05-23-2023 City Council Meeting Minutes Page 1
MINUTES OF THE SECOND REGULAR MEETING OF THE TRINIDAD CITY COUNCIL TUESDAY, MAY 23, 2023 (LIVE/HYBRID)
I. CALL TO ORDER
Mayor Kelly called the live-hybrid meeting to order at 6:00pm. Council members in attendance: Kelly, Ladwig, West, Tuttle, and Breckenridge. City Staff in attendance: City Manager Eli Naffah, City Clerk Gabriel Adams, Deputy Clerk Anton Souza, Project Manager Jennifer Hakenen, and City Planner Trever Parker.
Approximately (6) participants were present by video-conference at the beginning of the meeting.
II. PLEDGE OF ALLEGIANCE
III. CLOSED SESSION
1. Conference with Legal Counsel – Existing Litigation (Calif. Gov. Code Section 54956.9(d)(1)) (1 Case: City of Trinidad vs.
Tsurai Ancestral Society, et. al, Humb. Co. Sup. Court Case No. 180684) IV. RECONVENE TO OPEN SESSION – no reportable action taken during closed session.
V. APPROVAL OF THE AGENDA
Motion (West/Ladwig) to approve the agenda as submitted. Passed unanimously.
VI. APPROVAL OF MINUTES – 04/11/2023 cc
Motion (West/Ladwig) to approve minutes as submitted. Passed 4-0.
VII. ITEMS FROM THE FLOOR
(Three (3) minute limit per Speaker unless Council approves request for extended time.) Patti Fleschner – Trinidad Resident, Museum Representative Trinidad welcomes people by offering programs that support the needy, but the programs also attract people that don’t respect the law and create enforcement issues for the City. Not sure what can be done to improve the situation, but we hope the City will help address the ongoing problems the park/museum/library area is experiencing. To make matters worse, I arrived home last week to a broken window and evidence of a home invasion.
Mayor Kelly noted she planned to comment on the homeless situation, but will put it on the June agenda to explain what the City has been dealing with.
VIII. CONSENT AGENDA
1. Distribution of Tourist Occupancy Tax Funds to Community Organizations.
2. Encroachment Permit Application from Tim and Susan Needham to Remove and Improve Walkway Access within Edwards Street Right-of-Way, at 833 Edwards Street.
Motion (Ladwig/West) to approve the consent agenda as submitted. Passed unanimously.
IX. DISCUSSION/ACTION AGENDA ITEMS
1. Discussion/Presentation regarding Draft Administrative Water Connection Policies and Criteria for Evaluating Connection Requests Outside City Limits.
City Planner Trever Parker explained that the Rancheria Hotel project prompted the City to analyze the water system and understand its limits. At a scheduled meeting on April 1, 2020, the Planning Commission recommended draft water policies for evaluating water service requests for properties outside the City limits to the City Council for consideration. The background information was provided at February 11, and April 14, 2020 City Council meetings. As part of their recommendation, the Planning Commission suggested that the City Attorney should review the policies before they are finalized.
At the April 14, 2020 meeting, the City Council tabled this item in favor of pursuing a drought/water shortage contingency plan before considering any new water connections outside City limits. That task has been accomplished and implemented, but this connection policy was never reconsidered.
A recent water service request has prompted staff to bring the policy back to the City Council in order to provide a comprehensive basis for deciding on connection requests. The City does not have the capacity to serve the entire service area, so some areas and/or uses had to be prioritized over others. Much of it is 05-23-2023 City Council Meeting Minutes Page 2
focused on future water demand scenarios to show the City water service capacity in comparison to the priority service areas. LAFCO changed its rules in 2000, and the City has not connected any property outside city limits since then
Rationale: Staff and the Planning Commission have taken a holistic approach to developing these policies and criteria, meaning they were written to accommodate a broad range of situations, without any one scenario in mind. Development of these policies and criteria were guided by a couple of key premises.
First, the City does not currently have the production capacity to serve the entire Service Area at full build-out (including reserving capacity to serve full build-out within City limits); therefore, certain areas and/or uses should be prioritized for service. The Planning Commission discussed several ways of prioritizing connection requests, primarily based on the relative benefits to the City.
Second, sound planning principles and practice dictate that provision of services outside a jurisdiction’s boundaries does not promote orderly growth and is generally undesirable. Therefore, annexation should be a component of any decision to provide additional water service connections outside City limits. Annexation can provide several benefits to the City, including additional revenue, land use control, increased housing opportunities (this may be a good way for Trinidad to meet State housing requirements for example), and a higher population base to serve on councils, commissions and committees. However, a decision as to when and where to annex is complex and would require additional information and studies. The proposed policy is intended to address when and where future water service connections may be appropriate and when annexation should potentially occur in conjunction to the connection request.
