Cupertino City Council
April 16, 2024

CC 04-16-2024

#11

Service-Level Reductions

Presentation
April 16, 2024
Fiscal Year 2024 -25
Potential Service- Level Reductions
CC 04-16-2024 Item No. 11
• On January 17, 2024, staff sought Council
direction on potential service-level
reductions to help resolve the City’s
structural deficit.
• Council provided feedback and directed
staff to provide additional information on
some items.

Background
Objective
Asking for
Council
confirmation on
potential
service level
reductions for
FY 2024-25
Staff will use the
feedback from both
meetings to develop
the FY 2024-25
Proposed Budget,
which will be presented
for discussion in May
and adoption in June
Updated Service-Level Reductions
Operations and Maintenance
Changes from 1/17/2024
Proposed Service-
Level Reduction
1/17/2024
Estimated Budget
Reduction1/17/2024
Updated Proposed
Service-Level
Reduction 4/16/2024
Updated Estimated
Budget Reduction
4/16/2024
Difference
Reduce Crossing
Guard Services
$50,000 This reduction has
been eliminated.
$0 $(50,000)
Crossing guard
funding will be
retained in the
budget per Council
direction.

Reduce Budget for
Internal Audit
$70,000 Reduce Budget for
Internal Audit
$40,000 $(30,000)
Added back one
audit. Total
budgeted cost is
$60,000, down from
FY 2023-24 cost of
$100,000
Infrastructure
Changes from 1/17/2024
Proposed
Service-Level
Reduction
1/17/2024
Estimated
Budget
Reduction
1/17/2024
Updated
Proposed
Service-Level
Reduction
4/16/2024
Updated
Estimated
Budget
Reduction
4/16/2024
Difference
Shift School
District Grounds
Maintenance to
School District
$737,394 This reduction
has been
eliminated.
$0 $(737,394)
This reduction has been eliminated for FY
2024-25.

Shift Street Tree
Maintenance to
Property
Owners
$455,008 Maintenance of
Trees and
Medians
Service Level
Reduction
$200,000 $(255,008)
City would continue to maintain street
trees. New SLR will lengthen tree trimming
cycle from 7 to 10 years and reduce
frequency of median maintenance.

Shift Sidewalk
Maintenance to
Property
Owners
$1,000,000 Maintenance of
Sidewalk, Curb
and Gutter
Service Level
Reduction
$600,000 $(400,000)
City would continue to maintain sidewalks.

New SLR will shift the sidewalk
maintenance focus from removal and
replacement to grinding of tripping
hazards, except in extreme situations.

Potential Service-Level Reductions
Grouping Reductions
1/17/2024
Updated
Reductions
4/15/2024
Operations and Maintenance
Reduce sidewalk, curb, and gutter. Move some Public Works contract services in-house, extending maintenance timelines. Reduce Public Works PT staffing. Shift credit card fees to customers. Remove library extra hours from the base due to available State funding to cover these costs. Various other reductions.
3,080,725 3,000,725
Infrastructure
Reduce funding to CIP of $2M annually for the first 5 years of the forecast. Will utilize the existing fund balance to cover these costs. Lengthen tree trimming cycle, reduce frequency of median maintenance, shift focus of sidewalk maintenance
4,372,402 2,980,000
Fiscal Accountability
Align law enforcement costs with prior year actual hours. Reduce applications used in the City, extend tech refresh cycles, and remove the new Enterprise Resource Planning (ERP) software from the budget.
2,555,421 2,555,421
Community Benefit
Reduce 4th of July Event, partnerships, City events/outreach, paid events, concerts and movies, select City Work Program projects.
463,690 463,690
Total $10,472,238 $8,999,836
Recommendation and Next Steps
Roadmap to FY 2024-25 Budget Adoption and Balancing
Council Goal Setting/
Work Program
Budget Update
1st Quarter Report
Budget Update
Mid-Year Report
Fee Study and
Revenue Tax
Measures
Budget Update
-SLR Review #2
-Community Meeting
Updates
FY 2024-25 Proposed
Budget
-Community Funding
-Festivals & Fee Waivers
FY 2024-25 Adopted
Budget
Budget Update
Service Level Reduction
(SLR) Preview
October 2023 November 2023 January 2024
April 2024 June 2024
February 2024
Community Budget
Meeting #1
Commission/
Committee Feedback
Labor Contracts
March 2024
Budget Update
3rd Quarter Report
May 2024
City Hall &
Blackberry Farm
Update
Community
Budget Meeting #2
Budget Update
-Audit Update
-Committed Reserve
Revenue Tax
Measures
December 2023
Budget Update
Capital Improvement
Plan (CIP)
Last Updated 4.12.2024
Provide confirmation on potential service-level
reductions for the FY 2024-25 Proposed and Final
Budgets
Recommendation
Questions?
CC 04-16-2024
#12
6th Cycle Housing
Element Update
Updated
Presentation
1 City Council
April 16, 2024
6th Cycle Housing Element
Update
Agenda
 Background
 Current Status – Conditional Certification
Letter received from HCD (April 10)
 RHNA/Priority Sites
 Policies and Strategies
 Timeline and next steps
1 2
CC 04-16-2024 Item No. 12.

