City - Regular Meeting

Recording in progress. Everything looking good?

We have sound. Okay, great. Good evening everyone. Uh, welcome to the Pacific Grove City Council meeting. This is the regular meeting tonight, Wednesday, November 19th, 2025 at 6 PM. We're here in council chambers at 300 Forest Avenue in Pacific Grove, California. I'm calling this meeting to order. And I'll ask my colleague, Council Member McDonald, to lead us in the pledge of allegiance. One nation, indivisible, with liberty and justice for all.

Thank you very much. I'll note that all council members are present tonight. We have a full compliment. Um, and I'll entertain a motion on item one to approve tonight's agenda. Move to approve the tonight's agenda. Second. Okay, we got another motion by Amelia, a tie for a second. Um, and uh we'll go ahead and uh we'll go ahead and uh take a voice vote on this. All in favor say I. I.

Any oppose? Seeing none, we will take the agenda as stated. Uh, moving on to item 2 A. This is a certificate of recognition in honor of Mr. Stillwell, Richard Stillwell. And I believe we have some folks in the audience that uh are going to want to come join me as I read the certificate and present it to Mr. Stillwell's wife. Apologize. This mic takes about a minute to load here. How's that? No. Okay, here we go. Hi there. Hi, Mrs. Still. Hi. How you doing? So, I have here um thank you very much members of the family for and friends for coming uh to support Mr. Stillwell here for this certificate of re rec recognition uh presented to Richard Stowell in recognition of his exceptional dedication, service and contributions to the community. His unwavering commitment, generosity, and lasting influence enrich the lives of all who knew him and strengthen our community as a whole. And it is signed by our city manager, Matt Mogansson, and myself. So, Mrs. Stoella, I'll present this to you tonight. and um the the council and myself we we you know Mr. So is a treasured part of our community. So thank you so much and uh you know God bless and do you have anything you want to say or okay? Sorry guys. Thank you very much. And

thank you. Yeah. Mo, would you like to make a comment? Yes. Just uh inviting the public and staff and uh the entire community. The service will be uh this Friday at 2:00 at the Methodist Church at 915 sunset. Thank you very much, Mayor and Council members. Have a nice evening. Thank you very much. Thank you. Okay. Um, then we'll go ahead and move on to item number three, council and staff announcements. And I'll first recognize the city attorney for any close session reporting out that needs to be accomplished.

Yes. Um, I'd like to report we we did have a a close session scheduled for the end of the regular meeting on November 5th, but that close session did not take place. And then we had a special um city council meeting on November 12th. Um there was a close session at that meeting, but there is no reportable action from that closed session. And tonight's uh session. Oh, thank you. Um tonight's close session has no reportable action either.

Okay. Thank you very much. I'll now recognize council members for any council announcements. Uh Council Member will uh [clears throat] December. Well, first wish everybody a happy Thanksgiving and um eat a lot. Anyway, uh December 1st is the tree lighting ceremony uh at 5:30 down at the in front of the museum area. Just wanted to mention that. Thank you for that. That's a good announcement. Uh, council member,

since we're on uh city events, uh, Thursday the 4th is the festival of lights in downtown. It'll be start at six o'clock. So, we look forward to seeing everybody out there. Yes. Thank you. Great. I'm glad you guys covered those. Perfect. Okay. And, uh, any staff announcements, Mr. Morgensson?

Thank you, Mr. Mayor. We have a couple. Um, first I'm going to ask Katie Clark, our recreation program manager, to provide some of those. All right. Good evening, Honor Romeo, city councelor, and members of the public. Um, you guys beat me to it. You've already announced a couple of them, but I'm going to announce them in order. Um, the holiday season is here, and we have several special city sponsored events that are on our list for the end of the year. The first is Monday, December 1st, the city council, city council, city of Pacific Grove will host its annual holiday tree lighting ceremony down at Juel Park. On Thursday, December 4th, the de the chamber of commerce will host its annual parade of lights down on Lighthouse Avenue. On Saturday, December 5th, the Chamber of Commerce will host Stillwell's Holiday Fun in the Park down at Calonia Park. And then on Saturday, December 13th, the Arthritis Research Coalition will host the Rudolph Run 5K1K walk and run. Additionally, the recreation department has prepared a full lineup of several events for the youth and their family of our community. Some highlights include a gingerbread house decorating party, a winter craft workshop, the Polar Express PJ party, and new this year is a sensory friendly Santa visit. We have some additional programs as well. All those programs can be viewed online uh on our website page. And the recreation department would also like to say that we wish look forward to celebrating the holiday season with our community and we're wishing everyone a safe and happy holiday season. Thank you.

Thank you. Anyone else? Mr. Mogensson.

Yes. Thank you, Mr. Morgensson. Good evening, mayor, council members, uh staff, and members of the public. It's that time of year um for our annual uh vacancy noticing uh for the boards and commissions. So, uh pursuant to the municipal codes uh 3.02 and 3.04, 4. The city clerk's office has published the annual notice for all boards, commissions, and committees and has posted a copy in the kiosk on Laurel Drive. Um the city clerk's office will be accepting applications through December 22nd for those interested in serving on uh any of these boards and commissions. Um these are for uh uh additionally for current board, commission, and committee members with upcoming term expiration dates in January of 2026. They must reapply. Um, they've all been contacted and uh, anyone interested can uh, find our application online or can contact the city clerk's office. Thank you.

Thank you. Anything else? No. Okay. All right. Well, so keep your eyes open. There's a lot going on uh, the first 10 days in December. So, be have a lot of fun out there. Um, all right. So, let's bring it over to item four. This is general public comment dealing with matters subject to the jurisdiction of the city and the council that are not on the agenda tonight, the regular agenda. So I will ask now uh is there any members of the public wishing to make general public comment at this time? We'll take chambers first. If you're ready to come, come on up, please. So, good evening, Mayor Smith, council members. I'm Jeannie Anton here to give you an update on our Chicago Hall fundraiser. Um, first I'm excited to let you know that our committee has selected Hunter Porter Eldridge to be our architect and we're kind of waiting for things to get settled with that but he's a local man local grew up here and uh more on that coming soon. Um, I'm also pleased to let you know that the application for national landmark status was approved by the state historical resources commission. The final step will be for the application to go to the keeper of the national register, which usually takes place within 45 days, but because of the government shutdown, it's going to take a little bit longer. So, I'll keep you posted on that. Um, we were happy to be selected to be part of Monterey County Gives this year. The campaign is on right now and it will continue through December 31st. Please look for our writeup under arts and

culture in the catalog. Um, our big idea this year is to specifically ask for help making the audiovisisual system better in order to attract more groups into Shiitag Hall. So with that, our fundraising continues. You know, I still remember Tina saying they shouldn't have to do bake sales, but we're kind of doing quilt things instead. Um, so I especially want to thank Claudia Samos, the owner of Back Porch Fabrics, for the quilt raffles that she organized. We've made several thousand dollars that way. I want to thank Wilder Northrup, a local artist. She generously donated about 15 of her appliques that were framed and as of yesterday, all but one had had uh sold right away. And I want to thank Norine Nance who kind of made all the arrangements with Claudia on that. And also I'd like to h have a thanks to her for helping me with with the whole project. Could not have done this by myself. Um we will be having a fundraising dinner in January on the 13th of January. So mark your calendars. This year this time it will be at Passion Fish and again um more on that to come. So eventually together we will make Chicago shine. Thank you.

Thank you very much.

Mayor Council, my name is Mike Gibbs, a resident of Pacific Grove. Um here to talk about something a little bit different. Uh, I've been thinking a lot about AI and uh, we need a new way to arouse the citizens of PG and set a path for the future filled with economic vitality, state-of-the-art city services, and a rally cry to bring people together with a common purpose and vision. Uh, most of you are familiar with AI, generative AI, fresh pools of investment cash, and critical unmet city needs demand a new model for city government. Recent survey in the Wall Street Journal of 3,800 businesses in the US found increased productivity and performance with AI, including more immediate response times to customer service inquiries, up to a minute up to the minute reports to vastly improve ordering, inventory, and accounts payable, continuous customer product engagement, real-time expense tracking to identify waste, overspending, and abuse. And I mean real time to the minute. You can pull out your phone and see where that is if you're the CI CEO of a business. Evaluation of multiple contract proposals in minutes, not days, weeks, or months. Instant upgrades on staff assignments, project status, and activity tracking. Robust facility asset management, spending, maintenance, and priority tools. We have the talent right here in PG. There's a woman in town, uh some of you know her. She offers the service that can quickly evaluate buildings for the most efficient use of energy and water. She's headquartered here in Pacific Grove. Biggest customer is Google. Another can take a photo of an existing space, create a new park design, produce a realistic picture of that space or of that park with plants and a cost estimate at the lowest cost for labor, plants, and materials real

time. We think of AI as a set of large language models set at top cutting edge cutting edge chip design for the benefit of systems, processes and people. But a more fitting name for the uniquely US innovation of AI. More fitting label for AI is American ingenuity and that resides right here in Pacific Grove. And Pacific Groves has a potent mix of a human spirit, grit, nimble capital, and a culture of dynamism. You all know that about Pacific Grove. AI will profoundly change how government gets things done. And I truly believe that Pacific Grove can lead the way. What have we got to lose? Thank you.

Thank you. Uh, anyone online wishing she'd make a general public comment? Miss Madame Clerk, there uh do not appear to be any hands raised online. Okay, we have one more in chambers. We'll take Mr. Kuba now.

Good evening, city council. My name is Andy Cuba. I am a resident um speaking as a resident, not a member of the planning commission. uh as part of uh the May 7th presentation on on the budget presentations, there were several items that were on the capital improvements. One was for roof repairs at the youth center, one was for the city hall door and window replacement, and one was the police station roof repairs. I believe at the last city at the last city council meeting on uh the 5th of November, we finally got uh an approval. The council finally gave approval to do the roof at the police station after the first rains have started and we are in a rainy season. I'd like to know the status. Do any of you know the status or someone here could tell me what the status is of the other two and of this one? When are we going to start repairing the the uh items that may be damaged by water and when will they be completed? Thank you very much.

