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Home My WebLink About2025-06-10 | Study Session Meeting CITY OF HERMOSA BEACH CITY COUNCIL POST-MEETING SPECIAL—STUDY SESSION AGENDA Call and Notice of Special Meeting: CLOSED SESSION & FY 2025-2026 BUDGET STUDY SESSION Tuesday, June 10, 2025 Closed Session - 4:00 PM and Budget Study Session - 5:00 PM Council Chambers 1315 Valley Drive Hermosa Beach, CA 90254 Councilmember Jackson Teleconference Location: Island Palms Best Western 2051 Shelter Island Drive San Diego, CA 92106 CITY COUNCIL Rob Saemann, Mayor Mike Detoy, Mayor Pro Tem Ray Jackson, Councilmember Michael D. Keegan, Councilmember Dean Francois, Councilmember David Pedersen, City Treasurer APPOINTED OFFICIALS Steve Napolitano, Interim City Manager Todd Leishman, Interim City Attorney EXECUTIVE TEAM Brandon Walker, Administrative Services Director Myra Maravilla, City Clerk Alison Becker, Community Development Director Lisa Nichols, Community Resources Director Landon Phillips, Police Chief Joe SanClemente, Public Works Director AMERICANS WITH DISABILITIES ACT OF 1990 To comply with the Americans with Disabilities Act of 1990, Assistive Listening Devices (ALD) are available for check out at the meeting. If you require special assistance to participate in this meeting, you must call or submit your request in writing to the Office of the City Clerk at (310) 318-0204 or at cityclerk@hermosabeach.gov at least 48 hours before the meeting. PARTICIPATION AND VIEWING OPTIONS Hermosa Beach City Council meetings are open to the public and are being held in person in the City Hall Council Chambers located at 1315 Valley Drive, Hermosa Beach, CA 90254 and via teleconference/Zoom at the Businesses Center at the Island Palms Best Western at 2051 Shelter Island Drive, San Diego, CA 92106. Public comment is only guaranteed to be taken in person at City Hall during the meeting or prior to the meeting by submitting an eComment for an item on the agenda. As a courtesy only, the public may view and participate on action items listed on the agenda via the following: Zoom: https://us02web.zoom.us/j/89968207828? pwd=bXZmWS83dmxHWDZLbWRTK2RVaUxaUT092 • Phone: Toll Free: (833) 548 0276; Meeting ID: 899 6820 7828, then #; Passcode: 472825 • eComment: Submit an eComment no later than three (3) hours before the meeting start time.• Supplemental Email: Supplemental emails are available for agenda items only and must be sent to cityclerk@hermosabeach.gov. Supplemental emails should indicate the agenda item and meeting date in the subject line and must be received no later than three (3) hours before the meeting start time. Emails received after the deadline but before the meeting ends will be posted to the agenda the next business day. Emails received after the deadline but before the meeting ends will be posted to the agenda the next business day. Writings distributed to all, or majority of all, of the City Council after the agenda has been posted shall be available for inspection at the City Clerk's Office located at 1315 Valley Drive, Hermosa Beach, CA 90254 during regular business hours. • Please be advised that while the City will endeavor to ensure these remote participation methods are available, the City does not guarantee that they will be technically feasible or work all the time. Further, the City reserves the right to terminate these remote participation methods (subject to Brown Act restrictions) at any time and for whatever reason. Please attend in person or by submitting an eComment to ensure your public participation. Similarly, as a courtesy, the City will also plan to broadcast the meeting via the following listed mediums. However, these are done as a courtesy only and not guaranteed to be technically feasible. Thus, in order to guarantee live time viewing and/or public participation, members of the public shall attend in Council Chambers. Cable TV: Spectrum Channel 8 and Frontier Channel 31 in Hermosa Beach • YouTube: https://www.youtube.com/c/CityofHermosaBeach90254 • Live Stream: www.hermosabeach.gov/agenda • Cablecast App: Available on supported devices and smart TVs• If you experience technical difficulties while viewing a meeting on any of our digital platforms, please try another viewing option. Page 2 of 19 Pages PLEASE TAKE NOTICE that the Mayor of the City of Hermosa Beach has called a Special Meeting of the City Council to take place at 4:00 PM on June 10, 2025, to consider and take action on only those matters set forth on the agenda below. 