Cupertino City Council
June 17, 2025

















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Option 05: Loadout Conveyors
Equipment USD $673,778
Controls USD $9,596
Project Management and Start-Up USD $51,259
Mechanical/Electrical Installation USD $119,277
Estimated Shipping and Handling USD $14,403
Subtotal Sale Price USD $868,313
Taxes 9.125% (Equipment, Structure, Controls) USD $62,358 Total USD $930,671
Option 06: Compactor Electrical
Controls USD $12,739
Mechanical/Electrical Installation USD $173,476
Subtotal Sale Price USD $186,215
Taxes 9.125% (Equipment, Structure, Controls) USD $16,497 Total USD $202,712
Option 09: Max Air QC
Equipment USD $701,681
Controls USD $78,758
Project Management and Start-Up USD $70,595
Mechanical/Electrical Installation USD $199,910
Estimated Shipping and Handling USD $26,932
Subtotal Sale Price USD $1,077,876
Taxes 9.125% (Equipment, Structure, Controls) USD $71,215 Total USD $1,149,091
Option 10: 2-6in Fiber Optical
Equipment USD $759,969
Structure USD $91,874
Controls USD $41,474
Project Management and Start-Up USD $87,128
Mechanical/Electrical Installation USD $169,430
Estimated Shipping and Handling USD $24,006
Subtotal Sale Price USD $1,173,881
Taxes 9.125% (Equipment, Structure, Controls) USD $81,515 Total USD $1,255,396

















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Option 11: Ferrous QC to Baler
Equipment USD $384,632
Structure USD $15,926
Controls USD $9,596
Project Management and Start-Up USD $45,172
Mechanical/Electrical Installation USD $91,801
Estimated Shipping and Handling USD $12,670
Subtotal Sale Price USD $559,797
Taxes 9.125% (Equipment, Structure, Controls) USD $37,427 Total USD $597,224
Option 13: REB 2 250 Sierra Baler
Equipment USD $997,514
Controls USD $9,596
Project Management and Start-Up USD $72,111
Mechanical/Electrical Installation USD $72,196
Estimated Shipping and Handling USD $28,977
Subtotal Sale Price USD $1,180,394
Taxes 9.125% (Equipment, Structure, Controls) USD $91,899 Total USD $1,272,293
Total Price for Base and Options Selected
Total Price With Tax USD $35,095,084
Price Concession USD $-550,084
Total USD $34,545,000
Validity
All pricing shown is valid for 30-days
Delivery
Estimated freight costs have been provided for budgeting purposes. Actual freight plus loading costs will be invoiced as charges occur.

















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1 SMART STATION MERCHANT USER AGREEMENT

FOR RECYCLING AND SOLID WASTE PROCESSING AND TRANSFER SERVICES

BETWEEN THE CITY OF CUPERTINO
AND

THE CITY OF SUNNYVALE
This SMaRT Station Merchant User Agreement (“Agreement”) is entered into and effective as of _____________, 2025, by and between the City of Sunnyvale, a chartered municipal corporation (“Sunnyvale”), and the City of Cupertino, a general law municipal corporation (“Merchant User” or “Cupertino”). Sunnyvale and Merchant User are collectively referred to as “the parties” and individually as a “party”.

RECITALS
A. The City of Sunnyvale (“Sunnyvale”) is the owner of the Sunnyvale Materials Recovery and Transfer Station, also known as the SMaRT Station® (“the Facility”). The Facility is currently operated by Bay Counties Waste Services, Inc., a California corporation dba Bay Counties SMaRT (“the Operator”), pursuant to a Contract for the Operation of the Sunnyvale Materials Recovery and Transfer Station between the City of Sunnyvale and Bay Counties Waste Services, Inc., dated January 1, 2022 (“the SMaRT Station Operating Agreement”).

B. Sunnyvale’s operation of the Facility is also subject to an agreement between Sunnyvale and the City of Mountain View entitled the New Memorandum of Understanding Among the Cities of Mountain View and Sunnyvale Relating to the Operation of a Materials Recovery and Transfer Station, entered into on December 22, 2021 (“the Partner Agencies’ MOU” or “the MOU”).

C. Pursuant to Section 9.2 of the MOU, Sunnyvale as Managing Partner, with the mutual consent of the other Partners which may not be unreasonably withheld, may enter into agreements with third-party merchant users, who may be a solid waste hauler or a public agency, to utilize excess capacity at the Facility for any waste stream so long as such sale would have no adverse operational or financial impact on the Partners or affect the capacities provided to any Partner under the MOU. Such offers for sale are subject to the mutual agreement of the Partners, which may not be unreasonably withheld.

D. Merchant User, a public agency, desires to utilize excess capacity at the Facility for certain waste streams as identified in this Agreement.

Cupertino has awarded a franchise to a hauler (“the Hauler”) for collection of waste and materials in its jurisdiction (“the Franchise Agreement”) and wishes to use the Facility to provide post-collection processing and transfer services for Municipal Solid Waste. (“the Services”).

E. Waste Management of California, Inc., a California corporation (“Waste Management”) provides refuse disposal services to Sunnyvale at the Kirby Canyon Landfill (“Landfill”) pursuant to an Agreement Between the City of Sunnyvale and Waste Management of California, Inc. for Long Term Disposal of Solid Waste, dated September 10, 1991, as amended on August 31, 1993 (“the First Amendment”), and on December 16, 2013 (Second Amendment), collectively referred to as “the SMaRT Station Kirby Canyon Disposal Agreement”. The SMaRT Station Kirby Canyon Disposal Agreement requires that all unrecycled solid waste leaving the Facility be delivered to the Landfill for disposal.

G. This Agreement sets forth the general terms and conditions under which: (1) Sunnyvale will direct the Operator of the Facility to provide the Services to Merchant User and (2) Merchant User will direct Hauler to deliver all of Merchant User’s Municipal Solid Waste to the Facility. 587
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2 NOW, THEREFORE, Sunnyvale and Merchant User agree as follows:

1. Recitals. The above recitals are true and correct and are incorporated by reference into this Agreement.

2. Term of Agreement. The term of this Agreement shall commence upon full execution of the Agreement by the parties. This Agreement shall terminate twenty years after execution, unless earlier terminated pursuant to Section 13 of this Agreement. Delivery of materials and payment of per ton rates will begin upon achievement of the Full Start-Up Date following completion of the Planned Capital Improvements as set forth in the MOU (Section 4 and Exhibit D).

Materials to be Delivered; Services to be Provided. Merchant User will require Hauler to deliver to the Facility all of the materials set forth on Exhibit “A” attached hereto and incorporated herein by this reference, collected by Hauler under the Franchise Agreement (the “Municipal Solid Waste”). The Facility will accept all materials received from Hauler as set forth on Exhibit “A”, process such materials to remove items that can be recycled and recycle them (or have a facility named below do such processing), and dispose of the residue at the Landfill. “Recycle” refers to processes by which materials that would otherwise become solid waste are sorted, packaged and marketed as raw materials to end users that will return them to the economic mainstream in the form of new, reused or reconstituted products. Other facilities may be used from time to time to provide specialized services or to accommodate processing during maintenance, repair or replacement of portions of the Facility. The Operator will not be required to segregate the Merchant User materials from materials received from the cities of Sunnyvale and Mountain View, other partners or merchant users, but will keep accurate records of the tonnages of each type of material received from Merchant User.

3. Mechanics of Delivery. The Facility will be open for the delivery of materials between the hours of 5:00 a.m. and 5:00 p.m. Monday through Friday and Saturday 8 a.m. and 3 p.m. For weeks containing a holiday that falls on a weekday, the Facility will be open for the delivery of materials on the following Saturday between the hours of 5:00 a.m. and 5:00 p.m. Holidays as of the date of this Agreement are January 1, the fourth Thursday in November, and December 25. The anticipated maximum turnaround time for delivering vehicles carrying one type of material is 15 minutes and for split-vehicles carrying two types of material is 30 minutes. The Operator will inspect loads, weigh loads and reject or dispose of unacceptable waste at Merchant User’s expense, in accordance with the Facility’s operating procedures. Any changes to the operational information in this Section will be communicated to the Merchant User at least thirty (30) days in advance.

4. Operating Procedures. Merchant User and Hauler shall comply with the Facility’s operating procedures.

5. Capacity; Diversion. Sunnyvale will provide capacity at the Facility for materials delivered from Merchant User up to the following maximum amounts: solid waste – 75 tons per day.

Sunnyvale will require the Operator to process materials delivered from Merchant User in the same manner as similar materials received from Partner Agencies and use best efforts to achieve the maximum amount of diversion. Merchant User acknowledges that the ability of the Operator to achieve the maximum diversion will be materially influenced by the composition and quality of the materials delivered from Merchant User.

6. Fees; Billing; Payment. Merchant User shall pay the fees for providing the Services as set forth on Exhibit “A”. The fees are subject to annual CPI adjustment by Sunnyvale on or about July 1 588
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3 of each year. Base Rate, as adjusted hereunder, shall be automatically seasonally adjusted by a percentage equal to the annual percent change in the average Consumer Price Index for All Urban Consumers (CPIU) U.S. City Average for Water and sewer and trash collection services (“CPI”), as published by the Bureau of Labor Statistics, for the 12-month period ending the previous June (compared to the average CPI for the next previous 12-month period ending April), and adjustment per Section 8 below. Fees will be invoiced monthly by Sunnyvale and payment from Merchant User will be due within thirty (30) calendar days of the date of invoice. Any invoice balance not paid within thirty (30) days of the date of invoice is subject to a late charge, and any check returned for insufficient funds is subject to a nonsufficient funds fee, both to the maximum extent allowed by applicable law. The Operator and/or Sunnyvale will be responsible for transmitting payment of all fees due to the facilities named in Section 3 above.

7. Cost of Service Review. Sunnyvale may intermittently, approximately every three years, perform a cost of service review, which, if performed, shall become the basis for a revision in the costs and fees moving forward. The results of such cost of service reviews shall be available for review by the Merchant User. The cost of service review is designed to ensure a 100% cost recovery for the City of Sunnyvale during the term of the Agreement and to cover changes in the costs, especially from significant events such as regulatory changes or the addition or loss of a MOU Partner. During the term of this Agreement, the first cost of service review will be conducted no sooner than the first one-year anniversary of the commencement of the Services. Notwithstanding the provisions of Section 7, if based on the cost of service review, Sunnyvale determines that costs exceed the CPI adjustment in Section 7, the applicable fees under this Agreement will be adjusted and will apply to this Agreement with at least ninety (90) days’ written notice to Merchant User.

8. Modifications During Facility Closure. From time to time, the Facility may be inoperable for processing. When the Facility is inoperable, including during unplanned shutdowns, waste delivered to the Facility by Hauler will not be processed for recycling or diversion and will instead be directly transported to Landfill for disposal (if feasible), and the applicable fees in Section 7 and, if applicable, Section 8, shall be adjusted to remove processing costs.

9. Indemnification. To the furthest extent allowed by law, Merchant User shall indemnify, protect, defend at its own expense and hold harmless Sunnyvale and Sunnyvale’s officials, officers, employees, representatives, contractors and agents (collectively, the “Indemnified Parties”) f`rom and against any and all losses, liabilities, damages, claims or costs (including attorneys’ fees and litigation expenses) arising from the negligent acts, errors, omissions or willful misconduct of Merchant User, its officers, employees, representatives, contractors and agents, excluding any such losses arising from the sole negligence or willful misconduct of the Indemnified Parties. The defense and indemnification obligations contained in this Agreement are undertaken in addition to, and shall not in any way be limited by, the insurance obligations contained in this Agreement. The obligations set forth in this paragraph shall survive the termination, expiration and/or completion of this Agreement.

Merchant User shall ensure its agreement with its Hauler for delivery of materials to the Facility includes a requirement for the Hauler to: (a) indemnify, protect, defend and hold harmless Sunnyvale and Sunnyvale’s officials, officers, employees, representatives, contractors and agents from any and all losses, liabilities, damages, claims or costs (including attorneys’ fees and litigation expenses) arising from the negligent acts, errors, or omissions and willful misconduct with respect to the obligations of the Hauler, its officers, employees, representatives, contractors and agents arising from the Hauler’s collection and delivery of waste and materials under the Franchise Agreement and the Services. The indemnification obligations shall survive the termination and expiration of the Franchise Agreement and this Agreement; and (b) at the Hauler’s sole cost and expense maintain insurance coverage during the term of this Agreement against claims for injuries to persons or damages to property which may arise 589
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4 from, or in connection with, Hauler’s performance of services under the Franchise Agreement and this Agreement. The types of insurance and amounts of coverage shall be satisfactory to Sunnyvale and Sunnyvale shall be named an additional insured under said policies.

10. Insurance. Sunnyvale requires Merchant User to maintain insurance requirements on the City of Sunnyvale’s electronic insurance verification system. Merchant User shall procure and maintain, at its own expense during the life of this Agreement, policies of insurance as specified in Exhibit “B” attached and incorporated herein by reference and shall provide all certificates and endorsements as specified in Exhibit “B” electronically for approval by the City Risk Manager prior to Merchant User (or subcontractor) commencing any use of or deliveries to the Facility under this Agreement.

11. Force Majeure. If Sunnyvale or Operator is prevented, in whole or in part, from carrying out this Agreement due to a Force Majeure, then Sunnyvale and Operator may reduce or cease performance of the Agreement to respond to such event of Force Majeure. Sunnyvale shall promptly provide written notice to Merchant User of a declaration of Force Majeure, and as soon as practicable, within thirty (30) days, the parties shall meet and confer to determine the impact and duration of the event and any reasonable steps that can be taken by the parties to mitigate or reduce the impact of the Force Majeure. “Force Majeure” means the failure of Sunnyvale to meet its obligations under this Agreement by reason of acts of God, earthquakes, droughts, floods, storms, explosion, fires, third party strikes, work stoppage or labor unrest, insurrection, riots, pandemics, epidemics, acts of the public enemy, or federal, state, or local law, order, rule, or regulation, excepting any imposed by Sunnyvale in its sole discretion.

12. Termination. Either party may terminate this Agreement for any reason with ninety (90) days written notice to the other party. Either party may suspend or terminate this Agreement upon thirty (30) days written notice for a material breach of the Agreement, except that such notice shall be effective immediately if the breach endangers the health, welfare or safety of the public.

13. No Third Party Beneficiaries. This Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than the parties.

14. Integration Clause. This Agreement, including all Exhibits, contains the entire agreement between the parties and supersedes whatever oral or written understanding they may have had prior to the execution of this Agreement. This Agreement shall not be amended or modified except by a written agreement executed by each of the parties hereto.

15. Severability Clause. Should any provision of this Agreement ever be deemed to be legally void or unenforceable, all remaining provisions shall survive and be enforceable.

16. Waiver. Waiver by either party of any default, breach or condition precedent shall not be construed as a waiver of any other default, breach or condition precedent or any other right hereunder.

17. Ambiguity. The parties acknowledge that this is a negotiated agreement, that they have had the opportunity to have this Agreement reviewed by their respective legal counsel, and that the terms and conditions of this Agreement are not to be construed against any party on the basis of such party's draftsmanship thereof.

18. Notices. All notices or instruments required to be given or delivered by law or this MOU shall be in writing and shall be effective upon receipt thereof and shall be by personal service or delivered by depositing the same in any United States Post Office, registered or certified mail, postage prepaid, 590
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5 addressed to:

If to Sunnyvale: Ramana Chinnakotla
Director
City of Sunnyvale
Environmental Services Department
PO Box 3707
Sunnyvale CA 94088-3707
If to Merchant User: Chad Mosley
Director of Public Work
City of Cupertino
10300 Torre Ave.

Cupertino, CA 95014
Any party may change its address for receiving notices by giving written notice of such change to the other party in accordance with this section.

19. Counterparts. The parties may execute this Agreement in one or more counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same instrument.

20. Facsimile Signature; Electronic Signature. This Agreement shall be binding upon the receipt of facsimile signatures or e-mailed by PDF or otherwise. Any person transmitting his or her signature by facsimile or electronically shall promptly send an original signature to the other party pursuant to the notice provision of this Agreement. The failure to send an original shall not affect the binding nature of this Agreement.

21. Authority. The persons executing this Agreement warrant that they are duly authorized to execute this Agreement on behalf of and bind the respective party that each purports to represent.

Executed as of the date of the last party to sign this Agreement as set forth below.

CITY OF SUNNYVALE,
a municipal corporation

Tim Kirby
City Manager
Date:

Approved as to Form:

City Attorney
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6 CITY OF CUPERTINO
a municipal corporation

Name: _____________________
Title:

Date:

Approved as to Form:

City Attorney
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7 EXHIBIT “A”
Materials Delivered to Facility Base Rate Per Ton Delivered Residential, Commercial, and Industrial Municipal Solid Waste $197.13 Municipal Solid Waste (“MSW”), commonly called “garbage,” “trash” or “rubbish,” means all solid waste as defined in California Public Resources Code, Division 30, Part 1, Chapter 2, Section 40191, as amended, and regulations promulgated thereunder, which is generated in the city of Cupertino. Excluded from the definition of MSW are Excluded Waste, Source Separated Recyclable Materials, Source Separated Organic Materials, construction and demolition debris, and radioactive waste. MSW may include de minimis volumes or concentrations of waste of a type and amount normally found in residential solid waste after implementation of programs for the safe collection, recycling, treatment, and disposal of household hazardous waste in compliance with Sections 41500 and 41802 of the California Public Resources Code, as amended.
“Excluded Waste” means hazardous substance, hazardous waste, infectious waste, designated waste, volatile, corrosive, medical waste, regulated radioactive waste, and toxic substances or material that facility operator(s), which receive materials from the city and its generators, reasonably believe(s) would, as a result of or upon acceptance, transfer, processing, or disposal, be a violation of local, state, or federal law, regulation, or ordinance, including: land use restrictions or conditions, waste that cannot be disposed of in Class III landfills or accepted at the facility by permit conditions, waste that in the city, or its designee's reasonable opinion would present a significant risk to human health or the environment, cause a nuisance or otherwise create or expose the city, or its designee, to potential liability; but not including de minimis volumes or concentrations of waste of a type and amount normally found in residential solid waste after implementation of programs for the safe collection, processing, recycling, treatment, and disposal of batteries and paint in compliance with Sections 41500 and 41802 of the California Public Resources Code. Excluded Waste does not include used cooking oil, motor oil and filters, household batteries, and/or universal wastes when such materials are defined as allowable materials for collection through the city's collection programs and the generator or customer has properly placed the materials for collection pursuant to instructions provided by city or its designee for collection services. "Organic Materials" means yard trimmings, food scraps, and food-soiled papers that are set aside, handled, packaged, or offered for collection in a manner different from solid waste for the purpose of processing.
"Recyclable Materials" means materials, byproducts, or components of such materials set aside, handled, packaged, or offered for collection in a manner different from solid waste for the purpose of recycling. "Recycle" or "Recycling" means the process of sorting, cleansing, treating, and reconstituting at a recyclable materials processing facility, materials that would otherwise be disposed of at a landfill for the purpose of returning such materials to the economy in the form of raw materials for new, reused, or reconstituted products.
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8 "Source Separated" or "Source-Separated (materials)" means materials, including commingled recyclable materials and organic materials, that have been separated or kept separate from the mixed waste stream, at the point of generation, for the purpose of additional sorting or processing those materials for recycling or reuse in order to return them to the economic mainstream in the form of raw material for new, reused, or reconstituted products, which meet the quality standards necessary to be used in the marketplace, or as otherwise defined in 14 CCR Section 17402.5(b)(4). Source separated shall include separation of materials by the generator, responsible party, or responsible party's employee, into specified approved collection containers for the purpose of collection such that source-separated materials are separated from mixed waste for the purposes of collection and processing. 594
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9 EXHIBIT “B”

INSURANCE REQUIREMENTS

INSURANCE REQUIREMENTS

Contractor shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work by the Contractor, their agents, representatives, or employees.

Minimum Scope and Limits of Insurance. Contractor shall maintain limits not less than:

1. Commercial General Liability: coverage written on an occurrence basis with limits not less than $1,000,000 per occurrence and $2,000,000 aggregate for bodily injury, personal injury and property damage. ISO Occurrence Form shall be at least as broad as CG 0001.

Deductibles, Self-Insured Retentions and Other Coverages:

Any deductibles or self-insured retentions must be declared and reviewed by the City of Sunnyvale, Risk Manager. The Contractor shall guarantee payment of any losses and related investigations, claim administration and defense expenses within the deductible or self-insured retention. Policies containing any self-insured retention provision shall provide, or be endorsed to provide, that the SIR may be satisfied by either the Named Insured or the City.

The aforementioned insurance requirements can be met through any combination of selfinsured, primary and excess/umbrella policies that fulfill the stipulated coverage as cited above.

Other Insurance Provisions:

1. During the term of the contract, the City of Sunnyvale, its officers, officials, employees, agents, and volunteers are to be covered as an additional insured in the Contractor’s commercial general liability policy with respect to liability arising out of activities performed by or on behalf of the Contractor; products and completed operations of the Contractor; premises owned, occupied or used by the Contractor.

The coverage shall contain no special limitations on the scope of protection afforded to the City of Sunnyvale, its officers, officials, employees, agents, or volunteers.

Additional Insured Endorsement for ongoing operations at least as broad as ISO CG 20 10 Scheduled, or automatic CG 20 38 and completed operations shall be at least as broad as ISO CG 20 37 scheduled or automatic ISO CG 20 40.

2. For any claims related to this project, the Contractor’s insurance shall be primary.

Any insurance or self-insurance maintained by the City of Sunnyvale, its officers, officials, employees, agents and volunteers shall be excess of the Contractor’s insurance and shall not contribute with it and shall be at least as broad as ISO CG 20 01 04 13.

3. Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City of Sunnyvale, its officers, officials, employees, agents or volunteers.

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10 4. The Contractor’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability.

5. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, cancelled by either party, reduced in coverage or in limits except after thirty (30) days' prior written notice by email to [email protected], has been given to the City.

6. Any umbrella or excess Insurance Liability policies shall be true “following form” of the underlying policy coverage, terms, conditions, and provisions and shall meet all of the insurance requirements stated in this document, including the additional insured, SIR, and primary and non-contributory insurance requirements for the benefit of City (if agreed to in a written contract or agreement) until all coverage carried by or available to the Contractor’s primary and excess liability policies are exhausted and before the City’s own Insurance or self-insurance shall be called upon to contribute to a loss.

7. The policy limits of coverage shall be made available to the full limits of the policy. The minimum limits stated above shall not serve to reduce the Contractor’s policy limits of coverage. Therefore, the requirements for coverage and limits shall be (1) the minimum coverage and limits specified in this agreement, or (2) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured and also available to the Additional Insured, whichever is greater.

Acceptability of Insurers:

Insurance is to be placed with insurers with a current A.M. Best's rating of no less than Superior or Excellent, and who are admitted and authorized to do business and in good standing in California unless otherwise acceptable to the City of Sunnyvale’s Risk Manager.

Verification of Coverage:

City utilizes an electronic insurance verification system to track and verify all insurance related documents. City is no longer accepting insurance documents by mail and will only accept electronic insurance documents. City will email the Contractor requesting proof of insurance for this Agreement through an electronic insurance verification system, which includes instructions on how to upload insurance documents electronically. Contractor shall furnish the City with an electronic Certificate of Insurance effecting the coverage required. The certificates are to be signed by a person authorized by that insurer to bind coverage on its behalf and name City of Sunnyvale, Attn: Risk Management, 456 W. Olive Ave, Sunnyvale, CA 94088 as the certificate holder. All certificates are to be received and approved by the City, Risk Manager prior to commencement of work.

The Contractor shall provide certificate(s) evidencing renewals of all insurance required herein prior to the expiration date of any such insurance. Contractor shall submit insurance certificates, reflecting the policy renewals through the City’s electronic insurance verification system. City reserves the right to require complete, certified copies of all required insurance policies, at any time.

Subcontractors:
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11 Contractor shall require and verify that all subcontractors or other parties hired for this Work, purchase and maintain coverage for indemnity and insurance requirements as least as broad as specified in Subcontractors Minimum scope, Limits and Provisions of Insurance herein, to the extent they apply to the scope of the subcontractor’s work with the same Certificate of Insurance requirements and naming as additional insureds all parties to this Contract. Failure of Contractor to verify existence of subcontractor’s insurance shall not relieve Contractor from any claim arising from subcontractors work on behalf of Contractor.

Contractor shall include the following language in their agreement with Subcontractors:
“Subcontractors hired by Contractor agree to be bound to Contractor and City in the same manner and to the same extent as Contractor is bound to City under the Agreement Documents and provide a valid certificate of insurance and the required endorsements included in the Agreement as proof of compliance prior to commencement of any work and to include this same requirement for any subcontractors they hire for this work. A copy of the Insurance provisions will be furnished to the Subcontractor upon request.” Contractor shall provide proof of such Compliance and verification to the City upon request.

Subcontractors Minimum Scope, Limits and Provisions of Insurance.

The minimum insurance coverage limits and endorsements required herein, do not preclude the Contractor from requiring higher limits or additional insurance coverage as it deems necessary.

1. Commercial General Liability: coverage written on an occurrence basis with limits not less than $3,000,000 per occurrence and $6,000,000 aggregate for bodily injury, personal injury and property damage. ISO Occurrence Form shall be at least as broad as CG 0001.

2. Automobile Liability: coverage with a combined single limit of not less than $2,000,000 per occurrence applying to all owned, non-owned, or hired vehicles used in conjunction with this Agreement for bodily injury and property damage. ISO Form shall be at least as broad as CA 0001.

3. Workers’ Compensation: Statutory Limits and Employer's Liability:
$1,000,000 per accident and per employee for bodily injury or disease.

4. Pollution Liability coverage with limits not less than $2,000,000 per occurrence for bodily injury, property damage, and environmental damage resulting from pollution and related cleanup costs incurred or arising out of any Work to be performed under the Agreement, including liability for and defense of lawsuits and regulatory actions. 597
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RESOLUTION NO. 25-________

A RESOLUTION OF THE CUPERTINO CITY COUNCIL
APPROVING A 10-YEAR AGREEMENT WITH ZANKER ROAD RESOURCE

MANAGEMENT, LLC FOR SOLID WASTE CONSTRUCTION AND
DEMOLITION (C&D) MATERIAL PROCESSING SERVICES; APPROVING A NEW 10-YEAR AGREEMENT WITH INTERNATIONAL DISPOSAL
CORPORATION OF CALIFORNIA, INC., FOR DISPOSAL OF GARBAGE; AND APPROVING A 20-YEAR AGREEMENT WITH THE CITY OF

SUNNYVALE FOR GARBAGE PROCESSING AT THE SUNNYVALE
MATERIALS RECOVERY AND TRANSFER STATION (SMART STATION) .

WHEREAS, pursuant to state constitutional and statutory authority, the City of Cupertino has the authority to regulate the handling of solid waste within its jurisdiction; and
WHEREAS, the City enacted and maintains Municipal Code Chapters 6.24 and 9.16, in part, to satisfy solid waste collection and diversion obligations, and other requirements of the California Integrated Waste Management Act AB 939, Assembly Bill 1826, the Short-Lived Climate Pollutants Bill of 2016 SB 1383, and related laws and regulations; and
WHEREAS, the City has determined that post-collection management of solid waste, which includes garbage and construction and demolition debris, is a health, sanitary, and safety measure necessary for the promotion, protection, and preservation of the health, safety, and general welfare of the people of the City; and
WHEREAS, in 1989 and as renewed in 2002 and extended in 2023, the City entered into an agreement with International Disposal Corporation of California, Inc. for disposal of garbage and construction and demolition debris the term of which is scheduled to expire on November 20, 2025; and
WHEREAS, on May 2, 2023, the City Council directed City staff to issue an RFP to solicit and negotiate new agreements for needed services, including consideration of processing garbage; and
WHEREAS, after conducting thorough due diligence with the assistance and support of expert advisors, the City has determined that the chosen service providers and negotiated agreements meet the service-related goals for the City 598
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Resolution No. __________________

and assure the community continued high levels of service at competitive rates; and
WHEREAS, processing of garbage and construction and demolition debris for increased recovery of recyclable materials and diversion from landfill is supported by the City’s adopted Climate Action Plan 2.0 under action item W1.2, supports the City’s Zero Waste Policy (Resolution 17-122), supports Policy INF-7.1 in the City’s General Plan, and was recommended by the City’s Sustainability Commission on October 17, 2024; and
WHEREAS, as permitted by Cupertino Municipal Code (CMC) section

3.22.070 B.1, the City conducted negotiations with the City of Sunnyvale regarding use of the SMaRT Station for processing of garbage to reduce garbage going to landfill; and
WHEREAS, no California Environmental Quality Act impact is anticipated and any needed Negative Declarations will be prepared before commencement of chosen services and facilities,
NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby:

1. Approve the execution of an agreement with Zanker Road Resource Management, LLC for solid waste construction and demotion (C&D) material processing services to begin November 21, 2025, with a 10-year term.

2. Approve the execution of an agreement with International Disposal Corporation of California, Inc., for disposal of garbage at Newby Island Sanitary Landfill Facility with a ten year term.

3. Approve the execution of a partner agreement with the City of Sunnyvale for garbage processing at the Sunnyvale Materials Recovery and Transfer Station (SMaRT Station) and residue disposal for a term of 20 years.

Delivery of garbage and payment of per-ton fees would only commence upon completion of facility upgrades (expected by end of calendar year 2026).

4. Approve use of $35,000 from Resource Recovery Fund 520 to cover differences in disposal and C&D processing cost during the period between November 21, 2025 and January 31, 2026, allowing customer rates to remain unchanged until the beginning of Recology’s Rate Period 6, which begins February 1, 2026.
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Resolution No. __________________

BE IT FURTHER RESOLVED that this Resolution is not a project under the requirements of the California Environmental Quality Act, together with related State CEQA Guidelines (collectively, “CEQA”) because it has no potential for resulting in physical change in the environment. In the event that this Resolution is found to be a project under CEQA, it is subject to the CEQA exemption contained in CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have no possibility that the action approved may have a significant effect on the environment. CEQA applies only to actions which have the potential for causing a significant effect on the environment. Where it can be seen 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 CEQA. In this circumstance, the proposed action [describe the action] would have no or only a de minimis effect on the environment [because…]. The foregoing determination is made by the City Council in its independent judgment.

PASSED AND ADOPTED at a regular [or special] meeting of the City Council of the City of Cupertino this ____day of _________, ____, by the following vote:

Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Liang Chao, Mayor
City of Cupertino
________________________
Date
ATTEST:
________
Kirsten Squarcia, City Clerk
________________________
Date
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Resolution No. __________________

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Attachment B
RESOLUTION NO. 25-__________

A RESOLUTION OF THE CUPERTINO CITY COUNCIL AMENDING THE OPERATING BUDGET FOR FISCAL YEAR 2025-26 BY APPROPRIATING

MONIES FOR SPECIFIED FUNDS
WHEREAS, the orderly administration of municipal government depends on a sound fiscal policy of maintaining a proper ratio of expenditures within anticipated revenues and available monies; and
WHEREAS, accomplishing City Council directives, projects, and programs and performing staff duties and responsibilities likewise depends on the monies available for that purpose; and
WHEREAS, the City Manager has determined that the balance of the funds specified in this resolution is adequate to cover the proposed transfer appropriations and therefore recommends the fund reallocation described herein.

NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby approve the recommended fund transfer and ratifies the attached amended appropriations as set forth in Exhibit A.

PASSED AND ADOPTED at a special meeting of the City Council of the City of Cupertino this 17
th day of June 2025, by the following vote:

Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:
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Resolution No. __________

SIGNED:
________
Liang Chao, Mayor
City of Cupertino
________________________
Date
ATTEST:
________
Kirsten Squarcia, City Clerk
________________________
Date
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Resolution No. __________

EXHIBIT A
Appropriation Amendment
by Fund
Appropriation
Amendment
Revenue
Amendment
Fund Balance
(Use of)
Resource Recovery Fund (520) $35,000 $- ($35,000)
Total Appropriation
Amendment All Funds $35,000 $- ($35,000)
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CITY OF CUPERTINO
Agenda Item
25-14039 Agenda Date: 6/17/2025
Agenda #: 14.

Subject: Introduce Municipal Code amendments to Cupertino Municipal Code, Title 2, Chapter 2.96, Sections 2.96.010 Established-Composition and 2.96.020 Terms of Office, pertaining to the Economic Development Committee.

1. Conduct the first reading of Ordinance 25-2273 “An Ordinance of the City Council of the City of Cupertino Amending City Code Title 2 Chapter 2.96 Economic Development Committee, Section

2.96.010 Established-Composition and Section 2.96.020 Terms of Office.”

2. Find that the proposed actions are exempt from CEQA.

CITY OF CUPERTINO Page 1 of 1 Printed on 6/11/2025
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CITY COUNCIL STAFF REPORT
Meeting: June 17, 2025
Subject
Introduce Municipal Code amendments to Cupertino Municipal Code, Title 2, Chapter 2.96, Sections 2.96.010 Established-Composition and 2.96.020 Terms of Office, pertaining to the Economic Development Committee.

Recommended Action

1. Conduct the first reading of Ordinance 25-_____ “An Ordinance of the City Council of the City of Cupertino Amending City Code Title 2 Chapter 2.96 Economic Development Committee, Section 2.96.010 Established-Composition and Section 2.96.020 Terms of Office.”

2. Find that the proposed actions are exempt from CEQA.

Reason for Recommendation
Background
On April 15, 2025, the City Council approved Ordinance 25-2269 reestablishing the Economic Development Committee (“EDC”). It was determined that the following would be advisable: (a) replacing the Sustainability Commission representative on the EDC with a representative from the Planning Commission, and (b) clarifying term lengths for Commissioners and Councilmembers to ensure alignment with the terms of their respective Commissioner or Councilmember offices, and (c) clarifying term lengths for industry sector representatives to stagger their four-year terms.

This proposed Ordinance would update the City’s Municipal Code to achieve all three objectives as follows:

1. Given the Committee’s role in advising the City Council on economic development policy, replacing the Sustainability Commissioner with a 606
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Planning Commissioner is advisable. The Planning Commission activities such as land use and zoning regulations play a role in shaping the city’s economic environment, making its representative a more relevant contributor to the Committee’s mission. In contrast, the Sustainability Commission’s scope is narrower, focusing on advising policies related to Cupertino’s Climate Action Plan and the General Plan’s Environmental Resources/Sustainability Element, with an emphasis on sustainability. (See CMC 2.94.080). The EDC will benefit from the Planning Commissions broader scope as it makes recommendations to the City Council on a broad range of strategic matters applicable to the City’s economic development goals.

2. Updating Committee Members terms for the EDC representatives from the City Council and the Commissions is necessary to ensure that the terms of these EDC members conclude when their terms with the other City bodies conclude.

3. Updating the industry sector representatives’ initial terms such that their terms do not all conclude in the same year. Rather, two industry sector representatives’ terms will be two years, expiring January 30, 2027, and three of their terms will be four years, expiring January 30, 2029.

Next Steps:

If the ordinance is not adopted, a Sustainability Commissioner will be chosen to serve on the EDC and the terms for each commissioner and councilmember will not be aligned with their terms in the other City bodies. This may cause confusion and will not ensure Committee members rotate off the EDC when their other Commission or City Council terms conclude. Additionally, four committee members' terms will end simultaneously, which may impact operational stability.

Sustainability Impact
No sustainability impact.

Fiscal Impact
There are no fiscal impacts associated with these updates.

