Agenda packet — Cotati City Council, September 9, 2025

AGENDA

JOINT MEETING OF THE COTATI CITY COUNCIL AND THE SUCCESSOR AGENCY TO THE

FORMER COTATI COMMUNITY REDEVELOPMENT AGENCY
City Council Chamber, City Hall 201 W. Sierra Avenue
Tuesday, September 09, 2025
6:00 PM REGULAR MEETING
The Cotati City Council welcomes you to its meetings that are generally scheduled for the 2nd and 4th Tuesday of every month. Your interest and participation are encouraged and appreciated.

City Council meeting agendas, minutes and recordings are posted on the City’s Meeting Portal at www.cotaticity.gov. For questions about the agenda or to receive the City Council agenda by e-mail, contact the City Clerk at [email protected] or 707-665-3622.

Cotati City Council Meetings will be conducted in person in the Council Chamber. To guarantee your ability to participate, you must attend the meeting in person. As a courtesy to the public, the City allows citizens the opportunity to view and offer public comments virtually through Zoom Online video conferencing platform. Technical difficulties may occur that make the Zoom platform unavailable. If Zoom is unavailable, the meeting will continue. Participants considering using Zoom should consider attending in person, if they desire to ensure their ability to view the meeting and offer public comments.

Subject to the above disclaimer, Zoom Online video conferencing is available to watch or listen in the following ways:

1. Using the following online livestream meeting portal link: https://www.youtube.com/@cityofcotati7280/streams

2. Cable T.V. Broadcast, local channel 28
Members of the public can participate in the meeting online by clicking the link below:
https://us02web.zoom.us/j/82197399380?pwd=mNtL66maL8bYwr4eNrzxsddXjeKuI4.1 If you do not have the ability to join online, but would like to participate in the meeting, you can call into the meeting using your telephone, by dialing one of the following numbers and entering the meeting credentials:

Webinar ID: 821 9739 9380 Passcode: 939274
+1 (669) 900-6833 or +1 (346) 248-7799 or +1 (253) 215-8782 or +1 (301) 715-8592 or +1 (312) 626-6799 or +1 (929) 436-2866 Attendees may join the meeting any time after 5:45pm. Attendees will be muted until they are called upon for Public Comment. To make a public comment, use the “raise hand” icon on your smart device or desktop computer, or dial *9 if you are using just your telephone. Please listen carefully for the Mayor or City Clerk to address you by name (or phone number) and for the audible Zoom notification that you have been unmuted. Once you begin your public comment, your three minutes will begin.

If you would prefer to submit your public comment in writing, please email your comments to [email protected]. If you are commenting on a specific agenda item or items, please state the agenda item number(s) in the subject line of the email. All comments received via email will be provided to the City Council in writing and included as part of the record of the meeting. They will not be read aloud into the record at the meeting.

Notice is hereby given that Council may discuss and/or take action on any or all of the items listed on this agenda, in accordance with the City Council Rules of Conduct.

Any writings or documents provided to a majority of the Cotati City Council regarding any item on this agenda will be made available for inspection in the online Meeting Portal at www.cotaticity.gov and in the City Manager’s office located at 201 West Sierra Avenue, Cotati, California, during the City’s posted business hours.

Accommodations: Upon request, this agenda will be made available in appropriate formats to persons with disabilities as required by Section Cotati City Council Agenda September 09, 2025
202 of the Americans with Disabilities Act of 1990. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should contact the City Clerk at (707) 665-3622 at least 48 hours in advance of the meeting.

Rules of Decorum: To avoid distraction, the following meeting etiquette shall be enforced. • Silence electronic devices, including cell phones.
• Audience members are advised to keep conversations to a minimum or conduct them outside the building. • Members of the public are prohibited from speaking, yelling, or otherwise making loud noises from the audience that disrupt the orderly proceeding of the meeting.
• Photographs or video recordings using tri-pods or other means that would be distracting are to be taken only from the designated media area. • The Presiding Officer shall request that the audience withhold expressions of support or opposition for speakers in the interest of time and to encourage the full expression of differing views.

Public Comment: Public comment on any one agenda item is limited to no more than three (3) minutes per person, in accordance with the City Council Rules of Conduct.

Waiver Warning: If you challenge decisions/direction of the City Council of the City of Cotati in court, you may be limited to raising only those issues you or someone else raised at public hearing(s) described in this agenda, or in written correspondence delivered to the City of Cotati at, or prior to, the public hearing(s).

Announcements:

A. Meeting Orientation for New Attendees/Viewers. In conformance with the Brown Act and the adopted City Council Rules, if the City Council is considering an item in which action will be taken, citizens will be invited to provide comments relevant to the item being discussed.

The meeting agenda also includes a Citizen Business item, which is the designated place on the agenda where citizens have the right to comment on any matter within the City’s subject matter jurisdiction. However, Citizen Business items do not generally receive a response because the Brown Act prohibits the City Council from taking action or considering any item that is not on this agenda, so as to ensure that other members of the community who wish to provide comment are notified in advance through a properly noticed meeting agenda. Nonetheless, in accordance with the Brown Act, the Council may briefly respond, may ask a question for clarification, or may direct an item be placed on a future agenda.

B. Measure S supports police services, a variety of recreation programs for all ages, and the maintenance of our streets, parks, and public buildings. See details on the web at cotaticity.gov.

C. Citizens interested in receiving City of Cotati community alerts via text or email are encouraged to enroll with CivicReady, by signing up on the City’s website, www.cotaticity.gov, under the “How do I” link at the top of the homepage.

D. Have you noticed a street light out, pothole, or issues in a City Park? We want to keep Cotati beautiful and running smoothly, so please let us know what needs to be fixed, by going to the City website under “How do I” and “Report a Service Request.” E. Like always, we love to hear from you, so please feel free to contact the City at 707-792-4600 or [email protected]. If you have a nonemergency issue after normal business hours, you can contact us at 707-792-4611 and of course if you have an emergency, please contact 9-1-1.

Continue to look for updates on the City's website and social media channels available on Facebook, Instagram, and CivicReady.

City Council meetings are conducted according to City Council Policy 2025-03: City Council Rules of Conduct. This policy available for inspection in the online Meeting Portal at www.cotaticity.gov and in the City Manager’s office located at 201 West Sierra Avenue, Cotati, California, during the City’s posted business hours.

Those wishing to address the Council are asked to complete a speaker card and give it to the City Clerk. When you are called, step to the podium and state your name and address for the record. Persons wishing to address the Council are not required to identify themselves or complete a speaker card; (Gov’t. Code § 54953.3); however, this information assists the Mayor by ensuring that all persons wishing to address the Council are recognized and it assists the City Clerk in preparing the City Council meeting minutes.

1. CALL TO ORDER - ROLL CALL

2. APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL

RESOLUTIONS AND ORDINANCES INTRODUCED AND/OR ADOPTED UNDER THIS

AGENDA (ACTION)
A. COTATI CITY COUNCIL – REGULAR MEETING – AUG 26, 2025

3. PROCLAMATIONS
A. LATINO HERITAGE MONTH
Cotati City Council Agenda September 09, 2025
B. CREEK WEEK

4. AGENDA REVIEW (ACTION)

5. CITIZEN BUSINESS AND PUBLIC COMMENT FOR CONSENT CALENDAR ITEMS Any member of the public wishing to speak to the Council on any item(s) listed on the Consent Calendar or any matter(s) not listed on the agenda that are within the subject matter jurisdiction of the Council may do so at this time. Pursuant to the Brown Act, the Council is not allowed to consider issues or take action on any item not listed on the agenda. Pursuant to City Council Policy 2023-01, comments of any member of the public are normally restricted to a total of three (3) minutes in length per person for matters not on the agenda and a total of three (3) minutes per person in length for any and all items on the Consent Calendar. The Mayor may extend the time limit for a reasonable time where a disability accommodation has been requested. To facilitate public comment, the timer indicator lights will display yellow when there are thirty seconds remaining, and red when time has expired.

6. CONSENT CALENDAR (ACTION)
A. CONSIDERATION OF A RESOLUTION APPROVING AFFORDABILITY AGREEMENTS FOR THE COTATI VILLAGE 1 AND COTATI VILLAGE 2

DEVELOPMENT PROJECTS
The Community Development Department recommends that the City Council adopt a resolution approving affordability agreements for the Cotati Village 1 and Cotati Village 2 development projects.

B. CONSIDERATION TO ADOPT RESOLUTION TO ACCEPT THE FISCAL YEAR 2024-2025 ANNUAL REPORT OF DEVELOPMENT IMPACT FEE ACTIVITY (AB1600)
It is recommended that the City Council adopt a resolution accepting the fiscal year 2024-25 annual reports of development impact fee activity.

C. CONSIDERATION TO ADOPT RESOLUTION ACCEPTING THE 2025 STREET

IMPROVEMENT PROJECT
It is recommended the City Council of the City of Cotati adopt a resolution accepting the 2025 Street Improvement Project, authorizing the City Clerk to file the Notice of Completion with the County Recorder, and after 35 days with no protests, release the construction contract retention.

D. SECOND READING OF AN ORDINANCE CONSOLIDATING INFLATIONARY

INDICES FOR DEVELOPMENT IMPACT FEES (DIF), ADJUSTING TIMING OF DIF

PAYMENTS ON RESIDENTIAL PROJECTS, AND MODIFYING PARK IN LIEU

LANGUAGE TO BE CONSISTENT WITH THE ADOPTED DIF NEXUS STUDY It is recommended that the City Council conduct a second reading and adopt the attached ordinance consolidating inflationary indices for Development Impact Fees (DIF), adjusting timing of DIF payments on residential projects, and modifying the Park in Lieu DIF language to be consistent with the adopted DIF nexus study.

7. DIRECTION ON FUTURE AGENDA ITEMS

8. REGULAR AGENDA (ACTION)
A. FINALIZE DESIGN OPTION FOR THE LAGUNA DE SANTA ROSA CLASS 1

PATHWAY MAINTENANCE PROJECT
It is recommended the City of Cotati City Council provide direction to staff on the desired pathway surface for the Laguna de Santa Rosa Class 1 Pathway between Gravenstein Way and the pedestrian bridge adjacent to Matteri Circle.

Cotati City Council Agenda September 09, 2025

9. LAND ACKNOWLEDGEMENT & PLEDGE OF ALLEGIANCE
The City of Cotati recognizes that we’re on the ancestral lands of the Coastal Miwok, who are the original caretakers of this area. We respectfully acknowledge the Indigenous peoples who have been stewarding and maintaining a relationship on this land as knowledge keepers for millennia. This acknowledgment does not take the place of authentic relationships with Indigenous communities but serves as a gesture of respect to the land we are on.

10. CITY MANAGER'S REPORT & COUNCILMEMBER REPORTS

11. INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED

12. ADJOURNMENT
Certification of Posting of the Notice: I declare under penalty of perjury that I am employed by the City of Cotati and that I posted this notice on the City’s website, bulletin boards of City Hall, Veterans’ Memorial Building and the SMART Train Depot, on or before September 5, 2025. /s/ Kevin Patterson, City Clerk

MINUTES

JOINT MEETING OF THE COTATI CITY COUNCIL AND THE SUCCESSOR AGENCY TO THE

FORMER COTATI COMMUNITY REDEVELOPMENT AGENCY
City Council Chamber, City Hall 201 W. Sierra Avenue
Tuesday, August 26, 2025
6:00 PM REGULAR MEETING

1. CALL TO ORDER & ROLL CALL
Mayor Ford called the meeting to order at 6:00pm.

2. APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL

RESOLUTIONS AND ORDINANCES INTRODUCED AND/OR ADOPTED UNDER THIS

AGENDA (ACTION)
A. COTATI CITY COUNCIL – REGULAR MEETING – AUG 12, 2025 No public comment.

RESULT: Approved [5-0]
MOVER: Susan Harvey, Councilmember
SECONDER: Laura Sparks, Councilmember
AYES: Ford, Lemus, Harvey, Sparks, Savage
NAYS: None

3. PROCLAMATIONS
A. WOMEN'S EQUALITY DAY PROCLAMATION
Mayor Ford read the proclamation. Proclamation was accepted by Melanie Jones-Carter of the Sonoma County Commission on the Status of Women.

4. AGENDA REVIEW (ACTION)
No action. After the meeting was interrupted from the audience, the Mayor opened the item for public comment.

Public Comment:

George Barich of Cotati
Laurie Alderman of Cotati

5. CITIZEN BUSINESS AND PUBLIC COMMENT FOR CONSENT CALENDAR ITEMS Any member of the public wishing to speak to the Council on any item(s) listed on the Consent Calendar or any matter(s) not listed on the agenda that are within the subject matter jurisdiction of the Council may do so at this time. Pursuant to the Brown Act, the Council is not allowed to consider issues or take action on any item not listed on the agenda. Pursuant to City Council Policy 2025-03, 5 of 105
Cotati City Council Minutes August 26, 2025
comments of any member of the public are normally restricted to a total of three (3) minutes in length per person for matters not on the agenda and a total of three (3) minutes per person in length for any and all items on the Consent Calendar. The Mayor may extend the time limit for a reasonable time where a disability accommodation has been requested. To facilitate public comment, the timer indicator lights will display yellow when there are thirty seconds remaining, and red when time has expired.

Public Comment:

Laurie Alderman of Cotati
Michael Ceremello
George Barich of Cotati

6. CONSENT CALENDAR (ACTION)
A. APPROVAL OF AN AMENDMENT TO THE SCHEMATIC DESIGN CONTRACT FOR

THE VERONDA FALLETTI RANCH BARNS
RESULT: Approve [5 TO 0]
MOVER: Susan Harvey, Councilmember
SECONDER: Sylvia Lemus, Vice Mayor
AYES: Ford, Lemus, Harvey, Sparks, Savage
NAYS: None

7. DIRECTION OF FUTURE AGENDA ITEMS
Councilmember Savage requested a future proclamation for Trans Remembrance Month in November.

Mayor Ford requested a future agenda item on Polluters Pay Climate Superfund legislation (SB 684 & AB 1243)

8. REGULAR AGENDA (ACTION)
A. 120 E. COTATI AVENUE AFFORDABLE HOUSING PROJECT DESIGN DISCUSSION Before the presentation of this item, Mayor Ben Ford announced that he would recuse himself because he lives near the project in question.

Presentation by Senior Planner JP Harries and Robin Zimmler of Freebird Development Company.

Councilmembers comment.

Public Comment:

Laurie Alderman of Cotati
Chris Palomo of Carpenters Local Union 751
Larry Hall of Carpenters Local Union 751
Council provided the following feedback to Staff and the Project Applicants:
-Make the exit from the project onto E. Cotati Ave be right-turn only -Investigate ways to widen the proposed bike lane 6 of 105 Cotati City Council Minutes August 26, 2025
B. CONSIDER A FIRE IMPACT FEE AND DEVELOPMENT COORDINATION

AGREEMENT WITH THE RANCHO ADOBE FIRE DISTRICT
Presentation by City Manager Damien O’Bid and Chief Jeff Velliquette of the Rancho Adobe Fire District.

Councilmembers comment.

No public comment.

RESULT: Adopt [5 TO 0]
MOVER: Susan Harvey, Councilmember
SECONDER: Laura Sparks, Councilmember
AYES: Ford, Lemus, Harvey, Sparks, Savage
NAYS: None
C. APPROVAL OF RESOLUTIONS TO ELIMINATE DEVELOPMENT IMPACT FEES

FOR DEED RESTRICTED AFFORDABLE UNITS IN INCLUSIONARY

MULTIFAMILY DEVELOPMENTS, HIGH-QUALITY LODGING PROJECTS AND

ASSOCIATED DEVELOPMENT IMPACT FEE POLICIES
Presentation by City Manager Damien O’Bid.

Council elected to discuss this item in three sections, one for each of the Resolutions being considered. Public comment was opened for each section.

Affordable/Multi-Family Inclusionary Projects:

Public Comment:

Laurie Alderman of Cotati
Omar Lopez of Generation Housing
Council directed staff to modify the amended resolution to replace “15%” under Section 2 of the “be it resolved” section to “25%,” to encourage additional affordable housing production.

RESULT: Adopted [5-0]
MOVER: Susan Harvey, Councilmember
SECONDER: Sylvia Lemus, Vice Mayor
AYES: Ford, Lemus, Harvey, Sparks, Savage
NAYS: None
Lodging
Public Comment:

Laurie Alderman of Cotati
RESULT: Adopted [5-0]
MOVER: Susan Harvey, Councilmember
SECONDER: Sylvia Lemus, Vice Mayor
AYES: Ford, Lemus, Harvey, Sparks, Savage
NAYS: None 7 of 105
Cotati City Council Minutes August 26, 2025
General Development Impact Fee Policies
No public comment.

Council directed staff to modify the square footage of an addition to a home that would trigger development impact fees from 400 square feet to 500 square feet, in order to be consistent with Cotati-Rohnert Park Unified School District threshold for development impact fees.

RESULT: Adopted [5-0]
MOVER: Sylvia Lemus, Vice Mayor
SECONDER: Laura Sparks, Councilmember
AYES: Ford, Lemus, Harvey, Sparks, Savage
NAYS: None
D. QUARTERLY FINANCIAL UPDATE - UNAUDITED FISCAL YEAR ENDING JUNE 30, 2025
RESULT: Approve [5 TO 0]
MOVER: Susan Harvey, Councilmember
SECONDER: Laura Sparks, Councilmember
AYES: Ford, Lemus, Harvey, Sparks, Savage
NAYS: None
Presentation by Director of Administrative Services Angela Courter.

Councilmembers comment.

No public comment.

10. CITY MANAGER'S REPORT & COUNCILMEMBER REPORTS
Report by City Manager Damien O’Bid.

Councilmembers report out on local and regional events and meetings.

11. INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED

12. ADJOURNMENT
Mayor Ford adjourned the meeting at 9:52pm.
8 of 105
Cotati City Council Minutes August 26, 2025
/s/ Kevin Patterson, Deputy City Clerk
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PROCLAMATION

OF THE CITY COUNCIL OF THE CITY OF COTATI
PROCLAMING SEPTEMBER 15-OCTOBER 15, 2025 AS LATINO HERITAGE MONTH
WHEREAS, each year, the federal, state, and many local governments observe Hispanic Heritage Month from September 15 to October 15 by recognizing and celebrating the histories, cultures, and contributions of American citizens whose ancestors came from Spain, Mexico, the Caribbean and Central and South America; and
WHEREAS, September 15th is significant as a starting date for Latino Heritage month because it is the anniversary of independence for the Latin American countries of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. In addition, Mexico and Chile celebrate their independence on September 16th and September 18th respectively, and Dia de La Raza, which is October 12th, falls within this 30-day period; and
WHEREAS, the observation started in 1968 as Latino Heritage Week under President Lyndon Johnson and was expanded by President Ronald Reagan in 1988 to cover a 30- day period starting on September 15 and ending on October 15. Each successive President has called upon the people of our country to observe this month with appropriate respect, ceremonies, activities; and
WHEREAS, Hispanics/Latine have made immeasurable contributions to our culture and economy and have been integral to the prosperity and enrichment of Cotati, Sonoma County and the United States; and
WHEREAS, in the City of Cotati, Hispanic/Latine community members, business owners, residents, and students continue to foster the culture and tradition as a whole while also advocating and ensuring a voice on behalf of the Hispanic/Latine community, with recent focus on immigration, education, health, wellness, financial stability, economic and civic engagement, and social justice; and
WHEREAS, Hispanics/Latine continue to enrich our nation’s character and contribute to our common future; and
WHEREAS, Hispanic Heritage Month also allows us to honor and celebrate the key leadership roles and accomplishments of Hispanics/Latine in our community and our shared values.
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NOW, THEREFORE, BE IT FURTHER PROCLAIMED on this day of September 9, 2025, by the City Council of the City of Cotati that September 15 - October 15, 2025 is Hispanic Heritage Month and the City Council encourages all citizens to recognize their significant and continuing contributions to our shared culture and continuing prosperity.

Approved:_____________________________
Mayor
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PROCLAMATION

OF THE CITY COUNCIL OF THE CITY OF COTATI
PROCLAIMING THE WEEK OF SEPTEMBER 15 - 21, 2025 AS "POLLUTION PREVENTION WEEK” AND SEPTEMBER 22 - 28 AS "CREEK WEEK" IN THE

RUSSIAN RIVER WATERSHED
WHEREAS, throughout the United States the week starting on the third Monday of September is recognized as National Pollution Prevention Week; and WHEREAS, throughout much of California, including the Russian River watershed, cities, counties and other stewardship organizations are recognizing the fourth week of September as Creek Week; and
WHEREAS, our pollution prevention practices are intrinsically linked to the health of our watershed lands and waterways; and
WHEREAS, the Russian River Watershed Association supports programs to reduce pollution, increase the environmental quality of our watershed, and provide our communities with the knowledge to be effective stewards of the Russian River watershed lands and waterways; and
WHEREAS, the nearly 1,500 square miles of lands, 150 creeks, and approximately 360,000 residents of the Russian River watershed are connected and mutually support each other; and
WHEREAS, the Russian River, along with its tributaries and associated features are important resources to the people of Sonoma and Mendocino Counties; and WHEREAS, pollution in the form of trash and debris, chemicals from industry and everyday living, and sediment from construction and many land uses and activities all have the potential to degrade the quality of life and the quality of resources within the Russian River watershed; and
WHEREAS, the Russian River Watershed Association strives to protect our lands and waterways through ongoing pollution prevention outreach which aims to raise awareness of the harmful effects of pollutants to our natural systems; and WHEREAS, during Pollution Prevention Week and Creek Week, creek, river and ocean clean-up campaigns will take place throughout Sonoma and Mendocino Counties, including our 12 of 105
annual creek cleanup and first invasive species removal events in the Laguna de Santa Rosa on September 20, 2025.

NOW, THEREFORE, BE IT FURTHER PROCLAIMED on this day of September 9, 2025, by the City Council of the City of Cotati that September 15-21, 2025, is Pollution Prevention Week and September 22-28, 2025 is Creek Week in the Russian River watershed, and asks all members of our community to support efforts to protect and enrich our watershed health by participating in the many Pollution Prevention Week/Creek Week activities, including the City of Cotati creek clean up and invasive species removal on September 20, 2025 and to take active steps to reduce pollution and care for our environment throughout the year.

Approved:_____________________________
Mayor
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Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: CONSIDERATION OF A RESOLUTION APPROVING

AFFORDABILITY AGREEMENTS FOR THE COTATI
VILLAGE 1 AND COTATI VILLAGE 2 DEVELOPMENT

PROJECTS
Date: September 9, 2025
Written by: Autumn Buss, Associate Planner
Recommendation
The Community Development Department recommends that the City Council adopt a resolution approving affordability agreements for the Cotati Village 1 and Cotati Village 2 development projects.

Background
In February 2024, the City Council approved Preliminary Design Review and a Tree Removal Permit for the Cotati Village 1 project, a 177-unit housing development with 4,752 square feet of commercial space proposed for the property located at the northeast corner of Gravenstein Highway and Alder Avenue.

In August 2024, the City Council approved Preliminary Design Review and a Tree Removal Permit for the Cotati Village 2 project, a 126-unit housing development with 2,200 square feet of commercial space proposed for the property located at the northwest corner of Gravenstein Highway and Alder Avenue.

The Cotati Village 1 and 2 projects both utilize the State Density Bonus law, which requires local jurisdictions to grant an increase in density to qualifying residential projects in exchange for provision of a certain number of affordable, income-restricted units within the project that are maintained as such for a minimum term of 55 years. Chapter 17.31 (Affordable Housing Requirements) of the Cotati Municipal Code sets forth the requirements for provision of affordable units in Cotati. The affordability agreement is the mechanism used to ensure that the affordable units in a development project are provided as required by State and local law. 14 of 105
Although the two projects have the same ownership entity, separate affordability agreements are required because the two projects are located on different properties and may be developed and/or sold separately in the future.

Analysis/Discussion
The Cotati Village 1 project, in accordance with the State Density Bonus program, has been granted a 50% increase in density in exchange for the provision of 15% of the base density units (18) as affordable. These 18 units will be restricted to very low income households, with rents set accordingly, for a minimum term of 55 years.

The Cotati Village 2 project, in accordance with the State Density Bonus program, has been granted a 50% increase in density in exchange for the provision of 15% of the base density units (13) as affordable. These 13 units will be restricted to very low income households, with rents set accordingly, for a minimum term of 55 years.

The affordable units in each project, in compliance with the City’s Land Use Code, will be provided in proportion to the overall unit mix for each project, and will be dispersed throughout the projects’ buildings and floors.

The Affordability Agreements will be recorded on the respective properties, and addresses the following key provisions:
• Number of and unit mix of restricted units
• Method of calculating rent level
• 55 year minimum term of affordability
• Use of Local Preference Policy for tenant selection of restricted units, as follows: 1. Live or work in the City of Cotati; 2. Have children who attend a school within the CotatiRohnert Park Unified School District; 3. Are members of a local Native American Tribe, including the Federated Indians of Graton Rancheria (FIGR); or 4. Are an employee of Sonoma State University, in this order.
• Contract compliance and reporting
• Property maintenance
• Restrictions on and City approval of property transfer Financial Considerations
With the exception of the staff time needed to prepare the agreements and resolution, there are no direct financial impacts to the general fund associated with the adoption of the resolution.

Environmental Issues
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The proposed resolution approving affordability agreements for the Cotati Village 1 and 2 projects is not a project within the meaning of Section 15378 of the State of California Environmental Quality Act ("CEQA") Guidelines, because it has no potential for resulting in physical change in the environment, directly or indirectly. The City Council further finds that CEQA analysis for the Cotati Village 1 and 2 projects has been previously conducted and conformed to CEQA Guidelines Section 15183, which provides a streamlined review of the environmental impacts of the projects by tiering from the program level analysis prepared for the Cotati General Plan and its certified EIR. Section 15183 of the CEQA Guidelines mandates that projects which are determined to be consistent with the development density established by existing zoning, community plan, or general plan policies for which an EIR was certified shall not require additional environmental review, except as might be necessary to examine whether there are project-specific significant effects which are peculiar to the project or its site. All adopted mitigating General Plan policies and mitigation measures identified in the 2013 General Plan EIR that apply to the Project are identified in the analysis and imposed as environmental conditions of approval.
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RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COTATI APPROVING

AFFORDABILITY AGREEMENTS WITH DIAMOND BOULEVARD, LLC FOR THE COTATI VILLAGE 1 AND COTATI VILLAGE 2 DEVELOPMENT PROJECTS WHEREAS, on February 27, 2024, the City Council approved Preliminary Design Review and a Tree Removal Permit for the Cotati Village 1 project, a 177-unit housing development with 4,752 square feet of commercial space proposed for the property located at the northeast corner of Gravenstein Highway and Alder Avenue; and WHEREAS, on August 27, 2024, the City Council approved Preliminary Design Review and a Tree Removal Permit for the Cotati Village 2 project, a 126-unit housing development with 2,200 square feet of commercial space proposed for the property located at the northwest corner of Gravenstein Highway and Alder Avenue; and
WHEREAS, pursuant to Chapter 17.31 (Affordable Housing Requirements) of the Cotati Municipal Code, 15% of the housing units in a residential development with more than nine units must be designated as affordable, based on Area Median Income (AMI) for a period of 55 years, and that one-third of the affordable units must be reserved for very low-income households, one-third for low-income households, and one-third for moderate-income households; and
WHEREAS, Chapter 17.31 of the City’s Municipal Code further requires the execution of an affordability agreement between the City and the developer/owner of each project subject to Chapter 17.31 in order to ensure that the requirements of that Chapter will be met; and WHEREAS, the applicant, Diamond Boulevard, a Limited Liability Corporation (LLC), has accepted the obligation to execute two Affordable Housing Regulatory Agreements and Declaration of Restricted Covenants (Affordable Housing Agreements) for Cotati Village 1 and 2 projects, respectively, and are attached to this resolution; and WHEREAS, the Cotati Village 1 and 2 projects utilize the State Density Bonus law, which requires local jurisdictions to grant an increase in density to qualifying residential projects in exchange for provision of a certain number of affordable, income-restricted housing units within the project that are maintained as such for a minimum term of 55 years; and WHEREAS, these projects support the City of Cotati’s 2023-2031 Housing Element’s goal to promote affordable housing development by providing affordable housing units at no public cost and contribute to the City’s Regional Housing Needs Allocation.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Cotati hereby finds the following:

1. The foregoing recitals are declared to be true and correct and are incorporated herein by 17 of 105 reference.

2. The City Council finds that the Affordable Housing Agreements for the Cotati Village 1 and 2 projects is not a project within the meaning of Section 15378 of the State of California Environmental Quality Act ("CEQA") Guidelines, because it has no potential for resulting in physical change in the environment, directly or indirectly. The City Council further finds that CEQA analysis for the Cotati Village 1 and 2 projects has been previously conducted and conformed to CEQA Guidelines Section 15183, which provides a streamlined review of the environmental impacts of the projects by tiering from the program level analysis prepared for the Cotati General Plan and its certified EIR. Section 15183 of the CEQA Guidelines mandates that projects which are determined to be consistent with the development density established by existing zoning, community plan, or general plan policies for which an EIR was certified shall not require additional environmental review, except as might be necessary to examine whether there are project-specific significant effects which are peculiar to the project or its site. All adopted mitigating General Plan policies and mitigation measures identified in the 2013 General Plan EIR that apply to the Project are identified in the analysis and imposed as environmental conditions of approval.

3. The City Council hereby approves the affordability agreements, in the form attached to this resolution, for the Cotati Village 1 and Cotati Village 2 development projects.

4. The City Council hereby authorizes the City Manager, or their designee, to execute the documents on behalf of the City, substantially in the form presented for City Council review. The City Manager, in consultation with the City Attorney, may approve modifications to the document, provided such changes align with the intent of this Resolution, do not increase the City’s obligations, and do not impair the City’s rights.

5. This Resolution shall become effective immediately upon adoption.

IT IS HEREBY CERTIFIED that the foregoing ordinance was duly adopted at a regular meeting of the City Council of the City of Cotati held on September 9, 2025, by the following vote, to wit:

City of Cotati
201 West Sierra Avenue
Cotati, CA 94931-4217
Attn: City Clerk

EXEMPT FROM RECORDING FEES
PER GOVERNMENT CODE §§6103 &
27383
Space above this line for Recorder’s use.

AFFORDABLE HOUSING REGULATORY AGREEMENT
AND

DECLARATION OF RESTRICTIVE COVENANTS
This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this “Agreement”) is dated as of ____________, 20___, by and between the City of Cotati, a municipal corporation (“City”) and Diamond Boulevard, a Limited Liability Corporation (“Developer”). City and Developer are hereinafter collectively referred to as the “Parties” and as a “Party” individually. This Agreement shall be effective as of the date this Agreement is recorded (“Effective Date”).

RECITALS
A. Developer owns that certain property located in the City of Cotati, California (APNs 144-050-009 & 046-286-021) more particularly described as Exhibit “A” attached hereto and incorporated herein by reference (the “Property”).

B. Developer intends to construct, own and operate on the Property a mixed-use project (the “Development”) known as Cotati Village Community 1 consisting of six apartment buildings containing 177 residential rental units comprised of eighty (80) onebedroom units, sixty-three (63) two-bedroom units, and thirty-four (34) three-bedroom units. The Development also consists of 4,752 square feet of commercial floor area, a 5,702 square-foot community center, a pool and pool deck, frontage improvements, vehicle and bicycle parking, landscaping, and ancillary improvements.

C. Government Code Section 65915 authorizes Developer to request certain density increases, parking reductions, concessions, and waivers of development standards in exchange for various amounts of affordable housing. Pursuant to Government Code Section 65915, Owner has agreed that the Development will result in fifteen percent (15%) of the total units of the housing development being available for rent to Very LowIncome households; and has requested a density bonus of fifty-percent (50%) in allowable density.
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Cotati Village 1 Affordable Housing Regulatory Agreement Page 2 of 27 D. The Property is located within the CG (Commercial, Gravenstein Corridor) zoning district which allows up to 117.3 units (plus one manager’s unit) on the 7.82-acre Property (the base density). State density bonus regulations specify that an applicant can receive up to a fifty percent (50%) density bonus if fifteen percent (15%) of the Development’s base density units are restricted for occupancy by Very Low-Income Households for a period of not less than fifty-five (55) years (the “Restricted Units”).

E. The Development qualifies for a 50% increase in allowable density (up to 177 total units) because Developer has agreed to restrict occupancy of eighteen (18) of the base density units to Very Low-Income households and charge monthly rents that are considered affordable for those households.

F. The eighteen (18) Restricted Units shall be comprised of eight (8) one-bedroom Restricted Units, six (6) two-bedroom Restricted Units, and four (4) three-bedroom Restricted Units.

G. Prior to the issuance of building permits to allow construction of the Development, the Parties will execute this Agreement for recordation in the Official Records of the County of Sonoma (the “Official Records”).

H. The above recitals relating to the Development are for information purposes only, and in no way affect the Developer’s and City’s rights and obligations under this Agreement with respect to the Property. The above recitals also are not intended to relieve the Developer of any additional inclusionary obligations the Developer may incur as a result of modifications to development plans existing as of the date of this Agreement.

I. In connection with the granting of such permits and entitlements for the Project, the City will impose certain development impact fees and charges (“Impact Fees”).

J. The Parties have agreed to enter into and record this Agreement in order to satisfy the conditions described in the foregoing Recitals. The Parties agree that the covenants set forth in this Agreement run with the land and are binding upon Developer and Developer’s successors in interest and assigns for a period of not less than fifty-five (55) years from the date of first occupancy of the Development.

NOW THEREFORE, in consideration of the foregoing, and other valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows.

1. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits. “Actual Household Size” means the actual number of persons in the applicable household.
“Adjusted for Family Size Appropriate to the Unit” shall be determined consistent with Section 50052.5(h) of the California Health and Safety Code and 20 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 3 of 27 applicable federal rules, including the rules and regulations applicable to the use of federal low-income housing tax credits.
“Adjusted Income” means the total anticipated annual income of all persons in a household including nonrelated individuals, as calculated by HUD or TCAC. “Affordable Rent” means that the gross monthly rent payable by the tenant does not exceed one-twelfth of thirty percent (30%) of the applicable AMI limit, Adjusted for Family Size Appropriate to the Restricted Unit, as specified in Section 2.2, less a reasonable utility allowance.
“Area Median Income” or “AMI” means the median gross yearly income adjusted for Actual Household Size (to qualify residents) or Assumed Household Size (to calculate rents), as applicable, in the County of Sonoma, California, as published from time to time by HCD. In the event that such income determinations are no longer published or are not updated for a period of at least eighteen (18) months, the City shall provide Developer with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HCD.
“Assumed Household Size” shall have the meaning set forth in Section 2.2. The definition is utilized to calculate Affordable Rent and is not intended to be a limit on the number of persons occupying a unit. The minimum Assumed Household Size shall be the number of bedrooms plus one, or the actual size of the household, whichever is greater. “Claims” is defined in Section 10.
“Eligible Household” means a household for which gross household income upon initial occupancy does not exceed the applicable maximum income level for a Restricted Unit, as specified in Section 2.1.
“Indemnitees” is defined in Section 10.
“HCD” means the California Department of Housing and Community Development.
“Management and Marketing Plan” is defined in Section 6.4. “Regulations” means Title 25 of the California Code of Regulations. “Rent” means the total of monthly payments by the residents of a Unit (other than the manager’s Unit) for the following: (1) use and occupancy of the Unit and land and related improvements, including parking; (2) any separately charged fees or service charges assessed by the Developer which are required of all tenants, other than security deposits; (3) the cost of an adequate level of service for utilities paid by the tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service, cable service or any other utility or service permitted to be excluded from the calculation of Rent pursuant to the terms of 25 California Code of Regulations Section 6918; and (4) any other interest, taxes, fees or 21 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 4 of 27 charges for use of the land or associated facilities and assessed by a public or private entity other than the Developer, and paid by the tenant. “Restricted Unit” means a dwelling unit which is reserved for occupancy at an Affordable Rent by a household of not more than a specified household income in accordance with and as set forth in Section 2.1.
“Very Low-Income Household” shall mean a household with an Adjusted Income that does not exceed fifty percent (50%) of Area Median Income. “Very Low-Income Rent” shall mean the rent permitted to be charged for a Very Low-Income Unit pursuant to Section 2.2 below.
“Very Low-Income Units” shall mean the Units, which, pursuant to Section 2.1 below, are required to be occupied by Very Low-Income Households.

