City of Carlsbad FY 25-26 Budget

FY 2025-26

Operating Budget

Capital Improvement Program

CITYOFCARLSBAD,CALIFORNIA

FISCALYEAR2025-26 BUDGET

CITY COUNCIL

Budget preparation team

Finance team

Zach Korach, Finance Director

Brigid Drury, Finance Manager

Jeremy Bates, Senior Management Analyst

Bridget Desmarais, Management Analyst

Leadership team

Geoff Patnoe, City Manager

Cindie McMahon, City Attorney

Sheila Cobian, Assistant City Manager

Gary Barberio, Deputy City Manager, Community Services

Paz Gomez, Deputy City Manager, Public Works

Laura Rocha, Deputy City Manager, Administrative Services

Christie Calderwood, Chief, Police Department

Mike Calderwood, Chief, Fire Department

Maria Callander, Director, Information Technology

Amanda Flesse, Director, Utilities

Tom Frank, Director, Transportation

Jason Haber, Director, Intergovernmental Affairs

Zach Korach, Director, Finance

Kyle Lancaster, Director, Parks & Recreation

Faviola Medina, Director, Constituent & Clerk Services

Mandy Mills, Director, Housing & Homeless Services

Jeff Murphy, Director, Community Development

Matt Sanford, Director, Economic Development

Darrin Schwabe, Director, Human Resources

Suzanne Smithson, Director, Library & Cultural Arts

Amy Ventetuolo, Director, Communication & Engagement

James Wood, Jr., Director, Environmental Sustainability

Department budget preparers & advisors

Shoshana Aguilar, Utilities

Conrad Avila, Finance

Mariel Cairns, Transportation

Fiona Everett, Library & Cultural Arts

Brent Gerber, Information Technology

Lindsey Hansen, Communication & Engagement

Chad Kantner, Parks & Recreation

John Maashoff, Fleet & Facilities

Rachel Maltz, Economic Development

Debbie Jo McCool, Library & Cultural Arts

Bradley Northup, Fleet & Facilities

Debbie Porter, Human Resources

Sarah Reiswig, Risk Management

Laureen Ryan, Community Development

Amanda Simpson, Police Department

Flora Waite, Office of the City Attorney

Rosario Aranda, Environmental Sustainability

Deborah Baird, Fire Department

Pat Downie, Office of the City Clerk

Shawn Gaskari, Fleet & Facilities

Kayla Hanner, Finance

Emily Hasegawa, Construction Mgmt. & Inspection

Sarah Lemons, Communication & Engagement

Lovelynne Magalued, Transportation

Jennie Marinov, Fire Department

Roxanne Muhlmeister, Finance

Robin Nuschy, Office of the City Attorney

Megan Powers, Public Works Administration

Kim Riboni, Finance

Katie Schroeder, Office of the City Treasurer

Leah Sorensen, Housing & Homeless Services

Marsha Weeks, Parks & Recreation

& LEADERSHIP

CAPITAL IMPROVEMENT PROGRAM

APPENDICES

Dear City Council:

Carlsbad is starting the new fiscal year with a budget that invests in the community’s highest priorities, sets aside money for future infrastructure needs and grows the city’s cash reserves – all while supporting the continued delivery of top-quality day-to-day services our community expects.

Budget overview

This year’s budget reflects a long-standing commitment to fiscal responsibility and strategic planning. Despite economic uncertainty nationwide, Carlsbad remains in a strong financial position, with a AAA credit rating, strong reserves and among the lowest pension debts in the region.

In recent years, we’ve prioritized investments in core infrastructure and returned our focus to the basics – making sure essential services our community depends on remain strong. Thanks to this solid foundation, we’re able to invest in key projects and initiatives that support the City Council’s 5-Year Strategic Plan goals, while projecting a balanced budget through fiscal year 2031.

Following three years of reductions in both the operating budget and staffing, this year’s budget process focused on meaningful conversations with staff across departments to better understand what’s working well and where pressure points remain in delivering highquality services. Based on that input, the budget includes three new full-time positions in Finance, Human Resources and Fleet maintenance to address operational needs.

Even with these additions, the General Fund budget reflects only a modest increase of 1.7% – less than half the regional inflation rate of 3.8%. And we’re accomplishing this while continuing to grow our General Fund reserves during a time of immense economic uncertainty.

Investing in what matters most

This year’s budget directs resources to key projects and initiatives that support the City Council’s 5-Year Strategic Plan goals, which focus on the issues most important to the community.

Key investments include:

Public safety

• Increasing the Fire Department’s service capacity through the purchase of a new aerial ladder fire truck

• Reclassifying six EMTs to firefighters this year as part of a multi-year effort to enhance emergency response

• Additional funding for brush and vegetation management to reduce wildfire risk across city preserves and strengthen hazard reduction within the city-owned urban forests, such as Hosp Grove

• Six additional Police Department positions to improve response times, assist with traffic mitigation for special events, enhance digital forensics services and assist in resolving internet crimes against children

Sustainability

• Advancing initiatives in the City Council’s adopted Climate Action Plan, including switching all energy use at city government facilities to 100% renewable through the Clean Energy Alliance

• Accelerating the replacement of the city’s vehicle fleet with 14 electric and 15 hybrid vehicles

Community character & connection

• Construction of Veterans Memorial Park, which is expected to begin in late 2025. The 93.7-acre park will honor veterans, offer places for quiet contemplation as well as active uses like the city’s first bike park and nature-inspired playground, and maintain over half the land as natural habitat

• Ongoing support to keep the city’s Georgina Cole Library and Carlsbad City Library on Dove Lane open on Sundays, restoring seven-day-a-week community access to library services for the first time in five years

• Expanding support of programming and services at the newly upgraded Schulman Auditorium at Dove Library

Capital Improvement Program

The City of Carlsbad’s Capital Improvement Program reflects the city’s ongoing commitment to maintaining the highest standards of quality facilities for our community today and in the future.

The fiscal year 2025-26 Capital Improvement Program focuses on 194 projects planned over the next five years. Approximately $47 million in new appropriations fund the continuation of existing projects as well as a limited number of new projects.

To deliver on our commitments to residents, this year’s budget emphasizes completing projects already underway. As a result, only 14 carefully selected new projects were added, ensuring resources are concentrated where they will have the greatest impact.

General Fund asset replacement reserve

Just as the city plans ahead for major Capital Improvement Projects, last fiscal year the City Council approved a new General Fund asset replacement reserve. This reserve continues to manage and fund the replacement of the city’s large machinery and equipment separately from the General Fund reserve.

Staff projects about $10.5 million will be needed to cover replacement costs in the next 10 years. The reserve helps the city prioritize and strategically plan for these costs without affecting the General Fund reserve or annual budget surpluses.

Strategic Digital Transformation Investment Program

Over the years, the city’s use of technology has become as critical to city operations as traditional infrastructure. The city’s Strategic Digital Transformation Investment Program increases efficiencies, security, transparency and data-driven decision making through investments in the city’s digital infrastructure.

In total, 40 continuing and new projects are planned over the next five years, with $5.4 million appropriated for fiscal year 2025-26

One key effort is the Core Systems Modernization Project, which will upgrade the city's technology by consolidating seven separate systems into a single, centralized platform. This major initiative will increase efficiency, enhance security and create a more user-friendly experience for staff and residents. Thanks to funding set aside over several years — and in this year's budget — the project is now underway.

General Fund reserve

The City Council has a policy to maintain the equivalent of 40% of the annual General Fund operating budget in a reserve account. This helps ensure that during emergencies and economic downturns the city can continue to meet the community’s needs. In June 2026, the city is projected to have $147.8 million in reserves, or 61% of the annual General Fund operating budget.

Pension strategy

At a time when cities throughout California continue to be challenged by increasing payments into the California Public Employees' Retirement System, the City of Carlsbad has achieved one of the lowest pension debts in the San Diego region. This is due to strong funding through both CalPERS and the city’s separate Section 115 pension trust account, where the city manages how funds are invested. Carlsbad’s pension is funded at 77% and remains on track to reach the City Council’s target of 80% by fiscal year 2028-29.

However, continued vigilance is needed, as CalPERS investment returns, which help fund pension benefits, remain vulnerable to market volatility.

Looking ahead

While the broader economy continues to present challenges, Carlsbad is well-positioned to adapt. This is a focused, responsible and responsive budget – one that addresses both internal and community priorities and sustains high-quality services without accelerating any projected financial deficit over the next five years.

Thank you to the City Council for your continued leadership and commitment to responsible financial stewardship. With this budget, Carlsbad is taking another important step toward achieving the community’s long-term goals while continuing to deliver top quality day-today services that enhance the lives of all who live, work and play in our city.

Sincerely,

Geoff Patnoe City Manager

INTRODUCTION

The annual budget is the most significant expression of how City Council policies are translated into daily operations. In this document, you will see where the city gets the money it uses to carry out its mission and how that money will be spent during the fiscal year that begins July 1, 2025

More than a spending plan, the annual budget is also intended to provide a window into the complex and dynamic economic environment within which your local government operates. As such, this document reviews local, state and national trends affecting city finances, as well as demographic information, regulations and policies that affect how, when and where the city invests resources.

READERS GUIDE

Some of the information included in this budget document is required by state law. Other details are provided for context and transparency. More than anything, city staff have prepared this budget to serve as a practical guide and tool for ensuring the City of Carlsbad lives up to its standard of being the best run government, period.

The following information is included in the four main sections of the budget:

Introduction

• Information about the city, its size, its demographics, the city government structure and other background

• How the budget is prepared and approved

• Input city staff received from the public and how it has been incorporated into city spending priorities

• The economic and fiscal issues facing the city

• Financial management policies

Operating Budget

• An overview of where the city gets the money (“revenue”) to fund daily operations

• A big picture summary of city staffing levels, spending broken out into different categories and other aggregate information

• Detailed budgets for all city functional areas

Strategic Digital Transformation Investment Program

• Major city digital transformation projects (online permitting, records management system, police computer aided dispatch system, hardware and software, security strategy, etc.) included in this year’s budget

• How projects are identified and prioritized

• Sources of funding and long-term plan

Capital Improvement Program

• Major city construction projects (roads, water and wastewater systems, parks, etc.) included in this year’s budget

• How projects are identified and prioritized

• Sources of funding and long-term plan

BUDGET PROCESS

The City Council sets the overall policy direction for the City of Carlsbad and helps staff prioritize programs, projects and services to support that direction. Public input plays a critical role in setting both the long-range policy direction of the city and decisions about day-to-day spending. The city operates on a fiscal year that begins July 1. City staff in all departments prepare individual budgets for their functional areas. These budgets are then combined into an overall city budget that is presented to the City Council each spring for review and input.

The City Council has the authority to approve the annual budget and may amend it during the year if needed. The legal level of budgetary control is at the fund level, which means spending in each different type of fund may not exceed the budgeted amount without City Council approval. Additional information regarding the budgetary controls can be found in the resolution approving the annual operating budget in the appendices.

December

Finance Department staff hold meetings with departments to discuss budget goals and timelines for the upcoming fiscal year. Finance Department staff also prepare base budgets for each department during this time based on prior fiscal year appropriations

January

City staff hold a budget kick-off meeting to discuss priorities for the upcoming budget cycle, any changes to the budget process compared to last fiscal year and the calendar for submission of required budget forms. Departments begin developing their budget submissions based on the base budgets provided by the Finance Department and their needs and budget guidelines for the new fiscal year

February

Departments provide their budget submissions to the Finance Department. These submissions include any requests departments make to amend their budgets, along with general information about existing personnel allocations and budget for professional and outside services. Finance Department staff review submissions, analyze requested budgets and work with departments to make any necessary changes.

March

Departments present their budgets, including significant changes and requests for new funding, to the City Manager. Departments submit estimates for current fiscal year-end revenues and expenditures to Finance.

April

Based on meetings with individual departments, the City Manager decides the budget that will move forward for City Council consideration. Finance Department staff prepare the preliminary budget document.

May

Staff present the preliminary budget to the City Council for consideration. After this public meeting, staff amends the preliminary budget document for any City Council-directed changes. City staff also hold a public budget workshop to discuss the preliminary budget with the community and answer questions about it.

June

At a public hearing, staff present the final proposed budget to the City Council for consideration and adoption.

5 - YEAR STRATEGIC PLAN

The City of Carlsbad is guided by a 5-Year Strategic Plan, which was adopted by the City Council in 2022. The plan serves as a road map during the budget process by identifying specific, measurable objectives to be achieved during the five-year timeframe.

The plan was developed by working closely with the community to identify a vision for the Carlsbad community, strategic plan goals and project priorities. The community will continue to be engaged in refining specific projects and initiatives within the strategic plan as it is implemented. This input is also incorporated into the annual budget process.

2023-2027 Strategic goals

The 5-Year Strategic Plan includes high level goals, objectives, projects and service commitments that support the Carlsbad Community Vision.

Core services

The city fulfills its purpose and supports the 5-Year Strategic Plan goals every day by providing core services and functions of municipal government at a very high level of quality. From a resource perspective, these ongoing services represent the vast majority of the city’s annual budget.

ANNUAL WORKPLAN

Specific work plans and resource allocations to support the 5-Year Strategic Plan are developed each year and included in each department’s budget. Some of the key initiatives, projects and services that support strategic plan goals in the fiscal year 2025-26 budget include:

• Continue work on an updated growth management plan

• Invest in projects that make the Village and Barrio more walkable

• Construction of Veterans Memorial Park. The 93.7-acre site will honor veterans for their service, celebrate the site’s natural beauty and views, and feature family-oriented amenities, while minimizing environmental impacts by maintaining over half the land as protected habitat

• Pursue grant funding with SANDAG and NCTD to further the design of a project to lower the railroad tracks between Agua Hedionda and Buena Vista lagoons

• Complete construction of the Monroe Street Pool renovations

• Provide high quality library services, programs and events – including expanded support of programs at the newly upgraded Schulman Auditorium at the Carlsbad City Library on Dove Lane – that bring people together and support lifelong learning

• Maintain the return of Sunday hours at the city’s Georgina Cole Library and Carlsbad City Library on Dove Lane

• Continue traffic safety improvements citywide

• Implement the city’s Homelessness Action Plan to help address homelessness in Carlsbad and its effects on the community

• Continue a high level of public safety services including a full-service Police Department, fire and emergency medical services, a park ranger program and city lifeguards

• Seek property for permanent Fire Station 7

• Continue to foster strong relationships between community members and the Police Department through the Community-Police Engagement Commission

• Increase Fire Department service capacity through the purchase of a new aerial ladder fire truck

• Reclassify six EMTs to paramedic firefighters in a multi-year effort to enhance emergency response

• Fire mitigation and preparedness efforts for brush and vegetation management across the city’s 6,500 acres of preserves and hazard reduction within the city-owned urban forests such as Hosp Grove

• Continue funding six positions added to the Police Department to improve response times, assist with traffic mitigation particularly for special events, enhance digital forensics services and assist in resolving internet crimes against children

• Advance initiatives in the city’s adopted Climate Action Plan to meet council-directed sustainability goals, including switching all of the energy used to power city government buildings, facilities and operations to the Clean Energy Alliance’s 100% renewable energy option

• Accelerate the replacement of the city’s combustion engine fleet with the purchase of 14 electric and 15 hybrid vehicles

• Build additional EV charging stations in the Village

• Manage the city’s 6,200 acres of habitat preserves

• Continue to implement new sustainable materials management programs, including organics recycling and reducing use of single use plastics

• Continue a cybersecurity awareness program for businesses

• Continue the Life in Action recruiter program to help streamline the connection between employers and qualified candidates

• Provide resources to grow and support key industries in Carlsbad’s economy

• Support the long-term viability of small businesses, startups and entrepreneurs in partnership with local and regional collaborators

• Support workforce development by collaborating with the San Diego North Economic Development Council and California State University San Marcos to expand an intern housing program

• Streamline operations by consolidating the city’s core IT systems to improve efficiency associated with operating many different systems with different vendors

• Expand the software platform for managing affordable housing, handling records, automating business processes and conducting data analytics

• Continue modernization of IT infrastructure to improve cybersecurity and data analytics

• Foster a culture of continuous improvement that equips the organization to deliver excellent service to the community

• Attract and retain a talented, diverse and engaged workforce

• Maintain CalPERS funded status of 80% or greater (Council Policy No. 86)

• Continue design of the Orion Center (centralized public works yard) and Public Works storage facility and evidence storage building for the Police Department

• Implement a cutting-edge Computer Aided Dispatch system with a real-time crime center

• Install public wireless internet access at Alga Norte Park

• Upgrade library Radio Frequency Identification system for automated checkouts/returns

COMMUNITY ENGAGEMENT

The City of Carlsbad is guided by two documents built on extensive feedback from the community:

• Carlsbad Community Vision

• City Council 5-Year Strategic Plan

The Carlsbad Community Vision was first developed over 10 years ago through an 18-month public engagement process. Since that time, the city has checked in with the community every few years to validate the nine core values that make up the community’s vision for the future.

While areas of emphasis have shifted based on current events, the economy and other factors, the values have stood the test of time.

Strategic planning input process

In 2021, the City Council decided to develop a 5-Year Strategic Plan to focus on building momentum on its highest priority goals. Previously, the City Council developed goals annually, often causing new goals to be added to the list before the previous year’s goals could be completed. As a result, progress could be slowed as staff’s efforts were spread among too many competing priorities.

The City Council chose five main areas of focus within the Community Vision, based on input received from the community. Then, the public was invited to share their ideas and priorities within each area. This public engagement process yielded the largest amount of community input since the city launched a formal community engagement program in the early 2000s.

The fiscal year 2025-26 budget represents the work plan and resource allocation for year four of the strategic plan’s implementation.

Ongoing input

The city continues to engage the community on specific projects and initiatives within the strategic plan. Input gathered during fiscal year 2024-25 that helped shape decisions reflected in the fiscal year 2025-26 budget included:

• Hundreds of comments emailed from community members.

• Over 210 participants at public workshops and meetings.

• Over 750 surveys completed by community members.

• Public workshops, online surveys and other engagement for specific projects:

o Barrio public art traffic circle

o Barrio lighting project

o Carlsbad Boulevard and Tamarack Avenue intersection improvements

o Carlsbad Reads Together

o Climate Action Plan

o Safe Routes to School

o Tyler Street complete streets improvements

o Veterans Memorial Park public art

o Chestnut I-5 underpass public art

o Water, recycled water and sewer rates

o Drive-thru regulations

o Garfield street parking

Budget input

Finally, the city also sought input on the budget itself through a public workshop, public meetings, social media and other channels. A list of these efforts can be found in the appendices.

CARLSBAD, CALIFORNIA

The City of Carlsbad is situated in north San Diego County where a great climate, beautiful beaches and lagoons, and abundant natural open space combine with world class resorts, family attractions, wellplanned neighborhoods, a diverse business sector and a charming village atmosphere to create the ideal California experience.

Our History

Named for a famed 19th Century European spa whose mineral springs were found to be remarkably similar to those found here, the City of Carlsbad’s history reflects the heritage of many cultures. The shoreline of the city’s Agua Hedionda Lagoon was home to the indigenous Luiseño and Diegueños Indians for centuries before the arrival of the Spaniards. The area known today as Carlsbad was once a territory of Spain and then Mexico. The City of Carlsbad was incorporated in 1952 and today is home to more than 100,000 people. Guided by an award-winning growth management plan approved by voters in 1986, the City of Carlsbad has matured into a well-rounded community where parks, roads and other infrastructure have kept pace with development. Now that the period of rapid growth is coming to an end, the city is focused on sustaining an excellent quality of life for residents and continuing to foster a strong sense of community.

CITY GOVERNMENT

The City of Carlsbad is a municipal corporation following the council-manager form of government. The City Council, the city’s legislative body, defines the policy direction of the city. The City Manager oversees the day-to-day operations of the city. The City of Carlsbad also has an elected City Clerk and City Treasurer

Districts

The City Council consists of an elected Mayor and four elected council members. Each serves a four-year term. In 2017, the city switched to a system where City Council members are elected by district instead of at large or citywide. District boundaries were updated following the 2020 Census.

Charter City

There are two types of cities in California: charter and general law. Charter cities follow the laws set forth in the state’s constitution along with their own adopted “charter” document. General law cities follow the laws set forth by the state legislature.

In 2008, City of Carlsbad residents voted to approve the charter city measure, Proposition D, by 82%.

The charter gives the City of Carlsbad more flexibility on such issues as purchasing and contracting, because the process mandated by the state can be expensive and cumbersome, causing project delays. Certain affairs, such as traffic and vehicle regulation, open and public meetings laws, some planning and environmental laws, and eminent domain, remain matters of state authority even as a charter city.

Boards and Commissions

The City Council appoints members to a variety of boards and commissions, which provide opportunities for community engagement and recommendations to the City Council.

Agricultural Conversion Mitigation Fee Committee

Arts Commission

Community-Police Engagement Commission

Environmental Sustainability Commission

Golf Lodging Business Improvement District

Historic Preservation Commission

Housing Commission

Investment Review Board

Library Board of Trustees

Parks & Recreation Commission

Planning Commission

Senior Commission

Tourism Business Improvement District

Traffic Safety & Mobility Commission

DEMOGRAPHICS

Education Median income Homeownership

46% HIGHER Households with a bachelor’s degree or higher compared to San Diego County $139,326 36% Higher than San Diego County Higher than U S 77% 16% 12% Higher than county average Higher than state average 63%

BUSINESS SECTOR

Top Employers

Top Industries

Top Sales Tax Generators*

Apple Stores Ken Grody Dixon Ford

Autonation Chrysler/Dodge/Jeep/Ram Carlsbad Legoland California

Autonation Hyundai Carlsbad Lexus Carlsbad

Autonation Mazda Carlsbad Lowe’s Home Centers

Autonation Subaru Carlsbad

BMW of Carlsbad

Costco Wholesale

Fashionphile

Financial Services Vehicle Trust

Hoehn Honda Certified Used Cars

Omni La Costa Resort & Spa

Park Hyatt Aviara

Premier Cadillac/Buick/GMC of Carlsbad

Premier Chevrolet of Carlsbad

Premier Kia of Carlsbad

Tesla Motors

Hoehn Mercedes Toyota Carlsbad

Invitrogen

Jaguar/Land Rover Carlsbad

Vons Grocery Company

*Alphabetical order

HOW CARLSBAD COMPARES

The table below shows General Fund revenue comparisons with neighboring jurisdictions for fiscal year 2025-26 adopted budgets. Population estimates for 2025 and total General Fund budgets are included for additional context.

2025-26 Revenue Per Capita Comparisons

FISCAL ISSUES & FINANCIAL MANAGEMENT

ECONOMIC AND FISCAL ISSUES FACING THE CITY

At the time of developing the Fiscal Year 2025-26 Proposed Budget, much of the lingering effects of the unprecedented inflationary levels experienced since 2021 have diminished The Federal Reserve’s swift action to combat the rise in inflation by increasing interest rate targets which has stabilized inflationary levels; however, new trade and administrative policies have created new challenges not only for general consumers but for business sectors such as life sciences that depend on federal grant funding. Fiscal year 2024-25 began to experience year-over-year decreases in gross sales tax activities which indicates a drop in consumer confidence as well as the impacts of sustained levels of inflation in recent years. Although inflation has cooled, we have yet to see inflation levels return to more historically normal levels. As the city moves forward, monitoring trade and economic policies from the federal administration will be paramount.

Prior to the pandemic, the city boasted a low unemployment rate of 2.9%. At the height of the pandemic, unemployment spiked to 13.8%. With the pandemic’s economic impacts behind us, unemployment rates have dropped dramatically The March 2025 unemployment rate of 4.1% in Carlsbad represented an increase compared to the prior year’s unemployment rate of 3.5%. The unemployment rate for the County of San Diego was 4.2% in March 2025 and the State of California was 5.3%. Within the city, many employers are citing difficulty in finding and retaining workers. Macroeconomic trends in the tech industry have been pushing unemployment up nationally, but the labor market is still considered to be very tight.

At the end of March 2025, the two-year Treasury yield was 70 basis points lower, and the 10-year Treasury yield was about 11 basis points lower, year-over-year. The inversion between the two-year and 10-year Treasury yield increased about 10 basis points to 0.34 over the previous month-end. The average historical spread since 2003 is about +130 basis points. The yield curve, inverted for a period of over two years, became positive in September 2024 and has slowly increased month over month. The Federal Reserve’s interest rate targets are currently at 4.25%-4.50%, and inflation has decreased but not to desired levels of 2%.

Maintaining good fiscal health must remain a top priority. Meeting this objective preserves the city’s ability to continue providing important programs and services to the community. Past economic challenges and prudent financial planning have provided opportunities for developing solutions to address lost revenues while preserving vital services. The positive effect of inflation on some of the city’s revenue sources have been significant but is considered one-time and something to be very closely monitored moving forward. As inflation is likely to decline in the future, so will revenue growth. Disciplined spending and long-term financial planning remain critical to ensuring the future sustainability of important city programs and services.

Long-Term Financial Planning

Strategic planning begins with determining the city's fiscal capacity based upon long-term financial forecasts of recurring available revenues and future financial obligations. Prior to the adoption of the annual budget, the finance department will prepare a Ten -Year Financial Forecast (Forecast) that evaluates known internal and external issues impacting the city's financial condition. The methodology for preparing the Forecast can be found in the appendices of this document. The Forecast is intended to help the city:

• Attain and maintain financial sustainability,

• Have sufficient long-term information to guide financial decisions,

• Have sufficient resources to provide programs and services for the stakeholders,

• Identify potential risks to on-going operations in the long-term financial planning process and communicate these risks on an annual basis,

• Establish mechanisms to identify early warning indicators, and

• Identify changes in expenditure or revenue structures needed to deliver services or to meet the goals adopted by the City Council.

It is important to stress that the Forecast is not a budget. The Forecast does not dictate expenditure decisions, but rather highlights the need to prioritize the allocation of the city’s limited resources to ensure the continuation of core city services. The purpose of the plan is to provide the City Council, key stakeholders and the public an overview of the city’s fiscal health based on various financial and service level assumptions over the next ten years. It also allows for the discussion of necessary steps to be initiated during the development and implementation of future budgets. The Forecast is intended to look beyond the annual budget cycle and serve as a planning tool to bring a long-term perspective to the budget process. The Forecast also takes into consideration City Council policies that need to be met on an annual basis including General Fund reserve guidelines, pension funding guidelines, etc. Should projected expenditures exceed projected revenues in any given year, the City Manager will need to identify steps to mitigate the shortfalls prior to presenting a balanced budget to the City Council for consideration during the annual budget development process.

It should be noted that the Forecast is a snapshot in time and will change as additional information is made available and incorporated into the fiscal projections. Inflation and the uncertainty associated with the economy has increased the volatility of projecting future revenues.

The city prepares a long-term financial model for both capital and operating needs. It is imperative that the city plan for the impacts of development, the construction and operation of new public facilities, and planning resources needed to build them. Th e city prepares a ten-year operating forecast for the General Fund, a five-year Strategic Digital Transformation Investment Program, and a fifteen-year Capital Improvement Program. As part of the new Strategic Digital Transformation Investment Program and the Capital Improvement Program, the city annually calculates the amounts needed to pay for the projects and anticipated operating budget impacts. In this way, the city can anticipate the effects of development from both a capital and an operating perspective.

One important initiative the city has undertaken to ensure its financial health is the development of an Infrastructure Replacement Fund. With this fund, the city sets aside a portion of General Fund revenues on an annual basis for major maintenance and replacement of its infrastructure. Much of the city’s infrastructure is relatively new; thus, the city is just now experiencing the impact of

maintenance requirements. By setting aside funds now, the city’s residents can be assured that the proper maintenance and replacement will be performed, as needed, on streets, parks and many facilities for which the city is responsible.

Employee retirement costs continue to require ongoing prudent fiscal management. The City Council issued a pension funding policy to codify its commitment to ensure that resources will be available to fulfill the city’s contractual retirement promises to its employees, and to minimize the chance that the funding of these benefits will interfere with providing essential services to the community. The policy outlines a funding discipline to ensure that adequate resources will be accumulated in a systematic and disciplined manner to fund the long-term cost of benefits to the plan participants and annuitants. Overall funding levels of the city’s plans are reviewed annually to ensure the city’s funding level remains at least 80% – the city’s minimum targeted level. While this enhances the city’s funding position, risks remain in the system. Required employer contributions will continue to increase over the next few years and actual contribution increases could exceed expectations if future investment return rates or other factors are unfavorable.

Revenue and expenditure growth projections

The city’s Forecast considers the annual growth of all currently known elements of city revenues and expenditures. Projecting revenues is particularly difficult when considering rising inflation and impacts to consumer demand. When forecasting expenditures, some of the major factors considered are rising healthcare and workers’ compensation costs, underperforming pension programs, and general inflation in both personnel and operating expenditures. Currently, the city projects expenditure growth will outpace revenue growth in the near future. To support the increase in ongoing costs, the city will need to consider alternative options, such as ways to increase economic activity that will drive sustainable increases in the city’s current revenue base, an expansion of the city’s revenue base, or a reduction of the city’s current service offerings and associated costs.

FINANCIAL MANAGEMENT POLICIES

Revenue Policies

The development and maintenance of balanced and reliable revenue streams will be the primary revenue objective of the city. Efforts will be directed to optimize existing revenue sources while periodically reviewing potential new revenue sources. One method to maximize existing revenue sources is to promote a healthy business climate. Revenue estimates will be prepared on an annual basis during the preparation of the budget and major revenue categories will be projected on a tenyear basis. Revenues will be estimated conservatively using accepted standards and estimates provided by the state and other governmental agencies. Alternative revenue sources will be periodically evaluated to determine their applicability to meet identified city needs. Sources of revenue will be evaluated and modified as necessary to assure a diversified and growing revenue base that improves the city’s ability to handle fluctuations in individual revenue sources.

Revenues from “one-time” or limited duration revenue sources will not be used for ongoing operating expenses. Fees and charges for services will be evaluated and, if necessary, adjusted annually to ensure that they generate sufficient revenues to meet service delivery costs. The city will establish user charges at a level generally related to the full cost (operating, direct, indirect and

capital costs) of providing the service, unless the City Council determines that a subsidy from the General Fund is in the public interest, in accordance with City Council Policy 95, Cost Recovery Policy for Fees and Charges for Services. The city will also consider market rates and charges levied by other municipalities of similar size for like services in establishing rates, fees and charges. Enterprise and internal service funds will aim to be self-supporting.

Expenditure and Budget Policies

Major expenditure categories will be projected on a ten-year basis. The city will operate on a current funding basis. Expenditures will be budgeted and controlled so as not to exceed current revenues plus the planned use of any accumulated fund balances. Annual budgeted operating expenditures shall not exceed annual operating revenues, including budgeted use of reserves, unless directed by the City Council.

The City Manager shall prepare and submit to the City Council annually a proposed operating, strategic digital transformation investment program and capital improvement program budget and the budgets will be adopted by June 30 of each year. Budget status reports are prepared quarterly and posted on the city’s website. Because the budget is based on estimates, from time to time, it is necessary to make adjustments to finetune the line items within it. Various levels of administrative control are utilized to maintain the budget’s integrity. Program managers are accountable for the line-item level of control of their individual program budgets. Department heads are accountable for the fund level of control for funds within their departments. The City Manager is accountable for the fund level of control across departments, up to $100,000. The Finance Department oversees the general level of accountability related to budgetary integrity through systematic checks and balances and various internal controls.

City Council Policy 87, General Fund Surplus Policy outlines the use of surplus funds resulting from unrestricted General Fund actual revenues exceeding total actual expenditures, encumbrances, and commitments for a given fiscal year. It is the intent of the city to use all surplus funds generated to meet reserve policies, and the reduction or avoidance of long term liabilities. The city will not use year-end surplus funds to fund ongoing operations unless otherwise approved by the City Council.

The city will use surplus funds to replenish any General Fund deficiencies, up to the minimum level as set forth in City Council Policy 74, General Fund Reserve Policy and then any pension liability deficiencies, as defined in City Council Policy 86, Pension Funding Policy.

The City Manager is authorized to approve the carryforward of any unencumbered and unspent budget for a particular item equal to or less than $100,000 into the following fiscal year. These items will be one-time expenditures and not for ongoing services, programs or personnel. Any remaining surplus funds in excess of reserve and pension liability deficiencies and items equal to or greater than $100,000 will be brought forward for City Council approval.

The city adheres to long-range financial planning, which forecasts revenues and expenditures over a long-term period, using assumptions about economic conditions, future spending scenarios and other salient variables. Financial planning allows the city to execute overall strategies to support the process of aligning financial capacity with long-term service objectives. Financial forecasts are updated at least once a year, or more often if unexpected changes in economic conditions or other unforeseen circumstances exist. Any significant changes will be reported to the City Manager and the

City Council. Otherwise, these financial forecasts will be used as a tool during the development of the annual budget process and to set utility rates as needed.

Reserve Policies

The city formally mandates the levels at which reserves shall be maintained for the General Fund and utilities funds and informally sets minimum target levels for the internal service funds.

City Council Policy 74, General Fund Reserve Policy was most recently updated and approved by the City Council in June 2019. The purpose of the policy is to establish a target minimum level of designated reserves in the General Fund to:

• Reduce the risk of financial impacts resulting from a natural disaster or other catastrophic events;

• Respond to the challenges of a changing economic environment, including prolonged downturns in the local, state or national economy; and

• Demonstrate continued prudent fiscal management and creditworthiness.

The city commits to maintaining General Fund reserves (the term reserve refers to any unassigned fund balance) at a target of 40% of General Fund annual operating expenditures. The total reserve level will be calculated using the prior year’s adopted General Fund budgeted expenditures.

At the discretion of the City Council, reserve levels in excess of the 40% target requirement may be used for one-time opportunity cost purposes. Reserve funds will not be spent for any function other than the specific direction in the annual budget or by a separate City Council action.

As a general budget principle concerning the use of reserves, the City Council decides whether to appropriate funds from reserves. Reserve funds will not be spent for any function other than the specific purpose of the reserve account from which they are drawn without specific direction in the annual budget or by a separate City Council action.

The City Council approved City Council Policy 96, Utilities Reserve Policy in March 2023 to establish guidelines to ensure the fiscal stability of the potable water, recycled water and wastewater funds and provide guidance to staff in the management of each utility’s finances. These funds will target a reserve funding level of 100% of annual debt service costs, 120 days of operating costs, and 1% of system replacement value in emergency capital. The Wastewater Fund will target a reserve funding level of 50% of the five-year rolling average of annual spending on capital improvement projects while the Potable and Recycled Water funds will target 100% of this average. Also, the Wastewater Fund will target a reserve of 10% of rate revenues while the Potable and Recycled Water funds will target a reserve of 20% of rate revenues to provide a source of funds to smooth rates or avoid rate increases in the event of short- or mid-term disruption to revenues such as drought-related demand reductions. The city or the Carlsbad Municipal Water District’s potable water, recycled water and wastewater utilities will treat minimum reserve levels as practical reserve floors and allow reserves to increase or decrease as necessary within the minimum and target levels prescribed above.

The city’s Workers’ Compensation and Risk Management (General Liability) funds will maintain minimum reserves equal to the estimated outstanding claims as calculated by a third-party administrator. Additional reserve amounts may be set aside as deemed appropriate based on thirdparty actuarial studies completed at two-year intervals. During the annual budget process, the target

confidence level will be compared with the projected fund balance of each fund, and if the projected fund balance is greater than or lesser than the target, a plan to adjust the fund balance will be considered, using either or both increasing revenues through interdepartmental charges and onetime cash contributions from those funds contributing to the shortfall.

The Information Technology Asset Replacement and Vehicle Asset Replacement funds shall maintain minimum reserve levels defined as the amount of accumulated depreciation of capitalized assets based on the original cost of each capitalized asset and up to a maximum reserve level defined as the accumulated depreciation based on the estimated replacement cost of each capitalized asset.

Investment Policy

The city has established a formal Investment Policy. It is the policy of the City of Carlsbad to invest public funds not required for immediate day-to-day operations in safe, liquid and medium-term investments that shall yield an acceptable return while conforming to all California statutes. It is intended that the policy cover the investment activities of all contingency reserves and inactive cash under the direct authority of the city. Investments of the city and its component units will be made on a pooled basis; however, investments of bond proceeds will be held separately if required

Pension Funding Policy

The city’s City Council Policy 86, Pension Funding Policy embodies funding and accounting principles to ensure that resources will be available to fulfill the city’s contractual promises to its employees. The policy objectives include using actuarially determined contributions, or ADC, provided by CalPERS to fund the full amount of the ADC each year, maintaining no less than a combined minimum 80% funded ratio, and demonstrating accountability and transparency by communicating all information necessary for assessing the city’s progress toward meeting its pension funding objectives.

In the event the city is unable to meet the minimum combined pension funded ratio of 80% with current resources (i.e., without borrowing or using reserves), the Finance Director will identify a reasonable period to return to a minimum 80% funded ratio status.

In an effort to mitigate pension rate volatility, manage the city’s funded status and enhance local control of city funds, the city established a Section 115 Pension Trust. The city’s Section 115 Pension Trust is a tax-exempt investment tool that allows local governments to pre-fund pension and retiree health costs. Once contributions are placed into the trust, assets from the trust can only be used for retirement plan purposes. Withdrawals may be made to either reimburse the city for retirement system contributions or to directly pay CalPERS. Benefits of the trust include (1) local control over assets, (2) pension rate stabilization, (3) potential for higher investment return than General Fund, and (4) diversification from CalPERS’ investments. Contributions from the General Fund are invested in accordance with City Council Policy 98, Pension Trust Investment Policy. In an effort to maintain a combined funded status of 80% and to fund the costs associated with a potential reduction in CalPERS’ discount rate, the trust is scheduled to receive a total of $40 million in principal contributions over five fiscal years, and assuming an annual rate of return of 6.25%, the trust is projected to accumulate sufficient assets to fund a potential discount rate reduction from the current 6.8% to 6.25%.

Long Term General Fund Capital Funding Policy

The city’s City Council Policy 91, Long Term General Fund Capital Funding Policy ensures the needs of the city are met and demonstrates continued prudent fiscal management by providing a funding source for long-term, large value capital purchases. Many city assets demand large capital expenditures, examples include roads, building, parks and information technology infrastructure. The city funds the General Fund portion of these necessary investments by adopting an annual budget that includes a transfer from the General Fund to one or more of the city’s long-term capital funds. These long-term capital funds include the General Capital Construction Fund, the Infrastructure Replacement Fund and the Technology Investment Capital Fund. The city commits to targeting a transfer to the city’s long-term capital funds of 6% of budgeted General Fund revenues. The transfers are proposed during the annual budget process or on an as needed basis for the City Council’s consideration.

Full versions of these policies and other City Council policies are available on the city’s website at www.carlsbadca.gov/city-hall/laws-policies/council-policies.

APPROPRIATION LIMIT

The appropriations limitation imposed by the state, otherwise known as the Gann limit, creates a restriction on the amount of revenue that can be appropriated in any fiscal year. The basis for calculating the limit began in fiscal year 1978-79 and is increased based on population growth and inflation. The appropriation limit applies only to those revenues defined as proceeds of taxes.

• Population growth of Carlsbad, OR

• Population growth within San Diego County, AND

• Growth in California per capita income, OR

• Growth in non-residential assessed valuation due to new construction in the city.

The factors used to calculate the fiscal year 2025-26 limit were:

• Population growth within San Diego County AND

• Growth in California per capita income.

The formula is outlined below:

year 2024-25 expenditure limit $630,004,237

Fiscal year 2025-26 limit (2024-25 limit x factor)

$673,537,530

Current appropriation of proceeds of taxes (Subject to the limit) $204,034,005

Appropriations Limit by Fiscal Year

Gann Appropriation Limit

Appropriations Subject to Limit

The City of Carlsbad’s appropriation limit is currently over three times its annual appropriations. With such a large margin, it is unlikely that the city will reach the appropriation limit in the foreseeable future.

DEBT MANAGEMENT

The City of Carlsbad has a AAA credit rating and is widely acknowledged for its financial stability and responsible management of resources. The use of debt has always been a primary issue in the development of the Capital Improvement Program and the policies put in place to implement the city’s Growth Management Program. Over the years, the city has issued millions of dollars of bonds and Certificates of Participation to fund streets, buildings, sewer and water facilities, open space acquisitions, and other infrastructure projects. The city is continually evaluating its outstanding debt as well as potential future issues to ensure that interest costs are kept at a minimum and the use of the bond funds is appropriate.

The Government Code of the State of California has established maximum general obligation debt limits for local governments within the state. The city’s outstanding general obligation debt should not exceed 15% (as adjusted by 25% per the law) of total assessed property value. As of June 30, 2025, the city’s calculated debt limit for general obligation debt was $1.7 billion.

The city currently has approximately $41.4 million debt outstanding as of June 30, 2025. Of that $41.4 million, $12.5 million is water construction loans and the remainder is debt of financing districts. Outstanding debt obligations of financing districts (special districts and/or assessment districts) within the city do not obligate the City of Carlsbad and are not paid from the city’s General Fund.

1. The final principal payment for the 2005 Construction loan was paid in fiscal year 2024-25.

2 The 2023 construction loan reflects total draws through fiscal year 2024–25 from the original loan amount of $4,601,000 Repayment is estimated to begin in fiscal year 2026–27

BASIS OF BUDGETING

The city budgets on a modified accrual basis for all funds except for its enterprise and internal service funds, which are budgeted on a full accrual basis. This is consistent with the city’s basis of accounting as reported in its Annual Comprehensive Financial Report.

The city's Governmental fund budgets consist of:

• The General Fund

• Special revenue funds

• Capital project funds

To summarize, under this basis, revenues are estimated for the fiscal year if they are susceptible to accrual, e.g., amounts can be determined and will be collected within the current period. Principal and interest on general long-term debt are budgeted as expenditures when due, whereas other expenditures are budgeted for liabilities expected to be incurred during the current period or shortly thereafter to pay current liabilities.

Proprietary fund budgets are adopted using the full accrual basis of accounting whereby revenue projections are developed recognizing revenues expected to be earned in the period, and expenditure estimates are developed for all expenses anticipated to be incurred during the fiscal year. The city's proprietary fund types consist of enterprise and internal service funds because the city has municipally owned utilities or other enterprise activities.

Fiduciary funds are used if the city has a fiduciary or custodial responsibility for assets. The city currently budgets for one fiduciary fund, the Successor Agency to the former Carlsbad Redevelopment Agency.

The legal level of Budgetary Control is the fund level and expenditures should not exceed budgeted amounts at the fund level. Budgetary control is maintained through the city’s accounting system, as well as through monthly reporting on all revenue and expenditure accounts and other special reports summarizing the financial position of the city. The City Council adopts the formal budget for all funds prior to the beginning of each fiscal year and may amend the budget as necessary by City Council action throughout the year. All unencumbered, unspent appropriations expire at yearend unless specifically carried into the new fiscal year in accordance with City Council Policy 87, General Fund Surplus Policy.

Internal Controls exist within the accounting system to ensure safety of assets from misappropriation or unauthorized use or disposition and to maintain the accuracy of financial record keeping. These internal controls must be established consistent with the sound management practices based on the cost and benefit of the controls imposed. The cost of a control should not be excessive in relation to its benefit as viewed by city management. The internal controls in existence within the city’s system are sufficient to ensure, in all material aspects, both the safety of the city’s assets and the accuracy of the financial record keeping system.

Controls on the use and transfers of budget funds are outlined in the adopted budget resolution in the appendices of this document.

BUDGETARY FUND STRUCTURE

The budget of the city is organized based on funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for by providing a separate set of selfbalancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures.

Detailed descriptions of each fund and a department/fund budget relationship matrix can be found in the appendices of this document. The various funds are grouped as follows:

GOVERNMENTAL FUNDS

General Fund

Special Revenue Funds

• Affordable Housing

• Agricultural Mitigation Fee

• Buena Vista Channel Maintenance District

• Citizens’ Option for Public Safety (COPS)

• Community Activity Grants

• Community Development Block Grant

• Continuum of Care

• Cultural Arts Donations

• Encampment Resolution Fund

• Habitat Mitigation Fee

• Library and Arts Endowments

• Library Gifts and Bequests

• Lighting and Landscaping District 2

• Local Cable Infrastructure

• Median Maintenance District

• Opioid Settlement Fund

• Parking in-Lieu Fees

• Permanent Local Housing Allocation

• Police Asset Forfeiture

• Public Safety Grants

• Recreation Donations

• Rental Assistance/Section 8 Program

• Senior Program Donations

• Street Lighting Maintenance District

• Street Tree Maintenance District

• Tyler Court Apartments

Capital Project Funds

• College Boulevard – Reach A

• Community Facilities District 1

• Gas Tax

• Gas Tax-Road Maintenance and Rehabilitation

• General Capital Construction (GCC)

• Grants-Federal

• Grants-State

• Infrastructure Replacement (IRF)

• Park in-Lieu Fees (PIL)

• Planned Local Drainage Area Fees (PLD)

• Public Facilities Fees (PFF)

• Technology Investment Capital

• Transportation Development Act (TDA)

• Traffic Impact Fees (TIF)

• TransNet

PROPRIETARY FUNDS

Internal Service Funds

• Workers’ Compensation

• Risk Management

• Vehicle Maintenance

• Vehicle Replacement

• Information Technology Operations

• Information Technology Replacement

Enterprise Funds

• Potable Water Operations

• Potable Water Connection

• Potable Water Replacement

• Recycled Water Operations

• Recycled Water Connection

• Recycled Water Replacement

• Wastewater Operations

• Wastewater Connection

• Wastewater Replacement

• Solid Waste Management

• Storm Water Protection

• Watershed Protection

• The Crossings Golf Course

FIDUCIARY FUND

Private Purpose Trust Fund

• Successor Agency to the Redevelopment Agency

The California Society of Municipal Finance Officers, or CSMFO, recognizes those entities with highly professional budget documents with two levels of certificates. The first level is the “Meritorious Budget Award,” which requires the entity to meet a very specific list of criteria defined by CSMFO. The second level is the “Operating Budget Excellence Award,” which requires that the organization meet even higher criteria which effectively enhances the usability of the document.

In preparing the budget for fiscal year 2025-26, the city has once again followed CSMFO’s award criteria. This budget document will be submitted to CSMFO for the fiscal year 2025-26 budget award program.

Government Finance Officers Association of the United States and Canada, or GFOA, presented a Distinguished Budget Presentation Award to City of Carlsbad, California, for its Annual Budget for the fiscal year beginning July 1, 2024. To receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as a financial plan, as an operations guide and as a communications device.

This award is valid for a period of one year only. In preparing the budget for fiscal year 2025-26, the city has once again followed GFOA’s award criteria. This budget document will be submitted to GFOA for the fiscal year 2025-26 budget award program.

OVERVIEW

This section includes a summary of the revenues and expenditures included in the fiscal year 2025-26 operating budget. Spending is presented by funding source, department and type, such as personnel or maintenance and operations. For context, previous years’ spending levels are often presented alongside this information. Financial tables are presented to the nearest hundred thousand; rounding differences may exist.

