Planning Commission - workshop

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Okay, we'll go ahead and start our study session. First on public comments, are there any requests to speak?

Only on the item number four in study session, the information on procedure for public comments.

Okay, great. So first item is City of Fount Valley liability and workers' compensation insurance discussion presentation by risk manager Heather Campbell. Welcome.

item at a previous closed session council had requested information on the city's liability and workers comp insurance through the California joint powers insurance authority and the possibility of entering their primary program for one or both coverages so for this presentation CJPAA will give a brief overview of Fountain Valley's partnership with the JPIA and how we're doing and then I'll go over a breakdown of our claims for each program and then the comparison of premium costs, the excess that we're currently in, and the estimate for the primary. So from the CJPA, we have Paul Zeglovich, Alex Mailor, and Lucy Brockmeyer. So they're going to present really quick, and if you have any questions, they're also here to answer questions.

Welcome. All right. Thank you, Heather. Good afternoon. My name is Alex Meller. I'm the Risk Services Director with the California Joint Powers Insurance Authority. And I'm going to kick things off today going to keep it brief and then I'll turn it over to my colleague Lucy. I have to say though before we begin I was really expecting more people here for this you know the risk and insurance presentation but maybe next time. Whoops. Okay, so we have some slides here for you. So we thought that it would be wise just to start off with a brief overview of who the California JPIA is and what we do. So we are a municipal self-insurance pool. We have approximately 128 members across the entire state. And primarily what we do is we provide insurance coverage for our members. We provide liability and workers' compensation insurance. These are our two pooled programs, meaning that any losses that members in these pools experience are shared amongst the entire pool, which is beneficial, of course, if you are an agency that experiences a rather large claim. It is nice to have the ability to spread that cost out amongst the entire pool rather than paying the entire cost yourself. Beginning with our property program here on the slides and going down to our special events program, these are what we call our group purchase programs. So these are programs for which we go out to the insurance marketplace and we buy an insurance policy. that covers any members that choose to participate in those particular lines of coverage. I mentioned that we have approximately 128 members. We primarily cover small to medium-sized cities. We also have 19 JPAs and seven special districts. We cover pretty much the entire state. We go right down to the border with Mexico in the south, the Imperial County, and then as far north as Mono County. I think I'm missing a slide here, but that's okay. I can speak to it myself. So while the primary reason that we have members is so that we can make available coverage when those members experience losses, we're very focused on helping members prevent losses. And so we have many different programs that are designed to help you more effectively manage risk. So, for example, we have an employment practices hotline. So if the city is dealing with a particularly sensitive HR issue and you aren't really sure about the best way to address that, you can call and receive guidance. A couple of other things I'll highlight. We also have a sidewalk inspection and maintenance program. This, of course, you can tell by its name, is a program that makes available resources to help members regularly inspect and maintain sidewalks. And then one other program that I'll highlight is our cybersecurity program. This makes available resources and funding to members to help members stress test their cybersecurity posture. And so that's just kind of a brief overview of what we do. I'm going to pause for a second there. Any questions I can answer so far?

Any questions of the council? No, I think you're good.

All right. Well, then with that, I'm going to turn it over to my colleague, Lucy. And Lucy is going to give an overview of some of the specific ways that we have worked with the city recently, as well as some financial data.

Actually, sorry, may I ask a question? Alex, can you expand on your selection of members to the JPAA?

Yes, that's a great question. Thank you, Maggie. So we're very selective when it comes to members. We are looking for members who are going to positively contribute to the community that we have developed, meaning that we want members who are proactively managing risk, who are being mindful about that. And when Fountain Valley was interested in coming back to join us in 2023, that was something that really stood out to us. Maggie, Maggie's team are very, very focused on risk. They understand the importance of managing it to the Maggie, I think it's fair to say that the fit between Fountain Valley and JPIA has been a really good one.

I think we were with you in the past. Can you tell us the history of why we left?

Sure. I might actually defer to Maggie on that. I think Maggie has got that history.

So it was our former city manager who made that determination without consulting with the team. And so that was the extent that we know. But the minute I received this position, I knew the benefit being with JPA and how selective they are with its member and also all the training resources that are available to the team that we lost during those years that we were away from JPAA.

Thank you. Go ahead.

Welcome.

Hi. Thank you. I've actually been here before in 2023, so I don't remember if you were all here. But good to see you again if you were. My name is Lucy Brockmeyer. I am your designated senior risk manager. So anything that you need, you come to me with a question and I try to magically make it appear. So that is my role. Since joining, since coming back to the California JPIA in 2023, the city has made broad use of the California JPI's resources. Here listed on the PowerPoint are some of the different resources and things that I've worked with with the city. I'm not gonna go over each one. Obviously you guys can read those. But the examples listed here show a wide range of support that's been provided. Also to add to something that Alex had mentioned is we offer a lot of resources that the city really enjoys and takes advantage of one example was our mental health reimbursement for police and fire that was a new resource that we launched and it gave the city up to fifteen thousand dollars in reimbursement for both police and fire so that was a total of thirty thousand so you guys are great at using our resources and reaching out and making sure that you know what's going on with the JPA, which is great. I enjoy that. Here are some of the different risk management partnership examples that we've had. They included some major construction contracts, some police procedures, and we have special consultants that we're able to reach out to that are able to help with this. So it's not just me doing the work and checking with ChatGPT. Okay, it's actually a live consultant who's able to assist with that. We also do facility inspections. You guys had a recent Cal OSHA compliance matter that came up. So we actually had one of our consultants come out and do a full site inspection for that area and provide additional feedback so that if there were any corrective actions from Cal OSHA, you were able to address them in advance. So I'm very proud of this. Fountain Valley actually received the 2026 Liability Risk Management Award for municipalities with law enforcement. The selection process was from 17 different members that made it to the top. Basically, it was based on loss experience, the risk management efforts, participation in our training program, and also participation in our loss prevention programs. And there are six, seven different program managers, seven different people that vote. And basically, you guys received almost every single vote. Only one program manager that you don't work closely with because they didn't know who you were. So I'm sorry that it wasn't 100% unanimous, but you guys got six of the votes.

I think that was property and we're not part of that. So I think it's fair to say.

