CITY COUNCIL Staff Report
Meeting: April 19, 2022
Subject
Consider a Master Funding Agreement between the City and the Metropolitan Transportation Commission and Supplement One to the Master Funding Agreement accepting grant funds awarded to the City for updating the Heart of the City Specific Plan.
Recommended Action
Adopt Resolution No. _____ (Attachment A) to authorize the City Manager to enter into a Master Funding Agreement between the City and the Metropolitan Transportation Commission; and Consider adopting Resolution No. _____ (Attachment B) to:
Accept the awarded Priority Development Area Planning Grant funds awarded to the City from the Metropolitan Transportation Commission for the Heart of the City Specific Plan update; and Authorize the City Manager to execute Supplement One of the Master Funding Agreement to accept the awarded Priority Development Area Planning Grant funds; and Direct staff to present a consultant agreement regarding the Heart of the City Specific Plan update after the Sixth Cycle Housing Element update has been certified by the California Department of Housing and Community Development.
Discussion
Background
Staff presented the Priority Development Area (PDA) Planning Grant to the City Council in February 2022. The City Council deferred its decision on the acceptance of the grant funding and requested that the item be presented to the Planning Commission for its recommendation as to whether the City should accept the funding from the Metropolitan Transportation Commission (MTC). A second recommended action by staff to Council was to amend the contract of the City’s current Housing Element update consultant, EMC Planning Group, to include work on the Heart of the City (HOC) update in conjunction with their work on the Housing Element update. The City Council also requested the Planning Commission’s recommendation as to whether the City should partner with EMC Planning Group to conduct the HOC Specific Plan update or issue a separate Request for Proposals (RFP) for other consultants. As explained below, the Planning Commission recommends: (1) the acceptance of the PDA Planning Grant; and (2) the issuance of an RFP to select a consultant.
Analysis
Master Funding Agreement
In order to streamline grant funding distribution from MTC, grant recipients are required to enter into a Master Funding Agreement for any competitive and non-competitive MTC funding awarded to the jurisdiction. The agreement would set the main terms and conditions of requirements and obligations of each party, which do not have to be renegotiated every time a grant is awarded to the jurisdiction. Therefore, the Master Funding Agreement would act as an umbrella agreement for competitive grants awarded to the subject jurisdiction from MTC for a period of ten years from execution. If Council authorizes the City Manager to execute the Master Agreement on behalf of the City, it will be effective from fiscal year 2021/22 through fiscal year 2031/32.
Each grant awarded to a jurisdiction from MTC through the 10-year period of the agreement will require a “Supplement” to the agreement. A “Supplement” to the agreement would be executed upon Council acceptance of awarded grant funds and authorization for the City Manager to execute the supplemental agreement. The Supplement will include a project scope of work, along with an estimated budget and payment milestones for project deliverables.
As an example, the City has been awarded a PDA Planning Grant to update the Heart of the City Specific Plan. If the City Council accepts these funds, it would be the first MTC grant awarded to the City under the FY 21/22 – FY 31/32 Master Funding Agreement and would be considered “Supplement One” to the Master Funding Agreement. Any subsequent MTC grants awarded and accepted by the City would require a separate supplement to be authorized and submitted to MTC as part of the Master Funding Agreement.
Essentially, the 10-year Master Funding Agreement and supplements facilitate a streamlined process for grant recipients to receive funding from MTC. Staff is therefore recommending that Council authorize the City Manager to enter into a Master Funding Agreement with MTC (Attachment A). Staff is also recommending that Council adopt a resolution (Attachment B) to accept the PDA Planning Grant funds for the City and to execute Supplement One for the PDA Planning Grant funds.
Heart of the City Specific Plan:
Figure 1. Special Area Map (General Plan, Figure PA-1)Figure 1. Special Area Map (General Plan, Figure PA-1)The HOC Specific Plan was first adopted by City Council in 1995 with the purpose of guiding future development within the Special Area, which spans approximately 596 acres from Highway 85 to the western border of the City of Santa Clara (see figure 1).
Figure 1. Special Area Map
(General Plan, Figure PA-1)
Figure 1. Special Area Map
(General Plan, Figure PA-1)
As part of the City Work Program for fiscal year 2019-2020, City Council directed staff to amend the HOC Specific Plan to include clarification on specific building design and landscaping requirements.
Furthermore, in 2019, in anticipation of the Sixth Cycle Housing Element update, the City issued a Letter of Confirmation for PDA Planning to the Association of Bay Area Governments/Metropolitan Transportation Commission (ABAG/MTC) confirming the City’s intent to complete an amendment to the HOC Specific Plan as well as related rezoning and environmental studies by 2025, in response to a call for Letters of Interest from ABAG/MTC (see Attachment C).
