San Carlos City Council
June 9, 2025

1 CITY OF SAN CARLOS
City Council/Successor Agency to the
Redevelopment Agency/Housing Authority
Regular Meeting
June 09, 2025 7:00 PM
Council Chambers, City Hall
600 Elm Street, San Carlos, CA 94070
www.cityofsancarlos.org
AGENDA
This meeting will be conducted both in person at City Hall and virtually via Zoom. Members of the public will have the option to observe the meeting and address the City Council as outlined below.

In- Person 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 • Provide Public Comment. If you plan to make a public comment on any item on the posted agenda, please observe 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”.

Councilmembers may participate in this meeting remotely pursuant to Assembly Bill 2449. 2 MAYOR: Sara McDowell
COUNCIL: John Dugan, Neil Layton, Adam Rak, Pranita Venkatesh

1. CALL TO ORDER

2. ASSEMBLY BILL 2449 TELECONFERENCE REQUESTS

3. PLEDGE OF ALLEGIANCE

4. CHANGES TO THE ORDER OF THE AGENDA

5. REPORT FROM CLOSED SESSION

6. PRESENTATIONS
a. Present a Proclamation Recognizing June 15 – 21, 2025 as Mosquito Control Awareness Week and Receive a Presentation from the San Mateo County Mosquito and Vector Control District on Services they Provide to the Community.

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. 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.

9. CONSENT CALENDAR
a. Motion to Waive Reading of All Ordinances.
b. Approve the City Council April 28, 2025 Regular Meeting Minutes. c. Approve the City Council April 29, 2025 Special Meeting Minutes. 3 d. Adopt a Resolution Authorizing an Amendment to the Professional Services Agreement with West Coast Code Consultants, Inc. for an Amount Not to Exceed $190,000, and CSG Consultants, Inc. for an Amount Not to Exceed $20,000 for Building and Fire Plan Review Consultant Services for Fiscal Year 2024-25. e. Adopt a Resolution Approving Professional Services Agreements for On-Call Civil Engineering Services (Sanitary Sewer, Storm, Pavement Design, Construction Management & Inspection) with CSG Consultants, Mott MacDonald, Sanbell, Freyer Laureta and 4LEAF; On-Call Geotechnical Engineering, Special Testing, and Inspection Services with ENGEO and Kleinfelder; and On-Call Traffic and Transportation Engineering Services with W-Trans and Alta Planning + Design, Each for a One-Year Term with Options for Four, One-Year Extensions in Amounts Not to Exceed $2,000,000 per Firm Annually for Civil Engineering Services (Sanitary Sewer, Storm, Pavement Design, Construction Management & Inspection), $500,000 per Firm Annually for Geotechnical Engineering Services, and $500,000 per Firm Annually for Traffic and Transportation Engineering Services; and Authorizing the City Manager to Execute the Associated Agreements for an Annual Not-to-Exceed Amount of $12,000,000.
f. Adopt a Resolution Appropriating $14,135 From the Parks and Recreation Donation Restricted Fund to the Capital Improvement Program Project C2407 Budget; Authorizing the City Manager to Execute a Products and/or Services Agreement with McMillan Electric for a New Sound System at the Adult Community Center in the Amount of $89,890; and Authorizing the Spending of a Contingency in the Amount of $13,500 for a Not-To-Exceed Contract Amount of $103,390. g. Adopt a Resolution Authorizing the City Manager to Execute a Professional Services Agreement with TeamCivX for an Amount Not to Exceed $275,000 for Consulting Services.
h. Adopt Ordinance 1624 Retitling and Amending San Carlos Municipal Code Section

15.04.110 F (6)(a) to Designate Fire Hazard Severity Zones for Local Responsibility Areas as Recommended by the California Department of Forestry and Fire Protection Pursuant to Government Code Section 51178.

10. NEW BUSINESS
a. Consideration of Adopting a Resolution Approving the Final Design for Harrington Park and the 700 Block of Laurel Street (“Phase 1 Downtown Streetscape Master Plan Implementation”); and Consider Adopting a Resolution Directing Staff to Proceed with the Plans, Specifications, and Estimate (PS&E) for Phase 1A Renovation of Harrington Park.
b. Consideration of Adopting a Resolution Classifying the Various Components of General Fund Fund Balance as Committed Balances as Defined in Governmental Accounting Standards Board Statement No. 54 (“GASB 54”). c. Consideration of Adopting a Resolution Adopting the Biennial Budget for Fiscal Years (FY) 2025-27, Including the Two-Year Operating and Capital Budgets, for the City of San Carlos.
4 i. Consideration of Adopting a Resolution Electing the Population and Price Adjustment Factors and Establishing the Fiscal Year (FY) 2025-26 Appropriations Limit of the City of San Carlos, Pursuant to California Constitution Article XIIIB and Section 7900 Et Seq. of the California Government Code.

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. 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) 802-4222 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.

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
April 28, 2025 7:00 p.m.

MINUTES

ROLL CALL
City Council Present: Sara McDowell, Mayor
Pranita Venkatesh, Vice Mayor
John Dugan, Councilmember
Neil Layton, Councilmember
Adam Rak, Councilmember
Staff Present: Nil Blackburn, Assistant City Manager
Rendell Bustos, Senior Planner
Jerri Cosens, Administrative Sergeant
Rucha Dande, Senior Planner
Sajuti Haque, Economic Development and Housing Manager
Paul Harris, Financial Services Manager
Hanieh Houshmandi, Senior Traffic Engineer
Steven Machida, Public Works Director
Jeff Maltbie, City Manager
Andrea Mardesich, Assistant Community Development Director Rebecca Mendenhall, Administrative Services Director
Tyler Muela, Recreation Supervisor
Crystal Mui, City Clerk
Mark Myers, Police Captain
Lisa Porras, Advance Planning Manager
Gregory Rubens, City Attorney
Al Savay, Community Development Director
Tracy Scramaglia, Assistant Public Works Director
Chris Valley, Building Official

1. CALL TO ORDER
Mayor McDowell called the meeting to order at 7:03 p.m..

2. ASSEMBLY BILL 2449 TELECONFERENCE REQUESTS
None.

3. PLEDGE OF ALLEGIANCE
Mayor McDowell led the Pledge of Allegiance.

4. CHANGES TO THE ORDER OF THE AGENDA
None.

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5. REPORT FROM CLOSED SESSION
None.

6. PRESENTATIONS
a. Present a Proclamation Recognizing April 2025 as Parkinson’s Awareness Month.

Mayor McDowell recognized April as Parkinson’s Awareness Month with a proclamation presented to Vikas Chinnan. Mr. Chinnan spoke about his journey with Parkinson’s disease and introduced his movement disorder specialist, Dr. Salima Brillman, founder of the Silicon Valley Parkinson’s Disease. He thanked Council for the recognition and commended the Adult Community Center for being a welcoming and supportive environment.

7. COUNCIL COMMUNICATIONS AND ANNOUNCEMENTS
Council Member Dugan commended the Parks and Recreation Foundation for organizing the No Foolin’ Foot Race held over the weekend.

Council Member Rak shared that he presented awards to the winners of Rethink Waste’s Trash to Art contest.

Mayor McDowell highlighted the events she attended this past Saturday, including the No Foolin’ Foot Race, a mental health first aid training for adults working with youth, and the City’s first DART (Disaster Airlift Response Team) exercise, where volunteer pilots practiced providing emergency assistance.

8. PUBLIC COMMENT
Holly Danell shared public safety concerns for fire risk and emphasized the need for preventative measures.

Tony Paul discussed a method for protecting the exterior of homes from fire and requested that the Council consider agendizing the topic for further study.

Sami Khalak, resident and member of the San Mateo Youth Climate Action, spoke in support of Council considering a ban against gas-powered leaf blowers.

9. CONSENT CALENDAR
MOTION: Adopt City Council/Successor Agency to the Redevelopment Agency/Housing Authority Consent Calendar items ‘a’ through ‘g’.

MOVER: Rak
SECONDER: Layton
AYES: Dugan, Layton, Rak, Venkatesh, McDowell
NAYS: None
RESULT: Motion Passed 5 – 0
a. Motion to Waive Reading of All Ordinances.
b. Approve the City Council March 10, 2025 Regular Meeting Minutes. c. Approve the City Council March 24, 2025 Special Meeting Minutes.

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d. Accept and Authorize the Filing of the Housing Successor Agency Annual Report for Fiscal Year 2023-24.
e. Adopt a Resolution of the San Carlos Housing Authority Granting a Public Utility Easement on APN 050-132-100 (New Alleyway) Related to the 1244 Cherry Street Affordable Housing Development and Authorizing the Chair of the Housing Authority to Execute Associated Documents. Resolution HA-015
f. Adopt a Resolution Approving the 2025 Sewer Rehabilitation Project C9617 Plans and Specifications and Authorizing a Call for Bids. Resolution 2025- 029 g. Adopt a Resolution Approving the Installation of the Centennial Community Grant Program’s Temporary Pavement Public Art Mural on the 700 Block of Laurel Street. Resolution 2025- 030

10. AGENDA SETTING
a. Consideration of Agendizing an Item to Consider Banning Gas-Powered Leaf Blowers.

Residents Emily Burt, Lisa Gilliam, Emma Dougherty and Ruben Cardenas provided public comment – along with presentation slides – advocating for a ban on gas-powered leaf blowers.

Council Member Dugan spoke in support of considering a ban.

Ms. Burt and Mr. Cardenas responded to questions from the Council.

A majority of the Council expressed hesitation about discussing a potential ban at this time.

Council Member Rak suggested that staff connect with Peninsula Clean Energy to explore available rebate programs and consider sharing that information through the City’s newsletters.

11. PUBLIC HEARING
a. Consideration of Adopting a Resolution Adopting the San Carlos Downtown Streetscape Master Plan.

Lisa Porras, Advance Planning Manager, introduced the item by providing background on the project and the City’s civic engagement efforts. She noted that pages 49 and 71 of the Plan had been inadvertently cropped, and corrected versions were subsequently provided to the Council.

Jim Stickley, Landscape Architect and Urban Designer Consultant, presented the proposed Downtown streetscape and public space design. Ms. Porras spoke provided an overview of the implementation phasing and associated funding strategies. Mr. Stickley, Consultant Mark Spencer with W-Trans, Ms. Porras, City Manager Jeff Maltbie, City Attorney Greg Rubens and Consultant Brian Canepa with W-Trans responded to Council questions.

Public Comment
- Guiliano Carlini commended the City on the proposed Plan and expressed concern about cyclist safety in certain areas and the lack of bike parking. - Andrew Hsu, resident and Board Member of the Silicon Valley Bicycle Coalition, spoke in support of the Plan.

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- Angela Giannini, resident, spoke in opposition to the Plan, citing concerns with the removal of parking and losing a lane on Brittan Ave.
- Sonia Elkes, resident, commended the City for its civic engagement on the Project and voiced her support for the Plan.
- Erin Donovan, resident, expressed concern about the loss of parking and requested the Council consider those who are unable to bike to downtown. - Sara Haller, resident, asked questions and offered suggestions to make the area more accessible for individuals with mobility challenges.
- Geoff Smith, resident, spoke in support of the Plan but expressed parking and safety concerns. - David Tuzman, resident, spoke in support of the proposed Plan.

At the Mayor’s request, Mr. Canepa, Public Works Director Steven Machida, and Police Captain Mark Myers responded to questions from public commenters.

MOTION: Close the Public Hearing.

MOVER: Dugan
SECONDER: Rak
AYES: Rak, Dugan, Layton, Venkatesh, McDowell
NAYS: None
RESULT: Motion Passed 5 – 0
Mr. Stickley and Mr. Machida responded to Council’s additional questions.

Council Member Dugan suggested organizing a field trip for Council to visit a marked-up section of the downtown area to gain a clearer understanding of the proposed promenade location and size.

MOTION: Adopt Resolution 2025-031 Adopting the San Carlos Downtown Streetscape Master Plan with the following amendments:
- include references to outdoor retail, in addition to outdoor dining - add language to reflect flexibility for expanding outdoor dining - note existing bus routes and clarify that the goal is to avoid disrupting them - update photos to feature contemporary lighting
- include mention of wayfinding maps
- remove references to the channel water feature
- revise the Brittan area header to indicate that it is provisional and requires further study
- clarify that the proposed bollard location does not help the Art and Wine Festival
MOVER: Rak
SECONDER: Dugan
AYES: Venkatesh, Rak, Dugan, Layton, McDowell
NAYS: None
RESULT: Motion Passed 5 – 0
The Council recessed for a 10-minute break and reconvened the meeting at 10:10 p.m.

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b. Consideration of Adopting a Resolution Authorizing Adjustments to the Cost of Services Schedule (User Fees), Park Facility Development Fee, Sewer Capacity Charge, Childcare Development Impact Fee and Traffic Impact Fee for Fiscal Year 2025-26, and Adding Three New Fees to the User Fee Schedule.

Financial Services Manager Paul Harris provided background on the annual user fee process and highlighted the recommended fee updates.

MOTION: At 10:23 p.m., Extend the Meeting to 11:30 p.m.

MOVER: Rak
SECONDER: McDowell
AYES: Layton, Venkatesh, Rak, Dugan, McDowell
NAYS: None
RESULT: Motion Passed 5 – 0
Recreation Supervisor Tyler Muela, Assistant Community Development Director Andrea Mardesich, Police Captain Mark Myers, City Manager Jeff Maltbie, Mr. Harris, Administrative Services Director Rebecca Mendenhall and Senior Planner Rucha Dande responded to Council questions.

Council Member Layton requested a review of fee structures to identify any elements that may hinder policy objectives.

Public Comment
None
MOTION: Close the Public Hearing.

MOVER: Dugan
SECONDER: Rak
AYES: Dugan, Layton, Venkatesh, Rak, McDowell
NAYS: None
RESULT: Motion Passed 5 – 0
MOTION: Adopt Resolution 2025-032 Authorizing Adjustments to the Cost of Services Schedule (User Fees), Park Facility Development Fee, Sewer Capacity Charge, Childcare Development Impact Fee and Traffic Impact Fee for Fiscal Year 2025-26, and Adding Three New Fees to the User Fee Schedule.

MOVER: Venkatesh
SECONDER: Rak
AYES: Rak, Dugan, Layton, Venkatesh, McDowell
NAYS: None
RESULT: Motion Passed 5 – 0

12. STUDY SESSION
a. Receive a Presentation and Provide Direction on the Transportation Demand Management and Parking Reform Project.

Senior Planner Rendell Bustos commenced the item by providing project background, then turned the presentation over to Principal Consultant Brian Canepa of W-Trans to provide the

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proposed parking strategies, followed by Principal Consultant Phil Olmstead, who provided an overview of the proposed Transportation Demand Management framework.

Mr. Canepa, Advance Planning Manager Lisa Porras, Mr. Bustos, Public Work Director Steven Machida and City Manager Jeff Maltbie responded to Council questions.

Council provided feedback on parking:
- a majority of the Council does not support paid parking or delegating authority for its implementation.
- Emphasized the importance for full Council involvement in the rollout of the daylighting law.

Council Member Rak requested that an assessment of illegal red curbing be included in the discussion.
- a majority of the Council supports compliance with the Metropolitan Transportation Commission (MTC) policy on parking maximums. When this item returns to Council, staff should provide data on how other cities are achieving compliance.

MOTION: At 11:20 p.m., Extend the Meeting to 12 a.m.

MOVER: Dugan
SECONDER: Venkatesh
AYES: Venkatesh, Rak, Dugan, Layton, McDowell
NAYS: None
RESULT: Motion Passed 5 – 0
Public Comment
- Dan, resident and member of Greater East San Carlos (GESC), inquired about the existing agreement that waives residential parking permit fees for Transit Village residents.

At Mayor McDowell’s request, Mr. Bustos responded to the public commenter.

Mr. Olmstead and Mr. Canepa responded to Council’s additional questions.

MOTION: At 11:57 p.m., Extend the Meeting to 12:10 a.m.

MOVER: Rak
SECONDER: McDowell
AYES: Layton, Venkatesh, Rak, Dugan, McDowell
NAYS: None
RESULT: Motion Passed 5 – 0
Council provided feedback on the Transportation Demand Management (TDM):
- include joining Commute.org to utilize the resources and programs they offer - comply with the City/County Association of Governments (C/CAG) checklist - request that staff analyze and provide recommendations on whether the benefits of achieving compliance — including continued eligibility for potential grants— outweigh the associated economic impacts

13. ADJOURNMENT
Mayor McDowell adjourned the meeting at 12:01 a.m.

Crystal Mui,
City Clerk

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San Carlos City Council/Successor Agency to the
Redevelopment Agency/Housing Authority Special Meeting
Council Chambers, City Hall
600 Elm Street, San Carlos, CA 94070
April 29, 2025 1:00 p.m.

MINUTES

ROLL CALL
City Council Present: Sara McDowell, Mayor
Pranita Venkatesh, Vice Mayor
John Dugan, Councilmember
Neil Layton, Councilmember (depart 6:13 p.m.)
Adam Rak, Councilmember
Staff Present: Nil Blackburn, Assistant City Manager
Lauren Burd, Recreation Supervisor
Baraka Carter, Fire Chief
Greg Da Cunha, Deputy Fire Chief
Rucha Dande, Principal Planner
Paula Decano, Senior Accountant
Sajuti Haque, Economic Development and Housing Manager
Paul Harris, Financial Services Manager
Will Hoch, IT Manager
Marco Lao, Senior Accountant
Grace Le, City Engineer
Jenny Liu, Senior Management Analyst
Steven Machida, Public Works Director
Jeff Maltbie, City Manager
Andrea Mardesich, Assistant Community Development Director Rebecca Mendenhall, Administrative Services Director
Tyler Muela, Recreation Supervisor
Crystal Mui, City Clerk
Mark Myers, Police Captain
Amy Newby, Parks & Recreation Director
Lisa Porras, Advance Planning Manager
Angie Rodriguez, Human Resources Manager
Greg Rubens, City Attorney
Al Savay, Community Development Director
Tracy Scramaglia, Assistant Public Works Director
Chris Valley, Building Official

1. CALL TO ORDER
Mayor McDowell called the meeting to order at 7:03 p.m.

2. ASSEMBLY BILL 2449 TELECONFERENCE REQUESTS
None.

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3. PLEDGE OF ALLEGIANCE
Mayor McDowell led the Pledge of Allegiance.

4. PUBLIC COMMENT
None.

5. STUDY SESSION
a. Receive a General Overview of the Budget Process.

Mayor McDowell requested that, in future years, Council be provided with the budget packet at least 10 to 14 days in advance of the meeting to allow sufficient time for review.

Administrative Services Director Rebecca Mendenhall opened the item by thanking the Finance team and staff for their work on the budget. She presented the budget process, reviewed projections, and responded to Council questions.

Council Member Dugan requested that, in future years, the 'Comparable Staffing Levels' chart be revised to ensure a more accurate comparison, suggesting that safety personnel be excluded across all cities.

Ms. Mendenhall then turned the presentation over to the following Department Heads to highlight their department’s key accomplishments in the last fiscal year and its upcoming goals:
- City Manager - Nil Blackburn, Assistant City Manager
- City Attorney - Greg Rubens, City Attorney
- City Clerk - Crystal Mui, City Clerk
- Administrative Services - Rebecca Mendenhall, Administrative Services Director - Community Development - Al Savay, Community Development Director - Parks and Recreation - Amy Newby, Parks and Recreation Director - Public Works - Steven Machida, Public Works Director
- Police - Mark Myers, Police Chief
- Fire - Greg DaCunha, Deputy Fire Chief
Ms. Mendenhall and Mr. Rubens responded to Council questions.

Council recessed at 2:50 p.m. and reconvened at 3:12 p.m. b. Receive a Presentation and Provide Direction on the Recommended Two-Year Operating Budget for the Fiscal Years 2025-27.

Administrative Services Director Rebecca Mendenhall presented the proposed FY 2025–27 operating budget, reviewing projected revenues, expenditures, and reserves. She, along with Police Captain Mark Myers, responded to questions from the Council.

The Council provided direction and requested the following:
- a summary showing the expected structural surplus
- a discussion on how the City might incentivize the Community Foundation to increase its fundraising efforts (e.g., a matching program)
- information on fluctuations in supplemental tax revenues — specifically, the average used for budgeting compared to the typical range of variation

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c. Receive a Presentation and Provide Direction on the Recommended Capital Improvement Program for the Fiscal Years 2025-30.

Paul Harris, Financial Services Manager, presented the five-year Capital Improvement Program (CIP) and outlined the new and amended projects. He, along with Administrative Services Director Rebecca Mendenall, City Manager Jeff Maltbie, City Engineer Grace Le, Public Works Director Steven Machida, City Attorney Greg Rubens, Parks and Recreation Director Amy Newby, Community Development Director Al Savay, and Assistant Public Works Director Tracy Scramaglia responded to Council questions.

Council provided the following feedback:
- North Crestview Park Design and Construction Project. Emphasized this Project as a priority; seek alternative funding strategies to accomplish this Project; communicate project delays with the community to manage expectations - review the Wheeler Plaza plans and agreements to determine whether there is recourse to require contractors cover the cost of re-painting the parking stall lines - Storm Channel Sediment Removal Project. Add narrative in the budget to clarify that this project is being moved to the unfunded list because sufficient funding is already available. - Safe Routes to School & Pavement Project - Clifford School. Emphasized that this improvement project should be a joint effort with financial contributions from all partners.

Additional background information should be included in the budget to reflect this approach.
- Four Corners Traffic Improvements. Reiterated that this Project remains a high priority and directed staff to come back if funding is required. - Tree Well Replacement Project. Move this Project to the unfunded list in order to expand the Streetscape Master Plan Project.
- Comprehensive East Side Master Streetscape Plan. Increase appropriation in FY 25-26 to $150,000 to expand the scope of work to encompass the northeast area, the full segment of Industrial Road and streets in the Industrial Arts District.

Council recessed at 5:20 p.m. and reconvened at 5:45 p.m.

Staff continued to respond to Council’s additional questions.

Council provided additional feedback and direction:
- continue providing baseline maintenance services for existing parks and infrastructure (e.g., regular weeding at Laureola Park)
- continue to include the two-page ‘Budget in Brief’ summary in the budget - provide additional narrative and context in the budget to aid understanding - continue to prioritize an asset management software for infrastructure and consider engaging a Chief Information Officer consultant to assist with its strategic planning - consider a funding reserve to address potential landslides

6. ADJOURNMENT
The meeting adjourned the meeting at 6:18 p.m.

Crystal Mui
City Clerk

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 9, 2025
ITEM TITLE: Adopt a Resolution Authorizing an Amendment to the Professional Services Agreement with West Coast Code Consultants, Inc. for an Amount Not to Exceed $190,000, and CSG Consultants, Inc. for an Amount Not to Exceed $20,000 for Building and Fire Plan Review Consultant Services for Fiscal Year 2024-25.

RECOMMENDATION:

Staff recommend that the City Council adopt a Resolution authorizing an amendment to the professional services agreement with West Coast Code Consultants, Inc. for an amount not to exceed $190,000, and CSG Consultants, Inc. for an amount not to exceed $20,000 for building and fire plan review consultant services for fiscal year (FY) 2024-25.

FISCAL IMPLICATIONS:

There is no fiscal impact associated with this recommendation and no additional appropriation is required. There is sufficient funding in the Building Division Professional Services budget to cover this request.

The current professional services agreement with West Coast Code Consultants, Inc. (“WC3”) is $379,800 for FY 2024-25. A $190,000 increase is proposed for the remainder of FY 2024-25 to cover the recent plan review submittal of 11 El Camino Real (six-story, multi-family with 251 apartments) and miscellaneous fire plan review of various Planning Division projects.

The current professional services agreement with CSG Consultants, Inc. (“CSG”) is $269,000 for FY 2024-25. A $20,000 increase is proposed for the remainder of FY 2024-25 to cover an increase in the number of plans routed to CSG for timely plan review turnaround. The table below best reflects the amended dollar amount with each plan review consultant:

Consultant Amended Bldg Review Amended Fire Review Total WC3 $150,000 $40,000 $190,000
CSG $20,000 $0 $20,000
BACKGROUND:

At its June 26, 2023 City Council meeting, the Council adopted a Resolution authorizing the City Manager to execute a two-year extension for on-call plan review services with WC3 in the not-toexceed amount of $747,700 ($367,900 for FY 2023-24 and $379,800 for FY 2024-25) and CSG in the not-to-exceed amount of $530,600 ($261,600 for FY 2023-24 and $269,000 for FY 2024- 25). At that time, it was estimated that the projected contract dollar amount for each consultant

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would be sufficient for FY 2024-25 given the anticipated project applications to be received.

At the time of the projected dollar amount for each consultant, key development projects were placed on hold. However, these projects have been recently submitted for plan review and additional funding in the contract will be required to maintain timely reviews.

ANALYSIS:

Use of outside plan review services is critical for efficient and timely processing of permit applications. Plan review turnaround is improved and complaints over the years have reduced significantly with the use of outside plan review services. Larger projects continue to be processed with outside plan review services while less complicated projects are typically reviewed in-house depending on inspection workload. The balance of in-house and outside plan review has proven to be a good model for developers and homeowners in San Carlos.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution authorizing an amendment to the professional services agreement with West Coast Code Consultants, Inc. for an amount not to exceed $190,000, and CSG Consultants, Inc. for an amount not to exceed $20,000 for building and fire plan review consultant services for FY 2024-25; or

2. Do not adopt the Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Chris Valley, Building Official
Al Savay, Community Development Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1.Resolution

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RESOLUTION NO. 2025 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

AUTHORIZING AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH WEST COAST CODE CONSULTANTS, INC. FOR AN AMOUNT NOT TO EXCEED $190,000, AND CSG CONSULTANTS, INC. FOR AN AMOUNT NOT TO EXCEED $20,000 FOR

BUILDING AND FIRE PLAN REVIEW CONSULTANT SERVICES FOR
FISCAL YEAR 2024-25.

WHEREAS, the Building Division relies on contract, as-needed plan review services to help maintain exceptional customer service and plan review turnaround time; and WHEREAS, the current professional services agreement with West Coast Code Consultants, Inc. has a not-to-exceed amount of $379,800 for fiscal year (FY) 2024-25; and WHEREAS, the current professional services agreement with CSG Consultants, Inc. has a not-to-exceed amount of $269,000 for FY 2024-25; and
WHEREAS, the proposed increase of $190,000 for West Coast Code Consultants, Inc. and the proposed increase of $20,000 for CSG Consultants, Inc. for FY 2024-25 should be sufficient for the remainder of the fiscal year through June 30, 2025; and WHEREAS, there is sufficient funding in the Building Division Professional Services budget to cover this request.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council hereby approves an amendment to the Professional Services Agreement with West Coast Code Consultants, Inc. for a not-to-exceed amount of $190,000, and with CSG Consultants, Inc. for a not-to-exceed amount of $20,000 for building and fire plan review consultant services. * * * * *
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 9th day of June 2024, by the following vote:
________________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos
AYES, COUNCILMEMBERS:

NOES, COUNCILMEMBERS:

ABSENT, COUNCILMEMBERS:

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 9, 2025
ITEM TITLE: Adopt a Resolution Approving Professional Services Agreements for On-Call Civil Engineering Services (Sanitary Sewer, Storm, Pavement Design, Construction Management & Inspection) with CSG
Consultants, Mott MacDonald, Sanbell, Freyer Laureta and 4LEAF; On-Call Geotechnical Engineering, Special Testing, and Inspection Services with ENGEO and Kleinfelder; and On-Call Traffic and Transportation Engineering Services with W-Trans and Alta Planning + Design, Each for a One-Year Term with Options for Four, One-Year Extensions in Amounts Not to Exceed $2,000,000 per Firm Annually for Civil Engineering Services (Sanitary Sewer, Storm, Pavement Design, Construction Management & Inspection), $500,000 per Firm Annually for Geotechnical Engineering Services, and $500,000 per Firm Annually for Traffic and Transportation Engineering Services; and Authorizing the City Manager to Execute the Associated Agreements for an Annual Not-to-Exceed Amount of $12,000,000.

RECOMMENDATION:

Staff recommend that the City Council adopt a Resolution:

1. Approving professional services agreements for:
- On-Call Civil Engineering Services (Sanitary Sewer, Storm, Pavement Design, Construction Management & Inspection) with CSG Consultants, Mott MacDonald, Sanbell, Freyer Laureta, and 4LEAF;
- On-Call Geotechnical Engineering, Special Testing, and Inspection Services with ENGEO and Kleinfelder; and
- On-Call Traffic and Transportation Engineering Services with W-Trans and Alta Planning + Design

2. Each agreement for a one-year term with the option for four one-year extensions in amounts not to exceed:
- $2,000,000 per firm annually for Civil Engineering Services, - $500,000 per firm annually for Geotechnical Engineering Services, and - $500,000 per firm annually for Traffic and Transportation Engineering Services; and

3. Authorizing the City Manager to execute the associated agreements for an annual not-toexceed amount of $12,000,000.

FISCAL IMPLICATIONS:

There are no fiscal impacts, and no additional funding is needed at this time to enter into on-call

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engineering agreements. Funds will be encumbered as needed from Council-approved Capital Improvement Program (CIP) projects during the term of the agreements.

BACKGROUND:

This item is being brought to the City Council as the action exceeds the authority of the City Manager.

On February 28, 2022, the City Council authorized the City Manager to execute professional services agreements for On-Call Civil Engineering, Construction Management, Geotechnical Engineering and Special Testing, and Traffic and Transportation Engineering with seven selected consulting firms totaling a not-to-exceed amount of $3,800,000 to address the delivery needs of the CIP.

On August 14, 2023, the City Council authorized an increase to the not-to-exceed amounts for on-call professional services referenced above from a total of $3,800,000 to $8,000,000 based on the increase budgets to the Annual Pavement and Sewer Rehabilitation Projects, additional sewer and storm drain improvement projects, landslide repairs, traffic calming, and Parks and Facilities projects that require design, bid support, construction inspections, and administrative support from on-call consultants. In addition, each consultant raised their hourly rates, resulting in an overall increase in costs.

The allowable contract extensions have been carried out, and staff have identified the continued need to secure professional services agreements for on-call civil engineering, construction management, geotechnical engineering and special testing, and traffic and transportation engineering with consulting firms to address the delivery needs of the CIP.

The CIP includes several projects for sanitary and storm sewers, pavement rehabilitation, traffic, parks, and facilities improvements that will require the services of professional engineering firms.

Downtown Streetscape Improvements: As part of the Downtown Streetscape Master Plan and Downtown Specific Plan, staff anticipates the need for on-call construction management and inspections services.

Pavement Rehabilitation: As part of the latest five year master plan for pavement rehabilitation, staff anticipates rehabilitating approximately eight to ten miles of street annually. Rehabilitation of streets also includes the reconstruction of existing or construction of new curb ramps, as well as traffic striping and pavement marking improvements in conjunction with the approved Bicycle and Pedestrian Master Plan.

Sanitary Sewer Rehabilitation and Capacity Assurance Improvements: The Sanitary Sewer Master Plan has identified both pipe condition and capacity deficiencies within our sanitary sewer system that need addressing through sewer rehabilitation and sewer capacity assurance projects.

In addition, there has been an increase in severe defects of main line pipes and sewer laterals identified for repair.

Storm Drain Rehabilitation: In January 2016, the City completed a Citywide Storm Drain System Master Plan that identified storm drainage deficiencies throughout the City. The Master Plan identified $53 million in improvement work to upsize existing storm infrastructure.

Geotechnical Engineering and Special Testing: In conjunction with pavement and utility

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rehabilitation projects, geotechnical engineering and special testing are often required to perform site observations or special testing completion in accordance with City standards. The continuation of landslide repair projects from the impacts of the 2022-2023 storm season requires geotechnical engineering services.

Traffic and Transportation Engineering: Staff continue to receive a high volume of requests to reduce speeding, implement traffic calming, improve pedestrian safety, and install all-way stop controls along City streets and intersections.

A request-for-qualifications was issued on December 18, 2024, for the three disciplines and on January 31, 2025, thirty-six statements of qualifications were received.

Staff recommend contracts with the nine selected consulting firms below to allow for increased flexibility in delivering our bold CIP program and in anticipation of the resources needed to deliver the Downtown Streetscape Master Plan improvements. Staff reviewed each firm’s statements of qualifications based on set criteria, as well as demonstration of thorough knowledge and expertise, and selected the following firms for each discipline:

ON-CALL SERVICES DISCIPLINES CONSULTANT FIRMS
CSG Consultants
Mott MacDonald
Sanbell
Freyer Laureta
Civil Engineering (Sanitary Sewer, Storm,
Pavement Design, Construction
Management & Inspection)
4LEAF
Geotechnical Engineering and Special ENGEO
Testing Kleinfelder
Transportation & Traffic Engineering W-Trans
Alta Planning + Design
ANALYSIS:

Staff recommend approval of the abovementioned firms and awarding professional services agreements with the stated annual not-to-exceed amounts per calendar year based on the table below:

ON-CALL SERVICES DISCIPLINES CONSULTANT FIRMS AMOUNT
CSG Consultants $2,000,000
Mott MacDonald $2,000,000
Sanbell $2,000,000
Freyer Laureta $2,000,000
Civil Engineering (Sanitary Sewer,
Storm, Pavement Design, Construction
Management & Inspection)
4LEAF $2,000,000
Geotechnical Engineering & Special ENGEO $500,000
Testing Kleinfelder $500,000
Traffic & Transportation Engineering W-Trans $500,000
Alta Planning + Design $500,000
TOTAL: $12,000,000
Staff also recommend the annual not-to-exceed amount reset with full contract capacity with each

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optional extension of the agreement to provide maximum flexibility.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution approving professional services agreements for On-Call Civil Engineering Services (Sanitary Sewer, Storm, Pavement Design, Construction Management & Inspection) with CSG Consultants, Mott MacDonald, Sanbell, Freyer Laureta and 4LEAF; On-Call Geotechnical Engineering, Special Testing, and Inspection Services with ENGEO and Kleinfelder; and On-Call Traffic and Transportation Engineering Services with W-Trans and Alta Planning + Design, Each for a one-year term with the option for four one-year extensions in amounts not to exceed $2,000,000 per firm annually for Civil Engineering Services (Sanitary Sewer, Storm, Pavement Design, Construction Management & Inspection), $500,000 per firm annually for Geotechnical Engineering Services and $500,000 per firm annually for Traffic and Transportation Engineering Services; and authorizing the City Manager to execute the associated agreements for an annual not-to-exceed amount of $12,000,000; 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

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RESOLUTION NO. 2025 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

APPROVING PROFESSIONAL SERVICES AGREEMENTS FOR ON-CALL CIVIL

ENGINEERING SERVICES (SANITARY SEWER, STORM, PAVEMENT DESIGN,

CONSTRUCTION MANAGEMENT & INSPECTION) WITH CSG CONSULTANTS, MOTT MACDONALD, SANBELL, FREYER LAURETA, AND 4LEAF;

ON-CALL GEOTECHNICAL ENGINEERING, SPECIAL TESTING, AND INSPECTION SERVICES WITH ENGEO AND KLEINFELDER; AND

ON-CALL TRAFFIC AND TRANSPORTATION ENGINEERING SERVICES WITH W-TRANS AND ALTA PLANNING + DESIGN, EACH FOR A ONE-YEAR TERM WITH THE OPTION FOR FOUR, ONE-YEAR EXTENSIONS IN AMOUNTS NOT TO EXCEED $2,000,000 PER

FIRM ANNUALLY FOR CIVIL ENGINEERING SERVICES (SANITARY SEWER, STORM, PAVEMENT DESIGN, CONSTRUCTION MANAGEMENT & INSPECTION), $500,000 PER FIRM ANNUALLY FOR GEOTECHNICAL ENGINEERING SERVICES, AND $500,000 PER FIRM ANNUALLY FOR TRAFFIC AND TRANSPORTATION ENGINEERING SERVICES;

AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE ASSOCIATED AGREEMENTS FOR AN ANNUAL NOT-TO-EXCEED AMOUNT OF $12,000,000.

WHEREAS, staff has identified the need to secure professional services agreements for on-call civil engineering, construction management, geotechnical engineering and special testing and inspection, and traffic and transportation engineering with consulting firms to address the delivery needs of the Capital Improvement Program (“CIP”); and WHEREAS, the CIP includes several projects for sanitary and storm sewers, pavement rehabilitation, traffic, parks, and facilities improvements that will require the services of professional engineering firms; and
WHEREAS, as part of the Downtown Streetscape Master Plan and Downtown Specific Plan, staff anticipates the need for on-call construction management and inspections services for the Downtown Streetscape Improvements.

WHEREAS, a request-for-qualifications was issued on December 18, 2024 for the three disciplines and on January 31, 2025, thirty-six statements of qualifications were received; and WHEREAS, staff reviewed the statements based on set criteria as well as demonstration of thorough knowledge and expertise, and selected firms for each discipline; and WHEREAS, staff recommends an annual not-to-exceed amount to provide maximum flexibility; and
WHEREAS, staff recommends approval of the selected firms and awarding professional services agreements with the stated annual not-to-exceed amounts per calendar year based on the table below:

ON-CALL SERVICES DISCIPLINES CONSULTANT FIRMS AMOUNT
CSG Consultants $2,000,000
Mott MacDonald $2,000,000

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Civil Engineering (Sanitary Sewer,
Storm, Pavement Design, Construction
Management & Inspection)
Sanbell $2,000,000
Freyer Laureta $2,000,000
4LEAF $2,000,000
Geotechnical Engineering & Special
Testing
ENGEO $500,000
Kleinfelder $500,000
Traffic & Transportation Engineering W-Trans $500,000
Alta Planning + Design $500,000
TOTAL: $12,000,000
WHEREAS, staff also recommend the annual not-to-exceed amount reset with full contract capacity with each optional extension of the agreement to provide maximum flexibility.

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

1. Approves professional services agreements for
- On-Call Civil Engineering Services (Sanitary Sewer, Storm, Pavement Design, Construction Management & Inspection) with CSG Consultants, Mott MacDonald, Sanbell, Freyer Laureta, and 4LEAF;
- On-Call Geotechnical Engineering, Special Testing, and Inspection Services with ENGEO and Kleinfelder; and
- On-Call Traffic and Transportation Engineering Services with W-Trans and Alta Planning + Design,

2. Each agreement for a one-year term with the option for four, one-year extensions in amounts not to exceed:
- $2,000,000 per firm annually for Civil Engineering Services (Sanitary Sewer, Storm, Pavement Design, Construction Management & Inspection), - $500,000 per Firm Annually for Geotechnical Engineering Services and - $500,000 per Firm Annually for Traffic and Transportation Engineering Services; and

3. Authorizes the City Manager to Execute the associated agreements for an annual notto-exceed amount of $12,000,000. *****
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 9th day of June 2025, by the following vote:
________________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos
AYES, COUNCILMEMBERS:

NOES, COUNCILMEMBERS:

ABSENT, COUNCILMEMBERS:

June 09, 2025 Packet Pg. 22

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 9, 2025
ITEM TITLE: Adopt a Resolution Appropriating $14,135 From the Parks and Recreation Donation Restricted Fund to the Capital Improvement Program Project C2407 Budget; Authorizing the City Manager to Execute a Products and/or Services Agreement with McMillan Electric for a New Sound System at the Adult Community Center in the Amount of $89,890; and Authorizing the Spending of a Contingency in the Amount of $13,500 for a Not-To-Exceed Contract Amount of $103,390.

RECOMMENDATION:

Staff recommend that the City Council adopt a Resolution appropriating $14,135 from the Parks and Recreation Donation Restricted Fund to the Capital Improvement Program Project C2407 budget; authorizing the City Manager to execute a products and/or services agreement with McMillan Electric for a new sound system at the Adult Community Center in the amount of $89,890; and authorizing the spending of a contingency in the amount of $13,500 for a not-toexceed contract amount of $103,390.

FISCAL IMPLICATIONS:

Funding for the Adult Community Center (ACC) Sound System and Door Replacement Project (C2407) was allocated in the adopted fiscal year 2024-25 Capital Improvement Program Budget in the amount of $150,000. The current remaining balance of the project budget is $89,255. An additional appropriation of $14,135 from the Parks and Recreation Donation Restricted fund is necessary to complete the project. The City has received generous donations from residents over the years that have been restricted for use in either the ACC or Youth Center.

In support of this project, the Friends of the ACC non-profit organization committed $50,000 towards the project.

Project Costs:

Contract Amount $ 89,890
Contingency (~15%) $ 13,500
Total Contract Amount $103,390

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Project Funding Sources:

Project C2407 Balance $ 89,255
Additional Funding (PR Donation Fund) $ 14,135
Total Project Funding $103,390
Friends of the ACC Donation $ 50,000
Net Capital Project Costs $ 53,390
BACKGROUND:

The ACC hosts a wide variety of programs, classes, and events, Monday through Friday, including group exercise classes, presentations, luncheons, and various social gatherings. The ACC averages over 125 daily visits across all programs. Additionally, on the weekends, the facility is available for private rentals that include weddings, birthday celebrations, family gatherings, and memorials.

The current sound system is projected into the large Parkview Room and is used regularly for the ACC’s programs and events, making it an essential component of the facility’s operations. Throughout the week, a wide range of users rely on the sound system, including class instructors, volunteers, guest speakers, staff, private renters, and the Friends of the Adult Community Center.

ANALYSIS:

The existing sound system is outdated, unreliable, and difficult to operate. The system lacks Bluetooth connectivity, forcing contract instructors to use outdated “boom boxes” to play music for classes. The volume and clarity of the sound system are inadequate for larger events, and there are no speakers in the back portion of the large gathering room, known as the Patio.

Staff recommends the new sound system extend into the Patio and Lounge areas, allowing staff to increase capacity and reduce waitlists for programs and events. Additionally, it will include assistive listening devices and ensure clear and balanced audio output throughout the facility spaces. Finally, the new system will be user-friendly and adaptable to evolving community needs, ensuring the ACC remains aligned with emerging technologies and programming trends.

Staff received three bids from qualified audio vendors for a new sound system. Parks and Recreation worked with IT to identify the scope of services and needs of the new sound system at the ACC. The proposals were reviewed by staff and rated based on the vendor's ability to meet the long-term needs of the ACC, cost proposal, and work in similar facilities.

Following the review of proposals, staff recommends executing an agreement with McMillan Electric as they demonstrated they can meet the long-term audio needs of the ACC facility and programs and recently completed the audio installation at the new Recreation Center in Burlingame. Should the Council adopt a resolution to execute the agreement, staff will begin working with McMillan Electric to purchase and install the new sound system this summer.

ALTERNATIVES:

The alternatives available to the City Council include:

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1. Adopt a Resolution appropriating $14,135 from the Parks and Recreation Donation Restricted Fund to the Capital Improvement Program Project C2407 budget; authorizing the City Manager to execute a products and/or services agreement with McMillan Electric for a new sound system at the Adult Community Center in the amount of $89,890; and authorizing the spending of a contingency in the amount of $13,500 for a not-to-exceed contract amount of $103,390; or

2. Do not adopt a Resolution; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Amy Newby, Parks & Recreation Director
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution

2. Sound System Proposal

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RESOLUTION NO. 2025 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS APPROPRIATING $14,135 FROM THE PARKS AND RECREATION DONATION RESTRICTED FUND TO THE CAPITAL IMPROVEMENT PROGRAM PROJECT C2407 BUDGET; AUTHORIZING THE CITY MANAGER TO EXECUTE A PRODUCTS AND/OR

SERVICES AGREEMENT WITH MCMILLAN ELECTRIC FOR A NEW SOUND SYSTEM AT THE ADULT COMMUNITY CENTER IN THE AMOUNT OF $89,890; AND AUTHORIZING THE SPENDING OF A CONTINGENCY IN THE AMOUNT OF $13,500 FOR A NOT-TOEXCEED CONTRACT AMOUNT OF $103,390.

WHEREAS, funding for the Adult Community Center (ACC) Sound System and Door Replacement Project (C2407) was allocated in the Adopted Fiscal Year 2024-25 Capital Improvement Program Budget and has a remaining fund balance of $89,255; and WHEREAS, an additional appropriation of $14,135 from the ACC restricted fund is necessary in order to complete the project; and
WHEREAS, the current sound system is used by a variety of facility programs and events and is an essential component of the ACC operations; and WHEREAS, existing sound system is outdated, unreliable, and difficult to operate; and

WHEREAS, it is recommended to replace and expand the sound system at the ACC in order to support current programs and expand capacity of programs and events; and WHEREAS, staff received three proposals from qualified vendors and rated each proposal based off of whether the proposed system met the long-term needs of the ACC, total project costs, and work in similar recreation facilities; and
WHEREAS, staff recommends executing an agreement with McMillan Electric as they demonstrated their sound system will meet the needs of the operations and recently completed an audio installation in a similar recreation facility; and WHEREAS, the City has received generous donations from residents over the years that have been restricted for use in either the Adult Community Center or Youth Center.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council hereby appropriates $14,135 from the Parks and Recreation Donation Restricted Fund; authorizes the City Manager to execute a Products and/or Services Agreement with McMillan Electric for the ACC Sound System (C2407) in the amount of $89,890; and authorizes the expenditure of contingency in the amount of $13,500 for the contract amount not to exceed $103,390. * * * * *
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 9th day of June 2025, by the following vote:

AYES, COUNCILMEMBERS:

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

ABSENT, COUNCILMEMBERS:

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1480 Folsom Street, San Francisco, CA 94103 T:415.826.5100 F:415.826.0142 Cyber Security -Riser Management – Low Voltage Cabling
Telecommunications – Public WiFi – Audio Visual Systems Lic #268179-C10
May 14, 2025
Caitlyn Matoso
Recreation Supervisor
Reference: City Of San Carlos Active Adults – Low Voltage AV All Hands Systems We are pleased to offer our Budget proposal for the low voltage portion of work at. 601 Chestnut Street, San Carlos, CA 94070. Work is based upon email information for AV equipment + installation, site visit and emailed information. Scope includes: Projector + Screen - Speaker system All Hands area, Seating hall - Assistive Listening System.

We will perform this work for AV Scope ...................................................................................... $89,890.00 Scope of work to include the following:

AV – All Hands Space

1. Furnish and Install (1) Projector Sharp NEC motor zoom LM high output.

2. Furnish and Install (1) Projector ceiling mount.

3. Furnish and Install (1) Projector screen DA-Lite brown trim.

4. Furnish and Install (1) Projector screen wall controller.

5. Furnish and Install (4) QSC Acoustic Design Series ADS 6.5” Brown.

6. Furnish and Install (8) QSC Acoustic Design Series ADS 6.5” White.

7. Furnish and Install (1) Atlas selector controller wall outlet.

8. Furnish and Install (1) Atlas Bluetooth controller wall outlet.

9. Furnish and Install (1) AtlasIED Audio Processor PWR unit.

10. Furnish and Install (1) Shure Antenna Distribution unit.

11. Furnish and Install (1) Shure wireless headset microphone system.

12. Furnish and Install (1) IP PDU SnapAV Unit.

13. Furnish and Install (1) USB C cable Thunderbolt.

14. Furnish and Install (1) HDMI 4K cable.

15. Furnish and Install (1) Sonos Port player.

16. Furnish and Install (4) Cat6 dat cables from AV rack to Projector.

17. Client to furnish and install media source. This is excluded from this scope.

18. Furnish and Install AV cables to support as needed.

19. Furnish and Install (2) wireless Assistive Listening devices.

20. Furnish and Install (1) wireless Assistive Listening audio devices

21. Existing AV cabinet to support new AV gear installation.

22. Furnish and Install (2) 4 port surface box plastic at AV rack for data connections.

23. Furnish and Install (8) Cat6 jacks.

24. Furnish and Install (6) speaker cable zones per system setup requirements.

25. Furnish and Install face plates as needed.

26. Provide programming.

27. Terminate, test and label.

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1480 Folsom Street, San Francisco, CA 94103 T:415.826.5100 F:415.826.0142

28. Provide BICSI Level Technician Tele/Data scope.

29. CA Voice data video technician state card.

30. Submittals.

31. As-built drawings.

32. Union Labor.

33. Terminate, test and label.

34. cable 25-year warranty.

35. Work to be performed on straight time, during IBEW normal working hours. (Monday – Friday) Exclusions
Our proposal excludes: EMT conduit stub ups or home runs, poke through, coring, cable tray, cable basket, Plywood, special switches for Data Rack, existing data cabling support, electric fans, Zoom Room license, team room license, WIFI license, all AV equipment outside of this proposal, CCTV NVR unit, , access control yearly subscription Internet service, , Meraki & Cisco substruction services yearly fees, sound masking, electrical, fire alarm, , City permit/plan check fees, OSHPD compliance, LEED compliance (unless noted), riser management, performance, WAP devices. Pricing does not include manufacturing/freight due to foreign temporary factory closures. bond, project phasing, labor rate increases, and overtime except as noted. Price Valid for 60 Days.

ADD/ALT:
a. Low Voltage AV Shop Drawings ........................................................................... ADD $4,000.00 a. Provide Shop Drawings for Low Voltage Systems.

We thank you for considering MNetworks a Division of McMillan Electric for this project. If you should have any questions, please do not hesitate to contact me at any time.

Sincerely,
Jeromy Lowery
Division Manager

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 9, 2025
ITEM TITLE: Adopt a Resolution Authorizing the City Manager to Execute a Professional Services Agreement with TeamCivX for an Amount Not to Exceed $275,000 for Consulting Services.

RECOMMENDATION:

Staff recommend that the City Council authorize the City Manager to execute a professional services agreement with TeamCivX for election for consultant services in an amount not to exceed $275,000.

FISCAL IMPLICATIONS:

There is no fiscal impact and no additional appropriation is necessary at this time.

Funding for these services has been included in the Downtown Renovation Plan/Design Implementation Project #C2215 in the amount of $350,000.

BACKGROUND:

Approximately four years ago in 2021, the City Council advanced the idea of creating a new plan for downtown San Carlos. With the temporary closure of the 700 block of Laurel Street to pedestrian-only access, new ideas and a robust discussion about Laurel Street began to emerge.

Thus, it became the ideal time to address the future of downtown Laurel Street and its surroundings. On April 28, 2025, the City Council adopted the San Carlos Downtown Streetscape Master Plan.

The 2025 Strategic Plan includes the following strategic goal related to the downtown:
“The City of San Carlos will work with residents, property owners, business owners, committees, commissions, the Chamber of Commerce, and all other interested members of the community to develop and implement a plan to understand and ensure that the downtown meets the needs of the community and businesses now and into the future.” Objective 5, Task 2 of this goal is as follows: “Identify funding strategy and develop a workplan to secure project funding.” In January 2025, the City Council created the Infrastructure Financing Subcommittee (“Subcommittee”) to assist with this process. The Subcommittee directed staff to create a request for proposals (RFP) to solicit consulting services for ballot measure polling and outreach services to help fund the proposed enhancements to the downtown.

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ANALYSIS:

On April 8, 2025, the City issued an RFP for a vendor team to conduct these consulting services.

The application period closed on April 15, 2025, and the City received four responses from the following vendors. Each vendor was directed to submit a not-to-exceed cost proposal.

Vendor Total Cost Interviewed
CliffordMoss $167,900, plus add-ons Yes
Props & Measures $230,083 Yes
TeamCivX $275,000 Yes
William Berry Campaigns $281,500 No
Three of the four vendors were invited for interviews based on the thoroughness of their submittals. A selection team comprised of Mayor Sara McDowell, Council Member Neil Layton, City Manager Jeff Maltbie, Assistant City Manager Nil Blackburn, and Administrative Services Director Rebecca Mendenhall met with the three vendors. Based on the interviews and the review of the proposals, TeamCivX and their research partner, True North Research, are recommended for this work. A copy of the TeamCivX proposal has been attached for reference.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution authorizing the City Manager to execute a professional services agreement with TeamCivX for an amount not to exceed $275,000 for consulting services; or

2. Do not adopt a 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. RFP – Election Campaign Consultant Services

3. San Carlos – TeamCivX Proposal

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RESOLUTION NO. 2025 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH TEAMCIVX FOR AN AMOUNT NOT TO EXCEED $275,000 FOR CONSULTING SERVICES.

WHEREAS, the City’s 2025 Strategic Plan includes a strategic goal related the downtown project; and
WHEREAS, Objective 5, task 2 of the downtown goal is to identify funding strategies and develop a workplan to secure project funding; and
WHEREAS, the City Council created the Infrastructure Financing Subcommittee (“Subcommittee”) to assist with this process; and
WHEREAS, the Subcommittee directed staff to issue requests for proposals to solicit consulting services to help fund the proposed enhancements to the downtown; and WHEREAS, a selection committee comprised of Mayor Sara McDowell, Council Member Neil Layton, City Manager Jeff Maltbie, Assistant City Manager Nil Blackburn, and Administrative Services Director Rebecca Mendenhall interviewed three of the four applicants; and WHEREAS, based on the proposals and the interviews conducted, the selection committee recommends a contract be executed with TeamCivX.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council hereby authorizes the City Manager to execute a professional services agreement with TeamCivX for consulting services in a not-to-exceed contract amount of $275,000. * * * * *
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 9th day of June 2025, by the following vote:
________________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos
AYES, COUNCILMEMBERS:

NOES, COUNCILMEMBERS:

ABSENT, COUNCILMEMBERS:

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REQUEST FOR PROPOSALS:

Election Campaign Consultant Services
Release Date: April 8, 2025
Proposals must be received via email by 3:00 p.m. PDT
on April 28, 2025 at the following address:

Quinne Woolley
Management Analyst, City of San Carlos
[email protected]
Questions regarding this request for proposals (RFP)
should be directed in writing via email by 3:00 p.m. PDT on April 15, 2025, to:

Quinne Woolley
Management Analyst, City of San Carlos
[email protected]

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CITY OF SAN CARLOS
Request for Proposals

1. Introduction
The City of San Carlos (“the City”) is seeking proposals from qualified election campaign consultants (“Consultant”) to submit proposals to provide project management, consulting services, and subcontracted election polling services for a local ballot measure (general obligation bond or parcel tax) in the November 2026 municipal election. The Consultant will assist the City from beginning to end of the entire revenue ballot measure cycle, with effective communication throughout with all interested stakeholders.

2. Background
The City of San Carlos, known as the “City of Good Living,” is located halfway between San Francisco and San Jose, covers five and a half square miles, and has about 30,000 residents.

The City strikes the rare balance between small town charm and big city access.

The City is governed by a five-member City Council and an appointed City Manager and City Attorney. The City Council appoints members of the public to various commissions and committees to provide advice and support to the Council. San Carlans are actively involved in a wide range of civic affairs and the City encourages public participation.

The City Council values transparency, open communication, and feedback from the community.

The City conducts a community satisfaction survey every two years, and each survey has indicated overall satisfaction with the City's performance and efforts at communicating with the community. Community engagement is a priority of the City. To learn more about City of San Carlos, visit cityofsancarlos.org.

3. Project Overview
In 2022, the City of San Carlos initiated the Downtown Specific Plan and Streetscape Master Plan project to improve the vibrancy of the downtown, provide an enhanced pedestrian experience, create safer bike routes, increase the number of visitors, improve the overall shopping and dining experience for visitors, and create more space for downtown programming and activities. Design engineering drawings for the first phase of these improvements, located along the 700 block of Laurel Street, are currently underway. The City expects to break ground on a small portion of the first phase, which includes improvements to Harrington Park, in November 2025.

The total cost of the core downtown improvements is estimated to be $65,000,000. To implement the project, the City needs to identify a new revenue stream that will fund $20,000,000 of the $65,000,000.

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More project information is available at sancarlosdowntownplan.com.

4. Scope of Work
Project tasks shall include, but are not necessarily limited to, the scope of work described below.

If the Consultant feels that additional tasks are warranted, they must be clearly identified in the firm’s proposal. Firms responding to this RFP shall be prepared to deliver services and perform the work necessary to provide the services immediately upon award of contract. The project consists of furnishing all labor, materials, supervision, and travel necessary to deliver the services outlined below:

1. Management of election polling consultant and surveys – The Consultant will hire and partner with a polling consultant(s). The Consultant will include the cost of the polling consultant in this proposal. The election polling consultant will design and conduct at least two surveys to understand the community’s perspectives on a revenue measure: one in June 2025 and a second at a time to be determined. The election polling consultant will:
develop and conduct hybrid online and phone surveys; conduct pretesting of the surveys; train interviewing personnel; develop a recruitment message to survey takers; develop a listed sample of San Carlos voters; summarize and present the survey data results and strategic recommendations in reports and presentations to staff and the City Council; and provide post-survey consulting as needed by the City.

2. Development of a revenue ballot measure – Work with councilmembers, staff, and other consultants to determine the amount and type of revenue measure to pursue. Work with the legal consultant to provide input on the revenue measure, ordinance, reports, and resolutions.

The Consultant will be engaged in the review and adoption process of the measure by the City Council and will adhere to all public hearing requirements. The Consultant will also coordinate with all stakeholders including, but not limited to, the City Council, City Manager, City Attorney, and other City consultants, as needed.

3. Community outreach plan – In addition to managing the measure and ordinance development processes, the Consultant will guide the City through a comprehensive public education and marketing plan and execute this plan within the community based on the polling results.

The consultant will need to be well versed in mail, website, social media, in-person engagement, and all other outreach methods to lead the City through an educational campaign.

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4. Overall project management – Develop and manage a master project schedule from project kickoff through Election Day and ensure coordination across all working groups*.

The City will provide the Consultant with access to City staff’s availability to support effective scheduling and project management.

As the lead project manager, the Consultant will attend all meetings, both in-person and virtual, including council meetings, community engagement meetings, stakeholder meetings, councilmember subcommittee meetings, internal team meetings, and any other meetings required.
*Working groups may include: (a) a councilmember subcommittee consisting of two councilmembers, City staff, and consultants; (b) an internal staff and Project consultants; (c) a community outreach team; and (d) any additional groups deemed necessary. A summary of all known project team members is provided below.

Project Team Members
In addition to the campaign consultant and their election polling services provider, the project team will at least consist of:

1. Two City of San Carlos elected councilmembers

2. Nine City of San Carlos Staff
a. Administrative Services Director
b. Advance Planning Manager
c. Assistant City Manager
d. City Attorney
e. City Manager
f. Communications Manager
g. Community Development Director
h. Financial Services Manager
i. Management Analyst

3. Two Consultants
a. Financial Consultant
b. Bond Counsel

5. Proposal Submission Requirements
The proposals should include the following, along with any additional information:

1. Consultant Profile – Include a brief company history and location.

2. Applicable Experience – Describe Consultant’s experience with the full ballot measure service cycle. List a minimum of three specific examples of projects where the Consultant

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has performed services of similar size, scope, and complexity. Each example should show experience with local governments providing ballot measure polling and outreach consultant services.

3. Staff Qualifications and Experience – The proposal should identify a project manager as well as any other staff who would be assigned to the project. List the qualifications and experience for each principal staff member and include recent polling and outreach experience. Indicate how the quality of staff over the term of the agreement will be assured.

4. Polling and Public Education Strategy – The proposal should set forth a work plan, including an explanation of the polling methodology for the surveys, public education, and outreach strategy, and all services as described in this solicitation.

5. Timeline Proposal – The Consultant should submit a proposed project timeline outlining key phases and milestones. This should include target dates for designing and launching surveys, presenting findings to the City Council, conducting education and outreach efforts, and completing other essential components

6. References – Provide three references for projects similar in size, scope, and complexity.

Include the name of the reference, their email, phone number, a description of the service performed, and the date of project completion.

7. Modifications to Scope of Work – Identify any suggested modification(s) to the scope of work listed above.

8. Fee Proposal – Provide a not-to-exceed fee proposal which assumes the above scope of work, with any detailed exclusions and inclusions. Please also include the following:
a. Incremental Costs – Provide proposed incremental costs for any optional services or for any other variability in services.
b. Ancillary Costs – Identify any potential ancillary costs of which the City should be aware.