Heather was very upset wanting to know who it was. I said, Heather, there's nothing personal. It's purely based on the numbers. So this is our liability benchmarking. Basically, you can see here that Fountain Valley has a really good three-year loss rate. It's substantially below the pool average. If you see, the pool average is a 6.04, and Fountains Valley is a 2. And the other two agencies next to Fountain Valley, Monrovia and Paso Robles, also have a higher rate than Fountain Valley, and they're also members with both police and fire. So we wanted to have like agencies so that you could see and compare yourselves to others. And with workers' comp, though, that is a little different story, but also want to point out that the driving factor is the 23-24 year. So with workers comp these claims have a long life. They're not what I would I don't know if Paul would agree with the liability is simple But they tend to be shorter life claims We can probably sell them sometimes in six months to maybe no more than two years But workers comp has a potential of being open for the life of the employee. And so those are always a little bit more hard to predict and determine what will actually happen with them in growth wise. But if you see Fountains Valley's three year rate is 5.61 versus the pool average is 2.84. And the other two members with like exposure also have a lower exposure rate than Fountain Valley. Any questions?

Yeah, I have questions for you. So since we came back in 2023, like you said, our workers' comp average is a little bit higher than others. But since we've been back with GPIs for three years, has GPI offered any workers' comp training or look at our workers' comp where we're at?

So we offer our workers come symposium on an annual basis and you guys do attend that and then our Program manager Jeff works closely with the city and with our TPA Athens to monitor the claims. So we're always focusing on that.

And so you say annually, right? And doing 23, 24, 24, 25, any improvement have you seen or there's a risk that you saw that we could have improved? What's your analysis on that?

So the reported loss rate for the two most recent years is actually considerably lower. So I did have that, but I skipped it.

I just wanted to mention as well, part of workers comp training is the prevention. So we do that through safety training. And through JPIA we do, I think we're up to 40 to 45 trainings a year for our employees on safety matters. And there are broad ones open to all employees and ones that are very niche specific to the job. So we do take advantage of those and those are free through the JPIA. So we are making sure we're doing those every year to help prevent workers' comp claims for some of these injuries.

Yeah, and even the facility inspections are also key. Even though most people see it as a liability factor, your employees are inside the facilities, right, your staff. And so having good facilities, having those inspections conducted and addressing the hazard is going to assist if that's what's leading to any type of injury.

What's the most common thing you get from a workers' comp or a liability? Is it a slip and fall?

Trips and falls, yes. Sidewalk hazards are key. We get a lot of those. A lot of repetitive motion, cumulative trauma type of claims normally when it comes to workers' comp, especially when you're dealing with PD and fire. Over time, if you have the holster in the proper position, the weight, it can affect the back and the body posture, potentially the hip. And so you have a lot of different factors with the human body that sometimes you don't know how a specific person's body, their own physical, will react to the work that they're performing. Any other questions I can answer?

Thank you so much for your presentation. Really appreciate it.

So we'll go maybe. There we go. Okay, so as mentioned as part of the presentation, we're in the JPIA's excess liability program. So for liability, that means we have a $300,000 SIR. So each year the city pays the excess premium and then we pay the first $300,000 of every claim that we have. So this is a breakdown of our claims since fiscal year 23-24, since we came back to the JPIA, broken down by type and then total number of claims. So we've only had three in the past three fiscal years that have hit our SIR. So this is just a quick breakdown so you can see the types of claims that we're getting. Other is kind of those random ones that have nothing to do with us and that we usually immediately reject. So that's why that number is a little high. So to compare, this chart shows a breakdown and comparison of the costs associated with being part of the excess program. And then, oh, it's not fitting. Is there a way to make that smaller so we can see the whole thing? It shows our total annual premium in column three that we're paying right now as part of the excess program. And if you go to the second to last column, total annual cost, dollar one primary, that's the estimate the JPIA has provided us if we were part of their primary program meeting the first dollar of any claim, they would start covering it. So for each of the three years, you can see we've actually saved money being part of the excess liability program and we're actually each year saving more and more money so we're doing pretty well with that if we had been a part of the primary program in the past three years or actually four years if we count this coming year we would have paid almost 5.5 million in premiums and right now we've been paying 2.365 million So a pretty big savings for liability. Any questions about the liability program? That one's a little more straightforward. Work comp is a little more complicated.

Thank you.

Can you go back to the fly? Sure. Thank you. 23 to 26 so far like you said we paid what projected 27 2.3 right a total premium and if we were part of the workers comp it would have been 5.4 no this is liability Oh liability program okay so yeah the excess we've paid 2.36 million but if we are part of the primary it'd be almost 5.5 million in annual premium costs okay

So being a part of the excess program, we've actually saved $1.8 million not being in the primary program.

Okay. And I guess the next slide would be the workers' comp?

Yes. I separated them because they're very different. So again, this chart kind of shows a breakdown of the types of claims and the number of claims for each year. You'll see in fiscal year 23-24, we did have a high number of claims. That contributes to that high dollar amount, why that year we have such a high cost. So we are seeing a decrease in the number of claims that are being filed. And then same thing on this slide. The third column over is our current annual premiums being a part of the excess program. Our self-insured retention is $750,000 for workers' comp. which is pretty common when you have police and fire. Um, and then the second to last column is the premium that we would pay if we were part of the primary program. So the only year we would have saved money would have been 2324. That's because we had a lot of claims. We had one catastrophic claim. But every other year, we've been saving money. But overall, the past three years combined, we've saved money being part of the excess program. So these are just some figures. The estimate for this year, we paid $488,709 in our excess premium. If we'd been part of the primary, it would have been $2.4 million just in the insurance premium. Any questions on this one? So basically we're seeking council direction. Staff recommendation is to allow council to have more accurate comprehensive views of the trends that we have in our insurance premiums and the claim costs. We recommend waiting till we have a full five years of data. Then that way we can really see the losses. We have time for claims to settle. So we'll actually have a more accurate view of each fiscal year and how much we've paid under the excess program. I think right now we just don't have enough data to do so. But it is a valid question. We do need to keep up on that trend to make sure we're in the right program.

And the only reason why you need additional data because it's only now that having you on board as the risk analysis, you start closing out those claim because it has been open.

