Agenda, regular meeting, second session — Del Mar City Council, January 23, 2023 (part 2 of 2)

CURRENT ZONING @
TABLE A-3 20 DU/ACRE

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Net Operating Income - Residential
# Units $/SF $/Month(1) Annual # Units $/SF $/Month(1) Annual A. Gross Scheduled Income
Market-Rate
One Bedroom 675 SF 6 $4.50 $3,000 $216,000 5 $4.50 $3,000 $180,000 Two Bedroom 1,000 SF 2 $4.25 $4,300 $103,000 2 $4.25 $4,300 $103,000 Subtotal/Average 756 SF 8 $4.44 $3,300 $319,000 7 $4.43 $3,400 $283,000 Affordable
One Bedroom @ 30% AMI 675 SF 0 $0.86 $580 $0 0 $0.86 $580 $0 One Bedroom @ 50% AMI 675 SF 1 $1.49 $1,007 $12,000 0 $1.49 $1,007 $0 One Bedroom @ 60% AMI 675 SF 0 $1.81 $1,221 $0 2 $1.81 $1,221 $29,000 Two Bedroom @ 30% AMI 1,000 SF 0 $0.64 $642 $0 0 $0.64 $642 $0 Two Bedroom @ 50% AMI 1,000 SF 0 $1.12 $1,123 $0 0 $1.12 $1,123 $0 Two Bedroom @ 60% AMI 1,000 SF 0 $1.36 $1,363 $0 0 $1.36 $1,363 $0 Subtotal/Average 675 SF 1 $1.49 $1,000 $12,000 2 $1.81 $1,200 $29,000 Total/Average 747 SF 9 $4.44 $3,065 $331,000 9 $3.87 $2,889 $312,000 Add: Other Income $100 /Unit/Month $11,000 $100 /Unit/Month $11,000 Total Gross Scheduled Income (GSI) $342,000 $323,000
B. Effective Gross Income
(Less) Vacancy 5.0% of GSI ($17,000) 5.0% of GSI ($16,000) Effective Gross Income (EGI) $325,000 $307,000
C. Operating Expenses
(Less) Operating Expenses $5,750 /Unit/Year ($52,000) $5,750 /Unit/Year ($52,000) (Less) Property Taxes(2) $6,778 /Unit/Year ($61,000) $6,333 /Unit/Year ($57,000) (Less) Replacement Reserves $300 /Unit/Year ($3,000) $300 /Unit/Year ($3,000) Total Operating Expenses $12,889 /Unit/Year ($116,000) $12,444 /Unit/Year ($112,000) 36% of EGI 36% of EGI
D. Net Operating Income - Residential $209,000 $195,000 PC Zone
Maximum Density Bonus Affordable Housing Mitigation
Unit Size
807 Camino Del Mar
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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CURRENT ZONING @
TABLE A-3 20 DU/ACRE

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
PC Zone
Maximum Density Bonus Affordable Housing Mitigation
807 Camino Del Mar
II. Net Operating Income - Commercial
A. Gross Scheduled Income 2,300 SF $4.00 /SF NNN $110,000 $4.00 /SF NNN $110,000 B. (Less) Vacancy 10.0% of GSI ($11,000) 10.0% of GSI ($11,000) C. Effective Gross Income $99,000 $99,000
D. (Less) Unreimbursed Operating Expenses 5.0% of EGI ($5,000) 5.0% of EGI ($5,000) E. Net Operating Income - Commercial $94,000 $94,000
III. Total Net Operating Income $303,000 $289,000
(1) See Worksheets 2 to 4 for calculation of affordable rents. (2) Based on capitalized income approach; assumes a 1.10% tax rate and 3.75% cap rate.

Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 34 ends

CURRENT ZONING @
20 DU/ACRE
TABLE A-4

RESIDUAL LAND VALUE
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $303,000 $289,000
Capitalization Rate @ 3.75% 3.75%
Capitalized Value Upon Completion $898,000 /Unit $8,080,000 $856,000 /Unit $7,707,000 (Less) Cost of Sale 3.0% of Value ($242,000) 3.0% of Value ($231,000) (Less) Target Developer Profit 10.0% of Value ($808,000) 10.0% of Value ($771,000) II. Net Sales Proceeds $7,030,000 $6,705,000
III. (Less) Development Costs ($6,019,000) ($6,019,000) IV. Residual Land Value $1,011,000 $686,000
Per Unit $112,000 $76,000
Per SF Site $77 $52
Maximum Density Bonus Affordable Housing Mitigation
PC Zone
807 Camino Del Mar
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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PC Zone - PC-2
Potential Increase @ 37 DU/Acre
Multi-Unit Sites
Feasibility Analysis
807 Camino Del Mar
16 Units

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POTENTIAL INCREASE @
TABLE A-5 37 DU/ACRE

PROJECT DESCRIPTION
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 0.30 Acres
II. Gross Building Area (GBA)
Residential
Net Residential 8,951 SF 79%
Circulation/Common Area 2,449 SF 21%
Subtotal Residential 11,400 SF 100%
Commercial 0 SF
Total GBA 11,400 SF
III. Construction Type / Number of Stories
IV. Unit Mix Unit Size
Studio 9 Units 56% 425 SF
One Bedroom 5 Units 31% 646 SF
Two Bedroom 2 Units 13% 948 SF
Total 16 Units 44% 559 SF
V. Affordability Mix
Market-Rate Units 14 Units 88% 12 Units 75%
Affordable Units
Extremely Low -- 0% -- 0%
Very Low 2 Units 13% 2 Units 13%
Low -- 0% 2 Units 13%
Total Affordable Units 2 Units 13% 4 Units 25%
Total 16 Units 100% 16 Units 100%
VI. Density
Pre-Bonus Density 11 Units 37 Units/Acre
Post-Bonus Density 17 Units 55 Units/Acre
VII. Parking
Type
Tuck-under On-Site 17 Spaces
City Hall Off-Site 10 Spaces
Total 27 Spaces
Number of Spaces
Residential 27 Spaces 1.7 Spaces/Unit
Commercial 0 Spaces 0.0 Spaces/300 SF
Total 27 Spaces
(1) Assumes at least 15% of pre-density bonus housing units are Very Low. All density bonus calculations resulting in a fraction are rounded up to the next whole number.
(2) Reflects Affordable Housing Mitigation requirement for developments of 10-19 units of at least 20% Low Income with at least one (1) unit at Very Low.

Assumes one (1) additional unit at Very Low to achieve maximum density bonus.

Density Bonus (1) Mitigation (2)
PC Zone
807 Camino Del Mar
Type V / 2 Stories
# Units
Maximum Affordable Housing
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL INCREASE @
37 DU/ACRE
TABLE A-6

DEVELOPMENT COSTS
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Direct Costs (1) Total Per Unit
Off-Site Improvements (2) $0 $0 $0 /SF Site
On-Site Improvements/Landscaping (2) $523,000 $33,000 $40 /SF Site Parking $340,000 $21,000 $20,000 /Space - Tuck-under
Shell Construction - Residential $3,420,000 $214,000 $300 /SF GBA-Residential Shell Construction - Commercial $0 $0 $200 /SF GBA-Commercial FF&E/Amenities $80,000 $5,000 Allowance
Tenant Improvements $0 $0 $50 /SF GBA-Commercial
Contingency $218,000 $14,000 5.0% of Directs
Total Direct Costs $4,581,000 $286,000 $402 /SF GBA
II. Indirect Costs
Architecture & Engineering $321,000 $20,000 7.0% of Directs Permits & Fees (3) $1,025,000 $64,000 $90 /SF GBA
Legal & Accounting $69,000 $4,000 1.5% of Directs
Taxes & Insurance $69,000 $4,000 1.5% of Directs
Developer Fee $183,000 $11,000 4.0% of Directs
Marketing/Lease-Up - Residential $40,000 $2,500 Allowance Marketing/Lease-Up - Commercial $0 $0 $7.50 /SF GBA-Commercial Contingency $85,000 $5,000 5.0% of Indirects
Total Indirect Costs $1,792,000 $112,000 39.1% of Directs III. Financing Costs(4) $458,000 $29,000 10.0% of Directs IV. Total Development Costs (5) $6,831,000 $427,000 $599 / SF GBA (1) Excludes the payment of prevailing wages.
(2) Estimated allowance; not verified by KMA or the City of Del Mar. (3) Per the City of Del Mar, includes building permit fee, construction license tax, RTCIP, SMIP fee and school district fees; see Worksheet 1.
(4) Allowance for loan fees, interest during construction, and interest during lease-up. (5) Excludes acquisition costs.

PC Zone
807 Camino Del Mar
Comments
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL INCREASE @
37 DU/ACRE TABLE A-7

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Net Operating Income - Residential
# Units $/SF $/Month(1) Annual # Units $/SF $/Month(1) Annual A. Gross Scheduled Income
Market-Rate
Studio 425 SF 8 $4.75 $2,000 $192,000 7 $4.75 $2,000 $168,000 One Bedroom 646 SF 4 $4.50 $2,900 $139,000 3 $4.50 $2,900 $104,000 Two Bedroom 948 SF 2 $4.25 $4,000 $96,000 2 $4.25 $4,000 $96,000 Subtotal/Average 563 SF 14 $4.61 $2,500 $427,000 12 $4.60 $2,600 $368,000 Affordable
Studio @ 30% AMI 425 SF 0 $1.21 $515 $0 0 $1.21 $515 $0 Studio @ 50% AMI 425 SF 1 $2.09 $890 $11,000 1 $2.09 $890 $11,000 Studio @ 60% AMI 425 SF 0 $2.53 $1,077 $0 1 $2.53 $1,077 $13,000 One Bedroom @ 30% AMI 646 SF 0 $0.90 $580 $0 0 $0.90 $580 $0 One Bedroom @ 50% AMI 646 SF 1 $1.56 $1,007 $12,000 1 $1.56 $1,007 $12,000 One Bedroom @ 60% AMI 646 SF 0 $1.89 $1,221 $0 1 $1.89 $1,221 $15,000 Two Bedroom @ 30% AMI 948 SF 0 $0.68 $642 $0 0 $0.68 $642 $0 Two Bedroom @ 50% AMI 948 SF 0 $1.18 $1,123 $0 0 $1.18 $1,123 $0 Two Bedroom @ 60% AMI 948 SF 0 $1.44 $1,363 $0 0 $1.44 $1,363 $0 Subtotal/Average 536 SF 2 $1.83 $1,000 $23,000 4 $2.02 $1,100 $51,000 Total/Average 559 SF 16 $4.61 $2,344 $450,000 16 $3.90 $2,182 $419,000 Add: Other Income $100 /Unit/Month $19,000 $100 /Unit/Month $19,000 Total Gross Scheduled Income (GSI) $469,000 $438,000
B. Effective Gross Income
(Less) Vacancy 5.0% of GSI ($23,000) 5.0% of GSI ($22,000) Effective Gross Income (EGI) $446,000 $416,000
C. Operating Expenses
(Less) Operating Expenses $5,750 /Unit/Year ($92,000) $5,750 /Unit/Year ($92,000) (Less) Property Taxes (2) $4,938 /Unit/Year ($79,000) $4,500 /Unit/Year ($72,000) (Less) Replacement Reserves $300 /Unit/Year ($5,000) $300 /Unit/Year ($5,000) Total Operating Expenses $11,000 /Unit/Year ($176,000) $10,563 /Unit/Year ($169,000) 39% of EGI 41% of EGI
D. Net Operating Income $270,000 $247,000
(1) See Worksheets 2 to 4 for calculation of affordable rents. (2) Based on capitalized income approach; assumes a 1.10% tax rate and 3.75% cap rate.

Unit Size
PC Zone
807 Camino Del Mar
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL INCREASE @
37 DU/ACRE
TABLE A-8

RESIDUAL LAND VALUE
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $270,000 $247,000
Capitalization Rate @ 3.75% 3.75%
Capitalized Value Upon Completion $450,000 /Unit $7,200,000 $412,000 /Unit $6,587,000 (Less) Cost of Sale 3.0% of Value ($216,000) 3.0% of Value ($198,000) (Less) Target Developer Profit 10.0% of Value ($720,000) 10.0% of Value ($659,000) II. Net Sales Proceeds $6,264,000 $5,730,000
III. (Less) Development Costs ($6,831,000) ($6,831,000) IV. Residual Land Value ($567,000) ($1,101,000)
Per Unit ($35,000) ($69,000)
Per SF Site ($43) ($84)
PC Zone
807 Camino Del Mar
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 40 ends

PC Zone - PC-3
Potential Increase @ 63 DU/Acre
Multi-Unit Sites
Feasibility Analysis
807 Camino Del Mar
29 Units, 3 Stories, w/Commercial

Page 41 ends

POTENTIAL INCREASE @
TABLE A-9 63 DU/ACRE

PROJECT DESCRIPTION
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 0.30 Acres
II. Gross Building Area (GBA)
Residential
Net Residential 16,150 SF 85%
Circulation/Common Area 2,909 SF 15%
Subtotal Residential 19,059 SF 100%
Commercial 2,535 SF
Total GBA 21,594 SF
III. Construction Type / Number of Stories
IV. Unit Mix Unit Size
Studio 17 Units 59% 430 SF
One Bedroom 8 Units 28% 654 SF
Two Bedroom 4 Units 14% 903 SF
Total 29 Units 100% 557 SF
V. Affordability Mix
Market-Rate Units 26 Units 90% 23 Units 79%
Affordable Units
Extremely Low -- 0% 1 Unit 3%
Very Low 3 Units 10% 2 Units 7%
Low -- 0% 3 Units 10%
Total Affordable Units 3 Units 10% 6 Units 21%
Total 29 Units 100% 29 Units 100%
VI. Density
Pre-Bonus Density 19 Units 63 Units/Acre
Post-Bonus Density 29 Units 97 Units/Acre
VII. Parking
Type
Tuck-under On-Site 17 Spaces
City Hall Off-Site 32 Spaces
Total 49 Spaces
Number of Spaces
Residential 40 Spaces 1.4 Spaces/Unit
Commercial 9 Spaces 0.0 Spaces/300 SF
Total 49 Spaces
(1) Assumes at least 15% of pre-density bonus housing units are Very Low. All density bonus calculations resulting in a fraction are rounded up to the next whole number.
(2) Reflects Affordable Housing Mitigation requirement for developments of 20 - 29 units of at least 20% Low Income with at least one (1) unit at Extremely Low and one (1) unit at Very Low. Assumes one (1) additional unit at Very Low to achieve maximum density bonus.

Density Bonus (1) Mitigation (2)
PC Zone
807 Camino Del Mar
Type V / 2 Stories
# Units
Maximum Affordable Housing
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 42 ends

POTENTIAL INCREASE @
63 DU/ACRE
TABLE A-10

DEVELOPMENT COSTS
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Direct Costs (1) Total Per Unit
Off-Site Improvements (2) $0 $0 $0 /SF Site
On-Site Improvements/Landscaping (2) $523,000 $18,000 $40 /SF Site Parking $340,000 $12,000 $20,000 /Space - Tuck-under
Shell Construction - Residential $5,718,000 $197,000 $300 /SF GBA-Residential Shell Construction - Commercial $507,000 $17,000 $200 /SF GBA-Commercial FF&E/Amenities $145,000 $5,000 Allowance
Tenant Improvements $127,000 $4,000 $50 /SF GBA-Commercial Contingency $368,000 $13,000 5.0% of Directs
Total Direct Costs $7,728,000 $266,000 $358 /SF GBA
II. Indirect Costs
Architecture & Engineering $541,000 $19,000 7.0% of Directs Permits & Fees (3) $1,938,000 $67,000 $90 /SF GBA
Legal & Accounting $116,000 $4,000 1.5% of Directs
Taxes & Insurance $116,000 $4,000 1.5% of Directs
Developer Fee $309,000 $11,000 4.0% of Directs
Marketing/Lease-Up - Residential $73,000 $2,500 Allowance Marketing/Lease-Up - Commercial $19,000 $1,000 $7.50 /SF GBA-Commercial Contingency $155,000 $5,000 5.0% of Indirects
Total Indirect Costs $3,267,000 $113,000 42.3% of Directs III. Financing Costs(4) $773,000 $27,000 10.0% of Directs IV. Total Development Costs (5) $11,768,000 $406,000 $545 / SF GBA (1) Excludes the payment of prevailing wages.
(2) Estimated allowance; not verified by KMA or the City of Del Mar. (3) Per the City of Del Mar, includes building permit fee, construction license tax, RTCIP, SMIP fee and school district fees; see Worksheet 1.
(4) Allowance for loan fees, interest during construction, and interest during lease-up. (5) Excludes acquisition costs.

PC Zone
807 Camino Del Mar
Comments
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 43 ends

POTENTIAL INCREASE @
63 DU/ACRE TABLE A-11

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Net Operating Income - Residential
# Units $/SF $/Month(1) Annual # Units $/SF $/Month(1) Annual A. Gross Scheduled Income
Market-Rate
Studio 430 SF 15 $4.75 $2,000 $360,000 13 $4.75 $2,000 $312,000 One Bedroom 654 SF 7 $4.50 $2,900 $244,000 7 $4.50 $2,900 $244,000 Two Bedroom 948 SF 4 $4.25 $4,000 $192,000 3 $4.25 $4,000 $144,000 Subtotal/Average 570 SF 26 $4.61 $2,600 $796,000 23 $4.61 $2,500 $700,000 Affordable
Studio @ 30% AMI 430 SF 0 $1.20 $515 $0 1 $1.20 $515 $6,000 Studio @ 50% AMI 430 SF 2 $2.07 $890 $21,000 1 $2.07 $890 $11,000 Studio @ 60% AMI 430 SF 0 $2.51 $1,077 $0 1 $2.51 $1,077 $13,000 One Bedroom @ 30% AMI 654 SF 0 $0.89 $580 $0 0 $0.89 $580 $0 One Bedroom @ 50% AMI 654 SF 1 $1.54 $1,007 $12,000 1 $1.54 $1,007 $12,000 One Bedroom @ 60% AMI 654 SF 0 $1.87 $1,221 $0 1 $1.87 $1,221 $15,000 Two Bedroom @ 30% AMI 948 SF 0 $0.68 $642 $0 0 $0.68 $642 $0 Two Bedroom @ 50% AMI 948 SF 0 $1.18 $1,123 $0 0 $1.18 $1,123 $0 Two Bedroom @ 60% AMI 948 SF 0 $1.44 $1,363 $0 0 $1.44 $1,363 $0 Subtotal/Average 505 SF 3 $1.89 $900 $33,000 5 $1.84 $1,000 $57,000 Total/Average 557 SF 29 $4.61 $2,382 $829,000 28 $4.05 $2,253 $757,000 Add: Other Income $100 /Unit/Month $35,000 $100 /Unit/Month $34,000 Total Gross Scheduled Income (GSI) $864,000 $791,000
B. Effective Gross Income
(Less) Vacancy 5.0% of GSI ($43,000) 5.0% of GSI ($40,000) Effective Gross Income (EGI) $821,000 $751,000
C. Operating Expenses
(Less) Operating Expenses $5,750 /Unit/Year ($167,000) $5,750 /Unit/Year ($161,000) (Less) Property Taxes (2) $5,034 /Unit/Year ($146,000) $4,714 /Unit/Year ($132,000) (Less) Replacement Reserves $300 /Unit/Year ($9,000) $300 /Unit/Year ($8,000) Total Operating Expenses $11,103 /Unit/Year ($322,000) $10,750 /Unit/Year ($301,000) 39% of EGI 40% of EGI
D. Net Operating Income $499,000 $450,000
(1) See Worksheets 2 to 4 for calculation of affordable rents. (2) Based on capitalized income approach; assumes a 1.10% tax rate and 3.75% cap rate.

Unit Size
PC Zone
807 Camino Del Mar
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 44 ends

POTENTIAL INCREASE @
63 DU/ACRE TABLE A-11

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
PC Zone
807 Camino Del Mar
Maximum Density Bonus Affordable Housing Mitigation
II. Net Operating Income - Commercial
A. Gross Scheduled Income 2,535 SF $4.00 /SF NNN $122,000 $4.00 /SF NNN $122,000 B. (Less) Vacancy 10.0% of GSI ($12,000) 10.0% of GSI ($12,000) C. Effective Gross Income $110,000 $110,000
D. (Less) Unreimbursed Operating Expenses 5.0% of EGI ($6,000) 5.0% of EGI ($6,000) E. Net Operating Income - Commercial $104,000 $104,000
III. Total Net Operating Income $603,000 $554,000
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 45 ends

POTENTIAL INCREASE @
63 DU/ACRE
TABLE A-12

RESIDUAL LAND VALUE
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $603,000 $554,000
Capitalization Rate @ 3.75% 3.75%
Capitalized Value Upon Completion $554,000 /Unit $16,080,000 $509,000 /Unit $14,773,000 (Less) Cost of Sale 3.0% of Value ($482,000) 3.0% of Value ($443,000) (Less) Target Developer Profit 10.0% of Value ($1,608,000) 10.0% of Value ($1,477,000) II. Net Sales Proceeds $13,990,000 $12,853,000
III. (Less) Development Costs ($11,768,000) ($11,768,000) IV. Residual Land Value $2,222,000 $1,085,000
Per Unit $77,000 $37,000
Per SF Site $170 $83
PC Zone
807 Camino del Mar
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 46 ends

2148 and 2236 Jimmy Durante Boulevard
Current Zoning @ 20 DU/Acre
Multi-Unit Sites
Feasibility Analysis
NC Zone - NC-1
24 Units

Page 47 ends

CURRENT ZONING @
TABLE B-1 20 DU/ACRE

PROJECT DESCRIPTION
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 0.80 Acres
II. Gross Building Area (GBA)
Residential
Net Residential 14,228 SF 70%
Circulation/Common Area 6,054 SF 30%
Subtotal Residential 20,282 SF 100%
Retail 5,212 SF
Total GBA 25,494 SF
III. Construction Type / Number of Stories
IV. Unit Mix Unit Size
Studio 6 Units 25% 360 SF
One Bedroom 16 Units 67% 627 SF
Two Bedroom 2 Units 8% 1,020 SF
Total 24 Units 75% 593 SF
V. Affordability Mix
Market-Rate Units 21 Units 87.5% 19 Units 79.2%
Affordable Units
Extremely Low -- 0% 1 Unit 4%
Very Low 3 Units 13% 2 Units 8%
Low -- 0% 2 Units 8%
Total Affordable Units 3 Unit 13% 5 Units 21%
Total 24 Units 100% 24 Units 100%
VII Density
Pre-Bonus Density 16 Units 20 Units/Acre
Post-Bonus Density 24 Units 30 Units/Acre
VII. Parking
Type
Surface 19 Spaces
Tuck-under 23 Spaces
Total 42 Spaces
Number of Spaces
Residential 24 Spaces 1.0 Spaces/Unit
Retail 18 Spaces 1.0 Spaces/300 SF
Total 42 Spaces
(1) Assumes at least 15% of pre-density bonus housing units are Very Low. All density bonus calculations resulting in a fraction are rounded up to the next whole number.
(2) Reflects Affordable Housing Mitigation requirement for developments of 20 - 24 units of at least 20% Low Income with at least one (1) rental unit at Extremely Low and one (1) unit at Very Low. Assumes one (1) additional unit at Very Low to achieve maximum density bonus.

Density Bonus (1) Mitigation (2)
NC Zone
2148 and 2236 Jimmy Durante Boulevard
Type V / 2 - 3 Stories
# Units
Maximum Affordable Housing
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 48 ends

CURRENT ZONING @
20 DU/ACRE
TABLE B-2

DEVELOPMENT COSTS
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Direct Costs (1) Total Per Unit
Off-Site Improvements (2) $0 $0 $0 /SF Site
On-Site Improvements/Landscaping (2) $1,394,000 $58,000 $40 /SF Site Parking - Surface $0 $0 Included above
Parking - Tuck-under $460,000 $19,000 $20,000 /Space - Tuck-under Shell Construction - Residential $6,085,000 $254,000 $300 /SF GBA-Residential Shell Construction - Retail $1,042,000 $43,000 $200 /SF GBA-Retail FF&E/Amenities $120,000 $5,000 Allowance
Tenant Improvements $261,000 $11,000 $50 /SF GBA-Retail Contingency $468,000 $20,000 5.0% of Directs
Total Direct Costs $9,830,000 $410,000 $386 /SF GBA
II. Indirect Costs
Architecture & Engineering $688,000 $29,000 7.0% of Directs Permits & Fees (3) $2,262,000 $94,000 $89 /SF GBA
Legal & Accounting $147,000 $6,000 1.5% of Directs
Taxes & Insurance $147,000 $6,000 1.5% of Directs
Developer Fee $393,000 $16,000 4.0% of Directs
Marketing/Lease-Up - Residential $60,000 $2,500 Allowance Marketing/Lease-Up - Commercial $39,000 $2,000 $7.50 /SF GBA-Retail Contingency $185,000 $8,000 5.0% of Indirects
Total Indirect Costs $3,921,000 $163,000 39.9% of Directs III. Financing Costs(4) $983,000 $41,000 10.0% of Directs IV. Total Development Costs (5) $14,734,000 $614,000 $578 Per SF GBA (1) Excludes the payment of prevailing wages.
(2) Estimated allowance; not verified by KMA or the City of Del Mar. (3) Per the City of Del Mar, includes building permit fee, construction license tax, RTCIP, SMIP fee and school district fees; see Worksheet 1.
(4) Allowance for loan fees, interest during construction, and interest during lease-up. (5) Excludes acquisition costs.

Comments
2148 and 2236 Jimmy Durante Boulevard
NC Zone
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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CURRENT ZONING @
20 DU/ACRE TABLE B-3

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Gross Scheduled Income (GSI)
# Units $/SF $/Month (1) Annual # Units $/SF $/Month (1) Annual A. Market-Rate
Studio 360 SF 5 $5.25 $1,900 $114,000 3 $5.25 $1,900 $68,000 One Bedroom 627 SF 14 $5.00 $3,100 $521,000 14 $5.00 $3,100 $521,000 Two Bedroom 1,020 SF 2 $4.50 $4,600 $110,000 2 $4.50 $4,600 $110,000 Subtotal/Average 601 SF 21 $5.01 $3,000 $745,000 19 $4.99 $3,100 $699,000 B. Affordable
Studio @ 30% AMI 360 SF 0 $1.43 $515 $0 1 $1.43 $515 $6,000 Studio @ 50% AMI 360 SF 1 $2.47 $890 $11,000 1 $2.47 $890 $11,000 Studio @ 60% AMI 360 SF 0 $2.99 $1,077 $0 1 $2.99 $1,077 $13,000 One Bedroom @ 30% AMI 627 SF 0 $0.93 $580 $0 0 $0.93 $580 $0 One Bedroom @ 50% AMI 627 SF 2 $1.61 $1,007 $24,000 1 $1.61 $1,007 $12,000 One Bedroom @ 60% AMI 627 SF 0 $1.95 $1,221 $0 1 $1.95 $1,221 $15,000 Two Bedroom @ 30% AMI 1,020 SF 0 $0.63 $642 $0 0 $0.63 $642 $0 Two Bedroom @ 50% AMI 1,020 SF 0 $1.10 $1,123 $0 0 $1.10 $1,123 $0 Two Bedroom @ 60% AMI 1,020 SF 0 $1.34 $1,363 $0 0 $1.34 $1,363 $0 Subtotal/Average 538 SF 3 $1.90 $972 $35,000 5 $2.09 $950 $57,000 Total/Average 593 SF 24 $4.57 $2,708 $780,000 24 $4.43 $2,625 $756,000 Add: Other Income $100 /Unit/Month $29,000 $100 /Unit/Month $29,000 Total Gross Scheduled Income (GSI) $809,000 $785,000
B. Effective Gross Income
(Less) Vacancy 5.0% of GSI ($40,000) 5.0% of GSI ($39,000) Effective Gross Income (EGI) $769,000 $746,000
C. Operating Expenses
(Less) Operating Expenses $5,500 /Unit/Year ($132,000) $5,500 /Unit/Year ($132,000) (Less) Property Taxes(2) $5,958 /Unit/Year ($143,000) $5,750 /Unit/Year ($138,000) (Less) Replacement Reserves $300 /Unit/Year ($7,000) $300 /Unit/Year ($7,000) Total Operating Expenses $11,750 /Unit/Year ($282,000) $11,542 /Unit/Year ($277,000) 37% of EGI 37% of EGI
D. Net Operating Income (NOI) $487,000 $469,000
NC Zone
NC Zone - 2148 and 2236 Jimmy Durante Boulevard
Maximum Density Bonus
Unit Size
Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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CURRENT ZONING @
20 DU/ACRE TABLE B-3

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
NC Zone
NC Zone - 2148 and 2236 Jimmy Durante Boulevard
Maximum Density Bonus Affordable Housing Mitigation
II. Net Operating Income - Retail
A. Gross Scheduled Income 5,212 SF $4.00 /SF NNN $250,000 $4.00 /SF NNN $250,000 B. (Less) Vacancy 10.0% of GSI ($25,000) 10.0% of GSI ($25,000) C. Effective Gross Income $225,000 $225,000
D. (Less) Unreimbursed Operating Expenses 5.0% of EGI ($11,000) 5.0% of EGI ($11,000) E. Net Operating Income - Retail $214,000 $214,000
III. Total Net Operating Income $701,000 $683,000
(1) See Worksheets 2 to 4 for calculation of affordable rents. (2) Based on capitalized income approach; assumes a 1.10% tax rate and 3.75% cap rate.

Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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20 DU/ACRE
TABLE B-4

RESIDUAL LAND VALUE
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $701,000 $683,000
Capitalization Rate @ 3.75% 3.75%
Capitalized Value Upon Completion $779,000 /Unit $18,693,000 $759,000 /Unit $18,213,000 (Less) Cost of Sale 2.0% of Value ($374,000) 2.0% of Value ($364,000) (Less) Target Developer Profit 10.0% of Value ($1,869,000) 10.0% of Value ($1,821,000) II. Net Sales Proceeds $16,450,000 $16,028,000
III. (Less) Development Costs ($14,734,000) ($14,734,000) IV. Residual Land Value $1,716,000 $1,294,000
Per Unit $72,000 $54,000
Per SF Site $49 $37
NC Zone
2148 and 2236 Jimmy Durante Boulevard
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 52 ends

Feasibility Analysis
NC Zone - NC-2
2148 and 2236 Jimmy Durante Boulevard
Potential Increase @ 29 DU/Acre
Multi-Unit Sites
35 Units, 3 Stories, w/Retail

Page 53 ends

POTENTIAL INCREASE @
TABLE B-5 29 DU/ACRE

PROJECT DESCRIPTION
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 0.80 Acres
II. Gross Building Area (GBA)
Residential
Net Residential 21,162 SF 76%
Circulation/Common Area 6,774 SF 24%
Subtotal Residential 27,936 SF 100%
Retail 5,376 SF
Total GBA 33,312 SF
III. Construction Type / Number of Stories
IV. Unit Mix Unit Size
Studio 10 Units 29% 375 SF
One Bedroom 21 Units 60% 643 SF
Two Bedroom 4 Units 11% 976 SF
Total 35 Units 71% 605 SF
V. Affordability Mix
Market-Rate Units 31 Units 89% 28 Units 80%
Affordable Units
Extremely Low -- 0% 2 Units 6%
Very Low 4 Units 11% 2 Units 6%
Low -- 0% 3 Units 9%
Total Affordable Units 4 Units 11% 7 Units 20%
Total 35 Units 100.0% 35 Units 100.0%
VII Density
Pre-Bonus Density 23 Units 29 Units/Acre
Post-Bonus Density 35 Units 44 Units/Acre
VII. Parking
Type
Surface 19 Spaces
Tuck-under 23 Spaces
Total 42 Spaces
Number of Spaces
Residential 24 Spaces 0.7 Spaces/Unit
Retail 18 Spaces 1.0 Spaces/300 SF
Total 42 Spaces
(1) Assumes at least 15% of pre-density bonus housing units are Very Low. All density bonus calculations resulting in a fraction are rounded up to the next whole number.
(2) Reflects Affordable Housing Mitigation requirement for developments of 30+ units of at least 20% Low Income with at least two (2) units at Extremely Low and two (2) units at Very Low.

Density Bonus (1) Mitigation (2)
NC Zone
2148 and 2236 Jimmy Durante Boulevard
Type V / 2 - 3 Stories
# Units
Maximum Affordable Housing
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL INCREASE @
29 DU/ACRE
TABLE B-6

DEVELOPMENT COSTS
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Direct Costs (1) Total Per Unit
Off-Site Improvements (2) $0 $0 $0 /SF Site
On-Site Improvements/Landscaping (2) $1,394,000 $40,000 $40 /SF Site Parking - Surface $0 $0 Included above
Parking - Tuck-under $460,000 $13,000 $20,000 /Space - Tuck-under Shell Construction - Residential $8,381,000 $239,000 $300 /SF GBA-Residential Shell Construction - Retail $1,075,000 $31,000 $200 /SF GBA-Retail FF&E/Amenities $175,000 $5,000 Allowance
Tenant Improvements $269,000 $8,000 $50 /SF GBA-Retail
Contingency $588,000 $17,000 5.0% of Directs
Total Direct Costs $12,342,000 $353,000 $370 /SF GBA
II. Indirect Costs
Architecture & Engineering $864,000 $25,000 7.0% of Directs Permits & Fees (3) $2,965,000 $94,000 $89 /SF GBA
Legal & Accounting $185,000 $5,000 1.5% of Directs
Taxes & Insurance $185,000 $5,000 1.5% of Directs
Developer Fee $494,000 $14,000 4.0% of Directs
Marketing/Lease-Up - Residential $87,500 $2,500 Allowance Marketing/Lease-Up - Commercial $40,000 $1,000 $7.50 /SF GBA-Retail Contingency $239,000 $7,000 5.0% of Indirects
Total Indirect Costs $5,059,500 $145,000 41.0% of Directs III. Financing Costs(4) $1,234,000 $35,000 10.0% of Directs IV. Total Development Costs (5) $18,635,500 $532,000 $559 Per SF GBA (1) Excludes the payment of prevailing wages.
(2) Estimated allowance; not verified by KMA or the City of Del Mar. (3) Per the City of Del Mar, includes building permit fee, construction license tax, RTCIP, SMIP fee and school district fees; see Worksheet 1.
(4) Allowance for loan fees, interest during construction, and interest during lease-up. (5) Excludes acquisition costs.

NC Zone
2148 and 2236 Jimmy Durante Boulevard
Comments
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL INCRASE @
29 DU/ACRE TABLE B-7

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Gross Scheduled Income (GSI)
# Units $/SF $/Month (1) Annual # Units $/SF $/Month (1) Annual A. Market-Rate
Studio 375 SF 9 $5.25 $2,000 $216,000 6 $5.25 $2,000 $144,000 One Bedroom 643 SF 19 $5.00 $3,200 $730,000 18 $5.00 $3,200 $691,000 Two Bedroom 976 SF 4 $4.50 $4,400 $211,000 3 $4.50 $4,400 $158,000 Subtotal/Average 629 SF 31 $5.17 $3,100 $1,157,000 28 $4.82 $3,000 $993,000 B. Affordable
Studio @ 30% AMI 375 SF 0 $1.37 $515 $0 1 $1.37 $515 $6,000 Studio @ 50% AMI 375 SF 1 $2.37 $890 $11,000 0 $2.37 $890 $0 Studio @ 60% AMI 375 SF 0 $2.87 $1,077 $0 0 $2.87 $1,077 $0 One Bedroom @ 30% AMI 643 SF 0 $0.90 $580 $0 1 $0.90 $580 $7,000 One Bedroom @ 50% AMI 643 SF 2 $1.57 $1,007 $24,000 2 $1.57 $1,007 $24,000 One Bedroom @ 60% AMI 643 SF 0 $1.90 $1,221 $0 2 $1.90 $1,221 $29,000 Two Bedroom @ 30% AMI 976 SF 0 $0.66 $642 $0 0 $0.66 $642 $0 Two Bedroom @ 50% AMI 976 SF 1 $1.15 $1,123 $13,000 0 $1.15 $1,123 $0 Two Bedroom @ 60% AMI 976 SF 0 $1.40 $1,363 $0 1 $1.40 $1,363 $16,000 Subtotal/Average 659 SF 4 $1.66 $1,000 $48,000 7 $1.51 $976 $82,000 Total/Average 605 SF 35 $4.75 $2,869 $1,205,000 35 $4.23 $2,560 $1,075,000 Add: Other Income $100 /Unit/Month $42,000 $100 /Unit/Month $42,000 Total Gross Scheduled Income (GSI) $1,247,000 $1,117,000 B. Effective Gross Income
(Less) Vacancy 5.0% of GSI ($62,000) 5.0% of GSI ($56,000) Effective Gross Income (EGI) $1,185,000 $1,061,000
C. Operating Expenses
(Less) Operating Expenses $5,500 /Unit/Year ($193,000) $5,500 /Unit/Year ($193,000) (Less) Property Taxes(2) $6,343 /Unit/Year ($223,000) $5,543 /Unit/Year ($194,000) (Less) Replacement Reserves $300 /Unit/Year ($11,000) $300 /Unit/Year ($11,000) Total Operating Expenses $12,171 /Unit/Year ($427,000) $11,371 /Unit/Year ($398,000) 36% of EGI 38% of EGI
D. Net Operating Income (NOI) $758,000 $663,000
Unit Size
NC Zone
NC Zone - 2148 and 2236 Jimmy Durante Boulevard
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL INCRASE @
29 DU/ACRE TABLE B-7

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
NC Zone
NC Zone - 2148 and 2236 Jimmy Durante Boulevard
Maximum Density Bonus Affordable Housing Mitigation
II. Net Operating Income - Retail
A. Gross Scheduled Income 5,376 SF $4.00 /SF NNN $258,000 $4.00 /SF NNN $258,000 B. (Less) Vacancy 10.0% of GSI ($26,000) 10.0% of GSI ($26,000) C. Effective Gross Income $232,000 $232,000
D. (Less) Unreimbursed Operating Expenses 5.0% of EGI ($12,000) 5.0% of EGI ($12,000) E. Net Operating Income - Retail $220,000 $220,000
III. Total Net Operating Income $978,000 $883,000
(1) See Worksheets 2 to 4 for calculation of affordable rents. (2) Based on capitalized income approach; assumes a 1.10% tax rate and 3.75% cap rate.

Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 57 ends

POTENTIAL INCREASE @
29 DU/ACRE
TABLE B-8

RESIDUAL LAND VALUE
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $978,000 $883,000
Capitalization Rate @ 3.75% 3.75%
Capitalized Value Upon Completion $746,000 /Unit $26,080,000 $673,000 /Unit $23,547,000 (Less) Cost of Sale 2.0% of Value ($522,000) 2.0% of Value ($471,000) (Less) Target Developer Profit 10.0% of Value ($2,608,000) 10.0% of Value ($2,355,000) II. Net Sales Proceeds $22,950,000 $20,721,000
III. (Less) Development Costs ($18,635,500) ($18,635,500) IV. Residual Land Value $4,314,500 $2,085,500
Per Unit $123,000 $60,000
Per SF Site $124 $60
NC Zone
2148 and 2236 Jimmy Durante Boulevard
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 58 ends

Feasibility Analysis
CC Zone - CC-1
Camino Del Mar & 10th Street
Zoning @ 20 DU/Acre
Multi-Unit Sites
14 Units

Page 59 ends

ZONING @
TABLE C-1 20 DU/ACRE

PROJECT DESCRIPTION
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 0.44 Acres
II. Gross Building Area (GBA)
Residential
Net Residential 7,056 SF 91%
Circulation/Common Area 700 SF 9%
Subtotal Residential 7,756 SF 100%
Commercial 0 SF
Total GBA 7,756 SF
III. Construction Type / Number of Stories
IV. Unit Mix Unit Size
One Bedroom 14 Units 504 SF
V. Affordability Mix
Market-Rate Units 12 Units 86% 11 Units 79%
Affordable Units
Extremely Low -- 0% --- 0%
Very Low 2 Units 14% 2 Units 14%
Low -- 0% 1 Unit 7%
Total Affordable Units 2 Units 14% 3 Units 21%
Total 14 Units 100% 14 Units 100%
VI. Density
Pre-Bonus Density 9 Units 20 Units/Acre
Post-Bonus Density 14 Units 32 Units/Acre
VII. Parking
Type
Surface 18 Spaces
Number of Spaces
Residential 18 Spaces 1.3 Spaces/Unit
Commercial 0 Spaces
Total 18 Spaces
(1) Assumes at least 15% of pre-density bonus housing units are Very Low. All density bonus calculations resulting in a fraction are rounded up to the next whole number.
(2) Reflects Affordable Housing Mitigation requirement for developments of 10-19 units of at least 20% Low Income with at least one (1) unit at Very Low. Assumes one (1) additional unit at Very Low to achieve maximum density bonus.

Density Bonus (1) Mitigation (2)
CC Zone
Camino Del Mar & 10th Street
Type V - 2 Stories
# Units
Maximum Affordable Housing
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 60 ends

ZONING @
TABLE C-2 20 DU/ACRE

DEVELOPMENT COSTS
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Direct Costs (1) Total Per Unit
Off-Site Improvements (2) $0 $0 $0 Per SF Site
On-Site Improvements/Landscaping (2) $767,000 $55,000 $40 Per SF Site Parking - Surface $0 $0 Included above
Shell Construction $2,327,000 $166,000 $300 Per SF GBA
FF&E/Amenities $70,000 $5,000 Allowance
Contingency $158,000 $11,000 5.0% of Directs
Total Direct Costs $3,322,000 $237,000 $428 Per SF GBA
II. Indirect Costs
Architecture & Engineering $233,000 $17,000 7.0% of Directs Permits & Fees (3) $705,000 $50,000 $91 Per SF GBA
Legal & Accounting $50,000 $4,000 1.5% of Directs
Taxes & Insurance $50,000 $4,000 1.5% of Directs
Developer Fee $133,000 $10,000 4.0% of Directs
Marketing/Lease-Up $35,000 $2,500 Allowance
Contingency $60,000 $4,000 5.0% of Indirects
Total Indirect Costs $1,266,000 $90,000 38.1% of Directs III. Financing Costs(4) $332,000 $24,000 10.0% of Directs IV. Total Development Costs (5) $4,920,000 $351,000 $634 Per SF GBA (1) Excludes the payment of prevailing wages.
(2) Estimated allowance; not verified by KMA or the City of Del Mar. (3) Per the City of Del Mar, includes building permit fee, construction license tax, RTCIP, SMIP fee and school district fees; see Worksheet 1.
(4) Allowance for loan fees, interest during construction, and interest during lease-up. (5) Excludes acquisition costs.

CC Zone
Camino Del Mar & 10th Street
Comments
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 61 ends

ZONING @
TABLE C-3 20 DU/ACRE

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Gross Scheduled Income (GSI)
# Units $/SF $/Month (1) Annual # Units $/SF $/Month (1) Annual A. Market-Rate
One Bedroom 504 SF 12 $5.00 $2,500 $360,000 11 $5.00 $2,500 $330,000 B. Affordable
One Bedroom @ 30% AMI 504 SF 0 $1.15 $580 $0 0 $1.15 $580 $0 One Bedroom @ 50% AMI 504 SF 2 $2.00 $1,007 $24,000 2 $2.00 $1,007 $24,000 One Bedroom @ 60% AMI 504 SF 0 $2.42 $1,221 $0 1 $2.42 $1,221 $15,000 Subtotal/Average 504 SF 2 $2.00 $1,000 $24,000 3 $2.14 $1,083 $39,000 C. Total/Average 504 SF 14 $4.54 $2,286 $384,000 14 $4.36 $2,196 $369,000 Add: Other Income $100 /Unit/Month $17,000 $100 /Unit/Month $17,000 D. Total Gross Scheduled Income (GSI) $401,000 $386,000 II. Effective Gross Income
(Less) Vacancy 5.0% of GSI ($20,000) 5.0% of GSI ($19,000) Effective Gross Income (EGI) $381,000 $367,000
III. Operating Expenses
(Less) Operating Expenses $5,750 /Unit/Year ($81,000) $5,750 /Unit/Year ($81,000) (Less) Property Taxes $4,786 /Unit/Year (2) ($67,000) $4,571 /Unit/Year (2) ($64,000) (Less) Replacement Reserves $300 /Unit/Year ($4,000) $300 /Unit/Year ($4,000) Total Operating Expenses $10,857 /Unit/Year ($152,000) $10,643 /Unit/Year ($149,000) 40% of EGI 41% of EGI
IV. Net Operating Income (NOI) $229,000 $218,000
(1) See Worksheets 2 to 4 for calculation of affordable rents. (2) Based on capitalized income approach; assumes a 1.10% tax rate and 3.75% cap rate.

CC Zone
Camino Del Mar & 10th Street
Maximum Density Bonus Affordable Housing Mitigation
Unit Size
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 62 ends

ZONING @
TABLE C-4 20 DU/ACRE

RESIDUAL LAND VALUE
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $229,000 $218,000
Capitalization Rate @ 3.75% 3.75%
Capitalized Value Upon Completion $436,000 /Unit $6,107,000 $415,000 /Unit $5,813,000 (Less) Cost of Sale 2.0% of Value ($122,000) 2.0% of Value ($116,000) (Less) Target Developer Profit 10.0% of Value ($611,000) 10.0% of Value ($581,000) II. Net Sales Proceeds $5,374,000 $5,116,000
(Less) Development Costs ($4,920,000) ($4,920,000)
III. Residual Land Value $454,000 $196,000
Per Unit $32,000 $14,000
Per SF Site $24 $10
CC Zone
Camino Del Mar & 10th Street
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 63 ends

CC Zone - CC-2
Potential Increase @ 55 DU/Acre
Multi-Unit Sites
Feasibility Analysis
Camino Del Mar & 10th Street
37 Units

Page 64 ends

POTENTIAL INCREASE @
TABLE C-5 55 DU/ACRE

PROJECT DESCRIPTION
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 0.44 Acres
II. Gross Building Area (GBA)
Residential
Net Residential 16,591 SF 71%
Circulation/Common Area 6,677 SF 29%
Subtotal Residential 23,268 SF 100%
Commercial 0 SF
Total GBA 23,268 SF
III. Construction Type / Number of Stories
IV. Unit Mix Unit Size
Studio 16 Units 381 SF
One Bedroom 21 Units 500 SF
Total 37 Units 448 SF
V. Affordability Mix
Market-Rate Units 33 Units 89% 29 Units 78%
Affordable Units
Extremely Low -- 0% 2 Units 5%
Very Low 4 Units 11% 2 Units 5%
Low -- 0% 4 Units 11%
Total Affordable Units 4 Units 11% 8 Units 22%
Total 37 Units 100% 37 Units 100%
VI. Density
Pre-Bonus Density 24 Units 55 Units/Acre
Post-Bonus Density 36 Units 83 Units/Acre
VII. Parking
Type
Surface On-site 35 Spaces
City Hall Off-Site 2 Spaces
Total 37 Spaces
Number of Spaces
Residential 37 Spaces 1.0 Spaces/Unit
Commercial 0 Spaces
Total 37 Spaces
(1) Assumes at least 15% of pre-density bonus housing units are Very Low. All density bonus calculations resulting in a fraction are rounded up to the next whole number.
(2) Reflects Affordable Housing Mitigation requirement for developments of 30+ units of at least 20% Low Income with at least two (2) unit at Extremely Low and two (2) units at Very Low.

Density Bonus (1) Mitigation (2)
CC Zone - Potential Increase
Camino Del Mar & 10th Street
Type V - 2-3 Stories
# Units
Maximum Affordable Housing
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 65 ends

POTENTIAL INCREASE @
55 DU/ACRE
TABLE C-6

DEVELOPMENT COSTS
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Direct Costs (1) Total Per Unit
Off-Site Improvements (2) $0 $0 $0 Per SF Site
On-Site Improvements/Landscaping (2) $767,000 $21,000 $40 Per SF Site Parking - Surface $0 $0 Included above
Shell Construction $6,399,000 $173,000 $275 Per SF GBA
FF&E/Amenities $185,000 $5,000 Allowance
Contingency $368,000 $10,000 5.0% of Directs
Total Direct Costs $7,719,000 $209,000 $332 Per SF GBA
II. Indirect Costs
Architecture & Engineering $540,000 $15,000 7.0% of Directs Permits & Fees (3) $2,103,000 $57,000 $90 Per SF GBA
Legal & Accounting $116,000 $3,000 1.5% of Directs
Taxes & Insurance $116,000 $3,000 1.5% of Directs
Developer Fee $309,000 $8,000 4.0% of Directs
Marketing/Lease-Up $93,000 $2,500 Allowance
Contingency $164,000 $4,000 5.0% of Indirects
Total Indirect Costs $3,441,000 $93,000 44.6% of Directs III. Financing Costs(4) $772,000 $21,000 10.0% of Directs IV. Total Development Costs (5) $11,932,000 $322,000 $513 Per SF GBA (1) Excludes the payment of prevailing wages.
(2) Estimated allowance; not verified by KMA or the City of Del Mar. (3) Per the City of Del Mar, includes building permit fee, construction license tax, RTCIP, SMIP fee and school district fees; see Worksheet 1.
(4) Allowance for loan fees, interest during construction, and interest during lease-up. (5) Excludes acquisition costs.

CC Zone - Potential Increase
Camino Del Mar & 10th Street
Comments
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL INCREASE @
55 DU/ACRE TABLE C-7

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Gross Scheduled Income (GSI)
# Units $/SF $/Month (1) Annual # Units $/SF $/Month (1) Annual A. Market-Rate
Studio 381 SF 14 $5.25 $2,000 $336,000 13 $5.25 $2,000 $312,000 One Bedroom 500 SF 19 $5.00 $2,500 $570,000 16 $5.00 $2,500 $480,000 Total 448 SF 33 $5.10 $2,288 $906,000 29 $5.08 $2,276 $792,000 B. Affordable
Studio @ 30% AMI 381 SF 0 $1.35 $515 $0 1 $1.35 $515 $6,000 Studio @ 50% AMI 381 SF 2 $2.34 $890 $21,000 1 $2.34 $890 $11,000 Studio @ 60% AMI 381 SF 0 $2.83 $1,077 $0 2 $2.83 $1,077 $26,000 One Bedroom @ 30% AMI 500 SF 0 $1.16 $580 $0 1 $1.16 $580 $7,000 One Bedroom @ 50% AMI 500 SF 2 $2.01 $1,007 $24,000 1 $2.01 $1,007 $12,000 One Bedroom @ 60% AMI 500 SF 0 $2.44 $1,221 $0 2 $2.44 $1,221 $29,000 Subtotal/Average 448 SF 4 $1.01 $938 $45,000 8 $1.01 $948 $91,000 C. Total/Average 448 SF 37 $4.78 $2,142 $951,000 37 $4.44 $1,989 $883,000 Add: Other Income $100 /Unit/Month $44,000 $100 /Unit/Month $44,000 D. Total Gross Scheduled Income (GSI) $995,000 $927,000 II. Effective Gross Income
(Less) Vacancy 5.0% of GSI ($50,000) 5.0% of GSI ($46,000) Effective Gross Income (EGI) $945,000 $881,000
III. Operating Expenses
(Less) Operating Expenses $5,750 /Unit/Year ($213,000) $5,750 /Unit/Year ($213,000) (Less) Property Taxes $4,432 /Unit/Year (2) ($163,000) $4,027 /Unit/Year (2) ($149,000) (Less) Replacement Reserves $300 /Unit/Year ($11,000) $300 /Unit/Year ($11,000) Total Operating Expenses $10,486 /Unit/Year ($387,000) $10,081 /Unit/Year ($373,000) 41% of EGI 42% of EGI
IV. Net Operating Income (NOI) $558,000 $508,000
(1) See Worksheets 2 to 4 for calculation of affordable rents. (2) Based on capitalized income approach; assumes a 1.10% tax rate and 3.75% cap rate.

Unit Size
CC Zone - Potential Increase
Camino Del Mar & 10th Street
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL INCREASE @
55 DU/ACRE
TABLE C-8

RESIDUAL LAND VALUE
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $558,000 $508,000
Capitalization Rate @ 3.75% 3.75%
Capitalized Value Upon Completion $401,000 /Unit $14,880,000 $366,000 /Unit $13,547,000 (Less) Cost of Sale 2.0% of Value ($298,000) 2.0% of Value ($271,000) (Less) Target Developer Profit 10.0% of Value ($1,488,000) 10.0% of Value ($1,355,000) II. Net Sales Proceeds $13,094,000 $11,921,000
(Less) Development Costs ($11,932,000) ($11,932,000)
III. Residual Land Value $1,162,000 ($11,000)
Per Unit $31,000 $0
Per SF Site $61 ($1)
CC Zone - Potential Increase
Camino Del Mar & 10th Street
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 68 ends

Feasibility Analysis
CC Zone - CC-3
Camino Del Mar & 10th Street
Potential Increase @ 55 DU/Acre
Multi-Unit Sites
35 Units, 3 Stories w/Commercial Space

Page 69 ends

POTENTIAL INCREASE @
TABLE C-9 55 DU/ACRE

PROJECT DESCRIPTION
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 0.44 Acres
II. Gross Building Area (GBA)
Residential
Net Residential 14,807 SF 62%
Circulation/Common Area 9,031 SF 38%
Subtotal Residential 23,838 SF 100%
Commercial 3,516 SF
Total GBA 23,838 SF
III. Construction Type / Number of Stories
IV. Unit Mix Unit Size
Studio 23 Units 66% 383 SF
One Bedroom 12 Units 34% 500 SF
Total 35 Units 100% 423 SF
V. Affordability Mix
Market-Rate Units 31 Units 89% 28 Units 80%
Affordable Units
Extremely Low -- 0% 2 Units 6%
Very Low 4 Units 11% 2 Units 6%
Low -- 0% 3 Units 9%
Total Affordable Units 4 Units 11% 7 Units 20%
Total 35 Units 100% 35 Units 100%
VI. Density
Pre-Bonus Density 23 Units 55 Units/Acre
Post-Bonus Density 35 Units 83 Units/Acre
VII. Parking
Type
Surface On-site 35 Spaces
Total 35 Spaces
Number of Spaces
Residential 35 Spaces 1.0 Spaces/Unit
Commercial 0 Spaces
Total 35 Spaces
(1) Assumes at least 15% of pre-density bonus housing units are Very Low. All density bonus calculations resulting in a fraction are rounded up to the next whole number.
(2) Reflects Affordable Housing Mitigation requirement for developments of 30+ units of at least 20% Low Income with at least two (2) unit at Extremely Low and two (2) units at Very Low.

Density Bonus (1) Mitigation (2)
CC Zone - Potential Increase
Camino Del Mar & 10th Street
Type V - 2-3 Stories
# Units
Maximum Affordable Housing
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL INCREASE @
55 DU/ACRE
TABLE C-10

DEVELOPMENT COSTS
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Direct Costs (1) Total Per Unit
Off-Site Improvements (2) $0 $0 $0 Per SF Site
On-Site Improvements/Landscaping (2) $767,000 $22,000 $40 Per SF Site Parking - Surface $0 $0 Included above
Shell Construction $6,555,000 $187,000 $275 Per SF GBA
FF&E/Amenities $175,000 $5,000 Allowance
Contingency $375,000 $11,000 5.0% of Directs
Total Direct Costs $7,872,000 $225,000 $330 Per SF GBA
II. Indirect Costs
Architecture & Engineering $551,000 $16,000 7.0% of Directs Permits & Fees (3) $2,147,000 $61,000 $90 Per SF GBA
Legal & Accounting $118,000 $3,000 1.5% of Directs
Taxes & Insurance $118,000 $3,000 1.5% of Directs
Developer Fee $315,000 $9,000 4.0% of Directs
Marketing/Lease-Up $88,000 $2,500 Allowance
Contingency $167,000 $5,000 5.0% of Indirects
Total Indirect Costs $3,504,000 $100,000 44.5% of Directs III. Financing Costs(4) $787,000 $22,000 10.0% of Directs IV. Total Development Costs (5) $12,163,000 $348,000 $510 Per SF GBA (1) Excludes the payment of prevailing wages.
(2) Estimated allowance; not verified by KMA or the City of Del Mar. (3) Per the City of Del Mar, includes building permit fee, construction license tax, RTCIP, SMIP fee and school district fees; see Worksheet 1.
(4) Allowance for loan fees, interest during construction, and interest during lease-up. (5) Excludes acquisition costs.

CC Zone - Potential Increase
Camino Del Mar & 10th Street
Comments
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 71 ends

POTENTIAL INCREASE @
55 DU/ACRE TABLE C-11

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Gross Scheduled Income (GSI)
# Units $/SF $/Month (1) Annual # Units $/SF $/Month (1) Annual A. Market-Rate
Studio 383 SF 20 $5.25 $2,000 $480,000 18 $5.25 $2,000 $432,000 One Bedroom 500 SF 11 $5.00 $2,500 $330,000 10 $5.00 $2,500 $300,000 Total 423 SF 31 $5.15 $2,177 $810,000 28 $5.15 $2,179 $732,000 B. Affordable
Studio @ 30% AMI 383 SF 0 $1.34 $515 $0 1 $1.34 $515 $6,000 Studio @ 50% AMI 383 SF 3 $2.32 $890 $32,000 1 $2.32 $890 $11,000 Studio @ 60% AMI 383 SF 0 $2.81 $1,077 $0 2 $2.81 $1,077 $26,000 One Bedroom @ 30% AMI 500 SF 0 $1.16 $580 $0 1 $1.16 $580 $7,000 One Bedroom @ 50% AMI 500 SF 1 $2.01 $1,007 $12,000 1 $2.01 $1,007 $12,000 One Bedroom @ 60% AMI 500 SF 0 $2.44 $1,221 $0 1 $2.44 $1,221 $15,000 Subtotal/Average 423 SF 4 $0.50 $917 $44,000 7 $0.80 $917 $77,000 C. Total/Average 423 SF 35 $4.81 $2,033 $854,000 35 $4.55 $1,926 $809,000 Add: Other Income $100 /Unit/Month $42,000 $100 /Unit/Month $42,000 D. Total Gross Scheduled Income (GSI) $896,000 $851,000 II. Effective Gross Income
(Less) Vacancy 5.0% of GSI ($45,000) 5.0% of GSI ($43,000) Effective Gross Income (EGI) $851,000 $808,000
III. Operating Expenses
(Less) Operating Expenses $5,750 /Unit/Year ($201,000) $5,750 /Unit/Year ($201,000) (Less) Property Taxes $4,143 /Unit/Year (2) ($145,000) $3,857 /Unit/Year (2) ($135,000) (Less) Replacement Reserves $300 /Unit/Year ($11,000) $300 /Unit/Year ($11,000) Total Operating Expenses $10,200 /Unit/Year ($357,000) $9,914 /Unit/Year ($347,000) 42% of EGI 43% of EGI
IV. Net Operating Income (NOI) $494,000 $461,000
(1) See Worksheets 2 to 4 for calculation of affordable rents. (2) Based on capitalized income approach; assumes a 1.10% tax rate and 3.75% cap rate.