Thank you, madam clerk. Any hands raised? Yes, I have one hand raised. Lisa Giani,

thank you. I just want to uh congratulate the Heritage Society and thank the uh council for your support of the um Chiakqua Hall National Register nomination and getting that getting that done. Um it was a no-brainer, but that doesn't mean it didn't take a lot of work. Um and it was a wonderful experience to watch uh the state historic resources commission um meeting. The whole meeting was fascinating. Uh but I I was so impressed by the um uh the appreciation that the commissioners, the state commissioners showed for humble humble sites uh that were so meaningful in in the in the history of all these different communities. Um, I it was it was really great to to see this recognition of the importance of heritage to people in a community and and that connection. Um, so if you get a chance ever over the holidays to watch that the video of that meeting, um, it it's really well worth it. It was it was fabulous. Um but again, thank you for it council for your contribution there. Uh a thank you to Luke Kleti who brought this to

and and and and thank you to the heritage society um and and um wishing them well going forward. Thank you. Thank you. No further hands, mayor. Okay, we go ahead and close general public comment bringing back to the council for we're now on to the consent agenda. These are consent agenda deals with routine and non-controversial items. Um and so at this time I'll ask does anyone on council wish to pull an item of consent uh 9B. All right, that's the uh Cedar and Sunset in Congress. Okay, correct.

All right, that's pulled. Any members of the public wishing to pull an item on consent that's not 9B. We already pulled it. No hands on line, mayor. Okay. All right. Thank you very much. I'll entertain a motion on consent uh to approve absent 9B, which we'll hear directly after consent is approved. I'll go ahead and make that motion. Second. Okay. Motion by Amelia to approve consent. Second by Walking Stick. Any further discussion? Seeing none, I'll take a voice vote. All in favor say I. I.

Any opposed? Seeing none. Passes unanimously. Thank you very much. We'll move on to item 9B. We'll take that next in order. And I'll invite Mr. Go to come forward. Thank you, your honor. Members of the city council, [clears throat] in anticipation of this item being pulled, I did prepare a very brief presentation. So, let me go ahead and uh give that to you. Maybe four or five slides if I recall. Okay. So, this item was before the city council at your uh second September meeting of this year. So, just a few months ago. Um I would like to reiterate before I get into the presentation that this is not just the intersection section that we're talking about. This is the entire corridor from the intersection all the way up to Forest Avenue. It's going to address sidewalks. It's going to address bike lanes adjacent to the high school and also the intersection. And then how we treat 19th Street and Sunset. So Jess, just a reminder, this whole presentation is a reminder of what's already been presented before the city council. If I can figure out how to make this work. Okay. So in 2016, the city and the transportation agency for Monterey County conducted a study of the Highway 68 corridor, which is you all already know is the CALR jurisdiction. What that study determined is that the intersection at Cedar Congress and Sunset is ripe for improvements with the two schools nearby, Forest Grove Elementary and then Pacific Grove High School. The city entered into a funding agreement with the transportation agency for Monterey County TMC for measure X regional funding that is earmarked for

the Highway 68 corridor. We entered into that agreement in 2022. The city council in July 5th of 2023 authorized staff to enter into an agreement with GHD which began phase one of the Congress Cedar and Sunset intersection improvement project. So what did phase one do? It evaluated alternatives, a stop versus a roundabout. With that, we also hosted numerous public outreach meetings. a city council meeting on December 20th of 2023. A community meeting January 9th of 2024th at Chiakwa Hall, a community workshop at the high school on January 22nd of the same year, a traffic safety commission the following day. And then we had a targeted public survey primarily sent to the residents adjacent to Cedar and Congress about how they felt about these potential improvements. There have been nine public meetings and four workshops on the topic since 2022. In April of 2024, council approved a single build alternative at the intersection, which was the roundabout. That's direction that we've been pursuing. Here is that roundabout. This is a concept. This will change. This is just a concept. But I want you to realize that we're about to embark upon the beginning of the construction. That's phase two. So Calrans accepted the city's design engineer evaluation report, which means we didn't have to go through all of the reporting requirements associated with Calrans. We also don't have to pay Calrans fees

associated with this. It's a streamline process. Moving into phase two of the project focuses on developing the plans to a 30% design and also the environmental documents associated with the project. This was presented to the city council at your September 17th, 2025 meeting along with the options or along with the request to pursue amendments. the amendments for the transportation agency for Monterey County to increase the funding um agreement with them and also then to pursue the amendment with GHD to pro per um continue with phase two. That's why we're here tonight. So GHD funding, the phase one contract was was for $797,000 and some change. The second amendment's $340,000 for a total of 1.1 million. To date with GHD, we've spent $444,000. Phase two will encapsulate what has been saved in phase one because we didn't need to do all of the P and project initiation documents and so on so forth. And we were able to go into the deer process. Otherwise, this contract would probably be like 1.6 6 million. So then we have the funding agreement with TMC. That's $1 million of that larger $5 million bucket. So we need to increase that by $137,000. I've been working with the transportation agency of Monterey County and their board passed the additional funding to the agreement at their October meeting. So that's in your packet tonight is that funding agreement increasing that by $137,000.

So the recommendation tonight is to authorize the execution of amendment number one with TMC to increase that funding agreement by $137,000 and authorize the execution of amendment number two with GHD in an amount of $340,000. It's amendment number two with GHD because if you recall about a year and a half ago I came to the council and asked just for time extension as we were working through the deer that had no additional money. It was only time but that was amendment number one. So this is amendment number two. That concludes my presentation. As always I'm available for any questions. Thank you very much.

Thank you. Go ahead and go to public comment on uh this item item 9B. Anyone wishing to comment now is the time. All right, take chambers first.

My name is Beth Shamas. I live on Sunset Drive about four houses up from the intersection. Um, I go back to 2016 at the first meetings I attended. Um, my concern is really the pedestrian safety there and all of the design elements for the roundabout are really, in my opinion, not considering pedestrian safety well enough. I know they have push back crosswalks, but I I just don't see it as being very um viable for student safety on crossing those streets. Um, I do if there's going to be a sidewalk down sunset on my side of the street, that would be really helpful because right now you cannot really get to either intersection from my house unless, you know, I usually jaywalk because even walking down on my side is a little dangerous because it's it's it's close there. Um, also 19th Street coming out. I don't know what what is projected for 19th Street coming out to Sunset, but um I remember back in 2016 I suggested there be um a stop sign on Sunset at 19th just to slow that traffic down because you can't believe how fast trucks come down there. Even though knowing there is a stop sign at Congress, they fly down there past my house. So anyway, I'm just here to remind the council that pedestrian safety is what I'm really concerned about. Um, and making it a safer corridor. Thank you.

Thank you. We got another one.

Susan Golc, Pacific Grove. Um, I came tonight to urge you to slow down a little bit on this. I've yet to meet one person that thought this was a good idea, the roundabout or that we needed it. I've gone through hundreds of pages of documents that Mr. Go sent me and he suggested that I give my questions to you, which I did. But my main question is at what point, if we haven't already passed it, can we stop and change course? People want to know whether or not that can be done. Sandra, could you put that picture up for me, please? The main reason, my understanding, one of the main reasons that this was supposed to be done, although no document says that this is going to vastly increase safety, and I contend that if you take the time to go down there and envision the roundabout there, ask yourself this question. And I asked Mr. go and he couldn't come up with an answer. So maybe you can. We're worried about those kids crossing the street. And if anybody thinks they're paying attention, they don't know kids that go to high school or grammar school. So in the middle with the roundabout, you're going to see a center divide in Sunset. Mr. Go calls it the refuge. Well, if you enter the roundabout on Congress and you want to get go up the hill, you're going around. And remember, a roundabout is to move traffic faster. So you might have somebody right behind you going pretty fast going around the roundabout. How are you going to stop for somebody in the stop sign before they get to the refuge? Mr. Go said, "Well, they'll be in the refuge." Well, maybe they will and maybe they won't. So the the provisions that are made for our kids and this very ill-conceived project needs to be looked at very carefully.

Secondly, Mr. go already says it's going to be $2 million over the $5 million grant. $2 million. I asked him, "Where did you get the where you going to get the money?" "Well, I think we're going to get a grant," he said. I said, "How do you know that?" Well, they don't know that. And we certainly are not in a financial position to take that kind of risk over something that if you look at those documents he sent me that I'm supposed to pick through and decide what his opinion is. You look through those documents. Not one says we need this. He doesn't even say that. He says, "Oh, well, we're primed for improvements." Well, is this an improvement? Go down there, look at it. I really urge you and pretend you were going around that roundabout with your with another car following fast behind. A kid's walking across the street in the first leg before they get to the refuge. Boom. They you have to stop if you can stop for them. It's very likely that the car behind you is going to have is going to rear end you because the whole point of a roundabout is to have traffic moving. It just is not safe and plus we don't need it anyway. Thank you. Thank you very much,

Mike Gibbs. Again, uh just to reiterate, this has been going on for a couple of years. We've talked to a lot of people about the roundabout, and I haven't found anybody out of maybe 75 folks, residents of Pacific Grove, who saw the need for this or thought it was a good idea or that it should go forward. And maybe this is one of those projects best left for common sense because I don't see it. Um, I talked to the consultant when he was here who put part of this plan together. I asked him about the safety issue. I said, "When you did your survey, did you find any compelling reasons from a safety perspective for this roundabout?" And he mumbled around and stumbled around and didn't really come up with any good ones. Uh, so from that perspective, I don't see it. The second is the issue of imminent domain and you all know that it's a government power to take private property for public use. This is clearly public use with fair compensation compensation and following due process. So I asked the consultant I said how many times does imminent domain lead to lawsuits and delays? He said well it's not insignificant. I don't know exactly what that meant, but it meant it was more often than people might expect. So, just something to consider. Um, I think it's problematic. If we have to put our time and attention, there are many more pressing issues having to do with city streets and things that are just out there. Maybe it's not Tamcy money, but um, free money sometimes doesn't come free. Thank you very much.

Thank you. Go ahead and go on the online comment for this if there is anyone. Thank you, mayor. Yes, there's uh at least one hand, two hands raised now. Colleen Ingram. Yes. Um, thank you very much for taking my call. I just wanted to request I know it it's it may be out there, but u Mr. Go's presentation that he's doing tonight as an update if it could be made public. And also, um, this might also be be somewhere, but I haven't been able to find it. uh where the the school system PGUSD has weighed in on this project. Thank you very much.

Thank you Lawrence and Dmer.

Thank you. I have long spoken out against a roundabout here and the fact that it is not safe whether it's been at traffic commission or and the only people who seem to want this desperately are our director of public works, our mayor, and a couple of council members. Members of the public are not for this. They really aren't. And you can hear them telling you this over and over in meetings. And our public officials are definitely not listening and not hearing and don't care. And I still urge because I think that the way this has progressed, it is like they have just stuffed us into a box and it has gotten so out of hand now that they're plowing through anyway and we are going to be left with a huge unfunded bill and a mess. Thank you very much.

Thank you. No further hands. stay here. Okay. Go ahead and close public comment on the item. Bring it back to the council. I'll recognize Councilman Walking Stick. Hold the item.