2. Affordability Requirements

2.1 Use and Affordability Restrictions. Developer hereby covenants and agrees, for itself and its successors and assigns, that eighteen (18) units in the Development shall be used solely for the operation of an affordable residential rental development for Eligible Households. Developer represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Developer covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of City.

Eighteen (18) of the units in the Development shall be rented to and occupied by, or, if vacant, available for occupancy by Eligible Households as further set forth in Recitals D and E (the “Restricted Units”), subject to Section 2.4, for a term of fifty-five (55) years commencing upon the date of issuance of a final certicate of occupancy for each building in the Development, set forth in Exhibit C. The City and the Developer acknowledge that other financing sources for the Development may impose additional affordability restrictions on the Development.

2.2 Rents for Restricted Units.
(a) Affordable Rent. Subject to the provisions of Section 2.4 below, the Rent charged to residents in the Restricted Units shall not exceed:
i. Very Low-Income Unit Rent. One-twelfth (1/12th) of thirty percent (30%) of fifty percent (50%) of Area Median Income, adjusted for Assumed Household Size.
(b) In calculating the allowable Rent for the Restricted Units, Assumed Household Size shall be the federally mandated household size assumptions as set forth in federal statutes or regulations for programs also providing financial assistance to the 22 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 5 of 27 Development (“Assumed Household Size”) and as further defined in the definition of Assumed Household Size in this Agreement.
(c) The Rent for Restricted Units may only be increased one time per year (unless otherwise approved in writing by the City) and the Rent level following an increase, or upon a new occupancy, shall not exceed the Rent level set forth in subsection (a) above, as applicable. Eligible Households occupying Restricted Units shall be given at least sixty (60) days written notice prior to any increase in the Rent. Copies of said notice shall be provided to the City upon request.
(d) Notwithstanding anything to the contrary contained in this Agreement, if the other lenders, tax credit investor, or regulatory agencies require stricter household income eligibility or affordability requirements than those imposed hereby, the requirements of such other lenders, tax credit investor, or regulatory agencies shall prevail, but such requirements and the requirements of this Agreement shall be reconciled to the greatest extent possible. In meeting all such income and affordability requirements, the Developer may count each unit at a specific income eligibility level as meeting the same specific income eligibility level requirement in each of the lender, tax credit, or regulatory agency regulatory agreements.

2.3 Tenant Eligibility and Selection

2.3.1 Local Preference Policy. Pursuant to Government Code Section 7061 and the City’s Housing Element Program 4-1, and assuming all other factors being equal, priority for available Restricted Units shall be extended to Eligible Households that: 1.

Currently live or work in the City of Cotati; 2. Have children who attend a school within the Cotati-Rohnert Park Unified School District; 3. Are members of a local Native American Tribe, including the Federated Indians of Graton Rancheria (FIGR); or 4. Are an employee of Sonoma State University, over other persons to rent or purchase deedrestricted affordable housing units, in the order of priority with which the categories are listed.

2.3.2 Selection of Tenants. The Developer shall fill available Restricted Units by the following methods, in priority order, and in compliance with any rules approved by the City, including the City’s Local Preference Policy:
a. Selection from a list of Eligible Households maintained by the City or its designee;
b. Selection of Eligible Households from the City’s Section 8 Housing Choice Voucher Waiting List;
c. Selection of other Eligible Households, as long as the Developer complies with the publication requirements in Section 2.3.3.

2.3.3 Publication of Availability of Units. Whenever a Restricted Unit becomes available and the City advises the Developer that it may pursue the selection method 23 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 6 of 27 described in Section 2.3.3(a), the Developer shall publish notices of the availability of Restricted Units via email to the City’s “Housing Interest List” in addition to other methods Developer reasonably deems practical and consistent with standard property management practices commonly used to widely publicize below market rate units. The notice should briefly explain what Restricted Units are, state the applicable income requirements, indicate where applications are available, state when the application period opens and closes, and provide a telephone number and email for questions.

Applications may require the name, address, and telephone number of the applicant; the number of persons to occupy the household; household income; information regarding the City’s Local Preference policy and any other information relevant to determine whether the applicant is eligible to occupy a Restricted Unit. The owner shall submit proof of publication to the City.

2.3.4 Income Certification. The Developer shall be responsible for certifying the income of the tenants of Restricted Units to the City at the time of initial rental, and annually thereafter. This shall be completed by viewing acceptable documentation, including income tax statements or a W-2 for the previous calendar year, and submitting, on a form approved by the City, a certification that the tenant qualifies as an Eligible Household.

2.3.5 Occupancy. A household that occupies a Restricted Unit shall occupy the unit as its principal residence.

2.4 Changes in Tenant Income. If after moving into a Restricted Unit the tenant’s income eventually increases such that the tenant no longer qualifies as an Eligible Household, the tenant shall be given one year’s notice to vacate the unit. If within that year, another comparable unit in the Development is vacated, the Developer may, at the Developer’s option, allow the tenant to remain in the original unit and raise the tenant’s rent to market rate and designate the newly vacated unit as a new Restricted Unit at the applicable Affordable Rent. Unless the tenants household situation has changed, the new Restricted Unit must be comparable in size (i.e., number of bedrooms, bathrooms, square footage, etc.) and location (i.e., comparable floor, comparable view, etc.) to the original Restricted Unit.

In the event of inconsistency between the provisions of this Section and the rules applicable to the Development in connection with low-income housing tax credits, taxexempt bond financing, or financing or rent subsidies provided to the Development by a federal, State, or other public agency, the rules applicable pursuant to such financing or subsidy source shall prevail.

2.5 No Condominium Conversion. Developer shall not convert the Development to condominium or cooperative ownership or sell condominium or cooperative rights to the Development or any part thereof during the term of this Agreement without the express authorization and approval from the City of Cotati, which consent shall be conditioned upon Developer’s agreement to ensure that the Restricted Units remain available as affordable housing to Eligible Households. Prior to conveyance 24 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 7 of 27 of any Restricted Unit(s), the buyer(s) of the for-sale Units shall enter into an affordable housing agreement, in a form approved by the City Manager and City Attorney, that maintains the affordability of the unit for the minimum term set forth in this Agreement or in California law, whichever is greater.

2.6 Non-Discrimination; Compliance with Fair Housing Laws.

2.6.1 Fair Housing. Developer shall comply with state and federal fair housing laws in the marketing, leasing, and management of the units in the Development. Developer shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates or vouchers for rent subsidies pursuant to the existing Section 8 program or any successor thereto, however Developer at his sole discretion, may limit the total units rented to tenants under the Section 8 program to a maximum of eighteen (18) units.

2.6.2 Non-Discrimination. The Developer shall apply the same rental terms and conditions to tenants of Restricted Units as are applied to all other tenants, except as otherwise to comply with this Agreement and/or government subsidy programs. Discrimination based on subsidies received by the prospective tenant is prohibited. Developer shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Developer covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those biases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code in, the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, nor shall Developer or any person claiming under or through Developer establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property or part thereof. Developer shall include such provision in all deeds, leases, contracts and other instruments executed by Developer, and shall enforce the same diligently and in good faith.

3. Reporting Requirements.

3.1 Tenant Certification. Developer or Developer’s authorized agent shall obtain from each household prior to initial occupancy of each Restricted Unit, and on every anniversary thereafter, a written certification on a form approved by the City containing all of the following, and with supporting documentation including income tax statements or a W-2 for the previous calendar year:
(a) The identity of each household member; and
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Cotati Village 1 Affordable Housing Regulatory Agreement Page 8 of 27 (b) The total gross household income; and
(c) Household compliance with Local Preference Policy consistent with Section

2.3.2 if applicable.

Developer shall retain such certificates for not less than five (5) years from the date of the last Tenant Certification for a specific unit, and annually upon City’s requested date and time, shall provide copies of such certificates to City and make the originals available for City inspection.

3.2 Annual Report; Inspections. By not later than April 30 of each year during the term of this Agreement, Developer shall submit an annual report (“Annual Report”) to the City for the prior calendar year in a form satisfactory to City, together with a certification that the Development is in compliance with the requirements of this Agreement. The Annual Report shall, at a minimum, include the following information for each dwelling unit in the Development as of the date of the Annual Report: (i) unit number; (ii) number of bedrooms; and (iii) current rent and other charges, specifying the amount chargeable to the Tenant. In addition, the Annual Report shall, at a minimum include the following information for each Restricted Unit in the Development as of the date of the Annual Report: (i) number of people residing in the unit as reported to the Developer; (ii) total gross household income of residents; (iii) documentation of source of household income in the form of occupants’ tax returns or other generally acceptable income verification documents; (iv) the information required by Section 3.1; and (v) dates of any vacancies of Restricted Units during the previous year.

The Annual Report shall include a site improvement (if any) and maintenance plan and shall include a report on the current waitlist for Restricted Units, including number of households, unit size desired, and typical wait period. Developer shall include with the Annual Report an income recertification for each Eligible Household, documentation verifying tenant eligibility and such additional information as City may reasonably request from time to time in order to demonstrate compliance with this Agreement. The Annual Report shall conform to the format requested by City; provided however, during such time that the Development is subject to a regulatory agreement restricting occupancy and/or rents pursuant to requirements imposed in connection with the use of state or federal lowincome housing tax credits or tax-exempt bond financing or grants, Developer may satisfy the requirements of this Section by providing City with a copy of compliance reports required in connection with such financing or grants.

3.3 On-Site Inspection and Monitory Fee. Developer shall permit representatives of City to enter and inspect the Property, the Development, and the property management records, in order to monitor compliance with this Agreement during normal business hours upon two business days advance notice of such visit to Developer or to Developer’s management agent.

The Development shall be subject to an annual monitoring fee of $125 per Restricted Unit, or as adjusted from time to time pursuant to the City’s Master Fee Schedule. If compliance monitoring is conducted by a third party, the true cost of said 26 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 9 of 27 compliance up to $125 per unit, as may be adjusted from time to time. Upon approval of the City, the Developer may elect to engage a qualified third party for monitoring compliance pursuant to this Agreement, and the City shall not unreasonably withhold approval of this election by the Developer.

4. Term of Agreement.

4.1 Term of Restrictions. This Agreement shall remain in effect through the 55th anniversary of the date of issuance of a final certicate of occupancy for each building in the Development, per Exhibit C, unless the term is extended by mutual agreement of the Parties.

4.2 Effectiveness Succeeds Conveyance of Property. This Agreement shall remain effective and fully binding for the full term hereof, as such may be extended pursuant to Section 4.1, regardless of any sale, assignment, transfer, or conveyance of the Property or the Development or any part thereof or interest therein.

4.3 Reconveyance. Upon the termination of this Agreement, the Parties agree to execute and record appropriate instruments to release and discharge this Agreement; provided, however, the execution and recordation of such instruments shall not be necessary or a prerequisite to the termination of this Agreement upon the expiration of the term as such may be extended pursuant to Section 4.1.

5. Binding Upon Successors; Covenants to Run with the Land. Developer hereby subjects its interest in the Property and the Development to the covenants and restrictions set forth in this Agreement. The City and Developer hereby declare their express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of Developer and City, regardless of any sale, assignment, conveyance or transfer of the Property, the Development or any part thereof or interest therein. Any successor-in-interest to Developer, including without limitation any purchaser, transferee or lessee of the Property or the Development (other than the tenants of the individual dwelling units within the Development) shall be subject to all of the duties and obligations imposed hereby for the full term of this Agreement. Each and every contract, deed, or other instrument affecting or conveying the Property or the Development or any part thereof, shall conclusively be held to have been executed, delivered and accepted subject to the covenants, restrictions, duties and obligations set forth herein, regardless of whether such covenants, restrictions, duties and obligations are set forth in such contract, deed, or other instrument. If any such contract, deed, or other instrument has been executed prior to the date hereof, Developer hereby covenants to obtain and deliver to City an instrument in recordable form signed by the parties to such contract, deed, or other instrument pursuant to which such parties acknowledge and accept this Agreement and agree to be bound hereby.

Developer agrees for itself and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such 27 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 10 of 27 covenants shall be enforced as equitable servitudes against the Property and the Development in favor of City.

6. Property Management; Repair and Maintenance; Marketing.

6.1 Management Responsibilities. Developer shall be responsible for all management functions with respect to the Property and the Development, including without limitation the selection of tenants, certification and recertification of household income and eligibility, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security.

City shall have no responsibility for management or maintenance of the Property or the Development.

6.2 Management Entity. City shall have the right to review and approve the qualifications of the management entity proposed by Developer for the Restricted Units in the Development. The contracting of management services to a management entity shall not relieve Developer of its primary responsibility for proper performance of management duties.

6.3 Repair, Maintenance and Security. Throughout the term of this Agreement, Developer shall at its own expense, maintain the Property and the Development in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations. Without limiting the foregoing, Developer agrees to maintain the Development and the Property (including without limitation, the residential units, common areas, meeting rooms, landscaping, driveways, parking areas and walkways) in a condition free of all waste, nuisance, debris, unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to prevent the same from occurring on the Property or at the Development. Developer shall prevent and/or rectify any physical deterioration of the Property and the Development and shall make all repairs, renewals and replacements necessary to keep the Property and the improvements located thereon in good condition and repair. Developer shall provide adequate industry standard security services for occupants of the Development. The Management and Marketing Plan shall provide for the installation of a security camera system at initial occupancy of each building. Nothing in the proceeding sentence shall require the continued use of a camera system if the parties agree upon a different or updated security system.

6.3.1 City’s Right to Perform Maintenance. In the event that Developer breaches any of the covenants contained in Section 6.3, and such default continues for a period of ten (10) business days after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days after written notice from City (with respect to landscaping, building improvements and general maintenance), then City, in addition to any other remedy it may have under this Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and the landscaped areas on the Property. All costs expended by City in connection with the foregoing, shall 28 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 11 of 27 constitute an indebtedness and shall be paid by Developer to City upon demand. All such sums remaining unpaid thirty (30) days following delivery of City’s invoice therefor shall bear interest at the lesser of ten percent (10%) per annum or the highest rate permitted by applicable law.

6.4 Management and Marketing Plan. The Developer shall be responsible for creating and maintaining a plan for managing the Property and marketing the units for rent in the Project (the “Management and Marketing Plan”). The Management and Marketing Plan shall be updated every five (5) years and be available to the City for review upon request. Updates and revisions to the Management and Marketing Plan may be subject to prior approval of Developer’s investors, limited partners and/or project lenders before being implemented.

The Management and Marketing Plan shall describe the management team and shall address how the Developer and the management entity plan to manage and maintain the Property and the Development. The Management and Marketing Plan shall include the proposed management agreement and the form of rental agreement that Developer proposes to enter into with the Development’s tenants. The Management and Marketing Plan shall address in detail how Developer plans to market the Restricted Units to prospective Eligible Households, in conformance with fair housing laws and this Agreement and with Developer’s tenant selection criteria and shall include email notification of unit availability and the process to apply for occupancy of the unit to the City’s Housing Interest List. Additionally, the Management and Marketing Plan shall identify how Developer plans to certify the eligibility of Eligible Households, including implementation of the City’s Local Preference Policy. Developer shall abide by the terms of the Management and Marketing Plan in marketing, managing, and maintaining the Property and the Development, and throughout the term of this Agreement, shall submit proposed modifications to City for review and approval, which shall not be unreasonably withheld.

6.5 Approval of Amendments. If City has not responded to any submission of the Management and Marketing Plan, the proposed management entity, or a proposed amendment or change to any of the foregoing within thirty (30) days following City’s receipt of such plan, proposal or amendment, the plan, proposal or amendment shall be deemed approved by City.

6.6 Fees, Taxes, and Other Levies. Developer shall be responsible for payment of all fees, assessments, taxes, charges, liens and levies applicable to the Property or the Development, including without limitation possessory interest taxes, if applicable, imposed by any public entity, and shall pay such charges prior to delinquency. However, Developer shall not be required to pay any such charge so long as (a) Developer is contesting such charge in good faith and by appropriate proceedings, (b) Developer maintains reserves adequate to pay any contested liabilities, and (c) on final determination of the proceeding or contest, Developer immediately pays or discharges any decision or judgment rendered against it, together with all costs, charges and interest.

The Parties acknowledge that the Developer will apply for exemption from property tax for the affordable units under Revenue and Taxation Code Section 214. 29 of 105
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6.7 Insurance Coverage. Throughout the term of this Agreement Developer shall at Developer’s expense, maintain in full force and effect insurance coverage as specified in Exhibit B and shall comply with all insurance requirements set forth in the Exhibit B.

6.8 Property Damage or Destruction. If any part of the Development is damaged or destroyed, Developer shall repair or restore the same, consistent with the occupancy and rent restriction requirements set forth in this Agreement. Such work shall be commenced as soon as reasonably practicable after the damage or loss occurs and shall be completed within one year thereafter or as soon as reasonably practicable, provided that insurance proceeds are available to be applied to such repairs or restoration within such period and the repair or restoration is financially feasible. During such time that lenders. low-income housing tax credit investors and State housing programs providing financing for the Development impose requirements that differ from the requirements of this Section the requirements of such lenders and investors shall prevail.

7. Recordation; Subordination. This Agreement shall be recorded in the Official Records of Sonoma County. Developer hereby represents, warrants and covenants that with the exception of easements of record, absent the written consent of City, this Agreement shall not be subordinated in priority to any lien (other than those pertaining to taxes or assessments), encumbrance, or other interest in the Property or the Development without the City’s approval. If at the time this Agreement is recorded, any interest, lien, or encumbrance has been recorded against the Development in position superior to this Agreement, upon the request of City, Developer hereby covenants and agrees to promptly undertake all action necessary to clear such matter from title or to subordinate such interest to this Agreement consistent with the intent of and in accordance with this Section 7, and to provide such evidence thereof as City may reasonably request. Notwithstanding the foregoing, the City agrees that City will not withhold consent to reasonable and industry standard requests for subordination of this Agreement pursuant to Section 8.3. Developer shall reimburse City for all costs, including but not limited to reasonable attorney’s fees, incurred in reviewing instruments and other legal documents proposed to effect a subordination under this Agreement within ten (10) days following City’s delivery of an invoice detailing such costs.

