CITY COUNCIL AGENDA REGULAR MEETING CITY OF HALF MOON BAY TUESDAY, FEBRUARY 20, :00 PM

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1 CITY COUNCIL AGENDA REGULAR MEETING CITY OF HALF MOON BAY TUESDAY, FEBRUARY 20, 2018 Adcock Community/Senior Center 535 Kelly Avenue Half Moon Bay, California Deborah Penrose, Mayor Harvey Rarback, Vice Mayor Adam Eisen, Councilmember Rick Kowalczyk, Councilmember Debbie Ruddock, Councilmember 7:00 PM This agenda contains a brief description of each item to be considered. Those wishing to address the City Council on any matter not listed on the Agenda, but within the jurisdiction of the City Council to resolve, may come forward to the podium during the Public Forum portion of the Agenda and will have a maximum of three minutes to discuss their item. Those wishing to speak on a Public Hearing matter will be called forward at the appropriate time during the Public Hearing consideration. Please Note: Anyone wishing to present materials to the City Council, please submit seven copies to the City Clerk. Copies of written documentation relating to each item of business on the Agenda are on file in the Office of the City Clerk at City Hall and the Half Moon Bay Library where they are available for public inspection. If requested, the agenda shall be available in appropriate alternative formats to persons with a disability, as required by Section 202 of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec ) Information may be obtained by calling In compliance with the Americans with Disabilities Act, special assistance for participation in this meeting can be obtained by contacting the City Clerk s Office at A 48-hour notification will enable the City to make reasonable accommodations to ensure accessibility to this meeting (28 CFR ADA Title II). MEETING WILL CONCLUDE BY 11:00 PM UNLESS OTHERWISE EXTENDED BY COUNCIL VOTE 1

2 ROLL CALL / PLEDGE OF ALLEGIANCE PROCLAMATIONS AND PRESENTATIONS PRESENTATION - THE BIG LIFT MAYOR'S ANNOUNCEMENTS OF COMMUNITY ACTIVITIES AND COMMUNITY SERVICE REPORT OUT FROM RECENT CLOSED SESSION MEETINGS CITY MANAGER UPDATES TO COUNCIL PUBLIC FORUM 1. CONSENT CALENDAR 1.A WAIVE SECOND READING OF RESOLUTIONS AND ORDINANCES 1.B WARRANTS FOR THE MONTH OF JANUARY 2018 Staff Recommendation: Accept the attached warrants list for the month of January STAFF REPORT ATTACHMENT 1 1.C TREASURER S REPORT FOR THE QUARTER ENDING DECEMBER 31, 2017 Staff Recommendation: By motion, accept the Treasurer s Report for the quarter ending December 31, STAFF REPORT ATTACHMENT 1 1.D QUARTERLY FINANCIAL REPORT FOR THE SECOND QUARTER OF FISCAL YEAR Staff Recommendation: Accept the Quarterly Financial Report for the 2nd Quarter of Fiscal Year STAFF REPORT ATTACHMENT 1 2. ORDINANCES AND PUBLIC HEARINGS 3. RESOLUTIONS AND STAFF REPORTS 3.A LOCAL COASTAL PROGRAM UPDATE Staff Recommendation: Receive a status update on the Local Coastal Program Update. STAFF REPORT 2