City Work Program Item/Description
None
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Council Goal
Public Engagement and Transparency
California Environmental Quality Act
Not applicable.
_____________________________________
Prepared by: Floy Andrews, City Attorney
Reviewed by: Daniel Degu, Economic Development Manager
Approved for Submission by: Tina Kapoor, Acting City Manager Attachments:

A – Draft Ordinance – redline
B – Draft Ordinance – clean
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01276.0001 2011584.1 6/8/2025
ORDINANCE NO. 25-____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO AMENDING CITY CODE TITLE 2
CHAPTER 2.96: ECONOMIC DEVELOPMENT COMMITTEE
SECTION 2.96.010: ESTABLISHED-COMPOSITION, AND
SECTION 2.96.020: TERMS OF OFFICE
The City Council of the City of Cupertino finds that:

1. On March 18, 2025 the City Council enacted an Ordinance No. 25-2269____ reestablishing the Economic Development Committee (EDC).

2. A member of the Planning Commission should serve on the EDC rather than a member of the Sustainability Commission.

3. The terms of EDC members representing the City Council and the two Commissions require updating to rationalize the terms of those EDC members with the terms of their other City Council or Commission assignments.

NOW, THEREFORE, THE CITY COUNCIL OF THE OF CITY OF CUPERTINO DOES ORDAIN AS FOLLOWS:

SECTION 1: Adoption.

The Cupertino Municipal Code is hereby amended to add Chapter 2.96 as set forth in Attachment A.

SECTION 2: Severability and Continuity.

The City Council declares that each section, sub-section, paragraph, sub-paragraph, sentence, clause and phrase of this ordinance is severable and independent of every other section, sub-section, paragraph, sub-paragraph, sentence, clause and phrase of this ordinance. If any section, sub-section, paragraph, sub-paragraph, sentence, clause or phrase of this ordinance is held invalid, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, the City Council declares that it would have adopted the remaining provisions of this ordinance irrespective of such portion, and further declares its express 609
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Ordinance No. ___________________

01276.0001 2011584.1 6/8/2025
intent that the remaining portions of this ordinance should remain in effect after the invalid portion has been eliminated.

SECTION 3: California Environmental Quality Act.

This Ordinance is not a project under the requirements of the California Environmental Quality Act, together with related State CEQA Guidelines (collectively, “CEQA”) because it has no potential for resulting in physical change in the environment. In the event that this Ordinance is found to be a project under CEQA, it is subject to the CEQA exemption contained in CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have no possibility that the action approved may have a significant effect on the environment. CEQA applies only to actions which have the potential for causing a significant effect on the environment. Where it can be seen 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 CEQA. In this circumstance, the amendments to the Municipal Code would have no or only a de minimis effect on the environment. The foregoing determination is made by the City Council in its independent judgment.

SECTION 4: Effective Date.

This Ordinance shall take effect thirty days after adoption as provided by Government Code Section 36937.

SECTION 5: Publication.

The City Clerk shall give notice of adoption of this Ordinance as required by law.

Pursuant to Government Code Section 36933, a summary of this Ordinance may be prepared by the City Clerk and published in lieu of publication of the entire text. The City Clerk shall post in the office of the City Clerk a certified copy of the full text of the Ordinance listing the names of the City Council members voting for and against the ordinance.

INTRODUCED at a regular meeting of the Cupertino City Council on June 17, 2025, and ENACTED at a regular meeting of the Cupertino City Council on ___________, by the following vote:

Members of the City Council
AYES:

NOES:

ABSENT:
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Ordinance No. ___________________

01276.0001 2011584.1 6/8/2025
ABSTAIN:

SIGNED:
_______________________________
Liang Chao, Mayor City of Cupertino
_______________________________
Date
ATTEST:
_______________________________
Kirsten Squarcia, City Clerk
_______________________________
Date
APPROVED AS TO FORM:
_______________________________
Floy E. Andrews, City Attorney
_______________________________
Date
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01276.0001 2011584.1 6/8/2025 Attachment A – Page 1
ATTACHMENT A - Chapter 2.96: Economic Development Committee The sections of the Cupertino Municipal Code set forth below are amended or adopted as follows:

2.96.010 Established–Composition.

A. The Economic Development Committee of the City of Cupertino is re-established.

The Economic Development Committee (hereinafter referred to in this Chapter as “Committee”) shall consist of nine (9) members as follows:

1. City Councilmember

2. City Councilmember

3. Technology Sector Business Representative

4. Retail/Small Business Representative

5. Hospitality/Tourism Sector Representative

6. Education Sector Representative

7. Commercial Real Estate Representative

8. Sustainability Planning Commissioner

9. Technology, Information, and Communications Commissioner B. The Committee shall be comprised of: (1) two Councilmembers; (2) one representative from each of the following industry sectors – Technology, Retail, Hospitality, Education, and Commercial Real Estate; and (3) one member who is currently serving on the Sustainability Planning Commission; and (4) one member who is currently serving on the Technology, Information, and Communications Commissions. Industry sector representatives must work for an organization located within the City or be residents of the City, or both.

C. None of the industry sector representative Committee Members shall be officials or employees of the City. No member of the Committee shall cohabit with, as defined by law, nor be related by blood or marriage, to any other member of the Committee, to the City Manager, or to any staff person(s) who may be assigned to assist this Committee.

D. Members of the Committee shall be appointed by the City Council. 612
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01276.0001 2011584.1 6/8/2025 Attachment A – Page 2

2.96.020 Terms of Office.

A. Committee Members serve at the pleasure of the City Council. The term of office for the Committee’s Members industry sector representative shall be staggered with the initial appointment of five two members to terms expiring January 30, 2027, and three two-year terms and four members to four-year terms expiring January 30, 2029. Following the initial appointment, all of the Committee’s industry sector representatives members shall be appointed to four-year terms.

The initial term of office of the City Councilmembers, Planning Commissioner and Technology, Information, and Communications Commissioner shall have terms expiring January 30, 2027. Following the initial appointment, the term of office for the City Councilmembers, Planning Commissioner and Technology, Information, and Communications Commissioner shall be for a term of one year, expiring on January 30 of each year, or until a successor is duly appointed. If a Committee Member is replaced or removed by Council, resigns, or is no longer eligible to serve on the Committee, Council shall appoint a replacement to serve the remaining period of the Committee Member’s term. All terms shall end on January 30 of the year the term is due to expire. No Committee Member shall serve more than two consecutive terms, except that a Committee Member may serve more than two consecutive terms if he or she has been appointed to the Committee to fill an unexpired term of less than two years.

B. The appointment, reappointment, and rules governing industry sector representative Committee Members are governed by the Resolution of the Cupertino City Council which governs advisory bodies.

C. The City Council may in its discretion adopt different policies, procedures, and terms of service for the appointment of City Councilmembers and Commissioners to serve on the Committee.
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01276.0001 2011584.1 6/8/2025
ORDINANCE NO. 25-____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO AMENDING CITY CODE TITLE 2
CHAPTER 2.96: ECONOMIC DEVELOPMENT COMMITTEE
SECTION 2.96.010: ESTABLISHED-COMPOSITION, AND
SECTION 2.96.020: TERMS OF OFFICE
The City Council of the City of Cupertino finds that:

1. On March 18, 2025 the City Council enacted an Ordinance No. 25-2269 reestablishing the Economic Development Committee (EDC).

2. A member of the Planning Commission should serve on the EDC rather than a member of the Sustainability Commission.

3. The terms of EDC members representing the City Council and the two Commissions require updating to rationalize the terms of those EDC members with the terms of their other City Council or Commission assignments.

NOW, THEREFORE, THE CITY COUNCIL OF THE OF CITY OF CUPERTINO DOES ORDAIN AS FOLLOWS:

SECTION 1: Adoption.

The Cupertino Municipal Code is hereby amended to add Chapter 2.96 as set forth in Attachment A.

SECTION 2: Severability and Continuity.

The City Council declares that each section, sub-section, paragraph, sub-paragraph, sentence, clause and phrase of this ordinance is severable and independent of every other section, sub-section, paragraph, sub-paragraph, sentence, clause and phrase of this ordinance. If any section, sub-section, paragraph, sub-paragraph, sentence, clause or phrase of this ordinance is held invalid, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, the City Council declares that it would have adopted the remaining provisions of this ordinance irrespective of such portion, and further declares its express 614
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Ordinance No. ___________________

01276.0001 2011584.1 6/8/2025
intent that the remaining portions of this ordinance should remain in effect after the invalid portion has been eliminated.

SECTION 3: California Environmental Quality Act.

This Ordinance is not a project under the requirements of the California Environmental Quality Act, together with related State CEQA Guidelines (collectively, “CEQA”) because it has no potential for resulting in physical change in the environment. In the event that this Ordinance is found to be a project under CEQA, it is subject to the CEQA exemption contained in CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have no possibility that the action approved may have a significant effect on the environment. CEQA applies only to actions which have the potential for causing a significant effect on the environment. Where it can be seen 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 CEQA. In this circumstance, the amendments to the Municipal Code would have no or only a de minimis effect on the environment. The foregoing determination is made by the City Council in its independent judgment.

SECTION 4: Effective Date.

This Ordinance shall take effect thirty days after adoption as provided by Government Code Section 36937.

SECTION 5: Publication.

The City Clerk shall give notice of adoption of this Ordinance as required by law.

Pursuant to Government Code Section 36933, a summary of this Ordinance may be prepared by the City Clerk and published in lieu of publication of the entire text. The City Clerk shall post in the office of the City Clerk a certified copy of the full text of the Ordinance listing the names of the City Council members voting for and against the ordinance.

INTRODUCED at a regular meeting of the Cupertino City Council on June 17, 2025, and ENACTED at a regular meeting of the Cupertino City Council on ___________, by the following vote:

Members of the City Council
AYES:

NOES:

ABSENT:
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Ordinance No. ___________________

01276.0001 2011584.1 6/8/2025
ABSTAIN:

SIGNED:
_______________________________
Liang Chao, Mayor City of Cupertino
_______________________________
Date
ATTEST:
_______________________________
Kirsten Squarcia, City Clerk
_______________________________
Date
APPROVED AS TO FORM:
_______________________________
Floy E. Andrews, City Attorney
_______________________________
Date
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01276.0001 2011584.1 6/8/2025 Attachment A – Page 1
ATTACHMENT A - Chapter 2.96: Economic Development Committee The sections of the Cupertino Municipal Code set forth below are amended or adopted as follows:

2.96.010 Established–Composition.

A. The Economic Development Committee of the City of Cupertino is re-established.

The Economic Development Committee (hereinafter referred to in this Chapter as “Committee”) shall consist of nine (9) members as follows:

1. City Councilmember

2. City Councilmember

3. Technology Sector Business Representative

4. Retail/Small Business Representative

5. Hospitality/Tourism Sector Representative

6. Education Sector Representative

7. Commercial Real Estate Representative

8. Planning Commissioner

9. Technology, Information, and Communications Commissioner B. The Committee shall be comprised of: (1) two Councilmembers; (2) one representative from each of the following industry sectors – Technology, Retail, Hospitality, Education, and Commercial Real Estate; and (3) one member who is currently serving on the Planning Commission; and (4) one member who is currently serving on the Technology, Information, and Communications Commissions. Industry sector representatives must work for an organization located within the City or be residents of the City, or both.

C. None of the industry sector representative Committee Members shall be officials or employees of the City. No member of the Committee shall cohabit with, as defined by law, nor be related by blood or marriage, to any other member of the Committee, to the City Manager, or to any staff person(s) who may be assigned to assist this Committee.

D. Members of the Committee shall be appointed by the City Council. 617
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01276.0001 2011584.1 6/8/2025 Attachment A – Page 2

2.96.020 Terms of Office.

A. Committee Members serve at the pleasure of the City Council. The term of office for the Committee’s industry sector representative shall be staggered with the initial appointment of two members to terms expiring January 30, 2027, and three members to terms expiring January 30, 2029. Following the initial appointment, all of the Committee’s industry sector representatives shall be appointed to four-year terms. The initial term of office of the City Councilmembers, Planning Commissioner and Technology, Information, and Communications Commissioner shall have terms expiring January 30, 2027. Following the initial appointment, the term of office for the City Councilmembers, Planning Commissioner and Technology, Information, and Communications Commissioner shall be for a term of one year, expiring on January 30 of each year, or until a successor is duly appointed. If a Committee Member is replaced or removed by Council, resigns, or is no longer eligible to serve on the Committee, Council shall appoint a replacement to serve the remaining period of the Committee Member’s term. All terms shall end on January 30 of the year the term is due to expire. No Committee Member shall serve more than two consecutive terms, except that a Committee Member may serve more than two consecutive terms if he or she has been appointed to the Committee to fill an unexpired term of less than two years.

B. The appointment, reappointment, and rules governing industry sector representative Committee Members are governed by the Resolution of the Cupertino City Council which governs advisory bodies.

C. The City Council may in its discretion adopt different policies, procedures, and terms of service for the appointment of City Councilmembers and Commissioners to serve on the Committee.
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CITY OF CUPERTINO
Agenda Item
25-14045 Agenda Date: 6/17/2025
Agenda #: 15.

Subject: Options on preservation and anti-displacement of Below Market Rate (BMR) units; Consider approval of BMR Anti-Displacement Policy
Receive presentation on preservation and anti-displacement for tenants residing in expiring Below Market Rate units in market rate developments for adoption; Adopt Resolution No. 25-051 (Attachment A) approving amendments to the BMR Admin Manual to create an anti-displacement policy for tenants residing in expiring Below Market Rate units CITY OF CUPERTINO Page 1 of 1 Printed on 6/11/2025
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CITY COUNCIL STAFF REPORT
June 17, 2025
Subject
Options on preservation and anti-displacement of Below Market Rate (BMR) units; Consider approval of BMR Anti-Displacement Policy
Recommended Action
Receive presentation on preservation and anti-displacement for tenants residing in expiring Below Market Rate units in market rate developments for adoption; Adopt Resolution No. 25-000X (Attachment A) approving amendments to the BMR Admin Manual to create an anti-displacement policy for tenants residing in expiring Below Market Rate units.

Executive Summary
Within the City of Cupertino, certain affordable rental units within market rate developments have upcoming expirations. Low-income tenants of these units are facing displacement due to disproportionately high rent increases (approximately 200% - 250%) as the landlords will be able to re-establish market rate rents upon expiration. To address this issue, staff recommends that Council adopt the proposed resolution to enact priority replacement in the BMR waitlist and require relocation assistance from landlords to displaced tenants as a BMR Anti-Displacement Policy. The purpose of the policy is to rehome low-income households and prevent homelessness.

Background
BMR Housing Mitigation Program
The City’s Housing Mitigation Program (BMR Program) was adopted in 1992 to generate affordable housing. The ordinance requires developers to provide a specified number of affordable owner-occupied and rental units. BMR for-sale units are made available to median and moderate-income households. BMR rental units are made available to low and very low-income households. The development of BMR units and collection of associated fees is governed by the BMR Housing Mitigation Program Procedural Manual.

The units are managed in accordance with City Council adopted guidelines, separately known as the Procedures Manual of Administering Deed Restricted Affordable Housing Units (BMR Admin Manual), both of which are available for viewing on the City’s 620
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Housing website(https://www.cupertino.gov/Your-City/Departments/CommunityDevelopment/Housing).

Expiring BMR Rental Units
The City of Cupertino administers BMR inclusionary rental units in seven market rate developments that have an expiration date. Three of the seven properties are set to expire in 2026, potentially leading to displacement of the 39 low-income tenants currently housed in those units within the next two years. The June 7, 1999 update of the BMR Housing Mitigation Program Procedural Manual avoids this issue for new development by assigning the term of affordability to run with either a term of 99 years or for the life of the property. However, there is not a policy in place to address displacement when units built prior to the enaction of the 1999 regulations expire. Overall, the City will see a total of 114 affordable rental units expire by 2040. To avoid displacement of the lowincome tenants of these units, the City may consider adopting new policies for expiring rental units. For best practices, any new policy should be enacted by June 2025 in order to provide enough time to notify tenants in preparation of potentially needing to find new housing. Tenants of expiring BMR units face unique challenges being either low income (80% Area Median Income), very low income (50% Area Median Income) or extremely low income (30% Area Median Income). Based on demographic research of the first three expiring buildings, about 61% of the tenants in the program are over the age of 50, the average household size is 2.4 people, and the average household has participated in the program for 6 years. The full list of expiring BMR rental units at risk of converting to market rate upon expiration has been included in Figure 1 below:

Figure 1: BMR Rental Units at Risk of Converting to Market Rate Property
# of Expiring
Units
Total BMR
Units
Date of Expiring
Restrictions
Property Owner
Aviare 20 22 7/8/2026 Legacy Partners
Forge Homestead 15 15 7/15/2026
De Anza
Properties
Park (City Center) 4 4 7/8/2026 Prometheus
Hamptons 34 34 10/20/2027 Irvine Company
Arioso 20 20 1/29/2028 FPI Management
Biltmore 2 2 8/30/2029 Prometheus
Aviare 2 22 7/8/2038 Legacy Partners
Markham 17 17 11/4/2039 Prometheus
TOTAL 119 119 2040
In October 2024, staff contacted property management of the three properties with units set to expire in 2026 to ensure that proper noticing was sent to tenants to inform them of their expiring affordability restrictions. When it was found that two of the three had not sent out proper noticing to their tenants, staff worked with property owners to ensure that noticing was sent out using approved templates from the California Department of 621
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Housing and Community Development (HCD) and that as injunctive relief to affected tenants, the affordability restrictions would be reimposed with new expiration dates falling three years from the date of notice provided, in accordance with Government Code 65863.10. For the remaining property set to expire in 2026, staff contacted property management to inquire if they had interest in extending the affordability terms, but received a response that they were not interested in exploring that option.

Alternative Strategies Explored
Acquisition Preservation
In accordance with policy requirements of Housing Element strategy HE-3.3.2, staff studied the feasibility of re-restricting expiring units through acquisition preservation.

This process involves purchasing expiring units to be owned by the City and maintained as affordable in the BMR program. Inclusionary affordable housing units are required to be provided in market rate projects at a ratio of 15% of total units in the development. Rerestricting BMR units via acquisition would require the purchase of entire apartment buildings to preserve each handful of units, as rental units cannot be bought separately.

This exponentially raises the costs of preservation. Acquiring all buildings which contain expiring BMR units would cost an estimated $523 million dollars, based on the recent McClellan Terrace acquisition as a current local case study. As the City currently has a total balance of $4.8 million dollars in the Below Market Rate fund, this strategy was determined to be infeasible to prevent displacement of the 114 expiring units. The City is also not able to purchase the affordable units separately from the rest of the building without the property owner first completing a condominium conversion, which in turn cannot be completed without the property owner first completing an antidisplacement/relocation plan for all tenants of the building, as the conversion of apartment buildings to condominiums would also have an effect of increasing housing costs and leading to further displacement.

In summary, the strategy of acquisition preservation was found to be infeasible both due to legal constraints and fiscal impacts. Knowing this, staff began to work on the next action item prescribed by HE-3.3.2, which is to work with tenants and organizations to reduce displacement. During this process, it was recommended by both RISE Housing (the City’s BMR administrator) and West Valley Community Services (the City’s former BMR administrator) to pursue an BMR Anti-Displacement Policy to protect tenants of units with expiring restrictions in market rate developments. Staff sought legislative feedback from the Housing Commission during the December 19, 2024 meeting in which a study session was held on anti-displacement, with various alternative strategies to be studied were considered. During this session, the commission recommended that staff draft a BMR Anti-Displacement Policy to be presented to the City Council for approval.

Rent Stabilization
As outlined in Housing Element Strategy HE-3.3.6, staff also explored the possibility of preserving affordable housing units through rent stabilization. Upon review, it was found that the stipulations of the Tenant Bill of Rights Act (2019), also known as AB 1482, state 622
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that an owner of an affordable housing unit subject to a regulatory restriction (that is not within an assisted housing development) is authorized to establish the initial rental rate for the unit upon the expiration of the restriction. Therefore, it would not be possible to enact rent stabilization for inclusionary BMR units to preserve them at their respective affordability levels without contradicting state law. However, rent stabilization may continue to be studied as part of a larger Anti-Displacement Strategy for non-deed restricted rental units in the City at-large.

Deposit/Fee Regulations
During the December 19, 2024 Housing Commission study session, a commissioner proposed a potential alternative strategy to consider. The proposal would be to introduce regulations that require landlords to provide primary source documentation prior to charging fees to tenants related to maintenance to the unit, particularly when deducting from deposits. This strategy would not be able to address the displacement faced by tenants of expiring BMR rental units, which is due to disproportionately high rent increases. However, adopting such a policy for all rental units could help reduce housing costs throughout the City. Deposit/fee regulations could continue to be studied as part of the larger Anti-Displacement Strategy.

Eviction/Legal Defense
This strategy is a broad term for protections enacted to prevent eviction or protect tenants that are evicted from their homes. This could involve expanding on just-cause eviction protections of state law, creating protections through municipal code and land-use that reinforce no-net loss provisions, or using local funds to enact agreements with legal defense organizations such as Bay Area Legal Aid to represent tenants served unlawful detainers and enforce these enacted laws. While this strategy would not address the type of displacement faced by tenants of expiring BMR units, it would be an important strategy to include as part of the Anti-Displacement Strategy for renters in the City at-large.

County BMR Waitlist
This strategy would be to add Cupertino BMR Displaced Tenants as a priority for replacement on the County of Santa Clara’s BMR waitlist. City staff consulted with County staff during a meeting on May 21, 2025 to discuss this possibility. During discussions, it was found that the County does not manage a centralized BMR waitlist, but rather, allows individual developers to maintain applicant lists for each of their properties. To enact this strategy, the City would need to negotiate with developers with in-progress projects to include Cupertino BMR Displaced Tenants as a priority for applicant intake in exchange for financial contribution to the project. In practice, this policy would only be legally enforceable if the County’s project is physically located in the City of Cupertino, as creating a policy that exclusively relocates Cupertino low-income households to a geographic locations outside of the City would raise fair housing concerns as an exclusionary practice. For these reasons, this strategy was not pursued to be part of the BMR Anti-Displacement Policy.
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Anti-Displacement Incentives
This strategy would be to negotiate with individual property owners of buildings with expiring BMR units to extend the length of their affordability restriction in return for development concessions in future projects. Success of this strategy is contingent both on each property owner’s willingness to negotiate with the City (which is dependent on their current interest in doing further development in the City) and on agreements being enacted prior to the restriction of their units to keep the tenants housed. Overall, this strategy may have the potential to successfully extend some expirations, but due to the time constraints, this would be difficult to enact for many of the units that have earlier restriction expiration dates. Under the Council’s direction, this could be a strategy to pursue supplementally as part of staff workplan, in addition to the dual components of the BMR Anti-Displacement Strategy as recommended by the Housing Commission included below.

Anti-Displacement Policy
In the City of Cupertino 2023-2031 Housing Element, Strategies HE-3.3.2 and HE-3.3.6 commit the City to ensuring that all proper legal procedures are followed for expiring rental BMR units, that staff work with tenants and local organizations to prevent displacement if preservation is not feasible, and that a study for an anti-displacement policy is completed and a policy to protect tenants is enacted. For best practices, since the first BMR rental units will expire in July 2026, staff has worked to have a policy enacted by June 2025 to allow tenants to make use of a full 12 months of protections before their unit expires. Staff has met with RISE Housing and West Valley Community Services to discuss and explore different options for addressing the issue of displacement of lowincome tenants in expiring units and to satisfy the requirements of the Housing Element.

The organizations suggested that the City develop an anti-displacement policy for BMR tenants to be brought to the Housing Commission for study. Multiple options were presented during a study session held at a Special Meeting of the Housing Commission on December 19, 2024, in which the commission voted unanimously (5-0-0-0) to pursue two options as dual components of a single BMR Anti-Displacement Policy. City Staff consulted with housing staff in other jurisdictions to determine best practices and procedures for anti-displacement around the Bay Area. These cities include but are not limited to: Redwood City, Sunnyvale, Campbell, Mountain View, San Leandro, San Mateo, Santa Clara, Santa Clara County, and more. Staff held public outreach and engaged with the local community during the Housing Resource Fair on April 21, 2025, and received positive feedback in support of the BMR Anti-Displacement Policy.

Component 1: Anti-Displacement BMR Waitlist Priority
The City’s BMR waitlist contains a system of awarding priority points to applicants who are already Cupertino residents, who have employment in the City, and are public employees within Cupertino. During the BMR Housing Lottery process, applicants are separated into “rounds” with the applicants with the highest amount of priority points going in the first round, and then randomly assigned numbers. The number would then determine the order in which they are picked for units within that round. Afterwards, a 624
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new round would be completed with applicants with less priority points and the process would repeat until no more units are available. The first component of the BMR AntiDisplacement policy would be to create three additional points awarded to a new category for displaced BMR rental tenants: if a person is or was a tenant of a BMR unit expiring within 12 months. This would allow them to expedite their rehousing process when reapplying into the City’s BMR program with the highest priority. In addition to amending the BMR waitlist, staff are simultaneously negotiating to have anti-displacement priority worked into the Conditions of Approval for the Vallco Rise project, to ensure that projects outside of the City’s primary BMR waitlist also have anti-displacement measures. This would provide a long-term structural solution to the issue of expiring BMR rental units, but may still result in some short-term displacement, as it would be highly dependent on new BMR units becoming available in time.

Component 2: Anti-Displacement Relocation Assistance
The costs of tenant relocation often exceed the budget of a low-income household. These costs can include paying for movers and storage during the transition while also paying for application fees and deposits to their new place of residence. Furthermore, it is common practice amongst landlords to charge new tenants payment for the first and last month of rent prior to move in. The second component of the BMR Anti-Displacement Policy would be to add a responsibility of property owners of deed restricted affordable units to reimburse displaced tenants through relocation assistance. A displaced tenant would be defined as a household which moves out of a BMR rental unit before or after 12 months of the expiration date into a market rate unit. Relocation assistance would be a payment equal to the amount of (3) three months of Fair Market rent based on the tenant’s unit size, and up to (1) additional month for special circumstance households (such as with elderly or disabled members), which is common practice in neighboring jurisdictions. The 2024 Santa Clara County Fair Market Rents have been included in Figure 2 below:

Figure 2: 2024 Santa Clara County Fair Market Rent
Unit Size Studio 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed 6 Bed
Fair Market Rent $2,383 $2,694 $3,132 $4,011 $4,425 $5,089 $5,753 3x $7,149 $8,082 $9,396 $12,033 $13,275 $15,267 $17,259 This would allow for short-term intervention for households at risk of experiencing displacement by subsidizing the rehousing process, but only temporarily avoids displacement until the period of assistance ends. It would also incentivize landlords to offer reasonably affordable rents for an additional one-year term after the date of expiration if they wished to avoid paying relocation assistance.

Relocation assistance is a common policy used by neighboring jurisdictions as both a tool for aiding the rehousing process and to disincentivize displacement. Overall, Cupertino’s proposed relocation assistance policy would be most similar to San Leandro’s, which 625
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triggers upon when a tenant decides to vacate their unit after receiving a disproportionately high rent increase (more than 12%), and requires the landlord to make a direct payment to the tenant of 3 months fair market rent to the tenant. Examples of relocation assistance policies in nearby jurisdictions have been included in Figure 3 below:
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Figure 3: Relocation Assistance Nexus Study
City Term of Assistance Activation Notice Eligibility Time Available
Service Agency
Service
Enforcement
Redwood
City
3 months FMR and 1
month special
circumstance
Eviction/Withdraw 30 days after
filing
application
80% or
lower
Within 30
days
3rdparty
escrow
60 day
subscription
Void
Application
East Palo
Alto
$9,444.11 in unit <2
years, $12,592.14 for
2+ years
Eviction/Withdraw 120 days prior
to withdraw
80% or
lower
Immediately
upon notice
City
escrow
None Void
Application
Menlo
Park
3 months FMR and 1
month special
circumstance
Eviction/Withdraw 30 days after
filing
application
80% or
lower
Within 30
days
3rdparty
escrow
60 day
subscription
Affirmative
Defense
San
Leandro
3 months FMR and 1
month special
circumstance
Landlord
Termination
90 days/at time
of rent increase
All AMI Within 5
days
Direct None Affirmative
Defense
Mountain
View
3 months FMR and 1
month special
circumstance
Eviction/Withdraw 30 days after
filing
application
120% or
lower
Within 30
days
3rdparty
escrow
60 day
subscription
Affirmative
Defense
Santa
Clara
County
3 months FMR and 1
month special
circumstance
Eviction/Hazard Immediately
upon
application
All AMI Within 15
days
Direct None Affirmative
Defense
Sunnyvale 3 months FMR and 1
month special
circumstance
Eviction/Withdraw 30 days prior
to termination
All AMI Within 15
days
Direct None Affirmative
Defense
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Reasons for Recommendation
To satisfy deadlines set by the Housing Element and to ensure protections are made for low-income BMR tenants 12 months prior to their expirations, staff recommends adopting the resolution to approve the BMR Anti-Displacement policy as presented while adding direction for staff to continue to study other alternative strategies as part of a larger Anti-Displacement Strategy for the City at-large. Pursuing both options as recommended by the Housing Commission ensures the most comprehensive protection for low-income tenants of inclusionary BMR units in market rate projects. Enacting both options would subsidize the rapid rehousing of low-income households in danger of experiencing displacement and create a structural solution in the priority system of the BMR waitlist that places anti-displacement at the highest level of concern. However, to ensure that displacement is mitigated to the highest degree possible, in addition to enacting both components of the BMR Anti-Displacement Policy, it should still remain a high priority to produce new deed-restricted affordable housing units to permanently re-home the affected tenants.

Throughout development of the policy, several alternative anti-displacement strategies were explored, with some found to be infeasible while others were found to hold opportunities if explored from a broader lens than the BMR program. These other strategies include rent stabilization, eviction/legal defense, and deposit/fee regulations.

With the Council’s direction, this could continue to be studied as part of staff workplan and brought forth before the Housing Commission as part of a larger Anti-Displacement Strategy. This strategy would address anti displacement with a widened scope for renters throughout the City at-large, (beyond the BMR list) and continue to be explored throughout the sixth Cycle of the Housing Element.

If the policy is not adopted, the affected households may struggle to find housing affordable to their income levels within the area. Those with more means would likely either relocate far outside of Cupertino for housing (becoming displaced) or would use savings while paying over half of their income towards housing (becoming severely cost burdened). Those with less means may potentially face homelessness. The City may fall short of Housing Element obligations to prevent displacement of 100 low income households.

Sustainability Impact
No sustainability impact.

Fiscal Impact
No fiscal impact.

City Work Program (CWP) Item/Description
Yes, FY 24-25
Preserve existing and develop new BMR/ELI Housing: Explore opportunities to preserve existing expiring BMR housing. Develop ELI (Extremely Low Income) and BMR housing 628
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units for Developmentally disabled individuals (IDD) on City-Owned property as well as the County-owned sites.

Council Goal:

Housing
California Environmental Quality Act
No California Environmental Quality Act impact.
_____________________________________
Prepared by: Nicky Vu, Senior Housing Coordinator
Reviewed by: Benjamin Fu, Director of Community Development Floy Andrews, Interim City Attorney
Approved for Submission by: Tina Kapoor, Acting City Manager Attachments:

A - Draft Resolution No. 25-000X (BMR Anti-Displacement Policy) B – December 19, 2024 Housing Commission Minutes
C – April 21, 2025 Housing Resource Fair Interest List and Comments Received 629
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RESOLUTION NO. 25-00X

A RESOLUTION OF THE CUPERTINO CITY COUNCIL

ADOPTING AMENDMENTS TO THE POLICY AND PROCEDURES

MANUAL FOR ADMINISTERING DEED RESTRICTED AFFORDABLE

HOUSING UNITS
WHEREAS, the City of Cupertino (the “City”) has since 1993 implemented an Office and Industrial Housing Mitigation Program and a Residential Housing Mitigation Program, described in the Housing Element of the General Plan, requiring the payment of housing mitigation fees by non-residential development and residential projects with six units or less, and requiring the provision of moderate-income and median-income housing in developments with seven units or more (the "Housing Mitigation Program"); and
WHEREAS, the Policy and Procedures Manual for Administering Deed Restricted Affordable Housing Units (the "Manual") serves as the day-to-day operational manual for both City staff and its Below Market Rate (BMR) program administrator for BMR units generated by the City's Housing Mitigation Program; and
WHEREAS, an amendment to the Manual is required to implement a new policy to address deed-restricted inclusionary affordable rental housing units in market-rate developments, which will become unrestricted when the term of affordability expiries, potentially leading to displacement of 114 low-income families by 2040; and
WHEREAS, the Housing Commission during their December 19, 2024 Special Meeting voted in favor (5-0-0-0) to recommend amendments to the Manual to include priority waitlist points and relocation assistance for displaced BMR tenants; and
WHEREAS, when the appropriate need is presented, the Manual is to be updated for clarity, to ensure consistency in review of applications, to reflect policy changes, and to ensure compliance with state and federal law.

NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby

1. Amend Section 2.2 Priority Point Placement System of the Manual to read as follows:
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Resolution No. __________________

The City has established a priority point placement system that reflects the City’s priorities regarding placement of households into the limited number of BMR affordable units in the City.

Under the priority point placement system, the highest preference is given to displaced tenants of below market rate rental units with expiring covenants (a household that is or was a tenant of a BMR unit within 12 months of deed restriction expiration). Second highest preference is given to applicants who live and/or work in Cupertino, with an additional priority point awarded to public employees who work in Cupertino (for instance, school district employees, City employees, police, fire, post office, etc.). The priority point placement system point scale is listed below. Applicants must qualify for priority points at the time of application and again at the time of review for a BMR ownership or rental unit.

Applicants can receive up to a maximum of 7 points based on the following criteria below:

One Point = Cupertino resident
Three Points = Displaced Below Market Rate rental tenant Two Points = Working in Cupertino
One Point = Public Employee Working in Cupertino
Applicants receiving seven points shall be considered the highest priority; applicants receiving six points shall be considered the second highest priority; applicants receiving five points shall be considered the third highest priority; and so forth until applicants receiving zero points shall be considered the lowest priority.

In addition, applicants who have been displaced from rental housing in Cupertino by public or private redevelopment shall receive a priority over all other applicants.

2. Amend Section 2.5 BMR Applicant Waitlist of the Manual to read as follows:

The waitlist application period for BMR ownership and rental units will open on the first business day of October annually. At that time, BMR ownership and rental waitlist application forms will be accepted. The waitlist application period will close on the last business day of October annually. Anyone who wishes to be included on the waitlist must apply each year within this time frame, including those who were on the waitlist in previous years. Each waitlist application form will be separated into a subgroup based on priority points. For applicants reapplying for a position on the waitlist, the applicant will maintain their current position on the waitlist from the previous year, provided the applicant continues to qualify for a BMR unit and their priority points remain unchanged. Applicants who are no longer income eligible, or who do not reapply, will be removed from the waitlist each year. Making it to the waitlist does not confer any rights or privileges beyond the qualification opportunities described in this Manual.

Within 30 business days of the submission deadline (the last business day of October), the City or its agent will conduct a lottery for new applicants. Along with the City or its agent, two witnesses must assist with the lottery. New applicants will be added to the bottom of the list of the priority group for which they are eligible, after applicants who were on the list in previous years and continue to qualify. The lottery will be performed for the new applicants within each priority group to randomly assign each applicant a waitlist number. For example, a new applicant who qualifies for three priority points will be placed into the lottery with the other new applicants 631
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Resolution No. __________________

who qualify for three priority points and all of the new applicants will be placed in the order generated by the lottery below those with priority points who were already on the list within that priority group and who continue to qualify.

All candidates will be emailed/mailed results of their applications by the end of December annually specifying if they have been denied or approved, and if approved, their applicant number on the waitlist. The waitlist will become effective January 1st- December 31st of the following year.

BMR units that become available will be offered based upon the order of the waitlist within each priority group. If there is no eligible household in the highest priority group, the City or its agent will then look at applicants in the second highest priority group and so on. BMR units that become available will be offered to households whose self-reported income and household size match the available unit and in the order of the waitlist in each priority group.

