T 800.755.6864 | 66 Franklin Street, Suite 300, Oakland, California 94607 | www.willdan.com 1 August 5, 2025
Mr. Damien O’Bid
City Manager
City of Cotati
201 W. Sierra Ave
Cotati, CA 94931
Re: Letter Proposal to Conduct an Affordable Housing and Commercial Linkage Fee Study for the City of Cotati
Dear Mr. O’Bid:
Per our discussion, Willdan Financial Services (“Willdan”) is pleased to present this proposal to the City of Cotati (“City”) to conduct an Affordable Housing and Commercial Linkage Study.
Work Plan
Our proposed work plan, described in detail by task, is provided below. We want to ensure our scope provides quality and clarity and is responsive to the City’s needs and specific local circumstances. We will work in concert with the City to adjust the scope as needed during the course of the study.
Task 1: Identify and Resolve Policy Issues
Objective: Define project goals and objectives; outline project and management approach; identify roles and responsibilities; and confirm scope and schedule.
Description: Review agency documents related to affordable housing, housing supply, and commercial development. Bring policy issues to City staff’s attention, as appropriate, during the project and seek guidance prior to proceeding. Potential policy issues include.
Meeting: One meeting to initiate the project, discuss data needs, and begin discussion of applicable policy issues.
Deliverables: Information requests, revised project scope and schedule (if needed), and brief summary of policy decisions (if needed).
Task 2: Commercial Linkage Fee Analysis
Objective: Prepare recommended amounts and classifications specific to a housing linkage fee, a fee charged to non-residential development to offset impacts to affordable housing in the City.
Description: Using data from the California Employment Development Department (EDD) and US Census LEHD data, identify employment levels and types by major sector within Cotati. Prepare wage estimates on a sector-by-sector basis using Bureau of Labor Statistics (BLS). Sectors will be summarized by occupational classifications using Standard Occupation Codes (SOC).
Using employment densities for each job type, estimate the number of workers that would be accommodated on a per square foot basis, the percentage of those workers who would form households, and the number of new households that would be formed by income category.
Based on the housing market data in collected as a part of the affordable housing impact fee analyses (Task 3), and the labor market analysis prepared in this task, develop pro forma and determine affordability gap per unit for each income level by industry and occupation. This will be used to determine the per-unit affordability gap by number of households in each job type, by income level to determine linkage fee on a per square foot basis by category of nonresidential development.
Deliverables: Recommended linkage fee schedule.
Affordable Housing and Commercial Linkage Fee Study 2
City of Cotati, CA
Task 3 Affordable Housing Fee Analysis
Objective: Conduct an analysis related to the affordable housing in-lieu fee, charged to residential development.
Description: The goal for the affordable housing in-lieu fees collected from market rate development is to help offset the cost of affordable housing needed as a result of new residential development in the City.
Willdan will prepare a calculation of the maximum justifiable affordable housing fee for residential development in the City. The calculation will be based on the estimated income of new households and the employment generated by expenditures by new residents in the City. Combined with labor market and wage data Willdan will estimate the number of new employees in the City generated by new housing and the degree to which they will require a subsidy to afford housing in the City. Willdan will also evaluate the current City incentives or structures for affordable housing provision, which will include the consideration of incentives or a fee structure that incentivizes the inclusion of affordable housing in a residential or mixed-use development.
The final report (Task 4) will contain an analysis specific to affordable housing fees, current income and housing pricing, and the cost of ownership to establish the effect of the proposed fees on housing affordability.
Deliverables: Analysis will be documented in the Final Report.
Task 4 Calculate Fees and Prepare Report
Objective: Provide technically defensible fee report that comprehensively documents project assumptions, methodologies, and results.
Description: Generate fee schedule to apportion facility costs to individual development projects.
Prepare draft report tables for City staff to review that document each step of the analysis, including schedule of maximum justified fees by facility type land use category.
Following one round of comments from City staff on the quantitative analysis and fee schedules, prepare administrative draft report. Following one round of comments on the administrative draft, prepare public draft for presentation to interested parties, the public and elected officials.
Prepare final report, if necessary, based on one round of comments received on the public draft report.
Deliverables: Draft report tables, administrative draft report, public draft report, final report (if needed), and slide presentation (if needed).
Task 5: Meetings
Objective: The project manager or other necessary Willdan staff will attend project meetings. A project team will attend up to three (3) meetings: one meeting to review the initial project results; one City Council meeting to present the public draft report for review and comment; and one public hearing to present the report for adoption.
Optional: Optional stakeholder and Council meetings may be requested by the City.
