exhibit A: Proposed Zoning Ordinance Amendments); and
WHEREAS, pursuant to Government Code Sections 65853 and 65850 and San Carlos Municipal Code Chapter 18.35.050, when a change in the Zoning Ordinance (Title 18 of the San Carlos Municipal Code) is found necessary, the Planning and Transportation Commission shall hold a public hearing to consider such change and render its decision to the City Council; and

10.b
November 27, 2023

Packet Pg. 288

WHEREAS, pursuant to pursuant to San Carlos Municipal Code Chapter 18.35.050 and the California Government Code Sections 65090 and 65091 a Planning and Transportation Commission Public Hearing Notice was published on October 26, 2023 in the newspaper; and WHEREAS, on November 6 th, 2023, pursuant to San Carlos Municipal Code Chapter

18.35, the Planning and Transportation Commission adopted Resolution No. PTC2023-21 recommending to the City Council adoption of Zoning text amendments, and including the reasons for the recommendation, and the relationship of the proposed amendment to the applicable General Plan pursuant to Chapter 18.35.

SECTION 2:

WHEREAS, pursuant to Public Resources Code, Section 21166 and California Environmental Quality Act (CEQA) Guidelines, Section 15162, no additional environmental review is required; and
WHEREAS, the City Council desires to make findings for the proposed amendments to the San Carlos Municipal Code Title 18 Zoning Ordinance relative to implementation of the 2030 General Plan.

SECTION 3: The City Council makes the following findings:

A. Regarding CEQA.

1. This action implements the programs and policies of the San Carlos 2030 General Plan, is within the scope of the activities and impacts identified in San Carlos 2030 General Plan Program Environmental Impact Report (EIR) and no new environmental effects have been found and no new mitigation is necessary. Therefore, no additional environmental review is required pursuant to Public Resources Code Section 21166 and California Environmental Quality Act (CEQA) Guidelines Section 15162.

B. Relative to Section 18.35.080, of the San Carlos Municipal Code Zoning title text amendment findings:

1. The ordinance amendment is consistent with the General Plan.

The 2030 General Plan constitutes a comprehensive, long-term document capable of guiding the future development of the city; meets all the requirements for such plans as contained in the Planning and Zoning Law (Government Code, sections 65300-65303.4) and other laws; and was prepared and adopted in accordance with the requirements of Planning and Zoning Law (Government Code, sections 65350-65362) by the City Council on October 12, 2009. The San Carlos Zoning Ordinance as adopted by the City Council on November 28, 2011, and subsequently amended thereafter, is the primary document that implements the provisions of the General Plan. There must be consistency between the two documents. The proposed amendments ensure the City has procedures codified in its Zoning Ordinance that require conformance with the ALUCP and its elements (Noise, Safety, Airspace Protection including Disclosures and Overflight Notification) that consider evaluation and mitigation of the potential impacts to air quality, noise levels and

10.b
November 27, 2023

Packet Pg. 289

sensitive land uses, thus remaining consistent with the City of San Carlos’ Zoning Ordinance and General Plan; and

2. The ordinance amendment is consistent with the purpose of the Zoning Title to promote the growth of the city in an orderly manner and to promote and protect the public health, safety, peace, comfort and general welfare.

The proposed amendments include provisions for compliance with the ALUCP that includes elements on Noise, Safety, and Airspace Protection including Disclosures and Overflight Notification that promotes development that is sensitive to its location in the environs of the San Carlos Airport and protects the health, safety, peace and general welfare of the public.

SECTION 4: Severability. That the City Council hereby declares that it would have passed this Ordinance sentence by sentence, paragraph by paragraph, and section by section, and does hereby declare that any provisions of this Ordinance are severable and, if for any reason any sentence, paragraph or section of this Ordinance shall be held invalid, such decision shall not affect the validity of the remaining parts of this Ordinance.