3 ATTACHMENT 1 FOR FUTURE DISCUSSION / POSSIBLE AGENDA ITEMS CITY COUNCIL REPORTS ADJOURNMENT 3

4 BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY For meeting of: February 20, 2018 AGENDA REPORT TO: VIA: FROM: Honorable Mayor and City Council David Boesch, Interim City Manager Yulia Carter, Finance Director TITLE: WARRANTS FOR THE MONTH OF JANUARY 2018 RECOMMENDATION: Accept the attached warrants list for the month of January STRATEGIC ELEMENT: This recommendation supports the Fiscal Sustainability and Inclusive Governance Element. DISCUSSION: During this month, staff processed three check runs. The first was on January 11, 2018, totaling $342,883.39, the second was on January 24, 2018, totaling $1,977,303.75, and the third was on January 29, 2018, totaling $13, The grand total for all warrants for the month was $2,333, The City processed payments related to 13 capital improvement projects, in a total amount of $1,489, These projects include the Arroyo Leon Erosion, Correas Street Underground, General Plan Update, Highway 1 Safety/Congestion Improvement, Highway 92 Safety and Operational Implementation, Library Replacement, Main Street Pavement Rehabilitation, New Accounting System, Sewer Lift Upgrades, Sewer Master Plan, Signal Kelly/Highway 1 Intersection Improvement, Ted Adcock Rehabilitation, and City Hall Annex. Staff is also including a list of all payments above $30,000 processed during this reporting period, as listed in the table below. 4

5 Over $30,000 Check# Vendor Number Payee Check Date Check Amount Description CSG 1/11/ , AUG'17 NOV'17 PROFESSIONAL SVCS VALI COOPER & ASSOCIATES, INC. 1/11/ , NOV'17 PROF ENGINEERING SERVICES BHM CONSTRUCTION INC 1/24/2018 1,151, DEC'17 HALF MOON BAY LIBRARY PROJECT HALF MOON BAY GRADING & PAVING INC. 1/24/ , NOV'17 MAIN ST PAVEMENT REHAB METROPOLITAN PLANNING GROUP 1/24/ , DEC'17 FY17/18 PLANNER SERVICES SEWER AUTHORITY MID COASTSIDE 1/24/ , JAN'18 FY17/18 SEWER ASSESSMENT SHUTE, MIHALY & WEINBERGER LLP 1/24/ , OCT'17 LEGAL SERVICES ATTACHMENTS: Check Disbursement List by Check Date 5

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11 BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY For meeting of: February 20, 2018 AGENDA REPORT TO: VIA: FROM: Honorable Mayor and City Council David Boesch, Interim City Manager Yulia Carter, Finance Director / City Treasurer TITLE: TREASURER S REPORT FOR THE QUARTER ENDING DECEMBER 31, 2017 RECOMMENDATION: By motion, accept the Treasurer s Report for the quarter ending December 31, FISCAL IMPACT: The City s cash and investment portfolio, at fair market value, as of December 31, 2017 is $52,032,175, of which $8,026,237 is placed with the State Controller s Local Agency Investment Fund (LAIF), $31,344,510 is placed with the San Mateo County Treasurer s Investment Pool, $10,546,946 is U.S. government backed securities, $2,112,769 is in operating accounts, $712 is in Money Market Accounts and $1,000 is in petty cash. The investment placed with LAIF includes $753,669 of Bond Funds. The City s investment portfolio decreased by $5,051,416 this reporting quarter compared to last quarter. The decrease is primarily attributable to progress made on the Library capital project. The Treasurer s Report (Attachment 1) includes detail of cash and investments which were held by institutions. In accordance with Government Code Section et seq., the City s Treasurer is to provide the City Council with a report on investments on a quarterly basis. As shown in the Treasurer s Report (Attachment 1), the City s investments are in external investment pools listed at cost, as well as its fair value, not amortized cost, in compliance with Governmental Accounting Standard Statement 31. The City s investment practices strictly follow Government Code Section et seq., the City s investment policy, and a prudent person s rule. STRATEGIC ELEMENT: This recommendation supports the Fiscal Sustainability and Inclusive Governance Elements. ATTACHMENT: Treasurer s Report for the quarter ending December 31,

