Agenda packet, regular meeting — East Palo Alto City Council, January 18, 2022

East Palo Alto City Council January 18, 2022 Agenda Page 1 of 4

EAST PALO ALTO CITY COUNCIL

REGULAR MEETING AGENDA
January 18, 2022, 6:30 p.m.

EPA Government Center
2415 University Ave, First Floor
East Palo Alto, CA 94303
NOTICE
This City Council meeting will be conducted in accordance with City of East Palo Alto Resolution adopted in accordance with Assembly Bill 361. All members of the City Council will participate in the meeting by video conference, with no physical meeting location available to the public.

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International numbers available: https://zoom.us/u/aMWYF4KT East Palo Alto City Council January 18, 2022 Agenda Page 2 of 4

1. CALL TO ORDER AND ROLL CALL

2. APPROVAL OF THE AGENDA

3. APPROVAL OF CONSENT CALENDAR

1. East Palo Alto Career Center’s Technical Advisory Committee Recommendation: Accept informational report regarding the recommended representatives identified by each City Councilmember to participate in the Career Center’s Community Advisory Committee (“CAC”).

2. Amendment of Agreement with David Rosen & Associates for Financial Analysis Related to Housing
Recommendation: Adopt a Resolution (Attachment 1):

1. Appropriating $40,000 from the following Funds: Housing Successor (F220), Measure HH (F219), and General Fund (010); and

2. Authorizing the City Manager to execute an amendment to the Professional Services Agreement (“Agreement”) with David Rosen & Associates that increases the not-to-exceed amount to $165,000 and allows for an additional one-year extension of the contract term with approval of the City Manager.

3. Measure O Contract-Anti-Displacement Services Agreement, Clarifying Resolution Recommendation: Adopt a resolution clarifying that the total amount of the two-year contract for anti-displacement services with Nuestra Casa, Youth United for Community Action, and Community Legal Services in East Palo Alto, dated April 1, 2020 and subsequently amended on July 1, 2021, is Six Hundred Eighteen Thousand and One Hundred Seventy Six Dollars ($618,176).

4. Amendments to contracts with Raimi + Associates related to the Ravenswood Business District Specific Plan and Project Management Services Recommendation: That the City Council:

1. Accept the staff report regarding the status update on the Raimi + Associates contract to provide the analysis, community engagement, and environmental review necessary for the City Council to consider an amendment to the Ravenswood Business District (RBD) Specific Plan;

2. Adopt a Resolution authorizing the City Manager to amend the Raimi + Associates contract

5. AB 361 Findings to Continue Virtual Public Meetings for the City Council and City Advisory Bodies
Recommendation: Adopt a resolution making the AB 361 findings necessary to continue virtual public meetings for the City Council and City Advisory Bodies for the month of February 2022.

6. City Council Consideration of an Agreement with Greg Larson to Provide Management-Related Services
Recommendation: Adopt a Resolution (Attachment 1):

1. Authorizing the City Manager to enter into an agreement, in a form approved by the City Attorney, with consultant Greg Larson in the amount of $25,000 for the purposes of providing facilitation for City Council engagement and other management-related services; and

2. Waiving the bid procedures pursuant to East Palo Alto Municipal Code section

2.84.070(D).

7. Proclamation Against Human Trafficking in The Bay Area Recommendation: Accept the proclamation.

8. Quarterly COVID-19 Emergency Reporting
Recommendation: Adopt a resolution:

1. Accepting the Quarterly Emergency Report For December 31, 2021, and

2. Ratifying the City Manager’s Authorization Of the COVID Community Testing And Vaccination Outreach And Site Support Cost Reimbursement Agreement With San Mateo County, and

3. Ratifying Emergency Response Expenditures
East Palo Alto City Council January 18, 2022 Agenda Page 3 of 4

9. Approve Compensation Adjustments for Non-Bargaining, Unrepresented Confidential Restricted Classific
Recommendation: Adopt a Resolution:

1. Approving the 3% COLA adjustment effective the first full pay period following January 1, 2022, for Unrepresented Confidential Non-Bargaining Restricted Classifications;

2. Approving the third and final equity adjustment equal to 1/3 the percentage increase to achieve the target of 95% of market median for these unrepresented classifications; and

3. Appropriating $60,618 from General Fund vacancy and other salary savings within the Budget for Fiscal Year 2021-22.

10. Request to increase contract and purchase order for Ricoh Digital Services Recommendation: Authorize the City Manager to increase Ricoh Digital Services contract and purchase order in an amount not to exceed Seventeen Thousand Six Hundred Five Dollars and Thirty Six Cents ($17,605.36).

11. Approval of a new leasing agreement with Shamrock Office Solutions for Citywide Copy Machines
Recommendation: Authorize the City Manager to enter into a Four-year lease agreement with Shamrock Office Solutions to provide six multi-use copy machines throughout city offices in an amount not to exceed Ninety-Nine Thousand Eight Hundred Fifty-One Dollars and Fifty-Two cents ($99,851.52).

12. November 2020 Cash Report
Recommendation: Accept and file the Cash Treasury Report for the month of November 2021

4. PUBLIC COMMENT
Members of the public wishing to address the City Council on items not listed on the agenda may do so under this item. Each speaker is limited to two minutes. The Mayor has the discretion to adjust speaking times. In accordance with State Law, no action or discussion may take place on any item not appearing on the posted agenda. The Council may respond to statements made or questions asked or may request Staff to report back at a future meeting concerning the matter.

The exceptions under which the City Council may discuss and/or take action on items not appearing on the agenda are contained in Government Code Section 54954.2(b)(1)(2)(3).

5. INFORMATIONAL REPORTS

6. SPECIAL PRESENTATIONS

7. PUBLIC HEARINGS

1. Introduction of East Palo Alto Opportunity to Purchase Act ("EPA OPA") Ordinance Recommendation: Waive the first reading and introduce an Ordinance titled “East Palo Alto Opportunity to Purchase Act” (“EPA OPA”), adding Chapter 14.26 to the East Palo Alto Municipal Code.

8. POLICY AND ACTION

1. COVID-19 Vaccination Program Regular Update
Recommendation: Discuss the COVID-19 vaccination program update and provide direction to staff.

9. COUNCIL REPORTS

10. ADJOURNMENT
East Palo Alto City Council January 18, 2022 Agenda Page 4 of 4 This AGENDA is posted in accordance with Government Code Section 54954.2(a) This Notice of Availability of Public Records: All public records relating to an open session item which are not exempt from disclosure pursuant to the Public Records Act, that are distributed to the majority of the City Council will be available for public inspection at the City Clerk’s Office, 2415 University Avenue, East Palo Alto, CA at the same time that the public records are distributed or made available to the City Council. Such documents may also be available on the East Palo Alto website www.cityofepa.org subject to staff’s ability to post the documents prior to the meeting. Information may be obtained by calling (650) 853-3100.

The City Council meeting packet may be reviewed by the public in the Library or the City Clerk's Office. Any writings or documents pertaining to an open session item provided to a majority of the City Council less than 72 hours prior to the meeting, shall be made available for public inspection at the front counter at the City Clerk's Office, 2ND Floor, City Hall, 2415 University Avenue, East Palo Alto, California 94303 during normal business hours. Information distributed to the Council at the Council meeting becomes part of the public record. A copy of written material, pictures, etc. should be provided for this purpose.

East Palo Alto City Council Chambers is ADA compliant. Requests for disability related modifications or accommodations, aids or services may be made by a person with a disability to the City Clerk's office at (650) 853-3127 no less than 72 hours prior to the meeting as required by Section 202 of the Americans with Disabilities Act of 1990 and the federal rules and regulations adopted in implementation thereof.

DECLARATION OF POSTING
This Notice is posted in accordance with Government Code §54954.2(a) or §54956. Members of the public can view electronic agendas and staff reports by accessing the City website. Under penalty of perjury, this Agenda was posted to the public at least 72 hours prior to the meeting.

POSTED: January 15,2022
ATTEST:

James Colin
Acting City Clerk

UPCOMING CITY COUNCIL MEETINGS
• Tuesday, January 25, 2022 - 6:00 p.m. – Special Study Session meeting • Tuesday, February 1, 2022 – 6:30 p.m. – Regular Council meeting

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: Patrick Heisinger, Assistant City Manager
SUBJECT: East Palo Alto Career Center’s Technical Advisory Committee Recommendation
Accept informational report regarding the recommended representatives identified by each City Councilmember to participate in the Career Center’s Community Advisory Committee (“CAC”).

Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Priority No. 2: Enhance Economic Vitality
Priority No. 5: Improve Communication and Enhance Community Engagement Background
Since February 2021, the City Council has held multiple public discussions regarding the governance structure of the East Palo Alto Career Center’s Technical Advisory Committee (“TAC”). On November 2, 2021, and December 7, 2021, the City Council approved the following elements of the TAC structure:

1. The TAC will support two sub-committees:
a. Employer Advisory Committee (“EAC”); and
b. Community Advisory Committee (“CAC”).

2. A City staff member shall be included in each sub-committee.

3. The CAC will include at least five (5) East Palo Alto residents; each City Councilmember will recommend a participant to JobTrain, the Career Center operator. a. For inaugural appointments, JobTrain and the City representative on the CAC will review the City Council CAC recommendations and make the final decision by consensus.
b. When vacancies arise, the remaining active CAC members would recruit and

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eventually select future CAC members.

4. Each sub-committee will engage 8-10 members, yet the total number may be adjusted with flexibility, as long East Palo Alto residents are represented by a minimum of five (5) members.

5. Sub-committees will meet at least quarterly starting in 2022, and each TAC would decide on the schedule moving forward. The members of the sub-committee will set the meeting schedule, not JobTrain.

6. JobTrain will be required to provide quarterly updates to the City Council that will focus on outcomes and highlights from the TAC and both sub-committees.

7. Quarterly reports will be posted on a dedicated page of the City’s website, on which JobTrain, the TAC, and sub-committees may also post other updates and information, as necessary.

At the conclusion of the item on December 7, 2021, each City Council member committed to providing staff with their recommendation for the CAC
Analysis
The table below identifies each councilmembers recommendation to the CAC as well as the City Manager’s staff appointment.

CITY LEADERSHIP RECOMMENDATIONS FOR CAC
Councilmember Recommended Participant
First Name Last Name
Mayor Abrica Elvira Macias
Vice Mayor Gauthier Robert Jones
Councilmember Lopez Julian Garcia
Councilmember Romero Stewart Hyland
Councilmember Wallace-Jones Joan Carter
City Manager (City Staff Member) Rachel Horst
Next Steps
Staff will forward the names identified by each City Councilmember to JobTrain for consideration for the CAC.

Fiscal Impact
There are no fiscal impacts associated with the items discussed in this staff report.

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Public Notice
The public was provided notice by making the agenda and report available on the City’s website and at the San Mateo County Library located at 2415 University Avenue, East Palo Alto.

Environmental
The action being considered does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.

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EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: Rachel Horst, Housing Project Manager
SUBJECT: Amendment of Agreement with David Rosen & Associates for Financial Analysis Related to Housing
Recommendation
Adopt a Resolution (Attachment 1):

1. Appropriating $40,000 from the following Funds: Housing Successor (F220), Measure HH (F219), and General Fund (010); and

2. Authorizing the City Manager to execute an amendment to the Professional Services Agreement (“Agreement”) with David Rosen & Associates that increases the not-toexceed amount to $165,000 and allows for an additional one-year extension of the contract term with approval of the City Manager.

Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Priority No. 6: Create a Healthy and Safe Community
Background
Professional Services Agreement with David Rosen & Associates On February 5, 2019, the City Council adopted Resolution No. 5081 (Attachment 2), authorizing the City Manager to execute a Professional Services Agreement (“Agreement”) with David Rosen & Associates (“DRA”) in an amount not to exceed $125,000. DRA was selected as one of three firms through a Request for Qualifications (“RFQ”) process for financial consulting services related to the City’s affordable housing and development activities.

The general scope of work for these agreements is provided in Exhibit A to Resolution No. 5081. The term of the three-year Agreement with DRA ends on February 4, 2022, with an

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option to extend contract term by one year with the approval of the City Manager, as described in Exhibit A.

East Palo Alto Opportunity to Purchase Act Ordinance Analysis At the December 22, 2021 public hearing on an Opportunity to Purchase Act Ordinance (“EPA OPA”), DRA staff were present to address general questions about real estate trends and potential impacts of an EPA OPA. At this meeting, the City Council directed staff to engage DRA for a formal analysis and to return with an updated draft Ordinance at the January 18, 2022 City Council meeting.

Analysis of Affordable Housing Revenue Options
At the City Council Priority-Setting Session on January 8, 2022, the City Council directed staff to return in late February or early March with revenue options to support affordable housing.

DRA had previously developed a comprehensive study of revenue sources for the City, which staff presented to City Council in February 2020.

There are sufficient funds remaining under the Agreement to support completion of these tasks. However, with the addition of an EPA OPA analysis and an updated study of potential affordable housing revenue sources, this will exhaust and exceed the total amount of $125,000.

The purpose of this staff report is to seek City Council authorization to extend the term by one year and increase the maximum amount in the Agreement by $40,000 total to 1.) support an EPA OPA analysis and 2.) an affordable housing revenue sources analysis, thereby preserving sufficient funds for other DRA consulting services under the Agreement through the end of the contract term.

Analysis
DRA Work to Date
The scope of work proposed by DRA for an EPA OPA analysis, totaling $20,000, is provided as Attachment 3. This work falls within the service categories described in Exhibit A to No. 5081.

The table below describes the work performed by DRA to date and currently in progress under the Agreement, with the amount remaining prior to and after all proposed work is completed.

With $49,553 remaining under this Agreement, there are sufficient funds to support additional activities through the contract term. After completion of an EPA OPA analysis, however, there would be an estimated $9,000 remaining in the contract. An additional revenue study may not be covered by the amount remaining.

Staff therefore recommend amending the Agreement to increase the total by $40,000 to retain funds for other activities intended under the Agreement.

DRA Work Performed under Current Agreement & Proposed Activities Activity Timeframe Amount
Update of Housing Impact
Fees
March 2019 $4,230
Challenge Grant Application June-July 2019 $5,437

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Technical Assistance
Inclusionary Housing In-Lieu
Fee Study
July-December 2019 $26,823
Affordable Housing Revenue
Sources
December 2019-January
2020
$18,667
Amount Remaining $49,553
ADU Inclusionary Housing
Alternative Compliance
Option Analysis
In Progress $20,000
EPA OPA Analysis Proposed $20,000
Affordable Housing Revenue
Sources Update
Proposed $20,000
Amount Remaining after
Proposed Activities
($10,447)
Next Steps
If approved, the City Manager will execute the contract amendment with DRA to increase the not-to-exceed amount to $165,000 and extend the contract term to February 4, 2023, in addition to a one-year extension option at the discretion of the City Manager.

Fiscal Impact
Tasks performed under the Agreement are currently funded by a combination of funds from Measure HH (F219), Housing Successor (F220), and the General Fund. An increase of $40,000 will require appropriation from one or more of these funds. Staff recommend utilizing a combination of these same funds for the increased amount, with a minimum of $20,000 from the Housing Successor Fund.

Public Notice
The public was provided notice by making the agenda and report available on the City’s website and at the San Mateo Co. Library located at 2415 University Avenue, East Palo Alto.

Attachments

1. Resolution

2. Resolution 5081

3. David Rosen & Associates Scope of Work for EPA OPA Analysis

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Resolution No. XX-2022 1 of 2
RESOLUTION NO. XX – 2022

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF EAST PALO ALTO

AUTHORIZING THE CITY MANAGER TO EXECUTE AN AMENDMENT TO THE PROFESSIONAL

SERVICES AGREEMENT WITH DAVID ROSEN & ASSOCIATES FOR FINANCIAL CONSULTING SERVICES TO INCREASE THE NOT-TO-EXCEED AMOUNT TO $165,000 AND EXTEND THE TERM

BY ONE YEAR
WHEREAS, on February 5, 2019, via Resolution No. 5081, the City Council authorized the City Manager to execute a Professional Services Agreement (“Agreement”) with David Rosen & Associates (“DRA”) in an amount not to exceed $125,000 for a three-year term for financial consulting services; and
WHEREAS, DRA has performed analyses under this Agreement to support the City of East Palo Alto’s (“City”) affordable housing and development work, including development of its Inclusionary Housing ordinance and program; and
WHEREAS, at a public hearing on December 22, 2021, the City Council considered an East Palo Alto Opportunity to Purchase Act Ordinance (“EPA OPA”) and directed staff to return with an updated ordinance and accompanying analysis of real estate trends and potential impacts of EPA OPA for City Council consideration; and
WHEREAS, the City Council wishes to engage DRA, as an experienced real estate economics consultant, for an analysis of EPA OPA; and
WHEREAS, at the City Council Priority-Setting Session on January 8, 2022, the City Council directed staff to return in February or March with a study of City revenue options to support affordable housing, an analysis that was most recently completed by DRA in February 2020; WHEREAS, completion of these tasks and other activities under the Agreement will require additional funds.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO HEREBY:

1. Appropriates $40,000 from the following Funds: Housing Successor (F220), Measure HH (F219), and General Fund (010); and

2. Authorizes the City Manager to execute an amendment to the Agreement with DRA that increases the not-to-exceed amount to $165,000 and allows for an additional one-year extension of the contract term with approval of the City Manager.

3.2.a
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Attachment: Resolution (2071 : David Rosen & Associates Contract Amendment) Resolution No. XX-2022 2 of 2
PASSED AND ADOPTED this 18th day of January 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Ruben Abrica, Mayor
ATTEST: APPROVED AS TO FORM:

City Clerk Rafael E. Alvarado Jr., City Attorney

3.2.a
Packet Pg. 12
Attachment: Resolution (2071 : David Rosen & Associates Contract Amendment) RESOLUTION NO. 5081

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO

AUTHORIZING THE CITY MANAGER TO EXECUTE PROFESSIONAL

SERVICES AGREEMENTS WITH DAVID ROSEN & ASSOCIATES, KEYSER

MARSTON, AND HEART OF SAN MATEO COUNTY FOR FINANCIAL
CONSULTING SERVICES FORAN AMOUNT NOT-TO-EXCEED $125,000, $125,000, AND $50,000, RESPECTIVELY
WHEREAS, the City adopted an Affordable Housing Strategy on October 16, 2018, which lays out the City's affordable housing goals and objectives for the next five years; and
WHEREAS, the Affordable Housing Strategy identifies the need to engage financial consultants to help the City meet its affordable housing goals and objectives; and
WHEREAS, the City must build its capacity to negotiate, process, and complete several market-rate residential developments as well as non-residential projects; and WHEREAS, the Community and Economic Development Department ("CEDD") issued a Request for Proposals on October 26, 2018, to identifY consultants who would provide the City with financial consulting services; and WHEREAS, staff received proposals from David Rosen & Associates, Keyser Marston, and HEART of San Mateo County; and
WHEREAS, CEDD staff reviewed the proposals and determined all three firms have the necessary experience with the tasks included in the scope of work; and WHEREAS, staff recommend awarding three contracts, one to each proposer (David Rosen & Associates, Keyser Marston, and HEART of San Mateo County) because each firm provides capacity to support City staff efforts, and contracting with three finns provides staffwith options according to their unique expertise and availability at any given time; and
WHEREAS, the Scope of Work for each contract would be modeled after Exhibit-A of this Resolution; and
WHEREAS, the contract amounts would be capped at $125,000 for David Rosen & Associates, $125,000 for Keyser Marston, and $50,000 for HEART of San Mateo County, respectively, according the anticipated level of consulting activity that would be requested of each; and

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Attachment: Resolution 5081 (2071 : David Rosen & Associates Contract Amendment) WHEREAS, the Affordable Housing Fund has sufficient funds to allocate to these contracts; and
WHEREAS, to the maximum extent feasible, the City will be reimbursed for these costs from associated development projects.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL
OF THE CITY OF EAST PALO ALTO HEREBY authorizes the City Manager to execute a professional services agreements, in a form approved by the City Attorney, with David Rosen & Associates for an amount not-to-exceed $125,000, Keyser Marston for an amount not-to-exceed $125,000, and HEART of San Mateo County for an amount not-to-exceed $50,000, for financial Consulting Services described in Exhibit A attached to this Resolution.

PASSED AND ADOPTED this 5th day of February 2019, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

MOODY, ROMERO, ABRICA, GAUTHIER, WALLACE-JONES
NONE
NONE
NONE
SIGNED:

APPROVED AS TO FORM:

3.2.b
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Attachment: Resolution 5081 (2071 : David Rosen & Associates Contract Amendment)

EXHIBIT-A

GENERAL SCOPE OF WORK FOR FINANCIAL CONSULTING SERVICES The City of East Palo Alto had identified the need to contract financial consultant services, thereby increasing the City's capacity to achieve its goals in preserving and enhancing the supply of affordable housing, as well as efficiently managing other types of development activity.

The selected consultant (Contractor) shall provide the services that will include, but will not be limited to financial feasibility assessment, affordable housing underwriting assistance, land use planning, public benefit analysis, inclusionary housing and impact fee analysis services, developer agreements, replacement housing compliance, and review of financial assistance requests to the City for affordable housing and/or mixed-use development.

Contractor will be expected to provide "on-demand" services in response to City staff requests in the areas of Affordable Housing and General Financial Consulting. Specific tasks in each area are detailed, as follows:

Affordable Housing Consulting Services
Financial Analysis
Review project and sponsor financial statements to understand projects' financial feasibility, operating contexts, risks, and the sponsors' financial strength.

Originations and Loan Restructurings
Representing the City on deal team calls and orchestrating work done by the City Attorney's office, Finance Department, external counsel and advisors, and transaction support staff in the Community and Economic Development Department to close loans and bond issuances.
• Request for Proposals
Managing the RFP process for disposition of City-owned properties for development of affordable housing.
• Transactions
In coordination with the City Attorney's Office, preparation and processing of documents evidencing housing development loans, including loan originations or restructurings underwritten by others.

Policies and Procedures for Multifamily Underwriting/Transactions

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Attachment: Resolution 5081 (2071 : David Rosen & Associates Contract Amendment) Suggesting policy solutions for situations not already addressed in the Policies and Procedures Manual for origination, asset management, and bond-related activities. • Preparing summary reports pursuant to section 33433 of the California Health and Safety Code.

Assistance in updating the City's inclusionary and linkage fee programs.

General Financial Consulting Services
Financial, economic analysis, development, and negotiation advisory services for development projects;
Real estate market analyses;
Rent stabilization analyses;
• Assistance with calculating potential public benefits for development projects; Support local, county, regional, state, and federal legislation that will expand affordable housing;
Annual preparation of property tax data identifying parcels subject to the Measure HH tax and verifying the total square footage subject to the tax; Relocation analysis consistent with the Uniform Relocation Act, the California Relocation Assistance Law, and other regulations tied to relocation; and Other services as may be requested by the City.

Term
• Initial Term: 3 Years
• Extension: City Manager can extend for up to one additional year.

3.2.b
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Attachment: Resolution 5081 (2071 : David Rosen & Associates Contract Amendment) December 29, 2021
Via email
To: Patrick Heisinger, Rachel Horst
From: Nora Lake-Brown, David Rosen
Subject: Scope of Services: TOPA Analysis
This memorandum outlines DRA’s scope of services to review and analyze information related to the effect of a Tenant Opportunity to Purchase (TOPA) ordinance in the City of East Palo Alto. The purpose of the review is to inform the City Council on potential fiscal and economic effects of TOPA on the City.

Scope of Services and Deliverables
Task 1: Provide Supporting Data on Residential Market Trends DRA will provide a brief summary of data supporting the current strength of the regional residential market and projections of continued demand. This summary may include:
• Trends in single-family home sales and prices in the region and the City; • Trends in the construction/supply of new homes in the region and the City (affordable vs. market-rate unit construction);
• Data on the imbalance between supply and demand and the expected continued pressure on home prices in EPA
Task 2: Illustrate Capital Subsidy Resources Necessary for Nonprofits to Purchase Single-Family Homes
DRA will provide a simple gap calculation and tabulation of existing capital subsidy sources for affordable housing. DRA will compare the average assessed value of an absentee-owned home (from Property Radar) with 1) the calculated affordable home prices for sale to low and moderate income households in East Palo Alto; and 2) the estimated supportable mortgage for a rental unit. Using the results of Task 3 on the estimated of number of homes potentially purchased by nonprofits each year under alternative scenarios, DRA will estimate the total gap resources required annually

3.2.c
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Attachment: David Rosen & Associates Scope of Work for EPA OPA Analysis (2071 : David Rosen & Associates Contract Amendment) Patrick Heisinger, Rachel Horst
December 29, 2021

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under these scenarios. DRA will also provide a summary of available affordable housing subsidy sources and identify sources that may be used for subsidizing affordable homeownership under the OPA.

Task 3: Estimate Loss in Property Taxes from Single-Family Detached Units Purchased by Nonprofit Housing Corporations; Compare to Increase in Property Taxes from New Homes
DRA will estimate the potential loss in annual property tax revenues associated with the removal of single-family homes purchased nonprofit housing corporations from the tax rolls. Potential property tax loss will be estimated under presumed “worst case” and alternative scenarios. The calculation will incorporate:
• Average sales per year (number of units) of owner-occupied and absenteeowned single-family homes in East Palo Alto over the past 5, 10 and 15-years (based on data from Property Radar);
• Average 2021 assessed value of absentee-owned homes from Property Radar; • Assumptions/scenarios on the percentage of homes sold to nonprofits and removed from the tax rolls each year (drawing in part from the results of Task 1).

The potential loss in assessed value and property tax revenues to the City will be shown as a percentage of the City’s residential and total tax base.

DRA will also estimate the additional property tax revenues that will be received by the City as the existing pipeline of 800 market-rate single-family is built out. DRA will estimate the increase in assessed values and property tax revenues to the City from these new units in comparison with the potential loss of property tax revenues due to TOPA.

DRA will note that households purchasing single-family homes from nonprofits will continue to pay property taxes, including property taxes based on the affordable sales price of the unit and other assessments. If a low income household qualifies for an adjustment to the assessed value, it will still be valued at the affordable price. DRA

3.2.c
Packet Pg. 18
Attachment: David Rosen & Associates Scope of Work for EPA OPA Analysis (2071 : David Rosen & Associates Contract Amendment) Patrick Heisinger, Rachel Horst
December 29, 2021

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will factor estimates of sales to low income households into one or more of its calculation scenarios. DRA will also list the other assessments in EPA.

Task 4: 1031 Exchanges
DRA will review available data to estimate the number of 1031 exchanges by East Palo Alto residents selling their homes. DRA will also compare the time frames under a 1031 exchange with the time frames in the TOPA ordinance.

Deliverables: Memo and supportive tables describing current market conditions and the assumptions, calculations and conclusions used in Tasks 1 through 4.

Budget
DRA will complete Tasks 1 through 4 for a not-to-exceed budget of $20,000, to be billed on a time and expense basis, per DRA’s Professional Fee and Expense Reimbursement Schedule in our contract with the City.

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Attachment: David Rosen & Associates Scope of Work for EPA OPA Analysis (2071 : David Rosen & Associates Contract Amendment)

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: Victor Ramirez, Rent Stablization Program Administrator SUBJECT: Measure O Contract-Anti-Displacement Services Agreement, Clarifying Resolution
Recommendation
Adopt a resolution clarifying that the total amount of the two-year contract for anti-displacement services with Nuestra Casa, Youth United for Community Action, and Community Legal Services in East Palo Alto, dated April 1, 2020 and subsequently amended on July 1, 2021, is Six Hundred Eighteen Thousand and One Hundred Seventy Six Dollars ($618,176).

Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

A. Priority #6: Create a Healthy and Safe Community
Background
On February 18, 2020, the City Council adopted the Resolution No. 17-2020 directing the City Manager to enter a one-year contract for anti-displacement services with Nuestra Casa, Youth United for Community Action, and Community Legal Services in East Palo Alto for an amount not to exceed $279,088 (Attachment 2). Furthermore, the resolution also authorized the City Manager to renew the contract for another year upon successful achievement of the first-year contract deliverables and subject to available General Fund revenues and the appropriated Rent Stabilization Program’s funds.