Detailed summaries of department services and expenditures are included within the five main sections of the operating budget following this overview. The five city branches include:

• Public Safety

• Public Works

• Community Services

• Administrative Services

• Policy & Leadership

Information about the city’s approach to planning for and funding digital transformation efforts throughout the city is included in the Strategic Digital Transformation Investment Program section.

Information about capital projects, such as construction of roads and pipelines, the development of parks and construction and maintenance of city facilities, is included in the Capital Improvement Program section.

REVENUE

The Operating Budget for fiscal year 2025-26 totals $458.6 million, with revenues for the year estimated at $441.1 million. General Fund revenues are estimated at $243.3 million and General Fund budgeted expenditures are $242.4 million, which includes an additional $5.6 million in one-time transfers to the General Capital Construction Fund and Infrastructure Replacement Fund and $2.0 million to the Storm Water Fund Excluding the one-time uses of General Fund surplus, the General Fund budgeted operating expenditures are $234.8 million.

Revenue estimates for the Operating Budget indicate the city will receive a total of $441.1 million in fiscal year 2025-26, a change of 1.1% or $4.9 million above the estimated fiscal year 2024-25 revenues. General Fund revenues are expected to increase by $4.3 million or 1.8% compared to the prior year’s adopted revenues and $2.7 million or 1.1% compared to fiscal year 2024-25 estimates. Special Revenue funds are projected to decrease by 28.8% or $10.1 million over fiscal year 2024-25 estimates driven by one-time Encampment Resolution funding received in fiscal year 2024-25 Enterprise Fund revenues are projected to increase by 17% or $18.1 million in the upcoming fiscal year. Internal Service Fund revenues are decreasing over the prior year’s adopted budget and to fiscal year 2024-25 estimates. This is primarily driven by one-time transfers in from the General Fund to fund Workers’ Compensation in fiscal year 2024-25. The Successor Agency Housing Trust is no longer receiving any material revenue as the loan owed to the General Fund has now been fully repaid More detailed information on the city’s revenue sources is provided in the following discussion.

The following table shows the total operating revenues anticipated to be received by the city for fiscal year 2024-25, as well as those budgeted for fiscal year 2025-26

General Fund

General Fund revenues provide a representative picture of the local economy. These revenues are of particular interest as they fund basic city services such as Police, Fire, Library & Cultural Arts, Street and Park Maintenance and Recreation programs. The table below provides a summarized outlook of the General Fund revenues.

GENERAL FUND REVENUES (In Millions)

Sustained by pent-up demand following the COVID-19 pandemic and accumulated savings, the inflationary spike between March of 2021 and November of 2023 served as a boost for the city’s revenue sources like sales tax and transient occupancy tax. While these revenue sources sustained strong performance in fiscal year 2023-24, we began seeing customer demand decline in response to the sustained inflationary levels and diminishing levels of personal savings, despite the Federal Reserve’s attempt to slow inflation by increasing rates as high as 5.25% - 5.50%. This trend continued throughout fiscal year 2024-25 and was only exacerbated by the new federal administration’s policy changes, notably the implementation of tariffs on foreign goods. Recent trade policy changes including fluctuating tariff levels on imports from China, Canada, and Mexico have affected input costs and supply chains across the United States, with potential downstream impacts on Carlsbad’s manufacturing and clean tech sectors. Nationally, GDP contracted by 0.3% in the first quarter of 2025, largely due to import surges ahead of tariff implementation. In addition, proposed reductions to federal research grants and travel restrictions for federal agency staff could disproportionately impact Carlsbad’s life sciences and healthcare industries, which rely heavily on federal funding and collaboration.

There is still much uncertainty surrounding tariffs and their macro- and micro -economic impacts on the nation; however, even in recent months, there has been extreme market volatility and further consumer demand pullback with the risk of recession greatly looming.

Nearly 80% of General Fund revenues are derived from three sources: property tax, sales tax, and transient occupancy tax, or TOT. Sales tax and TOT revenues tend to be much more sensitive to changes in economic conditions, unlike property tax revenues, which remain relatively stable because of the mitigating effect of Proposition 13, which limits annual growth in assessed values.

Property tax, the largest source of General Fund revenues, is expected to grow by $3.2 million, or 3.3%, over the previous year’s estimates Despite the extended rise and recent reduction in interest

rates from the Federal Reserve, Carlsbad’s residential real estate market has seen positive year-overyear growth, increasing by 4.3% to a $1.54 million median price as of March 2025 The new federal administration’s implementation of tariffs has intensified uncertainty in the markets. Future growth is expected to remain relatively flat although strong and continued demand for relatively limited supply may stabilize any adverse factors. Commercial property assessed values are expected to remain relatively flat given current interest rates coupled with the tariff implementation In response to the unprecedented inflationary increases experienced over the last three years, the Federal Reserve’s interest rate hikes have made purchasing a home more difficult for borrowers. Inflation has cooled off and the Federal Reserve has begun reducing target rates; however, with the implementation of tariffs, it is not yet known which direction interest rates and home values will trend throughout the upcoming fiscal year. Proposition 8 allows owners to have their property temporarily revalued if market value is lower than the factored base year value, posing a risk that commercial property values could temporarily decrease.

Assessed values on the residential real estate side are expected to grow modestly, capped by California’s Proposition 13. Adopted in 1978, Proposition 13 limits the annual increase in assessed values for property. Under this proposition, assessed values (and the related property tax) can grow by no more than 2% per year. The value upon which the tax is based is only increased to the full market value upon the sale of a property. In recent years, residential activity has been driven by low interest rates on mortgages, pent-up demand that built during the shutdown and an increase in the ability to work remotely. Now, increased rates, tariff implementation, and market uncertainty will likely have adverse impacts compared to prior periods.

Property and Sales Tax Revenues

Changes in property tax revenues lag behind changes in the housing market, as the tax revenue for the upcoming fiscal year is based on assessed values from the previous January. Thus, the taxes to be received for fiscal year 2025-26 are based on assessed values as of January 1, 2025

Property taxes tend to grow slowly unless there is a significant amount of development-related activity. In past decades the city has seen robust growth in property tax revenue due to new development, high turnover of existing homes and double-digit growth in housing prices. However, as opportunities for new development and growth lessen, development-related revenues have slowed.

In addition to current interest rates levels and the implementation of tariffs, slower development combined with minimal commercial property transactions creates more uncertainty regarding future growth.

Sales Tax by Category Third Quarter 2024

State & County Pools, 19%

Restaurants & Hotels, 14%

General Consumer Goods, 17%

Fuel & Service Stations, 3%

Autos & Transportation, 32%

Building & Construction, 2%

Business & Industry, 11%

Food & Drugs, 2%

Sales Tax revenues generally move in step with economic conditions but overall, Carlsbad’s economy has absorbed the inflationary increases experienced since 2021. With the pandemic and its fiscal impacts behind us, new uncertainty stems from the new federal administration and the implementation of tariffs. Consumer demand has been diminishing as a result of the sustained levels of inflation; however, as inflation continues to cool off, impacts from tariffs are not yet quantifiable.

The onset of the pandemic in March 2020 resulted in swift reductions in sales tax revenues. During fiscal year 2020-21, sales tax levels generally correlated with shelter-in-place mandates. As restrictions were lifted, the city’s sales tax levels recovered. While the city ended fiscal year 2019-20 with $38 million in sales tax revenues, that figure increased in 2020-21 to $44 million in sales tax revenues. Fiscal year 2021-22 experienced the most accelerated recovery, ending the year at a historic high of $51.2 million in sales tax revenues. The fiscal year 2022-23 and 2023-24 sales tax estimates reflected uncertainty surrounding market and economic conditions like inflation and impacts to disposable income. Despite the levels of inflation, growth has been positive over this period; however, fiscal year 2024-25 indicated a slowdown in consumer demand as a result of the sustained levels of inflation and the uncertainty regarding tariffs. Although we are seeing an overall increase in sales tax revenues year over year, taxable receipts have declined by approximately 5% compared to the previous year after factoring for one-time adjustments. As a result, staff have proposed a conservative estimate of $57.8 million in budgeted revenue for fiscal year 2025-26 which represents a decrease of $1.5 million, or 2.6%, over fiscal year 2024-25 estimates.

As indicated in the chart on the previous page, the city’s sales tax base is heavily weighted in the transportation (comprised heavily of new auto sales) and general retail sectors, which combined account for over half of the taxable sales in Carlsbad. New auto sales are highly elastic or responsive to changes in price in comparison to economic trends, and tax revenues from new auto sales fell precipitously during the recession, from $6.7 million in 2007 to $4.4 million in 2009. Since that dip, auto sales tax revenues have grown steadily, reaching a high of $19.8 million for the four quarters ended June 30, 2024 Much of the positive performance in fiscal year 2023-24 was due to a correction of an error made by one particular auto dealer in how they were reporting and remitting their taxable receipts. Projections in fiscal year 2024-25 are estimated at $18.6 million, representing a $1.2 million or 6% decline, indicating a reduction in consumer demand resulting from sustained inflationary levels coupled with uncertainty surrounding the implementation and impacts of tariffs. Similar trends are expected across multiple industry groups including business and industry, fuel and service stations, and general consumer goods.

Sales tax revenues include those received under Proposition 72, a 0.5 cent increase in California sales tax for the funding of local public safety services.

Transient Occupancy Taxes

The third highest General Fund revenue source is Transient Occupancy Tax, also known as TOT or hotel tax. TOT was the revenue category most adversely impacted by COVID-19. From historic highs of $26 million in fiscal year 2018-19, the city experienced year-over-year decreases of 27% and 16%. Recovery from the pandemic was estimated conservatively; however, fiscal year 2021-22 TOT revenues proved otherwise, reaching a historic high of $32.4 million driven by the easing of restrictions, pent-up demand and an increase in average daily room rates. This trend continued in fiscal year 2022-23, whereby actual revenues exceeded conservative estimates that were applied to account for sustained levels of unprecedented inflation. Although fiscal year 2023-24 reported an overall revenue slowdown, likely driven by sustained inflationary levels, fiscal year 2024-25 is projected to result in a $1.0 million or 3.0% increase year over year. Although there is much economic uncertainty, mainly around tariffs, it is not anticipated TOT will experience as much adverse impact as

other revenue sources like sales tax. The fiscal year 2025-26 budget estimates TOT to increase by $1.0 million or 3.0% compared to the previous year.

Franchise Tax revenue has experienced volatility in recent years and is projected at $7.2 million in fiscal year 2025-26. Franchise taxes are paid by certain industries that use the city’s right-of-way to conduct their business. The city currently has franchise agreements for cable TV service, solid waste services, cell sites, fiber optic antenna systems and gas and electric services. The solid waste franchise fee has experienced minor revenue increases that mirror growth in population and changes in rate structures. Cable TV franchise revenue is expected to slightly decrease from $1.26 million in fiscal year 2024-25 to $1.2 million in fiscal year 2025-26. This revenue source will most likely remain stable or decline in future years as more subscribers cut cable services and move to online streaming services.

In April 2021, a new franchise agreement for solid waste was approved with Republic Services of San Diego. The city receives 7.5% of revenue collected as well as an annual payment of $0.9 million in support of AB 939 and a $1.4 million storm water fee. Fiscal year 2024-25 solid waste franchise tax revenue is projected to end the year with $2.47 million and fiscal year 2025-26 is projected to slightly increase to $2.53 million.

San Diego Gas & Electric pays franchise taxes for the use of the public land over which they transport gas and electricity. The city also receives an “in-lieu” franchise tax based on the value of gas and electricity transported on SDG&E lines but purchased from another source. The “in-lieu” tax captures the franchise taxes on gas and electricity that is transported using public lands, which would not otherwise be included in the calculations for franchise taxes due to deregulation of the power industry. Fiscal years 2022-23 and 2023-24 experienced strong increases as a result of increased rates on both the gas and electric sides; however, fiscal year 2024-25 experienced rate declines of approximately 20%. As a result, SDG&E franchise tax revenues decreased from $4.5 million in fiscal year 2023-24 to $3.3 million in fiscal year 2024-25. Based on preliminary projections from SDG&E, fiscal year 2025-26 is expected to remain relatively flat compared to the previous year.

Business license taxes are closely tied to the health of the local economy and are projected to increase to $6.8 million in fiscal year 2025-26. This represents growth of $0.2 million or 3% when compared to last year’s current estimates Increases in business license taxes tend to correlate with sales tax revenue increases as businesses either pay taxes based on the amount of their gross receipts or based on set fees. There are currently about 10,043 licensed businesses in the City of Carlsbad, 592 more than in the prior year with 6,744 of them located in the city

Development-related revenues are derived from fees for planning, engineering and building permits, and fees paid by developers to cover the cost of reviewing and monitoring development activities, such as plan checks and inspections. These revenues are difficult to predict as many of the planning and engineering activities occur months or years before any actual development.

Over the last 10 years development-related revenues have fluctuated in line with increases and decreases in residential, commercial and industrial development. In fiscal year 2025-26 the city expects a 4.2% increase in development related revenues to approximately $4.8 million. This follows a 16% increase between fiscal year 2023-24 and 2024-25 The projected increase in development -related revenues is tied to the volume and type of development projected to be permitted, multi-family versus single-family, and the revenues derived from building fees which occur in the early stages of development. Increases applied to these charges for services are made in accordance with City Council Policy 95, Cost Recovery.

The All other revenue category comprises all other sources of revenue in the General Fund other than those mentioned above and are projected to decrease by $0.5 million in fiscal year 2025-26 representing a 1.7% change from fiscal year 2024-25 estimates. The main revenue sources contributing to this category are described in more detail below.

Interdepartmental charges are generated through engineering services charged to capital projects, reimbursed work from other funds and miscellaneous interdepartmental expenses charged to funds outside the General Fund for services performed by departments within the General Fund. General Fund miscellaneous interdepartmental charges are expected to increase by 2.5% compared to the prior year’s adopted budget, based on the inflationary index applied to the chargeback in offcycle years in which an updated cost allocation plan is not completed.

Income from investments and property include interest earnings as well as rental income from city-owned land and facilities. The city is expected to earn about $4.1 million in interest on its General Fund investments for fiscal year 2025-26 and another $3.0 million in rental and lease income and $1.5 million on its Section 115 Pension Trust. The yield on the city’s portfolio is forecasted to average 3.2% and cash balances are expected to decline citywide as two significant capital projects begin their respective construction phase.

Ambulance fee revenues are estimated to decrease $0.4 million over last year’s estimates, from $7.2 million to $6.8 million Ambulance fees have increased in recent years due to the Fire Department’s fee study implementation, the addition of two medical transports, the Ground Emergency Medical Transportation Certified Public Expenditure Program, which helps cover uncompensated costs for Medi-Cal fee-for-service transports, and the participation in the Public Provider Ground Emergency Medical Transport Intergovernmental Transfer Program which will provide add-on reimbursement payments to help cover uncompensated costs in the future. The decrease in year-over-year estimates is driven by the impact of Assembly Bill 716, which became effective January 2024 and has resulted in significant impacts on the reduction of ambulance fees

Transfer taxes are those taxes paid to the county upon the transfer of interests in real estate. The tax is $1.10 per $1,000 of property value, split equally between the county and the city. Carlsbad expects to receive approximately $1.7 million in transfer taxes for fiscal year 2025-26 which is a 2.9% increase from fiscal year 2024-25 estimates. The residential real estate market continues to remain strong as the median home value increased over 4% to $1.54 million since fiscal year 2023-24; however, this will likely be influenced by the Federal Reserve and whether they decide to further reduce interest rates

Other intergovernmental revenues include miscellaneous receipts received from the state or federal governments as well as local school districts. With the city receiving its two annual American Rescue Plan Act payments in fiscal 2020-21 and fiscal year 2021-22 totaling $12.6 million, intergovernmental revenues decreased substantially in fiscal year 2022-23 and are expected to drop to $857,000 in fiscal year 2025-26 as a result of receiving approximately $931,000 in one-time FEMA reimbursement funding for COVID-19 related expenditures in fiscal year 2024-25.

The Other revenue sources category includes miscellaneous reimbursed expenses, sponsorships, donations, loss recovery and other charges and fees. The estimate for fiscal year 2024-25 totals $0.5 million and is expected at $0.3 million in fiscal year 2025-26

General Fund Revenues

Overall, and as reflected in the bar chart above, General Fund revenues are expected to increase $2.7 million or 1.1% from fiscal year 2024-25 estimates The General Fund’s primary tax revenues are estimated to increase conservatively over last year’s estimates to account for the current economic uncertainty and risk of recession. Despite uncertainty surrounding tariffs and the impacts to inflation and interest rates, the General Fund’s total revenues are expected to be supported by stable property tax values, a diversified sales tax base, and the implementation of the city’s cost recovery policy which increases fees for services in line with appropriate cost recovery levels.

Other Funds

Revenues from Special Revenue funds are expected to total $25.0 million, a decrease of $10.1 million or 28.8% from fiscal year 2024-25 estimates Funds collected in this category are restricted to specified purposes. The types of programs supported within Special Revenue funds are those funded by specific revenue streams such as:

• Federal Grants (Rental Assistance and Community Development Block Grants)

• Special fees and assessments (Affordable Housing and maintenance assessment districts)

• Donations (Library, Cultural Arts, Recreation and Senior Donations)

Special Revenue Funds

FY 2025-26 Budgeted Revenues $25.0 Million

Tyler Court Apartments

$0.8M, 3%

Permanent Local Housing Allocation

$0.5M, 2%

Donations and Grants

$0.5M, 2%

Maintenance Districts

$4.5M, 18%

CDBG

$0.6M, 2%

Public Safety Grants

$0.6M, 2%

All others

$2.1M, 3%

Rental Assistance $15.0M, 60%

Affordable Housing

$0.6M, 3%

Compared to the fiscal year 2024-25 budget estimates, the most noteworthy changes in the Special Revenue funds occurred in the Encampment Resolution Fund, whereby the city is expected to receive $9.4 million of one-time state grant revenue in fiscal year 2024-25 that it will not receive again in fiscal year 2025-26

There is no revenue budgeted in the Successor Agency Housing Trust Fund, other than interest income from remaining funds. Although the Carlsbad Redevelopment Agency has been dissolved, the California Department of Finance has approved the repayment of the approximately $8.1 million (plus accrued interest) loaned to both the city’s former redevelopment areas by the General Fund as well as debt service payments remaining on the former agency’s 1993 Tax Allocation Refunding Bonds. All outstanding loans and interest accrued have been paid to the city by the end of fiscal year 2020-21 and debt service payments were completed in fiscal year 2023-24.

Enterprise fund revenues for fiscal year 2025-26 are projected at $124.7 million representing an increase of 17.0% or $18.1 million over fiscal year 2024-25 estimates. The revenue breakdown by activity is shown in the graph on the following page. Enterprise funds are similar to a business in that rates are charged to support the operations that supply the goods or services. Carlsbad enterprise

funds include water and recycled water delivery, wastewater services, solid waste management and the operation of a municipal golf course.

Enterprise Funds

FY 2025-26 Budgeted Revenues $124.7 million

Golf Course Operations

$11.3M, 9%

Solid Waste Management

$5.0M, 5%

Wastewater Operations

$33.5M, 27%

Water Operations

$57.7M, 46%

Recycled Water

$17.1M, 14%

The Water Enterprise Fund revenue for fiscal year 2025-26 is estimated at $57.7 million representing an increase of $6.0 million or 11.6% when compared to fiscal year 2024-25 revenue estimates. This is driven by increases in water delivery charges. Projected revenues for Recycled Water of $17.1 million are expected to increase by $5.2 million or 44.0%, which includes the impact of an anticipated $6.0 million in loan proceeds the fund anticipates receiving in fiscal year 2025-26. This represents the final amount drawn from a State Water Resources Board loan that the fund is anticipated to begin paying back at the end of fiscal year 2024-25. Otherwise, recycled water sales are expected to increase by approximately 6.9% due to anticipated rate increases.

Forecasted revenues for Wastewater are $33.5 million representing a 21.4% or $5.9 million increase over fiscal year 2024-25 estimates. This increased estimate is largely driven by rate increases of 14% in fiscal year 2025-26 to support rising treatment costs and aging infrastructure costs.

Estimated revenues from operations of the Golf Course are $11.3 million, a slight decrease of $0.3 million or 2.2% when compared to fiscal year 2024-25 estimates. The Crossings at Carlsbad has experienced strong revenue performance year over year since the onset of the pandemic. Revenues for the upcoming year are estimated conservatively to account for any potential adverse impacts on consumer demand resulting from economic and market uncertainty.

Solid Waste Management revenues are projected at $5.0 million, which is $1.2 million or 32.5% higher than fiscal year 2024-25 estimates. The increase is driven by a $2.0 million transfer in from the General Fund to ensure fiscal health within the enterprise program.

Internal Service funds account for services provided within the city itself, from one department to another and on a cost reimbursement basis. These include programs such as the self-insurance funds for Workers’ Compensation and General Liability (Risk Management), as well as Vehicle Maintenance

and Replacement and Information Technology. Departments pay for these services and therefore the rates charged are based on the cost of providing the services. The goal of an internal service fund is to match budgeted expenses with charges to the departments.

The combined internal services funds project estimated revenues of $48.0 million for fiscal year 202526 representing a decrease of 10.8% or $5.8 million over fiscal year 2024-25 projections. This decrease is driven by a one-time transfer from the General Fund of $7 million to fund Workers’ Compensation, along with increases corresponding with rising costs across most internal service funds This transfer occurred in fiscal year 2024-25 and is not expected in fiscal year 2025-26, as the fund balance is in line with the current actuarial review of cash reserves in anticipation of future claims. The fiscal year 2025-26 operating budget includes $8.1 million for Workers’ Compensation and $5.7 million for Risk Management. Because Risk Management collected higher revenue consistent with increased expenditures related to large pending claims in fiscal year 2024-25, the revenue collection decreased $2.3 million, or 28.8%, back to lower levels.

Vehicle Maintenance and Replacement charges are budgeted at $4.4 million and $9.6 million, respectively. Vehicle Maintenance revenues are up compared to fiscal year 2024-25 estimates primarily due to increasing fuel costs Vehicle replacement costs rise when the number of vehicles and the price of new vehicles or the cost to maintain those vehicles increases. For example, many older generation sedans at the end of their useful lives are now being replaced with hybrids and plugin hybrids at a higher per unit cost. There have also been significant cost increases over the last several years in specialized vehicles such as fire trucks and ambulances as well as supply chain disruptions and unprecedented inflation that have significantly driven up prices.

Information Technology charges to departments have increased by 4.4% or $0.9 million when compared to fiscal year 2024-25 estimates. The main reason for this increase is due to contractual increases to existing service contracts

Internal Service Fund Allocation Methodology

Most of the revenue for the city’s internal service funds is generated from internal service charges. The expenses of each fund are budgeted for and then allocated to other funds on an annual basis. Each fund uses a different allocation basis to charge other funds for its costs, summarized below.

• Vehicle Replacement – Based on equipment assigned to departments.

• Vehicle Maintenance – A combination of fixed and variable maintenance charges. Fixed maintenance charges are based on a three-year average of maintenance costs in combination with budgeted labor costs. Variable maintenance charges are based on actuals.

• Information Technology Operations – A combination of computers per department for citywide maintenance/licensing and direct charges for department-specific items.

• Information Technology Replacement – Based on a combination of equipment and hardware specifically assigned to a department and for infrastructure hardware on an allocation based on computers per department as a percentage of citywide computers.

• Workers’ Compensation – Based on a combination of personnel count and five-year average claims costs by department.

• General Liability – Based on a combination of personnel count, five-year average claims costs by department and vehicles assigned to departments.

EXPENDITURES

The city’s Operating Budget for fiscal year 2025-26 totals $458.6 million, which represents an increase of approximately $39.6 million or 9.4% as compared to the adopted fiscal year 2024-25 budget. A summary of the changes in each of the city’s programs will be discussed below. Further information about each program can be found in the individual program summary pages.

Millions) BUDGET EXPENDITURE SUMMARY

By Fund Type

The General Fund contains most of the discretionary revenues that support core city services. However, this should not diminish the importance of the other operating funds as they also contribute to the array of services available within Carlsbad. The remainder of this section will provide more information about the budgeted expenditures by fund and program.

Since fiscal year 2022-23, the city’s budget has prioritized the prudent use of taxpayer funds through times of economic uncertainty. Through maintenance and operations reductions to the elimination of 24 full-time equivalent positions, the city saved over $5 million of ongoing expenditures. While formal budget reductions are not a part of the fiscal year 2025-26 budget, responsible and prudent use of taxpayer dollars as well as maintaining a balanced budget now and in the future remain the top priorities. Following years of significant budget reductions, the City Manager directed departments to evaluate current operations and to communicate needs to ensure staff are able to continue providing the highest level of service for the community. The fiscal year 2025-26 operating budget reflects critical increases, primarily including the purchase of an aerial ladder fire truck, reclassification of EMTs to Paramedic Firefighters, continuation of critical fire mitigation efforts, inflationary increases, Climate Action Plan initiatives, and back-office support.

The total Operating Budget for the General Fund for fiscal year 2025-26 is $242.4 million, which is $3.9 million or 1.6% more than the previous year’s adopted budget of $238.5 million. These changes are discussed in more detail on the following pages. BudgetBudget

GENERAL FUND SUMMARY By Expenditure Type (In Millions)

Personnel costs make up 60% of the General Fund budget. The total personnel budget for fiscal year 2025-26 is $145.6 million which is $10.9 million or 8.1% greater than the previous year’s total personnel budget of $134.7 million. This is driven by 4.6 additional full-time equivalent positions, an increase in CalPERS’ unfunded liability payment, negotiated compensation increases as well as anticipated step increases. In fiscal year 2024-25, the preliminary budget continues to propose including a line item for “vacancy savings.” This represents the estimated amount of budgeted personnel savings that will be realized by the end of the fiscal year. This mechanism is proposed for multiple reasons: (1) budgeting for vacancy savings reduces the total amount of the General Fund budget, (2) budgeted personnel costs more closely align with actual personnel costs over the course of the fiscal year, (3) historically, the city would bring recommendations to repurpose budget savings at the mid-year point of the fiscal year; this mechanism pre-emptively achieves that objective, and (4) budgeting vacancy savings will achieve alignment with the city’s 10-year forecast which has historically included a line item for vacancy savings.

GENERAL FUND

Personnel Costs (In Millions)

The table above shows the breakdown of personnel costs for the General Fund. General Fund salaries include full-time and part-time staff costs and are expected to increase in fiscal year 2025-26 by $6.1 million or 6.8%. The increase is primarily due to negotiated salary increases as well as the addition of 4.6 full-time equivalent positions. The full-time staffing changes are listed on the following page

Full-time equivalent staffing adjustments

General Fund:

• (1) Accountant– Finance Department

• (1) Human Resources Analyst – Human Resources Department

• (1.47) Additional part-time hours for Schulman Center programming - Library & Cultural Arts

• (0.7) Community Development – Administrative Assistant

• (0.15) Administrative Secretary – Fleet & Facilities Department

• (0.28) Part -time staff hour allocation adjustment – Human Resources and Housing & Homeless Services

Non-General Fund:

• (1) Equipment Technician – Fleet & Facilities Department

• (0.1) Administrative Secretary – Fleet & Facilities Department

• (0.6) Additional part-time hours for Schulman Center programming - Library & Cultural Arts

Retirement Benefits Cost

CalPERS administers the city’s defined benefit pension plan and costs have been increasing in past years as CalPERS addresses a structural shortfall in plan assets to cover unfunded liabilities. As part of CalPERS’ strategy to ensure the plan’s sustainability, CalPERS deliberately raised participating agencies’ contributions over several years to improve the plan’s long-term funded status. The pension system continues to pursue tactics in support of its strategy to ensure plan sustainability such as investing in assets with the objective of achieving a long-term rate of return that meets or exceeds 6.8%. While pension costs are increasing, there is some downward pressure on costs as new employees receive lower pension benefits. CalPERS has taken significant steps in ensuring plan sustainability, but pension costs still pose a significant risk to the city’s cost profile

In support of CalPERS strategies for plan sustainability and as part of the city’s strategic, longterm approach to financial management, the city actively manages its unfunded pension liability. Since fiscal year 2016-17, the City Council has approved additional discretionary contributions of $56.4 million to decrease future costs of the city’s unfunded actuarial liability and achieve a funded status of 80% in accordance with City Council Policy 86 In fiscal year 2023-24, the City Council also approved the establishment of a Section 115 Pension Trust and a $10.0 million initial contribution. Assets in the trust will be available to the city to maintain an 80% funded status, mitigate pension rate volatility and potentially earn a higher rate of return than if the funds were left in the General Fund. This active management helps ensure that resources are available to fulfill the city’s contractual promises to its employees and minimizes the chance that funding these pension benefits will interfere with the city’s ability to provide essential public services Fiscal year 2025-26 reflects $28.6 million of General Fund contributions required to make up for CalPERS’ abysmal investment performance in fiscal year 2021-22 as well as CalPERS’ missed target of 58% in fiscal year 2022-23. This represents an increase of $3.3 million or 12.9% compared to the previous year.

In support of CalPERS strategies for plan sustainability, and as part of the city’s strategic, long-term approach to financial management, the city actively manages its unfunded pension liability.

General Fund Health Insurance costs in the General Fund are increasing from $11.0 million to $12.1 million. The increase is a result of anticipated rate increases in addition to changes in employee benefit elections Other Personnel Costs include workers’ compensation expenses and other miscellaneous costs such as Medicare, unemployment and disability, which are increasing collectively by $0.4 million or 5.0%

Maintenance and Operations costs represent about 29% of the total General Fund budget and include the budgets for all program expenses other than personnel, capital outlay and transfers. Overall, total maintenance and operations costs are projected at $70.4 million, which represents an increase of $4.7 million or 7.2% for fiscal year 2025-26 when compared to fiscal year 2024-25. Fiscal year 2021-22 and 2022-23 experienced inflationary increases ranging between 4.1% and 8.3% which drove the city’s need to contain costs and identify areas for reduction with minimal service level impacts. Although inflation has declined compared to previous periods, it is still ranging between 2.5% and 3.8% thus far in fiscal year 2024-25. While it is expected that inflation will continue to slowly decrease, much uncertainty remains around the Federal Reserve’s actions to adjust target interest rates. Moreover, the uncertainty around tariff implementation continues to severely impact consumer confidence Much of the fiscal year 2025-26 maintenance and operating budget increase is attributable to inflationary increases, Climate Action Plan initiatives, and fire mitigation efforts

Capital Outlay includes budgeted equipment purchases over $1,000. Capital outlay purchases of $2.7 million are budgeted in the General Fund for fiscal year 2025-26. This represents an increase of $2.2 million and is primarily due to the Fire Department’s request to purchase a second front-line aerial ladder truck.

Operating Costs Associated with Capital Investments

As the city completes major capital projects, the costs of maintaining and operating the facilities and improvements, including additional personnel, if necessary, are added to departmental operating budgets. The city’s Capital Improvement Program and Strategic Digital Transformation Investment Program budgets include future projected operating impacts, which are estimated in the tables found in sections H and I, respectively.

Advances

Advances and repayments of prior advances are amounts anticipated to be transferred from the General Fund to other city funds with expectation of repayment in future years. No General Fund advances are included in this year’s operating budget.

The expenditures for fiscal year 2017-18 reflect a substantial decrease from the previous year due to the one-time costs reflected in fiscal year 2016-17 These cost reductions were partially offset by an additional one-time payment to CalPERS to address the city’s unfunded pension liability, the addition of nine staff members, additional legal and expert costs associated with the county airport expansion and the Safety Training Center lawsuit, higher personnel costs due to normal salary and benefit increases and higher mutual aid costs.

Expenditures in fiscal year 2018-19 reflect an additional one-time $20 million payment to CalPERS to further bring down the city’s unfunded pension liability. Fiscal year 2019-20 included the addition of 34 new full-time employees but was largely offset due to the city’s response to the COVID-19 pandemic and the need to reduce discretionary spending as much as possible during that unprecedented time.

Fiscal year 2020-21 expenditures reflect an additional $10 million one-time payment to CalPERS to further bring down the city’s unfunded pension liability. The increase was largely offset by the continuation of the COVID-19 pandemic and the city’s efforts to curb and defer expenditures. Additionally, a $57 million advance to the golf course was reclassified as a transfer out.

Fiscal year 2021-22 expenditures reflect the plan to reinstate city services back to pre-pandemic levels and operationalize the City Council’s goals. The increase includes $5.9 million in one-time costs associated with the goals and the addition of 18 new full-time and 6.7 part-time employees which are mostly associated with the goals. The city again made an additional one-time $6.4 million payment to CalPERS to bring down the city’s unfunded pension liability.

Fiscal year 2022-23 expenditures include the addition of 24 full-time employees as well as a number of new one-time requests to execute City Council goals, as well as a total of $10.6 million in one-time transfers to fund Workers’ Compensation, Risk Management, and Fleet Maintenance. Lastly, a $2 million allocation was approved to fund the Safer Streets local emergency.

Fiscal year 2023-24 expenditures include budget reductions of approximately 3% of the base maintenance and operations budget, offset by negotiated compensation and contractual benefit increases. Additionally, a $5.2 million allocation was approved for the Carlsbad Village Trenching Project.

Fiscal year 2024-25 expenditures include the elimination of 12 full-time equivalent positions offset by a $20 million one-time surplus use to General Capital Construction, Workers’ Compensation and Risk Management Funds.

Another way of looking at the General Fund budget is by Program Expenditures The chart below compares the total fiscal year 2025-26 budget to those amounts adopted in the previous year. A detailed description of each department, its services, budget summary and department accomplishments and priorities can be found in the department program summary pages.

A detailed description of each department’s budget can be found in the department program summaries.

GENERAL FUND EXPENDITURES

By Department (In Millions)

Transfers are amounts anticipated to be transferred from the General Fund to another city fund. The transfers included in the adopted budget are as follows:

• $14.6 million split between the Infrastructure Replacement Fund (42%), General Capital Construction Fund (42%) and the Technology Investment Capital Fund (16%). This will fund major new construction, maintenance and replacement of city infrastructure and facilities, and the city’s future technology needs. This represents 6% of budgeted General Fund revenues and is in line with the requirements set forth in Council Policy 91, Long Term General Fund Capital Funding Policy

• $5.6 million in additional transfers to the General Capital Construction and Infrastructure Replacement funds, split equally in the amount of $2.8 million each, resulting from the estimated General Fund surplus. The General Capital Construction and Infrastructure Replacement Funds are funded by the General Fund and include many capital projects programmed in the future. The level of funding necessary to fully fund these projects is an increasing concern. This one-time transfer amount will assist with funding the city’s general capital construction and infrastructure replacement into the future.

• $2.0 million to the Storm Water Program for reimbursement of the General Fund portion of Storm Water expenses as well as a one-time operating subsidy to ensure the program maintains a positive fund balance. In recent years, the program has been drawing down on excess reserve funds; however, on an ongoing basis, future expenses are expected to far outpace future revenues. Without additional ongoing revenue, assistance from the General Fund in excess of $5 million may be needed on an annual basis.

• $1.5 million to the Median Maintenance and Street Tree Maintenance Special Revenue Funds to cover cash shortfalls, as annual assessments collected from property owners do not cover annual operating expenditures. Annual assessments can only be increased with a majority vote of the property owners.

General Fund Summary

The operating budget for fiscal year 2025-26 provides a balanced General Fund budget for the coming fiscal year with General Fund revenue estimates exceeding General Fund budgeted expenditures by $0.9 million.

Fiscal Year

2025-26

General Fund Operating Budget

General Fund fiscal year 2025-26 revenue estimates

General Fund fiscal year 2025-26 preliminary expenditures

Projected operating surplus for fiscal year 2025-26

General Fund Reserves

Projected unassigned balance at June 30, 2025

Plus: projected fiscal year 2025-26 surplus

Plus: change in asset replacement reserve allocation

Equals: projected unassigned balance at June 30, 2026

Asset Replacement Reserve

$243.3 million

$242.4 million

$ 0.9 million

$139.9 million

$ 0.9 million

$ 7.0 million

$147.8 million

The city commits to maintaining its large machinery and equipment inventory. When an asset is procured, it begins depreciating the moment it is put into service and needs to be replaced at the end of its respective useful life. The city’s large equipment inventory represents approximately $60 million of the city’s total fixed assets. On an annual basis, this translates to a significant financial need and commitment to maintain the inventory. In an effort to not only prioritize these purchases, but to strategically plan for the ongoing financial impacts, staff recommend establishing a General Fund Asset Replacement Reserve. Separate and apart from the General Fund Reserve (City Council Policy 74), this Asset Replacement Reserve will serve as a mechanism for funding large machinery and equipment needs without impacting the General Fund Reserve or annual budget surplus year after

year. As of fiscal year 2025-26, and for the next 10 fiscal years, a total of $10.5 million is projected to be needed to fund asset replacement costs in the General Fund. The asset replacement schedule can be found in the appendices.

Changes in Other Funds

Special Revenue funds are budgeted at $24.7 million representing an increase in expenditures of 16.2% or $3.5 million when compared to fiscal year 2024-25 Other than a $1.5 million increase in rental assistance programming, a $1.6 million increase for one-time Continuum of Care grant funds, and a $0.5 million increase in Permanent Local Housing Allocation funding, spending in most Special Revenue Fund programs is expected to remain relatively consistent with the prior year.

Enterprise funds total $146.9 million, which represents an increase of $28.4 million or 24% over the fiscal year 2024-25 adopted budget. The majority of this increase is due to a one-time budgeted transfer from the Recycled Water Operating Fund to the Recycled Water Connection Fund of $16.4 million. This is related to a State Water Resources Control Board loan reaching the payback period, whereby the Recycled Water Operating Fund will begin repayment while the proceeds of the loan will remain in the associated capital fund. The Potable Water and Recycled Water funds continue to operate and maintain critical infrastructure systems and provide the safe delivery of drinking water, conservation outreach and treated irrigation water. The cost of purchased water continues to increase, causing an overall increase in the Potable Water budget. The Wastewater fund provides reliable wastewater collection services. The budget for this fund’s increase is primarily due to an increase in the transfers out to fund its related capital improvement fund. The Solid Waste Management budget is also increasing due to inflationary impacts to operating costs, including the city’s street sweeping contract.

The Internal Service funds total $44.5 million, which represents an overall increase of $3.8 million or 9.3% over fiscal year 2024-25. Much of the increase in Workers’ Compensation costs is attributable to rising insurance liability rates, claims filed and administrative costs. Vehicle Replacement is the largest contributor to the increase and driven by a higher number of more costly vehicles scheduled for purchase in the upcoming year. Information Technology is $1.2 million or 6.2% higher than the previous year, which is due to contractual service increases

The budget for the Successor Agency Housing Trust Fund for fiscal year 2025-26 is decreasing by $0.01 million compared to last year with no budget required for fiscal year 2025-26. The Recognized Obligation Payments Schedule identifies financial commitments of the former Redevelopment Agency, including the remaining scheduled debt service payments on the Redevelopment Agency bond issue, the outstanding loan from the city’s General Fund and minor allowable administrative costs. The last debt service payment on the bond issue was completed in September 2023 and the city loan was paid off in fiscal year 2020-21. In fiscal year 2025-26, the city will work to complete the dissolution and close the fund.

Changes to Fund Balance

While the projected cumulative change in the city’s non-major operating funds’ ending balances is not significant, three major operating funds are projected to see changes in their fund balances greater than 10%. The Water Operations Fund is expected to decrease by 43.1% by the end of fiscal year 202526, largely due to increasing operations costs, primarily water purchases. The Recycled Water Operations Fund is expected to decrease because operating expenditures are outpacing the revenue from rates charged to customers; the Utilities Department will continue to monitor rates in the future to address funding needs. The Wastewater Operations Fund is expected to decrease by 13.9%, primarily due to an increase in the transfer out to the associated capital fund for future capital project needs.

Changes between the proposed and adopted budget

In response to City Council direction, staff made changes at the following meetings:

• At the preliminary operating budget presented to the City Council on May 20, 2025, the City Council added $75,000 to the General Fund expenditure budget for increased contractual services in the Parks & Recreation Department to fund improvements of city trails that will enhance the appearance, safety and useability of the citywide trails inventory. This is a onetime increase for fiscal year 2025-26. Sufficient funding exists for this one-time appropriation.

• At the final budget adoption public hearing on June 17, 2025, the City Council reduced the city’s overall expenditure budget by $604,600, of which $514,980 was reduced from the General Fund, related to unfunded liability costs associated with the city’s participation in CalPERS. Specifically, the City Council selected the prepayment option to receive the discount on the unfunded liability contribution instead of making monthly payments.

PERSONNEL ALLOCATIONS

*The ending budget for 2024-25 takes into account full-time personnel changes approved mid-year, including: the addition of (6.0) FTE in the Police Department, the transfer of (1.0) FTE from the Communication & Engagement Department to the Office of the City Clerk, the reduction of (1.0) FTE in the Utilities Department, and the reduction of hourly FTE in the Parks & Recreation and Transportation departments.

SCHEDULE OF PROJECTED FUND BALANCE

* For the General Fund only, this represents unassigned fund balance. Beginning fund balance as of July 1, 2024 includes the establishment of an asset replacement reserve and an allocation of $17.5 million.

SCHEDULE OF PROJECTED FUND BALANC E

* For the General Fund only, this represents unassigned fund balance. Projected beginning fund balance as of June 30, 2025 includes the adjustment to the asset replacement reserve, reducing the previous year's $17.5 million allocation to $10.5 million.

** The projected beginning fund balance as of June 30, 2025 includes an adjustment to move the proceeds and future debt obligation of a $10.4 million State Water Resources Control Board loan from the Recycled Water Connection Fund to the Recycled Water Operations Fund.

SCHEDULE OF REVENUE ESTIMATES

SCHEDULE OF REVENUE ESTIMATES

SCHEDULE OF REVENUE ESTIMATES

SCHEDULE OF REVENUE ESTIMATES

Funds - Continued

SCHEDULE OF REVENUE ESTIMATES

SCHEDULE OF REVENUE ESTIMATES

S CHEDULE OF BUDGET EXPENDITURES

SCHEDULE OF BUDGET EXPENDITURES

SCHEDULE OF BUDGET EXPENDITURES

PUBLIC SAFETY

The City of Carlsbad’s public safety services create and maintain a safe community for all who live, work and play in our city. This important work is carried out by the dedicated men and women of the Police and Fire departments. Highly specialized divisions cover all aspects of modern law enforcement and fire services including response and recovery, emergency medical, marine safety, community risk reduction and emergency management.

We are proud to serve the Carlsbad community, working in partnership to deliver on the city mission at the highest possible level every day.

Michael Calderwood Fire Chief

442-339-2141

FireMail@carlsbadca.gov

Christie Calderwood Chief of Police

442-339-2100 police@carlsbadca.gov

• Fire Administration

• Emergency Operations

• Community Risk Reduction

PUBLIC SAFETY | FIRE DEPARTMENT : ADMINISTRATION

4,947,8655,479,3966,534,9076,345,579 TOTAL EXPENDITURES $5,816,063$6,449,768$7,537,497$7,380,812

Account: 0012200 0012210 0012253 Fund: General ABOUT

Fire Administration provides leadership, strategic planning and organizational support to ensure effective operations across the entire department.

SERVICES

• Administer directives, policies and procedures

• Compile data and analyze business intelligence

• Monitor budgets, contracts, procurement, payroll and accounting processes

• Oversee mutual aid reimbursement

• Research and support grant programs and opportunities

• Manage public records requests and document retention

• Support employee performance and compliance processes and records

• Establish and maintain administrative tools, resources and guides

TOTAL EXPENDITURES $26,692,213$30,090,387$31,328,026$36,274,082

Account: 0012220-29 0012250 0012252 Fund: General

ABOUT

The Emergency Operations Bureau safeguards life, property and the environment by providing 24hour fire suppression, rescue, marine safety, disaster mitigation and emergency medical services.

SERVICES

• Extinguish structure and wildland fires

• Deploy mutual aid assistance across the state

• Organize response and support operations for natural or man-made disasters

• Investigate and mitigate hazardous materials

• Deliver emergency medical and community health services

• Perform high-risk technical search and rescue

• Deploy SWAT medics to support law enforcement agencies

• Provide lifeguard services at North Beach and Agua Hedionda Lagoon

• Develop and supervise employee health and wellness programs

• Coordinate fire service career development and advancement opportunities

RECENT ACCOMPLISHMENTS

• Achieved improved classification ratings through an Insurance Service Office Public Protection Review of fire protection and response capabilities, potentially reducing fire insurance premiums for residential and commercial properties

• Updated the Local Agency Formation Commission Municipal Service Review to assess the adequacy and efficiency of fire and emergency medical services

• Completed a data-sharing agreement with the San Diego County Local Emergency Medical Services Agency, enhancing patient care, quality improvement, and regional coordination

• Delivered first aid services and staffed incident command posts to strengthen safety measures at special events, including TGIF concerts and the Village Street Faire

• Expanded local control over training and staffing by establishing an internal promotional pathway for Emergency Medical Technicians to obtain firefighter certification

• Upgraded alerting systems at Fire Stations 1, 3, 4, 5, and 6 to replace legacy equipment

GOALS

• Identify potential sites and research funding options for a permanent Fire Station 7

• Monitor response times and outcomes by risk type to maintain performance awareness, improve efficiency, optimize resource allocation and enhance community safety

• Convert single-role EMT positions into dual-role providers trained in both emergency medical services and fire suppression over the next three fiscal years

• Attain accreditation from the United States Lifeguard Association to validate compliance with national standards for open-water lifeguard training programs

• Construct a new ventilation training prop at the Safety Training Center prior to the demolition of the existing prop at the planned Orion Center site

• Maintain benchmark rating for 90th percentile time for fire turnout and EMS patient satisfaction rating

SIGNIFICANT CHANGES IN THIS YEAR’S BUDGET

To address the demands of larger buildings, increased building heights, rising population densities, and evolving emergency response needs, the Fire Department will implement a multi-year staffing plan This plan will transition existing single-role EMT positions into dual-role providers trained in both emergency medical services and fire suppression. Through a phased approach, all operational personnel will be firefighter-certified by 2028.

In the first phase, six EMT positions will be reclassified in fiscal year 2025-26. Additionally, the department will procure an aerial ladder truck to expand operational capacity and ensure comprehensive citywide coverage.