The HOC Special Area is nestled within the City’s only PDA identified in Plan Bay Area 2050 as a “VTA’s Cores, Corridors, and Station Area PDA”. The Final Plan Bay Area 2050 adopted in October 2021 focuses new development in growth areas, particularly in PDAs and in areas with higher quality transit, in an effort to reduce greenhouse gas emissions and to address regional housing needs in line with Assembly Bill 32 and Senate Bill 375.
PDA Planning Grant Program:
In January 2021, MTC invited jurisdictions to submit applications, through its second round of federally funded One Bay Area Grant Program (OBAG 2), for the PDA Planning Grant Program. The purpose of the PDA Planning Grant Program is to provide funding to local jurisdictions to amend specific plans aimed at:
Increasing housing supply (particularly affordable housing) and jobs; Boosting transit ridership and reducing vehicle miles traveled (VMT); Increasing alternative modes of transportation (e.g., walking, bicycling, carpooling and carsharing); and Retaining and expanding community assets and locating key services and retail within the planning area.
Staff applied for the PDA Planning Grant funds based on the prior Letter of Interest submitted to ABAG/MTC in 2019, which indicated the City’s intent to complete the HOC Specific Plan amendment by 2025. In Spring 2021, MTC awarded funding to 12 out of the 32 PDA Planning Grant applications received, including Cupertino which was awarded $400,000. Similar to other grant funds awarded to the City, the PDA Planning Grant funding is reimbursement-based. The Planning Commission recommends acceptance of the PDA Planning Grant.
PDA Planning Grant Scope of Work:
The draft scope of work (Attachment D) for the HOC Specific Plan update under the PDA Planning Grant was prepared, with input from MTC staff, to comply with the PDA Planning Grant Guidance: Planning Process & Elements (Attachment E). The draft scope of work has been updated to incorporate the Planning Commission’s recommendation regarding timing of the work. MTC is currently reviewing these changes as well and staff hopes to get confirmation on whether the changes are acceptable prior to the Council meeting on April 19.
The draft scope of work includes the following tasks, analyses, and documents:
Public Engagement (required per MTC)
Community Involvement Strategy
Community Advisory Council
Technical Advisory Committee
Project Outreach Material
Public Workshops
Additional Engagement Events
Elected & Appointed Official Engagement
Community Assessment & Policy Development (required per MTC) Equity Assessment
Affordable Housing & Jobs Assessment
Mobility Assessment
Community Assets, Services, & Infrastructure Assessment Resilience & Climate Adaption Assessment
Objective Design Standards Assessment (Optional)
Adopted Plan Documents
Specific Plan Update
Environmental Impact Report (EIR)
Plan Adoption, Zoning Code Update, & General Plan Amendment (if needed) It is important to note that to be reimbursed with the PDA Planning Grant funds, the HOC Specific Plan update must incorporate the assessments described above under “Community Assessment & Policy Development.” Additionally, a Community Advisory Council (CAC) and Technical Advisory Committee (TAC) are required under the “Public Engagement” task to inform the planning process and provide technical input throughout the process. The required CAC would be a representative group of residents, local employees, community-based organizations, service providers, and other involved community members in the specific plan area. The role of the CAC is limited to reviewing draft plan materials and informing the planning process through their community experience. The required TAC would be a representative group of local, county, and regional agencies and service providers such as transit agencies, congestion management agencies, air and water quality management districts, and the MTC grant manager. The role of the TAC is limited to reviewing draft plan materials and providing detailed technical input throughout the planning process. Neither the CAC nor the TAC will act as an advisory or decision-making body for the HOC Specific Plan update. Please see Attachment D for additional information.
PDA Planning Grant Consultant:
The Planning Commission recommends that the City issue a separate RFP for a HOC Specific Plan update consultant but that the consultant should not begin working on the update until the Sixth Cycle Housing Element update has been certified by the California Department of Housing and Community Development (HCD).
However, it is important to note that the HOC Specific Plan might need updates and rezoning in conjunction with the Housing Element update. Not only would the identification of some priority sites along the Heart of the City transit corridor support the State’s requirements for meeting greenhouse gas (GHG) targets and the City’s obligations to meet GHG emission goals under Assembly Bill 32 and Senate Bill 375, but it would also be consistent with General Plan Policy LU-1.1 which states that the City “focus higher land use intensities and densities within a half-mile of public transit services, and along major corridors.” Due to the anticipated overlap in scope of work (e.g., community engagement and education, analysis, rezoning, etc.) between the two projects, staff continues to recommend that the HOC update be done in conjunction with the Housing Element update.
