RESOLUTION NO. 2022-42
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FOSTER CITY PROVIDING
DIRECTION REGARDING OPERATIONAL ASPECTS OF THE WORKFORCE
HOUSING PROJECT AND APPROVING AMENDED REVENUES AND
EXPENDITURES BUDGET FOR THE REMAINDER OF FY 2021 -2022 FOR THE WORKFORCE HOUSING FUND (FUND 139)
CITY OF FOSTER CITY
WHEREAS, the Development Agreement between the City of Foster City and Pilgrim Triton Phase III FC, LP, dated October 31, 2018, includes provisions for the development by Pilgrim Triton Phase III FC, LP consisting of twenty -two (22) rental housing units with affordability restrictions at various affordable rents (“Workforce Housing Project”), and also provides the City the option to purchase the Workforce Housing Project; and
WHEREAS, the City Council adopted Resolution No. 2019-72 at its July 1, 2019 regular meeting, exercising its option to purchase the Workforce Housing Project; and
WHEREAS, the Affordable Housing Regulatory Agreement for the Workforce Housing Project recorded on January 15, 2021, requires the 22 units to be made available at rents affordable to households of very low-, low-, moderate-, and 130% of Area Median Income; and
WHEREAS, on March 7, 2022 , the City Council adopted Resolution No. 2022 -22 to approve a revenue and expenditure budge t for the remainder of FY 2021 -22 and authorized the Finance Director to make the corresponding budget appropriations in the Workforce Housing Fund 139; now, therefore, be it
RESOLVED, that the City Council of the City of Foster City does hereby direct that City staff implement the following measures with respect to the Workforce Housing Project:
1. Acknowledge that a HIP Housing Affordable Ventures (HHAV) employee will occupy one (1) of the eight (8) Workforce housing units, consistent with State requirements for an on-site management employee;
2. For the seven (7) remaining Workforce housing units, set the rents as affordable to low-income households, while acknowledging that these units are not restricted to occupancy by low income households pursuant to the Affordable Housing Regulatory Agreement.
3. Align the application of preference categories for the two (2) fully accessible Workforce housing units with a new preference category of “persons with mobility- related disabilities” as the first preference category for those two (2) Workforce units, only, followed by the other preference categories as previously approved for DocuSign Envelope ID: 3138CFF0-4D37-434A-9709-8A28C3B31D1F City Resolution No. 2022-42
the Workforce housing units.
4. Direct HHAV to advertise the availability of applications for the Workforce housing units, to create a separate waitlist application and lottery process for the seven (7) Workforce housing units using the preference categories , as modified herein, for the Workforce units and invite those who applied for the BMR unit waitlist to apply; and
5. Direct staff to allocate the net income from the Workforce Project to repay the Capital Asset and Acquisition Replacement Fund (CAARF); and, be it
FURTHER RESOLVED, that the City Council of the City of Foster City does hereby approve an amendment to the revenue and expenditure budget for the remainder of FY 2021-2022 and authorize the Finance Director to make the corresponding budget appropriations in the Workforce Housing Fund 139, as attached in Exhibit A.
PASSED AND ADOPTED as a resolution of the City Council of the City of Foster City at the regular meeting held on the 18th day of April, 2022, by the following vote:
AYES: Councilmembers Froomin, Gehani, Hindi, and Mayor Awasthi NOES: Councilmember Sullivan
ABSENT: None
ABSTAIN: None
RICHA AWASTHI, MAYOR
ATTEST:
PRISCILLA SCHAUS, CITY CLERK
BY: YELENA CAPPELLO, DEPUTY CITY CLERK
DocuSign Envelope ID: 3138CFF0-4D37-434A-9709-8A28C3B31D1F
Draft 5-Year Operating Budget 2021-2026
501 Pilgrim Drive, Foster City
Line
Item
Account Description 2021-2022 2022-2023 2023-2024 2024-2025 2025-2026 2026-2027 2021-2027 Total
Comments/Assumptions/Source of Data
First fiscal year is for May, June only for 2022 (.167) 1 Rent Revenue - Gross Potential 104,200$ 623,952$ 642,671$ 661,951$ 681,809$ 702,263$ 3,416,846$ See Rent Schedule sheet; 3% increase per year. Incorporates redesignations for 5 moderate one-bedrooms to low and very low income (2 very low and 3 low) and recommended redesignation of workforce units to low income. Rent schedule is from City with HHAV input.