Thank you, your honor. Um, I'll try and keep this brief. Um, because I'm tired of throwing money, good money after bad, uh, because this is massively unpopular with the community. Uh, given that this does not address the core issue of child pedestrian safety. In fact, to me, it appears to make it less safe. Um, I believe this entire project is of dubious community value. Uh, therefore, I move that we disapprove execution of amendment one, disapprove execution of amendment two, and we discontinue all work on a roundabout at Cedar Sunset and Congress. Do I have a second on that motion?

Motion dies for lack of a second. Um, who's next? Who would like to speak next? Uh, Council Member Row. Thank you, your honor. [clears throat]

This came up in the campaign in 2024, 2022, 2020, and I think as we get down the road with the housing element, from my perspective, we're expected to add 1,125 new dwellings. that could add 17% to our city uh our city population. So, if you think about almost 20% more people, more cars, hopefully, fingers crossed, more students, this is a five-year project. And what I fear is that we wait and we get to the point where we've added these housing units and now all of a sudden traffic is a mess and now we've got another five years we've got to wait to fix what's wrong. That intersection is fraught with all kinds of things. I won't drive there in the mornings and the afternoons just because I'll go all the way around town if I have to. So, I think we just we're looking forward. We're trying to plan our infrastructure instead of getting out the duct tape and handing Mr. Go a popsicle stick and saying, "Hey, let's go fix this road or this corridor or whatever." But this is part of the planning process. And for me personally, it looks at the housing element and what do we need to do to support those 1,125 units. It's as simple as that for me. It's planning the infrastructure that we're going to need moving forward. And so um I don't know if anybody has not put it as simply as that or if you know the you know the folks that uh don't want to do it don't understand that you know how long these infrastructure projects take and the fact that we can get funding to do it and we don't have

to lay burden to the to the to the taxpayers I think it's uh I think it's the advantage. Now, as I've always said, if we can't make it work because the funding doesn't come through, then, you know, I think that makes the decision for us. But while we have the ability to get the funding, uh we need to move forward with the project. We need to support these 1125 units that are coming and we need to um we need to relieve some of this traffic. Uh that's a mess. Now, people say, "Well, you know, the pedestrians and it's, you know, it's dangerous and people drive and it you don't hear all of these complaints in Europe. You don't hear it on the East Coast. You don't even hear it here in the places where we've implemented a roundabout. And I think of Highway 68 and I think people have, you know, maybe lost some short-term memory, but I remember trying to get out of PG at 445 and getting stuck on uh and getting stuck by the hospital all the way down to to uh um Skyline Forest because you can't, you know, all of those people were leaving work and you can't, it was, you know, an hour to get it through there. So, I think this is part of the plan and and I support it. I supported it, you know, during the campaign and and I think it's a good project and we need to move forward with it.

Absolutely. I I completely agree. I'll just going to throw out some comments and then other people can talk. Um I completely agree with all that. This is a corridor. Remember, this is I think we've said this a few times now. This is a corridor. We're going to improve the entire corridor. So that means if there need to be safety improvements on sidewalks on Sunset, that's probably going to happen. If if we need to put a stop sign coming out of 19th, I'm sure the engineers will take all that into account when they're going to develop the final plans. So this is I'm I'm 100% convinced this is going to improve safety in the intersection because I drive happen to drive through the intersection twice a day and it's it's not the most fun place to drive. So, um, and also if you're trying to walk to the football game on Friday night, trying to cross streets at night, there's no lighting. Uh, people are kind of jamming around in there. I try to stay with the kids on this side of the stop on on the of the limit line so that I'm like away from the cars, not walking into the cars. So, there's a lot going on. We I don't want to beat a dead horse because we've already talked about this a million times, but I think that it will be an improvement on the corridor and it it's great planning. Like, like we said, we're being proactive. we're actually being proactive. This is amazing. You know, we're not just putting duct tape on stuff and uh we got the money for it. So, we got we got a lot of a lot of grant money. So, yeah, that's like a green light to me in my opinion. So, I'm I'll recognize someone else now. So, I'm I'm supporting both recommendations one and two tonight. Council member Garfield.

So, this project goes back to 2015 2016. Um it has been before a variety of councils and as a late comer to council uh my policy is not to rehash what has come before but to understand it. And so, um, I went back to the previous, um, agenda reports, which led me to previous agenda reports, which led me to previous agenda reports, and then ultimately to the TAMY, um, report, which was very robust and it describes their research, it describes their um, outreach uh, which was quite extensive and also underscored their uh, their the importance of pedestrian and bicycle safety. One of the things I think we all want is for people to get out of their cars um to walk and ride bikes. Uh we're starting to see more ebikes, which if whether they're a good idea or not, I I think that kids going to school are going to be on a variety of different um wheeled objects. And so having a very safe delineated lanes of travel for people on foot, on wheels, and in cars is is really important. Um, I also want to say I had an opportunity to talk to Mr. go to ask about the design pictures we've seen and he reminded me that they are conceptual and I appreciate that point that you made tonight is my question was how safe is it is a pedestrian when a they are in a crosswalk and a person is driving leaving the um roundabout and is there enough room for one or two cars to stack up and he pointed out to me that while this is conceptual when we do get to this next phase which is the design phase. That is

the kind of issue that gets settled. Um and so that is something that we can't say how it's going to work yet and I understand the ambiguity can be a little irritating. Um but this is still a work in process. We're moving through phases. Um I've talked to lots of people and most people go roundabout. Um so it hasn't really it does seem to strike interest for some people. Um I've seen as heard as many people saying yeah that's a tough intersection as saying no we don't need it. So I think we need to listen to the experts. We have experts. Um I am not a traffic engineer but I I hear what they are saying um from TAMC and then the consultants we've hired uh to give us the best designs possible going forward. Um I support this as have the all of the council the councils have had majorities supporting this throughout the entire process. So it has a long history of support from multiple council members. I'll be one of them.

Thank you. Go ahead. Thank you. Uh and um thank you for raising the concerns. I I know that these uh similar concerns were raised previously too and and I know it's a it's a ongoing topic. Uh I I think it will be beneficial to for for the staff to so remember when when we had presentations before there were evaluations on on effectively uh how many collisions will will we have for about versus how many uh collisions are there for a stop sign and I know there is like a at least a 25% drop in collisions and fatalities uh with respect to uh a stop sign like four stop signs versus like having a roundabout. So, so it's just just the fact matter of the fact that somebody who's exiting from a roundabout is just looking at one one spot which is um going going one direction. Whereas, if you're in a stop sign, you have to look at four different spots before you're making the actually progress for a car. I can tell you that I am not comfortable and I believe that this intersection is dangerous not only for me as a driver but also for my kids with the stop signs and nobody can convince me otherwise on that. And so I I do believe that uh the other the other pattern here is that the reason why Sunset Avenue is I would say problematic is it is too wide and I think this corridor improvement will bring elements into the picture where we'll make the entire Sunset Drive narrow which automatically means the speed which the drivers are coming through today because of the wide kind of lanes is going to slow down dramatically and I think that itself is an instrument to say that we're making improvements on safety. Uh so so I'm I'm completely supportive of it. What I would recommend staff for for for the future because some some folks have suggested some historical kind of

like presentations etc to be put out is really some information on uh what is the difference between uh a roundabout and a stop sign and what kind of safety elements come into the picture with respect to those two because I think that will be helpful. uh there are several you can actually google it. There are several Google cases itself but having said that G I remember GHD coming in with the presentation. It was just like a just a massive presentation that uh I think it may have been lost in in the entire conversation but I think that that little picture gives a gives a great visual on why roundabouts really matter. Thank you.

Thank you. We're going to go to Tina or go to Council Rowan and then go to Mayor Prom. Mr. Go. I'd like to ask you a question. Um, I'd like to address uh Miss Shamas's concern. When we talk about that corridor on Sunset, we're going to add sidewalks on both sides of the street. Is that correct? That is the intention of the project. That is correct. Yeah. And I think that's going to help tremendously. So, I hope you I hope that helps to ease your concern about the the sidewalk improvement and the pedestrian traffic because right now it's I feel like I'm uh Mayor Ro.

Yeah, just um I'm going to make a motion here in a minute, but I just want to ditto what everybody else said. I'm not going to repeat it all, but one thing I do want to me mention is um the future. You have to think about the future because 10 years from now or five years from now, the traffic is not going to slow down. We're not going to suddenly have nothing there. And Paduri mentioned about uh his kids, but I've been through that intersection with my three grandkids in the car. And I feel like I need four eyes looking both direction like a iguana going this way, going that way to make sure I get through this intersection. Of course, that's just me, but I'm also talking about the future. I think we are going to have traffic in the future. Uh there's no doubt about it. And uh Councilwoman Ralph mentioned about the uh housing element that's going to be also adding, you know. So I truly believe that we need to uh continue this project. I was supportive of it in the beginning a couple of years ago and I'm willing to make a motion. Mayor.

Yes. And making it moving to approve recommendations one and two. Correct. Uh, I move make a motion to approve recommendations one and two. Thank you very much. Do I have a second? Second. We have a second by Ralph. Yeah, you have discussion. Okay, go ahead. We already got the second.

Okay, thank you. Um, yeah, so I know this is something that's going to keep coming up. It's always going to be an issue in the community and and I think the the biggest challenge we have is I don't think enough information has been presented on how exactly this is going to be safer. Um and and so rightfully so, people are concerned about safety in the intersection. This is why when it originally came before council, one of my big questions was um are we committed when we do this? So, so the deer gave us a way to bring down the cost because currently the cost isn't fully covered, but there has always been the option if the cost isn't covered for us to revert to one of the other alternatives. That said, the EIR is now being done for the roundabout. So, that would, you know, um involve maybe doing additional research on that. But if we find that the safety isn't there if we find that the money isn't there, we do have other alternatives. But the advantage I think at this point anyway of continuing with the process is that it is about the whole corridor because what I think is really important is not to leave it like it is now. And I'm still not certain whether the roundabout is the right answer. It may not be. However, the traffic calming that will come from the sidewalks, the bike lanes, the the corridor in the middle, removing the crosswalks from the intersection where there's too much going on. There is a lot to be gained from the overall project of the entire corridor. And I think we need to to kind of keep that in mind at least still at this phase. And I think we'll know a lot more when we get into the safety because I agree that we shouldn't move forward until we have convinced the convinced the community that this is a safe alternative for our families, our children for traffic in general. Um it is a highly tourist area probably on the weekends when people are leaving up Highway 68 from the beaches, but during the weekdays it's largely

locals and um I hear a lot of stories of people making illegal U-turns in the intersection. So just various things we can do to improve safety for the children is the key advantage. And I think having this whole study done takes us in that direction and we still have room to decide after this if the roundabout's the right place. If we can't acquire the land, if it's going to cost more money that we don't want to have to cover or um if it's not as safe as build, then we still have the option to make a different decision. But I think that this part of the process, the phase we're in now, is what gets us there so we can make the needed decisions after that point.

