Half Moon Bay City Council Reviews Coastal Trail Appeals, Budget, and Revenue Options (March 5, 2024)

The Half Moon Bay City Council met on March 5, 2024, in a hybrid meeting. Key actions included a tie vote on a high-profile coastal trail extension, resulting in the denial of two appeals; approval of several staff reports; and direction to staff to pursue polling on potential revenue enhancement measures for the November 2024 ballot. The council also adopted the consent calendar, received updates on community grants and solid waste services, and approved interim staffing and budget amendments.

Consent Calendar

• Item 1A: Waived reading of resolutions and ordinances.
• Item 1B: Adopted the 2024 Legislative Platform.
• Item 1C: Approved Amendment No. 1 to the professional services agreement with Griffin Structures, Inc., for additional construction management services for the Carter Park Project, increasing the contract by $105,000 to a total of $350,000. All items were approved unanimously.

City Manager Updates

• Community Services Financial Assistance Grants: Community Services Analyst Julisa Costa reported that the nine funded organizations providing food, housing, job support, childcare, and mental health services are meeting their mid-year goals. The city submitted a joint application for $1.6 million in Measure K funding to expand healthcare access on the coast.
• Republic Services Annual Update: Republic Services presented its annual review, highlighting increased commercial organics collection (452 tons in 2023, up from 400 in 2022), community partnerships (80 cubic yards of mulch delivered to state beaches), and the upcoming CPI adjustment of 3.7% effective April 1, 2024 (approximately $1/month increase for typical residents). The city will begin enforcing SB 1383 organics mandates for businesses.

Public Comments & Testimony

• In the Public Forum, resident Rocío Ávila urged the council to prioritize affordable housing, emphasizing the need for dignified homes for future generations.
• During the public hearing on the coastal trail appeals, over 30 speakers commented. Many residents living on Redondo Beach Road expressed concerns about traffic safety, road conditions, illegal parking, and nighttime activities. Others, including representatives of the Coastside Land Trust and local trail users, spoke in strong support of the project, citing environmental benefits, improved access, and the protection of native habitat. The appellants (Mike Ferrara, former planning commissioner, and John Callan, San Mateo Land Exchange) argued that the project would increase traffic on a dangerous road and that environmental review was insufficient.

Discussion Items

• Item 2A: Coastal Trail Extension Appeals (Ferreira Appeal and San Mateo Land Exchange Appeal): The council considered two appeals challenging the Planning Commission's conditional approval of the Coastside Land Trust's Wavecrest Coastal Trail and beach access improvements. The project would create 2.8 miles of gravel trail, two sets of stairs, two parking lots (35+10 spaces in reserve), a restroom, and habitat restoration. Staff recommended denying the appeals, noting that a traffic study was not required under CEQA, that the parking capacity would not increase overall, and that Caltrans raised no concerns. The applicant emphasized that the project improves existing access without increasing capacity. Appellants and some residents argued that the intersection of Highway 1 and Redondo Beach Road is unsafe and that the project would attract more visitors without adequate traffic analysis. After extended debate, the council voted 2-2 (Councilmembers Penrose and Brownstone in favor of denying the appeals; Vice Mayor Rarback and Mayor Jimenez in favor of upholding the appeals; Councilmember Ruddock had left the meeting). Under parliamentary procedure, the tie vote meant the motion to deny the appeals failed, so the Planning Commission's decision stands, effectively denying the appeals. The decision may be appealed to the California Coastal Commission.
• Item 3B: Downtown Streetscape Master Plan Update: Economic Development Manager Karen Decker and Assistant City Manager John Dowdy presented a progress update. Community engagement included 150+ participants in workshops and a survey. Key design elements include a flush flexible street concept for Heritage Main Street, improved wayfinding, gateway signage, and enhanced pedestrian space. The plan also considers connections to North Main Street, Lewis Foster Drive, and activation of Kitty Fernandez Park. The project remains on schedule and on budget; final plan adoption is anticipated in May or June 2024.
• Item 3C: Coastside Venture Studio Introduction: The city introduced the new business incubator, housed at the Opportunity Center at Coastside. American Energy Society (AES) has been selected to run the studio, focusing on climate-resilient startups in food, water, and the built environment. AES President Eric Vettel reported that seven startups are already being recruited, with a goal of creating local jobs and contributing to a resilient coastside economy. The incubator is already ahead of schedule.
• Item 3D: Sewer Authority Mid-Coastside (SAM) Budget Amendment – Princeton Pump Station: The council adopted a resolution approving, under protest, a budget augmentation of $823,849 for the Princeton Pump Station capital replacement project, citing ongoing litigation with SAM. The funds represent Half Moon Bay's 61.5% share of the project cost increase from $1.2 million to $2.6 million. The resolution also repealed Resolution 2024-08 from February 12, 2024.
• Item 3E: Mid-Year Budget Review and Amendment: The council accepted the financial report for the quarter ending December 31, 2023, and adopted a resolution amending the FY 2023-24 budget. Key adjustments include a $980,000 shortfall in Transient Occupancy Tax (TOT) revenue (estimated at $8.6 million for the year, down 10%), $160,000 decrease in property taxes, and $500,000 increase in legal expenses. The city faces an estimated ongoing structural deficit of $5.4 million in future years, driven by declining TOT and rising public safety costs. Staff have initiated a cost allocation study and expenditure review.
• Item 3F: Potential Revenue Enhancement Measures: Staff presented options for the November 5, 2024 ballot: a parcel tax (e.g., 10¢/sq ft generating ~$4M/year, or 15¢/sq ft generating ~$6M) requiring 66.67% voter approval, and a sales tax increase (0.25% generating ~$1M, 0.5% generating ~$2M) requiring 50%+1 for a general tax. Staff recommended polling to gauge community support. The council directed the Finance Subcommittee to work with staff to conduct polling on both options.

Key Outcomes

• Coastal Trail Appeals: Denied by a 2-2 tie vote; the Planning Commission's conditional approval stands, subject to possible appeal to the California Coastal Commission.
• Appointment: Approved resolution authorizing the City Manager to appoint Steven McHarris as Interim Community Development Director.
• Downtown Streetscape Plan: Received presentation; staff will finalize the plan for council adoption in May/June 2024.
• Coastside Venture Studio: Received update; AES to continue recruiting startups.
• SAM Budget Amendment: Approved under protest, authorizing $823,849 for the Princeton Pump Station project.
• Mid-Year Budget: Approved budget amendment with adjusted revenue projections and increased legal costs; structural deficit of $5.4M identified.
• Revenue Measures: Council directed staff to proceed with polling on a parcel tax and a sales tax increase for potential placement on the November 2024 ballot.