SECTION 5: Publication. This Ordinance as set forth in Exhibit “A” shall be published and posted according to law and shall take effect from and after 30 days after its passage and adoption.
* * * *
I, City Clerk Crystal Mui, hereby certify that the foregoing Ordinance was introduced on the 27th day of November, 2023 and passed and adopted as an Ordinance of the City Council of the City of San Carlos at a regular meeting thereof held on the ____ day of ________, 2023 by the following vote:

A.Amendments to Title 18 -Zoning: Sections 18.15 – General Site Regulations, 18.21 – Performance Standards, and 18.28 – Zoning Clearance

10.b
November 27, 2023

Packet Pg. 290

1 PROPOSED AMENDMENTS TO THE CITY OF SAN CARLOS ZONING ORDINANCE VERSION: OCTOBER 20, 2023

18.15 GENERAL SITE REGULATIONS
Amendments to 18.15 (Establish Section 18.15.140)

18.15.140 Airport Land Use Compatibility Plan Consistency. Where required, conformance with applicable Airport Land Use Compatibility Plan standards, as described in Section

18.21.150 Airport Land Use Compatibility Plan Consistency is required.

18.21 PERFORMANCE STANDARDS
Amendments to 18.21.050

18.21.050: Noise:

C. Acoustic Study. The Director may require an acoustic study for any proposed project that could cause any of the following:

1. Locate new residential uses within the fifty-five CNEL impact area of the San Carlos Airport;

1. Create an inconsistency with the noise requirements of the San Carlos Airport as defined in Section 18.21.150 Airport Land Use Compatibility Plan Consistency; a. Where applicable, noise attenuation measures may be required.

2. Cause noise levels to exceed the limits in Table 18.21.050-A;

3. Create a noise exposure that would require an acoustic study and noise attenuation measures listed in Table 18.21.050-B, Noise Exposure—Land Use Requirements and Limitations; or

4. Cause the Ldn at noise-sensitive uses to increase three dBA or more.

10.b
November 27, 2023

Packet Pg. 291

PROPOSED AMENDMENTS TO THE CITY OF SAN CARLOS ZONING ORDINANCE FOR ALUC REVIEW Version October 20, 2023

2 F. Airport Land Use Compatibility Plan Consistency. Where required, conformance with applicable Airport Land Use Compatibility Plan standards, as described in Section 18.21.150 Airport Land Use Compatibility Plan Consistency, is required.

Amendments to 18.21.150

18.21.150 Airspace protection.

The following applies within airport influence area (AIA) B as adopted by the San Mateo County Airport Land Use Commission and subsequent revisions thereto, for the environs of San Carlos Airport.

A. Federal Airspace Protection Surfaces. Maximum height of structures shall not penetrate the civil airport imaginary surfaces as defined by the Federal Aviation Administration in (FAA) Title 14 CFR Part 77, Surfaces.

B. Flight Hazards. Proposed land use actions that include land uses that may cause visual, electronic, or wildlife hazards may be permitted only if the uses are consistent with FAA rules and regulations. Proof of consistency with FAA rules and regulations must be provided to the Airport Land Use Commission by the sponsor of the proposed land use action. Specific characteristics that may create hazards to aircraft in flight and which shall be prohibited include:

1. Sources of glare, such as highly reflective buildings or building features, or bright light, including searchlights or laser displays, which would interfere with the vision of pilots;

2. Distracting lights that could be mistaken for airport identification lighting, runway edge lighting, runway end identification lighting, or runway approach lighting;

3. Sources of dust, smoke, water vapor, or steam that may impair visibility;

4. Sources of electrical interference with aircraft communications or navigation equipment;

5. Any use that creates an increased attraction for wildlife, particularly large flocks of birds, that is inconsistent with FAA rules and regulations. (Ord. 1438 § 4 (Exh. A (part)), 2011)

18.21.150 San Carlos Airport Land Use Compatibility Plan Consistency.

This section establishes standards and requirements related to consistency within the County of San Mateo’s Comprehensive Airport Land Use Compatibility Plan for the Environs of San Carlos Airport (ALUCP). The ALUCP outlines the following requirements and criteria for proposed development projects, alterations, or change of use that are subject to the ALUCP:

A. Safety Compatibility Evaluation. All proposed development projects, alterations, or change of use subject to the ALUCP will be reviewed for consistency with the County of San Mateo’s Safety Compatibility Policies of the ALUCP. Project applicants shall be required to evaluate

10.b
November 27, 2023

Packet Pg. 292

PROPOSED AMENDMENTS TO THE CITY OF SAN CARLOS ZONING ORDINANCE FOR ALUC REVIEW Version October 20, 2023

3 potential safety issues if the property is located within any of the Safety Compatibility Zones established in the ALUCP.

B. Airspace Protection Evaluation. All proposed development projects, alterations, or change of use subject to the ALUCP will be reviewed for consistency with Airspace Protection Policies of the ALUCP. These include Notice of Proposed Construction or Alteration, Maximum Compatible Building Height and Other Flight Hazards and avigation easement requirements of San Carlos ALUCP Airspace Protection Policy 7.

C. Airport Noise Evaluation and Mitigation. All proposed development projects, alterations, or change of use subject to the ALUCP will be reviewed for consistency with the noise policies of the ALUCP, including the avigation easement requirements of San Carlos ALUCP Noise Policy

7. Uses listed as “conditionally compatible” in the ALUCP will be required to mitigate impacts to comply with the interior noise standards established in the ALUCP or General Plan, whichever is more restrictive.

D. Airport Real Estate Disclosure Notices. Proximity to the airport could affect allowable development and uses. All proposed developments, alteration, or change of use that are subject to the ALUCP are required to comply with the real estate disclosure requirements of State law (California Business and Professions Code Section 11010(b)(13)). The following statement by the seller must be included in the notice of intention to offer the property for sale or lease:
“Notice of Airport in Vicinity. This property is presently located in the vicinity of an airport, within what is known as an airport influence area. For that reason, the property may be subject to some of the annoyances or inconveniences associated with proximity to airport operations (for example: noise, vibration, or odors). Individual sensitivities to those annoyances can vary from person to person. You may wish to consider what airport annoyances, if any, are associated with the property before you complete your purchase and determine whether they are acceptable to you.” E. Overflight Notification Requirement. All new residential development projects, other than additions and accessory dwelling units (ADUs), within Overflight Notification Zone 2 shall incorporate a recorded overflight notification requirement as a condition of approval in order to provide a permanent form of overflight notification to all future property owners, consistent with ALUCP Overflight Policies.

F. Federal Aviation Administration (FAA) Requirements. Proof of consistency with FAA rules and regulations must be provided through one of the following ways:

1. A Federal Aviation Administration Review Not Required Form must be signed prior to issuance of building permit.

2. Receive a determination of No Hazard by the FAA after submittal of FAA Form 7460-1 Notice of Proposed Construction. Instructions and additional information on Form 7460 can found within the ALUCP and on the FAA’s Website.

10.b
November 27, 2023

Packet Pg. 293

PROPOSED AMENDMENTS TO THE CITY OF SAN CARLOS ZONING ORDINANCE FOR ALUC REVIEW Version October 20, 2023

4 G. Local Agency Override of an Airport Land Use Commission Determination. A process under which the City Council may overrule certain Airport Land Use Commission determinations under certain circumstances is established in Sections 21675.1(d), 21676(b) and 21676(c) of the Public Utilities Code and outlined in the ALUCP.

H. Required Disclosures. In the event of local override action of an Airport Land Use Commission determination, disclosures may be required from property owners as a condition of approval for any use listed as conditional in the ALUCP Noise or Safety Compatibility Zone that corresponds with the site of the proposed project, including childcare, congregate care facilities, etc. Property owners are encouraged to provide appropriate notices to their tenants.

18.28 ZONING CLEARANCE
Amendments to 18.28.030

18.28.030 Review and decision. Before the City may issue any business license, building permit, subdivision approval, or lot line adjustment, the Director shall review the application to determine whether the use, building, or change in lot configuration complies with all provisions of this title or any design review, use permit or variance approval and that all conditions of such permits and approvals have been satisfied.