9. Acknowledgement of City’s standard Professional Services Agreement (Attachment A) – Consultant must either acknowledge that the City’s standard professional services agreement is acceptable as written and that the necessary insurance and other documents will be provided as required, or the Consultant must submit “redlined” changes to the professional services agreement.

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The proposed agreement is included in Attachment A. “Redlined” changes and comments using Microsoft Office’s “track changes” feature are expected with the Consultant’s final Proposal Submission Requirements. The City strongly encourages consultants to share the Service Agreement with their legal departments for review and comment immediately upon receipt of this RFP.

10. Signed and completed Levine Act Disclosure (Attachment B)

6. RFP Schedule
The schedule below is an estimate and may be adjusted as necessary.

City issues RFP April 8, 2025
Deadline for emailing written questions to
[email protected]
April 15, 2025, by 3:00 p.m. PDT
Deadline for the City to post answers to all
questions on the RFP webpage
April 18, 2025, by 5:00 p.m. PDT
Deadline for emailing* proposals to
[email protected]
April 28, 2025 by 3:00 p.m. PDT
Proposal review and selection of consultants to
invite for interviews
May 5, 2025 by 5:00 p.m. PDT
Interviews Week of May 12, 2025
Consultant selection and contract completion Week of May 19, 2025 Contract effective date May 30, 2025
*The City is not responsible for proposals that are delinquent, lost, mismarked, or sent to an email address or another address other than provided above. The City reserves the right to reject any or all proposals or to accept the proposal that in its sole judgment is in the best interest of the City of San Carlos.

7. Consultant Selection
Evaluation considerations will include the following:

1. Responsiveness of the proposal to the ten Proposal Submission Requirements listed above.

2. Clear indication of understanding of the work to be performed and demonstration of intent and ability to perform the work.

3. Professional qualifications and technical expertise.

4. Experience and track record conducting similar work for similar cities.

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5. Proposed cost to provide the requested services.

The City retains sole discretion to evaluate submittals and may make an award to the consultant the City deems to be most responsive to the RFP. Receipt of submittals in response to its request for proposals does not obligate the City in any way to engage any consultant, and the City reserves the right to reject any or all submittals, wholly or in part, at any time, without penalty. The City shall retain the right to abandon the RFP and selection process at any time prior to the actual execution of a contract with a consultant and the City shall bear no financial or other responsibility in the event of such abandonment. The City reserves the right to negotiate all final terms and conditions of any agreements entered into.

8. Submission Instructions
Submit an electronic copy of the proposal signed by the firm’s authorized agent by email to Quinne Woolley, Management Analyst ([email protected]) with the subject, “RFP – Election Campaign Consultant” no later than April 28, 2025 at 3:00 p.m. The proposal must be received before the specified time. Late proposals will not be considered. A notification of receipt will be emailed to all submitters.

Any questions pertaining to this RFP should be directed to Quinne Woolley, Management Analyst, at [email protected] by April 15, 2025 at 3:00 p.m. Responses to all questions will be published to the RFP webpage by April 18, 2025 at 5:00 p.m.

9. General Requirements

1. All costs incurred during submittal preparation or in any way associated with the Consultant’s preparations, submission, presentation, or oral interview shall be the sole responsibility of the Consultant.

2. If awarded a contract, the Consultant shall maintain insurance coverage, including worker’s compensation, reflecting the minimum amounts and conditions specified by the City during the entire period of engagement. Detailed insurance requirements are listed in the Professional Services Agreement (Attachment A).

3. If awarded a contract, the Consultant will be required to be licensed in accordance with the City of San Carlos Business License Ordinance of the Municipal Code.

4. Consultants are liable for all errors or omissions contained in their proposals.

5. The proposal must not be marked as confidential or proprietary. Information in proposals shall become public property and subject to disclosure laws. All proposals shall become the property of the City. The City reserves the right to make use of any information or ideas in the Proposals. By submitting a proposal, the Consultant represents that it has

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thoroughly examined and become familiar with the work required under this RFP and that it is capable of providing and performing quality work to achieve the City’s objectives.

6. Proposals must be valid for a period of 120 calendar days from the closing date.

7. Pre-contractual expenses are defined as expenses incurred by the Consultant in:
preparing its proposal in response to this RFP; submitting that proposal to the City; negotiating with the City any matter related to the Consultant's proposal; and any other expenses incurred by the proposer prior to the date of award and execution, if any, of the Agreement. The City shall not, in any event, be liable for any pre-contractual expenses incurred by Consultant in the preparation of their proposal.

8. Each consultant must submit its proposal in strict accordance with all requirements of this RFP. Deviations, clarifications, and/or exceptions must be clearly identified and listed separately as alternative items for the City's consideration.

9. After the closing date, evaluation and proposal clarification will commence, all of which will be conducted by the consultant selection team. The consultant selection team will make subsequent recommendations of approval to the City Council.

10. Consultants judged most responsive to the City's requirements may be invited for an interview. No consultant shall be allowed to alter or amend its proposal through the use of the interview process.

11. Where two or more consultants desire to submit a single proposal in response to this RFP, they should do so on a prime/sub-contractor basis rather than as a joint venture. The City intends to contract with a single firm and not with multiple firms doing business as a joint venture.

12. Firms intending to pursue this proposal in a “prime/sub-contractor” basis must identify any portion of the scope of work that will be subcontracted. Include the subcontractor’s qualifications and key personnel, telephone number and contact person. The City reserves the right to approve or reject all consultants or internal staff performing consulting services, proposed by the consultant during or after the consultant review and selection process.

13. The Consultant warrants and represents that it presently has no interest and agrees that it will not acquire any interest which would present a conflict of interest under California Government Code Sections 1090 et seq., or Sections 87100 et seq., during the performance of services under any Agreement awarded. The Consultant further covenants that it will not knowingly employ any person having such an interest in the performance of any Agreement awarded. Violation of this provision may result in any Agreement awarded being deemed void and unenforceable.

Attachments
A. Professional Services Agreement
B. Levine Act Disclosure
------ End of RFP -----

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About TeamCivX
TeamCivX brings decades of experience helping cities and other public agencies navigate the ballot measure process to achieve locally controlled funding. We’ve helped secure tens of billions of dollars in locally controlled funding for jurisdictions throughout our home state of California, including countless successful projects right here in the Bay Area. We are project management and communications consultants with unmatched experience evaluating the feasibility of local funding measures, designing measures for the ballot that align with community priorities, and implementing informational communication efforts to raise awareness of funding needs. We pride ourselves on being good team players who listen to our clients; seamlessly collaborate with pollsters, financial advisors, bond counsel, and other municipal advisors; and develop unique approaches for each client that maximize their likelihood for success while maintaining a local, homegrown feel.

Unmatched experience and Expertise
TeamCivX has passed hundreds of ballot measures for a diverse set of municipalities throughout our home state of California. We maintain a success rate of over 90% and our experience includes parcel taxes, bond meaures, sales taxes, utility taxes (UUTs), hotel taxes (TOTs), CFDs, property transfer taxes, vacancy taxes, assessments, business license taxes, fees, and more.

Specifically in San Mateo County, we’ve helped pass dozens of revenue mesaures for the majority of the school districts and cities, as well as SamTrans, Caltrain, and the County. We know the Peninsula well and enjoy working close to home. While we are a fully remote company, our partners are all based in the Bay Area.

Partner Jeremy Hauser, who would be your project leader, is just a 30 minute drive away in San Francisco.

Commitment to client service
We view our working relationship with our clients as a partnership. We know public finance measures, and you know your community. We also understand that the reputation of your agency is at stake when you seek funding from your community. Your measure and the related messaging must help you strengthen your relationship with your neighbors. We take the responsibility of communicating with your constituents seriously and give it the professional time and attention it deserves.

Experts in Today’s Communication tools
A big part of our job is to help you get the right message to the right people to build public awareness of your funding needs. People receive their information in a variety of ways these days. We are experts in traditional communication methods including direct mail and earned media, as well as new media, including digital advertising, social media, and video.

Taxpayer-funded communications require a specific tone and tenor. We have extensive experience helping cities craft effective public informational materials that don’t cross the line into advocacy. We work closely with our clients and their legal counsel to ensure our public outreach efforts represent best practices, reflect community values, and make the case for your need in plain, easy to understand language that’s legally compliant.

About True North Research, TeamCiVX’s Recommended Pollster For this project, TeamCivX is partnering with True North Research, the pollster of record for the City of San Carlos for the past 15 years. True North is a full-service survey research firm that is dedicated to providing California municipalities and public agencies with a clear understanding of the opinions, perceptions, priorities, and behaviors of their residents and customers. Through designing and implementing scientific surveys, focus groups, and one-on-one interviews, as well as expert interpretation of the findings, True North helps its clients to move with confidence when making strategic decisions in a variety of areas — such as performance measurement, planning, establishing budget priorities, passing revenue measures, and developing effective public engagement/communications strategies.

As specialists in research methodology and the public sector, True North’s clients span the full range of public agencies including cities, counties, special districts, utilities, councils of government, educational institutions, state agencies, and federal agencies. The diversity of our public sector clientele has enabled us to perform research at the local, regional, state, national, and international levels.

True North Research was co-founded in 2002 as a two-person survey consulting firm by Dr. Timothy McLarney and Mr. Richard Sarles and is a certified Small Business Enterprise (SBE) and S-Corporation in good standing with the State of California. Although we have had many opportunities to expand our business during the past 23 years, we have chosen to maintain True North as a two-person research team. Dr. McLarney and Mr. Sarles still manage every aspect of every True North project. We are an extremely efficient, collaborative team of two — and we have chosen to keep it that way so that our clients continue to receive exceptionally high-quality customer service and research insights.

Our approach to managing projects is one of the things that makes True North unique, as every task of your study will be performed by a highly trained principal with 25+ years of experience. Put another way: You do not need to pick up the phone to get the attention of our principals — we are there with you at every step, doing (not delegating) the research.

Winning with Accurate, Reliable Data
TeamCivX has helped public agencies across California secure the funding they need through successful revenue measure elections. While we’ve worked up and down California, our roots are in the Bay Area, where we bring deep local experience and a strong track record. Our partners have passed more measures than any firm in our industry and have maintained a 90% success rate, well above the state average. A complete list of our clients is included as an attachment to this proposal.

True North has the highest verifiable success rate in the State of California for revenue measures over the past decade (93%), and a 100% success rate in seven of the past ten election cycles. To date, we have helped our clients raise over $42 billion in voter-approved funding, including more than $7 billion in the past year alone (2024) to support essential services and facilities. Our experience includes all types of revenue measures including general and special sales taxes, parcel taxes, bonds, transient occupancy taxes, utility users’ taxes, real estate transfer taxes, business license taxes, benefit assessments, and property-related fees.

Relevant Case Studies
City of Santa Clara
In 2024, TeamCivX helped the City of Santa Clara place — and eventually pass — Measure I, a $400 million bond, on the ballot. The City needed to address aging infrastructure, including roads, storm drains, and fire stations. With careful planning and a targeted communications strategy, TeamCivX helped the City engage residents through community meetings, surveys, mailings, social media, and other outreach efforts. On Election Day, Measure I passed with 69% support.

City of San Mateo
TeamCivX and True North partnered with the City of San Mateo to help pass a key amendment to its General Plan. San Mateo has a complex history with zoning, with several past measures leaving a lasting impression on the community. Working with True North, we surveyed voters to gauge support and align the amendment’s goals with community priorities. TeamCivX equipped City officials with the tools and messaging needed to engage effectively. A robust communications plan was developed and implemented, leading to a broad coalition of support. City officials met with over a hundred leaders and community organizations to bring them along throughout the process. Despite vocal opposition, Measure T passed with 59% support.

True North and the principals at TeamCivX also assisted the City of San Mateo with voter opinion research and strategic advice that led to the successful passage of a transient occupancy tax (2020) and a real property transfer tax (2022).

City of San Bruno
Facing aging infrastructure and over $500 million in estimated needed repairs, the City of San Bruno turned to TeamCivX for assistance. TeamCivX guided the City through the process of placing Measure Q, a $102 million bond, on the ballot. Working closely with City officials, a comprehensive communications strategy was developed and executed to engage residents and build a compelling narrative around the need for funding. On Election Day, Measure Q passed with 73% support.

City of Burlingame
The City of Burlingame has partnered with TeamCivX partners on multiple successful measures. In 2022, we helped the City place Measure X, a business license tax, on the ballot. The measure passed with 75% of the vote, generating an additional $2.5 million in annual local funding. This followed our work on the successful passage of Measure I, a sales tax measure approved by 63% of voters in 2019.

City of Manhattan Beach
In 2024, TeamCivX and True North Research partnered with the City of Manhattan Beach to support two revenue measures through survey research, strategic guidance, and communications consulting. The first measure — a Prop 218 stormwater fee to address failing storm drains — was approved by 52% of property owners. Later that year, the City returned to the ballot with a general sales tax measure, which passed with 57% support from voters.

City of Chula Vista
To renew a critical source of funding, the City of Chula Vista turned to TeamCivX and True North Research for support on its local sales tax measure. The team provided community priority surveys, revenue measure feasibility research, strategic guidance, and communications support. These efforts culminated in the successful passage of Measure P in 2024 with 73% voter approval. The partners of TeamCivX and True North also supported the original passage of the sales tax in 2016, as well as a sales tax increase approved by voters in 2018.

City of Modesto
After suffering a loss at the ballot box using a different consultant team, the City of Modesto selected TeamCivX and True North Research to design and conduct baseline and tracking surveys, provide strategic advice, and provide communications for a general sales tax measure. After thorough research and an extensive communications strategy, Measure H was placed on the November 2022 ballot and approved by 63% of voters.

City of San Marcos
Facing a looming funding deficit, the City of San Marcos partnered with TeamCivX and True North Research to conduct baseline survey research and provide strategic consulting. City leaders were equipped with the tools and insights needed to execute a robust communications and engagement strategy. On Election Day, Measure Q passed with 60% support.

We are happy to provide more case studies upon request.

Jeremy Hauser — Partner, TeamCivX
A Bay Area native, Jeremy grew up in Oakland and Moraga and attended UC Davis, where he earned degrees in both Political Science and Communications, graduating with honors in each.

Jeremy was first bitten by the campaign bug while working on the SF Mayor’s race in 2011 and hasn’t looked back since. He did a stint in Washington DC, working for a top polling firm where he learned the incredible power of sound analytics and gained significant insight into the art of targeted messaging. He also spent an election cycle working in Denver, leading his candidate to a sweeping victory, seeing firsthand the benefits of a diligent and unrelenting grassroots effort.

For the past decade, Jeremy has focused his skillset as a General Consultant here in California, securing much-needed funding for cities, schools, housing, and public transit. Jeremy rarely works with a client once — his clients value his ability to develop meaningful relationships and his willingness to roll up his sleeves and work tirelessly to execute a winning strategy.

His creative approach to multimedia communication — blending traditional direct mail with new media digital strategies — has helped his clients stand out from the crowd and win hard-fought races. And as a former Field Organizer, he takes a very hands-on approach in designing effective grassroots campaigns. His clients win in the mailbox, online, on TV, and at the doors.

Jeremy is proud to be a Founding Partner of TeamCivX. He lives in Noe Valley with his wife and regularly spends time in San Mateo County, visiting his in-laws, family, and friends in Foster City, Burlingame, and San Mateo.

Dr. Timothy McLarney — President,True North
As President of True North, Dr. McLarney leads the design, analysis, reporting, and presentation tasks for every True North study. He has occupied a lead role in over 1,500 research studies for public agencies in California and across the nation, and has more than 25 years of experience in survey methodology, statistics, public opinion analysis, and providing datadriven strategic advice to public agencies. To date, Dr. McLarney’s research has led to over $42 billion in voter-approved revenue measures at the local level in California.

Dr. McLarney is a nationally recognized expert in survey research methodology, sampling theory, weighting, and the use of statistical methods to generalize survey results. His research has been published in academic journals and has earned him honors including the Andrew Mellon Fellowship (Cornell University), Sage Fellowship (Cornell University), and the title of Visiting Scholar at the Institute of Governmental Studies at UC Berkeley. He has also served as an independent expert witness in survey research methodology for California legal cases.

Dr. McLarney earned his Ph.D. and M.A. in Government from Cornell University with an emphasis in survey methodology, sampling theory, data science, and public opinion analysis, as well as a Bachelor’s degree in Politics from UC Santa Cruz. Dr. McLarney has also had the privilege of being San Carlos’ chosen research partner for 15 prior community surveys.

Phase 1: Feasibility Assessment — June-August 2025
TeamCiVX methodology and scope
During Phase 1 — and throughout the entire process — TeamCivX will assume the role of project lead of all team members, working in partnership with True North Research to first conduct a reliable voter survey to help set your measure on the right path. We’ll help ensure you are asking the right strategic questions, including:
• Is a bond measure or parcel tax feasible?
• Does a measure stand a reasonable chance of achieving the 2/3 passage threshold? If not, what other options are available to us?
• What bond or parcel tax amount and rate fits within the tolerances of your community? • What projects and facility improvements are the top priorities for your voters? • Are there controversial projects that should be avoided? • Does sufficient awareness of your infrastructure and funding needs exist or is additional informational outreach needed?
• When is the right time to go to the ballot? The next election? A future election? • How does projected voter turnout in upcoming elections impact a bond or parcel tax proposal? • What other competing measures or issues are on the horizon that could impact your measure? • How does the economy and political environment impact your measure? To help answer these questions, TeamCivX will conduct a thorough assessment of the local political landscape, analyze past election results, and work with True North to design a statistically reliable opinion survey of your local voters.

Our specific scope for this phase of work includes:
• Develop potential strategies to meet your funding needs to be tested in polling. • Collaborate with True North, your financial advisor, legal counsel, all city working groups, and any other consultants to design, conduct, and analyze a revenue measure feasibility survey of voters. • Conduct a demographic analysis of voters in your city to analyze how they break into key sub-groups by age, ethnicity, political party, length of residency, and other key criteria. • Analyze past election results in your city and region to understand voter turnout trends and other relevant voting patterns.
• Research other local tax proposals and issues that may be heading to an upcoming ballot that could compete with your ballot measure.
• Make specific recommendations regarding the optimal election date, bond amount, tax rate, project priorities, and other important ballot measure features.

True North methodology and scope
If the ultimate goal of this study is to enable the City to make sound, strategic decisions based upon the data that is collected, it is critical that the data be collected according to rigorous methodological standards. Indeed, although it may be easy to conduct a “survey”, it is quite challenging to design and implement a survey that A) produces valid and reliable measures of the opinions and behaviors of interest, and B) produces data that is representative of the population of voters that is the focus of a study. Only by satisfying each of these conditions will the proposed study produce data that is trustworthy and thus a sound basis for making decisions.

Meeting the aforementioned conditions has become more difficult in recent years. Much has changed in terms of how voters receive information, the accessibility of voters through traditional recruiting methods, and their willingness to participate in community surveys. Caller-ID, SPAM filters, habitual call-screening, and busy lifestyles have made it more difficult to reach respondents in general, leading to lower response rates and greater response bias when relying on just one or two recruiting methods. In order to continue producing statistically reliable measures of their voters’ opinions, priorities and behaviors, the research methodologies that cities employ for revenue measure surveys must adapt to these new challenges.

The methodology that we recommend in this section is designed to do just that — adapt to these challenges by employing innovative techniques that will ensure statistically reliable results. For San Carlos, we propose to use a stratified & clustered random sampling methodology that ensures a representative sample of San Carlos voters who are likely to participate in the elections of interest (e.g., November 2026). We also recommend using a three-pronged recruiting strategy of email invitations, text invitations, and telephone calls to recruit participation in the survey and a mixed-method data collection methodology that allows sampled respondents the flexibility of participating by telephone or online at a password-protected web site in their preferred language (English or Spanish). Designed, tested, and refined by True North over the past 15 years, our recommended survey approach has proven to increase participation rates, reduce response bias, better engage traditionally hard-to-reach subgroups, and increase the overall accuracy and reliability of revenue measure surveys.

The scope of services that we propose to perform for the City includes all tasks associated with designing, conducting, and analyzing the survey, as well as presenting the results. To accommodate the City’s interest in exploring both a bond and a parcel tax, we recommend using a split-sample approach whereby half of the random sample (300) will receive a survey focused on a bond and the remaining half will receive a parcel tax version (300). This will provide a clean, apples-to-apples comparison of the two potential measures and avoid position-order bias that occurs when asking the same respondent about two possible revenue measures.

Briefly, the scope of services for the baseline survey (and optional tracking survey) includes:
• Meet with the City to thoroughly discuss the research objectives and methodology for the study, as well as discuss potential challenges, concerns, and issues that may surround the study. • Develop a stratified and clustered random sample of voters who—based on their voting history and registration status — are likely to participate in the election of interest (November 2026, with June 2026 subset).
• Develop a draft questionnaire for the City’s review and make revisions as needed until all parties approve of the instrument.
• Pre-test the survey instrument to ensure its integrity. • Web program the finalized survey instrument to allow respondents to participate online at a secure, password-protected survey site.
• CATI (Computer Assisted Telephone Interviewing) program the same survey instrument to ensure accurate and reliable data collection for respondents who prefer to participate by telephone. • Professionally translate the survey into Spanish.
• Recruit voters to participate in the survey using a combination of email, text, and telephone calls. • Complete at least 600 quality interviews (300 per version) according to the sampling plan and a strict interviewing protocol. A sample of this size will produce survey estimates that more than meet the academic standard for statistical reliability (+/- 4% at the 95% confidence level). • Process the data, which includes conducting validity checks, cleaning, recoding, coding open-end responses, and adjusting for strategic oversampling (if used) through a statistical procedure known as “weighting”.
• Prepare an initial topline report that presents the overall findings of the survey. • Prepare a thorough report on the findings, including a detailed question-by-question analysis, description of the methodology, an executive summary of the key findings and conclusions/recommendations, as well as graphics showing how the answers varied by subgroups of voters. The report will include extensive full-color graphics displaying the findings, as well as an insightful narrative discussion of the results and their implications. • Prepare an electronic copy of the final report to allow the City to reproduce the report as needed. • Prepare a PowerPoint presentation of the results and present the results to the City. • Be available to assist and provide advice to the City after the survey is complete.

Phase 2: Awareness Building — September 2025-March 2026 If polling indicates a path forward for a revenue measure, our next step is to develop and implement an informational communications plan to raise awareness of your infrastructure and funding needs, while also introducing your proposed measure and providing opportunities for community input. While cities and public agencies are legally prohibited from advocating for the passage of a measure, you can educate and inform your community about your needs and plans.

We would recommend a robust public outreach and engagement process in late 2025 and early 2026, built around multiple “communication waves” featuring direct mail, digital, social media, and email content. We also recommend significant stakeholder outreach to dovetail with these broad, paid communication efforts, to ensure you are educating key members of your community and soliciting their feedback one-on-one. We will advise you on which local leaders, elected officials, business organizations, and community groups to engage with (and how best to engage with them).

Specifically, our scope will include the following components:
• Develop informational messaging and fact sheets to be distributed at city and community functions. • Provide content related to your funding needs and proposed measure to be added to the City’s website, used in social media, and included in email updates and newsletters. • Prepare PowerPoint presentations for public and community meetings. • Write, design, and produce mailings and advertising to inform local residents. • Develop strategies and plans to inform internal stakeholder groups. • Develop strategies and plans to inform external groups including elected leaders, business leaders, ethnic community leaders, faith community leaders, taxpayer groups, and others.

TeamCivX will write all copy, handle the graphic design, coordinate printing and mailing, and place any ad buys as needed. We will just need for you to review content and designs and make sure the information is accurate and has the right feel for your community. We will also need to coordinate with those who manage the City’s various social media accounts.

Phase 3: Measure Development — April 2026-August 2026
The deadline to qualify for the November 2026 ballot is August 7, 2026, but we’ll want to be prepared with final measure language, tax rates, and other key details well before that. By beginning that work in the spring of 2026, we’ll ensure that your City Council has all of the details and requisite documentation to qualify for the ballot well before the August deadline.

In order to ensure that we are grounding all final decision-making in solid, quantifiable data, True North will conduct a tracking survey to gauge voters’ opinions regarding the measure and help fine-tune measure components. The survey will allow us to track support over time within the community and determine if the measure is election-ready. Based on the results of the feasibility assessment, community input received during the awareness-building efforts and the results of the tracking survey, we will have what we need to help you finalize your measure for the ballot. We’ll ensure that it is closely aligned with the community’s priorities and has the best chance for success. We will work closely with your financial advisor, legal counsel, and other experts to accomplish this work, including:
• Recommend a final bond or parcel tax amount, tax rate, and other specifics. • Refine the final project list to reflect community priorities and ensure projects are described in clear language the general public will understand.
• Work with legal counsel to develop the 75-word ballot question. • Work with legal counsel to develop and refine all language that will appear in the ballot pamphlets mailed to all voters.
• Present recommendations, documents, resolutions, and ordinances to the City Council for approval. • Work with local elections officials to ensure your measure qualifies for the ballot.

With these steps complete, your measure will be on the ballot. Since cities cannot advocate for ballot measures, an independent campaign committee will need to be formed to run an advocacy campaign in support of the measure.

TeamCivX provides campaign consulting services to independent campaign committees, but those services are not part of this proposal since the campaign must be led by an independent group.

City of San Mateo — Alex Khojikian, City Manager
(714) 308-6400, [email protected]
TeamCivX and True North partnered with the City of San Mateo to help pass a key amendment to its General Plan in 2024, as well as a transient occupancy tax (2020) and a real property transfer tax (2022). For the most recent measure, we surveyed voters to gauge support and align the amendment’s goals with community priorities, then equipped City officials with the tools and messaging needed to engage effectively. A robust communications plan was developed and implemented, leading to a broad coalition of support. City officials met with over a hundred leaders and community organizations to bring them along throughout the process. We also worked previously with Alex in Redwood City on a successful sales tax measure, during his time there as Assistant City Manager.

City of San Bruno — Nick Pegueros, Chief financial officer (650) 410-0538, [email protected]
Facing aging infrastructure and over $500 million in estimated needed repairs, the City of San Bruno turned to TeamCivX for assistance. TeamCivX guided the City through the process of placing Measure Q, a $102 million bond, on the ballot. Working closely with City officials, a comprehensive communications strategy was developed and executed to engage residents and build a compelling narrative around the need for funding. On Election Day, Measure Q passed with 73% support.

City of Burlingame — Donna Colson, Councilmember
(650) 678-0952, [email protected]
The partners at TeamCivX have worked with Donna for more than a decade on many successful bonds, parcel taxes, sales taxes, and business licenses taxes for both Burlingame School District and the City of Burlingame.

Most recently, the City of Burlingame partnered with the TeamCivX team to address ongoing funding needs. In 2022, the City placed Measure X, a business license tax, on the ballot. With support from TeamCivX, the measure passed with 75% of the vote, generating an additional $2.5 million annually. TeamCivX assisted in assessing the feasibility of the measure, communicating the measure to the community, and placing the measure on the ballot.

Redwood City School District — John Baker, Superintendent (650) 482-2230, [email protected]
TeamCivX partners have worked with John on multiple successful bonds and parcel taxes for Redwood City School District. In 2022, the Redwood City School District placed Measure S, a $298 million bond. on the ballot. The TeamCivX partners assisted the District in their feasibility assessment, communications, and outreach culminating in Measure S passing with 60% of residents voting in favor.

Belmont-redwood Shores School District — Dan Deguara, Superintendent (650) 620-2703, [email protected]
Dan and TeamCivX have a long track record of successful bond and parcel tax measures for BelmontRedwood Shores schools. This past November, TeamCivX worked with the Belmont-Redwood Shores School District to place a parcel tax on the ballot. After executing the designed communications and outreach strategy, the parcel tax passed with 67% approval.

Burlingame School District — Marla Silversmith, Superintendent (650) 259-3828, [email protected]
The Burlingame School District placed Measure GG, a parcel tax, on the ballot this past November. The District worked with TeamCivX to assess the measure’s feasibility, conduct outreach to the community, and deploy a communications strategy. On Election Day, Measure GG passed with 74% support.

San Carlos School District — Ralph crame, Chief financial officer (650) 922-9466, [email protected]
Our work with Ralph was during his time at Millbrae School District, partnering on many successful bonds and parcel taxes. Most recently, we helped the Millbrae School District place and pass Measure J, a $95 million bond, on the November 2024 ballot. This followed the successful passage of Measure A, a parcel tax approved during a special election in 2023. Measure J passed with 64% support, and Measure A passed with 71%.

Sequoia union high school district — Crystal Leach, Associate Superintendent of Administrative Servces
(650) 369-1411, [email protected]
TeamCivX and True North provided baseline and tracking research, strategy, and communications for Sequoia Union High School District’s successful $591 bond on the November 2022 ballot, Measure W.

Office of Supervisor Lisa Gauthier — Marci dragun, Chief of Staff (650) 599-1021, [email protected]
Marci has worked with TeamCivX partners on multiple countywide efforts, including the Measure K campaign for afforable housing in 2016 and the SMCStrong efforts in the wake of the Covid-19 pandemic.

SAMCEDA — Rosanne foust, President
(650) 413-5600 ext. 1, [email protected]
Rosanne has worked with TeamCivX partners on multiple countywide efforts, including the aforemetnioned Measure K, Measure W for SamTrans, and Measure RR for Caltrain.

We do not propose any modifications to the scope of work.

TeamCivX Pricing
As is the standard in our industry, TeamCivX contracts on a monthly fee basis during the period of our engagement. For a city the size of San Carlos, our monthly consulting fee is $7,500.

Our fee will not change regardless of how many times you need us on the phone, via email, or in-person.

TeamCivX doesn’t want you to hesitate to call when you need us. Jeremy will be your primary point of contact and available to chat seven days a week.

If polling indicates a viable path forward, we often recommend a supplemental budget for informational direct mail. We estimate an informational mailer to all approximately 21,000 registered voters to cost between $16,500-$21,000, depending on the exact specifications.

As part of our contract, we will assist San Carlos in utilizing all free media and current online resources to provide information to the public and supplementing direct mail communications with coordinated digital content. In addition, the City may wish to allocate additional resources to paid Facebook or Digital Advertising.

Digital pricing varies based on the size, scope, and duration of the program and is priced separately.

True North Pricing
The cost for True North Research to conduct a start-to-finish survey research project with a sample size of at least 600 completed interviews using a split-sample approach to test a bond and parcel tax, including research design, questionnaire drafting, sample acquisition, Spanish translation, data collection, data processing, analysis of results, and preparation of reports, memos, or presentations as needed, is $33,500.

If needed, a tracking survey could be completed for $28,500, assuming the tracking survey is focused on one type of measure at this point (bond or parcel tax). This fee is all inclusive of all tasks and deliverables, with the exception of travel-related expenses (if needed).

Not-To-Exceed Amount
At this stage in the process, without polling to indicate the likelihood of success and the informational communication strategies needed, providing a not-to-exceed amount is a bit difficult. That being said, if we were to err on the side of caution, we would plan on a fully-fledged communications, outreach and stakeholder engagement plan, including two polls and utilizing the entire calendar available to us. Under that scenario — which would include four mailers, digital advertising, two polls, and work running from June 2025-August 2026 — $275,000 would be a relatively conservative not-to-exceed amount.

However, if cost is a concern, we could absolutely develop a plan that could work within your budget. On a slightly shorter timeline, with fewer mail pieces, no paid digital content, and without a tracking poll, we could complete the above work for $150,000.

Bottom line: we will work with you on a plan and budget that feels comfortable for you, while ensuring we maximize our chances for success.

The City’s standard professional services agreement is acceptable as written. We will provide the necessary insurance and other documentation as required, should we be chosen to lead this effort.

See attached.

Updated 1.1.25
California Levine Act Statement
California Government Code Section 84308, commonly referred to as the "Levine Act," prohibits any San Carlos City Council Member from participating in any action related to a contract or application if they receive any political contributions from the business or applicant totaling more than $500 within the previous twelve months, and for twelve months following the date of a final decision.

The Levine Act also requires a member of the San Carlos City Council who has received such a contribution to disclose the contribution on the record of the proceeding.

Current San Carlos City Council Members are listed at: www.cityofsancarlos.org/CityCouncil.

Proposers are responsible for accessing this link to review the names prior to answering the following questions:

1. Have you or your company, or any agent on behalf of you or your company, made any political contributions of more than $500 to any San Carlos City Council Member in the 12 months preceding the date of the submission of your proposal or application, or the anticipated date of any Council action?
Yes. List Council Member(s):

No
2 Do you or your company, or any agency on behalf of you or your company, anticipate or plan to make any political contribution of more than $500 to any San Carlos City Council Member in the 12 months following any Council action related to your proposal or application?
Yes. List Council Member(s):

No
Answering yes to either of the two questions above does not preclude the San Carlos City Council from awarding a contract or approving an application or any subsequent action. It does however, preclude the identified Council Member(s) from participating in any actions related to your proposal or application.
_________________ _____________________________
Date Signature of authorized individual
_____________________________
Company/Applicant Name
X
X
TeamCivX
4/28/2025

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June 09, 2025 Packet Pg. 61
Statewide Measures
Proposition 1 - Veterans and
Affordable Housing Act
Proposition 2 - Homeless Mental
Health Housing Act
Unified School Districts
Alameda USD
Albany USD
Amador County USD
Arcadia USD
Azusa USD
Baldwin Park USD
Bassett USD
Beaumont USD
Brea Olinda USD
Cabrillo USD
Capistrano USD
Carlsbad USD
Castro Valley USD
Charter Oak USD
Claremont USD
Conejo Valley USD
Corona-Norco USD
Cotati-Rohnert Park USD
Culver City USD
Davis Joint USD
Downey USD
Dublin USD
El Rancho USD
Fairfield-Suisun USD
Folsom Cordova USD
Fremont USD
Garden Grove USD
Glendale USD
Hayward USD
Irvine USD
Jurupa USD
Kerman USD
La Cañada USD
Lake Elsinore USD
Lammersville USD
Las Virgenes USD
Lompoc USD
Long Beach USD
Los Alamitos USD
Los Angeles USD
Madera USD
Manhattan Beach USD
Manteca Unified USD
Martinez USD
Milpitas USD
Monterey Peninsula USD
Moorpark USD
Moreno Valley USD
Morgan Hill USD
Morongo USD
Mount Diablo USD
Mountain Empire USD
Napa Valley USD
Newark USD
New Haven USD
Novato USD
Oak Park USD
Orange USD
Pajaro Valley USD
Palo Alto USD
Palos Verdes Peninsula USD
Paradise USD
Patterson Joint USD
Pleasanton USD
Poway USD
Riverside USD
Sacramento City USD
Saddleback Valley USD
San Jose USD
San Lorenzo Valley USD
San Marcos USD
San Marino USD
San Ramon Valley USD
Santa Ana USD
Santa Monica-Malibu USD
Simi Valley USD
Snowline Joint USD
Sonoma Valley USD
South Pasadena USD
South San Francisco USD
Tahoe Truckee USD
Tustin USD
Ukiah USD
Val Verde USD
Vallejo City USD
Vista USD
Walnut Valley USD
Washington USD
Westa Contra Costa USD
Woodland Joint USD
Yucaipa-Calimesa Joint USD
Elementary School Districts
Alisal Union SD
Alpine Union SD
Alta Loma SD
Alum Rock Union Elementary SD
Anahiem Elementary SD
Auburn Union SD
Beardsley SD
Belmont-Redwood Shores SD
Berryessa Union SD
Bonsall SD
Buena Park SD
Burlingame SD
Cambrian SD
Campbell Union SD
Castaic Union SD
Central SD
Centralia Elementary SD
Cupertino Union SD
Del Mar Union SD
Miller Creek SD
Fountain Valley SD
Franklin-McKinley SD
Fruitvale SD
Fullerton SD
Huntington Beach City SD
Jefferson Elementary SD
Kentfield SD
La Mesa-Spring Valley Union SD
Lakeside Union SD
Larkspur-Corte Madera SD
Live Oak SD
Loma Prieta Joint Union SD
Los Altos SD
Los Gatos Union SD
Lowell Joint SD
Menifee Union SD
Millbrae SD
Modesto City Elementary SD
Moraga SD
Moreland SD
Mountain View Whisman SD
Norris SD
North Sacramento SD
Oakley Union Elementary SD
Ocean View SD
Orinda Union SD
Pacifica SD
Palmdale SD
Perris Elementary SD
Petaluma City Elementary SD
Portola Valley SD
Ravenswood City SD
Redwood City SD
Reed Union SD
Romoland SD
Rosemead SD
Roseville City SD
San Carlos SD
San Mateo-Foster City SD
San Rafael Elementary SD
Santa Cruz City Elementary SD
Santa Rita Union SD
Santa Rosa Elementary SD
Saratoga Union SD
Saugus Union SD
Savanna SD
Soquel Union Elementary SD
Sulphur Springs Union SD
Union SD
Victor Elementary SD
Westminster SD
High School Districts
Campbell Union HSD
Chaffey Joint Union HSD
Delano Joint Union HSD
East Side Union HSD
El Dorado Union HSD
Fullerton Joint Union HSD
Galt Joint Union HSD
Jefferson Union HSD
Los Gatos-Saratoga Union HSD
Mountain View-Los Altos HSD
Nevada Joint Union HSD
Oxnard Union HSD
Perris Union HSD
Petaluma Joint Union HSD
Placer Union HSD
Roseville Joint Union HSD
San Benito HSD
San Dieguito Union HSD
San Mateo Union HSD
San Rafael HSD
Santa Cruz City HSD
Santa Rosa HSD
Sequoia Union HSD
Tamalpais Union HSD
William S. Hart Union HSD
Community
College Districts
Allan Hancock College
Antelope Valley College
Cabrillo College
Chabot-Las Positas CCD
Chaffey College
College of the Canyons
College of Marin
College of the Siskiyous
Contra Costa CCD
Foothill-De Anza CCD
Gavilan College
Glendale College
Hartnell College
Lane Community College
Mendocino College
Merced CCD
MiraCosta College
Monterey Peninsula College
Napa Valley College
Pasadena City College
Peralta CCD
Mt. San Jacinto CCD
Rancho Santiago CCD
Riverside CCD
San Bernardino CCD
San Joaquin Delta CCD
Santa Barbara City College
Santa Monica College
Santa Rosa Junior College
Yuba College
Hospitals and Healthcare
Salinas Valley Memorial Healthcare
System
Seton Medical Center
Valley Health System*
*private-side campaign only
The unmatched experience of TeamCivX’s five partners

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June 09, 2025 Packet Pg. 62
Cities and Counties
LA County Homeless
Marin County
Napa County
Placer County
San Mateo County
Santa Clara County
Santa Cruz County
Solano County
Sonoma County
City of Adelanto
City of Alameda
City of Barstow
City of Beverly Hills
City of Burlingame
City of Campbell
City of Chula Vista
Town of Corte Madera
City of Crescent City
City of Del Mar
City of Diamond Bar
City of Downey
City of Emeryville
City of Fairfield
City of Foster City
City of Fullerton
City of Glendale
City of Gustine
City of Kerman
City of Lancaster
City of Lafayette
City of Laguna Beach
City of La Verne
City of Lomita
City of Los Altos
City of Madera
City of Merced
City of Montebello
City of Morgan Hill
City of Murrieta
City of Napa
City of Oceanside
City of Ontario
Town of Orinda
City of Pacifica
City of Palm Springs
City of Palmdale
City of Palo Alto
City of Paramount
City of Pleasant Hill
City of Pomona
City of Redlands
City of Redwood City
City of Salinas
Town of San Anselmo
City of San Bernardino
City of San Mateo
Transportation
BART (Santa Clara County)*
Caltrain*
Contra Costa County Transportation Authority*
Fresno County Transportation Authority*
Merced County Association of Governments
Metropolitan Transportation Commission*
Monterey-Salinas Transit
Napa County Transportation Agency
Placer County
Riverside County Transportation Commission
San Mateo County Transit District
Santa Cruz County Regional Transportation
Commission
Sonoma County Transportation Authority*
Stanislaus County Transportation*
Transportation Agency of Monterey County*
Transportation Authority of Marin*
Truckee/North Tahoe Transportation Agency
*private-side campaign only
Parks, Open Space and Water Districts
Alameda County Clean Water Program
Desert Recreation District
East Bay Regional Parks District
Greater Vallejo Recreation District
Hayward Area Recreation District
Los Angeles County Flood Control District
Los Angeles County Regional Park and Open
Space District
Marin County Parks/MALT*
Midpeninsula Regional Open Space District
Monterey Peninsula Regional Park District
Napa County Regional Park and Open Space
District/Napa Land Trust*
Peninsula Open Space Trust
Santa Clara Valley Open Space Authority
Santa Clara County Parks
Santa Clara Valley Water District
San Francisco Bay Restoration Authority*
Sonoma County Agricultural Presevation and
Open Space District
*private-side campaign only
Fire Districts
Crescent Fire Protection District
East Contra Costa Fire Protection District
Fresno County Fire Protection District
Los Angeles County Fire
Marin County Fire Department
Northstar Fire
North Tahoe Fire Protection District
Santa Cruz County Fire District CSA48
Truckee Fire Protection District
Libraries
Garfield County Public Libraries
Los Altos Library
Marin County Free Library
Pacifica Library
Santa Cruz County Library
South Pasadena Library
Whittier Library
Elected Officials
Dave Pine, Chair, San Mateo County
Board of Supervisors
Belia Ramos, Chair, Napa County Board of
Supervisors
Anne Cottrell, Napa County Board of Supervisors
Diane Dillon, Napa County Board of Supervisors
(retired)
Brad Wagenknecht, Napa County
Board of Supervisors (retired)
Tom Bates, Mayor of Berkeley (retired)
Judy Chirco, San Jose City Council (retired)
Linda LeZotte, San Jose City Council (retired)
Pam Foley, San Jose City Council
Peter Ortiz, San Jose City Council
Mary Luros, Napa City Council
Beth Painter, Napa City Council
David Oro, American Canyon City Council
Jeff Dodd, Napa Valley CCD Board of Trustees
TeamCivX.com
City of San Jose
City of San Rafael
City of Santa Cruz
City of Santa Fe
Springs
City of Santa Monica
City of Santa Rosa
City of South Lake
Tahoe
City of South Pasadena
City of Suisun City
Town of Truckee
City of Union City
City of Vacaville
City of Ventura
City of Watsonville
City of Whittier
Town of Windsor

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June 09, 2025 Packet Pg. 63
True North Research Clients
California Municipalities

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June 09, 2025 Packet Pg. 64
True North Research Clients
California Education
ABC USD El Segundo USD Monterey Peninsula College San Gabriel USD Acalanes HSD Escondido SD Monrovia USD San Jacinto USD
Albany SD Fairfax SD Moraga SD San Leandro USD
Alta Loma SD Fallbrook UHSD Moreno Valley USD San Marcos USD Alvord USD Fountain Valley SD Mother Lode SD San Marino USD Anaheim SD Fowler SD Mountain Empire USD Santa Ana USD
Anaheim UHSD Fruitvale SD Mountain View SD Santa Barbara CCD Antelope Valley UHSD Fullerton JUHSD Murrieta Valley USD Santa Clara USD Apple Valley USD Garden Grove USD Napa Valley USD Santa Cruz City SD Arvin SD Gavilan CCD Newhall SD Santa Cruz City HSD
Baldwin Park USD Glendale USD Newport-Mesa USD Santa Maria Bonita SD Banning USD Greenfield Union SD Nuview Union SD Santa Maria UHSD Beardsley SD Grossmont Cuyamaca CCD Oak Park USD Santa Paula USD Beaumont USD Grossmont HSD Oakland USD Saugus USD
Bellflower USD Irvine USD Ocean View SD Savanna SD
Bonsall USD Julian UHSD Orange USD Scotts Valley USD
Brea-Olinda USD Kerman USD Palomar CCD Sequoia UHSD
Buena Park SD La Canada USD Palos Verdes Peninsula USD Soka University Burbank USD La Habra City SD Panama-Buena Vista USD Solana Beach SD Cambrian SD La Mesa-Spring Valley SD Paramount USD South Pasadena USD Campbell UHSD Lafayette SD Pasadena CCD Standard SD
Capistrano USD Lake Elsinore USD Pasadena USD Sweetwater UHSD Carlsbad USD Lakeside SD Perris SD Tahoe-Truckee USD
Centralia SD Lancaster USD Perris UHSD Temecula Valley USD Charter Oak USD Larkspur-Corte Madera SD Piedmont USD Torrance USD Claremont USD Las Virgenes USD Poway USD Tracy USD
College SD Liberty HSD Rancho Santiago CCD Travis USD
College of the Desert Little Lake City SD Rim of the World USD Tustin USD Colton Joint USD Livermore Valley USD Rio Bravo-Greeley Union SD UCLA Compton USD Lompoc USD Riverside CCD Union SD
Coronado USD Los Alamitos USD Riverside USD Val Verde USD Corona-Norco USD Los Banos USD Romoland SD Victor SD
Covina Valley USD Lowell Joint SD Rosedale SD Vista USD Culver City USD Lucia Mar USD Sacramento City USD Walnut Valley USD Del Mar SD Lynwood USD Sacramento State University Washington SD Desert Sands USD Manhattan Beach USD Saddleback Valley USD West Covina USD Downey USD Martinez USD Salinas UHSD Willits USD
Eastside Union SD Menifee SD San Bernardino CCD Yosemite CCD East Whittier City SD Merced CCD San Bruno Park SD
Elk Grove USD MiraCosta CCD San Dieguito UHSD

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True North Research Clients
Federal, State, County & Special District
Alameda Hospital Marin General Hospital Salinas Valley Memorial Hospital Antelope Valley Hospital MarinHealth SamTrans
Bay Area Air Quality Management District Mesa Water San Benito Healthcare District Bay Area Open Space Council Metropolitan Transit System San Bernardino County Bay Area Rapid Transit Metropolitan Transportation Commission San Diego Association of Governments Bear Mountain Recreation and Park District Mission Oaks Recreation and Park District San Diego County Bear Valley Healthcare District Monte Vista Water District San Diego County Water Authority Big Bear Fire Authority Monterey Peninsula Regional Park and Recreation District San Diego Unified Port District California Air Resources Board Mountains Recreation and Conservation Authority San Diego Workforce Partnership California Department of Public Health Mountains Restoration Trust San Gorgonio Health Care District California Joint Powers Insurance Authority Nevada County San Joaquin Valley Air Quality Management District California Office of Traffic Safety New Mexico Department of Public Health San Jose International Airport Caltrans New York State Department of Transportation San Juan Water District Carpinteria-Summerland Fire Protection District Nipomo Community Services District San Luis Obispo Council of Governments Casitas Municipal Water District North County Transit District San Mateo County Centers for Disease Control & Prevention (CDC) North Kern-South Tulare Hospital District San Mateo County Parks and Recreation Foundation Conejo Recreation and Park District North Sonoma County Healthcare District Santa Barbara County Contra Costa Clean Water Program North Tahoe Public Utility District Santa Barbara County Association of Governments Contra Costa County Fire Protection District Novato Sanitary District Santa Clara County Housing Authority Contra Costa County Oak Valley Hospital Santa Clara Valley Open Space Authority Costa Mesa Sanitary District Olivenhain Municipal Water District Santa Clarita Valley Water Agency Cucamonga Valley Water District Orange County Council of Governments Santa Margarita Water District East Contra Costa Fire Protection District Orange County Fire Authority Santa Monica Mountains Conservancy East Valley Water District Orange County Transportation Authority Seneca Healthcare District Eden Health Otay Water District Solano Open Space Coalition El Dorado Hills Community Services District Palomar Health Southern California Association of Governments Elsinore Valley Municipal Water District Petaluma Healthcare District SR-91 Interregional Partnership Fair Oaks Recreation and Park District Placentia Library District State of California Feather River Recreation and Park District Placer County Tahoe Forest Hospital District Foothill Transit Pleasant Hill Recreation & Park District Tri-City Hospital District Fresno Area Express Pleasant Valley Recreation & Park District Truckee-Donner Recreation and Park District Fresno County Plumas Healthcare District Truckee Fire Protection District Goleta West Sanitary District Port of Long Beach Truckee Regional Library Healdsburg District Hospital Port of San Diego Trust for Public Lands I-15 Interregional Partnership Rancho Murieta CSD Washington Hospital Imperial County Transportation Commission Rancho Simi Park and Recreation District West Basin Municipal Water District Kaweah Delta Healthcare District Roaring Fork Transportation Authority West Valley Water District Kern Valley Healthcare District Rodeo-Hercules Fire Protection District Western Riverside Council of Governments Los Angeles Metro Authority Sacramento Area Council of Governments Valley Transportation Authority Madera County Transportation Authority Sacramento Metropolitan Air Quality Management District Ventura County Marin County Sacramento Municipal Utility District Yuba Water

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June 09, 2025 Packet Pg. 66

CITY COUNCIL

STAFF REPORT
MEETING DATE: June 9, 2025
ITEM TITLE: Adopt Ordinance 1624 Retitling and Amending San Carlos Municipal Code Section 15.04.110 F (6)(a) to Designate Fire Hazard Severity Zones for Local Responsibility Areas as Recommended by the California Department of Forestry and Fire Protection Pursuant to Government Code Section 51178.

RECOMMENDATION:

Staff recommend that the City Council adopt Ordinance 1624 retitling and amending San Carlos Municipal Code Section 15.04.110 F (6)(a) regarding designation of Fire Hazard Severity Zones (FHSZ) for Local Responsibility Areas (LRAs).

FISCAL IMPLICATIONS:

There is no fiscal impact.

Staff time may be required to coordinate with CAL FIRE, review the FHSZ maps, and facilitate the ordinance adoption process. Additional costs may arise if mitigation efforts are required. This effort may require interdepartmental coordination between the Fire Department, Community Development Department, Informational Technology Division, and City Clerk’s Office. However, these tasks can be completed with existing department budgets.

BACKGROUND:

On April 1, 2024, CAL FIRE's Office of the State Fire Marshal (OSFM) finalized the FHSZs for the State Responsibility Areas (SRA). The update process now extends to LRAs as mandated by Government Code Section 51178. This law requires CAL FIRE to classify areas into “moderate”, “high”, or “very high” fire hazard severity zones using consistent statewide criteria. The Fire Hazard Severity Zones are developed through a science and field-tested model that assesses various factors such as fire history, vegetation, flame length predictions, and typical weather patterns. The definitions are as follows:
• Moderate: Areas where wildland fire risk exists, but at a lower intensity or likelihood • High: Areas with significant fire risk due to fuel loads, slope, and fire weather • Very High: Areas with extreme fire behavior potential where fires are likely to be fast moving, intense, and difficult to control
The original FHSZ mapping process began in the late 1980s and was based on topography, fuel load, fire weather patterns, and historical wildfire data. These maps have long played a role in guiding where wildland-urban interface (WUI) building codes apply, defensible space standards are enforced, and fire hazard disclosures are required during real estate transactions. In recent

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June 09, 2025 Packet Pg. 67
years, California has experienced more frequent and destructive wildfires due to a combination of factors including climate change, prolonged drought, extended fire seasons, and increasing development along the wildland-urban interface.

In response, CAL FIRE initiated a comprehensive update of the FHSZ in 2022, using advanced fire science and modeling techniques to reflect the evolving wildfire landscape. This effort resulted in updated SRA maps finalized in late 2023, and local jurisdictions are now required to review and adopt updated FHSZ maps for their respective LRAs. As part of this statewide effort, CAL FIRE issued a major update to its LRA FHSZ maps for the first time since 2007. In November 2024, the City of San Carlos received official notice that portions of the city have been identified for updated FHSZ in the LRA under this new mapping initiative. CAL FIRE has identified the City of San Carlos as potentially containing Moderate and High FHSZ.

Per Government Code Sections 51178.5 and 51179, the City is required to:
• Make the draft maps available to the public for review and comment within 30 days of transmittal from the State Fire Marshal.
• Adopt the final map designations via ordinance within 120 days of receiving the recommendations from the State Fire Marshal.
• Submit the adopted ordinance and maps to CAL FIRE within 30 days of adoption.

This item is being brought forward to the City Council to fulfill the requirements of state law and to begin the adoption process.

At its May 27, 2025 meeting, after receiving a presentation on the updates to the LRA Map, the City Council introduced Ordinance 1624.

ANALYSIS:

The draft maps and supporting data for LRAs were made available to the City of San Carlos from the State Fire Marshal on February 24, 2025. On March 10, 2025, the notification of the release of LRA maps was shared through public notice and the City of San Carlos website, and the maps were made available to the public for review and comment:
https://www.cityofsancarlos.org/city_hall/departments_and_divisions/fire/wildfire_preparedness. php#lrahazardseverityzoneupdate
The updated FHSZ provide essential information for community planning, hazard mitigation, and public safety. These designations are intended to help local governments and residents understand fire hazards and make informed decisions about mitigation strategies. It is important to note that Fire Hazard Severity Zone maps evaluate hazard, not risk—similar to how flood zone maps reflect the probability of flooding without predicting specific impacts. Hazard is based on the physical conditions that influence the likelihood and expected fire behavior over a 30- to 50-year period, without considering mitigation efforts. Risk, by contrast, reflects the potential damage under current conditions, accounting for factors like defensible space, fuel treatments, and ignition-resistant construction. Compared to the previous maps (published between 2007-2011), fire hazard severity zones in our area have been reduced. There are no areas in the City of San Carlos classified as Very High FHSZ. This means that property owners and new developments will not face additional defensible space requirements based on these classifications. The Fire Marshal is listed as the point of contact with CAL FIRE and will be submitting the final adopted ordinance and maps to CAL FIRE.

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ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt Ordinance 1624 designating the Fire Hazard Severity Zones as recommended by the California Department of Forestry and Fire Protection pursuant to Government Code Section 51178; or

2. Do not introduce the Ordinance; or

3. Provide staff with alternative direction.

Respectfully submitted by:

Greg DaCunha, RCFD Deputy Fire Chief
Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Proposed Ordinance 1624
Exhibit A to Ordinance - Fire Map

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ORDINANCE NO. 1624

AN ORDINANCE OF THE CITY OF SAN CARLOS RETITLING AND AMENDING SAN CARLOS MUNICIPAL CODE SECTION 15.04.110 F (6)(a) TO DESIGNATE

FIRE HAZARD SEVERITY ZONES FOR LOCAL RESPONSIBILITY AREAS

AS RECOMMENDED BY THE CALIFORNIA DEPARTMENT OF FORESTRY AND FIRE PROTECTION PURSUANT TO GOVERNMENT CODE SECTION 51178.

SECTION 1: Findings. The City Council of the City of San Carlos does hereby find and declares as follows:

SECTION 2: The City Council hereby approves the Municipal Code amendments as shown below with additional text underlined (example) and deleted text in strikeout (example):

SAN CARLOS MUNICIPAL CODE SECTION 15.04.110 F

6. Chapter 49—Requirements for Wildland-Urban Interface (WUI) Fire Areas. a. Section 4901.1. Amended to include:

VERY HIGH DESIGNATION OF FIRE HAZARD SEVERITY ZONES MAP:

The City Council hereby adopts and designates the most recent Very High Fire Hazard Severity Zones map as recommended by the Director of the California Department of Forestry and Fire Protection and as designated on map titled “City of San Carlos – San Mateo County Local Responsibility Area Fire Hazard Severity Zones Map” dated February 24, 2025, and retained on file, or via the internet, and made available at the offices of the Fire Chief and Building Official of the City of San Carlos. The map is also available on the city’s website. Buildings and structures shall comply with the provisions as stipulated by the City of San Carlos Building Official, the California Building Code Chapter 7A, or the California Residential Code Section R337.

SECTION 3: CEQA. This Ordinance is exempt from additional environmental review pursuant to California Environmental Quality Act (“CEQA”) Guidelines Section 15061(b)(3); under the general rule that CEQA applies only to projects, which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 4: Severability. 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 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.
* * * *

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I, City Clerk Crystal Mui, hereby certify that the foregoing Ordinance was introduced on the 27th day of May, 2025 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 9th day of June, 2025 by the following vote:
________________________________
CITY CLERK of the City of San Carlos
APPROVED:
____________________________
MAYOR of the City of San Carlos
Exhibit A: San Carlos Fire Map
AYES, COUNCILMEMBERS:

NOES, COUNCILMEMBERS:

ABSENT, COUNCILMEMBERS:

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City and County boundaries as of 10/22/24 (CA Board of Equalization) CAL FIRE State Responsibility Areas (SRA25_1)
CAL FIRE Fire Hazard Severity Zones (FHSZSRA23_3, FHSZLRA_25_1) Data Sources:

Daniel Berlant, State Fire Marshal, CA Department of Forestry and Fire Protection Joe Tyler, Director/Fire Chief, CA Department of Forestry and Fire Protection Wade Crowfoot, Secretary for Natural Resources, CA Natural Resources Agency The State of California and the Department of Forestry and Fire Gavin Newsom, Governor, State of California Protection make no representations or warranties regarding the accuracy of data or maps. Neither the State nor the Department shall be liable under any circumstances for any direct, special, incidental, or consequential damages with respect to any claim by any user or third party on account of, or arising from, the use of data or maps. and other relevant factors including areas where winds
have been identified by the Office of the State Fire Marshal as a major cause of wildfire spread.
statewide criteria and based on the severity of fire hazard that is expected to prevail in those areas. Moderate, high, and very high fire hazard severity zones shall be based on fuel loading, slope, fire weather, Government Code section 51178 requires the State Fire
Marshal to identify areas in the state as moderate, high, and very high fire hazard severity zones based on consistent Waterbody
Federal Responsibility
Area (FRA)
Unzoned LRA
Incorporated City
Projection: NAD 83 California Teale Albers
Scale: 1:24,000 at 11" x 17"
Km 0 1
Mi 0 1
Very High High Moderate
High Moderate
Fire Hazard Severity Zones (FHSZ) in Local Responsibility Area (LRA), as Identified by the State Fire Marshal
San Carlos
101
82 UNINCORPORATED
SAN MATEO CO.

BELMONT

REDWOOD CITY

REDWOOD CITY

REDWOOD CITY

SAN MATEO
February 24, 2025
As Identified by the
State Fire Marshal
Local Responsibility Area
Fire Hazard Severity Zones
CITY OF SAN CARLOS – SAN MATEO COUNTY
Fire Hazard Severity Zones in State Responsibility
Area (SRA), Effective April 1, 2024

CITY COUNCIL

STAFF REPORT
MEETING DATE: June 9, 2025
ITEM TITLE: Consideration of Adopting a Resolution Approving the Final Design for Harrington Park and the 700 Block of Laurel Street (“Phase 1 Downtown Streetscape Master Plan Implementation”); and Consider Adopting a Resolution Directing Staff to Proceed with the Plans, Specifications, and Estimate (PS&E) for Phase 1A Renovation of Harrington Park.

RECOMMENDATION:

Staff recommend that the City Council:

1. Adopt a Resolution approving the final design for Harrington Park and the 700 block of Laurel Street (“Phase 1 Downtown Streetscape Master Plan Implementation”); and

2. Adopt a Resolution directing staff to proceed with the plans, specifications, and estimate (“PS&E”) for Phase 1A Renovation of Harrington Park; and

3. Provide direction on a series of design and implementation questions including temporary relocation of the “Blue Man” sculpture and the potential for wall murals at Harrington Park and on the roll-up door of the Harrington Park multi-purpose building.

FISCAL IMPLICATIONS:

There are no fiscal implications for approving the final design of Harrington Park and the 700 block of Laurel Street. Capital Improvement Program (CIP) Project C2215 sets aside funding for improvements in the downtown core, including:

Project C2215 – Downtown
Design/Engineering $1,800,000
Election Campaign Consultants $350,000
Phase 1 Construction $7,600,000
TOTAL $9,750,000
Within CIP project fund C2215, a total of $1,800,000 is set aside for design/engineering (i.e. “shovel ready”) drawings for Harrington Park and the full span of the 700 block of Laurel Street, from Cherry Street to Olive Street; and a total of $7,600,000 is budgeted to finance construction of downtown improvements.