1.CLOSED SESSION—CALL TO ORDER 4:00 PM 2.ROLL CALL 3.PUBLIC COMMENT ON THE CLOSED SESSION AGENDA This Public Comment period is limited to Closed Session agenda items only. Public comment is limited to three (3) minutes per speaker. 4.RECESS TO CLOSED SESSION 4.a Approval of Closed Session Minutes of May 27, 2025 4.b CONFERENCE WITH LEGAL COUNSEL: Workers Comp Litigation Existing Litigation - Government Code Section 54956.9(d)(1) The City finds, based on advice from legal counsel, that discussion in open session will prejudice the position of the City in the litigation. Name of Case: Matthew Rushton vs City of Hermosa Beach, administered by Athens Administrators WCAB Case Number(s): ADJ not yet assigned Athens Claim Number(s): 24021514 D.O.I.: 1/1/2024 4.c CONFERENCE WITH LABOR NEGOTIATOR Government Code Section 54957.6 City Negotiator: Cynthia Stafford, Human Resources Employee Organizations: Hermosa Beach Police Officers' Association and Professional and Administrative Employee Group *4.d CONFERENCE WITH LEGAL COUNSEL: ANTICIPATED EXPOSURE TO LITIGATION Government Code Section 54956.9(d)(2) A point has been reached where, in the opinion of the City Council on the advice of its legal counsel, based on existing facts and circumstances, there is a significant exposure to litigation against the City. Number of Cases: 1 (claim from A. Lindgren) 5.CALL TO ORDER—STUDY SESSION 6.PLEDGE OF ALLEGIANCE 7.ROLL CALL 8.PUBLIC COMMENT 5 The public is invited to attend and provide public comment on the Study Session topic only. No general public comment will be taken during the Study Session. Public comments are limited to three minutes per speaker. The time allotted per speaker may be modified due to time constraints at the discretion of the Mayor or City Council. Another period is reserved for public comment on the Study Session topic only during item 12. Page 3 of 19 No action will be taken on matters raised during public comment, except that the Council may take action to schedule issues raised during public comment for a future agenda. Speakers with comments regarding City management or departmental operations are encouraged to submit those comments directly to the City Manager. 9.OPENING REMARKS 10.STUDY SESSION TOPIC 10.a OVERVIEW OF 2025-2026 BUDGET 9 (Administrative Services Director Brandon Walker) Link to Online Budget: 2025-2026 BUDGET 11.COUNCIL QUESTIONS 12.PUBLIC COMMENT The public is invited to attend and provide public comment on the Study Session topic only. No general public comment will be taken during the Study Session. Public comments are limited to three minutes per speaker. The time allotted per speaker may be modified due to time constraints at the discretion of the Mayor or City Council. Another period is reserved for public comment on the Study Session topic only. No action will be taken on matters raised during public comment, except that the Council may take action to schedule issues raised during public comment for a future agenda. Speakers with comments regarding City management or departmental operations are encouraged to submit those comments directly to the City Manager. 13.COUNCIL DISCUSSION 14.ADJOURNMENT Page 4 of 19 Outlook City Council Budget Study Session 6/10/25 Storage Lot Reuse Project for Parking From N Schwappach <nschwappach@gmail.com> Date Mon 6/9/2025 8:42 AM To City Clerk <cityclerk@hermosabeach.gov> Hello. I generally support proceeding with the Storage Lot Reuse Project. As I understand it, it would provide approximately 133 new parking spaces, which I believe are badly needed. I request Council consider the following: 1. I understand the storage space lease is up for renewal. If Council is interested to pursue the reuse, I assume they would enter into a short (12-18 months) renewal. This would continue the lease revenue stream while the City is working out details such as Coastal Commission approval, while allowing the lessee time to relocate and/or wind down their business. 2. I do not understand the additional spaces being described as "visitor/staff" and sometimes "fleet" parking spaces. I recall a discussion during the residential parking pass debates that some spaces near City Hall, including on Valley Drive and Clark Field, were designated visitor spaces in the Coastal plan but had been retaken as City vehicle spaces. I'm not sure why we keep having more and more City vehicles, when our City has not gotten any bigger. I would appreciate the entire issue of the City fleet being re-examined. 