PUBLIC SAFETY | FIRE DEPARTMENT : COMMUNITY RISK REDUCTION

Personnel Services

Account: 0012235

0012240-0012243 0012260

Fund: General

ABOUT

The Community Risk Reduction Bureau mitigates hazardous conditions and ensures readiness for effective incident response through prevention, enforcement and public education

SERVICES

• Oversee Hazard Reduction Program to identify and abate brush fire hazards

• Respond to inquiries and complaints concerning hazardous conditions

• Investigate cause and origin of suspicious or large-loss fires

• Review code compliance on construction plan submittals

• Complete construction inspections for new buildings and remodeling projects

• Conduct annual inspections of schools, care facilities, hotels, motels and apartment complexes

• Install and test smoke alarms in Carlsbad homes

• Coordinate outreach and education programs promoting fire safety tips and prevention

• Disseminate timely and accurate department information through various media platforms

• Provide leadership to community organizations to help ensure readiness to prevent, protect against, mitigate, respond to and recover from all threats and hazards

• Direct, conduct and implement

• Coordinate

• Support large-scale

RECENT ACCOMPLISHMENTS

• Deployed a new multi-channel emergency alert system that delivers real-time, geographically targeted public safety warnings, notifications and instructions for faster, more effective emergency res ponse

• Implemented a community risk reduction program offering free training and inspections to businesses with commercial cooking operations

• Expanded the Hazard Reduction Program to provide weed abatement services on cityowned vacant lots

• Adopted a citywide map that classifies land into fire hazard severity zones of moderate, high, or very high

• Assisted the first homeowners association in achieving Firewise USA recognition, encouraging community-driven wildfire preparedness and risk reduction through local assessments and action plans

GOALS

• Develop a comprehensive long-term fire mitigation plan that integrates risk assessment, fuel management, emergency response, community education, infrastructure improvements, implementation, monitoring and public involvement

• Create defensible space and fuel modification guidelines for new construction developments located in designated fire hazard severity zones

• Update the City Landscape Manual to ensure consistency with fire codes and state defensible space requirements

• Conduct a Community Risk Assessment to identify, prioritize, and mitigate local fire and emergency hazards

• Adopt a mid-rise building ordinance that addresses structural height limitations, design standards, and the impacts of traffic, infrastructure, and environmental factors

• Organize training sessions to familiarize city employees with new technology, equipment and procedures at the remodeled Emergency Operations Center

• Maintain benchmark rating for compliance with Senate Bill 1205-mandated inspections and conducting fire plan reviews within 10 days of submittal Performance Measure

Strategic Plan Goal Compliance with Senate Bill 1205-mandated

Quality of Life & Safety Fire plan reviews conducted within 10

Quality of Life & Safety

POLICE

• Administration, Police Grants & Asset Forfeiture

• Field Operations

• Support Operations

• Administrative Support Operations

• Professional Standards & Services

PUBLIC SAFETY | POLICE DEPARTMENT: ADMINISTRATION , POLICE GRANTS & ASSET FORFEITURE

Revenue-COPS Fund

Revenue-Public Safety Grants

ABOUT

This division develops and administers programs that support the city’s and the Police Department’s statement of values in a manner responsive to the city and its residents. This division establishes policies and long-range plans to meet department goals and city needs. Administration is also responsible for police grants, which includes federal and state asset forfeiture, the Citizens’ Option for Public Safety, the Justice Assistance Grant, the Urban Areas Security Initiatives Program and the Office of Traffic Safety. SERVICES

• Develop and manage programs that reduce crime, encourage resident engagement and improve community safety

• Assist staff with individual and team development

• Provide support to divisions to assist with meeting goals

• Respond to residents’ concerns, City Council inquiries and public records requests

• Use grants to purchase police equipment, supplement staffing costs and assist with training

RECENT ACCOMPLISHMENTS

• Purchased replacement AED devices to outfit officers, rangers, community service officers and senior volunteers

• Successfully developed and implemented a unified training model that integrates multiple disciplines into a cohesive framework, enhancing efficiency while minimizing personnel impact

• Used multiple grants to supplement staffing costs, acquire police equipment, facilitate active shooter training and coordinate DUI/DL checkpoint and other traffic enforcement operations

• Following the promotions of a new Chief, Assistant Chief, and Captain late last fiscal year, the new leadership team focused this year on sharing their expectations with department staff, strengthening ties with the community and reviewing internal operations to find ways to work more efficiently

• Presented to the City Council on several items including Crime Statistics, Windsor Pointe, massage ordinance change, etc.

GOALS

• Formalize new supervisor mentoring and training program

• Continue to monitor crime rates and crime trends within the city to deploy resources to strategically address issues

• Use grant funding to explore the use of more innovative technology to provide the most efficient and effective services

• Work cross-departmentally with city staff who specialize in data and innovation to increase accuracy, efficiency and transparency in the department’s data

• Continue to research innovative technology that will assist in building a real-time crime center

• Continue to seek grant funding for necessary equipment and collaborate with the Fire Department on grant management

PUBLIC SAFETY | POLICE DEPARTMENT: FIELD OPERATIONS

Account: 0012120

0012123-2125

0012127-2129 Fund: General

ABOUT

The Field Operations Division includes patrol, canines, SWAT, lagoon patrol and police rangers.

SERVICES

• Respond to calls for emergency and non-emergency services

• Utilize new and existing resources to address complaints and quality of life issues

• Provide emergency services, preventative patrol, traffic enforcement and special enforcement in the community

• Utilize de-escalation tactics during criminal and mental health scenarios to safely resolve critical incidents

• Staff major public events in the city with Patrol and SWAT team members to respond to immediate, life-threatening emergencies

• Conduct field interviews and take reports at incidents like crimes, arrests and traffic collisions

• Enforce laws and ordinances, preserve the peace and provide for the protection of life and property through proactive programs of enforcement and prevention

RECENT ACCOMPLISHMENTS

• Received an approval rating of 4.50 out of 5, based on 10,777 people surveyed when asked how they would rate the officer with whom they interacted

• Fulfilled expectations for high levels of service despite operating at 75% staffing levels due to vacancies, employee leave and training requirements

• Worked collaboratively with the Parks and Recreation Department, Fire Department, and the Friday Night Lights youth flag football non-profit to implement a new safety and traffic control plan for approximately 3,600 games per year

• Received officer recognition for seven lifesaving awards, primarily for Patrol Operations

• Drafted and executed dozens of field operation plans to address residential burglaries, organized retail crime and other quality of life issues leading to multiple arrests and successful prosecutions

GOALS

• Collaborate with the Information Technology Department to implement the new Motorola Computer Aided Dispatch system, which replaces the city’s current system now at end of life

• Train all staff with new requirements stemming from legislative changes such as Proposition 36 and Senate Bill 43

• Re-enter Operation Stonegarden, a federal grant program through the San Diego County Sheriff’s Department, to reduce the influx of illegal drugs, human trafficking and other associated crimes

• Continue to strive to achieve the national average response time of 6:00 minutes for Priority 1 calls for service

Priority 1 calls for service

2

Priority 3 calls for service response time

Priority 4 calls for service response time

SIGNIFI C ANT CHANGES IN THIS YEAR’S BUDGET

Three full-time patrol officers were added mid-year 2024–25, as approved by City Council, to enhance response times and improve the department's capacity to address quality of life concerns.

PUBLIC SAFETY | POLICE DEPARTMENT: SUPPORT OPERATIONS

Account: 0012115

0012121

0012126

0012130-2138

0012142-2143

ABOUT

The Support Operations Division includes the Crime Suppression Team, Homeless Outreach Team, Investigations Division, Traffic Division, Family Services, Property & Evidence and Fleet Operations.

SERVICES

• Conduct follow-up investigations leading to the identification and apprehension of persons responsible for the commission of crimes

• Collect and process evidence collected in the field by police employees

• Provide support to divisions to assist with meeting goals

• Assist in the preservation of all life and ensure a safe resolution to critical incidents

• Investigate and follow up on crime and incident reports as they relate to the family

• Assist in the coordination of diversion, prevention and education activities

• Provide and manage the department’s fleet

RECENT ACCOMPLISHMENTS

• Implemented E-Citation program to all department members

• Updated and expanded the deployment of the department’s drone fleet to cover all patrol shifts and certified both rangers in aerial drone proficiency under the standards set by the National Institute of Standards and Technology, a division of the U.S. Department of Commerce, as both drone operators and instructors

• Collaborated with the Fleet & Facilities Department to implement vehicle telematics and began deployment

• Increased security efforts for the TGIF Concert series

• Completed distribution of individually assigned vehicles for the take home vehicle program for patrol personnel

• Conducted 8 e-bike safety classes, offered to the public on a quarterly basis, reaching 50-60 participants per class

• Presented at the California Police Chief’s Association Traffic Safety Summit on e-bike and pedestrian safety regarding the city’s innovative efforts on roadway safety

• Amended Carlsbad Municipal Code 5.16 to streamline the massage licensing process, detect and deter unauthorized massage business and therapists at the application phase, improve accountability for massage businesses and therapists that are issued a city certificate of registration and allow off-premises massages at approved locations

GOALS

• Analyze caseloads within the investigations divisions to support detective wellness and maintain fair workload distribution

• Evaluate, acquire and revive the department’s surveillance camera program that utilizes moveable cameras and equipment to monitor, investigate and deter criminal activity in realtime

• Assess the current investigations division structure to be more efficient through reorganization and personnel additions to meet the needs of the community

SIGNIFI C ANT CHANGES IN THIS YEAR’S BUDGET

Three full-time positions were added, including a Traffic/Special Events Sergeant, Internet Crimes Against Children Detective and Digital Forensic Specialist. These positions were approved mid-year 2024-25 by the City Council and align with the city’s Strategic Plan in support of the quality of life and safety.

ABOUT

PUBLIC SAFETY | POLICE DEPARTMENT: ADMIN I STRATIVE SUPPORT OPERATIONS

Account: 0012144-2145 Fund: General

The Administrative Support Operations Division includes Crime Analysis, Communications and Records.

SERVICES

• Provide police officers with actionable information by analyzing crime patterns, statistics and trends

• Deliver public safety communication, including answering 911 and other calls and dispatching appropriate emergency personnel

• Maintain and provide information and support for all records management, data entry and processing, Public Records Act requests and retrieval of police records in accordance with state-mandated procedures

RECENT ACCOMPLISHMENTS

• Earned an approval rating of 4.67 out of 5 based on 11,099 people surveyed when asked how they would rate dispatch services

• Received a passing score on the annual California Department of Justice Criminal Justice Information Services audit for calendar year 2023

• Maintained full or near-full staffing across all divisions

• Implemented GovTransfer, a new workflow management software, to streamline records requests

• Attained 911 call answer times well within the National Emergency Number Association standards despite operating at minimum staffing levels

GOALS

• Incorporate existing and emerging public safety technologies to enhance our service to the public, such as Live911 which bridges the gap between dispatch and officers in the field, allowing officers to listen to 911 calls in real time, improving responses

• Prepare for the statewide migration to Next Generation 911, an emergency communications infrastructure enabling voice and multimedia communications between the 911 caller, the dispatcher and officers in the field

• Plan for the migration to a new Records Management System

• Maintain 911 call answer times above the national standards

PUBLIC SAFETY |

POLICE DEPARTMENT: PROFESSIONAL STANDARDS & SERVICES

Account: 0012119

0012122

0012140 Fund: General

ABOUT

The Professional Standards & Services Division supports the Police Department in the form of training, internal affairs, recruitment and hiring.

SERVICES

• Recruit new employees, organize testing programs and conduct mandated pre-employment investigations and Peace Officer Standards and Training

• Establish, maintain and enforce department professional standards and coordinate all department training

• Investigate complaints against Police employees

• Provide information to the media to inform the public regarding crime activity in the city

• Develop and administer promotional testing within the Police Department

• Help improve the quality of life for city residents through crime prevention awareness and education, and help reduce the community’s fear of crime through the dissemination of information

RECENT ACCOMPLISHMENTS

• Redesigned and implemented the Master Training Plan to outline the department’s training philosophy, required trainings and the different levels of training and their authorization process

• Collaborated with the Human Resources Department on modified duty, injured on duty and temporarily totally disabled claims

• Implemented and oversaw the transition to the new Taser 10, a less than lethal platform to be carried by officers and rangers while in an enforcement capacity

• Revised the employee evaluation process as well as internal and external complaint forms

• Hired 26 personnel in the Police Department including sworn, non-sworn and professional staff to fill vacancies

GOALS

• Maintain adequate levels of staffing in all areas of the department to continue to maintain an exceptional standard of service

• Onboard new employees with an extensive training and readiness program

• Update the internal affairs manual

• Purchase and implement virtual reality training technology and equipment that places officers in realistic, high-pressure scenarios, helping them build confidence and improve decision-making through repeated, hands-on practice in a safe, simulated environment that couldn’t be recreated otherwise

PU BLIC WORKS

Public Works is responsible for planning, providing and maintaining the infrastructure that supports a high quality of life in the City of Carlsbad. From city buildings and vehicles to roads, habitat, safe, reliable water supplies and more, Public Works oversees responsible and sustainable management practices for a wide variety of city assets.

This includes administration of the Capital Improvement Program, a five-year budget with a 15-year forecast that encompasses planning, design and construction of road and traffic improvements; major facilities maintenance, repairs and renovation; storm drain systems; water and wastewater infrastructure; civic buildings and other infrastructure projects. Public Works plays a key role in promoting environmental sustainability, enhancing options and protecting public health and safety.

Paz Gomez Deputy City Manager, Public Works

442-339-2751 paz.gomez@carlsbadca.gov

Account: 0018310

ABOUT

Fund: General

Public Works Administration provides leadership and strategic vision for the entire Public Works Branch, which is comprised of the Construction Management & Inspection, Fleet & Facilities, Environmental Sustainability, Transportation and Utilities departments. It provides administrative support services with a focus on alignment to the Strategic Plan, Community Vision and other City Council initiatives

SERVICES

• Provide leadership and management support, operating budget oversight, Capital Improvement Program oversight, contract administration and records management

RECENT ACCOMPLISHMENTS

• Managed the CIP budgeting process that provides updated cost estimates, supports realistic project delivery timelines based on available resources and offers improved transparency in decision-making

• Updated Council Policy 55 to improve the process and provide greater clarity on subcontractor substitution on public works contracts

• Implemented the second phase of the enterprise asset management system, which included the Utilities Department; initiated the third phase, which includes the Transportation Department’s Pavement Management Program in the Engineering Division; and initiated the fourth phase, which includes the Environmental Sustainability Department’s Watershed Protection and Habitat Management divisions

• Executed master agreements with 29 consulting firms across 13 disciplines to provide professional services supporting the delivery of departmental and CIP projects

• Earned three project awards from the San Diego and Imperial Counties Chapter of the American Public Works Association for the following departments and projects: the Fleet & Facilities Department Facilities Division for the Leo Carillo Ranch Roof Repair for Historic Restoration project, the Transportation Department for the Safer Streets Together initiative, and the Utilities Department for the Villas Lift Station Improvement project

• Received a team award from the American Public Works Association for Outstanding Operations & Maintenance Personnel for implementation of the city’s new enterprise asset management system, specifically recognizing staff from the Facilities Maintenance, Streets and Storm Drain Maintenance divisions

• Attained two individual awards from the American Public Works Association for Outstanding Service in a Public Agency: one award for the Transportation Director/City Engineer for decades of dedicated service and one Award of Merit for a Senior Program Manager in the Construction Management & Inspection Department for the Stormwater Compliance and Green Infrastructure programs

• Secured a project award from the San Diego Section of the American Society of Civil Engineers for Outstanding Small Project for construction of Temporary Fire Station 7

• Ranked by the NAFA Fleet Management Association as #8 of the 100 Best Public Fleets in 2024, rising from #33 in 2023

• Achieved recognition from the Solid Waste Association of North America for alignment with the Environmental Protection Agency’s sustainable materials management objectives with the successful adoption of the city’s Sustainable Materials Management Plan

GOALS

• Support an update of the city’s procurement policy and related administrative orders to reflect current practices, procedures and legal requirements specific to public works contracting

• Complete major update to Public Works standard contract templates to reflect updated Greenbook engineering standards and streamline language

• Develop a standard operating procedure for construction staging areas to streamline the process to designate an area for temporary contractor use while constructing city projects

• Continue to engage in the planning, design and implementation of a citywide portfolio project management system that includes centralized schedule tracking for CIP projects

• Maintain focus on employee coaching, development and training for staff at all levels throughout the branch

PUBLIC WORKS | CONSTRUCTION MANAGEMENT & INSPECTION

Account: 00185XX Fund: General

ABOUT

Construction Management & Inspection ensures compliance with legal, regulatory and contractual requirements during construction of CIP and private development projects

SERVICES

• Manage construction of CIP projects and public works contracts for all departments managing city assets

• Inspect and oversee private development grading, which includes monitoring contractor compliance with city standards and approved site design

• Inspect and oversee stormwater compliance, which includes monitoring contractor implementation of site-specific plans and temporary methods to prevent storm water pollution during construction for NPDES requirements

• Manage Green Infrastructure Program, which includes annual notifications to property owners of the required maintenance for water quality devices installed as part of development projects to help protect waterways by preventing pollutants such as trash, fertilizers, pesticides and sediment from making their way into local waterways

• Oversee all construction activity in the public right-of-way

RECENT ACCOMPLISHMENTS

• Received the 2024 Honor Award from the San Diego and Imperial Counties Chapter of the American Public Works Association for the Villas Sewer Lift Station Replacement project to acknowledge the successful flow bypass operations during construction and best management practices that ensured safety and minimal impacts to the public

• Conducted construction management and inspection services on significant CIP projects and citywide emergency responses, including the:

o Safer Streets Together initiative,

o Trieste Slope Repair project,

o Storm Related Local Emergency for Removal of Sediment and Vegetation on the Buena Vista Creek Concrete Channel storm-related emergency protection activities,

o Carlsbad Boulevard Pedestrian Improvement project,

o Traffic calming projects on Park Drive, Black Rail Road, Plum Tree Road, Carillo Way, Victoria Avenue, Highland Drive, Nueva Castilla Way and Circulo Sequoia

o Downtown and Terramar Small Diameter Water Main Replacement project, and

o Palomar Airport Waterline Realignment project

• Provided construction inspection services for private development projects such as Marja Acres, Ionis Lots 21 & 22, Chick-fil-A, FPC Residential, Pacific Wind apartments, Carlsbad Raceway Business Park and Aviara Apartments East

• Continued to inspect work in the right-of-way for 5G communications infrastructure installation throughout the city

• Maintained stormwater compliance through training, education, outreach and enforcement actions resulting in zero construction-related notices of violation from the Regional Water Quality Control Board to date

GOALS

• Develop and implement a pilot contractor performance evaluation process to improve accountability throughout a public works project

• Work with property owners to reduce pollution and improve water quality through the city’s Green Infrastructure Program with the goal of receiving at least a 75% response rate on the annual Green Infrastructure maintenance verification

• Continue to maintain stormwater compliance on CIP projects with a goal of no violations from the Regional Water Quality Control Board Performance Measure

Strategic Plan Goal

Percentage of property owners that respond to the annual Green

& the Natural Environment Construction

violations on CIP projects

PUBLIC WORKS |

SUSTAINABILITY: SUMMARY

ENVIRONMENTAL SUSTAINABILITY

• Climate Action Plan and Habitat Management

• Sustainable Materials Management

• Watershed Protection

ABOUT

The General Fund portion of the Environmental Sustainability Department budget includes the Climate Action Plan, Habitat Management and Watershed Protection Divisions, which is also responsible for the coordination of the municipal component of the National Pollutant Discharge Elimination System Municipal Stormwater Permit. These divisions integrate components of the department’s environmental and sustainability guiding principles and support the 5-year Carlsbad Strategic Plan Goal of Sustainability & the Natural Environment.

PUBLIC WORKS | ENVIRONMENTAL SUSTAINABILITY: CLIMATE ACTION PLAN AND HABITAT MANAGEMENT

Account: 0015110 0015130

SERVICES

Fund: General

• Coordinate with multiple city departments to oversee Climate Action Plan implementation, collect monitoring data and prepare an annual report for the public and the City Council

• Prepare and update a public-facing CAP dashboard that provides information and data regarding energy, transportation carbon sequestration and waste diversion

• As directed by City Council, update the CAP every five years

• Coordinate the preparation of a community-wide greenhouse gas emissions inventory with future projections

• Fulfill city regulatory requirements related to the CAP

• Perform outreach and education related to CAP activities and respond to public inquiries

• Manage the Carlsbad Green Business Program, which supports and recognizes local businesses for adopting environmentally sustainable practices

• Engage in groups like the San Diego Regional Climate Collaborative to collaborate, share expertise and advance sustainability efforts

• Research and monitor upcoming regulations, funding opportunities and activities related to climate mitigation, adaptation, resilience and equity

• Provide leadership and citywide coordination to ensure compliance with Habitat Management Plan regulations for private and city CIP projects

• Oversee non-profit preserve managers to ensure Habitat Management Plan compliant biological management, monitoring and reporting across the citywide preserve system

• Collaborate with the U.S. Fish and Wildlife Service, California Department of Fish and Wildlife and California Coastal Commission staff to ensure solutions-oriented Habitat Management Plan implementation

• Represent the city in regional conservation organizations, including San Diego Management and Monitoring Program and SANDAG Habitat Conservation Taskforce

• Facilitate regional and local conservation-related scientific research, biological monitoring and adaptive management

• Coordinate preserve inspection program and Ward’s weed control program

RECENT ACCOMPLISHMENTS

• Completed a comprehensive update to the city’s CAP, which included presentations to the Planning Commission and the City Council

• Joined the Cleantech San Diego board and Governor’s Office of Land Use and Climate Innovation’s CAP Technical Advisory Group to foster collaboration and share expertise

• Continued the pilot adaptive management program to enhance and protect two endangered plant species and rare native grassland habitat

• Completed all municipal inspections as required by the Municipal Stormwater Permit

GOALS

• Implement the updated CAP with focus on the 2025 monitoring benchmarks

• Continue implementation of the Carlsbad Green Business Program

• Advance implementation of the Habitat Management Program by ensuring consistency with regulatory requirements including target preserve acres and report out to the resource agencies and the public annually

• Continue preserve inspection program to assess conservation areas, the adaptive management program to respond to environmental changes and the trail monitoring pilot project to evaluate trail conditions and usage

• Transition the Beach Preservation Commission to the Environmental Sustainability Commission, as directed by the City Council

Sustainability & the Natural Environment

SIGNIFI C ANT CHANGES IN THIS YEAR’S BUDGET

The fiscal year 2025-26 budget includes $250,000 in one-time budget appropriations to initiate vegetation management project to remove additional non-native species and dead vegetation to minimize fire risk and exposure, given the impacts of recent large-scale fires in Los Angeles County This is a continuation of efforts approved by the City Council mid-year 2024-25.

PUBLIC WORKS |

SUSTAINABILITY: SUSTAINABLE MATERIALS MANAGEMENT

Personnel Services

Expenses

ABOUT

In alignment with the Carlsbad Municipal Code and General Plan, the Sustainable Materials Management Division coordinates implementation of a comprehensive citywide waste reduction and recycling program, ensuring full compliance with state regulations governing waste reduction, diversion and the proper disposal of solid waste. Division staff manage the franchise agreement for waste hauling and recycling services, oversee the Palomar Transfer Station agreement for disposal services, lead waste reduction and diversion outreach and education initiatives and ensure the safe disposal of household hazardous waste. Through these efforts, the division actively contributes to a more sustainable and environmentally responsible community.

SERVICES

• Represent the city at meetings related to sustainable materials management with CalRecycle, businesses, residents and other stakeholders

• Oversee the municipal waste reduction, diversion and other sustainability programs

• Coordinate grant activities, including local, state and national grant applications with the City Council’s approval, implementing grant activities, tracking expenses and submitting reports

• Coordinate outreach and education targeted at increasing recycling and other diversion programs for residents, businesses, municipal employees and the public

• Organize annual Earth Month and Earth Day events promoting recycling, proper disposal of household hazardous waste, composting and beach cleanup

• Conduct annual rate analysis to determine cost-effective practices for the franchise agreement, including trash and recycling services

• Submit required annual recycling, composting and disposal reports to CalRecycle

• Engage community to decrease waste and increase recycling and compost practices

RECENT ACCOMPLISHMENTS

• Provided outreach and education to all multifamily properties and businesses in the city on new single-use plastics ordinances and organics requirements

• Hosted Fix-It clinic events, compost giveaway events and an e-waste collection event to promote sustainable practices and encourage responsible waste management

• Continued to work in all school districts assisting with education programs, staff training and incorporating the waste hauler

• Presented at the California Resource Recovery Association and Waste Expo conferences on sustainable initiatives implemented in the city

• Expanded edible food recovery efforts by providing funding opportunities to food recovery organizations that supported local businesses

• Reviewed special event applications for compliance with recycling and trash best practices

• Recognized by the Solid Waste Association of North America for advancing the Environmental Protection Agency’s sustainable materials management objectives with the successful adoption of the Sustainable Materials Management Plan, food recovery funding, schools recycling, organic waste composting, awards and the city’s Earth Month celebration

• Revised city departments’ Sustainability Action Plans to improve recycling practices, increase awareness, and enhance tracking of waste diversion efforts within their operations

GOALS

• Monitor waste diversion and recycling programs at the Palomar Transfer Station

• Increase waste diversion in the commercial sector by focusing on technical assistance targeting high trash-generating businesses with low diversion rates

• Continue tracking per capita disposal rate in pounds per person per day to verify accuracy and monitor improvement

PUBLIC WORKS |

SUSTAINABILITY: WATERSHED PROTECTION

Operating Expenses

Account: 5215110

ABOUT

Fund: Enterprise

This budget supports leadership and stewardship of the city’s resources, including our creeks, lagoons and ocean, through the Watershed Protection Division’s coordination of the citywide protection program. The division also helps the city maintain compliance with the National Pollutant Discharge Elimination System Municipal Stormwater Permit issued by the San Diego Regional Water Quality Control Board a regional permit that covers 39 copermittees from municipal, county government and special district entities who own and operate large storm drain systems that discharge water runoff to surface waters throughout the region. The Municipal Stormwater Permit covers eleven watershed management areas in the region, including the Carlsbad Watershed area.

SERVICES

• Act as the Principal Copermittee in the Carlsbad Watershed management area, serving as a liaison with the Regional Board, ensuring submittal of annual reports and participating in the planning committee

• Represent the city at meetings with the California Environmental Protection Agency, Regional Board, copermittees, environmental nonprofit groups and other stakeholders

• Assess businesses to ensure proper pollution prevention, prevent discharges into the storm drain system, and protect receiving waters, which may require follow-up visits, targeted education or enforcement

• Identify and eliminate illicit water discharges into the storm drain system as required by the Municipal Stormwater Permit, including responding to and investigating complaints, performing field screening at major outfalls and managing a public hotline

• Oversee the city’s implementation of statewide Trash Amendments, to comply with the State Water Resources Control Board’s Trash Provisions and reduce pollution in state waters

RECENT ACCOMPLISHMENTS

• Managed the contract for a coordinator to assist with updating and implementing the Water Quality Improvement Plan for the Carlsbad Watershed management area, which will optimize its compliance with the Municipal Stormwater Permit

• Submitted the Carlsbad Watershed Water Quality Improvement Plan and the Jurisdictional Runoff Management Program Annual Reports to the Regional Board

• Worked interdepartmentally to implement state mandated trash control measures to keep trash out of the storm drain system and downstream waterbodies

• Hosted volunteer cleanup sites and provided other outreach and education activities within the city and regionally

• Completed all state-mandated water quality monitoring and annual stormwater inspections

GOALS

• Implement a monitoring program to evaluate storm drain system discharges, including water quality monitoring, sediment quality monitoring and other studies

• Create a public outreach program to promote behavior changes that reduce the discharge of pollutants into the storm drain system and protect water quality in the receiving waters

• Implement all required strategies and numeric goals of the Water Quality Improvement Plan

• Utilize innovative approaches to execute the city’s Jurisdictional Runoff Management Program alongside the Carlsbad Watershed Water Quality Improvement Plan and submit reports to the Regional Board

• Prepare for implementation of the revised Municipal Stormwater Permit which will include new requirements to control trash

• Conduct all annual inspections of existing development and water quality monitoring required by the Municipal Stormwater Permit

• Respond to at least 90% of illicit discharge emergencies within 45 minutes and detect and eliminate 100% of illicit discharges

of emergency response times under 45 minutes

F LEET & F ACILITIES

PUBLIC WORKS | FLEET & FACILITIES: SUMMARY

PUBLIC WORKS | FLEET & FACILITIES: FACILITIES

Account: 0015310 0015320 3155110

ABOUT

Fund: General Special Revenue-Parking in Lieu

The Facilities Division provides safe and comfortable working spaces at city facilities and maintains quality indoor public spaces. Additionally, this division oversees the design and construction work for new city facilities and building renovation projects and operates the Safety Training Center.

SERVICES

• Maintain city-owned facilities including building exteriors, interiors, cleaning and custodial services, as well as set-up of offices and meeting rooms

• Provide building construction, improvements, renovations, repairs and relocation

• Operate the Safety Training Center for public safety personnel training as well as provide leasing and rental opportunities to federal, state and local agencies and programs

RECENT ACCOMPLISHMENTS

• Established the framework to develop a facility asset management program with data collected in a recently completed citywide facility condition assessment

• Completed 1,731 facilities service requests submitted via the city’s work order management system

• Began using the city’s developing asset management program to develop preventative maintenance procedures for various building systems

• Completed construction work for all phases of the Police & Fire Headquarters renovation project including the Emergency Operations Center renovation

• Awarded a contract and commenced construction of the Monroe Street Pool Replacement project

• Completed the Alga Norte Aquatic Center family restroom renovation project

• Awarded a contract and began construction of the Fleet Fuel Island Upgrade project

• Completed the Schulman Auditorium renovation project upgrading the audiovisual systems

• Finished construction of the Senior Center roof replacement project and the Calavera Hills Community Center refurbishment project

• Received a project award from the San Diego Section of the American Society of Civil Engineers for Outstanding Small Project for construction of Temporary Fire Station 7

• Supported 53 training days for 12 outside agency leases at the Safety Training Center generating $45,000 in revenue through April 2025.

• Recycled 2,284 pounds of brass shell casings, 4,586 pounds of lead and copper from indoor shooting range activities and 5,627 pounds of scrap metal

GOALS

• Continue to monitor building maintenance costs per square foot with the goal of limiting cost increases to annual CPI; benchmark costs per square foot are from the International Facilities Maintenance Association’s Benchmark Report for 2022 adjusted by CPI

• Develop a comprehensive city facility electrical inspection and maintenance program

• Explore opportunities for projects to promote sustainable energy use and production

• Complete construction of the State Street Parking Lot Electric Vehicle Charging project

• Commence construction of the Fleet Maintenance Refurbishment project

• Complete the design work for the Orion Center project and obtain building permit ready plans, specifications and contract documents

• Complete construction work for the Fleet Fuel Island Upgrade project

PUBLIC WORKS |

& FACILITIES: FLEET MAINTENANCE & REPLACEMENT

Account: 6205460 6215461 Fund: Vehicle Maintenance Fund Vehicle Replacement Fund

ABOUT

The city’s fleet consists of 490 vehicles and equipment necessary to achieve the city’s mission of delivering quality and efficient services safely, affordably and in compliance with all regulations.

The fleet maintenance program funds labor, parts, services, fuel and oil necessary to maintain the city’s fleet of vehicles and equipment. The fleet maintenance program is funded through charges to departments based on vehicle type and utilization.

The fleet vehicle replacement program is funded through a replacement charge to departments for each vehicle or equipment in service This program funds asset replacement and vehicle outfitting. Cost-effective vehicle procurement is achieved through cooperative purchasing agreements and bidding processes. Revenue is collected from the sale of retired city fleet assets at auction and used to offset future costs within respective departments.

SERVICES

• Provide safe, appropriately managed and maintained vehicles for use by city staff, inspect vehicles per requirements of the biennial inspection of terminals and smog programs and maintain 24/7 road call services for emergency vehicles

• Provide reliable, cost-effective fuel management by maintaining sufficient fuel supplies for emergencies and monitoring fuel tanks in accordance with state and county regulations

• Evaluate the city fleet annually to identify units eligible for replacement or reduction in accordance with Administrative Order 3

• Advise on development of specifications for the purchase of replacement units that satisfy client department requirements while optimizing life cycle return on investment in alignment with the Climate Action Plan

• Purchase replacement units and identify opportunities to increase fleet electrification and electric vehicle charging infrastructure

RECENT ACCOMPLISHMENTS

• Achieved recognition from the National Association of Fleet Managers, ranking as the 8th best public fleet in the nation in 2024

• Implemented GPS vehicle telematics program for city vehicles

• Increased inventory of low-emission vehicles from 96 vehicles last year to 106 vehicles

• Activated 32 new vehicles and equipment and received $70,000 in revenue for the sale of two retired ambulances in fiscal year 2024-25

• Received conditional award of $500k in grant funding to complete Phase 3 installations of DC Fast Charging at Fleet Depot

GOALS

• Transition all passenger fleet vehicle purchases to electric vehicles, except for public safety vehicle purchases which will be electric where feasible in compliance with the updated Climate Action Plan and the Strategic Plan

• Assess and improve fleet data management techniques and analytical processes for enhanced city reporting capabilities

• Increase low- and zero-emission vehicle miles traveled, or VMT, to 40% of total annual fleet VMT or 1,000,000 miles

SIGNIFI C ANT CHANGES IN THIS YEAR’S BUDGET

Fleet & Facilities added .25 FTE, converting the Administrative Secretary position from a threequarter time position to a full-time position. Additionally, the Fleet Services Division is adding one full-time Equipment Technician.

PUBLIC WORKS | TRANSPORTATION : SUMMARY

TRANSPORTATION

• Storm Drain Maintenance & Engineering

• Traffic, Mobility, Transportation Engineering & Streets Maintenance

• Buena Vista Channel, Lighting & Landscaping Districts

PUBLIC WORKS |

STORM DRAIN MAINTENANCE & ENGINEERING

Account: 0016310 5216310 Fund: General Enterprise-Storm Drain Maintenance

ABOUT

The Transportation Storm Drain Maintenance & Engineering divisions are responsible for maintaining and improving the city’s storm drain infrastructure.

SERVICES

• Address various drainage infrastructure and stormwater maintenance issues citywide

• Develop plans, specifications and estimates and provide project or design management of projects involving storm drain assets

• Optimize maintenance efforts by monitoring and addressing new and ongoing drainage issues

• Perform inspections and maintenance of the storm drain system

RECENT ACCOMPLISHMENTS

• Completed emergency work in the concrete channel area for the Buena Vista Channel Emergency Clearing and Debris Removal Project and on the Trieste Slope Restoration Project

• Finished construction of Park Drive Drainage and Street Improvement project

• Completed annual vegetation clearing and trash removal of the Buena Vista Creek Channel Maintenance District project

• Concluded vegetation clearing for channel maintenance in the Agua Hedionda Creek between the bridges of Cannon Road and El Camino Real as approved by the California Department of Fish and Wildlife

• Applied to the California Department of Fish and Wildlife for a new streambed alteration agreement for vegetation clearing and maintenance in the Agua Hedionda Creek between the bridges of Cannon Road and El Camino Real

• Obtained emergency permits from regulatory agencies and initiated construction phase for emergency repair of the channel adjacent to Kelly Drive

• Cleaned out portions of the Kelly Channel

• Completed construction of the Kelly Channel embankment emergency repair project

• Carried out testing of the street-sweeping debris to ensure compliance with regulatory requirements

GOALS

• Complete the engineering and environmental phase and initiate the construction phase for multiple storm drain repair projects, including Highland-Hoover, corrugated metal pipe replacements and Carlsbad Boulevard and Juniper Avenue storm drain repair

• Obtain a new streambed alteration agreement from the California Department of Fish and Wildlife and complete triannual vegetation cutting and trash/debris removal at the Agua Hedionda Creek between the bridges of Cannon Road and El Camino Real

• Complete channel maintenance and prepare the annual report detailing vegetation cutting and debris removal for the Buena Vista Creek Channel Maintenance District project

• Finalize the Drainage Master Plan update

• Complete all annual inspections and manage high-priority cleanings

Curb mile of streets swept to mitigate debris per month

Tons of debris removed from city streets from street sweeping

Percentage of Agua Hedionda Lagoon channels cleaned

SIGNIFI C ANT CHANGES IN THIS YEAR’S BUDGET

Quality of Life & Safety

Quality of Life & Safety

Sustainability & the Natural Environment

Two significant changes include the $650,000 increase to the street sweeping contract, reflecting rising service costs, and a $2 million increase in the revenue budget for a General Fund transfer. The latter is to help cover storm drain expenses while a cost study is being completed

PUBLIC WORKS |

TRAFFIC , MOBILITY , TRANSPORTATION ENGINEERING & STREETS MAINTENANCE

Personnel Services

Salaries & Wages $3,282,209$3,262,366$3,568,906$3,725,379 Retirement Benefits 823,941757,370909,235975,948 Health Insurance 511,235525,527652,388644,312 Other

Operating Expenses

TOTAL EXPENDITURES $9,642,846$9,014,336$10,332,167$11,568,005

Account: 0018410 00186XX 00187XX Fund: General

ABOUT

Traffic, Mobility, Transportation Engineering & Streets Maintenance divisions maintain and improve the road infrastructure and keep people moving. They are responsible for enhancing mobility and safety citywide through ongoing transportation planning, streets and traffic engineering, streets maintenance and signal operations activities

SERVICES

• Plan traffic needs, review development projects, and manage traffic signals and engineering

• Address public concerns, study traffic issues, and make safety improvements

• Maintain streets, including signs, markings, graffiti removal, trash pickup, and repairs to potholes and sidewalks

RECENT ACCOMPLISHMENTS

• Completed traffic calming improvements for Park Drive, Black Rail Road, Plum Tree Road and Carrillo Way to slow traffic and enhance safety

• Completed the first phase of the Village parking study to identify opportunities to increase on-street parking

• Developed Safe Routes to School plans for Hope and Jefferson Elementary schools and Sage Creek High School to improve walking and biking safety for students

• Awarded contracts for El Camino Real Widening from Sunny Creek Road to Jackspar Drive project, Beach Access Repair and Upgrades from Pine to Tamarack and Village and Barrio Traffic Circles projects

• Completed the 2023 Slurry Seal project, covering 38 miles of city streets, Park Drive Street and Drainage Improvements, and Kelly Drive Channel Emergency Repair projects.

• Repainted all-direction crosswalks at Carlsbad Village Drive and Grand Avenue

• Replaced 21,903 square feet of asphalt in the city right-of-way and approximately 3,500 square feet of concrete sidewalks, year-to-date

• Completed over 16,000 utility mark-outs and 1,000 striping work orders and addressed 500 graffiti locations and replaced 300 street signs

GOALS

• Finalize Carlsbad Residential Traffic Management Program update and initiate second phase of Carlsbad Residential Traffic Management Program on key streets

• Complete design of Faraday Avenue improvements for future Veterans Memorial Park Project and Paseo Del Norte Pedestrian and Bike Improvements Project

• Complete the second phase of the Village parking study to increase on-street parking.

• Develop scope for School Traffic Safety Improvements and identify additional schools to develop a Safe Routes to School Plan for FY 2025-26

• Complete Drainage Master Plan update and drainage improvements at various locations.

• Complete construction of the El Camino Real Widening from Sunny Creek Road to Jackspar Drive, Barrio Traffic Circles, 2025 Concrete Repair, 2025 Resurfacing, 2024 Sidewalk Construction, and 2024 American with Disabilities Improvement projects

• Start construction of El Camino Real Widening from Poinsettia Lane to Camino Vida Roble

• Complete design and initiate construction of the Barrio lighting project

• Start construction of Beach Access Repair and Upgrades project from Pine to Tamarack

• Identify new potential trip hazards and address the needed repair work citywide

Related Strategic Plan Goal

N/A; consistent with staff capacity Quality of Life & Safety

BUENA VISTA CHANNEL, LIGHTING & LANDSCAPING DISTRICTS

Special Revenue- Street Light Maintenance Special Revenue-Buena Vista Channel Special Revenue-LLD 2

ABOUT

The Transportation Engineering Division provides oversight of the Buena Vista Creek Channel Maintenance Assessment District, which funds costs for the maintenance of the Buena Vista Creek Channel drainage system from Jefferson Street east to the South Vista Way bridge The Transportation Department also provides oversight of the Lighting & Landscaping District 2 and Street Light Maintenance funds, which provide maintenance of streetlights, decorative lighting, street trees and medians within the district boundaries covering newer developments in the city

SERVICES

• Maintain the Buena Vista Creek Channel from Jefferson Street east to the South Vista Way bridge

• Maintain and repair streetlamps and decorative lighting

RECENT ACCOMPLISHMENTS

• Developed a

GOALS

• Complete all annual inspections and manage high-priority channel cleanings

• Replace all aging streetlight fixtures with new and more energy-efficient LED fixtures

Performance Measure

FY 2024 Actual FY 2025 Estimated FY 2026 Projected Benchmark Related Strategic Plan Goal

Citywide Streetlight Replacement Program Audit and bid of Phase 2 complete Phase 2 program completed Initiate Phase 3 and Phase 4 planning 100% Quality of Life & Safety

Percentage of Buena Vista Creek Channel cleaned and reported for permitting (equivalent to 20% of district annually)

Sustainability & the Natural Environment

UTILITIES

• Potable Water Operations

• Recycled Water Operations

• Wastewater Operations

PUBLIC WORKS | UTILITIES: SUMMARY

ABOUT

PUBLIC WORKS | UTILITIES: POTABLE WATER OPERATIONS

Account: 5016310

Fund: Enterprise

To ensure safe, high-quality drinking water is available to Carlsbad Municipal Water District customers on-demand, the district provides ongoing operation and maintenance of the following: nine storage reservoirs or tanks, 457 miles of pipeline, 17 pressure zones, 71 pressure regulating stations, three pumping stations, approximately 14,300 valves, 4,500 fire hydrants and 29,500 potable meters. The district purchases potable water from its wholesale water provider, the San Diego County Water Authority, which includes desalinated water from the Carlsbad Desalination Plant. The district implements a water asset management plan to minimize the total cost of owning and operating utility assets while continuing to deliver high levels of service at acceptable levels of risk.

SERVICES

• Deliver reliable, safe drinking water and fire flow demand

• Operate and maintain reservoirs, pressure regulating stations, pump stations, transmission and distribution pipelines, valves, meters and other appurtenances

• Comply with all water-related health, safety and environmental regulations including state and federal drinking water standards for water quality sampling and reporting

• Implement effective water conservation and rebate programs, including public education, leak detection studies, leak repair and compliance with conservation laws

• Work with other water agencies and the San Diego County Water Authority on regional water-related projects and budgets

RECENT ACCOMPLISHMENTS

• Protected the potable water supply by testing approximately 285 city backflow devices and conducting 160 cross-connection tests

• Awarded a contract to replace broken or malfunctioning valves at 26 operationally critical locations to control flow and minimize disruption of service during shutdowns

• Completed construction of two pressure regulating stations in El Fuerte Street, one at Melrose Drive and Poinsettia Lane and abandonment of one station on Palomar Airport Road

• Completed the replacement of potable water distribution mains at the McClellan-Palomar Airport and on Valley Street between Andrea Avenue and Magnolia Avenue

• Began construction of the Carlsbad Boulevard at Terramar water main line replacements

• Initiated the update to the 2019 Potable Water Master Plan to evaluate the water distribution system and inform operational modifications for better system performance, reliability and redundancy and to identify system capacity needs for future growth

• Provided maintenance on over 180 fire hydrants in the Vallecitos Water District service area within City of Carlsbad limits as part of a recent agreement, which is funded in Public Works Administration

GOALS

• Minimize costs to customers while continuing to provide high levels of service at acceptable risk and meet all state and federal water quality standards for safe drinking water

• Optimize asset management by increasing the use of technology to improve and manage the infrastructure system more efficiently and effectively

• Initiate an update of the 2020 Risk and Resilience Assessment as required by the Environmental Protection Agency

• Update the 2020 Urban Water Management Plan per state regulations

• Implement new regulations for water use efficiency standards issued by the Department of Water Resources and the State Water Resources Control Board

• Proactively conduct leak detection surveys to identify where pipeline repairs may be needed

• Update the 2019 Utilities Asset Management Master Plan to verify program budgets and to evaluate future infrastructure rehabilitation and replacement needs

• Complete construction of motorized valve installations at the Maerkle Reservoir site and in El Fuerte Street at Rancho Pancho

• Finalize the replacement of a potable water distribution main beneath the North County Transit District rail corridor, north of Avenida Encinas in the Ponto area

• Stay within the industry benchmark for water main breaks of 3.4 to 19.4 breaks per 100 miles of pipeline, or less, per the American Water Works Association

Performance Measure

Pipeline breaks per 100 miles of pipe

SIGNIFICANT CHANGES TO THIS YEAR’S BUDGET

Strategic Plan Goal

3.4-19.4 Quality of Life & Safety

Quality of Life & Safety

The budget to purchase potable water for delivery in the district’s service area increased by nearly $5.9 million to account for San Diego County Water Authority anticipated rate increases

PUBLIC WORKS | UTILITIES: RECYCLED WATER OPERATIONS

Services

Account: 5026310 Fund: Enterprise

ABOUT

The Carlsbad Municipal Water District owns the Carlsbad Water Recycling Facility located next to the Encina Wastewater Authority treatment plant. The district takes treated wastewater from that plant and further treats it to the State of California Title 22 recycled water quality standards and then delivers this water to customers for irrigation and certain industrial uses. This effort reduces the amount of wastewater that would normally be released by the wastewater treatment plant into the ocean outfall, reduces dependence on imported drinking water, and provides customers with a reliable local water supply for non-potable purposes. Recycled water is not subject to state water conservation requirements. The district implements a recycled water asset management plan to minimize the total cost of owning and operating utility assets while continuing to deliver high levels of service at acceptable levels of risk.

Delivery of this water includes the operation and maintenance of the recycled water system’s four storage tanks, four pump stations, three pressure regulating stations, six pressure zones, approximately 97 miles of pipelines, 1,050 valves and 1,010 meters. The district’s cross-connection control and backflow program ensures a safe supply of drinking water by preventing cross-contamination from the recycled system into the potable system, in accordance with federal and state regulations. The district also purchases and delivers recycled water from the Vallecitos Water District’s Meadowlark Water Reclamation Facility.

SERVICES

• Operate and maintain infrastructure, including the Carlsbad Water Recycling Facility, reservoirs, pressure regulating stations, pump stations, pipelines, valves and meters

• Treat wastewater to meet State of California Title 22 recycled water requirements

• Deliver recycled water for irrigation and some industrial uses via the recycled water system

• Perform inspections on systems and backflows to prevent cross-connections and protect the potable water system

• Convert irrigation sites from potable water to recycled water as service becomes available

RECENT ACCOMPLISHMENTS

• Performed inspections at all recycled water use sites to inform site operators of any modifications needed to comply with guidelines for the safe use of recycled water

• Completed construction of a new 1.5-million-gallon recycled water tank

• Updated the cost of service study for recycled water to forecast financial needs and inform rate adjustments

• Completed recycled tank inspections and cleaning to proactively maintain system assets on a regular five-year cycle

• Finished construction of the roof replacement project at the Carlsbad Water Recycling Facility to extend the life of system facilities

• Updated the Memorandum of Understanding with the Encina Wastewater Authority for operation of the Carlsbad Water Recycling Facility

GOALS

• Stay within the industry benchmark for water main breaks of 3.4 to 19.4 breaks per 100 miles of pipeline, per the American Water Works Association, or less

• Update the 2019 Utilities Asset Management Master Plan to verify program budgets and to evaluate future infrastructure rehabilitation and replacement needs

• Maintain recycled water cost at or below 75% of potable water irrigation cost to encourage the use of recycled water

• Negotiate a new agreement for purchase of recycled water from Vallecitos Water District

Performance Measure

Pipeline breaks per 100 miles of pipe

Cost of recycled water as a percent of potable water cost

SIGNIFICANT CHANGES TO THIS YEAR’S BUDGET

75%

Related Strategic Plan Goal

Quality of Life & Safety

Organizational Excellence & Fiscal Health

The overall budget increase is due to a one-time budgeted transfer from the Recycled Water Operating Fund to the Recycled Water Connection Fund of $16.4 million. This is related to a State Water Resources Control Board loan reaching the payback period, whereby the Recycled Water Operating Fund will begin repayment while the proceeds of the loan will remain in the associated capital fund. The budget includes an increase of approximately $1.1 million to cover the cost increase anticipated under the new draft agreement between the district and Vallecitos Water District to purchase recycled water.