Updated Presentation
(4/16/24)
2 BackgroundWhat is a Housing Element?State-mandated Element of City’s General PlanWhy update it now?Unlike other General Plan Elements required byState law to be updated every 8 yearsPurpose of the Update:Study and plan for housing needs in thecommunity, across all income levels BackgroundWhat does State law require?Public ParticipationNeeds AnalysisReview of prior Housing Element policies/programsDevelop policies/programs to address current needsHousing Sites InventoryWho reviews and certifies compliance withState law?CA Department of Housing and CommunityDevelopment (HCD) 3 4
3 Related UpdatesConforming changes:Other General Plan Elements – Land Use, Transportation, Specific Plans and appendicesRezoning– map and textState law requirements:Health and Safety ElementZoning amendments (emergency shelters etc.)Other – necessary to implement HE programs (e.g.Objective design standards for housing developments) Background6thCycle Housing Element updatecovers 2023 – 2031 Planning Period.Certification deadline: January 31, 2023(passed).Six jurisdictions in Santa Clara County (15cities/1 county) still do not have compliantHousing Elements38 of 109 ABAG jurisdictions not in compliance58 of 197 SCAG jurisdictions still out of compliance 5 6
4 ABAG RHNAState-wide Housing Needs Determination made by HCD for each region within StateCupertino in 9 County ABAG region % of totalUnitsIncome Group26.01,193Very Low Income (<50% of AMI)15.0687Low Income (50%-80% of AMI)16.5755Moderate Income (80%-120% of AMI)42.51,953Above Moderate Income (>120% of AMI)1004,588TotalAffordableUnits= 2,635Cupertino’s 6thCycle RHNA Buffer ~ 25 - 35% particularly for lower income levels recommended to ensure city does not have to update sites inventory before next HE update for “no net loss” purposes. RHNA + Buffer accommodates over 6,200 units. 7 8
5 Background: 6th Cycle vs. 5th CycleRHNA 4x higher in Cupertino--4,588 vs. 1,064Few remaining undeveloped sites, reliance onredevelopment to meet RHNA62 properties, 36 development sites70% of properties 50 units/acre or moreNew legislation adds requirements in:Developing policies/programsGreater accountability to produce housingSite selectionLess discretion approving housing developmentsAffirmatively Furthering Fair Housing (AFFH)More outreach and inclusion Background: NoncomplianceWhat can happen if City does not have acertified Housing Element?Loss of local land use and zoning control –Builder’s Remedy projectsLawsuits and attorney feesIneligibility for grant fundingFinancial penalties, court issued finesStreamlined ministerial approval of projectsCourt receivership appointing an agent to bring City’s Housing Element into compliance 9 10
6 Affirmatively Furthering Fair Housing (AFFH) - CupertinoCity is designated High or Highest Resource regarding Access to OpportunitiesHousing anywhere in City would regionally Affirmatively Further Fair HousingCity must look to accommodate persons who currently do not reside hereMeeting RHNA alone does not equate to satisfying AFFH (Missing Middle Strategy) What’s happened so far?What’s happened so far?
2021Comm. Mtgs (Aug & Dec) Jt. Study Sessions (Apr & May)CC Mtg (Sept)HC Mtg (Dec) Jan – Jun 2023
Jul – Dec 2022CC Mtgs (Aug, Nov)PC (July)CEP-SAC mtgs (Jul, Sep, Oct)Comm. Mtg (Jul, Sep) Jan – Jun 2022PC mtgs (Jan, Feb, Apr, May, June)CC mtgs (Mar)HC mtg (Jun)CEP-SAC mtgs (Mar, Apr, May, Jun)Comm. Mtg (May) Jan –Mar 2024CC Mtg (Jan)1stDraft to HCD (2/4)Comments from HCD (5/4)2ndDraft to HCD (10/16)Revised 2ndDraft to HCD (11/30)Comments from HCD (12/15)3rdDraft to HCD (2/27)Revised 3rdDraft to HCD (3/28)Conditional Certification letter from HCD (4/10) Jul – Dec 202311
12 7
Sites Inventory: Pre-HE SubmittalRobust discussions in 2022 at Housing and Planning Commissions and City CouncilStarted with all potential sites throughout the City which:Met HCD size criteria: 0.5 – 10 acresIndicated owner interestOutside of fire hazard and geologic and other hazard zones –more environmental impacts Sites Inventory: Direction Pre-HE submittal More interest in accommodating housing west of De Anza Blvd and south of 85Less interest in accommodating housing east of De Anza BlvdLocate housing sites to counteract declining school enrollmentAvoid displacement of existing residents through redevelopment of residential properties 13 14
8 Sites -August 2022
Policy FrameworkState laws: link land use and transportation (AB 32 and SB 375)Regional plans (Plan Bay Area 2050 and RegionalTransportation Plan) align with state lawAB 2011 (eff. July 1, 2023): Allows Residential development on Commercial-Office Corridors regardless of Zoning:Density and building height varies depending on lot size and width of transportation corridorIdentifies min. development standardsMinisterial, exempt from CEQA 15 16
9 AB2011 with HCD size criteria
Current Site selection strategyWith Council direction in July 2023, site selection strategy adjusted based on:New State law realities – AB 2011/SB6Proximity to transportation – AB32/SB375Aligning with regional plans – PBA2050 & RTPCity’s existing policies – LU-1.1 & CAPConsultant experience based on likelihood of site acceptance by HCDDevelopment potential of siteSize of sites – 0.5 acres (min.) to 10 acres (max.) 17 18
10 Current Housing Element Priority Housing Sites
Goals / Policies / ProgramsGoals / Policies / Programs19 20 11
Required Programs and Policies Programs to provide Adequate Housing SitesPrograms to Assist Lower-Income Housing Development Programs to Address Housing Constraints Programs to Conserve and Improve the Housing Stock Programs to Affirmatively Further Fair HousingPrograms to Preserve ”at risk” Units Programs for ADUs/Second Units Housing Policy Areas
Programs to Assist Lower-Income Housing Development –Support Grant applications;Provide technical support; Issue NOFA for BMR Affordable Housing FundsPrograms to Address Housing Constraints –Adopt Objective standards, Continue fee waivers for affordable units and/or 100% affordable projects; Evaluate Parking standards 21 22
12 Housing Policy Areas (cont.)Programs to Conserve, Improve and Expand City Housing Stock –Requiring replacement of at least as many units as exist on a site; Disallow conversion of multi-family units to Single Family; CDBG funds for conservation/ improvements Housing Policy Areas (cont.)Programs to Affirmatively Further Fair Housing –Upzone sites adequately to allow accommodation of RHNA; Support teacher housing and ELI projects; Continue to support the development of ADUs and adopt "missing middle" housing policies, which offer opportunities with modest increases in density (HE Strategy1-3-6) 23 24
13 Housing Policy Areas (cont.)Programs to Preserve ”at risk” Units –Programs to meet with affordable housing operators annually.Programs for ADUs/Second Units –Continue to offer streamlined pre-approved plans; Evaluate and participate in local and regional efforts on ADU programs.