Current BMR tenants are not eligible to apply for the BMR Rental Waitlist, with the exception of Displaced BMR Rental Tenants. If current BMR tenants desire to change their BMR units, either within or between buildings, they must first vacate their current unit and then return to the BMR Rental Waitlist. Exceptions will be made for current tenants who request a reasonable accommodation and Displaced BMR Rental Tenants.

3. Amend Section 2.5.5 Eligibility Process to Reapply on BMR Waitlist to read as follows:

An applicant must reapply each year to remain on the waitlist. All applicants must apply annually in October. The only exceptions are those desiring an additional priority as Displaced BMR Tenants. If displacement is caused by redevelopment, they must apply within (90) ninety days of receiving a displacement notice. Otherwise they may reapply anytime within (12) twelve months before of their unit’s affordability expiration date or anytime afterwards.

Provided the applicant continues to qualify for a BMR unit and their priority points remain unchanged, the applicant will maintain their current position on the waitlist from the previous year. Applicants who are no longer income eligible or who do not reapply will be removed from the waitlist each year.

Priority points are not guaranteed from year to year. If an applicant loses any priority points since the last year's application, that applicant will be assigned to the next appropriate priority group and will receive a waitlist number within that priority group. If there are other applicants on the list in the lower priority group who were in that priority group on the previous year’s waitlist, the applicant who lost the priority point(s) will be placed below the people who were already in the priority group during the prior year. A similar process will be followed if an applicant gains priority points.

Candidates must keep the City or its agent informed about their current mailing address, telephone contact information, employment information, household composition, or any substantial changes in income that may affect the applicant’s eligibility to remain on the waitlist. 632
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Resolution No. __________________

4. Create new Section 3.5 Definition of Displaced Below Market Rate Rental Tenant and Special Circumstance Households of the Manual to read as follows:

A Displaced Below Market Rate Rental Tenant means: an income qualified household which is or was a tenant of a below market rate rental unit with an expiring affordability covenant in a market rate development, who may qualify for priority replacement as outlined in Section 2.2 (Priority Point Placement System) or relocation assistance as outlined in Section 6.7 (Terms of Affordability Covenants and Relocation Assistance) of the BMR Manual.

A Special Circumstance Household means: a Displaced Below Market Rate Rental tenant with any of the following characteristics:
a. At least one (1) member is sixty-two (62) years of age or older b. At least one (1) member qualifies as disabled as defined by Title 42, Unit States Code, Section 423, or handicapped as defined by California Health and Safety Code Section 50072. c. A household with one (1) or more minor children (under eighteen (18) years of age) who are legally dependent (as determined for federal income tax purposes). d. A household that has occupied their unit as their primary residence for five (5) or more consecutive years.

5. Amend Section 6.7 Terms of Affordability Covenants and Relocation Assistance of the Manual to read as follows:

The deed restrictions imposed on each BMR unit pursuant to the program shall remain in effect for a specified period from the date of recordation of the Regulatory Agreement. Future owners of the property will abide by all of the administrative procedures and by the conditions in the recorded Regulatory Agreement for the entire period from date of recordation.

Should a tenant of a BMR rental unit vacate their unit within 12 months of either before or after the affordability expiration date into a non-deed restricted unit, the property owner must provide payment to the tenant in the amount equivalent of (3) three months of fair market rent, as determined by the Department of Housing and Urban Development (HUD) for the San JoseSunnyvale-Santa Clara HUD Metro FMR Area in the Federal Register for that year, to be used for relocation costs. Special Circumstances Households will be paid one (1) additional month of fair market rent for a maximum of four (4) months rent. Reimbursement must be paid from the property owner to the former tenant within (30) thirty days of the move out date. To the extent the terms of this Manual and the Regulatory Agreement are inconsistent, the most restrictive and protective term will apply.

6. Create new Section 6.8 Tenant Displacement Noticing Requirements of the Manual to read as follows:

The property owner shall be responsible for sending notice of intent to re-establish the initial rental rate to tenants of expiring BMR rental units no later than (120) one hundred and twenty days prior to the expiration date of the unit. The notice shall be sent by regular and certified mail and posted on the door of each rental unit. The landlord must submit evidence of compliance with this section to the city in order for this requirement to be deemed complete. 633
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Resolution No. __________________

For each such notice, the landlord shall use a notice of intent form prepared by the property owner and approved by the City (1) one week prior to noticing and shall contain the following information:

1. The name and address of the current property owner and the project developer.

2. The new monthly initial rental rate the owner intends to establish upon expiration of the affordability covalent, and the date in which it takes effect.

3. An explanation of the relocation assistance available to eligible households and special circumstances households and the procedure for receiving relocation assistance (that it will be sent directly to them within 30 days of vacating the unit if they choose to vacate the unit within 12 months before or after the expiration date).

4. Other information deemed necessary or desirable by the Director of Community Development.

7. Create new Section 6.9 Enforcement and Failure to Comply of the Manual to read as follows:

Should a landlord fail to comply with any requirement of Section 6.7 (Terms of Affordability Covenants and Relocation Assistance) the tenant may seek injunctive relief and money damages for failure to pay relocation assistance. The prevailing party in an action for failure to pay relocation assistance shall recover costs and reasonable attorneys’ fees. Should a landlord fail to comply with the noticing requirements of Government Code 65863.10, which require that noticing be provided to tenants on HCD approved forms regarding their expiring units at (3) three years, (12) months, and (6) six months prior to the anticipated date of termination of a subsidy contract, the tenant will be granted injunctive relief through imposition of the prior restrictions until any required notice is provided and the required period has elapsed. Similarly, should a landlord fail to comply with any requirement of Section 6.8 (Tenant Displacement Noticing Requirements) the tenant will be granted injunctive relief through reimposition of the prior restrictions until any required notice is provided and the required period has elapsed.

No owner shall take action to terminate any tenancy or otherwise recover possession of a residential real property in retaliation for the tenant reporting violations of this Section, for reporting violations of health, safety, and habitability codes and laws, for exercising rights granted under this Section, or for forming or participating in a tenant organization.

BE IT FURTHER RESOLVED that this Resolution is not a project under the requirements of the California Environmental Quality Act, together with related State CEQA Guidelines (collectively, “CEQA”) because it has no potential for resulting in physical change in the environment. In the event that this Resolution is found to be a project under CEQA, it is subject to the CEQA exemption contained in CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have no possibility that the action approved may have a significant effect on the environment. CEQA applies only to actions which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a 634
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Resolution No. __________________

significant effect on the environment, the activity is not subject to CEQA. In this circumstance, the proposed action amending the Manual would have no or only a de minimis effect on the environment as an administrative activity that will not result in any direct or indirect physical changes. The foregoing determination is made by the City Council in its independent judgment.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 17 day of June, 2025, by the following vote:

Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Liang Chao, Mayor
City of Cupertino
________________________
Date
ATTEST:
________
Kirsten Squarcia, City Clerk
________________________
Date
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Exhibit A
Policy and Procedures Manual for Administering Deed Restricted Affordable Housing Units
(Attached)
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Approved by the City Council
June 17, 2025
Resolution No. _______
City of Cupertino
Housing Division
Department of
Community
Development
10300 Torre Avenue
Cupertino, CA 95014
Voice: (408)777-3251
Fax: (408)777-3330
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TABLE OF CONTENTS
Contents

1.0 Introduction........................................................................................................................1

2.0 Application Selection Process...........................................................................................1

2.1. Conflict of Interest................................................................................................. 1

2.2. Priority Point Placement System...........................................................................2

2.3. Requests for Reasonable Accommodation ...........................................................2

2.4. Housing Constructed for People with Disabilities...............................................3

2.5. BMR Applicant Waitlist........................................................................................3

2.5.1. Solicitation of Applicants............................................................................4

2.5.2 Submitting a BMR Waitlist Application Form ..........................................4

2.5.3. Submitting a BMR Program Application...................................................4

2.5.4 Application Fees..........................................................................................4

2.5.5 Eligibility Process to Reapply on BMR Waitlist.........................................4

2.5.6 Applicant’s Right to Refuse BMR Unit......................................................5

2.6. False Statements..................................................................................................... 5

3.0 Minimum Homebuyer/Tenant Eligibility Requirements ............................................... 5

3.1. Household Minimum Size Requirements.............................................................6

3.2. Household Composition ........................................................................................6

3.3. Definition of Employment in Cupertino...............................................................6

3.4. Definition of Residency in Cupertino ...................................................................6

3.5. Definition of Displaced Below Market Rate Rental Tenant and Special Circumstances Households…………………........................................................6

3.6. Annual Gross Income.............................................................................................7

3.6.1. Documentation to Verify Sources of Income.............................................7

3.7. Assets.......................................................................................................................8

3.7.1. Documentation to Support Assets...............................................................8

4.0 Ownership Units- Requirements for Buying a BMR Unit..............................................9

4.1. Income Limits.........................................................................................................9

4.1.1. Co-applicants...............................................................................................9

4.1.2. Credit Score................................................................................................. 9

4.2. Asset Limit.............................................................................................................. 9

4.2.1. Minimum Cash Available..........................................................................10

4.2.2. Gift Funds................................................................................................. 10

4.3. Definition of First-time Homebuyer....................................................................10

4.4. Affordable Sale Price Determination .................................................................. 10

4.4.1. Initial Prices of Newly Constructed Units................................................10

4.4.2. Prices of Existing BMR Units................................................................... 10

4.5. Financing ..............................................................................................................10

4.5.1. Lenders......................................................................................................10

4.5.2. Loan Requirements...................................................................................11

4.5.3. InsuranceRequirements ...........................................................................11

4.6. Occupancy Conditions.........................................................................................11

4.7. Required Pre-Purchase Education......................................................................11 638
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4.8. Documents for Completing Home Purchase ......................................................11

4.9. Term of Affordability...........................................................................................12

4.10. Annual Monitoring ..............................................................................................12

4.10.1. Failure to Submit Annual Certification...................................................12

5.0 Rental Units- Requirementsfor Renting a BMR Unit ..................................................12

5.1. Income Limits.......................................................................................................12

5.1.1. Minimum Income Requirements..............................................................13

5.1.2. Co-Signers................................................................................................. 13

5.2. Asset Limit............................................................................................................13

5.2.1. Documentation to Support Assets.............................................................13

5.3. Qualification as Renter........................................................................................14

5.4. Rental Rate Determination..................................................................................14

5.5. Previewing of Unit................................................................................................14

5.6. Occupancy Conditions.........................................................................................14

5.7. Annual Rent Adjustments ...................................................................................14

5.8. Annual Re-Certification of Income.....................................................................15

5.9. Terms of Tenancy................................................................................................. 15

6.0 Requirements of Apartment Owners and Property Managers ................................... 15

6.1. Availability of New Units for Lease.....................................................................15

6.2. Eligible Prospective Tenants...............................................................................15

6.3. Prospective Tenant’s Previewing of Unit............................................................16

6.4. Executed Lease Agreement..................................................................................16

6.5. Annual Rent Adjustments...................................................................................16

6.6. Owner/Manager Certification .............................................................................16

6.7. Terms of Affordability Covenants and Relocation Assistance..........................16

6.8. Tenant Displacement Noticing Requirements…………………………………17

6.9. Enforcement and Failure to Comply…………………………………………..17

6.10. Terms of Lease .....................................................................................................18

6.11. Occupancy Requirements....................................................................................18

7.0 Appeal Process..................................................................................................................18

8.0 Authority...........................................................................................................................19 List of Exhibits
Exhibit 1 BMR Waitlist Application Form
Exhibit 2 BMR Program Application (Ownership)
Exhibit 3 BMR Program Application (Rental)
Exhibit 4 24 CFR 5.609 and Excerpts from the Technical Guide for Determining Income and Allowances for the HOME Program
Exhibit 5 Buyer’s Disclosure Statement
Exhibit 6 BMR Renter Occupancy Certification
Exhibit 7 Certificate of Receipt of Policy and Procedures Manual for Administering Deed Restricted Affordable Housing Units
Exhibit 8 BMR Lease Addendum
Exhibit 9 Capital Improvement Request Form
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1.0 Introduction
As required by Section 19.172.030 of the Cupertino Municipal Code, this Manual establishes procedures for the on-going administration of the inventory of affordable units, also referred to as Below Market Rate (BMR) units, created by the City of Cupertino’s Residential Housing Mitigation Program. The manual includes procedures and guidelines for prioritizing applicants, evaluating the eligibility of applicants, setting maximum affordable sales and rents prices, and monitoring compliance of homeowners and tenants with the recorded affordability covenants. The manual will provide guidance to City staff, the City’s program administrator (agent), BMR homeowners, BM R renters, and property m a n a g e r s of rental complexes that contain BMR units. The attached exhibits and certain portions of this manual will be updated as necessary to comply with regulations and policies of the United States Department of Housing and Urban Development (HUD), State of California Department of Housing and Community Development (HCD), and City Housing Element and zoning ordinance.

A separate manual, the “Below Market Rate (BMR) Housing Mitigation Program Procedural Manual,” establishes the procedures for implementing the City’s Housing Mitigation Program. In accordance with the City’s Housing Element, all new residential and/or non-residential developments are required to help mitigate project-related impacts on affordable housing needs.

The City of Cupertino has overall responsibility for the BMR program although the administration may be contracted out to another agency. The guidelines in this Manual must be interpreted in conjunction with the City’s Housing Element, zoning, and documents implementing the BMR program.

2.0 Application Selection Process

2.1. Conflict of Interest
The following individuals are ineligible to purchase or rent a BMR unit:
• City employees and officials (and their immediate family members and dependents) who have policy-making authority or influence regarding City housing programs, participate in making decisions regarding City housing programs, administer City housing programs, or whose salary is paid in any part from a City housing program; • Any consultant to the City and employees of the consultant (and their immediate family members and dependents) who have policy-making authority or influence regarding City housing programs, participate in making decisions regarding City housing programs, administer City housing programs, or whose salary is paid in any part from a City housing program;
• An applicant for or developer of the project containing the BMR units and its officers and employees (and their immediate family members), and the property owner of the project and its officers and employees (and their immediate family members); or • Any other individual who has a conflict of interest as defined by federal or state law or the City’s adopted Conflict of Interest Code.

In addition, if an employee of any consultant involved with City housing programs is on the waitlist for any BMR unit, all review of that employee’s application must be performed by the City. The City will screen for applicants that fall under this conflict of interest policy when verifying income sources and employers at the time of application. 640
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2.2. Priority Point Placement System
The City has established a priority point placement system that reflects the City’s priorities regarding placement of households into the limited number of BMR affordable units in the City. Under the priority point placement system, the highest preference is given to displaced tenants of below market rate rental units with expiring covenants (a household that is or was a tenant of a BMR unit within 12 months of deed restriction expiration). Second highest preference is given to applicants who live and/or work in Cupertino, with an additional priority point awarded to public employees who work in Cupertino (for instance, school district employees, City employees, police, fire, post office, etc.). The priority point placement system point scale is listed below. Applicants must qualify for priority points at the time of application and again at the time of review for a BMR ownership or rental unit.

Applicants can receive up to a maximum of 7 points based on the following criteria below:

One Point = Cupertino resident
Three Points = Displaced Below Market Rate rental tenant Two Points = Working in Cupertino
One Point = Public Employee Working in Cupertino
Applicants receiving seven points shall be considered the highest priority; applicantsreceiving six points shall be considered the second highest priority; applicants receiving fix points shall be considered the third highest priority; and so forth until applicantsreceiving zero points shall be considered the lowest priority.

In addition, applicants who have been displaced from rental housing in Cupertino by public or private redevelopment shall receive a priority over all other applicants.

2.3. Requests for Reasonable Accommodation
The City and its agent have an obligation to provide a "reasonable accommodation" to applicants if they or any family members have a disability or handicap, as defined by law, that requires a change in the usual application process.

A reasonable accommodation is some modification or change that we can make to the policies or procedures that will assist an otherwise eligible applicant with a disability to take advantage of the City's BMR program. Examples of a reasonable accommodation include:
• Making large type documents or a reader available to a vision impaired applicant during the application process;
• Permitting an outside agency to assist an applicant with a disability to meet the property's screening criteria; or
• Permitting a sign language interpreter to assist a hearing impaired applicant during the application process.

An applicant that has a family member with a disability must still be able to meet the essential obligations of the BMR program. Potential renters must be able to pay rent, care for their apartments, report required information to the owner, avoid disturbing neighbors, etc., but there is no requirement that they be able to do these things without assistance. Potential homeowners must have adequate income to support a mortgage and meet other eligibility criteria.
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If you or a member of your household has a disability or handicap and think you might need or want a reasonable accommodation, you may request it at any time in the application process. If you would prefer not to discuss your situation with us, that is also your right.

2.4. Housing Constructed for People with Disabilities
Some BMR units may be specially constructed to be accessible for people with disabilities.

In the event that an accessible unit becomes available, persons with disabilities on the waitlist will be provided a preference for those BMR units.

2.5. BMR Applicant Waitlist
The waitlist application period for BMR ownership and rental units will open on the first business day of October annually. At that time, BMR ownership and rental waitlist application forms will be accepted. The waitlist application period will close on the last business day of October annually. Anyone who wishes to be included on the waitlist must apply each year within this time frame, including those who were on the waitlist in previous years. Each waitlist application form will be separated into a subgroup based on priority points. For applicants reapplying for a position on the waitlist, the applicant will maintain their current position on the waitlist from the previous year, provided the applicant continues to qualify for a BMR unit and their priority points remain unchanged. Applicants who are no longer income eligible, or who do not reapply, will be removed from the waitlist each year.

Making it to the waitlist does not confer any rights or privileges beyond the qualification opportunities described in this Manual.

Within 30 business days of the submission deadline (the last business day of October), the City or its agent will conduct a lottery for new applicants. Along with the City or its agent, two witnesses must assist with the lottery. New applicants will be added to the bottom of the list of the priority group for which they are eligible, after applicants who were on the list in previous years and continue to qualify. The lottery will be performed for the new applicants within each priority group to randomly assign each applicant a waitlist number. For example, a new applicant who qualifies for three priority points will be placed into the lottery with the other new applicants who qualify for three priority points and all of the new applicants will be placed in the order generated by the lottery below those with priority points who were already on the list within that priority group and who continue to qualify.

All candidates will be emailed/mailed results of their applications by the end of December annually specifying if they have been denied or approved, and if approved, their applicant number on the waitlist. The waitlist will become effective January 1st- December 31st of the following year.

BMR units that become available will be offered based upon the order of the waitlist within each priority group. If there is no eligible household in the highest priority group, the City or its agent will then look at applicants in the second highest priority group and so on.

BMR units that become available will be offered to households whose self-reported income and household size match the available unit and in the order of the waitlist in each priority group.

Current BMR tenants are not eligible to apply for the BMR Rental Waitlist, with the exception 642
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of Displaced BMR Rental Tenants. If current BMR tenants desire to change their BMR units, either within or between buildings, they must first vacate their current unit and then return to the BMR Rental Waitlist. Exceptions will be made for current tenants who request a reasonable accommodation and Displaced BMR Rental Tenants.

2.5.1. Solicitation of Applicants
Applications for BMR ownership and rental units shall be solicited as necessary to maintain an adequate number of applications in each of the following applicant pools:

BMR Ownership Units
• Median Income (up to 100% Area Median Income or AMI)
• Moderate Income (up to 120% AMI)
BMR Rental Units
• Very Low-Income (up to 50% AMI)
• Low Income (up to 80% AMI)
Outreach shall be conducted through the City’s website, program brochures, community workshops, presentations and periodic print media advertising. The City or its agent shall be responsible for updating the content on the City’s website and distributing program brochures that are culturally and linguistically appropriate to the community. These brochures will be available at City Hall, the Cupertino Public Library, the Quinlan Community Center, the Cupertino Senior Center, and other appropriate locations.

Furthermore, the City or its agent shall conduct outreach efforts through local media that are culturally and linguistically appropriate to the community.

2.5.2. Submitting a BMR Waitlist Application Form
See Exhibit 1 for a sample copy of the BMR Waitlist Application Form for ownership and/or rental units.

2.5.3. Submitting a BMR Program Application
See Exhibit 2 for a sample copy of the BMR Program Application (Ownership). See Exhibit 3 for a sample copy of the BMR Program Application (Rental).

2.5.4 Application Fees
BMR application and administrative fees may change from time to time. As a result, the most recently approved application and administrative fees will be disclosed by the City or its agent at the time of application annually in October for both BMR ownership or rental units. There will be no annual fee to maintain an applicant’s place on the waitlist.

2.5.5. Eligibility Process to Reapply on BMR Waitlist
An applicant must reapply each year to remain on the waitlist. All applicants must apply annually in October. The only exceptions are those desiring an additional priority as Displaced BMR Tenants. They must apply within (90) ninety days of receiving a displacement notice if caused by redevelopment. Otherwise they must reapply anytime within (12) twelve months before their unit’s affordability expiration date or anytime afterwards. 643
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Provided the applicant continues to qualify for a BMR unit and their priority points remain unchanged, the applicant will maintain their current position on the waitlist from the previous year. Applicants who are no longer income eligible or who do not reapply will be removed from the waitlist each year.

Priority points are not guaranteed from year to year. If an applicant loses any priority points since the last year's application, that applicant will be assigned to the next appropriate priority group and will receive a waitlist number within that priority group. If there are other applicants on the list in the lower priority group who were in that priority group on the previous year’s waitlist, the applicant who lost the priority point(s) will be placed below the people who were already in the priority group during the prior year. A similar process will be followed if an applicant gains priority points.

Candidates must keep the City or its agent informed about their current mailing address, telephone contact information, employment information, household composition, or any substantial changes in income that may affect the applicant’s eligibility to remain on the waitlist.

2.5.6. Applicant’s Right to Refuse BMR Unit
An applicant has two opportunities annually to refuse a BMR unit and retain their place on the waitlist. If an applicant refuses a third time, then they will be placed at the bottom of the waitlist.

2.6. False Statements
During the BMR application process or annual recertification, households that intentionally make false statements or misrepresent any facts on the application to purchase or rent a BMR unit, or on the annual recertification, will be removed from the BMR waitlist and barred from re-applying for a BMR unit in Cupertino in the future.

If the City or its agent should discover that a contract was completed by a purchaser or renter who intentionally made false statements or misrepresented the facts in order to appear eligible or remain eligible, the City will treat this as a breach of the Occupancy, Refinancing, and Resale Restriction Agreement with Option to Purchase (Resale Agreement) or rental restrictions and may exercise any remedies allowed under the Resale Agreement and/or rental restrictions and any and all remedies allowable by law.

3.0 Minimum Homebuyer/Tenant Eligibility Requirements
Every purchaser or tenant of a BMR unit must meet specific minimum eligibility requirements, as follows:
• Annual gross household income (including the income of all household members 18 years of age and older) must not exceed the maximum income limits established for the BMR unit;
• All owners and tenants must live in the BMR unit as a primary residence; and • Potential owners must be able to obtain primary mortgage financing and have a minimum of 5.0% of the BMR purchase price for down payment plus closing costs (gift funds are allowed).
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3.1. Household Minimum Size Requirements
To ensure that the City's limited BMR units are used efficiently, a household must be of at least a size equal to the number of bedrooms in the BMR unit. For instance, to be eligible to purchase or rent a three-bedroom unit, a household must contain at least three members.

Minimum household occupancy standards for BMR units are:
1 bedroom unit = 1 person
2 bedroom unit = 2 persons
3 bedroom unit = 3 persons
4 bedroom unit = 4 persons

3.2. Household Composition
A household is comprised of one or more persons who may or may not be related. An unborn child can be counted in family size once there is medical confirmation of pregnancy. An adoption in process will be counted in family size with verification of the adoption process being underway. A child will be considered part of the household when the child lives with a single parent for at least 75% of the time or in instances of joint custody, at least 50%.

The applicant will need to submit a copy of the divorce decree and/or child custody agreement as verifiable documentation. If a divorce is in process, it may not be possible to qualify an applicant because family size and financial status are unclear.

If the applicants are proposing to combine households with the purchase of the BMR, the combined household must meet eligibility requirements and combined income must meet the household income limits.

3.3. Definition of Employment in Cupertino
A letter or verification of employment shall serve as sufficient proof of employment in Cupertino.

3.4. Definition of Residency in Cupertino
Residing in Cupertino means: Occupying and renting, at the time of application for at least one month prior to the application date, a bone fide rental dwelling unit (mobile home and SRO units, or) within the Cupertino limits, as evidenced by a valid third-party documentation (e.g. current lease, CA driver’s license or vehicle registration card, and/or utility bills showing applicant’s name and street address in Cupertino). For homeless applicants, evidence that the applicant’s last permanent residence was located in Cupertino and/or documentation from a case manager or homeless service provider may be used to document applicant’s current status in Cupertino, which may include places or structures other than a bona fide dwelling unit (i.e. tent, vehicle, etc.)

3.5. Definition of Displaced Below Market Rate Rental Tenant and Special Circumstance Households
A Displaced Below Market Rate Rental Tenant means: an income qualified household which is or was a tenant of a below market rate rental unit with an expiring affordability covenant in a market rate development, who may qualify for priority replacement as outlined in Section

2.2 (Priority Point Placement System) or relocation assistance as outlined in Section 6.7 645
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(Terms of Affordability Covenants and Relocation Assistance) of the BMR Manual.

A Special Circumstance Household means: a Displaced Below Market Rate Rental tenant with any of the following characteristics:
a. At least one (1) member is sixty-two (62) years of age or older b. At least one (1) member qualifies as disabled as defined by Title 42, Unit States Code, Section 423, or handicapped as defined by California Health and Safety Code Section 50072.
c. A household with one (1) or more minor children (under eighteen (18) years of age) who are legally dependent (as determined for federal income tax purposes). d. A household that has occupied their unit as their primary residence for five (5) or more consecutive years.

3.6. Annual Gross Income
Applicants' household annual gross income shall be calculated in accordance with the Technical Guide for Determining Income and Allowances for the HOME Program published by the U.S. Department of Housing and Urban Development, as it may be amended (the HOME Guide), and 24 CFR 5.609, attached as Exhibit 4. See Section 4.1 for income limits for an ownership unit. See Section 5.1 for income limits for a rental unit.

The HOME Guide is available here: http://portal.hud.gov/huddoc/19754_1780.pdf 24 CFR 5.609 is available here: https://www.gpo.gov/fdsys/pkg/CFR-2016-title24- vol1/xml/CFR-2016-title24-vol1-sec5-609.xml
Exhibit 4 provides the definitions of what is included and excluded from the determination of annual gross income in accordance with the Code of Federal Regulations. In summary, gross household income is the sum of all the income for every adult, 18 years or older, living in the unit. Sources of income include all wages or salaries, overtime pay, commissions, fees, tips, bonuses and other compensation, net income from a business or profession or from the rental of real or personal property, interest and dividends, payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, payments in lieu of earnings, public assistance, alimony and child support received, and any other sources of income.

3.6.1. Documentation to Verify Sources of Income
The gross annual incomes of all household members age 18 or older are considered when determining eligibility. The types of income to be verified and the type of documentation that will be requested will include:
• For rental applicants, signed copies of federal tax return for the most recent year.

If the federal tax return for the most recent year has not been filed, then a signed copy of the federal tax return for the previous year plus evidence of income in the most recent year (W2 forms, 1099 forms) shall be provided. For ownership applicants, this same information is required for the three most recent years. • Copies of payroll stubs or other verification of employment for the last two 646
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consecutive months.
• Bank statements for the last two consecutive months (used to verify that the applicant meets asset requirements as defined in Section 3.6 Assets6Assets).

All income determinations are based primarily on the applicant’s income for the past year as evidenced by the documents listed above and additional verification, if requested, as listed below. Income calculations will not factor in any speculative or uncertain projections of future earnings, such as calculations of bonuses and overtime. Where major changes have occurred in life circumstances since the applicant’s last year of employment, including only such major changes as retirement, job loss or gain, changes in base pay, or disability or death of a wage earner, the City may deduct projected income losses or add projected income gains from the applicant’s income for the past year.

Additional income verification may also be requested as follows:

Source of Income Documentation
Salaries and wages Verification from employer
Business income Verification of income by a certified
public accountant or bookkeeper including
a most recent quarterly profit/loss statement
Interest and dividend income Current bank statements or dividend statements Retirement and Insurance Income Verification from source Unemployment and Disability Income Verification from source Welfare Assistance Verification from source
Alimony, Child Support, and Gift Income Verification from source Armed Forces Income Verification from source
Other Verification from source

3.7. Assets
There are limits to the amount of assets that are used for eligibility for ownership and rental units. See Section 4.2 for asset limits for an ownership unit. See Section 5.2 for asset limits for a rental unit.

3.7.1. Documentation to Support Assets
The table below represents what is included and excluded as assets and the type of documentation that will be requested.

Assets Documentation
Checking Account, Savings Account,
Mutual Fund/Money Market
Fund, Certificates of Deposit (C.D.)
Copies of two most recent statements
Stocks, including Options Copy of stock certificate or proof of purchase and statement of current value; for stock prices attach a
copy of recent dated newspaper or online source that
shows the value of each company’s stocks
Bonds, including savings bonds Copies of most recent document 647
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Trust Copies of most recent document
Gift Signed Gift Letter by all parties
Personal Loan Letter or loan agreement
Down Payment Assistance Loan Copy of Agreement
Individual Development Match Account Copy of two most recent statements Other Verification from source

4.0 Ownership Units- Requirements for Buying a BMR Unit

4.1. Income Limits
The BMR ownership program is designed to assist first-time median- and moderate-income homebuyers. The BMR ownership program uses income limits published by HCD annually for Santa Clara County, per household size. HCD’s income limits include the median- and moderate-income categories and income limits are adjusted per household size. BMR ownership program income limits per household size are published annually. • Median Income (up to 100% AMI)
• Moderate Income (up to 120% AMI)
Current median- and moderate-income ranges are available here:
http://www.cupertino.org/our-city/departments/communitydevelopment/housing/affordable-housing-program/bmr-purchase-program

4.1.1. Co-applicants
The City or its agent will accept one application per household. A co-applicant is defined as an adult member of the household whether related or unrelated who intends to apply for the BMR unit, be on the title of the property with the applicant, and occupy the unit as his or her primary residence. The combined income and assets of all adult members of the household (including co- applicants) to purchase a BMR unit must not exceed the maximum income limits per household size and asset limitations of the program. All coapplicants must go through the same process as the applicant and must agree to comply with the program requirements. Non-occupant co-signors are not allowed to assist with the BMR purchase.

4.1.2. Credit Score
All applicants and co-applicants must have a minimum middle (3 credit bureau reporting) FICO credit score of 660. Credit score will be verified at the time of application and the applicant(s) will be responsible for all fees associated with the credit report.

4.2. Asset Limit
Households with assets over $100,000 or 30% of the BMR purchase price, whichever is greater, held in the United States or foreign countries will not be eligible to purchase a BMR home. Excluded from assets are: all non-accessible funds, including any assets that generate a penalty when withdrawn i.e. 401K, CALPERS, STRS, and other pension plans. See Section

3.6 for a definition of assets and a list of documents that must be submitted to support the calculation of assets.
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4.2.1. Minimum Cash Available
Buyer must contribute a minimum of 3% of their own funds towards down payment. In other words, buyer’s Combined Loan to Value Ratio (CLTV) may not exceed 97%. Buyer must contribute a minimum of 5.0% of the BMR purchase price for down payment plus closing costs (gift funds are allowed).

4.2.2. Gift Funds
Gift funds for the purchase of a BMR unit will be counted towards the applicant’s overall asset limit. Applicant(s) may receive up to 27% of the BMR purchase price in gift funds as evidenced by a gift letter signed by all parties involved.

4.3. Definition of First-time Homebuyer
An applicant must be a first-time homebuyer to be considered for a BMR ownership unit. An applicant shall be considered a first-time homebuyer if they have not owned a home for at least three years. This definition applies to properties owned in the United States as well as foreign countries. An exception will be made for people who were homeowners prior to a divorce or legal separation.

The City or its agent may verify first-time homebuyer status by (1) reviewing mortgage deductions on the three most recent years of federal tax returns for each adult in the applicant’s household; (2) a signed statement on the application stating homeownership status; and (3) a title search.

4.4. Affordable Sale Price Determination

4.4.1. Initial Prices of Newly Constructed Units
Newly constructed initial BMR sales prices will be determined by the City or its agent. The City or its agent will calculate newly constructed initial BMR sales prices for both medianand moderate-income based on the maximum affordable housing cost provisions of Section 50052.5 of the California Health and Safety Code, Section 6920 of the California Code of Regulations, and most recent published HCD income limits. A 10% down payment and a mortgage interest rate that is the ten (10) year rolling average of 30-year interest rate data provided by Freddie Mac will be assumed when calculating initial pricing.

4.4.2. Prices of Existing BMR Units
Resale prices for existing BMR units will be determined by the City or its agent. The City or its agent will reference the Resale Agreement recorded on the title of the existing BMR unit when calculating the BMR resale price.

4.5. Financing

4.5.1. Lenders
Prospective purchasers of BMR units must seek and obtain primary mortgage financing in order to purchase a BMR unit. There is no prearranged City financing; however, the City and its agent maintain a list of City approved BMR lending institutions who have provided written 649
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confirmation through their underwriting and/or bond department that their lending institution is able to provide primary mortgage financing with the City’s BMR requirements. In order to qualify as an approved BMR lender the institution must have reviewed and approved the City’s Resale Restriction Agreement, Deed of Trust, and Promissory Note in advance. From time to time the City may require additional training in order for a lending institution to maintain its status as an approved City BMR lender.

4.5.2. Loan Requirements
The primary first mortgage loan must be a fully amortized 30-year term fixed principal and interest loan. Interest only loans, negative amortization loans, adjustable rate loans, and reverse mortgage loans are not permitted.

In some cases the primary 30-year fixed principal and interest loan may be combined with down payment assistance, mortgage assistance or a community program second loan. Under this scenario the primary and secondary lenders must receive written approval from the City.

4.5.3. InsuranceRequirements
Prior to the sale of any unit, the City shall require that each purchaser secure a standard homeowner’s insurance policy, with the City named as an additional insured. The City will be entitled to any policy proceeds in excess of the affordable unit purchase price if the proceeds are not used to rebuild the home. The insurance policy shall be in an amount equal to the replacement value of the home. At least every five (5) years, the replacement value must be reviewed and adjusted as needed. If the owner hires a contractor to work on the home, the contractor must be licensed and carry liability and workers compensation insurance.

4.6. Occupancy Conditions
All owners of BMR units must occupy the premises as his or her principal place of residence for at least ten (10) months out of each calendar year. Each owner shall provide an annual written certification to the City that the owner is occupying the premises as his or her principal place of residence. Any absence from the premises by an owner for a period of sixty (60) or more consecutive days shall be deemed an abandonment of the premises as the principal residence of owner, and the City may declare a default under the Resale Agreement. The City or its agent has the right to review occupancy on a case-by-case basis.

4.7. Required Pre-Purchase Education
After the applicant(s) are placed on the BMR Ownership Waitlist and before closing escrow on a BMR unit, the applicant(s) must attend a BMR pre-purchase education workshop from a qualified HUD approved agency. Certificates of completion must be provided as proof of participation at, or prior to, close of escrow for all adults who will be on title of the property.

4.8. Documents for Completing Home Purchase
The following documents must be read and signed by the Owner(s) before the sale or resale of a BMR unit is completed:
• Buyer's Disclosure Statement (Exhibit 5)
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• Promissory Note
• Deed of Trust
• Occupancy, Refinancing, and Resale Restriction Agreement with Option to Purchase (Resale Agreement)
• Request for Notice Under Section 2924b of California Civil Code The Resale Agreement requires owners of BMR units to live in their home as their principal place of residence and prohibits renting the home except in cases of hardship. It also limits the price at which the homes can be sold. If the owner sells the home above the restricted price, then the owner must pay the City the difference between the restricted price and the sales price. In addition, the owner must follow certain steps and procedures when deciding to sell the home.