Unit Size
CC Zone - Potential Increase
Camino Del Mar & 10th Street
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 72 ends

POTENTIAL INCREASE @
55 DU/ACRE TABLE C-11

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
CC Zone - Potential Increase
Camino Del Mar & 10th Street
Maximum Density Bonus Affordable Housing Mitigation
II. Net Operating Income - Retail
A. Gross Scheduled Income 3,516 SF $4.00 /SF NNN $169,000 $4.00 /SF NNN $169,000 B. (Less) Vacancy 10.0% of GSI ($17,000) 10.0% of GSI ($17,000) C. Effective Gross Income $152,000 $152,000
D. (Less) Unreimbursed Operating Expenses 5.0% of EGI ($8,000) 5.0% of EGI ($8,000) E. Net Operating Income - Retail $144,000 $144,000
III. Total Net Operating Income $638,000 $605,000
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 73 ends

POTENTIAL INCREASE @
55 DU/ACRE
TABLE C-12

RESIDUAL LAND VALUE
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $638,000 $605,000
Capitalization Rate @ 3.75% 3.75%
Capitalized Value Upon Completion $486,000 /Unit $17,013,000 $461,000 /Unit $16,133,000 (Less) Cost of Sale 2.0% of Value ($340,000) 2.0% of Value ($323,000) (Less) Target Developer Profit 10.0% of Value ($1,701,000) 10.0% of Value ($1,613,000) II. Net Sales Proceeds $14,972,000 $14,197,000
(Less) Development Costs ($12,163,000) ($12,163,000)
III. Residual Land Value $2,809,000 $2,034,000
Per Unit $80,000 $58,000
Per SF Site $147 $106
CC Zone - Potential Increase
Camino Del Mar & 10th Street
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 74 ends

Feasibility Analysis
NC Zone - 2010 JDB-1
2010 Jimmy Durante Boulevard
Current Zoning
Multi-Unit Sites
42 Units

Page 75 ends

CURRENT ZONING
TABLE D-1 42 UNITS

PROJECT DESCRIPTION
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 2.12 Acres
II. Gross Building Area (GBA)
A. Renovated Building Area
Existing Office
Net Office 39,537 SF 90%
Circulation/Common Area 4,393 SF 10%
Subtotal Office 43,930 SF 100%
B. New Residential Buildings
Net Residential 24,696 SF 78%
Circulation/Common Area (1) 6,860 SF 22%
Total New Residential GBA 31,556 SF 100%
C. Total GBA 75,486 SF
III. Construction Type / Number of Stories
IV. Unit Mix Unit Size
A. Units in New Building
Studio 0 Units 0% 0 SF
One Bedroom 42 Units 100% 588 SF
Total 42 Units 100% 588 SF
B. Total 42 Units 100% 588 SF
V. Affordability Mix
Market-Rate Units 34 Units 81%
Affordable Units
Extremely Low 0 Units 0%
Very Low 8 Units 19%
Low 0 Units 0%
Total Affordable Units 8 Units 19%
Total 42 Units 100%
VI. Parking
A. Number of Spaces
Surface (existing spaces to remain) 78 Spaces 2.0 Spaces/1,000 SF Tuck-Under - Residential 42 Spaces 1.0 Spaces/Unit
Total 120 Spaces
(1) Includes hallways, elevators, stairs, and 1,780 SF of lobby space.

NC Zone
2010 Jimmy Durante Boulevard
Type V over Type I - 4 Stories
# Units
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 76 ends

CURRENT ZONING
TABLE D-2 42 UNITS

DEVELOPMENT COSTS
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Direct Costs (1) Total Per Unit
Off-Site Improvements (2) $0 $0 $0 /SF Site
On-Site Improvements/Landscaping (2) $3,694,000 $88,000 $40 /SF Site Parking - Surface $0 $0 Included above
Parking - Tuck-Under $840,000 $20,000 $20,000 /Space - Tuck-Under Shell Construction - New Residential $8,678,000 $207,000 $275 /SF GBA - New Residential Shell Construction - Renovated Office $879,000 $21,000 $20 /SF GBA - Office FF&E/Amenities $210,000 $5,000 Allowance
Tenant Improvements $791,000 $19,000 $20 /SF Net - Office Contingency $715,000 $17,000 5.0% of Directs
Total Direct Costs $15,807,000 $376,000 $209 /SF GBA
II. Indirect Costs
Architecture & Engineering $1,106,000 $26,000 7.0% of Directs Permits & Fees (3) $2,899,000 $69,000 $92 Per SF Residential GBA (4) Legal & Accounting $237,000 $6,000 1.5% of Directs
Taxes & Insurance $237,000 $6,000 1.5% of Directs
Developer Fee $632,000 $15,000 4.0% of Directs
Marketing/Lease-Up - Residential $105,000 $2,500 Allowance Marketing/Lease-Up - Office $132,000 $3,000 $3 /SF GBA-Office Contingency $261,000 $6,000 5.0% of Indirects
Total Indirect Costs $5,609,000 $134,000 35.5% of Directs III. Financing Costs(5) $1,581,000 $38,000 10.0% of Directs IV. Total Development Costs $22,997,000 $548,000 $305 Per SF GBA V. Acquisition Costs (6)
Acquisition $19,769,000 $471,000 $500 Per SF RBA - Existing Building Demolition $0 $0 $0 Per SF RBA - Existing Building
Total Acquisition Costs $19,769,000 $471,000 $500 Per SF RBA - Existing Building VI. Total Development Costs w/Acquisition $42,766,000 $1,018,000 $567 Per SF GBA (1) Excludes the payment of prevailing wages.
(2) Estimated allowance; not verified by KMA or the City of Del Mar. (3) Per the City of Del Mar, includes building permit fee, construction license tax, RTCIP, SMIP fee and school district fees; see Worksheet 1.
(4) Excludes office building area.
(5) Allowance for loan fees, interest during construction, and interest during lease-up. (6) Assumes redevelopment of property requires the acquisition and renovation of existing 45,200 SF office building, with 39,537 SF rentable building area (RBA).

NC Zone
2010 Jimmy Durante Boulevard
Comments
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 77 ends

CURRENT ZONING
42 UNITS TABLE D-3

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Net Operating Income - Residential
# Units $/SF $/Month (1) Annual
A. Gross Scheduled Income
Market-Rate
Studio 0 SF 0 $4.75 $0 $0
One Bedroom 588 SF 34 $4.50 $2,600 $1,061,000
Subtotal/Average 588 SF 34 $4.50 $2,600 $1,061,000
Affordable
Studio @ 30% AMI 0 SF 0 $0.00 $515 $0
Studio @ 50% AMI 0 SF 0 $0.00 $890 $0
Studio @ 60% AMI 0 SF 0 $0.00 $1,077 $0
One Bedroom @ 30% AMI 0 SF 0 $0.00 $580 $0
One Bedroom @ 50% AMI 588 SF 8 $1.71 $1,007 $97,000
One Bedroom @ 60% AMI 0 SF 0 $0.00 $1,221 $0
Subtotal/Average 588 SF 8 $1.71 $1,010 $97,000
Total/Average 588 SF 42 $3.91 $2,298 $1,158,000
Add: Other Income $100 /Unit/Month $50,000
Total Gross Scheduled Income (GSI) $1,208,000
B. Effective Gross Income
(Less) Vacancy 5.0% of GSI ($60,000)
Effective Gross Income (EGI) $1,148,000
C. Operating Expenses
(Less) Operating Expenses $5,750 /Unit/Year ($242,000)
(Less) Property Taxes (2) $4,833 /Unit/Year ($202,000)
(Less) Replacement Reserves $300 /Unit/Year ($13,000)
Total Operating Expenses $10,905 /Unit/Year ($457,000)
40% of EGI
D. Net Operating Income (NOI) - Residential $691,000
II. Net Operating Income - Office
A. Gross Scheduled Income 39,537 SF $4.00 /SF NNN $1,898,000 B. (Less) Vacancy 7.5% of GSI ($142,000)
C. Effective Gross Income $1,756,000
D. (Less) Unreimbursed Operating Expenses 5.0% of EGI ($88,000) E. Net Operating Income - Office $1,668,000
III. Total Net Operating Income $2,359,000
(1) See Worksheets 2 to 4 for calculation of affordable rents. (2) Based on capitalized income approach; assumes a 1.10% tax rate and 3.75% cap rate.

Unit Size
NC Zone
2010 Jimmy Durante Boulevard
Current Zoning
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 78 ends

CURRENT ZONING
TABLE D-4 42 UNITS

RESIDUAL VALUE
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Capitalized Value Upon Completion
Stabilized Net Operating Income - Residential $691,000
Capitalization Rate @ 3.75%
Capitalized Value Upon Completion $438,000 /Unit $18,427,000 Stabilized Net Operating Income - Office $1,668,000
Capitalization Rate @ 5.75%
Capitalized Value Upon Completion $29,009,000
Total Value Upon Completion $47,436,000
(Less) Cost of Sale 2.0% of Value ($949,000)
(Less) Target Developer Profit - Residential 10.0% of Value ($1,843,000) (Less) Target Developer Profit - Office 20.0% of Value (1) ($1,848,000) II. Net Sales Proceeds $42,796,000
(Less) Development Costs - excluding Acquisition Costs ($22,997,000) III. Residual Value $19,799,000
Per Unit $471,000
Per SF Site $214
(Less) Acquisition Costs ($19,769,000)
IV. Financing Surplus/(Deficit) $30,000
Per Unit $1,000
Per SF Site $0
(1) Reflects target developer profit from increase in incremental value of the existing office development.

NC Zone
2010 Jimmy Durante Boulevard
Current Zoning
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 79 ends

Feasibility Analysis
RMS Zone - RMS-1
Multi-Unit Residential Sites
Potential Zoning @ 30 DU/Acre
Multi-Unit Sites
100 Units

Page 80 ends

POTENTIAL ZONING @
30 DU/ACRE TABLE E-1

PROJECT DESCRIPTION
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 2.23 Acres
II. Existing Building to be Demolished
Number of Units 95 Units
Average Unit Size (Gross) 1,300 /SF Unit
Gross Building Area 123,500 SF
III. New Construction Gross Building Area (GBA)
Residential
Net Residential 70,104 SF 99%
Circulation/Common Area 700 SF 1%
Subtotal Residential 70,804 SF 100%
Commercial 0 SF
Total GBA 70,804 SF
IV. Construction Type / Number of Stories
V. Unit Mix Unit Size
One Bedroom 48 Units 48% 509 SF
Two Bedroom 26 Units 26% 738 SF
Three Bedroom 26 Units 26% 1,020 SF
Total/Average 100 Units 100% 701 SF
VI. Affordability Mix
Market-Rate Units 90 Units 90% 80 Units 80%
Affordable Units
Extremely Low -- 0% 2 Units 2%
Very Low 10 Units 10% 8 Units 8%
Low -- 0% 10 Units 10%
Total Affordable Units 10 Units 10% 20 Units 20%
Total 100 Units 100% 100 Units 100%
VII. Density
Pre-Bonus Density 67 Units 30 Units/Acre
Post-Bonus Density 100 Units 45 Units/Acre
VIII. Parking
Type
Surface 35 Spaces 0.4 Spaces/Unit
Private Garages 90 Spaces 0.9 Spaces/Unit
Total 125 Spaces 1.3 Spaces/Unit
(1) Assumes at least 15% of pre-density bonus housing units are Very Low. All density bonus calculations resulting in a fraction are rounded up to the next whole number.
(2) Reflects Affordable Housing Mitigation requirement for developments of 30+ units of at least 20% Low Income with at least two (2) rental units at Extremely Low and two (2) units at Very Low. Assumes six (6) additional units at Very Low to achieve maximum density bonus.

Density Bonus (1) Mitigation (2)
RMS Zone
Multi-Unit Residential Sites
Type V - 2 Stories
# Units
Maximum Affordable Housing
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

Page 81 ends

POTENTIAL ZONING @
30 DU/ACRE
TABLE E-2

DEVELOPMENT COSTS
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Direct Costs (1) Total Per Unit
Off-Site Improvements (2) $0 $0 $0 Per SF Site
On-Site Improvements/Landscaping (2) $3,886,000 $39,000 $40 Per SF Site Parking - Surface $0 $0 Included above
Parking - Private Garages $1,800,000 $18,000 $20,000 Per Space - Garages Shell Construction $19,471,000 $195,000 $275 Per SF GBA FF&E/Amenities $750,000 $7,500 Allowance
Contingency $1,295,000 $13,000 5.0% of Directs
Total Direct Costs $27,202,000 $272,000 $384 Per SF GBA II. Indirect Costs
Architecture & Engineering $1,904,000 $19,000 7.0% of Directs Permits & Fees (3) $6,368,000 $64,000 $90 Per SF GBA
Legal & Accounting $408,000 $4,000 1.5% of Directs
Taxes & Insurance $408,000 $4,000 1.5% of Directs
Developer Fee $1,088,000 $11,000 4.0% of Directs
Marketing/Lease-Up $250,000 $2,500 Allowance
Contingency $521,000 $5,000 5.0% of Indirects
Total Indirect Costs $10,947,000 $109,000 40.2% of Directs III. Financing Costs(4) $2,720,000 $27,000 10.0% of Directs IV. Total Development Costs (5) $40,869,000 $409,000 $577 Per SF GBA V. Acquisition Costs (6)
Acquisition $38,000,000 $380,000 $400,000 Per Unit - Existing Building Demolition $1,235,000 $12,000 $10 Per SF GBA - Existing Building Total Acquisition Costs $39,235,000 $392,000 $318 Per SF GBA - Existing Building VI. Total Development Costs w/Acquisition $80,104,000 $801,000 $1,131 Per SF GBA (1) Excludes the payment of prevailing wages.
(2) Estimated allowance; not verified by KMA or the City of Del Mar. (3) Per the City of Del Mar, includes building permit fee, construction license tax, RTCIP, SMIP fee and school district fees; see Worksheet 1.
(4) Allowance for loan fees, interest during construction, and interest during lease-up. (5) Excludes acquisition costs.
(6) Assumes redevelopment of property requires the acquisition and demolition of an existing 95-unit apartment complex.

Multi-Unit Residential Sites
Comments
RM-South Zone
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL ZONING @
30 DU/ACRE TABLE E-3

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Gross Scheduled Income (GSI)
# Units $/SF $/Month (1) Annual # Units $/SF $/Month (1) Annual A. Market-Rate
One Bedroom 509 SF 43 $5.00 $2,500 $1,290,000 38 $5.00 $2,500 $1,140,000 Two Bedroom 738 SF 23 $4.75 $3,500 $966,000 21 $4.75 $3,500 $882,000 Three Bedroom 1,020 SF 24 $4.25 $4,300 $1,238,000 21 $4.25 $4,300 $1,084,000 Subtotal/Average 703 SF 90 $4.74 $3,200 $3,494,000 80 $4.74 $3,200 $3,106,000 B. Affordable
One Bedroom @ 30% AMI 509 SF 0 $1.14 $580 $0 1 $1.14 $580 $7,000 One Bedroom @ 50% AMI 509 SF 5 $1.98 $1,007 $60,000 4 $1.98 $1,007 $48,000 One Bedroom @ 60% AMI 509 SF 0 $2.40 $1,221 $0 5 $2.40 $1,221 $73,000 Two Bedroom @ 30% AMI 738 SF 0 $0.87 $642 $0 1 $0.87 $642 $8,000 Two Bedroom @ 50% AMI 738 SF 3 $1.52 $1,123 $40,000 2 $1.52 $1,123 $27,000 Two Bedroom @ 60% AMI 738 SF 0 $1.85 $1,363 $0 2 $1.85 $1,363 $33,000 Three Bedroom @ 30% AMI 1,020 SF 0 $0.69 $705 $0 0 $0.69 $705 $0 Three Bedroom @ 50% AMI 1,020 SF 2 $1.22 $1,239 $30,000 2 $1.22 $1,239 $30,000 Three Bedroom @ 60% AMI 1,020 SF 0 $1.48 $1,507 $0 3 $1.48 $1,507 $54,000 Subtotal/Average 680 SF 10 $1.10 $1,083 $130,000 20 $944 $944 $226,000 C. Total/Average 701 SF 100 $4.31 $3,020 $3,624,000 100 $3.96 $2,778 $3,332,000 Add: Other Income $100 /Unit/Month $120,000 $100 /Unit/Month $120,000 D. Total Gross Scheduled Income (GSI) $3,744,000 $3,452,000 II. Effective Gross Income
(Less) Vacancy 5.0% of GSI ($187,000) 5.0% of GSI ($173,000) Effective Gross Income (EGI) $3,557,000 $3,279,000
III. Operating Expenses
(Less) Operating Expenses $5,750 /Unit/Year ($575,000) $5,750 /Unit/Year ($575,000) (Less) Property Taxes $6,690 /Unit/Year (2) ($670,000) $6,072 /Unit/Year (2) ($606,000) (Less) Replacement Reserves $300 /Unit/Year ($30,000) $300 /Unit/Year ($30,000) Total Operating Expenses $12,740 /Unit/Year ($1,275,000) $12,125 /Unit/Year ($1,211,000) 36% of EGI 37% of EGI
IV. Net Operating Income (NOI) $2,282,000 $2,068,000
(1) See Worksheets 2 to 4 for calculation of affordable rents. (2) Based on capitalized income approach; assumes a 1.10% tax rate and 3.75% cap rate.

RM-South Zone
Multi-Unit Residential Sites
Maximum Density Bonus Affordable Housing Mitigation
Unit Size
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL ZONING @
30 DU/ACRE
TABLE E-4

RESIDUAL LAND VALUE AND FINANCING SURPLUS/(DEFICIT)
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $2,282,000 $2,068,000
Capitalization Rate @ 3.75% 3.75%
Capitalized Value Upon Completion $609,000 /Unit $60,853,000 $551,000 /Unit $55,147,000 (Less) Cost of Sale 2.0% of Value ($1,217,000) 2.0% of Value ($1,103,000) (Less) Target Developer Profit 10.0% of Value ($6,085,000) 10.0% of Value ($5,515,000) II. Net Sales Proceeds $53,551,000 $48,529,000
(Less) Development Costs - excluding Acquisition Costs ($40,869,000) ($40,869,000) III. Residual Land Value $12,682,000 $7,660,000
Per Unit $127,000 $77,000
Per SF Site $131 $79
(Less) Acquisition Costs ($39,235,000) ($39,235,000)
IV. Financing Surplus/(Deficit) ($26,553,000) ($31,575,000) Per Unit ($266,000) ($316,000)
Per SF Site ($273) ($325)
RM-South Zone
Multi-Unit Residential Sites
Maximum Density Bonus Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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Feasibility Analysis
Plaza Specific Plan - PSP-1
Potential Zoning
Multi-Unit Sites
14 Units

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POTENTIAL ZONING @
14 UNITS
TABLE F-1

PROJECT DESCRIPTION
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Existing Center Building Area to be Renovated 11,927 SF II. Grosss Building Area (GBA)
Net Residential 9,316 SF 80%
Circulation/Common Area 2,327 SF 20%
Total GBA 11,643 SF 100%
III. Construction Type / Number of Stories Type V / 1 Story (on third level) IV. Unit Mix # Units Unit Size
Studio 1 Unit 7% 479 SF
One Bedroom 8 Units 57% 616 SF
Two Bedroom 5 Units 36% 782 SF
Total 14 Units 100% 665 SF
V. Affordability Mix (1)
Market-Rate Units 11 Units 79%
Affordable Units
Extremely Low -- 0%
Very Low 1 Unit 7%
Low 2 Units 14%
Total Affordable Units 3 Units 21%
Total 14 Units 100%
VI. Parking
Type
23 Spaces 1.6 Spaces/Unit
(1) Reflects Affordable Housing Mitigation requirement for developments of 10-19 units of at least 20% Low Income with at least one (1) unit at Very Low.

Shared with Existing Center
Plaza Specific Plan
Del Mar Plaza Commercial Center
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL ZONING @
14 UNITS TABLE F-2

DEVELOPMENT COSTS
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Direct Costs (1) Total Per Unit
Off-Site Improvements (2) $0 $0 $0 Per SF Site Area
On-Site Improvements/Landscaping (2) $70,000 $5,000 Allowance Parking $0 $0 $0 Per Space
Shell Construction - Adaptive Re-Use $2,911,000 $208,000 $250 Per SF GBA FF&E/Amenities $70,000 $5,000 Allowance
Contingency $153,000 $11,000 5.0% of Directs
Total Direct Costs $3,204,000 $229,000 $275 Per SF GBA
II. Indirect Costs
Architecture & Engineering $224,000 $16,000 7.0% of Directs Permits & Fees (3) $1,041,000 $74,000 $89 Per SF GBA
Legal & Accounting $48,000 $3,000 1.5% of Directs
Taxes & Insurance $48,000 $3,000 1.5% of Directs
Developer Fee $128,000 $9,000 4.0% of Directs
Marketing/Lease-Up $35,000 $2,500 Allowance
Contingency $76,000 $5,000 5.0% of Indirects
Total Indirect Costs $1,600,000 $114,000 49.9% of Directs III. Financing Costs(4) $320,000 $23,000 10.0% of Directs IV. Total Development Costs (5) $5,124,000 $366,000 $440 Per SF GBA V. Acquisition Costs
Acquisition $7,156,000 $511,000 $600 Per SF - Existing Center Demolition $119,000 $9,000 $10 Per SF - Existing Center Total Acquisition Costs $7,275,000 $520,000 $610 Per SF - Existing Center VI. Total Development Costs w/Acquisition $12,399,000 $886,000 $1,065 Per SF GBA (1) Excludes the payment of prevailing wages.
(2) Estimated allowance; not verified by KMA or the City of Del Mar. (3) Per the City of Del Mar, includes building permit fee, construction license tax, RTCIP, SMIP fee and school district fees; see Worksheet 1.
(4) Allowance for loan fees, interest during construction, and interest during lease-up. (5) Excludes acquisition costs.

Plaza Specific Plan
Del Mar Plaza Commercial Center
Comments
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL ZONING @
14 UNITS TABLE F-3

NET OPERATING INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Gross Scheduled Income (GSI)
# Units $/SF $/Month Annual
A. Market-Rate
Studio 479 SF 0 $5.75 $2,800 $0
One Bedroom 616 SF 7 $5.50 $3,400 $286,000
Two Bedroom 782 SF 4 $5.25 $4,100 $197,000
Subtotal/Average 676 SF 11 $5.41 $3,700 $483,000
B. Affordable
Studio @ 30% AMI 479 SF 0 $1.08 $515 $0
Studio @ 50% AMI 479 SF 1 $1.86 $890 $11,000
Studio @ 60% AMI 479 SF 0 $2.25 $1,077 $0
One Bedroom @ 30% AMI 616 SF 0 $0.94 $580 $0
One Bedroom @ 50% AMI 616 SF 0 $1.63 $1,007 $0
One Bedroom @ 60% AMI 616 SF 1 $1.98 $1,221 $15,000
Two Bedroom @ 30% AMI 782 SF 0 $0.82 $642 $0
Two Bedroom @ 50% AMI 782 SF 0 $1.44 $1,123 $0
Two Bedroom @ 60% AMI 782 SF 1 $1.74 $1,363 $16,000
Subtotal/Average 626 SF 3 $1.86 $1,167 $42,000
C. Total/Average 665 SF 14 $5.41 $3,125 $525,000
Add: Other Income $150 /Unit/Month $25,000
D. Total Gross Scheduled Income (GSI) $550,000
II. Effective Gross Income
(Less) Vacancy 5.0% of GSI ($28,000)
Effective Gross Income (EGI) $522,000
III. Operating Expenses
(Less) Operating Expenses $5,750 /Unit/Year ($81,000)
(Less) Property Taxes $7,071 /Unit/Year (2) ($99,000)
(Less) Replacement Reserves $300 /Unit/Year ($4,000)
Total Operating Expenses $13,143 /Unit/Year ($184,000)
35% of EGI
IV. Net Operating Income (NOI) $338,000
(1) See Worksheets 2 to 4 for calculation of affordable rents. (2) Based on capitalized income approach; assumes a 1.10% tax rate and 3.75% cap rate.

Plaza Specific Plan
Del Mar Plaza Commercial Center
Unit Size
Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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POTENTIAL ZONING @
14 UNITS
TABLE F-4

RESIDUAL VALUE AND FINANCING SURPLUS/(DEFICIT)
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $338,000
Capitalization Rate @ 3.75%
Capitalized Value Upon Completion $644,000 /Unit $9,013,000 (Less) Cost of Sale 2.0% of Value ($180,000)
(Less) Target Developer Profit 10.0% of Value ($901,000) II. Net Sales Proceeds $7,932,000
(Less) Development Costs - excluding Acquisition Costs ($5,124,000) III. Residual Value $2,808,000
Per Unit $201,000
(Less) Acquisition Costs ($7,275,000)
IV. Financing Surplus/(Deficit) ($4,467,000)
Per Unit ($319,000)
Plaza Center Specific Plan
Del Mar Plaza Commercial Center
Affordable Housing Mitigation
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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Supporting Worksheets: Technical Analysis

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WORKSHEET 1

ESTIMATE OF PERMITS & FEES
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
PC-1 PC-2 PC-3 NC-1 NC-2 CC-1
807 CAMINO 807 CAMINO 807 CAMINO CAMINO DEL MAR &
DEL MAR DEL MAR DEL MAR 10TH STREET
I. Project Description
Acres 0.3 Acre 0.3 Acre 0.3 Acre 0.8 Acres 0.8 Acres 0.4 Acres Gross Building Area 10,276 SF 11,400 SF 21,594 SF 25,494 SF 33,312 SF 7,756 SF Number of Units 9 Units 16 Units 29 Units 24 Units 35 Units 14 Units II. Estimate of Permits & Fees
Building Permit Fee $82.00 /SF (2) $842,632 $934,800 $1,770,708 $2,090,508 $2,731,584 $635,992 Construction License Tax $0.35 /SF $3,597 $3,990 $7,558 $8,923 $11,659 $2,715 RTCIP $2,583.82 /Unit $23,254 $41,341 $74,931 $62,012 $90,434 $36,173 SMIP Fee (3) $0.10 /1,000 SF $1.03 $1.14 $2.16 $2.55 $3.33 $0.78 School District Fees (4) $3.94 /SF $40,487 $44,916 $85,080 $100,446 $131,249 $30,559 III. Subtotal Permits & Fees $909,971 $1,025,048 $1,938,279 $2,261,891 $2,964,930 $705,439 IV. Add: Contingency @ 0.0% of Subtotal $0 $0 $0 $0 $0 $0 V. Total Permits & Fees $909,971 $1,025,048 $1,938,279 $2,261,891 $2,964,930 $705,439 Per Unit $101,000 $64,000 $67,000 $94,000 $85,000 $50,400 Per SF GBA $89 $90 $90 $89 $89 $91
(1) Estimate does not account for any potential DIF credits for units or building area demolished. (2) Reflects rate for Apartment Houses with Type V (Wood Frame) construction. (3) SMIP = Strong Motion Instrumentation & Seismic Hazard Mapping Fee. Minimum fee of $0.50. (4) Does not apply to units that are under 500 SF in size. (5) Excludes office building area.
2236 AND 2148 JIMMY

DURANTE BOULEVARD
2236 AND 2148 JIMMY

DURANTE BOULEVARD
Source: City of Del Mar Fee Schedules
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023\1/19/2023; ema

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WORKSHEET 1

ESTIMATE OF PERMITS & FEES
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
CC-2 CC-3 2010 JDB-1 RMS-1 (1) PSP-1 (1)
CAMINO DEL MAR & CAMINO DEL MAR & 2010 JIMMY MULTI-UNIT DEL MAR 10TH STREET 10TH STREET DURANTE BLVD RESIDENTIAL SITES PLAZA I. Project Description
Acres 0.4 Acres 0.4 Acres 2.1 Acre 2.2 Acres 0.00 Acres Gross Building Area 23,268 SF 23,838 SF 31,556 SF 70,804 SF 11,643 SF Number of Units 37 Units 35 Units 42 Units 100 Units 14 Units II. Estimate of Permits & Fees
Building Permit Fee $82.00 /SF (2) $1,907,976 $1,954,716 $2,587,592 $5,805,928 $954,726 Construction License Tax $0.35 /SF $8,144 $8,343 $18,970 $24,781 $4,075 RTCIP $2,583.82 /Unit $95,601 $90,434 $167,948 $258,382 $36,173 SMIP Fee (3) $0.10 /1,000 SF $2.33 $2.38 $3.16 $7.08 $1.16 School District Fees (4) $3.94 /SF $91,676 $93,922 $124,331 $278,968 $45,873 III. Subtotal Permits & Fees $2,103,399 $2,147,417 $2,898,844 $6,368,066 $1,040,849 IV. Add: Contingency @ 0.0% of Subtotal $0 $0 $0 $0 $0
V. Total Permits & Fees $2,103,399 $2,147,417 $2,898,844 $6,368,066 $1,040,849 Per Unit $56,800 $61,400 $69,000 $63,700 $74,300
Per SF GBA $90 $90 $92 $90 $89
(1) Estimate does not account for any potential DIF credits for units or building area demolished. (2) Reflects rate for Apartment Houses with Type V (Wood Frame) construction. (3) SMIP = Strong Motion Instrumentation & Seismic Hazard Mapping Fee. Minimum fee of $0.50. (4) Does not apply to units that are under 500 SF in size. (5) Excludes office building area.

Source: City of Del Mar Fee Schedules
Prepared by: Keyser Marston Associates, Inc.

Filename: Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023\1/19/2023; ema

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WORKSHEET 2
ESTIMATE OF AFFORDABLE RENTS - 30% AMI, 2022
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
Number of Bedrooms 0 1 2 3
City of Del Mar
Percent of AMI 30% 30% 30% 30%
Assumed Family Size 1.0 2.0 3.0 4.0
Household Income (1) $22,455 $25,665 $28,860 $32,070
Income Allocation to Housing 30% 30% 30% 30%
Monthly Housing Cost $561 $642 $722 $802
(Less) Utility Allowance (2) ($46) ($62) ($80) ($97)
Maximum Monthly Rent $515 $580 $642 $705
(1) State of California Department of Housing and Community Development (HCD) 2022 income limits. (2) Reflects County of San Diego utility allowances, as of December 1, 2021.

Monthly Utility Studio One Bedroom Two Bedrooms Three Bedrooms Electric Heating $7 $9 $12 $14
Electric Cooking $4 $5 $7 $8
Other Electric $21 $29 $37 $45
Electric Water Heating $14 $19 $24 $30
Total $46 $62 $80 $97
Prepared by: Keyser Marston Associates, Inc.

Filename i:\Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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WORKSHEET 3
ESTIMATE OF AFFORDABLE RENTS - 50% AMI, 2022
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
Number of Bedrooms 0 1 2 3
City of Del Mar
Percent of AMI 50% 50% 50% 50%
Assumed Family Size 1.0 2.0 3.0 4.0
Household Income (1) $37,425 $42,775 $48,100 $53,450
Income Allocation to Housing 30% 30% 30% 30%
Monthly Housing Cost $936 $1,069 $1,203 $1,336
(Less) Utility Allowance (2) ($46) ($62) ($80) ($97)
Maximum Monthly Rent $890 $1,007 $1,123 $1,239
(1) State of California Department of Housing and Community Development (HCD) 2022 income limits. (2) Reflects County of San Diego utility allowances, as of December 1, 2021.

