COSTA MESA CITY COUNCIL MEETS THURSDAY FOR A SPECIAL MEETING

Costa Mesa Council to Consider Senior Center Housing Project, $1 Million in New Fees, and Executive Raises

🏛️ The Costa Mesa City Council meets this Thursday, October 29, 2026. While the agenda may not be long, one item has piqued our interest.

📅 Date & Time: Tuesday, October 29, 2026, at 6:00 p.m.

🔒 Closed Session begins at 4:00 p.m.

📍 Location: City Council Chambers, 77 Fair Drive

📄 Agenda: Can be found here:

🔒CLOSED SESSION: Six items are scheduled for discussion:

• Real property negotiations involving the property located at 695 W. 19th Street, Costa Mesa, CA 92627 (Costa Mesa Senior Center) with Jamboree Housing Corporation. What is being negotiated now? The final parcel map and surplus land declaration are being approved below, so it looks like the deal is becoming pretty final. This warrants more information, but Closed Session is always top secret. See related items that appear on the Regular Session Agenda in the Consent Calendar and New Business Below.

  
  

• Anticipated litigation, one case. Who is threatening to sue the City? We’ll have to wait to see on this one.

  
  

🏛️ REGULAR SESSION: The meeting begins with a presentation about Safe Routes to School.

🎤PUBLIC COMMENTS: This is the time for YOU to comment for THREE FREE minutes on ANYTHING that is not on the agenda.

📌 IMPORTANT! WRITTEN PUBLIC COMMENTS AND VISUAL PRESENTATIONS MUST BE SUBMITTED BY NOON TO BE SCREENED AND PUBLISHED ON THE CITY'S WEBSITE.

🗂️CONSENT CALENDAR:  Most consent items are routine, but these warrant a closer look:

Item 2, Final Parcel Map for 695 West 19th Street, and Access, Parking and Drainage Easement Agreement. Staff is requesting approval of a final parcel map and related easement agreement to facilitate the development of a 70-unit affordable senior housing project at 695 West 19th Street. This allows the City to implement previously approved entitlements for the Jamboree Housing project by creating a separate development parcel and establishing easements to protect ongoing Senior Center and public access rights.

Later in the Agenda there is a item to declare the newly created parcel surplus land (see New Business Item 3 below).

In March 2025, the City Council approved the master plan, density bonus, and tentative parcel map for the Jamboree Housing project, a 70-unit affordable senior housing development. The final parcel map is needed to separate the proposed housing site from the existing Senior Center property.

Key components of the proposal include:

• Subdivision of the property: The City-owned 2.66-acre Senior Center site and parking lot would be divided into two parcels. Parcel 1 would contain the existing Senior Center, while Parcel 2 would be used for the affordable senior housing development and associated parking.

  
  

• Protection of City access and parking rights: Parcel 2 would be subject to easements benefiting Parcel 1 and the public, including access, parking, drainage, ingress, and egress rights. The easement agreement would be recorded immediately after the parcel map to ensure these rights take priority over any future liens or encumbrances.

  
  

• Additional map actions: The final parcel map would dedicate portions of 19th Street, Pomona Avenue, and Plumer Street for street and highway purposes and would abandon an existing bus-shelter dedication along 19th Street. Any future utility easements would require separate City Council approval.

  
  

📊Fiscal impact: While new development can generate additional property tax revenue, staff does not anticipate any increase because the project, as a 100% affordable housing development, may qualify for a full or partial property tax exemption.

Item 3, Resolution Amending Resolutions No. 2026-42 and 2026-43 Renaming Arts Specialist Classification Represented by Costa Mesa City Employees Association. Staff recommends renaming Costa Mesa’s Arts Specialist classification to Arts and Culture Supervisor, with no salary or fiscal impact.

Human Resources found that the role’s duties extend beyond specialist work. It oversees and promotes city arts programs and events, supports the Arts Commission, prepares reports and presentations, coordinates meeting materials, implements approved initiatives, and serves as liaison to departments, artists, and community partners.

The new title better reflects the position’s oversight responsibilities and is consistent with other department classification titles.

📑PUBLIC HEARINGS:  There are two items:

1.    Development Impact Fees Annual Report, and Resolution Approving Traffic Impact Fee Analysis and Continuing Traffic Impact Fee for New Development. The report recommends that the City Council accept the FY 2025–26 development impact fee report and continue Costa Mesa’s traffic impact fee at $231 per Average Daily Trip (ADT) for new development.