On April 1, 2020, the City executed an anti-displacement services agreement (“Measure O Contract”) with the above-mentioned non-profit organizations for the activities described in the Anti-Displacement Services Agreement Scope that was also approved at the February 18 Council meeting (Attachment 3). The City Council staff report is available online for reference1. 1 February 18, 2021 Council Meeting Staff Report:
http://eastpaloalto.iqm2.com/Citizens/Detail_LegiFile.aspx?Frame=&MeetingID=1061&MediaPosition=&I D=1108&CssClass=

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As described in the February 18, 2020 staff report, upon the successful achievement of the first-year contract deliverables and pursuant to the City Manager’s authority under Resolution No. 17-2020, the Measure O Contract with Nuestra Casa, Youth United for Community Action, and Community Legal Services in East Palo Alto (“Measure O Contract organizations”) would be extended for another year.

On January 29, 2021, the State of California adopted Senate Bill 91 (“SB 91”). This law created a program for the administration of $2.6 billion that California would be receiving from the US Treasury under the US Coronavirus Response and Relief Supplemental Appropriations Act, 20212. Due to the need to assist the community residents to access the SB 91 funds and to prevent the displacement that would be likely caused by the economic impact of the COVID 19 pandemic, staff contacted the Measure O Contract organizations to discuss their interests and capacity to amend the Measure O Contract to add SB 91 outreach and education activities to the scope of the contract.

On March 16, 2021, the City Council adopted the Resolution No. 34-2021 (Attachment 4). The City Council staff report is available online for reference3. The resolution authorized the City Manager to amend the April 1, 2020 contract with Nuestra Casa, Youth United for Community Action, and Community Legal Services in East Palo Alto to add to the contract scope of work services related to landlord and tenant outreach and education regarding the rental relief fund program created via SB 91. Furthermore, the resolution increased the total amount of the Contract from $279,088 to $339,088 and appropriated an additional amount of $60,000 from the General Fund revenues to cover any additional administrative costs incurred by Nuestra Casa, Youth United for Community Action, and Community Legal Services in East Palo Alto.

On July 1, 2021, the City executed an amendment to the Measure O Contract extending the contract for a second year and increasing the contract amount for the extended term of the contract to $339,088 (Attachment 5). The contract amount for the extended term of the contract brings the total amount of the contract for the two years to $618,176.

In October, upon the submission of the first quarter invoice by the Measure O organizations for the activities that they are performing during the current second year of the contract, the Finance Department raised concerns about the Resolution No. 34-2021 not clearly stating what the total amount of the contract for the two years. Thus, the purpose of this staff report is to clarify the intent of Resolution No. 34-2021 and confirm the total amount of the Measure O Contract.

Analysis
Due to the concerns raised by the Finance Department and upon consultation with the Office of the City Attorney, staff now seeks Council adoption of the clarifying resolution to clarify that the total amount of the Measure O Contract for the two-year term is $618,176.

As previously reported to Council, during and through the Measure O Contract, East Palo Alto residents facing eviction and at risk of displacement have been able to access legal services 2 SB91: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB91 3 March 16, 2021 Council Meeting Staff Report:
http://eastpaloalto.iqm2.com/Citizens/Detail_LegiFile.aspx?Frame=&MeetingID=1359&MediaPosition=&I D=1620&CssClass=

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and have been empowered to exercise their rights. The City has also been able to count on the services being provided through the Measure O Contract to promptly refer and assist residents when facing legal challenges that impact them collectively.

In coordination with the Measure O Contract organizations, City staff was able to engage in education and organization efforts with the residents of Palo Mobile Estates mobilehome park after the park owners started the conversion process of the park to a resident owned park in May of 2020 through the actual conversion last August and has been able to continue assisting residents with post-conversion matters. With the collaboration of the Measure O Contract organizations, the Rent Stabilization Program was also able to promptly respond to tenant inquiries and quickly mounted an outreach and education campaign after tenants received notices to pay rent or quit under new state laws adopted in response to the COVID19 pandemic as well as their rights and obligations under the City’s and County’s eviction moratoria. The City was also able to count on the services being provided through the Measure O Contract to assist coordinating and educating residents at Courtyard At Bay Road regarding their rights on habitability and rent increases.

Attachment 6 to this report specifically shows some of the other many Measure O Contract accomplishments and activities directed to the realization of the two main goals of the agreement: 1) provide legal services and 2) advance tenant advocacy and education to prevent displacement in the City.

Next Steps
If the proposed clarifying resolution is adopted by City Council, the Finance Department will process the first invoice already submitted by the Measure O organizations and any future invoices for the activities performed during the second year accordingly.

Fiscal Impact
The total fiscal impact associated with the Measure O Contract for the two years of the contract is $618,176. Council already appropriated an amount of $279,000 with the adoption of Resolution No. 17-2020 for the first year of the contract. Council then authorized the appropriation of an additional amount of $60,0000 augmenting the amount of the contract for the second year to $339,088. City staff seeks an additional appropriate of $279,000 for the second year of the contract. These funds are appropriated from the General Fund revenues and the Rent Stabilization Program Fund as directed by said resolutions.

Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website and at the San Mateo County Library located at 2415 University Avenue, East Palo Alto.

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changes in the environment.

Attachments

1. RESOLUTION re Measure O Contract

2. RESOLUTION 17-2020

3. Measure O CONTRACT - Anti-Displacement Services Agreement

4. RESOLUTION 34-2021

5. Measure O CONTRACT - Amendment No 1

6. Accomplishments Through the Measure O Contract

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Resolution No. XXX-2022 1 of 2
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF EAST PALO ALTO

CLARIFYING THAT THE TOTAL AMOUNT OF THE TWO-YEAR CONTRACT FOR

ANTI-DISPLACEMENT SERVICES WITH NUESTRA CASA, YOUTH UNITED FOR

COMMUNITY ACTION AND COMMUNITY LEGAL SERVICES IN EAST PALO ALTO DATED, APRIL 1, 2020 AND SUBSEQUENTLY AMENDED ON JULY 1, 2021, IS SIX

HUNDRED EIGHTEEN THOUSAND AND ONE HUNDRED SEVENTY SIX DOLLARS ($618,176)
WHEREAS, on February 18, 2020, the City Council adopted Resolution No. 17-2020 directing the City Manager to enter into a one-year contract for antidisplacement services with Nuestra Casa, Youth United for Community Action, and Community Legal Services in East Palo Alto (collectively “Non-Profits”) for an amount not to exceed $279,088, and to renew the contract for another year upon successful achievement of the first-year contract deliverables and subject to available General Fund revenues and the appropriated Rent Stabilization Program’s funds; and WHEREAS, on April 1, 2020, the City of East Palo Alto (“City”) executed an antidisplacement services agreement (“Measure O Contract”) with the Non-Profits for the activities described in the Anti-Displacement Services Agreement Scope approved at the February 18 Council meeting; and
WHEREAS, upon the successful achievement of the first-year contract deliverables and pursuant to the City Manager’s authority under Resolution No. 17-2020, the Measure O Contract would be extended for second year; and WHEREAS, on January 29, 2021, the State of California adopted Senate Bill 91 (“SB 91”), creating a program for the administration of $2.6 billion that California would be receiving from the US Treasury under the US Coronavirus Response and Relief Supplemental Appropriations Act, 2021; and
WHEREAS, on March 16, 2021, the City Council adopted the Resolution No. 34-2021 authorizing the City Manager to amend the April 1, 2020 contract to add SB 91 activities to the scope of the contract and augmenting the amount of the contract for the second year by $60,000 for a new total of $339,088; and WHEREAS, on July 1, 2021, the City executed an amendment to the Measure O Contract extending the contract for a second year and increasing the contract amount for the extended term of the contract to $339,088; and

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Attachment: RESOLUTION re Measure O Contract (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying Resolution) Resolution No. XXX-2022 2 of 2
WHEREAS, the contract amount for the extended term would bring the total not to exceed amount of the contract to $618,176 for the two year term; and WHEREAS, this resolution is necessary to clarify that Resolution No. 34-2021 authorized a total two-year contract amount of $618,176.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO HEREBY clarifies that the total amount of the two-year contract for anti-displacement services with Nuestra Casa, Youth United for Community Action, and Community Legal Services in East Palo Alto, dated April 1, 2020 and subsequently amended on July 1,2021, is Six Hundred Eighteen Thousand and One Hundred Seventy Six Dollars ($618,176).

PASSED AND ADOPTED this 11th day of January 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Ruben Abrica, Mayor
ATTEST: APPROVED AS TO FORM:

City Clerk Rafael E. Alvarado Jr., City Attorney

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Attachment: RESOLUTION re Measure O Contract (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying Resolution) RESOLUTION NO. 7— 2 o `

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF EAST PALO ALTO

APPROVING THE SCOPE OF WORK FOR AN ANTI -DISPLACEMENT SERVICES AGREEMENT

AND AUTHORIZING THE CITY MANAGER TO ENTER INTO A CONTRACT WITH NUESTRA CASA,

YOUTH UNITED FOR COMMUNITY ACTION, AND COMMUNITY LEGAL SERVICES IN EAST PALO ALTO FOR AN AMOUNT NOT TO EXCEED $279,088
WHEREAS, on October 16, 2018, the City Council approved the Five -Year Affordable Housing Strategy ("Strategy") for the City of East Palo Alto ("City"); and
WHEREAS, a key item included in the Strategy was future issuance of a Request for Proposals RFP") to identify an organization( s) to provide Measure O related services to the Community; and WHEREAS, on July 16, 2019, City Council directed staff to issue an RFP for Anti -Displacement Services and City staff issued the RFP on August 7, 2019; and WHEREAS, on October 4, 2019, Nuestra Casa, Youth United for Community Action ("YUCA") and Community Legal Services in East Palo Alto (" CLS"), collectively referred as " Respondents", submitted a joint proposal for eviction defense and tenant education & outreach services; and WHEREAS, on October 23, 2019, the Rent Stabilization Board, when considering the adoption of the Rent Stabilization Program' s annual program fee, expressed its support for City staff's recommendation to use the monies collected from penalty fees to cover the cost of eviction defense services for East Palo Alto residents; and
WHEREAS, the Rent Stabilization Program has collected approximately $ 314,000 in penalties from property owners who have failed to substantially comply with the requirements of the City's Rent Stabilization ordinances during the last four fiscal years; and WHEREAS, protecting tenants from improper evictions is a stated purpose of the City's Rent Stabilization Ordinances and the total cost of the proposed eviction defense services under the anti - displacement services contract for the first year is $ 116, 000; and WHEREAS, on November 19, 2019, the Council received an updated report, provided input, and directed the City Manager to negotiate a contract for anti -displacement services with Respondents for City Council' s consideration in early 2020.

NOW, THEREFORE, BE IT RESOLVED BY THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO HEREBY:

1. Directs the City Manager to enter into aone-year contract, with up to a one-year extension at the sole discretion of the City Manager, in a form approved by the City Attorney, for anti - displacement services with Nuestra Casa, Youth United for Community Action, and Community Legal Services in East Palo Alto, for an amount not to exceed $279,088; and

2. Appropriates $ 116, 000 from the Rent Stabilization Program Fund for eviction defense services in the first year of the contract; and

3. Amends the Rent Stabilization Program' s 2019-2020 Budget accordingly. 1 of 2

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Attachment: RESOLUTION 17-2020 (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying Resolution) PASSED AND ADOPTED this 18th day of February 2020, by the following vote:

AYES: ABlzicA, & AuT41EIZ I
lkooDY oM, l A c- oN s
NOES:

ABSENT:

ABSTAIN:

ATTEST: APPROVED AS TO FORM:

Rafael E. Alvarado Jr.,
2of2
Attorney

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Attachment: RESOLUTION 17-2020 (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying Resolution)

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Attachment: Measure O CONTRACT - Anti-Displacement Services Agreement (2032 : Measure O Contract-Anti-Displacement Services

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Attachment: Measure O CONTRACT - Anti-Displacement Services Agreement (2032 : Measure O Contract-Anti-Displacement Services RESOLUTION NO. 34 — 2021

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF EAST PALO ALTO

AUTHORIZING THE CITY MANAGER TO AMEND THE SCOPE FOR AN ANTI -DISPLACEMENT

SERVICES CONTRACT WITH NUESTRA CASA, YOUTH UNITED FOR COMMUNITY ACTION AND COMMUNITY LEGAL SERVICES IN EAST PALO ALTO DATED APRIL 1, 2020 AND APPROPRIATE AN ADDITIONAL $60,000 FROM THE GENERAL FUND
WHEREAS, on February 18, 2020, the East Palo Alto City Council adopted Resolution No. 17- 2020; and
WHEREAS, on April 11 20201 the City of East Palo Alto entered into an anti -displacement services agreement with Nuestra Casa, Youth United for Community Action, and Community Legal Services in East Palo Alto authorized by Resolution No. 17- 2020; and WHEREAS, the City Manager will extend the existing agreement for another year, for an amount riot to exceed $ 279,088, as authorized by Resolution f` lo. 17v2020; and WHEREAS, on January 29, 2021,
the State ofi California adopted Senate Bill 91 (" SB 91 ") creating a program for the administration of $2. 6 Billion that California will be receiving from the US Treasury under the US Coronavirus Response and Relief Supplemental Appropriations Act, 2021; and WHEREAS, on February 9, 2021, San Mateo County relinquished the administration of the County's estimated $47 Million federal rental relief funds to the State; and WHEREAS, the State contracted with Local Initiatives Support Corporation (" CIBC") for the administration of the State' s rental relief funds; and WHEREAS, a strong outreach and education campaign is needed to ensure that East Palo Alto's households that qualify can access federal rental relief funds through their landlords or directly apply to LISC when their landlords refuse to participate in the SB 91 rental assistance program.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO HEREBY:

1. Authorizes the City Manager to amend the April 1, 2020 contract, in a form approved by the City Attorney, with Nuestra Casa, Youth United for Community Action, and Community Legal Services in East Palo Alto to:
a. Add services related to landlord and tenant outreach and education regarding the rental relief fund program created by the State of California upon the adoption of Senate Bill No. 91 on January 29, 2021;
b. Increase the total amount of the Contract from $279,088 to $ 339,088; and c. Allow the parties to subcontract with other non- profit organizations to build up the necessary capacity to outreach and educate landlords and tenants and to assist them to submit their applications for SB91 rental relief funds.
1 of 2

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Attachment: RESOLUTION 34-2021 (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying Resolution)

2. Appropriates an additional amount of $ 60,000 from the General Fund revenues to cover any additional administrative costs incurred by Nuestra Casa, Youth United for Community Action, and Community Legal Services in East Palo Alto,
PASSED AND ADOPTED this 16t" day of March 2021, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

ATTEST:

Gauthier, Lopez, Wallace -Jones, and Romero
Abrica
APPROVED AS TO FORM:

Walfred 5olorzano, Q,fty Clerk Rafael E. clvarado Jr(, City Attorney

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Attachment: RESOLUTION 34-2021 (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying Resolution)

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Attachment: Measure O CONTRACT - Amendment No 1 (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying

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Attachment: Measure O CONTRACT - Amendment No 1 (2032 : Measure O Contract-Anti-Displacement Measure O Contract (Anti-Displacement Services Agreement) Clarifying Resolution Report
January 11, 2022
Attachment 6
The following chart shows some of the many Measure O Contract accomplishments and activities directed to the realization of the two main goals of the agreement: 1) provide legal services and 2) advance tenant advocacy and education to prevent displacement in the City.

Staffing YUCA and Nuestra Casa each hired staff members to educate East Palo Alto residents about housing issues and expand tenants’ capacity to engage in policy advocacy that impacts their housing stability. YUCA’s and Nuestra Casa’s Housing Coordinators work at 62.5% of a FTE. CLSEPA also partially funded new staff attorney positions.

Policy & Advocacy
Leadership
Immediately after the start of COVID19 shelter-in-place orders, CLSEPA emerged as a leader advocating for local policies to protect tenants from eviction during the pandemic.

Their expertise in the technical aspects of evictions and experience administering rental assistance funds allowed them to successfully advocate for COVID-19 eviction
moratoriums at the local and state levels. CLSEPA quickly turned out legal research memos about the legal authority to protect tenants from eviction during a public health crisis and drafted sample ordinance language. They also worked with the Legal Aid Society of San Mateo County to advocate for the court to stop most eviction activity for several months.

This work protected scores of families from eviction even before the Judicial Council ordered courts across California to stop processing eviction cases.

CLSEPA also brought the local perspective to advocacy
efforts at the state level to stop evictions. They worked with Western Center on Law & Poverty to help the Governor’s
office, and legislative staff better understand the technical aspects of eviction cases and rent debt. This work led to the passage of AB 3088, SB 91, and AB 832, new state laws that protect tenants from eviction who could not pay the rent due to impacts from COVID-19.

YUCA and Nuestra Casa staff members have been also
civically engaged on this issue. YUCA has attended four Rent Board meetings and presented once to the Rent Board on a separate occasion. YUCA staff has also attended 14 City Council meetings to monitor affordable housing policy

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Attachment: Accomplishments Through the Measure O Contract (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying discussions, monitor Woodland’s Euclid Improvement
Affordable Housing Strategy, advocate for tenant protections in light of COVID-19, support Valiant Courtyard Tenant
Association with habitability grievances, and to advocate for equitable implementation of SB91. Nuestra Casa staff has also provided public comment at 8 City Council meetings related to the Woodland redevelopment project and our antidisplacement project.

Legal
Workshops/Tenants’
Rights Trainings
CLSEPA has conducted seven legal workshops for over 220 residents and Nuestra Casa and YUCA staff members. The
workshops educated residents about state and local eviction moratoriums enacted during COVID-19, and also covered
topics related to redevelopment plans at Woodland Park.

CLSEPA has also provided six technical assistance trainings to community partners on accumulating COVID rent debt,
state and local eviction moratoriums, converting rent debt to regular civil debt, and land use policy. These training sessions have been critical for staff and Nuestra Casa’s Promotoras because they built their confidence to do
effective, high-touch community outreach. Also, CLSEPA
attorneys provided several consultations with City staff and policymakers about eviction moratoriums and rental
assistance during the pandemic.

Tenant Associations YUCA has helped strengthen the Valiant Courtyard Association at Bay Road, where there have been grievances about rent increases, health and safety issues. YUCA and Nuestra Casa have supported Palo Mobile Estates residents by conducting education and outreach efforts directly relevant to them. YUCA has also presented to Palo Mobile Estates residents twice on rent relief availability. Most recently, YUCA was consulted and extended support to Friends of Palo
Mobile Estates on how to conduct a successful in-person clinic for residents who needed live support on filling out documentation.

Tenant Advisory
Board
The Measure O organizations helped to create the Tenant Advisory Board (TAB), comprised of 9 community members.

A strength of the TAB is that it includes community members familiar with and new to housing advocacy. The Measure O organizations have held 15 training sessions to help
community members strengthen their advocacy, learn how to build their base of supportive renter leaders, and civic engagement skills. There were also an additional 7 meetings of subcommittees of the Tenant Advisory Body that were
more focused, in-depth strategy sessions for conducting outreach and training additional members of our base (“train

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Attachment: Accomplishments Through the Measure O Contract (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying the trainer”). Today, 7 of the 9 members remain highly
engaged and active in tenant organizing and outreach. TAB leaders wish to reorganize, bring on more tenants, and build a more solidified team for the efforts that are still to come around their housing needs.

Direct Community
Outreach
CLSEPA created know-your-rights materials and tenant
notice forms about local eviction moratoriums during COVID19, distributed through schools and food distribution sites in EPA. CLSEPA also created a bilingual website,
www.YouAreCommunity.org, to educate tenants about their rights and resources during the pandemic.

YUCA and Nuestra Casa staff members combined have
shared over 15,000 outreach materials to residents through Nuestra Casa’s Food Distribution program, Church of Christ, St Francis Church, EHP, and apartment complexes.

Information distributed at various events included: ADU ordinance flyers about the eviction moratorium, MidPen Palo Gardens Affordable Housing flyers and applications, eviction moratorium factsheets, template Declaration of Financial Hardship letters, and information on eligibility and how to apply for the California Rent Relief program. CLSEPA also distributed several thousand packets of bilingual information to EPA residents about the eviction moratorium and the
importance of submitting declarations to landlords if COVID19 has financially impacted tenants.

Nuestra Casa developed a list of tenants behind in rent and did direct canvassing for them. The Promotoras talked with more than 500+ people from this list to ensure they had the information they needed about the eviction moratorium to protect their housing. Nuestra Casa held 25+ outreach
activities and in East Palo Alto via our Food Distribution program and outreach in laundromats, clinics, and local supermarkets.

The Measure O organizations created videos explaining how to protect yourself from eviction during COVID-19. These videos explain the process to activate one’s tenant rights under the eviction moratorium. For example, Nuestra Casa posted its video to our social media accounts and boosted it as an ad. On Facebook, it reached 1,054 people by March 4, 2021 (organic: 295, paid: 788). It reached 115 accounts on Instagram and 81 impressions on Twitter. Nuestra Casa also posted the video to our YouTube channel and website.

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Attachment: Accomplishments Through the Measure O Contract (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying Hotline YUCA has maintained a bilingual tenant hotline during the organization's hours of operation. Tenants call with inquiries about rental assistance funds, pro-bono legal support,
eviction support, and more. Tenants also communicate via text message which we have found creates more
accessibility.

YUCA’s tenant registry list started with 180 renters in East Palo Alto. Today YUCA’s tenant registry has grown to 410.

Since starting this work with the Measure O team, YUCA’s registry has grown by 235 people. The vast majority of
renters (over 95%) are from East Palo Alto. These are all residents who YUCA continues to maintain communication
with and support with their housing rights.

Legal Assistance CLSEPA assisted 650 East Palo Alto residents with legal representation or advice, including 234 residents funded by the Measure O contract. CLSEPA also assisted over 530
East Palo Alto residents with emergency rental assistance since the beginning of the Measure O contract.

The Measure O contract helped fund CLSEPA's work to stop an unlawful $75 rent increase that would have been
assessed against about 115 families residing at Palo Mobile Estates, winning the case before East Palo Alto’s Rent
Stabilization Board. CLSEPA also represented Palo Mobile Estates residents in successful advocacy to ensure that immigrant families and low-income residents could benefit from continued low rents after the park was converted.

State’s Rental Relief
Program
Regarding East Palo
Alto’s Rental Relief
Fund applications, to
date, the State
reports:

Number of
applications: 821
Funds requested:
$11,533,561
Households already
served: 367
Average assistance:
$11,712
Funds paid:
$4,345,068
In coordination with the Measure O contract activities, the Rent Stabilization Program:

Emailed SB 91 related information to the Program’s
landlords.

Sent multiple Rental Relief Fund English-Spanish mailers to all the tenants subject to the Rent Stabilization Program.

Coordinated with the City Manager’s Office to provide SB91 Program Relief Fund information in the City’s Weekly
Updates.

Provided landlords and tenants with referrals for technical assistance.

Facilitated efforts for a coordinated response with Samaritan House and Project Sentinel which have also been assisting EPA residents.

Updated the Program’s COVID-19 webpage with information related to the State’s Rental Relief Program.

3.3.f
Packet Pg. 76
Attachment: Accomplishments Through the Measure O Contract (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying Also, in collaboration with Woodland Park Communities, City staff held an SB 91 informational session to landlords on April

8. CLSEPA:

Sent text messages to over 1,500 client families (700 in EPA) urging them to apply for SB 91 funds and reassuring that immigration status is irrelevant.

Created bilingual materials about State rent relief for our COVID tenants’ rights website,
www.YouAreCommunity.org/rental-assistance.

Represented 414 East Palo Alto residents facing eviction threats or lawsuits and helped keep 65% of East Palo Alto clients in their homes through legal advocacy, including work funded by the Measure O contract.

Expended $500,000 in rental assistance during the
pandemic, with majority of funds going to East Palo Alto families.

Connected with over 300 families to ensure they could pay the State’s required 25% of rent under the Rental Relief Program.

YUCA:
• Education & Outreach
o Education and training for our peer leaders was
addressed in the sections above
o Outreach was conducted via phone calls and text
messages to our growing tenant registry of 410
renters. Continued phone-banking efforts from our
team has ensured there is follow-up with tenants
and the rapport is maintained
o In-person, high-touch outreach was conducted to
3,000 households on the eastside and westside of
town.
o Educational, easy-to-understand content has also
been circulated on the organization’s Facebook
and Instagram platforms
• Direct, 1-1 support
o Provided 1-1 support to a total of 410 families
▪ Extended peer support to 231 local families
struggling with housing insecurity, looking
for pro-bono legal support, applying to
Samaritan House, needing connection to
food distribution centers, and navigating
other City issues with the building permit
department.

3.3.f
Packet Pg. 77
Attachment: Accomplishments Through the Measure O Contract (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying ▪ Supported 179 families with applications to
CA Emergency Rent Relief Program. Most
families return or call back 1-4 times for
ongoing support with their application.

Difficult cases require anywhere between 5-
10+ interactions of direct support and followup.

NUESTRA CASA:

April 2020- December 2021:

Outreach at various community sites throughout the City:
11,349 AB 3088, SB91, and AB 832 flyers; 1,300 rental
information resource sheet and postcards for tenants.

Door-to-door outreach: 9,550 AB 3088, SB91, AB 832 flyers; 500+ one-on-one tenant conversations.

Tenant Phone Calls: 942.

Collected ten ant phone numbers for one-on-one follow ups:
150.

Tenant SB91 Applications completed: 338 (305 families from East Palo Alto and 33 families from other parts of the County) Social media impressions: 7,502.

Nuestra Casa’s outreach numbers in this report represent work in the East Palo Alto community. However, Nuestra
Casa also distributed additional information and flyers in other parts of the County such as North Fair Oaks, Redwood City, Central San Mateo, and South San Francisco.

3.3.f
Packet Pg. 78
Attachment: Accomplishments Through the Measure O Contract (2032 : Measure O Contract-Anti-Displacement Services Agreement, Clarifying

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: Elena Lee, Planning Manager
Amy Chen, Community & Economic Development Director
SUBJECT: Amendments to contracts with Raimi + Associates related to the Ravenswood Business District Specific Plan and Project Management Services Recommendation
That the City Council:

2. Adopt a Resolution authorizing the City Manager to amend the Raimi + Associates contract
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Priority No. 2: Enhance Economic Vitality
Priority No. 3: Increase Organizational Effectiveness and Efficiency Priority No. 6: Create a Healthy and Safe Community
Background
On September 15, 2020, the City Council authorized the City to enter into a contract with Raimi + Associates (R+A), in an amount not to exceed $1,326,829 to provide the analysis, community engagement, and environmental review necessary for the City Council to consider an amendment to the Ravenswood Business District (RBD) Specific Plan and potentially

3.4 Packet Pg. 79
increase the amount of development approved in the EIR. The staff report linked online1 details the phases of the analysis and the scope of work.

Approved R+A Budget
Chart 1
Total Base Cost $990,129
10% Contingency $99,000
(Loop Road SEIR + Computer Infrastructure Models) Total Optional Cost
$237,700
Base + Contingency + Optional $1,326,829
On October 6, 20202, the City Council authorized the City to enter into Developer Reimbursement Agreements with certain developers within the RBD to fund a share of the associated costs for the environmental review portion of the R+A contract. Although certain developers are funding a portion of the R+A contract, the City Council maintains full land use authority regarding decisions about the RBD and entering into developer reimbursement agreements does not commit the City to amend the RBD or any project approvals.

As previously directed by the City Council, it is expected that developers who required an amendment to the RBD Specific Plan for their projects to advance will be obligated to fund a share of the associated costs for: 1) the environmental review portion of the R+A contract; and 2) reimbursement of the City’s initial investment in data refresh, engagement, and amendments to the Specific Plan.