HCD ReviewHCD Review25
26 14
Initial HCD commentsReceived May 4, 2023General in nature, but comprehensiveAsks for more analysis in several areasSome comments do not apply to City (e.g.manufactured homes/ADUs)No specific feedback on Sites Inventory, except pipeline (discussed earlier) Second Draft HCD commentsReceived December 15, 2023Fewer comments and more specific in natureStill asks for more analysis in a few areas, particularly regarding sites’ development potential within 6thCycle timeframeSome feedback on Sites Inventory, other than pipeline 27 28
15 Recent informal comments from HCD Strengthen Missing Middle Policies for Fair Housing purposes (Strategy HE 1-3-6)Provide additional site analysis-Improvement to Land Value and support for sites where redevelopment is less certainContinue to streamline and promote development of ADUsTake more proactive approach to ensure housing is produced Settlement/Environmental Assessment February 2023: California Housing Defense Fund/YIMBY Law sue City for noncompliant HE by adoption deadlineJanuary 2024: Stipulated Judgment entered into - establishing schedule to complete HE update in compliance with State lawGov’t Code Sec. 65759(a)CEQA does not apply to actions to bring HE into compliance with Court Order. 29 30
16 Timeline and Next StepsTimeline and Next Steps
April 2024Letter from HCD –4/12HC Study SessionPC recommendation Summer 2024
Fall 2024
June 2024Second reading – 6/4
May 2024Council adoption – 5/14
Mar 2025Prepare objective design standards Adopt objective design standardsAPR submitted 31 32
CC 04-16-2024
#12
6th Cycle Housing
Element Update
Presentation
City Council
April 16, 2024
6th Cycle Housing Element
Update
CC 04-16-2024 Item No. 12
Agenda
 Background
 Current Status – Conditional Certification
Letter received from HCD (April 10)
 RHNA/Priority Sites
 Policies and Strategies
 Timeline and next steps