We are in the process of closing out many claims right now. I was just talking to Dave Thomas. We have confirmation. We're closing out, I believe it's eight claims from one person we've settled. We are in the process of closing about 10 more. Um, so we are constantly trying to close out those claims. So we do have 87 open claims, but those run the gambit. We have some of them, or I think 54 of them are for retired employees. We're trying to settle those out. and make sure we get the liability off the city. A lot of the ones are just future medical only for our current employees, which is like a 0% permanent disability rating. Just because they work with us still, we just keep the future medical open. So we are constantly trying to close out those claims so we limit our liability.

So my question for you is for those claims that are still open out there and then you try to close those claim out, are you able to foresee the cost of those projections future closeout claim? Because if those 87 claim and you project close them out, it's going to be way more than having with the three data now and it make more sense to have now than pay them out at that time because we pay most of it already.

Yes, well those 87 claims like I said, some of them are exposure only so we pay a couple hundred dollars. Some of them are a few thousand dollars and some of them we can't close out because their current employees, the retired employees. We are trying to settle them. We have kind of priced it out to see, but again, they're all not going to. The dollar amount, the way they do the loss runs, is they put that amount we pay in the year the claim was filed. So it's not going to be all, if we settled them all in 26-27, it's not going to all be counted in that year towards our premium. So I don't know, Lucy could probably explain that a little bit better. But some claims we are not going to close because it's not cost effective. Some are way too expensive and some are way too minimal that we don't want to pay $50,000 to someone who just needs hearing aids every couple of years. So there are some that we strategically do not close. Some the employees don't want to do a compromise and release and we can't force them. That's their choice to do. So we do constantly look through the logs. I work with Athens. and JPIA to see, can we close this? Is it cost effective? And then we see what we can do to kind of get that liability off the city.

Okay.

Do you want Lucy to explain the lost runs and how they're calculated a little better?

I thought, I mean, I'm on the private sector side. If I close that year on the workers' comp, my next year, my workers' comp goes up. So I'm not sure how it's not calculated.

So the way it works is we're looking at, for example, 23-24. So if you have a workers' comp claim open, that claim can be open for 10 years. But all of the costs associated to that claim is going to go back into your 23-24 bucket, basically. So for that fiscal year. So even though you're making payments throughout the life of the claim, All of the costs of that claim, we're going to still put it back into 2324. So let's say we're looking at the city on a 10 year basis. and you close a claim from 22, and 10 years from now is 2016. Okay, sorry, my bad. So let's say you're settling a claim from 2016. That payment, we're not going to technically use it to reflect your actual loss exposure. And so even in the private sector, it's the same process. Most companies normally go with maybe the state fund. I don't know which carrier you have. but they would be doing the same thing. So if you're a dollar one, it's going to be different because you're only going to see the claims growing, but there's no money coming out of your pocket, right? Because you paid your premium and that premium covers the cost of that claim, period. And in California, statutorily speaking, it doesn't matter what the claim cost. They have to pay it. It could be a $5 million claim. Your insurance company is still going to pay it. because it's statutory requirements. There are no limits when it comes to workers' comp. And one of the complexities when it comes to doing settlements is the age of the employee. That's going to require medical set-aside. I'm not sure if you're familiar with that process. but that's money technically that we have to separate and say Medicare is going to need access to that. And so there's a lot of complexities. If the employee is still with you, you don't want to do a compromise and release because they can get re-injured and now you have another claim. So now you're expanding your exposure. So a lot of this is looking and seeing how do you want to limit your exposure? Do you want to increase it with a medical set aside or are you okay just leaving it open and having the reserves there and then potentially every year if the employee is not treating, then they're reviewing the reserves and then they start to decrease the reserves. So eventually the claim can stay administratively open with no reserves. Did I make sense? Okay. Because I might start getting too technical. Yeah. Any other questions or another explanation? Okay.

Does council have any direction or?

Let's hear from council. Vice Mayor Harper, you're up.

Thank you. Yeah, so I think we have, you know, it says you want to wait until you have five years of data. I mean, we have five years of data. You could just go back to 2022 and 21, right?

We can't because we were with a different insurance authority. We were with PRISM, so the data would not be accurate. So it would be something that JPIA can't give us insurance premiums based off of what we did with PRISM. So we can't forecast what our future premiums are going to be using that. So that's why JPIA, this was kind of a special project for them to figure out The estimate for the premiums for the past three fiscal years and this current one.

Okay. Yeah. So then the other thing that we might look at is looking at a lower SIR, seeing how it affects the premium. So maybe not down to zero, but maybe $500,000 if it would. And, you know, leave it up to you to make that determination and JPIA if it makes sense. Okay.

That's something we can definitely look at with the JPIA. I don't recommend that for liability because our SIR is still low. Plus liability, we do save a lot of money. We would technically have to hit our SIR seven times in the same year for it to be cost effective to be in the primary program for liability. Work comp, we can explore a lower SIR. I can work with Lucy and see if that's maybe something that we can look at possibly. For next year, I think your renewal period, they start asking us around December. So maybe we can ask their finance to see a lower SIR for work comp. We can definitely do that.

But I just want to also take this opportunity to say congratulations on the risk, winning the risk award. That reflects really well on Fountain Valley of EU and Rick and the risk management team really done a great job. So congratulations.

Thank you. Can I ask you a question? How do you determine the five-year mark data? Why is it five years? Why could it be three years? That's a standard benchmark. Could it be seven years?

It could be seven years. I think it shouldn't be less than five years just because, especially for work comp, because especially with PD and fire, those claims last for a long time. So if you only do a few years, you're going to see a lot of claims that aren't closed out. So if we give at least five years, then we really start closing out a lot of those claims. If we give it a little longer, it'll be even more accurate. But right now, I just don't feel, well, with the data we have right now, we're saving money being in the excess for both programs.

Got it. I understand. I just want to know how you come up with a year. As a private sector, we want workers' comp insurance right away. We don't want to wait until data. Yes. That's what I'm trying to figure out.