8. Transfer and Encumbrance.

8.1 Restrictions on Transfer and Encumbrance. During the term of this Agreement, except as permitted pursuant to this Agreement, Developer shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, “Transfer”) of the whole or any part of the Property, the Development, or the improvements located on the Property, without the prior written consent of the City, which approval shall not be unreasonably withheld. In addition, prior to the expiration of the term of this Agreement, except as expressly permitted by this Agreement, Developer shall not undergo any significant change of ownership without the prior written approval of City. For purposes of this Agreement, a “significant change of ownership” shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present ownership 30 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 13 of 27 and /or control of Developer, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision.

8.2 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of easements or permits to facilitate development of the Property; (ii) the dedication of any property; (iii) the lease of individual dwelling units to tenants for occupancy as their principal residence, or the lease of commercial space to commercial tenants, if applicable; (iv) assignments creating security interests for the purpose of financing the acquisition, construction, or permanent financing of the acquisition or the Property in accordance with the Agreement, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; (v) a Transfer to a limited partnership in which the managing general partner is a tax-exempt entity under the direct control of or under common control with a qualified non-profit affordable housing company; (vi) the admission of limited partners and any transfer of limited partnership interests in accordance with Developer’s agreement of limited partnership (the “Partnership Agreement”), provided that the Partnership Agreement and/or the instrument of Transfer provides for development and operation of the Property and Development in a manner consistent with this Agreement; (vii) the removal of the general partner by the investor limited partner for a default under the Partnership Agreement, provided the replacement general partner is an affiliate of the limited partner or an entity which is reasonably satisfactory to City; or (viii) the transfer of the General Partner’s interest to a nonprofit entity that is or its member/manager is tax-exempt under Section 501(c)(3) of the Internal Revenue Code of 1986 as amended, provided such replacement general partner is reasonably satisfactory to City or (ix) the grant, exercise and subsequent the transfer of the Project or limited partner interests in Developer to a qualified non-profit affordable housing company or an affiliate thereof pursuant to the right of first refusal and/or option granted under Developer’s Partnership Agreement.

In addition, City shall not withhold its consent to the sale, transfer or other disposition of the Development, in whole or in part, provided that: (a) the Development is and shall continue to be operated in compliance with this Agreement; (b) the transferee expressly assumes all obligations of Developer imposed by this Agreement; (c) the transferee executes all documents reasonably requested by the City with respect to the assumption of the Developer’s obligations under this Agreement, and upon City’s request, delivers to the City an opinion of its counsel to the effect that such document and this Agreement are valid, binding and enforceable obligations of such transferee; and (d) either (A) the transferee has at least three (3) years’ experience in the ownership, operation and management of multifamily rental housing projects of similar size to that of the Development, without any record of material violations of nondiscrimination provisions or other state or federal laws or regulations applicable to such projects, or (B) the transferee agrees to retain a property management firm with the experience and record described in Section 6.4.
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Cotati Village 1 Affordable Housing Regulatory Agreement Page 14 of 27 Unless waived by City, Owner shall reimburse City for all City costs, including but not limited to reasonable attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to affect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following City’s delivery of an invoice detailing such costs.

8.3 Encumbrances; Subordination. City agrees that the City will not withhold consent to reasonable requests to subordinate this Agreement to a third-party lender providing loan proceeds for the acquisition, development, construction, rehabilitation and/or operation of the Development; provided, that Developer agrees to use best efforts to ensure that any subordination agreement recorded against the Property, the Development or part thereof for the benefit of a lender other than City (“Third-Party Lender”) shall contain each of the following provisions: (i) Third-Party Lender shall use its best efforts to provide to City a copy of any notice of default issued to Developer concurrently with provision of such notice to Developer; (ii) City shall have the reasonable right, but not the obligation, to cure any default by Developer within the same period of time provided to Developer for such cure. Developer agrees to provide to City a copy of any notice of default Developer receives from any Third-Party Lender within three (3) business days following Developer’s receipt thereof.

8.4 Mortgagee Protection. No violation of any provision contained herein shall defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon all or any portion of the Development or the Property. The purchaser at any trustee’s sale or foreclosure sale shall not be liable for any violation of any provision hereof occurring prior to the acquisition of title by such purchaser. Promptly upon determining that a violation of this Agreement has occurred, City shall give written notice to the holders of record of any mortgages or deeds of trust encumbering the Development or the Property that such violation has occurred.

9. Default and Remedies.

9.1 Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder (“Event of Default”):
(a) The occurrence of a Transfer in violation of Section 8 hereof; (b) Developer’s failure to maintain insurance on the Property and the Development as required hereunder, and the failure of Developer to cure such default within ten (10) business days of written notice from City; (c) Subject to Developer’s right to contest the following charges, Developer’s failure to pay taxes or assessments due on the Property or the Development or failure to pay any other charge that may result in a lien on the Property or the Development, and Developer’s failure to cure such default within thirty (30) days of delinquency;
(d) A default has been declared under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains 32 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 15 of 27 uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan; (e) Developer’s default in the performance of any term, provision or covenant under this Agreement (other than an obligation enumerated in this Subsection

9.1), and unless such provision specifies a shorter cure period for such default, the continuation of such default for ten (10) days in the event of a monetary default or thirty (30) days in the event of a non-monetary default following the date upon which City shall have given written notice of the default to Developer, or if the nature of any such nonmonetary default is such that it cannot be cured within thirty (30) days, Developer’s failure to commence to cure the default within thirty (30) days and thereafter prosecute the curing of such default with due diligence and in good faith, but in no event longer than ninety (90) days from receipt of the notice of default or such longer period of time as City may allow.

The limited partners, investors, general partners and other lenders of Developer shall have the right to cure any default of Developer hereunder upon the same terms and conditions afforded to Developer. Provided that City has been given written notice of the address for delivery of notices to the limited partners, City shall provide any notice of default hereunder to the limited partners investors, general partners and other lenders concurrently with the provision of such notice to Developer, and as to the limited partners, et al, the cure periods specified herein shall commence upon the date of delivery of such notice in accordance with Subsection 11.3.

9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond any applicable cure period, City may proceed with any of the following remedies:

A. Bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking declaratory relief;
B. For violations of obligations with respect to rents for Restricted Units, impose as liquidated damages a charge in an amount equal to the actual amount collected in excess of the Affordable Rent;
C. If, in connection with an Event of Default under Subsection 9.1(d), a lienholder of any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property exercises its right to foreclose on the Property, then the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all indebtedness, claims and liabilities due under this Agreement. The City’s rights under this paragraph shall be fully subordinated to the prior payment in full of any senior secured obligations to which this Agreement has been subordinated pursuant to Section 8.3;
D. Pursue any other remedy allowed at law or in equity. 33 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 16 of 27 Each of the remedies provided herein is cumulative and not exclusive. The City may exercise from time to time any rights and remedies available to it under applicable law or in equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this Agreement.

10. Indemnity. Notwithstanding any other provision in the Agreement or other documents executed in connection with the City funds, Developer shall indemnify, defend (with counsel approved by City) and hold City and their respective elected and appointed officers, officials, employees, agents, and representatives (collectively, the “Indemnitees”) harmless from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) arising directly or indirectly, in whole or in part, as a result of or in connection with Developer’s construction, management, or operation of the Property and the Development or any failure to perform any obligation as and when required by this Agreement. Developer’s indemnification obligations under this Section 10 shall not extend to Claims resulting solely from the gross negligence or willful misconduct of Indemnitees. It is further agreed that City does not and shall not waive any rights against Developer that it may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or the deposit with City by Developer, of any of the insurance policies’ proceeds described in this Agreement.

The provisions of this Section 10 shall survive the expiration or earlier termination of this Agreement.

11. Miscellaneous.

11.1 Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties.

11.2 No Waiver. Any waiver by City of any term or provision of this Agreement must be in writing. No waiver shall be implied from any delay or failure by City to take action on any breach or default hereunder or to pursue any remedy allowed under this Agreement or applicable law. No failure or delay by City at any time to require strict performance by Developer of any provision of this Agreement or to exercise any election contained herein or any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding breach of the same or any other provision hereof or a relinquishment for the future of such election.

11.3 Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
(i) personal delivery, in which case notice is effective upon delivery; 34 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 17 of 27 (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered upon receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service;
City: City of Cotati
201 West Sierra Avenue
Cotati, CA 94931-4217
Attention: City Manager
Developer: Diamond Boulevard, LLC
855 Lakeville Street, Suite 200
Petaluma, CA 94952
Attention: Chris Scerri

11.4 Further Assurances. The Parties shall execute, acknowledge, and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement.

11.5 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another.

11.6 Action by the City. City Manager Authority. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent, or request by the City is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City’s City Manager or by any person who shall have been designated by the City Manager, without further approval by the City Council. City hereby authorizes the City Manager or designee to take such other actions and negotiate and execute any additional agreements, including, without limitation, implementing agreements hereof and amendments hereto, as may be necessary or proper to satisfy the purpose and intent of this Agreement. Notwithstanding the foregoing, the City Manager shall maintain the right to submit to the City Council for consideration and action any action or additional agreement under the City Manager’s authority if the City Manager desires to do so.

11.7 Non-Liability of City Officials, Officers, Directors, Employees and Agents.

No member, official, employee or agent of the City shall be personally liable to Developer or any successor in interest, in the event of any default or breach by the City, or for any amount of money which may become due to Developer or its successor or for any obligation of City under this Agreement. No director, officer, employee, or agent of the Developer shall be personally liable to the City or any successor in interest, in the event of any default or breach by the Developer, or for any amount of money which may become 35 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 18 of 27 due to the City or its successor or for any obligation of the Developer under this Agreement.

11.8 Headings; Construction. The headings of the sections and paragraphs of this Agreement are for convenience only and shall not be used to interpret this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party.

11.9 Time is of the Essence. Time is of the essence in the performance of this Agreement.

11.10 Governing Law and Venue. This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. Any legal action shall be venued in the County of Sonoma.

11.11 Attorneys’ Fees and Costs. If any legal or administrative action is brought to interpret or enforce the terms of this Agreement, the prevailing party shall be entitled to recover all reasonable attorneys’ fees and costs incurred in such action.

11.12 Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby.

11.13 Entire Agreement. This Agreement contains the entire agreement of Parties with respect to the subject matter hereof and supersedes all prior oral or written agreements between the Parties with respect thereto.

11.14 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.

SIGNATURES ON FOLLOWING PAGES.
36 of 105
Cotati Affordable Housing Regulatory Agreement Page 19 of 27 IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above.

CITY
City of Cotati, a municipal corporation
By: _______________________
Damien O’Bid, City Manager
Attest:_______________________
City Clerk
Approved as to form:
__________________
City Attorney

DEVELOPER
Diamond Boulevard, a limited liability corporation
By: ________________________
Chris Scerri
Manager
SIGNATURES MUST BE NOTARIZED.
37 of 105
Cotati Affordable Housing Regulatory Agreement Page 20 of 27 A notary public or other officer
completing this certificate verifies only
the identity of the individual who signed
the document to which this certificate is
attached, and not the truthfulness,
accuracy, or validity of that document.

STATE OF CALIFORNIA )
)

COUNTY OF SONOMA )
On , 20__, before me, ______________________, (here insert name and title of the officer), personally appeared , who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature _______________________________ (Seal)
38 of 105
Cotati Affordable Housing Regulatory Agreement Page 21 of 27 A notary public or other officer
completing this certificate verifies only
the identity of the individual who signed
the document to which this certificate is
attached, and not the truthfulness,
accuracy, or validity of that document.

STATE OF CALIFORNIA )
)

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature _______________________________ (Seal)
39 of 105
Cotati Affordable Housing Regulatory Agreement Page 22 of 27 Exhibit A

PROPERTY
Real property in the City of Cotati, County of Sonoma, State of California, described as follows:

Legal Description
40 of 105
Cotati Affordable Housing Regulatory Agreement Page 23 of 27 Exhibit B
Insurance Requirements
Throughout the term of this Agreement, Developer shall obtain and maintain, at Developer’s expense, the following policies of insurance.

A. Property Insurance. Insurance for the risks of direct physical loss, with minimum coverage being the perils insured under the standard Causes of Loss - Special form (ISO Form CP 10 30) or its equivalent, covering all improvements, all fixtures, equipment and personal property, located on or in, or constituting a part of, the Property (“Improvements”), in an amount equal to one hundred percent (100%) of the full replacement cost of all such property naming the City as a Loss Payee, as its interests may appear.

1. The insurance required hereunder shall be in amounts sufficient to prevent Developer from becoming a co-insurer under the terms of the applicable policies, with not more than a Ten Thousand Dollar ($10,000) deductible (or such higher deductible approved by the City, which approval shall not be unreasonably withheld) from the loss payable for any casualty.

B. Liability Insurance. Comprehensive general liability insurance on an “occurrence basis” covering all claims with respect to injury or damage to persons or property occurring on, in or about the Property and the Improvements. The limits of liability under this Paragraph B shall be not less than Two Million Dollars ($2,000,000) combined single limit per occurrence, with a deductible no greater than Ten Thousand Dollars ($10,000) or such higher deductible as may be approved by City, which approval shall not be unreasonably withheld.

1. The insurance shall also include coverage for:
(a) Liability for bodily injury or property damage arising out of the use, by or on behalf of Developer, of any owned, non-owned, leased or hired automotive equipment in the conduct of any and all operations conducted in connection with the Project or the Property;
(b) Premises and operations including, without limitation, bodily injury, personal injury, death or property damage occurring upon, in or about the Property or the Improvements on any elevators or any escalators therein and on, in or about the adjoining sidewalks, streets and passageways;
(c) Broad form property damage liability;
41 of 105
Cotati Affordable Housing Regulatory Agreement Page 24 of 27 (d) Additional insured and primary insured endorsements protecting the City and its respective elected and appointed officials, officers, employees and agents;
(e) Personal injury endorsement.

C. Worker’s Compensation Insurance. Worker’s compensation insurance, in the amount required under then applicable state law, covering Developer’s employees, if any, at work in or upon the Property or engaged in services or operations in connection with the Project or the Property. Developer shall require that any contract entered into by Developer with regard to work to be undertaken on the Property include a contractual undertaking by the contractor to provide worker’s compensation insurance for its employees in compliance with applicable state law.

D. Course of Construction Insurance. Course of construction insurance in the same amount as required in Paragraph A above for property insurance, covering all construction activities on the Property.

E. General Insurance Provisions.

1. All policies of insurance provided for in this Exhibit B shall be provided under valid and enforceable policies, in such forms and amounts as hereinbefore specified, issued by insurers licensed to do business in the State of California and having a rating of A-VII or better in Best Insurance Guide. Developer shall deliver to City certificates evidencing the insurance required to be carried by Developer under this Exhibit B. If requested by City, Developer shall deliver within ten (10) days following such request, certified, complete copies of the insurance policies required hereunder. Insurance policies to be provided hereunder shall meet the following requirements:

2. Each policy of insurance obtained pursuant to this Agreement, other than worker’s compensation insurance, shall contain endorsements which provide:
(a) A waiver by the insurer of the right of subrogation against City or Developer for negligence of any such person,
(b) A statement that the insurance shall not be invalidated should any insured waive in writing prior to the loss any or all right of recovery against any party for loss accruing to the property described in the insurance policy, and
(c) A provision that no act or omission of Developer which would otherwise result in forfeiture or reduction of the insurance therein provided shall affect or limit the obligation of the insurance company to pay the amount of any loss sustained. 42 of 105
Cotati Affordable Housing Regulatory Agreement Page 25 of 27 (d) By endorsement, City, and its elected and appointed officials, officers, employees and agents shall be named as additional insured under the liability insurance required to be maintained by Developer hereunder. City shall be named as loss payee on the property insurance policies required to be maintained hereunder.

3. Each policy required hereunder shall include a Notice of Cancellation or Change in Coverage Endorsement which shall provide that such policy shall not be cancelled or materially changed without at least thirty (30) days’ prior written notice by registered or certified mail to City.

4. All insurance policies shall provide that there shall be no exclusion from coverage for cross liability among the listed insureds.

5. Any certificate of insurance applicable to course of construction insurance to be maintained shall be deposited with City prior to commencement of construction of any Improvements.

6. Each policy shall contain an endorsement that provides that the insurance applies separately to each insured that is seeking coverage or against whom a claim is made, except with respect to the limits of liability.

7. Each policy shall be written as a primary policy not contributing with and not in excess of coverage that City may carry.

F. Blanket Policies. Any insurance provided for in this Exhibit B may be placed by a policy or policies of blanket insurance; provided, however, that such policy or policies provide that the amount of the total insurance allocated to the Property and the Project shall be such as to furnish protection the equivalent of separate policies in the amounts herein required, and provided further that in all other respects any such policy or policies shall comply with the other provisions of this Agreement.

G. Waiver of Subrogation. To the extent permitted by law and the policies of insurance required to be maintained hereunder, and without affecting such insurance coverage, City and Developer each waive any right to recover against the other:

1. Damages for injury or death of persons,

2. Damage to property,

3. Damage to the Property or the Improvements or any part thereof, or 43 of 105
Cotati Affordable Housing Regulatory Agreement Page 26 of 27

4. Claims arising by reason of any of the foregoing, to the extent that such damages and/or claims are covered (and only to the extent of such coverage) by insurance actually carried by either City or Developer.

This provision is intended to restrict each party (as permitted by law) to recover against insurance carriers to the extent of such coverage, and waive fully, and for the benefit of each, any rights and/or claims which might give rise to a right of subrogation in any insurance carrier. 44 of 105
Cotati Affordable Housing Regulatory Agreement Page 27 of 27 Exhibit C
Building Number Date of Final Certificate of Occupancy
A ____________________________
B ____________________________
C ____________________________
D ____________________________
E ____________________________
F ____________________________
45 of 105
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46 of 105
Recording Requested by
and when Recorded, return to:

City of Cotati
201 West Sierra Avenue
Cotati, CA 94931-4217
Attn: City Clerk

EXEMPT FROM RECORDING FEES
PER GOVERNMENT CODE §§6103 &
27383
Space above this line for Recorder’s use.

AFFORDABLE HOUSING REGULATORY AGREEMENT
AND

RECITALS
A. Developer owns that certain property located in the City of Cotati, California (APNs 144-040-011 & 144-040-021) more particularly described as Exhibit “A” attached hereto and incorporated herein by reference (the “Property”).