Background
 What is a Housing Element?
 State-mandated Element of City’s General Plan
 Why update it now?
 Unlike other General Plan Elements required by
State law to be updated every 8 years
 Purpose of the Update:
 Study and plan for housing needs in the
community, across all income levels

Background
 What does State law require?
 Public Participation
 Needs Analysis
 Review of prior Housing Element policies/programs
 Develop policies/programs to address current needs
 Housing Sites Inventory
 Who reviews and certifies compliance with
State law?
 CA Department of Housing and Community
Development (HCD)

Related Updates
 Conforming changes:
 Other General Plan Elements – Land Use,
Transportation, Specific Plans and appendices
 Rezoning – map and text
 State law requirements:
 Health and Safety Element
 Zoning amendments (emergency shelters etc.)
 Other – necessary to implement HE programs (e.g.

Objective design standards for housing
developments)

Background
 6th Cycle Housing Element update
covers 2023 – 2031 Planning Period.
 Certification deadline: January 31, 2023
(passed).
 Six jurisdictions in Santa Clara County (15
cities/1 county) still do not have compliant
Housing Elements
 38 of 109 ABAG jurisdictions not in compliance
 58 of 197 SCAG jurisdictions still out of compliance

ABAG RHNA
 State-wide Housing
Needs Determination
made by HCD for
each region within
State
 Cupertino in 9
County ABAG
region

Santa Clara County 6th RHNA Cycle

Income Group Units % of total
Very Low Income
(<50% of AMI)
1,193 26.0
Low Income
(50%-80% of AMI)
687 15.0
Moderate Income
(80%-120% of AMI)
755 16.5
Above Moderate Income
(>120% of AMI)
1,953 42.5
Total 4,588 100
Affordable
Units =
2,635
Cupertino’s 6th Cycle RHNA

Background: 6th Cycle vs. 5th Cycle
 RHNA 4x higher in Cupertino--4,588 vs. 1,064
 Few remaining undeveloped sites, reliance on
redevelopment to meet RHNA
 62 properties, 36 development sites
 70% of properties 50 units/acre or more
 New legislation adds requirements in:
 Developing policies/programs
 Greater accountability to produce housing
 Site selection
 Less discretion approving housing developments
 Affirmatively Furthering Fair Housing (AFFH)
 More outreach and inclusion
 HE more like contract than standalone document.

