Half Moon Bay City Council Meeting - May 22, 2024

The Half Moon Bay City Council met on May 22, 2024, at the Adcock Community Center. The meeting included proclamations, presentations, public comments, a public hearing on two appeals of the Caltrans SR-1 Multi-Asset Maintenance Project, adoption of a residential rent stabilization fee, approval of the Hotel Business Improvement District annual report and assessment increase, approval of sewer authority budgets, and a study session on the FY 2024-25 operating budget. The council voted on several items and provided direction for future budget planning.

Consent Calendar

• Approved items 1A through 1G unanimously: waiving reading of resolutions, warrants for March 2024, approval of minutes from October 2023 through April 2024, resolutions for the November 5, 2024 general election, receipt of legislative position letters, financial report for quarter ending March 31, 2024, and SB 1 local streets and road improvement project list.
• Item 1H (Highway 1 North Design Agreement Amendment) was pulled for separate discussion. After a public speaker and staff clarification, the council approved the amendment (amount of $127,069.82) unanimously via roll call.

Public Comments & Testimony

• Public Forum (non-agenda items):
  • Ilse Serrano and Bella Bono (Coastside Adult Day Health Center) described their services supporting seniors and caregivers, noting 50% of participants have dementia and 100% have medical disabilities. Councilmembers Penrose and Brownstone expressed strong support for the center.
  • Steve Hyman (local real estate broker) opposed the 555 Kelly Avenue affordable housing project, calling it oversized (five stories, 50,000 sq ft), costly ($43 million, $1.1 million per unit), and likely to worsen traffic and parking. He argued the project skews fairness in permitting.
  • Rocío Avila supported the project, stating the community has long needed affordable housing and urged the council to fulfill that need.
  • Patrick Keo (former planning commissioner) supported farmworker housing but raised concerns about the 555 Kelly location, parking, traffic, and the project’s Categorical Exemption (Class 32) avoiding traffic studies. He worried about setting a precedent and changing the town’s character.
  • Jennifer (third-generation resident) opposed the location near schools and a church, questioned the project’s focus on undocumented retired farmworkers while neglecting veterans, teachers, and other low-income residents, and criticized lack of community notification.
  • Patricia Stevenson opposed the location, suggested alternatives, and questioned whether the project would truly serve local residents.
  • Michael (retired business agent) supported the project but argued 16 parking stalls are insufficient and the location near schools is unsafe.
  • Crystal (Coastside Chamber) announced upcoming events: a job fair on June 15, Fourth of July block party, and a car show on July 21.
  • Greg Fontana (fifth-generation resident) opposed the governor’s pressure and said the project needs more planning.
  • Sandra Sension (ALAS farm worker program director) supported the 555 Kelly project, calling the location central and walkable for farmworkers. She expressed disappointment with comments about undocumented residents.

Discussion Items

• 2A: Appeals of Caltrans SR-1 Multi-Asset Maintenance Project (PDP-23-084)

  • Staff presented two appeals: (1) Carter/Ericksen appeal requesting direction to work with agencies to preserve parking at Surfer’s Beach, and (2) Caltrans appeal seeking modifications to planning commission conditions.
  • Key issues: loss of parking for beach access, pedestrian/bicycle safety at Kelly Avenue intersection (pork chop islands), and conditions on road widening, culverts, and crosswalks.
  • Carter/Ericksen (Len Erickson) argued parking loss (up to 150 spaces) harms coastal access and urged interagency coordination.
  • Caltrans (Kelly Ma, Dylan Lembecker, Fitzsim Wareta) presented the project scope: repaving 7.3 miles, adding bike lanes, guardrails, drainage upgrades, and pedestrian improvements. They requested deletion or amendment of several conditions, including removing the requirement to reconfigure the Kelly Avenue intersection (pork chop islands). Caltrans offered rectangular rapid flashing beacons as an alternative to moving pedestrian push buttons.
  • Public speakers (Paul Nagengas, Anjulie Gupta, Carlene Fodenauer, Marin Holt) emphasized safety concerns, especially for schoolchildren crossing at Kelly Avenue. Nagengas cited a past child fatality and argued that pork chop islands are unsafe; Gupta displayed a diagram of a safer intersection design. Holt urged council to approve the project but direct separate funding for future intersection redesign.
  • Council and staff discussed options. Public Works Director Maz Masingian explained that removing pork chops would require a separate long-term study. Councilmember Penrose and Mayor Jimenez stressed immediate safety needs. Council ultimately approved a modified resolution: approved the Carter/Ericksen appeal direction, denied most Caltrans appeal requests except deletion of Condition A.10, adopted staff’s revised Condition A.6 (including flashing beacons and school signage) but removed the requirement to relocate pedestrian push buttons. The project remains subject to Coastal Commission parking decisions. Vote: 4-0 (Councilmember Penrose voted reluctantly yes; others yes).