We are constantly tracking the trends and the benchmarks, and we will obviously bring it back to council if we're starting to see a huge increase in our costs. But I would like to wait for five years. Just again, we have some larger claims that are in the process of closing out. And then, like Lucy said, those reserves will even out to whether they need to decrease or increase. And so we'll have more accurate numbers about what our out-of-pocket costs are for each fiscal year to make sure we know if we are saving money, especially for work comp.

That makes sense. Thank you. Councilman Grandes?

Yeah, no, I'm good with the five years. Let's do the five years. And it's not just cost. There's a lot of other intangibles they're providing that we take benefits of that is preventing cost. So I'm good. Councilman Lacoste?

Sure. Well, congratulations again, Heather and Rick. Very well deserved for the award. And I think it was, I can't remember when it was, I just recently did the workplace harassment prevention for local agency officials training on my tablet, and it was very, very beneficial. JPIA makes it very, very easy, and they offer lots of training, conferences, and more. And so I'm happy. Thank you. Thank you. Great reporting, too.

Yeah, congratulations. Thank you to JPIA for tonight's presentation. And I think we have pretty much a consensus from staff that your recommendation should be carried out. So thank you.

OK, thank you very much.

OK, next we're going to move into short-term rentals. City enforcement strategy and fiscal year 24-25 OC grand jury report recommendation presentation by neighborhood improvement manager Ashlyn Newman. Welcome.

Thank you. Good afternoon, Mayor Cooney and council. So this afternoon, I'd like to talk to you a little bit about short-term rentals in the city, both what we're doing in code enforcement and a grand jury report that came out last year with some recommendations on how cities should assess their short-term rental program. So at Council's direction, we're coming back to discuss our city program and then additionally the grand jury reporting. And I wanted to do just a little timeline of what we've done so far. So back in November 22, the the ordinance was passed prohibiting short term rentals in the city. Immediately we contracted with an agency that's called Host Compliance. But it goes out and it searches all the hosting platforms and gives us a list of the locations in the city that are advertising short-term rentals. So immediately, we had 180 on that list. So we sent out first notices to abate. We also put out a lot of public education. We set up a complaint form on our website so residents could complain directly to code enforcement about alleged short-term rentals in their neighborhoods. We contacted the online hosting platforms, let them know they're prohibited in the city of Fountain Valley, and asked for their help making sure that nothing was advertised from Fountain Valley in there. In February, we sent out the second round of notice to abate letters from everybody that didn't comply. And in the meantime, people were giving us new addresses. So it wasn't a one-time deal. It was rolling. Code enforcement was busy sending out letters constantly. So by March 23, we had 75% compliance. So that means 50% of the advertisements dropped off the hosting platforms, and about 25% of them changed to 30-night or more rentals. And that left us with about 25% that we were continuing to pursue. So the admin site process began. Code enforcement wrote admin sites. Many of those appealed. So we had appeal hearings for a lot of those. And that involved the city attorney's office, code enforcement, myself, the director. July, August we got up to about 85% compliance and a year later we only had seven short-term rentals advertised in the city. So I looked this afternoon and we have six now and that number runs between about two and six and code enforcement has open cases on those. So currently, there's two ways that we receive complaints. One, it might be identified by the software, and that's very much the easiest because the act of just advertising on the platform is a violation in itself. So code enforcement will send out an NTA letter, which is notice to abate. If it's still listed, they'll send a follow-up letter. In between there, they try to contact people. If they still can't get any response, then it goes into the admin site process. And again, much easier to enforce because we can just copy the listing that's on like Airbnb or VRBO or something and attach that to the site and that's a violation. Then we get complaints from residents who know their neighbors are running a short-term rental. We can't find it on any of our hosting platforms. Code enforcement may knock on the door. They don't get any response. The owner says, no, I'm not running a short-term rental. So if the reporting party will not testify as to what they've seen, then an administrative citation can be issued. So a lot of times when we get complaints from people and you may also get the complaints of code enforcement's not doing anything. Well, they are doing something. They're sitting on the house. They're knocking on the door. They're trying to come up with some sort of information. that the city attorney's office finds acceptable that we can write an administrative site. But if we can't gather that evidence, then we can't write the site. So if nobody wants to testify, if the code enforcement officer can't find anything, the case has to be closed. A lot of times those get opened again because somebody else might call, and then we go through the entire process again. Those are very time consuming, as you could tell.

Actually, you mentioned in 24 there were seven, right? Uh-huh. And then now there's six. Uh-huh. Are those six same address as the seven or different?

No. They'll close, and some of them we'll get them to close, and then six months later it'll pop back up, and then we start all over again.

Okay. Thank you.

Yeah, they're rolling, revolving. And here's our citations. So our regular admin sites are 100, 300, and 500. But for STRs, we bump up to 1,000, 3,000, 5,000. If we can't get any compliance after receiving three citations, it goes over to the city attorney's office. And a lot of times when property owners get a letter that comes from the city attorney's letterhead, that makes them stop. They won't listen to us, but they'll listen to the city attorney. Or if they don't, then they'll continue to be cited or the city attorney's office will take them to court to try to get them to abate. So a lot of our challenges are properties that aren't listed on the traditional platforms. Maybe they're on a non-English speaking platform or I believe there's some sort of platform out there for like youth groups. because a lot of people will call and say, oh, it must have been a basketball team. There's 10 tall guys that went in. So there's some other platforms that are available that we're not privy to. Also, if a reporting party won't testify, we can't write an admin site if the code enforcement officer can't come up with any information. And then the big one is staffing. Code enforcement just does not have the time to sit on a house, particularly when they're available during the day. The people at the Airbnb or the short-term rentals are probably out doing something. So nobody answers the door. They can't sit there all day. So a lot of our problems is that we don't have nighttime staffing. And a lot of people are savvy. They won't open their doors, or they know the name of the property owner, and they'll say, oh, yeah, I'm at my friend Bill Smith's house. When you look at the property owner, it says Bill Smith, but the neighbors know that these people are short-term renters. They're not friends of the owners.

So did anyone have questions on what we're doing?

Any questions? Councilman Constantine?

Yeah, I do, actually. Since the letterhead from our attorney for the city provides a tremendous credibility weight, is there anything we can do to, instead of having the challenges that we may have that are very, very time consuming and staff consuming, have a letter from the attorney for the city at some point just kind of doing a reminder you know what I'm saying not taking action at that point exactly but just maybe reminding of our policy or just something that we can put in writing just in conjunction with the attorney for the city so then maybe we won't have what we have sometimes.