Expenses

PUBLIC WORKS | UTILITIES: WASTEWATER OPERATIONS

Account: 5116310

ABOUT

Fund: Enterprise

The Utilities Department is responsible for providing wastewater services to approximately 85,000 customers within the city’s service area. The Utilities wastewater mission is to prevent sewer spills and convey waste efficiently to the Encina Wastewater Authority’s treatment plant by properly managing, operating and maintaining all parts of the city’s sewer system. A portion of Carlsbad’s treated wastewater is diverted from the ocean outfall and sent to the Carlsbad Water Recycling Facility for further treatment.

The Wastewater Division maintains a sanitary sewage collection system that includes 11 wastewater lift stations and wet wells and about 270 miles of gravity main lines, six miles of pressurized main lines and approximately 6,200 sewer access holes The Utilities Department implements a robust wastewater asset management program to minimize the total cost of owning and operating utility assets while continuing to deliver high levels of service at acceptable levels of risk.

SERVICES

• Operate and maintain infrastructure such as lift stations, wet wells, gravity sewer mains, force mains, maintenance access holes and other elements

• Collect wastewater and convey it to the Encina Wastewater Authority treatment plant

• Conduct closed-circuit camera reviews of pipelines to determine pipeline integrity

• Participate in the activities and budgets of the Encina Wastewater Authority as part of the Encina Joint Powers Authority

• Prevent wastewater spills to protect the environment

• Administer the city’s Fats, Oils and Grease program to prevent pipeline clogs and subsequent wastewater spills

• Conduct public outreach regarding what can go into drains to prevent spills and other issues

RECENT ACCOMPLISHMENTS

• Updated the cost of service study for wastewater to forecast financial needs and inform rate adjustments

• Performed an audit of the city’s Sewer System Management Plan to assess compliance with the Waste Discharge Requirements of San Diego Regional Water Quality Control Board

General Order WQ 2022-0103-DWQ

• Completed sewer pipe replacement project in Foxtail Loop

• Began construction of the Carlsbad Boulevard and Terramar sewer pipeline replacements

• Initiated the update of the 2019 Sewer Master Plan to evaluate the wastewater collection system and inform operational modifications for better system performance, reliability and redundancy and to identify system capacity needs for future growth

GOALS

• Update the 2019 Utilities Asset Management Master Plan to verify program budgets and to evaluate future infrastructure rehabilitation and replacement needs

• Minimize costs to customers while maintaining high levels of service at acceptable risk

• Optimize asset management by increasing the use of technology to improve and manage the infrastructure system more efficiently and effectively

• Complete the generator replacement project at Chinquapin Lift Station for system reliability where the existing generator has met the end of its useful life

• Continue construction of the Carlsbad Boulevard and Terramar sewer pipeline replacements

• Initiate the design of upgrades at Poinsettia and Cannon lift stations

• Complete the rehabilitation of sewer access holes in the North County Transit District rail corridor near the Poinsettia rail station

• Complete design and begin construction of the Poinsettia Lane sewer main replacement project

COMMUNITY SERVICES

The Community Services Branch includes programs, services and events that support Carlsbad's excellent quality of life. The branch includes the following key areas of focus:

• Community Service Administration

• Community Development

• Housing & Homeless Services

• Library & Cultural Arts

• Parks & Recreation

These city service areas ensure the city’s planning and building policies are carried out, foster lifelong learning, support strong neighborhoods, administer affordable housing and homeless response programs, attend to the community’s health and wellness, and promote transparency in government.

Gary Barberio

Deputy City Manager, Community Services

442-339-2822 gary.barberio@carlsbadca.gov

Operating Expenses

COMMUNITY SERVICES | ADMINISTRATION

Account: 0012410 Fund: General

ABOUT

The Community Services Branch provides programs and services that promote and support Carlsbad’s excellent quality of life. Community Services Administration provides leadership to the Community Services Branch and provides oversight and management of the city’s real estate assets.

SERVICES

Functional areas include department management, budget oversight and real estate services. The Community Services Branch ensures that the city’s planning, land development engineering, building and code enforcement policies are carried out; that affordable housing and homelessness programs are administered; that lifelong learning is fostered; that library and cultural arts services are delivered ; that the city’s health and wellness are advanced through parks, recreation, and senior services; and that the city’s real estate assets are well managed.

RECENT ACCOMPLISHMENTS

• Obtained City Council approval for the Agreement between the city, SDG&E, and NRG Energy (owner of the former Encina Power Station land), that will provide

acres

land to the city, along with other community benefits

• Initiated City Council-directed negotiations for a loan agreement and lease amendment with New Village Arts, the city’s tenant in the Bauer Lumber building on State Street

• Entered into a lease agreement to bring back food concession services at Alga Norte Pool and Park

• Integrated the ability to apply for right-of-way permits on-line, through the Customer Self Service Portal

• Implemented new regulations prohibiting smoking in multi-family dwellings

• Instituted new regulations for new or expanded airport land uses

• Comprehensively updated the short-term vacation rental regulations

• Acquired four at-risk affordable units and resold nine at-risk affordable units to qualified low-income buyers this fiscal year as a part of the city’s Affordable Housing Resale Program

• Secured and implemented an $11.4 million grant to address homeless encampments along the SR-78 corridor and secured a $3 million grant for addressing vehicle homelessness

• Provided monthly rental assistance to 635 very-low and low-income households, representing an increase of 6.5% from the previous year

• Re-opened the Dove and Cole libraries for Sunday hours effective May 18, 2025

• Presented nine TGIF Concerts in the Park with implementation of new security measures

• Completed audiovisual upgrades at the Schulman Auditorium

• Initiated construction for the Monroe Street Pool Renovation project

• Finished construction of a community garden at Stagecoach Community Park

• Completed construction on the Alga Norte Pool replastering and restroom remodel project

• Negotiated and implemented a new agreement with a new vendor, Meals on Wheels, for senior nutrition services

GOALS

• Complete update to the city’s Real Estate Strategic Plan

• Prepare Engineering Design Standards for private development projects

• Develop regulations for temporary uses on public and private property

• Revise City Council Policy 64, regulated wireless communication facilities

• Update the city’s Building Code by Jan. 1, 2026

• Implement a $3 million grant to address vehicular homelessness

• Update the calendar year 2026 Public Housing Agency Annual Plan

• Complete a $600,000 upgrade to the city libraries RFID hardware and software

• Finish public art installation projects for the Chestnut I-5 Underpass and the Barrio Traffic Circles projects

• Initiate construction of new pickleball courts at Calavera and Stagecoach Community Parks

• Plant 500 trees to expand the city’s tree inventory

COMMUNITY SERVICES | COMMUNITY DEVELOPMENT: SUMMARY

COMMUNITY DEVELOPMENT

• Administration

• Land Development Engineering

• Planning

• Building

• Code Enforcement

COMMUNITY SERVICES | COMMUNITY DEVELOPMENT: ADMINISTRATION

Operating Expenses

Account: 0013010 Fund: General

ABOUT

Community Development Administration provides leadership, financial assistance and administrative support for the delivery of land development programs and services; plans for the efficient use of resources and facilities; and provides liaison services, resource assistance and technical guidance to the Historic Preservation Commission, Planning Commission and City Council. Community Development Administration adds value to organizational processes and procedures to ensure best practices are implemented and that they support the broader goals of the organization.

SERVICES

• Provide organizational leadership and administrative support

• Manage and oversee operating budget

• Coordinate contract administration and records

• Support the department’s business systems and technology

RECENT ACCOMPLISHMENTS

• Expanded the Customer Self Service Portal allowing customers to apply for more online permits including Short-Term Vacation Rental, Residential & Commercial-Electric Vehicle Charger, Commercial-Plumbing/Mechanical/Electrical,

Re-Roof, Right -of-Way minor, Preliminary Review and Private Property permits

• Evaluated hardware for an Electronic Review Pilot Program and received Bluebeam software and training to allow for improved plan review and plan check

• Posted new electronic bulletins and updated other electronic bulletins on the city’s website to help the public understand complex and evolving land use issues

• Expanded system emails to better inform and update customers during the development process, including new planning land use submittals and planning sign permits

• Updated the Community Development Department webpage with new content forms and improved organization and resources, including new single source permit center

• Improved GIS map content regarding Coastal Zone jurisdiction information

GOALS

• Expand the use of the Citizens Access Portal to allow for the online submittal and review of more complex permit types

• Continue updating webpage content so information remains relevant and reflects process changes

• Collaborate with the Information Technology Department to complete the Bluebeam Pilot Program as the city prepares for the transition to electronic plan review; the next phase includes full city-wide deployment of hardware (i.e., large screen monitors) to all city reviewers, and Bluebeam software and staff training in summer 2025

• Work toward a paperless plan check and review process, including continued Bluebeam software training, business process changes to the customer application process and digitization of staff comments and corrections

• Continue to identify and implement process improvements that help simplify and streamline permit intake, routing and customer service delivery and interactions

COMMUNITY SERVICES | COMMUNITY DEVELOPMENT: LAND DEVELOPMENT ENGINEERING

Operating Expenses

Account: 0013110 0013120

ABOUT

Fund: General

The Land Development Engineering Division ensures that all grading and public improvements required for new development projects and work in the public right-of-way comply with adopted codes and engineering standards.

SERVICES

• Review and process requests to subdivide land

• Perform plan checking and permitting for grading and public improvements projects

• Conduct flood plain administration and residential assistance

• Maintain the engineering section of the public counter

• Provide customer service and effective public information

RECENT ACCOMPLISHMENTS

• Implemented right-of-way permits in the Customer Self Service Portal, which previously could only be completed by city staff

• Updated and simplified all submittal checklists for new applications

• Issued 1,109 engineering permits and performed 2,680 reviews for ministerial and discretionary permits, consistent with level of activity in recent years

GOALS

• Update the city’s Engineering Standards to include design standards for private development projects

• Implement processing changes to streamline permit reviews to consistently meet key performance targets

• Expand implementation of the Customer Self Service Portal to allow processing of additional permit types, such as right-of-way permits

• Continue to refine procedures and adopt new technology to enhance the customer experience

• Complete discretionary permit plan check reviews within 21 days of submittal and building permit plan check reviews within 14 days of submittal, at least 80% of the time Performance Measure

Related Strategic Plan Goal

of discretionary permit plan check reviews completed within 21 days of submittal

Organizational Excellence & Fiscal Health Percentage of building permit plan check reviews completed within 14 days of submittal

Organizational Excellence & Fiscal Health

COMMUNITY SERVICES | COMMUNITY DEVELOPMENT: PLANNING

ABOUT

The Planning Division is responsible for developing, updating and maintaining the city’s land use regulations (i.e., General Plan, Local Coastal Program and Zoning Ordinance) pursuant to City Council direction and state mandates, as well as ensuring new growth and development complies with those established regulations.

SERVICES

• Maintain and modify plans, ordinances and policies for housing and local coastal resource plans

• Ensure new development adheres to all applicable land use codes, policies and regulations

• Ensure private and public projects comply with the California Environmental Quality Act and the city’s environmental protection procedures

• Respond to questions and inquiries related to permit processing and development standards

• Provide technical support to the Planning Commission and the City Council

• Continuously enhance permit review process for efficiencies and streamlining of processes

RECENT ACCOMPLISHMENTS

• Approved discretionary permits for several housing projects resulting in a total of about 230 new housing units that contribute to the implementation of the city’s Housing Element

• Updated the zoning code ordinance to address longstanding errors, code inconsistencies and memorialize longstanding policies

• Received City Council approval of the Annual Housing Element & General Plan Progress Report prior to the state deadline, an important requirement under state housing law

• Implemented new regulations prohibiting smoking in multi-family homes

• Introduced new regulations and permit review procedures for new or expanded airport land uses

• Implemented the plan for Carlsbad Tomorrow: Growth Management Citizens Committee recommendations on the city’s Growth Management Plan

• Provided a comprehensive update to City Council Policy 84, which established additional requirements designed to maximize public awareness and involvement on private development projects

• Revised Chapter 19.04 of the Carlsbad Municipal Code requiring exemptions to the California Environmental Quality Act be considered and approved by the decision-making authority responsible for deciding on the project and not exclusively by the City Planner

• Presented the City Council with varying options to regulate drive-thru restaurants

GOALS

• Continue implementation of the 2021-2029 Housing Element program objectives and tasks

• Develop regulations and permit processes to allow temporary uses on private property

• Create improved standards for growth forecasting and projections

• Present options to update City Council Policy 64 related to the location and screening of telecommunication facilities

• Continue implementing the recommendations from the Carlsbad Tomorrow: Growth Management Citizens Committee as directed by the City Council

• Obtain direction from the City Council regarding the city’s comprehensive update to its Local Coastal Program that was approved by the City Council in late 2021

• Ensure discretionary plan check reviews are completed within 30 days of submittal, at least 90% of the time

• Ensure building permit plan check reviews are completed within 14 days of submittal, at least 80% of the time

COMMUNITY SERVICES | COMMUNITY DEVELOPMENT: BUILDING

Account: 0013610 Fund: General

ABOUT

The Building Division staff are the main point of contact for individuals wanting to build or modify a structure on their property. Building staff provide guidance and review projects for conformance with state and local building standards. Once a permit has been issued to authorize construction, a building inspector is assigned to help the property owner ensure that the contractor’s work is consistent with approved plans.

SERVICES

• Conduct fee assessment, plan review, permit issuance and inspection for compliance with state and local codes including recycling, stormwater, energy generation and conservation

• Respond to questions and inquiries related to permit processing and construction standards

• Provide information related to ongoing construction projects and historical building records

• Maintain records during construction and prepare files for electronic conversion following final approval

RECENT ACCOMPLISHMENTS

• Issued 5,691 building permits valued at

higher than fiscal year 2023

• Conducted 16,846 building inspections in fiscal year 2024

• Expanded the Customer Self Service Portal to include more permit submission types

• Implemented and expanded digital inspection program for solar photovoltaic (PV) installations to include battery storage and electric vehicle charging since more residents are increasingly pairing these improvements to capture and use electricity in different ways

• Reduced the division’s carbon footprint by moving to an all-electric inspection truck

• Earned five certifications from the International Code Council an organization that develops construction and public safety codes for the city’s building inspection team, which demonstrates clear understanding and qualification to inspect certain types of construction or buildings

GOALS

• Update the city’s building code by January 1, 2026 to comply with the 2026 California Building Code

• Continue to identify and implement process improvements that help simplify and streamline development permit intake, routing and customer service interactions

• Develop a procedural manual to serve as both a training guide and operations resource guide for building and counter technicians

• Ensure building plan check review is completed within 14 days of submittal, at least 80% of the time

• Ensure building permit inspections occur within 24 hours of request, at least 80% of the time

of building inspections completed within 24 hours of request

COMMUNITY SERVICES | COMMUNITY DEVELOPMENT: CODE ENFORCEMENT

Operating Expenses

Account: 0013620 Fund: General

ABOUT

The Code Enforcement Division, working with residents and its partner enforcement agencies, is tasked with enforcing the city’s laws that govern land use and quality of life issues, including public nuisances, safety and welfare. The purpose of these laws and their enforcement is to help maintain safe and healthy living and working conditions for the members of the community. The division’s approach is not to be punitive but to first attempt to achieve compliance through education before more formal enforcement methods like citations are applied.

SERVICES

• Enforce zoning, building, general property maintenance and other municipal codes

• Conduct inspections of alleged violations received from resident and business complaints

• Proactively enforce violations, including graffiti, signs, active unpermitted construction

• Assist individuals on how to secure required permits and obtain compliance with applicable codes

• Collaborate with partner enforcement agencies on overlapping enforcement cases

• Ensure that residents are aware and follow rules on short-term vacation rentals

• Conduct annual inspections for the California Department of Housing and Community Development Mobile Home Park Maintenance Program

RECENT ACCOMPLISHMENTS

• Updated the short-term vacation rental permitting process to allow online permit processing, implemented a new permit fee, and created an interactive map showing the location of all permitted short-term vacation rentals

• Brought approximately 650 expired business licenses successfully into compliance

• Removed roughly 2,480 illegal signs from the public right-of-way

• Improved case assignment processes to better achieve targeted key performance measures

• Obtained code enforcement officer certification through the California Association of Code Enforcement Officers across all of the division’s full-time code enforcement officers and its manager, a first for the department

GOALS

• Have at least two code enforcement officers to complete the PC832 course, which includes enhanced legal understanding, improved safety protocols and emphasizes communication skills and ethical conduct to build positive community relations

• Continue to develop and expand the department’s enforcement tracking system to improve operations management

• Develop a tracking system to report data on administrative activities performed within the division

• Prioritize the safety and well-being of the community: close all Category 1 cases within three business days of complaint, close all Category 2 cases within 30 business days of complaint, and close all Category 3 cases within 50 business days of complaint, 80% of the time

1

2 cases

Percent of Category 3 cases

COMMUNITY SERVICES | HOUSING & HOMELESS SERVICES: SUMMARY

Operating Expenses

HOUSING & HOMELESS SERVICES

• Housing Services

• Homeless Services

• Affordable Housing Programs

• Federally Funded Community Assistance Programs

• Successor Agency

COMMUNITY SERVICES | HOUSING & HOMELESS SERVICES: HOUSING SERVICES

Expenses

ABOUT

The Housing Services Division provides various programs, activities and services that assist in the effort to sustain an extraordinary Carlsbad community, including disbursing community grants, delivering community education programs, funding the Carlsbad Hiring Center, and supporting the Carlsbad Housing Commission and Agricultural Conversion Mitigation Fee Citizens Advisory Committee

SERVICES

• Provide grants in accordance with City Council policies to community organizations, teams and special events that benefit and enrich residents in the community

• Fund projects that improve agricultural lands and protect Carlsbad’s natural resources through the Agricultural Conversion Mitigation Fee program

• Offer community education programs for high school students and the CityStuff program for third graders a collaboration between the City of Carlsbad, Junior Achievement and local elementary schools to introduce young students to the role and functions of local government

• Provide low income and homeless services support through the Carlsbad Service Center

• Administer the Minor Home Repair Program for, which provides forgivable home repair loans to low-income households who own and occupy their home as their primary residence

• Support the Housing Commission and Agricultural Conversion Mitigation Fee Citizens Advisory Committee

• Collaborate with Community Development Department on housing development review, affordability compliance, Housing Element programs and regulatory compliance with state housing laws

• Oversee the Affordable Housing Resale Program and compliance of existing affordable housing portfolio

RECENT ACCOMPLISHMENTS

• Conducted the Carlsbad Student Leader Academy with 34 high school student participants

• Partnered with 15 local elementary schools to host 45 CityStuff field trips, engaging 1,067 third grade students nearly twice the number of children and classrooms compared to last year

• Administered the Affordable Housing Resale Program, including the acquisition of four units and the resale of nine units, sold qualified low-income buyers between July 2024 and June 2025

• Facilitated affordable housing projects including 116 new affordable dwelling units in fiscal year 2025

• Collaborated with the Communication & Engagement Department to update Housing & Homeless Services webpages

GOALS

• Distribute Agricultural Conversion Mitigation Fee funding grants to projects that improve agricultural lands and protect Carlsbad’s natural resources

• Continue to coordinate with Community Develop ment Department on housing development review, affordability compliance, Housing Element programs and regulatory compliance with state housing laws

• Initiate the data collection process to support the development of a local preference policy aimed at reducing the displacement of low-income households; this policy would prioritize Carlsbad residents for first access to affordable housing opportunities

COMMUNITY SERVICES | HOUSING & HOMELESS SERVICES: HOMELESS SERVICES

Account: 0012540 1362610 Fund: General Special Revenue - PLHA

ABOUT

The Homeless Services Division is responsible for leading all strategies, initiatives and actions related to the city’s goal of addressing the complex needs of individuals experiencing or at risk of experiencing homelessness in a compassionate and effective manner and reduce the impacts of homelessness on the community. This division uses best practices, community input and feedback from people with lived experience to implement solutions to prevent and reduce homelessness. The strategies and initiatives surround three main areas of focus: shelter and housing, outreach and access to services and public safety.

SERVICES

• Manage and implement the city’s Homelessness Action Plan

• Provide resources for persons at-risk of or experiencing homelessness

• Oversee contracts for homeless outreach, employment & benefits services, rapid rehousing, permanent supportive housing, social workers and encampment abatement services

• Collaborate with the Police Department’s Homeless Outreach Team, neighboring jurisdictions and county resources on homelessness issues

• Administer Permanent Local Housing Allocation grant funds to subrecipients and monitor for ongoing compliance

• Oversee the limited-term motel voucher program, which assists individuals and families facing temporary homelessness by providing short-term stays in local motels

RECENT ACCOMPLISHMENTS

• Updated the Homelessness Action Plan and Annual Funding Plan

• Implemented a $11.4 million grant from the State of California to help transition people in encampments along the SR-78 corridor into shelter and housing in partnership with the City of Oceanside

• Secured $3 million in State grant funding to help transition people living in vehicles into shelter and housing

• Received $464,693 in federal funding to pair supportive services with Housing Choice Vouchers

• Secured $552,295 in additional federal funding for the rapid re-housing program

• Assisted 51 households with the short-term motel voucher program

• Conducted annual #WeAllCount (Point in Time Count) in conjunction with the Regional Task Force on Homelessness to collect data on the needs of people experiencing homelessness

GOALS

• Expand shelter capacity of the La Posada de Guadalupe shelter

• Implement a State funded pilot program addressing vehicular homelessness

• Create a public facing dashboard of data on homelessness programs and statistics

COMMUNITY SERVICES | HOUSING & HOMELESS SERVICES: AFFORDABLE HOUSING PROGRAMS

Operating Expenses

Account: 133, 134 806

ABOUT

Fund: Special Revenue – Affordable Housing Trust Special Revenue – Tyler Court Apartments

The Affordable Housing Trust Fund program is the city’s primary source of affordable housing funding for low-income households. The Affordable Housing Trust Fund collects fees generated from the Inclusionary Housing In-Lieu Fee and the sale of affordable housing credits that satisfy a developer’s inclusionary housing obligation as well as loan repayments from existing developments. With these funds, the city provides affordable housing programs, low income and homeless services support and offers financial assistance for residential developments that provide housing opportunities to lowincome households. The city also owns Tyler Court Senior Apartments, a 75-unit senior apartment complex. This complex provides for 100% affordable housing to senior households with incomes at 30% and 50% of the San Diego County Area median incomes. The city has an agreement with a third party to manage the day-to-day operations of the apartment complex.

SERVICES

• Administer the Housing Trust Fund in accordance with City Council Policy 90

• Provide affordable housing funding for low-income households

• Inform developers, staff and the public on the Inclusionary Housing Ordinance by providing information on the requirements of the ordinance

• Negotiate and prepare affordable housing agreements and density bonus agreements

• Assist with the development of low-income affordable housing developments from concept to construction

• Oversee operations of city-owned Tyler Court Senior Apartments

RECENT ACCOMPLISHMENTS

• Re-sold six units to qualified low-income buyers in fiscal year 2025, with an additional three sales pending closing

• Renewed contract with property management company for Tyler Court Senior Apartments complex

GOALS

• Identify new owner to acquire and improve Chestnut Apartments affordable housing complex

• Create fee schedules for monitoring units and processing fees for inclusionary and density bonus agreements, Housing Trust Fund applications and loans

• Create a policy handbook for residential developers with inclusionary housing or density bonus requirements to produce affordable housing to lower-income households

COMMUNITY SERVICES | HOUSING & HOMELESS SERVICES: FEDERALLY FUNDED COMMUNITY ASSISTANCE PROGRAMS

190 391

ABOUT

The city receives federal grants that benefit the community and low-income households. Housing Services administers the federally funded Housing Choice Voucher rental assistance program, which provides monthly rental subsidies to very low-income households and the Community Development Block Grant program, which helps to develop viable urban communities through the provision of decent housing, a suitable living environment and expanded economic opportunities for lowerincome persons.

SERVICES

• Provide monthly rental subsidies to very low-income households and process new participants for the federally funded Housing Choice Voucher rental assistance program

• Ensure the Housing Choice Voucher program complies with federal regulations and guidelines, the Carlsbad Administrative Plan and the Public Housing Agency Plan

• Achieve and maintain a lease rate that fully utilizes Housing Choice Voucher program funding allocation

• Administer funds from the Community Development Block Grant program and

recipient grants for compliance

• Provide staff support to the Housing Commission and the City Council in the selection process for activities to be included in the Community Development Block Grant program

• Prepare the Consolidated Annual Performance and Evaluation Report for public review and comment and final submission to the U.S. Dept. of Housing and Urban Development, or HUD

• Partner with a non-profit legal advisor to provide fair housing and tenant-landlord dispute counseling and education

RECENT ACCOMPLISHMENTS

• Administered monthly rental assistance to 635 very low and extremely low-income households, an increase of 6.5% from the previous year

• Received high performance agency rating through the Section 8 Management Assessment Program, which assesses if the Section 8 rental assistance program offers affordable rental units at the correct subsidy costs and establishes a system for HUD to measure a Housing Agency’s performance

• Funded five public service organizations and one fair housing provider, resulting in supportive services being provided to approximately 890 Carlsbad residents in low-income and special needs populations and assistance in the prevention of homelessness and reduction of the homeless population

• Created the fiscal year 2024-25 Annual Action Plan for the Community Development Block Grant program to allocate $1,098,728

• Submitted a five-year consolidated plan and Annual Action Plan to HUD

GOALS

• Seek additional funding to serve more clients as opportunities arise

• Update the calendar year 2026 Public Housing Agency Annual Plan

• Reach high performance status for the Section 8 Management Assessment Program in calendar year 2025

SIGNIFICANT CHANGES IN THIS YEAR’S BUDGET

The fiscal year 2025-26 budget includes a $1.4 million increase in the federally funded rental assistance program, consistent with need and anticipated revenue.

C OMMUNITY SERVICES | HOUSING & HOMELESS SERVICES: SUCCESSOR AGENCY

Account: 801, 811 Fund: Trust Fund – Successor Agency

ABOUT

The successor agency is responsible for preparing a recognized obligation payments schedule as detailed by the State of California’s Department of Finance, listing the enforceable obligations of the former redevelopment agency and their source of payment. This payment schedule is subject to approval by the countywide oversight board.

SERVICES

• Maintain records of the redevelopment agency per retention policy

• Ensure payment of all debt obligations as approved by the oversight board

RECENT ACCOMPLISHMENTS

• Processed Recognized Obligations Payment Schedule for fiscal year 2024-25 for approval by the countywide oversight board

GOALS

• Maintain obligations of the former redevelopment agency

Operating Expenses

COMMUNITY SERVICES | LIBRARY & CULTURAL ARTS: SUMMARY

Beginning in 2024-25, the department reorganized its library services to a location-based

Summary level figures in the following budget tables reflect this new structure.

LIBRARY & CULTURAL ARTS

• Administration, Digital Initiatives & Special Projects

• Public Services (includes three locations at Dove Library, Cole Library and Library Learning Center)

o Circulation Services

o Adult & Teen Services

o Children’s Services

o Exploration HUB

o Genealogy & Carlsbad History Services

o Literacy & Bilingual Services

• Specialty Services

o Collections & Technical Services

o Strategic Partnerships & Outreach

• Cultural Arts

COMMUNITY SERVICES |

LIBRARY & CULTURAL ARTS: ADMINISTRATION, DIGITAL INITIATIVES & SPECIAL PROJECTS

Account: 0014010 Fund: General 1454010 Special Revenue – Gifts & Bequests 1454011 Special Revenue – Friends of the Library

ABOUT

Library & Cultural Arts Administration provides management and leadership for the delivery of library and cultural arts programs and services; plans for the efficient use of resources and facilities; coordinates relations with local, regional, state and federal government agencies; and provides liaison services, resource assistance and technical guidance to Library Board of Trustees, Arts Commission, the Friends of the Carlsbad Library, the Carlsbad Library & Arts Foundation, the Carlsbad Friends of the Arts and the Serra Cooperative Library System.

SERVICES

• Conduct strategic planning, set programs and services and monitor and respond to industry trends and best practices

• Utilize data to develop meaningful performance metrics that show impact in the community and adjust services based on community needs

• Manage personnel and volunteer recruitment activities, develop and maintain policies and procedures and provide centralized training services for all staff and volunteers

• Develop, administer and monitor budgets, contracts, grants, purchasing and accounting processes

• Plan and develop special projects and technology solutions to effectively deliver services

• Work with the Library Board of Trustees and the Arts Commission to ensure the department is responsive to community needs as represented by trustees and commissioners

• Partner with support organizations including the Carlsbad Library & Arts Foundation, the Friends of the Carlsbad Library and Carlsbad Friends of the Arts to ensure endowments, donations and fundraising on behalf of the organization are used appropriately

RECENT ACCOMPLISHMENTS

• Completed implementation of a new library personnel structure that addresses staff feedback, changing community needs and best practices

• Developed and launched a set of guiding principles to help provide service direction for staff and leadership

• Completed replacement of printers and copiers for patron use

• Expanded centralized data collection to support making data informed decisions

• Achieved a full complement of staffing for the first time in over a decade

GOALS

• Integrate new guiding principles into Library & Cultural Arts workflows and services

• Complete a $600,000 RFID hardware and software upgrade in partnership with the Information Technology Department

• Pilot a new people-counting and space usage measuring system at one library location to evaluate internal space use, in partnership with the Parks & Recreation and IT departments

• Design an expansion plan for the Homebound Services book delivery program, utilizing a generous community donation

• Formalize relationships with Friends of the Library and Carlsbad Library & Arts Foundation via Memorandums of Understanding

COMMUNITY SERVICES | LIBRARY & CULTURAL ARTS: PUBLIC SERVICES

Account: 001402X Fund: General – Dove

001403X General – Cole

001405X General – Learning Center & Grants

1454016 Special Revenue – Sutton

ABOUT

Public Services include all the library disciplines that program for and serve library patrons, including circulation, adult and teen, children’s and bilingual services. At Dove Library, this also includes the Exploration HUB. At Cole Library, this includes Genealogy and Carlsbad History. At the Library Learning Center, it includes adult and family literacy.

SERVICES

• Assist community members of all ages with information and literacy needs, provide instruction on resource use, perform research for the public, local business and government, provide educational, literacy, informational, cultural and recreational programs and advise readers to find books of interest

• Manage patron accounts and issuance of library cards, circulate and inventory print, electronic and audiovisual materials, answer collection -related questions, track reserved and overdue items and sort, organize and shelve all library materials

• Provide reference and instructional assistance to community members researching their ancestry, preserve and make available Carlsbad history materials for public research, and work closely with the North San Diego County Genealogical Society to provide educational genealogy resources and programs

• Deliver adult and family literacy services through one-on-one tutoring, reading instruction, English as a second language classes, Career Online High School and programs for adult learners supported by community volunteers and partners and a California State Library grant

RECENT ACCOMPLISHMENTS

• Met increased demand for services to families with children by restoring volunteersupported after-school homework assistance at the Learning Center and by increasing story times and weekend children’s programming

• Applied for and obtained a California Revealed grant from the State of California to digitize microfilm of the “Carlsbad Sea Lion,” the first weekly Carlsbad hometown newspaper

• Added a collection of low literacy, high interest books to meet adult learner needs at the Carlsbad City Library on Dove Lane and expanded the existing collection at the Carlsbad Library Learning Center

• Held the first Volunteer Expo to match partnership organizations with community members seeking volunteer opportunities in Carlsbad

GOALS

• Expand oral history holdings to include video interviews of community members reflecting on their memories of Carlsbad

• Enhance library patrons’ digital literacy by bringing back staff-led training on computer basics

• Comply with California Senate Bill 321 Local Public Library Partnership Program which ensures that all pupils have access to local public libraries by 3rd grade

• Collaborate to strengthen school outreach and partnerships by providing library tours, distributing library cards to students and offering class visits and book talks

• Improve customer service in the Exploration HUB by adding additional 3D printers to the space

* Schulman Auditorium closed July ‘24 - March ‘25

SIGNIFICANT CHANGES IN THIS YEAR’S BUDGET

The department’s budget includes an additional $90,000 in ongoing funding to re-open Sunday hours at Dove and Cole libraries.

COMMUNITY SERVICES |

LIBRARY & CULTURAL ARTS: SPECIALTY SERVICES

Specialty Services include all systemwide work that supports the programs and services of public facing divisions

SERVICES

• Coordinate the selection of physical and electronic materials and manage collection development and maintenance for all library facilities

• Catalog and prepare library materials for public use, evaluate new content formats, devise new cataloging and processing procedures and evaluate usage patterns for materials

• Develop partnerships and outreach opportunities to promote community connections and improve services systemwide

RECENT ACCOMPLISHMENTS

• Implemented the LINK+ interlibrary loan system that allows library users to borrow books from libraries throughout California

• Increased the number of “Library of Things” items offered to patrons by adding induction cooktops, telescope kits and Adventure Backpacks, provided at no cost to the department through partnerships with local and state resources

• Established a productive partnership with LiveWell San Diego, to bring free health and wellness programs to library locations

GOALS

• Improve organization of children’s materials to align with best practices and increase accessibility

• Redirect collection budget allocations away from formats that are losing relevancy and toward the most popular collection formats

• Comply with California Assembly Bill 1825 - California Freedom to Read Act, which requires every library to have a publicly accessible collection development policy. Work with the California State Library to review the established Collection Development Policy, ensure compliance and update as needed

• Identify new partnerships with local agencies and organizations that support and supplement library programs and services

COMMUNITY SERVICES | LIBRARY & CULTURAL ARTS: CULTURAL ARTS

ABOUT

Cultural Arts plans, promotes and carries out visual and performing arts programs, arts education activities, temporary and permanent public art and other offerings to make connections among artists, cultural organizations, community groups, businesses and the community. Guided by the Arts & Culture Master Plan, Cultural Arts sustains and promotes a thriving, diverse and creative city.

SERVICES

• Present visual arts exhibitions and performing arts at the Ruby G. Schulman Auditorium, the William D. Cannon Art Gallery and throughout the city

• Create, document and maintain the city’s permanent and temporary public art collection

• Administer the Community Arts Grant program with support from the Arts Commission and participation of community arts stakeholders

• Offer educational programs for over

and

and open studios

• Present year-round performing arts series, including TGIF Concerts in the Parks and the Cinema Club film series

• Maintain partnerships with the Carlsbad Library & Arts Foundation and the Carlsbad Friends of the Arts

RECENT ACCOMPLISHMENTS

• Implemented new security measures at nine TGIF concerts, in partnership with Carlsbad Police, Fire and Parks & Recreation departments and Carlsbad Friends of the Arts and launched a corporate sponsorship program that secured two title sponsors

• Completed significant technology, lighting and audiovisual system upgrades in the Ruby G. Schulman Auditorium

• Hosted six performances in the Ann Kulchin Courtyard while the Schulman Auditorium was closed for construction, averaging 150 attendees per event

• Presented two exhibitions in the Cannon Art Gallery: Fiber in 3D and Silent Storytellers

• Awarded $117,128 in community arts grants to 27 arts organizations and schools

• Selected artist teams for public art at Veterans Memorial Park and Barrio Traffic Circle

GOALS

• Reevaluate the remaining initiatives in the Arts & Culture Master Plan with support from the Arts Commission subcommittee and seek City Council guidance on next steps

• Complete community engagement and bring forward design plans to City Council for public art at Chestnut I-5 Underpass, Veterans Memorial Park and Barrio Traffic Circle projects

• Initiate public art process for Monroe Street Pool and Robertson Ranch Park in accordance with the Art in Public Places program

• Develop an updated Guest Artist Residency program, creating quality interactions between artists and the community, as identified in the Arts & Culture Master Plan Priority Actions

• Explore new opportunities for temporary public art, including trail art to enhance the outdoor experience, and continued partnership with the Carlsbad Village Association to pair local artists with businesses

• Plan for a juried biennial exhibition in the Cannon Art Gallery to feature world class, nationally and regionally recognized artists

SIGNIFICANT CHANGES IN THIS YEAR’S BUDGET

An additional 2.07 hourly full-time equivalent part-time employee hours, equal to 4,140 hours, will provide additional staffing for the newly renovated Schulman Auditorium in order to maximize its use and offerings.

COMMUNITY SERVICES | PARKS & RECREATION: SUMMARY

PARKS & RECREATION

• Administration

• Recreation

• Parks & Trail Maintenance

• Street Tree Maintenance & Median Maintenance

• The Crossings Golf Course

COMMUNITY SERVICES | PARKS & RECREATION: ADMINISTRATION

Expenses

0014510, 0014511

ABOUT

Revenue-Scholarships

Revenue-Donations

Parks & Recreation Administration provides department leadership, planning and administrative services to help develop and sustain high-quality parks and recreation programs.

SERVICES

• Evaluate and monitor business processes to improve operations, efficiency and performance

• Develop and monitor department’s operating budget and annual CIP budget

• Process and issue citywide special event permits

• Manage city-owned or controlled natural open space and trails system and review opportunities for land acquisition, easement planning, and trails design/construction

• Oversee operating agreement for The Crossings at Carlsbad Municipal Golf Course

• Perform parks planning, design, administration and construction monitoring services

• Plan and monitor recreation programs in accordance with the Parks & Recreation Department Master Plan and in consideration of participant surveys and community

• Administer opportunity grants for low-income residents

• Provide support to and liaise with Parks & Recreation and Senior commissions

• Implement strategic action items in the Parks & Recreation Department Master Plan

RECENT ACCOMPLISHMENTS

• Checked plans and specifications of new private development projects that include trail construction, street trees and rights of way improvements

• Assisted in obtaining City Council approval of the plans and specifications to bid and award the construction contract for the Monroe Street Pool Renovation/Replacement project

• Achieved City Council approval of the plans and specifications to bid and award construction contracts for the Alga Norte Aquatic Center Restrooms and Replastering Project

• Obtained City Council approval for an agreement for design services and pre-engineered building material kits for the Veterans Memorial Park project

• Received City Council approval for an agreement with SDG&E to provide, install and maintain electric vehicle charging station infrastructure for the Veterans Memorial Park project

• Obtained City Council approval for a new senior center meals preparation and delivery services agreement for congregate and home meal delivered meals

• Expanded the Senior/Opportunity Grant program to allow residents to apply year-round

• Coordinated City Council approval of a citywide code of conduct ordinance that applies to users of several city facilities, including the aquatic centers, community centers, and Senior Center

• Conducted an athletic field and park rental area fee study, analyzing rates, usage data, and maintenance cost recovery

• Implemented an increase in athletic field lighting fees, so as to be more comparable to surrounding regional cities

• Finished redesign of the online recreation classes catalog

• Gained City Council approval of the recommended master plan for Robertson Ranch Park and conducted permitting and entitlement phases of the project

• Completed construction contract for the Stagecoach Community Garden and monitored the project through completion

GOALS

• Implement applicable parks, maintenance, and programs, events and facilities strategies identified in the Parks & Recreation Department Master Plan

• Pursue CAPRA accreditation to ensure re-accreditation within the next year, as it’s the sole national standard for evaluating park and recreation agencies, signifying high-quality operation, management, and community service

• Complete permitting and construction document preparation phases of the project, and obtain City Council approval of plans and specifications to bid and award a construction contract for four new outdoor pickleball courts at Calavera Hills Community Park and four new outdoor pickleball courts at Stagecoach Community Park

• Complete the permitting and entitlement phase, obtain City Council approval on the final master plan, and commence the construction documentation for Robertson Ranch Park

• Obtain City Council approval to award a construction contract for Veterans Memorial Park and continue providing administrative support in overseeing the project

• Support three commissions in accomplishing the goals and tasks within each commission’s annual work plan

Operating Expenses

COMMUNITY SERVICES | PARKS & RECREATION: RECREATION

Account: 0014520-44, 0014546-73 143 Fund: General Special Revenue-Senior Program Donations

ABOUT

The Parks & Recreation Department offers a wide variety of programming, including youth and adult sports, instructional classes, camps, aquatics, preschool and teen services, and special events. The department operates and maintains community centers, parks and special use areas, featuring multiuse fields, tennis courts, dog parks, skate parks, playgrounds, two historic parks, a senior center, four multigenerational community centers and two aquatic centers.

SERVICES

• Provide information, enrollment and registration services for parks, programs and facilities

• Collect and account for revenue to ensure efficient and cost-effective programming

• Plan, conduct, and supervise recreation operations and programs at community centers, parks and other city facilities

• Process applications and issue park, facility and special event permits

• Coordinate and oversee fair and efficient use of athletic facilities for resident nonprofit sports organizations

• Conduct cultural and historic park educational and interpretive programming

• Serve as a certification site for aquatics training programs through the American Red Cross

• Provide programs that promote health and wellness and essential childhood development

• Arrange classes, seminars, transportation and professional services for seniors

• Manage intergenerational programs that foster cooperation and interaction

• Provide congregate meals and home delivered meals to seniors at little or no cost

• Recruit and manage volunteers supporting the Senior Center, Leo Carrillo Ranch, and special events

RECENT ACCOMPLISHMENTS

• Assisted in the design and bidding of the Monroe Street Pool Renovation/Expansion Project

• Launched the Leo Carrillo Ranch Archives online database, granting public access to a comprehensive digital collection

• Monitored replastering of pools and renovation of restrooms at Alga Norte Aquatic Center

• Implemented a new agreement for senior nutrition services to continue serving an average of 70 congregate meals per day and over 300 home delivered meals per week

• Recertified 50 lifeguards to maintain surveillance and first responder services at pools

• Exceeded teen revenue projections by 150% through increased participation in the L.I.T.E. or Leadership In Training and Education program and two special events

• Partnered with the Carlsbad Chamber of Commerce to host the annual Older & Bolder Expo at the Senior Center, featuring 45 plus vendors for seniors and caregivers

• Welcomed 41 fourth-grade classes and over 1,100 students for the California History & Art Program at Leo Carrillo Ranch

• Implemented a Park Monitoring Program to ensure fair community use and compliance with park rules

GOALS

• Maintain support of the City of Carlsbad Age-Friendly Action Plan

• Expand programs that promote health and wellness and essential childhood development, including intergenerational social events for seniors and teens

• Augment staff with volunteers to build community and enhance fiscal stewardship

• Continue implementation of the Parks & Recreation Department Master Plan actions related to services, programs, events and fees

• Develop a professional photography fee schedule for Leo Carrillo Ranch Historic Park

COMMUNITY SERVICES | PARKS & RECREATION: PARKS & TRAIL MAINTENANCE

Personnel Services

Account: 00146XX Fund: General

ABOUT

The Parks & Recreation Department maintains approximately 432 acres of developed or scheduled to be constructed community parks and special use areas, 51 miles of trails, 612 acres of habitat preserves, urban forests and undeveloped lands and landscaping for 58 acres of facilities

SERVICES

• Manage turf, irrigation, drainage and landscaping at parks, civic facilities, beach accesses and school athletic fields

• Inspect and maintain restroom facilities and picnic areas, tennis, pickleball and basketball courts, and soccer, softball, baseball and multi-purpose fields

• Repair parks structures, athletic field lighting, play equipment, playground safety surfacing, other park infrastructure and amenities

• Respond to tree service requests and provide storm and emergency assistance as necessary

• Refine, support and administer tree maintenance block pruning program

• Inspect and prune all city trees on a 4 to 4.5-year cycle and a 2 to 2.25-year supplemental cycle for high-maintenance trees in accordance with Community Forest Management Plan

• Maintain existing citywide trails system and coordinate development of new trails

• Manage the trails volunteers program

• Oversee maintenance and monitoring of preserves, urban forests and undeveloped lands

• Coordinate coastal activities with the California Department of Parks & Recreation, California Coastal Commission and lagoon foundations

RECENT ACCOMPLISHMENTS

• Applied clear coat on playground surfacing at select parks to enhance UV protection

• Refined, supported and administered tree maintenance block pruning program

• Completed first phase of planting parks and trails trees within vacancies created by prior removals and planted new parks and trails trees in accordance with the Community Forest Management Plan

• Performed sports lighting maintenance at several community parks

• Repaired segments of Lake Calavera Trails and installed erosion control measures

• Participated in administration of the janitorial services agreement for parks restrooms

• Executed two North Beach clean-up events with the Beach Preservation Commission

• Improved operational effectiveness of irrigation systems through upgrades

• Abated invasive Kikuyu grass from the landscape at the city’s Farmers property at the southwest corner of El Camino Real and Faraday Avenue

• Resurfaced tennis courts at Carlsbad High School as a joint use site between the City of Carlsbad and Carlsbad Unified School District

• Installed accessible walkway and turf renovations at Poinsettia Dog Park

• Transitioned to Cartegraph inspection, reporting, work order and tracking software for contracted parks maintenance services

• Monitored construction and assumed maintenance of Stagecoach Community Garden

GOALS

• Resurface tennis and basketball courts at La Costa Canyon Park and pickleball courts at Poinsettia Community Park

• Repair ballfield fencing and perform related improvements at Chase Fields and at Alga Norte Community Park

• Assume ongoing maintenance of replaced synthetic turf soccer field at Poinsettia Community Park

• Apply clear coat on playground surfacing at select parks to enhance UV protection

• Add 500 total trees to the city’s inventory, including trees within parks, facilities and trails in accordance with City Council-adopted Community Forest Management Plan

• Complete second phase of planting parks and trails trees within vacancies created by prior removals in accordance with the Community Forest Management Plan Performance

Sustainability & the Natural Environment

SIGNIFICANT CHANGES IN THIS YEAR’S BUDGET

The fiscal year 2025-26 budget includes $300,000 in one-time budget appropriations to initiate a fire mitigation project in the city’s urban forest areas. This is a continuation of efforts approved by the City Council mid-year 2024-25.

COMMUNITY SERVICES |

PARKS & RECREATION: STREET TREE & MEDIAN MAINTENANCE

Expenses

Fund: Special Revenue Special Revenue

ABOUT

The Street Tree Maintenance Assessment District provides maintenance to all city-accepted street trees within the public right-of-way, including specialized maintenance for street trees in the Downtown Carlsbad Village area.

The Median Maintenance Assessment District provides landscape and irrigation maintenance for approximately 68 acres of median planters and nine acres of developed parkways and streetscapes, including the Downtown Carlsbad Village area.