Thank you. We'll go ahead and take a roll call vote. Madam clerk, you may have Mayor Prom. I, Council Member Ralph. I council member Garfield. Hi, Council Member Paduri. I mayor I council member McDonald I and council member walking stick no motion carries 61

thank you very much appreciate everybody's work on the item thank you Mr. Go. And we will now go to item 11 A. Now done with consent item. We're now on to 11A, public hearings, ordinance to amend the salary schedule with a minimum wage change. Uh Stephanie Areola.

Good evening, mayor, council members, staff, and members of the public. Today, this is an ordinance to amend the salary schedule minimum wage. So, this will go into effect January 1st, 2026. The California minimum wage will increase from $16.50 to $16.90 and our four employers. The city has a few classifications which will receive this increase. The following are cashier for the lighthouse intern, lighthouse dosent coordinator, recreation assistant one, and there are no financial impacts since the minimum minimum wage was taken into consideration for this fiscal year. And this concludes my report. Thank you.

Thank you very much. Go to public comment on this item. Any any public comment on item 11, increase the minimum wage to state law. Seeing none online. Okay. Seeing none, bring back to the council for for action on the item. I'll ask the city attorney to read the title, please. This is an ordinance of the city of city council of the city of Civic Grove amending the salary classification schedule to comply with California minimum wage.

You can now just make a motion to approve the remaining recommendations. Do I have a motion to approve the remaining recommendations? Motion by Ralph, second by Paduri. Any further discussion? Seeing none, we'll go ahead and take a voice vote. All in favor say I. I. Any opposed? Passes unanimously. Thank you very much. Thank you, Mola, for keeping up of the statutoal duties. You got it. [laughter] Okay, go ahead and u move on to item 13A. This is uh review of a 5-year operating capital forecast. And I'll introduce or I'll have Fred, Mr. Marsh introduce this item to us.

Mr. Mayor, if I could, while he's setting up um provide a few opening comments to to open up this item tonight. So, as you're aware, this council has made fiscal responsibility uh focus this year, and we've also adopted that into our 25 and 26 city council goals and work plan. council is also um you know interested in taking actions that promote good financial governance and also to address all of our deferred maintenance and other needs that we've been talking about more recently. So the item that we're bringing to you tonight is is aimed at reaching two of our goals. The first one is review and revise policies to meet equipment and facility needs and the second goal would be identify and reduce expenditures to enhance revenues. for the presentation that um administrative services director Fred Marsh is going to walk you through tonight to to communicate a few things. First, we're going to talk about, you know, how we are looking with our five-year fiscal forecast after some small updates after the first quarter of this year. So, kind of do a check-in on that. Um then we're going to talk about the challenges and pressures that our general fund continues to experience and will continue to experience. Um then we're going to talk about some different um measures that we're looking to take to reduce expenditures, gain efficiencies, and to um better control again um spend fiscal responsibility going forward. And then we're looking at um going um how we're going to we're looking at our capital needs once again that we presented to you last close or study session of last meeting. So we'll give you an overview of those once again. So how this all ties together. You know, at the end of it all, we want to provide to you an option to pursue an agreement with a professional assistant, a professional consultant that'll help us with engaging our residents to understand better their perceptions, wants, and needs of the city services. Um, ultimately, this nothing that we're talking about tonight or, you know, going forward through this fiscal year, are we going to find like one single solution to the overall issues that we're discussing? This is this is not a this year thing. This is not a last year

thing. This is a long-term thing. And Pacific Grove is not by itself. I would say most cities in California are facing a lot of these challenges today. I think um the cities that are doing well through this though are ones that use this more of a unifying and rallying place versus, you know, a place where there's no there's really no blame in this. It just is what it is and we work together and we find solutions. And I think those solutions are on both sides of the ledger. Of course, they're going to be on reducing expenditures wherever we can and looking for ways where we can push up revenues wherever we can. we'll find it somewhere in the middle because while we're doing all this, we have to continue to operate. We have to continue to um pay of our bills. We have to, you know, provide our youth programs for our police services and everything else we do and attract high quality employees and high quality council members and everyone else along the way. So, um with that, I'm going to turn it over to Fred and um let him walk you through uh the presentation for tonight.

Great. Great. Thank you, Matt. Um, so yeah, basically part of this is going to be a rehash of some of the stuff you've seen and some stuff that Matt mentioned as well too. So first of all, I'm going to kind of give the council kind of a kind of a refresher on the five-year forecast that we originally presented back in May. So initially back in May, in essence, um, you know, this and we incorporated the two-year budget as part of it. So, the good news is with the two-year budget, we are still beating the, you know, the council assigned goals of the 25% um in our general fund, but you can see we are facing deficits, you know, each of the years. Um, so the reserves, you know, projected if we basically did nothing, you know, dropped dramatically. So, um, oh shoot, this, sorry, this is the older version. Let me go I don't know how that happens. Sorry. Um, but yeah, let me go to here. Um basically what happened is um what we've done now we've updated it for a couple different things. Now we have our final fiscal year um basically uh results in and the fund balance came in a little bit better than we thought. A couple different things. Our property taxes came in better um than we thought and we did also have some you know because we had some vacancies during the year in some of the departments. So we had some personnel savings as well um with that as well too. Um let me jump to kind of a couple of these other things. So, um, but we are really still facing some significant challenges kind of going forward. Um, our revenues pretty much are pretty pretty stagnant right now. The one area that's still kind of growing is property tax, but our major other areas such as toot um and have been relatively flat and are still projected to remain flat over the next couple years as well too. Um, we're still have, you know, like all of our surrounding cities, we're having to fund increased amounts towards the unfunded pension liability. Um it the budget does include you know funding for theou for this current fiscal year and we also did forecast some you know assumed increases for the next couple years as well too. We did not assume any basically

increases in staffing with it. Um with the expansion with the recreation programs obviously we had to add some part-time staff to it. So that added some cost. Um and the insurance costs as you know just statewide have gone up very significantly with the wildfires in California. So it's impacted us like all the other surrounding cities. So, like Matt said, you know, we're look trying to look at, you know, continuing ways, you know, to help address the deficits that we're, you know, we are facing here in the city. Um, the great news for us is the hotels, you know, shortly going to be ready to open. Um, we're anticipating that that will generate at least a million dollars a year, you know, which is going to be a real plus for us. Um, as you know, ATC still has a bit to go, but what we've done in the fiveyear for that revised five-year forecast is we did assume that it was going to start in 2930. Obviously, there's a lot before that actually happens. Um, if that happens, we're projecting it would generate about $2 million for the city. So, obviously, that'd be a huge plus for the city. Um, we're going to continue to look at our CDD and recreation programs, you know, to increase the recovery rates wherever possible and really, you know, provide the most most bang for the buck, you know, for those programs. Um, one of the things we're going to look at in the future as well, too, is just park parking in general. I mean, some of the areas we may look at in the future might be along Ocean View, you know, in the downtown, you know, just making sure we're maximizing our efficiency and effective use of staff, you know, and monitoring parking in the area. Um, looking at the rental process that we have for the rental of our city facilities. Um, we do this right now, but we're going to continue to look at, you know, grant opportunities whenever we can, you know, to maximize, you know, the matching funds that we have available uh in our funds. Um, and then also with our bid and hid fees, right? Right now, we do not collect any admin fees for that and that's pretty untypical. Most of the cities do charge some sort of admin fee. So, that's something we'll be kind of discussing with council in the future um if we're looking to potentially change that. Um on the expenditure side, the good news is um on our pension obligation bonds,

the last payment on that is in 2829. So, we'll be realizing savings from not having to pay debt service on that about $1.6 million a year. That's pretty significant. Um, you know, we've had we're currently in some really good regional partnerships right now. A couple good examples are with City of Monterey for fire, um, and M1W for basically, you know, the sewer or joint sewer maintenance basically. So, we'll continue to kind of look, you know, when when, uh, opportunities come up, you know, in those areas. Um, we always continue to kind of look at the most effective way, whether it's contracting or, you know, the use of inhouse staff or services. Um, and also if part of future budgets too, we'll look at the amount of museum contributions. Right now, the way it works is it's a little bit over 1% of our city budget. So, as you known, that's grown quite a bit over time. So, it's something just for some something for council to consider for going forward. Um, and we always look for ways whenever we can to, you know, strive for continue efficiencies in the ways of our operations. Um, we've started to do this a little bit already, but look at our boards and see if it makes sense to potentially consolidate some of those going forward in the future. Um, you know, Dan and his staff have done a great job, you know, in working with the other regional agencies whenever they do projects to integrate the sewer, you know, and the streets components of those projects to make it, you know, the most effective use of funds. Um, and we've started this already, but we're going to continue to do this as far as the, um, expanding the digitization of city records as well, too. So, um, one of the things, um, that was asked for last time when Joyce did a great presentation on the capital projects is just a refresher all that we've done, you know, in the last several years. So, I wanted to just kind of highlight this. A lot of this was in um, Joyce's presentation back in May, but I just wanted to kind of refresh staff on a couple things. So in the last six years in the different areas um we've really done a significant n number of projects in several different areas um including the facility improvements. We've done a number this kind of lists a

number of u the projects that we've done by area you know in the city um and then park and wreck projects. We've done you know 11 significant projects you know over the past five to six years and again these list that you know the significant areas we've done those projects. Um, transportation. I mean, this is really important. You know, Dan and his staff continue to really invest and make the most bang of our limited funds, you know, in the city. Uh, you can see we've done over basically addressed over 3.3 million square feet in the city. That's a lot, you know, in, you know, significant amount of time. I think one of the key stats is that bottom stat, how this PCI has gone up significantly from a 45 to right I that number is a little bit dated, but it's still 55. It's, you know, gone up significantly over the last six years. hoods. I mean, the kudos to, you know, daff for all that they've done in the city. Um, and this is basically, if you look over the last, um, six years, we've spent basically over $32 million um, in capital improvements. And so, we've really maximized the use of our funds. And one of one of the people asked about basically how much have we spent on average in the different areas. So on average during the last six years, we've spent about 1.3 million um on sewer, uh 2.6 million on streets, and uh 5.4 on different types of facility improvements. And just remember, some of these, you know, are funded by grants as well, too. That helped kind of the funding for some of these. Um so then five-year CIP. So, one of the great things about us looking to do a 5-year CIP is that this is actually considered a best practice, you know, and a lot of cities and special districts do this and it's just a great planning tool in general and Joyce, you know, talked a lot about this um last time, but that's really one of the important things for us for, you know, kind of looking forward, you know, and making sure that we're, you know, we're planning properly and that we're setting up the funding right so we can be kind of more proactive in the stuff that we do here at the city.