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14 BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY For meeting of: February 20, 2018 AGENDA REPORT TO: VIA: FROM: TITLE: Honorable Mayor and City Council David Boesch, Interim City Manager Yulia Carter, Finance Director QUARTERLY FINANCIAL REPORT FOR THE SECOND QUARTER OF FISCAL YEAR RECOMMENDATION: Accept the Quarterly Financial Report for the 2 nd Quarter of Fiscal Year FISCAL IMPACT: There is no fiscal impact associated with the acceptance of this report. STRATEGIC ELEMENT: This recommendation supports the Fiscal Sustainability and Inclusive Governance Elements of the Strategic Plan. BACKGROUND: One of the City Council strategic priorities includes planning for and implementing long term financial stability. A key component of this goal includes preparing a quarterly financial report that would provide readers with an executive summary of the City s current financial conditions as it relates to the annual operating budget. During the FY budget process staff committed to implementing the practice of financial reporting on a quarterly basis to ensure accountability and transparency in managing public funds. Staff has completed the Second Quarter Financial Report which reflects the City s overall financial position as of December 31, This report summarizes the activities of the City s General Fund to provide the Council and the public with an overview of the City s general fiscal condition, and is not meant to be inclusive of all financial accounting transactions. The General Fund is the primary operating fund of the City and is used to account for most operating activities. ANALYSIS: The First Quarter Financial Report includes an update on the revenues and expenditures for the General Fund for the quarter ended December 31, The General Fund financial report is prepared on a modified accrual basis, therefore only revenue received by December 31, 2017 is Page 1 of 2 14

15 reflected in this analysis. Expenditures are recorded when paid. As of this date, the City has received $6.6 million in revenue (41.0% of budget) and expended $5.5 million in expenditures (32.0% of budget). Due to the timing of collections of certain major revenues, such as Transient Occupancy Tax and Sales tax, revenues will not catch up to budgeted mile stones until later months are accrued at the end of the fiscal year. Subsequent reports should provide a clearer picture of how the City s General Fund revenue sources are performing relative to budgeted figures. Please note that the figures presented in this report are unaudited. ATTACHMENT: Second Quarter Financial Report as of December 31, 2017 Page 2 of 2 15

16 City of Half Moon Bay Fiscal Year 2017/18 Second Quarter Financial Report OVERVIEW This report summarizes the City s overall financial position for the fiscal year through December 31, The focus of this report is the City s General Fund, and is not meant to be inclusive of all finance and accounting transactions. The intent is to provide the Council and the public with an overview of the state of the City s general fiscal condition. The General Fund is the primary operating fund of the City and is used to account for most operating activities. The revenue projections and budgets include necessary adjustments for encumbrances, carryovers, and any supplemental appropriations made by the City Council as of December 31, GENERAL FUND General Fund Financial Condition. With half of the year complete, General Fund expenditures are at 32.0% (vs. 53.2% in the prior year) of projections and revenues are at 41.0% (vs. 42.4%). These figures exclude budgeted once-a-year operating and capital transfers. The expenditure variance from the prior year is primarily due to the exclusion of encumbrances of various large professional service contracts. Beginning with the First Quarter Fiscal Year report, the encumbered but unexpended amounts have been excluded for greater clarity. Both expenditures and revenues are explained in more detail below. General Fund Budget YTD Actual Percent Revenues $16,147,673 $6,617, % Expenditures $17,073,339 $5,460,795 *excludes operating and capital transfers 32.0% The General Fund balance as of December 31, 2017 is $12.2 million. This is based on the audited fund balance as of the end of fiscal year and factoring in year-to-date expenditure and revenue activity. Expenditures. Departmental operating expenditures (including outstanding purchase orders/encumbrances) are generally on target as of the end of the first quarter. The following chart summarizes year-to-date combined expenditures and encumbrances by department: General Fund Expenditures by Department Budget YTD Actual % Exp/Enc City Council 408, , % City Manager 1,047, , % City Attorney 371, , % City Clerk 589, , % Finance and Risk Management 940, , % Human Resources and Administrative Services 1,047, , % Public Safety 3,535,990 1,576, % Public Works 2,632,220 1,094, % Recreation Services 916, , % Community Development 1,833, , % Capital and Operational Transfers 3,749, % Total General Fund 17,073,340 5,460, % *excludes operating and capital transfers Human Resources and Administrative Services expenditures are slightly elevated due to prepayment to the County for the Coastside District Emergency Coordinator services for the entire fiscal year. City Attorney expenditures are higher than and will be addressed during the mid-year budget review process. Revenues. The following is a summary of revenues as of the end of the first quarter: Revenues Budget YTD Actual % Rec'd Trans. Occupancy Taxes 6,289,000 2,541, % Property Tax 3,062,800 1,567, % Sales & Use Tax 2,614,222 1,033, % Other Revenue 1,714, , % Other Taxes 837, , % Charges for Services 1,618, , % Inter-Governmental 11, % Total Revenues 16,147,673 6,617, % Transient Occupancy Taxes (TOT). TOT continues to be the largest source of revenue for the City. The City has contracted with an external consultant to assist in tracking and collecting TOT revenues. Page