With that direction from City Council, the following cost split was included as two parts of the original R+A consulting contract that was executed on January 11, 2021 in an amount not to exceed $ 1,326,829. The term of the agreement commenced on September 15, 2020 and the contract was approved for three years. The table below describes the two parts of the existing R+A contract:

Chart 2
Part Entity Activities Cost
Estimate
Mechanism
A City of
East Palo
Alto
Data refresh,
analysis, community
engagement
$490,164 Paid initially by City
General Fund, later
reimbursed through
approved projects
B Large RBD
Developers
Environmental
Review
$737,665
(with
optional
tasks)
Paid directly through preexisting Developer
Reimbursement Account
(DRA)
Contingency $99,000 May be applied to either
1 September 15, 2020 City Council meeting, agenda item 11.1:
http://eastpaloalto.iqm2.com/Citizens/Detail_LegiFile.aspx?Frame=&MeetingID=1283&MediaPosition=15 893.831&ID=1306&CssClass=
2 October 6, 2020 City Council meeting, agenda item 6.11:
http://eastpaloalto.iqm2.com/Citizens/Detail_LegiFile.aspx?Frame=&MeetingID=1284&MediaPosition=31

41.636&ID=1416&CssClass=

3.4 Packet Pg. 80
part of the contract
Total Approved $1,326,829
On November 18, 20213, the City Council hosted a Study Session on the Ravenswood Business District / 4 Corners Specific Plan Update Project. City Council provided direction on the growth scenarios to be studied under California Environmental Quality Act (CEQA) for the Specific Plan Update and the additional requirements needed to accompany any increase in development capacity for the RBD/4 Corners area. Council determined it was best to study the following scenarios:
• Scenario 1: 2.82 million s.f. of office and R&D use.
• Scenario 2 analyzed 3.35 million s.f. of office and R&D uses.

Additionally, Council also accepted staff’s recommendations:
• Recommendation 2: Continue Community Engagement on the Scenarios • Recommendation 3: Select a Housing Scenario and Study Mechanisms to Link Job Production with Housing Production
• Recommendation 4: Explore Additional Plan Concepts and Strategies The analysis of two EIR scenarios instead of a single scenario, increasing the amount housing to be studied in the EIR adding community engagement activities and exploring additional plan concepts and strategies are not included in the approved scope and budget for the consultant.

Thus, the purpose of this staff report is to request more funds to be added to the agreements that support the RBD Specific Plan update effort.

Analysis
Status Update of Current Consultant Contracts
Since the execution of the agreement between R + A and EPA, the consultants have accomplished the following:
• Development and analysis of multiple growth scenarios and technical analysis (fiscal, infrastructure, traffic, community benefits, etc.). • Four Council Study Sessions on the following topics: initial data refresh; transportation, benefits and impacts; overview ofthe analysis on urban design, transportation, infrastructure, jobs, indirect displacement/housing affordability, fiscal impact, and direct community benefits from various levels of growth; and final section of the growth scenarios to be studied in the EIR. • Three public workshops which included a Spanish interpreter; prior to the meetings a city-wide postcard was mailed to all residents and owners, an announcement billboard was installed at the corner of University and Bay Road, and the team maintains a comprehensive website4 updates and sends out periodic list-serve 3 November 18, 2021 City Council Study Session:
http://eastpaloalto.iqm2.com/Citizens/Detail_Meeting.aspx?ID=1432 4 RBD Webpage: https://www.ci.east-palo-alto.ca.us/planning/page/ravenswood-business-district-4- corners-specific-plan-update

3.4 Packet Pg. 81
notices.
• Peer review of the traffic analysis by another transportation firm. • Managing all the sub-consultants that have developed that analysis mentioned above.
• Team check-ins with city staff and Good City Company from every two weeks to weekly
• Monthly coordination calls with the RBD developers
A majority of the contingency was used to support an additional public engagement, Spanish interpretation, send out the city-wide postcards, install the announcement billboard, attend additional Council meetings, write Council staff reports, and conduct the peer review of the traffic model (as requested by Council in September 2021).

Staff facilitates the work of consultants to ensure that the resultant product meets the City’s needs, the costs associated with these consultant contracts are wholly funded by the developer. For this reason, the General Fund is not impacted by the implementation of this contract.

Proposed Amendments to Contract
With the accepted recommendations from the November 18, 2021 City Council meeting, staff and the consultants have revised the R + A scope of work and budget. The following tasks are included in the proposed budget amendment:
• Quantitative analysis to support two EIR growth scenarios. • Revising the traffic analysis as requested by the City Council. This will include an analysis of two scenarios with increased housing and each with and without the loop road. This represents a significant amount of work since Hexagon (the traffic consultant) will need to revise all the model runs. At this time, the project team is recommending this approach/estimate, based on direction from Council and Public Works to study all aspects of both scenarios as well as continued interest in the impacts/feasibility of the Loop Road improvement.
• Adding an additional public workshop, another round of pop-up workshops, and informal meetings with community leaders.
• Additional City Council and/or Planning Commission meetings over and above the current scope of work.
• Additional research and policy development for the topics requested by the Council in Recommendation 4 from the November 18 Study Session. This analysis was not included in the original scope and budget.
• Additional project management and meeting with City staff and the potential developers in the RBD.
• Funds for the City Attorney’s office to engage with outside Counsel.

The following is a detailed table summarizing the costs for each item for the contract amendment:

Chart 3
City Contract - Amendment Budget Estimate Total

ADDITIONAL ENGAGEMENT REQUESTED BY COUNCIL

3.4 Packet Pg. 82
Workshop Expenses (Team) $10,000
Workshop Labor (R+A) $40,000
Subtotal $50,000

ADDITIONAL WORK TO DEVELOP MECHANISMS REQUESTED BY

COUNCIL
Added CC/PC Meetings or Adoption Hearings (R+A) $15,000 Additional Project Coordination & Meetings (R+A) $15,000 Additional Effort to Prepare Plan Mechanisms/Strategies (R+A) $45,000 Additional Meetings and Revised Fiscal Impact Analysis
(Strategic)
$40,780
Additional Meetings/Workshops (Hexagon) $38,200
Subtotal $153,980

ADDITIONAL TRAFFIC MODELING
Additional Modeling to Analyze Two Scenarios Plus Loop Road (Hexagon)
$108,600
Subtotal $108,600

ADDITIONAL CEQA ANALYSIS
Extra Quantitative EIR Analysis and Report Writing (David J Powers)
$52,700
Biological and Archeological/Cultural Studies (David J Powers) $40,000 City Attorney's Office (Goldfarb) $25,000
Subtotal $117,700
MISC.

On-Call / Flexible Task Budget (Team) $50,000
Sub management (7%) and office/accounting (3%) $28,028
Subtotal $78,028
Subtotal $480,280
PROPOSED TOTAL BUDGET AMENDMENT $508,308
Justification of R+A
City staff and R+A consultants discussed this cost proposal and determined that these estimates are in line with other jurisdiction’s planning and specific plan update processes.

Please see the below chart below comparing other plans that are similar scale (up to 4 million square feet and a combination of housing, office, etc.).

3.4 Packet Pg. 83
Chart 4
Jurisdiction Planning
Process and
Timing
Square
Footage and
Type
Consultant(s) Cost
Mountain
View
North
Bayshore
Precise Plan

2.0 (2016-18)
3,400,000 s.f.
office/R&D
9,800 units
R+A (SE,
Seifel, F+P)
$1,465,000
(original contract
was $700,000)
Mountain
View
East Whisman
Precise Plan
(2017 - 2019)
2,200,000 s.f.
office/R&D
5,000 units
R+A (F+P,
SE, S+W)
$1,030,000 (very
limited outreach)
Cupertino Vallco Town
Center Area
Specific Plan
(2017-2018)
2,000,000 s.f.
2,900 units
Opticos $1,000,000 initial
budget (final
unknown), rejected
by referendum.

South San
Francisco
Genentech
Campus
Master Plan
(2018-20)
4,500,000 s.f. Genentech
(Lamphier,
F+P, NN,

JRDV, W-H)
Exact cost not
made public; multimillion-dollar inhouse effort
Santa Clara El Camino
Real Corridor
Plan (2018-21)
6,200 units R+A (SE,

STP, BKF)
$1,190,000 Not
adopted. (original
contract was
$910K)
Sunnyvale Amended
Moffett Park
Specific Plan
(2019-)
8,000,000 s.f.
7,500 units
R+A (NN, SE,
BKF,
Hexagon,
SFEI)
$3,380,000
(original contract
was $2.7M)
San Carlos Eastside
Innovation
District Vision
Plan (2020-21)
2,500,000 s.f.
office/industrial
0 units
P+W (EPS,
HR&A)
$800,000 plus
local match. Basic
plan with only $50k
for EIR.

Milpitas Main Street /
Gateway
Specific Plan
Update (2021-)
1,600,000 s.f.
1,100 units
D+B $975,000 plus
local match (initial
budget)
San Jose Amended
Diridon Station
Area Plan
(2018 to 2021)
7,300,000 s.f.
office/R&D
5,900 units

SOM (SWA,
HR&A, R+A,
P2P)
Estimated $3-4M
for full plan/EIR
($475,000 for
engagement only)
San Bruno Bayhill Specific
Plan (2017-
2021)
2,300,000 s.f.
575 units
D+B (F+P,

ICF, EPS,

KHA, VWMP)
$3M+ final budget
(initially $785,000)
Redwood City Transit District
Plan (2022)
1,630,000 s.f.
office 1,100
units
AECOM $5M, including
multi-million Grade
Separation Study
South San
Francisco
Lindenville
Specific Plan
1,500,000 s.f.
>1,000 units
TBD $800,000 - tiers off
traffic work already

3.4 Packet Pg. 84
(2022) completed for GPU
Potential Alternatives
There are two options that could reduce cost:

1. Reduced Evaluation of Scenario 1. Council could elect to have a full CEQA analysis of Scenario 2 throughout the document but only a more cursory analysis of Scenario 1 (in the Alternatives Section only, and not in other technical sections). This would reduce costs by $52,700. We do not recommend this option.

2. Reduced Model Runs. Council could elect to not prepare a full traffic analysis for both growth scenarios and instead only prepare it for Scenario 2 (the larger amount of potential new development). Reducing the number of model runs related to the loop road and/or the second scenario analysis could lower costs by up to $108,000. We are prepared to conduct as many model runs as needed; however we will continue to seek avenues to reduce unneeded modeling.

Staff recommends that the City Council authorize the City Manager to amend the R+A agreement and increase the contract by $508,308, as noted above. Staff further recommends that the City be responsible for the contract increase (as opposed to the Developers) but that future developers, if projects are approved, be required to repay the City for the costs incurred due to the RBD update. Thus this proposed contract amendment would change Part A of the R+A agreement, but overall would follow the same provisions and formula for reimbursement by all the developers who benefit from this process. This would include current and future developers and they each would pay the City back, as part of a condition of their project approval. This is a proportional percentage of the City portion based on how much square footage their project is approved for relative to the overall costs the City paid up front. Some developers are already paying into a portion of the R + A contract (Part B that covers environmental analysis) through separately established developer reimbursement agreements.

Upon completion of the Specific Plan process and if specific project entitlements are approved, those developers that already paid reimbursement installments will be reconciled with this formula to recover Part A of the R+A contract.

Fiscal Impact
At this time staff would be asking for this amendment to be paid initially by City General Fund, later reimbursed through approved projects. Based on the original contract, the City Council appropriated funding to cover the City’s portion of the contract with R+A as part of the FY 2020-2021 Budget. Any project that benefits from a future update to the RBD Specific Plan will be required to reimburse the City on a proportional basis. The follow table summarizes the contract amendment amount:

Chart 5
Contracts Activities Cost Estimate Mechanism
Existing Data refresh,
analysis,
community
engagement
Environmental
Review
$1,326,829 Paid initially by City
General Fund, later
reimbursed through
approved projects
Paid directly through
pre-existing Developer

3.4 Packet Pg. 85
Contingency Reimbursement
Account (DRA)
Amendment Analysis of two
scenarios and more
public engagement
$508,308 Paid initially by City
General Fund, later
reimbursed through
approved projects
Amended Total $1,835,137
Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website and at the San Mateo County Library located at 2415 University Avenue, East Palo Alto.

Attachments

1. Draft Resolution

3.4 Packet Pg. 86
RESOLUTION NO. ___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO

AUTHORIZING THE CITY MANAGER TO EXECUTE AMENDMENTS TO
CONTRACTS WITH RAIMI + ASSOCIATES TO PROVIDE CONSULTANT SERVICES

ASSOCIATED WITH THE RAVENSWOOD BUSINESS DISTRICT/FOUR CORNERS

TRANSIT ORIENTED DEVELOPMENT SPECIFIC PLAN AREA
WHEREAS, the City of East Palo Alto ("City") is experiencing a significant increase in development activity and City staff sought additional capacity to help analyze the current development activity of the Ravenswood Business District/Four Corners Transit Oriented Development Specific Plan Area (RBD); and WHEREAS, Raimi + Associates has extensive experience working in and with the community of East Palo Alto and was a key member of the team that helped produce the City' s General Plan, and due to Raimi + Associates' detailed knowledge and experience with the City, the City Manager recommended that the City Council waive the formal bidding procedures so that the City may enter into contract with Raimi + Associates; and
WHEREAS, on September 15, 2020, the City Council of the City of East Palo Alto ("City Council") authorized the City Manager to enter into a contract with Raimi + Associates, in an amount not to exceed $ 1,326,829, to provide the analysis, community engagement, and environmental review necessary for the City Council to consider an amendment to the Ravenswood Business District ("RBD") Specific Plan; and
WHEREAS, on October 6, 2020, the City Council authorized Developer Reimbursement Agreements with certain developers within the RBD to fund a share of the associated costs for the environmental review portion of the Raimi + Associates contract; and
WHEREAS, on January 11, 2021, a contract was executed between the City and Raimi + Associates, in an amount not to exceed $1,326,829. The term of the agreement commenced on September 15, 2020 and was approved for three years; and WHEREAS, on November 18, 2021, the City Council hosted a study session on Actions Related to the Ravenswood Business District Specific Plan Update and directed City staff and the consultants to study two scenarios in the Environmental Impact Report and add additional engagement, and thus these tasks will necessitate additional budget to be added to the Raimi + Associates contract.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO HEREBY authorizes the City Manager to execute an amendment to the Raimi + Associates contract, with an original not-to-exceed contract

3.4.a
Packet Pg. 87
Attachment: Draft Resolution (2074 : Raimi RBD Contract Amendment) amount of $1,326,829 and increase it by $508,308, to a new not-to-exceed total of $1,835,137 for professional services.

PASSED AND ADOPTED this 18th day of January 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Ruben Abrica, Mayor
ATTEST: APPROVED AS TO FORM:

James Colin, Acting City Clerk Rafael E. Alvarado, Jr. City Attorney

3.4.a
Packet Pg. 88
Attachment: Draft Resolution (2074 : Raimi RBD Contract Amendment)

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Rafael E. Alvarado Jr, City Attorney
BY: Rafael E. Alvarado Jr., City Attorney
SUBJECT: AB 361 Findings to Continue Virtual Public Meetings for the City Council and City Advisory Bodies
Recommendation
Adopt a resolution making the AB 361 findings necessary to continue virtual public meetings for the City Council and City Advisory Bodies for the month of February 2022.

Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Priority No. 3: Increase Organizational Effectiveness and Efficiency Priority No. 6: Create a Healthy and Safe Community
Background
The California Brown Act has long-established requirements for local agencies to use teleconferencing to conduct meetings. It provides that if the local agency elects to use teleconferencing to conduct a public meeting, then it must identify each teleconference location in the public notice and agenda, and post agendas at all teleconference locations. All teleconference locations must be publicly accessible and there must be an opportunity for public comment at each teleconference location. Additionally, a quorum of the members of the legislative body must participate from locations physically within the jurisdictional boundaries of the agency.

In March 2020, Governor Newsom issued Executive Order N-29-20 authorizing exemptions to these Brown Act teleconferencing requirements. These requirements were suspended during the COVID-19 pandemic to promote social distancing and to facilitate remote work and meetings. Executive Order N-08-21 extended the previous order until September 30, 2021.

On September 16, 2021, the Governor signed AB 361 into law to allow the continued use of virtual public meetings during a declared state of emergency when certain conditions are met.

AB 361 took effect immediately as an urgency statute.

3.5 Packet Pg. 89
Analysis
AB 361 exempts local agencies from complying with the following teleconferencing requirements of the Brown Act:
· Ensuring that each teleconference location is physically accessible to the public; · Maintaining quorum with members physically within the jurisdiction; and · Providing an opportunity for public comment at each teleconference location.

The AB 361 exemptions only apply during a declared state of emergency - as defined under the California Emergency Services Act - and one of the following circumstances must apply:

1. State or local officials have imposed or recommended measures to promote social distancing.

2. The legislative body is meeting to determine whether, as a result of the emergency, meeting in person would present imminent risks to the health or safety of attendees.

3. The legislative body has determined that, as a result of the emergency, meeting in person presents imminent risks to the health or safety of attendees.

Under AB 361, when a local agency elects to hold a virtual meeting because the applicable criteria are met, an alternate set of requirements apply:
· No Action During Disruptions - Where there is a disruption in the public broadcast of the call-in or internet-based meeting service, the local agency must cease and take no further action on agenda items until public access is restored. · Public Comment Rights - A local agency is prohibited from requiring public comments to be submitted in advance of the meeting and cannot close the comment period or opportunity to register online until the timed public comment period has elapsed.

Lastly, every 30 days during the proclaimed state of emergency, the local agency acting under the teleconference exemptions must make findings about whether the circumstances explained above still apply. Therefore, to continue holding virtual meetings, the City Council must find that it reconsidered the circumstances of the state of emergency and that one of the following circumstances exist: “(i) the emergency continues to directly impact the ability of members to safely meet in person,” or “(ii) state or local officials continue to impose or recommend measures to propose social distancing.” Today’s action would allow the City Council and City advisory bodies to continue meeting virtually during the month of February 2022. The teleconferencing exemptions authorized by AB 361 will sunset on January 1, 2024.

Fiscal Impact
None
Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website and at the San Mateo County Library located at 2415 University Avenue, East Palo Alto.

3.5 Packet Pg. 90
Attachments

1. Resolution

3.5 Packet Pg. 91
Resolution No. XX-2022 1 of 3
RESOLUTION NO. XX-2022

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF EAST PALO ALTO
ADOPTING THE AB 361 FINDINGS NECESSARY TO CONTINUE VIRTUAL

PUBLIC MEETINGS FOR THE CITY COUNCIL AND CITY ADVISORY BODIES DURING THE COVID-19 STATE OF EMERGENCY
WHEREAS, on January 31, 2020, the United States Department of Public Health and Human Services Secretary declared a public health emergency for the novel disease named “coronavirus disease 2019” or “COVID-19" by the World Health Organization; and WHEREAS, the Centers for Disease Control and Prevention ("CDC”) has stated that COVID-19 is a serious public health threat based on current information; and WHEREAS, on March 3, 2020, the San Mateo County Health Officer declared a local health emergency throughout San Mateo County and the County Manager, serving as the County Director of Emergency Services, proclaimed a local emergency throughout San Mateo County related to the novel coronavirus and on March 10, 2020, the San Mateo County Board of Supervisors ratified and extended the declaration and proclamation and this state of emergency remains in effect; and WHEREAS, on March 4, 2020, the Governor of California declared a State of Emergency due to the outbreak and spread of COVID-19, and the State of Emergency is still in effect; and WHEREAS, on March 17, 2020, the East Palo Alto City Council (“City Council”) proclaimed a local emergency due to COVID-19 and the local emergency is still in effect; and WHEREAS, in March 2020, the Governor’s Executive Order N-29-20 suspended Brown Act requirements related to teleconferencing during the COVID-19 pandemic provided that notice, accessibility, and other requirements were met, and the public was allowed to observe and address the legislative body at the meeting, and subsequently adopted Executive Order N-08-21 extending the previous order until September 30, 2021; and
WHEREAS, since March 2020, the City Council and the City’s boards, commissions, and committees (“City Advisory Bodies”) have conducted their meetings virtually, as authorized by the Executive Order; and
WHEREAS, on September 16, 2021, the Governor signed into law AB 361 to allow the continued use of virtual public meetings during a declared state of emergency without conforming to the Brown Act teleconferencing rules during a declared state of emergency if: (i) State or local officials have imposed or recommended measures to promote social distancing; (ii) the legislative body is meeting to determine whether, as a result of the emergency, meeting in person presents imminent risks to the health or safety of attendees; or (iii) the legislative body has determined that meeting in person would present imminent risks to the health or safety of attendees; and WHEREAS, since October 2021, the City Council has adopted resolutions, on a monthly basis, making the required AB 361 findings to continue virtual public meetings for the City Council and City Advisory Bodies; and

3.5.a
Packet Pg. 92
Attachment: Resolution (2072 : AB 361 Authority for Virtual Public Meetings) Resolution No. XX-2022 2 of 3
WHEREAS, in the last few months, the Delta variant has surged in the United States and become the predominant COVID-19 variant, accounting for higher hospitalization rates; and WHEREAS, the CDC reports that the Delta variant is highly contagious, more than twice as contagious as previous variants, spreads faster than previous forms, and might cause more severe illness than previous variants in unvaccinated people; and WHEREAS, on November 24, 2021, South Africa reported the identification of a new SARSCoV-2 variant, B.1.1.529 to the World Health Organization (“WHO”); and WHEREAS, on November 26, 2021, the Technical Advisory Group on SARS-CoV-2 Virus Evolution (“TAG-VE”) convened to assess B.1.1.529, and TAG-VE advised WHO that this variant should be designated as a Variant of Concern (“VOC”), and WHO designated B.1.1.529 as a VOC named “Omicron”; and
WHEREAS, on December 1, 2021, the first case attributed to the Omicron variant was reported in the United States and additional cases have been detected; and WHEREAS, the CDC reports that the Omicron variant is likely to have increased transmission compared to the original SARS-CoV-2 virus; and
WHEREAS, due to uncertainty and concerns about the Delta and Omicron variants and current conditions, many workplaces, including the City of East Palo Alto, have pushed back the return to regular in-person operations; and
WHEREAS, given the heightened risks of these variants of COVID-19 in the community, holding indoor meetings with all members of the City Council, staff, and the public in attendance would pose an unnecessary and immediate health and safety risk to the attendees.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO HEREBY:

1. Adopts the recitals set forth herein as findings of fact;

2. Incorporates by this reference prior City Council resolutions making the AB 361 findings necessary to continue virtual public meetings for the City Council and City Advisory Bodies during the COVID-19 State of Emergency;

3. Determines that, after having reconsidered the circumstances of the state of emergency, finds that the emergency continues to directly impact the ability of members to safely meet in person; and

4. Suspends the Brown Act teleconferencing rules in accordance with AB 361, and based on the findings and determinations herein, thereby authorizing the use of virtual meetings of the City Council and City Advisory Bodies, during the month of February 2022.

3.5.a
Packet Pg. 93
Attachment: Resolution (2072 : AB 361 Authority for Virtual Public Meetings) Resolution No. XX-2022 3 of 3
PASSED AND ADOPTED this 18th day of January 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Ruben Abrica, Mayor
ATTEST: APPROVED AS TO FORM:

City Clerk Rafael E. Alvarado Jr., City Attorney

3.5.a
Packet Pg. 94
Attachment: Resolution (2072 : AB 361 Authority for Virtual Public Meetings)

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: Patrick Heisinger, Assistant City Manager
SUBJECT: City Council Consideration of an Agreement with Greg Larson to Provide Management-Related Services
Recommendation
Adopt a Resolution (Attachment 1):

2. Waiving the bid procedures pursuant to East Palo Alto Municipal Code section

2.84.070(D).

Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Priority No. 3: Increase Organizational Effectiveness and Efficiency Background
On December 15, 2020, the City Council adopted a resolution authorizing the City Manager to enter into an agreement with Management Partners in the amount of $50,000 for the purposes of providing facilitation for City Council engagement processes and other management-related services.

Since the agreement with Management Partners was executed, Greg Larson has been assigned to supporting the City of East Palo Alto and has undertaken several tasks for the City, including the 2021 City Council retreat process and performance evaluations for both the City Manager and City Attorney.

Mr. Larson recently retired from Management Partners. As such, per state legislation and

3.6 Packet Pg. 95
related case law, Mr. Larson is unable to conduct work for the City of East Palo Alto under the current agreement with Management Partners. Despite this technicality, Mr. Larson possesses detailed knowledge of, and is actively engaged in, essential City processes.

The purpose of this staff report is to seek City Council approval to enter into an agreement directly with Mr. Larson, thus ensuring that City business continues uninterrupted.

Analysis
Mr. Larson is currently engaged in the following assignments for the City, all of which were initiated under the most recent contract and are anticipated for completion prior to June 30, 2022:
1) City Manager performance evaluation
2) City Attorney performance evaluation
3) 2022 City Council Priority Setting Process
Mr. Larson estimates that all assignments will be finalized to the City’s satisfaction for a timeand-materials cost of approximately $20,000.

Staff seeks additional funding to facilitate Mr. Larson’s assistance in planning the 2023 City Council priority-setting process that will likely commence in late 2022. This proactive approach to account for anticipated costs will ultimately allow for a more efficient process as we move forward.

Proposed Contract Terms
Amount: $25,000
Term: 2-years, with one 6-month extension at the discretion of the City Manager Request to Waive Formal Bidding Procedures and Insurance Requirements Mr. Larson has facilitated the priority-setting engagement sessions for the City Council in 2019, 2020, and 2021. Due to his unique knowledge of and experience with the City’s process, staff requests that the City Council waive formal bidding procedures that would essentially delay the effectuation of a new contract with Mr. Larson.

Mr. Larson will provide services virtually and therefore the City Manager will authorize a waiver of the City’s automobile insurance requirement.

Fiscal Impact
The City’s General Fund Reserve has adequate balances to cover the proposed agreement with Mr. Larson.

Public Notice
The public was provided notice by making the agenda and report available on the City’s website and at the San Mateo Co. Library located at 2415 University Avenue, East Palo Alto.

3.6 Packet Pg. 96
Environmental
The action being considered does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.

Attachments

1. Resolution

3.6 Packet Pg. 97
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF EAST PALO ALTO

AUTHORIZING THE CITY MANAGER TO ENTER INTO A TWO-YEAR AGREEMENT WITH GREG LARSON IN AN AMOUNT NOT TO EXCEED $25,000 FOR THE PURPOSE OF PROVIDING

CITY COUNCIL FACILITATION AND OTHER MANAGEMENT RELATED SERVICES WHEREAS, each year, the City Council embarks on a priority setting process to identify their key goals and objectives for the upcoming fiscal year(s); and WHEREAS, for the past three years, Greg Larson has provided meeting facilitation and follow up services to support the City Council and City staff throughout the priority setting process; and WHEREAS, the City Manager recommends that the City Council waive the City’s bid procedures based on the special circumstance that Greg Larson is uniquely qualified to provide facilitation and other management related services as he has provided similar services to the City in the past and can provide timely services on a forward going basis.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO HEREBY authorizes the City Manager to:

1. Enter into an agreement with Greg Larson, in a form approved by the City Attorney, for the purposes of providing City Council facilitation and other management related services consistent with the following terms:
a. Term: A two year term, with one six-month extension at the discretion of the City Manager,
b. Contract amount: A not-to-exceed amount of $25,000; and

2. Waive the bid procedures pursuant to East Palo Alto Municipal Code section 2.84.070(D).

PASSED AND ADOPTED this 18
th day of January 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Ruben Abrica, Mayor
ATTEST: APPROVED AS TO FORM:

James Colin, Acting City Clerk Rafael E. Alvarado Jr., City Attorney

3.6.a
Packet Pg. 98
Attachment: Resolution (2061 : City Council Consideration of an Agreement with Greg Larson to Provide Management-Related Services)

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: James Colin, Executive Assistant
SUBJECT: Proclamation Against Human Trafficking in The Bay Area Recommendation
Accept the proclamation.