Staff Support
To complete our tasks, we will need the cooperation of City of Cotati staff. We suggest that the City assign a key individual to represent the City as the project manager who can function as our primary contact. We anticipate that the City’s project manager will:
▪ Coordinate responses to requests for information;
▪ Coordinate review of work products; and
▪ Help resolve policy issues.
Willdan will rely on the validity and accuracy of the City’s data and documentation to complete the analysis. Willdan will rely on the data as being accurate without performing an independent verification of accuracy and will not be responsible for any errors that result from inaccurate data provided by the client or a third party.
Affordable Housing and Commercial Linkage Fee Study 3
City of Cotati, CA
Project Disclaimer
Willdan is a registered municipal advisory firm with the U.S. Securities and Exchange Commission (“SEC”), as such the City of Cotati represents, acknowledges, and agrees that Willdan is not acting as a “municipal advisor” (as defined by the SEC), to the City, in any capacity as it relates to the project proposed in this Affordable Housing and Commercial Linkage Fee Study proposal.
(i) The City uses, or may use, the services of one or more municipal advisors registered with the SEC to advise it in connection with municipal financial products and the issuance of municipal securities; (ii) The City is not looking to Willdan to provide, and the City shall not otherwise request or require Willdan to provide any advice or recommendations with respect to municipal financial products or the issuance of municipal securities (including any advice or recommendations with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues);
(iii) The provisions of this proposal and the services to be provided hereunder as outlined in the scope of services are not intended (and shall not be construed) to constitute or include any municipal advisory services within the meaning of Section 15B of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations adopted thereunder;
(iv) For the avoidance of doubt and without limiting the foregoing, in connection with any revenue projections, cashflow analyses, feasibility studies and/or other analyses Willdan may provide the City with respect to financial, economic or other matters relating to a prospective, new or existing issuance of municipal securities of the City , (A) any such projections, studies and analyses shall be based upon assumptions, opinions or views (including, without limitation, any assumptions related to revenue growth) established by the City, in conjunction with such of its municipal, financial, legal and other advisers as it deems appropriate; and (B) under no circumstances shall Willdan be asked to provide, nor shall it provide, any advice or recommendations or subjective assumptions, opinions or views with respect to the actual or proposed structure, terms, timing, pricing or other similar matters with respect to any municipal financial products or municipal securities issuances, including any revisions or amendments thereto; and
(v) Notwithstanding all of the foregoing, the City recognizes that interpretive guidance regarding municipal advisory activities is currently quite limited and is likely to evolve and develop during the term of the potential engagement and, to that end, the City will work with Willdan throughout the term of the potential Agreement to ensure that the Agreement and the services to be provided by Willdan hereunder, is interpreted by the parties, and if necessary amended, in a manner intended to ensure that the City is not asking Willdan to provide, and Willdan is not in fact providing or required to provide, any municipal advisory services.
Affordable Housing and Commercial Linkage Fee Study 4
City of Cotati, CA
Project Budget
Based upon the scope of work identified herein, Willdan proposes a fixed fee of $35,500 for the City’s Affordable Housing and Commercial Linkage Fee Study.
Notes
Please note the following:
▪ The fee denoted above includes attendance at three in-person meetings. Attendance at more than three in-person meetings and/or presentations will be billed at our current hourly rates, provided below, and actual expenses. ▪ Comprehensive written responses to resolve conflicts or preparation of more than one set of major revisions to the draft report will be classified as Additional Services and may require additional billing at hourly rates stated in the hourly rate schedule listed below. These additional fees shall only take effect once the fixed fee stated above has been exceeded.
▪ Our fixed fee includes all direct expenses associated with the project. ▪ We will invoice the City monthly based on percentage of project completed. ▪ City shall reimburse Willdan for any costs Willdan incurs, including without limitation, copying costs, digitizing costs, travel expenses, employee time and attorneys' fees, to respond to the legal process of any governmental agency relating to City or relating to the project. Reimbursement shall be at Willdan 's rates in effect at the time of such response.
▪ Optional/Additional Services beyond the listed work plan may be authorized by the City and will be billed at our then-current hourly overhead consulting rates.
Hourly Rates
Provided below is Willdan’s hourly rate table identifying current hourly rates for additional or optional services.
Willdan Financial Services
Hourly Rate Schedule
Position Team Member Hourly Rate
Vice President / Director $310
Managing Principal James Edison $300
Principal Consultant Carlos Villarreal $270
Senior Project Manager $250
Project Manager $210
Senior Project Analyst $150
Senior Analyst David Diiorio $135
Analyst II $120
Analyst I $110
We are excited about this opportunity to use our skills and expertise to serve the City of Cotati. To discuss any aspect of this submittal, please contact Carlos Villarreal directly at (415) 786-0295 or via email at [email protected].
Sincerely,
Willdan Financial Services
Chris Fisher
Vice President/Director