17 City of Half Moon Bay Fiscal Year 2017/18 Second Quarter Financial Report Since TOT is remitted approximately 30 days after the end of each month, second quarter numbers reflected only four months (July through October) of TOT receipts. Therefore, TOT revenues are performing stronger than projected with a collection percentage of 40.4% over the course of only one third of fiscal year, in part due to the City s efforts in collecting taxes from short-term rentals. Property Tax. Property Tax is the City s second largest revenue source. The first major apportionment of property taxes was received in December and the City has received close to the expected amounts in this category. Sales and Use Tax. Sales and Use Tax is the City s third largest revenue source. As of September 30, 2017, the City has received about 39.5% of our budgeted Sales Tax revenues as of the end of the second quarter. Sales taxes are generally paid one month in arrears and therefore the full six months of sales tax has not yet been received as of December 31, Based on discussions with the City s sales tax advisor, the local sales activities remain strong and we expect to exceed the budgeted sales tax revenue target. Other Revenues. The main components of this category are Golf Fees, County Credit Reimbursements, and the cost allocation transfer from the sewer fund. The golf fees are received as part of a redevelopment agreement with Ocean Colony Partners, L.P. and are calculated as a percentage of green fees from the golf courses. Golf fees and the County Credit reimbursements have been received and credited. The sewer cost allocation transfer will be recorded at the end of the fiscal year. Overall, this revenue category is approximately at the expected level at this point of the fiscal year. Other Taxes. This includes Franchise Tax and Business License Tax. We will not receive the largest component of franchise fees revenue payments from PG&E until April Franchise fees from other utilities are remitted approximately 30 days after the end of each quarter. As such, no revenue has been received yet as of December 31, 2017, which is consistent with the second quarter of the prior fiscal year. Business licenses taxes are due in November of each year and are valid from October 1 through September 30 of the following year. The City has collected 90% of the budgeted taxes and expects to continue to collect the remaining expected amounts in the third and fourth quarters. Charges for Services. These include building permits, engineering and planning fees, and police services. Permits and planning fees tend to fluctuate based on the timing of larger projects and are expected to come more in line with the budget as the fiscal year progresses. The City completed the Comprehensive Master Fee study on FY , which we expect to result in greater cost recovery in the current fiscal year. Inter-governmental. This revenue category includes vehicle code fines, governmental grants and various cost reimbursements. The State is currently paying State Mandate claims from prior years as funds become available. SUMMARY Overall, the City s operating budget for expenditures is performing well as of the end of the second quarter. Certain revenues, such as Transient Occupancy tax, sales taxes, and franchise taxes will only reach budgeted figures when they are accrued at the end of the fiscal year, due to timing issues and governmental accounting basis. The City continues to experience strong revenue generation and overall economic growth. Page