B. Developer intends to construct, own and operate on the Property a mixed-use project (the “Development”) known as Cotati Village Community 2 consisting of two apartment buildings containing 126 residential rental units comprised of forty-six (46) onebedroom units, sixty-four (64) two-bedroom units, and thirteen (13) three-bedroom units.

The Development also consists of a 2,250 square foot commercial building, frontage improvements, vehicle and bicycle parking, landscaping, and ancillary improvements.

D. The Property is located within the CG (Commercial, Gravenstein Corridor) zoning district which allows up to 84 units on the 5.62-acre Property (the base density). State 47 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 2 of 27 density bonus regulations specify that an applicant can receive up to a fifty percent (50%) density bonus if fifteen percent (15%) of the Development’s base density units are restricted for occupancy by Very Low-Income Households for a period of not less than fifty-five (55) years (the “Restricted Units”).

E. The Development qualifies for a 50% increase in allowable density (up to 126 total units) because Developer has agreed to restrict occupancy of eighteen (13) of the base density units to Very Low-Income households and charge monthly rents that are considered affordable for those households.

F. The eighteen (13) Restricted Units shall be comprised of five (5) one-bedroom Restricted Units, five (5) two-bedroom Restricted Units, and three (3) three-bedroom Restricted Units.

I. In connection with the granting of such permits and entitlements for the Project, the City will impose certain development impact fees and charges (“Impact Fees”).

NOW THEREFORE, in consideration of the foregoing, and other valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows.

1. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits. “Actual Household Size” means the actual number of persons in the applicable household.
“Adjusted for Family Size Appropriate to the Unit” shall be determined consistent with Section 50052.5(h) of the California Health and Safety Code and applicable federal rules, including the rules and regulations applicable to the use of federal low-income housing tax credits.
48 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 3 of 27 “Adjusted Income” means the total anticipated annual income of all persons in a household including nonrelated individuals, as calculated by HUD or TCAC. “Affordable Rent” means that the gross monthly rent payable by the tenant does not exceed one-twelfth of thirty percent (30%) of the applicable AMI limit, Adjusted for Family Size Appropriate to the Restricted Unit, as specified in Section 2.2, less a reasonable utility allowance.
“Area Median Income” or “AMI” means the median gross yearly income adjusted for Actual Household Size (to qualify residents) or Assumed Household Size (to calculate rents), as applicable, in the County of Sonoma, California, as published from time to time by HCD. In the event that such income determinations are no longer published or are not updated for a period of at least eighteen (18) months, the City shall provide Developer with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HCD.
“Assumed Household Size” shall have the meaning set forth in Section 2.2. The definition is utilized to calculate Affordable Rent and is not intended to be a limit on the number of persons occupying a unit. The minimum Assumed Household Size shall be the number of bedrooms plus one, or the actual size of the household, whichever is greater. “Claims” is defined in Section 10.
“Eligible Household” means a household for which gross household income upon initial occupancy does not exceed the applicable maximum income level for a Restricted Unit, as specified in Section 2.1.
“Indemnitees” is defined in Section 10.
“HCD” means the California Department of Housing and Community Development.
“Management and Marketing Plan” is defined in Section 6.4. “Regulations” means Title 25 of the California Code of Regulations. “Rent” means the total of monthly payments by the residents of a Unit (other than the manager’s Unit) for the following: (1) use and occupancy of the Unit and land and related improvements, including parking; (2) any separately charged fees or service charges assessed by the Developer which are required of all tenants, other than security deposits; (3) the cost of an adequate level of service for utilities paid by the tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service, cable service or any other utility or service permitted to be excluded from the calculation of Rent pursuant to the terms of 25 California Code of Regulations Section 6918; and (4) any other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public or private entity other than the Developer, and paid by the tenant. 49 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 4 of 27 “Restricted Unit” means a dwelling unit which is reserved for occupancy at an Affordable Rent by a household of not more than a specified household income in accordance with and as set forth in Section 2.1.
“Very Low-Income Household” shall mean a household with an Adjusted Income that does not exceed fifty percent (50%) of Area Median Income. “Very Low-Income Rent” shall mean the rent permitted to be charged for a Very Low-Income Unit pursuant to Section 2.2 below.
“Very Low-Income Units” shall mean the Units, which, pursuant to Section 2.1 below, are required to be occupied by Very Low-Income Households.

2. Affordability Requirements

2.1 Use and Affordability Restrictions. Developer hereby covenants and agrees, for itself and its successors and assigns, that thirteen (13) units in the Development shall be used solely for the operation of an affordable residential rental development for Eligible Households. Developer represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Developer covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of City.

Thirteen (13) of the units in the Development shall be rented to and occupied by, or, if vacant, available for occupancy by Eligible Households as further set forth in Recitals D and E (the “Restricted Units”), subject to Section 2.4, for a term of fifty-five (55) years commencing upon the date of issuance of a final certicate of occupancy for each building in the Development, set forth in Exhibit C. The City and the Developer acknowledge that other financing sources for the Development may impose additional affordability restrictions on the Development.

2.2 Rents for Restricted Units.
(a) Affordable Rent. Subject to the provisions of Section 2.4 below, the Rent charged to residents in the Restricted Units shall not exceed:
i. Very Low-Income Unit Rent. One-twelfth (1/12th) of thirty percent (30%) of fifty percent (50%) of Area Median Income, adjusted for Assumed Household Size.
(b) In calculating the allowable Rent for the Restricted Units, Assumed Household Size shall be the federally mandated household size assumptions as set forth in federal statutes or regulations for programs also providing financial assistance to the Development (“Assumed Household Size”) and as further defined in the definition of Assumed Household Size in this Agreement.
50 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 5 of 27 (c) The Rent for Restricted Units may only be increased one time per year (unless otherwise approved in writing by the City) and the Rent level following an increase, or upon a new occupancy, shall not exceed the Rent level set forth in subsection (a) above, as applicable. Eligible Households occupying Restricted Units shall be given at least sixty (60) days written notice prior to any increase in the Rent. Copies of said notice shall be provided to the City upon request.
(d) Notwithstanding anything to the contrary contained in this Agreement, if the other lenders, tax credit investor, or regulatory agencies require stricter household income eligibility or affordability requirements than those imposed hereby, the requirements of such other lenders, tax credit investor, or regulatory agencies shall prevail, but such requirements and the requirements of this Agreement shall be reconciled to the greatest extent possible. In meeting all such income and affordability requirements, the Developer may count each unit at a specific income eligibility level as meeting the same specific income eligibility level requirement in each of the lender, tax credit, or regulatory agency regulatory agreements.

2.3 Tenant Eligibility and Selection

2.3.3 Publication of Availability of Units. Whenever a Restricted Unit becomes available and the City advises the Developer that it may pursue the selection method described in Section 2.3.3(a), the Developer shall publish notices of the availability of Restricted Units via email to the City’s “Housing Interest List” in addition to other methods Developer reasonably deems practical and consistent with standard property 51 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 6 of 27 management practices commonly used to widely publicize below market rate units. The notice should briefly explain what Restricted Units are, state the applicable income requirements, indicate where applications are available, state when the application period opens and closes, and provide a telephone number and email for questions.

2.3.5 Occupancy. A household that occupies a Restricted Unit shall occupy the unit as its principal residence.

2.5 No Condominium Conversion. Developer shall not convert the Development to condominium or cooperative ownership or sell condominium or cooperative rights to the Development or any part thereof during the term of this Agreement without the express authorization and approval from the City of Cotati, which consent shall be conditioned upon Developer’s agreement to ensure that the Restricted Units remain available as affordable housing to Eligible Households. Prior to conveyance of any Restricted Unit(s), the buyer(s) of the for-sale Units shall enter into an affordable housing agreement, in a form approved by the City Manager and City Attorney, that 52 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 7 of 27 maintains the affordability of the unit for the minimum term set forth in this Agreement or in California law, whichever is greater.

2.6 Non-Discrimination; Compliance with Fair Housing Laws.

3. Reporting Requirements.

3.1 Tenant Certification. Developer or Developer’s authorized agent shall obtain from each household prior to initial occupancy of each Restricted Unit, and on every anniversary thereafter, a written certification on a form approved by the City containing all of the following, and with supporting documentation including income tax statements or a W-2 for the previous calendar year:
(a) The identity of each household member; and
(b) The total gross household income; and
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Cotati Village 1 Affordable Housing Regulatory Agreement Page 8 of 27 (c) Household compliance with Local Preference Policy consistent with Section

2.3.2 if applicable.

The Development shall be subject to an annual monitoring fee of $125 per Restricted Unit, or as adjusted from time to time pursuant to the City’s Master Fee Schedule. If compliance monitoring is conducted by a third party, the true cost of said compliance up to $125 per unit, as may be adjusted from time to time. Upon approval of the City, the Developer may elect to engage a qualified third party for monitoring 54 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 9 of 27 compliance pursuant to this Agreement, and the City shall not unreasonably withhold approval of this election by the Developer.

4. Term of Agreement.

Developer agrees for itself and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Property and the Development in favor of City.
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Cotati Village 1 Affordable Housing Regulatory Agreement Page 10 of 27

6. Property Management; Repair and Maintenance; Marketing.

City shall have no responsibility for management or maintenance of the Property or the Development.

6.3.1 City’s Right to Perform Maintenance. In the event that Developer breaches any of the covenants contained in Section 6.3, and such default continues for a period of ten (10) business days after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days after written notice from City (with respect to landscaping, building improvements and general maintenance), then City, in addition to any other remedy it may have under this Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and the landscaped areas on the Property. All costs expended by City in connection with the foregoing, shall constitute an indebtedness and shall be paid by Developer to City upon demand. All such sums remaining unpaid thirty (30) days following delivery of City’s invoice therefor shall 56 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 11 of 27 bear interest at the lesser of ten percent (10%) per annum or the highest rate permitted by applicable law.

The Parties acknowledge that the Developer will apply for exemption from property tax for the affordable units under Revenue and Taxation Code Section 214. 57 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 12 of 27

8. Transfer and Encumbrance.

8.1 Restrictions on Transfer and Encumbrance. During the term of this Agreement, except as permitted pursuant to this Agreement, Developer shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, “Transfer”) of the whole or any part of the Property, the Development, or the improvements located on the Property, without the prior written consent of the City, which approval shall not be unreasonably withheld. In addition, prior to the expiration of the term of this Agreement, except as expressly permitted by this Agreement, Developer shall not undergo any significant change of ownership without the prior written approval of City. For purposes of this Agreement, a “significant change of ownership” shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present ownership 58 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 13 of 27 and /or control of Developer, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision.

In addition, City shall not withhold its consent to the sale, transfer or other disposition of the Development, in whole or in part, provided that: (a) the Development is and shall continue to be operated in compliance with this Agreement; (b) the transferee expressly assumes all obligations of Developer imposed by this Agreement; (c) the transferee executes all documents reasonably requested by the City with respect to the assumption of the Developer’s obligations under this Agreement, and upon City’s request, delivers to the City an opinion of its counsel to the effect that such document and this Agreement are valid, binding and enforceable obligations of such transferee; and (d) either (A) the transferee has at least three (3) years’ experience in the ownership, operation and management of multifamily rental housing projects of similar size to that of the Development, without any record of material violations of nondiscrimination provisions or other state or federal laws or regulations applicable to such projects, or (B) the transferee agrees to retain a property management firm with the experience and record described in Section 6.4.
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Cotati Village 1 Affordable Housing Regulatory Agreement Page 14 of 27 Unless waived by City, Owner shall reimburse City for all City costs, including but not limited to reasonable attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to affect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following City’s delivery of an invoice detailing such costs.

9. Default and Remedies.

9.1 Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder (“Event of Default”):
(a) The occurrence of a Transfer in violation of Section 8 hereof; (b) Developer’s failure to maintain insurance on the Property and the Development as required hereunder, and the failure of Developer to cure such default within ten (10) business days of written notice from City; (c) Subject to Developer’s right to contest the following charges, Developer’s failure to pay taxes or assessments due on the Property or the Development or failure to pay any other charge that may result in a lien on the Property or the Development, and Developer’s failure to cure such default within thirty (30) days of delinquency;
(d) A default has been declared under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains 60 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 15 of 27 uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan; (e) Developer’s default in the performance of any term, provision or covenant under this Agreement (other than an obligation enumerated in this Subsection

9.2 Remedies. Upon the occurrence of an Event of Default and its continuation beyond any applicable cure period, City may proceed with any of the following remedies:

A. Bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking declaratory relief;
B. For violations of obligations with respect to rents for Restricted Units, impose as liquidated damages a charge in an amount equal to the actual amount collected in excess of the Affordable Rent;
C. If, in connection with an Event of Default under Subsection 9.1(d), a lienholder of any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property exercises its right to foreclose on the Property, then the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all indebtedness, claims and liabilities due under this Agreement. The City’s rights under this paragraph shall be fully subordinated to the prior payment in full of any senior secured obligations to which this Agreement has been subordinated pursuant to Section 8.3;
D. Pursue any other remedy allowed at law or in equity. 61 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 16 of 27 Each of the remedies provided herein is cumulative and not exclusive. The City may exercise from time to time any rights and remedies available to it under applicable law or in equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this Agreement.

The provisions of this Section 10 shall survive the expiration or earlier termination of this Agreement.

11. Miscellaneous.

11.1 Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties.

11.3 Notices. Except as otherwise specified herein, all notices to be sent pursuant to this Agreement shall be made in writing and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
(i) personal delivery, in which case notice is effective upon delivery; 62 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 17 of 27 (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered upon receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service;
City: City of Cotati
201 West Sierra Avenue
Cotati, CA 94931-4217
Attention: City Manager
Developer: Diamond Boulevard, LLC
855 Lakeville Street, Suite 200
Petaluma, CA 94952
Attention: Chris Scerri

11.5 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another.

11.7 Non-Liability of City Officials, Officers, Directors, Employees and Agents.

No member, official, employee or agent of the City shall be personally liable to Developer or any successor in interest, in the event of any default or breach by the City, or for any amount of money which may become due to Developer or its successor or for any obligation of City under this Agreement. No director, officer, employee, or agent of the Developer shall be personally liable to the City or any successor in interest, in the event of any default or breach by the Developer, or for any amount of money which may become 63 of 105
Cotati Village 1 Affordable Housing Regulatory Agreement Page 18 of 27 due to the City or its successor or for any obligation of the Developer under this Agreement.

11.9 Time is of the Essence. Time is of the essence in the performance of this Agreement.

11.14 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.

SIGNATURES ON FOLLOWING PAGES.
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Cotati Affordable Housing Regulatory Agreement Page 19 of 27 IN WITNESS WHEREOF, the Parties have executed this Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above.

CITY
City of Cotati, a municipal corporation
By: _______________________
Damien O’Bid, City Manager
Attest:_______________________
City Clerk
Approved as to form:
__________________
City Attorney

DEVELOPER
Diamond Boulevard, a limited liability corporation
By: ________________________
Chris Scerri
Manager
SIGNATURES MUST BE NOTARIZED.
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Cotati Affordable Housing Regulatory Agreement Page 20 of 27 A notary public or other officer
completing this certificate verifies only
the identity of the individual who signed
the document to which this certificate is
attached, and not the truthfulness,
accuracy, or validity of that document.

STATE OF CALIFORNIA )
)

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature _______________________________ (Seal)
66 of 105
Cotati Affordable Housing Regulatory Agreement Page 21 of 27 A notary public or other officer
completing this certificate verifies only
the identity of the individual who signed
the document to which this certificate is
attached, and not the truthfulness,
accuracy, or validity of that document.

STATE OF CALIFORNIA )
)

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature _______________________________ (Seal)
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Cotati Affordable Housing Regulatory Agreement Page 22 of 27 Exhibit A

PROPERTY
Real property in the City of Cotati, County of Sonoma, State of California, described as follows:

Legal Description
68 of 105
Cotati Affordable Housing Regulatory Agreement Page 23 of 27 Exhibit B
Insurance Requirements
Throughout the term of this Agreement, Developer shall obtain and maintain, at Developer’s expense, the following policies of insurance.

1. The insurance shall also include coverage for:
(a) Liability for bodily injury or property damage arising out of the use, by or on behalf of Developer, of any owned, non-owned, leased or hired automotive equipment in the conduct of any and all operations conducted in connection with the Project or the Property;
(b) Premises and operations including, without limitation, bodily injury, personal injury, death or property damage occurring upon, in or about the Property or the Improvements on any elevators or any escalators therein and on, in or about the adjoining sidewalks, streets and passageways;
(c) Broad form property damage liability;
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Cotati Affordable Housing Regulatory Agreement Page 24 of 27 (d) Additional insured and primary insured endorsements protecting the City and its respective elected and appointed officials, officers, employees and agents;
(e) Personal injury endorsement.

D. Course of Construction Insurance. Course of construction insurance in the same amount as required in Paragraph A above for property insurance, covering all construction activities on the Property.

E. General Insurance Provisions.

2. Each policy of insurance obtained pursuant to this Agreement, other than worker’s compensation insurance, shall contain endorsements which provide:
(a) A waiver by the insurer of the right of subrogation against City or Developer for negligence of any such person,
(b) A statement that the insurance shall not be invalidated should any insured waive in writing prior to the loss any or all right of recovery against any party for loss accruing to the property described in the insurance policy, and
(c) A provision that no act or omission of Developer which would otherwise result in forfeiture or reduction of the insurance therein provided shall affect or limit the obligation of the insurance company to pay the amount of any loss sustained. 70 of 105
Cotati Affordable Housing Regulatory Agreement Page 25 of 27 (d) By endorsement, City, and its elected and appointed officials, officers, employees and agents shall be named as additional insured under the liability insurance required to be maintained by Developer hereunder. City shall be named as loss payee on the property insurance policies required to be maintained hereunder.

4. All insurance policies shall provide that there shall be no exclusion from coverage for cross liability among the listed insureds.

5. Any certificate of insurance applicable to course of construction insurance to be maintained shall be deposited with City prior to commencement of construction of any Improvements.

7. Each policy shall be written as a primary policy not contributing with and not in excess of coverage that City may carry.