So, and this is again just a rehash of kind of what Joyce presented last time, but you can see over the next five years, we're projecting to spend about the ideal is that we would spend about $38 million, you know, on basically different types of transportation, sewer, facility, and parks improvements. This doesn't include, as Joyce mentioned before, we still have to do studies on storm water and for parks and recck. So the number would likely go up, but it gives you at least a, you know, preliminary idea of the amount of money that we really should be investing in city infrastructure. So there is a significant funding gap, you know, in that area. It, you know, projecting over the five years, it's going to be about $12 million. Um, and what I showed you earlier, unfortunately, the general fund really does not have the ability, you know, to act as a funding source, you know, for these capital improvements. Um, so we really do maximize the use of our limited funds that we have. We already um we basically make sure we make the minimum general fund contributions so we can get our measure X monies, you know, for our streets. That's really all that we can kind of do in the general fund right now because, you know, the limited funding status in that in that fund. Um, and these Yeah. So these just talk about unmet, as Joyce mentioned before, the unmet facility and pavement needs. Um so basically one of the things we want to do is look to um address how would we address some of these funding these deficits for the capital improvements. Um so as you know Matt mentioned before you know using a consultant firm is pretty common. I mean we've done it here actually in the past with a couple of our measures as you know um we have kind of two sales tax measures that were adopted by the city um and they used a firm in the past to kind of help help go through the process. So, we interviewed three firms that are really well known in in the state basically. Um, the one we're recommending has an extensive amount of experience. Um, they have over 20 years of experience, uh, a very high success

rate. Um, and they've been involved in a number of ballot measures in the state. Um, so the there's kind of two parts to this project. Um, the first part basically would cost in fact I apologize because this is a little bit older one. So, I'm gonna let me pull the current one I have. Um, so yeah, the there basically would to be two costs to the components. The first part of the FRA phase would be about $53,000. So that part would be basically consist of the consultant which would be about 19 a little bit over 19,000 plus travel and a direct cost of another 5,000 and then 28,000 for the polling that would basically include an initial poll of the residents regarding services, facilities and the infrastructure. So then what would happen is we would basically um between us and the consultant we would present the results um to council and probably either I would say by February um and then council can determine at that time if they would like us to go forward with the process. So if council decides at that point to go forward with the process um the second part would we are estimating it would cost about 88,000. There's about three parts to that. Basically, it's about 39,000 for the consultant. Um, that includes some travel and direct cost. Uh, if we decided to do this as what they would say a target polling or a second polling and that would cost about 27,000. Um, and then the consultants recommending that we would do someformational mailers to the public as well too for another uh $22,000. So the total cost should we decide to go from start to finish you know with the pro process and assuming the vote would go in November of 2026 um it would be

about 141,000 basically um and um the firms were recommending at this point to go with it's kind of a combination. So Props and Measures is basically the consulting firm that we're recommending to go with um and they are recommending the firm True North Research basically as the polling firm. both have had an extensive amount of experience, you know, in doing these types of campaigns and have worked very effectively, you know, with their clients, um, for doing these kind of things. Um, and with that, yeah, um, basically, and I'm going to, again, this I want to really read the most current one, and I apologize for not having the current one up there. Um, so basically we're recommending a couple different things. For council to receive the presentation and then to approve a uh professional services agreement with props and measures for ballot measure feasibility preparation and outreach services and not not to exceed mount of $141,530. And Matt, I don't know if you wanted to add any final points. So

I thank you Fred. Um, and I yeah, we'll we'll try and find the the slide with the recommendations so they're more clear for everybody in front of them. Um, but I do want to just also remind us that, you know, going into this year, we had talked about our revenue softening perhaps a bit looking at the economy and everything. So, we we had we had um we had reduced our revenue estimates by $700,000, but in order to make sure that we could soften as much as we could, we also cut expenses by 1.4 this year. In addition to that, we added extra money into our capital program so that we could accomplish certain projects that were priorities. So, um, we've already started on the road, I'll put it that way, you know, towards doing what we can internally to be as responsible as possible with the public money so that, um, anything that we look at in the future is really about our infrastructure and how can we maintain it to the level of standards that that that our residents expect here in the city. So I think that's a lot of what this culminates in tonight is, you know, going out and getting some information from them and understanding more what they see as the needs and their desires and what kind of standards they expect us to hold the committee the community to. Um it is a you know I do realize that it's the not to exceed number is um you know a larger number. However, this is a phase project and we can decide to stop at any time like Fred um explained. It's also just doing the poll we can, you know, there's a lot of good information that can come out of that that could that could help us going forward for at least a couple of years regardless of where we go with this. Um, so with with that, I don't have anything else to say. We do have the um uh representative from Props and Measures on the phone if we do have any questions or anything for for her as well. Her name is Alex. There you see her pop up. And um like I said, if we have any more full on the recommendations, then we'll put that up. So that conclude the report.

Okay. Yes. All right. Thank you very much. You're welcome for the for the very comprehensive report. So we'll go out to the public for public comment. Anyone here in chambers or online wishing to comment, please step forward.

Yes, I'll give you comments for free. [laughter]

Um, I think we've done a good job in a lot of public works areas. Um, and I do think that for Pacific Grove, our our um jewel of a town is all about the ocean and butterflies and and so to that extent, you know, like making Ocean View Boulevard and Lovers Point, you know, very very attractive and and I know we've worked on that, but just to keep that in the forefront because that's where the tourists though. Um, but the other thing that I really like to see is um, if we talk about consultants or um, I feel like Pacific Grove needs a plan to fill the vacant storefronts. I mean, it's kind of glaring. You got, you know, two large ones downtown plus the old Pier One that are just vacant. And and it's not a good look. And I just think that I've never heard um any ideas on how to promote businesses in those buildings or what do you want to do with them? Because it it it it makes it look like we're kind of fading away in a way if you you know you're walking downtown. I I just don't appreciate that feeling of like, oh, you know, this didn't look like PG when I was growing up. So, um, I just like to see some plan by the city council. I mean, you talk about a five-year plan. What's a five-year plan for developing businesses in the city? Thank you.

Come on up, Mike Gibbs. Again, um, the challenge for Pacific Grove is great. uh and traditional methods to respond to state mandates, manage cash, and raise revenue are not working. The old model of raising taxes and fees against a picture of economic decline will ultimately be disastrous. Nobel uh prizewinning Milton Friedman, who most of you may remember, called it this process the tyranny of the status quo. Doing more of the same isn't going to fix the problems we have ahead of us. Again, talking to over the past since this came up, a number of residents, I couldn't find anybody that wasn't frustrated with a city proposal to spend $141,000 to convince ourselves that we should raise money from ourselves, right? There haven't been any real creative alternatives. I didn't see anything in the agenda report. What else could we do but hire a consultant and raise taxes? That's what's going to end up happening. The good news is that the economic future of the United States is pretty bright. Uh since the beginning of the year, there have been $5 trillion in private capital investments in the US. Economic growth surged in the second quarter to 3.3% at 4.1% this quarter. Things are going pretty good. I think not everybody agrees with that. But uh what really is hidden here is that trillions of dollars are sitting on the sidelines. Gen X, Gen Zers have accumulated a lot of accumulate a lot of uh untapped wealth. For example, 30,000 employees at Microsoft are millionaires. That is booked millionaires. It's not just their investments. Same thing at Nvidia, Google, and Meta. There's a lot of money out there. The recent federal budget bill is going to allow new types of investments in municipal debt

instruments. These things will be very interesting. We haven't seen them before. And I think Gen Xers or Gen Zers want to live in towns where they can contribute and invest their money. PG should be that. We have a great uh pool of talent in Pacific Grove. We have people who have served on presidential commissions uh served at the state and local level. We have a I think a very competent planning commission. And I've always thought for the past two years this planning commission could do more work. They're ready for it. They could do some of this work. This is not hard. We know the city better than outside consultants do. They're going to write a formulaic report and they're going to submit to us something that we already know we need to do. Save the money. All right. So, I think a couple things that I would suggest is is that we'll need a not a commission and a formal group. Call it a fundraising group, a genius committee to do a couple things. First, Carmel has a Carmel Gives. They've raised millions of dollars. Um, and they've funded a lot of project. We should do the same thing here in Pacific Grove. Use AI to save money, come up with some grants and proposals. There are millions of dollars out there uh unaccumulated and use AI to make our businesses more effective and our city more effective. Thank you.

Okay, one one more. We got another one in chambers and we'll take the online after that. Thank you, mayor and city council. Uh my name is Andy Cuba. I'm speaking as resident uh not a member of the planning commission. Uh has been stated in the budget process and also in Mr. Mo's presentation that the city has budget issues. The staff and council have decided to dip into reserves since the revenue does not appear to come up with keep up with expenditures. Now, the staff and the council want to spend $141,530 on a consultant to tell the city how to increase revenue. We have performed this before with consultants and they've come up with the same ideas and the consultant recommen recommendations sit on the shelf that we've had. We've done this repeatedly. The residents have been told that we need to have high competitive salaries to our employees. Yet blue the city then goes and hires consultants to perform many activities. I don't understand why we cannot have our staff do this work. Respect suggests that the staff function request for more revenue. There also many local residents will to assist the staff and provide ideas and assistance thus saving the city about,500. Some suggestions to uh for additional revenue is to increase the toot from 14% to 12 from 12% to 14%. The staff and chamber of commerce can work together with the most to improve the number of nights that visitors come to stay in Pacific Grove. The staff and chamber of commerce can work together to increase new business in the town that generates sales tax. This would also draw more visitors. Some suggestions for reduction are review the staff as uh assets by staff or volunteer committee of

residents with a spreadsheet versus a hiring consultant. Perform a top down versus and a bottom down review. What tools and vehicles do the city not necessarily need anymore that we have used and are sitting on the shelf and don't need replacement. There are many things we can do. we can reduce a lot of the work uh efforts and replacements that we have in the public works, the police department, the sanitary and the recck department that have accumulated over the years. There could be ways to reduce costs. We seem to always go after a consultant and they always come up with the same ideas and then we just waste the money and I'm sure there's some on the shelf here. Thank you. And there are volunteers who would be great to help you. And uh we used to have a committee and it was disbanded by a bully council. We could have a citizens committee assist council. Thank you very much.

Thank you. Go ahead and go online. Thank you. Mayor Engelon Durmer, can you hear me now? Yes.