The City has an option to purchase a BMR home at the restricted price whenever the owner decides to sell the home or if the owner violates any agreements. The purpose of the Promissory Note, Deed of Trust, and Resale Agreement is to make sure that BMR homes remain affordable to other BMR households upon resale.

The Buyer's Disclosure Statement (Exhibit 5) should be reviewed by all applicants who desire to purchase BMR homes. Itsummarizes the major provisions of the other documents to ensure that a BMR owner understands his or her obligations under the program. The City or its agent will provide the other documents to any interested applicant and to all applicants who are considered for purchase of a particular BMR unit.

4.9. Term of Affordability
The resale restrictions imposed on each BMR affordable unit pursuant to the program shall remain in effect for a period of 99 years from the date of original sale of that unit. Furthermore, the resale restrictions shall renew at each change of title.

4.10. Annual Monitoring
The City or its agent shall monitor compliance of all the requirements of the BMR program, including, but not limited to, occupancy. The owner shall cooperate with the City and provide required certifications and any reasonable requests for supporting documentation to confirm compliance within fifteen (15) days of receipt of a written request by the City. The City or its agent has the right to review occupancy on a case-by-case basis.

4.10.1. Failure to Submit Annual Certification
If the City determines that an owner has intentionally made false statements or misrepresented any facts on the annual certification, or if an owner fails to submit the Certification of Owner Occupancy, the City will treat this as a breach of the Resale Agreement and the Deed of Trust and will take all legal remedies available, including forced sale of the unit.

5.0 Rental Units- Requirements for Renting a BMR Unit

5.1. Income Limits
The BMR rental program is designed to assist very low- and low-income households. In some instances, specific units are restricted to extremely low-income as evidenced in the 651
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project’s affordable housing agreement. The BMR rental program uses income limits published by HCD annually for Santa Clara County, per household size. HCD’s income limits include the very low- and low-income categories and income limits are adjusted per household size. BMR rental program income limits per household size are published annually. • Extremely Low-Income (up to 30% AMI)
• Very Low-Income (up to 50% AMI)
• Low Income (up to 80% AMI)
Current very low- and low-income ranges are available here: http://www.cupertino.org/ourcity/departments/community-development/housing/affordable-housing-program/bmrrental-program

5.1.1. Minimum Income Requirements
A minimum income, determined by each BMR rental property owner and manager, is required of applicants. The minimum income requirement may not exceed a requirement of gross monthly income of over three (3) times the BMR rental rate.

5.1.2. Co-Signers
Non-occupant co-signers are not allowed to assist with the BMR rentals.

5.2. Asset Limit
For households applying to be a tenant of a BMR unit, the maximum asset limit is equal to the maximum household income adjusted for household size that is allowable in order to be eligible for the program. The maximum allowable household income limits for the BMR rental program are published annually. Assets are calculated based on account balances at the time of application.

5.2.1. Documentation to Support Assets
The following chart contains the types of
assets to be verified and the type of
documentation that will be requested. Assets
Documentation
Checking Account, Savings Account,
Mutual Fund/Money Market Fund,
Certificates of Deposit (C.D.)
Copies of two most recent statements
Stocks, including Options Copy of stock certificate or proof of purchase and statement of current value; for stock prices attach a
copy of recent dated newspaper or online source
that shows the value of each company’s stocks
Bonds, including savings bonds Copies of most recent document Trust Copies of most recent document
Gift Signed Gift Letter by all parties
Personal Loan Letter or Loan agreement
Down Payment Assistance Loan Copy of Agreement
Individual Development Match Account Copy of two most recent statements Other Verification from source
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5.3. Qualification as Renter
Applicant(s) cannot own a home and/or be on title of a property when applying for the BMR rental program.

5.4. Rental Rate Determination
The City or its agent will determine the rental rates for BMR units by income level and household size. The rents will be determined based on annual HCD published income limits and section 50053 of the California Health and Safety Code.

Annual Rent (inclusive of fees and utilities) for extremely low-income units cannot exceed 30% of 30% of the area median income adjusted for the size of the household appropriate for the unit. Annual Rent (inclusive of fees and utilities) for very low-income units cannot exceed 30% of 50% of the area median income adjusted for the size of the household appropriate for the unit. Annual Rent (inclusive of fees and utilities) for low- income units cannot exceed 30% of 60% of the area median income adjusted for household size appropriate for the unit.

Rent includes all charges related to occupancy of the unit including utilities, parking fees, fees for use of common facilities, and other fees and charges. If utilities are not paid by the property owner, the rent for the BMR units must be adjusted downward to allow for a utility allowance calculated in accordance with the utility allowances published by the Santa Clara Housing Authority annually.

5.5. Previewing of Unit
The City or its agent will coordinate with the apartment owner/property manager to preview the BMR unit.

Living in a BMR Rental Unit

5.6. Occupancy Conditions
The approved BMR tenant(s) must occupy the BMR unit during the entire term of the lease.

If an additional occupant (roommate, family member, etc.) moves into the BMR unit, he/she will be considered part of the existing household. In such cases, the BMR tenant must notify the City or its agent prior to the move in date, and the entire household (including the new occupant) will be reevaluated to determine eligibility, including household income requirements. If the tenant(s) fail to receive approval from the City for any changes in occupancy or if the tenant(s) subleases the property, the tenant household will no longer be eligible to occupy the BMR unit. To qualify as a household member, the Head of Household and Co-Head of Household must occupy the unit as their primary residence for at least 10 months of the year. Any absence from the premises by a Head of Household or Co-Head of Household for a period of sixty (60) or more consecutive days shall be deemed an abandonment of the premises as the principal residence of tenant, and the City may declare a default under the rental restrictions. The City or its agent has the right to review on a caseby-case basis.

5.7. Annual Rent Adjustments
Maximum BMR rents will be adjusted annually based on the most recently published HCD 653
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income limits for Santa Clara County per household size and also in accordance with the California Health and Safety Code Section 50053. The most recent BMR rent levels will be included in the BMR program materials. The City or its agent will notify the property owner of the new rental rates. If the owner chooses to raise rents, the tenant will be given a 60 day notice before any rent increase.

5.8. Annual Re-Certification of Income
At least once a year, the City or its agent shall requalify BMR tenants to verify that they are eligible to remain in BMR rental units. The City or its agent will provide the “BMR Renter Occupancy Certification Form” (Exhibit 5) to apartment owners/property managers. If the BMR renter fails to submit a signed Occupancy Certification Form within thirty (30) days of the written request, then the lease shall automatically terminate, and the renter must vacate the unit within thirty (30) days of written notice from the apartment owner/property manager. If the renter fails to vacate the unit, the apartment owner/property manager will institute evictions proceedings.

On an annual basis, re-certification shall be based upon the BMR tenant’s household income as determined by, copies of payroll stubs or other verification of employment for the last two consecutive months, prior year tax returns, bank statements for the last two consecutive months, and household size. If a very low-income BMR tenant’s household income increases and exceeds the BMR income limitsfor very low-income household but does not exceed the BMR income limits for a BMR low-income household, then the tenant's rent will be increased to BMR low-income rents, and the tenant may remain in the unit until a suitable BMR low-income unit becomes available. If a tenant's household income increases and exceeds the BMR income limitsfor a low-income household, the tenant will be given three (3) months to locate alternate housing and vacate the BMR rental unit. A three (3) month extension may be granted in cases of extreme hardship.

In the event that a tenant no longer meets the household minimum size requirements (see Section 3.1) for their unit, such tenant's household may be moved to a smaller unit when an appropriately sized unit becomes available in the same property, in accordance with the terms of the tenant's lease.

5.9. Terms of Tenancy
BMR tenants will be subject to the same conditions of tenancy as other tenants occupying the same property, except for terms relating to occupancy, income eligibility, annual recertification, and limits on rents. The initial BMR lease term is for one year.

6.0 Requirements of Apartment Owners and Property
Managers

6.1. Availability of New Units for Lease
An affordable BMR unit may not be leased until the City has approved the unit for occupancy.

6.2. Eligible Prospective Tenants
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of this agency shall be funded out of the City’s BMR Affordable Housing Fund (AHF) and shall be monitored by the City.

An apartment owner/property manager shall notify the City or its agent of any available BMR units and the City or its agent shall have fourteen (14) days to provide owner with an income eligible candidate(s). In reviewing each candidate, the apartment owner/property manager may apply the same tenant selection criteria, such as past performance in meeting financial obligations and credit references, as those applied to applicants for non-BMR units on the property, except for those standards relating to income eligibility (Section 5.1) and minimum income (Section 5.1.1) requirements.

6.3. Prospective Tenant’s Previewing of Unit
The City or its agent will coordinate with the apartment owner/property manager so that a prospective tenant may view the unit.

6.4. Executed Lease Agreement
The apartment owner/property manager will provide City or its agent with a copy of the executed lease agreement.

6.5. Annual Rent Adjustments
Maximum BMR rents will be adjusted annually based on the most recently published HCD income limits for Santa Clara County per household size and also in accordance with the California Health and Safety Code Section 50053. The City or its agent will notify the property owner of the new rental rates. If the owner chooses to raise rents, the tenant must be given 60 days' notice before any rent increase.

6.6. Owner/Manager Certification
Prior to the rental of the first BMR unit on a property, the apartment owner/property manager will sign a Certificate of Receipt of Administrative Procedures Manual (Exhibit 7) with a statement of intent to manage the BMR units according to these procedures. Subsequent apartment owners/property managers may be asked to sign a Certificate of Receipt of Administrative Procedures Manual.

6.7. Terms of Affordability Covenants and Relocation Assistance The deed restrictions imposed on each BMR unit pursuant to the program shall remain in effect for a specified period from the date of recordation of the Regulatory Agreement. Future owners of the property will abide by all of the administrative procedures and by the conditions in the recorded Regulatory Agreement for the entire period from date of recordation.

Should a tenant of a BMR rental unit vacate their unit within 12 months of either before or after the affordability expiration date into a non-deed restricted unit, the property owner must provide payment to the tenant in the amount equivalent of (3) three months of fair market rent, as determined by the Department of Housing Urban Development (HUD) for the San Jose-Sunnyvale-Santa Clara HUD Metro FMR Area in the Federal Register for that year, to be used for relocation costs. Special Circumstances Households will be paid one (1) additional 655
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month of fair market rent for a maximum of four (4) months rent. Reimbursement must be paid from the property owner to the former tenant within (30) thirty days of the move out date. To the extent the terms of this Manual and the Regulatory Agreement are inconsistent, the most restrictive term will apply.

6.8. Tenant Displacement Noticing Requirements
The property owner shall be responsible for sending notice of intent to re-establish the initial rental rate to tenants of expiring BMR rental units no later than (120) one hundred and twenty days prior to the expiration date of the unit. The notice shall be sent by regular and certified mail and posted on the door of each rental unit. The landlord must submit evidence of compliance with this section to the city in order for this requirement to be deemed complete.

For each such notice, the landlord shall use a notice of intent form prepared by the property owner and approved by the City (1) one week prior to noticing and shall contain the following information:

1. The name and address of the current property owner and the project developer.

2. The new monthly initial rental rate the owner intends to establish upon expiration of the affordability covalent, and the date in which it takes effect.

3. An explanation of the relocation assistance available to eligible households and special circumstances households and the procedure for receiving relocation assistance (that it will be sent directly to them within 30 days of vacating the unit if they choose to vacate the unit within 12 months before or after the expiration date).

4. Other information deemed necessary or desirable by the Director of Community Development.

6.9. Enforcement and Failure to Comply
Should a landlord fail to comply with any requirement of Section 6.7 (Terms of Affordability Covenants and Relocation Assistance) the tenant may seek injunctive relief and money damages for failure to pay relocation assistance. The prevailing party in an action for failure to pay relocation assistance shall recover costs and reasonable attorneys’ fees. Should a landlord fail to comply with the noticing requirements of Government Code 65863.10, which require that noticing be provided to tenants on HCD approved forms regarding their expiring units at (3) three years, (12) months, and (6) six months prior to the anticipated date of termination of a subsidy contract, the tenant will be granted injunctive relief through imposition of the prior restrictions until any required notice is provided and the required period has elapsed. Similarly, should a landlord fail to comply with any requirement of Section 6.8 (Tenant Displacement Noticing Requirements) the tenant will be granted injunctive relief through reimposition of the prior restrictions until any required notice is provided and the required period has elapsed.

No owner shall take action to terminate any tenancy or otherwise recover possession of a residential real property in retaliation for the tenant reporting violations of this Section, for reporting violations of health, safety, and habitability codes and laws, for exercising rights 656
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granted under this Section, or for forming or participating in a tenant organization.

6.10. Terms of Lease
BMR tenants will be subject to the same conditions of tenancy as other tenants occupying the subject property, except for terms relating to occupancy, income eligibility, annual recertification, and limits on rents. Each BMR unit shall be leased under a form of tenant lease approved by the City. The tenant lease shall, among other matters:
• Provide for termination of the lease for failure: (1) to provide any information required under the Regulatory Agreement or reasonably requested by the apartment owner/property manager to establish or recertify the tenant's qualification, or the qualification of the tenant's household, for occupancy of the BMR unit, or (2) to income qualify as a result of any material misrepresentation made by such tenant with respect to the income computation or certification;
• Be for an initial term of not less than one (1) year. After the initial year of tenancy, the lease may be month to month by mutual agreement of the apartment owner/property manager and the tenant, however the rent may not be raised more often than once every twelve (12) months after such initial year. The apartment owner/property manager will provide each tenant with at least sixty (60) days' written notice of any increase in rent applicable to such tenant;
• Prohibit subleasing of the BMR unit or any portion of the BMR unit, contain nondiscrimination provisions, and include the tenant's obligation to inform the property manager of any need for maintenance or repair;
• Allow termination of the tenancy only for an increase in tenant's household income above qualifying income or for good cause, including violation of the terms and conditions of the tenant lease, violations of house rules, non-payment of rent, violations of applicable federal, state, or local law, or other good cause; • Include, at the apartment owner's option, the obligation for the tenant to provide a security deposit not exceeding two (2) months' rent; and • Otherwise conform to this Manual.

6.11. Occupancy Requirements
The apartment owner/property manager shall notify the City or its agent if it suspects that there have been any changes to the occupancy of the BMR unit. If the tenant fails to receive approval from the City for any changes in occupancy, or subleases the property, or fails to provide the annual occupancy recertification, the tenant shall be in violation of its lease and will no longer qualify as a BMR tenant.

7.0 Appeal Process
Any person may appeal a decision made under this Manual. The appellant must file a written appeal with either the Community Development Director (if the program is being administered by the City) or the Executive Director of any agency administering the BMR program within ten (10) days of the date of the decision. The Community Development Director or the Executive Director, as applicable, will hear the appeal and provide a written 657
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decision on the appeal within ten (10) days from receipt of the appeal.

The appellant may further appeal the decision of the Community Development Director or the Executive Director, as applicable, by filing a written appeal with the Community Development Director within ten (10) days of the date of the decision. The appeal will be heard by a qualified Third-Party Hearing Officer within thirty (30) days from the date of receipt of the written appeal. The Third-Party Hearing Officer’s decision on the appeal is final.

The sale or rent of any BMR unit at issue in the appeal shall be postponed until a final decision is reached on the appeal, or until the applicable period for filing an appeal has lapsed.

8.0 Authority
The City Manager or designee is authorized to sign all documents on behalf of the City that implement the BMR Program and the policies in this Manual, including without limitation Promissory Notes, Deeds of Trust, Resale Restrictions, Rental Restrictions, and requests for notice.
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1 Exhibit 1
City of Cupertino & RISE Housing
Below Market Rate (BMR) Program
Waitlist Application
Instructions
The City of Cupertino and their Agent, Rise Housing, are pleased to offer you the opportunity to apply to rent a Below Market Rate (BMR) apartment or purchase a Below Market Rate (BMR) home in Cupertino.

WAITLIST APPLICATION PROCESS:
• Please read the instructions completely, determine your eligibility and complete the enclosed BMR Waitlist Application. Incomplete and late Waitlist Applications will not be processed. • Applicants who were on the waitlist in previous years must re-apply to be eligible for the 2018 waitlist. • Current City of Cupertino BMR tenants are not eligible for the 2025 BMR Rental Waitlist. • Current City of Cupertino BMR tenants are eligible for the 2025 BMR Ownership Waitlist. • Completed Waitlist Applications must be received by Friday, October 31, 2025 by 5:00pm. Applications may be mailed, faxed, emailed or completed online. Applications must be received by the deadline, postmarks will not be accepted.
• Rise Housing will review your Waitlist Application and determine your priority ranking (4, 3, 2, 1, or 0) based on current Cupertino residency and current employment in the City of Cupertino. Please see page 2 for definitions of these terms.
• A lottery will be held to determine the ranking order within each priority ranking (4, 3, 2, 1, or 0). • All candidates will be emailed or mailed results by the end of the year; if they have been denied or approved, and if approved, the applicant number on the waitlist. The first candidate on the waitlist will be notified to view the next available unit for which they are qualified (rental or purchase) and begin the application process.

WAITLIST APPLICATION:

Please note that all information provided on the Waitlist Application will be verified when you are shown an available unit. Any information found to be false or inaccurate will immediately void your participation in the program. Candidates must keep Hello Housing updated throughout the year of any changes in information supplied.

Household Size: The total number of individuals who will be living in the unit (including children). Children must reside in the household at least 50% of the time to be considered part of the household.

Income Limits to Qualify for BMR Program: See charts below. The amounts listed are gross (before taxes are taken out).

BMR Purchase Program- 2024
Housing & Community Development (HCD) Maximum Income Limits* Household Size 1 2 3 4 5 6
Median Income $129,000 $147,450 $165,850 $184,300 $199,050 $213,800 Moderate Income $154,800 $176,900 $199,050 $211,150 $238,850 $256,550 *Income Limits will be Updated Each Year by HCD
Assets for Purchase Program: Households with assets over $100,000 will not be eligible. Excluded from net assets are all non-accessible funds or any assets that generate a penalty when withdrawn, i.e., 401K, CALPERS, STRS, and other pension plans.
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2 First-time Homebuyer: All of the applicants who will be on the property title must be a first-time homebuyer.

Applicant(s) shall be considered a first-time homebuyer if they have not owned any residential real estate for at least three years. This definition applies to property owned in foreign countries as well as in the United States.

An exception will be made for people who were homeowners prior to a divorce or legal separation.

Available Cash for Down Payment, Closing Costs to Purchase: Households are required to have readily available assets for a minimum of 5% down of the purchase price. Pricing will vary based on income limits and bedroom counts but a minimum of $12,500 would be needed to qualify.

BMR Rental Program- 2024
Housing & Community Development (HCD) Maximum Income Limits* Household Size 1 2 3 4 5 6
Very-Low Income $64,550 $73,750 $82,950 $92,150 $99,550 $106,900 Low Income $102,300 $116,900 $131,500 $146,100 $157,800 $169,500 *Income Limits will be Updated Each Year by HCD
Assets for Rental Program: Household assets, including and not limited to, checking and savings accounts, CD’s, money market accounts and cash funds, may not exceed the maximum gross income allowed for the appropriate household size.

Income Minimum: Individual properties may have minimum income limits to qualify which will be disclosed prior to viewing the home.

Priority Points are based upon the following criteria:
• One Point: At least one member of the household, on the property title or lease, must currently maintain a primary residence at an address located within Cupertino. • Two Points: At least one member of the household, on the property title or lease, must:
o Work for wages or salary within the boundaries of Cupertino; or o Own or operate a business in the Cupertino; or
o Perform contract or commission work where the actual work is conducted at a Cupertino location. • One Additional Point: At least one member of the household, on the property title or lease, must work for wages or salary for a public agency within the boundaries of Cupertino. (e.g.: Cupertino Unified School District (Cupertino schools only), City of Cupertino) PLEASE SUBMIT ONE WAITLIST APPLICATION PER HOUSEHOLD.

DUPLICATE APPLICATIONS WILL RESULT IN AN AUTOMATIC DISQUALIFICATION.

QUESTIONS? Contact Hello Housing at [email protected] or (415) 742-8610 This Program is not designed to aid emergency or immediate housing needs.

Deadline to Submit Waitlist Applications: Friday, October 31, 2025 at 5:00pm.

Email: [email protected] Phone: (415) 301-5448
Mail to the RISE Housing office: Rise Housing – City of Cupertino 1990 N California Blvd, Walnut Creek, CA 94596 Applications must be received by deadline. Postmarks not accepted.

Online: https://www.risehousing.com/
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Check only one box: Rent Purchase Both (Rent & Purchase APPLICANT Please Print Clearly
First Name Email
Last Name Employer
Current Address Are you a current Cupertino BMR Rental
tenant? YES/NO
City State Were you on the 2017 BMR Waitlist?
YES/NO
Zip Phone Total # of Household Members:

Total Annual Household Gross $
Income: (Before taxes are taken out)
Estimated Value of Net Assets: $ (Checking, savings, stocks, bonds, and/or CD accounts)
Have any members of the household been listed on a primary residential property title, at any time, in the past three (3) years? Exception made for divorced or legally separated homeowners. Please indicate if an exception is needed.

Circle One:

YES or NO
PRIORITY POINTS- circle all that apply Circle One:

1. 1 Point- Are any members of the household currently living in Cupertino? If yes, please specify address: YES or NO

2. 2 Points- Are any members of the household currently employed in the City of Cupertino?
If yes, please specify employer, address, & position:

YES or NO

3. 1 Point- Are any members of the household currently employed at a public agency in the City of Cupertino?
If yes, please specify employer, address, & position:

YES or NO
By signing below, I certify that all the information on this form is true and complete to the best of my knowledge. When asked, I agree to give proof of this information and knowingly understand that supplying false, incomplete or inaccurate information is punishable under Federal or State criminal law.

X
Signature Signature Required. Date
Deadline: October 31, 2025 5:00pm October 2025
2025 WAITLIST APPLICATION
City of Cupertino – Rise Housing Below
Market Rate (BMR) Program
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Below Market Price (BMR) - Ownership Application
Exhibit 2
This certification includes required information as well as optional information. Unless a section is labeled "Optional" it is a required section and must be completed. We encourage households to complete all sections. Answers to optional questions are confidential and will NOT impact your eligibility. In aggregate, the collective answers from the pool of households will help Hello Housing better understand who benefits from affordable housing programs and to advocate to policy makers for effective programs.

Current Address Date
City
State
Zip Code
Head of Household & Co-Head of Household
Below, please provide details for the Head of Household and Co-Head of Household.

Head of Household Co-Head of Household (If Applicable)
Please note that Head(s) of Household must be an adult (18 years or older).

First Name First Name
Last Name Last Name
Phone Phone
Alternate Phone Alternate Phone
Email Email
Date of Birth Date of Birth
Primary Language Primary Language
Additional Household Members
Below, please provide information on any other members of your household, such as children, grandparents, or other adults in the household who are full or part time residents (if applicable). This information helps calculate your household size.

Household Member Household Member
First Name First Name
Last Name Last Name
Phone Phone
Alternate Phone Alternate Phone
Email Email
Date of Birth Date of Birth
Relationship to household Relationship to household
Primary Language Primary Language
Household Member Household Member
First Name First Name
Last Name Last Name
Phone Phone
Alternate Phone Alternate Phone
Email Email
Date of Birth Date of Birth
Relationship to household Relationship to household
Primary Language Primary Language
Ownership Application - Page 1
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Please provide accurate information. The purpose of this page is to determine if your household qualifies for Priority Points. Carefully read each description of priority living and employment circumstances; then check all that apply. You must provide the listed documentation as proof before receiving a unit to rent.
□ I am a CURRENT CITYof CUPERTINO RESIDENT - 1 POINT
• Households applying under the priority description RESIDENT shall provide proof of residency in Cupertino. □ I am currently working in the CITY of CUPERTINO - 2 POINTS • A current paystub with Cupertino address or letter of verification from your employer shall serve as sufficient proof. □ I am working in the CITY of CUPERTINO AT PUBLIC AGENCY - 1 POINT • A current paystub with Cupertino address or letter of verification from your employer shall serve as sufficient proof.

Other Priorities
□
I have been displaced from rental housing in Cupertino by public or private redevelopment - HIGHEST

PRIORITY
• A letter verifying your displacement.
□ I have a disability and request an accessible unit when ones becomes available Ownership Application - Page 2
BMR Priority Point Questionaire
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Ownership Application - Page 3
Please provide accurate information. Income eligibility will be determined based on the gross combined household income and will be verified based on the supporting documentation requested at the end of this certification.

Head of Household Co-Head of Household
Annual Income (before taxes) Annual Income (before taxes) From Full-Time Employment $ From Full-Time Employment $ From Part-Time Employment $ From Part-Time Employment $ From Self-Employment $ From Self-Employment $
From Spousal Support $ From Spousal Support $
From Child Support $ From Child Support $
Investment Income $ Investment Income $
Social Security Income $ Social Security Income $
SSDI $ SSDI $
Income from Assets (e.g. rental income) $ Income from Assets (e.g. rental income) $ Other $ Other $
TOTAL $ TOTAL $
Household Member Household Member
Annual Income (before taxes) Annual Income (before taxes) From Full-Time Employment $ From Full-Time Employment $ From Part-Time Employment $ From Part-Time Employment $ From Self-Employment $ From Self-Employment $
From Spousal Support $ From Spousal Support $
From Child Support $ From Child Support $
Investment Income $ Investment Income $
Social Security Income $ Social Security Income $
SSDI $ SSDI $
Income from Assets (e.g. rental income) $ Income from Assets (e.g. rental income) $ Other $ Other $
TOTAL $ TOTAL $
Household Member Household Member
Annual Income (before taxes) Annual Income (before taxes) From Full-Time Employment $ From Full-Time Employment $ From Part-Time Employment $ From Part-Time Employment $ From Self-Employment $ From Self-Employment $
From Spousal Support $ From Spousal Support $
From Child Support $ From Child Support $
Investment Income $ Investment Income $
Social Security Income $ Social Security Income $
SSDI $ SSDI $
Income from Assets (e.g. rental income) $ Income from Assets (e.g. rental income) $ Other $ Other $
TOTAL $ TOTAL $
Economic Profile
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Ownership Application - Page 4
Please list the current value of all assets of all members of the household aged 18 and older. If zero, please write "0" in the blank. Please include an account description and last 4 digits of the account number (for example, Bank of America #4567).

Combined Household Assets
Checking Accounts $
Savings Accounts $
Retirement Accounts $
Investments $
Real Estate $
CDs (Certificates of Deposit) $
Gift Money $
Other $
Value of Assets Description & Last 4 Digits of Account Number (if applicable) (continued)
(continued)
(continued)
Household Assets
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Ownership Application - Page 5
Demographic information is a not a criteria in the certification process, but provides a clearer picture on who may benefit from affordable housing opportunities and can help advocates of affordable housing make the case to policymakers.

Head of Household Co-Head of Household
Race American Indian or Alaska Native Race American Indian or Alaska Native Asian Asian
Black or African American Black or African American
Native Hawaiian or PacificIslander Native Hawaiian or PacificIslander White White
American Indian ANDWhite American Indian ANDWhite
Asian ANDWhite Asian ANDWhite
Black or African American ANDWhite Black or African American ANDWhite American Indian AND Black American Indian AND Black
Other multiple races Other multiple races
Ethnicity Hispanic Non-Hispanic Ethnicity Hispanic Non-Hispanic Female Headed Household Yes No Female Headed Household Yes No Marital Status Single
Married/Domestic Partnership
Marital Status Single
Married/Domestic Partnership
Separated Separated
Divorced Divorced
Widowed Widowed
Education Less than high-school diploma Education Less than high-school diploma High-school diploma or equivalent High-school diploma or equivalent Some post-secondary education Some post-secondary education Certification from training program Certification from training program Associate's degree Associate's degree
Bachelor's degree Bachelor's degree
Master's or other graduate degree Master's or other graduate degree Employment Status Self-Employed Employment Status Self-Employed Work Full-Time for Employer Work Full-Time for Employer Work Part-Time for Employer Work Part-Time for Employer Homemaker Homemaker
Full-Time Student Full-Time Student
Permanently unable to work Permanently unable to work
Unemployed and seeking work Unemployed and seeking work Unemployed and not seeking work Unemployed and not seeking work Retired Retired
Veteran Yes No Veteran Yes No
Demographics (Optional)
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Please provide supporting documentation for EVERY ADULT MEMBER OF THE HOUSEHOLD AGED 18 AND OVER. All documents must be legible to be considered. To help keep you organized, we recommend you print a copy of his checklist for each adult household member to use as a Table of Contents.

A. Proof of Identify: One form of legal identification for every adult Required Check below for which form of ID provided.

CA Drivers License CA Identification Card US Passport
B. Social Security Card Social Security Card Required Please contact Social Security at (800) 772-1213 if you cannot locate.

C. Documentation of Employment Income Required Please contact your Human Resources department if you cannot locate.

If employed, provide your most recent consecutive paystubs for the past two (2) months.

1. Dates covered by paycheck: to

2. Dates covered by paycheck: to

3. Dates covered by paycheck: to

4. Dates covered by paycheck: to
OR
If self-employed:

A year-to-date Profit & Loss statement Not Applicable
D. Two (2) months of documentation for any other income Required if applicable Child Support
Social Security
SSI
OR
Zero Income Affidavit
Pension
Alimony
Long Term Disability
Foster Care
Gift letter (if applicable)
Other (please describe)
E. Three (3) most recent Federal Tax Returns OR Verification of Non-Filing Required Please contact the IRS at (800) 829-1040 if you cannot locate your returns.

If you did NOT file taxes,contact the IRS at(800) 829-1040 and request a “Verification of Non-Filing.” Three (3) Most Recent 1040 Federal Tax Returns (include ALL pages) or Verification of Non-Filing (if applicable)
F. Three (3) most recent W-2’s Required if issued W-2s
Please contact your Human Resources department if you cannot locate. You may also call the IRS at (800) 829-1040.

Most recent W-2s or 1099s Should cover all reported income in same year's tax return Not Applicable
G. Last two (2) consecutive statements from ALL Financial Accounts* Required Computer printouts are acceptable ONLY if they contain a complete account number, begin & end balances, and begin & end dates.

Please include statements for ALL OPEN accounts, even if they contain a $0 balance. Check Not Applicable if you do not have such accounts.

Most recent two (2) consecutive Bank Statements
Most recent two (2) consecutive statements for Retirement Accounts (401k, IRA, etc.) Most recent two (2) consecutive statements for Stocks, Mutual Funds, Profit Sharing accounts Most recent two (2) statements for CDs, Money Market accounts, etc.

Not Applicable
H. Proof of Student Status Required if applicable
Copy of Current Registration OR an Unofficial Transcript Not Applicable
I. PreQualification
PreQualification Letter from Lender
Ownership Application - Page 6
Supporting Documentation
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Please have each adult, aged 18 and over, in the household print their name, sign, and date this page.

I certify that the foregoing application accurately reflects all income received from all sources for all members of the household.

I certify under penalty of perjury under the laws of the United States of America that the foregoing is true and correct to the best of my knowledge. I further understand that providing false representations herein constitutes an act of fraud and that false, misleading, or incomplete information may result in the termination of real estate documents related to this application (28 U.S.

Code 1746).

Name
Signature
Date

Name
Signature
Date

Name Name
Signature Signature
Date Date
Name Name
Signature Signature
Date Date
Rise Housing and the City of Cupertino do not discriminate against any persons on the grounds of race, color, religion, national origin, ancestry, sex, gender, gender identity, gender expression, sexual orientation, marital status, familial status, source of income, Ownership Application - Page 7
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This certification includes required information as well as optional information. Unless a section is labeled "Optional" it is a required section and must be completed. We encourage households to complete all sections. Answers to optional questions are confidential and will NOT impact your eligibility.

In aggregate, the collective answers from the pool of households will help Hello Housing better understand who benefits from affordable housing programs and to advocate to policy makers for effective programs.

Current Address Date
City
State
Zip Code
Head of Household & Co-Head of Household
Below, please provide details for the Head of Household and Co-Head of Household.

Head of Household Co-Head of Household (If Applicable)
Please note that Head(s) of Household must be an adult (18 years or older).

First Name First Name
Last Name Last Name
Phone Phone
Alternate Phone Alternate Phone
Email Email
Date of Birth Date of Birth
Primary Language Primary Language
Additional Household Members
Below, please provide information on any other members of your household, such as children, grandparents, or other adults in the household who are full or part time residents (if applicable). This information helps calculate your household size.

Household Member Household Member
First Name First Name
Last Name Last Name
Phone Phone
Alternate Phone Alternate Phone
Email Email
Date of Birth Date of Birth
Relationship to household Relationship to household
Primary Language Primary Language
Household Member Household Member
First Name First Name
Last Name Last Name
Phone Phone
Alternate Phone Alternate Phone
Email Email
Date of Birth Date of Birth
Relationship to household Relationship to household
Primary Language Primary Language
Rental Application - Page 1
Exhibit 3
Below Market Price (BMR) - Rental Application
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Rental Application - Page 2
BMR Priority Point Questionaire
Please provide accurate information. The purpose of this page is to determine if your household qualifies for Priority Points. Carefully read each description of priority living and employment circumstances; then check all that apply. You must provide the listed documentation as proof before receiving a unit to rent. □ I am a CURRENT CITYof CUPERTINO RESIDENT - 1 POINT
• Households applying under the priority description RESIDENT shall provide proof of residency in Cupertino. □ I am currently working in the CITY of CUPERTINO - 2 POINTS • A current paystub with Cupertino address or letter of verification from your employer shall serve as sufficient proof. □ I am working in the CITY of CUPERTINO AT PUBLIC AGENCY - 1 POINT • A current paystub with Cupertino address or letter of verification from your employer shall serve as sufficient proof.

Other Priorities
□
I have been displaced from rental housing in Cupertino by public or private redevelopment - HIGHEST

PRIORITY
• A letter verifying your displacement.
□ I have a disability and request an accessible unit when ones becomes available 670
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Rental Application - Page 3
Please provide accurate information. Income eligibility will be determined based on the gross combined household income and will be verified based on the supporting documentation requested at the end of this certification.

Head of Household Co-Head of Household
Annual Income (before taxes) Annual Income (before taxes) From Full-Time Employment $ From Full-Time Employment $ From Part-Time Employment $ From Part-Time Employment $ From Self-Employment $ From Self-Employment $
From Spousal Support $ From Spousal Support $
From Child Support $ From Child Support $
Investment Income $ Investment Income $
Social Security Income $ Social Security Income $
SSDI $ SSDI $
Income from Assets (e.g. rental income) $ Income from Assets (e.g. rental income) $ Other $ Other $
TOTAL $ TOTAL $
Household Member Household Member
Annual Income (before taxes)
From Full-Time Employment $
Annual Income (before taxes)
From Full-Time Employment $
From Part-Time Employment $ From Part-Time Employment $ From Self-Employment $ From Self-Employment $
From Spousal Support $ From Spousal Support $
From Child Support $ From Child Support $
Investment Income $ Investment Income $
Social Security Income $ Social Security Income $
SSDI $ SSDI $
Income from Assets (e.g. rental income) $ Income from Assets (e.g. rental income) $ Other $ Other $
TOTAL $ TOTAL $
Household Member Household Member
Annual Income (before taxes)
From Full-Time Employment $
Annual Income (before taxes)
From Full-Time Employment $
From Part-Time Employment $ From Part-Time Employment $ From Self-Employment $ From Self-Employment $
From Spousal Support $ From Spousal Support $
From Child Support $ From Child Support $
Investment Income $ Investment Income $
Social Security Income $ Social Security Income $
SSDI $ SSDI $
Income from Assets (e.g. rental income) $ Income from Assets (e.g. rental income) $ Other $ Other $
TOTAL $ TOTAL $
Economic Profile
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Rental Application - Page 4
Please list the current value of all assets of all members of the household aged 18 and older. If zero, please write "0" in the blank. Please include an account description and last 4 digits of the account number (for example, Bank of America #4567).