1. Damages for injury or death of persons,

2. Damage to property,

3. Damage to the Property or the Improvements or any part thereof, or 71 of 105
Cotati Affordable Housing Regulatory Agreement Page 26 of 27

This provision is intended to restrict each party (as permitted by law) to recover against insurance carriers to the extent of such coverage, and waive fully, and for the benefit of each, any rights and/or claims which might give rise to a right of subrogation in any insurance carrier. 72 of 105
Cotati Affordable Housing Regulatory Agreement Page 27 of 27 Exhibit C
Building Number Date of Final Certificate of Occupancy
A ____________________________
B ____________________________
73 of 105
EXHIBIT "A"
Legal Description
CLTA Preliminary Report Form - Modified (11.17.06) Printed: 12.08.23 @ 07:34 AM by CC SCA0002997.doc / Updated: 08.09.23 3 CA-FT-FSNX-01500.082151-SPS-1-23-FSNX-TO2201705S For APN/Parcel ID(s): 144-040-021-000

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF COTATI, COUNTY OF SONOMA, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

LYING WITHIN THE CITY OF COTATI, COUNTY OF SONOMA, STATE OF CALIFORNIA, AND BEING PORTIONS OF THE LANDS OF 7515 ALDER AVENUE, LLC, A CALIFORNIA LIMITED LIABLITY COMPANY, AS DESCRIBED BY GRANT DEED RECORDED UNDER DOCUMENT NUMBER 2021-120274, SONOMA

COUNTY RECORDS, AND A PORTION OF THE LANDS OF TOWNSEND CAPITAL PARTNERS, LLC, A

CALIFORNIA LIMITED LIABILITY COMPANY, AS DESCRIBED BY GRANT DEED RECORDED UNDER DOCUMENT NUMBER 2021-076333, SONOMA COUNTY RECORDS, SAID PORTIONS ARE MORE PARTICULARLY DESCRIVED AS FOLLOWS:

BEING SAID LANDS OF 7515 ALDER AVENUE, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, AS DESCRIBED BY GRANT DEED RECORDED UNDER DOCUMENT NUMBER 2021-120274, SONOMA

COUNTY RECORDS, EXCEPTING THEREFROM ALL THE PORTION LYING SOUTHERLY OF THE FOLLOWING DESCRIBED LINE:

COMMENCING AT THE NORTHEAST CORNER OF SAID LANDS OF 7515 ALDER AVENUE, LLC FROM WHICH A 3/4-INCH IRON PIPE TAGGED LS 5087 ON THE NORTHERLY LINE OF SAID LANDS BEARS NORTH 89°18'19" WEST 31.62 FEET AND ALSO FROM WHICH THE NORTHERLY COMMON CORNER OF

SAID LANDS AND THE LANDS OF TOWNSEND CAPITAL PARTNERS, LLC, A CALIFORNIA LIMITED

LIABILITY COMPANY, AS DESCRIBED BY GRANT DEED RECORDED UNDER DOCUMENT NUMBER 2021-076333, SONOMA COUNTY RECORDS, BEING MARKED WITH A 3/4-INCH IRON PIPE TAGGED 5087 BEARS NORTH 89°18'19" WEST 264.33 FEET AS SHOWN ON THE RECORD OF SURVEY RECORDED IN BOOK 714 OF MAPS AT PAGES 37 THROUGH 38, SONOMA COUNTY RECORDS; THENCE LEAVING SAID NORTHEAST CORNER, ALONG THE EASTERLY BOUNDARY OF SAID LANDS 7515 ALDER AVENUE, LLC, SOUTH 19°06'07" WEST 392.54 FEET TO THE POINT OF BEGINNING OF THE HEREIN DESCRIBED LINE; THENCE LEAVING SAID EASTERLY BOUNDARY, NORTH 80°20'26" WEST 118.14 FEET; THENCE NORTH 9°39'34" EAST 29.95 FEET; THENCE NORTH 80°20'26" WEST 132.50 FEET TO THE COMMON BOUNDARY OF SAID LANDS OF 7515 ALDER AVENUE, LLC AND SAID LANDS OF TOWNSEND CAPITAL PARTNERS, LLC; THENCE LEAVING SAID COMMON BOUNDARY, CONTINUING NORTH 80°20'26" WEST 141.91 FEET; THENCE SOUTH 74°47'33" WEST 5.91 FEET; THENCE SOUTH 54°03'57" WEST 29.88 FEET; THENCE SOUTH 9°58'47" WEST 12.78 FEET; THENCE SOUTH 89°53'51" WEST 57.71 FEET TO A POINT ON THE

WESTERLY BOUNDARY OF SAID LANDS OF TOWNSEND CAPITAL PARTNERS, LLC, AND THE TERMINUS OF THE HEREIN DESCRIBED LINE.

TOGETHER WITH ALL THE PORTION OF SAID LANDS OF TOWNSEND CAPITAL PARTNERS, LLC, A

CALIFORNIA LIMITED LIABILITY COMPANY, AS DESCRIBED BY GRANT DEED RECORDED UNDER DOCUMENT NUMBER 2021-076333, SONOMA COUNTY RECORDS, LYING NORTHERLY OF THE FOLLOWING DESCRIBED LINE:

COMMENCING AT THE NORTHEAST CORNER OF THE LANDS OF 7515 ALDER AVENUE, LLC, A

CALIFORNIA LIMITED LIABILITY COMPANY, AS DESCRIBED BY GRANT DEED RECORDED UNDER DOCUMENT NUMBER 2021-120274, SONOMA COUNTY RECORDS, FROM WHICH A 3/4-INCH IRON PIPE TAGGED LS 5087 ON THE NORTHERLY LINE OF SAID LANDS OF 7515 ALDER AVENUE, LLC BEARS NORTH 89°18'19" WEST 31.62 FEET AND ALSO FROM WHICH THE NORTHERLY COMMON CORNER OF SAID LANDS OF 7515 ALDER AVENUE, LLC AND SAID LANDS OF TOWNSEND CAPITAL PARTNERS, LLC, BEING MARKED WITH A 3/4-INCH IRON PIPE TAGGED LS 5087 BEARS NORTH 89°18'19" WEST 264.33 FEET AS SHOWN ON THAT RECORD OF SURVEY RECORDED IN BOOK 714 OF MAPS AT PAGES 37 THROUGH 38, SONOMA COUNTY RECORDS; THENCE LEAVING SAID NORTHEAST CORNER, ALONG THE EASTERLY BOUNDARY OF SAID LANDS OF 7515 ALDER AVENUE, LLC, SOUTH 19°06'07" WEST 74 of 105
Title No.: FSNX-TO2201705S-CC
Amendment: E
EXHIBIT "A"
Legal Description
(continued)
CLTA Preliminary Report Form - Modified (11.17.06) Printed: 12.08.23 @ 07:34 AM by CC SCA0002997.doc / Updated: 08.09.23 4 CA-FT-FSNX-01500.082151-SPS-1-23-FSNX-TO2201705S 392.54 FEET TO THE POINT OF BEGINNING OF THE HEREIN DESCRIBED LINE; THENCE LEAVING SAID EASTERLY BOUNDARY, NORTH 80°20'26" WEST 118.14 FEET; THENCE NORTH 9°39'34" EAST 29.95 FEET; THENCE NORTH 80°20'26" WEST 132.50 FEET TO THE COMMON BOUNDARY OF SAID LANDS OF 7515 ALDER AVENUE, LLC AND SAID LANDS OF TOWNSEND CAPITAL PARTNERS, LLC; THENCE LEAVING SAID COMMON BOUNDARY AND CONTINUING NORTH 80°20'26" WEST 141.91 FEET; THENCE SOUTH 74°47'33" WEST 5.91 FEET; THENCE SOUTH 54°03'57" WEST 29.88 FEET; THENCE SOUTH 9°58'47" WEST 12.78 FEET; THENCE SOUTH 89°53'51" WEST 57.71 FEET TO A POINT ON THE

WESTERLY BOUNDARY OF LANDS OF TOWNSEND CAPITAL PARTNERS, LLC, AND THE TERMINUS OF THE HEREIN DESCRIBED LINE.

THE HEREIN LEGAL DESCRIPTION IS PURSUANT TO THE LOT LINE ADJUSTMENT, CITY OF COTATI FILE NO., PA#22/20, DISCLOSED BY "NOTICE OF LOT LINE ADJUSTMENT OF PARCEL OF REAL PROPERTY", RECORDED AUGUST 16, 2023, DOCUMENT NO., 2023038165, OF OFFICIAL RECORDS.

APN: 144-040-011, (AFFECTS THIS AND OTHER PROPERTY), AND 144-040-021, (AFFECTS THIS AND

OTHER PROPERTY)
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Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: CONSIDERATION TO ADOPT RESOLUTION TO ACCEPT
THE FISCAL YEAR 2024-2025 ANNUAL REPORT OF
DEVELOPMENT IMPACT FEE ACTIVITY (AB1600)
Date: September 9, 2025
Written by: Angela Courter, Director of Administrative Services Recommendation
It is recommended that the City Council adopt a resolution accepting the fiscal year 2024-25 annual reports of development impact fee activity.

Background
The City imposes fees to mitigate the impact of development pursuant to the Mitigation Fee Act, Government Code Section 66000 et seq. When collected, the fees are deposited into special accounts. One of the mandated accounting guidelines, as stated in Government Code Section 66006(a), provides that the City shall establish separate accounts for each type of improvement funded by development fees. The City maintains and accounts for the following development fees:
• Inclusionary Housing: These fees are used for providing affordable housing. • Park-in-Lieu: These fees are used to fund the design and construction of park and park improvements required to mitigate the impact of new development. • Traffic Impact: These fees are used to fund the design and construction of things such as streets and traffic light improvements as identified in the fee program to mitigate the impact of new development.

Analysis/Discussion
Each local agency is required, within 180 days after the last day of each fiscal year, to make available to the public the following information:
• A brief description of the type of fee in the accounts; and • The amount of fees collected and the interest earned; and 76 of 105
• The beginning and ending balance of the accounts; and • Identification of each public improvement on which fees were expended; and • The amount of expenditure for each public facility or improvement made from the account during the year; and
• Other specified information as applicable.

Upon requests from any person, the City will provide a copy of this report. No requests have been made and as such the report was provided online. The City also posted a notice on its website of the availability of the development impact fee information pending acceptance from the Council. Upon adoption of the report by the City Council, the report will be revised to include the adopted resolution.

Exhibit A to the resolution includes tables showing the change in fund balance/working capital, revenues, and expenses for fiscal year 2024-25 as well as a description of each the development fee types, and a schedule of the development fees. No interfund transfers or loans were made from any of the identified accounts during this fiscal year. There were no refunds of development impact fees collected, pursuant to Government Code Section 66001(e), nor were there any allocations of unexpended revenues collected, pursuant to Government Code Section 66001(f).

Financial Considerations
Not applicable.

Environmental Issues
Approval of the resolution to accept the report of development fee impact activity is an administrative activity of government that will not result in direct or indirect physical changes in the environment. As such, the action does not constitute a project as defined by California Environmental Quality Act Guidelines Section 15378(b)(5) and therefore, no further environmental review is required.
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RESOLUTION NO. (XX)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COTATI
ACCEPTING THE FISCAL YEAR 2024-2025 ANNUAL REPORTS OF
DEVELOPMENT IMPACT FEES (AB 1600 REPORT)
WHEREAS, the City of Cotati imposes fees to mitigate the impact of development pursuant to Government Code Section 66000 et seq.; and
WHEREAS, said fees collected are deposited into separate special and capital accounts for each type of improvement funded by development fees; and WHEREAS, the City maintains separate funds for traffic mitigation, park in lieu, and inclusionary housing funds; and
WHEREAS, pursuant to Government Code Section 66006, the City is required within 180 days after the last day of each fiscal year to make available to the public information for the fiscal year regarding these fees; and
WHEREAS, City staff has prepared a report ("AB 1600 Report") that contains the information required by Government Code Section 66006, a copy of which is attached hereto as Exhibit “A”; and
WHEREAS, on May 14, 2019, an interfund loan for $1,000,000 to be repaid over 20 years at 3% was initiated from inclusionary housing to sewer operations and the outstanding balance as of June 30, 2025, due back to the Inclusionary Housing Fund was $693,164; and WHEREAS, there were no inter-fund transfers or loans made from any of the accounts identified in the AB 1600 Report; and
WHEREAS, there were no refunds of development impact fees collected pursuant to Government Code Section 66001(e), nor were there any allocations of unexpended revenues collected pursuant to Government Code Section 66001(f); and WHEREAS, no interested persons have requested notice of the AB 1600 Report; consequently, no notices of the availability of the AB 1600 Report were mailed; and WHEREAS, the information contained in the attached Exhibit A was made available to the public a minimum of 15 days prior to this City Council meeting date; and WHEREAS, a notice of the availability of the development fee information will be posted on the City’s website upon Council acceptance.
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COTATI DOES RESOLVE AS FOLLOWS:

Section 1. Findings. The City Council of the City of Cotati hereby resolves as follows:

A. In accordance with Government Code Section 66006, the City has conducted an annual review of its development impact fees and capital infrastructure programs and the City Council has reviewed the AB 1600 Report attached hereto as Exhibit A and incorporated herein by this reference.

B. The funds have been and shall be used for the purposes stated in the AB 1600 Report, are necessary to mitigate impacts resulting from development in the City and bear a reasonable relationship between the use of the fees and type of development project upon which the fee is imposed.

C. The City Council hereby accepts the AB 1600 Report.

D. The AB 1600 report continues to be available for public review on the City’s website and at the City Clerk’s office and upon request.

Section 2. Environmental Issues. Approval of the resolution to accept the report of development fee impact activity is an administrative activity of government that will not result in direct or indirect physical changes in the environment. As such, the action does not constitute a project as defined by California Environmental Quality Act Guidelines Section 15378(b)(5) and therefore, no further environmental review is required.

Section 3. Effective Date. The resolution shall take effect immediately upon adoption.

Section 4. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Resolution. The City Council hereby declares that it would have passed this Resolution and each section, subsection, phrase, or clause thereof irrespective of the fact that any one or more sections, subsections, phrases, or clauses be declared unconstitutional on their face or as applied.

IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on September 9, 2025, by the following vote, to wit:

Approved:___________________________
Mayor
Attest:______________________________
Kevin Patterson, Deputy City Clerk
Approved as to form:______________________________
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City Attorney
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205 206 216
Traffic
Mitigation Park in-Lieu Inclusionary Housing
Beginning Balance 07/01/24 $ 705,532 $ 93,439 $ 1,515,175 Revenues
Interest Earnings 34,998 3,180 60,379
Fees 16,356 9,684 37,320
Total Revenues 51,354 12,864 97,699
Expenditures - 106,000 1,040
Excess of Revenue Over/(Under)
Expenditures 51,354 (93,136) 96,659
Ending Balance 06/30/25 $ 756,886 $ 303 $ 1,611,834
- - (693,164)
Available Ending Balance 06/30/25 $ 756,886 $ 303 $ 918,671 Expenditures/
Transfers
Est % Funded by
Impact Fees
206 -- Park In-Lieu $ 106,000
Putnam Park Improvements - Phase 1 106,000 4%
216 -- Inclusionary Housing $ 1,040
Affordable Housing Legal Review 1,040 N/A
July 1, 2024 through June 30, 2025
Annual Report on Developers' Funds Per GC 66000
Analysis of Changes in Fund Balance/Working Capital
July 1, 2024 through June 30, 2025
Annual Report on Developers' Funds Per GC 66000
Expense Report
Outstanding Interfund Loan Receivable
Draft Pending Council Action
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Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: CONSIDERATION TO ADOPT RESOLUTION ACCEPTING
THE 2025 STREET IMPROVEMENT PROJECT
Date: September 9, 2025
Written by: Craig Scott, Director of Public Works/City Engineer Recommendation
It is recommended the City Council of the City of Cotati adopt a resolution accepting the 2025 Street Improvement Project, authorizing the City Clerk to file the Notice of Completion with the County Recorder, and after 35 days with no protests, release the construction contract retention.

Background
The City’s Five-Year Capital Improvements Plan includes a list of street paving projects. The paving projects are based on a Pavement Management Program (PMP), updated every 2 years, which guides the identification and prioritization of street pavement maintenance projects. The PMP provides strategies to prioritize the annual roadway projects based on their condition and treatment costs. Pavement maintenance projects are significantly funded by, and made possible by Measure S, the City’s local revenue measure, grant matching funds, as well as the street financing issued in 2022. The City Council continues to prioritize street repair and maintenance to reduce long-term maintenance costs. Since July 2020, the City has completed approximately $16 million in roadway improvements, increasing the Pavement Condition Index (PCI) to the mid-70’s. The PCI of similar sized agencies in the 9 county Bay Area is 54, putting the City in the top 25% of peer agencies and making Cotati’s streets among the best in Sonoma County, regardless of agency size.

Analysis/Discussion
On April 8, 2025, City Council awarded the construction agreement for the 2025 Street Improvement Project (Project) to American Asphalt Repair & Resurfacing Co, Inc. The first page of the As-Builts is attached to provide a general idea of the scope of the Project. The full plan set is available from the City’s Engineering Department. 82 of 105
Field work began in mid-May and a final inspection was conducted on June 16, 2025. The City Engineer has determined the work has been completed in accordance with the project documents.

Construction Management for the Project has been conducted by Green Valley Consulting Engineers. The work has been completed within the contract’s allotted days and under budget. On June 10, 2025, City Council approved a budget amendment to account for an underestimation of the crack sealing needed, to add speed cushions on Benson Lane and a three way stop at the intersection of Benson Lane and Loretto Avenue, and for additional striping on Water Road. Following City Council action, a Notice of Completion is to be filed with the County Recorder and provided there are no protests after thirty-five days, the City is to release the retention to the Contractor.

Financial Considerations
The City’s Fiscal Year 24/25 Budget has an amended annual project budget of $719,000 and no prior year expenditures. Total Project costs are $670,158 with an amount under budget of $48,841. Below is a table summarizing the project costs.

Contract Cost
Construction $552,082
Construction Management $68,687
Construction Design $48,456
Other Costs $933
Total $670,158
Prior Fiscal Year Costs 0
Total Budged 24/25 $664,000
Total Amended $719,000
Amount Under/(Over) Budget $48,841
The unused budget will be returned to the City’s unappropriated General Fund account.