PDA Planning Grant Timeline:
MTC requires all tasks and deliverables outlined in the scope of work (Attachment D) to be completed within three years of contract approval. MTC will allow the City until April 30, 2022, to execute the Master Funding Agreement and Supplement One for the PDA Planning Grant. Therefore, the City will have until April 30, 2025 to complete all deliverables of the PDA Planning Grant.
The Planning Commission recommends that the City wait to authorize a consultant for the HOC Specific Plan update until after the Sixth Cycle Housing Element update has been certified by HCD.
A draft schedule with tentative dates is provided below and included in the scope of work (Attachment D).
DELIVERABLE
EXPECTED DATE OF COMPLETION
(Tentative)
Task 1 – Public Engagement
1.1 – Kick-Off Meeting
Fall ’23
1.2 – Community Involvement Strategy
Winter ‘23
1.3 – Project Outreach Materials
Ongoing thru Spring ‘25
1.4 – CAC & TAC Meetings
Ongoing thru Late ‘24
1.5 – Public Workshops & Engagement Events
Ongoing thru Spring ‘25
1.6 – Elected & Appointed Official Engagement
Ongoing thru Spring ‘25
Task 2 – Community Assessment & Policy Development
2.1 – Document Research
Early ‘24
2.2 – Internal Meeting
Early ‘24
2.3 – Policy & Program Recommendations
Spring ‘24
Task 3 – Adopted Plan Documents
3.1 – Administrative Draft
Fall ‘24
3.2 – Draft Specific Plan
Late ‘24
3.3 – Final Specific Plan
Spring ‘25
3.4 – Environmental Analysis
Fall ‘24
3.5 – Internal Meeting
Late ‘24/Early ‘25
3.6 – Public Hearings & Resolutions for Plan Adoption, Zoning Code Amendment, & General Plan Amendment Spring ‘25
Council Referral to the Planning Commission:
On March 22, 2022, Staff brought the item to Planning Commission. After consideration of the materials presented, Planning Commission recommends that City Council accept the awarded $400,000 in PDA Planning Grant funds from MTC. However, Planning Commission also noted that the City’s focus at this time should primarily be on the Housing Element update and recommended (see Attachment F) that a consultant agreement for the Heart of the City Specific Plan update not be authorized until the Sixth Cycle Housing Element update has been certified by HCD.
City Council Questions/Follow up:
At the February Council meeting, Council also asked for information on the questions below. Staff’s responses are in italics:
What is the City’s deadline for accepting the PDA Planning Grant funds from MTC? MTC will allow the City until April 30, 2022, to authorize the Master Funding Agreement and the supplement agreement for the PDA Planning Grant. Therefore, Council’s action on this item must occur prior to April 30, 2022.
What if the City decides to not move forward with accepting the PDA Planning Grant funds from MTC? As noted in the discussion above, staff and Planning Commission recommend that City Council accept the PDA Planning Grant funds to update the Heart of the City Specific Plan. However, if the City elects to not move forward with executing the Master Funding Agreement and/or the Supplement agreement for the PDA Planning Grant by April 30, 2022, MTC will re-allocate the funds to another planning grant with a different agency. Should City Council choose to not accept the PDA Planning Grant funds at this time, the City would continue to be eligible to apply for grant funding when a new funding cycle is opened by MTC in the future.
However, it is important to consider that any future PDA Planning Grant funding application will still need to support the primary goals of the grant to increase housing supply and reduce VMT.
What are the options if the City decides to not partner with an existing vendor for the PDA Planning Grant scope of work? The City can elect to issue a separate RFP for a consultant to update the Heart of the City Specific Plan.
What are the City’s options regarding the timing of when the PDA Planning Grant funds are spent? The City has three years after contract approval to be reimbursed through the PDA Planning Grant funds in accordance with the project scope of work.
Can the PDA Planning Grant funds be applied to the Monta Vista Special Area for the establishment of a Monta Vista Specific Plan? The PDA Planning Grant funds may only be used to amend an existing, or create a new, specific plan in an already established PDA. The HOC Special Area is nestled within the City’s only PDA, which is identified as a “VTA’s Cores, Corridors, and Station Area PDA”. The City has not chosen to nominate the Monta Vista Special Area as a PDA through ABAG/MTC, nor would it likely be eligible for PDA status due to the lack of adequate transportation connections.
How does the scope of work for the PDA Planning Grant differ from a minor amendment to the Heart of the City Specific Plan, such as the amendment proposed as part of the 2019/2020 Work Program? The purpose of the PDA Planning Grant Program is to provide funding to local jurisdictions to amend specific plans within established PDAs to encourage housing development in the PDA and reduce VMT. The full scope of work can be found in Attachment D.