2 Tenant Assistance Payments -$ -$ -$ -$ -$ -$ -$ No rental assistance. 3 Management unit 3,206$ 19,200$ 19,776$ 20,369$ 20,980$ 21,610$ 105,142$ Does not include rent reduction for onsite unit - see administrative expenses for discount. Assumes manager unit will be occupied in May.
4 Total 107,406$ 643,152$ 662,447$ 682,320$ 702,790$ 723,873$ 3,521,988$ Vacany
5 Vacancy (5,210.00)$ (18,719)$ (19,280)$ (19,859)$ (20,454)$ (21,068)$ (104,589)$ Assumes 5% vacancy rate in year one; 3% in subsequent years; excludes management unit.
6 Total (5,210)$ (18,719)$ (19,280)$ (19,859)$ (20,454)$ (21,068)$ (104,589)$ Other Revenue
7 Tenant Charges - Late Fees 60$ 720$ 720$ 720$ 720$ 720$ 3,660$ Late fees; assumes $30 late fee for 10%, or 2 units, per month; no increase in fee over 5 years. Estimated by HHAV. First fisca year assumes two late fees in June only.
8 Tenant Charges - Additional or
Replacement Key Fobs; Cardkeys
1,200$ 200$ 200$ 200$ 200$ 200$ 2,200$ 2 cardkeys/fobs included for each unit; additionals cost $100; replacement of lost keycard or fob is $100. Assumes 44 included; 10 additional; 2 replacement per year.Estimated by HHAV. 9 Tenant Charges -
Cleaning/Damage/Repair to Units
-$ 500$ 515$ 530$ 546$ 563$ 2,655$ Tenant damages; nominal amount per year; 3% increase; $0 in first fiscal year. Estimated by HHAV.
10 Credit Reporting Fees 1,680$ 70$ 70$ 70$ 70$ 70$ 2,030$ Assumes total adult occupancy of property of 48 adults @ $35 per application for lease up; assumes 2 applications each year thereafter.Estimated by HHAV.
11 Tenant Utility Charges through Ratio
Utility Billing System (RUBS)
14,304$ 60,816$ 62,640$ 64,520$ 66,455$ 68,449$ 337,184$ For water, gas, trash; see Expenses below for each line item. 12 Interest earned 3$ 42$ 65$ 88$ 112$ 159$ 469$ Reserve accounts interest @ .1%. See Reserve Analysis. City proforma used 2%; HHAV recommends .1% to be conservative.
Estimated by HHAV.
13 Interest earned on deposits 100$ 601$ 619$ 637$ 657$ 676$ 3,290$ Per City's proforma. These values were not estimated by HHAV. 14 Total 17,348$ 62,949$ 64,829$ 66,766$ 68,760$ 70,837$ 351,489$ 15 Gross Margin 119,544$ 687,382$ 707,995$ 729,227$ 751,096$ 773,643$ 3,768,887$
2. City Council Approved Changes 3/7/2022 PLUS RECOMMENDED REDESIGNATION OF WORKFORCE UNITS Color Code: Blue = Revenue; Orange = Expense; Pink = from City Proforma or data provided by City Rental Revenue - with Recommended Revisions to Affordability Designations for 7 workforce and 5 moderate units
REVENUE - WITH RECOMMENDED REVISIONS
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Attachment 2
Draft 5-Year Operating Budget 2021-2026
501 Pilgrim Drive, Foster City
Line
Item
Account Description 2021-2022 2022-2023 2023-2024 2024-2025 2025-2026 2026-2027 2021-2027 Total
Comments/Assumptions/Source of Data
2. City Council Approved Changes 3/7/2022 PLUS RECOMMENDED REDESIGNATION OF WORKFORCE UNITS Color Code: Blue = Revenue; Orange = Expense; Pink = from City Proforma or data provided by City
REVENUE - WITH RECOMMENDED REVISIONS
EXPENSE
HHAV Management Fees (paid by City of Foster City to HHAV per contract 16 HHAV Lease-up fees 10,500$ 1,000$ 1,000$ 1,000$ 1,000$ 1,000$ 15,500$ Leasing fee for move-ins @$500 per move in; 21 units; assumes 2 move ins/turnovers in subsequent years; per contract between City and HHAV.