Filename i:\Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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WORKSHEET 4
ESTIMATE OF AFFORDABLE RENTS - 60% AMI, 2022
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
Number of Bedrooms 0 1 2 3
City of Del Mar
Percent of AMI 60% 60% 60% 60%
Assumed Family Size 1.0 2.0 3.0 4.0
Household Income (1) $44,910 $51,330 $57,720 $64,140
Income Allocation to Housing 30% 30% 30% 30%
Monthly Housing Cost $1,123 $1,283 $1,443 $1,604
(Less) Utility Allowance (2) ($46) ($62) ($80) ($97)
Maximum Monthly Rent $1,077 $1,221 $1,363 $1,507
(1) State of California Department of Housing and Community Development (HCD) 2022 income limits. (2) Reflects County of San Diego utility allowances, as of December 1, 2021.

Filename i:\Del Mar+Affordable_AH Zone Pro Formas_v10-FINAL_01-19-2023;1/19/2023;ejr

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City of Del Mar
Agenda Report
________________________________________________________________________________________________________ City Council Action:

TO: Honorable Mayor and City Council Members
FROM: Amanda Lee, Principal Planner
Karen Brindley, Planning and Community Development Director Via Ashley Jones, City Manager
DATE: January 23, 2023
SUBJECT: Housing Element Program 2A – Potential Incentives for Creation of Low Income Accessory Dwelling Units
REQUESTED ACTION/RECOMMENDATION:

Staff recommends the City Council consider potential incentives that could facilitate production of at least fifteen (15) low income Accessory Dwelling Units (ADUs) and provide direction for processing an ordinance by December 2023 as required by Housing Element Program 2A.

BACKGROUND:

ADUs are smaller dwelling units that are intended to provide for independent living on the same site as a larger primary dwelling unit or multiple dwelling units. The purpose of this report is to share the findings of consultant studies (Attachments A and B) that were completed to satisfy 6 th
Cycle Housing Element obligations.

The City’s existing ADU incentive program was initially adopted by the City Council as a pilot program in May 2018 (Attachment C). The most recent extension was approved by the City Council on May 16, 2022, and will expire on May 16, 2024, unless extended. Housing Element Program 2A requires the City amend its existing incentive program upon completion of studies that evaluate its feasibility while also identifying additional potential incentives that would increase program participation and produce 15 low income ADUs by April 2029.

DISCUSSION/ANALYSIS:

California Government Code Sections 65852.2 (ADU law) and 65852.22 (JrADU law) identify the parameters under State law that the City must comply with. The ADU-related studies required for implementation of the Housing Element were performed by two consultant teams, Stephen Dalton Architects (SDA) and Keyser Marston Associates, Inc. (KMA). The consultant teams prepared zoning assessments and economic studies that evaluated the market (regional and local) and comparative financial benefit that may be achieved by property owners constructing ADUs on lots with that are developed with an existing single dwelling unit, two primary dwelling units (duplex), and more dense apartment/condominium development.

Financial pro forma models were prepared to estimate a property owner’s return on investment considering the increased value upon completion of an ADU incentive project under current market 1 January 23, 2023 Item 10
City Council Agenda Report
Housing Element Program 2A – Low Income ADUs
January 23, 2023

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conditions and accounting for ADU construction costs (which are generally estimated to range between $450 and $600 per square foot). The studies considered ADU development potential allowed per State law; and potential incentives that could be offered to increase program participation to meet the City’s goal of creating at least 15 low income ADUs by April 2029. For reference, maximum rent for a low income unit in the San Diego region generally was restricted to $1,221 for a 1-bedroom and $1,363 for a 2-bedroom unit in 2022 per State law (California Health and Safety Code Section 50053).

Four hypothetical scenarios were studied for the R1-10 zone (minimum 10,000 square foot (sf) lot size), R2 zone (minimum 7,000 sf lot size), and RM-West zone (minimum 5,000 sf lot size). These zones were selected because they are representative of similar development in zones citywide. For example, the R1-10 zone allows for single dwelling unit development, which is also allowed in the R1-5, R1-5B, R1-10B, R1-14, and R1-40 zones; and the R2 and RM-West zones each allow for single dwelling unit and duplex development, which are allowed uses in the RM-Central and RMEast zones.

A fourth zoning concept studied the feasibility of ADUs on lots developed with larger multiple dwelling unit development such as the RM-South zone (minimum 8,000 sf lot size). While this zoning concept focused on a scenario of non-conforming multi-unit development in the RM-South zone (at a higher density than what is currently allowed by the zone), the findings are applicable to similar nonconforming multi-unit properties in other zones citywide (i.e., existing apartment and condominium complexes in the RM-West and R2 zones).

The consultant determined financial feasibility by estimating the investment needed to create and maintain a low income rental unit and whether the cost-benefit associated with the incentive program requirements would result in sufficient added property value to incentivize property owners to participate. See Attachment A for the zoning concepts prepared by SDA and Attachment B for the economic study prepared by KMA. The study findings are described below.

Findings and Potential Incentives
Pursuant to Ordinance 988 (see Attachment D), the existing incentive program grants a 500 square foot floor area ratio (FAR) bonus in exchange for a property owner commitment to create an ADU or Junior Accessory Dwelling Unit (JrADU) that would be a deed-restricted affordable unit for 30 years.

The square footage of new ADUs and JrADU development is not counted toward a lot’s maximum FAR limit as a result of State law. The FAR bonus incentive is intended to facilitate expansion of the primary structure. Currently, development of the 500 square foot FAR bonus is subject to discretionary permit approval from the Design Review Board.

The lack of participation in the current program, with only one application submitted over a five-year period, serves as an indicator that new incentives will be needed to gain sufficient participation to reach the City’s target of 15 low income ADUs. According to the studies, some of the factors that may preclude owner participation include:
• Site specific constraints and circumstances such as lot configuration, topography, building footprint(s), vehicular access, and other physical factors. • That property owners may conclude, based on their personal values and preferences (i.e., to maintain open space, views, and other aesthetics), that the addition of ADU(s) and/or FAR 2 January 23, 2023 Item 10
City Council Agenda Report
Housing Element Program 2A – Low Income ADUs
January 23, 2023

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bonus area(s) would not be desirable for their home and property. • That property owners may be unwilling to take on the responsibilities of a landlord for a rental unit located on the same lot as their primary home lot as well as the administrative obligations associated with State requirements for annual monitoring for compliance with the affordability covenants.

The studies show that each of the scenarios analyzed demonstrates some financial feasibility, with the key takeaways being:
• The study showed the least feasible scenario applies to circumstances where an owner is limited to development of just one ADU (that is restricted for rent to low income households) similar to the existing incentive program.
• The study showed “high feasibility” when an owner is able to build at least one market rate ADU on a property in addition to one low income ADU unit in order to offset the investment needed for the rent-restricted ADU.
• Further, where there is underutilized space available on a lot to incorporate multiple ADUs (i.e., RM-South apartment complex scenario), the feasibility significantly increases when an owner is able to build new market rate units to help offset the investment needed for the rentrestricted ADUs. The studies show this strategy can yield the highest number of low income units through associated construction efficiencies and cost saving opportunities.

Therefore, by modifying the existing ADU incentive program to increase the economic feasibility and encourage participation from existing apartment/condominium complex owners, the City would be more likely to reach the goal of 15 low income ADUs.

Policy Considerations
In consideration of the consultant studies, the following are recommendations for the City Council to consider as potential amendments to the ADU incentive program in accordance with Housing Element Program 2A:
1) Provide for development of bonus ADU unit(s) as a means to help property owners offset the investment needed for creation of the rent-restricted ADU(s), and limit the corresponding number of bonus units accordingly based on the lot context:
• On lots developed with single dwelling unit or duplex development, allow for one 500- square foot bonus and a market rate ADU to be developed in addition to one 500-square foot rent-restricted ADU developed on-site; and
• On lots that are developed with more dense multi-unit development, allow for an increase in the number of market rate ADUs that can be developed at a percentage that is proportional to help offset the cost associated with creation of rent restricted ADUs onsite. 2) Provide for the new rent-restricted ADUs and the bonus ADU units granted as an incentive to be exempt from the zone FAR limit and provide that such applications be implemented via 3 January 23, 2023 Item 10
City Council Agenda Report
Housing Element Program 2A – Low Income ADUs
January 23, 2023

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a ministerial review process (exempt from the typical discretionary design review process) and subject to objective design standards.
3) Accommodate existing non-conformities by providing owners the ability to maintain and expand existing non-conforming development as an incentive when an owner ADU commits to incorporate rent-restricted units for low income households in accordance with the ADU incentive program.
4) Consider whether to limit participation in the program. The California Department of Housing and Community Development (HCD) identified that the City’s production programs should not be limited to the unit count that is needed to meet RHNA. Therefore, it is recommended that the new incentive program be adopted without a sunset date or limitation on capacity of units created. This will allow the City to maintain flexibility for additional low income unit capacity as needed.
5) Consider whether the incentive granting development of bonus ADU unit(s) should be dependent upon the lot development context:
• Should single dwelling unit lots be limited to the maximum of one ADU and one JrADU per lot in accordance with the existing State law provisions? • Should duplex lots developed with two detached primary dwelling units, which the City currently limits to a maximum of two ADUs per lot, be allowed to add up to one additional ADU (or JrADU) unit that is either attached to or within the primary dwelling unit structures as an incentive if the additional ADU or JrADU is deed-restricted low income unit on-site (State law currently only allows JrADUs to be created on lots in single dwelling unit zones)?
• Should the bonus ADU unit incentive (beyond what is allowed per State law) be limited to lots with high density multi-dwelling unit development (i.e., sites with an on-site manager)?
Given concerns about the potential impacts of ADUs on the community, it should be noted the City Council can require by ordinance that the deed restricted ADUs and any "bonus" ADU development meet specified objective design requirements.

Next Steps
Staff is seeking City Council direction for preparation of an ordinance to implement Housing Element Program 2A. Following receipt of Council direction, a draft ordinance will be prepared and presented to the Planning Commission for a recommendation prior to presentation to the City Council for introduction and adoption of an ordinance by December 2023. Once new incentives are available, the City will conduct community outreach to provide greater awareness of the program and proactively engage property owners by utilizing a variety of print and electronic media.

FISCAL IMPACT:

There is no fiscal action to be taken by the City Council related to this agenda item. The consultant work was paid for using Housing Acceleration Program (HAP) Grant funds that were awarded to the City by SANDAG and HCD in 2022 and made available in the Fiscal Year 2022-2023 4 January 23, 2023 Item 10
City Council Agenda Report
Housing Element Program 2A – Low Income ADUs
January 23, 2023

Page 5 of 5 ends

Operating and Capital Budget.

HOUSING IMPACT:

The adopted 6th Cycle Housing Element identifies a multi-faceted strategy to generate production of 175 units at varying income levels during the 6th Cycle years 2021-2029. The breakdown of required unit capacity by income level (RHNA) is as follows:
• 37 very low income units
• 76 low income units
• 31 moderate income units
• 31 above moderate income units
Attachment D provides a summary of the City’s progress to-date in its ability to meet the 6 th Cycle
RHNA. The Housing Element identifies that at least 15 low income ADUs of the total 76 low income-unit obligation will be created by incentivizing property owners to commit to rent ADUs to low income households. Processing of an ordinance by December 2023 to create and enhanced ADU incentive program is required by Housing Element (Program 2A).

ATTACHMENTS:

Attachment A – SDA Zoning Concepts
Attachment B – KMA Economic Study
Attachment C – Existing Incentive Program Ordinance
Attachment D – Summary of Progress to Meet 6
th Cycle RHNA
5 January 23, 2023 Item 10
Del Mar Housing Studies
December 23, 2022 Page 1 of 3
Del Mar Affordable Housing
Accessory Dwelling Unit
Studies

PREPARED BY STEPHEN DALTON ARCHITECTS

IN COOPERATION WITH THE PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT OF THE CITY OF

DEL MAR
DECEMBER 23, 2022
Attachment A
6 January 23, 2023 Item 10
Del Mar Housing Studies
December 23, 2022 Page 2 of 3
This study evaluates various zones and properties for associated potential to provide affordable housing via Accessory Dwelling Units (ADUs). Four zoning concepts were evaluated including a single dwelling unit zone (R1-10), two duplex zones (R2 and RM-West), and one higher density multiple dwelling unit zone concept (RM-South). The intent of this portion of the study was to identify development potential in order to facilitate the associated study and recommendation of potential incentives to encourage owners to deed restrict ADUs for rent to low-income households per Housing Element Program 2A. This program commits the City to further enhance its Accessory Dwelling Unit (ADU) Incentive Pilot Program in an effort to expand participation in the program to reach a target of 15 deed restricted low income ADUs by the end of the 6th Cycle in 2029.

The following exhibits demonstrate the potential for development of ADUs and JrADUs in four types of residential zones in Del Mar to support further affordable housing, including examples of a single dwelling unit zone, lots with one or two units. Note that JrADUs are permitted only within single dwelling unit zones. ADUs are permitted within any zone that permits residential use. The City is able to accommodate additional ADUs via adoption of a local ordinance.

The architectural concept exhibits described below were prepared to support an economic analysis and recommendation of potential incentives that was prepared separately by KMA:
• Exhibit A – R1-10 Zone (single dwelling unit zone)
This exhibit shows area tabulations of a single-family residence with a Jr ADU and ADU – tracking the total unrestricted gross floor area that a homeowner could make use of by rent restricting a Jr ADU. Single dwelling unit lots can be developed with a maximum of one ADU and one JrADU per State law.
• Exhibit B – R2 Zone (single dwelling unit/duplex zone) This exhibit shows area tabulations of two duplex units with two detached ADUs – tracking the total unrestricted gross floor area that a homeowner could make use of by rent restricting one ADU. Lots with a single dwelling unit can be developed with a maximum of one ADU and lots with two dwelling units can be developed with a maximum of two ADUs per State law.
7 January 23, 2023 Item 10
Del Mar Housing Studies
December 23, 2022 Page 3 of 3
• Exhibit C – RM-West Zone (single dwelling unit/duplex zone) This exhibit shows area tabulations of a single-family residence with an ADU – tracking the total unrestricted gross floor area that a homeowner could access by rent restricting an ADU.

Lots with a single dwelling unit can be developed with a maximum of one ADU and lots with two dwelling units can be developed with a maximum of two ADUs per State law. • Exhibit D – RM-South Zone (multiple dwelling unit zone developed with nonconforming high-density multi-unit development) This exhibit shows area tabulations of a multifamily project with two detached ADUs – tracking the total unrestricted gross floor area that an owner could access by rent restricting one ADU. Lots with a single dwelling unit can be developed with a maximum of one ADU and lots with two or more dwelling units can be developed with a maximum of two detached ADUs per State law. Lots developed with multiple dwelling unit buildings (structures with more than one dwelling unit) are also able to develop additional ADUs within the multiple dwelling unit buildings through conversion of non-habitable spaces that are not part of existing dwelling units.
8 January 23, 2023 Item 10
STEPHEN DALTON ARCHITECTS 10/25/2022

DM HOUSING - PHASE II
www.SDArchitects.net R1-10 ZONE 1
7'-6" SYSB 7'-6" SYSB
20'-0" FYSB 25'-0" RYSB
4'-0"
ADU
SYSB
4'-0"
ADU
RYSB
4'-0"
ADU
SYSB

DETACHED
ADU
850 SF

JUNIOR ADU
500 SF WITHIN SFR
MAX GFA: 2,500 SF
BONUS: +500 SF
TOTAL: 3,000 SF*
*JUNIOR ADU AND DETACHED

ADU ARE FAR EXEMPT AND DO
NOT COUNT TOWARD GFA.

SINGLE FAMILY

RESIDENCE (SFR)
SCALE: 1" = 10' R1-10 ADU SITE DIAGRAM MINIMUM LOT SIZE: 10,000 SF MAX. FLOOR AREA RATIO: 25%
9 January 23, 2023 Item 10
STEPHEN DALTON ARCHITECTS 10
/25/2022

DM HOUSING - PHASE II
www.SDArchitects.net
R1-10 ZONE
2 R1-10
MINIMUM LOT SIZE 10,000 SF
MAX. FLOOR AREA RATIO 25%

AREA TABULATION

RENT RESTRICTED
GFA

UNRESTRICTED
GFA
SFR (WITHOUT JR ADU) 2,000 SF
JR ADU a 500 SF
JR ADU BONUS 500 SF
ADU 850 SF
500 SF 3,350 SF
NOTES
25%
FAR
3,850 SF
a. DEED RESTRICTED RENTAL IN EXCHANGE FOR A 500 SQUARE
FOOT BONUS FLOOR AREA.

TOTAL
10 January 23, 2023 Item 10
STEPHEN DALTON ARCHITECTS 10/25/2022

DM HOUSING - PHASE II
www.SDArchitects.net R2 ZONE 3
20'-0" FYSB 20'-0" RYSB 5'-0" SYSB 5'-0" SYSB 4'-0" ADU SYSB 4'-0"
ADU
RYSB
4'-0"
ADU
SYSB
DUPLEX UNIT 1

DETACHED
ADU -2
850 SF
DUPLEX UNIT 2

DETACHED
ADU -1
850 SF
ALLEY
STREET
*DETACHED ADUS ARE

FAR EXEMPT AND DO

NOT COUNT TOWARD
GFA.

MAX COMBINED GFA: 2,450 SF
(DUPLEX UNITS 1+2)
BONUS: +500 SF
TOTAL: 2,950 SF*
R2
SCALE: 1" = 10'

ADU SITE DIAGRAM
MINIMUM LOT SIZE: 7,000 SF
MAX. FLOOR AREA RATIO: 35%
11 January 23, 2023 Item 10
STEPHEN DALTON ARCHITECTS 10
/25/2022

DM HOUSING - PHASE II
www.SDArchitects.net
R2 ZONE
4 R2
MINIMUM LOT SIZE 7,000 SF
MAX. FLOOR AREA RATIO 35%

AREA TABULATION

RENT RESTRICTED
GFA

UNRESTRICTED
GFA
25% FAR DUPLEX 2,450 SF
ADU -1 a 850 SF
ADU BONUS 500 SF
ADU -2 850 SF
850 SF 3,800 SF
NOTES
4,650 SF
TOTAL
a. DEED RESTRICTED RENTAL IN EXCHANGE FOR A 500 SQUARE
FOOT BONUS FLOOR AREA.
12 January 23, 2023 Item 10
STEPHEN DALTON ARCHITECTS 10/25/2022

DM HOUSING - PHASE II
www.SDArchitects.net RM-WEST 5 4'-0" ADU SYSB
4'-0"
ADU
RYSB
4'-0"
ADU
SYSB
10'-0" FYSB 10'-0" RYSB
5'-0" SYSB 5'-0" SYSB
MAX GFA: 2,250 SF
BONUS: +500 SF
TOTAL: 2,750 SF*
*DETACHED ADU IS FAR

EXEMPT AND DOES NOT
COUNT TOWARD GFA.

DETACHED
ADU
850 SF

SINGLE FAMILY

RESIDENCE (SFR)

RM-WEST
SCALE: 1" = 10'

ADU SITE DIAGRAM
MINIMUM LOT SIZE: 5,000 SF
MAX. FLOOR AREA RATIO: 45%
13 January 23, 2023 Item 10
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/25/2022

DM HOUSING - PHASE II
www.SDArchitects.net RM
-WEST
6 RM-WEST
MINIMUM LOT SIZE 5,000 SF
MAX. FLOOR AREA RATIO 45%

AREA TABULATION

RENT RESTRICTED
GFA

UNRESTRICTED
GFA
25% FAR SFR 2,250 SF
ADU a 850 SF
ADU BONUS 500 SF
850 SF 2,750 SF
NOTES
3,600 SF
a. DEED RESTRICTED RENTAL IN EXCHANGE FOR A 500 SQUARE
FOOT BONUS FLOOR AREA.

TOTAL
14 January 23, 2023 Item 10
STEPHEN DALTON ARCHITECTS 10/25/2022

DM HOUSING - PHASE II
www.SDArchitects.net RM-SOUTH 7
20'-0" RYSB 20'-0" FYSB
10'-0" SYSB 10'-0" SYSB
305.00'
390.00'

RM-SOUTH
20'-0" RYSB 20'-0" FYSB
10'-0" SYSB 10'-0" SYSB
305.00'
390.00'
SCALE: 1" = 40'

ADU SITE DIAGRAM
SCALE: 1" = 40'

ADU SITE DIAGRAM
(2) 850 SF ADUS

ADU ADU
MINIMUM LOT SIZE: 8,000 SF
MAX. FLOOR AREA RATIO: 35%
MAX GFA: 41,632.5 SF
BONUS: + 500.0 SF
TOTAL: 42,132.5 SF*
*DETACHED ADUS ARE FAR EXEMPT
AND DO NOT COUNT TOWARD GFA.

EXAMPLE

MULTIFAMILY

PROJECT
MAX GFA: 2800 SF
BONUS: +500 SF
TOTAL: 3,300 SF
MIN. LOT SIZE

PROJECT
15 January 23, 2023 Item 10
STEPHEN DALTON ARCHITECTS 10
/25/2022

DM HOUSING - PHASE II
www.SDArchitects.net RM
-SOUTH
8 RM-SOUTH
MINIMUM LOT SIZE 8,000 SF
MAX. FLOOR AREA RATIO 35%

AREA TABULATION

RENT RESTRICTED
GFA

UNRESTRICTED
GFA
25% FAR a MULTIFAMILY PROJECT 41,632.5 SF
ADU -1 b 850 SF
ADU BONUS 500 SF
ADU -2 850 SF
850 SF 42,982.5 SF
NOTES
43,832.5 SF

EXAMPLE MULTIFAMILY PROJECT
TOTAL
a. EXAMPLE MULTIFAMILY PROJECT SHOWS EXISTING MULTI-UNIT

DEVELOPMENT THAT IS NON-CONFORMING WITH BASE DENSITY
OF ZONE.
b. DEED RESTRICTED RENTAL IN EXCHANGE FOR A 500 SQUARE
FOOT BONUS FLOOR AREA.

RM-SOUTH
MINIMUM LOT SIZE 8,000 SF
MAX. FLOOR AREA RATIO 35%

AREA TABULATION

RENT RESTRICTED
GFA

UNRESTRICTED
GFA
25% FAR SFR 2,800 SF
ADU -1 a 850 SF
ADU BONUS 500 SF
ADU -2 850 SF
850 SF 4,150 SF
NOTES
5,000 SF
a. DEED RESTRICTED RENTAL IN EXCHANGE FOR A 500 SQUARE
FOOT BONUS FLOOR AREA.

MINIMUM LOT SIZE PROJECT
TOTAL
16 January 23, 2023 Item 10

ECONOMIC STUDY
6 TH CYCLE HOUSING ELEMENT

ACCESSORY DWELLING UNIT (ADU) INCENTIVE PROGRAM

CITY OF DEL MAR
Prepared for:

City of Del Mar
Prepared by:

Keyser Marston Associates, Inc.

January 2023
Attachment B
17 January 23, 2023 Item 10

TABLE OF CONTENTS
I. Introduction....................................................................................................................................... 1 II. Key Findings....................................................................................................................................... 3 III. Accessory Dwelling Unit (ADU) Incentive Program........................................................................... 7 IV. ADU Feasibility Analysis..................................................................................................................... 8 V. Limiting Conditions.......................................................................................................................... 18

APPENDIX
Appendix Feasibility Analysis: Accessory Dwelling Unit Incentive Program 18 January 23, 2023 Item 10
City of Del Mar - Economic Study 6th Cycle Housing Element Page 1 ADU Incentive Program
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I. INTRODUCTION
A. Objective
Keyser Marston Associates, Inc. (KMA) was engaged by the City of Del Mar (City) to prepare this Economic Study (Study) to assess the economic viability of incentive programs in the City’s 6th Cycle Housing Element, specifically Housing Element Update (HEU) Program 2A. HEU Program 2A considers actions the City will take to extend and enhance the City’s existing Accessory Dwelling Unit (ADU) Incentive Pilot Program (ADU Incentive Program).

The City seeks to evaluate the ADU Incentive Program to explore additional incentives and/or program components that will further support the development of Low Income ADUs and Junior ADUs (JrADUs).

This Study evaluates the overall viability of the ADU Incentive Program and potential enhanced incentives that could be offered to encourage greater participation in the ADU Incentive Program.

B. Methodology
KMA performed the following key work tasks in completing this Study.

1. Reviewed regional and local market parameters for for-sale and rental residential uses.

2. Assisted City staff and the City’s urban design consultant, Stephen Dalton Architects (SDA), to formulate project descriptions for potential development sites/prototypes for various zones within the City.

3. Prepared financial pro forma models to estimate the economic impact to a property owner considering development of a Low Income ADU under HEU Program 2A based on four (4) zone/lot size scenarios.

C. Organization of Report
This Study is organized into the following key sections:
• Following this introduction, Section II presents the KMA key findings. • Section III provides an overview of the City’s ADU Incentive Program. • Section IV presents the feasibility analysis estimating the impact to a property owner considering development of a Low Income ADU under the various zone/lot size scenarios. 19 January 23, 2023 Item 10
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• Section V details limiting conditions pertaining to this Study. • The detailed feasibility analysis is presented in the Appendix. 20 January 23, 2023 Item 10
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II. KEY FINDINGS
The KMA analyses of the various ADU development scenarios evaluate the financial feasibility of Low Income ADUs and JrADUs in the City. City staff and SDA identified four (4) potential zones and lot sizes for feasibility testing. The development prototypes analyzed for the R1-10, R2, and RM-West zones are described in Table II-1.

Table II-1: Residential Zones and ADU Development Concepts Zone R1-10 R2 RM-West
Typical Lot Size 10,000 SF 7,000 SF 5,000 SF
Existing Development
2,000 SF
single-family home
2,450 SF
duplex
2,250 SF
single-family home
FAR Bonus Area (1) 500 SF 500 SF 500 SF
ADU Area (1) 2 ADUs 2 ADUs 1 ADU
Affordable ADU 500 SF (2) 850 SF 850 SF
Market-Rate ADU 850 SF 850 SF 0 SF
Total Building Area
upon Completion
3,850 SF 4,650 SF 3,600 SF
(1) Reflects FAR exempt space.
(2) Reflects a JrADU unit located within the primary dwelling structure.

The fourth zone analyzed is the RM-South zone. The analysis of the RM-South reflected the development of ADUs and additional FAR allowances within underutilized areas of an existing 59-unit prototype apartment complex. KMA analyzed three potential ADU development scenarios featuring a range of FAR bonus area units (average 500 SF in size, assumed to be affordable) and additional ADUs (average 850 SF in size, assumed to be market-rate), described in Table II-2. 21 January 23, 2023 Item 10
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Table II-2: Residential Zones and ADU Development Concepts - RM South Zone RM-South
Assumed Lot Size 2.23 Acres
Maximum FAR 0.35
Scenario 1 Scenario 2 Scenario 3
Existing Multi-Family
Development
59 Units 59 Units 59 Units
FAR Bonus Area (1) 1 Unit 2 Units 3 Units
Affordable (2) 500 SF 1,000 SF 1,500 SF
ADU Area (1) 2 ADUs 3 ADUs 7 ADUs
Market-Rate (3) 1,700 SF 2,550 SF 5,950 SF
Number of Units
Market-Rate 61 Units 62 Units 66 Units
Affordable 1 Unit 2 Units 3 Units
Total Units 62 Units 64 Units 69 Units
(1) Reflects FAR exempt space.
(2) Assumes FAR bonus area unit size of 500 SF per unit. (3) Assumes ADU size of 850 SF per unit.

For each of the development concepts described in Tables II-1 and II-2 above, KMA prepared financial pro forma models to determine the overall viability of the City’s ADU Incentive Program. All pro forma inputs used in the KMA analysis – development costs, market prices and rents, and market value upon completion -- are based on current market conditions. Maximum rents for Low Income units were calculated based on the standards imposed by California Health and Safety Code Section 50053 .

Financial feasibility was measured by estimating the return on investment to a property owner. Return on investment was defined as surplus value divided by the required investment to develop the FAR bonus area(s) and ADU(s) in each scenario. KMA used the following benchmarks to rank the relative financial feasibility of the various scenarios.
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High Feasibility: Greater than 25% return on investment. The existing incentives are sufficient to encourage participation in the ADU Incentive Program.

Medium Feasibility: 11%-24% return on investment. May need additional incentives to encourage participation in the ADU Incentive Program.

Low Feasibility: Less than 10% return on investment. Additional incentives are needed to encourage participation in the ADU Incentive Program.

Table II-3 provides a summary of the outcome of the feasibility analysis for each residential zone/ADU development concept.

Table II-3: Financial Feasibility of Residential Zones/ADU Development Concepts Residential Zone/
ADU Development Concept
Prototype
Financial
Feasibility
Residential Zone/
ADU Development Concept
Prototype
Financial
Feasibility
R1-10
• 1 Affordable JrADU
• 1 Market-Rate ADU
• 500 SF FAR bonus area
HIGH

FEASIBILITY
RM -
South
Scenario 1
• 2 Market-Rate ADUs
• 1 Affordable FAR
bonus area unit
HIGH

FEASIBILITY
R2
• 1 Affordable ADU
• 1 Market-Rate ADU
• 500 SF FAR bonus area
HIGH

FEASIBILITY
Scenario 2
• 3 Market-Rate ADUs
• 2 Affordable FAR
bonus area units
HIGH

FEASIBILITY
RM -
West
• 1 Affordable ADU
• 500 SF FAR bonus area
LOW

FEASIBILITY
Scenario 3
• 7 Market-Rate ADUs
• 3 Affordable FAR
bonus area units
HIGH

FEASIBILITY
As shown above, all development concepts tested were found to be financially feasible except for the RMWest zone prototype where only one (1) affordable ADU is developed in addition to the FAR bonus area.

These findings indicated that increased participation in the ADU Incentive Program is more likely to occur when property owners are allowed the opportunity to develop both an affordable ADU and a market-rate ADU, in addition to the FAR bonus allowance, as modeled in the R1-10 and R2 zones. Conversely, participation in the ADU Incentive Program is less likely where the property owner is limited to developing only one (1) affordable ADU on their property, in combination with the FAR bonus allowance, as modeled in the RM-West zone.

The conclusions from the RM-South prototypes indicate that the ADU Incentive Program should be feasible for owners of existing multi-family apartment complexes where it is physically possible to build additional units through ADUs and FAR bonus areas within existing underutilized spaces. 23 January 23, 2023 Item 10
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These findings are based on a financial feasibility evaluation of prototype development concepts.