Council’s direction for the amendment proposed as part of the 2019/2020 Work Program was focused on clarification of specific building design and landscaping requirements, such as clarification on street side setbacks and an assessment of street tree types to encourage more native and drought tolerant species.
While the scope of work for the PDA Planning Grant does not match Council’s amendment requests in the FY 2019-2020 City Work Program, some ideas, such as maintaining viable services and retail uses within the HOC area, could be addressed following the analysis and assessments required with the funding.
Can staff provide clarification as to the PDA Planning Grant requirements/goals to increase housing and jobs in an already job heavy/residential deficient corridor? The answer to this question lies in the two bills that were signed into law several years ago – Assembly Bill 32 and Senate Bill 375. Senate Bill 375 (Sustainable Communities and Climate Protection Act) was signed into law in 2008 and resulted from the Global Warming Solutions Act of 2006 (Assembly Bill 32). SB 375 aligns land use and transportation planning to encourage development in transit-accessible area in order to reduce car dependency and GHG emissions. SB 375 also requires State Metropolitan Planning Agencies such as MTC to create a Sustainable Communities Strategy (e.g., Plan Bay Area), that identifies the locations and types of development that are needed to reduce VMT and meet GHG emission targets.
ABAG/MTC’s goal of increasing housing supply (particularly affordable housing) and jobs in transit efficient areas (PDAs), is broad as it is intended to apply to the entire San Francisco Bay Area region. The purpose of a PDA is to encourage the development of jobs and housing near one another to ultimately reduce VMT and GHG emissions. The PDA Planning Grant and associated update to the Heart of the City will rely heavily on the required assessments (see Attachment D), which include an Affordable Housing & Jobs Assessment to identify the composition of jobs and evaluate the affordability of housing in the area to the wages of employees in these jobs. Proposed programs and policies to create a better jobs to housing balance will be informed by the analysis and community engagement process. Furthermore, while no housing element sites have been identified within the HOC area at this time, some of the housing that the City is required to zone for with the Housing Element update could be located within this special area.
Sustainability Impact
No sustainability impact.
Fiscal Impact
The City has been awarded $400,000 in reimbursement-based grant funds from ABAG/MTC through the PDA Planning Grant Program to update the HOC Specific Plan pursuant to Attachment D. The Planning Commission recommends that the City wait to authorize a consultant agreement for the HOC Specific Plan update until the Housing Element has been certified by HCD. By not conducting the HOC Specific Plan update in conjunction with the Housing Element update, it is anticipated that additional funds may be required for the scope of work as there would be no overlap in project funds for tasks such as outreach or data analysis. Staff will return to Council to budget the $400,000 in grant revenue and to process any future budget amendments in conjunction with a proposed consultant scope of work and recommended contract.
Next Steps
Upon authorization from Council, the City Manager will execute the Master Funding Agreement and the Supplement One for the PDA Planning Grant, prior to April 30, 2021. Staff will return to Council following HCD certification of the Housing Element update to present a consultant agreement and any future budget amendments regarding the Heart of the City Specific Plan.
Prepared by: Erika Poveda, Associate Planner
Piu Ghosh, Planning Manager
Reviewed by: Benjamin Fu, Director of Community Development Christopher Jensen, City Attorney
Approved by: Dianne Thompson, Assistant City Manager
Attachments:
A – Council Draft Resolution
B – Council Draft Resolution
C – Letter of Confirmation for Priority Development Area Planning D – PDA Planning Grant Draft Scope of Work
E - PDA Planning Grant Guidance: Planning Process & Elements F – Planning Commission Resolution
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4/23/2018
6 2/1/22 City Council meeting available here: https://cupertino.legistar.com/LegislationDetail.aspx?ID=5394466&GUID=D55B9EB9-9C2F-4B79-8FDF-E9E6BA26779A&Options=&Search= Heart of the City Specific Plan available here: https://www.cupertino.org/home/showpublisheddocument/415/636280426123030000 FY 2019-2020 City Work Program available at: https://www.cupertino.org/home/showpublisheddocument/25486/637084805735570000 PDAs are areas with convenient public transit service prioritized by local governments for housing, jobs, and services.
ABAG/MTC PDA map available at: https://arcg.is/0eyDO80
Final Plan Bay Area 2050 available at: https://www.planbayarea.org/sites/default/files/documents/Plan_Bay_Area_2050_October_2021.pdf 3/22/22 Planning Commission meeting available here: https://cupertino.legistar.com/LegislationDetail.aspx?ID=5527832&GUID=17BECAE1-F29B-4438-90F4-4DA9BFA67711&Options=&Search=