Background: Noncompliance
 What can happen if City does not have a
certified Housing Element?
 Loss of local land use and zoning control –
Builder’s Remedy projects
 Lawsuits and attorney fees
 Ineligibility for grant funding
 Financial penalties, court issued fines
 Streamlined ministerial approval of projects
 Court receivership appointing an agent to
bring City’s Housing Element into compliance

Affirmatively Furthering Fair Housing
(AFFH)
 AB 686 (2018) defines AFFH as:
“taking meaningful actions, in addition to combating
discrimination, that overcome patterns of segregation
and foster inclusive communities free from barriers that restrict access to opportunity based on protected
characteristics.”
 Three community meetings focused on AFFH
held May-September 2022

Affirmatively Furthering Fair Housing
(AFFH) - Cupertino
 City is designated High or Highest Resource
regarding Access to Opportunities
 Housing anywhere in City would regionally
Affirmatively Further Fair Housing
 City must look to accommodate persons who
currently do not reside here
 Meeting RHNA alone does not equate to
satisfying AFFH (Missing Middle Strategy)

What’s happened so far?
2021
 Comm. Mtgs
(Aug & Dec)
 Jt. Study Sessions
(Apr & May)
 CC Mtg (Sept)
 HC Mtg (Dec)
Jan – Jun
2023
Jul – Dec
2022
 CC Mtgs (Aug, Nov)
 PC (July)
 CEP-SAC mtgs (Jul,
Sep, Oct)
 Comm. Mtg (Jul,
Sep)
Jan – Jun
2022
 PC mtgs (Jan, Feb,
Apr, May, June)
 CC mtgs (Mar)
 HC mtg (Jun)
 CEP-SAC mtgs (Mar,
Apr, May, Jun)
 Comm. Mtg (May)
Jan –Mar
2024
 CC Mtg (Jan)
 1st Draft to HCD
(2/4)
 Comments from
HCD (5/4)
 2nd Draft to HCD
(10/16)
 Revised 2nd Draft to
HCD (11/30)
 Comments from HCD
(12/15)
 3rd Draft to HCD
(2/27)
 Revised 3rd Draft to
HCD (3/28)
 Conditional
Certification letter
from HCD (4/10)
Jul – Dec
2023
Income Group Units % of total
Very Low Income
(<50% of AMI)
1,193 26.0
Low Income
(50%-80% of AMI)
687 15.0
Moderate Income
(80%-120% of AMI)
755 16.5
Above Moderate Income
(>120% of AMI)
1,953 42.5
Total 4,588 100
Affordable
Units =
2,635
Cupertino’s 6th Cycle RHNA
Buffer ~ 25 - 35% particularly for lower income levels recommended to ensure city does not have to update sites inventory before next HE update for “no net loss” purposes. RHNA + Buffer accommodates over 6,200 units.

Sites Inventory: Pre-HE Submittal
 Robust discussions in 2022 at Housing and
Planning Commissions and City Council
 Started with all potential sites throughout the
City which:
 Met HCD size criteria: 0.5 – 10 acres
 Indicated owner interest
 Outside of fire hazard and geologic and
other hazard zones – more environmental
impacts

Sites Inventory:

Direction Pre-HE submittal
 More interest in accommodating housing west
of De Anza Blvd and south of 85
 Less interest in accommodating housing east
of De Anza Blvd
 Locate housing sites to counteract declining
school enrollment
 Avoid displacement of existing residents
through redevelopment of residential
properties

Sites -
August
2022

Policy Framework
 State laws: link land use and transportation (AB 32
and SB 375)
 Regional plans (Plan Bay Area 2050 and Regional
Transportation Plan) align with state law
 AB 2011 (eff. July 1, 2023): Allows Residential
development on Commercial-Office Corridors
regardless of Zoning:
 Density and building height varies depending
on lot size and width of transportation corridor
 Identifies min. development standards
 Ministerial, exempt from CEQA

AB2011
with
HCD
size
criteria

Current Site selection strategy
With Council direction in July 2023, site selection
strategy adjusted based on:
 New State law realities – AB 2011/SB6
 Proximity to transportation – AB32/SB375
 Aligning with regional plans – PBA2050 & RTP
 City’s existing policies – LU-1.1 & CAP
 Consultant experience based on likelihood of site
acceptance by HCD
 Development potential of site
 Size of sites – 0.5 acres (min.) to 10 acres (max.)