Individual circumstances may vary greatly, including lot configuration, topography, building footprint(s), vehicular access, and other physical factors. Additionally, property owners may value open space, views, and other aesthetic features differently and therefore conclude that the addition of ADU(s) and/or FAR bonus area(s) would not be desirable for their home and property. Finally, it should be considered that property owners may be unwilling to take on the responsibilities of a landlord for a rental unit located on the same lot as their primary home lot as well as the administrative obligations associated with the City’s annual monitoring of compliance with the affordability covenants.

The City may wish to implement an ongoing outreach program to educate property owners regarding the opportunities available under the ADU Incentive Program. This Study, in combination with the SDA study, can serve as a useful reference source to illustrate to property owners how they might approach planning, financing, and implementing ADU development on their lots. 24 January 23, 2023 Item 10
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III. ACCESSORY DWELLING UNIT (ADU) INCENTIVE PROGRAM
State law provides for the development of ADUs in zones that allow single dwelling units or multiple dwelling units as a primary use. In Del Mar, this includes all of the City’s residential zones. According to the City of Del Mar Municipal Code, an ADU is a small ancillary dwelling unit (detached or attached) with complete, independent living facilities (kitchen and bathroom) located on the same lot as a primary dwelling unit.

State law also allows for JrADUs on any lot with a single dwelling unit. In Del Mar, these include the Carmel Valley Precise Plan (CVPP), R1-10, R1-10B, R1-14, R1-40, R1-5, and R1-5B zones. A JrADU is a smaller dwelling unit (500 square feet [SF] maximum in size) that is developed within a single dwelling unit on a single dwelling unit lot that has a separate entrance, efficiency kitchen, and access to a bathroom either within the JrADU or shared with the primary dwelling unit. Only one JrADU is permitted per lot and must be located entirely within the walls of a primary dwelling unit.

ADUs and JrADUs do not count toward the allowable density of any zone and are otherwise exempt from various development standards (e.g., floor area ratio [FAR], lot coverage, and parking) and discretionary permit processes (e.g., design review and conditional use permits).

HEU Program 2A specifies actions that the City will take to extend and enhance the City’s existing ADU Incentive Program. Currently, the program grants a 500-SF FAR bonus area that is exempt from a lot’s FAR limit in exchange for a 30-year affordable ADU or JrADU. In effect, the Program enables a property owner to expand their home beyond the existing zoning limits. Absent the ADU Incentive Program, the property owner would need to assemble additional land area in order to enlarge their home beyond the FAR limit.

To achieve this incentive, a property owner must also develop on the property an affordable ADU to be rented to a Low Income household.

The City seeks to further enhance and expand participation in the ADU Incentive Program. The City’s target is 15 deed-restricted Low Income ADUs by 2029. To date, the 500-SF floor area bonus has yielded only one (1) Low Income ADU. HEU Program 2A is intended to promote greater awareness of the ADU Incentive Program to property owners.
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IV. ADU FEASIBILITY ANALYSIS
A. Residential Zones and Development Sites
City staff and SDA identified four (4) potential residential zones and lot sizes for feasibility testing. The allowable ADU development for each zone is described in Table IV-1. The number and type of ADU units varies within each zone. For the purposes of this Study, the allowable ADU development scenario selected for feasibility testing is noted with a ✓ below.

Table IV-1: Residential Zones and Development Sites
Zone R1-10 R2 RM-West RM-South
Allowable
ADU
Development
✓ One (1)
detached ADU
and One JrADU
per lot (1)
• Maximum of one
(1) ADU per lot if
the primary
dwelling units are
detached; or
✓ Maximum of two
(2) detached ADUs
per lot for lots
with multi-unit
development that
contains two or
more primary
units in a building.
✓ Maximum of one
(1) ADU per lot if
the primary
dwelling units are
detached; or
• Maximum of two
(2) detached ADUs
per lot for lots with
multi-unit
development that
contains two or
more primary units
in a building
• Two (2) detached ADU
per lot for lots with
multi-unit
development with two
or more primary units
in a building; and
✓ Additional ADUs if
constructed within
existing underutilized
spaces of a multi-unit
building that are not
controlled by an
individual dwelling
unit on the multi-unit
lot.

Typical
Lot Size
10,000 SF 7,000 SF 5,000 SF 2.23 Acres
Maximum
FAR

0.25 FAR or
2,000 SF whatever
is greater

0.35 0.45 0.35
(1) The JrADU is located within the primary dwelling structure. ✓ Reflects allowable ADU development scenario modeled by SDA and KMA. 26 January 23, 2023 Item 10
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B. ADU Development Concepts and Scenarios
SDA identified ADU development prototypes for each zone based on typical lot sizes in the R1-10, R2, and RM West Zones. As shown in Table IV-2, for each zone/site KMA considered: (i) existing development on the site at existing FAR limits with no ADUs, and (ii) development of the site after the building of ADU units and additional FAR allowances.

Table IV-2: ADU Development Concepts and Scenarios
Zone R1-10 R2 RM-West
Site Size 10,000 SF 7,000 SF 5,000 SF
BEFORE: Existing FAR Limit – No ADU
Existing Development Single-Family
Residence
2-Unit
Duplex
Single-Family
Residence
Existing GBA 2,500 SF 2,450 SF 2,250 SF
AFTER: Additional FAR Allowance/Build ADU
Existing Development 2,000 SF 2,450 SF 2,250 SF
FAR Bonus Area (1) 500 SF 500 SF 500 SF
ADU Area (1) 2 ADUs 2 ADUs 1 ADU
Affordable ADU 500 SF (2) 850 SF 850 SF
Market-Rate ADU 850 SF 850 SF 0 SF
Total Building Area
upon Completion
3,850 SF 4,650 SF 3,600 SF
(1) Reflects FAR exempt space.
(2) Reflects a JrADU unit located within the primary dwelling structure.

For the RM-South Zone, SDA and KMA modeled the development of ADUs and additional FAR allowances within underutilized areas of an existing 59-unit prototype apartment complex. As shown in Table IV-3, KMA analyzed three potential development scenarios involving a mix of additional units resulting from FAR bonuses and ADUs, thereby increasing the existing apartment building from 59 units to between 62 and 69 units.
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Table IV-3: ADU Development Concepts and Scenarios – RM-South Zone RM-South
Site Size 2.23 Acres
BEFORE: Existing FAR Limit – No ADU
Existing Development Multi-Family Apartment Complex
Existing GBA 41,633 SF
Number of Units 59 Units
AFTER: Additional FAR Allowance/Build ADU
Scenario 1 Scenario 2 Scenario 3
Existing 41,633 SF 41,633 SF 41,633 SF
FAR Bonus Area (1) 1 Unit 2 Units 3 Units
Affordable (2) 500 SF 1,000 SF 1,500 SF
ADU Area (1) 2 ADUs 3 ADUs 7 ADUs
Market-Rate (3) 1,700 SF 2,550 SF 5,950 SF
Total GBA 43,833 SF 45,183 SF 49,083 SF
Number of Units
Market-Rate 61 Units 62 Units 66 Units
Affordable 1 Unit 2 Units 3 Units
Total Units 62 Units 64 Units 69 Units
(1) Reflects FAR exempt space.
(2) Assumes FAR bonus area unit size of 500 SF per unit. (3) Assumes ADU unit size of 850 Sf per unit.

C. Projected Market Values and Rents
KMA surveyed home values in the City based on data from Multiple Listing Service (MLS) Real Estate. The survey included attached and detached homes sold in the City between January 2019 and September 2022. The purpose of the survey was to derive estimates of the probable market values for existing residential uses in the R1-10, R2, and RM-West zones.

KMA also surveyed market rent data from the CoStar Group in the North Coastal communities of Del Mar, Oceanside, Carlsbad, Solana Beach, and Encinitas, west of Interstate 5 (I-5). The purpose of the survey was to derive an acquisition value estimate for a prototype existing multi-family apartment complex in the RM28 January 23, 2023 Item 10 City of Del Mar - Economic Study 6th Cycle Housing Element Page 11 ADU Incentive Program
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South Zone. The rent survey was also used to estimate the probable rent that could be achieved for the market-rate ADUs.

The market value and rent assumptions used in the KMA feasibility analysis are presented in Table IV-4.

Table IV-4: Estimates of Market Values and Market Rents Zone R1-10 R2 RM-West RM-South
Current Market Value
Existing
Structure
Single-Family
Residence Duplex Single-FamilyResidence
Multi-Family Complex
Building Area 2,500 SF 2,450 SF 2,250 SF 41,633 SF
Market Value $2,000/SF $2,250/SF $2,500/SF $674,000/Unit (1) FAR Bonus Area
Building Area 500 SF 500 SF 500 SF --- (2) --- (2) --- (2) Market Value $1,000/SF $1,125/SF $1,250/SF --- --- ---
Market-Rate ADU
ADUs 1 ADU 1 ADU --- (3) 1 ADU 2 ADUs 3 ADUs
Building Area 850 SF 850 SF --- 850 SF 1,700 SF 2,550 SF Market Value $1,000/SF $1,125/SF --- --- --- ---
Market Rent --- --- ---
$4,000/Unit
/Month
$4,000/Unit
/Month
$4,000/Unit
/Month
(1) Based on the income approach to value, assuming rental income of $3,300 per unit per month and other income of $100 per unit per month; less vacancy of 5% and operating expenses of $13,479 per unit; and a capitalization rate of 3.75%.
(2) FAR bonus area in the RM-South zone is assumed to be operated as affordable units. (3) The ADU unit in the RM-West zone is assumed to be an affordable unit.

As shown above, for the R1-10, R2, and RM-West zones, KMA assumed that the marginal value of increased building area resulting from the FAR bonus and/or ADUs was estimated at 50% of the market value per SF of the primary home or duplex.

D. Affordable Rent Calculations
For the purposes of this feasibility analysis, the maximum affordable rents for the income-restricted units were calculated based on the standards imposed by California Health and Safety Code Section 50053. The 29 January 23, 2023 Item 10
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detailed calculations are presented in the Appendix; the key assumptions and results are summarized below.
• The household income information used in the calculations of affordable rent is based on 2022 income statistics for San Diego County as a whole. The household incomes are published annually by the U.S. Department of Housing and Urban Development (HUD). • The household size appropriate for the unit is based on one additional household person per bedroom.
• Maximum monthly rental housing payment for Low Income units is calculated as equal to 1/12 x 30% x 60% of Area Median Income (AMI), adjusted for household size, less adjustments for certain tenantpaid utilities. • Utility expenses are based on the County of San Diego utility allowance schedule, effective December 1, 2021, and the assumption that the tenant-paid utility costs are comprised of electric cooking, electric water heating, electric heating, and other basic electric services.

The resulting average affordable rents for each of the ADU prototypes are presented in Table IV-5.

Table IV-5: Affordable Rents – Low Income
One Bedroom (1) $1,221
Two Bedroom (2) $1,363
(1) JrADU units or FAR bonus area units at 500 SF were assumed to be one-bedroom units.
(2) ADU units at 850 SF were assumed to be two-bedroom units.

It should be noted that for each zone/site analyzed, the KMA feasibility analysis conservatively assumed Low Income rent restrictions as ongoing rather than limited to only 30 years. In fact, property owners would be able to convert their Low Income ADUs to market-rate rentals or a detached extension of the primary residence after the 30-year covenant period has expired. This future benefit would generate additional surplus value to the property owner which has not been measured in this Study. 30 January 23, 2023 Item 10
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E. Feasibility Analysis
Pro Forma Models
To estimate the economic impact of the ADU Incentive Program, KMA prepared financial pro forma models for each ADU development prototype scenario. The purpose of this exercise was to determine the overall viability of the ADU Incentive Program and potential enhanced incentives that are likely to increase development of deed-restricted Low Income ADUs.

Financial pro formas are a standard tool utilized by developers and investors to analyze the feasibility of a proposed development. The pro forma model estimates the cost to build the ADUs and additional FAR allowance area; the additional sales and/or rental revenue that can be achieved upon completion; and the resulting value surplus/(shortfall) to the property owner. It is important to keep in mind that financial pro formas for proposed development scenarios represent a series of estimates of probable outcomes. While these are appropriate and useful for conceptual planning purposes, they do not guarantee specific outcomes. The actual circumstances for individual ADU developments – physical, planning, market, financial, and other factors – will likely vary from the findings presented in this Study.

The Appendix provides the detailed pro forma analyses prepared by KMA for each ADU development prototype scenario. Each attachment in the Appendix is organized as follows:

Table 1 Project Description
Table 2 Estimate of Development Costs
Table 3 Estimate of Value / Net Operating Income
Table 4 Estimate of Surplus Value/(Shortfall)
Each attachment displays a pro forma estimating the difference between current market value of the existing development on the site and the surplus value or (shortfall) generated by the development of ADU units and additional FAR allowances.

Analysis Steps
Following is a description of each step of the feasibility analysis. For illustrative purposes, each step is described in the context of the R1-10 zone/prototype scenario, detailed in the Appendix, Attachment A. 31 January 23, 2023 Item 10
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• Step 1: Project Description - Determine the development program for the site (i.e., gross building area, number of units, affordability mix, etc.) under two scenarios: (a) development of the site under existing FAR limits with no ADUs; and (b) development of the site with additional FAR allowances and ADU units.
• Step 2: Estimate Development Costs - Estimate development costs to build the additional FAR bonus area(s) and the ADU unit(s).

As shown in Table IV-6, in the R1-10 zone, construction costs for the FAR bonus area and market-rate detached ADU are estimated at $600 per SF, and construction costs for the affordable JrADU was estimated at $450 per SF, for total construction costs of $1.035 million.

Table IV-6: Estimate of Construction Costs – R1-10
R1-10
Building Area $/SF Construction
Costs
FAR Bonus Area 500 SF $600/SF $0.300 M
ADUs
Affordable JrADU 500 SF $450/SF $0.225 M
Market-Rate Detached ADU 850 SF $600/SF $0.510 M
Total/Average for ADUs 1,350 SF $544/SF $0.735 M
Total Construction Costs 1,850 SF $599/SF $1.035 M
• Step 3: Estimate Value / Net Operating Income – Estimate: (a) the current market value of the existing structure(s) on the site; and (b) the anticipated market value of the new FAR bonus area and ADU building area developed on the site. Estimates of market value, rents, and affordable rents were determined as described in Sections IV.C and IV.D above.

Table IV-7 provides a summary of values estimated in the R1-10 zone. The market value of the existing single-family home in the R1-10 zone was estimated at $5.0 million, or $2,000 per SF. The additional FAR bonus area and the detached market-rate ADU were estimated to increase value at 50% of the primary home’s per SF value or $1,000 per SF. The value for the affordable JrADU was estimated using the income approach to value for a one-bedroom unit restricted at Low Income. The resulting total value upon completion is estimated at $6.55 million.
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Table IV-7: Estimate of Value – R1-10
R1-10
Building Area
Value or
Rent/SF
Total Value
Existing Structure 2,500 SF $2,000/SF $5.00 M
Market Value Increase
FAR Bonus Area 500 SF $1,000/SF $0.50 M
Market-Rate ADU 850 SF $1,000/ SF $0.85 M
Total Market Value
Increase
1,350 SF $1,000/SF $1.35 M
Value of Affordable Unit
JrADU Value 500 SF $400/SF $0.20 M
Total Value upon
Completion
4,350 SF $1,506/SF $6.55 M
• Step 4: Estimate Surplus Value/(Shortfall) - Calculate surplus value/(shortfall) by: (a) subtracting the construction costs required to develop the ADU units and additional FAR allowances (Step 2) from (b) increase in total property value generated by the development (Step 3). As shown in Table IV-8, the calculation of surplus value/(shortfall) for the R1-10 zone/prototype scenario yields a surplus of $515,000.

Table IV-8: Estimate of Surplus Value/(Shortfall) - R1-10 R1-10
Market Value
Current Market Value $5.00 M
FAR Bonus Area Value $0.50 M
Market-Rate ADU Value $0.85 M
Affordable JrADU Value $0.20 M
Total Value upon Completion $6.55 M
(Less) Current Market Value
Subtotal Increase in Value
($5.00 M)
$1.55 M
(Less) Construction Costs ($1.035 M)
Surplus Value/(Shortfall) $0.515 M
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Feasibility Analysis Conclusions
The surplus value/(shortfall) conclusions provides an indicator of a property owner’s willingness to consider developing a Low Income ADU on their property. Financial feasibility was measured by estimating the return on investment to a property owner. Return on investment was defined as surplus value/(shortfall) divided by the required investment to develop the FAR bonus area(s) and ADU(s) in each scenario. KMA used the following benchmarks to rank the relative financial feasibility of the various scenarios.

High Feasibility: Greater than 25% return on investment. The existing incentives are sufficient to encourage participation in the ADU Incentive Program.

Medium Feasibility: 11%-24% return on investment. May need additional incentives to encourage participation in the ADU Incentive Program.

Low Feasibility: Less than 10% return on investment. Additional incentives are needed to encourage participation in the ADU Incentive Program.

The KMA key findings from the ADU feasibility analysis for the R1-10, R2, and RM-West zones are summarized in Table IV-9.

Table IV-9: ADU Incentive Program – Estimate of Surplus Value/(Shortfall) Zone R1-10 R2 RM-West
Market Value upon
Completion
$6.55 M $7.25 M $6.47 M
(Less) Current Value ($5.00 M) ($5.51 M) ($5.63 M)
(Less) Construction Costs ($1.03 M) ($1.28 M) ($0.77 M) Surplus Value/(Shortfall) $0.52 M $0.46 M $0.07 M
% of Required Investment 49.8% 35.8% 9.5%
Table IV-9 demonstrates that increased participation in the ADU Incentive Program is more likely to occur when property owners are allowed the opportunity to develop both an affordable ADU and a market-rate ADU, in addition to the FAR bonus allowance, as modeled in the R1-10 and R2 zones. Conversely, participation in the ADU Incentive Program is less likely where the property owner is limited to developing only one (1) affordable ADU on their property, in combination with the FAR bonus allowance, as modeled in the RM-West zone.
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Conclusions from the ADU feasibility analysis for the RM-South zone are summarized in Table IV-10. As shown, KMA analyzed three potential ADU development scenarios for the RM-South zone prototype featuring a range of additional ADU and FAR bonus area units.

Table IV-10: ADU Incentive Program – Estimate of Surplus Value/(Shortfall) – RM-South Zone Zone RM-South
Existing FAR
Limit
No ADUs
Scenario 1 Scenario 2 Scenario 3
2 ADUs/
1 FAR Bonus Unit
3 ADUs/
2 FAR Bonus Units
7 ADUs/
3 FAR Bonus Units
Total Value Upon Completion $39.78 M $41.63 M $42.67 M $46.21 M (Less) Construction Costs $0 ($1.43 M) ($2.31 M) ($4.84 M) Residual Value $39.78 M $40.20 M $40.36 M $41.37 M
Value Surplus/(Shortfall)
---
$0.42 M $0.58 M $1.59 M
% of Required Investment 29.2% 25.1% 32.8%
The conclusions from the RM-South analysis indicate that the ADU Incentive Program should be feasible for owners of existing multi-family apartment complexes where it is physically possible to build additional units through ADUs and FAR bonus areas within existing underutilized spaces. 35 January 23, 2023 Item 10
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V. LIMITING CONDITIONS

1. The analysis contained in this document is based, in part, on data from secondary sources such as state and local government, planning agencies, real estate brokers, and other third parties. While KMA believes that these sources are reliable, we cannot guarantee their accuracy.

2. The analysis assumes that neither the local nor national economy will experience a major recession. If an unforeseen change occurs in the economy, the conclusions contained herein may no longer be valid.

3. The findings are based on economic rather than political considerations. Therefore, they should be construed neither as a representation nor opinion that government approvals for development can be secured.

4. Development opportunities are assumed to be achievable during the specified time frame. A change in development schedule requires that the conclusions contained herein be reviewed for validity.

5. The analysis, opinions, recommendations, and conclusions of this document are KMA's informed judgment based on market and economic conditions as of the date of this report. Due to the volatility of market conditions and complex dynamics influencing the economic conditions of the building and development industry, conclusions and recommended actions contained herein should not be relied upon as sole input for final business decisions regarding current and future development and planning.

6. Any estimates of development costs, capitalization rates, income and/or expense projections are based on the best available project-specific data as well as the experiences of similar projects. They are not intended to be projections of the future for the specific project. No warranty or representation is made that any of the estimates or projections will actually materialize.

7. KMA is not advising or recommending any action be taken by City with respect to any prospective, new, or existing municipal financial products or issuance of municipal securities (including with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues).

8. KMA is not acting as a Municipal Advisor to the City and does not assume any fiduciary duty hereunder, including, without limitation, a fiduciary duty to the City pursuant to Section 15B of the Exchange Act with respect to the services provided hereunder and any information and material contained in KMA’s work product.
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9. The City shall discuss any such information and material contained in KMA’s work product with any and all internal and/or external advisors and experts, including its own municipal advisors, that it deems appropriate before acting on the information and material. 37 January 23, 2023 Item 10

APPENDIX
Economic Study of the 6th Cycle Housing Element
City of Del Mar

ACCESSORY DWELLING UNIT (ADU) INCENTIVE PROGRAM

FEASIBILITY ANALYSIS

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SUMMARY TABLE

FEASIBILITY OF ALTERNATIVE ADU SCENARIOS - ADU INCENTIVE PROGRAM ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
Affordable Units 1 Unit 1 Unit 1 Unit 1 Unit 2 Units 3 Units I. Assumed Lot Size
II. • • • • • •
III. Building Area Existing SFR 2,500 SF Duplex Units 1 and 2 2,450 SF Existing SFR 2,250 SF 41,633 SF 41,633 SF 41,633 SF IV. Building Area (1) Existing SFR 2,000 SF Duplex Units 1 and 2 2,450 SF Existing SFR 2,250 SF Existing complex 41,633 SF Existing complex 41,633 SF Existing complex 41,633 SF Bonus Area 500 SF Bonus Area 500 SF Bonus Area 500 SF Bonus Area 500 SF Bonus Area 1,000 SF Bonus Area 1,500 SF ADU Area 1,350 SF (2) ADU Area 1,700 SF ADU Area 850 SF ADU Area 1,700 SF ADU Area 2,550 SF ADU Area 5,950 SF Total 3,850 SF Total 4,650 SF Total 3,600 SF Total 43,833 SF Total 45,183 SF Total 49,083 SF V. Surplus Value/(Shortfall) $515,000 $457,000 $73,000 $1,590,000 % of Required Investment 49.8% 35.8% 9.5% 29.2% 25.1% 32.8% % of Existing Value 10.3% 8.3% 1.3% 1.0% 1.5% 4.0%
(1) Bonus Area and ADU Area are FAR exempt space.
(2) Includes JrADU within the primary dwelling structure. (3) May be subject to special requirements imposed by the Coastal Commission.

Additional ADUs if constructed
within existing underutilized
spaces of a multi-unit building
that are not controlled by an
individual dwelling unit on the
multi-unit lot.

Maximum of one (1) ADU per
lot if the primary dwelling
units are detached; or
A B
Allowable ADU Development
Scenario Modeled
Maximum of two detached ADUs per
lot for lots with multi-unit
development that contains two or
more primary units in a building
Additional ADUs if constructed
within existing underutilized
spaces of a multi-unit building
that are not controlled by an
individual dwelling unit on the
multi-unit lot.
7 ADU Units /
3 Additional Bonus Units

2.23 Acres
Additional ADUs if constructed
within existing underutilized
spaces of a multi-unit building
that are not controlled by an
individual dwelling unit on the
multi-unit lot.

Existing
complex

BASE CASE SCENARIO (NO ADU)
10,000 SF 7,000 SF 5,000 SF 2.23 Acres
One (1) detached ADU and one
(1) Jr ADU per lot
Existing complex
R1-10 R2
Existing
complex
Zone
C
$417,000 $579,000

BONUS SCENARIO (WITH ADU)
RM-South
D
RM-West (3) 2 ADU Units /
1 Additional Bonus Unit
3 ADU Units /
2 Additional Bonus Units

2.23 Acres
Prepared by: Keyser Marston Associates, Inc.

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Attachment A
Feasibility Analysis
Economic Study of the 6th Cycle Housing Element
ADU Incentive Program
R1-10 Zone

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TABLE A-1
PROJECT DESCRIPTION - ADU INCENTIVE PROGRAM - R1-10
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 10,000 SF 10,000 SF
II. Gross Building Area (GBA)
Existing Residence 2,500 SF 2,000 SF
FAR Bonus Area 0 SF 500 SF (1)
Affordable JrADU 0 SF 500 SF (1)(2)
Market-Rate Detached ADU 0 SF 850 SF (1)
Total GBA 2,500 SF 3,850 SF
III. Floor Area Ratio 0.25 0.20
IV. Number of Units
Existing Residence 1 Unit 1 Unit
Affordable JrADU 0 Units 1 Unit
Market-Rate ADU 0 Units 1 Unit
Total Units 1 Unit 3 Units
V. Affordability Mix
Market-Rate Units 1 Unit 2 Units
Affordable Units
Low 0 Units 1 Unit
Total 1 Unit 3 Units
(1) Reflects FAR exempt space.
(2) JrADU is within the primary dwelling structure.

R1-10
Existing FAR Limit
No ADU
Additional FAR Allowance
Build ADU
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TABLE A-2
ESTIMATE OF CONSTRUCTION COSTS - ADU INCENTIVE PROGRAM - R1-10 ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. FAR Bonus Area 0 SF $0 /SF $0 500 SF $600 /SF $300,000 II. ADU
A. Affordable JrADU 0 SF $0 /SF $0 500 SF $450 /SF $225,000 B. Market-Rate Detached ADU 0 SF $0 /SF $0 850 SF $600 /SF $510,000 C. Total ADU 0 SF $0 /SF $0 1,350 SF $544 /SF $735,000
III. Total Construction Costs 0 SF $0 /SF $0 1,850 SF $559 SF $1,035,000 R1-10
Existing FAR Limit
No ADU
Additional FAR Allowance
Build ADU
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TABLE A-3
ESTIMATE OF VALUE - ADU INCENTIVE PROGRAM - R1-10
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Current Market Value
Existing Structure 2,500 SF $2,000 /SF $5,000,000 2,500 SF $2,000 /SF $5,000,000 II. Market Value Increase from FAR Bonus Area
Per SF @ 50% of Existing Home Value 0 SF $0 /SF $0 500 SF $1,000 /SF $500,000 III. ADU Value
A. Affordable JrADU 0 SF $0 /SF $0 500 SF $400 /SF $200,000 (1) B. 1 Market-Rate Detached ADU
Per SF @ 50% of Existing Home Value 0 SF $0 /SF $0 850 SF $1,000 /SF $850,000 C. Total ADU 0 SF $0 /SF $0 1,350 SF $778 /SF $1,050,000 IV. Total Market Value 2,500 SF $2,000 /SF $5,000,000 4,350 SF $1,506 SF $6,550,000 (1) Reflects the value of a one bedroom ADU @ Low Income; see Worksheet 1.

R1-10
Existing FAR Limit
No ADU
Additional FAR Allowance
Build ADU
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TABLE A-4
ESTIMATE OF FINANCING SURPLUS VALUE (SHORTFALL) - ADU INCENTIVE PROGRAM - R1-10 ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Market Value
Current Market Value $5,000,000 $5,000,000
FAR Bonus Area Value $0 $500,000
ADU Value $0 $1,050,000
Total Market Value $5,000,000 $6,550,000
II. (Less) Current Market Value ($5,000,000) ($5,000,000) III. (Less) Construction Costs $0 ($1,035,000)
IV. Surplus Value/(Shortfall) $0 $515,000
R1-10
Existing FAR Limit
No ADU
Additional FAR Allowance
Build ADU
Prepared by: Keyser Marston Associates, Inc.

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ADU Incentive Program
Attachment B
R2 Zone
Feasibility Analysis
Economic Study of the 6th Cycle Housing Element

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TABLE B-1
PROJECT DESCRIPTION- ADU INCENTIVE PROGRAM - ADU INCENTIVE PROGRAM - R2 ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 7,000 SF 7,000 SF
II. Gross Building Area (GBA)
Existing Residence 2,450 SF 2,450 SF
FAR Bonus Area 0 SF 500 SF (1)
Affordable ADU 0 SF 850 SF (1)
Market-Rate Detached ADU 0 SF 850 SF (1)
Total GBA 2,450 SF 4,650 SF
III. Floor Area Ratio 0.35 0.66
IV. Number of Units
Existing Residence 1 Unit 1 Unit
Affordable ADU 0 Units 1 Unit
Market-Rate ADU 0 Units 1 Unit
Total Units 1 Unit 3 Units
V. Affordability Mix
Market-Rate Units 1 Unit 2 Units
Affordable Units
Low 0 Units 1 Unit
Total 1 Unit 3 Units
(1) Reflects FAR exempt space.

R2
Existing FAR Limit
No ADU
Additional FAR Allowance
Build ADU
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TABLE B-2
ESTIMATE OF CONSTRUCTION COSTS - ADU INCENTIVE PROGRAM - R2 ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. FAR Bonus Area 0 SF $0 /SF $0 500 SF $600 /SF $300,000 II. ADU
A. Affordable ADU 0 SF $0 /SF $0 850 SF $550 /SF $468,000 B. Market-Rate Detached ADU 0 SF $0 /SF $0 850 SF $600 /SF $510,000 C. Total ADU 0 SF $0 /SF $0 1,700 SF $575 /SF $978,000
III. Total Construction Costs 0 SF $0 /SF $0 2,200 SF $581 SF $1,278,000 R2
Existing FAR Limit
No ADU
Additional FAR Allowance
Build ADU
Prepared by: Keyser Marston Associates, Inc.

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TABLE B-3
ESTIMATE OF VALUE - ADU INCENTIVE PROGRAM - R2
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Current Market Value
Existing Structure 2,450 SF $2,250 /SF $5,513,000 2,450 SF $2,250 /SF $5,513,000 II. Market Value Increase from FAR Bonus Area
Per SF @ 50% of Existing Home Value 0 SF $0 /SF $0 500 SF $1,125 /SF $563,000 III. ADU Value
A. Affordable ADU 0 SF $0 /SF $0 850 SF $254 /SF $216,000 (1) B. Market-Rate Detached ADU
Per SF @ 50% of Existing Home Value 0 SF $0 /SF $0 850 SF $1,125 /SF $956,000 C. Total ADU 0 SF $0 /SF $0 1,700 SF $689 /SF $1,172,000 IV. Total Market Value 2,450 SF $2,250 /SF $5,513,000 4,650 SF $1,559 SF $7,248,000 (1) Reflects the value of a two bedroom ADU @ Low Income; see Worksheet 1.