Environmental Issues
Acceptance of the 2025 Street Improvement Project consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of the existing or former use. Therefore, adoption of the resolution accepting the 2025 Street Improvement Project is found to qualify for a Class 1 Categorical Exemption under CEQA Section 15301, and no further environmental review is required. 83 of 105
RESOLUTION NO. (XX)
ACCEPTING THE 2025 STREET IMPROVEMENT PROJECT, AUTHORIZING THE

CITY CLERK TO FILE THE NOTICE OF COMPLETION WITH THE COUNTY

RECORDER AND RELEASE THE CONSTRUCTION CONTRACT RETENTION WHEREAS, the City’s Five-Year Capital Improvements Plan includes a list of street paving projects, and the paving projects are based on a Pavement Management Program (PMP), updated every 2 years, which guides the identification and prioritization of street pavement maintenance projects; and
WHEREAS, the PMP provides strategies to prioritize the annual roadway projects based on their condition and treatment costs, and pavement maintenance projects are significantly funded by, and made possible by Measure S, the City’s local revenue measure, grant matching funds, as well as the street financing issued in 2022; and WHEREAS, the City Council continues to prioritize street repair and maintenance to reduce long-term maintenance costs, and, since July 2020, the City has completed approximately $16 million in roadway improvements, increasing the Pavement Condition Index (PCI) to the mid-70’s, and these investments have made considerable progress in improving the condition of our roadways, making Cotati’s streets among the best in Sonoma County; and WHEREAS, on April 8, 2025, City Council awarded the construction agreement for the 2025 Street Improvement Project (Project) to American Asphalt Repair & Resurfacing Co, Inc., and the first page of the As-Builts is attached to provide a general idea of the scope of the Project; and
WHEREAS, field work began in mid-May and a final inspection was conducted on June 16, 2025, and the City Engineer has determined the work has been completed in accordance with the project documents; and
WHEREAS, Construction Management for the Project has been conducted by Green Valley Consulting Engineers, and the work has been completed within the contract allotted days and under budget; and
WHEREAS, on June 10, 2025, City Council approved a budget amendment to account for an underestimation of the crack sealing needed, to add speed cushions on Benson Lane and a three way stop at the intersection of Benson Lane and Loretto Avenue, and for additional striping on Water Road;
WHEREAS, following City Council action, a Notice of Completion is to be filed with the County Recorder and after thirty-five days, provided there are no protests, the City is to release the retention to the Contractor; and
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WHEREAS, The City’s Fiscal Year 24/25 Budget has an amended annual project budget of $719,000 and total Project costs are $670,158 with an amount under budget of $48,841; and WHEREAS, this action is found to qualify for a Class 1 Categorical Exemption under CEQA Section 15301 in that the project consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of the existing or former use.

NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Cotati hereby takes the following actions:

1. Accepts the contract work performed on the 2025 Street Improvement Project; and

2. Directs the City Clerk to record the attached Notice of Completion for said contract work within 15 days of the date of resolution and provide a copy to the contractor (Cal. Civil Code §9204); and

3. Authorizes the City Manager to release any remaining contract retention to American Asphalt Repair & Resurfacing Co, Inc. thirty-five (35) days after the recordation of the Notice of Completion, provided that no liens or stop notices have been filed against the Project.

IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on September 9, 2025, by the following vote, to wit:

Kevin Patterson, Deputy City Clerk
City of Cotati
201 W. Sierra Avenue
Cotati, CA 94931-4217

NOTICE OF COMPLETION
(ACCEPTANCE OF IMPROVEMENTS)
NOTICE IS HEREBY GIVEN THAT:

1. The City Council of the City of Cotati has accepted the improvements at the City Council meeting of September 9, 2025 for the 2025 Street Improvement Project.

The nature of the City of Cotati’s interest, as owner, of the property is as public right-of-way.

2. The improvements were completed and deemed complete by the Director of Public Works/City Engineer on June 16, 2025.

3. The name of the original contractor for the work of improvement was American Asphalt Repair & Resurfacing Co, Inc for a total constructed amount of $552,082.32.

4. The Contractor has provided the City with a maintenance bond and guaranty in the amount of 10 percent of the construction contract amount ($55,208) for a period of one (1) year from the date of City Council acceptance of the improvements.

5. This Notice of Completion constitutes the City’s acceptance of the improvements for this project.

I am the City Engineer/Public Works Director for the City of Cotati, a Municipal Corporation. I make this verification on behalf of the City of Cotati. I have read the Notice and know its contents. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Dated: _________________ ___________________________
Craig A Scott
City Engineer/Public Works Director
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Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: SECOND READING OF AN ORDINANCE CONSOLIDATING

INFLATIONARY INDICES FOR DEVELOPMENT IMPACT

FEES (DIF), ADJUSTING TIMING OF DIF PAYMENTS ON

RESIDENTIAL PROJECTS, AND MODIFYING PARK IN LIEU

LANGUAGE TO BE CONSISTENT WITH THE ADOPTED DIF
NEXUS STUDY.

Date: September 9, 2025
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council conduct a second reading and adopt the attached ordinance consolidating inflationary indices for Development Impact Fees (DIF), adjusting timing of DIF payments on residential projects, and modifying the Park in Lieu DIF language to be consistent with the adopted DIF nexus study.

Background
On August 12, 2025 the City Council introduced the attached ordinance, which modifies existing municipal code to consolidate the various inflationary indices for development impact fees (DIFs), modifies the timing of collection of DIFs for residential projects to conform to state law, and updates the Park in Lieu DIF to be consistent with the Parks and Recreation DIF adopted by the City Council. This item is the second reading of the ordinance.

Analysis/Discussion
Inflationary Index
The City’s DIFs have been adopted over time, each with their own inflationary indices, some of which are no longer published or use different time periods to measure inflationary changes. The attached ordinance uses the Construction Cost Index (CCI) for San Francisco as the inflationary index, to be used for all development impact fees in the fee schedule. For simplicity of administration, this uses the prior twelve-month period, based on a calendar year (January87 of 105 December). Inflationary adjustments would be applied to the updated fee schedule, effective the following July.

Deferred Collection of Residential Impact Fees
Historically, all impact fees were collected at the time of building permit issuance. This simplified administration of the fees by collecting them all at the same time at the issuance of the building permit rather than spreading payment across the various phases of a construction project. Collecting fees at different points during construction creates the possibility of missed fee collections, which is why it is typically not done that way. In recent years, the City added the ability to defer some impact fee collection through an agreement approved by the City Council and recorded against the property, which acted as security if the unit sold prior to fee collection (backstopped by the title report to note the fee for inclusion in closing).

In the on-going effort to encourage housing construction in California, State Senate Bill (SB) 937 (Wiener, 2024) in most cases prohibits local agencies from imposing fees on ”designated residential development” projects until the final inspection or certificate of occupancy, whichever occurs first. Designated residential development includes 100% affordable projects, SB 35 projects,” by right” projects, low barrier navigation centers, density bonus projects, or projects with 10 or less units. For example, water and sewer connection fees can’t be collected until the water and sewer connections are turned on. Traffic impact fees can’t be collected until occupancy is granted and so forth. It is still permissible for a local agency to require that an agreement be recorded against the property to ensure collection no later than occupancy.

Responding to this state law and for administrative efficiency, the City now offers such fee deferral agreements to all residential projects, by right. Commercial projects may also request such fee deferrals, however these agreements would require City Council approval under current practice.

Park in Lieu Ordinance
With the adoption of the Park and Recreation DIF, it shifted the legal basis of the fee from a Quimby Act fee to a Mitigation Fee Act fee. Essentially, the Mitigation Fee Act fee can be used for any type of residential development, but can only be used for park and recreation facility expansions (not maintenance of existing facilities). This shift was made because the vast majority of planned park improvements over the 8-year life of the DIF Nexus Study are capacity expanding projects. Additionally, the existing ordinance language anticipated a per unit DIF, which had to be modified to work with the new legally compliant square footage-based DIF.

Financial Considerations
There are no direct financial considerations associated with adoption of the ordinance. The uniform inflationary index will likely vary slightly from the various prior indices used, resulting in slightly different inflationary percentages applied to the DIFs. Additionally, the requirement to record Fee Deferral Agreements on all residential projects will result in some additional staff time, but it required by state law and can often be covered by development deposits for nonministerial projects. 88 of 105
Environmental Issues
The proposed ordinance modifying the inflationary index for DIFs, updating the fee deferral language and amending the park in lieu language will not have any effect on the environment.

Where it can be determined with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to California Environmental Quality Act (CEQA) review. This general rule can be applied to activities which could be subject to the CEQA process, but which logic dictates should not be subject to CEQA review. Therefore, based on the information provided above, the proposed resolution is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines in that there is no possibility that the activity may have a significant impact on the environment. 89 of 105
ORDINANCE NO.

AN ORDINANCE OF THE CITY OF COTATI COUNCIL ADDING CHAPTER 4.20 (DEVELOPMENT IMPACT FEE INFLATIONARY ADJUSTMENTS) TO THE COTATI MUNICIPAL CODE AND AMENDING CHAPTERS 4.14 (DEVELOPMENT IMPACT FEE DEFERALS), 17.31 (AFFORDABLE HOUSING REQUIREMENTS),

13.03 (WATER SYSTEM RULES AND REQUIREMENTS), 13.42 (SEWERS - CHARGES) AND 17.16 (DEDICATIONS AND EXACTIONS)
WHEREAS, the City has adopted various Development Impact Fees (DIF) over many years, often using different inflationary indices or time periods for annual adjustments; and WHEREAS, over time, some adopted inflationary indices no longer exist, requiring staff to seek out and utilize successor indices that best match the originally adopted index; and WHEREAS, the City Council wishes, to the greatest degree possible, to have DIFs set to adjust annually using a single index and uniform time period, utilizing a construction cost index that is in widespread use and unlikely to be phased out in the near future; and WHEREAS, the City Council therefore desires to use the Construction Cost Index, published by Engineering News Record, for San Francisco; and WHEREAS, the existing Park in Lieu fee uses a per unit cost calculation; and WHEREAS, in accordance with Assembly Bill 602, impact fees must now be calculated to be proportionate to the square footage of the project, necessitating amendments to the existing Cotati municipal code (Chapter 17.16); and
WHEREAS, on August 12, 2025, the City Council held a duly noticed public hearing and adopted a new Parks and Recreation Fee in accordance with the Mitigation Fee Act and introduced the ordinance herein; and
WHEREAS, where it can be determined with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to California Environmental Quality Act (CEQA) review. This general rule can be applied to activities which could be subject to the CEQA process, but which logic dictates should not be subject to CEQA review. Therefore, based on the information provided above, the proposed resolution is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines in that there is no possibility that the activity may have a significant impact on the environment.

NOW THEREFORE THE CITY COUNCIL OF THE CITY OF COTATI DOES ORDAIN AS FOLLOWS:

SECTION 1: Recitals.
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The foregoing recitals are true and correct and are incorporated into the findings herein.

SECTION 2: Amendment to the Cotati Municipal Code.

Chapter 4.14 (Development Impact Fee Deferrals) is hereby amended as follows:

Chapter 4.14

DEVELOPMENT IMPACT FEE DEFERRALS

4.14.010 Deferral of fees.

A. The provisions of this chapter are not applicable to fees for services or equipment.

B. The deferral of the payment of any city impact fee from the time payment is otherwise required is not permissible except as provided in this section.

1. Only those development fees defined as such by California Government Code Section 66000(b), as may be amended or revised from time to time, and including any successor statutes or provision, are subject to deferral. Development fees deferred under this subsection B shall not be deferred for more than two years from the date when fees were otherwise due and payable. Fee deferral agreements under this subsection B shall not be assignable except in the discretion of the city attorney and with prior written consent.

2. Fee amounts of less than ten thousand dollars may not be deferred. Interest will be charged on all amounts deferred on non-residential permits in an amount equal to the average annual rate of interest earned by the city on the investment of pooled funds for the prior fiscal year. Deferral of fees for residential permits will not accrue interest.

C. An application for fee deferral under this chapter shall be filed with the department of community development at least sixty days prior to the date when the fees would otherwise be due.

D. Any deferral of fees under this title shall be documented by written agreement in a form approved by the city attorney. Deferral of fees for non-residential permits and shall be subject to prior approval by the city council. All fee deferrals shall be secured by a deed of trust and such other security as may be required by the city attorney. The applicant shall pay all title insurance, recording and any other processing fees. The unpaid fee balance, calculated at the rate in effect at the time payment was otherwise required, shall be due and payable in full upon the sale or any other transfer of the property offered as security for payment of the fee, or upon the placement of long-term financing for the project, or at such other time as may be expressly provided in the written agreement. The fee deferral agreement shall include provisions imposing penalties for delinquent accounts. The city may require such other terms and conditions for the fee deferral as it deems necessary to protect the city’s interests.
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E. The council will be regularly advised of the total amount of fee deferrals that are outstanding and the status of outstanding fee deferral accounts. (Ord. 863 § 3(part), 2016).

4.14.020 Time of payment.

Unless project conditions of approval or other provisions of the Cotati Municipal Code establish a different time of payment, all development impact fees shall be paid to the city no later than at the time of final inspection or certificate of occupancy, as applicable and whichever comes first, excepting payment of school impact fees and other fees not within the jurisdiction of the city which shall be paid at the time of building permit issuance, or, if no building permit is required, fees shall be paid upon the approval of a use which requires a use permit or other permit or approval authorizing a change in use. (Ord. 863 § 3(part), 2016).

Chapter 4.20 (Development Impact Fee Inflationary Adjustments) is hereby added as follows:

Chapter 4.20

DEVELOPMENT IMPACT FEE INFLATIONARY ADJUSTMENTS

4.20.010 Inflationary Adjustments
Unless stated otherwise in this code, all development impact fees shall be increased or decreased annually by the percentage change in the Engineering News Record Construction Cost Index for San Francisco for the prior calendar year (January-December). The in-lieu fee shall be automatically adjusted, and a new schedule published effective July 1st of each year. This adjustment will offset the effects of inflation related to construction cost increases or deflationrelated cost decreases. If the Construction Cost Index is discontinued, the City Manager shall use a comparable index for determining the inflationary changes in construction.

Chapter 17.31 (Affordable Housing Requirements) is hereby amended as follows:

Chapter 17.31

AFFORDABLE HOUSING REQUIREMENTS

17.31.050 In-lieu fees.

A residential development of nine or fewer units may comply with the requirements of this chapter by paying an in-lieu fee as established by council resolution, as it may be amended from time to time. Inflationary adjustments shall be conducted in accordance with Chapter 4.20 (Inflationary Adjustments of Development Impact Fees) of this code.The council may annually review the fee and may, based on the review, adjust the fee. For any annual period during which the council does not review the fee authorized by this section, fee amounts will be adjusted once 92 of 105
by the city manager based on the Construction Cost Index. (Ord. 930 § 5, 2024; Ord. 766 § 2 Exh. A (part), 2004).

17.31.115 Nonresidential affordable housing linkage requirements.

E. Affordable Housing In-Lieu Fee. An applicant may choose to pay a fee in lieu of providing the affordable housing units required by this section.

1. Determination of Fee. The amount of the in-lieu fee shall be established by resolution of the city council. Inflationary adjustments shall be conducted in accordance with Chapter 4.20 (Inflationary Adjustments of Development Impact Fees) of this code. Thereafter, beginning on January 1, 2008, the fee shall be increased or decreased annually by the percentage change in the Construction Cost Index for the prior year, as reflected in the third quarter Engineering NewsRecord published in November of each year. The in-lieu fee shall be automatically adjusted, and a new schedule published by the director of planning on January 1st of each year. This adjustment will offset the effects of inflation related to construction cost increases or deflationrelated cost decreases. If the Construction Cost Index is discontinued, the director shall use a comparable index for determining the changes in the median home costs for Sonoma County.

The fee shall be periodically reviewed and updated as required at least every two years to reflect any changes in the funding gap for a low-income household.

Chapter 13.03 (Water System Rules and Requirements) is hereby amended as follows:

Chapter 13.03

WATER SYSTEM RULES AND REQUIREMENTS

13.03.210 Water connection fees.

A. The amount of the connection fee shall be established by resolution of the city council.

Inflationary adjustments shall be conducted in accordance with Chapter 4.20 (Inflationary Adjustments of Development Impact Fees) of this code. Any single-family homes, planned unit developments, condominiums and multiple-family projects are charged connection fees per meter size, except for meters serving both domestic demands and the needs of fire suppression systems. If meters are oversized for serving a fire suppression system, in addition to domestic demands, the service shall be charged connection fees for the equivalent meter size calculated to adequately meet domestic demand, as approved by the city engineer, and documented in the utility account. In no case shall the connection fee be less than the equivalent of a three-quarterinch meter. Industrial and commercial uses are charged connection fees per meter size.

Connection fees are established by resolution of the city council.

1. Each year, commencing on July 1, 2013, and continuing thereafter on each July 1st, the water connection fee shall be adjusted in proportion to the change in the ENR (Engineering News93 of 105 Record) Construction Cost Index for San Francisco over the prior year. The base ENR San Francisco CCI is equal to ten thousand three hundred eighty-eight and eighty-four-hundredths (June 2013).

Chapter 13.42 (Sewers - Charges) is hereby amended as follows:

Chapter 13.42
SEWERS – CHARGES

13.42.020 Connection fees.

The amount of the connection fee shall be established by resolution of the city council.

Inflationary adjustments shall be conducted in accordance with Chapter 4.20 (Inflationary Adjustments of Development Impact Fees) of this code.

Connection fees are authorized and are charged to recover the following costs:

A. Construction and/or inspection of the physical connection to the public sewer; B. Prior and estimated future outlays by the city for providing sewage collection and treatment capacity utilized to serve the premises. (Ord. 462 § 2(part), 1988).

Chapter 17.16 (Dedications and Exactions) is hereby amended as follows:

Chapter 17.76

DEDICATIONS AND EXACTIONS

17.76.030 Park land dedications and fees.

A. Purpose. This section provides for the dedication of land and/or the payment of fees to the city for park and recreational purposes. as a condition of the approval of a tentative map. This section is enacted as authorized by the provisions of Chapter 4, Article 3 of the Map Act, also known as the “Quimby Act.”
B. Applicability.

1. Land Dedication and/or Fee Payment Required. As a condition of tentative map approval, the subdivider shallresidential projects shall dedicate land and/or pay a fee, at the option of the council, in compliance with this section for the purpose of developing new or expanding rehabilitating existing park or recreation facilities. to serve the subdivision.