Thank you. Um, it didn't quite unmute right. Um, mayor and council, I do not consider spending $141,530 on basically a big old marketing firm because the first 53,000 for a a survey to find out what Pacific Grove really wants is a little more palatable than the second part of it, which is basically marketing to Pacific Grove residents why they need to tax themselves more. Um because this this firm specializes in uh property tax, transfer taxes, bonds, parcel taxes, assessments and fees, and oh yes, the biggie, a ballot measure for raising council member stipens. That was in there, too. And I'm kind of thinking, well, that's one of the reasons that this council is even entertaining this is because they want to see about their ballot measure for raising their stipens. Um, I don't think we have any problem getting quality people either as staff or as council members. Well, possibly. But this is really a marketing firm on steroids and I really do. One of their questions is um what are the parameters in dollars of the the tax tolerance of residents right now? Well, I can tell you mine is zero. Zilch nada. My tax tolerance is gone. So,

I don't see these people as as this consulting firm as really helping us with raising revenue um for businesses. I think they're trying to I think this is a way to see about taxing us more and certainly when we raised the sales tax before and we did it in house but unfortunately the uh legal firm we had at that time ended up putting the wrong [clears throat] tax code on our ballot measure and it we had to wait another year to uh and vote again, which was just an incredible brew. Haha. So, I would suggest you practice a little fiscal restraint here and not hire this firm. I think that just a survey to find out what the residents really want. We're the voters. What we we do and unfort Well, no, it's fortunate because half our town is not voters anymore. [sighs] vacant homes. So, thank you very much.

Any further hands? Mayor. Okay, we're gonna bring this back to the council and I will note for the record that um we have received the presentation tonight. So, recommendation one is complete. So, we will be deliberating upon item two, uh the professional services agreement with POPS and measures. And before we get to that deliberation, I'm afraid I'm going to need a a break tonight. So, I apologize to everyone, but I need a break. So, we'll come back at 7:35. Thank you. Recording stopped.

Recording in progress. Okay, I think we're back online. Is that correct, Madam Clerk? Yes. Okay, excellent. So, we're back online. We're on item 13A. We're going to deliberate recommendation number two, professional services agreement, and there there I've been told there's a hand up.

So, we'll allow that person and only that person to speak, whoever that is. Okay. Uh we have Carl Lindstöm. I just wanted to take a moment to say that the, you know, all of these proposed programs, especially, you know, between the roundabout and all the free money guaranteed that there's just no way to pay for any of this.

Thank you very much. Okay, that public comments has previously been closed and it's closed again. And again, I'll narrow the issue. We've received the report and now we're here to deliberate recommendation number two. Um, and is anyone Oh, Council Member Garfield. Thank you, your honor. So, I have some questions for Miss War Panle. Yes, you got it right.

So, we've heard from folks with various assumptions about what this polling would get us. Um, what kind of actionable information would we get from it? And can you describe some kind of uh what kind of of results you'd be getting? Are you asking questions like well would you pay taxes for this or are you asking questions like which is more important to you? Um uh recreation programs or paved streets? I mean so can you give me a better idea of what me as a resident might hear from you about?

Yeah, correct. So it's a little bit of both. Um, so we would work with um city staff to develop the uh the uh poll and the survey and you would have questions like you mentioned kind of what are your priorities um within the city and you know would you be in favor of uh just throwing this out there of a sales tax that would fund X Y and Z for the city. Um so we would gauge that uh from the residents and bring that information back to you so that you can decide how the best way to move forward. Um and how we do that is we develop an unbiased statistically reliable evaluation of voters's interest in the city. um particularly if it's on a local revenue measure and we help identify how to structure a measure if you want to move in that um in that route um and what the electorates priorities and sensitivities are around different funding mechanisms.

Okay. So, it's Thank you. Um, it's not just about um what revenue measures do you would you swallow. Um, it's it's more like well, what's important to you about the city so the city knows going forward what kind of capital improvement projects are more important than others. Correct. Yes. Okay. So, it helps guide some policy decisions as well as as revenue decisions. Yes. Exactly. Okay. Thank you. Thank you. I appreciate that information. Thank you for the question. Okay. Go ahead. Um, council member.

Yes. Um, thank you, mayor. Um, and thank you for the presentation. U just, uh, for me, Mr. Marsh, um, just a quick reminder in one of the slides you had mentioned like the the five-year forecast. Yeah. Uh, and it appeared to me the expenses were going up by $3 million. uh expenditures was $3 million um between like three years roughly a threeyear time period. What what is exactly driving that three million additional expense?

There's several different things that are kind of driving it. So number one, what we've done is we've just assumed now obviously M1 negotiations are kind of going on for the next few years, but we had to we didn't want to assume obviously a 0% increase. So we did assume about a 3% increase for compensation for going forward. Inflation right now is at at about 3% overall and so we basically assume that for going forward as well too. The insurance premiums unfortunately continue to go up very significantly and so we factored that in for going forward as well too because obviously affects the general fund. The other thing is the funding of the unpension li uh the unfunded pension liability uh those payments are they continue to go up and so those are factored in the forecast as well too. So kind of all of those things, you know, kind of lead to the rise in expenditures over time.

Okay. So it's not like one singular item, it's like a combination. It's a combination. That's exactly right.

Okay. Uh thank you for that. And um through um through this effort through the consultant or or otherwise um so we always see like um like like you just mentioned everything going up right like construction costs are going up etc. So are we what I see is like we look at the master fee schedule and adjust it by CIP um like CPI index like every annually I believe. Um but would a good representation be like based on what the costs are going for everything around us our service fees need to be adjusted accordingly and will this consultant help in something like that too?

Um not necessarily on the fee side. That's kind of where we have a separate fee consultant as we've brought to council before basically the fee updates. Um but one of the areas we can definitely take a look at on the fees is basically and I kind of mentioned this in the slides as well too is our fee recovery rate. So um our CDD recovery right now rate is pretty well. It's about between 80 to 90%. The the wreck programs in particular because we've expanded a lot of the programs and a lot of those programs don't necessarily have a lot of participation. So the revenue recovery rates on those are low. So, this is something going forward in the future, um, the recreation staff's going to evaluate and may bring back some recommendations to council in the future, um, as far as identifying some programs, maybe to potentially discontinue. And then also, like you said as well too, we may look to adjust the fees we charge for some of those programs to bring up the recovery rates on those programs because right now, um, the target for recreation is about 30%. Um, we're not even there. We're between about 20 to 25%. Um, typically wreck programs, you never really receive a a recovery of more than even 50%. Because obviously it's a lot of it is, you know, it's a service that we're providing to the public. And, you know, if you tried to charge full cost to the programs, you just have very low participation, you know, those programs.

Got it. Um, and I'm just trying to get a sense of like how, um, this this consultant will operate uh, just generally. Um so somebody mentioned um weekend stores, right? Um so is the is the city can the can we use the consultant to do some polling for weekend stores? Is that part of the package or or or no? Matt, do you want to Yeah, go ahead. I was going to say

Sure. Council member, um there there could be a question that we could come up with that would help us to understand more what people are looking for for um new retail stores or grocery whatever the store type thing is. Um but not specifically for this, you know, on on that. We are looking at several economic development opportunities and programs. For example, the council recently reallocated water to try incentivize people to move in downtown. Um we are working a lot more tightly lately with the chamber and we're looking at other ways that we can um and embrace I guess working with our with our property owners who have been a little reluctant so far to really engage with us. So I think we're we're getting a little traction with that. So what I'm trying to say is not directly to your question is we have other avenues we're pursuing that.

Okay. All right. So then let me just focus on like another question maybe pertinent which I think could apply. So right now as it as from what I know like the business license tax is is capped at a certain rate. So which is like 3,000 at the end of the day. Exactly. Technically, we can use this consultant to pull for what whether that cap can be lifted or not. Is that safe?

We could. Here's the um the business. So, we've we've actually had HDL, which you know is a firm we kind of use for some of our different revenue sources. Look at that. Um it would definitely generate some additional revenue should we eliminate that cap, but in comparison to some of the other revenues, it wouldn't generate nearly as much revenue. So, this is something we're going to really have the consultant take a look at is, you know, we have some thoughts as to some potential revenue ideas. So, we thought we'd basically work with the consultant, kind of get, you know, the residents feedback as to what they would potentially be open to as part of their surveys and then basically bring that back to council and see what council would like to do as far as, you know, going forward.

Okay. Yeah. I I just uh read the firm's name as propositions and measures, right? Measures. Yeah. And so I'm looking at like business license tax would require probably something on the ballot. It absolutely did. So these guys would would be uh involved in there in some capacity if we were to do it. They they absolutely would. Matt, were you looked like you were gonna say something? Go ahead.

Not necessarily, but I but I will say that that that'll be a choice of the council. You know, the idea of the poll again is to figure out what the community feels and what they would support or not support. So once you make a decision going forward, um if you want to pursue something next year, say on the ballot, you would also need to make a decision on whether or not we continue the contract with props and measures or if we stop there. You have your information and you just want to um not use them any further.

And and uh for all practical purposes, it's uh it's per per measure. That's the defined amount. Uh, no. So, the budget is made up of a per monthly amount, you know, like a retainer for the for the fees for them to to work with with the city to um provide I guess more of an educational campaign type thing on a specific measure once you decide to do that. So, leading up to that is just about polling and about gathering information so that you have that information and you can make a a scientific decision, if you will. you know, it was it was there's been lots of things, you know, mentioned that we could just do our own um surveys or things like that and those are, you know, good ideas and you can get informal things, but what we're trying to do here is kind of get a sampling of what 10,000 people think. Um, and those are people who we don't talk to very often. You know, there's a whole lot more people in the city who vote um here. So, that that's really the the goal of this this scientific poll is to get the best true information from a sampling of people for that represents a lot of people. And I think that's the key thing his exactly what Matt just said scientific I mean you know if staff were to do it we really couldn't kind of really guarantee a scientific you know kind of accuracy where you know the firm especially the firm that they're looking at the true north you know research they do these all the time you know they are specialists in this area and they know exactly how to approach it to get you know results that are going to be you know fairly representative of the community. So

okay uh one last question then I'll sum it up. Uh so by entering into a contract with props and measures effectively the true true north is a subcontractor. So we don't we're not we're not putting additional money towards true north. Right. That is part of that's that's the 141 includes that and that's a great question. Okay. Yeah. And I I think at the end of the day like um when we go out to put anything on the ballot right um the there is a cost involved there for the city um whether we like it or not. And I think this just gives a um I would say a proactive way of us to decide whether we really want to put it on the ballot or not because intrinsically there's a cost involved for everything.

And it's important for council to know too because there's different types of and we talked about this earlier as well too. But there's different types of tax measures that can go on the ballot. One are more just like a general purpose kind of tax measure for example which are a 50 plus one vote. one or and the others is more, you know, a specialized purpose where you just have it for one purpose and those require a twothirds vote. So, it's it's that's where the polling is going to be really valuable because you're going to see, you know, what the level of desire is and to see, you know, does it make sense to go forward. So,

okay. Yeah. And and so so for those reasons, I I'm supportive of this uh effort. I also want to recognize that like it's a it's a it's a phased approach, right? like so FA after phase one you're going to come back to the council and and we'll evaluate whether we want to proceed with the next step or not. So it's it's a 50 50 plus K right now and then forward by like 90 plus K if you want to do it or not. So so I think with that being said I'm supportive of u approving this agreement. Thank you. Thank you mayor promia.