Based on the above premises, the proposed criteria have prioritized service to (1) build-out within City limits, (2) an allowance for Accessory Dwelling Units (ADUs) in the City, (3) areas outside the City that the City has the capacity to serve and that would be appropriate for future annexation, and to a lesser degree, (4) health and safety. In addition, there are provisions for the City Council to allow exceptions to the above priorities if certain findings can be made.
The policies are set up in tiers based on the priorities. The first tier is for requests from within the Priority Service Area. Within that tier, Areas A and B have somewhat different requirements from Area C, because Areas A and B already have water infrastructure and represent relatively small potential demand. Health and safety provisions are included in the tier for service requests from outside the Priority Service Area, but the approval process is easier than for an exception, which requires more scrutiny and analysis of costs and benefits.
Council questions included:
Tuttle: If Humboldt Bay Water extends service to the Rancheria in the future, will the water saved be free to extend to other Trinidad users?
Ladwig: Asked about the consumption standards for single family homes. Are there water rights in areas A, B, or C that the City can acquire through annexation? Parker explained that yes, there are per-person, per day averages, and the City would be expected to serve them.
Kelly: Are ADU’s considered in the water demand assessment? Planning Commission did a good job with the policy. Priority areas A and B make sense, but C includes RV parks that use a high volume of water.
Down the road if our water volume increases that would be an area to consider. Parker noted yes, properties that meet the minimum lot size have been inventoried for ADU potential.
Breckenridge: Annexation keeps coming up. When should we begin that discussion? Parker noted there has been resistance in the past from those areas being considered, but the benefits now may necessary for the City to remain sustainable.
Tuttle: In favor of extending services, but can policies be required for low-flow fixtures and consumption standards? Parker explained the City can regulate water conservation through its ordinances.
Public comment included:
Paula Levine – Trinidad Area Resident
05-23-2023 City Council Meeting Minutes Page 3
How does this policy relate to my neighbors on Mill Creek Lane that have requested a city connection? They could not afford it many years ago, but now their creek pump is failing and they want to connect. LAFCO requires the City to apply on their behalf to have water service extended outside city limits.
Kelly: The urgency of the situation that prompted your request is the reason why this policy has been brought forward tonight. The policy will provide a framework to review connection requests and if the proposed consumption requires less than 500gpd, the City Manager could direct staff to move forward with the LAFCO process.
Parker: The policy does not obligate the City to provide water, but it does provide the framework to evaluate applications and authorize staff to move forward with LAFCO applications if specific criteria is met.
Motion (Ladwig/West) to approve the Administrative Water Connection Policies and Criteria for Evaluating Connection Requests Outside City Limits. Passed unanimously.
2. Continued Discussion/Presentation regarding FY2023-2024 Budget.
City Clerk Adams explained that staff introduced the FY2024 budget discussion on May 9 by reflecting back on the current year, and setting goals leading to approval on June 13. A preliminary overview of how the City performed relative to the goals set for 2023 provided insight that will lay the ground work for identifying departments and programs that need focus in 2024.
State government oversight continues to increase and compete with local priorities. Coastal communities must be able to respond to the priorities established at the State level, and find resources to meet local needs. Fortunately, Trinidad is become very skilled in finding grant funding to maintain and replace aging infrastructure, fund long-range planning, and as a result free up resources to invest in local issues such as public safety, tourism, recreation, and maintaining a transparent government.
The Trinidad community’s appetite for government been growing steadily over the last 2 decades. The natural resources and beauty the area has to offer, combined with major advances in technology have changed how locals relate to the City and how visitors enjoy it. Remote work and flexible schedules have extended the visitor season far beyond the Memorial Day to Labor Day period. Heat, smoke, and other environmental factors intensify the transient population base. Customizing government services that cater to the core tax base while managing the impacts of the transient population will require an adaptive approach in the years to come.
The past several years brought unprecedented challenges that have tested the City’s systems. Aligning the personnel structure to prioritize the city’s needs while investing in retention and recruitment will be a focus in both the General (Admin, Public Works, Public Safety) and Special Funds (Water) this year. Primary general revenue sources have been resilient, but the Water System will be overspending for a 5th consecutive year and at a faster rate than ever before. Rates will have to be updated to stabilize the fund and rebuild the reserves.
Key take-aways from 2022-2023 that will set the tone for 2024:
- 2022 audit report showed a net fund increase in the General Fund of approximately $200,000, bringing the total fund reserve to approximately $2,270,000. Of that amount, only $383,519 has been unassigned.
The rest has been committed or assigned by Resolution to the following categories:
o Emergency Reserve: $669,000
o Budget Stabilization Reserve: $669,000
o Capital/Special Project Reserve: $431,473
o Self Insured Reserve: $15,000
o Fire Dept Capital Reserve: $50,700
o Public Works Capital Reserve: $10,000
o Town Hall Capital Reserve: $4,181
- If the budget forecast for 2023 is in line with projections, the general fund will add an additional $150,000 to the reserves thanks to various factors including sustained sales tax revenue, hold-over cell site 05-23-2023 City Council Meeting Minutes Page 4
revenue that finally ceased in October, employment delays, and optimal revenue recovery due to increase staff awareness and invoice management.