• 2B: Residential Rent Stabilization Fee

  • Staff proposed a $286 per unit annual fee to cover administrative costs of the rent stabilization program, with CPI adjustments starting July 1, 2025, and $150,000 from the Affordable Housing Fund for startup.
  • Public comment: Joanne Rukowski supported the fee, noting it is less than 1% of average annual rent ($31,200 for a one-bedroom).
  • Council approved the resolution 3-1 (Brownstone yes, Ruddick no, Rarback yes, Jimenez yes; Penrose absent). The fee will take effect 60 days after approval (July 21, 2024).

• 3A: Hotel Business Improvement District (BID) Annual Report and Assessment Increase

  • Staff and Chamber representative Crystal presented the 2023 annual report. The BID has not increased its per-night assessment since 2004 (currently $1). A $2 assessment is proposed to boost marketing. The chamber also requested $40,000 from the general fund for a visitor survey.
  • Council adopted the resolution of intent to levy the increased assessment, set a public meeting for June 18, 2024, and a public hearing for July 16, 2024. The $40,000 allocation was also approved. Vote: unanimous (4-0, Penrose absent).

• 3B: Sewer Authority Mid-Coastside (SAM) Revised FY 2024-25 Budget

  • City share of SAM’s $9.3 million operations budget is $5.6 million (up 6% due to increased costs despite lower flows). The budget includes $3 million for the Montara Force Main replacement. Staff recommended approval without waiving the city’s protest on IPS capital costs.
  • Council approved the resolution unanimously (4-0).

• 3C: Half Moon Bay Sewer Collection System Maintenance

  • Approved Amendment No. 7 to the SAM collection system agreement, setting FY 2024-25 cost at $212,209 (a 25% decrease due to efficiency) and extending through June 30, 2025. Vote: unanimous (4-0).

• 3D: Study Session on FY 2024-25 Operating Budget

  • Finance Manager Ken Styles and Public Works Director Maz Masingian presented a draft budget projecting a $3.9 million deficit. Revenues: $21.2 million (flat TOT, slight property tax increase). Expenditures: $25.2 million (including $1.7 million capital). Key drivers: pension costs up $400,000, public safety up $377,000. Staff recommended using $1.6 million in unassigned fund balance and $2.3 million from the Economic Uncertainty Reserve to cover the gap, and pursuing a half-cent sales tax increase (to 9.8%) on the November 2024 ballot to raise $2 million annually.
  • Council discussion: Councilmember Ruddick expressed concern about not cutting enough and suggested paid parking as a revenue option. Councilmembers Brownstone and Rarback supported the staff recommendations, noting the reserves were created for this purpose and that a sales tax increase is appropriate. The mayor and staff agreed to improve communication and include paid parking in future polling.
  • The council provided verbal direction to proceed with the budget using the recommended reserves and to advance the sales tax measure. No formal vote was taken.

Key Outcomes

• Appeal resolutions: Approved the Carter/Ericksen appeal direction to work with agencies on Surfer’s Beach parking; approved Caltrans appeal only on Condition A.10 (Poplar crosswalk deletion); adopted staff’s modified Condition A.6 (flashing beacons instead of push button relocation); denied remaining Caltrans requests. (Unanimous)
• Rent stabilization fee: Adopted $286 per unit, CPI adjustments, $150,000 startup allocation. (3-1 vote)
• Hotel BID: Approved annual report, set public hearing for July 16, 2024 on $2 assessment increase, and authorized $40,000 general fund allocation. (Unanimous)
• SAM budget: Approved FY 2024-25 general budget and collection system amendment. (Unanimous)
• Budget direction: Council agreed to use unassigned funds and Economic Uncertainty Reserve to balance FY 2024-25 deficit, and to pursue a half-cent sales tax increase on the November 2024 ballot. Paid parking to be studied further.
• Future agenda item: Councilmember Ruddick requested a letter opposing SB 2560 (Alvarez bill removing Coastal Act exemption from housing laws); staff to draft for mayor’s signature.