17 HHAV Unit Set up fee (one time) 2,100$ -$ -$ -$ -$ 2,100$ $100 per unit, except manager's unit; one time fee; per contract between City and HHAV.
18 HHAV Management Fees 11,340$ 22,680$ 24,473$ 25,207$ 25,963$ 26,742$ 136,405$ $90 per door per month, except for manager's unit; January through June in FY 21-22. Per contract between City and HHAV. 19 Total 23,940$ 23,680$ 25,473$ 26,207$ 26,963$ 27,742$ 154,005$ City Administrative Expenses First fiscal year is for May and June only 20 Miscellaneous Admin. Epenses 84$ 500$ 515$ 530$ 546$ 563$ 2,738$ Placeholder estimate only. Amount to be determined by City of Foster City if applicable. Estimated by HHAV.
21 City Staff Salaries and Benefits 3,266$ 12,782$ 13,165$ 13,560$ 13,967$ 14,386$ 71,128$ See Foster City Employee Costs Sheet. Not estimated by HHAV. 22 Manager's Unit Rent Discount (1,657)$ (9,924)$ (10,222)$ (10,528)$ (10,844)$ (11,170)$ (54,345)$ Rent discount; 3% increase per year - see Rent Schedule 23 Total 1,692$ 3,358$ 3,459$ 3,563$ 3,669$ 3,780$ 19,520$ Property Utility Expenses - paid by City to Utility Provider First fiscal year is for April, May, June only for 2022 (.25) 24 Common Area Electricity 4,500$ 18,000$ 18,900$ 19,845$ 20,837$ 21,879$ 103,961$ Common areas only; 5% increase per year; tenants have their own meters; not billed to tenants through RUBS. Assumption is $1500 per month for FY 2022-2023. Review after 3 months of actuals.
Estimated by HHAV.
25 Gas - water heating only 672$ 2,688$ 2,769$ 2,852$ 2,937$ 3,025$ 14,943$ 9 one-beds; 4 1-bed plus den (treated as 2-bed); 9 2-beds: $9 for 1- bed; $11 for 2-beds; 3% increase per year; recaptured through RUBS. Amounts are based on 2021 Utility Allowance Schedule.
Reviewafter 3 months of actuals.
26 Water - landscaping common area
plus tenant usage
11,850$ 51,000$ 52,530$ 54,106$ 55,729$ 57,401$ 282,616$ Estimated at $125 per unit per month recaptured through RUBS (includes washer use); 3% increase in subsequent years; recaptured through RUBS; common area: $1500 per month; 3% increase per year. Review in July 2022 after 3 months of actuals.
Landscaping is not billed to tenants through RUBS.
27 Trash Removal 1,782$ 7,128$ 7,342$ 7,562$ 7,789$ 8,023$ 39,626$ $27 per unit per month recaptured through RUBS; 3% increase in subsequent years; recaptured through RUBS; common area: $1000 per month; 3% increase per year. Amount is from 2021 UA Schedule. Review after 3 months of actuals.
General notes on expenses: 2021-2022 assumes .167 for expenses (2 months - May, June) in year one except as noted. Many of the expenses will start before tenants move in so an extra month in the first fiscal year is included.