Should the City Council direct staff to proceed with the construction of Phase 1A Renovation of Harrington Park, the current estimate for construction of improvements is $3,672,000.

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Construction cost estimates for Phase 1B, the 700 block of Laurel (including the pavilion and the water feature), are $9,523,000. Therefore, the current estimate for Phases 1A and 1B combined would be $13,195,000. Final construction costs will not be known until the City publicly advertises and receives bids from qualified contractors to complete the work in each of the phases. Award of a construction contract for Phase 1A is anticipated to be presented to the City Council at its October 27, 2025 meeting.

Should the City Council desire public art murals to be completed along with Harrington Park improvements, staff would return with a request for additional funding.

BACKGROUND:

In 2022, the City commenced a planning process for a Downtown Specific Plan, aimed at enhancing the downtown core. A key component of the Downtown Specific Plan is the Downtown Streetscape Master Plan, which was adopted by the City Council on April 28, 2025. The Downtown Streetscape Master Plan outlines a series of placemaking, pedestrian, environmental, community-oriented, and business-friendly improvements along several downtown streets (primarily along Laurel), with the 700 block of Laurel Street (including Harrington Park) operating as a pedestrian promenade and central community gathering point.

Key features for the 700 Block of Laurel Street and Harrington Park, as heard during the community engagement process and as set forth in the City Council’s adopted Downtown Streetscape Master Plan, include:
✓ Maintaining the “sway” design from the 600 block of Laurel Street ✓ A full pedestrian plaza experience (closed to cars and bicycle dismount zone) ✓ Room for outdoor dining
✓ Ample public seating
✓ Groves of trees for shading
✓ Raingardens
✓ New fountain
✓ Activated/programming areas
✓ Bicycle parking
✓ Public drinking fountains
✓ New public restrooms in Harrington Park (note: public restrooms also planned for 600 block of Laurel Street in the new plaza)
✓ New multi-purpose stage/pavilion
During the Downtown Streetscape Master Plan process, the City Council expressed a strong desire to begin constructing improvements in an area within the downtown. Given their prominence, the 700 block of Laurel Street and Harrington Park were identified as Phase 1 of implementation phases. In October 2024, the City Council authorized a contract with design/engineering firm WRT to prepare design engineering (i.e. “shovel ready”) drawings for the 700 block of Laurel Street plus Harrington Park, with the direction to begin construction on Harrington Park sometime in 2025.

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Since that time, the City Council has participated in three Study Sessions with staff and WRT to refine the designs for Phase 1. Throughout these discussions, Phase 1 has been presented as two subphases: Phase 1A consists of the renovation of Harrington Park and Phase 1B consists of the entire pedestrianized zone along the 700 block of Laurel Street, spanning from Cherry to Olive Streets. Phase 1A and 1B have been designed as one complete project. The extent of each phase is mapped in Figure 1 below.

Figure 1. Phase 1: Harrington Park and 700 Block of Laurel In 2025, the City Council met three times to guide the final design for Phase 1, including both the 700 Block of Laurel Street and Harrington Park. The sessions included meetings on:
1) February 10, 2025, where the City Council reviewed key program elements to ensure they were in the right place (see February 10, 2025, City Council input in Attachment 7); and 2) March 10, 2025, where the City Council provided input on site furnishings, paving design/materials, special elements, lighting, the planting palette, and design options for the water feature (see March 10, 2025, City Council input in Attachment 6); and 3) May 12, 2025, where the City Council reviewed updated designs for the pavilion/stage and water feature based on feedback received during the March 10 City Council Study Session (see March 12, 2025, City Council input in Attachment 5).

This process is culminating in tonight’s discussion where the City Council will review the final design for Phase 1 and consider approving the final design either as is or with changes; and consider whether to proceed with constructing improvements to Harrington Park only (Phase 1A).

Refer to Resolutions in Attachments 1 and 2 of this report.

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PROPOSED FINAL DESIGN FOR HARRINGTON PARK (PHASE 1A) AND THE 700 BLOCK OF LAUREL STREET (PHASE 1B):

See Exhibit A of Attachment 1, representing the Final Design for Phase 1.

Phase 1A – Harrington Park
Frank D. Harrington Park (Harrington Park) is approximately 7,250 square feet and located near the center of the 700 block of Laurel Street. The park currently includes memorial benches, picnic and chess tables, landscaped areas, mature shade trees, a performance stage, a shade structure, the Balancing Act a.k.a. “Blue Man” sculpture, and a series of memorial bricks/pavers. It currently serves as both a respite for shoppers as well as a flexible event space for nearby activities (including weekly Farmers’ Markets, Harringtunes events, and the Art and Wine Faire). During these City-sponsored events, bands and other live entertainments often perform at the performance stage at Harrington Park.

Figure 2. Bird’s Eye View of Harrington Park, the New Pavilion, and New Water Feature Feedback from the public and the City Council identified a desire for shade, restrooms, drinking fountains, and public seating within Harrington Park. The proposed improvements to Harrington Park include:
• New paving layout and design (existing memorial bricks/pavers will be retained but relocated in the overall new paving design layout)
• New trees and landscaping
• New public seating arrangement
• New multi-purpose building with restrooms, storage, and utility room

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• New staging area/multi-purpose curb zone next to the alley The Multi-Purpose Building
The new 710 square-foot multi-purpose building would be located along the northwestern border of the park (abutting 753 Laurel Street). This multi-purpose building is portrayed in Figure 2 below and would include two restrooms with one fully-accessible ADA restroom (including a universal changing station suitable for persons of all ages), a standard restroom, sink facilities, a plumbing/water pump room for a proposed water feature/fountain in the 700 Block (Phase 1B), and an overflow storage space for use by the City’s Public Works and Parks and Recreation Departments. A drinking fountain with a bottle-filling station, and additional handwash station are featured just outside the restrooms. A ten-foot-tall canopy, or shade structure, to complement the building and provide shade is also included in the conceptual design. The exterior façade would include a mix of concrete and accent porcelain tiles.

Figure 3. Proposed Design for Harrington Park Multi-Purpose Building The Planting Plan
Roughly 16 existing trees
(including small trees) would be
removed and replaced with five
Engelmann Oak trees and four
Shreve Oak trees (see Figure 4
below). Note: Some existing trees
and benches within Harrington
Park currently include dedication
and/or memorial plaques. Parks
and Recreation staff are reaching
out to the community members
and families that dedicated these plaques and memorials to determine how to proceed. However, the existing memorial brick pavers will be relocated within the new design of Harrington Park.

Figure 4. Planting Plan - Harrington Park

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Figure 5. Paving Plan – Harrington Park
The paving is a diagonally banded paver design using a blend of colors. The pavers are colored concrete and range in size from 12” x 24” to 4” x 12”, depending on the color blend. There will also be permeable pavers that match the color and texture.

The lighting plan includes a mix of contemporary-style light posts, underlighting beneath seating areas, and catenary (string/market) lights near the central portions of Harrington Park.

Other
Blue Man Sculpture
• Staff seeks the Council’s direction on the temporary placement of the Blue Man sculpture.

The final design for the 700 Block of Laurel Street (Phase 1B) proposes the Blue Man within the entrance of the 700 block of Laurel Street (near 717 Laurel). It is undetermined at this time when Phase 1B will be completed. In the interim, staff recommends that the Blue Man be temporarily placed somewhere within the 700 block of Laurel Street until Phase 1B is completed.

Phase 1B – 700 Block of Laurel Street
Consistent with the vision outlined in the Downtown Streetscape Master Plan, the 700 block of Laurel Street will serve as a pedestrian promenade lined with trees and raingardens. The plant palette will include a mix of native plants as well as Golden Rain Trees and Crepe myrtles. The raingardens will help capture and filter runoff. The vacated street section currently running through the 700 block of Laurel Street will be filled in and raised to the height of the existing shops and sidewalks, creating a seamless experience for visitors. Smaller entry plazas will be added at either end of the 700 block of Laurel Street, near where the promenade intersects Cherry and Olive Streets. These small plaza areas will include bicycle racks for visitors. A mix of benches and moveable seating opportunities are integrated into the design.

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Figure 6. Bird’s Eye View of the 700 Block of Laurel Street The winding (i.e. “sway”) pedestrian promenade running through the middle of the 700 block of Laurel Street is designed to double as an emergency access path for responder vehicles, with a minimum twenty-foot clearance running throughout. Retractable bollards will be installed at either end of the promenade (at the Cherry Street and Olive Street intersections) to allow for access in emergency situations or to accommodate larger City-sponsored events.

The design includes space that could accommodate a variety of special or more unique elements, such as an oversized chess board and a digital wayfinding kiosk. These spaces are located near 784 and 786 Laurel Street and space for a digital kiosk could be located near the intersection of Laurel and Cherry Streets. As part of the final design, the Blue Man sculpture is planned to be relocated along the northern edge of the promenade, near 717 Laurel (as noted above, staff recommends that the Blue Man be temporarily placed somewhere within the 700 block of Laurel Street until Phase 1B is completed).

The lighting plan includes a mix of contemporary-style light posts, illuminated bollards, underlighting beneath benches, and catenary (string/market) lights near the central portions of the 700 block of Laurel.

The proposed designs for the pavilion and water feature were derived from the City Council adopted Downtown Streetscape Master Plan with additional input from the City Council received on March 10 and May 12, 2025.

Pavilion
The pavilion would rise to 16 feet in height at the low point and up to 22 feet tall at the high point.

The pavilion contemplates a raised stage, 18-inches tall, that could be used to support a wide variety of activities and programs. The stage is designed to face three directions and host smallto-medium sized events. The current design includes a sloping path to allow accessibility to the stage.

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Direct and indirect lighting fixtures and speakers could be integrated into the columns. The stage could also include mounting points for artists and other performers to set up their audio equipment in support of City events.

The current conceptual design of the pavilion is positioned along Laurel Street to allow for – at its closest point – a twenty-one-foot pathway for emergency vehicle access. Meanwhile, a minimum of 20-feet area serves as the main promenade along the full span of the 700 block of Laurel Street.

Water Feature
The refined design of the water feature reflects changes based on the City Council input received during its May 12, 2025 Study Session to address concerns about safety. The proposed stone sculpture is proposed to reach a height of approximately 10 to 12 feet.

Figure 7. Redesign of Water Feature, Based on City Council Comments of May 12, 2025 PROCEEDING WITH IMPROVEMENTS FOR HARRINGTON PARK (PHASE 1A) ONLY:

Should the City Council direct staff to proceed with constructing improvements for Harrington Park (Phase 1A), staff will return to City Council on August 11, 2025, for approval of final construction drawings, or PS&E, and direct staff to advertise the project for bid. Staff anticipate returning to the City Council on October 27, 2025, with a recommendation to award the contract to a qualified general contractor. Final construction costs from the selected contractor will also be available at that time. The total construction period is currently estimated to take nine months.

OTHER DESIGN AND IMPLEMENTATION QUESTIONS FOR THE CITY COUNCIL:

Potential Public Art Murals at Harrington Park and Multi-Purpose Building The Downtown Streetscape Master Plan identifies Harrington Park as an opportunity site for public art murals. There are two building facades (one against 753 Laurel and the other against 765 Laurel) which face into Harrington Park and have the potential to host new public art pieces.

Staff seek direction from the City Council as to whether murals may be desired on these façades.

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There is also a roll-up door at the rear of the multi-purpose building (serving as access to the City storage room) that could be painted over with public art as a means of activating the space along the alley.

Should a mural or murals be desired, staff request feedback on potential next steps including engaging with the property owners, identifying an artist, and establishing a budget. City staff could lead an effort to identify and select an artist, or the City could complete an open selection process for a mural artist in which a request for proposals is published and the Public Art Subcommittee and Parks, Recreation, and Culture Commission make a recommendation for approval by the City Council. Attachment 9 outlines the potential timeline for either process, with the staff-led effort estimated to take five to six months and the open selection process estimated to take approximately eight to nine months. Although no funds are currently set aside for murals at Harrington Park, the City Council could offer direction as to whether a portion of the CIP funds in C2215 might be reallocated for public art purposes.

Consistent with the Downtown Streetscape Master Plan, themes for the mural(s) could include cultural or ecological influences on San Carlos, or the community's centennial. Should murals be desired, staff recommend a single artist (or single team of artists) be selected to complete the work at Harrington Park.

NEXT STEPS:

Should the City Council approve the final design for Phase 1 (both 1A and 1B), as presented or with changes; and should the Council further direct staff to proceed with PS&E for Phase 1A, staff will work with the consultant team to bring Phase 1A drawings to 100% completion (i.e. develop construction drawings) and return to the City Council at their regular meeting of August 11, 2025.

At the August 11, 2025, staff will request that the City Council adopt a Resolution approving Plans and Specifications and direct staff to advertise to bid for Phase 1A, Harrington Park.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution approving the final design for Harrington Park and the 700 Block of Laurel Street (Phase 1 Downtown Streetscape Master Plan Implementation) and adopt a Resolution directing staff to proceed with the PS&E for Phase 1A Renovation of Harrington Park; or

2. Do not adopt the two proposed Resolutions; or

3. Provide staff with alternate direction.

Respectfully submitted by:

Al Savay, Community Development Director

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Approved for submission by:
_______________________
Jeff Maltbie, City Manager
ATTACHMENT(S):

1. Resolution - Final Design for Harrington Park and the 700 Block of Laurel Street (Phase 1 Downtown Streetscape Implementation)
Exhibit A – Final Design Renderings and Graphics

2. Resolution - Plans, Specifications, and Estimate for Phase 1A Harrington Park Exhibit A – Map of Phase 1A Construction Project Boundary

3. Construction Cost Estimates for Phase 1A

4. Construction Cost Estimates for Phase 1B

5. City Council Input from Third Schematic Design Meeting of May 12, 2025

6. City Council Input from Second Schematic Design Meeting of March 10, 2025

7. City Council Input from First Schematic Design Meeting of February 10, 2025

8. Downtown Streetscape Master Plan, Adopted April 28, 2025

9. Potential Implementation Timeline for Harrington Park Murals

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RESOLUTION NO. 2025-___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

APPROVING THE FINAL DESIGN FOR HARRINGTON PARK AND THE
700 BLOCK OF LAUREL STREET, PHASE 1 DOWNTOWN
STREETSCAPE MASTER PLAN IMPLEMENTATION.

WHEREAS, the City Council of the City of San Carlos has made the planning for the future of its downtown one of its top strategic objectives since 2021, beginning with the adoption of its 2021 Strategic Plan and as reaffirmed during its City Council Retreat on January 21, 2022, and subsequent meetings on January 27, 2023, January 18, 2024, and April 14, 2025; and WHEREAS, on August 28, 2023, the City Council unanimously voted to adopt Resolution 2023-106 authorizing the City Manager to enter into a professional services agreement with WRT, Inc. to prepare a Downtown Specific Plan and Downtown Streetscape Master Plan; and WHEREAS, on June 10, 2024 and September 23, 2024, the City Council expressed a desire to begin implementing a downtown street redesign project; and WHEREAS, on October 28, 2024, the City Council adopted Resolution 2024-114 authorizing the City Manager to execute an amendment to the professional services agreement with WRT, Inc. for additional consulting services associated with the Downtown Specific Plan and Streetscape Master Plan to include design engineering drawings for Phase 1 Downtown implementation; and WHEREAS, on April 7, 2025, the Planning and Transportation Commission adopted Resolution 2025-02 recommending the City Council adopt the San Carlos Downtown Streetscape Master Plan; and
WHEREAS, on April 28, 2025, the City Council adopted Resolution 2025-031 adopting the Downtown Streetscape Master Plan; and
WHEREAS, on February 10, 2025, March 10, 2025, and May 12, 2025, the City Council held study sessions and provided specific direction and feedback on the design of Harrington Park and the 700 Block of Laurel Street; and
WHEREAS, on June 9, 2025, the final designs for the 700 Block of Laurel Street and Harrington Park were presented City Council.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of San Carlos hereby approves the final design for Harrington Park and the 700 Block of Laurel Street as delineated and set forth in Exhibit A.
* * * * * * *
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 9th day of June 2025, by the following vote:

AYES, COUNCILMEMBERS:

NOES, COUNCILMEMBERS:

ABSENT, COUNCILMEMBERS:

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________________________________
CITY CLERK of the City of San Carlos
APPROVED:
____________________________
MAYOR of the City of San Carlos
Exhibit A: Final Design for Harrington Park and the 700 Block of Laurel Street

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CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION | JUNE 2025

SITE PLAN
Seating Custom Seating
Restroom / Storage
Dropoff / Food Truck Parking

CHERRY STREET

OLIVE STREET
Bioretention Planting
Custom Seating
Movaeble Seating
Canopy Pavilion
20’ Clearance Line Water
Feature
Bridge at
Bioretention
Moveable
Seating
Packet Pg. 85

CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION
| JUNE 2025

PHASINGCHERRY STREET

OLIVE STREET
Packet Pg. 86
CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION | JUNE 2025
Bird’s-eye view looking North
towards 700 Laurel block
MODEL VIEWS 700 LAUREL BLOCK
Packet Pg. 87
CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION | JUNE 2025
Expanded bird’s-eye view
looking North towards 700
Laurel Block
Packet Pg. 88
CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION | JUNE 2025

PAVILION DESIGN WARE
Looking towards Harrington
Park at pavilion
Packet Pg. 89
CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION | JUNE 2025
Looking towards Harrington
Park and Olive Street at
pavilion
Packet Pg. 90
CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION | JUNE 2025
In Harrington Park looking at
restroom towards park rear
Packet Pg. 91
CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION | JUNE 2025

WATER FEATURE DESIGN FLUIDITY
Packet Pg. 92
CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION | JUNE 2025

PAVING DESIGN DEVELOPMENT
Light Shades Medium Shades Dark Shades
Narrow Modular Pavers (3” X 9”), Stepstone
in medium shade (See below)
Narrow Modular Pavers (6” X 12”), Stepstone
in light, medium and dark shades (See below)
CALARC® Pavers (12” X 24”), Stepstone in light and dark grey in dark shade (See below)
Unit Paver 1, Permeable Unit Paver 2 Unit Paver 3 C.I.P Concrete 1 & 2 Packet Pg. 93
Dry Wet
CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION | JUNE 2025

PLANTING DESIGN DEVELOPMENT
California Field Sedge
Carex praegracilis
Salt Grass
Distichlis spicata
Seep Monkey Flower
Mimulus guttatus
Giant Chain Fern
Woodwardia fimbriata
Autumn moor grass
Sesleria autumnalis

TREE SHRUB GROUNDCOVER
Two-colored Kangaroo Paw
Anigozanthos bicolor
Crepe Myrtle
Lagerstroemia indica x fauriei
‘Muskogee’
Blue Fescue
Festuca glauca ‘Elijah Blue’
Canby Oak
Quercus canbyi
Engelmann Oak
Quercus engelmannii
Beach Sagewort
Artemisia Pycnocephala
California Sycamore
Platanus racemosa ‘Roberts’
Mesa Glow Maple
Acer grandidentatum
Narrow-leaf Chalksticks
Senecio vitalis
Berkeley Sedge
Carex divulsa c. tumulicola
Packet Pg. 94
CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION | JUNE 2025

SITE FURNISHINGS DESIGN DEVELOPMENT
Twig, Landscapeforms
Bench
Custom Benches
Parc Centre, Landscapeforms
*powdercoat color options available
Cafe Table + Chairs
Packet Pg. 95
CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION | JUNE 2025

SITE ELEMENTS DESIGN DEVELOPMENT
Multiminium, mmcite
*metal or wood finish options available
Emerson, Landscapeforms
*powdercoat color options available
Bike Racks Waste Receptacles
Elkay
*powdercoat color options available
Hydraulic Bollards Bottle Filling Station
Spin, Iron Age (5’ dia.)
*Cast Iron w/ or w/o BOOF finish available
Rain, Iron Age (5’ x 5’)
*Cast Iron w/ or w/o BOOF finish available
Rain, Iron Age (Custom)
*Cast Iron w/ or w/o BOOF finish available
Rain, Iron Age
*Cast Iron w/ or w/o BOOF finish available
Tree Grate 1 Tree Grate 2 Trench Drain Pedestrian Bridge Packet Pg. 96
CITY OF SAN CARLOS DOWNTOWN IMPLEMENTATION | JUNE 2025

LIGHTING DESIGN DEVELOPMENT

PRIMUS QTL
LUMEC, UrbanScape BEGA INTERLUX, Dirigo
Catenary LED Festoon Stringlight
14’ Pole Mounted Area Light LED Bollard Path Light
Surface Mounted LED Striplight
Packet Pg. 97
RESOLUTION NO. 2025-___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

DIRECTING STAFF TO PROCEED WITH THE PLANS, SPECIFICATIONS, AND ESTIMATE (PS&E) FOR PHASE 1A RENOVATION OF HARRINGTON PARK.
___________________________________________________________________________ WHEREAS, the City Council of the City of San Carlos has made the planning for the future of its downtown one of its top strategic objectives since 2021, beginning with the adoption of its 2021 Strategic Plan and as reaffirmed during its City Council Retreat on January 21, 2022, and subsequent meetings on January 27, 2023, January 18, 2024, and April 14, 2025; and WHEREAS, on August 28, 2023, the City Council unanimously voted to adopt Resolution 2023-106 authorizing the City Manager to enter into a professional services agreement with WRT, Inc. to prepare a Downtown Specific Plan and Downtown Streetscape Master Plan; and WHEREAS, on June 10, 2024 and September 23, 2024, the City Council expressed a desire to begin implementing a downtown street redesign project; and WHEREAS, on October 28, 2024, the City Council adopted Resolution 2024-114 authorizing the City Manager to execute an amendment to the professional services agreement with WRT, Inc. for additional consulting services associated with the Downtown Specific Plan and Streetscape Master Plan to include design engineering drawings for Phase 1 Downtown implementation; and
WHEREAS, on April 7, 2025, the Planning and Transportation Commission adopted Resolution 2025-02 recommending the City Council adopt the San Carlos Downtown Streetscape Master Plan; and
WHEREAS, on April 28, 2025, the City Council adopted Resolution 2025-031 adopting the Downtown Streetscape Master Plan; and
WHEREAS, on February 10, 2025, March 10, 2025, and May 12, 2025, the City Council participated in study sessions with the WRT design team and provided specific direction and feedback on the design of Harrington Park and the 700 Block of Laurel Street; and WHEREAS, on June 9, 2025, the WRT design team presented the City Council with updated design drawings incorporating feedback from the May 12, 2025 City Council study session; and
WHEREAS, $7,600,000 has been set aside within Capital Improvement Program Fund C2215 to finance construction of a Downtown Master Streetscape Plan implementation project.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of San Carlos hereby directs staff to proceed with the Plans, Specifications, and Estimate (PS&E) for Phase 1A renovation of Harrington Park, the boundaries of which are delineated as set forth in Exhibit A. * * * * * * *

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June 09, 2025 Packet Pg. 98
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 9th day of June 2025, by the following vote:
________________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos
Exhibit A: Delineation of Phase 1A Project Boundary
AYES, COUNCILMEMBERS:

NOES, COUNCILMEMBERS:

ABSENT, COUNCILMEMBERS:

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June 09, 2025 Packet Pg. 99
0 30' 60'
SCALE: 1" = 30'
N
PHASE 1B
700 BLOCK
PHASE 1AHARRINGTON PARK
wet lower
wet upper
dry upper
Packet Pg. 100

SAN CARLOS DOWNTOWN PLAN IMPLEMENTATION
Design Development Cost Estimate
5/30/25
UNIT
ITEM DESCRIPTION QTY. UNIT COST CONT AMOUNT
General
101 Mobilization/ Demobilization 1 LS 23,470.38 $ 15% $26,991 102 Traffic Management 1 LS 5,000.00 $ 15% $5,750
103 Water Pollution Control 1 LS 10,000.00 $ 10% $11,000 104 Construction Layout 1 LS 10,000.00 $ 10% $11,000
Subtotal $54,741
Demolition
200 Concrete Flatwork Removal (incl. Curb, Gutter, Sidewalk) 7,500 SF $ 10% $66,000 8.00 201 Remove Trees 12 EA $ 10% $6,600 500.00
202 Remove Street Lights 4 EA $ 10% $3,520 800.00
203 Remove Existing Water Valve Box (Sizes to Confirm) 2 EA $ 10% $220 100.00 204 Remove/Abandon in Place Ex. Water Laterals and Water Valves 75 LF $ 10% $4,125 50.00 205 Remove Existing Water Meters 1 EA 2,000.00 $ 10% $2,200 206 Remove Existing Water Fountain (incl. Cap) and Back Flow Preventer 1 LS 3,500.00 $ 10% $3,850 207 Remove Ex. Storm Drain Inlet and Subdrains 4 EA 2,000.00 $ 10% $8,800 208 Remove/Abandon in Place Ex. Storm Drain (SD) Laterals 90 LF $ 10% $2,475 25.00 209 Miscellenoius 1 LS 50,000.00 $ 10% $55,000
210 AT&T, Comcast, Other Fiber & Communication (TBD) 1 LS 15,000.00 $ 10% $16,500 211 Coordination with PG&E (Gas & Electric) 1 LS 15,000.00 $ 10% $16,500 212 Remove Pullboxes 5 EA $ 10% $4,400 800.00
Subtotal $190,190
Earthwork
300 Earthwork 110 CY $ 10% $10,285 85.00
301 Export 110 CY $ 10% $12,100 100.00
Subtotal $22,385
Hardscape
400 Flush Concrete Bands 0 SF $ 5% $0 25.00
401 Vertical Curb at Planter LF $ 5% $0 42.00
402 Detectable Warning Device 0 SF $ 5% $0 42.00
403 Permeable Unit Pavers 880 SF $ 5% $38,808 42.00
404 Unit Pavers 3,700 SF $ 5% $186,480 48.00
405 Enhanced Concrete Paving 0 SF $ 5% $0 25.00
406 Asphalt Paving 0 SF $ 5% $0 15.00
407 Water Barrier 0 SF $ 5% $0 8.00
408 Lines and Markings LS 10,000.00 $ 5% $0
409 Signs 1 LS 2,000.00 $ 5% $2,100
410 Curb Along Property Line 100 LF $ 5% $6,300 60.00
Subtotal $233,688
Electrical and Communications
500 Electrical Service Upgrade & PG&E Fee 1 EA 15,000.00 $ 10% $16,500 501 2" PVC Conduit for Comcast 450 EA $ 10% $5,445 11.00 502 Lighting Control Panel 1 EA 7,500.00 $ 10% $8,250
503 Metered Service Panel 1 EA 6,000.00 $ 10% $6,600
504 3/4"PVC conduit with 3#10 AWG + GND. 360 LF $ 10% $17,820 45.00 505 1 1/4"PVC conduit with 3#2 AWG + GND. (Restroom Panel) 200 LF $ 10% $18,700 85.00 506 2" PVC spare conduit for CCTV 255 LF $ 10% $3,086 11.00 507 Trench and Backfill 240 CY $ 10% $52,800 200.00
508 Electrical Pull/ Splice Box 15 EA 1,800.00 $ 10% $29,700 509 120 V Electrical Outlets 8 EA $ 10% $4,400 500.00
510 240 V Electrical Outlets 4 EA $ 10% $2,640 600.00
511 Level 2 Charging Stations for Bicycles 2 EA 4,350.00 $ 10% $9,570 512 Lighting Fixture Type "R1" - Pedestrian Pole 2 EA 8,650.00 $ 10% $19,030 513 Lighting Fixture Type "R3" - Catenary Light System 203 EA $ 10% $15,408 69.00 514 Lighting Fixture Type "R4" - Integrated Site Furniture Lighting 1 EA 4,320.00 $ 10% $4,752 515 Lighting Fixture Type "E1" - Lighting at Multipurpose building 12 EA $ 10% $9,834 745.00 516 Lighting Fixture Type "E2" - Lighting at Multipurpose building 1 EA 2,250.00 $ 10% $2,475 517 Lighting Fixture Type "E3" - Lighting at Multipurpose building 2 EA 1,215.00 $ 10% $2,673 HARRINGTON PARK (700 BLOCK)

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518 Lighting Fixture Type "E4" - Lighting at Multipurpose building 1 EA 1,850.00 $ 10% $2,035 519 Lighting Fixture Type "F1" - Lighting at Multipurpose building 4 EA 1,550.00 $ 10% $6,820 520 Lighting Fixture Type "F2" - Lighting at Multipurpose building 2 EA $ 10% $1,661 755.00 Subtotal $240,198
Storm Drainage
600 Drain Inlet (Including overflow Drain Inlets) 1 EA 6,000.00 $ 10% $6,600 601 12" Storm Drain Pipe 50 LF $ 10% $13,750 250.00
602 Trench Drain 45 LF $ 10% $14,850 300.00
603 4" Perforated Pipe 20 LF $ 10% $1,430 65.00
604 Biorientation Soil Media 64 CY $ 10% $17,559 250.00 605 Retaining Curb and Gutter/wall 200 LF $ 10% $55,000 250.00 606 Class II Permeable 32 CY $ 10% $2,985 85.00
607 Landscape Mulch 8 CY $ 10% $1,756 200.00
608 Outfall Rock Dissipator 1 EA 1,000.00 $ 10% $1,100
609 Subdrain Cleanout 1 EA $ 10% $138 125.00
Subtotal $115,168
Sanitary Sewer
700 Sanitary Sewer Lateral (PVC SDR-26) incl. Cleanout 1 EA 15,000.00 $ 10% $17,250 Subtotal $17,250
Water
800 Water Service Laterals 2 EA 6,000.00 $ 10% $13,200
801 Fire Service Laterals 0 EA 8,000.00 $ 10% $0
802 Water Meters 1 EA 7,000.00 $ 10% $7,700
803 Relocate Water Meters 1 EA 5,000.00 $ 10% $5,500
804 Back Flow Preventer 1 EA 10,000.00 $ 10% $11,000
805 Water Gate Valves 2 EA 2,000.00 $ 10% $4,400
806 Fire Hydrant - Adjust to Grade 1 EA 5,000.00 $ 10% $5,500 Subtotal $47,300
Public Utility
900 Adjust PGE Vault (TBD) 2 EA 1,200.00 $ 10% $2,640
901 Adjust ATT Vault (TBD) 1 EA 1,200.00 $ 10% $1,320
902 Adjust Comcast Vault (TBD) 1 EA 1,200.00 $ 10% $1,320 903 Adjust Fiber/Communication Agency Vault (TBD) 1 EA 1,200.00 $ 10% $1,320 904 PG&E Fee 1 LS 25,000.00 $ 10% $27,500
Subtotal $34,100
Landscaping
900 Import Soil 60 CY $ 10% $8,250 125.00
901 Street Tree 6 EA $ 10% $5,280 800.00
902 Shrub 40 EA $ 10% $880 20.00
903 Turf 0 SF $ 10% $0 50.00
904 Mulch 4 CY $ 10% $2,200 500.00
905 Irrigation System 1 LS 85,000.00 $ 10% $93,500
906 Tree Grate 2 EA 1,500.00 $ 10% $3,300
Subtotal $113,410
Furnishings
1000 Bench Type 1 - Custom precast concrete with wood slats 1 EA 30,712.00 $ 5% $32,248 1001 Steel Tables 6 EA $ 870.00 5% $5,481
1002 Steel Chairs 12 EA $ 360.00 5% $4,536
1003 Bike Rack 5 EA 2,100.00 $ 10% $11,550
1004 Trash/ Recycle Receptacles 1 EA 1,800.00 $ 10% $1,980 Subtotal $55,795
Water Feature
1100 Pool Plumbing - Piping & Fittings, 8" PVC 100 LF $ 25% $18,750 150.00 1101 Pool Plumbing - Piping & Fittings, 6" PVC 120 LF $ 25% $18,000 120.00 1102 Pool Plumbing - Piping & Fittings, 4" PVC 100 LF $ 25% $10,000 80.00 1103 Pool Plumbing - Piping & Fittings, 2" PVC 120 LF 20.00$ 25% $3,000 1104 Piping & Fittings, 1" PVC 120 LF 30.00$ 25% $4,500 1105 Conduit & Wire, 1" PVC 300 LF 35.00$ 25% $13,125
1106 Conduit & Wire, 3/4" 150 LF 25.00$ 25% $4,688
1107 Conduit & Wire 150 LF $ 25% $6,563 35.00
Subtotal $78,625
Structures and Elements
1200 Restroom and Storage Building 1 EA 1,325,000.00 $ 25% $1,656,250

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1201 Restroom Wood Canopy 1 EA 650,000.00$ 25% $812,500 Subtotal $2,468,750
Total Construction Cost: $3,671,599
June 09, 2025 Packet Pg. 103

10.a

SAN CARLOS DOWNTOWN PLAN IMPLEMENTATION
Design Development Cost Estimate
5/30/25
UNIT
ITEM DESCRIPTION QTY. UNIT COST CONT AMOUNT
General
101 Mobilization/ Demobilization 1 LS 152,409.00 $ 10% $167,650 102 Traffic Management 1 LS 25,000.00 $ 10% $28,750
103 Water Pollution Control 1 LS 25,000.00 $ 10% $27,500 104 Construction Layout 1 LS 30,000.00 $ 10% $33,000
105 Construction Fencing/ Pedestrain Access 1 LS 30,000.00 $ 10% $33,000 106 Monument Preservation 1 LS 5,000.00 $ 10% $5,500
Subtotal $295,400
Demolition
200 Concrete Flatwork Removal (incl. Curb, Gutter, Sidewalk) 20,000 SF $ 10% $176,000 8.00 201 Remove AC Pavement 32,000 SF $ 10% $246,400 7.00
202 Remove Trees 20 EA $ 10% $11,000 500.00
203 Remove Street Lights 11 EA $ 10% $9,680 800.00
204 Remove Existing Water Valve Box (Sizes to Confirm) 15 EA $ 10% $1,650 100.00 205 Remove/Abandon in Place Ex. Water Main, Laterals and Water Valves 800 LF 50.00 $ 10% $44,000
206 Remove Ex. Fire Hydrant and Assembly 1 EA $ 10% $880 800.00 207 Remove Ex. Sanitary Sewer (SS) Main 700 LF $ 10% $38,500 50.00 208 Remove/Abandon in Place Ex.Sanitary Sewer (SS) Laterals 250 LF $ 10% $6,875 25.00 209 Remove/Abandon in Place Ex.Sanitary Sewer (SS) Clean outs 10 EA $ 10% $5,500 500.00 210 Remove Ex. Storm Drain (SD) Main 382 LF $ 10% $21,010 50.00 211 Remove Ex. Storm Drain Inlet 3 EA 3,500.00 $ 10% $11,550 212 Remove/Abandon in Place Ex. Storm Drain (SD) Laterals (Inc. SD Lateral from Phase 1A) 90 LF 25.00 $ 10% $2,475 213 Miscellenous 1 LS 50,000.00 $ 10% $55,000
214 AT&T, Comcast, Other Fiber & Communication (TBD) 1 LS 50,000.00 $ 10% $55,000 215 Coordination with PG&E (Gas & Electric) 1 LS 50,000.00 $ 10% $55,000 216 Remove Pullboxes 35 EA $ 10% $30,800 800.00
217 Remove Receptacles 24 EA $ 10% $6,072 230.00
Subtotal $777,392
Earthwork
300 Earthwork 875 CY $ 10% $81,813 85.00
301 Export 875 CY $ 10% $96,250 100.00
Subtotal $178,063
Hardscape
400 Flush Concrete Bands 0 SF $ 20% $0 25.00
401 Vertical Curb at Planter 0 LF $ 20% $0 42.00
402 Detectable Warning Device 24 SF $ 5% $1,058 42.00
403 Stormwater Blocks SF $ 20% $0 120.00
404 Permeable Unit Pavers 3,565 SF $ 5% $157,217 42.00
405 Unit Pavers 19,274 SF $ 5% $971,410 48.00
406 Enhanced Concrete Paving 20,570 SF $ 5% $539,963 25.00 407 Asphalt Paving - Raised Intersection 0 TON $ 15% $0 800.00 408 Water Barrier 0 SF $ 15% $0 8.00
409 Lines and Markings 1 LS 15,000.00 $ 10% $16,500
410 Signs 1 LS 2,000.00 $ 10% $2,200
Subtotal $1,688,347
Electrical and Communications
500 3/4"PVC conduit with 3#10 AWG + GND. 840 LF $ 10% $41,580 45.00 501 2" PVC Conduit for Comcast 915 EA $ 10% $11,072 11.00 502 2" PVC spare conduit for CCTV 595 LF $ 10% $7,200 11.00 503 Trench and Backfill 560 CY $ 10% $215,600 350.00
504 Electrical Pull/ Splice Box 55 EA 1,800.00 $ 10% $108,900 505 120 V Electrical Outlets 43 EA $ 10% $23,650 500.00 LAUREL STREET - CHERRY TO OLIVE STREET (700 BLOCK)

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506 Lighting Fixture Type "R1" - Pedestrian Pole 12 EA 8,650.00$ 10% $119,370 507 Lighting Fixture Type "R2" - Illuminated Bollard 16 EA 3,800.00 $ 10% $69,920 508 Lighting Fixture Type "R3" - Catenary Light System 272 EA $ 10% $21,583 69.00 509 Lighting Fixture Type "R4" - Integrated Site Furniture Lighting 9 EA 3,100.00 $ 10% $32,085 510 Lighting Fixture Type "R5" - Toekick lighting 8 EA 4,300.00 $ 10% $39,560 511 Lighting Fixture Type "E1" - Lighting at Canopy 48 EA $ 10% $39,336 745.00 Subtotal $729,855
Storm Drainage
700 Drain Inlet (Including overflow Drain Inlets) 4 EA 6,000.00 $ 10% $26,400 701 Manhole 1 EA 7,000.00 $ 10% $7,700
702 Turning Structure 8 EA 2,500.00 $ 10% $22,000
703 18" Storm Drain Pipe (RCP) 360 LF $ 10% $118,800 300.00 704 15" Storm Drain Pipe (RCP) 40 LF $ 10% $12,100 275.00 705 12" Storm Drain Pipe (RCP) 400 LF $ 10% $110,000 250.00 706 Trench Drain 350 LF $ 10% $115,500 300.00
707 8" Perforated Pipe 357 LF $ 10% $29,453 75.00
708 6" Perforated Pipe 300 LF $ 10% $21,450 65.00
709 Bioretentation Soil Media 233 CY $ 10% $63,963 250.00 710 Retaining Curb and Gutter/wall 1,100 LF $ 10% $302,500 250.00 711 Class II Permeable 116 CY $ 10% $10,874 85.00
712 Landscape Mulch 29 CY $ 10% $6,396 200.00
713 Outfall Rock Dissipator 4 EA 1,000.00 $ 10% $4,400
714 Subdrain Cleanout 4 EA $ 10% $550 125.00
715 Tie in to Ex. Storm Drain Main 1 EA 10,000.00 $ 10% $11,000 Subtotal $863,085
Sanitary Sewer
800 12" Sanitary Sewer Pipe (VCP) 700 LF $ 10% $281,050 365.00 801 Lateral Replacement (PVC SDR-26) incl Cleanout 12 EA 15,000.00 $ 10% $198,000 802 Manhole 2 EA 10,000.00 $ 10% $22,000
803 Tie In to Ex, Sanitary Sewer Main (TBD) 1 EA 10,000.00 $ 10% $11,000 Subtotal $512,050
Water
900 Water Main - PVC 750 LF $ 10% $247,500 300.00
901 Water Service Laterals 16 EA 6,000.00 $ 10% $105,600 902 Fire Service Laterals 2 EA 8,000.00 $ 10% $17,600
903 Water Gate Valves 10 EA 2,000.00 $ 10% $22,000
904 Tie In - Water Main 4 EA 10,000.00 $ 10% $44,000
905 Fire Hydrant 1 EA 12,500.00 $ 10% $13,750
Subtotal $450,450
Public Utility
1000 Adjust PGE Vault 4 EA 1,000.00 $ 10% $4,400
1001 Adjust ATT Vault 4 EA 1,000.00 $ 10% $4,400
1002 Adjust Comcast Vault 4 EA 1,000.00 $ 10% $4,400
1003 Adjust Water Meter & Valve 26 EA $ 10% $14,300 500.00 1004 Adjust Gas Valve 6 EA $ 10% $3,300 500.00
Subtotal $30,800
Landscaping
1100 Import Soil 341 CY $ 10% $31,859 85.00
1101 Street Tree 41 EA $ 10% $36,080 800.00
1102 Shrub 460 EA $ 10% $10,120 20.00
1103 Ground Cover 4,600 SF $ 10% $20,240 4.00
1104 Mulch 57 CY $ 10% $3,123 50.00
1105 Irrigation System 1 LS 130,000.00 $ 10% $143,000
Subtotal $244,423
Furnishings
1200 Retractable Bollard 10 EA 8,200.00 $ 20% $98,400
1201 Bench type 2 - Custom precast with wood slats 4 EA 43,642.00 $ 5% $183,296 1202 Bench type 3 - Custom precast with wood slats 4 EA 18,090.00 $ 5% $75,978 1203 Steel chairs 24 EA $ 360.00 5% $9,072
1204 Steel tables 12 EA $ 870.00 5% $10,962

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1205 Bench type 4 - Twig bench 4 EA 7,000.00$ 5% $29,400 1206 Bike Rack 10 EA 2,100.00 $ 10% $23,100
1207 Trash/ Recycle Receptacles 4 EA 2,400.00 $ 10% $10,560 1208 Drinking Fountain 2 EA 25,000.00 $ 15% $57,500
1209 Play Sculpture 2 ALLOW $ 15% $0 -
1210 Tree Grate (square) 27 EA 1,500.00 $ 15% $46,575
1211 Tree Grate (round) 6 EA 1,500.00 $ 15% $10,350
Subtotal $555,193
Water Features
1100 Concrete - Base slab for pool 235 SF $ 25% $11,750 40.00 1101 Concrete - Basin Walls 115 LF $ 25% $35,938 250.00 1102 Waterproofing - fluid-applied 320 SF $ 25% $14,000 35.00 1103 Miscellenious hardware and fittings 1 ALLOW 15,000.00 $ 25% $18,750 1104 Granite Finish - pool floor 210 SF $ 25% $19,688 75.00 1105 Granite Cladding - Weirs 65 LF $ 25% $12,188 150.00 1106 Precast Removable Pavers Over Trough 40 SF $ 25% $2,500 50.00 1107 Stone Sculpture 1 EA $ 75,000.00 25% $93,750
1108 Pump, Filter System and Controls 1 EA $ 207,138.00 25% $258,923 1109 Waterfall Pump and Lights 1 EA $ 50,000.00 25% $62,500 1110 Contractor costs 40% $211,994
Subtotal $741,979
Structures and Elements
1200 Pavilion Wood Canopy (TBD Pending Fabricator) 1 EA 1,540,000.00 $ 25% $1,925,000 1201 Concrete Stage 1 LS 200,000.00 $ 25% $250,000
1202 Stage AV Allowance 1 LS 225,000.00 $ 25% $281,250
1203 Pavilion Lighting LS 30,000.00 $ 25% $0
Subtotal $2,456,250
Total Construction Cost: $9,523,287
June 09, 2025 Packet Pg. 106

10.a

City Council 5/12/25 Regular Meeting Item #10 Study Session Notes

10. STUDY SESSION
a. Receive a Presentation and Provide Direction to Staff on the Design of the Pavilion, Restrooms, and Water Feature as Part of Improvements to the 700 Block of Laurel Street and Harrington Park.

John Ware, Principal and Liam Lautze, Architectural Designer with Ware Associates, presented the Pavilion. Jim Garland from Fluidity Design Consultants presented the water feature design.

Staff and Consultant Team responded to Council’s questions and comments.

Water Fountain
CM Dugan commended the staff and consultant team for their good work and expressed enthusiasm for the comprehensive Downtown Specific Plan. He noted that he had originally brought up the Trevi Fountain as inspiration and shared his appreciation for the proposed design. He remarked that the fountain is visually striking and approachable, while not being overly inviting for play, and its zero-depth design that prevents people from getting soaked.

CM Dugan invited the Consultant to speak to the commissioning process for the fountain—specifically, how the artist would be selected, whether the current design is final, and if it reflects the desired vision. Also encouraged exploring ways to involve the community more in the design process, noting that the original Trevi Fountain was the result of a contest and commission. He noted that he viewed this as an opportunity to engage the public and generate excitement around the project.

Jim Garland stated that their assumption was to produce the work themselves. He explained that the current process involves working with a fabricator to refine the design, but they are open to involving an artist or broader community participation, though it would affect the process and potentially increase costs.

CM Dugan suggested that, since the project is still in Phase 1B and without a firm timeline, there is an opportunity to engage the community in shaping the public art element. He noted that the Community Foundation has expressed interest in participating and that the local artist collective Art Bias may also be a valuable partner. CM Dugan encouraged exploring community involvement in the design process, rather than defaulting to an industrial production approach.

Jim Garland clarified that his use of the term "industrial" referred to a process with an artistic character, rather than something mechanical or machine-like.

VM Venkatesh referred to slide 30 and 40, and inquired about segment benches.

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June 09, 2025 Packet Pg. 107

Jim Garland explained that the three segment benches are designed to work together to cradle the cascade feature without fully enclosing it, allowing the water to flow freely in all directions. He added that this segmented design aims to maximize seating opportunities while preserving the integrity of the water’s movement.

VM Venkatesh shared her concern that dogs or children may go into the fountain via the opening.

Jim Garland explained that the fountain is not meant to be interactive.

CM Layton inquired about the distance between the fountain and the pavilion.

John Ware answered 20 feet to allow for emergency vehicle access, which is a critical design element, and allowing pedestrian access through the two sides is the other critical element.

CM Layton inquired about the distance from the fountain to the Bank of America Building.

John Ware stated that it is on the order of 10 feet.

CM Layton wanted clarification on the rocks proposed for the fountain.

Jim Garland explained there are two proposed rocks, one is the dark rock in the pool which provides a reflective foundation and the other is the lighter color rock in the sculpture. He noted that both are indigenous.

Mayor McDowell referred to slide 40 and expressed concern that young children might be able to climb into the water fountain and get wet. She emphasized that, as stated in the previous Council meeting, her clear preference was for a fountain that would not allow children to run into it.

Mayor McDowell commented that the fountain is very large with a dimension shy of 40 feet per Jim Garland.

Other
CM Rak referenced slide 27, which shows the site plan, and inquired about how the design team plans to integrate tables and seating into the space.

Jim Stickely stated that the design allows for flexible use of the stage from two directions, with informal seating options like benches and seating walls throughout the park. For formal events, temporary seating would be brought in or attendees could bring their own chairs, a practice that has worked well in other communities.

CM Rak inquired how unfinished the ground covers would be for phase 1A and 1B.

Jim Stickley suggested that if Phase 1A only includes Harrington Park, a clean and simple boundary from building corner to corner could mark the transition to new paving. However,

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June 09, 2025 Packet Pg. 108

he stated that if the pavilion is added to Phase 1A, it would be better to align the boundary with the existing diagonal pavement patterns to create a more natural and integrated look.

Mayor McDowell inquired about the location of the Blue Man statue.

Jim Stickely explained that the Blue Man statue is showing at one of the end plazas on 700 block, which means it would not be in phase 1A.

Bathrooms/ Drinking Fountain
VM Venkatesh inquired if the bathrooms are ADA compliant.

John Ware confirmed they are.

Mayor McDowell inquired about the drinking fountain.

John Ware referred to slide 10 and explained that the water filling stations are outside the restroom located on both sides of the hand wash basin.

CM Dugan referred to slide 10. He gave a shout out to Parks and Recreation Commissioner (Alternate) Alexandra Seeber, who was the one to bring awareness, attention, and focus to the inclusion of a universal changing table. He inquired about the through put of the restrooms during events.

John Ware clarified that by code, they need to put a lavatory (wash basin) in the restroom and the two restrooms would not address peak demands.

CM Dugan asked if there is room for another bathroom.

John Ware stated to add another bathroom it will cost more and use more space.

CM Dugan referred to slide 8. He inquired if the bathroom could be 9 foot tall instead of

8. John Ware noted that could be done and he added they could add a skylight.

CM Dugan welcomed the skylight suggestion and recommended making the bathroom height to 10 foot tall.

CM Dugan referred to slide 27. He inquired about the angling of the stage.

John Ware explained that the design addresses several key factors. First, and most critically, it accommodates an ADA-compliant ramp that must span a specific length to rise 18 inches without requiring handrails, which imposes certain spatial constraints.

Second, the design incorporates organic forms that reflect and compliment the surrounding street layout, helping the structure blend more naturally into the environment.

Third, the pavilion has been intentionally oriented toward the open space along Laurel Street, particularly in the area near the Bank of America plaza. This placement allows

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performances to engage the public space more effectively while minimizing direct impact on the buildings across the street.

Pavilion
CM Dugan expressed appreciation for the beautiful design, noting its strong iconic presence while maintaining an organic feel. He also valued the integration of hanging lights and speakers into the columns. However, he voiced a slight concern regarding the potential massing and bulk of the structure, which could cast dark shadows, and asked whether a more translucent design might help mitigate that issue.

John Ware clarified that the design team views the shadow cast by the pavilion as a benefit during the hot summer months. He noted that the pavilion’s height is scaled to match the adjacent buildings but acknowledged that adjustments to the height could be made if necessary. Regarding translucency, he explained that it would be challenging to achieve a mass timber structure.

Lisa Porras shared that community feedback emphasized the desire for ample shade and noted that the pavilion is one element that could help achieve that goal.

CM Dugan pointed out that the rear entrance to the centennial plaza must be addressed soon as he did not see it in the packet.

Jim Stickely described the park entrance as an inviting space created through the combination of landscaping, signage, and building materials, rather than a formal gate or structure.

John Ware noted that the alley-facing side of the building includes a roll-up door for storage access. He suggested two options to enhance its appearance: one is to collaborate with local artists to paint a mural on the door; the other is to use cedar wood cladding, consistent with the pavilion design, to visually screen the door and protect it from rain.

VM Venkatesh inquired about the Alaskan Yellow Cedar.

John Ware explained that the Alaskan Yellow Cedar is a stronger wood and has better structural properties. He added that his firm has used the same wood in Berkeley for a pedestrian bridge. John Ware noted that when the wood ages naturally, it will turn into a grey tone. They could not use Redwood because it does not have the structural properties and could not use Douglas Fur which is great structurally but could rot when exposed to water.

CM Rak inquired about the Pavilion and bathroom’s metal roof, specifically its ability to absorb noise - such as the sound of rain.

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John Ware clarified that it depends on the slop of the roof but he does not think it is an issue.

CM Rak inquired how much of the acoustics are affected by the height.

John Ware stated he will talk to the acoustic consultant, Salter.

CM Layton inquired about the $295K cost of civil work.

Lisa Porras clarified that the $294K is for the area around the pavilion and any civil work within Harrington Park would be part of the $4.25 million.

CM Layton agreed with CM Rak on obtaining acoustic advice from the consultant.

Mayor McDowell referred to slide 3 and inquired about the pavilion’s location, noting that in previous renderings it was shown partially in Harrington Park and partially on Laurel Street, whereas the current rendering placed it entirely on Laurel Street.

Jim Stickely explained that the pavilion was shifted outward to improve pedestrian flow.

Initially, the sidewalk area felt too narrow, so a setback of 10 to 15 feet from building corners was introduced to create a clearer, more spacious entry into Harrington Park.

Mayor McDowell shared that now her concern is overcrowding Laurel Street with the new Pavilion location.

Public Comment
Andrew Bernette (In-person) residence of San Carlos expressed concern that the current plans may miss an opportunity to incorporate more natural elements into the city, which already lacks green coverage and street canopies. Given climate change and the urban heat island effect, he emphasized the benefits of using natural materials to help lower temperatures. He suggested the design should better align with the city’s values, symbolized by the oak tree on the city seal, and perhaps offer a more whimsical, natureintegrated experience.

Andrew Bernette also questioned the practicality of designing a pavilion stage to be viewed from behind, asked how frequently it would be used for concerts, and suggested incorporating a flat, multi-use element—especially one usable by young children, as seen in Burton Park.

John Durkin (Zoom) asked the following questions:
• Asked what the construction fence will close off during Phase 1A. • Asked whether pedestrians will be able to walk on both the east and west sidewalks during construction.
• Inquired if emergency vehicles will still have 20 feet of clearance to get through the 700 block.

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• Asked how many trees will be removed in Harrington Park. • Asked whether Phase 1A will be the first implementation of a curbless 700 block. • If a curb is later added:
o Will the 18-inch stage be lowered?
o Will the curb affect Hometown Days parades, including vehicles and marching bands?
• Asked whether the fountain will be turned off during a future drought. • Asked whether the fountain will operate 24 hours a day or on a timer. • Inquired how construction vehicles will access the site daily and where they will park.
• Echoed Councilmember Dugan’s question about why a local artist was not involved in the fountain design.
• Suggested that designs should show existing Laurel Street for better context of what the pavilion would look like in that location.
• Asked about the overall construction timeline:
• If the project starts in November, how will it impact Holiday 2025? • Will Holiday 2026 also be affected?
• Mentioned the alley entrance currently has four parking spaces and asked whether they will be lost.
• Expressed concern that the right-angled surfaces in the design will attract skateboarders.
• Commented that aside from kids playing in the fountain, the area could also attract adults drinking beer and wine.

Lisa Porras and Consultant Team answered caller John Durkin’s questions.

Final/ General Comments
CM Layton emphasized that the specific plan is the broader vision of reimagining the downtown for the next generation. While acknowledging that not every issue can be resolved or every question answered within this plan, he expressed confidence that the project is successfully achieving its goal of creating a renewed and involving downtown.

He concluded by commending the staff and design team for their efforts in moving this vision forward.

CM Layton expressed that there is no need to rush the process and that beginning with Harrington Park is a sensible and appropriate starting point.

CM Rak expressed a desire to better understand the dimensions and flow of the redesigned pavilion space, particularly how a 20-foot clearance—might function during events. He suggested it might be helpful for the Council to visit the site with a tape measure to get a clearer visual sense before making final decisions. While he understood

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the reasoning behind moving the pavilion further from the park, he wanted to assess the spatial impact.

Regarding the fountain CM Rak acknowledged that no design can completely eliminate risk, as children could still access the water from surrounding benches. However, he felt the design had moved in a better direction compared to earlier concepts and were supportive with the possibility of minor tweaks.

CM Rak wondered if only one ADA-compliant restroom might suffice and whether redesigning the others to include more stalls, just toilets could improve throughput. He felt that the outside hand washing station would not get used often if there was a hand washing basin inside the restroom.

Overall, CM Rak voiced appreciation for the effort and thought that had gone into the project and recognized the complexity.

Jim Stickely noted that the Council Members comments were on target about the right issues.

VM Venkatesh expressed difficulty in visualizing the project from the current design plans and suggested marking out the layout with chalk on Laurel Street for better understanding.

She generally supported the direction of the project but wanted to see more areas for sitting and is unsure what is going to happen to the pavilion when it is unused. VM Venkatesh also reiterated concerns about the fountain where children can run into it. She thanked staff for their hard work and the refinements made to the design.

Jim Stickley clarified that when there is no performance at the pavilion, there will be removable tables and chairs there for people to hang out.

CM Dugan shared that he preferred the pavilion positioned further out on Laurel Street.

He suggested that, if space is a constraint, the fountain could potentially be shifted more to the left.

Jim Stickely explained that they are trying to make the fountain as part of the central plaza and not impinge on the dinner area.

CM Dugan agreed with CM Rak’s suggestion to make one restroom ADA compliant and the other non-ADA compliant, containing only stall-style toilets without lavatories.

CM Dugan stated that he felt the consultant had done a good job refining the design. He shared that he does not believe the new design would attract children to splash and play in the fountain, as it is zero-depth. He also remarked that the water flowing down to the ground and wrapping over the edge is quite striking.

CM Dugan inquired if the $8 million cost would include all the underground work and would the $6.9 million give them 1A.

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Jeff Maltbie, City Manager, explained that expanding Phase 1A beyond Harrington Park would create major drainage and utility challenges, requiring costly temporary infrastructure that would be removed later. Due to these complications and inefficiencies, he does not recommend extending Phase 1A further.

Lastly, CM Dugan reiterated that it would be beneficial to engage the public for input on the fountain and invited feedback from his fellow council members.

Mayor McDowell shared that she liked the idea of going to downtown and chalk out how big the fountain and pavilion would be. She stated that she does not support the fountain in its current form that allows children to walk straight into the water. Mayor McDowell expressed concern with the $1 million fountain price tag.

Mayor McDowell expressed that she does not believe seeking public input on the fountain would be productive, as it would likely only delay the process. She noted that art is highly subjective, and if the council is struggling to reach a consensus, it would be even more difficult to do so with the broader public.

Mayor McDowell expressed that she is comfortable with the proposed plan for two restrooms. She noted that during large events like the Art and Wine Festival, there are typically plenty of port-a-potties provided for public use. She added that even if a few more restrooms were added in Harrington Park, they would not be sufficient to meet the demand during major events.

Mayor McDowell referred to Slide 27 and inquired about the pink dotted lines. Jim Stickely clarified that those are soil trenches and permeable pavers above them.

Mayor McDowell shared that she still has concerns about the two large structures but believes that a chalk visual would be helpful. She asked Staff whether a decision was needed that evening.

Jeff Maltbie noted that a decision would be needed that evening in order to meet the November deadline.

Jim Stickley suggested taking the Council’s input from the evening to the design team, allowing them to make minor modifications to address concerns and continue the project as an ongoing design development.

Jim Garland emphasized their commitment to meeting the Council's expectations and expressed confidence in the stone and water design. While the fountain was not designed to be inviting children to enter, he acknowledged that young kids may still be drawn to it.

He welcomed feedback and expressed willingness to refine the design, including adding benches and addressing safety concerns, to ensure Council satisfaction.

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CM Rak commented that if the decision is limited to Phase 1A, the Council could make a decision that evening. If necessary, the Staff and Consultant team could present two restroom options at the June meeting for the Council to consider and select from.

Lisa Porras stated that if the design team need to flush out two restroom options, it would delay the schedule for a month.

CM Rak commented that he is fine with the current restroom design for Harrington Park.

CM Layton expressed appreciation for the unique and thoughtfully designed fountain, noting it avoids a generic feel and serves as a strong focal point. He acknowledged that children will likely interact with the fountain regardless of design. Regarding restrooms, he was hesitant to support adding another downtown due to questionable return on investment, especially since large events will still require portable toilets.

Lisa Porras reminded the Council that the new plaza design will also incorporate public restrooms.

CM Dugan stated that he is ready to approve phase 1A as it is presented with the stipulation of the skylights and 10-foot ceiling in the restrooms.

VM Venkatesh shared that she is also supportive of phase 1A with the exiting design and of adding more bathrooms in Wheeler Plaza.

Mayor McDowell asked if the consultant team could tape out the pavilion and water feature.

Lisa Porras stated that staff will notify the Council and City Manager once the chalk layout on the ground is ready.

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March 10, 2025, City Council Meeting Minutes

11. STUDY SESSION
Receive a Presentation and Provide Direction to Staff on Site Furnishings, Paving Design and Materials, Special Elements, Lighting, Planting Palette, and Design Choices for the Water Feature on the 700 Block of Laurel Street and Harrington Park.

Water Feature:

CM Rak inquired about the budget for the water feature. He expressed a preference for the first design option, noting that he could envision children playing in it but was uncertain if the additional cost was justified. CM Rak views the area as an urban park with a modern aesthetic rather than a wooded setting and would prefer a fountain design that aligns with that theme, provided cost is not a concern.

VM Venkatesh shared that a water feature encouraging children's play would create more noise and unlike the Zen feel that people think of a water feature. She liked the fog concept for its uniqueness but was unsure how it would work. She preferred the sculptural rock option with plantings, seeing it as more organic, peaceful, and still engaging for children in fun ways, like adding boats.

CM Layton expressed concerns about the cost of Concept 1 and leaned towards Concept

2. He appreciated the creativity of the fog feature and its year-round concept. He also noted that a large water feature, like in concept 1, would take up a significant amount of space.