- 2022 audit report showed a net fund decrease in the Water Fund of approximately $273,000, representing a 25% decline in cash, leaving a total fund reserve of approximately $794,000. One year later (May 2023) it is expected that another 25% will be depleted, leaving an unaudited cash balance of approximately $500,000 to begin FY2024.
- Developing an effective hiring and retention strategy to stabilize the Water Fund will be a priority. The cost of staff retention disruption should be considered when evaluating what a healthy fund reserve should be.
- Water rates were last anyalzed in 2012, with 4 consecutive years of a 2.5% CPI increase built in. The rates have not changed since 2017 when the last CPI increase was included. Completing the water rate analysis and implementing the new rate as soon as legally possible is recommended. Building back the reserves to an acceptable level will take time and have to be structured within the new rates. Updated resolutions determining the appropriate amount of reserve targeted should also be reviewed. - Institutional knowledge and systems have provided operational and financial stability since the 1990’s.
Loss of nearly 30 years of water plant knowledge has proven costly. Now the City faces a similar challenge with long time core Fire Department volunteers retiring. The 2024 budget will phase-in expenses that will be required to provide adequate coverage in the absence of a volunteer Chief. - The voter approved, 4-year .75% sales tax increase was approved in November 2020, implemented on April 01, 2021, and the City just passed the 2-year mark. This is a good time to take inventory of how those tax dollars are utilized, and remind the residents how they will continue to benefit them in the future.
BUDGET STRUCTURE: Trinidad’s revenue profile is made up of general (unrestricted) revenues, special (restricted) revenues, and grant income. The quality and quantity of services that the City provides are expressed through its spending plan. Expenditures are tracked and presented to the Council each month in the financial statements.
Primary general revenue sources are:
- Sales Tax - General
- Sales Tax – Add-on
- Occupancy Tax
- Property Tax
- Rent and Franchise Income (cell tower and harbor leases, utility franchise payments, Town Hall rental) - Miscellaneous (Business & STR Licenses, etc)
Supplemental (restricted) revenue source examples are:
- Measure Z Income
- COPS Funding
- Transportation and Gas Taxes
- Grant Funds
- Water Sales
- Cemetery Sales
General Fund expense categories include:
- Permanent and Consultant Staff members
- Public Safety Expenses (police and fire)
- General utilities and maintenance of public buildings, spaces, streets, infrastructure and associated costs (often referred to as “keeping the lights on” or “overhead”).
Special Revenue Funds
- Water Fund
- Cemetery Fund
05-23-2023 City Council Meeting Minutes Page 5
BUDGET TOOLS: The City uses several tools and processes to draft, monitor, and control the budget:
- Monthly Financial Statements (Fund Categories, Revenue & Expense Accounts) - Annual Audit
- Investment Policy
- Reserve Policy (Adopted by Council Resolution).
Council questions/comments included:
Kelly: Pay rates, job descriptions, and retention incentives should be evaluated and transitioned into the budget somehow. We also need to prepare for Fire Department changes that could have budget implications.
Regarding law enforcement, residents have mentioned a desire for law enforcement to get out of their vehicles and spend more time on the ground. Regarding the water department, retention will be more likely with full-time opportunities than part-time options. The amount of money spent on contract staff needs to be reduced soon.
Regarding staffing, managing 13 people is challenging so assigning supervisor responsibilities to senior staff should help the City Manager handle personnel oversight. Offering new responsibility provides upward mobility and boots morale. This is a small town with challenging issues.
City Manager Naffah confirmed that a cost-of-living increase will be incorporated into the budget.
Regarding Water Department staffing, the current T-3 part-time employee will be leaving soon, and the T-2 will be taking a T-3 exam soon.
Ladwig: There are cost savings with part time employment, but achieving a T-3 certification requires a year of service working under supervision of a T-3 operator. Regarding Town Hall maintenance, I’d like to see money set aside to begin repairs and maintenance on the building. Staffing salary discussion, including salary and benefit considerations, should be included in the June revision as well.
Tuttle: Was the City able to downgrade the plant to T-2? How do we get a T-3 operator to stay?... provide housing? Also might be worth exploring bottling Trinidad water and finding ways to sell it at retail establishments. Naffah explained that downgrading was investigated, but not possible.
West: Agree that the Town Hall building is due for maintenance. I’d like to see that included in the budget, along with continued support for the trail maintenance.
Council preferences and direction will be incorporated into the final budget presented on June 13.
FUTURE AGENDA ITEMS
- Pacific Watershed project report
- Traffic Calming presentation
- Animal Control Ordinance and Services
- Budget Adoption
- Community Ambassador program
- Homeless/Houseless response
- CERT program
- LAFCO water connection application
- Annexation
ADJOURNMENT: 8:20pm.
Submitted by: Approved by:
_____________________________ _____________________________ Gabriel Adams Cheryl Kelly
Trinidad City Clerk Mayor