Combined Household Assets
Checking Accounts $
Savings Accounts $
Retirement Accounts $
Investments $
Real Estate $
CDs (Certificates of Deposit) $
Gift Money $
Other $
Value of Assets Description & Last 4 Digits of Account Number (if applicable) (continued)
(continued)
(continued)
Household Assets
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Rental Application - Page 5
Demographic information is a not a criteria in the certification process, but provides a clearer picture on who may benefit from affordable housing opportunities and can help advocates of affordable housing make the case to policymakers.

Head of Household Co-Head of Household
Race American Indian or Alaska Native Race American Indian or Alaska Native Asian Asian
Black or African American Black or African American
Native Hawaiian or Pacific Islander Native Hawaiian or Pacific Islander White White
American Indian AND White American Indian AND White
Asian AND White Asian AND White
Black or African American AND White Black or African American AND White American Indian AND Black American Indian AND Black
Other multiple races Other multiple races
Ethnicity Hispanic Non-Hispanic Ethnicity Hispanic Non-Hispanic Female Headed Household Yes No Female Headed Household Yes No Marital Status Single
Married/Domestic Partnership
Marital Status Single
Married/Domestic Partnership
Separated Separated
Divorced Divorced
Widowed Widowed
Education Less than high-school diploma Education Less than high-school diploma High-school diploma or equivalent High-school diploma or equivalent Some post-secondary education Some post-secondary education Certification from training program Certification from training program Associate's degree Associate's degree
Bachelor's degree Bachelor's degree
Master's or other graduate degree Master's or other graduate degree Employment Status Self-Employed Employment Status Self-Employed Work Full-Time for Employer Work Full-Time for Employer Work Part-Time for Employer Work Part-Time for Employer Homemaker Homemaker
Full-Time Student Full-Time Student
Permanently unable to work Permanently unable to work
Unemployed and seeking work Unemployed and seeking work Unemployed and not seeking work Unemployed and not seeking work Retired Retired
Veteran Yes No Veteran Yes No
Demographics (Optional)
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Rental Application - Page 6
Please provide supporting documentation for EVERY ADULT MEMBER OF THE HOUSEHOLD AGED 18 AND OVER. All documents must be legible to be considered. To help keep you organized, we recommend you print a copy of his checklist for each adult household member to use as a Table of Contents.

A. Proof of Identify: One form of legal identification for every adult Required Check below for which form of ID provided.

CA Drivers License CA Identification Card US Passport
B. Social Security Card Social Security Card Required Please contact Social Security at (800) 772-1213 if you cannot locate.

C. Documentation of Employment Income Required Please contact your Human Resources department if you cannot locate.

If employed, provide your most recent consecutive paystubs for the past two (2) months.

1. Dates covered by paycheck: to

2. Dates covered by paycheck: to

3. Dates covered by paycheck: to

4. Dates covered by paycheck: to
OR
If self-employed:

A year-to-date Profit & Loss statement Not Applicable
D. Two (2) months of documentation for any other income Required if applicable Child Support Pension Foster Care
Social Security Alimony Gift letter (if applicable)
SSI Long Term Disability Other (please describe)
OR
Zero Income Affidavit
E. Most recent of Federal Tax Returns OR Verification of Non-Filing Required Please contact the IRS at (800) 829-1040 if you cannot locate your returns.

If you did NOT file taxes, contact the IRS at (800) 829-1040 and request a “Verification of Non-Filing.” Most Recent 1040 Federal Tax Return (include ALL pages) or Verification of Non-Filing (if applicable)
F. Most recent W-2’s Required if issued W-2s
Please contact your Human Resources department if you cannot locate. You may also call the IRS at (800) 829-1040.

Most recent W-2s or 1099s Should cover all reported income in same year's tax return Not Applicable
G. Last two (2) consecutive statements from ALL Financial Accounts* Required Computer printouts are acceptable ONLY if they contain a complete account number, begin & end balances, and begin & end dates.

Please include statements for ALL OPEN accounts, even if they contain a $0 balance. Check Not Applicable if you do not have such accounts.

Most recent two (2) consecutive Bank Statements
Most recent two (2) consecutive statements for Retirement Accounts (401k, IRA, etc.) Most recent two (2) consecutive statements for Stocks, Mutual Funds, Profit Sharing accounts Most recent two (2) statements for CDs, Money Market accounts, etc.

Not Applicable
H. Proof of Student Status Required if applicable
Copy of Current Registration OR an Unofficial Transcript Not Applicable
Supporting Documentation
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Rental Application - Page 7
Please have each adult, aged 18 and over, in the household print their name, sign, and date this page.

I certify that the foregoing application accurately reflects all income received from all sources for all members of the household.

I certify under penalty of perjury under the laws of the United States of America that the foregoing is true and correct to the best of my knowledge. I further understand that providing false representations herein constitutes an act of fraud and that false, misleading, or incomplete information may result in the termination of real estate documents related to this application (28 U.S.

Code 1746).

Name Name
Signature Signature
Date Date
Name Name
Signature Signature
Date Date
Name Name
Signature Signature
Date Date
Rise Housing and the City of Cupertino do not discriminate against any persons on the grounds of race, color, religion, national origin, ancestry, sex, gender, gender identity, gender expression, sexual orientation, marital status, familial status, source of income, genetic information, medical condition, physical disability or mental disability, or any other category protected by law.

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Exhibit 4
24 CFR 5.609
§ 5.609 Annual income.
(a)Annual income means all amounts, monetary or not, which:
(1)Go to, or on behalf of, the family head or spouse (even if temporarily absent) or to any other family member; or
(2)Are anticipated to be received from a source outside the family during the 12-month period following admission or annual reexamination effective date; and (3)Which are not specifically excluded in paragraph (c) of this section. (4)Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access.
(b)Annual income includes, but is not limited to:
(1)The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services; (2)The net income from the operation of a business or profession. Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family; (3)Interest, dividends, and other net income of any kind from real or personal property.

Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation is permitted only as authorized in paragraph (b)(2) of this section. Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $ 5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD;
(4)The full amount of periodic amounts received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start of a periodic amount (except as provided in paragraph (c)(14) of this section); (5)Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (except as provided in paragraph (c)(3) of this section);
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(6)Welfare assistance payments. (i) Welfare assistance payments made under the Temporary Assistance for Needy Families (TANF) program are included in annual income only to the extent such payments:
(A)Qualify as assistance under the TANF program definition at 45 CFR 260.31; and (B)Are not otherwise excluded under paragraph (c) of this section. (ii)If the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare assistance income to be included as income shall consist of:
(A)The amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities; plus
(B)The maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities. If the family's welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under this paragraph shall be the amount resulting from one application of the percentage.
(7)Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing in the dwelling;
(8)All regular pay, special pay and allowances of a member of the Armed Forces (except as provided in paragraph (c)(7) of this section).
(9)For section 8 programs only and as provided in 24 CFR 5.612, any financial assistance, in excess of amounts received for tuition and any other required fees and charges, that an individual receives under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq. ), from private sources, or from an institution of higher education (as defined under the Higher Education Act of 1965 (20 U.S.C. 1002)), shall be considered income to that individual, except that financial assistance described in this paragraph is not considered annual income for persons over the age of 23 with dependent children. For purposes of this paragraph, "financial assistance" does not include loan proceeds for the purpose of determining income.
(c)Annual income does not include the following:
(1)Income from employment of children (including foster children) under the age of 18 years;
(2)Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone); (3)Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), 677
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capital gains and settlement for personal or property losses (except as provided in paragraph (b)(5) of this section);
(4)Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member;
(5)Income of a live-in aide, as defined in § 5.403;
(6)Subject to paragraph (b)(9) of thissection, the full amount of student financial assistance paid directly to the student or to the educational institution; (7)The special pay to a family member serving in the Armed Forces who is exposed to hostile fire;
(8)
(i)Amounts received under training programs funded by HUD; (ii)Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS); (iii)Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and which are made solely to allow participation in a specific program;
(iv)Amounts received under a resident service stipend. A resident service stipend is a modest amount (not to exceed $ 200 per month) received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development. Such services may include, but are not limited to, fire patrol, hall monitoring, lawn maintenance, resident initiatives coordination, and serving as a member of the PHA's governing board. No resident may receive more than one such stipend during the same period of time;
(v)Incremental earnings and benefits resulting to any family member from participation in qualifying State or local employment training programs (including training programs not affiliated with a local government) and training of a family member as resident management staff. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives, and are excluded only for the period during which the family member participates in the employment training program;
(9)Temporary, nonrecurring or sporadic income (including gifts); (10)Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era; (11)Earnings in excess of $ 480 for each full-time student 18 years old or older (excluding the head of household and spouse);
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(12)Adoption assistance payments in excess of $ 480 per adopted child; (13)[Reserved]
(14)Deferred periodic amounts from supplemental security income and Social Security benefits that are received in a lump sum amount or in prospective monthly amounts, or any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or in prospective monthly amounts.
(15)Amounts received by the family in the form of refunds or rebates under State or local law for property taxes paid on the dwelling unit;
(16)Amounts paid by a State agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home; or
(17)Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(c) apply. A notice will be published in the Federal Register and distributed to PHAs and housing owners identifying the benefits that qualify for this exclusion.

Updates will be published and distributed when necessary. (d)Annualization of income. If it is not feasible to anticipate a level of income over a 12- month period ( e.g., seasonal or cyclic income), or the PHA believes that past income is the best available indicator of expected future income, the PHA may annualize the income anticipated for a shorter period, subject to a redetermination at the end of the shorter period.

Excerpts from Technical Guide for Determining Income and Allowances for the HOME Program
Anticipating Income
The HOME regulations at 24 CFR 92.203(d)(1) require that, for the purpose of determining eligibility for HOME assistance, a PJ must project a household’s income in the future. To do so, a “snapshot” of the household’s current circumstances is used to project future income. In general, a PJ should assume that today’s circumstances will continue for the next 12 months, unless there is verifiable evidence to the contrary. For example, if a head of household is currently working for $7.00 per hour, 40 hours per week, the PJ should assume that this family member will continue to do so for the next year. Thus, estimated earnings will be $7.00 per hour multiplied by 2,080 hours, or $14,560 per year.

This method should be used even when it is not clear that the type of income received currently will continue in the coming year. For example, assume a family member has been receiving unemployment benefits of $100 per month for 16 weeks at the time of income certification. It is unlikely that the family member will continue on unemployment for another 52 weeks. However, because it is not known whether or when the family member will find employment, the PJ should 679
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use the current circumstances to anticipate annual (gross) income. Income would therefore be calculated as follows: $100 per week x 52 weeks, or $5,200.

The exception to this rule is when documentation is provided that current circumstances are about to change. For example, an employer might report that an employee currently makes $7.50 an hour, but a negotiated union contract will increase this amount to $8.25 an hour eight weeks from the date of assistance. In such cases, income can be calculated based on the information provided.

In this example, the calculation would be as follows: • $7.50/hour x 40 hours/week x 8 weeks = $2,400 • $8.25/hour x 40 hours/week x 44 weeks = $14,520 • $2,400 + $14,520 = $16,920.

Sources of Earned Income
In addition to hourly earnings, PJs must account for all earned income. In addition to the base salary, this will include annual cost of living adjustments (COLAs), bonuses, raises, and overtime pay. In the case of overtime, it is important to clarify whether overtime is sporadic or a predictable component of an employee’s income. If it is determined that an applicant has earned and will continue to earn overtime pay on a regular basis, PJs should calculate the average amount of overtime pay earned by the applicant over the pay period the PJ is using to calculate income eligibility (3 months or 12 months). This average amount is then to be added to the total amount of projected earned income over the following 12-month period. Exhibit 2.1 provides a step-by- step explanation of the standard methodology for projecting annual income.

Exhibit 2.1 – Step-by-Step Methodology for Projecting Annual Income Steps Instruction
Step 1: Collect appropriate
income documentation.

Appropriate documentation includes pay stubs, third-party verification, bank statements (checking and/or savings), or certified copies of tax returns. (These can be acquired by submitting an IRS Form 4506, “Request for Copy of Tax Form.”) Step 2: Calculate the
applicant household’s
projected income based
upon documentation.

This calculation must include hourly wage figures, overtime figures, bonuses, anticipated raises, COLAs, or other anticipated changes in income. Other specific inclusions must also be reflected in the calculation, depending upon which definition of annual income the PJ has elected to use for its program. Specific instructions for each of the three definitions of income under HOME are provided later in this guide.

Step 3: Compare the amount
of projected income
against current HOME
income limits.

Once the PJ has calculated the household’s income, based on its selected definition, it must compare the household’s final projected figure to annual HOME income limits, which are adjusted according to household size. These limits are posted online at:
www.hud.gov/offices/cpd/affordablehousing/programs/home/lim its/inco me/index/cfm. This information is also available through the CPD office of your state or local HUD Field Office.

Households whose projected annual income is less than the current HOME income limits are eligible for HOME assistance. 680
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EXHIBIT 5

CITY OF CUPERTINO INCLUSIONARY HOUSING PROGRAM

BUYER'S DISCLOSURE STATEMENT
The City of Cupertino (the "City") has adopted an Inclusionary Housing Ordinance that makes it possible for median and moderate income households to buy a house at a price that is affordable.

The price that you are paying for your house is below the market rate, as required by the Inclusionary Housing Ordinance.

In exchange for giving you the opportunity to buy your house at a below-market affordable price, the City will require you to sign a Promissory Note, Deed of Trust, and an Occupancy, Refinancing, and Resale Agreement with Option to Purchase (the "Resale Agreement"). The Deed of Trust and Resale Agreement will be recorded against your property. These documents are enforceable by the City. In general, the Promissory Note, Deed of Trust and the Resale Agreement set forth conditions that you must meet, including but not limited to the following:
• The Resale Agreement requires you to live in your home as your principal place of residence and prohibits you from renting out your home.
• The Resale Agreement places controls on the sale of your home. There is a limit to the price at which you can sell the home. If you sell the home above the restricted price, you must pay the City the difference between the restricted price and the sales price. In addition, you must follow certain steps and procedures when you decide to sell your • home.
• The City has an option to purchase your home at a restricted price when you put the home up for sale or if you violate any agreements.

The purpose of the Promissory Note, Resale Agreement, and Deed of Trust is to make sure that the City's goal of providing affordable homeownership opportunities to moderate income buyers continues to be met by keeping your house affordable to other moderate income households should you choose to sell or move. The City has helped you to buy a home; it wants to help others as well.

This Disclosure Statement explains the major provisions of the Promissory Note, Deed of Trust, and Resale Agreement so that you will understand their requirements. You should, of course, read the entire Promissory Note, the Resale Agreement, and the Deed of Trust and become familiar with them if you are considered for the purchase of a particular BMR home.1 1 Numerical examples are included in this Disclosure Statement to help you better understand the provisions of the Buyer's Resale Agreement and Promissory Note. Please be aware that these are simply to show how things work and that they are not intended to represent your specific situation. If you follow along with a calculator, you may not get exactly the same answers. Any differences are probably due to how your calculator "rounds-off" numbers. 681
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REQUIREMENTS WHILE LIVING IN A BMR UNIT
A. REQUIREMENTS IN EFFECT FOR 99-YEAR TERM
The requirements that are in the Resale Agreement apply until the earlier of (i) ninety- nine (99) years from the date of the recordation of the Resale Agreement, or (ii) the date you sell or transfer your home in accordance with the Resale Agreement and the Deed of Trust. If you own and live in your home for the whole 99-year term, all of the requirements of the Resale Agreement go away.

B. PRIMARY RESIDENCE AND ANNUAL CERTIFICATION
Your house must be your main place of residence. This means you must live in your home for at least 10 months out of each calendar year. At least once per year, City or its agent will verify that owners continue to occupy the BMR units. The verification process will include the following steps:
• The City or its agent will mail to all BMR units a Certification of Owner Occupancy. • You must complete the form and return it to the City within 30 days, including proof of occupancy such as a copy of the most recent mortgage statement, property tax bill, or utility bill.
• The City or its agent will annually order property title lot books to verify homeownership and liens on the property.

Failure to Submit Annual Certification
If the City determines that you have willfully made false statements or misrepresented any facts on the annual certification, or if you fail to submit the Certification of Owner Occupancy, the City will treat this as a breach of the Resale Agreement and the Deed of Trust and will take all legal remedies available, including forced sale of the unit.

C. LEASE OR RENT OF HOME
You are not allowed to lease or rent the house to anyone, except that in the event of substantial hardship, you may rent-out the house for no more than 12 months, with prior written City approval.

If the City permits you to rent out your home for up to 12 months, you may only rent the home to a lower income household, and the rent you may charge is restricted by the City to an affordable rent, as defined by state law (approximately 30% of the tenant's household income, less an allowance for utilities). If you violate these requirements, the City may sue to enforce them, and you will owe the City any Excess Rental Proceeds you have collected (i.e., the rent in excess of the restricted amount you are permitted to charge). You will also be in default under the Resale Agreement, and the City may require you to sell the home to the City in the manner described in the Resale Agreement.

D. MAINTAINING YOUR HOME/ PROPERTY INSURANCE
By signing the Resale Agreement and Deed of Trust, you agree to keep your home and landscaping in good repair and in neat, clean, and orderly condition and to prevent deterioration 682
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of the home. You agree not use or dispose of any hazardous substances on the property, except those commonly used on residential properties. You also agree to keep a standard homeowner's insurance policy, with the City named as an additional insured. The insurance policy shall be in an amount equal to the replacement value of the home. Every five (5) years, the replacement value will be reviewed and adjusted as needed, if requested by the City. If you hire a contractor to work on your home, the contractor must be licensed and carry liability and workers compensation insurance.

E. CAPITAL IMPROVEMENTS
If you make improvements to your home, and you want the value of the capital improvements to be taken into account when the Maximum Restricted Resale Price (or option price) is calculated, you must obtain written approval of the improvements by the City before the improvements are made.

The initial cost of such improvements must be at least $2,000 or more, and the improvements must conform with existing building codes and with Federal Housing Quality Standards. A copy of the receipts and invoices must be submitted to the City or its agent for proof of the capital improvements made to your home.

F. REFINANCE AND JUNIOR MORTGAGES
The Resale Agreement allows you to refinance your first mortgage loan or place a second mortgage or equity line of credit on your home, but places restrictions on the amount received by you from the refinancing. Following refinancing of your first mortgage or the addition of a junior mortgage, the principal amount of all debt secured by your house must not be greater than the larger of: (i) 90 percent of the Maximum Restricted Resale Price; or (ii) the original amount of all the loans you took out to finance the purchase of your home. If you are considering a refinance of your first mortgage or obtaining a junior mortgage, you should contact the City for a calculation of the Maximum Restricted Resale Price amount before you contact your financial institution. The City will not approve any mortgage that allows payment of interest only, negative amortization, adjustable rate, or reverse mortgage.

REQUIREMENTS FOR SELLING OR TRANSFERRING OWNERSHIP OF A

BMR UNIT
A. CITY HAS OPTION TO PURCHASE
In exchange for the opportunity given to you to buy your home at an affordable, below- market price, the City has an option to buy your home at a restricted price if you sell your home or transfer ownership during the term of the Resale Agreement or if you violate any of the terms of the Resale Agreement. In other words, the City has the first opportunity to buy your house before anyone else.

The City may also give its option to purchase your house to a public agency, a nonprofit organization, or a person or family meeting income and other requirements. 683
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B. PERMISSIBLE TRANSFERS OF OWNERSHIP – NOT A SALE
Certain transfers of ownership are allowed although these transfers will require the new owner or owners to sign new BMR documents. The following transfers are permitted under the BMR program.

The City must be informed of these transfers, but the City does not have the right to purchase your home if you transfer ownership to:
• An existing spouse or domestic partner;
• A spouse or domestic partner where the spouse or domestic partner becomes the co-owner of the home;
• One spouse as part of a marriage dissolution proceeding; • An existing spouse or domestic partner of owner by devise or inheritance following the death of owner; or
• An inter vivos (living) trust in which the owner is the beneficiary and trustee, provided a new resale restriction is executed in the name of the living trust and the BMR owner provides the City with a copy of the trust document or certification of trust to verify the trustee information.

Inheritance
In the event that someone inherits your home, the administrator of your estate or the person inheriting your home must contact the City within 30 days of your death. If the person inheriting your home qualifies as an eligible purchaser, he or she may keep your home, but he or she will have to execute new homebuyer documents with the City. If the person inheriting your home does not qualify as an eligible purchaser, he or she will have to sell the home in accordance with the Resale Agreement, but may live in the home for up to 12 months, leave the home vacant for up to 12 months, or rent the home to a low income tenant at a restricted rent for up to a year. If the person inheriting your home does not qualify as an eligible purchaser, and does not comply with the terms of the Resale Agreement, he or she will be in default under the Resale Agreement, and the City may exercise its option to purchase the home at the Maximum Restricted Resale Price. These provisions do not apply to a spouse or domestic partner of the owner.

C. PROCESS FOR SELLING A BMR UNIT
The first action that you must take if you want to sell your home is to contact the City or its agent and submit an Owner’s Notice of Intent to Transfer. You should do this before you contact a real estate broker and before you put the home on the market. The notice must include a pest report from a licensed pest inspector, other required information, and a description of any capital improvements that you have made and for which you received City approval. The Owner’s Notice of Intent to Transfer must be sent by certified mail with a return receipt requested or by express delivery service with a delivery receipt. Notices are considered effective as of the date received or the date delivery was refused.

City’s Response
The City will contact you within seven days of receiving the Intent to Transfer to arrange for a time to inspect your property to assess its condition. Within 30 days of the City’s receipt of the Intent to Transfer, the pest control report, other required information, and the capital 684
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improvement request, and the City’s on-site inspection, the City will send you a City Response Notice.

The Notice will explain whether the City intends to exercise its right to purchase or transfer its right to an income-eligible buyer. The City Response Notice will also provide the restricted sales price amount.

City Exercises Right to Purchase
If the City elects to exercise its right to purchase the property or transfer its right to an income eligible buyer, escrow will close within 90 days of the date that the City Response Notice is sent to you. The City or its agent will select the new buyer from the City's waitlist.

When your home is bought by the City or a City-selected buyer under the City's option to purchase, you will pay to the City a transaction fee equal to six percent of the sales price. This fee takes the place of the fee for a broker's services. The City will be performing those services when it purchases your home.

You should not contact a broker to sell your home until the City has informed you whether or not it will not exercise its option to purchase your home. If you contact a broker and the City exercises its option, you will owe the City a six percent transaction fee and you will be solely responsible for any additional broker fee.

City Elects to Not Exercise Right to Purchase
If the City chooses to not exercise its right to purchase the property or assign its right to an income eligible buyer, you may sell the home to an income eligible household for no more than the restricted sales price provided by the City. An eligible purchaser is a household (1) who will live in the home; (2) whose income is equal to or less than the income level designated in the City Response Notice; and (3) who will agree to sign resale restriction documents required by the City and to otherwise cooperate with the City.

Once you find a potential eligible purchaser, you must refer the proposed buyer to the City so that the City can determine if in fact the buyer is an eligible purchaser. The seller and the proposed buyer must give specific information and documents to the City as described in the Resale Agreement.

When the sale of the home to the eligible purchaser is completed, you must submit to the City the information and documents listed in Resale Agreement.

Non-Permissible Transfers
You may not transfer title to the BMR unit ( e x c e p t f o r t h e t r a n s f e r s listed in Section B a b o v e ) without submitting the Owner’s Notice of Intent to Transfer and receiving the City’s approval. Title to the BMR unit may not be transferred to your friends or relatives whose income or assets exceeds the established limits, or who will not occupy the BMR unit on a permanent basis after the transfer, or who are otherwise not eligible to purchase a BMR unit.

D. SALES PRICE OF BMR UNIT IS RESTRICTED: MAXIMUM

RESTRICTED RESALE PRICE
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The City wants to make sure that the price of the BMR unit remains affordable to future median and moderate-income buyers. Therefore, the Resale Agreement limits the sales price of your home. The Maximum Restricted Resale Price that you can receive is the lower of the Indexed Price described in Section D.1 below and the Fair Market Value as described in Section D.2.

1. INDEXED PRICE
(a) Owner's Base Price (price at which you bought it)
(b) increased by the percentage increase of the Area Median Income for Santa Clara County for a household size of 4 persons from the date of your original purchase (the recording date of the grant deed for the property) to the date of receipt by the City of the Owner's Notice of Intent to Transfer
plus
(c) appraised value (not cost) of any eligible capital improvements and any special assessments imposed by the homeowners association and paid by you. Eligible capital improvements, among other requirements, must be approved in writing by the City before they are installed, as described previously
minus
(d) Cost of repairs to correct any violations of building or other codes, to put the house in a "sellable condition," such as cleaning, painting, appliance and other repairs, and other deferred maintenance repairs.

Example 1 shows how the Indexed Price formula works.

EXAMPLE 1 You sell your house at the end of eight years. The original price of your threebedroom home was $341,000. The median income for a family of four in Santa Clara County when you bought your home was $105,500. Median income increases by 16% over the eight years. Five years after buying your home, you remodel your kitchen (with prior City written approval) and the remodeling work is valued by an appraiser as worth $3,000 at the time you sell. There is no deferred maintenance. (a)
(b)
Original Price of Home
Median Income Increases by 16% over
$341,000
eight years
multiply (a) by 16%, then add 54,560
result ($54,560) to (a) $395,560
(c) Appraised Value (not cost) of Eligible
Capital Improvements
+ 3,000
INDEXED PRICE $398,560

2. FAIR MARKET VALUE
Under the Resale Agreement, the fair market value can be determined in one of two ways. First, it can be established by a real estate appraiser approved in advance by the City. If 686
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possible, the appraisal will be based on sales prices of homes similar to yours that are sold in your market area during the preceding three-month period. The appraisal will not take into account the fact that the resale price of your home is restricted by the Resale Agreement. The value of any (i) eligible capital improvements that you have made to your home, or (ii) damage or deferred maintenance that decrease its value shall be included in the appraisal. The cost of the appraisal used to determine fair market value will be paid by you, unless a new buyer has obtained an appraisal that you may utilize. The Resale Agreement also allows you and the City to set the fair market value of your home by mutual agreement instead of relying on an appraiser. Both you and the City would have to agree to this particular method (instead of hiring an appraiser) and to the final fair market value amount. If you and the City fail to agree on the Fair Market Value, either one can require use of the appraisal method.

Example 2 shows how the Indexed Price and the Fair Market Value of the home are compared to determine the Maximum Restricted Resale Price at which you can offer your house for sale.

EXAMPLE 2 The assumptions are the same as in Example 1. You sell your house at the end of eight years. The original sales price of your home was $341,000. The median income for a family of four in Santa Clara County when you bought the home was $105,500. Median income increases by 16% over the eight years. Five years after buying your home, you remodel your kitchen. The Fair Market Value of your home is determined by appraisal, the cost of which is paid by you. The appraisal determines the Fair Market Value at $450,000. This amount includes the value of the kitchen improvements, at $3,000.

PRICE
INDEXED is less FAIR MARKET MAXIMUM RESTRICTED PRICE than VALUE then RESALE
$398,560 < $450,000 ⇒ $398,560
Since the Fair Market Value of the home is greater than the Indexed Price of the house, the Maximum Restricted Resale Price which you can receive from the sale of your home is $398,560.

E. TRANSFER IN VIOLATION OF RESALE RESTRICTION AGREEMENT; PAYMENT OF "EXCESS SALES PROCEEDS" TO CITY
If you sell or transfer your home in a way that violates the terms of the Resale Agreement, or if the City does not choose to purchase your home and you cannot find an eligible buyer, then you must pay to the City any "Excess Sales Proceeds" that result from the sale of your house. For example, if you do not sell your home to the City or to an eligible purchaser, but to someone else for market value, then you will owe the City any "Excess Sales Proceeds" that result from the sale.

The term "Excess Sales Proceeds" is defined in the Resale Agreement as the amount by which the gross sales proceeds you receive from the ineligible buyer exceed the Maximum Restricted Resale Price for the home. Another way to put it is the following:

Gross Amount of Money the New Buyer Paid for the House
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MINUS
Maximum Restricted Resale Price (from City Response Notice) EQUALS Payment to the City of Excess Sales Proceeds
The amount of Excess Sales Proceeds that you pay to the City is used by the City for other affordable housing programs to help other median and moderate income families purchase a home.

Example 3 shows how the Excess Sales Proceeds are calculated.

EXAMPLE 3 You sell your house at the end of eight years. You originally paid $341,000 for your home. The City Response Notice sets the Maximum Restricted Resale Price at $398,560. The City does not choose to purchase your own, and you are unable to find a buyer who qualifies as an eligible purchaser. You sell the house for $500,000. You must pay the City Excess Sales Proceeds as calculated below:

Total Amount Market
Purchaser Paid For House $ 500,000
MINUS
Maximum Restricted Resale Price (from
City Response Notice) - 398,500
Amount of Excess Sales
Proceeds You Pay to City $101,500
In cases where transfer of your home to another person is by means other than sale (with the exception of a creditor taking title), the amount of Excess Sales Proceeds is the difference between the original purchase price and the fair market value of the home at the time of transfer

VIOLATIONS OF BMR REQUIREMENTS
If you violate any provisions of the City documents, you are considered to be in default under the Resale Agreement. Also, if you default under any loan on the home, such as a mortgage or home equity loan, you would also be considered to be in default under the Resale Agreement. If you do not correct the violation, the City could require you to repay Excess Sales Proceeds and/or exercise its option and buy your home for the Maximum Restricted Resale Price. The City could also go to court and get a court order to enforce the provisions of the City documents, which may result in a foreclosure on your home.

The City may learn of violations of the Resale Agreement and program restrictions through periodic audits and other resources available to the City. The City may take all actions necessary to verify occupancy of the unit by the persons on the title to the unit. Any homeowner who violates the terms of the Resale Agreement may be forced to sell the unit to the City, who 688
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will normally then sell the unit to the next eligible purchaser on the waitlist. The City will require the owner to reimburse the City for any rent that was collected in excess of that allowed by the Resale Agreement.

Forced Sale due to Breach of Resale Agreement with Option to Purchase Owners who breach the requirements of the Resale Agreement are violating the City Council’s policy of providing homeownership opportunities to median and moderate income households. The number of people on the BMR waitlist often exceeds the number of BMR units available. Therefore, when the City confirms that an owner has breached the terms of the Resale Agreement, especially by not living in the BMR unit, the City may exercise its option and force the sale of the BMR unit.

Foreclosure
If a lender records a Notice of Default on a BMR unit, then a breach of the terms of the Resale Agreement has occurred. The City shall inform the owner of the action that needs to be taken to cure the default and by what date the default must be cured. If the owner is unable to cure the default, then the City again may exercise its option and force the sale of the BMR unit to preserve the unit as affordable housing.
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Signature Page
Please sign this Buyer's Disclosure Statement in the space provided below, keep a signed copy for your records, and return the original to the City at the following address:

City of Cupertino
Community Development Department
10300 Torre Avenue
Cupertino, CA 95104
I have received, read and understand the above Buyer's Disclosure Statement. I also understand the following:

1. The restrictions last for 99 years.

2. The home may be sold only to a median or moderate income family for 99 years.

3. The resale restrictions will usually reduce the property's sale price compared to the sales price of other homes. The sales price that I receive may be less than half the price of an unrestricted home.

4. Refinancing of the property and home equity loans are restricted.

5. I must contact the City of Cupertino before any sale or refinancing of the property and before receiving a home equity loan. Any sale or refinancing or home equity loan must be approved by the City.

6. I must live in the home. I cannot lease or rent it unless approved by the City for hardship.

7. The City has the right to buy my home at a restricted price when I decide to sell it or if I violate any of the provisions of the agreements I have signed.

By:

Signature of Buyer
Print Name of Buyer
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1 Exhibit 6- City of Cupertino Housing Mitigation Program

BMR RENTER OCCUPANCY CERTIFICATION
Property Name:

Property Owner:

Address of BMR Unit:

Head of Household Name:

Co-Head of Household Name(if applicable):

HOUSEHOLD MEMBERS - List below all persons who live in the unit.

Household Member Age Relationship to Head of Household
`
By signature below, I (print name) hereby certify to the City under penalty of perjury that I and all of the Household Members listed above occupy the rental unit located at (print
address) as my/our principal place of residence and that I/we have occupied the Premises for at least 10 months of the previous year. I further certify that there are no additional occupants residing in the unit.

Criminal and Administrative Actions for False Information You understand that knowingly supplying false, incomplete or inaccurate information may constitute a felony, punishable under Federal or State criminal law. Knowingly supplying false, incomplete or inaccurate information is grounds for termination of your lease.

Instructions to BMR Renter and Property Manager: Please complete this form and return, along with a copy of the updated lease agreement, to RISE Housing. 691
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2 City of Cupertino Housing Mitigation Program

BMR RENTER OCCUPANCY CERTIFICATION
Signature of Household Adults: Date:

1. 2.

3. 4.

TO BE COMPLETED BY THE PROPERTY OWNER OR MANAGER
By signature below, I (Print
Name) hereby certify to the City that, to the best of my knowledge, the persons identified above do indeed live at the address referenced above, and no additional persons live there.

Signature of Property Owner or Manager: Date:
(Company Name)
Return this completed form either by email, fax, or mail as follows:

Email: [email protected]
Phone: (415) 301-5448
Mail: Rise Housing – City of Cupertino 1990 N
California Blvd, Walnut Creek, CA 94596
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Exhibit 7- City of Cupertino Housing Mitigation Program Certification of Receipt of Policy and Procedures Manual for Administering Deed Restricted Affordable Housing Units- Rental Property Owner’s and/or Managing Agent
The undersigned received a copy of the Policy and Procedures Manual for Administering Deed Restricted Affordable Housing Units (BMR Manual) for the City of Cupertino’s Below Market Rate (BMR) Housing Mitigation Program. Further, the undersigned understand that the BMR Manual requires compliance with the requirements described in the Procedures.

Development Name:

Site Address:

Signature Signature
Printed Name Printed Name
Date Date
Signature
Printed Name
Date
Property Owner Co-Owner
Property Manager or Owner’s Managing Agent
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1 EXHIBIT 8-

BELOW MARKET RATE (BMR) ADDENDUM TO LEASE CONTRACT
Date of Lease Contract: Unit Number:

Address:

Resident(s) name(s)
This Below Market Rate Addendum (“BMR Addendum”) is made part of the Lease Contract (“Lease”) dated as of the Lease Date referenced above between the Resident(s) named above (all individuals identified above are individually and collectively referred to herein as “Resident”) and (“Owner”) for the real property located at the Address listed above in the Unit Number listed above (the “Premises”). This BMR Addendum is in addition to all terms and conditions contained in the Lease, and all attachments to the Lease, which shall remain the same and in full force and effect except as modified in this BMR Addendum. To the extent that the terms of this BMR Addendum conflict with those of the Lease, this Addendum shall control.

1. BMR Program. Resident understands and acknowledges that the Premises is operated in accordance with an Agreement Containing Covenants and Restrictions (Including Declaration of Resale Controls) (“Agreement”) between the Owner and the City of Cupertino (“City”). The Premises and the Lease are subject to various laws, rules, and regulations governing the affordable housing component of the Below Market Rate Rental Program (hereinafter referred to as the “BMR Program”). Resident understands and agrees that this BMR Addendum and/or the Lease may be amended at any time upon thirty (30) days’ notice as necessary to ensure compliance with all laws, rules, regulations, and agreements governing the BMR Program and/or the Premises.

2. BMR Program Eligibility. Resident understands and acknowledges that Resident’s eligibility to qualify for a unit under the BMR Program and occupy the Premises is based on, among other criteria, information provided by Resident to the City or its Designee, including information regarding Resident’s household income and assets and Resident’s household size. Prior to approving Resident for a BMR Unit, and not less frequently than annually thereafter, the City or its Designee must obtain a certification from Resident demonstrating that the household is an Extremely Low Income, Very Low Income or Low Income household, as such limits are defined by the Agreement and/or BMR Program Policies and Procedures Manual, and meets the specific eligibility and occupancy requirements established for the Premises.