18 BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY For meeting of: February 20, 2018 AGENDA REPORT TO: VIA: FROM: Honorable Mayor and City Council Dave Boesch, Interim City Manager Jill Ekas, Community Development Director TITLE: LOCAL COASTAL PROGRAM UPDATE RECOMMENDATION: Receive a status report on the Local Coastal Program Update. FISCAL IMPACT: There is no fiscal impact associated with providing an LCP update. STRATEGIC ELEMENT: This action supports all elements of the Strategic Plan (Infrastructure and Environment, Healthy Communities and Public Safety, Fiscal Sustainability, and Inclusive Governance). BACKGROUND: The City has been engaged in a comprehensive update of its Local Coastal Program (LCP), which is currently focused on policy in the Land Use Plan (LUP). A first public draft LUP was published in April Second drafts of the following chapters were prepared by staff and reviewed by the Planning Commission over summer 2017: Coastal Access and Recreation Cultural Resources Coastal Hazards Scenic and Visual Resources The Planning Commission provided input on those chapters and staff is prepared to revise them for final Planning Commission review as soon as the other chapters are complete. Following completion of those draft chapters, staff has been working on updating the development, public works, and natural resources chapter. In July 2017, the City hired Dr. Charles Lester as a policy consultant to assist with that work. At the October 24, 2017 Planning Commission session, Dr. Lester presented a land use overview covering the Coastal Act framework, Half Moon Bay s certified LCP, and considerations for the LCP update. Dr. Lester s presentation and white paper are posted on the Plan Half Moon Bay Page 1 of 3 18

19 web page ( Following the presentation, the Planning Commission received public comment, provided input, and noted priorities and concerns with respect to land use and growth management in the LCP update. At the next Planning Commission session on November 14, 2017, staff presented a land use policy framework summary. This document is provided in Attachment 1. The Planning Commission provided input regarding residential, commercial and agricultural land uses. The Planning Commission s input aligned with City Council s past direction to focus development within the core area of the city, provide for flexibility and diversity in housing and mixed use development, update the PUDs, and address the needs of agriculture businesses. Also in summer 2017, the City hired an environmental planning consultant, Huffman Broadway Group, to prepare detailed hydrological and habitat maps. The City s maps have not been updated for many years. The new map will incorporate the results of numerous site specific biological resource evaluations which have been conducted throughout the City over the past twenty years. The maps are based on high resolution LIDAR and aerial photography from San Mateo County s GIS work group. The City received this valuable base map data for free based on its status as a member of the San Mateo County City/County Association of Governments (G/CAG). Originally, it was hoped that this data would be available in August; however, it was delayed until late November. The data has been successfully conveyed to the consultant in an appropriate format and the consultant has been making solid progress on the base map over the past two months. Staff also notes that the City received an LCP support grant for $85,000 from the Coastal Commission which fully funds this map update project. The Planning Commission has been asked to consider their preferred approach to supporting development and review of the LUP. In 2017, staff twice offered the Commission the option of forming a subcommittee, however, they declined at that time. At the Planning Commission s meeting on February 13, 2018, staff revisited this option. The Commissioners indicated that they would like to reconsider and formation of a subcommittee will be agendized for their next meeting. DISCUSSION: For the LUP, the following chapters are being revised for Planning Commission input: Development Public Works Natural Resources Staff has been working directly on the Development Chapter. This chapter should be ready for Planning Commission input in March. It will precede the Public Works Chapter which is reliant on build out modeling that will be based on policies in the Development Chapter. Progress is also being made on the Natural Resources Chapter as the hydrology and habitat mapping effort progresses. Staff anticipates that a draft of the map will be ready for Planning Commission review in April or May. Staff s goal is to have all chapters, including those previously reviewed Page 2 of 3 19

20 by the Planning Commission, in a substantially complete format for Commission consideration in May or June. They will then be brought to City Council over summer. Staff notes that we will need assistance from a planning consultant or firm with expertise in modeling and GIS in order to complete the most technical portions of the LUP. As envisioned, this consultant would also be able to provide final document formatting and other support that would be difficult for staff to do with existing time and software resources. The Community Development Director has been in contact with two such consultants to flesh out this task. ATTACHMENT: Land Use Policy Direction Summary Tables Planning Commission November 14, 2017 Page 3 of 3 20