SERVICES

• Inspect and prune all city trees on a 4 to 4.5-year cycle and a 2 to 2.25-year supplemental cycle for high maintenance trees

• Respond to tree service requests and provide storm and emergency assistance as necessary

• Refine, support, administer and inspect the tree maintenance block pruning program

• Plant street trees and median trees within vacancies created by prior removals in accordance with the Community Forest Management Plan

• Perform plan checks, conduct inspections and assume maintenance responsibility for street trees of development projects or ensure a street tree maintenance agreement is executed and recorded by the developer

• Administer and oversee landscape and irrigation maintenance for all city median planters and developed parkways and streetscapes, including litter control, weed abatement, pruning, shrub and tree refurbishment and irrigation repairs

• Perform plan checks, conduct inspections and assume maintenance responsibility for medians and parkways constructed from city capital improvement projects and private development, or ensure a median and parkway maintenance agreement is executed and recorded by the developer

RECENT ACCOMPLISHMENTS

• Transitioned to Cartegraph inspection, reporting, work order and tracking software for contracted parks maintenance services

• Completed first phase of replacement of missing shrub and ground covers

• Finished irrigation controller upgrades in high priority areas

GOALS

• Add 500 total trees to the city’s inventory, including those within street rights-of-way and medians, in accordance with City Council-adopted Community Forest Management Plan

• Conclude second phase of replacement of missing shrubs and ground covers

• Complete irrigation controller upgrades in medium priority areas

Performance Measure

Percentage of increase in recycling receptacles within Downtown Village and Northern Beach Streetscapes

Sustainability &

Sustainability & the Natural Environment

ABOUT

COMMUNITY SERVICES | PARKS & RECREATION: THE CROSSINGS AT CARLSBAD MUNICIPAL GOLF COURSE

Account: 572 Fund: Enterprise

The Crossings at Carlsbad Municipal Golf Course is an 18-hole municipal golf course and event facility. Amenities for public use include a 6,835-yard championship golf course, a clubhouse complete with a golf shop, players’ lounge, sunset patio, banquet facilities, fireplace in dining room, full-service kitchen, outdoor deck with ocean views and three miles of hiking trails that connect to Veterans Memorial Park. JC Management, Inc. manages this facility via an agreement with the Carlsbad Public Financing Authority.

SERVICES

• Administer management and operations agreement with JC Management, Inc.

• Maintain and renovate golf and non-golf turf, landscaping, drainage, irrigation, cart paths, parking lots and site utilities systems

• Maintain and repair clubhouse, snack bar, restrooms and public areas available for patrons

• Oversee food and beverage services at the Players’ Lounge, Sunset Patio, Canyons Restaurant, beverage carts and snack bar

• Manage sales and marketing for golf and non-golf activities, special events, banquets, dining, weddings and other gatherings

• Train and oversee player assistants, greeters and starters servicing the course and clubhouse

RECENT ACCOMPLISHMENTS

• Executed a Capital Improvement Plan with projects that have an anticipated return on investment or were needed for maintenance effectiveness or safety concerns

• Upgraded multiple pieces of kitchen equipment to improve efficiency and overall quality

• Ensured the pace of play was under five hours per round of golf, via staff educating patrons and expediting play, and met pace of play goal on at least 90% of rounds played

• Replaced damaged golf cart paths and fencing in specific, high-risk areas around the golf course and facility

• Installed east range netting to protect assets located in the area from errant shots

• Restored wood in banquet rooms, restaurant, lounge, bathrooms and lobby of clubhouse

• Painted all exterior/interior areas of clubhouse

• Upgraded dining room chairs for Canyons Restaurant

• Executed bunker renovations for Holes 11 and 13 on the golf course

• Completed clubhouse perimeter and parking lot landscape renovation and enhancements

• Purchased a course greens mower and a utility cart for increased quality and production

• Installed bromic heaters on Canyons Patio to replace existing stand-alone heaters, providing additional revenue opportunities while consistently keeping guests comfortable on cooler days and evenings

GOALS

• Level tee boxes and renovate greens collars where needed for better course playability

• Construct wind wall to extend from west patio to south side of canyons patio

• Add audiovisual components to integrate the exterior of the clubhouse with its interior, enhancing the guest experience upon arrival

• Upgrade the restrooms and snack bar to improve guest experience

• Renovate bunkers for needed areas on the golf course

• Replace tabletops in the Canyons Restaurant

• Add landscape fountain features to courtyard and front entrance areas

• Secure permit approvals for facility’s monument signage

• Expand clubhouse landscape enhancements and continue new plantings for removed trees

• Maintain number of rounds played, and apply increase to the average rate by $2 per round

• Increase number of banquets and receptions by at least 2%

ADMINISTRATIVE SERVICES

Administrative Services is a transparent, innovative and efficient support services branch that is accountable for the assets entrusted to it. The branch, comprised of finance, human resources, risk management and workers’ compensation, economic development, information technology and internal audit provides related services to city staff and the public as well as promotes a strong local economy.

Our employees work together to add value to organizational processes, provide timely and reliable service to our community and business partners and find creative solutions to problems while protecting our assets. Key roles also include attracting and retaining a talented and engaged city workforce and ensuring the economic vitality of the city.

Laura Rocha Deputy City Manager, Administrative Services

442-339-2430 laura.rocha@carlsbadca.gov

Operating Expenses

ADMINISTRATIVE SERVICES | ADMINISTRATION

Account: 0011110

ABOUT

Fund: General

Administrative Services Administration provides financial, analytical, budget, strategic and administrative support to the branch and organization, aiming to enhance operational efficiency and promote evidence-based, well-managed government.

SERVICES

• Provide branch leadership and strategic support, long-range financial management and budget oversight, internal audit, contract administration, records management, economic development and support to the city’s business community

• Enhance transparency, accountability and integrity in operational areas using innovation and technology to streamline procedures and processes

• Support departments on process improvement and operational efficiency to further the city’s pursuit of being an evidence-based well managed government

• Identify key performance indicators with departments to gauge progress on the City Council's strategic plan and make better data-driven decisions

RECENT ACCOMPLISHMENTS

• Recommended a strategic, balanced budget, that meets City Council-approved reserve level

• Continued or completed 31 Economic Development Strategic Plan actions

• Developed an economic

• Established Carlsbad Works to develop a performance management system that highlights good data management and data governance citywide

• Won What Works Cities Gold Certification for evidence based, well-managed government

• Launched a new open data portal, enhancing information sharing efficiency within the organization and with the public, thereby increasing transparency

GOALS

• Ensure the city’s short and long-term financial status is healthy and sound

• Work with city leadership and City Council to develop plans for addressing any forecast shortfalls in funding for operations and infrastructure

• Evaluate opportunities for bond refinancing that will result in savings

• Enhance transparency, accountability and integrity in operational areas using innovation and technology to streamline procedures and processes

Performance Measure

Related Strategic Plan Goal

Number of valueadded internal audit engagements 0 1 4 N/A Organizational Excellence & Fiscal Health

ADMINISTRATIVE SERVICES | ECONOMIC DEVELOPMENT

Account: 0011035 Fund: General

ABOUT

Economic development supports business growth, job creation and new investments to improve residents' economic well-being and quality of life, aligning with the City Council's goal of economic vitality.

SERVICES

• Implement the Economic Development Strategic Plan to achieve Economic Vitality goal

• Conduct business expansion, attraction and retention activities

• Support Carlsbad’s key industries, small businesses, entrepreneurs and startups

• Position Carlsbad as a desirable place to conduct business and grow business operations

• Foster a healthy talent pipeline for Carlsbad’s key industries

• Provide economic data and analysis to help inform decision-making

RECENT ACCOMPLISHMENTS

• Implemented a total of 40 Economic Development Strategic Plan actions

• Stood up the Small Business Liaison program to give small businesses a dedicated contact at the city and suite of resources to be more competitive

• Organized and hosted San Diego Startup Week for third consecutive year establish Carlsbad as a great place for entrepreneurs

• Launched Candidate Marketplace, a talent recruiting tool for Carlsbad businesses

• Refreshed Life in Action Website to be more relevant to ensure Carlsbad remains attractive to talent and workers

• Expanded monthly industry engagement events, going from 4-8 attendees to 40 attendees on average

• Made economic data more available to businesses and policymakers via two easy-tonavigate dashboards on the city website

• Transitioned the Carlsbad Tourism and Carlsbad Golf Lodging business improvement districts to an updated operating model, increasing efficiency of operations to support the tourism industry

GOALS

• Continue the implementation of the Economic Development Strategic Plan, progressing on at least 55 cumulative actions in pursuit of Economic Vitality, an increase from 40 actions last year

• Enhance support services for city businesses, supporting at least 50 business expansion attraction and retention, or BEAR, projects, consistent with last year’s output

• Establish and expand industry advisory groups to gain a better understanding of current and anticipated challenges in Carlsbad’s key industries

• Offer resources to streamline talent recruitment processes for Carlsbad businesses

• Develop and implement innovative programs to enhance business growth and resiliency

ADMINISTRATIVE SERVICES | FINANCE

Account: 0011310 Fund: General

ABOUT

As a steward of the city’s assets and liabilities, the Finance Department sets and implements a strategic financial management plan and provides information in an effective and timely manner, ensuring the city makes sound financial decisions.

SERVICES

• Oversee the city budget and long-range financial planning

• Monitor the economy closely and continuously update the city’s Ten-Year Financial Forecast to ensure the General Fund remains in balance throughout the year

• Present quarterly financial updates to the City Council

• Provide general accounting and reporting

• Support treasury administration

• Manage debt, cashiering, purchasing, utility billing and business licensing

• Process payroll and payments

• Manage receiving, messenger and mail services

RECENT ACCOMPLISHMENTS

• Completed fiscal year 2023-24 Annual Comprehensive Financial Report

• Completed the mid-year budget review process, which is a collaborative effort with all city departments to forecast changes to revenues and expenditures compared to their current budgets based on observed trends

• Maintained a balanced operating budget in fiscal year 2024-25 and submitted a balanced budget to the City Council for fiscal year 2025-26

• Completed comprehensive master fee schedule updates to ensure fees charged to the public are in line with city policy and inflation levels

• Initiated comprehensive cost of service study to evaluate city fee levels and structures and comparisons with other cities that will be completed in the upcoming fiscal year

• Completed an updated cost allocation plan for fiscal year 2024-25, a document that outlines how the city distributes the cost of providing services to different funds or programs

• Assisted with program-specific external audits including Public Works and the Utilities and Police departments

GOALS

• Continue to monitor the economy and its impact to the Ten-Year Forecast to ensure the General Fund remains in balance

• Continue implementation of Core System Modernization project

• Continue to improve procedures to mitigate risk through additional controls in payables process

• Continue supporting program-specific audit requests for funding the city receives

• Expand the use of electronic bidding to increase efficiencies in the procurement process

• Maintain a General Fund Reserve Ratio of 40% of General Fund annual operating expenditures, in compliance with City Council Policy 74 and demonstrating the department’s efforts to achieve the city’s 2023-2027 strategic plan goal of organizational excellence & fiscal health

• Maintain a credit rating of AAA, demonstrating the department’s efforts to achieve the city’s 2023-2027 strategic plan goal of organizational excellence & fiscal health

SIGNIFICANT CHANGES IN THIS YEAR’S BUDGET

The fiscal year 2025-26 budget adds one accountant position to support the department’s financial accounting and reporting group.

HUMAN RESOURCES

• Human Resources

• Risk Management

• Workers’ Compensation

ADMINISTRATIVE SERVICES | HUMAN RESOURCES: SUMMARY

ADMINISTRATIVE SERVICES | HUMAN RESOURCES: HUMAN RESOURCES

Account: 00115XX Fund: General

ABOUT

The Human Resources Department provides services for the employees of the city so they can provide the highest level of service to the public. The department serves to support the creation of a high-performance work culture that can carry out the vision for the organization as defined by the City Council and the City Manager. The primary objectives are achieving compliance with federal and state mandates to avoid risk and liability and making process improvements to help the city remain resilient while delivering exceptional service.

SERVICES

• Maintain employment -related legal compliance and manage employee and labor relations

• Oversee employee engagement programs; support efforts to maintain an optimal workforce

• Lead recruitment, retention and onboarding, including the internship program and Department of Defense SkillBridge program, a career transition initiative that helps transitioning service members gain valuable civilian work experience

• Ensure employees’ job duties match their job classification and that compensation is equitable and competitive to attract and retain top talent

• Administer employee benefits, leaves of

at

and workplace accommodations to ensure

• Operate a city-wide volunteer program that includes over 600 people donating an average of 30,000 hours of assistance annually

• Foster inclusion and equity values citywide and within all HR department services

RECENT ACCOMPLISHMENTS

• Provided over 350 in-person and virtual self-paced development courses

• Filled over half of vacant full-time positions by internal promotions in fiscal year 2024-25

• Implemented the Let’s Connect program a performance management tool that provides opportunities for supervisors and employees to discuss accomplishments, growth and goals

• Created or updated approximately 20 employment-related policies to maintain compliance

• Instituted a qualifications-based job applicant screening process focused on skills, education and experience and excluding applicants’ personal information

• Advertised job openings on over 600 nationwide websites to achieve a high level of inclusivity

• Processed over 6,000 job applications to fill over 400 vacant positions in fiscal year 2024-25

• Prepare Emergency Medical Technicians to promote to Paramedic Firefighters to fill vacancies faster and retain employees who align with Fire Department values and work ethic

• Established a senior project program with California State University San Marcos, giving students an opportunity to gain practical experience and employees an opportunity to mentor future leaders in the field

• Implemented online recruitment testing programs, resulting in a more streamlined process

• Consistently maintained vacancy rates under 10% to ensure effective public service delivery; this falls below the legal requirements to report vacancy rates of 20% or more

GOALS

• Implement Carlsbad LEAD: Listen Empower Act Develop, a customized training academy to provide current and aspiring leaders with skills and knowledge to effectively lead others

• Maximize recruitment outreach to attract and retain top talent in a competitive environment

• Collaborate with North Zone fire agencies for an effective use of shared resources during fire department promotional testing processes

• Negotiate new labor contracts with Carlsbad Firefighters’ Association Inc. and Carlsbad City Employees’ Association

• Continue to conduct compensation studies to ensure equity, competitiveness and retention

• Expand the Let’s Connect program for off-cycle use and with part-time employees citywide

Organizational Excellence & Fiscal Health

Organizational Excellence & Fiscal Health

SIGNIFICANT CHANGES IN THIS YEAR’S BUDGET

One position was added to continue to meet current and future demands to fill vacant positions, including recently added safety positions, in a timely manner and maintain low vacancy rates. The addition of this position will also help maintain compliance and all service levels in the department.

ADMINISTRATIVE SERVICES |

HUMAN RESOURCES: RISK MANAGEMENT

Account: 6121930 Fund: Internal Service

ABOUT

Risk Management administers funding of the self-insured and insured portions of the city’s liability insurance program which helps protect the city’s financial interests. Risk Management works closely with the City Attorney’s Office and outside legal counsel to monitor, control and resolve litigated claims. Risk Management also works to recover monetary losses to city property caused by the negligence of third parties. The risk manager serves as the city’s Americans with Disabilities Act Coordinator and assists with ongoing efforts of the city to comply with Title II of the Americans with Disabilities Act Additionally, Risk Management maintains compliance of applicable state and federal mandates related to safe conditions at city facilities and worksites.

SERVICES

• Manage all liability claims received by the city

• Collaborate and resolve all risk management-related litigation with the City Attorney’s Office

• Pursue loss recovery and manage the loss prevention program for employee-related losses

• Administer the citywide safety program (e.g., injury and illness prevention and workplace violence prevention) and compliance with the California Department of Industrial Relations’ Occupational Safety & Health Act, or OSHA

• Coordinate cost recovery of damage to city assets by third parties

• Monitor compliance related to insurance requirements for all citywide independent contractors

• Evaluate and provide advice regarding insurance policies purchased by the city

RECENT ACCOMPLISHMENTS

• Conducted over 50 safety audits at city facilities and work sites to maintain safe conditions for the public and employees

• Managed over 120 active liability and property claims without a Third-Party Administrator, resulting in an estimated $80,000 annual cost avoidance

• Implemented alternative methods for delivering safety related trainings to minimize operational disruptions, increase trainer and trainee interaction, and improve training quality

• Improved assessments, such as audiogram and respirator fit testing, to keep those employees who work in hazardous conditions safe

• Coordinated efforts with the City Attorney’s Office to develop and implement the new Workplace Violence Prevention Plan in compliance with new state legal requirements

• Worked with departments to conduct Safety Surveys to enhance safety compliance

• Obtained city property loss recoveries resulting in an average annual cost recovery of $150,000

GOALS

• Enhance the safety program to include up-to-date trainings to ensure a safe work environment

• Facilitate additional safety committee meetings in which all departments participate and collaborate towards the goal of maintaining a safe working environment

• Continue developing the division’s Standard Operating Procedures to maintain compliance with updates to CalOSHA regulations

• Reduce dependence on external trainers and vendors by conducting more employee safety training internally, resulting in cost avoidance and a customized training experience

ADMINISTRATIVE SERVICES | HUMAN RESOURCES: WORKERS’ COMPENSATION

Account: 6111520 Fund: Internal Service

ABOUT

This internal service fund is used to support the work-related injury and illness program.

SERVICES

• Cooperate with injured employees and physicians to ensure timely medical treatment

• Coordinate employees’ return to work, including light duty assignments

• Work directly with injured employees to settle outstanding claims without litigation

• Provide training, analytics and recommendations to department supervisors to prevent work-related injuries

RECENT ACCOMPLISHMENTS

• Resolved and closed 238 claims in fiscal year 2023-24 and expecting to resolve 225 claims in fiscal year 2024-25; 97% of these did not require litigation

• Enhanced the workers’ compensation claims auditing process and trend analysis to identify patterns and implement additional safety measures to prevent claims

• Conducted weekly incident reviews to identify trends in work related accidents and injuries and implement measures to reduce employee injury and workers’ compensation claims costs

GOALS

• Ensure injured employees receive appropriate medical treatment in a timely manner to reach maximum improvement and return to work as soon as reasonably possible

• Continue working collaboratively with injured employees to settle claims without litigation

• Minimize the number of lost days of work due to work-related injuries and illnesses by continuing to provide outstanding service and minimize overtime cost due to employee absences

• Enhance the workers’ compensation advocacy plan and use of data analytics to achieve the desired outcomes of this program, including injury and illness prevention

• Share workers’ compensation data with respective departmental management regularly to guide the decision-making process and provide feedback that supports program goals

ADMINISTRATIVE SERVICES | INFORMATION TECHNOLOGY

Account: 640, 641

ABOUT

Fund: Internal Service

The Information Technology Department supports and continuously improves essential technology solutions and infrastructure for enabling day-to-day city operations. IT provides leadership to deliver secure, reliable and cost-effective solutions aligned with City Council priorities and city initiatives.

SERVICES

• Administer and oversee the department’s use of resources and formation of priorities

• Support operations through implementation and support of technology infrastructure

• Implement and support enterprise software applications and systems

• Oversee Data Services including GIS for internal and external data needs

• Manage technology and system implementations and upgrades

• Facilitate business system specialist support to ensure technology meets business needs

• Deliver client services through a service desk, PC support and strategic initiatives

• Support public safety’s unique technology requirements for the Police and Fire departments

• Oversee information technology security policies and practices and threat investigations

RECENT ACCOMPLISHMENTS

• Streamlined printing by reducing the number of

printers from 130 to 95, promoting

• Provided faster city services and improved public meetings by upgrading fiber infrastructure at the Safety Training Center and Carlsbad City Hall to 10Gb speeds, enhancing city operations and ensuring smoother, more reliable technology for public meetings

• Enhanced public Wi-Fi by completing a study and plan to bring outdoor wireless connectivity to Alga Norte Community Park in 2025, improving access for residents and visitors

• Achieved better disaster preparedness by implementing a new backup systems and cloudbased password management to keep city data safe and secure

• Enhanced audiovisual capabilities and supported data analytics initiatives and numerous cyber security programs

• Continued the replacement of traffic equipment to the highspeed Carlsbad Digital Information Network, decreasing downtime and providing reliable connectivity to traffic signals and sensors

• Upgraded enterprise applications including the enterprise permitting and licensing system, public information digital display system, and the utility billing payment portal

• Completed pilots for fleet telematics, facility monitoring and patron analytics solutions

• Finalized initial implementation of an enterprise asset management system for the Utilities Department and replaced aging alerting infrastructure across the city’s fire stations

• Provided responsive IT support, as evidenced by completing over 8,840 ServiceNow tickets, keeping city systems running smoothly and addressing technology needs quickly

• Modernized technology through deployment of more than 105 mobile devices and 412 computers, ensuring staff have the tools needed to provide excellent service to the public

GOALS

• Procure and begin the implementation of an Enterprise Resource Planning and Utility Billing solution to replace the legacy Finance, HR, Timekeeping and Utility Billing applications

• Complete the implementation of a new Computer Aided Dispatch system, real-time crime center for the Police Department and the final phase of the new Enterprise Resource Planning solution

• Implement technology supporting the transition from paper to electronic plan reviews

• Complete projects as identified in the Strategic Digital Transformation Investment Program such as Payment Card Industry Compliance and Citywide Fleet GPS deployment

• Upgrade the RFID system used by the Library & Cultural Arts Department for physical material management, including self-checkout and automated returns

• Further modernization of IT infrastructure for projects supporting improved cybersecurity and data analytics, such as extending the Carlsbad Digital Information Network and the development of the cybersecurity program

Percentage of ticket incidents considered critical .23% 0.0005% < 2.5% of industry standard Organizational Excellence & Fiscal Health

ADMINISTRATIVE SERVICES | MISCELLANEOUS NON - DEPARTMENTAL

Miscellaneous Non-Departmental Expenditures

Account: 00190XX 128XXXX Fund: General Special Revenue - Opioid Settlement Fund

ABOUT

The miscellaneous non-departmental budget accounts for all General Fund transfers to other funds, City Council contingencies and other miscellaneous General Fund expenses, such as outside legal counsel, personnel vacancy savings, citywide final vacation pay and citywide dues and subscriptions.

The Carlsbad Strategic Plan includes a strategic objective to work with the San Diego Association of Governments and the North County Transit District to prioritize, determine costs and work with state and federal representatives to seek funding for preliminary design and technical studies for lowering the railroad tracks in the Village. The fiscal year 2023-24 budget appropriated $5.22 million from the General Fund Reserve and directed staff to request that the San Diego Association of Governments, or SANDAG, submit a fiscal year 2023 Railroad Crossing Elimination Grant Program application for the project as the lead agency. On June 25, 2024, the City Council adopted a resolution authorizing the

City Manager to execute a memorandum of understanding between the City of Carlsbad, SANDAG and the North County Transit District regarding the pursuit of grant funding for the project. COVID-19 related expenditures associated with the previous COVID-19 Economic Recovery and Revitalization Initiative were last incurred in fiscal year 2023-24. Vacancy savings, or anticipated personnel savings over the course of the fiscal year, were first added to the budget in fiscal year 2022-23.

The city first received funds from the Opioid Settlement and Distributor Settlement funds in fiscal year 2022-23 and has since built these distributions in its annual budget. These funds come from the California Opioid Settlements to be utilized for opioid remediation activities.

The personnel related expenditures pertain to certain centrally budgeted items in the General Fund, such as those related to CalPERS, final vacation pay to employees when they terminate employment with the city, and accounting adjustments. This budget item has increased in recent years to better account for actual personnel costs. Accounting for $2 million in vacancy savings also allows for budgeted personnel costs to align with actual personnel costs more closely in the General Fund. Prior year actuals for personnel vacancy savings will consistently remain at zero, assuming actual savings reach the budgeted total.

In accordance with City Council Policy 91, the city targets adopting an annual budget that includes a transfer from the General Fund to one or more of the city's long-term capital funds. The long-term capital funds include the General Capital Construction Fund, the Infrastructure Replacement Fund and the Technology Investment Capital Fund. In fiscal year 2022-23, the city made equal contributions across each of the three funds. In fiscal years 2023-24 and 2024-25, the city budgeted for and made additional contributions to the General Capital Construction Fund to ensure that future projects have adequate funding. The additional respective transfers of $7.4 million and $13.8 million were funded from estimated General Fund surplus. In fiscal year 2025-26, the city has budgeted for increased transfers of $8.9 million to both the General Capital Construction Fund and the Infrastructure Replacement Fund while budgeting $2.4 million in transfers to the Technology Investment Capital Fund. This distribution will help ensure that funding levels align with projected future project expenses.

The City Council authorized one-time transfers to the city’s Fleet Maintenance Fund in fiscal year 2022-23 and the Fleet Replacement Fund in fiscal year 2024-25. The $1.4 million transfer to Fleet Maintenance supported the fund balance amid increasing maintenance costs citywide. The $560,000 transfer to Fleet Replacement supported historical chargebacks related to a Police Department vehicle purchase.

The City Council also authorized several one-time transfers to the city’s Risk Management and Workers’ Compensation funds. In fiscal year 2022-23 the City Council approved total transfers of $1 million to the Risk Management Fund and $8.2 million to the Workers’ Compensation Fund. Spending in both funds exceeded estimates due to several factors, including the volume of claims opened and settled, an increase in personnel, and growing costs for legal defense and experts. The fiscal year 2024-25 budget includes another one-time transfer of $7 million in an effort to increase the program’s reserve to achieve a funded status of approximately 85%. This level of funding is consistent with actuarial standards and in accordance with recommendations from the city’s external auditors.

City Council contingency budget has been set at $500,000 annually in recent years. Prior year actuals remain at zero, as the City Council distributes budget throughout the year to departments citywide as approved by Council action The City Council approved contingency spending in fiscal years 2022-23 through 2024-25 of $7,776, $8,000 and $7,666 respectively. The City Council distributed budget for items like community spirit grants, a special events grant, winning teams grants, and City Council training and travel opportunities

POLICY & LEADERSHIP

The City of Carlsbad follows a council-manager form of government, where elected City Council members provide direction on the policies and regulations that govern the operations of the city. The Policy & Leadership branch includes the following areas:

• Office of the City Council (elected)

• Office of the City Treasurer (elected)

• Office of the City Manager

• Office of the City Attorney

• Office of the City Clerk (elected)

• Communication & Engagement

The City Council appoints the City Manager, City Attorney and members of the city’s boards, commissions and committees. The Office of the City Manager handles administration and oversight of the city organization, including hiring the city workforce, supervising city departments and ensuring the City Council’s policy priorities are met.

Geoff Patnoe City Manager

442-339-2820 manager@carlsbadca.gov

POLICY & LEADERSHIP | OFFICE OF THE CITY COUNCIL

Account: 0010110 Fund: General

ABOUT

As the legislative body of the city, the Office of the City Council establishes the policies and regulations under which the city operates.

SERVICES

The City Council, as a legislative body, approves direction, policies and regulations that govern the operations of the city. The City Council appoints residents to serve on various boards and commissions and may serve as city representatives on regional boards such as SANDAG, North County Transit District and the San Diego County Water Authority.

RECENT ACCOMPLISHMENTS

• Appropriated $850,000 to expand Habitat Management and Fire Mitigation measures to improve wildfire safety to include:

o Immediate clearing of additional non-native brush in city open space,

o Expediting and increasing tree pruning/trimming across the city, and

o Developing a long-term fire mitigation plan for all Carlsbad open space

• Approved expanding the city’s library hours to include Sundays from

to

• Authorized the addition of five sworn positions and one professional staff member to the Police Department to address increased demands for service

• Appropriated $18 million in construction funding for the Monroe Street Pool Renovation and Replacement Project

• Approved the draft master plan for the future Robertson Ranch Park

• Adopted an ordinance amending the Carlsbad Municipal Code to address quality of life concerns related to people living in vehicles

• Accepted a $5.3 million grant as part of a $11.4 million joint project with the City of Oceanside to address encampments along State Route 78

• Adopted City Council Policy 84, Development Project Public Involvement Policy

• Adopted City Council Policy 55, Subcontractor Substitution on Public Works Contracts

• Adopted City Council Policy 80, Electronic Signatures

• Adopted an ordinance that updated city codes and policies to clarify land-use authority over any future project that would expand McClellan -Palomar Airport

• Approved a new agreement with SDG&E and Cabrillo Power I LLC that will give the city six acres of coastal land including Cannon Park and the land next door, along with a lease and funding to help create the Hub Park Trail System along the south shore of the Agua Hedionda Lagoon

• Approved the Climate Action Plan Update, which identifies how Carlsbad will reduce greenhouse gas emissions over the next 20 years

GOALS

The City Council is focused on advancing the goals identified in the city’s 5-Year Strategic Plan. Work is centered around the following five goal themes:

• Economic vitality

• Sustainability and the natural environment

• Community character

• Quality of life and safety

• Organizational excellence and fiscal health

Operating Expenses

POLICY & LEADERSHIP | OFFICE OF THE CITY TREASURER

Account: 0010310 Fund: General

ABOUT

The Office of the City Treasurer provides cash and investment management services which adhere to the city’s Investment Policy and meet the changing investment needs of the city to optimize investment returns, consistent with maintaining safety of principal, ensuring sufficient liquidity and return on investment.

SERVICES

• Manage reporting and oversight of the city’s cash and investments

RECENT ACCOMPLISHMENTS

• Maintained a competitive yet prudent investment yield

• Grew book value of investment portfolio in fiscal year 2024 by 2.57% over prior year

• Increased cash income earned by the investment portfolio in fiscal year 2024 by 31.13% over prior year

GOALS

• Maintain a stable investment portfolio to ensure the preservation of capital in the overall portfolio

• Anticipate and meet the changing investment needs of the city to remain sufficiently liquid to enable the city to meet all operating requirements

• Manage the investment portfolio to realize a yield on investments as a source of additional revenue

• Use innovative solutions to fund modern and secure cash handling solutions even in uncertain times

• Maintain a maximum modified duration of less than 2.2%, which is a measure of investment risk

• Maintain short term investment maturity value (investments maturing within one year) at no less than the equivalent of two-thirds of the current operating budget; this ensures sufficient liquidity to meet the city’s operating needs

Short term investment maturity value as a percentage of the current operating budget

At least 2/3 or 66.6% of operating budget Organizational Excellence & Fiscal Health

Organizational Excellence & Fiscal Health

POLICY & LEADERSHIP |

OFFICE OF THE CITY MANAGER

Account: 0011010 Fund: General

ABOUT

The Office of the City Manager is dedicated to continuous improvement and organizational excellence that fosters the well-being of a high-performing organization that delivers impactful results to further the public good.

SERVICES

The City Manager’s Office provides City Council support, administrative leadership of city operations, policy development management, monitors and manages legislative affairs, and provides general management of public communication and engagement.

RECENT ACCOMPLISHMENTS

• Provided an update to City Council on the status of the goals and objectives in the City Council 5-Year Strategic Plan and launched a new online dashboard that will provide an overview of progress toward the plan’s goals

• Conducted Elected Official Candidates Orientation

• Onboarded newly elected District 2 City Council Member and City Treasurer

• Ensured timely follow up of all City Council and constituent services requests

• Managed a robust local, state and federal intergovernmental affairs program

• Collaborated extensively with neighboring cities and regional organizations to better share best practices for improved cooperation and efficiencies in government

• Tracked approximately 1,850 separate pieces of legislation and issued statements of support or opposition on 37 pieces of legislation to help ensure Carlsbad’s interests are represented in state and federal actions

• Sponsored Assembly Bill 2715 (Boerner) that was signed into law, which authorizes local governments officials to hold a Closed Session on a threat to critical infrastructure controls or critical infrastructure information relating to cybersecurity

• Sponsored Assembly Bill 2234 (Boerner), that was signed into law, which authorizes a local authority within San Diego County to adopt an ordinance or resolution that would prohibit a person under 12 years of age from operating a class 1 or 2 electric bicycle

GOALS

• Ensure the most efficient and effective provision of city services while adapting to changing financial conditions

• Enhance community engagement and transparency efforts to foster authentic civic engagement with residents, organizations and businesses

• Increase intergovernmental collaboration and legislative advocacy with local, state and federal governments to further the City Council adopted legislative platform and advance priority projects

POLICY & LEADERSHIP | OFFICE OF THE CITY ATTORNEY

Account: 0011210 Fund: General

ABOUT

The City Attorney is appointed by the Mayor and City Council. The City Attorney’s Office consists of six attorneys and two legal support staff members. The office primarily practices preventive law, which seeks to minimize the risk of litigation or regulatory violations by anticipating and preventing legal problems. Preventive law focuses on the attorney’s role as adviser and negotiator and emphasizes planning, counseling, collaboration and problem-solving The office also prosecutes criminal violations of the Carlsbad Municipal Code.

SERVICES

• Advise the City Council and city staff on legal matters affecting the city

• Attend City Council meetings, Planning Commission meetings and, when necessary, meetings of other boards and commissions

• Prepare and review ordinances and resolutions

• Negotiate, prepare and approve the form of contracts and legal instruments

• Represent the city in court proceedings and before regulatory and legislative agencies

• Manage the city’s litigation and provide periodic reports to the City Council

• Enforce city laws and regulations

• Support the Police and Human Resources departments in obtaining gun violence and workplace violence restraining orders

RECENT ACCOMPLISHMENTS

• Advised the City Council and city staff on legal matters, including a ballot measure to update Proposition H, a procurement agreement for a new computer-aided dispatch system, the Climate Action Plan Update, labor negotiations, the disestablishment of the business improvement districts and revisions to the zoning code related to airport land uses

• Managed the city’s defense of civil litigation

• Assisted the Utilities Department to perform a comprehensive review of all Carlsbad Municipal Water District ordinances and codify the ordinances so that they are available to staff and the public in a more user-friendly and searchable format

• Prepared or assisted with additions and revisions to the Carlsbad Municipal Code, including prohibiting smoking in multi-unit residences, and strengthening regulations related to massage businesses and TGIF Concert in the Park security

• Assisted with negotiations to reconfigure the SDG&E North Coast Service Center site to free up coastal property for eventual transfer to the city

• Worked with the Legislative Subcommittee, the Intergovernmental Affairs Director and the city’s legislative consultant to pass state legislation to permit closed session briefings on cybersecurity matters

• Collaborated with the Police Department to obtain Gun Violence Restraining Orders as appropriate for domestic violence and mental health incidents

• Cooperated with the Human Resources Department and other city departments to obtain Workplace Violence Restraining Orders as appropriate to protect employees

• Conducted trainings for city staff and city board and commission members on the Brown Act, Public Records Act, Political Reform Act, Government Code Section 1090 conflicts of interest and Form 700 requirements for consultants

• Reviewed and advised on contracts, public records requests and City Council inquiries

• Provided as needed legal support and advice to all city boards, commissions and subcommittees

GOALS

• Provide quality and timely legal advice to all elected and appointed city officials and all branches to assist in minimizing litigation and regulatory risk and in making sound decisions to carry out the city’s mission, vision, values and strategic plan

• Support the City Manager in strategic operations related to ongoing and significant capital projects

• Continue efforts to update the Carlsbad Municipal Code, City Council policies and administrative orders and the Carlsbad Municipal Water District ordinances

POLICY AND LEADERSHIP| OFFICE OF THE CITY CLERK

Account: 0010210, 0011610 Fund: General

ABOUT

The Office of the City Clerk serves as a vital link between city government and those it serves, providing access to public records, publishing City Council agendas, preparing minutes and serving as the city’s election official.

SERVICES

• Prepare City Council agendas

• Prepare minutes

• Complete legal noticing and publishing

• Maintain Fair Political Practices Commission filings

• Maintain Carlsbad Municipal Code

• Maintain, preserve and provide access to all legislative documents

• Administer elections

• Notarize documents

• Provide proof of life certifications

• Ensure public records are archived, preserved and accessible to the public

• Respond to Public Records Act Requests

• Process subpoenas, summons and claims

• Develop and implement records management and document management programs

• Process recorded documents and bond releases

• Provide document research assistance to staff and the public

• Conduct training and provide support to various department personnel designated to scan documents into the city’s records repository

• Manage and coordinate destruction of records past retention

RECENT ACCOMPLISHMENTS

• Responded to 723 Public Records Requests in 2024, a 9% increase from the prior year

• Processed 59 City Council inquiries

• Processed 585 financial disclosure documents

• Added 7,186 records to the city’s public facing document repository

• Updated the Carlsbad Municipal Code relating to the qualifications necessary to serve as City Treasurer and campaign contribution limits

• Conducted the 2024 General Municipal Election

• Launched the Board and Commission Application Portal for vacancy recruitments

• Revised the city’s Electronic Signature Policy

GOALS

• Obtain a digital posting board to push out all agendas electronically throughout the city for greater accessibility in conformance with the Brown Act

• Finalize and implement the agenda management workflow in Laserfiche

• Automate the conforming process as a workflow in Laserfiche

• Automate the records destruction approval routing process

• Evaluate feasibility of offering passport application acceptance services

• Conduct citywide training on the Brown Act, Public Records Requests and staff report preparation

• Continue to systematically update the Carlsbad Municipal Code and City Council Policies

• Provide greater access to public records on the city website

• Maintain and update the Records Retention Schedule and provide city staff with training

• Collaborate with various departments on further digitizing their documents

• Continue to conduct departmental records audits

POLICY & LEADERSHIP | COMMUNICATION & ENGAGEMENT

0011012, 0011016 1381010

ABOUT

The city’s communication and engagement program fosters open, two-way communication with the community about city issues, programs and services, leading to a more responsive and transparent government.

SERVICES

• Develop community engagement programs that facilitate early and meaningful public input in city government decision making

• Promote awareness of city issues, programs, services and initiatives

• Write and edit staff reports and responses to constituent inquiries to ensure information presented is clear, complete and accurate

• Produce video recordings and livestream all City Council meetings and meetings of boards, commissions and committees

• Manage a dedicated 24/7 government cable TV channel

RECENT ACCOMPLISHMENTS

• Successfully engaged community members on issues including the annual budget, Robertson Ranch Park, Safe Routes to Schools, the Climate Action Plan Update, drive-thru rules and Barrio public art and lighting projects

• Communicated to residents about 13 major construction projects, including detour information, construction schedules and project benefits

• Developed and distributed 51 editions of the city’s e-newsletter, recapping City Council actions, upcoming events and other news

• Produced and distributed 261 news releases and articles about city services and programs

• Increased net new YouTube subscribers by 437 and total watch time 17% over last year

• Recognized with 5 regional awards recognizing community engagement programs, community newsletters and publications and employee communication

• Posted 713 updates on Facebook and increased followers to 52,909, with a 12% increase in reach

• Published 724 updates on Instagram and increased net new followers by 8% to 22,004

GOALS

The Communication & Engagement Department’s performance measures support all five goals in the City Council’s 5-Year Strategic Plan by promoting awareness of each and opportunities for the community to become engaged in individual initiatives

STRATEGIC DIGITAL TRANSFORMATION INVESTMENT PROGRAM

The Strategic Digital Transformation Investment Program, or SDTIP, is a comprehensive approach to planning for and funding digital transformation efforts throughout the city. Several documents inform this program, including the City Council-approved Connected Carlsbad: An Inclusive City Innovation Roadmap, the Internal Digital Information Network Action Plan and the Information Technology Strategy, which are complemented by a five-year projected roadmap of digital transformation investments The SDTIP is the strategic plan for technology and digital transformation combined with project descriptions, costs, funding sources and timelines. The purpose of this program is to provide for an annual investment strategy, not a commitment to spending, that outlines a five-year expenditure plan for future digital transformation and technology projects and the corresponding revenues necessary to pay for them.

Connected Carlsbad: An Inclusive City Innovation Roadmap

In January 2019, city staff presented Connected Carlsbad: An Inclusive City Innovation Roadmap, designed to provide a high-level, organized guide outlining the principles that matter to the city in creating a more connected community. This roadmap and its associated action plan were based on a combination of items, including:

• City Council approved projects,

• existing city documents,

• previous Information Technology assessments and interviews with departments, and

• a global scan of other cities and best practices that have emerged from leading smart city thinkers and Carlsbad-specific community engagement.

The SDTIP expands on the Connected Carlsbad Roadmap to include a strategy for evaluating and prioritizing projects and a five-year investment roadmap that includes estimated costs and timelines. This new investment program continues to be organized into the five primary goal areas approved by City Council in Connected Carlsbad, listed below.

• Pursue Communitywide Digital Transformation focuses on the foundational elements, including connectivity, up-to-date hardware and software, and a robust security strategy while providing an aspirational vision for the future.

• Build Capacity for Data-Driven Government focuses on the policies, procedures and staffing necessary for the city to fully capture the value of emerging models of data analytics.

• Foster a Vibrant Civic Engagement Culture leverages the first two goals by adopting a human-centered approach. It ensures that as the city uses data and technology, it respects people's privacy and fosters a culture where residents, organizations, and businesses are actively engaged and invested in the community and its future.

• Enhance Accessibility and Transparency recognizes that open government and approaching problem-solving from an accessibility perspective leads to better outcomes for all.

• Promote Safety and Sustainability through Connectivity leads to understanding the interconnected nature of our communities that can achieve environmental, mobility and sustainability goals when approached in a cross-departmental and community informed manner.

Once the City Council adopts the proposed SDTIP, projects receive an appropriation that authorizes spending in the amount specified for the adopted fiscal year only. Estimated budget information is shown for a five-year period to provide the most comprehensive information about known future projects. Spending authority in future years is not granted until adoption of the annual proposed SDTIP budget associated with each year.

INVESTING IN DIGITAL TRANSFORMATION

As the city continues to grow and develop, the use of technology has also grown exponentially over the last two decades. The SDTIP outlines the financial resources needed to ensure that the technology infrastructure is in place to enable the city to provide services to the community Prudent financial planning will ensure that ongoing funding for investment in technology is available

PROJECT EVALUATION

Making decisions on technology implementations is a challenging and complex task. The challenging nature of these decisions is exacerbated by the expanding reach of technology and the increasingly interdisciplinary nature of emerging technologies. A major component of the SDTIP is the establishment of a cross-departmental approach to technology leadership to evaluate, prioritize, budget for and adopt digital transformation efforts A new administrative order has been developed that provides a collaborative forum for key staff to validate and prioritize technology implementations. This approach also provides a structured venue to explore how particular configurations of technology implementation may positively or negatively affect others within the organization. The process to evaluate digital transformation initiatives is ongoing and meetings may be held on a monthly, bimonthly or quarterly basis depending on the need

Several factors are considered when putting together projects for the five-year program. All digital transformation and technology projects shall be consistent with:

Criteria

Proposed projects are evaluated and prioritized by a set of criteria that include:

Alignment with City Council goals and IT strategic plans, architecture, security and technology standards, including legislative and regulatory mandates, and administrative goals

Coordination of IT investments across the enterprise to avoid duplication, maximizing the return on investment and increasing efficiency

Effective articulation of the business case including valid operational benefits of the project

Accuracy and reasonableness of cost and benefit estimates

Consideration of potential project risks and identification of appropriate means to manage those risks

Adherence to standard project management practices

Capacity of staffing resources to implement the project

As the SDTIP is implemented throughout the year, staff continually re-evaluate projects’ scopes, costs and schedules to responsibly and cost-effectively manage city resources.

STRATEGIC DIGITAL TRANSFORMATION INVESTMENT PROGRAM PROJECTS

The following contains information about the projects in the SDTIP. Full project pages are provided for the major new projects being requested for fiscal year 2025-26 and prior approved major projects that have changes in funding needs or project requirements. The estimated annual operational and replacement cost increases shown on each project page represent a departmental budgetary increase generally to the Information Technology Department and its internal service citywide chargeback separate from Capital Technology Fund activity Projects for fiscal year 2025-26 and beyond are included in the graphs and tables provided but will not have full project pages until the first year of funding. Projects with no changes and projects that have been completed or removed going into fiscal year 2025-26 are listed below. Full details of these projects can be found in the appropriate prior fiscal year budget documents based on when they were new or had changes

Fiscal Year 2021-22 Continuing Projects – No Changes

The following project was approved during the fiscal year 2021-22 SDTIP and has no changes to its funding needs or project requirements and is still in process This project is included in the totals of the various graphs and charts shown in the SDTIP

• Online Permitting/Electronic Reviews, also known as E-Reviews

Fiscal Year 2022-23 Continuing Projects – No Changes

The following projects were approved during the fiscal year 2022-23 SDTIP and have no changes to their funding needs or project requirements and are still in process. These projects are included in the totals of the various graphs and charts shown in the SDTIP.

• Civic Engagement with Open Data

• Computer Aided Dispatch

• Enterprise Asset Management

• Live 911

• Utility Billing Portal

Fiscal Year 2023-24 Continuing Projects – No Changes

The following projects were approved during the fiscal year 2023-24 SDTIP and have no changes to their funding needs or project requirements and are still in process. These projects are included in the totals of the various graphs and charts shown in the SDTIP.

• Business Process Automation

• Expansion of Yardi

• Records Digitization

Fiscal Year 2024-25 Continuing Projects – No Changes

The following projects were approved during the fiscal year 2023-24 SDTIP and have no changes to their funding needs or project requirements and are still in process. These projects are included in the totals of the various graphs and charts shown in the SDTIP.

• Construction Waste Management

• Data Governance and Operations Analytics

• Payment Card Industry (PCI) Compliance

• Professional Technical Services and Data Project Delivery

• RFID Replacement

• Risk Management Solution

• Senior Center Resource Access Enhancement

• Station Alerting Equipment Replacement

• Virtual Reality (VR) Training

Completed, Removed or Delayed Projects

The following projects were completed, removed or delayed during fiscal year 2024-25. The completed projects are not part of the totals of the various graphs and charts Removed projects are only included if the project was previously funded; the removed funding is shown as a reduction in the current year’s appropriations. If a project was previously funded and new funding was delayed, the appropriate graphs and charts reflect the updated funding year

Completed

• Fleet Telematics

• Narcotic Safe Migration

• Outdoor Wireless Study

• Patron Print/Copy/PC Management

• Staff Citywide Printer Replacement

Removed

No previously funded projects were removed

Delayed

The following project was previously approved and funded is being delayed:

• Discovery Management Assessment

ESTIMATED TOTAL APPROPRIATIONS BY GOAL

Going into fiscal year 2025-26, there are 40 continuing and new projects planned over the next five years at an estimated total cost of $37.9 million Included in the $37.9 million is approximately $16.8 million in estimated new costs over the course of the same time frame to provide additional funding for the continuation of existing projects as well as funding for new projects. Within the $16.8 million is approximately $5.4 million of estimated new appropriations for fiscal year 2025-26 for these same projects.

Estimated Total Projects Costs by Goal

FY 2025 - 26 to FY 2029 - 30

$37.9 million

Build Capacity for Data - driven Decision Making , $1,528,000 - 4%

Pursue Communitywide Digital Transformation, $19,967,584 - 53%

Enhance Accessibility and Transparency, $1,261,000 - 3%

Foster a Vibrant Civic Engagement Culture , $1,357,600 - 4%

Promote Security and Sustainability through Connectivity, $13,762,026 - 36%

Fiscal year 2025-26 estimated total appropriations by project goal

Pursue Communitywide Digital Transformation

$20.0 million

This goal includes updating connectivity, up-to-date hardware and software, and a robust security strategy

Build Capacity for Data-Driven Decision Making

$1.5 million

This goal’s projects include the policies, procedures and staffing necessary for the city to fully capture the value of emerging models of data analytics It builds a comprehensive approach to citywide data management to enable data-rich key performance metrics and effective operation of city departments. A data policy and resources will be created to align departments with standards of data cataloging for compliance ease of data sharing

Foster a Vibrant Civic Engagement Culture

$1.3 million

The city’s civic engagement culture builds upon the first two goals with a human-centered perspective to use data and technology in a way that respects people and their privacy Projects in this category will support a vibrant culture where residents, organizations and businesses are invested in their community and its future.