CM Dugan inquired about the safety concern in concept 1 and the various features. He also inquired who is drawn to fog, referring to concept 2. CM Dugan expressed his appreciation for the Interactive Blooms feature in concept 1, highlighting its role as a central gathering space for families, where children can engage while others dine. He noted its modular and flexible design, allowing it to be turned off for a more peaceful setting during pavilion events. Additionally, he acknowledged its benefit of providing extra seating in the area. CM Dugan shared that he is not too concerned about the budget for a signature design.

Mayor McDowell stated that she is not a fan of the concept 1 design because children will get wet and go inside a retail shop or restaurant soaking wet. She noted that San Carlos downtown is for retail and dining, it is not a park. Mayor McDowell commented that concept 2, the fog feature, is unsustainable and would prefer concept 3. She commented that there should be barriers around the fountain and no splash pads. Mayor McDowell wanted a feature that runs 24/7.

CM Rak inquired about the amount of water loss in the fog water feature option and the sizes of each option.

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He also inquired if the consultants sought feedback from the downtown businesses on their thoughts of having a water feature downtown such as noise.

CM Rak shared that he leaned toward Concept 3, noting it is a better fit for the space and more suitable for accommodating events.

VM Venkatesh inquired if the fog would cool down the surrounding area.

CM Layton requested clarification from the Mayor on the goal of the evening—whether it was for the Council to reach consensus on a water feature or to determine a majority preference for one of the options.

CM Layton wanted to know if there are other options available other than the 3 that were presented.

CM Dugan requested clarification on the meaning of the term “interactive.” He asked the Council to consider a raised version of Option 1 for the water feature—one where people aren’t playing in it, but rather with it.

City Manager echoed CM Dugan’s thought.

CM Dugan did not support fog in downtown San Carlos.

Mayor McDowell stated they should consider the cost of the water feature and needed to understand the cost tradeoffs and not fall short on the budget.

CM Rak suggested that a fountain with occasional water bursts or intermittent activity could be a viable option.

CM Dugan commented that a common thread among the Council was incorporating a vertical stone element into the water feature.

Public Comment – Water Feature
Sonia Elks (In-person) suggested piloting a section of misters that activate above 80°F to provide a refreshing, low-impact experience, especially for children. She recommended using runoff water from features to irrigate downtown landscaping. Additional ideas included incorporating color-changing elements and using mist or fog to add moisture to the air for comfort in dry conditions.

Paving Feature
CM Layton inquired about the meaning of pathways. He shared his liking of using paving to distinguish the different functions or dynamics within the area. CM Layton commented that the public would appreciate clarification of flow patterns, such as centralized points and diagonal walking paths.

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CM Dugan appreciated the thoughtfulness of the paving patterns but suggested keeping them casual and natural in appearance. He expressed that it would be ideal to use pavers that are not scooter-friendly, to discourage people from riding through the area.

CM Dugan, suggested to have the Donor pavers close to the pavilion instead of tucked aways near the bathroom.

VM Venkatesh inquired about the maintenance of the pavers, considering the presence of foliage.

Mayor McDowell inquired about the outdoor dining setup, specifically whether there would be short partitions and how they might impact the pavers. She asked who is zoned for retail and restaurants that might potentially receive less space due to the bioretention areas, emphasizing that this is information the City should know sooner rather than later.

Mayor McDowell stated that the Council needs to set a policy direction for how outdoor dining should be implemented. She commented that streetscape and pavers are interwind and perhaps the Council needs to have another meeting to discuss.

CM Dugan shared that the European model was discussed at the Downtown subcommittee meeting. He shared that in his mind the seating would always be bistro tables, umbrellas, and no enclosure. It would be free flowing.

CM Dugan emphasized the need to review best practices for outdoor dining, noting that parklets were a temporary pandemic solution and should not dictate future space allocation. They stressed that outdoor dining should stay in front of restaurants—not spill into retail areas—and that the focus should be on creating a vibrant public square. The Council should approach this deliberately and reach consensus, given the expected strong community opinions.

CM Rak shared that he is unsure if the dining policy would have anything to do with the paver designs.

Mayor McDowell expressed concern about costs and asked whether it was necessary to have so many different colors of pavers. She inquired whether certain types of pavers might be difficult for people with disabilities to traverse.

Public Comment – Paving Features
Sonia Elks (in-person) shared that there are alternative ways to deter scooters, such as using truncated domes, with examples seen at the major playground in Redwood City.

She emphasized the importance of creating a designated space for active teens to help prevent disruptive behavior in other parts of Downtown.

Benches

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CM Dugan expressed a preference for the innovative concrete bench designs, noting that wood does not hold up well in outdoor weather conditions. He noted that steel or concrete could be comfortable as well.

CM Layton shared that he liked the look and feel of benches with integrated lighting and noted that he is not a strong supporter of movable furniture.

VM Venkatesh reiterated that wood would not work in this area, unless it is teak, which is expensive.

CM Rak reiterated the preference for using materials other than wood for benches. He agreed with CM Layton that movable furniture should be reserved for special occasions and not require daily handling by staff. He also suggested placing some backless benches in the center of the plaza to allow flexibility for people to turn around during performances and similar events.

Mayor McDowell commented that the City should consider the heat generated by the sun on benches during the summer months. She also wondered whether there is a way to anchor the furniture, noting that people often like to sit and enjoy their email.

VM Venkatesh shared her preference for the wood look, citing an example from the Palo Alto Medical Foundation. She noted that steel benches become uncomfortably hot to sit on during the summer.

CM Rak commented that tables should be provided so people can sit outside and enjoy their meals. Regarding benches, he expressed a preference for materials that require minimal maintenance and can withstand weather conditions.

CM Dugan expressed a preference for bench materials that offer a long-term solution. He proposed using metal benches for the urban plaza setting, while reserving more organic elements for the area around the Pavilion.

Other Furnishing
CM Dugan shared that he liked the proposed contemporary furniture elements, appreciating the mix of urban and organic styles.

CM Rak expressed a preference for a more contemporary look. He emphasized the importance of including recycling, trash, and compost bins in the downtown area, stating that he wants San Carlos to demonstrate ecological leadership.

CM Rak inquired whether the consultant team had consulted with an arborist to ensure appropriate tree sizing and to confirm that the trees would grow well together and remain healthy.

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VM Venkatesh inquired about the design of the bridge and whether it would resemble the one shown in the photos. She expressed concern that children might fall into it.

Mayor McDowell shared that she would like to know the cost of the various bollard options and noted that all the proposed designs looked great.

Public Comment - Furnishings
Sonia Elks (in-person) emphasized the importance of including bike racks and suggested that incorporating more artistic designs would be a nice touch.

Planting and Trees
VM Venkatesh shared her concern with Crepe Myrtle and the California Sycamore trees.

CM Rak expressed a dislike for deciduous trees. He said he liked the Crepe Myrtle for corner plantings, noting that they are not large trees. He also expressed a preference for plants that are more native to the area.

CM Layton expressed agreement with CM Rak and VM Venkatesh, noting that the most frequent complaints from the public involve sap on the pavement and other droppings, such as acorns. They emphasized the importance of selecting plantings that help keep the area clean. He also voiced support for incorporating more California native plants into the downtown area, both for maintenance benefits and to enhance the local thematic identity.

CM Dugan expressed appreciation for the variety of colors in the proposed plants and trees. He agreed with other Councilmembers on the importance of maintaining cleanliness in the area. He also shared his dislike for evergreen trees, citing their large size and resemblance to Christmas trees, and expressed a preference for deciduous trees.

Mayor McDowell inquired about the possibility of aphids being present on the plants. She also expressed her appreciation for the Sycamore evergreen trees. Additionally, she asked whether the bioretention area had expanded. Mayor McDowell emphasized the importance of ensuring that the bioretention area does not encroach upon the 700 block of Laurel Street, as this area is designated for retail and dining purposes.

CM Dugan stated that if they believe the bioretention area is too large, the City can always install a storm drain as an alternative.

Public Comments – Plantings
Sonia Elks (In-person) propose placing a metal grate over large bioretention areas, with a picnic table or bike racks on top, allowing water flow while making the space usable.

Lighting

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CM Dugan expressed a preference for more contemporary lighting options. He mentioned that he had never heard of catenary lighting before but liked the sense of place that the lantern-style lighting provides.

CM Rak agreed with CM Dugan on the catenary lights and a more contemporary lighting option. He liked the upper left and lower right lighting options.

CM Layton agreed with his fellow council members and requested clarification on the decision regarding aerial lighting.

CM Rak appreciated catenary lights throughout downtown which makes the area more inviting.

Mayor McDowell liked the catenary lights as well but noted that she is unsure how that fits in the overall light scheme of downtown. She also shared that she did not like the contemporary light.

Mayor McDowell shared that she once visited a town called Winter Park in Florida, where the streetlamps were "smart” allowing people to charge their phones and featuring small speakers that played music.

CM Dugas expressed support for the lights but questioned using them along the entire block, suggesting it might dilute their impact. He sees the lights as a way to highlight special areas, such as near a future fountain with unique lighting. He recommended involving a consultant to explore options, including different light styles or sizes, perhaps even a commercial version of fairy lights for places like Harrington Park.

CM Dugas expressed his linking of bollard lights and bench lights.

VM Venkatesh noted that the final choice should be based on cost and what makes the most sense.

Special Element
CM Dugan expressed a desire for the special element to be both artistic and functional, ideally serving as something children can also play on. He liked the idea of a chessboard and suggested adding a ping pong table that could double as a dining table. CM Dugan also expressed interest in having a cornhole game in the downtown area.

VM Venkatesh expressed a preference for chalkboards and chalk, allowing children to be creative rather than simply observing something. She favored a more organic approach and shared an example from San Diego, where trees are incorporated into the space in a way that allows kids to climb on them.

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CM Rak appreciated the elements presented by the consultants. He liked the idea of interactive features and suggested that some of them could be seasonal, brought out occasionally to enhance the experience.

CM Layton emphasize viewing these areas as opportunities rather than immediately committing to structures or play equipment. For example, a play sculpture might be a great fit for Harrington Park to start with, while leaving room to add other elements gradually over time.

CM Dugan encouraged collaboration with the Parks and Recreation Department, noting their ongoing Centennial celebrations, including installing historical markers with QR codes around town. He suggested designating a spot in the Centennial Plaza and placing one of these markers there to highlight San Carlos’s history.

Mayor McDowell expressed her support for the Ping Pong table idea and inquired whether the consultant team is collaborating with Art Bias to potentially create a project for the 700 block
Public Comment – Special Element
Sonia Elks (in-person) stressed the importance of engaging teenagers and proposed two ideas. First, she suggested creating a pump track for kids on wheels, which should be accessible to the downtown. Second, she recommended organizing a mystery or trivia challenge where participants move around the town to solve clues, with a prize like $100 and potential business sponsorships. In addition, Sonia advised incorporating interactive elements like short tree trunks or rocks for walk on them, as they encourage movement and play, rather than relying on a single static structure.

Nathan (via Zoom) suggested adding a community board along with a directory of retail shops and restaurants.

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City Council Meeting February 10, 2025

10. STUDY SESSION
b
.

Receive a Presentation and Provide Direction to Staff on the Design and Layout of Key Features for Improvements to the 700 Block of Laurel Street and Harrington Park (Phase 1 Downtown Implementation Component).

Lisa Porras, Planning Manager and Jim Stickley, Principal consultant at WRT presented the item.

Council Member (CM) Layton inquired about the intended purpose and vision for the small and medium size stage. He also asked about the spatial relationship between the stage and the water feature, questioning whether they might compete with each other during a music performance. Lastly, he inquired about the design concept and functionality of the alleyway.

CM Dugan expressed his preference for the pavilion to be medium or medium-plus in size, considering the nearby residents behind the Wheeler Plaza area. He questioned whether this location would serve as the primary gathering space and suggested making it the central focal point.

CM Dugan noted that the public may want seating options as events are happening on the pavilion. He also expressed his preference for the fountain to have an organic, flowing design that complements the overall aesthetic rather than a boxed-in structure.

CM Dugan agrees with CM Leighton that the alley entrance should be welcoming and pull people into the plaza. He also suggested beginning public communication about the plans for the Memorial Bricks and their future placement. Council Member Dugan reminded staff and the consultant team to keep in mind the existing newspaper boxes and the City’s free papers, emphasizing their significant community benefit.

CM Rak expressed his appreciation for the idea of a gateway to the park from the alleyway.

He agreed with CM Dugan’s idea of making the water structure more fluid like. He also noted the importance of finding the right balance with the stage and music, considering there are residents all around, including along El Camino Real.

Mayor McDowell emphasized the need for a drinking fountain or water station. She also wanted to ensure that diaper-changing stations are included in the restrooms. Additionally, she expressed uncertainty about the inclusion of outdoor handwashing stations.

Mayor McDowell liked the idea of a bench in front of the water structure, as it serves a dual purpose—providing seating and acting as a barrier to prevent young children from

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accessing the water directly. She suggested backless seating so people can face either the fountain or pavilion.

Mayor McDowell inquired about the status of the U.S. Bank driveway and expressed her appreciation for the natural elements incorporated into the overall design, especially the wood pavilion, which soften the features.

Mayor McDowell agreed with CM Dugan that if the City builds a medium-sized stage, it should be able to accommodate at least a medium-sized band. She noted that there may be some pushbacks from residents in Wheeler Plaza if bands perform in that area.

Mayor McDowell suggested bike parking in the alley behind Harrington Park.

Public Comment
Karen Molinari (in person) expressed gratitude for the project and enthusiasm for its impact.

As a member of the Economic Development Advisory Commission, she is optimistic that it will increase foot traffic in downtown and benefit businesses along Laurel Street.

Caroline (in Zoom) supported the idea of sinks outside the bathrooms, noting they would reduce wait times and discourage their use for bathing. They suggested looking at a similar example in a park on 24th Street in San Francisco’s Noe Valley for reference.

Council Members Final Comments
CM Dugan sought confirmation from City Attorney Greg Rubens that the City is not infringing on the US Bank easement due to the permanent closure of the 700 block of Laurel Street.

He also proposed adding Tableau rock seating in the 700 block, similar to those in Chilton Park, as they would complement the fountain well.

CM Layton emphasized the importance of design details, particularly regarding outdoor handwashing stations, which could unintentionally encourage bathing. He also highlighted the need for thoughtful seating design to enhance events like Music in the Park and ensure the pavilion remains the focal point. He raised concerns about potential bottlenecks in the fountain areas and the impact of elevating the pavilion, including accessibility and unintended uses, such as protests. CM Leighton urged careful consideration of these elements to ensure a functional and welcoming downtown space.

CM Rak emphasized maintaining the promenade's accessibility, ensuring that while music and seating are important, they should not obstruct movement or business access. He preferred backless benches and highlighted the there should be a distinction between an urban plaza and a traditional park. While natural design elements are welcome, the space

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should still function as a downtown promenade, balancing aesthetics with practicality in an urban setting.

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Downtown Streetscape Master Plan
Adopted April 28, 2025
https://www.sancarlosdowntownplan.com/_files/ugd/f9fd48_0dc9022af0a843e5b87c749 3116d9f78.pdf

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Potential Implementation Timeline for Harrington Park Murals The Downtown Streetscape Master Plan identifies Harrington Park as an opportunity site for public art murals. There are two building facades (one against 753 Laurel and the other against 765 Laurel) which face into Harrington Park and which, with property owner permission, have the potential to host new public art pieces. The Advance Planning Division and the Parks and Recreation Department have coordinated to draft two potential schedules for the implementation of these murals. Schedule 1 outlines an estimated timeline for selecting an artist through a Call for Artists process. Schedule 2 outlines an estimated timeline for staff selection of an artist.

Schedule 1. Timeline with a Call for Artists:

Task Timeline
Call for Artists is prepared and released
for 1 month period
During months 1-3
Public Art Task Force reviews
submissions
During month 4
Parks, Recreation, and Culture
Commission reviews submissions
During month 5
City Council reviews submissions and
makes a selection
During month 6
Contract with artist is drafted and signed During months 6-7 Mural is painted During months 8-9
Schedule 2. Timeline with an artist selected by Staff:

Task Timeline
Staff selects an artist During months 1-2
City Council approves selection During month 3
Contract with artist is drafted and signed During months 3-4 Mural is painted During months 5-6
Staff recommends that the process result in a single artist or artist team to paint the Harrington Park mural(s), working with one or more of the following themes and/or other themes as directed by the City Council:

1. Tributary of cultural influence

2. Tributary of ecological influence

3. San Carlos’ Centennial

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 9, 2025
ITEM TITLE: Consideration of Adopting a Resolution Classifying the Various Components of General Fund Fund Balance as Committed Balances as Defined in Governmental Accounting Standards Board Statement No. 54 (“GASB 54”).

RECOMMENDATION:

Staff recommend that the City Council adopt a Resolution classifying the various components of General Fund Fund Balance as Committed Balances as defined in GASB 54.

FISCAL IMPLICATIONS:

There is no direct fiscal impact. The amounts reported in the total fund balance are not altered.

Classifications under GASB 54 are for financial reporting purposes only.

BACKGROUND:

GASB 54 was issued in February 2009 and implemented by the City in fiscal year (FY) 2010-11.

This pronouncement defines five distinct classifications of fund balances as follows:

CLASSIFICATION NATURE OF DESIGNATION
Non-Spendable Cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to remain intact.

Restricted Restriction either externally imposed or imposed by law through constitutional provisions or enabling legislation.

Committed Reserved for specific purposes pursuant to constraints imposed by formal action of the City Council. Commitments may be changed or lifted only by the government taking the same formal action that imposed the constraint originally.

Assigned Reserved by the City Council or the City Manager for the intent to be used for specific purposes, but neither restricted nor committed.

Unassigned Residual balance not classified in any of the above categories and not restricted for any use. Unassigned fund balance is a residual classification and is technically available for any purpose.

Per the City’s Adopted Financial Policies (last adopted in May 2025), we will work toward establishing, dedicating, and maintaining reserves annually to meet known and estimated future obligations. The hierarchy followed to deplete these reserves is as follows: first unassigned fund

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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 with the conditions of commitment and formal action of the City Council.

ANALYSIS:

Economic Uncertainty Reserve:

In the past seventeen years, the only time the City contemplated dipping into this reserve was during FY 2020-21, following the national declaration of the COVID-19 emergency. In March 2020, the City and the rest of the world experienced an unprecedented event with the declaration of the worldwide pandemic of a novel coronavirus (named COVID-19 by the World Health Organization). It was also highly unexpected when the City of San Carlos was informed that a hotel within the city would be used to quarantine several individuals from a passenger ship that had been exposed to COVID-19. In response, the City Manager immediately activated the City’s Emergency Operations Center and, acting as Director of Emergency Services, proclaimed the existence of a local emergency pursuant to 2.28.060(A)(1) of the San Carlos Municipal Code.

Even though it was expected the funds would be needed, due to higher revenues and savings achieved from vacancies throughout the year, the funds were not needed.

In June 2024, the Council adopted Resolution 2024-071 that further clarified the use of these funds. The commitment definition was updated to state that appropriations and access to these funds will be reserved for emergency situations. Emergency situations are further defined as catastrophic disasters as declared locally or by the state or federal government or budgeted revenue taken by another government entity. This definition would require the formal action of the City Council to utilize these funds and as stated in the definition, an emergency would not be something that should routinely occur. The reserve would not be used for ongoing expenditures and is therefore separate from a stabilization or “rainy-day” fund that could be used more frequently if budget projections are not met. A “rainy-day” fund would fall into the definition of Unassigned Fund balance as reflected in the table above.

The Government Finance Officers Association (GFOA) has issued its best practice in determining the appropriate level of unrestricted fund balance in the General Fund to be at a minimum of no less than two months of regular general fund operating revenues or expenses, which equates to approximately 17%. The Economic Uncertainty Reserve has been set at 17% of total operating expenditures, or two months of regular general fund expenditures, for several years in accordance with GFOA guidance.

Strategic Property Acquisition Reserve (SPAR):

As is done at the end of every fiscal year audit, the City Manager and the Administrative Services Director review the fund balances and determine what the appropriate assignments should be. In FY 2023-24, there were General Fund savings and a portion of that, or $2,000,000, was set aside to be added to the existing SPAR balance of $10,191,795. Since fund balances can only be committed by the City Council, it is recommended that the City Council recognize the additional $2,000,000 as SPAR funds, bringing the total balance available for this purpose to $12,191,795.

If the attached Resolution is approved, the General Fund Reserve Balances would be as follows:

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Projected
FY 24-25
% of
FY 25
Exp
Proposed
FY 25-26
% of
FY 26
Approp
Proposed
FY 26-27
% of
FY 27
Approp
Committed Fund Balances:

Economic Uncertainty $ 10,188,605 17.0% $ 11,379,600 17.0% $ 11,862,489 17.0% Strategic Property Acquisition $ 10,191,795 $ 12,191,795 $ 12,191,795 Assigned Fund Balances:

Unfunded Liabilities $ 3,000,000 $ 2,600,000 $ 2,200,000 Strategic Property Acquisition $ 2,000,000 $ - $ -
Facility/Infrastructure $ 23,990,500 $ 10,891,500 $ 3,891,500 Ending Reserve Balances $ 49,370,900 82.4% $ 37,062,895 55.4% $ 30,145,784 43.2% Unassigned Fund Balance $ 2,003,841 $ 1,355,320 $ 1,282,787 Nonspendable Fund Balances $ 2,159,946 $ 1,637,946 $ 1,118,946 Total Ending Fund Balance $ 53,534,687 $ 40,056,161 $ 32,547,517

RESERVE FUND BALANCES - GENERAL FUND
When looking at the total reserve percentages, all categories need to be considered. In the Annual Comprehensive Financial Report, the categories that make up the unrestricted fund balance as defined by the GFOA are the following: Economic Uncertainty Reserve, Strategic Property Acquisition Reserve, Unfunded Liability Reserve, Facility and Infrastructure Reserve, and the Unassigned Fund balance. For our purposes, we will consider our reserves to be those defined as committed and assigned as noted in the chart. Even excluding the unassigned fund balance, the City maintains healthy reserves well above the GFOA best practice guidelines.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution classifying the various components of General Fund Fund Balance as Committed Balances as defined in the GASB 54; or

2. Do not adopt a 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

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RESOLUTION NO. 2025 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

CLASSIFYING THE VARIOUS COMPONENTS OF GENERAL FUND FUND BALANCE AS

COMMITTED BALANCES AS DEFINED IN GOVERNMENTAL ACCOUNTING STANDARDS BOARD STATEMENT NO. 54 (“GASB 54”).

WHEREAS, GASB 54 was issued in February 2009 and implemented by the City in fiscal Year (FY) 2010-11; and
WHEREAS, the City Council has adopted financial policies outlining the definitions of fund balances; and
WHEREAS, the City Manager assigned fund balance in the amount of $2,000,000 to the Strategic Property Acquisition Assigned Fund Balance in FY 2023-24; and WHEREAS, the City Council would like to move the $2,000,000 from the Strategic Property Acquisition Assigned Fund Balance Reserve to the Committed Strategic Property Acquisition Fund Balance Reserve; and
NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council hereby adopts the classifications of Fund Balance per GASB 54 and transfers the Assigned Strategic Property Acquisition Reserve to the Committed Strategic Property Acquisition Reserve. * * * * *
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 9th day of June 2025, by the following vote:
________________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos
AYES, COUNCILMEMBERS:

NOES, COUNCILMEMBERS:

ABSENT, COUNCILMEMBERS:

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CITY COUNCIL

STAFF REPORT
MEETING DATE: June 9, 2025
ITEM TITLE: Consideration of Adopting a Resolution Adopting the Biennial Budget for Fiscal Years (FY) 2025-27, Including the Two-Year Operating and Capital Budgets, for the City of San Carlos.

RECOMMENDATION:

Staff recommend that the City Council adopt a Resolution adopting the biennial budget for fiscal years (FY) 2025-27, including the Operating and Capital Budgets, for the City of San Carlos.

FISCAL IMPLICATIONS:

The attached proposed budget for the City of San Carlos represents appropriations in FY 2025- 26 totaling $129,060,778 and FY 2026-27 totaling $122,286,039. For additional financial overview information, please refer to the various summary sections in the attached proposed budget document.

BACKGROUND:

The City Council held a Budget Study Session on April 29, 2025 to review the proposed changes in revenues, expenditures, transfers, programs, and capital projects for the FY 2025-27 budget.

The attached proposed budget reflects the funding priorities that the City Council directed staff to incorporate into the proposed budget document.

ANALYSIS:

The proposed budget includes the following items that were added and/or modified at the Council’s request following the Budget Study Session:

Changes made during the April 29, 2025 Budget Study Session:
• Downtown Planning Initiative Project (C2105). Increased the grant funding from $120,000 to $300,000 in FY 2025-26 since the full grant was awarded. • Comprehensive East Side Master Streetscape Plan (C2207). Increased the appropriation in FY 2025-26 to $150,000 to expand the scope of work to include the Northeast Area Specific Plan, the full segment of Industrial Road, and streets in the Industrial Arts District. • Tree Well Replacement on Industrial Road (C2212). Moved this project in the amount of $360,000 to the Unfunded list to prioritize the streetscape plan and approach this project with an updated timeline.

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Changes made during the May 12, 2025 City Council meeting:
• Roof Replacement and Solar Panel Upgrade (C2410). Increased the appropriation in FY 2024-25 by $250,800 for a total project budget of $425,800. This appropriation was offset by grant funding from Peninsula Clean Energy in the same amount, leaving no impact to the fund balance.
• Library Roof Upgrade (C2419). Increased the appropriation in FY 2024-25 by $119,380 for a total project budget of $369,380.

These recommendations and adjustments have all been incorporated into this proposed budget.

Additional details on all the funds can be found in the Budget Transmittal Letter, Basis of Budget Preparation, and Major Funds Summary documents in the proposed budget.

In celebration of the City’s centennial year, the proposed budget book incorporates the centennial theme with history woven throughout the document.

ALTERNATIVES:

The alternatives available to the City Council include:

1. Adopt a Resolution adopting the Biennial Budget for Fiscal Years 2025-27, including the Operating and Capital Budgets for the City of San Carlos; or

2. Do not adopt a 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. Proposed Fiscal Year 2025-27 Biennial Budget

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RESOLUTION NO. 2025 – ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS ADOPTING THE BIENNIAL BUDGET FOR FISCAL YEARS 2025-27, INCLUDING THE TWOYEAR OPERATING AND CAPITAL BUDGETS, FOR THE CITY OF SAN CARLOS.

WHEREAS, the City Council reviewed and discussed the proposed biennial budget for fiscal years (FY) 2025-27 during the Budget Study Session held on April 29, 2025 and provided general direction to staff on the recommendations contained therein during the public meeting; and
WHEREAS, the proposed budget was prepared in accordance with the financial policies of the City; and
WHEREAS, the proposed budget is a balanced expenditure plan that ensures the maintenance of adequate reserves during FY 2025-27.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council as follows:

1. That the proposed budget for the City of San Carlos, totaling appropriations of $129,060,778 in FY 2025-26 and $122,286,039 in FY 2026-27, is adopted as the budget of the City for said years; and

2. That the City Clerk of the City of San Carlos is hereby directed to forward a copy of said approved and adopted budget to the County Controller of San Mateo County for filing pursuant to Government Code Section 53901.
* * * * *
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 9th day of June 2025, by the following vote:
________________________________
CITY CLERK of the City of San Carlos
APPROVED:
___________________________
MAYOR of the City of San Carlos
AYES, COUNCILMEMBERS:

NOES, COUNCILMEMBERS:

ABSENT, COUNCILMEMBERS:

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CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 2CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 2

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MAYOR

SARA MCDOWELL

MEMBERS OF THE CITY COUNCIL

PRANITA

VENKATESH JOHN DUGAN NEIL LAYTON ADAM RAK

VICE MAYOR COUNCIL MEMBER COUNCIL MEMBER COUNCIL MEMBER

CITY TREASURER

INGE TIEGEL

CITY STAFF

JEFF MALTBIE
City Manager

REBECCA MENDENHALL
Administrative Services Director

PAUL HARRIS
Financial Services Manager
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CITY STAFF

AMY NEWBY
Parks & Recreation
Director

CRYSTAL MUI
City Clerk/Director of Community
Relations

NIL BLACKBURN
Assistant City Manager

BARAKA CARTER
Fire Chief

GREG DACUNHA
Deputy Fire Chief

MARK MYERS
Police Captain

GREG RUBENS
City Attorney

AL SAVAY
Community Development Director

STEVEN MACHIDA
Public Works Director

ACKNOWLEDGEMENTS
Cover Design:

Madeleine Payumo
Budget-in-Brief:

Chrysa Perakis
Book Photographs and Articles:

Digital reproductions of newspaper articles courtesy of the California Digital Newspaper Collection, Center for Bibliographic Studies and Research, University of California, Riverside, https://cdnc.ucr.edu/ and https://www.newspapers.com/
Budget Book Preparation:

City of San Carlos’ Finance & Administrative Services Division Rebecca Mendenhall, Director of Administrative Services Paul Harris, Financial Services Manager
Marco Lao, Senior Accountant
Paula Decano, Senior Accountant
Jenny Liu, Senior Management Analyst
Madeleine Payumo, Administrative Assistant
Connect with us:

Website: https://www.cityofsancarlos.org/
CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 4

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TABLE OF CONTENTS

BUDGET OVERVIEW
Budget in Brief FY 2023-25.......................................................................................................... 9 Budget Message ........................................................................................................................ 11 Impact of State Budget, Legislation, and Regulations ............................................................... 16 Readers Guide to the Budget .................................................................................................... 35 Top Ten Budget Frequently Asked Questions (FAQs) ............................................................. 37 Basis of Budgeting and Accounting ........................................................................................... 43 Budget Process and Calendar................................................................................................... 45 Major Funds Summaries............................................................................................................ 51 Government Finance Officers Association (GFOA) Award........................................................ 55 Community and Economic Profile .............................................................................................. 57 Top Ten Amazing Facts About the City of San Carlos .............................................................. 65 Community Satisfaction Survey Summary................................................................................. 67

FINANCIAL POLICIES
Financial Policies........................................................................................................................ 69 Resolution Adopting Financial Policies ...................................................................................... 75 Debt Management Policy ........................................................................................................... 77 Debt Disclosure Procedure Policy.............................................................................................. 87 Resolution Adopting Debt Management Policies ....................................................................... 95 Investment Policy….................................................................................................................... 97 Resolution Adopting Investment Policies ................................................................................. 109

STRATEGIC PLAN AND OBJECTIVES
Strategic Plan and Objectives .................................................................................................. 111 CIP Projects by Strategic Objective…...................................................................................... 117

FINANCIAL SUMMARIES
Fund Structure ........................................................................................................................ 119 Fund Balances: Operating Capital and Other Budgets............................................................ 123 Fund Balance Status (5-Year Trend)....................................................................................... 127 Summary of Sources and Uses by Fund Type FY 2025-26 and FY 2026-27 ......................... 128 General Fund Summary........................................................................................................... 132 General Fund Long Term Forecast.......................................................................................... 133 General Fund Department Summaries .................................................................................... 134 General Fund Operating Budget Revenues and Expenditures FYs 2025-26 and 2026-27 .... 135 Allocation and Transfer Summary............................................................................................ 136

REVENUES
Revenue Budget Assumptions................................................................................................. 139 Citywide Operating Revenue by Major Category and Source ................................................ 140 Description of Major General Fund Revenue Sources ........................................................... 141 Revenues by Major Category and Source............................................................................... 149 Revenue Detail by Fund .......................................................................................................... 150 Citywide Revenue Adopted Biennial Budget for Fiscal Years (FYs) 2025-26 and 2026-27.... 156 General Fund Operating Revenues by Type FYs 2025-26 and 2026-27................................ 157 General Fund Operating Revenues Multi-Year Comparison................................................... 158 Property Tax Dollar Breakdown ............................................................................................... 159 CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 5

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TABLE OF CONTENTS
Property Tax Dollar Allocation – San Mateo County ............................................................... 160 Sales Tax by Major Industry Group ......................................................................................... 161 Sales Tax by Revenues per Capita ......................................................................................... 162

EXPENDITURES
Expenditures by Major Category and Source .......................................................................... 163 Citywide Expenditure Adopted Biennial Budget Fiscal Years (FYs) 2025-26 and 2026-27.... 166 General Fund Operating Expenditures FYs 2025-26 and 2026-27 ......................................... 167 Operating Expenditures Multi-Year Comparison ..................................................................... 168

ORGANIZATION CHARTS
Citywide Organization Chart .................................................................................................... 169 Boards, Commissions, Committees, and Regional Joint Power Authorities (JPA) ................. 171 Major Municipal Service Lines and Operating Programs ........................................................ 173

GENERAL GOVERNMENT
City Council.............................................................................................................................. 175 City Manager............................................................................................................................ 183 City Attorney............................................................................................................................. 193 City Clerk.................................................................................................................................. 201 Administrative Services Department........................................................................................ 209 Administration / Risk Management................................................................................. 213 Leadership & Management ............................................................................... 217 General Liability/Risk Management................................................................... 218 Workers’ Compensation Fund........................................................................... 219 City Treasurer… ................................................................................................ 220 General Fund – Non-Departmental ................................................................... 221 Equipment Replacement Fund.......................................................................... 222 Post-Employment Benefits Fund....................................................................... 223 Financial Services .......................................................................................................... 225 Human Resources.......................................................................................................... 231 Information Technology .................................................................................................. 235

COMMUNITY DEVELOPMENT DEPARTMENT
Community Development Department..................................................................................... 241 Leadership and Management......................................................................................... 245 Development and Permitting Services ............................................................. 251 Code Enforcement............................................................................................. 256 Long Range Planning ........................................................................................ 257 Economic Development.................................................................................................. 261 Housing Compliance and Assistance............................................................................. 267 CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 6

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TABLE OF CONTENTS

PARKS AND RECREATION DEPARTMENT
Parks and Recreation Department........................................................................................... 273 Leadership and Management......................................................................................... 277 Athletics .......................................................................................................................... 283 Adult Services................................................................................................................. 287 Youth Services ............................................................................................................... 293 Personal and Family Development ................................................................................ 297 Special Community Events............................................................................................. 301

PUBLIC SAFETY
Police Bureau........................................................................................................................... 305 Fire Department ....................................................................................................................... 315

PUBLIC WORKS DEPARTMENT
Public Works Department ........................................................................................................ 327 Administration and Engineering...................................................................................... 331 Facilities and Maintenance ............................................................................................. 341 Fleet Maintenance .......................................................................................................... 345 Parks Maintenance......................................................................................................... 349 Wastewater..................................................................................................................... 353 Stormwater ..................................................................................................................... 357 Street Maintenance ........................................................................................................ 361 Measure A/K Traffic Congestion Fund .......................................................................... 366 Measure W Traffic Congestion Fund ............................................................................. 367 Gas Tax .......................................................................................................................... 368

PERSONNEL SUMMARY
Summary of Employee Compensation and Benefits ............................................................... 369 CalPERS Pension Plan Analysis ............................................................................................. 371 Summary of Full-Time Positions .............................................................................................. 375 Summary of Elected and Appointed Officials ................................................................. 376 Summary by Department ......................................................................................................... 377

CAPITAL IMPROVEMENT PROGRAM
Capital Improvement Program Summary ................................................................................ 383 Capital Improvement Program Budget .................................................................................... 385 Capital Improvement Program Chart ....................................................................................... 409 Capital Improvement Program Fund Summary ....................................................................... 410 Fund 06 Wastewater (Sewer) Fund......................................................................................... 415 Fund 16 Gas Tax Fund ............................................................................................................ 433 Fund 25 General Fund Capital Projects Fund ......................................................................... 439 Fund 26 Child Care Fund......................................................................................................... 523 Fund 27 Park in-Lieu Fund ...................................................................................................... 529 Fund 29 Housing in-Lieu Fund................................................................................................. 539 Fund 31 Low and Moderate Income Housing Fund................................................................. 539 Unfunded Projects List............................................................................................................. 545 CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 7

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TABLE OF CONTENTS

DEBT SERVICE
Debt Schedule.......................................................................................................................... 547 Legal Debt Margin.................................................................................................................... 549 Compliance with Debt Policy ................................................................................................... 549 Debt Service Obligations ......................................................................................................... 550

GLOSSARY
Glossary ................................................................................................................................... 553 Acronyms ................................................................................................................................. 565 CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 8

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San Carlos, California
1925 2025
$0.17
Sequioa High
General Purpose
$0.15
San Mateo County
$0.12
ERAF Share of
San Mateo County
$0.08
San Mateo
Junior
College General
Purpose
$0.02
ERAF Share of
San Carlos
General Fund
$0.02
Mid-Peninsula
Regional Open Space
$0.01 -Sequoia
Hospital
District
$0.01- County
Harbor District
$0.01- Bay Area,
Air Pollution
$0.01- Mosquito
Abatement
TOTAL CITY BUDGET - Fiscal Years 2025 - 2027
CITY-WIDE APPROPRIATIONS (FY 2025-26) 129.1 MILLION | (FY 2026-27) 122.3 MILLION Budget-in-Brief
The fundamental purpose of the City's Financial Plan is to link what we want to accomplish for the community with the resources necessary to do so. Through the Financial Plan process, the City Council establishes major city goals, tasks, and the necessary resources for community programs and projects.

A C E N T U R Y O F G O O D L I V I N G S P EC IA L EDI TION $0.21
San Carlos
Elementary
General Purpose
$0.04
County Education
Tax
$0.11
San Carlos
General Fund
$0.04
County Library
Property Tax Dollar Breakdown
Although property values remain high in San Carlos, the City receives one of the lowest percentages of revenue (13.27%) in the County. This rate was set with the passage of Proposition 13 in the late 70s. The remaining 86.73% goes toward funding the County, schools, and special districts as shown in the breakdown below. 9 10.c
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$60M $18.3M
General Fund Reserves
Traffic &
Transit
$1.3M
Parks
&
Recreation
Sewage
Improvements
& Replacements
Childcare
revenues expenditures
Capital Improvement Projects account for a major portion of the City’s budget. Capital Projects help maintain or improve a City asset, often called infrastructure (roads, bridges, community facilities, etc.). Projected spending over the next five years (Fiscal Years 2025-2030) totals $164 million and funds the following categories:

General Fund (GF) Reserves at the end of
Fiscal Year (FY) 2025-26 are projected at
$40 million, which equates to 60% of GF
expenditures. Reserves at the end of FY
2026-27 are projected at $33m, which
equates to 47% of GF expenditures. Both
years exceed the City Council’s minimum
reserve policy of 20% and the Government
Finance Officers Association
recommendation of 17%.

General Fund Operating Budget
The General Fund the primary operating fund of the City and is used to account for most day-to-day activities. Revenue sources include, but are not limited to, property tax, sales tax, transient occupancy tax, current fees for services, and business registration. Total revenue for FY 2025-26 is $61,584,200 and for FY 2026-27 is $64,155,000. Total expenditures for FY 2025-26 are $66,938,825 and for FY 2026-27 are $69,779,345. The difference between revenues and expenditures are transfers and allocations in for overhead expenses from other funds.

Capital Improvement Program
$164M - 5 Year Investment
$8M $44M
Street
Improvements
$7.4M
Safe Routes
to School
$16.6M
Planning
$5.2M
Storm
Drainage
*
System
Housing
*Funding
requests will
be brought to
Council as
needed
$3.2M
Facilities
&
Techonology
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June 9, 2025
Honorable Mayor and City Councilmembers
City of San Carlos
600 Elm Street
San Carlos, CA 94070
Honorable Mayor and Members of the City Council:

On behalf of the entire San Carlos staff, I am pleased to present to you the City of San Carlos Biennial Budget for Fiscal Years 2025-26 and 2026-27, including the Operating Budget along with the Five-Year Capital Improvement Program (CIP) Budget. This budget coincides with a truly historic moment: the 100th anniversary of our City’s incorporation. As we celebrate a century of civic progress, community spirit, and responsible governance, this centennial budget reflects both a reverence for our past and an ambitious roadmap for our future. The recommended budget reflects your priorities, the adopted strategic plan, and is consistent with the critical needs identified by our residents over this past year.

HONORING OUR LEGACY
Since our incorporation in 1925, San Carlos has evolved from a small town nestled between San Francisco and San Jose into a vibrant, forward-thinking city known for its exceptional quality of life, engaged citizenry, and strong sense of community. What began as a modest settlement has become a model of balanced growth, civic pride, and sound governance. The City has long been a leader in innovation, high ethical and professional standards, environmental stewardship, and strategic thinking, collaborating with regional partners to enhance the lives of our residents.

Throughout this century of growth, we have consistently upheld our identity as “The City of Good Living.”
As we commemorate this centennial year, we are not only celebrating historical milestones, but also the people—past and present—whose contributions have shaped our community. This includes residents, business owners, volunteers, and City staff who together have built a culture of inclusion, accountability, and civic engagement. The proposed budget reflects this legacy by investing in projects and services that pay homage to our roots while positioning us for a vibrant and resilient future.

THE BUDGET PROCESS
The purpose of the budget process is to identify the fiscally sustainable services that the City may reasonably expect to provide within the context of the City’s available financial resources. San Carlos has never been a “tax rich” city, in that only about 10% of property taxes paid by its residents goes toward funding the City. In fact, 100% of the property tax revenue the City receives only pays for about 80% of the cost to provide police and fire/emergency medical services alone.

San Carlos also does not have any special revenue taxes, such as a local ¼ or ½ cent sales tax 11 10.c
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or a utility user tax. This presents many challenges to providing high quality services and improving infrastructure and facilities.

Those of us in City Hall are especially proud of how we manage our limited financial resources each year as we work to find new ways to do more than many cities, with less. Being efficient and effective with our very limited tax revenue is a topic planned for and discussed by staff and the Council on a regular basis and features prominently in every decision made by our community representatives. Each year, San Carlos receives multiple awards and is recognized for innovative programs and projects and outstanding financial management and long-range planning.

The Biennial Budget for Fiscal Years (FYs) 2025-27, including Operating and Capital Budgets, is the result of an inclusive and interactive staff budget development process, input received from the FY 2024-25 projections, the strategic planning process, the City Council Budget Study Session held on April 29, 2025, as well as Council direction given throughout the year. In particular, the proposed Five-Year CIP Budget includes funding in the amount of $164 million to fund strategic goals and to invest in our aging infrastructure.

PROGRAM AND PERFORMANCE BUDGETS
Over a decade ago, we began the process of transitioning from annual departmental budgeting to a full program and performance-based biennial budget. Program and performance-based budgeting focuses decisions around results and services versus organizational units; emphasizes performance over line items; shows the cost (budget) of services and the level of service available for the cost; provides a structure to consider programs as they contribute to City goals and outcomes; and serves as an investment perspective with dialog about the right service for the right price.

The City uses several different tools to accumulate performance data, including employee surveys, resident satisfaction surveys, and internal performance measurement activities. This year, staff did a thorough review of these measures and updated the format to bring more value to the reader. Performance measures are now defined with an explanation showing what it tracks; a purpose section discussing why it is important; and a status section reflecting progress.

Workload measures are tracked separately.

ECONOMIC UPDATE
In April 2025, the International Monetary Fund issued its World Economic Outlook. In that report, they modified their projections and expect the global growth to decline from 3.3% to 2.8% and the United States growth to decline from 2.8% to 1.8%. Forecasts for global growth have been revised markedly down compared with the January 2025 update, reflecting effective tariff rates at levels not seen in a century and a highly unpredictable environment. Intensifying downside risks dominate the outlook amid escalating trade tensions and financial market adjustments. Divergent and swiftly changing policy positions or deteriorating sentiment could lead to even tighter global financial conditions.

The tariffs announced in April 2025 have created uncertainty among businesses and investors, leading to a multi-trillion stock market sell-off. These tariffs, which target approximately 60 countries, have led to retaliatory measures, including China's suspension of critical exports to the U.S., potentially impacting consumer prices and economic growth. Prominent financial leaders, including Goldman Sachs CEO David Solomon and Bridgewater's Ray Dalio, have expressed concerns that these trade policies could increase the likelihood of a U.S. recession.

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A report from CalMatters in April 2025 stated that the stock market sell-off that followed the latest tariff announcement underscored the “unprecedented” risk that California pension funds see in a potential trade war. As of April 8, 2025, CalPERS lost about $15 billion, the first two days after President Trump’s announcement. These losses directly impact the funding of our pensions as 55 cents of every dollar in the pension funds come from investment earnings.

As of late April, CalPERS' investment return for FY 2024-25 still appears to be in positive territory, but below their expected rate of return of 6.8%. CalPERS' CEO, Marcie Frost is warning member agencies to prepare for potential adverse investment return experiences for the current and upcoming fiscal year. In an update to stakeholders, Ms. Frost warns “We must prepare for the possibility that current events here in the U.S. could have a serious impact on our investment returns as of June 30 and into the fiscal year that begins after that.” In April 2025, it was reported that the real gross domestic project (GDP) decreased at an annual rate of 0.3% in the first quarter of 2025, according to the “advance” estimate released by the US Bureau of Economic Analysis. In the fourth quarter of 2024, real GDP increased by 2.4%.

Compared to the fourth quarter, the downturn in real GDP in the first quarter reflected an upturn in imports, a deceleration in consumer spending, and a downturn in government spending that were partly offset by upturns in investment and exports.

The price index for gross domestic purchases increased 3.4% in the first quarter, compared with an increase of 2.2% in the fourth quarter. The personal consumption expenditures (PCE) price index increased 3.6%, compared with an increase of 2.4%. Excluding food and energy prices, the PCE price index increased 3.5%, compared with an increase of 2.6%.

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On a more regional level, in California taxable sales have declined 2% per year over the last couple of quarters before the tariffs were announced. While median income is rising, it isn’t rising at the same level of the rest of the nation. Housing demand remains strong, but supply is low which is also continuing to drive prices up. Tariff threats and policies that sent the stock market plunging is particularly bad for California. The state’s revenue relies on personal income taxes, which depend in part on capital gains generated through the stock market.

According to our third party consultant, HdL Companies, we have had eight consecutive quarters of declining sales tax. Our largest sales tax producer is building materials. The building and construction sector is heavily impacted by tariffs, economic policy, and interest rates. In addition, concerns about changes in Washington, potentially impacting federal funding and reimbursements for a variety of projects including infrastructure and low-income housing, may decrease development. Tariffs on steel and lumber would add significant costs to home prices.

Overall sales tax is difficult to predict at this time due to unknowns with how consumers will respond to discretionary spending.

LONG TERM FINANCIAL PLANNING
Even as the City, state, and nation experienced the Great Recession of 2009 and the COVID-19 crisis of 2020, the City has been able to maintain positive fund balances due to cost cutting measures, conservative budgeting, and fiscal controls. This could not have been done without a tremendous partnership between executive management staff and the City Council. Maximizing our revenues while keeping annual operating costs under control has given us the ability to weather financial storms.

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From 2009 to 2024, the City’s operating revenue has grown on average 6.4% per year. At the same time, the City’s operating expenses have grown, on average, by 4.5% per year. This has generated an annual average operating surplus (before any one-time expenses) of $4.1 million per year. This allows us the opportunity to use these savings to invest in our capital spending as well as pay down long-term pension obligations.

Our largest revenue source comes from property tax. As shown in the table below, the tax assessment rolls have grown 120%, or $9.5 billion, over the last ten years. This creates a stable revenue stream as values are locked in under Proposition 13 and grow at a rate of up to 2% per year.
$-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000

GENERAL FUND REVENUES AND EXPENDITURES
Revenues Expenditures
0 2,000,000,000
4,000,000,000
6,000,000,000
8,000,000,000
10,000,000,000
12,000,000,000
14,000,000,000
16,000,000,000
18,000,000,000
20,000,000,000

TAXABLE ASSESSED VALUATION
Secured Unsecured Total Valuation
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In addition to the growth in the property tax assessed values, the City has used $19 million of prior years’ savings/surpluses to pay down our unfunded pension liabilities. This has resulted in annual and long-term savings. The City Council has previously approved one-time payments in the amount of $5 million in FY 2017-18, $7 million in FY 2019-20, $3 million in FY 2023-24, and most recently, $4 million in FY 2024-25. Had the City not made these payments, the trajectory of pension costs would have continued to rise as it has for neighboring agencies. The chart reflected below shows our net pension liability compared with that of other agencies in the County as of the end of FY 2023-24.
*Net pension liability for San Carlos does not include recent payment of $4 million in April 2025 since this comparison was based on FY 2023-24 audited reports.

IMPACT OF STATE BUDGET, LEGISLATION & REGULATIONS
State Budget Overview and Highlights
When Governor Gavin Newsom unveiled a $322.3 billion budget proposal in January 2025, analysts urged caution. The proposal was a noticeable increase from last year’s $297 billion budget, which had to close a $47 billion deficit. However, California’s tax structure relies on the top 1% of earners. Dramatic swings in the stock market leave California’s revenues vulnerable, turning once-balanced budgets into looming deficits.

That caution was warranted. In May 2025, the Governor unveiled a $321.9 billion updated budget proposal that included a $12 billion budget shortfall, despite state revenues coming in above estimates through April. He attributed much of the blame to the Trump Administration, noting that instability and tariffs have negatively impacted California’s future revenues.

However, Governor Newsom also noted that the state’s expenditures have grown, partially due to the state’s Medi-Cal expansion to all income-eligible Californians, regardless of immigration status. The May Revision does not consider any impacts from federal cuts that are under consideration by Congress.
$- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 San Carlos*
Belmont
Burlingame
Foster City
Menlo Park
Redwood City

NET PENSION LIABILITY PER CAPITA COMPARISONS
AS OF JUNE 30, 2024
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The Governor proposed bridging this deficit through $5 billion in reductions (primarily to the MediCal program), $5.3 billion in revenue/borrowing, and $1.7 billion in fund shifts. The May Revision maintains the previous levels of withdrawals from the state’s reserves, and total reserve balances of approximately $15.7 billion.

Specific areas of the budget are noted below:

Environmental Quality
The Governor's May revision includes a mix of funding and policy news for cities regarding climate priorities. The May revision builds on the January budget and includes clawbacks or the recovery of previously dispersed funds, for offshore wind energy infrastructure, along a proposal to extend the Cap-and-Trade program.

In his January budget proposal, Newsom floated using $273 million of Prop. 4 funding to balance the budget. In the May revision, the Governor doubled down and suggested moving an additional $42.8 million for offshore wind energy infrastructure from the General Fund to Prop. 4. The remaining challenge is hundreds of millions of dollars less for climate resilience programs.

Leading up to the May revision in April, the Governor, Senate Pro Tem, and Assembly Speaker announced their intent to extend the Cap-and-Trade program beyond 2030. He also recommended renaming the program to the Cap-and-Invest program to better characterize the need for deeper investments in carbon reduction and clean technologies. Tied to the program’s reauthorization is the continuation of the California Climate Credit, which could result in approximately $60 billion for utility bill credits to Californians. The Cap-and-Trade Program has funded nearly $33 billion in investments through the Greenhouse Gas Reduction Fund, which is roughly equal to taking 1.3 million gas-powered cars off the road.

Consistent with Governor Newsom’s investments in the environment, climate change mitigation, adaptation, and resilience is one of the City’s six goals in its 2025 Strategic Plan. The City’s Climate Mitigation and Adaptation Plan aims to reduce greenhouse gas emissions by 40% by 2030 and 80% by 2050, with building and transportation electrification playing a key role. To support this, the budget allocates $658,000 over the next two years to expand publicly accessible EV charging stations in downtown public parking lots.

Housing
Last year, the Governor announced $1.7 billion in cuts to key housing programs that cities rely on to increase affordable housing in their communities. Despite the continued focus on California’s housing crisis, the Governor reduced the amount of affordable housing programs available to cities by cutting $31.7 million from the Infill Infrastructure Grant Program in his budget proposal.

The May revision states that the Governor will focus on holding local permitting agencies accountable to the existing statutory process, shortening permitting timelines, and targeting existing streamlining tools and financing strategies that reduce vehicle miles traveled through affordable, transit-oriented housing.

San Carlos remains committed to encouraging and supporting the creation of safe, inclusive, diverse, and affordable housing. The City continues to facilitate housing development at all income levels by increasing Below Market Rate (BMR) housing units, supporting the completion of ongoing projects, and expanding housing production. Construction has begun on the Cherry CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 17

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Street Commons affordable housing project, and new objective Design Standards for multi-family residential projects are set for adoption by the City Council this year. Additionally, the City is working to expedite ADU approvals and implement the 2023-2031 Housing Element, reporting on its progress every April as required by the State.

Transportation and Public Works
The Governor proposed a total of $19.8 billion in expenditures for the state transportation agency, a 2.9% spending reduction that will result in eliminating over 500 positions at the department.

Newsom hopes to extend the Cap-and-Trade program to fund major climate projects such as high-speed rail and provide a utility credit for ratepayers to offset higher rates through 2045.

The budget proposes a total of $1.1 billion for transit, including $100 million for the 2025-2026 Active Transportation Program (ATP). This is the second consecutive year the Governor has removed $400 million from ATP, which funds biking and walking infrastructure. $6.6 million has been allocated through 2028 to support compliance and enforcement of safety standards for large-scale, electric grid-connected battery energy storage systems. Lastly, $1.9 million has been allocated through 2028-29 to fund the California Energy Commission’s “Opt-in” clean energy permitting program.

San Carlos is also prioritizing infrastructure improvements under its strategic goal of Mobility, Traffic, and Transportation Infrastructure. In the coming year, the City will collaborate with regional agencies to develop short-, mid-, and long-term bicycle and pedestrian safety improvements at the U.S. 101/Holly Street interchange. Additionally, it will implement the Bicycle and Pedestrian Master Plan by enhancing safety at key intersections and move forward with the Traffic Signal Master Plan to improve traffic flow and parking.

Emergency Preparedness
The May revision proposes significant new funding for fire prevention and fire control for CAL FIRE to address the recent wildfires and the need for more resources, but no new funding to implement Proposition 36.

The State will shift $1.54 billion from the General Fund to the Greenhouse Gas Reduction Fund to support CAL FIRE's fire prevention, fire control, and resource management activities on an ongoing basis. The proposal also includes a General Fund backstop to protect CAL FIRE’s operations if the Cap-and-Trade auction proceeds fall below projected revenues.

San Carlos is also investing in disaster readiness. The City will host an annual creek cleaning event to reduce flooding risks during storms, encourage community participation in the Community Emergency Response Team (CERT) program, and offer a fire preparedness webinar for public education. Additionally, San Carlos will mail an Emergency Preparedness Spotlight to residents and conduct an internal emergency preparedness training for staff.

Vehicle In-Lieu
In FY 2004-05, Senate Bill 1096 was enacted, which directed 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 cities would be “backfilled” this revenue by the County as “property tax in-lieu” payment, rather than paid directly by the State. As a result, CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 18

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San Mateo County has experienced a countywide shortfall in prior years. The projected shortfall for San Carlos is approximately $2 million per year. The County continues to work with the State on recovery. However, continued underfunding tax revenue from the State continues to create uncertainty in budgeting and planning and poses a long-term threat to the City. Therefore, we do not budget for any recovery.

RECOMMENDED CHANGES TO THE FISCAL YEARS 2025-27 OPERATING BUDGET General Fund
There are some new programs and/or funding requests that have been incorporated into the recommended budget.

A summary of these recommendations is shown below.

General Fund Program Enhancement FY 2025-26 FY 2026-27
Core
Values
Strategic
Objectives
City Council
Continue Grant Funding for Community
Foundation $ 40,000 $ 40,000 ✓
Three Year Funding Commitment to
OneShoreline 40,000 40,000 ✓
Public Safety
Six Additional License Plate Readers (ALPR) 22,000 19,000 ✓ ALPR paid by Trust Fund (no cost to GF) (22,000) (19,000) ✓ Parks and Recreation
Add Recreation Supervisor 170,000 178,600 ✓
Public Works
Reclass PW Inspector to Asst. City Engineer 14,800 15,100 ✓ Total Operating Adjustments 264,800$ 273,700$
Funding Amount Strategic Focus Area
Staff-recommended operating additions to the base budget total $264,800 in FY 2025-26 and $273,700 in FY 2026-27.

FISCAL YEAR 2024-25 FINANCIAL PERFORMANCE
Before we propose the recommendations for the FY 2025-27 budget, it is helpful to review the projections for the current year. The City’s financial performance in FY 2024-25 is projected to be better than budgeted. The table below compares the Revised Budget and Projected Revenues and Expenditures for the General Fund which is the City’s primary operating fund.

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FY 2025
REVISED*
FY 2025
PROJECTED Variance Variance %
Operating Revenue
Business Registration $ 1,316,600 $ 1,370,800 $ 54,200 4.1% Charges for Current Services 5,167,550 6,575,600 1,408,050 27.2% Fines & Forfeitures 328,700 164,300 (164,400) -50.0%
From Other Agencies 11,600 88,200 76,600 660.3%
Licenses & Permits 2,667,500 3,278,700 611,200 22.9%
Other Revenues 834,400 995,250 160,850 19.3%
Other Tax (Franchise Taxes) 2,121,400 2,274,000 152,600 7.2% Property Tax 19,464,800 19,570,400 105,600 0.5%
Sales Tax 13,330,670 11,662,600 (1,668,070) -12.5%
Transient Occupancy Tax 4,468,000 4,000,000 (468,000) -10.5% Other Uses of Money & Property 3,234,700 3,654,600 419,900 13.0% PAMF Target Revenue 890,170 890,170 - 0.0%
Vehicle in Lieu 3,407,000 4,536,900 1,129,900 33.2%
Total Revenues $ 57,243,090 $ 59,061,520 $ 1,818,430 3.2% General Fund Expenses:

Salaries and Benefits 24,966,555 23,565,925 (1,400,630) -5.6% Operating Expense 36,952,285 36,258,345 (693,940) -1.9% Capital Outlay 188,700 108,700 (80,000) -42.4%
Total Operating Expenses $ 62,107,540 $ 59,932,970 $ (2,174,570) -3.5% Net Allocations and Transfers In 5,338,500 5,338,500
Net Allocations and Transfers Out (1,067,400) (1,067,400) Net Change in Operating Funds $ (593,350) $ 3,399,650

GENERAL FUND
*Revised Budget includes adjustments to revenues and appropriations made by the City Council during the fiscal year.

FY 2024-25 revenues are projected to be higher by approximately $1.82 million. Most of this variance is related to one-time revenues and reimbursements. Below are some of the larger variance explanations:

Charges for Services. The revenue projection of $6.58 million is $1.41 million over budget. This is due to the increase in plan check fees over what was initially budgeted.

The timing of plan check fees can vary depending on the timing of the projects and are therefore budgeted conservatively. In addition, there have been increases in recreation class and summer camp registrations compared to what was initially expected.

Fines and Forfeitures. The revenue projection of $0.16 million is $0.16 million under budget. This revenue has been budgeted higher than what has been received for a few years. The budget will be reset to average collections in the coming fiscal year.

From Other Agencies. The revenue projection of $0.089 million is $0.08 million over budget. This includes one-time funding and grants that are received throughout the year.

Since these grants are not guaranteed, they are not budgeted and are reflected when received.

Licenses and Permits. The revenue projection of $3.28 million is $0.61 million over budget. Similar to plan check revenues, this line item can vary depending on the timing of development.

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Other Revenue. The revenue projection of $1.0 million is $0.16 million over budget. This line item includes a reimbursement from the Federal Emergency Management Agency (FEMA) in the amount of $0.13 million related to the flooding that occurred in the 2022-23 winter storms.

Property Tax. The revenue projection of $19.57 million represents an increase of $0.11 million versus budget. This revenue is estimated based on information from the County of San Mateo and our third-party consultants. The primary reason for this increase is increases in the property tax assessment rolls to account for changes in property ownership and tenant improvements.

Sales Tax. The revenue projection of $11.66 million represents a decrease of $1.67 million versus budget. This revenue is based on information from the City’s third-party consultants. For several quarters, there has been a decline in building and construction group activity and building materials sales are driving the reduction. General retail has dropped as consumers are more conservative with their spending given the uncertainty of the economy.