R2
Existing FAR Limit
No ADU
Additional FAR Allowance
Build ADU
Prepared by: Keyser Marston Associates, Inc.

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TABLE B-4
ESTIMATE OF SURPLUS VALUE/(SHORTFALL) - ADU ICENTIVE PROGRAM - R2 ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Market Value
Current Market Value $5,513,000 $5,513,000
FAR Bonus Area Value $0 $563,000
ADU Value $0 $1,172,000
Total Market Value $5,513,000 $7,248,000
II. (Less) Current Market Value ($5,513,000) ($5,513,000) III. (Less) Construction Costs $0 ($1,278,000)
IV. Surplus Value/(Shortfall) $0 $457,000
R2
Existing FAR Limit
No ADU
Additional FAR Allowance
Build ADU
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ADU Incentive Program
Attachment C
RM-West Zone
Feasibility Analysis
Economic Study of the 6th Cycle Housing Element

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TABLE C-1

PROJECT DESCRIPTION - ADU INCENTIVE PROGRAM - RM-WEST
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 5,000 SF 5,000 SF
II. Gross Building Area (GBA)
Existing Residence 2,250 SF 2,250 SF
FAR Bonus Area 0 SF 500 SF (1)
Affordable ADU 0 SF 850 SF (1)
Market-Rate Detached ADU 0 SF 0 SF
Total GBA 2,250 SF 3,600 SF
III. Floor Area Ratio 0.45 0.72
IV. Number of Units
Existing Residence 1 Unit 1 Unit
Affordable ADU 0 Units 1 Unit
Market-Rate ADU 0 Units 0 Unit
Total Units 1 Unit 2 Units
V. Affordability Mix
Market-Rate Units 1 Unit 1 Unit
Affordable Units
Low 0 Units 1 Unit
Total 1 Unit 2 Units
(1) Reflects FAR exempt space.

RM-West
Existing FAR Limit
No ADU
Additional FAR Allowance /
Build ADU
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TABLE C-2

ESTIMATE OF CONSTRUCTION COSTS - ADU INCENTIVE PROGRAM - RM-WEST ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. FAR Bonus Area 0 SF $0 /SF $0 500 SF $600 /SF $300,000 II. ADU
A. Affordable ADU 0 SF $0 /SF $0 850 SF $550 /SF $468,000 B. Market-Rate Detached ADU 0 SF $0 /SF $0 0 SF $600 /SF $0 C. Total ADU 0 SF $0 /SF $0 850 SF $551 /SF $468,000
III. Total Construction Costs 0 SF $0 /SF $0 1,350 SF $569 SF $768,000 RM-West
Existing FAR Limit
No ADU
Additional FAR Allowance
Build ADU
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TABLE C-3

ESTIMATE OF VALUE - ADU INCENTIVE PROGRAM - RM-WEST
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Current Market Value
Existing Structure 2,250 SF $2,500 /SF $5,625,000 2,250 SF $2,500 /SF $5,625,000 II. Market Value Increase from FAR Bonus Area
Per SF @ 50% of Existing Home Value 0 SF $0 /SF $0 500 SF $1,250 /SF $625,000 III. ADU Value
A. Affordable ADU 0 SF $0 /SF $0 850 SF $254 /SF $216,000 (1) B. Market-Rate Detached ADU
Per SF @ 50% of Existing Home Value 0 SF $0 /SF $0 0 SF $1,250 /SF $0 C. Total ADU 0 SF $0 /SF $0 850 SF $254 /SF $216,000
IV. Total Market Value 2,250 SF $2,500 /SF $5,625,000 3,600 SF $1,796 SF $6,466,000 (1) Reflects the value of a two bedroom ADU @ Low Income; see Worksheet 1.

RM-West
Existing FAR Limit
No ADU
Additional FAR Allowance
Build ADU
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TABLE C-4

ESTIMATE OF SURPLUS VALUE/(SHORTFALL) - ADU INCENTIVE PROGRAM - RM-WEST ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Market Value
Current Market Value $5,625,000 $5,625,000
FAR Bonus Area Value $0 $625,000
ADU Value $0 $216,000
Total Market Value $5,625,000 $6,466,000
II. (Less) Current Market Value ($5,625,000) ($5,625,000) III. (Less) Construction Costs $0 ($768,000)
IV. Surplus Value/(Shortfall) $0 $73,000
(1) Reflects the value of a one bedroom ADU @ Low Income; see Worksheet 1.

RM-West
Existing FAR Limit
No ADU
Additional FAR Allowance
Build ADU
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ADU Incentive Program
Attachment D
RM-South Zone
Feasibility Analysis
Economic Study of the 6th Cycle Housing Element

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TABLE D-1

PROJECT DESCRIPTION - ADU INCENTIVE PROGRAM - RM-SOUTH - EXISTING MULTI-FAMILY COMPLEX ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Site Area 2.23 Acres 2.23 Acres 2.23 Acres 2.23 Acres II. Gross Building Area (GBA)
A. Existing Apartment Complex
Net Residential 41,216 SF 99% 41,216 SF 99% 41,216 SF 99% 41,216 SF 99% Circulation/Common Area 416 SF 1% 416 SF 1% 416 SF 1% 416 SF 1% Total Existing GBA 41,633 SF 100% 41,633 SF 100% 41,633 SF 100% 41,633 SF 100% B. FAR Bonus Area 0 SF 500 SF 1,000 SF 1,500 SF
C. ADU Area 0 SF 1,700 SF 2,550 SF 5,950 SF
D. Total GBA 41,633 SF 43,833 SF 45,183 SF 49,083 SF
III. Construction Type / Number of Stories Type V / 2 Stories Type V / 2 Stories Type V / 2 Stories Type V / 2 Stories IV. Number of Units Unit Size Unit Size Unit Size Unit Size Existing Aparment Complex 59 Units 699 SF 59 Units 699 SF 59 Units 699 SF 59 Units 699 SF FAR Bonus Area 0 Units -- 1 Unit 500 SF 2 Units 500 SF 3 Units 500 SF ADU Area 0 Units -- 2 Units 850 SF 3 Units 850 SF 7 Units 850 SF Total Units 59 Units 699 SF 62 Units 700 SF 64 Units 699 SF 69 Units 705 SF V. Affordability Mix
Market-Rate Units 59 Units 100% 61 Units 98% 62 Units 97% 66 Units 96% Affordable Units
Low 0 Units 0% 1 Unit 2% 2 Units 3% 3 Units 4%
Total 59 Units 100% 62 Units 100% 64 Units 100% 69 Units 100% VI. Density 26 Units/Acre 28 Units/Acre 29 Units/Acre 31 Units/Acre D
# Units
RM-South
Multi-Unit Residential Sites
# Units # Units # Units
2 ADUs / 1 Additional FAR Bonus Unit 3 ADUs / 2 Additional FAR Bonus Units 7 ADUs / 3 Additional FAR Bonus Units Existing FAR Limit
No ADU
Additional FAR Allowance / Build ADU
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TABLE D-2

ESTIMATE OF CONSTRUCTION COSTS - ADU INCENTIVE PROGRAM - RM SOUTH - EXISTING MULTI-FAMILY COMPLEX ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. FAR Bonus Area 0 SF $0 /SF $0 500 SF $650 /SF $325,000 1,000 SF $650 /SF $650,000 1,500 SF $650 /SF $975,000 II. ADU Construction Costs $0 1,700 SF $650 /SF $1,105,000 2,550 SF $650 /SF $1,658,000 5,950 SF $650 /SF $3,868,000 III. Total Construction Costs $0 $1,430,000 $2,308,000 $4,843,000 RM-South
Multi-Unit Residential Sites
Existing FAR Limit
No ADU 2 ADU Units / 1 Additional FAR Bonus Unit 3 ADU Units / 2 Additional FAR Bonus Unit 7 ADU Units / 3 Additional FAR Bonus Unit Additional FAR Allowance / Build ADU
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TABLE D-3

NET OPERATING INCOME - ADU INCENTIVE PROGRAM - RM-SOUTH - EXISTING MULTI-FAMILY COMPLEX ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
II. Gross Scheduled Income (GSI)
# Units $/SF $/Month Annual # Units $/SF $/Month Annual # Units $/SF $/Month Annual # Units $/SF $/Month Annual A. Existing Aparment Complex
Subtotal/Average 699 SF 59 $4.75 $3,300 $2,336,000 59 $4.75 $3,300 $2,336,000 59 $4.75 $3,300 $2,336,000 59 $4.75 $3,300 $2,336,000 B. Affordable
One Bedroom @ 60% AMI 500 SF 0 $0.00 $0 $0 1 $2.44 $1,221 $15,000 2 $2.44 $1,221 $29,000 3 $2.44 $1,221 $44,000 C. Market Rate - ADU 850 SF 0 $0.00 $0 $0 2 $4.71 $4,000 $96,000 3 $4.71 $4,000 $144,000 7 $4.71 $4,000 $336,000 D. Total/Average 59 $4.72 $3,299 $2,336,000 62 $4.70 $3,289 $2,447,000 64 $4.67 $3,267 $2,509,000 69 $4.65 $3,280 $2,716,000 Add: Other Income $100 /Unit/Month $71,000 $100 /Unit/Month $74,000 $100 /Unit/Month $77,000 $100 /Unit/Month $83,000 E. Total Gross Scheduled Income (GSI) $2,407,000 $2,521,000 $2,586,000 $2,799,000 III. Effective Gross Income
(Less) Vacancy 5.0% of GSI ($120,000) 5.0% of GSI ($126,000) 5.0% of GSI ($129,000) 5.0% of GSI ($140,000) Effective Gross Income (EGI) $2,287,000 $2,395,000 $2,457,000 $2,659,000 IV. Operating Expenses
(Less) Operating Expenses $5,750 /Unit/Year ($339,250) $5,750 /Unit/Year ($357,000) $5,750 /Unit/Year ($368,000) $5,750 /Unit/Year ($397,000) (Less) Property Taxes(1) $7,424 /Unit/Year ($438,000) $7,387 /Unit/Year ($458,000) $7,328 /Unit/Year ($470,000) $7,362 /Unit/Year ($508,000) (Less) Replacement Reserves $300 /Unit/Year ($18,000) $300 /Unit/Year ($19,000) $300 /Unit/Year ($19,000) $300 /Unit/Year ($21,000) Total Operating Expenses $13,479 /Unit/Year ($795,250) $13,452 /Unit/Year ($834,000) $13,375 /Unit/Year ($857,000) $13,420 /Unit/Year ($926,000) 35% of EGI 35% of EGI 35% of EGI 35% of EGI
V. Net Operating Income (NOI) $1,491,750 $1,561,000 $1,600,000 $1,733,000 (1) Based on capitalized income approach; assumes a 1.10% tax rate and 3.75% cap rate.

Multi-Unit Residential Sites
RM-South
Unit Size
Existing FAR Limit
No ADU 2 ADU Units / 1 Additional FAR Bonus Unit 3 ADU Units / 2 Additional FAR Bonus Unit 7 ADU Units / 3 Additional FAR Bonus Unit Additional FAR Allowance / Build ADU
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TABLE D-3

ESTIMATE OF SURPLUS VALUE/(SHORTFALL) - ADU INCENTIVE PROGRAM - RM SOUTH - EXISTING MULTI-FAMILY COMPLEX ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
I. Capitalized Value Upon Completion
Stabilized Net Operating Income $1,491,750 $1,561,000 $1,600,000 $1,733,000 Capitalization Rate @ 3.75% 3.75% 3.75% 3.75%
II. Capitalized Value Upon Completion $674,000 /Unit $39,780,000 $671,000 /Unit $41,627,000 $667,000 /Unit $42,667,000 $670,000 /Unit $46,213,000 III. (Less) Development Costs - excluding Acquisition Costs $0 ($1,430,000) ($2,308,000) ($4,843,000) IV. Residual Value $39,780,000 $40,197,000 $40,359,000 $41,370,000 V. Financing Surplus/(Deficit) (1) $417,000 $579,000 $1,590,000 Additional FAR Allowance / Build ADU
RM-South
D
Multi-Unit Residential Sites
2 ADU Units / 1 Additional FAR Bonus Unit 3 ADU Units / 2 Additional FAR Bonus Units 7 ADU Units / 3 Additional FAR Bonus Units Existing FAR Limit
No ADU
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Estimate of ADU Value - Low Income

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WORKSHEET 1

ESTIMATE OF ADU VALUE - LOW INCOME
ECONOMIC STUDY OF THE 6TH CYCLE HOUSING ELEMENT

CITY OF DEL MAR
One Bedroom Two Bedroom
I. Percent of AMI 60% 60%
Assumed Family Size 2.0 3.0
Household Income $51,330 $57,720
II. Income Allocation to Housing 30% 30%
III. Monthly Housing Cost $1,283 $1,443
(Less) Utility Allowance (1) ($62) ($80)
IV. Maximum Monthly Rent $1,221 $1,363
V. Total Annual Rental Income $15,000 $16,000
(Less) Operating Expenses @ 20% ($3,000) ($3,200)
(Less) Property Taxes (2) ($2,000) ($2,000)
VI. Net Operating Income $10,000 $10,800
VII. Capitalized Value @ 5.0% Capitalization Rate $200,000 $216,000 (1) Reflects County of San Diego utility allowances, as of December 1, 2021.

Monthly Utility One Bedroom Two Bedrooms
Electric Heating $9 $12
Electric Cooking $5 $7
Other Electric $29 $37
Electric Water Heating $19 $24
Total $62 $80
(2) Based on capitalized income approach; assumes a 1.10% tax rate and 5.0% cap rate.

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62 January 23, 2023 Item 10
63 January 23, 2023 Item 10
64 January 23, 2023 Item 10
65 January 23, 2023 Item 10
66 January 23, 2023 Item 10
Attachment D
1 Summary of 6
th Cycle RHNA Progress
The City’s total housing unit obligation for the 6th Cycle is 175 units. As reported in the City’s 2021 Housing APR, the City produced 29 units that counted toward the 6th Cycle. As of December 31, 2022, the City created an additional 9 net-new units (with approved building permits) for a cumulative total of 38 units, which reduced the obligation down to a total production target of 137 units. The units created have all been within the “above moderate” and “moderate” income categories. Through implementation of Housing Element programs, the City will begin to see lower income unit production as well as further described below.

Following is a description of housing production progress as it applies to each income category:
 Above moderate income: The City was assigned 31 above moderate units. As reported in the City’s 2021 Housing APR, 10 units were issued building permits. An additional 5 above moderate units have been issued building permits to-date in 2022. The remaining obligation for 16 above moderate units is expected to be addressed via two approved development projects and/or future housing in the North Commercial (NC) Zone and Professional Commercial (PC) Zone:

o The City approved 40 above moderate units via the Watermark mixed-income project (APNs 299-100-47 and -48) in the NC zone. The City’s approval (administrative Coastal Development Permit – CDP21-005) was appealed to the California Coastal Commission. A decision on the appeal is still pending.

Building permits have not yet been issued.
o The City approved 6 above moderate units via the 941 Camino del Mar project.

A Building Permit application was submitted on August 10, 2022. Building permits have not yet been issued.
 Moderate Income: The City was assigned 31 moderate income units. As of April 2022, 19 units were issued building permits. An additional 4 moderate income units (new ADUs) have been issued building permits to-date in 2022, which means there are 8 moderate income units remaining. The 14 additional ADU applications currently pending Building Permit issuance will sufficiently address the City’s remaining obligation for moderate income RHNA units.
 Low Income: For the 6th Cycle, the City was assigned 64 low income units plus a 5th Cycle carryover (12 units) for 76 total low income units. [This is because the City produced only one lower income unit (deed restricted ADU) during the 5th Cycle.] The City does not receive credit towards RHNA until a building permit is issued. No building permits have been issued for 6th Cycle units in the low income category. As shown below, the City expects to meet the 76 low income units via two approved development projects (for a total of 8 low income units), future housing on the State Fairgrounds and two-City-owned properties, and implementation of deed-restricted ADUs and future housing in the NC Zone and PC Zone:
o The City approved 6 low income units via the Watermark mixed-income project (APNs 299-100-47 and -48) in the NC zone. The City’s approval was appealed to the California Coastal Commission. A decision on the appeal is still pending.

Building permits have not yet been issued.
67 January 23, 2023 Item 10
Attachment D
2 o The City approved 2 low income units in the 941 Camino del Mar project. A Building Permit application was submitted on August 10, 2022. Building permits have not yet been issued.
o The City anticipates 15 low income units will be deed restricted ADUs via an incentive program. The existing ADU incentive program is in process of being improved and expanded upon via Phase II studies that considered ADU development scenarios in six different zones and associated economic feasibility.

Once findings of the studies are available and presented to the City Council, the City will process ordinances as applicable to meet a target of 15 deed-restricted ADUs per the Housing Element.
o At least 53 low income units are expected to be addressed via a combination of future housing on public sites (State Fairgrounds and City-owned sites) and privately-owned sites in the NC Zone and PC Zone.
 The Phase I studies of future housing on the State Fairgrounds and twoCity-owned properties were completed in June 2022 and concluded that at least 61 units of lower income housing is feasible on these public sites.  The Phase II feasibility studies in process considered prototypes in the NC and PC zones and associated site-specific economic feasibility. Once findings of the studies are available and presented to the City Council, the City will process ordinances as applicable to facilitate production of lower income units on specific sites per the Housing Element.  Very Low/Extremely Low Income units: The City was assigned 37 very low/extremely low income units. To-date, no Building Permits have been issued for very low or extremely low income units. The City expects to meet the 37 units via the approved Watermark development project and a combination of future housing on the State Fairgrounds and in the NC Zone and PC Zone:
o The City approved 4 very low/extremely low income units (2 very low income units and 2 extremely low income units) via the Watermark mixed-income project (APNs 299-100-47 and -48) in the NC zone. The City’s approval was appealed to the California Coastal Commission. A decision on the appeal is still pending.

Building permits have not yet been issued.
o The remaining 33 very low/extremely low income units will be addressed via future housing at the Fairgrounds and future housing in the NC Zone and PC Zone. The City is in process of facilitating lower income units at these locations in accordance with its Housing Element program commitments. 68 January 23, 2023 Item 10
City of Del Mar
Agenda Report
________________________________________________________________________________________________________ City Council Action:

TO: Honorable Mayor and City Council Members
FROM: Councilmembers Terry Gaasterland and Dwight Worden DATE: January 23, 2023
SUBJECT: Council Discussion Regarding SANDAG Weighted Voting Process REQUESTED ACTION/RECOMMENDATION:

Councilmembers Terry Gaasterland and Dwight Worden recommend that the City Council discuss the San Diego Association of Governments (SANDAG) weighted voting process established in 2017 by Assembly Bill 805 and provide guidance to Councilmember Gaasterland as Del Mar’s primary representative to the SANDAG Board in preparation for an upcoming related SANDAG Board agenda item.

DISCUSSION/ANALYSIS:

California Assembly Bill 805 (AB 805), County of San Diego: Transportation Agencies, was signed into law on October 11, 2017, and amended provisions of the Government Code to change the SANDAG Board voting structure.

Currently, Councilmember Terry Gaasterland serves as the City’s representative to the SANDAG Board of Directors, who have an upcoming agenda item to discuss the SANDAG weighted voting process on January 27, 2023. The purpose of this agenda item is for the Council to discuss this issue and provide guidance to Councilmember Gaasterland as the City’s SANDAG Board representative in preparation for the upcoming SANDAG Board discussion.

SANDAG’s Bylaws, which includes provisions related to the weighted vote, are included with this agenda report at Attachment A. To facilitate City Council discussion, Councilmember Worden’s comments on issues related to the SANDAG Board and suggested revisions to AB 805 that were prepared prior to the bill’s adoption in 2017 are included with this agenda report as Attachment B. Additionally, AB 805 is included as Attachment C to this agenda report.

ATTACHMENTS:

Attachment A – SANDAG Bylaws
Attachment B – 2017 Councilmember Worden’s AB 805: Suggested Revisions Attachment C – AB 805
1 January 23, 2023 Item 11

SAN DIEGO ASSOCIATION OF GOVERNMENTS BYLAWS

ARTICLE I

NAME AND PURPOSE
Section 1
The name of this organization shall be the San Diego Association of Governments (hereinafter referred to as SANDAG).

Section 2
The purposes of this organization are as set forth in the San Diego Regional Transportation Consolidation Act (the “Act”1
), as established by state and federal law, and
as approved by the Board of Directors. The primary purpose for which this organization is created is to engage in regional cooperative comprehensive planning, programming and where authorized, implementation thereof, and to assist the Member Agencies.

ARTICLE II

DEFINITIONS
The following terms shall have the meanings ascribed to them within this section unless the content of their use dictates otherwise:
a. “Board Member” shall mean a voting member of the Board of Directors. b. “Region” shall mean that territory physically lying within the boundaries of San Diego County.
c. “Population” of any Member Agency shall mean that population as defined in SB 1703. d. “Fiscal Year” shall mean that year beginning July 1 and ending June 30. d. “Member Agencies” shall mean the cities within San Diego County and the County of San Diego collectively.
e. “Subregion” shall mean one of the following six geographic areas: San Diego County; the City of San Diego; "North County Coastal," which includes the cities of Del Mar, Solana Beach, Encinitas, Carlsbad, and Oceanside; "North County Inland," which includes the cities of Vista, San Marcos, Escondido, and Poway; “South County," which includes the cities of Chula Vista, National City, Imperial Beach, and Coronado; and “East County," which includes the cities of El Cajon, Santee, La Mesa, and Lemon Grove. 1 Public Utilities Code §132350 et seq.
2 January 23, 2023 Item 11

ARTICLE III

MEMBERSHIP AND ORGANIZATION
Section 1
Membership in this organization shall be as provided in state law, Board Policies, and these Bylaws.

Section 2
a. All powers of SANDAG shall be exercised by the Board of Directors. The Board of Directors may choose to delegate several of its responsibilities from time to time in accordance with Board policy.
b. Only the duly selected official representative(s), or in his or her absence, his or her duly selected alternate or alternates, shall be entitled to represent his or her Member Agency in the deliberations of the Board of Directors.
c. When changes occur, names of the official representatives and alternates shall be communicated in writing to the SANDAG Clerk of the Board by each participating Member Agency.

Section 3
There shall be at least six standing committees which shall be known as Policy Advisory Committees with the membership set forth in the Act or Board Policy. a. The procedure for subregional appointments to the Policy Advisory Committees shall be established by Board policy. In the case of the subregional appointments, the policy shall ensure a noticed, formal process wherein all Board Members (including alternates) from each subregion are provided an opportunity to participate in the selection process. Each subregion shall ensure that SANDAG staff is notified of the date, time, and location for that subregion’s meeting. After the meeting for each subregion is set by the primary Board Members, SANDAG staff shall provide Board alternates from each subregion advance notice of the meeting. A majority of the primary members present at the subregion meeting shall make a selection by January 31. An alternate member may vote in the absence of the primary member. In appointing persons to the Transportation Committee, to the extent possible, the subregions and other agencies should avoid duplication of representation from any city other than the City of San Diego.
b. Procedures for Policy Advisory Committee attendance and voting shall be established by Board policy. The policy shall ensure the formal delineation of the voting membership at each meeting.
c. The Board Chair, First Vice Chair and Second Vice Chair may serve as ex-officio, nonvoting members of the Policy Advisory Committees. d. The Board Chair shall select the Chair and Vice Chair of all Policy Advisory Committees except the Executive Committee and Audit Committee, annually in or around February. e. The Board Chair shall serve as the chair of the Executive Committee. The Board First Vice Chair shall serve as the First Vice Chair of the Executive Committee. The Board Second Vice 3 January 23, 2023 Item 11
Chair shall serve as the Second Vice Chair of the Executive Committee. f. The Chair and Vice Chair of the Audit Committee shall be selected as set forth in Board Policy No. 039.

Section 4
The Board of Directors or a Policy Advisory Committee with delegated authority shall have the authority to appoint all additional committees or working groups and may provide for the appointment of alternates to these committees if permitted by a Board Policy. a. Additional Policy Advisory Committees may be appointed by the Board of Directors as may be required to carry out general and continuing functions and may be abolished only upon specific action by the Board of Directors.
b. Ad hoc specialized subcommittees or working groups may be appointed by the Board of Directors as the need arises to accomplish specific tasks. The Policy Advisory Committees may appoint working groups to advise them. Upon completion of its assignment, each ad hoc subcommittee or working group shall disband.

Section 5
In addition to any compensation mandated by state law for Board meetings, the rates below shall apply. Persons must be present for at least 1/2 of the time set for the meeting or the duration of the meeting, whichever is less, in order to be eligible for compensation. a. For attendance by Board Members, or alternates in their absence, at Board meetings or Board subcommittee meetings, $150 per meeting.
b. For attendance by all voting members and their alternates of a Policy Advisory Committee, $100 per meeting.
c. For attendance by Board Members and alternates, or advisory Board members when serving as a chair of a Working Group, $100 per meeting.
d. The limit on the total number of paid Board, Policy Advisory Committee, and Working Group meetings is six meetings per individual per month. In no event shall a member of a Policy Advisory Committee or Working Group receive more than one stipend for attendance at a concurrent meeting.

The Chair of the Board shall receive additional monthly compensation of $700 per month, which shall include compensation for attendance at one in-person staff briefing per scheduled meeting of the Board. Any additional meetings or events attended in-person by the Chair of the Board shall be compensated in accordance with the requirements of Article III, section 5(h).
e. Both the First Vice Chair and Second Vice Chair of the Board shall receive additional monthly compensation of $350 per month, which shall include compensation for attendance at one in-person staff briefing per scheduled meeting of the Board. Any additional meetings or events attended in-person by the Vice Chair of the Board shall be compensated in accordance with the requirements of Article III, section 5(h).
4 January 23, 2023 Item 11
f. For attendance by Board Members at meetings or events other than those described above when serving as an official representative of SANDAG or from which from which SANDAG will, at the discretion of the Chair of the Board, derive a specific benefit through the inperson attendance of a representative, $100 per each day of the meeting or event in which business is conducted if within the County of San Diego, or $150 per each day of the meeting or event in which business is conducted if outside of the County of San Diego. Ethics training and similar classes of an educational nature shall not constitute an event for which compensation will be paid unless the Board Member is attending the training as an official representative of SANDAG.

ARTICLE IV

MEETINGS
Section 1
a. A quorum for a meeting of the Board of Directors shall be as provided for in Section 5 of this Article.
b. A quorum shall be required for the conduct of any business of a committee. No business shall be conducted by a committee without a quorum. A simple majority of the appointed members of a committee shall constitute a quorum. All decisions by a committee shall be by simple majority of the quorum.

Section 2
Parliamentary procedure at all meetings shall be governed by Roberts Rules of Order except as otherwise modified by state law, Board Policy, or these Bylaws. SANDAG shall forward notice of the meetings of the Board of Directors and each Policy Advisory Committee, stating the time, location, and the agenda of business to the respective members and alternates of the Board of Directors or the Policy Advisory Committees, at the earliest time possible, but in no event less than 72 hours prior to meetings, except that such written notice of regular Board of Directors’ meetings may be forwarded by first class mail or other appropriate means not less than seven days prior to such meeting.

Section 3
All meetings of a SANDAG legislative body, including without limitation regular, adjourned regular, and special meetings of the Board of Directors, shall be called, noticed, held and conducted in accordance with the provisions of the Ralph M. Brown Act (commencing with Section 54950 of the California Government Code). Closed session items should be heard by the Board of Directors unless timeliness requires consideration by the Executive Committee or, for transportation matters the Transportation Committee. The Audit Committee may hold closed sessions on matters within its purview. In any event, the Transportation Committee is authorized to convene closed sessions and make final decisions with regard to real property transactions related to transportation projects, however, this delegation does not include the authority to make a Resolution of Necessity or to commence litigation. The Transportation Committee will report real property transaction purchase amounts at the next regular meeting of the Board occurring after final execution of the purchase documents. 5 January 23, 2023 Item 11
Section 4
The Board and committees shall meet according to the following schedule:
a. The Board of Directors and Policy Advisory Committees shall hold their regular meetings on Fridays unless otherwise determined from time to time by the Board of Directors or
Policy Advisory Committee. Regular meetings of the Board of Directors shall be held on the second and fourth Friday mornings of the month at the SANDAG offices or at other locations within San Diego County, unless otherwise provided by the Board. Special meetings of the Board of Directors or Policy Advisory Committees may be called from time to time by their respective Chair.
b. Other committees shall meet whenever called by their respective Chair.

Section 5 (Sections 132351.2 and 132352.1 of the Public Utilities Code) a. There are 19 Member Agencies on the Board and a majority of the Member Agencies constitutes a quorum for the transaction of business. In order to take final action on any item, except the final vote(s) electing the Chair and First Vice Chair of the Board, which shall require use of the weighted vote procedure as described below in subsection b, a majority vote of the Board Members present on the basis of one vote per agency (tally vote) is required. After the tally vote of the Board Members is taken, a weighted vote may be called by the Board Members of any two Member Agencies unless otherwise required by law.