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Draft 5-Year Operating Budget 2021-2026
501 Pilgrim Drive, Foster City
Line
Item
Account Description 2021-2022 2022-2023 2023-2024 2024-2025 2025-2026 2026-2027 2021-2027 Total
Comments/Assumptions/Source of Data
2. City Council Approved Changes 3/7/2022 PLUS RECOMMENDED REDESIGNATION OF WORKFORCE UNITS Color Code: Blue = Revenue; Orange = Expense; Pink = from City Proforma or data provided by City REVENUE - WITH RECOMMENDED REVISIONS 28 Sewer 6,166$ 28,177$ 30,994$ 31,614$ 32,208$ 32,208$ 161,366$ Assumes $93.42 per unit in FY 2021-22, $106.73 in 22-23, $117.40 in 23-24, $119.75 in 24-25 and $122 (estimated) for 25-26 per City of Foster City Wastewater Rate sheet. Budgeted for 22 units. Review after 3 months of actuals.
29 Total 24,970$ 106,993$ 112,534$ 115,979$ 119,501$ 122,536$ 602,512$ HHAV Property Operating & Maintenance Expenses - Paid by City to HHAV First fiscal year is for May, June only (.167) 30 Maintenance Technician and Property
Manager Salaries and Benefits
13,786$ 33,376$ 34,377$ 35,409$ 36,471$ 37,565$ 190,984$ See HHAV Employee Costs Sheet 31 Legal Expenses -$ 1,300$ 1,300$ 1,300$ 1,300$ 1,300$ 6,500$ Est. one eviction or other legal advice each year except first fiscal year; HHAV to invoice city.
32 Credit/Background Checks 1,500$ 60$ 60$ 60$ 60$ 60$ 1,800$ Actual cost of credit/background checks - estimate 2 per year; HHAV to invoice city. Assumes 50 adults for 2021-22.
33 Miscellaneous Operating and
Maintenance
167$ 1,000$ 1,030$ 1,061$ 1,093$ 1,126$ 5,476$ Review after 3 months of actuals. 34 Technology - property management
software
257$ 1,540$ 1,586$ 1,634$ 1,683$ 1,733$ 8,433$ Yardi property management software fees and support services. 35 Repairs and Maintenance - HHAV time
billed to project
2,425$ 14,520$ 14,956$ 15,404$ 15,866$ 16,342$ 79,513$ See Repairs & Maintenance Rate Sheet; if HHAV needs to call a 3rd party vendor; bills will be paid directly to third party. See line item 54. Review in July 2022 after 3 months of actuals. 36 Materials and Supplies - HHAV 915$ 5,480$ 5,644$ 5,814$ 5,988$ 6,168$ 30,009$ See Repairs & Maintenance Rate Sheet. Billed at no markup.Review in July 2022 after 3 months of actuals.
37 Total 18,135$ 57,276$ 53,309$ 54,867$ 56,473$ 58,126$ 298,186$ Other Property Operating & Maintenance Expenses - Paid by City of Foster City to Contractors First fiscal year is for May, June only for (.167) 38 RUBS 3rd party management fees 341$ 1,056$ 1,088$ 1,120$ 1,154$ 1,189$ 5,948$ $4 per month per door monthly fee plus $7.50 per door set up fee (one time). Provider is National Utility Billing Systems; have quote.
Assumes 3 months only in FY 2021-22. May choose to do in house for first year.
39 Pest Control 418$ 2,500$ 2,575$ 2,652$ 2,732$ 2,814$ 13,690$ $2500 per year; 3% increase in subsequent years; estimate based on similar sized properties. Review after 3 months of actuals.
Estimated by HHAV.
40 Security-Fire Alarm Monitoring 1,603$ 9,600$ 9,888$ 10,185$ 10,490$ 10,805$ 52,571$ $800 per month; 3% increase in subsequent years; estimate based on similar sized properties. Review after 3 months of actuals.
Estimated by HHAV.
41 Landscape Contract 4,342$ 26,000$ 26,780$ 27,583$ 28,411$ 29,263$ 142,380$ $500 per week; FY 21-22 is for 3/1-6/30 only; 3% increase in subsequent years; check with City regarding common areas shared with condos; review after 3 months of actuals. Estimated by HHAV. 42 Property Telephone Line Expense for
Fire Alarm
100$ 103$ 106$ 109$ 113$ 116$ 647$ one phone line for fire alarm panel/monitoring; review after 3 months of actuals.