Transient Occupancy Tax. The revenue projection of $4.0 million represents a decrease of $0.47 million versus budget. Although the hotel industry began to rally in FY 2021-22 following the COVID-19 pandemic, the industry has not yet returned to historical occupancy as business travel has not yet fully returned to pre-pandemic rates.

Other Uses of Money and Property. This includes rentals and investment income. The revenue projection of $3.65 million represents an increase of $0.42 million versus budget.

Included in the projection is the receipt of rental from a fourth billboard on the U.S. Highway 101 corridor that was not previously budgeted.

Vehicle In-Lieu. The revenue projection of $4.54 million represents an increase of $1.13 million versus the revised budget. This estimate is based on information from the County Controller’s Office. The revenue received in this fiscal year includes a one-time payment of $1.36 million repayment of the countywide shortfall from two years ago (FY 2022-23).

In FY 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 cities would be “backfilled” for this reallocated revenue by the County as a “property tax in-lieu” payment rather than paid directly by the state. If the “backfilled” amount exceeds a certain limit, there will not be enough money to fully cover the amount owed.

Expenditures are projected to be $2.17 million less than the revised budget primarily due to salary savings from vacant positions during the year and projected savings in the Sheriff’s Office contract.

PROPOSED FISCAL YEARS 2025-27 BUDGET
The FYs 2025-27 budget includes 16 different funds. Rather than listing the status of each of these funds in this report, the budget summary is grouped into five categories: General Fund; Wastewater (Sewer); Other Revenue Funds; Other Operating; and Capital Project Funds. The following table identifies the total proposed expenditures by category, in which the citywide appropriations for FY 2025-26 total $129.1 million and for FY 2026-27 total $122.3 million.

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CITYWIDE BUDGET – ALL FUNDS
Expenditures
2024-25
Revised
2024-25
Projected
2025-26
Proposed
2026-27
Proposed
General Fund $ 62,107,540 $ 59,932,970 $ 66,938,825 $ 69,779,345 Wastewater (Sewer) Fund 25,091,651 24,756,851 29,002,800 26,122,800 Other Revenue Funds 3 ,570,959 3,690,339 306,900 3 16,000 Total Operating Funds $ 90,770,150 $ 88,380,160 $ 96,248,525 $ 96,218,145 Other Program Funds 5 ,080,500 4,941,509 3,984,900 4,266,100 Capital Improvement Funds 74,664,757 61,636,097 28,827,353 21,801,794 Total Citywide Budget $ 170,515,407 $ 154,957,765 $ 129,060,778 $ 122,286,039

GENERAL FUND BUDGET
The General Fund is the primary operating fund of the City and is used to account for most day-today activities. Revenue sources include, but are not limited to, property tax, sales tax, transient occupancy tax, current fees for services, and business registration.

The tables to follow compare the current fiscal year budget and projections to the FY 2025-26 and FY 2026-27 proposed budgets. The assumptions and recommendations are included in each of the sections following the table.

Recommended Budget Revenue
2024-25
Revised
2024-25
Projected
2025-26
Proposed
2026-27
Proposed
Business Registration $ 1,316,600 $ 1,370,800 $ 1,368,700 $ 1,422,800 Charges For Current Services 5,167,550 6,575,600 6,618,400 6,816,800 Fines & Forfeitures 328,700 164,300 168,600 173,600
From Other Agencies 11,600 88,200 12,000 12,400
Licenses & Permits 2,667,500 3,278,700 3,213,500 3,309,900 Other Revenue 834,400 995,250 749,000 772,200
Other Taxes 2,121,400 2,274,000 2,276,400 2,344,700
Property Taxes 19,464,800 19,570,400 20,970,400 22,151,800 Sales Tax 13,330,670 11,662,600 12,519,200 12,925,800
Transient Occupancy Tax 4,468,000 4,000,000 4,350,000 4,619,500 Use Of Money & Property 3,234,700 3,654,600 4,814,200 4,842,200 PAMF Project 890,170 890,170 912,400 935,200
Vehicle In Lieu 3,407,000 4,536,900 3,611,400 3,828,100 Total Revenue $ 57,243,090 $ 59,061,520 $ 61,584,200 $ 64,155,000

GENERAL FUND REVENUES
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Fiscal Year 2025-26 Revenue Assumptions
Total General Fund revenue is budgeted at $61.58 million, an increase of 7.6% from the FY 2024- 25 revised budget. The majority of the increases are described below. • Business Registration. The revenue amount is budgeted to increase by 4%, or $0.05 million, from the FY 2024-25 revised budget, which is in line with the increase specified in the City’s Municipal Code.
• Charges for Current Services. The increase of $1.45 million, or 28.1%, is primarily due to the timing of plan check services related to development and the expansion of Parks and Recreation programming and special event revenues. While this is a large increase from the revised budget, the proposed revenues are only 0.7% higher than the projected FY 2024-25 revenues. The FY 2025-26 budget assumes development fee revenue based on an average of actual revenue received over the past four years. These fees are typically pass through revenues and have a corresponding expense for professional consulting and technical experience necessary to facilitate these projects. Due to the uncertainty at the federal level related to drug approvals and funding, it is possible that we could see a slowdown in the biotechnology development that has been planned for the east side of the city.
• Fines and Forfeitures. Budgeted at $0.17 million, or 48.7% less than the FY 2024-25 revised budget. While this is a large decrease from the current budget, it is a 2.6% increase over the FY 2024-25 projections. This revenue had been budgeted higher than what has been received for a few years. The proposed budget resets the revenue to average collections received.
• From Other Agencies. Budgeted at $0.01 million, which is approximately the same level as the FY 2024-25 revised budget. This revenue is from grant reimbursements which can fluctuate from year to year depending on availability.
• Licenses and Permits. The increase of $0.55 million, or 20.5%, is primarily based on the projected timing of development project permits for building, electrical, plumbing, and mechanical permits in the past year. While this is a large increase from the current budget, it is a 2% decrease from the FY 2024-25 projections. The timing of when developers pull their permits can vary and as such, this category can fluctuate greatly from year to year.

The license and permit revenue for large projects typically lags several months or even years from the timing of plan check, as it takes longer to review these projects. The revenue has been projected based on the average collections over the last four years. • Other Revenues. These mainly include cost reimbursements from agencies such as the City and County Association of Governments for financial services and the school district for school sports field maintenance. It also includes donations, sponsorships, and other miscellaneous receipts. Revenue is budgeted to decrease by $0.09 million, or 10.2%, primarily due to the elimination of sponsorships for the Farmers Market, since we outsourced that program, and other miscellaneous cost recovery reductions. • Other Tax (franchise tax). The revenue is budgeted to increase by $0.16 million, or 7.3%, from the FY 2024-25 revised budget. Although this is a large increase over the FY 2024- CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 23

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25 revised budget, it is only an increase of 0.1% over the projected revenues and is in line with projected inflationary increases.
• Property Tax. The 7.7% increase in the budget to $20.97 million is based on the general assessment rolls and information provided by the City’s third-party consultants. The primary reason for the increase is due to increases in the property tax assessment rolls to account for changes in property ownership and tenant improvements. The assessment rolls increased $1.11 billion, or 7.2%, over the prior fiscal year. • Sales Tax. The decrease of $0.81 million, or 6.1%, is based on information from thirdparty consultants. Uncertainties with the economy, tariffs and interest rates are expected to reduce discretionary spending among consumers. The building and construction sector is typically San Carlos’ largest sales tax producer. Tariffs on lumber, steel, and aluminum combined with impacts to the workforce are expected to reduce the City’s revenue. The proposed budget projects revenues back to 2022 and 2023 levels. • Transient Occupancy Tax. The decrease of $0.12 million, or 2.6%, is based on information from third-party consultants. Although the hotel industry began to rally in FY 2021-22 following the COVID-19 pandemic, the industry has not yet returned to historical occupancy as business travel has not yet fully returned to pre-pandemic rates. • Other Uses of Money and Property. This includes digital billboards, rental properties, and investment income. The increase of $1.6 million is due to the inclusion of the fourth digital billboard and the timing of cash disbursements and the allocations of the total investment portfolio amongst all the funds. At the end of each quarter, investment income is allocated based on the percentage of cash in each fund. The amount of allocation can change from year to year based on the total cash balance held in each fund. • PAMF Target Revenue. The increase of $0.02 million is based on the terms of the Development Agreement.
• Vehicle in-Lieu. The revenue increase of $0.20 million, or 6.0%, is based on information from the San Mateo County Controller’s Office. In FY 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 cities would be “backfilled” for this revenue by the county as a “property tax in lieu” payment rather than being paid directly by the state. San Mateo County has informed us that if the “backfilled” amount exceeds a certain limit, there will not be enough money to fully cover the amount owed. As a result, San Mateo County has experienced a countywide shortfall in prior years. The projected shortfall for San Carlos is approximately $2 million per year. The FY 2024-25 projection includes a one-time repayment of this revenue in the amount of $1.37 million from FY 2022-23.

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Fiscal Year 2026-27 Revenue Assumptions
Total General Fund revenue is budgeted at $64.16 million, an increase of 4.2% from the FY 2025- 26 proposed budget.
• Business Registration. The revenue is budgeted to increase in year two of the budget by 4.0%, or $0.05 million, from the FY 2025-26 proposed budget. The increase is based on the annual percentage increase specified in the City’s Municipal Code. • Charges for Current Services. Revenues are projected to increase by $0.20 million, or

3.0%, due to the continued demand for recreation services and the timing of large development plan check activities. As noted above, the timing of large-scale development projects can cause this category to fluctuate from year to year. There may be more projects on the horizon that would increase this revenue stream, which will be adjusted during the mid-cycle budget review.
• Fines and Forfeitures. The revenue is proposed at $0.17 million, which is approximately the same level as the proposed FY 2025-26 budget.
• From Other Agencies. Revenues are projected to be at the same levels as the proposed FY 2025-26 budget.
• Licenses & Permits. Revenue is projected to increase by $0.1 million, or 3.0%. Similar to the current charges for services, this revenue stream can be largely impacted by the timing of large-scale development projects.
• Other Revenue. Revenue is projected to increase by $0.02 million, or 3.1%, mostly due to estimates in cost recovery assumptions based on the consumer price index. • Other Tax (franchise tax). The revenue is primarily based on trend data from the past fiscal years.
• Property Tax. The revenue is projected to increase $1.18 million, or 5.6%, from the FY 2025-26 projected budget. This continues to assume the growth in the assessment rolls associated with the large-scale development projects on the east side of the city. Staff continues to work closely with consultants to project and monitor this revenue. • Sales Tax. The revenue is projected to increase by $0.41 million, or 3.3%, as a result of assumed inflationary increases. This revenue is reviewed quarterly with third-party consultants and is adjusted based on current and projected activity. • Transient Occupancy Tax. The revenue is expected to grow by $0.27 million, or 6.2%, and assumes a rise in occupancy rates associated with business and residential travel. • Other Uses of Money and Property. The revenue increase of $0.03 million, or 0.6%, assumes the same interest income fund balance allocation as the prior year. • The PAMF Target Revenue. The budget is based on the terms of the Development Agreement.

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• Vehicle in-Lieu. Revenue is budgeted to increase by $0.22 million, or 6.0%, based on information received from the County Controller’s Office. While noted as an increase from the prior year budget, it is still $2 million short of what should be received.

Recommended Budget Expenditure Assumptions
Operating Budget Expenditures
2024-25
Revised
2024-25
Projected
2025-26
Proposed
2026-27
Proposed
Salaries & Benefits $ 21,169,055 $ 19,759,925 $ 23,365,625 $ 24,259,625 Legacy Obligations 3,797,500 3,806,000 4,223,800 4,886,600 Operating Expenditures 36,952,285 36,258,345 39,155,000 40,432,820 Capital Outlay 188,700 108,700 194,400 200,300
Total Operating Expenditures $ 62,107,540 $ 59,932,970 $ 66,938,825 $ 69,779,345

GENERAL FUND EXPENDITURES
Fiscal Year 2025-26 Expenditure Assumptions
The total General Fund expenditure amount is budgeted at $66.94 million, an increase of 7.8% from the FY 2024-25 revised budget expenditures of $62.11 million. As discussed above, the increase in expense includes the requested program and position changes. • Salaries and Benefits. Projections have been funded at 100% based on all current Memorandum of Understanding (MOU) provisions with each of the City’s labor groups and units.
o CalPERS pension retirement rates. On March 10, 2025, the City Council approved a Resolution authorizing the transfer of $4 million from the Unfunded Liability Reserve to pay down the CalPERS Unfunded Accrued Liability. The reserve was established several years ago to help offset the costs of pension and pension liabilities. The reserve was created from prior years’ surpluses which are typically generated from salary and benefit savings from vacant positions. The paydown in the amount of $4 million is anticipated to generate projected operating savings of approximately $400,000 per year, which has been factored into this proposed budget.
o CalPERS medical rates. The budget assumes the rates will continue to increase by approximately 10% per year.
o Other Post-Employment Benefits (OPEB). These have been funded at approximately $977,000 based on information received from the actuarial study completed in 2024. The budget represents funding for our retiree medical trust at 100% of the annual required contributions.
• Legacy Obligations. These obligations represent CalPERS unfunded obligations associated with the former Belmont-San Carlos Fire Joint Powers Authority (JPA) and the former San Carlos police department. The budget associated with the former JPA represents our 52.9% share of the annual unfunded liability, or approximately $2.3 million.

The annual unfunded obligation associated with the former police department is approximately $1.9 million. As in prior years, the payment related to the former police CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 26

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department will be credited back to the City by the San Mateo County Sheriff’s Office under the current law enforcement services contract.
• Operating Expenditures. These increased by 6.0%, with overall professional services increasing for known contract arrangements and anticipated needs. In addition to professional services, operating expenditures include utilities, office and field program supplies, equipment leases, maintenance, and training.
• Capital Outlay. This has increased by 3.0% for assumed capital outlay needs and an inflationary factor.

Fiscal Year 2026-27 Expenditure Assumptions
The total General Fund expenditure is budgeted at $69.78 million for ongoing expenditures, an increase of 4.2% from the FY 2025-26 proposed budget.
• Salaries and Benefits. Expenditures for the FY 2026-27 are proposed to be 3.8% higher than the proposed FY 2025-26 budget, taking into account projected increases in CalPERS retirement rates, medical rates, and OPEB contributions. • Legacy Obligations. These proposed expenses are budgeted to increase by $0.66 million, or 15.7%, over the FY 2025-26 proposed budget based on the remaining legacy obligations with CalPERS.
• Operating Expenditures. Operating expenditures increase by 3.3%, with overall professional services increasing for known contract arrangements and anticipated needs.

In addition to professional services, the operating expenditures include utilities, office and field program supplies, equipment leases, maintenance, and training. • Capital Outlay. Capital outlay expenditures have been increased by a 3% inflationary factor.

General Fund Recommended Budget Summary
The table to follow summarizes the current fiscal year revised budget and projections and the inclusion of all staff recommended additions for the FYs 2025-27 General Fund budget.

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GENERAL FUND BUDGET
2024-25
Revised
2024-25
Projected
2025-26
Proposed
2026-27
Proposed
Est Beginning Fund Balance
Unrestricted $ 2,729,714 $ 2,729,714 $ 2,003,841 $ 1,355,320 Restricted 56,255,323 56,255,323 51,530,846 38,700,841
Est Beginning Fund Balance $ 58,985,037 $ 58,985,037 $ 53,534,687 $ 40,056,161 Revenues $ 57,243,090 $ 59,061,520 $ 61,584,200 $ 64,155,000 Salaries & Benefits 24,966,555 23,565,925 27,589,425 29,146,225 Operating Expenses 36,952,285 36,258,345 39,155,000 40,432,820 Capital Outlay 188,700 108,700 194,400 200,300
Net Allocations/Transfers In (Out) 4,271,100 4,271,100 4,975,100 5,115,700 Total Change in Operating Funds (593,350) 3,399,650 (379,525) (508,645) Net Transfers to Capital Fund 25 (4,850,000) (4,850,000) (13,099,000) (7,000,000) Paydown of Unfunded balance (4,000,000) (4,000,000) - - Net Change in Fund Balance $ (9,443,350) $ (5,450,350) $ (13,478,525) $ (7,508,645) Est Ending Fund Balance
Unrestricted $ 4,029,006 $ 2,003,841 $ 1,355,320 $ 1,282,787 Restricted 45,512,681 51,530,846 38,700,841 31,264,730
Est Ending Fund Balance $ 49,541,687 $ 53,534,687 $ 40,056,161 $ 32,547,517 The fully funded staff and City Council recommended budget results in unrestricted fund balances for FY 2025-26 and FY 2026-27 at approximately $1.36 million and $1.28 million, respectively.

These balances are projections, and the savings achieved throughout the years will increase these balances accordingly.

As in prior years, included in the FY 2025-26 and FY 2026-27 budgets are recommendations to transfer capital reserves from the General Fund to the Capital Projects Fund (Fund 25). The recommended transfer amount for FY 2025-26 is $13.1 million and for FY 2026-27 is $7.0 million.

These transfers are necessary to fund improvements to City infrastructure, facilities, and other capital needs.

WASTEWATER (SEWER) FUND BUDGET
The Wastewater, or Sewer, Fund is used to account for sewage treatment, transmission, major replacements, and improvements to the City’s sewer system. Revenues received can only be used to fund sewer-related projects. The table below summarizes the current year’s revised budget and projections and the FYs 2025-27 proposed budgets for the Wastewater Fund (Fund 0006).

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WASTEWATER (SEWER) FUND BUDGET
2024-25
Revised
2024-25
Projected
2025-26
Proposed
2026-27
Proposed
Est Beginning Fund Balance $ 89,619,427 $ 89,619,427 $ 85,103,476 $ 79,568,776 Revenues $ 27,746,000 $ 24,469,000 $ 28,897,800 $ 28,743,100 Salaries & Benefits 2,614,200 2,279,400 2,827,200 2,934,500 Operating Expenses 4,793,200 4,793,200 6,206,300 6,071,900 Debt Service 6,401,600 6,401,600 4,692,000 4,690,000
Adjustment to SVCW Investment
Capital Project Expenditures 11,282,651 11,282,651 15,277,300 12,426,400 Net Allocations/Transfers In (Out) (4,228,100) (4,228,100) (5,429,700) (5,603,200) Net Change in Fund Balance $ (1,573,751) $ (4,515,951) $ (5,534,700) $ (2,982,900) Est Ending Fund Balance
Restricted $ 88,045,676 $ 85,103,476 $ 79,568,776 $ 76,585,876 Est Ending Fund Balance $ 88,045,676 $ 85,103,476 $ 79,568,776 $ 76,585,876 Below are the highlights of the assumptions used in developing the FYs 2025-27 Proposed Wastewater budget.
• Revenues. Budgeted at $28.9 million, this represents an increase of $1.2 million, or 4.2%, over the revised FY 2024-25 budget and includes the sewer rate increases of 3% as previously approved by the City Council and sewer impact fees anticipated from largescale development projects. Revenues are used to fund the capital improvements outlined in the City’s Sewer Master Plan. Revenues are also used to fund the debt service associated with Silicon Valley Clean Water’s (SVCW) improvements to wastewater treatment infrastructure. The proposed amount for FY 2026-27 is projected to decrease by 0.5% compared to the FY 2025-26 proposed budget primarily due to the one-time connection fees in FY 2025-26.
• Salaries and Benefits. Budgeted amounts are based on all known MOU provisions and the additional funding for the post-employment benefits, similar to the General Fund. • Silicon Valley Clean Water (SVCW). Plant operations are budgeted at $5.3 million, or 35% higher than the prior year. The budget is based on the Long Range Financial Plan provided by SVCW in January 2025 and the SVCW Adopted Budget that was approved by the SVCW Board in February 2025. FY 2025-26 expenditures include an additional $0.5 million to increase reserves for capital expenditures. The proposed budget for FY 2026-27 is projected to be $5.2 million, as it doesn’t include as large of a reserve payment. • Other Operating Expenditures. Budgeted at $0.9 million for FY 2025-26 and FY 2026- 27, this is relatively the same level as the FY 2024-25 revised budget. This expenditure category also includes utilities, field program supplies, office supplies, equipment maintenance, and training.
• Bond Payments. Budgeted at $4.7 million, or $1.7 million lower than the prior year, this category includes the debt service payments and the estimated State Revolving Fund (SRF) loans. The debt service payments are directly tied to the timing of the bond issuance and the payments on the SRF loans used for capital infrastructure at the sewer treatment facility. FY 2025-26 no longer includes the cash in lieu payment in the amount of $2.1 million that was required to be paid in FY 2024-25. The proposed amount for FY 2026-27 is flat compared with the proposed FY 2026-27 budget.

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• Capital Projects. These are budgeted at $15.3 million and $12.4 million for FY 2025-26 and FY 2026-27, respectively. Additional detail on the capital projects has been included in the Wastewater section of the budget book.

OTHER REVENUE FUNDS BUDGET
The Other Revenue Funds are used to account for revenue sources for which expenditures are restricted by law or administrative action to specific purposes. The Other Revenue Funds include National Pollutant Discharge Elimination System (NPDES) (Fund 0015), and the Police Grants (Fund 0017).

The table below summarizes the current year’s revised budget and projection and the FYs 2025- 27 proposed budget for the Other Revenue Funds. The Library Tenant (Fund 0095) will be closed at the end of FY 2024-25 following the early payoff of the General Obligation Bond for the construction of the library and is therefore not included in the table below.

OTHER REVENUE FUNDS BUDGET
2024-25
Revised
2024-25
Projected
2025-26
Proposed
2026-27
Proposed
Est Beginning Fund Balance $ 1,208,763 $ 1,208,763 $ 1,188,763 $ 950,563 Revenues $ 906,800 $ 935,900 $ 921,700 $ 935,600
Operating Expenses 298,100 298,100 306,900 316,000
Net Alloc/Transfers In (Out) (657,800) (657,800) (853,000) (875,800) Net Change in Fund Balance $ (49,100) $ (20,000) $ (238,200) $ (256,200) Est Ending Fund Balance $ 1,159,663 $ 1,188,763 $ 950,563 $ 694,363 Below are the highlights of the assumptions used in developing the proposed FYs 2025- 27 Other Revenue budgets.
• Revenues. These are budgeted to increase by $0.01 million, or 1.6%, in FY 2025-26 and then increase by $0.01 million, or 1.5%, in FY 2026-27. The main revenue source for the NPDES fund is the NPDES fees collected through the County of San Mateo. The revenue for the Police Grant fund is the Citizens’ Option for Public Safety (COPS) program. • Operating Expenditures. These include: utilities; field program supplies; annual permit renewal from the Bay Area Air District; equipment maintenance; and motorcycle law enforcement. The proposed expenditures for both FY 2025-26 and FY 2026-27 remain relatively flat.
• Net Allocations and Transfers. FY 2025-26 and FY 2026-27 reflect additional transfers from the Police Grant Fund to the General Fund to help pay for the Downtown Services Unit.

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OTHER PROGRAM FUNDS/INTERNAL SERVICE FUNDS
The Other Program Funds are used to account for special activities and services performed by a designated department for other departments on a cost reimbursement basis. The Other Program Funds include: Workers Compensation (Fund 0032); General Liability (Fund 0033) and PostEmployment Benefits (Fund 0035). The Library Tenant Debt Service Fund (Fund 0093) will be closed at the end of FY 2024-25 following the early payoff of the General Obligation Bond for the construction of the library and is therefore not included in the table below.

OTHER PROGRAM FUNDS
2024-25
Revised
2024-25
Projected
2025-26
Proposed
2026-27
Proposed
Est Beginning Fund Balance $ 1,553,950 $ 1,553,950 $ 1,312,542 $ 1,533,642 Revenues $ 1,219,200 $ 1,275,300 $ 1,198,300 $ 1,233,100 Operating Expenses 3,574,600 3,435,609 3,983,900 4,265,100 Capital Outlay Expenditures 1,000 1,000 1,000 1,000
Net Allocations In (Out) 1,919,900 1,919,900 3,007,700 3,114,000 Net Change in Fund Balance $ (436,500) $ (241,409) $ 221,100 $ 81,000 Est Ending Fund Balance $ 1,117,450 $ 1,312,542 $ 1,533,642 $ 1,614,642 Below are the highlights of the assumptions used in developing the FYs 2025-27 Other Program Funds proposed budgets.
• Revenues. These are budgeted to decrease by $0.02 million, or 1.7%, in FY 2025-26 to reflect the use of prior year fund balances to help offset the costs of insurance and other post-employment benefits. The proposed amount for FY 2026-27 is projected to increase by $0.03 million, or 2.9%, over FY 2025-26 to account for inflationary adjustments. • Insurance Expenses. These are budgeted to increase by $0.4 million, or 17.3%, in FY 2025-26. The City is a member of the Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA) for general liability and property insurance. The insurance renewal market is extremely challenging and it’s become more difficult to find coverage at reasonable rates since providers are leaving the market. Based on the actuarial studies, the City’s insurance rates are estimated to increase 10% for general liability and 20% for property. In addition, workers compensation insurance rates are estimated to increase significantly as we look toward a new provider. The City currently is a member of the Cities Group JPA for workers compensation and that JPA is anticipated to dissolve later this year. The budget includes an increase of $0.3 million to cover the increase in premiums expected from a new provider.
• Other Post Employment Obligations. The expenditure budgets for FY 2025-26 and 2026-27 include a contribution of approximately $1.1 million and $1.2 million, respectfully, for the post-employment benefits based on information received from the actuarial study completed in 2024. The budget represents funding for our retiree medical trust at 100% of the annual required contribution and approximately 100% of the longevity trust annual required contribution based on the previous study. The City’s pay-as-you-go amount totals approximately $0.9 million annually.

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CAPITAL PROJECT FUNDS BUDGETS
The Capital Project Funds include: Equipment Replacement (Fund 0010); Measure A (Fund 0014); Gas Tax (Fund 0016); Measure W (Fund 0018); General Capital (Fund 0025); Child Care Impact Fee (Fund 0026); Park In-Lieu (Fund 0027); Housing In-Lieu (Fund 0029); and Low and Moderate Income Housing (Fund 0031).

The capital project budget funds major one-time and on-going infrastructure improvement needs including: resurfacing and sidewalk projects; traffic safety improvements; park construction and improvements; storm drainage improvements; facility improvements; and enterprise technology projects. Funds are often accumulated in this budget over a period of years and are spent when a sufficient amount of revenue is available to pay for desired projects.

CAPITAL PROJECT FUNDS
2024-25
Revised
2024-25
Projected
2025-26
Proposed
2026-27
Proposed
Est Beginning Fund Balance $ 73,411,883 $ 73,411,883 $ 30,606,466 $ 52,993,013 Revenues $ 27,957,757 $ 13,458,157 $ 39,815,000 $ 20,324,900 Operating Expenses 1,349,900 1,362,440 1,424,270 1,422,694 Capital Project Expenditures 73,263,361 60,222,161 27,403,083 20,379,100 Net Allocations In (Out) 4,667,270 5,321,027 11,398,900 5,249,300 Net Change in Fund Balance $ (41,988,234) $ (42,805,417) $ 22,386,547 $ 3,772,406 Est Ending Fund Balance $ 31,423,649 $ 30,606,466 $ 52,993,013 $ 56,765,419 Capital Improvement Program Budget for FY 2025-26 through FY 2029-30 The City Council was presented with a Five-Year Capital Improvement Program Budget as part of the Budget Study Session held on April 29, 2025. As there are many approved projects, a detailed listing of the proposed changes in funding for these projects can be found in the Capital Improvement Program section of this budget document.

Capital Improvement Program – Unfunded List: As we have done in previous budgets, the fiveyear Capital Improvement Program contains a list of unfunded projects. This list shows projects that are desirable but are currently beyond the means of the City to fully fund and construct. These projects total approximately $364 million. A complete list of Unfunded Capital Projects may be found in the Capital Improvement Program staff report.

GENERAL FUND RESERVES
The Government Finance Officers Association (GFOA) has issued its best practice in determining the appropriate level of unrestricted fund balance in the General Fund to be at a minimum of no less than two months of regular general fund operating revenues or expenses, which equates to approximately 17%. The GFOA definition of Unrestricted Fund Balance includes three general categories: Committed Fund Balance; Assigned Fund Balance; and Unassigned Fund Balance.

When looking at the total reserve percentages, all categories need to be considered. In the Annual Comprehensive Financial Report, the categories that make up the unrestricted fund balance as defined by the GFOA are the following: Economic Uncertainty Reserve; Strategic Property Acquisition Reserve; Unfunded Liability Reserve; Facility and Infrastructure Reserve; and the Unassigned Fund balance. For our purposes, we will consider our reserves to be those defined CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 32

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as committed and assigned, as noted in the following chart. Even excluding the unassigned fund balance, the City maintains healthy reserves well above the GFOA best practice guidelines.

As a general practice, reserves should not be used to offset annual operating expenses as these are not a continuous sources of funding. However, as noted above, it is recommended that the unassigned fund balance be used for the next two years until there is more certainty with the economy.

Projected
FY 24-25
% of
FY 25
Exp
Proposed
FY 25-26
% of
FY 26
Approp
Proposed
FY 26-27
% of
FY 27
Approp
Committed Fund Balances:

Economic Uncertainty $ 10,188,605 17.0% 11,379,600 $ 17.0% 11,862,489 $ 17.0% Strategic Property Acquisition 12,191,795 12,191,795 12,191,795 Assigned Fund Balances:

Unfunded Liabilities 3,000,000 2,600,000 2,200,000
Facility/Infrastructure 23,990,500 10,891,500 3,891,500 Ending Reserve Balances $ 49,370,900 82.4% 37,062,895 $ 55.4% 30,145,784 $ 43.2% Unassigned Fund Balance 2,003,841 1,355,320 1,282,787
Nonspendable Fund Balances 2,159,946 1,637,946 1,118,946 Total Ending Fund Balance $ 53,534,687 $ 40,056,161 $ 32,547,517

RESERVE FUND BALANCES - GENERAL FUND
• Economic Uncertainties Reserve. The City established an Economic Uncertainties Reserve that is equivalent to at least 12.5% of the City’s General Fund expenditures, with a funding goal closer to 20% being highly desirable.
• Strategic Property Reserve. In October 2010, the City Council approved and authorized the establishment of a Strategic Property Acquisition Reserve. Appropriations from this reserve can only be made by formal action of the City Council. Generally, appropriations and access to these funds will be reserved for funding strategic property acquisitions by the City.
• Assigned Reserves for Specific Purpose. As per Governmental Accounting Standards Board (GASB) Pronouncement 54 for Fund Balances, assigned fund balances include amounts that are constrained by the government’s intent that they be used for specific purposes. As per the Council’s direction, the City Manager is authorized to assign amounts for a specific purpose. After the audit is complete, staff reviews the prior year savings and recommends transfers into these funds. The current assigned fund balance is for Unfunded Liabilities, and Facilities and Infrastructure Improvements.

The Facility and Infrastructure Reserve was created as a way to use savings generated from prior fiscal years to help pay for capital projects. Transfers from this reserve are made annually to the General Capital Improvement Fund to fund projects.

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BUDGET THREATS
Although the City has been able to successfully navigate the ups and downs of the economy and pandemic-related closures, many significant internal and external threats to the City’s long term fiscal sustainability still exist.

These threats include:
e Uncertainties resulting from policy changes at the federal level, including tariffs and federal funding cuts that may impact consumer spending and slow development activity; e Significant increases in street resurfacing needs and our ability to keep up with street repairs;
e Rising public safety costs;
e Uncertainties the with CalPERS retirement investment assumptions and changes to the CalPERS amortization and smoothing policies, which will drive the City’s CalPERS rates higher each year;
e Healthcare costs continue to grow at super-inflationary rates; e Increased costs related to stormwater; and
e Asnoted above, uncertainties with Vehicle In-Lieu funding from the County of San Mateo.

Financial sustainability remains a high priority for San Carlos. To that end, City staff will continue to seek ways to be as efficient as possible in providing services to the public. The City will continue to consider appropriate economic development and tax revenue generation projects that are viable for San Carlos.

ACKNOWLEDGEMENTS
We take this opportunity to thank San Carlos staff for their continued cooperation and participation in preparation of the FYs 2025-27 budget document. A special thank you is extended to Financial Services Manager Paul Harris, Senior Accountant Marco Lao, Senior Accountant Paula Decano, Senior Management Analyst Jenny Liu, and Administrative Assistant Madeleine Payumo, for their efforts in bringing this document forward.

As the City enters its next century, this budgethe lays groundwork for a community that is resilient, inclusive, and future-ready. It supports the City Council's strategic priorities while reflecting the input and aspirations of our residents. We remain committed to transparency, innovation, and collaboration as guiding principles in every financial decision.

Respectfully Submitted,
maf lam
Jeff Maltbie, Rebecca Mendenhall,
City Manager Administrative Services Director
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READER’S GUIDE TO THE BUDGET
Purpose
The budget is an instrument that sets policy, summarizes public service programs provided by the city government, and explains how the programs are funded. It is the biennial plan for coordinating revenues and expenditures. The budget presented covers the period of July 1, 2025 to June 30, 2027. The amounts shown for FY 2025-26 and FY 2026-27 are proposed and subject to adoption through an appropriation resolution by the City Council. Highlighted below are some of the larger sections of the budget document.

Budget Overview
This section provides the City Manager’s transmittal letter to the City Council, a budget-in-brief summary, a basis of the budget and accounting process, a budget calendar, statistical information, and a summary of the recent community survey. Within this section, are also the financial policies and information on the City’s strategic plan and objectives.

Financial Policies
This section provides the reader with the most recently adopted financial policies, debt management policies and procedures, and investment policy. In June 2008, the City Council approved financial policies formalizing longstanding practices that have been used in the past to prepare the budget. These 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 to ensure that the City is always living within its means; and

4. Establish reserves necessary to meet known and unknown future obligations.

Strategic Plan and Objectives
The Strategic Plan is developed through an annual process that involves the City Council and City executive staff in facilitated, collaborative working sessions. The process is completed early each year so that the Strategic Plan can be incorporated into the City’s budget.

The plan is a document comprised of the City’s mission, vision and core values statements, the strategic goals and objectives for the next planning period, and detailed work plans that will accomplish the goals. Also included in this section is a summary of the projects that have been identified and proposed to achieve these goals.

Financial Summaries, Revenues and Expenditures
This section provides an overview of the fund structure, including a chart that defines the 16 separate funds in the City. It also includes fund balance summaries, revenue and expenditure summaries, discussion of major revenue sources, and information on the City’s top two revenue sources: property and sales tax.

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Department Program Budgets
This section provides organization charts and detailed budget information by program for every department. This includes a brief description of the department’s major services, personnel resources, department objectives, past accomplishments, goals for the next two fiscal years, and revenue and expenditures by department and division. Performance measures for each program are included in program budget pages to measure the program’s outcome and impact.

Personnel
This section provides a summary of the City’s compensation and benefit programs, an analysis of the City’s Calpers pension plans and the respective funding status of each, and a breakdown of all employee classifications citywide and by department.

Capital Improvement Program
This section includes a summary highlighting the five-year Capital Improvement Program (CIP) both by fund and category. Each project has its own page with additional information on the project and proposed timeline for completion, as well as revenues or funding sources and capital and operating expenditures. The Unfunded CIP List shows projects that have been identified but not yet included in the funding recommendations.

Debt Service
This section includes financial data on the City’s current debt obligations, the relationship between current debt levels and legal limits, and the effects of existing debt levels on current operations.

In addition to the five-year debt schedule and obligations, it also includes the most current bond rating.

Glossary
The glossary provides definitions of budget-related terminology and acronyms found throughout the document.

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TOP 10 FREQUENTLY ASKED BUDGET QUESTIONS
1) How much of my property tax payment goes to the City? Approximately 13.28% of your property tax bill goes to the City of San Carlos. For example, if you have a property assessment of $2,000,000, even though your property tax bill is $20,000, only $2,654.40 goes to the City. This is due to the limits that were established by Proposition 13 in the late 1970s. Please see the table below for a breakdown of a property tax dollar:

Taxing Entities Percentage of Distribution
ERAF Share of San Mateo County 11.928%
San Mateo County 15.220%
San Carlos Elementary General Purpose 21.270%
Sequoia High General Purpose 17.890%
ERAF Share of San Carlos General Fund 2.462%
San Carlos General Fund 10.810%
San Mateo Junior College General Purpose 7.770%
County Education Tax 4.040%
County Library 3.960%
Mid-Peninsula Regional Open Space 2.100%
Sequoia Hospital District 1.677%
County Harbor District 0.404%
Bay Area, Air Pollution 0.239%
Mosquito Abatement 0.220%
Total 100.000%
2) What are the major categories of property tax?
The major categories of property tax include residential, commercial, industrial, unsecured, and other. Please see the chart below for parcel and taxable value information.

Although there are more residential parcels than commercial, the top 10 property owners are comprised of mostly commercial and industrial properties.

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3) What is the City’s sales tax rate and how much goes back to the City? The City’s sales tax rate is 9.375%, out of which 1% goes back to the City. For example, if a purchase is made in the amount of $100, sales tax is $9.37, but only $1 goes to the City. The rest of the sales tax goes to various entities. Please see the graphic below for a breakdown of where sales tax dollars are distributed:

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4) What are the major sources of sales tax?
Major sources of sales tax include the following industry groups:
• Autos & Transportation
• Building & Construction
• Business & Industry
• Food & Drugs
• Fuel & Service Stations
• General Consumer Goods
• Restaurants & Hotels
Please see Sales Tax by Major Industry Groups bar chart on page 161. 5) What are the different type of City funds?
The City has several different funds including the following:
• General Fund. The General Fund is the primary operating fund of the City and is used to account for most day-to-day activities.
• Enterprise (Sewer) Fund. The Enterprise Fund or Wastewater (Sewer) Fund is used to account for City operations that are financed and operated like a private business.
• Other Revenue Funds. Revenue funds are used to account for revenue sources for which expenditures are restricted, by law or administrative action, to specific purposes.
• Capital Funds. The Capital Funds are used to account for the acquisition or construction of major capital improvements, other than those financed by the Enterprise Fund.
• Internal Service Funds. The Internal Service Funds are used to account for special activities and services performed by a designated department for other departments on a cost reimbursement basis.

Please see City of San Carlos Fund Structure on page 119 for additional information on all the budgetary funds.
6) What are other sources of revenue?
Sales and property tax are two of the largest sources of revenue. Aside from sales and property tax, the other sources of revenue are:
• Transient Occupancy Tax is tax paid by the hotels guests and remitted by the hotels to the City.
• Licenses & Permits is revenue generated by construction permits. • Use of Money & Property is revenue generated from property rentals, lease income, four digital billboards, and investment income. • Vehicle in-Lieu is revenue generated by vehicle registration fees.

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• Capital Projects Funding includes a solid waste franchise fee, Excess Education Revenue Augmentation Fund (ERAF), Measure A, Measure W, Measure M, gas tax, Child Care fund, user fees, grants, developer fees, traffic impact fee, housing in-lieu fee, and the commercial linkage fee.
• Fines & Forfeitures/PAMF Revenue includes vehicle code fines, building permit violations, parking fines, non-sufficient funds charge, and revenue based on the terms of the development agreement with the Palo Alto Medical Foundation (PAMF).
• Business Registration/Other Tax is generated by a registration fee paid by all businesses operating within the city and franchise fees. • Other Revenue Categories includes cost reimbursements from other agencies. • Charges for Services includes development plan check fees and recreation programs and reservations.
• Enterprise Revenue includes fees related to sewer service assessment and connection.

Please see the Revenues section of the budget book on page 139 for the adopted revenue.
7) What has the City done to reduce costs for taxpayers? For over a decade, the City has been a strong advocate for shared services. Our shared services model has proven very successful in reducing our costs while increasing or maintaining the same level of service for the community. Contracting with larger agencies for public safety provides far more resources to pull from in response to emergency situations. In addition, the City can help offset the administrative costs of the other agency by sharing these resources. The City has the following shared service agreements:
• Law Enforcement Services (Police Services) contracted with the County of San Mateo Sheriff’s Office since 2010.
• Dispatch Services contracted with the County of San Mateo since 2012. • Fire and Emergency Services contracted with the City of Redwood City since 2013.

In addition to shared service arrangements, the City implemented pension reforms and/or tiers prior to the passage of the State Public Employees’ Pension Reform Act of 2013 (“PEPRA”). The reforms included reduction of pension benefits and the elimination of employer paid retiree health benefits for employees hired after 2009. These reforms reduced the long-term obligations of the City by millions of dollars. 8) How many employees work for the City?
There are 104 budgeted positions for the City for Fiscal Year 2025-26. Please see the Personnel Summary section of the budget on page 375 for position changes and positions by department.

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9) What are the Five-Year Capital Improvement Projects? There are a number of Capital Improvement Projects. For information on these projects, please see the Capital Improvement Program section on page 383 of the budget book. 10) What is the total budget of the City?
The total budget for the City for Fiscal Year 2025-26 is $129,060,778. The total General Fund budget is $66,938,825.

The total budget for the City for Fiscal Year 2026-27 is $122,286,039. The total General Fund budget is $69,779,345.

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BASIS OF BUDGETING AND ACCOUNTING

BASIS OF BUDGETING
The City of San Carlos budget document contains revenues, appropriations, and other financial information pertaining to all City operating and capital budgets, including the five-year Capital Improvement Program and the proprietary funds. The City’s budget goal is to achieve a balanced budget with revenues, including reimbursements or transfers from other funds for services provided, equal to or greater than expenditures.

The budgets of governmental fund types (General Fund, Other Revenue, and Capital Projects Funds) of the City are budgeted and accounted for using the modified accrual basis of accounting, which recognizes revenues when they become susceptible to accrual – i.e., measurable and available. Expenditures are recognized when the fund liability is incurred. The accrual basis of accounting is generally used to budget for the Enterprise Funds and Internal Service Funds, except for depreciation, debt principal payments, and capital outlay (see Basis of Accounting below).

The City’s accounting system is maintained on a fund basis in accordance with governmental accounting standards. Each fund is considered a separate accounting entity with a self-balancing set of accounts that record assets, liabilities, fund equity, revenue, and expenditures. The appropriated budget is prepared by fund, function/program (e.g. public safety), and department (e.g. Community Development).

Budgetary control is maintained at the department/program level. Department directors 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 City Council.

Departments monitor and control budgets using the City’s financial system, through reports of revenue, and expenditure accounts. The financial system monitors expenditures at the line item budget level, immediately notifying the requestor of available funding levels. The City Council is also provided with a quarterly financial status report that reflects year-to-date expenditures and revenues compared to budget. In addition, a financial status report and five-year forecast are included as part of the mid-cycle budget review and adjustment process, which is completed every other spring and submitted to the City Council for review and approval.

BASIS OF ACCOUNTING
The Annual Comprehensive Financial Report (ACFR) presents the status of the City’s finances in accordance with Generally Accepted Accounting Principles (GAAP). In most cases, this conforms to how the City prepares its budget. Exceptions are as follows:
• Compensated absences are recorded as earned by employees (GAAP basis), as opposed to being expended when paid (Budget basis)
• Principal payments on long-term debt within the Debt Service Fund reduce the amount of debt remaining on a GAAP basis, as opposed to being expended on a Budget basis • Capital Outlay is recorded as assets on a GAAP basis and expended on a Budget basis CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 43

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• Depreciation expenses are recorded on a GAAP basis only The governmentwide proprietary funds and fiduciary funds financial statements are prepared using the economic resources measurement focus and the 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 including major and other governmental funds (non-major 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 judgements and compensated absences, which are recognized as expenditures to the extent they have matured. Governmental capital assets acquisitions, including entering into contracts which give 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 financial sources.

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BUDGET PROCESS AND CALENDAR

BUDGET PROCESS
The City’s Municipal Code requires the City Manager to prepare and submit a proposed biennial budget to the City Council for approval. California Government Code Section 53901 requires that the City provide a copy of the adopted budget to the County Controller (Auditor) of San Mateo County within 60 days after the beginning of the fiscal year or before August 31.

The budget process commences six months prior to the beginning of the next fiscal year. The budget calendar establishes the timeline for the process, dates for submission of department requests, budget work sessions, and public hearings leading to final adoption of the budget.

The philosophy employed in creating this budget has been to focus the City’s efforts in continuing to provide quality “core” municipal services in the most efficient way possible.

Budget Development Process and Timeline
Prior to preparation of department budgets, the City Manager, Assistant City Manager, Administrative Services Director, and Financial Services Manager provide guidance to the departments related to economic outlook and parameters for budgeting.

Budget Preparation for FYs 2025-27 Commences. In developing the base budgets for FYs 2025-27, staff made a number of revenue and expenditure assumptions. All of these assumptions were based on the projections and economic conditions known between January and March 2025 and reflect the adjustments approved by the City Council.

Strategic Planning. In January 2025, the City Council and Executive Management staff continued the annual strategic planning process begun in FY 2005-06. As part of this budget 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 statement, vision statement, core values, and the establishment of six primary goals and several supporting objectives. Many objectives from this strategic planning process have been funded in this budget. The City Council appropriates the funds necessary to meet operating and capital activities and the adopted strategic goals and objectives. Budgetary adjustments are only considered within the framework of the adopted budget and the City Council’s directions, goals, and policies. This meeting was open to the public and the public was given an opportunity to comment.

Department Requests. In February 2025, City departments were provided with base budgets for FYs 2025-27 that included known increases in salaries and benefits, increases related to existing professional services contracts, and inflationary increases for operational expenditures. The revised budget and projections were also provided to the departments at that time. Department requests received were based on budget instructions and were related to the organization’s program objectives and the priorities of the City. The requests were received and compiled by finance staff. The Assistant City Manager, Administrative Services Director, and the Financial Services Manager met with each department individually to discuss and finalize the recommended budget options that were submitted for the Council’s consideration during the Budget Study Session.

Budget Study Session Held. On April 29, 2025, the City Council held a study session to discuss the general overview of the budget process, department responsibilities, accomplishments, goals, and recommendations for both the operating and capital budgets for FYs 2025-27. A Five-Year Capital Improvement Program Budget was also discussed and presented as part of the Budget Study Session. Based on directions from the City Council, the proposed changes from those study sessions have been incorporated into the proposed budget document. This meeting was open to the public, CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 45

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broadcast on the City’s TV channels, and available on the City’s website following the meeting. The public was notified in advance of the meeting and allowed time to comment.

Budget Adoption. On June 9, 2025, staff will present the Proposed City of San Carlos Biennial Budget for Fiscal Years 2025-27, including both Operating and Capital Budgets, for adoption. This meeting is also open to the public, broadcast on the City’s TV channels, and available on the City’s website following the meeting. The public was notified in advance of the meeting and allowed time to comment.

Performance Measurements
Over a decade ago, the City transitioned from annual departmental budgeting to a full program and performance-based biennial budget. Program and performance-based budgeting focuses decisions around results and services versus organizational units; emphasizes performance over line items; shows the cost (budget) of services and the level of service available for the cost; provides a structure to consider programs as they contribute to City goals and outcomes; and serves as an investment perspective with dialog about the right service for the right price.

The City uses several different tools to accumulate performance data, including employee surveys, resident satisfaction surveys, and internal performance measurement activities. Included in this budget document are the results of a resident satisfaction survey that was completed in February 2025.

This year, staff did a thorough review of these measures and updated the format to bring more value to the reader. Performance measures are now defined with an explanation showing what it tracks, a purpose section discussing why it is important, and a status section reflecting progress. Workload measures are now tracked separately.

Overhead Cost Allocation Method
In an effort to clarify and simplify the allocation process, staff worked closely with professional consultants to develop a methodology and a model to ensure the equitable allocation of overhead costs to departments in a manner that is both transparent and sustainable. Through this approach, each department’s budget reflects total departmental costs, including all staff assigned to the department. The model calculates how much should be recovered from other City funds, based on average time spent on other/non-General Fund programs, as well as employing other service utilization factors. These indirect and direct overhead costs are represented as cost allocations or transfers to and from department budgets as indicated in the chart below.

Functional Units
General
Fund
Sewer
Enterprise
Fund
Other
Revenue
Funds
Capital
Funds
Internal
Service
Funds
City Council X X X X X
City Manager X X X X X
City Attorney X X X X X
City Clerk X X X X X
City Treasurer X X X X X
Administrative Services X X X X X
Community Development X X
Parks and Recreation X
Public Safety X X

RELATIONSHIP BETWEEN DEPARTMENTS AND FUNDS
Budgetary Reserves
The City Council has established the Fund Balance Policy, updated as of May 12, 2025, which is included in the Financial Policies section of this budget document. The General Fund balances for CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027
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FYs 2025-27 are detailed in the table below. Percentages of total operating expenditures are also listed, where appropriate, to demonstrate the level of reserves as governed by the City’s Fund Balance Policy.

Projected
FY 24-25
% of
FY 25
Exp
Proposed
FY 25-26
% of
FY 26
Approp
Proposed
FY 26-27
% of
FY 27
Approp
Committed Fund Balances:

Economic Uncertainty $ 10,188,605 17.0% 11,379,600 $ 17.0% 11,862,489 $ 17.0% Strategic Property Acquisition $ 12,191,795 $ 12,191,795 $ 12,191,795 Assigned Fund Balances:

Unfunded Liabilities $ 3,000,000 $ 2,600,000 $ 2,200,000 Facility/Infrastructure $ 23,990,500 $ 10,891,500 $ 3,891,500 Ending Reserve Balances $ 49,370,900 82.4% 37,062,895 $ 55.4% 30,145,784 $ 43.2% Unassigned Fund Balance $ 2,003,841 $ 1,355,320 $ 1,282,787 Nonspendable Fund Balances $ 2,159,946 $ 1,637,946 $ 1,118,946 Total Ending Fund Balance $ 53,534,687 $ 40,056,161 $ 32,547,517

RESERVE FUND BALANCES - GENERAL FUND
Budget Implementation
Once the budget is adopted, it is effective on July 1 and becomes the legal basis for the programs and services of each department of the City during the fiscal year. No department of the city government may spend in excess of the adopted and appropriated amounts, unless authorized by budget transfer as approved by the City Manager or designee. Financial and programmatic monitoring of departmental activities is necessary to ensure that conformity with the budget takes place throughout the year.

Budget amendments may be made by the City Council to meet the changing needs of the City. The means by which the City Council may amend the budget include, but are not limited to, appropriation of additional funds and decreasing the amount of appropriated funds.

Capital Improvement Program
The City Council also adopts a Five-Year Capital Improvement Program. This budget is submitted by the City Manager with the operating budget, and public hearings are held and the budgets are legislatively enacted through adoption of resolutions and/or ordinances. Appropriations for project funds and grant funds do not lapse at year end, but continue until the purpose of the appropriation has been fulfilled or terminated. Amendments to these budgets may be affected by the City Council’s actions. The level of budget control is on a project basis with additional administrative controls being exercised.

Budget Principles and Policies
• The operating budget will be prepared to fund current-year expenditures with current-year revenue. Surplus fund balances may be used to increase fund balance reserves, fund Capital Improvement Projects, or be carried forward to fund future years’ operating budgets when necessary to stabilize services and fund capital outlay. • We will assume normal inflationary growth in accordance with the consumer price index for operating expenses.
• We will assume personnel costs based on current memoranda of understanding in effect at the time.
• Any new or expanded programs will be required to identify new funding sources and/or offsetting reductions in expenditures in other programs. • We will deliver service in the most cost-effective manner. • The budget will state the objectives of each of the operating programs. • The budget will fully account for and apportion all costs, fees, and General Fund transfers associated with the Special Revenue and Enterprise Funds.

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• All budget transfers require the approval of the City Manager or designee. However, transfers of appropriations that increase the total appropriations of a fund must be approved by the City Council.
• We will maintain a long-range fiscal perspective through the use of a biennial operating budget, a five-year capital improvement program, and a ten-year financial forecast. • The biennial budget will be adopted by Resolution of the City Council, by July 1, every other year.
• A mid-cycle budget status report will be prepared and presented to the City Council in the spring of the first year of the budget that will include projections to year-end and any adjustments required for the second year of the biennial budget. • Staff will provide a quarterly written report to the Council on the City’s General Fund revenues and expenditures.

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FY 2025-27 BUDGET CALENDAR
DATE DEPARTMENT ITEM DUE Legal Requirement
January
2025
Finance Finance builds base budget to include
known increases in salaries and
benefits, increases related to existing
professional services contracts, and
inflationary increases for operational
expenditures
N/A
February 6,
2025
City Council
and Executive
Management
Staff
Strategic planning retreat – public
meeting
N/A
February 7,
2025
Finance Budget instructions, program change
forms and draft work programs
/performance measurements sent to
departments
N/A
February 7,
2025
Finance Finance provides departments the
following information:

1. FY23 audited results

2. FY24 audited results

3. FY25 revised budget

4. FY25 current YTD/projections

5. FY26 base budget

6. FY27 base budget

7. Updated CIP summaries

8. Performance Measures
N/A
March 7,
2025
All Depts. 1. Review and send to Finance any
updates for FY25 operating budget
projections.

2. Submit completed FY25-26 and
FY26-27 operating budget forms (if
applicable)

3. Submit work programs/performance
measures

4. Submit CIP forms for any requested
adjustments or new projects
N/A
March 18 –
April 4,
2025
All Depts. Present preliminary operating and CIP
budget with all program change forms to
the City Manager for review. Hold work
sessions with each department over this
time period.

N/A
April 29,
2025
All Depts. Budget study session with City Council
– public meeting
N/A
June 2,
2025
Community
Development
Present proposed CIP budget i to
Planning Commission for General Plan
consistency determination – public
meeting
State Planning and Zoning
Code Sections 64500,
64501, 65403
June 9,
2025
Admin.

Services
Director
Present budget to City Council for
adoption
City’s Municipal Code
Section 2.04.060
August
2025
City Clerk Forward a copy of approved and
adopted budget to the County Controller
(Auditor) of San Mateo County for filing.

California Government
Code Section 53901

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MAJOR FUNDS SUMMARIES
The City of San Carlos budget document contains revenues, appropriations, and other financial information pertaining to all City operating and capital budgets, including the five-year Capital Improvement Program. The budgets are accounted for using the modified accrual basis of accounting for governmental funds and accrual basis of accounting for proprietary funds. The City’s budget goal is to achieve a balanced budget with revenues, including reimbursements or transfers from other funds for services provided, equal to or greater than expenditures.

MAJOR FUND SUMMARIES
General Fund (Fund 0001)
General Fund revenues for FY 2025-26 are budgeted to be $61,584,200, representing a 4.3% increase over the projected revenues for FY 2024-25. The increase in projected revenues is due to assumptions of increases in property taxes, sales taxes, investment income, lease income, and transient occupancy taxes. For FY 2026-27, operating revenues are budgeted to be $64,155,000, representing an increase of 4.2% over the budgeted revenues for FY 2025-26. The increase in both years reflects continued growth expected from development activity and the expansion of programs.

Property tax is expected to increase 7.2% in FY 2025-26 and 5.6% in FY 2026-27. Sales tax is projected to grow at 7.3% in FY 2025-26 and 3.2% in FY 2026-27. Transient Occupancy Taxes are projected to grow 8.8% in FY 2025-26 and 6.2% in FY 2026-27 with the expectation that occupancy rates will return to pre-pandemic levels. Sales tax and transient occupancy taxes, while showing an increase over FY 2024-25 projections, are still reflecting a decrease over what was originally budgeted for FY 2024-25. This is due to economic uncertainties and the possibility of a recession.

General Fund expenditures for FY 2025-26 are budgeted to be $66,938,825, representing an 11.7% increase over the projected expenditures for FY 2024-25. Projected expenditures for FY 2024-25 include salary savings from vacant positions during the year and the timing of professional services expenses. The FY 2025-26 expenditure increase over FY 2024-25 budget is 7.8% and includes requested program and position changes, in addition to anticipated increases associated with retirement rates, employee medical benefits, post-employment benefits, professional services associated with plan check reviews, economic development, recreational activities, and public safety services. The FY 2026-27 total expenditure budget is $69,779,345, a 4.2% increase over the FY 2025- 26 expenditure budget.

General Fund net allocations and transfers in for FY 2025-26 are budgeted to be $4,975,100, representing a 16.5% increase over the projected net allocations and transfers for FY 2024-25. Net allocations and transfers funding are budgeted in FY 2026-27 at $5,115,700, representing a 2.8% increase over FY 2025-26. This increase is a result of the increase in overhead charges to other funds in accordance with the contracted study that was performed in FY 2021-22.

The Other Sources/Uses of Funds category for FY 2025-26 has increased by $4.2 million from the FY 2024-25 projections. The category represents one-time funding for special items, including a $2.85 million transfer from the capital reserve to the Gas Tax and $10.25 million transfer into the General Capital Funds for infrastructure improvements. The FY 2026-27 budget includes a $7.0 million contribution to the General Fund Capital Projects Fund. These transfers come from reserves that have been set aside from prior year savings.

The FY 2025-26 budget reflects a total fund balance projection of $40,056,164, including both restricted and unrestricted balances, and represents a decrease of 25.2% compared to the FY 2024- 25 projected ending fund balance. This drop in fund balance is mainly due to the $13.1 million contribution to the General Fund Capital Projects Fund and Gas Tax Fund for infrastructure improvements. The FY 2026-27 estimated ending fund balance for the General Fund of $32,547,519 CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 51

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decreases by 18.7%. Similar to the prior year, this decrease is due to the transfer to the capital funds for infrastructure improvements.

GENERAL FUND (RESTRICTED & UNRESTRICTED)
Projected FY
2024-25
Proposed
FY 2025-26 Variance
%
Change
Proposed
FY 2026-27 Variance
%
Change
Est. Beg Fund Balance $ 58,985,039 $ 53,534,689 $ (5,450,350) -9.2% 40,056,164 $ $ (13,478,525) -25.2% Revenues 59,061,520 61,584,200 2,522,680 4.3% 64,155,000 2,570,800 4.2% Expenditures (59,932,970) (66,938,825) (7,005,855) 11.7% (69,779,345) (2,840,520) 4.2% Net Allocations/Transfers 4,271,100 4,975,100 704,000 16.5% 5,115,700 140,600 2.8% Other Sources/Uses (8,850,000) (13,099,000) (4,249,000) 48.0% (7,000,000) 6,099,000 -46.6% Est. Ending Fund Balance $ 53,534,689 $ 40,056,164 $ (13,478,525) -25.2% 32,547,519 $ $ (7,508,645) -18.7% Wastewater Fund (Fund 0006)
The Wastewater Fund revenues for FY 2025-26 are budgeted to be $28,897,800, representing an increase of 18.1% over the projected revenues for FY 2024-25. The increase reflects an assumption of $4.7 million from new development connection fees and the sewer rate increases of 3% as previously approved by the City Council. The FY 2026-27 revenue budget of $28,743,100 is a 0.5% decrease over the FY 2025-26 estimates, primarily due to the one-time connection fees projected in the prior year. Revenues are used to fund the capital improvements outlined in the City’s Sewer Master Plan and to pay the debt service associated with Silicon Valley Clean Water (SVCW) improvements to the wastewater treatment infrastructure.

Wastewater Fund expenses for FY 2025-26 are budgeted to be $29,002,800, reflecting a 17.2% increase from estimated expenses for FY 2024-25. Expenses in FY 2026-27 are budgeted to be $26,122,800, a 9.9% decrease over the FY 2025-26 budget. The expense budgets reflect the timing of planned capital improvement project spending and the debt service requirements in the corresponding year. More detail on the capital projects can be found in the Capital Improvement Project (CIP) section of the budget.

Net allocations and transfers budgeted for FY 2025-26 of $5,429,700 reflect an increase of 28.4% as compared to FY 2024-25 projections. This increase reflects overhead allocation changes based on the comprehensive study performed by a third-party consultant in FY 2021-22. Net allocations and transfers out for FY 2026-27 of $5,603,200 are expected to increase by 3.2% over FY 2025-26 projected budget. These increases reflect the estimated annual cost of living adjustments.