Thank you. Um is the person still Alex? I guess I can call you Alex. Yeah. Um so, uh looking over your packet here, um they says they raised over 42 billion dollar for voter approved revenue measures, including more than two billion in the past year. Is that pretty much uh that's what I'm reading. Is that correct?

Correct. Yes. Um we work across the state on various measures. We've been in business for um multiple years. Um but yes, we work all throughout the state in different types of communities with different agencies. I see. And then um is there a uh I was looking through your packet here. Is there a percentage like uh if this goes forward, let's just say this goes forward and um you you do the survey, uh what's the voter approves measure? Is it 60%, 55%, um just curious on that what is normal?

Yeah. So, um Oh, so from the So, it depends on what you're pursuing. So, it could be a simple majority tax, so 50% plus one or if you go towards a specialized tax that would take 2/3. I see. And are you with all the cities that you um that they referred to on your client list? Have I Are you familiar with all the um cities that are on your client list? All these cities starting from Abula Hills down to uh Yucka Valley. I haven't I haven't worked on all of them, but I am familiar with quite a bit of them on the list.

Let me let me throw out a couple. Um Watsonville. Do you remember anything about Watsonville? Um yes, Watsonville. Uh we worked with them. I don't remember which year. Um but uh I do remember working on some of their stuff. Yes. Okay. And um I'll throw out another city. Gilroy. Do you have what did you do in Gilroy? Um Gilroy. Um really just off the top of my head. Sorry. Um I we worked with them kind of similar to you to see what they wanted to pursue in terms of a revenue measure.

Okay. And thank you for for the comment. Uh I make a couple of comments also on this. Um I uh have uh somewhat experience and I always saw it saying it in another light. Um, I was in education for a long time and uh there was one district we needed to uh hire a consultant to uh see if we get some bond money and they did a survey. I don't remember how much it would cost the the school district, but uh we uh got approved for $60 million for that. And so I have experience and I'm um I'm for this project. uh initial to see where it goes from there.

Thank you. Um I'll just share some thoughts. I uh at this point um hearing a lot of good comments and getting some background. um you know essentially we do have a lot of needs and so this is our time that we've decided to bring the public in to the discussion which but it also in a scientific way not you know um sometimes we don't know what the entire community is really thinking out there. So, this is one of those rare opportunities where we're going to get some pretty scientific polling and get some real information out there. And I think it's very important uh that we do that and especially with things as as important as uh raising revenue or whatever the case may be to get that that data that very uh essential data I think is is critical. So, um I think this is a good idea. Obviously, I support recommendation number two and the scientific uh feedback we might get. And so, yeah, I think this is a step in the right direction. I also like the phased approach. Uh, Council McDonald,

thank you, Mayor. Yeah, it's interesting because when it first comes up, I'm like, gosh, that, you know, sounds like a lot of money to spend to find things out. Um, and as much as I also love the idea of, you know, can we use staff, can we use community groups, one of the challenges we have is really bringing that information together. and staff already has a lot of tasks and and the other thing that comes to mind is if if we go to um let me back up actually. So being in the field of research, I tend to believe that one of the most important things is to get a real needs assessment. And being that we represent the community, what we really want to find out is what does the community feel we need? Because really, we're about serving what the community values and thinks is most important. So to me that's one reason that makes this a potentially valuable step because until we understand exactly what the public wants on a broader scale and that sampling is really important because you get more of a cross-section of the community. You don't just get the people who actively participate. You actually get a wide breadth of the community because they do that outreach. And I think that's often the only way to get to hear from people who otherwise might not speak up because they're not going to seek out speaking up. They need to be sought out. So, it just seems wise to me to find out what is important to the community now because the reality is we're going to have to prioritize. We are a city that has a limited revenue but a lot of needs. So, identifying what the public sees as most important because we can we're seven people and we know people but obviously don't know the pulse of the entire community without finding that out. So, I think there's definite value to having that done. um and at least doing phase one. I really appreciate that this was brought forward to us as a two-faced approach because I

think very much that first step informs the second. So if the community decides um we want to support something to bring in more me revenue for things that we value that gives us a way to do that. I definitely agree to finding grant opportunities. Um, there are expenses to maintaining a coastline, for example, that maybe doesn't bring in revenue, but we're required to keep it well-maintained. There's a cost of maintaining that. So, we talked about parking as a potential way to do that. Would there be support for that? How would we go about that? So, I think there's a lot of rich information to be learned. And one thing I have found is letting experts do it versus people trying to figure out how to do it and maybe not doing it quite right actually wastes more time and money. So there's a real efficiency that can come from hiring experts. And I do agree with the point that should we decide we want to measure, which we may not, um, having the people who know how to do it well, bring it forward on a ballot in a way that gets support because there's no sense in wasting the time and the effort if we don't have support behind it. And that's okay if we don't, but we don't know that until we ask the question and get out there and find out. So for that reason, I think starting the process is valuable because to me, the most important thing is to know what's important to the community that we serve.

Council, thank you, your honor. I just want to correct the record real quick. There's about 15,000 residents in Pacific Grove. 10,400 of them are registered voters. So we have an overwhelming majority of people registered to vote. And by the way, uh, in the last election, they voted at, uh, almost the highest number by percentage in the county. Um, we hear from a lot of people, but I think it's important to hear from the folks that are unheard, and there's a lot of families out there that can't follow every council meeting. They can't go to every board and commission. Um, and I think this would give the people, the taxpayers, and the voters a voice to tell us what your priorities are. And if the answer is to not do anything, then, you know, maybe we need to also ask them if they don't want to support revenue measures, then what would they support cutting? So, I think we've got to make some hard decisions. And I think this is a way for uh us to really understand what uh what everyone is thinking. I don't think that we'll get 10,400 um responses, but that would be awesome if we did. Um but I think that I think that people need to to understand where we are and um and what are we going to do moving forward and I think this is a good first step. So, I support the this um this phased approach.

Thank you. Question over here, council. More of a add-on. Okay. If I may, very briefly, I wanted to to follow on on what council member McDonald and um council member Ralph pointed out about the importance of understanding community priorities. And this is I really would like for this survey not to be just about what revenue measure we might put forth but what services then we want which then require um supports uh so that we can make policy decisions based on priorities not just the funding for it. So that was a I wanted to put that in italics and bold.

Got it. Um, thank you, Council Member Walking Stick. Thank you, your honor. Um, first I wanted to thank Mr. Marsh and M Mr. Mogusen for your uh ongoing work on the five-year operation uh operations analysis and planning. Um, it's a big lift and you you two are doing a great job. I really appreciate it. Thank you.

Thank you. Um, on the second point, um, there are some things you just hire a professional for. Um, I am not a huge fan of going out and hiring every contractor, but there are some things you just don't short change. Uh, and the reason for this is because we we are preparing ballot measures now. We're thinking through them. We're trying to get to uh uh we're we're well into the planning phase uh mulling things over, but we're at a step where we really need to know the temperature of the community. And that's not something we can guess. We don't want to guess that uh because a we're not going to put every idea on the ballot, right, and just hope for the best. Um so knowing that we're going to put some things forward, we need to be sure that we're putting the right things forward. If we put the wrong things forward, there's financial consequences to that. Uh if we put something forward that we think is great, but you don't, it fails. And then that's lost potential revenue for an idea that we could have proposed that you would have been receptive to, but we didn't think that's the way we were going to go. We need professional help on this so that we have a better sense of the community so that we can so it sounds trit, but so that we can serve you better. Um so that we put the right things forward, we make the right moves. the the deficit comes up often. If we don't make the right proposals now to create revenues, then there's there's that that has a potential to continue. We're not creating the revenues now to address that shortfall. Um, so again, this is an investment in making the right move so that we uh uh uh we're we're in a better financial situation here overall. Again, for some things you hire a professional. This is one of those things because the consequences of

getting it wrong are so high. And that's my stance on this. Thank you. Thank you. Um, at this point, I'll entertain a motion to approve recommendation two. Sounds like I'll go ahead and make that uh recommendation not to exceed the 141530, but I guess they're going to do it in phases. Am I correct? Uh, well, that's just a motion on two. It's it is a phased approach as written in the report. Okay. Uh, I make a motion on number two and um that's my motion. Okay, I have a second. I'll second. Okay, we have a motion by Amelio, second by Puri. Any further discussion? Seeing none, we'll take a voice vote. All in favor say I. I. I.

Hearing none. Passes unanimously. Thank you very much for the work on that, Mr. Marsh. I think you're staying around. You're staying around for the last item of the night here. Okay. Well, I think we're 13B. So go ahead and take it away.

This is one of the high priority items um that was adopted by council as part of the budget for this year is basically looking to establish a pension trust and be going. Oh, sorry. Give me one second. Okay. Yeah. So just to kind of remind council a little bit, this was presented a little earlier back in May, April and May about kind of the city's pension liability. So we currently, now these stats are a little bit they will need to be updated when we present the audit um in January. We'll have some more updated statistics, but it gives you a relative idea. Um we have basically our pension liability is kind of two parts. Uh cow purge gets us an actuarial report each year. Um, and as of June 30th of 24, it was about $55 million. We also have some pension obligation bonds, you know, that we're currently paying off as well, too. That's about another 6 million. So, in total, our pension liability basically is about $61 million. Um, right now, we have not set aside any reserves for that at all. Um, well, we hadn't, but with the budget this year, one of the things we did, one of our new policies is setting up a new pension reserve of about a million dollars. So, we actually did that with council's approval um, this year. Um, and it's going to be helping to kind of help to start lower the liability for going forward as well, too. So, and this is kind of just a reminder, too. A lot of the cities have started to set up reserves, you know, to start addressing funding their pension reserves because this is a common problem um for cities throughout the state. Uh so basically, if we're looking to address the city's liability, like I mentioned, we basically set aside that million dollars of reserve. The idea would be um if council approves tonight the pension trust, we would start in February of this year basically taking $50,000 a month and putting it into the trust to basically build it up over the next um basically two years. The idea is I want to use what's called dollar

averaging because if you put you know the whole amount in it would be t potentially more subject to you know uh variability whereas if you averaged it out over time kind of like if you're contributing to like your deferred comp program you do it kind ofly evenly over time. Um so we're recommending to basically go with um KPERS. They have a very wellestablished program for their pension trust. Uh they've had it in place since 2019. uh they have over $300 million uh invested in assets and 102 participants. So it's pretty pretty widely used program. Um some of the advantages of this program the city we continue to kind of maintain control of it. Um it is limited. It can only whatever goes in there can only be used for basically pension payments but we have the ability to you know whatever we want as far as the timings for contributions we can put in there. If we need to, you know, use it short term to help to pay down for a year's payments, we can use that as well, too. So, we have more flexibility by having this pension trust. They can be invested in longer term investments, which typically over, you know, a longer period of time will result in more invest and more interest income um on our basically investments. Um, and the administration, sorry, the administrative fee for the program is relatively low. It's about 25 basis points or less than 1% a year. Um so basically what they do they invest in kind of a mixed um type of investments. Part is equity part is fixed income part is what's called real estate trust and some and the other part is basically inflation protected securities in essence. Um so they have two uh proposed strategies. We are recommending going with strategy one where the expected rate of return is a little bit over 5%. There is some variability with that, but that's, you know, typically when you have longerterm investments, you will have a little bit more v variability. Um, but the key thing to mention is whenever we put those monies into there, they can only be used for pensions. We

can't use them for anything else. That's the key kind of caveat on it. So, basically with this, um, we're recommending that council adopt, uh, kind of the four different items that I have on the power slide and that's in, you know, the recommen part of the recommendation in the staff report. And with that, I'd be happy to answer any questions. Oh, thank you. U any public comment uh online for this item. No hands are raised, mayor.