It's something we can look into. In our letters, it does say that you will be referred for further legal action to our city attorney's office. No, and I get that. It's just that you've said, too, with the letterhead. But it possibly is something we could discuss of having a standard letter in there that has, yeah. We'd like to look into that. Perfect.

Thank you. Great report, too.

Councilman Granis? So for those that are still doing it when they shouldn't be, they're collecting occupancy tax. Are any of them paying it?

We are not getting anything. We don't have a program set up to collect it or anything.

Well, I think that takes it to the next level of I don't want to say, I don't know, I'm not a lawyer, criminal, but sure seems criminal if you don't pay your taxes and they're collecting it.

So then they'd have to admit they're running a short term rental.

Exactly.

Yeah, which kind of lends me into this grand jury report. So back in 24-25, the grand jury did the report, Long-Term Solutions to Short-Term Rentals.

I'm sorry, before you get to that, one other question is on the same line of thinking. What if we made short-term rentals a 100% tax? So this way, if somebody did that, we could go after them on the tax purpose or something like that.

So we did take a look at the tax aspect. We did two things. One was we hired a company to go out and look and see if they could identify short term rentals and send letters out to get them to pay. And we had a we had a voluntary program also where a short term rental could pay and get forgiveness for some of it. I think we made some small collections. Most people didn't pay. The other option that we had was running hearings the same way that we ran hearings to shut the STRs down. So we could do that too. That's a little bit more difficult to collect evidence. You have to find out how many days during the month they were rented out, and then you do an average. Directly to answer your question, the 100% tax, to increase the tax, we'd have to go to a ballot measure. Never mind. I should have led with that.

And just getting enough evidence on each one is difficult. So then the grand jury report, they- You can contact the IRS if you want to.

It's not IRS, but yeah.

So they did a research paper on this and they went and they mainly looked at Paris for Olympics 2024 and they found that the demand for STR surged during Olympics, both the demand and the price. So they're recommending that cities should consider developing a plan for upcoming major events, which would be the 2028 Olympics for us, when they expect a surge in the demand for STRs. So this is the list of the cities in Orange County that have banned and allowed. And this came out of the grand jury report. And initially it was 19 and 15. But Brea has since joined the allowed list. And they just recently did a pilot short-term rental program. And I wanted to talk about that a little bit. BRAEA has a biennial budget, as do we, and they're on the same cycle as we are. And prior to their 25-26 budget, they were looking for ways to produce more revenue and also dealing with short-term rentals that they felt like should have licenses so that they could be regulated easier. So they determined they were going to do a pilot program, and they approved their ordinance to change to permitting short-term rentals in January of 2026. And it took quite a while getting all their documents together, and they have a really nice program on their website if anyone wants to look at it. But they have a really tight ordinance. They only are giving 100 licenses throughout the whole city. If you look at Berea, the 57 bisects it right in the middle. And they split the city up into three sectors. And on the more dense side, on the west side of the freeway, they have two sections. And then the other side of the freeway is the third section. And they do 25, 25, and 50. licenses so they're spread out through the whole city. They have a very short application period which they just closed on July 31st and they're going to do each section by lottery. The license is going to cost them $1,000 and at renewal it's going to be $1,000. They are actually going to have annual inspections by building and fire that they're going to have a fee for. Only property owners can get a license. No renters at all. You're not allowed to have weddings there. You're not allowed to have big parties. They have a very super strict code. The only time you can get more than one license is if you have a property that has 50 or more units, which I would assume would be an apartment complex maybe, that the owner wanted to do two short-term rentals within the apartment complex. They also are collecting TOT, and they're doing self-reporting for TOT instead of doing it by the hosting platforms. Hosting platforms do offer collecting TOT for cities. They'll come up with agreements for that. But the assumptions Brea used is there on the left. So they did an average of the... The rental costs in their area tonight minimum annual occupancy for the industry is between 1570 so they did 60% they did a 100 licenses there to T is 10,000 I mean 10% so they're looking at collecting about $507,000 for the year. I did a sample of what we may be able to do this morning and I looked at all documents that we had from 2023 when we were closing down properties. And I took just the top 35 that I went down the list for. I threw out some of the higher ones. There were some in there for $1,500 a night, $1,200 a night. Those are outliers. Threw those out. So I had nine one bedrooms, average $85. Two two bedrooms, $183. Four three bedrooms at $425. Fourteen four bedrooms at $453. 6-5 bedrooms at 458 with a weighted average of $333 a night. So if we use that average with 60% occupancy, 100 licenses, the TOT portion at 9% would be $656,000 plus and then $100,000 for the licenses. So we would probably be around the $750,000 range if there was interest in amending the ordinance. so um some direction for tonight one option um continue to keep the strs prohibited we will need to do some public education ahead of the olympics making sure people are aware that they're prohibited in the city and also when we find them we're going to need to to site probably daily to take away the financial incentive of running the STR. Because if you're getting $1,000 a night and you don't get caught for several days and then you get a $1,000 bill, you're still making money. So we'll have to be really on top of it, do a lot of siting and a lot of education beforehand. Option two would be to consider a pilot program, something similar to BREA. Um, to, um, with a designated end date, Bray is, is ending in December of 2029 and, um, work with hosting hosting platforms to ensure that everybody's in compliance. So tonight I'm just asking which direction, uh, council is interested in.

Councilwoman Constantine?

Could you tell?

I know which direction you're interested in.

So I have to say, the city of Anaheim, just on a regular basis, they do allow short-term rentals. It's something that they allowed many years ago. And they had several hundred approved. They were very, very tight with their rules and regulations. You could sell the property and the license would transfer over. It might have been a three strikes you're out kind of a thing as far as being able to operate if you had some violations. It's dwindled a lot. And I'm not even talking about this program. I'm talking about the regular short-term rentals. No. This would take a lot of staff. We're already having challenges trying to close down the unpermitted short-term rentals that we had already. And it's not us. It's just the fact of this is what it is. We cannot. I mean, we learned this already because of the street sweeping enforcement. the relaxed street sweeping enforcement during COVID. I always I said way back, it's a different issue. Great, you're not going to have any citations for it. People still need to move their cars because we have to keep the storm drains clean. How do you theoretically get back the people to know we're going to start issuing citations again? I'm a no politely. And for many reasons. Thank you.