3. Misstatements on Application or Certification Forms. Resident has completed an application and income certification and household composition forms in connection with securing the Lease. Resident represents that all information provided to Owner and the City or its Designee is true, complete and correct to the best of Resident’s knowledge. The City or its Designee has relied upon the statements set forth in those documents in deciding to rent the Premises to Resident and in determining Resident’s eligibility for the BMR Program. It is agreed that, should Owner or the City or its Designee subsequently discover any misstatements or omissions of fact in the Resident’s application or on any certification forms, any such misstatements or omissions shall be deemed a material and incurable breach of the Lease and shall entitle Owner to serve Resident with a notice terminating the tenancy.

4. Annual Recertification. Resident’s eligibility for housing under the BMR Program must be certified each year. Resident agrees to fully cooperate in the recertification process including timely providing to City or its Designee all necessary information regarding household income and household composition, as well as signing all necessary verifications, authorizations, and other forms relating to the recertification process. Failure to provide accurate and timely information required for recertification will constitute a material breach of the Lease and may lead to the termination of the tenancy.

5. Change in Occupants. Resident understands and agrees that additional occupants will be allowed and/or disallowed in accordance with income guidelines per the BMR Program Policies and Procedures Manual, Owner’s occupancy standards, and applicable laws. Before any change in occupancy occurs, Resident must receive written permission from the City or its Designee and Owner.

6. Disclosure of Information Provided. Resident understands information provided by Resident to Owner may be subject to inspection by the City, its Designee, or certain government agencies or their agents who may have oversight over the BMR Program and/or Owner. Resident hereby authorizes representatives of any of these entities to receive and review any information supplied by Resident to any of the others in connection with BMR Program eligibility, the Lease, or Resident’s tenancy.

7. Inspection of Premises and Conformity with BMR Program Manual. Resident hereby affirms the City’s authority to conduct, or have conducted by its Designee, reasonable inspections of the Premises and to take any actions otherwise necessary to conform to the BMR Program Policy and Procedures Manual. 694
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2 8. Termination. The Lease may only be terminated for one or more of the following reasons: (a) failure of Resident to qualify as eligible under the BMR Program due to misstatements or omissions of fact in the Resident’s application or any certification forms; (b) failure to provide any information required reasonably requested by the City or its Designee to establish or recertify Resident and Resident’s household as eligible under the BMR Program; or (c) for good cause, including violation of the terms and conditions of the Lease, violations of applicable federal, state, or local law, or other good cause.

9. Notice of Rent Increases. Rent may not be raised more often than once every twelve (12) months. Owner will provide Resident with at least sixty (60) days’ written notice of any increase in rent under the Lease.

10. Subleasing Prohibited. Resident understands and hereby agrees that subleasing of the Premises or any spaces reserved for the use of the Resident or Resident’s household is prohibited.

11. Maintenance or Repairs. Resident hereby agrees to inform Owner within twenty-four (24) hours of any need for maintenance or repair of the Premises or any spaces reserved for the exclusive use of the Resident or Resident’s household.

12. Security Deposit and Initial Term. Any security deposit required by the Lease shall not exceed an amount equal to two (2) months’ rent, based on the amount of monthly rent set forth for the initial Lease term, which shall be one year.

13. Nondiscrimination. Owner does not discriminate against persons on the basis of race, color, religion, sex (including pregnancy, childbirth, medical conditions related to pregnancy or childbirth, and gender), sexual orientation, marital status, national origin, ancestry, familial status, source of income, medical condition, physical condition, mental or physical disability, physical appearance unrelated to the responsibilities of a tenant, or perception of any of the foregoing.

14. No Third-Party Beneficiary. Resident is not a party to the Agreement between the Owner and the City nor is Resident entitled to claim any right or benefit under the Agreement, including the status of a third-party beneficiary under the Agreement. Nothing in the Agreement, express or implied, is intended to confer any rights or remedies, on any persons other than the parties to it and their respective and permitted successors and assigns.

15. Incorporation of Agreement. The Agreement is hereby incorporated into this Addendum and the Lease and made part thereof. Resident agrees to abide by the Agreement in all respects. Any failure to comply with the Agreement shall be deemed a breach of the Lease.
[Signatures on following page]
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[Signature Page to BMR Lease Addendum]
The undersigned certifies that he/she/they has read and understood the above-provisions of this BMR Addendum and agrees to abide by its terms.

RESIDENT:

Resident Signature
Print Resident Name Date
Resident Signature
Print Resident Name Date
Resident Signature
Print Resident Name Date
Resident Signature
Print Resident Name Date
Resident Signature
Print Resident Name Date
Resident Signature
Print Resident Name Date
OWNER OR OWNER’S REPRESENATATIVE (signing on behalf of owner):

Signature
Print Name Date
Title/Position
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1 Exhibit 9- City of Cupertino Below Market Rate Housing Program

CAPITAL IMPROVEMENT REQUEST FORM
From: (“Owner”)
Premises Address: (“Premises”)
Date:

Description of Improvements:

Estimated Cost: $ Original Purchase Price: $
A copy of the building permit (if required) is attached Proposed Improvements must cost at least Two Thousand Dollars ($2,000) and must be approved by the City in writing prior to construction. Please see Exhibit A (attached) for a list of Eligible Capital Improvements.

Owner should retain copies of contracts, invoices, and receipts for all completed capital improvements. These documents will be necessary to establish the Maximum Restricted Resale Price of the Premises upon subsequent transfer.

I hereby request City approval of the following capital improvements I intend to make to my Premises:

You may submit this information either by email, fax, or mail as follows:

Email: [email protected]
Phone: (415) 301-5448
Mail: Rise Housing – City of Cupertino 1990 N
California Blvd, Walnut Creek, CA 94596
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2 City of Cupertino Below Market Rate Housing Program
Attachment A

ELIGIBLE CAPITAL IMPROVEMENTS
• Remodels and room additions (including decks and porches) • New or upgraded landscaping, irrigation, sprinkler system • Hardscape such as pavement, block or retaining wall, patio • Fencing
• Storm windows, doors
• New roof
• Upgraded wiring, plumbing, duct work
• New furnace, water heater
• Built-in appliances
• New flooring or wall-to-wall carpeting
• Upgraded insulation
• Countertops
• Cabinets
• Solar Panels
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MINUTES

SPECIAL MEETING

CUPERTINO HOUSING COMMISSION
Thursday, December 19, 2024
At 5:35 p.m. Chair Connie Cunningham called the Special Housing Commission meeting to order at 10185 North Stelling Road, Quinlan Conference Room.

ROLL CALL

Present: Chair Connie Cunningham, Vice Chair Ryan Golze and Commissioners Angan Das, Yuyi He, and Govind Tatachari.

1. APPROVAL OF MINUTES
Subject: Approve the minutes of the October 24, 2024 Housing Commission meeting.

Recommended Action: Approve the minutes of the October 24, 2024 Housing Commission meeting.

Senior Housing Coordinator Nicky Vu introduced the item.

Chair Cunningham asked if anyone had questions about the minutes.

Commissioner Tatachari asked why future agenda items were not included in the minutes.

Senior Housing Coordinator Nicky Vu explained the missing items and introduced Administrative Assistant Lindsay Nelson.

Commissioners asked questions and discussed whether the future agenda items needed to be added to the minutes
MOTION: Golze moved and both Tatachari and He seconded to approve the minutes of the October 24, 2024 meeting.

The motion carried with the following vote: Ayes: Cunningham, Golze, He and Tatachari.

Noes: None. Abstain: None. Absent: Das.

POSTPONEMENTS - None
ORAL COMMUNICATIONS – None
WRITTEN COMMUNICATIONS- None
OLD BUSINESS– None
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Housing Commission Minutes December 19, 2025
NEW BUSINESS –

2. Subject: 2025 Housing Commission Meeting Schedule
Recommended Action: Establish the Housing Commission Meeting Schedule for 2025.

Senior Housing Coordinator Nicky Vu delivered the staff report.

Commissioners asked questions and made comments.

Commissioners determined that they would not like to change any of the dates on the schedule at this time.

Senior Housing Coordinator Nicky Vu requested a vote.

Commissioner Das arrived at the meeting.

MOTION: Golze moved and He seconded to establish the Commission Meeting Schedule for 2025. The motion carried with the following vote: Ayes: Cunningham, Das, Golze, He and Tatachari. Noes: None. Abstain: None. Absent: None.

3. Subject: 2025- 2030 Community Development Block Grant ( CDBG) Consolidated Plan Outreach Presentation Recommended Action: Conduct Public Hearing; and Receive a presentation on development of the 2025-2030 CDBG Consolidated Plan.

Chair Cunningham noted that the action was to receive the presentation, and that they would have further action in the spring to review and approve the items at that time.

Senior Housing Coordinator Nicky Vu introduced the presenter, consultant Heidi Aggler.

Heidi Aggler presented on the 2025-2029 Consolidated Plan.

Commissioners asked questions and made comments.

Senior Housing Coordinator Nicky Vu and consultant Heidi Aggler answered questions.

Chair Cunningham opened the floor for public comment and the following people spoke:

A representative with Northern California Carpenter Union.

Sujatha Venkatraman from West Valley Community Services Andy Leif from Charities Housing
Chair Cunningham closed the public comment period.

Chair Cunningham brought the conversation back to the commission and requested a motion, then asked the commission if they had comments.

MOTION: Golze moved and Das seconded to acknowledge receipt of the presentation. 700
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Housing Commission Minutes December 19, 2025
Commissioners asked more questions and made comments.

Commissioner Das asked Andy Leif, a member of the public, about how they were utilizing their funding.

Andy Leif spoke.

Senior Housing Coordinator Nicky Vu clarified that the plan would be covered in March when it is complete.

Chair Cunningham asked for a vote on the motion.

MOTION: Golze moved and Das seconded to acknowledge receipt of the presentation.

The motion carried with the following vote: Ayes: Cunningham, Das, Golze, He, and Tatachari. Noes:

None. Abstain: None. Absent: None.

4. Subject: Study session to amend the City’s Policy and Procedures Manual for Administering Deed Restricted Affordable Housing Units (BMR Admin Manual) and/ or draft new City ordinance to include a new anti-displacement policy. Recommended Action: Receive presentation and recommend approval of an anti-displacement policy for tenants residing in expiring Below Market Rate units to City Council for adoption.

Senior Housing Coordinator Nicky Vu introduced the item and requested the Commissioners state either: which of the policies they were in favor of, if they wanted to use alternatives, or if they wanted to make modifications to the policies as presented. He numbered the policies 1,2,3 and alternatives as ( 1B, 2B).

Commissioners discussed their options and asked clarifying questions.

Sujatha Venkatraman spoke with the Commissioners.

Commissioners further discussed items related to housing.

Senior Housing Coordinator Nicky Vu responded to questions.

Commissioners asked for clarification on the study session process.

Commissioners and Housing Manager Nicky Vu agreed to go around the table for votes.

Chair Cunningham voted for 1A or 1B.

Then changed her vote to option 3.

Commissioner Golze chose option 3.
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Housing Commission Minutes December 19, 2025
Commissioner He chose option 3.

Commissioner Tatachari chose option 3.

Commissioner Das chose option 1B and option 2B.

Senior Housing Coordinator Nicky Vu noted that a decision had been made, with the decision being in favor of both, with one in favor of 1B in terms of the anti-displacement policy.

Senior Housing Coordinator Nicky Vu suggested they take a vote on option 3.

MOTION: Golze moved and He seconded to recommend approval of Option 3, both of the displacement priority policies.

The motion carried with the following vote: Ayes: Cunningham, Das, Golze, He and Tatachari. Noes: None. Abstain: None. Absent: None.

STAFF AND COMMISSION REPORTS
Commissioner He mentioned her friend left his apartment in Mountain View and he got a lot of things deducted from his security deposit and it said “ non-negotiable”. She questioned the legality of this process, and suggested that tenants should have a right to negotiate and establish clarity with property managers regarding various aspects of security deposits.

FUTURE AGENDA SETTING
Commissioner He proposed continuing the discussion on security deposits.

ADJOURNMENT
At 7:35 p.m., Chair Connie Cunningham adjourned the Special Housing Commission Meeting.

Minutes prepared by:

Lindsay Nelson, Administrative Assistant
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Comments received from the Housing Resource Fair (4/21/2025) • Rental requirements should be protective without loopholes • I think both plans are great for the tenants especially with increases here • BMR waitlist priority point system is a good solution to displaced tenants • I think Santa Clara County’s poverty level is too high and I appreciate those fighting to stop the accelerated cost of living especially for long term residents • We support the BMR anti displacement policies that are proposed • I like the idea, this would be helpful
• Emiliano here, I think its awesome that you’re doing this because the cost of moving is so high
• How much do global politics play a role in the upsurge of rent in California? 704
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CITY OF CUPERTINO
Agenda Item
25-14047 Agenda Date: 6/17/2025
Agenda #: 16.

Subject: Consider the potential purchase of and appoint a negotiator for the potential purchase of 10480 Finch Avenue, owned by the Cupertino Unified School District, adjacent to Sedgwick Elementary School (postponed from July 3, 2025)
Appoint the Interim City Attorney and Acting City Manager to negotiate with the Superintendent of the Cupertino Unified School District or her designee regarding the possible purchase of 10480 Finch Avenue, Cupertino, CA 95014, Assessor’s Parcel Number 375-40-067, from Cupertino Unified School District on terms established by the City Council
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CITY COUNCIL STAFF REPORT
Meeting: June 17, 2025
Subject
Consider the potential purchase of and appoint a negotiator for the potential purchase of 10480 Finch Avenue, owned by the Cupertino Unified School District, adjacent to Sedgwick Elementary School.

Recommended Action
Appoint the Interim City Attorney and Acting City Manager to negotiate with the Superintendent of the Cupertino Unified School District or her designee regarding the possible purchase of 10480 Finch Avenue, Cupertino, CA 95014, Assessor’s Parcel Number 375-40-067, from Cupertino Unified School District on terms established by the City Council.

Background
10480 Finch Avenue (“Finch Property”) is an approximate 1.5-acre vacant parcel currently owned by the Cupertino Unified School District (“CUSD”). Adjacent to Sedgwick Elementary School, it is located in the southeastern portion of the City in the Rancho Rinconada district, bounded by Stevens Creek Blvd. to the north, Miller Avenue to the west, Bollinger Road to the south and Lawrence Expressway to the east.

In 2016, the CUSD Board authorized the purchase of the Finch Property for $5,386,750 in order to expand Sedgwick Elementary School. Due to the property’s prior use for agricultural purposes and the potential presence of pesticides, CUSD retained an environmental consultant to complete a Geologic and Environmental Hazards Report.

Testing by the consultant revealed pesticide residue, lead, and hydrocarbon deposits from an underground fuel tank. Under the oversight of the Department of Toxic Substances (“DTSC”), a Preliminary Environmental Assessment and a Supplemental Site Investigation were completed in September and November 2015. In 2019, DTSC issued a Removal Action Certification (Attachment F) for the property which certified the completion of the remedial work. Further investigation into the environmental condition of the site is advisable and an updated Phase 1 Environmental Report should be obtained during negotiations.
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Pertinent Environmental documents from CUSD are as follows:
i. Attachment A: Preliminary Environmental Assessment (September 2015) ii. Attachment B: Supplemental Site Investigation (November 2015) iii. Attachment C: School Cleanup Agreement with DTSC (June 2017) iv. Attachment D: Removal Action Workplan (January 2018) v. Attachment E: Hazardous Materials Management Report (June 2018) vi. Attachment F: Report Action Certification (May 2019) Additional documentation from DTCS can be found on their website here:
https://www.envirostor.dtsc.ca.gov/public/
Parkland Dedication in lieu Fee fund
Pursuant to Municipal Code section 13.08 and Government Code section 66477, permissible uses of the Parkland Dedication in lieu Funds (“Parkland Funds”) include acquisition of parkland or developing new parks and recreational facilities.

Currently, the City’s Parkland Fund has a balance of approximately $19.1 million (as shown on 118 of the FY23-24 ACFR), of which $5.9 M is allocated toward LawrenceMitty Park design and construction, leaving approximately $13.2 million currently not allocated. If the City Council intends to convert this parcel into a public park space, the available Parkland funds could be used towards the purchase and development of the property.

Next Steps
Should Council direct staff to proceed with exploring a purchase of the Finch Property, the following due diligence information will need to be prepared prior to a discussion in Closed Session:
i. Obtain an updated Title Report;
ii. Perform any required environmental analysis;
iii. Obtain a property appraisal.

The above are estimated to cost approximately $10,000 and to take approximately 6 to 10 weeks to complete.

Sustainability Impact
No sustainability impact.

Fiscal Impact
Appointment of negotiators will result in the use of staff time and expenses for time used by Aleshire & Wynder, LLP. Approximately $10,000 will be used from the City Manager’s contingency fund (100-14-123 719-705) to procure the necessary documentation to inform the purchasing discussions.
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City Work Program Item/Description
None
Council Goals
Quality of Life
California Environmental Quality Act
Not applicable at this time.
_____________________________________
Prepared by: Chad Mosley, Director of Public Works
Reviewed by: Floy Andrews, City Attorney
Approved for Submission by: Tina Kapoor, Acting City Manager Attachments:

A - Preliminary Environmental Assessment (September 2015) B - Supplemental Site Investigation (November 2015)
C - School Cleanup Agreement with DTSC (June 2017)
D - Removal Action Workplan (January 2018)
E - Hazardous Materials Management Report (June 2018)
F – Report Action Certification (May 2019)
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PRELIMINARY ENVIRONMENTAL ASSESSMENT

SEDGWICK ELEMENTARY SCHOOL

EXPANSION PROJECT
10480 FINCH AVENUE

CUPERTINO, SANTA CLARA COUNTY, CALIFORNIA
Prepared for:

CUPERTINO UNION SCHOOL DISTRICT
September 2015
Attachment A
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TABLE OF CONTENTS
Page
EXECUTIVE SUMMARY ............................................................................................ ES1

1.0 INTRODUCTION............................................................................................. 1-1

1.1 PURPOSE ........................................................................................... 1-1

1.2 OBJECTIVES ...................................................................................... 1-1

2.0 PROPERTY DESCRIPTION AND CONTACTS............................................... 2-1

2.1 SITE ADDRESS / ASSESSOR’S PARCEL NUMBER.......................... 2-1

2.2 DESIGNATED CONTACT PERSON AND MAILING ADDRESS.......... 2-1

2.3 PROPERTY USE................................................................................. 2-1

2.4 ENVIROSTOR DATABASE NUMBER ................................................. 2-1

2.5 TOWNSHIP, RANGE, AND SECTION................................................. 2-1

2.6 SITE MAPS.......................................................................................... 2-1

2.7 PHYSICAL SETTING........................................................................... 2-1

2.8 SURROUNDING PROPERTY LAND USE........................................... 2-2

3.0 BACKGROUND............................................................................................... 3-1

3.1 PREVIOUS ENVIRONMENTAL REPORTS......................................... 3-1

3.2 CHEMICALS OF POTENTIAL CONCERN........................................... 3-2

4.0 CONCEPTUAL SITE MODEL ......................................................................... 4-1

5.0 PEA ASSESSMENT........................................................................................ 5-1

5.1 SAMPLE LOCATIONS......................................................................... 5-1

5.1.1 Soil Sampling .......................................................................... 5-1

5.1.2 Soil Gas Sampling ................................................................... 5-3

5.1.3 Quality Assurance / Quality Control Samples ........................... 5-3

5.2 SAMPLE COLLECTION....................................................................... 5-3

5.2.1 Soil Sample Collection.............................................................. 5-3

5.2.2 Soil Gas Sample Collection ...................................................... 5-4

5.2.3 Decontamination Procedures ................................................... 5-5

5.3 SAMPLE ANALYSES .......................................................................... 5-5

5.3.1 Chain-of-Custody Records ....................................................... 5-6

5.4 FIELD VARIANCES............................................................................. 5-6

6.0 FINDINGS....................................................................................................... 6-1

6.1 SOIL SAMPLING RESULTS................................................................ 6-1

6.1.1 OCPs ...................................................................................... 6-1

6.1.2 Lead ........................................................................................ 6-1 711
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TABLE OF CONTENTS (CONTINUED)
Page

6.1.3 Arsenic .................................................................................... 6-2

6.1.4 PCBs ....................................................................................... 6-2

6.1.5 TPHg and BTEX ...................................................................... 6-2

6.2 SOIL GAS SAMPLING RESULTS ....................................................... 6-2

6.2.1 VOCs ...................................................................................... 6-2

6.3 QA/QC SAMPLES ............................................................................... 6-3

6.3.1 Duplicates ................................................................................ 6-3

6.3.2 Equipment Blank ...................................................................... 6-4

6.3.3 Field Blank ............................................................................... 6-4

6.3.4 Laboratory QA/QC.................................................................... 6-4

7.0 HUMAN HEALTH SCREENING EVALUATION............................................... 7-1

7.1 CHEMICALS OF POTENTIAL CONCERN........................................... 7-1

7.2 SOIL RISK ASSESSMENT.................................................................. 7-1

7.3 SOIL GAS RISK ASSESSMENT.......................................................... 7-2

8.0 ECOLOGICAL SCREENING........................................................................... 8-1

9.0 CONCLUSIONS AND RECOMMENDATIONS................................................ 9-1

10.0 REFERENCES................................................................................................ 10-1 TABLES
5-1 Field Sampling Schedule (Soil)........................................................................ 5-7 5-2 Field Sampling Schedule (Soil Gas) ................................................................ 5-9 5-3 Sample Collection Information......................................................................... 5-10 6-1 Soil Results for OCPs...................................................................................... 6-6 6-2 Soil Results for Arsenic and Lead.................................................................... 6-8 6-3 Soil Results for PCBs ...................................................................................... 6-11 6-4 Soil Results for TPHg and BTEX ..................................................................... 6-12 6-5 Soil Gas Results for VOCs .............................................................................. 6-13 7-1 Soil Exposure Screening Evaluation................................................................ 7-4 7-2 Soil Gas Exposure Screening Evaluation ........................................................ 7-5 712
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TABLE OF CONTENTS (CONTINUED)
Page
PLATES
Site Location ............................................................................................................... Plate 1-1 Site Plan ..................................................................................................................... Plate 1-2 Conceptual Site Model................................................................................................ Plate 4-1 Site Sampling Plan ........................................................................................................... Plate 5-1 Soil Vapor/Drill Hole Locations ......................................................................................... Plate 5-2 Soil Vapor Probe and Sample Schematic ........................................................................ Plate 5-3 Chlordane Results ..................................................................................................... Plate 6-1 Lead Results............................................................................................................... Plate 6-2 Arsenic Results........................................................................................................... Plate 6-3

APPENDICES
APPENDIX A: DTSC CORRESPONDENCE
APPENDIX B: QUALITY ASSURANCE PROJECT PLAN (QAPP)
APPENDIX C: DRILL HOLE LOGS
APPENDIX D: ANALYTICAL LABORATORY REPORTS AND CHAIN-OF-CUSTODYS APPENDIX E: RISK SPREADSHEETS
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EXECUTIVE SUMMARY
Padre Associates, Inc. (Padre), on behalf of the Cupertino Union School District (District), has prepared this Preliminary Environmental Assessment (PEA) report for the Sedgwick Elementary School Expansion Project located at 10480 Finch Avenue in Cupertino, Santa Clara County, California (Project Site).

The Project Site consists of 1.48 acres of residential use property, and is located adjacent to the northwest corner of the Sedgwick Elementary School property. According to Padre’s review of available historical aerial photographs, the Project Site was planted as an orchard from at least 1939 through the late 1950s. The existing residential building is present in a 1956 aerial photograph.

The Project Site is bordered to the north by Phil Lane, beyond which is residential property; to the east and south by Sedgwick Elementary School; to the west by residential property; and to the northwest by Finch Avenue, beyond which is residential property.

The PEA was conducted in accordance with the Padre document titled Preliminary Environmental Assessment Work Plan, Sedgwick Elementary School Expansion Project, 10480 Finch Avenue, Cupertino, Santa Clara County, California, dated May 2015. The PEA Work Plan was conditionally approved by the California Environmental Protection Agency (CalEPA) Department of Toxic Substances Control (DTSC) in a letter to District dated June 4, 2015. This PEA Report will be made available to the public for review and comment pursuant to Option A of the California Education Code (CEC) §17213.1.a (6)(A).

The purpose of the PEA was to establish whether a release or potential release of hazardous substances, which pose a threat to human health via ingestion, dermal contact, and inhalation exposure pathways, exists at the Project Site. Chemicals of potential concern (COPCs) identified at the Project Site included:
• Organochlorine pesticides (OCPs) and arsenic in soil from historic agricultural use; • Lead in soil from weathering of lead-based paint used on historic on-site building structures; and termiticides in soil from historic on-site building structures with wood components;
• Polychlorinated biphenyls (PCBs) in soil from the weathering of window caulking used in historic building structures; and
• Petroleum hydrocarbons and volatile organic compounds (VOCs) in soil and soil gas from a former 500-gallon gasoline underground storage tank (UST).

The results of the PEA screening level risk assessment estimated the total risk from COPCs identified in soils at the Project Site to be 3.2 x 10-5, which provides an increased cancer risk of greater than 1 in 1,000,000 (>10-6). The total health hazard from COPCs identified in soils at the Project Site is estimated to be 0.46, which does not provide an increased health 714
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hazard (i.e., >1). Therefore, a response action to reduce and/or eliminate the COPCs identified in surficial soils at the Project Site is recommended.

Lead concentrations ranged from 9.0 to 310 milligrams (mg/kg) in soil samples collected throughout the Project Site. Using DTSC’s lead risk assessment spreadsheet model (LeadSpread Version 8), exposure to the lead concentrations identified at the Project Site would result in a 90th percentile blood lead concentration of 8.0 micrograms per deciliter (µg/dl) in children, which exceeds the Office of Environmental Health Hazard Assessment (OEHHA) blood toxicity level of 1 µg/dl. Therefore, a response action to reduce or eliminate leadimpacted soil is recommended.

Arsenic concentrations ranged from 5.2 to 15 mg/kg in soil samples collected from across the Project Site. The arsenic data set consisted of four soil samples collected as part of the PEA, and 16 soil samples previously collected as part of a preliminary soil evaluation completed by others (Cornerstone, 2014). The four PEA soil samples were collected as stepout and step-down samples at the location of soil sample SS-6, which reported the highest Project Site arsenic concentration at 15 mg/kg. Arsenic concentrations reported for the PEA soil samples ranged from 5.7 to 13 mg/kg, indicating that arsenic concentrations in soil at this location do not present a potential “hotspot” for arsenic in soil. A statistical evaluation was performed by calculating the 95% Upper Confidence Limit (UCL) for the arsenic data set. The 95% UCL for arsenic in soil at the Project Site was calculated to be 10 mg/kg. A graphical evaluation completed by creating a normal probability plot of the arsenic data set. The shape of the plotted data presents a relatively normal distribution. Therefore, arsenic concentrations identified in surface soil at the Project Site are representative of ambient concentrations and further assessment and/or remedial action for arsenic in soil is not warranted.

Results of the soil gas assessment conducted at the Project Site identified low level concentrations of VOCs; however, none of the of the VOCs exceeded their respective human health screening levels. The results of the PEA screening level risk assessment for soil gas estimated the total risk to be 8.6 x 10-9, which does not provide an increased cancer risk of greater than 1 in 1,000,000 (>10-6). The cumulative hazard was estimated to be 0.0003, which does not provide a significant health hazard (>1). Therefore, further assessment and/or remediation regarding VOCs identified in soil gas at the Project Site is not warranted.

Due to elevated concentrations of OCPs and lead identified in surface soil around existing structures at the Project Site, Padre recommends a response action to reduce or eliminate the potential impact of these contaminants. The recommended remedial action is excavation, removal, and offsite disposal at an appropriate landfill. Prior to the response action, Padre recommends conducting a Supplemental Site Investigation (SSI) to further define chlordane and lead impacts around the structures.
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1.0 INTRODUCTION
This document presents the results of the Preliminary Environmental Assessment (PEA), which was completed by Padre Associates, Inc. (Padre) on behalf of the Cupertino Union School District (District), for the Sedgwick Elementary School Expansion Project located at 10480 Finch Avenue, Cupertino, Santa Clara County, California (Project Site). The Project Site is identified on Plate 1-1: Site Location and Plate 1-2: Site Plan.

The Project Site consists of 1.48 acres of residential property located adjacent to the northwest corner of the existing Sedgewick Elementary School. The expansion project will not result in an addition of classrooms or students to the existing elementary school. Public water and sewer will be provided to the Project Site by the San Jose Water Company and the Sunnyvale Sanitation District, respectively.

The PEA was conducted in accordance with the Padre document titled Preliminary Environmental Assessment Work Plan, Sedgwick Elementary School Expansion Project, 10480 Finch Avenue, Cupertino, Santa Clara County, California, dated May 2015. The PEA Work Plan was conditionally approved by the California Environmental Protection Agency (CalEPA) Department of Toxic Substances Control (DTSC) in a letter to District dated June 4, 2015. This PEA Report will be made available to the public for review and comment pursuant to Option A of the California Education Code (CEC) §17213.1.a(6)(A). A copy of the DTSC approval letter is included in Appendix A.

1.1 PURPOSE
California Department of Education statutes (Assembly Bill 387, Senate Bill 162 and Assembly Bill 2644) require the CalEPA/DTSC to review environmental assessments for proposed new school sites and/or new construction school expansion projects. The role of the DTSC is to ensure that selected properties do not contain hazardous substances that are a threat to public health and the environment.

1.2 OBJECTIVES
This PEA was conducted consistent with the DTSC guidance manual for evaluation of hazardous substance release sites titled Preliminary Endangerment Assessment Guidance Manual, State of California, Environmental Protection Agency, January 1994 (Interim Final – Revised October 2013). Pursuant to the Health and Safety Code §25355.5 (a) (1) (C), the activities performed were to fulfill the requirements of the Environmental Oversight Agreement (EOA) issued to the school district by CalEPA/DTSC.

The objectives of the PEA included:
• Evaluating historical information for indications of past use, storage, disposal, and/or release of hazardous substances at the Project Site;
• Establishing through a field sampling and laboratory analysis program, the nature, 716
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concentration, and general extent of hazardous substances that may be present in soil and/or groundwater at the Project Site; and
• Estimating the potential threat to public health and the environment presented by hazardous constituents identified at the property, and providing an indicator of relative risk using a residential land-use scenario.

Based on information developed during the course of the PEA and the conservative human and ecological risk evaluation using the DTSC’s PEA Guidance Manual (January 1994 (Interim Final – Revised October 2013), DTSC will then make an informed decision regarding potential risks posed by the Project Site.

Possible outcomes of the PEA decision include the issuance of a “No Further Action” finding if the risk level is found to be less than 1 in 1,000,000 (>10-6) which is DTSC’s “point of departure”, and the health hazard index is less than 1.0. Additional outcomes may include the need for further assessment through the Remedial Investigation/ Feasibility Study (RI/FS) process if the Project Site presents a risk and/or health hazard; the need to perform a Removal Action if localized impacts by hazardous substances release(s) are found; or the abandonment of the Project Site as a potential school site and the pursuit of alternative sites. 717
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2.0 PROPERTY DESCRIPTION AND CONTACTS

2.1 SITE ADDRESS / ASSESSOR’S PARCEL NUMBER
The Project Site consists of approximately 1.48 acres of residential property located at 10480 Finch Avenue in Cupertino, Santa Clara County, California. The County of Santa Clara identifies the Project Site as Assessor’s Parcel Number (APN): 375-40-067. A copy of the APN map was presented in the PEA Work Plan.

2.2 DESIGNATED CONTACT PERSON AND MAILING ADDRESS
Mary Ann Duggan, P.E., Director – Facility Modernization Cupertino Union School District
10301 Vista Drive,
Cupertino, CA 94014
Phone No. (408) 252-3000
[email protected]

2.3 PROPERTY USE
The Project Site consists of 1.48-acres of residential use property, and is located adjacent to the northwest corner of the Sedgwick Elementary School property. According to a review of available historical aerial photographs, the Project Site was planted as an orchard from at least 1939 through the late 1950s. The existing residential building is present in a 1956 aerial photograph.

2.4 ENVIROSTOR DATABASE NUMBER
The EnviroStor database number for the Project Site is 60002143.

2.5 TOWNSHIP, RANGE, AND SECTION
The Project Site is located in Section 19, Township 7 South, Range 1 West, of the Cupertino Quadrangle, California USGS 7½-Minute Series, Topographic Map (1991).

Approximate latitude and longitude of the central area of the property are identified to be:
• Latitude (North) 37° 18’ 56.5194” (37.3157)
• Longitude (West) -122° 0’ 35.2794” (-122.0098)

2.6 SITE MAPS
A Site Location Map is included as Plate 1-1, and a Site Plan is included as Plate 1-2.

2.7 PHYSICAL SETTING
Based on a review of the USGS 7.5-minute series topographic map Cupertino Quadrangle, California, 1991 (photorevised 1982), the Project Site lies at an approximate 720
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elevation of 205 feet above mean sea level (msl) near the center of the Project Site. The overall topographic gradient for the surrounding area is to the northeast. The Project Site is relatively flat with storm water runoff directed northerly towards storm drains located in the adjacent street.

Calabazas Creek is located approximately 1,600-feet northwest of the Project Site and flows in a northeasterly direction. Saratoga Creek is located approximately 0.75 miles west of the Project Site and flows in a northerly direction.

The Project Site is located within the Coast Ranges Geomorphic Province of California.

The Coast Ranges stretch approximately 600 miles from the Oregon border to the Santa Ynez River and fall into two sub-provinces: the ranges north of San Francisco Bay and those from the bay south to Santa Barbara County. The northern ranges lie east of the San Andreas Fault zone, whereas most of the southern ranges are to the west. The province contains many elongate ranges and narrow valleys that are approximately parallel to the coast, although the coast usually shows a somewhat more northerly trend than do the ridges and valleys.

Therefore, some valleys intersect the shore at acute angles and some mountains terminate abruptly at the sea. The northern Coast Ranges are higher than the southern where Solomon Peak located in Trinity County rises to an elevation of 7,581 feet, the highest point in the Coast Ranges (Norris and Webb, 1990).

According to the United States Department of Agriculture, National Resources Conservation Service, Web Soil Survey (http://websoilsurvey.nrcs.usda.gov/app/), two soil types are identified for the Project Site. Soils located within the southeast half of the Project Site consist of Urban Land-Stevens Creek Complex located on 0 to 2 percent slopes. Native soils consist of sandy loam, silt loam, and silty clay loam. Soils in the northwest half of the Project Site consist of Urban Land-Elpaloalto Complex located on 0 to 2 percent slopes. Native soils consist of clay loam and silty clay loam. Both of these soils are well drained and runoff is slow.

A review of the State Water Resources Control Board’s GeoTracker website (http://geotracker.waterboards.ca.gov), identified groundwater assessment activities that were conducted for a facility located approximately 0.56 miles northeast of the Project Site. Reportedly, the depth to first groundwater at the referenced site is greater than 80 feet bgs, and groundwater is inferred to flow in a northeast direction.