3. Can something be done to utilize the parking under the Vons/CVS complex? Those spaces seem to be seriously underutilized. Perhaps the City, if it needs all the vehicles it has, could arrange to lease spaces in this facility. 4. I don't understand why, it the storage space is repurposed for paid parking, City Hall spaces would also need to convert to paid. All over the City, and in every City I know, visitors troll for free parking first but then move to the paid parking if free spaces are not available. It also seems the same logic would apply to spaces on Valley - would you say those need to become paid as well? I'm just brainstorming on how to keep as many existing free public spaces extant to make an easier sell to Coastal. 5. Jumping ahead, I agree freeing up the storage space for future City Hall expansion/renovation will be useful going forward. However, in that regard,, is there any benefit to retaining, rather than demolishing the existing building in that it may be capable of being converted to, for example, new Police Department space? Just thinking out loud, that may not be feasible, but I think should at least be considered. Thank you for your consideration of these remarks and thoughts. Best, Nancy Schwappach Page 5 of 19 Outlook Storage Lot Reuse Public Comment From Drmest <drmest@aol.com> Date Sat 6/7/2025 2:46 PM To City Clerk <cityclerk@hermosabeach.gov> You don't often get email from drmest@aol.com. Learn why this is important Dear Council: I am writing in strong support of the proposed Reuse of the Storage lot into a Parking lot. My name is Dr Douglas Mest and I am the owner of Pier Medical Aesthetics, located at 415 Pier Avenue. I have been at this location for over 10 years and have always felt that there was a significant lack of Public Parking for the Upper Pier businesses. I have had a number of patients over the years be late or cancel appointments due to lack of nearby parking. This has only become more of an issue since the Pandemic and the local Parklets for the restaurants. I enjoy the outside dining options and feel they add to the City. However, they do negatively impact my business and the creation of a Upper Pier Public Parking option would help mitigate this impact. If this project were to move forward, I do have a concern as it relates to any changes to the current free parking near City Hall and the Tennis Courts. Due to our location, we are not permitted to obtain Annual street parking passes from the City due to some Coastal Commision agreement. Therefore, some of my staff need to park at the Tennis courts. If these spaces, as part of the proposed changes, become metered parking, then the City would need to create some sort of validation process or parking passes for the Upper Pier Business. As it is now, we pay an extra Business tax as part of this district and it would not be in the interest of the City to drive away any current Business owners. So ideally this would be kept in mind as the planning process and budget are reviewed. It would be a disservice to solve one problem while creating another for your local tax paying businesses. Thank you for allowing me to give my feedback regarding this proposed project. Douglas Mest, MD Page 6 of 19 Outlook Hb Budget Study Session FY 2025-26 Questions/Feedback From Laura <lpskin415@gmail.com> Date Tue 6/10/2025 1:32 PM To City Council <citycouncil@hermosabeach.gov> Cc City Clerk <cityclerk@hermosabeach.gov> Dear Mayor, Council Members, and Staff - As you review the FY 2025-26 Budget and Departmental Requests, how can we ensure a strategic lens is applied to City resources that are invested where they will deliver the highest long-term value to the community? It is with that mindset that I ask for further clarification on several Departmental Requests which I believe warrant further discussion before approval: 1. Custom Designed Street Signs ($50k) What is the rationale for this investment at this time? Are the street signs faded? Could this be phased over multiple years? Will our in-house sign shop do the work? 2. Emergency Operations Plan ($90k) How was this cost estimate developed? Are there opportunities to secure grants to offset some costs? Could this be phased to ensure proper integration with County and State efforts? 