Enhance Accessibility and Transparency

$1.3 million

This goal recognizes that open government and approaching problem-solving from an accessibility perspective leads to better outcomes for all. Projects in this category include Civic Engagement with Open Data, Online Permitting/Electronic Reviews

Promote Security and Sustainability through Connectivity

$13.8 million

Projects in this goal include the annual replacement of hardware and technology infrastructure, a Facility Security Master Plan, the replacement of the Police Computer Aided Dispatch System, and an enhancement to the 911 emergency system.

PROJECTS

P URSUE COMMUNITYWIDE DIGITAL TRANSFORMATION

Core System Modernization

Project Benefits

Managing Department: Information Technology

Estimated Annual Costs Increase/(Decrease): Operational $50k - $110k Replacement None

Without systems that can talk to each other, the city wastes time and resources manually compiling and integrating data. This greatly affects the city’s ability to make data-driven decisions, which are needed to ensure the highest and best use of taxpayer resources. Having fewer systems that consolidate the city’s core business functions will enable streamlined business processes and provide more timely access to data and information. It will also enhance operations and reduce the inefficiencies of employees having to learn and operate multiple systems.

About This Project

This project provides for the consolidation and replacement of the city’s core systems. There are approximately 20 core systems including the city’s financial, human resources, payroll, budget, asset and work order management, licensing and permitting, utilities operations, computer-aided dispatch, land management, and program-event management. Rather than operate many systems with narrow applicability, the city is evaluating ways to consolidate its core systems as legacy applications are replaced. This may mean accelerated replacement for certain systems. The goal is to reduce redundancy and inefficiency associated with operating many different systems with different vendors.

Consolidating down to a few systems that seamlessly integrate data and provide a more uniform interface will improve the experience of city employees and the public. The scope of this multi-year initiative includes the analysis, selection, purchase and implementation of the software and hardware necessary to consolidate, replace and integrate these systems with as few systems as possible while maintaining or enhancing existing capabilities.

In April, the City Council approved the agreements associated with Core Systems Modernization and the implementation project officially kicked off in May. Work to implement the new solutions is ongoing and the new systems will be coming online in the fall of 2026. City staff are currently requesting funding of $3.0 million in fiscal year 2025-26 for acquisition and initial implementation and will request an estimated $1.6 million in funding for the continued implementation of a new system as part of the fiscal year 2026-27 SDTIP.

Staff estimate that operational costs will increase by $50,000 to $110,000 annually, but there will be no equipment replacement costs associated with the project.

Connected Carlsbad Goal

Pursue Communitywide Digital Transformation

Digital Information Network

Project Benefits

The city’s upgraded digital information network provides faster, more secure connections that support a wide range of essential services. It powers critical operations such as public safety systems, email, internet access, traffic management systems, and internal city communications. It also enables reliable Wi-Fi and internet service at public facilities, helping to improve access for both staff and the community. Overall, this investment supports more efficient city operations and better service delivery to residents.

About This Project

The city has partnered with Crown Castle to build a robust and modern digital information network that connects city staff, facilities and services. Since 2019, the city has transitioned from a leased third-party network to a system it owns and manages, improving reliability, reducing long term costs and enhancing cybersecurity.

The first phases of the project are complete. The city is currently working on phase two and is now preparing for phase three, as originally approved by the City Council. This next phase includes important upgrades to the SCADA system, which helps monitor and manage water utilities and infrastructure. This project also includes plans to expand outdoor wireless capabilities at parks around the city

For fiscal year 2025–26, the IT Department included $110,000 in its budget request for new maintenance costs for continued expansion of the network. Beginning in fiscal year 2026–27, annual ongoing maintenance and replacement costs are estimated to be $75,000 and $100,000, respectively. These expenses will need to be accounted for in the department’s long-term operating and replacement budgets to ensure the network remains modern, efficient, and secure into the future.

Connected Carlsbad Goal

Pursue Communitywide Digital Transformation

BUILD CAPACITY FOR DATA - DRIVEN DECISION MAKING

Facility Monitoring and Management

Project Benefits

About This Project

Managing Department:

Innovation & Economic Development

Fleet & Facilities

Library & Cultural Arts

Estimated Annual Costs

Increase/(Decrease):

Operational Not known

Replacement Not known

FY28-29

Automated facility monitoring will provide city staff with the ability to remotely monitor the condition, temperature and power at over 100 city facilities . The system will alert staff to changing conditions in city facilities, allowing them to respond and limit any potential damage that may occur.

This project includes the identification, procurement and implementation of a citywide facility monitoring and management solution for city facilities.

Staff are currently piloting a solution at the Police and Fire Headquarters. The additional funding request for fiscal year 2025-26 is being requested to support city-wide implementation.

It is not currently feasible to determine any operational or replacement costs because they depend on the recommendations of the request for proposal process; staff will identify more definitive costs during the request for proposal process.

Connected Carlsbad Goal

Build Capacity for Data-Driven Decision Making Project

Guest Facility Usage Analytics

Project Benefits

Managing Department:

Library & Cultural Arts

Parks & Recreation

Estimated Annual Costs

Increase/(Decrease):

Operational Not known

Replacement Not known

Currently, the ability to track facility usage is limited to a count of people that walk through the public entrance of a city library. Once a guest enters the facility, the city does not have any data to identify what areas of a facility are being used or not used. Additionally, the existing system is past its end of life, is no longer supported and needs to be replaced. Replacing the existing system with a newer solution that leverages innovative technology will give the city data and analytics that will provide greater insight into how the community uses city facilities. With this data, the city will be able to configure public spaces to maximize their use.

About This Project

This project will identify, procure and implement a citywide guest facility usage analytics solution for city library facilities, parks and recreation centers Staff are currently working on an agreement with the selected vendor for a pilot at Pine Avenue Community Park and the Carlsbad City Library Learning Center If the pilot is successful, the solution will be expanded for implementation at additional city library facilities, parks and recreation centers Additional funding request for fiscal year 2025-26 is being requested to support the expanded implementation.

Operational and replacement costs will be identified once the scope of the expanded implementation is determined.

Connected Carlsbad Goal

Build Capacity for Data-Driven Decision Making

FOSTER A VIBRANT CIVIC ENGAGEMENT CULTURE

Audiovisual Upgrades

Project Benefits

Project

Managing Department: Information Technology

Estimated Annual Costs

Increase/(Decrease):

Operational None

Replacement Not known

This project allows for the standardization of audiovisual equipment within the city’s work facilities so personnel can conduct business with internal and external resources virtually without the need to move between facilities for meetings.

About This Project

This project provides for upgrades and growth of the city’s audiovisual equipment. The work landscape has changed audiovisual equipment that previously supported in-person meetings in a room are now supporting meetings held virtually. The IT Department will update and maintain audiovisual equipment to meet this new work environment and other necessary enhancements to legacy technology.

There are no changes to annual operational costs associated with this project. City staff cannot feasibly estimate replacement costs, if any, until after the new equipment is purchased.

Connected Carlsbad Goal

Foster a Vibrant Civic Engagement Culture

ENHANCE ACCESSIBILITY AND TRANSPARENCY

Early Literacy Interactive Technology

Project Benefits

Early literacy technology solutions at city libraries include desktop computers, touch tables, kiosks and tablets that deliver interactive, cooperative play and learning experiences to children aged 3-8 years to help build literacy and numeracy skills.

About This Project

This project will identify and procure new technology solutions to meet the early literacy needs of library patrons. The existing early literacy stations that are installed in the library are at end of life, are limited to a single user per station and lack the ability to provide cooperative play with other children or with parents and caregivers. There is an estimated $4,800 ongoing operational cost associated with this project, that will begin in fiscal year 2026-27. It is not currently known whether the project will result in additional equipment needs requiring replacement funding

Connected Carlsbad Goal

Enhance Accessibility and Transparency

Records Management Archive Solution

Managing Department:

Estimated Annual Costs

Increase/(Decrease):

Project Benefits

The State of California updated section 22620 of the California Code of Regulations to require official city documents that use electronic technologies for storage to be kept in systems that are considered trustworthy. A trustworthy system, as defined by the Association for Intelligent Information Management, is an electronic document management system that:

• provides two separate copies of each official electronically stored record,

• utilizes hardware and software methodologies that prevent the unauthorized addition, deletion or modification of a record through its approved record retention life cycle, and

• ensures that one copy of each electronically stored record is retained in a storage location that prohibits the unauthorized addition, deletion or modification for a record through its approved record retention life cycle

The city’s existing electronic document management system, Laserfiche, has software that allows the system to be configured to grant rights and user access that prevents the unauthorized addition, deletion or modification for a record through its approved retention cycle. However, the existing Laserfiche environment does not have a data storage location that prohibits the unauthorized addition, deletion or modification for a record through its approved retention cycle.

About This Project

The project includes the acquisition and implementation of a data storage solution that will meet the state’s guidelines for a trustworthy system while working with the existing Laserfiche system Staff estimate that operational costs will increase by $30,000 annually beginning in fiscal year 2026-27. It is not currently known whether the project will result in additional equipment needs requiring replacement funding

Connected Carlsbad Goal

Enhance Accessibility and Transparency

Website Redesign

Project Benefits

Ensure the city’s website is compliant with state and federal accessibility requirements

About This Project

Work with the city’s website provider to make design modifications that meet accessibility requirements. California Assembly Bill 434 requires municipal websites to meet Web Content Accessibility Guidelines. While the city’s existing website provides accessibility tools and meets a broad range of accessibility requirements, this project will ensure that our site fully follows Web Content Accessibility Guidelines and is accessible to all city residents and customers.

Connected Carlsbad Goal

Enhance Accessibility and Transparency

P ROMOTE SECURITY AND SUSTAINABILITY THROUGH CONNECTIVITY

Annual Hardware and Infrastructure Replacement

Project Benefits

Managing Department: Information Technology

Estimated Annual Costs

Increase/(Decrease):

Operational None

Replacement None

Citywide hardware and infrastructure changes are necessary and ongoing. Replacement equipment is needed to support the city's technology infrastructure and department-specific needs.

About This Project

This project provides replacement equipment funding for scheduled replacement of laptops, desktops, internal servers, routers, switches and other network and data center requirements.

There is no increase or decrease in operational costs associated with the annual replacement program. Due to the circular nature of the replacement program, replacement costs fluctuate annually depending on the hardware life cycles which can range from three years to 10 years.

Connected Carlsbad Goal

Promote Security and Sustainability through Connectivity

Cybersecurity Program Development

Project Benefits

Managing Department: Information Technology

Estimated Annual Costs

Increase/(Decrease):

Operational Not known

Replacement Not known

As a result of internal assessments and evaluations by external parties, city staff have identified certain initiatives within the six functions of the cybersecurity framework to translate into projects. Implementation of these projects will require funding for assessments and evaluations, implementation, and staff training. Once the enhanced security infrastructure is in place, operational costs will move to the operations budget. City staff identified and planned the following projects for implementation:

• Disaster Recovery program assessment and development

• Migration to a cloud-native security information and event management solution

• Cybersecurity governance program

• External attack surface visibility and risk reduction capabilities

• Expanded managed security service provide support for cloud monitoring of the security information and event management solution

• Incident response procedure development and training

About This Project

The cybersecurity program provides support and protection to the City of Carlsbad so it can successfully accomplish its mission. As the threat landscape is changing and getting more sophisticated in lockstep with advances in technology, we need to ensure the city’s cybersecurity program is robust enough to keep threat actors from causing harm to the city.

To ensure we address the different areas and aspects of cybersecurity, city staff have developed and adopted an approach based on the National Institute of Standards and Technology Cybersecurity Framework to cybersecurity defense program which covers six functions:

• Identify – Develop the organizational understanding to manage cybersecurity risk to systems, assets, data and capabilities. The activities in this function are foundational for effective use of the Framework. Understanding the business context, the resources that

support critical functions and the related cybersecurity risks enables an organization to focus and prioritize its efforts, consistent with its risk management strategy and business needs. Examples of outcome categories within this function include Asset Management, Business Environment, Governance, Risk Assessment and Risk Management Strategy.

• Protect – Develop and implement the appropriate safeguards to ensure delivery of critical infrastructure services. The Protect function supports the ability to limit or contain the impact of a potential cybersecurity event. Examples of outcome categories within this function include Access Control, Awareness and Training, Data Security, Information Protection Processes and Procedures, Maintenance, and Protective Technology.

• Detect – Develop and implement the appropriate activities to identify the occurrence of a cybersecurity event. The Detect function enables timely discovery of cybersecurity events. Examples of outcome categories within this function include Anomalies and Events, Security Continuous Monitoring, and Detection Processes.

• Respond – Develop and implement the appropriate activities to act regarding a detected cybersecurity event. The Respond function supports the ability to contain the impact of a potential cybersecurity event. Examples of outcome categories within this function include Response Planning, Communications, Analysis, Mitigation and Improvements.

• Recover – Develop and implement the appropriate activities to maintain plans for resilience and to restore any capabilities or services that were impaired due to a cybersecurity event. The Recover function supports timely recovery to normal operations to reduce the impact from a cybersecurity event. Examples of outcome categories within this function include Recovery Planning, Improvements and Communications.

• Govern – Establish and maintain the organizational oversight to manage and align cybersecurity activities with mission and stakeholder expectations. The Govern function supports effective decision-making through defined roles and responsibilities, strategy and policy development, and oversight of cybersecurity and supply chain risk. Examples of outcome categories within this function include Organizational Context, Risk Management Strategy, Supply Chain Risk Management, Roles and Responsibilities, Policy, and Oversight.

At this time, and depending on the types of programs implemented over the course of the project, city staff cannot feasibly determine any operational or replacement costs for fiscal year 2026-27 and beyond. No new operational or replacement costs were requested for the fiscal year 2025-26 budget cycle.

Connected Carlsbad Goal

Promote Security and Sustainability through Connectivity

MINOR PROJECTS

Foster a Vibrant Civic Engagement Culture

3D Concepts & Walkthroughs

This project involves the implementation of a solution that provides the ability for park planners to generate 3D concepts and walkthroughs for specific projects

Enhance Accessibility and Transparency

Records Management Module

This project implements the records management module of Laserfiche. The new module provides advanced and automated document lifecycle management.

FUTURE PROJECTS

Estimated fiscal year 2025-26 through 2029-30 appropriations by goal

The City of Carlsbad’s SDTIP for fiscal year 2025-26 to fiscal year 2029-30 outlines 40 projects at an estimated total cost of $37.9 million. Of the $37.9 million, $16.8 million is for new or increased funding for projects over the next five years. The information provided for future years reflects the most comprehensive snapshot of known or anticipated future projects as well as associated estimated costs.

Estimated Future Projects Costs by Goal

FY 2025 -26 to FY 2029 -30 $16.8 million

Build Capacity for Datadriven Decision Making , $415,000 - 2%

Pursue Communitywide Digital Transformation, $5,650,000 - 34%

Enhance Accessibility and Transparency, $288,000 - 2%

Foster a Vibrant Civic Engagement Culture , $532,600 - 3%

Promote Security and Sustainability through Connectivity, $9,949,602 - 59%

Estimated Fiscal Year 2025-26 Appropriations by Goal

The fiscal year 2025-26 SDTIP outlines $5.4 million in new appropriations for fiscal year 2025-26 to provide additional funding for the continuation of existing projects as well as funding for new projects.

Requested

FY 2025 -26 Appropriations by Goal

$5.4 million

Foster a Vibrant Civic Engagement Culture, $132,600 - 2%

Pursue Communitywide Digital Transformation, $3,250,000 - 60%

Enhance Accessibility and Transparency, $288,000 - 5%

Build Capacity for Data - driven Decision Making, $250,000 -

Promote Security and Sustainability through Connectivity, $1,490,602 - 28%

Estimated fiscal year 2026-27 through 2029-30 pending current or new projects with future funding requests

The projects listed in the table below represent projects that have been presented to the SDTIP Committee but do not require funding or have been delayed for the fiscal year 2025-26 budget year. These projects will be reevaluated for the fiscal year 2026-27 budget year and, if approved for funding in fiscal year 2026-27, will then have a project page included as part of the SDTIP in the appropriate subsequent fiscal year. These projects have been included in the estimated five-year tables and funding projections.

Project Name

Connected Carlsbad Goal Abbreviations

Build Capacity for Data-driven Decision Making = BCDDM

Enhance Accessibility and Transparency = EAT

Foster a Vibrant Civic Engagement Culture = FVCEC

Promote Security and Sustainability through Connectivity = PSSC

Pursue Communitywide Digital Transformation = PCDT

Funding Source Abbreviations

Information Technology Replacement Fund = ITRF

Technology Investment Capital Fund = TICF

Utilities Enterprise Funds (Operating or Capital) = UEF

Funding Source Not Identified = Pending

FIVE - YEAR SCHEDULE OF PROJECTS BY CONNECTED CARLSBAD GOAL

Connected Carlsbad Goal

Pursue Communitywide Digital Transformation

Pursue Communitywide Digital Transformation Total

Build Capacity for Data-driven Decision Making

Build Capacity for Data-driven Decision Making Total

Foster a Vibrant Civic Engagement Culture

Foster a Vibrant Civic Engagement Culture Total

Enhance Accessibility and Transparency

Enhance Accessibility and Transparency Total

Promote Security and Sustainability through Connectivity

Promote Security and Sustainability through Connectivity Tota

Projects Total

Funding Source Abbreviations

Information Technology Replacement Fund = ITRF

Technology Investment Capital Fund = TICF

Utilities Enterprise Funds (Operating or Capital) = UEF

Funding Source Not Identified = Pending

FIVE - YEAR SCHEDULE OF PROJECTS BY FUND

Funding Source

ProjectsTotal

Connected Carlsbad Goal Abbreviations

Build Capacity for Data-driven Decision Making = BCDDM

Enhance Accessibility and Transparency = EAT

Foster a Vibrant Civic Engagement Culture = FVCEC

Promote Security and Sustainability through Connectivity = PSSC

Pursue Communitywide Digital Transformation = PCDT

PROJECT FUNDING SOURCES

Technology Investment Capital Fund – Funds set aside on a yearly basis to fund ongoing SDTIP digital transformation and technology projects. Revenue is mostly comprised of an annual General Fund transfer, estimated based on a portion of the transfer of 6% of General Fund revenues, in accordance with City Council Policy 91, Long Term General Fund Capital Funding Policy.

Information Technology Replacement Fund – Funds are collected annually from the city’s operating departments as part of the IT Department internal service fund chargeback; charges are based on an asset’s lifecycle and original cost. These funds are used to replace assets at the end of their useful lives

Utilities Enterprise Funds (Operating or Capital) – For information regarding the Utilities Enterprise Funds, please see the Public Works Section of the Fiscal Year 2025-26 Operating Budget and for the Capital Funds please see the CIP Section of the Fiscal Year 2025-26 Operating Budget

Funding Source Not Identified – The funding for a project has not been identified or established at this time. Once the funding source is identified or established the project will reflect that source.

PROJECTED FUND BALANCES

Beginning Available Balance

Ending Available Balance

Balance Available for Future Projects

INFORMATION TECHNOLOGY DEPARTMENT REPLACEMENT FUND FUNDS AVAILABILITY PROJECTION

Beginning Available Balance

Ending Available Balance

Estimated Available Funds

REVENUE PROJECTIONS SCHEDULE BUDGET EXPENDITURE SCHEDULE

PROJECT ESTIMATED OPERATIONAL REQUIREMENTS

The projects listed on the table below represent projects that have been determined will have or may have operating budget impacts in the fiscal year identified. Projects that have zero shown for each fiscal year are pending an estimate due to the possible solution having too many unknown variables. Once a more exact solution is identified, the operational estimate will be updated. As the fiscal years identified on the table become the next budgeting year, the Information Technology Department will request additional operating budget

FISCAL YEAR 202 5-26 ROADMAP

FIVE - YEAR ROADMAP

FIVE - YEAR ROADMAP (continued)

CAPITAL IMPROVEMENT PROGRAM

The City of Carlsbad Capital Improvement Program reflects the city’s ongoing commitment to maintaining the highest standards of quality facilities for our community today and in the future. It is a planning document, not a commitment for spending. The program outlines the expenditure plan for future capital projects and the corresponding revenues to pay for those expenditures.

Projects that are shown in the CIP are generally defined as any construction, rehabilitation or replacement of major infrastructure such as streets, libraries, parks, fire stations and administrative facilities, water, sewer and drainage facilities, and other facilities that are located on or in the ground. In most cases, the total construction cost of each of these assets is recorded and tracked as part of the city’s inventory of capital infrastructure assets and other city-owned property.

The CIP budget covers a five-year period Once the City Council adopts the proposed annual CIP budget, projects receive an appropriation that authorizes spending in the amount specified for the adopted fiscal year only. For projects related to the strategic plan or considered a critical need, construction funding is shown as an estimate the City Council does not authorize an appropriation when the annual CIP budget is adopted. Instead, staff request an appropriation for the construction phase when the design is complete and the project is ready to be bid for construction Estimated budget information is shown for a 15-year period to provide the most comprehensive information about known future projects. Spending authority in future years is not granted until adoption of the annual proposed CIP budget associated with each year.

INVESTING IN OUR QUALITY OF LIFE

The City of Carlsbad’s philosophy is to take a proactive, long-range planning approach to building high quality facilities and infrastructure that support the needs and priorities of the community. Prudent financial planning has ensured ongoing funding to modernize, repair, and replace existing infrastructure projects through numerous asset management programs. Since the city applies a comprehensive asset management approach to infrastructure planning and budgeting, it can avoid more costly unexpected repairs or operational needs and minimize the burden on emergency expenditures.

As the city grew and developed, there was a corresponding increase in the demand for developmentrelated services and new facilities. To ensure that the necessary infrastructure and facilities are built on a schedule that meets or exceeds this demand, the citizens of Carlsbad adopted a Growth Management Plan in 1986. The plan was established to manage development within the city by linking residential, commercial, and industrial development directly to standards for availability of public services and facilities.

The Growth Management Plan states that unless a standard level of facilities is available to meet new demands resulting from the city’s growth, development cannot proceed. Recently, the city considered certain options pertaining to growth management, such as imposing a moratorium on building if infrastructure falls short of established standards due to development. However, this was determined to be impermissible by the California Housing and Community Development Department, per Senate Bill 330, Housing Crisis Act of 2019, which became effective on Jan. 1, 2020.

The detailed level of planning required by Growth Management has allowed the city’s CIP to anticipate the funding needed for capital improvements in the next 15 years. Facilities such as community centers, parks and fire stations have been constructed and opened to the public under this program.

The CIP has been designed to specifically address areas where new or expanded facilities will be needed to maintain compliance with the adopted performance standards. With the adoption of the fiscal year 2025-26 CIP, compliance with the Growth Management Plan is continued.

In October 2022, the City Council approved a five-year strategic plan with policy goals to reflect the most important priorities of the community. The CIP budget includes the priority construction projects identified in the strategic plan.

PROJECT EVALUATION

Development of the CIP is a team effort involving all operational departments, the City Manager’s Office, the City Council, and the community. Community feedback on infrastructure needs is considered and incorporated as appropriate. The CIP is fully vetted at multiple levels of the city organization by appropriate staff using an inclusive and transparent process and reviewed on a quarterly basis.

Projects were evaluated for the ability to deliver realistic outcomes considering anticipated revenue decreases in some capital funding sources. The city remains focused on matching existing resources with reasonable and achievable project schedules while continuing to work on projects that are already underway. Existing project balances were evaluated to determine whether additional funding was needed or if the existing balances were adequate. Funding recommendations were matched against project timing and balanced against available funding sources.

As the CIP is implemented throughout the year, staff continually re-evaluate projects’ scopes, costs and schedules to responsibly and cost-effectively manage infrastructure assets at the required levels of service throughout their lifecycle. Recommendations for project funding consider current project status, project scheduling and sequencing requirements, project constraints, and current staff capacity. Project charters are updated to include project description, location, summary of need, justification including any legislative or policy citations, cost estimates, and project scores.

FISCAL YEAR 202 5 - 2 6 APPROPRIATIONS

The CIP is organized by the following project categories:

Plan • Priority projects

Health & safety

Annual Allocation

Enterprise

Drainage

• In service • Warranty • Monitoring

The five-year CIP budget is based on project phase for Strategic Plan and Critical Need projects. This means rather than budgeting for the entire cost of a project well in advance of when the project is scheduled to begin, the City Council will be asked to consider appropriating money phase by phase. Phases include scoping (which includes feasibility studies and needs assessment), conceptual design (which includes environmental permitting and up to 30% preliminary engineering/design completion), final design (which includes 100% engineering/design completion and final engineer’s estimate) and construction.

For example, as part of the annual budget process, city staff will request appropriations for a new project, starting with initial scoping. This typically involves early planning work and a feasibility analysis. When that work is completed, staff will return to the City Council to request appropriation for conceptual design. When that is done, staff will return to the City Council to request funding for final design, and so on.

Once plans and specifications for a project have been prepared, a more accurate engineer’s estimate for construction costs can be produced that considers the most up-to-date market conditions. For strategic plan and critical need projects, requesting appropriation of construction funding at the time staff request approval of plans and specifications and authorization to bid allows the city to ensure that the approved project budget will align with the most accurate and timely cost estimates available. The 15-year forecast will assist the City Council with making informed decisions regarding the city’s ability to fund current and future projects.

In the fiscal year 2025-26 CIP, there are approximately 194 continuing and new projects planned over the next 5 years. The fiscal year 2025-26 CIP outlines $47.0 million in new appropriations to provide additional funding for the continuation of existing projects as well as funding for 14 new projects. Projected revenues during the same fiscal year are estimated at $110.1 million.

FY2025-26 APPROPRIATIONS BY BUDGET CATEGORY

Fiscal year 2025-26 appropriations by project type

Civic Buildings and Facility Maintenance

$1.8 million

This category includes a variety of facilities such as fire stations, libraries and community centers. Costs include repair, maintenance and replacement of civic buildings and other operational facilities.

Parks

$4.8 million

Projects include improvements and enhancements to existing parks, such as playground resurfacing, picnic areas, pickleball courts and other needs identified by the community and in recently updated parks master plans.

Drainage

$7 2 million

The city’s drainage infrastructure plays an important role in handling storm water runoff flows, as well as maintaining the water quality of the city’s creeks, lagoons and ocean. As the city continues to age, it is increasingly necessary to balance repairing and replacing the existing lines with enhancing the current infrastructure to accommodate future needs.

Sewer

$9.5 million

The city’s sewer, or wastewater, projects include numerous pipeline construction and rehabilitation projects, as well as improvements to the Encina Wastewater Treatment facility. Most new lines are built and paid for with impact fees collected with new development.

Water and Recycled Water

$10.7 million

Future water and recycled water projects include construction of new pipelines, replacement of existing waterlines and reservoir improvements. The Carlsbad Municipal Water District has been producing and delivering recycled water for over 30 years.

Transportation

$13.0 million

People of all ages and abilities want to go places safely and conveniently in Carlsbad, whether they drive, walk, bike, or ride a bus or train. The city continues to invest in modernizing roads, leveraging technology to improve traffic systems, and making timely repairs and rehabilitation of the roadways, bridges, sidewalks and other assets in public rights of way throughout the city.

NEW CAPITAL IMPROVEMENT PROJECTS

Citywide Facilities Nonfunction Turf

Evaluate existing city facilities to identify and convert areas of non-contributing ornamental grass to more water-wise planting areas. Part of this CIP will seek water conservation grants and rebates from applicable authorities

Install an emergency backup generator to allow for continuity of operations during grid power outages. In FY26, Phase 1 will install a docking station so a rental generator could be deployed if needed. In the future, Phase 2 will install a

Maintenance Projects

ADA Parking Space Modifications

Citywide Community Parks’ Playgrounds Replacements and Upgrades

Citywide Facility Arc Flash and Thermal Imaging Safety Program

Modify existing parking spaces to comply with ADA requirements and the California Vehicle Code as it relates to crosswalks.

Evaluate existing infrastructure and programming needs of community parks’ playgrounds nearing the end of their useful lives

Conduct National Fire Protection Association (NFPA) 70E required arc flash studies together with related electrical safety inspections. Develop constraints and opportunities list of city buildings in support of the Climate Action Plan (CAP) Measures E1 and E-3.2.

Replace and rehabilitate pumps to increase hydraulic efficiency for the station and the

Forecasted construction, $300,000 Citywide

Home Plant Lift Station Improvements

Upgrade the lift station to accommodate an increase in pump flow capacity. Lift station upgrades are needed to accommodate anticipated development expansion in the Village and Barrio Master Plan area in accordance with current city standards.

Quadrant Older Parks

and Improvement Evaluate existing infrastructure and programming of Magee Park, Maxton Brown Park, and Holiday Park to identify needed improvements that will allow these downtown parks to better serve the public

CAPITAL IMPROVEMENT PROGRAM REVENUES

Capital Improvement Program

Projected Revenues FY 2025-26 to FY 2039-40

$1.0 billion

Utility Replacement transfers, 29%

Developer fees, 24%

Financing Districts, 8%

General Capital Construction transfers, 9%

Infrastructure

Replacement transfers, 9%

Other agencies, 21%

Over the next 15 years, revenues for capital projects are estimated at $1.0 billion and are segregated into six major funding sources: (1) fees generated by development in the City of Carlsbad, (2) special district fees and taxes from the community facilities districts and bridge and thoroughfare benefit districts, (3) water and wastewater replacement funds, (4) infrastructure replacement funds other than wastewater and water, (5) general capital construction funds, and (6) other sources, including grants, sales taxes and contributions from other agencies.

Approximately 24% of all capital revenue is received as a result of development, including developer fees and financing districts in the chart above, and is dependent upon assumptions made about the city's annual growth in dwelling units and commercial and industrial square feet. These revenues include Public Facilities Fees, Traffic Impact Fees, Park-In-Lieu Fees, Planned Local Drainage Fees, water connection fees, sewer connection charges, and community facilities districts and bridge and thoroughfare benefit districts fees.

Water and wastewater replacement revenues generated by user fees equal approximately 29% of total revenues and are used to pay for replacement of existing water and sewer facilities.

Infrastructure Replacement and General Capital Construction revenues, equal to 18%, are transfers from the city’s General Fund, which are being set aside to pay for replacement of major capital facilities other than wastewater and water facilities and the construction of various municipal projects. The remaining 21% consists of revenues from other agencies and include federal and state grants, the county sales tax program Transnet, gas taxes, and contributions or reimbursements from cities, developers, and other agencies.

FUTURE GROWTH AND DEVELOPMENT

As shown on the graph on the previous page, there are a variety of revenues that are used to fund the capital projects. In order to estimate revenues to be received from development, several assumptions about the rate and type of future development are made. These assumptions can change from year to year and tend to correlate with the current economic climate.

Every year, city staff evaluates all existing and future private development projects and compares this information to the capacity of the city using the most current adopted general plans. Information about existing development activity combined with estimates of how remaining net developable land might develop is then summarized to prepare future projections about when and where residential and non-residential development may occur. The following table shows the number of residential units and non-residential square feet of development that was used in calculating estimated revenues for fiscal year 2025-26 and subsequent years to build out.

Projected Future Development

Financial forecasting schedules are prepared to ensure that funding will be sufficient and available for construction of capital projects as planned in the CIP. In addition to evaluating whether or not capital funds are sufficient, significant operating cost impacts and availability of staff resources are also considered in evaluating the timing of projects. Where funding discrepancies occur, alternative financing methods and project timing are evaluated, and recommendations are made to resolve the discrepancies.

Conservatively, about 7,854 residential units are anticipated for future development, and it is currently estimated that the city is more than 90% built out. Residential development for fiscal year 2025-26 is projected at 199 units, and, over the next five years, should average 514 units per year. The amount of non-residential development is projected at about 515,000 square feet over the next five years.

Projects include several multi-family residential developments, commercial industrial, office and other mixed -use projects. Development estimates provide data for estimating future fee revenues, which are calculated by multiplying each applicable development fee by the estimated number of dwelling units and/or square feet of construction expected during each year.

FUTURE PROJECTS

Long-range planning and responsible asset management play key roles in the development of future capital projects. Using data from various infrastructure master plans, ongoing asset condition assessments, technical modelling, field inspections as well as community feedback, the information provided for future years reflects the most comprehensive snapshot of known or anticipated future projects as well as associated estimated costs. Future costs for projects forecast in fiscal year 2030-31 to fiscal year 2039-40 are estimated at approximately $729 million.

CALCULATION OF FUTURE FEES

The revenue projections in the CIP reflect the growth assumptions identified in the previous section. The following information delineates how those assumptions were applied to estimate future development revenues. The mix of future multi-family and single-family residential units is assumed to be 90% and 10%, respectively, and reflects the anticipated mix of residential development for each Local Facilities Management Zone.

To calculate estimated revenues for Traffic Impact Fees, the number of average daily trips was computed for each type of development use. An attached multi-family residential dwelling unit is assigned eight trips and a detached single-family unit is assigned 10 trips per day. The trips-per-day value for commercial and industrial buildings are 40 and eight trips per 1,000 square feet of development, respectively, although the actual volume of trips generated by commercial and industrial buildings can vary widely depending on the ultimate land use.

CFD No. 1 is a citywide district established to finance various civic facilities required under the city’s Growth Management Plan. Park-in-Lieu Fees are collected for the purchase and development of parkland within each quadrant of the city, and the fees are based on the acquisition cost of parkland. Projects in the CIP funded with Park-in-Lieu Fees include future park site acquisition, development and restoration.

UNFUNDED PROJECTS

The CIP includes several projects for which there is no identifiable funding source for future construction and, in some cases, where only partial funding has been identified. The city will investigate obtaining possible external funding, such as federal and state grants, loans, or other financing sources. Once funding is identified for these projects, the project costs will be reviewed and updated to reflect actual cost estimates. Projects on this list are part of the City Council’s Five-Year Strategic Plan or were identified by Council direction. One project is partially funded by the Traffic Impact Fee program. The program was planned to generate enough revenue to pay for 20% of the total costs of these projects, leaving the remaining 80% unfunded. Cannon

PROJECTED FUND BALANCES FOR FISCAL YEAR 202

4- 25

PROJECTED F UND BALANCES FOR FISCAL YEAR 202 5- 26

REVENUE PROJECTIONS SCHEDULE

Note: Revenues include transfers and fair

BUDGET EXPENDITURE SCHEDULE

PROJECT ESTIMATED OPERATIONAL REQUIREMENTS

The projects listed in the table below represent projects that have been determined will have or may have operating budget impacts within the next five fiscal years. Estimated impacts to operating budget are based on industry standards. Projects that have an estimated zero dollar impact on the city’s operating budget are not listed below. As the fiscal years identified in the table become the next budgeting year the associated appropriate department will make a request for additional operating budget.

Beach Access Repair and Upgrades

2026-27 To be determined

FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM

FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM

STRATEGIC PLAN PROJECTS

FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM

CRITICAL NEED PROJECTS

FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM

PROJECTS

New projects in italics

FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM

ENTERPRISE PROJECTS

New projects in italics

2615 1JeffersonStreetSewerReplacement

FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM

ENTERPRISE PROJECTS

New projects in italics

5555 2,3 Repair Reaches(VC13& VC14)

FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM

MAINTENANCE PROJECTS

New

FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM

MAINTENANCE PROJECTS

New projects in italics

PROJECT ACCOUNTING

New

in italics

FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM

REQUESTED APPROPRIATION SUMMARY

Requested Appropriation does not include construction amounts for Strategic Plan and Critical Need projects. It does include full amounts for Maintenance and Enterprise projects as shown.

CAPITAL IMPROVEMENT PROGRAM 15 - YEAR FORECAST

Other Financing Sources

PARK-IN-LIEU

PARK-IN-LIEU

PARK-IN-LIEU

PARK-IN-LIEU

GLOSSARY OF CAPITAL PROJECT FUNDING SOURCES

BTD 2 – Bridge and Thoroughfare District No.

2 developer fees are paid to partially fund the Poinsettia Lane and Aviara Parkway street construction project.

BTD 3 – Bridge and Thoroughfare District No.

3 developer fees are paid to partially fund Cannon Road improvements.

CDBG – Community Development Block Grants are allocated by the federal government to help develop viable urban communities for low and moderate income households.

CFD 1 – The City of Carlsbad Community Facilities District No. 1 (Mello-Roos) funds civic projects, I-5 interchange projects, and road segments.

Federal Grants – Federal Grants such as the Schools Traffic Safety Program.

Gas Tax – Gas Tax revenues for street projects are received under the Streets & Highways Code of the State of California.

Gas Tax 1B – Gas Tax revenues for street projects specifically for road maintenance and rehabilitation are received under the Streets & Highways Code of the State of California.

General Capital Construction – General Capital Construction funds, created through fund transfers from the city's General Fund, are used to fund various municipal and other capital projects.

Infrastructure Replacement Fund (IRF) – Annual transfers from the General fund pay for major maintenance and replacement of the city’s infrastructure.

Other – Sources include revenues related to pending financing districts, property owner contributions, and contributions from other agencies.

Park-in-Lieu (PIL) – Park-in -Lieu Fees are charged to developers for park acquisition and development. PIL fees are segregated by quadrant to fund park projects in those quadrants.

Planned Local Drainage (PLD) – Drainage facilities necessitated by growth are paid from developer Planned Local Drainage Fees. PLD fees are segregated by drainage area.

Public Facilities Fees (PFF) – Public Facilities Fees are charged to developers to fund civic facilities, park development, streets, traffic signals, and other facilities.

Sewer Connection – Development fees include Sewer Connection charges for expansion of sewer lines and facilities.

Sewer Replacement – Sewer Replacement is part of sewer user fees and pays for repair and replacement of the city's existing sewer system.

State Grants – State Grants such as Veteran’s Memorial Park funding

Transportation Development Act (TDA) – City street and bicycle projects can receive funding from Transportation Development Act sales tax receipts.

Traffic Impact Fees (TIF) – Developer Traffic Impact Fees are used for various street construction and improvement projects.

TransNet (BIKE, -HWY, -LOCAL, -STP) – Receipts of County Sales Taxes allocated by the San Diego Regional Transportation Commission finance various bicycle, freeway interchange and local road improvement projects.

Water Connection – Development fees include Major Facility Fees used to fund expansion of water lines and ancillary water facilities.

Water Replacement – Water Replacement funds are included in water utility rates and pay for the repair and replacement of existing potable water lines and facilities.

Water Recycled – Revenues used to fund new Recycled Water projects; revenues for Phase III expansion includes grant and loan funds.

Water Recycled Replacement – Recycled Water Replacement funds are included in utility rates and pay for the repair and replacement of existing recycled water lines and facilities.

Zone 5, 13, 16, 17, 18 Park Fee (ZONE 5) – Fees paid by development in Local Facilities Management Zones 5, 13, 16, 17 and 18 to fund a Business Park Recreational Facility in the city's industrial corridor.

PLANNED MAJOR CAPITAL OUTLAY ITEMS

FISCAL YEAR 202 5-26

(Greater than $100,000)

GENERAL

FUND A SSET REPLACEMENT FOR FISCAL YEAR S 202 6 - 2 7 TO 2035 - 3 6

FUND CLASSIFICATIONS AND DESCRIPTIONS

The financial operations of the city are organized into funds for which budgets are prepared. These funds are grouped into three major categories: Governmental, Proprietary, and Fiduciary.

Governmental Funds

Governmental funds are made up of the General Fund, Special Revenue Funds and Capital Project Funds.

The General Fund (001) is used to account for all financial resources necessary to carry out basic governmental activities of the city that are not accounted for in another fund. The General Fund supports essential city services such as police and fire protection, street maintenance, libraries, parks and open space management.

Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditures for specified purposes.

Affordable Housing (133) – Collects fees generated from the Inclusionary Housing In-Lieu Fee and the sale of affordable housing credits that satisfy a developer’s inclusionary housing obligation as well as loan repayments from existing developments. With these funds, the city provides affordable housing programs and low income and homeless services support and financial assistance for residential developments that provide housing opportunities to low income households.

Agricultural Mitigation Fee (171) – The Agricultural Conversion Mitigation Fee program funds projects that improve agricultural lands for continued agricultural production, protect and enhance the coastal and lagoon environment, improve lagoon nature centers and restore beaches for public use.

Buena Vista Channel Maintenance District (163) – Ensures adequate funds are collected from property owners within the district to administer and maintain the Buena Vista Creek Channel from Jefferson Street east to the South Vista Way bridge.

Citizens’ Option for Public Safety (COPS) (123) – Supplemental Law Enforcement Services Funds to be spent providing “front line police services” such as anti-gang efforts, crime prevention and juvenile justice programs.

Community Activity Grants (150) – Provides city-funded grants to community service groups.

Community Development Block Grant (391) – Federal funds provided to the city to develop viable urban communities through the provision of decent housing, a suitable living environment and by expanding economic opportunities for lower income persons.

Continuum of Care (192) – Funds from the US Department of Housing and Urban Development to support rapid rehousing of individuals experiencing homelessness.

Cultural Arts Donations (148) – Funds used to promote and support the programs and activities of the city’s Cultural Arts Office.

Encampment Resolution Fund (189) – Funds from the California Department of Housing and Community Development to provide services and supports to people experiencing homelessness in encampments that results in meaningful paths to safe and stable housing

Habitat Mitigation Fee (172) – Funding for conservation of certain parcels totaling approximately 300 acres, which lie in the unincorporated area to the southeast of Carlsbad and which are essential to the biological viability of the Habitat Management Plan.

Library and Arts Endowments (175) – Donations are used to support Library programming and activities.

Library Gifts & Bequests (145) – Includes Friends of the Library annual donations and Library Gifts and Bequests. Donations are used to support Library programming and activities.

Lighting and Landscaping District 2 (164) – This maintenance and assessment district funds the costs of streetlights, street trees and medians within the district boundaries covering newer developments in the city.

Local Cable Infrastructure (138) – Funds used for the associated capital costs of the city’s own cable channel and other city outreach and communications programs. Franchise fees from cable and internet providers make up the revenue for this fund.

Local Housing Allocation Fund (136) – Funds from California’s Permanent Local Housing Allocation Program established in 2017 to provide funding for affordable housing, funded by a fee levied on certain real-estate transactions.

Median Maintenance District (161) – Provides landscape and irrigation maintenance for approximately 68 acres of median planters and nine acres of developed parkways, including the Downtown Carlsbad Village area.

Opioid Settlement Fund (128) – Funds from the California Opioid Settlements utilized for opioid remediation activities.

Parking in-Lieu Fees (315) – Funding collected from new developments in Carlsbad Village that do not provide adequate parking facilities for use in construction of future parking facilities and improvements.

Permanent Local Housing Allocation (136) – Funds from the California Department of Housing and Community Development to assist local governments with housing-related projects and programs that assist in addressing the unmet housing needs of their local communities.

Police Asset Forfeiture (122) – Funds received from the police department’s drug enforcement activities that are restricted for use in supporting police activities to include the acquisition of equipment, supplies or services.

Public Safety Grants (124) – Used to purchase equipment, supplement staffing costs and assist with training.

Recreation Donations (149) – These donations provide supplemental funding for Parks & Recreation events, programs and facilities.

Rental Assistance/Section 8 Program (190) – Federal funding to provide vouchers to help low income residents pay rent.

Senior Program Donations (143) – These donations provide funding for nutrition, transportation, activities, events and other programs benefiting Carlsbad's senior population.

Street Lighting Maintenance District (162) – The street lighting maintenance assessment district provides funding for the operation and maintenance of all city-accepted streetlights within the public right-of-way.

Street Tree Maintenance District (160) – The street tree maintenance assessment district provides partial funding for the operation and maintenance of all city-accepted street trees within the public right-of-way, including specialized maintenance for street trees in the Downtown Carlsbad Village area.

Tyler Court Apartments (806) – Provides affordable housing to senior households with incomes at 30% and 50% of the San Diego County Area median incomes.

Capital Project Funds are used to account for specific revenues that are restricted to expenditures for capital project purposes.

Bridge and Thoroughfare District 2 (BTD 2) (362) – Developer fees are paid to partially fund the Poinsettia Lane and Aviara Parkway street construction project.

Bridge and Thoroughfare District 3 (BTD 3) (363) – Developer fees are paid to partially fund Cannon Road improvements.

Community Facilities District 1 (CFD 1) (430) – Mello-Roos funds specific civic projects, I-5 interchange projects and road segments.

Gas Tax (152) – Gas Tax revenues for street projects received under the Streets & Highways Code of the State of California.

Gas Tax Road Maintenance and Rehabilitation (153) – Gas Tax revenues for street projects, which can only be used for road maintenance and rehabilitation, received under the Streets & Highways Code of the State of California.

General Capital Construction (GCC) (300) – General Capital Construction funds, created through annual fund transfers from the city's General Fund, are used to fund various municipal and other capital projects.

Grants-Federal (392) – Federal Grants such as funding for Village and Barrio traffic circles.

Grants-State (389) – State grants such as Veteran’s Memorial Park funding.

Industrial Corridor Park Fees (334) – Fees paid by development in Local Facilities Management Zones 5, 13, 16, 17 and 18 to fund a Business Park Recreational Facility in the city's industrial corridor.

Infrastructure Replacement (IRF) (370) – Annual transfers from the General Fund to pay for major maintenance and replacement of the city’s infrastructure.

Park in-Lieu Fees (PIL) (330-333) – Park-in -Lieu fees are charged to developers for park acquisition and development. PIL fees are segregated by quadrant to fund park projects in those quadrants.

Planned Local Drainage Area Fees (PLD) (350-353) – Drainage facilities necessitated by growth are paid from developer Planned Local Drainage Fees. PLD fees are segregated by drainage area.

Public Facilities Fees (PFF) (320) – Public Facilities Fees are charged to developers to fund civic facilities, park development, streets, traffic signals, and other facilities.

Technology Investment Capital (375) – Technology Investment Capital funds, created through annual fund transfers from the city's General Fund, are used to fund various technology projects.

Traffic Impact Fees (TIF) (310) – Developer Traffic Impact Fees are used for various street construction and improvement projects.

TransNet (342) – Receipts of county sales taxes allocated by the San Diego Regional Transportation Commission to finance various bicycle, freeway interchange and local road improvement projects.

Proprietary Funds

Proprietary funds are Internal Service Funds and Enterprise Funds.

Internal Service Funds are used to account for operations internal to the city where the intent is that the cost of providing services to the city department is financed primarily through department user charges.

Workers’ Compensation (611) – Management of workers’ compensation insurance and claims.

Risk Management (612) – Management of vehicle and city liability insurance.

Vehicle Maintenance (620) – Vehicle maintenance and operations of citywide fleet, including gas and oil charges.

Vehicle Replacement (621) – Funding for the replacement of vehicles currently in operation, based on the expected replacement cost at the end of vehicles useful life.

Information Technology Operations (640) – Maintenance and operations of citywide technology assets.