A. Application. Applications and fees for a zoning clearance shall be submitted in accordance with the provisions set forth in Section 18.27.020, Application forms and fees. The Director may request that the zoning clearance application be accompanied by a written narrative, plans and other related materials necessary to show that the proposed development, alteration, or use of the site complies with all provisions of this title and the requirements and conditions of any applicable use permit or variance approval.

B. Determination. If the Director determines that the proposed use or building is allowed as a matter of right by this title, and conforms to all the applicable development and use standards, the Director shall issue a zoning clearance. An approved zoning clearance may include attachments of other written or graphic information, including but not limited to statements, numeric data, site plans, floor plans and building elevations and sections, as a record of the proposal’s conformity with the applicable regulations of this title.

C. Airport Land Use Compatibility Plan Consistency. When applicable, zoning clearance for any proposed development, alteration or change of use that is subject to the ALUCP shall include an applicability determination of Section 18.21.150 Airport Land Use Compatibility Plan Consistency. Where required, the applicant shall seek a consistency determination with Section

18.21.150.

10.b
November 27, 2023

Packet Pg. 294

PROPOSED AMENDMENTS TO THE CITY OF SAN CARLOS ZONING ORDINANCE FOR ALUC REVIEW Version October 20, 2023

5 CD Exceptions. No zoning clearance shall be required for the continuation of previously approved or permitted uses and structures, or uses and structures that are not subject to any building or zoning regulations. (Ord. 1438 § 4 (Exh. A (part)), 2011)

10.b
November 27, 2023

Packet Pg. 295

RESOLUTION NO. PTC2023-21

A RESOLUTION OF THE PLANNING AND TRANSPORTATION COMMISSION OF THE CITY

OF SAN CARLOS RECOMMENDING CITY COUNCIL ADOPTION OF AMENDMENTS TO THE SAN CARLOS MUNICIPAL CODE, SECTIONS 18.15 - GENERAL SITE REGULATIONS, 18.21 - PERFORMANCE STANDARDS, AND 18.28 — ZONING CLEARANCE FOR CONSISTENCY WITH THE COUNTY OF SAN MATEO’S

COMPREHENSIVE AIRPORT LAND USE COMPATIBILITY PLAN FOR THE ENVIRONS OF SAN CARLOS AIRPORT.

WHEREAS, the State Law (California Public Utilities Code, Article 3.5, Section 21670) requires the establishment of airport land use commissions in counties with one or more airports serving the general public and development of airport land use compatibility plans for the environs of the airports; and
WHEREAS, the City/County Association of Governments of San Mateo County (C/CAG), in its designated role as the Airport Land Use Commission for San Mateo County, is the lead agency responsible for preparing the Comprehensive Airport Land Use Compatibility Plan for the Environs of San Carlos Airport (“ALUCP”); and
WHEREAS, State Law (California Government Code, Section 65302.3) requires cities to have their general plans, specific plans, and land use regulations be consistent with the ALUCPs; and
WHEREAS, on Jan 23, 2023, the City Council of the City of San Carlos adopted amendments to the San Carlos Zoning Ordinance, consisting of changes to building heights; and WHEREAS, subsequently C/CAG requested amendments to San Carlos’ Zoning Ordinance to bring it into compliance with the most recent version of the ALUCP; and WHEREAS, responding to C/CAG’s request, City staff proposed amendments to the City of San Carlos’ Municipal Code, Title 18, Zoning, Sections 18.15 — General Site Regulations, 18.21 — Performance Standards, and 18.28 — Zoning Clearance for consistency with the ALUCP; and WHEREAS, October 12, the C/CAG Board of Directors acting as Airport Land Use Commission determined the proposed amendments to be conditionally consistent with the ALUCP, subject to recommended modifications; and
WHEREAS, City staff has accepted C/CAG’s recommended modifications and proposed amendments to Zoning Ordinance (Exhibit A: Proposed Zoning Ordinance Amendments); and WHEREAS, pursuant to Government Code Sections 65853 and 65850 and San Carlos Municipal Code Chapter 18.35.050, when a change in the Zoning Ordinance (Title 18 of the San Carlos Municipal Code) is found necessary, the Planning and Transportation Commission shall hold a public hearing to consider such change and render its decision to the City Council; and