Okay. And I don't see anyone jumping at the to get to the podium right now here in Chambers. So, I'll go ahead and bring it back to the council for discussion. Uh thank you very much for the report. You know, we're kind of embarking on a new area for Pacific Grove, but I think a good one. Um and um trying to again there's a lot of proactiveness tonight. So I like that too, you know, for the buzzword for the evening. Um so this is great and you know we have this pension obligation that we're we're trying to deal with. So you know this is this is our first step that we're taking and I think an important step. So who else would like to comment? Council G.

Yeah Mr. Marshall in in your slide here if you'll go back a slide. Yeah sure. it. The strategy one and strategy two numbers don't match what's in the agenda report. Yeah. Um yeah, you know what? I think there might have been a typo in the agenda report. I apologize for that. These are the most these are the more current. So it's not strategy 2 is not 3.5%. We're saying it's 4.9. It is. Thank you for bringing that up. I apologize. Okay. So the what's here is is Yeah. Actually, just to let you know, um, Council Member Garfield, um, the, uh, first representative had looked at the draft of our staff report and noted the typo, so I I made sure to fix it for the presentation. Thank you for pointing that out.

Okay. So, we'll we'll get that 5.4 and 8.4. Um, standard deviation is um, large swings.

It's moderate. There are some um but um I was going to say one of the what pur has done basically is they they have come up with strategies that result in basically so obviously they their target is 6.8%. So these are obviously below the target. Well what they've done with this program is tried to have a little bit less variability you know in the options that they offer. Um, so you can see these would probably be definitely would be less than basically because they tend they're trying to hit the 6.8 and so they're a little bit more aggressive um with their options. These are as you can see with the the classes that they have here, these are more moderate, you know, in nature. One of the things to note though is that these are longer term in nature. When you have longer term investments, you definitely have more variability. I have a m I have a feeling that the difference between one and two is they probably are a little bit longer term um in nature and also might be a little bit more in the real estate and which can vary a little bit more. So well what if I make my my assumption would be that strategy two which po which offers a lower rate of return would have a skewed a different skew on fixed income versus equities

and um I I'm I'm pleased to hear that you're saying that they've created a more conservative approach for our money uh because Kalper's ability to reach their 6.8% 8% is not always on target, which is why we do owe more money to them. And you're bringing up a very good point. If you look at CalPur's return over over a 20-year period, it's sign the swings are pretty wild. I mean, they go dramatically where these will you'll definitely still see some swings with either either one of these strategies, but they'll basically be in a shorter range. Okay. as well too.

And my my final comment is is that your uh dollar cost averaging I think will be really important because starting to invest now in a highly inflated market, a very volatile market is that we could, you know, buy high, sell low. We don't want to do that. Um so I I like the idea of staging our investment month by month by month so that we miss the highs. We may miss some highs, we may miss some lows. That's exactly. I mean, if you think about, you know, when you do your own personal investments, most people would tend to do the same thing. So, yeah. Yeah. Okay. Thank you for those that information. Thank you, Council Member.

Thank you. Um, thank you for bringing this item up. Looks like this is your day, Mr. Marsh. Uh, uh, effort. I was expecting uh, Calust to have an agenda item, too, but maybe in the future. Um, and thank you for bringing up that point. The reason I bring didn't bring up Cal Trust, um, they were having some connectivity issues for a couple days, so I was kind of hesitant to be honest on bringing forward that option. I think when they're settled down a little bit, I can definitely look to bring them forward as well, too. Great. Thank you for bringing that up. Appreciate.

Sure. Sure. Um, so my I think my question is um I think two things actually. One is um any particular reason for not choosing PARs over over this? Oh, um, PARS has a higher ed. I mean, when I initially presented the idea of having both, you know, I think it's ultimately still good to potentially have two different firms, but I'll tell you a couple things. Um, the biggest thing, Pars has a higher um, admin fee versus Kalpers. Um, the other thing is Kalpers has a little bit more I think their options are a little bit more, how do I say it? I just like their options a little bit better. and it seemed like the rate of return for when I can remember with PAL par was a little bit lower there. They have potential to go a little bit higher. That's why ultimately long-term I think it'd be good to go with both but I was really concerned when I because when I was starting to get this report together I was going to I was initially going to go with both of them but that was days they were having connectivity issues for whatever reason for a couple days and I didn't feel comfortable bringing to council you know an option where they were having issues where I couldn't even get a hold of them. Okay. So I that's why I kind of really held back on pars to be honest, but I appreciate you bringing that up. So

Sure. And this one is um like it's not necessarily hands-on, right? Like I mean you invest and then effectively Kalpers is managing the show. You're you're not dealing with with these investments directly. That is an excellent point. Yes, the um this is more I would equate to like an index fund, you know, where you just basically put it in and it just kind of rides the market where PARS you basically work with them direct and there's nothing wrong with either approach but pars is yeah you are picking more specific you know types of investments and it's more hands-on that's why their admin fee basically is more so

okay yeah I would just call out that I mean at the end of the day this this is not going to uh dramatically I would say drop our UAL kind of balances. This is just to uh I would say steady the the trend or curve that calipers is not able to provide us. Ultimately if you're if our UL needs to be paid off in 15 to 20 years, it'll still be 15 to 20 years with this initiative. Um so I think if we need to do something dramatic, that's that's a different story. But but I'm I'm okay with this and I would like to move forward with this. Thanks. Thank you. Clerk, can we go ahead and uh hear from Mr. Lindstöm? He was late and we did close public comment, but since he's the only one, I'm going to allow him to speak.

Thank you, Lindstöm. You have the floor.

You guys gave me the public comment, but this is a major swing in like 1.6 to 3.8%. There should just be a point at which you know there there's a consideration of where the math is done. Thank you for that. Thank you. Okay, we're going to close public comment again and we'll bring it back to uh the remaining council comments. I um clearly I'm supportive of the four recommendations. Um I can I'll make a motion at this time we adopt all four and if anyone wants to bifurcate they can make that recommendation.

Second take us a second. All right any discussion on this? Sure. Go ahead make a comment. Uh I I am also for this but um approximately a year year and a half ago went to League of California cities and they did talk about this section 115 trust quite a lot and u it was brought up by other people about this but it fell. But thank you very much for bringing this up. I'm totally supportive and I'll and he seconded it. Okay, I'm for it. Yeah. Well, thanks. We're good. Um, Councilman McDonald.

Thank you, Mayor. Um, yeah. So, um, one of the things I appreciate because one of my questions was going to be until I finished reading all the fine details that, um, there's no implied commitment to contribute or reimburse. So, my understanding is is even though there's this contract to contribute a certain amount, I think it said 250k for FY2526 and 600K for 2627. and maybe that brings us to around getting towards the the one million. Um, but my understanding is if we have other needs for the city, say we have a large CIP project or something else that needs to be done, we're not committed to the amount we've said. It's just a u sort of like we intend to do this, but we're not committed to do this. Is that correct?

That's exactly it. So, and yeah, thank you for kind of bringing it because that's one of the attachments. So, let me just explain that. Yeah, the 250 basically the idea that would be 50,000 a month for 5 months. So that gets us to the end of fiscal year 2526 and then basically um the 600,000 for 26 27 is that continuation of the 50,000 for 12 months. So the reason Kalpers asked for this they basically they use this as a planning tool for their device for kind of their cash flows as well too but we do we could tell them at any time you know if we needed to like temporarily hold a month's payment or whatever we can do that that's the be that's the um the beauty of this program is like we're not locked it's not like a like a mortgage where you must make those payments every month I mean we are basically they're discretionary at any time we want to make payments and another just to add on very quickly If just to remind council of the new reserve policy that we have anytime we have in a year a surplus, the idea is basically onethird of that surplus will be basically then added to the pension trust too. So this is another building block to help connect to continue addressing the pension liability. So

great. Thank you. And then um I I I really appreciate that we're doing this because it it starts us on the curve of putting that money aside for something that we need to pay anyway, but gives us the flexibility to address other needs if those should arise. And then um I noticed that we between the two asset um the strategy one and the strategy two that the the two allocations do we have the option to change those? say one's not performing well, we want to if the economy is not doing well, we want to go to the less risky one for a while. Do we have the option to do that or are we kind of locked into one or the other?

We're not locked in. We can basically change that. I mean basically it's in essence it's a simple memo to Kalpur saying it's kind of like for example your you know our typical investments if you have you know uh deferred comp investments you can take tell your adviser to change it very similar thing with Kalpers. Okay. And I did notice that you couldn't do half and half. So I I noticed that option was grayed out. So, I was thinking, well, that might even be one way. Kind of put your eggs in two baskets, so one's a little less risky, one's a little more, and that way you you have an opportunity, but I noticed that was grayed out. So, I'm assuming they're not doing that right now. Yeah, I think right now, but definitely we can look at that going forward. I I think that's one of the great things. We'll continue to monitor these and we can kind of adjust our strategies going forward.

Okay, great. And I really do appreciate that, you know, council's agreed that this is a priority. We're really looking at the fiscal responsibility, how we can really make the city sustainable long term and especially addressing the um unfunded liabilities. So, thank you for helping us uh move in this direction. Absolutely. Thank you very much. Okay, we'll now take it to a voice vote. We have a motion and a second on the floor for all four recommendations. So, I'll take the voice vote. All in favor say I. I. Any opposed? Hearing none passes unanimously. Thank you, Mr. Marsh. Well done this evening. Thank you staff. Thank you everyone for coming out. Appreciate you all coming to the meeting tonight and we are at that journment. Thank you.