Information Technology Replacement (641) – Funding for the replacement of current technology assets based on the expected replacement cost at the end of the anticipated useful life.

Enterprise Funds are used to account for operations that are financed and operated similar to a private business where the intent is that the cost of providing services to the public is financed primarily through user charges.

Potable Water Operations (501) – Carlsbad Municipal Water District (CMWD), a subsidiary of the city, provides potable water service to approximately 85% of the city.

Potable Water Connection (506) – Development fees include Major Facility Fees used to fund expansion of potable water lines and ancillary water facilities.

Potable Water Replacement (505) – Water replacement charges are included in water utility rates and pay for the repair and replacement of existing potable water lines and facilities.

Recycled Water Operations (502) – Funds used to operate and maintain critical infrastructure systems and to provide the safe delivery of conservation outreach and treated irrigation water.

Recycled Water Connection (507) – Revenues used to fund new Recycled Water projects; revenues for Phase III expansion includes grant and loan funds.

Recycled Water Replacement (508) – Recycled Water Replacement funds are included in utility rates and pay for the repair and replacement of existing recycled water lines and facilities.

Wastewater Operations (511) – The city operates and maintains a sanitary wastewater collection system, which covers approximately 65% of the geographic area of the city.

Wastewater Connection (512) – Development fees include Sewer Connection charges for expansion of sewer lines and facilities.

Wastewater Replacement (515) – Sewer replacement charges are part of sewer user fees and pay for repair and replacement of the city's existing sewer system.

Solid Waste Management (520) – Administers and monitors the solid waste contract and the Palomar Transfer Station agreement and is responsible for ensuring the waste reduction and recycling components of the Source Reduction and Recycling Element and Household Hazardous Waste Element comply with state mandated diversion and disposal requirements.

Watershed Protection (521) – Fund dedicated to providing programs which enable stewardship of the city’s resources protecting our beaches, creeks, and lagoons.

The Crossings Golf Course (572) – Funds used to cover the operations of the city’s municipal golf course.

Fiduciary Fund

Fiduciary funds are private purpose trust funds used to account for situations where the city’s role is purely custodial, such as the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments.

Successor Agency to the Redevelopment Agency (801) – Responsible for administering enforceable obligations of the former Carlsbad Redevelopment Agency (RDA) including administration of housing loans and other debt obligations, completing existing projects and ultimately to wind down RDA operations over time.

DEPARTMENT/FUND RELATIONSHIP

Facilities District No. 1

& Arts Endowments

Gifts & Bequests

& Landscaping District No. 2

(continued)

GLOSSARY

Actual Budget – What was actually spent during the budget year and the revenues that were actually received. The city may not spend more than what is approved in the adopted budget.

Adopted Budget – The final approved budget that includes how much money may be spent from different city funds and how many positions are approved for the city’s workforce.

Appropriation – A specific amount of money authorized by the City Council for an approved work program or individual project.

Assessed Valuation – A dollar value placed on real estate or other property by the County of San Diego as a basis for levying property taxes.

Balanced Budget – A budget in which planned expenditures do not exceed planned funds available.

Beginning/Ending Fund Balance – Unencumbered resources available in a fund from the prior/current year after payment of the prior/current year expenses.

Bond – A certificate of debt issued by an entity, guaranteeing payment of the original investment, plus interest, by a specified future date.

Branch – An organizational unit comprised of departments. Examples include the Administrative Services Branch and Community Services Branch.

Budget – An annual financial plan that identifies revenues, types and levels of services to be provided and the amount of funds that can be spent.

Capital Budget – A budget that plans for the purchase, maintenance, or improvement of the city’s fixed assets such as buildings, parks, and roads. This budget includes significant expenses that are typically spread over several years.

Capital Improvement Program – A multi-year financial plan containing proposed construction of physical assets such as park, street, sewage and recreation facilities. The 15-year program outlines the expenditure plan for future capital projects and the corresponding revenues to pay for those expenditures.

Capital Outlay – Equipment (fixed assets) with a value $1,000 or more and an estimated useful life of more than one year, such as automobiles and office furniture, which appear in the operating budget.

Carlsbad Community Vision – A set of nine core values and vision statements developed through consultation with the community in 2010 that serve as a guide for city leaders as they serve the city.

Carryforwards – At the end of the fiscal year, if there is money left over, city staff may request to carry some or all of this money forward to the next fiscal year. This money may only be used for onetime expenses, like a special program or the purchase of supplies for a single event.

Cost Allocation – A method used to charge General Fund overhead costs to other funds, such as Enterprise Funds and Internal Service Funds.

Credit Rating – An independent assessment of whether the city is a good credit risk. Criteria include overall financial management, leadership stability, debt and the city’s economic base. Cities with a high rating can borrow money at a lower interest rate. The City of Carlsbad has the highest rating possible, which is AAA.

Debt Service – The payment of principal and interest on borrowed funds such as bonds.

Department – An organizational unit comprised of programs or divisions. Examples include the Finance and Human Resources departments.

Encumbrance – A legal obligation to pay funds, an expenditure of which has not yet occurred.

Enterprise Fund – A fund type established to account for the total costs of selected governmental facilities and services that are operated similar to private enterprises.

Expenditure – The actual spending of funds set aside by appropriation for identified goods and services.

Fee – A general term used for any charge levied by government for providing a service or permitting an activity.

Fiscal Year – 12-month period designated as the budget year. Carlsbad's fiscal year is July 1 to June 30.

Full-time Equivalent (FTE) – The hours worked by one employee on a full-time basis, used to convert the hours worked by several part-time employees into the hours worked by full-time employees. Two employees each working 1,000 hours equals 1.0 full-time equivalent employee.

Fund – A set of interrelated accounts to record revenues and expenditures associated with a specific purpose.

Fund Balance – The amount of financial resources available for use.

General Fund – The primary fund used by the city for which revenues and expenditures are not legally restricted for use. Examples of departments operating within the General Fund include Fire, Library, and the City Manager's Office.

Grant – Contributions of cash or other assets from another governmental agency to be used or expended for a specified purpose, activity, or facility.

Growth Management Plan – A comprehensive approach to land-use planning ensuring controlled and managed growth within the city, while providing designated public facilities.

Growth Management Standards – Acceptable service levels that have been established for 11 public facility categories.

Interfund Transfers – Payments from one fund to another fund, primarily for work or services provided.

Internal Service Fund – A fund that provides services to all city departments and bills the various other funds for services rendered. Examples are Fleet Maintenance, Information Systems and Workers’ Compensation.

Maintenance and Operations – A general category used for classifying expenditures for materials, supplies and services that are normally used within the fiscal year.

Operating Budget – The annual appropriation of funds for ongoing program costs, which include salaries, benefits, maintenance and operations and capital outlay items. Carlsbad's Operating Budget encompasses one fiscal year.

Operating Costs – Estimated expenses that can be expected to occur following the construction of a Capital Improvement Project.

Personnel Costs – Expenditures associated with providing the staff necessary to provide the desired levels of services, including both salary and benefit costs.

Preliminary Budget – A draft of the city’s proposed budget that is presented to the public and the City Council about a month before the final budget will be presented for approval.

Revenues – Amount of funds received from the collection of taxes, fees, permits, licenses, interest and grants during the fiscal year.

Special Revenue Funds – A fund that collects revenues that are restricted by the city, state or federal government as the manner in which they may be spent.

Strategic Digital Transformation Investment Program – A strategic plan for technology and digital transformation combined with project descriptions, costs, funding sources and timelines. It outlines a five-year expenditure plan for future digital transformation and technology projects and the corresponding revenues necessary to pay for them.

Structural Deficit – When a city’s projected ongoing spending is more than its projected ongoing revenues.

Surplus – The amount of money left over once all the city’s projected or actual spending is accounted for.

Transfer – Transfers refer to the movement of money between different funds within the city’s financial accounts. These transfers are usually made to allocate resources appropriately, manage cash flow, support specific projects and ensure funds are available where they are needed most.

Unassigned Fund Balance – The portion of a fund’s balance that is not restricted by legal or contractual requirements and is available for any purpose.

ACRONYMS

AARP – American Association of Retired Persons

ADA – Americans with Disabilities Act

ADC – Actuarial Determined Contributions

AED – Automated External Defibrillator

AB – Assembly Bill

ALA – American Library Association

AV – Audiovisual

BCDDM – Build Capacity for Data- driven Decision Making

BEAR – Business expansion, attraction and retention

BTD – Bridge and Thoroughfare Benefit District

CAD – Computer Aided Dispatch

Cal- OSHA – California Occupational Safety and Health Administration

CalPERS – California Public Employees Retirement System

CalTrans – California Department of Transportation

CalWORKs – California Work Opportunities and Responsibility to Kids

CAD – Computer- aided Dispatch

CAP – Climate Action Plan

CAPRA – Commission for Accreditation of Park and Recreation Agencies

CCEA – Carlsbad City Employees' Association

CCTV – Closed-circuit Television

CDBG – Community Development Block Grant

CEQA – California Environmental Quality Act

CFA – Carlsbad Firefighters' Association

CFD – Community Facilities District

CIP – Capital Improvement Program

CM&I – Construction Management & Inspection

CMWD – Carlsbad Municipal Water District

COPS – Citizens' Option for Public Safety Grant

CPI – Consumer Price Index

CPMA – Carlsbad Police Management Association

CPOA – Carlsbad Police Officers' Association

CPR – Cardiopulmonary Resuscitation

CSMFO – California Society of Municipal Finance Officers

CSS – Customer Self Service Portal

CST – Crime Suppression Team

CTBID – Carlsbad Tourism Business Improvement District

CWEA – California Water Environment Association

CWRF – Carlsbad Water Reclamation Facility

CY – Calendar Year

DEI – Diversity, Equity and Inclusion

DL – Driver’s License

DMP – Drainage Master Plan

DOJ – Department of Justice

DUI – Driving Under the Influence

EAT – Enhance Accessibility and Transparency

EIR – Environmental Impact Report

EKG – Electrocardiogram

EMS – Emergency Medical Services

EMT – Emergency Medical Technician

EOC – Emergency Operations Center

EPA – Environmental Protection Agency

ERP – Enterprise Resource Planning

ESL – English as a Second Language

EV – Electric Vehicle(s)

EWA – Encina Wastewater Authority

EWPCF – Encina Water Pollution Control Facility

FBI – Federal Bureau of Investigation

FE – Finance Enterprise

FEMA – Federal Emergency Management Agency

FPPC – Fair Political Practices Commission

FTE – Full-Time Equivalent

FVCEC – Foster a Vibrant Civic Engagement Culture

FY – Fiscal Year

GAAP – Generally Accepted Accounting Principles

GASB – Governmental Accounting Standards Board

GCC – General Capital Construction

GDP – Gross Domestic Product

GFOA – Government Finance Officers Association

GHG – Greenhouse Gas Emissions

GIS – Geographic Information System

GPS – Global Positioning System

HA – Hydrologic Area

HELP – Homeless Engagement Leading to Progress

HMP – Habitat Management Plan

HOT – Homeless Outreach Team

HPRM – HP Records Manager

HR – Human Resources

HUD – Department of Housing and Urban Development

I&ED – Innovation & Economic Development

ICC – International Code Council

ICMA – International City/County Management Association

IRF – Infrastructure Replacement Fund

ISF – Internal Service Fund

IT – Information Technology

ITRF – Information Technology Replacement Fund

JPA – Joint Powers Authority

LEAP – Local Early Action Planning

LEAD – Listen Empower Act Develop, a city- led training academy

LFMZ – Local Facilities Management Zone

LED – Light- emitting diode

LCP – Local Coastal Program

LLC – Limited Liability Corporation

LLD – Lighting and Landscaping District

LMS – Learning Management System

M&O – Maintenance and Operations

MFF – Major Facility Fee

MS4 – Municipal Separate Storm Sewer System

MOU – Memorandum of Understanding

NAFA – National Association of Fleet Administrators

NFPA – National Fire Protection Association

NIST – National Institute of Standards and Technology

NPDES – National Pollutant Discharge Elimination System

OSHA – Occupational Safety and Health Administration (or Act)

PC – Personal Computer

PCDT – Pursue Communitywide Digital Transformation

PCI – Payment card industry

PERS – Public Employees Retirement System

PFF – Public Facilities Fees

PHA – Public Housing Agency

PIL – Park- In-Lieu Fees

PLA – Public Library Association

PLD – Planned Local Drainage

PLHA – Permanent Local Housing Allocation Program

POST – Police Officer Standards and Training

PSSC – Promote Security and Sustainability through Connectivity

PV – Photovoltaic

PW – Public Works

RFID – Radio Frequency Identification

RFP – Request for Proposal

RMRA – Road Maintenance and Rehabilitation Account

ROPS – Recognized Obligation Payment Schedule

ROW – Right-of- Way

SANDAG – San Diego Association of Governments

SB – Senate Bill

SCADA – Supervisory Control and Data Acquisition System

SDCWA – San Diego County Water Authority

SDG&E – San Diego Gas & Electric

SDTIP – Strategic Digital T ransformation Investment Program

SR – State Route

STEAM – Science, Technology, Engineering, the Arts, and Mathematics Program

SWAT – Special Weapons Attack Team

SWPPP – Storm Water Pollution Prevention Plan

SWQMP – Storm Water Quality Management Program

TCBMP – Treatment Control Best Management Practices

TCMP – Traffic Control Management Plan

TDA – Transportation Development Act

TDM – Transportation Demand Management

TICF – Technology Investment Capital Fund

TIF – Traffic Impact Fee

TMDL – Total Maximum Daily Load

TOT – Transient Occupancy Tax, or hotel tax

UASI – Urban Areas Security Initiatives Program

UDC – Unified Disaster Council (of San Diego)

UES – Utilities Enterprise Funds (Operating or Capital)

USLA – Unified States Lifesaving Association

UV – Ultraviolet light

VMT – Vehicle miles traveled

VR – Virtual reality

WQIP – Water Quality Improvement Plan

BUDGET COMMUNICATIONS

Workshop

Community Budget Workshop on May 22, 2025

News release: https://www.carlsbadca.gov/Home/Components/News/News/3039/18655

City Council Budget Meetings

Fiscal Year 2025-26 Preliminary Operating Budget, Strategic Digital Transformation Investment Program and Capital Improvement Program on May 20, 2025 –https://carlsbadca.new.swagit.com/videos/343448?ts=2330

• News release: https://www.carlsbadca.gov/Home/Components/News/News/3057/15?npage=2

Fiscal Year 2025-26 Operating Budget, Strategic Digital Transformation Investment Program and Capital Improvement Program, the Fiscal Year 2025-26 Appropriation Limit and Revisions of Fees and Charges of Services on June 17, 2025 –

https://carlsbadca.new.swagit.com/videos/346117?ts=5156https://carlsbadca.new.swagit.com/vide os/346117?ts=5156

• News release: https://www.carlsbadca.gov/Home/Components/News/News/3099/15

Social Media

Facebook Posts

Save the date for budget workshop, May 8, 2025

https://www.facebook.com/100064540458559/posts/1090787059749299/?mibextid=rS40aB7S9Ucb xw6v

Save the date for budget workshop, May 12, 2025

https://www.facebook.com/100064540458559/posts/1093404232820915/?mibextid=rS40aB7S9Ucb xw6v

First look at preliminary budget ahead of City Council meeting, May 15, 2025

https://www.facebook.com/100064540458559/posts/1095733639254641/?mibextid=rS40aB7S9Ucb xw6v

Preliminary budget review at City Council meeting, May 16, 2025

https://www.facebook.com/cityofcarlsbad/posts/pfbid02gVPi1DvJftBHVfcWxLHnLeJPG6iouen9uiGDi 9gXJTVUnUVnnhi6HahYbZVfoHX2l

Draft budget available and workshop save the date, May 19, 2025

https://www.facebook.com/100064540458559/posts/1098704988957506/?mibextid=rS40aB7S9Ucb

xw6v

Proposed budget, May 22, 2025

https://www.facebook.com/100064540458559/posts/1100974798730525/?mibextid=rS40aB7S9Ucb

xw6v

Proposed budget adoption on City Council agenda, June 13, 2025 https://www.facebook.com/100064540458559/posts/1117950370366301/?mibextid=rS40aB7S9Ucb xw6v

Budget adopted by City Council, June 19, 2025 https://www.facebook.com/100064540458559/posts/1122868329874505/?mibextid=rS40aB7S9Ucb xw6v

X (Twitter) Posts

Save the date for budget workshop, May 12, 2025

https://x.com/carlsbadcagov/status/1921981406432870773

Draft budget available and workshop save the date, May 19, 2025

https://x.com/carlsbadcagov/status/1924607781216071708

Instagram Posts

Save the date for budget workshop, May 12, 2025

https://www.instagram.com/p/DJj9zptzNJ6/?igsh=NTc4MTIwNjQ2YQ==

Draft budget available and workshop save the date, May 19, 2025 https://www.instagram.com/p/DJ2oJh7pFp2/?igsh=NTc4MTIwNjQ2YQ==

First look at preliminary budget ahead of City Council meeting, May 15, 2025 https://www.instagram.com/p/DJscQqrJKKx/?igsh=NTc4MTIwNjQ2YQ==

Proposed budget, May 22, 2025

https://www.instagram.com/p/DJ-e49YT3WD/?igsh=NTc4MTIwNjQ2YQ==

Budget adopted by City Council, June 19, 2025 https://www.instagram.com/p/DLGlwenzMAz/?igsh=NTc4MTIwNjQ2YQ==

Nextdoor Post

May 16, 2025

City Manager’s Update E-Newsletters

June 19, 2025: https://conta.cc/4l05Mig

May 22, 2025: https://conta.cc/3YXFvIN

May 15, 2025: https://conta.cc/3FbTp36

May 8, 2025: https://conta.cc/3YxMUOH

Advertising

May 9, 2025

The Coast News (print ad)

The Coast News (digital ad) May 2025

GENERAL FUND FORECAST

Overview

City staff develops medium-term (five-year) and long-term (10-year) forecasts as part of the budget process. While long-term projections are inherently less reliable than short-term projections, they can help detect structural budget issues early. As shown in the following chart, revenues will start to fall short of expenditures in fiscal year 2030-31 because revenues are growing at a slower rate than expenditures. The timing of the projected deficit remains at the same point in time compared to last year’s budget. This is attributable to enhanced budget rigor, including three consecutive years of ongoing budget reductions as well as strong revenue performance throughout the high inflationary period. These efforts afford city leadership additional time to continue their strategic thinking and practices. Assumptions for both revenues and expenditures are detailed further in this forecast section.

General Fund 10-Year Forecast

$ (in htousands)

$400,000

$350,000

$300,000

$250,000

$200,000

$150,000

$100,000

$50,000

$-

FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35

Revenues Expenditures

Forecast Methodology

A financial forecast is a planning tool that helps identify trends and anticipate the long-term consequences of budget decisions. The forecast is instrumental in modeling the effects of everchanging retirement costs, employee compensation, ongoing maintenance and operations, as well as revenues for the city’s budget.

The forecast is not a budget nor a plan but rather a model based on cost and revenue assumptions updated regularly as new information becomes available. Of these components, cost projections which are based on known costs are relatively reliable. However, revenue forecasts are based on assumptions related to future economic conditions, which are inherently more uncertain. Economic forecasts change frequently and demonstrate the difficulties of committing to a particular prediction of the future. For this reason, the city’s forecast is updated regularly.

While economic conditions are the primary drivers for economically sensitive revenues such as property tax, sales tax and transient occupancy tax, other factors drive non-economically sensitive revenue categories such as franchise fees, ambulance fees and departmental fees. These revenue

categories are more heavily impacted by changing rates, energy prices and consumption levels. Collections from local, state and federal agencies are primarily driven by grant and reimbursement funding available from these agencies. As a result, these revenues experience no significant net gain or loss during economic expansions or slowdowns. All revenue projections are based upon a careful examination of the collection history and patterns related to seasonality and the economic environment the city is most likely to encounter in the future.

A discussion of both the national and local economic outlooks used to develop the revenue estimates for the fiscal year 2025-26 forecast is included below. To create the revenue forecasts, city staff reviewed national, state and regional economic forecasts from multiple sources, including the Congressional Budget Office, California’s Legislative Analyst’s Office and the Center for Continuing Study of the California Economy. The city also relies on third-party consultants to provide revenue estimates in their respective fields of expertise. For sales tax consultant services, the city contracts with Hinderliter, de Llamas & Associates, also known as HdL.

The city’s Consumer Price Index forecasts are derived from the UCLA Anderson Forecast for the Nation and California.

National Economic Outlook

Real gross domestic product decreased at an annual rate of 0.5% in the first quarter of 2025, following an increase of 2.4% in the fourth quarter of 2024. This primarily reflects increases in imports, as well as a decrease in government spending, which are subtractions in the calculation of GDP. These movements were partly offset by increases in investment and consumer spending. Real GDP was revised down 0.3 percentage points from the second estimate, primarily reflecting downward revisions to consumer spending and exports that were partly offset by a downward revision to imports.

Economic trends have been decelerating along with tighter financial conditions and restrictive monetary policy. Recent data suggests positive but below-trend growth this year. Although the pace of job growth is moderating, labor markets remain tight. However, declining consumer confidence and spending will be something to monitor closely moving forward.

At the end of March 2025, the two-year Treasury yield was 70 basis points lower, and the 10-year Treasury yield was about 11 basis points lower, year-over-year. The inversion between the two-year and 10-year Treasury yield increased about 10 basis points to 0.34 over the previous month-end. The average historical spread since 2003 is about +130 basis points. The yield curve, inverted for a period of over two years, became positive in September 2024 and has slowly increased month over month.

Carlsbad Economic Outlook

As of 2024, Carlsbad had the second largest gross regional product in San Diego County at nearly $16.8 billion, only trailing the City of San Diego. In 2019, Carlsbad’s economy grew by $800 million to nearly $13.6 billion. In 2020, as a result of the pandemic, the city’s GRP remained flat. In 2021, its economy grew by approximately $1 billion, to nearly $14.6 billion. From 2021 to 2023, Carlsbad’s gross regional product grew by $2.5 billion. Almost all industry categories experienced this growth, chiefly in manufacturing, wholesale trade, hospitality and professional, scientific, and technical services.

Unemployment has continued to steadily improve since an initial spike to 13.8% at the onset of the COVID-19 pandemic. The March 2025 unemployment rate of 4.1% in Carlsbad represented an increase compared to the prior year’s unemployment rate of 3.5%. The unemployment rate for the County of San Diego was 4.2% in March 2025 and the State of California was 5.3%. Within the city, many employers are citing difficulty in finding and retaining workers. Macroeconomic trends in the tech industry have been pushing unemployment up nationally, but the labor market is still considered to be very tight.

There were 6,043 unique job postings in Carlsbad between January and March of 2025 representing a decrease of about 2,000 from the same quarter in the previous year. The median advertised salary for these postings was $50,000, which is on average $1,000 less than jobs posted during the same period last year. In terms of educational requirements, 70% of open jobs posted either list a minimum requirement of high school or GED or don't list an educational requirement at all. And in terms of experience requirements, 68% of open jobs posted list a minimum of 1 year of work experience required, or don't list any experience requirement. Combined, this shows that employers are disproportionately looking for entry-level talent, meaning that individuals can start and grow a career in Carlsbad. The median job posting duration is 21 days, showing that employers are beginning to find workers more easily than over the past 5 years.

Carlsbad has established itself as having the right workforce to fuel innovation in the technology and life sciences fields. Carlsbad businesses can access talent from San Diego County, Orange County and even southwest Riverside County. More than 60% of working age residents hold a bachelor’s degree, with nearly 25% attaining an advanced degree. With the exception of a couple of communities in central San Diego, Carlsbad has the heaviest concentration of households with degrees in science, technology, engineering and mathematics, also known as STEM degrees. This local talent mix is among the leading reasons that firms choose Carlsbad.

In terms of property occupancy, commercial vacancy rates remain relatively steady across all categories. The industrial vacancy rate ended the quarter at 7.8%. The office vacancy rate increased by 0.7% and retail vacancy rates decreased by 2.08%.

With 42 hotels in Carlsbad, tourism is a major industry in terms of employment and economic impact. It is also a major contributor to city revenue, through transient occupancy and sales tax generation. Room occupancy levels averaged 68.7% in the third quarter of fiscal year 2024-25 which exceeded the 66.2% average in the same quarter of the previous fiscal year. The impacts of inflation and a potential recession could hamper tourism globally, but Carlsbad is well-positioned as a destination that could see strong tourism even through a recession. Carlsbad’s average daily room rate increased compared to the previous year from $193.81 to $204.37. While disposable income, personal savings, pent-up demand and inflation have boosted revenue generation for the city, as inflationary levels linger and uncertainty surrounding trade policy continues, the economic outlook for tourism remains conservative.

Median household income in Carlsbad continues to exceed county income levels. The median income for a household in Carlsbad in 2023 was $138,326, which was $8,270 lower than the previous year and $36,041 higher than the county median income. High interest rates have remained stagnant, but with continued high demand and low supply, as well as anticipated cuts by the Federal Reserve later

in 2025, property values in Carlsbad have remained strong. The median home price increased to $1.54 million or 4.3% over the previous year.

The city issued 2,796 business licenses in the third quarter of fiscal year 2024-25, including 1,195 nonresidential, 763 residential, and 838 outside-the-city licenses. This represents an increase of 480 total businesses over the same quarter in 2024. The number of licenses issued does not reflect the number of businesses in Carlsbad for several reasons: a business may carry multiple licenses, short-term vacation rentals are required to get a license, and businesses outside of Carlsbad that do business in the city or with the city are required to get a license. It is estimated that there are approximately 6,881 businesses in Carlsbad.

Between January and March of 2025, both residential and commercial building permits increased. The city issued 792 residential permits and 93 commercial permits. Despite the year-over-year increase, the number of residential building permits issued has been generally decreasing over the past three years, a trend largely attributable to a decline in demand for new photo-voltaic systems as a result of the State of California’s changes to net-metering rules.

General Fund Revenues

The city’s top three revenue sources continue to be property tax, sales tax and transient occupancy tax. Given the level of inflation coupled with lingering pent-up demand, personal savings, and disposable income, the city expects revenues to be slightly above the historic highs estimated in fiscal year 2024-25.

As shown in the chart below, General Fund revenues are expected to be $243.3 million in fiscal year 2025-26 and increase throughout the forecast. Sales tax revenues are conservatively projected to decrease by 2.6% from the record highs in fiscal year 2024-25. Property and transient occupancy tax revenues are expected to increase moderately from the record highs in fiscal year 2024-25. Other revenue sources consider assumptions ranging from no growth to conservative growth.

General Fund revenue performance, particularly in the three main categories discussed above, has experienced tremendous recovery and growth following the pandemic in March 2020. Shelter -inplace mandates, travel restrictions and federal stimulus have had significant impacts on the economy. Between 2022 and 2024, revenue performance was fueled by pent-up demand, increased personal savings and disposable income levels. However, decreasing consumer confidence levels and total gross sales tax receipts during fiscal year 2024-25 are driving the conservative sales tax assumptions in fiscal year 2025-26. Uncertainty surrounding whether the Fed’s interest rate targets will decrease, trade policy, and consumer demand resiliency, among other factors, warrant concern about the economy moving forward; this uncertainty continues to drive the need for conservative assumptions for economically sensitive revenue sources like sales and transient occupancy taxes.

The National Bureau of Economic Research, an American private nonprofit research organization, defines the beginning and ending dates of recessions. The Bureau defines a recession as “a significant decline in economic activity spread across the economy, lasting more than two quarters which is 6 months, normally visible in real GDP, real income, employment, industrial production, and wholesale retail sales.” Since World War II, recessions have lasted an average of 11.1 months and have occurred, on average, about every 58.4 months, or 4.8 years.

$ (in thousands)

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10-Year General Fund Revenue Forecast

$243,530 $260,507 $276,249

5-Year General Fund Revenue Forecast (in thousands)

Sales Tax

Sales tax is one of the city’s largest revenue sources. Sales tax revenues are collected at the point-ofsale and remitted to the California Department of Tax and Fee Administration, or CDTFA. The department allocates tax revenue owed to the city in monthly payments.

Sales tax revenues were adversely impacted in fiscal year 2019-20 with the onset of the pandemic. The restrictions resulting from the COVID-19 pandemic led to increases in segments like auto sales, construction, drug store sales, chemical product, food markets and recreational products, while others like restaurants and general retail took a major hit. The city has also been benefitting from sales tax revenues on internet sales generated as a result of the Wayfair decision or the Assembly Bill 147 law that went into effect in October 2019.

The onset of the pandemic in March 2020 resulted in swift reductions in sales tax revenues, with the city earning $38 million that fiscal year. During fiscal year 2020-21, impacts of COVID-19 on sales tax generally correlated with shelter-in-place mandates; as restrictions were lifted, recovery was realized, with fiscal year 2020-21 ending with $44 million in sales tax revenues. Fiscal year 2021-22 experienced the most accelerated recovery and ended the year at $51.2 million in sales tax revenues, a historic high for the city. Much of this recovery resulted from the easing of restrictions and pent-up demand. Fiscal year 2022-23 began with much uncertainty surrounding market and economic conditions like inflation and impacts to disposable income. Yet, consumer demand remained resilient and sales tax revenues are estimated to reach another historic high of $58.9 million. Much of the growth over the prior year was attributable to the correction of an error made by one specific auto dealer in how they were remitting and reporting sales tax receipts to the California Department of Tax and Fee Administration. This error has been corrected and will be treated as ongoing revenue in the future. Fiscal year 2024-25 experienced declining consumer demand resulting in a decrease in total taxable receipts which were offset by year-over-year inflationary increases. Looking ahead to fiscal year 2025-26, much uncertainty remains surrounding inflation, trade policy, and recessionary risk. With cooling inflation and continued declines in taxable receipts, a conservative estimate of $57.8 million is budgeted for fiscal year 2025-26 which represents a decrease of $0.9 million, or 2.6%, over fiscal year 2024-25 estimations.

Revenues received under Proposition 72, a 0.5 cent increase in California sales tax for the funding of local public safety services, are included in sales tax revenues.

Sales taxes are expected to increase over the next 10 years by an annual average rate of 1.2%.

Property Tax

Property tax is the largest source of General Fund revenue and is expected to grow by $3.2 million or 3.3% over the fiscal year 202425 estimated amount. While the residential real estate market in Carlsbad has seen significant increases in values, commercial property assessed values are still expected to remain flat. Since the beginning of calendar year 2024 despite the high-interest rate environment the median home price has increased, representing sustained demand given low inventory. Proposition 8 allows owners to have their property temporarily revalued if market value is lower than the factored base year value, posing a risk that property values could temporarily decrease. Until interest rates decline, prices are not anticipated to increase significantly on an annual basis.

Assessed values on residential real estate are expected to grow modestly, capped by California’s Proposition 13. Proposition 13, adopted in 1978, limits the annual increase in assessed values for property. Under this proposition, assessed values (and the related property tax) can grow by no more than 2% per year. The value upon which the tax is based is only increased to the full market value

upon the sale of a property. The maximum increase of assessed values, when not sold, is by the change in California’s Consumer Price Index, which was 1.036% for 2021-22 below the 2% cap for the first time since 2016-17. Residential activity has been driven by low interest rates on mortgages, pent-up demand that was built during the shutdown, and an increase in the ability to work remotely. With the rise in interest rates over the last year, that has shifted swiftly. The median price of a singlefamily residence in Carlsbad, based on resale data from Zillow, is $1.54 million, up 4.3% year over year as of March 2025. Estimates for the upcoming 2025-26 assessment year provided by the County of San Diego’s Assessor’s Office project moderate growth; however, the city’s forecast assumes a slightly more conservative outlook after taking into account current economic conditions and the related risks posed upon the housing market. Sustained levels of high inflation and the Federal Reserve’s current interest rate target are likely to impact property values as well as the volume of transactions.

Changes in property tax revenues lag behind changes in the housing market, as the tax revenue for the upcoming fiscal year is based on assessed values from January 2025. Thus, the taxes to be received for fiscal year 2025-26 are based on assessed values as of January 1, 2025.

Property taxes tend to grow slowly unless there is a significant amount of development-related activity. In past decades, the city has seen robust growth in property tax revenue due to new development, high turnover of existing homes, and double-digit growth in housing prices. However, as the city approaches buildout, development has slowed. In addition to recent interest rate increases, slower development combined with minimal commercial property transactions and tax reform has caused a slowing in property tax growth in the city.

Property taxes are expected to increase over the next 10 years at an annual average rate of 3.9%.

Transient Occupancy Tax

Transient Occupancy Tax, also known as TOT or hotel tax, is the third highest revenue source for the General Fund. TOT was the revenue category most adversely impacted by COVID-19. From a historic high of $26 million in fiscal year 2018-19, the city experienced year-over-year decreases of 27% and 16%. An accelerated recovery, with the easing of restrictions and pent-up demand, resulted in TOT revenues reaching new historic highs and ending fiscal year 2021-22 at $32.4 million. The city anticipated the rising inflation in fiscal year 2022-23 to adversely impact travel and tourism levels. However, the rise in average daily rates did not appear to significantly influence occupancy levels and as a result, the year ended with another historic high of $34.3 million. Fiscal year 2023-24 saw slight growth but was tapered by lingering inflation. Fiscal year 2024-25 is estimated to end the year at $34.8 million with fiscal year 2025-26 projected to increase by approximately 3.0%. Despite the inflation experienced the last couple of years, travel and tourism have remained resilient and the upcoming year’s projection remains cautiously optimistic.

The City of Carlsbad currently has approximately 5,059 hotel rooms and 449 registered vacation rentals. Transient occupancy taxes are expected to increase over the next 10 years by an annual average rate of 2.4%.

Franchise Tax

The city currently has franchise agreements for cable TV service, solid waste services, cell sites, fiber optic antenna systems and gas and electric services. The solid waste franchise experienced minor revenue increases that mirror growth in population and changes in rate structures. Cable TV franchise revenue is expected to remain relatively consistent from $1.3 million in the previous fiscal year to $1.3 million in fiscal year 2025-26. This revenue source will most likely remain stable or decline in future years as more subscribers cut cable services and move to online streaming services.

In April 2021, a new agreement was approved with Republic Services of San Diego. The city receives 7.5% of revenues collected as well as an annual payment of $0.8 million in support of AB 939 and $1.3 million storm water fee. Increases in the forecast are driven by estimated population growth which drives consumption.

San Diego Gas & Electric pays franchise taxes for the use of the public land over which they transport gas and electricity. The city also receives an “in-lieu” franchise tax based on the value of gas and electricity transported on SDG&E lines but purchased from another source. The “in-lieu” tax captures the franchise taxes on gas and electricity that is transported using public lands, which would not otherwise be included in the calculations for franchise taxes, due to deregulation of the power industry. This revenue source experienced a significant increase in fiscal year 2022-23 of $919,000 due to price increases but is expected to remain relatively flat out over the next several years.

Franchise taxes are expected to increase over the next 10 years at an annual average rate of 2.4%.

Business License Tax

Business licenses taxes are closely tied to the health of the local economy and are projected to increase to $6.8 million in fiscal year 2025-26, an increase of $0.2 million, or 3%, when compared to last year’s current estimates. Although there is generally a correlation with sales tax revenues, business license tax revenues tend to be more inelastic. There are currently about 10,043 licensed businesses in the City of Carlsbad, 592 less than in the prior year with 6,744 of them located in the city. Over the next 10 years, business license tax revenues are forecasted to increase annually, on average, by approximately 2.8%.

Development-Related Revenues

Development-related revenues are derived from fees for planning, engineering and building permits, and fees paid by developers to cover the cost of reviewing and monitoring development activities, such as plan checks and inspections. These revenues are difficult to predict, as many of the planning and engineering activities occur months or years before any actual development.

During fiscal year 2009-10, development-related revenues began to turn around from historic lows experienced in fiscal year 2008-09. Since then, development-related revenues have fluctuated in line with increases and decreases in residential, commercial and industrial development. In fiscal year 2025-26 the city expects a 1.5% increase in development-related revenues to approximately $6.0 million. This follows higher than anticipated development activity occurring in fiscal year 2024-25. The projected increase in development -related revenues is tied to the volume and type of development projected to be permitted, multi-family versus single-family, and the revenues derived from building fees which occur in the early stages of development. Increases applied to these charges for services are made in accordance with City Council Policy 95, Cost Recovery.

It is difficult to forecast development-related revenues as they fluctuate significantly from one year to the next. The city works with consultants to identify and estimate future development based on capacity. While development-related revenues have been trending downward based on capacity, the forecast attempts to normalize highs and lows experienced by applying conservative to moderate historical trendline assumptions. Over the next 10 years, development-related revenues are expected to increase approximately 4% annually on average.

Interdepartmental Charges

Interdepartmental charges are generated through engineering services charged to capital projects, reimbursed work from other funds and miscellaneous interdepartmental expenses charged to funds outside the General Fund for services performed by departments within the General Fund. Miscellaneous interdepartmental charges correlate with the consumer price index, or CPI, and are expected to increase annually and on average by 3.0%.

Income from Investments and Property

This category includes interest earnings as well as rental income from city-owned land and facilities. The city is expected to earn about $5.4 million in interest on its General Fund investments for fiscal year 2025-26 and another $3.5 million in rental and lease income. The yield on the city’s portfolio is forecasted to average 3.4% and cash balances are expected to remain flat as increases in receipts are projected to be offset by increases in expenditures as the City Council’s goals are operationalized.

Ambulance Fees

The city receives ambulance fee revenues based on gross revenue generated by the ambulance transport service provider. These revenues are estimated to decrease $0.4 million over last year’s estimates, from $7.2 million to $6.8 million. This decrease is driven by an anticipated increase in allowance for bad debt. Over the next 10 years, ambulance fees are anticipated to increase over the forecast period by 2.1% annually on average.

Transfer Taxes

Transfer taxes are those taxes paid to the county upon the transfer of interests in real estate. The tax is $1.10 per $1,000 of property value, split equally between the county and the city. Carlsbad expects to receive approximately $1.7 million in transfer taxes for fiscal year 2025-26, which is a 3% increase from fiscal year 2024-25 adopted budget and relatively consistent with current year estimates. The residential real estate market remains strong; however, this will likely be influenced by rising and sustained interest rates. Although housing prices in Carlsbad increased in 2024 and buyer demand remains high, inventories continue to remain low. Over the forecasted period, transfer taxes are expected to annually increase on average by 2.8% in alignment with housing industry projections.

Intergovernmental Revenues

These revenues represent funds received from other governmental entities. In recent years, this revenue category has experienced a great deal of activity with the American Rescue Plan Act of 2021 in which the city received $12.6 million over a two-year span. Fiscal year 2024-25 experienced a spike due to receiving FEMA reimbursements related to the COVID-19 pandemic. Over the forecasted period, intergovernmental revenues are expected to remain flat.

Other Revenues

All other revenues include recreation fees, other licenses and fees, fines and forfeitures, transfers in, and other charges and fees. Over the forecasted period, these revenues are anticipated to increase conservatively by 0.5% annually, on average.

General Fund Expenditures

Each year, the city updates the budget by considering historical, present, and future costs and trends. In recent years, the city has added new rigor to the budget process which includes the following measures and strategies:

• Automatic consumer price index increases were no longer added to base budgets. Instead, budget requests are required to substantiate the specific increase each year

• The process for carrying forward appropriations and encumbrances was formalized, whereby requests exceeding $100,000 require City Council approval.

• The process of requesting new staff was also enhanced, whereby new requests must meet one of the following criteria:

o Needed to comply with legal and regulatory requirements,

o Needed to address a critical public safety need, or

o Needed to meet City Council priorities or goals

• In fiscal years 2022-23 through 2024-25, departments were directed to identify budgetary savings which resulted in a decrease in General Fund maintenance and operation expenditures of approximately $5 million.

• In fiscal year 2025-26, after successfully delaying the future projected deficit until fiscal year 2030-31, no additional budget reductions were made. Notable budget increases were approved for public safety, environmental sustainability and utilities.

As shown in the chart below, General Fund expenditures are expected to increase from $242.9 million in fiscal year 2025-26 to $320.8 million over the 10-year forecast period, representing an increase of $77.9 million or 32%.

10-Year General Fund Expenditure Forecast

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5-Year General Fund Expenditure Forecast (in thousands)

Personnel Expenditures

Salaries

Full-time salaries are projected to grow at a rate of 4.2% per year, based on negotiated and step increases. Part-time salaries are forecasted to grow at a rate of 2.1% as they generally grow slower than full-time salaries. In fiscal year 2022-23 the city’s budget began accounting for vacancy savings. Vacancy savings represent the amounts of savings achieved through attrition. The forecast assumes $2 million in vacancy savings on an annual basis.

Health Benefits

In fiscal year 2024-25 health benefits accounted for about 8% of all personnel costs in the General Fund. The city pays employees a fixed amount for health and dental insurance costs instead of covering a percentage of premiums. Health benefit costs are forecasted to increase annually on average by approximately 5.1%.

Retirement

Rising retirement costs are driving the increase in employee benefits. Carlsbad provides retirement benefits for its employees through the California Public Employee’s Retirement System, or CalPERS. Poor investment returns during the Great Recession significantly decreased the plan’s assets. In addition, enhanced benefits and actuarial assumption changes due to increased life expectancies increased the plan’s liabilities. As a result, the city’s pension costs have increased significantly and are one of the city’s largest financial obligations.

In December 2016, the CalPERS Board of Administration lowered the discount rate from 7.5% to 7.0% with a three-year phase-in beginning in fiscal year 2018-19 to improve the financial stability of the pension system. This resulted in significant increases in retirement costs. In fiscal year 2021-22, the CalPERS Board lowered the discount rate from 7.0% to 6.8% because the fiscal year 2020-21 investment gain of 21.3% triggered the Funding Risk Mitigation Policy.

With CalPERS earning an investment loss of 6.1% in fiscal year 2021-22, the city’s required contributions over the next five years are projected to significantly increase. Since fiscal year 2021-22, CalPERS’ investment performance has been relatively stable. However, fiscal year 2023-24 and 202425 preliminary returns were both above the 6.8% target and are expected to reduce the city’s future ongoing costs.

The city’s retirement rates are based on a blend of all three miscellaneous tiers (2.7% at 55, 2% at 60, and 2% at 62). Although employees pay a different rate depending on their respective tier, the city’s costs are the same for all three tiers. The table to the right shows the current breakdown of city employees amongst the three retirement tiers The majority of employees in the city are currently covered under Tier 3. Savings from the lower-cost Tier 2 and Tier 3 plans are not expected to be substantial for several years.

A retiree’s highest monthly pension benefits are calculated by multiplying the following:

• Service credit: the number of years of CalPERS service

• Benefit Factor: percentage of pay based on age

• Compensation Basis: the highest monthly average salary for a defined period

Maintenance and Operations

General Fund departments budget for costs to support the ongoing maintenance and operations of the city. These costs comprise materials and supplies, professional services, and one-time special projects. One-time costs are budgeted for in year one of the forecasted period, so naturally, the increase over the forecasted period remains relatively low. On average, maintenance and operations costs are expected to increase approximately 3.2% annually.

Capital Outlay

Capital outlay costs are typically not budgeted for in the city’s General Fund; however, from time to time, departments may experience the need to purchase an item that is classified as a capital asset. In fiscal year 2024-25, the city established an Asset Replacement Reserve in the General Fund that will be used to fund significant capital outlay items on a rolling 10-fiscal year basis. As a result, the impacts of capital outlay expenditures have not been included in the city’s General Fund forecast.

Council Contingency

The city maintains a City Council Contingency budget at a level of $500,000.

Transfers

The General Fund is responsible for transferring funds for the following purposes:

• Lighting and Landscaping District #1 – the city established LLD #1 in 1986 and during its formation, no annual inflator was applied. As a result, the assessment paid by property owners in the district has become insufficient to cover the costs of lighting and landscaping. As a result, the General Fund is responsible for making up the difference. The transfer amount is expected to increase 7% over the next five years at an annual average rate of 1.5%.

• Future capital funding – the General Fund is responsible for a significant portion of the city’s capital project funding. On an annual basis, the General Fund transfers an equivalent of 6% of estimated General Fund revenues to the Strategic Digital Transformation Investment Program, the Infrastructure Replacement Fund, and the General Capital Construction Fund. This amounts to $4.9 million being transferred to each of the capital project funds. The fiscal year 2025-26 budget was able to program budget surplus by setting aside an additional $5.6 million, split evenly, to the General Capital Construction and Infrastructure Replacement Fund on a one-time basis. These transfer amounts increase throughout the forecast based on increases in forecasted General Fund revenues.

CalPERS

The city provides a defined benefit pension to its employees through the California Public Employees’ Retirement System. Retirement benefits are calculated using a formula based on an employee’s age, earnings, and years of service.

The retirement benefits are funded by:

• Investment earnings (60%),

• Employer contributions (29%), and

• Employee contributions (11%)

Each year, CalPERS determines an employer’s contributions based on actual investment returns and actuarial assumptions including:

• Expected investment returns (discount rates),

• Inflation rates,

• Salaries,

• Retirement ages, and

• Life expectancies

Contributions funding the pension plan are comprised of two components:

• The normal cost (the cost of the benefits earned in a respective year) and

• The amortization of the unfunded accrued liability, also known as the UAL.

CalPERS Discount Rate

Defined benefit plans are highly sensitive to the discount rate assumption. The discount rate is the expected rate of return of the plan’s assets over the long term. The discount rate will depend on the plan’s size, asset allocation, time horizon and other considerations.

From the city’s perspective, the discount rate is important as it is used to determine the city’s annual contributions to the plan, the plan’s unfunded liability, and the plan’s funded status. In other words, the discount rate is used to determine whether a plan has enough assets to meet its future obligations. The discount rate must be realistic to allow the city to foresee funding issues that may impact future operating budgets and future generations of retirees and plan members. If the discount rate assumption is too high and investments earn less than expected, a funding shortfall may ensue, requiring the city or CalPERS members to make greater contributions than expected.

CalPERS Investment Earnings

Since investment earnings fund nearly 60% of retirement benefits, the city’s pension plan is sensitive to the investment returns of CalPERS. Investment returns affect how much of the retirement benefits can be funded by investment earnings rather than contributions. If investment returns are lower than the discount rate, contributions must increase to make up for the difference. As a result, pension plans need accurate return assumptions to ensure fiscal sustainability.

Currently CalPERS assumes it will earn investment returns of 6.8% each year. As illustrated in the following chart, over the last 20 years, CalPERS has earned investment returns below the discount rate assumption approximately half of the time. Individual fiscal year investment returns ranged between -24.0% and +21.7%. Most notably, CalPERS earned negative investment returns in 2008 and 2009 due to the Great Recession and positive investment returns in 2021 following the COVID-19 pandemic.

For fiscal year 2021-22, CalPERS reported an investment loss of -6.1%, 12.7 percentage points lower than the 6.8% discount rate. The average investment return is 7% for a five-year period, 8% for a 10year period, and 7.5% for a 20-year period. As returns in a given year are volatile, it can be more instructive to look at returns over longer time horizons. As of June 30, 2024, below is a look at CalPERS’ investment returns over various time periods.