The ending fund balance, which includes those funds invested in capital assets and invested in SVCW, is estimated to be $79,568,776 at the end of FY 2025-26. The fund balance is 6.5% lower than the fund balance estimate of $85,103,476 at the end of FY 2024-25. The increase is mainly due to the timing of capital project spending. The estimated fund balance is projected to decrease to $76,585,876 in FY 2026-27. The increase is mainly due to the timing of capital projects and debt issuance for capital project spending at the SVCW treatment plant.

WASTEWATER (ENTERPRISE) FUND
Projected
FY 2024-25
Proposed
FY 2025-26 Variance
%
Change
Proposed
FY 2026-27 Variance
%
Change
Est. Beg Fund Balance $ 89,619,427 $ 85,103,476 $ (4,515,951) -5.0% 79,568,776 $ $ (5,534,700) -6.5% Revenues 24,469,000 28,897,800 4,428,800 18.1% 28,743,100 (154,700) -0.5% Expenditures (24,756,851) (29,002,800) (4,245,949) 17.2% (26,122,800) 2,880,000 -9.9% Net Allocations/Transfers (4,228,100) (5,429,700) (1,201,600) 28.4% (5,603,200) (173,500) 3.2% Est. Ending Fund Balance $ 85,103,476 $ 79,568,776 $ (5,534,700) -6.5% 76,585,876 $ $ (2,982,900) -3.7% CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027
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Gas Tax Fund (Fund 0016)
The Gas Fund revenues for FY 2025-26 are budgeted to be $2,217,600, representing a decrease of

15.5% over the projected revenues for FY 2024-25. The decrease is primarily related to the timing of interest income allocations on available cash balances. The timing of capital spending in FY 2024-25 was later in the year, leaving a larger fund balance for interest income to accumulate. The FY 2026- 27 revenue budget of $2,280,300 is a 2.8% increase over the FY 2025-26 estimates, primarily due to general inflationary assumptions.

Gas Tax Fund expenses for FY 2025-26 are budgeted to be $9,100,000, reflecting a 3.8% decrease from estimated expenses for FY 2024-25. Expenses in FY 2026-27 are budgeted to be $9,600,000, a

5.5% increase over the FY 2025-26 budget. The expense budgets reflect the timing of planned capital improvement project spending. More details on the capital projects can be found in the CIP section of the budget.

Net allocations and transfers budgeted for FY 2025-26 of $6,754,100 reflect an increase of 3.1% as compared to FY 2024-25 projections. This increase reflects overhead allocation changes based on the comprehensive study performed by a third-party consultant in FY 2021-22 and the timing of transfers in from the General Capital fund to help offset capital improvement expenses. Net allocations and transfers out for FY 2026-27 of $3,034,500 are expected to decrease by 55.1% over FY 2025-26 projected budget as there is no transfer from the capital fund planned in that fiscal year.

The ending fund balance for FY 2025-26 is estimated to be $17,275,723. The fund balance is 0.7% lower than the fund balance estimate of $17,404,023 at the end of FY 2024-25. The decrease is mainly due to the timing of capital project spending. The estimated fund balance is projected to decrease by

24.8% to $12,990,523 in FY 2026-27. The decrease is mainly due to the timing of capital projects and the use of prior year fund balance to pay for those infrastructure improvements.

GAS TAX FUND
Projected
FY 2024-25
Proposed
FY 2025-26 Variance
%
Change
Proposed
FY 2026-27 Variance
%
Change
Est. Beg Fund Balance $ 17,686,923 $ 17,404,023 $ (282,900) -1.6% 17,275,723 $ $ (128,300) -0.7% Revenues 2,625,300 2,217,600 (407,700) -15.5% 2,280,300 62,700 2.8% Expenditures (9,460,000) (9,100,000) 360,000 -3.8% (9,600,000) (500,000) 5.5% Net Allocations/Transfers 6,551,800 6,754,100 202,300 3.1% 3,034,500 (3,719,600) -55.1% Est. Ending Fund Balance $ 17,404,023 $ 17,275,723 $ (128,300) -0.7% 12,990,523 $ $ (4,285,200) -24.8% Capital Improvement Fund (Fund 0025)
Revenues for FY 2025-26 in the Capital Improvement Fund, both restricted and unrestricted, are $16,233,000, representing a 120.0% increase from the estimated revenues for FY 2024-25. The majority of this increase is related to impact fees from projected large developments. Revenues for FY 2026-27 are estimated to be $7,964,200, a decrease of 50.9% from FY 2025-26 due to the timing of projected impact fees.

Expenditures for FY 2025-26 are $17,603,083 and in FY 2026-27 are estimated to be $10,379,100 due to the timing of capital project spending. More details on the capital projects can be found in the CIP section of the budget.

Net allocations and transfers budgeted for FY 2025-26 of $6,574,000 reflect an increase of 1602.1% as compared to FY 2024-25 projections. This large increase is due to a $10.25 million transfer in from General Fund reserves to cover infrastructure improvements and $3.68 million transfer out to the Gas Tax fund and Park In-Lieu funds. Net transfers in FY 2026-27 are budgeted at $4,150,000 to cover infrastructure improvements which represent a decrease of 36.9% compared to the previous year’s budget.

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The fund balance for both unrestricted and restricted balances, is estimated at $9,494,301 at the end of FY 2025-26and $11,229,401 at the end of FY 2026-27.

CAPITAL IMPROVEMENT FUND (RESTRICTED AND UNRESTRICTED)
Projected
FY 2024-25
Proposed
FY 2025-26 Variance
%
Change
Proposed
FY 2026-27 Variance
%
Change
Est. Beg Fund Balance $ 35,094,124 $ 4,290,384 $ (30,803,740) -87.8% 9,494,301 $ $ 5,203,917 121.3% Revenues 7,379,857 16,233,000 8,853,143 120.0% 7,964,200 (8,268,800) -50.9% Expenditures (38,569,824) (17,603,083) 20,966,741 -54.4% (10,379,100) 7,223,983 -41.0% Net Transfers 386,227 6,574,000 6,187,773 1602.1% 4,150,000 (2,424,000) -36.9% Est. Ending Fund Balance $ 4,290,384 $ 9,494,301 $ 5,203,917 121.3% 11,229,401 $ $ 1,735,100 18.3% Housing Funds (Fund 0029 and Fund 0031)
Revenues for FY 2025-26 for the Housing Funds are budgeted to be $16,294,100, an increase of 1097.7% over the FY 2024-25 projections. FY 2025-26 revenues include one-time commercial linkage fees projected to be received from new commercial development. The FY 2026-27 revenues are estimated to be $7,232,500 and also reflect commercial linkage fees from anticipated large developments on the east side of the city.

The FY 2025-26 and FY 2026-27 expenditures of $748,100 and $770,500 respectively include operating budget items such as professional services and utilities costs. Capital project spending proposals will be brought to City Council at future dates when below market housing acquisition opportunities arise. Previously approved capital project details can be found in the CIP section of the budget.

The fund balance at the end of FY 2025-26 is estimated to be $19,179,866 and is expected to increase to $25,078,366 in FY 2026-27. This fund balance will be used to fund future affordable housing projects.

HOUSING FUNDS (RESTRICTED)
Projected
FY 2024-25
Proposed
FY 2025-26 Variance
%
Change
Proposed
FY 2026-27 Variance
%
Change
Est. Beg Fund Balance $ 14,252,340 $ 4,180,966 $ (10,071,374) -70.7% 19,179,866 $ $ 14,998,900 358.7% Revenues 1,360,400 16,294,100 14,933,700 1097.7% 7,232,500 (9,061,600) -55.6% Expenditures (10,997,674) (748,100) 10,249,574 -93.2% (770,500) (22,400) 3.0% Net Transfers (434,100) (547,100) (113,000) 26.0% (563,500) (16,400) 3.0% Est. Ending Fund Balance $ 4,180,966 $ 19,179,866 $ 14,998,900 358.7% 25,078,366 $ $ 5,898,500 30.8% CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 54

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DISTINGUISHED BUDGET AWARD FOR FISCAL YEAR 2023-25
The Government Finance Officers Association (GFOA) established the Distinguished Budget Presentation Awards Program in 1984 to encourage and assist state and local governments to prepare budget documents of the very highest quality that reflect both the guidelines established by the National Advisory Council on State and Local Budgeting and the GFOA's best practices on budgeting and then to recognize individual governments that succeed in achieving that goal.

The City of San Carlos has received this award for several years, including the FY 2023-25 Budget.

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City of San Carlos FY 2025-27 Budget
Community & Economic Profile
Location
San Carlos, “The City of Good Living,” is located in the center of the San Francisco Bay Area and has everything at its doorstep. San Francisco is 25 miles north and San Jose is 25 miles south. San Carlos boasts an ideal climate, good government, outstanding school system, attractive residential areas, a fine shopping district, excellent restaurants, a modern industrial and commercial area, and plenty of open space. At 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. You’ll find friendly, involved people here and an inviting community atmosphere.

History
The first known inhabitants of San Carlos were the Ohlone Indians.

Ohlone is the name that was given to many related groups of Native Americans living along the coast between Monterey and San Francisco. Historians believe that two sub-tribes existed in and near San Carlos, including the Salson to the north of Belmont Creek and the Lhamshin.

In August 1775, Lt. Juan Manuel de Ayala brought his sailing ship, the “San Carlos”, into San Francisco Bay and anchored in what is currently known as Ayala cove. His mission was to develop a map of the Bay for use by future Spanish ship captains.

San Carlos formally entered the American era in 1854 when Timothy Guy Phelps became the first American to own and occupy land in the city. Another early settler of San Carlos was Nathanial Brittan. Brittan developed properties between Brittan Avenue and Pulgas Creek in the late 1800s. He helped establish water wells and also granted the Southern Pacific right-of-way for a second set of railroad tracks across his property.

The citizens of San Carlos voted to incorporate on July 1, 1925. Frederick Drake, known as the “Father of San Carlos,” continued to promote the town and coined the motto “The City of Good Living.” Drake also founded the San Carlos Enquirer. He was a key organizer of nearby Sequoia High School and established the San Carlos Chamber of Commerce in 1926.

In 1940, San Carlos experienced its first big spurt in population and grew to 3,520 residents. In 1944, Dalmo Victor established the city’s first large electronics plant, followed soon after by Eitel McCullough, a vacuum tubes manufacturing firm.

Establishment of these two firms contributed to the quadrupling of the San Carlos population in the decade after 1940. In 1950, when the population was 14,371, the City boasted a total of 89 industries, wholesalers, manufacturers, and distributors in a variety of commodities from electronics to cosmetics. By 1958, the electronics industry comprised a substantial segment of the city’s industrial area.

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Early in its history, the City of San Carlos adopted the motto “City of Good Living.” That phrase stuck and is still used daily. With an ideal climate, charming neighborhoods, a thriving business/industrial district, and a small airport adjoining a commercial area, San Carlos continually attracts new residents and businesses.

Government Services
The City of San Carlos provides government services to the San Carlos community. The members of the City Council serve as the policy-making body. City voters elect five Council members to staggered, four-year terms. The City Council meets regularly on the second and fourth Mondays of each month at 7:00 p.m. in the Council Chambers at 600 Elm Street and may call additional special meetings. These meetings are televised on the City’s government access station, Comcast Channel 27, and Uverse Channel 99. All meetings of the City Council, the Planning and Transportation Commission, and other City committees are open to the public, except when certain personnel matters and legal items are discussed.

The City Council appoints members to three commissions, two advisory boards, one advisory committee, and one advisory council to advise it on matters of special interest:
• Downtown Advisory Committee
• Economic Development Advisory Commission
• Museum of San Carlos History
• Parks, Recreation & Culture Commission
• Planning and Transportation Commission
• San Mateo County Mosquito & Vector Control District
Board
• Youth Advisory Council
For additional information regarding each advisory commission, please refer to the San Carlos City Roster, available at the City Clerk’s Office, by calling (650) 802-4222, or on the City’s website at www.cityofsancarlos.org.

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Population
The City of San Carlos has grown at a constant pace since its incorporation in 1925. In the 1950s the city had the reputation as the West’s fastest growing town. The population briefly dipped in the 1970s but rose steadily in subsequent years. As of July 1, 2024, the US Census estimated that there are 29,403 people residing in San Carlos. The Association of Bay Area Governments (ABAG) projects that the population in San Mateo County in general will grow from 265,000 in 2015 to 394,000 by 2050, representing a 49% increase. As the population increases, it is important that there are enough jobs, housing, and public services to support growth.

In general, San Carlos residents are older,
have a higher household income, and a
higher chance of being employed than
people in other parts of San Mateo County.

As of 2023, the median age in San Carlos
was 41.6, slightly older than the median
age in San Mateo County of 41.5 and older
than the California median age of 38.2. As
the population ages, it is likely that the
need for housing and services for seniors
will increase.

Economic Data
According to the March 2025 report from the California Employment Development Department (EDD), the unemployment rate for the city was 3.5% in March 2025, which is a decrease of 0.2% compared to the 2024 annual average. The unemployment rate reflects that our local economy remains to be stable and well. The City of San Carlos has lower unemployment rate, compared with the rate of 5.3% for California and 4.2% for the nation.

San Carlos residents also have a higher median household income than all of San Mateo County and the Bay Area. In 2023, the median household income was $233,333. The 2023 median household income for San Mateo County and the County of San Francisco was $151,485 and $126,730, respectively.
35 37
39 41
43 San Carlos San Mateo County California
2023 Median Age in San Carlos, San Mateo
County, and California
Source: U.S. Census Bureau
Source: California Employment Development Department, Bureau of Labor Statistics

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%
San Carlos California Nationwide
March 2025 Employment Rate
March 2025 Employment Rate
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The California housing market remains strong despite the recent surge in mortgage interest rates.

The statewide median single family home price climbed to $884,350 in March 2025, an increase of

3.5% from the year before. According to data from the California Association of Realtors, the median price of a single-family home in San Mateo County increased slightly from $2.17 million in March 2024 to $2.26 million in March 2025. This represents an increase of 2.7%. San Mateo’s neighboring counties, San Francisco ($1.81 million) and Santa Clara ($2.12 million) had median home prices that also increased by 13.6% and 6.6% respectively, as compared to a year ago. In San Carlos, the median price of a single-family home increased by 10.9% since March 2024, from $2.33 million to $2.59 million. The increase in median price was due partly to persistent housing shortages and growing demand.

Culture & Recreation
In San Carlos there are two museums, 13 churches, a modern library, a youth center, an adult community center, six newspapers, a TV channel, seven financial institutions, 14 parks, and 10 playgrounds. San Carlos is a short distance from major golf courses, the Pacific Ocean, state parks, camping, and other recreational and cultural destinations. 0 500000 1000000 1500000 2000000 2500000 3000000
Statewide
Bay Area
San Mateo County
San Carlos
Santa Clara
San Francisco
March 2025 Median Home Sale Price
Single Family Homes
Statewide Bay Area San Mateo County San Carlos Santa Clara San Francisco Source: California Association of Realtors
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Other Statistics
Source: Data from City of San Carlos business registration database Average Temperature Rainfall
Period Min. Max Inches
January 45.0 60.0 0.0
April 51.0 70.0 1.1
July 57.0 77.0 0.0
October 51.0 69.0 0.9
Yearly 51.0 69.0 9.5
Source: Weather Spark
Ethnic Breakdown
2023 2020
White 59.40% 61.00%
Asian 21.90% 19.00%
Hispanic 10.70% 11.00%
Black 0.80% 0.84%
American
Indian
and
Alaska
Native 0.20% 0.14%
Other 7.00% 8.02%
Source: U.S. Census Bureau and Bay Area Metro
2024 Top Ten Employers in San Carlos
Number of
Employer Employees Products/Services
Natera Inc 709 Lab Services
Pacific Gas & Electric Co 428 Utilities
Cellink Corporation 379 Biotechnology
Delta Star 250 Manufacturing
Recology San Mateo County 240 Waste Management
The Home Depot 227 Retail
Check Point Software Tech Inc 175 Information Technology Noah Medical Corporation 149 Medical Technology
Nautilus Biotechnology, Inc. 140 Biotechnology
Vaxcyte, Inc. 126 Biotechnology
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Source: San Mateo County Assessor 2014/15-2023/24 Combined Tax Rolls Top Ten Property Tax Payers
Prior Year and Ten Years Ago
Source: San Mateo County Assessor 2023/24 Combined Tax Rolls and the SBE Non Unitary Tax Roll Top Property Tax Payers Based on Net Values
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The Top Ten Amazing Facts About the City of San Carlos

1. Famous people from San Carlos include:
• Kathryn Bigelow (Film writer and director,
winner of Academy Award Best Director in
2010, The Hurt Locker),
• Dana Carvey (Actor/Comedian, Saturday Night
Live, Wayne’s World),
• Rex J. Walheim (Astronaut on Space Shuttle
Atlantis),
• Barry Bonds (San Francisco Giants, All-Time
Home Run Record Holder),
• Brad Lewis (Producer, winner of Academy
Award Best Animated Film in 2007 -
Ratatouille).
• Emma Chamberlain, American influencer who won the won the 2018 Streamy Award for Breakout Creator. In 2019, Time magazine included her on its Time 100 Next list, and its list of The 25 Most Influential People On The Internet, writing that "Chamberlain pioneered an approach to vlogging that shook up YouTube's unofficial style guide."
• Jim Lanzone, CEO of Yahoo, Inc.

2. From 1921 – 1922, San Carlos was home to car racing.

The Greater San Francisco Speedway was a mile-andone-quarter board track located on 140 acres between McCue Street on the north and Brittan Avenue on the
south between Old County and Industrial Roads. The
track had a 38-degree bank, and racers could reach
death-defying speeds of more than 110 miles per hour.

The first race was on December 11, 1921, with a $25,000 purse.

3. From 1942 – 1944, the U.S. Army came to San Carlos.

H and H Ranch (at the top of today’s Club and Crestview Drives) was used as the U.S. Army War Dog Reception
and Training Center. Approximately 4,500 dogs were
trained at the facility and 1,200 could be accommodated at any one time.

4. The Chicken’s Ball of San Carlos was first
performed in 1940 and raised $325 for the public
schools in San Carlos. The Chicken’s Ball is a biennial fund-raiser for the school district and was originally designed like the 1900s-era San Francisco Barbary Coast saloon shows. No one, not even reporters, knows what will be in the show prior to opening night.

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5. In 1964, the Circle Star Theatre opened at 1800 Industrial Road.

Billed as the “Theatre of Tomorrow” the Circle Star was a theater in the round featuring a revolving circular stage with seating no further than 50 feet away from the stage. Many famous artists performed at Circle Star including: Frank Sinatra; Barry Manilow; Dionne Warwick; Sonny and Cher; Al Green; and the Carpenters.

6. Elected in 2002, the first female governor of Michigan, Jennifer Mulhern Granholm, served as Miss San Carlos in 1977.

7. In 1988, a chess match was held over the phone between Neville Arroues, a resident of San Carlos, and a 14-year-old Jamie Galatas, a resident of San Carlos’ sister city Croydon, Australia.

The match was the first event of the cities’ cultural exchange program.

8. Concerts in the park began in 1939 following construction of the Burton Park Amphitheater. The Amphitheater was
removed in the late 1990’s when the San Carlos Youth
Center was built.

9. In 1999, the San Carlos Youth Center opened. Many
children were involved in the project during construction and signed the building’s beams as a form of time
capsule for future generations to find.

10. San Carlos was long inhabited by the Ohlone people. In the late 1800s, settlers began to develop properties between Brittan Avenue and Pulgas Creek. Citizens of San Carlos finally voted to incorporate the city on July 1, 1925. In 2025, the City turns 100. The City hosted multiple community events celebrating the City’s centennial including a Centennial Luncheon at the Adult Community Center, Hometown Days,
Back to the 20’s Youth Center Dance, Incorporation Day
Birthday Party, and Centennial Wrapped Viewing Party
Source: Images of America – San Carlos; Veronico, Nicholas and Betty CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 66

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COMMUNITY SATISFACTION SURVEY – 2025 Results
The City of San Carlos’ mission is to provide “high-quality services, facilities, and events to its residents in an equitable, sustainable, transparent, responsive, and friendly manner to foster an inclusive, safe, and healthy community now and in the future.” To ensure the City is accomplishing this mission, the City conducts two different community surveys. The first type of survey, is a Citizen Opinion Survey, which is conducted every two years and serves as a performance measurement tool to understand residents’ needs and priorities and whether they are being met.

The second type of survey is the Community Characteristics Survey which was last conducted in 2024. The Community Characteristics Survey is designed to provide the City with a better understanding of the San Carlos community itself, including its priorities and lifestyles.

The 2025 Citizen Opinion Survey was conducted during the month of January 2025 with 680 respondents. The results of the survey are provided in a comprehensive report available at https://www.cityofsancarlos.org/community/community_surveys.php. The survey was conducted by True North Research, an experienced and quality team who has conducted these surveys for the City since 2012.

Some of the key results of the 2025 survey include:
• San Carlos residents continue to be satisfied with the City’s overall efforts to provide services and with the quality of life in San Carlos. When asked to rate the City’s overall performance in providing municipal services, 86% of residents surveyed indicated that they were satisfied with the City’s performance. Overall satisfaction has remained remarkably consistent for over a decade, ranging between 83% and 88%, since 2014. • The City’s performance providing municipal services has also contributed to a high quality of life for residents. 94% of residents surveyed rated the quality of the life in San Carlos as “excellent” or “good”, which is the highest level recorded since 2016. This sentiment was widespread, with nine in ten respondents in every identified resident subgroup rating the quality of life in San Carlos as “excellent” or “good”. • There were notable changes in community satisfaction with specific City services compared with 2023. Key improvements are highlighted below:
 The percentage of residents who stated that they are satisfied with the City’s efforts to maintain storm drains, sewers, and creeks increased to 84.9% in 2025 from 63.9% in 2023.
 The percentage of residents who stated that they are satisfied with City-provided resources and facilities available to residents during PG&E power shut-offs increased to 80.2% in 2025 from 64.9% in 2023.
 The percentage of residents who stated that they are satisfied with the City’s efforts at preserving community character and appearance through building and planning permits, inspections, and code enforcement increased to 80.7% in 2025 from 70.9% in 2023.
 The percentage of residents who stated that they are satisfied with how well the City of San Carlos listens to residents when making important decisions increased to 71.2% in 2025 from 62.6% in 2023.
 The percentage of residents who stated that they were satisfied with the City’s responsiveness to residents’ concerns increased to 76.7% in 2025 from 69.5% in 2023.

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• Per Figure 8 on page 14 of the 2025 Report, “Importance of Services,” 95% of respondents once again rated “providing fire protection, prevention, and emergency medical services as the most important service from a list of 23 services. More than 90% of respondents indicated the following services were “extremely important” or “very important”: providing safe streets (93%), maintaining storm drains, sewers, and creeks (93%), maintaining a low crime rate (92%), preparing the city for fire, police, and public works emergencies and disasters (92%), and providing trash collection and recycling services (90%). At the other end of the spectrum, providing more public parking downtown (36%) was viewed as the least important service among those tested.
• Per Table 3 on page 17 of the 2025 Report, “Satisfaction with Services by Study Year,” respondents expressed increases in satisfaction for 22 of the 23 service areas, with 10 of those increases being statistically significant.
• Per Figure 11 on page 22 of the 2025 Report, “Alternative Transportation Safety,” the majority of residents feel safe in each scenario, with 95% of residents who ride public transit reporting they feel safe while doing so (55% “very safe”) and 77% of bicyclists reporting feeling safe while riding on local streets (22% “very safe”), while 77% of respondents feel safe when walking across intersections, (29% saying “very safe”). • Per Figure 12 on page 23 of the 2025 Report, “Agreement with Statements About San Carlos,” 84% of residents said that they trust the City of San Carlos, 83% agreed that the City manages its finances well, and 77% felt the City is responsive to residents’ needs.

Per Table 6 on page 24, “Agreement with Statements About City by Study Year,” there was a higher level of agreement across all statements in 2025, with statistically significant increases over the 2023 levels recorded for listening to residents when making important decisions (+9%) and being responsive to the needs of residents (+7%). • Per Figure 19 on page 28 of the 2025 Report, “Satisfaction with Communication by Study Year,” 82% of respondents indicated they were satisfied with the City’s efforts to communicate with residents through electronic and print newsletters, social media, email, the City's website, and other means. The results for this question were statistically consistent with those recorded in 2023.
• Per Figure 27 on page 34 of the 2025 Report, “Funding Priorities,” the top five “high” or “medium” priorities according to respondents were fire protection services (97%), infrastructure maintenance and repair (95%), street maintenance and repair (93%), park and landscape maintenance (89%), and police services (85%). Recreation programs and services narrowly missed being a top five priority, coming in at number 6 with 81.3% of respondents ranking it as a top priority.

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CITY OF SAN CARLOS

FINANCIAL POLICIES
ADOPTED MAY 12, 2025
RESOLUTION: 2025-034
The following Financial Policies have been established to ensure that the City’s finances are managed in a manner that will:
• Continue to provide for the delivery of quality services; • Maintain and enhance service delivery as the community grows in accordance with the General Plan;
• Guarantee a balanced budget assuring that the City is always living within its means; and • Establish reserves necessary to meet known and unknown future obligations.

To achieve these goals, the following Financial Policies are presented that include General Policies; Revenue Policies; Cost of Service Policies; Reserves and Fund Balance Policies; Expenditure and Budget Policies; Capital Improvement Policies and Fixed Assets and Infrastructure Asset Policies.

A. GENERAL POLICIES
1) We will manage our financial assets in a sound and prudent manner. 2) We will maintain sound financial practices in accordance with State law. 3) We will direct the City’s financial resources toward meeting our long-term goals as identified by Council through the Strategic Planning and Team Building Retreat process. 4) We will manage and develop programs to ensure our long-term ability to pay all the costs necessary to provide the level and quality of service required by our citizens. 5) We will maintain accounting systems in conformance with generally accepted accounting principles. The financial records will be audited annually by an independent auditing firm.
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B. REVENUE POLICIES
1) We will strive to maintain a diversified and stable revenue base that is not overly dependent on any land use, major taxpayer, revenue type, restricted revenue, or external revenue. We will aggressively pursue revenue collection and auditing to assure that moneys due are accurately received in a timely manner. 2) We will seek Federal and State grants and reimbursements for costs whenever possible. 3) We will investigate potential new revenue sources.
4) We will work proactively with the League of California Cities and local communities to monitor legislation that may impact the City financially. 5) We will avoid targeting revenues for specific purposes whenever possible. 6) We will impose user fees when appropriate.
7) We will adopt a user fee policy that establishes desired levels of cost recovery and determines the minimum frequency of user fee reviews.
8) We will maintain and further develop methods to track major revenue sources and evaluate financial trends.
9) We will establish methods to maximize the accuracy of revenue forecasts. 10) Revenues will be estimated using accepted standards and estimates provided by the State and other governmental agencies.

C. COST OF SERVICES POLICIES
1) Fees and charges for services will be determined based on the total direct and indirect cost of the activity, including administrative overhead and depreciation, where applicable. In certain circumstances, it may be appropriate to subsidize fees, where full cost recovery may be unrealistic.
2) We will recover the costs of new facilities and infrastructure necessitated by development, consistent with State law.
3) We will consider requiring large developments to prepare a fiscal analysis that will measure the direct and indirect costs of the project, as well as the benefits to the City. 4) Managers should be aware of the cost of services and propose the most effective methodology for providing those services.

D. RESERVES AND FUND BALANCE POLICIES (per GASB 54)
1) We will work toward establishing, dedicating and maintaining reserves annually to meet known and estimated future obligations. The hierarchy followed to deplete these reserves is as follows: first unassigned fund balance will be depleted; second assigned fund balances will be depleted at the discretion of the City Manager; and lastly committed fund balances will be depleted in accordance with item 3a(ii) or 3b(ii) below, and formal action of the City Council.

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2) The Government Finance Officers Association (GFOA) has issued their best practice in determining the appropriate level of unrestricted fund balance in the General Fund to be at a minimum of no less than two months of regular general fund operating revenues or expenses which equates to approximately 17%. The GFOA definition of unrestricted fund balance includes three general categories: committed fund balance, assigned fund balance and unassigned fund balance. For the City’s purpose, we will include committed and assigned balances when reviewing the reserve percentages. The total of these two categories will be maintained at or above the GFOA best practice amount. 3) We will commit amounts of fund balance for specific purposes as determined by formal action of the City Council, which include but are not limited to committing fund balance reserves for the following:
a. Economic Uncertainties (as updated by Council June 10, 2024) i. General Fund committed fund balance 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.
ii. Once established, appropriations from the Economic Uncertainties fund balance commitment can only be made by formal action of the City Council.

Appropriations and access to these funds will be reserved for emergency situations and not to be used for ongoing expenditures. Emergency situations are further defined as catastrophic disasters as declared locally or by the state or federal government or budgeted revenue taken by another government entity.
b. Strategic Property Acquisitions (as approved by Council October 25, 2010) i. General Fund committed fund balance for Strategic Property Acquisitions accumulates funds from the proceeds of future sales of City properties, as directed by the City Manager or City Council.
ii. Once established, appropriations from the Strategic Property Acquisitions fund balance commitment can only be made by formal action of the City Council. Generally, appropriations and access to these funds will be reserved for funding strategic property acquisitions by the City. 4) We will assign amounts of fund balance for specific purposes as determined by City Manager recommendation, as delegated by formal action of the City Council, which include but are not limited to assigning fund balance reserves for the following:
a. Liability insurance.
b. Unfunded liabilities
c. Strategic Property Acquisition
d. State Budget Contingencies.
e. Undesignated litigation.
f. Replacement of facilities and infrastructure.
g. Continuing appropriations (encumbrances and projects carried over from a prior year to the new fiscal year).
h. Debt service for future debt obligations/payments.

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E. EXPENDITURE AND BUDGET POLICIES
1) The operating budget will be prepared to fund current year expenditures with current year revenue. Surplus fund balances may be used to increase fund balance reserves, fund Capital Improvement Projects or be carried forward to fund future years’ operating budgets when necessary to stabilize services and fund capital outlay. 2) We will assume normal inflationary growth in accordance with the consumer price index for operating expenses.
3) We will assume personnel costs based on current Memoranda of Understanding in effect at the time.
4) Any new or expanded programs will require identification of new funding sources and/or off-setting reductions in expenditures in other programs. 5) We will deliver service in the most cost effective manner. 6) The budget will state the objectives of each of the operating programs. 7) The budget will fully account for and apportion all costs, fees and General Fund transfers associated with Special Revenue and Enterprise Funds.
8) All budget transfers require the approval of the City Manager or designee. However, transfers of appropriations that increase the total appropriations of a fund must be approved by the City Council.
9) We will maintain a long-range fiscal perspective through the use of a biennial operating budget, a five-year capital improvement program and a ten-year financial forecast. 10) The biennial budget will be adopted by Resolution of the City Council by July 1st every other year.
11) A mid-cycle budget status report will be prepared and presented to the City Council in the spring of the first year of the budget that will include projections to year-end and any adjustments required for the second year of the biennial budget. 12) Staff will provide a written report to Council quarterly on the City’s General Fund revenues and expenditures.

F. CAPITAL IMPROVEMENT POLICIES
1) We will construct capital improvements in accordance with an adopted capital improvement program.
2) We will develop a five-year plan for capital improvements to be reviewed and, if necessary, updated as part of the budget process. Future capital expenditures will be projected for a five-year period based on changes in the community population, real estate development or replacement of infrastructure.
3) We will coordinate preparation of the Capital Improvement Budget with preparation of the Biennial Operating Budget. Future operating costs associated with new capital improvements will be projected and included in Operating Budget forecasts. 4) We will identify the estimated costs and potential funding sources for each proposed capital project before it is submitted to Council for approval. 5) We will attempt to determine the least costly financing method for all new projects.

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G. FIXED ASSET AND INFRASTRUCTURE ASSET POLICIES
1) We will capitalize all assets with a cost greater than $5,000 and a useful life of more than one year.
2) All fixed assets and infrastructure assets are assigned an asset number that is recorded in the fixed asset software. Where applicable, the asset number is affixed or tagged to the asset.
3) Infrastructure related capital projects will be capitalized as construction in progress until completed. Costs to be capitalized include direct costs such as labor, materials and transportation, indirect costs such as engineering and construction management and ancillary costs such as construction period interest.
4) Repairs and maintenance to infrastructure assets will generally not be subject to capitalization unless the repair extends the useful life of the asset. 5) A physical inventory process will be initiated by staff when appropriate.

In addition, the City has three other financial policies that are reviewed and approved separately by the City Council. The three other financial policies are:
1) Investment Policy – last adopted by the City Council on June 10, 2024 via Resolution 2024-059;
2) Debt Management Policy - last adopted by the City Council on May 22, 2023 via Resolution 2023-058; and
3) Debt Disclosure Procedure Policy - last adopted by the City Council on May 22, 2023 via Resolution 2023-058.

These policies can be found on our website in the following location:
https://www.cityofsancarlos.org/city_hall/departments_and_divisions/administrative_services/ finance/financial_reports_and_policies/index.php#outer-101.

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RESOLUTION NO. 2025 — 033

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

ADOPTING THE FINANCIAL POLICIES.

WHEREAS, the City of San Carlos has established Financial Policies to ensure that the City's finances are managed in a manner that will continue to provide for the delivery of quality services, maintain and enhance service delivery as the community grows in accordance with the General Plan, guarantee a two-year balanced budget, and establish reserves necessary to meet known and unknown future obligations; and
WHEREAS, the City Council last reviewed and updated the Financial Policies on June 10, 2023 part as of the adoption of the Fiscal Year (FY) 2023-25 Biennial Budget; and WHEREAS, the following changes are recommended:
1) Updating section 3.a. Economic Uncertainties in the attached Financial Policies (red-lined version) to bring the wording in line with resolution 2024-071 passed on June 10, 2024 which clarified the definition of an emergency for which the Economic Uncertainties reserve can be used, thereby classifying it as committed fund balance; 2) Removing the reference to Equipment Vehicle and Replacement reserves since this activity is now accounted for within its own internal service fund; 3) Adding unfunded liabilities and strategic property acquisition as possible purposes for which assignments of fund balance may be made. Staff recommend review of the financial polices as part of the biennial budget process.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council hereby adopts the City’s Financial Policies.
kek
1, City Clerk Crystal Mui, hereby certify the that 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 12" day of May 2025, by the following vote:

AYES, COUNCILMEMBERS: DUGAN, LAYTON, RAK, VENKATESH, MCDOWELL NOES, COUNCILMEMBERS: NONE
ABSENT, COUNCILMEMBERS: NONE
CITY CLERK of the City of San Carlos
APPROVED:

Ura ber
MAYOR of the City of San Carlos
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CITY OF SAN CARLOS

DEBT MANAGEMENT POLICY
ADOPTED MAY 22, 2023
RESOLUTION 2023-058
This Debt Management Policy (this “Policy”) establishes the parameters within which debt may be issued and administered by the City of San Carlos, the San Carlos Housing Authority and each other entity for which the City Council of the City serves as the governing body, other than the Successor Agency to the San Carlos Redevelopment Agency. The Successor Agency to the San Carlos Redevelopment Agency has adopted a separate debt management policy.

A. PURPOSE
The purpose of this Policy is to establish guidelines and parameters for the effective governance, management and administration of debt and other financing obligations issued by the City.

As used in this Policy, “City” shall mean the City of San Carlos and/or its related entities, as the context may require. As used in this Policy, “debt” shall be interpreted broadly to mean bonds, notes, certificates of participation, financing leases, or other financing obligations, but the use of such term in this Policy shall be solely for convenience and shall not be interpreted to characterize any such obligation as an indebtedness or debt within the meaning of any constitutional debt limitation where the substance and terms of the obligation comport with exceptions thereto. This Policy shall apply to all debt issued or sold to third party lenders or investors and does not pertain to City internal inter-fund borrowings or any employee benefit obligations.

B. BACKGROUND
The City and its related entities are committed to fiscal sustainability by employing long-term financial planning efforts, maintaining appropriate reserves levels and employing prudent practices in governance, management, budget administration and financial reporting.

Debt levels and their related annual costs are important long-term obligations that must be managed within available resources. A disciplined thoughtful approach to debt management includes policies that provide guidelines for the City and its related entities to manage their collective debt program in line with those resources. Therefore, the objective of this policy is to 77 10.c
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provide written guidelines and restrictions concerning the amount and type of debt and other financing obligations issued by the City and its related entities and the ongoing management of the debt portfolio.

This Policy is intended to improve the quality of decisions, assist with the determination of the structure of debt issuance, identify policy goals, and demonstrate a commitment to long-term financial planning, including a multi-year capital plan. Adherence to a local debt policy signals to rating agencies and the capital markets that a government is well managed and should meet its obligations in a timely manner.

C. CONDITIONS AND PURPOSES OF DEBT ISSUANCE

1. Acceptable Conditions for the Use of Debt
The City believes that prudent amounts of debt can be an equitable and costeffective means of financing major infrastructure and capital asset and project needs of the City. Debt will be considered to finance such projects if:
a) The project has been, or will be, included in the City’s capital improvement plan or has otherwise been coordinated with the City’s planning goals and objectives.
b) The project can be financed with debt not exceeding the term specified in Section E.1 of this Policy, to assure that long-term debt is not issued to finance projects with a short useful life.
c) It is the most cost-effective funding means available to the City, taking into account cash flow needs and other funding alternatives. d) It is fiscally prudent and meets the guidelines of this Policy. Any consideration of debt financing shall consider financial alternatives, including pay-as-you-go funding, proceeds derived from development or redevelopment of existing land and capital assets owned by the City, and use of existing or future cash reserves, or combinations thereof. e) The project to be financed will provide benefit to constituents over multiple years.

2. Acceptable Uses of Debt and Proceeds of Debt
The primary purpose of debt is to finance one of the following:
a) The City will consider long-term financing for the acquisition, substantial refurbishment, replacement, or expansion of capital assets (including but not limited to land improvements, infrastructure projects, equipment and water rights) for the following purposes:
i. Acquisition and or improvement of land, right-of-way or long-term easements.
ii. Acquisition of a capital asset with a useful life of three or more years.
iii. Construction or reconstruction of a facility.

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iv. Although not the primary purpose of the financing effort, project reimbursables that include project planning design, engineering and other preconstruction efforts; project-associated furniture fixtures and equipment; capitalized interest, original issue discount, underwriter’s discount, and other costs of issuance.
b) Refunding, refinancing, or restructuring debt (including without limitation the refinancing or advance funding of City pension obligations), subject to refunding objectives and parameters discussed in Section G.

3. Short-Term Debt
a) In the event of temporary shortfalls in cash flow for City operation costs due to timing of receipt of revenues and the lack of cash on hand to cover the temporary deficit, the City may consider interim or cash flow financing, such as anticipation notes. In compliance with applicable state law, any such notes shall be payable either (i) not later than the last day of the fiscal year in which it is issued, or (ii) during the fiscal year succeeding the fiscal year in which issued, but in no event later than 15 months after the date of issue, and only if such note is payable only from revenue received or accrued during the fiscal year in which it was issued.
b) Short-term debt may be used to finance short-lived capital projects, such as lease purchase financing or equipment.
c) Prior to issuance of any short-term debt, a reliable revenue source shall be identified for repayment of the debt.

4. Internal Control Procedures Concerning Use of Proceeds of Debt One of the City’s priorities in the management of debt is to assure that the proceeds of the debt will be directed to the intended use for which the debt has been issued.

In furtherance of this priority, the following procedures shall apply:
a) The Administrative Services Department – Finance Division (Finance Division) shall retain, for the applicable period specified in Section H.4. of this Policy, a copy of each annual report filed with the California Debt and Investment Advisory Commission (“CDIAC”) pursuant to Section 8855(k) of the California Government Code concerning (1) debt authorized during the applicable reporting period (whether issued or not), (2) debt outstanding during the reporting period, and (3) the use during the reporting period of proceeds of issued debt.
b) In connection with the preparation of each annual report to be filed with CDIAC pursuant to Section 8855(k) of the California Government Code, the Finance Division shall keep a record of the original intended use for which the debt has been issued, and indicate whether the proceeds spent during the applicable one-year reporting period for such annual report comport with the intended use (at the time of original issuance or as modified pursuant to the following sentence). If a change in intended use has been authorized subsequent to the original issuance of the debt, the CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 79

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Finance Division shall indicate in the record when the change in use was authorized and whether the City Council, City Manager, or another City official has authorized the change in intended use. The Administrative Services Director or his or her designee shall report apparent deviations from the intended use in debt proceeds to the City Manager for further discussion, and if the City Manager determines appropriate in consultation with legal counsel (which may be bond counsel, if applicable, or the City Attorney), to the City Council.
c) If the debt has been issued to finance a capital project and the project timeline or scope of project has changed in a way that all or a portion of the debt proceeds cannot be expended on the original project, the Administrative Services Director shall consult with the City Manager and legal counsel (which may be bond counsel, if applicable, or the City Attorney) as to available alternatives for the expenditure of the remaining debt proceeds (including prepayment of the debt).
d) Financings on behalf of other entities - The City may also find it beneficial to issue debt on behalf of other governmental agencies, such as Silicon Valley Clean Water (SVCW), to further the public purposes of the City. In such cases, the City shall take reasonable steps to confirm the financial feasibility of the project to be financed and the financial solvency of any borrower and that the issuance of such debt is consistent with the policies set forth herein.

D. TYPE OF FINANCING INSTRUMENTS; AFFORDABILITY AND PLANNING POLICIES The City recognizes that there are numerous types of financing structures and funding sources available, each with specific benefits, risks, and costs. All potential funding sources are reviewed by management within the context of this Policy and the overall portfolio to ensure that any financial product or structure is consistent with the City’s objectives. Regardless of what financing structure(s) is utilized, due diligence review must be performed for each transaction, including the quantification of potential risks and benefits, and analysis of the impact on City creditworthiness and debt affordability and capacity.

Prior to the issuance of debt or other financing obligations to finance a project, the City will carefully consider the overall long-term affordability of the proposed debt issuance. The City shall not assume more debt or other financing obligations without conducting an objective analysis of the City’s ability to assume and support additional debt service payments. The City will consider its long-term revenue and expenditure trends, the impact on operational flexibility and the overall debt burden on the taxpayers. The evaluation process shall include a review of generally accepted measures of affordability and will strive to achieve and or maintain debt levels consistent with its current operating and capital needs.

1. General Fund-Supported Debt – General Fund Supported Debt generally include Certificates of Participation (“COPs”) and Lease Revenue Bonds (“LRBs”) which are lease obligations that are secured by an installment sale or by a lease-back arrangement between the City and another public entity. Typically, the City appropriates available General Fund moneys to pay the lease payments to the other public entity and, in turn, the public entity uses such lease payments received to pay debt service on the bonds or Certificates of Participation.

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General Fund Supported Debt may also include bonds issued to refund obligations imposed by law, such as judgments (judgment obligation bonds (“JOBs”)) or unfunded accrued actuarial liabilities for pension plans (pension obligation bonds (“POBs”)).

These obligations do not constitute indebtedness under the state constitutional debt limitation and, therefore, are not subject to voter approval.

Payments to be made under valid leases are payable only in the year in which use and occupancy of the leased property is available, and lease payments may not be accelerated. Lease financing requires the fair market rental value of the leased property to be equal to or greater than the required debt service or lease payment schedule. The lessee (the City) is obligated to include in its Annual Budget and appropriate the rental payments that are due and payable during each fiscal year the lessee has use of the leased property.

The City should strive to maintain its net General Fund-backed annual debt service at or less than [8%] of available annually budgeted revenue. This ratio is defined as the City’s annual debt service requirements on General Fund Supported Debt (including, but not limited to, COPs, LRBs, JOBs, and POBs) compared to total annual General Fund Revenues net of inter-fund transfers out.

2. Revenue Bonds – Long-term obligations payable solely from specific special fund sources, in general, are not subject to a debt limitation. Examples of such longterm obligations include those which are payable from a special fund consisting of restricted revenues or user fees (Enterprise Revenues) and revenues derived from the system of which the project being funded is a part.

In determining the affordability of proposed revenue bonds, the City will perform an analysis comparing projected annual net revenues (exclusive of depreciation which is a non-cash related expense) to estimated annual debt service. The City should strive to maintain a coverage ratio of 110% (or such higher coverage ratio included in the City’s existing financing documents), using historical and/or projected net revenues to cover annual debt service for bonds. To the extent necessary, the City shall undertake proceedings for a rate increase to cover both operations and debt service costs, and create debt service reserve funds to maintain the required coverage ratio.

The City may enter into agreements and other long-term obligations supporting revenue bonds issued by joint powers authorities of whom the City is a member, including, for example, Silicon Valley Clean Water (SVCW) and South Bayside Waste Management Authority (SBWMA).

3. Special Districts Financing – Special districts primarily consist of Community Facilities Districts (“CFDs”) and 1913/1915 Act Assessment Districts (“Assessment Districts”). The City will consider requests for special district formation and debt issuance when such requests address a public need or provide a public benefit.

Each application will be considered on a case by case basis, and the Finance Department may not recommend a financing if it is determined that the financing could be detrimental to the debt position or the best interests of the City.

4. General Obligation Bonds – Notwithstanding their name, General Obligation Bonds are not general obligations of the City, but instead they are payable from CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 81

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and secured by a dedicated, voter-approved property tax override rate (i.e., a property tax in excess of the 1% basic ad valorem property tax rate which has received the approving two-thirds vote of the City’s electorate). While the dedicated revenue stream to repay the debt makes General Obligation Bonds an attractive option, additional considerations for this financing mechanism include the time and expense of an election, the possibility that the electorate will not approve the ballot measure, and the legal bonding capacity limit of the assessed value of all taxable property within the City. (At the time of the adoption of this Policy, the legal bonding capacity limit for a California general law city is 3.75% of the assessed value of all taxable property within the City.)

5. Tax Increment Financing – Tax increment financing is a financing method whereby a portion of ad valorem property taxes (commonly called the “tax increment”) that are allocated to an entity, such as a successor agency to redevelopment agency (Successor Agency), an enhanced infrastructure financing district (“EIFD”), a community revitalization and investment authority (CRIA) or an infrastructure and revitalization financing district (“IRFD”), and the entity is permitted to incur debt payable from and secured by the tax increment revenues.

While tax increment debt for redevelopment agencies and Successor Agencies is entitled to the benefits of Article XVI, Section 16, of the California Constitution, no similar provision exists for EIFDs, CRIAs and IRFDs at the time of adoption of this Policy. Therefore, when considering EIFD, CRIA or IRFD financing, or other types of tax increment financing which may be permitted by law in the future, debt limit concerns should be analyzed with respect to the proposed structure and taken into account in determining the practical viability of the proposed financing.

6. Conduit Debt – Conduit financing provides for the issuance of securities by a government agency to finance a project of a third party, such as a non-profit organization or other private entity. The City may sponsor conduit financings for those activities that have a general public purpose and are consistent with the City’s overall service and policy objectives. Unless a compelling public policy rationale exists, such conduit financings will not in any way pledge the City’s faith and credit.

7. Short-Term and Other Debt – Tax and revenue anticipation notes, bond or grant anticipation notes, etc.

E. STRUCTURE OF DEBT

1. Term of Debt – In keeping with Internal Revenue Service regulations for taxexempt financing obligations, the weighted average maturity of the debt should not exceed 120 percent of the weighted average economic life of the facilities or projects to be financed, unless specific circumstances exist that would mitigate the extension of time to repay the debt and it would not cause the City to violate any covenants to maintain the tax-exempt status of such debt, if applicable.

2. Rapidity of Debt Payment; Level Payment – To the extent practical, bonds will be amortized on a level repayment basis, and revenue bonds will be amortized on a level repayment basis considering the forecasted available pledged revenues to achieve the lowest rates possible. Bond repayments should not increase on an annual basis in excess of 2% without a dedicated and supporting revenue funding stream.

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Accelerated repayment schedules reduce debt burden faster and reduce total borrowing costs. The Administrative Services Department will amortize debt through the most financially advantageous debt structure and to the extent possible, match the City’s projected cash flow to the anticipated debt service payments. “Backloading” of debt service will be considered only when one or more of the following occur:
a) Natural disasters or extraordinary or unanticipated external factors make payments on the debt in early years prohibitive.
b) The benefits derived from the debt issuance can clearly be demonstrated to be greater in the future than in the present.
c) Such structuring is beneficial to the aggregate overall debt payment schedule or achieves measurable interest savings.
d) Such structuring will allow debt service to more closely match projected revenues, whether due to lower project revenues during the early years of the project’s operation, inflation escalators in the enterprise user rates, or other quantifiable reasons.

3. Serial Bonds, Term Bonds, and Capital Appreciation Bonds – For each issuance, the City will select serial bonds or term bonds, or both. On the occasions where circumstances warrant, Capital Appreciation Bonds (CABs) may be used.

The decision to use term, serial, or CAB bonds is driven based on market conditions.

4. Reserve Funds – To the extent that the use of available City moneys to fund a reserve fund provides an economic benefit that offsets the cost of financing the reserve fund from bond proceeds (as determined by the Administrative Services Director in consultation with the City’s municipal advisor and, if applicable, the underwriter for the bonds), the City may use legally permitted moneys to fund a reserve fund (in cash or through the purchase of a debt service reserve surety bond or insurance policy) for the proposed bonds, up to the maximum amount permitted by applicable law or regulation. Typically, this amount is equal to the least of: (i) maximum annual debt service on the bonds, (ii) 10% of the principal amount of the bonds (or 10% of the sale proceeds of the bonds, within the meaning of Section 148 of the federal Internal Revenue Code), or (iii) 125% of average annual debt service on the bonds.

F. USE OF ALTERNATIVE DEBT INSTRUMENTS
Alternative debt instruments and financing structures sometimes can provide a lower cost of borrowing in the short run, but may involve greater medium-term or long-term risk. Due diligence review must be performed for each transaction, including the quantification of potential risks and benefits, analysis of the impact on City creditworthiness and debt affordability and capacity, and an evaluation of the ability of the City to withstand the medium-term or long-term risk attendant to alternative debt instruments, including the feasibility of exit strategies.

1. Variable Rate Debt
Variable rate debt affords the City the potential to achieve a lower cost debt depending on market conditions. However, the City will not seek the use of variable-rate debt due to the potential risks of such instruments.

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2. Derivatives
The City will not use derivative products for any transaction, nor will the City allow any financing structure to create current or future exposure to the risks of derivatives.

G. REFUNDING GUIDELINES
The Administrative Services Director shall monitor all outstanding City debt obligations for potential refinancing opportunities. The City will consider refinancing of outstanding debt to achieve annual savings or to refinance a bullet payment or spike in debt service. Except for instances in which a bullet payment or spike in debt service is being refinanced, absent a compelling reason or financial benefit to the City, any refinancing should not result in an increase to the weighted average life of the refinanced debt.

Except for instances in which a bullet payment or spike in debt service is being refinanced, the City will generally seek to achieve debt service savings which, on a net present value basis, are at least 3% of the debt being refinanced. The net present value assessment shall factor in all costs, including issuance, escrow, and foregone interest earnings of any contributed funds on hand. Any potential refinancing shall additionally consider whether an alternative refinancing opportunity with higher savings is reasonably expected in the future. Refundings which produce a net present value savings of less than 3% will be considered on a case-by-case basis.

H. MARKET COMMUNICATION, ADMINISTRATION, AND REPORTING

1. Rating Agency Relations and Annual or Ongoing Surveillance – The Administrative Services Director shall be responsible for maintaining the City’s relationships with S&P Global Ratings, Fitch Ratings and Moody’s Investors Service, as applicable. These agencies’ rating criteria often change and the City cannot control the decisions made by any rating agency. However, for each debt issue that the City will seek a rating assignment, the City will strive to obtain and maintain the highest possible underlying, uninsured rating. In addition to general communication, the Administrative Services Director shall:
a) Ensure the rating agencies are provided updated financial statements of the City as they become publicly available.
b) Communicate with credit analysts at each agency as may be requested by the agencies.
c) Prior to each proposed new debt issuance, schedule meetings or conference calls with agency analysts and provide a thorough update on the City’s financial position, including the impacts of the proposed debt issuance.

2. Council Communication – The Administrative Services Director should report feedback from rating agencies, when and if available, regarding the City’s financial strengths and weaknesses and areas of concern relating to weaknesses as they pertain to maintaining the City’s existing credit ratings.

3. Continuing Disclosure Compliance – The City shall remain in compliance with Rule 15c2-12, promulgated by the Securities and Exchange Commission under CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 84

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the Securities Exchange Act of 1934, by filing (to the extent required by the applicable continuing disclosure undertaking) its annual financial statements and other financial and operating data for the benefit of its bondholders within 270 days of the close of the fiscal year, or by such other annual deadline required in any continuing disclosure agreement or certificate for any debt issue. The City shall maintain a log or file evidencing that all continuing disclosure filings have been made promptly.

4. Debt Issue Record-Keeping – A copy of all debt-related records shall be retained at the City’s offices. At minimum, these records shall include all official statements, bond legal documents/transcripts, resolutions, trustee statements, leases, and title reports for each City financing (to the extent available).

Such records shall be retained while any bonds of an issue are outstanding and during the three-year period following the final maturity or redemption of the bond issue or, if later, while any bonds that refund bonds of that original issue are outstanding and for the three year period following the final maturity or redemption date of the latest refunding bond issue.

5. Arbitrage Rebate – The use of bond proceeds and their investments must be monitored to ensure compliance with all arbitrage rebate requirements of the Internal Revenue Code and related Internal Revenue Service regulations, in keeping with the covenants of the City and/or related entity in the tax certificate for any federally tax-exempt financing. The Administrative Services Director shall ensure that all bond proceeds and investments are tracked in a manner which facilitates accurate calculation; and, if a rebate payment is due, such payment is made in a timely manner.

I. CREDIT RATINGS
The City will consider published ratings agency guidelines regarding best financial practices and guidelines for structuring its capital funding and debt strategies to maintain the highest possible credit ratings consistent with its current operating and capital needs.

J. SB 1029 COMPLIANCE
Senate Bill 1029, signed by Governor Brown on September 12, 2016, and enacted as Chapter 307, Statutes of 2016, requires issuers to adopt debt policies addressing each of the five items below:
i. The purposes for which the debt proceeds may be used.

Section C.2 (Acceptable Uses of Debt and Proceeds of Debt) and Section C.3 (Prohibited Use of Debt and Proceeds of Debt) address the purposes for which debt proceeds may be used.
ii. The types of debt that may be issued.

Section C.3 (Short-Term Debt), Section D (Types of Financing Instruments; Affordable and Planning Policies), Section E (Structure of Debt) and Section F (Use of Alternative Debt Instruments) are among the provisions that provide information regarding the types of debt that may be issued.

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iii. The relationship of the debt to, and integration with, the issuer's capital improvement program or budget, if applicable.

Section C.1 (Acceptable Conditions for the Use of Debt) provides information regarding the relationship between the City's debt and Capital Improvement Program.
iv. Policy goals related to the issuer's planning goals and objectives.

As described in Section B (BACKGROUND), Section D (TYPES OF FINANCING; AFFORDABILITY AND PLANNING POLICIES) and other sections, this Policy has been adopted to assist with the City’s goal of maintaining fiscal sustainability and financial prudence.
v. The internal control procedures that the issuer has implemented, or will implement, to ensure that the proceeds of the proposed debt issuance will be directed to the intended use.

Section 4 (Internal Control Procedures Concerning Use of Proceeds of Debt) provides information regarding the City's internal control procedures designed to ensure that the proceeds of its debt issues are spent as intended.

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CITY OF SAN CARLOS AND THE SAN CARLOS SUCCESSOR AGENCY
Debt Disclosure Procedure Policy
APPLICABLE CODES AND REGULATIONS:

Section 17 of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934, and regulations adopted by the Securities and Exchange Commission (“SEC”) under those acts, particularly “Rule 10b-5” under the 1934 Act.

PURPOSE:

These Debt Disclosure Procedures (the “Procedures”) memorialize and communicate procedures in connection with obligations, including notes, bonds, loans and other debt obligations, issued by or on behalf of the City of San Carlos and the San Carlos Successor Agency (the “City”), or for which the City supplies material information to potential purchasers of the obligations (such as bonds for Silicon Valley Clean Water), so as to ensure that the City continues to comply with all applicable disclosure obligations and requirements under the federal securities laws.

BACKGROUND:

The City may from time to time issue revenue bonds, notes, loans or other debt obligations or supply material information to potential purchasers of bonds, notes, loans or other debt obligations issued by other entities (such as Silicon Valley Clean Water) (collectively, “Obligations”) in order to fund or refund capital investments, other long-term programs and working capital needs. In offering Obligations to the public, and at other times when the City makes certain reports, the City must comply with the “anti-fraud rules” of federal securities laws. (“Anti-fraud rules” refers to Section 17 of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934, and regulations adopted by the Securities and Exchange Commission under those acts, particularly “Rule 10b-5” under the 1934 Act.)
The core requirement of these rules is that potential investors in Obligations must be provided with all “material” information relating to the offered Obligations. The information provided to investors must not contain any material misstatements, and or omit material information that would be necessary to provide to investors a complete and transparent description of the Obligations and the City’s financial condition. In the context of the sale of securities, a fact is generally considered to be “material” if there is a substantial likelihood that a reasonable investor would consider it to be important in determining whether or not to purchase the securities being offered.

When Obligations are issued to the public, the two central disclosure documents that are prepared are a preliminary official statement (“POS”) and a final official statement (“OS”, and collectively with the POS, “Official Statement”). The Official Statement generally consists of: (i) the forepart that describes the specific transaction including maturity dates, interest rates, redemption provisions, the specific type of financing, the project and other matters particular to the financing; (ii) a section that provides information on the City (the “City Section”); and (iii) various other appendices, including the City’s audited financial report, form of the proposed legal opinion and forms of continuing disclosure undertakings of the City. Investors use the Official Statement as one of their primary resources for making informed investment decisions regarding the Obligations.

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DISCLOSURE PROCEDURE:

When the City determines to issue Obligations (or participate in an offering of Obligations being undertaken by another entity), the City Manager requests the involved departments to commence preparation of the portions of the Official Statement (including particularly the City Section) for which they are responsible. While the general format and content of the Official Statement may not normally change substantially from offering to offering, except as necessary to reflect major events, the City Manager and other relevant City staff are responsible for reviewing and preparing or updating the portion of the Official Statement that is within their particular areas of knowledge.

Once the draft POS has been substantially updated, the entire draft POS is shared with the City Council for review and input before approval.

Members of the financing team, including Bond and Disclosure Counsel and a municipal advisor (the “Municipal Advisor”), assist staff in determining the materiality of any particular item and in the development of specific language in the City Section. Members of the financing team also assist the City in the development of a “big picture” overview of the City’s financial condition, included in the City Section. This overview highlights particular areas of interest. Bond and Disclosure Counsel has a confidential, attorney-client relationship with officials and staff of the City.

The City Manager, Administrative Services Director, or a member of the financing team at the direction thereof, schedules one or more meetings or conference calls with the financing team (which may include City officials, City Attorney, Bond and Disclosure Counsel, the City’s Municipal Advisor (and the underwriters of the Obligations, and the underwriters’ counsel, if the proposed financing is being undertaken as a negotiated transaction)). New drafts of the forepart of the draft POS and the City Section are then circulated and discussed. Such communications may occur via electronic means rather than by meetings or conference calls. During this part of the process, there is substantial contact among City staff and other members of the financing team to discuss issues that may arise, determine the materiality of particular items and ascertain the prominence in which the items should be disclosed.

Prior to distributing a POS to potential investors, there is typically a formal conference call with City officials involved in the preparation of the POS and members of the financing team (and the underwriters and the underwriters’ counsel, if the financing is a negotiated transaction) during which the POS is reviewed in its entirety to obtain final comments and to allow the underwriters (if the proposed financing is being undertaken as a negotiated transaction), to ask questions of the City’s senior officials. This is referred to as a “due diligence” meeting.