Approval under the weighted vote procedure requires the vote of not less than four Board Members representing separate Member Agencies and not less than 51 percent of the total weighted vote to supersede the original action of the Board. b. The election of the Chair and First Vice Chair of the Board shall require use of the weighted vote procedure set forth in Public Utilities Code Section 132351.2(e) without a prior tally vote requirement. In the event approval using the procedure in Public Utilities Code Section 132351.2(e) cannot be obtained to allow final action on the election, one or more preliminary votes may be taken using the tally vote method in order to narrow the options sufficiently to obtain approval on the final action as required by Public Utilities Code Section 132351.2(e).
c. The City and County of San Diego shall each determine how to allocate their tally vote between their two members by resolution and shall provide their resolutions to the SANDAG Clerk of the Board. The City and County of San Diego shall allocate their weighted votes equally.
d. For the weighted vote, there shall be a total of 100 votes, except additional votes shall be allowed pursuant to subdivision (h). Each Member Agency shall have that number of votes determined by the following apportionment formula, provided that each agency shall have at least one vote, no agency shall have more than 50 votes, and there shall be no fractional votes in the allocation of votes to each Member Agency:
(1) If any agency has 50 percent or more of the total population of the San Diego County region, allocate 50 votes to that agency and follow paragraph (2), if not, follow paragraph (3).
6 January 23, 2023 Item 11
(2) Total the population of the remaining agencies determined in paragraph (1) and compute the percentage of this total that each agency has. (A) Multiply each percentage derived above by 50 to determine fractional shares. (B) Boost fractions that are less than one, to one and add the whole numbers. (C) If the answer to subparagraph (B) is 50, drop all fractions and the whole numbers are the votes for each Member Agency.
(D) If the answer to subparagraph (B) is less than 50, the remaining vote(s) is allocated one each to the Member Agency having the highest fraction excepting those whose vote was increased to one pursuant to subparagraph (B) above. (E) If the answer to subparagraph (B) is more than 50, the excess vote is taken one each from the Member Agency with the lowest fraction. In no case shall a Member Agency’s vote be reduced to less than one.
(3) Total the population determined in paragraph (1) and compute the percentage of this total that each Member Agency has.
(A) Boost fractions that are less than one to one and add the whole numbers. (B) If the answer to subparagraph (A) is 100, drop all fractions and the whole numbers are the votes for each Member Agency.
(C) If the answer to subparagraph (A) is less than 100, the remaining vote(s) is allocated one each to the Member Agency having the highest fraction excepting those whose vote was increased to one pursuant to subparagraph (A) above. (D) If the answer to subparagraph (A) is more than 100, the excess vote(s) is taken one each from the agency with the lowest fraction. In no case shall a Member Agency’s vote be reduced to less than one.
e. When a weighted vote is taken on any item that requires more than a majority vote of the Board, it shall also require the supermajority percentage of the weighted vote. f. The weighted vote formula shall be recomputed in the above manner every July 1. g. For purposes of subsection d, the population of the County of San Diego is the population in the unincorporated area of the county. In those years when the primary representative of the San Diego County Board of Supervisors to the SANDAG Board of Directors is from a district that is substantially an incorporated area, a supervisor who represents a district that is substantially an unincorporated area shall be appointed to the Board as the secondary representative. Alternatively, in those years when the primary representative of the San Diego County Board of Supervisors is from a district that is substantially an unincorporated area, a supervisor who represents a district that is substantially an incorporated area shall be appointed to the Board as the secondary representative. h. Any newly incorporated city shall receive one vote under the weighted vote procedure specified above until the next recomputation of the weighted vote formula, at which time the new agency shall receive votes in accordance with the recomputed formula. Until this 7 January 23, 2023 Item 11
recomputation, the total weighted vote may exceed 100.

ARTICLE V

OFFICERS AND THEIR DUTIES
Section 1
The Board of Directors shall have as officers a Chair, First Vice Chair and Second Vice Chair who are primary members of the Board. Policy Advisory Committees shall have as officers a Chair and Vice Chair, who are primary or alternate members of the Board and primary members of their respective committees. The Executive Director shall be the Secretary of the Board and each Policy Advisory Committee.
a. The Chair shall preside over Board and committee meetings and have general supervision of Board and committee affairs. The Chair shall sign all official documents when directed to do so by the Board and committees respectively.
b. The First Vice Chair shall perform the duties of the Chair in his or her absence and perform any duties that the Chair may require. The Second Vice Chair shall perform the duties of the First Vice Chair in his or her absence and perform any duties that the Chair may require.
c. In the event of the absence of all officers of the Board, the Immediate Past Chair may preside or the Board Chair may appoint a voting member of the Board or committee in advance to act as acting chair of the body for that meeting.

Section 2
The Board may delegate authority to the Board Chair for action consistent with Board approved criteria on categories of items.

Section 3
Election of officers of the Board of Directors shall be held every two years during a regular meeting on or before January 15. A majority of the Board Members may approve variations to the schedule in this Section in the event of a vacancy or other exigency. All officers of the Board shall be from different subregions. Officers for the Board of Directors shall be elected in the following manner:
a. Nominations for any office may be made by Board Members at the election meeting.

Only candidates who are primary members nominated from the floor on the day of election will be considered for office.
b. Nominations shall take into account the nominee’s availability, experience, skills, geographic diversity, and the benefits associated with having the First Vice Chair succeed the outgoing Chair and the Second Vice Chair succeed the outgoing First Vice Chair. c. The Chair and First Vice Chair shall be elected pursuant to the weighted vote process set forth in Article IV, Section 5(b) of these Bylaws.
8 January 23, 2023 Item 11
d. All officers shall be elected for a term(s) of two years or until their successors are elected.

They shall begin their term of office immediately following the election. e. In the event that the Board Member who has been elected Chair, First Vice Chair or Second Vice Chair is no longer a primary member of the Board of Directors, the office shall be considered vacant.
f. Any vacated officer position may be filled at the next regular Board meeting by nominations from the floor, and the election shall be carried out pursuant to the voting procedure otherwise applicable to the vacated officer position.

Section 4
a. The Board of Directors shall appoint an Executive Director who shall hold office until he or she resigns or is removed by the Board of Directors. The Executive Director shall be the chief executive officer of SANDAG and shall be permitted to utilize the title of Executive Director and/or Chief Executive Officer interchangeably with equal force and effect. The Executive Director shall have charge of all projects and property of SANDAG. The Executive Director and if she or he is an employee, the independent performance auditor, shall file with the Director of Finance of SANDAG an official bond in the minimum amount of $100,000 or such larger amount as the Board of Directors specifies, guaranteeing faithful performance of his or her duties.
b. The Executive Director will be responsible to the SANDAG Board of Directors as set out in Board Policies and administrative policies and manuals for the administration of SANDAG’s business, including: (1) development of program objectives, definition, directions and priorities;
(2) management of SANDAG programs and coordination of staff and support services; (3) the development of financial support programs for SANDAG activities; (4) the recommendation and submission of an annual SANDAG program budget to the Board of Directors; (5) execution of the adopted personnel, purchasing, and budgetary systems; and (6) development of a recommended administrative policy that includes a process to conduct staff performance evaluations on a regular basis to determine if the knowledge, skills, and abilities of staff members are sufficient to perform their respective functions, and which is brought to the Board for review on an annual basis.
c. Any additional staff support services provided by Member Agencies or others shall be coordinated by the Executive Director.
d. The Executive Director is hereby enabled to develop and maintain an Employee Handbook, as well as all other administrative policies governing the administrative procedures of SANDAG, and to administer SANDAG’s personnel system in accordance therewith.
e. The Executive Director shall perform such other and additional duties as is necessary to carry out the objectives and function of SANDAG and as directed by the Board of Directors. In addition to any applicable employment contract provisions, the Executive Director shall carry out his or her duties consistent with the requirements of the Bylaws, Board Policies, Employee Handbook and other administrative policies of SANDAG, listed in the stated order of precedence.
9 January 23, 2023 Item 11

ARTICLE VI

FINANCIAL
Section 1
The Board of Directors shall consider a draft budget for approval no later than April 1 of each year, and again during the month of May. Upon initial consideration, the Board of Directors may approve the draft budget as presented, or direct staff to either make specified revisions to the draft budget or provide the Board with additional information regarding projected revenues or proposed expenditures in the draft budget. After approval of a draft budget, the Board of Directors shall adopt a final budget no later than June 30 of each year. A copy of the draft budget when approved and a copy of the final budget when adopted shall be filed with each Member Agency.

Section 2
Responsibility for supplying funds for that portion of the budget for SANDAG, which is to be supplied by the Member Agencies, as adopted by the Board of Directors, shall be divided among the Member Agencies based on their population with each Member Agency including within its budget as funds to be supplied to SANDAG that sum of money determined by taking the ratio its population bears to the total population of the region and multiplying it by that portion of the approved budget to be supplied by the Member Agencies. Payment of this determined sum of money shall be made by each Member Agency by July 15 of each year. If payment by a Member Agency has not been made by September 1 of each year, that Member Agency shall no longer vote as a member of the Board of Directors. A delinquent Member Agency will be allowed to vote when full payment has been made, including interest computed from July 15 at the established legal rate.

Section 3
The Director of Finance of SANDAG, who shall be permitted to use the title of Chief Financial Officer with equal force and effect, shall establish and maintain such funds and accounts as may be required by good accounting practice, state and federal law, and these Bylaws. The books and records of SANDAG in the hands of the Director of Finance shall be open to inspection at all reasonable times by representatives of the Member Agencies. The Director of Finance of SANDAG shall issue a Comprehensive Annual Financial Report by December 31 after the close of each fiscal year and a copy shall be provided to each of the Member Agencies.

Section 4
The Director of Finance of SANDAG shall receive, have the custody of, and disburse SANDAG funds upon the warrant or check-warrant of the Finance Manager pursuant to the accounting procedures developed under Section 3 above, and shall make the disbursements required to carry out any of the provisions or purposes of SANDAG. The Director of Finance of SANDAG may invest SANDAG funds in accordance with state and federal law. All interest collected on SANDAG funds shall be accounted for and posted to the account of such funds.

Section 5
Delegation of authority from the Board of Directors for final financial/contracting approvals, including selection of vendors, acceptance of funding, stipulations of any nature, and any 10 January 23, 2023 Item 11
resulting budget amendment to serve as a limitation applicable to a particular job or program (not to be exceeded on a serial basis), shall be as follows:
a. Up to $300,000 to the Executive Director, subject to increase by Board action, or as may be modified in Board Policy No. 017 concerning delegation of authority to the Executive Director.
b. Up to $500,000 to the Executive Committee for any item, subject to increase by Board action. c. Up to $500,000 to the Transportation Committee for transportation items, subject to increase by Board action.
d. Up to $500,000 to the Public Safety Committee for ARJIS and Criminal Justice Division items, subject to increase by Board action.
e. The Executive Director, Executive Committee, Public Safety Committee, and Transportation Committee shall report approvals under this section to the Board of Directors at least quarterly.

Section 6
The amount budgeted for Member Assessments related to Criminal Justice database access shall be as adopted by the Board of Directors and divided among the Member Agencies using a formula based on population. Payment of this determined sum of money shall be made by each Member Agency by July 15 of each year. If payment by a Member Agency has not been made by
September 1 of each year, that Member Agency shall no longer vote as a member of the Board of Directors. A delinquent Member Agency will be allowed to vote when full payment has been made, including interest computed from July 15 at the established legal rate.

ARTICLE VII

RELATIONSHIPS AND RULES OF PROCEDURE
Section 1
The functions of the Board of Directors and Policy Advisory Committees shall be established by Board policy. The Board of Directors may delegate functions to the Policy Advisory Committees as it deems appropriate.

Section 2
The Board of Directors shall provide guidance to committees and working groups. The Board may advise Member Agencies on the coordination of general plans, or on the resolution of conflicts between the general plans of agencies in the San Diego region.

Section 3
Conflicts between governmental agencies should be resolved among the affected agencies. In matters affecting more than one local government, and where requested by the affected agencies, SANDAG shall have the authority to hear and make recommendations if the conflicts 11 January 23, 2023 Item 11
are not resolved to the satisfaction of each affected agency. Regional plans should serve as the guideline for the resolution of conflicts.

Section 4
Each action taken by SANDAG that requires implementation should include designation of the agency or agencies directly responsible for such implementation.

Section 5
The general and specific references to the construction authority of SANDAG in SB 1703 shall be interpreted as applicable solely to its responsibilities for project development and construction of transit projects which were previously within the purview of the transit development boards and are consolidated under the authority of SANDAG.

ARTICLE VIII

INFORMATION AND EVALUATION
Section 1
a. SANDAG shall disseminate information concerning its work program and activities. The required information system should be organized and categorized so that it will continue to allow full and efficient use of information by the public and private sectors. b. Adequate provision for public participation shall be provided as required by law and as directed by the Board of Directors.
c. The Board shall perform an annual evaluation of SANDAG’s goals, purpose, structure, and performance, directed toward continually improving the planning, coordination, and implementation process.

ARTICLE IX

AMENDMENTS
Section 1
The Board of Directors shall be responsible for making all amendments to these Bylaws. a. Proposed amendments may be originated by the Board of Directors, the Executive Committee, or any member of the Board of Directors.
b. Prior to being taken to the Board of Directors for approval, proposed amendments should be taken to the Executive Committee preliminarily for review and discussion and then brought to the Executive Committee at a subsequent meeting for a recommendation for approval to the Board.
c. A copy of any proposed amendments shall be forwarded by the Clerk of the Board to the official representative of each Member Agency, his or her alternate and the Member Agency itself, at the same time as the proposed amendments are mailed as a report attachment to the agenda for the preliminary Executive Committee meeting referred to in subsection b of this section.
12 January 23, 2023 Item 11
d. Amendments to these Bylaws (except those provisions mandated by state law) shall require the vote of a majority of the Member Agencies using the voting process described in Article IV, Section 5(a) of these Bylaws.

Adopted July 2003 by the SANDAG Board of Directors
Revised November 2003 by the SANDAG Board of Directors
Amended November 2004 by the SANDAG Board of Directors
Amended January 2006 by the SANDAG Board of Directors
Amended July 2007 by the SANDAG Board of Directors
Amended December 2008 by the SANDAG Board of Directors
Amended January 2010 by the SANDAG Board of Directors
Amended March 2014 by the SANDAG Board of Directors
Amended November 2014 by the SANDAG Board of Directors
Amended December 2015 by the SANDAG Board of Directors
Amended January 2017 by the SANDAG Board of Directors
Amended February 2018 by the SANDAG Board of Directors
Amended January 2019 by the SANDAG Board of Directors
Amended April 2020 by the SANDAG Board of Directors
Amended February 2021 by the SANDAG Board of Directors
Amended June 2021by the SANDAG Board of Directors
13 January 23, 2023 Item 11
AB 805: SUGGESTIONS FOR REVISIONS
D. Dwight Worden
May 4, 2017
SANDAG has problems. They can be improved by reform legislation. I recommend consideration of the following.

What are the problems with SANDAG?
Its Board is large with 19 member agencies, 21 voting members, plus 9 non-voting members, for a total of 30 Board members. As a consequence, Board operations are cumbersome and unwieldly. If each board member wants to speak once for 3 minutes on a topic, that would take an hour and a half. Given a staff presentation and public testimony taking time, in a 3 hour Board meeting there is no time for Board discussion and debate. This cumbersome structure discourages dialogue, and in my view is at the root of SANDAG’s systemic problems.

SANDAG board members are not required to have a background in or to learn complex transit planning issues before assuming office. Some board members do their homework and come prepared, but some do not. Some have background, many do not. This is not an ideal Board structure for good decision making.

There is no requirement for SANDAG Board members to keep their home agencies informed or to seek guidance from their home agencies on how they vote. Some do, some don’t. This lack of structure often leaves the home agency and the public feeling board members are disconnected from their city council or Board of Supervisors and from their local constituencies.

As a consequence of these structural deficiencies, power is defaulted to SANDAG staff and to a few powerful committees. Recommendations from the SANDAG staff and these few committees tend to be approved without much debate by the Board leaving the public feeling disconnected and distrustful of SANDAG. These are structural problems that can be addressed.

What is not the problem: The voting structure. The voting structure works well to encourage regional cooperation, giving each member agency, regardless of population, a voice but also giving weight to member agencies with larger populations. Transit planning needs to be planned, financed, constructed, and operated on a regionally coordinated basis to be most effective, and the current voting structure serves that end well. The problems lie elsewhere.

What are some structural improvements to consider?

1. Longer and/or more frequent board meetings. Revise the structure so that real debate and discussion can occur at the Board level, and encourage it. Planning for 14 January 23, 2023 Item 11
and spending $205 billion on transit over the next planning horizon is worth taking the time to discuss, debate, and do well.

2. Require Continuing education. Require initial training in transit planning for all new board members, and regular annual refreshers for all board members. State law requires such continuing education in other fields, such as conflict of interest, why not for transit which arguably is more complex with more public money at stake? Every voting Board member should know the basics of transit financing, budgeting, planning, and administration. The public needs to know the SANDAG Board understands the subject matter it controls. That is not necessarily the case today.

Better decision making will come from an informed and educated Board.

3. Require Board members to report to and receive direction from their home agency on all major issues. A template for such reports could be developed, and a condition of assuming office at SANDAG could be a requirement to regularly keep informed, and receive direction from, a Board member’s home agency. Perhaps require a disclosure statement before each SANDAG Board vote as to whether or not the Board member received direction from his/her home agency? Similar disclosures before voting are required on other topics, why not on the important topic of transit? These kinds of changes will increase the accountability of Board members, will increase the opportunities for input by member agencies, and will increase the ability of local constituencies to influence SANDAG decision-making through regular input at their home agency meetings. All this will lead to better decision making, more transparency, and more public confidence in SANDAG.

4. Provide for live streaming of SANDAG Board and committee meetings. Allow the public to watch SANDAG committee and board meetings live on-line, and if possible accommodate real time remote public input through email or messaging. Live casting is done for other agencies (e.g. Coastal Commission) and would greatly increase public access to and participation in SANDAG meetings. If remote messaging could also be accommodated SANDAG could become a poster child for encouraging transparency and public participation through technology. Increasing public participation will improve decision making and increase public confidence in SANDAG.

5. Provide for regional advisory committees. On other important regional topics like general and community planning, or Regional Park planning, a system of advisory committees exists. The city and county of San Diego each have a system of advisory community planning groups. The San Dieguito River Park JPA has its Citizen’s Advisory Committee to make recommendations on Regional Park planning. Why not a system like this for SANDAG as it undertakes regional transit planning? Transit 15 January 23, 2023 Item 11
planning is as important as general and community planning, or Regional Park planning. Establishing a system of advisory committees could go a long way to increasing public participation and confidence in SANDAG. Maybe there could be a system of three such advisory committees—one each for North, South, and East County, with each home agency appointing one citizen representative to the advisory committee for its region?
Conclusion. SANDAG has structural constraints that, in my view, cause the majority of its problems. These should be the focus of AB 805. The above are ideas offered as “food for thought.” Some may have merit, some on further study may not.

Respectfully submitted,
D. Dwight Worden
Del Mar City council
16 January 23, 2023 Item 11
1/18/23, 10:59 PM Bill Text - AB-805 County of San Diego: transportation agencies. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB805 1/12 SHARE THIS: Date Published: 10/12/2017 02:00 PM
AB-805 County of San Diego: transportation agencies. (2017-2018) Assembly Bill No. 805
CHAPTER 658
An act to amend Sections 120050.2, 120051.6, 120102.5, 125102, 132351.1, 132351.2, 132351.4, 132352.3, 132354.1, 132360.1, and 132362 of, to add Sections 120221.5, 125222.5, and 132354.7 to, to add Article 11 (commencing with Section 120480) to Chapter 4 of Division 11 of, to add Article 9 (commencing with Section 125480) to Chapter 4 of Division 11.5 of, and to repeal Sections 120050.5 and 120051.1 of, the Public Utilities Code, relating to transportation. [ Approved by Governor October 11, 2017. Filed with Secretary of State October 11, 2017. ]

LEGISLATIVE COUNSEL'S DIGEST
AB 805, Gonzalez Fletcher. County of San Diego: transportation agencies. (1) Existing law provides for the consolidation of certain regional transportation planning, programming, and related functions in San Diego County from various existing agencies including the San Diego Association of Governments (SANDAG), the San Diego Metropolitan Transit Development Board, also known as the San Diego Metropolitan Transit System (MTS), and the North County Transit District (NCTD).

Existing law provides for the consolidated agency, commonly known as SANDAG, to be governed by a board of directors of 21 city and county members selected by the governing body of each member agency. Existing law provides that the officers of the board are the chairperson and the vice chairperson.

This bill would require the mayor and the president of the city council of the City of San Diego to serve on the board. The bill would delete the requirement for the chair of the County of San Diego Board of Supervisors to serve on the board. The bill would also revise the selection of alternate members of the board. The bill would require that the chairperson and vice chairperson be elected by the membership of the board every 2 years or when a vacancy exists by the weighted vote process and that the chairperson and the vice chairperson not represent the same subregion.

Existing law, in order for the SANDAG board to act on any item, generally requires a majority vote of the members present on the basis of one vote per agency as well as a weighted vote pursuant to a specified process, except in the case of consent items.

This bill would modify the weighted vote process.

Existing law provides for SANDAG to have 4 standing policy advisory committees named the executive, transportation, regional planning, and borders committees.

Home Bill Information California Law Publications Other Resources My Subscriptions My Favorites 17 January 23, 2023 Item 11
1/18/23, 10:59 PM Bill Text - AB-805 County of San Diego: transportation agencies. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB805 2/12 This bill would increase the membership of the transportation committee from 9 to 10 members and would additionally provide for an audit committee with specified responsibilities, including the appointment of an independent performance auditor. The bill would require SANDAG to submit an annual report to the Legislature, developed by its transportation committee, that outlines various matters related to public transit.

Existing law provides for the consolidated agency to prepare a regional comprehensive plan containing various elements, as specified.

This bill would require the regional comprehensive plan to address greenhouse gas emissions reduction targets set by the State Air Resources Board and would require the plan to include strategies that provide for mode shift to public transportation. The bill would also require the board members of the consolidated agency to make an annual report to their member agencies at a public meeting that includes a summary of the activities of the consolidated agency, including, but not limited to, program developments, project updates, changes to voterapproved expenditure plans, and potential ballot measures. (2) Existing law creates MTS and NCTD, with various public transit responsibilities in the southern and northern parts of the County of San Diego, respectively. Existing law provides for MTS to be governed by a board of 15 members generally consisting of city and county representatives selected by member agencies. Existing law provides that the chairperson of the MTS board is a resident of the County of San Diego selected by the board, as specified.

This bill would require one of the 4 San Diego City Council members on the MTS board to be the mayor. The bill would grant to the City of Chula Vista a 2nd member, who would be the mayor. The bill would require the chairperson of the MTS board to be selected by the board. The bill would also revise the process for selecting alternate members of the MTS board.

Existing law generally provides that official acts of the MTS or NCTD board require the affirmative vote of the majority of the members of the board, except that a weighted vote of the MTS board may be requested pursuant to a specified process.

This bill would create a similar weighted voting process for NCTD and modify the weighted voting process for the MTS.

Existing law authorizes various transportation agencies, including SANDAG, to impose a transactions and use tax for transportation purposes within its jurisdiction, subject to approval of 2 /3 of the voters and various other
requirements. Existing law provides for issuance of bonds backed by these tax revenues, as specified.

This bill would additionally authorize MTS and NCTD to individually impose a specified transactions and use tax within their respective portions of the County of San Diego, with revenues to be used for public transit purposes, as specified, serving their jurisdictions, and to issue bonds backed by these tax revenues, subject to similar requirements.

The bill would authorize the MTS and the NCTD to increase the amount of the necessary preparatory costs incident to the administration and operation of the ordinance imposing a transactions and use tax. The bill would also require the MTS and the NCTD to provide to the California Department of Tax and Fee Administration, within 45 days of the approval of the ordinance by the voters, a complete alphabetical list of all streets within the affected unincorporated area of their respective jurisdictions, maintain that list on their Internet Web sites, and provide a specified legal description and a map or plat.

Existing law authorizes the board of the MTS, the NCTD, and the consolidated agency to enter into and perform all necessary contracts to construct or develop property for transit purposes, including, but not limited to, employing labor and doing all acts necessary and convenient for the full exercise of the powers granted to each of these agencies.

This bill would prohibit the MTS, the NCTD, and the consolidated agency from entering into a construction contract over $1,000,000 with any entity unless the entity provides to each agency an enforceable commitment that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or a contract that falls within an apprenticeship occupation in the building and construction trades, except as specified.
(3) Existing law provides that if the consolidated agency provides compensation to the County of San Diego for the cost of including an ordinance or measure on the ballot, the consolidated agency may call an election, including an advisory election, in the county on any ordinance or measure regarding the governance of or 18 January 23, 2023 Item 11
1/18/23, 10:59 PM Bill Text - AB-805 County of San Diego: transportation agencies. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB805 3/12 matters related to the powers, privileges, or duties of the consolidated agency, including, but not limited to, merger or complete consolidation of the transit boards. However, existing law also provides that a complete consolidation requires enactment of a statute by the Legislature.

This bill would require that any ordinance or measure adopted pursuant to these provisions be consistent with, and not in conflict with, any other statutory provisions governing the consolidated agency. (4) By imposing additional requirements on local agencies, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Vote: majority Appropriation: no Fiscal Committee: yes Local Program: yes THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 120050.2 of the Public Utilities Code is amended to read:
120050.2. The board consists of 15 members selected as follows:
(a) One member of the County of San Diego Board of Supervisors, appointed by the board of supervisors. (b) One member of each city council appointed individually by the city councils of the Cities of Coronado, El Cajon, Imperial Beach, La Mesa, Lemon Grove, National City, Poway, and Santee. (c) Four members of the City Council of the City of San Diego, one of whom shall be the mayor, and two members of the City Council of the City of Chula Vista, one of whom shall be the mayor, each appointed by their respective city council.
(d) The chairperson of the board shall be selected by a two-thirds vote of the board, a quorum being present.

The chairperson shall serve for a term of two years, except that he or she is subject to removal at any time by a two-thirds vote of the board, a quorum being present.

SEC. 2. Section 120050.5 of the Public Utilities Code is repealed.

SEC. 3. Section 120051.1 of the Public Utilities Code is repealed.

SEC. 4. Section 120051.6 of the Public Utilities Code is amended to read:
120051.6. The alternate members of the board shall be appointed as follows:
(a) The County of San Diego Board of Supervisors shall appoint a county supervisor, not already appointed under Section 120051, who represents one of the two supervisorial districts with the greatest percentage of its area within the incorporated area of the County of San Diego within the area under the jurisdiction of the transit development board as defined in Section 120054, to serve as an alternate member of the transit development board.
(b) The city councils of the cities specified in subdivision (b) or (c) of Section 120050.2 shall each individually appoint a member of their respective city councils not already appointed pursuant to subdivision (b) or (c) of Section 120050.2 to serve as an alternate member of the transit development board for each member of the city on the board.
(c) At its discretion, a city council or the county board of supervisors may appoint a second alternate member, in the same manner as first alternates are appointed, to serve on the board in the event that neither a member nor the alternate member is able to attend a meeting of the board. (d) An alternate member and second alternate member shall be subject to the same restrictions and shall have the same powers, when serving on the board, as a member.

SEC. 5. Section 120102.5 of the Public Utilities Code is amended to read:
19 January 23, 2023 Item 11
1/18/23, 10:59 PM Bill Text - AB-805 County of San Diego: transportation agencies. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB805 4/12 120102.5. (a) A majority of the members of the board constitutes a quorum for the transaction of business. All official acts of the board require the affirmative vote of the majority of the members of the board present.

However, after a vote of the members is taken, a weighted vote may be called by the members of any two jurisdictions.
(b) In the case of a weighted vote, the County of San Diego and each city shall, in total, exercise 100 votes to be apportioned annually based on population, except in the case of the City of San Diego. Each of the four representatives of the City of San Diego shall exercise 12 1 /2 weighted votes, for a total of 50 votes. The
representatives for the City of Chula Vista shall split the votes allocated to that city evenly among its representatives.
(c) Approval under the weighted vote procedure requires the vote of the representatives of not less than three jurisdictions representing not less than 51 percent of the total weighted vote to supersede the original action of the board.
(d) When a weighted vote is taken on any item that requires more than a majority vote of the board, it shall also require the supermajority percentage of the weighted vote. (e) For purposes of subdivision (b), the population of the County of San Diego is the population in the unincorporated area of the county within the area of jurisdiction of the transit development board pursuant to Section 120054.
(f) The board shall adopt a policy and procedure to implement this section.

SEC. 6. Section 120221.5 is added to the Public Utilities Code, to read:
120221.5. The board shall not enter into a construction contract over one million dollars ($1,000,000) with any entity unless the entity provides to the board an enforceable commitment that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or a contract that falls within an apprenticeship occupation in the building and construction trades in accordance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code. (a) This subdivision shall not apply if any of the following requirements are met:
(1) The board has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or the board has contracted to use a skilled and trained workforce and the entity has agreed to be bound by that project labor agreement. (2) The project or contract is being performed under the extension or renewal of a project labor agreement that was entered into by the board before January 1, 2017. (3) The entity has entered into a project labor agreement that will bind the entity and all its subcontractors at every tier performing the project or the entity has contracted to use a skilled and trained workforce. (b) For purposes of subdivision (a), “project labor agreement” has the same meaning as defined in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.

SEC. 7. Article 11 (commencing with Section 120480) is added to Chapter 4 of Division 11 of the Public Utilities Code, to read:

Article 11. Transactions and Use Tax
120480. (a) A retail transactions and use tax ordinance applicable in the incorporated and unincorporated territory within the area of the board pursuant to Section 120054 shall be imposed by the board in accordance with Section 120485 and Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, and Section 2 of Article XIII C of the California Constitution. The tax ordinance shall take effect at the close of the polls on the day of election at which the proposition is adopted. The initial collection of the transactions and use tax shall take place in accordance with Section 120483. (b) If, at any time, the voters do not approve the imposition of the transactions and use tax, this chapter remains in full force and effect. The board may, at any time thereafter, submit the same, or a different, measure to the voters in accordance with this chapter.
20 January 23, 2023 Item 11
1/18/23, 10:59 PM Bill Text - AB-805 County of San Diego: transportation agencies. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB805 5/12 120481. (a) The board, in the ordinance, shall state the nature of the tax to be imposed, the tax rate or the maximum tax rate, the purposes for which the revenue derived from the tax will be used, and may set a term during which the tax will be imposed. The purposes for which the tax revenues may be used shall be limited to public transit purposes serving the area of jurisdiction of the board, as determined by the board, including the administration of this division and legal actions related thereto. These purposes include expenditures for the planning, environmental reviews, engineering and design costs, and related right-of-way acquisition. The ordinance shall contain an expenditure plan that shall include the allocation of revenues for the purposes authorized by this section.
(b) As used in this section, “public transit purposes” includes the public transit responsibilities under the jurisdiction of the board as well as any repair, redesign, or ongoing maintenance of a right-of-way upon which transit is intended to travel, or any bikeway, bicycle path, sidewalk, trail, pedestrian access, or pedestrian accessway.
120482. (a) The county shall conduct an election called by the board pursuant to Section 120480. (b) The election shall be called and conducted in the same manner as provided by law for the conduct of elections by a county.
120483. (a) Any transactions and use tax ordinance adopted pursuant to this article shall be operative on the first day of the first calendar quarter commencing more than 150 days after adoption of the ordinance. (b) (1) Prior to the operative date of the ordinance, the board shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of the ordinance.