Attachments

1. HT Awareness Proclamation

3.7 Packet Pg. 99
Ruben Abrica

3.7.a
Packet Pg. 100 Attachment: HT Awareness Proclamation (2066 : Proclamation Against Human Trafficking in The Bay

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: Tomohito Oku, Finance Director
Greg Henry, Senior Management Analyst
SUBJECT: Quarterly COVID-19 Emergency Reporting
Recommendation
Adopt a resolution:

1. Accepting the Quarterly Emergency Report For December 31, 2021, and

2. Ratifying the City Manager’s Authorization Of the COVID Community Testing And Vaccination Outreach And Site Support Cost Reimbursement Agreement With San Mateo County, and

3. Ratifying Emergency Response Expenditures
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Priority No. 1: Enhance Public Safety and Emergency Preparedness Priority No. 5: Improve Communication and Enhance Community Engagement Priority No. 6: Create a Healthy and Safe Community
Background
The widespread, deleterious impacts of the outbreak of novel coronavirus (named “COVID-19” by the World Health Organization) continues to strain communities throughout the Bay Area and the world.

On March 17, 2020, the Council proclaimed a local emergency for COVID-19 and further authorized the City Manager to make repairs, alterations, or improvements to the City’s public facilities, take any directly related and immediate actions required by said emergency, and procure the equipment, services, and supplies for those purposes.

To date, the City has committed significant direct resources to respond to COVID-19. The City

3.8 Packet Pg. 101
also incurred significant indirect staff time and diversion because of the organizational effect of long-term remote work protocol, as well as, responding to COVID quarantine protocols, acquiring additional unplanned responsibilities, and backfilling the responsibilities of the staff directly responding to COVID-19 testing and vaccination activities, as well as supportive activities such as food bank traffic support. As a result, this report does not capture the total direct and indirect costs to the City. Thus, this reporting is not intended to capture the true cost impacts of the pandemic.

COVID-19 Response Activities
For the quarter ended December 31, 2021, the City incurred approximately $200,000 in identified COVID-19 spending. This consisted primarily of community testing and vaccine support as well as payments to Project WeHope management of the additional daytime use for the RV Safe Parking Program.

Emergency Reporting Requirement
Under City Municipal Code Section 3.20.030, the Finance Director - as Budget Officer - reports to Council regarding the status of emergency expenditures within fifteen days of each quarter end. This report provides an update to the previous report provided to Council October 5, 2021.

Analysis
COVID-19 Financial Reporting Information
Presented below in Table 1 is the City’s COVID-19 Authorization. As of April 2, 2021, the City Council provided the City Manager $975,000 in Emergency Authorization. In addition, the City Council approved $815,147 in additional COVID related contracts and activity supported by outside funding (CARES, Bureau of Justice Grants and San Mateo County). As part of this report, staff are asking that the Council approve $96,958 in additional San Mateo County Funding for Vaccination and Testing support. Including this agreement, the Council will have approved $1.89M in COVID response activity.

3.8 Packet Pg. 102
Table 1
Date Authorization Amount
03/27/20 Emergency Appropriation $ 300,000
03/27/20 Rapid Rehousing Funds 100,000
05/19/20 Community Outreach 26,000
06/16/20 Community Distance Learning 60,000
07/07/20 Emergency Appropriation 75,000
07/07/20 Bureau of Justice Grant 18,000
10/20/20 Emergency Appropriation 200,000
10/20/20 CARES Funding 380,218
01/19/21 Emergency Appropriation 100,000
03/02/21 Emergency Appropriation 300,000
04/20/21 RV Safe Parking Mitigation 96,731
09/20/21 San Mateo County Funding (Curative I) 17,754
09/20/21 San Mateo County Funding (Curative II) 29,151
09/20/21 San Mateo County Funding (Vaccination) 47,293
12/21/21 Vaccination Incentive 40,000
Pending San Mateo County Funding (Vacc & Testing) 96,958 Total $ 1,887,105
Table 2 below shows the source of funding for all current expenditures (not including funds committed to contracts, but unspent). Amounts charges to federal and San Mateo County funding sources reflect only those costs that are directly supported by verifiable or required time keeping and expenditure data submitted by Departments, and such amounts are subject to change upon Finance review and final approval of expenditures submitted for reimbursement by Departments.

As the Federal Emergency Management Agency (FEMA) has released additional guidance, including feedback on FEMA’s acceptance and rejection of other municipal project application activity; staff are working closely with a liaison at the California Office of Emergency Services to determine whether certain response activity will be reimbursed by FEMA. As a result, there is significant revision to the expected FEMA recovery amount. Of note were about $9,000 in additional funds rejected following additional review. However, FEMA has updated its requirements and the City no longer has a 25% match, increasing this source of funding.

Table 2
Date Source of Fund for Expenditures Amount
CARES Funding $ (380,218)
Bureau of Justice (BOJ) Funding (20,362)
San Mateo County Funding (Curative I) (17,754)
San Mateo County Funding (Curative II) (29,151)
San Mateo County Funding (Vaccination) (47,293)
San Mateo County Funding (Vacc & Testing) (78,083)
FEMA (85,836)
City Emergency Funds (866,631)
Total (1,525,328)
12/31/21

3.8 Packet Pg. 103
It is important to note that all outside funding has strict regulatory eligibility and reporting requirements. Staff is making best efforts to maximize the City’s overall funding reimbursements; however, we recognize certain funding requests may not result in approved reimbursements. In such a case, those costs will need General Fund resources.

Finance is also applying discretion over certain charges whereby the estimated cost of administrative cost of tracking, supporting, and applying for federal reimbursement is greater than the actual cost receipt.

Below is a detailed analysis of the City’s COVID-19 response activity. Costs shown in Table 3 do not reflect the significant additional workload and all the diversion in the Police Department, City Manager’s Office, City Attorney’s Office, City Clerk, Finance and Human Resources.

Table 3
Description Spent
Committed
to Contract Total
City Council
Direct
Authority
City Manager
Emergency
Authority
Vaccine Incentive Cards 11,200 28,800 40,000 40,000 -
COVID-Testing, Vaccine 518,400 - 518,400 202,118 316,282 Traffic Support 186,353 - 186,353 4,467 181,886
Police Response Mitigation 241,188 - 241,188 241,188 -
Remote Dance Classes 12,500 - 12,500 - 12,500
Distance Learning 19,905 40,095 60,000 60,000 -
Tenant Rental Assistance 100,000 - 100,000 100,000 -
Small Business Assistance 27,000 - 27,000 - 27,000
Safety Measures 121,585 - 121,585 46,117 75,468
Homeless "At Risk" Mitigation 78,884 38,647 117,531 96,731 20,800 Employee Remote Work 67,470 - 67,470 20,520 46,950
Employee Leave 74,070 - 74,070 56,090 17,980
COVID Staffing Support 12,900 12,100 25,000 - 25,000
Outreach and Communication 53,873 3,000 56,873 26,000 30,873 1,525,328 122,642 1,647,970 893,231 754,739
Table 3 reflects tracked costs by category; however, not all tracked costs are “external”. In other words, a significant portion of tracked emergency expenditures reflect costs for staff diverted to emergency response or on COVID-related paid sick and other leave and, therefore, are not “additional” costs paid to outside entities.

Fiscal Impact
Of the total City and outside source funding authorized of $1.89M, approximately $1.65M is spent and committed. All other response costs will be within $0.24M remaining. Most, $0.22M, of which is City Manager emergency authority which should be sufficient for the ensuing quarter. Therefore, staff are not seeking additional emergency funding authority through March 30, 2022. The net remaining $0.02M is what remains for January on the County’s Vaccinee and Testing support contract.

3.8 Packet Pg. 104
Public Notice
N/A
Environmental
The action being considered does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.

Attachments

1. Reso December 2021 Quarterly Emergency Report

3.8 Packet Pg. 105
Resolution No. XX-2022 1 of 2
RESOLUTION NO.________

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF EAST PALO ALTO
ACCEPTING THE QUARTERLY EMERGENCY REPORT FOR DECEMBER 31, 2021, AND RATIFYING THE CITY MANAGER’S AUTHORIZATION OF COVID COMMUNITY TESTING AND

VACCINATION OUTREACH AND SITE SUPPORT COST REIMBURSEMENT AGREEMENT WITH

SAN MATEO COUNTY, AND RATIFYING EMERGENCY RESPONSE EXPENDITURES WHEREAS, on January 31, 2020, the United States Department of Public Health and Human Services Secretary declared a public health emergency for the novel disease named “coronavirus disease 2019” or “COVID-19" by the World Health Organization; and WHEREAS, the Centers for Disease Control and Prevention ("CDC”) has stated that COVID-19 is a serious public health threat based on current information; and WHEREAS, on March 3, 2020, the San Mateo County Health Officer declared a local health emergency throughout San Mateo County and the County Manager, serving as the County Director of Emergency Services, proclaimed a local emergency throughout San Mateo County related to the novel coronavirus (“COVID-19”) and on March 10, 2020, the San Mateo County Board of Supervisors (“County Board”) ratified and extended the declaration and proclamation and this state of emergency remains in effect; and
WHEREAS, on March 4, 2020, the Governor of California declared a State of Emergency due to the outbreak and spread of COVID-19; and
WHEREAS, on March 17, 2020, the City Council proclaimed a local emergency due to COVID19 and further authorized the City Manager to make repairs, alterations, or improvements to the City’s public facilities pursuant to Section 22050 of the California Public Contract Code, take any directly related and immediate actions required by said emergency, and procure the necessary equipment, services, and supplies for those purposes, without giving notice for bids to let contracts; and WHEREAS, City staff services in public safety, administrative services and other divisions have been substantially diverted, and other direct expenditures have been incurred since March 1, 2020 for COVID-19 public health and safety response and mitigation purposes; and WHEREAS, the East Palo Alto Municipal Code Chapter 3.20.010 states that the City Council, as governing body, may make emergency appropriations to meet a pressing need for public expenditure to protect public health, safety or welfare; and WHEREAS, City Council authorized emergency appropriations of $975,000; and WHEREAS, such funds may be utilized for COVID-19 emergency mitigation strategies including, but not limited to, public safety first responder mitigation and monitoring activities, community testing and outreach, City staff and facility safety protocol, enhanced hygiene for local residents and in facilities, sustained multi-lingual and multi-platform communication, and other equipment and supplies as deemed necessary.

3.8.a
Packet Pg. 106 Attachment: Reso December 2021 Quarterly Emergency Report (2068 : Quarterly COVID-19 Emergency Reporting Dec 2021) Resolution No. XX-2022 2 of 2

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO HEREBY:

1. Accepts the Quarterly Emergency Report for December 31, 2021; and

2. Ratifies the City Manager’s authorization of the COVID Community Testing and Vaccination Outreach and Site Support Cost Reimbursement Agreement with San Mateo County from July 1, 2021 through January 31, 2022; and

3. Ratifies all previously encumbered and expended COVID-19 emergency response expenditures authorized by the City Manager under said Emergency Appropriation.

PASSED AND ADOPTED this 18th day of January 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Ruben Abrica, Mayor
ATTEST: APPROVED AS TO FORM:

James Colin, City Clerk Rafael E. Alvarado, Jr., City Attorney

3.8.a
Packet Pg. 107 Attachment: Reso December 2021 Quarterly Emergency Report (2068 : Quarterly COVID-19 Emergency Reporting Dec 2021)

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: James Colin, Executive Assistant
SUBJECT: Approve Compensation Adjustments for Non-Bargaining, Unrepresented Confidential Restricted Classific
Recommendation
Adopt a Resolution:

1. Approving the 3% COLA adjustment effective the first full pay period following January 1, 2022, for Unrepresented Confidential Non-Bargaining Restricted Classifications;

2. Approving the third and final equity adjustment equal to 1/3 the percentage increase to achieve the target of 95% of market median for these unrepresented classifications; and

3. Appropriating $60,618 from General Fund vacancy and other salary savings within the Budget for Fiscal Year 2021-22.

Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Priority No. 2: Enhance Economic Vitality
Priority No. 3: Increase Organizational Effectiveness and Efficiency Background
The majority of City staff are represented members of an organized labor association, such as Service Employees International Union (SEIU), Management Employees’ Association (MEA), and the Police Officers’ Association (POA). However, there are twenty-two (26) individual employee positions in eighteen (18) City classifications that do not belong to one of these organizations, and are therefore “Unrepresented,” and do not benefit from collective bargaining agreements.

3.9 Packet Pg. 108
The purpose of this staff report is to obtain City Council approval of compensation adjustments for Unrepresented staff. These proposed actions are consistent with compensation adjustments that have already been approved for staff that belong to the City’s bargaining units.

Cost-of-Living-Adjustments (COLA)
A cost-of-living-adjustment (COLA) is an increase in income (wages, salaries, and benefits) that allows employees to keep up with the cost of living, essentially compensating for the impacts of inflation. The City Council has already authorized COLA adjustments for bargaining units including MEA, POA, and SEIU accordingly:

Bargaining Unit, %
Increase
Effective Date
MEA, 3% First full payroll immediately following January 1, 2022 POA, 3% First full pay period in November 2021
SEIU, 3% First full payroll immediately following January 1, 2022 Equity Adjustments
Given that these employees are Unrepresented, the City does not negotiate compensation with these classifications, neither as individuals nor as a group. Thus, the City Council approves the compensation package necessary to attract and retain skilled employees. The City Manager and City Attorney, as agreed upon in their respective contracts, will have these discussions pertaining to their compensation with the City Council during their annual performance evaluation process.

In May and June 2019, Koff & Associates (K&A) was hired to conduct a comprehensive Total Compensation Study (Study) for the City. With the overarching goal of facilitating the City’s development of a competitive pay and benefit plan, the Study was driven by:
· Concern that the level and scope of an employee’s work should be acknowledged and compensated fairly and competitively, thus allowing the City to recruit and retain qualified staff; and
· Desire to ensure that City salaries are based upon objective factors and market data, resulting in equity across the City.

To establish the “benchmark market,” the Study analyzed compensation structures from jurisdictions that feature populations, staff, and operational budgets considered to be similar in size and scope as East Palo Alto. These include:

Albani, Belmont, Burlingame, El Cerrito, Foster City, Martinez, Millbrae, Newark, Pacifica, Pleasant Hill, San Bruno and San Pablo
In June 2020, staff and K&A presented the full details of the Study and City Council approved the compensation schedules and classifications for all City employees.

Analysis
Proposed Equity Adjustments for Unrepresented Employees

3.9 Packet Pg. 109
The Study indicated that positions within 5% of market median are considered “at market.” City Council approved equity adjustments for those positions in the MEA and SEIU bargaining units, which remained below 95% of median. In parallel, staff proposed that Unrepresented positions, which remain below the 5% “at market” margin receive the same adjustment.

Through the Study, the proposed percentage adjustments for each of the eight (8) Unrepresented positions listed in Table 1 as detailed below have been reviewed and considered. City Council approved partial adjustments covering two (#1 and #2) of the three installments in December 2019, and January 2020, respectively. Therefore, only the third and last of the 1/3 equity adjustment remain unmet.

TABLE 1 RECOMMENDED EQUITY ADJUSTMENTS
Position/Classification Total Adjustment to
Achieve 95% of
Market Median
#1 (1/3)
As of Jan
12, 20220
#2 (2/3)
As of Jan
10, 2021
#3 (3/3)
Eff. First
full pay
period in
Jan 2022
Chief of Police 3.15% 1.05% 1.05% 1.05%
Community & Econ Dev. Director 5.43% 1.81% 1.81% 1.81%
Finance Director 6.56% 2.19% 2.19% 2.19%
Public Works Director 7.00% 2.33% 2.33% 2.33%
City Clerk 6.01% 2.00% 2.00% 2.00%
Police Commander 0.25% 0.08% 0.08% 0.08%
Human Resources Manager 0.97% 0.32% 0.32% 0.32%
Environmental Services Aid 7.00% 7.00% 6.41% 6.02%
Staff recommends that the third and final installment of the 1/3 equity adjustment be implemented effective the first full payroll immediately following January 1, 2022 to achieve the target of 95% within market median for these unrepresented classifications.

Fiscal Impact
If the City Council approves the COLA and equity adjustments as recommended above effective first full pay period following January 1, 2022, there is sufficient funding available within the approved FY2021-22 budget to accommodate apportionment of approximately $60,618 In the current fiscal year and $121,236 ongoing in future fiscal years.

Based upon the current employee count, current salary savings, projected costs, and general economic outlook for the city, the Finance Department anticipates this will be funded through a balance General Fund budget.

Environmental
The action being considered does not constituted a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guidelines section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.

3.9 Packet Pg. 110
Attachment
Resolution
Attachments

1. Resolution for Unrep adjustment

3.9 Packet Pg. 111
Resolution No. XX-2022 Page 1 of 2
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF EAST PALO ALTO

APPROVING COMPENSATION ADJUSTMENTS FOR NON-BARGAINING,

UNREPRESENTED CONFIDENTIAL RESTRICTED CLASSIFICATIONS FOR FISCAL YEAR 2021-2022
WHEREAS, the City Manager is requesting City Council authorization and approval of compensation adjustments for Unrepresented Confidential Non-Bargaining Restricted Classifications with regular full-time status (“Unrepresented Employees”) similar to those received by the recognized bargaining groups; and WHEREAS, those Unrepresented Employees are not represented by bargaining units, but they have received similar benefits as those represented by the recognized bargaining units; and
WHEREAS, the City Manager recommends approval to grant the proposed 3% Cost-Of-Living-Allowance (“COLA”) adjustment effective the first full pay period following January 1, 2022, for Unrepresented Employees; and WHEREAS, the City Manager also recommends approval of the third and final installment of the equity adjustment equal to 1/3 the percentage increase to achieve the target of 95% of market median for these Unrepresented Employees.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO hereby:

1. Approves the 3% COLA adjustment effective the first full pay period following January 1, 2022, for Unrepresented Confidential Non-Bargaining Restricted Classifications;

2. Approves the third and final equity adjustment equal to 1/3 the percentage increase to achieve the target of 95% of market median for these unrepresented classifications; and

3. Appropriates $60,618 from General Fund vacancy and other salary savings within the Budget for Fiscal Year 2021-22.

ATTACHMENT 1

3.9.a
Packet Pg. 112 Attachment: Resolution for Unrep adjustment (2069 : Approve Compensation Adjustments for Non-Bargaining, Unrepresented Confidential Resolution No. XX-2022 Page 2 of 2
PASSED AND ADOPTED this 11th day of January 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
________________________________
Ruben Abrica, Mayor
ATTEST: APPROVED AS TO FORM:
_____________________________ ________________________________ James Colin, Acting City Clerk Rafael E. Alvarado, Jr., City Attorney

3.9.a
Packet Pg. 113 Attachment: Resolution for Unrep adjustment (2069 : Approve Compensation Adjustments for Non-Bargaining, Unrepresented Confidential

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: Azalea Renfield, Community Services Manager
SUBJECT: Request to increase contract and purchase order for Ricoh Digital Services Recommendation
Authorize the City Manager to increase Ricoh Digital Services contract and purchase order in an amount not to exceed Seventeen Thousand Six Hundred Five Dollars and Thirty Six Cents ($17,605.36).

Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Priority No. 3: Increase Organizational Effectiveness and Efficiency Priority No. 4: Improve Public Facilities and Infrastructure Background & Analysis
The City of East Palo Alto entered into a 3-year (36 months) lease agreement on September 26, 2016, with Ricoh Digital Services (Ricoh) for six copiers located throughout City offices.

The lease agreement expired on September 26, 2019, and the City is now on a month-tomonth lease agreement.

The City currently owes Ricoh a total of $17,605.36. This amount is comprised of both equipment ($11,234.18), and printing, taxes, and servicing costs ($6,371.18). Below is a overview of all costs.

Table 1: Equipment Costs
Invoice No. Activity Date Due date Period Billed Invoice Billed Invoice Balance 105711150 12-17-2021 01-07-2022 64 $1,420.12 $1,420.12
105619975 11-18-2021 12-07-2021 63 $1,420.12 $1,420.12
105525445 10-19-2021 11-07-2021 62 $1,420.12 $1,420.12
105421522 09-17-2021 10-07-2021 61 $1,420.12 $1,420.12
105285869 08-19-2021 09-07-2021 60 $1,420.12 $1,420.12
105189271 07-19-2021 08-07-2021 59 $1,420.12 $1,420.12
105091714 06-18-2021 07-07-2021 58 $1,356.73 $1,356.73

3.10 Packet Pg. 114
104989420 05-19-2021 06-07-2021 57 $1,356.73 $1,356.73
Total : $11,234.18
Table 2: Printing, Taxes, and Servicing Cost
Invoice No. Invoice Date Total Due
5062382876 7/7/2021 $1,308.43
5062794530 9/7/2021 $1,416.39
5062593240 8/8/2021 $1,201.48
5063003771 10/7/2021 $1,363.42
1089131310 8/18/2021 $41.00
5063202524 11/7/2021 $1,040.46
$6,371.18
Early last year (2021), an RFP was issued by Administrative Services to solicit proposals from companies that can provide copiers at a competitive rate and quick and reliable responses to service requests. The City received three (3) submissions in response to the RFP from Ricoh Digital Services, Shamrock Office Solutions, and Ray Morgan Company (RMC). Staff recommends that Council authorizes the City Manager to pay Ricoh in full, and then enter into a new lease agreement after a new vendor has been selected.

Fiscal Impact
Staff request that City Council authorize the City Manager to increase the existing contract and purchase order in the amount not to exceed $17,605.36 from the General Fund to cover the balance owed to Ricoh Digital Services.

Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website and at the San Mateo Co. Library located at 2415 University Avenue, East Palo Alto.

Environmental
The action being considered by the City Council is exempt from the California Environmental Quality Act (CEQA) because it is not a “project” pursuant to 15378(b)(4) because it is a fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant impact on the environment.

Attachments

1. RESOLUTION for Ricoh Copiers PO

3.10 Packet Pg. 115
RESOLUTION NO.__________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO

AUTHORIZING THE CITY MANAGER TO INCREASE THE RICOH DIGITAL

SERVICES CONTRACT AND PURCHASE ORDER IN AN AMOUNT NOT TO

EXCEED SEVENTEEN THOUSAND SIX HUNDRED FIVE DOLLARS AND THIRTY SIX CENTS ($17,605.36)
WHEREAS, the City of East Palo Alto (“City”) entered into a 3-year lease agreement on September 26, 2016, with Ricoh Digital Services (Ricoh) for six copiers located throughout City offices; and
WHEREAS, the lease agreement expired on September 26, 2019, and the City has been on a month-to-month lease agreement; and
WHEREAS, the City currently owes Ricoh a total of $17,605.36, comprised of both equipment ($11,234.18), and printing, taxes, and service costs ($6,371.18), and

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO hereby
authorizes the City Manager to increase the Ricoh Digital Services contract and purchase order in an amount not to exceed Seventeen Thousand Six Hundred Five Dollars and Thirty Six Cents ($17,605.36).

PASSED AND ADOPTED this 18th day of January 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Ruben Abrica, Mayor
ATTEST: APPROVED AS TO FORM:

3.10.a
Packet Pg. 116 Attachment: RESOLUTION for Ricoh Copiers PO (2064 : Request to increase contract and purchase order for Ricoh Digital Services) City Clerk Rafael E. Alvarado Jr., City Attorney

3.10.a
Packet Pg. 117 Attachment: RESOLUTION for Ricoh Copiers PO (2064 : Request to increase contract and purchase order for Ricoh Digital Services)

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: Azalea Renfield, Community Services Manager
SUBJECT: Approval of a new leasing agreement with Shamrock Office Solutions for Citywide Copy Machines
Recommendation
Authorize the City Manager to enter into a Four-year lease agreement with Shamrock Office Solutions to provide six multi-use copy machines throughout city offices in an amount not to exceed Ninety-Nine Thousand Eight Hundred Fifty-One Dollars and Fifty-Two cents ($99,851.52).

Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Priority No. 3: Increase Organizational Effectiveness and Efficiency Priority No. 4: Improve Public Facilities and Infrastructure Background
The City of East Palo Alto entered into a 3-year (36 months) lease agreement on September 26, 2016, with Ricoh Digital Services for six (6) copiers located throughout City offices. This lease agreement expired on September 26, 2019, and the City has been on a month-to-month lease agreement.

The City's current primary production copiers are Ricoh MP C6004. The copiers are used for approximately 90% of our printing, about 24,000 copies per month. The other 10% is attributed to outsourcing to printing companies when printing in bulk (e.g., community mailers). All six (6) copy machines perform the functions of scanning, faxing, and printing in color and black and white (B&W). Each machine contributes to a combined total printing average of 17,943 color and 7,661 B&W pages per month.

Although our copiers have performed adequately for our City Departments over the years, our machines are becoming worn and require frequent service requests. Within the last 18 months, the copiers have had over 20 service calls. Staff recommends that we pay Ricoh a final payment for the month and enter into a new 4-year agreement with a service provider that can

3.11 Packet Pg. 118
transition new machines into our office without interruption in business.

Analysis
The City has been out of contact since September 26, 2019, and is now on a month-month lease agreement. Earlier this year (2021), an RFP was issued by Administrative Services to solicit proposals from companies that can provide copiers at a competitive rate and quick and reliable responses to service requests. The City received three (3) submissions in response to the RFP from Ricoh Digital Services, Shamrock Office Solutions, and Ray Morgan Company (RMC). RFPs were reviewed by a small committee consisting of the following city staff: Jimmie Tulabing, Senior Information Technology Analyst; Azalea Renfield, Community Services Manager; and Marie McKenzie, Administrative Services Director.

Staff assessed the costs, machine functions, and benefits of each proposal. Due to relatively low production levels across many city offices, staff discovered that most printing occurs at City Hall (2415 University Avenue). Therefore, the need for high-powered printers (Ricoh MP C6004) at every office is not needed, and therefore can be changed to a different model to save on costs.

Below is a Copier Comparison overview of the cost and companies that responded to the RFP.

Overview of 2021 Proposals to Provide Copy Machines
Company Lease Term &
Cost
# of Machines Added
Services/Benefits
Ricoh Digital
Services
(48-months)
Equipment Fixed
Cost. $53,210.88
Service & Printing
Estimated Cost.
$48,233.55 Total
Estimated Cost
$103,893.60
6 (3) Ricoh IMC
C6000 (3) Ricoh
IMC C3500
• Current Service
Provider • Seamless
Integration with mobile
devices. • Information
sharing between Ricoh
devices/platforms.
• Innovative support for
changing customer
environments.
• Proposal doesn’t
include tax.

Shamrock
Office
Solutions
(48-months)
Equipment Fixed
Cost. $55,904.64
Service & Printing
Estimated Cost.
$43,946.83
Total Estimated
Cost:
$99,851.52
6 (1) Ricoh IM
C6000 (1) Ricoh IM
C4500 (4) Ricoh IM
C3500
• Locally owned and
Operated • 10-15
Service Technicians
dedicated to East Palo
Alto Area • Proactive
Preventative
Maintenance Calls
• Account Executive
Dedicated to City of East
Palo Alto for on-going
training during entire
lease. • Service calls are
included free at NO

3.11 Packet Pg. 119
extra charge.

Ray Morgan
Company
(RMC)
(48-months)
Equipment Fixed
Cost. $50,105.28
Service & Printing
Estimated Cost.
$35,561.73 Total
Estimated Cost
$85,667.02
6 (2) Ricoh IM
C6000 (4) Ricoh IM
C4500
• Pricing reflects the
RMC U-Manage 63
monthly rental program,
which provides flexible
options of upgrades with
no penalty at 36 or 48
months - unlike
traditional lease
contracts. • After-hours
service is $200 per hour,
based on availability.
• The proposal includes
estimated sales tax.

While all proposals in the selection process were competitive, the City ultimately selected Shamrock Office Solutions to be awarded a 48-month contract to provide new copiers and ongoing maintenance. After reviewing the Copier Comparison Chart, the current annual costs for our existing compared to the proposed annual cost of new copiers yield a savings of $906 per year. The total cost is $24,962 per year/$2,080.24 per month. This number is a high estimation that includes sales tax and printing averages.