A substantially final form of the POS is provided to the members of the City Council in advance of approval to afford such members an opportunity to review the POS, ask questions and make comments. The substantially final form of the POS is approved by the City Council, which generally authorizes certain senior staff to make additional corrections, changes and updates to the POS in consultation with the City Attorney and Bond and Disclosure Counsel.

At the time the POS is posted for review by potential investors, senior City officials execute certificates deeming certain portions of the POS complete (except for certain pricing terms) as required by SEC Rule 15c2-12.

Between the posting of the POS for review by potential investors and delivery of the final OS to the underwriter for redelivery to actual investors in the Obligations, any changes and developments will have been incorporated into the POS, including particularly the City Section, if CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 88

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required. If necessary, to reflect developments following publication of the POS or OS, as applicable, supplements will be prepared and published.

In connection with the closing of the transaction, one or more senior City officials execute certificates stating that certain portions of the OS, as of the date of each OS and as of the date of closing, do not contain any untrue statement of material fact or omit to state any material fact necessary to ensure the statements contained in the OS, in light of the circumstances under which they were made, are not misleading. The City Attorney also provides an opinion letter (generally addressed to the underwriters) advising that information contained in the City Section, as applicable (or specified portions thereof) as of its date did not, and as of the date of the closing, does not contain any untrue statement of a material fact or omitted or omits to state any material fact necessary to ensure the statements therein, in light of the circumstances under which they were made, are not misleading. The City Attorney does not opine to the underwriters or to other third parties as to any financial, statistical, economic or demographic data or forecasts, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion and certain other matters that are customarily excluded. Bond and Disclosure Counsel also provides a negative assurance letter (addressed to the underwriters) with respect to the City Section. Bond and Disclosure Counsel does not give negative assurances to the underwriters or to other third parties as to any financial, statistical, economic or demographic data or forecasts, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, or information contained in appendices to the OS and certain other matters that are customarily excluded.

CITY SECTION:

The information contained in the City Section is developed by personnel under the direction of the City Manager, with the assistance of the financing team. In certain circumstances, additional officials will be involved, as necessary. The following principles govern the work of the respective staff that contribute information to the City Section:
• City staff members involved in the disclosure process are responsible for being familiar with their responsibilities under federal securities laws as described above. • City staff involved in the disclosure process should err on the side of raising issues when preparing or reviewing information for disclosure. Officials and staff are encouraged to consult the City Attorney and Bond and Disclosure Counsel if there are questions regarding whether an issue is material or not.
• Care should be taken not to shortcut or eliminate any steps outlined in the Procedures on an ad hoc basis. However, the Procedures are not necessarily intended to be a rigid list of procedural requirements, but instead to provide guidelines for disclosure review. If warranted, based on experience during financings or because of additional SEC pronouncements or other reasons, the City should consider revisions to the Procedures. • The process of updating the City Section from transaction to transaction should not be viewed as being limited to updating tables and numerical information. While it is not anticipated that there will be major changes in the form and content of the City Section at the time of each update, everyone involved in the process should consider the need for revisions in the form, content and tone of the sections for which they are responsible at the time of each update.
• The City must make sure that the staff involved in the disclosure process is of sufficient seniority such that it is reasonable to believe that, collectively, they are in possession of material information relating to the City, its operations and its finances.

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TRAINING:

Periodic training for City staff involved in the preparation of the Official Statement (including the City Section) is coordinated by the finance team and/or the Administrative Services Director.

These training sessions are provided to assist staff members involved in identifying relevant disclosure information to be included in the City Section. The training sessions also provide an overview of federal laws relating to disclosure, situations in which disclosure rules apply, the purpose of the Official Statement and the City Section, a description of previous SEC enforcement actions and a discussion of recent developments in the area of municipal disclosure. Attendees at the training sessions are provided the opportunity to ask questions of finance team members, including the City Attorney, concerning disclosure obligations and are encouraged to contact members of the finance team at any time if they have questions.

CONTINUING DISCLOSURE REQUIREMENTS:

In connection with the issuance or execution and delivery of Obligations, the City has entered into (and may in the future enter into) contractual agreements (“Continuing Disclosure Certificates”) to provide its audited financial statements and notice of certain events relating to the Obligations specified in the Continuing Disclosure Certificates. The City must comply with the specific requirements of each Continuing Disclosure Certificate. The City’s Continuing Disclosure Certificates generally require that the annual reports be filed no later than nine months after the end of the City’s fiscal year (currently March 31 of each year, based on a fiscal year ending on June 30), and listed event notices are generally required to be filed within 10 business days of their occurrence.

Specific events that require “listed event” notices are set forth in each particular Continuing Disclosure Certificate. The SEC adopted amendments to SEC Rule 15c2-12, effective February 27, 2019, adding two new listed events, as detailed in Exhibit A attached hereto. Importantly, these new events apply only to Continuing Disclosure Certificates entered into by the City after the February 27, 2019 effective date of the amendments.

The City shall be responsible for preparing and filing the annual reports and listed event notices required pursuant to the Continuing Disclosure Certificates. Particular care shall be paid to the timely filing of any changes in credit ratings on Obligations (including changes in the credit ratings of insurers of particular Obligations).

In addition, the City Attorney, City Manager, or other City staff will provide written notice to the Administrative Services Director of any default, event of acceleration, termination event, modification of terms (only if material or may reflect financial difficulties), or other similar events (collectively, a “Potentially Reportable Event”) under any agreement or obligation to which the City is a party and that may be a “financial obligation” as discussed below. Such written notice should be provided by the City Attorney to the Administrative Services Director as soon as the City Attorney receives written notice by staff, consultants, or external parties of such event or receives written notice of such event so that the Administrative Services Director can determine, with the assistance of Disclosure Counsel, whether notice of such Potentially Reportable Event is required to be filed on the Electronic Municipal Market Access (EMMA) portal pursuant to the disclosure requirements of SEC Rule 15c2-12. If filing on EMMA is required, the filing is due within 10 business days of such Potentially Reportable Event to comply with the continuing disclosure undertaking for the various debt obligations of the City. As noted above, the new reporting CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 90

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obligations apply only to Continuing Disclosure Certificates entered into by the City after the February 27, 2019 effective date of the amendments to SEC Rule 15c2-12.

For the City’s obligations and for those that the City partakes, the City Attorney, City Manager, or other City staff will report to the Administrative Services Director the execution by the City of any agreement or other obligation that might constitute a “financial obligation” for purposes of SEC Rule 15c2-12 and that is entered into after February 27, 2019. Amendments to existing agreements or obligations with “financial obligation” that relate to covenants, events of default, remedies, priority rights, or other similar terms should be reported to the Administrative Services Director as soon as the City Attorney or such other senior staff is receives written notice by City staff, consultants, or external parties of such event or receives a written notice of such amendment requests. Notice to the Administrative Services Director is necessary so that the Administrative Services Director can determine, with the assistance of Disclosure Counsel, whether such agreement or other obligation constitutes a material “financial obligation” for purposes of SEC Rule 15c2-12. If such agreement or other obligation is determined to be a material “financial obligation” or a material amendment to a “financial obligation” described above, notice thereof would be required to be filed on EMMA within 10 business days of execution or incurrence. As noted above, the new reporting obligations apply only to Continuing Disclosure Certificates entered into by the City after the February 27, 2019 effective date of the amendments to SEC Rule 15c2-12.

The types of agreements or other obligations that could constitute “financial obligations” and that could need to be reported on EMMA are discussed in the memorandum from Jones Hall, which serves as Bond and disclosure Counsel to the City and the San Carlos Successor Agency, as well as Silicon Valley Clean Water, which is attached hereto as Exhibit B.

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Exhibit A
Listed Events in SEC Rule 15c2-12
The Administrative Services Director or his or her delegate should review this list routinely to determine whether any event has occurred that may require a filing with EMMA.

For securities subject to SEC Rule 15c2-12, the following events require notice in a timely manner not in excess of ten (10) business days after the occurrence of the event with respect to the applicable securities:

1. Principal and interest payment delinquencies;

2. Non-payment related defaults, if material;

3. Unscheduled draws on debt service reserves reflecting financial difficulties;

4. Unscheduled draws on credit enhancements reflecting financial difficulties;

5. Substitution of credit or liquidity providers, or their failure to perform;

6. Adverse tax opinions, the issuance by the Internal Revenue Service (I.R.S). of proposed or final determinations of taxability, Notices of Proposed Issue or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security;

7. Modifications to rights of security holders, if material;

8. Bond calls, if material, and tender offers;

9. Defeasances;

10. Release, substitution, or sale of property securing repayment of the securities, if material

11. Rating changes;

12. Bankruptcy, insolvency, receivership or similar event of the obligated person;

13. Consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and

14. Appointment of a successor or additional trustee or the change of name of a trustee, if material.

For continuing disclosure undertakings entered into on or after February 27, 2019, the following events require notice in a timely manner not in excess of ten (10) business days after the occurrence of the event with respect to the applicable securities:

1. Incurrence of a financial obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect security holders, if material; and CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027
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2. Default, event of acceleration, termination event, modification of terms, or other similar event under the terms of a financial obligation of the obligated person, any of which reflect financial difficulties.

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CITY OF SAN CARLOS

INVESTMENT POLICY
Last Adopted by Council: May 12, 2025
Resolution No. 2025-034
POLICY
In accordance with the Municipal Code of the City of San Carlos and under authority granted by the City Council, the City Administrative Services Director is responsible for investing the unexpended cash in the City Treasury.

The investment of the funds of the City of San Carlos is directed to the goals of safety, liquidity and yield. The authority governing investments for municipal governments is set forth in the California Government Code, Sections 53600 through 53686.

The primary objective of the investment policy of the City of San Carlos is Safety of Principal.

Investments shall be placed in those securities as outlined by type and maturity sector in this document. Effective cash flow management and resulting cash investment practices are recognized as essential to good fiscal management and control. The City's portfolio shall be designed and managed in a manner responsive to the public trust and consistent with state and local law. Portfolio management requires continual analysis and as a result the balance between the various investments and maturities may change in order to give the City of San Carlos the optimum combination of necessary liquidity and optimal yield based on cash flow projections.

SCOPE
The investment policy applies to all financial assets of the City of San Carlos as accounted for in the Annual Comprehensive Financial Report (ACFR). Policy statements outlined in this document focus on the City of San Carlos' pooled funds, but will also apply to all other funds under the City Administrative Services Director's span of control unless specifically exempted by statue or ordinance. This policy is applicable, but not limited to all funds listed below:
•General Fund •Sewer Fund •Capital Funds •Other Special Revenue Funds, Debt Service Funds, Internal Service Funds •Trust and Custodial Funds •Peninsula Traffic Congestion Relief Alliance (Commute.org) •City and County Association of Governments of San Mateo County (C/CAG) •Any new fund created by the City Council unless specifically exempted.

PRUDENCE
The standard to be used by investment officials shall be that of a "prudent investor" and shall be applied in the context of managing all aspects of the overall portfolio. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like 97 10.c
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character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.

It is the City's full intent, at the time of purchase, to hold all investments until maturity to ensure the return of all invested principal dollars. However, it is realized that market prices of securities will vary depending on economic and interest rate conditions at any point in time. It is further recognized that in a well-diversified investment portfolio, occasional measured losses are inevitable due to economic, bond market or individual security credit analysis. These occasional losses must be considered within the context of the overall investment program objectives and the resultant longterm rate of return.

The City Administrative Services Director and other individuals assigned to manage the investment portfolio, acting within the intent and scope of the investment policy and other written procedures and exercising due diligence, shall be relieved of personal responsibility and liability for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely manner and appropriate action is taken to control adverse developments.

OBJECTIVES
Safety of Principal
Safety of Principal is the foremost objective of the City of San Carlos. Each investment transaction shall seek to ensure that capital losses are avoided, whether from securities default, broker-dealer default or erosion of market value. The City shall seek to preserve principal by mitigating the two types of risk: credit risk and market risk.

Credit risk, defined as the risk of loss due to failure of the issuer of a security, shall be mitigated by investing in investment grade securities and by diversifying the investment portfolio so that the failure of any one issuer does not unduly harm the City's capital base and cash flow.

Market risk, defined as market value fluctuations due to overall changes in the general level of interest rates, shall be mitigated by limiting the average maturity of the City's investment portfolio to two years, the maximum maturity of any one security to five years, structuring the portfolio based on historic and current cash flow analysis eliminating the need to sell securities prior to maturity and avoiding the purchase of long term securities for the sole purpose of short term speculation.

Liquidity
Historical cash flow trends are compared to current cash flow requirements on an ongoing basis in an effort to ensure that the City's investment portfolio will remain sufficiently liquid to enable the City to meet all reasonably anticipated operating requirements.

Maturity Matrix
Maturities of investments will be selected based on liquidity requirements to minimize interest rate risk and maximize earnings. Current and expected yield curve analysis will be monitored and the portfolio will be invested accordingly. The weighted average maturity of the pooled portfolio should not exceed two years and the following percentages of the portfolio should be invested in the following maturity sectors:

Maturity Range Suggested Percentage
1 day to 7 days 10 to 50%
7 days to 180 10 to 30%
180 days to 360 days 10 to 30%
1 year to 2 years 10 to 20%
2 years to 3 years 0 to 20%
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3 years to 4 years 0 to 20%
4 years to 5 years 0 to 20%
Over 5 years Council Authorization Required *
* One exception does exist regarding the investment of bond reserve funds. If in the opinion of the City Administrative Services Director, matching the segregated investment portfolio of the bond reserve fund with the maturity schedule of an individual bond issue is prudent given current economic analysis, the investment policy authorizes extending beyond the five-year maturity limitation as outlined in this document.

PERFORMANCE EVALUATION
Investment performance is monitored and evaluated by the City Investment Advisory Committee.

Investment performance statistics and activity reports are generated on a quarterly basis for presentation to the City Investment Advisory Committee and to the City Council. Annually, a statement of investment policy, and any proposed changes to the policy, will be rendered to the Investment Advisory Committee and then to the City Council for consideration at a public meeting.

The City’s investment portfolio is designed to at least attain a market average rate of return through economic cycles. The market average rate of return is defined as average return on the Local Agency Investment Fund (assuming the State does not adversely affect LAIF’s returns due to budget constraints).

DELEGATION OF AUTHORITY
The Municipal Code of the City of San Carlos and the authority granted by City Council assign the responsibility of investing unexpended cash to the City’s Administrative Services Director. Daily management responsibility of the investment program may be delegated to the Financial Services Manager, who shall establish procedures for the operation consistent with this investment policy.

INVESTMENT COMMITTEE
An investment committee consisting of the City Treasurer, City Manager, and Administrative Services Director shall be established to provide general oversight and direction concerning the policy related to management of the City's investment pool. The Financial Services Manager shall not be a member of the committee but shall serve in a staff and advisory capacity. The committee shall review and approve quarterly investment reports prepared by the Finance Department and reviewed by the Financial Services Manager or meet as necessary to discuss changes to the report or the investment strategy. The Investment Committee serving as the legislative body of the Investment Policy will have the quarterly reports for review within forty-five (45) days following the end of the quarter covered by the report as per Section 53646 (b)(1) of the California Government Code.

ETHICS AND CONFLICTS OF INTEREST
Officers and employees involved in the investment process shall refrain from personal business activity that conflicts with proper execution of the investment program, or impairs their ability to make impartial investment decisions. Additionally, the Administrative Services Director and the Financial Services Manager are required to annually file applicable financial disclosures as required by the Fair Political Practices Commission (FPPC).

SAFEKEEPING OF SECURITIES
To protect against fraud or embezzlement or losses caused by collapse of an individual securities dealer, all securities owned by the City shall be held in safekeeping by a third party bank trust department, acting as agent for the City under the terms of a custody agreement. All trades executed by a dealer will settle delivery versus payment (DVP) through the City's safekeeping agent.

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Securities held custody for the City shall be monitored by the Administrative Services Director to verify investment holdings.

All exceptions to this safekeeping policy must be approved by the City’s Administrative Services Director in written form and included in the quarterly reports to the Investment Committee and the City Council.

INTERNAL CONTROL
Separation of functions between the City’s Administrative Services Director or Financial Services Manager and/or the City Senior Accountant is designed to provide an ongoing internal review to prevent the potential for converting assets or concealing transactions.

Investment decisions are made by the Administrative Services Director, executed by the Administrative Services Director or Financial Services Manager and confirmed by the Senior Accountant. All wire transfers initiated by the Administrative Services Director or Financial Services Manager must be reconfirmed by the appropriate financial institution to the Senior Accountant.

Proper documentation obtained from confirmation and cash disbursement wire transfers is required for each investment transaction. Timely bank reconciliation is conducted to ensure proper handling of all transactions.

The investment portfolio and all related transactions are reviewed and balanced to appropriate general ledger accounts by the Senior Accountant on a monthly basis. An independent analysis by an external auditor shall be conducted annually to review and perform procedure testing on the City’s cash and investments that have a material impact on the financial statements. The Administrative Services Director and/or Investment Committee shall review and assure compliance with investment process and procedures.

REPORTING
The City Administrative Services Director shall review and render quarterly reports to the City Investment Advisory Committee and to the City Council that include the face amount of the cash investment, the classification of the investment, the name of the institution or entity, the rate of interest, the maturity date, the current market value and accrued interest due for all securities. The quarterly reports will be submitted to the Investment Committee within forty-five (45) days following the end of the quarter covered by the report as per Section 53646 (b)(1) of the California Government Code. Once approved by the Investment Committee, the quarterly reports shall be placed on the City Council’s meeting agenda for its review and approval no later than 60 days after the quarter ends. If there are no Council meetings within the 60-day period, the quarterly report shall be presented to the Council at the soonest possible meeting thereafter.

QUALIFIED BROKER/DEALERS
The City shall transact business only with banks, savings and loans, and with broker/dealers. The broker/dealers should be primary or regional dealers. The City’s Administrative Services Director will make exceptions only upon written authorization. The City currently does not maintain a list of broker/dealers approved to do business with the City. When necessary, the City shall go through the Request for Proposal processes to select the broker/dealers. Staff shall investigate dealers wishing to do business with the City to determine if they are adequately capitalized, have pending legal action against the firm or the individual broker and make markets in the securities appropriate to the City's needs. The City’s investment policy shall be made available on the City’s website for broker/dealers’ review.

COLLATERAL REQUIREMENTS
Collateral is required for investments in certificates of deposit. To reduce market risk, the collateral level will be at least 110% of market value of principal and accrued interest.

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AUTHORIZED INVESTMENTS
Investment of City funds is governed by the California Government Code Sections 53600 et seq.

Within the context of the limitations, the following investments are authorized, as further limited herein:

1. United States Treasury Bills, Bonds, and Notes or those for which the full faith and credit of the United States are pledged for payment of principal and interest. There is no percentage limitation of the portfolio that can be invested in this category, although a five-year maturity limitation is applicable.

2. 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 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.

3. Most mortgage-backed securities are obligations issued by the Government National Mortgage Association (GNMA), the Federal National Mortgage Association (FNMA), and the Federal Home Loan Mortgage Corporation (FHLMC). A mortgage passthrough security, collateralized mortgage obligation, mortgage-backed or other pay-through bond, equipment lease-backed certificate, consumer receivable passthrough certificate, or consumer receivable-backed bond. Securities eligible for investment under this subdivision and not issued or guaranteed by an agency or issuer identified in California Government Code Section 53601 subdivision (b) or (f) subdivision, shall be rated in a rating category of “AA” or its equivalent or better by a nationally recognized statistical rating organization (NRSRO) and have a maximum remaining maturity of five years or less. Purchase of securities authorized by this subdivision shall not exceed 20% of the agency’s surplus moneys that may be invested pursuant to this section.

4. Bills of exchange or time drafts drawn on and accepted by commercial banks, otherwise known as bankers’ acceptances. Bankers’ acceptances purchased may not exceed 180 days to maturity or 40% of the cost value of the portfolio. Also, no more than 30% of the agency’s money may be in bankers’ acceptances of any one commercial bank.

5. Commercial paper ranked the highest letter and number rating by a nationally recognized statistical rating organization (NRSRO), such as Standard and Poor’s Ratings Services, Fitch Ratings, Inc. or Moody’s Investors Services, and issued by domestic corporations having assets in excess of $500,000,000 and having an “A” or better rating on its long-term debentures as provided by NRSRO. Purchases of eligible commercial paper may not exceed 270 days to maturity and may not exceed 25% of the value of the portfolio. The amount invested in any one issuer shall not exceed 10% of the portfolio.

6. Negotiable Certificates of Deposit issued by nationally or state chartered banks (FDIC insured institutions) or state or federal savings institutions. Purchases of negotiable certificates of deposit may not exceed 30% of total portfolio. A maturity limitation of five years is applicable.

7. Time deposits or placement service deposits, non-negotiable and collateralized in accordance with the California Government Code, may be purchased through banks or savings and loan associations. Since time deposits are not liquid, no more than 50% of the investment portfolio may be invested in this investment type. A maturity limitation of five years is applicable. Effective January 1, 2020, no more than 50 percent of the agency’s money may be invested in deposits, including certificates of deposit, through a placement CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027
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service as authorized under 53601.8 (excludes negotiable certificates of deposit authorized under Section 53601(i)). On January 1, 2031, the maximum percentage of the portfolio reverts back to 30 percent. Investments made pursuant to 53635.8 remain subject to a maximum of 30% of the portfolio.

8. Medium Term Corporate Notes, with a maximum maturity of five years, may be purchased.

Securities eligible for investment shall be rated “A” or better by an NRSRO. Purchase of medium term notes may not exceed 30% of the market value of the portfolio.

9. Ineligible investments are those that are not described herein, including but not limited to, common stocks and long term (over five years in maturity) notes and bonds are prohibited from use in this portfolio. It is noted that special circumstances arise that necessitate the purchase of securities beyond the five-year limitation. On such occasions, requests must be approved by City Council prior to purchase.

10. Various daily money market funds administered for or by trustees, paying agents and custodian banks contracted by the City of San Carlos may be purchased as allowed under the State of California Government Code. Only funds holding U.S. Treasury or Government agency obligations can be used.

The following summary of maximum percentage limits, by instrument, are established for the City's total pooled funds portfolio:

Authorized Investment
Type
Government
Code
Maximum
Maturity
Minimum
Credit
Quality
Maximum in
Portfolio
Maximum
Investment in
One Issuer
Local Agency
Investment Fund
(LAIF)
16429.1 Upon
Demand N/A
As permitted by
LAIF (currently $75
million per account)
N/A
San Mateo County
Investment Pool 53684 Upon Demand N/A
As permitted by
County Treasurer
(currently no limit)
N/A
Treasury Obligations
(bills, notes & bonds) 53601(b) 5 Years N/A 100% N/A
US Government
Agency and Federal
Agency Securities
53601(f) 5 Years N/A 100% N/A
Mortgage PassThrough Securities or
Mortgage-Backed
Securities
53601(o) 5 years (C) 20% N/A
Bankers’ Acceptances 53601(g) 180 Days N/A 40% (B)
Commercial Paper 53601(h) 270 Days
Highest
letter and
number
rating by
an
NRSRO
25% (A)
Negotiable Certificates
of Deposit 53601(i) 5 Years N/A 30% N/A
Placement Service
Deposits – Deposits or
Certificates of
Deposits
53601.8 and
53635.8 5 Years N/A 50% N/A
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Medium Term
Corporate Notes 53601(k) 5 Years A 30% N/A
(A) 10% of outstanding paper of issuing corporation
(B) No more than 30% of the agency’s money may be in bankers’ acceptances of any one commercial bank.
(C) Securities eligible for investment under this subdivision shall be rated in a rating category of “AA” or its equivalent or better by an NRSRO.

DERIVATIVE INVESTMENTS
Derivatives are investments whose value is "derived" from a benchmark or index. That benchmark can be almost any financial measure from interest rates to commodity and stock prices. The use of derivatives is prohibited under this policy.

LEGISLATIVE CHANGES
Any State of California legislative action that further restricts allowable maturities, investment type, or percentage allocations will be incorporated into the City of San Carlos' Investment Policy and supersede any and all previous applicable language.

INTEREST EARNINGS
All moneys earned and collected from investments authorized in this policy shall be allocated quarterly to various fund accounts based on the cash balance in each fund at quarter end as a percentage of the entire pooled portfolio.

LIMITING MARKET VALUE EROSION
The longer the maturity of securities, the greater their market price volatility. Therefore, it is the general policy of the City to limit the potential effects from erosion in market values by adhering to the following guidelines:

All immediate and anticipated liquidity requirements will be addressed prior to purchasing all investments.

Maturity dates for long-term investments will coincide with significant cash flow requirements where possible, to assist with short term cash requirements at maturity.

All long-term securities will be purchased with the intent to hold all investments to maturity under then prevailing economic conditions. However, economic or market conditions may change, making it in the City's best interest to sell or trade a security prior to maturity.

PORTFOLIO MANAGEMENT ACTIVITY
The investment program shall seek to augment returns consistent with the intent of this policy, identified risk limitations and prudent investment principals. These objectives will be achieved by use of the following strategies:

Active Portfolio Management. Through active fund and cash flow management, taking advantage of current economic and interest rate trends, the portfolio yield may be enhanced with limited and measurable increases in risk by extending the weighted maturity of the total portfolio.

Portfolio Maturity Management. When structuring the maturity composition of the portfolio, the City shall evaluate current and expected interest rate yields and necessary cash flow requirements. It is recognized that in normal market conditions longer maturities produce higher yields. However, the securities with longer maturities also experience greater price fluctuations when the level of interest rates change.

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Security Swaps. The City may take advantage of security swap opportunities to improve the overall portfolio yield. A swap, which improves the portfolio yield, may be selected even if the transactions result in an accounting loss. Documentation for swaps will be included in the City's permanent investment file documents.

Competitive Bidding. It is the policy of the City to require competitive bidding for investment transactions that are not classified as "new issue" securities. For the purchase of non-"new issue" securities and the sale of all securities at least three bidders must be contacted. Competitive bidding for security swaps is also suggested, however, it is understood that certain time constraints and broker portfolio limitations exist that would not accommodate the competitive bidding process. If a time or portfolio constraining condition exists, the pricing of the swap should be verified to current market conditions and documented for auditing purposes.

POLICY REVIEW
The City of San Carlos' investment policy shall be adopted by resolution of the City Council on an annual basis. This investment policy shall be reviewed at least annually to ensure its consistency with the overall objectives of preservation of principal, liquidity and yield, and its relevance to current law and financial and economic trends. Any amendments to the policy shall be forwarded to City Council for approval.

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Glossary of Terms
Accrued Interest: Interest earned but not yet received.

Active Deposits: Funds that are immediately required for disbursement.

Amortization: An accounting practice of gradually decreasing (increasing) an asset's book value by spreading its depreciation (accretion) over a period of time.

Asked Price: The price a broker dealer offers to sell securities.

Basis Point: One basis point is one hundredth of one percent (.01).

Bid Price: The price a broker / dealer offers to purchase securities.

Bond: A financial obligation for which the issuer promises to pay the bondholder a specified stream of future cash flows, including periodic interest payments and a principal repayment.

Bond Swap: Selling one bond issue and buying another at the same time in order to create an advantage for the investor. Some benefits of swapping may include tax-deductible losses, increased yields, and an improved quality portfolio.

Book Entry Securities: Securities, such stocks held in “street name,” that are recorded in a customer’s account, but are not accompanied by a certificate. The trend is toward a certificate-free society to cut down on paperwork and to diminish investors’ concerns about the certificates themselves. All the large New York City banks, including those that handle the bulk of the transactions of the major government securities dealers, now clear most of their transactions with each other and with the Federal Reserve through the use of automated telecommunications and the “book-entry” custody system maintained by the Federal Reserve Bank of New York. These banks have deposited with the Federal Reserve Bank a major portion of their government and agency securities holdings, including securities held for the accounts of their customers or in a fiduciary capacity. Virtually all transfers for the account of the banks, as well as for the government securities dealers who are their clients, are now effected solely by bookkeeping entries. The system reduces the costs and risks of physical handling and speeds the completion of transactions.

Bearer and Registered Bonds: In the past, bearer and registered bonds were issued in paper form.

Those still outstanding may be exchanged at any Federal Reserve Bank or branch for an equal amount of any authorized denomination of the same issue. Outstanding bearer bonds are interchangeable with registered bonds and bonds in “book-entry” form. That is, the latter exist as computer entries only and no paper securities are issued. New bearer and registered bonds are no longer being issued. Since August 1986, the Treasury’s new issues of marketable notes and bonds are available in book-entry form only. All Treasury bills and more than 90% of all other marketable securities are now in book-entry form. Book-entry obligations are transferable only pursuant to regulations prescribed by the Secretary of the Treasury.

Book Value: The value at which a debt security is shown on the holder's balance sheet. Book value is acquisition cost less amortization of premium or accretion of discount.

Broker: In securities, the intermediary between a buyer and a seller of securities. The broker, who usually charges a commission, must be registered with the exchange in which he or she is trading, accounting for the name registered representative.

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Certificate of Deposit: A deposit insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) at a set rate for a specified period of time.

Collateral: Securities, evidence of deposit or pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposit of public moneys.

Comprehensive Annual Financial Report (CAFR): The official annual financial report for the City. It includes five combined statements and basic financial statements for each individual fund and account group prepared in conformity with Generally Accepted Accounting Principles (GAAP).

Constant Maturity Treasury (CMT): An average yield of a specific Treasury maturity sector for a specific time frame. This is a market index for reference of past direction of interest rates for the given Treasury maturity range.

Coupon: The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value.

Credit Analysis: A critical review and appraisal of the economic and financial conditions or of the ability to meet debt obligations.

Current Yield: The interest paid on an investment expressed as a percentage of the current price of the security.

Custody: A banking service that provides safekeeping for the individual securities in a customer's investment portfolio under a written agreement that also calls for the bank to collect and pay out income, to buy, sell, receive and deliver securities when ordered to do so by the principal.

Delivery vs. Payment (DVP): Delivery of securities with a simultaneous exchange of money for the securities.

Discount: The difference between the cost of a security and its value at maturity when quoted at lower than face value.

Diversification: Dividing investment funds among a variety of securities offering independent returns and risk profiles.

Duration: The weighted average maturity of a bond's cash flow stream, where the present value of the cash flows serve as the weights; the future point in time at which on average, an investor has received exactly half of the original investment, in present value terms; a bond's zero-coupon equivalent; the fulcrum of a bond's present value cash flow time line.

Fannie Mae: Trade name for the Federal National Mortgage Association (FNMA), a U.S. sponsored corporation.

Federal Reserve System: The central bank of the U.S. that consists of a seven member Board of Governors, 12 regional banks and approximately 8,000 commercial banks that are members.

Federal Deposit Insurance Corporation (FDIC): Insurance provided to customers of a subscribing bank that guarantees deposits to a set limit (currently $250,000) per account.

Fed Wire: A wire transmission service established by the Federal Reserve Bank to facilitate the transfer of funds through debits and credits of funds between participants within the Fed system.

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Freddie Mac: Trade name for the Federal Home Loan Mortgage Corporation (FHLMC), a U.S. sponsored corporation.

Ginnie Mae: Trade name for the Government National Mortgage Association (GNMA), a direct obligation bearing the full faith and credit of the U.S. Government.

Inactive Deposits: Funds not immediately needed for disbursement.

Interest Rate: The annual yield earned on an investment, expressed as a percentage.

Investment Agreements: An agreement with a financial institution to borrow public funds subject to certain negotiated terms and conditions concerning collateral, liquidity and interest rates.

Liquidity: Refers to the ability to rapidly convert an investment into cash.

Market Value: The price at which a security is trading and could presumably be purchased or sold.

Maturity: The date upon which the principal or stated value of an investment becomes due and payable.

Nationally Recognized Statistical Rating Organizations (NRSRO): A U.S. Securities & Exchange Commission registered agency that assesses the creditworthiness of an entity or specific security.

NRSRO typically refers to Standard and Poor’s Ratings Services, Fitch Ratings, Inc. or Moody’s Investors Services.

New Issue: Term used when a security is originally "brought" to market.

Perfected Delivery: Refers to an investment where the actual security or collateral is held by an independent third party representing the purchasing entity.

Portfolio: Collection of securities held by an investor.

Primary Dealer: A group of government securities dealers that submit daily reports of market activity and security positions held to the Federal Reserve Bank of New York and are subject to its informal oversight.

Purchase Date: The date in which a security is purchased for settlement on that or a later date.

Rate of Return: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond or the current income return.

Repurchase Agreement (REPO): A transaction where the seller (bank) agrees to buy back from the buyer (City) the securities at an agreed upon price after a stated period of time.

Reverse Repurchase Agreement (REVERSE REPO): A transaction where the seller (City) agrees to buy back from the buyer (bank) the securities at an agreed upon price after a stated period of time.

Risk: Degree of uncertainty of return on an asset.

Safekeeping: See Custody.

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Sallie Mae: Trade name for the Student Loan Marketing Association (SLMA), a U.S. sponsored corporation.

Secondary Market: A market made for the purchase and sale of outstanding issues following the initial distribution.

Settlement Date: The date on which a trade is cleared by delivery of securities against funds.

Time Deposit: A deposit in an interest-paying account that requires the money to remain on account for a specific length of time. While withdrawals can generally be made from a passbook account at any time, other time deposits, such as certificates of deposit, are penalized for early withdrawal.

Treasury Obligations: Debt obligations of the U.S. Government that are sold by the Treasury Department in the forms of bills, notes, and bonds. Bills are short-term obligations that mature in one year or less. Notes are obligations that mature between one year and ten years. Bonds are long-term obligations that generally mature in ten years or more.

U.S. Government Agencies: Instruments issued by various US Government Agencies most of which are secured only by the credit worthiness of the particular agency.

Yield: The rate of annual income return on an investment, expressed as a percentage. It is obtained by dividing the current dollar income by the current market price of the security.

Yield to Maturity: The rate of income return on an investment, minus any premium or plus any discount, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond, expressed as a percentage.

Yield Curve: The yield on bonds, notes or bills of the same type and credit risk at a specific date for maturities up to thirty years.

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RESOLUTION NO. 2025 — 034

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CARLOS

ACCEPTING AND APPROVING THE ANNUAL INVESTMENT POLICY.

WHEREAS, California Code Section 53646(a)(2) requires City Council annual review and approval of the Investment Policy; and
WHEREAS, the City’s Investment Policy was last adopted by the City Council on June 10, 2024 via Resolution 2024-059; and
WHEREAS, staff recommend the following change to the Investment Policy at this time other than those that bring the policy in alignment with the California Debt and Investment Advisory Commission’s (CDIAC) Local Agency Investment Guidelines: extend the date of the current portfolio concentration limit of 50% for surplus funds that local agencies invest in depository institutions that use a private sector entity to assist in the placement of deposits until January 1, 2031.

NOW, THEREFORE BE IT RESOLVED, that the San Carlos City Council hereby accepts and approves the Fiscal Year 2025-26 Investment Policy with the changes mentioned above. kkk kk
|, City Clerk Crystal Mui, hereby certify that the foregoing Resolution was duly and regularly passed and adopted the by City Council of the City of San Carlos at a scheduled meeting thereof held on the 12" day of May 2025, by the following vote:

AYES, COUNCILMEMBERS: DUGAN, LAYTON, RAK, VENKATESH, MCDOWELL NOES, COUNCILMEMBERS: NONE
ABSENT, COUNCILMEMBERS: NONE
fo eS LOB CITY CLERK of the City of San Carlos APPROVED:
()
MAYOR of the City of San Carlos
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CITY OF SAN CARLOS 2025

STRATEGIC PLAN

THE SAN CARLOS STRATEGIC PLAN
The San Carlos Strategic Plan identifies current issues, needs, and interests that are of strategic importance to the quality of life of the community. Addressing these issues requires the leadership focus of the City’s elected officials and professional staff for an extended period of time, typically several years. The Strategic Plan is not a summary of all City services. The issues identified in the plan are unique because they have an urgent impact on the community and because they are complex.

Strategic goals are a central feature of the Strategic Plan. These are established to find ways to address the strategic issues now and into the foreseeable future. If a solution is found, and there is an on-going need to address the issue, this will occur through the City’s on-going service delivery system. At that time, the issue will no longer be identified as a strategic goal.

HOW THE STRATEGIC PLAN IS DEVELOPED
The Strategic Plan is developed through an annual process that involves the City Council and City professional staff in facilitated, collaborative working sessions. The process is completed early each year so that the Strategic Plan can be incorporated into the City’s budget.

The plan is a document comprised of the City’s mission, vision and core values statements, the strategic goals and objectives for the next planning period and detailed work plans that will accomplish the goals.

Strategic goals are identified based on the knowledge and understanding that each participant in the process has about what is of strategic importance to the community. City Council members are elected by the residents to govern and represent their needs and interests. They bring the perspective of the residents and business of the community. Professional City staff members are trained in local government management and services. They bring the perspective of how to address the complex issues that are of concern. Through the strategic planning work sessions, these two unique perspectives come together to identify the areas of focus for the next planning period.

THE STRATEGIC PLAN PROCESS
The key steps to the process are listed below.

City Council Mini-Retreat. City Council, City Manager and City Attorney brainstorm the current community issues of strategic importance. This is a public meeting that was held on October 14, 2024.

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City Council and City Management Team Retreat. This is a facilitated, collaborative working session. The participants review accomplishments from last year; review the City’s mission, vision and values to ensure relevance; check the status of current strategic plan issues and progress; and identify new strategic issues to work on for the next year and possibly beyond. Council strategic goals and objectives are established at a high level through this process. The “handoff” is given to City staff to work through the details by refining the goals and objectives and developing work plans to achieve Council’s strategic goals. This is a public meeting that was held on February 6, 2025.

City Management Team Retreat. This facilitated, collaborative working session with the City’s management team is designed to refine the strategic goals, develop objectives to achieve each goal and establish work plans that identify specific tasks, set timelines and assign responsibility for accomplishment. This is an internal staff meeting that was held on March 20, 2025.

Council Adoption of Strategic Plan and Progress Updates. After all work sessions are complete, a final Strategic Plan is agendized for Council adoption at a regularly scheduled Council meeting.

City staff then periodically updates Council on the progress of strategic goals during future Council meetings. All of these Council meetings are public meetings. The 2025 Strategic Plan was officially adopted by the Council on April 14, 2025.

MISSION
The City of San Carlos provides high-quality services, facilities, and events to its residents in an equitable, sustainable, transparent, responsive, and friendly manner to foster an inclusive, safe, and healthy community now and in the future.

VISION
The City of San Carlos will continue to lead with confidence into the future as a desirable, vibrant, equitable, inclusive, and business friendly community, admired by all as a great place to live, learn, work, and play.

CORE VALUES
Not in priority order
• Fostering a safe, diverse, welcoming, and engaged community that recognizes the importance of social equity
• Ensuring fiscal responsibility and the sustainability of San Carlos’ resources, infrastructure, and social/cultural environment
• Proactively protecting our physical environment from the threats of climate change and reducing greenhouse gas emissions
• Recognizing and addressing the changing needs and challenges of the community and promoting the well-being of all residents, in all stages of life.

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• Demonstrating high ethical and professional standards, including high quality customer service • Leading and managing effectively by engaging the community, thinking strategically, remaining proactive, and planning for the future
• Supporting the well-being of employees, investing in their development, and aligning staffing and resources with the demand for City services
2025 STRATEGIC GOALS AND OBJECTIVES
In alphabetical order

1. Climate Change Mitigation, Adaptation, and Resilience: The City of San Carlos will support sustainability initiatives, address climate change, and prepare for emergencies. As part of its focus on climate change, the City of San Carlos will continue to address vulnerability and adapt to changing climate conditions such as wildfires, flooding, drought, and sea level rise.

Objective #1: Continue to plan and implement the 33 Council-approved greenhouse gas reduction strategies and 12 adaptation/resilience strategies in the Climate Mitigation and Adaptation Plan (CMAP).

Objective #2: Refine policies and develop standards to integrate flood and sea level rise resiliency initiatives into existing processes, policies, and plans to prepare for the future.

Objective #3: Perform community engagement and outreach to promote sustainability initiatives citywide.

Objective #4: Prepare for emergencies and engage and educate the community about emergency preparedness and response.

2. Downtown: The City of San Carlos will work with residents, property owners, business owners, committees, commissions, the Chamber of Commerce, and all other interested members of the community to develop and implement a plan to understand and ensure that the downtown meets the needs of the community and businesses now and into the future.

Objective #1: Implement the community engagement strategy for the Downtown Specific Plan.

Objective #2: Create the Downtown Specific Plan and corresponding implementation strategies.

Objective #3: Ensure that the vision and goals of the Downtown Specific Plan come to fruition.

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Objective #4: Design and implement a project to demonstrate and celebrate the community’s shared vision for streetscape, outdoor dining, and public plaza improvements in downtown San Carlos.

Objective #5: Explore options for phasing and financing the Downtown Specific Plan.

3. Housing: The City of San Carlos will actively encourage and support the creation of housing to provide a safe, inclusive, diverse, and affordable supply by facilitating development of housing for all income levels.

Objective #1: Increase the number of Below Market Rate (BMR) housing units to meet local and regional housing requirements (e.g.: regional collaboration, grant programs, acquisition, and new development).

Objective #2: Facilitate completion of projects currently underway. Objective #3:

Increase housing production.

4. Mobility, Traffic and Transportation Infrastructure: The City of San Carlos will actively pursue plans and strategies for improving mobility, traffic, parking, transportation infrastructure, and street maintenance while encouraging alternative modes of transportation to provide efficient, safe, and effective movement throughout the city.

Objective #1: Collaborate with regional agencies and partners to develop short-, mid-, and longterm bicycle and pedestrian safety improvements at the U.S. 101/Holly Street interchange.

Objective #2: Implement the Bicycle and Pedestrian Master Plan to encourage alternative modes of transportation which includes micro-mobility, improved mobility, and safety for people of all ages and abilities.

Objective #3: Implement Traffic Signal Master Plan and implement citywide street and intersection projects and initiatives to improve traffic flow and parking utilizing smart technologies.

Objective #4: Develop community education and outreach tools to highlight the benefits and impacts of key traffic, parking, transportation infrastructure, and street maintenance projects.

Objective #5: Educate the community and implement improvements to increase bicycle and pedestrian safety.

Objective #6: Structure a partnership among the City, property owners, businesses, and employers and leverage resources to create effective trip reduction strategies through the creation of a Transportation Management Agency (TMA).

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Objective #7: Identify a departmentwide Public Works Department technology solution(s) to streamline workflows, consolidate existing tools, and protect the City’s infrastructure improvements.

5. Northeast Area Specific Plan: 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.

Objective #1: Create outreach and engagement opportunities that actively involve Northeast Area stakeholders and the San Carlos community in the visioning and development of the Specific Plan.

Objective #2: Complete the environmental review of the NE Area Specific Plan.

Objective #3: Present goals, policies, and standards of the Northeast Area Specific Plan for adoption.

6. Recreation Services: The City of San Carlos will explore new recreational opportunities by completing an assessment of parks, open space, and other recreation facilities to support the physical and mental health and well-being of community members of all ages.

Objective #1: Complete a Parks Master Plan and update the General Plan Parks and Open Space Elements.

Objective #2: Complete the North Crestview Park Master Plan.

Objective #3: Assess new opportunities to implement Trails Connection Plan for public trails.

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STRATEGIC OBJECTIVE CAPITAL IMPROVEMENT PROGRAM PROJECTS (5-YR PLAN - FY25-30) * Shoreway Road Sewer Main Relocation Project ($3,000,000) * Sewer Capacity Assurance Improvements ($12,500,000)
* Upgrade of Existing SCADA Hardware at all Sewer and Storm Pump Stations ($450,000) * Storm Drain Improvements ($4,000,000)
* Installation of New EV Stations in Public Parking Lots (658,200) * Industrial Road Bridge and Culvert Repair ($600,000)
* Belmont Creek Watershed Improvement ($550,000)
* Climate Mitigation and Adaptation Plan Update ($250,000) * Downtown Renovation Plan Design/Implementation ($16,500,000) * Downtown Planning Initiative ($69,900)
* Annual Street Resurfacing ($39,500,000)
* Annual Traffic Markings & Striping ($1,500,000)
* Annual Sidewalk Replacement/Reconstruction ($1,140,000) * Brittan Avenue Sidewalk Improvements (975,000)
* Traffic Signal Master Plan Implementation ($2,650,000) * Traffic Studies & Pilot Improvements ($2,500,000)
* Traffic Technology & Funding Development ($1,450,000) * Traffic Signal Fiber Project ($1,885,000)
* Traffic Impact Fee (TIF) Study and Update ($150,000)
* Intersection Pedestrian Improvements (Arroyo/Woodland, Olive/Elm) ($500,000) * SRTS Intersection and Sidewalk Improvements ($3,500,000) * Safe Routes to School & Pavement Project - Clifford Street ($400,000) * Safe Routes to School Improvements near Tierra Linda & Mariposa Schools ($200,000) * Safe Routes to School Improvements near Brittan Acres and Heather ($1,100,000) * Safe Routes to School Improvements near Arundel ($1,450,000) * Complete Streets & Corridor Studies ($750,000)
* San Carlos Avenue Pedestrian Safety Improvements Phase IV ($1,200,000) * Holly/101 Interchange Modifications ($10,000,000)
* Industrial Road Turning Mitigation (between Holly St and PAMF) ($400,000) * Roundabout at Crestview and Edmonds ($250,000)
* Traffic Circle and Midblock Crossings (ADLP, Industrial, Crestview, and Morse) ($650,000) North East Area Specific Plan * East Side Innovation District Master Streetscape Plan ($150,000) * Parks Master Plan ($200,000)
* Parks Master Plan Improvements ($1,000,000)
* Chilton Park Pathway Modifications ($150,000)
* Adult Community Center Kitchen Remodel Design ($200,000) * Trail Improvements, Expansion and Connections ($250,000) Climate Change Mitigation,
Adaptation & Resilience
($22,008,200)
Downtown ($16,569,900)
Mobility, Traffic & Transportation
Infrastructure ($72,150,000)
Recreation Services ($1,800,000)
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City of San Carlos
Fund Structure
* Major Fund
Major Funds:

Major Funds are defined generally as having significant activities or balances in the current year. The City has determined the following funds as major funds: General Fund, Wastewater/Enterprise Fund, Gas Tax Fund, General Capital Project Improvement Fund, and the Housing Funds which are made up of the Housing in Lieu and the Low and Moderate Income Housing Fund.

Fund Descriptions:
0001
0006
City of San Carlos Budgetary Funds
General Fund
0001 General Fund*
Enterprise
Funds
0006 Wastewater
(Sewer)*
Other Revenue
Funds
0015 NPDES/Storm
Drainage
0017 Police Grants
Capital Funds
0010 Equipment
Replacement
0014 Measure A
0016 Gas Tax*
0018 Measure W
0025 General Capital Project
Improvement*
0026 Child Care Fund
0027 Park in Lieu
0029 Housing in Lieu*
0031 Low & Moderate
Income Housing Fund*
Internal Service
Funds
0032 Workers
Compensation
0033 Liability
Insurance/Risk Mgmt
0035 Post Employment
Benefits
General Fund *– The General Fund is the primary operating fund of the City and is used to account for most day-to-day activities. Revenue sources include (but are not limited to) property tax, sales tax, transient occupancy tax, current fees for services and business registration.

Enterprise Fund *– The Enterprise Fund or Wastewater (Sewer) Fund is used to account for City operations that are financed and operated like private business enterprises. The Sewer Fund is used to account for sewage treatment, transmission, major replacements and improvements to the City’s sewer system.

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0015 NPDES/Storm Drainage – This fund is used to account for revenues received from assessments levied by the county on property and disburses funds in compliance with the provisions of the National Pollutant Discharge Elimination System (NPDES).
0017 Police Grants – This fund is 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 (commonly referred to as the Community-Oriented Policing Services, or COPS grant), cities and counties receive state funds to augment public safety expenditures.
0010 Equipment Replacement – This fund is used to account for the anticipated replacement of general equipment and inventory needs. Some of the items included in this fund are vehicles, park equipment and computers and networking equipment. The source of funding for replacement is the General Fund. 0014 Measure A – This fund is used to account for the City’s share of a one-half cent sales tax restricted for transportation purposes. The revenue received is used to augment capital projects in the Gas Tax fund.
0016 Gas Tax * – This fund is used to account for revenue received and expended under the State of California, Street and Highways Code Sections 2013, 2015, 2106, 2107 and 2107.5. These revenues must be expended for maintenance or construction of streets.
0018 Measure W – This fund is used to account for the City’s share of half-cent sales tax. The measure W went into effect in July of 2019 for 30 years. The funding is used to improve transit, relieve congestion, repair potholes, maintain streets and improve pedestrian safety.

Other (Special) Revenue Funds – Revenue funds are used to account for revenue sources for which expenditures are restricted, by law or administrative action, to specific purposes.

Capital Funds – The Capital Funds are used to account for the acquisition or construction of major capital improvements other than those financed by the Wastewater Fund.

CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 120

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June 09, 2025 Packet Pg. 254
0025 General Capital Project Improvement Fund – This fund is used to account for general capital projects including building construction, technology purchases and other infrastructure needs. The main source of revenue comes from the General Fund.
0026 Child Care Fund – This fund is used to account for Child Care development impact fees. Revenues collected is intended to provide for the capital improvements and augmentation to the child care system. 0027 Park In Lieu – This fund is used to account for development fees collected and used to finance the acquisition and construction of City parks. 0029 Housing in Lieu* – This fund is used to account for development fees and other housing-related resources that must be used to finance affordable housing for City residents.
0031 Low and Moderate Income Housing Fund* – This fund is used to account for the housing activities assumed by the City when the former redevelopment agency was dissolved.
0032 Workers Compensation – This fund is used to account for activities related to Workers’ Compensation claims and the premiums for coverage. 0033 Liability Insurance/Risk Management – This fund is used to account for activities related to general liability claims against the City and premiums for coverage above the City’s risk retention level.
0035 Post-Employment Benefits – This fund is used to account for activities related to longevity and healthcare benefits for retired employees.

Internal Service Funds – The Internal Service Funds are used to account for special activities and services performed by a designated department for other departments on a cost reimbursement basis.

CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 121

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June 09, 2025 Packet Pg. 255
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CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027
122

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June 09, 2025 Packet Pg. 256
FUND BALANCES: OPERATING, CAPITAL AND OTHER BUDGETS
Fund Title
0001 General - Unassigned
0001 General - Committed/Assigned/Restricted
0001 General -TOTAL
0006 Wastewater (Sewer) Fund
0017 Grants-Police
0010 Equipment Replacement
0014 Measure A Tax
0018 Measure W Tax
0016 Gas Tax
0025 General Fund Capital Improvement
0026 Child Care Fund
0027 Park In Lieu
0028 Parking In Lieu Fee
0029 Affordable Housing in Lieu
0031 Low-Mod Housing Asset
0093 Library - Bond Service
0095 Library - Tenant Imp.

Library Total
Operating & Capital Improvement Totals
0015 NPDES - Storm Drain Maint.
0032 Work Compensation Insurance
0033 Liability Insurance
0035 Post-employment Benefits
Internal Service Funds Total
Other Funds Total

GRAND TOTAL
AUDITED FISCAL YEAR 2023-24 BALANCES
Alloc In Alloc Out Net 7/1/2024
Revenue Expend. Tran In Tran Out Change Balance
58,050,029 (54,353,418) 4,894,700 (8,740,323) (149,013) 2,729,717 7,821,168 (3,000,000) 7,690,623 (7,850,000) 4,661,791 56,255,322 65,871,197 (57,353,418) 12,585,323 (16,590,323) 4,512,778 58,985,039 25,813,216 (12,739,000) 649,700 (4,577,800) 9,146,116 89,619,427 205,326 (150,000) - - 55,326 363,760
- (1,604,665) 460,000 - (1,144,665) 2,845,617
1,157,463 (98,533) (1,200,000) (141,070) 520,244
509,876 - - (495,000) 14,876 260,057
2,725,979 (1,748,426) 7,820,000 (1,180,800) 7,616,753 17,686,923 13,623,175 (12,296,813) 5,250,000 (3,275,000) 3,301,361 35,094,124 1,090,502 - - - 1,090,502 1,090,502
338,395 (222,396) - - 115,999 1,662,076
7,974 (23,504) - (250,000) (265,530) 132,425
4,620,314 (12,976,200) (317,300) (8,673,186) 5,624,128
38,102 (33,386) (104,100) (99,385) 8,628,212
535,698 (469,150) - - 66,548 917,932
787,824 (525,932) - - 261,892 2,709,505
1,323,522 (995,082) - - 328,440 3,627,437
117,325,040 (100,241,425) 26,765,023 (27,990,323) 15,858,315 226,139,971 824,743 (122,719) (638,700) 63,324 845,003
20,921 (268,444) 382,100 (106,500) 28,077 312,837
125,236 (1,660,108) 1,736,200 (147,800) 53,528 1,051,589 1,096,624 (1,123,600) - - (26,976) 189,525
1,242,781 (3,052,152) 2,118,300 (254,300) 54,629 1,553,951 2,067,525 (3,174,871) 2,118,300 (893,000) 117,953 2,398,954 119,392,564 (103,416,296) 28,883,323 (28,883,323) 15,976,268 228,538,925 CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 123

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June 09, 2025 Packet Pg. 257
FUND BALANCES: OPERATING, CAPITAL AND OTHER BUDGETS
Fund Title
0001 General - Unassigned
0001 General - Committed/Assigned/Restricted
0001 General -TOTAL
0006 Wastewater (Sewer) Fund
0017 Grants-Police
0010 Equipment Replacement
0014 Measure A Tax
0018 Measure W Tax
0016 Gas Tax
0025 General Fund Capital Improvement
0026 Child Care Fund
0027 Park In Lieu
0028 Parking In Lieu Fee
0029 Affordable Housing in Lieu
0031 Low-Mod Housing Asset
0093 Library - Bond Service
0095 Library - Tenant Imp.

Library Total
Operating & Capital Improvement Totals
0015 NPDES - Storm Drain Maint.
0032 Work Compensation Insurance
0033 Liability Insurance
0035 Post-employment Benefits
Internal Service Funds Total
Other Funds Total

GRAND TOTAL
PROJECTED FISCAL YEAR 2024-25 BALANCES
Alloc In Alloc Out Net 7/1/2025
Revenue Expend. Tran In Tran Out Change Balance
59,061,520 (59,932,970) 5,338,500 (5,192,923) (725,873) 2,003,844 (4,000,000) 4,125,523 (4,850,000) (4,724,477) 51,530,845 59,061,520 (63,932,970) 9,464,023 (10,042,923) (5,450,350) 53,534,689 24,469,000 (24,756,851) 669,300 (4,897,400) (4,515,951) 85,103,476 197,900 (168,800) - - 29,100 392,860
- (538,600) 460,000 - (78,600) 2,767,017
1,260,700 (95,900) (1,236,000) (71,200) 449,044
417,100 - - (406,900) 10,200 270,257
2,625,300 (9,460,000) 7,767,900 (1,216,100) (282,900) 17,404,023 7,379,857 (38,569,824) 3,661,227 (3,275,000) (30,803,740) 4,290,384 38,300 (500,000) (461,700) 628,802
376,500 (1,422,604) - - (1,046,104) 615,972
2,900 (51,496) - (83,829) (132,425) -
1,311,900 (10,843,474) - (326,900) (9,858,474) (4,234,346) 48,500 (154,200) (107,200) (212,900) 8,415,312
444,000 (1,504,900) 142,968 - (917,932) (0)
2,518,000 (3,392,239) - (1,835,266) (2,709,505) 0
2,962,000 (4,897,139) 142,968 (1,835,266) (3,627,437) (0) 100,151,477 (155,391,856) 22,165,418 (23,427,518) (56,502,480) 169,637,491 738,000 (129,300) (657,800) (49,100) 795,903
13,900 (275,809) 393,400 (109,700) 21,791 334,628
51,200 (2,028,300) 1,788,400 (152,200) (340,900) 710,689 1,210,200 (1,132,500) - - 77,700 267,225
1,275,300 (3,436,609) 2,181,800 (261,900) (241,409) 1,312,542 2,013,300 (3,565,909) 2,181,800 (919,700) (290,509) 2,108,445 102,164,777 (158,957,765) 24,347,218 (24,347,218) (56,792,989) 171,745,936 CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 124

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FUND BALANCES: OPERATING, CAPITAL AND OTHER BUDGETS
Fund Title
0001 General - Unassigned
0001 General - Committed/Assigned/Restricted
0001 General -TOTAL
0006 Wastewater (Sewer) Fund
0017 Grants-Police
0010 Equipment Replacement
0014 Measure A Tax
0018 Measure W Tax
0016 Gas Tax
0025 General Fund Capital Improvement
0026 Child Care Fund
0027 Park In Lieu
0028 Parking In Lieu Fee
0029 Affordable Housing in Lieu
0031 Low-Mod Housing Asset
0093 Library - Bond Service
0095 Library - Tenant Imp.

Library Total
Operating & Capital Improvement Totals
0015 NPDES - Storm Drain Maint.
0032 Work Compensation Insurance
0033 Liability Insurance
0035 Post-employment Benefits
Internal Service Funds Total
Other Funds Total

GRAND TOTAL
PROPOSED FISCAL YEAR 2025-26 BALANCES
Alloc In Alloc Out Net 7/1/2026
Revenue Expend. Tran In Tran Out Change Est Balance
61,584,200 (66,938,825) 6,237,400 (1,531,296) (648,521) 1,355,323 268,996 (13,099,000) (12,830,004) 38,700,841
61,584,200 (66,938,825) 6,506,396 (14,630,296) (13,478,525) 40,056,164 28,897,800 (29,002,800) 639,400 (6,069,100) (5,534,700) 79,568,776 193,500 (173,900) - (100,000) (80,400) 312,460
- (589,170) 360,000 - (229,170) 2,537,847
1,299,600 (87,000) (1,523,000) (310,400) 138,644
425,400 - - (619,100) (193,700) 76,557
2,217,600 (9,100,000) 8,267,100 (1,513,000) (128,300) 17,275,723 16,233,000 (17,603,083) 10,249,000 (3,675,000) 5,203,917 9,494,301 3,157,500 (250,000) 2,907,500 3,536,302
187,800 (450,000) 400,000 - 137,800 753,772
- - - - -
16,231,000 (589,300) - (436,700) 15,205,000 10,970,654
63,100 (158,800) - (110,400) (206,100) 8,209,212
- - - - - (0)
- - - - - 0
- - - - - (0)
130,490,500 (124,942,878) 26,421,896 (28,676,596) 3,292,922 172,930,413 728,200 (133,000) (753,000) (157,800) 638,103
9,700 (614,400) 614,300 (113,000) (103,400) 231,228
49,100 (2,232,200) 2,663,100 (156,700) 323,300 1,033,989 1,139,500 (1,138,300) - - 1,200 268,425
1,198,300 (3,984,900) 3,277,400 (269,700) 221,100 1,533,642 1,926,500 (4,117,900) 3,277,400 (1,022,700) 63,300 2,171,745 132,417,000 (129,060,778) 29,699,296 (29,699,296) 3,356,222 175,102,158 CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 125

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June 09, 2025 Packet Pg. 259
FUND BALANCES: OPERATING, CAPITAL AND OTHER BUDGETS
Fund Title
0001 General - Unassigned
0001 General - Committed/Assigned/Restricted
0001 General -TOTAL
0006 Wastewater (Sewer) Fund
0017 Grants-Police
0010 Equipment Replacement
0014 Measure A Tax
0018 Measure W Tax
0016 Gas Tax
0025 General Fund Capital Improvement
0026 Child Care Fund
0027 Park In Lieu
0028 Parking In Lieu Fee
0029 Affordable Housing in Lieu
0031 Low-Mod Housing Asset
0093 Library - Bond Service
0095 Library - Tenant Imp.