CalPERS Update

Funding Risk Mitigation Policy

Under the Funding Risk Mitigation Policy, the 21.3% return in fiscal year 2020-21 triggered a reduction in the discount rate from 7% to 6.8%. The Funding Risk Mitigation Policy, approved by the CalPERS Board in 2005, lowers the discount rate in years of good investment returns to reduce risk in the portfolio. The Risk Mitigation Policy began affecting contributions in fiscal year 2023-24.

Asset Liability Management Process

In November 2021, CalPERS completed its quadrennial Asset Liability Management process, which reviewed investment strategies and actuarial assumptions. At the Nov. 15-17, 2021, meetings, the CalPERS Board approved a 6.8% discount rate, selected a new asset allocation for the fund’s investment portfolio, and adopted new actuarial assumptions.

CalPERS Plan Status

As of the most recent actuarial valuation on June 30, 2023, the city’s miscellaneous pension plan had assets of $383.8 million, liabilities of $502.5 million and a funded ratio of 76.4%. The city’s safety pension plan had assets of $294.2 million, liabilities of $416.9 million and a funded ratio of 70.6%. The unfunded liability is the difference between assets and liabilities, while the funded ratio is the ratio of assets to liabilities.

CalPERS Miscellaneous Plan Status

Present Value of Projected Benefits

Entry Age Normal Accrued Liability

Present Value of Projected Benefits

June 30, 2022June 30, 2023

Safety Plan Status

June 30, 2022June 30, 2023

Impact of CalPERS Investments Returns

CalPERS assumes it will earn investment returns of 6.8% each year. If investment returns are higher than 6.8%, the city’s contributions decrease. Conversely, if investment returns are lower than 6.8%, the city’s contributions increase.

In fiscal year 2020-21, CalPERS earned 21.3% and as a result, the city’s required pension contributions decreased. In fiscal year 2021-22, CalPERS experienced an investment loss of -6.1% and as a result, the city’s required pension contributions increased in fiscal year 2024-25. In fiscal year 2022-23, CalPERS experienced an investment return of 5.8% which was below their target of 6.8% and as a result, the city’s required pension contributions will increase effective fiscal year 2025-26. However, CalPERS earned 9.3% in fiscal year 2023-24 and issued preliminary returns of 11.6% for fiscal year 2024-25 which is expected to reduce the city’s future pension-related costs.

Impact of CalPERS Discount Rate Changes

Due to lower-than-historical interest rates and economic growth, market experts project lower returns for the next several decades. The Pew Research Center forecasts a long-term investment return of 6.5% for typical pension fund portfolios.

During its Asset Management Liability Process, CalPERS considered discount rates between 6.25% and 7%. Ultimately, the CalPERS Board of Administration approved a discount rate of 6.8%, a decrease from the previous discount rate of 7%.

The discount rate has a significant effect on the city’s CalPERS contributions. If the discount rate is reduced, the city’s CalPERS contributions will increase.

CalPERS

City Strategies

In recent years, unfunded liabilities, or pension debts, have caused cities in California to cut back on public services. Three cities have declared bankruptcy. Pension debt is the difference between how much money is available to pay for the pensions that city employees receive when they retire and the money needed to pay for those benefits. Pension debt is an estimate because it’s not possible to know exactly how well the pension fund investments will perform nor how many employees will retire, at what age they will retire and how long they will live.

The City of Carlsbad has long recognized the financial uncertainty caused by the state’s pension system. That’s why Carlsbad was one of the first cities in the region to enact pension reform, predating state reforms in 2013. This and other strategies have reduced the city’s pension debt considerably compared to most other cities in the state.

In 2019, the City Council adopted a Pension Funding Policy via City Council Policy Statement 86. This policy states that the city will strive to maintain 80% funded status. Said another way, the goal of this policy is to keep Carlsbad’s pension debt at no more than 20% of its estimated liability.

Since fiscal year 2016-17, the city has contributed $56.4 million to CalPERS to reduce the city’s unfunded liability and thereby achieve interest savings. These contributions were in addition to the annual contributions required by CalPERS.

In fiscal year 2023-24, the City Council approved the establishment of a Section 115 Pension Trust. A Section 115 Pension Trust is a tax-exempt investment tool that allows local governments to pre-fund pension and retiree health costs. Once contributions are placed into the trust, assets from the trust can only be used for retirement plan purposes. Withdrawals may be made to either reimburse the city for retirement system contributions or to directly pay CalPERS.

The benefits of a Section 115 Trust include the following:

• Local control over assets: The city controls the contributions, withdrawals, investment strategy and risk level of assets in the Trust.

• Pension rate stabilization: Assets can be transferred to CalPERS at the city’s discretion to pay for Normal Cost or Unfunded Actuarial Liability (UAL) contributions and can be used to reduce or eliminate large fluctuations in the city’s pension costs.

• Potential for higher investment return than General Fund: Investment requirements that apply to the city’s General Fund assets under Government Code 53601 are not applicable to Trust assets.

• Diversification: Trust assets will be diversified from CalPERS’ investments.

The Section 115 Trust will be available to help offset future increases in pension costs while minimizing the impact on the city’s operating budget. It will provide the city with an alternative to sending funds directly to CalPERS while allowing the flexibility to make additional payments to CalPERS to reduce the Unfunded Actuarial Liability at the city’s discretion.

The purpose of the trust is to accumulate sufficient assets to:

(1) maintain an 80% funded status in accordance with City Council Policy 86 and (2) fund potential future decreases in CalPERS’ discount rate. For example, a reduction in CalPERS’ discount rate from the current 6.8% to 6.25% would result in additional contributions of approximately $118 million over a 20-year period. The city’s Section 115 Pension Trust is scheduled to receive $40 million in principal contributions from the General Fund over a five-year period and assuming a 6.25% annual rate of return, the trust is projected to accumulate sufficient funds to mitigate the impacts of such a discount rate reduction over a 20-year period.

Even though CalPERS is continuing to take prudent measures to manage pension liabilities for its participants, the annual costs paid by participating members will continue to increase. And, while CalPERS has outperformed its assumed rate of return on investments over the last 10 years, future economic uncertainty is likely to have a profound impact on its investment performance, which will impact the city’s annual required contributions.

General Fund’s Fund Balance

The General Fund’s fund balance serves as an indicator of fiscal health for the city. It represents the cumulative amount of revenues in excess of expenditures and how those funds may be used in the future. The city is required to account for its fund balances in accordance with Governmental Accounting Standard 54, which categorizes and defines how funds are to be reported as follows:

Nonspendable Fund Balance – this includes amounts that cannot be spent because they are either not spendable in form (such as inventory) or legally or contractually required to be maintained intact (such as endowments). The city’s nonspendable balances include inventory, prepaid costs, deposits, loans receivable and advances to other funds.

Restricted Fund Balance – this includes amounts that can be spent only for specific purposes stipulated by the constitution, external resource providers, or through enabling legislation. If the City Council action limiting the use of funds is included in the same action (legislation) that created (enables) the funding source, then it is restricted. The city’s restricted balance includes funds that have been contributed to the Section 115 Pension Trust. These funds are legally restricted to be used for pension related purposes. Between fiscal year 2025-26 and 2027-28, the General Fund is scheduled to contribute an additional $22.5 million and, assuming a 6.25% annual rate of return, is expected to accumulate $68.7 million at the end of the forecasted period.

Committed Fund Balance – this includes amounts that can be used only for the specific purposes determined by a formal action of the City Council. It includes legislation (City Council action) that can only be overturned by new legislation requiring the same type of voting consensus that created the original action. Therefore, if the City Council action limiting the use of the funds is separate from the action (legislation) that created (enables) the funding source, then it is committed, not restricted. The city considers a resolution to constitute the form action of the City Council that is necessary to commit fund balance. The city currently has $1,000,000 committed for community activity grants.

Assigned Fund Balance – this includes amounts that are designated or expressed by the City Council but does not require a formal action like a resolution or ordinance. The City Council has delegated the authority for the City Manager to carry forward certain unspent budget amounts for specific one-time purposes if the amount is equal or less than $100,000 per item to the next fiscal year. The City Council has authorized, through resolution, that all outstanding encumbrances at the end of the fiscal year and certain unspent budgeted amounts over $100,000 per item to be carried forward into the next fiscal year. Authorized encumbrances and carryforward budget are presented by function (General Government, Public Safety, Community Services, and Public Works). These amounts vary from year to year; for purposes of the forecast, historical averages were applied to each of the out years. The assigned fund balance also includes an assignment for economic uncertainty which may be used for periods of economic downturn or decline and at the discretion of the City Council. Lastly, this classification also has an Asset Replacement Reserve of $10 million. This reserve will be used and replenished on an annual basis to replace significant assets within the General Fund and thereby mitigate budgetary pressures and fiscal impacts on the General Fund Reserve.

Unassigned Fund Balance – this includes the remaining spendable amounts which are not included in one of the other classifications. The General Fund is the only fund that reports a positive unassigned fund balance amount. It is the city’s policy that restricted resources will be applied first, followed by (in order of application) committed, assigned, and unassigned resources, in the absence of a formal policy adopted by the City Council. This balance is also referred to as the General Fund Reserve, which, in accordance with City Council Policy 74, must maintain a balance equal to or greater than 40% of the General Fund’s adopted operating budget. As of fiscal year end 2025-26, the General Fund Reserve is projected to have a reserve ratio of 54% and is not projected to drop below 40% until fiscal year 2031-32.

Below is a 10-year forecast of the General Fund’s fund balance and its various classifications. As the General Fund’s expenditures are projected to begin exceeding its revenues beginning in fiscal year 2030-31, we can see the total fund balance amount begins to decline at that point and thereafter. As the city has done in the past, careful planning and strategic actions will be considered to ensure the projected deficit is pushed as far out into the future as possible.

NO. 2025-136

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, ADOPTING THE FINAL OPERATING BUDGET, STRATEGIC DIGITAL TRANSFORMATION INVESTMENT PROGRAM AND CAPITAL IMPROVEMENT PROGRAM FOR FISCAL YEAR 2025-26 FOR THE CITY OF CARLSBAD AND ESTABLISHING CONTROLS ON CHANGES IN APPROPRIATIONS FOR BUDGET FUNDS

WHEREAS, the City Council of the City of Carlsbad, California, has reviewed the proposed final Operating Budget, Strategic Digital Transformation Investment Program and Capital Improvement Program for fiscal year (FY) 2025-26 and has held such public hearings as are necessary prior to adoption of the final budgets.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:

1. That the above recitations are true and correct.

2. The proposed action is not a “project” as defined by CEQA Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and CEQA Guidelines.

3. That certain documents now on file in the Office of the City Clerk of the City of Carlsbad, entitled “Fiscal Year 2025-26 Preliminary Operating Budget, Strategic Digital Transformation Investment Program and Capital Improvement Program” presented at the Joint Special Meeting on May 20, 2025 as Exhibit 6 to Item No. 11, as amended, if necessary, in accordance with Attachments A-A3, B-B2, C and D to this Exhibit 1 are adopted as the final Operating Budget, Strategic Digital Transformation Investment Program and Capital Improvement Program for the City of Carlsbad for FY 2025-26, along with any adjustments, if any, determined by the City Council as set forth in the minutes of this Joint Special Meeting on June 17, 2025.

4. That the amounts reflected as estimated revenues for FY 2025-26 as shown in Attachments A-A2 and B are adopted as the budgeted revenues for FY 2025-26

5. That the amounts as designated as the FY 2025-26 Budget request in Attachments A-A3, B-B2, and D are appropriated to the department or fund for which they are designated, and such appropriation shall not be increased except as provided in this resolution.

6. That the items and amounts as shown in Attachment E are adopted as major capital outlay items over $100,000 requiring City Council approval for FY 2025-26.

7. That total appropriations for each fund may only be increased or decreased by the City Council by passage of a resolution amending the budget except as provided in this resolution.

8. That the following controls are placed on the use and transfer of budget funds:

A. No expenditure of funds shall be authorized unless sufficient funds have been appropriated by the City Council or City Manager as described below.

i. The City Manager may authorize all transfers of funds from account to account within any department.

ii. The City Manager may authorize transfers of funds between departments within the same fund in an amount up to $100,000 per transfer.

iii. The City Manager may authorize transfers of funds from the Housing Trust Fund to the Section 8 Housing Fund program administration to support the program’s fund balance and aid in the expansion of the program if costs exceed budget related to administration, payroll, vouchers, and related costs.

iv. The City Manager may authorize budget adjustments involving offsetting revenues and expenditures; the City Manager may authorize increases in an appropriation for a specific purpose where the appropriation is offset by unbudgeted revenue designated for the specific purpose.

v. The City Manager may authorize budget adjustments to increase the appropriation for the Workers’ Compensation and Risk Management Funds’ operating budgets in an amount equal to the increases in costs of claims expenses or estimated losses and liabilities.

vi. The City Manager may authorize budget adjustments to increase the appropriation for final vacation pay and earned leave accrual budgets in an amount equal to the increases in actual expenses should they exceed budgeted amounts in their respective funds.

vii. The City Manager may authorize budget adjustments to increase budgeted amounts for depreciation and amortization should it be necessary to maintain compliance with the United States Generally Accepted Accounting Principles.

viii. The City Manager may authorize increases of 15% or less to purchasing authority for capital outlay items requiring the City Council to act as the awarding authority approved in the budget process.

ix. The City Manager may authorize budget adjustments to increase the appropriation for unforeseen legal expenses and liabilities.

x. The City Manager may authorize budget adjustments to increase the appropriation for Mutual Aid expenses in an amount equal to the increases in amounts to be reimbursed by other agencies.

xi. The City Manager may authorize budget adjustments to increase the appropriations in the Utilities Department for costs pertaining to the Core System Modernization Project and utility billing.

xii. The City Council must authorize all transfers of funds from the City Council’s Contingency Account.

xiii. The City Manager may delegate any of the authority given to the City Manager under this resolution.

B. The City Council must authorize any increase in the number of authorized permanent personnel positions above the level identified in Attachment C.

C. The City Manager may authorize the hiring of temporary or part-time staff as necessary within the limits imposed by the controls listed above.

9. That the legal level of budgetary control is the fund level. Budgets may not legally be exceeded at the fund level without appropriate authorization by the City Council.

10. That interest earned on grants may be appropriated during the year for the purpose for which the grant was received.

11. That all appropriations in the Capital Improvement Program remaining unexpended as of June 30, 2025, are appropriated to FY 2025-26 in their respective project budgets.

12. That all appropriations in the Strategic Digital Transformation Investment Program remaining unexpended as of June 30, 2025, are appropriated to FY 2025-26 in their respective project budgets.

13. That all appropriations in the Operating Budget remaining unexpended as of June 30, 2025, related to developer deposits received for developer-funded studies not yet completed or grant awards received or expected for projects that are continuing into the next fiscal year are appropriated to FY 2025-26.

14. That all appropriations for outstanding encumbrances as of June 30, 2025, are continued into FY 2025-26 for such contracts or obligations.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, the Community Development Commission, and the City Council as Successor Agency to the Carlsbad Redevelopment Agency held on the 17th day of June, 2025, by the following vote, to wit:

AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

NAYS: None.

ABSTAIN: None.

ABSENT: None.

KEITH

BLACKBURN, Mayor

SHERRY FREISINGER, City Clerk (SEAL)

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD MUNICIPAL WATER DISTRICT OF THE CITY OF CARLSBAD, CALIFORNIA, ADOPTING THE WATER DISTRICT’S FINAL OPERATING BUDGET, STRATEGIC DIGITAL TRANSFORMATION INVESTMENT PROGRAM AND CAPITAL IMPROVEMENT PROGRAM FOR FISCAL YEAR 2025-26 AND ESTABLISHING CONTROLS ON CHANGES IN APPROPRIATIONS FOR BUDGET FUNDS

WHEREAS, the Board of Directors of the Carlsbad Municipal Water District of the City of Carlsbad, California, has reviewed the proposed final Operating Budget, Strategic Digital Transformation Investment Program and Capital Improvement Program for FY 2025-26 and has held such public hearings as are necessary prior to the adoption of the final budgets.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Carlsbad Municipal Water District of the City of Carlsbad, California, as follows:

1. That the above recitations are true and correct.

2. The proposed action is not a “project” as defined by CEQA Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and CEQA Guidelines.

3. That certain documents now on file in the Office of the City Clerk of the City of Carlsbad, entitled “Fiscal Year 2025-26 Preliminary Operating Budget, Strategic Digital Transformation Investment Program and Capital Improvement Program” presented at the Joint Special Meeting on May 20, 2025 as Exhibit 6 to Item No. 11, as amended, if necessary, in accordance with Attachments A and B to this Exhibit 2 are adopted as the final Operating Budget, Strategic Digital Transformation Investment Program and Capital Improvement Program for the Carlsbad Municipal Water District for FY 2025-26, along with any adjustments, if any, determined by the Board of Directors as set forth in the minutes of this Joint Special Meeting on June 17, 2025.

4. That the amounts reflected as estimated revenues for FY 2025-26 as shown in Attachment A are adopted as the budgeted revenues for FY 2025-26.

5. That the amounts designated as FY 2025-26 Budgets in Attachments A and B to this Exhibit 2 and the City of Carlsbad’s estimated share of the FY 2025-26 Operating and Capital Budget of Encina Wastewater Authority attributable to the Carlsbad Water Recycling Facility as presented in Attachment C to this Exhibit 2 are appropriated to the fund for which they are designated, either operating or capital improvement, and such appropriation shall not be increased except as provided in this resolution.

6. That total appropriations may only be increased or decreased by the Board of Directors by passage of a resolution amending the budget except as provided in this resolution.

7. That the following controls are placed on the use and transfer of budget funds:

A. No expenditure of funds shall be authorized unless sufficient funds have been appropriated by the Board of Directors or Executive Manager as described below.

i. The Executive Manager may authorize all transfers of funds from account to account within the same fund.

ii. The Executive Manager may authorize budget adjustments involving offsetting revenues and expenditures; the Executive Manager may authorize increases in an appropriation for a specific purpose where the appropriation is offset by unbudgeted revenue designated for the specific purpose.

iii. The Executive Manager may authorize increases in purchased water appropriations in an amount equal to the same percent that water sales exceed the amount of the original revenue estimate.

iv. The Executive Manager may authorize budget adjustments to increase the appropriation for unforeseen legal expenses and liabilities

v. The Executive Manager may delegate the authority given to the Executive Manager under this resolution.

B. The Board of Directors must authorize any increase in the number of authorized permanent personnel positions chargeable to the water and recycled water enterprise funds above the level identified in the final Budget. The Executive Manager may authorize the hiring of temporary or part time staff chargeable to the water and recycle water enterprise funds as necessary within the limits imposed by the controls listed above.

8. That all appropriations for outstanding encumbrances as of June 30, 2025, are continued into FY 2025-26 for such contracts and obligations.

9. That interest earned on grants may be appropriated during the year for the purpose for which the grant was received.

10. That all appropriations for Capital Improvement Projects remaining unexpended as of June 30, 2025, are appropriated to FY 2025-26 in their respective project budgets.

11. That all appropriations in the Strategic Digital Transformation Investment Program remaining unexpended as of June 30, 2025, are appropriated to FY 2025-26 in their respective project budgets.

12. That all appropriations in the Operating Budget remaining unexpended as of June 30, 2025, related to grant awards received or expected for projects that are continuing into the next fiscal year are appropriated to FY 2025-26.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Board of Directors of the Carlsbad Municipal Water District, the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Public Financing Authority, the Community Development Commission, and the City Council as Successor Agency to the Carlsbad Redevelopment Agency held on the 17th day of June, 2025, by the following vote, to wit:

AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

NAYS: None.

ABSTAIN: None.

ABSENT: None.

KEITH BLACKBURN, President

SHERRY FREISINGER, Secretary (SEAL)

RESOLUTION NO. 575

A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITYOFCARLSBAD, CALIFORNIA, ADOPTINGTHEFINAL OPERATING BUDGET OF THE CARLSBAD HOUSING AUTHORITY FOR FISCAL YEAR 2025-26 AND ESTABLISHING CONTROLS ON CHANGES IN APPROPRIATIONS FOR BUDGET FUNDS

WHEREAS, the Community Development Commission of the City of Carlsbad, California, has reviewed the Operating Budget for the Carlsbad Housing Authority for fiscal year 2025-26 and has held such public hearings as are necessaryprior to the adoption of the final budget.

NOW, THEREFORE, BE IT RESOLVED by the Community Development Commission of the City of Carlsbad, California, as follows:

1. That the above recitations are true and correct.

2. The proposed action is not a "project" as defined by CEQA Section 21065 and CEQA GuidelinesSection15378(b)(4) and does not require environmental reviewunder CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may requirepreparation of anenvironmental documentin accordance with CEQA and CEQA Guidelines.

3. That certain documents now on file in the Office of the City Clerk of the City of Carlsbad, entitled "Fiscal Year 2025-26 Preliminary Operating Budget, Strategic Digital Transformation Investment Program and Capital Improvement Program," presented at the Joint Special Meeting on May 20, 2025 as Exhibit 6 to Item No. 11, as amended, if necessary, in accordance with Attachments A of this Exhibit 3 are adopted as the final Operating Budget for the Carlsbad Housing Authority for FY 2025-26, along with any adjustments, if any, determined by the Commission as set forth in the minutes of this Joint Special Meeting on June 17, 2025.

4. That all funding for planning and administrative expenses has been determined to be necessary and appropriate for implementation of the Carlsbad Housing Authority's activities in FY 2025-26.

5. That the amounts reflected as estimated revenues for FY 2025-26 as shown in Attachment A are adopted as the budgeted revenues for FY 2025-26.

6. That the amount designated as FY 2025-26 Budget request in Attachment A to this Exhibit 3 is appropriated to the fund for which it is designated, and such appropriation shall not be increased except as provided in this resolution.

7. That the following controls are placed on the use and transfer of budget funds:

A. No expenditure of funds shall be authorized unless sufficient funds have been appropriatedby the Commission or Executive Director as described below.

i. The Executive Director may authorize all transfers of funds from account to account within the same fund.

ii. The Executive Director may delegate any of the authority given to the Executive Director under this resolution.

iii. The Executive Director may authorize budget adjustments involving offsetting revenues andexpenditures; the Executive Director may authorize increases in an appropriation for a specific purpose where the appropriation is offset by unbudgeted revenue designated for the specific purpose.

B. The Commission must authorize any increase in the number of authorized permanent personnel positions chargeable to the Carlsbad Housing Authority above the level identified in the final budget. The Executive Director may authorize the hiring of temporary or part time staff chargeable to the Carlsbad Housing Authority as necessary within the limits imposed by the controls listed above.

8. That all appropriations for any state or federal grant funds in the Operating Budget remaining unexpended as of June 30, 2025, are appropriated to FY 2025-26.

9. That all outstanding encumbrances as of June 30, 2025, are continued into FY 2025-26 for such contracts and obligations.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Community Development Commission, the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, and the City Council as Successor Agency to the Carlsbad Redevelopment Agency held on the 17th day of June, 2025, by the following vote, to wit:

AYES:

NAYS:

ABSTAIN:

ABSENT: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

None.

None.

None.

KEITH BLACKBURN, Chairperson

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD PUBLIC FINANCING AUTHORITY OF THE CITY OF CARLSBAD, CALIFORNIA, ADOPTING THE FINAL OPERATING BUDGET AND CAPITAL IMPROVEMENT PROGRAM OF THE CROSSINGS AT CARLSBAD MUNICIPAL GOLF COURSE FOR FISCAL YEAR 2025-26 AND ESTABLISHING CONTROLS ON CHANGES IN APPROPRIATIONS FOR BUDGET FUNDS

WHEREAS, the Board of Directors of the Carlsbad Public Financing Authority has reviewed the proposed final Operating Budget for The Crossings at Carlsbad Municipal Golf Course for fiscal year 2025-26 and has held such public hearings as are necessary prior to the adoption of the final budgets.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Carlsbad Public Financing Authority as follow:

1. That the above recitations are true and correct.

2. The proposed action is not a “project” as defined by CEQA Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and CEQA Guidelines

3. That certain documents now on file in the Office of the City Clerk of the City of Carlsbad, entitled “Fiscal Year 2025-26 Preliminary Operating Budget, Strategic Digital Transformation Investment Program and Capital Improvement Program,” presented at the Joint Special Meeting on May 20, 2025 as Exhibit 6 to Item No. 11, as amended, if necessary, in accordance with Attachment A to this Exhibit 4 are adopted as the final Operating and Capital Improvement Program Budgets for The Crossings at Carlsbad Municipal Golf Course for FY 2025-26, along with any adjustments, if any, determined by the Board of Directors as set forth in the minutes of this Joint Special Meeting on June 17, 2025.

4. That the amounts reflected as estimated revenues for FY 2025-26 as shown in Attachment A are adopted as the budgeted revenues for FY 2025-26.

5. That the amount designated as FY 2025-26 Budget request in Attachment A to this Exhibit 4 is appropriated to the fund for which it is designated, and such appropriation shall not be increased except as provided in this resolution.

6. That the following controls are placed on the use and transfer of budget funds:

A. No expenditure of funds shall be authorized unless sufficient funds have been appropriated by the Board of Directors or Executive Director as described below.

i. The Executive Director may authorize all transfers of funds from account to account within the same fund.

ii. The Executive Director may delegate the authority to make budget transfers and adjustments.

iii. The Executive Director may authorize budget adjustments involving offsetting revenues and expenditures; the Executive Director may authorize increases in an appropriation for a specific purpose where the appropriation is offset by unbudgeted revenue which is designated for the specific purpose.

iv. The Executive Director may delegate any of the authority given to him or her under this resolution.

7. That all outstanding encumbrances as of June 30, 2025, are continued into FY 2025-26 for such contracts and obligations.

8. That all appropriations in the Capital Improvement Program remaining unexpended as of June 30, 2025, are appropriated to FY 2025-26 for their respective project budgets.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Board of Directors of the Carlsbad Public Financing Authority, the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Municipal Water District, the City of Carlsbad Community Development Commission, and the City Council of the City of Carlsbad as Successor Agency to the Carlsbad Redevelopment Agency held on the 17th day of June, 2025, by the following vote, to wit:

AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

NAYS: None.

ABSTAIN: None.

ABSENT: None.

KEITH BLACKBURN, Chairperson

SHERRY FREISINGER, Secretary (SEAL)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, ACTING AS THE SUCCESSOR AGENCY FOR THE CARLSBAD REDEVELOPMENT AGENCY, ADOPTING THE FINAL OPERATING BUDGET OF THE SUCCESSOR AGENCY AND THE ENFORCEABLE DEBT OBLIGATIONS OF THE CITY OF CARLSBAD’S REDEVELOPMENT OBLIGATION RETIREMENT FUND FOR FISCAL YEAR 2025-26 AND ESTABLISHING CONTROLS ON CHANGES IN APPROPRIATIONS FOR BUDGET FUNDS

WHEREAS, the City Council of the City of Carlsbad, California, has been designated as the Successor Agency for the Carlsbad Redevelopment Agency (“Successor Agency”) and, as such, is responsible for the administrative responsibilities required to complete the work of the former Carlsbad Redevelopment Agency and repay all enforceable debt obligations; and WHEREAS, the Successor Agency and the appointed Oversight Board have reviewed the proposed Operating Budget for the Successor Agency and previously approved the enforceable debt obligations to be repaid from the Redevelopment Obligation Retirement Fund for fiscal year 2025-26; and

WHEREAS, the Successor Agency finds that the proposed Operating Budget for the Agency and the Oversight Board approved enforceable debt obligations of the Redevelopment Obligation Retirement Fund are consistent with the Recognized Obligation Payment Schedule prepared by the Successor Agency and approved by the Oversight Board; and

WHEREAS, public hearings have been held as necessary prior to the adoption of the final operating budget.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, acting as Successor Agency for the Carlsbad Redevelopment Agency, as follows:

1. That the above recitations are true and correct.

2. The proposed action is not a “project” as defined by CEQA Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and CEQA Guidelines.

3. That certain documents now on file in the Office of the City Clerk of the City of Carlsbad, entitled “Fiscal Year 2025-26 Preliminary Operating Budget,” presented at the Joint Special Meeting on May 20, 2025 as Exhibit 6 to Item No. 11, as amended, if necessary, in accordance with Attachment A to this Exhibit 5 are adopted as the final Operating Budget for the Successor Agency and the enforceable debt obligations of the City of Carlsbad’s Redevelopment Obligation Retirement Fund for FY 2025-26, along with any adjustments, if any, determined by the Successor Agency as set forth in the minutes of this Joint Special Meeting of June 17, 2025.

4. That the amounts reflected as estimated revenues for FY 2025-26 as shown in Attachment A to this Exhibit 5 are adopted as the budgeted revenues for FY 2025-26.

5. That the amount designated as FY 2025-26 Budget request in Attachment A to this Exhibit 5 is appropriated to the fund for which it is designated, and such appropriation shall not be increased except as provided in this resolution.

6. That the following controls are placed on the use and transfer of budget funds:

A. No expenditure of funds shall be authorized unless sufficient funds have been appropriated by the Successor Agency or City Manager, as described below.

i. The City Manager may authorize all transfers of funds from account to account within the same fund.

ii. The City Manager may delegate any authority given to the City Manager under this resolution.

iii. The City Manager may authorize budget adjustments involving offsetting revenues and expenditures; the City Manager may authorize increases in an appropriation for a specific purpose where the appropriation is offset by unbudgeted revenue designated for the specific purpose and is approved in advance by the Oversight Board.

7. That all outstanding encumbrances as of June 30, 2025, are continued into FY 2025-26 for such contracts and obligations, as approved by the Oversight Board.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the City Council as Successor Agency to the Carlsbad Redevelopment Agency, the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority and the Community Development Commission held on the 17th day of June, 2025, by the following vote, to wit:

AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

NAYS: None.

ABSTAIN: None.

ABSENT: None.

KEITH BLACKBURN, Mayor

SHERRY FREISINGER, City Clerk (SEAL)

RESOLUTION NO. 2025-138

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, ESTABLISHING THE FISCAL YEAR 2025-26 APPROPRIATION LIMIT AS REQUIRED BY ARTICLE XIIIB OF THE CALIFORNIA STATE CONSTITUTION AND STATE LAW

WHEREAS, Article XIIIB of the California State Constitution requires that governments annually establish a limit on the appropriation of proceeds of taxes commonly known as the “Gann Limit”; and WHEREAS, state law requires that this limit be presented to the governing body of each entity each fiscal year; and

WHEREAS, the Gann Limit is based on a combination of a population factor and an inflation factor as outlined in Attachment A; and

WHEREAS, the City Council desires at this time and deems it to be in the best public interest to adopt the annual Gann Limit for fiscal year 2025-26 as listed in Attachment A to this Exhibit 6.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:

1. That the above recitations are true and correct.

2. The proposed action is not a “project” as defined by CEQA Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and CEQA Guidelines.

3. That the City Council of the City of Carlsbad establishes and adopts the FY 2025-26 appropriation limit of $673,537,530 as computed in Attachment A to this Exhibit 6.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, the Community Development Commission, and the City Council as Successor Agency to the Carlsbad Redevelopment Agency held on the 17th day of June, 2025, by the following vote, to wit:

AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

NAYS: None.

ABSTAIN: None.

ABSENT: None.

Mayor

FREISINGER, City Clerk (SEAL)

KEITH BLACKBURN,

SHERRY

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, ADOPTING CHANGES TO THE MASTER FEE SCHEDULE

WHEREAS, the City Council of the City of Carlsbad, California, has the authority to establish fees for city services; and

WHEREAS, from time to time the fees are reviewed and evaluated to maintain an adequate fee structure recovering costs for city services; and

WHEREAS, the City Council has determined the cost of providing general and developmentrelated services; and

WHEREAS, the City Council believes it is necessary for the City Manager to have the authority to adjust the parks and recreation and library and cultural arts program, rental, and classes fees from time to time to remain competitive and within the market pricing for like programs and classes; and

WHEREAS, the City Council finds it necessary to recover the costs for city services; and

WHEREAS, the City Council has held the necessary public hearing and allowed for public comment on the establishment of the fees.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:

1. That the above recitations are true and correct.

2. The proposed action is not a “project” as defined by CEQA Section 21065 and CEQA

Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and CEQA Guidelines.

3. That the changes to the Master Fee Schedule as shown in Attachment A are adopted.

4. The City Council authorizes the City Manager or a designee to set parks and recreation and library and cultural arts program, rental, and class fees that are included in the Community Services Guide. The fees shall not exceed the fully burdened, including direct and indirect, costs of providing the program, rental, and class but shall be no less

(except in the case of introductory, discount or promotional pricing) than the lowest fee charged for like kind programs or classes in similarly benchmarked Southern California cities.

5. The City Council authorizes the City Manager or a designee to change vehicle and traffic violation fees at the time, and by the same amount, as the state changes its portion of the fine. Any changes to these fees will be made to the current Master Fee Schedule.

6. This resolution shall become effective on Sept. 1, 2025; not sooner than 60 days after adoption in accordance with California Government Code Section 66017 for development-related service fees and development impact fees.

7. The park land in-lieu fee changes incorporated into Attachment A will become effective on July 1, 2025.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, the Community Development Commission, and the City Council as Successor Agency to the Carlsbad Redevelopment Agency held on the 17th day of June, 2025, by the following vote, to wit:

AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

NAYS: None.

ABSTAIN: None.

ABSENT: None.

KEITH BLACKBURN, Mayor

SHERRY FREISINGER, City Clerk (SEAL)

RESOLUTION NO. 1773

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD MUNICIPAL WATER DISTRICT OF THE CITY OF CARLSBAD, CALIFORNIA, ADOPTING CHANGES TO THE MASTER FEE SCHEDULE

WHEREAS, the Board of Directors of the Carlsbad Municipal Water District of the City of Carlsbad, California, has the authority to establish fees for district services; and WHEREAS, from time to time the fees are reviewed and evaluated to maintain an adequate fee structure recovering costs for district services; and

WHEREAS, the Board of Directors has determined the cost of providing water services; and WHEREAS, the Board of Directors finds it necessary to recover the costs for water services; and WHEREAS, the Board of Directors has held the necessary public hearing and allowed for public comment on the establishment of the fees.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Carlsbad Municipal Water District of the City of Carlsbad, California, as follows:

1. That the above recitations are true and correct.

2. The proposed action is not a “project” as defined by CEQA Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and CEQA Guidelines.

3. That the changes to the Master Fee Schedule as shown in Attachment A are adopted.

4. This resolution shall become effective on Sept. 1, 2025; not sooner than 60 days after adoption in accordance with California Government Code Section 66017 for water fees.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Board of Directors of the Carlsbad Municipal Water District, the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Public Financing Authority, the Community Development Commission, and the City Council as Successor Agency to the Carlsbad Redevelopment Agency held on the 17th day of June, 2025, by the following vote, to wit:

AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

NAYS: None.

ABSTAIN: None.

ABSENT: None.

KEITH BLACKBURN, President

SHERRY FREISINGER, Secretary (SEAL)

A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF CARLSBAD, CALIFORNIA, ADOPTING CHANGES TO THE MASTER FEE SCHEDULE

WHEREAS, the Community Development Commission of the City of Carlsbad, California, has the authority to establish fees for housing services; and

WHEREAS, from time to time the fees are reviewed and evaluated to maintain an adequate fee structure recovering costs for housing services; and

WHEREAS, the Community Development Commission has determined the cost of providing housing services; and

WHEREAS, the Community Development Commission finds it necessary to recover the costs for housing services; and

WHEREAS, the Community Development Commission has held the necessary public hearing and allowed for public comment on the establishment of the fees.

NOW, THEREFORE, BE IT RESOLVED by the Community Development Commission of the City of Carlsbad, California, as follows:

1. That the above recitations are true and correct.

2. The proposed action is not a “project” as defined by CEQA Section 21065 and CEQA

Guidelines Section 15378(b)(4) and does not require environmental review under CEQA

Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and CEQA Guidelines.

3. That the changes to the Master Fee Schedule as shown in Attachment A are adopted.

4. This resolution shall become effective on Sept. 1, 2025; not sooner than 60 days after adoption in accordance with California Government Code Section 66017 for housing fees.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Community Development Commission, the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, and the City Council as Successor Agency to the Carlsbad Redevelopment Agency held on the 17th day of June, 2025, by the following vote, to wit:

AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

NAYS: None.

ABSTAIN: None.

ABSENT: None.

KEITH BLACKBURN, Chairperson

SHERRY FREISINGER, Secretary (SEAL)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE CITY OF CARLSBAD’S SHARE OF THE FISCAL YEAR 2025-26 OPERATING AND CAPITAL BUDGETS OF THE ENCINA WASTEWATER AUTHORITY

WHEREAS, the City of Carlsbad is a Member Agency to the Encina Joint Powers Agreement (the “Encina Agreement”) entered into on July 13, 1961, for the acquisition, construction, ownership, operation and maintenance of the Encina Joint Sewer System; and

WHEREAS, the Encina Agreement requires approval for the budget of the Encina Wastewater Authority, or EWA, by the Member Agencies following the recommendation of the Joint Advisory Committee, or JAC; and

WHEREAS, the City Council of the City of Carlsbad desires to approve the EWA’s budget and provide for the payment of the city’s share of the EWA’s expenses in accordance with the allocation provided in the Encina Agreement; and

WHEREAS, the Wastewater Fund is projected to have sufficient funds for the payments as they become due.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:

1. That the above recitations are true and correct.

2. That the City of Carlsbad’s estimated share of the FY 2025-26 Operating Budget of the EWA as approved by the JAC on April 23, 2025, in the amount of $6,304,466 for Wastewater Plant Operations and $2,075,864 for the Carlsbad Water Recycling Facility Operations, as described in Attachment A, is approved.

3. That the City of Carlsbad’s estimated share of the FY 2025-26 Capital Budget of the EWA as approved by the JAC on April 23, 2025, in the amount of $5,748,474 for Wastewater Plant Capital and $235,000 for Carlsbad Water Recycling Facility Capital, as described in Attachment A, is approved.

4. That the City Manager, or designee, is authorized to approve appropriations to the EWA estimated budgets listed above based on the City of Carlsbad’s actual share of the EWA budget.

5. That all outstanding operating encumbrances as of June 30, 2025, are continued into FY 2025-26 for such contracts and obligations.

6. That all Capital Improvement Program budget appropriations and outstanding encumbrances as of June 30, 2025, are continued into FY 2025-26 for such contracts and obligations.

7. That the City Manager, or designee, is authorized to make payments on behalf of the City of Carlsbad to the EWA in accordance with the budget as approved by the JAC pursuant to the Encina Agreement.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, the Community Development Commission, and the City Council as Successor Agency to the Carlsbad Redevelopment Agency held on the 17th day of June, 2025, by the following vote, to wit:

AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

NAYS: None.

ABSTAIN: None.

ABSENT: None.

KEITH BLACKBURN, Mayor

SHERRY FREISINGER, City Clerk (SEAL)

RESOLUTION NO. 2025-142

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, DETERMINING THAT THE FISCAL YEAR 2025-26 CAPITAL IMPROVEMENT PROGRAM IS CONSISTENT WITH THE GENERAL PLAN AND APPLICABLE CLIMATE ACTION PLAN MEASURES AND ACTIONS

WHEREAS, the City Council of the City of Carlsbad, California, has reviewed the Capital Improvement Program for FY 2025-26 and has held such public hearings as are necessary prior to adoption of the Capital Improvement Program; and

WHEREAS, on June 17, 2025, the City Council reviewed for consistency with the General Plan goals and policies all Capital projects receiving an allocation of funds for FY 2025-26 pursuant to Carlsbad Municipal Code Section 2.24.040(B); and

WHEREAS, the City Council also reviewed the FY 2025-26 Capital Improvement Program projects for consistency with applicable Climate Action Plan measures and actions; and

WHEREAS, upon hearing and considering all testimony and arguments, if any, of all persons desiring to be heard, the City Council considered all factors relating to the City Council determination.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:

1. That the above recitations are true and correct.

2. The proposed action is not a “project” as defined by CEQA Section 21065 and CEQA

Guidelines Section 15378(b)(4) and does not require environmental review under CEQA

Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.

3. That based on the evidence presented at the hearing, the City Council determines that the Capital Improvement Program for FY 2025-26 is consistent with the General Plan based on the following findings:

a. The projects are consistent with the goals and policies of the city’s General Plan in that the projects are required to ensure the provision of adequate public facilities and services concurrent with or prior to need.

b. The projects are consistent with applicable goals and policies of the Arts, History, Culture, and Education; Land Use and Community Design; Mobility; Public Safety; and Sustainability Elements, as described in Attachment A.

c. Specific projects are consistent with, and support Climate Action Plan greenhouse gas reduction measures and actions, if applicable, as described in Attachment A.

d. As required by the General Plan, the proposed improvements are consistent with the city’s Growth Management Plan in that the projects ensure that the necessary improvements are provided for facilities maintenance, park development, recycled water, sewer and storm drain projects, and circulation systems, in accordance with the performance standards contained in the city’s Growth Management regulations.

4. This action is final as of the date this resolution is adopted by the City Council. The Provisions of Chapter 1.16 of the Carlsbad Municipal Code, “Time Limits for Judicial Review” shall apply:

“NOTICE”

The time within which judicial review of this decision must be sought is governed by Code of Civil Procedure, Section 1094.6, which has been made applicable in the City of Carlsbad by Carlsbad Municipal Code Chapter 1.16. Any petition or other action seeking review must be filed in the appropriate court not later than the ninetieth day following the date on which this decision becomes final; however, if within ten days after the decision becomes final a request for the record is filed with a deposit in an amount sufficient to cover the estimated cost or preparation of such record, the time within which such petition may be filed in court is extended to not later than the thirtieth day following the date on which the record is either personally delivered or mailed to the party, or his attorney of record, if he has one. A written request for the preparation of the record of the proceedings shall be filed with the City Clerk, City of Carlsbad, 1200 Carlsbad Village Drive, Carlsbad, CA 92008.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, the Community Development Commission, and the City Council as Successor Agency to the Carlsbad Redevelopment Agency held on the 17th day of June, 2025, by the following vote, to wit:

AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

NAYS: None.

ABSTAIN: None.

ABSENT: None.

KEITH BLACKBURN, Mayor

SHERRY FREISINGER, City Clerk (SEAL)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, ADOPTING A LIST OF PROJECTS AND AUTHORIZING THE ALLOCATION OF ROAD MAINTENANCE AND REHABILITATION ACCOUNT FUNDS TO THE PAVEMENT MANAGEMENT AND CONCRETE REPLACEMENT PROGRAMS FOR FISCAL YEAR 2025-26

WHEREAS, in April 2017, the state Legislature enacted Senate Bill 1 (SB 1), referred to as the Road Repair and Accountability Act of 2017, to address the significant multi-modal transportation funding shortfalls statewide; and

WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the city residents are aware of projects proposed for funding as well as those projects that have been completed each fiscal year; and

WHEREAS, the city must adopt by resolution a list of projects proposed to receive fiscal year funding from the Road Maintenance and Rehabilitation Account created by SB 1, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and

WHEREAS, staff estimate the city will receive $3,017,991 in Road Maintenance and Rehabilitation Account funding during FY 2025-26; and

WHEREAS, a fund balance of $272,280 exists, which when added with the FY 2025-26 estimated revenue projection of $3,017,991 results in a total Road Maintenance and Rehabilitation Account funding of $3,290,271, which includes $272,280 of unallocated funding; and

WHEREAS, this will be the nineth year in which the city will receive Road Maintenance and Rehabilitation Account funding, which will enable the city to continue essential road maintenance and rehabilitation projects thereby increasing access and mobility options for the traveling public; and WHEREAS, the city has undergone a process to solicit public input into the community’s transportation priorities as part of the Capital Improvement Program approval process; and WHEREAS, the city utilizes a pavement management system to ensure that Road Maintenance and Rehabilitation Account revenues are being used in a prioritized and cost-effective manner; and

WHEREAS, the funding from the Road Maintenance and Rehabilitation Account will help the city maintain and rehabilitate its network of roads and provide concrete improvements and similar projects in the future; and

WHEREAS, the 2023 California Statewide Local Streets and Roads Needs Assessment found that the city’s streets and roads are in a good condition and this revenue will help the city increase the overall quality of its road system; and

WHEREAS, the Road Maintenance and Rehabilitation Account project list and overall investment in our local streets and roads infrastructure with a focus on basic maintenance and safety will have a significant benefit to the community.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:

1. That the above recitations are true and correct.

2. The proposed action is not a “project” as defined by CEQA Section 21065 and CEQA

Guidelines Section 15378(b)(4) and does not require environmental review under CEQA

Guidelines Section 15060(c)(3) as it is a government fiscal activity and does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. The activity or projects for which this budget is intended to fund may require preparation of an environmental document in accordance with CEQA and CEQA Guidelines.

3. That the Pavement Management Program, CIP Project No. 6001, as further described herein, will be funded in part with FY 2025-26 Road Maintenance and Rehabilitation

Account revenues:

a. Project Title: Pavement Resurfacing Project

b. Description: resurface and rehabilitate a selection of publicly maintained streets on an annual basis

c. Location: various residential streets throughout the city based on pavement condition, including the following collector and arterial streets:

i. El Camino Real between Levante Street and Calle Barcelona

ii. El Camino Real between Chestnut Avenue and Tamarack Avenue

iii. El Camino Real between Haymar Drive and Marron Road

iv. Palomar Airport Road between Paseo Del Norte and Melrose Drive

d. Estimated Project Schedule: July 2025 – June 2026

e. Estimated Useful Life: slurry seal has a useful life of approximately seven years, and asphalt concrete overlay has a useful life of approximately 20 years

4. That the Concrete Repair/Replacement Program, CIP Project No. 6013, as further described herein, will be funded in part with FY 2025-26 Road Maintenance and Rehabilitation Account revenues:

a. Project Title: Concrete Repair/Replacement Program

b.Description: repair and replace broken and uplifted concrete in the public right of way

c. Location: various residential locations throughout the city based on concrete condition, including locations along the following collector and arterial streets:

i. El Camino Real between Haymar Drive and Carlsbad Village Drive

ii. Palomar Airport Road between Paseo Del Norte and Melrose Drive

iii. Cadencia Street between La Costa Avenue and Paseo Capuchina

iv. Calle Barcelona at El Camino Real intersection

v. El Camino Real between Levante Street and Calle Barcelona

d. Estimated Project Schedule: July 2025 – June 2026

e. Estimated Useful Life: concrete improvements typically have a useful life of approximately 50 years

5. That funding to allocate Road Maintenance and Rehabilitation Account funding in the amount of $2,450,000 to the Pavement Management Program, CIP Project No. 6001, and $620,000 to the Concrete Replacement Program, CIP Project No. 6013 was incorporated into the in the FY 2025-26 CIP budget.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the City Council of the City of Carlsbad, the Board of Directors of the Carlsbad Municipal Water District, the Board of Directors of the Carlsbad Public Financing Authority, the Community Development Commission, and the City Council as Successor Agency to the Carlsbad Redevelopment Agency held on the 17th day of June, 2025, by the following vote, to wit:

AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

NAYS: None.

ABSTAIN: None.

ABSENT: None.

KEITH BLACKBURN, Mayor

FREISINGER, City Clerk (SEAL)

SHERRY