3. Reclass of Accounting Clerk to Full Time ($102.5K) What performance metrics will be used to assess the impact of this change? What is the long-term staffing plan for this function? 4. City Hall Cour tyard Floor ($45K) Is this repair critical for health/safety or primarily aesthetic? Is this part of a broader City Hall improvement plan? Capital Improvement Plan The $33.9M CIP is large — how is staff bandwidth being managed to avoid project delays? What framework can be developed so the City Council can provide timely feedback so adjustments, resource allocation, and reprioritization can occur each year? Overall Fiscal Strategy: Given the modest 2% revenue growth, how will the City manage rising salar y/pension costs long-term? Are there plans to identify offsetting savings? Is 3% increase in Salaries & Benefits sustainable in light of 2% revenue growth?Page 7 of 19 Future Considerations: Storage Lot Reuse Conversion to a Parking Lot I offered my feedback at the last CIP Study Session in regards to the renegotiation lease efforts which I believe are still ongoing. It would be helpful to have an update on that item, if time permits. After speaking with business owners on this project there appears to be support for the future long-term benefits for our city. The Storage Lot Reuse Project offers a rare opportunity to create a visible and economically impactful civic improvement with strong return potential. The project would yield a 22% return on investment after debt service. Net annual income after debt service would exceed $430K, up from $267K today — an increase of $163K/year. 155 parking spaces would provide needed flexibility for City events, City Yard equipment during renovation, and increased capacity for upcoming World Cup and Olympic events. Parking capacity at this location will support dining decks, the 500-seat theater, and future events. Residents benefit from reduced congestion elsewhere. Moreover, the $500K required to demo the building will need to happen regardless — delaying the project increases future cost exposure. According to Placer.ai data, we had 1.2 M unique visitors account for 4.5 M visits. The sales tax collected for the downtown was $1.68 M, we can calculate the amount spent per visit to the downtown. $168 M/4.5 M = $37.33 per visit. Of the 1.2 M unique visitors, about 670,000 only came ONE time. If the 670,000 visitors came back ONCE, it would generate $25 M for the businesses. Business owners I spoke with cited parking as one of the number one issues for their patrons. If parking was one of the reasons why the 670,000 visitors (out of the 1.2 M unique visitors) didn't come back to the city this project would go a long way to helping that issue. As always, I appreciate your thoughtful consideration. Laura Pena Page 8 of 19 FY 26 BUDGET WORKSHOP June 10, 2025 Page 9 of 19 •FY 26 Proposed Budget Summary Highlights •Fiscal Outlook •Next Steps Agenda Page 10 of 19 FY 26 Budget Summary Stable Revenue Balanced Budget Continued CIP investment Maintaining Healthy Reserves Improving Revenue Collection Focus on Efficiency Efforts Page 11 of 19 FY 26 General Fund Revenue Page 12 of 19 FY 26 General Fund Expense Page 13 of 19 FY 26 Budget Highlights $33.9m in CIP Projects $100k Earmark for Citywide Beautification $75k for 14th St Beach Restroom Maintenance and Rehab Maintaining 20% General Fund Reserve Page 14 of 19 o Looming Deficits LA County Contracts (Fire, Lifeguard, Beach Maintenance) expire in 2027 and 2028 Inflation o Potential Economic Downturn o ~$160m Unfunded CIP Needs o CalPERS Performance and Pension Liabilities o Insurance Fund-Rising Cost of Premiums, Claims/Litigation Fiscal Outlook -Headwinds Page 15 of 19 o Council Fiscal Restraint o Maintaining Healthy Balances and Reserves 20% General Fund Reserve (GFOA recommends 16%) Insurance Fund Balance >$3m OPEB 150% funded o Continued CIP investment o Continued Focus on Efficiencies Fiscal Outlook-Tailwinds Page 16 of 19 Five -Year Forecast Page 17 of 19 Next Steps 6/24 -Budget Workshop/Adoption Post-Budget Adoption: Reconvene Finance Sub-Committee Discuss Revenue Opportunities Fees and Charges Parking Citations Meter Rates Stormwater and Lighting District Subsidies Other Page 18 of 19 FY 26 BUDGET WORKSHOP June 10, 2025 Page 19 of 19