Library Total
Operating & Capital Improvement Totals
0015 NPDES - Storm Drain Maint.
0032 Work Compensation Insurance
0033 Liability Insurance
0035 Post-employment Benefits
Internal Service Funds Total
Other Funds Total

GRAND TOTAL
PROPOSED FISCAL YEAR 2026-27 BALANCES
Alloc In Alloc Out Net 7/1/2027
Revenue Expend. Tran In Tran Out Change Est Balance
64,155,000 (69,779,345) 6,865,311 (1,313,500) (72,534) 1,282,789 - (7,436,111) (7,436,111) 31,264,730
64,155,000 (69,779,345) 6,865,311 (8,749,611) (7,508,645) 32,547,519 28,743,100 (26,122,800) 658,500 (6,261,700) (2,982,900) 76,585,876 199,300 (179,100) - (100,000) (79,800) 232,660
- (562,594) 371,000 - (191,594) 2,346,253
1,338,600 (89,600) (1,311,000) (62,000) 76,644
438,200 - - (431,700) 6,500 83,057
2,280,300 (9,600,000) 4,592,700 (1,558,200) (4,285,200) 12,990,523 7,964,200 (10,379,100) 7,000,000 (2,850,000) 1,735,100 11,229,401 28,300 (250,000) (221,700) 3,314,602
1,042,800 (150,000) - - 892,800 1,646,572
- - - - - -
7,167,500 (606,900) (449,800) 6,110,800 17,081,454
65,000 (163,600) - (113,700) (212,300) 7,996,912
- - - - - (0)
- - - - - 0
- - - - - (0)
113,422,300 (117,883,039) 19,487,511 (21,825,711) (6,798,939) 166,131,474 736,300 (136,900) (775,800) (176,400) 461,703
10,000 (654,300) 648,800 (116,400) (111,900) 119,328
50,600 (2,453,700) 2,742,900 (161,300) 178,500 1,212,489 1,172,500 (1,158,100) - - 14,400 282,825
1,233,100 (4,266,100) 3,391,700 (277,700) 81,000 1,614,642 1,969,400 (4,403,000) 3,391,700 (1,053,500) (95,400) 2,076,345 115,391,700 (122,286,039) 22,879,211 (22,879,211) (6,894,339) 168,207,819 CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 126

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June 09, 2025 Packet Pg. 260
$-
$50.0
$100.0
$150.0
$200.0
$250.0
FY 2023
Audited
FY 2024
Audited
FY 2025
Projected
FY 2026
Proposed
FY 2027
Proposed
City Debt Service $0.9 $0.9 $- $- $-
Internal Service Funds $1.5 $1.6 $1.3 $1.5 $1.6
Special Revenue Funds $3.5 $3.9 $1.2 $1.0 $0.7
Capital Funds $71.7 $73.5 $30.6 $53.0 $56.8
General Fund $54.5 $59.0 $53.5 $40.0 $32.5
Enterprise Fund $80.5 $89.6 $85.1 $79.6 $76.6

FUND BALANCE STATUS
5-YEAR TREND
(IN MILLIONS)
CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 127

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SUMMARY OF SOURCES AND USES BY FUND TYPE
FY 2025-26

REVENUES

GENERAL FUND

ENTERPRISE
(WASTEWATER)
FUND
BUSINESS REGISTRATION 1,368,700 -
CHARGES FOR CURRENT SERVICES 6,618,400 -
FINES & FORFEITURES 168,600 -
FROM OTHER AGENCIES 12,000 -
LICENSES & PERMITS 3,213,500 -
OTHER REVENUE 749,000 27,824,300
OTHER TAX 2,276,400 -
PROPERTY TAX 20,970,400 -
SALES TAX 12,519,200 -
TRANSIENT OCCUPANCY TAX 4,350,000 -
PAMF TARGET REVENUE 912,400 -
USE OF MONEY & PROPERTY 4,814,200 1,073,500
VEHICLE IN LIEU 3,611,400 -
TOTAL REVENUES 61,584,200 28,897,800

EXPENDITURES

GENERAL FUND

ENTERPRISE
(WASTEWATER)
FUND
GENERAL GOVERNMENT 11,944,300 -
COMMUNITY DEVELOPMENT 9,887,600 -
PUBLIC SAFETY 28,281,200 -
PUBLIC WORKS 10,807,175 -
PARK & RECREATION 6,018,550 -
SEWER OPERATIONS - 9,033,500

EQUIPMENT REPLACEMENT - -

OPERATING - -
CONSTRUCTION - 15,277,300
DEBT SERVICE - 4,692,000
TOTAL EXPENDITURES 66,938,825 29,002,800

TRANSFERS

GENERAL FUND

ENTERPRISE
(WASTEWATER)
FUND
ALLOCATIONS IN FOR OVERHEAD 5,366,900 639,400
GENERAL TRANSFERS IN 870,500 -
ALLOCATIONS OUT FOR OVERHEAD (902,300) (5,298,600)
GENERAL TRANSFERS OUT (13,459,000) (770,500)
TOTAL TRANSFERS, ALLOCATIONS AND ONE-TIME (8,123,900) (5,429,700) NET CHANGES - SOURCES (USES) (13,478,525) (5,534,700)
EST AVAILABLE BEGINNING BALANCES 53,534,689 85,103,476
ESTIMATED ENDING FUND BALANCE $ 40,056,164 $ 79,568,776 CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 128

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SUMMARY OF SOURCES AND USES BY FUND TYPE
FY 2025-26
OTHER

REVENUE

FUNDS CAPITAL FUNDS

CITY DEBT

SERVICE

INTERNAL

SERVICE FUNDS

PROPOSED
FY 2026
TOTALS
- - - - 1,368,700
- - - - 6,618,400
- - - - 168,600
- - - - 12,000
- - - - 3,213,500
921,700 39,815,000 - 1,198,300 70,508,300
- - - - 2,276,400
- - - - 20,970,400
- - - - 12,519,200
- - - - 4,350,000
- - - - 912,400
- - - - 5,887,700
- - - - 3,611,400
921,700 39,815,000 - 1,198,300 132,417,000
OTHER

REVENUE

FUNDS CAPITAL FUNDS

CITY DEBT

SERVICE

INTERNAL

SERVICE FUNDS

PROPOSED
FY 2026
TOTALS
- - - - 11,944,300
- - - - 9,887,600
- - - - 28,281,200
- - - - 10,807,175
- - - - 6,018,550
- - - - 9,033,500
- 589,170 - - 589,170
306,900 835,100 - 3,984,900 5,126,900
- 27,403,083 - - 42,680,383
- - - - 4,692,000
306,900 28,827,353 - 3,984,900 129,060,778
OTHER

REVENUE

FUNDS CAPITAL FUNDS

CITY DEBT

SERVICE

INTERNAL

SERVICE FUNDS

PROPOSED
FY 2026
TOTALS
- - - 3,277,400 9,283,700
- 19,276,100 - - 20,146,600
(753,000) (2,060,100) - (269,700) (9,283,700)
(100,000) (5,817,100) - - (20,146,600)
(853,000) 11,398,900 - 3,007,700 -
(238,200) 22,386,547 - 221,100 3,356,222
1,188,763 30,606,465 (0) 1,312,542 171,745,936
$ 950,563 $ 52,993,012 $ (0) $ 1,533,642 $ 175,102,158
CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 129

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June 09, 2025 Packet Pg. 263

SUMMARY OF SOURCES AND USES BY FUND TYPE
FY 2026-27

REVENUES

GENERAL FUND

ENTERPRISE
(WASTEWATER)
FUND
BUSINESS REGISTRATION 1,422,800 -
CHARGES FOR CURRENT SERVICES 6,816,800 -
FINES & FORFEITURES 173,600 -
FROM OTHER AGENCIES 12,400 -
LICENSES & PERMITS 3,309,900 -
OTHER REVENUE 772,200 27,637,400
OTHER TAX 2,344,700 -
PROPERTY TAX 22,151,800 -
SALES TAX 12,925,800 -
TRANSIENT OCCUPANCY TAX 4,619,500 -
PAMF TARGET REVENUE 935,200 -
USE OF MONEY & PROPERTY 4,842,200 1,105,700
VEHICLE IN LIEU 3,828,100 -
TOTAL REVENUES 64,155,000 28,743,100

EXPENDITURES

GENERAL FUND

ENTERPRISE
(WASTEWATER)
FUND
GENERAL GOVERNMENT 12,351,500 -
COMMUNITY DEVELOPMENT 10,235,600 -
PUBLIC SAFETY 29,783,600 -
PUBLIC WORKS 11,178,775 -
PARK & RECREATION 6,229,870 -
SEWER OPERATIONS - 9,006,400

EQUIPMENT REPLACEMENT - -

OPERATING - -
CONSTRUCTION - 12,426,400
DEBT SERVICE - 4,690,000
TOTAL EXPENDITURES 69,779,345 26,122,800

TRANSFERS

GENERAL FUND

ENTERPRISE
(WASTEWATER)
FUND
ALLOCATIONS IN FOR OVERHEAD 5,527,900 658,500
GENERAL TRANSFERS IN 901,300 -
ALLOCATIONS OUT FOR OVERHEAD (942,500) (5,460,400)
GENERAL TRANSFERS OUT (7,371,000) (801,300)
TOTAL TRANSFERS AND ALLOCATIONS (1,884,300) (5,603,200) NET CHANGES - SOURCES (USES) (7,508,645) (2,982,900)
EST AVAILABLE BEGINNING BALANCES 40,056,164 79,568,776
ESTIMATED ENDING FUND BALANCE $ 32,547,519 $ 76,585,876 CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 130

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June 09, 2025 Packet Pg. 264

SUMMARY OF SOURCES AND USES BY FUND TYPE
FY 2026-27
OTHER

REVENUE

FUNDS CAPITAL FUNDS

CITY DEBT

SERVICE

INTERNAL

SERVICE FUNDS

PROPOSED
FY 2027
TOTALS
- - - - 1,422,800
- - - - 6,816,800
- - - - 173,600
- - - - 12,400
- - - - 3,309,900
935,600 20,324,900 - 1,233,100 50,903,200
- - - - 2,344,700
- - - - 22,151,800
- - - - 12,925,800
- - - - 4,619,500
- - - - 935,200
- - - - 5,947,900
- - - - 3,828,100
935,600 20,324,900 - 1,233,100 115,391,700
OTHER

REVENUE

FUNDS CAPITAL FUNDS

CITY DEBT

SERVICE

INTERNAL

SERVICE FUNDS

PROPOSED
FY 2027
TOTALS
- - - - 12,351,500
- - - - 10,235,600
- - - - 29,783,600
- - - - 11,178,775
- - - - 6,229,870
- - - - 9,006,400
- 562,594 - - 562,594
316,000 860,100 - 4,266,100 5,442,200
- 20,379,100 - - 32,805,500
- - - - 4,690,000
316,000 21,801,794 - 4,266,100 122,286,039
OTHER

REVENUE

FUNDS CAPITAL FUNDS

CITY DEBT

SERVICE

INTERNAL

SERVICE FUNDS

PROPOSED
FY 2027
TOTALS
- - - 3,391,700 9,578,100
- 11,963,700 - - 12,865,000
(775,800) (2,121,700) - (277,700) (9,578,100)
(100,000) (4,592,700) - (12,865,000)
(875,800) 5,249,300 - 3,114,000 -
(256,200) 3,772,406 - 81,000 (6,894,339)
950,563 52,993,012 (0) 1,533,642 175,102,158
$ 694,363 $ 56,765,418 $ (0) $ 1,614,642 $ 168,207,819
CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 131

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FY 2024

REVISED
FY 2024

AUDITED
FY 2025

REVISED
FY 2025

PROJECTED
FY 2026

PROPOSED
FY 2027

PROPOSED

ESTIMATED BEGINNING FUND BAL
Unrestricted $ 2,878,730 $ 2,878,730 $ 2,729,714 $ 2,729,714 $ 2,003,841 $ 1,355,320 Reserved or restricted 51,593,531 51,593,531 56,255,323 56,255,323 51,530,846 38,700,841 TOTAL BEGINNING FUND BALANCE $ 54,472,261 $ 54,472,261 $ 58,985,037 $ 58,985,037 $ 53,534,687 $ 40,056,162 Business Registration 1,265,900 1,342,096 1,316,600 1,370,800 1,368,700 1,422,800 Charges for Current Services 5,122,800 6,212,220 5,167,550 6,575,600 6,618,400 6,816,800 Fines & Forfeitures 319,000 159,740 328,700 164,300 168,600 173,600 From Other Agencies 11,200 158,591 11,600 88,200 12,000 12,400 Licenses & Permits 2,589,800 4,210,068 2,667,500 3,278,700 3,213,500 3,309,900 Other Revenue 931,600 4,184,624 834,400 995,250 749,000 772,200 Other Tax 2,101,100 2,326,044 2,121,400 2,274,000 2,276,400 2,344,700 Property Tax 17,980,000 18,553,488 19,464,800 19,570,400 20,970,400 22,151,800 Sales Tax 13,063,900 12,491,208 13,330,670 11,662,600 12,519,200 12,925,800 Transient Occupancy Tax 4,200,000 3,422,950 4,468,000 4,000,000 4,350,000 4,619,500 Use of Money & Property 2,974,500 8,282,668 3,234,700 3,654,600 4,814,200 4,842,200 PAMF Project 868,500 868,462 890,170 890,170 912,400 935,200 Vehicle in Lieu 3,911,000 3,659,037 3,407,000 4,536,900 3,611,400 3,828,100 TOTAL REVENUES 55,339,300 65,871,197 57,243,090 59,061,520 61,584,200 64,155,000

EXPENDITURES
Salaries & Benefits 20,211,450 17,926,648 21,169,055 19,759,925 23,365,625 24,259,625 Public Safety Legacy Obligations 3,470,100 3,392,906 3,797,500 3,806,000 4,223,800 4,886,600 Operating Expenditures 35,371,431 32,968,081 36,952,285 36,258,345 39,155,000 40,432,820 Capital Outlay 183,100 65,783 188,700 108,700 194,400 200,300 TOTAL EXPENDITURES 59,236,081 54,353,418 62,107,540 59,932,970 66,938,825 69,779,345

TRANSFERS
General Transfers In From Other Funds 712,400 712,400 855,800 855,800 870,500 901,300 Allocations In From Other Funds 4,182,300 4,182,300 4,482,700 4,482,700 5,366,900 5,527,900 Allocations Out to Other Funds (589,700) (589,700) (607,400) (607,400) (902,300) (942,500) General Transfers out (460,000) (460,000) (460,000) (460,000) (360,000) (371,000) TOTAL TRANSFERS (NET) $ 3,845,000 $ 3,845,000 $ 4,271,100 $ 4,271,100 $ 4,975,100 $ 5,115,700 USE OF UNASSIGNED FUND BALANCE $ 500,000 $ 750,000
TOTAL CHANGE IN OPERATING FUNDS $ (51,781) $ 15,362,778 $ (593,350) $ 3,399,650 $ 120,475 $ 241,355

OTHER SOURCES (USES) OF FUNDS
Transfer Capital Reserve (7,850,000) (7,850,000) (4,850,000) (4,850,000) (13,099,000) (7,000,000) One-time paydown of Unfunded (3,000,000) (3,000,000) (4,000,000) (4,000,000) One-time use of Fund Balance (500,000) (750,000)
TOTAL OTHER SOURCES (USES) OF FUNDS (10,850,000) (10,850,000) (8,850,000) (8,850,000) (13,599,000) (7,750,000) NET CHANGE IN FUND BALANCE $ (10,901,781) $ 4,512,778 $ (9,443,350) $ (5,450,350) $ (13,478,525) $ (7,508,645)

GENERAL FUND BALANCE
Unrestricted $ 1,881,422 $ 2,729,714 $ 4,029,006 $ 2,003,841 $ 1,355,320 $ 1,282,787 Restricted Fund Balances
Non-spendable Fund Balance 1,835,629 2,231,946 1,060,629 2,159,946 1,637,946 1,118,946 Economic Uncertainty Reserve 10,070,134 9,240,082 10,518,757 10,188,605 11,379,600 11,862,489 Strategic Property Reserve 7,191,795 10,191,795 10,191,795 12,191,795 12,191,795 12,191,795 Assigned Fund Balance
Unfunded Liabilities * 4,000,000 7,000,000 3,000,000 3,000,000 2,600,000 2,200,000 Strategic Property Reserve - reclass to Assigned 3,000,000 2,000,000 - - - Facilities and Infrastructure 15,591,500 25,591,500 20,741,500 23,990,500 10,891,500 3,891,500 Reserved or restricted 41,689,058 56,255,323 45,512,681 51,530,846 38,700,841 31,264,730 TOTAL ENDING FUND BALANCE $ 43,570,480 $ 58,985,039 $ 49,541,687 $ 53,534,687 $ 40,056,162 $ 32,547,517 Note: The Assigned Balance reserve of $3m will be used to offset the legacy costs of the former Belmont San Carlos Fire Department in FY 2025-26 through FY 2032-33

CITY OF SAN CARLOS

GENERAL FUND SUMMARY BUDGET
CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 132

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Note: totals may not add due to rounding
FY 2025

REVISED
FY 2025

PROJECTED
FY 2026

PROPOSED
FY 2027

PROPOSED
FY 2028

FORECAST
FY 2029

FORECAST
FY 2030

FORECAST
FY 2031

FORECAST
FY 2032

FORECAST
FY 2033

FORECAST
FY 2034

FORECAST
FY 2035

FORECAST
FY 2036

FORECAST
FY 2037

FORECAST

ESTIMATED BEGINNING FUND BALANCE
Unrestricted $ 2,730 $ 2,730 $ 2,004 $ 1,355 $ 1,283 $ 1,386 $ 1,221 $ 1,084 $ 1,737 $ 1,704 $ 1,351 $ 1,139 $ 910 $ 785 Reserved or restricted 56,255 56,255 51,531 38,701 31,265 28,735 26,557 24,203 22,496 21,537 21,160 20,968 23,855 27,035 TOTAL BEGINNING FUND BALANCE $ 58,985 $ 58,985 $ 53,535 $ 40,056 $ 32,548 $ 30,120 $ 27,779 $ 25,287 $ 24,233 $ 23,241 $ 22,511 $ 22,107 $ 24,765 $ 27,820 Business Registration 1,317 1,371 1,369 1,423 1,579 1,626 1,675 1,726 1,777 1,831 1,886 1,942 2,000 2,060 (a) Charges for Current Services 5,168 6,576 6,618 6,817 7,021 7,232 7,448 7,671 7,901 8,137 8,381 8,632 8,890 9,156 (b) Fines & Forfeitures 329 164 169 174 179 184 190 196 201 208 214 220 227 234 (c) From Other Agencies 12 88 12 12 13 13 14 14 14 15 15 16 16 17 (d) Licenses & Permits 2,668 3,279 3,214 3,310 3,409 3,511 3,617 3,725 3,837 3,952 4,071 4,193 4,319 4,448 (e) Other Revenue 834 995 749 772 795 819 843 868 894 920 948 976 1,005 1,035 (f) Other Tax 2,121 2,274 2,276 2,345 2,415 2,488 2,562 2,639 2,719 2,800 2,884 2,971 3,060 3,152 (g) Property Tax 19,465 19,570 20,970 22,152 23,355 24,584 25,864 27,113 28,436 29,836 31,292 32,805 34,378 36,013 (h) Sales Tax 13,331 11,663 12,519 12,926 13,307 13,699 14,103 14,520 15,129 15,676 16,239 16,820 17,417 18,033 (i) Transient Occupancy Tax 4,468 4,000 4,350 4,620 5,694 5,865 6,041 6,222 6,409 6,601 6,799 7,003 7,213 7,430 (j) Use of Money & Property 3,235 3,655 4,814 4,842 4,861 4,956 4,964 4,956 4,973 4,983 5,106 5,034 5,011 5,023 (k) PAMF Project 890 890 912 935 959 983 1,007 1,032 1,058 1,085 1,112 1,140 1,168 1,197 (l) Vehicle in Lieu 3,407 4,537 3,611 3,828 4,058 4,301 4,559 4,833 5,123 5,430 5,756 6,102 6,468 6,856 (m) TOTAL REVENUES $ 57,243 $ 59,062 $ 61,584 $ 64,155 $ 67,645 $ 70,261 $ 72,887 $ 75,514 $ 78,470 $ 81,473 $ 84,702 $ 87,852 $ 91,172 $ 94,653

EXPENDITURES
Salaries & Benefits 21,169 19,760 23,366 24,260 25,299 26,304 27,216 28,015 28,841 29,683 30,544 31,428 32,248 33,177 (n) Public Safety Legacy Obligations 3,798 3,806 4,224 4,887 4,985 5,182 5,236 5,284 5,336 5,311 5,283 2,383 2,292 2,054 (o) Operating Expenditures 36,952 36,258 39,155 40,433 42,839 44,670 46,503 48,418 50,417 52,505 54,744 57,022 59,398 61,884 (p) Capital Outlay 189 109 194 200 206 212 219 225 232 239 246 253 261 269 (q) TOTAL EXPENDITURES $ 62,108 $ 59,933 $ 66,939 $ 69,779 $ 73,329 $ 76,368 $ 79,174 $ 81,942 $ 84,826 $ 87,737 $ 90,817 $ 91,087 $ 94,199 $ 97,384

TRANSFERS
General Transfers In From Other Funds 856 856 871 901 933 967 976 938 975 1,014 1,055 1,097 1,141 1,186 Allocations In From Other Funds 4,483 4,483 5,367 5,528 5,694 5,865 6,040 6,222 6,408 6,601 6,798 7,002 7,212 7,429 Allocations Out to Other Funds (607) (607) (902) (943) (981) (1,107) (1,140) (1,174) (1,209) (1,244) (1,281) (1,319) (1,358) (1,399) General Transfers out (460) (460) (360) (371) (389) (459) (582) (611) (811) (836) (861) (887) (914) (941) TOTAL TRANSFERS (NET) $ 4,271 $ 4,271 $ 4,975 $ 5,116 $ 5,257 $ 5,265 $ 5,295 $ 5,374 $ 5,364 $ 5,534 $ 5,711 $ 5,893 $ 6,081 $ 6,275 USE OF UNASSIGNED FUND BALANCE 500 750 500 900 1,000 1,100 1,000 800 500 TOTAL CHANGE IN OPERATING FUNDS $ (593) $ 3,400 $ 120 $ 241 $ 73 $ 58 $ 8 $ 46 $ 8 $ 70 $ 96 $ 2,658 $ 3,055 $ 3,544

OTHER SOURCES (USES) OF FUNDS
Transfer Capital Reserve (4,850) (4,850) (13,099) (7,000) (2,000) (1,500) (1,500) - - - - - - - One-time use of Reserves (500) (750) (500) (900) (1,000) (1,100) (1,000) (800) (500) - - - One-time paydown of Unfunded (4,000) - - - - - - - - - - - - - TOTAL OTHER SOURCES (USES) OF FUNDS (8,850) (4,850) (13,599) (7,750) (2,500) (2,400) (2,500) (1,100) (1,000) (800) (500) - - - NET CHANGE IN FUND BALANCE $ (9,443) $ (1,450) $ (13,479) $ (7,509) $ (2,427) $ (2,342) $ (2,492) $ (1,054) $ (992) $ (730) $ (404) $ 2,658 $ 3,055 $ 3,544

GENERAL FUND BALANCE
Unrestricted $ 4,029 $ 2,004 $ 1,355 $ 1,283 $ 1,386 $ 1,221 $ 1,084 $ 1,737 $ 1,704 $ 1,351 $ 1,139 $ 910 $ 785 $ 989 Non-spendable Fund Balance 1,061 2,160 1,638 1,119 1,119 1,119 1,119 1,119 1,119 1,119 1,119 1,119 1,119 1,119 Economic Uncertainty Reserve 10,519 10,189 11,380 11,862 11,733 11,455 9,501 8,194 7,634 7,458 7,265 8,653 10,833 12,173 Strategic Property Reserve 10,192 12,192 12,192 12,192 12,192 12,192 12,192 12,192 12,192 12,192 12,192 12,192 12,192 12,192 Assigned Fund Balance - - - - - - - -
Unfunded Liabilities * 3,000 3,000 2,600 2,200 1,800 1,400 1,000 600 200 - - - - - Strategic Property Reserve - - - -
Facilities and Infrastructure 20,742 - - - 1,892 392 392 392 392 392 392 1,892 2,892 4,892 Reserved or restricted $ 45,513 $ 51,531 $ 38,701 $ 31,265 $ 28,735 $ 26,557 $ 24,203 $ 22,496 $ 21,537 $ 21,160 $ 20,968 $ 23,855 $ 27,035 $ 30,375 TOTAL ENDING FUND BALANCE $ 49,542 $ 57,535 $ 40,056 $ 32,548 $ 30,120 $ 27,779 $ 25,287 $ 24,233 $ 23,241 $ 22,511 $ 22,107 $ 24,765 $ 27,820 $ 31,364 Notes: Long term model reflects a portion of the Unassgined Fund Balance to balance the operating expenses. Planned large developments should close this gap but the timing is uncertain so have not been forecasted.

The Assigned Fund Balance reserve will be used to offset the legacy costs of the former Belmont San Carlos Fire Department in FY 2024-25 through FY 2031-32 (a) Business Registration revenues assume increases of 4% based on the City's Municipal Code. (b) Current Charges for Services assumes 3% inflationary increases each year. This revenue can also fluctuate based on the timing of large development plan check fees expected. (c) Fines and Forfeiture revenues in FY 28 and beyond reflect 3% annual inflationary increases. (d) From Other Agencies is revenue received from grant funding which can vary from year to year. (e) Licenses and Permit revenue can fluctuate from year to year based on the timing of large development. Future years assume inflationary increases of 3%. (f) Other Revenues include cost reimbursements, donations and other miscellaneous receipts. Future years include inflationary increases of 3%. (g) Other taxes include franchise taxes from utilities and the forecasts are based on trend data. (h) Property tax projections are developed in conjunction with our 3rd party consultants. Revenues can vary from year to year based on completion of large developments. (i) Sales tax projections assume general inflationary increases and in conjunction with information from our 3rd party consultants. (j) Transient Occupancy Tax projections assume a return to business travel and increases in occupancy rates. (k) Other Uses of Money and Property include investment income and property leases. Future years assume inflationary increases and use of funds to cover capital expenditures. (l) Palo Alto Medical Foundation (PAMF) revenues are forecasted based on contracted amounts. (m) Vehicle in Lieu revenue projections are forecasted based on information from our third party consultants as well as the County of San Mateo. (n) Salaries and benefits assumes cost increases for pension and health care based on known and projected negotiated benefits. (o) Public Safety Obligations include costs related to the Belmont San Carlos Fire Department (BCSFD) which CalPERS shows as paid off effective 6/2033. (p) Operating expenses projections include known increases based on contractual obligations with our Public Safety contracts as well as inflationary assumptions ranging from 3-5%. (q) Capital outlay projections include normal inflationary increases of 3%.

CITY OF SAN CARLOS
GENERAL FUND LONG TERM FORECAST (in thousands)
CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027
133

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REVENUES Revised Audited Revised Projected Proposed Proposed 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27
BUSINESS REGISTRATION 1,265,900 1,342,096 1,316,600 1,370,800 1,368,700 1,422,800 CHARGES FOR CURRENT SERVICES 5,122,800 6,212,220 5,167,550 6,575,600 6,618,400 6,816,800 FINES & FORFEITURES 319,000 159,740 328,700 164,300 168,600 173,600 FROM OTHER AGENCIES 11,200 158,591 11,600 88,200 12,000 12,400 LICENSES & PERMITS 2,589,800 4,210,068 2,667,500 3,278,700 3,213,500 3,309,900 OTHER REVENUE 931,600 4,184,624 834,400 995,250 749,000 772,200 OTHER TAX 2,101,100 2,326,044 2,121,400 2,274,000 2,276,400 2,344,700 PROPERTY TAX 17,980,000 18,553,488 19,464,800 19,570,400 20,970,400 22,151,800 SALES TAX 13,063,900 12,491,208 13,330,670 11,662,600 12,519,200 12,925,800 TRANSIENT OCCUPANCY TAX 4,200,000 3,422,950 4,468,000 4,000,000 4,350,000 4,619,500 PAMF TARGET REVENUE 868,500 868,462 890,170 890,170 912,400 935,200 USE OF MONEY & PROPERTY 2,974,500 8,282,668 3,234,700 3,654,600 4,814,200 4,842,200 VEHICLE IN LIEU 3,911,000 3,659,037 3,407,000 4,536,900 3,611,400 3,828,100 TOTAL REVENUES 55,339,300 65,871,197 57,243,090 59,061,520 61,584,200 64,155,000 EXPENDITURES Revised Audited Revised Projected Proposed Proposed 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27
GENERAL GOVERNMENT 5,619,675 4,691,578 5,269,230 5,011,625 5,893,900 6,084,300 ADMINISTRATIVE SERVICES 5,566,250 4,879,262 5,728,150 5,487,300 6,050,400 6,267,200 COMMUNITY DEVELOPMENT 8,708,900 7,274,199 9,109,650 8,507,950 9,887,600 10,235,600 POLICE DEPARTMENT 12,891,400 12,187,838 13,711,770 13,298,270 14,633,500 15,013,600 FIRE DEPARTMENT 12,244,800 11,749,707 12,899,900 12,687,600 13,647,700 14,770,000 PUBLIC WORKS 9,130,658 8,604,635 10,032,025 9,584,300 10,807,175 11,178,775 PARKS & RECREATION 5,074,398 4,966,202 5,356,815 5,355,925 6,018,550 6,229,870 TOTAL EXPENDITURES 59,236,081 54,353,422 62,107,540 59,932,970 66,938,825 69,779,345 ONE-TIME COSTS 3,000,000 3,000,000 4,000,000 4,000,000 - - TRANSFER OUT (PY SAVINGS) TO CAPITAL FUNDS 7,850,000 7,850,000 4,850,000 4,850,000 13,099,000 7,000,000 TRANSFERS Revised Audited Revised Projected Proposed Proposed 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27
ALLOCATIONS IN FOR OVERHEAD 4,182,300 4,182,300 4,482,700 4,482,700 5,366,900 5,527,900 GENERAL TRANSFERS IN 712,400 712,400 855,800 855,800 870,500 901,300 ALLOCATIONS OUT FOR OVERHEAD (589,700) (589,700) (607,400) (607,400) (902,300) (942,500) GENERAL TRANSFERS OUT (460,000) (460,000) (460,000) (460,000) (360,000) (371,000) TOTAL TRANSFERS AND ALLOCATIONS 3,845,000 3,845,000 4,271,100 4,271,100 4,975,100 5,115,700 NET CHANGES - SOURCES (USES) (10,901,781) 4,512,774 (9,443,350) (5,450,350) (13,478,525) (7,508,645) BEGINNING FUND BALANCE 54,472,261 54,472,261 58,985,034 58,985,034 53,534,684 40,056,159 ESTIMATED ENDING FUND BALANCE $ 43,570,480 $ 58,985,034 $ 49,541,684 $ 53,534,684 $ 40,056,159 $ 32,547,514

GENERAL FUND SUMMARY
CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 134

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GENERAL FUND OPERATING BUDGET
$-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
FY 2026 Proposed Revenues FY 2027 Proprosed Revenues
Other Tax $2.28 $2.34
Other $1.84 $1.89
Licenses & Permits $3.21 $3.31
Uses of Money & Property $4.81 $4.84
Vehicle in Lieu $3.61 $3.83
Charges for Services $6.62 $6.82
TOT/Business Registration $5.72 $6.04
Sales Tax $12.52 $12.93
Property Tax $20.97 $22.15

GENERAL FUND REVENUES
$ in Millions
$-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
FY 2026 Proposed Expenditures FY 2027 Proposed Expenditures Parks & Recreation $6.02 $6.23
Community Development $9.89 $10.24
Public Works $10.81 $11.18
General Government $11.94 $12.35
Fire $13.65 $14.77
Police $14.63 $15.01

GENERAL FUND EXPENDITURES
$ in Millions
CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027
135

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GENERAL FUND ALLOCATIONS IN (0001) Revised Audited Revised Projected Proposed Proposed FOR SERVICES PROVIDED 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27 FROM WASTEWATER (0006) 2,929,700 2,929,700 3,192,700 3,192,700 3,888,500 4,005,200 FROM GAS TAX (0016) 403,800 403,800 415,800 415,800 428,100 440,800 FROM STORMWATER (0015) 173,100 173,100 178,200 178,200 233,500 240,700 FROM HOUSING (0029) 317,300 317,300 326,900 326,900 436,700 449,800 FROM HOUSING COMPLIANCE AND ASSISTANCE (0031) 104,100 104,100 107,200 107,200 110,400 113,700 FROM WORKERS COMPENSATION (0032) 106,500 106,500 109,700 109,700 113,000 116,400 FROM RISK MANAGEMENT (0033) 147,800 147,800 152,200 152,200 156,700 161,300 SUB TOTAL GENERAL FUND----> 4,182,300 4,182,300 4,482,700 4,482,700 5,366,900 5,527,900 WASTEWATER FUND ALLOC IN (0006)
FOR SERVICES PROVIDED 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27 FROM GENERAL FUND (0001) 52,100 52,100 53,700 53,700 55,300 56,900 FROM GAS TAX (0016) 245,900 245,900 253,300 253,300 260,900 268,700 FROM STORMWATER (0015) 351,700 351,700 362,300 362,300 323,200 332,900 SUB TOTAL WASTEWATER ----> 649,700 649,700 669,300 669,300 639,400 658,500 WORKERS COMP ALLOC IN (0032)
FOR SERVICES PROVIDED 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27 FROM GENERAL FUND (0001) 268,600 268,600 276,500 276,500 511,400 540,000 FROM WASTEWATER (0006) 113,500 113,500 116,900 116,900 102,900 108,800 SUB TOTAL WORKERS COMP ----> 382,100 382,100 393,400 393,400 614,300 648,800 RISK MANAGEMENT ALLOC IN (0033)
FOR SERVICES PROVIDED 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27 FROM GENERAL FUND (0001) 269,000 269,000 277,200 277,200 335,600 345,600 FROM WASTEWATER (0006) 822,200 822,200 846,900 846,900 1,307,200 1,346,400 FROM STORMWATER (0015) 113,900 113,900 117,300 117,300 196,300 202,200 FROM GAS TAX (0016) 531,100 531,100 547,000 547,000 824,000 848,700 SUB TOTAL RISK MGMT ----> 1,736,200 1,736,200 1,788,400 1,788,400 2,663,100 2,742,900 TOTAL ALLOCATIONS IN ----> 6,950,300 6,950,300 7,333,800 7,333,800 9,283,700 9,578,100 Revised Audited Revised Projected Proposed Proposed
Revised Audited Revised Projected Proposed Proposed

ALLOCATION AND TRANSFER SUMMARY
Revised Audited Revised Projected Proposed Proposed
CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 136

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ALLOCATION AND TRANSFER SUMMARY
GENERAL FUND TRANSFERS IN (0001)
2023-24 2023-24 2024-25 2024-25 2025-26 2026-27
WASTEWATER RIGHT OF WAY (0006) 712,400 712,400 740,900 740,900 770,500 801,300 POLICE GRANTS FUND (0017) - - - - 100,000 100,000
CLOSE OUT LIBRARY TENANT FUND (0095) - - 114,900 114,900 - - SUB TOTAL ----> 712,400 712,400 855,800 855,800 870,500 901,300 EQUIPMENT REPLACEMENT (0010)
TRANSFERS IN 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27 FOR EQUIPMENT REPLACEMENT 260,000 260,000 260,000 260,000 242,000 250,000 FOR TECHNOLOGY REPLACEMENT 200,000 200,000 200,000 200,000 118,000 121,000 SUB TOTAL ----> 460,000 460,000 460,000 460,000 360,000 371,000 GAS TAX (0016)
TRANSFERS IN 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27 FROM GENERAL FUND (0001) 2,850,000 2,850,000 2,850,000 2,850,000 2,850,000 - FROM MEASURE A/K FUND (0014) 1,200,000 1,200,000 1,236,000 1,236,000 1,523,000 1,311,000 FROM MEASURE W FUND (0018) 495,000 495,000 406,900 406,900 619,100 431,700 FROM CAPITAL IMPROVEMENT FUND (0025) 3,275,000 3,275,000 3,275,000 3,275,000 3,275,000 2,850,000 SUB TOTAL ----> 7,820,000 7,820,000 7,767,900 7,767,900 8,267,100 4,592,700 CAPITAL IMPROVEMENTS (0025)
TRANSFERS IN 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27 PRIOR YR SAVINGS FROM GENERAL (0001) 5,000,000 5,000,000 2,000,000 2,000,000 10,249,000 7,000,000 FROM PARK IN-LIEU FUND (0027) - - - - - -
CLOSE OUT PARKING IN LIEU FUND (0028) 250,000 250,000 73,655 83,829 - - CLOSE OUT LIBRARY TENANT FUND (0095) - - 933,815 1,577,398 - - SUB TOTAL ----> 5,250,000 5,250,000 3,007,470 3,661,227 10,249,000 7,000,000 PARK IN LIEU FUND (0027) Revised Audited Revised Projected Proposed Proposed TRANSFERS IN 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27 FROM GENERAL FUND (0001)
FROM CAPITAL IMPROVEMENT FUND (0025) - - - - 400,000 -
SUB TOTAL ----> - - - - 400,000 -
LMI HOUSING FUND (0031)
TRANSFERS IN 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27 FROM HOUSING IN LIEU FUND (0029) - - - - - -
SUB TOTAL ----> - - - - - -
DEBT SERVICE FUND (0093)
TRANSFERS IN 2023-24 2023-24 2024-25 2024-25 2025-26 2026-27 CLOSE OUT LIBRARY TENANT FUND (0095) - - 283,266 142,968 - - SUB TOTAL ----> - - 283,266 142,968 - -
TOTAL TRANSFERS IN ----> 14,242,400 14,242,400 12,374,436 12,887,895 20,146,600 12,865,000 Revised Audited Revised Projected Proposed Proposed
Revised Audited Revised Projected Proposed Proposed
Revised Audited Revised Projected Proposed Proposed
Revised Audited Revised Projected Proposed Proposed
Revised Audited Revised Projected Proposed Proposed
Revised Audited Revised Projected Proposed Proposed
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CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 138

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REVENUE BUDGET ASSUMPTIONS
The Administrative Services Director and the Finance Division prepare the revenue projections and review these projections with the City Manager and Assistant City Manager. To make these projections as close as possible to actual, the following techniques are used, depending on the revenue source’s unique characteristics. In practice, most revenue source projections combine several of the methodologies:

Informed Expert Judgment. The Administrative Services Director and Financial Services Manager meet with the department directors to discuss trends in revenues in their respective areas. Staff also meet with an outside consultant who reviews property tax, sales tax, business registration, and transient occupancy taxes (TOT) on a regular basis to discuss potential increases or decreases to those revenue streams.

Trending. The Finance Division estimates current year and projects future year revenues based on a combination of current trends and historical performance.

Economic Models. The Finance Division relies on anticipated changes to local, regional, and national economic conditions and their resulting effects on individual revenue sources.

Estimates from the State of California and San Mateo County. The Finance Division reviews the information regarding property tax assessed value, transfer payments, and refunds from the Education Relief Augmentation Fund (ERAF) that is provided by the state and county.

Non-recurring revenues are forecasted separately and scheduled only for the year or years in which they are anticipated. Certain revenue sources are limited in use by law or local policy, such as: gasoline taxes, development charges, Measure A/Measure K taxes, Measure W taxes, assessment district charges, and grants. Forecasts of expenditures for public street construction and other capital improvements are identified separately for comparison with their restricted revenue sources.

Unlike appropriations that can be established at the direction of the City, many key revenues are controlled by external forces. For example, property tax revenues vary with real estate values, and development-related revenue is affected by the volume and type of building permits and plan check requests. Sales tax and TOT revenues are subject to local and national economic cycles, businesses’ decisions to locate in the community, and travel activity of businesses and tourists.

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The chart below reflects Citywide revenues proposed in the Biennial Budget for Fiscal Year (FY) 2025-26 and FY 2026-27.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY2026
FY2027
FY2026 FY2027
Fines & Forfeitures/PAMF 1% 1%
Licenses & Permits 2% 3%
Transient Occupancy Tax 3% 4%
Other Revenue 3% 4%
Business Reg/Other Tax 3% 3%
Vehicle In Lieu 3% 3%
Use Of Money & Property 4% 4%
Charges For Current Services 5% 6%
Capital Projects Funding 30% 18%
Sales Tax 9% 11%
Property Tax 16% 19%
Enterprise Revenues 21% 24%
FY 2026 & FY 2027 Citywide Operating Revenues By
Major Category and Source
CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 140

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DESCRIPTION OF GENERAL FUND REVENUE SOURCES
The majority of the City’s General Fund revenue is produced from a small number of sources, such as sales tax, property tax, vehicle license fees, business registration, charges for services, and TOT. The table below outlines the General Fund revenue estimates for the Biennial Budget for FY 2025-27. The sections following the table discuss the assumptions used in determining the revenue estimates.

Revenue Type
FY 2025-26
Proposed
% of
Total
FY 2026-27
Proposed
% of
Total
PROPERTY TAX $20,970,400 33% $22,151,800 36%
SALES TAX 12,519,200 20% 12,925,800 20%
CHARGES FOR SERVICES 6,618,400 11% 6,816,800 11%
USE OF MONEY & PROPERTY 4,814,200 9% 4,842,200 6%
TRANSIENT OCCUPANCY TAX 4,350,000 7% 4,619,500 7%
VEHICLE IN LIEU 3,611,400 6% 3,828,100 6%
LICENSES & PERMITS 3,213,500 5% 3,309,900 5%
OTHER TAX 2,276,400 4% 2,344,700 4%
OTHER REVENUE CATEGORIES 1,842,000 3% 1,893,400 3%
BUSINESS REGISTRATION 1,368,700 2% 1,422,800 2%
TOTAL $61,584,200 100% $64,155,000 100%
Property Taxes
FY 2025-26. Property tax revenue is collected and distributed by the County of San Mateo based on applying the constitutionally limited tax rate of 1% to the assessed value of certain secured and unsecured properties as determined by the County Assessor.

The City’s share of this property tax revenue is approximately 13-14%, less the rebate back to the state for ERAF, which results in about 11 cents per dollar of tax collected in revenue for the City. The City of San Carlos and the County of San Mateo have entered into a Teeter agreement, whereby the City receives 100% of its share of the taxes assessed, with the County retaining all delinquent penalties and interest collected. Property tax is approximately 33% of General Fund revenues.

The City considers the historical rate of changes and economic conditions when forecasting future revenue and works with a third-party consultant to analyze the data. For FY 2025-26, property tax is projected to increase 7.2% over the FY 2024-25 projections. The primary reason for the increase is due to increases in the property tax assessment rolls to account for changes in property ownership and tenant improvements. In FY 2024-25, the assessment rolls increased $0.9 billion, or 5.6%, over the prior fiscal year.

FY 2026-27. For FY 2026-27, property tax is projected to increase by 5.6% over the FY 2025-26 proposed budgeted property tax revenues. This continues to assume growth in the assessment rolls associated with the large-scale development projects on the east side of the City. Staff continue to work closely with the City’s consultants to project and monitor this revenue.

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Sales Tax
FY 2025-26. Sales tax is collected by the State Board of Equalization against tangible items. The local portion is distributed to cities and counties based on the location of the sale. The City considers the historical rate of change and economic conditions and works with a third-party consultant to analyze the data when forecasting future revenue. For FY 2025-26, sales tax is projected to grow 7.3% over the FY 2024-25 projections. However, this is a decrease of 6.1% of the FY 2024-25 revised budget. Uncertainties with the economy, tariffs, and interest rates are expected to reduce discretionary spending among consumers. The building and construction sector is typically San Carlos’ largest sales tax producer. Tariffs on lumber, steel, and aluminum combined with impacts to the workforce are expected to reduce the City’s revenue. The proposed budget projects revenues back to 2022 and 2023 levels. Sales tax is approximately 20% of General Fund revenues.

FY 2026-27. For FY 2026-27, sales tax is projected to grow at 3.3% over the FY 2025-26 budgeted sales tax revenues as a result of assumed inflationary increases. This revenue is reviewed quarterly with our third-party consultants and is adjusted based on current and projected activity.

Charges for Current Services
FY 2025-26. Cost of Services fees are revised on an annual basis by the Consumer Price Index (CPI) and every three to five years based on a comprehensive review of actual costs. The last comprehensive study was performed in June 2022. This revenue source is approximately 11% of General Fund revenues. The increase of 0.7% over the FY 2025-26 projections is primarily due to the timing of plan check revenue received from large developments on the east side of the city.

The timing of the receipt of these fees is difficult to predict and can vary from year to year.

Although the revenue is projected to increase slightly from FY 2024-25 projections, it is anticipated to increase 28.1% over the FY 2024-25 revised budget. The FY 2025-26 budget assumes development fee revenue based on an average of the actual revenue received over the past four years. These fees are typically pass through revenues and have a corresponding expense for professional consulting and technical experience necessary to facilitate these projects. Due to the uncertainty at the federal level related to drug approvals and funding, it is possible that we could see a slowdown in the biotechnology development that has been planned for the east side of the city.

FY 2026-27. For FY 2026-27, revenues are projected to increase by 3.0%, due to the continued demand for recreation services and the timing of large development plan check activities. As noted above, the timing of large-scale development projects can cause this category to fluctuate from year to year. There may be more projects on the horizon that would increase this revenue stream which will be adjusted during the mid-cycle budget review.

Use of Money and Property
FY 2025-26. This revenue is generated from property rentals and investment income. For FY 2025-26, this revenue category is estimated to be 31.7%, or $1.2 million higher than the FY 2024- 25 projections. The increase is due to the inclusion of the fourth digital billboard and the timing of cash disbursements and the allocations of the total investment portfolio amongst all of the funds.

At the end of each quarter, investment income is allocated based on the percentage of cash in each fund. The amount of allocation can change from year to year based on the total cash balance held in each fund.

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FY 2026-27. The FY 2026-27 revenue estimates reflect an increase of 0.6% over the FY 2025- 26 estimates.

Transient Occupancy Tax (TOT)
FY 2025-26. Effective January 1, 2019, in compliance with the November 2018 statewide election results for Measure QQ and subsequent adoption of City of San Carlos Ordinance 1532 on December 10, 2018, the Uniform Transient Occupancy Tax on hotel guests increased from 10% to 12%, with a 0.5% increase per year for subsequent years up to a maximum rate of 14%. As of January 1, 2025, the TOT rate is 14%. The tax is paid by the guests staying at these accommodations and remitted by the hotels to the City on a quarterly basis. Following the onset of the COVID-19 pandemic, hotel occupancy dropped significantly pursuant to the state’s stay-athome orders. Although the hotel industry began to rally in FY 2021-22 , the industry has not yet returned to historical occupancy as business travel has not yet fully returned to pre-pandemic rates. We anticipate the industry to continue to recover and as such, the revenue for FY 2025-26 is budgeted at $4.4 million, or 8.8% higher than FY 2024-25 projections. However, this proposed budget represents a decrease of 2.6% of the FY 2024-25 revised budget.

FY 2026-27. The revenue for FY 2026-27 is budgeted at $4.6 million, as a result of the projected rise in occupancy rates following the return and demand for business and residential travel.

Vehicle in-Lieu
FY 2025-26. This revenue is generated by vehicle registration fees. Vehicle in-Lieu is approximately 6% of General Fund revenues. As a result of the passage of the Budget Act of 2004, the majority of this revenue is now “backfilled” by the County, as a “property tax in-lieu” payment rather than paid directly by the State. The FY 2004-05 payments received by the City established the base year for this revenue stream. All future payments to cities should be based on the growth in assessed valuations rather than actual vehicle license fee revenue received by the state. The county has informed the City that if the “backfilled” amount exceeds a certain limit, there will not be enough money to fully cover the amount owed. As a result, San Mateo County experienced countywide shortfalls in prior years. The projected shortfall for San Carlos is approximately $2 million per year.

The FY 2025-26 Vehicle in-Lieu is projected to decrease 20.4% over the FY 2024-25 projections due to the one-time repayment of revenue received in FY 2024-25 in the amount of $1.4 million for FY 2022-23.

FY 2026-27. For FY 2026-27, revenue is budgeted at $3.8 million, with a 6.0% increase over the FY 2025-26 budgeted vehicle in-lieu revenue, which is based on the information provided by the City’s third-party consultants. Although this number is an increase over the prior fiscal year, it is still projected to be $2 million less as a result of the countywide shortfalls.

Licenses & Permits
FY 2025-26. This revenue is generated by construction permits. For FY 2025-26, this revenue category is expected to decrease by 2.0%, from the FY 2024-25 projections. The timing of when developers pull their permits can vary, and as such, this category can fluctuate greatly from year to year.

FY 2026-27. The FY 2026-27 revenue estimates are 3% higher than the FY 2025-26 estimates.

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Other Taxes
FY 2025-26. This revenue includes franchise taxes from utilities. It is budgeted to increase by

0.1% over the FY 2024-25 projections. The revenue is projected based on historical averages and included in these franchise taxes are revenue from cable companies. Over the past few years, we have seen cable franchise revenues dropping as consumers move to streaming services.

FY 2026-27. The FY 2026-27 revenue estimates are 3% higher than the FY 2025-26 estimates and account for general inflationary increases.

Other Revenue Categories
FY 2025-26. This revenue is generated by fines and forfeitures, grants, and contractual payments that were part of the Palo Alto Medical Foundation Development Agreement. This revenue source is approximately 3% of General Fund revenues. For FY 2025-26, this revenue category is expected to decrease by 13.8%, from the FY 2024-25 projections. Grants and funds from other agencies are not budgeted and therefore are recorded when received. The FY 2024-25 projections include reimbursements from the Federal Emergency Management Agency (FEMA) which are not anticipated to be received again.

FY 2026-27. Revenues for FY 2026-27 are budgeted to increase by 2.8% over the FY 2025-26 estimates and account for general inflationary increases.

Business Registration Fee
FY 2025-26. This revenue is generated by a registration fee paid by all businesses operating within the city. This revenue source is approximately 2% of General Fund revenues.

As written in the City’s Municipal Code, business registration will increase annually by 4%.

Revenues are estimated to increase by 4.0% over the FY 2024-25 revised budget, which is in line with the increase specified in the City’s Municipal Code.

FY 2026-27. Business registration revenues for FY 2026-27 are budgeted to increase by 4% over the FY 2025-26 estimates, which is in line with the annual increase specified by the Municipal Code.

DESCRIPTION OF WASTEWATER FUND REVENUE SOURCES
The majority of the City’s Wastewater Fund (Enterprise) revenue comes from wastewater rates and collection fees. The table below outlines the wastewater revenue estimates for the Biennial Budget for FY 2025-27. The sections following the table discuss the assumptions used in determining the revenue estimates.

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Revenue Type
FY 2025-26
Proposed
% of
Total
FY 2026-27
Proposed
% of
Total
WASTEWATER COLLECTION $23,104,300 80% $23,984,300 83%
CONNECTION FEES $4,720,000 16% $3,840,000 13%
OTHER REVENUE CATEGORIES 1,073,500 4% 1,105,700 4%
TOTAL $28,897,800 100% $28,930,000 100%
Wastewater Collection Fees
The City owns and operates a wastewater collection system consisting of approximately 105 miles of sanitary sewer pipelines and six pump stations. The City’s sewer utility system is paid for by a self‐supporting enterprise fund, with sewer service charges providing roughly 80% of total revenues. As such, the City’s sewer rates need to be set at levels adequate to fund the cost of providing wastewater service. These costs include both the City’s sewer collection system operating and capital improvement funding needs, and the City’s share of the cost for treatment plant operations and debt service.

The City also requires sewer connection fees on new or expanded connections to the sewer system. Connection fees are levied as a condition of development or change in use, and are designed to recover the cost of capacity in infrastructure and assets benefitting new development.

These capacity charges are one‐time fees, paid upfront as a condition of new development or expansion.

FY 2025-26 revenue estimates are $27.8 million, which represents an increase of 23%, over the FY 2024-25 projections. The increase reflects an assumption of $4.7 million from new development connection fees and the sewer rate increases of 3% as previously approved by the City Council.

FY 2026-27. The FY 2026-27 revenue estimates reflect a decrease of 0.7%. Although it is estimated that there will be a 3% rate increase to the ratepayers, revenue estimates have been adjusted for projected connection fees.

Other Revenue Categories
FY 2025-26. This revenue is generated from investment income. For FY 2025-26, this revenue category is estimated to be 44.6% lower than the FY 2024-25 projections. The decrease is due to the assumption of the timing of cash receipts from capacity fees and the disbursement of funds to pay for infrastructure projects. At the end of each quarter, investment income is allocated based on the percentage of cash in each fund. The amount of allocation can change from year to year based on the total cash balance held in each fund.

FY 2026-27. The FY 2026-27 revenue estimates reflect an increase of 3% over the FY 2025-26 estimates.

DESCRIPTION OF GAS TAX FUND REVENUE SOURCES
The majority of the City’s Gas Tax Fund revenue comes from revenue received under the State of California, Street and Highways Code Sections 2103-2108 otherwise known as the Highway Users Tax Account (HUTA). The State of California imposes per-gallon excise taxes on gasoline CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 145

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and diesel fuel, sales taxes on gasoline and diesel fuel and registration taxes on motor vehicles with allocations dedicated to transportation purposes. The local portion of these allocations flow through the HUTA. HUTA funds must be expended for research, planning, construction, improvement, maintenance and operation of public streets and highways (and their related public facilities for nonmotorized traffic). In addition to this funding, a portion of revenue comes from Section 2031 or the Road Maintenance and Rehabilitation Account (RMRA). RMRA revenues are allocated revenues from the Road Repair and Accountability Act of 2017. RMRA revenues must be expended for road maintenance and rehabilitation, safety projects, traffic control devices and complete street components. The table below outlines the gas tax revenue estimates for the Biennial Budget for FY 2025-27. The sections following the table discuss the assumptions used in determining the revenue estimates.

Revenue Type
FY 2025-26
Proposed
% of
Total
FY 2026-27
Proposed
% of
Total
HUTA & RMRA FUNDS $1,683,300 76% $1,733,600 76%
OTHER REVENUE CATEGORIES $534,300 24% $546,700 24%
TOTAL $2,217,600 100% $2,280,300 100%
HUTA and RMRA Funds
FY 2025-26. revenue estimates are $1.7 million, which represents an increase of 1.9%, over the FY 2024-25 projections based on the Department of Finance estimates. These estimates are compiled and shared on the CaliforniaCityFinance.com webpage for all California agencies.

FY 2026-27. The FY 2026-27 revenue estimates reflect an increase of 3.0%. This reflects general inflationary growth and may need to be adjusted during the mid-cycle review.

Other Revenue Categories
FY 2025-26. This revenue is generated from investment income, permits, cost reimbursements for sidewalk repairs and Measure M funding. For FY 2025-26, this revenue category is estimated to be 45.0% lower than the FY 2024-25 projections. The decrease is due to the assumption of the timing of the disbursement of funds to pay for infrastructure projects. During FY 2024-25, the majority of the projects were anticipated to be funded at the end of the fiscal year allowing the fund balance to grow. At the end of each quarter, investment income is allocated based on the percentage of cash in each fund. The amount of allocation can change from year to year based on the total cash balance held in each fund.

FY 2026-27. The FY 2026-27 revenue estimates reflect an increase of 2.3% increase over the FY 2025-26 estimates based on general inflationary growth.

DESCRIPTION OF CAPITAL IMPROVEMENT FUND REVENUE SOURCES The majority of the City’s General Capital Improvement Fund revenue comes from the franchise fee revenue received from the Shoreway Transfer Station and the Excess Educational Revenue Augmentation Fund (ERAF) Rebate, which reflects property taxes previously taken from the City by the state. The table below outlines the general capital improvement revenue estimates for the CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 146

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Biennial Budget for FY 2025-27. The sections following the table discuss the assumptions used in determining the revenue estimates.

Revenue Type
FY 2025-26
Proposed
% of
Total
FY 2026-27
Proposed
% of
Total
ERAF REBATES $3,000,000 18% $3,000,000 38%
FRANCHISE FEES $2,678,000 16% $2,758,300 34%
DEVELOPMENT IMPACT FEES $7,322,200 46% $1,257,100 16%
OTHER REVENUE CATEGORIES $3,232,800 20% $948,800 12%
TOTAL $16,233,000 100% $7,964,200 100%
ERAF Rebates
FY 2025-26. In San Mateo County, "excess ERAF" refers to property tax revenue collected above what's needed to fund the state's educational revenue augmentation fund (ERAF). These excess funds are then distributed back to the county, cities, and special districts. The Returned (Excess) ERAF annually distributed to the County and other local agencies may be negatively impacted by property tax revenues received by school districts, changes in school enrollment, and/or state efforts to redirect or reduce Returned (Excess) ERAF for its own purposes. Given the volatility of this funding source, the City budgets it in the Capital Fund. Should the amount decrease in any given year, ongoing operations will not be impacted and projects can be either put on hold or defunded. Revenue estimates are $3.0 million per year for both FY 2025-26 and FY 2026-27.

Franchise Fees
FY 2025-26. Revenue estimates are $2.7 million, which is fairly flat with the FY 2024-25 projections. These revenues are based on the amount of tip fees collected at the Shoreway Transfer Station. These revenues can fluctuate based on the amount of activity. Revenues are left flat in FY 2025-26 to account for economic uncertainty.

FY 2026-27. The FY 2026-27 revenue estimates reflect an increase of 3.0%. This reflects general inflationary growth and may need to be adjusted during the mid-cycle review.

Development and Impact Fees
FY 2025-26. Revenue estimates are $6.9 million, which represents an increase of 2227.9%, over the FY 2024-25 projections. This level of funding assumes large development revenue in the coming year. Development and Impact fees may be restricted for use such as Traffic Impact Fees (TIF). TIF fees can only be applied to certain projects which are identified in the Capital Project Section of the budget.

FY 2026-27. The FY 2026-27 revenue estimates reflect a decrease of 81.8% due to the anticipated timing of development revenue.

Other Revenue Categories
FY 2025-26. This revenue is generated from investment income, anticipated grants, and cost reimbursements. Unlike the General Fund, for capital projects grants that have been received or will be received are budgeted for, to help offset the costs of projects. Should the grants not be CITY OF SAN CARLOS PROPOSED BUDGET FY 2025-2027 147

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received, the project may be delayed or unfunded. There is no impact to general operations. For FY 2025-26, this revenue category is estimated to be 165.3% higher than the FY 2024-25 projections. The increase is due to the anticipated grant funding to be received.

FY 2026-27. The FY 2026-27 revenue estimates reflect a decrease of 73.9% over the FY 2025- 26 estimates based on grants. More details on the capital projects and specific grants can be found in the Capital Project Section of the budget.

DESCRIPTION OF HOUSING FUND REVENUE SOURCES
The majority of the City’s Housing Fund revenue comes from the franchise fee revenue received from affordable housing in lieu and commercial linkage fees. The table below outlines the general capital improvement revenue estimates for the Biennial Budget for FY 2025-27. The sections following the table discuss the assumptions used in determining the revenue estimates.

Revenue Type
FY 2025-26
Proposed
% of
Total
FY 2026-27
Proposed
% of
Total
DEVELOPMENT FEES $15,864,000 97% $6,789,500 94%
OTHER REVENUE CATEGORIES $430,100 3% $443,000 6%
TOTAL $16,294,100 100% $7,232,500 100%
Development Fees
FY 2025-26. The purpose of the Commercial Linkage Fee and the Affordable Housing in Lieu Fee is to encourage the development and availability of housing that is affordable to a broad range of individuals and families with varying income levels within the city, as mandated by State law, California Government Code Section 65580. The timing of these fees will vary depending on the timing of when commercial and/or residential permits are pulled. FY 2025-26 anticipates funding being received from large development, similar to FY 2026-27. Should these funds not be received in the projected years, projects may need to be delayed or unfunded.