Shamrock Office Solutions will provide six (6) new copy machines comprised of the following models based on productivity and usage:

City Location Machine and
Model
2415 University Avenue Ricoh IM C6000
Ricoh IM C4500
141 Demeter Street Ricoh IM C3500
1960 Tate Street Ricoh IM C3500
Ricoh IM C3500
150 Tara Road Ricoh IM C3500
Staff requests authorization for the City Manager to enter a 4-year (48 months) lease agreement with Shamrock Office Solutions and replace the existing six (6) Ricoh MP C6004 copiers with six (6) new digital copiers. The buyout for our current leased copiers is $2,694.94, which Shamrock will pay when returning the old printers to Ricoh Digital Services.

Fiscal Impact
Adequate funds have been budgeted for this service in the approved FY21-22 budget.

However, a shortfall of $12,000 is needed for the rest of the fiscal year. Staff request that City Council appropriate $12,000 from the General Fund to cover the shortfall.

Revenues are received monthly through an administrative fee charged to city-wide departments to use printing equipment, including the maintenance and support of the technology systems. The total cost city-wide is $99,851.52 ($24,962.88 per year).

3.11 Packet Pg. 120
Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website and at the San Mateo Co. Library located at 2415 University Avenue, East Palo Alto.

Attachments

1. RESOLUTION for Copiers

3.11 Packet Pg. 121
RESOLUTION NO.__________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO

AUTHORIZING THE CITY MANAGER TO ENTER INTO A FOUR-YEAR LEASE AGREEMENT WITH SHAMROCK OFFICE SOLUTIONS TO PROVIDE SIX MULTIUSE COPY MACHINES IN AN AMOUNT NOT TO EXCEED NINETY-NINE

THOUSAND EIGHT HUNDRED FIFTY-ONE DOLLARS AND FIFTY-TWO CENTS ($99,851.52)
WHEREAS, the City of East Palo Alto (City”) has reached the end of 60-month contracts with its current copier vendor Ricoh Digital Services and the current copier fleet is worn and at the end of its useful life; and
WHEREAS, City staff has completed the Request for Proposals (RFP) process to select proposals for new copier equipment and has selected Shamrock Office Solutions as the preferred vendor; and
WHEREAS, City staff recommends the lease of six multi-function copiers and the return of six Ricoh Digital Services copiers to Ricoh Digital Services by Shamrock Office Solutions; and
WHEREAS, City staff further recommends the issuance of a purchase order in an amount not to exceed $99,851.52 which includes sales tax for the acquisition of six multi-function copier equipment and printing services; and

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO hereby:
authorizes the City Manager to enter into a four-year lease agreement with Shamrock Office Solutions to provide six multi-use copy machines throughout City offices in an amount not to exceed Ninety-Nine Thousand Eight Hundred Fifty-One Dollars and FiftyTwo cents ($99,851.52).

PASSED AND ADOPTED this 18th day of January 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

3.11.a
Packet Pg. 122 Attachment: RESOLUTION for Copiers (2063 : Approval of a new leasing agreement with Shamrock Office Solutions for Citywide copiers) Ruben Abrica, Mayor
ATTEST: APPROVED AS TO FORM:

City Clerk Rafael E. Alvarado Jr., City Attorney

3.11.a
Packet Pg. 123 Attachment: RESOLUTION for Copiers (2063 : Approval of a new leasing agreement with Shamrock Office Solutions for Citywide copiers)

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: Tomohito Oku, Finance Director
Agnes Pabis, Financial Services Manager
SUBJECT: November 2020 Cash Report
Recommendation
Accept and file the Cash Treasury Report for the month of November 2021 Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Ø Priority #3: Increase Organizational Effectiveness and Efficiency Ø Priority #5: Improve Communication and Enhance Community Engagement Background
Pursuant to Section 53646 of the Government Code of the State of California, the City Treasurer may submit a quarterly report to the City Council regarding the funds and investments of the City. Further, City Investment Policy Section XVIII requires monthly reporting of investment transactions, as specified. Because the City participates in State and County investments pools and does not independently broker or engage outside investment advisors to transact investments; the monthly reporting provides a snapshot of overall cash receipting, transfers, and disbursements on a monthly basis.

Analysis
This report covers cash and investments of the City in the three cash and investment accounts: Wells Fargo Bank, San Mateo County Pool, and the California State Local Agency Investment Fund. The monthly report does not include petty cash, or the California State Community Infrastructure Program (SCIP) bond proceeds held by a trustee in the name of the City. For investment purposes, City cash is pooled, except for bond proceeds held by a trustee. The City does not have, nor is it legally required to have, separate bank accounts for each individual fund. However, all cash is segregated in the City’s accounting records.

Monthly cash transactions for the monthly period ending November 30, 2021, are as follows:

3.12 Packet Pg. 124
Account
Beginning
Balance Receipts Disbursements
Quarterly
Interest
Allocation
Inter-Account
Transfers Ending Balance
Wells Fargo Bank 1,165,322.84 1,170,001.56 (2,845,538.66) - 1,500,000.00 989,785.74 LAIF 9,999,624.05 - - - - 9,999,624.05
San Mateo County Pool 91,493,697.65 385,957.19 - - (1,500,000.00) 90,379,654.84 Total 102,658,644.54 1,555,958.75 (2,845,538.66) - - 101,369,064.63 The Wells Fargo cash balance reflects the book value balance (i.e., total outstanding checks not cashed are deducted from the account balance). The month-to-date cash and investment balance decreased approximately $1.3M compared to the balance as of October 31, 2021.

November receipts, a total of approximately $1.6M, primarily consist of Sales Tax ($0.2M), Veolia payment ($0.1M), donation from H&H Evergreen, and various receipts related to fees and charges of services.

November disbursements total $2.8M and primarily consist of payroll costs ($1.1M), Animal Control expenditures ($0.5M), SFCJPA Contribution ($0.3M), and other recurring operating expenditures.

The table below reflects recent treasury yield comparisons up to five-year notes since that is the maximum maturity the City may invest:

Nov-21 Oct-21 Nov-20
6-month Treasury Bill 0.10 0.07 0.09
2-year Treasury Note 0.52 0.48 0.16
5-Year Treasury Note 1.14 1.18 0.36
LAIF average monthly effective yields were 0.203% in November remained the same from October. San Mateo County monthly gross earnings for November were 0.962% compared to

1.024% in October. The County Pool earnings estimates for FY 21-22 are at 0.98%.

Staff believes the City has investment liquidity and anticipated revenues to meet the City’s anticipated expenditure requirements for the ensuing six months.

Fiscal Impact
This report is informational.

3.12 Packet Pg. 125

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: Rachel Horst, Housing Project Manager
Karen Camacho, Partnership for the Bay’s Future Fellow
SUBJECT: Introduction of East Palo Alto Opportunity to Purchase Act ("EPA OPA") Ordinance
Recommendation
Waive the first reading and introduce an Ordinance titled “East Palo Alto Opportunity to Purchase Act” (“EPA OPA”), adding Chapter 14.26 to the East Palo Alto Municipal Code.

Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Priority No. 6: Create a Healthy and Safe Community
Background
In June 2019, the City Council directed staff to apply for a Partnership for the Bay’s Future Challenge Grant for Housing Protection and Preservation (“Challenge Grant”) to achieve three main goals: (1) Establishing a sustainable funding source for housing preservation; (2) launching a preservation model centered on a Community Land Trust (“CLT”) to acquire, rehabilitate, and redevelop properties; and (3) designing and supporting the passage of a local preservation ordinance- a Tenant Opportunity to Purchase Act/Community Opportunity to Purchase Act (“TOPA/COPA policy”).

After receiving a Challenge Grant award, in January 2020, City staff began researching and developing an East Palo Alto Opportunity to Purchase Act (“EPA OPA,” or “Ordinance”).

Figure 1 lists the major milestones that have occurred in the OPA Process:

Figure 1
EPA OPA Milestones

7.1 Packet Pg. 126
Date Description
June 4, 2019
Council adopted Resolution No. 5128, authorizing the City Manager to submit an application to the Partnership for the Bay’s Future for a Challenge Grant for Housing Protection and Preservation (“Challenge Grant”).

November 2019
The City was awarded a Challenge Grant. Challenge Grant Fellow began work in February 2020 and continued through 2020 and 2021.

January 2021
City Council adopted as one of its Council Priorities, “Advancing the Concept of TOPA/COPA and Other Homeownership
Opportunities.”
July 20, 2021
Staff provided an update on Challenge Grant progress to City Council and received authorization to apply for a Partnership for the Bay’s Future Breakthrough Grant.

July 2021 –
September 2021
Nine Affinity Group meetings (67 participants) and two Focus Group meetings (19 participants) were conducted to gather community input. Participants consisted of homeowners, tenants, landlords, and real estate agents.

October 5, 2021
Policy & Action City Council item to provide a report on OPA progress and seek direction on development of an ordinance. City staff were directed to bring back a proposed OPA Ordinance for hearing.

November 16,
2021
Public hearing for OPA Ordinance. City Council directed staff to hold a community meeting on OPA and return to the next City Council meeting with an updated Ordinance.

December 1,
2021
Community meeting via Zoom on OPA with 276 participants and 72 speakers.

December 3 & 6,
2021
Staff hosted virtual office hours to provide residents and stakeholders with an additional opportunity to ask questions or express concerns.

December 7,
2021
Public hearing for OPA. Staff presented on recommended
changes to the Ordinance based on City Council direction and extensive community feedback. City Council took over two hours of public comment from 128 speakers and continued the item to December 22.

December 22,
2021
Public Hearing and First Reading of OPA Ordinance. Staff proposed several amendments to the Ordinance based on

7.1 Packet Pg. 127
extensive public feedback since the first draft was published for consideration at the November 16, 2021 City Council meeting.1 January 13 & 14,
2022
Staff hosted accessible office hours to receive further community input.

This staff report addresses City Council direction to staff at the December 22 Public Hearing to:

1.) return with an amended Ordinance for consideration at the January 18, 2022 meeting;

2.) provide an analysis of the OPA Ordinance by the consulting firm David Rosen & Associates; and

3.) provide further clarification on Qualified Nonprofits and foreclosures.

Analysis
Changes to OPA Ordinance
The Ordinance can be found in Attachment 1. Staff made changes to the Ordinance based on the following City Council direction:

1. Exempt properties from the Ordinance that are owned by East Palo Alto residents.

2. Exempt households with emergency circumstances from the Ordinance.

3. Break down the 30-day Statement of Interest period into two phases of 15 days each, requiring Potential Eligible Purchasers to express interest in exercising their rights under the Ordinance within the first 15 days after receiving a Notice of Intent to Sell, followed by a Statement of Interest 15 days thereafter (if applicable).

4. Allow for shortening of the OPA timelines with the consent of both parties in cases where there is only one Potential Eligible Purchaser.

5. Shorten the timelines overall, with the goal of a 90-day maximum timeline for single family dwellings.

Each of these Ordinance changes is discussed in detail below.

1. Exempt properties from the Ordinance that are owned by East Palo Alto residents.

Updated Subsection 14.26.040.A.2

2. Non-Owner-Occupied Residential Property owned by an East Palo Alto resident, when the Owner has occupied a Residential Property within East Palo Alto as the Owner’s Principal Residence for more than one (1) year. This exemption shall not apply when any Residential Property is owned by:
a) A real estate investment trust, as defined in Section 856 of the Internal Revenue 1 The full December 22, 2021 public hearing item can be viewed at:
http://eastpaloalto.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=1410&Inline=True

7.1 Packet Pg. 128
Code;
b) A corporation; or
c) A limited liability company in which at least one member is a corporation.

The above language exempts properties where the owner is an East Palo Alto resident. To qualify as an East Palo Alto resident for this exemption, the owner must have a principal residence at another property in East Palo Alto for more than one year. This subsection uses the definition of investor-owned properties in CA Civil Code Section 1947.12 (AB 1482) to further clarify that this exemption applies only when both properties are owned by a natural person.

2. Exempt East Palo Alto residents with emergency circumstances.

Updated Subsection 14.26.040.B.10
A transfer of a Residential Property having no more than four (4) Dwelling Units made for the purpose of either: (a) paying for imminently necessary health care expenses of an Owner of the Residential Property, or (b) an emergency circumstance placing the Owner in financial hardship and at imminent risk of foreclosure or bankruptcy and the Owner has occupied the Residential Property as the Owner’s Principal Residence during the prior year. For purposes of this subsection only, “Owner” shall be limited to a natural person having an undivided interest in the Residential Property of at least fifty percent (50%). An Owner may claim this Exempt Transfer within one year of having vacated the Residential Property where the Owner demonstrates the existence of the conditions set forth in (a) or (b) of this subsection.

The prior transfer exemption included health emergencies only-- specifically, sale of the property for the purpose of paying for “imminently necessary” health care expenses.

City Council must be aware that an emergency exemption clause in the Ordinance has the potential to be exploited as a loophole and undermine the Ordinance objectives of preventing displacement and creating affordable homeownership and rental opportunities. However, staff believes that this new proposed subsection has the necessary restrictions and can keep the intended limited involvement of the City by still allowing the exemption to be self-certified by the owner without demanding an administrative certifications process that would increase the implementation costs of the Ordinance and defeat the purpose of an emergency exemption submitted in good faith.

To prevent any kind of abuse of this clause, staff also believes that the one-year residence requirement and the restriction to one year after an Owner moves out of the property are necessary.

The Administrative Guidelines would need to require property owners not only to expressly state the nature of the emergency but also to allege in their self-certification that they would not sell the residential property but for the emergency circumstances that they face.

3. Require Potential Eligible Purchasers to express interest in exercising their rights under the Ordinance within the first 15 days after receiving a Notice of Intent to Sell, followed by a Statement of Interest 15 days thereafter (if applicable).

Updated Section 14.26.080.B

7.1 Packet Pg. 129
Statement of Interest. Within fifteen (15) days of receiving the Owner’s Notice of Intent to Sell, a Potential Eligible Purchaser shall notify the Owner, at the email address provided by the Owner in the Notice of Intent to Sell, of the Potential Eligible Purchaser’s intent to submit a Statement of Interest, in order to be eligible to submit a Statement of Interest. Prior to the expiration of the Notice Period set forth in Paragraph A of this Section, any Potential Eligible Purchaser defined in Section 14.26.70 may deliver a Statement of Interest to the Owner of the Residential Property (“Statement of Interest”). The Statement of Interest shall notify the Owner of the Potential Eligible Purchaser’s interest in exercising the Right of First Offer and/or Right of First Refusal under this Chapter.

Potential Eligible Purchasers who do not provide any notification to the Owner within 15 days of receipt of the Notice of Intent to Sell-- either by submitting a Statement of Interest directly, or by notifying the Owner via email that they intend to submit a Statement of Interest-- waive their right to submit a Statement of Interest.

4. Allow shortening of timelines with consent of both parties in cases where there is only one Potential Eligible Purchaser.

Updated Section 14.26.130.D
Any agreement between the Owner and a Potential Eligible Purchaser to shorten the time periods provided for exercise of any right afforded under this Chapter is prohibited unless all other Potential Eligible Purchasers have waived their rights under this Chapter. Notwithstanding the foregoing, any Potential Eligible Purchaser may affirmatively indicate that they have no interest in a Residential Property prior to the expiration of any deadlines and in accordance with the Administrative Guidelines.

Nothing in this Paragraph shall prohibit an agreement to extend the deadlines set forth herein.

5. Shorten the timelines overall, with the goal of a 90-day maximum timeline for single family dwellings.

Proposed Changes
As noted above, the Statement of Interest period has been split into two stages of 15 days each, allowing the Owner to proceed to list or market and sell the property to any third party if the Potential Eligible Purchasers indicate no interest in purchasing within the first 15 days.

In the timeline amendments below, the Right of First Refusal period for single family dwellings is reduced from 10 days to 5 days (see Figures 2 and 3), and for multifamily dwellings of 2 or more it is reduced from 30 days to 20 days (see Figure 4). This reflects stakeholder input to shorten the Right of First Refusal period.

The time to close for single family dwellings is reduced from 40 days to 30 days (see Figure 2). There is a 60-day extension to close if a Potential Eligible Purchaser indicates they are receiving a commercial loan, as loan approval and release of funds to a borrower typically takes 90-120 days (see Figure 3). For multifamily, time to close is kept the same, as loans typically take between 90-120 days depending on the property size (see Figure 4).

Note that the amendments to the Ordinance ensure that all properties owned by

7.1 Packet Pg. 130
East Palo Alto residents are exempt, and these timelines therefore only apply to properties owned by non-East Palo Alto residents and corporate or investor entities.

Figure 2
EPA OPA Timelines for Non-Exempt Single-Family Dwellings (Tenant as Potential Eligible Purchaser)
Statement of Interest
Time for Tenant to submit a statement indicating
interest in purchasing.
30 days
15 days (additional 15 days
if applicable)
Initial Offer
Time for tenant to submit an Offer to Purchase.
30 days
Right of First Refusal/Offer to Purchase
Time for Owner to send a copy of Third-Party
Purchaser’s Offer.
0-2 days
Right of First Refusal/Match 3rd Party Offer
Time for Tenant to match the Third-Party Purchaser’s
Offer.
10 days
5 days
Close
Time for the Tenant and the Owner to close the
transaction.
40 days
30 days
Total 30 – 112 days
15 – 97 days
Figure 3
EPA OPA Timelines for Non-Exempt Single-Family Dwellings (Qualified Nonprofit or City as Potential Eligible Purchaser) Statement of Interest
Time for QNP or City to submit a statement indicating
interest in purchasing.
30 days
15 days (additional 15 days if
applicable)
Initial Offer
Time for QNP or City to submit an Offer to Purchase.
30 days
Right of First Refusal/Offer to Purchase
Time for Owner to send a copy of Third-Party
Purchaser’s Offer.
0 – 2 days
Right of First Refusal/Match 3rd Party Offer
Time for QNP or City to match the Third-Party
Purchaser’s Offer.
10 days
5 days
Close
Time for the QNP or City and the Owner to close the
transaction.
90 days
30 days (60-day extension if
applicable)
Total 30 – 162 days
15 – 127 days (extension
included)
Figure 4
EPA OPA Timelines for Non-Exempt Multi-Family Dwellings (Qualified Nonprofit or City as Potential Eligible Purchaser) Statement of Interest 30 days

7.1 Packet Pg. 131
Time for QNP or City to submit a statement indicating
interest in purchasing.
15 days (additional 15 days if
applicable)
Disclosure Package
Time for Owner to send Potential Eligible Purchasers
a disclosure package with information about the
property.
0 – 5 days
Initial Offer
Time for QNP or City to submit an Offer to Purchase.
60 days (2-3 units)
90 days (4+ units)
Right of First Refusal/Offer to Purchase
Time for Owner to send a copy of Third-Party
Purchaser’s Offer.
0 – 2 days
Right of First Refusal/Match 3rd Party Offer
Time for QNP or City to match the Third-Party
Purchaser’s Offer.
30 days
20 days
Close
Time for the QNP or City and the Owner to close the
transaction.
90 days (2-3 units)
120 days (4+ units)
Total 30 – 217 days (2-3 units)
15 – 207 days (2-3 units)
30 – 277 days (2-3 units)
15 – 267 days (4+ units)
Updated Section 14.26.090.B
Acceptance of Offer of Purchase. Upon acceptance of an offer to purchase a Residential Property made pursuant to Paragraph A of this Section, the Potential Eligible Purchaser shall make reasonable and good faith efforts to close the transaction. A Potential Eligible Purchaser shall have thirty (30) days to close the transaction for the sale of a Single-Family Dwelling. A Qualified Nonprofit and/or the City shall have ninety (90) days to close the transaction for the sale of a two to three (2-3) unit Multi-Family Dwelling, and one hundred and twenty (120) days to close the transaction for the sale of a four or more (4+) unit Multi-Family Dwelling. The deadline to close a transaction for the sale of a Single-Family Dwelling shall be extended for an additional sixty (60) days if the Potential Eligible Purchaser provides written documentation that its lender will require a commercial loan for the purchase of the property (for a total of 90 days to close). Nothing in this Paragraph shall prevent the Owner and the Potential Eligible Purchaser from agreeing to further extend the deadline to close the transaction.

Updated Section 14.26.100.C
Time to Exercise Right of First Refusal. The Owner shall provide any Potential Eligible Purchaser that submits a Statement of Interest and an offer at least five (5) days to accept the Offer to Purchase for a Single-Family Dwelling, or at least twenty (20) days to accept the Offer to Purchase of a two or more (2+) unit Multi-Family Dwelling. The acceptance of an Offer to Purchase by any Potential Eligible Purchaser extinguishes any Right of First Refusal of other Potential Eligible Purchasers.

Updated Section 14.26.100.D

7.1 Packet Pg. 132
Time to Close. Upon acceptance of the Offer to Purchase, the Potential Eligible Purchaser shall have at least thirty (30) days to close the transaction for the sale of a Single-Family Dwelling, or a total of ninety (90) days if the Potential Eligible Purchaser provides written documentation that its lender will require a commercial loan for the purchase of the property; at least ninety (90) days to close the transaction for the sale of a two or three (2-3) unit Multi-Family Dwelling; and one hundred and twenty (120) days to close the transaction for the sale of a four or more (4+) unit Multi-Family Dwelling.

Nothing in this Paragraph shall prevent the Owner and the Potential Eligible Purchaser from agreeing to further extend the deadline to close the transaction.

East Palo Alto Market
According to MLS data (August 2021), the average amount of days that an East Palo Alto single-family residential property remains on the market (from listing to closing) is approximately 66 days. With the proposed amendments, EPA OPA provides no more than a 97-day process if the owner rejects the Tenant’s initial offer, and a 62-day process if the owner accepts the initial offer.

The purpose of these timelines is to give Potential Eligible Purchasers meaningful time to organize, express interest, submit an offer, secure financing, and to close, while also balancing the Owner’s need to sell. If the Potential Eligible Purchasers do not exercise their rights within these timelines, the Owner may proceed to sell on the open market. Note that nothing in the Ordinance prohibits both parties from agreeing to reduce or increase the closing timeline.

Additional Recommended Changes to the Ordinance
In addition to the above, staff recommend the following changes to the Ordinance to achieve consistency and fulfill the intent of key provisions:

1. Add language (Section 14.26.110E) that explicitly allows parties to agree to a nonrefundable deposit as is typically agreed upon in real estate transactions.

Updated Section 14.26.110.E
Deposit. The Owner shall not require the Potential Eligible Purchaser to pay a deposit of more than three percent (3%) of the contract sales price to make a contract. The deposit is refundable in the event of a good faith failure of the Potential Eligible Purchaser to perform under the contract unless otherwise provided in the contract.

2. Remove language from the section on Termination of Right of First Offer (Section

14.26.090) to clarify that an Owner may list and market a residential property and conditionally accept Third-Party Offers upon 1.) rejection of an offer by a Potential Eligible Purchaser or 2.) upon expiration of the Notice Period.

Updated Section 14.26.090.C
Termination of Right of First Offer. Upon (1) rejection of all offers to purchase made within the Notice Period, or (2) the expiration of the Notice Period, or (3) the failure to close the transaction within the time period set forth in Paragraph B of this Section, the Owner may list and market for sale the Residential Property and may solicit and

7.1 Packet Pg. 133
conditionally accept offers from a Third-Party Purchaser, subject to the requirements of Section 14.26.100.

3. Add definition of Non-Exempt to clarify which types of properties and transfers are subject to the Ordinance.

Updated Section 14.26.020
“Non-Exempt” means a residential property or a transfer that is not exempt under Section 14.26.040 of this Chapter.

4. Consolidate paragraphs and update language in Section 14.26.070 (“Tenant, Qualified Nonprofit and City Opportunity to Purchase”) to clarify which residential properties the Ordinance applies to.

These changes were made to paragraphs B-D and reflect updates made elsewhere in the Ordinance, including expanded exemptions. In addition to utilizing the newly-added “NonExempt” definition, subsections were added to this section to further specify the residential property types subject to the Ordinance.

Economic Analysis of OPA
As directed by City Council, an analysis of OPA by the David Rosen & Associates consulting firm accompanies the updated Ordinance and addresses the following:
• Trends in the local and regional real estate market;
• Capital resources required for nonprofits to acquire single family dwellings; • Calculation of any potential loss in property tax revenue due to purchase of single-family dwellings by nonprofits; and
• 1031 Exchanges.

The analysis by David Rosen & Associates is provided as Attachment 2. Findings from the analysis include:
• The residential market in East Palo Alto has seen significant housing price appreciation in recent years, particularly since the Great Recession, with a 261% increase in single family home sales prices from 2012-2021. A lack of housing supply and continued growth of the Bay Area economy drive housing sales prices and rents in East Palo Alto, and these trends are expected to continue.
• The potential property tax revenue decrease associated with the purchase of (nonexempt) single-family homes and condominiums by nonprofits in a “worst case” scenario is estimated at $67 million, or 1.8% of the City’s total assessed valuation, over 5 years. However, this “worst case” calculation assumes that all non-exempt single family dwellings in East Palo Alto are sold to nonprofits and that all of those units are exempt from all property taxes as qualifying low-income rental units. This is offset by an increase in assessed valuation in the City from the resale of existing owner-occupied units, estimated at $138 million over the next five years, in addition to $560 million to $800 million over the next five years estimated from the City’s pipeline of market-rate

7.1 Packet Pg. 134
units.
• The total subsidy required to purchase and make affordable at 80% AMI or below all non-exempt single-family dwellings and condominiums in East Palo Alto sold over the next five years is estimated to be $97 million to create owner housing and $115 million to create renter housing. [Per-unit costs at 50%, 80%, and 120% AMI are summarized in Table 4 of Attachment 2.] Lowering the income targeting to 50% AMI increases the subsidy required to $131 million to create affordable owner housing and $145 million to create affordable renter housing.
• 1031 Exchanges allow for deferment of capital gains and related federal income tax liability and only apply to sale of an investment property and replacement purchase of another like-kind investment property of equal or greater value. Since 1031 Exchange time limits are measured from when the property to be sold (“relinquished property”) closes, only East Palo Alto residents who are selling one investment property and purchasing a replacement investment property in East Palo Alto are affected by the OPA. The Ordinance’s timelines allow sufficient time to identify and acquire a replacement property, which must be completed within 180 days.

Qualified Nonprofits (“QNPs”)
The City Council requested clarification at the December 22 public hearing on the definition of Qualified Nonprofits (“QNPs”) and the process by which QNPs will be selected if an OPA Ordinance is adopted.

Staff previously recommended language in the Ordinance that sets a baseline for nonprofit housing organizations to apply for certification as QNPs and exercise the right of first offer and right of first refusal under EPA OPA. As currently defined in the Ordinance, eligible nonprofit housing organizations are 501(c)(3) organizations that demonstrate capacity to acquire, provide, and manage affordable housing and a commitment to preventing displacement and community engagement.

The Ordinance states that QNPs must follow an application process outlined in the Administrative Guidelines and that all QNPs must be certified by the City Council. This process is designed to maintain transparency in the selection of QNPs, as development of the Administrative Guidelines will be an extensive public process following the potential adoption of an OPA Ordinance in East Palo Alto, with refinement over time.

Staff propose language for the Administrative Guidelines in Attachment 3. This language may be updated throughout the process of developing the Administrative Guidelines. Staff do not recommend placing this language in the Ordinance due to the fact that City Council would be unable to refine or otherwise alter this section pertaining to QNPs without amending the full Ordinance.

The below chart, which was discussed at the October 5, 2021 and November 16, 2021 City Council meetings, compares TOPA/COPA programs in other cities and their QNP criteria with those proposed for East Palo Alto. Note that staff has added a five-year development experience requirement to these recommendations.