The costs to be covered by the contract may also include services of the types described in Section 7272 of the Revenue and Taxation Code for preparatory work up to the operative date of the ordinance. Any disputes as to the amount of the costs shall be resolved in the same manner as provided in that section. (2) Notwithstanding Section 7272 of the Revenue and Taxation Code, the maximum amount of preparatory costs incurred may exceed those costs as described in paragraph (1), if the increased amount reflects necessary preparatory costs.
(c) Within 45 days from the date the ordinance is approved by the voters, the board shall provide the California Department of Tax and Fee Administration with a complete alphabetical list of all streets within the affected unincorporated area under the jurisdiction of the board pursuant to Section 120054, which shall include beginning and ending street numbers, and shall maintain that list on its Internet Web site. The board shall also provide a legal description and a map or plat, that both describe the boundaries of the applicable unincorporated territory within the area of the board pursuant to Section 120054. 120484. The revenues from the taxes imposed pursuant to this article may be allocated by the board for public transit purposes consistent with the applicable regional transportation improvement program and the applicable regional transportation plan.
120485. The board, subject to the approval of the voters, may impose a maximum tax rate of one-half of 1 percent under this article and Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code. The board shall not levy the tax at a rate other than one-half or one-fourth of 1 percent unless specifically authorized by the Legislature.
120486. The board, as part of the ballot proposition to approve the imposition of a retail transactions and use tax, may seek authorization to issue bonds payable from the proceeds of the tax. 120487. Any action or proceeding wherein the validity of the adoption of the retail transactions and use tax ordinance provided for in this article or the issuance of any bonds thereunder or any of the proceedings in relation thereto is contested, questioned, or denied, shall be commenced within six months from the date of the election at which the ordinance is approved; otherwise, the bonds and all proceedings in relation thereto, including the adoption and approval of the ordinance, shall be held to be valid and in every respect legal and incontestable.
120488. The board has no power to impose any tax other than the transactions and use tax imposed upon approval of the voters in accordance with this article.

SEC. 8. Section 125102 of the Public Utilities Code is amended to read:
21 January 23, 2023 Item 11
1/18/23, 10:59 PM Bill Text - AB-805 County of San Diego: transportation agencies. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB805 6/12 125102. (a) A majority of the members of the board constitutes a quorum for the transaction of business. All official acts of the board require the affirmative vote of the majority of the members of the board present.

However, after a vote of the members is taken, a weighted vote may be called by any two members. (b) In the case of a weighted vote, the County of San Diego and each city shall, in total, exercise 100 votes to be apportioned annually based on population.
(c) Approval under the weighted vote procedure requires the vote of the representatives of not less than three jurisdictions representing not less than 51 percent of the total weighted vote to supersede the original action of the board.
(d) When a weighted vote is taken on any item that requires more than a majority vote of the board, it shall also require the supermajority percentage of the weighted vote. (e) For purposes of subdivision (b), the population of the County of San Diego is the population in the unincorporated area of the county within the area of jurisdiction of the board pursuant to Section 125052. (f) The board shall adopt a policy and procedure to implement this section.

SEC. 9. Section 125222.5 is added to the Public Utilities Code, to read:
125222.5. The district shall not enter into a construction contract over one million dollars ($1,000,000) with any entity unless the entity provides to the district an enforceable commitment that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or a contract that falls within an apprenticeship occupation in the building and construction trades in accordance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code. (a) This subdivision shall not apply if any of the following requirements are met:
(1) The district has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or the district has contracted to use a skilled and trained workforce and the entity has agreed to be bound by that project labor agreement. (2) The project or contract is being performed under the extension or renewal of a project labor agreement that was entered into by the district before January 1, 2017. (3) The entity has entered into a project labor agreement that will bind the entity and all its subcontractors at every tier performing the project or the entity has contracted to use a skilled and trained workforce. (b) For purposes of subdivision (a), “project labor agreement” has the same meaning as defined in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.

SEC. 10. Article 9 (commencing with Section 125480) is added to Chapter 4 of Division 11.5 of the Public Utilities Code, to read:

Article 9. Transactions and Use Tax
125480. (a) A retail transactions and use tax ordinance applicable in the incorporated and unincorporated territory within the area of the board pursuant to Section 125052 shall be imposed by the board in accordance with Section 125485 and Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, and Section 2 of Article XIII C of the California Constitution. The tax ordinance shall take effect at the close of the polls on the day of election at which the proposition is adopted. The initial collection of the transactions and use tax shall take place in accordance with Section 125483. (b) If, at any time, the voters do not approve the imposition of the transactions and use tax, this chapter remains in full force and effect. The board may, at any time thereafter, submit the same, or a different, measure to the voters in accordance with this chapter.
125481. (a) The board, in the ordinance, shall state the nature of the tax to be imposed, the tax rate or the maximum tax rate, the purposes for which the revenue derived from the tax will be used, and may set a term during which the tax will be imposed. The purposes for which the tax revenues may be used shall be limited to public transit purposes serving the area of jurisdiction of the board, as determined by the board, including the administration of this division and legal actions related thereto. These purposes include expenditures for the planning, environmental reviews, engineering and design costs, and related right-of-way acquisition. The 22 January 23, 2023 Item 11
1/18/23, 10:59 PM Bill Text - AB-805 County of San Diego: transportation agencies. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB805 7/12 ordinance shall contain an expenditure plan that shall include the allocation of revenues for the purposes authorized by this section.
(b) As used in this section, “public transit purposes” includes the public transit responsibilities under the jurisdiction of the district as well as any repair, redesign, or ongoing maintenance of a right-of-way upon which transit is intended to travel, or any bikeway, bicycle path, sidewalk, trail, pedestrian access, or pedestrian accessway.
125482. (a) The county shall conduct an election called by the board pursuant to Section 125480. (b) The election shall be called and conducted in the same manner as provided by law for the conduct of elections by a county.
125483. (a) Any transactions and use tax ordinance adopted pursuant to this article shall be operative on the first day of the first calendar quarter commencing more than 150 days after adoption of the ordinance. (b) (1) Prior to the operative date of the ordinance, the board shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of the ordinance.

The costs to be covered by the contract may also include services of the types described in Section 7272 of the Revenue and Taxation Code for preparatory work up to the operative date of the ordinance. Any disputes as to the amount of the costs shall be resolved in the same manner as provided in that section. (2) Notwithstanding Section 7272 of the Revenue and Taxation Code, the maximum amount of preparatory costs incurred may exceed those costs as described in paragraph (1), if the increased amount reflects necessary preparatory costs.
(c) Within 45 days from the date the ordinance is approved by the voters, the board shall provide the California Department of Tax and Fee Administration with a complete alphabetical list of all streets within the affected unincorporated area under the jurisdiction of the board pursuant to Section 125052, which shall include beginning and ending street numbers, and shall maintain that list on its Internet Web site. The board shall also provide a legal description and a map or plat, that both describe the boundaries of the applicable unincorporated territory within the area of the board pursuant to Section 125052. 125484. The revenues from the taxes imposed pursuant to this article may be allocated by the board for public transit purposes consistent with the applicable regional transportation improvement program and the applicable regional transportation plan.
125485. The board, subject to the approval of the voters, may impose a maximum tax rate of one-half of 1 percent under this article and Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code. The board shall not levy the tax at a rate other than one-half or one-fourth of 1 percent unless specifically authorized by the Legislature.
125486. The board, as part of the ballot proposition to approve the imposition of a retail transactions and use tax, may seek authorization to issue bonds payable from the proceeds of the tax. 125487. Any action or proceeding wherein the validity of the adoption of the retail transactions and use tax ordinance provided for in this article or the issuance of any bonds thereunder or any of the proceedings in relation thereto is contested, questioned, or denied, shall be commenced within six months from the date of the election at which the ordinance is approved; otherwise, the bonds and all proceedings in relation thereto, including the adoption and approval of the ordinance, shall be held to be valid and in every respect legal and incontestable.
125488. The board has no power to impose any tax other than the transactions and use tax imposed upon approval of the voters in accordance with this article.

SEC. 11. Section 132351.1 of the Public Utilities Code is amended to read:
132351.1. (a) A board of directors consisting of 21 members shall govern the consolidated agency. (b) For purposes of this chapter, “governing body” means the board of supervisors, council, council and mayor where the mayor is not a member of the council, authority, trustees, director, commission, committee, or other 23 January 23, 2023 Item 11
1/18/23, 10:59 PM Bill Text - AB-805 County of San Diego: transportation agencies. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB805 8/12 policymaking body, as appropriate, that exercises authority over an entity represented on the board of the consolidated agency.
(c) All powers, privileges, and duties vested in or imposed upon the consolidated agency shall be exercised and performed by and through a board of directors provided, however, that the exercise of all executive, administrative, and ministerial power may be delegated and redelegated by the board, to any of the offices, officers, or committees created pursuant to this chapter or created by the board acting pursuant to this chapter. (d) The board shall be composed of one primary representative selected by the governing body of each city in the county and a member of the San Diego County Board of Supervisors. However, the City of San Diego and the County of San Diego shall each have a primary and secondary representative, which for the City of San Diego shall be the mayor of the City of San Diego and the president of the city council. Each director shall be a mayor, councilperson, or supervisor, as applicable, of the governing body that selected him or her, and shall serve until recalled by the governing body of the city or county. Vacancies shall be filled in the same manner as originally selected. Each city or county shall also select one alternate to serve on the board when the primary or secondary representative, if applicable, is not available. The alternate shall be subject to the same restrictions and have the same powers, when serving on the board, as the representative for whom he or she is substituting. The alternate shall be a mayor, councilperson, or supervisor, as applicable, of his or her governing body. (e) Notwithstanding subdivision (d), in those years when the primary representative of the San Diego County Board of Supervisors is from a district that is substantially an incorporated area, a supervisor who represents a district that is substantially an unincorporated area shall be appointed to the board as the secondary representative. Alternatively, in those years when the primary representative of the San Diego County Board of Supervisors is from a district that is substantially an unincorporated area, a supervisor who represents a district that is substantially an incorporated area shall be appointed to the board as the secondary representative. (f) At its discretion, each city or county may select a second alternate, in the same manner as the first alternate, to serve on the board in the event that neither the primary representative nor the first alternate is able to attend a meeting of the board. This alternate shall be subject to the same restrictions and have the same powers, when serving on the board, as the primary representative.
(g) The board may allow for the appointment of advisory representatives to sit with the board but in no event shall those representatives be allowed a vote. The current advisory representatives to the San Diego Association of Governments may continue their advisory representation on the consolidated agency at the discretion of their governing body. The governing bodies of the County of Imperial and the cities in that county may collectively designate an advisory representative to sit with the board.

SEC. 12. Section 132351.2 of the Public Utilities Code is amended to read:
132351.2. (a) A majority of the member agencies constitute a quorum for the transaction of business. In order to act on any item, the affirmative vote of the majority of the members of the board present is required. However, after a vote of the members is taken, a weighted vote may be called by the members of any two jurisdictions. (b) The governing body of the City of San Diego and the County of San Diego shall allocate their weighted votes equally between their primary and secondary members.
(c) For the weighted vote, there shall be a total of 100 votes, except additional votes shall be allowed pursuant to subdivision (h). Each member agency shall have that number of votes determined by the following apportionment formula, provided that each agency shall have at least one vote, no agency shall have more than 50 votes, and there shall be no fractional votes:
(1) If any agency has 50 percent or more of the total population of the San Diego County region, allocate 50 votes to that agency and follow paragraph (2), and if not, follow paragraph (3). (2) Total the population of the remaining agencies determined in paragraph (1) and compute the percentage of this total that each agency has.
(A) Multiply each percentage derived above by 50 to determine fractional shares. (B) Boost fractions that are less than one to one and add the whole numbers. (C) If the answer to subparagraph (B) is 50, drop all fractions and the whole numbers are the votes for each agency.
24 January 23, 2023 Item 11
1/18/23, 10:59 PM Bill Text - AB-805 County of San Diego: transportation agencies. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB805 9/12 (D) If the answer to subparagraph (B) is less than 50, the remaining vote is allocated one each to the agency having the highest fraction excepting those whose vote was increased to one pursuant to subparagraph (B).
(E) If the answer to subparagraph (B) is more than 50, the excess vote is taken one each from the agency with the lowest fraction. In no case shall a vote be reduced to less than one. (3) Total the population determined in paragraph (1) and compute the percentage of this total that each agency has.
(A) Boost fractions that are less than one to one and add the whole numbers. (B) If the answer to subparagraph (A) is 100, drop all fractions and the whole numbers are the votes for each agency.
(C) If the answer to subparagraph (A) is less than 100, the remaining vote is allocated one each to the agency having the highest fraction excepting those whose vote was increased to one pursuant to subparagraph (A).
(D) If the answer to subparagraph (A) is more than 100, the excess vote is taken one each from the agency with the lowest fraction. In no case shall a vote be reduced to less than one. (d) When a weighted vote is taken on any item that requires more than a majority vote of the board, it shall also require the supermajority percentage of the weighted vote. (e) Approval under the weighted vote procedure requires the vote of not less than four members representing separate jurisdictions and not less than 51 percent of the total weighted vote to supersede the original action of the board.
(f) For purposes of subdivision (c), the population of the County of San Diego is the population in the unincorporated area of the county.
(g) The weighted vote formula under subdivision (c) shall be recomputed every July 1. (h) Any newly incorporated city shall receive one vote under the weighted vote procedure until the next recomputation of the weighted vote formula under subdivision (c), at which time the new agency shall receive votes in accordance with the recomputed formula. Until this recomputation, the total weighted vote may exceed 100.

SEC. 13. Section 132351.4 of the Public Utilities Code is amended to read:
132351.4. (a) The consolidated agency shall have five standing policy advisory committees named the executive, transportation, regional planning, borders, and audit committees. The responsibilities of the committees shall be established by the board. Committee membership may be expanded by the consolidated agency, and shall be selected in accordance with a process established by the consolidated agency. The membership shall be as follows:
(1) The executive committee shall consist of six voting members with board members representing east county, north county coastal, north county inland, south county, and the representative, or the representative’s alternate in their absence, from the City of San Diego and the county. The chairperson and the vice chairperson of the consolidated agency shall each be one of the six voting members. (2) (A) The transportation committee shall consist of 10 voting members with board members or alternates representing east county, north county coastal, north county inland, south county and the mayor or a council member from the City of San Diego, a supervisor from the County of San Diego, a member of the board of the MTDB appointed by the board of the MTDB, a member of the board of the NCTD appointed by the board of the NCTD, a member of the governing board of the San Diego Unified Port District appointed by the board of the port, and a member of the San Diego County Regional Airport Authority appointed by the airport authority. (B) Among its transportation responsibilities, the transportation committee shall provide a strong focus and commitment to meeting the public transit needs of the San Diego region, set transit funding criteria and recommend transit funding levels, and undertake transit responsibilities resulting from consolidation, as delegated by the board.
25 January 23, 2023 Item 11
1/18/23, 10:59 PM Bill Text - AB-805 County of San Diego: transportation agencies. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB805 10/12 (C) The board shall provide a report, developed by the transportation committee, to the Legislature on or before July 1 of each year that outlines the public transit needs, transit funding criteria, recommended transit funding levels, and additional work on public transit, as delegated to the transportation committee by the board. The report shall specify the funds spent explicitly on public transportation. The report shall be submitted consistent with Section 9795 of the Government Code. (3) The regional planning committee shall consist of six voting members with board members or alternates representing east county, north county coastal, north county inland, south county, and the mayor or a council member from the City of San Diego, and a supervisor from the County of San Diego. (4) The borders committee shall consist of seven voting members with board members or alternates representing east county, north county coastal, north county inland, south county, the mayor or a council member from the City of San Diego, a supervisor from the County of San Diego, and a mayor, council member, or supervisor from the County of Imperial.
(5) The audit committee shall consist of five voting members with two board members and three members of the public to be appointed by the board. The audit committee shall recommend to the board the contract of the firm conducting the annual financial statement audits and the hiring of the independent performance auditor and approve the annual audit plan after discussion with the independent performance auditor pursuant to subdivision (b) of Section 132354.1.
(b) The board may appoint other standing and ad hoc working groups to advise it in carrying out its responsibilities.
(c) No board member may serve as a member of more than two standing policy advisory committees at any one time, except those board members serving on the audit committee.

SEC. 14. Section 132352.3 of the Public Utilities Code is amended to read:
132352.3. The officers of the board are the chairperson and the vice chairperson. The chairperson and vice chairperson shall be elected by the membership of the board every two years or when a vacancy exists, by means of the weighted vote pursuant to Section 132351.2. The chairperson and vice chairperson shall not represent the same subregion, with the subregions being east county, north county coastal, north county inland, south county, the City of San Diego, and the County of San Diego. The board may create additional officers and elect members to those positions. However, no member may hold more than one office. The term of office for any officers of the board other than the chairperson and the vice chairperson shall be established by the board.

SEC. 15. Section 132354.1 of the Public Utilities Code is amended to read:
132354.1. (a) The board shall arrange for a post audit of the financial transactions and records of the consolidated agency to be made at least annually by a certified public accountant. (b) (1) The audit committee shall appoint an independent performance auditor, subject to approval by the board, who may only be removed for cause by a vote of at least two-thirds of the audit committee and the board. (2) The independent performance auditor shall have authority to conduct or to cause to be conducted performance audits of all departments, offices, boards, activities, agencies, and programs of the consolidated agency. The auditor shall prepare annually an audit plan and conduct audits in accordance therewith and perform those other duties as may be required by ordinance or as provided by the California Constitution and general laws of the state. The auditor shall follow government auditing standards. All officers and employees of the consolidated agency shall furnish to the auditor unrestricted access to employees, information, and records, including electronic data, within their custody regarding powers, duties, activities, organization, property, financial transactions, contracts, and methods of business required to conduct an audit or otherwise perform audit duties. It is also the duty of any consolidated agency officer, employee, or agent to fully cooperate with the auditor, and to make full disclosure of all pertinent information. (3) The auditor shall have the power to appoint, employ, and remove assistants, employees, and personnel as deemed necessary for the efficient and effective administration of the affairs of the office and to prescribe their duties, scope of authority, and qualifications.
(4) The auditor may investigate any material claim of financial fraud, waste, or impropriety within the consolidated agency and for that purpose may summon any officer, agent, or employee of the consolidated agency, any claimant, or other person, and examine him or her upon oath or affirmation relative thereto. All 26 January 23, 2023 Item 11
1/18/23, 10:59 PM Bill Text - AB-805 County of San Diego: transportation agencies. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB805 11/12 consolidated agency contracts with consultants, vendors, or agencies will be prepared with an adequate audit provision to allow the auditor access to the entity’s records needed to verify compliance with the terms specified in the contract. Results of all audits and reports shall be made available to the public in accordance with the requirements of the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of the Title 1 of the Government Code).
(c) The board shall develop and adopt internal control guidelines to prevent and detect financial errors and fraud based on the internal control guidelines developed by the Controller pursuant to Section 12422.5 of the Government Code and the standards adopted by the American Institute of Certified Public Accountants. (d) The board shall develop and adopt an administration policy that includes a process to conduct staff performance evaluations on a regular basis to determine if the knowledge, skills, and abilities of staff members are sufficient to perform their respective functions, and shall monitor the evaluation process on a regular basis. (e) The board members shall make an annual report to their member agencies at a public meeting pursuant to Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code, that includes a summary of activities by the consolidated agency including, but not limited to, program developments, project updates, changes to voter-approved expenditure plans, and potential ballot measures.

SEC. 16. Section 132354.7 is added to the Public Utilities Code, to read:
132354.7. The consolidated agency shall not enter into a construction contract over one million dollars ($1,000,000) with any entity unless the entity provides to the consolidated agency an enforceable commitment that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or a contract that falls within an apprenticeship occupation in the building and construction trades in accordance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code. (a) This subdivision shall not apply if any of the following requirements are met:
(1) The consolidated agency has entered into a project labor agreement that will bind all contractors and subcontractors performing work on the project or the consolidated agency has contracted to use a skilled and trained workforce and the entity has agreed to be bound by that project labor agreement. (2) The project or contract is being performed under the extension or renewal of a project labor agreement that was entered into by the consolidated agency before January 1, 2017. (3) The entity has entered into a project labor agreement that will bind the entity and all its subcontractors at every tier performing the project or the entity has contracted to use a skilled and trained workforce. (b) For purposes of subdivision (a), “project labor agreement” has the same meaning as defined in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.

SEC. 17. Section 132360.1 of the Public Utilities Code is amended to read:
132360.1. In preparing and updating the regional comprehensive plan, it is the intent of the Legislature that:
(a) The regional comprehensive plan preserve and improve the quality of life in the San Diego region, maximize mobility and transportation choices, and conserve and protect natural resources. (b) The regional comprehensive plan shall address the greenhouse gas emissions reduction targets set by the State Air Resources Board as required by Section 65080 of the Government Code and include strategies that provide for mode shift to public transportation.
(c) The regional comprehensive plan shall identify disadvantaged communities as designated pursuant to Section 39711 of the Health and Safety Code and include transportation strategies to reduce pollution exposure in these communities.
(d) In formulating and maintaining the regional comprehensive plan, the consolidated agency shall take account of and shall seek to harmonize the needs of the region as a whole, the plans of the county and cities within the region, and the plans and planning activities of organizations that affect or are concerned with planning and development within the region.
(e) The consolidated agency shall engage in a public collaborative planning process. The recommendations resulting from the public collaborative planning process shall be made available to and considered by the consolidated agency for integration into the draft regional comprehensive plan. The consolidated agency shall 27 January 23, 2023 Item 11
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(f) In formulating and maintaining the regional comprehensive plan, the consolidated agency shall seek the cooperation and consider the recommendations of all of the following:
(1) Its member agencies and other agencies of local government within the jurisdiction of the consolidated agency.
(2) State and federal agencies.
(3) Educational institutions.
(4) Research organizations, whether public or private.
(5) Civic groups.
(6) Private individuals.
(7) Governmental jurisdictions located outside the region but contiguous to its boundaries. (g) The consolidated agency shall make the regional comprehensive plan, policies, and objectives available to all local agencies and facilitate consideration of the regional comprehensive plan in the development, implementation, and update of local general plans. The consolidated agency shall provide assistance and enhance the opportunities for local agencies to develop, implement, and update general plans in a manner that recognizes, at a minimum, land use, transportation compatibility, and a jobs-to-housing balance within the regional comprehensive plan.
(h) The consolidated agency shall maintain the data, maps, and other information developed in the course of formulating the regional comprehensive plan in a form suitable to assure a consistent view of developmental trends and other relevant information for the availability of and use by other government agencies and private organizations.
(i) The components of the regional comprehensive plan may include, but are not limited to, transportation, housing, water quality and supply, infrastructure, air quality, energy, solid waste, economy, and open space, including habitat. Performance standards and measurable criteria shall be established through a public process to ensure that the regional comprehensive plan is prepared consistent with these measures as well as in determining achievement of the regional comprehensive plan goals throughout its implementation. (j) Any water supply component or provision of the regional infrastructure strategy regarding water supply contained in the regional comprehensive plan shall be consistent with the urban water management plan and other adopted regional water facilities and supply plans of the San Diego County Water Authority.

SEC. 18. Section 132362 of the Public Utilities Code is amended to read:
132362. (a) In addition to the authority set forth in Article 5 (commencing with Section 132300) and Article 6 (commencing with Section 132320) of Chapter 2 of Division 12.7, if the consolidated agency provides compensation to San Diego County for the cost of including an ordinance or measure on the ballot, the consolidated agency may call an election, including an advisory election, in San Diego County on any ordinance or measure regarding the governance of or matters related to the powers, privileges, or duties of the consolidated agency, including, but not limited to, merger or complete consolidation of the transit boards. (b) The ordinance or measure shall be consistent with, and shall not be in conflict with, any other provision of this chapter.

SEC. 19. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. 28 January 23, 2023 Item 11
City of Del Mar
Agenda Report
________________________________________________________________________________________________________ City Council Action:

TO: Honorable Mayor and City Council Members
FROM: Ashley Jones, City Manager
Clem Brown, Assistant City Manager
Sarah Krietor, Administrative Service Manager/City Clerk DATE: January 23, 2023
SUBJECT: Preparations for 2023 City Council Goal Setting Workshop REQUESTED ACTION/RECOMMENDATION:

Staff recommends that the City Council provide feedback on the proposed 2023 City Council Goal Setting Workshop (Attachment A); and consider options for a City Council retreat and provide direction to staff as may be needed.

DISCUSSION/ANALYSIS:

Historically, in the beginning of each calendar year, the City Council holds a Goals & Priorities Setting Workshop (Workshop) to establish clear goals and priorities for the City, which helps guide the City’s work plan and identify budgetary needs. The current fiscal year (FY 2022-23) is the second year of a two-year budget cycle, and the City will start work this spring to prepare a new two-year budget for Fiscal Years 2023-2024 and 2024- 2025. The Council Workshop is an important first step in the budget process in that the Council goals and priorities established during the Workshop will be used by staff to finalize a comprehensive work plan that will be the basis for the City’s Fiscal Year 2023- 2024 and 2024-2025 Operating and Capital Budget.

In preparation for the 2023 Workshop, staff met with Mayor Tracy Martinez and Deputy Dan Quirk to develop the attached proposed Workshop outline (Attachment A).

Consistent with past practice, the purpose of this agenda item is to seek input from the full Council in preparation for the Workshop.

Proposed Workshop Purpose & Format
The proposed format for the Workshop (Attachment A) includes an overview and status update on the current FY 2022-23 work plan items, including those that that are expected to continue into FY 2023-2024 and 2024-25; discussion of new potential work plan items from staff or included as Council-identified “wish list” items; and the setting of goals and priorities for the upcoming two-year budget cycle.
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2023 City Council Goal Setting Workshop Preparations
January 23, 2022

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In response to the severe budget constraints resulting from the COVID-19 pandemic, starting in 2020, the City established a tiered system for prioritizing work plan items, which includes Tier 1 (essential services), Tier 2 (important items that support City operations/values) and Tier 3 (non-essential items that could be differed or eliminated) items. While the prioritization system was developed out of necessity, it has proven to be a simple and effective way to arrange the City Council goals, priorities, and operational necessities, and assists with effective development and management of the City’s budget.

Staff envisions continuing to use this tiered system to help guide the discussion of goals and priorities and potential work plan items for FY 2023-2024 and 2024-2025.

Workshop Scheduling & Format
Staff is recommending that the Council hold the Workshop in mid-February, which would occur prior to the City’s Midyear Budget Update that is planned for presentation to the City Council on March 6, 2023, and the beginning of the two-year budget cycle. It is anticipated that a minimum of four hours will be needed for the Workshop, and staff is proposing to hold the Workshop in the City Council Chambers. If the City Council is supportive of this timing, the City Clerk should be directed to poll the Council to determine a date and time for the Workshop.

Recognizing the importance of public input regarding the City’s goals and priorities, once a date and time for the Workshop has been finalized, information about the Workshop will be posted on the City’s website and featured in the Weekly Update, and e-blasts about the Workshop will go out to the City’s email subscriber lists. As with other City public meetings, members of the public can submit written comments in advance of the meeting or comment live during the meeting both in-person and remotely. The meeting will be open to the public in-person; televised and live streamed on the internet; and recorded/archived on the City’s website.

City Council Potential Interest in Team Building Retreat Historically, from time-to-time, the City Council has held a team building retreat. The City Council most recently held a team building retreat in January 2019. Council membership has changed since that time, and the City Council may wish to consider holding a team building retreat in 2023. Staff suggests that any team building retreat be held separately from the Goal Setting Workshop to allow the City Council adequate time for each.

Team building retreats can be held in a range of formats, with or without use of a professional facilitator. Past team building workshops have been held to conduct a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis for the City; develop new or review the existing City core values and mission statement; and other strategic planning exercises. A retreat may also include a closed session discussion on how to work better together and communicate effectively to give direction to the City Manager and City Attorney to facilitate successful performance. 2 January 23, 2023 Item 12
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2023 City Council Goal Setting Workshop Preparations
January 23, 2022

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Staff recommends that the City Council provide direction to staff on whether a team building retreat is desired in 2023. If so, the Council should advise staff as to the desired format and purpose of the retreat, whether a facilitator is needed, and optimal timing for scheduling.

FISCAL IMPACT:

There is no immediate fiscal impact or action to be taken by the City Council related to this agenda item.

ENVIRONMENTAL IMPACT:

The proposed City Council action does not constitute a “project” under the definition set forth in California Environmental Quality Act (CEQA) Guidelines Section 15378 because it will not have a potential to result in a direct or indirect physical change in the environment and is, therefore, not subject to CEQA. No further action under CEQA is required.

NEXUS TO CITY COUNCIL GOALS AND PRIORITIES:

The 2023 Goal Setting Workshop is an operational item related to the City Council’s Goals and Priorities.

ATTACHMENTS:

Attachment A - 2023 Goal Setting Workshop Proposed Agenda Outline 3 January 23, 2023 Item 12

ATTACHMENT A
Proposed 2023 City Council Goal Setting Workshop Agenda A. High Level City Budget Status Report
o Staff to provide a high level overview of the City’s current financial status
B. Status of Current Fiscal 2022-2023 Work Plan Items
o Staff to provide an overview of current work plan items, status, and identify which items will continue into FY 2023-24 and FY 2024-25 C. Review Staff-Identified Needs for FY 2023-2024 & FY 2024-2025 o Staff to provide a list of proposed projects and related costs that have been identified as new Tier 1 or Tier 2 work plan items D. Review Council-Identified Interests/Potential Workplan Items o Review list of Council proposed “wish list” items for Council discussion and feedback
E. Discussion of FY 2023-24 and FY 2024-25 Goals and Priorities o Council to provide direction on list of potential goals and priorities o Staff will use Council goals/priorities to bring back a proposed work plan and budget for FY 2023-2024 and FY 2024-25
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Del Mar City CouncilJanuary 23, 2023

Del Mar City Council
January 23, 2023