21 ATTACHMENT 1 Residential 1 of 2 Where What How Why Core Area Infill: Includes: Affordable Podesta PUD Mixed Use Multifamily ADUs Incentivize: Potential Categorical Exclusion Designation Align with Measure D 1.5% Focus for TDR receiving sites Priority Water for deed restricted affordable units Revise use regulations for residential No Measure D Certs for ADUs Specific Plan with Design Guidelines Benefits: Council Priority Infrastructure Present Lowest Water Demand Lowest VMT Downtown Vibrancy Supports Alt Transportation Risks: Community Character Neighborhoods Facilitate: Potential Categorical Exclusion Designation Priority Water for deed restricted affordable units, including ADUs Consider No Cost Measure D Certs for ADUs Benefits: Infrastructure Present Neighborhood Integrity Count ADUs (consider cumulative impacts) Risks: ESHA/Hazards Infill: Single Family Duplex ADUs 21

22 Residential 2 of 2 Where What How Why PUDs Minimally Developed Areas: Mostly Single Family Require Comprehensive Planning: Specific Plans for CCC Certification Reduce build-out appropriate to carrying capacity Address poor platting Mergers Lot retirements TDR as sending sites to Core Area receiving sites Provide for SLR and habitat retreat Benefits: Dedicated Open Space SLR and Habitat Retreat Risks: Infrastructure Capacity Coastal Access ESHA Hazards 22

23 Commercial 1 of 2 Where What How Why Core Area Includes: Podesta PUD LC Smith Estate PUD Infill: Retail Mixed-Use Lodging Light Ind. Incentivize: Potential Categorical Exclusion Designation Priority Water for visitor serving commercial Support compatible light industrial, small-scale R&D, cottage and artisan industries, live-work Specific Plan with Design Guidelines Benefits: Infrastructure Present Infill Employment Lowest Water Demand Lowest VMT Downtown Vibrancy Supports alt. transp. modes Risks: Community Character Facilitate: Potential Categorical Exclusion Designation Consider hosted short-term rentals Consider child and elder care options Benefits: Infrastructure Present Neighborhood Integrity Lowers VMT Visitor Serving Risks: Threat to Affordable Housing Neighborhoods Infill: Home Occupations Limited Neighborhood services Short-Term Vacation Rentals 23

24 Commercial 2 of 2 Where What How Why HWY 1 and 92 Infill/Redevelop Facilitate: Corridors Sites: Support low-cost visitor serving options Retail Support green-options e.g. EV charging Lodging stations Light Ind. Support light industrial, small-scale R&D, cottage and artisan industries, live-work maybe compatible in some locations Benefits: Visitor Serving Neighborhood Serving Infill Employment Lower VMT and GHG Community Character Risks: Visual Resources PUDs Benefits: Dedicated Open Space Risks: Coastal Access ESHA Hazards Infrastructure Capacity Visual Resources Minimally Developed Sites: Retail Lodging Require Comprehensive Planning: Specific Plans for CCC Certification Require build-out appropriate to carrying capacity 24

25 Agriculture 1 of 2 Where What How Why Horticulture Business Land Use Designations Greenhouses Incentivize: Per City Council direction, consider limited cannabis cultivation Support recycled water projects Benefits: Infrastructure Present Priority Use Risks: Water and Energy Demand Community Character?? Urban Reserve Field Ag Incentivize: May be appropriate for an Agriculture designation Expand upon and simplify permit process for ancillary uses to support economic viability; e.g. B&Bs, farm stands, employee housing, farm-to-table commercial, equestrian facilities, clinics, etc. Address legal nonconforming development in consideration of site conditions Benefits: Community Character Priority Uses Risks: Neighborhood Compatibility 25

26 Agriculture 2 of 2 Where What How Why Open Space Reserve Field Ag Incentivize: May be appropriate for an Agriculture designation May be appropriate for Open Space Conservation/Hazard Avoidance designation Expand upon and simplify permit process for ancillary uses to support economic viability; e.g. B&Bs, farm stands, employee housing, farm-to-table commercial, equestrian facilities, clinics, etc. Address legal nonconforming development in consideration of site conditions Benefits: Community Character Priority Uses Risks: Hazards 26