Current
Housing
Element
Priority
Housing
Sites

Goals / Policies / Programs
Required Programs and Policies
 Programs to provide Adequate Housing Sites
 Programs to Assist Lower-Income Housing
Development
 Programs to Address Housing Constraints
 Programs to Conserve and Improve the
Housing Stock
 Programs to Affirmatively Further Fair Housing
 Programs to Preserve ”at risk” Units
 Programs for ADUs/Second Units

Housing Policy Areas
 Programs to Assist Lower-Income Housing
Development –
 Examples: Support Grant applications; Provide
technical support; Issue NOFA for BMR
Affordable Housing Funds
 Programs to Address Housing Constraints –
 Examples: Adopt Objective standards,
Continue fee waivers for affordable units
and/or 100% affordable projects; evaluate
Parking standards
Housing Policy Areas (cont.)
 Programs to Conserve, Improve and Expand
City Housing Stock –
 Examples: Requiring replacement of at least
as many units as exist on a site; Disallow
conversion of multi-family units to Single
Family; CDBG funds for conservation/
improvements

Housing Policy Areas (cont.)
 Programs to Affirmatively Further Fair
Housing –
 Examples: Upzone sites adequately to allow
accommodation of RHNA; Support teacher
housing and ELI projects; Continue to support
the development of ADUs and adopt
"missing middle" housing policies, which offer
opportunities with modest increases in
density;

Housing Policy Areas (cont.)
 Programs to Preserve ”at risk” Units –
 Examples: programs to meet with affordable
housing operators annually.
 Programs for ADUs/Second Units –
 Examples: Continue to offer streamlined pre-
approved plans; Evaluate and participate in
local and regional efforts on ADU programs.

Council Direction July 2023:
 In addition to refining site selection
strategy, directed priority for housing
policy areas among the following:
 Assist lower income
households
 Address constraints
 Conserve and
Improve Housing
Stock
 Affirmatively Further
Fair Housing
 Preserve “at risk”
units
 ADUs/Second Units

HCD Review
Initial HCD comments
 Received May 4, 2023
 General in nature, but comprehensive
 Asks for more analysis in several areas
 Some comments do not apply to City (e.g.
manufactured homes/ADUs)
 No specific feedback on Sites Inventory,
except pipeline (discussed earlier)

Second Draft HCD comments
 Received December 15, 2023
 Fewer comments and more specific in
nature
 Still asks for more analysis in a few areas,
particularly regarding sites’ development
potential within 6
th Cycle timeframe
 Some feedback on Sites Inventory, other
than pipeline

Recent informal comments
from HCD
 Strengthen Missing Middle Policies for Fair
Housing purposes (Strategy HE 1-3-6)
 Provide additional site analysis-Improvement
to Land Value and support for sites where
redevelopment is less certain
 Continue to streamline and promote
development of ADUs
 Take more proactive approach to ensure
housing is produced

Settlement/Environmental
Assessment
 February 2023: California Housing Defense
Fund/YIMBY Law sue City for noncompliant
HE by adoption deadline
 January 2024: Stipulated Judgment entered
into, establishing schedule to complete HE
update in compliance with State law
 Gov’t Code Sec. 65759(a)--CEQA does not
apply to actions to bring HE into
compliance with Court Order.

Timeline and Next Steps
April 2024
 Letter from HCD
– 4/12
 HC Study Session
 PC
recommendation
Summer 2024
Fall 2024
June 2024
 Second reading
– 6/4
May 2024
 Council adoption
– 5/14
Mar 2025
 Prepare objective
design standards
 Adopt objective
design standards
 APR submitted