10.b
November 27, 2023

Packet Pg. 296

WHEREAS, pursuant to San Carlos Municipal Code Chapter 18.35.050 and the California Government Code Sections 65090 and 65091 a Public Hearing Notice was published on October 26, 2023 in the newspaper; and
WHEREAS, pursuant to Public Resources Code, Section 21166 and California Environmental Quality Act (CEQA) Guidelines, Section 15162, no additional environmental review is required; and
WHEREAS, pursuant to San Carlos Municipal Code Chapter 18.35.080, the Planning and Transportation Commission shall make findings regarding a Zoning title text amendment and recommendation to the City Council shall include the reasons for finding that the recommendation is consistent with the General Plan and consistent with Title 18 to promote the growth of the City in an orderly manner and to promote and protect the public health, safety, peace, comfort and general welfare; and
WHEREAS, the Planning Commission desires to make findings for the proposed amendments to the San Carlos Municipal Code Title 18 Zoning relative to implementation of the 2030 General Plan.

NOW, THEREFORE, BE IT FOUND, DETERMINED AND RESOLVED by the Planning and Transportation Commission of the City of San Carlos that:

Pursuant to SCMC Section 18.35.080 Criteria for Zoning Amendments, the Planning and Transportation Commission shall not recommend, and the City Council shall not approve a zoning amendment unless the proposed amendment meets the following criteria:

1. Findings
The Planning Commission makes the following findings:

A. Regarding the California Environmental Quality Act.
1) Pursuant to Public Resources Code Section 21166 and California Environmental Quality Act (CEQA) Guidelines Section 15162, no additional environmental review is required.

Basis for Finding: This project implements the programs and policies of the San Carlos 2030 General Plan, is within the scope of the activities and impacts identified in San Carlos 2030 General Plan Program Environmental Impact Report (EIR) and no new environmental effects have been found and no new mitigation is necessary.

Therefore, no additional environmental review is required pursuant to Public Resources Code Section 21166 and California Environmental Quality Act (CEQA) Guidelines Section 15162.

B. The proposed ordinance amendments are consistent with the General Plan.

POLICY LU-6.5 Work with San Mateo County to maintain and enhance the San Carlos Airport general aviation facility as an economically significant facility of countywide importance.

10.b
November 27, 2023

Packet Pg. 297

POLICY LU-9.1 Maintain and enhance neighborhoods to be safe and attractive.

POLICY EM-6.2 Support and encourage commercial uses to adopt environmentally friendly technologies and reduce the release of pollutants.

POLICY EM-6.5 Consider potential impacts from land uses that may emit pollution and/or odors when locating air pollution sources near sensitive receptors. Air pollution sources could include freeways, industrial uses, hazardous materials storage, waste disposal/transfer stations and other simi- lar uses.

ACTION EM-6.1 Require review by appropriate agencies of development applications that may create potential air quality impacts to assure compliance with relevant regulations.

POLICY NOI-1.2 Minimize noise impacts on noise- sensitive land uses. Noise- sensitive land uses include residential uses, retirement homes, hotel/motels, schools, libraries, community centers, places of public assembly, daycare facilities, churches and hospitals.

Basis for Finding: The proposed amendments ensures the City has procedures embedded in its Zoning Ordinance that require conformance with the ALUCP and its elements (Noise, Safety, Airspace Protection including Disclosures and Overflight Notification) that consider evaluation and mitigation of the potential impacts to air quality, noise levels and sensitive land uses.

San Carlos City CouncilNovember 27, 2023

San Carlos City Council
November 27, 2023