• Purpose and legal requirements: Development impact fees help fund public facilities needed because of new development. The City administers separate fee accounts for parks, drainage, traffic, fire systems, and cannabis-related traffic impacts. California law requires an annual public report on fee collections, interest, spending, and remaining balances, followed by City Council review.

  
  

• Traffic impact fee recommendations: The Traffic Impact Fee Ad Hoc Committee and staff recommend retaining the current $231 per ADT fee while a broader nexus study updates eligible projects and the fee structure for presentation in early 2027. The proposed resolution would also:

  
  

  • Allow up to 10% of traffic impact fee revenue for traffic-signal synchronization projects.

  
  

  • Apply a 5% automobile-trip reduction for projects reflecting the City’s Active Transportation Plan.

  
  

  • Allow an additional 5% ADT reduction for developments that provide substantial active-transportation improvements beyond normal requirements, such as a multipurpose trail, upgraded bicycle facilities, or enhanced pedestrian improvements.

📊Financial position: As of June 30, 2026, unaudited fee-fund balances were:

• Park Development Fees: $1,512,580

• Drainage Fees: $2,091,396

• Traffic Impact Fees: $2,768,598

• Fire System Development Fees: $378,835

• Cannabis Traffic Impact Fees: $683,078

The report also identifies $288,172 in unallocated traffic and cannabis traffic impact fees that may be assigned to eligible projects. Staff states that the traffic fee fund has enough balance to support projects over the next two to three years.

2.    User Fee Study and Consolidated Master Fee Schedule. Staff recommends the City Council approve the update of the City’s consolidated master fee schedule to better align fees with the reasonable cost of providing services, while staying within California’s legal limits so they do not become an unauthorized tax.

Staff’s Recommendation: Staff proposes the following changes (note these do not exactly align with the proposed changes in the User Fee Study):

• 61% of fees: proposed to increase, primarily for regulatory services and recreation services that have changed little since 2019. This includes 172 fees across building, planning, engineering, fire, police, animal regulation, and recreation/facility rentals.

  
  

• 15% of fees: proposed to remain unchanged, totaling 42 fees. These include certain state-set fees and fees not being adjusted through this study.

  
  

• 12% of fees: would vary by project criteria, such as project size; 34 fees may increase, decrease, or remain unchanged depending on the circumstances.

  
  

• 5% of fees: proposed to decrease, totaling 14 fees, including some planning, cannabis permit, and police fees.

  
  

• 22 new fees: proposed for services or costs not currently recovered, including development technology, General Plan updates, pre-construction meetings, temporary certificates of occupancy, unpermitted work review, failed code-enforcement re-inspections, and dangerous/vicious-animal hearing processes.

Scope and exclusions: The study covers fees for services such as construction permits, planning reviews, engineering reviews, fire inspections, police-related services, and recreation reservations. It does not update assessments, development impact fees, fines and penalties, franchise fees, taxes, or utility rates because they follow different legal or approval requirements.

User Fee Study: A User Fee Study was prepared by ClearSource Financial Consulting. The changes to fees proposed in that study are:

• 172 fees (59.7%) would increase, mainly regulatory and recreation fees that have changed little since 2019 and no longer match service costs.

  
  

• 25 new fees (8.7%) are proposed, including development technology fees, general plan-related fees, applicant-requested pre-construction meetings, temporary certificates of occupancy, code-enforcement reinspection, after-hours fire inspections, massage permits, animal permits, and a recreation tournament fee.

  
  

• 32 fees (11.1%) would vary by project criteria, such as project size, so they may increase, decrease, or remain unchanged depending on the application.

  
  

• 46 fees (16.0%) would remain unchanged, largely because they are state-set or outside the study’s adjustment scope.

  
  

• 13 fees (4.5%) would decrease after recalculating costs under current service practices.

  
  

📊Financial effect: The changes are projected to generate $1.075 million in additional annual revenue, $865,000 from citywide fees and $210,000 from recreation fee changes. This is intended to offset the cost of existing fee-supported services, not finance service expansions. Higher recoverable revenue also reduces the extent to which General Fund resources subsidize individual applications, permits, inspections, and facility uses.

Some policy-based subsidies remain. For example, the proposed 5% technology enhancement fee would recover about 96% of its estimated annual cost, while the proposed 3% general plan maintenance fee would recover about 36%, leaving a General Fund subsidy for the remainder.

How fees were calculated: The study estimates each service cost using the responsible division’s fully burdened hourly labor rate multiplied by the typical staff time required.

Fully burdened rates include salaries, benefits, operating costs, department administration, and citywide overhead. The analysis uses adopted budgets, salary and benefit data, historical fee volumes and revenues, current fees, and staff interviews.