2. Exemptions. The provisions of this section do not apply to industrial or commercial subdivisionsprojects or those non-residential portions of mixed-use projects., condominium 94 of 105
projects or stock cooperatives which consist of the subdivision of airspace in an existing apartment building which is more than five years old when no new dwelling units are added, or to any other subdivision exempted by Map Act Section 66477.

C. Amount of Parkland Required.

1. General Standard. It is found and determined that the public interest, convenience, health, welfare, and safety require that one acre of property for each two hundred persons residing within this city be devoted to neighborhood and community park and recreational purposes.

2. Dedication Requirement for Residential Subdivisions. The amount of contiguous acreage required to be dedicated by a residential subdivider developerfor park and recreational purposes shall be based upon the number of dwelling units expected in the subdivision. The required dedication shall be computed using the following formula:

X = .005(U)(P)
Where:

X = Amount of parkland required, in acres.

U = Total number of approved dwelling units in the subdivision.

P = 3.104 for detached single-family dwellings;

2.438 for attached single-family dwellings;

1.664 for duplexes, and multifamily dwellings containing four or fewer dwelling units;

2.107 for multifamily dwellings containing five or more unit; and

1.738 for mobilehomes.

D. Formula for Fees in Lieu of Land.

1. If the entire parkland obligation for a proposed residential subdivision project is not satisfied by dedication in compliance with subsection C of this section, the subdivider developer shall pay a fee to the city in lieu of dedication. , as a condition of tentative map approval. To the extent that the parkland obligation cannot be met, the total The fee shall equal the acreage of parkland obligation derived from the formula in subsection C of this section shall be calculated, less the amount of parkland, if any, offered for dedication by the subdividerdeveloper. The remaining parkland required shall be used in the formula in subsection C to determine the number of units 95 of 105
of unmet need. The average square footage of all conditioned spaces in the residential portion of the development is then multiplied by the number of units of unmet need to determine the total square footage and remaining dedication requirement to be paid through in-lieu fees., times the average per-acre fair market value for the appropriate park planning area, plus twenty percent toward the cost of off-site improvements (e.g., utility line extensions).

2. The amount of the in-lieu fee shall be established by resolution of the city council.

Inflationary adjustments shall be conducted in accordance with Chapter 4.20 (Inflationary Adjustments of Development Impact Fees) of this code. For purposes of determining the required fee, the term “fair market value” shall mean the market value of the land as determined by the staff of the city, and approved by the council, immediately prior the receipt of the final map by the council. The subdivider shall notify the city of the expected submittal date of the final map at least six weeks prior to the submittal of the final map to the department, to permit the city to select a certified land appraiser and prepare an appraisal. The subdivider shall pay the city’s costs for an independent appraiser. If more than one year elapses from the date that the final map is approved by the council and the date the subdivider obtains their first building permit, the city will prepare a new appraisal and will bill the subdivider for the cost of reappraisal. Any in-lieu fees remaining unpaid after the one-year period shall be based on the new appraisal.

3. If the subdivider developer or city staff object to the valuationdedication, they may appeal the determination in compliance with Chapter 17.84 (Appeals); provided that the burden of proof on all issues shall lie with the developersubdivider.

E. Fees Only. Only the payment of fees shall be required in subdivisions of fifty parcels or less, except that when a condominium project, stock cooperative, or community apartment project exceeds fifty dwelling units, dedication of land may be required even though the number of actual parcels may be less than fifty.

FE. Criteria for Requiring Dedication and Fees. In subdivisions of over fifty lots, tThe city may require the subdivider developer to dedicate both land and pay a fee, as follows:

1. Determination of Land or Fee. Whether the city accepts land dedication or elects to require payment of a fee in lieu thereof, or a combination of both, shall be determined by consideration of the following:
a. The general plan, and the compatibility of dedication with the general plan; b. Topography, geology, access, size, shape and the location of land in the subdivision available for dedication;
c. Feasibility of dedication; and
d. Availability of previously acquired park property.
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3. Procedure for Determining Land or Fee. The review authority shall determine whether the subdividerdeveloper shall dedicate land, pay in-lieu fees, or provide a combination of both, at the time of tentative map approval. The determination of the review authority shall be based on a report and recommendation from the director. The recommendation by the director and the action of the review authority shall consider the factors in subsection (EF)(1) of this section, and shall include the following:
a. The amount of land required;
b. Whether a fee shall be charged in lieu of land;
c. Whether land and a fee shall be required;
d. The location and suitability of the park land to be dedicated or use of in-lieu fees; and e. The approximate time when development of the park or recreation facility shall commence.

The determination of the city as to whether land shall be dedicated, or whether a fee shall be charged, or a combination thereof, shall be final and conclusive.

4. Land and Fees. A requirement for both land dedication and fee payment shall comply with the following standards:
a. When only a portion of the land to be subdivided developed is proposed in the general plan or applicable specific plan as the site for a local park, that portion shall be dedicated for local park purposes, and a fee computed as provided by subsection D of this section shall be paid for any additional land that would have been required to be dedicated by subsection C of this section. b. When a major part of the local park or recreational site has been acquired by the city and only a small portion of land is needed from the subdivisiondeveloper to complete the site, the remaining portion shall be dedicated, and a fee computed as provided by subsection D of this section shall be paid in an amount equal to the value offor the land that would otherwise have been required to be dedicated by subsection C of this section. The fees shall be used for the improvement of the existing park or recreational facility serving the subdivision.

5. Credit for Improvements. If the subdivider developer provides park and recreational improvements on dedicated land, the value of the improvements together with any installed equipment shall be a credit against the required fees or land.

FG. Suitability of Land to be Dedicated. Each park site proposed for dedication in compliance with this section shall be physically suited for the intended use.

1. Land which is made part of a park site for subdivision design purposes, but which is physically unsuited for park use, shall not be considered when calculating the area of the park site provided in compliance with this section. The park space provided shall be calculated from 97 of 105
the road rights-of-way and interior property lines abutting the site, and not from any abutting roadway centerline.

2. Land intended for other than trail use shall have a maximum slope of three percent. If necessary, the site shall be graded by the subdividerdeveloper to achieve this slope, in compliance with plans approved by the city. Land with an average slope of more than three percent may be counted as part of the park dedication requirement where the review authority determines that special circumstances exist that would make the acceptance of the land in the public interest. The amount of credit against the park obligation in these cases shall be calculated as shown in Table 7-2. Greater credit for sites in excess of three percent slope may be granted in the sole discretion of the review authority, where the review authority determines that a site contains an exceptional visual, biotic, or other natural resource.

Table 7-2
Limit on Credit for Dedication of Sloping Property
Park Site Slope Credit Against Park Obligation
0 to 3% 100%
More than 3%, up to 5% 80%
More than 5%, up to 10% 60%
More than 10%, up to 15% 20%
Over 15% 0%

3. If the council determines that any of the land proposed to be dedicated is not suitable for park use, it may reject all or any portion of the land offered, and in that event the subdividerdeveloper shall instead pay a fee in compliance with subsection D of this section.

GH. Conveyance of Land, Payment of Fees. Real property being dedicated for park purposes shall be conveyed by the parcel or final map in fee simple absolute, to the city by the subdividerdeveloper, free and clear of all encumbrances except those which, in the opinion of city attorney, will not interfere with use of the property for park and recreational purposes, and which the council agrees to accept. The amount of required fees shall be deposited with the city at the time of building permit, unless deferred in accordance with Chapter 4.14 of this code. at the time of submittal of a parcel or final map. The fees shall be held by the city until the map is recorded, or the time for recordation expires. The subdivider developer shall provide all fees and 98 of 105
instruments required to convey the land, and title insurance approved by the city attorney in favor of the city in an amount equal to the value of the land. (Ord. 766 § 2 Exh. A (part), 2004).

SECTION 3. Severability.

If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portion of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and every section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared unconstitutional or invalid.

SECTION 4. Effective Date.

This ordinance shall take effect thirty (30) days after its adoption, pursuant to the California Government Code.

SECTION 5: Publication.

The City Clerk shall cause this ordinance to be published and/or posted as required in Section 36933 of the California Government Code.

IT IS HEREBY CERTIFIED that the foregoing ordinance was introduced at a regular meeting of the City Council of the City of Cotati held on August 12, 2025, by the following vote, to wit:

RESULT:

MOVER:

SECONDER:

AYES:

IT IS HEREBY CERTIFIED that the foregoing ordinance was duly adopted at a regular meeting of the City Council of the City of Cotati held on August 26, 2025, by the following vote, to wit:

RESULT:

MOVER:

SECONDER:

AYES:
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Approved:___________________________
Mayor
Attest:______________________________
Kevin Patterson, City Clerk
Approved as to form:
______________________________
City Attorney
This document is a true and correct copy of Ordinance Number ### and has been published or posted pursuant to law. California Government Code § 40806
______________________________
Kevin Patterson, City Clerk
100 of 105
Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: FINALIZE DESIGN OPTION FOR THE LAGUNA DE SANTA ROSA CLASS 1 PATHWAY MAINTENANCE PROJECT
Date: September 9, 2025
Written by: Henry Babits, Engineering Technician
Recommendation
It is recommended the City of Cotati City Council provide direction to staff on the desired pathway surface for the Laguna de Santa Rosa Class 1 Pathway between Gravenstein Way and the pedestrian bridge adjacent to Matteri Circle.

Background
On November 26, 2024, City Council approved an Agreement with Moe Engineering to provide engineering design services for the maintenance and restoration to Cotati’s Laguna de Santa Rosa Class 1 Multi-Use Trail from Gravenstein Way to East Cotati Avenue which is approximately 2,200 feet and varies from 8 feet to 10 feet wide. At that time, the City Council directed staff to return with recommendations for the pathway material before finalizing design, with further direction to explore the feasibility of constructing a gravel pathway next to the existing asphalt pathway.

Class 1 Multi-Use Paths are fully separated bike and pedestrian paths from roadways and are typically parallel to a street, waterway, and/or other alignment through open space or undeveloped areas. Interactions with vehicles are limited to street crossings. Although they do not wear down as quickly as roadways, pathways do degrade over time and their surfaces can get uneven creating a hazard for the bicyclists and pedestrians that use them. Therefore, similar to roadways, pathways periodically are in need of spot repairs or restoration. The City has created a capital improvement program to address this need.

Analysis/Discussion
During and subsequent to Council’s action on the design contract, some residents have provided 101 of 105
input suggesting the asphalt pathway be replaced by a more “natural” pathway similar to the section of the Laguna de Santa Rosa trail south of E Cotati Ave. Therefore, staff evaluated the existing surfaces and evaluated alternative, as described further below.

Based on feedback from the public works crew, the pathway between Benson Lane and Pocket Park is holding up well with a level surface and has required infrequent maintenance by the City.

Maintenance in this segment of pathway primarily consists of weed cutting along the edges of the pathway and maintenance costs are typically limited to fixing drainage problems and repairing erosion by replacing and recompacting the aggregate. This segment of pathway was originally constructed of compacted class 2 road base. Due to the lower elevation of this trail relative to the creek, it experiences periodic flooding during the winter, which leaves a deposit of fines and silt on the trail when the flood waters recede. Over time, this has given the trail the appearance of a compacted dirt trail that can accommodate pedestrians and wheeled vehicles (bikes, etc.), but at lower speeds than on a concrete or asphalt surface.

The pathway between Gravenstein Way and E. Cotati Avenue is paved asphalt and, although there are sections in good condition, portions of the asphalt trail are in poor condition due to soil expansion/contraction and tree roots. This results in a trail with cracks and uneven surfaces, can be hot on summer days, and has a more urban trail feel than the more natural trail feel south of East Cotati Avenue. While the asphalt surface allows for higher speed vehicles (road bikes, scooters, e-bikes, etc.), it is not generally repairable by City crews and requires contracting with contractors that possess the specialty equipment to repave/seal the pathway.

Natural surfaces are allowable within ADA standards providing that the surface is firm and stable wherein firm and stable means that the surface is resistant to deformation by indentation and is not permanently affected by weather conditions, sustaining normal wear and tear from expected uses between maintenance cycles. The following materials are listed as likely to provide a firm and stable surface: crushed rock, rock with broken faces, a rock mixture containing a full spectrum of sieve sizes, hard rock, rock that passes through a ½-inch (13- millimeter) screen, rock material that has been compacted into 3- to 4-inch-thick layers, material that is moist before it is compacted, and material that is compacted with a vibrating plate compactor, roller, or by hand tamping. These pathway construction types match or closely resembles the construction methods used for the Laguna trail South of E Cotati Avenue.

Outdoor recreation paths made of natural material must not exceed a cross-slope ratio of 1:33 (3% grade); however, if the path is paved, it must not exceed 1:48 (2% grade). Since the Laguna trail is currently paved, it generally meets the standard for a natural trail with no significant regrading required to meet ADA compliance.

The purpose of the proposed Project is to renew the existing paved pathway to provide a smooth all-weather public pathway.

Repair and resurfacing alternatives include the following:

Option 1: Asphalt Repair, Resurfacing and Sealing. Asphalt repairs include digging out and repairing failed asphalt locations along the pathway, asphalt resurfacing includes paving a new 102 of 105
asphalt surface layer over the existing asphalt pathway segments, and sealing includes pavement crack sealing along with a slurry seal over the existing asphalt pathway. The condition of the pathway is not uniform along the segment of the pathway from Gravenstein Way to East Cotati Avenue. There are some locations where failing/deteriorating asphalt will require spot repairs followed by a new asphalt overlay and other locations where there are few locations of failing asphalt that only require some degree of crack sealing and slurry seal.

Option 2: Removal of existing asphalt surfacing and replacement with natural pathway construction. The first step is removing the existing asphalt pathway and installation of a new pathway using all new aggregate material similar to pathway south of East Cotati Avenue. This process would require building up the rock base, if necessary, and installing a rock mixture for the surface level. In some areas of the pathway, it may be necessary to install wide metal borders where the ground slopes away from the edges of the pathway.

Staff also explored a third option of constructing a natural surface trail next to an asphalt trail (referred to as a ”longitudinally split pathway”). Multiuse trails (for bicycles and pedestrians) are typically 10 feet wide paved with asphalt with 2-foot rock shoulders for a total width of 14 feet. The existing asphalt pathway from Gravenstein Way to the bend where the existing garbage can is placed (by the resident) is essentially 8 feet wide, restricted by a retaining wall on one side and the creek fence and steep slope on the other. The pathway from that bend to the bridge by Matteri Circle is a bit wider, essentially 9 feet of asphalt, but with some space adjacent. This may be able to be widened with a 3’ adjacent gravel path next to the asphalt path, but would require a short retaining wall and fencing in places due to the steep slope down to the creek.

A longitudinally split pathway would have the advantage of separating speeding bicyclists from strolling walkers, but there is not sufficient space to accommodate both trails for a significant portion of the trail length. Where there is more space, it will be expensive and challenging to fit a gravel trail next to an asphalt pathway given the retaining walls and fencing required. Even then, the space could only accommodate an 8-foot asphalt trail and 3 to 4 foot gravel pathway.

Therefore, staff did not find this to be a viable option due to the limited pathway width, construction complexity, and maintenance.

The preliminary estimated construction costs for Options 1 and 2 are $104,000 and $256,000, respectively. There have been additional considerations since these estimates were prepared including widening the pathway so these costs are provided for comparative purposes only. The first option uses conventional paving repair and slurry seal treatments and uses the existing structural base and much of the existing pathway that is in good condition, can be treated with slurry seal. The second option requires removal of the existing asphalt pathway and installation of a new pathway using all new aggregate, similar to the pathway south of East Cotati Avenue.

Despite the higher construction cost, staff recommends Option 2 for the Laguna pathway (from the bridge at Matteri Circle to Gravenstein Way), as it expected to have a lower long term maintenance cost, is easily repairable by City crews, is ADA compliant and will create a more natural environment along the creek. Note that this material is not suited for road bikes or other vehicles at higher speeds, so they would need to slow down or potentially use the surface streets.

Given the narrow width of the pathway, this is desirable for pedestrians but may not be 103 of 105
appreciated by some cyclists. Finally, this segment of pathway doesn’t flood, so although it will naturally wear, it won’t be covered in fines and silts like the segments south of East Cotati Avenue, so will likely retain an aggregate surface appearance rather than a ”dirt” pathway.

Both options will include new garbage/recycle cans along the creek, at Gravenstein Way and at the pathway to Wilford Circle.

Financial Considerations
This project was included in the City’s FY 2025/26 Budget with a total budget of $150,000.

Design, bidding, and construction management services are not to exceed $45,057, leaving $104,943 for the construction contract.

With an estimated construction cost of $245,000, Option 2 exceeds the Project’s budget and additional funds of at least $140,057 would be needed. Option 1 has an estimated construction cost of $104,000 which is just below the available construction budget and no budget amendment would be needed. Following City Council direction, the project team will prepare design and bidding documents, bid the Project, and return to City Council for award of the construction contract with a request for additional appropriation of funds.

Environmental Issues
This action is found to qualify for a Class 1 Categorical Exemption under CEQA Section 15301 in that the project consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of the existing or former use. 104 of 105
Cotati City Council
Agenda Staff Report
Item type: INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED To: City Council
Subject: INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED Date: September 9, 2025
Written by: Kevin Patterson, City Clerk
Recommendation
Information or written comments pertaining to this meeting, and which was received after the agenda was posted, is attached below.

Pursuant to City Council Policy 2025-03: City Council Rules section IV A., written Communications, interested persons or their authorized representative may address the Council by written communication on any matters concerning the City’s business, or any matters over which the Council has control.

1. To be considered for inclusion in the agenda packet, such written communication shall be delivered to the City Clerk no later than 11:00 a.m. of the Wednesday the week preceding the regular Council meeting for which such written communication is intended.

2. If received after the above date and time, but no later than noon the day before the meeting, written communications received by the City Clerk shall be posted on the website by the end of that day and notification provided to the electronic Agenda mailing list by the end of the day. All written communications received by the City Clerk by 5 pm on the City Council meeting day shall be made available to the City Council and public at the City Council meeting.

City Council Policy 2025-03 is available at the online meeting portal at www.cotaticity.gov or by request from the City Clerk at 707-665-3622 or [email protected]. 105 of 105

Cotati City CouncilSeptember 9, 2025

Cotati City Council
September 9, 2025