Other council comments? Looking for some direction, either option one or option two.

I think option one's a default unless there's... Yeah, so I tend to agree with option one. However, I think that during the Olympics, there will be a demand and possibly an opportunity for residents of Fountain Valley to who property owners that... choose to. Maybe they have, I don't know, maybe they have people visiting from other countries, you know, and I think there, I think we, if we were to do a program, I think it should be around the Olympics, not something like Brea where they're doing, you know, thinking of more of like a permanent program. So my thought would be to think about allowing short-term rentals before, during, and after the Olympics for a certain short period of time.

Yeah, I would not do it just for the Olympics. For me, that would be just a headache without a lot of revenue. You know, it's the risk reward. There'd be very little reward. I also think the numbers that if we were to do it are way lower than what it would be. I think the numbers would be closer to about 1.5 million.

Yeah, I think I was being very conservative.

It's extremely conservative, especially for Fountain Valley. So if we were going to do it, there are ways to do it that protect the neighbors. I don't think there's an appetite for that at this point.

Well, I think we have talked about this years ago when we took away STR. Keep in mind that back then we don't have any policy. And I've said that when you put a policy preventing people from doing STR, people will be creative. Business people are creative. That's why they're business people. They find different way. There's my understanding there's a shift that went to sober living home. Can we do anything about that? No. That's a consequence of taking something that we didn't have a policy. And we can't do anything on sober living home right now. I think that's even more dramatic to community than STR. Is there time to do STR now? I don't know. I don't have the answer. But if you think that people are not doing it, you'll be crazy. If they're doing it, they're still doing it. They find a way of doing it. But we don't have the opportunity to collect the tax because we don't have a means to regulate it. If we do it, we have a policy. We can regulate it. We can permit it. That's something different than what we didn't have before.

Mr. Mayor?

Yes, and just for clarity, so Councilman Bowie, option one or option two? I wasn't clear.

That's going to be the pleasure of the council.

That you.

I already said it. I appreciate it. My point I'm trying to say is people are creative.

OK, so I think it sounds like without any vote from Councilman Bowie, I think it's option one.

Well, I want to say something, if I may, please. If property owners did participate, I mean, on a regular basis, it would not be homeowners insurance. We're talking general liability. I mean, this is, it's not just, oh, we're going to get money from permitting. We're going to get, you know, TOT tax and everything like that. This is a big project if we're going to permit this, whether it's on a short-term basis or forever. I'm not against short-term rentals in theory. If we have everything in place, I wouldn't do something like that. I even said way back when we were going to ban them, we had 220 some odd. They went up from whatever it was, the minimal we had in 2015 when we thought we had an ordinance. And so you couldn't, you know, kind of change the game, even really that there was no game being played. played so to speak but we were being played with by property owners that were doing this so shut them down and I always said we could reconsider if you know we want to do that as a group of course but I would never even consider something temporary the stop start again once you put it out that it's okay to do it you can't rein them back in there's no way and short-term rentals like I said with the insurance and everything else the inspections Everything and all the different parameters. It's a big project I'm not against it, but I do believe it's important We maintain option number one at this point and then possibly consider if we're gonna look at maybe if the flavor of the City Council majority as far as doing a full-time program and dedicate efforts to that and see what the interest would be with the community and maybe Maggie if If it's not too late, maybe that could go into a survey. I don't know. That's it. So we've got option one.

Option one for me. Like I said, I'm option one now, but I would consider something around the Olympics.

And I would say option one is really what the public expects from us as policy leaders. I'll never forget all of that public comment four years ago. And so I'm just kind of anticipating how the public would receive a change in policy. The other thing to consider Olympics are long term. They're usually six to seven weeks. That's not a short term rental. And so you may have people that want to do long term rentals and that's OK. You can do that. Right.

So I'm just curious. We're all doesn't sound like anybody's in favor. Why is this even been brought back?

I think there was a council request just to have an update on the program. Our enforcement. Yeah. I just threw in the other for the grand jury.

Thank you. Yeah.

OK.

Appreciate it.

I think we stick with option one. Thanks so much, Ashley.

Thank you.

OK. Next is the Cultural Arts, Recreation, Sports, and Seniors, or CARS Advisory Committee presentation by Deputy City Manager, Community Services Director Rob Frazell. Welcome.

Thank you so much. Thank you, Mayor. Thank you, council members. Appreciate the opportunity to present on the cars committee, the potential cars committee. I'll wait for the PowerPoint to come on up. It's nice to be back up here. I missed the July meeting, so it's been almost two months. Thank you. Welcome back. All right, thank you, Rick. At the March 24th, 2026 City of Fountain Valley strategic planning meeting, the following item was assigned to the community services director and the chief of police. Strategic plan objective, improve integration, communication, and culturally responsive programming for the Vietnamese community. I'll just start with our staff recommendation and then have some information on why that's the recommendation and then open it up for council discussion. So staff recommends the creation of a cultural, arts, recreation, sports, and seniors advisory committee called the CARS Committee to improve integration, communication, and culturally responsive programming for the Vietnamese community in conjunction with other identified demographics within our community. So why through Parks and Recreation do we think that the Cultural Advisory Committee would be a good fit? As identified by the California Parks and Recreation Society, parks and recreational opportunities provide safe, welcoming spaces for residents to gather, whether for organized activities like sports and youth programs, or for informal gatherings such as community events, festivals, and cultural celebrations. These spaces help build a social network, strengthen neighborhood ties and create a sense of belonging. Why now? As the city looks towards implementing, potentially tonight, the Parks and Community Services Master Plan, it's imperative that these spaces, programs, and community events are tailored to our current and future demographics. The creation of a Cultural Arts, Recreation, Sports, and Seniors Advisory Committee will provide community input into the decision-making process to support these identified demographics. A little bit on the makeup with the staff recommendation. We'd like to kind of mirror the HH Advisory Committee and the City Hall Ad Hoc Committee. So similar to the Measure HH Advisory Committee, staff recommends that the CARS Committee meet on a quarterly basis to review and provide input on planned park development, upcoming community events, and community service programming. Additionally, the CARS committee shall provide either an annual or biannual updates to City Council on the impact of the committee. And then similar to the ad hoc committee, staff recommends that each individual city council member, including the mayor this time, has the ability to directly appoint one City of Fountain Valley resident to sit on the CARS committee for a term of two years. The initial term would be something to consider whether we want to have two or three people on a one-year term or a three-year term to start so that we have odd numbers, but that would be at your direction. So lastly, staff recommends the creation of a cultural arts, recreation, sports, and senior advisory committee to improve integration, communication, and culturally responsive programming for the Vietnamese community in conjunction with other identified demographics within our community. The CARS committee shall consist of seven members, five city residents directly appointed by each city council member and two city staff. Staff shall be appointed by the city manager and it's recommended to have a staff member from the community services department team, most likely myself, and the police department. With that, I'm open to any questions or discussion.