2.8 SURROUNDING PROPERTY LAND USE
The Project Site is bordered to the north by Phil Lane, beyond which is residential property; to the east and south by Sedgwick Elementary School; to the west by residential property; and to the northwest by Finch Avenue, beyond which is residential property. 721
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3.0 BACKGROUND

3.1 PREVIOUS ENVIRONMENTAL REPORTS
Padre reviewed the document titled Phase I Environmental Site Assessment and Preliminary Soil Quality Evaluation, 10480 Finch Avenue, Cupertino, California and dated July 1, 2014. A copy of the Phase I ESA has previously been provided to DTSC. The Phase I ESA was prepared by Cornerstone Earth Group (Cornerstone) on behalf of David J. Powers & Associates and, a copy was provided to DTSC. Below is a summary of the findings presented in the Phase I ESA:

The property is currently owned by F.A. Pestarino Jr. Trustee, and has been owned by the Pestarino family since the 1930s. The property historically contained a prune tree orchard.

According to a review of available historical aerial photographs, the Project Site was planted as an orchard from at least 1939 through the late 1950s. The existing residential building is present in a 1956 aerial photograph.

In addition to the residence, the Project Site contains a workshop (wood-framed with corrugate metal roof) located at the southeast corner of the Project Site. Located south and adjacent to the workshop are two, small, single-room dwellings that are wood-framed and situated on concrete blocks.

In 1996 a 500-gallon gasoline UST was removed from the Project Site. Reportedly, the UST had been empty for approximately 20 years prior to removal. Two soil samples were collected below the ends of the UST at depths of approximately 7-feet below grade surface (bgs). Total petroleum hydrocarbons identified as gasoline (TPHg) were identified in soil at concentrations up to 60 milligrams per kilogram (mg/kg). The Santa Clara Valley Water District (SCVWD) subsequently issued a case-closure letter for the UST dated March 26, 1997 stating that “Due to the low levels of hydrocarbons detected and the site location, Santa Clara Valley Water District staff believes that with time the residual pollution will naturally attenuate and does not require any further corrective action at this time.” Because recognized environmental conditions (RECs) were identified as part of the Phase I ESA, Cornerstone conducted preliminary soil assessment activities at the Project Site.

Based on the historic agricultural use (orchard) at the Project Site and the age/construction of the existing structures, a total of sixteen surface soil samples were collected throughout the Project Site and chemically analyzed for the presence of pesticides, arsenic, lead, and mercury.

Five of the soil samples were collected at the perimeter of the residence, and two soil samples were collected at the perimeter of the workshop. Below is summary of the analytical results:
• Chlordane was reported at a concentration of 2.8 mg/kg at the location of soil sample SS-5, which exceeds the U.S. EPA Region 9 Residential Screening Level (RSL, EPA June 2015) of 1.7 mg/kg. Soil sample SS-5 is located along the western side of the residence;
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• Arsenic was reported at concentrations ranging from 5.2 mg/kg to 15 mg/kg. The highest arsenic concentration was identified at the location of soil sample SS-6 located along the northwest property boundary; and
• Lead was reported at concentrations ranging from 9.0 mg/kg to 100 mg/kg, which exceeds the California Human Health Screening Level (CHHSL) of 80 mg/kg.

The highest lead concentration was identified at the location of soil sample SS-2 located along the western side of the workshop.

The soil assessment activities included the advancement of one drill hole using directpush drilling technology to an approximate depth of 20 feet at the location of the former UST.

Soil samples were collected from approximate depths of 8 feet and 12 feet, which were chemically analyzed for the presence of TPHg, benzene, toluene, ethylbenzene, total xylenes (BTEX) and methyl-tert butyl ether (MTBE). Reportedly, TPHg, BTEX, or MTBE concentrations were not identified in the soil sample collected from a depth of 8 feet below ground surface (bgs). However, TPHg, ethylbenzene, and total xylenes were identified at concentrations of 1,300 mg/kg, 27 mg/kg, and 180 mg/kg, respectively in the 12-foot soil sample.

3.2 CHEMICALS OF POTENTIAL CONCERN
The chemicals of potential concern (COPCs) identified at the Project Site was based on the results of a previous environmental investigation and historic property use. This information is summarized below:
• The Project Site had been used for agricultural purposes (orchard) from at least 1939 through the late 1950s. Based on preliminary soil data, further assessment for OCPs associated with historic agricultural use was not warranted. However, arsenic concentrations ranged from 5.2 to 15 mg/kg across the Project Site. Therefore, at the location of soil sample SS-6 (which contained the highest concentration of arsenic), the collection of step-out soil samples was performed;
• Based on preliminary soil data, chlordane was identified at a concentration of

2.8 mg/kg at the location of soil sample SS-5, which is located on the west side of the residence (constructed circa 1950s). Therefore, step-out soil sampling for OCPs was performed at the location of SS-5 and around the perimeter of the residence and outbuildings (workshop, single-room dwelling);
• Based on preliminary soil data, lead was identified at a concentration of 100 mg/kg at the location of soil sample SS-2, which is located on the west side of the workshop. Therefore, step-out soil sampling for lead at the location of SS-2 and around the perimeter of the residence and outbuildings was performed;
• In recent years, U.S. EPA has disovered that caulk containing PCBs was used in many buildings from the 1950s through the 1970s. The residential 723
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structure at the Project Site was constructed in the 1950s. Therefore, soil sampling for the presence of PCBs beneath large window panes at the residence was performed;
• No electrical transformers, either pad-mounted and/or pole-mounted, were identified on the Project Site. Therefore, the collection of soil samples to assess for the presence of PCBs related to electrical transformers was not performed;
• Based on the presence of a former gasoline UST and identified petroleum hydrocarbon contamination, soil vapor sampling for TPHg and VOCs was performed;
• According to the California Division of Mines and Geology, Geologic Map of San Francisco – San Jose Quadrangle California, (1:250,000), 1990 (Second Printing 2005) ultramafic outcrops are mapped approximately 7.5 miles east/south east of the Project Site, and approximately 7.5 miles south of the Project Site. Based on a review of U.S.G.S. topographic maps for the Project Site and surrounding areas (San Jose, Santa Clara), the main drainage from the ultramafic outcrops appear to be Coyote Creek, Alamitos Creek, and Los Gatos Creek which drain along the east side of the Santa Clara Valley. The Project Site is situated along the west side of the Santa Clara Valley within the drainage of Calabazas Creek. Therefore, the potential presence of naturally occurring asbestos (NOA) at the Project Site from weathering and deposition of ultramafic rock outcrops is considered low and soil sampling for NOA was not performed;
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4.0 CONCEPTUAL SITE MODEL
The conceptual site model is the tool used to identify the primary sources of COPCs identified at the Project Site, release mechanisms for the COPCs, points of exposure at the Project Site, and the exposure pathways (ingestion, inhalation, and dermal contact) for the screening level evaluation of chronic health risks. The objective of this PEA is to evaluate the Project Site for an unrestricted land use (residential) scenario.

There are several ways a receptor may be exposed to COPCs, ie. pesticides, metals.

Receptors can include humans, animals, vegetation, surface water, and/or groundwater.

Typical pathways for exposure to COPCs include:
• Physical transport via tracking chemicals of concern on people, clothing, and/or equipment; and
• Transport by airborne particulate matter.

For humans and animals, exposure usually occurs by the following exposure routes:
• Ingestion or inhalation of contaminated soil particles; • Dermal contact with contaminated soil particles.

The conceptual site model for the Project Site was developed based on the following assumptions:
• Exposure of students, staff, and site visitors to COPCs in soil via the ingestion, dermal contact, and inhalation routes is considered a complete exposure pathway;
• Exposure of students, staff, and site visitors to COPCs in airborne particulate matter via the inhalation route is considered a complete exposure pathway; • Exposure of students, staff, and site visitors to COPCs in soil vapor via the inhalation route is considered a complete exposure pathway; • The Project Site will be connected to municipal water. Therefore, exposure to groundwater beneath the Project Site is considered an incomplete exposure pathway;
• Surface water was not observed at the Project Site. Therefore, exposure to surface water at the Project Site is an incomplete exposure pathway; and • Ingestion of vegetation and animals is considered an incomplete exposure pathway because of the proposed use as an elementary school site.

A conceptual site model is presented on Plate 4-1.
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5.0 PEA ASSESSMENT
On July 9th and 10th, 2015 Padre completed the PEA soil and soil gas sampling activities at the Project Site in general accordance with the DTSC approved Final PEA Work Plan dated May 2015. At the time of the PEA sample collection activities, there were no unusual Project Site conditions.

The District provided notification to residents in the “immediate area” of the Project Site prior to the commencement of PEA field activities. The “immediate area” is defined as in line of sight of the Project Site. The notices were submitted on District letterhead and delivered via United States Postal Service a minimum of 5 days prior field activities. A copy of the draft notification letter was presented in the PEA Work Plan.

5.1 SAMPLE LOCATIONS
Soil samples collected around the perimeters of the buildings were located in the field using pin flags. The field sampling schedule is presented in Tables 5-1 and 5-2, and the sample collection information is presented in Table 5-3. Additionally, the sample collection locations are presented on Plates 5-1 and 5-2. Specific sample locations are described below.

5.1.1 Soil Sampling
The soil sample collection activities were implemented in general accordance with the guidelines of the following documents:
• California DTSC, PEA Guidance Manual, January 1994 (Interim Final – Revised October 2013);
• DTSC’s Interim Guidance, Evaluation of School Sites with Potential Soil Contamination as a Result of Lead from Lead-Based Paint, Organochlorine Pesticides from Termiticides, and Polychlorinated Biphenyls from Electrical Transformers, Revised June 9, 2006; and
• DTSC’s Interim Guidance for Sampling Agricultural Properties, Revised August 7, 2008.

Residence Structure. Additional soil samples were collected to further delineate the potential presence of pesticides in soil around the perimeter of the building structure and lead from weathering of lead-based paint. Soil samples were also collected beneath large window panes to identify the potential presence of PCBs from the weathering of caulking. • At the location of SS-5 soil samples were collected at approximate depths of 1.0 to 1.5 feet and 2.0 to 2.5 feet. The 1.0 to 1.5-foot soil sample was chemically analyzed for the presence of OCPs, and the 2.0 to 2.5-foot sample was placed on-hold with the analytical laboratory;
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• Around the perimeter of the residence, soil samples were collected from approximate depths of surface to 0.5 feet, 1.0 to 1.5 feet, and 2.0 to 2.5 feet bgs.

The surface and 1.0 to 1.5-foot samples were chemically analyzed for the presence of OCPs and lead, and the 2.0 to 2.5-foot soil samples were placed onhold with the analytical laboratory; and • Surface soil samples collected beneath window panes (P-4, -9, -10, -11, -14, and -15) were chemically analyzed for the potential presence of PCBs with the deeper soil samples placed on-hold.

Outbuildings. Soil samples were collected to further delineate the presence of lead and to potentially identify residual termiticides in soil along the east and south side of the outbuildings.
• At the location of SS-2, a soil sample was collected at an approximate depth of

1.0 to 1.5 feet and chemically analyzed for the presence of lead; • Along the west side of the outbuildings, step-out soil samples (5- and 10-foot centers) were collected at approximate depths of surface to 0.5 feet and 1.0 to

1.5 feet and chemically analyzed for the presence of lead. Soil sample P-22 was placed on-hold with the analytical laboratory pending the results of sample P-20; and
• Along the eastern and southern sides of the outbuildings, soil samples were collected at approximate depths of surface to 0.5 feet and 1.0 to 1.5 feet and chemically analyzed for OCPs and lead.

Arsenic soil samples. At the location of soil sample SS-6, discrete soil samples were collected from approximate depths of 1.0 to 1.5 feet and 2.0 to 2.5 feet to be chemically analyzed for the presence of arsenic. The 2.0 to 2.5-foot sample was placed on-hold with the analytical laboratory pending results of the 1.0 to 1.5-foot soil sample. Additionally, three stepout soil samples (AS-1, -2, and -3) were collected from approximate depths of surface to 0.5 feet, 1.0 to 1.5 feet, and 2.0 to 2.5 feet to be chemically analyzed for the presence of arsenic.

The deeper soil samples were placed on hold with the analytical laboratory pending results of the surface soil samples.

Former Gasoline UST. In the area of the former 500-gallon gasoline UST, five drill holes (DH-1 through DH-5) were advanced to approximate depths of 20 feet. Drill hole DH-1 was advanced to confirm and vertically define identified contamination at the location of drill hole EB1 (June 2014). Drill holes DH-2 through DH-5 were advanced to laterally define potential impacts. Soil samples were visually inspected and field screened using a hand-held photoionization detector (PID). Based on field screening and in consultation with the DTSC project manager, 2 to 3 soil samples per drill hole (12-, 15-, and 20-feet) were collected and chemically analyzed for the presence of TPHg, BTEX and MTBE. 728
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5.1.2 Soil Gas Sampling
The soil gas sample collection activities were implemented in general accordance with the guidelines of the following documents:
• California DTSC, PEA Guidance Manual, January 1994 (Interim Final – Revised October 2013); and
• CALEPA, DTSC, Advisory, Active Soil Gas Investigations, April 2012.

The soil gas investigation was directed at an identified area of contamination (EB-1).

Although soil gas samples were collected at the location of drill hole DH-1, there were no indications (visual, field screening) of contamination which was also observed by the DTSC project manager. Additionally, no indications of contamination at the locations of DH-2 through DH-5 were observed. Therefore, in consultation with the DTSC project manager, no additional soil gas samples were collected.

Soil gas samples were collected using the Drive Point Method. At the location of the former UST, a direct push drill rig was utilized to collect soil gas samples for chemical analyses.

Prior to collection of the soil gas samples, a continuous core drill hole was completed to visually inspect and document the soil types encountered. Temporary vapor wells were completed at approximate depths of 5- and 8-feet. A soil vapor probe was constructed within the drill hole using sand-pack and hydrated bentonite to seal the wells annular space. The vapor probe was completed with a gas-tight fitting well cap and sample port. Soil gas samples were collected in summa canisters and chemically analyzed for the presence of TPHg and VOCs. The soil vapor sample locations are presented on Plate 5-2, and the Field Sampling Schedule for soil gas is presented in Table 5-2. A schematic diagram of the well design and sampling train is presented as Plate 5-3.

5.1.3 Quality Analysis/Quality Control Samples
For quality assurance/quality control (QA/QC), approximately 10% of the soil samples were split by the analytical laboratory and chemically analyzed as duplicates for OCPs and lead.

Based on the quantity of soil gas samples collected, duplicate samples were not analyzed.

One equipment blank sample and one field blank sample per soil sampling event (water samples) were also collected and analyzed for the presence of arsenic and lead. The collection of these samples is discussed in more detail in the QAPP presented in Appendix B.

5.2 SAMPLE COLLECTION

5.2.1 Soil Sample Collection
Surface and shallow subsurface soil samples were collected using hand sampling tools including a hand pick and auger. Soil sampling equipment was decontaminated prior to use at each sample collection location and sampling event. Soil samples were collected in 2-inch x 6- 729
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inch stainless steel sleeves. Surface soil was loosened with a hand pick and placed into the sample sleeves. Soil cuttings were placed back in the hole after sample collection.

At select locations soil samples were collected using GeoprobeTM direct-push technology. The drill rod was hydraulically advanced to the desired depth and undisturbed soil samples were collected in 4 to 5-foot continuous core acetate liners. The soil cores were visually inspected and classified by a Padre geologist in accordance with the Unified Soil Classification System (USCS). Direct-push drill holes were backfilled with a tremmied neatcement grout to approximately 6-inches bgs and completed with native soil to surface. Copies of the drill hole logs are presented as Appendix C.

The soil samples were sealed, labeled, and preserved on ice in the field. After completion of soil sampling activities, the soil samples were transferred to a State-certified analytical laboratory under chain-of-custody protocol for chemical analyses. Field sampling methods conformed to guidelines set forth in the Health and Safety Plan included in Appendix E of the PEA Work Plan.

5.2.2 Soil Gas Sample Collection
Soil gas sampling activities were performed in general accordance with the DTSC Advisory- Active Soil Gas Investigations dated April 2012. Soil gas samples were collected from depths of approximately 5-feet and 8-feet using direct-push technology and the following procedure:
• Driving a 1-inch steel rod to the desired depth of the drill hole and then removing the rod;
• Placing a 2 to 3-inch layer of clean sand at the base of the drill hole; • Installing a new plastic vapor implant connected to ¼-inch new Teflon tubing at the top of the clean sand;
• Placing an additional 3-inches of clean sand into the drill hole to cover the vapor implant;
• Placing approximately 1-foot of dry bentonite above the sand pack; • Sealing the drill hole with bentonite hydrated in approximate 1-foot increments; and
• Labeling each drill hole with a unique sample id and depth.

After subsurface conditions had equilibrated (no less than two hours), a shut-in test was performed to check for leaks in the fittings. The shut-in test consisted of assembling the aboveground section of the sampling train (e.g. valve lines, fittings, flow controllers, and Summa canister downstream from the top of the probe), and evacuating the flow lines to a measured vacuum of about 100-inches of water; then shutting the valves at either end of the above ground section of the sampling train including the valve attached to the summa canister and observing the vacuum for a minimum of one minute. If there was any observable loss of vacuum, then the 730
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fittings were adjusted as needed until the vacuum in the aboveground section of the sample train does not noticeably dissipate. After the shut-in test was successful, a leak check was performed. The leak check consisted of applying the leak check compound (1,1-difluoroethane) inside a shroud covering the surface and bentonite seal and tubing. Additionally, the leak check compound was applied near connections along the sample train. The leak-check compound was included in the laboratory analyte list and the laboratory quantified and annotated all detections of the leak-check compound at the reporting limit of the target analytes. The shut-in test and leak check were conducted prior to collecting each soil gas sample.

After performing the shut-in test and leak check, three purge volumes of soil vapor were removed from the sample lines prior to collecting the soil gas sample in 1-liter summa canisters.

As discussed above, during sampling, a leak check compound is used to confirm that the sample train and probe rod is tight and leak free. After purging is complete, the valve at the top of the 1-liter summa was opened to collect the soil gas sample. The flow rate of vapor was monitored and maintained at less than 200-milliliters (mL) per minute using the flow control provided with the canisters. Additionally, during purging and sampling, a calibrated vacuum gauge was used to maintain a vacuum of less than 100-inches of water to minimize stripping and prevent ambient air from diluting the soil gas samples. As the pressure gauge reached just below 5-inches of mercury, the valve was closed and the pressure reading recorded. New tubing and canisters were used for each sample location. Sample canisters were pre-cleaned and supplied by the analytical laboratory.

5.2.3 Decontamination Procedures
All equipment that came into contact with potentially contaminated soil was decontaminated consistently so as to assure the quality of samples collected. Disposable equipment intended for one time use was not decontaminated, but was packaged for appropriate disposal. Decontamination occurred prior to and after each use of a piece of equipment. All sampling devices used were decontaminated using the following procedures:
• Non-phosphate detergent and tap water wash, in a 5-gallon plastic bucket, using a brush;
• Deionized/distilled water rinse, in a 5-gallon plastic bucket; and • Final deionized/distilled water rinse in a 5-gallon plastic bucket.

At the completion of sampling activities the small amount of wash water was dispersed to the ground surface.

5.3 SAMPLE ANALYSES
The sampling schedule is summarized in Tables 5-1 and 5-2. Analytical methods, types of containers, preservative, and holding times are summarized in Table 5-3. The laboratory analytical program consisted of chemical analyses of soil and soil gas samples collected from the Project Site for the presence of:
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Soil –
• OCPs by U.S. EPA Method 8081A;
• Arsenic by U.S. EPA Method 6020;
• Lead by U.S. EPA Method 6020;
• PCBs by U.S. EPA Method 8082;
• TPHg by U.S. EPA Method 8015M; and
• BTEX, MTBE by U.S. EPA Method 8260.

Soil Gas –
• TPHg, VOCs by U.S. EPA Method TO-15.

5.3.1 Chain-of-Custody Records
Chain-of-custody (COPC) records were used to document sample collection and shipment to the laboratory for analysis. A COPC record accompanied all samples delivered for analysis to McCampbell Analytical, Inc. located in Pittsburg, California. The COPC record identified the contents of each shipment and maintained the custodial integrity of the samples.

Generally, a sample is considered to be in someone’s custody if it is either in someone’s physical possession, in someone’s view, locked up, or kept in a secured area that is restricted to authorized personnel. Until receipt by the laboratory, the custody of the samples was the responsibility of the sample collector.

5.4 FIELD VARIANCES
At the request of the DTSC project manager, an additional soil sample (P-27) was collected along the eastern side of the outbuildings and chemically analyzed for the presence of OCPs and lead.

The PEA Workplan proposed that soil samples P-3, P-7, and P-12 were to be chemically analyzed for the presence of PCBs related to weathered window caulking. However, these samples were not located beneath large window panes and therefore not chemically analyzed for PCBs.

Due to low flow conditions (clay) encountered at 10 feet, a soil gas sample was collected at 8 feet (SV-1-8’). This was discussed with and approved by the DTSC project manager on July 9, 2015.
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Table 5-1. Soil Sampling Schedule
Test Method Sample Depth Number of Samples Sample Location Submittal Status Residence and Outbuildings OCPs
U.S. EPA Method 8081A
Surface to 0.5 feet 1.0 to 1.5 feet
18 (discrete) 17 (discrete)
P-1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 16 25, 26, 27 Dupe ~10% of samples P-1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 25, 26, 27 Dupe ~10% of samples Analyze Analyze
Arsenic
U.S. EPA Method 6020
Surface to 0.5 feet 1.0 to 1.5 feet
3 (discrete) 1 (discrete)
AS-1, 2, and 3 SS-6A
Analyze Analyze
Lead
U.S. EPA Method 6020
Surface to 0.5 feet 1.0 to 1.5 feet
15 (discrete) 15 (discrete)
P-7, 10, 11, 13, 14, 15, 17, 18, 19, 20, 21, 23, 24, 25, 26, 27, 28 Dupe ~10% of samples P-7, 10, 11, 13, 17, 18, 19, 20, 21, 23, 24, 25, 26, 27, 28 Dupe ~10% of samples Analyze Analyze
PCBs
U.S. EPA Method 8082
Surface to 0.5 feet 1.0 to 1.5 feet
7 (discrete) 7 (discrete)
P-4, 9, 10, 11, 14, and 15 P-4, 9, 10, 11, 14, and 15
Analyze Hold
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Table 5-1. Soil Sampling Schedule (continued)
Test Method Sample Depth Number of Samples Sample Location Submittal Status Former Gasoline UST TPHg
U.S. EPA Method 8015m
12 feet 15 feet 20 feet
1 (discrete) 5 (discrete) 5 (discrete)
DH-1 DH-1, 2, 3, 4 and 5 DH-1, 2, 3, 4 and 5
Analyze Analyze Analyze

BTEX, MTBE
U.S. EPA Method 8260
12 feet 15 feet 20 feet
1 (discrete) 5 (discrete) 5 (discrete)
DH-1 DH-1, 2, 3, 4 and 5 DH-1, 2, 3, 4 and 5
Analyze Analyze Analyze
Notes: OCPs – Organochlorine Pesticides PCBs – Polychlorinated Biphenyls TPHg – Total Petroleum Hydrocarbons - Gasoline BTEX – Benzene, toluene, ethylbenzene, xylenes MTBE – Methyl tert butyl ether 734
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Table 5-2. Soil Gas Sampling Schedule
Sample Matrix and
Test
Method
Sample Depth Number of
Samples*
Sample
Location
Submittal
Status
Soil Gas
TPHg
U.S. EPA Method
TO-15
5-feet
8-feet
1 1
SV-1
SV-1
Analyze
Analyze
VOCs
U.S. EPA Method
TO-15
5-feet
8-feet
1 1
SV-1
SV-1
Analyze
Analyze
Notes:

TPHs – Total Petroleum Hydrocarbons
VOCs – Volatile Organic Compounds
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Table 5-3. Sample Collection Information
Sample Matrix and Test Method Container Preservative
Holding Time
From Sample
Collection to
Extraction
Soil
OCPs
U.S. EPA Method 8081A
2 inch x 6 inch stainless steel sample
sleeves and plastic end caps Ice 14 days
Lead
U.S. EPA Method 6010
2 inch x 6 inch stainless steel sample
sleeves and plastic end caps Ice 180 days
Arsenic
U.S. EPA Method 6020
2 inch x 6 inch stainless steel sample
sleeves and plastic end caps Ice 180 days
PCBs
U.S. EPA Method 8082
2 inch x 6 inch stainless steel sample
sleeves and plastic end caps Ice 14 days
TPHg
U.S. EPA Method 8015m 25 gram EncoreTM Container Ice 48 hrs

BTEX, MTBE
U.S. EPA Method 8260 25 gram EncoreTM Container Ice 48 hrs Soil Gas
TPHg
U.S. EPA Method TO-15 Summa Canister (1 Liter) Keep out of sun /heat 30 days
VOCs
U.S. EPA Method TO-15 Summa Canister (1 Liter) Keep out of sun /heat 30 days
QA/QC Samples (water)
Arsenic and Lead
U.S. EPA Method 200.8 250 mL poly bottle HNO3 / Ice 180 days Notes:

OCPs – Organochlorine Pesticides
PCBs – Polychlorinated Biphenyls
VOCs – Volatile Organic Compounds
TPHg – Total Petroleum Hydrocarbons- Gasoline
HNO3 – Nitric Acid
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6.0 FINDINGS
The following sections describe the results of the field sampling activities performed by Padre at the Project Site on July 9th and 10th, 2015. The laboratory analytical results are summarized in Table 6-1 through Table 6-6. Certified analytical laboratory reports and chainof-custody documentation are provided in Appendix D.

6.1 SOIL SAMPLING RESULTS
The following subsections describe soil sample analytical results, locations, and depth intervals for soil samples collected at the Project Site.

6.1.1 OCPs
A total of thirty-five discrete surface and subsurface soil samples were collected near the perimeters of the existing building structures and chemically analyzed for the presence of OCPs by U.S. EPA Method 8081A. Results of the laboratory analyses are presented in Table 6-1 with the chlordane results shown on Plate 6-1. Additionally the results are summarized below:
• Chlordane-technical (chlordane) was reported at concentrations ranging from <25 to 13,000 micrograms per kilogram (µg/kg);
• DDD was reported at concentrations ranging from <1.0 to 9.3 µg/kg; • DDE was reported at concentrations ranging from <1.0 to 410 µg/kg; • DDT was reported at concentrations ranging from <1.0 to 260 µg/kg; • Dieldrin was reported at concentrations ranging from <1.0 to 6.8J µg/kg; • g-BHC (lindane) was reported at concentrations ranging from <1.0 to 0.49J µg/kg; • Heptachlor was reported at concentrations ranging from <1.0 to 21 µg/kg; and • Heptachlor epoxide was reported at concentrations ranging from <1.0 to 57 µg/kg.

6.1.2 Lead
A total of thirty discrete surface and subsurface soil samples were collected near the perimeters of the existing building structures and chemically analyzed for the presence of lead by U.S. EPA Method 6020. Results of the laboratory analyses are presented in Table 6-2 and shown on Plate 6-2. Additionally the results are summarized below:
• Lead was reported at concentrations ranging from 9.0 to 310 mg/kg. 740
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6.1.3 Arsenic
A total of three discrete surface soil samples and one subsurface soil sample were collected near the northwest corner of Project Site and chemically analyzed for the presence of arsenic by U.S. EPA Method 6020. Results of the laboratory analyses are presented in Table 6-2 and shown on Plate 6-3. Additionally the results are summarized below:
• Arsenic was reported at concentrations ranging from 5.7 to 13 mg/kg.

6.1.4 PCBs
Six discrete surface soil samples were collected from areas below window panes at the residential building and chemically analyzed for the presence of PCBs by U.S. EPA Method 8082. Results of the laboratory analyses are presented in Table 6-3 and summarized below:
• Total PCBs (Aroclors) were not reported at concentrations at or above the reporting limit of 0.05 mg/kg.

6.1.5 TPHg and BTEX
Eleven discrete subsurface soil samples were collected from five locations in the area of the former UST and chemically analyzed for the presence of TPHg and BTEX by U.S. EPA Methods 8215M and 8260, respectively. Results of the laboratory analyses are presented in Table 6-4 and summarized below:
• TPH-g was reported at concentrations ranging from less than 0.081 mg/kg to 0.18 mg/kg;
• Total xylenes were reported at concentrations ranging from less than 0.0032 mg/kg to 0.026 mg/kg; and
• Benzene, toluene and ethylbenzene were not reported at concentrations exceeding their respective analytical reporting limits.

6.2 SOIL GAS SAMPLING RESULTS
The following subsection describes soil gas analytical results, depths, and locations of drill holes advanced at the Project Site.

6.2.1 VOCs
Soil gas samples were collected at approximate depths of 5-feet and 8-feet and chemically analyzed for the presence of VOCs by U.S. EPA Method TO-15. Results of the laboratory analyses are presented in Table 6-5, and are summarized below:
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• TPH-g was not reported above the reporting limit of 720 micrograms per cubic meter (µg/m3
);
• Benzene was reported at concentrations ranging from less than 1.6 to 2.8 µg/m3 ;
• Toluene was reported at concentrations ranging from 5.6 to 11 µg/m3 ;
• Ethylbenzene was reported at concentrations ranging from 2.9 to 3.4 µg/m3 ;
• Total xylenes (m,p-xylene, o-xylene) was reported at concentrations ranging from less than 6.6 to 12 µg/m3; and
• 2-Hexanone was reported at concentrations ranging from less than 2.1 to 5.6 µg/m3 .

6.3 QA/QC SAMPLES

6.3.1 Duplicates
The laboratory split soil samples selected by Padre that were chemically analyzed as duplicates for OCPs. The results are summarized below:
• Soil samples P-1 (SURF) and P-1 (SURF) DUPE detected comparable concentrations of chlordane (technical), DDE, DDT, and heptachlor epoxide; • Soil samples P-9 (SURF) and P-9 (SURF) DUPE detected comparable concentrations of chlordane (technical), DDE, DDT, and heptachlor epoxide; • Soil sample P-10 (1-1.5’) and P-10 (1-1.5’) DUPE detected comparable concentrations of chlordane (technical), DDE, DDT, and heptachlor epoxide; and • Soil samples P-15 (1-1.5’) and P-15 (1-1.5’) DUPE detected comparable concentrations of DDD, DDE, DDT, and heptachlor epoxide.

The laboratory split soil samples selected by Padre that were chemically analyzed as duplicates for lead. The results are summarized below:
• Soil samples P-17 (SURF) and P-17 (SURF) DUPE reported identical concentrations of lead;
• Soil samples P-27 (SURF) and P-27 (SURF) DUPE reported comparable concentrations of lead;
• Soil samples P-19 (1-1.5’) and P-19 (1-1.5’) DUPE reported comparable concentrations of lead; and
• Soil samples P-24 (1-1.5’) and P-24 (1-1.5’) DUPE reported comparable concentrations of lead.

The reported concentrations for OCPs and lead in selected soil samples and the 742
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corresponding duplicate soil samples are comparable in concentration. Therefore, the data is considered to be valid.

6.3.2 Equipment Blank
For each sampling event, distilled water was used as rinseate for decontaminating soil sampling equipment. The equipment blank samples were collected by pouring rinseate water over and through recently cleaned equipment, and collected directly into the appropriate sample container.

Two equipment blank samples were collected and chemically analyzed for arsenic and lead by U.S. EPA Method 200.8. The results of the laboratory analysis are summarized below:
• The laboratory analyses did not identify arsenic at or above the analytical reporting limit. The reporting limit for arsenic was 0.5 micrograms per liter (µg/L); and • The laboratory analyses did not identify lead at or above the analytical reporting limit.

The reporting limit for lead was 0.5 µg/L.

6.3.3 Field Blank
For each sampling event, distilled water was used as rinseate for decontaminating sampling equipment. The field blank samples were collected by pouring rinseate water into the appropriate sample container.

Three field blank samples were collected and chemically analyzed for arsenic and lead by U.S. EPA Method 200.8. The results of the laboratory analysis are summarized below:
• The laboratory analyses did not identify arsenic at or above the analytical reporting limit. The reporting limit for arsenic was 0.5 µg/L; and • The laboratory analyses did not identify lead at or above the analytical reporting limit.

The reporting limit for lead was 0.5 µg/L.

6.3.4 Laboratory QA/QC
A cover letter with the signature of the laboratory manager accompanies every laboratory report received for this project. According to the laboratory manager results reported conform to the most current NELAP standards, where applicable, unless otherwise stated in the case narrative.

Work Order 1507320
The laboratory reported the following notes regarding TPH-g, BTEX, and MTBE in soil by U.S. EPA Method SW8260B:
• The reporting limits for all samples were near, but not identical to, the lab’s standard 743
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reporting limit due to the variable encore/solid sample weight; • The surrogate recovery for soil sample DH-1 (15’) was outside of the control limits due to matrix interference;
• The surrogate recovery for soil sample DH-2 (15’) was outside of the control limits due to matrix interference; and
• The spike recovery for sample DH-2 (15’) was outside of the accepted recovery limits.