Fees may be set below calculated cost when the City chooses a lower recovery target; the General Fund then covers the gap.

Fees cannot exceed the estimated reasonable cost of the specific service, activity, or regulatory action, and the charge must bear a fair relationship to the payer’s benefit received or burden created. This distinction is essential to ensure the charges are fees rather than taxes.

Implementation and ongoing management: If adopted, the City should update all public-facing schedules, billing systems, and staff procedures; train employees who collect fees; and ensure correct application of fixed and time-and-material charges.

The study also calls for tracking staff time and project activity, monitoring permit volumes and applicant feedback, applying annual inflationary adjustments, and conducting periodic comprehensive fee studies.

Combining fees into one master schedule is intended to make City charges more transparent and easier for the public to find. Most approved changes would take effect immediately; new fees would take effect 60 days after approval.

Review: The Parks and Community Services Commission reviewed and approved revised recreation-fee recommendations after requesting that staff reassess the size of proposed increases.

The Finance and Pension Advisory Committee supported cost recovery in principle while urging process simplification, technology improvements, and attention to impacts on residents, businesses, and development.

Comment: The User Fee Study shows that roughly $500,000 per year in costs associated with recreation and facility rentals at Fairview Park are being subsidized by taxpayers, with no meaningful cost recovery.

The City collects an annual fly field permit fee from the pilots, which is going to increase slightly. But what are the specific activities driving the $500,000 in expenses at Fairview Park? It is difficult to believe they stem primarily from gazebo rentals. If park ranger services, enforcement, administration, or other costs related to the Harbor Soaring Society are included in this figure, why is there no corresponding fee to recover those expenses?

Staff argues throughout this study that users should bear the reasonable cost of the services they receive, yet this appears to be a significant exception. If the City plans to continue subsidizing these activities, it should explain why and disclose the ongoing burden on the General Fund. Responsible government requires transparency and consistent application of cost-recovery principles.

All the while, the Costa Mesa Tennis Center is operating at a 169% cost recovery because the fees there have increased substantially during the past year.

Cost Recovery Analysis showing 0% Cost Recovery for Fairview Park

🕰️OLD BUSINESS: None.

🆕NEW BUSINESS: There are three items:

1.    Facilities Master Plan for City-Owned Facilities Presentation. Staff will present the Facilities Master Plan (FMP) to the City Council. The FMP finds that the City needs sustained, proactive investment to maintain aging city facilities, address space and service gaps, and plan major capital upgrades.

Scope of Work: The City engaged Gensler in 2025 to assess facility conditions, current and future space needs, and funding strategies. The review covered key facilities including:

• City Hall

• Fire stations

• Police sites

• Community and recreation centers

• Libraries

• Corporation Yard

• Communications Building

The work combined Staff interviews, building inspections, space-use analysis, and cost estimates over a 20-year planning horizon.

Core findings:

• Aging assets: About 54% of City building space is more than 50 years old, and about 80% is in buildings older than 30 years.

  
  

• Reactive maintenance risk: Maintenance is often addressed when systems are near failure; the plan recommends annual investment to extend building life and avoid higher deferred costs.

  
  

• City Hall needs: Roughly 75% of City Hall systems are “Aged but Functional,” and maintaining its current condition is estimated to require an average of $850,000 annually over the next decade.

  
  

• Operational gaps: Several facilities have space constraints, inconsistent departmental space standards, limited support for modern work practices, and insufficient emergency-continuity capability.

  
  

• Service and sustainability opportunities: The plan identifies remaining service gaps in underserved areas and prioritizes solar, EV infrastructure, and energy-efficient systems.

Facility Age

Investment strategy: The plan estimates approximately $3.45 million per year for deferred maintenance and lifecycle replacement reserves over the next 20 years, with costs expected to rise with inflation.

Major projects beyond routine maintenance, including fire station modernization, the Communications Building, and the Westside Substation, are estimated at $60 million.

Fire Stations 3 and 5 may be modernized without major reconstruction; Fire Station 4 requires substantial living-quarters renovation.

Funding would be considered through the Capital Improvement Program, including the General Fund’s 5% Capital Asset Needs allocation and possible county, state, and federal grants.

Overall implication: The report is intended to help the City prioritize maintenance, renovations, replacements, and service improvements so facilities can remain safe, functional, accessible, resilient, and aligned with long-term Council goals.