I have one.

Councilwoman Grant? Constantine? What was that?

OK, so Rob, can you go back a couple of slides? Not the very first one. I think the second one where it talked seniors. OK, so I'm a little thrown. OK, so I get this. This is for Vietnamese. Cultural arts, recreation, sports, and seniors. That's where I get thrown.

Uh.

we can add a second s in there if you'd like but no no no it's not that it's what it is it's not I think I think I can clarify that for you councilmember Constantine sure so the intent of this is basically community services typically prepared like a full year agenda of different program and services for recreation services and

Yeah, correct, aimed at supporting specific demographics.

So it's not only for Vietnamese. It's across the board.

It's for everybody.

OK, well, no, I'm hoping to be very inclusive, of course.

So what we want to drive at through our community services department and through the city is that when somebody comes to a special event, say it's Summerfest, a luncheon, Easter egg hunt that they feel like they're intended to be there right and so the creation of a cultural committee to provide that input of what would your family like or what would your grandmother like or what types of things would make this feel like an event that you're supposed to be at because in the long run it's going to take steps to get there but in the long run why it's important for Parks and Recreation. When everybody assimilates together through the things that they like to do, then we become that one proud Fountain Valley family that we're really striving to become. Sure.

Councilman Bowie? I think you responded. It's not just for the Vietnamese. You already put it right there. With other identified demographic, that means anybody else.

Absolutely. So the initial strategic plan item was specifically for the Vietnamese community. And obviously with, um, you know, a population that's getting close to 40%, that's going to be a priority. Um, but at the same time, um, all demo, a senior is a different demographic. And when they come to concerts in the park, they need to feel like they're also invited and included.

Absolutely.

Yeah, I support this. I think this is a good idea. I like the fact that the fifth concert was Vietnamese performers. I don't think we got quite the attendance we should have, because I thought the communication on the acts were not accurate enough because many people thought they would be singing in Vietnamese only or just Vietnamese. And they didn't. They were great. They were great performers. And everybody who was there, whether you were Vietnamese or not Vietnamese, everybody enjoyed it. And I think that's the kind of stuff that we need to do and improve upon. And with a committee like this, we could learn from what we've done. When I was mayor during Summerfest, we had the community stage on that Sunday was all cultural acts, and it was very well attended. I think we had about 750 people show up for just that. So I think it's good. I think we could build off that. I don't know if we need a separate committee. I think we have, I thought we were talking about each CD committee that already meets that only meets once a quarter. And quite candidly, it's maybe an underutilized group that potentially we just have them take on this role as well, at least to start, you know, thoughts.

I think some of the other really big ideas that this committee are going to be tackling is the parks master plan. And getting a lot of that feedback from the public, that just helps streamline rather than have it all concentrated here, let's say, during council meetings, which are packed with agenda items. A lot of times we don't have the adequate time to flush out some of those ideas in a setting that I think it really deserves that kind of attention. So I think that's one of the tasks of this CARS committee is to help us with that vision.

I agree with the mayors that it is important to form this community as part of the master plan, as you stated earlier, that you want everyone's participation in the master plan as they are going to be part of the community.

Mr. Mayor, we do have a request to speak on this item. OK. Public comment, Katie Wright.

Welcome.

Thank you, Mr. Mayor, City Council. Thank you, Rob. Very good presentation. I looked at it, and it was interesting to me because I like the idea of an advisory committee that's actually interacting with the people of the city, all the people of the city. I didn't notice that it was sort of triggered by an outreach for the Vietnamese community. I'm perfectly fine with that. I have a lot of members of my neighborhood. I have people from Turkey. I have your standard blue collar, red, white, and blue, paps blue ribbon people. I have every kind of group. I love all my neighbors. This is great. What I would suggest, I have been on an advisory committee for a two-year period that was specialized to one particular group. What they did well, they did very, very well. What they did not do well was outreach in their designated community. I never saw them going around looking for people of disabilities to try and offer them help to say, hey, what kind of help do you need? They were not interactive with the community. If in your interviews you make it clear to all these people that are volunteering for this position, and without volunteers, what are we? But if you could make it clear to them that what would be expected, I would love to see expected that they consider it an emissary position, almost a calling outreach and interaction with the public directly. It's long been a complaint of mine, and I know I love to give compliments when I can. It's been a complaint of mine for a time that a lot of the senior citizens have no clue what's going on. They are password fatigued. They are not signed up for the city emails because they have to sign up. And Colin explained it to me a couple years ago. You can't just send out blanket information to people that's spam. There's a law against that. You can't just email a whole community. They have to sign up for an account. Too many of them don't do that, or they're inhibited by the fact that on a phone it's hard to read things. They're just signing up for anything and having to add a password. If you could make part of this a very definite desire that anyone volunteering for it takes it on as an emissary calling. Thank you. That's all I have to say. It sounds like a great idea. Thank you.

I have no further requests to speak.

Okay, Rob. So it sounds like we have direction to move forward with the CARS committee. Is there a specific on the formation of the committee that we can decide on?

Councilman Bly?

Yeah, I want to, you mentioned that five committee and then five members and then two staff members. What is the purpose of involving two staff members?