7.1 Packet Pg. 135
Qualified Nonprofit Criteria Comparisons
Washington, DC TOPA
(1980)[1]
San Francisco COPA (2019)[2] East Palo Alto OPA
• Right of First Offer and
Right of First Refusal given
to tenants; assignment of
rights to any party is at the
sole discretion of tenant(s)
• Commitment to affordable
housing preservation and antidisplacement
• Evidence of relationships with
community orgs (experience
with at least 3 neighborhoodbased or tenant counseling orgs)
• Demonstrated financial and
legal capacity to acquire and
manage any multi-family
residential building in the City
• Requisite of development
experience (experience
acquiring or partnering with
organizations that acquired at
least 2 residential buildings
within the last 5 years)
• QNP certification valid for 3
years with renewal if there is no
information raising doubts
about an existing nonprofit
organization’s entitlement to
certification as a QNP
• 501(c)(3) or California
cooperative corporation that
demonstrates capacity to
acquire, provide, and manage
affordable housing for low,
very-low, and extremely lowincome households
• Commitment to affordable
housing and preventing
displacement
• Commitment to community
engagement and experience
working in East Palo Alto or
with East Palo Alto-based
organizations
• Five-year track record of
development experience; can
partner with another
organization to meet this
experience requirement
• Annual certification of QNPs
with approval of City Council
• QNP certification valid for 5
years
• City Manager or designee will
investigate complaints
alleging QNP failure to comply
[1] Subchapter IV. Opportunity to Purchase. | D.C. Law Library (dccouncil.us) [2] COPA - Final Program Rules-09-03-2019.pdf (sfmohcd.org)

7.1 Packet Pg. 136
with requirements, and may
recommend Council limit,
suspend, or revoke
organization’s certification as
QNP
Foreclosures
Current state law covers financial emergencies due to foreclosure proceedings. SB 10792, which is in effect until January 1, 2026, allows for residents living in 1 to 4-unit buildings facing foreclosure to have the right of first offer. SB 1079 requires that a notice of sale under a mortgage or deed of trust (i.e. foreclosure process) also contain a specific notice to a tenant about their right to purchase a property containing from 1 to 4 single-family residences.

Aside from SB 1079, residents undergoing a foreclosure process may also use the Foreclosure Intervention Housing Preservation Program (FIHPP), which provides $500 million in loans and grants to nonprofits purchasing and rehabilitating 1 to 25-unit buildings at foreclosure auction, in the foreclosure process, or at risk of foreclosure. “At risk of foreclosure” can mean 90-day mortgage delinquency, delinquency on 2 or more property tax payments, that the owner is in bankruptcy, that there is tenant-initiated litigation over lack of habitability, that local government found the building to be partially or fully inhabitable, or more.3 Due to current and future state regulations on foreclosures, the City must exempt Ordinance applicability on the transfer by foreclosure sale or deed in lieu of foreclosure. The Ordinance states that the exemption set forth on foreclosures does not supersede any rights to purchase afforded to Potential Eligible Purchasers under the California Civil Code Sections 2924(f)-(h), 2924(m)-(n), or 2929.3 (or SB 1079).

Next Steps
If directed, staff will return for the second reading of the Ordinance at the next regular City Council meeting, as early as February 1, 2022.

Fiscal Impact
There is no fiscal impact associated with this staff report.

Public Notice
The public was provided notice via publication in the Palo Alto Daily News on January 7, 2022, and by making the agenda and report available on the City’s website and at the San Mateo Co.

Library located at 2415 University Avenue, East Palo Alto.

Environmental
The action being considered does not constitute a “Project” within the meaning of the 2 See Senate Bill No. 1079 on Residential Property: Foreclosure, at https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200SB1079. 3 CACLTN Overview of FIHPP program presentation, August 17, 2021.

7.1 Packet Pg. 137
California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.

Attachments

1. Ordinance

2. David Rosen & Associates EPA OPA Analysis

3. Qualified Nonprofit Criteria for Administrative Guidelines

7.1 Packet Pg. 138
1 ORDINANCE NO. ___

AN ORDINANCE OF THE CITY COUNCIL

OF THE CITY OF EAST PALO ALTO
ADDING CHAPTER 14.26 OF THE EAST PALO ALTO MUNICIPAL CODE

AUTHORIZING THE EAST PALO ALTO OPPORTUNITY TO PURCHASE
ACT
WHEREAS, the City Council finds that East Palo Alto is experiencing a shortage of affordable housing, especially for extremely low-income, very low-income, low-income and moderate-income residents, and a displacement crisis; and WHEREAS, rapid displacement is evidenced in East Palo Alto by high rates of eviction, increasing rents, and increasing home values; and WHEREAS, there is a disproportionate impact of displacement, homelessness, and unmet affordable housing and homeownership needs in East Palo Alto borne by African American, Latinx, and Pacific Islander communities of color; and WHEREAS, sixty percent (60%) of East Palo Alto’s population are renters, and over half of these renters are cost-burdened, meaning they spend over thirty percent (30%) of their monthly income on rent; and
WHEREAS, according to the Bay Area Equity Atlas and the Urban Displacement Project, seventy-two percent (72%) of low-income households in East Palo Alto live in gentrifying neighborhoods; and
WHEREAS, due to state law, tenants living in single-family homes and tenants living in buildings built after 1988 are not protected by rent stabilization (although the Just Cause for Eviction provision still applies); tenants in rent-stabilized units are not protected from displacement by owner-move in; and when a tenant moves out, the rent for that unit can be raised to market value; and
WHEREAS, according to the American Community Survey (2015-2019) and San Mateo County Income Limits, the median household income in East Palo Alto of $67,087 is less than half the county’s median household income, and most East Palo Alto households fall into the “extremely low-income” to “very low-income” category, or 30- 50% AMI, making residents highly susceptible to dramatic shifts in the housing market; and

7.1.a
Packet Pg. 139 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 2 WHEREAS, according to the Center for Responsible Lending, during the foreclosure crisis from 2004-2008, African Americans and Latinxs in California were more than twice as likely as non-Hispanic Whites to lose their homes to foreclosure; and WHEREAS, there is a concentration of properties in East Palo Alto owned by individual and entity investors and the majority of these investors are not residents of the City of East Palo Alto; and
WHEREAS, historically, East Palo Alto residents, both owners and renters, have been denied opportunities to build wealth through property ownership due to discriminatory housing policies, including the practice of redlining that impacted longer term residents and continues to impact successive generations of East Palo Alto residents; and
WHEREAS, it is a necessary and important public purpose to provide relief for these economic and social ills arising from the housing challenges facing East Palo Alto residents; and
WHEREAS, approximately 5.8% of properties in East Palo Alto are owned by East Palo Alto residents with a primary residence elsewhere in the city; and WHEREAS, a limited exemption for these local residents who own other properties within East Palo Alto will promote the purpose of providing relief for these economic and social ills experienced by residents of East Palo Alto; and WHEREAS, Tenant and Community Opportunity to Purchase Act programs have been adopted in a number of jurisdictions including Washington DC and San Francisco to protect residents’ ability to stay in a neighborhood in a cost effective manner; and WHEREAS, the City Council desires to prevent further displacement of East Palo Alto households, to supply a variety of affordable rental and ownership housing options, and to protect the health, safety and general welfare of the public through an opportunity to purchase program; and
WHEREAS, this action is exempt from the California Environmental Quality Act ("CEQA") under the following, each as a separate and independent basis, including but not limited to, the following: CEQA Guidelines Section 15378 (regulatory actions).

Section 15061 (b) (3) (no significant environmental impact), and Section 15183 (actions consistent with the general plan and zoning.)

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO DOES ORDAIN AS FOLLOWS:

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Packet Pg. 140 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 3 SECTION 1. RECITALS
The above recitals are true and correct and incorporated herein by reference.

SECTION 2. AMENDMENT TO THE EAST PALO ALTO

MUNICIPAL CODE
The City Council hereby adds Chapter 14.26 (“East Palo Alto Opportunity to Purchasing Act”) to the East Palo Alto Municipal Code in Title 14 (“Housing”) to read as follows:

Chapter 14.26
East Palo Alto Opportunity to Purchase Act

14.26.010 Title and Purpose
A. This Chapter shall be referred to as the “East Palo Alto Opportunity to Purchase Act” or “EPA OPA” program.

B. The purpose of this Chapter is to confer upon Tenants, Qualified Nonprofits, and the City of East Palo Alto (“Potential Eligible Purchasers”) a Right of First Offer and a Right of First Refusal upon the transfer or sale of Residential Property as defined herein to prevent displacement of lower-income tenants, to facilitate ownership for residents, and to create more affordable housing opportunities in East Palo Alto.

14.26.020 Definitions
“Absentee Owner(s)” means an owner or owners of a residential property who do not occupy the residential property as the owner’s or owners’ principal residence. “Accessory Dwelling Unit (ADU)” means a separate dwelling unit providing complete independent living facilities for one or more persons containing living, sleeping, kitchen and sanitation facilities which are defined as a full bathroom (tub/shower, sink and, a toilet) located on the same lot as the main dwelling unit. An existing single-family residence may be converted to accessory dwelling unit(s) in conjunction with the development of a new main dwelling unit on the site and in conformity with the development standards for a new accessory unit as set forth in Chapter 18.96. Subject to the restrictions contained in Chapter 18.96, an accessory dwelling unit may be either attached to, or detached from or incorporated into the main dwelling unit. An Accessory Dwelling Unit also includes an efficiency unit, as defined in Health and Safety Code Section 17958.1 or a manufactured home, as defined in Health and Safety Code Section 18007, located on the same lot as the main dwelling.

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Packet Pg. 141 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 4 “Administrative Guidelines” means any requirements for implementation and administration of this Chapter adopted by the City Council or designee in accordance with Section 14.26.170.A of this Chapter.
“50% AMI Income Household” means households whose income does not exceed fifty percent (50%) of the area median income, adjusted for family size and as published annually by the City of East Palo Alto.
“Appraised Value” means the value of the property subject to this Chapter, as of the date of the appraisal, based on an objective, independent property valuation, performed according to professional appraisal industry standards. “Bona Fide Offer to Purchase” means an offer to purchase a property subject to this Chapter, or the interest in the property that is either:

For a price and other material terms that are at least as favorable as those accepted by a purchaser in an arm’s length third-party contract; or,
In the absence of an arm’s length third-party contract, an offer to purchase with a price and other material terms comparable to that at which a willing seller and a willing buyer would sell and purchase the property, or the appraised value. “The City” means the City of East Palo Alto, including any departments within the City that are assigned any responsibilities under this Chapter. “Condominium” means an estate in real property consisting of an undivided interest in common in a portion of a parcel of real property, together with a separate interest in space in a residential structure located on the real property in compliance with Civil Code Section 783. A condominium may include, in addition, a separate interest in other portions of the real property.
“Day or Days” means calendar day(s) unless otherwise stated. “Dwelling Unit” means a structure or the part of a structure that is used as a residence that provides complete, independent living facilities including permanent provisions for living, sleeping, eating, cooking and sanitation.
“Duplex” means a single building that contains two dwelling units or two dwelling unit on a single parcel. This use is distinguished from accessory dwelling units and junior accessory dwelling units, which are accessory residential units. “Junior Accessory Dwelling Unit (JADU)” means a dwelling unit that is no more than 500 square feet in size and contained entirely within a single-family residence.

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Packet Pg. 142 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 5 “Low-Income Households” are those households whose income does not exceed sixty percent (60%) of the area median income, adjusted for family size and as published annually by the City of East Palo Alto
“Listing or Marketing” means adding the property on Multiple Listing Service (MLS) or any other private or public online database, or adding or disseminating information about the property on paper or digitally, with the intent of informing prospective ThirdParty Purchasers or their representatives about the opportunity to purchase, promoting the property, or receiving communications from prospective buyers. “Median-Income Households” are those households whose income does not exceed eighty percent (80%) of the area median income, adjusted for family size and as published annually by the City of East Palo Alto.
“Moderate-Income Households” are those households whose income does not exceed one hundred and twenty percent (120%) of the area median income, adjusted for family size and as published annually by the City of East Palo Alto. “Multi-Family Dwelling” means any property in East Palo Alto with two or more dwelling units.
“Non-Exempt” means a residential property or a transfer that is not exempt under Section 14.26.040 of this Chapter.
“Owner” means any natural person, corporation, association, partnership, joint venture, limited liability company, trustee, business entity and its respective agents, or any other entity, who is the owner of record of a residential property. “Owner-Occupied Single-Family Dwelling” means a single-family dwelling that is occupied by the owner(s) as the owner’s or owners’ principal residence. “Owner-Occupied Duplex” means a duplex that is occupied by the owner(s) as the owner’s or owners’ principal residence.
“Owner-Occupied Triplex” means a triplex that is occupied by the owner(s) as the owner’s or owners’ principal residence.
“Potential Eligible Purchaser” means the qualified entity (Tenants, Qualified Nonprofits, or the City) purchasing a property under this Chapter. “Principal Residence” means a residential dwelling that is occupied and is the usual place of return of a natural person. A dwelling will qualify as a primary residence when:
(1) the person has lived in the dwelling for more than fifty percent (50%) of the time in the year prior to the proposed sale; and (2) the person acknowledges the dwelling as the

7.1.a
Packet Pg. 143 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 6 person’s primary residence by voter registration, address on tax returns, homeowners exemption, and/or mailing address.
“Purchaser(s)” means subsidized Tenants, Qualified Nonprofits, or the City who are purchasing a Residential Property under this Chapter.
“Qualified Nonprofit” means an organization that is exempt from federal income tax under 26 USC Section 501(c)(3), or a California cooperative corporation that has the capacity to acquire, provide and manage affordable housing for low, very low, and extremely low income households, has a commitment to prevent displacement, has a demonstrated commitment to community engagement, and is certified by the City Council or designee pursuant to Section 14.26.050 of this Chapter via an application process as set forth in the Administrative Guidelines.
“Rent” means the consideration, including security deposit, cleaning deposit and any other deposits, bonus, benefit or gratuity demanded or received for or in connection with the use or occupancy of rental units and housing services. Rent includes monies and the fair market value of goods or services rendered to or for the benefit of the landlord under the rental agreement.
“Residential Property” means any property containing one or more dwelling units and located in the City of East Palo Alto.
“Single-Family Dwelling” means a property, building, structure or dwelling unit, or portion of a property, building, structure, or dwelling unit principally designed for the residential habitation of one household, identified by one parcel number, and having only one kitchen and one set of common areas, or, where there are two or more kitchens, with all secure entrances leading to the same set of interior common areas. “Subsidized Purchaser” is any Tenant, Qualified Nonprofit, or City receiving public or private subsidy to support a purchase made pursuant to this Chapter. “Tenant” means a renter, tenant, subtenant, lessee or sublessee of a rental unit, or successor to a renter's interest, or any group of tenants, subtenants, lessees, or sublessees of any rental unit, or any other person entitled to the use or occupancy of such rental unit. “Third-Party Purchaser” means any person or entity that has entered into a bona fide contract of sale for a Residential Property prior to an Owner giving the Potential Eligible Purchaser(s) an opportunity to purchase at a price and terms that represent a Bona Fide Offer to Purchase.
“Triplex” means a single building that contains three dwelling units or three dwelling unit on a single parcel. This use is distinguished from accessory dwelling units and junior accessory dwelling units, which are accessory residential units.

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Packet Pg. 144 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 7 14.26.030 Applicability
This Chapter shall apply to the sale or transfer of all Residential Property in the City of East Palo Alto unless otherwise exempted herein.

14.26.040 Exemptions
A. Exempt Residential Property. The following types of Residential Property are not subject to the requirements of this Chapter:

1. Owner-Occupied Single-Family Dwellings, including those with an Accessory Dwelling Unit(s) (inclusive of any Junior Accessory Dwelling Unit) located on the same parcel, when the Owner has occupied the SingleFamily Dwelling or the ADU as the Owner’s Principal Residence for more than one (1) year.

2. Non-Owner-Occupied Residential Property owned by an East Palo Alto resident, when the Owner has occupied a Residential Property within East Palo Alto as the Owner’s Principal Residence for more than one (1) year. This exemption shall not apply when any Residential Property is owned by:
a. A real estate investment trust, as defined in Section 856 of the Internal Revenue Code;
b. A corporation; or
c. A limited liability company in which at least one member is a corporation.

3. Owner-Occupied Condominiums when the Owner has occupied the Condominium as the Owner’s Principal Residence for more than one (1) year.

4. Any Owner-Occupied Duplex with or without any Accessory Dwelling Unit(s) (inclusive of any Junior Accessory Dwelling Unit) located on the same parcel when the Owner has occupied any Dwelling Unit on the property as the Owner’s Principal Residence for more than one (1) year.

5. Any Owner-Occupied Triplex with or without any Accessory Dwelling Unit(s) (inclusive of any Junior Accessory Dwelling Unit) located on the same parcel when the Owner has occupied any Dwelling Unit on the property as the Owner’s Principal Residence for more than one (1) year.

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Packet Pg. 145 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 8 6. Residential Property owned by the local, state, or federal government.

7. Residential Property subject to resale price control under Chapter 18.37 of East Palo Alto’s Municipal Code.

8. Residential Property owned by and operated as a hospital, convent, monastery, extended care facility, convalescent home, or dormitories owned by educational institutions.

B. Exempt Transfers. The following transfers of Residential Property are not subject to the requirements of this Chapter:

1. An inter vivos transfer, whether or not for consideration, between spouses, domestic partners, parents and children, siblings, and/or grandparents and grandchildren.

2. A transfer for consideration by a decedent’s estate if the consideration arising from the transfer will pass from the decedent’s estate to, or solely for the benefit of, charity.

3. A transfer of legal title or an interest in an entity holding legal title to a Residential Property pursuant to a bona fide deed of trust or mortgage, and thereafter any transfer by foreclosure sale or deed in lieu of foreclosure pursuant to a bona fide deed of trust or mortgage. This exemption does not supersede any rights to purchase afforded to Potential Eligible Purchasers under the California Civil Code Sections 2924(f)-(h), 2924(m)-(n), or 2929.3.

4. A transfer of bare legal title into a revocable trust, without actual consideration for the transfer, where one or more transferors is a current beneficiary of the trust.

5. A transfer by devise, descent, or operation of the law upon the death of a natural person.

6. A transfer pursuant to court order or court-approved settlement.

7. Any transfer to a public agency, including but not limited to a transfer by eminent domain or under threat of eminent domain.

8. Any transfer of a fractional interest in a Residential Property that is less than fifty percent (50%) of an undivided interest in the Residential

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Packet Pg. 146 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 9 Property.

9. Any transfer in which the transferee receives a low-income housing credit under 28 U.S.C. § 42.

10. A transfer of a Residential Property having no more than four (4) Dwelling Units made for the purpose of either: (a) paying for imminently necessary health care expenses of an Owner of the Residential Property, or (b) an emergency circumstance placing the Owner in financial hardship and at imminent risk of foreclosure or bankruptcy and the Owner has occupied the Residential Property as the Owner’s Principal Residence during the prior year. For purposes of this subsection only, “Owner” shall be limited to a natural person having an undivided interest in the Residential Property of at least fifty percent (50%). An Owner may claim this Exempt Transfer within one (1) year of having vacated the Residential Property where the Owner demonstrates the existence of the conditions set forth in (a) or (b) of this subsection.

C. Transfer Exemption Procedures. The Owner shall submit a Certificate of Exemption signed under penalty of perjury to the City after deciding to sell and before marketing the property self-certifying one of the exemptions described in

14.26.040.B. A Certificate of Exemption must be accompanied by supporting documents as set forth in the Administrative Guidelines. The City shall make the template Certificate of Exemption accessible on the City website. This section shall not be construed to or used in a manner that unreasonably delays an Owner’s valid and lawful transfer of a real property interest under Transfers Exempted.

14.26.050 Qualified Nonprofits
A. Certification, Term, and Renewal. To effectuate the purpose of this Chapter, the City Council shall certify and recertify Qualified Nonprofits via an application process as set forth in the Administrative Guidelines. A nonprofit organization’s certification as a Qualified Nonprofit shall be valid for five (5) years. The City Manager or designee shall solicit new applications for Qualified Nonprofit status at least once each calendar year, at which time existing Qualified Nonprofits shall be eligible to apply for renewed certification. A list of Qualifying Nonprofits shall be published on the City’s website.

B. Disqualification of Qualified Nonprofits. The City Manager or designee shall promptly investigate any complaint alleging that a Qualified Nonprofit has failed to comply with this Chapter. If after providing the Qualified Nonprofit with notice and opportunity to respond, the City Manager or designee determines that an organization listed as a Qualified Nonprofit has failed to comply with the requirements of this

7.1.a
Packet Pg. 147 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 10 Chapter, the City Manager or designee shall bring a recommendation to City Council to limit, suspend, or revoke that organization’s certification as a Qualified Nonprofit.

14.26.060 Assignment of Rights
A. A Tenant living in a Non-Exempt Single-Family Dwelling with Absentee Owner(s) may assign rights under this Chapter to a Qualified Nonprofit.

B. A Qualified Nonprofit assignee according to Paragraph A of this Section shall sign and submit a “Statement of Rights and Obligations” to the Tenant. The content of the statement shall be set forth in the Administrative Guidelines.

C. The assignment of rights described in Paragraph A of this Section may occur at any time in the process, but must occur during the process provided in Sections

14.16.080 and 14.26.090.

D. Qualified Nonprofit assignees or the assignor shall not accept any payment or reward in exchange for the assignment of rights under this section. Continuing to rent the Single-Family Dwelling at an affordable rate shall not be considered payment or reward for purposes of this section.

14.26.070 Tenant, Qualified Nonprofit and City Opportunity to Purchase A. Before the Owner of a Residential Property may list or market that property for sale to any purchaser, the Owner shall give the Potential Eligible Purchaser(s) specified in Paragraphs B, C, and D of this Section an opportunity to purchase at a price and terms that represent a Bona Fide Offer to Purchase.

1. The Owner is not required to give the Potential Eligible Purchaser(s) specified in Paragraphs B, C, and D of this Section an opportunity to purchase at a price and terms that represent a Bona Fide Offer to Purchase when the Owner has received an unsolicited offer unless the Owner takes any action to accept the unsolicited offer.

B. Process for Tenant Opportunity to Purchase:

1. This Section applies to Tenant-Occupied Single-Family Dwellings and Condominiums with Absentee Owners that do not reside in East Palo Alto as a Principal Residence.

2. Potential Eligible Purchasers. Potential Eligible Purchasers under this Paragraph B includes Tenants, Qualified Nonprofits, and the City. Rights and

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Packet Pg. 148 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 11 priorities are given the order of (1) Tenants, (2) Qualified Nonprofits, and (3) the City, as described in Paragraphs B(5) and B(6).

3. Notice of Intent to Sell. The Owner under this Paragraph B must provide all Potential Eligible Purchasers as specified in Paragraph B(2) with a Notice of Intent to Sell. The City shall make the template Notice of Intent to Sell accessible on the City website.

4. Statement of Interest. All Potential Eligible Purchasers as specified in Paragraph B(2) are allowed to submit a Statement of Interest to Purchase. The City shall make the template Statement of Interest accessible on the City website.

5. Right of First Offer.
a. In the event that a Tenant submits a Statement of Interest in response to the Notice of Intent to Sell, said statement shall be given priority over any Statement of Interest submitted by a Qualified Nonprofit or the City. Nothing prohibits the Tenant(s) from assigning their Right of First Offer or Right of First Refusal to a Qualified Nonprofit after submitting a Statement of Interest.
b. In the event that Qualified Nonprofit(s) and no Tenant submits a Statement of Interest in response to the Notice of Intent to Sell, said statement(s) shall be given priority over any statement submitted by the City.
c. In the event that no Tenant or Qualified Nonprofit submits a Statement of Interest, any Statement of Interest submitted by the City shall be considered.

6. Right of First Refusal.
a. In the event that the Owner rejects all offer(s) submitted by Potential Eligible Purchasers and receives a Third-Party Purchaser Bona Fide Offer to Purchase, the Owner must notify all the Potential Eligible Purchasers who timely submitted a Statement of Interest and an offer, and provide the Potential Eligible Purchasers an opportunity to submit a matching offer, giving priority in the order described in Paragraph B(2). b. A Qualified Nonprofit can be conferred a Right of First Offer and Right of First Refusal for a Tenant-Occupied Single-Family Dwelling with an Absentee Owner(s) if a Tenant (1) assigns in writing the Tenants’ Right

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Packet Pg. 149 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 12 of First Refusal to the Qualified Nonprofit, or (2) executes a written waiver of the Tenants’ Right of First Refusal; or (3) no Tenant submits a Statement of Interest pursuant to Section 14.26.080.
c. The City can be conferred a Right of First Offer and a Right of First Refusal for a Tenant-Occupied Single-Family Dwelling with Absentee Owner(s) if a Tenant (1) executes a written waiver of the Tenants’ Right of First Refusal; or (2) no Tenant or Qualified Nonprofit submits a Statement of Interest pursuant to Section 14.26.080.

C. Process for Qualified Nonprofit or City Opportunity to Purchase:

1. This Section applies to the following properties with an Owner(s) who does not reside in East Palo Alto as a Principal Residence:
a. Non-Tenant Occupied Single Family Dwellings and Condominiums with Absentee Owner(s);
b. Duplexes and Triplexes, with or without tenants, with Absentee Owner(s); and
c. Multi-Family Dwellings, with four (4) or more units, with or without tenants.

2. Potential Eligible Purchasers. Potential Eligible Purchasers under this Paragraph C includes Qualified Nonprofits and the City. Rights and priorities are given the order of (1) Qualified Nonprofits and (2) the City, as described in Paragraphs D(5) and D(6).

3. Notice of Intent to Sell. The Owner under this Paragraph C is required to provide all Potential Eligible Purchasers with a Notice of Intent to Sell.

4. Statement of Interest. All Potential Eligible Purchasers as specified in Paragraph C(2) are allowed to submit a Statement of Interest.

5. Right of First Offer.
a. In the event that any Qualified Nonprofit submits a Statement of Interest in response to the Notice of Intent to Sell, said statement(s) shall be given priority over any statement submitted by the City. b. In the event that no Qualified Nonprofit submits a Statement of Interest, any Statement of Interest submitted by the City shall be considered, and the City may proceed to the Right of First Offer process.

6. Right of First Refusal.

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Packet Pg. 150 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 13 a. In the event that the Owner rejects the offer(s) submitted by all Potential Eligible Purchasers and receives a Third-Party Purchaser Bona Fide Offer to Purchase, the Owner must notify all the Potential Eligible Purchasers, who timely submitted a Statement of Interest and an offer, as defined herein in Paragraph (C)(2) and give priority in the order described.
b. In the event that the Qualified Nonprofits do not submit a match to the Bona Fide Offer to Purchase, the City’s match will stand.

14.26.080 Notice of Intent to Sell; Statement of Interest A. Notice of Intent to Sell. An Owner of a Non-Exempt Residential Property shall provide all Potential Eligible Purchasers notice of their intent to sell prior to listing or marketing a Residential Property for sale (“Notice of Intent to Sell”). The Notice of Intent to Sell shall be provided at least thirty (30) days before listing or marketing the Residential Property (“Notice Period”). The Notice of Intent to Sell shall be sent to each Potential Eligible Purchaser as set forth in the Administrative Guidelines, and shall include the following:

1. A statement that the Owner intends to sell the Residential Property.

2. A statement describing the rights of Potential Eligible Purchasers under this Chapter and stating the deadlines for exercising those rights.

3. Instructions for submitting a Statement of Interest pursuant to Paragraph B of this Section.

B. Statement of Interest. Within fifteen (15) days of receiving the Owner’s Notice of Intent to Sell, a Potential Eligible Purchaser shall notify the Owner, at the email address provided by the Owner in the Notice of Intent to Sell, of the Potential Eligible Purchaser’s intent to submit a Statement of Interest, in order to be eligible to submit a Statement of Interest. Prior to the expiration of the Notice Period set forth in Paragraph A of this Section, any Potential Eligible Purchaser defined in Section

14.26.070 may deliver a Statement of Interest to the Owner of the Residential Property (“Statement of Interest”). The Statement of Interest shall notify the Owner of the Potential Eligible Purchaser’s interest in exercising the Right of First Offer and/or Right of First Refusal under this Chapter.