43 Repairs - Outside Contractors 1,102$ 6,600$ 6,798$ 7,002$ 7,212$ 7,428$ 36,142$ $300 per unit per year; 3% increase in subsequent years; Review after 3 months of actuals. Estimated by HHAV.
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Draft 5-Year Operating Budget 2021-2026
501 Pilgrim Drive, Foster City
Line
Item
Account Description 2021-2022 2022-2023 2023-2024 2024-2025 2025-2026 2026-2027 2021-2027 Total
Comments/Assumptions/Source of Data
2. City Council Approved Changes 3/7/2022 PLUS RECOMMENDED REDESIGNATION OF WORKFORCE UNITS Color Code: Blue = Revenue; Orange = Expense; Pink = from City Proforma or data provided by City REVENUE - WITH RECOMMENDED REVISIONS 44 Miscellaneous Operating and Maintenance
167$ 1,000$ 1,030$ 1,061$ 1,093$ 1,126$ 5,476$ Contingency; review after one year of actuals.Estimated by HHAV. 45 Total 8,073$ 46,859$ 48,265$ 49,713$ 51,204$ 52,740$ 256,854$ Property Taxes & Insurance Expense - paid by the City of Foster City 46 Real Estate Taxes 1,218$ 1,242$ 1,267$ 1,293$ 1,319$ 1,345$ 7,684$ Possessory Interest Tax: 1.169% of annual rent then 2%/yr per 2/1/22 email 47 Franchise Tax -$ -$ -$ -$ -$ -$ -$ N/A 48 Misc. Tax, License & Permits -$ -$ -$ -$ -$ -$ -$ N/a 49 Property and Liability Insurance 8,055$ 33,185$ 34,180$ 35,205$ 36,262$ 37,349$ 184,236$ Alliant estimates premium for the new location is $32,218. Quote provided to City. Begins April 2022 (.25 in first fiscal year) 50 Total 9,273$ 34,427$ 35,447$ 36,498$ 37,580$ 38,694$ 191,920$ 41 TOTAL OPERATING EXPENSES 86,083$ 272,592$ 278,487$ 286,827$ 295,390$ 303,618$ 1,522,997$ 52 NET ORDINARY INCOME 33,461$ 414,790$ 429,509$ 442,400$ 455,705$ 470,024$ 2,245,890$ Financial Expense
53 City's financial expense -$ -$ To be determined by City of Foster City if applicable 54 Total -$ -$ -$ -$ -$ -$ Replacement Reserve
55 Replacement Reserve Expense -$ -$ -$ -$ -$ 22,557$ 22,557$ See separate Reserve Analysis; expenses start in Year 5; some data provided by Contractor; remainder estimated by HHAV. 56 Replacement Reserve Fund - initial
contribution
20,000$ 20,000$ Per City Staff Meeting November 21, 2021 57 Replacement Reserve Fund - annual
Contribution
-$ 22,000$ 22,660$ 23,340$ 24,040$ 24,761$ 116,801$ $22,000 per year contribution, 3% increase per year - See separate Reserve Analysis. $22,000 annual contribution is from City's proforma. Review annually to ensure sufficient reserves. 58 Total 20,000$ 22,000$ 22,660$ 23,340$ 24,040$ 47,318$ 159,358$ 59 TOTAL OTHER EXPENSE 20,000$ 22,000$ 22,660$ 23,340$ 24,040$ 47,318$ 159,358$ 60 TOTAL EXPENSE 106,083$ 294,592$ 301,147$ 310,166$ 319,430$ 350,936$ 1,682,355$ 61 CASH FLOW 13,461$ 392,790$ 406,849$ 419,061$ 431,665$ 422,706$ 2,086,532$
OTHER EXPENSES - FINANCIAL & REPLACEMENT RESERVE
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