Work Order 1507327
The laboratory reported the following notes regarding OCPs in soil by U.S. EPA Methods SW8081A/SW8082:
• MS/MSD recovery and/or RPD for lead was out of acceptance criteria but the LCS validated the prep batch;
• DDD was detected above the minimum detection limit and below the practical laboratory reporting limit in soil samples P-5 (SURF), P-9 (1-1.5’), P-12 (1-1.5’), P-14 (1-1.5’), and P-25 (SURF). Therefore, these concentrations are estimated; • DDE was detected above the minimum detection limit and below the practical laboratory reporting limit in soil samples P-2 (1-1.5’) and P-5 (1-1.5’). Therefore, these concentrations are estimated;
• Dieldrin was detected above the minimum detection limit and below the practical laboratory reporting limit in soil samples P-11 (1-1.5’) and P-25 (SURF). Therefore, this concentration is estimated;
• g-BHC was detected above the minimum detection limit and below the practical laboratory reporting limit in the soil sample P-15 (SURF). Therefore, this concentration is estimated;
• Heptachlor was detected above the minimum detection limit and below the practical laboratory reporting limit in soil sample P-14 (SURF). Therefore, this concentration is estimated; and
• Heptachlor epoxide was detected above the minimum detection limit and below the practical laboratory reporting limit in soil samples P-3 (SURF), P-14 (SURF), P-9 (SURF) DUP, P-1 (1-1.5’), P-4 (1-1.5’), P-6 (SURF), P-6 (1-1.5’). Therefore, these concentrations are estimated.
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Table 6-1 - Soil Results for OCPs
(results in µg/kg)
Sample
Identification
Aldrin
(a,b,d)-BHC
Gamma-BHC
Chlordanetechnical
DDD
DDE
DDT
Dieldrin
Endosulfan I
Endosulfan II
Endosulfan
Sulfate
Endrin
Endrin
Aldehyde
Endrin Ketone
Heptachlor
Heptachlor
Epoxide
Methoxychlor
Hexachloro
benzene
Hexachloro
cyclopentadiene
Toxaphene
P-1 (SURF) <10 <10 <10 3,700 <10 350 260 <10 <10 <10 <10 <10 <10 <10 <10 23 <10 <100 <200 <500 P-1 (SURF)DUPE <20 <20 <20 2,800 <20 290 210 <20 <20 <20 <20 <20 <20 <20 <20 31 <20 <200 <400 <1,000 P-1 (1-1.5’) <1.0 <1.0 <1.0 87 <1.0 9.5 5.9 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 0.86 J <1.0 <10 <20 <50 P-2 (SURF) <1.0 <1.0 <1.0 120 <1.0 77 44 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 4.8 <1.0 <10 <20 <50 P-2 (1-1.5’) <1.0 <1.0 <1.0 <25 <1.0 0.46 J <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-3 (SURF) <10 <10 <10 1,200 <10 56 46 <10 <10 <10 <10 <10 <10 <10 <10 4.0 J <10 <100 <200 <500 P-3 (1-1.5’) <1.0 <1.0 <1.0 220 <1.0 6.5 8.2 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-4 (SURF) <1.0 <1.0 <1.0 2,900 <1.0 140 130 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 7.4 <1.0 <10 <20 <50 P-4 (1-1.5’) <10 <10 <10 1,100 <10 44 38 <10 <10 <10 <10 <10 <10 <10 <10 7.8 J <10 <100 <200 <500 P-5 (SURF) <1.0 <1.0 <1.0 63 0.76 J 24 24 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 1.6 <1.0 <10 <20 <50 P-5 (1-1.5’) <1.0 <1.0 <1.0 <25 <1.0 0.93 J 1.1 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-6 (SURF) <10 <10 <10 3,400 <10 120 210 <10 <10 <10 <10 <10 <10 <10 <10 6.0 J <10 <100 <200 <500 P-6 (1-1.5’) <1.0 <1.0 <1.0 <25 <1.0 0.94 J 0.73 J <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-7 (SURF) <10 <10 <10 1,900 <10 120 110 <10 <10 <10 <10 <10 <10 <10 <10 26 <10 <100 <200 <500 P-7 (1-1.5’) <1.0 <1.0 <1.0 <25 <1.0 1.4 1.1 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-8 (SURF) <1.0 <1.0 <1.0 57 <1.0 14 11 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 3.3 <1.0 <10 <20 <50 P-8 (1-1.5’) <1.0 <1.0 <1.0 <25 1.1 3.9 3.4 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-9 (SURF) <1.0 <1.0 <1.0 2,100 <1.0 53 120 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 13 <1.0 <10 <20 <50 P-9 (SURF) DUPE <10 <10 <10 1,800 <10 47 120 <10 <10 <10 <10 <10 <10 <10 <10 8.3 J <10 <100 <200 <500 P-9 (1-1.5’) <1.0 <1.0 <1.0 38 0.35 J 3.9 12 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-10 (SURF) <1.0 <1.0 <1.0 13,000 <1.0 39 160 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 21 57 <1.0 <10 <20 <50 P-10 (1-1.5’) <1.0 <1.0 <1.0 40 <1.0 1.4 4.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-10 (1-1.5’) DUPE <1.0 <1.0 <1.0 38 <1.0 1.9 4.8 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 1.0 <1.0 <10 <20 <50 P-11 (SURF) <1.0 <1.0 <1.0 930 <1.0 35 93 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 4.0 <1.0 <10 <20 <50 P-11 (1-1.5’) <1.0 <1.0 <1.0 95 <1.0 12 24 0.53 J <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 1.8 <1.0 <10 <20 <50 P-12 (SURF) <1.0 <1.0 <1.0 110 <1.0 12 18 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 1.2 <1.0 <10 <20 <50 P-12 (1-1.5’) <1.0 <1.0 <1.0 <25 0.41 J 2.7 6.3 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-14 (SURF) <1.0 <1.0 <1.0 60 2.2 97 61 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 0.25 J 0.71 J <1.0 <10 <20 <50 P-14 (1-1.5’) <1.0 <1.0 <1.0 <25 0.47 J 14 9.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-15 (SURF) <1.0 <1.0 0.49 J 1,500 <1.0 410 160 6.8 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 11 <1.0 <10 <20 <50 P-15 (1-1.5’) <1.0 <1.0 <1.0 <25 9.3 50 36 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 1.4 <1.0 <10 <20 <50 HHRA NOTE #3 430
RSLs 39 -- 570 1,700 2,300 2,000 1,900 34 -- -- -- -- -- -- 130 70 -- 210 -- 490 745
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Table 6-1 - Soil Results for OCPs (cont’)
(results in µg/kg)
Sample
Identification
Aldrin
(a,b,d)-BHC
Gamma-BHC
Chlordanetechnical
DDD
DDE
DDT
Dieldrin
Endosulfan I
Endosulfan II
Endosulfan
Sulfate
Endrin
Endrin
Aldehyde
Endrin Ketone
Heptachlor
Heptachlor
Epoxide
Methoxychlor
Hexachloro
benzene
Hexachloro
cyclopentadiene
Toxaphene
P-15 (1-1.5’) DUPE <1.0 <1.0 <1.0 <25 8.9 50 31 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 1.5 <1.0 <10 <20 <50 P-16 (SURF) <1.0 <1.0 <1.0 170 3.3 4.5 18 2.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 1.3 <1.0 <10 <20 <50 P-25 (SURF) <1.0 <1.0 <1.0 <25 0.49 J 62 25 0.43 J <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-25 (1-1.5’) <1.0 <1.0 <1.0 <25 <1.0 2.6 2.7 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-26 (SURF) <1.0 <1.0 <1.0 <25 <1.0 43 23 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-26 (1-1.5’) <1.0 <1.0 <1.0 <25 <1.0 3.1 1.8 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-27 (SURF) <1.0 <1.0 <1.0 <25 2.8 150 62 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 P-27 (1-1.5’) <1.0 <1.0 <1.0 <25 <1.0 1.3 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <10 <20 <50 Soil Samples (Cornerstone, June 2014) SS-1* <9.9 <9.9 <9.9 <200 21 320 87 <9.9 <9.9 9.9 <9.9 <9.9 <9.9 <9.9 <9.9 <9.9 <9.9 -- -- <200 SS-2* <2.0 <2.0 <2.0 <40 26 280 33 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 -- -- <40 SS-3* <2.0 <2.0 <2.0 <39 26 280 33 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 -- -- <39 SS-4* <2.0 <2.0 <2.0 180 31 230 26 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 -- -- <39 SS-5* <20 400 280 2,800 26 360 91 <20 <20 <20 <20 <20 <20 <20 <20 <20 <20 -- -- <400 SS-6* <2.0 86 50 520 28 55 26 8.7 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 12 <2.0 -- -- <40 SS-7* <2.0 5.9 3.7 <40 29 240 26 2.9 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 -- -- <40 SS-8* <2.0 <2.0 <2.0 <40 21 120 14 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 -- -- <40 SS-9* <2.0 7.0 5.5 67 48 260 29 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 -- -- <40 SS-10* <2.0 <2.0 <2.0 <40 31 220 16 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 -- -- <40 SS-11* <2.0 3.2 3.5 <39 32 180 21 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 -- -- <39 SS-12* <9.7 25 31 240 17 150 60 <9.7 <9.7 <9.7 <9.7 <9.7 <9.7 <9.7 <9.7 <9.7 <9.7 -- -- <190 SS-13* <2.0 15 12 110 21 42 14 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 -- -- <40 SS-14* <9.8 <9.8 <9.8 <200 28 410 88 <9.8 <9.8 <9.8 <9.8 <9.8 <9.8 <9.8 <9.8 <9.8 <9.8 -- -- <200 SS-15* <2.0 3.5 3.9 <40 47 190 26 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 <2.0 -- -- <40 SS-16* <1.9 <1.9 <1.9 <39 <1.9 8.8 <1.9 <1.9 <1.9 <1.9 <1.9 <1.9 <1.9 <1.9 <1.9 <1.9 <1.9 -- -- <39 HHRA NOTE #3 430
RSLs 39 -- 570 1,700 2,300 2,000 1,900 34 -- -- -- -- -- -- 130 70 -- 210 -- 490 Notes:
µg/kg – micrograms per kilogram
* Surface soil sample (Cornerstone, June 2014)
-- Not reported HHRA – Human Health Risk Assessment Note #3, Table 1 (May 2015).

RSL – U.S. EPA Regional Screening Levels (June, 2015)
3,700 – above RSLs
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Table 6-2 - Soil Results for Arsenic and Lead
(results in mg/kg)
Sample
Identification Arsenic Lead
U.S. EPA Method 6020 6020
SS-6A (1-1.5’) 11 --
AS-1 (SURF) 13 --
AS-2 (SURF) 7.2 --
AS-3 (SURF) 5.7 --
P-7 (SURF) -- 39
P-7 (1-1.5’) -- 79
P-10 (SURF) -- 29
P-10 (1-1.5’) -- 9.3
P-11 (SURF) -- 24
P-11 (1-1.5’) -- 13
P-13 (SURF) -- 92
P-13 (1-1.5’) -- 17
P-14 (SURF) -- 36
P-15 (SURF) -- 220
P-17 (SURF) -- 310
P-17 (SURF) DUP -- 310
P-17 (1-1.5’) -- 43
P-18 (SURF) -- 93
P-18 (1-1.5’) -- 17
P-19 (SURF) -- 180
P-19 (1-1.5’) -- 31
P-19 (1-1.5’) DUPE -- 27
P-20 (SURF) -- 35
P-20 (1-1.5’) -- 11
P-21 (SURF) -- 40
P-21 (1-1.5’) -- 9.4
P-23 (SURF) -- 42
P-23 (1-1.5’) -- 13
Screening Level 12A 80B
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Table 6-2 - Soil Results for Arsenic and Lead (cont’)
(results in mg/kg)
Sample
Identification Arsenic Lead
U.S. EPA Method 6020 6020
P-24 (SURF) -- 83
P-24 (1-1.5’) -- 10
P-24 (1-1.5’) DUP -- 9.0
P-25 (SURF) -- 47
P-25 (1-1.5’) -- 9.8
P-26 (SURF) -- 29
P-26 (1-1.5’) -- 12
P-27 (SURF) -- 64
P-27 (SURF) DUP -- 39
P-27 (1-1.5’) -- 14
P-28 (SURF) -- 150
P-28 (1-1.5’) -- 12
Screening Level 12A 80B
Notes:
mg/kg milligrams per kilogram
‘--‘ Not analyzed
150 Above screening level
A School Site Screening level from DTSC Guidance (4/30/08) B California Human Health Screening Level (CHSSL)
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Table 6-2 - Soil Results for Arsenic and Lead (cont’)
(results in mg/kg)
Sample
Identification Arsenic Lead
U.S. EPA Method 6020 6020
SS-1* 11 40
SS-2* 12 100
SS-3* 8.7 20
SS-4* 7.3 23
SS-5* 13 51
SS-6* 15 75
SS-7* 8.0 20
SS-8* 7.8 18
SS-9* 7.8 42
SS-10* 8.9 27
SS-11* 6.4 19
SS-12* 8.2 72
SS-13* 5.2 52
SS-14* 8.9 33
SS-15* 6.6 22
SS-16* 6.8 9.0
Screening Level 12A 80B
Notes:
mg/kg milligrams per kilogram
‘*‘ Surface soil sample (Cornerstone, June 2014)
100 Above screening level
A School Site Screening level from DTSC Guidance (4/30/08) B California Human Health Screening Level (CHSSL)
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Table 6-3 - Soil Results for PCBs
(results in mg/kg)
Sample
Identification
Aroclor
1016
Aroclor
1221
Aroclor
1232
Aroclor
1242
Aroclor
1248
Aroclor
1254
Aroclor
1260
PCBs
Total
P-4 (SURF) <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05P-9 (SURF) <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 P-10 (SURF) <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05P-11 (SURF) <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05P-14 (SURF) <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05P-15 (SURF) <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 <0.05 RSLs 0.23 0.17 0.17 0.23 0.23 0.12 0.24 0.24
Notes: mg/kg – milligrams per kilogram RSLs– U.S. EPA Regional Screening Level (June 2015) 750
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Table 6-4 – Soil Results for TPHg, BTEX, and MTBE
(results in mg/kg)
Sample
Identification
TPHGasoline
(C6 –C12)
Benzene Toluene EthylBenzene
Total
Xylenes MTBE
U.S. EPA
Method 8260 8260 8260 8260 8260 8260
DH-1 (12’) 0.18 <0.0034 <0.0034 <0.0034 0.026 <0.0034
DH-1 (15’) <0.081 <0.0033 <0.0033 <0.0033 <0.0033 <0.0033 DH-1 (20’) <0.081 <0.0032 <0.0032 <0.0032 <0.0032 <0.0032 DH-2 (15’) <0.084 <0.0034 <0.0034 <0.0034 <0.0034 <0.0034 DH-2 (20’) <0.081 <0.0033 <0.0033 <0.0033 <0.0033 <0.0033 DH-3 (15’) <0.087 <0.0035 <0.0035 <0.0035 <0.0035 <0.0035 DH-3 (20’) <0.092 <0.0037 <0.0037 <0.0037 <0.0037 <0.0037 DH-4 (15’) <0.088 <0.0035 <0.0035 <0.0035 <0.0035 <0.0035 DH-4 (20’) <0.082 <0.0033 <0.0033 <0.0033 <0.0033 <0.0033 DH-5 (15’) <0.13 <0.0050 <0.0050 <0.0050 <0.0050 <0.0050 DH-5 (20’) <0.14 <0.0057 <0.0057 <0.0057 <0.0057 <0.0057 HHRA Note #3 0.33 1,100
RSL 1.2 4,900 5.8 650 47
Notes:

TPH – Total Petroleum Hydrocarbons
BTEX – Benzene, toluene, ethylbenzene, total xylenes
MTBE – Methyl tert butyl ether
HHRA – Human Health Risk Assessment Note #3, Table 1
RSL – U.S. EPA Regional Screening Level (June 2015)
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Table 6-5 - Soil Gas Results for TPHg and VOCs
by EPA Method TO-15 (µg/m3 of Vapor)
Sample
ID
TPH-Gasoline
Benzene
Toluene
Ethylbenzene
Total Xylenes
Methyl-t butyl ether
(MTBE)
2-Hexanone
All Other VOCs
SV-1 (5’) <720 <1.6 5.6 2.9 <6.6 <1.8 <2.1 <1.3 SV-1 (8’) <720 2.8 11 3.4 12 <1.8 5.6 <1.3 HHRA Note #3 97 310,000 1,100 100,000 11,000 31,000
RSLs 31,000 360 5,200,000 1,100 100,000 11,000 31,000
Notes:
µg/m3 – micrograms per cubic meter
TPHg – Total Petroleum Hydrocarbons as Gasoline HHRA – Human Health Risk Assessment Note #3, Table 3. Screening level includes attenuation factor (0.001) for future residential structures. “—“ - not established or not used RSL – USEPA Regional Screening Level (June 2015). Screening level includes attenuation factor (0.001) for future residential structures. 752
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7.0 HUMAN HEALTH SCREENING-LEVEL EVALUATION

7.1 CHEMICALS OF POTENTIAL CONCERN
The COPCs used in the human health screening-level evaluation for the Project Site completed by Padre included those compounds that were reported at concentrations at or in excess of their respective analytical laboratory reporting limits. Therefore, the following COPCs in soil and soil gas were evaluated:

Soil
• OCPs – chlordane, DDD, DDE, DDT, dieldrin, gamma-BHC (lindane), heptachlor, and heptachlor epoxide;
• Metals – Arsenic and lead; and
• VOCs – TPH-g and total xylenes.

Soil Gas
• VOCs – benzene, toluene, ethylbenzene, total xylenes, and 2-hexanone.

7.2 SOIL RISK ASSESSMENT
The DTSC-modified screening levels or the U.S. EPA RSLs (if DTSC-modified screening levels were not available) were used to conduct a screening-level human health risk assessment using the residential land-use scenario. Carcinogenic screening levels are typically based on a predicted excess long-term cancer risk of one in a million. Non-carcinogenic screening levels are based on maintaining the daily COPC intake below the level at which deleterious health effects are considered possible.

In accordance with PEA guidance documents and DTSC’s Human Health Risk Assessment (HHRA) Note No.3, dated May 2015, the maximum detected chemical concentrations in soil were evaluated as potential exposure point concentrations (EPCs). The EPCs were compared to their respective screening levels. The ratio of an EPC to the corresponding carcinogenic screening level was multiplied by 1E-06 to estimate the chemicalspecific screening cancer risk. For noncarcinogens, the chemical-specific hazard index is the ratio of the EPC to the screening level based on noncarcinogenic effects. The sums of the chemical-specific screening cancer risk and screening hazard index are the cumulative screening cancer risk and hazard index, respectively.

The total risk from COPCs identified in soils at the Project Site was estimated to be

3.2 x 10-5, which provides an increased cancer risk of greater than 1 in 1,000,000 (>10-6). The total health hazard from COPCs identified in soils at the Project Site was estimated to be 0.46, which does not present an increased health hazard (i.e., >1). Therefore, a response action to reduce or eliminate the COPCs identified in surficial soils at the Project Site is recommended.

The results of the screening-level evaluation are presented in Table 7-1. 756
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Arsenic concentrations ranged from 5.2 to 15 mg/kg in soil samples collected from across the Project Site. The arsenic data set consisted of four soil samples collected as part of the PEA, and 16 soil samples previously collected as part of a preliminary soil evaluation completed by others (Cornerstone, 2014). The four PEA soil samples were collected as stepout and step-down samples at the location of soil sample SS-6, which reported the highest Project Site arsenic concentration at 15 mg/kg. Arsenic concentrations reported for the PEA soil samples ranged from 5.7 to 13 mg/kg, indicating that arsenic concentrations in soil at this location do not present a potential “hotspot” for arsenic in soil. A statistical evaluation was performed by calculating the 95% Upper Confidence Limit (UCL) for the arsenic data set. The 95% UCL for arsenic in soil at the Project Site was calculated to be 10 mg/kg. A graphical evaluation completed by creating a normal probability plot of the arsenic data set. The shape of the plotted data presents a relatively normal distribution. Therefore, arsenic concentrations identified in surface soil at the Project Site are representative of ambient concentrations and further assessment and/or remedial action for arsenic in soil is not warranted. A copy of the normal probability plot and ProUCL output sheet are presented in Appendix E.

Lead concentrations ranged from 9.0 mg/kg to 310 mg/kg in soil samples collected across the Project Site. A risk assessment was performed using the DTSC lead risk assessment spreadsheet model (LeadSpread Version 8). Based on the LeadSpread output, exposure to the lead concentrations detected at the Project Site will result in a 90th percentile blood lead concentration of 8.0 µg/dl in children which exceeds the Office of Environmental Health Hazard Assessment (OEHHA) blood toxicity level of 1 µg/l. Therefore, a response action to reduce or eliminate the lead-impacted soil is recommended. A copy of the LeadSpread Risk Assessment Spreadsheet is presented in Appendix E.

7.3 SOIL GAS RISK ASSESSMENT
The objective of the soil gas survey was to evaluate shallow soil gas beneath the Project Site for potential VOC impacts. The source of the potential impacts was identified to be a former 500-gallon UST located on the northeast side of the Project Site. Several low level VOCs constituents, including BTEX, were identified in soil gas samples collected at the Project Site. Therefore, a risk evaluation was performed.

DTSC’s SG Screen Version 2.0 (4/03) (DTSC modification December 2014) Screening Level Model for Soil Gas Contamination (based on the Johnson-Ettinger Indoor Vapor Intrusion Model) was used to estimate the cumulative risk and hazard associated with the carcinogenic and the non-carcinogenic constituents detected in soil gas. Soil vapor drill holes were advanced at the former location of the UST. Based on the soil conditions encountered and potential future building construction, the following parameters were used for the screening evaluation:
• Soil gas sample collection depths were approximately 5 and 8-feet; • Static groundwater was not encountered;
• The highest constituent concentrations were used from each sample depth; 757
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• The depth below grade to bottom of enclosed space floor (LF) is 15-centimeters (slab-on-grade);
• The general soil type encountered (within upper 8 feet) was classified as clay (CL); and
• Conservative default values were used for the remaining input parameters.

The leak check compound (1,1-difluoroethane) was not detected in any of the soil gas samples. Therefore, the collected soil gas samples are representative of shallow soil gas conditions at the Project Site.

The results of the soil gas assessment conducted at the Project Site identified low level concentrations of benzene, toluene, ethylbenzene, and total xylenes (BTEX), as well as 2- hexanone. However, none of the VOC constituents exceeded their respective human health screening levels. The results of the PEA screening level risk assessment calculated that the total risk from COPCs identified in soil gas was estimated to be 8.6 x 10-9, which does not provide an increased cancer risk of greater than 1 in 1,000,000 (>10-6). The cumulative hazard is estimated to be 0.0003, which does not provide a significant health hazard (>1). Therefore, further assessment and/or remediation regarding VOCs identified in soil gas at the Project Site is not warranted. Results of the soil gas model are summarized in Table 7-2, and copies of the screening level model spreadsheets are included as Appendix E. 758
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Table 7‐1
Soil Exposure Screening Evaluation
Sedgwick Elementary School Expansion Project
Cupertino Union School District
Screening
Level (mg/kg) Source Cancer            Risk Screening  Level (mg/kg) Source Hazard      Index Chlordane 13 0.43 HHRA Note #3 3.02E‐05 34 RSL 3.82E‐01 DDD 0.0093 2.3 RSL 4.04E‐09 37 Surrogate RSL 2.51E‐04
DDE 0.41 2 RSL 2.05E‐07 37 Surrogate RSL 1.11E‐02DDT 0.26 1.9 RSL 1.37E‐07 37 RSL 7.03E‐03 Dieldrin 0.0068 0.034 RSL 2.00E‐07 3.2 RSL 2.13E‐03
g‐BHC (lindane) 0.00049 0.57 RSL 8.60E‐10 21 RSL 2.33E‐05 Heptachlor 0.021 0.13 RSL 1.62E‐07 39 RSL 5.38E‐04
Heptachlor Epoxide 0.057 0.07 RSL 8.14E‐07 1 RSL 5.70E‐02TPH‐aromatic low 0.18 nc RSL NA 82 RSL 2.20E‐03 Total Xylenes 0.026 nc RSL NA 650 RSL 4.00E‐05
Total Risk: 3.18E‐05 Total Hazard: 4.63E‐01
Notes:COPC = chemical of potential concernEPC = exposure point concentrationExposure Point Concentration = maximum detected concentration in soil samples collected at the site HHRA = Human Health Risk Assessment Note #3, Table 1 (DTSC HERO, May 2015)RSL = regional screening level for residential soil (U.S.EPA June 2015)mg/kg = milligrams per kilogramSurrogate RSL = RSL not established for DDD, DDE.  RSL for DDT was used as a surrogate value.nc = non‐carcinogenic NE = not establishedNA = not applicable COPC
Exposure‐Point
Concentration
(mg/kg)
Carcinogenic Risk Non‐carcinogenic Hazard
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Table 7-2. Results of Soil Gas Screening Level Risk Assessment Project Site Soils (0-8 feet bgs) Project Site Soils (0-8 feet bgs) COPC (1) Risk by COPC (2) COPC (1) Hazard by COPC (3)
Benzene 7.7E-09 Benzene 2.4E-04
Toluene NA Toluene 8.2E-06
Ethylbenzene 8.5E-10 Ethylbenzene 9.2E-07
Xylenes NA Xylenes 2.4E-05
4-Methyl-4-pentanone (MIBK) NA 4-Methyl-4-pentanone (MIBK) 3.9E-07 Total Risk (4) Total Hazard (5)
Risk by Pathway 8.6E-09 Hazard by Pathway 2.7E-04
Notes
(1) Chemical of Potential Concern (COPC)
(2) Risk from each COPC (Cumulative)
(3) Hazard from each COPC (Cumulative)
(4) Total calculated cancer risk
(5) Total calculated hazard quotient
NA Not Applicable
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8.0 ECOLOGICAL SCREENING
A detailed ecological screening evaluation was not performed as part of the PEA because the Project Site has been developed as a residential property since the 1950s. Natural wildlife areas were not noted at the Project Site during the course of the PEA. Therefore, based on the available information, there does not appear to be a significant pathway of exposure to nonhuman, sensitive ecological species.
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9.0 CONCLUSIONS AND RECOMMENDATIONS
The purpose of the PEA was to establish whether a release or potential release of hazardous substances, which potentially pose a threat to human health via ingestion, dermal contact, and inhalation exposure pathways, exists at the Project Site.

Evaluation
The COPCs used in the human health screening-level evaluation for the Project Site included those compounds that were reported at concentrations at or above their respective analytical laboratory reporting limits. Therefore, the following COPCs were evaluated:

Soil
• OCPs – chlordane, DDD, DDE, DDT, dieldrin, gamma-BHC (lindane), heptachlor, and heptachlor epoxide;
• Metals – Arsenic and lead; and
• VOCs – TPH-g and total xylenes.

Soil Gas
• VOCs – benzene, toluene, ethylbenzene, total xylenes, and 2-hexanone.

Risk Assessment
The results of the PEA screening level risk assessment estimated the total risk from COPCs identified in soils at the Project Site to be 3.2 x 10-5, which provides an increased cancer risk of greater than 1 in 1,000,000 (>10-6). The total health hazard from COPCs identified in soils at the Project Site is estimated to be 0.46, which does not provide an increased health hazard (i.e., >1). Therefore, a response action to reduce and/or eliminate the COPCs identified in surficial soils at the Project Site is recommended.

Lead concentrations ranged from 9.0 to 310 mg/kg in soil samples collected throughout the Project Site. Using DTSC’s lead risk assessment spreadsheet model (LeadSpread Version 8), exposure to the lead concentrations identified at the Project Site would result in a 90th percentile blood lead concentration of 8.0 micrograms per deciliter (µg/dl) in children, which exceeds OEHHA’s blood toxicity level of 1 µg/dl. Therefore, a response action to reduce or eliminate lead-impacted soil is recommended.

Arsenic concentrations ranged from 5.2 to 15 mg/kg in soil samples collected from across the Project Site. The arsenic data set consisted of four soil samples collected as part of the PEA, and 16 soil samples previously collected as part of a preliminary soil evaluation completed by others (Cornerstone, 2014). The four PEA soil samples were collected as stepout and step-down samples at the location of soil sample SS-6, which reported the highest Project Site arsenic concentration at 15 mg/kg. Arsenic concentrations reported for the PEA soil samples ranged from 5.7 to 13 mg/kg, indicating that arsenic concentrations in soil at this 762
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location do not present a potential “hotspot” for arsenic in soil. A statistical evaluation was performed by calculating the 95% Upper Confidence Limit (UCL) for the arsenic data set. The 95% UCL for arsenic in soil at the Project Site was calculated to be 10 mg/kg. A graphical evaluation completed by creating a normal probability plot of the arsenic data set. The shape of the plotted data presents a relatively normal distribution. Therefore, arsenic concentrations identified in surface soil at the Project Site are representative of ambient concentrations and further assessment and/or remedial action for arsenic in soil is not warranted.

Results of the soil gas assessment conducted at the Project Site identified low level concentrations of benzene, toluene, ethylbenzene, total xylenes (BTEX), and 2-hexanone.

However, none of the VOC constituents exceeded their respective human health screening levels. The results of the PEA screening level risk assessment calculated that the total risk from COPCs identified in soil gas was estimated to be 8.6 x 10-9, which does not provide an increased cancer risk of greater than 1 in 1,000,000 (>10-6). The cumulative hazard is estimated to be 0.0003, which does not provide a significant health hazard (>1). Therefore, further assessment and/or remediation regarding VOCs identified in soil gas at the Project Site is not warranted.

Recommendations
Based on the results of the PEA, soil and soil gas at the location of the former 500-gallon capacity gasoline UST has not been significantly impacted from the former presence of the UST. Subsurface soil in the area of the UST generally consists of a stiff clay material, and any residual petroleum hydrocarbons in soil will degrade over time by natural attenuation processes.

Therefore, further assessment and/or remediation regarding the former UST is not warranted.

Based on the results of the PEA, chlordane and lead have been identified in surface soils at the Project Site at concentrations exceeding their respective human health screening levels. The total increased cancer risk from chlordane identified in soils at the Project Site is estimated to be 3.2 x 10-5, which exceeds DTSC’s ‘point of departure’ of 1 in 1,000,000 (>10-6).

Due to elevated concentrations of chlordane and lead identified in surface soil around existing structures located at the Project Site, Padre recommends a response action to reduce or eliminate the potential impact of these contaminants. The recommended remedial action is excavation, removal, and offsite disposal at an appropriate landfill. Prior to the response action, Padre recommends conducting a Supplemental Site Investigation (SSI) to further define chlordane and lead impacts around the structures.
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10.0 REFERENCES
California, Department of Water Resources (http://www.water.ca.gov/waterdatalibrary/) California, Department of Water Resources, Evaluation of Groundwater Resources South San Francisco Bay Volume III Northern Santa Clara County Area: Bulletin 118-1, December 1975.

California Division of Mines and Geology, Geologic Map of San Francisco – San Jose Quadrangle California, (1:250,000), 1990 (Second Printing 2005).

California Geological Survey, 2000, A General Location Guide For Ultramafic Rocks in California - Areas More Likely to Contain Naturally Occurring Asbestos. Open File Report 2000-19.
2002, Guidelines for Geologic Investigations of Naturally Occurring Asbestos in California. Special Publication 124.

California, State Water Resources Control Board Geotracker website (http://geotracker.swrcb.ca.gov).

Cornerstone Earth Group, Phase I Environmental Site Assessment and Preliminary Soil Quality Evaluation, 10480 Finch Avenue, Cupertino, California, July 11, 2014.

County of Santa Clara - Assessor’s Office
County of Santa Clara – Planning Deparment
Cupertino, City of, General Plan 2000-2020, Adopted 2005.

Department of Toxic Substances Control, Envirostor Database, (http://www.envirostor.dtsc.ca.gov/public/).

Department of Toxic Substances Control, Interim Guidance, Evaluation of School Sites with Potential Contamination as a Result of Lead from Lead-Based-Paint, Organochlorine Pesticides from Temiticides, and Polychlorinated Biphenyls from Electrical Transformers, revised June 9, 2006.

Department of Toxic Substances Control, Preliminary Environmental Assessment Guidance Manual, January 1994, Interim Final – Final October 2013.

Department of Toxic Substances Control, Advisory – Active Soil Gas Investigations, April 2012..

Duggan, Mary Ann, P.E., Director – Facility Modernization – Cupertino Union SD Google Earth.
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Jennings and Bryant, 2010, Fault Activity Map of California, California Geological Survey.

Norris, R. M., & R. W. Webb, 1976 (Second Edition 1990), Geology of California, John Wiley & Sons, New York, pp. 412-427.

Padre Associates, Inc., Geologic Hazards Report, Sedgwick Elementary School Expansion Project, 10480 Finch Avenue, Cupertino, Santa Clara County, California, January 2015.

Padre Associates, Inc., Preliminary Environmental Assessment Work Plan, Sedgwick Elementary School Expansion Project, 10480 Finch Avenue, Cupertiono, Santa Clara County, California, May 2015.

United States Department of Agriculture, National Resources Conservation Service, Web Soil Survey (http://websoilsurvey.nrcs.usda.gov/app/).

USGS Geological Survey; Cupertino Quadrangle, California, Topographic Map, 1991. 765
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APPENDIX A

DTSC CORRESPONDENCE
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APPENDIX B

QUALITY ASSURANCE PROJECT PLAN (QAPP)
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APPENDIX B

QUALITY ASSURANCE/QUALITY CONTROL
(QA/QC) PROCEDURES
The QA/QC procedures will be employed in both the field and the laboratory. QA/QC samples include the collection of equipment rinsate samples, field blank samples, and duplicate split samples.

FIELD QA/QC PROCEDURES
Field QA/QC procedures will be performed at the site and consist of the following measures:
 Chain-of-Custody (COC) forms will be used for sample submittal to the laboratory; and
 Daily information regarding sample collection will be recorded by Padre in Field Logbooks. Sample types, soil descriptions, sample identification numbers, and sample times will be collected and recorded on Field Data Sheets and in the Field Logbooks. Pages will be numbered, dated, and signed by the person performing data entry.

Field QA/QC samples will be collected and submitted for analysis along with the discrete soil samples using the following sampling frequency:
 Equipment blanks - One equipment rinsate blank per sample event;  Field blanks - One field blank sample per sample event; and  Field duplicates – Approximately 10% of the collected samples will be analyzed as duplicate samples for select chemical analyses.

Equipment Rinseate Blanks
An equipment rinseate blank (equipment blank) will be collected from the final water rinsed over equipment after cleaning activities have been performed. The equipment blank will be collected from non-dedicated (reusable) sampling equipment such as soil sampling tools.

The equipment blank will be analyzed for arsenic using the same analytical method used on the unique soil samples.

To collect an equipment blank sample, rinse water will be carefully poured over or through the recently cleaned equipment, and collected directly into an appropriate sample container held over a bucket. Equipment blank samples will be labeled and handled in the same manner as all other samples.
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Field Blanks
Field blank samples consist of a sample of the deionized water that was used to rinse sampling equipment during equipment cleaning activities. The purpose of the field blank sample is to evaluate the rinse water for compounds detected in the soil samples. A field blank sample will be collected by pouring rinse water into the appropriate sample container. The field blank will be analyzed for arsenic using the same analytical method used on the unique soil samples, and the field blank samples will be handled in the same manner as all other samples.

Duplicate Samples
Duplicate soil sample(s) will be analyzed in order to evaluate the analytical procedures and methods employed by the laboratory. The field duplicate sample(s) will be selected from the original soil samples, and split by the laboratory. Duplicate soil samples will be analyzed for OCPs and lead.

Duplicate soil gas sample(s) will be collected immediately after the original sample, in separate sample containers, at the same location and depth. Duplicate soil gas samples will be analyzed for VOCs.

Laboratory QA/QC Procedures
Laboratory QA/QC procedures include the following:
 Laboratory analyses will be performed within the required holding time for all samples;
 Appropriate minimum reporting limits (RLs) will be used for each analysis;  A state-certified hazardous waste testing laboratory will conduct the required analysis;
 The laboratory will provide the following information for each sample:
- Method blank data;
- Surrogate recovery, instrument tuning, and calibration data; and - Signed laboratory reports including the sample designation, date of sample collection, date of sample analysis, laboratory analytical method employed, sample volume, and the minimum RL.

To determine whether Quality Assurance/Quality Control (QA/QC) requirements for sampling and analysis were met for the project, and to determine whether the data are usable for risk assessment purposes, a cursory data validation review will be done on the data summary package provided by the laboratory. This review will include an evaluation of chain-ofcustody documentation, holding times, reporting limits, precision and accuracy of goals, representativeness, and completeness of the data. QA/QC requirements that are not met will 772
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be evaluated in the ‘uncertainty’ portion of the risk assessment. Documentation of the data validation review will be included with the PEA report.

Detection Limits
Detection limits for OCPs and metals that will be met by the analytical laboratory are listed in the following DTSC document(s), and are attached:
 DTSC’s Advisory – Active Soil gas Investigations, dated April 2012, and  DTSC, Interim Guidance, Evaluation of School Sites with Potential Contamination as a Result of Lead from Lead-Based-Paint, Organochlorine Pesticides from Temiticides, and Polychlorinated Biphenyls from Electrical Transformers, revised June 9, 2006.

Padre proposes to utilize McCampbell Analytical Inc. (McCampbell) located in Pittsburg, California to provide the required chemical analyses of collected soil, soil gas, and water samples. McCampbell is certified (No. 1644) by the California State Environmental Laboratory Accreditation Program Branch to provide the required chemical analyses. 773
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APPENDIX C

DRILL HOLE LOGS
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APPENDIX D

ANALYTICAL LABORATORY REPORTS AND CHAIN-OF CUSTODYS
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WorkOrder:

Report Created for: Padre Associates. Inc.
555 University Ave., Suite 110
Sacramento, CA 95825
Project Contact: Alan J. Klein
Project Name: #1401-2171; CUPERTINO (SEDGWICK PEA)
Project P.O.:

Project Received: 07/13/2015
Analytical Report reviewed & approved for release on 07/22/2015 by:

Angela Rydelius,
Laboratory Manager
1507427
The report shall not be reproduced except in full, without the written approval of the laboratory.

The analytical results relate only to the items tested. Results reported conform to the most current NELAP standards, where applicable, unless otherwise stated in the case narrative.

Amended: 07/24/2015
Analytical Report
1534 Willow Pass Rd. Pittsburg, CA 94565 ♦ TEL: (877) 252-9262 ♦ FAX: (925) 252-9269 ♦ www.mccampbell.com NELAP: 4033ORELAP ♦ ELAP: 1644 ♦ ISO/IEC: 17025:2005 ♦ WSDE: C972-11 ♦ ADEC: UST-098 ♦ UCMR3 McCampbell Analytical, Inc.
"When Quality Counts"