C. Disclosure Package. Within five (5) days of receiving a Statement of Interest, the Owner must provide a disclosure package that includes documents and information set forth in the Administrative Guidelines, and at minimum, an itemized

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Packet Pg. 151 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 14 list of annual income and expenses, including but not limited to rent and other income collected, and costs of management, insurance, utilities, maintenance, and repairs.

D. Effect of Statement of Interest. Receipt of a timely Statement of Interest and disclosure package shall extend the Notice Period by thirty (30) days for Single Family Dwellings; sixty (60) days for two or three (2-3) unit Multi-Family Dwellings; and ninety (90) days for four or more (4+) unit Multi-Family Dwellings. During this extended Notice Period, Potential Eligible Purchasers may submit an offer to purchase the property pursuant to Section 14.26.090.

E. Prohibition on Listing or Marketing Property During Notice Period. The Owner of a Residential Property shall be prohibited from listing or marketing the Residential Property for sale prior to the expiration of the Notice Period.

14.26.090 Right of First Offer
A. Right of First Offer. A Potential Eligible Purchaser that submits a Statement of Interest shall have the right to make an offer to purchase a Residential Property prior to the listing or marketing of the Residential Property (“Right of First Offer”). The Potential Eligible Purchaser may deliver to the Owner of the Residential Property an offer to purchase the property at any time prior to the expiration of the Notice Period set forth in Section 14.26.080.E. The Owner may accept or reject any offer to purchase received from a Potential Eligible Purchaser following the steps set forth in Section 14.26.070.

B. Acceptance of Offer to Purchase. Upon acceptance of an offer to purchase a Residential Property made pursuant to Paragraph A of this Section, the Potential Eligible Purchaser shall make reasonable and good faith efforts to close the transaction. A Potential Eligible Purchaser shall have thirty (30) days to close the transaction for the sale of a Single-Family Dwelling. A Qualified Nonprofit and/or the City shall have ninety (90) days to close the transaction for the sale of a two to three (2-3) unit Multi-Family Dwelling; and one hundred and twenty (120) days to close the transaction for the sale of a four or more (4+) unit Multi-Family Dwelling. The deadline to close a transaction for the sale of a Single-Family Dwelling shall be extended for an additional 60 days if the Potential Eligible Purchaser provides written documentation that its lender will require a commercial loan for the purchase of the property (for a total of 90 days to close). Nothing in this Paragraph shall prevent the Owner and the Potential Eligible Purchaser from agreeing to further extend the deadline to close the transaction.

C. Termination of Right of First Offer. Upon (1) rejection of all offers to purchase made within the Notice Period, or (2) the expiration of the Notice Period, the Owner may list and market for sale the Residential Property and may solicit and conditionally accept offers from a Third-Party Purchaser, subject to the requirements

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Packet Pg. 152 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 15 of Section 14.26.100.

14.26.100 Right of First Refusal
A. Disclosure of Offer to Purchase. An Owner that takes any action to accept an Bona Fide Offer to Purchase from a Third-Party Purchaser shall disclose that offer to any Potential Eligible Purchaser that has submitted a Statement of Interest and an offer within 15% of the offer received by the Owner from the Third Party Purchaser, and shall provide said Potential Eligible Purchaser a Right of First Refusal pursuant to the requirements of this Chapter (“Right of First Refusal”). Within two (2) days of receipt of a Third-Party Purchaser Bona Fide Offer to Purchase, the Owner shall disclose to each Potential Eligible Purchaser that submits a Statement of Interest and an offer all material terms of any Bona Fide Offer to Purchase of the Residential Property, together with all commercially reasonable disclosures, in substantially the same form and having substantially the same content as would be provided to any prospective Third-Party Purchaser. Any written offer received by the Owner shall be provided to said Potential Eligible Purchasers who have submitted a Statement of Interest and an offer; provided, however, that any confidential information not necessary to comply with the requirements of this Paragraph shall be redacted from such offers.

B. Right of First Refusal. Any Potential Eligible Purchaser that submits a Statement of Interest and an offer may exercise a Right of First Refusal and accept the Bona Fide Offer to Purchase of the Residential Property within the time period set forth in Paragraph C of this Section. To exercise its Right of First Refusal, the Potential Eligible Purchaser must accept all material terms of the Offer to Purchase except for the time to close as described in Paragraph D of this Section and the deposit amount as described in Section 14.26.110.E; provided, however, the financing of the Potential Eligible Purchaser’s purchase shall not be considered a material term of the Offer to Purchase so long as it does not affect the net value of the Sale to the Owner.

C. Time to Exercise Right of First Refusal. The Owner shall provide any Potential Eligible Purchaser that submits a Statement of Interest and an offer at least five (5) days to accept the Offer to Purchase for a Single-Family Dwelling, or at least twenty (20) days to accept the Offer to Purchase of a two or more (2+) unit MultiFamily Dwelling. The acceptance of an Offer to Purchase by any Potential Eligible Purchaser extinguishes any Right of First Refusal of other Potential Eligible Purchasers.

D. Time to Close. Upon acceptance of the Offer to Purchase, the Potential Eligible Purchaser shall have at least thirty (30) days to close the transaction for the

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Packet Pg. 153 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 16 sale of a Single-Family Dwelling, or a total of ninety (90) days if the Potential Eligible Purchaser is a Qualified Nonprofit and/or the City and provides written documentation that its lender will require a commercial loan for the purchase of the property; at least ninety (90) days to close the transaction for the sale of a two or three (2-3) unit Multi-Family Dwelling; and one hundred and twenty (120) days to close the transaction for the sale of a four or more (4+) unit Multi-Family Dwelling.

Nothing in this Paragraph shall prevent the Owner and the Potential Eligible Purchaser from agreeing to further extend the deadline to close the transaction.

E. Rejection of Offer or Failure to Close. If each Potential Eligible Purchaser entitled to receive an Offer to Purchase rejects or fails to accept such Offer to Purchase within the time set forth in Paragraph C of this Section or if a Potential Eligible Purchaser that accepts an Offer to Purchase fails to close the transaction within the time set forth in Paragraph D of this Section, the Owner may immediately proceed with the sale or transfer of the Residential Property to a Third-Party Purchaser.

F. Notwithstanding any other provision of this section, conditional sales agreements between an Owner and a Third-Party Purchaser are permitted so long as the agreement is subject to the contingency that no Potential Eligible Purchaser exercises a Right of First Refusal conferred by this Chapter.

14.26.110 Contract Negotiation
A. Bargaining in Good Faith. The Potential Eligible Purchaser and Owner shall bargain in good faith. The following constitute prima facie evidence of bargaining without good faith:

1. The failure of an Owner to offer the Potential Eligible Purchaser a price or term at least as favorable as that offered to a third party, without a reasonable justification for so doing;

2. The failure of an Owner to make a contract with the Potential Eligible Purchaser which substantially conforms with the price and terms of a thirdparty contract within the time periods specified in this Chapter, without a reasonable justification for so doing; or

3. The intentional failure of a Potential Eligible Purchaser or an Owner to comply with the provisions of this Chapter.

B. Reduced Price. If the Owner sells or contracts to sell the Residential Property to a Third-Party Purchaser for a price more than fifteen percent (15%) less than the price

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Packet Pg. 154 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 17 offered to the Potential Eligible Purchaser or for other terms which would constitute bargaining without good faith, the sale or contract is void and the Owner shall comply anew with all requirements of this Chapter as applicable.

C. Financial Assurances. The Owner may not require the Potential Eligible Purchaser to prove financial ability to perform as a prerequisite to entering into a contract. The Owner may not require the Potential Eligible Purchaser to pay the purchase price in installments unless the Owner provides deferred purchase money financing on terms reasonably acceptable to the Potential Eligible Purchaser. The Owner may require the Potential Eligible Purchaser to prove that the Potential Eligible Purchaser, either alone or in conjunction with a third party, has comparable financial ability to the Third-Party Purchaser before the Owner will be required to grant deferred purchase money financing to the Potential Eligible Purchaser on the same terms and conditions agreed between the Owner and the Third-Party Purchaser. If the Potential Eligible Purchase can prove comparable financial ability alone, the Owner may not require the Potential Eligible Purchaser to secure a third-party guarantor. This proof cannot be required as a prerequisite to contracting. It may be required only as a prerequisite to the Owner granting deferred purchase money financing at settlement.

D. Transfers of Interest in a Partnership or Corporation and Master Leases. In the event of a transfer of interest in a partnership or corporation or in the event of a master lease or agreement that is considered a sale but which does not involve a transfer of record title to the real property, the Owner shall be bargaining in good faith if the Owner offers the Potential Eligible Purchaser the opportunity to acquire record title to the real property or offers the Potential Eligible Purchaser the opportunity to match the type of transfer or agreement entered into with the third party. With respect to either type of offer, all provisions of this Chapter apply.

E. Deposit. The Owner shall not require the Potential Eligible Purchaser to pay a deposit of more than three percent (3%) of the contract sales price to make a contract.

The deposit is refundable in the event of a good faith failure of the Potential Eligible Purchaser to perform under the contract unless otherwise provided in the contract.

14.26.120 Long-Term Affordability and Tenant Relocation Assistance in Properties Purchased Under this Chapter
A. For Qualified Nonprofits, City, and Subsidized Purchaser(s)

1. All Residential Properties purchased under this Chapter, except for SingleFamily Dwellings purchased with no subsidy, shall be subject to rental affordability restrictions and restrictions on the resale value of a given property as defined in this subsection.

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Packet Pg. 155 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 18 2. In exchange for the rights conferred under this Chapter, Subsidized Purchasers shall sign and submit an initial Statement of Rights and Obligations, available on the City website, agreeing to maintain the Residential Property as permanently affordable and be bound to this effect.

This Statement of Rights and Obligations shall be submitted at the same time as the Statement of Interest as specified in subsection 14.26.080.B.

B. Rental Units. If the average rental rate of the units, which shall be based on the existing tenancies of the non-purchasing Tenants in the properties upon purchase, exceeds a rent affordable to 50% AMI households, the new Owner shall rent each vacant unit to 50% AMI income households until the 50% AMI rental rate average is achieved.

Future rental rates of any vacant units shall not exceed a rent affordable to Low-Income Households.

C. Ownership Units. The sales price shall be calculated based on Chapter 18.37 of the East Palo Alto Municipal Code and the inclusionary housing guidelines. The sales price for any vacant units shall be set at an affordable price to Median Income Households and to Moderate Income Households, with the first vacant unit restricted to Median Income Households. The resale or transfer of ownership units shall be subject to long-term affordability covenants consistent with Chapter 18.37.100 of the East Palo Alto Municipal Code.

D. Permanent affordability standards shall remain in force for 99 years and are renewed at year 100. This shall be evidenced by one of the following:

1. A restrictive covenant placed on the deed to the Residential Property that runs with the land and is enforceable by the City against the purchasers and their successors;

2. A Community Land Trust lease, which is a 99-year renewable land lease with affordability and Owner-occupancy restrictions; or

3. Affordability covenants in land leases or other recorded documents not specifically listed in this subsection, which run with the land and are enforceable.

E. The sale of a Residential Property pursuant to this Chapter shall not impair the rights of any Tenant under Chapter 14.04 of the East Palo Alto Municipal Code or any other applicable state law or local ordinance. Further, any Tenant who resides in any unit at the time of the sale of a Residential Property under this Chapter shall not be subject to eviction based on their failure to meet income restrictions or other eligibility requirements imposed by this Section.

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Packet Pg. 156 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 19 F. All covenants created in accordance with this section shall be recorded with the San Mateo County’s Recorders Office.

G. Required Filing to Certify Compliance with Affordability Restrictions. In the case that permanent affordability restrictions materialize as a covenant enforceable by the City, the Owner(s) of the Residential Property shall file a document every three (3) years with the City in which the Owner(s) affirmatively state the rents for each unit in the Residential Property.

14.26.130 Prohibited Conduct
A. The sale or transfer of any Residential Property subject to this Chapter and not exempt pursuant to Section 14.26.040 is prohibited unless the Owner complies with Section 14.26.040.C. Any change of Ownership of real property as defined in Revenue & Taxation Code § 64(c) shall be considered a sale or transfer of Real Property for purposes of this Chapter.

B. A Tenant or Potential Eligible Purchaser shall not sell any right afforded to them under this Chapter or sell a waiver of any such right.

C. An Owner shall not (1) coerce a Potential Eligible Purchaser to waive their rights under this Chapter; (2) retaliate against or harass a Tenant seeking to exercise their rights under this Chapter; or (3) engage in conduct intended to prevent a Tenant from exercising their rights under this Chapter.

D. Any agreement between the Owner and a Potential Eligible Purchaser to shorten the time periods provided for exercise of any right afforded under this Chapter is prohibited unless all other Potential Eligible Purchasers have waived their rights under this Chapter. Notwithstanding the foregoing, any Potential Eligible Purchaser may affirmatively indicate that they have no interest in a Residential Property prior to the expiration of any deadlines and in accordance with the Administrative Guidelines.

Nothing in this Paragraph shall prohibit an agreement to extend the deadlines set forth herein.

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Packet Pg. 157 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 20 14.26.140 Confidentiality
Any information exchanged between an Owner(s) and Potential Eligible Purchasers under this Chapter that is intended to facilitate the sale of property including, but not limited to, disclosures, any intent to sell, and terms and conditions of an offer of sale, shall be kept confidential to the greatest extent permitted by law. This Section shall not prohibit disclosure of information necessary to effectuate the purpose of this Chapter to any Owner, Tenant, or Qualified Organization, or to the City of East Palo Alto or its agents or contractors, nor shall this Chapter be construed to limit disclosure of information in response to a lawfully issued subpoena or court order.

14.26.150 Enforcement
A. Owner Certification. By no later than thirty (30) days after any Sale, the Owner(s) shall record with the San Mateo County’s Recorder's Office, through the escrow company that facilitates the sale of the property, a signed declaration, under penalty of perjury, affirming that the Sale of that Property substantially complied with the requirements of this Chapter and will also instruct the escrow company to file a copy of the Owner Certification with the City. The City will publish all such addresses on its website.

B. The City Attorney, any non-exempt Owner subject to the provisions of this Chapter, and/or any Potential Eligible Purchaser may bring a civil action to enforce this Chapter and shall be entitled to the remedies set forth in this section to the greatest extent permitted by law.

C. A prevailing party in any action to enforce this Chapter shall be entitled to civil damages and damages according to proof and reasonable attorneys’ fees and costs. Any court of competent jurisdiction may enforce the affordability requirements of this Chapter, when applicable. Any court of competent jurisdiction may enjoin a transfer or sale of Property, or rescind a sale of Property, where the Owner failed to comply with requirements of this Chapter, and may order that an Owner comply with the requirements of this Chapter. Civil damages may include:

1. Any violation of the requirements of this Chapter shall be subject to a civil penalty not to exceed $1,000 per day of violation. Each failure to provide the required notice or disclosure under this Chapter shall be considered a separate violation for each unit on a Property.

2. If the Owner’s violation was knowing or willful, mandatory civil penalties equal to ten percent (10%) of the sale price for a first violation; twenty percent (20%) for the second, and thirty percent (30%) for each thereafter.

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Packet Pg. 158 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 21 D. Suspension or Disqualification of Qualified Nonprofits. The City shall promptly investigate any complaint alleging that a Qualified Nonprofit has failed to comply with Section 14.26.150 of this Chapter. If, after providing the Qualified Nonprofit with notice and opportunity to be heard, the City determines that a Qualified Nonprofit has failed to comply with this Chapter, the City may suspend or revoke a Qualified Nonprofit’s certification.

14.26.160 Financial Assistance
A. For the consideration and approval of the City Council, the City Manager or designee shall develop guidelines for providing financial assistance to allow for the acquisition of Residential Property pursuant to this Chapter. Financial assistance may be provided to Potential Eligible Purchasers. Nothing in this provision commits the City Council to providing a specified level of funding for the acquisition of Residential Property under this Chapter.

B. The provision of financial assistance under Paragraph A of this Section to any Tenant who acquires an interest in a Residential Property pursuant to this Chapter must be conditioned on the Tenant’s agreement to reside at the Residential Property for at least three (3) years. The City Manager or designee is authorized to impose a lien on said Residential Property to enforce the requirements of this Section.

14.26.170 Implementation
A. The City Council shall adopt Administrative Guidelines necessary to implement the requirements of this Chapter and may adopt additional rules and guidelines for purposes of administering this Chapter. The provision of Sections

14.26.010 through 14.26.160 shall take effect ninety (90) days after the City Council adopts Administrative Guidelines. Thereafter, the City Council may delegate to the City Manager the authority to amend the Administrative Guidelines as needed.

B. The City shall annually post and update the City’s website with information on the East Palo Alto Opportunity to Purchase Act process, including information about sales and rights under this Chapter.

C. The City Manager or designee shall develop all online and printed forms and databases Qualified Nonprofit list and registry, and other administrative services to ensure efficient management of the program.

SECTION 3. CALIFORNIA ENVIRONMENTAL QUALITY ACT

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Packet Pg. 159 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 22 This Ordinance is not subject to CEQA because it is not a “project” which would have a direct physical change or a reasonably foreseeable indirect physical change on the environment pursuant to California Environmental Quality Act ("CEQA") Guidelines section 15378. Even if it were a project subject to CEQA review, this project would be exempt from CEQA Guideline Section 15378 (regulatory actions), Section 15061(b)(3) (no significant environmental impact), and Section 15183 (actions consistent with the general plan and zoning).

SECTION 4. SEVERABILITY.

If any section, subsection, sentence, clause, phrase, or word of this Ordinance is for any reason held to be invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed and adopted this Ordinance, and each and all provisions hereof, irrespective of the fact that one or more provisions may be declared invalid.

SECTION 5. EFFECTIVE DATE.

This Ordinance shall take effect and be in full force thirty (30) days after the date of its adoption. However, the requirements of this Ordinance shall not be enforced until July 1, 2022.

SECTION 6. PUBLICATION.

The City Clerk is hereby directed to cause publication of this Ordinance as required by Government Code Section 36933.

This Ordinance was introduced at the______________ meeting of the City Council of the City of East Palo Alto.

PASSED AND ADOPTED this _____ day of ______________, 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

______________________________

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Packet Pg. 160 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) 23 Ruben Abrica, Mayor
ATTEST: APPROVED AS TO FORM:
___________________________ _______________________________ City Clerk Rafael E. Alvarado Jr., City Attorney

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Packet Pg. 161 Attachment: Ordinance (2076 : East Palo Alto Opportunity to Purchase Act) January 14, 2022
Via email
To: Patrick Heisinger, Rachel Horst
From: Nora Lake-Brown, David Rosen
Subject: Research Regarding Potential Effects of TOPA
This memorandum summarizes the information and analysis conducted by DRA related to the potential economic effects of an Opportunity to Purchase (OPA) ordinance on the housing market and property tax base in the City of East Palo Alto. The purpose of the review is to inform the City Council on potential fiscal and economic effects of OPA on the City.

Summary of Findings and Conclusions
• Single-family home prices, rents and the price of rental units in East Palo Alto are established by housing supply and demand within the regional housing market.

Housing demand is strong in many areas of the country, across California, and especially in the Bay Area where rising home prices are spurred on by the continued growth of the Silicon Valley economy.
• The supply of new housing in the Bay Area has not kept pace with demand, and these forces are expected to continue into the near future. EPA’s proposed OPA must be viewed in the context of these forces. The ordinance does not limit sales prices on single-family homes or any unit. If the home’s tenants are not able to complete a purchase at market price within a set time frame, the home may be sold to any buyer.
• The OPA affects a small proportion of single-family homes in EPA. Buyers will clearly identify those home sales that are covered by the ordinance and those that are not, just like they identify school districts, transit, and other factors influencing their decision to buy. High market demand makes the market very efficient in adjusting to regulatory changes. The OPA should have no effect on prices for home sales not covered by the ordinance. Since price is not limited, DRA also believes the ordinance will have no effect on sales prices for units covered by the ordinance. Changes in interest rates, employment, wages, buyer demand and supply of homes for sale—all factors beyond the control of any city—are the key determinants of market price.

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Packet Pg. 162 Attachment: David Rosen & Associates EPA OPA Analysis (2076 : East Palo Alto Opportunity to Purchase Act) Patrick Heisinger, Rachel Horst
January 14, 2022

Page 2 of 13 ends

• DRA’s “worst case” estimate of the loss in property tax assessment in the City from the purchase of absentee-owned homes and condos by nonprofits under OPA over the next five years is $67 million, or approximately 1.8% of the City’s total assessed valuation of $3.7 billion. This worst-case scenario is highly unlikely because:
o It assumes all absentee-owned homes sold in the next five years are purchased by non-profits and receive a total exemption of property taxes as affordable rental units. Creation of affordable ownership units will result in these units being assessed at affordable prices rather than market prices, resulting in a reduction but not total elimination in the property taxes generated by these units.
o The subsidy required to cover the “gap” between market home price and affordable home prices will be large and few funds are available for such purchases. DRA estimates the total subsidy required to purchase and make affordable at 80% AMI or below all absentee-owned single-family dwellings and condos sold over the next five years at $97 M to create owner housing and $115 M to create renter housing. Lowering the income targeting to 50% AMI increases the subsidy required to $131 M to create affordable owner housing and $145 M to create affordable renter housing. o Subsidizing units purchased under OPA is not an allowable or competitive activity for any of the more than $23 billion in funding sources available for homeless and affordable housing in California in 2022 reviewed by DRA for this assignment. This will limit the number of these purchases and minimize the effect on the City’s tax base. Subsidizing absentee-owned units purchased under OPA will require identification of new local government or foundation funding sources. DRA estimates a realistic number of units to be purchased by nonprofits and subsidized at no more than 2 to 3 units per year.

1. Residential Market Context

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Packet Pg. 163 Attachment: David Rosen & Associates EPA OPA Analysis (2076 : East Palo Alto Opportunity to Purchase Act) Patrick Heisinger, Rachel Horst
January 14, 2022

Page 3 of 13 ends

On a national level, the US has been experiencing high housing price growth, which is expected to continue in the years to come. According to Freddie Mac in July 21:

High house price growth has been supported by increased demand due to low mortgage rates, disposable after-tax income that has risen during the current recession and a major shortage of housing supply relative to our population. The increase in house price growth will be less transitory than the increase in consumer prices, as the U.S. housing market will continue to struggle with a shortage of available housing for many months to come. 1
Housing price appreciation has been even more pronounced in California and particularly the Bay Area due to the growth of the technology economy following the Great Recession and further spurred on by the COVID-19 pandemic.

Table 1 shows the growth in the median single-family home price in East Palo Alto and selected Counties since the recovery began in 2012.

Table 1
Appreciation in Single-Family Median Home Prices for Existing Homes East Palo Alto, Selected Bay Area Counties and California 2012 to 2021
Dec. 2012 Dec. 2020 Nov. 2021
Percent Increase
2012 to
2020
2020 to
2021
2012 to
2021
East Palo Alto $285,000 $938,000 $1,030,000 229% 10% 261% San Mateo County $775,000 $1,700,000 $2,222,500 119% 31% 187% Santa Clara County $681,000 $1,375,000 $1,692,500 102% 23% 149% San Francisco County $864,795 $1,581,000 $1,900,000 83% 20% 120% California $365,840 $717,930 $782,490 96% 9% 114%
Sources: Compass Bay Area Market Reports (East Palo Alto); California Association of Realtors (counties, California
1 http://www.freddiemac.com/research/forecast/20210715_quarterly_economic_forecast.page

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We are currently in a rising interest rate environment, which factors into the demand and supply of housing equation by influencing the cost of money, financing, and financing proceeds. For investors who are paying all cash, interest rates are immaterial. In fact, in a rising rate environment, all cash buyers are even more advantaged against first time homebuyers who are buying for themselves as owner occupants.

2. Potential Loss in Assessed Valuation from Absentee-Owned Units Purchased by Nonprofit Housing Corporations
DRA evaluated the potential loss in the City’s assessed property valuation associated with the purchase of absentee-owned single-family homes and condominiums by nonprofit housing corporations pursuant to the OPA.

2.1. Purchase of a single-family home by a non-profit housing corporation does not necessarily mean the City will lose the full amount of property tax revenues it receives from that home.
 Affordable rental units owned by qualifying nonprofit organizations and restricted to low income households with incomes at or below 80% of area median income (AMI) are eligible for a property tax exemption2.
 Affordable owner units sold by nonprofit corporations and restricted for at least 30 years as affordable to low income households at 80% of AMI or below are eligible for a property tax assessment that takes the affordability restrictions into consideration3. This means the property is assessed at the affordable home sales price rather than market value. DRA calculated affordable home prices by 2021 income level, which are summarized in Table 2 for single-family homes and Table 3 for condominiums. Detailed assumptions for this calculation are 2 https://www.boe.ca.gov/proptaxes/pdf/pub149.pdf
3 https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=402.1

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contained in Appendix Table A-1 for single-family homes, and Table A-2 for condominiums.
 Special assessments will continue to be paid on all units, regardless of assessed value or exemption status.

Table 2
Affordable Home Prices by Income Level and Unit Bedroom Count Single-Family Homes
City of East Palo Alto
2021
50% AMI 80% AMI 120% AMI
1 Bedroom $207,600 $380,100 $610,200
2 Bedroom $234,500 $428,700 $687,500
3 Bedroom $261,300 $476,900 $764,500
4 Bedroom $280,500 $513,400 $824,000
5 Bedroom $299,400 $549,600 $883,100
Source: DRA.

Table 3
Affordable Home Prices by Income Level and Unit Bedroom Count Condominiums
City of East Palo Alto
2021
50% AMI 80% AMI 120% AMI
1 Bedroom $150,900 $323,400 $553,600
2 Bedroom $179,900 $374,100 $632,900
3 Bedroom $208,100 $423,700 $711,300
Source: DRA.

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2.2 DRA estimates a potential “worst case” loss of assessed value over 5 years of $67 million, representing only 1.8% of the City’s total assessed valuation.

DRA’s estimates are based on the following assumptions and data:
• An average of 28 absentee-owned single-family homes and 4 absentee-owned condos sold per year, which equals the average sales rate for all absentee-owned single-family homes and condos in the City between 2017 and 2021 based on analysis of parcel-specific data from Property Radar. This is an increase from the rate of 8 absentee-owned homes and 4 condos sold per year during the 2007 to 2011 period.

Using total absentee-owned units overestimates the result because non-owner occupied units owned by East Palo Alto residents are exempt from the OPA.
• The weighted average assessed values for absentee-owned singlefamily homes and condos in East Palo Alto in December 2021 of approximately $408,000 and $504,000, respectively, are derived from Property Radar data. The average assessed value by unit bedroom count is summarized for single-family homes in Table 4.

Table 4
Average Assessed Value of Absentee-Owned Single-Family Homes1 City of East Palo Alto
December 1, 2021
Total Assessed
Value No. of Units
Average
Assessed Value
1 Bedroom $3,974,848 6 $662,475
2 Bedroom $14,428,751 54 $267,199
3 Bedroom $35,337,100 99 $356,940
4 Bedroom $22,664,495 35 $647,557
5 Bedroom $7,868,800 13 $605,292
6 Bedroom $908,147 2 $454,074
Weighted Ave. -- -- $408,000

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1 Excludes single-family homes Property Radar identifies units as “owner-occupied.” Sources: Property Radar; City of East Palo Alto; DRA.
• Assuming 100% of the absentee-owned homes are sold to nonprofits and are paying no property taxes as qualifying low-income rental units.

This worst case scenario is highly unlikely because:
o
o There are insufficient capital subsidies available to assist nonprofits to purchase all of the absentee-owned homes coming on the market, as discussed further in Section 3.
o Homes purchased by nonprofits and resold as affordable ownership units would not be exempt from property taxes but would pay property taxes based on affordable sales prices.

2.3 The increase in assessed valuation in the City from the resale of existing owner-occupied units is estimated at $183 million over the next five years, vastly outweighing the potential loss of assessed value from absentee-owned units.