Two reasons. One, through Community Services Department, we would probably be the lead of the committee to share information about the Parks Master Plan, help them understand it, what the capabilities of the city and the plan possibly are, or meeting with them. Jake's in the room here. Jake puts together a great special events calendar by November of every year, so meeting with them. and saying, okay, here's our list of events. How can we use these events to better assimilate our community at tree lighting? So that would be the reason for having a community services member. The recommendation for a police department member, Police and community services are probably the two departments that interact with the community most on a regular basis. And just like you saw at National Night Out, it's so important to make sure all demographics in our community feel connected and safe with our police department, which obviously I think that was our best National Night Out we've ever had. We do have that. But reaching out into different demographics to make sure that's the case would be important.

Okay, on your part, I totally agree. It's very important that your department needs to be involved. I'm just trying to figure out how the police department, you know, comes in and play. Because the only reason I only say that with, you know, with a grain of salt is because to the minority group, when they see the police, like, I'm not getting involved with that. Why is the police involved here? They might get scared.

And I think that's the outreach we're trying to eliminate. But at the same time, it's written that the city manager would have the authority to appoint the positions we were just recommending from those two departments. If that was hindering or impacting our ability to operate as a committee, I think we could look at a different step.

Just keep understanding also the cultural perspective from, you know, particularly the Vietnamese American. When there's a police involved, they will shy away. No, I'm not getting involved. There's a police. I'm not sure what they're there for. So they might get scared. So I just wanted to show from that perspective. But I understand that the component of the police department, how involved. Actually, in my opinion, I think it's great. But also try to understand from that perspective when we try to appoint people. They call on board. When they find out, they back out later.

Thank you.

I think that's a good point. I think if you look at it, then that is more important for us to have the chief interface with them because that's where we want to build relationship, close that bridge. But yeah, you have a valid point and we can probably fine tune that if needed.

Yeah.

Okay.

We still need direction from city council.

Yeah, I think the consensus, I see heads nodding yes. Terrific. Yeah, we're going to go forward. Great job. Thanks so much. Excited. Okay. And our last item on study session, information on procedure for public comments.

during city council meetings presentation by city clerk administrator Rick Miller welcome good early evening basically just speaking to the public about how they can make public comments here at city council meetings we do offer opportunities for the public to comment on any of the three main portions of our city council meetings being closed session, study session, or the regular open meeting. At the beginning of the regular open meeting, the public has the ability to comment on non-agenda items right at the beginning or any agendized item. Then right after on our agendas, you will see a section that says public comments on agendized items. That is the time at which the public would identify the specific item on the agenda. Item number five, for instance, that's what they wish to speak on. Anytime I receive a blue speaker card, I enter it into the system. I place the speaker where they've requested to speak, whether it be an agendized item or a non-agendized item. And for those who may have arrived late and missed the first public comment portion for non-agendized items, we do have a portion at the end of the meeting where they could then have the ability to speak again on a non-agendized items, however If you spoke during the first non-agendized item period that begins at the beginning of the meeting, you would not get the chance then to come back at the second time. For those that are on Zoom, I communicate with them. They let me know they would like whatever item it is they would wish to speak on. I walk them through when I'm going to call on them, how long they have, if they have any questions for me. I also, since they can't see our speaker timer, I give them a one-minute warning through the chat feature that their time is coming to an end. But by and large, most people on Zoom are less than three minutes. I do know we have a public comment on public comments. But if you have any questions for me, I'm happy to answer them.

I think I just want to make an observation that I think we take this part of the meeting very seriously. It's it's a key part of the feedback from the public. It's it's part of our democracy. And so I at least I know we try to make every attempt to make the speakers feel welcome to give them the time to to express themselves. And and I think that's that's something that's part of our Valley brand of being a nice place to live. So thanks for all your efforts on that.

And with that public comment, Katie Wright.

Welcome. Greetings again, Mr. Mayor, council members. Of course, the First Amendment is key to everyone that's ever taken an oath. I took my first oath in 1978 as a school bus driver. Believe it or not, there's all kinds of people who take that oath. I will absolutely compliment the City of Fountain Valley, City Council, Planning Commission, every meeting you have that's a public meeting. Everyone is welcome to give public comment. I have seen, we've all seen and heard of various agencies in The county will just go ahead and say the County Board of Supervisors in various cities nearby where they're very disrespectful, they're very limiting, they're very unpleasant. I just want to compliment City of Fountain Valley. And I will throw in my usual request. I really think that you should extend the time from three minutes to five minutes. I'm told at one time it had been five minutes in Fountain Valley, and I know that in Yorba Linda it still is five minutes. Just saying. It's not unheard of. And I know it's not very likely to happen. I get it. But I have to throw that pitch in. There is a situation that happens whenever we do have a big controversial issue or a big public generating getting people coming out. Very often what will happen is they'll get a public comment section and then the developers or whoever it may be giving a presentation that has brought out all these people. It could be that they give their presentation first, which gives the people a chance to understand what the story is. Then the people get a chance to speak. But then answers and more situation comes up from the original people who have the presentation time that's pretty much sometimes unlimited. And in that presentation moment, sometimes people develop a question that they hadn't had before, or it may generate an additional chance where a person wishes they could ask another question, but it's too late. They've already done it. I don't know what can be done about that, but it's a frustration. I'm sure every city goes through this. But again, thank you so much. It's a really great city. It's a great place to speak your mind. Thank you.

I have no other comments on this item.

OK, great.

So City Manager Lee.

Can I clarify, Rick, on the public comment? If it's agendized, the individual would be able to have three minutes per agenda on the business?

Yes, I should have clarified that. The person has the ability, if there's 18 items that are agendized, they can speak on all 18 items if they wish. But again, the comments have to be relevant to the item they are speaking of.

And many cities do not do that. And the other thing that we do that I really like is that we allow the residents to speak when the agenda item comes up, as opposed to everybody doing it at the beginning of the meeting or at the end of the meeting.

Any other comments on public comments?

Yeah, I just want to say great presentation, Rick. Thank you so much.

Okay, thanks so much. Well, that'll end our study session. We're going to take a few-minute break. We'll come back at 6 p.m. for general meeting. Thank you.