2.    Adoption of Side Letter Agreements for the Costa Mesa Firefighters Association and Costa Mesa Fire Management Association, and Amendment of the Executive Salary Resolution. Staff is requesting approval of two fire department side letters and amendments to the City's executive salary resolution. According to staff, these changes are necessary to ensure compliance with CalPERS regulations and maintain established salary relationships among executive positions.

Fire Department Side Letters: The proposed side letters with the Costa Mesa Firefighters Association (CMFA) and Costa Mesa Fire Management Association (CMFMA) would formalize existing "move-up" pay practices.

Key provisions include:

• Employees temporarily assigned to a higher classification would continue to receive 5% above their base salary for all hours worked in that assignment.

  
  

• The revised language ensures this compensation qualifies as Temporary Upgrade Pay for CalPERS "Classic" members and remains reportable for retirement benefit calculations.

  
  

• Staff states the changes simply clarify existing practice and do not provide additional compensation or create any fiscal impact.

  
  

• Although the current labor agreements remain in effect through June 30, 2027, staff recommends approving the revised language now to satisfy current CalPERS requirements.

Executive Compensation Adjustments. Staff is also recommending targeted salary adjustments for the Assistant City Manager and City Manager.

• The Assistant City Manager salary range would increase by 2% to address salary compression issues that arose after salary increases were approved for the Police Chief and Fire Chief in July 2025. Those adjustments reduced the historical pay gap from 2.18% to just 0.18%.

  
  

• The City Manager's employment agreement requires compensation to remain at least 10% higher than the highest-paid executive reporting below that position. Currently, the gap is approximately 7.22%.

  
  

• To restore the required differential, staff recommends increasing the City Manager's salary by 4.64%, bringing total annual compensation to $334,860.

  
  

• The resolution also incorporates additional CalPERS-related language updates.

📊Fiscal Impact and Requested Action: The proposed salary adjustments are expected to cost:

• $6,955 annually for the Assistant City Manager adjustment.

  
  

• $16,561 annually for the City Manager adjustment.

Staff indicates both costs can be absorbed within the existing General Fund budget.

3.    Surplus Land Act Declaration for Portion of Senior Center Parking Lot at 695 W. 19th Street. Staff is requesting that the City Council declare a newly created 1.5-acre portion of the Senior Center parking lot at 695 W. 19th Street as exempt surplus land under the Surplus Land Act. This action is necessary to move forward with the planned 70-unit affordable senior housing and permanent supportive housing project approved for the site.

Key details:

• Requested action: The City Council is being asked to determine that the action is exempt from CEQA and adopt a resolution classifying the parcel as exempt surplus land.

  
  

• Proposed development: The project, to be developed by Jamboree Housing Corporation, will be located on the northeast portion of the Senior Center parking lot, across from The Tower on 19th. The development will include 70 units of affordable senior and supportive housing.

  
  

• Basis for exemption: The Surplus Land Act allows an exemption because all units will be deed-restricted as affordable housing, with at least 75% reserved for lower-income households for a minimum of 55 years.

  
  

• Ground lease process: Approval of the surplus land declaration is required before the City can execute the proposed 99-year ground lease. The resolution and affordability agreement must then be submitted to the California Department of Housing and Community Development for a 30-day review.

  
  

• City financial assistance: The project will receive a $1-per-year ground lease, up to $700,000 in deferred fees, a $1.15 million HOME loan, and a $2.1 million Housing Trust Fund loan. Staff notes these funding sources are restricted for affordable housing purposes and do not draw from the General Fund.

  
  

• Project status: Financing, including Low-Income Housing Tax Credits, has been secured, with construction expected to close in December. A final parcel map and easement agreement will preserve access for Senior Center operations, including parking, circulation, pedestrian access, and drainage facilities.

Comment: While the City is emphasizing that no General Fund dollars are being used, the public should recognize that this project still relies on significant public assistance, including a 99-year lease of City-owned land for $1 per year, deferred fees, and more than $3.2 million in housing-related loans. The key policy question is whether the long-term public benefit of 70 affordable senior housing units justifies dedicating a portion of an existing public parking lot and providing these subsidies. The Council should also ensure that adequate parking, access, and functionality remain for Senior Center users, particularly as demand for senior services continues to grow.

🎤PUBLIC PARTICIPATION: Do not forget! You get three FREE minutes of public comment on anything not on the Agenda at the beginning of the meeting, and three FREE minutes on any of the agendized items.

📌 IMPORTANT! WRITTEN PUBLIC COMMENTS AND VISUAL PRESENTATIONS MUST BE SUBMITTED BY NOON TO BE REVIEWED AND PUBLISHED ON THE CITY'S WEBSITE.