DRA estimates the increase in assessed valuation from the resale of existing owner-occupied single-family homes and condos as follows:
• An average of 53 owner-occupied single-family homes and 9 owneroccupied condos sold per year, which equals the average sales rate for owner-occupied single-family homes and condos in the City between 2017 and 2021 based on analysis of parcel-specific data from Property Radar.
• The weighted average assessed values for owner-occupied singlefamily homes and condos in East Palo Alto in December 2021 of approximately $451,000 and $575,000, respectively, derived from Property Radar data.

2.4 In addition, DRA estimates that assessed valuation in the City will increase by another $560 million to $800 million over the next five years

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(approximately) as the existing pipeline of market-rate housing is built out.

This estimate is based on the following assumptions:
• Approximately 800 market-rate units in the City’s development pipeline;
• Average assessed valuation ranging from $700,000 to $1,000,000 per unit, based on 2021 average sales prices for existing condominiums and single-family homes in East Palo Alto. These assumed prices underestimate the actual increase in value as average new home prices are expected to be well above existing home sales prices.

3. Capital Subsidy Resources Necessary for Nonprofits to Purchase Single-Family Homes
Substantial capital resources will be required for nonprofit housing corporations to purchase existing absentee-owned single-family homes and/or condos for the purposes of creating affordable rental or owner units. Under the OPA, nonprofits will be required to pay market rate prices. DRA calculated subsidy requirements using an “affordability gap” methodology which compares the amount households at various income levels can pay for housing and the estimated cost of purchasing absentee-owned single-family homes at market prices under the OPA.

3.1. DRA estimates the five-year capital subsidy required to purchase and subsidize absentee-owned single-family homes and condos to create affordable owner or renter housing as follows4
:
50% AMI 80% AMI 120% AMI
Owner $131 M $97 M $52 M
Renter $145 M $115 M $65 M
4 Assumes all units are converted to affordable owner or renter units at the target income level.

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These estimates are based on the following assumptions:
• An average of 28 absentee-owned single-family homes and 4 absentee-owned condos sold per year, equal to the average sales rate for absentee-owned single-family homes in the City between 2017 and 2021.
• DRA calculated per unit affordable home prices (as described in Section

2.1 above) and renter supportable mortgages by income level and unit bedroom count. DRA then calculated a weighted average affordable home price and renter supportable mortgage by income level using the distribution of absentee-owned homes by unit bedroom count shown above in Table 4. Detailed assumptions for the calculation of affordable single-family and condo home prices and supportable rental mortgages by income levels are shown in Appendix Tables A-1, A-2, A-3 and A-4. • The weighted average owner and renter per unit affordability gaps to purchase and “buy down” the affordability of these units by income level and tenure are shown in Table 5.
• An average market purchase price of $1,106,000 for single-family homes and $783,000 for condos based on the average sales prices for resale of existing units in East Palo Alto during 2021 from Property Radar.

Table 5
Weighted Average Per Unit Affordability Gaps by Income Level City of East Palo Alto
2021
Very Low
Income
50% AMI
Low Income
80% AMI
Moderate
Income
120%
SFD Owner $847,700 $633,500 $348,300
Condo Owner $613,000 $427,000 $178,000
Renter $905,700 $721,700 $411,700

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3.2. Traditional sources of funding for affordable housing may not be used to subsidize units purchased under the TOPA. This will materially limit the number of sales to nonprofit housing corporations.
• California has an unprecedented level of funding available to tackle the problem of homelessness and lack of affordable housing in the State. • The State Department of Housing and Community Development (HCD) has approximately $1.2 billion in funding remaining under Proposition 1, which authorized $4 billion in general obligation (GO) bonds for housing in 2018. This amount includes funding for the programs listed below, but excludes the Affordable Housing and Sustainable Communities program, which receives ongoing funding subject to Cap and Trade Auction Revenues. None of these funds may be used for OPA homes.

Multifamily Housing Program $394 M
Veterans Housing and Homelessness Prevention Program (VHHP) $129 M Infill Infrastructure Grants (IIG) $124 M
Serna Farmworker Housing Program $96 M
No Place Like Home $496 M
• The California State Budget includes more than $22 billion in funds for housing and homelessness over the next two years. Funding for FY 2021-2022 includes the following programs, which also may not be used to purchase TOPA homes:

Local Homelessness Programs $1.0 B
Dept. of Social Services Homelessness Programs $2.0 B
Rental Assistance (Payment of Overdue Rent) $5.2 B
HCD Pipeline Projects $1.75 B
Project HomeKey $1.45 B
Affordable Housing Preservation $500 M
Infill Infrastructure Grant $300 M
• The California Tax Credit Allocation Committee (CTCAC) awarded more than $511 M in 9% and 4% Low Income Housing Tax Credits to projects in California in 2020. LIHTC’s also are not available for OPA homes. • The purchase and subsidization of units by nonprofits under the OPA does not qualify for the any of the above funding sources and would

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require identification of new local government and/or foundation resources.

4. 1031 Exchanges
Under Section 1031 of the United States Internal Revenue Code, a taxpayer may defer recognition of capital gains and related federal income tax liability on the exchange of certain types of real property through a process known as a 1031 exchange.5

4.1 1031 Exchanges only apply to sale of an investment property and replacement purchase of another like-kind investment property of equal or greater value (e.g. sale of one rental property and purchase of another rental property).

4.2 1031 Exchange time limits are measured from when the property to be sold (“relinquished property”) closes. Therefore, sale of a property by an East Palo Alto resident under a 1031 Exchange will not be affected by OPA timelines unless they also are purchasing a replacement investment property in East Palo Alto.

4.3 For East Palo Alto residents selling one investment property and purchasing another investment property in East Palo Alto, the OPA timeline is adequate to complete a 1031 Exchange.
• Measured from when the relinquished property closes, the Exchangor has 45 days to nominate (identify) potential replacement properties and a total of 180 days (including the 45-day nominating period) to acquire the replacement property. The 97-day to 127-day time limits proposed for OPA fits within this 180-day time frame.
5 See https://www.law.cornell.edu/uscode/text/26/1031

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4.3 1031 Exchanges comprise a small percentage (less than 5%) of residential transactions nationally.
• According to a 2020 study by the National Association of Realtors, among residential NAR members, 1031 Exchanges comprised an average of less than 5% of sales transactions, with half of members reporting no such transactions.

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Appendix Tables

7.1.b
Packet Pg. 174 Attachment: David Rosen & Associates EPA OPA Analysis (2076 : East Palo Alto Opportunity to Purchase Act) Table A-1
Affordable Home Sales Price Calculations, Owner Housing Single-Family Homes
City of East Palo Alto
2021
Assumptions
2021 HUD Median Household Income, San Mateo County $149,600 2021 HUD VLI Limit, Household Size of Four $91,350
2021 HUD Effective Median Income, HH Size of Four $182,700 Used in Calculations $182,700
Affordable Housing Expense As a % of Income 30%
No. of Bedrooms Studio 1 Bedroom 2 Bedroom 3 Bedroom
Household Size 1 Persons 2 Persons 3 Persons 4 Persons
Household Size Income Adjust. Factor 70% 80% 90% 100%
Owner-Paid Utility Allowance (1) $188 $208 $265 $324
Monthly HOA Fee/Maint. Cost $200
Monthly Property Insurance $100
Property Tax Rate (% of AV) 1.00%
Mortgage Interest Rate 5.50%
Term (Years) 30
Downpayment (% of Sales Price) 10.00%
Per Unit Affordable Sales Price by Unit Bedroom Count
Studio 1 Bedroom 2 Bedroom 3 Bedroom
50% AMI
Annual Income Limit $63,945 $73,080 $82,215 $91,350
Affordable Monthly Housing Expense $1,599 $1,827 $2,055 $2,284 Less: Monthly Utility Allowance ($188) ($208) ($265) ($324) Less: HOA/Maintenance Expense ($200) ($200) ($200) ($200) Less: Property Insurance ($100) ($100) ($100) ($100)
________ ________ ________ ________
Available for Principal, Interest, Taxes $1,111 $1,319 $1,490 $1,660 Less: Property Taxes 1.20% $217 $258 $292 $325
Supportable Mortgage Before Prop. Taxes $195,671 $232,305 $262,421 $292,362 Assumed Assessed Value at Sale 90.00% $217,413 $258,116 $291,579 $324,847 Available for Mortg. Principal and Interest $894 $1,061 $1,198 $1,335 Supportable Mortgage $157,380 $186,845 $211,068 $235,150 Plus: Downpayment @ 10.00% $17,490 $20,760 $23,450 $26,130 Affordable Sales Price (Rounded) $174,900 $207,600 $234,500 $261,300 80% AMI
Annual Gross Income $102,312 $116,928 $131,544 $146,160 Affordable Monthly Housing Expense $2,558 $2,923 $3,289 $3,654 Less: Monthly Utility Allowance ($188) ($208) ($265) ($324) Less: HOA/Maintenance Expense ($200) ($200) ($200) ($200) Less: Property Insurance ($100) ($100) ($100) ($100)
________ ________ ________ ________
Available for Principal, Interest, Taxes $2,070 $2,415 $2,724 $3,030 Less: Property Taxes 1.20% $405 $473 $533 $593
Supportable Mortgage Before Prop. Taxes $364,572 $425,334 $479,756 $533,649 Assumed Assessed Value at Sale 90.00% $405,080 $472,593 $533,062 $592,943 Available for Mortg. Principal and Interest $1,665 $1,942 $2,191 $2,437 Supportable Mortgage $293,229 $342,100 $385,872 $429,219 Plus: Downpayment @ 10.00% $32,580 $38,010 $42,870 $47,690 Affordable Sales Price (Rounded) $325,800 $380,100 $428,700 $476,900 120.0% of AMI
Annual Gross Income $153,468 $175,392 $197,316 $219,240 Affordable Monthly Housing Expense $3,837 $4,385 $4,933 $5,481 Less: Monthly Utility Allowance ($188) ($208) ($265) ($324) Less: HOA/Maintenance Expense ($200) ($200) ($200) ($200) Less: Property Insurance ($100) ($100) ($100) ($100)
________ ________ ________ ________
Available for Principal, Interest, Taxes $3,349 $3,877 $4,368 $4,857 Less: Property Taxes 1.20% $655 $759 $855 $950
Supportable Mortgage Before Prop. Taxes $589,832 $682,824 $769,300 $855,423 Assumed Assessed Value at Sale 90.00% $655,369 $758,693 $854,778 $950,470 Available for Mortg. Principal and Interest $2,694 $3,118 $3,513 $3,907 Supportable Mortgage $474,407 $549,202 $618,755 $688,025 Plus: Downpayment @ 10.00% $52,710 $61,020 $68,750 $76,450 Affordable Sales Price (Rounded) $527,100 $610,200 $687,500 $764,500 (1) For single-family detached units. Source: San Mateo County Housing Authority, effective 3/1/21 Source: DRA

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Packet Pg. 175 Attachment: David Rosen & Associates EPA OPA Analysis (2076 : East Palo Alto Opportunity to Purchase Act) Table A-2
Affordable Home Sales Price Calculations, Owner Housing Condominium Units
City of East Palo Alto
2021
Assumptions
2021 HUD Median Household Income, San Mateo County $149,600 2021 HUD VLI Limit, Household Size of Four $91,350
2021 HUD Effective Median Income, HH Size of Four $182,700 Used in Calculations $182,700
Affordable Housing Expense As a % of Income 30%
No. of Bedrooms Studio 1 Bedroom 2 Bedroom 3 Bedroom
Household Size 1 Persons 2 Persons 3 Persons 4 Persons
Household Size Income Adjust. Factor 70% 80% 90% 100%
Owner-Paid Utility Allowance (1) $155 $168 $212 $262
Monthly HOA Fee/Maint. Cost $600
Monthly Property Insurance $100
Property Tax Rate (% of AV) 1.00%
Mortgage Interest Rate 5.50%
Term (Years) 30
Downpayment (% of Sales Price) 10.00%
Per Unit Affordable Sales Price by Unit Bedroom Count
Studio 1 Bedroom 2 Bedroom 3 Bedroom
50% AMI
Annual Income Limit $63,945 $73,080 $82,215 $91,350
Affordable Monthly Housing Expense $1,599 $1,827 $2,055 $2,284 Less: Monthly Utility Allowance ($155) ($168) ($212) ($262) Less: HOA/Maintenance Expense ($600) ($600) ($600) ($600) Less: Property Insurance ($100) ($100) ($100) ($100)
________ ________ ________ ________
Available for Principal, Interest, Taxes $744 $959 $1,143 $1,322 Less: Property Taxes 1.20% $146 $188 $224 $259
Supportable Mortgage Before Prop. Taxes $131,035 $168,901 $201,307 $232,833 Assumed Assessed Value at Sale 90.00% $145,594 $187,668 $223,675 $258,703 Available for Mortg. Principal and Interest $598 $771 $919 $1,063 Supportable Mortgage $105,392 $135,848 $161,913 $187,270 Plus: Downpayment @ 10.00% $11,710 $15,090 $17,990 $20,810 Affordable Sales Price (Rounded) $117,100 $150,900 $179,900 $208,100 80% AMI
Annual Gross Income $102,312 $116,928 $131,544 $146,160 Affordable Monthly Housing Expense $2,558 $2,923 $3,289 $3,654 Less: Monthly Utility Allowance ($155) ($168) ($212) ($262) Less: HOA/Maintenance Expense ($600) ($600) ($600) ($600) Less: Property Insurance ($100) ($100) ($100) ($100)
________ ________ ________ ________
Available for Principal, Interest, Taxes $1,703 $2,055 $2,377 $2,692 Less: Property Taxes 1.20% $333 $402 $465 $527
Supportable Mortgage Before Prop. Taxes $299,935 $361,930 $418,641 $474,120 Assumed Assessed Value at Sale 90.00% $333,262 $402,145 $465,157 $526,800 Available for Mortg. Principal and Interest $1,370 $1,653 $1,912 $2,165 Supportable Mortgage $241,241 $291,104 $336,717 $381,339 Plus: Downpayment @ 10.00% $26,800 $32,340 $37,410 $42,370 Affordable Sales Price (Rounded) $268,000 $323,400 $374,100 $423,700 120.0% of AMI
Annual Gross Income $153,468 $175,392 $197,316 $219,240 Affordable Monthly Housing Expense $3,837 $4,385 $4,933 $5,481 Less: Monthly Utility Allowance ($155) ($168) ($212) ($262) Less: HOA/Maintenance Expense ($600) ($600) ($600) ($600) Less: Property Insurance ($100) ($100) ($100) ($100)
________ ________ ________ ________
Available for Principal, Interest, Taxes $2,982 $3,517 $4,021 $4,519 Less: Property Taxes 1.20% $584 $688 $787 $884
Supportable Mortgage Before Prop. Taxes $525,195 $619,420 $708,186 $795,894 Assumed Assessed Value at Sale 90.00% $583,550 $688,245 $786,873 $884,327 Available for Mortg. Principal and Interest $2,398 $2,829 $3,234 $3,635 Supportable Mortgage $422,419 $498,205 $569,600 $640,145 Plus: Downpayment @ 10.00% $46,940 $55,360 $63,290 $71,130 Affordable Sales Price (Rounded) $469,400 $553,600 $632,900 $711,300 (1) For single-family detached units. Source: San Mateo County Housing Authority, effective 3/1/21 Source: DRA

7.1.b
Packet Pg. 176 Attachment: David Rosen & Associates EPA OPA Analysis (2076 : East Palo Alto Opportunity to Purchase Act) Table A-3
Affordable Rents and Supportable Mortgage By Income Level City of East Palo Alto
2021
Assumptions
2021 HUD Median Household Income, San Mateo County $149,600 2021 HUD VLI Limit, Household Size of Four $91,350
2021 HUD Effective Median Income, HH Size of Four $182,700 Used in Calculations $182,700
Affordable Housing Expense As a % of Income 30%
No. of Bedrooms Studio 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom 5 Bedroom Household Size 1.0 Persons 1.5 Persons 3.0 Persons 4.5 Persons 6.0 Persons 7.5 Persons Household Size Income Adjust. Factor 70% 75% 90% 104% 116% 128% Tenant-Paid Utility Allowance, San Mateo Co. Hsg. Author. (1) Condos/Apts. $92 $110 $148 $186 $224 $264
Annual Operating/Maintenance Expenses Per Unit $8,000
Vacancy Rate 5.00%
Mortgage Interest Rate 6.50%
Mortgage Amortization (Years) 30
Debt Coverage Ratio 1.15
Per Unit Supportable Mortgage Studio 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom 4 Bedroom 50% of Median
Annual Income Limit $63,945 $68,513 $82,215 $95,004 $105,966 $116,928 Affordable Monthly Housing Expense $1,599 $1,713 $2,055 $2,375 $2,649 $2,923 Less: Monthly Utility Allowance ($59) ($70) ($95) ($124) ($151) ($184) _________ _________ _________ _________ _________ _________ Affordable Monthly Rent $1,540 $1,643 $1,960 $2,251 $2,498 $2,739 Annual Gross Rental Income Per Unit $18,480 $19,716 $23,520 $27,012 $29,976 $32,868 Less: Vacancy (Underwriting) ($924) ($986) ($1,176) ($1,351) ($1,499) ($1,643) Annual Operating/Maintenance Expenses Per Unit ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) _________ _________ _________ _________ _________ _________ Net Operating Income Per Unit $9,556 $10,730 $14,344 $17,661 $20,477 $23,225 Available for Debt Service $8,310 $9,331 $12,473 $15,358 $17,806 $20,195 Supportable Mortgage Per Unit $109,600 $123,000 $164,400 $202,500 $234,800 $266,300

80.0% of AMI
Annual Income Limit $102,312 $109,620 $131,544 $152,006 $169,546 $187,085 Affordable Monthly Housing Expense $2,558 $2,741 $3,289 $3,800 $4,239 $4,677 Less: Monthly Utility Allowance ($59) ($70) ($95) ($124) ($151) ($184) _________ _________ _________ _________ _________ _________ Affordable Monthly Rent $2,499 $2,671 $3,194 $3,676 $4,088 $4,493 Annual Gross Rental Income Per Unit $29,988 $32,052 $38,328 $44,112 $49,056 $53,916 Less: Vacancy (Underwriting) ($1,499) ($1,603) ($1,916) ($2,206) ($2,453) ($2,696) Annual Operating/Maintenance Expenses Per Unit ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) _________ _________ _________ _________ _________ _________ Net Operating Income Per Unit $20,489 $22,449 $28,412 $33,906 $38,603 $43,220 Available for Debt Service $17,816 $19,521 $24,706 $29,484 $33,568 $37,583 Supportable Mortgage Per Unit $234,900 $257,400 $325,700 $388,700 $442,600 $495,500 120% of Median
Annual Income Limit $153,468 $164,430 $197,316 $228,010 $254,318 $280,627 Affordable Monthly Housing Expense $3,837 $4,111 $4,933 $5,700 $6,358 $7,016 Less: Monthly Utility Allowance ($92) ($110) ($148) ($186) ($224) ($264) _________ _________ _________ _________ _________ _________ Affordable Monthly Rent $3,745 $4,001 $4,785 $5,514 $6,134 $6,752 Annual Gross Rental Income Per Unit $44,940 $48,012 $57,420 $66,168 $73,608 $81,024 Plus: Miscellaneous Income ($187) ($200) ($239) ($276) ($307) ($338) Less: Management Fee/Expense ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) ($8,000) Annual Operating/Maintenance Expenses Per Unit ($1,499) ($1,603) ($1,916) ($2,206) ($2,453) ($2,696) _________ _________ _________ _________ _________ _________ Net Operating Income Per Unit $38,998 $42,210 $52,049 $61,201 $68,983 $76,743 Available for Debt Service $33,912 $36,705 $45,260 $53,218 $59,985 $66,733 Supportable Mortgage Per Unit $447,100 $483,900 $596,700 $701,600 $790,900 $879,800 (1) For condos and apartment units. Source: San Mateo County Housing Authority, effective 3/1/21 Source: DRA

7.1.b
Packet Pg. 177 Attachment: David Rosen & Associates EPA OPA Analysis (2076 : East Palo Alto Opportunity to Purchase Act) Table A-4
Utility Allowances
San Mateo County
East Palo Alto ADU Analysis
2021
No. of Bedrooms Studio 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom Apartment/Condo/Duplex
Heating
Natural Gas $17 $21 $24 $26 $29
Electric $16 $19 $24 $29 $34
Cooking
Natural Gas $4 $4 $6 $8 $10
Electric $7 $8 $11 $15 $18
Water Heating
Natural Gas $8 $9 $13 $18 $22
Electric $15 $18 $23 $28 $33
Other Electric $21 $25 $37 $52 $66
Water $69 $71 $90 $111 $133
Trash $27$0 $27$0 $27$0 $27$0 $27$0
_____ _____ _____ _____ _____
Total--All Electric $59 $70 $95 $124 $151
Total--Natural Gas (& Other Electric) $50 $59 $80 $104 $127 Assumed Tenant-Paid Utilities (1) $59 $70 $95 $124 $151 Assumed Owner-Paid Utilities (2) $155 $168 $212 $262 $311 Single-Family Detached
Heating
Natural Gas $25 $30 $34 $38 $42
Electric $34 $40 $47 $54 $61
Cooking
Natural Gas $4 $4 $6 $8 $10
Electric $7 $8 $11 $15 $18
Water Heating
Natural Gas $10 $12 $17 $22 $27
Electric $19 $22 $29 $35 $42
Other Electric $32 $40 $61 $82 $103
Water $69 $71 $90 $111 $133
Trash $27 $27 $27 $27 $27
_____ _____ _____ _____ _____
Total--All Electric $92 $110 $148 $186 $224
Total--Natural Gas (& Other Electric) $71 $86 $118 $150 $182 Assumed Tenant-Paid Utilities (1) $92 $110 $148 $186 $224 Assumed Owner-Paid Utilities (2) $188 $208 $265 $324 $384 (1) Assumes tenant pays electrict heating, cooking and water heating, and other electric. (2) Assumes owners pay electric heating, cooking, water heating, other electric, water, sewer and trash.

Source: Housing Authority of the County of San Mateo, effective 3/01/2021

7.1.b
Packet Pg. 178 Attachment: David Rosen & Associates EPA OPA Analysis (2076 : East Palo Alto Opportunity to Purchase Act) Proposed Language for Administrative Guidelines – Certification of Qualified Nonprofits
Pursuant to Chapter 14.26.050 of the East Palo Alto Municipal Code, the City Council shall certify and recertify Qualified Nonprofits via an application process as set forth in the Administrative Guidelines.

This application process for Qualified Nonprofits shall, at a minimum, require nonprofit organizations to meet the following threshold eligibility criteria by demonstrating the following:
a. The organization is exempt from federal income tax under 26 USC Section 501(c)(3), or a California cooperative corporation; b. The organization has capacity to acquire, provide and manage affordable housing for extremely low, very low, and low income households; c. The organization has a commitment to the provision of affordable housing for extremely low, very low, low, and moderate income residents, and to preventing the displacement of such residents;
d. The organization has a commitment to community engagement and experience working in East Palo Alto directly or with East Palo Alto-based organizations;
e. The organization has at least five (5) years of experience acquiring and developing affordable residential properties, or is partnering with another organization to acquire and develop, affordable residential properties.

7.1.c
Packet Pg. 179 Attachment: Qualified Nonprofit Criteria for Administrative Guidelines (2076 : East Palo Alto Opportunity to Purchase Act)

EAST PALO ALTO

CITY COUNCIL

STAFF REPORT
DATE: January 18, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: James Colin, Executive Assistant
James Colin, Executive Assistant
SUBJECT: COVID-19 Vaccination Program Regular Update
Recommendation
Discuss the COVID-19 vaccination program update and provide direction to staff.

Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:

Ø Priority #5: Improve Communication and Enhance Community Engagement Ø Priority #6: Create a Healthy and Safe Community
Background
On a weekly basis the Mayor and Vice Mayor meet with key staff to discuss and coordinate City of East Palo Alto COVID-19 Vaccination Program efforts and progress.

The purpose of this report is to present the information regarding the abovementioned program and efforts in an open forum engaging all members of the Council and the public.

Analysis
See Attachment 1.

The attachments included in this report routinely cover the items typically discussed at the COVID-19 vaccination briefing with the Mayor and Vice Mayor as well as key staff.

The format is discussed as follows:

1. Review of previous week vaccination efforts. This item identifies each event by the date at which it occurred, the time, the location provider, the address, and the vaccination

8.1 Packet Pg. 180
numbers (sometimes by vaccination type and 1st or 2nd dose).

2. Review of upcoming vaccination events for the week. This follows the same content format as number 1 but concentrates on the efforts to make the upcoming event organized and successful.

3. Outreach efforts (not always discussed). This item typically involved a review of outreach efforts as discussed in item 2 but in more detail and/or a change in strategy as circumstances may change.

4. Future Efforts

5. Incentives (Previously considered).

Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin outside City Hall and making the agenda and report available at the City’s website and the San Mateo County Library at 2145 University Avenue, East Palo Alto.

Fiscal Impact
N/A as this is an informational report.

Attachments

1. Draft Vaccination Meeting Agenda 1-18-2022

8.1 Packet Pg. 181
Draft Vaccination Meeting Agenda
Tuesday, January 18, 2022

1. Review of previous week vaccination efforts:

Ravenswood Family Health Clinic
City of
EPA Pfizer Adult Pfizer Pedi Moderna J & J Total
1 st 2nd 3rd 1st 2nd 3rd 1st 2nd 3rd 1st 2nd
Thurs 9 8 78 0 0 0 7 3 80 0 0 185
Sat 11 11 44 11 38 0 2 0 48 0 0 165
Total 20 19 122 11 38 0 9 3 128 0 0 350
DATE LOCATION TYPE 1
st Dose 2nd Dose 3rd Dose Booster TOTAL
1/04/22 YMCA EPA
Pfizer
Moderna
Janssen
17 1
-
8 -
-
-
113
83 2
225
1/05/22 YMCA EPA
Pfizer
Moderna
Janssen
6 4
1 4
-
-
-
96 56
7 174
1/6/22 YMCA EPA
Pfizer
Moderna
Janssen
6 2
1 2
-
-
-
119
31 3
163
1/8/22 Woodland Park
Apartments
Pfizer
(peds)
Pfizer
Moderna
Janssen
67 24
2 -
64 34
3 -
-
-
135
93 -
422
GRAND
TOTAL 131 115 - 738 984

8.1.a
Packet Pg. 182 Attachment: Draft Vaccination Meeting Agenda 1-18-2022 (2070 : COVID-19 Vaccination Program Regular Update)

2. Review of Upcoming vaccination event for week
Date Time Location Address
Tuesday, January 11, 2022 6:00pm –
9:00pm
Lewis And Joan Platt East Palo
Alto Family Ymca 2180 Euclid Ave, East Palo Alto, CA
Tuesday, January 11, 2022 3:00pm –
7:00pm Costaño Elementary School 2695 Fordham Street, East Palo Alto, CA Wednesday, January 12, 2022
6:00pm –
9:00pm
Lewis And Joan Platt East Palo
Alto Family Ymca 2180 Euclid Ave, East Palo Alto, CA
Wednesday, January 12, 2022 3:00pm –
7:00pm
Los Robles Boys and Girls Club
Children’s Clinic 2031 Pulgas Avenue, East Palo Alto, CA Thursday, January 13, 2022
6:00pm9:00pm
Lewis And Joan Platt East Palo
Alto Family Ymca 2180 Euclid Ave, East Palo Alto, CA
Thursday, January 13, 2022
5:00pm7:00pm RFHC 1885 Bay Rd, East Palo Alto, CA 94303 Saturday, January 15, 2022 11:00am6:00pmWoodland Park Apartments 45 Newell Rd., East Palo Alto, CA 94303

8.1.a
Packet Pg. 183 Attachment: Draft Vaccination Meeting Agenda 1-18-2022 (2070 : COVID-19 Vaccination Program Regular Update)

East Palo Alto City CouncilJanuary 18, 2022

East Palo Alto City Council
January 18, 2022